UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM ~~10-Q/A~~10-Q

~~Amendment No. 2~~

(Mark One)

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

For the quarterly period ended July 31, ~~2019~~2020

[ ] 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 registrant as specified in its charter)

Colorado

84-0524756

(State or other jurisdiction

of incorporation or organization)

(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)

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 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]~~[ X ] No [ ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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]~~[ X ] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, a non-accelerated filer, a small reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated 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 September 18, ~~2019~~2020 was ~~4,952,110.~~4,949,927.

~~EXPLANATORY NOTE~~

This Amendment No. 2 to Form 10-Q, (“Amendment”), amends the Quarterly Report on Form 10-Q for the three months ended July 31, 2019 that we originally filed with the Securities and Exchange Commission, or the Commission, on September 18, 2019, or the Original Filing, in connection with our failure to give effect to the implementation of FASB ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”) in the financial statements included in the Original Filing.

~~All amendments and restatements to the financial statements are non-cash in nature.~~

~~Restatement~~

As further discussed in Note 9 to our unaudited financial statements in Part I, Item 1, “Financial Statements” of the Amendment #2, on April 1, 2020, we concluded that certain disclosures necessary to fairly explain the changes in the financial statements presented were excluded in our previous filings and that we would we would restate our previously issued financial statements as of July 31, 2019 and for the three months ended July 31, 2018 and 2019, as set forth in the Amended Filing to disclose the in connection with our failure to give effect to the implementation of ASU 2016-01 in the financial statements included in the Original Quarterly Report on Form 10-Q.

~~Amendment~~

The purpose of this Amendment is to restate our previously issued unaudited financial statements and related disclosures as of July 31, 2019 and for the three months ended July 31, 2018 and 2019 in connection with the application of ASU 2016-01. This Amendment also includes (a) an amended Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to reflect the correction of the error described above.

Except as expressly set forth herein, including in the notes to the unaudited financial statements, this Amendment, along with Amendment #1 (“Amendments”), does not reflect events occurring after the date of the Original Filing or modify or update any of the other disclosures contained therein in any way other than as required to reflect the amendment discussed above. Accordingly, this Amendment should be read in conjunction with the Original Filing and our other filings with the Commission. Information not affected by the restatement is unchanged and reflects disclosures made at the time of the filing of the Original Filing and Amendments.

~~See Note 9 to the financial statements included in Item 1 for additional information and a reconciliation of the previously reported amounts to the restated amounts.~~

~~Items Amended in this Filing~~

For reasons discussed above, we are filing this Amendment in order to amend the following items in our Original Filing to the extent necessary to reflect the adjustments discussed above and make corresponding revisions to our financial data cited elsewhere in this Amendment in connection with the application of ASU 2016-01 in this Amendment that was not previously applied:

~~Part I, Item 1. Financial Statements~~

~~Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~Part I, Item 4. Controls and Procedures~~

In accordance with applicable Commission rules, this Amendment includes new certifications required by Rule 13a-14 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, from our Chief Executive Officer and Chief Financial Officer dated as of the date of filing of this Amendment.

GEORGE RISK INDUSTRIES, INC.

PART I. FINANCIAL INFORMATION

~~ITEM 1: Financial Statements~~

ITEM 1:

Financial Statements

The ~~restated~~ unaudited financial statements for the three-month period ended July 31, ~~2019~~2020 are attached hereto.

GEORGE RISK INDUSTRIES, INC.

CONDENSED BALANCE SHEETS

	July 31, 2020		April 30, 2020
	(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	7,491,000	$	6,458,000
Investments and securities, at fair value		27,657,000		25,322,000
Accounts receivable:
Trade, net of $1,913 and $7,306 doubtful account allowance		2,920,000		2,964,000
Other		19,000		18,000
Income tax overpayment		—		56,000
Inventories, net		5,507,000		5,103,000
Prepaid expenses		334,000		516,000
Total Current Assets		43,928,000		40,437,000

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

Other Assets
Investment in Limited Land Partnership, at cost		320,000		320,000
Projects in process		108,000		21,000
Other		2,000		2,000
Total Other Assets		430,000		343,000

Intangible assets, net		1,486,000		1,517,000

TOTAL ASSETS	$	47,349,000	$	43,762,000

See accompanying notes to the condensed financial statements

GEORGE RISK INDUSTRIES, INC.

CONDENSED BALANCE SHEETS

(continued)

July 31, 2019 April 30, 2019
(unaudited)
(Restated) (Restated)
ASSETS
Current Assets:
Cash and cash equivalents $ 5,667,000 $ 4,873,000
Investments and securities, at fair value 27,657,000 27,291,000
Accounts receivable:
Trade, net of $8,764 and $9,321 doubtful account allowance 2,534,000 2,696,000
Other 4,000 6,000
Income tax overpayment — 259,000
Inventories, net 4,863,000 4,583,000
Prepaid expenses 320,000 282,000
Total Current Assets 41,045,000 39,990,000

Property and Equipment, net, at cost 1,095,000 984,000

Other Assets
Investment in Limited Land Partnership, at cost 293,000 293,000
Projects in process 1,000 117,000
Other 3,000 3,000
Total Other Assets 297,000 413,000

Intangible assets, net 1,609,000 1,640,000

TOTAL ASSETS $ 44,046,000 $ 43,027,000

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

Long-Term Liabilities
Deferred income taxes		1,343,000			699,000
Total Long-Term Liabilities		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
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			1,934,000
Accumulated other comprehensive income		101,000			(4,000	)
Retained earnings		43,498,000			41,006,000
Less: treasury stock, 3,552,954 and 3,552,954 shares, at cost		(4,301,000	)		(4,301,000	)
Total Stockholders’ Equity		42,181,000			39,584,000

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	47,349,000		$	43,762,000

See accompanying notes to the condensed financial statements

GEORGE RISK INDUSTRIES, INC.

