What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-09-18 compared with 2020-03-23 · 349 added, 534 removed, 296 unchanged (75% of the section changed)

Financial Statements

unaudited financial statements for the three- and nine-month period ended January 31, 2020, are attached hereto.

unaudited financial statements for the three-month period ended July 31, 2020 are attached hereto.

RISK INDUSTRIES, INC.

BALANCE SHEETS

January 31, 2020

July 31, 2020

April 30, 2020

1 unchanged sentence

Cash and cash equivalents

Investments and securities

Investments and securities, at fair value

Accounts receivable:

9 unchanged sentences

Intangible assets, net

accompanying notes to the unaudited condensed financial statements.

accompanying notes to the condensed financial statements

RISK INDUSTRIES, INC.

BALANCE SHEETS

January 31, 2020

July 31, 2020

April 30, 2020

4 unchanged sentences

Accrued expenses:

Payroll and related expenses

Property taxes

Income tax payable

Notes payable

Total Current Liabilities

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Total Stockholders’

TOTAL LIABILITES AND STOCKHOLDERS’

accompanying notes to the unaudited condensed financial statements

TOTAL LIABILITIES AND STOCKHOLDERS’

accompanying notes to the condensed financial statements

RISK INDUSTRIES, INC.

INCOME STATEMENTS (Unaudited)

INCOME STATEMENTS

THE THREE MONTHS ENDED JULY 31, 2020 AND 2019

July 31, 2020

July 31, 2019

Cost of Goods Sold

and Administrative

Paid to Related Parties

Operating Expenses:

From Operations

and Interest Income

Gain on equity securities

on Investments

on Sale of Assets

Before Provisions for Income Taxes

for Income Taxes:

Tax Expense (Benefit)

Income Tax Expense

Per Share of Common Stock

Average Number of Common Shares Outstanding

accompanying notes to the unaudited condensed financial statements

RISK INDUSTRIES, INC.

STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

Comprehensive Income, Net of Tax

gain (loss) on securities:

holding gains (losses) arising during period

Reclassification

adjustment for gains (losses) included in net income

tax benefit (expense) related to other comprehensive income

Comprehensive Income (Loss)

Comprehensive

accompanying notes to the unaudited condensed financial statements

RISK INDUSTRIES, INC.

CONDENSED STATEMENTS

OF STOCKHOLDERS’

THE THREE MONTHS ENDED JANUARY 31, 2020 AND 2019

Preferred Stock

Balances, October 31, 2019

Dividend declared at $0.40 per common share outstanding

Unrealized gain (loss), net of tax effect

Balances, January 31, 2020

Preferred Stock

Balances, October 31, 2018

Purchases of common stock

Unrealized gain (loss), net of tax effect

Balances, January 31, 2019

accompanying notes to the unaudited condensed financial statements

General and Administrative

Rent Paid to Related Parties

Total Operating Expenses

Income From Operations

Other Income (Expense)

Dividend and Interest Income

Unrealized gain (loss) on equity securities

Gain (Loss) on Sale of Investments

Income Before Provisions for Income Taxes

Provisions for Income Taxes

Current Expense

Deferred tax expense

Total Income Tax Expense

Basic Earnings Per Share of Common Stock

Diluted Earnings Per Share of Common Stock

Weighted Average Number of Common Shares Outstanding

Weighted Average Number of Shares Outstanding (Diluted)

accompanying notes to the condensed financial statements

RISK INDUSTRIES, INC.

STATEMENTS OF STOCKHOLDERS’

THE THREE MONTHS ENDED JANUARY 31, 2020 AND 2019

Treasury Stock

(Common Class A)

Comprehensive

$ (4,281,000 )

$ (4,297,000 )

Comprehensive

$ (4,202,000 )

$ (4,210,000 )

accompanying notes to the unaudited condensed financial statements

STATEMENTS OF COMPREHENSIVE INCOME

THE THREE MONTHS ENDED JULY 31, 2020 AND 2019

July 31, 2020

July 31, 2019

Other Comprehensive Income, Net of Tax

Unrealized gain on debt securities:

Unrealized holding gains arising during period

Income tax expense related to other comprehensive income

Other Comprehensive Income

Comprehensive Income

accompanying notes to the condensed financial statements

RISK INDUSTRIES, INC.

CONDENSED STATEMENTS

OF STOCKHOLDERS’

THE NINE MONTHS ENDED JANUARY 31, 2020 AND 2019

THE THREE MONTHS ENDED JULY 31, 2020 and 2019

Preferred Stock

Common Stock Class A

Balances, April 30, 2019

Purchases of common stock

Dividend declared at $0.40 per common share outstanding

Unrealized gain (loss), net of tax effect

Balances, January 31, 2020

Balances, July 31, 2019

Preferred Stock

Common Stock Class A

Balances, April 30, 2020

Purchases of common stock

Dividend declared at $0.38 per common share outstanding

Unrealized gain (loss), net of tax effect

Balances, January 31, 2019

accompanying notes to the unaudited condensed financial statements

Balances, July 31, 2020

accompanying notes to the condensed financial statements

RISK INDUSTRIES, INC.

CONDENSED STATEMENTS

OF STOCKHOLDERS’

THE NINE MONTHS ENDED JANUARY 31, 2020 AND 2019

THE THREE MONTHS ENDED JULY 31, 2020 and 2019

Treasury Stock

(Common Class A)

Comprehensive

1 unchanged sentence

$ (4,280,000 )

Treasury Stock

(Common Class A)

Comprehensive

1 unchanged sentence

$ (4,301,000 )

accompanying notes to the unaudited condensed financial statements

accompanying notes to the condensed financial statements

RISK INDUSTRIES, INC.

STATEMENT OF CASH FLOWS (Unaudited)

STATEMENTS OF CASH FLOWS

THE THREE MONTHS ENDED JULY 31, 2020 AND 2019

July 31, 2020

July 31, 2019

Cash Flows from Operating Activities:

3 unchanged sentences

Impairments on investments

Unrealized (gain) loss on equity investments

Unrealized (gain) loss on equity securities

Reserve for bad debts

1 unchanged sentence

Deferred income taxes

(Gain) loss on sale of assets

Net book value of assets retired

Changes in assets and liabilities:

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Prepaid expenses

Other receivables

Income tax overpayment

Employee receivables

Increase (decrease) in:

1 unchanged sentence

Accrued expenses

Net cash provided by (used in) operating activities

Income tax payable

Net cash from operating activities

Cash Flows From Investing Activities:

Proceeds from sale of assets

(Purchase) of property and equipment

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(Purchase) of marketable securities

(Purchase) of long-term investment

Net cash provided by (used in) investing activities

Net cash from investing activities

Cash Flows From Financing Activities:

(Purchase) of treasury stock

Dividends paid

Net cash provided by (used in) financing activities

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

Net cash from financing activities

Net Change in Cash and Cash Equivalents

Cash and Cash Equivalents, beginning of period

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Cash payments for:

Income taxes paid

Interest paid

Cash receipts for:

accompanying notes to the unaudited condensed financial statements

accompanying notes to the condensed financial statements

RISK INDUSTRIES, INC.

TO CONDENSED FINANCIAL STATEMENTS

Unaudited Interim Financial Statements

Interim Financial Statements

accompanying financial statements have been prepared in accordance with the instructions for Form 10-Q and do not include all

of the information and footnotes required by generally accepted accounting principles for complete financial statements.

suggested that these unaudited condensed financial statements be read in conjunction with the financial statements and notes thereto

included in the Company’s April 30, 2019 annual report on Form 10-K.

In the opinion of management, all adjustments, consisting

only of normal recurring adjustments considered necessary for a fair presentation, have been included.

Operating results for any

quarter are not necessarily indicative of the results for any other quarter or for the full year.

suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included

in the Company’s April 30, 2020 annual report on Form 10-K.

In the opinion of management, all adjustments, consisting only

of normal recurring adjustments considered necessary for a fair presentation, have been included.

Operating results for any quarter

are not necessarily indicative of the results for any other quarter or for the full year.

Estimates —The preparation of these financial statements requires the use of estimates and assumptions including the

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Issued Accounting Pronouncements —

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”

2016-02”), which provides guidance for accounting for leases.

ASU 2016-02 requires lessees to classify leases as either

finance or operating leases and to record a right-of-use asset and a lease liability for all leases with a term greater than 12

months regardless of the lease classification.

The lease classification will determine whether the lease expense is recognized

based on an effective interest rate method or on a straight-line basis over the term of the lease.

Accounting for lessors remains

largely unchanged from current GAAP.

ASU 2016-02 is effective for the Company beginning May 1, 2019.

Early adoption is permitted.

In July 2018, the FASB issued ASU No.

2018-10 “Codification Improvements to Topic 842, Leases”

(“ASU 2018-10”)

2018-11 “Leases (Topic 842) Targeted Improvements”

(“ASU 2018-11”) and ASU 2018-20, “Narrow-Scope

Improvements for Lessors”.

ASU 2018-10 provides certain amendments that affect narrow aspects of the guidance issued in

ASU 2018-11 allows all entities adopting ASU 2016-02 to choose an additional (and optional) transition method of

adoption, under which an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect

adjustment to the opening balance of retained earnings in the period of adoption.

ASU 2018-11 also allows lessors to not separate

non-lease components from the associated lease component if certain conditions are met.

During the first quarter of 2019, the

FASB issued ASU 2019-01, Leases (Topic 842) to amend ASU 2016-02.

This amendment exempts both lessees and lessors from having

to provide certain prior year interim disclosure information in the fiscal year in which a company adopts the new leases standard.

The Company has adopted the ASUs in the first quarter of fiscal year 2020 and the Company’s accounting systems have been

upgraded to comply with the requirements of the new standard, however, the adoption of ASU 2016-02 did not have a material impact

on the Company’s financial statements and related disclosures because leases are not material to the financial statements.

In June 2016, the FASB issued ASU No.

2016-13, “

Financial Instruments –

Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments ”, which requires entities to

use a forward looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including

trade receivables.

The FASB has subsequently issued updates to the standard to provide additional clarification on specific topics.

Topic 326 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

have applied this guidance, as of May 1, 2020, using a modified-retrospective approach.

The application of this guidance did not

require a cumulative effect adjustment to retained earnings and did not have a material effect on our financial statements.

August 2018, the FASB issued ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820).

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Early adoption is permitted for any removed or modified disclosures.

The Company is currently assessing the timing and impact of adopting the updated provisions.

August 2018, The FASB issued ASU 2018-14 to improve the effectiveness of disclosures for defined benefit plans under ASC 715-20.

The ASU applies to employers that sponsor defined benefit pension or other postretirement plans.

The FASB issued ASU 2018-14 as

part of its disclosure framework project, which has an objective and primary focus to improve the effectiveness of disclosures

in the notes to financial statements.

As part of the project, during August 2018, the Board also issued a Concepts Statement,

which the FASB used as a basis for amending the disclosure requirements for Subtopic 715-20.

The guidance is effective or fiscal

years ending after December 15, 2020 and early adoption is permitted.

The Company is currently assessing the timing and impact

of adopting the updated provisions.

June 2016, the FASB issued ASU 2016-13 (“ASU 2016-13”), Financial Instruments—Credit Losses.

Subsequently, the

FASB issued ASU 2019-05, Financial Instruments- Credit Losses (Topic 326):

Targeted Transition Relief and codification improvements

to Topic 326 in ASU 2019-11, ASU 2019-04 and ASU 2018-19.

The amendments update guidance on reporting credit losses for financial

These amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit

exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right

to receive cash.

The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2019, including

interim periods within those fiscal years.

All entities may adopt the amendments through a cumulative-effect adjustment to retained

earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective

The ASU is effective for fiscal years beginning after December 15, 2020.

Subsequent to September 30, 2019, the FASB

issued ASU 2019-10, “Financial Instruments - Credit Loss (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic

which defers the effective date for public filers that are considered small reporting companies (“SRC”)

as defined by the Securities and Exchange Commission to fiscal years beginning after December 15, 2022, including interim periods

within those fiscal years.

