10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2022

or

☐ 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 0-14665

DAILY JOURNAL CORPORATION

(Exact name of registrant as specified in its charter)

South Carolina	95-4133299
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
915 East First Street
Los Angeles, California	90012-4050
(Address of principal executive offices)	(Zip code)

(213) 229-5300

(Registrant's telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	DJCO	The Nasdaq Stock Market

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 (§232.405 of this chapter) 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: ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date: 1,377,026 shares outstanding at January 31, 2023

1

DAILY JOURNAL CORPORATION

INDEX

	Page Nos.
PART I    Financial Information
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets ‑ December 31, 2022 and September 30, 2022	3
Consolidated Statements of Income and Comprehensive Income ‑ Three months ended December 31, 2022 and 2021	4
Consolidated Statements of Shareholders’ Equity ‑ Three months ended December 31, 2022 and 2021	5
Consolidated Statements of Cash Flows ‑ Three months ended December 31, 2022 and 2021	6
Notes to Consolidated Financial Statements	7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	13
Item 4. Controls and Procedures	20
Part II Other Information
Item 6. Exhibits	21

2

PART I

Item 1. FINANCIAL STATEMENTS

DAILY JOURNAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	December 31			September 30
	2022			2022
ASSETS
Current assets
Cash and cash equivalents	$	14,593,000		$	13,423,000
Restricted cash		2,050,000			2,045,000
Marketable securities at fair value -- common stocks		307,151,000			275,529,000
Accounts receivable, less allowance for doubtful accounts of $250,000 at December 31, 2022 and September 30, 2022		11,378,000			16,931,000
Inventories		81,000			56,000
Income tax receivable		1,017,000			451,000
Prepaid expenses and other current assets		410,000			1,019,000
Total current assets		336,680,000			309,454,000
Property, plant and equipment, at cost
Land, buildings and improvements		16,362,000			16,330,000
Furniture, office equipment and computer software		1,692,000			1,688,000
Machinery and equipment		1,521,000			1,521,000
		19,575,000			19,539,000
Less accumulated depreciation		(10,061,000	)		(9,986,000	)
		9,514,000			9,553,000
Operating lease right-of-use assets		77,000			104,000
	$	346,271,000		$	319,111,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable	$	5,269,000		$	5,062,000
Accrued liabilities		4,200,000			7,066,000
Note payable collateralized by real estate		154,000			146,000
Deferred subscriptions		2,536,000			2,679,000
Deferred consulting fees		7,499,000			6,394,000
Deferred maintenance agreements and others		11,642,000			12,272,000
Total current liabilities		31,300,000			33,619,000
Long term liabilities
Investment margin account borrowings		81,011,000			75,000,000
Note payable collateralized by real estate		1,254,000			1,285,000
Deferred maintenance agreements and others		487,000			370,000
Accrued liabilities		4,005,000			4,547,000
Deferred income taxes		31,370,000			25,273,000
Total long-term liabilities		118,127,000			106,475,000
Commitments and contingencies (Notes 10 and 11)		---			---
Shareholders' equity
Preferred stock, $.01 par value, 5,000,000 shares authorized and no shares issued		---			---
Common stock, $.01 par value, 5,000,000 shares authorized; 1,805,053 shares issued, including 428,027 treasury shares at December 31, 2022 and September 30, 2022		14,000			14,000
Additional paid-in capital		1,755,000			1,755,000
Retained earnings		195,075,000			177,248,000
Total shareholders' equity		196,844,000			179,017,000
	$	346,271,000		$	319,111,000

See accompanying Notes to Consolidated Financial Statements

3

DAILY JOURNAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)

	Three months ended December 31
	2022			2021
Revenues
Advertising	$	1,990,000		$	2,001,000
Circulation		1,098,000			1,110,000
Advertising service fees and other		699,000			671,000
Licensing and maintenance fees		4,395,000			4,480,000
Consulting fees		2,322,000			1,761,000
Other public service fees		1,797,000			1,713,000
		12,301,000			11,736,000
Costs and expenses
Salaries and employee benefits		9,631,000			8,477,000
Decrease to the long-term supplemental compensation accrual		(520,000	)		(130,000	)
Agency commissions		211,000			208,000
Outside services		1,089,000			924,000
Postage and delivery expenses		167,000			163,000
Newsprint and printing expenses		199,000			159,000
Depreciation and amortization		75,000			104,000
Equipment maintenance and software		303,000			240,000
Credit card merchant discount fees		425,000			411,000
Rent expenses		69,000			65,000
Accounting and legal fees		273,000			320,000
Other general and administrative expenses		1,095,000			739,000
		13,017,000			11,680,000
(Loss) income from operations		(716,000	)		56,000
Other income (expense)
Dividends and interest income		1,069,000			875,000
Realized gains on sales of marketable securities		422,000			46,694,000
Net unrealized gains (losses) on marketable securities		24,025,000			(36,088,000	)
Interest expense on margin loans and others		(861,000	)		(86,000	)
Interest expense on note payable collateralized by real estate		(12,000	)		(13,000	)
Income before income taxes		23,927,000			11,438,000
Income tax provisions		(6,100,000	)		(4,560,000	)
Net income	$	17,827,000		$	6,878,000
Weighted average number of common shares outstanding - basic and diluted		1,377,026			1,380,746
Basic and diluted net income per share	$	12.95		$	4.98
Comprehensive income	$	17,827,000		$	6,878,000

See accompanying Notes to Consolidated Financial Statements.

4

DAILY JOURNAL CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

											Additional				Total
	Common Stock				Treasury Stock						Paid-in		Retained		Shareholders'
	Share		Amount		Share			Amount			Capital		Earnings		Equity
Balance at September 30, 2021		1,805,053	$	18,000		(424,307	)	$	(4,000	)	$	1,755,000	$	252,872,000	$	254,641,000
Net income		---		---		---			---			---		6,878,000		6,878,000
Balance at December 31, 2021		1,805,053	$	18,000		(424,307	)	$	(4,000	)	$	1,755,000	$	259,750,000	$	261,519,000
Balance at September 30, 2022		1,805,053	$	18,000		(428,027	)	$	(4,000	)	$	1,755,000	$	177,248,000	$	179,017,000
Net income		---		---		---			---			---		17,827,000		17,827,000
Balance at December 31, 2022		1,805,053	$	18,000		(428,027	)	$	(4,000	)	$	1,755,000	$	195,075,000	$	196,844,000

See accompanying Notes to Consolidated Financial Statements

5

DAILY JOURNAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three months Ended December 31
	2022			2021
Cash flows from operating activities
Net income	$	17,827,000		$	6,878,000
Adjustments to reconcile net income to net cash provided from operations
Depreciation and amortization		75,000			104,000
Net unrealized (gains) losses on marketable securities		(24,025,000	)		36,088,000
Realized gains on sales of marketable securities		(422,000	)		(46,694,000	)
Deferred income taxes		6,097,000			(7,967,000	)
Changes in operating assets and liabilities
(Increase) decrease in current assets
Accounts receivable, net		5,553,000			2,349,000
Inventories		(25,000	)		(12,000	)
Prepaid expenses and other assets		68,000			3,000
Income tax receivable		2,000			---
Increase (decrease) in liabilities
Accounts payable		207,000			(535,000	)
Accrued liabilities		(3,408,000	)		(2,417,000	)
Income tax payable		---			12,527,000
Deferred subscriptions		(143,000	)		(89,000	)
Deferred consulting fees		1,105,000			906,000
Deferred maintenance agreements and others		(513,000	)		(816,000	)
Net cash provided from operating activities		2,398,000			325,000
Cash flows from investing activities
Proceeds from sales of marketable securities		2,826,000			50,020,000
Purchases of marketable securities		(10,001,000	)		(87,125,000	)
Purchases of property, plant and equipment		(36,000	)		---
Net cash used in investing activities		(7,211,000	)		(37,105,000	)
Cash flows from financing activities
Borrowing from margin loan account		6,011,000			37,014,000
Payment of real estate loan principal		(23,000	)		(36,000	)
Net cash provided from financing activities		5,988,000			36,978,000
Increase in cash and restricted cash and cash equivalents		1,175,000			198,000
Cash and restricted cash and cash equivalents
Beginning of period		15,468,000			14,639,000
End of period	$	16,643,000		$	14,837,000
Interest paid during period	$	917,000		$	92,000
Net income taxes paid	$	---		$	---

See accompanying Notes to Consolidated Financial Statements.

6

DAILY JOURNAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 - The Corporation and Operations

Daily Journal Corporation (“Daily Journal”) publishes newspapers and websites covering California and Arizona and produces several specialized information services. It also serves as a newspaper representative specializing in public notice advertising. This is sometimes referred to as the Company’s “Traditional Business”.

Journal Technologies, Inc. (“Journal Technologies”), a wholly-owned subsidiary of Daily Journal, supplies case management software systems and related products to courts, prosecutor and public defender offices, probation departments and other justice agencies, including administrative law organizations, city and county governments and bar associations. These organizations use the Journal Technologies family of products to help manage cases and information electronically, to interface with other critical justice partners and to extend electronic services to the public, including efiling and a website to pay traffic citations and fees online. These products are licensed in approximately 30 states and internationally. In August 2022, the Company established a new wholly-owned subsidiary, Journal Technologies (Canada) Inc., in Victoria BC, Canada.

Essentially all of the Company’s U.S. operations are based in California, Arizona and Utah. The Company also has a presence in Australia where Journal Technologies is working on three software installation projects.

Note 2 - Basis of Presentation

In the opinion of the Company, the accompanying interim unaudited consolidated financial statements contain all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of its financial position as of December 31, 2022, its results of operations for the three-month periods ended December 31, 2022 and 2021, its consolidated statements of shareholders’ equity for the three months ended December 31, 2022 and 2021 and cash flows for the three months ended December 31, 2022 and 2021. The results of operations for the three months ended December 31, 2022 are not necessarily indicative of the results to be expected for the full year.

The consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2022.

Certain reclassifications of previously reported amounts have been made to conform to the current year’s presentation.

Note 3 – New Accounting Pronouncement

No new accounting pronouncement issued or effective has had, or is expected to have, a material impact on the Company’s consolidated financial statements.

7

Note 4 – Right-of-Use (ROU) Asset

At December 31, 2022, the Company had a ROU asset and lease liability of approximately $77,000 for its operating office and equipment leases, including approximately $15,000 beyond one year.  Operating office and equipment leases are included in operating lease ROU assets, current accrued liabilities and long-term accrued liabilities in the Company’s accompanying Consolidated Balance Sheets. 

Note 5 – Revenue Recognition

The Company recognizes revenues in accordance with the provisions of ASU No. 2014-09, Revenue from Contracts with Customers (ASC Topic 606).

For the Traditional Business, proceeds from the sale of subscriptions for newspapers, court rule books and other publications and other services are recorded as deferred revenue and are included in earned revenue only when the services are provided, generally over the subscription term. Advertising revenues are recognized when advertisements are published and are net of agency commissions.

Journal Technologies contracts may include several products and services, which are generally distinct and include separate transaction pricing and performance obligations. Most are one-transaction contracts. These current subscription-type contract revenues include (i) implementation consulting fees to configure the system to go-live, (ii) subscription software license, maintenance (including updates and upgrades) and support fees, and (iii) third-party hosting fees when used. Revenues for consulting are generally recognized at point of delivery (go-live) upon completion of services. These contracts include assurance warranty provisions for limited periods and do not include financing terms. For some contracts, the Company acts as a principal with respect to certain services, such as data conversion, interfaces and hosting that are provided by third-parties, and recognizes such revenues on a gross basis. For legacy contracts with perpetual license arrangements, licenses and consulting services are recognized at point of delivery (go-live), and maintenance revenues are recognized ratably after the go-live. Other public service fees are earned and recognized as revenues when the Company processes credit card payments on behalf of the courts via its websites through which the public can efile cases and pay traffic citations and other fees.

ASC 606 also requires the capitalization of certain costs of obtaining contracts, specifically sales commissions which are to be amortized over the expected term of the contracts. For its software contracts, the Company incurs an immaterial amount of sales commission costs which have no significant impact on the Company’s financial condition and results of operations. In addition, the Company’s implementation and fulfillment costs do not meet all criteria required for capitalization.

Since the Company generally recognizes revenues when it can invoice the customer pursuant to the contract for the value of completed performance, as a practical expedient and because reliable estimates cannot be made, it has elected not to include as revenues the transaction price allocated to unsatisfied performance obligations. Also, as a practical expedient, the Company has elected not to include its evaluation of variable consideration of certain usage-based fees (i.e. public service fees) that are included in some contracts. Furthermore, there are no fulfillment costs to be capitalized for the software contracts because these costs do not generate or enhance resources that will be used in satisfying future performance obligations.

8

Note 6 - Treasury stock and net income per common share

In June 2022, the Company received from Director Charles T. Munger 3,720 shares of Daily Journal common stock as his gracious personal gift (worth approximately $1 million on the date of the gift) for the purpose of establishing a new senior management equity incentive plan, which is still in the process of being set up. These donated shares were considered treasury stock, and the Company accounted for them using the par method which resulted in an immaterial effected amount on Treasury Stock and Additional Paid-in Capital. In addition, the number of outstanding shares of the Company was reduced by these 3,720 shares to reflect the actual number of outstanding shares of 1,377,026 as of December 31, 2022. The net income per common share is based on the weighted average number of shares outstanding during each year. The shares used in the calculation were 1,377,026 and 1,380,746 for the three-month periods ended December 31, 2022 and 2021, respectively. The Company does not have any common stock equivalents, and therefore basic and diluted net income per share is the same.

Note 7 - Basic and Diluted Net Income Per Share

The Company does not have any common stock equivalents, and therefore basic and diluted net income per share are the same.

Note 8 - Investments in Marketable Securities

All investments are classified as “Current assets” because they are available for sale at any time. These “available-for-sale” marketable securities are stated at fair value. The Company uses quoted prices in active markets for identical assets (consistent with the Level 1 definition in the fair value hierarchy) to measure the fair value of its investments on a recurring basis pursuant to ASC 820, Fair Value Measurement. As of December 31, 2022 and September 30, 2022, there were net accumulated pretax unrealized gains of $144,717,000 and $120,692,000, respectively, recorded in the accompanying Consolidated Balance Sheets. Most of the accumulated pretax unrealized gains were in the common stocks of three U.S. financial institutions and one foreign manufacturer.

In December 2022, the Company recorded and included in its net income the net unrealized gains on marketable securities of $24,025,000, as compared with the net unrealized losses on marketable securities of $36,088,000, in the prior year period.

In December 2022, the Company sold part of its marketable securities for approximately $2,826,000, realizing net gains of $422,000, and borrowed an additional $6,011,000 from the margin loan account to purchase additional marketable securities with a total cost of approximately $10,001,000.

In December 2021, the Company sold part of its marketable securities for approximately $50,020,000, realizing gains of $46,694,000, and borrowed an additional $37,014,000 from the margin loan account to purchase additional marketable securities with a total cost of approximately $87,125,000.

Investments in marketable securities as of December 31, 2022 and September 30, 2022 are summarized below.

Investment in Financial Instruments

	December 31, 2022						September 30, 2022
	Aggregate fair value		Amortized/ Adjusted cost basis		Pretax unrealized gains		Aggregate fair value		Amortized/ Adjusted cost basis		Pretax unrealized gains
Marketable securities
Common stocks	$	307,151,000	$	162,434,000	$	144,717,000	$	275,529,000	$	154,837,000	$	120,692,000

9

Note 9 - Income Taxes

For the three months ended December 31, 2022, the Company recorded an income tax provision of $6,100,000 on the pretax income of $23,927,000. The income tax provision consisted of a tax provision of $110,000 on the realized gains on marketable securities and $6,360,000 on the unrealized gains on marketable securities, partially offset by a tax benefit of $140,000 on loss from operations, $80,000 for the dividends received deduction and other permanent book and tax differences, and $150,000 for the effect of a change in state apportionment on the beginning of the year’s deferred tax liability. Consequently, the overall effective tax rate for the three months ended December 31, 2022 was 25.49%, after including the taxes on the realized and unrealized gains on marketable securities.

For the three months ended December 31, 2021, the Company recorded a provision for income taxes of $4,560,000 on pretax income of $11,438,000.   The income tax provision consisted of a tax provision of $230,000 on income from operations, a tax provision of $12,612,000 on the realized gains on marketable securities and a tax provision of $1,556,000 for the effect of a change in state apportionment on the beginning of the year’s deferred tax liability, partially offset by a tax benefit of $9,747,000 on the unrealized losses on marketable securities, and a tax benefit of $91,000 for the dividends received deduction and other permanent book and tax differences. Consequently, the overall effective tax rate for the three months ended December 31, 2021 was 39.87%, after including the taxes on the realized gains and unrealized losses on marketable securities.

The Company files consolidated federal income tax returns in the United States and with various state jurisdictions and is no longer subject to examinations for fiscal years before fiscal 2019 with regard to federal income taxes and fiscal 2018 for state income taxes.

Note 10 - Debt and Commitments

During fiscal 2013, the Company borrowed from its investment margin account the aggregate purchase price of $29.5 million for two acquisitions, in each case pledging its marketable securities as collateral. There also have been subsequent borrowings of $51.5 million to purchase additional marketable securities bringing the margin loan balance up to $81.0 million as of December 31, 2022. The interest rate for these investment margin account borrowings fluctuates based on the Federal Funds Rate plus 50 basis points with interest only payable monthly. The interest rate as of December 31, 2022 was 5%. These investment margin account borrowings do not mature.

In November 2015, the Company purchased a 30,700 square foot office building constructed in 1998 on about 3.6 acres in Logan, Utah that had been previously leased by Journal Technologies. The Company paid $1.24 million and financed the balance with a real estate bank loan of $2.26 million which has a fixed interest rate of 3.33%. This loan is secured by the Logan facility and can be paid off at any time without prepayment penalty. This real estate loan had a balance of approximately $1.39 million as of December 31, 2022. Each monthly installment payment is about $16,600. In October 2022, the Company again amended this real estate loan contract as the bank transferred its index to Secured Overnight Financing Rate from London Interbank Offered Rate which was ceased by the Federal Reserve and the Alternative Reference Rates Committee in the United States. The term of the loan, including the interest rate and the balance, was not affected by the amendment.

In April 2022, the Company sold approximately 17,564 square feet of the land along the front of its Logan building to the City of Logan for approximately $381,000 in connection with the City of Logan’s street widening project.

10

The Company also owns its facilities in Los Angeles and leases space for its other offices under operating leases which expire at various dates through January 2024.

Note 11 - Contingencies

From time to time, the Company is subject to contingencies, including litigation, arising in the normal course of its business. While it is not possible to predict the results of such contingencies, management does not believe the ultimate outcome of these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows.

Note 12 - Operating Segments

The Company’s Traditional Business is one reportable segment and the other is Journal Technologies which includes Journal Technologies, Inc. and Journal Technologies (Canada) Inc. All inter-segment transactions were eliminated. Additional detail about each of the reportable segments and its income and expenses is set forth below:

Overall Financial Results (000)
For the three months ended December 31, 2022 and 2021
	Reportable Segments
	Traditional Business						Journal Technologies						Corporate						Total
	2022			2021			2022			2021			2022			2021			2022			2021
Revenues
Advertising	$	1,990		$	2,001		$	---		$	---		$	---		$	---		$	1,990		$	2,001
Circulation		1,098			1,110			---			---			---			---			1,098			1,110
Advertising service fees and other		699			671			---			---			---			---			699			671
Licensing and maintenance fees		---			---			4,395			4,480			---			---			4,395			4,480
Consulting fees		---			---			2,322			1,761			---			---			2,322			1,761
Other public service fees		---			---			1,797			1,713			---			---			1,797			1,713
Total operating revenues		3,787			3,782			8,514			7,954			---			---			12,301			11,736
Operating expenses
Salaries and employee benefits		2,218			2,315			7,413			6,162			---			---			9,631			8,477
Decrease to the long-term supplemental compensation accrual		(500	)		(90	)		(20	)		(40	)		---			---			(520	)		(130	)
Others		1,134			1,051			2,772			2,282			---			---			3,906			3,333
Total operating expenses		2,852			3,276			10,165			8,404			---			---			13,017			11,680
Income (loss) from operations		935			506			(1,651	)		(450	)		---			---			(716	)		56
Dividends and interest income		---			---			---			---			1,069			875			1,069			875
Interest expense on note payable collateralized by real estate and other		---			---			---			---			(12	)		(13	)		(12	)		(13	)
Interest expense on margin loans		---			---			---			---			(861	)		(86	)		(861	)		(86	)
Gains on sales of marketable securities, net		---			---			---			---			422			46,694			422			46,694
Net unrealized gains (losses) on marketable securities		---			---			---			---			24,025			(36,088	)		24,025			(36,088	)
Pretax income (loss)		935			506			(1,651	)		(450	)		24,643			11,382			23,927			11,438
Income tax (expense) benefit		(235	)		(205	)		350			250			(6,215	)		(4,605	)		(6,100	)		(4,560	)
Net income (loss)	$	700		$	301		$	(1,301	)	$	(200	)	$	18,428		$	6,777		$	17,827		$	6,878
Total assets	$	45,288		$	69,925		$	25,202		$	18,925		$	275,781		$	347,157		$	346,271		$	436,007
Capital expenditures		32			---			4			---			---			---			36			---

