The interim consolidated condensed financial statements of Value Line, Inc., together with its subsidiaries (collectively referred to as the “Company”), are unaudited.  In the opinion of management, the accompanying unaudited 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 financial statements and footnotes contained in the Company's annual report on Form 10-K, dated July 16, 2009  for the fiscal year ended April 30, 2009. Results of operations covered by this report may not be indicative of the results of operations for the entire year.

Value Line, Inc. (the "Company", "VLI") is incorporated in the State of New York.  The Company's primary businesses are producing investment related periodical publications and making available copyright data including certain Value Line trademarks and Value Line proprietary ranking system information to third parties under written agreements for use in third party managed and marketed investment products, providing investment management services to the Value Line Funds, institutions and individual accounts and providing distribution, marketing, and administrative services to the Value Line Funds.  The name "Value Line" as used to describe the Company, its products, and its subsidiaries, is a registered trademark of the Company.

Principles of consolidation:  The consolidated condensed financial statements include the accounts of the Company and all of its subsidiaries.  All significant intercompany accounts and transactions have been eliminated in consolidation.

Accounting Standards Codification (ASC):

Revenue Recognition:

Depending upon the product, subscription fulfillment is available in print, via Internet access  and CD-ROM.  The length of a subscription varies by product and offer received by the subscriber.  Generally, subscriptions are available as trial subscriptions, annual subscriptions and/or multi-year subscriptions.  Subscription revenues are recognized on a straight line basis over the life of the subscription.  Accordingly, the amount of subscription fees to be earned by fulfilling subscriptions after the date of the balance sheet is shown as unearned revenue within current and long-term liabilities. Changes in unearned revenue generally indicate the trend for subscription revenues over the following year as the current portion of deferred revenue is expected to be recognized as revenue within 12 months.

Copyright data revenues are derived from providing certain Value Line trademarks and Value Line proprietary ranking system information 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.  Value Line earns asset based copyright data fees as specified in the individual agreements.  Revenue is recognized monthly over the term of the agreement and will fluctuate as the market value of the underlying portfolio increases or decreases in value.

Investment management fees consist of management fees from the Value Line Mutual Funds ("Value Line Funds"), and from asset management clients.  Investment management fees for the mutual funds are earned on a monthly basis as services are performed and the fee is calculated based on average daily net assets of the mutual funds in accordance with each fund's advisory agreement.  Investment management fees for the asset management accounts are earned on a monthly basis as services are performed and the fee is calculated on assets in accordance with each of the management agreements (see  Note 6).

The management fees and average daily net assets for the Value Line Funds are calculated by State Street Bank, which serves as the fund accountant, fund administrator, and custodian of the Value Line Funds. The management fees for the non-mutual fund asset management clients are calculated by the Company based on the asset valuations provided by third party custodians.

The Value Line Funds are open-end management companies registered under the Investment Company Act of 1940.   Shareholder transactions for the Value Line Mutual Funds are processed each business day by the third party transfer agent of the Funds.  Shares can be redeemed without advance notice upon request of the shareowners each day that the New York Stock Exchange is open.  Assets within the separately managed accounts are held at third party custodians, are subject to the terms of each advisory agreement and do not have any advance notice requirement for withdrawals, although they generally have a 30 day advance notice requirement for termination of the account.

Service and distribution fees are received from the Value Line Funds in accordance with service and distribution plans under rule 12b-1 of the Investment Company Act of 1940.  The plans are compensation plans, which means that the distributor’s fees under the plans are payable without regard to actual expenses incurred by the distributor, and therefore the distributor may earn a profit under the plan.  Expenses incurred by EULAV Securities, Inc. ("ESI") (formerly, Value Line Securities, Inc. ("VLS")), the distributor of the Value Line Funds, include payments to securities dealers, banks, financial institutions and other organizations (including an allocation of VLI expenses), that provide distribution, marketing, and administrative services with respect to the distribution of the Value Line Funds.  Service and distribution fees are received on a monthly basis and calculated on the average daily net assets of the respective mutual fund in accordance with each fund prospectus (see Note 6).