CONDENSED ~~BALANCE SHEETS~~INCOME STATEMENTS

~~(continued)~~FOR THE THREE MONTHS ENDED JULY 31, 2020 AND 2019

(Unaudited)

July 31, 2019 April 30, 2019
(unaudited)
(Restated) (Restated)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable, trade $ 261,000 $ 206,000
Dividends payable 1,714,000 1,714,000
Accrued expenses:
Payroll and related expenses 287,000 356,000
Property taxes 3,000 —
Income tax payable 30,000 —
Total Current Liabilities 2,295,000 2,276,000

Long-Term Liabilities
Deferred income taxes 1,240,000 1,198,000
Total Long-Term Liabilities 1,240,000 1,198,000

Total Liabilities 3,535,000 3,474,000
��
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
Additional paid-in capital 1,934,000 1,934,000
Accumulated other comprehensive income 49,000 14,000
Retained earnings 41,859,000 40,883,000
Less: treasury stock, 3,550,571 and 3,544,271 shares, at cost (4,280,000 ) (4,227,000 )
Total Stockholders’ Equity 40,511,000 39,553,000

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 44,046,000 $ 43,027,000

	July 31, 2020			July 31, 2019

Net Sales	$	4,047,000		$	3,552,000
Less: Cost of Goods Sold		(1,952,000	)		(1,769,000	)
Gross Profit		2,095,000			1,783,000

Operating Expenses:
General and Administrative		313,000			297,000
Sales		567,000			557,000
Engineering		29,000			14,000
Rent Paid to Related Parties		—			5,000
Total Operating Expenses		909,000			873,000

Income From Operations		1,186,000			910,000

Other Income (Expense)
Other		12,000			1,000
Dividend and Interest Income		156,000			193,000
Unrealized gain (loss) on equity securities		2,114,000			145,000
Gain (Loss) on Sale of Investments		(28,000	)		49,000
		2,254,000			388,000

Income Before Provisions for Income Taxes		3,440,000			1,298,000

Provisions for Income Taxes
Current Expense		349,000			294,000
Deferred tax expense		599,000			28,000
Total Income Tax Expense		948,000			322,000

Net Income	$	2,492,000		$	976,000

Basic Earnings Per Share of Common Stock	$	0.50		$	0.20
Diluted Earnings Per Share of Common Stock	$	0.50		$	0.20

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 STATEMENTS OF COMPREHENSIVE INCOME ~~STATEMENTS~~

FOR THE THREE MONTHS ENDED JULY 31, ~~2019~~2020 AND ~~2018~~2019

(Unaudited)

July 31, 2019 July 31, 2018
(Restated) (Restated)

Net Sales $ 3,552,000 $ 3,429,000
Less: Cost of Goods Sold (1,769,000 ) (1,801,000 )
Gross Profit 1,783,000 1,628,000

Operating Expenses:
General and Administrative 297,000 286,000
Sales 557,000 555,000
Engineering 14,000 9,000
Rent Paid to Related Parties 5,000 5,000
Total Operating Expenses 873,000 885,000

Income From Operations 910,000 773,000

Other Income (Expense)
Other 1,000 3,000
Dividend and Interest Income 193,000 193,000
Unrealized gain (loss) on equity securities 145,000 432,000
Gain (Loss) on Sale of Investments 49,000 (68,000 )
Total Other Income 388,000 560,000

Income Before Provisions for Income Taxes 1,298,000 1,333,000

Provisions for Income Taxes
Current Expense 294,000 247,000
Deferred tax expense 28,000 161,000
Total Income Tax Expense 322,000 408,000

Net Income $ 976,000 $ 925,000

Basic Earnings Per Share of Common Stock $ 0.20 $ 0.19
Diluted Earnings Per Share of Common Stock $ 0.20 $ 0.19

Weighted Average Number of Common Shares Outstanding 4,956,389 4,967,580
Weighted Average Number of Shares Outstanding (Diluted) 4,976,889 4,988,080

	July 31, 2020			July 31, 2019

Net Income	$	2,492,000		$	976,000

Other Comprehensive Income, Net of Tax
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		105,000			35,000

Comprehensive Income	$	2,597,000		$	1,011,000

See accompanying notes to the condensed financial statements

GEORGE RISK INDUSTRIES, INC.

~~CONDENSED~~ STATEMENTS OF ~~COMPREHENSIVE INCOME~~STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED JULY 31, 2020 and 2019 ~~AND 2018~~

(Unaudited)

July 31, 2019 July 31, 2018
(Restated) (Restated)

Net Income $ 976,000 $ 925,000

Other Comprehensive Income (Loss), Net of Tax
Unrealized gain (loss) on securities:
Unrealized holding gains arising during period 49,000 220,000
Income tax expense related to other comprehensive income (14,000 ) (63,000 )
Other Comprehensive Income (Loss) 35,000 157,000

Comprehensive Income (Loss) $ 1,011,000 $
1,082,000

	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.

~~CONDENSED~~ STATEMENTS OF STOCKHOLDERS’ ~~EQUITY~~EQUITIY

FOR THE THREE MONTHS ENDED JULY 31, ~~2019~~2020 and ~~2018~~2019

(Unaudited)

Preferred
Stock
Common Stock
Class A

Shares Amount Shares Amount
Balances, April 30, 2019 (Restated) 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 (Restated) 4,100 $ 99,000 8,502,881 $ 850,000

							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

Preferred
Stock
Common Stock
Class A

Shares Amount Shares Amount
Balances, April 30, 2018, as previously reported 4,100 $ 99,000 8,502,881 $ 850,000

Cumulative effect of restatement on prior periods, for adoption of ASU 2016-01 — — — —

Balance at May 1, 2018 after adoption of ASU 2016-01, as restated — — — —

Purchases of common stock — — — —

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

Net Income — — — —

Balances, July 31, 2018 (Restated) 4,100 $ 99,000 8,502,881 $ 850,000

							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 ~~STOCKHOLDERS’ EQUITIY~~CASH FLOWS

FOR THE THREE MONTHS ENDED JULY 31, 2020 AND 2019 ~~and 2018~~

(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 3,534,784 $ (4,148,000 ) $ 2,249,000 $ 36,746,000 $ 37,730,000

(2,424,000 ) 2,424,000 —

1,934,000 3,534,784 (4,148,000 ) (175,000 ) 39,170,000 37,730,000

— 650 (5,000 ) — — (5,000 )

— — — 157,000 — 157,000

— — — — 925,000 925,000

$ 1,934,000 3,535,434 $ (4,153,000 ) $ (18,000 ) $ 40,095,000 $ 38,807,000

	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.

~~CONDENSED STATEMENTS OF CASH FLOWS~~

~~FOR THE THREE MONTHS ENDED JULY 31, 2019 AND 2018~~

~~(Unaudited)~~

July 31, 2019 July 31, 2018
(Restated) (Restated)
Cash Flows from Operating Activities:
Net Income $ 976,000 $ 925,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 89,000 83,000
(Gain) loss on sale of investments (83,000 ) 68,000
Impairments on investments 34,000 —
Unrealized (gain) loss on equity securities (145,000 ) (432,000 )
Reserve for bad debts (2,000 ) 3,000
Reserve for obsolete inventory 8,000 6,000
Deferred income taxes 28,000 161,000
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable 163,000 234,000
Inventories (288,000 ) (389,000 )
Prepaid expenses 79,000 166,000
Employee receivables 2,000 —
Income tax overpayment — 244,000
Increase (decrease) in:
Accounts payable 55,000 (7,000 )
Accrued expenses (66,000 ) (172,000 )
Income tax payable 289,000 —
Net cash provided by operating activities 1,139,000 890,000

Cash Flows From Investing Activities:
(Purchase) of property and equipment (169,000 ) —
Proceeds from sale of marketable securities 9,000 2,000
(Purchase) of marketable securities (132,000 ) (233,000 )
Net cash (used in) investing activities (292,000 ) (231,000 )

Cash Flows From Financing Activities:
(Purchase) of treasury stock (53,000 ) (5,000 )
Dividends paid — (1,000 )
Net cash (used in) financing activities (53,000 ) (6,000 )

Net Increase in Cash and Cash Equivalents $ 794,000 $ 653,000

Cash and Cash Equivalents, beginning of period $ 4,873,000 $ 4,294,000
Cash and Cash Equivalents, end of period $ 5,667,000 $ 4,947,000

Supplemental Disclosure for Cash Flow Information:
Cash payments for:
Income taxes paid $ 0 $ 0
Interest paid $ 0 $ 1,000

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

~~GEORGE RISK INDUSTRIES, INC.~~

NOTES TO ~~RESTATED~~ CONDENSED FINANCIAL STATEMENTS

JULY 31, ~~2019~~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, ~~2019~~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 ~~February~~June 2016, the FASB issued ASU ~~2016-02, “Leases (Topic 842)~~No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” ~~(“ASU 2016-02”)~~, which ~~provides guidance for accounting for leases. ASU 2016-02~~ requires ~~lessees~~entities to ~~classify leases as either finance or operating leases and to record~~use a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of the lease classification. The lease classification will determine whether the lease expense is recognizedforward looking approach based on ~~an effective interest rate method or~~expected losses to estimate credit losses on ~~a straight-line basis over~~certain types of financial instruments, including trade receivables. The FASB has subsequently issued updates to the ~~term of the lease. Accounting for lessors remains largely unchanged from current GAAP. ASU 2016-02~~standard to provide additional clarification on specific topics. Topic 326 is effective for ~~the Company~~fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. We have applied this guidance, as of May 1, 2019. Early adoption is permitted. In July 2018, the FASB issued ASU No. 2018-10 “Codification Improvements to Topic 842, Leases” (“ASU 2018-10”) and ASU No. 2018-11 “Leases (Topic 842) Targeted Improvements” (“ASU 2018-11”) and ASU 2018-20, “Narrow-Scope Improvements for Lessors”. ASU 2018-10 provides certain amendments that affect narrow aspects2020, using a modified-retrospective approach. The application of ~~the~~this guidance issued in ASU 2016-02. ASU 2018-11 allows all entities adopting ASU 2016-02 to choose an additional (and optional) transition method of adoption, under which an entity initially applies the new leases standard at the adoption date and recognizesdid not require a ~~cumulative-effect~~cumulative effect adjustment to ~~the opening balance of~~ retained earnings in the period of adoption. ASU 2018-11 also allows lessors to not separate non-lease components from the associated lease component if certain conditions are met. During the first quarter of 2019, the FASB issued ASU 2019-01, Leases (Topic 842) to amend ASU 2016-02. This amendment exempts both lessees and lessors from having to provide certain prior year interim disclosure information in the fiscal year in which a company adopts the new leases standard. The Company has adopted the ASUs in the first quarter of fiscal 2020 and the Company’s accounting systems have been upgraded to comply with the requirements of the new standard, however, the adoption of ASU 2016-02 did not have a material ~~impact~~effect on ~~the Company’s financial statements and related disclosures because leases are not material to the~~our financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820). The updated guidance improves the disclosure requirements on fair value measurements. The updated guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for any removed or modified disclosures. We applied this guidance, as of May 1, 2020. The ~~Company is currently assessing the timing and impact~~application of ~~adopting the updated provisions.~~this guidance did not have a material effect on our disclosures.

In August 2018, The FASB issued ASU 2018-14 to improve the effectiveness of disclosures for defined benefit plans under ASC 715-20. The ASU applies to employers that sponsor defined benefit pension or other postretirement plans. The FASB issued ASU 2018-14 as part of its disclosure framework project, which has an objective and primary focus to improve the effectiveness of disclosures in the notes to financial statements. As part of the project, during August 2018, the Board also issued a Concepts Statement, which the FASB used as a basis for amending the disclosure requirements for Subtopic 715-20. The guidance is effective or fiscal years ending after December 15,January 2020, ~~and early adoption is permitted. The Company is currently assessing the timing and impact of adopting the updated provisions.~~

~~In June 2016,~~ the FASB issued ASU ~~No. 2016-13, “Financial Instruments~~2020-01, “Investments - ~~Credit Losses~~Equity Securities (Topic ~~326): Measurement of Credit Losses on Financial Instruments,” which requires the Company to measure~~321), Investments - Equity Method and ~~recognize expected credit losses for financial assets held~~Joint Ventures (Topic 323), and not accounted for at fair value through net income. In November 2018, April 2019 and May 2019, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses,” “ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses,” “Topic 815, Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic ~~825, Financial Instruments,~~815.” ~~and “ASU No. 2019-05, Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief,” which provided additional implementation guidance on the previously issued ASU.~~ 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. The ASU requires a modified retrospective~~2020, and interim periods within those fiscal years. Early adoption ~~method.~~is permitted. The Company ~~is still evaluating~~does not expect the ~~impact~~adoption of ~~adoption~~ASU 2020-01 to have a material impact on its financial ~~statements and disclosures.~~statements.

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

1110

~~Note 2: Investments (Restated)~~

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 and they are recorded at fair value.~~markets. The investments in debt securities, ~~have maturities~~which include municipal bonds and bond funds, mature between ~~September 2019~~March 2021 and January 2044. The Company uses the average cost method to determine the cost of equity securities sold with any unrealized gains or losses reported in ~~each~~the respective period’s earnings. Unrealized gains and losses on debt securities are excluded from earnings and reported separately as a component of stockholder’s equity. Dividend and interest income are reported as earned.

As of July 31, ~~2019~~2020 and April 30, ~~2019,~~2020, investments consisted of the following:

