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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2022

or

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________________________________ to __________________________________

Commission File Number: 0-11306

VALUE LINE, INC.

(Exact name of registrant as specified in its charter)

New York |  | 13-3139843
(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

551 Fifth Avenue, New York, New York |  | 10176-0001
(Address of principal executive offices) |  | (Zip Code)

(212) 907-1500

(Registrant's telephone number, including area code)

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

Title of each class | Trading symbol | Name of each Exchange on which registered
Common stock, $0.10 par value per share | VALU | The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒

Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class | Outstanding at March 7, 2022 |
Common stock, $0.10 par value per share | 9,522,163 shares |

VALUE LINE, INC.

TABLE OF CONTENTS

|  | Page No.
| PART I. FINANCIAL INFORMATION |
Item 1. | Consolidated Condensed Financial Statements |
| Consolidated Condensed Balance Sheets as of January 31, 2022 and April 30, 2021 | 3
| Consolidated Condensed Statements of Income for the three and nine months ended January 31, 2022 and January 31, 2021 | 4
| Consolidated Condensed Statements of Comprehensive Income for the three and nine months ended January 31, 2022 and January 31, 2021 | 5
| Consolidated Condensed Statements of Cash Flows for the nine months ended January 31, 2022 and January 31, 2021 | 6
| Consolidated Condensed Statement of Changes in Shareholders’ Equity for the three months ended January 31, 2022 | 7
| Consolidated Condensed Statement of Changes in Shareholders’ Equity for the three months ended January 31, 2021 | 7
| Consolidated Condensed Statement of Changes in Shareholders’ Equity for the nine months ended January 31, 2022 | 8
| Consolidated Condensed Statement of Changes in Shareholders’ Equity for the nine months ended January 31, 2021 | 8
| Notes to Consolidated Condensed Financial Statements | 9
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 19
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 30
Item 4. | Controls and Procedures | 32
| PART II. OTHER INFORMATION |
Item 1. | Legal Proceedings | 32
Item 1A. | Risk Factors | 32
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 33
Item 4. | Mine Safety Disclosures | 33
Item 5. | Other Information | 33
Item 6. | Exhibits | 34
| Signatures | 35

Part I - Financial Information

Item 1. Financial Statements

Value Line, Inc.

Consolidated Condensed Balance Sheets

(in thousands, except share amounts)

|  | January 31, |  |  | April 30, |
|  | 2022 |  |  | 2021 |
|  | (unaudited) |  |  |  |  |
Assets |  |  |  |  |  |  |  |
Current Assets: |  |  |  |  |  |  |  |
Cash and cash equivalents (including short term investments of $29,081 and $18,209, respectively) |  | $ | 29,909 |  |  | $ | 19,171 |
Equity securities |  |  | 27,316 |  |  |  | 23,582 |
Available-for-sale Fixed Income securities |  |  | 597 |  |  |  | 2,600 |
Accounts receivable, net of allowance for doubtful accounts of $39 and $36, respectively |  |  | 1,802 |  |  |  | 3,985 |
Prepaid and refundable income taxes |  |  | 463 |  |  |  | 616 |
Prepaid expenses and other current assets |  |  | 1,027 |  |  |  | 1,282 |
Total current assets |  |  | 61,114 |  |  |  | 51,236 |
Long term assets: |  |  |  |  |  |  |  |
Investment in EAM Trust |  |  | 60,882 |  |  |  | 60,977 |
Restricted money market investments |  |  | 305 |  |  |  | 469 |
Property and equipment, net |  |  | 7,367 |  |  |  | 8,311 |
Capitalized software and other intangible assets, net |  |  | 84 |  |  |  | 143 |
Total long term assets |  |  | 68,638 |  |  |  | 69,900 |
Total assets |  | $ | 129,752 |  |  | $ | 121,136 |
Liabilities and Shareholders' Equity |  |  |  |  |  |  |  |
Current Liabilities: |  |  |  |  |  |  |  |
Accounts payable and accrued liabilities |  | $ | 1,299 |  |  | $ | 2,077 |
Accrued salaries |  |  | 1,108 |  |  |  | 1,163 |
Dividends payable |  |  | 2,098 |  |  |  | 2,104 |
Accrued taxes on income |  |  | 1,798 |  |  |  | - |
Payable to clearing broker |  |  | 190 |  |  |  | - |
Loan obligation-short term |  |  | - |  |  |  | 2,331 |
Operating lease obligation-short term |  |  | 1,214 |  |  |  | 1,087 |
Unearned revenue |  |  | 17,392 |  |  |  | 19,162 |
Total current liabilities |  |  | 25,099 |  |  |  | 27,924 |
Long term liabilities: |  |  |  |  |  |  |  |
Unearned revenue |  |  | 5,756 |  |  |  | 5,926 |
Operating lease obligation-long term |  |  | 6,449 |  |  |  | 7,368 |
Deferred income taxes |  |  | 13,047 |  |  |  | 12,905 |
Total long term liabilities |  |  | 25,252 |  |  |  | 26,199 |
Total liabilities |  |  | 50,351 |  |  |  | 54,123 |
Shareholders' Equity: |  |  |  |  |  |  |  |
Common stock, $0.10 par value; authorized 30,000,000 shares; issued 10,000,000 shares |  |  | 1,000 |  |  |  | 1,000 |
Additional paid-in capital |  |  | 991 |  |  |  | 991 |
Retained earnings |  |  | 86,216 |  |  |  | 72,502 |
Treasury stock, at cost (470,837 shares and 436,830 shares, respectively) |  |  | (8,805 | ) |  |  | (7,483 | )
Accumulated other comprehensive income, net of tax |  |  | (1 | ) |  |  | 3 |
Total shareholders' equity |  |  | 79,401 |  |  |  | 67,013 |
Total liabilities and shareholders' equity |  | $ | 129,752 |  |  | $ | 121,136 |

The accompanying notes are an integral part of these consolidated condensed financial statements.

3

Part I - Financial Information

Item 1. Financial Statements

Value Line, Inc.

Consolidated Condensed Statements of Income

(in thousands, except share & per share amounts)

(unaudited)

|  | For the Three Months Ended January 31, |  |  | For the Nine Months Ended January 31, |
|  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment periodicals and related publications |  | $ | 6,779 |  |  | $ | 6,830 |  |  | $ | 20,361 |  |  | $ | 20,823 |
Copyright fees |  |  | 3,479 |  |  |  | 3,300 |  |  |  | 10,036 |  |  |  | 9,845 |
Total publishing revenues |  |  | 10,258 |  |  |  | 10,130 |  |  |  | 30,397 |  |  |  | 30,668 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Advertising and promotion |  |  | 722 |  |  |  | 837 |  |  |  | 2,445 |  |  |  | 2,709 |
Salaries and employee benefits |  |  | 4,285 |  |  |  | 4,716 |  |  |  | 13,245 |  |  |  | 13,778 |
Production and distribution |  |  | 1,269 |  |  |  | 1,189 |  |  |  | 3,796 |  |  |  | 3,854 |
Office and administration |  |  | 1,107 |  |  |  | 1,105 |  |  |  | 3,034 |  |  |  | 3,630 |
Total expenses |  |  | 7,383 |  |  |  | 7,847 |  |  |  | 22,520 |  |  |  | 23,971 |
Income from operations |  |  | 2,875 |  |  |  | 2,283 |  |  |  | 7,877 |  |  |  | 6,697 |
Gain on forgiveness of PPP loan (see note 16) |  |  | - |  |  |  | - |  |  |  | 2,331 |  |  |  | - |
Revenues and profits interests in EAM Trust |  |  | 4,655 |  |  |  | 4,734 |  |  |  | 14,352 |  |  |  | 12,592 |
Investment gains |  |  | (3 | ) |  |  | 1,785 |  |  |  | 759 |  |  |  | 3,093 |
Income before income taxes |  |  | 7,527 |  |  |  | 8,802 |  |  |  | 25,319 |  |  |  | 22,382 |
Income tax provision |  |  | 1,913 |  |  |  | 1,767 |  |  |  | 5,304 |  |  |  | 5,154 |
Net income |  | $ | 5,614 |  |  | $ | 7,035 |  |  | $ | 20,015 |  |  | $ | 17,228 |
Earnings per share, basic & fully diluted |  | $ | 0.59 |  |  | $ | 0.73 |  |  | $ | 2.10 |  |  | $ | 1.79 |
Weighted average number of common shares |  |  | 9,539,588 |  |  |  | 9,589,093 |  |  |  | 9,551,418 |  |  |  | 9,604,869 |

The accompanying notes are an integral part of these consolidated condensed financial statements.

4

Part I - Financial Information

Item 1. Financial Statements

Value Line, Inc.

Consolidated Condensed Statements of Comprehensive Income

(in thousands)

(unaudited)

|  | For the Three Months Ended January 31, |  |  | For the Nine Months Ended January 31, |
|  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Net income |  | $ | 5,614 |  |  | $ | 7,035 |  |  | $ | 20,015 |  |  | $ | 17,228 |
Other comprehensive income/(loss), net of tax: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Change in unrealized gains/(losses) on fixed income securities, net of taxes |  |  | - |  |  |  | (59 | ) |  |  | (4 | ) |  |  | (105 | )
Other comprehensive income/(loss) |  |  | - |  |  |  | (59 | ) |  |  | (4 | ) |  |  | (105 | )
Comprehensive income |  | $ | 5,614 |  |  | $ | 6,976 |  |  | $ | 20,011 |  |  | $ | 17,123 |

The accompanying notes are an integral part of these consolidated condensed financial statements.

5

Part I - Financial Information

Item 1. Financial Statements

Value Line, Inc.

Consolidated Condensed Statements of Cash Flows

(in thousands)

(unaudited)

|  | For the Nine Months Ended January 31, |
|  | 2022 |  |  | 2021 |
Cash flows from operating activities: |  |  |  |  |  |  |  |
Net income |  | $ | 20,015 |  |  | $ | 17,228 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 1,003 |  |  |  | 963 |
Investment (gains)/losses |  |  | (122 | ) |  |  | (2,550 | )
Non-voting revenues interest in EAM Trust |  |  | (12,532 | ) |  |  | (11,113 | )
Non-voting profits interest in EAM Trust |  |  | (1,820 | ) |  |  | (1,479 | )
Distributions received from EAM Trust |  |  | 14,447 |  |  |  | 10,838 |
Gain on forgiveness of PPP loan (see note 16) |  |  | (2,331 | ) |  |  | - |
Deferred income taxes |  |  | (446 | ) |  |  | 160 |
Deferred rent obligation |  |  | (792 | ) |  |  | (713 | )
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |
Unearned revenue |  |  | (1,940 | ) |  |  | (1,287 | )
Accounts payable & accrued expenses |  |  | (778 | ) |  |  | (164 | )
Accrued salaries |  |  | (55 | ) |  |  | (201 | )
Accrued taxes on income |  |  | 2,387 |  |  |  | (1,352 | )
Prepaid and refundable income taxes |  |  | 153 |  |  |  | - |
Prepaid expenses and other current assets |  |  | 255 |  |  |  | 110 |
Accounts receivable |  |  | 2,183 |  |  |  | (85 | )
Total adjustments |  |  | (388 | ) |  |  | (6,873 | )
Net cash provided by operating activities |  |  | 19,627 |  |  |  | 10,355 |
Cash flows from investing activities: |  |  |  |  |  |  |  |
Purchases of equity securities |  |  | (4,814 | ) |  |  | (8,524 | )
Purchases of fixed income securities classified as available for sale |  |  | (498 | ) |  |  | (2,497 | )
Proceeds from sales of equity securities |  |  | 1,202 |  |  |  | 7,684 |
Proceeds from sales of fixed income securities classified as available for sale |  |  | 2,496 |  |  |  | 11,431 |
Acquisition of property and equipment |  |  | - |  |  |  | (26 | )
Expenditures for capitalized software |  |  | - |  |  |  | (114 | )
Net cash provided by/(used in) investing activities |  |  | (1,614 | ) |  |  | 7,954 |
Cash flows from financing activities: |  |  |  |  |  |  |  |
Purchase of treasury stock at cost |  |  | (1,322 | ) |  |  | (1,045 | )
Receivable from clearing broker |  |  | - |  |  |  | 608 |
Payable to clearing broker |  |  | 190 |  |  |  | (588 | )
Dividends paid |  |  | (6,307 | ) |  |  | (6,056 | )
Net cash used in financing activities |  |  | (7,439 | ) |  |  | (7,081 | )
Net change in cash and cash equivalents |  |  | 10,574 |  |  |  | 11,228 |
Cash, cash equivalents and restricted cash at beginning of period |  |  | 19,640 |  |  |  | 5,423 |
Cash, cash equivalents and restricted cash at end of period |  | $ | 30,214 |  |  | $ | 16,651 |

The accompanying notes are an integral part of these consolidated condensed financial statements.

