UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C.  20549





FORM
10-K


(Mark
One)


x ANNUAL REPORT PURSUANT
TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the
fiscal year ended April 30,
2009


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.)220 East 42nd Street, New York, New
      York
                    10017-5891(Address
      of principal executive offices)
                    (Zip
      Code)





Registrant's
telephone number, including area code (212)
907-1500





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


Common Stock, $.10 par
value
                  The
      NASDAQ Global MarketSM(Title
      of class)
                  (Name
      of each exchange on which
registered)





Securities
registered pursuant to Section 12(g) of the Act:  None





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.     ̈ Yes x No





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. ̈ Yes x No





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.x Yes  ̈ No


Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted 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 and post such files). Yes  ̈ No  ̈





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulations S-K (§229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. x





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See definition of “large accelerated filer,” “accelerated
filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange
Act.  (Check one):





Large
accelerated filer  ̈           Accelerated
filer  ̈           Non-accelerated
filer x           Smaller
reporting company  ̈





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes  ̈  No x





The
aggregate market value of the registrant's voting and non-voting common stock
held by non-affiliates at October 31, 2008 was $50,841,543.





There
were 9,981,600 shares of the registrant’s Common Stock outstanding at June 30,
2009.





DOCUMENTS
INCORPORATED BY REFERENCE





Portions of the registrant’s
Proxy Statement relating to the registrant’s 2009 Annual Meeting of
Shareholders, to be held on


September 10, 2009 are
incorporated by reference into Part III of this Annual Report on Form 10-K where
indicated.















TABLE OF
CONTENTS




PART
      IItem
      1
                  Business
                  3Item
      1A
                  Risk
      Factors
                  12Item
      1B
                  Unresolved
      Staff Comments
                  15Item
      2
                  Properties
                  15Item
      3
                  Legal
      Proceedings
                  15Item
      4
                  Submission
      of Matters to a Vote of Security Holders
                  15PART
      IIItem
      5
                  Market
      for Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities
                  15Item
      6
                  Selected
      Financial Data
                  16Item
      7
                  Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                  17Item
      7A
                  Quantitative
      and Qualitative Disclosures About Market Risk
                  26Item
      8
                  Financial
      Statements and Supplementary Data
                  28Item
      9
                  Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
                  29Item
      9A
                  Controls
      and Procedures
                  29Item
      9B
                  Other
      Information
                  30PART
      IIIItem
      10
                  Directors,
      Executive Officers, and Corporate Governance
                  31Item
      11
                  Executive
      Compensation
                  32Item
      12
                  Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                  33Item
      13
                  Certain
      Relationships and Related Transactions and Director
      Independence
                  34Item
      14
                  Principal
      Accounting Fees and Services
                  35PART
      IVItem
      15
                  Exhibits
      and Financial Statement Schedules
                  35EXHIBIT
      14EXHIBIT
      21.1EXHIBIT
      31.1EXHIBIT
      31.2EXHIBIT
      32.1EXHIBIT
      32.2




2




Safe
Harbor Statement under the Private Securities Litigation Reform Act of
1995





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.  Actual results may differ materially from those
projected as a result of certain risks and uncertainties, including but not
limited to the following:





·
            dependence
      on key personnel;


·
            maintaining
      revenue from subscriptions for the Company’s
  products;


·
            protection
      of intellectual property rights;


·
            changes
      in market and economic conditions;


·
            fluctuations
      in the Company’s assets under management due to broadly based changes in
      the values of equity and debt securities, redemptions by investors and
      other factors;


·
            dependence
      on Value Line Funds for investment management and related
      fees;


·
            competition
      in the fields of publishing, copyright data and investment
      management;


·
            the
      impact of government regulation on the Company’s business and the
      uncertainties of litigation and regulatory
  proceedings;


·
            terrorist
      attacks; and


·
            other
      risks and uncertainties, including but not limited to the risks described
      in Item 1A, “Risk Factors”, and other risks and uncertainties from time to
      time.





Any
forward-looking statements are made only as of the date hereof, and the Company
undertakes no obligation to update or revise the forward-looking statements,
whether as a result of new information, future events or otherwise.





Part
I


Item 1.
BUSINESS.




Value
Line, Inc. (the "Company" or “Value Line”), is a New York corporation whose
primary businesses are: (1) producing investment related periodical publications
and making available copyrighted data, including Value Line proprietary ranking
system information and other proprietary information under agreements to third
parties for use in selecting securities for third party marketed products, such
as unit investment trusts, closed-end fund products and exchange traded funds,
and (2) providing investment management services to the Value Line Funds and
other managed accounts. These businesses are performed through the Company and
its subsidiaries and consolidate into two business segments: (1) Investment
Periodicals, Related Publications and Copyright Data and (2) Investment
Management.





The
Company was organized in 1982 and is the successor to substantially all of the
operations of Arnold Bernhard & Company, Inc. ("AB&Co."). The name
"Value Line" as used to describe the Company, its products, and its
subsidiaries, is a registered trademark of the Company.





A.  Investment
Related Periodicals & Publications





The
investment related periodicals offered by Value Line Publishing Inc. (“VLP”), a
wholly owned subsidiary of the Company, cover a broad spectrum of investments
including stocks, mutual funds, options and convertible securities. The
Company’s services are of interest to individual and professional investors, as
well as to institutions including municipalities and university libraries and
investment firms.





The
services generally fall into four categories:





·
            Comprehensive
      reference periodical publications


·
            Targeted,
      niche periodical newsletters


·
            Investment
      analysis software


·
            Current
      and historical financial databases




3




The
comprehensive services (The Value Line Investment Survey, The Value Line
Investment Survey-Small and Mid-Cap Edition, The Value Line 600, and The Value
Line Fund Advisor Plus) provide both statistical and text coverage of a large
number of investment securities, with an emphasis placed on Value Line’s
proprietary statistical rankings.  The Value Line Investment Survey is
the Company’s premier service published each week and covering approximately
1,700 stocks.





The
niche newsletters (Value Line Select, The Value Line Special Situations Service,
The Value Line Fund Advisor, The Value Line Convertibles Survey and Value Line
Daily Options Survey) provide information on a less comprehensive basis for
securities that the Company believes will be of interest to
subscribers.  Certain of these services make use of Value Line’s
proprietary statistical rankings.





Investment
analysis software (The Value Line Investment Analyzer and Mutual Fund Survey for
Windows®) includes data sorting and filtering tools.  In addition, for
institutional and professional subscribers, VLP offers current and historical
financial databases (DataFile, Estimates & Projections, Convertibles and
Mutual Funds) via CD-ROM or online.





Value
Line offers online versions of most of its products at the Company’s website,
www.valueline.com.  Subscribers to the print versions generally
receive free access to the corresponding online versions, but online subscribers
do not receive a free print edition.  The most comprehensive of the
Company’s online efforts is The Value Line Research Center, which allows
subscribers to access most of the investment services the Company publishes at a
packaged price via the Internet.





The
print and electronic services include, but are not limited to the
following:





The
Value Line Investment Survey®


The
Value Line Investment Survey is a weekly investment related periodical that in
addition to various timely articles on current economic, financial and
investment matters ranks common stocks for future relative performance based
primarily on computer-generated statistics of financial results and stock price
performance.  Two of the evaluations for covered stocks are
"TimelinessTM" and "SafetyTM.”  Timeliness relates to the probable
relative price performance of one stock over the next six to twelve months, as
compared to the rest of the approximately 1,700 covered
stocks.  Rankings are updated each week and range from Rank 1 for the
expected best performing stocks to Rank 5 for the expected poorest
performers.  "Safety" Ranks are a measure of risk and are based on the
issuer's relative financial strength and its stock's price
stability.  "Safety" ranges from Rank 1 for the least risky stocks to
Rank 5 for the riskiest.  VLP employs analysts and statisticians who
prepare articles of interest for each periodical and who evaluate stock
performance and provide future earnings estimates and quarterly written
evaluations with more frequent updates when relevant.  The Value Line
Investment Surveyis also referred to as
The Value Line Investment Survey – Standard Edition.





The
Value Line Investment Survey - Small and Mid-Cap Edition


The
Value Line Investment Survey - Small and Mid-Cap Edition is a weekly publication
introduced in 1995 that provides detailed descriptions of approximately 1,800
small and medium-capitalization stocks, many listed on NASDAQ, beyond the
approximately 1,700 stocks of generally larger-capitalization companies covered
in The Value Line Investment Survey – Standard Edition.  Like The
Value Line Investment Survey, the Small and Mid-Cap Edition has its own "Summary
& Index" providing updated performance ranks and other data, as well as
"screens" of key financial measures.  The "Ratings and Reports"
section, providing updated reports on about 140 stocks each week, has been
organized to correspond closely to the industries reviewed in The Value Line
Investment Survey – Standard Edition.  A combined Index, published
quarterly, allows subscribers to easily locate a specific stock among the
approximately 3,500 stocks covered.





One
unique feature in the Small and Mid-Cap Edition is The Performance Ranking
System.  It incorporates many of the elements of the Value Line
Timeliness Ranking System, modified to accommodate the approximately 1,800
stocks in the Small and Mid-Cap Edition.  The Performance Rank is
based on earnings growth and price momentum, and is designed to predict relative
price performance over the next six to 12 months.




4




The
principal differences between the Small and Mid-Cap Edition and The Value Line
Investment Survey’s Standard Edition are that the Small and Mid-Cap Edition does
not include Value Line’s Timeliness Ranks, financial forecasts, analyst
comments, or a Selection & Opinion section.  These modifications
allow VLP to offer this service at a relatively low price.





The
Value Line Fund Advisor


The
Value Line Mutual Fund Ranking System was introduced in 1993.  It is
the system utilized in the Fund Advisorproduct, a
48-page newsletter featuring load, no-load, and low-load open-end mutual funds.
This product was originally introduced as The Value Line No-Load Fund Advisor in
1994 and augmented in 2009. Each issue offers strategies for maximizing total
return, and model portfolios for a range of investor profiles.  It
also includes information about retirement planning, industry news, and specific
fund reviews.  A full statistical review, including latest
performance, rankings, and sector weightings, is updated each month on
approximately 800 leading load, no-load and low-load funds. Included with this
product is online access to Value Line’s database of more than 12,000 mutual
funds, including screening tools and full-page printable reports on each fund.
Fund Advisor Plus subscribers have access to the entire population of more than
18,000 funds.





The
Value Line Special Situations Service


The
Value Line Special Situations Service’s core focus is on smaller companies whose
stocks are perceived by Value Line Publishing’s analysts as having exceptional
appreciation potential.  Recently introduced as added value to this
product in spring 2009, was a second portfolio of stocks for more conservative
income-oriented investors seeking small company exposure. The publication was
introduced in 1951.





The
Value Line Daily Options Survey


The
Value Line Options Surveyis an online only
service that evaluates and ranks U.S. equity and equity index options
(approximately 200,000). Features include an interactive database, spreadsheet
tools, and a weekly email newsletter. This product is only online due to the
nature of options volatility and the power of the internet to provide a
materially enhanced product.





The
Value Line Convertibles Survey


Introduced
in 1972, the Value Line Convertibles Survey has also been switched to online
only delivery in 2009. The service evaluates and ranks over 600 convertible
securities (bonds and preferred stocks) for future market
performance.  By moving to online only delivery, all of the product’s
subscribers can benefit from the newly enhanced website that includes daily
price updates, individual analysis of each security with a printable fact sheet,
and a weekly email newsletter alerting subscribers to recent rank
changes.





Value
Line Select


Value
Line Select, a monthly publication, was first published in 1998.  It
focuses each month on a company that senior VLP analysts have
chosen.  Recommendations are backed by in-depth research and are
subject to ongoing monitoring.





The
Value Line 600


The
Value Line 600 is a monthly service, which contains full-page reports on
approximately 600 stocks.  Its reports provide information on many
actively traded, larger capitalization issues as well as some smaller growth
stocks.  Since it was introduced in fiscal 1996, it has been with
investors who want the same type of analysis provided in The Value Line
Investment Survey, but who do not want or need coverage of the approximately
1,700 companies contained in that publication.  Readers also receive
supplemental reports as well as a monthly Index, which includes updated
statistics.





Value
Line Investment Analyzer


Value
Line Investment Analyzer is a powerful menu-driven software program with fast
filtering, ranking, reporting and graphing capabilities utilizing over 300 data
fields for approximately 7,500 stocks, industries and indices, including the
approximately 1,700 stocks covered in VLP’s benchmark publication, The Value
Line Investment Survey.




5




Value Line Investment Analyzer allows subscribers to apply more than 60 charting
and graphing variables for comparative research.  In addition to containing
digital replicas of the entire Value Line Investment Survey, the Analyzer
includes 20-minute delayed data updates through its integration with the Value
Line databases via the Internet.  The software also includes a portfolio
module that lets users create and track their own stock portfolios in depth with
up to five years of historical financial data for scrutinizing performance,
risk, yield and return.




Value
Line Mutual Fund Survey for Windows®


Value
Line Mutual Fund SurveyforWindows®isa monthly CD-ROM product with
weekly Internet updates.  The program features powerful sorting and
filtering analysis tools.  It includes features such as style
attribution analysis, a portfolio stress tester, portfolio rebalancing,
correlation of fund returns and hypothetical assets. For Windows is a
registered trademark of Microsoft Corp. Value Line, Inc. and Microsoft Corp. are
not affiliated companies.





Value
Line DataFile Products


For
our institutional customers, Value Line offers both current and historical data
for equities, mutual funds, and convertibles.  All Value Line DataFile
products are offered in Microsoft Access and ASCII formats via FTP as well as
Internet download via our DataAdvantage front end platform.





Fundamental
DataFile I and II


Value
Line’s Fundamental DataFile I contains fundamental data (both current and
historical) on approximately 8,000 publicly traded companies that follow US
GAAP. This data product provides annual data from 1955, quarterly from 1963, and
full 10-Q data from 1985. Additionally Value Line offers historical data on over
5,000 companies that no longer exist in nearly 100 industries via our “Dead
Company” File. The Fundamental DataFile has over 400 annual and over 80
quarterly fields for each of the companies included in the
database.  DataFile is sold primarily to the institutional and
academic markets.  Value Line also offers a scaled down DataFile
product, the Fundamental DataFile II, which includes a limited set
of  historical fundamental data.





Estimates
and Projections DataFile


This
DataFile offering contains the proprietary estimates from Value Line's security
analysts on approximately 1,700 companies. Data includes earnings, sales, cash
flow, book value, margin, and others popular fields. Projections are for the
year ahead and 3 to 5 year time horizon.





Mutual
Fund DataFile


In
fiscal 1997, VLP introduced the Value Line Mutual Fund DataFile.  It covers
over 20,000 mutual funds with up to 20 years of historical data with over 200
data fields. The Mutual Fund DataFile provides monthly pricing, basic fund
information, weekly performance data, sector weights, and many other popular
mutual fund data fields. This file is available for download on a weekly or
monthly basis.





Convertible
DataFile


This
database is one of the largest sources of information available on convertible
securities. Value Line offers data elements on our universe of more than 600
convertible bonds, preferred stocks, and warrants, with our top 150 fundamental
and proprietary data items on each security.





Value
Line Research Center


The
Value Line Research Center, an Internet-only service, provides on-line access to
certain of VLP’s leading publications covering stocks, mutual funds, and options
and convertible securities as well as special situation stocks.  This
service includes full online subscriptions to The Value Line Investment Survey,
The Value Line Mutual Fund Survey, The Value Line Daily Options Survey, The
Value Line Investment Survey-Small and Mid-Cap Edition, The Value Line Convertibles Survey and The
Value Line Special Situations Service.




6




B.  Copyright Data
Fees Programs (formerly entitled Licensing Fees)





The
Company has copyright data, which it distributes under copyright agreements for
fees including certain proprietary ranking system information and other
proprietary information used in third party products, including unit investment
trusts, annuity trusts, managed accounts and exchange traded
funds.  The sponsors of these products act as wholesalers and
distribute the products by syndicating them through an extensive network of
national and regional brokerage firms.  These broad marketing networks
are assembled and re-assembled each time that a product is introduced into the
retail marketplace by a product sponsor.   The sponsors of these
various products will typically receive copyright data for one or more
proprietary ranking systems, which may include Value Line Timeliness, Safety,
Technical and Performance ranks, as screens for their portfolios.  The
sponsors are also given permission to associate Value Line trademarks with the
products.  Value Line collects a copyrightfee
from each of the product sponsors/managers primarily based upon the market value
of assets invested in each product’s portfolio utilizing the Value Line
proprietary data.  Since these fees are based on the market value of
the respective portfolios using the Value Line proprietary data, the payments to
Value Line, which are typically received on a quarterly basis, will
fluctuate.





Value
Line’s primary copyright products have been structured as Unit Investment
Trusts, Exchange Traded Funds, Closed-end Funds and other types of managed
products, all of which have in common some degree of reliance on ranking systems
for their portfolio creation. Examples of Value Line’s Copyright Data
methodology can be found in the following five Value Line indexed Exchange
Traded Fund portfolios now listed on the New York Stock Exchange:





First
Trust Value Line Dividend Fund (FVD)





The
FVD portfolio seeks to provide total return through a combination of current
income and capital appreciation by investing in stocks selected by the third
party using Value Line’s Copyright Data from among U.S. exchange listed
securities of companies that pay above average dividends and have the potential
for capital appreciation.





First
Trust Value Line 100  (FVL)





FVL’s
objective is to provide capital appreciation.  It seeks to outperform
the S&P 500 Index by adhering to a disciplined strategy of investing in a
diversified portfolio of the 100 common stocks ranked #1 using Value Line's
Copyright Data included in the Timeliness Ranking System. This fund was a closed
end fund that became an ETF in June 2007.





First
Trust Value Line Equity Allocation Fund (FVI)





The
FVI portfolio invests in a subset of the #1 and #2 ranked stocks selected from
Value Line’s Copyright Data per the Value Line Timeliness, Safety, and Technical
Ranking Systems. The third party provided with permission to use the Value Line
Copyright Data purchases stocks in the index generated by the Company with the
objective of capital appreciation.





PowerShares
Value Line Timeliness Select Fund (PIV)





The
PIV portfolio is constructed as an Index of 50 stocks within the 100 Rank #1
Timeliness stocks which factors Value Line Safety and Technical ranks into the
portfolio selection process.





PowerShares
Value Line Industry Rotation Fund (PYH)





The
PYH portfolio contains 50 stocks chosen from the highest ranked stocks for
Timeliness from each of the top 50 industries based on Industry Timeliness
ranks, and the second highest ranked stocks for Timeliness from each of the top
25 industries based on Industry Timeliness ranks. The total number of stocks
held by the Index is 75 stocks.




Total assets managed by third parties
participating in the copyrighted data programs were $2.0 billion as of April 30,
2009, through four clients.




7




C.  Investment
Management Services




As
of April 30, 2009, the Company was the investment adviser for the Value Line
Mutual Funds (“Value Line Funds”), which consists of 14 mutual funds registered
under the Investment Company Act of 1940.  During fiscal 2009, the
investment management business faced extremely difficult market conditions. For
the year ended April 30, 2009, the Dow Jones Industrial Average and S&P 500
stock indexes declined 36% and 37%, respectively. In fixed income markets, the
Barclays Capital U.S. Aggregate Bond Index increased by 3.8% but there was a
continuing dramatic reduction in liquidity and buyers were looking for
investments with minimal risk in many segments of the market.  These
conditions have contributed to a significant reduction in our assets under
management and revenues.