Since the Company is an SRC, implementation is not needed until May 1, 2023.

The Company will continue

to evaluate the effect of adopting ASU 2016-13 will have on the Company’s financial statements and disclosures.

We applied this guidance, as of May 1, 2020.

The application of this guidance did not have a material effect on our disclosures.

January 2020, the FASB issued ASU 2020-01, “Investments - Equity Securities (Topic 321), Investments - Equity Method and

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adoption is permitted.

The Company does not expect the adoption of ASU 2020-01 to have a material impact on its condensed

financial statements.

Recognition —In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update

2014-09, “Revenue from Contracts with Customers”

or “ASC 606”.

ASC 606 and all subsequently issued

clarifying ASCs replaced most existing revenue recognition guidance in U.S.

ASC 606 also required expanded disclosures relating

to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

The Company adopted

the new standard effective November 1, 2019.

The effect of this adoption was immaterial to our Financial Statements, and the Company

does not expect a material effect to the Financial Statements on an ongoing basis.

Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers”.

The core principle of the new revenue

standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount

that reflects the consideration to which the company expects to be entitled in exchange for those goods or services.

applies the following standards and recognizes revenue when (1) it has a firm contract and the parties are committed to perform

their respective obligations, (2) the product has been shipped to and accepted by the customer or the service has been provided,

(3) the sales price is fixed or determinable and (4) amounts are reasonably assured of collection, including the consideration

of the customer’s ability and intention to pay when the amount is due.

The Company primarily receives fixed consideration

for sales of product.

The Company does not have any significant financing components as payment is received at or shortly after

the point of sale.

Shipping and handling amounts paid by customers are included in revenue.

Sales tax and other similar taxes

are excluded from revenue.

is recorded net of provisions for discounts, which are typically agreed to upfront with the customer and do not represent variable

consideration.

The Company estimates these discounts in the same period that the revenue is recognized for products sales to customers.

The amount of revenue recognized represents the amount that will not be subject to a significant future reversal of revenue.

sales to distributors and customers are generally final.

In limited instances the Company may accept returned product due to quality.

During the current fiscal year, returns have not been material.

Company’s customers generally pay within 60 days from the receipt of a valid invoice.

The Company offers discounts of up

to 2% to certain customers for payments made within a specified number of days.

These early pay discounts are estimated in the

period of sale based on experience with sales to eligible customers.

Early pay discounts are recorded as a deduction to the accounts

receivable balance presented on the balance sheet.

Company’s performance obligations are satisfied at the point in time when products are shipped to the customer, which is

when the customer has title and the significant risks and rewards of ownership.

Company has investments in publicly traded equity securities, corporate bonds, state and municipal debt securities, real estate

investment trusts, and money markets.

Effective with the Company’s adoption of ASU 2016-01, Recognition and Measurement

of Financial Assets and Financial Liabilities, on May 1, 2018, the Company carries all investments in marketable securities at

fair value, with unrealized gain or loss on equity securities reported through other income.

The investments in debt securities

have maturities between April 2020 and January 2044.

The Company uses the average cost method to determine the cost of securities

sold with any unrealized gains or losses reported in each respective period’s earnings.

Dividend and interest income are

reported as earned.

of January 31, 2020 and April 30, 2019, investments consisted of the following:

The Company does not expect the adoption of ASU 2020-01 to have a material impact on its financial statements.

are no other new accounting pronouncements that are expected to have a significant impact on our financial statements.

Company has investments in publicly traded equity securities, state and municipal debt securities, real estate investment trusts,

and money markets.

The investments in debt securities, which include municipal bonds and bond funds, mature between March 2021

and January 2044.

The Company uses the average cost method to determine the cost of equity securities sold with any unrealized

gains or losses reported in the respective period’s earnings.

Unrealized gains and losses on debt securities are excluded

from earnings and reported separately as a component of stockholder’s equity.

Dividend and interest income are reported

of July 31, 2020 and April 30, 2020, investments consisted of the following:

Investments at

January 31, 2020

July 31, 2020

Municipal bonds

Corporate bonds

Equity securities

6 unchanged sentences

Money markets and CDs

$ (1,313,000 )

securities that are classified as equity securities are carried at fair value on the balance sheets with changes in fair value

recorded as an unrealized gain or (loss) in the statements of income in the period of the change.

Upon the disposition of a marketable

security, the Company records a realized gain or (loss) on the Company’s statements of income.

Company evaluates all marketable securities for other-than temporary declines in fair value, which are defined as when the cost

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are periodically evaluated to determine if impairment changes are required.

As a result of this standard, management do not record

an impairment loss for the quarter, but did record an impairment loss of $41,000 for the nine months ended January 31, 2020.

the corresponding periods last year, management recorded an impairment loss of $36,000 for the quarter, and recorded a loss of

$68,000 for the nine months ended January 31, 2019.

following tables show the investments with unrealized losses that are not deemed to be “other-than-temporarily impaired”,

As a result of this standard, management recorded

an impairment loss of $27,000 for the quarter ended July 31, 2020.

For the prior quarter ended July 31, 2019, an impairment loss

of $34,000 was recorded.

Company’s investments are actively traded in the stock and bond markets.

Therefore, either a realized gain or loss is recorded

when a sale happens.

For the quarter ended July 31, 2020 the Company had sales of equity securities which yielded gross realized

gains of $102,000 and gross realized losses of $126,000.

For the same period, sales of debt securities did not yield any gross

realized gains, but gross realized losses of $4,000 were recorded.

During the quarter ending July 31, 2019, the Company recorded

gross realized gains and losses on equity securities of $153,000 and $104,000, respectively, as well as gross realized gains and

losses on debt securities of $3,000 and $3,000, respectively.

The gross realized loss numbers include the impaired figures listed

in the previous paragraph.

Proceeds from sales of securities available for sale were $14,000 for the quarter ended July 31, 2020

and were $9,000 for the same quarter the prior year.

following table shows the investments with unrealized losses that are not deemed to be “other-than-temporarily impaired”,

aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position,

at January 31, 2020 and April 30, 2019, respectively.

