What changed in this filing

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Item 1. Financial Statements

2024-03-15 compared with 2023-12-15 · 405 added, 396 removed, 227 unchanged (78% of the section changed)

Financial Statements

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

unaudited financial statements for the three- and nine-month period ended January 31, 2024, are attached hereto.

RISK INDUSTRIES, INC.

BALANCE SHEETS

and cash equivalents

and securities, at fair value

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

tax overpayment

Current Assets:

and Equipment, net, at cost

in Limited Land Partnership, at cost

Cash and cash

Investments and securities

Accounts receivable:

Trade, net of allowance

for credit losses of $ 14,864 and $ 17,922

Income tax overpayment

Inventories, net

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 unaudited condensed financial statements.

1 unchanged sentence

BALANCE SHEETS

AND STOCKHOLDERS’ EQUITY

payable, trade

Payroll expense

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities

Accounts payable,

Dividends payable

Deferred income

Total Current Liabilities

Long-Term Liabilities

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

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

Retained earnings

treasury stock, 3,604,051 and 3,572,338 shares, at cost

1 unchanged sentence

( 4,554,000 )

Total Stockholders’

TOTAL LIABILITES AND

STOCKHOLDERS’ EQUITY

LIABILITIES AND STOCKHOLDERS’ EQUITY

accompanying notes to the unaudited condensed financial statements.

RISK INDUSTRIES, INC.

INCOME (LOSS) STATEMENTS

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

Cost of Goods Sold

INCOME STATEMENTS

THE THREE AND NINE MONTHS ENDED JANUARY 31, 2024 AND 2023

Cost of Goods

( 2,734,000 )

2 unchanged sentences

( 8,076,000 )

and Administrative

Operating Expenses

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

General and Administrative

Total Operating Expenses

Income From Operations

Other Income (Expense)

Dividend and Interest Income

Unrealized Gain on equity securities

Gain (Loss) on Sale of

Gain on Sale of Assets

Total Other Income (Expense)

Income Before Provisions for Income Taxes

Provisions for Income Taxes:

Current Expense

Tax Expense (Benefit)

Total Income Tax Expense

Income Per Share of Common Stock

Weighted Average Number of Common Shares Outstanding

accompanying notes to the unaudited condensed financial statements.

RISK INDUSTRIES, INC.

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 )

STATEMENT OF COMPREHENSIVE INCOME

THE THREE AND NINE MONTHS ENDED JANUARY 31, 2024 AND 2023

Other Comprehensive Income/(Loss), Net of Tax

Unrealized gain (loss)

on debt securities:

Unrealized holding gains (losses) arising

during period

tax (expense) related to other comprehensive income

Comprehensive Income (Loss)

Comprehensive Income

accompanying notes to the unaudited condensed financial statements.

1 unchanged sentence

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

of common stock

declared at $ 0.65 per common share outstanding

(loss), net of tax effect

October 31, 2023

THE THREE MONTHS ENDED JANUARY 31, 2024 AND 2023

Balances, October 31, 2023

Purchases of Common Stock

Unrealized gain, net of tax effect

Balances, January 31,

Balances, October 31, 2022

Purchases of common stock

Unrealized gain, net of tax effect

Balances, January 31,

accompanying notes to the unaudited condensed financial statements.

1 unchanged sentence

STATEMENTS OF STOCKHOLDERS’ EQUITY

THE THREE MONTHS ENDED OCTOBER 31, 2023 AND 2022

THE THREE MONTHS ENDED JANUARY 31, 2024 AND 2023

Treasury Stock

(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 )

Other Comprehensive

Balances, October

$ ( 4,595,000 )

(loss), net of tax effect

October 31, 2022

$ ( 391,000 )

Purchases of common stock

Unrealized gain, net of tax effect

Balances, January 31, 2024

$ ( 4,918,000 )

Treasury Stock

(Common Class A)

Comprehensive

July 31, 2023

$ ( 4,576,000 )

$ ( 184,000 )

of common stock

declared at $ 0.65 per common share outstanding

Other Comprehensive

Balances, October 31, 2022

$ ( 4,550,000 )

$ ( 263,000 )

(loss), net of tax effect

October 31, 2023

Purchases of common stock

Unrealized gain, net of tax effect

Balances, January 31, 2023

$ ( 4,552,000 )

3 unchanged sentences

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

THE NINE MONTHS ENDED JANUARY 31, 2024 AND 2023

Balances, April 30, 2023

Purchases of common stock

Dividend declared at $ 0.65 per common share

Unrealized gain, net of tax effect

Balances, January 31,

Balances, April

Prior period adjustment for provisions related

to depreciation

Purchases of common stock

Dividend declared at $ 0.60

per common share outstanding

Unrealized (loss), net of

January 31, 2023

accompanying notes to the unaudited condensed financial statements.

1 unchanged sentence

STATEMENTS OF STOCKHOLDERS’ EQUITY

THE SIX MONTHS ENDED OCTOBER 31, 2023 AND 2022

(Common Class A)

Comprehensive

April 30, 2022

THE NINE MONTHS ENDED JANUARY 31, 2024 AND 2023

Other Comprehensive

Balances, April 30, 2023

$ ( 4,554,000 )

$ ( 161,000 )

period adjustment for provisions related to depreciation

of common stock

declared at $ 0.60 per common share outstanding

Purchases of common stock

Dividend declared at $ 0.65 per common share outstanding

( 3,203,000 )

(loss), net of tax effect

October 31, 2022

Unrealized gain, net of tax effect

Balances, January 31, 2024

$ ( 4,918,000 )

Other Comprehensive

Balances, April 30, 2022

$ ( 4,547,000 )

(Common Class A)

Comprehensive

April 30, 2023

$ ( 137,000 )

$ ( 4,547,000 )

of common stock

declared at $ 0.65 per common share outstanding

$ ( 137,000 )

Prior period adjustment for provisions related to depreciation

Purchases of common stock

Dividend declared at $ 0.60 per common share outstanding

( 2,958,000 )

Unrealized gain

(loss), net of tax effect

October 31, 2023

Balances, January 31, 2023

$ ( 4,552,000 )

$ ( 139,000 )

accompanying notes to the unaudited condensed financial statements

RISK INDUSTRIES, INC.

STATEMENTS OF CASH FLOWS

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:

$ ( 4,552,000 )

$ ( 139,000 )

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

accompanying notes to the unaudited condensed financial statements.

RISK INDUSTRIES, INC.

STATEMENT OF CASH FLOWS

THE NINE MONTHS ENDED JANUARY 31, 2024 AND 2023

CASH FLOWS FROM OPERATING ACTIVITIES:

Adjustments to reconcile

net income to net cash provided by operating activities:

Depreciation and amortization

Loss on sale of investments

Impairment on investments

Unrealized (gain) on equity

( 2,149,000 )

Provision for credit losses

on accounts receivable

Reserve for obsolete inventory

Deferred income taxes

(Gain) on sales of assets

Changes in assets and liabilities:

(Increase) decrease in:

Accounts receivable

( 2,444,000 )

cash from financing activities

Prepaid expenses

Other receivables

Income tax overpayment

Increase (decrease) in:

Accounts payable

Accrued expenses

Net cash from operating

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sale of assets

(Purchase) of property

and equipment

Proceeds from sale of marketable

(Purchase) of marketable

from long-term investment

Net cash from investing

CASH FLOWS FROM FINANCING

(Purchase) of treasury

( 2,914,000 )

( 2,689,000 )

CHANGE IN CASH AND CASH EQUIVALENTS

Net cash from financing

( 3,278,000 )

( 2,694,000 )

and Cash Equivalents, beginning of period

and Cash Equivalents, end of period

Disclosure for Cash Flow Information:

payments for:

receipts for:

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:

Cash receipts for:

accompanying notes to the unaudited condensed financial statements.