11

During the three months ended December 31, 2022, the Traditional Business had total operating revenues of $3,787,000 with $2,689,000 recognized after services were provided and $1,098,000 recognized ratably over the publication subscription terms, as compared with total operating revenues of $3,782,000 with $2,672,000 recognized after services were provided and $1,110,000 recognized ratably over the publication subscription terms in the prior fiscal year period. Total operating revenues for the Company’s software business were $8,514,000 with $4,121,000 recognized upon completion of services and $4,393,000 recognized ratably over the subscription periods, as compared with total operating revenues of $7,954,000 with $3,476,000 recognized upon completion of services and $4,478,000 recognized ratably over the subscription periods in the prior fiscal year period.

Approximately 69% of the Company’s revenues during the three-month period ended December 31, 2022 were derived from Journal Technologies, as compared with 68% in the prior year period. In addition, the Company’s revenues have been primarily from the United States with approximately 7% from foreign countries during the three-months ended December 31, 2022. Journal Technologies’ revenues are primarily from governmental agencies.

Note 13 - Subsequent Events

The Company has completed an evaluation of all subsequent events through the issuance date of these financial statements and concluded that no subsequent events occurred that required recognition to the financial statements or disclosures in the Notes to Consolidated Financial Statements, except for sponsoring a 401(k) retirement plan and a 409A non-qualified deferred compensation plan for its employees effective January 1, 2023.

12

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

Results of Operations

The Company continues to operate as two different businesses: (1) The Traditional Business, being the business of newspaper publishing and related services that the Company had before 1999 when it purchased a software development company, and (2) Journal Technologies, Inc., which supplies case management software systems and related products to courts, prosecutor and public defender offices, probation departments and other justice agencies, including administrative law organizations, city and county governments and bar associations. These organizations use the Journal Technologies family of products to help manage cases and information electronically, to interface with other critical justice partners and to extend electronic services to the public, including efiling and a website to pay traffic citations and fees online. These products are licensed in 30 states and internationally.

Impact of the COVID-19 Pandemic

On March 13, 2020, the United States declared the outbreak of COVID-19 to be a national emergency, and several states and municipalities also declared public health emergencies. Unprecedented actions were taken by public health and other governmental authorities to contain and combat the spread of COVID-19, including “stay-at-home” orders and similar mandates that restricted the daily activities of individuals and limited the operation of businesses that were deemed “non-essential”. In addition, most of Journal Technologies’ customers, which are primarily courts and governmental agencies in the United States, Canada and Australia, were either closed or significantly scaled back their activities. Similarly, many law firms and companies from which the Traditional Business derives advertising and subscription revenues also curtailed their in-person operations and spending.

Due to the uncertainties associated with the duration and severity of the COVID-19 pandemic, the efforts to contain it, and the related changes in business operations and personal behaviors, management cannot at this point estimate the magnitude of its impact on the Company’s business operations. In recent years, the newspaper industry, including our Traditional Business, has declined, and we expect this general trend to continue due to the impacts of COVID-19 and its aftermath, including fewer lawyers receiving our newspapers at their offices as they continue to work from home.

For Journal Technologies, there have been several delays or cancellations in government procurement processes. Also, although we have been able to complete some existing projects remotely, we have been delayed in finishing certain implementations and trainings because of our inability to work with clients in-person. Given that we are typically paid for implementation services upon “go-live” of a system, receipt of those revenues has been delayed.

13

Reportable Segments

The Company’s Traditional Business is one reportable segment and the other is Journal Technologies which includes Journal Technologies, Inc. and Journal Technologies (Canada) Inc. All inter-segment transactions were eliminated. Additional detail about each reportable segment and its income and expenses is set forth below:

Overall Financial Results (000)

For the three months ended December 31, 2022 and 2021

	Reportable Segments
	Traditional Business						Journal Technologies						Corporate						Total
	2022			2021			2022			2021			2022			2021			2022			2021
Revenues
Advertising	$	1,990		$	2,001		$	---		$	---		$	---		$	---		$	1,990		$	2,001
Circulation		1,098			1,110			---			---			---			---			1,098			1,110
Advertising service fees and other		699			671			---			---			---			---			699			671
Licensing and maintenance fees		---			---			4,395			4,480			---			---			4,395			4,480
Consulting fees		---			---			2,322			1,761			---			---			2,322			1,761
Other public service fees		---			---			1,797			1,713			---			---			1,797			1,713
Total operating revenues		3,787			3,782			8,514			7,954			---			---			12,301			11,736
Operating expenses
Salaries and employee benefits		2,218			2,315			7,413			6,162			---			---			9,631			8,477
Decrease to the long-term supplemental compensation accrual		(500	)		(90	)		(20	)		(40	)		---			---			(520	)		(130	)
Others		1,134			1,051			2,772			2,282			---			---			3,906			3,333
Total operating expenses		2,852			3,276			10,165			8,404			---			---			13,017			11,680
Income (loss) from operations		935			506			(1,651	)		(450	)		---			---			(716	)		56
Dividends and interest income		---			---			---			---			1,069			875			1,069			875
Interest expense on note payable collateralized by real estate and other		---			---			---			---			(12	)		(13	)		(12	)		(13	)
Interest expense on margin loans		---			---			---			---			(861	)		(86	)		(861	)		(86	)
Gains on sales of marketable securities, net		---			---			---			---			422			46,694			422			46,694
Net unrealized gains (losses) on marketable securities		---			---			---			---			24,025			(36,088	)		24,025			(36,088	)
Pretax income (loss)		935			506			(1,651	)		(450	)		24,643			11,382			23,927			11,438
Income tax (expense) benefit		(235	)		(205	)		350			250			(6,215	)		(4,605	)		(6,100	)		(4,560	)
Net income (loss)	$	700		$	301		$	(1,301	)	$	(200	)	$	18,428		$	6,777		$	17,827		$	6,878
Total assets	$	45,288		$	69,925		$	25,202		$	18,925		$	275,781		$	347,157		$	346,271		$	436,007
Capital expenditures		32			---			4			---			---			---			36			---

During the three months ended December 31, 2022, the Traditional Business had total operating revenues of $3,787,000 with $2,689,000 recognized after services were provided and $1,098,000 recognized ratably over the publication subscription terms, as compared with total operating revenues of $3,782,000 with $2,672,000 recognized after services were provided and $1,110,000 recognized ratably over the publication subscription terms in the prior fiscal year period. Total operating revenues for the Company’s software business were $8,514,000 with $4,121,000 recognized upon completion of services and $4,393,000 recognized ratably over the subscription periods, as compared with total operating revenues of $7,954,000 with $3,476,000 recognized upon completion of services and $4,478,000 recognized ratably over the subscription periods in the prior fiscal year period.

14

Approximately 69% of the Company’s revenues during the three-month period ended December 31, 2022 were derived from Journal Technologies, as compared with 68% in the prior year period. In addition, the Company’s revenues have been primarily from the United States with approximately 7% from foreign countries during the three-months ended December 31, 2022. Journal Technologies’ revenues are primarily from governmental agencies.

Comparable three-month periods ended December 31, 2022 and 2021

Consolidated Financial Comparison

Consolidated revenues were $12,301,000 and $11,736,000 for the three months ended December 31, 2022 and 2021, respectively. This increase of $565,000 (5%) was primarily from increases in (i) Journal Technologies’ consulting fees of $561,000 and other public service fees of $84,000 and (ii) the Traditional Business’ advertising service fees and other of $28,000, partially offset by decreases in (i) Journal Technologies’ license and maintenance fees of $85,000 and (ii) the Traditional Business’ advertising revenues of $11,000 and circulation revenues of $12,000.

Consolidated operating expenses increased by $1,337,000 (11%) to $13,017,000 from $11,680,000. Total salaries and employee benefits increased by $1,154,000 (14%) to $9,631,000 from $8,477,000 primarily because of bigger salary adjustments due to recent inflation in the compensation market for talent. Outside services increased by $165,000 (18%) to $1,089,000 from $924,000 mainly because of increased third-party hosting fees which were billed to clients. Newsprint and printing expenses increased by $40,000 (25%) to $199,000 from $159,000 primarily resulting from newsprint price increases and additional purchases of printing supplies. Equipment maintenance and software increased by $63,000 (26%) to $303,000 from $240,000 mainly resulting from increased maintenance costs. Accounting and legal fees decreased by $47,000 (15%) to $273,000 from 320,000 primarily from decreased legal fees. Other general and administrative expenses increased by $356,000 (48%) to $1,095,000 from $739,000 mainly because there were increased miscellaneous office software purchases and business travel expenses as compared to the prior fiscal year period.

The Company’s non-operating income, net of expenses, increased by $13,261,000 (117%) to $24,643,000 from $11,382,000 in the prior fiscal year period primarily because of (i) the recording of net unrealized gains on marketable securities of $24,025,000 during the three months ended December 31, 2022 as compared with net unrealized losses of $36,088,000 in the prior fiscal year period, and (ii) increases in dividends and interest income of $194,000 (22%) to $1,069,000 from $875,000. These increases were partially offset by (i) the recording of realized net gains on sales of marketable securities of $422,000 during the three months ended December 31, 2022 as compared with $46,694,000 in the prior fiscal year period and (ii) increases in interest expenses of $774,000 (782%) to $873,000 from $99,000, primarily due to the federal rate increases.

