U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Washington, DC 20549Form 10–K

Form 10–K

☒[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year endedApril 30, 20162017

☐[  ] TRANSITION REPORT UNDER 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)

Registrant’s telephone number(308) 235–4645

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

Securities registered under Section 12(g) of the Act:

Class A Common Stock, $.10 par value

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐                 No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Sections 15(d) of the Act.

Yes ☐                 No ☒

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒                 No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229-405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☐                 No ☒

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229-405 of this chapter) is not contained herein, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10–K or any amendment to this Form 10–K. ☒[X]

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

(Do not check if smaller reporting company)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 Act).

Yes ☐               No ☒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. [  ]

The aggregate market value, as of July 29, 2016,August 8, 2017, of the common stock (based on the average of the bid and asked prices of the shares on the OTCBB of George Risk Industries, Inc.) held by non-affiliates (assuming, for this purpose, that all directors, officers and owners of 5% or more of the registrant’s common stock are deemed affiliates) was approximately $13,277,116.$14,790,000.

The number of outstanding shares of the common stock as of July 29, 2016August 8, 2017 was 5,021,660.4,944,950.

DOCUMENTS INCORPORATED BY REFERENCE

A material vendor contract with a customer that accounts for a material portion of our sales.

Part I

Preliminary Note Regarding Forward-Looking Statements and Currency Disclosure

This annual report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” that may cause our, or our industry’s, actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We do not intend to update any of the forward-looking statements to conform these statements to actual results except as required by applicable law, including the securities laws of the United States.

Our financial statements are stated in United States dollars, rounded to the nearest thousand, and are prepared in accordance with United States Generally Accepted Accounting Principles.

Item 1 Business

(a) Business Development

George Risk Industries, Inc. (GRI or the company)Company) was incorporated in 1967 in Colorado. The companyCompany is presently engaged in the design, manufacture, and sale of computer keyboards, push button switches, burglar alarm components and systems, pool alarms, thermostats, EZ Duct wire covers and water sensors.

Products, Market, and Distribution

The companyCompany designs, manufactures, and sells computer keyboards, push-button switches, burglar alarm components and systems, pool alarms, and water sensors. Our Telemark division, which concentrates on selling products for security burglar alarm products comprisepurposes, comprises of approximately 95 percent of net revenues and are sold through distributors and alarm dealers/installers.

The security segment has approximately 1,000 current customers. One of the distributors, ADI (which is a division of Honeywell International), accounts for approximately 41.340 percent of the company’sCompany’s sales of these products. Tri-Ed Distribution accounts for another 11.811.5 percent of companyCompany sales. Loss of these distributors would be significant to the company.Company. However, both companies have purchased from the companyCompany for many years and are expected to continue. Also, the companyCompany has obtained a written agreement with ADI. This agreement was signed in February 2011 and initiated by the customer. The contents of the agreement include product terms, purchasing, payment terms, term and termination, product marketing, representations and warranties, product support, mutual confidentiality, indemnification and insurance, and general provisions.

The keyboard segment has approximately 800 customers. Keyboard products are sold to original equipment manufacturers to their specifications and to distributors of off-the-shelf keyboards of proprietary design.

Competition

The companyCompany has intense competition in the keyboard and burglar alarm lines.

The burglar alarm segment has approximately eight major competitors. The companyCompany competes well based on price, product design, quality, customization and prompt delivery.

The competitors in the keyboard segment are larger companies with automated production facilities. GRI has emphasized small custom order sales that many of its competitors decline or discourage.

Research and Development

The companyCompany performs research and development for its customers when needed and requested. Costs in connection with such product development have been borne by the customers. Costs associated with the development of new products are expensed as incurred.

Employees

GRI has approximately 145130 employees.

Item 2 Properties

The companyCompany owns the manufacturing and some of the office facilities. Total square footage of the plant in Kimball, Nebraska is approximately 42,500 sq. ft. Additionally, the companyCompany leases 15,000 square feet for $1,535 per month with BonnieBonita Risk. BonnieBonita Risk is a director of the company.Company.

As of October 1, 1996, the companyCompany also began operating a satellite plant in Gering, NE. This expansion was done in coordination with Twin Cities Development. The companyCompany leased manufacturing facilities until July 2005. During the first quarter of fiscal year end 2006, the companyCompany purchased a building that is 7,200-sq. ft. in size. Currently, there are 3326 employees at the Gering site.

Item 3 Legal Proceedings

None.

Item 4 Submission of Matters to a Vote of Security Holders

Not applicable.

Part II

Item 5 Market for the Registrant’s Common Equity and Related Stockholders’ Matter

Principal Market

The company’sCompany’s Class A Common Stock, which is traded under the ticker symbol RSKIA, is currently quoted on the OTC Bulletin Board by one market maker.

Stock Prices and Dividends Information

On September 30, 2015,2016, a dividend of $.34$.35 per common share was declared for the fiscal year ended April 30, 2016.2017.

For the prior fiscal year, a dividend of $0.32$.34 per common share was declared on September 30, 2014.2015.

The number of holders of record of the company’sCompany’s Class A Common Stock as of April 30, 2016,2017, was approximately 1,200.

Repurchases of Equity Securities

On September 18, 2008, the Board of Directors approved an authorization for the repurchase of up to 500,000 shares of the company’sCompany’s common stock. Purchases can be made in the open market or in privately negotiated transactions. The Board did not specify an expiration date for the authorization.

The following tables show repurchases of GRI’s common stock made on a quarterly basis:

There are still approximately 183,000265,000 shares available to be repurchased under the current resolution.

Item 6 Selected Financial Data

As a smaller reporting company, we are not required to respond to this item.

Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Overview

George Risk Industries, Inc. (GRI) is a diversified manufacturer of electronic components, encompassing the security industry’s widest variety of door and window contact switches, environmental products, proximity switches and custom keyboards. The security products division comprises the largest portion of GRI sales and products are sold worldwide through distributors, who in turn sell these products to security installation companies. These products are used for residential, commercial, industrial and government installations. International sales accounted for approximately 6.4%12.4% of revenues for fiscal year 20162017 and 6.0%6.4% for 2015.2016.

GRI is known for its quality American made products, top-notch customer service and the willingness to work with customers on their special applications.

GRI owns and operates its main manufacturing plant and offices in Kimball, Nebraska with a satellite plant 40 miles away in Gering, Nebraska.

The companyCompany has substantial marketable securities holdings and these holding have a material impact on the financial results. For the fiscal year ending April 30, 2016,2017, other income accounted for 22.12%21.12% of income before income taxes. In comparison, other income accounted for 24.14%22.12% of the income before income taxes for the year ending April 30, 2015.2016. Management’s philosophy behind having holdings in marketable securities is to keep the money working and gaining interest on the cash that is not needed to be put back into the business. And over the years, the investments have kept the earnings per share up when the results from operations have not fared as well.

Management is always open to the possibility of acquiring a business that would complement our existing operations. This would probably not require any outside financing. The intent would be to utilize the equipment, marketing techniques and established customers to increase sales and profits.

There are no known seasonal trends with any of GRI’s products, since we mostly sell to distributors and OEM manufacturers. The products are tied to the housing industry and will fluctuate with building trends.

Liquidity and Capital Resources

Operating

Net cash increased $538,000 during the year ended April 30, 2017 compared to an increase of $227,000 during the year ended April 30, 2016 compared to a decrease of $181,000 during the year ended April 30, 2015.2016. Accounts receivable decreased $98,000$61,000 during the current year and showed a $31,000$98,000 decrease in the prior year. The largersmaller decrease in cash flow from accounts receivable is a reflection of decreased sales and that customers are taking slightly longerthe Company’s ability to pay us.collect on accounts receivable even though there has been a decrease in sales. At April 30, 2016, 72.45%2017, 69.92% of receivables were less than 45 days and less than 1%1.3% were over 90 days. In comparison, 75.01%72.45% of the receivables were considered current (less than 45 days) and less than 1% of the total were over 90 days past due for the prior year during the same period.

Inventories increaseddecreased by $695,000$660,000 in fiscal year ended April 30, 20162017 while the prior year showed a decreasean increase of $74,000$695,000 at year end. The current increasedecrease is a result of a decrease incontinuation of decreased sales. The companyCompany tends to buy many of its most commonly used raw materials on an annual basis and the decrease insince there has been a trend of decreased sales, leaves the company with more inventory.

purchasing levels have declined.

Prepaid expenses decreasedincreased by $40,000$125,000 in the current year and also decreased $24,000$40,000 for the year ended April 30, 2015.2016. The bigger decreaseincrease is due to renewing contracts (i.e. computer software support) for multiple years to get a better price overall.prepayment of inventory that had not arrived at the door before year end.

Income tax overpayment decreasedincreased for the year ended April 30, 2016, down $335,0002017, up $55,000 from the prior year. The lowerincrease in the overpayment is a result of paying more accurate income tax estimates.estimates based on prior year income.

For the year ended April 30, 2016,2017, accounts payable decreasedincreased by $79,000$38,000 as compared to a decrease of $1,000$79,000 for the same period the year before. The change in cash in regards to accounts payable is largely based on timing. Payables are paid within terms and fluctuate based primarily on inventory needs for production. Accrued expenses decreased $14,000$12,000 for the year ended April 30, 2016,2017, primarily due to having fewer employees than the timing of having a whole payroll period to accrue on the books.year before.

Investing

As for our investment activities, $276,000$115,000 was spent on purchases of property and equipment during the current fiscal year, compared to $186,000$288,000 during the year ended April 30, 2015.2016. The largest dollar amount purchased was a new ERP computer systemmajority of these capitalized costs were the completion of molds that were constructed in the 4^th quarter. Management is hopeful that this investment will enhance productivityour in-house tool and communication throughout the organization.die department. Additionally, the Company continues to purchase marketable securities, which include municipal bonds and quality stocks. Cash spent on purchases of marketable securities for the year ended April 30, 20162017 was $864,000$947,000 and $986,000$864,000 was spent for the corresponding period last year. Conversely, net proceeds from the sale of marketable securities for the year ended April 30, 20162017 were $64,000$587,000 and $33,000$64,000 for the same period last year. We use “money manager” accounts for most stock transactions. By doing this, the Company gives an independent third partythird-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.

As for other investment activities, a net amount of $12,000$55,000 was spentcapitalized on other assets manufactured for the year ended April 30, 2016,2017, while $15,000$12,000 was capitalizedspent on these activities during the prior year.

Financing

Cash used in financing activities consists of two items. First, for the year ended April 30, 2016, $1,553,0002017, $1,596,000 was spent on the issuancepayment of dividends. The companyCompany declared a dividend of $0.34$0.35 per share of common stock on September 30, 20152016 for the current year, while a $0.32$0.34 per share of common stock dividend on September 30, 20142015 was issued in the prior year. Furthermore, the Company continues to purchase back its common stock when the opportunity arises. For the year ended April 30, 2016,2017, the Company purchased $27,000$555,000 of treasury stock and $33,000$27,000 was bought back for the year ended April 30, 2015.2016. We have been actively searching for stockholders that have been “lost” over the years. The payment of dividends over the last eleventwelve fiscal years has also prompted many stockholders and/or their relatives and descendants to sell back their stock to the Company.

Results of Operations

GRI completed the fiscal year ending April 30, 20162017 with a net profit of 27.46%22.02% of net sales. Net sales were at $11,240,000,$10,904,000, down 5.57%2.99% over the previous year. The slight decrease in sales is a result of overall economic concerns that have impacted the country and some increased competition that has come into the industry. Cost of goods sold was 44.28%47.91% of net sales for the year ended April 30, 20162017 and 45.92%44.28% for the same period last year. Management continues to keep labor and other manufacturing expenses in check, thereforemeeting the goal of keeping the cost of goods sold percentage just belowwithin the desired range of 45 to 50%.

Operating expenses were 25.81%26.57% of net sales for the year ended April 30, 20162017 as compared to 24.22%25.81% for the corresponding period last year. Management’s goal is to keep the operating expenses around 30% or less of net sales, so the goal has been met for the current fiscal year. Income from operations for the year ended April 30, 20162017 was at $3,362,000,$2,783,000, which is a 5.4%17.22% decrease from the corresponding period last year, which had income from operations of $3,554,000.$3,362,000.

Other income and expense results for the fiscal year ended April 30, 20162017 produced a gain of $955,000.$745,000. This is in comparison to a gain of $1,131,000$955,000 for the fiscal year ended April 30, 2015.2016. Dividend and interest income was $867,000,$774,000, which is up 5.73%down 10.73% over the prior year. Dividend and interest income at April 30, 20152016 was $820,000.$867,000. Net gainslosses on investments for the current fiscal year were $72,000,$40,000, which is a 76.32%155.56% decrease over the prior year. Net gains on investments for the fiscal year ending April 30, 20152016 were $304,000.$72,000.

Net income for the year ended April 30, 20162017 was $3,086,000,$2,401,000, which is down 2.09%22.2% from the prior year, which produced a net income of $3,152,000.$3,086,000. Basic earnings per common share for the year ended April 30, 20162017 was $0.61$0.48 per share. Basic EPS for the year ended April 30, 20152016 was $0.63$0.61 per share.

Management is hopeful that sales will stay steadyincrease for the fiscal year ending April 30, 2017.2018. The company’sCompany’s main division of products that are sold (security switches) are directly tied to the housing industry. And since the housing industry’s performance has improved, the company’sCompany’s sales have also improved in relation to the economy. We are always researching and developing new products that will help our sales increase. While we were not successful in launching the anticipated new products in fiscal year 2016,2017, we are confident that new products will be released soon, and we are searching for products that complement our current offerings.

At April 30, 2016,2017, working capital increased 1.15%1.05% in comparison to the previous fiscal year. The companyCompany measures liquidity using the quick ratio, which is the ratio of cash, securities and accounts receivables to current obligations. The company’sCompany’s quick ratio increaseddecreased to 19.11420.881 for the year ended April 30, 20162017 compared to 13.89722.161 for the year ended April 30, 2015,2016, reflecting a strong position in ability to meet capital needs as they arise.

New product development

The GRI Engineering department continues to develop enhancements to our existing products as well as to develop new products that will continue to secure our position in the industry.

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.

The case for our CC-15 is complete and now needs to go to U.L. for approval. This will allow us to manufacture several different versions. One is a 15-amp version that would automatically turn on a whole room of lights. Another is a 220-volt version to be used in international markets.

We have completed two new low voltage switching devices and they have been introduced into the marketplace. The LVSD is a 2-amp, 12/24-VDC switching device that will power devices such as small motors, fans, sirens, strobes and LED lights. The LEDSD is a 2amp, 12/24-VDC controller with 2.1mm x 5.5mm connectors for use with LED lighting (puck, rope, strip, track and more). It can be used to turn on LED lighting in cabinets, display cases, closets, pantries, etc.

Mold work has been completed on connectors for our EZ-Duct line and these connectors are currently out for U.L. testing. This will allow the raceway line to be U.L. Listed for fire rating and high voltage.

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

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

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

Wireless technology is a main area of focus for product development. We are 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.

A modification toAn updated version of our 200-36 overhead door switch has been developed.line up is nearing completion. The modified version, the 200-36UF, is being made as a universal fit switch. This modification will be a “universal fit” that allowsallow an installer to replace an existing switch without having to drilldrilling new holes into the cement or adjustadjusting the location. The modified case has an additional mounting hole along with reshaped mounting holes.

NewTwo sizes of our custom length power transfer devicesdevice (PTDC) are in the works.have been introduced. The PTDC series will offeroffers a secure way to channel electrical wiring from athe door frame to athe door and are used for powering exit bars, locks, electricalelectric strikes etc. We plan to offerGRI offers two different models forend pieces; 0.218” inside diameter and 0.313” inside diameter, which will allow different sizes of wire to be pulledlooped through the custom length armored cable.

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

The case for the CC-15 is complete and now needs to be send to U.L. for approval. This advancement will allow us to manufacture several different versions, including a 15-amp version that would automatically turn on a whole room of lights and a 220-volt version for international markets. 12 and 24-volt versions are also being developed in response to many requests to turn on LED lighting.

Our molding department is working on several new molds for enhancements to our EZ Duct connectors and 29-series switch. The new version of the raceway line will be U.L. listed for fire rating and high voltage. Another product near completion in the molding department is a new face plate for the pool alarms. The new design is slimmer and will allow the homeowner to change the plate to match their décor.

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

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in conformity with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in those financial statements. These judgments can be subjective and complex, and consequently actual results could differ from those estimates. Our most critical accounting policies relate to accounts receivable; marketable securities; inventory; income taxes; and segment reporting.

Accounts receivable—Accounts receivable are customer obligations due under normal trade terms. The companyCompany sells its products to security alarm distributors, alarm installers, and original equipment manufacturers. Management performs continuing credit evaluations of its customers’ financial condition and the companyCompany generally does not require collateral.

The companyCompany records an allowance for doubtful accounts based on an analysis of specifically identified customer balances. The companyCompany has a limited number of customers with individually large amounts due at any given date. Any unanticipated change in any one of these customers’ credit worthiness or other matters affecting the collectability of amounts due from such customers could have a material effect on the results of operations in the period in which such changes or events occur. After all attempts to collect a receivable have failed, the receivable is written off.

Marketable securities—The Company has investments in publicly traded equity securities, state and municipal debt securities, corporate bonds and REITs. The investments in securities are classified as available-for-sale securities, and are reported at fair value. The Company uses the average cost method to determine the cost of securities sold and the amount reclassified out of accumulated other comprehensive income into earnings. Unrealized gains and losses are excluded from earnings and reported separately as a component of stockholder’s equity. Dividend and interest income are reported as earned.

In accordance with the Generally Accepted Accounting Principles in the United States (US GAAP), the Company evaluates all marketable securities for other-than temporary declines in fair value. When the cost basis exceeds the fair market value for approximately one year, management evaluates the nature of the investment, cause of impairment and number of investments that are in an unrealized position. When it is determined that a security will probably remain impaired, a recognized loss is booked and the investment is written down to its new fair value. The investments are periodically evaluated to determine if impairment changes are required.

Inventories—Inventories are valued at the lower of cost or market value. Costs are determined using the average cost-pricing method. The companyCompany uses standard costs to price its manufactured inventories, approximating average costs. The reported net value of inventory includes finished saleable products, work-in-process and raw materials that will be sold or used in future periods. Inventory costs include raw materials, direct labor and overhead. The Company’s overhead expenses are applied, based in part, upon estimates of the proportion of those expenses that are related to procuring and storing raw materials as compared to the manufacture and assembly of finished products. These proportions, the method of their application, and the resulting overhead included in ending inventory, are based in part on subjective estimates and approximations and actual results could differ from those estimates.

In addition, the Company records an inventory obsolescence reserve, which represents the cost of the inventory that has had no movement in over two years. There is inherent professional judgment and subjectivity made by management in determining the estimated obsolescence percentage. In addition, and as necessary, the Company may establish specific reserves for future known or anticipated events.

Income Taxes—US GAAP requires use of the liability method, whereby current and deferred tax assets and liabilities are determined based on tax rates and laws enacted as of the balance sheet date. Deferred tax expense represents the change in the deferred tax asset/liability balances.

Segment Reporting and Related Information—The Company designates the internal organization that is used by management for allocating resources and assessing performance as the source of the Company’s reportable segments. US GAAP also requires disclosures about products and services, geographic area and major customers.

Related Party Transactions— The Company leases a building from BonnieBonita Risk. Ken Risk was the Chairman of the Board and President and CEO of the companyCompany until his death in February 2013. BonnieBonita Risk is Ken’s wife and is a director and an employee of the company.Company. This building contains the Company’s sales and accounting departments, maintenance department, engineering department and some production facilities. This lease requires a minimum payment of $1,535 on a month-to-month basis. The total lease expense for this arrangement was $18,420 for the fiscal years ended April 30, 20162017 and 2015.2016.

One of the directors of the board, Joel Wiens, is the principal shareholder of FirsTier Bank. FirsTier Bank is the financial institution the companyCompany uses for its day to day banking operations. Year end balances of accounts held at this bank are $5,820,000 for the year ended April 30, 2017 and $4,304,000 for the year ended April 30, 2016 and $4,647,000 for the year ended April 30, 2015.2016. The Company also received interest income from FirsTier Bank in the amount of approximately $1,500$4,900 for each of the yearsfiscal year ended April 30, 20162017 and 2015.approximately $1,500 was received for the fiscal year ended April 30, 2016.

Item 8 Financial Statements

Index to Financial Statements

George Risk Industries, Inc.

Report of Independent Registered Public Accounting Firm

Board of Directors

George Risk Industries, Inc.

Kimball, Nebraska

We have audited the accompanying balance sheets of George Risk Industries, Inc. as of April 30, 20162017 and 2015,2016, and the related statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the two-year period ended April 30, 2016.2017. George Risk Industries, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The companyCompany is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’sCompany’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of George Risk Industries, Inc. as of April 30, 20162017 and 2015,2016, and the results of its operations and its cash flows for each of the years in the two-year period ended April 30, 2016,2017, in conformity with accounting principles generally accepted in the United States of America.

/s/ Haynie & Company

Littleton, Colorado

August 10, 2016

12, 2017

George Risk Industries, Inc.

Balance Sheets

As of April 30, 20162017 and 20152016

The accompanying notes are an integral part of these financial statements.

George Risk Industries, Inc.

Balance Sheets

As of April 30, 20162017 and 20152016

The accompanying notes are an integral part of these financial statements.

George Risk Industries, Inc.

The accompanying notes are an integral part of these financial statements.

George Risk Industries, Inc.

The accompanying notes are an integral part of these financial statements.

George Risk Industries, Inc.

The accompanying notes are an integral part of these financial statements.

George Risk Industries, Inc.

The accompanying notes are an integral part of these financial statements.

George Risk Industries, Inc.

April 30, 2017

The accompanying notes are an integral part of these financial statements.

George Risk Industries, Inc. (GRI or the Company) was incorporated in 1967 in Colorado. The Company is presently engaged in the design, manufacture, and sale of computer keyboards, push button switches, burglar alarm components and systems, pool alarms, thermostats, EZ Duct wire covers and water sensors.

Nature of Business—The Company is engaged in the design, manufacture, and marketing of custom computer keyboards, push-button switches, proximity sensors, security alarm components, pool alarms, liquid detection sensors, raceway wire covers and hydro sensors.various other sensors and devices.

Cash and Cash Equivalents—The Company considers all investments with a maturity of three months or less to be cash equivalents.

Allowance for Doubtful Accounts—Accounts receivable are customer obligations due under normal trade terms. The companyCompany sells its products to security alarm distributors, alarm installers, and original equipment manufacturers. The companyCompany performs continuing credit evaluations of its customers’ financial condition and the companyCompany generally does not require collateral.

The companyCompany records an allowance for doubtful accounts based on an analysis of specifically identified customer balances. The companyCompany has a limited number of customers with individually largesubstantial amounts due at any given date. Any unanticipated change in any one of these customers’ credit worthiness or other matters affecting the collectability of amounts due from such customers could have a material effect on the results of operations in the period in which such changes or events occur. After all attempts to collect a receivable have failed, the receivable is written off. The companyCompany has recorded an allowance for doubtful accounts of $2,425 for the year ended April 30, 2017 and $74 for the year ended April 30, 2016 and $160 for2016. For the fiscal year ended April 30, 2015.2017, bad debt expense was $2,351. For the fiscal year ended April 30, 2016, bad debt expense was a net credit of $2,489 due to bad debt recoveries during the year. For the fiscal year ended April 30, 2015, bad debt expense was a net credit of $3,727.$2,489.

Inventories—Inventories are stated at the lower of cost or market. Cost is determined using the average cost-pricing method. The companyCompany uses standard costs to price its manufactured inventories approximating average costs.

Property and Equipment—Property and equipment are recorded at cost. Depreciation is calculated based on the following estimated useful lives using the straight-line method:

Depreciation expense of $182,000$187,000 and $149,000$182,000 was charged to operations for the years ended April 30, 20162017 and 2015,2016, respectively.

Maintenance and repairs are charged to expense as incurred, and expenditures for major improvements are capitalized. When assets are retired or otherwise disposed of, the property accounts are relieved of costs and accumulated depreciation and any resulting gain or loss is credited or charged to operations.

Advertising—Advertising costs are expensed as incurred and are included in selling expenses. Advertising expense amounted to $289,000$330,000 and $257,000$289,000 for the years ended April 30, 20162017 and 2015,2016, respectively.

Income Taxes—US GAAP requires use of the liability method, whereby current and deferred tax assets and liabilities are determined based on tax rates and laws enacted as of the balance sheet date. Deferred tax expense represents the change in the deferred tax asset/liability balances.

The flow-through method of accounting for tax credits has been adopted by the company.Company. Such credits are reflected as a reduction of the provision for income taxes in the year in which they become available.

Net Income Per Common Share—Net income per common share is based on the weighted average number of common shares outstanding during each fiscal year. The dilutive effect of convertible preferred stock is reflected in diluted earnings per share by application of the if-converted method. Under this method, preferred dividends applicable to convertible preferred stock are added to the numerator and convertible preferred stock is assumed to have been converted at the beginning of the period.

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.

Financial Instruments—Financial instruments consist of cash and cash equivalents, marketable securities, accounts receivable and accounts payable. The carrying values of these financial instruments approximate fair value due to their short-term nature.

Revenue Recognition—Revenue is recognized when risks and benefits in ownership are transferred, which normally occurs at the time of shipment of products.

Comprehensive Income—US GAAP requires disclosure of total non-stockholder changes in equity in interim periods and additional disclosures of the components of non-stockholder changes in equity on an annual basis. Total non-stockholder changes in equity include all changes in equity during a period except those resulting from fiscal investments by and distributions to stockholders.

Segment Reporting and Related Information—The Company designates the internal organization that is used by management for allocating resources and assessing performance as the source of the Company’s reportable segments. US GAAP also requires disclosures about products and services, geographic area and major customers. At April 30, 2016,2017, the Company operated in two segments organized by security line products and all other products. See Note 9 for further segment information disclosures.

Reclassifications—Certain reclassifications have been made to conform to the current year presentation. The total net income and equity are unchanged due those reclassifications.

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

In January 2015, the FASB issued Accounting Standards Update No. 2015-04, “Requirement that All Deferred Income Tax Assets and Liabilities Be Presented as Non-Current in a Classified Balance Sheet”. The objective of this update is to require deferred tax liabilities and assets be classified entirely as non-current in a classified balance sheet. This update is effective in annual reporting periods beginning after December 15, 2016 and the interim periods within that year. The Company is evaluating the impact of this update on the Company’s financial statements.

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

Subsequent Events – Management has evaluated all events or transactions that occurred after April 30, 2017 through August 12, 2017, the report date of the financial statements. During this period, the Company did not have any material recognizable subsequent events.

Inventories at April 30, 20162017 and 2015,2016, consisted of the following: