What changed in this filing

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Item 1. Financial Statements

2022-09-20 compared with 2022-03-17 · 260 added, 380 removed, 321 unchanged (67% of the section changed)

Financial Statements

unaudited financial statements for the three- and nine-month period ended January 31, 2022, are attached hereto.

unaudited financial statements for the three-month period ended July 31, 2022 are attached hereto.

RISK INDUSTRIES, INC.

BALANCE SHEETS

January 31, 2022

July 31, 2022

April 30, 2022

1 unchanged sentence

Cash and cash equivalents

Investments and securities

Investments and securities, at fair value

Accounts receivable:

Trade, net of $ 25,747 and $ 9,947 doubtful account allowance

Trade, net of allowance for credit losses of $ 20,036

Inventories, net

1 unchanged sentence

Total Current Assets

Property and Equipment, net

Property and Equipment, net, at cost

Investment in Limited Land Partnership, at cost

2 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, 2022

July 31, 2022

April 30, 2022

4 unchanged sentences

Accrued expenses:

Payroll and related expenses

Property taxes

Income tax payable

7 unchanged sentences

Convertible preferred stock, 1,000,000 shares authorized, Series 1—noncumulative, $ 20 stated value, 25,000 shares authorized, 4,100 issued and outstanding

Common stock, Class A, $ .10 par value, 10,000,000 shares authorized, 8,502,881

shares issued and outstanding

Common stock, Class A, $ .10 par value, 10,000,000 shares authorized, 8,502,881 shares issued and outstanding

Additional paid-in capital

5 unchanged sentences

Total Stockholders’ Equity

TOTAL LIABILITES AND STOCKHOLDERS’ EQUITY

accompanying notes to the unaudited condensed financial statements

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

accompanying notes to the condensed financial statements

RISK INDUSTRIES, INC.

INCOME STATEMENTS

THE THREE AND NINE MONTHS ENDED JANUARY 31, 2022 AND 2021

THE THREE MONTHS ENDED JULY 31, 2022 AND 2021

July 31, 2022

July 31, 2021

Cost of Goods Sold

1 unchanged sentence

( 2,318,000 )

( 7,908,000 )

( 6,631,000 )

Operating Expenses:

5 unchanged sentences

Unrealized gain (loss) on equity securities

( 1,729,000 )

Gain on Sale of Investments

Gain on Sale of Assets

Gain (Loss) on Sale of Investments

Total Other Income (Expense)

( 1,085,000 )

Income Before Provisions for Income Taxes

1 unchanged sentence

Current Expense

Deferred Tax Expense (Benefit)

Total Income Tax Expense (Benefit)

Income Per Share of Common Stock

Weighted Average Number of Common

Shares Outstanding

Average Number of Common Shares Outstanding

accompanying notes to the unaudited condensed financial statements

Deferred tax (benefit) 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.

STATEMENT OF COMPREHENSIVE INCOME

THE THREE AND NINE MONTHS ENDED JANUARY 31.

2022 AND 2021

Other Comprehensive Income (Loss), Net of Tax

Unrealized gain (loss)on debt securities:

Unrealized holding gains (losses)arising during period

Income tax benefit (expense) related to other comprehensive

Other Comprehensive Income (Loss)

STATEMENTS OF COMPREHENSIVE INCOME

THE THREE MONTHS ENDED JULY 31, 2022 AND 2021

July 31, 2022

July 31, 2021

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 unaudited condensed financial statements

RISK INDUSTRIES, INC.

STATEMENTS OF STOCKHOLDERS’ EQUITY

THE THREE MONTHS ENDED JANUARY 31, 2022 AND 2021

Preferred Stock

Balances, October 31, 2021

Purchases of Common Stock

Dividend declared at $0.50

per common share outstanding

Unrealized gain, net of tax effect

Balances, January 31, 2022

Preferred Stock

Balances, October 31, 2020

Purchases of common stock

Unrealized gain, net of tax effect

Balances, January 31, 2021

accompanying notes to the unaudited condensed financial statements

RISK INDUSTRIES, INC.

STATEMENTS OF STOCKHOLDERS’ EQUITY

THE THREE MONTHS ENDED JANUARY 31, 2022 AND 2021

Treasury Stock

(Common Class A)

Accumulated Other Comprehensive

Balances, October 31, 2021

$ ( 4,362,000 )

Purchases of Common Stock

Dividend declared at $0.50 per common share outstanding

Unrealized gain, net of tax effect

Balances, January 31, 2022

$ ( 4,371,000 )

Treasury Stock

(Common Class A)

Comprehensive

Balances, October 31, 2020

$ ( 4,302,000 )

Purchases of common stock

Unrealized gain, net of tax effect

Balances, January 31, 2021

$ ( 4,329,000 )

accompanying notes to the unaudited condensed financial statements

accompanying notes to the condensed financial statements

RISK INDUSTRIES, INC.

STATEMENTS OF STOCKHOLDERS’ EQUITY

THE NINE MONTHS ENDED JANUARY 31, 2022 AND 2021

OF STOCKHOLDERS’ EQUITY

THE THREE MONTHS ENDED JULY 31, 2022 and 2021

Preferred Stock

1 unchanged sentence

Purchases of common stock

Dividend declared at $ 0.50 per common share outstanding

Unrealized gain, net of tax effect

Balances, January 31, 2022

Balances, July 31, 2021

Preferred Stock

Balances, April 30, 2022

Prior period adjustment for tax provisions related to depreciation

Purchases of common stock

Dividend declared at $ 0.42 per common share outstanding

Unrealized (loss), net of tax effect

Balances, January 31, 2021

accompanying notes to the unaudited condensed financial statements

Unrealized gain, net of tax effect

Balances, July 31, 2022

accompanying notes to the condensed financial statements

RISK INDUSTRIES, INC.

STATEMENTS OF STOCKHOLDERS’ EQUITY

THE NINE MONTHS ENDED JANUARY 31, 2022 AND 2021

OF STOCKHOLDERS’ EQUITIY

THE THREE MONTHS ENDED JULY 31, 2022 and 2021

Treasury Stock

1 unchanged sentence

Comprehensive

Balances, April 30, 2021

April 30, 2021

$ ( 4,336,000 )

Purchases of common stock

Dividend declared at $0.50 per common share outstanding

( 2,472,000 )

Unrealized gain, net of tax effect

Balances, January 31, 2022

gain (loss), net of tax effect

Balances, July 31, 2021

$ ( 4,336,000 )

2 unchanged sentences

Comprehensive

Balances, April 30, 2020

April 30, 2022

$ ( 4,547,000 )

Purchases of common stock

Dividend declared at $0.42 per common share outstanding

$ ( 137,000 )

Prior period adjustment for tax provisions related to depreciation

Purchases of common stock

gain, net of tax effect

Balances, July 31, 2022

$ ( 4,549,000 )

Unrealized (loss), net of tax effect

Balances, January 31, 2021

$ ( 117,000 )

accompanying notes to the unaudited condensed financial statements

accompanying notes to the condensed financial statements

RISK INDUSTRIES, INC.

STATEMENT OF CASH FLOWS

THE NINE MONTHS ENDED JANUARY 31, 2022 AND 2021

STATEMENTS OF CASH FLOWS

THE THREE MONTHS ENDED JULY 31, 2022 AND 2021

July 31, 2022

July 31, 2021

Cash Flows from Operating Activities:

1 unchanged sentence

Depreciation and amortization

(Gain) on sale of investments

Impairments on investments

Unrealized (gain) loss on equity investments

( 4,653,000 )

Reserve for bad debts

(Gain) loss on sale of investments

Unrealized (gain) loss on equity securities

Provision for credit losses on accounts receivable

Reserve for obsolete inventory

Deferred income taxes

PPP loan debt forgiveness

(Gain) on sale of assets

Changes in assets and liabilities:

1 unchanged sentence

Accounts receivable

( 1,465,000 )

Prepaid expenses

( 1,089,000 )

Other receivables

Employee receivables

Increase (decrease) in:

4 unchanged sentences

Cash Flows From Investing Activities:

Proceeds from sale of assets

(Purchase) of property and equipment

1 unchanged sentence

(Purchase) of marketable securities

(Purchase) of long-term investment

Net cash from investing activities

2 unchanged sentences

Dividends paid

( 2,256,000 )

( 1,892,000 )

Net cash from financing activities

( 2,291,000 )

( 1,920,000 )

Net Change in Cash and Cash Equivalents

3 unchanged sentences

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.

