NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
OCTOBER
31, 2020
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, 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 June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments –
Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which requires entities to
use a forward looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including
trade receivables. The FASB has subsequently issued updates to the standard to provide additional clarification on specific topics.
Topic 326 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. We
have applied this guidance, as of May 1, 2020, using a modified-retrospective approach. The application of this guidance did not
require a cumulative effect adjustment to retained earnings and did not have a material effect on 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 application of this guidance did not have a material effect on our disclosures.
In
January 2020, the FASB issued ASU 2020-01, “Investments - Equity Securities (Topic 321), Investments - Equity Method and
Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323,
and Topic 815.” The ASU is based on a consensus of the Emerging Issues Task Force and is expected to increase comparability
in accounting for these transactions. ASU 2016-01 made targeted improvements to accounting for financial instruments, including
providing an entity the ability to measure certain equity securities without a readily determinable fair value at cost, less any
impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar
investment of the same issuer. Among other topics, the amendments clarify that an entity should consider observable transactions
that require it to either apply or discontinue the equity method of accounting. For public business entities, the amendments in
the ASU are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early
adoption is permitted. The Company does not expect the adoption of ASU 2020-01 to have a material impact on its financial statements.
There
are no other new accounting pronouncements that are expected to have a significant impact on our financial statements.
Note
2 Investments
The
Company has investments in publicly traded equity securities, state and municipal debt securities, real estate investment trusts,
and money markets. The investments in debt securities, which include municipal bonds and bond funds, mature between April 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 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 October 31, 2020 and April 30, 2020, investments consisted of the following:
|
|
|
|
|
Gross
|
|
|
Gross
|
|
|
|
|
Investments at
|
|
Cost
|
|
|
Unrealized
|
|
|
Unrealized
|
|
|
Fair
|
|
October 31, 2020
|
|
Basis
|
|
|
Gains
|
|
|
Losses
|
|
|
Value
|
|
Municipal bonds
|
|
$
|
5,308,000
|
|
|
$
|
163,000
|
|
|
$
|
(41,000
|
)
|
|
$
|
5,430,000
|
|
REITs
|
|
|
112,000
|
|
|
|
—
|
|
|
|
(41,000
|
)
|
|
|
71,000
|
|
Equity securities
|
|
|
17,326,000
|
|
|
|
4,946,000
|
|
|
|
(684,000
|
)
|
|
|
21,588,000
|
|
Money markets and CDs
|
|
|
577,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
577,000
|
|
Total
|
|
$
|
23,323,000
|
|
|
$
|
5,109,000
|
|
|
$
|
(766,000
|
)
|
|
$
|
27,666,000
|
|
|
|
|
|
|
Gross
|
|
|
Gross
|
|
|
|
|
Investments at
|
|
Cost
|
|
|
Unrealized
|
|
|
Unrealized
|
|
|
Fair
|
|
April 30, 2020
|
|
Basis
|
|
|
Gains
|
|
|
Losses
|
|
|
Value
|
|
Municipal bonds
|
|
$
|
5,271,000
|
|
|
$
|
80,000
|
|
|
$
|
(89,000
|
)
|
|
$
|
5,262,000
|
|
Corporate bonds
|
|
|
26,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
26,000
|
|
REITs
|
|
|
112,000
|
|
|
|
—
|
|
|
|
(44,000
|
)
|
|
|
68,000
|
|
Equity securities
|
|
|
17,119,000
|
|
|
|
3,446,000
|
|
|
|
(1,180,000
|
)
|
|
|
19,385,000
|
|
Money markets and CDs
|
|
|
581,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
581,000
|
|
Total
|
|
$
|
23,109,000
|
|
|
$
|
3,526,000
|
|
|
$
|
(1,313,000
|
)
|
|
$
|
25,322,000
|
|
Marketable
securities that are classified as equity securities are carried at fair value on the balance sheets with changes in fair value
recorded as an unrealized gain or (loss) in the statements of income in the period of the change. Upon the disposition of a marketable
security, the Company records a realized gain or (loss) on the Company’s statements of income.
The
Company evaluates all marketable securities for other-than-temporary declines in fair value, which are defined as when the cost
basis exceeds the fair value for approximately one year. The Company also evaluates the nature of the investment, cause of impairment
and number of investments that are in an unrealized position. When an “other-than-temporary” decline is identified,
the Company will decrease the cost of the marketable security to the new fair value and recognize a real loss. The investments
are periodically evaluated to determine if impairment changes are required. As a result of this standard, management recorded
an impairment loss of $52,000 for the quarter, and recorded a loss of $79,000 for the six months ended October 31, 2020. As for
the corresponding periods last year, management recorded an impairment loss of $7,000 for the quarter ended October 31, 2019 and
an impairment loss of $41,000 was recorded for the six-months ended October 31, 2019.
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 October 31, 2020 the Company had sales of equity securities which yielded gross realized
gains of $184,000 and gross realized losses of $110,000. For the same period, sales of debt securities did not yield any gross
realized gains, but gross realized losses of $2,000 were recorded. As for the six-months ended October 31, 2020 the Company had
sales of equity securities which yielded gross realized gains of $286,000 and gross realized losses of $236,000. For the same
six-month period, sales of debt securities did not yield any gross realized gains, but gross realized losses of $6,000 were recorded.
During the quarter ending October 31, 2019, the Company recorded gross realized gains and losses on equity securities of $67,000
and $57,000, respectively, while sales of debt securities did not yield any gross realized gains or losses. During the six-months
ending October 31, 2019, the Company recorded gross realized gains and losses on equity securities of $220,000 and $161,000, 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.
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 October 31, 2020 and April 30, 2020, respectively.
Unrealized
Loss Breakdown by Investment Type at October 31, 2020
|
|
Less than 12 months
|
|
|
12 months or greater
|
|
|
Total
|
|
Description
|
|
Fair Value
|
|
|
Unrealized
Loss
|
|
|
Fair Value
|
|
|
Unrealized
Loss
|
|
|
Fair Value
|
|
|
Unrealized
Loss
|
|
Municipal bonds
|
|
$
|
93,000
|
|
|
$
|
(1,000
|
)
|
|
$
|
333,000
|
|
|
$
|
(40,000
|
)
|
|
$
|
426,000
|
|
|
$
|
(41,000
|
)
|
REITs
|
|
|
28,000
|
|
|
|
(17,000
|
)
|
|
|
43,000
|
|
|
|
(24,000
|
)
|
|
|
71,000
|
|
|
|
(41,000
|
)
|
Equity securities
|
|
|
4,218,000
|
|
|
|
(569,000
|
)
|
|
|
1,747,000
|
|
|
|
(115,000
|
)
|
|
|
5,965,000
|
|
|
|
(684,000
|
)
|
Total
|
|
$
|
4,339,000
|
|
|
$
|
(587,000
|
)
|
|
$
|
2,123,000
|
|
|
$
|
(179,000
|
)
|
|
$
|
6,462,000
|
|
|
$
|
(766,000
|
)
|
Unrealized
Loss Breakdown by Investment Type at April 30, 2020
|
|
Less than 12 months
|
|
|
12 months or greater
|
|
|
Total
|
|
Description
|
|
Fair Value
|
|
|
Unrealized
Loss
|
|
|
Fair Value
|
|
|
Unrealized
Loss
|
|
|
Fair Value
|
|
|
Unrealized
Loss
|
|
Municipal bonds
|
|
$
|
2,203,000
|
|
|
$
|
(42,000
|
)
|
|
$
|
484,000
|
|
|
$
|
(47,000
|
)
|
|
$
|
2,687,000
|
|
|
$
|
(89,000
|
)
|
REITs
|
|
|
43,000
|
|
|
|
(30,000
|
)
|
|
|
24,000
|
|
|
|
(14,000
|
)
|
|
|
67,000
|
|
|
|
(44000
|
)
|
Equity securities
|
|
|
5,496,000
|
|
|
|
(866,000
|
)
|
|
|
1,651,000
|
|
|
|
(314,000
|
)
|
|
|
7,147,000
|
|
|
|
(1,180,000
|
)
|
Total
|
|
$
|
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 October 31, 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 October 31, 2020.
Note
3 Inventories
Inventories
at October 31, 2020 and April 30, 2020 consisted of the following:
|
|
October 31,
|
|
|
April 30,
|
|
|
|
2020
|
|
|
2020
|
|
|
|
|
|
|
|
|
Raw materials
|
|
$
|
4,784,000
|
|
|
$
|
4,233,000
|
|
Work in process
|
|
|
478,000
|
|
|
|
402,000
|
|
Finished goods
|
|
|
617,000
|
|
|
|
606,000
|
|
|
|
|
5,879,000
|
|
|
|
5,241,000
|
|
Less: allowance for obsolete inventory
|
|
|
(148,000
|
)
|
|
|
(138,000
|
)
|
Inventories, net
|
|
$
|
5,731,000
|
|
|
$
|
5,103,000
|
|
Note
4 Business Segments
The
following is financial information relating to industry segments:
|
|
Three months
|
|
|
Six months
|
|
|
Three months
|
|
|
Six months
|
|
|
|
ended
|
|
|
ended
|
|
|
ended
|
|
|
ended
|
|
|
|
Oct 31, 2020
|
|
|
Oct 31, 2020
|
|
|
Oct 31, 2019
|
|
|
Oct 31, 2019
|
|
Net revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security alarm products
|
|
$
|
3,632,000
|
|
|
$
|
6,962,000
|
|
|
$
|
2,985,000
|
|
|
$
|
5,852,000
|
|
Cable & wiring tools
|
|
|
620,000
|
|
|
|
1,019,000
|
|
|
|
571,000
|
|
|
|
1,071,000
|
|
Other products
|
|
|
395,000
|
|
|
|
713,000
|
|
|
|
154,000
|
|
|
|
340,000
|
|
Total net revenue
|
|
$
|
4,647,000
|
|
|
$
|
8,694,000
|
|
|
$
|
3,710,000
|
|
|
$
|
7,263,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security alarm products
|
|
$
|
1,092,000
|
|
|
$
|
2,042,000
|
|
|
$
|
762,000
|
|
|
$
|
1,495,000
|
|
Cable & wiring tools
|
|
|
160,000
|
|
|
|
299,000
|
|
|
|
140,000
|
|
|
|
273,000
|
|
Other products
|
|
|
112,000
|
|
|
|
209,000
|
|
|
|
44,000
|
|
|
|
87,000
|
|
Total income from operations
|
|
$
|
1,364,000
|
|
|
$
|
2,550,000
|
|
|
$
|
946,000
|
|
|
$
|
1,855,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security alarm products
|
|
$
|
39,000
|
|
|
$
|
61,000
|
|
|
$
|
71,000
|
|
|
$
|
94,000
|
|
Cable & wiring tools
|
|
|
31,000
|
|
|
|
61,000
|
|
|
|
31,000
|
|
|
|
62,000
|
|
Other products
|
|
|
14,000
|
|
|
|
27,000
|
|
|
|
(4,000
|
)
|
|
|
16,000
|
|
Corporate general
|
|
|
19,000
|
|
|
|
40,000
|
|
|
|
(4,000
|
)
|
|
|
11,000
|
|
Total depreciation and amortization
|
|
$
|
103,000
|
|
|
$
|
189,000
|
|
|
$
|
94,000
|
|
|
$
|
183,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security alarm products
|
|
$
|
149,000
|
|
|
$
|
242,000
|
|
|
$
|
10,000
|
|
|
$
|
179,000
|
|
Cable & wiring tools
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Other products
|
|
|
111,000
|
|
|
|
113,000
|
|
|
|
—
|
|
|
|
—
|
|
Corporate general
|
|
|
6,000
|
|
|
|
6,000
|
|
|
|
—
|
|
|
|
—
|
|
Total capital expenditures
|
|
$
|
266,000
|
|
|
$
|
361,000
|
|
|
$
|
10,000
|
|
|
$
|
179,000
|
|
|
|
October 31, 2020
|
|
|
April 30, 2020
|
|
Identifiable assets:
|
|
|
|
|
|
|
|
|
Security alarm products
|
|
$
|
7,849,000
|
|
|
$
|
7,150,000
|
|
Cable & wiring tools
|
|
|
2,586,000
|
|
|
|
2,684,000
|
|
Other products
|
|
|
967,000
|
|
|
|
724,000
|
|
Corporate general
|
|
|
34,756,000
|
|
|
|
33,204,000
|
|
Total assets
|
|
$
|
46,158,000
|
|
|
$
|
43,762,000
|
|
Note
5 Earnings per Share
Basic
and diluted earnings per share, assuming convertible preferred stock was converted for each period presented, are:
|
|
For
the three months ended October 31, 2020
|
|
|
|
Income
|
|
|
Shares
|
|
|
Per-Share
|
|
|
|
(Numerator)
|
|
|
(Denominator)
|
|
|
Amount
|
|
Net
income
|
|
$
|
860,000
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
$
|
860,000
|
|
|
|
4,949,902
|
|
|
$
|
.17
|
|
Effect
of dilutive Convertible Preferred Stock
|
|
|
–
|
|
|
|
20,500
|
|
|
|
--
|
|
Diluted
EPS
|
|
$
|
860,000
|
|
|
|
4,970,402
|
|
|
$
|
.17
|
|
|
|
For
the six months ended October 31, 2020
|
|
|
|
Income
|
|
|
Shares
|
|
|
Per-Share
|
|
|
|
(Numerator)
|
|
|
(Denominator)
|
|
|
Amount
|
|
Net
income
|
|
$
|
3,352,000
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
$
|
3,352,000
|
|
|
|
4,949,914
|
|
|
$
|
.68
|
|
Effect
of dilutive Convertible Preferred Stock
|
|
|
–
|
|
|
|
20,500
|
|
|
|
--
|
|
Diluted
EPS
|
|
$
|
3,352,000
|
|
|
|
4,970,414
|
|
|
$
|
.67
|
|
|
|
For
the three months ended October 31, 2019
|
|
|
|
Income
|
|
|
Shares
|
|
|
Per-Share
|
|
|
|
(Numerator)
|
|
|
(Denominator)
|
|
|
Amount
|
|
Net
income
|
|
$
|
957,000
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
$
|
957,000
|
|
|
|
4,952,110
|
|
|
$
|
.19
|
|
Effect
of dilutive Convertible Preferred Stock
|
|
|
–
|
|
|
|
20,500
|
|
|
|
--
|
|
Diluted
EPS
|
|
$
|
957,000
|
|
|
|
4,972,610
|
|
|
$
|
.19
|
|
|
|
For
the six months ended October 31, 2019
|
|
|
|
Income
|
|
|
Shares
|
|
|
Per-Share
|
|
|
|
(Numerator)
|
|
|
(Denominator)
|
|
|
Amount
|
|
Net
income
|
|
$
|
1,932,000
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
$
|
1,932,000
|
|
|
|
4,954,250
|
|
|
$
|
.39
|
|
Effect
of dilutive Convertible Preferred Stock
|
|
|
–
|
|
|
|
20,500
|
|
|
|
--
|
|
Diluted
EPS
|
|
$
|
1,932,000
|
|
|
|
4,974,750
|
|
|
$
|
.39
|
|
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 Company. The Plan is
intended to be qualified under Section 401(k) of the Internal Revenue Code of 1986, as amended. It is funded by voluntary pre-tax
and Roth (taxable) contributions from eligible employees who may contribute a percentage of their eligible compensation, limited
and subject to statutory limits. Employees are eligible to participate in the Plan when they have attained the age of 21 and completed
one thousand hours of service in any plan year with the Company. Upon leaving the Company, each participant is 100% vested with
respect to the participants’ contributions while the Company’s matching contributions are vested over a six-year period
in accordance with the Plan document. Contributions are invested, as directed by the participant, in investment funds available
under the Plan. Matching contributions by the Company of approximately $16,000 and $7,000 were paid during each quarter ending
October 31, 2020 and 2019, respectively. Likewise, the Company paid matching contributions of approximately $29,000 and $9,000
during each six-month period ending October 31, 2020 and 2019, respectively.
Note
7 Fair Value Measurements
The
carrying value of the Company’s cash and cash equivalents, accounts receivable and accounts payable approximate their fair
value due 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 October 31, 2020, our investments consisted of money markets, publicly traded equity securities, real estate investment trusts
(REITs) as well as certain state and municipal debt securities. The marketable securities are valued using third-party broker
statements. The value of the majority of securities is derived from quoted market information. The inputs to the valuation are
generally classified as Level 1 given the active market for these securities, however, if an active market does not exist, which
is the case for municipal bonds and REITs, the inputs are recorded as Level 2.
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
October 31, 2020
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal Bonds
|
|
$
|
—
|
|
|
$
|
5,430,000
|
|
|
$
|
—
|
|
|
$
|
5,430,000
|
|
REITs
|
|
|
—
|
|
|
|
71,000
|
|
|
|
—
|
|
|
|
71,000
|
|
Equity Securities
|
|
|
21,588,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
21,588,000
|
|
Money Markets and CDs
|
|
|
577,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
577,000
|
|
Total fair value of assets measured on a recurring basis
|
|
$
|
22,165,000
|
|
|
$
|
5,501,000
|
|
|
$
|
—
|
|
|
$
|
27,666,000
|
|
|
|
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. If the Company submits a loan
forgiveness application within ten months of the completion of the Covered Period, it will not be required to make any payments
until the forgiveness amount is remitted to the lender by Small Business Administration (“SBA”). Interest accrues
during the time between the disbursement of the loan and the SBA remittance of the forgiveness amount. The Company is responsible
for paying the accrued interest only on the amount of the loan that is not forgiven. The lender is responsible for notifying the
Company of remittance of the forgiveness amount by the SBA and, if applicable, the date on which the Company’s first payment
of the remaining balance is due. 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 used 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. On December 3, 2020, the Company received notice from the lender that the entire amount of the PPP loan was forgiven.
Note
9 Subsequent Events
As
stated above, the Company received notification on December 3, 2020 from its lender of the Paycheck Protection Program (“PPP”)
loan that the full amount of the loan was forgiven.
GEORGE
RISK INDUSTRIES, INC.
PART
I. FINANCIAL INFORMATION