During the three months ended December 31, 2022, the Company’s consolidated pretax income was $23,927,000, as compared to $11,438,000 in the prior fiscal year period. There was consolidated net income of $17,827,000 ($12.95 per share) for the three months ended December 31, 2022, as compared with $6,878,000 ($4.98 per share) in the prior fiscal year period.

At December 31, 2022, the aggregate fair market value of the Company’s marketable securities was $307,151,000. These securities had approximately $144,717,000 of net unrealized gains before taxes of $38,290,000. They generated approximately $1,069,000 in dividends income during the three months ended December 31, 2022, as compared with $875,000 in the prior fiscal year period. Most of the unrealized gains were in the common stocks of three U.S. financial institutions and one foreign manufacturer.

15

Taxes

For the three months ended December 31, 2022, the Company recorded an income tax provision of $6,100,000 on the pretax income of $23,927,000. The income tax provision consisted of a tax provision of $110,000 on the realized gains on marketable securities and $6,360,000 on the unrealized gains on marketable securities, partially offset by a tax benefit of $140,000 on loss from operations, $80,000 for the dividends received deduction and other permanent book and tax differences, and $150,000 for the effect of a change in state apportionment on the beginning of the year’s deferred tax liability. Consequently, the overall effective tax rate for the three months ended December 31, 2022 was 25.49%, after including the taxes on the realized and unrealized gains on marketable securities.

For the three months ended December 31, 2021, the Company recorded a provision for income taxes of $4,560,000 on pretax income of $11,438,000.   The income tax provision consisted of a tax provision of $230,000 on income from operations, a tax provision of $12,612,000 on the realized gains on marketable securities and a tax provision of $1,556,000 for the effect of a change in state apportionment on the beginning of the year’s deferred tax liability, partially offset by a tax benefit of $9,747,000 on the unrealized losses on marketable securities, and a tax benefit of $91,000 for the dividends received deduction and other permanent book and tax differences. Consequently, the overall effective tax rate for the three months ended December 31, 2021 was 39.87%, after including the taxes on the realized gains and unrealized losses on marketable securities.

The Company files consolidated federal income tax returns in the United States and with various state jurisdictions and is no longer subject to examinations for fiscal years before fiscal 2019 with regard to federal income taxes and fiscal 2018 for state income taxes.

The Traditional Business

The Traditional Business’ pretax income increased by $429,000 (85%) to $935,000 from $506,000 in the prior fiscal year period, primarily resulting from a decrease to the long-term supplemental compensation accrual of $410,000 (456%) to $500,000 from $90,000 in the prior fiscal year period.

During the three months ended December 31, 2022, the Traditional Business had total operating revenues of $3,787,000, as compared with $3,782,000 in the prior fiscal year period. Advertising revenues decreased by $11,000 (1%) to $1,990,000 from $2,001,000, primarily resulting from decreased commercial advertising revenues of $47,000, legal notice advertising revenues of $7,000 and government notice advertising revenues of $12,000, partially offset by increased trustee sale notice advertising revenues of $55,000 mainly because of the lifting of Covid-related foreclosure moratoriums on lenders.

Trustee sale notices are very much dependent on the number of California and Arizona foreclosures for which public notice advertising is required by law. The number of foreclosure notices published by the Company increased by 44% during the three months ended December 31, 2022 as compared to the prior fiscal year period. The Company’s smaller newspapers, those other than the Los Angeles and San Francisco Daily Journals (“The Daily Journals”), accounted for about 88% of the total public notice advertising revenues during the three months ended December 31, 2022. Public notice advertising revenues and related advertising and other service fees, including trustee sales legal advertising revenues, constituted about 22% of the Company's total operating revenues for the three months ended December 31, 2022 and 23% in the prior fiscal year period.

The Daily Journals accounted for about 92% of the Traditional Business’ total circulation revenues, which declined by $12,000 (1%) to $1,098,000 from $1,110,000. The court rule and judicial profile services generated about 5% of the total circulation revenues, with the other newspapers and services accounting for the balance. Advertising service fees and other are Traditional Business segment revenues, which include primarily (i) agency commissions received from outside newspapers in which the advertising is placed, and (ii) fees generated when filing notices with government agencies.

16

The Traditional Business segment operating expenses, excluding the adjustments to the long-term supplemental compensation accrual, decreased by $14,000 to $3,352,000 from $3,366,000, primarily resulting from reduced legal fees.

Journal Technologies

During the three months ended December 31, 2022, Journal Technologies’ business segment pretax loss increased by $1,201,000 (267%) to $1,651,000 from $450,000 in the prior fiscal year period.

Revenues increased by $560,000 (7%) to $8,514,000 from $7,954,000 in the prior fiscal year period. Licensing and maintenance fees decreased by $85,000 (2%) to $4,395,000 from $4,480,000 primarily resulting from the reduction in legacy software products’ maintenance and support revenues. Consulting fees increased by $561,000 (32%) to $2,322,000 from $1,761,000 mainly resulting from more project go-lives. Other public service fees increased by $84,000 (5%) to $1,797,000 from $1,713,000 primarily because of increased efiling fee revenues.

Deferred consulting fees primarily represent advances from customers of Journal Technologies for installation services and are recognized upon final project go-lives. Deferred revenues on license and maintenance contracts represent prepayments of annual license and maintenance fees and are recognized ratably over the maintenance period.

Operating expenses increased by $1,761,000 (21%) to $10,165,000 from $8,404,000 primarily because of (i) increased personnel costs because of bigger salary adjustments due to recent inflation in the compensation market for talent, (ii) increased third-party hosting fees which were billed to clients and (iii) additional miscellaneous office software license purchases and increased business travel expenses.

Journal Technologies continues to update and upgrade its software products. These costs are expensed as incurred and will impact earnings at least through the foreseeable future.

Liquidity and Capital Resources

For the three-months ended December 31, 2022, the Company’s cash and cash equivalents, restricted cash, and marketable security positions increased by $32,797,000, after the sales of marketable securities of approximately $2,826,000 and additional borrowing of $6,011,000 from the margin loan account, partially offset by the recording of net pretax unrealized gains on marketable securities of $24,025,000. Cash, cash equivalents, the proceeds from the sales of marketable securities and additional borrowing were primarily used to purchase additional marketable securities of $10,001,000.

The investments in marketable securities, which had an adjusted cost basis of approximately $162,434,000 and a market value of about $307,151,000 at December 31, 2022, generated approximately $1,069,000 in dividends income during the three months ended December 31, 2022. These securities had approximately $144,717,000 of net unrealized gains before estimated taxes of $38,290,000 which will become due only when we sell securities in which there is unrealized appreciation.

17

Cash flows from operating activities increased by $2,073,000 during the three months ended December 31, 2022, as compared to the prior fiscal year period, primarily due to (i) decreases in the Company’s deferred tax benefit of $14,064,000 and its accounts receivable of $3,204,000 mainly resulting from more collections and (ii) increases in deferred revenues of $448,000. This was partially offset by (i) decreases in net income of $2,892,000, excluding the increases in unrealized gains on marketable securities of $60,113,000 and decreases in realized net gains on sales of marketable securities of $46,272,000 and (ii) decreases in the Company’s income tax payable of $12,527,000 and (iii) decreases in net accounts payable and accrued liabilities of $249,000 (because of the timing difference in remitting efiling fees to the courts)

As of December 31, 2022, the Company had working capital of $305,380,000, including the liabilities for deferred subscriptions, deferred consulting fees and deferred maintenance agreements and others of $21,677,000.

The Company believes that it will be able to fund its operations for the foreseeable future through its cash flows from operations and its current working capital. The Company may or may not have the ability to borrow additional amounts against its marketable securities and, among other possibilities, it may be required to consider selling some of those securities to generate cash if needed to fund ongoing operations. The amount available for borrowing is based on the market value of the Company’s investment portfolio and fluctuates depending on the value of the underlying securities. In addition, the Company could be subject to margin calls should the balance of the investment decrease significantly.

The Company is not a smaller version of Berkshire Hathaway Inc. Instead, it hopes to be a significant software company while it also operates its Traditional Business.

18

Critical Accounting Policies and Estimates

The Company’s financial statements and accompanying notes are prepared in accordance with U.S. generally accepted accounting principles. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. These estimates and assumptions are affected by management’s application of accounting policies. Management believes that revenue recognition, accounting for software costs, fair value measurement and disclosures (including the long-term Incentive Plan liabilities) and income taxes are critical accounting policies and estimates.

The Company’s critical accounting policies are detailed in its Annual Report on Form 10-K for the year ended September 30, 2022. The above discussion and analysis should be read in conjunction with the unaudited consolidated financial statements and notes thereto included in this report.

Disclosure Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Certain statements contained in this document, including but not limited to those in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” are “forward-looking” statements that involve risks and uncertainties that may cause actual future events or results to differ materially from those described in the forward-looking statements. Words such as “expects,” “intends,” “anticipates,” “should,” “believes,” “will,” “plans,” “estimates,” “may,” variations of such words and similar expressions are intended to identify such forward-looking statements. We disclaim any intention or obligation to revise any forward-looking statements whether as a result of new information, future developments, or otherwise. There are many factors that could cause actual results to differ materially from those contained in the forward-looking statements. These factors include, among others: risks associated with software development and implementation efforts; Journal Technologies’ reliance on professional services engagements with justice agencies; material changes in the costs of postage and paper; possible changes in the law, particularly changes limiting or eliminating the requirements for public notice advertising; possible loss of the adjudicated status of the Company’s newspapers and their legal authority to publish public notice advertising; the impacts of COVID-19 and the efforts to contain it on the Company’s customers, advertisers and subscribers, particularly the closure or scaling back of operations of courts, justice agencies and other businesses; a further decline in subscriber revenues; possible security breaches of the Company’s software or websites; changes in accounting guidance; material weaknesses in the Company’s internal control over financial reporting; and declines in the market prices of the securities owned by the Company. In addition, such statements could be affected by general industry and market conditions, general economic conditions (particularly in California) and other factors.  Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from those in the forward-looking statements are discussed in this Form 10-Q, including in conjunction with the forward-looking statements themselves. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in documents filed by the Company with the Securities and Exchange Commission, including in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2022.