3 unchanged sentences

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

It is 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, 2021 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.

It is suggested

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

Company’s April 30, 2022 annual report on Form 10-K (the “Annual Report”).

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 carrying

1 unchanged sentence

The estimates and assumptions result in approximate rather than exact amounts.

Issued Accounting Pronouncements — In June 2016 the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses

(Topic 326),” which was subsequently amended in February 2020 by ASU 2020-02, “Financial Instruments - Credit Losses

(Topic 326) and Leases (Topic 842).” The amendments introduce an impairment model that is based on expected credit losses,

rather than incurred losses, to estimate credit losses on certain types of financial instruments (e.g., loans and held-to-maturity securities),

including certain off-balance sheet financial instruments (e.g., loan commitments).

The expected credit losses should consider historical

information, current information, and reasonable and supportable forecasts, including estimates of prepayments, over the contractual

Financial instruments with similar risk characteristics may be grouped together when estimating expected credit losses.

with amendment is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

The Company does not believe this new guidance will have a material impact on its financial statements and will implement the disclosures

related to this update beginning in fiscal year 2023.

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

Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815.”

The ASU is based on a consensus of the Emerging Issues Task Force and is expected to increase comparability in accounting for these transactions.

ASU 2016-01 made targeted improvements to accounting for financial instruments, including providing an entity the ability to measure

certain equity securities without a readily determinable fair value at cost, less any impairment, plus or minus changes resulting from

observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

Among other topics, the

amendments clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method

of accounting.

ASU 2020-01 deals with changes in the significant influence of derivative and investments, of which the Company has none

and became effective for the Company in the first quarter of 2021.

The adoption of this standard did not have any impact on the Company’s

condensed financial statements.

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

Significant Accounting Policies

— The significant accounting policies used in preparation of these condensed consolidated financial statements are disclosed

in our Annual Report, and there have been no changes to the Company’s significant accounting policies during the three months ended

July 31, 2022.

Financial Statement Adjustment – In connection with the preparation of our financial statements, we identified an

immaterial misstatement to our financial statements in the Company’s Annual Report.

The misstatement is related to a

difference in deferred taxes on depreciation for a few years and up through the year ended April 30, 2022.

In accordance with Staff

Accounting Bulletins No.

99”) Topic 1.M, “Materiality” and SAB No.

99 Topic 1.N “Considering

the Effects of Misstatements when Quantifying Misstatements in the Current Year Financial Statements,” we evaluated the

misstatement and determined that the related impact was not consequential to our financial statements for any annual or interim

period for fiscal 2022, any other prior period, nor would the cumulative impact of correcting the misstatement be consequential to

our results of operations and equity for the fiscal and interim periods of 2023.

Issued Accounting Pronouncements — There are no 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 June 2022 and September

The investments in debt securities, which include municipal bonds and bond funds, mature between August 2022 and September

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

3 unchanged sentences

Dividend and interest income are reported as earned.

of January 31, 2022 and April 30, 2021, investments consisted of the following:

of July 31, 2022 and April 30, 2022, investments consisted of the following:

Schedule of Investments

Investments at

January 31, 2022

July 31, 2022

Municipal bonds

$ ( 212,000 )

Equity securities

4 unchanged sentences

Municipal bonds

$ ( 229,000 )

Equity securities

13 unchanged sentences

to determine if impairment changes are required.

As a result of this standard, there were no impairment losses recorded for the quarter

and the nine months ended January 31, 2022.

As for the corresponding periods last year, management did not record an impairment loss

for the quarter ended January 31, 2021 but did record an impairment loss of $ 79,000 for the nine-months ended January 31, 2021.

As a result of this standard, no impairment loss was recorded for the quarters ended

July 31, 2022 and 2021, respectively.