The
Value Line Funds are managed by portfolio managers employed during the year by
the Company or its subsidiary, EULAV Asset Management, LLC (“EULAV”). On June
30, 2008, the Company reorganized its investment management division into EULAV,
a newly formed wholly-owned subsidiary.  As part of the
reorganization, each advisory agreement was transferred from Value Line, Inc. to
EULAV.





EULAV Securities, Inc. (formerly Value Line
Securities, Inc.), a wholly-owned subsidiary of the Company, acts as distributor
for the Value Line Funds.  State Street Bank and Trust Company, an
unaffiliated entity, acts as custodian of the Funds' assets and provides fund
accounting and administrative services to the Value Line
Funds.  Shareholder services for the Value Line Funds are provided by
Boston Financial Data Services, an affiliate of State Street Bank and Trust
Company.




Total net
assets of the Value Line Funds at April 30, 2009, were:





(in
      thousands)The
      Value Line Fund, Inc.
                  
                  $
                  84,799Value
      Line Income and Growth Fund, Inc.
                  
                  
                  305,340Value
      Line Premier Growth Fund, Inc.
                  
                  
                  286,701Value
      Line Larger Companies Fund, Inc.
                  
                  
                  183,096The
      Value Line Cash Fund, Inc.
                  
                  
                  181,573Value
      Line U.S. Government Securities Fund, Inc.
                  
                  
                  90,888Value
      Line Centurion Fund, Inc.
                  
                  
                  115,054The
      Value Line Tax Exempt Fund, Inc.
                  
                  
                  84,543Value
      Line Convertible Fund, Inc.
                  
                  
                  22,147Value
      Line Aggressive Income Trust
                  
                  
                  33,828Value
      Line New York Tax Exempt Trust
                  
                  
                  17,522Value
      Line Strategic Asset Management Trust (“SAM”)
                  
                  
                  338,905Value
      Line Emerging Opportunities Fund, Inc.
                  
                  
                  516,650Value
      Line Asset Allocation Fund, Inc.
                  
                  
                  68,583$
                  2,329,629





The
following table shows the change in assets for the past three fiscal years
including sales (inflows), redemptions (outflows), dividends and capital gain
distributions, and market value change.  Inflows for sales, and
outflows for redemptions reflect decisions of individual
investors.  The table illustrates the assets within the Value Line
Funds broken down into equity funds, fixed income funds and variable annuity
funds.




8




Asset
      FlowsFor
      the Years Ended April 30,
                              
                              2009
                              
                              
                              2008
                              
                              
                              2007
                              
                              
                              2009
                              
                              
                              2008vs.
                              
                              
                              vs.2008
                              
                              
                              2007Value
      Line equity fund assets (excludes variable annuity)—
    beginning
                              
                              $
                              2,499,824,428
                              
                              
                              $
                              2,365,455,062
                              
                              
                              $
                              2,235,223,321
                              
                              
                              
                              5.7
                              %
                              
                              
                              5.8
                              %Sales/inflows
                              
                              
                              400,940,827
                              
                              
                              
                              734,320,549
                              
                              
                              
                              629,196,049
                              
                              
                              
                              -45.4
                              %
                              
                              
                              16.7
                              %Redemptions/outflows
                              
                              
                              (575,670,435
                              )
                              
                              
                              (463,302,268
                              )
                              
                              
                              (493,161,639
                              )
                              
                              
                              24.3
                              %
                              
                              
                              -6.1
                              %Dividends
      and Capital Gain Distributions
                              
                              
                              (35,888,690
                              )
                              
                              
                              (157,842,692
                              )
                              
                              
                              (131,896,761
                              )
                              
                              
                              -77.3
                              %
                              
                              
                              19.7
                              %Market
      value change
                              
                              
                              (844,037,275
                              )
                              
                              
                              21,193,777
                              
                              
                              
                              126,094,092
                              
                              
                              
                              N/A
                              
                              
                              
                              -83.2
                              %Value
      Line equity fund assets (non-variable annuity)— ending
                              
                              
                              1,445,168,855
                              
                              
                              
                              2,499,824,428
                              
                              
                              
                              2,365,455,062
                              
                              
                              
                              -42.2
                              %
                              
                              
                              5.7
                              %Variable
      annuity fund assets — beginning
                              
                              $
                              808,054,829
                              
                              
                              $
                              919,105,496
                              
                              
                              $
                              1,055,068,627
                              
                              
                              
                              -12.1
                              %
                              
                              
                              -12.9
                              %Sales/inflows
                              
                              
                              127,997,022
                              
                              
                              
                              110,791,953
                              
                              
                              
                              58,779,814
                              
                              
                              
                              15.5
                              %
                              
                              
                              88.5
                              %Redemptions/outflows
                              
                              
                              (113,787,522
                              )
                              
                              
                              (158,083,687
                              )
                              
                              
                              (198,467,391
                              )
                              
                              
                              -28.0
                              %
                              
                              
                              -20.3
                              %Dividends
      and Capital Gain Distributions
                              
                              
                              (112,587,503
                              )
                              
                              
                              (88,296,739
                              )
                              
                              
                              (33,883,419
                              )
                              
                              
                              27.5
                              %
                              
                              
                              160.6
                              %Market
      value change
                              
                              
                              (255,717,834
                              )
                              
                              
                              24,537,805
                              
                              
                              
                              37,607,865
                              
                              
                              
                              N/A
                              
                              
                              
                              -34.8
                              %Variable
      annuity fund assets — ending
                              
                              
                              453,958,992
                              
                              
                              
                              808,054,829
                              
                              
                              
                              919,105,496
                              
                              
                              
                              -43.8
                              %
                              
                              
                              -12.1
                              %Fixed
      income fund assets — beginning
                              
                              $
                              266,172,054
                              
                              
                              $
                              291,586,126
                              
                              
                              $
                              314,020,761
                              
                              
                              
                              -8.7
                              %
                              
                              
                              -7.1
                              %Sales/inflows
                              
                              
                              32,599,409
                              
                              
                              
                              21,875,605
                              
                              
                              
                              25,301,902
                              
                              
                              
                              49.0
                              %
                              
                              
                              -13.5
                              %Redemptions/outflows
                              
                              
                              (33,028,853
                              )
                              
                              
                              (37,617,308
                              )
                              
                              
                              (53,762,369
                              )
                              
                              
                              -12.2
                              %
                              
                              
                              -30.0
                              %Dividends
      and Capital Gain Distributions
                              
                              
                              (378,440
                              )
                              
                              
                              (3,635,147
                              )
                              
                              
                              (1,117,596
                              )
                              
                              
                              -89.6
                              %
                              
                              
                              225.3
                              %Market
      value change
                              
                              
                              (16,436,535
                              )
                              
                              
                              (6,037,221
                              )
                              
                              
                              7,143,428
                              
                              
                              
                              172.3
                              %
                              
                              
                              -184.5
                              %Fixed
      income fund assets — ending
                              
                              
                              248,927,635
                              
                              
                              
                              266,172,054
                              
                              
                              
                              291,586,126
                              
                              
                              
                              -6.5
                              %
                              
                              
                              -8.7
                              %Money
      market fund assets — ending
                              
                              
                              181,573,202
                              
                              
                              
                              219,498,418
                              
                              
                              
                              177,787,583
                              
                              
                              
                              -17.3
                              %
                              
                              
                              23.5
                              %Assets
      under management — ending
                              
                              $
                              2,329,628,685
                              
                              
                              $
                              3,793,549,729
                              
                              
                              $
                              3,753,934,268
                              
                              
                              
                              -38.6
                              %
                              
                              
                              1.1
                              %


Data
provided by State Street Bank




The table below provides a breakdown of the major
distribution channels for the Value Line Funds in terms of assets and
shareholders accounts as of April 30,
2009.





Fund
      Categories
                                          
                                          Aggregate
      Asset
                                            Levels
                                          
                                          
                                          Percentage
      of
                                            Assets
      in
                                            Category
                                          
                                          
                                          Shareholder
                                            Accounts
                                          
                                          
                                          Percentage
      of
                                            Shareholder
                                            Accounts
      in
                                            CategoryGuardian
      SAM and Centurion Funds
                                          
                                          $
                                          453,959,000
                                          
                                          
                                          
                                          19.5
                                          %
                                          
                                          
                                          36,078
                                          
                                          
                                          
                                          19.9
                                          %Value
      Line Funds direct accounts
                                          
                                          $
                                          1,023,150,000
                                          
                                          
                                          
                                          44.0
                                          %
                                          
                                          
                                          59,955
                                          
                                          
                                          
                                          33.0
                                          %Value
      Line Funds omnibus accounts
                                          
                                          $
                                          852,520,000
                                          
                                          
                                          
                                          36.5
                                          %
                                          
                                          
                                          85,434
                                          
                                          
                                          
                                          47.1
                                          %Total
                                          
                                          $
                                          2,329,629,000
                                          
                                          
                                          
                                          100.0
                                          %
                                          
                                          
                                          181,467
                                          
                                          
                                          
                                          100.0
                                          %




9




Investment
management fees and service and distribution fees vary among the Value Line
Funds and may be subject to certain limitations.  Investment
strategies among the equity funds include, but are not limited to, reliance on
the Value Line Timeliness TM Ranking System (the “Ranking System”) and/or the
Value Line PerformanceTM Ranking
System in selecting securities for purchase or sale.  The Ranking
System compares an estimate of the probable market performance of each stock
during the next six to twelve months to that of all of the approximately 1,700
stocks under review and ranks stocks on a scale of 1 (highest) to 5 (lowest).
All the stocks followed by the Ranking System are listed on U.S. stock exchanges
or traded in the U.S. over-the-counter markets.  Prospectuses and
annual reports for each of the Value Line open end mutual funds are available on
the Funds’ website, www.vlfunds.com.  Each mutual fund may use "Value
Line" in its name only so long as the Company or one of its subsidiaries acts as
its investment adviser.





In
addition to managing the Value Line Funds, EULAV manages institutional and
individual portfolios of high net worth individuals, pension plans and college
endowments.  For these services, the Company is paid a quarterly
advisory fee.  The Company’s separately managed accounts as of year
end April 30, 2009 have $48 million in assets, down from $217 million and $237
million respectively at April 30, 2008 and April 30, 2007.  Of the $48
million, $26 million is affiliated with the Parent.  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. However, they have a 30 day advance notice
requirement for termination of the account.





D.  Wholly-Owned
Operating Subsidiaries





Wholly
owned subsidiaries of the Company include Value Line Publishing, Inc. (“VLP”),
EULAV Securities, Inc., formerly Value Line Securities, Inc. (“ESI or VLS”),
EULAV Asset Management, LLC (“EULAV”), Vanderbilt Advertising Agency, Inc.
(“VAA”), Compupower Corporation (“CPWR”) and Value Line Distribution Center
(“VLDC”).





1. VLP
is the publishing unit for the investment related periodical
publications.





2.    ESI
is registered as a broker-dealer under the Securities Exchange Act of 1934 and
is a member of the Financial Industry Regulatory Authority, also known as
“FINRA”.  ESI, formerly Value Line Securities, Inc., is the
distributor for the Value Line Funds.  Shares of the Value Line Funds
are sold to the public without a sales charge (i.e., on a "no-load"
basis).  ESI receives service and distribution fees, pursuant to rule
12b-1 of the Investment Company Act of 1940 from certain Value Line
Funds.





3.   EULAV
is a registered investment adviser that assumed the mutual fund investment
management services previously provided by Value Line, Inc., as of June 30,
2008.





4.   VAA
places advertising on behalf of the Company's publications, investment advisory
services, and mutual funds.





5.   CPWR
provides subscription fulfillment services and subscriber relations services for
VLP publications.





6.   VLDC
primarily handles all of the mailings of the publications to VLP’s
subscribers.  Additionally, VLDC provides office space for
Compupower’s subscriber relations and data processing departments, and provides
a disaster recovery site for the New York operations.




E.       Trademarks





The Company holds trademark and service
mark registrations for various names in multiple countries. Value Line believes
that these trademarks and service marks provide significant value to the Company
and are an important factor in the marketing of its products and
services.




10




F.  Investments





The
Company invests in the Value Line Funds, fixed income government obligations and
other marketable securities.  As of April 30, 2009, the Company had
$42,068,000 invested in the Value Line Cash Fund, representing approximately
1.8% of total Value Line Funds net assets at April 30, 2009 and 23% of the Value
Line Cash Fund at April 30, 2009.




G.  Employees





At
April 30, 2009, the Company and its subsidiaries employed 187
people.





The
Company, its affiliates, officers, directors and employees, may from time to
time own securities which are also held in the portfolios of the Value Line
Funds or recommended in the Company's publications. Analysts are not permitted
to own securities of the companies they cover. The Company has adopted rules
requiring monthly reports of securities transactions by employees for their
respective accounts. The Company has also established policies restricting
trading in securities whose ranks are about to change in order to avoid possible
conflicts of interest.




H.  Principal
Business Segments





The
information with respect to revenues from external customers and profit and loss
of the Company's identifiable principal business segments is incorporated herein
by reference to Note 9 of the Notes to the Company's Consolidated Financial
Statements included in this Annual Report on Form 10-K.




The
Company's assets identifiable to each of its principal business segments were as
follows:




April 30,2009
                    
                    
                    2008
                    
                    
                    2007(in
      thousands)Investment
      Periodicals, Related Publications and Copyright Data
                    
                    $
                    11,867
                    
                    
                    $
                    10,780
                    
                    
                    $
                    18,976Investment
      Management
                    
                    
                    22,914
                    
                    
                    
                    76,671
                    
                    
                    
                    80,581Corporate
      Assets
                    
                    
                    82,774
                    
                    
                    
                    50,502
                    
                    
                    
                    29,406$
                    117,555
                    
                    
                    $
                    137,953
                    
                    
                    $
                    128,963





I.  Competition





The
investment management and the investment information and publications industries
are very competitive.  There are many competing firms and a wide
variety of product offerings.  Some of the firms in these industries
are substantially larger and have greater financial resources than the
Company.  The Internet has increased the amount of competition in the
form of free and paid online investment research.  The prevalence of
broker supermarkets or platforms permitting easy transfer of assets among mutual
funds, mutual fund families, and other investment vehicles, tends to increase
the speed with which fund shareholders can leave or enter the Value Line Funds
based on short-term fluctuations in performance.




11




J.  Executive
Officers of the Registrant





The
following table lists the names, ages (at June 30, 2009), and principal
occupations and employment during the past five years of the Company's Executive
Officers.  All officers are elected to terms of office for one
year.  Except as noted, each of the following has held an executive
position with the companies indicated for at least five years.





Name
                
                Age
                
                Principal Occupation or
      EmploymentJean
      Bernhard Buttner
                
                74
                
                Chairman
      of the Board, President and Chief Executive Officer of the Company and
      AB&Co.; Chairman of the Board and President of each of the Value Line
      Funds until June 2008.Mitchell
      E. Appel
                
                38
                
                Chief
      Financial Officer since April 2008 and from September 2005 to November
      2007; Treasurer from June to September 2005; Chief Financial Officer, XTF
      Asset Management from November 2007 to April 2008; Chief Financial
      Officer, Circle Trust Company from 2003 to May 2005; President of each of
      the Value Line Funds since June 2008; President of the Advisor and
      Distributor since February 2009.Howard
      A. Brecher
                
                55
                
                Chief
      Legal Officer, Vice President and Secretary; Vice President, Secretary,
      Treasurer and General Counsel of AB&Co.; Vice President and Secretary
      of each of the Value Line Funds since June 2008;  Secretary of
      the Advisor since February 2009.David
      T. Henigson
                
                51
                
                Vice
      President; Vice President of AB&Co.; Vice President, Secretary and
      Chief Compliance Officer of each of the Value Line Funds until June 2008;
      Chief Compliance Officer of the Company until June
2008.Stephen
      R. Anastasio
                
                50
                
                Treasurer
      of the Company since September 2005; Treasurer of each of the Value Line
      Funds September 2005 to August 2008; Chief Financial Officer from 2003 to
      September 2005.





WEB SITE
ACCESS TO SEC REPORTS





The
Company’s Internet site address is www.valueline.com.  The
Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K and any amendments to these reports are available free of
charge on the “View Recent Value Line Financials” page under the “About Value
Line” tab of the Company’s Internet site as soon as reasonably practicable after
the reports are filed electronically with the Securities and Exchange
Commission.  All Company filings are also available on the SEC
Internet site, www.sec.gov as soon
as reasonably practicable after electronic filing.





ITEM
1A.  RISK FACTORS





In
addition to the risks referred to elsewhere in this Annual Report on Form 10-K,
the following risks, among others, sometimes may have affected, and in the
future could affect, the Company and its subsidiaries’ business, financial
condition or results of operations.  The risks described below are not
the only ones facing the Company and its subsidiaries.  Additional
risks not discussed or not presently known to the Company or that the Company
currently deems insignificant may also impact its business, brand and stock
price.




12




The Company and
its subsidiaries are dependent on the efforts of its executives and professional
staff.


The
Company’s future success relies upon its ability to retain and recruit qualified
professionals and executives.  While the Company has back-up staff for most
positions, it is nevertheless possible that the loss of the services of key
personnel could have an adverse effect on the Company.




The
Company’s assets under management, which impact revenue, are subject to
fluctuations based on market conditions and individual fund
performance.


Financial
market declines and/or adverse changes in interest rates would generally
negatively impact the level of the Company’s assets under management and
consequently its revenue and net income. Major sources of investment management
revenue for the Company (i.e., investment management and service and
distribution fees) are calculated as percentages of assets under management. A
decline in securities prices or in the sale of investment products or an
increase in fund redemptions would reduce fee income. A prolonged recession or
other economic or political events could also adversely impact the Company’s
revenue if it led to a decreased demand for products, a higher redemption rate,
or a decline in securities prices. Good performance of managed assets relative
to both competing products and benchmark indices generally assists retention and
growth of assets, resulting in additional revenues. Conversely, poor performance
of managed assets relative to both competing products and benchmark indices
tends to result in decreased sales and increased redemptions with corresponding
decreases in revenues to the Company. Poor performance could, therefore, have an
adverse effect on the Company’s business and results of operations.




The Company
derives almost all of its investment management fees from the Value Line
Funds.


The
Company is dependent upon management contracts and service and distribution
contracts with the Value Line Funds under which these fees are paid. As required
in the mutual fund industry, the Board of Directors of the Value Line Funds, a
majority of whom is independent of the Company, may elect to terminate such
contracts. If any of these contracts are terminated, not renewed, or amended to
reduce fees, the Company’s financial results may be adversely
affected.




If the Company
does not maintain subscription revenue, its operating results could
suffer.


