UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

~~[X]~~

~~Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934~~

[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the ~~quarter~~quarterly period ended ~~January~~July 31, ~~2018~~2020

~~[ ]~~

~~Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934~~

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ________________

Commission File Number: 000-05378

GEORGE RISK INDUSTRIES, INC.

(Exact name of ~~small business issuer~~registrant as specified in its charter)

Colorado		84-0524756
(State or other jurisdiction of ~~incorporation)~~incorporation or organization)		(~~IRS~~I.R.S. Employers Identification No.)

802 South Elm St.
Kimball, NE		69145
(Address of principal executive offices)		(Zip Code)

(308) 235-4645

(Registrant’s telephone number, including area code)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.10 par value	RSKIA	OTC Markets
Convertible Preferred Stock, $20 stated value	RSKIA	OTC Markets

Indicate by check mark whether the ~~issuer~~registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ]

~~Yes [X]~~

~~No [ ]~~

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (&232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ X ] No [ ]

~~Yes [ ]~~

~~No [X]~~

Indicate by check mark whether the registrant is a large accelerated filer, a non-accelerated filer, or a small reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated ~~filer” and~~filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]		Accelerated filer [ ]
Non-accelerated filer [ ]		Smaller reporting company ~~[X]~~[ X ]
	Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

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

APPLICABLE ONLY TO CORPORATE ISSUERS

The number of shares of the Registrant’s Common Stock outstanding, as of ~~March 16, 2018,~~September 18, 2020 was ~~4,968,447.~~

~~Transitional Small Business Disclosure Format:Yes [X] No [ ]~~4,949,927.

GEORGE RISK INDUSTRIES, INC.

PART I. FINANCIAL INFORMATION

~~Item 1. Financial Statements~~

ITEM 1:

Financial Statements

The unaudited financial statements for the ~~three and nine-month~~three-month period ended ~~January~~July 31, ~~2018,~~2020 are attached hereto.

GEORGE RISK INDUSTRIES, INC.

CONDENSED BALANCE SHEETS

	January 31, 2018		April 30, 2017		July 31, 2020		April 30, 2020
	(unaudited)				(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	3,952,000	$	6,456,000	$	7,491,000	$	6,458,000
Investments and securities		27,496,000		26,382,000
Investments and securities, at fair value						27,657,000		25,322,000
Accounts receivable:
Trade, net of $16,422 and $2,425 doubtful account allowance		2,471,000		1,848,000
Trade, net of $1,913 and $7,306 doubtful account allowance						2,920,000		2,964,000
Other		2,000		3,000		19,000		18,000
Income tax overpayment		474,000		253,000		—		56,000
Inventories, net		3,594,000		2,304,000		5,507,000		5,103,000
Prepaid expenses		487,000		193,000		334,000		516,000
Total Current Assets	$	38,476,000	$	37,439,000		43,928,000		40,437,000

Property and Equipment, net, at cost		948,000		739,000		1,505,000		1,465,000

Other Assets
Investment in Limited Land Partnership, at cost		273,000		273,000		320,000		320,000
Projects in process		—		13,000		108,000		21,000
Other		77,000		—		2,000		2,000
Total Other Assets	$	350,000	$	286,000		430,000		343,000

Intangible Assets, net	$	1,794,000		—
Intangible assets, net						1,486,000		1,517,000

TOTAL ASSETS	$	41,568,000	$	38,464,000	$	47,349,000	$	43,762,000

See accompanying notes to the condensed financial ~~statements.~~statements

GEORGE RISK INDUSTRIES, INC.

CONDENSED BALANCE SHEETS

(continued)

	January 31, 2018			April 30, 2017			July 31, 2020			April 30, 2020
	(unaudited)						(unaudited)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable, trade	$	308,000		$	69,000		$	304,000		$	187,000
Dividends payable		1,580,000			1,416,000			1,892,000			1,892,000
Accrued expenses:
Payroll and related expenses		178,000			308,000			386,000			450,000
Property taxes		3,000			—			3,000			—
Income tax payable								290,000			—
Notes payable								950,000			950,000
Total Current Liabilities	$	2,069,000		$	1,793,000			3,825,000			3,479,000

Long-Term Liabilities
Deferred income taxes		1,902,000			906,000			1,343,000			699,000
Total Long-Term Liabilities	$	1,902,000		$	906,000			1,343,000			699,000

Total Liabilities								5,168,000			4,178,000

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		99,000			99,000			99,000			99,000
Common stock, Class A, $.10 par value, 10,000,000 shares authorized, 8,502,881 shares issued and outstanding		850,000			850,000			850,000			850,000
Additional paid-in capital		1,934,000			1,736,000			1,934,000			1,934,000
Accumulated other comprehensive income		2,623,000			1,239,000			101,000			(4,000	)
Retained earnings		36,232,000			35,981,000			43,498,000			41,006,000
Less: treasury stock, 3,533,934 and 3,557,606 shares, at cost		(4,141,000	)		(4,140,000	)
Less: treasury stock, 3,552,954 and 3,552,954 shares, at cost								(4,301,000	)		(4,301,000	)
Total Stockholders’ Equity	$	37,597,000		$	35,765,000			42,181,000			39,584,000

TOTAL LIABILITES AND STOCKHOLDERS’ EQUITY	$	41,568,000		$	38,464,000
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY							$	47,349,000		$	43,762,000

See accompanying notes to the condensed financial statements

GEORGE RISK INDUSTRIES, INC.

CONDENSED INCOME STATEMENTS

FOR THE THREE MONTHS ENDED JULY 31, 2020 AND 2019

(Unaudited)

	Three months			Nine months			Three months			Nine months
	ended			ended			ended			ended			July 31, 2020			July 31, 2019
	Jan 31, 2018			Jan 31, 2018			Jan 31, 2017			Jan 31, 2017
Net Sales	$	3,260,000		$	8,597,000		$	2,645,000		$	8,194,000		$	4,047,000		$	3,552,000
Less: Cost of Goods Sold		(1,826,000	)		(4,337,000	)		(1,229,000	)		(3,899,000	)		(1,952,000	)		(1,769,000	)
Gross Profit	$	1,434,000		$	4,260,000		$	1,416,000		$	4,295,000			2,095,000			1,783,000

Operating Expenses
Operating Expenses:
General and Administrative		313,000			833,000			223,000			664,000			313,000			297,000
Sales		512,000			1,371,000			461,000			1,432,000			567,000			557,000
Engineering		22,000			69,000			17,000			59,000			29,000			14,000
Rent Paid to Related Parties		5,000			14,000			5,000			14,000			—			5,000
Total Operating Expenses	$	852,000		$	2,287,000		$	706,000		$	2,169,000			909,000			873,000

Income From Operations		582,000			1,973,000			710,000			2,126,000			1,186,000			910,000

Other Income (Expense)
Other		—			3,000			1,000			11,000			12,000			1,000
Dividend and Interest Income		376,000			811,000			332,000			650,000			156,000			193,000
Gain (Loss) on Investments		123,000			94,000			51,000			136,000
Gain (Loss) on Sale of Assets		—			4,000			—			—
Unrealized gain (loss) on equity securities														2,114,000			145,000
Gain (Loss) on Sale of Investments														(28,000	)		49,000
	$	499,000		$	912,000		$	384,000		$	797,000			2,254,000			388,000

Income Before Provisions for Income Taxes		1,081,000			2,885,000			1,094,000			2,923,000			3,440,000			1,298,000

Provisions for Income Taxes:
Provisions for Income Taxes
Current Expense		281,000			852,000			313,000			896,000			349,000			294,000
Deferred Tax Expense (Benefit)		9,000			1,000			(11,000	)		(24,000	)
Deferred tax expense														599,000			28,000
Total Income Tax Expense	$	290,000		$	853,000		$	302,000		$	872,000			948,000			322,000

Net Income	$	791,000		$	2,032,000		$	792,000		$	2,051,000		$	2,492,000		$	976,000

Cash Dividends
Common Stock ($0.36 per share)	$	—		$	1,780,000
Common Stock ($0.35 per share)							$	—		$	1,758,000
Basic Earnings Per Share of Common Stock													$	0.50		$	0.20
Diluted Earnings Per Share of Common Stock													$	0.50		$	0.20

Income Per Share of Common Stock
Basic	$	0.16		$	0.41		$	0.16		$	0.41
Diluted	$	0.16		$	0.41		$	0.16		$	0.41

Weighted Average Number of Common
Shares Outstanding
Basic		4,969,013			4,955,725			4,945,972			4,996,453
Diluted		4,989,513			4,976,225			4,966,472			5,016,953
Weighted Average Number of Common Shares Outstanding														4,949,927			4,956,389
Weighted Average Number of Shares Outstanding (Diluted)														4,970,427			4,976,889

See accompanying notes to the condensed financial statements

GEORGE RISK INDUSTRIES, INC.

CONDENSED ~~STATEMENT~~STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED JULY 31, 2020 AND 2019

(Unaudited)

	Three months			Nine months			Three months			Nine months
	ended			ended			ended			ended			July 31, 2020			July 31, 2019
	Jan 31, 2018			Jan 31, 2018			Jan 31, 2017			Jan 31, 2017
Net Income	$	791,000		$	2,032,000		$	792,000		$	2,051,000		$	2,492,000		$	976,000

Other Comprehensive Income, Net of Tax
Unrealized gain (loss) on securities:
Unrealized holding gains (losses) arising during period		1,247,000			2,585,000			570,000			796,000
Reclassification adjustment for gains (losses) included in net income		(88,000	)		(205,000	)		(5,000	)		(88,000	)
Income tax benefit (expense) related to other comprehensive income		(485,000	)		(995,000	)		(236,000	)		(296,000	)
Unrealized gain on debt securities:
Unrealized holding gains arising during period														149,000			49,000
Income tax expense related to other comprehensive income														(44,000	)		(14,000	)
Other Comprehensive Income		674,000			1,385,000			329,000			412,000			105,000			35,000

Comprehensive Income	$	1,465,000		$	3,417,000		$	1,121,000		$	2,463,000		$	2,597,000		$	1,011,000

See accompanying notes to the condensed financial statements

GEORGE RISK INDUSTRIES, INC.

~~CONDENSED STATEMENT~~STATEMENTS OF ~~CASH FLOWS~~ STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED JULY 31, 2020 and 2019

(Unaudited)

Nine months Nine months
ended ended
Jan 31, 2018 Jan 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 2,032,000 $ 2,051,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 163,000 138,000
(Gain) loss on sale of investments (117,000 ) (149,000 )
Impairments on investments 23,000 13,000
Reserve for bad debts 13,000 —
Reserve for obsolete inventory — 5,000
Deferred income taxes 1,000 (24,000 )
(Gain) loss on sale of assets (4,000 ) —
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable (636,000 ) 163,000
Inventories (1,291,000 ) 426,000
Prepaid expenses (359,000 ) (48,000 )
Other receivables 2,000 (5,000 )
Income tax overpayment (221,000 ) (43,000 )
Increase (decrease) in:
Accounts payable 239,000 20,000
Accrued expenses (127,000 ) (72,000 )
Net cash provided by (used in) operating activities $ (282,000 ) $ 2,475,000

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of assets 4,000 —
(Purchase) of property and equipment (342,000 ) (146,000 )
Proceeds from sale of marketable securities 2,013,000 586,000
(Purchase) of marketable securities (653,000 ) (668,000 )
(Purchase) of intangible assets (1,624,000 ) —
(Purchase) of long-term investment — (20,000 )
Net cash provided by (used in) investing activities $ (602,000 ) $ (248,000 )

CASH FLOWS FROM FINANCING ACTIVITIES:
(Purchase) of treasury stock (3,000 ) (551,000 )
Dividends paid (1,617,000 ) (1,596,000 )
Net cash provided by (used in) financing activities $ (1,620,000 ) $ (2,147,000 )

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ (2,504,000 ) $ 80,000

Cash and Cash Equivalents, beginning of period $ 6,456,000 $ 5,918,000
Cash and Cash Equivalents, end of period $ 3,952,000 $ 5,998,000

Supplemental Disclosure for Cash Flow Information:
Cash payments for:
Income taxes $ 1,320,000 $ 1,059,000
Interest paid $ 0 $ 0
Cash receipts for:
Income taxes $ 253,000 $ 125,000

Supplemental Disclosure of Noncash Investing and Financing Activities:
Issuance of treasury stock as part of asset acquisition $ 200,000 $ 0

	Preferred Stock				Common Stock Class A
	Shares		Amount		Shares		Amount
Balances, April 30, 2019		4,100	$	99,000		8,502,881	$	850,000

Purchases of common stock		—		—		—		—

Unrealized gain (loss), net of tax effect		—		—		—		—

Net Income		—		—		—		—

Balances, July 31, 2019		4,100	$	99,000		8,502,881	$	850,000

	Preferred Stock				Common Stock Class A
	Shares		Amount		Shares		Amount
Balances, April 30, 2020		4,100	$	99,000		8,502,881	$	850,000

Purchases of common stock		—		—		—		—

Unrealized gain (loss), net of tax effect		—		—		—		—

Net Income		—		—		—		—

Balances, July 31, 2020		4,100	$	99,000		8,502,881	$	850,000

See accompanying notes to the condensed financial statements

GEORGE RISK INDUSTRIES, INC.

STATEMENTS OF STOCKHOLDERS’ EQUITIY

FOR THE THREE MONTHS ENDED JULY 31, 2020 and 2019

(Unaudited)

							Accumulated
		Treasury Stock					Other
Paid-In		(Common Class A)					Comprehensive		Retained
Capital		Shares		Amount			Income		Earnings		Total
$	1,934,000		3,544,271	$	(4,227,000	)	$	14,000	$	40,883,000	$	39,553,000

	—		6,300		(53,000	)		—		—		(53,000	)

	—		—		—			35,000		—		35,000

	—		—		—			—		976,000		976,000

$	1,934,000		3,550,571	$	(4,280,000	)	$	49,000	$	41,859,000	$	40,511,000

							Accumulated
		Treasury Stock					Other
Paid-In		(Common Class A)					Comprehensive			Retained
Capital		Shares		Amount			Income			Earnings		Total
$	1,934,000		3,552,954	$	(4,301,000	)	$	(4,000	)	$	41,006,000	$	39,584,000

	—		—		—			—			—		—

	—		—		—			105,000			—		105,000

	—		—		—			—			2,492,000		2,492,000

$	1,934,000		3,552,954	$	(4,301,000	)	$	101,000		$	43,498,000	$	42,181,000

See accompanying notes to the condensed financial statements

GEORGE RISK INDUSTRIES, INC.

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED JULY 31, 2020 AND 2019

(Unaudited)

	July 31, 2020			July 31, 2019
Cash Flows from Operating Activities:
Net Income	$	2,492,000		$	976,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		86,000			89,000
(Gain) loss on sale of investments		—			(83,000	)
Impairments on investments		27,000			34,000
Unrealized (gain) loss on equity securities		(2,114,000	)		(145,000	)
Reserve for bad debts		(5,000	)		(2,000	)
Reserve for obsolete inventory		1,000			8,000
Deferred income taxes		599,000			28,000
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable		49,000			163,000
Inventories		(405,000	)		(288,000	)
Prepaid expenses		94,000			79,000
Employee receivables		(1,000	)		2,000
Increase (decrease) in:
Accounts payable		117,000			55,000
Accrued expenses		(61,000	)		(66,000	)
Income tax payable		346,000			289,000
Net cash from operating activities		1,225,000			1,139,000

Cash Flows From Investing Activities:
(Purchase) of property and equipment		(95,000	)		(169,000	)
Proceeds from sale of marketable securities		14,000			9,000
(Purchase) of marketable securities		(111,000	)		(132,000	)
Net cash from investing activities		(192,000	)		(292,000	)

Cash Flows From Financing Activities:
(Purchase) of treasury stock		—			(53,000	)
Net cash from financing activities		—			(53,000	)

Net Change in Cash and Cash Equivalents	$	1,033,000		$	794,000

Cash and Cash Equivalents, beginning of period	$	6,458,000		$	4,873,000
Cash and Cash Equivalents, end of period	$	7,491,000		$	5,667,000

Supplemental Disclosure for Cash Flow Information:
Cash payments for:
Income taxes paid	$	0		$	0
Interest paid	$	0		$	0

See accompanying notes to the condensed financial statements

GEORGE RISK INDUSTRIES, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

~~JANUARY~~JULY 31, ~~2018~~2020

~~Note 1:Unaudited Interim Financial Statements~~

Note 1:

Unaudited Interim Financial Statements

The accompanying financial statements have been prepared in accordance with the instructions for Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. 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, ~~2017~~2020 annual report on Form 10-K. In the opinion of management, all adjustments, consisting only of normal recurring adjustments considered necessary for a fair presentation, have been included. Operating results for any quarter are not necessarily indicative of the results for any other quarter or for the full year.

Accounting Estimates—The preparation of these 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.

Recently Issued Accounting Pronouncements —In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers. The objective of this update is to provide a robust framework for addressing revenue recognition issues and, upon its effective date, replaces almost all existing revenue recognition guidance. This update is effective in annual reporting periods beginning after December 15, 2017 and the interim periods within that year. The Company is evaluating the impact of this update on the Company’s financial statements.

~~In February of~~June 2016, the FASB issued ASU ~~2016-02~~No. 2016-13, “~~Leases~~Financial Instruments – Credit Losses ~~. Under~~(Topic 326): Measurement of Credit Losses on Financial Instruments”, which requires entities to use a forward looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. The FASB has subsequently issued updates to the ~~new guidance, lessees will be required~~standard to ~~recognize so-called right-of-use assets and liabilities for most leases having lease terms of 12 months or more. This update~~provide additional clarification on specific topics. Topic 326 is effective ~~in annual reporting~~for fiscal years, and interim periods within those fiscal years, beginning after December ~~31, 2019 and the interim periods starting thereafter.~~15, 2019. We have applied this guidance, as of May 1, 2020, using a modified-retrospective approach. The ~~Company is evaluating the impact~~application of this ~~update~~guidance did not require a cumulative effect adjustment to retained earnings and did not have a material effect on ~~the Company’s~~our financial statements.

In ~~February of~~August 2018, the FASB issued ASU ~~2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. Under this update, companies have~~2018-13, Fair Value Measurement - Disclosure Framework (Topic 820). The updated guidance improves the option to reclassify stranded tax effects caused by US Tax Cuts and Jobs Act (TCJA) from accumulated other comprehensive income (AOCI) to retained earnings. Under current US GAAP, effects from a change in tax law is recorded as a component of the income tax provision related to continuing operations in the period of enactment, even if the deferred taxes were established for a financial statement component not part of continuing operations, such as accumulated other comprehensive income (AOCI). Adopting of this standard will remove tax effects stranded in AOCI by the tax law enactment. Adoption of this ASU is optional. This updatedisclosure requirements on fair value measurements. The updated guidance is effective ~~in annual reporting~~for fiscal years, and interim periods within those fiscal years, beginning after December 15, ~~2018~~2019. Early adoption is permitted for any removed or modified disclosures. We applied this guidance, as of May 1, 2020. The application of this guidance did not have a material effect on our disclosures.

In January 2020, the FASB issued ASU 2020-01, “Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815.” The ASU is based on a consensus of the Emerging Issues Task Force and is expected to increase comparability in accounting for these transactions. ASU 2016-01 made targeted improvements to accounting for financial instruments, including providing an entity the ability to measure certain equity securities without a readily determinable fair value at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Among other topics, the amendments clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting. For public business entities, the amendments in the ASU are effective for fiscal years beginning after December 15, 2020, and interim periods ~~starting thereafter.~~within those fiscal years. Early adoption is permitted. The Company ~~is evaluating~~does not expect the adoption of ASU 2020-01 to have a material impact ~~of this update~~ on ~~the Company’s~~its financial statements.

~~Note 2:Investments~~

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

Note 2:

Investments

The Company has investments in publicly traded equity securities, ~~corporate bonds,~~ state and municipal debt securities, real estate investment trusts, and money ~~markets funds.~~markets. The ~~investments in securities are classified as available-for-sale securities and are reported at fair value. Available-for-sale~~ investments in debt securities, which include municipal bonds and bond funds, mature between ~~June 2018~~March 2021 and ~~November 2048.~~January 2044. The Company uses the average cost method to determine the cost of equity securities sold ~~and~~with any unrealized gains or losses reported in the ~~amount reclassified out of accumulated other comprehensive income into~~respective period’s earnings. Unrealized gains and losses on debt securities are excluded from earnings and reported separately as a component of ~~stockholders’~~stockholder’s equity. Dividend and interest income are reported as earned.

As of ~~January~~July 31, ~~2018~~2020 and April 30, ~~2017,~~2020, investments consisted of the following:

			Gross		Gross							Gross		Gross
Investments at	Cost		Unrealized		Unrealized			Fair		Cost		Unrealized		Unrealized			Fair
January 31, 2018	Basis		Gains		Losses			Value
July 31, 2020										Basis		Gains		Losses			Value
Municipal bonds	$	5,966,000	$	103,000	$	(238,000	)	$	5,831,000	$	5,284,000	$	180,000	$	(38,000	)	$	5,426,000
Corporate bonds	$	129,000	$	2,000	$	—		$	131,000
REITs	$	110,000	$	5,000	$	(6,000	)	$	109,000		112,000		—		(36,000	)		76,000
Equity securities	$	15,720,000	$	4,844,000	$	(203,000	)	$	20,361,000		17,101,000		5,000,000		(628,000	)		21,473,000
Money markets and CDs	$	1,064,000	$	—	$	—		$	1,064,000		682,000		—		—			682,000
Total	$	22,989,000	$	4,954,000	$	(447,000	)	$	27,496,000	$	23,179,000	$	5,180,000	$	(702,000	)	$	27,657,000

			Gross		Gross							Gross		Gross
Investments at	Cost		Unrealized		Unrealized			Fair		Cost		Unrealized		Unrealized			Fair
April 30, 2017	Basis		Gains		Losses			Value
April 30, 2020										Basis		Gains		Losses			Value
Municipal bonds	$	6,045,000	$	90,000	$	(97,000	)	$	6,038,000	$	5,271,000	$	80,000	$	(89,000	)	$	5,262,000
Corporate bonds	$	129,000	$	1,000	$	—		$	130,000		26,000		—		—			26,000
REITs	$	64,000	$	13,000	$	(1,000	)	$	76,000		112,000		—		(44,000	)		68,000
Equity securities	$	15,259,000	$	2,441,000	$	(319,000	)	$	17,381,000		17,119,000		3,446,000		(1,180,000	)		19,385,000
Money markets and CDs	$	2,757,000	$	—	$	—		$	2,757,000		581,000		—		—			581,000
Total	$	24,254,000	$	2,545,000	$	(417,000	)	$	26,382,000	$	23,109,000	$	3,526,000	$	(1,313,000	)	$	25,322,000

Marketable securities that are classified as equity securities are carried at fair value on the balance sheets with changes in fair value recorded as an unrealized gain or (loss) in the statements of income in the period of the change. Upon the disposition of a marketable security, the Company records a realized gain or (loss) on the Company’s statements of income.

The Company evaluates all marketable securities for other-than temporary declines in fair value, which are defined as when the cost basis exceeds the fair value for approximately one year. The Company also evaluates the nature of the investment, cause of impairment and number of investments that are in an unrealized position. When an “other-than-temporary” decline is identified, the Company will decrease the cost of the marketable security to the new fair value and recognize a real loss. The investments are periodically evaluated to determine if impairment changes are required. As a result of this standard, management ~~did not record~~recorded an impairment loss ~~during the quarter, but did record a loss~~ of ~~$23,000 for the nine months ended January 31, 2018. Likewise, for the corresponding periods last year, management did not record a loss~~$27,000 for the quarter ~~but did record a $13,000~~ended July 31, 2020. For the prior quarter ended July 31, 2019, an impairment loss of $34,000 was recorded.

The Company’s investments are actively traded in the stock and bond markets. Therefore, either a realized gain or loss is recorded when a sale happens. For the quarter ended July 31, 2020 the Company had sales of equity securities which yielded gross realized gains of $102,000 and gross realized losses of $126,000. For the same period, sales of debt securities did not yield any gross realized gains, but gross realized losses of $4,000 were recorded. During the quarter ending July 31, 2019, the Company recorded gross realized gains and losses on equity securities of $153,000 and $104,000, respectively, as well as gross realized gains and losses on debt securities of $3,000 and $3,000, respectively. The gross realized loss numbers include the impaired figures listed in the previous paragraph. Proceeds from sales of securities available for sale were $14,000 for the ~~nine months~~quarter ended ~~January~~July 31, ~~2017.~~2020 and were $9,000 for the same quarter the prior year.

The following ~~tables show~~table shows the investments with unrealized losses that are not deemed to be “other-than-temporarily impaired”, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at ~~January~~July 31, ~~2018~~2020 and April 30, ~~2017,~~2020, respectively.

Unrealized Loss Breakdown by Investment Type at ~~January~~July 31, ~~2018~~2020

	Less than 12 months					12 months or greater					Total					Less than 12 months					12 months or greater					Total
Description	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Municipal bonds	$	702,000	$	(152,000	)	$	1,674,000	$	(86,000	)	$	2,376,000	$	(238,000	)	$	62,000	$	—		$	342,000	$	(38,000	)	$	404,000	$	(38,000	)
REITs	$	56,000	$	(5,000	)	$	27,000	$	(1,000	)	$	83,000	$	(6,000	)		48,000		(26,000	)		28,000		(10,000	)		76,000		(36,000	)
Equity securities	$	534,000	$	(35,000	)	$	590,000	$	(168,000	)	$	1,124,000	$	(203,000	)		4,148,000		(478,000	)		1,348,000		(150,000	)		5,496,000		(628,000	)
Total	$	1,292,000	$	(192,000	)	$	2,291,000	$	(255,000	)	$	3,583,000	$	(447,000	)	$	4,258,000	$	(504,000	)	$	1,718,000	$	(198,000	)	$	5,976,000	$	(702,000	)

Unrealized Loss Breakdown by Investment Type at April 30, ~~2017~~2020

	Less than 12 months					12 months or greater					Total					Less than 12 months					12 months or greater					Total
Description	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Municipal bonds	$	1,420,000	$	(19,000	)	$	1,292,000	$	(78,000	)	$	2,712,000	$	(97,000	)	$	2,203,000	$	(42,000	)	$	484,000	$	(47,000	)	$	2,687,000	$	(89,000	)
REITs	$	—	$	—		$	27,000	$	(1,000	)	$	27,000	$	(1,000	)		43,000		(30,000	)		24,000		(14,000	)		67,000		(44,000	)
Equity securities	$	983,000	$	(92,000	)	$	1,689,000	$	(227,000	)	$	2,672,000	$	(319,000	)		5,496,000		(866,000	)		1,651,000		(314,000	)		7,147,000		(1,180,000	)
Total	$	2,403,000	$	(111,000	)	$	3,008,000	$	(306,000	)	$	5,411,000	$	(417,000	)	$	7,742,000	$	(938,000	)	$	2,159,000	$	(375,000	)	$	9,901,000	$	(1,313,000	)

Municipal Bonds

The unrealized losses on the Company’s investments in municipal bonds were caused by interest rate increases. The contractual terms of these investments do not permit the issuer to settle the securities at a price less than the amortized cost of the investment. Because the Company has the ability to hold these investments until a recovery of fair value, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at ~~January~~July 31, ~~2018.~~2020.

Marketable Equity Securities and REITs

The Company’s investments in marketable equity securities and REITs consist of a wide variety of companies. Investments in these companies include growth, growth income, and foreign investment objectives. The individual holdings have been evaluated, and due to management’s plan to hold on to these investments for an extended period, the Company does not consider these investments to be other-than-temporarily impaired at ~~January~~July 31, ~~2018~~2020.

~~Note 3:Inventories~~

Note 3:

Inventories

Inventories at ~~January~~July 31, ~~2018~~2020 and April 30, ~~2017~~2020 consisted of the following:

	January 31,			April 30,			July 31,			April 30,
	2018			2017			2020			2020

Raw materials	$	2,704,000		$	1,579,000		$	4,657,000		$	4,233,000
Work in process		348,000			442,000			421,000			402,000
Finished goods		615,000			356,000			568,000			606,000
		3,667,000			2,377,000			5,646,000			5,241,000
Less: allowance for obsolete inventory		(73,000	)		(73,000	)		(139,000	)		(138,000	)
Totals	$	3,594,000		$	2,304,000
Inventories, net							$	5,507,000		$	5,103,000

~~Note 4:Asset Purchase~~

In October 2017, George Risk Industries, Inc. (the “Company”) purchased assets from Labor Saving Devices, Inc. (“LSDI”). The purchase price for the assets consisted of $3,000,000 in cash and 24,097 shares of the Company’s Class A common stock (valued at $200,000, or approximately $8.30 per share). An initial payment of $1,000,000 in cash was made at closing, with the remaining $2,000,000 in cash paid in November 2017.

~~The value of the assets purchased as described above at January 31, 2018 consisted of the following:~~

Type of Assets Beginning Balance Amortization Total Assets, Net
Inventory $ 1,366,000 — $ 1,366,000
Fixed Assets $ 10,000 — $ 10,000
Non-compete agreement $ 10,000 — $ 10,000
Intangible assets $ 1,814,000 $ (30,000 ) $ 1,784,000
Total $ 3,200,000 $ (30,000 ) $ 3,170,000

~~Since the asset purchase took place in October 2017, there was no value to these assets at April 30, 2017.~~

~~Note 5:Business Segments~~

Note 4:

Business Segments

The following is financial information relating to industry segments:

	July 31,
	2020		2019
Net revenue:
Security alarm products	$	3,114,000	$	2,830,000
Cable & wiring tools		800,000		536,000
Other products		133,000		186,000
Total net revenue	$	4,047,000	$	3,552,000

Income from operations:
Security alarm products	$	912,000	$	725,000
Cable & wiring tools		235,000		137,000
Other products		39,000		48,000
Total income from operations	$	1,186,000	$	910,000

Depreciation and amortization:
Security alarm products	$	22,000	$	23,000
Cable & wiring tools		31,000		31,000
Other products		12,000		20,000
Corporate general		21,000		15,000
Total depreciation and amortization	$	86,000	$	89,000

Capital expenditures:
Security alarm products	$	93,000	$	169,000
Cable & wiring tools		—		—
Other products		2,000		—
Corporate general		—		—
Total capital expenditures	$	95,000	$	169,000

	Three months		Nine months		Three months		Nine months		July 31, 2020		April 30, 2020
	ended		ended		ended		ended
	Jan 31, 2018		Jan 31, 2018		Jan 31, 2017		Jan 31, 2017
Net revenue:
Identifiable assets:
Security alarm products	$	2,715,000	$	6,683,000	$	2,214,000	$	6,955,000	$	7,391,000	$	7,150,000
Other products		545,000		1,914,000		431,000		1,239,000
Total net revenue	$	3,260,000	$	8,597,000	$	2,645,000	$	8,194,000

Income from operations:
Security alarm products		452,000		1,534,000		603,000		1,805,000
Other products		130,000		439,000		107,000		321,000
Total income from operations	$	582,000	$	1,973,000	$	710,000	$	2,126,000

Depreciation and amortization:
Security alarm products		10,000		28,000		7,000		29,000
Cable & wiring tools										3,152,000		2,684,000
Other products		52,000		94,000		27,000		80,000		440,000		724,000
Corporate general		15,000		41,000		13,000		29,000		36,366,000		33,204,000
Total depreciation and amortization	$	77,000	$	163,000	$	47,000	$	138,000

Capital expenditures:
Security alarm products		—		260,000		—		—
Other products		—		—		16,000		130,000
Corporate general		16,000		81,000		10,000		16,000
Total capital expenditures	$	16,000	$	341,000	$	26,000	$	146,000
Total assets									$	47,349,000	$	43,762,000

January 31, 2018 April 30, 2017
Identifiable assets:
Security alarm products 4,424,000 3,180,000
Other products 2,371,000 1,517,000
Corporate general 34,773,000 33,767,000
Total assets $ 41,568,000 $ 38,464,000

~~Note 6:Earnings per Share~~

Note 5:

Earnings per Share

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

For the three months ended January 31, 2018
Income Shares Per-share
(Numerator) (Denominator) Amount
Net Income $ 791,000

Basic EPS $ 791,000 4,969,013 $ 0.1592
Effect of dilutive securities:
Convertible preferred stock 0 20,500
Diluted EPS $ 791,000 4,989,513 $ 0.1585

	For the three months ended July 31, 2020
	Income		Shares		Per-Share
	(Numerator)		(Denominator)		Amount
Net income	$	2,492,000
Basic EPS	$	2,492,000		4,949,927	$	.50
Effect of dilutive Convertible Preferred Stock		–		20,500		—
Diluted EPS	$	2,492,000		4,970,427	$	.50

For the nine months ended January 31, 2018
Income Shares Per-share
(Numerator) (Denominator) Amount
Net Income $ 2,032,000

Basic EPS $ 2,032,000 4,955,725 $ 0.4100
Effect of dilutive securities:
Convertible preferred stock 0 20,500
Diluted EPS $ 2,032,000 4,976,225 $ 0.4083

	For the three months ended July 31, 2019
	Income		Shares		Per-Share
	(Numerator)		(Denominator)		Amount
Net income	$	976,000
Basic EPS	$	976,000		4,956,389	$	.20
Effect of dilutive Convertible Preferred Stock		–		20,500		—
Diluted EPS	$	976,000		4,976,889	$	.20

For the three months ended January 31, 2017
Income Shares Per-share
(Numerator) (Denominator) Amount
Net Income $ 792,000

Basic EPS $ 792,000 4,945,972 $ 0.1601
Effect of dilutive securities:
Convertible preferred stock 0 20,500
Diluted EPS $ 792,000 4,966,472 $ 0.1595
For the nine months ended January 31, 2017
Income Shares Per-share
(Numerator) (Denominator) Amount
Net Income $ 2,051,000
Basic EPS $ 2,051,000 4,996,453 $ 0.4105
Effect of dilutive securities:
Convertible preferred stock 0 20,500
Diluted EPS $ 2,051,000 5,016,953 $ 0.4088

~~Note 7:Retirement Benefit Plan~~

Note 6:

Retirement Benefit Plan

On January 1, 1998, the Company adopted the George Risk Industries, Inc. Retirement Savings Plan (the “Plan”). The Plan is a defined contribution savings plan designed to provide retirement income to eligible employees of the ~~corporation.~~Company. The Plan is intended to be qualified under Section 401(k) of the Internal Revenue Code of 1986, as amended. It is funded by voluntary pre-tax and Roth (taxable) contributions from eligible employees who may contribute a percentage of their eligible compensation, limited and subject to statutory limits. Employees are eligible to participate in the Plan when they have attained the age of 21 and completed one thousand hours of service in any plan year with the Company. Upon leaving the Company, each participant is 100% vested with respect to the participants’ contributions while the Company’s matching contributions are vested over a six-year period in accordance with the Plan document. Contributions are invested, as directed by the participant, in investment funds available under the Plan. Matching contributions ~~by the Company~~ of approximately $13,000 and $2,000 were paid ~~during both~~in each of the quarters ending ~~January~~July 31, ~~2018~~2020 and ~~2017,~~2019 respectively. ~~Likewise, the Company paid matching contributions of approximately $8,000 during the nine-month period ending January 31, 2018 and $7,000 during the corresponding period the prior fiscal year.~~

Note 7:

Fair Value Measurements

~~Note 8: Fair Value Measurements~~

~~Generally accepted accounting principles in~~The carrying value of the ~~United States of America (US GAAP) defines~~Company’s cash and cash equivalents, accounts receivable and accounts payable approximate their fair value asdue to their short term nature. The fair value of our investments is determined utilizing market based information. Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions, and credit risk.

US GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements). The levels of the fair value hierarchy under US GAAP are described below:

	Level 1	Valuation is based upon quoted prices for identical instruments traded in active markets.

	Level 2	Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

	Level 3	Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect our own estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.

Investments and Marketable Securities

As of ~~January~~July 31, ~~2018,~~2020, our investments consisted of money markets, publicly traded equity securities, real estate investment trusts ~~(REITS)~~(REITs) as well as certain state and municipal debt ~~securities and corporate bonds. Our~~securities. The marketable securities are valued using third-party broker statements. The value of the ~~investments~~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.

Fair Value Hierarchy

The following ~~tables set~~table sets forth our assets and liabilities measured at fair value on a recurring basis and a non-recurring basis by level within the fair value hierarchy. As required by US GAAP, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Assets Measured at Fair Value on a Recurring Basis as of
January 31, 2018

Level 1 Level 2 Level 3 Total
Assets:
Municipal Bonds $ - $ 5,831,000 $ - $ 5,831,000
Corporate Bonds $ 131,000 $ - $ - $ 131,000
REITs $ - $ 109,000 $ - $ 109,000
Equity Securities $ 20,361,000 $ - $ - $ 20,361,000
Money Markets and CDs $ 1,064,000 $ - $ - $ 1,064,000
Total fair value of assets measured on a recurring basis $ 21,556,000 $ 5,940,000 $ - $ 27,496,000

Assets Measured at Fair Value on a Recurring Basis as of
April 30, 2017

Level 1 Level 2 Level 3 Total
Assets:
Municipal Bonds $ — $ 6,038,000 $ — $ 6,038,000
Corporate Bonds $ 130,000 $ — $ — $ 130,000
REITs $ — $ 76,000 $ — $ 76,000
Equity Securities $ 17,381,000 $ — $ — $ 17,381,000
Money Markets and CDs $ 2,757,000 $ — $ — $ 2,757,000
Total fair value of assets measured on a recurring basis $ 20,268,000 $ 6,114,000 $ — $ 26,382,000

	Assets Measured at Fair Value on a Recurring Basis as of July 31, 2020
	Level 1		Level 2		Level 3		Total
Assets:
Municipal Bonds	$	—	$	5,426,000	$	—	$	5,426,000
REITs		—		76,000		—		76,000
Equity Securities		21,473,000		—		—		21,473,000
Money Markets and CDs		682,000		—		—		682,000
Total fair value of assets measured on a recurring basis	$	22,155,000	$	5,502,000	$	—	$	27,657,000

	Assets Measured at Fair Value on a Recurring Basis as of April 30, 2020
	Level 1		Level 2		Level 3		Total
Assets:
Municipal Bonds	$	—	$	5,262,000	$	—	$	5,262,000
Corporate Bonds		26,000		—		—		26,000
REITs		—		68,000		—		68,000
Equity Securities		19,385,000		—		—		19,385,000
Money Markets and CDs		581,000		—		—		581,000
Total fair value of assets measured on a recurring basis	$	19,992,000	$	5,330,000	$	—	$	25,322,000

Note 8

Notes Payable

On April 15, 2020, the Company received loan proceeds of approximately $950,000 (the “PPP Loan”) from FirsTier Bank, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The PPP Loan, which was in the form of a Note dated April 15, 2020 issued to the Company, matures on April 15, 2022 and bears interest at a rate of 1% per annum, payable monthly commencing on November 15, 2020. The Note may be prepaid by the Company at any time prior to maturity with no prepayment penalties. Funds from the PPP Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on certain other debt obligations. The Company intends to use the entire PPP Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the PPP Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act.

~~Note 9: Subsequent Events~~

Note 9

Subsequent Events

None

GEORGE RISK INDUSTRIES, INC.

PART I. FINANCIAL INFORMATION

~~Item 2.~~
Item 2: Management Discussion and Analysis of Financial Condition and Results of Operations

MANAGEMENT DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q, includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act) and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), which are subject to the “safe harbor” created by those sections. Any statements herein that are not statements of historical fact may be deemed to be forward-looking statements. For example, words such as “may,” “will,” “could,” “would,” “should,” “anticipate,” “expect,” “intend,” “believe,” “estimate,” “project” or “continue,” and the negatives of such terms are intended to identify forward-looking statements. The information included herein represents our estimates and assumptions as of the date of this filing. Unless required by law, we undertake no obligation to update publicly any forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if ~~new~~current information becomes available in the future.

The following discussion should be read in conjunction with the attached condensed ~~consolidated~~ financial statements, and with the Company’s audited financial statements and discussion for the fiscal year ended April 30, ~~2017.~~2020.

Executive Summary

The Company’s performance ~~has remained steady through~~improved during the ~~three quarters, with increased sales, being offset by increased cost of sales, and greatly improved investment returns. This is due~~quarter ended July 31, 2020 as compared to the ~~continuation~~quarter ended July 31, 2019. The main reason for the increase is the closure of ~~our quality USA made products with~~a competitor at the ~~ability for customization, our notable customer service, and the purchase~~end of calendar year 2019, resulting in a major uptick in sales. As a result of the ~~assets of Labor Saving Devices, Inc. New challenges~~increased demand, the Company is experiencing a sizable back order log; however, management has ~~endured over~~been able to increase inventory. Management now intends to focus on ramping up production to meet customer’s needs in a timely manner. Opportunities include continuing to learn and grow with our computer system and to continue looking at businesses that might be a good fit to purchase. We also have new products that are scheduled to enter the ~~nine~~marketplace by the end of the calendar year. Challenges in the coming months ~~of this fiscal year~~ include ~~the continuation of training of our new software system, learning and incorporating the Labor Saving Devices~~continuing to get product ~~line,~~out to customers in a timely manner and dealing with ~~some shortages~~COVID-19 pandemic restrictions. Raw material prices are also a concern with tariffs being levied by the US government and ~~defects of raw materials.~~other factors. Management continues to work at keeping the facilities running leaner and more profitable than ever before.

Results of Operations

	●	Net sales ~~were $3,260,000~~ for the quarter ended ~~January~~July 31, ~~2018, which is~~2020 showed a ~~23.25%~~13.94% increase ~~from the corresponding quarter last year. Year-to-date net sales were $8,597,000 at January 31, 2018, which is a 4.92% increase from~~over the same period ~~last~~in the prior year. ~~A significant part of growth in~~The Company saw increased sales resulting primarily from a competitor no longer selling competing products. Management also believes that they have been successful at training employees on the new computer system and production is a direct result of the asset purchase of Labor Saving Devices and having a new product line to sell as a result of the purchase. Also, our ongoing commitment to outstanding customer service and customization of products are a few of the many reasons sales remained steady over the years.running smoothly.

	●	Cost of goods sold ~~was 56.0%~~decreased from 49.80% of ~~net~~ sales ~~for~~in the ~~quarter ended January 31, 2018 and was 46.4% for the same quarter last year. Year-to-date cost of goods sold percentages were 50.4% for~~prior year, to 48.23% in the current ~~nine months and 47.6% for the corresponding nine months last year,~~quarter, which is ~~just slightly over~~inside of Management’s goal to keep labor and other manufacturing expenses within the ~~target~~range of ~~less than~~45 to 50% for both the quarter and year-to-date results. There were some added expenses that were incurred with the purchase of Labor Saving Devices that happened during this quarter but they were “one time” expenses management expects the. The decreased cost of goods sold percentage ~~to fall to return to normal~~is a reflection of training initiatives resulting in ~~the future.~~more efficient production.

●

Operating expenses increased by ~~$146,000~~$36,000 when comparing the current year quarter to the same quarter for the prior year; however, the percentage of net sales decreased to 22.46% for the quarter ~~and also increased by $118,000~~ended July 31, 2020 compared to 24.58% for the ~~nine-months ended January 31, 2018 as compared~~corresponding quarter last year. The dollar amount increase is the result of increased personnel and commission expense related to the ~~corresponding periods last year. These increased costs are primarily due~~increase in net sales; however, the Company maintained the ratio of operating expenses to ~~increased new product development, increased commissions, and additional training and maintenance fees on our new computer software~~net sales at less than 30%, which is in line with historical ratios.


	●	Income from operations for the quarter ended ~~January~~July 31, ~~2018~~2019 was at ~~$582,000~~$1,186,000, which is ~~an 18.02% decrease~~a 30.33% increase from the corresponding quarter last year, which had income from operations of $710,000. Income from operations for the nine months ended January 31, 2018 was at $1,973,000, which is a 7.20% decrease from the corresponding nine months last year, which had income from operations of $2,126,000.$910,000.

	●	Other income and expenses ~~are up when comparing~~showed a $2,254,000 gain for the quarter ended July 31, 2020 as compared to a $388,000 gain for the quarter ended July 31, 2019. For the three months ended July 31, 2020, $2,114,000 of unrealized gains from equity securities were recorded, compared to the ~~current quarter and nine-month periods the prior year, with an increase~~$145,000 of ~~$115,000 in the current quarter and an increase of $115,000~~unrealized gains from equity securities recorded for the ~~current year-to-date.~~three months ended July 31, 2019. The ~~majority of activity in these accounts consists of investment interest, dividends, and gain or loss on sale of investments. With the continued growth in the performance~~remainder of the ~~stock market, decisions were made~~increase is primarily due to ~~sell holdings and take the realized gain and dividends~~dividend and interest ~~payments exceeded expectations and many of our holdings had additional and increased dividend payouts.~~income.

	●	~~Overall,~~The Company’s provision for income taxes showed an increase of $626,000 from $322,000 in the quarter ended July 31, 2019 to $948,000 for the quarter ended July 31, 2020. This increase is primarily due to increased deferred taxes resulting from a much larger unrealized gain for the current quarter.

	●	In turn, net income for the quarter ended ~~January~~July 31, ~~2018~~2020 was ~~down $1,000, or 0.13%,~~$2,492,000, a 155.33% increase from the ~~same~~corresponding quarter last ~~year. Similarly,~~year, which showed net income ~~for the nine-month period ended January 31, 2018 was down $19,000, or 0.93%, from the same period in the prior year.~~of $976,000.

	●	Earnings per share for the quarter ended July 31, 2020 were $0.50 per common share and $0.20 per common share for the quarter ended ~~January~~July 31, ~~2018 were $0.16 per share and $0.41 per share for the year-to-date numbers. EPS for the quarter and nine months ended January 31, 2017 were also $0.16 per share and $0.41 per share, respectively.~~2019.

Liquidity and capital resources

~~Operating~~

		Operating

	●	Net cash ~~decreased $2,504,000~~increased $1,033,000 during the ~~nine months~~quarter ended ~~January~~July 31, ~~2018~~2020 as compared to an increase of ~~$80,000~~$794,000 during the corresponding ~~period~~quarter last year. ~~This is primarily due to the asset purchase of Labor Saving Devices, Inc., which was done without outside financing.~~

	●	Accounts receivable ~~increased $636,000~~decreased $49,000 for the ~~nine months ended January~~quarter ending July 31, ~~2018~~2020 compared with a $163,000 decrease for the same ~~period~~quarter last year. The ~~current year increase~~smaller decrease in accounts receivable is ~~a result~~directly attributable to some of ~~improved sales and collections~~the Company’s customers not paying as timely as before. Management believes this is because of the COVID-19 pandemic. Management still has the ability to collect on accounts ~~receivable taking~~and to keep past due accounts to a ~~bit longer than normal. Management believes~~minimum. An analysis of accounts shows that ~~approximately $16,000 of accounts~~there were only 0.63% that were over 90 days ~~have a possibility of being uncollectible.~~at July 31, 2020.

	●	Inventories increased ~~$1,291,000~~$405,000 during the current ~~nine-month period~~quarter as compared to ~~an decrease of $426,000~~a $288,000 increase last ~~year,~~year. The larger increase is primarily due to the fact that the Company is stocking up on more raw materials due to increased orders. In addition, the Company is keeping more inventory ~~purchased from Labor Saving Devices.~~on hand in order to reduce the likelihood of running into a shortage on some major raw materials, such as we experienced last year.

	●	~~Prepaid~~For the quarter ended July 31, 2020 there was a $94,000 decrease in prepaid expenses ~~saw~~compared to a ~~$359,000 increase~~decrease of $79,000 for the quarter ended July 31, 2019. The current ~~nine months, primarily~~decrease is due to ~~the~~less prepayment of ~~inventory the Company purchases. Likewise, the prior nine months showed a $48,000 increase in~~raw materials and running through some of our prepaid ~~expenses.~~

	●	Income tax overpayment for the nine months ended January 31, 2018 increased $221,000, as the overpayment also showed an increase of $43,000 for the same period the prior year. The main reason for the current increase is that the Company expectsagreements without needing to ~~generate additional income with the asset acquisition that happened earlier this fiscal year.~~renew them.

	●	Accounts payable shows an increase of $117,000 for the quarter ended July 31, 2020 compared to an increase of $55,000 for the same quarter the year before, primarily due to increases ~~for both nine-month periods at $239,000~~in inventory of raw materials and ~~$20,000, respectively. The company~~timing issues. Management strives to pay all ~~invoices~~payables within terms, ~~and~~unless there is a problem with the ~~variance in increases is primarily due to the timing of receipt of products and payment of invoices.~~merchandise.

	●	Accrued expenses decreased ~~$127,000~~$61,000 for the current ~~nine-month period~~quarter as compared to a ~~$72,000~~$66,000 decrease for the ~~nine-month period~~quarter ended ~~January~~July 31, ~~2017.~~

~~Investing~~

	●	~~As for our investment activities,~~2019. The difference in the Company spent approximately $342,000 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 $146,000.amounts is primarily due to timing issues.

	●	AsIncome tax payable for the quarter ended July 31, 2020 increased $346,000, compared to a ~~result~~$289,000 increase for the quarter ended July 31, 2019. The current increase is due to larger tax estimates in relation to increased income.

		Investing

	●	The Company purchased $95,000 of ~~the asset acquisition of Labor Saving Devices, Inc. (“LSDI”), a net amount of $1,624,000 of intangible assets were bought, along with inventory~~property and ~~fixed assets. Since the acquisition took place in~~equipment during the current ~~year, there~~fiscal quarter. In comparison, $169,000 was ~~no cash towards this item for~~spent on purchases of property and equipment during the ~~same reporting period~~corresponding quarter last year.

	●	~~Additionally, the~~The Company continues to purchase marketable securities, which include municipal bonds and quality stocks. ~~During the nine-month period ended January 31, 2018 there was quite a bit of buy/sell activity in the investment accounts. Net cash~~Cash spent on purchases of marketable securities for the ~~nine-month period~~quarter ended ~~January~~July 31, ~~2018~~2020 was ~~$653,000~~$111,000 compared to ~~$668,000~~$132,000 spent induring the ~~prior nine-month period.~~quarter ended July 31, 2019. We continue to use “money manager” accounts for most stock transactions. By doing this, the Company gives an independent ~~third-party~~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.

~~Financing~~


		Financing

	●	The Company continues to purchase back common stock when the opportunity arises. For the ~~nine-month period~~quarter ended ~~January~~July 31, ~~2018,~~2020, the Company did not buyback any treasury stock, compared to the $53,000 of common stock purchased ~~$3,000 worth of treasury stock. This is in comparison to $551,000 spent in~~during the same ~~nine months~~ period the prior year.

	●	The company paid out dividends of $1,617,000 during the nine months ending January 31, 2018. These dividends were paid during the second quarter. The company declared a dividend of $0.36 per share of common stock on September 30, 2017 and these dividends were paid by October 31, 2017. As for the prior year numbers, dividend paid was $1,596,000 for the nine months ending January 31, 2017. A dividend of $0.35 per common share was declared and paid during the second fiscal quarter last year.

~~The~~

In conjunction with the Company’s Condensed Financial Statements, we have provided the following ~~is a~~ list of ratios to help analyze George Risk Industries’ performance:

	Qtr ended		Qtr ended
	July 31, 2020		July 31, 2019
Working capital (current assets – current liabilities)	$	40,103,000	$	38,750,000
Current ratio (current assets / current liabilities)		11.485		17.882
Quick ratio ((cash + current investments + AR) / current liabilities)		9.953		15.622

For the quarter ended
January 31, 2018 January 31, 2017
Working capital
(current assets – current liabilities)
$ 36,407,000 $ 34,041,000
Current ratio
(current assets / current liabilities)
18.596 17.171
Quick ratio
((cash + investments + AR) / current liabilities)
16.394 15.773

New Product Development

The Company and ~~its~~its’ engineering department ~~continue~~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:

	●	A new face plate for our pool alarms is nearing completion. The innovative design is slim in style and will also allow the homeowner to change the plate to match their décor.

	●	An updated version of the pool access alarm is currently going through ~~ETL~~electrical listing testing. Since the COVID-19 pandemic has happened, not much testing has progressed This next-generation model combines our battery operated DPA series with our hard wired 289 series. A variety of installation options will be available through jumper pin settings.

	●	The case for our CC15 is complete and has been submitted to U.L. for approval for the US and Canada. This will allow us to manufacture several different versions. One is a 15-amp version that would automatically turn on a whole room of lights. Another is a 220-volt version to be used in international markets.

	●	~~We continue to work on high security switches. We have a triple biased high security switch design nearly complete and an adjustable magnet design was completed for recessed mounting applications.~~

	●	We continue to research the possibilities of fuel level sensing and how that may also serve other agricultural based needs. Several companies from around the world have been looking for ways to secure fuel tanks and trucks. Our emphasis would be in ways to safely monitor fuel levels and report tampering.

	●	~~A new float water sensor is being developed that will monitor water levels in livestock tanks and sump pumps.~~

	●	Wireless technology is a main area of focus for product development. We are ~~considering~~looking into adding wireless technology to some of our current products. A wireless contact switch is in the final stages of development. Also, we are working on wireless versions of our Pool Alarm and environmental sensors that will be easy to install in current construction. We are also concentrating on making products compatible with Wi-Fi, smartphone technology and the increasing popular Z-Wave standard for wireless home automation.

	●	~~An updated version~~In the next months we are introducing a couple of new security products. First, the 2707 Series are triple high biased magnetic reed contacts for high security and are available in SPDT and DPDT models. These contacts are resistant to magnetic tamper and defeat. They are used in applications such as airports, biotechnology labs, manufacturing plants, banks, military bases and energy-generation facilities. Secondly, the 3040 Panic Switch contains screw terminals and uses an actuating lever which can be triggered with only the tip of the finger. It can be installed under a counter or desk or any similar place. The 3040CT uses 12’ extreme temperature rated wire for installation in refrigerators and freezers. Both models have a latching LED indicating when the switch is activated and automatically resets when the lever is closed and is fully re-armed. Latching LED and UL Listed versions are planned to follow.

	●	We have launched our new GR1840 Oval Metal Door Channel Magnet. This is a direct replacement for the obsolete Interlogix magnet. This magnet fits into the top channel of a metal door and does not require drilling into the door core. We have also paired this with several of our ~~200-36 & 4532 overhead~~¾” and 1” steel door ~~switch line up is nearing completion~~contacts.

	●	There have been several new products that have been introduced for our cable and wiring tools segment. First, a 12” adjustable hole cutter which compliments the popular 10” hole cutter. Using a standard drill, this tool allows you to drill various size holes in the ceiling for speakers and canned lights. The dust bin which buts against the ceiling keeps the ceiling material and dust enclosed making for a clean, time saving installation. Secondly, the lighted Bullnose tips come in a variety of colors; red, green and blue to go along with the standard clear lights. These colored lights are placed on FiberFuse wire running rods which allows easy location of the rod ends in dark places such as attics and crawlspaces. The rods can be color coded for wire paths running into different rooms. Larger batteries add to the longevity of these new aluminum cases presently on order. The modified versions, the 200-36UF and 4532UF, are being made as a universal fit switch. This will allow an installer to replace an existing switch without drilling new holes into the cement or adjusting the location. The modified case has an additional mounting hole along with reshaped mounting holes.lights.

Other Information

In addition to researching ~~and~~ developing new products, management is always open to the possibility of acquiring a business or product line that would complement our existing operations. Due to the Company’s strong cash position, management believes this could be achieved without the need for outside financing. The intent is to utilize the equipment, marketing techniques and established customers to deliver new products and increase sales and profits.

There 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.

Recently Issued Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers. The objective of this update is to provide a robust framework for addressing revenue recognition issues and, upon its effective date, replaces almost all existing revenue recognition guidance. This update is effective in annual reporting periods beginning after December 15, 2017 and the interim periods within that year. The Company is evaluating the impact of this update on the Company’s financial statements.

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

GEORGE RISK INDUSTRIES, INC.

PART I. FINANCIAL INFORMATION

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

~~Item 3. Quantitative and Qualitative Disclosures about Market Risk~~This disclosure does not apply.

~~Not applicable~~

~~Item 4. Controls and Procedures~~

Item 4.

Controls and Procedures

Our management, under the supervision and with the participation of our chief executive officer (also working as our chief financial officer), evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of ~~January~~July 31, ~~2018.~~2020. Based on that evaluation, ~~our chief executive officer (also working as our chief financial officer)~~management concluded that the disclosure controls and procedures employed at the Company were not effective to provide reasonable assurance that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

In our annual report filed on Report 10-K for the year ended April 30 ,2020, management identified the following material weakness in our internal control over financial reporting:

●

The small size of our Company limits our ability to achieve the desired level of separation of duties for proper internal controls and financial reporting, particularly as it relates to financial reporting to assure material disclosures or implementation of newly issued accounting standards are included. A secondary review over annual and quarterly filings does not occur. Due to the departure of the Controller, the current CEO and CFO roles are being fulfilled by the same individual. We do not have an audit committee. We do not believe we have met the full requirement for separation for financial reporting purposes.

We continue to operate with a limited number of accounting and financial personnel. For the quarter ending July 31, 2020 the Company did not have ~~taken measures to improve our disclosure controls and procedures. A new accounting professional~~a Controller, but this position was ~~hired~~filled in ~~October 2017 to fill the Controller position. Regarding this filing, more training~~September 2020. Training will be required to fulfill disclosure control and procedure responsibilities, including review procedures for key accounting schedules and timely and proper documentation of material transactions and agreements. Until sufficient training has taken place offor this new Controller, we believe this control deficiency represents material weaknesses in internal control over financial reporting. To mitigate the effects of the material weakness identified in our annual report, the Company contracted with an outside CPA to perform a secondary review of our quarterly report filed on Form 10-Q.

Despite the material weaknesses in financial reporting noted above, we believe that our ~~consolidated~~ financial statements included in this report fairly present our financial position, results of operations and cash flows as of and for the periods presented in all material respects.

We are committed to the establishment of effective internal controls over financial reporting and will place emphasis on quarterly and year-end closing procedures, timely documentation and internal review of accounting and financial reporting consequences of material contracts and agreements, and enhanced review of all schedules and account analyses by experienced accounting department personnel or independent consultants.

Changes in Internal Control Over Financial Reporting

~~There was~~Other than those mentioned above, there were no ~~change~~changes in our internal control over financial reporting during the fiscal quarter ended ~~January~~July 31, ~~2018~~2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

GEORGE RISK INDUSTRIES, INC.

~~Part~~PART II. OTHER INFORMATION

~~Item 1. Legal Proceedings~~

Item 1.

Legal Proceedings

Not applicable

~~Item 1A. Risk Factors~~

~~Not applicable.~~

~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds~~

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information relating to the Company’s repurchase of common stock for the ~~third~~first quarter of fiscal year ~~2018.~~2021.

Period		Number of shares repurchased
~~November~~May 1, ~~2017~~2020 – ~~November 30, 2017~~	May 31, 2020		-0-
~~December~~June 1, ~~2017~~2020 – ~~December 31, 2017~~	June 30, 2020		-0-
~~January~~July 1, ~~2018~~2020 – ~~January~~July 31, ~~2018~~2020			~~100~~	-0-

~~Item 3. Defaults upon Senior Securities~~

Item 3.

Defaults upon Senior Securities

Not applicable

~~Item 4. Mine Safety Disclosures~~

Item 4.

Mine Safety Disclosures

Not applicable

~~Item 5. Other Information~~

Item 5.

Other Information

Not applicable

~~Item 6. Exhibits~~

Item 6.

Exhibits

	Exhibit No.		Description

	~~10.1~~		~~Material Contract – Purchase Agreement~~

	31.1		Certification of the Chief Executive Officer (Principal Financial and Accounting Officer), as required by Section 302 of the Sarbanes-Oxley Act of 2002.

	32.1		Certification of the Chief Executive Officer (Principal Financial and Accounting Officer), as required by Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

~~Pursuant to~~In accordance with the requirements of the ~~Securities~~ Exchange Act, ~~of 1934,~~ the registrant ~~has duly~~ caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	George Risk Industries, Inc.
	(Registrant)

Date ~~March 16, 2018~~September 18, 2020	By:	/s/ Stephanie M. Risk-McElroy
		Stephanie M. Risk-McElroy
		President, Chief Executive Officer, Chief Financial Officer
		and Chairman of the Board

Type of Assets	Beginning Balance		Amortization			Total Assets, Net
Inventory	$	1,366,000		—		$	1,366,000
Fixed Assets	$	10,000		—		$	10,000
Non-compete agreement	$	10,000		—		$	10,000
Intangible assets	$	1,814,000	$	(30,000	)	$	1,784,000
Total	$	3,200,000	$	(30,000	)	$	3,170,000

	For the quarter ended
	January 31, 2018		January 31, 2017
Working capital (current assets – current liabilities)	$	36,407,000	$	34,041,000
Current ratio (current assets / current liabilities)		18.596		17.171
Quick ratio ((cash + investments + AR) / current liabilities)		16.394		15.773