6

Part I - Financial Information

Item 1. Financial Statements

Value Line, Inc.

Consolidated Condensed Statement of Changes in Shareholders' Equity

For the Three Months Ended January 31, 2022

(in thousands, except share amounts)

(unaudited)

|  | Common stock |  |  | Additional paid-in- |  |  | Treasury stock |  |  | Retained |  |  | Accumulated other comprehensive |  |  |  |  |
|  | Shares |  |  | Amount |  |  | capital |  |  | Shares |  |  | Amount |  |  | earnings |  |  | income |  |  | Total |
Balance at October 31, 2021 |  |  | 10,000,000 |  |  | $ | 1,000 |  |  | $ | 991 |  |  |  | (453,419 | ) |  | $ | (8,000 | ) |  | $ | 82,700 |  |  | $ | (1 | ) |  | $ | 76,690 |
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 5,614 |  |  |  |  |  |  |  | 5,614 |
Change in unrealized gains on Fixed Income securities, net of taxes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | - |  |  |  | - |
Purchase of treasury stock |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (17,418 | ) |  |  | (805 | ) |  |  |  |  |  |  |  |  |  |  | (805 | )
Dividends declared |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (2,098 | ) |  |  |  |  |  |  | (2,098 | )
Balance at January 31, 2022 |  |  | 10,000,000 |  |  | $ | 1,000 |  |  | $ | 991 |  |  |  | (470,837 | ) |  | $ | (8,805 | ) |  | $ | 86,216 |  |  | $ | (1 | ) |  | $ | 79,401 |

Dividends declared per common share were $0.22 for the three months ending January 31, 2022.

Part I - Financial Information

Item 1. Financial Statements

Value Line, Inc.

Consolidated Condensed Statement of Changes in Shareholders' Equity

For the Three Months Ended January 31, 2021

(in thousands, except share amounts)

(unaudited)

|  | Common stock |  |  | Additional paid-in- |  |  | Treasury stock |  |  | Retained |  |  | Accumulated other comprehensive |  |  |  |  |
|  | Shares |  |  | Amount |  |  | capital |  |  | Shares |  |  | Amount |  |  | earnings |  |  | income |  |  | Total |
Balance at October 31, 2020 |  |  | 10,000,000 |  |  | $ | 1,000 |  |  | $ | 991 |  |  |  | (398,949 | ) |  | $ | (6,379 | ) |  | $ | 63,531 |  |  | $ | 85 |  |  | $ | 59,228 |
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 7,035 |  |  |  |  |  |  |  | 7,035 |
Change in unrealized gains on Fixed Income securities, net of taxes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (59 | ) |  |  | (59 | )
Purchase of treasury stock |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (21,411 | ) |  |  | (623 | ) |  |  |  |  |  |  |  |  |  |  | (623 | )
Dividends declared |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (2,012 | ) |  |  |  |  |  |  | (2,012 | )
Balance at January 31, 2021 |  |  | 10,000,000 |  |  | $ | 1,000 |  |  | $ | 991 |  |  |  | (420,360 | ) |  | $ | (7,002 | ) |  | $ | 68,554 |  |  | $ | 26 |  |  | $ | 63,569 |

Dividends declared per common share were $0.21 for the three months ending January 31, 2021.

The accompanying notes are an integral part of these consolidated condensed financial statements.

7

Part I - Financial Information

Item 1. Financial Statements

Value Line, Inc.

Consolidated Condensed Statement of Changes in Shareholders' Equity

For the Nine Months Ended January 31, 2022

(in thousands, except share amounts)

(unaudited)

|  | Common stock |  |  | Additional paid-in- |  |  | Treasury stock |  |  | Retained |  |  | Accumulated other comprehensive |  |  |  |  |
|  | Shares |  |  | Amount |  |  | capital |  |  | Shares |  |  | Amount |  |  | earnings |  |  | income |  |  | Total |
Balance at April 30, 2021 |  |  | 10,000,000 |  |  | $ | 1,000 |  |  | $ | 991 |  |  |  | (436,830 | ) |  | $ | (7,483 | ) |  | $ | 72,502 |  |  | $ | 3 |  |  | $ | 67,013 |
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 20,015 |  |  |  |  |  |  |  | 20,015 |
Change in unrealized gains on Fixed Income securities, net of taxes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (4 | ) |  |  | (4 | )
Purchase of treasury stock |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (34,007 | ) |  |  | (1,322 | ) |  |  |  |  |  |  |  |  |  |  | (1,322 | )
Dividends declared |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (6,301 | ) |  |  |  |  |  |  | (6,301 | )
Balance at January 31, 2022 |  |  | 10,000,000 |  |  | $ | 1,000 |  |  | $ | 991 |  |  |  | (470,837 | ) |  | $ | (8,805 | ) |  | $ | 86,216 |  |  | $ | (1 | ) |  | $ | 79,401 |

Dividends declared per common share were $0.66 for the nine months ending January 31, 2022.

Part I - Financial Information

Item 1. Financial Statements

Value Line, Inc.

Consolidated Condensed Statement of Changes in Shareholders' Equity

For the Nine Months Ended January 31, 2021

(in thousands, except share amounts)

(unaudited)

|  | Common stock |  |  | Additional paid-in- |  |  | Treasury stock |  |  | Retained |  |  | Accumulated other comprehensive |  |  |  |  |
|  | Shares |  |  | Amount |  |  | capital |  |  | Shares |  |  | Amount |  |  | earnings |  |  | income |  |  | Total |
Balance at April 30, 2020 |  |  | 10,000,000 |  |  | $ | 1,000 |  |  | $ | 991 |  |  |  | (383,279 | ) |  | $ | (5,957 | ) |  | $ | 57,374 |  |  | $ | 131 |  |  | $ | 53,539 |
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 17,228 |  |  |  |  |  |  |  | 17,228 |
Change in unrealized gains on Fixed Income securities, net of taxes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (105 | ) |  |  | (105 | )
Purchase of treasury stock |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (37,081 | ) |  |  | (1,045 | ) |  |  |  |  |  |  |  |  |  |  | (1,045 | )
Dividends declared |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (6,048 | ) |  |  |  |  |  |  | (6,048 | )
Balance at January 31, 2021 |  |  | 10,000,000 |  |  | $ | 1,000 |  |  | $ | 991 |  |  |  | (420,360 | ) |  | $ | (7,002 | ) |  | $ | 68,554 |  |  | $ | 26 |  |  | $ | 63,569 |

Dividends declared per common share were $0.63 for the nine months ending January 31, 2021.

The accompanying notes are an integral part of these consolidated condensed financial statements.

8

Value Line, Inc.

Notes to Consolidated Condensed Financial Statements

January 31, 2022

(Unaudited)

Note 1 - Organization and Summary of Significant Accounting Policies:

Value Line, Inc. ("Value Line" or "VLI", and collectively with its subsidiaries, the “Company”) is incorporated in the State of New York. The name "Value Line" as used to describe the Company, its products, and its subsidiaries, is a registered trademark of the Company. The Company's core business is producing investment periodicals 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. The Company maintains a significant investment in Eulav Asset Management LLC ("EAM") from which it receives a non-voting revenues interest and a non-voting profits interest. Pursuant to the EAM Declaration of Trust dated as of December 23, 2010 (the "EAM Trust Agreement"), VLI granted EAM the right to use the Value Line name for all existing Value Line Funds and agreed to supply, without charge or expense, the Value Line Proprietary Ranking System information to EAM for use in managing the Value Line Funds. EAM was established to provide investment management services to the Value Line Mutual Funds ("Value Line Funds" or the "Funds").

The Consolidated Condensed Balance Sheets as of January 31, 2022 and April 30, 2021, which have been derived from the unaudited interim Consolidated Condensed Financial Statements and the audited Consolidated Financial Statements, respectively, were prepared following the interim reporting requirements of the Securities and Exchange Commission (“SEC”). In the opinion of management, the accompanying Unaudited Interim Consolidated Condensed Financial Statements contain all adjustments (consisting of normal recurring accruals except as noted below) considered necessary for a fair presentation. This report should be read in conjunction with the audited financial statements and footnotes contained in the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 2021 filed with the SEC on July 29, 2021 (the “Form 10-K”). Results of operations covered by this report may not be indicative of the results of operations for the entire year.

Use of Estimates:

The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates.

Principles of Consolidation:

The Company follows the guidance in the Financial Accounting Standards Board's ("FASB") Topic 810 “Consolidation” to determine if it should consolidate its investment in a variable interest entity ("VIE"). A VIE is a legal entity in which either (i) equity investors do not have sufficient equity investment at risk to enable the entity to finance its activities independently or (ii) the equity holders at risk lack the obligation to absorb losses, the right to receive residual returns or the right to make decisions about the entity’s activities that most significantly affect the entity's economic performance. A holder of a variable interest in a VIE is required to consolidate the entity if it is determined that it has a controlling financial interest in the VIE and is therefore the primary beneficiary. The determination of a controlling financial interest in a VIE is based on a qualitative assessment to identify the variable interest holder, if any, that has (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (ii) either the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The accounting guidance requires the Company to perform an ongoing assessment of whether the Company is the primary beneficiary of a VIE and the Company has determined it is not the primary beneficiary of a VIE (see Note 3).

In accordance with FASB's Topic 810, the assets, liabilities, and results of operations of subsidiaries in which the Company has a controlling interest have been consolidated. All significant intercompany accounts and transactions have been eliminated in consolidation. The Company holds a significant non-voting revenues interest (excluding distribution revenues) and a significant non-voting profits interest in EULAV Asset Management, a Delaware statutory trust (“EAM” or “EAM Trust”). The Company relied on the guidance in FASB's ASC Topics 323 and 810 in its determination not to consolidate its investment in EAM and to account for such investment under the equity method of accounting. The Company reports the amount it receives for its non-voting revenues and non-voting profits interests as a separate line item below operating income in the Consolidated Condensed Statements of Income.

Revenue Recognition:

Depending upon the product, subscription fulfillment for Value Line periodicals and related publications is available in print or digitally, via internet access. The length of a subscription varies by product and offer received by the subscriber. Generally, subscriptions are offered as annual subscriptions. Subscription revenues, net of discounts, are recognized ratably on a straight line basis when the product is served to the client over the life of the subscription. Accordingly, the amount of subscription fees to be earned by fulfilling subscriptions after the date of the balance sheets are shown as unearned revenue within current and long-term liabilities.

Copyright fees are derived from providing certain Value Line trademarks and the Value Line Proprietary Ranks to third parties under written agreements for use in selecting securities for third party marketed products, including unit investment trusts, annuities and exchange traded funds ("ETFs"). The Company earns asset-based copyright fees upon delivery of the product to the customer as specified in the individual agreements. Revenue is recognized monthly and received either quarterly or in advance over the term of the agreement and, because it is asset-based, will fluctuate as the market value of the underlying portfolio increases or decreases in value.

Investment in Unconsolidated Entities:

The Company accounts for its investment in its unconsolidated entity, EAM, using the equity method of accounting in accordance with FASB’s ASC 323. The equity method is an appropriate means of recognizing increases or decreases measured by GAAP in the economic resources underlying the investments. Under the equity method, an investor recognizes its share of the earnings or losses of an investee in the periods for which they are reported by the investee in its financial statements rather than in the period in which an investee declares a dividend or distribution. An investor adjusts the carrying amount of an investment for its share of the earnings or losses recognized by the investee.

9

Value Line, Inc.

Notes to Consolidated Condensed Financial Statements

January 31, 2022

(Unaudited)

The Company’s “interests” in EAM, the investment adviser to and the sole member of the distributor of the Value Line Funds, consist of a "non-voting revenues interest" and a "non-voting profits interest" in EAM as defined in the EAM Trust Agreement. The non-voting revenues interest entitles the Company to receive a range of 41% to 55% of EAM’s adjusted gross revenues, excluding EULAV Securities' distribution revenues (“Revenues Interest”). The non-voting profits interest entitles the Company to receive 50% of EAM's profits, subject to certain limited adjustments as defined in the EAM Trust Agreement (“Profits Interest”). The Revenues Interest and at least 90% of the Profits Interest are to be distributed each quarter to all interest holders of EAM, including Value Line. The Company's Revenues Interest in EAM excludes participation in the service and distribution fees of EAM's subsidiary EULAV Securities. The Company reflects its non-voting revenues and non-voting profits interests in EAM as non-operating income under the equity method of accounting. Although the Company does not have control over the operating and financial policies of EAM, pursuant to the EAM Trust Agreement, the Company has a contractual right to receive its share of EAM's revenues and profits.

