Quarterly Report for Quarter Ending July 31, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Cautionary Statement Regarding Forward-Looking Information

In this report, "Value Line," "we," "us," "our" refers to Value Line, Inc. and "the Company" refers to Value Line and its subsidiaries unless the context otherwise requires.

This report contains statements that are predictive in nature, depend upon or refer to future events or conditions (including certain projections and business trends) accompanied by such phrases as "believe", "estimate", "expect", "anticipate", "will", "intend" and other similar or negative expressions, that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995, as amended. Actual results for Value Line, Inc. ("Value Line" or "the Company") may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to the following:

	●	maintaining revenue from subscriptions for the Company's digital and print published products;
	●	changes in investment trends and economic conditions, including global financial issues;
	●	changes in Federal Reserve policies affecting interest rates and liquidity along with resulting effects on equity markets;
	●	stability of the banking system, including the success of U.S. government policies and actions in regard to banks with liquidity or capital issues, along with the associated impact on equity markets;
	●	continuation of orderly markets for equities and corporate and governmental debt securities;
	●	problems protecting intellectual property rights in Company methods and trademarks;
	●	problems protecting confidential information including customer confidential or personal information that we may possess;
	●	dependence on non-voting revenues and non-voting profits interests in EULAV Asset Management ("EAM" or "EAM Trust"), and accordingly on its key management, investment management, key investment managers and sales personnel. EAM Trust is a Delaware statutory trust, which serves as the investment advisor to the Value Line Funds and engages in related distribution, marketing and administrative services;
	●	fluctuations in EAM's and third-party copyright assets under management due to evaluations by outside rating agencies, broadly based changes in the values of equity and debt securities, market sector variations, redemptions by investors and other factors including continuation of employment by key members of its management, investment managers, and sales leadership;
	●	possible changes in the valuation of EAM's intangible assets from time to time;
	●	possible changes in future revenues or collection of receivables from significant customers;
	●	dependence on key executive and specialist personnel of signification supplier and other firms;
	●	risks associated with the outsourcing of certain functions, technical facilities, and operations, including in some instances outside the U.S.;
	●	risks of increased tariffs and other restrictions affecting the cost and availability of materials, equipment, and other necessary inputs to the Company's operations;
	●	competition in the fields of publishing, copyright and investment management, along with associated effects on the level and structure of prices and fees, and the mix of services delivered;
	●	the impact of government regulation on the Company's and EAM's businesses;
	●	federal and/or state legislative changes that might affect Value Line's business;
	●	the availability of free or low cost investment information through discount brokers or generally over the internet;
	●	the economic and other impacts of present and future global political and military conflicts, which could affect investor interest in stock market investing or cause assets under management in EAM to fall or to rise, or affect availability and cost of energy, goods, and services required by the Company and its suppliers;
	●	continued availability of generally dependable energy supplies, transportation facilities, digital data and telephone transmission infrastructure in the geographic areas in which the company and certain suppliers operate;
	●	terrorist attacks, cyber attacks and natural disasters;
	●	the need for changes in our business plans because of unexpected events that occur;
	●	widespread illnesses which may drastically affect markets, employment, and other economic conditions, and may have additional unpredictable impacts on employees, suppliers, customers, and operations;
	●	changes in prices and availability of materials and other inputs and services, such as financial data, freight and postage, required by the Company;
	●	risk of short-term or long-term catastrophic computer problems associated with legacy software systems which could interrupt regular publication schedules;
	●	risk of inadequacy of our insurance coverage to compensate for potential losses;
	●	potential impact of vendors' consolidation;
	●	other risks and uncertainties, including but not limited to the risks described in Part I, Item 1A, "Risk Factors" of the Company's Annual Report on Form 10-K for the year ended April 30, 2026 and in Part II, Item 1A of this Quarterly Report on Form 10-Q for the period ended July 31, 2026; and other risks and uncertainties arising from time to time.

These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors which may involve external factors over which we may have no control could also have material adverse effects on future results. Likewise, changes we make in our plans, objectives, strategies, or intentions, which may occur at any time in our discretion, could also have material favorable or adverse effects on our future results. Except as otherwise required to be disclosed in periodic reports required to be filed by public companies with the SEC pursuant to the SEC's rules, we have no duty to update these statements, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks and uncertainties, current plans, anticipated actions, and future financial conditions and results may differ from those expressed in any forward-looking information contained herein.

Executive Summary of the Business

The Company's core business is producing investment publications and their underlying research and making available certain Value Line copyrights, Value Line trademarks and Value Line Proprietary Ranks and other proprietary information, to third parties under written agreements for use in third-party managed and marketed investment products and for other purposes. Value Line markets under well-known brands including Value Line®, the Value Line logo®, The Value Line Investment Survey®, Smart Research, Smarter Investing™ and The Most Trusted Name in Investment Research®. The name "Value Line" as used to describe the Company, its products, and its subsidiaries, is a registered trademark of the Company. EULAV Asset Management Trust ("EAM") was established to provide the investment management services to the Value Line Funds, institutional and individual accounts and provide distribution, marketing, and administrative services to the Value Line® Mutual Funds ("Value Line Funds") and to provide distribution, marketing, and administrative services to the Value Line Funds.

The Company's target audiences within the investment research field are individual investors, colleges, libraries, and investment management professionals. Individuals come to Value Line for complete research in one package. Institutional licensees consist of corporations, financial professionals, colleges, and municipal libraries. Libraries and universities offer the Company's detailed research to their patrons and students. Investment management professionals use the research and historical information in their day-to-day businesses. The Company has a dedicated department that solicits institutional subscriptions.

Payments received for new and renewal subscriptions and the value of receivables for amounts billed to retail and institutional customers are recorded as unearned revenue until the order is fulfilled. As the orders are fulfilled, the Company recognizes revenue in equal installments over the life of the particular subscription. Accordingly, the subscription fees to be earned by fulfilling subscriptions after the date of a particular balance sheet are shown on that balance sheet as unearned revenue within current and long-term liabilities.

The investment publications and related publications (retail and institutional) and Value Line copyrights and Value Line Proprietary Ranks and other proprietary information consolidate into one segment called Publishing. The Publishing segment constitutes the Company's only reportable business segment.

Asset Management and Mutual Fund Distribution Businesses

Pursuant to the EAM Declaration of Trust, the Company maintains an interest in revenues of EAM and a portion of the residual profits of EAM but has no voting authority with respect to the election or removal of the trustees of EAM or control of its business. Although the Company does not have control over the operating and financial policies of EAM, the Company has a contractual right to receive its share of EAM's revenues and profits.

The business of EAM is managed by its five individual trustees each owning 20% of the voting interest in EAM and by its officers subject to the direction of the trustees. The Company is entitled to receive from EAM a range of 41% to 55% of EAM's revenues (excluding distribution revenues) from EAM's mutual fund and separate account business and 50% of the residual profits of EAM (subject to temporary increase in certain limited circumstances). The Holders of the remaining profits interests will receive the other 50% of residual profits of EAM. Distribution is not less than 90% of EAM's profits payable each fiscal quarter under the provisions of the EAM Trust Agreement.

Business Environment

The U.S. economy turned in a mixed performance during the first half of calendar 2026. After a solid start to the year, with the gross domestic product (GDP) expanding by an estimated annualized rate of 2.1% during the March quarter, output slowed to 1.5% in the June period. In general, resilient consumer spending and robust business investment, primarily focused on the ongoing artificial intelligence (AI) infrastructure buildout, was partially offset by a notable decline in residential construction, a sharp increase in imports (which detracts from the GDP calculation), and a decrease in government spending. Forecasts for real GDP growth this year have since come down, largely reflecting continued worries about inflation, and its impact on the U.S. consumer, along with elevated geopolitical concerns, and the resultant higher energy prices. The consensus GDP estimate now calls for a 1.5% to 2.2% advance, down from the prior expectation of 2.5%-3.1%.

The inflation situation remains a concern for the Federal Reserve. The reacceleration in the pace of price growth this year was evident in the July inflation data, with the Consumer and Producer Price Indexes (on a 12-month basis) increasing 3.4% and 4.7%, respectively. Likewise, the Personal Consumption Expenditures (PCE) Price Index, the assessment of inflation most closely watched by the Fed, rose 3.7% over the 12-month period ended July 31st. These figures remain well above the central bank's target inflation rate of 2.0%. Treasury market yields have risen recently on the inflation worries and concerns about the nation's soaring debt level.

The labor market appears to be less of a worry for the Federal Reserve. The estimated August job creation figure of 162,000 came in nearly triple the consensus forecast, and the prior two-month total included an upward revision of 55,000 jobs. Meanwhile, weekly unemployment claims still remain low and the number of job openings totaled 7.4 million in July. The unemployment rate held steady at 4.1% in August, another positive sign especially with more people reentering the workforce. This was reflected by an increase in the labor force participation rate, to 61.6%.

Meanwhile, Corporate America continues to excel. Profit growth for the S&P 500 companies averaged more than 50% in the second quarter (+30% when excluding the impact of the hefty non-operating gains from Amazon and Alphabet), and indications are that the growth rate remained in the high-20% range in the third quarter, again powered by strong profit gains for the technology companies. The astronomical spending on AI infrastructure (i.e., data center construction and memory and processing chips) is the main catalyst behind the profit gains. That said, the recent increase in oil prices-due to the ongoing war with Iran and its military proxies in the Middle East-and the continued trade uncertainties-including the United States trade war with Canada-may cut into profit growth during in the second half of calendar 2026.

In conclusion: The business environment remains in good shape, despite the continued geopolitical and global trade uncertainty. Spending on AI is providing a major catalyst and should power earnings growth through the end of this year. The strong profit gains are supporting equity valuations, despite building sentiment that the Federal Reserve may soon need to raise the benchmark short-term interest rate to help rein in inflation.

Results of Operations for the Three Ended July 31, 2026 and 2025

The following table illustrates the Company's key components of revenues and expenses.

		Three Months Ended July 31,
($ in thousands, except earnings per share)		2026				2025				Change
Income from operations		$	1,027			$	1,496				-31.4	%
Non-voting revenues and non-voting profits interests from EAM Trust			3,879				5,121				-24.3	%
Income from operations plus non-voting revenues and non-voting profits interests from EAM Trust		$	4,906			$	6,617				-25.9	%
Operating expenses		$	7,024			$	7,110				-1.2	%
Investment gains		$	1,471			$	2,019				-27.1	%
Income before income taxes		$	6,377			$	8,636				-26.2	%
Net income		$	4,655			$	6,460				-27.9	%
Earnings per share		$	0.50			$	0.69				-27.7	%

During the three months ended July 31, 2026, the Company's net income of $4,655,000, or $0.50 per share, was 27.9% below net income of $6,460,000, or $0.69 per share, for the three months ended July 31, 2025. During the three months ended July 31, 2026, the Company's income from operations of $1,027,000 was 31.4% below income from operations of $1,496,000 during the three months ended July 31, 2025. For the three months ended July 31, 2026, operating expenses decreased 1.2% below those during the three months ended July 31, 2025.

During the three months ended July 31, 2026, there were 9,384,249 average common shares outstanding as compared to 9,414,605 average common shares outstanding during the three months ended July 31, 2025.

Total operating revenues

		Three Months Ended July 31,
($ in thousands)		2026				2025				Change
Investment publications:
Print		$	1,957			$	2,214				-11.6	%
Digital			3,817				3,926				-2.8	%
Total investment publications			5,774				6,140				-6.0	%
Copyright fees			2,277				2,466				-7.7	%
Total publishing revenues		$	8,051			$	8,606				-6.4	%

Within investment periodicals and related publications, subscription sales orders are derived from print and digital products. The following chart illustrates the changes in the sales orders associated with print and digital subscriptions.

Sources of subscription sales

		Three Months Ended July 31,
		2026								2025
		Print				Digital				Print				Digital
New Sales			11.1	%			9.8	%			12.7	%			11.6	%
Renewal & Conversion Sales			88.9	%			90.2	%			87.3	%			88.4	%
Total Gross Sales			100.0	%			100.0	%			100.0	%			100.0	%

During the three months ended July 31, 2026, new sales of print publications decreased on a percentage basis as a result of an increase in renewal sales orders from the prior fiscal year. New sales of digital publications decreased.

		As of July 31,				As of April 30,				As of July 31,				Change
($ in thousands)		2026				2026				2025				July-26 vs. Apr-26				July-26 vs. July-25
Unearned subscription revenue (current and long-term liabilities)		$	20,911			$	21,039			$	21,556				-0.6	%			-3.0	%

Unearned subscription revenue as of July 31, 2026, is slightly below April 30, 2026 and 3.0% below July 31, 2025. A certain amount of variation is to be expected due to the volume of new orders and timing of long-term renewal contracts, marketing campaigns and large Institutional Sales orders.

Investment periodicals and related publications revenues

Investment periodicals and related publications revenues of $5,774,000 (excluding copyright fees) during the three months ended July 31, 2026 were 6.0% below publications revenues of $6,140,000 in the prior fiscal year. The Company continued a variety of efforts to attract new subscribers through various marketing channels, primarily direct mail, e-mail, and by the efforts of our sales personnel. As fewer individual investors manage their own portfolios, particularly in volatile markets, total product line circulation at July 31, 2026, was 2.4% below total product line circulation at July 31, 2025.

Total print circulation at July 31, 2026 was 3.2% below the total print circulation at July 31, 2025. During the three months ended July 31, 2026, print publication revenues of $1,957,000 decreased 11.6%, below print publication revenues of $2,214,000 during the corresponding period of 2026. Total digital circulation at July 31, 2026 was 1.5% below total digital circulation at July 31, 2025. During the three months ended July 31, 2026, digital revenues of $3,817,000 were 2.8% lower than the prior fiscal year. These figures reflect solid the ongoing shift from our print services to digital counterparts. Sales of our higher-price, higher-profit, publications have remained strong.

Value Line serves primarily individual and professional investors in stocks, and other securities, who pay mostly on annual or multi-year subscription plans, for basic services or as much as $100,000 or more annually for comprehensive premium quality research, not obtainable elsewhere.

The Value Line Proprietary Ranks (the "Ranking System"), a component of the Company's flagship product, The Value Line Investment Survey, are also utilized in the Company's copyright business. The Ranking System is made available to EAM for specific uses without charge. During the twelve month period ended July 31, 2026, the combined Ranking System "Rank 1 & 2" stocks' price increase of 26.0% compared to the Russell 2000 Index's increase of 32.5% during the comparable period.

Copyright fees

During the three months ended July 31, 2026, copyright fees of $2,277,000 were 7.7% below those during the corresponding period in the prior fiscal year.

Investment management fees and services -(unconsolidated)

The Company receives non-voting revenues interest and non-voting profits interest from EAM, the investment adviser to the Value Line Mutual Funds.

Total assets in the Value Line Funds managed and/or distributed by EAM at July 31, 2026, were $3.40 billion, which is $1.61 billion or 32.2% below total assets of $5.01 billion in the Value Line Funds managed and/or distributed by EAM at July 31, 2025.

Value Line Mutual Funds

		As of July 31,
($ in millions)		2026				2025				Change
Equity and hybrid funds		$	3,396			$	4,974				-31.7	%
Fixed income funds			-				35				-100.0	%
Total EAM managed net assets		$	3,396			$	5,009				-32.2	%

EAM Trust - Results of operations before distribution to interest holders

The gross fees and net income of EAM's investment management operations during the three months ended July 31, 2026, before interest holder distributions, included total investment management fees earned from the Value Line Funds of $6,228,000, 12b-1 fees and other fees of $1,321,000 and other net gains of $144,000. For the same period, there was total investment management fee waivers of $23,000. During the three months ended July 31, 2026, EAM's net income was $1,046,000 after giving effect to Value Line's non-voting revenues interest of $3,356,000, but before distributions to voting profits interest holders and to the Company in respect of its 50% non-voting profits interest.

The gross fees and net income of EAM's investment management operations during the three months ended July 31, 2025, before interest holder distributions, included total investment management fees earned from the Value Line Funds of $8,302,000, 12b-1 fees and other fees of $1,509,000 and other net gains of $204,000. For the same period, total investment management fee waivers were $41,000 and 12b-1 fee waivers were $22,000. During the three months ended July 31, 2025, EAM's net income was $1,266,000 after giving effect to Value Line's non-voting revenues interest of $4,488,000, but before distributions to voting profits interest holders and to the Company in respect of its 50% non-voting profits interest.

As of July 31, 2026, three of the Value Line Funds have investment management fee waivers in place amounting in aggregate to less than 1% of all EAM management fee revenues.

The Value Line equity and hybrid funds' assets represent 100% of total fund assets under management ("AUM") as of July 31, 2026. At July 31, 2026, equity and hybrid AUM decreased by 31.7% compared to last year at July 31, 2025.

EAM - The Company's non-voting revenues and non-voting profits interests

The Company receives non-voting revenues interest and non-voting profits interest from EAM. The Company receives from EAM in an amount ranging from 41% to 55% of EAM's investment management fee revenues from its mutual fund business.

The Company recorded income from its non-voting revenues interest and its non-voting profits interest in EAM as follows:

		Three Months Ended July 31,
($ in thousands)		2026				2025				Change
Non-voting revenues interest		$	3,356			$	4,488				22.0	%
Non-voting profits interest			523				633				12.8	%
		$	3,879			$	5,121				20.7	%

Operating expenses

		Three Months Ended July 31,
($ in thousands)		2026				2025				Change
Advertising and promotion		$	821			$	717				14.5	%
Salaries and employee benefits			3,497				3,616				-3.3	%
Production and distribution			1,460				1,631				-10.5	%
Office and administration			1,246				1,146				8.7	%
Total expenses		$	7,024			$	7,110				-1.2	%

Expenses within the Company are categorized into advertising and promotion, salaries and employee benefits, production and distribution, office and administration. Operating expenses of $7,024,000 during the three months ended July 31, 2026, were slightly below those during the three months ended July 31, 2025.

Advertising and promotion

During the three months ended July 31, 2026, advertising and promotion expenses of $821,000 increased 14.5% as compared to the prior fiscal year primarily due to increase in direct mail campaigns.

Salaries and employee benefits

During the three months ended July 31, 2026, salaries and employee benefits of $3,497,000 decreased 3.3% below the prior fiscal year.

Production and distribution

During the three months ended July 31, 2026, production and distribution expenses of $1,460,000 decreased 10.5% below the prior fiscal year primarily due to decreases in production expenses to support the Company's website and maintenance of the Company's publishing and application software and operating systems.

Office and administration

During the three months ended July 31, 2026, office and administrative expenses of $1,246,000 increased 8.7% above the prior fiscal year, primarily because the Company incurred costs associated with a fulfillment system upgrade, new E-commerce platform, and security and accessibility improvements to our digital services.

Concentration

During the three months ended July 31, 2026, 28.3% of total publishing revenues of $8,051,000 were derived from a single customer.

Investment gains / (losses)

		Three Months Ended July 31,
($ in thousands)		2026				2025				Change
Dividend income		$	244			$	161				51.6	%
Interest income			560				514				8.9	%
Investment gains/(losses) recognized on sale of equity securities during the period			3				2				-50.0	%
Unrealized gains/(losses) recognized on equity securities held at the end of the period			664				1,342				-50.5	%
Total investment gains/(losses)		$	1,471			$	2,019				-27.1	%

During the three months ended July 31, 2026, the Company's total investment gains of $1,471,000 decreased 27.1% below the prior fiscal year, primarily a result of lower unrealized gains on equity securities. Proceeds from the sales of equity securities during the three months ended July 31, 2026 and July 31, 2025 were $45,000 and $215,000, respectively.

Effective income tax rate

The overall effective income tax rates, as a percentage of pre-tax ordinary income for the three months ended July 31, 2026 and July 30, 2025 were 27.00% and 25.20%, respectively. The increase in the effective tax rate during for the three months ended July 31, 2026 as compared to July 31, 2025, is primarily a result of an increase in the state and local tax rate from 4.39% to 6.40%, primarily in a single jurisdiction that has changed from a market based approach to a cost of production approach affecting EAM's allocation of taxable income for the combined companies to that jurisdiction. The Company's annualized overall effective tax rate fluctuates due to a number of factors, in addition to changes in tax law, including but not limited to an increase or decrease in the ratio of items that do not have tax consequences to pre-income tax, the Company's geographic profit mix between tax jurisdictions, taxation method adopted by each locality, changes in tax rates, new interpretations of existing tax laws and rulings and settlements with tax authorities.

Lease Commitments

On November 30, 2016, Value Line, Inc., received consent from the landlord at 551 Fifth Avenue, New York, NY to the terms of a new sublease agreement for the Company's new corporate headquarters between Value Line, Inc. and ABM Industries, Incorporated ("ABM" or the "Sublandlord") commencing on December 1, 2016. Pursuant to the agreement Value Line leased from ABM 24,726 square feet of office space located on the second and third floors at 551 Fifth Avenue, New York, NY ("Building" or "Premises") beginning on December 1, 2016 and ending on November 29, 2027. Base rent under the sublease agreement is $1,126,000 per annum during the first year with an annual increase in base rent of 2.25% scheduled for each subsequent year, payable in equal monthly installments on the first day of each month, subject to customary concessions in the Company's favor and pass-through of certain increases in utility costs and real estate taxes over the base year. The Company is required to pay for certain operating expenses associated with the Premises as well as utilities supplied to the Premises.

Liquidity and Capital Resources

The Company had working capital, defined as current assets less current liabilities, of $68,326,000 as of July 31, 2026 and $66,389,000 as of April 30, 2026. These amounts include short-term unearned revenue of $14,355,000 and $14,742,000 reflected in total current liabilities at July 31, 2026 and April 30, 2026, respectively. Cash and short-term securities were $88,458,000 and $86,466,000 as of July 31, 2026 and April 30, 2026, respectively.

The Company's cash and cash equivalents include $15,085,000 and $23,733,000 at July 31, 2026 and April 30, 2026, respectively, invested primarily in commercial banks and Money Market Funds at brokers, which operate under Rule 2a-7 of the 1940 Act and invest primarily in short-term U.S. government securities and in commercial banks.

Cash from operating activities

The Company had cash inflows from operating activities of $4,705,000 during the three months ended July 31, 2026, compared to cash inflows of $5,560,000 during the three months ended July 31, 2025. The decrease in cash flows from operations from fiscal 2026 to fiscal 2027 is primarily attributable to the decline in publishing revenues, primarily print publication.

Cash from investing activities

The Company had cash outflows from investing activities of $9,484,000 during the three months ended July 31, 2026, compared to cash outflows from investing activities of $2,811,000 for the three months ended July 31, 2025, respectively. The increase in cash outflows from investing activities for the three months ended July 31, 2026 compared to last year was a result of a increase in investment in equity securities.

Cash from financing activities

During the three months ended July 31, 2026, the Company's cash outflows from financing activities were $3,385,000, compared to cash outflows from financing activities of $3,118,000 for the three months ended July 31, 2025. Quarterly dividend payments of $0.35 per share during fiscal year 2027 aggregated $3,285,000. Quarterly regular dividend payments of $0.325 per share during fiscal year 2026 aggregated $3,059,000.

At July 31, 2026 there were 9,384,249 common shares outstanding as compared to 9,414,605 common shares outstanding at July 31, 2025. The Company expects financing activities to continue to include use of cash for dividend payments for the foreseeable future.

Debt and Liquid Assets

Management believes that the Company's cash and other liquid asset resources used in its business together with future cash flows from operations and from the Company's non-voting revenues and non-voting profits interests from EAM will be sufficient to finance current and forecasted liquidity needs for the next twelve months and beyond. Management does not anticipate making any borrowings during the next twelve months. As of July 31, 2026, retained earnings and liquid assets were $123,949,000 and $88,458,000, respectively. As of April 30, 2026, retained earnings and liquid assets were $122,578,000 and $86,466,000, respectively. There are no off-balance-sheet arrangements, so none affect the interpretations of reported assets, liquidity, and debt.

Seasonality

Our publishing revenues are comprised of subscriptions which are generally annual subscriptions. Our cash flows from operating activities are minimally seasonal in nature, primarily due to the timing of customer payments made for orders and subscription renewals.

Recent Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update 2023-07, "Improvements to Reportable Segment Disclosures" ("ASU 2023-07"), which requires disclosures of significant expenses by segment and interim disclosure of items that were previously required on an annual basis. ASU 2023-07 is to be applied on a retrospective basis and is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. We adopted ASU 2023-07 with such disclosures included in Note 16 to our Consolidated Financial Statements.

In December 2023, the FASB issued Accounting Standards Update 2023-09, "Improvements to Income Tax Disclosures" ("ASU 2023-09"), which provides for additional disclosures primarily related to the income tax rate reconciliations and income taxes paid. ASU 2023-09 requires entities to annually disclose the income tax rate reconciliation using both amounts and percentages, considering several categories of reconciling items, including state and local income taxes, foreign tax effects, tax credits and nontaxable or nondeductible items, among others. Disclosure of the reconciling items is subject to a quantitative threshold and disaggregation by nature and jurisdiction. ASU 2023-09 also requires entities to disclose net income taxes paid(net of refunds received) to federal, state and foreign jurisdictions, as well as by individual jurisdiction, subject to a five percent quantitative threshold. ASU 2023-09 may be adopted on a prospective or retrospective basis and is effective for fiscal years beginning after December 15, 2024 with early adoption permitted. We adopted ASU 2023-09 with such disclosures included in Note 8 to our Consolidated Financial Statements.

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, Income Statement-Reporting Comprehensive Income- Expense Disaggregation Disclosures, requiring all public business entities to provide additional disclosure of the nature of expenses included in the income statement. This ASU is effective for fiscal years beginning after December 15, 2026, and for interim reporting periods beginning after December 15, 2027, on a prospective basis, with early adoption permitted. We are evaluating the impact on our financial statement disclosures.

In September 2025, the FASB issued ASU No. 2025-06: Targeted Improvements to the Accounting for Internal-Use Software (ASU No. 2025-06) to clarify and modernize the recognition and disclosure framework for internal-use software costs. This standard removes all references to software development project stages and requires capitalization to begin once (1) management commits funding and (2) completion and intended use are probable, considering whether significant development uncertainties have been resolved. This standard is effective for fiscal years beginning after December 15, 2027, and for interim periods within those annual reporting periods. Early adoption is permitted. We are currently evaluating the impact on our financial statement disclosures.

Critical Accounting Estimates and Policies

The Company prepares its Consolidated Financial Statements in accordance with Generally Accepted Accounting Principles as in effect in the United States (U.S. "GAAP"). The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent, and the Company evaluates its estimates on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions.

The Company's critical accounting policy relates to the valuation of EAM. There have been no material changes in our critical accounting policies during the three months ended July 31, 2026. For a complete discussion of our critical accounting policies, refer to "Critical Accounting Policies and Estimates" discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the Company's Annual Report on Form 10-K for fiscal year ended April 30, 2026.

Contractual Obligations

We are a party to a lease contract which will result in cash payments to a lessor in future periods. Operating lease liabilities are included in our Consolidated Balance Sheets. Estimated payments of these liabilities in each of the next two fiscal are (in thousands): $1,124 in 2027 and $882 in 2028 totaling $2,006.