A
substantial portion of the Company’s revenue is generated from print and
electronic subscriptions. VLP’s trial and full term subscriptions are typically
paid in advance by subscribers. Unearned revenues are accounted for on the
balance sheet of the Company. The backlog of orders is primarily generated
through renewals and new subscription marketing efforts as the Company deems
appropriate. Future results will depend on the renewal of existing subscribers
and obtaining new subscriptions for the investment publications. The
availability of free or low cost information on the Internet could negatively
impact demand for VLP’s publications or impact its pricing. Copyright Data
agreements are based on market interest in the respective proprietary
information. If the sales of the Company’s publications or fees from proprietary
information decline, its operating results could suffer.




Failure
to protect its intellectual property rights and proprietary information could
harm the Company’s ability to compete effectively and could negatively affect
operating results.


The
Company’s trademarks and tradenames are important assets to the Company. 
Although its trademarks are registered in the United States and in certain
foreign countries, the Company may not always be successful in asserting global
trademark or tradename protection. In the event that other parties infringe on
its intellectual property rights and it is not successful in defending its
intellectual property rights, the result may be a dilution in the value of the
Company’s brands in the marketplace. If the value of its brands becomes diluted,
or if competitors introduce brands that cause confusion with its brands in the
marketplace, such could adversely affect the value that its customers associate
with its brands, and thereby negatively impact its sales. Any infringement of
our intellectual property rights would also likely result in a commitment of
Company resources to protect these rights through litigation or otherwise. In
addition, third parties may assert claims against its intellectual property
rights and it may not be able successfully to resolve such claims.




13




Adverse changes
in market and economic conditions could lower demand for the Company’s products
and services.


The
Company provides its products and services to individual investors, financial
advisors, and institutional clients. Adverse conditions in the financial and
securities markets may have an impact on the Company’s investment management
revenues, securities income, subscriptions, and copyright data fees which could
cause material changes in the Company’s operating results.




The
Company is in the highly competitive fields of publishing and investment
management.


The
Company competes with a large number of domestic and foreign investment
management firms, broker-dealers and investment publishing firms offering
competing products and services. Many of its competitors have greater resources
and assets under management. The absence of significant barriers to entry by new
investment management firms in the mutual fund industry increases competitive
pressure and some investors may prefer to invest with an investment manager that
is not publicly traded. Entry barriers in publishing investment periodicals have
been reduced by the minimal cost structure of the Internet and other
technologies. Competition is based on various factors, including business
reputation, investment performance, quality of service, marketing, distribution
services offered, the range of products offered and fees charged. Since the
Company is smaller than other companies in some of its product segments, adverse
business developments may have an impact on the Company’s operating
results.




Government
regulations, any changes to government regulations, and regulatory proceedings
and litigation may adversely impact the business of the Company.


Changes
in legal, regulatory, accounting, tax and compliance requirements could have an
effect on the Company’s operations and results, including but not limited to
increased expenses and restraints on marketing certain funds and other
investment products offered by the Company. EULAV Asset Management, LLC is
registered with the Securities and Exchange Commission under the Investment
Advisers Act of 1940. The Investment Advisers Act imposes numerous obligations
on registered investment advisers, including fiduciary, record keeping,
operational and disclosure obligations. EULAV Securities, Inc. is registered as
a broker-dealer under the Securities Exchange Act of 1934 and is a member of the
Financial Industry Regulatory Authority, also known as “FINRA”. Each Value Line
Fund is a registered investment company under the Investment Company Act of
1940. This Act requires numerous compliance measures, which must be observed,
and involves regulation by the Securities and Exchange Commission. Each fund and
its shareholders may face adverse tax consequences if the Value Line Funds are
unable to maintain qualification as registered investment companies under the
Internal Revenue Code of 1986, as amended. Those laws and regulations generally
grant broad administrative powers to regulatory agencies and bodies such as the
Securities and Exchange Commission and FINRA. If these agencies and bodies
believe that the Company and its subsidiaries or the Value Line Funds have
failed to comply with their laws and regulations, these agencies and bodies have
the power to impose sanctions. The Company and the Value Line Funds, like other
companies, can also face lawsuits by private parties. The Company, along with
its directors and officers, have been sued from time to time. Regulatory
proceedings and lawsuits are subject to uncertainties, and the outcomes are
difficult to predict. Changes in laws, regulations or governmental policies, and
the costs associated with compliance, could adversely affect the business and
operations of the Company and the Value Line Funds. An adverse resolution of any
regulatory proceeding or lawsuit against the Company, its directors, officers,
or its subsidiaries could result in substantial costs or reputational harm to
the Company and its subsidiaries or to the Value Line Funds and have an adverse
effect on the business and operations of the Company or the Value Line Funds. As
noted under “Legal Proceedings,” the Company and its broker-dealer subsidiary
are currently being investigated by the SEC. As part of any settlement with or
action by the SEC, the Company could be required to make disgorgement or pay
penalties. It is also possible that under certain circumstances, either the
Company’s regulated subsidiaries or executives or others associated with the
Company or its subsidiaries could face suspension, bar or loss of license. Any
of these events could have an adverse impact on the Company and its
business.




Terrorist
attacks could adversely affect the Company.


A
terrorist attack, including biological or chemical weapons attacks, and the
response to such terrorist attacks, could have a significant impact on the New
York City area, the local economy, the United States economy, the global
economy, and U.S. and/or global financial markets and could also have a material
adverse effect on the Company’s business.




14




Item 1B.
UNRESOLVED STAFF COMMENTS.





None.





Item 2.
PROPERTIES.





The
Company leases approximately 64,000 square feet of office space at 220 East
42ndStreet in New York.  The lease expires May 2013. In addition to the
New York, NY office space, the Company owns a warehouse facility with
approximately 85,000 square feet in New Jersey. The facility primarily serves
the distribution operations for the various Company publications and the
fulfillment operations of CPWR for the publications and serves as a disaster
recovery site for the Company. The Company believes the capacity of these
facilities is sufficient to meet the Company's current and expected future
requirements.





Item 3.
LEGAL PROCEEDINGS.





By letter
dated June 15, 2005, the staff of the Northeast Regional Office of the
Securities and Exchange Commission ("SEC") informed the Company that it was
conducting an informal inquiry primarily regarding the execution of portfolio
transactions by VLS for the Value Line Funds. The Company thereafter supplied
numerous documents to the SEC in response to its requests and various employees
and former employees of the Company provided testimony to the SEC.  On
May 8, 2008, the SEC issued a formal order of private investigation regarding
whether the VLS brokerage charges and related expense reimbursements during
periods prior to 2005 were excessive and whether adequate disclosure was made to
the SEC and the boards of directors and shareholders of the Value Line Funds.
Thereafter, certain senior officers of the Company asserted their constitutional
privilege not to provide testimony. Management believes that the SEC has
completed the fact finding phase of its investigation and the Company has held
discussions with the staff of the SEC in an effort to settle the foregoing
investigation. There can be no assurance that the Company and the SEC will be
able to reach a mutually agreeable settlement. Although for the foregoing reason
management of the Company cannot estimate an amount or range of reasonably
possible loss that the investigation may have on the Company’s financial
statements, in light of settlement discussions to date, the Company has
concluded it is reasonably possible that any settlement may have a material
negative effect on the Company's financial statements. The Company has
substantial liquid assets from which it could pay a settlement of the SEC
investigation if a mutually satisfactory settlement can be reached.





On
September 3, 2008, the Company was served with a derivative shareholder's suit
filed in New York County Supreme Court naming the Company's Directors at the
time the suit was filed and alleging breach of fiduciary duty and related
allegations, all arising from the above SEC matter. The complaint seeks return
of remuneration by the Directors and other remedies. Plaintiff's counsel has
agreed from time to time, most recently until August 3, 2009, to extend the
defendants' time to answer, move, or otherwise respond to the complaint. Based
on an evaluation of the case at this early stage, including communications with
the Company's insurance carrier, it is not possible to estimate an amount or
range of loss on the Company's financial statements.




Item 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.





No
matters were submitted to a vote of the shareholders during the fourth quarter
of the fiscal year ended April 30, 2009.





Part
II





Item 5.
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES.





The
Registrant's Common Stock is traded on the NASDAQ Global MarketSM under
the symbol “VALU”.  The approximate number of record holders of the
Registrant's Common Stock at April 30, 2009 was 55.  As of June 30,
2009, the closing stock price was $32.87.




15




The
reported high and low prices and the dividends paid on these shares during the
past two fiscal years were as follows:





Quarter Ended
                  
                  High
                  
                  
                  Low
                  
                  
                  Dividend Declared Per ShareApril
      30, 2009
                  
                  $
                  32.48
                  
                  
                  $
                  24.30
                  
                  
                  $
                  .30January
      31, 2009
                  
                  $
                  39.98
                  
                  
                  $
                  33.44
                  
                  
                  $
                  .40October
      31, 2008
                  
                  $
                  39.99
                  
                  
                  $
                  30.97
                  
                  
                  $
                  .40July
      31, 2008
                  
                  $
                  37.97
                  
                  
                  $
                  30.24
                  
                  
                  $
                  .40April
      30, 2008
                  
                  $
                  46.92
                  
                  
                  $
                  41.50
                  
                  
                  $
                  .30January
      31, 2008
                  
                  $
                  41.40
                  
                  
                  $
                  31.10
                  
                  
                  $
                  .30October
      31, 2007
                  
                  $
                  52.74
                  
                  
                  $
                  43.70
                  
                  
                  $
                  .30July
      31, 2007
                  
                  $
                  56.00
                  
                  
                  $
                  42.69
                  
                  
                  $
                  .30




On July
16, 2009 the Board of Directors of Value Line, Inc. declared a quarterly
dividend of $0.20 per share to shareholders of record as of July 30, 2009 to be
paid on August 13, 2009.  This is a $0.10 per share, or 33% reduction
from the previous quarterly dividend.




As of the
date of this Annual Report on Form 10-K, there were no securities of the Company
authorized for issuance under equity compensation plans.  The Company
did not sell any unregistered shares of common stock during Fiscal
2009.





There
were no purchases of the Company’s equity securities by the Company or any
affiliated purchaser during the fiscal quarter ended April 30,
2009.




Item 6.
SELECTED FINANCIAL DATA.





Earnings
per share for each of the fiscal years shown below are based on the weighted
average number of shares outstanding.





Years ended April 30,2009
                      
                      
                      2008
                      
                      
                      2007
                      
                      
                      2006
                      
                      
                      2005(in
      thousands, except per share amounts)Revenues:Investment
      periodicals and related publications
                      
                      $
                      39,935
                      
                      
                      $
                      42,791
                      
                      
                      $
                      45,619
                      
                      
                      $
                      47,703
                      
                      
                      $
                      50,172Copyright
      data fees
                      
                      $
                      4,333
                      
                      
                      $
                      7,066
                      
                      
                      $
                      6,861
                      
                      
                      $
                      5,016
                      
                      
                      $
                      2,541Investment
      management fees and services
                      
                      $
                      24,973
                      
                      
                      $
                      32,821
                      
                      
                      $
                      31,155
                      
                      
                      $
                      32,467
                      
                      
                      $
                      31,765Total
      revenues
                      
                      $
                      69,241
                      
                      
                      $
                      82,678
                      
                      
                      $
                      83,635
                      
                      
                      $
                      85,186
                      
                      
                      $
                      84,478Income
      from operations
                      
                      $
                      24,223
                      
                      
                      $
                      34,450
                      
                      
                      $
                      35,636
                      
                      
                      $
                      35,180
                      
                      
                      $
                      27,084Net
      income
                      
                      $
                      22,953
                      
                      
                      $
                      25,550
                      
                      
                      $
                      24,607
                      
                      
                      $
                      23,439
                      
                      
                      $
                      21,318Earnings
      per share, basic and fully diluted
                      
                      $
                      2.30
                      
                      
                      $
                      2.56
                      
                      
                      $
                      2.47
                      
                      
                      $
                      2.35
                      
                      
                      $
                      2.14Total
      assets
                      
                      $
                      117,555
                      
                      
                      $
                      137,953
                      
                      
                      $
                      128,963
                      
                      
                      $
                      119,214
                      
                      
                      $
                      98,865Cash
      dividends declared per share
                      
                      $
                      1.50
                      
                      
                      $
                      1.20
                      
                      
                      $
                      1.15
                      
                      
                      $
                      1.00
                      
                      
                      $
                      1.00




16




Item
      7.
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS.





The
following Management’s Discussion and Analysis of Financial Condition and
Results of Operations (“MD&A”) is intended to help a reader understand Value
Line, its operations and business factors.  The MD&A should be
read in conjunction with Item 1, Business, Item 1A, Risk Factors, and in
conjunction with the consolidated financial statements and the accompanying
notes contained in Item 8 of this report.





The
MD&A includes the following subsections:





·
            Executive
      Summary of the Business


·
            Results
      of Operations


·
            Liquidity
      and Capital Resources


·
            Critical
      Accounting Estimates and Policies




Executive
Summary of the Business





The
Company's primary businesses are: (1) producing investment related periodical
publications and making available copyright data including certain Value Line
proprietary ranking system information and other proprietary information under
agreements to third parties for use in selecting securities for third party
marketed products, such as unit investment trusts, closed-end fund products and
exchange traded funds, and (2) providing investment management services to the
Value Line Funds and other managed accounts.





The
Company’s target audiences within the investment related periodical publications
field are individual investors, colleges, libraries, and investment management
professionals.  Individuals come to Value Line for complete research
in one package.  Institutional subscribers, such as 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.





Depending
upon the product, the Company offers three months or less, annual, or multi-year
subscriptions.  Generally, all subscriptions are paid for in advance
of fulfillment.  Renewal orders for the retail market are solicited
primarily through a series of efforts that include letters, email, and
telemarketing.  New orders are generated primarily from targeted
direct mail campaigns for specific products.  Other sales channels
used by the Company include advertising in media publications, the Internet,
cross selling via telesales efforts and Internet promotions through third
parties.





Institutional
subscribers consist of investment management companies, colleges, and
libraries.  The Company has a dedicated department that solicits
institutional subscriptions.  Fees for institutional services are
based on university or college enrollment or  number of users for
corporate and library subscribers.





Cash
received for retail and institutional orders is recorded as unearned revenue
until the order is fulfilled.  As the subscriptions are fulfilled, the
Company recognizes revenue in equal installments over the life of the particular
subscription. 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 unearned revenue is
expected to be recognized as revenue within 12 months.





The
Company’s businesses consolidate into two business segments.  The
investment related periodical publications (retail and institutional) and fees
from copyright data including proprietary ranking system information and other
proprietary information consolidate into one segment entitled Investment
Periodicals, Publications and Copyright Data.  The second segment
consolidates the investment management services to the Value Line Funds and
other managed accounts into a business segment entitled Investment
Management.




17




Results
of Operations


The
recession in the U.S. was in full bloom at year end April 30, 2009, and the
global economy continued to falter as well.  While the Dow Jones
Industrial Average and S&P 500 Index were up 2% and 6% respectively for the
quarter ended April 30, 2009, they were down 36% and 37% respectively for the
year then ended.  The severe downturn and volatility within the
financial markets throughout the fiscal year has negatively impacted the
Company’s assets under management and the assets attributable to third party
copyright data partners.  This trend can be seen across the asset
management industry.  According to the Investment Company Institute
(“ICI”), the combined assets of the mutual funds in the United States (excluding
money market funds) declined by $2.7 trillion or 32% for the twelve months ended
April 30, 2009. Although we have not suffered a fundamental change in our
business model, the collateral damage from the global economic decline
significantly reduced our assets under management and related investment
management and copyright data revenues.  In response we have been
diligent about continuing our expense control and have taken initiatives to
reduce costs.  The Company continues to be debt free with substantial
liquidity sufficient to endure the current economic crisis in terms of
anticipated liquidity needs.


The
following table illustrates the key earnings figures for each of the past three
years ended April 30, 2009, 2008, and 2007.





Key
      Earnings FiguresYear
      Ended April 30,
                              
                              2009
                              
                              
                              2008
                              
                              
                              2007
                              
                              
                              Percentage
      Change(in
      thousands, except earnings per share)
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              09
      vs 08
                              
                              
                              08
      vs 07Earnings
      Per Share
                              
                              $
                              2.30
                              
                              
                              $
                              2.56
                              
                              
                              $
                              2.47
                              
                              
                              
                              -10.2
                              %
                              
                              
                              3.6
                              %Net
      Income
                              
                              $
                              22,953
                              
                              
                              $
                              25,550
                              
                              
                              $
                              24,607
                              
                              
                              
                              -10.2
                              %
                              
                              
                              3.8
                              %Operating
      Income
                              
                              $
                              24,223
                              
                              
                              $
                              34,450
                              
                              
                              $
                              35,636
                              
                              
                              
                              -29.7
                              %
                              
                              
                              -3.3
                              %Income
      from Securities transactions, net
                              
                              $
                              11,625
                              
                              
                              $
                              6,294
                              
                              
                              $
                              4,867
                              
                              
                              
                              84.7
                              %
                              
                              
                              29.3
                              %





For the
twelve months ended April 30, 2009 the Company’s net income of $22,953,000 or
$2.30 per share was $2,597,000 or 10% below net income of $25,550,000 or $2.56
per share for the twelve months ended April 30, 2008. Operating income of
$24,223,000 for the twelve months ended April 30, 2009 was $10,227,000 or 30%
below operating income of $34,450,000 last fiscal year. The sharp decline in
operating income was partially offset by Company’s income from securities
transactions, which at $11,625,000 for the twelve months ended April 30, 2009,
was $5,331,000 or 85% above last year’s level of $6,294,000 due to the sale of
the equity portfolio in the second quarter of fiscal year 2009.  The
Company redeployed the proceeds from the equity portfolio into short term fixed
income investments or cash equivalents and does not anticipate significant
income from securities transactions this year. Shareholders’ equity of
$80,869,000 at April 30, 2009 was 8% lower than shareholders’ equity of
$87,854,000 at April 30, 2008.


The
decline in our earnings occurred primarily during the third and fourth quarters
of our fiscal year ended April 30, 2009 as the economy and financial markets
declined. Net income for the third quarter ended January 31, 2009 was $3,732,000
or 56% less than the net income of $8,471,000 for the third quarter ended
January 31, 2008. Net income for the fourth quarter ended April 30, 2009 was
$3,617,000 or 24% less than the net income of $4,777,000 for the fourth quarter
ended April 30, 2008.





Operating
revenues, which consist of investment periodicals, and related publications
revenues, copyright data fees, and investment management fees and services, all
declined for the twelve months ended April 30, 2009.