19

Item 4. CONTROLS AND PROCEDURES

In light of the material weaknesses in the Company’s internal control over financial reporting discussed in the Company’s Form 10-K for the fiscal year ended September 30, 2022, management concluded that the Company’s disclosure controls and procedures were not effective as of December 31, 2022.  There were no material changes in the Company’s internal control over financial reporting or in other factors reasonably likely to affect its internal control over financial reporting during the quarter ended December 31, 2022.

20

PART II

Item 6.    Exhibits

31 Certifications by Chief Financial Officer and Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32	Certifications by Chief Financial Officer and Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance
101.SCH	Inline XBRL Taxonomy Extension Schema
101.CAL	Inline XBRL Taxonomy Extension Calculation
101.DEF	Inline XBRL Taxonomy Extension Definition
101.LAB	Inline XBRL Taxonomy Extension Labels
101.PRE	Inline XBRL Taxonomy Extension Presentation
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101

                       SIGNATURE

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.

	DAILY JOURNAL CORPORATION
	(Registrant)
	/s/ Tu To
	Chief Financial Officer
	(Principal Financial Officer and
	Principal Accounting Officer)
	/s/ Steven Myhill-Jones
	Interim Chief Executive Officer
	Chairman of the Board
	(Principal Executive Officer)
DATE: February 13, 2023

21

EX-31

Exhibit 31

CERTIFICATION BY CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

	I, Tu To, certify that:
1.	I have reviewed this quarterly report on Form 10-Q of Daily Journal Corporation;

2. Based on my knowledge, this quarterly 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 quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;

4. I am 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 my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me 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 my 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 my 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 that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of 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.

Date:  February 13, 2023

/s/ Tu To

Tu To

Chief Financial Officer

CERTIFICATION BY CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

	I, Steven Myhill-Jones, certify that:
1.	I have reviewed this quarterly report on Form 10-Q of Daily Journal Corporation;

2. Based on my knowledge, this quarterly 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 quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;

4. I am 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 my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me 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 my 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 my 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 that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of 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.

Date:  February 13, 2023

/s/ Steven Myhill-Jones

Steven Myhill-Jones

Interim Chief Executive Officer

Chairman of the Board

EX-32

Exhibit 32

CERTIFICATION BY CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Daily Journal Corporation (the "Company") for the period ended December 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Tu To, Chief Financial Officer of the Company, certify, pursuant 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)  the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Tu To

____________________________________________

Tu To
Chief Financial Officer

February 13, 2023

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350, and is not being filed as part of the Report or as a separate disclosure document.

CERTIFICATION BY CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Daily Journal Corporation (the "Company") for the period ended December 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Steven Myhill-Jones, Interim Chief Executive Officer of the Company, certify, pursuant 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)  the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Steven Myhill-Jones

____________________________________________

Steven Myhill-Jones
Interim Chief Executive Officer

Chairman of the Board

February 13, 2023

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350, and is not being filed as part of the Report or as a separate disclosure document.

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Document And Entity Information - shares	3 Months Ended
	Dec. 31, 2022	Jan. 31, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2022
Document Transition Report	false
Entity File Number	0-14665
Entity Registrant Name	DAILY JOURNAL CORPORATION
Entity Incorporation, State or Country Code	SC
Entity Tax Identification Number	95-4133299
Entity Address, Address Line One	915 East First Street
Entity Address, City or Town	Los Angeles
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90012-4050
City Area Code	213
Local Phone Number	229-5300
Title of 12(b) Security	Common Stock
Trading Symbol	DJCO
Security Exchange Name	NASDAQ
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 (in shares)		1,377,026
Entity Central Index Key	0000783412
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false

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Consolidated Balance Sheets (Unaudited) - USD ($)	Dec. 31, 2022	Sep. 30, 2022
Current assets
Cash and cash equivalents	$ 14,593,000	$ 13,423,000
Restricted cash	2,050,000	2,045,000
Marketable securities at fair value -- common stocks	307,151,000	275,529,000
Accounts receivable, less allowance for doubtful accounts of $250,000 at December 31, 2022 and September 30, 2022	11,378,000	16,931,000
Inventories	81,000	56,000
Income tax receivable	1,017,000
Prepaid expenses and other current assets	410,000	1,019,000
Total current assets	336,680,000	309,454,000
Property, plant and equipment, at cost
Land, buildings and improvements	16,362,000	16,330,000
Furniture, office equipment and computer software	1,692,000	1,688,000
Machinery and equipment	1,521,000	1,521,000
Property, Plant and Equipment, Gross, Ending Balance	19,575,000	19,539,000
Less accumulated depreciation	(10,061,000)	(9,986,000)
Property, Plant and Equipment, Net, Total	9,514,000	9,553,000
Operating lease right-of-use assets	77,000	104,000
Assets, Total	346,271,000	319,111,000
Current liabilities
Accounts payable	5,269,000	5,062,000
Accrued liabilities	4,200,000	7,066,000
Note payable collateralized by real estate	154,000	146,000
Total current liabilities	31,300,000	33,619,000
Long term liabilities
Investment margin account borrowings	81,011,000	75,000,000
Note payable collateralized by real estate	1,254,000	1,285,000
Deferred maintenance agreements and others	487,000	370,000
Accrued liabilities	4,005,000	4,547,000
Deferred income taxes	31,370,000	25,273,000
Total long-term liabilities	118,127,000	106,475,000
Commitments and contingencies (Notes 10 and 11)		0
Shareholders' equity
Preferred stock, $.01 par value, 5,000,000 shares authorized and no shares issued	0	0
Common stock, $.01 par value, 5,000,000 shares authorized; 1,805,053 shares issued, including 428,027 treasury shares at December 31, 2022 and September 30, 2022	14,000	14,000
Additional paid-in capital	1,755,000	1,755,000
Retained earnings	195,075,000	177,248,000
Total shareholders' equity	196,844,000	179,017,000
Liabilities and Equity, Total	346,271,000	319,111,000
Subscription and Circulation [Member]
Current liabilities
Deferred subscriptions	2,536,000	2,679,000
Professional Fees [Member]
Current liabilities
Deferred subscriptions	7,499,000	6,394,000
License and Maintenance [Member]
Current liabilities
Deferred subscriptions	$ 11,642,000	$ 12,272,000

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Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($)	Dec. 31, 2022	Sep. 30, 2022
Accounts receivable, allowance for doubtful accounts	$ 250,000	$ 250,000
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	5,000,000	5,000,000
Common stock, shares issued (in shares)	1,805,053	1,805,053
Common stock, treasury shares (in shares)	428,027	428,027

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Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($)	3 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Revenue from Contract with Customer, Including Assessed Tax	$ 12,301,000	$ 11,736,000
Costs and expenses
Salaries and employee benefits	9,631,000	8,477,000
Decrease to the long-term supplemental compensation accrual	(520,000)	(130,000)
Agency commissions	211,000	208,000
Outside services	1,089,000	924,000
Postage and delivery expenses	167,000	163,000
Newsprint and printing expenses	199,000	159,000
Depreciation and amortization	75,000	104,000
Equipment maintenance and software	303,000	240,000
Credit card merchant discount fees	425,000	411,000
Rent expenses	69,000	65,000
Accounting and legal fees	273,000	320,000
Other general and administrative expenses	1,095,000	739,000
Operating Expenses, Total	13,017,000	11,680,000
(Loss) income from operations	(716,000)	56,000
Other income (expense)
Dividends and interest income	1,069,000	875,000
Realized gains on sales of marketable securities	422,000	46,694,000
Net unrealized gains (losses) on marketable securities	24,025,000	(36,088,000)
Income before income taxes	23,927,000	11,438,000
Income tax provisions	(6,100,000)	(4,560,000)
Net income	$ 17,827,000	$ 6,878,000
Weighted average number of common shares outstanding - basic and diluted (in shares)	1,377,026	1,380,746
Basic and diluted net income per share (in dollars per share)	$ 12.95	$ 4.98
Comprehensive income	$ 17,827,000	$ 6,878,000
Margin Account [Member]
Other income (expense)
Interest expense on debt	(861,000)	(86,000)
Real Estate Bank Loan Secured by Logan Office [Member]
Other income (expense)
Interest expense on debt	(12,000)	(13,000)
Advertising [Member]
Revenue from Contract with Customer, Including Assessed Tax	1,990,000	2,001,000
Subscription and Circulation [Member]
Revenue from Contract with Customer, Including Assessed Tax	1,098,000	1,110,000
Advertising Service Fees and Other [Member]
Revenue from Contract with Customer, Including Assessed Tax	699,000	671,000
License and Maintenance [Member]
Revenue from Contract with Customer, Including Assessed Tax	4,395,000	4,480,000
Consulting Fees [Member]
Revenue from Contract with Customer, Including Assessed Tax	2,322,000	1,761,000
Service, Other [Member]
Revenue from Contract with Customer, Including Assessed Tax	$ 1,797,000	$ 1,713,000

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Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance (in shares) at Sep. 30, 2021	1,805,053	(424,307)
Balance at Sep. 30, 2021	$ 18,000	$ (4,000)	$ 1,755,000	$ 252,872,000	$ 254,641,000
Net income				6,878,000	6,878,000
Balance (in shares) at Dec. 31, 2021	1,805,053	(424,307)
Balance at Dec. 31, 2021	$ 18,000	$ (4,000)	1,755,000	259,750,000	261,519,000
Balance (in shares) at Sep. 30, 2022	1,805,053	(428,027)
Balance at Sep. 30, 2022	$ 18,000	$ (4,000)	1,755,000	177,248,000	179,017,000
Net income				17,827,000	17,827,000
Balance (in shares) at Dec. 31, 2022	1,805,053	(428,027)
Balance at Dec. 31, 2022	$ 18,000	$ (4,000)	$ 1,755,000	$ 195,075,000	$ 196,844,000