Valuation of Securities:

The Company's securities classified as available for sale consist of shares of the Value Line Funds and government debt securities accounted for in accordance with the requirements of the "Fair Value Measurements Topic of the Financial Accounting Standards Board Accounting Standards Codification (FASB(FASB’s ASC)".  The securities available for sale and trading securities reflected in the consolidated condensed financial statements are valued at market and unrealized gains and losses on securities classified as available for sale, net of applicable taxes, are reported as a separate component of Shareholders' Equity. Unrealized gains and losses on trading securities are included in the Statement of Income. Realized gains and losses on sales of the securities classified as available for sale are recorded in earnings on the trade date and are determined on the identified cost method.

The Company classifies its securities available for sale as current assets. It does so to properly reflect its liquidity and to recognize the fact that it has assets available for sale to fully satisfy its current liabilities should the need arise.

Market valuation of securities listed on a securities exchange is based on the closing sales prices on the last business day of each month. Valuation of open-end mutual fund shares is based upon the publicly quoted net asset value of the shares. The market value of the Company's fixed maturity government debt obligations are determined utilizing publicly quoted market prices or other observable inputs.

Effective for fiscal 2009, the Company adopted the Fair Value Measurements Topic of the FASB Accounting Standards Codification that 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 investmentsinvestments.

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 valuation techniques used by the Company to measure fair value during the sixnine months ended OctoberJanuary 31, 20092010 for Level 1 securities consisted exclusively of quoted prices.

The securities valued as Level 2 investments consist of municipal bonds (that are pre-refunded by U.S. Treasury securities) and other U.S. Treasury securities. Valuation techniques used by the Company to measure fair value for government securities during the period consisted primarily of third party pricing services that utilized actual market data such as trades of comparable bond issues, broker/dealer quotations for the same or similar investments in active markets and other observable inputs.  When necessary, the third party services use discounted future cash flows to calculate the net present value.

The following is a summary of the inputs used as of OctoberJanuary 31, 20092010 in valuing the Company’s investments carried at fair value:

The Company had no other financial instruments including futures, forwards and swap contracts. For the period ended OctoberJanuary 31, 2009,2010, there were no Level 3 investments. The Company does not have any liabilities subject to Fair Value Measurement.

Advertising expenses:  The Company expenses advertising costs as incurred.

Reclassification:  Certain items in the prior year financial statements have been reclassified to conform to the current year presentation.

Income Taxes:

The Company computes its income tax provision in accordance with the Income Tax Topic of the FASBFASB’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 Income Tax Topic of the FASBFASB’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 OctoberJanuary 31, 2009,2010, 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 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 year.

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 OctoberJanuary 31, 2010, and April 30, 2009 cash equivalents included $60,575,000$13,805,000 and $42,068,000, respectively, invested in the Value Line U.S. Government Money Market Fund.  The Value Line Cash Fund was renamed the U.S. Government Money Market Fund in August 2009.

Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Securities held by the Company are classified as Trading Securities and Available-for-Sale Securities. All securities held in ESI, as a broker/dealer, are classified as trading securities.  Securities held by the Company and its other subsidiaries, are classified as available-for-sale securities.

Trading securities held by the Company at OctoberJanuary 31, 2009 that2010 consisted entirely of government debt securities and had an amortized cost of $6,928,000$6,270,000 and a market value of $7,035,000.$6,375,000. Trading securities held by the Company at April 30, 2009 had an aggregate cost of $17,133,000 and a market value of $17,203,000. The proceeds from sales of trading securities during the sixnine months ended OctoberJanuary  31, 20092010 were $9,894,000$10,511,000 and the related net realized trading gains amounted to $94,000. The proceeds from sales of trading securities during the sixnine months ended OctoberJanuary 31, 20082009, were $9,026,000 and the related total realized capital losses net realized trading lossesof capital gains amounted to $126,000. The net changeincrease in unrealized gains of $35,000 and the decrease in unrealized losses of $81,000 for the periodperiods ended OctoberJanuary 31, 2009,2010, and OctoberJanuary 31, 2008, of $200,000 and $197,000,2009, respectively, were included in the Consolidated Condensed Statement of Income.

The Company sold its portfolio of equity securities during the second quarter ended October 31, 2008 and did not hold any equity securities as of OctoberJanuary 31, 2009,2010 and April 30, 2009.