Valuation of Securities:

The Company's securities classified as cash equivalents, equity securities and available-for-sale fixed income securities consist of shares of money market funds that invest primarily in short-term U.S. Government securities and investments in equities including ETFs and are valued in accordance with the requirements of the Fair Value Measurements Topic of the FASB's ASC 820. The securities classified as equity securities reflected in the Consolidated Condensed Balance Sheets are valued at market and unrealized gains and losses are recorded in the Consolidated Condensed Statements of Income per FASB Accounting Standards Update No. 2016-01 ("ASU 2016-01"). The securities classified as available-for-sale fixed income securities reflected in the Consolidated Condensed Balance Sheets are valued at market and unrealized gains and losses, net of applicable taxes, are reported as a separate component of shareholders' equity. Investment gains and losses on sales of the equity securities are the difference between proceeds from sales and the fair value of the equity securities sold at the beginning of the period or the purchase date, if later. Investment gains and losses on sales of the available-for-sale fixed income securities are the difference between proceeds from sales and the cost of the securities. Investment gains and losses on sales of the securities are recorded in earnings as of the trade date and are determined on the identified cost method.

The Company classifies its equity securities and available-for-sale fixed income securities as current assets to properly reflect its liquidity and to recognize the fact that it has liquid assets available-for-sale should the need arise.

Market valuations of securities listed on a securities exchange and ETF shares are based on the closing sales prices on the last business day of each month. The market value of the Company's fixed maturity U.S. Government debt securities is determined utilizing publicly quoted market prices. Cash equivalents consist of investments in money market funds that invest primarily in U.S. Government securities valued in accordance with rule 2a-7 under the 1940 Act.

The Fair Value Measurements Topic of FASB's ASC defines fair value as the price that the Company would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market for the investment. The Fair Value Measurements Topic established a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the information that market participants would use in pricing the asset or liability, including assumptions about risk. Examples of risks include those inherent in a particular valuation technique used to measure fair value such as the risk inherent in the inputs to the valuation technique. Inputs are classified as observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the factors market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

The three-tier hierarchy of inputs is summarized in the three broad levels listed below.

Level 1 – quoted prices in active markets for identical investments

Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments)

The following summarizes the levels of fair value measurements of the Company’s investments:

|  | As of January 31, 2022 |
($ in thousands) |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Cash and cash equivalents |  | $ | 29,081 |  |  | $ | - |  |  | $ | - |  |  | $ | 29,081 |
Equity securities |  |  | 27,316 |  |  |  | - |  |  |  | - |  |  |  | 27,316 |
Available-for-sale fixed income securities |  |  | 597 |  |  |  | - |  |  |  | - |  |  |  | 597 |
|  | $ | 56,994 |  |  | $ | - |  |  | $ | - |  |  | $ | 56,994 |

|  | As of April 30, 2021 |
($ in thousands) |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Cash and cash equivalents |  | $ | 18,209 |  |  | $ | - |  |  | $ | - |  |  | $ | 18,209 |
Equity securities |  |  | 23,582 |  |  |  | - |  |  |  | - |  |  |  | 23,582 |
Available-for-sale fixed income securities |  |  | 2,600 |  |  |  | - |  |  |  | - |  |  |  | 2 ,600 |
|  | $ | 44,391 |  |  | $ | - |  |  | $ | - |  |  | $ | 44,391 |

The Company had no other financial instruments such as futures, forwards and swap contracts. For the periods ended January 31, 2022 and April 30, 2021, there were no Level 2 nor Level 3 investments. The Company does not have any liabilities that are subject to fair value measurement.

10

Value Line, Inc.

Notes to Consolidated Condensed Financial Statements

January 31, 2022

(Unaudited)

Advertising expenses:

The Company expenses advertising costs as incurred.

Income Taxes:

The Company computes its income tax provision in accordance with the Income Tax Topic of the FASB's ASC. Deferred tax liabilities and assets are recognized for the expected future tax consequences of events that have been reflected in the Consolidated Condensed Financial Statements. Deferred tax liabilities and assets are determined based on the differences between the book values and the tax bases of particular assets and liabilities, using tax rates currently in effect for the years in which the differences are expected to reverse. The Company adopted the provisions of ASU 2015-17, Income taxes (Topic 740) and classifies all deferred taxes as long-term liabilities on the Consolidated Condensed Balance Sheets.

The Income Tax Topic of the FASB's ASC establishes for all entities, a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. As of January 31, 2022, management has reviewed the tax positions for the years still subject to tax audit under the statute of limitations, evaluated the implications, and determined that there is no material impact to the Company's financial statements.

Earnings per share:

Earnings per share are based on the weighted average number of shares of common stock and common stock equivalents outstanding during each period. Any shares that are reacquired during the period are weighted for the portion of the period that they are outstanding. The Company does not have any potentially dilutive common shares from outstanding stock options, warrants, restricted stock, or restricted stock units.

Cash and Cash Equivalents:

For purposes of the Consolidated Condensed Statements of Cash Flows, the Company considers all cash held at banks and short term liquid investments with an original maturity of less than three months to be cash and cash equivalents. As of January 31, 2022 and April 30, 2021, cash equivalents included $29,081,000 and $18,209,000, respectively, for amounts invested in money market mutual funds that invest in short term U.S. government securities.

Note 2 - Investments:

Investments held by the Company and its subsidiaries are classified as equity securities and available-for-sale fixed income securities in accordance with FASB's ASC 321, Investments - Equity Securities and with FASB's ASC 320, Investments - Debt Securities. All of the Company's securities were readily marketable or had a maturity of twelve months or less and are classified as current assets on the Consolidated Condensed Balance Sheets.

Equity Securities:

Equity securities on the Consolidated Condensed Balance Sheets, consist of ETFs held for dividend yield that attempt to replicate the performance of certain equity indexes and ETFs that hold preferred shares primarily of financial institutions.

As of January 31, 2022 and April 30, 2021, the aggregate cost of the equity securities, which consist of investments in the SPDR Series Trust S&P Dividend ETF (SDY), First Trust Value Line Dividend Index ETF (FVD), Invesco Financial Preferred ETF (PGF), ProShares Trust S&P 500 Dividend Aristocrats ETF (NOBL), iShares Preferred & Income Securities ETF (PFF), and other Exchange Traded Funds and common stock equity securities was a combined total $22,746,000 and $19,105,000, respectively, and the fair value was $27,316,000 and $23,582,000, respectively.

Proceeds from sales of equity securities during the nine months ended January 31, 2022 and January 31, 2021, were $1,202,000 and $7,684,000, respectively.

The carrying value and fair value of equity securities at January 31, 2022 were as follows:

($ in thousands) |  | Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Fair Value |
ETFs - equities |  | $ | 22,746 |  |  | $ | 4,724 |  |  | $ | (154 | ) |  | $ | 27,316 |

The carrying value and fair value of equity securities at April 30, 2021 were as follows:

($ in thousands) |  | Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Fair Value |
ETFs - equities |  | $ | 19,105 |  |  | $ | 4,532 |  |  | $ | (55 | ) |  | $ | 23,582 |

Government Debt Securities (Fixed Income Securities):

Fixed income securities consist of securities issued by federal, state and local governments within the United States.

Proceeds from maturities and sales of government debt securities classified as available-for-sale during the nine months ended January 31, 2022 and January 31, 2021, were $2,496,000 and $11,431,000, respectively. As of January 31, 2022, Accumulated Other Comprehensive Income included unrealized losses of $1,000, net of deferred tax benefit of $278. As of April 30, 2021, Accumulated Other Comprehensive Income included unrealized gains of $4,000, net of deferred taxes of $1,000.

11

Value Line, Inc.

Notes to Consolidated Condensed Financial Statements

January 31, 2022

(Unaudited)

The aggregate cost and fair value at January 31, 2022 of fixed income securities classified as available-for-sale were as follows:

($ in thousands) |  | Amortized Historical Cost |  |  | Gross Unrealized Holding Losses |  |  | Fair Value |
Maturity |  |  |  |  |  |  |  |  |  |  |  |
Due within 1 year |  | $ | 598 |  |  | $ | (1 | ) |  | $ | 597 |
Total investment in government debt securities |  | $ | 598 |  |  | $ | (1 | ) |  | $ | 597 |

The increase in gross unrealized losses of $5,000 on fixed income securities classified as available-for-sale net of deferred tax benefit of $1,000, was included in Accumulated Other Comprehensive Income on the Consolidated Condensed Balance Sheet as of January 31, 2022.

The aggregate cost and fair value at April 30, 2021 of fixed income securities classified as available-for-sale were as follows:

($ in thousands) |  | Amortized Historical Cost |  |  | Gross Unrealized Holding Gains |  |  | Fair Value |
Maturity |  |  |  |  |  |  |  |  |  |  |  |
Due within 1 year |  | $ | 2,596 |  |  | $ | 4 |  |  | $ | 2,600 |
Total investment in government debt securities |  | $ | 2,596 |  |  | $ | 4 |  |  | $ | 2,600 |

The decrease in gross unrealized gains of $173,000 on fixed income securities classified as available-for-sale net of deferred income taxes of $45,000, was included in Accumulated Other Comprehensive Income on the Consolidated Condensed Balance Sheet as of April 30, 2021.

The average yield on the Government debt securities classified as available-for-sale at January 31, 2022 and April 30, 2021 was 0.22% and 1.4%, respectively.

Investment Gains/(Losses):

Investment gains/(losses) were comprised of the following:

|  | Three Months Ended January 31, |  |  | Nine Months Ended January 31, |
($ in thousands) |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Dividend income |  | $ | 234 |  |  | $ | 155 |  |  | $ | 640 |  |  | $ | 413 |
Interest income |  |  | (2 | ) |  |  | 31 |  |  |  | (1 | ) |  |  | 131 |
Investment gains/(losses) recognized on sales of equity securities during the period |  | $ | (19 | ) |  | $ | 141 |  |  |  | 28 |  |  |  | 585 |
Unrealized gains/(losses) recognized on equity securities held at the end of the period |  | $ | (215 | ) |  | $ | 1,456 |  |  |  | 94 |  |  |  | 1,964 |
Other |  |  | (1 | ) |  |  | 2 |  |  |  | (2 | ) |  |  | - |
Total investment gains/(losses) |  | $ | (3 | ) |  | $ | 1,785 |  |  | $ | 759 |  |  | $ | 3,093 |

Taxable realized gains on equity securities sold during fiscal years 2022 and 2021, which are generally the difference between the proceeds from sales and our original cost, were gains of $30,000 in fiscal 2022 and gains of $1,162,000 in fiscal 2021.

Investment in Unconsolidated Entities:

Equity Method Investment:

As of January 31, 2022 and April 30, 2021, the Company's investment in EAM Trust on the Consolidated Condensed Balance Sheets was $60,882,000 and $60,977,000, respectively.

The value of VLI’s investment in EAM at January 31, 2022 and April 30, 2021 reflects the fair value of contributed capital of $55,805,000 at inception which included $5,820,000 of cash and liquid securities in excess of working capital requirements contributed to EAM’s capital account by VLI, plus VLI's share of non-voting revenues and non-voting profits from EAM less distributions, made quarterly to VLI by EAM, during the period subsequent to its initial investment through the dates of the Consolidated Condensed Balance Sheets.

It is anticipated that EAM will have sufficient liquidity and earn enough profit to conduct its current and future operations so the management of EAM will not need additional funding.

12

Value Line, Inc.

Notes to Consolidated Condensed Financial Statements

January 31, 2022

(Unaudited)

The Company monitors its Investment in EAM Trust for impairment to determine whether an event or change in circumstances has occurred that may have a significant adverse effect on the fair value of the investment. Impairment indicators include, but are not limited to the following: (a) a significant deterioration in the earnings performance, asset quality, or business prospects of the investee, (b) a significant adverse change in the regulatory, economic, or technological environment of the investee, (c) a significant adverse change in the general market condition of the industry in which the investee operates, or (d) factors that raise significant concerns about the investee’s ability to continue as a going concern such as negative cash flows, working capital deficiencies, or noncompliance with statutory capital and regulatory requirements. EAM did not record any impairment losses for its assets during the fiscal years 2022 or 2021.

