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

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended January 31, 20182024

[  ]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 issuerregistrant as specified in its charter)

Colorado84-0524756
(State of incorporation)(IRS Employers Identification No.)

802 SouthS. Elm St., Kimball, NE69145
Kimball, NE69145
(Address of principal executive offices)(Zip Code)

(308) 235-4645

(308)235-4645

(Registrant’s telephone number, including area code)

CheckSecurities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, $0.10 par valueRSKIAOTC Markets
Convertible Preferred Stock, $20 stated valueRSKIAOTC Markets

Indicate by check mark whether the issuerregistrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the pastpreceding 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 ☒ 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 ☒ No ☐

Yes [  ]No [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or a small reportingan emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” andfiler,” “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]☒
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]☒

APPLICABLE ONLY TO CORPORATE ISSUERSISSUERS:

The number of shares of the Registrant’s Common Stock outstanding, as of March 16, 2018,15, 2024, was 4,968,447.4,898,830.

Transitional Small Business Disclosure Format:Yes [X]   No [  ]

 

 

 

GEORGE RISK INDUSTRIES, INC.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

The unaudited financial statements for the threethree- and nine-month period ended January 31, 2018,2024, are attached hereto.

2

GEORGE RISK INDUSTRIES, INC.

CONDENSED BALANCE SHEETS

 January 31, 2024 April 30, 2023 
 January 31, 2018 April 30, 2017  (unaudited)   
 (unaudited)        
ASSETS                
        
Current Assets:                
Cash and cash equivalents $3,952,000  $6,456,000  $5,371,000  $4,943,000 
Investments and securities  27,496,000   26,382,000   33,593,000   31,363,000 
Accounts receivable:                
Trade, net of $16,422 and $2,425 doubtful account allowance  2,471,000   1,848,000 
Trade, net of allowance for credit losses of $14,864 and $17,922  4,059,000   3,503,000 
Other  2,000   3,000   38,000   59,000 
Income tax overpayment  474,000   253,000   315,000   403,000 
Inventories, net  3,594,000   2,304,000   12,088,000   11,443,000 
Prepaid expenses  487,000   193,000   219,000   651,000 
Total Current Assets $38,476,000  $37,439,000   55,683,000   52,365,000 
                
Property and Equipment, net, at cost  948,000   739,000   1,987,000   1,997,000 
                
Other Assets                
Investment in Limited Land Partnership, at cost  273,000   273,000   332,000   344,000 
Projects in process  —   13,000   13,000   83,000 
Other  77,000   —   —   13,000 
Total Other Assets $350,000  $286,000   345,000   440,000 
                
Intangible Assets, net $1,794,000   —   1,058,000   1,149,000 
                
TOTAL ASSETS $41,568,000  $38,464,000  $59,073,000  $55,951,000 

See accompanying notes to the unaudited condensed financial statements.

3

GEORGE RISK INDUSTRIES, INC.

CONDENSED BALANCE SHEETS

(continued)

 January 31, 2024 April 30, 2023 
 January 31, 2018 April 30, 2017  (unaudited)   
 (unaudited)        
LIABILITIES AND STOCKHOLDERS’ EQUITY                
        
Current Liabilities                
Accounts payable, trade $308,000  $69,000  $382,000  $546,000 
Dividends payable  1,580,000   1,416,000   2,854,000   2,565,000 
Accrued expenses:        
Payroll and related expenses  178,000   308,000 
Property taxes  3,000   — 
Deferred income  38,000   43,000 
Accrued expenses  547,000   421,000 
Total Current Liabilities $2,069,000  $1,793,000   3,821,000   3,575,000 
                
Long-Term Liabilities                
Deferred income taxes  1,902,000   906,000   2,542,000   1,727,000 
Total Long-Term Liabilities $1,902,000  $906,000   2,542,000   1,727,000 
                
Total Liabilities  6,363,000   5,302,000 
        
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 
Common stock, Class A, $.10 par value, 10,000,000 shares authorized, 8,502,881 shares issued and outstanding  850,000   850,000 
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 
Common stock, Class A, $.10 par value, 10,000,000 shares authorized, 8,502,881 shares issued and outstanding  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   (91,000)  (161,000)
Retained earnings  36,232,000   35,981,000   54,836,000   52,481,000 
Less: treasury stock, 3,533,934 and 3,557,606 shares, at cost  (4,141,000)  (4,140,000)
Less: treasury stock, 3,604,051 and 3,572,338 shares, at cost  (4,918,000)  (4,554,000)
Total Stockholders’ Equity $37,597,000  $35,765,000   52,710,000   50,649,000 
                
TOTAL LIABILITES AND STOCKHOLDERS’ EQUITY $41,568,000  $38,464,000  $59,073,000  $55,951,000 

See accompanying notes to the unaudited condensed financial statementsstatements.

4

GEORGE RISK INDUSTRIES, INC.

CONDENSED INCOME STATEMENTS (Unaudited)

  Three months  Nine months  Three months  Nine months 
  ended  ended  ended  ended 
  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 
Less: Cost of Goods Sold  (1,826,000)  (4,337,000)  (1,229,000)  (3,899,000)
Gross Profit $1,434,000  $4,260,000  $1,416,000  $4,295,000 
                 
Operating Expenses                
General and Administrative  313,000   833,000   223,000   664,000 
Sales  512,000   1,371,000   461,000   1,432,000 
Engineering  22,000   69,000   17,000   59,000 
Rent Paid to Related Parties  5,000   14,000   5,000   14,000 
Total Operating Expenses $852,000  $2,287,000  $706,000  $2,169,000 
                 
Income From Operations  582,000   1,973,000   710,000   2,126,000 
                 
Other Income (Expense)                
Other  —   3,000   1,000   11,000 
Dividend and Interest Income  376,000   811,000   332,000   650,000 
Gain (Loss) on Investments  123,000   94,000   51,000   136,000 
Gain (Loss) on Sale of Assets  —   4,000   —   — 
  $499,000  $912,000  $384,000  $797,000 
                 
Income Before Provisions for Income Taxes  1,081,000   2,885,000   1,094,000   2,923,000 
                 
Provisions for Income Taxes:                
Current Expense  281,000   852,000   313,000   896,000 
Deferred Tax Expense (Benefit)  9,000   1,000   (11,000)  (24,000)
Total Income Tax Expense $290,000  $853,000  $302,000  $872,000 
                 
Net Income $791,000  $2,032,000  $792,000  $2,051,000 
                 
Cash Dividends                
Common Stock ($0.36 per share) $—  $1,780,000         
Common Stock ($0.35 per share)         $—  $1,758,000 
                 
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 

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

(Unaudited)

  Three months  Three months  Nine months  Nine months 
  ended  ended  ended  ended 
  Jan 31, 2024  Jan 31, 2023  Jan 31, 2024  Jan 31, 2023 
Net Sales $5,394,000  $4,366,000  $16,175,000  $15,194,000 
Less: Cost of Goods Sold  (2,734,000)  (2,444,000)  (8,145,000)  (8,076,000)
Gross Profit  2,660,000   1,922,000   8,030,000   7,118,000 
                 
Operating Expenses                
General and Administrative  396,000   340,000   1,097,000   1,028,000 
Sales  705,000   648,000   2,181,000   2,136,000 
Engineering  41,000   34,000   78,000   76,000 
Total Operating Expenses  1,142,000   1,022,000   3,356,000   3,240,000 
                 
Income From Operations  1,518,000   900,000   4,674,000   3,878,000 
                 
Other Income (Expense)                
Other  32,000   2,000   41,000   6,000 
Dividend and Interest Income  396,000   506,000   855,000   871,000 
Unrealized Gain on equity securities  2,883,000   1,224,000   2,149,000   27,000 
Gain (Loss) on Sale of Investments  18,000   44,000   (55,000)  (165,000)
Gain on Sale of Assets  —   —   8,000   — 
Total Other Income (Expense)  3,329,000   1,776,000   2,998,000   739,000 
                 
Income Before Provisions for Income Taxes  4,847,000   2,676,000   7,672,000   4,617,000 
                 
Provisions for Income Taxes:                
Current Expense  474,000   341,000   1,327,000   1,028,000 
Deferred Tax Expense (Benefit)  1,134,000   326,000   787,000   (78,000)
Total Income Tax Expense  1,608,000   667,000   2,114,000   950,000 
                 
Net Income $3,239,000  $2,009,000  $5,558,000  $3,667,000 
                 
Income Per Share of Common Stock                
Basic $0.66  $0.41  $1.13  $0.74 
Diluted $0.66  $0.41  $1.13  $0.74 
                 
Weighted Average Number of Common Shares Outstanding                
Basic  4,899,692   4,930,800   4,918,746   4,930,929 
Diluted  4,920,192   4,951,300   4,939,246   4,951,429 

See accompanying notes to the unaudited condensed financial statementsstatements.

5

GEORGE RISK INDUSTRIES, INC.

CONDENSED STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

  Three months  Nine months  Three months  Nine months 
  ended  ended  ended  ended 
  Jan 31, 2018  Jan 31, 2018  Jan 31, 2017  Jan 31, 2017 
Net Income $791,000  $2,032,000  $792,000  $2,051,000 
                 
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)
Other Comprehensive Income  674,000   1,385,000   329,000   412,000 
                 
Comprehensive Income $1,465,000  $3,417,000  $1,121,000  $2,463,000 

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

(Unaudited)

  Three months  Three months  Nine months  Nine months 
  ended  ended  ended  ended 
  Jan 31, 2024  Jan 31, 2023  Jan 31, 2024  Jan 31, 2023 
Net Income $3,239,000  $2,009,000  $5,558,000  $3,667,000 
                 
Other Comprehensive Income/(Loss), Net of Tax                
Unrealized gain (loss) on debt securities:                
Unrealized holding gains (losses) arising during period  418,000   173,000   98,000   (1,000)
Income tax (expense) related to other comprehensive income  (118,000)  (49,000)  (28,000)  (1,000)
                 
Other Comprehensive Income (Loss)  300,000   124,000   70,000   (2,000)
                 
Comprehensive Income $3,539,000  $2,133,000  $5,628,000  $3,665,000 

See accompanying notes to the unaudited condensed financial statementsstatements.

6

GEORGE RISK INDUSTRIES, INC.

CONDENSED STATEMENTSTATEMENTS OF CASH FLOWS (Unaudited)STOCKHOLDERS’ EQUITY

  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 

FOR THE THREE MONTHS ENDED JANUARY 31, 2024 AND 2023

(Unaudited)

  Shares  Amount  Shares  Amount 
  Preferred Stock  

Common Stock

Class A

 
  Shares  Amount  Shares  Amount 
Balances, October 31, 2023  4,100  $99,000   8,502,881  $850,000 
                 
Purchases of Common Stock  —   —   —   — 
                 
Unrealized gain, net of tax effect  —   —   —   — 
                 
Net Income  —   —   —   — 
                 
Balances, January 31, 2024  4,100  $99,000   8,502,881  $850,000 

  Shares  Amount  Shares  Amount 
  Preferred Stock  

Common Stock

Class A

 
  Shares  Amount  Shares  Amount 
Balances, October 31, 2022  4,100  $99,000   8,502,881  $850,000 
                 
Purchases of common stock  —   —   —   — 
                 
Unrealized gain, net of tax effect  —   —   —   — 
                 
Net Income  —   —   —   — 
                 
Balances, January 31, 2023  4,100  $99,000   8,502,881  $850,000 

See accompanying notes to the unaudited condensed financial statementsstatements.

7

GEORGE RISK INDUSTRIES, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED JANUARY 31, 2024 AND 2023

(Unaudited)

                        
 Paid-In  

Treasury Stock

(Common Class A)

  Accumulated Other Comprehensive  Retained    
 

Capital

  Shares  Amount  Income  Earnings  Total 
Balances, October 31, 2023$1,934,000   3,576,088  $(4,595,000) $(391,000) $51,597,000  $49,494,000 
                        
Purchases of common stock —   27,963   (323,000)  —   —   (323,000)
                       
Unrealized gain, net of tax effect —   —   —   300,000   —   300,000 
                        
Net Income —   —   —   —   3,239,000   3,239,000 
                        
Balances, January 31, 2024$1,934,000   3,604,051  $(4,918,000) $(91,000) $54,836,000  $52,710,000 

                        
 Paid-In  

Treasury Stock

(Common Class A)

  Accumulated Other Comprehensive  Retained    
 Capital  Shares  Amount  Income  Earnings  Total 
Balances, October 31, 2022$

 1,934,000

   3,571,963  $(4,550,000) $(263,000) $49,382,000  $47,452,000 
                        
Purchases of common stock —   175   (2,000)  —   —   (2,000)
                        
Unrealized gain, net of tax effect —   —   —   124,000   —   124,000 
                        
Net Income —   —   —   —   2,009,000   2,009,000 
                        
Balances, January 31, 2023$1,934,000   3,572,138  $(4,552,000) $(139,000) $51,391,000  $49,583,000 

See accompanying notes to the unaudited condensed financial statements.

8

GEORGE RISK INDUSTRIES, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE NINE MONTHS ENDED JANUARY 31, 2024 AND 2023

(Unaudited)

  Shares  Amount  Shares  Amount 
  Preferred Stock  

Common Stock

Class A

 
  Shares  Amount  Shares  Amount 
Balances, April 30, 2023  4,100  $99,000   8,502,881  $850,000 
                 
Purchases of common stock  —   —   —   — 
                 
Dividend declared at $0.65 per common share outstanding  —   —   —   — 
                 
Unrealized gain, net of tax effect  —   —   —   — 
                 
Net Income  —   —   —   — 
                 
Balances, January 31, 2024  4,100  $99,000   8,502,881  $850,000 

  Shares  Amount  Shares  Amount 
  Preferred Stock  

Common Stock

Class A

 
  Shares  Amount  Shares  Amount 
Balances, April 30, 2022  4,100  $99,000   8,502,881  $850,000 
                 
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 tax effect  —   —   —   — 
                 
Net Income  —   —   —   — 
                 
Balances, January 31, 2023  4,100  $99,000   8,502,881  $850,000 

See accompanying notes to the unaudited condensed financial statements.

9

GEORGE RISK INDUSTRIES, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE NINE MONTHS ENDED JANUARY 31, 2024 AND 2023

(Unaudited)

                        
 Paid-In  

Treasury Stock

(Common Class A)

  Accumulated Other Comprehensive  Retained    
 

Capital

  Shares  Amount  Income  Earnings  Total 
Balances, April 30, 2023$1,934,000   3,572,338  $(4,554,000) $(161,000) $52,481,000  $50,649,000 
                        
Purchases of common stock —   31,713   (364,000)  —   —   (364,000)
                        
Dividend declared at $0.65 per common share outstanding —   —   —   —   (3,203,000)  (3,203,000)
                        
Unrealized gain, net of tax effect —   —   —   70,000   —   70,000 
                        
Net Income —   —   —   —   5,558,000   5,558,000 
                        
Balances, January 31, 2024$1,934,000   3,604,051  $(4,918,000) $(91,000) $54,836,000  $52,710,000 

                        
 Paid-In  

Treasury Stock

(Common Class A)

  Accumulated Other Comprehensive  Retained    
 Capital  Shares  Amount  Income  Earnings  Total 
Balances, April 30, 2022$1,934,000   3,571,693  $(4,547,000) $(137,000) $50,843,000  $49,042,000 
Balance$1,934,000   3,571,693  $(4,547,000) $(137,000) $50,843,000  $49,042,000 
                        
Prior period adjustment for provisions related to depreciation —   —   —   —   (161,000)  (161,000)
                        
Purchases of common stock —   445   (5,000)  —   —   (5,000)
                        
Dividend declared at $0.60 per common share outstanding —   —   —   —   (2,958,000)  (2,958,000)
                        
Unrealized gain (loss), net of tax effect —   —   —   (2,000)  —   (2,000)
                        
Net Income —   —   —   —   3,667,000   3,667,000 
                        
Balances, January 31, 2023$1,934,000   3,572,138  $(4,552,000) $(139,000) $51,391,000  $49,583,000 
Balance$1,934,000   3,572,138  $(4,552,000) $(139,000) $51,391,000  $49,583,000 

See accompanying notes to the unaudited condensed financial statements.

