Note

- Operating Segments

The Company’s reportable segments are: (i) the Traditional Business and (ii) Journal Technologies. All inter-segment transactions were eliminated. Summarized financial information regarding the Company’s reportable segments is shown in the following table:

	Reportable Segments
	Traditional Business			Journal Technologies			Corporate income and expenses			Total
Nine months ended June 30, 2018
Revenues
Advertising	$	6,700,000		$	---		$	---		$	6,700,000
Circulation		4,065,000			---			---			4,065,000
Advertising service fees and other		1,985,000			---			---			1,985,000
Licensing and maintenance fees		---			13,087,000			---			13,087,000
Consulting fees		---			2,147,000			---			2,147,000
Other public service fees		---			2,613,000			---			2,613,000
Operating expenses		12,721,000			28,403,000			---			41,124,000
Income (loss) from operations		29,000			(10,556,000	)		---			(10,527,000	)
Dividends and interest income		---			---			3,722,000			3,722,000
Gains on sales of bonds and capital asset		---			---			3,182,000			3,182,000
Other income		---			---			28,000			28,000
Interest expenses on note payable collateralized by real estate		(72,000	)		---			---			(72,000	)
Interest expenses on margin loans		---			---			(458,000	)		(458,000	)
Pretax (loss) income		(43,000	)		(10,556,000	)		6,474,000			(4,125,000	)
Income tax benefit (expense)		---			(455,000	)		18,115,000			17,660,000
Net income (loss)		(43,000	)		(11,011,000	)		24,589,000			13,535,000
Total assets		20,851,000			29,818,000			207,499,000			258,168,000
Capital expenditures, net		199,000			---			---			199,000
Amortization of intangible assets		---			2,559,000			---			2,559,000

	Reportable Segments
	Traditional Business			Journal Technologies			Corporate income and expenses			Total
Nine months ended June 30, 2017
Revenues
Advertising	$	6,833,000		$	---		$	---		$	6,833,000
Circulation		4,258,000			---			---			4,258,000
Advertising service fees and other		2,111,000			---			---			2,111,000
Licensing and maintenance fees		---			11,764,000			---			11,764,000
Consulting fees		---			3,027,000			---			3,027,000
Other public service fees		---			2,477,000			---			2,477,000
Operating expenses		13,295,000			26,927,000			---			40,222,000
Loss from operations		(93,000	)		(9,659,000	)		---			(9,752,000	)
Dividends and interest income		---			---			3,491,000			3,491,000
Other income		22,000			---			3,000			25,000
Interest expenses on note payable collateralized by real estate		(75,000	)		---			---			(75,000	)
Interest expenses on margin loans		---			---			(290,000	)		(290,000	)
Interest and penalty expense reversal for uncertain and unrecognized tax benefits		---			743,000			---			743,000
Pretax (loss) income		(146,000	)		(8,916,000	)		3,204,000			(5,858,000	)
Income tax (expense) benefit		(125,000	)		6,690,000			(550,000	)		6,015,000
Net income (loss)		(271,000	)		(2,226,000	)		2,654,000			157,000
Total assets		16,333,000			34,517,000			210,553,000			261,403,000
Capital expenditures		160,000			91,000			---			251,000
Amortization of intangible assets		---			3,671,000			---			3,671,000

	Reportable Segments
	Traditional Business			Journal Technologies			Corporate income and expenses			Total
Three months ended June 30, 2018
Revenues
Advertising	$	2,375,000		$	---		$	---		$	2,375,000
Circulation		1,346,000			---			---			1,346,000
Advertising service fees and other		724,000			---			---			724,000
Licensing and maintenance fees		---			4,756,000			---			4,756,000
Consulting fees		---			940,000			---			940,000
Other public service fees		---			866,000			---			866,000
Operating expenses		4,214,000			9,502,000			---			13,716,000
Income (loss) from operations		231,000			(2,940,000	)		---			(2,709,000	)
Dividends and interest income		---			---			1,215,000			1,215,000
Other income		---			---			9,000			9,000
Interest expenses on note payable collateralized by real estate		(24,000	)		---			---			(24,000	)
Interest expenses on margin loans		---			---			(173,000	)		(173,000	)
Pretax (loss) income		207,000			(2,940,000	)		1,051,000			(1,682,000	)
Income tax benefit (expense)		785,000			480,000			(555,000	)		710,000
Net income (loss)		992,000			(2,460,000	)		496,000			(972,000	)
Total assets		20,851,000			29,818,000			207,499,000			258,168,000
Capital expenditures, net		124,000			---			---			124,000
Amortization of intangible assets		---			749,000			---			749,000

	Reportable Segments
	Traditional Business			Journal Technologies			Corporate income and expenses			Total
Three months ended June 30, 2017
Revenues
Advertising	$	2,400,000		$	---		$	---		$	2,400,000
Circulation		1,385,000			---			---			1,385,000
Advertising service fees and other		778,000			---			---			778,000
Licensing and maintenance fees		---			3,916,000			---			3,916,000
Consulting fees		---			869,000			---			869,000
Other public service fees		---			853,000			---			853,000
Operating expenses		4,432,000			9,402,000			---			13,834,000
Loss from operations		131,000			(3,764,000	)		---			(3,633,000	)
Dividends and interest income		---			---			952,000			952,000
Other income		1,000			---			3,000			4,000
Interest expenses on note payable collateralized by real estate		(24,000	)		---			---			(24,000	)
Interest expenses on margin loans		---			---			(115,000	)		(115,000	)
Pretax (loss) income		108,000			(3,764,000	)		840,000			(2,816,000	)
Income tax (expense) benefit		(50,000	)		1,570,000			(55,000	)		1,465,000
Net income (loss)		58,000			(2,194,000	)		785,000			(1,351,000	)
Total assets		16,333,000			34,517,000			210,553,000			261,403,000
Capital expenditures		---			57,000			---			57,000
Amortization of intangible assets		---			1,224,000			---			1,224,000

During the

nine

months ended

June 30, 2018,

the Traditional Business had total revenues of

$12,750,000

of which

$8,685,000

were recognized after services were provided while

$4,065,000

were recognized ratably over the subscription terms. Total revenues for the Company’s software business were

$17,847,000

of which

$5,873,000

were recognized upon completion of services while

$11,974,000

were recognized ratably over the subscription periods.

During the

three

months ended

June 30, 2018,

the Traditional Business had total revenues of

$4,445,000

of which

$3,099,000

were recognized after services were provided while

$1,346,000

were recognized ratably over the subscription terms. Total revenues for the Company’s software business were

$6,562,000

of which

$2,520,000

were recognized upon completion of services while

$4,042,000

were recognized ratably over the subscription periods.

Approximately

60%

and

58%

of the Company’s revenues during the

three

- and

nine

-month periods ended

June 30, 2018,

respectively, were derived from Journal Technologies, as compared with

55%

and

57%

in the prior year periods. In addition, the Company’s revenues have been primarily from the United States, with approximately

from foreign countries. Journal Technologies’ revenues are all from governmental agencies.

The following table sets forth certain deferred obligations from

October 1, 2017

through

June 30, 2018:

	Beginning Balance		Addition		Recognized			Ending Balance

Deferred subscriptions	$	3,284,000	$	4,018,000	$	(4,065,000	)	$	3,237,000
Deferred installation contracts		5,072,000		1,898,000		(3,260,000	)		3,710,000
Deferred maintenance agreements and others		10,201,000		13,242,000		(11,974,000	)		11,469,000