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

Therefore, either a realized gain or loss is recorded

when a sale occurs.

For the quarter ended January 31, 2022 the Company had sales of equity securities which yielded gross realized gains

of $ 121,000 and

gross realized losses of $ 27,000 .

For the same period, sales of debt securities did no t

yield any gross realized gains, but gross realized losses of $ 3,000

were recorded.

As for the nine-months ended January

31, 2022 the Company had sales of equity securities which yielded gross realized gains of $ 465,000

and gross realized losses of $ 61,000 .

For the same nine-month period last year, sales of debt securities did no t

yield any gross realized gains, but gross realized losses of $ 13,000

were recorded.

During the quarter ending January

31, 2021, the Company recorded gross realized gains and losses on equity securities of $ 288,000

and $ 35,000 ,

respectively, while sales of debt securities did not yield any gross realized gains, but gross realized losses of $ 3,000

were recorded.

During the nine-months ending

January 31, 2021, the Company recorded gross realized gains and losses on equity securities of $ 575,000

and $ 272,000 ,

respectively.

For the same nine-month period last year, sales of debt securities did no t

yield any gross realized gains, but gross realized losses of $ 9,000

were recorded.

The gross realized loss numbers

include the impaired figures listed in the previous paragraph.

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

when a sale happens.

For the quarter ended July 31, 2022 the Company had sales of equity securities which yielded gross realized gains

of $ 197,000 and gross realized losses of $ 267,000 .

For the same period, sales of debt securities did no t yield any gross realized gains,

but gross realized losses of $ 29,000 were recorded.

During the quarter ending July 31, 2021, the Company recorded gross realized gains

and losses on equity securities of $ 238,000 and $ 8,000 , respectively, while sales of debt securities did no t yield any gross realized

gains, but gross realized losses of $ 10,000 were recorded.

The gross realized loss numbers include the impaired figures listed in the

previous paragraph.

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, 2022 and April 30, 2021, respectively.

Loss Breakdown by Investment Type at January 31, 2022

July 31, 2022 and April 30, 2022, respectively.

Schedule of Unrealized Loss Breakdown by Investment

Loss Breakdown by Investment Type at July 31, 2022

Less than 12 months, Fair Value

10 unchanged sentences

Municipal bonds

$ ( 157,000 )

$ ( 212,000 )

Equity securities

14 unchanged sentences

Municipal bonds

$ ( 142,000 )

$ ( 229,000 )

Equity securities

$ ( 567,000 )

$ ( 138,000 )

$ ( 705,000 )

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

2 unchanged sentences

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, 2022.

these investments to be other-than-temporarily impaired at July 31, 2022 and April 31, 2022.

Equity Securities and REITs

4 unchanged sentences

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, 2022.

at January 31, 2022 and April 30, 2021 consisted of the following:

impaired at July 31, 2022 and April 30, 2022.

at July 31, 2022 and April 30, 2022 consisted of the following:

Schedule of Inventories

1 unchanged sentence

Work in process

Finished goods

Inventory in transit

26 unchanged sentences

Total capital expenditures

January 31, 2022

July 31, 2022

April 30, 2022

6 unchanged sentences

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

Schedule of Basic and Diluted Earnings per Share

For the three months ended January 31, 2022

(Denominator)

Effect of dilutive Convertible Preferred Stock

For the three months ended January 31, 2021

(Denominator)

Effect of dilutive Convertible Preferred Stock

For the nine months ended January 31, 2022

of Basic and Diluted Earnings Per Share

For the three months ended July 31, 2022

(Denominator)

Effect of dilutive Convertible Preferred Stock

For the nine months ended January 31, 2021

For the three months ended July 31, 2021

(Denominator)

14 unchanged sentences

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

Matching contributions by the

Company of approximately $ 16,000 were paid during each quarter ending January 31, 2022 and 2021.

Likewise, the Company paid matching

contributions of approximately $ 48,000 and $ 46,000 during each nine-month period ending January 31, 2022 and 2021, respectively.

Matching contributions of approximately

$ 16,000 and $ 17,000 were paid in each of the quarters ending July 31, 2022 and 2021 respectively.

