DAILY JOURNAL CORP MANAGEMENT REPORT OF FINANCIAL POSITION AND OPERATING RESULTS (Form 10-Q)

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Operating results



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. ("Journal
Technologies"), a wholly-owned subsidiary 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 approximately 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.



Management believes that the COVID-19 pandemic has had, and, with the Delta and
Omicron variant cases, and most recently the more contagious BA.4 and BA.5
sub-variant cases, will continue to have, a significant impact on the Company's
business operations. It is also possible that governments may again take actions
in response to the pandemic and new variants and sub-variants, such as a renewed
closure, or scaling back of operations, of courts and other governmental
agencies that are the customers of the Company. Furthermore, even as courts,
governmental agencies and other businesses return to more normal operations,
there are likely to be changes in those operations and personal behaviors going
forward, including limitations on travel and more working from home, which will
adversely affect the Company, its financial results and cash flows.



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.



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Segments to be presented (for the nine months ended June 30, 2022 and 2021)



The Company's Traditional Business is one reportable segment, and the other is
Journal Technologies. Additional details about each of the reportable segments
and its corporate income and expenses is set forth below:



                        Overall Financial Results (000)

                       For the nine months ended June 30



                                   Reportable Segments
                          Traditional                 Journal                   Corporate
                           Business                Technologies            income and expenses                 Total
                       2022         2021         2022         2021          2022          2021          2022          2021
Revenues
Advertising          $  5,679     $  5,649     $    ---     $    ---     $      ---     $     ---     $   5,679     $   5,649
Circulation             3,279        3,458          ---          ---            ---           ---         3,279         3,458
Advertising
service fees and
other                   2,200        1,964          ---          ---            ---           ---         2,200         1,964
Licensing and
maintenance fees          ---          ---       13,721       16,990            ---           ---        13,721        16,990
Consulting fees           ---          ---        4,697        4,649            ---           ---         4,697         4,649
Other public
service fees              ---          ---        5,221        5,242            ---           ---         5,221         5,242
Total revenues         11,158       11,071       23,639       26,881            ---           ---        34,797        37,952
Operating expenses
Salaries and
employee benefits       6,864        6,687       19,881       19,131            ---           ---        26,745        25,818
(Decrease)
increase to the
long-term
supplemental
compensation
accrual                   (25 )      1,410          (40 )        ---            ---           ---           (65 )       1,410
Others                  2,877        2,904        6,914        5,506            ---           ---         9,791         8,410
Total operating
expenses                9,716       11,001       26,755       24,637            ---           ---        36,471        35,638
Income (loss) from
operations              1,442           70       (3,116 )      2,244            ---           ---        (1,674 )       2,314
Dividends and
interest income           ---          ---          ---          ---          4,251         2,063         4,251         2,063
Gains on sale of
land                      ---          ---          ---          ---            272           ---           272           ---
Other income              ---          ---          ---          ---            ---            69           ---            69
Interest expenses
on note payable
collateralized by
real estate and
other                     ---          ---          ---          ---            (38 )         (48 )         (38 )         (48 )
Interest expenses
on margin loans           ---          ---          ---          ---           (517 )        (196 )        (517 )        (196 )
Net realized gains
on sales of
marketable
securities                ---          ---          ---          ---         14,249        18,478        14,249        18,478
Net unrealized
(losses) gains on
marketable
securities                ---          ---          ---          ---        (57,075 )     131,754       (57,075 )     131,754
Pretax income
(loss)                  1,442           70       (3,116 )      2,244        (38,858 )     152,120       (40,532 )     154,434
Income tax
(expense) benefit        (335 )        (15 )        985         (785 )        9,085       (39,315 )       9,735       (40,115 )
Net income (loss)    $  1,107     $     55     $ (2,131 )   $  1,459     $  (29,773 )   $ 112,805     $ (30,797 )   $ 114,319
Total assets         $ 22,091     $ 17,894     $ 20,814     $ 21,498     $  341,669     $ 350,108     $ 384,574     $ 389,500
Capital
expenditures         $      4     $     22     $     10     $      7     $      ---     $     ---     $      14     $      29




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Comparable nine-month periods ended June 30, 2022 and 2021

Consolidated financial comparison



Consolidated revenues were $34,797,000 and $37,952,000 for the nine months ended
June 30, 2022 and 2021, respectively. This decrease of $3,155,000 (8%) was
primarily from decreases in (i) Journal Technologies' license and maintenance
fees of $3,269,000 and public service fees of $21,000, and (ii) the Traditional
Business' circulation revenues of $179,000, partially offset by increases in
Journal Technologies' consulting fees of $48,000 and the Traditional Business'
advertising net revenues of $30,000 and advertising service fees and other of
$236,000.



Approximately 68% of the Company's revenues during the nine months ended June
30, 2022 were derived from Journal Technologies, as compared with 71% in the
prior fiscal year period. In addition, the Company's revenues have been
primarily from the United States, with approximately 5% from foreign countries.
Almost all of Journal Technologies' revenues are from governmental agencies.



Consolidated operating expenses increased by $833,000 (2%) to $36,471,000 from
$35,638,000 for the nine months ended June 30, 2022. Total salaries and employee
benefits increased by $927,000 (4%) to $26,745,000 from $25,818,000 primarily
because of (i) salary adjustments and some Australian payroll tax accruals.
Outside services increased by $676,000 (30%) to $2,912,000 from $2,236,000
mainly because of increased third-party hosting fees which were billed to
clients. Newsprint and printing expenses increased by $60,000 (13%) to $529,000
from $469,000 primarily resulting from newsprint price increases and additional
purchases of printing supplies. Other general and administrative expenses
increased by $938,000 (60%) to $2,492,000 from $1,554,000 mainly because there
were increased miscellaneous office equipment purchases and business travel
expenses as compared to the prior fiscal year period.



The Company's non-operating income, net of expenses, decreased by $190,978,000
to a loss of $38,858,000 from a gain of $152,120,000 in the prior fiscal year
period primarily because of the recordings of (i) net unrealized losses on
marketable securities of $57,075,000 during the nine months ended June 30, 2022
as compared with net unrealized gains of $131,754,000 in the prior year period,
and (ii) realized net gains on sales of marketable securities of $14,249,000
during the nine months ended June 30, 2022 as compared with $18,478,000 in the
prior year period. In addition, there were gains of $272,000 on a partial land
sale associated with the City of Logan's street widening project.



During the nine months ended June 30, 2022, the Company's consolidated pretax
loss was $40,532,000, as compared to pretax income of $154,434,000 in the prior
fiscal year period. There was consolidated net loss of $30,797,000 (-$22.31 per
share) for the nine months ended June 30, 2022, as compared with consolidated
net income of $114,319,000 ($82.80 per share) in the prior fiscal year period.



At June 30, 2022, the aggregate fair market value of the Company's marketable
securities was $341,855,000. These securities had approximately $187,018,000 of
net unrealized gains before taxes of $50,540,000. They generated approximately
$4,251,000 in dividends income during the nine months ended June 30, 2022, as
compared with $2,063,000 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.



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Taxes



For the nine months ended June 30, 2022, the Company recorded an income tax
benefit of $9,735,000 on the pretax loss of $40,532,000.  The income tax benefit
consisted of a tax benefit of $15,425,000 on the unrealized losses on marketable
securities and a benefit of $250,000 for the dividends received deduction and
other permanent book and tax differences, offset by tax provisions of $3,850,000
on the realized gains on marketable securities, $500,000 on income from
operations, and $1,590,000 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, 2022 was 24%, after
including the taxes on the realized gains and unrealized losses on marketable
securities.



For the nine months ended June 30, 2021, the Company recorded a provision for
income taxes of $40,115,000 on pretax income of $154,434,000.  This was the net
result of applying the effective tax rate anticipated for fiscal 2021 to pretax
income before the unrealized and realized gains on marketable securities for the
nine months ended June 30, 2021. The effective rate of 21.32%, which was higher
than the statutory rate of 21% primarily due to state taxes which were offset by
the dividends received deduction, resulted in a tax provision of $896,000 on
pretax income before the unrealized and realized gains on marketable securities.
In addition, the Company recorded a tax provision of $34,405,000 on the
unrealized gains on marketable securities, and a tax provision of $4,821,000 on
the realized gains on marketable securities, both of which were offset by a tax
benefit of $7,000 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, 2021 was 26%, 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 2018 with regard to federal income taxes and
fiscal 2017 for state income taxes.