10

GEORGE RISK INDUSTRIES, INC.

CONDENSED STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED JANUARY 31, 2024 AND 2023

(Unaudited)

  Jan 31, 2024  Jan 31, 2023 
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net Income $5,558,000  $3,667,000 
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization  364,000   332,000 
Loss on sale of investments  32,000   165,000 
Impairment on investments  22,000   — 
Unrealized (gain) on equity investments  (2,149,000)  (27,000)
Provision for credit losses on accounts receivable  (3,000)  (6,000)
Reserve for obsolete inventory  (51,000)  81,000 
Deferred income taxes  787,000   (78,000)
(Gain) on sales of assets  (8,000)  — 
Changes in assets and liabilities:        
(Increase) decrease in:        
Accounts receivable  (554,000)  824,000 
Inventories  (594,000)  (2,444,000)
Prepaid expenses  515,000   458,000 
Other receivables  22,000   (29,000)
Income tax overpayment  88,000   (478,000)
Increase (decrease) in:        
Accounts payable  (164,000)  84,000 
Accrued expenses  120,000   184,000 
Net cash from operating activities  3,985,000   2,733,000 
         
CASH FLOWS FROM INVESTING ACTIVITIES:        
Proceeds from sale of assets  8,000   — 
(Purchase) of property and equipment  (263,000)  (221,000)
Proceeds from sale of marketable securities  520,000   17,000 
(Purchase) of marketable securities  (556,000)  (648,000)
Proceeds from long-term investment  12,000   — 
Net cash from investing activities  (279,000)  (852,000)
         
CASH FLOWS FROM FINANCING ACTIVITIES:        
(Purchase) of treasury stock  (364,000)  (5,000)
Dividends paid  (2,914,000)  (2,689,000)
Net cash from financing activities  (3,278,000)  (2,694,000)
         
NET CHANGE IN CASH AND CASH EQUIVALENTS  428,000   (813,000)
         
Cash and Cash Equivalents, beginning of period  4,943,000   6,078,000 
Cash and Cash Equivalents, end of period $5,371,000  $5,265,000 
         
Supplemental Disclosure for Cash Flow Information:        
Cash payments for:        
Income taxes $1,230,000  $1,618,000 
Interest paid $—  $— 
Cash receipts for:        
Income taxes $—  $118,000 

See accompanying notes to the unaudited condensed financial statements.

11

GEORGE RISK INDUSTRIES, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

JANUARY 31, 20182024

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 unaudited condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s April 30, 20172023 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 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.

Significant 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.

Recently Issued Accounting Pronouncements —In May 2014,November 2023, the FASB issued Accounting Standards UpdateASU No. 2014-09, Revenue from Contracts with Customers.2023-07, Segment Reporting (Topic280): Improvements to Reportable Segment Disclosures. The objective of this updatenew guidance is intended to provide a robust frameworkimprove reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments are effective retrospectively for addressing revenue recognition issues and, upon its effective date, replaces almost all existing revenue recognition guidance. This update is effective in annual reporting periodsfiscal years beginning after December 15, 20172023 and the interim periods within fiscal years beginning after December 15, 2024. The Company is in the process of evaluating the impact that year.the adoption of this ASU will have to the financial statements and related disclosures, which is not expected to be material.

In 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 updatenew accounting guidance on the Company’s financial statements.its Consolidated Financial Statements.

12

 

In February of 2016, the FASB issued ASU 2016-02Leases. Under the new guidance, lessees will be required to recognize so-called right-of-use assets and liabilities for most leases having lease terms of 12 months or more. This update is effective in annual reporting periods beginning after December 31, 2019 and the interim periods starting thereafter. The Company is evaluating the impact of this update on the Company’s financial statements.

In February of 2018, the FASB issued ASU 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. Under this update, companies have 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 update is effective in annual reporting periods beginning after December 15, 2018 and the interim periods starting thereafter. The Company is evaluating the impact of this update on the Company’s 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 2018February 2024 and November 2048.July 2041. The Company uses the average cost method to determine the cost of equity securities sold andwith any unrealized gains or losses reported in the amount reclassified out of accumulated other comprehensive income intorespective 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 31, 20182024 and April 30, 2017,2023, investments consisted of the following:

Schedule of Investments

   Gross Gross   
Investments at Cost Unrealized Unrealized Fair 
January 31, 2018 Basis Gains Losses Value 

Investments at

January 31, 2024

 

Cost

Basis

 Gross Unrealized Gains Gross Unrealized Losses 

Fair

Value

 
Municipal bonds $5,966,000  $103,000  $(238,000) $5,831,000  $5,383,000  $45,000  $(162,000) $5,266,000 
Corporate bonds $129,000  $2,000  $—  $131,000 
REITs $110,000  $5,000  $(6,000) $109,000   78,000   —   (8,000)  70,000 
Equity securities $15,720,000  $4,844,000  $(203,000) $20,361,000   18,977,000   8,876,000   (294,000)  27,559,000 
Money markets and CDs $1,064,000  $—  $—  $1,064,000   698,000   —   —   698,000 
Total $22,989,000  $4,954,000  $(447,000) $27,496,000  $25,136,000  $8,921,000  $(464,000) $33,593,000 

   Gross Gross   
Investments at Cost Unrealized Unrealized Fair 
April 30, 2017 Basis Gains Losses Value 

Investments at

April 30, 2023

 

Cost

Basis

 Gross Unrealized Gains Gross Unrealized Losses 

Fair

Value

 
Municipal bonds $6,045,000  $90,000  $(97,000) $6,038,000  $5,396,000  $46,000  $(230,000) $5,212,000 
Corporate bonds $129,000  $1,000  $—  $130,000 
REITs $64,000  $13,000  $(1,000) $76,000   93,000   —   (22,000)  71,000 
Equity securities $15,259,000  $2,441,000  $(319,000) $17,381,000   18,605,000   6,915,000   (501,000)  25,019,000 
Money markets and CDs $2,757,000  $—  $—  $2,757,000   1,060,000   1,000   —   1,061,000 
Total $24,254,000  $2,545,000  $(417,000) $26,382,000  $25,154,000  $6,962,000  $(753,000) $31,363,000 

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 temporaryother-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, there were no impairment losses recorded for the quarters ended January 31, 2024 and 2023, respectively. As for the year-to-date numbers, management did not recordrecorded an impairment loss during the quarter, but did record a loss of $23,000$22,000 for the nine monthsnine-month period ended January 31, 2018. Likewise,2024, while there were no impairment losses recorded for the corresponding periods last year, management did not record a loss for the quarter, but did record a $13,000 impairment loss for the nine monthsnine-month period ended January 31, 2017.2023.

13

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 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. For the same period, sales of debt securities did not yield any gross realized gains, but gross realized losses of $14,000 were recorded. 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 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 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 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. For 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.

The 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 January 31, 20182024 and April 30, 2017,2023, respectively.

Unrealized Loss Breakdown by Investment Type at January 31, 20182024 

  Less than 12 months  12 months or greater  Total 
Description 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)
REITs $56,000  $(5,000) $27,000  $(1,000) $83,000  $(6,000)
Equity securities $534,000  $(35,000) $590,000  $(168,000) $1,124,000  $(203,000)
Total $1,292,000  $(192,000) $2,291,000  $(255,000) $3,583,000  $(447,000)

Schedule of Unrealized Loss Breakdown by Investment 

                   
  Less than 12 months  12 months or greater  Total 
Description Fair Value  Unrealized Loss  Fair Value  Unrealized Loss  Fair Value  Unrealized Loss 
Municipal bonds $816,000  $(10,000) $2,767,000  $(153,000) $3,583,000  $(163,000)
REITs  3,000   (1,000)  67,000   (6,000)  70,000   (7,000)
Equity securities  1,251,000   (85,000)  1,366,000   (209,000)  2,617,000   (294,000)
Total $2,070,000  $(96,000) $4,200,000  $(368,000) $6,270,000  $(464,000)

Unrealized Loss Breakdown by Investment Type at April 30, 20172023

             
 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) $868,000  $(6,000) $3,769,000  $(224,000) $4,637,000  $(230,000)
REITs $—  $—  $27,000  $(1,000) $27,000  $(1,000)  36,000   (9,000)  35,000   (13,000)  71,000   (22,000)
Equity securities $983,000  $(92,000) $1,689,000  $(227,000) $2,672,000  $(319,000)  3,048,000   (140,000)  2,209,000   (361,000)  5,257,000   (501,000)
Total $2,403,000  $(111,000) $3,008,000  $(306,000) $5,411,000  $(417,000) $3,952,000  $(155,000) $6,013,000  $(598,000) $9,965,000  $(753,000)

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 31, 2018.2024 and April 30, 2023.

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 31, 20182024 and April 30, 2023.

Note 3:Inventories

Inventories at January 31, 20182024 and April 30, 20172023 consisted of the following:

Schedule of Inventories

  January 31,  April 30, 
  2024  2023 
       
Raw materials $10,603,000  $9,886,000 
Work in process  777,000   678,000 
Finished goods  1,046,000   1,267,000 
Inventory gross  12,426,000   11,831,000 
Less: allowance for obsolete inventory  (338,000)  (388,000)
Inventories, net $12,088,000  $11,443,000 

14

 

  January 31,  April 30, 
  2018  2017 
       
Raw materials $2,704,000  $1,579,000 
Work in process  348,000   442,000 
Finished goods  615,000   356,000 
   3,667,000   2,377,000 
Less: allowance for obsolete inventory  (73,000)  (73,000)
Totals $3,594,000  $2,304,000 

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 5:4: Business Segments

The following is financial information relating to industry segments:

Schedule of Financial Information Relating to Industry Segments

  Three months  Three months  Nine months  Nine months 
  ended  ended  ended  ended 
  Jan 31, 2024  Jan 31, 2023  Jan 31, 2024  Jan 31, 2023 
Net revenue:                
Security alarm products $4,939,000  $3,712,000  $14,627,000  $13,079,000 
Cable & wiring tools  332,000   486,000   1,117,000   1,561,000 
Other products  123,000   168,000   431,000   554,000 
Total net revenue $5,394,000  $4,366,000  $16,175,000  $15,194,000 
                 
Income from operations:                
Security alarm products $1,373,000  $774,000  $4,226,000  $3,339,000 
Cable & wiring tools  105,000   93,000   323,000   398,000 
Other products  40,000   33,000   125,000   141,000 
Total income from operations $1,518,000  $900,000  $4,674,000  $3,878,000 
                 
Depreciation and amortization:                
Security alarm products $55,000  $48,000  $146,000  $143,000 
Cable & wiring tools  30,000   30,000   91,000   92,000 
Other products  24,000   21,000   61,000   57,000 
Corporate general  14,000   14,000   66,000   40,000 
Total depreciation and amortization $123,000  $113,000  $364,000  $332,000 
                 
Capital expenditures:                
Security alarm products $—  $—  $224,000  $74,000 
Cable & wiring tools  —   —   —   — 
Other products  20,000   12,000   20,000   147,000 
Corporate general  —   —   19,000   — 
Total capital expenditures $20,000  $12,000  $263,000  $221,000 

  January 31, 2024  April 30, 2023 
Identifiable assets:        
Security alarm products $15,880,000  $14,251,000 
Cable & wiring tools  2,173,000   2,548,000 
Other products  850,000   981,000 
Corporate general  40,170,000   38,171,000 
Total assets $59,073,000  $55,951,000 

15

 

  Three months  Nine months  Three months  Nine months 
  ended  ended  ended  ended 
  Jan 31, 2018  Jan 31, 2018  Jan 31, 2017  Jan 31, 2017 
Net revenue:                
Security alarm products $2,715,000  $6,683,000  $2,214,000  $6,955,000 
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 
Other products  52,000   94,000   27,000   80,000 
Corporate general  15,000   41,000   13,000   29,000 
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 

  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 6:5: Earnings per Share

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

Schedule of Basic and Diluted Earnings Per Share

  For the three months ended January 31, 2024 
  Income  Shares  Per-Share 
  (Numerator)  (Denominator)  Amount 
Net income $3,239,000         
Basic EPS $3,239,000   4,899,692  $.66 
Effect of dilutive Convertible Preferred Stock  –   20,500   — 
Diluted EPS $3,239,000   4,920,192  $.66 

  For the three months ended January 31, 2023 
  Income  Shares  Per-Share 
  (Numerator)  (Denominator)  Amount 
Net income $2,009,000         
Basic EPS $2,009,000   4,930,800  $.41 
Effect of dilutive Convertible Preferred Stock  –   20,500       — 
Diluted EPS $2,009,000   4,951,300  $.41 

  For the nine months ended January 31, 2024 
  Income  Shares  Per-Share 
  (Numerator)  (Denominator)  Amount 
Net income $5,558,000         
Basic EPS $5,558,000   4,918,746  $1.13 
Effect of dilutive Convertible Preferred Stock  –   20,500        — 
Diluted EPS $5,558,000   4,939,246  $1.13 

  For the nine months ended January 31, 2023 
  Income  Shares  Per-Share 
  (Numerator)  (Denominator)  Amount 
Net income $3,667,000         
Basic EPS $3,667,000   4,930,929  $.74 
Effect of dilutive Convertible Preferred Stock  –   20,500        — 
Diluted EPS $3,667,000   4,951,429  $.74 

16

 

  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 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 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 7:6: 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 $2,000$15,000 and $14,000 were paid during both the quarterseach quarter ending January 31, 20182024 and 2017,2023, respectively. Likewise, the Company paid matching contributions of approximately $8,000$45,000 and $43,000 during theeach nine-month period ending January 31, 20182024 and $7,000 during the corresponding period the prior fiscal year.2023, respectively.

Note 8: 7: Fair Value Measurements

Generally accepted accounting principles inThe carrying value of the United States of America (US GAAP) definesCompany’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 1Valuation is based upon quoted prices for identical instruments traded in active markets.
Level 2Valuation 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 3Valuation 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 31, 2018,2024 and April 30, 2023, 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.securities. Our marketable securities are valued using third-party broker statements. 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.

Fair Value Hierarchy

 

The 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. 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 

17

 

  

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 

Schedule of Assets Measured at Fair Value on Recurring Basis

  Level 1  Level 2  Level 3  Total 
  Assets Measured at Fair Value on a Recurring Basis as of
January 31, 2024		 
  Level 1  Level 2  Level 3  Total 
Assets:                
Municipal Bonds $—  $5,266,000  $—  $5,266,000 
REITs  —   70,000   —   70,000 
Equity Securities  27,559,000   —   —   27,559,000 
Money Markets  698,000   —   —   698,000 
Total fair value of assets measured on a recurring basis $28,257,000  $5,336,000  $—  $33,593,000 

  Level 1  Level 2  Level 3  Total 
  Assets Measured at Fair Value on a Recurring Basis as of
April 30, 2023		 
  Level 1  Level 2  Level 3  Total 
Assets:                
Municipal Bonds $—  $5,212,000  $—  $5,212,000 
REITs  —   71,000   —   71,000 
Equity Securities  25,019,000   —   —   25,019,000 
Money Markets  1,061,000   —   —   1,061,000 
Total fair value of assets measured on a recurring basis $26,080,000  $5,283,000  $—  $31,363,000 

Note 8 Subsequent Events

None

18

 

Note 9: Subsequent Events

None

GEORGE RISK INDUSTRIES, INC.

PART I. FINANCIAL INFORMATION

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

19

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 information becomes available in the future.

 

The following discussion should be read in conjunction with the attached unaudited condensed consolidated financial statements, and with the Company’s audited financial statements and discussion for the fiscal year ended April 30, 2017.2023.

Executive Summary

The Company’s performance in operations has remained steadyseen a tick upward through the three quarters of the current fiscal year with increasedthe third quarter dipping slightly in sales being offset by increased costover the second quarter of sales, and greatly improved investment returns.the current fiscal year. This is mainly due to the continuation offact that our quality USA madebusiness 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 ability for customization, our notable customer service,COVID-19 pandemic restrictions, and inflation. Possible COVID-19 challenges include, but are not limited to, price increases and/or delays in the purchasesupply chain, reduced sales, workforce interruptions, and economic conditions impacting the stock market. Management continues to work at keeping operations flowing as efficiently as possible with the hopes of getting the assets of Labor Saving Devices, Inc. New challenges the Company has endured over the nine months of this fiscal year include the continuation of training of our new software system, learningfacilities running leaner and incorporating the Labor Saving Devices product line, and dealing with some shortages and defects of raw materials.more profitable than ever before.

Results of Operations

●Net sales were $3,260,000$5,394,000 for the quarter ended January 31, 2018,2024, which is a 23.25%23.55% increase from the corresponding quarter last year. Year-to-date net sales were $8,597,000$16,175,000 at January 31, 2018,2024, which is a 4.92%6.46% increase from the same period last year. A significant part of growthThe improvement in sales is a direct result of the asset purchase of Labor Saving Deviceseconomy rebounding and having a new product linethe ability to sell as a result of the purchase. Also,get goods built and shipped to our customers. We continue to operate our business with our ongoing commitment to outstanding customer service and customization of products are a few of the many reasons sales remained steady over the years.our ability to customize products.

20

●
●Cost of goods sold was 56.0%50.69% of net sales for the quarter ended January 31, 20182024 and was 46.4%55.98% for the same quarter last year. Year-to-date cost of goods sold percentages were 50.4%50.36% for the current nine months and 47.6%53.15% for the corresponding nine months last year, which isyear. The current cost of goods sold percentages have dropped to be just slightly over the targetoutside of Management’s goal of keeping labor and other manufacturing expenses at less than 50% for both the quarter and year-to-date results. There wereManagement 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 that were incurred with the purchase of Labor Saving Devices that happened during this quarter but they were “one time” expenses management expects the cost of goods sold percentage to fall to return to normal in the future.by implementing a 2.5% price increase effective January 1, 2024.

●
●Operating expenses increased by $146,000$120,000 for the quarter and alsothey increased by $118,000$116,000 for the nine-months ended January 31, 20182024 as compared to the corresponding periods last year. These increased costs are primarilyWhen 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 new product development,commission amounts, related to increased commissions,sales, and additional training and maintenance fees on our new computer softwarelabor costs related to wage increases.
●
●Income from operations for the quarter ended January 31, 20182024 was at $582,000 which is an 18.02% decrease$1,518,000, a 68.67% increase from the corresponding quarter last year, which had income from operations of $710,000.$900,000. Income from operations for the nine months ended January 31, 20182024 was at $1,973,000,$4,674,000, which is a 7.20% decrease20.53% increase from the corresponding nine months last year, which had income from operations of $2,126,000.$3,878,000.
●Other income and expenses are up when comparing tofor the current quarter and nine-month periodsended January 31, 2024 shows income of $3,329,000, which is a $1,553,000 increase from the priorcorresponding quarter last year, withwhich had an income amount of $1,776,000. Comparatively, there is an increase of $115,000$2,259,000 in the current quarter and an increase of $115,000other income for the current year-to-date. The majorityyear-to-date numbers. Most of the activity in these accounts consists of investment interest, dividends, and gainreal gains or losslosses on sale of investments. Withinvestments, and unrealized gains or losses on equity securities. The main reason for the continued growthincrease in the performancecurrent quarter and year-to-date numbers is unrealized gain and loss on equity securities. The Company is at the mercy of the stock market decisions were madewhen it comes to sell holdingsthese figures, the stock market has seen an upturn recently with decreased inflation and takeimprovement in the realized gain and dividends and interest payments exceeded expectations and many of our holdings had additional and increased dividend payouts.economy.
●Overall, net income for the quarter ended January 31, 20182024 was down $1,000,up $1,230,000, or 0.13%61.22%, from the same quarter last year. Similarly, net income for the nine-month period ended January 31, 20182024 was down $19,000,up $1,891,000, or 0.93%51.57%, from the same period in the prior year.
●Earnings per common share for the quarter ended January 31, 20182024 were $0.16$0.66 per share and $0.41$1.13 per share for the year-to-date numbers. EPS for the quarter and nine months ended January 31, 20172023 were also $0.16$0.41 per share and $0.41$0.74 per share, respectively.

21

 

Liquidity and capital resources

Operating

●Net cash decreased $2,504,000increased $428,000 during the nine months ended January 31, 20182024 as compared to an increasea decrease of $80,000$813,000 during the corresponding period 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$554,000 for the nine months ended January 31, 20182024 compared with a $163,000$824,000 decrease for the same period last year. The current year increase is a direct result of improvedthe increased sales, andwhile there has been a slight uptick in collections onof accounts receivable. An analysis of accounts receivable taking a bit longer than normal. Management believesshows that approximately $16,0009.62% of accountsthe receivables were over 90 days have a possibility of being uncollectible.at January 31, 2024.
●Inventories increased $1,291,000$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 an decrease of $426,000 last year, primarily due to the inventory purchased from Labor Saving Devices.nine-month period ending January 31, 2023.
●Prepaid expenses saw a $359,000 increase$515,000 decrease for the current nine months, primarily due to having inventory and machinery delivered during the prepaymentcurrent nine-month period; therefore, having less money in prepayments of inventoryraw materials on the Company purchases. Likewise, thebooks. The prior nine monthsnine-month period showed a $48,000 increase$458,000 decrease in prepaid expenses.
●Income 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 monthsnine-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.2023. The main reasoncurrent decrease is due to having to our income tax estimates be more aligned with our net income.
●Accounts payable shows a $164,000 decrease for the current nine-month period ended January 31, 2024 compared to an $84,000 increase is thatfor the Company expects to generate additional income with the asset acquisition that happened earlier this fiscal year.
●Accounts payable shows increases for bothprior nine-month periods at $239,000 and $20,000, respectively.period. The company strives to pay all invoices within terms, and the variance in increases is primarily due to the timing of receipt of products and payment of invoices.
●Accrued expenses decreased $127,000increased $120,000 for the current nine-month period as compared to a $72,000 decrease$184,000 increase for the nine-month period ended January 31, 2017.2023. The difference in the amounts is primarily due to timing issues.

Investing

Investing

●As for our investment activities, the Company spent approximately $342,000$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 $146,000.$221,000.
●As a result 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 and fixed assets. Since the acquisition took place in the current year, there was no cash towards this item for the same reporting period last year.
●Additionally, 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 of2024 the buy/sell activity in the investment accounts.accounts continued as usual. Net cash spent on purchases of marketable securities for the nine-month period ended January 31, 20182024 was $653,000$556,000 compared to $668,000$648,000 spent in the prior nine-month period. We continueThe 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.

Financing

22

Financing

●The Company continues to purchase back common stock when the opportunity arises. For the nine-month period ended January 31, 2018,2024, the Company purchased $3,000$364,000 worth of treasury stock. This is in comparison to $551,000$5,000 spent in the same nine monthsnine-month period the prior year.

●
●The company paid out dividends of $1,617,000$2,914,000 during the nine months ending January 31, 2018.2024. These dividends were paid during the second quarter. The company declared a dividend of $0.36$0.65 per share of common stock on September 30, 20172023 and these dividends were paid by October 31, 2017.2023. As for the prior year numbers, dividenddividends paid was $1,596,000$2,689,000 for the nine months ending January 31, 2017.2023. A dividend of $0.35$0.60 per common share was declared and paid during the second fiscal quarter last year.

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

  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 engineering department continue to develop enhancements to product lines, develop new products which complement existing products, and look for products that are well suited to our distribution network and manufacturing capabilities. Items currently in the development process include:

●A new face plateExplosion proof contacts that will be UL listed for hazardous locations. There has been demand from 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.customers for this type of high security magnetic reed switch.
●An updated version of the pool access alarmThe Company is currently going through ETL testing. This next-generation model combines our battery operated DPA series with our hard wired 289 series. A variety of installation options will be available through jumper pin settings.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.
●The case forResearch is being done on updating our CC15 is completesmall profile glass break detector, in addition to looking at the development of programmable temperature 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.humidity sensors with built-in hysteresis.
●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 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 Alarmmonitoring devices which include glass break detection, tilt sensing 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 versionmonitoring. A redesign of our 200-36 & 4532 overhead door switch line upbrass water valve shut-off system is nearing completion with the 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.near completion.

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

23

 

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 2016, the FASB issued ASU 2016-02Leases. Under the new guidance, lessees will be required to recognize so-called right-of-use assets and liabilities for most leases having lease terms of 12 months or more. This update is effective in annual reporting periods beginning after December 31, 2019 and the interim periods starting thereafter. The Company is evaluating the impact of this update on the Company’s financial statements.

In February of 2018, the FASB issued ASU 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. Under this update, companies have 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 update is effective in annual reporting periods beginning after December 15, 2018 and the interim periods starting thereafter. The Company is evaluating the impact of this update on the Company’s financial statements.

GEORGE RISK INDUSTRIES, INC.

PART I. FINANCIAL INFORMATION

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable

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 31, 2018.2024. 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.

We have taken measures to improveIn our disclosure controls and procedures. A new accounting professional was hiredannual report filed on Report 10-K for the year ended April 30, 2023, management identified the following material weakness in October 2017 to fill the Controller position. Regarding this filing, more 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 of this new Controller, we believe this control deficiency represents material weaknesses inour internal control over financial reporting.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 occur with an outside party. A part-time Controller was hired in March 2023, but 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 of duties for financial reporting purposes.

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.

We will continue to follow the standards for the Public Company Accounting Oversight Board (United States) for internal control over financial reporting to include procedures that:

●Pertain to the maintenance of records in reasonable detail that fairly reflect the transactions and dispositions of the Company’s assets;
●Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the Board of Directors; and

●Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Changes in Internal Control Overover Financial Reporting

There wasOther than those mentioned above, there were no changechanges in our internal control over financial reporting during the fiscal quarter ended January 31, 20182024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

24

GEORGE RISK INDUSTRIES, INC.

Part II. OTHER INFORMATION

Item 1. Legal Proceedings

Not applicable

Item 1A. Risk Factors

Not applicable.

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 quarter of fiscal year 2018.2024.

PeriodNumber of shares repurchased
November 1, 20172023 – November 30, 20172023-0-26,663
December 1, 20172023 – December 31, 20172023-0-
January 1, 20182024 – January 31, 201820241001,300

Item 3. Defaults upon Senior Securities

Not applicable

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

Not applicable

Item 6. Exhibits

Exhibit No.Description
31.1
10.1Material Contract – Purchase Agreement
31.1Certification of the Chief Executive Officer (Principal Financial and Accounting Officer), as required by Section 302 of the Sarbanes-Oxley Act of 2002.
32.1Certification of the Chief Executive Officer (Principal Financial and Accounting Officer), as required by Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS Inline XBRL Instance Document
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

25

 

SIGNATURES

Pursuant to 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, 201815, 2024By:By:/s/ Stephanie M. Risk-McElroy
Stephanie M. Risk-McElroy
President, Chief Executive Officer, Chief Financial Officer, and Chairman of the Board

26