UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10–K10-K

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

For the fiscal year ended April 30 2020, 2022

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to _________

Commission File Number: 000–05378000-05378

George Risk Industries, Inc.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number (308) (308) 235–4645

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

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

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

Yes [  ] ☐       No [X] ☒

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 [X] ☒

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 [X] ☒    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 [ X ] ☒     No [  ]☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smallsmaller 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.

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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. [  ]☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes [  ] ☐       No [X] ☒

The aggregate market value, as of August 7, 2020,11, 2022, of the common stock (based on the average of the bid and asked prices of the shares on the OTCM 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 $17,113,000.$22,807,000.

The number of outstanding shares of the common stock as of August 7, 202012, 2022 was 4,949,927.4,930,988.

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) was incorporated in 1967 in Colorado. The Company is presently engaged in the design, manufacture, and sale of custom computer keyboards, push buttonproximity switches, burglarsecurity alarm components and systems, pool access alarms, EZ Duct wire covers, water sensors, electronic switching devices, high security switches and wire and cable installation tools.

Products, Market, and Distribution

The Company designs, manufactures, and sells computer keyboards, push-buttonproximity switches, burglarsecurity alarm components and systems, pool access alarms, water sensors, electronic switching devices, high security switches, and wire and cable installation tools. The Security sales division, which concentrates on selling products for security purposes, comprises of approximately 9596 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, Ademco, Inc. (previously known as ADI), accounts for approximately 40.236.6 percent of the Company’s sales of these products. Anixter, Inc. accounts for another 11.923.7 percent of the security segment of the Company sales. Loss of these distributors would be significant to the Company. However, both companies have purchased from the Company for many years and are expected to continue. Also, the Company has a written agreement with Ademco. This agreement was signed in February 2011 and was 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 and proximity switch segment has approximately 700300 customers. KeyboardThese products are primarily sold to original equipment manufacturers to their specifications and to distributors of off-the-shelf keyboards of proprietary design.

Competition

The Company has intense competition in the keyboardkeyboard/proximity and security/burglar alarm lines.

The security/burglar alarm segment has approximately sevensix major competitors. The Company competes well based on price, product design, quality, customization and having products made in the USA.

The competitors in the keyboardkeyboard/proximity 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 Company 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. The Company also does R&D for itself to help in the development of new products.

Employees

GRI has approximately 175200 employees.

Item 2 Properties

The Company owns the manufacturing and the office facilities that it operates in. Total square footage of the plant in Kimball, Nebraska is approximately 50,000 sq. ft. A 7,500 square foot warehouse for raw material storage was purchased in June 2017 when the Company acquired its cable and wiring segment and another 9,600 square foot building was purchased in April 2020 for additional expansion. Additionally, the Company purchased the 15,000 square foot building that it previously leased from Bonita Risk, which has been used mainly for offices, in November 2019. Bonita Risk is a director of the Company.

The Company also owns a building in Gering, NE that is 7,200-sq. ft. in size. This is used for manufacturing. Currently, there are 35approximately 36 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’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, 2019,2021, a dividend of $.40$.50 per common share was declared for the fiscal year ended April 30, 2020.2022.

For the prior fiscal year, a dividend of $.38$.42 per common share was declared on September 30, 2018.2020.

The number of holders of record of the Company’s Class A Common Stock as of April 30, 2020,2022, was approximately 1,130.1,108.

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’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 254,000227,000 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.Not Applicable

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

Executive Overview

George Risk Industries, Inc. (GRI) (the “Company”) is a diversified manufacturer of electronic components, encompassing the security industry’s widest variety of door and window contact switches, environmental products, wire and cable installation tools, 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 12.5%10.7% of revenues for fiscal year 20202022 and 11.4%11.9% for 2019.2021.

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 Company has substantial marketable securities holdings and these holdingholdings have a material impact on the financial results. For the fiscal year ending April 30, 2020,2022, the percentage of other income (expense) showedwas a loss of 39.96%30.11% of income before income taxes .taxes. In comparison, the percentage of other income accounted for 31.01%(expense) was a gain of 63.27% of the income before income taxes for the year ending April 30, 2019.2021. 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. 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, which is exactly what took place in October 2017 when the Company purchased substantially all of the assets from Labor Saving Devices, Inc. (“LSDI”) and Roy Bowling (“Bowling”).

There are no known seasonal trends with any of GRI’s products, since wethe Company mostly sellsells to distributors and original equipment manufacturers (OEMs). The products are tied to the housing industry and will fluctuate with building trends.

Liquidity and Capital Resources

Operating

Net cash increaseddecreased by $1,585,000$1,248,000 during the year ended April 30, 20202022 compared to an increase of $579,000$868,000 during the year ended April 30, 2019.2021. Accounts receivable increased by $266,000$326,000 during the current year while showing a $155,000$850,000 increase in the prior year. The current largersmaller increase in cash flow from accounts receivable is the result of increased sales but having delays in payments from customers becauseslower collection of the COVID-19 pandemic.accounts receivable. At April 30, 2020, 74.75%2022, 75.19% of receivables were less than 60 days and 5.70%7.86% were over 90 days. In comparison, 72.17%77.93% of the receivables were considered current (less than 60 days) and 5.87%3.76% of the total were over 90 days past due for the prior year during the same period.

Inventories increased by $567,000$2,430,000 in fiscal year ended April 30, 20202022, while the prior year showed an increase of $1,316,000$557,000 at year end. The current year increase is a result of having more raw materials on hand since sales have increased and having the raw material costing more than before. In turn, with material and labor costs rising, the work in process and finished goods inventories have also increased.

Prepaid expenses increased by $137,000$903,000 while they decreased $207,000increased $67,000 in the current and prior year, respectively. The larger increase in the current year is due to having more prepayments of raw materials than at year-end last year and having to renew multi-year subscriptions.

Income tax overpayments decreased by $203,000 for the year ended April 30, 2020. The smaller decreasesubscriptions in the current year is a result of having income tax estimates calculated better to match the actual taxable income.year.

For the year ended April 30, 2020,2022, accounts payable decreased by $19,000$157,000 as compared to a decreasean increase of $130,000$291,000 for the same period the year before. The change in cash with 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 increased $94,000decreased $5,000 for the year ended April 30, 2020,2022, due to increased commissions and having a few more days ofslightly less accrued payrollcustomer liability refund calculated compared to the prior year.

Income tax payable increased by $196,000 for the year ended April 30, 2022, compared to a $137,000 decrease in income tax overpayment for the year ended April 30, 2021. The current increase is largely due to having increased sales and income before tax and not making enough income tax estimates.

Investing

As for investment activities, $731,000$390,000 was spent on purchases of property and equipment during the current fiscal year, compared to $154,000$517,000 during the year ended April 30, 2019.2021. These capitalized costs mainly consisted of purchases of buildings and machinery and equipment.equipment and making capital improvements. 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, 20202022 was $831,000$787,000 versus the $942,000$506,000 spent for the corresponding period last year. Conversely, net proceeds from the sale of marketable securities were $776,000$452,000 and $766,000$21,000 at April 30, 20202022 and 2019,2021, respectively. The Company uses “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

Cash used in financing activities consists of threetwo items. First, for the year ended April 30, 2020, $1,803,0002022, $2,257,000 was spent on the payment of dividends. The Company declared a dividend of $0.40$0.50 per share of common stock on September 30, 20192021 for the current fiscal year, while a $0.38$0.42 per share of common stock dividend was declared on September 30, 20182020 and issued in the prior fiscal year. Secondly, the Company continues to purchase back its Class A common stock when the opportunity arises. For the year ended April 30, 2020,2022, the Company purchased $74,000$211,000 of treasury stock and $79,000$35,000 was bought back for the year ended April 30, 2019. We have2021. The Company has been actively searching for stockholders that have been “lost” over the years. The payment of dividends over the last fourteensixteen fiscal years has also prompted many stockholders and/or their relatives and descendants to sell back their stock to the Company. Third, the Company applied for and received a Paycheck Protection Program (PPP) loan in the fourth quarter of fiscal year 2020. With all the uncertainties of the COVID-19 pandemic, management decided that it would be wise to apply for the loan. The Company received $950,000 in loan proceeds in April 2020.

At April 30, 2020,2022, working capital decreased 2.0%0.59% in comparison to the previous fiscal year. The Company measures liquidity using the quick ratio, which is the ratio of cash, securities and accounts receivables to current obligations. The Company’s quick ratio decreased to 11.62315.549 for the year ended April 30, 20202022 compared to 17.57016.856 for the year ended April 30, 2019.2021.

Results of Operations

GRI completed the fiscal year ending April 30, 20202022 with a net profit of 14.21%17.20% of net sales. Net sales were at $14,809,000,$20,735,000, up 4.84%12.05% over the previous fiscal year. The increase in sales is a result of continued growth within our product lines and having a major competitor closedclose its door at the end of calendar year 2019. Cost of goods sold was 50.00%51.70% of net sales for the year ended April 30, 20202022 and 51.86%49.59% for the same period last year. Management’s goal is to keep the cost of goods sold percentage of less than 50%, but and was just slightly over that goal for the current fiscal year. Management strives to be as efficient as possible since wages and other expensesmaterial costs continue to increase, due to stay competitive with the workforce that is the reason why the costincreased inflation in our economy. Management offset some of goods percentage is just past management’s goal. Management also increased prices slightly inthese added expenses by implementing a 10% price increase effective January 2020 to offset the growing expenses and cost of raw materials.1, 2022.

Operating expenses were 24.82%21.06% of net sales for the year ended April 30, 20202022 as compared to 24.73%21.74% 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, 20202022 was at $3,730,000,$5,648,000, which is a 12.83%6.45% increase from the corresponding period last year, which had income from operations of $3,306,000.$5,306,000.

Other income and expense results for the fiscal year ended April 30, 20202022 produced a loss of ($1,065,000)$(1,307,000). This is in comparison to a gain of $1,486,000$9,140,000 for the fiscal year ended April 30, 2019.2021. Dividend and interest income was $931,000,$1,027,000, which is down 5.10%up 35.67% over the prior year. Dividend and interest income at April 30, 20192021 was $981,000.$757,000. 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).entry. As a result, an unrealized loss of $(1,619,000)$(2,764,000) was recorded for the fiscal year ended April 30, 20202022 and an unrealized gain of $444,000$7,007,000 was recorded for the prior year ended April 30, 2019.2021. Net lossgain on the sale of investments for the current fiscal year was $(384,000),$414,000, which is an 729.51% decreasea 14.05% increase over the prior year. Net gain on the sale of investments for the fiscal year ending April 30, 20192021 was $61,000.$363,000.

Net income for the year ended April 30, 20202022 was $2,104,000,$3,566,000, which is down 41.52%67.05% from the prior year, which produced net income of $3,598,000.$10,822,000. Basic and diluted earnings per common share (EPS) for the year ended April 30, 20202022 was $0.42$0.72 per share. Basic and diluted earnings per common share (EPS) for the year ended April 30, 20192021 was $0.73$2.19 and $0.72$2.18 per share, respectively.

Management is hopeful that sales will continue to increase for the fiscal year ending April 30, 2021.2023. With the purchase of the assets from Labor Saving Devices, Inc., the Company has seen an overall increase in sales, and we have also seen growth in our existing product lines as well with a major competitor going out of business at the end of 2019. Because of this closure, we have seen our orders increase and we are still adjusting to grow to fulfill these orders. Management is also having challenges in getting certain raw materials and the cost of the raw materials continue to increase because of inflation. The Company also struggles to get enough workers to fill production needs. Our Security sales division, which is our largest sales generator, is directly tied to the housing industry and we normally experience the same fluctuations. We are always researching and developing new products that will help our sales increase. While only a few new or improved products were successfully launched in fiscal year 2020,2022, we are confident that more new products will be released soon, and we are searching for products that complement our current offerings. 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.

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 plateExplosion proof contacts that will be UL listed for hazardous locations are in development. There has been demand from our pool alarms is nearing completion. The innovative design is slim in style and will also allow the homeowner to change the plate to match their décor.customers for this type of high security magnetic reed switch.

An updated version of the pool access alarm is currently going through(PAA) has met electrical listing testing. Since the COVID-19 pandemictesting (ETL) approval and production has happened, not much testing has progressed.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.settings such as instant alarm and a seven second delay.

Wireless technology is a main area of focus for product development. We are looking intoconsidering adding wireless technology to some of our current products. A wireless contact switch is in the final stages of development. Also, we are working on wireless versions of our Pool Alarmmonitoring devices which include glass break detection, tilt sensing and environmental sensors that will be easy to install in current construction. We are also concentrating on making products compatible with Wi-Fi, smartphone technology and the increasing popular Z-Wave standard for wireless home automation.monitoring. A redesign of our brass water valve shut-off system is near completion.

In the next month we are introducing a couple of new security products. TheyThe Company is developing magnetic contacts which are listed below:

We 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 doorhigh security applications such as government buildings, military use, nuclear facilities, and does not require drilling into the door core. We have also paired this with several of our ¾” and 1” steel door contacts.financial institutions.

There have been several new products that have been introduced for our cable and wiring tools segment. They are listed below:

Critical Accounting Policies

The discussion and analysis of the financial condition and results of operations are based upon the financial statements, which have been prepared in conformity with generally accepted accounting principles in the United States. The preparation of these financial statements requires the use of 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. The 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 Company 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 Company generally does not require collateral.

The Company records an allowance for doubtful accounts based on an analysis of specifically identified customer balances. The Company 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 real-estate investment trusts (REITs). The investments in securities are reported at fair value. The Company uses the average cost method to determine the cost of securities sold and any unrealized gains or losses on equity securities are 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.

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 loss position. When it is determined that a security will probablylikely 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 net realizable value. Costs are determined using the average cost-pricing method. The Company uses actual 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 assets and 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 purchased a building in November 2019 that was previously leased from Bonita Risk, thus terminating the lease during the fiscal year ended April 30, 2020. Bonita Risk is a director and an employee of the Company and is the majority holder of George Risk Industries, Inc. stock. This building contains the Company’s sales and accounting departments, maintenance department, engineering department and some production facilities. This lease required a minimum payment of $1,535 on a month-to-month basis. The total lease expense for this arrangement was $ 7,675 during the fiscal year ended April 30, 2020 and $18,420 for the fiscal year ended April 30, 2019.

One of the directors of the board, Joel Wiens, is the principal shareholder of FirsTier Bank. FirsTier Bank is the financial institution the Company uses for its day to dayday-to-day banking operations. Year end balances of accounts held at this bank are $5,167,000$5,058,000 for the year ended April 30, 20202022 and $4,224,000$6,885,000 for the year ended April 30, 2019.2021. The Company also received interest income from FirsTier Bank in the amount of approximately $74,600$58,800 for the fiscal year ended April 30, 20202022 and approximately $63,400$54,800 was received for the fiscal year ended April 30, 2019.2021.

Item 8 Financial Statements

Index to Financial Statements

George Risk Industries, Inc.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of George Risk Industries

Opinion on the Financial Statements

We have audited the accompanying balance sheets of George Risk Industries, Inc. (the Company) as of April 30, 2022, and 2021, 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, 2022, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of April 30, 2022, and 2021, and the results of its operations and its cash flows for each of the years in the two-year period ended April 30, 2022, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Critical Audit Matter – Revenue Recognition – Refer to Note 1 of the Financial Statements

Critical Audit Matter Description

The Company primarily generates revenue through non-complex sales transactions that require limited judgement. However, there are instances in which revenue contracts contain complexities that are subject to critical judgement around when the performance obligation is satisfied. These specific elements of revenue are variable considerations and returns and allowances.

Consideration in contracts with customers is variable due to anticipated reductions such as discounts, rebates, and allowances. Accordingly, revenues are recorded net of estimated variable consideration and returns and allowances, based on known or expected adjustments.

This matter was considered a critical audit matter as there is a high degree of auditor effort in performing procedures and evaluation audit evidence related to contractual terms in customer arrangements to determine the amounts of consideration.

How the Critical Audit Matter was Addressed in the Audit

Our principal procedures related to the Company’s revenue recognition for these specific elements are the following:

Critical Audit Matter – Valuation of Investments – Refer to Note 1 and Note 3 of the Financial Statements

Critical Audit Matter Description

The Company has investments in publicly traded equity securities, state and municipal debt securities, REITS, and money markets and they are recorded at fair value. Some of these investments are Level 2 investments and can be hard to value. In addition, as the securities held at fair value, management must assess securities that are in a significant unrealized loss position for other than temporary impairment. For these securities, management must make difficult and subjective judgements about the ability of the issuer to be able to meet its obligations under terms of the security. These judgements can have a significant impact on the Company’s reported earnings if they should prove to be significantly inaccurate.

How the Critical Audit Matter was Addressed in the Audit

Our principal procedures related to the Company’s process for debt securities valuations as well as the process for equity securities other than temporary impairment evaluation included.

Haynie & Company

George Risk Industries, Inc.

Balance Sheets

As of April 30, 20202022 and 20192021

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

George Risk Industries, Inc.

Balance Sheets (Continued)

As of April 30, 2020 and 2019

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

George Risk Industries, Inc.

Income Statements

For the years ended April 30, 2020 and 2019

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

George Risk Industries, Inc.

Statements
Balance Sheets (Continued)
As of Comprehensive Income

For the years ended April 30, 20202022 and 20192021

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

George Risk Industries, Inc.

Statements of Stockholders’ Equity

For the Years Ended April 30, 2020 and 2019

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

George Risk Industries, Inc.

Statements of Stockholders’ Equity

For the Years Ended April 30, 2020 and 2019

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

George Risk Industries, Inc.

Statements of Cash Flows

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

George Risk Industries, Inc.
Income Statements
For the years ended April 30, 2022 and 2021

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

George Risk Industries, Inc.
Statements of Comprehensive Income
For the years ended April 30, 2022 and 2021

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

George Risk Industries, Inc.
Statements of Stockholders’ Equity
For the Years Ended April 30, 2022 and 2021

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

George Risk Industries, Inc.
Statements of Stockholders’ Equity
For the Years Ended April 30, 2022 and 2021