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Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Cash flows from operating activities
Net income	$ 17,827,000	$ 6,878,000
Adjustments to reconcile net income to net cash provided from operations
Depreciation and amortization	75,000	104,000
Net unrealized (gains) losses on marketable securities	(24,025,000)	36,088,000
Realized gains on sales of marketable securities	(422,000)	(46,694,000)
Deferred income taxes	6,097,000	(7,967,000)
(Increase) decrease in current assets
Accounts receivable, net	5,553,000	2,349,000
Inventories	(25,000)	(12,000)
Prepaid expenses and other assets	68,000	3,000
Income tax receivable	2,000
Increase (decrease) in liabilities
Accounts payable	207,000	(535,000)
Accrued liabilities	(3,408,000)	(2,417,000)
Income tax payable		12,527,000
Net cash provided from operating activities	2,398,000	325,000
Cash flows from investing activities
Proceeds from sales of marketable securities	2,826,000	50,020,000
Purchases of marketable securities	(10,001,000)	(87,125,000)
Purchases of property, plant and equipment	(36,000)
Net cash used in investing activities	(7,211,000)	(37,105,000)
Cash flows from financing activities
Borrowing from margin loan account	6,011,000	37,014,000
Payment of real estate loan principal	(23,000)	(36,000)
Net cash provided from financing activities	5,988,000	36,978,000
Increase in cash and restricted cash and cash equivalents	1,175,000	198,000
Cash and restricted cash and cash equivalents
Beginning of period	15,468,000	14,639,000
End of period	16,643,000	14,837,000
Interest paid during period	917,000	92,000
Subscription and Circulation [Member]
Increase (decrease) in liabilities
Deferred revenue	(143,000)	(89,000)
Professional Fees [Member]
Increase (decrease) in liabilities
Deferred revenue	1,105,000	906,000
License and Maintenance [Member]
Increase (decrease) in liabilities
Deferred revenue	$ (513,000)	$ (816,000)

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Note 1 - The Corporation and Operations

3 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Note 1 - The Corporation and Operations

Daily Journal Corporation (“Daily Journal”) publishes newspapers and websites covering California and Arizona and produces several specialized information services. It also serves as a newspaper representative specializing in public notice advertising. This is sometimes referred to as the Company’s “Traditional Business”.

Journal Technologies, Inc. (“Journal Technologies”), a wholly-owned subsidiary of Daily Journal, supplies case management software systems and related products to courts, prosecutor and public defender offices, probation departments and other justice agencies, including administrative law organizations, city and county governments and bar associations. These organizations use the Journal Technologies family of products to help manage cases and information electronically, to interface with other critical justice partners and to extend electronic services to the public, including efiling and a website to pay traffic citations and fees online. These products are licensed in approximately 30 states and internationally. In August 2022, the Company established a new wholly-owned subsidiary, Journal Technologies (Canada) Inc., in Victoria BC, Canada.

Essentially all of the Company’s U.S. operations are based in California, Arizona and Utah. The Company also has a presence in Australia where Journal Technologies is working on three software installation projects.

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Note 2 - Basis of Presentation

3 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Basis of Accounting [Text Block]

Note 2 - Basis of Presentation

In the opinion of the Company, the accompanying interim unaudited consolidated financial statements contain all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of its financial position as of December 31, 2022, its results of operations for the three-month periods ended December 31, 2022 and 2021, its consolidated statements of shareholders’ equity for the three months ended December 31, 2022 and 2021 and cash flows for the three months ended December 31, 2022 and 2021. The results of operations for the three months ended December 31, 2022 are not necessarily indicative of the results to be expected for the full year.

The consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2022.

Certain reclassifications of previously reported amounts have been made to conform to the current year’s presentation.

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Note 3 - New Accounting Pronouncement

3 Months Ended

Dec. 31, 2022

Notes to Financial Statements

New Accounting Pronouncement [Text Block]

Note 3 – New Accounting Pronouncement

No new accounting pronouncement issued or effective has had, or is expected to have, a material impact on the Company’s consolidated financial statements.

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Note 4 - Right-of-use (ROU) Asset

3 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

Note 4 – Right-of-Use (ROU) Asset

At December 31, 2022, the Company had a ROU asset and lease liability of approximately $77,000 for its operating office and equipment leases, including approximately $15,000 beyond one year.  Operating office and equipment leases are included in operating lease ROU assets, current accrued liabilities and long-term accrued liabilities in the Company’s accompanying Consolidated Balance Sheets. 

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Note 5 - Revenue Recognition

3 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

Note 5 – Revenue Recognition

The Company recognizes revenues in accordance with the provisions of ASU No. 2014-09, Revenue from Contracts with Customers (ASC Topic 606).

For the Traditional Business, proceeds from the sale of subscriptions for newspapers, court rule books and other publications and other services are recorded as deferred revenue and are included in earned revenue only when the services are provided, generally over the subscription term. Advertising revenues are recognized when advertisements are published and are net of agency commissions.

Journal Technologies contracts may include several products and services, which are generally distinct and include separate transaction pricing and performance obligations. Most are one-transaction contracts. These current subscription-type contract revenues include (i) implementation consulting fees to configure the system to go-live, (ii) subscription software license, maintenance (including updates and upgrades) and support fees, and (iii) third-party hosting fees when used. Revenues for consulting are generally recognized at point of delivery (go-live) upon completion of services. These contracts include assurance warranty provisions for limited periods and do not include financing terms. For some contracts, the Company acts as a principal with respect to certain services, such as data conversion, interfaces and hosting that are provided by third-parties, and recognizes such revenues on a gross basis. For legacy contracts with perpetual license arrangements, licenses and consulting services are recognized at point of delivery (go-live), and maintenance revenues are recognized ratably after the go-live. Other public service fees are earned and recognized as revenues when the Company processes credit card payments on behalf of the courts via its websites through which the public can efile cases and pay traffic citations and other fees.

ASC 606 also requires the capitalization of certain costs of obtaining contracts, specifically sales commissions which are to be amortized over the expected term of the contracts. For its software contracts, the Company incurs an immaterial amount of sales commission costs which have no significant impact on the Company’s financial condition and results of operations. In addition, the Company’s implementation and fulfillment costs do not meet all criteria required for capitalization.

Since the Company generally recognizes revenues when it can invoice the customer pursuant to the contract for the value of completed performance, as a practical expedient and because reliable estimates cannot be made, it has elected not to include as revenues the transaction price allocated to unsatisfied performance obligations. Also, as a practical expedient, the Company has elected not to include its evaluation of variable consideration of certain usage-based fees (i.e. public service fees) that are included in some contracts. Furthermore, there are no fulfillment costs to be capitalized for the software contracts because these costs do not generate or enhance resources that will be used in satisfying future performance obligations.

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Note 6 - Treasury Stock and Net Income (Loss) Per Common Share

3 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

Note 6 - Treasury stock and net income per common share

In June 2022, the Company received from Director Charles T. Munger 3,720 shares of Daily Journal common stock as his gracious personal gift (worth approximately $1 million on the date of the gift) for the purpose of establishing a new senior management equity incentive plan, which is still in the process of being set up. These donated shares were considered treasury stock, and the Company accounted for them using the par method which resulted in an immaterial effected amount on Treasury Stock and Additional Paid-in Capital. In addition, the number of outstanding shares of the Company was reduced by these 3,720 shares to reflect the actual number of outstanding shares of 1,377,026 as of December 31, 2022. The net income per common share is based on the weighted average number of shares outstanding during each year. The shares used in the calculation were 1,377,026 and 1,380,746 for the three-month periods ended December 31, 2022 and 2021, respectively. The Company does not have any common stock equivalents, and therefore basic and diluted net income per share is the same.

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Note 7 - Basic and Diluted Net Income Per Share

3 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Earnings Per Share [Text Block]

Note 7 - Basic and Diluted Net Income Per Share

The Company does not have any common stock equivalents, and therefore basic and diluted net income per share are the same.

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Note 8 - Investments in Marketable Securities

3 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note 8 - Investments in Marketable Securities

All investments are classified as “Current assets” because they are available for sale at any time. These “available-for-sale” marketable securities are stated at fair value. The Company uses quoted prices in active markets for identical assets (consistent with the Level 1 definition in the fair value hierarchy) to measure the fair value of its investments on a recurring basis pursuant to ASC 820, Fair Value Measurement. As of December 31, 2022 and September 30, 2022, there were net accumulated pretax unrealized gains of $144,717,000 and $120,692,000, respectively, recorded in the accompanying Consolidated Balance Sheets. Most of the accumulated pretax unrealized gains were in the common stocks of three U.S. financial institutions and one foreign manufacturer.

In December 2022, the Company recorded and included in its net income the net unrealized gains on marketable securities of $24,025,000, as compared with the net unrealized losses on marketable securities of $36,088,000, in the prior year period.

In December 2022, the Company sold part of its marketable securities for approximately $2,826,000, realizing net gains of $422,000, and borrowed an additional $6,011,000 from the margin loan account to purchase additional marketable securities with a total cost of approximately $10,001,000.

In December 2021, the Company sold part of its marketable securities for approximately $50,020,000, realizing gains of $46,694,000, and borrowed an additional $37,014,000 from the margin loan account to purchase additional marketable securities with a total cost of approximately $87,125,000.

Investments in marketable securities as of December 31, 2022 and September 30, 2022 are summarized below.

Investment in Financial Instruments

	December 31, 2022						September 30, 2022
	Aggregate fair value		Amortized/ Adjusted cost basis		Pretax unrealized gains		Aggregate fair value		Amortized/ Adjusted cost basis		Pretax unrealized gains
Marketable securities
Common stocks	$	307,151,000	$	162,434,000	$	144,717,000	$	275,529,000	$	154,837,000	$	120,692,000

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Note 9 - Income Taxes

3 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 9 - Income Taxes

For the three months ended December 31, 2022, the Company recorded an income tax provision of $6,100,000 on the pretax income of $23,927,000. The income tax provision consisted of a tax provision of $110,000 on the realized gains on marketable securities and $6,360,000 on the unrealized gains on marketable securities, partially offset by a tax benefit of $140,000 on loss from operations, $80,000 for the dividends received deduction and other permanent book and tax differences, and $150,000 for the effect of a change in state apportionment on the beginning of the year’s deferred tax liability. Consequently, the overall effective tax rate for the three months ended December 31, 2022 was 25.49%, after including the taxes on the realized and unrealized gains on marketable securities.

For the three months ended December 31, 2021, the Company recorded a provision for income taxes of $4,560,000 on pretax income of $11,438,000.   The income tax provision consisted of a tax provision of $230,000 on income from operations, a tax provision of $12,612,000 on the realized gains on marketable securities and a tax provision of $1,556,000 for the effect of a change in state apportionment on the beginning of the year’s deferred tax liability, partially offset by a tax benefit of $9,747,000 on the unrealized losses on marketable securities, and a tax benefit of $91,000 for the dividends received deduction and other permanent book and tax differences. Consequently, the overall effective tax rate for the three months ended December 31, 2021 was 39.87%, after including the taxes on the realized gains and unrealized losses on marketable securities.

