What changed in this filing

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Item 1. Financial Statements

2023-12-15 compared with 2023-09-14 · 424 added, 368 removed, 199 unchanged (80% of the section changed)

unaudited financial statements for the three-month period ended July 31, 2023 are attached hereto.

Financial Statements

unaudited financial statements for the three-and six-month periods ended October 31, 2023, are attached hereto.

RISK INDUSTRIES, INC.

BALANCE SHEETS

July 31, 2023

April 30, 2023

and cash equivalents

and securities, at fair value

net of allowance for credit losses of $ 9,767 and $ 17,922

tax overpayment

Current Assets

Cash and cash equivalents

Investments and securities, at fair value

Accounts receivable:

Trade, net of allowance for credit losses of $ 21,730 and $ 17,922

Income tax overpayment

Inventories, net

Prepaid expenses

Total Current Assets

Property and Equipment, net, at cost

Investment in Limited Land Partnership, at cost

Projects in process

Total Other Assets

Intangible assets, net

accompanying notes to the condensed financial statements

and Equipment, net, at cost

in Limited Land Partnership, at cost

accompanying notes to the unaudited condensed financial statements.

RISK INDUSTRIES, INC.

BALANCE SHEETS

July 31, 2023

April 30, 2023

LIABILITIES AND STOCKHOLDERS’ EQUITY

AND STOCKHOLDERS’ EQUITY

payable, trade

Payroll expense

Current Liabilities

Accounts payable, trade

Dividends payable

Deferred income

Accrued expenses:

Payroll and related expenses

Property taxes

Total Current Liabilities

Long-Term Liabilities

Deferred income taxes

Total Long-Term Liabilities

Total Liabilities

Commitments and contingencies

Stockholders’ Equity

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

Additional paid-in capital

Accumulated other comprehensive income

Retained earnings

and Contingencies

Stockholders’

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

and outstanding

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

paid-in capital

other comprehensive income

treasury stock, 3,576,088 and 3,572,338 shares, at cost

1 unchanged sentence

( 4,554,000 )

Total Stockholders’ Equity

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

accompanying notes to the condensed financial statements

Stockholders’ Equity

LIABILITIES AND STOCKHOLDERS’ EQUITY

accompanying notes to the unaudited condensed financial statements

RISK INDUSTRIES, INC.

INCOME STATEMENTS

THE THREE MONTHS ENDED JULY 31, 2023 AND 2022

July 31, 2023

July 31, 2022

INCOME (LOSS) STATEMENTS

THE THREE AND SIX MONTHS ENDED OCTOBER 31, 2023 AND 2022

Cost of Goods Sold

1 unchanged sentence

( 2,974,000 )

( 5,411,000 )

( 5,631,000 )

and Administrative

Operating Expenses

General and Administrative

Total Operating Expenses

Income From Operations

Other Income (Expense)

Dividend and Interest Income

Unrealized gain (loss) on equity securities

Gain on sale of asset

(Loss) on Sale of Investments

Total Other Income (Expense)

Income Before Provisions for Income Taxes

Provisions for Income Taxes

Current Expense

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

From Operations

and Interest Income

(Loss) on Equity Securities

( 2,368,000 )

( 1,008,000 )

( 1,197,000 )

(Loss) on Investments

on Sale of Assets

Other Income (Loss)

( 2,103,000 )

( 1,037,000 )

(Loss) Before Provisions for Income Taxes

for Income Taxes:

Tax (Benefit) Expense

Income Tax Expense (Benefit)

Income (Loss)

Per Share of Common Stock

Average Number of Common Shares

accompanying notes to the unaudited condensed financial statements

RISK INDUSTRIES, INC.

