# Daily Journal Corp: Form 10-Q for the period ended Jun 30, 2025

- Company: [Daily Journal Corp](/companies/djco.md) (CIK 783412)
- Form: 10-Q
- Filed: 2025-08-14
- Accepted by EDGAR: Aug 14, 2025, 16:32 ET
- Period: 2025-06-30
- Accession: 0001437749-25-026968
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/783412/000143774925026968/djco20250630_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/783412/000143774925026968/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-04-01 to 2025-06-30 | $23.4m | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Revenue | 9 months, 2024-10-01 to 2025-06-30 | $59.3m | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Operating income | 3 months, 2025-04-01 to 2025-06-30 | $3.2m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2024-10-01 to 2025-06-30 | $4.9m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | $3.8m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2024-10-01 to 2025-06-30 | $24.4m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | $14.4m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-10-01 to 2025-06-30 | $70.0m | us-gaap:NetIncomeLoss |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | $10.47 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-10-01 to 2025-06-30 | $50.81 | us-gaap:EarningsPerShareBasic |
| Operating cash flow | 9 months, 2024-10-01 to 2025-06-30 | $8.8m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2024-10-01 to 2025-06-30 | $0 | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2025-06-30 | $18.7m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-06-30 | $485.7m | us-gaap:AssetsCurrent |
| Total assets | at 2025-06-30 | $494.7m | us-gaap:Assets |
| Current liabilities | at 2025-06-30 | $39.1m | us-gaap:LiabilitiesCurrent |
| Shareholders' equity | at 2025-06-30 | $348.9m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 27,362 characters.

### 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 e-filing and a website to pay traffic citations and fees online. These products are licensed or subscribed to in approximately 32 states and internationally.

### 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 nine months ended June 30

| Revenues | Reportable Segments Traditional Business 2025 | 2024 | Journal Technologies 2025 | 2024 | Corporate 2025 | 2024 | Total 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Advertising | $7,642 | $6,939 | $- | $- | $- | $- | $7,642 | $6,939 |
| Circulation | 3,196 | 3,283 | - | - | - | - | 3,196 | 3,283 |
| Advertising service fees and other | 2,514 | 2,204 | - | - | - | - | 2,514 | 2,204 |
| Licensing and maintenance fees | - | - | 22,990 | 20,572 | - | - | 22,990 | 20,572 |
| Consulting fees | - | - | 11,792 | 9,939 | - | - | 11,792 | 9,939 |
| Other public service fees | - | - | 11,152 | 7,121 | - | - | 11,152 | 7,121 |
| Total operating revenues | 13,352 | 12,426 | 45,934 | 37,632 | - | - | 59,286 | 50,058 |
| Operating expenses |  |  |  |  |  |  |  |  |
| Salaries and employee benefits | 8,313 | 7,829 | 31,207 | 27,354 | - | - | 39,520 | 35,183 |
| Stock-based compensation | 17 | - | 95 | - | - | - | 112 | - |
| (Decrease) increase to the long-term supplemental compensation accrual | (70) | (1,380) | 10 | (30) | - | - | (60) | (1,410) |
| Others | 4,855 | 4,376 | 9,930 | 9,563 | - | - | 14,785 | 13,939 |
| Total operating expenses | 13,115 | 10,825 | 41,242 | 36,887 | - | - | 54,357 | 47,712 |
| Income from operations | 237 | 1,601 | 4,692 | 745 | - | - | 4,929 | 2,346 |
| Dividends and interest income | - | - | - | - | 6,158 | 5,857 | 6,158 | 5,857 |
| Rental income | - | - | - | - | 24 | - | 24 | - |
| Interest expense on note payable collateralized by real estate | - | - | - | - | (27) | (31) | (27) | (31) |
| Interest expense on margin loans and others | - | - | - | - | (1,050) | (2,622) | (1,050) | (2,622) |
| Increase in fair value of derivative asset | - | - | - | - | 75 | - | 75 | - |
| Net unrealized (losses) gains on non-qualified compensation plan | - | - | - | - | (33) | 173 | (33) | 173 |
| Net realized and unrealized gains on marketable securities | - | - | - | - | 84,320 | 62,472 | 84,320 | 62,472 |
| Pretax income | 237 | 1,601 | 4,692 | 745 | 89,467 | 65,849 | 94,396 | 68,195 |
| Income tax expense | (60) | (390) | (1,255) | (380) | (23,095) | (16,040) | (24,410) | (16,810) |
| Net income | $177 | $1,211 | $3,437 | $365 | $66,372 | $49,809 | $69,986 | $51,385 |
| Total assets | $19,853 | $12,893 | $31,857 | $31,231 | $443,011 | $325,737 | $494,721 | $369,861 |
| Capital expenditures | $- | $23 | $- | $- | $- | $- | $- | $23 |