Operating
      revenues and % of total by yearYear
      Ended April 30,
                          
                          2009
                          
                          
                          2008
                          
                          
                          2007
                          
                          
                          Percentage
      Change(in
      thousands)
                          
                          $$
                          
                          
                          %
                          
                          
                          $$
                          
                          
                          %
                          
                          
                          $$
                          
                          
                          %
                          
                          
                          09
      vs 08
                          
                          
                          08
      vs 07Investment
      periodicals and related publications
                          
                          $
                          39,935
                          
                          
                          
                          57.7
                          %
                          
                          $
                          42,791
                          
                          
                          
                          51.8
                          %
                          
                          $
                          45,619
                          
                          
                          
                          54.5
                          %
                          
                          
                          -6.7
                          %
                          
                          
                          -6.2
                          %Copyright
      Data fees
                          
                          $
                          4,333
                          
                          
                          
                          6.2
                          %
                          
                          $
                          7,066
                          
                          
                          
                          8.5
                          %
                          
                          $
                          6,861
                          
                          
                          
                          8.2
                          %
                          
                          
                          -38.7
                          %
                          
                          
                          3.0
                          %Investment
      management fees and services
                          
                          $
                          24,973
                          
                          
                          
                          36.1
                          %
                          
                          $
                          32,821
                          
                          
                          
                          39.7
                          %
                          
                          $
                          31,155
                          
                          
                          
                          37.3
                          %
                          
                          
                          -23.9
                          %
                          
                          
                          5.3
                          %Total
      Operating Revenues
                          
                          $
                          69,241
                          
                          
                          
                          
                          
                          
                          $
                          82,678
                          
                          
                          
                          
                          
                          
                          $
                          83,635
                          
                          
                          
                          
                          
                          
                          
                          -16.3
                          %
                          
                          
                          -1.1
                          %




18




Investment
periodicals and related publications revenues





Investment
periodicals and related publications revenues were down $2,856,000 or 7% for the
twelve months ended April 30, 2009 as compared to the twelve months of the prior
fiscal year.  While the Company continues to attract new subscribers
through various marketing channels, primarily direct mail and the Internet,
total product line circulation continues to decline.  Factors that
have contributed to the decline in the investment periodicals and related
publications revenues include competition in the form of free or low cost
investment research on the Internet and research provided by brokerage firms at
no cost to their clients. As of the end of April 30, 2009, total company-wide
circulation has dropped more than 12% compared to the previous year-end, and is
down 23% from two years ago.  Overall renewal rates for the flagship
Value Line Investment Survey are 70%, down from 74% a year
earlier.  The Company is not adding enough new subscribers to offset
the subscribers that choose not to renew.  The recession and turmoil
in the markets have increased the decline in subscriptions as individuals
reduced many forms of discretionary spending, or have shifted investments to
fixed income, for which the Company does not provide research.  The
Company has been fortunate that electronic investment periodicals revenues have
increased $715,000 from the previous year, but the increase does not offset the
lost print revenue of $3,571,000. Fiscal year institutional sales through April
2009 were in excess of $8 million, up $1.4 million from the previous fiscal
year, and the month of March 2009 was the best month in the Company’s history
for institutional print and electronic publications with approximately $1
million in new and renewal sales.




Within
investment periodicals and related publications are subscription revenues
derived from print and electronic products.  The following chart
illustrates the year-to-year change in the revenues associated with print and
electronic subscriptions.


Subscription RevenuesYear Ended April 30,
                        
                        2009
                        
                        
                        2008
                        
                        
                        2007
                        
                        
                        Percentage Change(in thousands)
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        09 vs 08
                        
                        
                        08 vs 07Print
      publication revenues
                        
                        $
                        27,089
                        
                        
                        $
                        30,660
                        
                        
                        $
                        34,090
                        
                        
                        
                        -11.6
                        %
                        
                        
                        -10.1
                        %Electronic
      publication revenues
                        
                        $
                        12,846
                        
                        
                        $
                        12,131
                        
                        
                        $
                        11,529
                        
                        
                        
                        5.9
                        %
                        
                        
                        5.2
                        %Total
      Investment periodicals and related publications revenue
                        
                        $
                        39,935
                        
                        
                        $
                        42,791
                        
                        
                        $
                        45,619
                        
                        
                        
                        -6.7
                        %
                        
                        
                        -6.2
                        %Unearned
      Revenues (Short and Long Term)
                        
                        $
                        28,997
                        
                        
                        $
                        32,530
                        
                        
                        $
                        34,500
                        
                        
                        
                        -10.9
                        %
                        
                        
                        -5.7
                        %




For the twelve months ended April 30,
2009 print publication revenues decreased $3,571,000 or 12% below last fiscal
year for the reasons described above.  Print circulation, which has
always dominated our subscription base, has fallen 30% from two years
earlier.  Electronic publications revenues grew by $715,000 or 6% for
the twelve months ended April 30, 2009 and by 23% for the twelve months ended
April 30, 2008.  With the exception of The Value Line Investment
Survey Online Edition, all other retail electronic services have seen declines
in circulation from two years ago.




The electronic publication revenues are
broken down into institutional accounts and retail subscribers.  For
the twelve months ended April 30, 2009, institutional revenues increased
$1,348,000 or 24%, while revenues from retail subscribers were down $633,000 or
10% as compared to the twelve months ended April 30, 2008.  The
Company has successfully expanded its institutional sales marketing efforts, and
the increase in institutional revenues is a direct result of a focused effort to
boost sales to colleges, libraries and money managers.  The decrease
in electronic retail publications revenues is primarily attributable to the
decrease in circulation within the Company’s software
products.  Circulation of The Value Line Investment Analyzerdecreased 16%, which resulted in a $463,000 decline in revenues from this
product. In March 2009, the Company released its version 4.0 of this
product.  The Company has received mixed results from subscribers to
the product and as of June 2009, has not seen any change in the negative
circulation trend for this product.




The Value Line Timeliness Ranking
SystemTM (“the
Ranking System”) has historically been one of the key components in the
Company’s flagship product, The Value Line Investment Survey, and is also the
foundation on which much of the Company’s copyright data business is
derived.  Unfortunately, in the volatile market of the past year, the
Ranking System has not performed up to historical standards.  Although
it has gone through brief periods of underperformance before, the rapid and
severe price actions in the markets appear to have favored short-term investing,
as investors buy well known names whose earnings have plunged but whose stock
prices are cheap, hoping the stock prices will rebound.  Such stocks
are generally not well ranked by Value Line because the Ranking System
emphasizes earnings results and price momentum.  The Ranking System is
designed to be predictive over a six to 12 month period.




19




Over the
year ended June 9, 2009, the ranking system results were in perfect reverse
order, with the rank 5 stocks (lowest ranks) rebounding quickly after being
beaten down most of last year, to outperform the rank 1, 2, 3 and 4
stocks.  If the market remains as volatile in the coming year as it
was last year, or if fundamental market factors result in longer-term
deterioration of the Ranking System’s predictive performance, the Company
believes the ranking system may continue to struggle. This may negatively impact
subscription revenues and copyright data fees.  The Company and its
quantitative research staff are working to improve the Ranking System’s
predictive performance although no assurances are possible.





Copyright
Data Fees





Copyright Data
fees have decreased $2,733,000 or 39% for the twelve months ended April 30, 2009
as compared to the twelve months ended April 30, 2008.  As of April
30, 2009, total third party sponsored assets are attributable to four contracts
for copyright data and represent $2.0 billion in various products as compared to
three contracts and $6.3 billion in assets last fiscal year, representing an
almost 70% decline in assets year over year.  The combination of the
underperformance by the Ranking System and the broad and deep declines
throughout the equity markets have significantly impacted assets of the third
party sponsors that are customers of our copyright data business and have
resulted in lower asset based fees paid to the Company.  The Company
is in discussion with new sponsors in an effort to increase revenues in this
area.  However, although no agreements were terminated in fiscal year
2009, only one new agreement has been signed.  The Company believes
the growth of the business is dependent upon the desire of third party marketers
to use the Value Line proprietary research and other proprietary information for
their products, and the marketplace’s acceptance of new products. Today this
market is significantly more competitive as a result of product diversification
and growth of the use of indexes by portfolio managers.  The copyright
data of the Value Line ranking system and other proprietary information have
been a critical component of the Company’s plan to replace the shrinking
publishing revenues.  Unless the Ranking System’s predictive
performance improves, we anticipate copyright data revenues will underperform
the previous year’s revenues from that source.





Investment
management fees and distribution services revenues





The
financial markets have experienced unprecedented volatility and declines over
the past year.  Equity indexes such as the DJIA, NASDAQ, and S&P
500 are down 36%, 29%, and 37% respectively for the year ended April 30,
2009.  Such market depreciation, a decline in shareholder accounts and
net shareholder redemptions have resulted in a contraction in total assets
within the Value Line Funds of 39% as compared to a year ago.  The
following tables illustrate the total fund assets as of April 30, 2009 as
compared to the previous two years.





Total Net AssetsAt April 30,
                    
                    2009
                    
                    
                    2008
                    
                    
                    2007
                    
                    
                    Percentage Change(in thousands)
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    09 vs 08
                    
                    
                    08 vs 07Equity
      funds
                    
                    $
                    1,899,128
                    
                    
                    $
                    3,307,879
                    
                    
                    $
                    3,284,560
                    
                    
                    
                    -42.6
                    %
                    
                    
                    0.7
                    %Fixed
      income funds
                    
                    $
                    248,928
                    
                    
                    $
                    266,172
                    
                    
                    $
                    291,586
                    
                    
                    
                    -6.5
                    %
                    
                    
                    -8.7
                    %Money
      Market funds
                    
                    $
                    181,573
                    
                    
                    $
                    219,499
                    
                    
                    $
                    177,788
                    
                    
                    
                    -17.3
                    %
                    
                    
                    23.5
                    %Total
      net assets
                    
                    $
                    2,329,629
                    
                    
                    $
                    3,793,550
                    
                    
                    $
                    3,753,934
                    
                    
                    
                    -38.6
                    %
                    
                    
                    1.1
                    %





Overall
assets under management increased approximately 2% or $50,246,000 from April 30,
2009 to June 30, 2009 compared to an increase in the DJIA and the S&P 500 of
3% and 5%, respectively.  As a result of the decline in assets under
management occurring over the course of the year, investment management fees and
distribution services revenues for the twelve months ended April 30, 2009 were
$7,848,000 or 24% below the prior fiscal year.  Management fees for
the fiscal year 2009 were down $5,796,000 or 24% as compared to fiscal year
2008. There was a net decrease of $1,740,000 or 25% in distribution services
revenues (12b-1 fees).  During the period, contractual fee waivers
have existed for most of the Value Line Funds. For the twelve months ended April
30, 2009 and 2008, 12b-1 fee waivers were $2,889,000 and $3,774,000,
respectively.  For the twelve months ended April 30, 2009 and 2008,
management fee waivers were $208,000 and $226,000,
respectively.  Twelve of the fourteen funds have a portion of or the
full amount of the 12b-1 fees being waived and five of the fourteen funds have
partial management fee waivers in place.  With very limited exception,
the Company and its subsidiaries have no right to recoup the previously waived
management fees and 12b-1 fees.




20




Separately
managed accounts revenues decreased $312,000 or 27% for the twelve months ended
April 30, 2009 as compared to the twelve months ended April 30, 2008 primarily
due to market decline in the portfolios.  At the March 12, 2009
meeting of The Board of Directors for the Value Line Funds, the advisory and
distribution agreements were continued for another year.





Of
the 14 funds managed by the Company, shares of Value Line Strategic Asset
Management Trust (“SAM”) and Value Line Centurion Fund are available to the
public only through the purchase of certain variable annuity and variable life
insurance contracts issued by The Guardian Insurance & Annuity Company, Inc.
(“GIAC”). The table below shows the assets in the equity funds broken down into
the two channels in which the equity funds are available.





Equity Fund Net Assets (Variable Annuity and Open EndEquity Funds)At April 30,
                    
                    2009
                    
                    
                    2008
                    
                    
                    2007
                    
                    
                    Percentage Change(in thousands)
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    09 vs 08
                    
                    
                    08 vs 07Variable
      annuity assets (GIAC)
                    
                    $
                    453,959
                    
                    
                    $
                    808,055
                    
                    
                    $
                    924,231
                    
                    
                    
                    -43.8
                    %
                    
                    
                    -12.6
                    %All
      other open end equity fund assets
                    
                    $
                    1,445,169
                    
                    
                    $
                    2,499,824
                    
                    
                    $
                    2,360,329
                    
                    
                    
                    -42.2
                    %
                    
                    
                    5.9
                    %Total
      Equity fund net assets
                    
                    $
                    1,899,128
                    
                    
                    $
                    3,307,879
                    
                    
                    $
                    3,284,560
                    
                    
                    
                    -42.6
                    %
                    
                    
                    0.7
                    %





As
of April 30, 2009, two of the six equity mutual funds, excluding SAM and
Centurion, had four star ratings by Morningstar, Inc. as compared to five of the
six equity funds a year earlier.  The equity funds had net redemptions
for the year ended April 30, 2009, as compared to net sales the previous
year.  Shareholder accounts for the year ended April 30, 2009 declined
to 181,487 from 208,297 for the previous year, representing a 12.8%
decline.  The largest distribution channel for the Value Line Funds
remains the fund supermarket platforms such as Charles Schwab & Co.,
Inc.  The Company has received inquiries from various platforms
concerning the SEC investigation described in the Contingencies Footnote
14.  The Company believes the accounts that are held at fund
supermarkets may be vulnerable based on poor performance and concerns about the
SEC investigation, as investment advisors or prospects may choose to redeem
existing investments or not make further investments.





The
Value Line fixed income mutual fund assets (excluding the Value Line Cash Fund),
represent 11% of total mutual fund assets at April 30, 2009 and are down 7% from
the previous year.  Value Line Cash Fund assets represent 8% of the
total fund assets at April 30, 2009 and have decreased 17% from the previous
year, primarily since the Company and its Parent redeployed cash into other
fixed income investments such as pre-refunded bonds and U.S.
Treasuries.





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. Since the close of the fourth quarter and as of this filing,
the financial markets continue to be volatile, but the markets have slightly
improved.





The
Company’s separately managed accounts as of year end April 30, 2009 have $48
million in assets, down from $217 million and $237 million respectively at April
30, 2008 and April 30, 2007.  Of the $48 million, $26 million is
affiliated with the Parent.  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 have a 30 day advance notice requirement for
termination of the account.    As of April 30, 2009 the
Company lost a $93 million account from the New York State Common Retirement
Fund as their five-year contract expired and was not renewed based on a
reallocation of investments by the state.  The Company did not add any
new accounts during the fiscal year.





Expenses





Expenses
within the Company are categorized into advertising and promotion, salaries and
employee benefits, production and distribution, and office and administration.
Operating expenses of $45,018,000 for the twelve months ended April 30, 2009
were $3,210,000 or 7% below operating expenses of $48,228,000 last fiscal
year.


21





Advertising
and promotion


Year Ended April 30,
                    
                    2009
                    
                    
                    2008
                    
                    
                    2007
                    
                    
                    Percentage Change(in thousands)
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    09 vs 08
                    
                    
                    08 vs 07Advertising and promotion
                    
                    $
                    10,874
                    
                    
                    $
                    13,863
                    
                    
                    $
                    14,628
                    
                    
                    
                    -21.6
                    %
                    
                    
                    -5.2
                    %





Advertising
and promotion expenses for the twelve months ended April 30, 2009 decreased
$2,989,000 as compared to the comparable twelve months ended April 30, 2008.
Within the investment management segment, supermarket and Guardian (GIAC)
platform expenses associated with the distribution of the mutual funds decreased
$1,495,000 or 20% below the prior year due to the decline in assets under
management.  In fiscal 2009, the Company reduced print advertising
promoting the mutual funds due to the volatility in the
marketplace.  For the twelve months ended April 30, 2009, media
advertising decreased $140,000, from the twelve months ended April 30,
2008.  Within the publishing segment, costs associated with direct
mail decreased $1,144,000 or 32% below last fiscal year, due to increased
efficiency in the selection of direct mail lists and a reduction in the overall
number of pieces mailed year to year. For the twelve months ended April 30,
2009, internet marketing costs increased $98,000 or 50% compared to the twelve
months ended April 30, 2008.





Salaries
and employee benefits





Year Ended April 30,
                          
                          2009
                          
                          
                          2008
                          
                          
                          2007
                          
                          
                          Percentage Change(in thousands)
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          09 vs 08
                          
                          
                          08 vs 07Salaries
      and employee benefits
                          
                          $
                          17,676
                          
                          
                          $
                          18,594
                          
                          
                          $
                          18,409
                          
                          
                          
                          -4.9
                          %
                          
                          
                          1.0
                          %





Over
the past several years, the Company has saved money by combining the roles and
responsibilities of various personnel and by selective
outsourcing.  Some duplication of effort has been eliminated and
certain tasks, such as some data entry, have been outsourced to third party
vendors that the Company believes can provide better controls and results at a
favorable cost. Salaries and employee benefits decreased by $918,000 from the
previous year, primarily due to the Company’s decision to not contribute to the
Value Line Profit Sharing Plan for fiscal year 2009, which was partially offset
by cost of living increases in July 2008 to the staff.





Production
and distribution





Year Ended April 30,
                  
                  2009
                  
                  
                  2008
                  
                  
                  2007
                  
                  
                  Percentage Change(in thousands)
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  09 vs 08
                  
                  
                  08 vs 07Production
      and distribution
                  
                  $
                  5,868
                  
                  
                  $
                  6,251
                  
                  
                  $
                  6,981
                  
                  
                  
                  -6.1
                  %
                  
                  
                  -10.5
                  %




Production
and distribution expenses for the twelve months ended April 30, 2009 were
$383,000 below expenses for the twelve months ended April 30,
2008.  Amortized software costs decreased $415,000 below last fiscal
year due to a reduction in prior year expenditures for capitalized
costs.  In addition, the decline in expenses was due to volume
reductions in paper, printing and mailing that resulted primarily from a
decrease in circulation of the print products.  Partially offsetting
the savings during the twelve months ended April 30, 2009 was a $79,000 increase
in the costs of data feeds, an 8% increase in postage rates, and an approximate
6% increase in the cost of paper during fiscal year 2009, as paper mills closed,
keeping prices up.  The Company continues to seek purchasing
alternatives, more economical delivery methods for the products, and additional
ways to reduce the costs of production and distribution.





Office
and administration





Year
      Ended April 30,
                  
                  2009
                  
                  
                  2008
                  
                  
                  2007
                  
                  
                  Percentage
      Change(in thousands)
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  09 vs 08
                  
                  
                  08 vs 07Office
      and administration
                  
                  $
                  10,600
                  
                  
                  $
                  9,520
                  
                  
                  $
                  7,981
                  
                  
                  
                  11.3
                  %
                  
                  
                  19.3
                  %




Office
and administration expenses for the twelve months ended April 30, 2009 were
$1,080,000 above expenses for the twelve months ended April 30,
2008.  Professional fees significantly increased as compared to fiscal
year 2008 primarily as a result of the SEC
investigation.  Professional fees fluctuate year to year based on the
level of operations, litigation or regulatory activity requiring the use of
outside professionals.




22




Segment
Operating Profit




The
Company operates in two business segments, Investment Periodicals, Publishing
& Copyright Data and Investment Management.





Investment Periodicals, Publishing & Copyright
                              Data
                            
                            
                            Investment ManagementTwelve Months Ended April 30,
                            
                            
                            Twelve Months Ended April 30,2009
                            
                            
                            2008
                            
                            
                            2007
                            
                            
                            Percentage Change
                            
                            
                            2009
                            
                            
                            2008
                            
                            
                            2007
                            
                            
                            Percentage
                              Change(in thousands)
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            09 vs 08
                            
                            
                            08 vs 07
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            09 vs 08
                            
                            
                            08 vs 07Segment
      revenues from external customers
                            
                            $
                            44,268
                            
                            
                            $
                            49,857
                            
                            
                            $
                            52,480
                            
                            
                            
                            -11.2
                            %
                            
                            
                            -5.0
                            %
                            
                            $
                            24,973
                            
                            
                            $
                            32,821
                            
                            
                            $
                            31,155
                            
                            
                            
                            -23.9
                            %
                            
                            
                            5.3
                            %Segment
      profit from operations
                            
                            $
                            16,237
                            
                            
                            $
                            18,464
                            
                            
                            $
                            19,755
                            
                            
                            
                            -12.1
                            %
                            
                            
                            -6.5
                            %
                            
                            $
                            7,998
                            
                            
                            $
                            16,002
                            
                            
                            $
                            15,901
                            
                            
                            
                            -50.0
                            %
                            
                            
                            0.6
                            %Segment
      profit margin from operations
                            
                            
                            36.7
                            %
                            
                            
                            37.0
                            %
                            
                            
                            37.6
                            %
                            
                            
                            -1.0
                            %
                            
                            
                            -1.6
                            %
                            
                            
                            32.0
                            %
                            
                            
                            48.8
                            %
                            
                            
                            51.0
                            %
                            
                            
                            -34.3
                            %
                            
                            
                            -4.5
                            %





Investment
Periodicals, Publishing & Copyright Data





Segment
revenues, operating profit and operating profit margins from the Company’s
Investment Periodicals, Publishing & Copyright Data segment declined
significantly from the previous fiscal year primarily due to the continued
deterioration in circulation of the total product line. As previously mentioned,
sub-par ranking system performance and competition in the form of free or low
cost investment research on the Internet and research provided by brokerage
firms at no cost to their clients contributed to the decline in revenue. The
recession and turmoil in the markets have also contributed to the decline in
subscriptions as individuals reduced many forms of discretionary spending, or
have shifted investments to fixed income, for which the Company does not provide
research. Investment Periodicals, Publishing & Copyright Data segment profit
margin from operations decreased as a direct result of the decline in
revenue.




Investment
Management




Segment
revenues, operating profit and operating profit margins from the Company’s
Investment Management business segment declined significantly from the previous
fiscal year primarily due to the decline in investment management fees from the
Company’s family of mutual funds that was a direct result of the deterioration
in the underlying assets under management. The decline in assets under
management was primarily the result of the impact by the economic recession and
declining equity markets, sub-par ranking system performance, and the weak
performance of the Value Line Funds and may also be attributable in part to the
impact of the SEC investigation.





Income
from Securities Transactions, net




During
the twelve months ended April 30, 2009 the Company’s income from securities
transactions, net, of $11,625,000 was $5,331,000 higher than income from
securities transactions, net, of $6,294,000 during the twelve months ended April
30, 2008.  Income from securities transactions, net, includes dividend
and interest income of $1,467,000 at April 30, 2009 that was $1,952,000 below
income of $3,419,000 for the twelve months ended April 30,
2008.  Capital gains, net of capital losses during the twelve months
ended April 30, 2009, were $9,788,000, which included a realized capital gain of
$9,539,000 from the sale of equity securities within the Company’s portfolio.
Capital gains, net of capital losses during the comparable twelve months of
fiscal 2008, were $2,874,000, of which $2,793,000 represented distributions from
the Value Line Mutual Funds.


23




Liquidity
and Capital Resources





The
Company had working capital of $80,439,000 as of April 30, 2009 and $88,057,000
as of April 30, 2008.  Cash and short-term securities were
$106,665,000 as of April 30, 2009 and $125,855,000 as of April 30,
2008.





The
Company’s cash and cash equivalents includes $42,068,000 at April 30, 2009 which
is invested in the Value Line Cash Fund.  The Cash Fund operates under
Rule 2a-7 of the Investment Company Act of 1940 and has a portfolio average
maturity of under 90 days.  The Company’s Cash Fund also participates
in the Treasury Guarantee Program for money market funds through September 18,
2009.  There have been no delays in redemption payments from this
fund.  The fund’s portfolio primarily includes U.S. government agency
securities, U.S. Treasuries, certificate of deposits fully backed by the FDIC,
and repurchase agreements collateralized with U.S. Treasuries in which the
custodian physically takes possession of the collateral.





Cash
from operating activities





The
Company’s cash flow from operations of $14,372,000 for the twelve months ended
April 30, 2009 was 29% below cash flow from operations of $20,356,000 for the
twelve months ended April 30, 2008.  The primary change was the timing
of purchases and maturity of fixed income securities within the Company’s
trading portfolio, a decline in the Company’s unearned revenue, a decline in
advisory fees receivable, reduction in accrued benefits, and the timing of
payments to vendors.





Cash
from investing activities





The
Company’s cash inflow from investing activities was $34,581,000 for the twelve
months ended April 30, 2009 compared to cash outflow from investing activities
of $20,027,000 for the twelve months ended April 30, 2008.  The
significant increase in cash inflows is a result of proceeds from the
liquidation of sales in the equity portfolio and the maturity of fixed income
securities during the twelve months of the fiscal year 2009.   A
portion of these proceeds were redeployed into fixed income government debt
securities during the fiscal year.





Cash
from financing activities





The
Company’s net cash outflow from financing activities of $14,972,000 represents a
quarterly dividend of $.30 per share paid in May 2008 for the dividend declared
during the last quarter of fiscal 2008 and $.40 per share paid for the last
three quarters of fiscal 2009. At the July 2008 board meeting, the board
approved a quarterly dividend of $.40 per share, an increase of $.10 per share
or 33%. At the April 2009 board meeting, the board approved a reduced quarterly
dividend of $.30 per share. Therefore, fiscal 2009 net cash outflow from
financing activities representing dividends paid was 25% higher than cash
outflow from financing activities of $11,979,000 in the prior fiscal
year.





Management
believes that the Company’s cash and other liquid asset resources used in its
business together with the future cash flows from operations will be sufficient
to finance current and forecasted  liquidity needs including
operations.  Management does not anticipate any borrowing in fiscal
2010.





Critical
Accounting Estimates and Policies





The
Company prepares its consolidated financial statements in accordance with
accounting principles generally accepted in the United States. 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.




24




The
Company believes the following critical accounting policies reflect the
significant judgments and estimates used in the preparation of its Consolidated
Financial Statements:




·
              Revenue
      recognition
 ·
              Income
      taxes


Revenue
Recognition




The
majority of the Company’s revenues come from the sale of print and electronic
subscriptions, investment management and service and distribution fees, and
copyright proprietary information.  The Company recognizes
subscription revenue in equal amounts over the term of the subscription, which
generally ranges from three months to one year or longer, varying based on the
product or service.  Investment management fees and service and
distribution fee revenues for the Value Line Funds are recognized each month
based upon the daily net asset value of each fund.  Copyright data
fees are calculated monthly based on market fluctuation and billed
quarterly.  The Company believes that the estimates related to revenue
recognition are critical accounting estimates, and to the extent that there are
material differences between its determination of revenues and actual results,
its financial condition or results of operations may be affected.





Income
Taxes




The
Company’s effective annual income tax expense rate is based on the U.S. federal
and state and local jurisdiction tax rates on income and losses that are part of
its Consolidated Financial Statements. Tax-planning opportunities and the blend
of business income and income from securities transactions will impact the
effective tax rate in the various jurisdictions in which the Company operates.
Significant judgment is required in evaluating the Company’s tax
positions.




Tax law
requires items to be included in the tax return at different times from when
these items are reflected in the Company’s Consolidated Financial Statements. As
a result, the effective tax rate reflected in its Consolidated Financial
Statements is different from the tax rate reported on the Company’s tax return
(the Company’s cash tax rate).  Some of these differences are
permanent, such as non-taxable income that is not includable in the Company’s
tax return and expenses that are not deductible in the Company’s tax return, and
some differences reverse over time, such as depreciation and amortization
expenses. These timing differences create deferred tax assets and liabilities.
Deferred tax assets and liabilities are determined based on temporary
differences between the financial reporting and the tax basis of assets and
liabilities.




As of
April 30, 2009, the Company had $493,000 of deferred tax assets, which
included $152,000 of short-term deferred tax assets.  In assessing the
Company’s deferred state and city tax assets, the Company considers whether it
is more likely than not that some portion or all of the deferred tax assets will
not be realized. The ultimate realization of deferred tax assets is dependent
upon the generation of future taxable income during the periods in which those
temporary differences become deductible.




In
assessing the need for a valuation allowance, the Company considers both
positive and negative evidence, including tax-planning strategies, projected
future taxable income, and recent financial performance. If after future
assessments of the realizability of the deferred tax assets the Company
determines a lesser allowance is required, the Company would record a reduction
to the income tax expense and to the valuation allowance in the period this
determination was made. This would cause the Company’s income tax expense,
effective tax rate, and net income to fluctuate.




In
addition, the Company establishes reserves at the time that it determines that
it is more likely than not that it will need to pay additional taxes related to
certain matters. The Company adjusts these reserves, including any impact of the
related interest and penalties, in light of changing facts and circumstances
such as the progress of a tax audit. A number of years may elapse before a
particular matter for which the Company has established a reserve is audited and
finally resolved. The number of years with open tax audits varies depending on
the tax jurisdiction.  Such liabilities are recorded as income taxes
payable in the Company’s Consolidated Balance Sheets. Settlement of any
particular issue would usually require the use of cash.




25




Favorable
resolutions of tax matters for which the Company has previously established
reserves are recognized as a reduction to the Company’s income tax expense when
the amounts involved become known.




Assessing
the future tax consequences of events that have been recognized in the Company’s
financial statements or tax returns requires judgment. Variations in the actual
outcome of these future tax consequences could materially impact the Company’s
financial position, results of operations, or cash flows.





Off-Balance
Sheet Arrangements





The
Company has no off-balance sheet arrangements.




Contractual
Obligations





Below
is a summary of certain contractual obligations (in thousands):




Contractual
                                Obligations
                              
                              Total
                              
                              
                              Less Than
                                1 Year
                              
                              
                              1-3 years
                              
                              
                              3-5 years
                              
                              
                              More Than
                                5 YearsOperating
      Lease Obligations
                              
                              $
                              12,038
                              
                              
                              $
                              2,948
                              
                              
                              $
                              5,896
                              
                              
                              $
                              3,194
                              
                              
                              
                              -Purchase
      Obligations
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -Other
      Long-term Obligations reflected on Balance Sheet
                              
                              $
                              28,997
                              
                              
                              $
                              23,742
                              
                              
                              $
                              5,255
                              
                              
                              
                              -
                              
                              
                              
                              -TOTAL
                              
                              $
                              41,035
                              
                              
                              $
                              26,690
                              
                              
                              $
                              11,151
                              
                              
                              $
                              3,194
                              
                              
                              
                              -





Item
7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.





Market
Risk Disclosures





The
Company’s Consolidated Balance Sheet includes a substantial amount of assets
whose fair values are subject to market risks.  The Company’s
significant market risks are primarily associated with interest rates and equity
prices.  The following sections address the significant market risks
associated with the Company’s business 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 in less than 3 years.





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.


26





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.  Dollars are in
thousands.





Estimated Fair Value afterHypothetical Change in Interest Rates(in thousands)(bp = basis points)6 mo.
                      
                      
                      6 mo.
                      
                      
                      1 yr.
                      
                      
                      1 yr.Fair
                      
                      
                      50bp
                      
                      
                      50bp
                      
                      
                      
                      100bp
                      
                      
                      
                      100bpFixed Income Securities
                      
                      Value
                      
                      
                      increase
                      
                      
                      decrease
                      
                      
                      increase
                      
                      
                      decreaseAs
      of April 30, 2009Investments
      in securities with fixed maturities
                      
                      $
                      63,729
                      
                      
                      $
                      62,573
                      
                      
                      $
                      62,966
                      
                      
                      $
                      61,796
                      
                      
                      $
                      62,222As
      of April 30, 2008Investments
      in securities with fixed maturities
                      
                      $
                      65,030
                      
                      
                      $
                      63,947
                      
                      
                      $
                      64,753
                      
                      
                      $
                      63,146
                      
                      
                      $
                      64,250





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.





Equity
Price Risk





The
carrying values of investments subject to equity price risks are based on quoted
market prices or management’s estimates of fair value 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.





In
fiscal year 2008 and for portions of fiscal year 2009, Value Line invests a
significant level of its assets in equity securities, primarily the Value Line
Funds.  Each mutual fund invests in a variety of positions that may
include equity and non-equity positions.





The
table below summarizes Value Line’s equity price risks as of April 30, 2009 and
2008 and shows the effects of a hypothetical 30% increase and a 30% decrease in
market prices as of those dates.  The selected hypothetical changes do
not reflect what could be considered the best or worst case
scenarios.





Estimated Fair Value
                
                
                Hypothetical PercentageEquity Securities
                
                
                
                
                Hypothetical
                
                
                After Hypothetical
                
                
                Increase/(Decrease) in(in thousands)
                
                Fair Value
                
                
                Price Change
                
                
                Change in Prices
                
                
                Shareholders’ EquityAs
      of April 30, 2009
                
                $
                0
                
                
                
                n/a
                
                
                
                n/a
                
                
                
                n/aAs
      of April 30, 2008
                
                $
                51,870
                
                
                30%
      increase
                
                
                $
                67,431
                
                
                
                11.48
                %30% decrease
                
                
                $
                36,309
                
                
                
                (11.48
                )%


27





Item
8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.





The
following consolidated financial statements of the registrant and its
subsidiaries are included as a part of this Form 10K:





Page NumberReport
      of independent auditors
                38Consolidated
      balance sheets—April 30, 2009 and 2008
                39Consolidated
      statements of income
                  -years
      ended April 30, 2009, 2008 and 2007
                40Consolidated
      statements of cash flows
                  -years
      ended April 30, 2009, 2008 and 2007
                41Consolidated
      statement of changes in shareholders’ equity
                  -years
      ended April 30, 2009, 2008 and 2007
                42Notes
      to the consolidated financial statements
                43





Quarterly
Results (Unaudited)


(in
thousands, except per share amounts)





Income
                  
                  
                  
                  
                  
                  EarningsTotal
                  
                  
                  From
                  
                  
                  Net
                  
                  
                  PerRevenues
                  
                  
                  Operations
                  
                  
                  Income
                  
                  
                  Share2009,
      by QuarterFirst
                  
                  $
                  20,213
                  
                  
                  $
                  7,465
                  
                  
                  $
                  5,062
                  
                  
                  $
                  0.51Second
                  
                  
                  18,327
                  
                  
                  
                  6,266
                  
                  
                  
                  10,542
                  
                  
                  
                  1.05Third
                  
                  
                  15,856
                  
                  
                  
                  4,620
                  
                  
                  
                  3,732
                  
                  
                  
                  0.38Fourth
                  
                  
                  14,845
                  
                  
                  
                  5,872
                  
                  
                  
                  3,617
                  
                  
                  
                  0.36Total
                  
                  $
                  69,241
                  
                  
                  $
                  24,223
                  
                  
                  $
                  22,953
                  
                  
                  $
                  2.302008,
      by QuarterFirst
                  
                  $
                  20,801
                  
                  
                  $
                  8,965
                  
                  
                  $
                  5,943
                  
                  
                  $
                  0.60Second
                  
                  
                  21,110
                  
                  
                  
                  9,416
                  
                  
                  
                  6,359
                  
                  
                  
                  0.63Third
                  
                  
                  21,080
                  
                  
                  
                  9,337
                  
                  
                  
                  8,471
                  
                  
                  
                  0.85Fourth
                  
                  
                  19,687
                  
                  
                  
                  6,732
                  
                  
                  
                  4,777
                  
                  
                  
                  0.48Total
                  
                  $
                  82,678
                  
                  
                  $
                  34,450
                  
                  
                  $
                  25,550
                  
                  
                  $
                  2.562007,
      by QuarterFirst
                  
                  $
                  21,391
                  
                  
                  $
                  9,869
                  
                  
                  $
                  6,271
                  
                  
                  $
                  0.63Second
                  
                  
                  20,745
                  
                  
                  
                  9,061
                  
                  
                  
                  5,909
                  
                  
                  
                  0.59Third
                  
                  
                  21,061
                  
                  
                  
                  8,859
                  
                  
                  
                  7,192
                  
                  
                  
                  0.72Fourth
                  
                  
                  20,438
                  
                  
                  
                  7,847
                  
                  
                  
                  5,235
                  
                  
                  
                  0.53Total
                  
                  $
                  83,635
                  
                  
                  $
                  35,636
                  
                  
                  $
                  24,607
                  
                  
                  $
                  2.47


28





Item
9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON


ACCOUNTING
AND FINANCIAL DISCLOSURE.





There
have been no disagreements with the independent accountants on accounting and
financial disclosure matters.





Item
9A.  CONTROLS AND PROCEDURES.





(a)
            Evaluation
      of Disclosure Controls and
Procedures.





The
Company's Chief Executive Officer, Chief Financial Officer, and Chief Legal
Officer carried out an evaluation of the effectiveness of the Company's
"disclosure controls and procedures" (as defined in the Securities Exchange Act
of 1934 Rules 13a-15(e) or 15d-15(e)) as of April 30, 2009, as required by
paragraph (b) of Exchange Act Rules 13a-15 or 15d-15.  The Company’s
Chief Executive Officer, Chief Financial Officer, and Chief Legal Officer are
engaged in a comprehensive effort to review, evaluate and improve the Company's
controls; however, management does not expect that the Company's disclosure
controls or its internal controls over financial reporting will prevent all
possible errors and fraud.




The
Company maintains disclosure controls and procedures 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 Chief Executive
Officer, Chief Financial Officer, and Chief Legal Officer, as appropriate, to
allow timely decisions regarding required disclosure.




The
Company’s management has evaluated, with the participation of the Company’s
Chief Executive Officer and Chief Financial Officer, the effectiveness of the
Company’s disclosure controls and procedures as of the end of the period covered
by this report. Based on that evaluation, the Chief Executive Officer and the
Chief 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.




This
annual report does not include an attestation report of the Company's registered
public accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by the Company's registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit the Company to provide only management's report
in this annual report.




Changes
in Internal Controls





In the
course of the evaluation of disclosure controls and procedures, the Chief
Executive Officer and Chief Financial Officer considered certain internal
control areas in which the Company has made and is continuing to make changes to
improve and enhance controls.  Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer of the Company concluded that
there were no changes in the Company's internal controls over financial
reporting identified in connection with the evaluation required by paragraph (d)
of Exchange Act Rules 13a-15 or 15d-15 that occurred during the fourth quarter
that have materially affected, or are reasonably likely to materially affect,
the Company's internal controls over financial reporting.


(b)
                Management’s Annual
      Report on Internal Control over Financial
  Reporting.


The
Company’s management is responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Rule 13a-15(f)
under the Exchange Act. Internal control over financial reporting is a process
designed by, or under the supervision of, the company’s principal executive and
principal financial officers, and effected by the board of directors,
management, and other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with US GAAP including those policies and
procedures that:
  29
  (i) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company,
(ii) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with US
GAAP and that receipts and expenditures are being made only in accordance with
authorizations of management and directors of the company, and
(iii) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, or disposition of the company’s assets that
could have a material effect on the financial statements.




Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with policies and procedures may deteriorate.




Under the
supervision and with the participation of management, including the Chief
Executive Officer and Chief Financial Officer, the Company has assessed the
effectiveness of its internal control over financial reporting as of April 30,
2009. In making this assessment, management used the criteria described in
Internal Control — Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). Based on this
assessment and those criteria, management concluded that the Company did
maintain effective internal control over financial reporting as of April 30,
2009.





Changes
in Internal Control over Financial Reporting




There
have been no changes in the Company’s internal control over financial reporting
during the most recently completed fiscal quarter that have materially affected,
or are reasonably likely to materially affect, our internal control over
financial reporting.





Item
9B.  OTHER INFORMATION.





There
were no matters required to be disclosed by the Company in a report on Form 8-K
during the Company's fourth fiscal quarter of the year ended April 30, 2009 that
were not reported.


30





Part
III





Item
10.  DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE
GOVERNANCE.





(a)  Names of Directors, Age as of June 30, 2009 and
      Principal Occupation
                
                Director SinceJean
      Bernhard Buttner* (74).  Chairman of the Board, President,
      and  Chief Executive
                
                1982Officer
      of the Company and Arnold Bernhard & Co., Inc.; Chairman of the Board
      andPresident
      of each of the Value Line Funds until June 2008.Herbert
      Pardes, MD (74).  President and CEO of New York-Presbyterian
      Hospital
                
                2000Dr.
      Edgar A. Buttner (46).  Instructor and Researcher, McLean
      Hospital, since 2002;
                
                2003Postdoctoral
      Fellow, Research Associate, Harvard University 2003 - 2007;
      PostdoctoralFellow,
      Massachusetts Institute of Technology, 1997 - 2001; MD and PhD,
      Columbia  University;Director
      of Arnold Bernhard & Co., Inc.;  Dr. Buttner is the son of
      Jean Bernhard Buttner.Edward
      J. Shanahan (65).  President and Headmaster, Choate Rosemary
      Hall;
                
                2004Director
      and Chairman, Foundation for Greater Opportunity (independent educational
      foundation).Marion
      N. Ruth (74). President, Ruth Realty.
                
                2005Janet
      Eakman (49). Private Investor; MBA, Harvard University Graduate School of
      Business
                
                2007Administration;
      BA, Princeton University.  Mrs. Eakman is a daughter of Jean
      Bernhard Buttner.Howard
      A. Brecher* (55).  Chief Legal Officer, Vice President and
      Secretary of the Company;
                
                1992Director,
      Vice President, Secretary, Treasurer and General Counsel of Arnold
      Bernhard &Co.,
      Inc.; Vice President and Secretary of the Value Line Funds since June
      2008.  Secretary of theAdvisor
      since February 2009.David
      T. Henigson* (51).  Vice President of the Company; Director and
      Vice
                
                1992President
      of Arnold Bernhard & Co., Inc.; Chief Compliance Officer, Vice
      President andSecretary
      of each of the Value Line Funds and Chief Compliance Officer of the
      Company until June 2008.Ruth
      Legon (73). Private Investor.
                
                2009Robert
      M. Perkins (73).  Ranch Owner/Operator; President, Perkins
      Values and Findings,
                
                2009Inc.
      (registered investment advisor) 1984-2005.





* Member
of the Executive Committee.





Except as
noted, the directors have held their respective positions for at least five
years.





(b)
            The
      information pertaining to Executive Officers is set forth in Part I under
      the caption "Executive Officers of the
  Registrant."





Audit
Committee





The
Company has a standing Audit Committee performing the functions described in
Section 3(a)(58)(A) of the Securities Exchange Act of 1934, the members of which
are:  Dr. Herbert Pardes, Edward J. Shanahan and Marion N.
Ruth.


31





Audit Committee Financial
Expert





The
Board of Directors has determined that no member of the Audit Committee is an
“audit committee financial expert” (as defined in the rules and regulations of
the Securities and Exchange Commission).  The Board of Directors
believes that the experience and financial sophistication of the members of the
Audit Committee are sufficient to permit the members of the Audit Committee to
fulfill the duties and responsibilities of the Audit Committee.  All
members of the Audit Committee meet the Nasdaq Stock Market’s audit committee
financial sophistication requirements.





Code of
Ethics





The
Company has adopted a Code of Business Conduct and Code of Ethics that applies
to its principal executive officer, principal financial officer, all other
officers, and all other employees.  The Code of Business Conduct and
Code of Ethics as amended was effective June 11, 2009, and is available on the
Company’s Internet site.





Procedures for Shareholders
to Nominate Directors





There
have been no material changes to the procedures by which shareholders of the
Company may recommend nominees to the Company's Board of Directors implemented
after the disclosure of those procedures contained in the proxy statement for
the Company's 2008 Annual Meeting of Shareholders.





Section 16(a)
Beneficial Ownership Reporting Compliance





Section 16(a)
of the Securities Exchange Act requires the Company's executive officers and
directors, and persons who own more than ten percent of a registered class of
the Company’s equity securities, to file reports of ownership and changes in
ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission.
Executive officers, directors and greater than ten percent shareowners are
required by Securities and Exchange Commission regulations to furnish the
Company with copies of all Forms 3, 4 and 5 they file.





Based
on the Company's review of the copies of such forms that it has received and
written representations from certain reporting persons confirming that they were
not required to file Forms 5 for specified fiscal years, the Company believes
that all its executive officers, directors and greater than ten percent
beneficial owners complied with applicable SEC filing requirements during fiscal
2009.





Item
11.  EXECUTIVE COMPENSATION.





The
information required in response to this Item is incorporated by reference from
the section entitled “Compensation of Directors and Executive Officers” in the
Company’s Proxy Statement for the 2009 Annual Meeting of
Shareholders.


32





Item
12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND


RELATED
STOCKHOLDER MATTERS.





The
following table sets forth information as of June 30, 2009 as to shares of the
Company's Common Stock held by persons known to the Company to be the beneficial
owners of more than 5% of the Company's Common Stock.




Name and Address
                        
                        Number of Shares
                        
                        
                        Percentage of Sharesof Beneficial Owner
                        
                        Beneficially Owned
                        
                        
                        Beneficially Owned1Arnold
      Bernhard & Co., Inc.1
                        
                        
                        8,633,733
                        
                        
                        
                        86.5
                        %220
      East 42nd StreetNew
      York, NY  10017




The
following table sets forth information as of June 30, 2009, with respect to
shares of the Company's Common Stock owned by each director of the Company, by
each executive officer listed in the Summary Compensation Table and by all
executive officers and directors as a group.




Name and Address
                                    
                                    Number of Shares
                                    
                                    
                                    Percentage of Sharesof Beneficial Owner
                                    
                                    Beneficially Owned
                                    
                                    
                                    Beneficially OwnedJean
      Bernhard Buttner
                                    
                                    
                                    100
                                    1,2
                                    
                                    
                                    *
                                    1,2Mitchell
      E. Appel
                                    
                                    
                                    200
                                    
                                    
                                    
                                    *Howard
      A. Brecher
                                    
                                    
                                    200
                                    
                                    
                                    
                                    *David
      T. Henigson
                                    
                                    
                                    150
                                    
                                    
                                    
                                    *Stephen
      R. Anastasio
                                    
                                    
                                    100
                                    
                                    
                                    
                                    *Edgar
      A. Buttner
                                    
                                    
                                    100
                                    
                                    
                                    
                                    *Janet
      Eakman
                                    
                                    
                                    100
                                    
                                    
                                    
                                    *Dr.
      Herbert Pardes
                                    
                                    
                                    100
                                    
                                    
                                    
                                    *Marion
      N. Ruth
                                    
                                    
                                    200
                                    
                                    
                                    
                                    *Edward
      J. Shanahan
                                    
                                    
                                    100
                                    
                                    
                                    
                                    *Ruth
      Legon
                                    
                                    
                                    0
                                    
                                    
                                    
                                    *Robert
      M. Perkins
                                    
                                    
                                    0
                                    
                                    
                                    
                                    *All
      directors and executive officersas
      a group (12 persons)
                                    
                                    
                                    1,350
                                    1,2
                                    
                                    
                                    *
                                    1,2


*Less
than one percent





Securities Authorized for
Issuance under Equity Compensation Plans





As
of the date of this Annual Report on Form 10-K, there were no securities of the
Company authorized for issuance under equity compensation plans.








1Jean
Bernhard Buttner, Chairman of the Board, President and Chief Executive Officer
of the Company, owns all of the outstanding voting
stock of Arnold Bernhard & Co., Inc.  Substantially all of the
non-voting stock of Arnold Bernhard & Co., Inc. is held by members of the
Buttner family.


2Excludes
8,633,733 shares (86.5% of the outstanding shares) owned by Arnold Bernhard
& Co., Inc.


33





Item
13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE.





AB&Co.,
which owns 86.5% of the outstanding shares of the Company’s common stock,
utilizes the services of officers and employees of the Company to the extent
necessary to conduct its business.  The Company and AB&Co.
allocate costs for office space, equipment and supplies and shared staff
pursuant to a servicing and reimbursement agreement.  During the years
ended April 30, 2009, 2008, and 2007, the Company was reimbursed $926,000,
$1,327,000, and $1,100,000, respectively, for payments it made on behalf of and
services it provided to AB&Co.  At April 30, 2009 and 2008,
accounts payable to affiliates included a payable to AB&Co. of $164,000 and
$130,000, respectively.  In addition, a tax-sharing arrangement
allocates the tax liabilities of the two companies between them.  The
Company pays to AB&Co. an amount equal to the Company's liability as if it
filed separate tax returns.  For the years ended April 30, 2009, 2008,
and 2007, the Company made payments to AB&Co. for federal income tax
amounting to $10,958,000, $12,460,000, and $13,450,000, respectively. At April
30, 2009 accrued taxes payable in the Consolidated Balance Sheet included
$360,000 of federal income tax payable to the Parent. At April 30, 2007
prepaid and refundable income taxes in the Consolidated Balance Sheet included
federal tax due from AB&Co. in the amount of $415,000.


The
Company acts as investment adviser and manager for fourteen open-end investment
companies, the Value Line Funds.  The Company earns investment
management fees based upon the average daily net asset values of the respective
funds. The Company also manages a fixed income portfolio for the Parent for
which it received an asset based fee of  $51,000 during fiscal year
2009. ESI receives service and distribution fees under rule 12b-1 of the
Investment Company Act of 1940 from certain Value Line Funds for which EULAV is
the adviser.  For certain periods prior to December 2004, ESI earned
brokerage commission income on securities transactions executed by ESI on behalf
of the funds that were cleared on a fully disclosed basis through non-affiliated
brokers, who received a portion of the gross commission.  For the
years ended April 30, 2009, 2008, and 2007, investment management fees, and
service and distribution fees amounted to $24,109,000,  $31,644,000,
and $30,026,000, respectively, after fee waivers.  These amounts
include service and distribution fees of  $5,373,000, $7,113,000, and
$7,299,000, respectively.  The related receivables from the funds for
management advisory fees and service and distribution fees included in
Receivable from affiliates were $1,475,000 and $2,557,000 at April 30, 2009 and
2008, respectively.




For
any transaction required to be disclosed in Item 404(a) of Regulation S-K, the
Company’s policy and procedure is to have such transactions reviewed by the full
Board of Directors for approval. The Company's written Code of Business Conduct
and Ethics prohibits activities that present conflicts of interest between the
personal interest of an officer, director or employee and the interests of the
Company. The Company's policy and procedure with respect to approval of related
party transactions is not in writing but, in the Company's view, is a logical
extension of the Code of Business Conduct and Ethics since it provides a
mechanism for assuring that transactions with related parties do not compromise
the interests of the Company.  Transactions covered for the fiscal
year ended April 30, 2009 include shared taxes that are paid by the Company to
the Parent and shared services such as overhead and personnel costs that are
charged to the Parent company.  The amounts are disclosed in the
financial footnotes #3 (Related Party Transactions) and #6 (Taxes).





Director
Independence





The
information required with respect to director independence and related matters
is incorporated by reference from the section entitled “Compensation of
Directors and Executive Officers” in the Company’s Proxy Statement for the 2009
Annual Meeting of Shareholders.


34





Item
14.  PRINCIPAL ACCOUNTING FEES AND SERVICES.





Audit and Non-Audit Fees





The
following table illustrates for the fiscal years ended April 30, fees paid to
the Company’s independent auditor, Horowitz & Ullmann, for services
provided:


2009
                  
                  
                  2008Audit
      fees
                  
                  $
                  155,500
                  
                  
                  $
                  150,255Audit-related
      fees
                  
                  $
                  13,310
                  
                  
                  $
                  12,775Tax
      fees
                  
                  $
                  68,640
                  
                  
                  $
                  80,745All
      other fees
                  
                  $
                  4,005
                  
                  
                  $
                  5,130





Audit
Committee Pre-Approval Policies and Procedures





The
Audit Committee of the Company's Board of Directors approves all services
provided by Horowitz & Ullmann, prior to the provision of those services and
has not adopted any specific pre-approval policies and procedures.





Part
IV





Item
15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.





(a)  1.  Financial
Statements- See Part II Item 8.





All other
Schedules are omitted because they are not applicable or the required
information is shown in the financial statements
or notes thereto.





(b)  Exhibits





3.1
                    Articles
      of Incorporation of the Company, as amended through April 17, 1983, are
      incorporated by reference to the Registration Statement - Form S-1 of
      Value Line, Inc. Part II, Item 16.(a) 3.1 filed with the Securities and
      Exchange Commission on April 7, 1983.3.2
                    Certificate
      of Amendment of Certificate of Incorporation dated October 24, 1989 is
      incorporatedby
      reference to the Amended Annual Report on Form 10K-A for the year ended
      April 30, 2008 filed 6/5/2009.10.8
                    Form
      of tax allocation arrangement between the Company and AB&Co.
      incorporated by reference to the Registration Statement - Form S-1 of
      Value Line, Inc. Part II, Item 16.(a) 10.8 filed with the Securities and
      Exchange Commission on April 7, 1983.10.9
                    Form
      of Servicing and Reimbursement Agreement between the Company and
      AB&Co., dated as of November 1, 1982 incorporated by reference to the
      Registration Statement - Form S-1 of Value Line, Inc. Part II, Item 16.(a)
      10.9 filed with the Securities and Exchange Commission on April 7,
      1983.10.10
                    Value
      Line, Inc. Profit Sharing and Savings Plan as amended and restated
      effective May 1, 2002, including Amendment dated 7/10/2002, First
      Amendment dated 4/24/2003, Second Amendment dated 5/1/2003, Third
      Amendment (A) dated 3/28/2005, Third Amendment (B) dated 6/26/2007,
      incorporated by reference to the Amended Annual Report on Form 10K-A for
      the year ended April 30, 2008 filed 6/5/2009.10.13
                    Lease
      for the Company's premises at 220 East 42nd Street, New York, NY
      incorporated by reference to theAnnual
      Report on Form 10-K for the year ended April 30, 1994 filed 6/17/1994, SEC
      file # 000-11306.10.14
                    Lease
      amendment dated September 14, 2000 was filed on amended Form 10-K dated
      8/17/2001; lease amendment dated January 19, 2006 was filed on Form 10-K
      dated 7/28/2006 , and lease amendment dated April 23, 2007 was filed on
      Form 10-K dated 7/20/2007.14
                    Code
      of Business Conduct and Code of Ethics as amended and effective June 11,
      2009 is filed as exhibit 14 on Form 10-K for the year ended April 30, 2009
      as filed with the Securities and Exchange Commission on July 16,
      2009.21
                    Subsidiaries
      of the Registrant.31
                    Rules
      13a-14(a) and 15d-14(a) Certifications.32
                    Section
      1350
Certifications.


35





SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report on Form 10-K for the fiscal
year ended April 30, 2009, to be signed on its behalf by the undersigned,
thereunto duly authorized.





VALUE
      LINE, INC.(Registrant)By:
              s/ Jean Bernhard ButtnerJean
      Bernhard ButtnerChairman
      & Chief Executive Officer(Principal
      Executive Officer)





Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.





By:
              s/ Jean Bernhard ButtnerJean
      Bernhard ButtnerChairman
      & Chief Executive Officer(Principal
      Executive Officer)By:
              s/ Mitchell E. AppelMitchell
      E. AppelChief
      Financial Officer(Principal
      Financial Officer)





Dated:  July
16, 2009


36





Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed by the undersigned on behalf of the Registrant as Directors of the
Registrant.





s/ Jean Bernhard Buttner
                
                s/ Howard A. BrecherJean
      Bernhard Buttner
                
                Howard
      A. Brechers/ Edgar A. Buttner
                
                s/ Marion N. RuthEdgar
      A. Buttner
                
                Marion
      N. Ruths/ Edward J. Shanahan
                
                s/ David T. HenigsonEdward
      J. Shanahan
                
                David
      T. Henigsons/ Janet Eakman
                
                s/  Herbert
  PardesJanet
      Eakman
                
                Dr.
      Herbert Pardess/ Ruth Legon
                
                s/  Robert M.
    PerkinsRuth
      Legon
                
                Robert
      M. PerkinsDated:  July
      16, 2009


37





38


Part
II


Item
8.


Value
Line, Inc.


Consolidated
Balance Sheets


(in
thousands, except share amounts)




April
      30,
                  
                  
                  April
      30,2009
                  
                  
                  2008AssetsCurrent
      Assets:Cash
      and cash equivalents (including short term investments
      of $42,068 and $8,159, respectively)
                  
                  $
                  42,936
                  
                  
                  $
                  8,955Trading
      securities
                  
                  
                  17,203
                  
                  
                  
                  19,857Securities
      available for sale
                  
                  
                  46,526
                  
                  
                  
                  97,043Accounts
      receivable, net of allowance for doubtful accounts
      of $47 and $107, respectively
                  
                  
                  2,353
                  
                  
                  
                  2,733Receivable
      from affiliates
                  
                  
                  1,312
                  
                  
                  
                  2,445Prepaid
      expenses and other current assets
                  
                  
                  1,047
                  
                  
                  
                  1,048Deferred
      income taxes
                  
                  
                  493
                  
                  
                  
                  155Total
      current assets
                  
                  
                  111,870
                  
                  
                  
                  132,236Long
      term assets:Property
      and equipment, net
                  
                  
                  4,474
                  
                  
                  
                  4,709Capitalized
      software and other intangible assets, net
                  
                  
                  1,211
                  
                  
                  
                  1,008Total
      long term assets
                  
                  
                  5,685
                  
                  
                  
                  5,717Total
      assets
                  
                  $
                  117,555
                  
                  
                  $
                  137,953Liabilities
      and Shareholders' EquityCurrent
      Liabilities:Accounts
      payable and accrued liabilities
                  
                  $
                  2,865
                  
                  
                  $
                  5,135Accrued
      salaries
                  
                  
                  1,438
                  
                  
                  
                  1,471Dividends
      payable
                  
                  
                  2,994
                  
                  
                  
                  2,995Accrued
      taxes payable
                  
                  
                  392
                  
                  
                  
                  129Unearned
      revenue
                  
                  
                  23,742
                  
                  
                  
                  26,610Deferred
      income taxes
                  
                  
                  -
                  
                  
                  
                  7,839Total
      current liabilities
                  
                  
                  31,431
                  
                  
                  
                  44,179Long
      term liabilities:Unearned
      revenue
                  
                  
                  5,255
                  
                  
                  
                  5,920Total
      long term liabilities
                  
                  
                  5,255
                  
                  
                  
                  5,920Shareholders'
      Equity:Common
      stock, $.10 par value; authorized 30,000,000 shares;
      issued 10,000,000 shares
                  
                  
                  1,000
                  
                  
                  
                  1,000Additional
      paid-in capital
                  
                  
                  991
                  
                  
                  
                  991Retained
      earnings
                  
                  
                  78,935
                  
                  
                  
                  70,954Treasury
      stock, at cost (18,400 shares on 4/30/09 and
      4/30/08)
                  
                  
                  (354
                  )
                  
                  
                  (354
                  )Accumulated
      other comprehensive income, net of tax
                  
                  
                  297
                  
                  
                  
                  15,263Total
      shareholders' equity
                  
                  
                  80,869
                  
                  
                  
                  87,854Total
      liabilities and shareholders' equity
                  
                  $
                  117,555
                  
                  
                  $
                  137,953




See
independent auditor's report and accompanying notes to the consolidated
financial statements.


39





Part
II


Item
8.




Value
Line, Inc.


Consolidated
Statements of Income


(in
thousands, except per share amounts)




Years
      ended April 30,2009
                        
                        
                        2008
                        
                        
                        2007Revenues:Investment
      periodicals and related publications
                        
                        $
                        39,935
                        
                        
                        $
                        42,791
                        
                        
                        $
                        45,619Copyright
      data fees
                        
                        
                        4,333
                        
                        
                        
                        7,066
                        
                        
                        
                        6,861Investment
      management fees & services
                        
                        
                        24,973
                        
                        
                        
                        32,821
                        
                        
                        
                        31,155Total
      revenues
                        
                        
                        69,241
                        
                        
                        
                        82,678
                        
                        
                        
                        83,635Expenses:Advertising
      and promotion
                        
                        
                        10,874
                        
                        
                        
                        13,863
                        
                        
                        
                        14,628Salaries
      and employee benefits
                        
                        
                        17,676
                        
                        
                        
                        18,594
                        
                        
                        
                        18,409Production
      and distribution
                        
                        
                        5,868
                        
                        
                        
                        6,251
                        
                        
                        
                        6,981Office
      and administration
                        
                        
                        10,600
                        
                        
                        
                        9,520
                        
                        
                        
                        7,981Total
      expenses
                        
                        
                        45,018
                        
                        
                        
                        48,228
                        
                        
                        
                        47,999Income
      from operations
                        
                        
                        24,223
                        
                        
                        
                        34,450
                        
                        
                        
                        35,636Income
      from securities transactions, net
                        
                        
                        11,625
                        
                        
                        
                        6,294
                        
                        
                        
                        4,867Income
      before income taxes
                        
                        
                        35,848
                        
                        
                        
                        40,744
                        
                        
                        
                        40,503Provision
      for income taxes
                        
                        
                        12,895
                        
                        
                        
                        15,194
                        
                        
                        
                        15,896Net
      income
                        
                        $
                        22,953
                        
                        
                        $
                        25,550
                        
                        
                        $
                        24,607Earnings
      per share, basic & fully diluted
                        
                        $
                        2.30
                        
                        
                        $
                        2.56
                        
                        
                        $
                        2.47Weighted
      average number of common shares
                        
                        
                        9,981,600
                        
                        
                        
                        9,981,600
                        
                        
                        
                        9,981,600




See
independent auditor's report and accompanying notes to the consolidated
financial statements.


40





Part
II


Item
8.




Value
Line, Inc.


Consolidated
Statements of Cash Flows


(in
thousands)




Years
      ended April 30,2009
                
                
                2008
                
                
                2007Cash
      flows from operating activities:Net
      income
                
                $
                22,953
                
                
                $
                25,550
                
                
                $
                24,607Adjustments
      to reconcile net income to net cash provided by operating
      activities:Depreciation
      and amortization
                
                
                1,140
                
                
                
                1,619
                
                
                
                2,063Amortization
      of bond premiums
                
                
                1,655
                
                
                
                -
                
                
                
                -Realized
      gains on sales of securities
                
                
                (9,470
                )
                
                
                (2,792
                )
                
                
                (2,164
                )Unrealized
      (gains)/losses on securities
                
                
                (318
                )
                
                
                (82
                )
                
                
                112Deferred
      income taxes
                
                
                109
                
                
                
                (151
                )
                
                
                (138
                )Changes
      in assets and liabilities:Proceeds
      from sales of trading securities
                
                
                9,027
                
                
                
                -
                
                
                
                15,000Purchases
      of trading securities
                
                
                (6,583
                )
                
                
                (3,926
                )
                
                
                (8,471
                )(Decrease)/increase
      in unearned revenue
                
                
                (3,533
                )
                
                
                (1,970
                )
                
                
                (3,226
                )(Decrease)/increase
      in deferred charges
                
                
                110
                
                
                
                160
                
                
                
                (64
                )(Decrease)/increase
      in accts. payable & accrued expenses
                
                
                (2,380
                )
                
                
                (722
                )
                
                
                (806
                )Increase/(decrease)
      in accrued salaries
                
                
                (33
                )
                
                
                (74
                )
                
                
                50Increase/(decrease)
      in accrued taxes payable
                
                
                263
                
                
                
                129
                
                
                
                (532
                )(Increase)/decrease
      in prepaid expenses and current assets
                
                
                (81
                )
                
                
                560
                
                
                
                (481
                )Decrease
      in prepaid and refundable income taxes
                
                
                -
                
                
                
                510
                
                
                
                -Decrease/(increase)
      in accounts receivable
                
                
                380
                
                
                
                1,196
                
                
                
                (892
                )(Increase)/decrease
      in receivable from affiliates
                
                
                1,133
                
                
                
                349
                
                
                
                123Total
      adjustments
                
                
                (8,581
                )
                
                
                (5,194
                )
                
                
                574Net
      cash provided by operating activities
                
                
                14,372
                
                
                
                20,356
                
                
                
                25,181Cash
      flows from investing activities:Proceeds
      from sales of equity securities
                
                
                37,760
                
                
                
                2,793
                
                
                
                2,065Purchase
      of equity securities
                
                
                (9
                )
                
                
                (4,231
                )
                
                
                (2,280
                )Proceeds
      from sales of fixed income securities
                
                
                45,526
                
                
                
                9,622
                
                
                
                10,825Purchases
      of fixed income securities
                
                
                (47,510
                )
                
                
                (27,602
                )
                
                
                (18,742
                )Acquisition
      of property and equipment
                
                
                (203
                )
                
                
                (265
                )
                
                
                (52
                )Expenditures
      for capitalized software
                
                
                (983
                )
                
                
                (344
                )
                
                
                (743
                )Net
      cash provided by/(used in) investing activities
                
                
                34,581
                
                
                
                (20,027
                )
                
                
                (8,927
                )Cash
      flows from financing activities:Dividends
      paid
                
                
                (14,972
                )
                
                
                (11,979
                )
                
                
                (10,980
                )Net
      cash used in financing activities
                
                
                (14,972
                )
                
                
                (11,979
                )
                
                
                (10,980
                )Net
      increase/(decrease) in cash and cash equivalents
                
                
                33,981
                
                
                
                (11,650
                )
                
                
                5,274Cash
      and cash equivalents at beginning of year
                
                
                8,955
                
                
                
                20,605
                
                
                
                15,331Cash
      and cash equivalents at end of year
                
                $
                42,936
                
                
                $
                8,955
                
                
                $
                20,605




See
independent auditor's report and accompanying notes to the consolidated
financial statements.


41





Part
II


Item
8.




VALUE
LINE, INC.


CONSOLIDATED
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY


FOR
THREE YEARS ENDED APRIL 30, 2009, 2008 & 2007


(in
thousands, except share amounts)





Common
      stock
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              AccumulatedNumber
              
              
              Par
              
              
              Additional
              
              
              
              
              
              
              
              
              
              
              
              Otherof
              
              
              Value
              
              
              paid-in
              
              
              Treasury
              
              
              Comprehensive
              
              
              Retained
              
              
              Comprehensiveshares
              
              
              Amount
              
              
              capital
              
              
              Stock
              
              
              income
              
              
              earnings
              
              
              income
              
              
              TotalBalance
      at April 30, 2006
              
              
              9,981,600
              
              
              $
              1,000
              
              
              $
              991
              
              
              $
              (354
              )
              
              
              
              
              $
              44,256
              
              
              $
              16,042
              
              
              $
              61,935Comprehensive
      incomeNet
      income
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              $
              24,607
              
              
              
              24,607
              
              
              
              
              
              
              
              24,607Other
      comprehensive income, net of tax:Change
      in unrealized gains on securities, net of taxes
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              510
              
              
              
              
              
              
              
              510
              
              
              
              510Comprehensive
      income
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              $
              25,117Dividends
      declared
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (11,480
              )
              
              
              
              
              
              
              (11,480
              )Balance
      at April 30, 2007
              
              
              9,981,600
              
              
              $
              1,000
              
              
              $
              991
              
              
              $
              (354
              )
              
              
              
              
              
              $
              57,383
              
              
              $
              16,552
              
              
              $
              75,572Comprehensive
      incomeNet
      income
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              $
              25,550
              
              
              
              25,550
              
              
              
              
              
              
              
              25,550Other
      comprehensive income, net of tax:Change
      in unrealized gains on securities, net of taxes
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (1,289
              )
              
              
              
              
              
              
              (1,289
              )
              
              
              (1,289
              )Comprehensive
      income
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              $
              24,261Dividends
      declared
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (11,979
              )
              
              
              
              
              
              
              (11,979
              )Balance
      at April 30, 2008
              
              
              9,981,600
              
              
              $
              1,000
              
              
              $
              991
              
              
              $
              (354
              )
              
              
              
              
              
              $
              70,954
              
              
              $
              15,263
              
              
              $
              87,854Comprehensive
      incomeNet
      income
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              $
              22,953
              
              
              
              22,953
              
              
              
              
              
              
              
              22,953Other
      comprehensive income, net of tax:Change
      in unrealized gains on securities, net of taxes
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (14,966
              )
              
              
              
              
              
              
              (14,966
              )
              
              
              (14,966
              )Comprehensive
      income
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              $
              7,987Dividends
      declared
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (14,972
              )
              
              
              
              
              
              
              (14,972
              )Balance
      at April 30, 2009
              
              
              9,981,600
              
              
              $
              1,000
              
              
              $
              991
              
              
              $
              (354
              )
              
              
              
              
              
              $
              78,935
              
              
              $
              297
              
              
              $
              80,869




See
independent auditor's report and accompanying notes to the consolidated
financial statements.


42




Value
Line, Inc.


Notes
to Consolidated Financial Statements





Note
1-Organization and Summary of Significant Accounting Policies:





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


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 3).





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 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 advanced 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, however they 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 mutual funds’ shares. 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
3).





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
Statement of Financial Accounting Standards No.115, "Accounting for Certain
Investments in Debt and Equity Securities". 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 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.


43


Value
Line, Inc.


Notes
to Consolidated Financial Statements





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 Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 157, Fair Value Measurements
(“FAS 157"). In accordance with FAS 157, fair value is defined 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. FAS 157 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
valuation techniques used by the Company to measure fair value during the fiscal
year 2009 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 service uses
discounted future cash flows to calculate the net present value.


The
following is a summary of the inputs used as of April 30, 2009 in valuing the
Company’s investments carried at fair value:





(In Thousands)Valuation
      Inputs
                    
                    Total
                      Investments
                    
                    
                    Cash
                      Equivalents
                    
                    
                    Investments in
                      Trading
                      Securities
                    
                    
                    Investments in
                      Securities
                      Available for
                      SaleLevel
      1 - Quoted Prices
                    
                    $
                    42,068
                    
                    
                    $
                    42,068
                    
                    
                    
                    -
                    
                    
                    
                    -Level
      2 - Other Significant Observable Inputs
                    
                    $
                    63,729
                    
                    
                    
                    -
                    
                    
                    $
                    17,203
                    
                    
                    
                    46,526Level
      3 - Significant Unobservable Inputs
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Total
                    
                    $
                    105,797
                    
                    
                    $
                    42,068
                    
                    
                    $
                    17,203
                    
                    
                    $
                    46,526





The
Company had no other financial instruments including futures, forwards and swap
contracts. For the period ended April 30, 2009, there were no Level 3
investments. The Company does not have any liabilities subject to FAS
157.





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.


44


Value
Line, Inc.


Notes
to Consolidated Financial Statements





Income
Taxes:


The
Company computes its income tax provision in accordance with the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes". Deferred tax liabilities and assets are recognized for the expected
future tax consequences of events that have been reflected in the Consolidated
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.


In July
2006, the Financial Accounting Standards Board issued Interpretation No. 48,
"Accounting for Uncertainty in Income Taxes - an Interpretation of FASB
Statement No. 109" (the "Interpretation" or "FIN 48"). The Interpretation
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. The Interpretation is effective for fiscal years
beginning after December 15, 2006, and is to be applied to all open tax years as
of the date of effectiveness. As of April 30, 2009, management has reviewed the
tax positions for the years still subject to tax audit under the statute of
limitations, evaluated the implications of FIN 48, 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 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 April 30, 2009 and 2008, cash equivalents included $42,068,000 and
$8,159,000, respectively, invested in the Value Line Cash Fund.





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.





Note
2-Supplementary Cash Flow Information:





Cash
payments for income taxes were $12,464,000, $15,036,000, and $16,928,000 in
fiscal 2009, 2008, and 2007, respectively. Interest payments of $18,000, $0 and
$36,000 were made during fiscal 2009, 2008 and 2007, respectively.





Note
3-Related Party Transactions:





On June
30, 2008, Company reorganized its investment management division into EULAV
Asset Management, LLC (“EULAV”), a newly formed, wholly-owned subsidiary. As
part of the reorganization, each advisory agreement was transferred from Value
Line, Inc. to EULAV and EULAV replaced Value Line, Inc. as the Fund’s investment
adviser. The portfolio managers, who are now employees of EULAV, have not
changed as a result of the reorganization.


The
Company's subsidiary, 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 plan. 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 average daily net assets of the respective
mutual fund in accordance with each fund's prospectus.


For the
twelve months ended April 30, 2009, 2008, and 2007 investment management fees
and 12b-1 service and distribution fees amounted to $24,109,000, $31,644,000,
and $30,026,000, respectively, which included fee waivers for certain of the
Value Line Funds. These amounts included service and distribution fees of
$5,373,000, $7,113,000, and $7,299,000 earned by ESI in fiscal years 2009, 2008,
and 2007, respectively. The related receivables from the funds for investment
management fees and service and distribution fees included in Receivables from
affiliates were $1,475,000, and $2,557,000 at April 30, 2009 and April 30, 2008,
respectively.


For the
twelve months ended April 30, 2009, 2008, and 2007 total management fee waivers
were $208,000, $226,000, and $250,000, respectively, and service and
distribution fee waivers were $2,889,000, $3,774,000, and $3,127,000,
respectively. The Company and its subsidiary, ESI, have no right to recoup the
previously waived amounts of management fees and 12b-1 fees.


45


Value
Line, Inc.


Notes
to Consolidated Financial Statements





As of
April 30, 2009, the Company had $42,068,000 invested in the Value Line Cash Fund
representing 1.8% of total fund assets. Purchases and redemptions routinely
occur in the Value Line Cash Fund as part of business operations.


For the
years ended April 30, 2009, 2008 and 2007, the Company was reimbursed $926,000,
$1,327,000, and $1,100,000, respectively, for payments it made on behalf of and
services it provided to the Parent. At April 30, 2009 and 2008, Receivables from
affiliates were reduced by the Payables to the Parent in the amount of $164,000
and $130,000, respectively.


For the
years ended April 30, 2009, 2008, and 2007, the Company made payments to the
Parent for federal income tax amounting to $10,958,000, $12,460,000, and
$13,450,000, respectively. At April 30, 2009 and 2008, accrued taxes payable
included a federal tax liability owed to the Parent in the amount of $360,000
and $164,000, respectively. These transactions are in accordance with the tax
sharing arrangement described in Note 6.


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.





Note
4-Investments:





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:





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. Trading securities held by the
Company at April 30, 2008 had an aggregate cost of $20,042,000 and a market
value of $19,857,000. There were no sales of trading securities during the
fiscal year ended April 30, 2008. The proceeds from sales of trading securities
during the fiscal year ended April 30, 2009 were $9,027,000 and the related net
realized trading gains amounted to $105,000. The net changes in unrealized gains
or losses for the periods ended April 30, 2009, 2008 and 2007, of $255,000 gain,
$82,000 gain, and $178,000 loss, respectively, were included in the Consolidated
Statement of Income.





Securities
Available for Sale


Equity
Securities:





The
Company sold its portfolio of equity securities during the second quarter of
fiscal 2009 and did not hold any equity securities as of April 30,
2009.


The
proceeds from sales of equity securities classified as available for sale during
the twelve months ended April 30, 2009 and 2008, were $37,760,000 and $2,793,000
and the related capital gains, net of capital losses were $9,539,000 and
$2,793,000, respectively, which were reclassified to net income from Accumulated
Other Comprehensive Income. The decreases in gross unrealized gains on equity
securities classified as available for sale due to changes in market conditions
of $14,356,000 and $2,081,000, net of deferred taxes of $5,054,000 and $732,000,
were included in Shareholders' Equity at April 30, 2009 and 2008,
respectively.


The
aggregate cost of the equity securities classified as available for sale, which
consist of investments in the Value Line Funds, was $28,149,000 and the market
value was $51,870,000 at April 30, 2008. The total gains for equity securities
with net gains included in Accumulated Other Comprehensive Income on the
Consolidated Balance Sheet are $23,972,000 and $25,859,000, net of deferred
taxes of $8,438,000 and $9,102,000, as of April 30, 2008 and 2007, respectively.
The total losses for equity securities with net losses included in Accumulated
Other Comprehensive Income on the Consolidated Balance Sheet are $251,000, net
of deferred tax benefit of $89,000, as of April 30, 2008. The total losses for
equity securities with net losses included in Accumulated Other Comprehensive
Income on the Consolidated Balance Sheet are $58,000, net of deferred tax
benefit of $20,000, as of April 30, 2007.


The
proceeds from sales of securities including capital gain distributions
reinvested in the Value Line Funds during the fiscal years ended April 30, 2009,
2008, and 2007 were $37,760,000, $2,793,000, and $2,065,000,
respectively.




46


Value
Line, Inc.
 Notes
to Consolidated Financial Statements
  Government
Debt Securities (Fixed Income Securities):
 
 Government
debt securities consist of federal, state, and local government securities
within the United States. The aggregate cost and fair value at April 30, 2009
for government debt securities classified as available for sale were as
follows:


(In Thousands)AmortizedHistorical
                            
                            
                            
                            
                            
                            GrossUnrealizedMaturity
                            
                            Cost
                            
                            
                            Fair Value
                            
                            
                            Holding GainsDue
      within 1 year
                            
                            $
                            8,593
                            
                            
                            $
                            8,598
                            
                            
                            $
                            5Due
      after 1 year through 5 years
                            
                            
                            37,471
                            
                            
                            
                            37,924
                            
                            
                            
                            453Total
      investment in government debt securities
                            
                            $
                            46,064
                            
                            
                            $
                            46,522
                            
                            
                            $
                            458





The
aggregate cost and fair value at April 30, 2008 for government debt securities
classified as available for sale were as follows:





(In Thousands)Historical
                          
                          
                          
                          
                          
                          Gross UnrealizedMaturity
                          
                          Cost
                          
                          
                          Fair Value
                          
                          
                          Holding LossesDue
      within 1 year
                          
                          $
                          24,261
                          
                          
                          $
                          23,921
                          
                          
                          $
                          (340
                          )Due
      after 1 year through 5 years
                          
                          
                          21,079
                          
                          
                          
                          21,252
                          
                          
                          
                          173Total
      investment in government debt securities
                          
                          $
                          45,340
                          
                          
                          $
                          45,173
                          
                          
                          $
                          (167
                          )





The
increase in gross unrealized gain on fixed income securities classified as
available for sale of $625,000 and $91,000 net of deferred income tax of
$220,000 and $32,000, respectively, were included in Accumulated Other
Comprehensive Income on the Consolidated Balance Sheets as of April 30, 2009 and
2008, respectively.


The
average yield on the Government debt securities classified as available for sale
at April 30, 2009 and April 30, 2008 was 2.52% and 2.91%,
respectively.


Proceeds
from sales of government debt securities classified as available for sale during
fiscal years 2009, 2008, and 2007 were $45,526,000, $9,620,000, and $10,825,000,
respectively. During fiscal 2009, gains on sales of fixed income securities of
$242,000 and losses of $416,000 and in fiscal 2007, losses of $78,000,
respectively, were reclassified from Accumulated Other Comprehensive Income in
the Balance Sheet to the Consolidated Statement of Income.


For the
years ended April 30, 2009, 2008, and 2007, income from securities transactions
also included $239,000, $909,000, and $971,000 of dividend income; $1,228,000,
$2,510,000, and $1,879,000 of interest income, net of bond amortization of
$1,655,000 during fiscal year 2009. In fiscal years of 2009, 2008 and 2007
income from securities transactions also included $18,000, $0 and $36,000 of
related interest expense, respectively.


47


Value
Line, Inc.


Notes
to Consolidated Financial Statements





Note
5-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 consist of the following:





April 30,2009
                        
                        
                        2008(in
      thousands)Land
                        
                        $
                        726
                        
                        
                        $
                        726Building
      and leasehold improvements
                        
                        
                        7,283
                        
                        
                        
                        7,283Furniture
      and equipment
                        
                        
                        11,119
                        
                        
                        
                        10,91719,128
                        
                        
                        
                        18,926Accumulated
      depreciation and amortization
                        
                        
                        (14,654
                        )
                        
                        
                        (14,217
                        )$
                        4,474
                        
                        
                        $
                        4,709





Note
6-Federal, State and Local Income Taxes:





The
Company computes its income tax provision in accordance with the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes".




The
provision for income taxes includes the following:





Year
      ended April 30,2009
                  
                  
                  2008
                  
                  
                  2007(in
      thousands)Current:Federal
                  
                  $
                  11,410
                  
                  
                  $
                  12,570
                  
                  
                  $
                  12,575State
      and local
                  
                  
                  1,290
                  
                  
                  
                  2,775
                  
                  
                  
                  3,45912,700
                  
                  
                  
                  15,345
                  
                  
                  
                  16,034Deferred:Federal
                  
                  
                  212
                  
                  
                  
                  (115
                  )
                  
                  
                  (87
                  )State
      and local
                  
                  
                  (17
                  )
                  
                  
                  (36
                  )
                  
                  
                  (51
                  )195
                  
                  
                  
                  (151
                  )
                  
                  
                  (138
                  )Provision
      for income taxes
                  
                  $
                  12,895
                  
                  
                  $
                  15,194
                  
                  
                  $
                  15,896





Deferred
income taxes 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 deferred tax
(liability)/assets are as follows:





Year
      ended April 30,2009
                  
                  
                  2008(in
      thousands)Unrealized
      gains on securities held for sale
                  
                  $
                  (161
                  )
                  
                  $
                  (8,291
                  )Unrealized
      gains/losses on trading securities
                  
                  
                  (25
                  )
                  
                  
                  87Depreciation
      and amortization
                  
                  
                  352
                  
                  
                  
                  341Deferred
      professional fees
                  
                  
                  148
                  
                  
                  
                  181Deferred
      charges
                  
                  
                  210
                  
                  
                  
                  (36
                  )Other,
      net
                  
                  
                  (31
                  )
                  
                  
                  34Deferred
      tax asset/(liability)
                  
                  $
                  493
                  
                  
                  $
                  (7,684
                  )





Included
in deferred income taxes in total current assets are deferred state and local
income taxes of $152,000 and $155,000 at April 30, 2009 and 2008,
respectively.


48


Value
Line, Inc.


Notes
to Consolidated Financial Statements





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:





Year
      ended April 30,2009
                        
                        
                        2008
                        
                        
                        2007(in
      thousands)Tax
      expense at the U.S. statutory rate
                        
                        $
                        12,547
                        
                        
                        $
                        14,260
                        
                        
                        $
                        14,176Increase
      (decrease) in tax expense from:State
      and local income taxes, net of federal income tax benefit
                        
                        
                        827
                        
                        
                        
                        1,780
                        
                        
                        
                        2,215Effect
      of tax exempt income and dividend deductions
                        
                        
                        (241
                        )
                        
                        
                        (799
                        )
                        
                        
                        (455
                        )Other,
      net
                        
                        
                        (238
                        )
                        
                        
                        (47
                        )
                        
                        
                        (40
                        )Provision
      for income taxes
                        
                        $
                        12,895
                        
                        
                        $
                        15,194
                        
                        
                        $
                        15,896





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





Note
7-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 which is determined by a formula based on the salaries of eligible
employees and the amount of consolidated net operating income as defined in the
Plan. There was no profit sharing contribution in fiscal 2009. For the years
ended April 30, 2008 and 2007 the Company contributed $1,292,000, and
$1,197,000, respectively to the Plan.





Note
8-Lease Commitments:





On June
4, 1993, the Company entered into a 15 year lease agreement to provide primary
office space. The lease includes free rental periods as well as scheduled base
rent escalations over the term of the lease. The lease was scheduled to expire
in May 2008 subject to an option granted to the Company to extend the term for 5
additional years at a market rental rate. The total amount of the base rent
payments is being charged to expense on the straight-line method over the term
of the lease. The Company recorded a deferred charge on its Consolidated Balance
Sheets to reflect the excess of annual rental expense over cash payments since
inception of the lease. On April 23, 2007, the Company signed a lease amendment
that extended the primary office space lease to May 2013, which increased the
Company's future minimum lease payments. Future minimum payments, exclusive of
forecasted increases in real estate taxes and wage escalations, under operating
leases for equipment and office space, with remaining terms of one year or more,
are as follows:





Year
      ended April 30,
                    
                    (in thousands)2010
                    
                    $
                    2,9482011
                    
                    
                    2,9482012
                    
                    
                    2,9482013
                    
                    
                    2,948Thereafter
                    
                    
                    246$
                    12,038





Rental
expense for the years ended April 30, 2009, 2008, and 2007 under operating
leases covering office space was $2,930,000, $2,858,000, and $2,108,000,
respectively.





Note
9-Business Segments:





The
Company operates two reportable business segments: Investment Periodicals,
Publishing & Copyright Data and 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.


49


Value
Line, Inc.


Notes
to Consolidated Financial Statements





Disclosure
of Reportable Segment Profit and Segment Assets (in thousands)





April
      30, 2009InvestmentPeriodicals,
                                                    
                                                    
                                                    Investment
                                                    
                                                    
                                                    TotalPublishing &
                                                    
                                                    
                                                    ManagementCopyright DataRevenues
      from external customers
                                                    
                                                    $
                                                    44,268
                                                    
                                                    
                                                    $
                                                    24,973
                                                    
                                                    
                                                    $
                                                    69,241Intersegment
      revenues
                                                    
                                                    
                                                    37
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    37Income
      from securities transactions
                                                    
                                                    
                                                    (87
                                                    )
                                                    
                                                    
                                                    10,308
                                                    
                                                    
                                                    
                                                    10,221Depreciation
      and amortization
                                                    
                                                    
                                                    1,075
                                                    
                                                    
                                                    
                                                    53
                                                    
                                                    
                                                    
                                                    1,128Segment
      profit from operations
                                                    
                                                    
                                                    16,237
                                                    
                                                    
                                                    
                                                    7,998
                                                    
                                                    
                                                    
                                                    24,235Segment
      assets
                                                    
                                                    
                                                    11,867
                                                    
                                                    
                                                    
                                                    22,914
                                                    
                                                    
                                                    
                                                    34,781Expenditures
      for segment assets
                                                    
                                                    
                                                    1,186
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    1,186April
      30, 2008InvestmentPeriodicals,
                                                    
                                                    
                                                    Investment
                                                    
                                                    
                                                    TotalPublishing &
                                                    
                                                    
                                                    ManagementCopyright DataRevenues
      from external customers
                                                    
                                                    $
                                                    49,857
                                                    
                                                    
                                                    $
                                                    32,821
                                                    
                                                    
                                                    $
                                                    82,678Intersegment
      revenues
                                                    
                                                    
                                                    97
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    97Income
      from securities transactions
                                                    
                                                    
                                                    230
                                                    
                                                    
                                                    
                                                    4,170
                                                    
                                                    
                                                    
                                                    4,400Depreciation
      and amortization
                                                    
                                                    
                                                    1,543
                                                    
                                                    
                                                    
                                                    60
                                                    
                                                    
                                                    
                                                    1,603Segment
      profit from operations
                                                    
                                                    
                                                    18,464
                                                    
                                                    
                                                    
                                                    16,002
                                                    
                                                    
                                                    
                                                    34,466Segment
      assets
                                                    
                                                    
                                                    10,780
                                                    
                                                    
                                                    
                                                    76,671
                                                    
                                                    
                                                    
                                                    87,451Expenditures
      for segment assets
                                                    
                                                    
                                                    604
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    604April
      30, 2007InvestmentPeriodicals,
                                                    
                                                    
                                                    Investment
                                                    
                                                    
                                                    TotalPublishing &
                                                    
                                                    
                                                    ManagementCopyright DataRevenues
      from external customers
                                                    
                                                    $
                                                    52,480
                                                    
                                                    
                                                    $
                                                    31,155
                                                    
                                                    
                                                    $
                                                    83,635Intersegment
      revenues
                                                    
                                                    
                                                    108
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    108Income
      from securities transactions
                                                    
                                                    
                                                    233
                                                    
                                                    
                                                    
                                                    3,021
                                                    
                                                    
                                                    
                                                    3,254Depreciation
      and amortization
                                                    
                                                    
                                                    1,963
                                                    
                                                    
                                                    
                                                    80
                                                    
                                                    
                                                    
                                                    2,043Segment
      profit from operations
                                                    
                                                    
                                                    19,755
                                                    
                                                    
                                                    
                                                    15,901
                                                    
                                                    
                                                    
                                                    35,656Segment
      assets
                                                    
                                                    
                                                    18,976
                                                    
                                                    
                                                    
                                                    80,581
                                                    
                                                    
                                                    
                                                    99,557Expenditures
      for segment assets
                                                    
                                                    
                                                    715
                                                    
                                                    
                                                    
                                                    80
                                                    
                                                    
                                                    
                                                    795











(in
thousands)





2009
                
                
                2008
                
                
                2007RevenuesTotal
      revenues for reportable segments
                
                $
                69,278
                
                
                $
                82,775
                
                
                $
                83,743Elimination
      of intersegment revenues
                
                
                (37
                )
                
                
                (97
                )
                
                
                (108
                )Total
      consolidated revenues
                
                $
                69,241
                
                
                $
                82,678
                
                
                $
                83,635Segment
      profitTotal
      profit for reportable segments
                
                $
                34,456
                
                
                $
                38,866
                
                
                $
                38,910Add:
      Income from securities transactions related to corporate
      assets
                
                
                1,404
                
                
                
                1,894
                
                
                
                1,613Less:
      Depreciation related to corporate assets
                
                
                (12
                )
                
                
                (16
                )
                
                
                (20
                )Income
      before income taxes
                
                $
                35,848
                
                
                $
                40,744
                
                
                $
                40,503AssetsTotal
      assets for reportable segments
                
                $
                34,781
                
                
                $
                87,451
                
                
                $
                99,556Corporate
      assets
                
                
                82,774
                
                
                
                50,502
                
                
                
                29,407Consolidated
      total assets
                
                $
                117,555
                
                
                $
                137,953
                
                
                $
                128,963




50


Value
Line, Inc.


Notes
to Consolidated Financial Statements





Note
10-Net Capital:





The
Company's wholly owned subsidiary, ESI, is subject to the net capital provisions
of Rule 15c3-1 under the Securities Exchange Act of 1934, which requires the
maintenance of minimum net capital of $100,000 or one-fifteenth of aggregate
indebtedness, if larger. At April 30, 2009, the net capital, as defined, of ESI
of $16,046,622 exceeded required net capital by $15,946,622 and the ratio of
aggregate indebtedness to net capital was .06 to 1.





Note
11-Disclosure of Credit Risk of Financial Instruments with Off Balance Sheet
Risk:





In the
normal course of business, the Company may enter into contractual commitments,
including financial futures contracts for securities indices. Financial futures
contracts provide for the delayed delivery of financial instruments for which
the seller agrees to make delivery at a specified future date, at a specified
price or yield. The contract or notional amount of these contracts reflects the
extent of involvement the Company has in these contracts. At April 30, 2009 and
2008, the Company did not have any investment in financial futures contracts.


Other
than the Value Line Funds as explained in Note 3, no single customer accounted
for a significant portion of the Company's sales in fiscal 2009, 2008 or 2007,
nor its accounts receivable as of April 30, 2009 or 2008.





Note
12-Comprehensive Income:





Financial
Accounting Standards No. 130, "Reporting Comprehensive Income", 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 April
30, 2009, the Company held U.S. Government debt securities that are classified
as Available for Sale on the Consolidated Condensed Balance Sheets. At April 30,
2008, and 2007, the Company held both equity securities and U.S. Government debt
securities that are classified as Available for Sale on the Consolidated 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's Balance Sheets.


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





(in thousands)Before
                  
                  
                  Tax
                  
                  
                  Net
      ofTax
                  
                  
                  (Expense)
                  
                  
                  TaxAmount
                  
                  
                  or Benefit
                  
                  
                  AmountYear
      ended April 30, 2009Unrealized
      Gains on Securities:Unrealized
      Holding Gains/(Losses) Arising during the period
                  
                  $
                  (13,731
                  )
                  
                  $
                  4,834
                  
                  
                  $
                  (8,897
                  )Add:
      Reclassification adjustments for  losses realized in net
      income
                  
                  
                  416
                  
                  
                  
                  (146
                  )
                  
                  
                  270Less:
      Reclassification adjustmentsfor
      gains realized in net income
                  
                  
                  (9,781
                  )
                  
                  
                  3,442
                  
                  
                  
                  (6,339
                  )Other
      Comprehensive income
                  
                  $
                  (23,096
                  )
                  
                  $
                  8,130
                  
                  
                  $
                  (14,966
                  )Year
      ended April 30, 2008Unrealized
      Gains on Securities:Unrealized
      Holding Gains/(Losses) Arising during the period
                  
                  $
                  804
                  
                  
                  $
                  (283
                  )
                  
                  $
                  521Add:
      Reclassification adjustments for  losses realized in net
      income
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Less:
      Reclassification adjustmentsfor
      gains realized in net income
                  
                  
                  (2,793
                  )
                  
                  
                  983
                  
                  
                  
                  (1,810
                  )Other
      Comprehensive income
                  
                  $
                  (1,989
                  )
                  
                  $
                  700
                  
                  
                  $
                  (1,289
                  )


51


Value
Line, Inc.


Notes
to Consolidated Financial Statements





(in thousands)Before
                  
                  
                  Tax
                  
                  
                  Net
      ofTax
                  
                  
                  (Expense)
                  
                  
                  TaxAmount
                  
                  
                  or Benefit
                  
                  
                  AmountYear
      ended April 30, 2007Unrealized
      Gains on Securities:Unrealized
      Holding Gains/(Losses) Arising during the period
                  
                  $
                  2,774
                  
                  
                  $
                  (977
                  )
                  
                  $
                  1,797Add:
      Reclassification adjustments forlosses
      realized in net income
                  
                  
                  78
                  
                  
                  
                  (27
                  )
                  
                  
                  51Less:
      Reclassification adjustmentsfor
      gains realized in net income
                  
                  
                  (2,065
                  )
                  
                  
                  727
                  
                  
                  
                  (1,338
                  )Other
      Comprehensive income
                  
                  $
                  787
                  
                  
                  $
                  (277
                  )
                  
                  $
                  510





Note
13-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 obtaining software for internal use and amortize
those costs over the software's estimated useful life in a systematic and
rational manner.


At April
30, 2009 and 2008, the Company capitalized $323,000 and $283,000 of costs
related to the development of software for internal use. Such costs are
capitalized and amortized over the expected useful life of the asset which is
approximately 3 years. Amortization expense for the years ended April 30, 2009,
2008, and 2007 was $335,000, $600,000, and $887,000, respectively.





Note
14-Contingencies:





By letter
dated June 15, 2005, the staff of the Northeast Regional Office of the
Securities and Exchange Commission ("SEC") informed the Company that it was
conducting an informal inquiry primarily regarding the execution of portfolio
transactions by VLS for the Value Line Funds. The Company thereafter supplied
numerous documents to the SEC in response to its requests and various employees
and former employees of the Company provided testimony to the SEC. On May 8,
2008, the SEC issued a formal order of private investigation regarding whether
the VLS brokerage charges and related expense reimbursements during periods
prior to 2005 were excessive and whether adequate disclosure was made to the SEC
and the boards of directors and shareholders of the Value Line Funds.
Thereafter, certain senior officers of the Company asserted their constitutional
privilege not to provide testimony. Management believes that the SEC has
completed the fact finding phase of its investigation and the Company
has held discussions with the staff of the SEC in an effort to settle the
foregoing investigation. There can be no assurance that the Company and the SEC
will be able to reach a mutually agreeable settlement. Although for the
foregoing reason management of the Company cannot estimate an amount or range of
reasonably possible loss that the investigation may have on the Company’s
financial statements, in light of settlement discussions to date, the Company
has concluded it is reasonably possible that any settlement may have a material
negative effect on the Company's financial statements. The Company has
substantial liquid assets from which it could pay a settlement of the SEC
investigation if a mutually satisfactory settlement can be reached.


On
September 3, 2008, the Company was served with a derivative shareholder's suit
filed in New York County Supreme Court naming the Company's Directors and
alleging breach of fiduciary duty and related allegations, all arising from the
above SEC matter. The complaint seeks return of remuneration by the Directors
and other remedies. Plaintiff's counsel has agreed from time to time, most
recently until August 3, 2009, to extend the defendants' time to answer, move,
or otherwise respond to the complaint. Based on an evaluation of the case at
this early stage, including communications with the Company's insurance carrier,
it is not possible to estimate an amount or range of loss on the Company's
financial statements.


52