The components of EAM’s investment management operations, provided to the Company by EAM, were as follows:

|  | Three Months Ended January 31, |  |  | Nine Months Ended January 31, |
($ in thousands) (unaudited) |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Investment management fees earned from the Value Line Funds, net of waivers shown below |  | $ | 7,627 |  |  | $ | 7,827 |  |  | $ | 23,306 |  |  | $ | 21,318 |
12b-1 fees and other fees, net of waivers shown below |  | $ | 2,362 |  |  | $ | 2,439 |  |  | $ | 7,303 |  |  | $ | 7,194 |
Other income/(loss) |  | $ | (70 | ) |  | $ | 119 |  |  | $ | 49 |  |  | $ | 234 |
Investment management fee waivers and reimbursements |  | $ | 184 |  |  | $ | 88 |  |  | $ | 402 |  |  | $ | 207 |
12b-1 fee waivers |  | $ | 151 |  |  | $ | 168 |  |  | $ | 493 |  |  | $ | 490 |
Value Line’s non-voting revenues interest |  | $ | 4,120 |  |  | $ | 4,104 |  |  | $ | 12,532 |  |  | $ | 11,113 |
EAM's net income (1) |  | $ | 1,070 |  |  | $ | 1,260 |  |  | $ | 3,640 |  |  | $ | 2,958 |

(1) Represents EAM's net income, after giving effect to Value Line’s non-voting revenues interest, but before distributions to voting profits interest holders and to the Company in respect of its 50% non-voting profits interest.

|  | January 31, |  |  | April 30, |
($ in thousands) |  | 2022 |  |  | 2021 |
|  | (unaudited) |  |  |  |  |
EAM's total assets |  | $ | 65,144 |  |  | $ | 64,197 |
EAM's total liabilities (1) |  |  | (7,910 | ) |  |  | (6,870 | )
EAM's total equity |  | $ | 57,234 |  |  | $ | 57,327 |

(1) At January 31, 2022 and April 30, 2021, EAM's total liabilities included a payable to VLI for its accrued non-voting revenues interest and non-voting profits interest of $4,600,000 and $4,664,000, respectively.

Note 3 - Variable Interest Entity

The Company holds a non-voting revenues interest and a 50% non-voting profits interest in EAM, the adviser to the Value Line asset management and mutual fund distribution businesses. EAM is considered to be a VIE in relation to the Company. The Company makes its determination for consolidation of EAM as a VIE based on a qualitative assessment of the purpose and design of EAM, the terms and characteristics of the variable interests in EAM, and the risks EAM is designed to originate and pass through to holders of variable interests. Other than EAM, the Company does not have an interest in any other VIEs.

The Company has determined that it does not have a controlling financial interest in EAM because it does not have the power to direct the activities of EAM that most significantly impact its economic performance. Value Line does not hold any voting stock of EAM and it does not have any involvement in the day-to-day activities or operations of EAM. Although the EAM Trust Agreement provides Value Line with certain consent rights and contains certain restrictive covenants related to the activities of EAM, these are considered to be protective rights and therefore Value Line does not maintain control over EAM.

In addition, although EAM is expected to be profitable, there is a risk that it could operate at a loss. While all of the profit interest shareholders in EAM are subject to variability based on EAM’s operations risk, Value Line’s non-voting revenues interest in EAM is a preferred interest in the revenues of EAM, rather than a profits interest in EAM, and Value Line accordingly believes it is subject to proportionately less risk than other holders of the profits interests.

The Company has not provided any explicit or implicit financial or other support to EAM other than what was contractually agreed to in the EAM Trust Agreement. Value Line has no obligation to fund EAM in the future and, as a result, has no exposure to loss beyond its initial investment and any undistributed revenues and profits interests retained in EAM. The following table presents the total assets of EAM, the maximum exposure to loss due to involvement with EAM, as well as the value of the assets and liabilities the Company has recorded on its Consolidated Condensed Balance Sheets for its interest in EAM.

|  |  |  |  |  | Value Line |
($ in thousands) |  | VIE Assets |  |  | Investment in EAM Trust (1) |  |  | Liabilities |  |  | Maximum Exposure to Loss |
As of January 31, 2022 (unaudited) |  | $ | 65,144 |  |  | $ | 60,882 |  |  | $ | - |  |  | $ | 60,882 |
As of April 30, 2021 |  | $ | 64,197 |  |  | $ | 60,977 |  |  | $ | - |  |  | $ | 60,977 |

(1) Reported within Long-Term Assets on the Consolidated Condensed Balance Sheets.

13

Value Line, Inc.

Notes to Consolidated Condensed Financial Statements

January 31, 2022

(Unaudited)

Note 4 - Supplementary Cash Flows Information:

Reconciliation of Cash, Cash Equivalents, and Restricted Cash:

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Consolidated Condensed Statement of Cash Flows that sum to the total of the same such amounts shown in the Consolidated Condensed Statement of Cash Flows.

|  | Nine Months Ended January 31, |
($ in thousands) |  | 2022 |  |  | 2021 |
Cash and cash equivalents |  | $ | 29,909 |  |  | $ | 16,182 |
Restricted cash |  |  | 305 |  |  |  | 469 |
Total cash, cash equivalents, and restricted cash shown in the Consolidated Condensed Statement of Cash Flows |  | $ | 30,214 |  |  | $ | 16,651 |

Income Tax Payments:

The Company made income tax payments as follows:

|  | Nine Months Ended January 31, |
($ in thousands) |  | 2022 |  |  | 2021 |
State and local income tax payments |  | $ | 544 |  |  | $ | 1,139 |
Federal income tax payments to the Parent |  |  | 2,300 |  |  |  | 5,210 |

Note 5 - Employees' Profit Sharing and Savings Plan:

Substantially all employees of the Company and its subsidiaries are members of the Value Line, Inc. Profit Sharing and Savings Plan (the "Plan"). In general, this is a qualified, contributory plan which provides for a discretionary annual Company contribution. For the nine months ended January 31, 2022 and January 31, 2021, the estimated profit sharing plan contributions, which are included as expenses in salaries and employee benefits in the Consolidated Condensed Statements of Income, were $466,000 and $586,000, respectively.

Note 6 - Comprehensive Income:

The FASB's ASC Comprehensive Income topic requires the reporting of comprehensive income in addition to net income from operations. Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that otherwise would not be recognized in the calculation of net income.

As of January 31, 2022 and January 31, 2021 the Company held fixed income securities consisting of certificates of deposits and securities issued by federal, state, and local governments within the United States that are classified as securities available-for-sale on the Consolidated Condensed Balance Sheets. The change in valuation of fixed income securities, net of deferred income taxes, has been recorded in Accumulated Other Comprehensive Income in the Company's Consolidated Condensed Balance Sheets.

The components of comprehensive income included in the Consolidated Condensed Statements of Income and Changes in Shareholders' Equity for the nine months ended January 31, 2022 are as follows:

($ in thousands) |  | Amount Before Tax |  |  | Tax (Expense) / Benefit |  |  | Amount Net of Tax |
Change in unrealized losses on available-for-sale fixed income securities |  | $ | (5 | ) |  | $ | 1 |  |  | $ | (4 | )
|  | $ | (5 | ) |  | $ | 1 |  |  | $ | (4 | )

The components of comprehensive income included in the Consolidated Condensed Statements of Income and Changes in Shareholders' Equity for the nine months ended January 31, 2021 are as follows:

($ in thousands) |  | Amount Before Tax |  |  | Tax (Expense) / Benefit |  |  | Amount Net of Tax |
Change in unrealized gains on available-for-sale fixed income securities |  | $ | (142 | ) |  | $ | 37 |  |  | $ | (105 | )
|  | $ | (142 | ) |  | $ | 37 |  |  | $ | (105 | )

Note 7 - Related Party Transactions:

Investment Management (overview):

The Company has substantial non-voting revenues and non-voting profits interests in EAM, the asset manager to the Value Line Mutual Funds. Accordingly, the Company does not report this operation as a separate business segment, although it maintains a significant interest in the cash flows generated by this business and receives non-voting revenues and non-voting profits interests, as discussed below.

Total assets in the Value Line Funds managed and/or distributed by EAM at January 31, 2022, were $4.41 billion, 10.1% below total assets of $4.9 billion in the Value Line Funds managed and/or distributed by EAM at January 31, 2021.

14

Value Line, Inc.

Notes to Consolidated Condensed Financial Statements

January 31, 2022

(Unaudited)

The Company’s non-voting revenues and non-voting profits interests in EAM entitle it to receive quarterly distributions in 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 Voting Profits Interest Holders 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. Value Line’s percent share of EAM’s revenues is calculated each fiscal quarter. The applicable recent non-voting revenues interest percentage for the third quarter of fiscal 2022 was 54.05%.

EAM Trust - VLI's non-voting revenues and non-voting profits interests:

The Company holds non-voting revenues and non-voting profits interests in EAM which entitle the Company to receive from EAM an amount ranging from 41% to 55% of EAM's investment management fee revenues from its mutual fund and separate accounts business. The Company recorded income from its non-voting revenues interest and its non-voting profits interests in EAM as follows:

|  | Three Months Ended January 31, |  |  | Nine Months Ended January 31, |
($ in thousands) |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Non-voting revenues interest in EAM |  | $ | 4,120 |  |  | $ | 4,104 |  |  | $ | 12,532 |  |  | $ | 11,113 |
Non-voting profits interest in EAM |  |  | 535 |  |  |  | 630 |  |  |  | 1,820 |  |  |  | 1,479 |
|  | $ | 4,655 |  |  | $ | 4,734 |  |  | $ | 14,352 |  |  | $ | 12,592 |

At January 31, 2022, the Company's investment in EAM includes a receivable of $4,600,000 representing the quarterly distribution of the non-voting revenues share and non-voting profits share. That amount was subsequently paid to the Company.

Transactions with Parent:

During the nine months ended January 31, 2022 and January 31, 2021, the Company was reimbursed $243,000 and $272,000, respectively, for payments it made on behalf of and for services the Company provided to the Parent Company, Arnold Bernhard and Co., Inc. ("Parent"). There were no receivables from the Parent on the Consolidated Condensed Balance Sheets at January 31, 2022 and April 30, 2021.

The Company is a party to a tax-sharing arrangement with the Parent which allocates the tax liabilities of the two Companies between them. The Company made federal tax payments of $2,300,000 and $5,210,000 to the Parent during the nine months ended January 31, 2022 and January 31, 2021, respectively.

As of January 31, 2022, the Parent owned 90.6% of the outstanding shares of common stock of the Company.

Note 8 - Federal, State and Local Income Taxes:

In accordance with the requirements of the Income Tax Topic of the FASB's ASC, the Company's provision for income taxes includes the following:

|  | Three Months Ended January 31, |  |  | Nine Months Ended January 31, |
($ in thousands) |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Current tax expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 1,662 |  |  | $ | 1,525 |  |  | $ | 4,684 |  |  | $ | 4,189 |
State and local |  |  | 472 |  |  |  | 108 |  |  |  | 1,066 |  |  |  | 805 |
Current tax expense |  |  | 2,134 |  |  |  | 1,633 |  |  |  | 5,750 |  |  |  | 4,994 |
Deferred tax expense (benefit): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (175 | ) |  |  | 438 |  |  |  | (57 | ) |  |  | 468 |
State and local |  |  | (46 | ) |  |  | (304 | ) |  |  | (389 | ) |  |  | (308 | )
Deferred tax expense (benefit): |  |  | (221 | ) |  |  | 134 |  |  |  | (446 | ) |  |  | 160 |
Income tax provision |  | $ | 1,913 |  |  | $ | 1,767 |  |  | $ | 5,304 |  |  | $ | 5,154 |

On December 22, 2017 H.R. 1, originally known as the Tax Cuts and Jobs Act (the "Tax Act"), was enacted. The Tax Act lowered the U.S. federal income tax rate ("Federal Tax Rate") from 35% to 21% effective January 1, 2018. Accordingly, the Company computes Federal income tax expense using the Federal Tax Rate of 21% in fiscal year 2019 and each year thereafter.