19

#### Comparable nine-month periods ended June 30, 2025 and 2024

#### Consolidated Financial Comparison

Consolidated revenues were $59,286,000 and $50,058,000 for the nine months ended June 30, 2025 and 2024, respectively. This increase of $9,228,000 (18%) was primarily from increases in (i) Journal Technologies’ license and maintenance fees of $2,418,000, consulting fees of $1,853,000, and other public service fees of $4,031,000, and (ii) the Traditional Business’ advertising revenues of $703,000 and advertising service fees and other of $310,000.

Approximately 77% of the Company’s revenues during the nine months ended June 30, 2025 were derived from Journal Technologies. In addition, the Company’s revenues during the nine months ended June 30, 2025 were primarily from the United States, with approximately $5,586,000 (9%) from foreign countries. Almost all of Journal Technologies’ revenues were from governmental agencies.

Consolidated operating expenses increased by $6,645,000 (14%) to $54,357,000 from $47,712,000. Total salaries and employee benefits increased by $4,093,000 (12%) to $39,520,000 from $35,427,000 primarily due to annual salary adjustments and the hiring of additional staff members to strengthen operational efficiencies, conduct product development and address technical debt, and bolster teams working on the Company’s installation projects. Outside services increased by $102,000 (2%) to $5,322,000 from $5,220,000 mainly because of increased third-party hosting fees which were billed to clients. Equipment and maintenance and software went up by $203,000 (18%) to $1,333,000 from $1,130,000 primarily because of purchases of additional equipment for the new hires. Accounting and legal fees increased by $291,000 (39%) to $1,030,000 from $739,000 primarily resulting from increased legal fees.

The Company’s non-operating income, net of expenses, increased by $23,618,000 (36%) to $89,467,000 from $65,849,000 in the prior fiscal year period primarily because of the recording of net unrealized gains on marketable securities of $84,320,000 as compared with realized and unrealized gains on marketable securities of $62,472,000 in the prior fiscal year period. There was also an increase in dividends and interest income of $301,000 (5%) to $6,158,000 from $5,857,000.

During the nine months ended June 30, 2025, the Company’s consolidated pretax income was $94,396,000, as compared to $68,195,000 in the prior fiscal year period. There was consolidated net income of $69,986,000 ($50.81 per share) for the nine months ended June 30, 2025, as compared with $51,385,000 ($37.32 per share) in the prior fiscal year period.

At June 30, 2025, the aggregate fair market value of the Company’s marketable securities was $443,011,000. These securities had approximately $303,917,000 of net unrealized gains before taxes of $79,260,000. Most of the unrealized gains were in the common stocks of three U.S. financial institutions and one foreign manufacturer.

#### Taxes

For the nine months ended June 30, 2025, the Company recorded an income tax provision of $24,410,000 on the pretax income of $94,396,000. The income tax provision consisted of tax provisions of $21,990,000 on the unrealized gains on marketable securities, $70,000 on income from foreign operations, $2,530,000 on income from US operations and dividend income and $170,000 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 $350,000 for the dividends received deduction and other permanent book and tax differences. Consequently, the overall effective tax rate for the nine months ended June 30, 2025 was 25.9%, after including the taxes on the unrealized gains on marketable securities.

For the nine months ended June 30, 2024, the Company recorded an income tax provision of $16,810,000 on the pretax income of $68,195,000. The income tax provision consisted of tax provisions of $3,690,000 on the realized gains on marketable securities, $12,480,000 on the unrealized gains on marketable securities, $50,000 on income from foreign operations, and $1,440,000 on income from US operations and dividend income, partially offset by a tax benefit of $330,000 for the dividends received deduction and other permanent book and tax differences, and a tax benefit of $520,000 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 nine months ended June 30, 2024 was 24.65%, after including the taxes on the realized and unrealized gains 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 2021 with regard to federal income taxes and fiscal 2020 for state income taxes.

#### The Traditional Business

The Traditional Business’ pretax income decreased by $1,364,000 (85%) to $237,000 from $1,601,000. This decrease primarily resulted from increased expenses of $2,290,000 mainly due to increases in the long-term supplemental compensation accrual, partially offset by increased revenues of $926,000.