RISK INDUSTRIES, INC.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

TO CONDENSED FINANCIAL STATEMENTS

Unaudited Interim Financial Statements

2 unchanged sentences

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, 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

value of assets.

these unaudited 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.

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 condensed financial statements requires the use of estimates and assumptions including

the carrying value of assets.

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

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

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.

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

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

January 31, 2023.

Issued Accounting Pronouncements — In 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

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.

December 2023, the FASB issued ASU No.

2023-09, Improvements to Tax Disclosures (Topic 740) , to enhance the transparency and decision

usefulness of income tax disclosures through changes to the rate reconciliation and income taxes paid information.

This guidance is effective

for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is evaluating the impact of adopting this

new accounting guidance on its Consolidated Financial Statements.

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

6 unchanged sentences

Dividend and interest income are reported as earned.

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

Schedule of Investments

of January 31, 2024 and April 30, 2023, investments consisted of the following:

of Investments

Investments at

January 31, 2024

Unrealized Gains

Unrealized Losses

Municipal bonds

$ ( 162,000 )

markets and CDs

Equity securities

Money markets and CDs

$ ( 464,000 )

Investments at

April 30, 2023

Unrealized Gains

Unrealized Losses

Municipal bonds

$ ( 230,000 )

markets and CDs

Equity securities

Money markets and CDs

$ ( 753,000 )

11 unchanged sentences

to determine if impairment changes are required.

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.

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

ended January 31, 2024 and 2023, respectively.

As for the year-to-date numbers, management recorded an impairment loss of $ 22,000 for

the nine-month period ended January 31, 2024, while there were no impairment losses recorded for the nine-month period ended January

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

Therefore, either a realized gain or loss is recorded

when a sale happens.

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

when a sale occurs.

For the quarter ended January 31, 2024 the Company had sales of equity securities which yielded gross realized gains

of $ 116,000 and gross realized losses of $ 84,000 .

1 unchanged sentence

but gross realized losses of $ 14,000 were recorded.

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

As for the nine-months ended January 31, 2024 the Company had sales of equity securities

which yielded gross realized gains of $ 329,000 and gross realized losses of $ 362,000 .

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

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

did not yield any gross realized gains, but gross realized losses of $ 22,000 were recorded.

During the quarter ending October 31, 2022,

During the quarter ending January 31, 2023,

the Company recorded gross realized gains and losses on equity securities of $ 118,000 and $ 69,000 , respectively, while sales of debt

securities did not yield any gross realized gains, but gross realized losses of $ 5,000 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”,

During the nine-month period ending

January 31, 2023, the Company recorded gross realized gains and losses on equity securities of $ 403,000 and $ 522,000 , respectively.

the same nine-month period last year, sales of debt securities did not yield any gross realized gains, but gross realized losses of $ 46,000

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”,

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

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

Loss Breakdown by Investment Type at October 31, 2023

Schedule of Unrealized Loss Breakdown by Investment

January 31, 2024 and April 30, 2023, respectively.

Loss Breakdown by Investment Type at January 31, 2024

of Unrealized Loss Breakdown by Investment

than 12 months

months or greater

$ ( 301,000 )

Municipal bonds

$ ( 153,000 )

$ ( 163,000 )

Equity securities

$ ( 368,000 )

3 unchanged sentences

months or greater

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 October 31, 2023 and April 30, 2023.

these investments to be other-than-temporarily impaired at January 31, 2024 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 October 31, 2023 and April 30, 2023.