The overall effective income tax rates, as a percentage of pre-tax ordinary income for the nine months ended January 31, 2022 and January 31, 2021 were 20.94% and 23.03%, respectively. The decrease in the effective tax rate during nine months ended January 31, 2022 as compared to January 31, 2021, is primarily a result of the non-taxable revenue derived from forgiveness of the PPP loan by the SBA (see note 16) and a decrease in the state and local income taxes from 2.30% to 2.11% as a result of changes in state and local income tax allocations, such as the effect of the reduction in the New York State and New York City tax allocation factors, on deferred taxes in fiscal 2022. 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, new interpretations of existing tax laws and rulings and settlements with tax authorities.

15

Value Line, Inc.

Notes to Consolidated Condensed Financial Statements

January 31, 2022

(Unaudited)

Deferred income taxes, a liability, are provided for temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities. The tax effect of temporary differences giving rise to the Company's long-term deferred tax liability are as follows:

|  | January 31, |  |  | April 30, |
($ in thousands) |  | 2022 |  |  | 2021 |
Federal tax liability (benefit): |  |  |  |  |  |  |  |
Deferred gain on deconsolidation of EAM |  | $ | 10,670 |  |  | $ | 10,669 |
Deferred non-cash post-employment compensation |  |  | (372 | ) |  |  | (372 | )
Depreciation and amortization |  |  | 81 |  |  |  | 108 |
Unrealized gain on equity securities |  |  | 960 |  |  |  | 941 |
Right of Use Asset |  |  | (199 | ) |  |  | (196 | )
Deferred charges |  |  | (164 | ) |  |  | (186 | )
Other |  |  | (262 | ) |  |  | (218 | )
Total federal tax liability |  |  | 10,714 |  |  |  | 10,746 |
State and local tax liabilities (benefits): |  |  |  |  |  |  |  |
Deferred gain on deconsolidation of EAM |  |  | 2,213 |  |  |  | 1,807 |
Deferred non-cash post-employment compensation |  |  | (76 | ) |  |  | (63 | )
Depreciation and amortization |  |  | 16 |  |  |  | 18 |
Unrealized gain on equity securities |  |  | 163 |  |  |  | 159 |
Other |  |  | 17 |  |  |  | 238 |
Total state and local tax liabilities |  |  | 2,333 |  |  |  | 2,159 |
Deferred tax liability, long-term |  | $ | 13,047 |  |  | $ | 12,905 |

At the end of each interim reporting period, the Company estimates the effective income tax rate to apply for the full fiscal year. The Company uses the effective income tax rate determined to provide for income taxes on a year-to-date basis and reflects the tax effect of any tax law changes and certain other discrete events in the period in which they occur.

The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory income tax rate to pretax income as a result of the following:

|  | Nine Months Ended January 31, |
|  | 2022 |  |  | 2021 |
U.S. statutory federal tax rate |  |  | 21.00 | % |  |  | 21.00 | %
Increase (decrease) in tax rate from: |  |  |  |  |  |  |  |
State and local income taxes, net of federal income tax benefit |  |  | 2.11 | % |  |  | 2.30 | %
Non-taxable SBA loan forgiveness |  |  | (1.93 | )% |  |  | - |
Effect of dividends received deductions |  |  | (0.26 | )% |  |  | (0.28 | )%
Other, net |  |  | 0.02 | % |  |  | 0.01 | %
Effective income tax rate |  |  | 20.94 | % |  |  | 23.03 | %

The Company believes that, as of January 31, 2022, there were no material uncertain tax positions that would require disclosure under GAAP.

The Company is included in the consolidated federal income tax return of the Parent. It also files combined income tax returns with the Parent on a unitary basis in certain states. The Company has a tax sharing agreement which requires it to make tax payments to the Parent equal to the Company's liability/(benefit) as if it filed a separate return.

The Company’s federal income tax returns (included in the Parent’s consolidated returns) and state and city tax returns for fiscal years ended 2018 through 2020, are subject to examination by the tax authorities, generally for three years after they are filed with the tax authorities.

Note 9 - Property and Equipment:

Property and equipment are carried at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of the assets, or in the case of leasehold improvements, over the remaining terms of the leases. For income tax purposes, depreciation of furniture and equipment is computed using accelerated methods and buildings and leasehold improvements are depreciated over prescribed extended tax lives. Property and equipment, net, on the Consolidated Condensed Balance Sheets was comprised of the following:

|  | January 31, |  |  | April 30, |
($ in thousands) |  | 2022 |  |  | 2021 |
Building and leasehold improvements |  | $ | 1,013 |  |  | $ | 1,013 |
Operating lease - right-of-use asset |  |  | 6,717 |  |  |  | 7,522 |
Furniture and equipment |  |  | 4,080 |  |  |  | 4,080 |
|  |  | 11,810 |  |  |  | 12,615 |
Accumulated depreciation and amortization |  |  | (4,443 | ) |  |  | (4,304 | )
Total property and equipment, net |  | $ | 7,367 |  |  | $ | 8,311 |

16

Value Line, Inc.

Notes to Consolidated Condensed Financial Statements

January 31, 2022

(Unaudited)

Note 10 - Accounting for the Costs of Computer Software Developed for Internal Use:

The Company has adopted the provisions of the Statement of Position 98-1 (SOP 98-1), "Accounting for the Costs of Computer Software Developed for Internal Use". SOP 98-1 requires companies to capitalize as long-lived assets many of the costs associated with developing or purchasing software for internal use and amortize those costs over the software's estimated useful life in a systematic and rational manner. Such costs, when incurred, are capitalized and amortized over the expected useful life of the asset, normally 3 to 5 years. Total amortization expenses during the nine months ended January 31, 2022 and January 31, 2021, were $59,000 and $49,000, respectively.

During the nine months ended January 31, 2022, the Company did not incur and did not capitalize expenditures related to third party programmers' costs or to the development of software for internal use. The Company, capitalized $114,000 third party programmers' costs, during the nine months ended January 31, 2021. The Company did not incur and did not capitalize expenditures related to the development of software for internal use during the nine months ended January 31, 2021.

Note 11 - Treasury Stock and Repurchase Program:

On July 16, 2021, the Company's Board of Directors approved a share repurchase program authorizing the repurchase of shares of the Company’s common stock up to an aggregate purchase price of $2,000,000. On March 14, 2022, the Board reviewed the program and approved a refreshed authorization again in the maximum amount of $2,000,000. The repurchases may be made from time to time on the open market at prevailing market prices, in negotiated transactions off the market, in block purchases or otherwise. The repurchase program may be suspended or discontinued at any time at the Company’s discretion and has no set expiration date.

Treasury stock, at cost, consists of the following:

(in thousands except for shares and cost per share) |  | Shares |  |  | Cost Assigned |  |  | Average Cost per Share |  |  | Aggregate Purchase Price Remaining Under the Program |
Balance as of April 30, 2021 |  |  | 436,830 |  |  | $ | 7,483 |  |  | $ | 17.13 |  |  | $ | 474 |
Purchases effected in open market during the quarters ended: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
July 31, 2021 |  |  | 5,409 |  |  |  | 163 |  |  |  | 30.13 |  |  |  | 2,000 |
October 31, 2021 |  |  | 11,180 |  |  |  | 354 |  |  |  | 31.67 |  |  |  | 1,646 |
January 31, 2022 |  |  | 17,418 |  |  |  | 805 |  |  |  | 46.21 |  |  |  | 841 |
Balance as of January 31, 2022 |  |  | 470,837 |  |  | $ | 8,805 |  |  | $ | 18.70 |  |  | $ | 841 |
Authorized as of March 14, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 2,000 |

Note 12 - Lease Commitments:

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”. This ASU requires that, for leases longer than one year, a lessee recognize in the statements of financial position a right-of-use asset, representing the right to use the underlying asset for the lease term, and a lease liability, representing the liability to make lease payments. It also requires that for finance leases, a lessee recognize interest expense on the lease liability, separately from the amortization of the right-of-use asset in the statements of earnings, while for operating leases, such amounts should be recognized as a combined expense. The firm adopted this ASU in May 2019 under a modified retrospective approach.

The Company adopted ASU 2016-02 using a modified retrospective transition approach as of the Effective Date as permitted by the amendments in ASU 2018-11, which provides an alternative modified retrospective transition method. As a result, the Company was not required to adjust its comparative period financial information for effects of the standard or make the new required lease disclosures for periods before the date of adoption (i.e. May 1, 2019). The Company has elected to employ the transitionary relief offered by the FASB and, therefore, has not reassessed (1) whether existing or expired contracts contain a lease, (2) lease classification for existing or expired leases or (3) the accounting for initial direct costs that were previously capitalized.

The Company leases office space in New York, NY and a warehouse and appurtenant office space in Lyndhurst, NJ. The Company has evaluated these leases and determined that they are operating leases under the definitions of the guidance of ASU 2016-02.

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. For operating leases, the right-of-use asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received.

On May 1, 2019, the Company recorded a right-of-use asset in the amount of $9,575,000, which represents the lease liability of $10,340,000 adjusted for previously recorded unamortized lease incentives in the amount of $765,000. The right-of-use asset is amortized over the remaining lease term in the amount equal to the difference between the calculated straight-line expense of the total lease payments less the monthly interest calculated on the remaining lease liability. As of January 31, 2022, the Company had a long-term lease asset of $6,717,000 recorded in property and equipment in its Consolidated Condensed Balance Sheets.

17

Value Line, Inc.

Notes to Consolidated Condensed Financial Statements

January 31, 2022

(Unaudited)

The Company recognizes lease expense, calculated as the remaining cost of the lease allocated over the remaining lease term on a straight-line basis. Lease expense is presented as part of continuing operations in the consolidated condensed statements of income. The Company recognized $1,125,000 in lease expenses in both fiscal years 2022 and 2021 during the nine months ended January 31, 2022 and January 31, 2021, respectively.

For the nine months ended January 31, 2022, the Company paid $1,111,000 in rent relating to the leases. As a payment arising from an operating lease, the $1,111,000 is classified within operating activities in the consolidated condensed statements of cash flows.

The Company’s leases generally do not provide an implicit interest rate, and therefore the Company estimated an incremental borrowing rate, or IBR, as of the commencement date, to determine the present value of its operating lease liabilities. The IBR is defined under ASC 842 as the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments in a similar economic environment. The following table reconciles the undiscounted future minimum lease payments to the total operating lease liabilities recognized on the Consolidated Condensed Balance Sheet as of January 31, 2022:

Fiscal years ended April 30, |  | ($ in thousands) |
2022 * |  | $ | 394 |
2023 |  |  | 1,597 |
2024 |  |  | 1,634 |
2025 |  |  | 1,428 |
2026 |  |  | 1,461 |
Thereafter |  |  | 2,376 |
Total undiscounted future minimum lease payments |  |  | 8,890 |
Less: difference between undiscounted lease payments & the present value of future lease payments |  |  | 1,227 |
Total operating lease liabilities |  | $ | 7,663 |

* Excludes the nine months ended January 31, 2022

Note 13 - Restricted Cash and Deposits:

Restricted Money Market Investment in the noncurrent assets on the Consolidated Condensed Balance Sheet at January 31, 2022, includes $305,000, which represents cash invested in a bank money market fund securing a letter of credit ("LOC") in the amount of $305,000 issued to the sublandlord as a security deposit for the Company's New York City leased corporate office facility. According to the sublease agreement the LOC and restricted cash were reduced from $469,000 to $305,000 in the third quarter of fiscal year 2022.

Note 14 - Concentration:

During the nine months ended January 31, 2022, 33.0% of total publishing revenues of $30,397,000 were derived from a single customer.

Note 15 - Concentration of Credit Risk:

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. As of January 31, 2022 and January 31, 2021, the Company had $3,030,000 and $3,289,000, respectively, in excess of the FDIC insured limit. Management has concluded the excess does not represent a material risk, based on the creditworthiness of the counter parties.

Note 16 - Paycheck Protection Program Loan:

Shortly after declaration of the COVID-19 pandemic and "lockdowns" of numerous non-essential businesses, the Company in April of 2020 executed a note and received a loan (the "PPP Loan") from JP Morgan Chase Bank under the Paycheck Protection Program ("PPP") which was established under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") and was administered by the U.S. Small Business Administration ("SBA"). The proceeds from the PPP Loan were used in accordance with the terms of the CARES Act program.

Under the terms of the CARES Act, Borrowers could apply for and be granted forgiveness for all or a portion of the PPP Loan. Such forgiveness is determined, subject to limitations, based on the use of loan proceeds in accordance with the terms of the CARES Act. The Company was granted total loan forgiveness of $2,331,365 by the SBA during the second quarter of fiscal 2022. Accrued interest was also forgiven.