During the nine months ended June 30, 2025, the Traditional Business had total operating revenues of $13,352,000, as compared with $12,426,000 in the prior fiscal year period. Advertising revenues increased by $703,000 (10%) to $7,642,000 from $6,939,000, primarily resulting from increased commercial advertising revenues of $380,000, legal notice advertising revenues of $154,000, trustee sale notice advertising revenues of $108,000, and government notice advertising revenues of $61,000. In addition, advertising service fees and other revenues increased by $310,000 (14%) to $2,514,000 from $2,204,000.

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 12% during the nine months ended June 30, 2025 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 84% of the total public notice advertising revenues during the nine months ended June 30, 2025. Public notice advertising revenues and related advertising and other service fees, including trustee sales legal advertising revenues, constituted about 13% of the Company's total operating revenues for the nine months ended June 30, 2025 and 14% for the nine months ended June 30, 2024.

The Daily Journals accounted for about 94% of the Traditional Business’ total circulation revenues, which decreased by $87,000 (3%) to $3,196,000 from $3,283,000. The court rule and judicial profile services generated about 4% 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.

The Traditional Business segment operating expenses, excluding the adjustments to the long-term supplemental compensation accrual, increased by $980,000 (8%) to $13,185,000 from $12,205,000 primarily due to increased personnel costs and agency commission expenses.

#### Journal Technologies

During the nine months ended June 30, 2025, Journal Technologies’ business segment pretax income increased by $3,947,000 (530%) to $4,692,000 from $745,000 in the prior fiscal year period primarily resulting from increased operating revenues of $8,302,000, which were partially offset by increased operating expenses of $4,355,000.

Revenues increased by $8,302,000 (22%) to $45,934,000 from $37,632,000 in the prior fiscal year period. Licensing and maintenance fees increased by $2,418,000 (12%) to $22,990,000 from $20,572,000. Consulting fees increased by $1,853,000 (19%) to $11,792,000 from $9,939,000 mainly due to more customer projects being completed during the fiscal 2025 period. Other public service fees increased by $4,031,000 (57%) to $11,152,000 from $7,121,000 primarily because of increased e-filing fee revenues.

Deferred consulting fees primarily represent advances from customers of Journal Technologies for installation services that are recognized upon the completion of service obligations. Deferred revenues on license and maintenance contracts represent prepayments of annual license and maintenance fees and are recognized ratably over the maintenance periods.

Operating expenses increased by $4,355,000 (12%) to $41,242,000 from $36,887,000 primarily because of (i) increased personnel costs because of annual salary adjustments, (ii) additional contractor services and the hiring of additional staff members to strengthen operational efficiencies, conduct product development and address technical debt, and bolster teams working on the Company’s installation projects, and (iii) increased third-party hosting fees which were billed to clients.

Journal Technologies continues to update and upgrade its software products, which includes work deemed necessary by management to strengthen product management and quality assurance/quality control, as well as update aspects like user experience, documentation, regionalization, and ease of ongoing customer upgrades (which the Company believes should correspondingly reduce costs for Journal Technologies over the longer term). These costs are expensed as incurred and will impact earnings at least through the foreseeable future. The Company will capitalize software development costs if those costs are required to be capitalized under GAAP, which generally means development costs incurred during the typically short period of time, if any, between a product’s technological feasibility and general release. There are also new investments getting underway flowing from research and development related to new possibilities afforded by emerging technologies to offer new types of capabilities to customers and to streamline the process of building and upgrading applications.

#### Comparable Segments (for the three-month periods ended June 30, 2025 and 2024)

Overall Financial Results (000)