The traditional business (for the nine-month periods ended June 30, 2022 and 2021)

Pre-tax income from the Traditional Business increased by $1,372,000 at $1,442,000
of $70,000 in the prior year period, primarily resulting from a reduction in additional long-term compensation expense of $25,000 compared to an increase of $1,410,000 in the period of the previous financial year.



During the nine months ended June 30, 2022, the Traditional Business had total
operating revenues of $11,158,000, as compared with $11,071,000 in the prior
fiscal year period. Advertising revenues increased by $30,000 (1%) to $5,679,000
from $5,649,000, primarily because of increased legal notice advertising net
revenues of $122,000 and trustee sale notice advertising net revenues of
$130,000 primarily resulting from the lifting of the foreclosure moratoriums
relative to the "Eviction and Foreclosure Orders" and lenders' processing files
that were already in the pipeline when the pandemic struck. These increases were
offset by decreased government notice advertising net revenues of $149,000 and
commercial advertising net revenues of $73,000.



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 63% during
the nine months ended June 30, 2022 as compared to the prior fiscal year period,
primarily because of the lifting of foreclosure moratoriums, as discussed above.
The Company's smaller newspapers, those other than the Los Angeles and San
Francisco Daily Journals ("The Daily Journals"), accounted for about 87% of the
total public notice advertising revenues during the nine months ended June 30,
2022. Public notice advertising revenues and related advertising and other
service fees, including trustee sales legal advertising revenues, constituted
about 19% of the Company's total operating revenues for the nine months ended
June 30, 2022 and 16% in the prior fiscal year period.



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The Daily Journals accounted for about 92% of the Traditional Business' total
circulation revenues, which declined by $179,000 (5%) to $3,279,000 from
$3,458,000. 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.



The Traditional Business segment operating expenses, excluding the adjustments
to the long-term supplemental compensation accrual, increased by $150,000 (2%)
to $9,741,000 from $9,591,000, primarily resulting from the annual salary
adjustments.



Journal Technologies (for the nine-month periods ended June 30, 2022 and 2021)

In the nine months ended June 30, 2022the Journal Technologies business segment’s pre-tax loss increased by $5,360,000 at $3,116,000 on pre-tax income of
$2,244,000 in the period of the previous financial year.



Revenues decreased by $3,242,000 (12%) to $23,639,000 from $26,881,000 in the
prior fiscal year period. Licensing and maintenance fees decreased by $3,269,000
(19%) to $13,721,000 from $16,990,000 primarily resulting from the reduction in
legacy software products' maintenance and support revenues as the Company ended
effective July 1, 2021 the maintenance of these legacy software products, so as
to focus on supporting the Company's main eSeries products. Consulting fees
increased by $48,000 (1%) to $4,697,000 from $4,649,000. Other public service
fees decreased by $21,000 to $5,221,000 from $5,242,000 primarily due to
decreased traffic citation 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 $2,118,000 (9%) to $26,755,000 from $24,637,000
primarily because of (i) increased personnel costs resulting from the salary
adjustments and some Australian payroll tax accruals, (ii) increased third-party
hosting fees which were billed to clients and (iii) additional miscellaneous
office equipment 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 for the foreseeable future.



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Reportable Segments (for the three-month periods ended June 30, 2022 and 2021)



                        Overall Financial Results (000)