			Gross		Gross							Gross		Gross
Investments at	Cost		Unrealized		Unrealized			Fair		Cost		Unrealized		Unrealized			Fair
July 31, 2019	Basis		Gains		Losses			Value
July 31, 2020										Basis		Gains		Losses			Value
Municipal bonds	$	5,475,000	$	117,000	$	(43,000	)	$	5,549,000	$	5,284,000	$	180,000	$	(38,000	)	$	5,426,000
Corporate bonds		26,000		—		—			26,000
REITs		89,000		3,000		(9,000	)		83,000		112,000		—		(36,000	)		76,000
Equity securities		16,729,000		4,252,000		(260,000	)		20,721,000		17,101,000		5,000,000		(628,000	)		21,473,000
Money markets and CDs		1,278,000		—		—			1,278,000		682,000		—		—			682,000
Total	$	23,597,000	$	4,372,000	$	(312,000	)	$	27,657,000	$	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, 2019	Basis		Gains		Losses			Value
April 30, 2020										Basis		Gains		Losses			Value
Municipal bonds	$	5,459,000	$	79,000	$	(55,000	)	$	5,483,000	$	5,271,000	$	80,000	$	(89,000	)	$	5,262,000
Corporate bonds		26,000		—		—			26,000		26,000		—		—			26,000
REITs		89,000		1,000		(6,000	)		84,000		112,000		—		(44,000	)		68,000
Equity securities		16,618,000		4,143,000		(296,000	)		20,465,000		17,119,000		3,446,000		(1,180,000	)		19,385,000
Money markets and CDs		1,233,000		—		—			1,233,000		581,000		—		—			581,000
Total	$	23,425,000	$	4,223,000	$	(357,000	)	$	27,291,000	$	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~~statements of ~~Operations~~income in the period of the ~~change, and debt securities are carried at fair value on the balance sheet with changes in fair value recorded as unrealized gains or (losses) in the Statement of Comprehensive Income.~~change. Upon the disposition of a marketable security, the Company records a realized gain or (loss) on the Company’s statements of operations. On May 1, 2018, as a result of the adoption of ASU 2016-01 – Financial Instruments, the Company reclassified $2,424,000 of net unrealized gains on marketable securities, that were formerly classified as available-for-sale securities before the adoption of the new standard, from Accumulated Other Comprehensive Income to Retained Earnings.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 onone 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 recorded an impairment loss of ~~$34,000~~$27,000 for the quarter ended July 31, ~~2019.~~2020. For the prior quarter ended July 31, ~~2018, management did not need to record any~~2019, an impairment ~~losses.~~loss of $34,000 was recorded.

1211

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 quarter ended July 31, 2020 and were $9,000 for the same quarter the prior year.

The following table shows the investments with unrealized losses that are not deemed to be “other-than-temporarily impaired”, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at July 31, ~~2019~~2020 and April 30, ~~2019,~~2020, respectively.

Unrealized Loss Breakdown by Investment Type at July 31, ~~2019~~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	$	—	$	—		$	448,000	$	(43,000	)	$	448,000	$	(43,000	)	$	62,000	$	—		$	342,000	$	(38,000	)	$	404,000	$	(38,000	)
REITs		—		—			30,000		(9,000	)		30,000		(9,000	)		48,000		(26,000	)		28,000		(10,000	)		76,000		(36,000	)
Equity securities		1,975,000		(147,000	)		729,000		(113,000	)		2,704,000		(260,000	)		4,148,000		(478,000	)		1,348,000		(150,000	)		5,496,000		(628,000	)
Total	$	1,975,000	$	(147,000	)	$	1,207,000	$	(165,000	)	$	3,182,000	$	(312,000	)	$	4,258,000	$	(504,000	)	$	1,718,000	$	(198,000	)	$	5,976,000	$	(702,000	)

Unrealized Loss Breakdown by Investment Type at April 30, ~~2019~~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	$	772,000	$	(4,000	)	$	580,000	$	(50,000	)	$	1,352,000	$	(54,000	)	$	2,203,000	$	(42,000	)	$	484,000	$	(47,000	)	$	2,687,000	$	(89,000	)
REITs		—		—			32,000		(6,000	)		32,000		(6,000	)		43,000		(30,000	)		24,000		(14,000	)		67,000		(44,000	)
Equity securities		932,000		(102,000	)		1,652,000		(195,000	)		2,584,000		(297,000	)		5,496,000		(866,000	)		1,651,000		(314,000	)		7,147,000		(1,180,000	)
Total	$	1,704,000	$	(106,000	)	$	2,264,000	$	(251,000	)	$	3,968,000	$	(357,000	)	$	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 July 31, ~~2019.~~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 July 31, ~~2019.~~
2020.

~~Note 3: Inventories~~

Note 3:

Inventories

Inventories at July 31, ~~2019~~2020 and April 30, ~~2019~~2020 consisted of the following:

							July 31,			April 30,
	July 31, 2019			April 30, 2019			2020			2020

Raw materials	$	3,878,000		$	3,644,000		$	4,657,000		$	4,233,000
Work in process		368,000			389,000			421,000			402,000
Finished goods		715,000			641,000			568,000			606,000
		4,961,000			4,674,000			5,646,000			5,241,000
Less: allowance for obsolete inventory		(98,000	)		(91,000	)		(139,000	)		(138,000	)
Inventories, net	$	4,863,000		$	4,583,000		$	5,507,000		$	5,103,000

~~Note 4: Business Segments~~

Note 4:

Business Segments

The following is financial information relating to industry segments:

	July 31,				July 31,
	2019		2018		2020		2019
Net revenue:
Security alarm products	$	2,830,000	$	2,150,000	$	3,114,000	$	2,830,000
Cable & wiring tools		536,000		679,000		800,000		536,000
Other products		186,000		600,000		133,000		186,000
Total net revenue	$	3,552,000	$	3,429,000	$	4,047,000	$	3,552,000

Income from operations:
Security alarm products	$	725,000	$	485,000	$	912,000	$	725,000
Cable & wiring tools		137,000		153,000		235,000		137,000
Other products		48,000		135,000		39,000		48,000
Total income from operations	$	910,000	$	773,000	$	1,186,000	$	910,000

Depreciation and amortization:
Security alarm products	$	23,000	$	10,000	$	22,000	$	23,000
Cable & wiring tools		31,000		31,000		31,000		31,000
Other products		20,000		27,000		12,000		20,000
Corporate general		15,000		15,000		21,000		15,000
Total depreciation and amortization	$	89,000	$	83,000	$	86,000	$	89,000

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

Identifiable assets: July 31, 2019 April 30, 2019
Security alarm products $ 6,369,000 $ 6,179,000
Cable & wiring tools 2,725,000 2,713,000
Other products 864,000 842,000
Corporate general 34,088,000 33,293,000
Total assets $ 44,046,000 $ 43,027,000

	July 31, 2020		April 30, 2020
Identifiable assets:
Security alarm products	$	7,391,000	$	7,150,000
Cable & wiring tools		3,152,000		2,684,000
Other products		440,000		724,000
Corporate general		36,366,000		33,204,000
Total assets	$	47,349,000	$	43,762,000

~~Note 5: Earnings per Share (Restated)~~

Note 5:

Earnings per Share

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

For the Three Months Ended July 31,
Originally
Filed 2019 Adjustment
2019 Restated 2019
Numerator
Net income $ 866,000 $ 110,000 $ 976,000

Denominator
Weighted average common shares outstanding, basic 4,956,389 — 4,956,389
Convertible Preferred Stock 20,500 — 20,500
Weighted average common shares outstanding, diluted 4,976,889 — 4,976,889
Net Income per share - Basic $ 0.17 $ 0.03 $ 0.20
Income per shares - Diluted $ 0.17 $ 0.03 $ 0.20

	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 Three Months Ended July 31,
Originally
Filed 2018 Adjustment
2018 Restated 2018
Numerator
Net income $ 617,000 $ 308,000 $ 925,000

Denominator
Weighted average common shares outstanding, basic 4,967,580 — 4,967,580
Convertible Preferred Stock 20,500 — 20,500
Weighted average common shares outstanding, diluted 4,988,080 — 4,988,080
Net Income per share - Basic $ 0.12 $ 0.07 $ 0.19
Income per shares - Diluted $ 0.12 $ 0.07 $ 0.19

	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

~~Note 6: 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)~~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 ~~quarter~~quarters ending July 31, ~~2019~~2020 and ~~2018,~~2019 respectively.

Note 7:

Fair Value Measurements

~~Note 7: 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 July 31, ~~2019,~~2020, our investments consisted of money markets, ~~certificates of deposits (CDs),~~ publicly traded equity securities, real estate investment trusts (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 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
July 31, 2019
Level 1 Level 2 Level 3 Total
Assets:
Municipal Bonds $ — $ 5,549,000 $ — $ 5,549,000
Corporate Bonds 26,000 — — 26,000
REITs — 83,000 — 83,000
Equity Securities 20,721,000 — — 20,721,000
Money Markets and CDs 1,278,000 — — 1,278,000
Total fair value of assets measured on a recurring basis $ 22,025,000 $ 5,632,000 $ — $ 27,657,000

Assets Measured at Fair Value on a Recurring Basis as of
April 30, 2019
Level 1 Level 2 Level 3 Total
Assets:
Municipal Bonds $ — $ 5,483,000 $ — $ 5,483,000
Corporate Bonds 26,000 — — 26,000
REITs — 84,000 — 84,000
Equity Securities 20,465,000 — — 20,465,000
Money Markets and CDs 1,233,000 — — 1,233,000
Total fair value of assets measured on a recurring basis $ 21,724,000 $ 5,567,000 $ — $ 27,291,000

	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 8 Subsequent Events~~

Note 9

Subsequent Events

None

~~Note 9 Correction of Previously Issued Financial Statements~~

Subsequent to the issuance of its Quarterly Report on SEC Form 10-Q for the three months ended July 31, 2019, the Company discovered an error due to missing a change in accounting related to other comprehensive income (loss) as reflected in the implementation of ASU 2016-01, which became effective for the Company on May 1, 2018. Under the new guidance in ASU 2016-01 the Company should record unrealized gains and losses in the value of the equity securities it owns in the statements of operations, whereas, under previous guidance (and in the Original Form 10-Q) those unrealized gains and losses were recorded as accumulated other comprehensive income (loss).

This restatement includes i) recording a one-time adjustment to retained earnings to reclassify the accumulated other comprehensive loss related to unrealized gains on equity securities as of May 1, 2018 and ii) recording an unrealized gain on marketable securities representing the value change in the equities for the three months ended July 31, 2019 and 2018.

~~No entries to correct for this restatement have any impact on our cash position, liquidity, or operations.~~

~~The tables below reflect the effect of restatement on the Company’s financial statements for the quarter:~~

As of July 31, 2019
Original Adjustment As Restated
Balance Sheet
Deferred Income Taxes $ 1,247,000 $ (7,000 ) $ 1,240,000
Total Liabilities 3,542,000 (7,000 ) 3,535,000

Accumulated other comprehensive income $ 2,890,000 $ (2,841,000 ) $ 49,000
Retained Earnings 39,011,000 2,848,000 41,859,000
Total stockholder’s Equity $ 40,504,000 $ 7,000 $ 40,511,000

As of April 30, 2019
Original Adjustment As Restated
Balance Sheet
Accumulated other comprehensive income $ 2,752,000 $ (2,738,000 ) $ 14,000
Retained Earnings 38,145,000 2,738,000 40,883,000

For the Three Months Ended July 31, 2019
Original Adjustment As Restated
Income Statement
Unrealized Gain (Loss) on Equity Securities $ — $ 145,000 $ 145,000
Total Other Income (Expense) $ 243,000 $ 145,000 $ 388,000

Income Before Provisions for Income Taxes 1,153,000 145,000 1,298,000

Deferred tax expense (benefit) (7,000 ) 35,000 28,000
Total Income Tax Expense 287,000 42,000 329,000

Net Income $ 866,000 $ 110,000 $ 976,000

Earnings Per Share of Common Stock
Basic $ 0.17 $ 0.03 $ 0.20
Diluted $ 0.17 $ 0.03 $ 0.20

For the Three Months Ended July 31, 2018
Original Adjustment As Restated
Income Statement
Unrealized Gain (Loss) on Equity Securities $ — $ 432,000 $ 432,000
Total Other Income (Expense) $ 128,000 $ 432,000 $ 560,000

Income Before Provisions for Income Taxes 901,000 432,000 1,333,000

Deferred tax expense (benefit) 37,000 124,000 161,000
Total Income Tax Expense 284,000 124,000 408,000

Net Income $ 617,000 $ 308,000 $ 925,000

Earnings Per Share of Common Stock
Basic $ 0.12 $ 0.07 $ 0.19
Diluted $ 0.12 $ 0.07 $ 0.19

For the Three Months Ended July 31, 2019
Original Adjustment As Restated
Statement of Comprehensive Income
Net Income $ 866,000 $ 110,000 $ 976,000

Other Comprehensive Income, net of Tax
Unrealized gain (loss) on securities
Unrealized holding gains arising during period 324,000 (275,000 ) 49,000
Less: reclassification adjustment for (gains) losses included in net income (130,000 ) 130,000 —
Income tax expense related to other comprehensive income (56,000 ) 42,000 (14,000 )
Other Comprehensive Income (Loss) $ 138,000 $ (103,000 ) $ 35,000

Comprehensive Income $ 1,004,000 $ 7,000 $ 1,011,000

For the Three Months Ended July 31, 2018
Original Adjustment As Restated
Statement of Comprehensive Income
Net Income $ 617,000 $ 308,000 $ 925,000

Other Comprehensive Income, net of Tax
Unrealized gain (loss) on securities
Unrealized holding gains arising during period 607,000 (387,000 ) 220,000
Less: reclassification adjustment for (gains) losses included in net income 44,000
(44,000
) —
Income tax expense related to other comprehensive income (188,000 ) 125,000 (63,000 )
Other Comprehensive Income (Loss) $ 463,000 $ (306,000 ) $ 157,000

Comprehensive Income $ 1,080,000 $ 2,000 $
1,082,000

Original Adjustment As Restated
Statement of Stockholders’ Equity
Balance, April 30, 2019 $ 39,553,000 $ — $ 39,553,000
Purchase of common stock (53,000 ) — (53,000 )
Unrealized gain (loss), net of tax effect 138,000 (103,000 ) 35,000
Net Income 866,000 110,000 976,000
Balance, July 31, 2019 $ 40,504,000 $ 7,000 $ 40,511,000

Original Adjustment As Restated
Statement of Stockholders’ Equity
Balance, April 30, 2018 $ 37,730,000 $ — $ 37,730,000
Purchase of common stock (5,000 ) — (5,000 )
Impact of adoption of ASU 2016-01 — — —
Unrealized gain (loss), net of tax effect 463,000 (306,000 ) 157,000
Net Income 617,000 308,000 925,000
Balance, July 31, 2018 $ 38,805,000 $ 2,000 $ 38,807,000

For the Three Months Ended July 31, 2019
Original Adjustment As Restated
Statement of Cash Flows
Cash Flows From Operating Activities
Net Income $ 866,000 $ 110,000 $ 976,000
Adjustment to reconcile net income to net cash provided operating activities
Unrealized (gain) loss on equity securities — (145,000 ) (145,000 )
Deferred income taxes (7,000 ) 35,000 28,000
Net cash provided by (used in) operating activities $ 1,139,000 $ — $ 1,139,000

For the Three Months Ended July 31, 2018
Original Adjustment As Restated
Statement of Cash Flows
Cash Flows From Operating Activities
Net Income $ 617,000 $ 308,000 $ 925,000
Adjustment to reconcile net income to net cash provided operating activities
Unrealized (gain) loss on equity securities — (432,000 ) (432,000 )
Deferred income taxes 37,000 124,000 161,000
Net cash provided by (used in) operating activities $ 890,000 $ — $ 890,000

For the Three Months Ended July 31,
Originally
Filed 2019 Adjustment 2019 Restated 2019
Numerator
Net income $ 866,000 $ 110,000 $ 976,000
Denominator
Weighted average common shares outstanding, basic 4,956,389 — 4,956,389
Convertible Preferred Stock 20,500 — 20,500
Weighted average common shares outstanding, diluted 4,976,889 — 4,976,889
Net Income per share - Basic $ 0.17 $ 0.03 $ 0.20
Income per shares - Diluted $ 0.17 $ 0.03 $ 0.20

For the Three Months Ended July 31,
Originally
Filed 2018 Adjustment 2018 Restated 2018
Numerator
Net income $ 617,000 $ 308,000 $ 925,000
Denominator
Weighted average common shares outstanding, basic 4,967,580 — 4,967,580
Convertible Preferred Stock 20,500 — 20,500
Weighted average common shares outstanding, diluted 4,988,080 — 4,988,080
Net Income per share - Basic $ 0.12 $ 0.07 $ 0.19
Income per shares - Diluted $ 0.12 $ 0.07 $ 0.19

GEORGE RISK INDUSTRIES, INC.

PART I. FINANCIAL INFORMATION

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

21Item 2:

Management Discussion and Analysis of Financial Condition and Results of Operations

MANAGEMENT DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS ~~(Restated)~~

This Quarterly Report on Form ~~10-Q/A,~~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 current information becomes available in the future.

The following discussion should be read in conjunction with the attached condensed financial statements, and with the Company’s audited financial statements and discussion for the fiscal year ended April 30, ~~2019.~~2020.

Executive Summary

The Company’s performance ~~has increased through~~improved during the ~~first~~ quarter ~~in comparison~~ended July 31, 2020 as compared to the ~~prior~~ quarter ~~last year. In comparison to the most recent prior quarter, performance has stayed steady with similar sales figures.~~ended July 31, 2019. The main ~~difference between this year’s quarter and last year’s quarter~~reason for the increase is ~~that~~the closure of a competitor at the end of calendar year 2019, resulting in a major uptick in sales. As a result of the increased demand, the Company ~~doesn’t have~~is experiencing a ~~big~~sizable back order ~~log and is~~log; however, management has been able to ~~get inventory~~increase inventory. Management now intends to focus on ramping up production to meet customer’s needs in ~~the stockroom which allows the Company to ship products out on~~a timely ~~basis.~~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. ~~Also, we~~We also have new products that are scheduled to enter the marketplace by the end of the calendar year. Challenges in the coming months include continuing to get product out to customers in a ~~timelier manner.~~timely manner and dealing with COVID-19 pandemic restrictions. Raw material prices are also a concern with tariffs being levied by the US government and other factors. Management continues to work at keeping the facilities running leaner and more profitable than ever before.

Results of Operations

	●	Net sales for the quarter ended July 31, 2020 showed a ~~3.59%~~13.94% increase over the same period in the prior year. 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 running smoothly. ~~The Company has also seen some old customers buying from us again. Management believes that this may be in relation to price increases from our competitors~~

	●	Cost of goods sold ~~saw a decrease~~decreased from ~~52.52%~~49.80% of sales in the prior year, to ~~49.80%~~48.23% in the current quarter, which is inside of Management’s goal to keep labor and other manufacturing expenses within the range of 45 to 50%. The decreased cost of goods sold percentage is a reflection of ~~having better~~ training ~~and working~~initiatives resulting in more ~~efficiently when making product.~~efficient production.

●

Operating expenses ~~have~~ increased by ~~$18,000~~$36,000 when comparing the current year quarter to the same quarter for the prior ~~year, but~~year; however, the percentage ~~in relation to~~of net sales decreased to ~~24.58%~~22.46% for the quarter ended July 31, ~~2019 as~~2020 compared to ~~24.93%~~24.58% for the corresponding quarter last year. The dollar amount increase is the result of increased personnel and commission expense related to the increase in net sales; however, the Company ~~has been able to keep~~maintained the ratio of operating expenses to net sales at less than 30% ~~of net sales for many years now; however, the actual dollar amount increase~~, which is ~~because of increased commission amounts (since sales have increased) and additional labor costs for hiring new employees and wage increases.~~in line with historical ratios.

	●	Income from operations for the quarter ended July 31, 2019 was at ~~$910,000,~~$1,186,000, which is a ~~17.72%~~30.33% increase from the corresponding quarter last year, which had income from operations of ~~$773,000.~~$910,000.

	●	Other income and expenses 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 as compared to a $560,000 gain for the quarter ended July 31, 2018. Investments in marketable securities are presented at fair value and an unrealized gain or loss is recorded within the statements of operations, a non-cash entry, at each period beginning May 1, 2018 and previously recorded unrealized gain or loss in other comprehensive income (loss).2019. For the three months ended July 31, ~~2019,~~2020, $2,114,000 of unrealized gains from equity securities were recorded, compared to the $145,000 of unrealized gains onfrom equity securities ~~were recorded and $432,000 of unrealized gains on equity securities were~~ recorded for the three months ended July 31, ~~2018.~~2019. The remainder of the increase is primarily due to ~~gains realized from the sale of investments as compared to losses sustained during the same quarter last year.~~dividend and interest income.

	●	~~Provision~~The Company’s provision for income taxes showed ~~a decrease~~an increase of ~~$79,000, down~~$626,000 from ~~$408,000~~$322,000 in the quarter ended July 31, ~~2018~~2019 to ~~$329,000~~$948,000 for the quarter ended July 31, ~~2019. The decrease~~2020. This increase is primarily due to increased deferred taxes resulting from a ~~direct result of~~much larger unrealized gain for the ~~adoption of ASU 2016-01.~~current quarter.

	●	In turn, net income for the quarter ended July 31, ~~2019~~2020 was ~~$969,000,~~$2,492,000, a ~~4.76%~~155.33% increase from the corresponding quarter last year, which showed net income of ~~$925,000.~~$976,000.

	●	Earnings per share for the quarter ended July 31, ~~2019~~2020 were ~~$0.20~~$0.50 per common share and ~~$0.19~~$0.20 per common share for the quarter ended July 31, ~~2018.~~2019.

Liquidity and capital resources

~~Operating~~

		Operating

	●	Net cash increased ~~$794,000~~$1,033,000 during the quarter ended July 31, ~~2019~~2020 as compared to an increase of ~~$653,000~~$794,000 during the corresponding quarter last year.

	●	Accounts receivable decreased ~~$163,000~~$49,000 for the quarter ending July 31, ~~2019~~2020 compared with a ~~$234,000~~$163,000 decrease for the same quarter last year. The smaller decrease in accounts receivable is directly attributable to some of 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 and to keep past due accounts to a minimum. An analysis of accounts shows that there were only ~~5.15%~~0.63% that were over 90 days at July 31, ~~2019.~~2020.

	●	Inventories increased ~~$288,000~~$405,000 during the current quarter as compared to a ~~$389,000~~$288,000 increase last year. The ~~smaller~~larger increase is primarily due to the fact that the Company ~~selling~~is stocking up on more ~~finished goods at~~raw materials due to increased orders. In addition, the Company is keeping more inventory on hand in order to reduce the likelihood of running into a ~~slightly faster rate than it is replenishing~~shortage on some major raw ~~materials.~~materials, such as we experienced last year.

	●	AtFor the quarter ended July 31, ~~2019~~2020 there was a ~~$79,000~~$94,000 decrease in prepaid expenses ~~and at~~compared to a decrease of $79,000 for the quarter ended July 31, ~~2018, there was a $166,000 decrease.~~2019. The current decrease is due to ~~capitalizing~~less prepayment of raw materials and running through some ~~projects in process.~~of our prepaid agreements without needing to renew them.

	●	Accounts payable shows an increase of ~~$55,000~~$117,000 for the quarter ended July 31, ~~2019~~2020 compared to ~~a decrease~~an increase of ~~$7,000~~$55,000 for the same quarter the year before, primarily due to increases in inventory of raw materials and timing issues. Management strives to pay all payables within terms, unless there is a problem with the merchandise.

	●	Accrued expenses decreased ~~$66,000~~$61,000 for the current quarter as compared to a ~~$172,000~~$66,000 decrease for the quarter ended July 31, ~~2018.~~2019. The difference in the amounts is primarily due to timing ~~issues of when pay periods end.~~issues.

	●	Income tax payable for the quarter ended July 31, ~~2019~~2020 increased $346,000, compared to a $289,000 ~~while there was a $244,000 decrease towards income tax overpayment~~increase for the quarter ended July 31, ~~2018.~~2019. The current increase is due to ~~waiting on tax refunds to be sent and not having to pay income~~larger tax estimates ~~yet.~~in relation to increased income.

~~Investing~~


		Investing

	●	~~As for our investment activities, the~~The Company purchased ~~$169,000~~$95,000 of property and equipment during the current fiscal quarter. In comparison, ~~with~~$169,000 was spent on purchases of property and equipment during the corresponding quarter last ~~year, there were not any purchases of property and equipment.~~year.

	●	~~Additionally, the~~The Company continues to purchase marketable securities, which include municipal bonds and quality stocks. Cash spent on purchases of marketable securities for the quarter ended July 31, ~~2019~~2020 was ~~$132,000~~$111,000 compared to ~~$233,000~~$132,000 spent during the quarter ended July 31, ~~2018.~~2019. We continue to use “money manager” accounts for most stock transactions. By doing this, the Company gives an independent third party firm, who are experts in this field, permission to buy and sell stocks at will. The Company pays a quarterly service fee based on the value of the investments.

~~Financing~~


		Financing

	●	~~Furthermore, the~~The Company continues to purchase back common stock when the opportunity arises. For the quarter ended July 31, ~~2019,~~2020, the Company ~~purchased $53,000 worth of~~did not buyback any treasury stock, ~~along with~~compared to the ~~$5,000 spent in~~$53,000 of common stock purchased during the same period the prior year.

2320

~~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, 2019 July 31, 2018
Working capital
(current assets – current liabilities) $ 38,750,000 $ 36,894,000
Current ratio
(current assets / current liabilities) 17.882 18.760
Quick ratio
((cash + investments + AR) / current liabilities) 15.622 16.567

	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

New Product Development

The Company and its’ engineering department perpetually work to develop enhancements to current product lines, develop new products which complement existing products, and look for products that are well suited to our distribution network and manufacturing capabilities. Items currently in various stages of the development process include:

	●	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.

	●	~~A new~~An updated version of the pool access alarm is currently going through 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.
	●	~~Work continues on high security switches. They have a triple biased high security switch design nearly complete and an adjustable magnet design was completed for recessed mounting applications.~~
	●	Wireless technology is a main area of focus for product development. We are 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.

	●	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 ~~are ready to launch~~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 ¾” and 1” steel door contacts.

	●	There have been several new ~~product in~~products that have been introduced for our cable and wiring tools ~~segment,~~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 ~~Grabbit GR5. This is an ultra-compact, lightweight telescoping pole that extends 5’~~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 ~~grab or push a wire. The GR5 is~~go along with the ~~newest member~~standard clear lights. These colored lights are placed on FiberFuse wire running rods which allows easy location of the ~~Grabbit family - joining~~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 10’, 12’ and 18’ versions. The Grabbits are an indispensable tool when running wire through drop ceilings and difficult-to-access areas. A Z-tip, J-tip and LED light are included with the Grabbits which are interchangeable depending on the situation.longevity of these new lights.

Other Information

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

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 ~~February~~June 2016, the FASB issued ASU ~~2016-02, “Leases (Topic 842)~~No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” ~~(“ASU 2016-02”)~~, which ~~provides guidance for accounting for leases. ASU 2016-02~~ requires ~~lessees~~entities to ~~classify leases as either finance or operating leases and to record~~use a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of the lease classification. The lease classification will determine whether the lease expense is recognizedforward looking approach based on ~~an effective interest rate method or~~expected losses to estimate credit losses on ~~a straight-line basis over~~certain types of financial instruments, including trade receivables. The FASB has subsequently issued updates to the ~~term of the lease. Accounting for lessors remains largely unchanged from current GAAP. ASU 2016-02~~standard to provide additional clarification on specific topics. Topic 326 is effective for ~~the Company~~fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. We have applied this guidance, as of May 1, 2019. Early adoption is permitted. In July 2018, the FASB issued ASU No. 2018-10 “Codification Improvements to Topic 842, Leases” (“ASU 2018-10”) and ASU No. 2018-11 “Leases (Topic 842) Targeted Improvements” (“ASU 2018-11”) and ASU 2018-20, “Narrow-Scope Improvements for Lessors”. ASU 2018-10 provides certain amendments that affect narrow aspects2020, using a modified-retrospective approach. The application of ~~the~~this guidance issued in ASU 2016-02. ASU 2018-11 allows all entities adopting ASU 2016-02 to choose an additional (and optional) transition method of adoption, under which an entity initially applies the new leases standard at the adoption date and recognizesdid not require a ~~cumulative-effect~~cumulative effect adjustment to ~~the opening balance of~~ retained earnings in the period of adoption. ASU 2018-11 also allows lessors to not separate non-lease components from the associated lease component if certain conditions are met. During the first quarter of 2019, the FASB issued ASU 2019-01, Leases (Topic 842) to amend ASU 2016-02. This amendment exempts both lessees and lessors from having to provide certain prior year interim disclosure information in the fiscal year in which a company adopts the new leases standard. The Company has adopted the ASUs in the first quarter of fiscal 2020 and the Company’s accounting systems have been upgraded to comply with the requirements of the new standard, however, the adoption of ASU 2016-02 did not have a material ~~impact~~effect on ~~the Company’s financial statements and related disclosures because leases are not material to the~~our financial statements.

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

2522

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.

~~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 July 31, ~~2019.~~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. ~~A new accounting professional~~For the quarter ending July 31, 2020 the Company did not have a Controller, but this position was ~~hired~~filled in ~~2018 to fill the Controller position.~~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 for 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 ~~restated~~ financial statements included in this ~~restated~~ 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 July 31, ~~2019~~2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

2623

GEORGE RISK INDUSTRIES, INC.

PART II. OTHER INFORMATION

~~Item 1. Legal Proceedings~~

Item 1.

Legal Proceedings

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 first quarter of fiscal year ~~2020.~~2021.

Period		Number of shares repurchased
May 1, ~~2019~~2020 – May 31, ~~2019~~	2020		-0-
June 1, ~~2019~~2020 – June 30, ~~2019~~2020			~~300~~	-0-
July 1, ~~2019~~2020 – July 31, ~~2019~~2020			~~6,000~~	-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
	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.

2724

SIGNATURES

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

	George Risk Industries, Inc.
	(Registrant)

Date ~~May 22,~~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

2825

	July 31, 2019			July 31, 2018
	(Restated)			(Restated)

Net Sales	$	3,552,000		$	3,429,000
Less: Cost of Goods Sold		(1,769,000	)		(1,801,000	)
Gross Profit		1,783,000			1,628,000

Operating Expenses:
General and Administrative		297,000			286,000
Sales		557,000			555,000
Engineering		14,000			9,000
Rent Paid to Related Parties		5,000			5,000
Total Operating Expenses		873,000			885,000

Income From Operations		910,000			773,000

Other Income (Expense)
Other		1,000			3,000
Dividend and Interest Income		193,000			193,000
Unrealized gain (loss) on equity securities		145,000			432,000
Gain (Loss) on Sale of Investments		49,000			(68,000	)
Total Other Income		388,000			560,000

Income Before Provisions for Income Taxes		1,298,000			1,333,000

Provisions for Income Taxes
Current Expense		294,000			247,000
Deferred tax expense		28,000			161,000
Total Income Tax Expense		322,000			408,000

Net Income	$	976,000		$	925,000

Basic Earnings Per Share of Common Stock	$	0.20		$	0.19
Diluted Earnings Per Share of Common Stock	$	0.20		$	0.19

Weighted Average Number of Common Shares Outstanding		4,956,389			4,967,580
Weighted Average Number of Shares Outstanding (Diluted)		4,976,889			4,988,080

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

	For the Three Months Ended July 31,
	Originally Filed 2019		Adjustment 2019		Restated 2019
Numerator
Net income	$	866,000	$	110,000	$	976,000

Denominator
Weighted average common shares outstanding, basic		4,956,389		—		4,956,389
Convertible Preferred Stock		20,500		—		20,500
Weighted average common shares outstanding, diluted		4,976,889		—		4,976,889
Net Income per share - Basic	$	0.17	$	0.03	$	0.20
Income per shares - Diluted	$	0.17	$	0.03	$	0.20

	For the Three Months Ended July 31,
	Originally Filed 2018		Adjustment 2018		Restated 2018
Numerator
Net income	$	617,000	$	308,000	$	925,000

Denominator
Weighted average common shares outstanding, basic		4,967,580		—		4,967,580
Convertible Preferred Stock		20,500		—		20,500
Weighted average common shares outstanding, diluted		4,988,080		—		4,988,080
Net Income per share - Basic	$	0.12	$	0.07	$	0.19
Income per shares - Diluted	$	0.12	$	0.07	$	0.19

	As of July 31, 2019
	Original		Adjustment			As Restated
Balance Sheet
Deferred Income Taxes	$	1,247,000	$	(7,000	)	$	1,240,000
Total Liabilities		3,542,000		(7,000	)		3,535,000

Accumulated other comprehensive income	$	2,890,000	$	(2,841,000	)	$	49,000
Retained Earnings		39,011,000		2,848,000			41,859,000
Total stockholder’s Equity	$	40,504,000	$	7,000		$	40,511,000

	As of April 30, 2019
	Original		Adjustment			As Restated
Balance Sheet
Accumulated other comprehensive income	$	2,752,000	$	(2,738,000	)	$	14,000
Retained Earnings		38,145,000		2,738,000			40,883,000

	For the Three Months Ended July 31,
	Originally Filed 2019		Adjustment 2019		Restated 2019
Numerator
Net income	$	866,000	$	110,000	$	976,000
Denominator
Weighted average common shares outstanding, basic		4,956,389		—		4,956,389
Convertible Preferred Stock		20,500		—		20,500
Weighted average common shares outstanding, diluted		4,976,889		—		4,976,889
Net Income per share - Basic	$	0.17	$	0.03	$	0.20
Income per shares - Diluted	$	0.17	$	0.03	$	0.20

	For the Three Months Ended July 31,
	Originally Filed 2018		Adjustment 2018		Restated 2018
Numerator
Net income	$	617,000	$	308,000	$	925,000
Denominator
Weighted average common shares outstanding, basic		4,967,580		—		4,967,580
Convertible Preferred Stock		20,500		—		20,500
Weighted average common shares outstanding, diluted		4,988,080		—		4,988,080
Net Income per share - Basic	$	0.12	$	0.07	$	0.19
Income per shares - Diluted	$	0.12	$	0.07	$	0.19