Loss Breakdown by Investment Type at January 31, 2020

at July 31, 2020 and April 30, 2020, respectively.

Loss Breakdown by Investment Type at July 31, 2020

Less than 12 months

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Equity securities

$ (1,313,000 )

unrealized losses on the Company’s investments in municipal bonds were caused by interest rate increases.

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Because the Company has the ability to hold these investments until a recovery of fair value, which may be maturity, the Company

does not consider these investments to be other-than-temporarily impaired at January 31, 2020.

does not consider these investments to be other-than-temporarily impaired at July 31, 2020.

Equity Securities and REITs

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to management’s plan to hold on to these investments for an extended period, the Company does not consider these investments

to be other-than-temporarily impaired at January 31, 2020.

at January 31, 2020 and April 30, 2019 consisted of the following:

to be other-than-temporarily impaired at July 31, 2020.

at July 31, 2020 and April 30, 2020 consisted of the following:

Raw materials

2 unchanged sentences

allowance for obsolete inventory

Business Segments

Inventories, net

following is financial information relating to industry segments:

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Total capital expenditures

January 31, 2020

July 31, 2020

April 30, 2020

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Corporate general

Earnings per Share

and diluted earnings per share, assuming convertible preferred stock was converted for each period presented, are:

For the three months ended January 31, 2020

(Denominator)

Effect of dilutive securities:

Convertible preferred stock

For the nine months ended January 31, 2020

(Denominator)

Effect of dilutive securities:

Convertible preferred stock

For the three months ended January 31, 2019

For the three months ended July 31, 2020

(Denominator)

Effect of dilutive securities:

Convertible preferred stock

For the nine months ended January 31, 2019

Effect of dilutive Convertible Preferred Stock

For the three months ended July 31, 2019

(Denominator)

Effect of dilutive securities:

Convertible preferred stock

Retirement Benefit Plan

Effect of dilutive Convertible Preferred Stock

January 1, 1998, the Company adopted the George Risk Industries, Inc.

Retirement Savings Plan (the “Plan”).

is a defined contribution savings plan designed to provide retirement income to eligible employees of the corporation.

is intended to be qualified under Section 401(k) of the Internal Revenue Code of 1986, as amended.

Matching contributions by the

Company of approximately $14,000 and $2,000 were paid during both the quarters ending January 31, 2020 and 2019, respectively.

Likewise, the Company paid matching contributions of approximately $23,000 during the nine-month period ending January 31, 2020

and $7,000 during the corresponding period the prior fiscal year.

Fair Value Measurements

accepted accounting principles in the United States of America (US GAAP) defines fair value as the price that would be received

from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement

When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value,

we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions

that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions, and credit

is a defined contribution savings plan designed to provide retirement income to eligible employees of the Company.

intended to be qualified under Section 401(k) of the Internal Revenue Code of 1986, as amended.

It is funded by voluntary pre-tax

and Roth (taxable) contributions from eligible employees who may contribute a percentage of their eligible compensation, limited

and subject to statutory limits.

Employees are eligible to participate in the Plan when they have attained the age of 21 and completed

one thousand hours of service in any plan year with the Company.

Upon leaving the Company, each participant is 100% vested with

respect to the participants’

contributions while the Company’s matching contributions are vested over a six-year period

in accordance with the Plan document.

Contributions are invested, as directed by the participant, in investment funds available

under the Plan.

Matching contributions of approximately $13,000 and $2,000 were paid in each of the quarters ending July 31, 2020

and 2019 respectively.

Value Measurements

carrying value of the Company’s cash and cash equivalents, accounts receivable and accounts payable approximate their fair

value due to their short term nature.

The fair value of our investments is determined utilizing market based information.

value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between

market participants at the measurement date.

When determining the fair value measurements for assets and liabilities, which are

required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the

market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent

risk, transfer restrictions, and credit risk.

GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.

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and Marketable Securities

of January 31, 2020, our investments consisted of money markets, certificates of deposit, publicly traded equity securities, real

estate investment trusts (REITS) as well as certain state and municipal debt securities and corporate bonds.

Our marketable securities

are valued using third-party broker statements.

The value of the investments is derived from quoted market information.

to the valuation are generally classified as Level 1 given the active market for these securities, however, if an active market

does not exist, which is the case for municipal bonds and REITs, the inputs are recorded as Level 2.

of July 31, 2020, our investments consisted of money markets, publicly traded equity securities, real estate investment trusts

(REITs) as well as certain state and municipal debt securities.

The marketable securities are valued using third-party broker

The value of the majority of securities is derived from quoted market information.

The inputs to the valuation are

generally classified as Level 1 given the active market for these securities, however, if an active market does not exist, which

is the case for municipal bonds and REITs, the inputs are recorded as Level 2.

Value Hierarchy

following tables set forth our assets and liabilities measured at fair value on a recurring basis and a non-recurring basis by

following table sets forth our assets and liabilities measured at fair value on a recurring basis and a non-recurring basis by

level within the fair value hierarchy.

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Assets Measured at Fair Value on a Recurring Basis as of

January 31, 2020

July 31, 2020

Municipal Bonds

Corporate Bonds

Equity Securities

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Total fair value of assets measured on a recurring basis

Related Party Transactions

Company purchased a building that it previously leased from Bonita Risk.

Bonita Risk is a director and an employee of the Company

and is the majority holder of George Risk Industries, Inc.

This building contains the Company’s sales and accounting

departments, maintenance department, engineering department and some production facilities.

This purchase price of the building

was $200,000 and the transaction happened during the Company’s third fiscal quarter.

Subsequent Events

and subsequent to the third quarter of the current fiscal year, the world has been impacted by the spread of the coronavirus (COVID-19).

It has created significant economic uncertainty and volatility.

The extent to which the coronavirus pandemic impacts our business,

operations and financial results will depend on numerous evolving factors that we may not be able to accurately predict, including:

the duration and scope of the pandemic;

governmental, business and individuals’

actions that have been and continue to be

taken in response to the pandemic;

the impact of the pandemic on economic activity and actions taken in response;

the effect on

our clients and client demand for our services and solutions;

our ability to sell and provide our services and solutions, including

as a result of travel restrictions and people working from home;

the ability of our clients to pay for our services and solutions;

and any closures of our and our clients’

offices and facilities.