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Item 2. 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 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;
| ● | protecting intellectual property rights in Company methods and trademarks;
| ● | 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, a Delaware statutory trust (“EAM” or “EAM 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 broadly based changes in the values of equity and debt securities, redemptions by investors and other factors;
| ● | possible changes in the valuation of EAM’s intangible assets from time to time;
| ● | generating future revenues or collection of receivables from significant customers;
| ● | dependence on key executive and specialist personnel;
| ● | risks associated with the outsourcing of certain functions, technical facilities, and operations, including in some instances outside the U.S.;
| ● | 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;
| ● | availability of free or low cost investment data through discount brokers or generally over the internet;
| ● | military conflicts, civil unrest, and associated travel and supply disruptions and other effects;
| ● | Russia’s invasion of Ukraine and the impact on inflation;
| ● | terrorist attacks, cyber attacks and natural disasters;
| ● | insufficiency in our business continuity plans or systems in the event of anticipated or unpredictable disruption;
| ● | the coronavirus pandemic, which has drastically affected markets, employment, and other economic conditions, and may have additional unpredictable impacts on employees, suppliers, customers, and operations;
| ● | other possible epidemics;
| ● | changes in prices of materials and other inputs and services, such as freight and postage, required by the Company;
| ● | other risks and uncertainties, including but not limited to the risks described in Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended April 30, 2021 and in Part II, Item 1A of this Quarterly Report on Form 10-Q for the period ended January 31, 2022; and other risks and uncertainties arising from time to time.

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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 or changes in our plans, strategies, objectives, expectations or intentions, which may happen at any time at our discretion, could also have material adverse effects on future results. Except as otherwise required by applicable law, 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 periodicals 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"). The Company maintains a significant investment in EAM from which it receives payments in respect of its non-voting revenues and non-voting profits interests.

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 periodicals 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

Under the EAM Declaration of Trust, the Company maintains an interest in certain 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.

The business of EAM is managed by its trustees each owning 20% of the voting profits interest in EAM and by its officers subject to the direction of the trustees. The Company’s non-voting revenues and non-voting profits interests in EAM entitle it to receive 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 Voting Profits Interest Holders 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.

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Business Environment

The nation’s economy entered 2022 on solid footing. Although GDP growth is expected to moderate in the calendar first quarter from the annualized advance of 7.0% recorded in the final period of 2021, a resilient consumer, solid industrial production, and a healthy housing market should drive further economic gains this year. In all, our current expectation is for full-year GDP growth in the vicinity of 3.5%.

The strength of the consumer sector has led the recovery from the 2020 COVID-19 pandemic-driven recession. After a setback in December, as the Omicron variant of the COVID-19 virus spread rapidly across the nation causing more disruptions to economic activity, personal consumption expenditures rebounded nicely in January. The domestic consumer looks poised to spend further in the year ahead, drawing down on a portion of the savings built during the height of the pandemic. An improving public health situation as we move toward the spring season should set the stage for strong consumption growth.

That said, there are some lingering headwinds for the economy, including inflationary pressures not seen in decades. In particular, energy prices have risen sharply following Russia’s invasion of Ukraine in late February. Russia’s actions brought severe retaliatory sanctions from the United States and its NATO allies, which included penalties against Russia’s oil and gas and banking industries. This is likely to cause further disruptions in the global oil supply and may push energy and other commodities prices higher.

The Federal Reserve set to embark on a less accommodative monetary policy course. This will likely include the implementation of a series of interest-rate hikes over the remainder of this year and next in an attempt to rein in inflation. The central bank is tasked with crafting a monetary policy strategy that will help stabilize pricing, but not apply the brakes too hard and risk leading to a notable slowdown in economic growth.

The inflation worries, the Fed’s monetary policy commentary, and the geopolitical turmoil in Eastern Europe were factors that contributed to the notable pickup in stock market volatility over the first few months of the year. This trend may continue in the near term, as equities historically have not performed as well during periods of monetary policy tightening.

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Results of Operations for the Three and Nine Months Ended January 31, 2022 and January 31, 2021

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

|  | Three Months Ended January 31, |  |  | Nine Months Ended January 31, |
($ in thousands, except earnings per share) |  | 2022 |  |  | 2021 |  |  | Change |  |  | 2022 |  |  | 2021 |  |  | Change |
Income from operations |  | $ | 2,875 |  |  | $ | 2,283 |  |  |  | 25.9 | % |  | $ | 7,877 |  |  | $ | 6,697 |  |  |  | 17.6 | %
Gain on forgiveness of SBA loan |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,331 |  |  |  | - |  |  |  | 100.0 | %
Non-voting revenues and non-voting profits interests from EAM Trust |  |  | 4,655 |  |  |  | 4,734 |  |  |  | -1.7 | % |  |  | 14,352 |  |  |  | 12,592 |  |  |  | 14.0 | %
Income from operations plus non-voting revenues and non-voting profits interests from EAM Trust and gain on SBA loan forgiveness |  | $ | 7,530 |  |  | $ | 7,017 |  |  |  | 7.3 | % |  | $ | 24,560 |  |  | $ | 19,289 |  |  |  | 27.3 | %
Operating expenses |  | $ | 7,383 |  |  | $ | 7,847 |  |  |  | -5.9 | % |  | $ | 22,520 |  |  | $ | 23,971 |  |  |  | -6.1 | %
Investment gains/(losses) |  | $ | (3 | ) |  | $ | 1,785 |  |  |  | n/a |  |  | $ | 759 |  |  | $ | 3,093 |  |  |  | -75.5 | %
Income before income taxes |  | $ | 7,527 |  |  | $ | 8,802 |  |  |  | -14.5 | % |  | $ | 25,319 |  |  | $ | 22,382 |  |  |  | 13.1 | %
Net income |  | $ | 5,614 |  |  | $ | 7,035 |  |  |  | -20.2 | % |  | $ | 20,015 |  |  | $ | 17,228 |  |  |  | 16.2 | %
Earnings per share |  | $ | 0.59 |  |  | $ | 0.73 |  |  |  | -19.2 | % |  | $ | 2.10 |  |  | $ | 1.79 |  |  |  | 17.3 | %

During the nine months ended January 31, 2022, the Company’s net income of $20,015,000, or $2.10 per share, was $2,787,000 or 16.2% above net income of $17,228,000, or $1.79 per share, for the nine months ended January 31, 2021. During the nine months ended January 31, 2022, the Company’s income from operations of $7,877,000 was $1,180,000 or 17.6% above income from operations of $6,697,000 during the nine months ended January 31, 2021. For the nine months ended January 31, 2022, operating expenses of $22,520,000 decreased 6.1% as compared to operating expenses during the nine months ended January 31, 2021.

The largest factors in the increase in net income during the nine months ended January 31, 2022, compared to the prior fiscal year, were a gain on forgiveness by the SBA of the Company’s PPP loan, an increase from revenues and profits interests in EAM Trust and well controlled expenses.

During the three months ended January 31, 2022, the Company’s income from operations of $2,875,000 was 25.9% above income from operations of $2,283,000 during the three months ended January 31, 2021. For the three months ended January 31, 2022, operating expenses decreased 5.9% compared to operating expenses during the three months ended January 31, 2021. During the three months ended January 31, 2022, the Company’s net income of $5,614,000, or $0.59 per share, was 20.2% below net income of $7,035,000, or $0.73 per share, for the three months ended January 31, 2021. The Company’s net income decreased during the third quarter of fiscal year 2022 because realized and unrealized gains on equity securities were higher by $1,831,000 pretax and $1,409,000 after tax during the prior year fiscal quarter ended January 31, 2021.

During the nine months ended January 31, 2022, there were 9,551,418 average common shares outstanding as compared to 9,604,869 average common shares outstanding during the nine months ended January 31, 2021.

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Total operating revenues

|  | Three Months Ended January 31, |  |  | Nine Months Ended January 31, |
($ in thousands) |  | 2022 |  |  | 2021 |  |  | Change |  |  | 2022 |  |  | 2021 |  |  | Change |
Investment periodicals and related publications: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Print |  | $ | 2,769 |  |  | $ | 2,896 |  |  |  | -4.4 | % |  | $ | 8,389 |  |  | $ | 9,054 |  |  |  | -7.3 | %
Digital |  |  | 4,010 |  |  |  | 3,934 |  |  |  | 1.9 | % |  |  | 11,972 |  |  |  | 11,769 |  |  |  | 1.7 | %
Total investment periodicals and related publications |  |  | 6,779 |  |  |  | 6,830 |  |  |  | -0.7 | % |  |  | 20,361 |  |  |  | 20,823 |  |  |  | -2.2 | %
Copyright fees |  |  | 3,479 |  |  |  | 3,300 |  |  |  | 5.4 | % |  |  | 10,036 |  |  |  | 9,845 |  |  |  | 1.9 | %
Total publishing revenues |  | $ | 10,258 |  |  | $ | 10,130 |  |  |  | 1.3 | % |  | $ | 30,397 |  |  | $ | 30,668 |  |  |  | -0.9 | %

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 January 31, |  |  | Nine Months Ended January 31, |
|  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
|  | Print |  |  | Digital |  |  | Print |  |  | Digital |  |  | Print |  |  | Digital |  |  | Print |  |  | Digital |
New Sales |  |  | 7.8 | % |  |  | 12.6 | % |  |  | 13.3 | % |  |  | 16.4 | % |  |  | 12.1 | % |  |  | 14.0 | % |  |  | 14.5 | % |  |  | 15.8 | %
Renewal Sales |  |  | 92.2 | % |  |  | 87.4 | % |  |  | 86.7 | % |  |  | 83.6 | % |  |  | 87.9 | % |  |  | 86.0 | % |  |  | 85.5 | % |  |  | 84.2 | %
Total Gross Sales |  |  | 100 | % |  |  | 100 | % |  |  | 100 | % |  |  | 100 | % |  |  | 100 | % |  |  | 100 | % |  |  | 100 | % |  |  | 100 | %

During the nine months ended January 31, 2022, new sales of print and digital publications decreased as a percent of the total gross sales versus the prior fiscal year. During the nine months ended January 31, 2022, renewal sales of print and digital publications increased as a percent of the total gross sales versus the prior fiscal year as a result of increased efforts by our in-house Retail and Institutional Sales departments.

|  | As of January 31, |  |  | As of April 30, |  |  | As of January 31, |  |  | Change |
($ in thousands) |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | Jan-22 vs. Apr-21 |  |  | Jan-22 vs. Jan-21 |
Unearned subscription revenue (current and long-term liabilities) |  | $ | 23,148 |  |  | $ | 25,088 |  |  | $ | 23,451 |  |  |  | -7.7 | % |  |  | -1.3 | %

Unearned subscription revenue as of January 31, 2022 is 1.3% below January 31, 2021 and is 7.7% below April 30, 2021. A certain amount of variation is to be expected due to the volume of new orders and timing of renewal orders, direct mail campaigns and large Institutional Sales orders.

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Investment periodicals and related publications revenues

Investment periodicals and related publications revenues of $20,361,000 (excluding copyright fees) during the nine months ended January 31, 2022, were 2.2% below publishing revenues in the prior fiscal year. The Company continued activity to attract new subscribers, primarily digital subscriptions through various marketing channels, primarily direct mail, e-mail, and by the efforts of our sales personnel. Total product line circulation at January 31, 2022, was less than 1% below total product line circulation at January 31, 2021. During the nine months ended January 31, 2022, Institutional Sales department generated total sales orders of $9,085,000 and the retail telemarketing sales team generated total sales orders of $5,993,000.

Total print circulation at January 31, 2022 was 1.9% below the total print circulation at January 31, 2021. Print publication revenues of $8,389,000 decreased 7.3% below the prior fiscal year. Total digital circulation at January 31, 2022 was 1.3% above total digital circulation at January 31, 2021. Digital revenues of $11,972,000 were up 1.7% as compared to the prior fiscal year.

Value Line serves primarily individual and professional investors in stocks, who pay mostly on annual subscription plans, for basic services or comprehensive premium quality research, not obtainable elsewhere. The ongoing goal of adding new subscribers has led us to introduce publications and packages at a range of price points. Further, new services and new features for existing services are regularly under consideration. Prominently introduced in fiscal 2020 and 2021 were new features in the Value Line Research Center, which are The New Value Line ETFs Service, new monthly publication Value Line Information You Should Know Wealth Newsletter, The Value Line M & A Service, and our Value Line Climate Change Investing Service.

The Value Line Proprietary Ranks (the “Ranking System”), a component of the Company’s flagship product, The Value Line Investment Survey, is also utilized in the Company’s copyright business. The Ranking System is made available to EAM for specific uses without charge. During the six month period ended January 31, 2022, the combined Ranking System “Rank 1 & 2” stocks’ decrease of 3.5% compared to the Russell 2000 Index’s decrease of 8.9% during the comparable period. During the twelve month period ended January 31, 2022, the combined Ranking System “Rank 1 & 2” stocks’ increase of 12.1% outperformed the Russell 2000 Index’s decrease of 2.2% during the comparable period.

Copyright fees

During the nine months ended January 31, 2022, copyright fees of $10,036,000 were 1.9% above those during the corresponding period in the prior fiscal year. The Company negotiated in fiscal year 2020 with the sponsor of the largest exchange traded fund (“ETF”) in the program, the restructuring of the Company’s asset based fees and overall fees of the ETF in light of the competitive market.

Investment management fees and services – (unconsolidated)

The Company has substantial non-voting revenues and non-voting profits interests in EAM, the asset manager to the Value Line Mutual Funds. Accordingly, the Company does not report this operation as a separate business segment, although it maintains a significant interest in the cash flows generated by this business and will receive ongoing payments in respect of its non-voting revenues and non-voting profits interests.

Total assets in the Value Line Funds managed and/or distributed by EAM at January 31, 2022, were $4.41 billion, which is $490 million, or 10.1%, below total assets of $4.9 billion in the Value Line Funds managed and/or distributed by EAM at January 31, 2021. The decrease in net assets was primarily due to supply chain disruptions that have led to the highest inflation rates in 40 years, and spiking Omicron positivity levels across the United States. The decrease reflects negative net flows in all nine Value Line Funds during the twelve month period ended January 31, 2022.

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Value Line Mutual Funds

|  | As of January 31, |
($ in millions) |  | 2022 |  |  | 2021 |  |  | Change |
Variable annuity assets ("GIAC") |  | $ | 406 |  |  | $ | 409 |  |  |  | -0.7 | %
All other open end equity and hybrid fund assets |  |  | 3,952 |  |  |  | 4,390 |  |  |  | -10.0 | %
Total equity and hybrid funds |  |  | 4,358 |  |  |  | 4,799 |  |  |  | -9.2 | %
Fixed income funds* |  |  | 49 |  |  |  | 103 |  |  |  | -52.4 | %
Total EAM managed net assets |  | $ | 4,407 |  |  | $ | 4,902 |  |  |  | -10.1 | %

* Tax-Exempt Fund was liquidated in October 2021.

As of January 31, 2022 four of six Value Line equity and hybrid mutual funds, excluding SAM and Centurion, held an overall four or five star ratings by Morningstar, Inc. The Advisor/Independent Broker Dealer channel has successfully become the largest channel for sales and distribution of The Value Line Funds. This is a growing channel as EAM continues to add more advisers each year.

EAM Trust - Results of operations before distribution to interest holders

The gross fees and net income of EAM’s investment management operations during the nine months ended January 31, 2022, before interest holder distributions, included total investment management fees earned from the Value Line Funds of $23,306,000, 12b-1 fees and other fees of $7,303,000 and other net income of $49,000. For the same period, total investment management fee waivers were $402,000 and 12b-1 fee waivers for three Value Line Funds were $493,000. During the nine months ended January 31, 2022, EAM's net income was $3,640,000 after giving effect to Value Line’s non-voting revenues interest of $12,532,000, 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 nine months ended January 31, 2021, before interest holder distributions, included total investment management fees earned from the Value Line Funds of $21,318,000, 12b-1 fees and other fees of $7,194,000 and other income of $234,000. For the same period, total investment management fee waivers were $207,000 and 12b-1 fee waivers for nine Value Line Funds were $490,000. During the nine months ended January 31, 2021, EAM's net income was $2,958,000 after giving effect to Value Line’s non-voting revenues interest of $11,113,000, but before distributions to voting profits interest holders and to the Company in respect of its 50% non-voting profits interest.

As of January 31, 2022 and January 31, 2021, three of the Value Line Funds have all or a portion of the 12b-1 fees being waived, and one fund has partial investment management fee waivers in place. Although, under the terms of the EAM Declaration of Trust, the Company does not receive or share in the revenues from 12b-1 distribution fees, the Company could benefit from the fee waivers to the extent that the resulting reduction of expense ratios and enhancement of the performance of the Value Line Funds attracts new assets.

The Value Line equity and hybrid funds’ assets represent 89.7%, variable annuity funds issued by GIAC represent 9.2%, and fixed income fund assets represent 1.1%, respectively, of total fund assets under management (“AUM”) as of January 31, 2022. At January 31, 2022, equity, hybrid and GIAC variable annuities AUM decreased by 9.2% and fixed income AUM decreased by 52.4% as compared to the prior fiscal year.

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

The Company holds non-voting revenues and non-voting profits interests in EAM which entitle the Company to receive from EAM an amount ranging from 41% to 55% of EAM's investment management fee revenues from its mutual fund and separate accounts business, and 50% of EAM’s net profits, not less than 90% of which is distributed in cash every fiscal quarter. The applicable recent non-voting revenues interest percentage for the third quarter of fiscal year 2022, that is, the fiscal quarter ending January 31, 2022, is 54.05%.

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

|  | Three Months Ended January 31, |  |  | Nine Months Ended January 31, |
($ in thousands) |  | 2022 |  |  | 2021 |  |  | Change |  |  | 2022 |  |  | 2021 |  |  | Change |
Non-voting revenues interest |  | $ | 4,120 |  |  | $ | 4,104 |  |  |  | 0.4 | % |  | $ | 12,532 |  |  | $ | 11,113 |  |  |  | 12.8 | %
Non-voting profits interest |  |  | 535 |  |  |  | 630 |  |  |  | -15.1 | % |  |  | 1,820 |  |  |  | 1,479 |  |  |  | 23.1 | %
|  | $ | 4,655 |  |  | $ | 4,734 |  |  |  | -1.7 | % |  | $ | 14,352 |  |  | $ | 12,592 |  |  |  | 14.0 | %

Operating expenses

|  | Three Months Ended January 31, |  |  | Nine Months Ended January 31, |
($ in thousands) |  | 2022 |  |  | 2021 |  |  | Change |  |  | 2022 |  |  | 2021 |  |  | Change |
Advertising and promotion |  | $ | 722 |  |  | $ | 837 |  |  |  | -13.7 | % |  | $ | 2,445 |  |  | $ | 2,709 |  |  |  | -9.7 | %
Salaries and employee benefits |  |  | 4,285 |  |  |  | 4,716 |  |  |  | -9.1 | % |  |  | 13,245 |  |  |  | 13,778 |  |  |  | -3.9 | %
Production and distribution |  |  | 1,269 |  |  |  | 1,189 |  |  |  | 6.7 | % |  |  | 3,796 |  |  |  | 3,854 |  |  |  | -1.5 | %
Office and administration |  |  | 1,107 |  |  |  | 1,105 |  |  |  | 0.2 | % |  |  | 3,034 |  |  |  | 3,630 |  |  |  | -16.4 | %
Total expenses |  | $ | 7,383 |  |  | $ | 7,847 |  |  |  | -5.9 | % |  | $ | 22,520 |  |  | $ | 23,971 |  |  |  | -6.1 | %

Expenses within the Company are categorized into advertising and promotion, salaries and employee benefits, production and distribution, office and administration. Operating expenses of $7,383,000 and $22,520,000 during the three and nine months ended January 31, 2022, decreased 5.9% and 6.1%, respectively, as compared to those during the three and nine months ended January 31, 2021, as a result of cost controls in fiscal year 2022.

Advertising and promotion

During the three and nine months ended January 31, 2022, advertising and promotion expenses of $722,000 and $2,445,000 decreased 13.7% and 9.7%, respectively, as compared to the prior fiscal year, primarily due to a decrease in direct mail campaigns’ volume based on more precise targeting.

Salaries and employee benefits

During the three and nine months ended January 31, 2022, salaries and employee benefits of $4,285,000 and $13,245,000 decreased 9.1% and 3.9%, respectively, as compared to the prior fiscal year, primarily due to decreases in salaries and employee benefits resulting from a reduced employee headcount in fiscal year 2022.

Production and distribution

During the nine months ended January 31, 2022, production and distribution expenses of $3,796,000 decreased 1.5%, as compared to the prior fiscal year, primarily due to decreases in service mailers and distribution expenses partially offset by an increase in production support of the Company’s website, maintenance of the Company’s publishing and application software and operating systems. During the three months ended January 31, 2022, production and distribution expenses of $1,269,000 increased 6.7% due to a reversal of accrued costs of operating system software maintenance during the three months ended January 31, 2021.

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Office and administration

During the three months ended January 31, 2022, office and administrative expenses of $1,107,000 were comparable with the third quarter of the prior fiscal year. During the nine months ended January 31, 2022, office and administrative expenses of $3,034,000 decreased 16.4% as compared to the prior fiscal year, primarily due to a favorable settlement of a disputed fee with a contractor and decreases in professional fees.

Concentration

During the nine months ended January 31, 2022, 33.0% of total publishing revenues of $30,397,000 were derived from a single customer.

Investment gains / (losses)

|  | Three Months Ended January 31, |  |  | Nine Months Ended January 31, |
($ in thousands) |  | 2022 |  |  | 2021 |  |  | Change |  |  | 2022 |  |  | 2021 |  |  | Change |
Dividend income |  | $ | 234 |  |  | $ | 155 |  |  |  | 51.0 | % |  | $ | 640 |  |  | $ | 413 |  |  |  | 55.0 | %
Interest income |  |  | (2 | ) |  |  | 31 |  |  |  | n/a |  |  |  | (1 | ) |  |  | 131 |  |  |  | n/a |
Investment gains/(losses) recognized on sale of equity securities during the period |  |  | (19 | ) |  |  | 141 |  |  |  | n/a |  |  |  | 28 |  |  |  | 585 |  |  |  | -95.2 | %
Unrealized gains/(losses) recognized on equity securities held at the end of the period |  |  | (215 | ) |  |  | 1,456 |  |  |  | n/a |  |  |  | 94 |  |  |  | 1,964 |  |  |  | -95.2 | %
Other |  |  | (1 | ) |  |  | 2 |  |  |  | n/a |  |  |  | (2 | ) |  |  | - |  |  |  | n/a |
Total investment gains/(losses) |  | $ | (3 | ) |  | $ | 1,785 |  |  |  | -100 | % |  | $ | 759 |  |  | $ | 3,093 |  |  |  | -75.5 | %

During the nine months ended January 31, 2022, the Company’s investment gains, primarily derived from dividend income, investment gains recognized on sales of equity securities during the period and unrealized gains recognized on equity securities held at the end of the period in fiscal year 2022, were $759,000. During the nine months ended January 31, 2021, the Company’s investment gains, primarily derived from dividend and interest income, investment gains recognized on sales of equity securities during the period and unrealized gains recognized on equity securities held at the end of the period in fiscal year 2021, were $3,093,000. Proceeds from maturities and sales of government debt securities classified as available-for-sale during the nine months ended January 31, 2022 and January 31, 2021, were $2,496,000 and $11,431,000, respectively. Proceeds from the sales of equity securities during the nine months ended January 31, 2022 and January 31, 2021 were $1,202,000 and $7,684,000, respectively.

Effective income tax rate

The overall effective income tax rates, as a percentage of pre-tax ordinary income for the nine months ended January 31, 2022 and January 31, 2021 were 20.94% and 23.03%, respectively. The decrease in the effective tax rate during nine months ended January 31, 2022 as compared to January 31, 2021, is primarily a result of the non-taxable revenue derived from forgiveness of the PPP loan by the SBA (see note 16) and a decrease in the state and local income taxes from 2.30% to 2.11% as a result of changes in state and local income tax allocations, such as the effect of the reduction in the New York State and New York City tax allocation factors, on deferred taxes in fiscal 2022. 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, new interpretations of existing tax laws and rulings and settlements with tax authorities.

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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 between Value Line, Inc. and ABM Industries, Incorporated 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 provided a security deposit represented by a letter of credit in the amount of $469,000 in October 2016. According to the sublease agreement the LOC and restricted cash were reduced to $305,000 in the third quarter of fiscal year 2022. It is to be fully refunded after the sublease ends. This Building became the Company’s new corporate office facility. The Company is required to pay for certain operating expenses associated with the Premises as well as utilities supplied to the Premises. The sublease terms provide for a significant decrease (23% initially) in the Company’s annual rental expenditure taking into account free rent for the first six months of the sublease. Sublandlord provided Value Line a work allowance of $417,000 which accompanied with the six months free rent worth $563,000 was applied against the Company’s obligation to pay rent at our NYC headquarters, delaying the actual rent payments until November 2017.