3 Inventories

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

impaired at January 31, 2024 and April 30, 2023.

at January 31, 2024 and April 30, 2023 consisted of the following:

of Inventories

allowance for obsolete inventory

Raw materials

Work in process

Finished goods

Inventory gross

allowance for

obsolete inventory

Inventories, net

Business Segments

following is financial information relating to industry segments:

Schedule of Financial Information Relating to Industry Segments

alarm products

& wiring tools

from operations:

alarm products

& wiring tools

of Financial Information Relating to Industry Segments

Security alarm

Cable & wiring tools

Income from operations:

and amortization:

alarm products

& wiring tools

Security alarm products

Cable & wiring tools

income from operations

Depreciation and amortization:

expenditures:

alarm products

& wiring tools

Security alarm products

Cable & wiring tools

Other products

Total depreciation and

Capital expenditures:

alarm products

& wiring tools

Security alarm products

Cable & wiring tools

Other products

Total capital expenditures

Identifiable assets:

Security alarm

Cable & wiring tools

Other products

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

the three months ended October 31, 2023

the three months ended January 31, 2024

(Denominator)

the three months ended October 31, 2022

Effect of dilutive

Convertible Preferred Stock

the three months ended January 31, 2023

(Denominator)

of dilutive Convertible Preferred Stock

the six months ended October 31, 2023

Effect of dilutive

Convertible Preferred Stock

the nine months ended January 31, 2024

(Denominator)

of dilutive Convertible Preferred Stock

the six months ended October 31, 2022

Effect of dilutive

Convertible Preferred Stock

the nine months ended January 31, 2023

(Denominator)

of dilutive Convertible Preferred Stock

Effect of dilutive

Convertible Preferred Stock

Retirement Benefit Plan

13 unchanged sentences

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.

Company of approximately $ 15,000 and $ 14,000 were paid during each quarter ending January 31, 2024 and 2023, respectively.

the Company paid matching contributions of approximately $ 45,000 and $ 43,000 during each nine-month period ending January 31, 2024 and

2023, respectively.

Fair Value Measurements

22 unchanged sentences

and Marketable Securities

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

of January 31, 2024 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.

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.

Our marketable securities are valued using third-party broker

The 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.

Value Hierarchy

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

following tables set 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.

1 unchanged sentence

level of input that is significant to the fair value measurement.

Schedule of Assets Measured at Fair Value on Recurring Basis

of Assets Measured at Fair Value on Recurring Basis

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

January 31, 2024

Total fair value of

assets measured on a recurring basis

Measured at Fair Value on a Recurring Basis as of

April 30, 2023

Markets and CDs

fair value of assets measured on a recurring basis

Total fair value of

assets measured on a recurring basis

8 Subsequent Events

17 unchanged sentences

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 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.

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, 2023.

Company’s performance in operations has seen a tick upward 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 to the fact that our business

is tied to the housing market and the winter months usually show a slowdown.

Opportunities include keeping up with 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 continue to work on new products that will be a

good fit for our industry and business.

Challenges in the coming months include getting products out to customers in a timely manner,

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.

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.

of Operations

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

the corresponding quarter last year.

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.

sales were $5,394,000 for the quarter ended January 31, 2024, which is a 23.55% increase from the corresponding quarter last year.

Year-to-date net sales were $16,175,000 at January 31, 2024, which is a 6.46% increase from the same period last year.

The improvement

in sales is a result of the economy rebounding and having the ability to get goods built and shipped to our customers.

to operate our business with our ongoing commitment to outstanding customer service and our ability to customize products.

of goods sold was 50.69% of net sales for the quarter ended January 31, 2024 and was 55.98% for the same quarter last year.

cost of goods sold percentages were 50.36% for the current nine months and 53.15% for the corresponding nine months last year.

current cost of goods sold percentages have dropped to be just 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 efficiently.

Raw material prices have come down during the current fiscal year as compared to the previous fiscal year,

but wages continue to rise to remain competitive in the job market.

Management offset some of these added expenses by implementing

a 2.5% price increase effective January 1, 2024.

expenses increased by $120,000 for the quarter and they increased by $116,000 for the nine-months ended January 31, 2024 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, 2024 was 21.17% of net sales while it was 23.41% of net sales for the same quarter the prior year.

For year-to-date

numbers, operating expenses were 20.75% and 21.32% of net sales for the nine months ended January 31, 2024 and 2023, 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 wage increases.

from operations for the quarter ended January 31, 2024 was $1,518,000, a 68.67% increase from the corresponding quarter last year,

which had income from operations of $900,000.

Income from operations for the nine months ended January 31, 2024 was $4,674,000, which

is a 20.53% increase from the corresponding nine months last year, which had income from operations of $3,878,000.

income and expenses for the quarter ended January 31, 2024 shows income of $3,329,000, which is a $1,553,000 increase from the corresponding

quarter last year, which had an income amount of $1,776,000.

Comparatively, there is an increase of $2,259,000 in other income for

the year-to-date numbers.

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 increase 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, the stock market has seen an upturn recently with decreased inflation and improvement in the economy.

net income for the quarter ended January 31, 2024 was up $1,230,000, or 61.22%, from the same quarter last year.

Similarly, net income

for the nine-month period ended January 31, 2024 was up $1,891,000, or 51.57%, from the same period in the prior year.

per common share for the quarter ended January 31, 2024 were $0.66 per share and $1.13 per share for the year-to-date numbers.

for the quarter and nine months ended January 31, 2023 were $0.41 per share and $0.74 per share, respectively.

and capital resources

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.

cash increased $428,000 during the nine months ended January 31, 2024 as compared to a decrease of $813,000 during the corresponding

period last year.

receivable increased $554,000 for the nine months ended January 31, 2024 compared with a $824,000 decrease for the same period last

The current year increase is a direct result of the increased sales, while there has been a slight uptick in collections of

accounts receivable.

An analysis of accounts receivable shows that 9.62% of the receivables were over 90 days at January 31, 2024.

increased $594,000 during the current nine-month period compared to an increase of $2,444,000 last year.

The smaller increase in

the current year is due to not having as many raw materials on hand since sales have increased.

Management has also seen slight decreases

in raw material prices during the current year as compared to the nine-month period ending January 31, 2023.

expenses saw a $515,000 decrease for the current nine months, primarily due to having inventory and machinery delivered during the

current nine-month period;

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

The prior nine-month period

showed a $458,000 decrease in prepaid expenses.

tax overpayment decreased $88,000 for the current nine-month period, compared to having an increase of $478,000 in income tax overpayment

for the nine-months ended January 31, 2023.

The current decrease is due to having to our income tax estimates be more aligned with

our net income.

payable shows a $164,000 decrease for the current nine-month period ended January 31, 2024 compared to an $84,000 increase for the

prior nine-month period.

The company strives to pay all invoices within terms, and the variance is primarily due to the timing of

receipt of products and payment of invoices.

expenses increased $120,000 for the current nine-month period compared to a $184,000 increase for the nine-month period ended January

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

for our investment activities, the Company spent approximately $263,000 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 $221,000.

Additionally,

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

During the nine-month

period ended January 31, 2024 the buy/sell activity in the investment accounts continued as usual.

Net cash spent on purchases of

marketable securities for the nine-month period ended January 31, 2024 was $556,000 compared to $648,000 spent in the prior nine-month

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.

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

For the nine-month period ended January 31, 2024, the

Company purchased $364,000 worth of treasury stock.

This is in comparison to $5,000 spent in the same nine-month period the prior

company paid out dividends of $2,914,000 during the nine months ending January 31, 2024.

These dividends were paid during the second

The company declared a dividend of $0.65 per share of common stock on September 30, 2023 and these dividends were paid by

October 31, 2023.

As for the prior year numbers, dividends paid was $2,689,000 for the nine months ending January 31, 2023.

of $0.60 per common share was declared and paid during the second fiscal quarter last year.

Product Development

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

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 various

stages of the development process include:

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

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

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 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 the 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 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.

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.

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

11 unchanged sentences

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