Any of these events could materially adversely affect our

business, financial condition, results of operations and/or stock price.

The Company manufactures and supplies “essential”

and services to many critical industries, so our production facilities will continue to operate.

The health and safety of our employees

and their families remains our top priority.

Therefore, we have implemented many Center for Disease Control protocols to keep them

safe while the Company continues to produce products and provide service to our customers.

While we are operating in a rapidly

changing environment, we also continue to hear positive news from our raw material suppliers.

April 15, 2020, the Company received loan proceeds of approximately $950,000 (the “PPP Loan”) from FirsTier Bank,

pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted

March 27, 2020.

The PPP Loan, which was in the form of a Note dated April 15, 2020 issued to the Company, matures on April 15,

2022 and bears interest at a rate of 1% per annum, payable monthly commencing on November 15, 2020.

The Note may be prepaid by

the Company at any time prior to maturity with no prepayment penalties.

Funds from the PPP Loan may only be used for payroll costs,

costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on certain other debt obligations.

The Company intends to use the entire PPP Loan amount for qualifying expenses.

Under the terms of the PPP, certain amounts of

the PPP Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act.

RISK INDUSTRIES, INC.

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Management Discussion and Analysis of Financial Condition and Results of Operations

DISCUSSION AND ANALYSIS

FINANCIAL CONDITION

RESULTS OF OPERATIONS

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Quarterly Report on Form 10-Q, includes forward-looking statements within the meaning of Section 27A of the Securities Act of

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Unless required by law, we undertake no obligation to update publicly any forward-looking statements, or to update the reasons

actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes

available in the future.

following discussion should be read in conjunction with the attached unaudited condensed financial statements, and with the Company’s

actual results could differ materially from those anticipated in these forward-looking statements, even if current information

becomes available in the future.

following discussion should be read in conjunction with the attached condensed financial statements, and with the Company’s

audited financial statements and discussion for the fiscal year ended April 30, 2020.

Company’s performance has stayed steady through the three quarters, with a slight increase in sales, managing cost of sales

numbers, and strong investment returns.

This is due to the continuation of our quality USA made products with the ability for

customization, our notable customer service, and the purchase of the assets of Labor Saving Devices, Inc.

Opportunities include

gaining business from a competitor that is getting out of the security switch business and to continue looking at businesses that

might be a good fit to purchase.

New challenges the Company has endured over the nine months of this fiscal year include continuing

to get product out to customers in a timelier manner and to fill the stockroom with inventory to get back to shipping out core

products the same day.

Also, the price of raw materials has increased with the execution of tariffs by the US government and other

The COVID-19 virus is also a concern for management as availability to get raw materials may be hampered by the pandemic.

But management continues to work at keeping operations flowing as efficient as possible with the hopes of getting the facilities

running leaner and more profitable than ever before.

Company’s performance improved during the quarter ended July 31, 2020 as compared to the quarter ended July 31, 2019.

main reason for the increase is the closure of a competitor at the end of calendar year 2019, resulting in a major uptick in sales.

As a result of the increased demand, the Company is experiencing a sizable back order log;

however, management has been able to

increase inventory.

Management now intends to focus on ramping up production to meet customer’s needs in a timely manner.

Opportunities include continuing to learn and grow with our computer system and to continue looking at businesses that might be

a good fit to purchase.

We also have new products that are scheduled to enter the marketplace by the end of the calendar year.

Challenges in the coming months include continuing to get product out to customers in a timely manner and dealing with COVID-19

pandemic restrictions.

Raw material prices are also a concern with tariffs being levied by the US government and other factors.

Management continues to work at keeping the facilities running leaner and more profitable than ever before.

of Operations

sales were $3,589,000 for the quarter ended January 31, 2020, which is a 3.88% increase from the corresponding quarter last

Year-to-date net sales were $10,852,000 at January 31, 2020, which is a 2.85% increase from the same period last year.

The steady growth in sales is due to our ongoing commitment to outstanding customer service and our ability to customize products.

The Company is also seeing growth since a major competitor closed its doors at the end of 2019.

of goods sold was 51.04% of net sales for the quarter ended January 31, 2020 and was 51.29% for the same quarter last year.

Year-to-date cost of goods sold percentages were 50.33% for the current nine months and 51.81% for the corresponding nine

months last year, which is just slightly over the target of less than 50% for both the quarter and year-to-date results.

has seen increases in labor and materials costs and initiated a price increase that started in January 2020.

expenses increased by $72,000 for the quarter as they increased by $107,000 for the nine-months ended January 31, 2020 as

compared to the corresponding periods last year.

These increased costs are primarily due to increased commissions and wages

for raises and the hiring of more employees.

from operations for the quarter ended January 31, 2020 was at $834,000 which is a 0.24% increase from the corresponding quarter

sales for the quarter ended July 31, 2020 showed a 13.94% increase over the same period in the prior year.

The Company saw

increased sales resulting primarily from a competitor no longer selling competing products.

Management also believes that

they have been successful at training employees on the new computer system and production is running smoothly.

of goods sold decreased from 49.80% of sales in the prior year, to 48.23% in the current quarter, which is inside of Management’s

goal to keep labor and other manufacturing expenses within the range of 45 to 50%.

The decreased cost of goods sold percentage

is a reflection of training initiatives resulting in more efficient production.

expenses increased by $36,000 when comparing the current year quarter to the same quarter for the prior year;

percentage of net sales decreased to 22.46% for the quarter ended July 31, 2020 compared to 24.58% for the corresponding quarter

The dollar amount increase is the result of increased personnel and commission expense related to the increase

in net sales;

however, the Company maintained the ratio of operating expenses to net sales at less than 30%, which is in line

with historical ratios.

from operations for the quarter ended July 31, 2019 was at $1,186,000, which is a 30.33% increase from the corresponding quarter

last year, which had income from operations of $910,000.

Income from operations for the nine months ended January 31, 2020

was at $2,690,000, which is a 7.99% increase from the corresponding nine months last year, which had income from operations

of $2,491,000.

income and expenses are up $373,000 when comparing to the current quarter to the same quarter last year.