                       For the three months ended June 30



                                   Reportable Segments
                          Traditional                 Journal                   Corporate
                           Business                Technologies            income and expenses                 Total
                       2022         2021         2022         2021          2022          2021          2022          2021
Revenues
Advertising          $  1,989     $  2,195     $    ---     $    ---     $      ---     $     ---     $   1,989     $   2,195
Circulation             1,097        1,126          ---          ---            ---           ---         1,097         1,126
Advertising
service fees and
other                     787          762          ---          ---            ---           ---           787           762
Licensing and
maintenance fees          ---          ---        4,633        5,602            ---           ---         4,633         5,602
Consulting fees           ---          ---        2,267        2,100            ---           ---         2,267         2,100
Other public
service fees              ---          ---        1,779        1,777            ---           ---         1,779         1,777
Total revenues          3,873        4,083        8,679        9,479            ---           ---        12,552        13,562
Operating expenses
Salaries and
employee benefits       2,134        2,081        7,287        6,699            ---           ---         9,421         8,780
Increase to the
long-term
Supplemental
compensation
accrual                 1,985          655          ---          ---            ---           ---         1,985           655
Others                    904          929        2,345        1,874            ---           ---         3,249         2,803
Total operating
expenses                5,023        3,665        9,632        8,573            ---           ---        14,655        12,238
Income (loss) from
operations             (1,150 )        418         (953 )        906            ---           ---        (2,103 )       1,324
Dividends and
interest income           ---          ---          ---          ---          1,263           776         1,263           776
Gains on land sale        ---          ---          ---          ---            272           ---           272           ---
Other income              ---          ---          ---          ---            ---            69           ---            69
Interest expenses
on note payable
collateralized by
real estate and
other                     ---          ---          ---          ---            (12 )         (14 )         (12 )         (14 )
Interest expenses
on margin loans           ---          ---          ---          ---           (281 )         (68 )        (281 )         (68 )
Net unrealized
(losses) gains on
marketable
securities                ---          ---          ---          ---        (12,666 )      55,686       (12,666 )      55,686
Pretax (loss)
income                 (1,150 )        418         (953 )        906        (11,424 )      56,449       (13,527 )      57,773
Income tax benefit
(expense)                 225         (175 )        280         (460 )        3,160       (14,565 )       3,665       (15,200 )
Net (loss) income    $   (925 )   $    243     $   (673 )   $    446     $   (8,264 )   $  41,884     $  (9,862 )   $  42,573
Total assets         $ 22,091     $ 17,894     $ 20,814     $ 21,498     $  341,669     $ 350,108     $ 384,574     $ 389,500
Capital
expenditures         $      4     $    ---     $      7     $    ---     $      ---     $     ---     $      11     $     ---



Comparable three-month periods ended June 30, 2022 and 2021

Consolidated financial comparison



Consolidated revenues were $12,552,000 and $13,562,000 for the three months
ended June 30, 2022 and 2021, respectively. This decrease of $1,010,000 (7%)
resulted primarily from decreases in Journal Technologies' license and
maintenance fees of $969,000, and the Traditional Business' advertising net
revenues of $206,000 and circulation revenues of $29,000, partially offset by
increases in (i) Journal Technologies' consulting fees of $167,000 and public
service fees of $2,000, and (ii) the Traditional Business' advertising service
fees and other of $25,000.



Approximately 69% of the Company's revenues during the three months ended June
30, 2022 were derived from Journal Technologies, as compared with 70% in the
prior fiscal year period.



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Consolidated operating expenses increased by $2,417,000 (20%) to $14,655,000
from $12,238,000 for the three months ended June 30, 2022. Total salaries and
employee benefits increased by $641,000 to $9,421,000 from $8,780,000 primarily
because of the salary adjustments and some Australian payroll tax accruals.
Outside services increased by $280,000 (35%) to $1,074,000 from $794,000 mainly
because of increased third-party hosting fees which were billed to clients.
Newsprint and printing expenses increased by $12,000 (7%) to $174,000 from
$162,000 primarily resulting from newsprint price increases and additional
purchases of printing supplies. Other general and administrative expenses
increased by $306,000 (62%) to $801,000 from $495,000 mainly because there were
increased miscellaneous office equipment purchases and business travel expenses
as compared to the prior fiscal year period.



The Company's non-operating income, net of expenses, decreased by $67,873,000 to
a loss of $11,424,000 from a gain of $56,449,000 in the prior fiscal year period
primarily because of the recording of net unrealized losses on marketable
securities of $12,666,000 during the three months ended June 30, 2022 as
compared with net unrealized gains of $55,686,000 in the prior fiscal year
period. In addition, there were gains of $272,000 on partial land sale
associated with the City of Logan's street widening project.



During the three months ended June 30, 2022, consolidated pretax loss was
$13,527,000, as compared to pretax income of $57,773,000 in the prior fiscal
year period. There was consolidated net loss of $9,862,000 (-$7.15 per share)
for the three months ended June 30, 2022, as compared with consolidated net
income of $42,573,000 ($30.83 per share) in the prior fiscal year period.