The Company files consolidated federal income tax returns in the United States and with various state jurisdictions and is no longer subject to examinations for fiscal years before fiscal 2019 with regard to federal income taxes and fiscal 2018 for state income taxes.

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Note 10 - Debt and Commitments

3 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Commitments Disclosure [Text Block]

Note 10 - Debt and Commitments

During fiscal 2013, the Company borrowed from its investment margin account the aggregate purchase price of $29.5 million for two acquisitions, in each case pledging its marketable securities as collateral. There also have been subsequent borrowings of $51.5 million to purchase additional marketable securities bringing the margin loan balance up to $81.0 million as of December 31, 2022. The interest rate for these investment margin account borrowings fluctuates based on the Federal Funds Rate plus 50 basis points with interest only payable monthly. The interest rate as of December 31, 2022 was 5%. These investment margin account borrowings do not mature.

In November 2015, the Company purchased a 30,700 square foot office building constructed in 1998 on about 3.6 acres in Logan, Utah that had been previously leased by Journal Technologies. The Company paid $1.24 million and financed the balance with a real estate bank loan of $2.26 million which has a fixed interest rate of 3.33%. This loan is secured by the Logan facility and can be paid off at any time without prepayment penalty. This real estate loan had a balance of approximately $1.39 million as of December 31, 2022. Each monthly installment payment is about $16,600. In October 2022, the Company again amended this real estate loan contract as the bank transferred its index to Secured Overnight Financing Rate from London Interbank Offered Rate which was ceased by the Federal Reserve and the Alternative Reference Rates Committee in the United States. The term of the loan, including the interest rate and the balance, was not affected by the amendment.

In April 2022, the Company sold approximately 17,564 square feet of the land along the front of its Logan building to the City of Logan for approximately $381,000 in connection with the City of Logan’s street widening project.

The Company also owns its facilities in Los Angeles and leases space for its other offices under operating leases which expire at various dates through January 2024.

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Note 11 - Contingencies

3 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

Note 11 - Contingencies

From time to time, the Company is subject to contingencies, including litigation, arising in the normal course of its business. While it is not possible to predict the results of such contingencies, management does not believe the ultimate outcome of these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows.

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Note 12 - Operating Segments

3 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 12 - Operating Segments

The Company’s Traditional Business is one reportable segment and the other is Journal Technologies which includes Journal Technologies, Inc. and Journal Technologies (Canada) Inc. All inter-segment transactions were eliminated. Additional detail about each of the reportable segments and its income and expenses is set forth below:

Overall Financial Results (000)
For the three months ended December 31, 2022 and 2021
	Reportable Segments
	Traditional Business						Journal Technologies						Corporate						Total
	2022			2021			2022			2021			2022			2021			2022			2021
Revenues
Advertising	$	1,990		$	2,001		$	---		$	---		$	---		$	---		$	1,990		$	2,001
Circulation		1,098			1,110			---			---			---			---			1,098			1,110
Advertising service fees and other		699			671			---			---			---			---			699			671
Licensing and maintenance fees		---			---			4,395			4,480			---			---			4,395			4,480
Consulting fees		---			---			2,322			1,761			---			---			2,322			1,761
Other public service fees		---			---			1,797			1,713			---			---			1,797			1,713
Total operating revenues		3,787			3,782			8,514			7,954			---			---			12,301			11,736
Operating expenses
Salaries and employee benefits		2,218			2,315			7,413			6,162			---			---			9,631			8,477
Decrease to the long-term supplemental compensation accrual		(500	)		(90	)		(20	)		(40	)		---			---			(520	)		(130	)
Others		1,134			1,051			2,772			2,282			---			---			3,906			3,333
Total operating expenses		2,852			3,276			10,165			8,404			---			---			13,017			11,680
Income (loss) from operations		935			506			(1,651	)		(450	)		---			---			(716	)		56
Dividends and interest income		---			---			---			---			1,069			875			1,069			875
Interest expense on note payable collateralized by real estate and other		---			---			---			---			(12	)		(13	)		(12	)		(13	)
Interest expense on margin loans		---			---			---			---			(861	)		(86	)		(861	)		(86	)
Gains on sales of marketable securities, net		---			---			---			---			422			46,694			422			46,694
Net unrealized gains (losses) on marketable securities		---			---			---			---			24,025			(36,088	)		24,025			(36,088	)
Pretax income (loss)		935			506			(1,651	)		(450	)		24,643			11,382			23,927			11,438
Income tax (expense) benefit		(235	)		(205	)		350			250			(6,215	)		(4,605	)		(6,100	)		(4,560	)
Net income (loss)	$	700		$	301		$	(1,301	)	$	(200	)	$	18,428		$	6,777		$	17,827		$	6,878
Total assets	$	45,288		$	69,925		$	25,202		$	18,925		$	275,781		$	347,157		$	346,271		$	436,007
Capital expenditures		32			---			4			---			---			---			36			---

During the three months ended December 31, 2022, the Traditional Business had total operating revenues of $3,787,000 with $2,689,000 recognized after services were provided and $1,098,000 recognized ratably over the publication subscription terms, as compared with total operating revenues of $3,782,000 with $2,672,000 recognized after services were provided and $1,110,000 recognized ratably over the publication subscription terms in the prior fiscal year period. Total operating revenues for the Company’s software business were $8,514,000 with $4,121,000 recognized upon completion of services and $4,393,000 recognized ratably over the subscription periods, as compared with total operating revenues of $7,954,000 with $3,476,000 recognized upon completion of services and $4,478,000 recognized ratably over the subscription periods in the prior fiscal year period.

Approximately 69% of the Company’s revenues during the three-month period ended December 31, 2022 were derived from Journal Technologies, as compared with 68% in the prior year period. In addition, the Company’s revenues have been primarily from the United States with approximately 7% from foreign countries during the three-months ended December 31, 2022. Journal Technologies’ revenues are primarily from governmental agencies.

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Note 13 - Subsequent Events

3 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Subsequent Events [Text Block]

Note 13 - Subsequent Events

The Company has completed an evaluation of all subsequent events through the issuance date of these financial statements and concluded that no subsequent events occurred that required recognition to the financial statements or disclosures in the Notes to Consolidated Financial Statements, except for sponsoring a 401(k) retirement plan and a 409A non-qualified deferred compensation plan for its employees effective January 1, 2023.

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Note 8 - Investments in Marketable Securities (Tables)

3 Months Ended

Dec. 31, 2022

Notes Tables

Schedule of Available-for-Sale Securities Reconciliation [Table Text Block]

	December 31, 2022						September 30, 2022
	Aggregate fair value		Amortized/ Adjusted cost basis		Pretax unrealized gains		Aggregate fair value		Amortized/ Adjusted cost basis		Pretax unrealized gains
Marketable securities
Common stocks	$	307,151,000	$	162,434,000	$	144,717,000	$	275,529,000	$	154,837,000	$	120,692,000

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Note 12 - Operating Segments (Tables)

3 Months Ended

Dec. 31, 2022

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

Overall Financial Results (000)
For the three months ended December 31, 2022 and 2021
	Reportable Segments
	Traditional Business						Journal Technologies						Corporate						Total
	2022			2021			2022			2021			2022			2021			2022			2021
Revenues
Advertising	$	1,990		$	2,001		$	---		$	---		$	---		$	---		$	1,990		$	2,001
Circulation		1,098			1,110			---			---			---			---			1,098			1,110
Advertising service fees and other		699			671			---			---			---			---			699			671
Licensing and maintenance fees		---			---			4,395			4,480			---			---			4,395			4,480
Consulting fees		---			---			2,322			1,761			---			---			2,322			1,761
Other public service fees		---			---			1,797			1,713			---			---			1,797			1,713
Total operating revenues		3,787			3,782			8,514			7,954			---			---			12,301			11,736
Operating expenses
Salaries and employee benefits		2,218			2,315			7,413			6,162			---			---			9,631			8,477
Decrease to the long-term supplemental compensation accrual		(500	)		(90	)		(20	)		(40	)		---			---			(520	)		(130	)
Others		1,134			1,051			2,772			2,282			---			---			3,906			3,333
Total operating expenses		2,852			3,276			10,165			8,404			---			---			13,017			11,680
Income (loss) from operations		935			506			(1,651	)		(450	)		---			---			(716	)		56
Dividends and interest income		---			---			---			---			1,069			875			1,069			875
Interest expense on note payable collateralized by real estate and other		---			---			---			---			(12	)		(13	)		(12	)		(13	)
Interest expense on margin loans		---			---			---			---			(861	)		(86	)		(861	)		(86	)
Gains on sales of marketable securities, net		---			---			---			---			422			46,694			422			46,694
Net unrealized gains (losses) on marketable securities		---			---			---			---			24,025			(36,088	)		24,025			(36,088	)
Pretax income (loss)		935			506			(1,651	)		(450	)		24,643			11,382			23,927			11,438
Income tax (expense) benefit		(235	)		(205	)		350			250			(6,215	)		(4,605	)		(6,100	)		(4,560	)
Net income (loss)	$	700		$	301		$	(1,301	)	$	(200	)	$	18,428		$	6,777		$	17,827		$	6,878
Total assets	$	45,288		$	69,925		$	25,202		$	18,925		$	275,781		$	347,157		$	346,271		$	436,007
Capital expenditures		32			---			4			---			---			---			36			---

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Note 4 - Right-of-use (ROU) Asset (Details Textual)	Dec. 31, 2022 USD ($)
Office Lease Obligations Beyond One Year	$ 15,000
Accrued Liabilities, Current and Noncurrent [Member]
Operating Lease, Liability, Total	$ 77,000

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Note 6 - Treasury Stock and Net Income (Loss) Per Common Share (Details Textual) - USD ($) $ in Millions	1 Months Ended	3 Months Ended
	Jun. 30, 2022	Dec. 31, 2022	Dec. 31, 2021
Receipt of Donated Treasury Stock, Shares	3,720
Value of Donated Treasury Shares	$ 1
Common Stock, Shares, Outstanding, Ending Balance		1,377,026
Weighted Average Number of Shares Outstanding, Basic, Total		1,377,026	1,380,746

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Note 8 - Investments in Marketable Securities (Details Textual) - USD ($)	1 Months Ended		3 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2022	Dec. 31, 2021	Sep. 30, 2022
Marketable Securities, Accumulated Unrealized Gain (Loss)	$ 144,717,000		$ 144,717,000		$ 120,692,000
Marketable Securities, Unrealized Gain (Loss)			24,025,000	$ (36,088,000)
Marketable Securities, Unrealized Gain (Loss)			(24,025,000)	36,088,000
Proceeds from Sale and Maturity of Debt Securities, Available-for-Sale, Total	2,826,000	$ 50,020,000	2,826,000	50,020,000
Marketable Securities, Realized Gain (Loss)	422,000	46,694,000	422,000	46,694,000
Borrowed Funds from Margin Loan Account	6,011,000	37,014,000
Payments to Acquire Marketable Securities	$ 10,001,000	$ 87,125,000	$ 10,001,000	$ 87,125,000

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Note 8 - Investments in Marketable Securities - Summary of Investments (Details) - Common Stock [Member] - USD ($)	Dec. 31, 2022	Sep. 30, 2022
Marketable securities, fair value	$ 307,151,000	$ 275,529,000
Marketable securities, amortized cost	162,434,000	154,837,000
Marketable securities, gross unrealized gains	$ 144,717,000	$ 120,692,000

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Note 9 - Income Taxes (Details Textual) - USD ($)	3 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Income Tax Expense (Benefit), Total	$ 6,100,000	$ 4,560,000
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total	23,927,000	11,438,000
Effective Income Tax Rate Reconciliation, Realized Gains on Marketable Securities, Amount	110,000	1,556,000
Effective Income Tax Rate Reconciliation, Unrealized Gains (Losses) on Marketable Securities, Amount	6,360,000	$ 12,612,000
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount	140,000
Effective Income Tax Rate Reconciliation, Deduction, Dividends, Amount	80,000
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount	$ 150,000
Effective Income Tax Rate Reconciliation, Percent, Total	0.00%	39.87%
Effective Income Tax Rate Reconciliation, Tax Contingency, State and Local, Amount		$ 9,747,000
Domestic Tax Authority [Member]
Open Tax Year	2020 2021 2022
State and Local Jurisdiction [Member]
Open Tax Year	2019 2020 2021 2022

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Note 10 - Debt and Commitments (Details Textual)	1 Months Ended		3 Months Ended	12 Months Ended
	Apr. 30, 2022 USD ($) ft²	Nov. 30, 2015 USD ($) ft² a	Dec. 31, 2022 USD ($)	Sep. 30, 2013 USD ($)	Sep. 30, 2022 USD ($)
Investment Margin Account			$ 81,011,000		$ 75,000,000
Payments to Acquire Property, Plant, and Equipment, Total			36,000
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member]
Area of Real Estate Property | ft²	17,564
Proceeds from Sale of Land Held-for-use	$ 381,000
UTAH | Building [Member]
Area of Real Estate Property | ft²		30,700
UTAH | Land [Member]
Area of Land | a		3.6
Payments to Acquire Property, Plant, and Equipment, Total		$ 1,240,000
Margin Account [Member]
Proceeds from Issuance of Debt			51,500,000	$ 29,500,000
Investment Margin Account			$ 81,000,000.0
Debt Instrument, Interest Rate, Effective Percentage			5.00%
Margin Account [Member] | Fed Funds Rate [Member]
Debt Instrument, Basis Spread on Variable Rate			0.50%
Real Estate Bank Loan Secured by Logan Office [Member]
Loans Payable to Bank, Total		$ 2,260,000	$ 1,390,000
Long-Term Debt, Percentage Bearing Fixed Interest, Percentage Rate		3.33%
Debt Instrument, Periodic Payment, Total			$ 16,600

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Note 12 - Operating Segments (Details Textual) - USD ($)	3 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Revenue from Contract with Customer, Including Assessed Tax	$ 12,301,000	$ 11,736,000
Product Concentration Risk [Member] | Revenue Benchmark [Member] | Non-US [Member]
Concentration Risk, Percentage	7.00%
Traditional Business [Member]
Revenue from Contract with Customer, Including Assessed Tax	$ 3,787,000	3,782,000
Traditional Business [Member] | Transferred at Point in Time [Member]
Revenue from Contract with Customer, Including Assessed Tax	2,689,000	2,672,000
Traditional Business [Member] | Transferred over Time [Member]
Revenue from Contract with Customer, Including Assessed Tax	1,098,000	1,110,000
Journal Technologies [Member]
Revenue from Contract with Customer, Including Assessed Tax	$ 8,514,000	$ 7,954,000
Journal Technologies [Member] | Product Concentration Risk [Member] | Revenue Benchmark [Member]
Concentration Risk, Percentage	69.00%	68.00%
Journal Technologies [Member] | Transferred at Point in Time [Member]
Revenue from Contract with Customer, Including Assessed Tax	$ 4,121,000	$ 3,476,000
Journal Technologies [Member] | Transferred over Time [Member]
Revenue from Contract with Customer, Including Assessed Tax	$ 4,393,000	$ 4,478,000

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Note 12 - Operating Segments - Summarized Financial Information for Reportable Segments (Details) - USD ($)	1 Months Ended		3 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2022	Dec. 31, 2021	Sep. 30, 2022
Revenue from Contract with Customer, Including Assessed Tax			$ 12,301,000	$ 11,736,000
Salaries and employee benefits			9,631,000	8,477,000
Decrease to the long-term supplemental compensation accrual			(520,000)	(130,000)
Others			3,906,000	3,333,000
Total operating expenses			13,017,000	11,680,000
Income (loss) from operations			(716,000)	56,000
Dividends and interest income			1,069,000	875,000
Realized gains on sales of marketable securities	$ 422,000	$ 46,694,000	422,000	46,694,000
Marketable Securities, Unrealized Gain (Loss)			24,025,000	(36,088,000)
Pretax income (loss)			23,927,000	11,438,000
Income tax provisions			(6,100,000)	(4,560,000)
Net income			17,827,000	6,878,000
Total assets	346,271,000	436,007,000	346,271,000	436,007,000	$ 319,111,000
Capital expenditures			36,000
Real Estate Bank Loan Secured by Logan Office [Member]
Interest expense on debt			(12,000)	(13,000)
Margin Account [Member]
Interest expense on debt			(861,000)	(86,000)
Advertising [Member]
Revenue from Contract with Customer, Including Assessed Tax			1,990,000	2,001,000
Subscription and Circulation [Member]
Revenue from Contract with Customer, Including Assessed Tax			1,098,000	1,110,000
Advertising Service Fees and Other [Member]
Revenue from Contract with Customer, Including Assessed Tax			699,000	671,000
License and Maintenance [Member]
Revenue from Contract with Customer, Including Assessed Tax			4,395,000	4,480,000
Consulting Fees [Member]
Revenue from Contract with Customer, Including Assessed Tax			2,322,000	1,761,000
Service, Other [Member]
Revenue from Contract with Customer, Including Assessed Tax			1,797,000	1,713,000
Traditional Business [Member]
Revenue from Contract with Customer, Including Assessed Tax			3,787,000	3,782,000
Journal Technologies [Member]
Revenue from Contract with Customer, Including Assessed Tax			8,514,000	7,954,000
Operating Segments [Member] | Traditional Business [Member]
Revenue from Contract with Customer, Including Assessed Tax			3,787,000	3,782,000
Salaries and employee benefits			2,218,000	2,315,000
Decrease to the long-term supplemental compensation accrual			(500,000)	(90,000)
Others			1,134,000	1,051,000
Total operating expenses			2,852,000	3,276,000
Income (loss) from operations			935,000	506,000
Pretax income (loss)			935,000	506,000
Income tax provisions			(235,000)	(205,000)
Net income			700,000	301,000
Total assets	45,288,000	69,925,000	45,288,000	69,925,000
Operating Segments [Member] | Traditional Business [Member] | Advertising [Member]
Revenue from Contract with Customer, Including Assessed Tax			1,990,000	2,001,000
Operating Segments [Member] | Traditional Business [Member] | Subscription and Circulation [Member]
Revenue from Contract with Customer, Including Assessed Tax			1,098,000	1,110,000
Operating Segments [Member] | Traditional Business [Member] | Advertising Service Fees and Other [Member]
Revenue from Contract with Customer, Including Assessed Tax			699,000	671,000
Operating Segments [Member] | Journal Technologies [Member]
Revenue from Contract with Customer, Including Assessed Tax			8,514,000	7,954,000
Salaries and employee benefits			7,413,000	6,162,000
Decrease to the long-term supplemental compensation accrual			(20,000)
Others			2,772,000	2,282,000
Total operating expenses			10,165,000	8,404,000
Income (loss) from operations			(1,651,000)	(450,000)
Pretax income (loss)			(1,651,000)	(450,000)
Income tax provisions			350,000	250,000
Net income			(1,301,000)	(200,000)
Total assets	25,202,000	18,925,000	25,202,000	18,925,000
Capital expenditures			4,000
Operating Segments [Member] | Journal Technologies [Member] | License and Maintenance [Member]
Revenue from Contract with Customer, Including Assessed Tax			4,395,000	4,480,000
Operating Segments [Member] | Journal Technologies [Member] | Consulting Fees [Member]
Revenue from Contract with Customer, Including Assessed Tax			2,322,000	1,761,000
Operating Segments [Member] | Journal Technologies [Member] | Service, Other [Member]
Revenue from Contract with Customer, Including Assessed Tax			1,797,000	1,713,000
Corporate, Non-Segment [Member]
Dividends and interest income			1,069,000	875,000
Realized gains on sales of marketable securities			422,000	46,694,000
Marketable Securities, Unrealized Gain (Loss)			24,025,000	(36,088,000)
Pretax income (loss)			24,643,000	11,382,000
Income tax provisions			(6,215,000)	(4,605,000)
Net income			18,428,000	6,777,000
Total assets	$ 275,781,000	$ 347,157,000	275,781,000	347,157,000
Corporate, Non-Segment [Member] | Real Estate Bank Loan Secured by Logan Office [Member]
Interest expense on debt			(12,000)	(13,000)
Corporate, Non-Segment [Member] | Margin Account [Member]
Interest expense on debt			$ (861,000)	$ (86,000)