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

6 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Equity [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 effect on the amount of 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 March 31, 2023. 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- and six-month periods ended March 31, 2023 and 2022, respectively. The Company does not have any common stock equivalents, and therefore basic and diluted net income per share is the same.