The traditional activity (for the three-month periods ended June 30, 2022 and 2021)



The Traditional Business' pretax loss increased by $1,568,000 to $1,150,000 from
pretax income of $418,000 in the prior fiscal year period, primarily resulting
from an increase to the long-term supplemental compensation accrual of
$1,985,000 as compared with an increase of $655,000 in the prior fiscal year
period.


In the three months ended June 30, 2022the traditional business had total operating revenues of $3,873,000compared to $4,083,000 in the period of the previous financial year. Advertising revenue decreased by $206,000 (9%) to
$1,989,000 of $2,195,000primarily due to lower commercial advertising net revenue from $125,000 and government opinion on the net advertising revenue of $123,000. These increases were offset by an increase in net advertising revenue from legal announcements of $38,000 and trustee notice of sale announcing net revenues of $4,000.



The Traditional Business segment operating expenses, excluding the adjustments
to the long-term supplemental compensation accrual, increased by $28,000 (1%) to
$3,038,000 from $3,010,000, primarily resulting from the annual salary
adjustments.



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Journal Technologies (for the three-month periods ended June 30, 2022 and 2021)

In the three months ended June 30, 2022the Journal Technologies business segment’s pre-tax loss increased by $1,859,000 at $953,000 on pre-tax income of
$906,000 in the period of the previous financial year.



Revenues decreased by $800,000 (8%) to $8,679,000 from $9,479,000 in the prior
fiscal year period. Licensing and maintenance fees decreased by $969,000 (17%)
to $4,633,000 from $5,602,000 primarily resulting from the reduction in legacy
software products' maintenance and support revenues. Consulting fees increased
by $167,000 (8%) to $2,267,000 from $2,100,000. Other public service fees
increased slightly by $2,000 to $1,779,000 from $1,777,000.



Operating expenses increased by $1,059,000 (12%) to $9,632,000 from $8,573,000
primarily because of (i) increased personnel costs resulting from the salary
adjustments and some Australian payroll tax accruals, (ii) increased third-party
hosting fees which were billed to clients and (iii) additional miscellaneous
office equipment purchases and increased business travel expenses.



Cash and capital resources



For the nine months ended June 30, 2022, the Company's cash and cash
equivalents, restricted cash, and marketable security positions decreased by
$9,434,000, after the sales of marketable securities of approximately
$80,570,000 and additional net borrowing of $43,000,000 from the margin loan
account, partially offset by the recording of net pretax unrealized losses on
marketable securities of $57,075,000. Cash, cash equivalents, the proceeds from
the sales of marketable securities and additional net borrowing were primarily
used to purchase additional marketable securities of $117,678,000.



The investments in marketable securities, which had an adjusted cost basis of
approximately $154,837,000 and a market value of about $341,855,000 at June 30,
2022, generated approximately $4,251,000 in dividends income during the nine
months ended June 30, 2022. These securities had approximately $187,018,000 of
net unrealized gains before estimated taxes of $50,540,000 which will become due
only when we sell securities in which there is unrealized appreciation.



Cash flows from operating activities decreased by $9,887,000 during the nine
months ended June 30, 2022 as compared to the prior fiscal year period,
primarily due to (i) increases in deferred tax assets of $50,901,000 and the
Company's income tax receivable of $4,551,000, (ii) decreases in the Company's
income tax payable of $6,619,000 and (iii) decreases in net accounts payable and
accrued liabilities of $2,802,000 (because of the timing difference in remitting
efiling fees to the courts). This was partially offset by (i) increases in net
income of $47,942,000, excluding the increases in unrealized losses on
marketable securities of $188,829,000 and decreases in realized net gains on
sales of marketable securities of $4,229,000, (ii) decreases in the Company's
accounts receivable of $2,118,000 mainly resulting from more collections, and
(iii) increases in deferred revenues of $5,143,000.



From June 30, 2022the Company had a working capital of $337,803,000including liabilities for deferred subscriptions, deferred consulting fees and deferred maintenance and other contracts of $20,291,000.



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 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.



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The company is not a smaller version of Berkshire Hathaway Inc. Instead, it hopes to be a major software company while also operating its traditional business.

Significant 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, 2021. The above discussion and
analysis should be read in conjunction with the unaudited consolidated financial
statements and notes thereto included in this report.



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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 variants 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,
2021.

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