During the sixnine months ended OctoberJanuary 31, 2008,2009, proceeds of $37,755,000 were received from sales of equity securities.  During the second quarter of fiscal 2009, $9,600,000 of net capital gains were reclassified from Accumulated Other Comprehensive Income to the Consolidated Condensed Statement of Income.

Government debt securities consist of federal, state, and local government securities within the United States. The aggregate cost and fair value at OctoberJanuary 31, 20092010 for government debt securities classified as available for sale were as follows:

The decrease in gross unrealized gain on fixed income securities classified as available for sale of $65,000$119,000 net of deferred income tax of $23,000,$42,000, was included in Accumulated Other Comprehensive Income on the Consolidated Condensed Balance Sheets as of OctoberJanuary 31, 2009.2010. The increase in gross unrealized gain on fixed income securities classified as available for sale of $625,000 net of deferred income tax of $220,000, was included in Accumulated Other Comprehensive Income on the Consolidated Condensed Balance Sheets as of April 30, 2009.

The average yield on the Government debt securities classified as available for sale at OctoberJanuary 31, 20092010 and April  30, 2009 was 2.29%1.25% and 2.52%, respectively.

Proceeds from sales of government debt securities classified as available for sale during the sixnine months ended OctoberJanuary 31, 2010 and 2009 were $30,206,000 and 2008 were $26,502,000 and $14,669,000,$28,603,000, respectively. During the sixnine months ended OctoberJanuary 31, 2010 and 2009,  and 2008,capital losses on sales of fixed income securities of $20,000 and $85,000,$312,000, respectively, were reclassified from Accumulated Other Comprehensive Income in the Balance Sheet to the Consolidated Condensed Statement of Income.

For the sixnine months ended OctoberJanuary 31, 20092010 and 2008,2009, income from securities transactions also included $3,000 and $156,000$215,000 of dividend income; $526,000income and $1,388,000$728,000 and $2,208,000 of interest income, net of bond amortization.

Cash payments for income taxes were $2,400,000$2,401,000 and $8,946,000$10,305,000 for the sixnine months ended OctoberJanuary 31, 20092010 and 2008,2009, respectively.

Substantially all employees of the Company and its subsidiaries are members of the Value Line, Inc. Profit Sharing and Savings Plan (the "Plan"“Plan”).  In general, this is a qualified, contributory plan that provides for a discretionary annual Company contribution.

The Financial Accounting Standards Board 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.

At OctoberJanuary 31, 20092010 and 2008,2009, the Company held both equity securities and U.S. Government debt securities that are classified as Available for Sale on the Consolidated Condensed Balance Sheets. The change in valuation of these securities, net of deferred income taxes, has been recorded in Accumulated Other Comprehensive Income in the Company'sCompany’s Balance Sheets.

The components of comprehensive income that are included in the Statement of Changes in Shareholders'Shareholders’ Equity are as follows:

The Company's subsidiary, EULAV Asset Management, LLC ("EULAV") acts as investment adviser and manager for fourteen open-end investment companies, the Value Line Funds.  EULAV earns investment management fees based upon the average daily net asset values of the respective Value Line Funds.  As discussed in Note 1, service and distribution fees are received by ESI from the Value Line Funds in accordance with service and distribution plans under rule 12b-1 of the Investment Company Act of 1940.  The plans are compensation plans, which means that the distributor’s fees under the plans are payable without regard to actual expenses incurred by the distributor, and therefore the distributor may earn a profit under the plans.  Expenses incurred by ESI include payments to securities dealers, banks, financial institutions and other organizations which provide distribution, marketing, and administrative services (including payments by ESI to VLI for allocated compensation and administration expenses) with respect to the distribution of the mutual funds’ shares.  Service and distribution fees are received on a monthly basis and calculated on the daily net assets of the respective mutual fund in accordance with each fund's prospectus.