Fair Value Measurements

22 unchanged sentences

and Marketable Securities

of January 31, 2022, our investments consisted of money markets, publicly traded equity securities, real estate investment trusts (REITs)

as well as certain state and municipal debt securities.

Our marketable securities are valued using third-party broker statements.

value of the investments 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.

of July 31, 2022 and April 30, 2022, 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 level

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.

3 unchanged sentences

Assets Measured at Fair Value on a Recurring Basis as of

January 31, 2022

July 31, 2022

Municipal Bonds

Equity Securities

Money Markets

Money Markets and CDs

Total fair value of assets measured on a recurring basis

3 unchanged sentences

Equity Securities

Money Markets

Money Markets and CDs

Total fair value of assets measured on a recurring basis

2 unchanged sentences

FINANCIAL INFORMATION

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

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 1933, as

9 unchanged sentences

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

audited financial statements and discussion for the fiscal year ended April 30, 2021.

Company’s performance in operations continues to improve through the three quarters of the current fiscal year with the third quarter

dipping slightly in sales over the second quarter of the current fiscal year.

This is mainly due the inability to obtain all the raw

materials that are needed to complete the manufacture of our products and keeping employees staffed at our locations.

The Company is

on track to have another record setting year for sales.

Additionally, the Company’s products are traditionally tied to the housing

market and with that market remaining strong, it in turn helps the Company’s sales grow.

Opportunities include keeping up with

the business growth and finding ways to get our products out to our customers in a timelier manner.

One way we are doing this is by looking

into more automation.

We also continue to look at businesses that might be a good fit to purchase.

We also have new products that have

hit the marketplace and a couple more that are scheduled to be introduced by the end of the fiscal year.

Challenges in the coming months

include continuing to get product out to customers in a timely manner and dealing with the COVID-19 pandemic restrictions.

Possible COVID-19

challenges include, but are not limited to, price increases and/or delays in the supply chain, reduced sales, workforce interruptions,

and economic conditions impacting the stock market.

Management continues to work at keeping operations flowing as efficiently as possible

with the hopes of getting the facilities running leaner and more profitable than ever before.

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, 2022.

Company’s performance remained steady during the quarter ended July 31, 2022 as compared to the quarter ended July 31, 2021.

sales have increased when comparing to the same quarter last year, overall net income is down because realized and unrealized gains on

investments are showing losses in the current quarter, while for the same quarter last year both of those categories were income amounts.

Also, gross profit and income from operations are lower when comparing to the same quarter last year.

This is because of increased cost

of raw materials and labor.

The uptick in sales is mainly due to a price increase that implemented in January 2022.

This was done to

offset the increases in raw material and labor costs that the Company has incurred to continue to do business.

The Company is still feeling

the increased demand of having one of our major competitors close its doors at the end of calendar year 2019.

The Company still has a

considerable back-order log and there has been times that certain raw materials have not been available.

Opportunities include focusing

on ramping up production to meet customer’s needs to get product to them in a timely manner, which includes looking into more automation,

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 and inflation.

Possible COVID-19 challenges include, but are not limited

to, price increases and/or delays in the supply chain, reduced sales, workforce interruptions, and economic conditions impacting the

stock market.

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.

of Operations

sales were $5,054,000 for the quarter ended January 31, 2022, which is a 9.09% increase from the corresponding quarter last year.

Year-to-date net sales were $15,252,000 at January 31, 2022, which is a 14.44% increase from the same period last year.

The significant

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

is also seeing continued growth since a major competitor closed its doors at the end of 2019 and having the ability to continue to

work through the COVID-19 pandemic.

of goods sold was 56.61% of net sales for the quarter ended January 31, 2022 and was 51.48% for the same quarter last year.

cost of goods sold percentages were 51.85% for the current nine months and 49.76% for the corresponding nine months last year.

current cost of goods sold percentages are right outside of Management’s goal of keeping labor and other manufacturing expenses

at less than 50% for both the quarter and year-to-date results.

Management continues to work with and train employees to work more

Raw material prices have soared over the current fiscal year and a significant wage increase went into effect for the

company at the beginning of the second quarter of the current fiscal year.