Comparatively,

there is an increase of $808,000 in other income and expenses for the year-to-date numbers.

The majority of activity

in these accounts consists of investment interest, dividends, and gain or loss on sale of investments, but the biggest factor

is that unrealized gains and losses are now being shown in the income statement starting this current fiscal year.

net income for the quarter ended January 31, 2020 was up $191,000, or 16.28%, from the same quarter last year.

Similarly, net income for the nine-month period ended January 31, 2020 was up $737,000, or 28.80%, from the

same period in the prior year.

per common share for quarter ended January 31, 2020 were $0.28 per share and $0.67 per share for the year-to-date

EPS for the quarter and nine months ended January 31, 2019 were $0.24 per share and $0.52 per share, respectively.

income and expenses showed a $2,254,000 gain for the quarter ended July 31, 2020 as compared to a $388,000 gain for the quarter

ended July 31, 2019.

For the three months ended July 31, 2020, $2,114,000 of unrealized gains from equity securities were

recorded, compared to the $145,000 of unrealized gains from equity securities recorded for the three months ended July 31,

The remainder of the increase is primarily due to dividend and interest income.

Company’s provision for income taxes showed an increase of $626,000 from $322,000 in the quarter ended July 31, 2019

to $948,000 for the quarter ended July 31, 2020.

This increase is primarily due to increased deferred taxes resulting from

a much larger unrealized gain for the current quarter.

turn, net income for the quarter ended July 31, 2020 was $2,492,000, a 155.33% increase from the corresponding quarter last

year, which showed net income of $976,000.

per share for the quarter ended July 31, 2020 were $0.50 per common share and $0.20 per common share for the quarter ended

July 31, 2019.

and capital resources

cash increased $774,000 during the nine months ended January 31, 2020 as compared to an increase of $295,000 during the corresponding

period last year.

receivable decreased $460,000 for the nine months ended January 31, 2020 compared with a $514,000 decrease for the same period

The current year decrease is a result of improved sales and collections of accounts receivable improved over last

An analysis of accounts receivable shows that there were only 0.30% that were over 90 days at January 31, 2020.

increased $506,000 during the current nine-month period as compared to an increase of $999,000 last year.

The smaller increase

in the current year is primarily due to increased sales, not having a stockpile of finished goods, and some issues with getting

some vital raw materials in a timely manner.

expenses saw a $43,000 decrease for the current nine months, primarily due to inventory being delivered that had been paid

for in advance.

The prior nine months showed a $164,000 decrease in prepaid expenses.

tax overpayment for the nine months ended January 31, 2020 decreased $142,000, as the overpayment showed an increase of $106,000

for the same period the prior year.

The main reason for the current decrease is that the Company has generated additional

income without the need to increase income tax estimates.

payable shows a $16,000 increase for the current nine-month period ended January 31, 2020 as compared to a $35,000 decrease

for the prior nine-month period.

The company strives to pay all invoices within terms, and the variance in increases is primarily

due to the timing of receipt of products and payment of invoices.

expenses did not have any cash flow change for the current nine-month period as compared to a $36,000 decrease for the nine-month

period ended January 31, 2019.

for our investment activities, the Company spent approximately $468,000 on acquisitions of property and equipment for the

current nine-month period, in comparison with the corresponding nine months last year, where there was activity of $88,000.

Additionally,

the Company continues to purchase marketable securities, which include municipal bonds and quality stocks.

During the nine-month

period ended January 31, 2020 there was quite a bit of buy/sell activity in the investment accounts.

Net cash spent on purchases

of marketable securities for the nine-month period ended January 31, 2020 was $640,000 compared to $839,000 spent in the prior

nine-month period.

The Company continues to use “money manager”

cash increased $1,033,000 during the quarter ended July 31, 2020 as compared to an increase of $794,000 during the corresponding

quarter last year.

receivable decreased $49,000 for the quarter ending July 31, 2020 compared with a $163,000 decrease for the same quarter last

The smaller decrease in accounts receivable is directly attributable to some of the Company’s customers not paying

as timely as before.

Management believes this is because of the COVID-19 pandemic.

Management still has the ability to collect

on accounts and to keep past due accounts to a minimum.

An analysis of accounts shows that there were only 0.63% that were

over 90 days at July 31, 2020.

increased $405,000 during the current quarter as compared to a $288,000 increase last year.

The larger increase is primarily

due to the fact that the Company is stocking up on more raw materials due to increased orders.

In addition, the Company is

keeping more inventory on hand in order to reduce the likelihood of running into a shortage on some major raw materials, such

as we experienced last year.

the quarter ended July 31, 2020 there was a $94,000 decrease in prepaid expenses compared to a decrease of $79,000 for the

quarter ended July 31, 2019.

The current decrease is due to less prepayment of raw materials and running through some of our

prepaid agreements without needing to renew them.

payable shows an increase of $117,000 for the quarter ended July 31, 2020 compared to an increase of $55,000 for the same

quarter the year before, primarily due to increases in inventory of raw materials and timing issues.

Management strives to

pay all payables within terms, unless there is a problem with the merchandise.

expenses decreased $61,000 for the current quarter as compared to a $66,000 decrease for the quarter ended July 31, 2019.

The difference in the amounts is primarily due to timing issues.

tax payable for the quarter ended July 31, 2020 increased $346,000, compared to a $289,000 increase for the quarter ended

July 31, 2019.

The current increase is due to larger tax estimates in relation to increased income.

Company purchased $95,000 of property and equipment during the current fiscal quarter.

In comparison, $169,000 was spent on

purchases of property and equipment during the corresponding quarter last year.

Company continues to purchase marketable securities, which include municipal bonds and quality stocks.

Cash spent on purchases

of marketable securities for the quarter ended July 31, 2020 was $111,000 compared to $132,000 spent during the quarter ended

July 31, 2019.

We continue to use “money manager”

accounts for most stock transactions.

this, the Company gives an independent third-party firm, who are experts in this field, permission to buy and sell stocks

The Company pays a quarterly service fee based on the value of the investments.