On February 29, 2016, the Company’s subsidiary VLDC and Seagis Property Group LP (the “Landlord”) entered into a lease agreement, pursuant to which VLDC has leased 24,110 square feet of warehouse and appurtenant office space located at 205 Chubb Ave., Lyndhurst, NJ (“Warehouse”) beginning on May 1, 2016 and ending on April 30, 2024 (“Lease”). Base rent under the Lease is $192,880 per annum payable in equal monthly installments on the first day of each month, in advance during fiscal year 2017 and will gradually increase to $237,218 in fiscal year 2024, subject to customary increases based on operating costs and real estate taxes. The Company provided a security deposit in cash in the amount of $32,146, which will be fully refunded after the lease term expires. The lease is a net lease requiring the Company to pay for certain operating expenses associated with the Warehouse as well as utilities supplied to the Warehouse.

Liquidity and Capital Resources

The Company had working capital, defined as current assets less current liabilities, of $36,015,000 as of January 31, 2022 and $23,312,000 as of April 30, 2021. These amounts include short-term unearned revenue of $17,392,000 and $19,162,000 reflected in total current liabilities at January 31, 2022 and April 30, 2021, respectively. Cash and short-term securities were $57,822,000 and $45,353,000 as of January 31, 2022 and April 30, 2021, respectively.

The Company’s cash and cash equivalents include $29,081,000 and $18,209,000 at January 31, 2022 and April 30, 2021, respectively, invested primarily in commercial banks and in 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.

Cash from operating activities

The Company had cash inflows from operating activities of $19,627,000 during the nine months ended January 31, 2022, compared to cash inflows from operations of $10,355,000 during the nine months ended January 31, 2021, respectively. The increase in cash flows from fiscal 2021 to fiscal 2022 is primarily attributable to higher net income, an increase in cash receipts from EAM, the timing of customers’ payments and the timing of Federal Income tax payments.

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Cash from investing activities

The Company had cash outflows from investing activities of $1,614,000 during the nine months ended January 31, 2022, compared to cash inflows from investing activities of $7,954,000 for the nine months ended January 31, 2021, respectively. Cash outflows for the nine months ended January 31, 2022, were primarily due to decrease in sales of equity and fixed income securities in fiscal year 2022.

Cash from financing activities

During the nine months ended January 31, 2022, the Company’s cash outflows from financing activities were $7,439,000, compared to cash outflows from financing activities of $7,081,000 for the nine months ended January 31, 2021. During the nine months ended January 31, 2022, cash outflows for financing activities included $1,322,000 for the repurchase of 34,007 shares of the Company’s common stock under the April 17, 2020 and July 16, 2021 board approved common stock repurchase programs. Quarterly dividend payments of $0.22 per share during fiscal year 2022 aggregated $6,307,000. Quarterly regular dividend payments of $0.21 per share during fiscal year 2021 aggregated $6,056,000.

At January 31, 2022 there were 9,529,163 common shares outstanding as compared to 9,579,640 common shares outstanding at January 31, 2021. 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 the proceeds from the SBA PPP loan, which debt has been forgiven and the future cash flows from operations and from the Company’s non-voting revenues and non-voting profits interests in EAM will be sufficient to finance current and forecasted liquidity needs for the next twelve months. Management does not anticipate making any additional borrowings during the next twelve months. As of January 31, 2022, retained earnings and liquid assets were $86,216,000 and $57,822,000, respectively. As of April 30, 2021, retained earnings and liquid assets were $72,502,000 and $45,353,000, 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.

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. Our disclosures of critical accounting policies are reported in the Company’s Annual Report on Form 10-K for fiscal year ended April 30, 2021.

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Market Risk Disclosures

The Company’s Consolidated Condensed Balance Sheet includes a substantial amount of assets whose fair values are subject to market risks. The Company’s market risks are primarily associated with interest rates and equity price risk. The following sections address the significant market risks associated with the Company’s investment activities.

Interest Rate Risk

The Company’s strategy has been to acquire debt securities with low credit risk. Despite this strategy management recognizes and accepts the possibility that losses may occur. To limit the price fluctuation in these securities from interest rate changes, the Company’s management invests primarily in short-term obligations maturing within one year.

The fair values of the Company’s fixed maturity investments will fluctuate in response to changes in market interest rates. Increases and decreases in prevailing interest rates generally translate into decreases and increases in fair values of those instruments. Additionally, fair values of interest rate sensitive instruments may be affected by prepayment options, relative values of alternative investments, and other general market conditions.

Fixed income securities consist of securities issued by federal, state and local governments within the United States. As of January 31, 2022 the aggregate cost and fair value of fixed income securities classified as available-for-sale were $598,000 and $597,000, respectively. As of April 30, 2021 the aggregate cost and fair value of fixed income securities classified as available-for-sale were $2,596,000 and $2,600,000, respectively.

The following table summarizes the estimated effects of hypothetical increases and decreases in interest rates on assets that are subject to interest rate risk. It is assumed that the changes occur immediately and uniformly to each category of instrument containing interest rate risks. The hypothetical changes in market interest rates do not reflect what could be deemed best or worst case scenarios. Variations in market interest rates could produce significant changes in the timing of repayments due to prepayment options available. For these reasons, actual results might differ from those reflected in the table.

Fixed Income Securities

|  | Estimated Fair Value after |
|  | Hypothetical Change in Interest Rates |
|  | (in thousands) |
|  | (bp = basis points) |
|  |  |  |  |  | 1 year |  |  | 1 year |  |  | 1 year |  |  | 1 year |
|  | Fair |  |  | 50 bp |  |  | 50 bp |  |  | 100 bp |  |  | 100 bp |
|  | Value |  |  | increase |  |  | decrease |  |  | increase |  |  | decrease |
As of January 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investments in securities with fixed maturities |  | $ | 597 |  |  |  | n/a |  |  |  | n/a |  |  |  | n/a |  |  |  | n/a |
As of April 30, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investments in securities with fixed maturities |  | $ | 2,600 |  |  |  | n/a |  |  |  | n/a |  |  |  | n/a |  |  |  | n/a |

Management regularly monitors the maturity structure of the Company’s investments in debt securities in order to maintain an acceptable price risk associated with changes in interest rates.

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Equity Price Risk

The carrying values of investments subject to equity price risks are based on quoted market prices as of the balance sheet dates. Market prices are subject to fluctuation and, consequently, the amount realized in the subsequent sale of an investment may significantly differ from the reported market value. Fluctuation in the market price of a security may result from perceived changes in the underlying economic characteristics of the issuer, the relative price of alternative investments and general market conditions. Furthermore, amounts realized in the sale of a particular security may be affected by the relative quantity of the security being sold.

The Company’s equity investment strategy has been to acquire equity securities across a diversity of industry groups. The portfolio consists of ETFs held for dividend yield that attempt to replicate the performance of certain equity indexes and ETFs that hold preferred shares primarily of financial institutions. In order to maintain liquidity in these securities, the Company’s policy has been to invest in and hold in its portfolio, no more than 5% of the approximate average daily trading volume in any one issue.

As of January 31, 2022 and April 30, 2021, the aggregate cost of the equity securities, which consist of investments in the SPDR Series Trust S&P Dividend ETF (SDY), First Trust Value Line Dividend Index ETF (FVD), Invesco Financial Preferred ETF (PGF), ProShares Trust S&P 500 Dividend Aristocrats ETF (NOBL), iShares Preferred & Income Securities ETF (PFF), and other Exchange Traded Funds and common stock equity securities was a combined total $22,746,000 and $19,105,000, respectively, and the fair value was $27,316,000 and $23,582,000, respectively.

Equity Securities |  |  |  |  |  |  |  | Estimated Fair Value after |  |  | Hypothetical Percentage |
|  |  |  |  |  | Hypothetical |  | Hypothetical |  |  | Increase (Decrease) in |
($ in thousands) |  |  | Fair Value |  | Price Change |  | Change in Prices |  |  | Shareholders’ Equity |
As of January 31, 2022 | Equity Securities and ETFs held for dividend yield |  | $ | 27,316 |  | 30% increase |  | $ | 35,512 |  |  |  | 7.64 | %
|  |  |  |  |  | 30% decrease |  | $ | 19,122 |  |  |  | -7.64 | %

Equity Securities |  |  |  |  |  |  |  | Estimated Fair Value after |  |  | Hypothetical Percentage |
|  |  |  |  |  | Hypothetical |  | Hypothetical |  |  | Increase (Decrease) in |
($ in thousands) |  |  | Fair Value |  | Price Change |  | Change in Prices |  |  | Shareholders’ Equity |
As of April 30, 2021 | Equity Securities and ETFs held for dividend yield |  | $ | 23,582 |  | 30% increase |  | $ | 30,657 |  |  |  | 7.81 | %
|  |  |  |  |  | 30% decrease |  | $ | 16,507 |  |  |  | -7.81 | %

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Item 4. CONTROLS AND PROCEDURES

| (a) | The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) that are designed to ensure that information required to be disclosed in the Company’s reports filed with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding disclosure.

The Company’s management has evaluated, with the participation of the Company’s Principal Executive Officer and Principal Financial Officer, the effectiveness of the Company’s disclosure controls and procedures, (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

| (b) | The registrant’s Principal Executive Officer and Principal Financial Officer have determined that there have been no changes in the registrant’s internal control over financial reporting that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Part II – OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

In Part II, Item 1A of this Quarterly Report on Form 10-Q for the period ended January 31, 2022 new risk factors have been added to the risk factors disclosed in Item 1A - Risk Factors in the Company's Annual Report on Form 10-K for the year ended April 30, 2021 filed with the SEC on July 29, 2021. The new risk factors reflect management's continuing analysis of developments in the Company's business environment, rather than any specific event or particular issue.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

| (a) | Purchases of Equity Securities by the Company

The following table provides information with respect to all repurchases of common stock made by or on behalf of the Company during the fiscal quarter ended January 31, 2022. All purchases listed below were made in the open market at prevailing market prices.

|  | ISSUER PURCHASES OF EQUITY SECURITIES |
|  | (a) Total Number of Shares (or Units) Purchased |  |  | (b) Average Price Paid per Share (or Unit) |  |  | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs |  |  | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs |
November 1 - 30, 2021 |  |  | 6,074 |  |  | $ | 41.54 |  |  |  | 6,074 |  |  | $ | 1,394,000 |
December 1 - 31, 2021 |  |  | 3,944 |  |  |  | 41.88 |  |  |  | 3,944 |  |  |  | 1,229,000 |
January 1 - 31, 2022 |  |  | 7,400 |  |  |  | 52.35 |  |  |  | 7,400 |  |  |  | 841,000 |
Total |  |  | 17,418 |  |  | $ | 46.21 |  |  |  | 17,418 |  |  | $ | 841,000 |
March 14, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 2,000,000 |

All shares were repurchased pursuant to authorization of the Board of Directors.

On July 16, 2021, the Company's Board of Directors approved a share repurchase program authorizing the repurchase of shares of the Company’s common stock up to an aggregate purchase price of $2,000,000. On March 14, 2022, the Board reviewed the program and approved a refreshed authorization again in the maximum amount of $2,000,000. The repurchases may be made from time to time on the open market at prevailing market prices, in negotiated transactions off the market, in block purchases or otherwise. The repurchase program may be suspended or discontinued at any time at the Company’s discretion and has no set expiration date.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

31.1 | Certificate of Principal Executive Officer Required Under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 | Certificate of Principal Financial Officer Required Under Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 | Joint Principal Executive Officer/Principal Financial Officer Certificate Required Under Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS | Inline XBRL Instance Document
101.SCH | Inline XBRL Taxonomy Extension Schema Document
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 | The cover page of this Quarterly Report on Form 10-Q, formatted in inline XBRL (including Exhibit 101).

34

VALUE LINE, INC.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Value Line, Inc.

(Registrant)

| By: | /s/ Howard A. Brecher |
|  | Howard A. Brecher |
|  | Chief Executive Officer |
|  | (Principal Executive Officer) |
| By: | /s/ Stephen R. Anastasio |
|  | Stephen R. Anastasio |
|  | Vice President & Treasurer |
|  | (Principal Financial Officer) |

Date: March 16, 2022

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