10-Q

FORM 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2024

☐   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number 001-36423

HENNESSY ADVISORS, INC.

(Exact name of registrant as specified in its charter)

California	68-0176227
(State or other jurisdiction of	(IRS Employer
incorporation or organization)	Identification No.)
7250 Redwood Boulevard, Suite 200
Novato, California	94945
(Address of principal executive office)	(Zip code)

(415) 899-1555

(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of each exchange on which registered
Common stock, no par value	HNNA	The Nasdaq Stock Market LLC
4.875% Notes due 2026	HNNAZ	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒         No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒         No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒
Smaller reporting company	☒	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐         No ☒

As of May 6, 2024, there were 7,678,561 shares of common stock issued and outstanding.

HENNESSY ADVISORS, INC.

TABLE OF CONTENTS

PART I	Financial Information
Item 1	Unaudited Condensed Financial Statements	1
	Balance Sheets	1
	Statements of Income	2
	Statements of Changes in Stockholders’ Equity	3
	Statements of Cash Flows	4
	Notes to Unaudited Condensed Financial Statements	5
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 4	Controls and Procedures	24
PART II	Other Information
Item 1A	Risk Factors	24
Item 5	Other Information	24
Item 6	Exhibits	25
	Signatures	26

PART I:         FINANCIAL INFORMATION

Item 1:          Unaudited Condensed Financial Statements

Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)

	March 31,		September 30,
	2024		2023
Assets
Current assets
Cash and cash equivalents	$	59,593	$	60,476
Investments in marketable securities, at fair value		11		10
Investment fee income receivable		2,556		2,046
Interest income receivable		261		253
Prepaid expenses		732		669
Other accounts receivable		273		247
Total current assets		63,426		63,701
Property and equipment, net of accumulated depreciation of $1,422 and $2,287, respectively		295		305
Operating lease right-of-use asset		1,176		295
Management contracts		82,256		81,262
Other assets		182		156
Total assets	$	147,335	$	145,719
Liabilities and Stockholders' Equity
Current liabilities
Accrued liabilities and accounts payable	$	2,338	$	3,165
Operating lease liability		289		279
Income taxes payable		542		748
Total current liabilities		3,169		4,192
Notes payable, net of issuance costs		39,318		39,164
Long-term operating lease liability		864		-
Net deferred income tax liability		15,062		14,611
Total liabilities		58,413		57,967
Commitments and contingencies (Note 9)
Stockholders' equity
Common stock, no par value, 22,500,000 shares authorized; 7,678,215 shares issued and outstanding as of March 31, 2024, and 7,671,099 as of September 30, 2023		22,340		21,800
Retained earnings		66,582		65,952
Total stockholders' equity		88,922		87,752
Total liabilities and stockholders' equity	$	147,335	$	145,719

See Notes to Unaudited Condensed Financial Statements

1

Statements of Income

(In thousands, except share and per share amounts)

(Unaudited)

	Three Months Ended March 31,						Six Months Ended March 31,
	2024			2023			2024			2023
Revenue
Investment advisory fees	$	6,436		$	5,435		$	12,101		$	11,089
Shareholder service fees		504			481			983			972
Total revenue		6,940			5,916			13,084			12,061
Operating expenses
Compensation and benefits		2,253			1,930			4,119			3,788
General and administrative		1,464			1,276			3,188			2,845
Fund distribution and other		201			132			350			227
Sub-advisory fees		1,046			930			1,957			1,899
Depreciation		57			56			126			105
Total operating expenses		5,021			4,324			9,740			8,864
Net operating income		1,919			1,592			3,344			3,197
Interest expense		568			562			1,135			1,125
Interest income		(771	)		(580	)		(1,557	)		(1,047	)
Income before income tax expense		2,122			1,610			3,766			3,119
Income tax expense		582			415			1,026			805
Net income	$	1,540		$	1,195		$	2,740		$	2,314
Earnings per share
Basic	$	0.20		$	0.16		$	0.36		$	0.31
Diluted	$	0.20		$	0.16		$	0.36		$	0.30
Weighted average shares outstanding
Basic		7,676,099			7,574,360			7,674,134			7,573,397
Diluted		7,700,203			7,610,729			7,684,245			7,595,000
Cash dividends declared per share	$	0.14		$	0.14		$	0.28		$	0.28

See Notes to Unaudited Condensed Financial Statements

2

Statements of Changes in Stockholders' Equity

(In thousands, except share data)

(Unaudited)

	Six Months Ended March 31, 2024
								Total
	Common Stock				Retained			Stockholders'
	Shares		Amount		Earnings			Equity
Balance at September 30, 2023		7,671,099	$	21,800	$	65,952		$	87,752
Net income		-		-		1,200			1,200
Dividends paid		-		-		(1,055	)		(1,055	)
Shares issued for auto-investments pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan		145		1		-			1
Shares issued for dividend reinvestment pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan		2,625		17		-			17
Stock-based compensation		-		246		-			246
Balance at December 31, 2023		7,673,869	$	22,064	$	66,097		$	88,161
Net income		-		-		1,540			1,540
Dividends paid		-		-		(1,055	)		(1,055	)
Shares issued for auto-investments pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan		1,100		8		-			8
Shares issued for dividend reinvestment pursuant to the 2024 Dividend Reinvestment and Stock Purchase Plan		2,577		17		-			17
Shares issued for auto-investments pursuant to the 2024 Dividend Reinvestment and Stock Purchase Plan		669		5		-			5
Stock-based compensation		-		246		-			246
Balance at March 31, 2024		7,678,215	$	22,340	$	66,582		$	88,922

Statements of Changes in Stockholders' Equity

(In thousands, except share data)

(Unaudited)

	Six Months Ended March 31, 2023
								Total
	Common Stock				Retained			Stockholders'
	Shares		Amount		Earnings			Equity
Balance at September 30, 2022		7,571,741	$	20,951	$	65,347		$	86,298
Net income		-		-		1,119			1,119
Dividends paid		-		-		(1,041	)		(1,041	)
Shares issued for auto-investments pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan		215		2		-			2
Shares issued for dividend reinvestment pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan		1,750		15		-			15
Stock-based compensation		-		262		-			262
Balance at December 31, 2022		7,573,706	$	21,230	$	65,425		$	86,655
Net income		-		-		1,195			1,195
Dividends paid		-		-		(1,041	)		(1,041	)
Shares issued for auto-investments pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan		199		2		-			2
Shares issued for dividend reinvestment pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan		1,952		16		-			16
Stock-based compensation		-		262		-			262
Balance at March 31, 2023		7,575,857	$	21,510	$	65,579		$	87,089

See Notes to Unaudited Condensed Financial Statements

3

Statements of Cash Flows

(In thousands)

(Unaudited)

	Six Months Ended March 31,
	2024			2023
Cash flows from operating activities
Net income	$	2,740		$	2,314
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		126			105
Unrealized gain on marketable securities		(1	)		(1	)
Change in right-of-use asset and operating lease liability		(7	)		(3	)
Amortization of note issuance costs		154			144
Deferred income taxes		451			655
Stock-based compensation		492			524
Change in operating assets and liabilities
Investment fee income receivable		(510	)		109
Interest income receivable		(8	)		-
Prepaid expenses		(63	)		(27	)
Other accounts receivable		(26	)		12
Other assets		(26	)		(1	)
Accrued liabilities and accounts payable		(827	)		(1,539	)
Income taxes payable		(206	)		(337	)
Net cash provided by operating activities		2,289			1,955
Cash flows from investing activities
Purchases of property and equipment		(116	)		(113	)
Payments related to management contracts		(994	)		(413	)
Net cash used in investing activities		(1,110	)		(526	)
Cash flows from financing activities
Proceeds from shares issued pursuant to the 2021 Dividend Reinvestment and Stock Repurchase Plan		9			-
Proceeds from shares issued pursuant to the 2024 Dividend Reinvestment and Stock Repurchase Plan		5			4
Dividend payments		(2,076	)		(2,051	)
Net cash used in financing activities		(2,062	)		(2,047	)
Net decrease in cash and cash equivalents		(883	)		(618	)
Cash and cash equivalents at the beginning of the period		60,476			58,487
Cash and cash equivalents at the end of the period	$	59,593		$	57,869
Supplemental disclosures of cash flow information
Cash paid for income taxes	$	781		$	487
Cash paid for interest	$	981		$	981
Dividend reinvestment issued in shares	$	34		$	31

See Notes to Unaudited Condensed Financial Statements

4

HENNESSY ADVISORS, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

(1) Basis of Financial Statement Presentation

The accompanying unaudited condensed balance sheet as of September 30, 2023, which has been derived from audited financial statements, and the unaudited interim condensed financial statements as of and for the three and six months ended March 31, 2024, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission and include the accounts of Hennessy Advisors, Inc. (the “Company,” “we,” “us,” or “our”). Certain information and footnote disclosures in these unaudited interim condensed financial statements, normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States, have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission for Quarterly Reports on Form 10-Q. In the opinion of management, the unaudited interim condensed financial statements reflect all adjustments necessary for a fair statement of the Company’s financial position at March 31, 2024, the Company’s operating results for the three and six months ended March 31, 2024 and 2023, and the Company’s cash flows for the six months ended March 31, 2024 and 2023. These unaudited interim condensed financial statements and notes should be read in conjunction with the Company’s audited financial statements and notes thereto for fiscal year 2023, which are included in the Company’s Annual Report on Form 10‑K for the fiscal year ended September 30, 2023.

The preparation of financial statements requires management to make estimates and assumptions. Making estimates requires management to exercise significant judgment. Accordingly, the actual results could differ substantially from those estimates.

The Company’s operating activities consist primarily of providing investment advisory services to 16 open-end mutual funds and one exchange‑traded fund (“ETF”) branded as the Hennessy Funds. The Company serves as the investment advisor to all classes of the Hennessy Cornerstone Growth Fund, the Hennessy Focus Fund, the Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy Cornerstone Large Growth Fund, the Hennessy Cornerstone Value Fund, the Hennessy Total Return Fund, the Hennessy Equity and Income Fund, the Hennessy Balanced Fund, the Hennessy Energy Transition Fund, the Hennessy Midstream Fund, the Hennessy Gas Utility Fund, the Hennessy Japan Fund, the Hennessy Japan Small Cap Fund, the Hennessy Large Cap Financial Fund, the Hennessy Small Cap Financial Fund, and the Hennessy Technology Fund (collectively, the “Hennessy Mutual Funds”), as well as to the Hennessy Stance ESG ETF. The Company also provides shareholder services to investors in the Hennessy Mutual Funds.

          The employee retention credit (“ERC”), as originally enacted on March 27, 2020, by the CARES Act, was a refundable tax credit against certain employment taxes equal to 50% of the qualified wages an eligible employer paid to employees and allowed claims through December 31, 2021, by eligible employers who retained employees during the COVID-19 pandemic. The Company filed Form 941-X to request an ERC from the Internal Revenue Service. In May 2023, the Company received an ERC of approximately $0.3 million plus accrued interest. For-profit entities do not have specific guidance to apply under accounting principles generally accepted in the United States to account for ERCs and therefore follow guidance in accordance with Accounting for Government Grants and Disclosure of Government Assistance ("IAS 20"). In accordance with IAS 20, the Company netted the credit against related payroll expense in the period received.

5

 

The Company’s operating revenues consist of contractual investment advisory and shareholder service fees paid to it by the Hennessy Funds. The Company earns investment advisory fees from each Hennessy Fund by, among other things:

● acting as portfolio manager for the fund or overseeing the sub‑advisor acting as portfolio manager for the fund, which includes managing the composition of the fund’s portfolio (including the purchase, retention, and disposition of portfolio securities in accordance with the fund’s investment objectives, policies, and restrictions), seeking best execution for the fund’s portfolio, managing the use of soft dollars for the fund, and managing proxy voting for the fund;

● performing a daily reconciliation of portfolio positions and cash for the fund;

● monitoring the liquidity of the fund;

● monitoring the fund’s compliance with its investment objectives and restrictions and federal securities laws;

● maintaining a compliance program (including a code of ethics), conducting ongoing reviews of the compliance programs of the fund’s service providers (including any sub‑advisor), including their codes of ethics, as appropriate, conducting onsite visits to the fund’s service providers (including any sub-advisor) as feasible, monitoring incidents of abusive trading practices, reviewing fund expense accruals, payments, and fixed expense ratios, evaluating insurance providers for fidelity bond, directors and officers and errors and omissions insurance, and cybersecurity insurance coverage, managing regulatory examination compliance and responses, conducting employee compliance training, reviewing reports provided by service providers, and maintaining books and records;

● if applicable, overseeing the selection and continued employment of the fund’s sub‑advisor, reviewing the fund’s investment performance, and monitoring the sub‑advisor’s adherence to the fund’s investment objectives, policies, and restrictions;

● overseeing service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal services to the fund;

● maintaining in‑house marketing and distribution departments on behalf of the fund;

● preparing or directing the preparation of all regulatory filings for the fund, including writing and annually updating the fund’s prospectus and related documents;

● for each annual report of the fund, preparing or reviewing a written summary of the fund’s performance during the most recent 12‑month period;

● monitoring and overseeing the accessibility of the fund on financial institution platforms;

● paying the incentive compensation of the fund’s compliance officer and employing other staff such as legal, marketing, national accounts, distribution, sales, administrative, and trading oversight personnel, as well as management executives;

● providing a quarterly compliance certification to the Board of Trustees of Hennessy Funds Trust (the “Funds’ Board of Trustees”); and

● preparing or reviewing materials for the Funds’ Board of Trustees, presenting to or leading discussions with the Funds’ Board of Trustees, preparing or reviewing all meeting minutes, and arranging for training and education of the Funds’ Board of Trustees.

6

 

The Company earns shareholder service fees from Investor Class shares of the Hennessy Mutual Funds by, among other things, maintaining a toll free number that the current investors in the Hennessy Funds may call to ask questions about their accounts and actively participating as a liaison between investors in the Hennessy Funds and U.S. Bank Global Fund Services.

Investment advisory and shareholder service fee revenues are earned and calculated daily by the Hennessy Funds’ accountants at U.S. Bank Global Fund Services and are subsequently reviewed by management.

The Company recognizes revenues when its obligations related to the investment advisory and shareholder services are satisfied, and it is probable that a significant reversal of the revenue amount would not occur in future periods. Management judgment is required in assessing the probability of significant revenue reversal and in identification of distinct services. Investment advisory and shareholder services are performed over time because investors in the Hennessy Funds are receiving and consuming the benefits as they are provided by the Company. Fees are based on contractual percentages of net asset values and recognized for services provided during the period, which are distinct from services provided in other periods. Such fees are affected by changes in net asset values, including market appreciation or depreciation, foreign exchange translation, and net inflows or outflows. Assets under management represent the broad range of financial assets the Company manages for the Hennessy Funds on a discretionary basis pursuant to investment management and shareholder servicing agreements that are expected to continue for at least 12 months. In general, reported assets under management reflect the valuation methodology that corresponds to the basis used for determining revenue. The fees are computed and billed monthly, at which time they are recognized in accordance with Accounting Standards Codification 606 — Revenue from Contracts with Customers.

The Company’s contractual agreements for investment advisory and shareholder services prove that a contract exists with fixed and determinable fees, and the services are rendered daily. The collectability is deemed probable because the fees are received from the Hennessy Funds in the month subsequent to the month in which the services are provided.

(2) Management Contracts Purchased

Throughout its history, the Company has completed 12 purchases of the assets related to the management of 33 investment funds, some of which were reorganized into already existing Hennessy Funds. In accordance with Financial Accounting Standards Board (“FASB”) guidance, the Company periodically reviews the carrying value of its management contracts asset to determine if any impairment has occurred. The fair value of the management contracts asset was estimated as of September 30, 2023, by applying the income approach and is based on management estimates and assumptions, including third‑party valuations that utilize appropriate valuation techniques. It was determined there was no impairment as of such date. As of March 31, 2024, management performed a qualitative analysis and determined it was more likely than not that there continued to be no impairment.

Under Accounting Standards Codification 350 — Intangibles - Goodwill and Other, intangible assets that have indefinite useful lives are not amortized but are tested at least annually for impairment. The Company considered various factors, such as likelihood of continued renewal, whether there are foreseeable limits on net cash flows, and whether the Company is dependent on a limited number of investors, in determining the useful life of the management contracts. Based on analysis, the Company considers the management contract asset to be an intangible asset with an indefinite useful life and no impairment as of the end of the current period. 

7

 

The Company completed its most recent asset purchases on  November 10, 2023, and February 23, 2024, when it purchased assets related to the management of the CCM Small/Mid-Cap Impact Value Fund and the CCM Core Impact Equity Fund (each, a “CCM Fund,” and together, the “CCM Funds”), respectively. These asset purchases added approximately $12 million and $59 million to the Company’s assets under management at the time of closing with respect to the CCM Small/Mid-Cap Impact Value Fund and the CCM Core Impact Equity Fund, respectively. Each purchase was consummated in accordance with the terms and conditions of that certain Transaction Agreement, dated as of April 26, 2023, between the Company and Community Capital Management, LLC. Upon completion of each transaction, the assets of the applicable CCM Fund were reorganized into the Hennessy Stance ESG ETF.

In the six months ended March 31, 2024, the Company capitalized $1.0 million in purchase price and other costs for the purchase of assets related to the management of the CCM Funds. 

(3) Investment Advisory Agreements

The Company has investment advisory agreements with Hennessy Funds Trust under which it provides investment advisory services to all classes of the 16 Hennessy Mutual Funds and the Hennessy Stance ESG ETF.

The investment advisory agreements must be renewed annually (except in limited circumstances) by (i) the Funds’ Board of Trustees or the vote of a majority of the outstanding shares of the applicable Hennessy Fund and (ii) the vote of a majority of the trustees of Hennessy Funds Trust who are not interested persons of the Hennessy Funds. If an investment advisory agreement is not renewed, it terminates automatically. There are two additional circumstances in which an investment advisory agreement terminates. First, an investment advisory agreement automatically terminates if the Company assigns them to another advisor (assignment includes “indirect assignment,” which is the transfer of the Company’s common stock in sufficient quantities deemed to constitute a controlling block). Second, an investment advisory agreement may be terminated prior to its expiration upon 60 days’ written notice by either the applicable Hennessy Fund or the Company.

8

 

As provided in each investment advisory agreement, the Company receives investment advisory fees monthly based on a percentage of the applicable fund’s average daily net asset value.

The Company has entered into sub-advisory agreements for the Hennessy Focus Fund, the Hennessy Equity and Income Fund, the Hennessy Japan Fund, the Hennessy Japan Small Cap Fund, and the Hennessy Stance ESG ETF. Under each of these sub-advisory agreements, the sub‑advisor is responsible for the investment and reinvestments of the assets of the applicable Hennessy Fund in accordance with the terms of such agreement and the applicable Hennessy Fund’s Prospectus and Statement of Additional Information. The sub‑advisors are subject to the direction, supervision, and control of the Company and the Funds’ Board of Trustees. The sub‑advisory agreements must be renewed annually (except in limited circumstances) in the same manner as, and are subject to the same termination provisions as, the investment advisory agreements.

In exchange for sub-advisory services, the Company (not the Hennessy Funds) pays sub-advisory fees to the sub-advisors out of its own assets. Sub‑advisory fees are calculated as a percentage of the applicable fund’s average daily net asset value.

(4) Fair Value Measurements

The Company applies Accounting Standards Codification 820 — Fair Value Measurement for all financial assets and liabilities, which establishes a framework for measuring fair value and expands disclosures about fair value measurements. The standard defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” It also establishes a fair value hierarchy consisting of the following three levels that prioritize the inputs to the valuation techniques used to measure fair value:

● Level 1 – Unadjusted, quoted prices in active markets for identical assets or liabilities that an entity has the ability to access at the measurement date;

● Level 2 – Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, and model‑derived valuations in which all significant inputs and significant value drivers are observable in active markets); and

● Level 3 – Significant unobservable inputs (including the entity’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable inputs are not available.

9

 

Based on the definitions, the following tables represent the Company’s assets categorized in the Level 1 to Level 3 hierarchies:

	March 31, 2024
	Level 1		Level 2		Level 3		Total
	(In thousands)
Money market fund deposits	$	59,380	$	-	$	-	$	59,380
Mutual fund investments		11		-		-		11
Total	$	59,391	$	-	$	-	$	59,391
Amounts included in:
Cash and cash equivalents	$	59,380	$	-	$	-	$	59,380
Investments in marketable securities		11		-		-		11
Total	$	59,391	$	-	$	-	$	59,391

	September 30, 2023
	Level 1		Level 2		Level 3		Total
	(In thousands)
Money market fund deposits	$	59,382	$	-	$	-	$	59,382
Mutual fund investments		10		-		-		10
Total	$	59,392	$	-	$	-	$	59,392
Amounts included in:
Cash and cash equivalents	$	59,382	$	-	$	-	$	59,382
Investments in marketable securities		10		-		-		10
Total	$	59,392	$	-	$	-	$	59,392

There were no transfers between levels during the three months ended March 31, 2024, or the year ended September 30, 2023.

The fair values of receivables, payables, and accrued liabilities approximate their book values given the short-term nature of those instruments.

The fair value of the 2026 Notes (see Note 7) was approximately $38.5 million as of March 31, 2024, based on the last trading price of the notes on that date (Level 1).

(5) Leases

The Company determines if an arrangement is an operating lease at inception. Operating leases are included in operating lease right‑of‑use assets and current and long‑term operating lease liabilities on the Company’s balance sheet. There were no long‑term operating leases as of September 30, 2023. During the quarter ended March 31, 2024, the Company renewed the lease for its office in Novato, California for an additional three years. The renewed lease will expire on July 31, 2027. The renewal created a long‑term operating lease as of March 31, 2024. There were no other long‑term operating leases as of March 31, 2024.

10

Upon renewal of the lease for its office in Novato, California, the Company recorded a right‑of‑use asset of $1.1 million on its balance sheet. Right‑of‑use assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right‑of‑use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments, the Company uses its incremental borrowing rate based on the information available at the lease commencement date. The Company’s lease terms may include options to extend the lease when it is reasonably certain that it will exercise any such options. For its leases, the Company concluded that it is not reasonably certain that any renewal options would be exercised, and, therefore, the amounts are not recognized as part of operating lease right‑of‑use assets or operating lease liabilities. Leases with initial terms of 12 months or less, and certain office equipment leases that are deemed insignificant, are not recorded on the balance sheet and are expensed as incurred and included within rent expense under general and administrative expense. Lease expense related to operating leases is recognized on a straight-line basis over the expected lease terms.

The Company’s most significant leases are real estate leases of office facilities. The Company leases office space under non-cancelable operating leases. Its principal executive office is located in Novato, California, and it has additional offices in Austin, Texas, Dallas, Texas, Boston, Massachusetts, and Chapel Hill, North Carolina. Only the office lease in Novato, California has been capitalized because the other operating leases have terms of 12 months or less, including leases that are month‑to‑month in nature. The classification of the Company’s operating lease right-of-use assets and operating lease liabilities and other supplemental information related to the Company’s operating leases are as follows:

	March 31, 2024
	(In thousands, except years and percentages)
Operating lease right-of-use assets	$	1,176
Current operating lease liability	$	289
Long-term operating lease liability	$	864
Weighted average remaining lease term		3.3
Weighted average discount rate		6.15	%
Operating lease liabilities arising from obtaining right-of-use assets	$	1,055

For the six months ended March 31, 2024, rent expense for all offices, which is recorded under general and administrative expense in the statements of income, totaled $0.3 million.

The undiscounted cash flows for future maturities of the Company’s operating lease liabilities and the reconciliation to the balance of operating lease liabilities reflected on the Company’s balance sheet are as follows:

	March 31, 2024
	(In thousands)
Remainder of fiscal year 2024	$	255
Fiscal year 2025		387
Fiscal year 2026		398
Fiscal year 2027		236
Total undiscounted cash flows		1,276
Present value discount		(123	)
Total operating lease liabilities		1,153

(6) Accrued Liabilities and Accounts Payable

Details relating to accrued liabilities and accounts payable reflected on the Company’s balance sheet are as follows:

	March 31, 2024		September 30, 2023
	(In thousands)
Accrued bonus liabilities	$	1,279	$	2,260
Accrued sub-advisor fees		387		310
Other accrued expenses		672		595
Total accrued liabilities and accounts payable	$	2,338	$	3,165

11

 

(7) Debt Outstanding

On October 20, 2021, the Company completed a public offering of 4.875% notes due 2026 in the aggregate principal amount of $40,250,000 (the “2026 Notes”), which included the full exercise of the underwriters’ overallotment option. The initial net proceeds received were approximately $38,607,000 after considering the impact of issuance costs and underwriter discounts. The 2026 Notes bear interest at 4.875% per annum, payable on the last day of each calendar quarter and at maturity, beginning December 31, 2021. The 2026 Notes mature on December 31, 2026.

The 2026 Notes are direct unsecured obligations, rank equally in right of payment with any of the Company’s future unsecured unsubordinated indebtedness, senior to any of the Company’s future indebtedness that expressly provides that it is subordinate to the 2026 Notes, effectively subordinate to all of the Company’s existing and future secured indebtedness, and structurally subordinated to all existing and future indebtedness and other obligations of any of the Company’s future subsidiaries.

(8) Income Taxes

The Company’s effective income tax rates for the six months ended March 31, 2024 and 2023, were 27.2% and 25.8%, respectively. 

The Company is subject to income tax in the U.S. federal jurisdiction and various state jurisdictions. As of March 31, 2024, the Company has identified 22 state tax jurisdictions in which it is subject to income tax.

(9) Commitments and Contingencies

In addition to the operating leases discussed in Note 5, the Company has contractual expense ratio limitations in place with respect to the Hennessy Midstream Fund, the Hennessy Technology Fund, and the Hennessy Stance ESG ETF. Such contractual expense ratio limitations will expire February 28, 2025, unless extended. Total fees waived during the six months ended March 31, 2024 and March 31, 2023, were $0.08 million in each period. To date, the Company has only waived fees based on contractual obligations but has the ability to waive fees at its discretion. Any decision to waive fees would apply only on a going forward basis.

The Company has no other commitments and no significant contingencies with original terms in excess of one year.

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(10) Equity

2024 Omnibus Incentive Plan

Effective as of February 8, 2024, the Company adopted, and the Company’s shareholders approved, the 2024 Omnibus Incentive Plan (the “Omnibus Plan”). The Omnibus Plan replaced the Amended and Restated 2013 Omnibus Incentive Plan. Under the Omnibus Plan, participants may be granted restricted stock units (“RSUs”), each of which represents an unfunded, unsecured right to receive a share of the Company’s common stock on the date specified in the recipient’s award. The Company issues new shares of its common stock when it is required to deliver shares to an RSU recipient. The RSUs granted under the Omnibus Plan vest over four years at a rate of 25% per year. The Company recognizes stock‑based compensation expense on a straight‑line basis over the four-year vesting term of each award.

A summary of RSU activity is as follows:

	Six Months Ended March 31, 2024
	Shares		Weighted Average Grant Date Fair Value per Share
Non-vested balance at beginning of period		349,613	$	6.92
Granted		-		-
Vested		-		-
Forfeited		-		-
Non-vested balance at end of period		349,613	$	6.92

Additional information related to RSUs is as follows:

	March 31, 2024
	(In thousands, except years)
Unrecognized compensation expense related to RSUs	$	1,893
Weighted average remaining years to expense for RSUs		2.7

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Dividend Reinvestment and Stock Purchase Plan

In January 2024, the Company adopted a Dividend Reinvestment and Stock Purchase Plan (the “DRSPP”), replacing the previous Dividend Reinvestment and Stock Purchase Plan that had been in place since 2021. The DRSPP provides shareholders and new investors with a convenient and economical means of purchasing shares of the Company’s common stock and reinvesting cash dividends paid on the Company’s common stock. Under the DRSPP and its predecessor plan, the Company issued 7,116 and 4,088 shares of common stock during the six months ended March 31, 2024 and 2023, respectively. The maximum number of shares of common stock that may be issued under the DRSPP is 1,530,000, of which 1,526,754 remained available for issuance as of March 31, 2024.

Stock Buyback Program

In August 2010, the Company’s Board of Directors adopted a stock buyback program pursuant to which the Company was authorized to repurchase up to 1,500,000 shares of its common stock in the open market, in privately negotiated transactions, or otherwise. The program has no expiration date. In August 2022, the Board of Directors increased the number of shares that may be repurchased under the program to 2,000,000 shares. As a result, 1,096,368 shares remain available for repurchase under the stock buyback program. The Company did not repurchase any shares of its common stock pursuant to the stock buyback program during the six months ended March 31, 2024.

(11) Earnings per Share and Dividends per Share

 The weighted average common shares outstanding used in the calculation of basic earnings per share and weighted average common shares outstanding, adjusted for common stock equivalents, used in the computation of diluted earnings per share were as follows:

	Three Months Ended March 31,
	2024		2023
Weighted average common stock outstanding, basic		7,676,099		7,574,360
Dilutive impact of RSUs		24,104		36,369
Weighted average common stock outstanding, diluted		7,700,203		7,610,729
	Six Months Ended March 31,
	2024		2023
Weighted average common stock outstanding, basic		7,674,134		7,573,397
Dilutive impact of RSUs		10,111		21,603
Weighted average common stock outstanding, diluted		7,684,245		7,595,000

For the three months ended March 31, 2024 and 2023, the Company excluded 176,809 and 0 common stock equivalents, respectively, from the diluted earnings per share calculations because they were not dilutive. For the six months ended March 31, 2024 and 2023, the Company excluded 222,496 and 98,991 common stock equivalents, respectively, from the diluted earnings per share calculations because they were not dilutive. In each case, the excluded common stock equivalents consisted of non‑vested RSUs.

The Company paid a quarterly cash dividend of $0.1375 per share on March 4, 2024, to shareholders of record as of February 20, 2024.

(12) Recently Issued and Adopted Accounting Standards

The Company has reviewed accounting pronouncements issued between the filing date of its most recent Form 10-K, which was December 7, 2023, and the filing date of this Form 10-Q and has determined that no accounting pronouncements issued would have a material impact on the Company’s financial position, results of operations, or disclosures, except as disclosed below.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires more detailed income tax disclosures. The guidance requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction. The guidance is effective for financial statements issued for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is required to adopt this standard prospectively in fiscal year 2026. The Company is currently in the process of evaluating the impact of adoption on its financial statements.

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(13) Subsequent Events

The Company has evaluated subsequent events through the date these financial statements were issued and has concluded that no material events occurred during this period that require recognition or disclosure.

Item 2.            Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward‑Looking Statements

This report contains “forward-looking statements” within the meaning of the securities laws, for which we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. In some cases, forward‑looking statements can be identified by terminology such as “expect,” “anticipate,” “intend,” “may,” “plan,” “will,” “should,” “could,” “would,” “assume,” “believe,” “estimate,” “predict,” “potential,” “project,” “continue,” “seek,” and similar expressions, as well as statements in the future tense. We have based these forward-looking statements on our current expectations and projections about future events, based on information currently available to us. Forward‑looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at which, or means by which, such performance or results will be achieved.

Forward-looking statements are subject to risks, uncertainties, and assumptions, including those described in our Annual Report on Form 10‑K for the fiscal year ended September 30, 2023, including under the section entitled “Risk Factors” in such report. Unforeseen developments could cause actual performance or results to differ substantially from those expressed in or suggested by the forward-looking statements. Management does not assume responsibility for the accuracy or completeness of these forward-looking statements. There is no regulation requiring an update of any of the forward-looking statements after the date of this report to conform these statements to actual results or to changes in our expectations.

Our business activities are affected by many factors, including, without limitation, redemptions by investors in the Hennessy Funds, taxes, general economic and business conditions, interest rate movements, inflation, the personal savings rate, competitive conditions, industry regulation, and fluctuations in the stock market, many of which are beyond the control of our management. Further, the business and regulatory environments in which we operate remain complex, uncertain, and subject to change. We expect that regulatory requirements and developments will cause us to incur additional administrative and compliance costs. Notwithstanding the variability in our economic and regulatory environments, we remain focused on the investment performance of the Hennessy Funds and on providing high‑quality customer service to investors.

Our business strategy centers on (i) the identification, completion, and integration of future acquisitions and (ii) organic growth, through both the retention of the fund assets we currently manage and the generation of inflows into the funds we manage. The success of our business strategy may be influenced by the factors discussed in the section titled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. All statements regarding our business strategy, as well as statements regarding market trends and risks and assumptions about changes in the marketplace, are forward-looking by their nature.

15

Overview

Our primary business activity is providing investment advisory services to a family of 16 open-end mutual funds and one ETF branded as the Hennessy Funds. We manage 12 of the 17 Hennessy Funds internally. For the remaining five funds, we have delegated the day‐to‑day portfolio management responsibilities to sub‑advisors, subject to our oversight. We oversee the selection and continued employment of each sub‑advisor, review each fund’s investment performance, and monitor each sub‑advisor’s adherence to each applicable fund’s investment objectives, policies, and restrictions. In addition, we conduct ongoing reviews of the compliance programs of sub‑advisors and make onsite visits to sub‑advisors, as feasible. Our secondary business activity is providing shareholder services to investors in the Hennessy Mutual Funds.

We derive our operating revenues from investment advisory fees paid to us by the Hennessy Funds and shareholder service fees paid to us by the Hennessy Mutual Funds. These fees are calculated as a percentage of the average daily net assets of each applicable Hennessy Fund. The percentage amount of the investment advisory fees varies by fund. The percentage amount of the shareholder service fees is consistent across all Hennessy Mutual Funds, but shareholder service fees are charged on Investor Class shares only. The dollar amount of the fees we receive fluctuates with changes in the average net asset value of each Hennessy Fund, which are affected by each fund’s investment performance, purchases and redemptions of shares, general market conditions, and the success of our marketing, sales, and public relations efforts.

On a total return basis, the Dow Jones Industrial Average was up 20.03% for the six months ended March 31, 2024. During the most recent quarter, equity prices advanced as investors increasingly felt that inflation would continue to moderate, the economy would continue to expand, and the employment outlook would remain strong. While the rate of inflation continues to be above the Federal Reserve’s stated 2% target, the market continues to anticipate that the Federal Reserve will cut rates during this calendar year, although at a slower pace compared to expectations at the end of 2023. Further, the prospect of rate cuts while the economy continues to expand has provided comfort to those who believed rate cuts would only occur once the economy started to contract. While revenue growth has outpaced earnings growth in recent quarters, consensus estimates for the quarter ended March 31, 2024, suggest the opposite. If the estimates hold true, strengthened earnings growth is an indicator that profit margins are stabilizing and, perhaps, even expanding.

Long-term U.S. bond yields increased during the three months ended March 31, 2024, as estimates for economic growth continued to be adjusted upward, albeit slightly. In addition, the unemployment rate, while higher than at the end of 2023, continued to demonstrate an economy that is stronger than many expected. The result of stronger economic data has been a ratcheting down of expectations regarding Federal Reserve interest rate cuts. While a few months ago, the market anticipated six rates cuts in 2024, the market is now pricing in fewer than two, according to Bloomberg. The market’s ability to rally in the face of higher 10-year rates and fewer short-term rate cuts suggests that a “soft landing” could be expected. The prospect of lower short-term rates while the economy continues to grow has likely fueled the recent rally. While investors had at one point anticipated more rate cuts in the near term, that was likely predicated on the fear of an economic recession.

The Japanese equity market was up 18.86% in U.S. dollar terms over the six months ended March 31, 2024, as measured by the Tokyo Stock Price Index. During the period, Japanese equities traded higher as investors cheered stronger corporate earnings, a weaker yen, and more shareholder friendly corporate governance.

For the twelve months ended March 31, 2024, all 17 Hennessy Funds generated positive total returns. For the three‑year period ended March 31, 2024, nearly all of the 17 Hennessy Funds posted positive annualized total returns, with the exceptions of the Hennessy Japan Small Cap Fund, the Hennessy Small Cap Financial Fund, and the Hennessy Large Cap Financial Fund. Over the longer term, all of the Hennessy Funds with at least five or ten years of operating history posted positive returns in each of the five- and ten-year periods ended March 31, 2024.

As always, we are committed to providing superior service to investors and employing a consistent and disciplined approach to investing based on a buy‑and‑hold philosophy that rejects the idea of market timing. Our goal is to provide products that investors can have confidence in, knowing their money is invested as promised and with their best interests in mind. Accordingly, we continually seek new and improved ways to support investors in the Hennessy Funds, including by providing market insights, sector highlights, and other resources to help them manage their fund investments with confidence. We operate a robust and leading‑edge marketing automation and customer relationship management (CRM) system, with a database of over 100,000 financial advisors, in addition to retail investors. We utilize this technology both to help retain assets and drive new purchases into the Hennessy Funds. We employ a comprehensive marketing and sales program consisting of content, digital, social media, and traditional marketing initiatives and proactive meetings. In addition, our consistent annual public relations campaign has resulted in the Hennessy brand name appearing on TV, radio, print, or online media on average once every two to three days.

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We provide service to over 170,000 fund accounts nationwide, including accounts held by investors who employ financial advisors to assist them with investing as well as accounts held by retail investors who invest directly with us. We serve approximately 11,000 financial advisors who utilize the Hennessy Funds on behalf of their clients, including nearly 400 who purchased one of our Funds for the first time during the most recent quarter. Approximately 17% of such advisors own two or more Hennessy Funds, and nearly 500 advisors hold a position of over $500,000. While numbers have declined in recent years, we continue to focus significant efforts on building and maintaining brand loyalty among our top tier of advisors.

Total assets under management as of March 31, 2024, was $3.9 billion, an increase of $1.0 billion, or 35.5%, compared to March 31, 2023. The increase in total assets was attributable to market appreciation, net inflows into the Hennessy Funds, and the purchase of the assets related to the CCM Funds.

The following table illustrates the quarter‑by‑quarter changes in our assets under management since March 31, 2023:

	Fiscal Quarter Ended
	March 31, 2024			December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023
	(In thousands)
Beginning assets under management	$	3,280,372		$	3,032,042		$	2,964,013		$	2,843,963		$	3,009,458
Acquisition inflows		59,220			12,436			-			-			-
Organic inflows		434,435			226,617			247,311			134,137			85,950
Redemptions		(222,001	)		(253,058	)		(146,614	)		(177,687	)		(276,391	)
Market appreciation (depreciation)		300,576			262,335			(32,668	)		163,600			24,946
Ending assets under management	$	3,852,602		$	3,280,372		$	3,032,042		$	2,964,013		$	2,843,963

As stated above, the fees we receive for providing investment advisory and shareholder services are based on average assets under management. The following table shows average assets under management for each quarter since March 31, 2023:

	Fiscal Quarter Ended
	March 31, 2024		December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023
	(In thousands)
Hennessy Mutual Funds
Investor Class	$	2,026,028	$	1,904,504	$	1,957,980	$	1,864,583	$	1,949,124
Institutional Class		1,347,491		1,082,938		1,081,288		941,683		993,086
Hennessy Stance ESG ETF		86,377		50,800		44,774		44,647		43,692
Average assets under management	$	3,459,896	$	3,038,242	$	3,084,042	$	2,850,913	$	2,985,902

The principal asset on our balance sheet, the management contract asset, represents the capitalized costs incurred in connection with the purchase of the assets related to the management of investment funds. As of March 31, 2024, this asset had a net balance of $82.3 million, compared to $81.3 million as of September 30, 2023. The increase was due to the purchase of assets related to the management of the CCM Funds.

On October 20, 2021, we completed a public offering of the 2026 Notes in the aggregate principal amount of $40.25 million, which included the full exercise of the underwriters’ overallotment option. The 2026 Notes mature on December 31, 2026, and may be redeemed in whole or in part at any time or from time to time at our option on or after December 31, 2023. The 2026 Notes bear interest at 4.875% per annum, payable on the last day of each calendar quarter and at maturity, beginning December 31, 2021. The 2026 Notes are direct unsecured obligations, rank equally in right of payment with any of our future unsecured unsubordinated indebtedness, senior to any of our future indebtedness that expressly provides that it is subordinate to the 2026 Notes, effectively subordinate to all of our existing and future secured indebtedness, and structurally subordinated to all existing and future indebtedness and other obligations of any future subsidiaries of ours.

The 2026 Notes are the principal liability on our balance sheet at $39.3 million, net of issuance costs.

17

Results of Operations

The following table sets forth items in the statements of income as dollar amounts and as percentages of total revenue:

	Three Months Ended March 31,
	2024						2023
	Amount			Percent of Total Revenue			Amount			Percent of Total Revenue
	(In thousands, except percentages)
Revenue
Investment advisory fees	$	6,436			92.7	%	$	5,435			91.9	%
Shareholder service fees		504			7.3			481			8.1
Total revenue		6,940			100.0			5,916			100.0
Operating expenses
Compensation and benefits		2,253			32.5			1,930			32.6
General and administrative		1,464			21.1			1,276			21.6
Fund distribution and other		201			2.9			132			2.2
Sub-advisory fees		1,046			15.1			930			15.7
Depreciation		57			0.7			56			1.0
Total operating expenses		5,021			72.3			4,324			73.1
Net operating income		1,919			27.7			1,592			26.9
Interest expense		568			8.2			562			9.5
Interest income		(771	)		(11.1	)		(580	)		(9.8	)
Income before income tax expense		2,122			30.6			1,610			27.2
Income tax expense		582			8.4			415			7.0
Net income	$	1,540			22.2	%	$	1,195			20.2	%

	Six Months Ended March 31,
	2024						2023
	Amount			Percent of Total Revenue			Amount			Percent of Total Revenue
	(In thousands, except percentages)
Revenue
Investment advisory fees	$	12,101			92.5	%	$	11,089			91.9	%
Shareholder service fees		983			7.5			972			8.1
Total revenue		13,084			100.0			12,061			100.0
Operating expenses
Compensation and benefits		4,119			31.4			3,788			31.4
General and administrative		3,188			24.4			2,845			23.6
Fund distribution and other		350			2.7			227			1.9
Sub-advisory fees		1,957			15.0			1,899			15.7
Depreciation		126			0.9			105			0.9
Total operating expenses		9,740			74.4			8,864			73.5
Net operating income		3,344			25.6			3,197			26.5
Interest expense		1,135			8.7			1,125			9.3
Interest income		(1,557	)		(11.9	)		(1,047	)		(8.7	)
Income before income tax expense		3,766			28.8			3,119			25.9
Income tax expense		1,026			7.9			805			6.7
Net income	$	2,740			20.9	%	$	2,314			19.2	%

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Revenue – Investment Advisory Fees and Shareholder Service Fees

Total revenue comprises investment advisory fees and shareholder service fees. Comparing the three months ended March 31, 2023, to the three months ended March 31, 2024, total revenue increased by 17.3%, from $5.9 million to $6.9 million, investment advisory fees increased by 18.4%, from $5.4 million to $6.4 million, and shareholder service fees increased by 4.8%, from $0.48 million to $0.50 million. Comparing the six months ended March 31, 2023, to the six months ended March 31, 2024, total revenue increased by 8.5%  from $12.1 million to $13.1 million, investment advisory fees increased by 9.1%, from $11.1 million to $12.1 million, and shareholder service fees increased by 1.1%, from $0.97 million to $0.98 million. 

In both periods, the increase in investment advisory fees was due mainly to increased average daily net assets of the Hennessy Funds, and the increase in shareholder service fees was due to an increase in the average daily net assets held in Investor Class shares of the Hennessy Mutual Funds. Assets held in Investor Class shares of the Hennessy Mutual Funds are subject to a shareholder service fee, whereas assets held in Institutional Class shares of the Hennessy Mutual Funds are not subject to a shareholder service fee. 

We collect investment advisory fees from each of the Hennessy Funds at differing annual rates. These annual rates range between 0.40% and 1.25% of average daily net assets. Average daily net assets of the Hennessy Funds for the three months ended March 31, 2024, was $3.5 billion, which represents an increase of $0.5 billion, or 15.9%, compared to the three months ended March 31, 2023, and average daily net assets for the six months ended March 31, 2024, was $3.2 billion, which represents an increase of $0.2 billion, or 7.7%, compared to the six months ended  March 31, 2023. The Hennessy Fund with the largest average daily net assets for the three and six months ended March 31, 2024, was the Hennessy Cornerstone Mid Cap 30 Fund, with $0.83 billion and $0.74 billion, respectively. We collect an investment advisory fee from the Hennessy Cornerstone Mid Cap 30 Fund at an annual rate of 0.74% of average daily net assets. The Hennessy Fund with the second largest average daily assets for the three and six months ended March 31, 2024, was the Hennessy Focus Fund, with $0.66 billion and $0.63 billion, respectively. We collect an investment advisory fee from the Hennessy Focus Fund at an annual rate of 0.90% of average daily net assets. However, we pay a sub‑advisory fee at an annual rate of 0.29% to the fund’s sub-advisor, which reduces the net operating profit contribution of the fund to our financial operations.

Total assets under management as of March 31, 2024, was $3.9 billion, an increase of $1.0 billion, or 35.5%, compared to March 31, 2023. The increase in total assets was attributable to market appreciation, net inflows into the Hennessy Funds, and the purchase of the assets related to the CCM Funds.

The Hennessy Funds with the three largest amounts of net inflows were as follows:

Three Months Ended March 31, 2024		Six Months Ended March 31, 2024
Fund Name	Amount	Fund Name	Amount
Hennessy Cornerstone Mid Cap 30 Fund	$106 million	Hennessy Cornerstone Mid Cap 30 Fund	$188 million
Hennessy Cornerstone Growth Fund	$104 million	Hennessy Cornerstone Growth Fund	$106 million
Hennessy Focus Fund	$36 million	Hennessy Japan Fund	$29 million

The Hennessy Funds with the three largest amounts of net outflows were as follows:

Three Months Ended March 31, 2024		Six Months Ended March 31, 2024
Fund Name	Amount	Fund Name	Amount
Hennessy Gas Utility Fund	$(30) million	Hennessy Gas Utility Fund	$(51) million
Hennessy Cornerstone Value Fund	$(9) million	Hennessy Cornerstone Value Fund	$(17) million
Hennessy Balanced Fund	$(5) million	Hennessy Focus Fund	$(13) million

Redemptions as a percentage of assets under management decreased from an average of 3.0% per month during the three months ended March 31, 2023, to an average of 2.2% per month during the three months ended March 31, 2024. Redemptions as a percentage of assets under management decreased from an average of 3.2% per month during the six months ended March 31, 2023, to an average of 2.5% per month during the six months ended March 31, 2024.

19

Operating Expenses

Comparing the three months ended March 31, 2023, to the three months ended March 31, 2024, total operating expenses increased by 16.1%, from $4.3 million to $5.0 million. As a percentage of total revenue, total operating expenses decreased 0.8 percentage points to 72.3%.

Comparing the six months ended March 31, 2023, to the six months ended March 31, 2024, total operating expenses increased by 9.9%, from $8.9 million to $9.7 million. As a percentage of total revenue, total operating expenses increased 0.9 percentage points to 74.4%.

In both periods, the dollar value increase in operating expense was due to increases in all expense categories.

Compensation and Benefits Expense: Comparing the three months ended March 31, 2023, to the three months ended March 31, 2024, compensation and benefits expense increased by 16.7%, from $1.9 million to $2.3 million. As a percentage of total revenue, compensation and benefits expense decreased 0.1 percentage points to 32.5%.

Comparing the six months ended March 31, 2023, to the six months ended March 31, 2024, compensation and benefits expense increased by 8.7%, from $3.8 million to $4.1 million. As a percentage of total revenue, compensation and benefits expense remained flat at 31.4%.

In both periods, the dollar value increase in compensation and benefit expense was due to an increase in incentive-based compensation.

General and Administrative Expense: Comparing the three months ended March 31, 2023, to the three months ended March 31, 2024, general and administrative expense increased by 14.7%, from $1.3 million to $1.5 million. As a percentage of total revenue, general and administrative expense decreased 0.5 percentage points to 21.1%.

Comparing the six months ended March 31, 2023, to the six months ended March 31, 2024, general and administrative expense increased by 12.1%, from $2.8 million to $3.2 million. As a percentage of total revenue, general and administrative expense increased 0.8 percentage points to 24.4%.

In both periods, the increase in general and administrative expense was primarily due to increased commission expense on sales of our investment products.

Fund Distribution and Other Expense: Fund distribution and other expense consists primarily of financial institution fees incurred by us for distribution of the Hennessy Funds and also for the operations of the Hennessy Stance ESG ETF. Fund distribution and other expense does not include sub‑advisory fees, which are shown separately.

The distribution component of fund distribution and other expense consists of fees paid to various financial institutions that offer the Hennessy Funds as potential investments to their clients. When the Hennessy Funds are purchased through one of these financial institutions, the institution typically charges an asset‑based fee, which is recorded as a fund distribution expense on our statement of operations to the extent paid by us. The Hennessy Mutual Funds, but not the Hennessy Stance ESG ETF, may be purchased directly and when purchased directly, we do not incur any such expense. These fees generally increase or decrease in line with the net assets of the Hennessy Funds held through these financial institutions, which are affected by inflows, outflows, and fund performance. In addition, some financial institutions charge a minimum fee if the average daily net assets of a Hennessy Fund held by such an institution are less than a threshold amount. In such cases, we pay the minimum fee.

20

The distribution component of fund distribution and other expenses is affected by many factors, including the following:

● average daily net assets held by financial institutions;

● the split of average daily net assets held by financial institutions in Institutional Class shares of the Hennessy Mutual Funds versus Investor Class shares of the Hennessy Mutual Funds; and

● fee minimums at various financial institutions.

The other component of fund distribution and other expense consists of fees incurred by us for the operations of the Hennessy Stance ESG ETF. We receive a unitary investment advisory fee from the Hennessy Stance ESG ETF and then pay all of its operating expenses (with limited exceptions), including fund administration, fund accounting, transfer agency, custody, licensing, audit, and tax services.

Comparing the three months ended March 31, 2023, to the three months ended March 31, 2024, fund distribution and other expense increased by 52.3%, from $0.1 million to $0.2 million. As a percentage of total revenue, fund distribution and other expense increased 0.7 percentage points to 2.9%. The increase in fund distribution and other expense was primarily due to increased average daily net assets of the Hennessy Funds. Additionally, there was an increase in operating expenses relating to the Hennessy Stance ESG ETF, which had greater average daily net assets resulting from the purchase of assets related to the CCM Core Impact Fund in the current period. 

Comparing the six months ended March 31, 2023, to the six months ended March 31, 2024, fund distribution and other expense increased by 54.2%, from $0.2 million to $0.4 million. As a percentage of total revenue, fund distribution and other expense increased 0.8 percentage points to 2.7%. The increase in fund distribution and other expense was primarily due to the additional expenses relating to the Hennessy Stance ESG ETF resulting from the purchase of assets related to the CCM Funds in the current period, and also due to increased average daily net assets of the Hennessy Funds. The increase can also be attributed to a full period of fees incurred by us for the operations of the Hennessy Stance ESG ETF in the current period. We began advising the Hennessy Stance ESG ETF on December 22, 2022, and therefore only a partial period of expenses related to its operations were incurred in the prior comparable period.

Sub-Advisory Fees Expense: Comparing the three months ended March 31, 2023, to the three months ended March 31, 2024, sub-advisory fees expense increased by 12.5%, from $0.9 million to $1.0 million. As a percentage of total revenue, sub-advisory fees expense decreased 0.6 percentage points to 15.1%.

Comparing the six months ended March 31, 2023, to the six months ended March 31, 2024, sub-advisory fees expense increased by 3.1%, from $1.9 million to $2.0 million. As a percentage of total revenue, sub-advisory fees expense decreased 0.7 percentage points to 15.0%.

In both periods, the dollar value increase in sub-advisory fees expense was due to increased average daily net assets of the sub‑advised Hennessy Funds, the expense associated with new sub-advisory relationships relating to the Hennessy Stance ESG ETF that became effective on December 22, 2022, and the increase in assets of the Hennessy Stance ESG ETF as a result of the purchase of assets related to the management of the CCM Funds and subsequent reorganization of such assets into the Hennessy Stance ESG ETF.

Depreciation Expense: Comparing the three months ended March 31, 2023, to the three months ended March 31, 2024, depreciation expense increased by 1.8%, from $0.056 million to $0.057 million. As a percentage of total revenue, depreciation expense decreased 0.3 percentage points to 0.7%.

Comparing the six months ended March 31, 2023, to the six months ended March 31, 2024, depreciation expense increased by 20.0%, from $0.11 million to $0.13 million. As a percentage of total revenue, depreciation expense remained the same at 0.9%.

In both periods, the dollar value increase in depreciation expense resulted from new fixed asset purchases, partially offset by the write-off of fully depreciated assets.

21

Interest Expense

Comparing the three months ended March 31, 2023, to the three months ended March 31, 2024, interest expense increased from $0.56 million to $0.57 million. Comparing the six months ended March 31, 2023, to the six months ended March 31, 2024, interest expense increased from $1.13 million to $1.14 million.

In both periods, the increase in interest expense was due to the manner in which interest expense is calculated under accounting principles generally accepted in the United States. The issuance costs related to the 2026 Notes that have been capitalized are amortized over time and therefore increase the carrying amount of the 2026 Notes. As the carrying amount of the 2026 Notes increases, the interest expense on the 2026 Notes for financial statement purposes also increases.

Interest Income

Interest income consists of interest earned on cash and cash equivalents. Comparing the three months ended March 31, 2023, to the three months ended March 31, 2024, interest income increased from $0.58 million to $0.77 million. Comparing the six months ended March 31, 2023, to the six months ended March 31, 2024, interest income increased from $1.0 million to $1.6 million.

In both periods, the increase in interest income resulted from increased interest rates.

Income Tax Expense

Comparing the three months ended March 31, 2023, to the three months ended March 31, 2024, income tax expense increased by 40.2%, from $0.4 million to $0.6 million. Comparing the six months ended March 31, 2023, to the six months ended March 31, 2024, income tax expense increased by 27.5%, from $0.8 million to $1.0 million.

In both periods, the increase in income tax expense was due to increased net operating income, as well as a higher effective income tax rate in the current period due to a greater exposure to state income tax liability based on the location of our fund shareholders.

Net Income

Comparing the three months ended March 31, 2023, to the three months ended March 31, 2024, net income increased by 28.9%, from $1.2 million to $1.5 million. Comparing the six months ended March 31, 2023, to the six months ended March 31, 2024, net income increased by 18.4%, from $2.3 million to $2.7 million.

In both periods, the increase in net income was primarily due to increased revenue, and additionally due to increased interest income in the current period.

Critical Accounting Policies and Estimates

Our financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States, which require the use of estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. These accounting policies, methods, and estimates are an integral part of the financial statements prepared by management and are based upon management’s current judgments. Those judgments are normally based on knowledge and experience with regard to past and current events and assumptions about future events. Certain accounting policies, methods, and estimates are particularly sensitive because of their significance to the financial statements and because future events affecting them may differ markedly from management’s current judgment. For a discussion of the accounting policies and estimates that we believe are most critical to understanding our results of operations and financial position, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10‑K for the fiscal year ended September 30, 2023.

22

Liquidity and Capital Resources

We continually review our capital requirements to ensure that we have funding available to support our business model. Management anticipates that cash and other liquid assets on hand as of March 31, 2024, will be sufficient to meet our capital requirements for one year from the issuance date of this report, as well as our longer-term capital requirements for periods beyond one year from the issuance date of this report. To the extent that liquid resources and cash provided by operations are not adequate to meet long-term capital requirements, management plans to raise additional capital by either, or both, seeking bank financing or accessing the capital markets. There can be no assurance that we will be able to raise additional capital.

On October 20, 2021, we completed a public offering of our 2026 Notes in the aggregate principal amount of $40.25 million, which included the full exercise of the underwriters’ overallotment option. The 2026 Notes mature on December 31, 2026, and may be redeemed in whole or in part at any time or from time to time at our option on or after December 31, 2023. The 2026 Notes bear interest at 4.875% per annum, payable on the last day of each calendar quarter and at maturity, beginning December 31, 2021. The 2026 Notes are direct unsecured obligations, rank equally in right of payment with any of our future unsecured unsubordinated indebtedness, senior to any of our future indebtedness that expressly provides that it is subordinate to the 2026 Notes, effectively subordinate to all of our existing and future secured indebtedness, and structurally subordinated to all existing and future indebtedness and other obligations of any future subsidiaries of ours.

Our total assets under management as of March 31, 2024, was $3.9 billion, an increase of $1.0 billion, or 35.5%, compared to March 31, 2023. The primary sources of our revenue, liquidity, and cash flow are our investment advisory fees and shareholder service fees, which are based on and generated by our average assets under management. Our average assets under management for the six months ended March 31, 2024, was $3.2 billion, an increase of $0.2 billion, or 7.7%, compared to the six months ended March 31, 2023. As of March 31, 2024, we had cash and cash equivalents of $59.6 million.

The following table summarizes key financial data relating to our liquidity and use of cash:

	For the Six Months
	Ended March 31,
	2024			2023
	(In thousands)
Net cash provided by operating activities	$	2,289		$	1,955
Net cash used in investing activities		(1,110	)		(526	)
Net cash used in financing activities		(2,062	)		(2,047	)
Net decrease in cash and cash equivalents	$	(883	)	$	(618	)

The increase in cash provided by operating activities of $0.3 million was primarily due to timing of cash payments and also due to increased net income in the current period.

The increase in cash used in investing activities of $0.6 million was due to the costs associated with the purchase of assets related to the management of the CCM Funds in the current period.

The increase in cash used in financing activities of $0.02 million was due to the increased dollar amount of dividends paid as a result of having more shares outstanding in the current period than in the prior comparable period.

23

Item 4.            Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Management performed an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this report. Based on such evaluation, management, including the Company’s principal executive officer and principal financial officer, concluded that the Company’s disclosure controls and procedures are effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting as defined in Rules 13a-15(f) of the Exchange Act that occurred during the fiscal quarter ended March 31, 2024, and that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II:  OTHER INFORMATION

Item 1A.         Risk Factors

There have been no material changes from the risk factors disclosed in the Company’s Annual Report on Form 10-K for the year ended September 30, 2023.

Item 5.            Other Information

(c) Rule 10b5-1 Trading Plans

During the three months ended March 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement,” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

24

 

Item 6.            Exhibits

Set forth below is a list of all exhibits to this Quarterly Report on Form 10-Q.

31.1	Rule 13a-14a Certification of the Principal Executive Officer.
31.2	Rule 13a-14a Certification of the Principal Financial Officer.
32.1	Written Statement of the Principal Executive Officer, Pursuant to 18 U.S.C. § 1350.
32.2	Written Statement of the Principal Financial Officer, Pursuant to 18 U.S.C. § 1350.
101	Financial statements from the Quarterly Report on Form 10‑Q of Hennessy Advisors, Inc. for the quarter ended March 31, 2024, filed on May 8, 2024, formatted in Inline XBRL: (i) the Condensed Balance Sheets; (ii) the Condensed Statements of Income; (iii) the Condensed Statements of Changes in Stockholders’ Equity; (iv) the Condensed Statements of Cash Flows; (v) the Notes to Unaudited Condensed Financial Statements; and (vi) the information included in Part II, Item 5(c).
104	The cover page for the Company’s Quarterly Report on Form 10-Q has been formatted in Inline XBRL and contained in Exhibit 101.

25

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized:

	HENNESSY ADVISORS, INC.
Date: May 8, 2024	By:	/s/ Teresa M. Nilsen
		Teresa M. Nilsen
		President

26

EX-31.1

Exhibit 31.1

Rule 13a – 14a Certification of the Principal Executive Officer

I, Teresa M. Nilsen, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Hennessy Advisors, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a‑15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a‑15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Teresa M. Nilsen

Teresa M. Nilsen, President

Hennessy Advisors, Inc.

Date: May 8, 2024

EX-31.2

Exhibit 31.2

Rule 13a – 14a Certification of the Principal Financial Officer

I, Kathryn R. Fahy, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Hennessy Advisors, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a‑15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a‑15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Kathryn R. Fahy

Kathryn R. Fahy, Chief Financial Officer

Hennessy Advisors, Inc.

Date: May 8, 2024

EX-32.1

Exhibit 32.1

Written Statement of the Principal Executive Officer

Pursuant to 18 U.S.C. § 1350

Solely for the purposes of complying with 18 U.S.C. § 1350, I, the undersigned President of Hennessy Advisors, Inc. (the “Company”), hereby certify, based on my knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2024 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Teresa M. Nilsen

Teresa M. Nilsen, President

Hennessy Advisors, Inc.

Date: May 8, 2024

EX-32.2

Exhibit 32.2

Written Statement of the Principal Financial Officer

Pursuant to 18 U.S.C. § 1350

Solely for the purposes of complying with 18 U.S.C. § 1350, I, the undersigned Chief Financial Officer of Hennessy Advisors, Inc. (the “Company”), hereby certify, based on my knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2024 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Kathryn R. Fahy

Kathryn R. Fahy, Chief Financial Officer

Hennessy Advisors, Inc.

Date: May 8, 2024

XML

Document And Entity Information - shares	6 Months Ended
	Mar. 31, 2024	May 06, 2024
Document Information [Line Items]
Entity Central Index Key	0001145255
Entity Registrant Name	HENNESSY ADVISORS INC
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2024
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2024
Document Transition Report	false
Entity File Number	001-36423
Entity Incorporation, State or Country Code	CA
Entity Tax Identification Number	68-0176227
Entity Address, Address Line One	7250 Redwood Boulevard, Suite 200
Entity Address, City or Town	Novato
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94945
City Area Code	415
Local Phone Number	899-1555
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		7,678,561
Public Income Notes [Member]
Document Information [Line Items]
Title of 12(b) Security	4.875% Notes due 2026
Trading Symbol	HNNAZ
Security Exchange Name	NASDAQ
Common Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	Common stock, no par value
Trading Symbol	HNNA
Security Exchange Name	NASDAQ

XML

Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Mar. 31, 2024	Sep. 30, 2023
Current assets
Cash and cash equivalents	$ 59,593	$ 60,476
Investments in marketable securities, at fair value	11	10
Investment fee income receivable	2,556	2,046
Interest income receivable	261	253
Prepaid expenses	732	669
Other accounts receivable	273	247
Total current assets	63,426	63,701
Property and equipment, net of accumulated depreciation of $1,422 and $2,287, respectively	295	305
Operating lease right-of-use asset	1,176	295
Management contracts	82,256	81,262
Other assets	182	156
Total assets	147,335	145,719
Current liabilities
Accrued liabilities and accounts payable	2,338	3,165
Operating lease liability	289	279
Income taxes payable	542	748
Total current liabilities	3,169	4,192
Notes payable, net of issuance costs	39,318	39,164
Long-term operating lease liability	864	0
Net deferred income tax liability	15,062	14,611
Total liabilities	58,413	57,967
Commitments and contingencies (Note 9)
Stockholders' equity
Common stock, no par value, 22,500,000 shares authorized; 7,678,215 shares issued and outstanding as of March 31, 2024, and 7,671,099 as of September 30, 2023	22,340	21,800
Retained earnings	66,582	65,952
Total stockholders' equity	88,922	87,752
Total liabilities and stockholders' equity	$ 147,335	$ 145,719

XML

Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ / shares in Thousands, $ in Thousands	Mar. 31, 2024	Sep. 30, 2023
Accumulated depreciation	$ 1,422	$ 2,287
Common Stock, No Par Value (in dollars per share)	$ 0	$ 0
Common Stock, Authorized (in shares)	22,500,000	22,500,000
Common Stock, Issued (in shares)	7,678,215	7,671,099
Common Stock, Outstanding (in shares)	7,678,215	7,671,099

XML

Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2024	Mar. 31, 2023
Revenue
Revenue	$ 6,940	$ 5,916	$ 13,084	$ 12,061
Operating expenses
Compensation and benefits	2,253	1,930	4,119	3,788
General and administrative	1,464	1,276	3,188	2,845
Fund distribution and other	201	132	350	227
Sub-advisory fees	1,046	930	1,957	1,899
Depreciation	57	56	126	105
Total operating expenses	5,021	4,324	9,740	8,864
Net operating income	1,919	1,592	3,344	3,197
Interest expense	568	562	1,135	1,125
Interest income	(771)	(580)	(1,557)	(1,047)
Income before income tax expense	2,122	1,610	3,766	3,119
Income tax expense	582	415	1,026	805
Net income	$ 1,540	$ 1,195	$ 2,740	$ 2,314
Earnings per share
Basic (in dollars per share)	$ 0.2	$ 0.16	$ 0.36	$ 0.31
Diluted (in dollars per share)	$ 0.2	$ 0.16	$ 0.36	$ 0.3
Weighted average shares outstanding
Basic (in shares)	7,676,099	7,574,360	7,674,134	7,573,397
Diluted (in shares)	7,700,203	7,610,729	7,684,245	7,595,000
Cash dividends declared per share (in dollars per share)	$ 0.14	$ 0.14	$ 0.28	$ 0.28
Investment Advice [Member]
Revenue
Revenue	$ 6,436	$ 5,435	$ 12,101	$ 11,089
Shareholder Service [Member]
Revenue
Revenue	$ 504	$ 481	$ 983	$ 972

XML

Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Two Thousand Eighteen Dividend Reinvestment and Stock Purchase Plan [Member] Common Stock [Member]	Two Thousand Eighteen Dividend Reinvestment and Stock Purchase Plan [Member] Common Stock Including Additional Paid in Capital [Member]	Two Thousand Eighteen Dividend Reinvestment and Stock Purchase Plan [Member] Retained Earnings [Member]	Two Thousand Eighteen Dividend Reinvestment and Stock Purchase Plan [Member]	Two Thousand Twenty Four Dividend Reinvestment and Stock Purchase Plan [Member] Common Stock [Member]	Two Thousand Twenty Four Dividend Reinvestment and Stock Purchase Plan [Member] Common Stock Including Additional Paid in Capital [Member]	Two Thousand Twenty Four Dividend Reinvestment and Stock Purchase Plan [Member] Retained Earnings [Member]	Two Thousand Twenty Four Dividend Reinvestment and Stock Purchase Plan [Member]	Common Stock [Member]	Common Stock Including Additional Paid in Capital [Member]	Retained Earnings [Member]	Total
Balance (in shares) at Sep. 30, 2022									7,571,741
Balance at Sep. 30, 2022										$ 20,951	$ 65,347	$ 86,298
Net income										0	1,119	1,119
Dividends paid										0	(1,041)	(1,041)
Shares issued for auto-investments pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan (in shares)	215
Shares issued for auto-investments pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan		$ 2	$ 0	$ 2
Shares issued for dividend reinvestment pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan (in shares)	1,750
Shares issued for dividend reinvestment pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan		15	0	15
Stock-based compensation										262	0	262
Balance (in shares) at Dec. 31, 2022									7,573,706
Balance at Dec. 31, 2022										21,230	65,425	86,655
Balance (in shares) at Sep. 30, 2022									7,571,741
Balance at Sep. 30, 2022										20,951	65,347	86,298
Net income												2,314
Balance (in shares) at Mar. 31, 2023									7,575,857
Balance at Mar. 31, 2023										21,510	65,579	87,089
Balance (in shares) at Dec. 31, 2022									7,573,706
Balance at Dec. 31, 2022										21,230	65,425	86,655
Net income										0	1,195	1,195
Dividends paid										0	(1,041)	(1,041)
Shares issued for auto-investments pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan (in shares)	199
Shares issued for auto-investments pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan		2	0	2
Shares issued for dividend reinvestment pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan (in shares)	1,952
Shares issued for dividend reinvestment pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan		16	0	16
Stock-based compensation										262	0	262
Balance (in shares) at Mar. 31, 2023									7,575,857
Balance at Mar. 31, 2023										21,510	65,579	87,089
Balance (in shares) at Sep. 30, 2023									7,671,099
Balance at Sep. 30, 2023										21,800	65,952	87,752
Net income										0	1,200	1,200
Dividends paid										0	(1,055)	(1,055)
Shares issued for auto-investments pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan (in shares)	145
Shares issued for auto-investments pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan		1	0	1
Shares issued for dividend reinvestment pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan (in shares)	2,625
Shares issued for dividend reinvestment pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan		17	0	17
Stock-based compensation										246	0	246
Balance (in shares) at Dec. 31, 2023									7,673,869
Balance at Dec. 31, 2023										22,064	66,097	88,161
Balance (in shares) at Sep. 30, 2023									7,671,099
Balance at Sep. 30, 2023										21,800	65,952	87,752
Net income												2,740
Balance (in shares) at Mar. 31, 2024									7,678,215
Balance at Mar. 31, 2024										22,340	66,582	88,922
Balance (in shares) at Dec. 31, 2023									7,673,869
Balance at Dec. 31, 2023										22,064	66,097	88,161
Net income										0	1,540	1,540
Dividends paid										0	(1,055)	(1,055)
Shares issued for auto-investments pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan (in shares)	1,100				669
Shares issued for auto-investments pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan		$ 8	$ 0	$ 8		$ 5	$ 0	$ 5
Shares issued for dividend reinvestment pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan (in shares)					2,577
Shares issued for dividend reinvestment pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan						$ 17	$ 0	$ 17
Stock-based compensation										246	0	246
Balance (in shares) at Mar. 31, 2024									7,678,215
Balance at Mar. 31, 2024										$ 22,340	$ 66,582	$ 88,922

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Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities
Net income	$ 2,740	$ 2,314
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation	126	105
Unrealized gain on marketable securities	(1)	(1)
Change in right-of-use asset and operating lease liability	(7)	(3)
Amortization of note issuance costs	154	144
Deferred income taxes	451	655
Stock-based compensation	492	524
Change in operating assets and liabilities
Investment fee income receivable	(510)	109
Interest income receivable	(8)	0
Prepaid expenses	(63)	(27)
Other accounts receivable	(26)	12
Other assets	(26)	(1)
Accrued liabilities and accounts payable	(827)	(1,539)
Income taxes payable	(206)	(337)
Net cash provided by operating activities	2,289	1,955
Cash flows from investing activities
Purchases of property and equipment	(116)	(113)
Payments related to management contracts	(994)	(413)
Net cash used in investing activities	(1,110)	(526)
Cash flows from financing activities
Dividend payments	(2,076)	(2,051)
Net cash used in financing activities	(2,062)	(2,047)
Net decrease in cash and cash equivalents	(883)	(618)
Cash and cash equivalents at the beginning of the period	60,476	58,487
Cash and cash equivalents at the end of the period	59,593	57,869
Supplemental disclosures of cash flow information
Cash paid for income taxes	781	487
Cash paid for interest	981	981
Dividend reinvestment issued in shares	34	31
Two Thousand Eighteen Dividend Reinvestment and Stock Purchase Plan [Member]
Cash flows from financing activities
Proceeds from shares issued pursuant to the 2021 Dividend Reinvestment and Stock Repurchase Plan	9	0
Two Thousand Twenty Four Dividend Reinvestment and Stock Purchase Plan [Member]
Cash flows from financing activities
Proceeds from shares issued pursuant to the 2021 Dividend Reinvestment and Stock Repurchase Plan	$ 5	$ 4

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Note 1 - Basis of Financial Statement Presentation

6 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Basis of Presentation and Significant Accounting Policies [Text Block]

(1) Basis of Financial Statement Presentation

The accompanying unaudited condensed balance sheet as of September 30, 2023, which has been derived from audited financial statements, and the unaudited interim condensed financial statements as of and for the three and six months ended March 31, 2024, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission and include the accounts of Hennessy Advisors, Inc. (the “Company,” “we,” “us,” or “our”). Certain information and footnote disclosures in these unaudited interim condensed financial statements, normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States, have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission for Quarterly Reports on Form 10-Q. In the opinion of management, the unaudited interim condensed financial statements reflect all adjustments necessary for a fair statement of the Company’s financial position at March 31, 2024, the Company’s operating results for the three and six months ended March 31, 2024 and 2023, and the Company’s cash flows for the six months ended March 31, 2024 and 2023. These unaudited interim condensed financial statements and notes should be read in conjunction with the Company’s audited financial statements and notes thereto for fiscal year 2023, which are included in the Company’s Annual Report on Form 10‑K for the fiscal year ended September 30, 2023.

The preparation of financial statements requires management to make estimates and assumptions. Making estimates requires management to exercise significant judgment. Accordingly, the actual results could differ substantially from those estimates.

The Company’s operating activities consist primarily of providing investment advisory services to 16 open-end mutual funds and one exchange‑traded fund (“ETF”) branded as the Hennessy Funds. The Company serves as the investment advisor to all classes of the Hennessy Cornerstone Growth Fund, the Hennessy Focus Fund, the Hennessy Cornerstone Mid Cap 30 Fund, the Hennessy Cornerstone Large Growth Fund, the Hennessy Cornerstone Value Fund, the Hennessy Total Return Fund, the Hennessy Equity and Income Fund, the Hennessy Balanced Fund, the Hennessy Energy Transition Fund, the Hennessy Midstream Fund, the Hennessy Gas Utility Fund, the Hennessy Japan Fund, the Hennessy Japan Small Cap Fund, the Hennessy Large Cap Financial Fund, the Hennessy Small Cap Financial Fund, and the Hennessy Technology Fund (collectively, the “Hennessy Mutual Funds”), as well as to the Hennessy Stance ESG ETF. The Company also provides shareholder services to investors in the Hennessy Mutual Funds.

          The employee retention credit (“ERC”), as originally enacted on March 27, 2020, by the CARES Act, was a refundable tax credit against certain employment taxes equal to 50% of the qualified wages an eligible employer paid to employees and allowed claims through December 31, 2021, by eligible employers who retained employees during the COVID-19 pandemic. The Company filed Form 941-X to request an ERC from the Internal Revenue Service. In May 2023, the Company received an ERC of approximately $0.3 million plus accrued interest. For-profit entities do not have specific guidance to apply under accounting principles generally accepted in the United States to account for ERCs and therefore follow guidance in accordance with Accounting for Government Grants and Disclosure of Government Assistance ("IAS 20"). In accordance with IAS 20, the Company netted the credit against related payroll expense in the period received.

The Company’s operating revenues consist of contractual investment advisory and shareholder service fees paid to it by the Hennessy Funds. The Company earns investment advisory fees from each Hennessy Fund by, among other things:

● acting as portfolio manager for the fund or overseeing the sub‑advisor acting as portfolio manager for the fund, which includes managing the composition of the fund’s portfolio (including the purchase, retention, and disposition of portfolio securities in accordance with the fund’s investment objectives, policies, and restrictions), seeking best execution for the fund’s portfolio, managing the use of soft dollars for the fund, and managing proxy voting for the fund;

● performing a daily reconciliation of portfolio positions and cash for the fund;

● monitoring the liquidity of the fund;

● monitoring the fund’s compliance with its investment objectives and restrictions and federal securities laws;

● maintaining a compliance program (including a code of ethics), conducting ongoing reviews of the compliance programs of the fund’s service providers (including any sub‑advisor), including their codes of ethics, as appropriate, conducting onsite visits to the fund’s service providers (including any sub-advisor) as feasible, monitoring incidents of abusive trading practices, reviewing fund expense accruals, payments, and fixed expense ratios, evaluating insurance providers for fidelity bond, directors and officers and errors and omissions insurance, and cybersecurity insurance coverage, managing regulatory examination compliance and responses, conducting employee compliance training, reviewing reports provided by service providers, and maintaining books and records;

● if applicable, overseeing the selection and continued employment of the fund’s sub‑advisor, reviewing the fund’s investment performance, and monitoring the sub‑advisor’s adherence to the fund’s investment objectives, policies, and restrictions;

● overseeing service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal services to the fund;

● maintaining in‑house marketing and distribution departments on behalf of the fund;

● preparing or directing the preparation of all regulatory filings for the fund, including writing and annually updating the fund’s prospectus and related documents;

● for each annual report of the fund, preparing or reviewing a written summary of the fund’s performance during the most recent 12‑month period;

● monitoring and overseeing the accessibility of the fund on financial institution platforms;

● paying the incentive compensation of the fund’s compliance officer and employing other staff such as legal, marketing, national accounts, distribution, sales, administrative, and trading oversight personnel, as well as management executives;

● providing a quarterly compliance certification to the Board of Trustees of Hennessy Funds Trust (the “Funds’ Board of Trustees”); and

● preparing or reviewing materials for the Funds’ Board of Trustees, presenting to or leading discussions with the Funds’ Board of Trustees, preparing or reviewing all meeting minutes, and arranging for training and education of the Funds’ Board of Trustees.

The Company earns shareholder service fees from Investor Class shares of the Hennessy Mutual Funds by, among other things, maintaining a toll free number that the current investors in the Hennessy Funds may call to ask questions about their accounts and actively participating as a liaison between investors in the Hennessy Funds and U.S. Bank Global Fund Services.

Investment advisory and shareholder service fee revenues are earned and calculated daily by the Hennessy Funds’ accountants at U.S. Bank Global Fund Services and are subsequently reviewed by management.

The Company recognizes revenues when its obligations related to the investment advisory and shareholder services are satisfied, and it is probable that a significant reversal of the revenue amount would not occur in future periods. Management judgment is required in assessing the probability of significant revenue reversal and in identification of distinct services. Investment advisory and shareholder services are performed over time because investors in the Hennessy Funds are receiving and consuming the benefits as they are provided by the Company. Fees are based on contractual percentages of net asset values and recognized for services provided during the period, which are distinct from services provided in other periods. Such fees are affected by changes in net asset values, including market appreciation or depreciation, foreign exchange translation, and net inflows or outflows. Assets under management represent the broad range of financial assets the Company manages for the Hennessy Funds on a discretionary basis pursuant to investment management and shareholder servicing agreements that are expected to continue for at least 12 months. In general, reported assets under management reflect the valuation methodology that corresponds to the basis used for determining revenue. The fees are computed and billed monthly, at which time they are recognized in accordance with Accounting Standards Codification 606 — Revenue from Contracts with Customers.

The Company’s contractual agreements for investment advisory and shareholder services prove that a contract exists with fixed and determinable fees, and the services are rendered daily. The collectability is deemed probable because the fees are received from the Hennessy Funds in the month subsequent to the month in which the services are provided.

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Note 2 - Management Contracts Purchased

6 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Management Contracts Purchased [Text Block]

(2) Management Contracts Purchased

Throughout its history, the Company has completed 12 purchases of the assets related to the management of 33 investment funds, some of which were reorganized into already existing Hennessy Funds. In accordance with Financial Accounting Standards Board (“FASB”) guidance, the Company periodically reviews the carrying value of its management contracts asset to determine if any impairment has occurred. The fair value of the management contracts asset was estimated as of September 30, 2023, by applying the income approach and is based on management estimates and assumptions, including third‑party valuations that utilize appropriate valuation techniques. It was determined there was no impairment as of such date. As of March 31, 2024, management performed a qualitative analysis and determined it was more likely than not that there continued to be no impairment.

Under Accounting Standards Codification 350 — Intangibles - Goodwill and Other, intangible assets that have indefinite useful lives are not amortized but are tested at least annually for impairment. The Company considered various factors, such as likelihood of continued renewal, whether there are foreseeable limits on net cash flows, and whether the Company is dependent on a limited number of investors, in determining the useful life of the management contracts. Based on analysis, the Company considers the management contract asset to be an intangible asset with an indefinite useful life and no impairment as of the end of the current period. 

The Company completed its most recent asset purchases on  November 10, 2023, and February 23, 2024, when it purchased assets related to the management of the CCM Small/Mid-Cap Impact Value Fund and the CCM Core Impact Equity Fund (each, a “CCM Fund,” and together, the “CCM Funds”), respectively. These asset purchases added approximately $12 million and $59 million to the Company’s assets under management at the time of closing with respect to the CCM Small/Mid-Cap Impact Value Fund and the CCM Core Impact Equity Fund, respectively. Each purchase was consummated in accordance with the terms and conditions of that certain Transaction Agreement, dated as of April 26, 2023, between the Company and Community Capital Management, LLC. Upon completion of each transaction, the assets of the applicable CCM Fund were reorganized into the Hennessy Stance ESG ETF.

In the six months ended March 31, 2024, the Company capitalized $1.0 million in purchase price and other costs for the purchase of assets related to the management of the CCM Funds. 

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Note 3 - Investment Advisory Agreements

6 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Investment Advisory Agreements [Text Block]

(3) Investment Advisory Agreements

The Company has investment advisory agreements with Hennessy Funds Trust under which it provides investment advisory services to all classes of the 16 Hennessy Mutual Funds and the Hennessy Stance ESG ETF.

The investment advisory agreements must be renewed annually (except in limited circumstances) by (i) the Funds’ Board of Trustees or the vote of a majority of the outstanding shares of the applicable Hennessy Fund and (ii) the vote of a majority of the trustees of Hennessy Funds Trust who are not interested persons of the Hennessy Funds. If an investment advisory agreement is not renewed, it terminates automatically. There are two additional circumstances in which an investment advisory agreement terminates. First, an investment advisory agreement automatically terminates if the Company assigns them to another advisor (assignment includes “indirect assignment,” which is the transfer of the Company’s common stock in sufficient quantities deemed to constitute a controlling block). Second, an investment advisory agreement may be terminated prior to its expiration upon 60 days’ written notice by either the applicable Hennessy Fund or the Company.

As provided in each investment advisory agreement, the Company receives investment advisory fees monthly based on a percentage of the applicable fund’s average daily net asset value.

The Company has entered into sub-advisory agreements for the Hennessy Focus Fund, the Hennessy Equity and Income Fund, the Hennessy Japan Fund, the Hennessy Japan Small Cap Fund, and the Hennessy Stance ESG ETF. Under each of these sub-advisory agreements, the sub‑advisor is responsible for the investment and reinvestments of the assets of the applicable Hennessy Fund in accordance with the terms of such agreement and the applicable Hennessy Fund’s Prospectus and Statement of Additional Information. The sub‑advisors are subject to the direction, supervision, and control of the Company and the Funds’ Board of Trustees. The sub‑advisory agreements must be renewed annually (except in limited circumstances) in the same manner as, and are subject to the same termination provisions as, the investment advisory agreements.

In exchange for sub-advisory services, the Company (not the Hennessy Funds) pays sub-advisory fees to the sub-advisors out of its own assets. Sub‑advisory fees are calculated as a percentage of the applicable fund’s average daily net asset value.

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Note 4 - Fair Value Measurements

6 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Fair Value Disclosures [Text Block]

(4) Fair Value Measurements

The Company applies Accounting Standards Codification 820 — Fair Value Measurement for all financial assets and liabilities, which establishes a framework for measuring fair value and expands disclosures about fair value measurements. The standard defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” It also establishes a fair value hierarchy consisting of the following three levels that prioritize the inputs to the valuation techniques used to measure fair value:

● Level 1 – Unadjusted, quoted prices in active markets for identical assets or liabilities that an entity has the ability to access at the measurement date;

● Level 2 – Other significant observable inputs other than quoted prices included in Level 1 (including, but not limited to, quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, and model‑derived valuations in which all significant inputs and significant value drivers are observable in active markets); and

● Level 3 – Significant unobservable inputs (including the entity’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable inputs are not available.

Based on the definitions, the following tables represent the Company’s assets categorized in the Level 1 to Level 3 hierarchies:

	March 31, 2024
	Level 1		Level 2		Level 3		Total
	(In thousands)
Money market fund deposits	$	59,380	$	-	$	-	$	59,380
Mutual fund investments		11		-		-		11
Total	$	59,391	$	-	$	-	$	59,391
Amounts included in:
Cash and cash equivalents	$	59,380	$	-	$	-	$	59,380
Investments in marketable securities		11		-		-		11
Total	$	59,391	$	-	$	-	$	59,391

	September 30, 2023
	Level 1		Level 2		Level 3		Total
	(In thousands)
Money market fund deposits	$	59,382	$	-	$	-	$	59,382
Mutual fund investments		10		-		-		10
Total	$	59,392	$	-	$	-	$	59,392
Amounts included in:
Cash and cash equivalents	$	59,382	$	-	$	-	$	59,382
Investments in marketable securities		10		-		-		10
Total	$	59,392	$	-	$	-	$	59,392

There were no transfers between levels during the three months ended March 31, 2024, or the year ended September 30, 2023.

The fair values of receivables, payables, and accrued liabilities approximate their book values given the short-term nature of those instruments.

The fair value of the 2026 Notes (see Note 7) was approximately $38.5 million as of March 31, 2024, based on the last trading price of the notes on that date (Level 1).

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Note 5 - Leases

6 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

(5) Leases

The Company determines if an arrangement is an operating lease at inception. Operating leases are included in operating lease right‑of‑use assets and current and long‑term operating lease liabilities on the Company’s balance sheet. There were no long‑term operating leases as of September 30, 2023. During the quarter ended March 31, 2024, the Company renewed the lease for its office in Novato, California for an additional three years. The renewed lease will expire on July 31, 2027. The renewal created a long‑term operating lease as of March 31, 2024. There were no other long‑term operating leases as of March 31, 2024.

Upon renewal of the lease for its office in Novato, California, the Company recorded a right‑of‑use asset of $1.1 million on its balance sheet. Right‑of‑use assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right‑of‑use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments, the Company uses its incremental borrowing rate based on the information available at the lease commencement date. The Company’s lease terms may include options to extend the lease when it is reasonably certain that it will exercise any such options. For its leases, the Company concluded that it is not reasonably certain that any renewal options would be exercised, and, therefore, the amounts are not recognized as part of operating lease right‑of‑use assets or operating lease liabilities. Leases with initial terms of 12 months or less, and certain office equipment leases that are deemed insignificant, are not recorded on the balance sheet and are expensed as incurred and included within rent expense under general and administrative expense. Lease expense related to operating leases is recognized on a straight-line basis over the expected lease terms.

The Company’s most significant leases are real estate leases of office facilities. The Company leases office space under non-cancelable operating leases. Its principal executive office is located in Novato, California, and it has additional offices in Austin, Texas, Dallas, Texas, Boston, Massachusetts, and Chapel Hill, North Carolina. Only the office lease in Novato, California has been capitalized because the other operating leases have terms of 12 months or less, including leases that are month‑to‑month in nature. The classification of the Company’s operating lease right-of-use assets and operating lease liabilities and other supplemental information related to the Company’s operating leases are as follows:

	March 31, 2024
	(In thousands, except years and percentages)
Operating lease right-of-use assets	$	1,176
Current operating lease liability	$	289
Long-term operating lease liability	$	864
Weighted average remaining lease term		3.3
Weighted average discount rate		6.15	%
Operating lease liabilities arising from obtaining right-of-use assets	$	1,055

For the six months ended March 31, 2024, rent expense for all offices, which is recorded under general and administrative expense in the statements of income, totaled $0.3 million.

The undiscounted cash flows for future maturities of the Company’s operating lease liabilities and the reconciliation to the balance of operating lease liabilities reflected on the Company’s balance sheet are as follows:

	March 31, 2024
	(In thousands)
Remainder of fiscal year 2024	$	255
Fiscal year 2025		387
Fiscal year 2026		398
Fiscal year 2027		236
Total undiscounted cash flows		1,276
Present value discount		(123	)
Total operating lease liabilities		1,153

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Note 6 - Accrued Liabilities and Accounts Payable

6 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

(6) Accrued Liabilities and Accounts Payable

Details relating to accrued liabilities and accounts payable reflected on the Company’s balance sheet are as follows:

	March 31, 2024		September 30, 2023
	(In thousands)
Accrued bonus liabilities	$	1,279	$	2,260
Accrued sub-advisor fees		387		310
Other accrued expenses		672		595
Total accrued liabilities and accounts payable	$	2,338	$	3,165

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Note 7 - Debt Outstanding

6 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Debt Disclosure [Text Block]

(7) Debt Outstanding

On October 20, 2021, the Company completed a public offering of 4.875% notes due 2026 in the aggregate principal amount of $40,250,000 (the “2026 Notes”), which included the full exercise of the underwriters’ overallotment option. The initial net proceeds received were approximately $38,607,000 after considering the impact of issuance costs and underwriter discounts. The 2026 Notes bear interest at 4.875% per annum, payable on the last day of each calendar quarter and at maturity, beginning December 31, 2021. The 2026 Notes mature on December 31, 2026.

The 2026 Notes are direct unsecured obligations, rank equally in right of payment with any of the Company’s future unsecured unsubordinated indebtedness, senior to any of the Company’s future indebtedness that expressly provides that it is subordinate to the 2026 Notes, effectively subordinate to all of the Company’s existing and future secured indebtedness, and structurally subordinated to all existing and future indebtedness and other obligations of any of the Company’s future subsidiaries.

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Note 8 - Income Taxes

6 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Income Tax Disclosure [Text Block]

(8) Income Taxes

The Company’s effective income tax rates for the six months ended March 31, 2024 and 2023, were 27.2% and 25.8%, respectively. 

The Company is subject to income tax in the U.S. federal jurisdiction and various state jurisdictions. As of March 31, 2024, the Company has identified 22 state tax jurisdictions in which it is subject to income tax.

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Note 9 - Commitments and Contingencies

6 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

(9) Commitments and Contingencies

In addition to the operating leases discussed in Note 5, the Company has contractual expense ratio limitations in place with respect to the Hennessy Midstream Fund, the Hennessy Technology Fund, and the Hennessy Stance ESG ETF. Such contractual expense ratio limitations will expire February 28, 2025, unless extended. Total fees waived during the six months ended March 31, 2024 and March 31, 2023, were $0.08 million in each period. To date, the Company has only waived fees based on contractual obligations but has the ability to waive fees at its discretion. Any decision to waive fees would apply only on a going forward basis.

The Company has no other commitments and no significant contingencies with original terms in excess of one year.

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Note 10 - Equity

6 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Equity [Text Block]

(10) Equity

2024 Omnibus Incentive Plan

Effective as of February 8, 2024, the Company adopted, and the Company’s shareholders approved, the 2024 Omnibus Incentive Plan (the “Omnibus Plan”). The Omnibus Plan replaced the Amended and Restated 2013 Omnibus Incentive Plan. Under the Omnibus Plan, participants may be granted restricted stock units (“RSUs”), each of which represents an unfunded, unsecured right to receive a share of the Company’s common stock on the date specified in the recipient’s award. The Company issues new shares of its common stock when it is required to deliver shares to an RSU recipient. The RSUs granted under the Omnibus Plan vest over four years at a rate of 25% per year. The Company recognizes stock‑based compensation expense on a straight‑line basis over the four-year vesting term of each award.

A summary of RSU activity is as follows:

	Six Months Ended March 31, 2024
	Shares		Weighted Average Grant Date Fair Value per Share
Non-vested balance at beginning of period		349,613	$	6.92
Granted		-		-
Vested		-		-
Forfeited		-		-
Non-vested balance at end of period		349,613	$	6.92

Additional information related to RSUs is as follows:

	March 31, 2024
	(In thousands, except years)
Unrecognized compensation expense related to RSUs	$	1,893
Weighted average remaining years to expense for RSUs		2.7

Dividend Reinvestment and Stock Purchase Plan

In January 2024, the Company adopted a Dividend Reinvestment and Stock Purchase Plan (the “DRSPP”), replacing the previous Dividend Reinvestment and Stock Purchase Plan that had been in place since 2021. The DRSPP provides shareholders and new investors with a convenient and economical means of purchasing shares of the Company’s common stock and reinvesting cash dividends paid on the Company’s common stock. Under the DRSPP and its predecessor plan, the Company issued 7,116 and 4,088 shares of common stock during the six months ended March 31, 2024 and 2023, respectively. The maximum number of shares of common stock that may be issued under the DRSPP is 1,530,000, of which 1,526,754 remained available for issuance as of March 31, 2024.

Stock Buyback Program

In August 2010, the Company’s Board of Directors adopted a stock buyback program pursuant to which the Company was authorized to repurchase up to 1,500,000 shares of its common stock in the open market, in privately negotiated transactions, or otherwise. The program has no expiration date. In August 2022, the Board of Directors increased the number of shares that may be repurchased under the program to 2,000,000 shares. As a result, 1,096,368 shares remain available for repurchase under the stock buyback program. The Company did not repurchase any shares of its common stock pursuant to the stock buyback program during the six months ended March 31, 2024.

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Note 11 - Earnings Per Share and Dividends Per Share

6 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Earnings Per Share [Text Block]

(11) Earnings per Share and Dividends per Share

 The weighted average common shares outstanding used in the calculation of basic earnings per share and weighted average common shares outstanding, adjusted for common stock equivalents, used in the computation of diluted earnings per share were as follows:

	Three Months Ended March 31,
	2024		2023
Weighted average common stock outstanding, basic		7,676,099		7,574,360
Dilutive impact of RSUs		24,104		36,369
Weighted average common stock outstanding, diluted		7,700,203		7,610,729
	Six Months Ended March 31,
	2024		2023
Weighted average common stock outstanding, basic		7,674,134		7,573,397
Dilutive impact of RSUs		10,111		21,603
Weighted average common stock outstanding, diluted		7,684,245		7,595,000

For the three months ended March 31, 2024 and 2023, the Company excluded 176,809 and 0 common stock equivalents, respectively, from the diluted earnings per share calculations because they were not dilutive. For the six months ended March 31, 2024 and 2023, the Company excluded 222,496 and 98,991 common stock equivalents, respectively, from the diluted earnings per share calculations because they were not dilutive. In each case, the excluded common stock equivalents consisted of non‑vested RSUs.

The Company paid a quarterly cash dividend of $0.1375 per share on March 4, 2024, to shareholders of record as of February 20, 2024.

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Note 12 - Recently Issued and Adopted Accounting Standards

6 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Accounting Standards Update and Change in Accounting Principle [Text Block]

(12) Recently Issued and Adopted Accounting Standards

The Company has reviewed accounting pronouncements issued between the filing date of its most recent Form 10-K, which was December 7, 2023, and the filing date of this Form 10-Q and has determined that no accounting pronouncements issued would have a material impact on the Company’s financial position, results of operations, or disclosures, except as disclosed below.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires more detailed income tax disclosures. The guidance requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction. The guidance is effective for financial statements issued for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is required to adopt this standard prospectively in fiscal year 2026. The Company is currently in the process of evaluating the impact of adoption on its financial statements.

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Note 13 - Subsequent Events

6 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Subsequent Events [Text Block]

(13) Subsequent Events

The Company has evaluated subsequent events through the date these financial statements were issued and has concluded that no material events occurred during this period that require recognition or disclosure.

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Insider Trading Arrangements

3 Months Ended

6 Months Ended

Mar. 31, 2024

Mar. 31, 2024

Insider Trading Arr Line Items

Material Terms of Trading Arrangement [Text Block]

Item 1A.         Risk Factors

There have been no material changes from the risk factors disclosed in the Company’s Annual Report on Form 10-K for the year ended September 30, 2023.

Item 5.            Other Information

(c) Rule 10b5-1 Trading Plans

During the three months ended March 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement,” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Rule 10b5-1 Arrangement Adopted [Flag]

false

Non-Rule 10b5-1 Arrangement Adopted [Flag]

false

Rule 10b5-1 Arrangement Terminated [Flag]

false

Non-Rule 10b5-1 Arrangement Terminated [Flag]

false

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Note 4 - Fair Value Measurements (Tables)

6 Months Ended

Mar. 31, 2024

Notes Tables

Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Table Text Block]

	March 31, 2024
	Level 1		Level 2		Level 3		Total
	(In thousands)
Money market fund deposits	$	59,380	$	-	$	-	$	59,380
Mutual fund investments		11		-		-		11
Total	$	59,391	$	-	$	-	$	59,391
Amounts included in:
Cash and cash equivalents	$	59,380	$	-	$	-	$	59,380
Investments in marketable securities		11		-		-		11
Total	$	59,391	$	-	$	-	$	59,391

	September 30, 2023
	Level 1		Level 2		Level 3		Total
	(In thousands)
Money market fund deposits	$	59,382	$	-	$	-	$	59,382
Mutual fund investments		10		-		-		10
Total	$	59,392	$	-	$	-	$	59,392
Amounts included in:
Cash and cash equivalents	$	59,382	$	-	$	-	$	59,382
Investments in marketable securities		10		-		-		10
Total	$	59,392	$	-	$	-	$	59,392

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Note 5 - Leases (Tables)

6 Months Ended

Mar. 31, 2024

Notes Tables

Schedule of Operating Lease Right of Use Assets Lease Liabilities and Other Supplemental Information [Table Text Block]

	March 31, 2024
	(In thousands, except years and percentages)
Operating lease right-of-use assets	$	1,176
Current operating lease liability	$	289
Long-term operating lease liability	$	864
Weighted average remaining lease term		3.3
Weighted average discount rate		6.15	%
Operating lease liabilities arising from obtaining right-of-use assets	$	1,055

Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block]

	March 31, 2024
	(In thousands)
Remainder of fiscal year 2024	$	255
Fiscal year 2025		387
Fiscal year 2026		398
Fiscal year 2027		236
Total undiscounted cash flows		1,276
Present value discount		(123	)
Total operating lease liabilities		1,153

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Note 6 - Accrued Liabilities and Accounts Payable (Tables)

6 Months Ended

Mar. 31, 2024

Notes Tables

Schedule of Accounts Payable and Accrued Liabilities [Table Text Block]

	March 31, 2024		September 30, 2023
	(In thousands)
Accrued bonus liabilities	$	1,279	$	2,260
Accrued sub-advisor fees		387		310
Other accrued expenses		672		595
Total accrued liabilities and accounts payable	$	2,338	$	3,165

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Note 10 - Equity (Tables)

6 Months Ended

Mar. 31, 2024

Notes Tables

Schedule of Nonvested Restricted Stock Units Activity [Table Text Block]

	Six Months Ended March 31, 2024
	Shares		Weighted Average Grant Date Fair Value per Share
Non-vested balance at beginning of period		349,613	$	6.92
Granted		-		-
Vested		-		-
Forfeited		-		-
Non-vested balance at end of period		349,613	$	6.92

	March 31, 2024
	(In thousands, except years)
Unrecognized compensation expense related to RSUs	$	1,893
Weighted average remaining years to expense for RSUs		2.7

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Note 11 - Earnings Per Share and Dividends Per Share (Tables)

6 Months Ended

Mar. 31, 2024

Notes Tables

Schedule of Weighted Average Number of Shares [Table Text Block]

	Three Months Ended March 31,
	2024		2023
Weighted average common stock outstanding, basic		7,676,099		7,574,360
Dilutive impact of RSUs		24,104		36,369
Weighted average common stock outstanding, diluted		7,700,203		7,610,729
	Six Months Ended March 31,
	2024		2023
Weighted average common stock outstanding, basic		7,674,134		7,573,397
Dilutive impact of RSUs		10,111		21,603
Weighted average common stock outstanding, diluted		7,684,245		7,595,000

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Note 1 - Basis of Financial Statement Presentation (Details Textual) $ in Millions	3 Months Ended
	Mar. 31, 2024 USD ($)
Employee Retention Credit [Member]
Income Tax Credits and Adjustments	$ 0.3
Open-end Mutual Funds [Member]
Number of Funds	16
Exchange-traded Fund [Member]
Number of Funds	1

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Note 2 - Management Contracts Purchased (Details Textual) $ in Thousands	6 Months Ended	12 Months Ended
	Mar. 31, 2024 USD ($)	Sep. 30, 2023 USD ($)	Feb. 23, 2024 USD ($)	Nov. 10, 2023 USD ($)
Number of Purchases of Assets	12
Number of Investment Funds	33
Management Contracts Purchased, Impairment	$ 0	$ 0
Stance ETF [Member]
Asset Acquisition, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets			$ 59,000	$ 12,000
CCM Equity Funds [Member]
Legal Fees	$ 1,000

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Note 3 - Investment Advisory Agreements (Details Textual)	3 Months Ended
	Mar. 31, 2024
Number of Open End Mutual Funds	16
Notice Period for Termination of Agreement (Day)	60 days

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Note 4 - Fair Value Measurements (Details Textual) $ in Millions	Mar. 31, 2024 USD ($)
The 2026 Notes [Member] | Fair Value, Inputs, Level 1 [Member]
Notes Payable, Fair Value Disclosure	$ 38.5

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Note 4 - Fair Value Measurements - Assets Categorized on Basis of Various Levels (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Sep. 30, 2023
Assets, fair value	$ 59,391	$ 59,392
Money Market Funds [Member]
Assets, fair value	59,380	59,382
Mutual Fund Investment [Member]
Assets, fair value	11	10
Cash and Cash Equivalents [Member]
Assets, fair value	59,380	59,382
Marketable Securities [Member]
Assets, fair value	11	10
Fair Value, Inputs, Level 1 [Member]
Assets, fair value	59,391	59,392
Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member]
Assets, fair value	59,380	59,382
Fair Value, Inputs, Level 1 [Member] | Mutual Fund Investment [Member]
Assets, fair value	11	10
Fair Value, Inputs, Level 1 [Member] | Cash and Cash Equivalents [Member]
Assets, fair value	59,380	59,382
Fair Value, Inputs, Level 1 [Member] | Marketable Securities [Member]
Assets, fair value	11	10
Fair Value, Inputs, Level 2 [Member]
Assets, fair value	0	0
Fair Value, Inputs, Level 2 [Member] | Money Market Funds [Member]
Assets, fair value	0	0
Fair Value, Inputs, Level 2 [Member] | Mutual Fund Investment [Member]
Assets, fair value	0	0
Fair Value, Inputs, Level 2 [Member] | Cash and Cash Equivalents [Member]
Assets, fair value	0	0
Fair Value, Inputs, Level 2 [Member] | Marketable Securities [Member]
Assets, fair value	0	0
Fair Value, Inputs, Level 3 [Member]
Assets, fair value	0	0
Fair Value, Inputs, Level 3 [Member] | Money Market Funds [Member]
Assets, fair value	0	0
Fair Value, Inputs, Level 3 [Member] | Mutual Fund Investment [Member]
Assets, fair value	0	0
Fair Value, Inputs, Level 3 [Member] | Cash and Cash Equivalents [Member]
Assets, fair value	0	0
Fair Value, Inputs, Level 3 [Member] | Marketable Securities [Member]
Assets, fair value	$ 0	$ 0

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Note 5 - Leases (Details Textual) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Mar. 31, 2024	Mar. 31, 2024	Sep. 30, 2023
Operating Lease, Right-of-Use Asset	$ 1,176	$ 1,176	$ 295
General and Administrative Expense [Member]
Operating Lease, Expense		300
Other Long-term Operating Leases [Member]
Contractual Obligation	$ 0	$ 0	$ 0
Office in Novato, California [Member]
Lessee, Operating Lease, Renewal Term (Year)	3 years	3 years
Operating Lease, Right-of-Use Asset	$ 1,100	$ 1,100
Lease Expiration Date	Jul. 31, 2027

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Note 5 - Leases - Schedule of Supplemental Lease Information (Details) - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2024	Sep. 30, 2023
Operating Lease, Right-of-Use Asset	$ 1,176	$ 295
Current operating lease liability	289	279
Long-term operating lease liability	$ 864	$ 0
Weighted average remaining lease term (Year)	3 years 3 months 18 days
Weighted average discount rate	6.15%
Operating lease liabilities arising from obtaining right-of-use assets	$ 1,055

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Note 5 - Leases - Schedule of Future Maturities of Operating Lease Liabilities (Details) $ in Thousands	Mar. 31, 2024 USD ($)
Remainder of fiscal year 2024	$ 255
Fiscal year 2025	387
Fiscal year 2026	398
Fiscal year 2027	236
Total undiscounted cash flows	1,276
Present value discount	(123)
Total operating lease liabilities	$ 1,153

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Note 6 - Accrued Liabilities and Accounts Payable - Schedule of Accrued Liabilities and Accounts Payable (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Sep. 30, 2023
Accrued bonus liabilities	$ 1,279	$ 2,260
Accrued sub-advisor fees	387	310
Other accrued expenses	672	595
Total accrued liabilities and accounts payable	$ 2,338	$ 3,165

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Note 7 - Debt Outstanding (Details Textual) - The 2026 Notes [Member]	Oct. 20, 2021 USD ($)
Debt Instrument, Interest Rate, Stated Percentage	4.875%
Debt Instrument, Face Amount	$ 40,250,000
Proceeds from Issuance of Debt	$ 38,607,000
Debt Instrument, Maturity Date	Dec. 31, 2026

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Note 8 - Income Taxes (Details Textual)	6 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Effective Income Tax Rate Reconciliation, Percent	27.20%	25.80%

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Note 9 - Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Investment Company, Contractual Fee Waived	$ 80	$ 80
Other Commitment	$ 0

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Note 10 - Equity (Details Textual) - shares	3 Months Ended	6 Months Ended
	Mar. 31, 2024	Mar. 31, 2024	Mar. 31, 2023	Aug. 31, 2022	Aug. 31, 2010
Stock Buyback Program [Member]
Share Repurchase Program, Authorized, Number of Shares (in shares)				2,000,000	1,500,000
Share Repurchase Program, Remaining Shares Authorized, Number of Shares (in shares)				1,096,368
Shares Repurchased During Period, Shares (in shares)		0
The Omnibus Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year)	4 years
The Omnibus Plan [Member] | Restricted Stock Units (RSUs) [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year)	4 years
The Omnibus Plan [Member] | Restricted Stock Units (RSUs) [Member] | Share-Based Payment Arrangement, Tranche One [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage	25.00%
Dividend Reinvestment and Stock Purchase Plan (DRSPP) [Member]
Stock Issued During Period, Shares, Dividend Reinvestment Plan (in shares)		7,116	4,088
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized (in shares)	1,530,000	1,530,000
Common Stock, Capital Shares Reserved for Future Issuance (in shares)	1,526,754	1,526,754

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Note 10 - Equity - Schedule of RSU Activity (Details) - Restricted Stock Units (RSUs) [Member] $ / shares in Units, $ in Thousands	6 Months Ended
	Mar. 31, 2024 USD ($) $ / shares shares
Non-vested balance at beginning of period (in shares) | shares	349,613
Non-vested balance, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 6.92
Granted (in shares) | shares	0
Granted, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 0
Vested (in shares) | shares	0
Vested, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 0
Forfeited (in shares) | shares	0
Forfeited, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 0
Non-vested balance at end of period (in shares) | shares	349,613
Non-vested balance, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 6.92
Unrecognized compensation expense related to RSUs | $	$ 1,893
Weighted average remaining years to expense for RSUs (Year)	2 years 8 months 12 days

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Note 11 - Earnings Per Share and Dividends Per Share (Details Textual) - $ / shares		3 Months Ended		6 Months Ended
	Mar. 04, 2024	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2024	Mar. 31, 2023
Common Stock, Dividends, Per Share, Cash Paid (in dollars per share)	$ 0.1375
Dividends Payable, Date of Record	Mar. 04, 2024
Restricted Stock Units (RSUs) [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)		176,809	0	222,496	98,991

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Note 11 - Earnings Per Share and Dividends Per Share - Schedule of Weighted Average Number Shares (Details) - shares	3 Months Ended		6 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2024	Mar. 31, 2023
Weighted average common stock outstanding, basic (in shares)	7,676,099	7,574,360	7,674,134	7,573,397
Dilutive impact of RSUs (in shares)	24,104	36,369	10,111	21,603
Weighted average common stock outstanding, diluted (in shares)	7,700,203	7,610,729	7,684,245	7,595,000