STATEMENTS OF COMPREHENSIVE INCOME

THE THREE MONTHS ENDED JULY 31, 2023 AND 2022

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

THE THREE AND SIX MONTHS ENDED OCTOBER 31, 2023 AND 2022

Income (Loss)

Comprehensive (Loss), Net of Tax

(loss) on debt securities:

holding (losses) arising during period

tax benefit related to other comprehensive income

Comprehensive (Loss)

Comprehensive

Income (Loss)

$ ( 262,000 )

accompanying notes to the unaudited condensed financial statements

RISK INDUSTRIES, INC.

STATEMENTS OF STOCKHOLDERS’ EQUITY

THE THREE MONTHS ENDED OCTOBER 31, 2023 AND 2022

July 31, 2022

of common stock

declared at $ 0.60 per common share outstanding

(loss), net of tax effect

October 31, 2022

July 31, 2023

Other Comprehensive Income, Net of Tax

Unrealized gain on debt securities:

Unrealized holding gains (losses) arising during period

Income tax (expense) benefit related to other comprehensive income

Other Comprehensive Income

Comprehensive Income

accompanying notes to the condensed financial statements

of common stock

declared at $ 0.65 per common share outstanding

(loss), net of tax effect

October 31, 2023

accompanying notes to the unaudited condensed financial statements

RISK INDUSTRIES, INC.

OF STOCKHOLDERS’ EQUITY

THE THREE MONTHS ENDED JULY 31, 2023 and 2022

Preferred Stock

Balances, April 30, 2022

Prior period adjustment for tax provisions related to depreciation

Purchases of common stock

Unrealized gain, net of tax effect

Balances, July 31, 2022

Preferred Stock

Balances, April 30, 2023

Purchases of common stock

Unrealized gain, net of tax effect

Balances, July 31, 2023

accompanying notes to the condensed financial statements

STATEMENTS OF STOCKHOLDERS’ EQUITY

THE THREE MONTHS ENDED OCTOBER 31, 2023 AND 2022

(Common Class A)

Comprehensive

July 31, 2022

$ ( 4,549,000 )

$ ( 117,000 )

of common stock

Dividend declared at $ 0.60

per common share outstanding

( 2,958,000 )

(loss), net of tax effect

October 31, 2022

$ ( 4,550,000 )

$ ( 263,000 )

(Common Class A)

Comprehensive

July 31, 2023

$ ( 4,576,000 )

$ ( 184,000 )

of common stock

declared at $ 0.65 per common share outstanding

( 3,203,000 )

(loss), net of tax effect

October 31, 2023

$ ( 4,595,000 )

$ ( 391,000 )

accompanying notes to the unaudited condensed financial statements

RISK INDUSTRIES, INC.

OF STOCKHOLDERS’ EQUITIY

THE THREE MONTHS ENDED JULY 31, 2023 and 2022

STATEMENTS OF STOCKHOLDERS’ EQUITY

THE SIX MONTHS ENDED OCTOBER 31, 2023 AND 2022

April 30, 2022

period adjustment for provisions related to depreciation

of common stock

declared at $ 0.60 per common share outstanding

(loss), net of tax effect

October 31, 2022

April 30, 2023

of common stock

declared at $ 0.65 per common share outstanding

(loss), net of tax effect

October 31, 2023

accompanying notes to the unaudited condensed financial statements

RISK INDUSTRIES, INC.

STATEMENTS OF STOCKHOLDERS’ EQUITY

THE SIX MONTHS ENDED OCTOBER 31, 2023 AND 2022

(Common Class A)

Comprehensive

2 unchanged sentences

$ ( 137,000 )

period adjustment for tax provisions related to depreciation

period adjustment for provisions related to depreciation

of common stock

gain (loss), net of tax effect

July 31, 2022

declared at $ 0.60 per common share outstanding

( 2,959,000 )

(loss), net of tax effect

October 31, 2022

$ ( 4,550,000 )

$ ( 263,000 )

(Common Class A)

Comprehensive

3 unchanged sentences

of common stock

gain, net of tax effect

gain (loss), net of tax effect

July 31, 2023

declared at $ 0.65 per common share outstanding

( 3,203,000 )

accompanying notes to the condensed financial statements

(loss), net of tax effect

October 31, 2023

$ ( 4,595,000 )

$ ( 391,000 )

accompanying notes to the unaudited condensed financial statements

RISK INDUSTRIES, INC.

STATEMENTS OF CASH FLOWS

THE THREE MONTHS ENDED JULY 31, 2023 AND 2022

July 31, 2023

July 31, 2022

Cash Flows from Operating Activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

(Gain) loss on sale of investments

Unrealized (gain) loss on equity securities

THE SIX MONTHS ENDED OCTOBER 31, 2023 AND 2022

FLOWS FROM OPERATING ACTIVITIES:

to reconcile net income to net cash provided by operating activities:

and amortization

on sale of investments

of investments

loss on equity securities

for credit losses on accounts receivable

for obsolete inventory

on sale of assets

in assets and liabilities:

( 1,103,000 )

Provision for credit losses on accounts receivable

Reserve for obsolete inventory

Deferred income taxes

(Gain) on sale of assets

Changes in assets and liabilities:

(Increase) decrease in:

Accounts receivable

Prepaid expenses and other current assets

Other receivables

Income tax overpayment

Increase (decrease) in:

Accounts payable

Accrued expenses and other current liabilities

Income tax payable

Net cash from operating activities

Cash Flows From Investing Activities:

Proceeds from sale of assets

(Purchase) of property and equipment

Proceeds from sale of marketable securities

(Purchase) of marketable securities

Net cash from investing activities

Cash Flows From Financing Activities:

(Purchase) of treasury stock

Dividends paid

Net cash from financing activities

Net Change in Cash and Cash Equivalents

Cash and Cash Equivalents, beginning of period

Cash and Cash Equivalents, end of period

Supplemental Disclosure for Cash Flow Information:

Cash payments for:

Income taxes paid

Interest paid

Cash receipts for:

accompanying notes to the condensed financial statements

( 1,755,000 )

expenses and projects in process

tax overpayment

(decrease) in:

cash from operating activities

FLOWS FROM INVESTING ACTIVITIES:

from sale of assets

of property and equipment

from sale of marketable securities

of marketable securities

cash from investing activities

FLOWS FROM FINANCING ACTIVITIES:

of treasury stock

( 2,914,000 )

( 2,689,000 )

cash from financing activities

( 2,955,000 )

( 2,692,000 )

CHANGE IN CASH AND CASH EQUIVALENTS

( 1,381,000 )

( 1,485,000 )

and Cash Equivalents, beginning of period

and Cash Equivalents, end of period

Disclosure for Cash Flow Information:

payments for:

receipts for:

accompanying notes to the unaudited condensed financial statements

RISK INDUSTRIES, INC.

TO CONDENSED FINANCIAL STATEMENTS

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

1 Unaudited Interim Financial Statements

3 unchanged sentences

these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s

April 30, 2023 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.

April 30, 2023 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 carrying

3 unchanged sentences

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, 2023.

Period 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.

six months ended October 31, 2023.

Issued Accounting Pronouncements — In October 2023, the FASB issued ASU No.

2023-06, Disclosure Improvements .

guidance clarifies or improves disclosure and presentation requirements on a variety of topics in the codification.

The amendments will

align the requirements in the FASB Accounting Standard Codification with the SEC’s regulations.

The amendments are effective prospectively

on the date each individual amendment is effectively removed from Regulation S-X or Regulation S-K.

The Company is in the process of

evaluating the impact that the adoption of this ASU will have on the financial statements and related disclosures, which is not expected

to be material.

November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic280):

Improvements to Reportable Segment Disclosures .

The new guidance is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant

segment expenses.

The amendments are effective retrospectively for fiscal years beginning after December 15, 2023 and interim periods

within fiscal years beginning after December 15, 2024.

The Company is in the process of evaluating the impact that the adoption of this

ASU will have to the financial statements and related disclosures, which is not expected to be material.

2 Investments

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 August 2023 and July

The investments in debt securities, which include municipal bonds and bond funds, mature between February 2024 and July

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 July 31, 2023 and April 30, 2023, investments consisted of the following:

of October 31, 2023 and April 30, 2023, investments consisted of the following:

Schedule of Investments

Investments at

July 31, 2023

Municipal bonds

$ ( 372,000 )

Equity securities

Money markets and CDs

markets and CDs

$ ( 1,187,000 )

Investments at

April 30, 2023

Municipal bonds

$ ( 230,000 )

Equity securities

Money markets and CDs

markets and CDs

$ ( 753,000 )

11 unchanged sentences

to determine if impairment changes are required.

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

July 31, 2023 and 2022, respectively.

As a result of this standard, management recorded an impairment loss of $ 22,000 for

the quarter and six-month period ended October 31, 2023, while there were no impairment losses recorded for either of the quarter or

the six months ended October 31, 2022.

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

1 unchanged sentence

when a sale happens.

For the quarter ended July 31, 2023, the Company had sales of equity securities which yielded gross realized gains

For the quarter ended October 31, 2023 the Company had sales of equity securities which yielded gross realized gains

of $ 108,000 and gross realized losses of $ 60,000 .

1 unchanged sentence

but gross realized losses of $ 2,000 were recorded.

During the quarter ending July 31, 2022, the Company recorded gross realized gains

and losses on equity securities of $ 197,000 and $ 267,000 , respectively, while sales of debt securities did not yield any gross realized

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

The gross realized loss numbers include would include the impaired figures

listed in the previous paragraph if there happened to be any.

As for the six-months ended October 31, 2023 the Company had sales of equity securities

which yielded gross realized gains of $ 214,000 and gross realized losses of $ 278,000 .

For the same six-month period, sales of debt securities

did not yield any gross realized gains, but gross realized losses of $ 7,000 were recorded.

During the quarter ending October 31, 2022,

the Company recorded gross realized gains and losses on equity securities of $ 89,000 and $ 187,000 , respectively, while sales of debt

securities did not yield any gross realized gains, but gross realized losses of $ 12,000 were recorded.

During the six-months ending October

31, 2022, the Company recorded gross realized gains and losses on equity securities of $ 285,000 and $ 453,000 , respectively, while sales

of debt securities did not yield any gross realized gains, but gross realized losses of $ 41,000 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

July 31, 2023 and April 30, 2023, respectively.

Loss Breakdown by Investment Type at July 31, 2023

October 31, 2023 and April 30, 2023, respectively.

Loss Breakdown by Investment Type at October 31, 2023

Schedule of Unrealized Loss Breakdown by Investment

Less than 12 months

than 12 months

months or greater

Unrealized Loss

Municipal bonds

$ ( 301,000 )

$ ( 372,000 )

Equity securities

$ ( 421,000 )

$ ( 766,000 )

$ ( 1,187,000 )

Loss Breakdown by Investment Type at April 30, 2023

Less than 12 months

than 12 months

months or greater

Unrealized Loss

Municipal bonds

$ ( 224,000 )

$ ( 230,000 )

Equity securities

$ ( 155,000 )

5 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 July 31, 2023 and April 31, 2023.

these investments to be other-than-temporarily impaired at October 31, 2023 and April 30, 2023.

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 July 31, 2023 and April 30, 2023.

at July 31, 2023 and April 30, 2023 consisted of the following:

impaired at October 31, 2023 and April 30, 2023.

3 Inventories

at October 31, 2023 and April 30, 2023 consisted of the following:

of Inventories

Raw materials

Work in process

Finished goods

Inventory gross

allowance for obsolete inventory

Inventories, net

4 Business Segments

1 unchanged sentence

Schedule of Financial Information Relating to Industry Segments

Security alarm products

Cable & wiring tools

Other products

Total net revenue

alarm products

& wiring tools

from operations:

alarm products

& wiring tools

income from operations

Security alarm products

Cable & wiring tools

Other products

Total income from operations

and amortization:

alarm products

& wiring tools

depreciation and amortization

Security alarm products

Cable & wiring tools

Other products

Corporate general

Total depreciation and amortization

expenditures:

alarm products

& wiring tools

capital expenditures

Security alarm products

Cable & wiring tools

Other products

Corporate general

Total capital expenditures

July 31, 2023

April 30, 2023

Identifiable assets:

Security alarm products

Cable & wiring tools

Other products

Corporate general

alarm products

& wiring tools

5 Earnings per Share

Net Income (Loss) Per Share

Basic income (loss) per share

of common stock attributable to common stockholders is calculated by dividing net income (loss) attributable to common stockholders by

the weighted-average shares of common stock outstanding for the period.

Potentially dilutive shares, which are based on the weighted-average

shares of common stock underlying outstanding stock-based awards using the treasury stock method or the if-converted method, as applicable,

are included when calculating diluted net income (loss) per share of common stock attributable to common stockholders when their effect

The dilutive common shares for the three months ended October 31, 2023 are not included in the computation of diluted earnings

per share because to do so would be anti-dilutive.

As of October 31, 2023 there were 20,500 potentially dilutive shares.

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

of Basic and Diluted Earnings Per Share

For the three months ended July 31, 2023

the three months ended October 31, 2023

(Denominator)

Effect of dilutive Convertible Preferred Stock

For the three months ended July 31, 2022

the three months ended October 31, 2022

(Denominator)

Effect of dilutive Convertible Preferred Stock

of dilutive Convertible Preferred Stock

the six months ended October 31, 2023

(Denominator)

of dilutive Convertible Preferred Stock

the six months ended October 31, 2022

(Denominator)

of dilutive Convertible Preferred Stock

6 Retirement Benefit Plan

12 unchanged sentences

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

Matching contributions of approximately

$ 16,000 were paid in each of the quarters ending July 31, 2023 and 2022, respectively.

Matching contributions by the

Company of approximately $ 14,000 and $ 13,000 were paid during each quarter ending October 31, 2023 and 2022, respectively.

the Company paid matching contributions of approximately $ 29,000 during each of six-month periods ending October 31, 2023 and 2022.

7 Fair Value Measurements

22 unchanged sentences

and Marketable Securities

of July 31, 2023 and April 30, 2023, our investments consisted of money markets, publicly traded equity securities, real estate investment

of October 31, 2023 and April 30, 2023, our investments consisted of money markets, publicly traded equity securities, real estate investment

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

10 unchanged sentences

Schedule of Assets Measured at Fair Value on Recurring Basis

Assets Measured at Fair Value on a Recurring Basis as of

July 31, 2023

Municipal Bonds

Equity Securities

Money Markets and CDs

Total fair value of assets measured on a recurring basis

Assets Measured at Fair Value on a Recurring Basis as of

Measured at Fair Value on a Recurring Basis as of

October 31, 2023

Markets and CDs

fair value of assets measured on a recurring basis

Measured at Fair Value on a Recurring Basis as of

April 30, 2023

Municipal Bonds

Equity Securities

Money Markets and CDs

Total fair value of assets measured on a recurring basis

Markets and CDs

fair value of assets measured on a recurring basis

8 Subsequent Events

1 unchanged sentence

FINANCIAL INFORMATION

Discussion and Analysis of Financial Condition and Results of Operations

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management Discussion and Analysis of Financial Condition and Results of Operations

DISCUSSION AND ANALYSIS

FINANCIAL CONDITION

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 current information becomes available in the future.

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 condensed financial statements, and with the Company’s audited

financial statements and discussion for the fiscal year ended April 30, 2023.

Company’s performance remained steady during the quarter ended July 31, 2023 as compared to the quarter ended July 31, 2022.

sales have decreased when comparing to the same quarter last year, overall net income is up because unrealized gains on investments are

showing gains in the current quarter, while for the same quarter last year both of those categories were loss amounts.

Also, gross profit

and income from operations are lower when comparing to the same quarter last year.

This is because of the increased costs of raw materials

The decline in sales is a result of a slowing economy which has seen inflation climb to some of its highest levels in 15 years

and, in turn, impacts the housing market, which the Company is directly tied to, negatively.

The Company still has a considerable back-order

log and there have 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 the ongoing effect of the COVID-19 pandemic and inflation.

Possible ongoing effects of COVID-19 include, but are not limited

to, price increases and/or delays in the supply chain, reduced sales, and economic conditions impacting the stock market.

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.

Company’s performance has remained steady through the first half of the current fiscal year with the second quarter showing an

increase in sales over the first quarter of the current fiscal year.

This is mainly due to having the ability to obtain raw materials

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

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

As far as overall company performance, the net income is up when comparing the current six-month period to the prior six-month

Management continues to keep manufacturing and operating expenses in check and the current year realized and unrealized gains

(losses) on investments are showing fewer losses than for the same periods last year.

Opportunities include keeping up with the business

growth, finding ways to get our products out to our customers in a timelier 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 expected to hit the marketplace

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 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 for the quarter ended July 31, 2023 showed a 9.25% decrease over the same period in the prior year.

The Company saw decreased

sales resulting primarily from a weakened economy, which has constrained the housing market, and inflation.

Management also believes

that sales stay at a consistent rate due to our ongoing commitment to outstanding customer service and our ability to customize products.

cost of goods sold percentage increased from 51.00% of sales in the prior year, to 52.07% 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 $8,000 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 increased to 22.82% for the quarter ended July 31, 2023 as compared to 20.86% for

sales were $6,053,000 for the quarter ended October 31, 2023, which is a 7.76% increase from

the corresponding quarter last year.

The dollar amount decrease is the result of decreased sales commissions.

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, 2023 was at $1,187,000, which is a 19.03% decrease from the corresponding quarter

last year, which had income from operations of $1,466,000.

income and expenses showed a $1,773,000 gain for the quarter ended July 31, 2023 as compared to a $102,000 loss for the quarter ended

July 31, 2022.

For the three months ended July 31, 2023, $1,634,000 of unrealized gains from equity securities were recorded, compared

to $189,000 of unrealized losses from equity securities recorded for the three months ended July 31, 2022.

The remainder of the increase

is primarily due to dividend and interest income paid on investments.

Company’s provision for income taxes showed an increase of $273,000 from $313,000 in the quarter ended July 31, 2022 to $586,000

for the quarter ended July 31, 2023.

This increase is primarily due to increased deferred taxes resulting from unrealized gains on

equity securities for the current quarter.

turn, net income for the quarter ended July 31, 2023 was $2,374,000, a 125.88% increase from the corresponding quarter last year,

which showed net income of $1,051,000.

per share for the quarter ended July 31, 2023 were $0.48 per common share and $0.21 per common share for the quarter ended July 31,

Year-to-date net sales were $10,781,000 at October 31,

2023, which is a 0.42% decrease from the same period last year.

The increase in sales in

the current quarter is a result of the economy rebounding in the second half of the calendar

year and having management figuring out more efficient ways to get products out to our customers.

Also, the ongoing commitment towards outstanding customer service and customization of products

are a few of the many reasons sales continue to grow.

of goods sold was 48.72% of net sales for the quarter ended October 31, 2023 and was 52.95%

for the same quarter last year.

Year-to-date cost of goods sold percentages were 50.19% for

the current six months and 52.01% for the corresponding six months last year.

cost of goods sold percentage goals of keeping labor and other manufacturing expenses at

less than 50% have been met for the quarter and are just slightly over for year-to-date results.

The decreased cost of goods sold percentages are a result of the economy gaining stability

recently and Management finding ways to be more efficient.

expenses were up $6,000 for the quarter and were down $2,000 for the six-months ended October

31, 2023 as compared to the corresponding periods last year.

But when comparing percentages

in relation to net sales, the operating expenses for the quarter ended October 31, 2023 was

18.77% of net sales while it was 20.12% of net sales for the same quarter the prior year.

For year-to-date numbers, operating expense were 20.55% and 20.48% of net sales for the six

months ended October 31, 2023 and 2022, respectively.

The Company has been able to keep the

operating expenses at less than 25% of net sales for many years now;

however, the actual

dollar amount increase is because of increased commission amounts (since sales have increased)

and additional labor costs for wage increases.

from operations for the quarter ended October 31, 2023 was at $1,968,000, which is a 30.07%

increase from the corresponding quarter last year, which had income from operations of $1,513,000.

Income from operations for the six months ended October 31, 2023 was at $3,155,000, which

is a 5.91% increase from the corresponding six months last year, which had income from operations

of $2,979,000.

income and expenses are down when comparing the current quarter to the same quarter of the

prior year, with a decrease of $1,168,000 in the current quarter.

Comparably, other income

and expenses are up by $707,000 when comparing the current six-month period to the prior

six-month period.

Most of 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 losses in the current quarter and year-to-date

numbers are the unrealized gain and loss on equity securities numbers.

The Company is at

the mercy of the stock market when it comes to these figures and inflation and the current

state of the economy has influenced these numbers.

net income for the quarter ended October 31, 2023 was down $662,000, or 109.06%, over the

same quarter last year.

Conversely, net income for the six-month period ended October 31,

2023 was up $660,000, or 39.78%, over the same period in the prior year.

per common share for the quarter ended October 31, 2023 were ($0.01) per share and $0.47

per share for the year-to-date numbers.

EPS for the quarter and six months ended October

31, 2022 were $0.12 per share and $0.34 per share, respectively.

and capital resources

cash increased $611,000 during the quarter ended July 31, 2023 as compared to an increase of $1,571,000 during the corresponding

quarter last year.

The details are listed below.

receivable, net decreased $431,000 for the quarter ending July 31, 2023 compared with a $499,000 decrease for the same quarter last

The smaller decrease in accounts receivable is directly attributable to a decrease in sales and customers being able to pay

in a slightly timelier manner.

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

An analysis of accounts receivable shows that 5.14% of the balance was over 90 days at July 31, 2023.

increased $521,000 during the current quarter as compared to a $947,000 increase last year.

The smaller increase is primarily due

to the fact that the Company has slowed down on buying raw materials due to decreased orders and that the prices of raw materials

have leveled out while labor costs continue to increase.

the quarter ended July 31, 2023, there was a $482,000 increase in prepaid expenses and other current assets compared to a decrease

of $317,000 for the quarter ended July 31, 2022.

The current increase is due to having to prepay for inventory during the quarter;

therefore, having more money in prepayments of raw materials on the books.

tax overpayment for the quarter ended July 31, 2023 decreased $304,000, compared to a $409,000 decrease in income tax payable for

the quarter ended July 31, 2022.

The current decrease is due to decreased income.

Also, the corporate income tax rate in Nebraska

decreased to 7.25% from 7.5% for the current fiscal year.

payable shows a decrease of $50,000 for the quarter ended July 31, 2023 compared to a decrease of $21,000 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 and other current liabilities increased $2,000 for the current quarter as compared to a $121,000 increase for the quarter

ended July 31, 2022.

The difference in the amounts is primarily due to timing of when payroll periods end and decreases in sales

Company purchased $201,000 of property and equipment during the current fiscal quarter.

In comparison, $74,000 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, 2023 was $150,000 compared to $111,000 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 quarter ended July 31, 2023 the Company bought

back $22,000 worth of treasury stock and $2,000 was bought back during the quarter ended July 31, 2022.