For the three months ended June 30

| Revenues | Reportable Segments Traditional Business 2025 | 2024 | Journal Technologies 2025 | 2024 | Corporate 2025 | 2024 | Total 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Advertising | $2,798 | $2,536 | $- | $- | $- | $- | $2,798 | $2,536 |
| Circulation | 1,069 | 1,089 | - | - | - | - | 1,069 | 1,089 |
| Advertising service fees and other | 1,014 | 802 | - | - | - | - | 1,014 | 802 |
| Licensing and maintenance fees | - | - | 7,964 | 7,161 | - | - | 7,964 | 7,161 |
| Consulting fees | - | - | 6,529 | 3,438 | - | - | 6,529 | 3,438 |
| Other public service fees | - | - | 4,032 | 2,468 | - | - | 4,032 | 2,468 |
| Total operating revenues | 4,881 | 4,427 | 18,525 | 13,067 | - | - | 23,406 | 17,494 |
| Operating expenses |  |  |  |  |  |  |  |  |
| Salaries and employee benefits | 3,303 | 2,656 | 11,475 | 9,341 | - | - | 14,778 | 11,997 |
| Stock-based compensation | 3 | - | 20 | - | - | - | 23 | - |
| Increase (decrease) to the long-term supplemental compensation accrual | 565 | (580) | 10 | - | - | - | 575 | (580) |
| Others | 1,944 | 1,611 | 2,862 | 3,376 | - | - | 4,806 | 4,987 |
| Total operating expenses | 5,815 | 3,687 | 14,367 | 12,717 | - | - | 20,182 | 16,404 |
| Income from operations | (934) | 740 | 4,158 | 350 | - | - | 3,224 | 1,090 |
| Dividends and interest income | - | - | - | - | 3,796 | 2,999 | 3,796 | 2,999 |
| Rental income | - | - | - | - | 15 | - | 15 | - |
| Interest expense on note payable collateralized by real estate | - | - | - | - | (9) | (10) | (9) | (10) |
| Interest expense on margin loans and other | - | - | - | - | (323) | (435) | (323) | (435) |
| Decrease in fair value of derivative asset | - | - | - | - | (13) | - | (13) | - |
| Net unrealized gains on non-qualified compensation plan | - | - | - | - | 20 | 173 | 20 | 173 |
| Net unrealized gains on marketable securities | - | - | - | - | 11,521 | 28,018 | 11,521 | 28,018 |
| Pretax income | (934) | 740 | 4,158 | 350 | 15,007 | 30,745 | 18,231 | 31,835 |
| Income tax expense | 255 | (190) | (1,070) | (290) | (2,995) | (8,000) | (3,810) | (8,480) |
| Net income | $(679) | $550 | $3,088 | $60 | $12,012 | $22,745 | $14,421 | $23,355 |
| Total assets | $19,853 | $12,893 | $31,857 | $31,231 | $443,011 | $325,737 | $494,721 | $369,861 |
| Capital expenditures | $- | $- | $- | $- | $- | $- | $- | $- |

Consolidated revenues were $23,406,000 and $17,494,000 for the three months ended June 30, 2025 and 2024, respectively. This increase of $5,912,000 (34%) was primarily from increases in (i) Journal Technologies’ license and maintenance fees of $803,000, consulting fees of $3,091,000 and other public service fees of $1,564,000, and (ii) the Traditional Business’ advertising revenues of $262,000, and advertising service fees and other of $212,000.

Approximately 79% of the Company’s revenues during the three months ended June 30, 2025 were derived from Journal Technologies. In addition, the Company’s revenues during the three months ended June 30, 2025 were primarily from the United States, with approximately $3,833,000 (16%) from foreign countries. Almost all of Journal Technologies’ revenues were from governmental agencies.

Consolidated operating expenses increased by $3,778,000 (23%) to $20,182,000 from $16,404,000. Total salaries and employee benefits increased by $2,709,000 (22%) to $14,778,000 from $12,069,000 primarily due to annual salary adjustments and the hiring of additional staff members at Journal Technologies to strengthen operational efficiencies, conduct product development and address technical debt, and bolster teams working on and supporting the Company’s installation projects. Accounting and legal fees increased by $115,000 (35%) to $443,000 from $328,000 primarily resulting from increased legal fees.

The Company’s non-operating income, net of expenses, decreased by $15,738,000 (51%) to $15,007,000 from $30,745,000 in the prior fiscal year period primarily because of the recording of net unrealized gains on marketable securities of $11,521,000 as compared with $28,018,000 in the prior fiscal year period. There was an increase in dividends and interest income of $797,000 (27%) to $3,796,000 from $2,999,000.

During the three months ended June 30, 2025, the Company’s consolidated pretax income was $18,231,000, as compared to $31,835,000 in the prior fiscal year period. There was consolidated net income of $14,421,000 ($10.47 per share) for the three months ended June 30, 2025, as compared with $23,355,000 ($16.96 per share) in the prior fiscal year period.

#### The Traditional Business

The Traditional Business’ pretax income decreased by $1,674,000 (226% to a loss of $934,000 from a profit of $740,000. This decrease primarily resulted from increased expenses of $2,128,000 mainly due to increases in the long-term supplemental compensation accrual of $1,145,000, partially offset by increased in revenues of $454,000.

During the three months ended June 30, 2025, the Traditional Business had total operating revenues of $4,881,000, as compared with $4,427,000 in the prior fiscal year period. Advertising revenues increased by $262,000 (10%) to $2,798,000 from $2,536,000, primarily resulting from increased commercial advertising revenues of $155,000, legal notice advertising revenues of $90,000 and trustee sale notice advertising revenues of $27,000, partially offset by decreased government notice advertising revenues of $10,000.

#### Journal Technologies

During the three months ended June 30, 2025, Journal Technologies’ business segment pretax income increased by $3,808,000 (1088%) to $4,158,000 from $350,000 in the prior fiscal year period primarily resulting from increased operating revenues of $5,458,000, which were partially offset by increased operating expenses of $1,650,000.

Revenues increased by $5,458,000 (44%) to $18,525,000 from $13,067,000 in the prior fiscal year period. Licensing and maintenance fees increased by $803,000 (11%) to $7,964,000 from $7,161,000. Consulting fees increased by $3,091,000 (90%) to $6,529,000 from $3,438,000 mainly due to more customer project being completed. Other public service fees increased by $1,564,000 (63%) to $4,032,000 from $2,468,000 primarily because of increased e-filing fee revenues.

Operating expenses increased by $1,650,000 (13%) to $14,367,000 from $12,717,000 primarily because of additional contractor services and the hiring of additional staff members and increased third-party hosting fees which were billed to clients.

### Liquidity and Capital Resources

During the nine months ended June 30, 2025, the Company’s cash and cash equivalents, restricted cash, and marketable security positions increased by $90,097,000 after the recording of net pretax unrealized gains on marketable securities of $84,320,000, and a payment of $2.5 million to reduce the margin loan balance to $25 million.

The investments in marketable securities, which had an adjusted cost basis of approximately $139,094,000 and a market value of about $443,011,000 at June 30, 2025, generated approximately $6,158,000 in dividends and interest income during the nine months ended June 30, 2025. These securities had approximately $303,917,000 of net unrealized gains before estimated taxes of $79,260,000 that will become due only when we sell securities in which there is unrealized appreciation. The balance on the Company’s margin loan secured by the securities portfolio was $25,000,000 at June 30, 2025, as compared to $27,500,000 at September 30, 2024.

Cash flows from operating activities increased by $12,022,000 during the nine months ended June 30, 2025 as compared to the prior fiscal year period, primarily due to (i) decreases in accounts receivable of $3,056,000, and (ii) increases the Company’s deferred income tax liabilities of $9,943,000, income tax payable of $768,000, accounts payable of $2,122,000 and accrued liabilities (which included non-qualified deferred compensation) of $2,911,000. This was partially offset by decreases in deferred revenues of $3,496,000, and net income of $3,247,000, after excluding the increases in realized and unrealized gains on marketable securities of $21,848,000.

As of June 30, 2025, the Company had working capital of $446,595,000, including the liabilities for deferred subscriptions, deferred consulting fees and deferred maintenance agreements and others of $20,164,000.

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 and expects that any such cash flows will be invested in its businesses. 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 additional 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.

### 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, 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, 2024. 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, and disruptive new technologies like artificial intelligence; Journal Technologies’ reliance on professional services engagements with justice agencies; material changes in the costs of postage and paper; additional 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; a 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, 2024.

## Controls and procedures

As filed, 1,744 characters.

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, 2024, management concluded that the Company’s disclosure controls and procedures were not effective as of June 30, 2025. 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 June 30, 2025, except for the remediation activities described below.

Specifically, during the third quarter of fiscal 2025, the Company:

- Hired additional finance and accounting personnel to strengthen the design, operation, and documentation of internal control over financial reporting.
- Commenced the implementation of a new consolidated enterprise resource planning (ERP) system to improve the accuracy, consistency, and efficiency of financial reporting processes.
- Enhanced internal review procedures and related processes to ensure proper timing of revenue recognition and improved oversight.
- Engaged a third-party consulting firm to update its risk assessment and document and validate remediation actions.
- Searched for (and following the third quarter, hired) a Director of SEC Reporting to focus on the Company’s compliance with its public reporting requirements.

Management and the Board intend to continue with these and other efforts until they are satisfied that the Company’s material weaknesses in internal control over financial reporting have been remediated. The Company naturally expects these remediation activities to result in additional costs, which will be allocated to the appropriate reportable segments.

Filed Aug 14, 2025.
Source: SEC EDGAR, the filing index for accession 0001437749-25-026968. Last ingested by Listed: Nov 2, 2026, 16:22 ET. No prices; not investment advice.