By doing this, the Company

gives an independent third party firm, who are experts in this field, permission to buy and sell stocks at will.

pays a quarterly service fee based on the value of the investments.

Company continues to purchase back common stock when the opportunity arises.

For the nine-month period ended January 31, 2020,

the Company purchased $71,000 worth of treasury stock.

This is in comparison to $62,000 spent in the same nine months period

the prior year.

company paid out dividends of $1,802,000 during the nine months ending January 31, 2020.

These dividends were paid during

the second quarter.

The company declared a dividend of $0.40 per share of common stock on September 30, 2019 and these dividends

were paid by October 31, 2019.

As for the prior year numbers, dividends paid was $1,752,000 for the nine months ending January

A dividend of $0.38 per common share was declared and paid during the second fiscal quarter last year.

following is a list of ratios to help analyze George Risk Industries’

January 31, 2020

January 31, 2019

Working capital

(current assets –

For the quarter ended July 31, 2020, the Company

did not buyback any treasury stock, compared to the $53,000 of common stock purchased during the same period the prior year.

In conjunction

with the Company’s Condensed Financial Statements, we have provided the following list of ratios to help analyze

George Risk Industries’

assets –

current liabilities)

Current ratio

(current assets / current liabilities)

((cash + investments + AR) / current liabilities)

assets / current liabilities)

+ current investments + AR) / current liabilities)

Product Development

Company and its engineering department continue to develop enhancements to product lines, develop new products which complement

existing products, and look for products that are well suited to our distribution network and manufacturing capabilities.

currently in the development process include:

Company and its’

engineering department perpetually work to develop enhancements to current product lines, develop new products

which complement existing products, and look for products that are well suited to our distribution network and manufacturing capabilities.

Items currently in various stages of the development process include:

new face plate for our pool alarms is nearing completion.

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updated version of the pool access alarm is currently going through electrical listing testing.

This next-generation model

combines our battery operated DPA series with our hard wired 289 series.

A variety of installation options will be available

through jumper pin settings.

continue our work on high security switches.

We have a triple biased high security switch design and an adjustable magnet

design was completed for recessed mounting applications.

This is ready to be sent to in for electrical listing testing.

have introduced the GR1840 Oval Metal Door Channel Magnet.

Since the COVID-19 pandemic

has happened, not much testing has progressed This next-generation model combines our battery operated DPA series with our

hard wired 289 series.

A variety of installation options will be available through jumper pin settings.

technology is a main area of focus for product development.

We are looking into adding wireless technology to some of our

current products.

A wireless contact switch is in the final stages of development.

Also, we are working on wireless versions

of our Pool Alarm and environmental sensors that will be easy to install in current construction.

We are also concentrating

on making products compatible with Wi-Fi, smartphone technology and the increasing popular Z-Wave standard for wireless home

the next months we are introducing a couple of new security products.

First, the 2707 Series are triple high biased magnetic

reed contacts for high security and are available in SPDT and DPDT models.

These contacts are resistant to magnetic tamper

They are used in applications such as airports, biotechnology labs, manufacturing plants, banks, military bases

and energy-generation facilities.

Secondly, the 3040 Panic Switch contains screw terminals and uses an actuating lever which

can be triggered with only the tip of the finger.

It can be installed under a counter or desk or any similar place.

uses 12’

extreme temperature rated wire for installation in refrigerators and freezers.

Both models have a latching

LED indicating when the switch is activated and automatically resets when the lever is closed and is fully re-armed.

LED and UL Listed versions are planned to follow.

have launched our new GR1840 Oval Metal Door Channel Magnet.

This is a direct replacement for the obsolete Interlogix magnet.

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steel door contacts.

technology is a main area of focus for product development.

We are considering adding wireless technology to some of our current

A wireless contact switch is in the final stages of development.

Also, we are working on wireless versions of our

pool access alarm and environmental sensors that will be easy to install in current construction.

We are also concentrating

on making products compatible with Wi-Fi, smartphone technology and the increasing popular Z-Wave standard for wireless home

are ready to launch a new Labor Saving Device’s product.

It is a 12”

adjustable hole cutter which compliments

the popular 10”

Using a standard drill, this tool allows you to drill various size holes in the ceiling

for speakers and canned lights.

The dust bin, which buts against the ceiling, keeps the ceiling material and dust enclosed

making for a clean, time saving installation.

LSDI product is new lighted Bullnose tip in a variety of colors (red, green and blue) to go along with the standard clear

These colored lights are placed on FiberFuse wire running rods which allows for easy location of the rod ends in dark

places such as attics and crawlspaces.

The rods can be color coded for wire paths running into different rooms.

Larger batteries

add to the longevity of these new lights.

addition to researching and developing new products, management is always open to the possibility of acquiring a business or product

have been several new products that have been introduced for our cable and wiring tools segment.

First, a 12”

hole cutter which compliments the popular 10”

Using a standard drill, this tool allows you to drill various

size holes in the ceiling for speakers and canned lights.

The dust bin which buts against the ceiling keeps the ceiling material

and dust enclosed making for a clean, time saving installation.

Secondly, the lighted Bullnose tips come in a variety of colors;

red, green and blue to go along with the standard clear lights.

These colored lights are placed on FiberFuse wire running

rods which allows easy location of the rod ends in dark places such as attics and crawlspaces.

The rods can be color coded

for wire paths running into different rooms.

Larger batteries add to the longevity of these new lights.

addition to researching developing new products, management is always open to the possibility of acquiring a business or product

line that would complement our existing operations.

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Issued Accounting Pronouncements

February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”

(“ASU 2016-02”), which provides guidance

for accounting for leases.

ASU 2016-02 requires lessees to classify leases as either finance or operating leases and to record

a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of the lease classification.

The lease classification will determine whether the lease expense is recognized based on an effective interest rate method or

on a straight-line basis over the term of the lease.

Accounting for lessors remains largely unchanged from current GAAP.

is effective for the Company beginning November 1, 2019.

Early adoption is permitted.

In July 2018, the FASB issued ASU No.

“Codification Improvements to Topic 842, Leases”

(“ASU 2018-10”) and ASU No.