For the sixnine months ended OctoberJanuary 31, 20092010 and 2008,2009, investment management fees and 12b-1 service and distribution fees amounted to $9,468,000$14,237,000 and $14,825,000,$19,763,000, respectively, which took into account fee waivers for certain of the Value Line Funds. These amounts included service and distribution fees of $2,083,000$3,140,000 and $3,362,000$4,447,000 earned by ESI during the sixnine months ended OctoberJanuary 31, 20092010 and 2008,2009, respectively. The related receivables from the funds for investment management fees and service and distribution fees included in Receivables from affiliates were $1,656,000$1,603,000 and $1,475,000 at OctoberJanuary 31, 2010, and April 30, 2009, respectively.

For the sixnine months ended OctoberJanuary 31, 20092010 and 2008,2009, total management fee waivers were $436,000$652,000 and $101,000,$142,000, respectively, and service and distribution fee waivers were $1,361,000$2,020,000 and $1,658,000,$2,280,000, respectively. The Company and its subsidiary, ESI, have no right to recoup the previously waived amounts of management fees and 12b-1 fees, excludingexcept for waived management fees for the U.S. Government Money Market Fund.  Any recoupment is subject to the provisions of the prospectus.

As of OctoberJanuary 31, 2009,2010, the Company had $60,575,000$13,805,000 invested in the Value Line U.S. Government Money Market Fund representing 31%11% of the fund's assets and 2%less than 1% of all Value Line Funds assets. Purchases and redemptions routinely occur in the Value Line U.S. Government Money Market Fund as part of business operations of the Company.

For the sixnine months ended OctoberJanuary 31, 20092010 and 2008,2009, the Company was reimbursed $339,000$1,471,000 and $653,000,$893,000, respectively, for payments it made on behalf of and services it provided to the Parent. At OctoberJanuary 31, 2009,2010, the Receivables from the Parent amounted to $63,000.$295,000. At April 30, 2009, Receivables from affiliates were reduced by the Payables to the Parent in the amount of $164,000. These transactions are in accordance with the expense sharing agreement with the parent and tax sharing arrangementagreement as described in Note 7.

From time to time, Arnold Bernhard & Co., Inc. (the "Parent") has purchased additional shares of the Company in the market when and as the Parent has determined it to be appropriate.  As stated several times in the past, the public is reminded that the Parent may make additional purchases from time to time in the future. The Parent owns approximately 86.5% of the issued and outstanding common stock of the Company.

The Company computes its income tax provision in accordance with the requirements of the Income Tax Topic of the FASBFASB’s ASC.

Deferred income taxes are provided for temporary differences between the financial reporting basis and the tax basis of the Company'sCompany’s assets and liabilities.  The tax effect of temporary differences giving rise to the Company'sCompany’s deferred tax assets is primarily the result of the tax benefit from its net operating loss to be utilized within the next year.by fiscal year ended April 30, 2011.

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

The overall effective income tax rate, as a percentage of pre-tax ordinary income, for the sixnine months ended OctoberJanuary 31, 2010 and 2009 was 25.08% and 2008 was 25.11% and 36.17%35.53%, respectively. The fluctuation in the effective income tax rate is attributable to the non-deductible portion of the provision for settlement and non-taxable investment income, events that do not have tax consequences, recorded during the sixnine months ended OctoberJanuary 31, 2009.2010.

The annual effective tax rate for fiscal 2010 could change due to a number of factors including but not limited to an increase or decrease in the ratio of income or loss to pre-tax items that doesdo not have tax consequences, our geographic profit mix between tax jurisdictions, new tax laws, new interpretations of existing tax law and rulings by and settlements with tax authorities. For the sixnine months ended OctoberJanuary 31, 2009,2010, there were no new material uncertain tax positions.

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

The Company is included in the consolidated federal income tax return of the Parent.  The Company has a tax sharing arrangementagreement which requires it to make tax payments to the Parent equal to the Company's liability as if it filed a separate return.

The Company operates two reportable business segments: (1) Investment Periodicals, Publishing & Copyright Data and (2) Investment Management. The Investment Periodicals, Publishing & Copyright Data segment produces investment related periodical publications (retail and institutional) in both print and electronic form, and includes copyright data fees for Value Line proprietary ranking system information and other proprietary information. The Investment Management segment provides advisory services to the Value Line Funds, as well as institutional and individual accounts. The segments are differentiated by the products and services they offer. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company allocates all revenues and expenses, except for depreciation and income from securities transactions related to corporate assets, between the two reportable segments.