Management offset some of these added expenses by implementing

a 10% price increase effective January 1, 2022.

expenses increased by $17,000 for the quarter and they increased by $316,000 for the nine-months ended January 31, 2022 as compared

to the corresponding periods last year.

When comparing percentages in relation to net sales, the operating expenses for the quarter

ended January 31, 2022 was 20.76% of net sales while it was 22.27% of net sales for the same quarter the prior year.

For year-to-date

numbers, operating expense were 21.28% and 21.99% of net sales for the nine months ended January 31, 2022 and 2021, respectively.

The Company has been able to keep the operating expenses at less than 30% of net sales for many years now;

however, the actual dollar

amount increase is due to increased commission amounts, related to increased sales, and additional labor costs related to hiring

new employees and wage increases.

from operations for the quarter ended January 31, 2022 was $1,144,000, a 5.92% decrease from the corresponding quarter last year,

which had income from operations of $1,216,000.

Income from operations for the nine months ended January 31, 2022 was $4,098,000,

which is an 8.82% increase from the corresponding nine months last year, which had income from operations of $3,766,000.

expenses for the quarter ended January 31, 2022 was $1,085,000, which is a $5,258,000 decrease from the $4,173,000 other income from

the same quarter last year.

Comparatively, there is a decrease of $5,971,000 in other income for the year-to-date numbers.

the activity in these accounts consists of investment interest, dividends, real gains or losses on sale of investments, and unrealized

gains or losses on equity securities.

The main reason for the decrease in the current quarter and year-to-date numbers is unrealized

gain and loss on equity securities.

The Company is at the mercy of the stock market when it comes to these figures and the COVID-19

pandemic and other economic reasons have influenced those numbers.

net income for the quarter ended January 31, 2022 was down $4,286,000, or 96.38%, from the same quarter last year.

Similarly, net

income for the nine-month period ended January 31, 2022 was down $4,204,000, or 53.90%, from the same period in the prior year.

per common share for quarter ended January 31, 2022 were $0.03 per share and $0.73 per share for the year-to-date numbers.

the quarter and nine months ended January 31, 2021 were $0.90 per share and $1.58 per share, respectively.

sales for the quarter ended July 31, 2022 showed a 5.15% increase over the same period in the prior year.

The Company saw increased

sales resulting primarily from a competitor no longer selling competing products and implementing a price increase that became effective

on January 1, 2022.

Management also believes that sales continue to grow due to our ongoing commitment to outstanding customer service

and our ability to customize products.

of goods sold increased from 46.78% of sales in the prior year, to 51.00% in the current quarter, which is just outside of Management’s

goal to keep labor and other manufacturing expenses below 50%.

The increased cost of goods sold percentage is a result of inflation

that has afflicted the economy recently.

Management has seen significant price increases in raw material and has had to

raise wages to remain competitive in the job market.

expenses decreased by $20,000 when comparing the current year quarter to the same quarter for the prior year.

When comparing

percentages in relation to net sales, the operating expenses decreased to 20.86% for the quarter ended July 31, 2022 as compared

to 22.34% for the corresponding quarter last year.

The dollar amount decrease is the result of decreased general and administration

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, 2022 was at $1,466,000, which is a 4.18% decrease from the corresponding quarter last

year, which had income from operations of $1,530,000.

income and expenses showed a $102,000 loss for the quarter ended July 31, 2022 as compared to a $817,000 gain for the quarter ended

July 31, 2021.

For the three months ended July 31, 2022, $189,000 of unrealized losses from equity securities were recorded, compared

to $420,000 of unrealized gains from equity securities recorded for the three months ended July 31, 2021.

The remainder of the decrease

is primarily due to losses on sales of investments.

Company’s provision for income taxes showed a decrease of $288,000 from $601,000 in the quarter ended July 31, 2021 to $313,000

for the quarter ended July 31, 2022.

This decrease is primarily due to decreased deferred taxes resulting from unrealized losses

on equity securities for the current quarter.

turn, net income for the quarter ended July 31, 2022 was $1,051,000, a 39.81% decrease from the corresponding quarter last year,

which showed net income of $1,746,000.

per share for the quarter ended July 31, 2022 were $0.21 per common share and $0.35 per common share for the quarter ended July 31,

and capital resources

cash decreased $938,000 during the nine months ended January 31, 2022 as compared to an increase of $478,000 during the corresponding

period last year.

receivable decreased $91,000 for the nine months ended January 31, 2022 compared with a $376,000 increase for the same period last

The current year decrease is a result of improved sales offset by slightly slower collections of accounts receivable.

of accounts receivable shows that there were 6.61% that were over 90 days at January 31, 2022.

increased $1,465,000 during the current nine-month period compared to an increase of $823,000 last year.

The larger increase in the

current year is due to increases in the cost of raw materials and having more raw materials on hand to supply the increase in sales.

expenses saw a $1,089,000 increase for the current nine months, primarily due to having more prepayments for inventory and prepaying

for some machines that will aid in our production process.

The prior nine months showed a $327,000 decrease in prepaid expenses.

payable shows a $176,000 decrease for the current nine-month period ended January 31, 2022 compared to a $311,000 increase 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 increased $130,000 for the current nine-month period compared to a $54,000 increase for the nine-month period ended January

The difference in the amounts is primarily due to increased sales commissions and wages.

tax payable increased $163,000 for the current nine-month period, compared to an increase of $249,000 in income tax payable for the

nine-months ended January 31, 2021.

The current increase is largely due to having increased sales and income and not having large

enough income tax estimates.

for our investment activities, the Company spent approximately $164,000 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 $426,000.

Additionally,

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

During the nine-month

period ended January 31, 2022 the buy/sell activity in the investment accounts was high.

Net cash spent on purchases of marketable

securities for the nine-month period ended January 31, 2022 was $640,000 compared to $440,000 spent in the prior nine-month period.

The Company continues to use “money manager” accounts for most stock transactions.

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.

The Company pays a quarterly

service fee based on the value of the investments.

cash increased $1,571,000 during the quarter ended July 31, 2022 as compared to an increase of $1,005,000 during the corresponding

quarter last year.

The details are listed below.

receivable decreased $499,000 for the quarter ending July 31, 2022 compared with a $154,000 decrease for the same quarter last year.

The bigger decrease in accounts receivable is directly attributable to an increase in sales and customers being able to pay timelier.

Management is always working with customers to collect on accounts and to keep past due accounts to a minimum.

of accounts receivable shows that 5.24% of the balance was over 90 days at July 31, 2022.

increased $947,000 during the current quarter as compared to a $549,000 increase last year.

The larger increase is primarily due

to the fact that the Company is continuing to buy more raw materials due to increased orders and that the prices of raw material

and labor costs continue to increase.

the quarter ended July 31, 2022 there was a $317,000 decrease in prepaid expenses compared to an increase of $196,000 for the quarter

ended July 31, 2021.

The current decrease is due to having inventory delivered during the quarter;

therefore, having less money in

prepayments of raw materials on the books.

payable shows a decrease of $21,000 for the quarter ended July 31, 2022 compared to a decrease of $236,000 for the same quarter the

The variance is primarily due to timing differences of when product is received.

Management strives to pay all payables

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

expenses increased $121,000 for the current quarter as compared to a $99,000 increase for the quarter ended July 31, 2021.

The difference

in the amounts is primarily due to timing of when payroll periods end and increases in sales commissions and wages.

tax payable for the quarter ended July 31, 2022 increased $409,000, compared to a $547,000 increase for the quarter ended July 31,

The current smaller increase is due to smaller tax estimates in relation to the decreased income amount.

corporate income tax rate in Nebraska decreased to 7.5% from 7.81% for the current fiscal year.

Company purchased $74,000 of property and equipment during the current fiscal quarter.

In comparison, $40,000 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, 2022 was $111,000 compared to $98,000 spent during the quarter ended July 31,

We continue to use “money manager” accounts for most stock transactions.

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.

The Company pays quarterly service fees

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, 2022, the

Company purchased $35,000 worth of treasury stock.

This is in comparison to $28,000 spent in the same nine months period the

company paid out dividends of $2,256,000 during the nine months ending January 31, 2022.

These dividends were paid during the second

The company declared a dividend of $0.50 per share of common stock on September 30, 2021 and these dividends were paid by

October 31, 2021.

As for the prior year numbers, dividends paid was $1,892,000 for the nine months ending January 31, 2021.

of $0.42 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’ performance:

January 31, 2022

January 31, 2021

For the quarter ended July 31, 2022 the Company

bought back $2,000 worth of treasury stock, but for the quarter ended July 31, 2021, the Company did not buyback any treasury stock.

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

Risk Industries’ performance:

July 31, 2022

July 31, 2021

Working capital

2 unchanged sentences

(current assets / current liabilities)

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

((cash + 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.

Items currently in the

development process include:

proof contacts that will be UL listed for hazardous locations.

There has been demand from our customers for this type of high security

magnetic reed switch.

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:

proof contacts that will be UL listed for hazardous locations are in development.

There has been demand from our customers for this

type of high security magnetic reed switch.

updated version of the pool access alarm (PAA) has met electrical listing testing (ETL) approval and production has started.

1 unchanged sentence

A variety of installation options

are available through jumper pin settings such as instant alarm and seven second delay.

will be available through jumper pin settings such as instant alarm and a seven second delay.

Company is developing magnetic contacts which are listed under UL 634 Level 2.

These sensors are for high security applications such

as government buildings, military use, nuclear facilities, and financial institutions.

technology is a main area of focus for product development.

5 unchanged sentences

system is near completion.

Company is developing magnetic contacts which are listed under UL 634 Level 2.

These sensors are for high security applications such

as government buildings, military use, nuclear facilities, and financial institutions.

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

line that would complement our existing operations.

Due to the Company’s strong cash position, management believes this could be

achieved without the need for outside financing.

The intent is to utilize the equipment, marketing techniques and established customers

to deliver new products and increase sales and profits.

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.

Due to the Company’s strong cash position, management believes this could be achieved

without the need for outside financing.

The intent is to utilize the equipment, marketing techniques and established customers to deliver

new products and increase sales and profits.

are no known seasonal trends with any of GRI’s products, since we sell to distributors and OEM manufacturers.

Our products are tied

to the housing industry and will fluctuate with building trends.

Issued Accounting Pronouncements

June 2016 the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326),” which was subsequently

amended in February 2020 by ASU 2020-02, “Financial Instruments - Credit Losses (Topic 326) and Leases (Topic 842).”

The amendments introduce an impairment model that is based on expected credit losses, rather than incurred losses, to estimate credit

losses on certain types of financial instruments (e.g., loans and held-to-maturity securities), including certain off-balance sheet financial

instruments (e.g., loan commitments).

The expected credit losses should consider historical information, current information, and reasonable

and supportable forecasts, including estimates of prepayments, over the contractual term.

Financial instruments with similar risk characteristics

may be grouped together when estimating expected credit losses.

The update with amendment is effective for fiscal years beginning after

December 15, 2022, including interim periods within those fiscal years.

The Company does not believe this new guidance will have a material

impact on its financial statements and will implement the disclosures related to this update beginning in fiscal year 2023.

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

Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815.”

The ASU is based on a consensus of the Emerging Issues Task Force and is expected to increase comparability in accounting for these transactions.

ASU 2016-01 made targeted improvements to accounting for financial instruments, including providing an entity the ability to measure

certain equity securities without a readily determinable fair value at cost, less any impairment, plus or minus changes resulting from

observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

Among other topics, the

amendments clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method

of accounting.

ASU 2020-01 deals with changes in the significant influence of derivative and investments, of which the Company has none

and became effective for the Company in the first quarter of 2021.

The adoption of this standard did not have any impact on the Company’s

condensed financial statements.

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

Our products are

tied to the housing industry and will fluctuate with building trends.

RISK INDUSTRIES, INC.

FINANCIAL INFORMATION

Quantitative and Qualitative Disclosures about Market Risk

and Qualitative Disclosures About Market Risk

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