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 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, 2022.





Executive Summary

The Company's performance remained steady during the quarter ended July 31, 2022 as compared to the quarter ended July 31, 2021. Although sales have increased when comparing to the same quarter last year, overall net income is down because realized and unrealized gains on investments are showing losses in the current quarter, while for the same quarter last year both of those categories were income amounts. Also, gross profit and income from operations are lower when comparing to the same quarter last year. This is because of increased cost of raw materials and labor. The uptick in sales is mainly due to a price increase that implemented in January 2022. This was done to offset the increases in raw material and labor costs that the Company has incurred to continue to do business. The Company is still feeling the increased demand of having one of our major competitors close its doors at the end of calendar year 2019. The Company still has a considerable back-order log and there has been times that certain raw materials have not been available. Opportunities include focusing on ramping up production to meet customer's needs to get product to them in a timely manner, which includes looking into more automation, and to continue looking at businesses that might be a good fit to purchase. We also have new products that are scheduled to enter the marketplace by the end of the calendar year. Challenges in the coming months include continuing to get product out to customers in a timely manner and dealing with COVID-19 pandemic restrictions and inflation. Possible COVID-19 challenges include, but are not limited to, price increases and/or delays in the supply chain, reduced sales, workforce interruptions, and economic conditions impacting the stock market. Management continues to work at keeping operations flowing as efficient as possible with the hopes of getting the facilities running leaner and more profitable than ever before.





Results of Operations



  ? Net sales for the quarter ended July 31, 2022 showed a 5.15% increase over the
    same period in the prior year. The Company saw increased sales resulting
    primarily from a competitor no longer selling competing products and
    implementing a price increase that became effective on January 1, 2022.
    Management also believes that sales continue to grow due to our ongoing
    commitment to outstanding customer service and our ability to customize
    products.

  ? Cost of goods sold increased from 46.78% of sales in the prior year, to 51.00%
    in the current quarter, which is just outside of Management's goal to keep
    labor and other manufacturing expenses below 50%. The increased cost of goods
    sold percentage is a result of inflation that has afflicted the economy
    recently. Management has seen significant price increases in raw material and
    has had to raise wages to remain competitive in the job market.




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  ? Operating expenses decreased by $20,000 when comparing the current year
    quarter to the same quarter for the prior year. When comparing percentages in
    relation to net sales, the operating expenses decreased to 20.86% for the
    quarter ended July 31, 2022 as compared to 22.34% for the corresponding
    quarter last year. The dollar amount decrease is the result of decreased
    general and administration personnel. The Company maintained the ratio of
    operating expenses to net sales at less than 30%, which is in line with
    historical ratios.

  ? Income from operations for the quarter ended July 31, 2022 was at $1,466,000,
    which is a 4.18% decrease from the corresponding quarter last year, which had
    income from operations of $1,530,000.

  ? Other income and expenses showed a $102,000 loss for the quarter ended July
    31, 2022 as compared to a $817,000 gain for the quarter ended July 31, 2021.
    For the three months ended July 31, 2022, $189,000 of unrealized losses from
    equity securities were recorded, compared to $420,000 of unrealized gains from
    equity securities recorded for the three months ended July 31, 2021. The
    remainder of the decrease is primarily due to losses on sales of investments.

  ? The Company's provision for income taxes showed a decrease of $288,000 from
    $601,000 in the quarter ended July 31, 2021 to $313,000 for the quarter ended
    July 31, 2022. This decrease is primarily due to decreased deferred taxes
    resulting from unrealized losses on equity securities for the current quarter.

  ? In turn, net income for the quarter ended July 31, 2022 was $1,051,000, a
    39.81% decrease from the corresponding quarter last year, which showed net
    income of $1,746,000.

  ? Earnings per share for the quarter ended July 31, 2022 were $0.21 per common
    share and $0.35 per common share for the quarter ended July 31, 2021.

Liquidity and capital resources





    Operating

  ? Net cash increased $1,571,000 during the quarter ended July 31, 2022 as
    compared to an increase of $1,005,000 during the corresponding quarter last
    year. The details are listed below.

  ? Accounts receivable decreased $499,000 for the quarter ending July 31, 2022
    compared with a $154,000 decrease for the same quarter last year. The bigger
    decrease in accounts receivable is directly attributable to an increase in
    sales and customers being able to pay timelier.  Management is always working
    with customers to collect on accounts and to keep past due accounts to a
    minimum. An analysis of accounts receivable shows that 5.24% of the balance
    was over 90 days at July 31, 2022.

  ? Inventories increased $947,000 during the current quarter as compared to a
    $549,000 increase last year. The larger increase is primarily due to the fact
    that the Company is continuing to buy more raw materials due to increased
    orders and that the prices of raw material and labor costs continue to
    increase.




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  ? For the quarter ended July 31, 2022 there was a $317,000 decrease in prepaid
    expenses compared to an increase of $196,000 for the quarter ended July 31,
    2021. The current decrease is due to having inventory delivered during the
    quarter; therefore, having less money in prepayments of raw materials on the
    books.

  ? Accounts payable shows a decrease of $21,000 for the quarter ended July 31,
    2022 compared to a decrease of $236,000 for the same quarter the year before.
    The variance is primarily due to timing differences of when product is
    received. Management strives to pay all payables within terms, unless there is
    a problem with the merchandise.

  ? Accrued expenses increased $121,000 for the current quarter as compared to a
    $99,000 increase for the quarter ended July 31, 2021. The difference in the
    amounts is primarily due to timing of when payroll periods end and increases
    in sales commissions and wages.

  ? Income tax payable for the quarter ended July 31, 2022 increased $409,000,
    compared to a $547,000 increase for the quarter ended July 31, 2021. The
    current smaller increase is due to smaller tax estimates in relation to the
    decreased income amount. Also, the corporate income tax rate in Nebraska
    decreased to 7.5% from 7.81% for the current fiscal year.

    Investing

  ? The Company purchased $74,000 of property and equipment during the current
    fiscal quarter. In comparison, $40,000 was spent on purchases of property and
    equipment during the corresponding quarter last year.

  ? 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, 2022 was $111,000 compared to
    $98,000 spent during the quarter ended July 31, 2021. We continue to use
    "money manager" accounts for most stock transactions. By doing this, the
    Company gives an independent third party firm, who are experts in this field,
    permission to buy and sell stocks at will. The Company pays quarterly service
    fees based on the value of the investments.

    Financing

  ? The Company continues to purchase back common stock when the opportunity
    arises. For the quarter ended July 31, 2022 the Company bought back $2,000
    worth of treasury stock, but for the quarter ended July 31, 2021, the Company
    did not buyback any treasury stock.




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



                                                         Qtr ended           Qtr ended
                                                       July 31, 2022       July 31, 2021
Working capital
(current assets - current liabilities)                $    48,297,000     $    49,401,000
Current ratio
(current assets / current liabilities)                         13.855              15.529
Quick ratio
((cash + current investments + AR) / current
liabilities)                                                   11.207              13.549




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:





  ? Explosion proof contacts that will be UL listed for hazardous locations are in
    development. There has been demand from our customers for this type of high
    security magnetic reed switch.

  ? An updated version of the pool access alarm (PAA) has met electrical listing
    testing (ETL) approval and production has started. 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
    such as instant alarm and a seven second delay.

  ? The Company is developing magnetic contacts which are listed under UL 634
    Level 2. These sensors are for high security applications such as government
    buildings, military use, nuclear facilities, and financial institutions.

  ? 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 monitoring devices which include glass break
    detection, tilt sensing and environmental monitoring. A redesign of our brass
    water valve shut-off system is near completion.




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.





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                          GEORGE RISK INDUSTRIES, INC.



                         PART I. FINANCIAL INFORMATION

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