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, 2023

July 31, 2022

Working capital

(current assets – current liabilities)

Current ratio

(current assets / current liabilities)

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

cash decreased $1,381,000 during the six months ended October 31, 2023 as compared to a decrease

of $1,485,000 during the corresponding period last year.

receivable increased $553,000 for the six months ended October 31, 2023 compared with a $75,000

decrease for the same period last year.

The current year increase is a result of improved

sales during the second quarter and having a slight decline in collections of accounts receivable

over the last year.

An analysis of accounts receivable shows that 6.71% of the receivables

were over 90 days at October 31, 2023, while 5.02% were over 90 days for the same period

● Inventories

increased $1,103,000 during the current six-month period as compared to a $1,755,000 increase

The smaller increase in the current year is primarily due to not buying as many

raw materials as management did during the prior six-month period.

Management has also seen

slight decreases in raw material prices during the current year as compared to the six-months

period ending October 31, 2022.

expenses saw a $608,000 decrease for the current six months, primarily due to having inventory

delivered during the current six-month period;

therefore, having less money in prepayments

of raw materials on the books.

The prior year six months showed a $798,000 decrease in prepaid

tax overpayment decreased $25,000 for the current six-month period, compared to having an

increase of $364,000 in income tax payable for the six-months ended October 31, 2022.

of the current decrease is due to having the corporate income tax rate in Nebraska decrease

to 7.25% from 7.5% for the current fiscal year.

payable shows a decrease for the current six-month period of $323,000 as it shows a decrease

for the prior six-month periods of $80,000.

The company strives to pay all invoices within

terms, and the variance is primarily due to the timing of receipt of products and payment

expenses decreased $72,000 for the current six-month period as compared to a $48,000 increase

for the six-month period ended October 31, 2022.

The difference in the amounts is primarily

due to timing issues.

for our investment activities, the Company purchased $243,000 of property and equipment during

the current six-month period.

In comparison, $209,000 was spent on purchases of property

and equipment during the corresponding six months last year.

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

During the six-month period ended October 31, 2023 there was quite a bit of buy/sell

activity in the investment accounts.

Net cash spent on purchases of marketable securities

for the six-month period ended October 31, 2023 was $273,000 compared to $224,000 spent in

the prior six-month period.

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 a

quarterly service fee based on the value of the investments.

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

six-month period ended October 31, 2023, the Company purchased $41,000 worth of treasury

stock, in comparison to $3,000 repurchased in the corresponding six-month period last year.

company declared a dividend of $0.65 per share of common stock on September 30, 2023, which

was paid out during the second quarter.

This is an increase to the dividend of $0.60, which

was declared and paid during the second fiscal quarter last year.

Product Development

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:

Company and its engineering department continue to develop enhancements to product lines, develop new products that 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.

been demand from our customers for this type of high security magnetic reed switch.

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.

is being done on updating our small profile glass break detector, in addition to looking at development of programmable temperature

and humidity sensors with built-in hysteresis.

These sensors

are for high security applications such as government buildings, military use, nuclear facilities,

and financial institutions.

is being done on updating our small profile glass break detector, in addition to looking

at the development of programmable temperature and humidity sensors with built-in hysteresis.

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 monitoring

devices which include glass break detection, tilt sensing and environmental monitoring.

A redesign of our brass water valve shut-off

system is near completion.

We are considering 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 monitoring devices which include

glass break detection, tilt sensing and environmental monitoring.

A redesign of our brass

water valve shut-off system is near completion.

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

5 unchanged sentences

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.

Our products are tied

to the housing industry and will fluctuate with building trends.

RISK INDUSTRIES, INC.

FINANCIAL INFORMATION

and Qualitative Disclosures About Market Risk

disclosure does not apply.

Quantitative and Qualitative Disclosures about Market Risk

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