2018-11 “Leases (Topic

842) Targeted Improvements”

(“ASU 2018-11”).

ASU 2018-10 provides certain amendments that affect narrow aspects

of the guidance issued in ASU 2016-02.

ASU 2018-11 allows all entities adopting ASU 2016-02 to choose an additional (and optional)

transition method of adoption, under which an entity initially applies the new leases standard at the adoption date and recognizes

a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.

ASU 2018-11 also allows

lessors to not separate non-lease components from the associated lease component if certain conditions are met.

The Company adopted

the ASUs in the first quarter of 2019 and the Company’s accounting systems will be upgraded to comply with the requirements

of the new standard, however, the adoption of ASU 2016-02 will not have a material impact on the Company’s financial statements

and related disclosures.

February 2018, the FASB issued ASU No.

2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

(ASU 2018-02).

Under existing U.S.

GAAP, the effects of changes in tax rates and laws on deferred tax balances are recorded as

a component of income tax expense in the period in which the law was enacted.

When deferred tax balances related to items originally

recorded in accumulated other comprehensive income (loss) are adjusted, certain tax effects become stranded in accumulated other

comprehensive income.

The amendments in ASU 2018-02 allow a reclassification from accumulated other comprehensive income (loss)

to retained earnings (accumulated deficit) for stranded income tax effects resulting from the Tax Cuts and Jobs Act (the Tax Act).

The amendments in this ASU also require certain disclosures about stranded income tax effects.

The guidance is effective for fiscal

years beginning after December 15, 2018, and interim periods within those fiscal years.

Early adoption in any period is permitted.

The Company has not yet adopted ASU 2018-02 and is currently evaluating the potential impact of adopting the applicable guidance

on the Company’s financial statements and related disclosures.

July 2018, the FASB issued ASU No.

2018-09, “Codification Improvements”

(“ASU 2018-09”).

ASU 2018-09 provides

amendments to a wide variety of topics in the FASB’s Accounting Standards Codification, which applies to all reporting entities

within the scope of the affected accounting guidance.

The transition and effective date guidance are based on the facts and circumstances

of each amendment.

Some of the amendments in ASU 2018-09 do not require transition guidance and were effective upon issuance of

However, many of the amendments do have transition guidance with effective dates for annual periods beginning after

December 15, 2018.

We are currently evaluating the potential impact of adopting the applicable guidance;

however we do not believe

that the adoption of ASU 2018-09 will have a material impact on the Company’s financial statements and related disclosures.

August 2018, the FASB issued ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820).

The updated guidance improves

the disclosure requirements on fair value measurements.

The updated guidance is effective for fiscal years, and interim periods

In June 2016, the FASB

issued ASU No.

2016-13, “

Financial Instruments –

Credit Losses (Topic 326):

Measurement of Credit Losses

on Financial Instruments ”, which requires entities to use a forward looking approach based on expected losses to estimate

credit losses on certain types of financial instruments, including trade receivables.

The FASB has subsequently issued updates

to the standard to provide additional clarification on specific topics.

Topic 326 is effective for fiscal years, and interim periods

within those fiscal years, beginning after December 15, 2019.

We have applied this guidance, as of May 1, 2020, using a modified-retrospective

The application of this guidance did not require a cumulative effect adjustment to retained earnings and did not have

a material effect on our financial statements.

In August 2018, the

FASB issued ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820).

The updated guidance improves the disclosure

requirements on fair value measurements.

The updated guidance is effective for fiscal years, and interim periods within those

fiscal years, beginning after December 15, 2019.

Early adoption is permitted for any removed or modified disclosures.

The Company is currently assessing the timing and impact of adopting the updated provisions.

August 2018, The FASB issued ASU 2018-14 to improve the effectiveness of disclosures for defined benefit plans under ASC 715-20.

The ASU applies to employers that sponsor defined benefit pension or other postretirement plans.

The FASB issued ASU 2018-14 as

part of its disclosure framework project, which has an objective and primary focus to improve the effectiveness of disclosures

in the notes to financial statements.

As part of the project, during August 2018, the Board also issued a Concepts Statement,

which the FASB used as a basis for amending the disclosure requirements for Subtopic 715-20.

The guidance is effective for fiscal

years ending after December 15, 2020, and early adoption is permitted.

The Company is currently assessing the timing and impact

of adopting the updated provisions.

June 2016, the FASB issued ASU 2016-13(“ASU 2016-13”), Financial Instruments—Credit Losses.

Subsequently, the

FASB issued ASU 2019-05, Financial Instruments- Credit Losses (Topic 326):

Targeted Transition Relief and codification improvements

to Topic 326 in ASU 2019-11, ASU 2019-04 and ASU 2018-19.

The amendments update guidance on reporting credit losses for financial

These amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit

exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right

to receive cash.

The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2019, including

interim periods within those fiscal years.

All entities may adopt the amendments through a cumulative-effect adjustment to retained

earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective

The ASU is effective for fiscal years beginning after December 15, 2020.

Subsequent to September 30, 2019, the FASB

issued ASU 2019-10, “Financial Instruments - Credit Loss (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic

which defers the effective date for public filers that are considered small reporting companies (“SRC”)

as defined by the Securities and Exchange Commission to fiscal years beginning after December 15, 2022, including interim periods

within those fiscal years.

Since the Company is an SRC, implementation is not needed until May 1, 2023.

The Company will continue

to evaluate the effect of adopting ASU 2016-13 will have on the Company’s financial statements and disclosures.

this guidance, as of May 1, 2020.

The application of this guidance did not have a material effect on our disclosures.

January 2020, the FASB issued ASU 2020-01, “Investments - Equity Securities (Topic 321), Investments - Equity Method and

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adoption is permitted.

The Company does not expect the adoption of ASU 2020-01 to have a material impact on its condensed

financial statements.

The Company does not expect the adoption of ASU 2020-01 to have a material impact on its financial statements.

are no other new accounting pronouncements that are expected to have a significant impact on our financial statements.

RISK INDUSTRIES, INC.

FINANCIAL INFORMATION

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures About

disclosure does not apply.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements