U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-K/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended April 30, 2013
[ ] 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.
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(Exact Name of registrant as specified in its charter)
Colorado 84-0524756
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(State of incorporation) (I.R.S. Employer Identificn No.)
802 South Elm
Kimball, NE 69145
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(Address of principal executive (Zip Code)
offices)
Issuer's telephone number (308) 235-4645
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Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Exchange on Which Registered
None None
---- ----
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 [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 re-
quirements for the past 90 days.
Yes [X] No [ ]
Page 1
Indicate by check mark whether the registrant has submitted electronically
and posted on its corporate Website, if any, every Interactive Data File re-
quired to be submitted and posted pursuant to Rule 405 of Regulation S-T
(Section 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 [X]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229-405 of this chapter) is not contained
herein, to the best of registrant's knowledge, in definitive proxy or inform-
ation 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 company
in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check is smaller reporting company)
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 July 28, 2014, of the common stock (based
on the average of the bid and asked prices of the shares on the OCTBB 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
$14,447,654.
The number of outstanding shares of the common stock as of July 28, 2014 was
5,029,775.
DOCUMENTS INCORPORATED BY REFERENCE
A material vendor contract with a customer that accounts for a material
portion of our sales.
Page 2
Part I
EXPLANATORY NOTE
This Amendment No. 1 to the Annual Report on Form 10-K/A of George Risk
Industries, Inc. (GRI), (the "Company")for the year ended April 30, 2013
is being filed to amend the financial information contained in the
Management's Discussion and Analysis of Financial Condition and Plan of
Operation in Part I and the financial statements in Part IV of the Company's
Annual Report on Form 10K for the year ended April 30, 2013 which was filed
with the Securities and Exchange Commission ("SEC") on August 14, 2013 (the
"Form 10-K").
In its previously filed financial statements for the year ended April 30,
2013, the Company misstated the deferred taxes due to an error in the capital
loss carry-forward calculation. The Company has restated its financial state-
ments for the period ended April 30, 2013 to reflect the proper adjustments.
Except as described above, no other parts of the 10-K are being amended.
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. Except as required by applicable law,
including the securities laws of the United States, we do not intend to up-
date any of the forward-looking statements to conform these statements to
actual results.
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 computer keyboards, push button switches, burglar alarm
components and systems, pool alarms, thermostats, EZ Duct wire covers and
water sensors.
Page 3
Products, Market, and Distribution
The company designs, manufactures, and sells computer keyboards, push-button
switches, burglar alarm components and systems, pool alarms, and water
sensors. Our security burglar alarm products comprise approximately 84 per-
cent of net revenues and are sold through distributors and alarm dealers/
installers.
The security segment has approximately 3,000 customers. One of the dis-
tributors, ADI (which is a division of Honeywell International) accounts for
approximately 40 percent of the company's sales of these products. Loss of
this distributor would be significant to the company. However, this customer
has purchased from the company for many years and is expected to continue.
Also, the company has obtained a written agreement with this ADI. This agree-
ment 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 dis-
tributors of off-the-shelf keyboards of proprietary design.
Competition
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The company has intense competition in the keyboard and burglar alarm lines.
The burglar alarm segment has approximately ten major competitors. The com-
pany competes well based on price, product design, quality, 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 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.
Employees
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GRI has approximately 160 employees.
Item 2 Properties
The company 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 company leases 15,000 square feet for $1,535 per month
with Bonnie Risk. Bonnie Risk is the director of the company.
As of October 1, 1996, the company also began operating a satellite plant in
Gering, NE. This expansion was done in coordination with Twin Cities
Development. The company leased manufacturing facilities until July 2005.
During the first quarter of fiscal year end 2006, the company purchased a
building that is 7,200-sq. ft. in size. Currently, there are 28 employees at
the Gering site.
Page 4
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
2013 Fiscal Year
High Low
May 1-July 31 $6.20 $5.02
August 1-October 31 $7.24 $5.76
November 1-January 31 $7.59 $6.55
February 1-April 30 $7.40 $6.60
2012 Fiscal Year
High Low
May 1-July 31 $6.50 $5.05
August 1-October 31 $7.53 $5.10
November 1-January 31 $6.75 $5.50
February 1-April 30 $6.25 $5.75
A dividend of $0.28 per common share was declared on September 30, 2012
and an additional dividend of $0.22 per common share was declared on
December 16, 2012 for a total dividend payout of $0.50 per common share
for the fiscal year end 2013. As for fiscal year 2012, a dividend of
$0.23 per common share was declared on September 30, 2011.
The number of holders of record of the company's Class A Common Stock
as of April 30, 2013, was approximately 1,200.
Repurchase 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:
2013 Fiscal Year Number of shares repurchased
May 1-July 31 0
August 1-October 31 5,574
November 1-January 31 1,500
February 1-April 30 0
Page 5
2012 Fiscal Year Number of shares repurchased
May 1-July 31 3,605
August 1-October 31 2,450
November 1-January 31 1,400
February 1-April 30 970
There are still approximately 359,000 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.
Page 6
Item 7 Management's Discussion and Analysis of Financial Condition and
Results of Operations
Executive Overview
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George Risk Industries, Inc. (GRI) is a diversified manufacturer of
electronic components, encompassing the security industries 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 are sold worldwide through distribution, who in turn
sell these products to security installing companies. These products are
used for residential, commercial, industrial and government installations.
International sales accounted for approximately 6.3% of revenues for fiscal
year 2013 and 5.5% for 2012.
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 holdings
have a material impact on the financial results. For the fiscal year ending
April 30, 2013, other income accounted for 31.66% of income before income
taxes. In comparison, other income accounted for 21.20% of the income before
income taxes for the year ending April 30, 2012. 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, market-
ing techniques and established customers to increase sales and profits.
There are no known seasonal trends with any of GRI's products, since we most-
ly 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 decreased $914,000 during the year ended April 30, 2013 as it in-
creased $519,000 during the year ended April 30, 2012. Other cash flow
changes are as follows. Accounts receivable increased $244,000 during the
current year as compared to a $95,000 increase for last year. The increase
in cash flow for accounts receivable is a reflection of increased sales. At
April 30, 2013, 69.77% of the receivables were considered current (less than
45 days) and 0.43% of the total were over 90 days past due. For comparison,
69.12% of the receivables were current and 0.90% were past 90 days at April
30, 2012. Inventories decreased $277,000 for the current year as compared to
a $535,000 increase for the same period last year. Since there is a smaller
increase in sales for the current year, as compared to last year, management
had already increased its inventory purchase levels. For the year ended
April 30, 2013, prepaid expenses decreased $80,000, and decreased $10,000 for
the corresponding period last year. The main reason for the decrease in pre-
paid expenses for the current fiscal year is that the company has received
raw materials that it prepaid for last fiscal year. Cash towards payment of
income taxes increased $593,000 for the year ended April 30, 2013. Management
increased the amounts they paid on income tax estimates since the estimates
were under estimated the prior fiscal year.
Page 7
For the year ended April 30, 2013, accounts payable decreased $28,000 as
compared to a $32,000 decrease for the same period the year before. The
change in cash in regards to accounts payable can vary. It really depends on
the time of the month the invoices are due, since the company pays all its
invoices within the terms. Accrued expenses increased $47,000 for the year
ended April 30, 2013, as these expenses remained constant for the
corresponding year ended April 30, 2012.
Investing
As for our investment activities, a net amount of $1,000 was capitalized on
other assets manufactured for the year ended April 30, 2013, while $169,000
was spent on these activities during the prior fiscal year. A few molds were
completed and put to the fixed asset accounts as new molds have been started
during the current fiscal year. $104,000 was spent on purchases of property
and equipment during the current fiscal year and $298,000 was spent during
the year ended April 30, 2012. Additionally, the Company continues to pur-
chase marketable securities, which include municipal bonds and quality
stocks. Cash spent on purchases of marketable securities for the year ended
April 30, 2013 was $760,000 and $891,000 was spent for the corresponding
period last year. In addition, proceeds from the sale of marketable
securities for the year ended April 30, 2013 were $89,000 and $168,000 for
the same period last year. We use "money manager" accounts for most stock
transactions. By doing this, the Company gives an independent third 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. Furthermore, the Company continues to purchase back its common
stock when the opportunity arises. For the year ended April 30, 2013, the
Company purchased $36,000 worth of treasury stock and $41,000 was bought back
for the year ended April 30, 2012. We have been actively searching for stock-
holders that have been "lost" over the years. The payment of dividends
over the last eight fiscal years has also prompted many stockholders and/or
their relatives and descendants to sell back their stock to the Company.
Financing
Cash used in financing activities were $2,294,000 for the year ended April
30, 2013, which mostly consisted of dividends paid. The company declared a
dividend of $0.28 per share of common stock on September 30, 2012 and these
dividends were paid by October 31, 2012. Another dividend of $0.22 per share
of common stock was declared on December 16, 2012 and paid by December 21,
2012. Net cash used in financing activities was $1,055,000 for the year
ended April 30, 2012. A dividend of $0.23 per common share was declared and
paid during the second fiscal quarter last year.
Results of Operations
---------------------
GRI completed the fiscal year ending April 30, 2013, with a net profit of
25.89% net of sales. Net sales were at $10,510,000, up 2.19% over the pre-
vious year. The slight increase in sales is a result of continued quality
service and finding new customers. Cost of goods sold was 48.42% of net
sales for the year ended April 30, 2013 and 46.28% for the same period last
year. Management has been keeping labor and other manufacturing expenses in
check, therefore keeping the cost of goods sold percentage in the desired
range of 45 to 50%.
Page 8
Operating expenses were 25.91% of net sales for the year ended April 30, 2013
as compared to 24.19% for the corresponding period last year. Management's
goal is to keep the operating expenses around 30% or less of net sale, so the
goal has been met for the current fiscal year. Income from operations for
the year ended April 30, 2013 was at $2,698,000, which is an 11.69% decrease
from the corresponding period last year, which had income from operations of
$3,037,000.
Other income and expense results for the fiscal year ended April 30, 2013
produced a gain of $1,250,000. This is in comparison to a gain of $817,000
for the fiscal year ended April 30, 2012. Dividend and interest income was
$789,000, which was up 7.35% for the year. Dividend and intrerest income at
April 30, 2012 was $735,000. Gains on investments for the current fiscal
year were $460,000, which is a 801.96% increase over the prior year. Gains
on investments for the fiscal year ending April 30, 2012 were $51,000.
Net income for the year ended April 30, 2013 was $2,721,000, which is up
slightly from the prior year, which produced a net gain of $2,648,000.
Earnings per common share for the year ended April 30, 2013 were $0.54 per
share. EPS for the year ended April 30, 2012 was $0.52 per share.
Management expects sales to stay steady and hopefully increase for the fiscal
year ending April 30, 2014. The company'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's sales
have also improved in relation to the economy. We are always researching and
developing new products that will help our sales increase. We have many new
products (which will be discussed in detail below) that we are planning to
release into the marketplace during fiscal year end 2014. Also, we are
hopeful that extra growth can be achieved by volume increases with our
present customers and with the addition of new customers. We have an ex-
cellent marketing department that is always on the lookout for new clients.
At April 30, 2013, working capital increased by 2.38% 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 18.378 for the year ended
April 30, 2013 compared to 24.254 for the year ended April 30, 2012.
Accounts receivable and marketable securities have increased during the
current year, while cash decreased by 15.83% and current liabilities stayed
fairly constant, only increasing by 0.09%.
New product development
-----------------------
The GRI Engineering department is developing products in the following areas:
Wireless technology is a main area of focus for product development. We are
looking into adding wireless technology to some of our current products.
First of all, we are working on a wireless version of our Pool Alarm that
will be easy to install in current construction. We are also concentrating on
making products compatible with the increasing popular Z-Wave standard for
wireless home automation.
We are working on high security switches. We have a triple biased high
security switch design nearly complete and an adjustable magnet design com-
pleted for recessed mounting applications.
Our molding department is working on new molds for a case for new versions of
our Current Controller and a terminal cover of our 29-series switch. The new
versions of the Current Controller will allow the user to control more lights
with a single controller or to handle higher voltage applications for use
overseas.
Finally, we are researching our ability to get into fuel level sensing.
Several security companies from around the world have been looking for ways
to secure fuel tanks and trucks. Our emphasize 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 re-
sults 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 company sells its products to security alarm dis-
tributors, alarm installers, and original equipment manufacturers. Manage-
ment performs continuing credit evaluations of its customers' financial con-
dition 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 collectibility 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 as well as certain state and municipal debt securities. These
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.
Page 10
Inventories - Inventories are valued at the lower of cost or market value.
Costs are determined using the average cost-pricing method. The company 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 inter-
nal 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 Ken and
Bonnie Risk. Ken Risk was the Chairman of the Board and President and CEO of
the company until his death in February 2013. Bonnie Risk is Ken's wife, who
is a director and an employee of the company. This building contains the
Company's sales and accounting departments, maintenance department, engineer-
ing 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, 2013 and
2012.
The company also leases its airplane from former President and CEO Ken Risk,
who was also a majority stockholder, on a month-to-month basis requiring pay-
ments of $2,250. Airplane lease expenses charged to operations for the fis-
cal year ended April 30, 2013 were $22,500 and, were $27,000 for the fiscal
year ended April 30, 2012. During the year ended April 30, 2000, the Company
paid $210,000 and the former President/CEO contributed the airplane in trade
for another airplane. The Company and this officer jointly own the airplane.
The company has the airplane up for sale since there is no longer a pilot for
the aircraft.
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 day banking operations. Year end balances of accounts
held at this bank are $3,350,000 for the year ended April 30, 2013 and
$4,818,000 for the year ended April 30, 2012. The Company also received
interest income from FirsTier Bank in the amount of $2,000 for the year
ended April 30, 2013 and $3,000 for the year ended April 30, 2012.
Page 12
Item 8 Financial Statements
Index to Financial Statements
George Risk Industries, Inc.
Page
Independent Auditor's Report 13
Balance Sheets April 30, 2013 and 2012 14
Statements of Income
For the Years Ended April 30, 2013 and 2012 16
Statements of Comprehensive Income
For the Years Ended April 30, 2013 and 2012 17
Statement of Changes in Stockholders' Equity
For the Years Ended April 30, 2013 and 2012 18
Statements of Cash Flows
For the Years Ended April 30, 2013 and 2012 20
Notes to Financial Statements 21
Page 13
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, 2013 and 2012, 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, 2013. These financial
statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with 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 company 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's internal
control over financial reporting. Accordingly, we express no such opinion.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement pre-
sentation. 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, 2013 and 2012, and the results of their
operations and their cash flows for each of the years in the two year period
ended April 30, 2013, in conformity with accounting principles generally
accepted in the United States of America.
/s/ Haynie & Company
Littleton, Colorado
August 13, 2013, except for Notes 1, 6, 8 and 9, as to which the date is
July 28, 2014
George Risk Industries, Inc.
Balance Sheets
April 30, 2013 and 2012
2013 2012
ASSETS
Current Assets
Cash and cash equivalents $ 4,859,000 $ 5,773,000
Investments and securities 22,208,000 20,280,000
Accounts receivable:
Trade, net of $4,000 and $6,000 doubtful
account allowance for 2013 and 2012,
respectively 1,915,000 1,669,000
Other 1,000 1,000
Note receivable, current 5,000 4,000
Income tax overpayment 347,000 -
Inventories 2,074,000 2,351,000
Prepaid expenses 60,000 141,000
Deferred current income taxes - 119,000
------------- -------------
Total Current Assets $ 31,469,000 $ 30,338,000
Property and Equipment, net, at cost 701,000 771,000
Other Assets
Investment in Limited Land Partnership,
at cost 238,000 228,000
Projects in process 45,000 44,000
Note receivable 2,000 5,000
Other 1,000 1,000
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Total Other Assets $ 286,000 $ 278,000
TOTAL ASSETS $ 32,456,000 $ 31,387,000
============= =============
See accompanying notes to financial statements.
Page 14
George Risk Industries, Inc.
Balance Sheets
April 30, 2013 and 2012
Liabilities and Stockholders' Equity
2013 2012
Current Liabilities
Accounts payable, trade $ 68,000 $ 96,000
Dividends payable 817,000 589,000
Accrued expenses:
Payroll and related expenses 259,000 212,000
Income tax payable - 246,000
Deferred income taxes 432,000 -
------------- -------------
Total Current Liabilities $ 1,576,000 $ 1,143,000
Long-Term Liabilities
Aircraft ownership deposit payable - 5,000
Deferred income taxes 133,000 124,000
------------- -------------
Total Long-Term Liabilities $ 133,000 $ 129,000
Stockholders' Equity
Convertible preferred stock, 1,000,000 shares
authorized, Series 1--noncumulative, $20
stated value, 25,000 shares authorized,
4,100 issued and outstanding 99,000 99,000
Common stock, Class A, $.10 par value,
10,000,000 shares authorized, 8,502,881
shares issued 850,000 850,000
Additional paid-in capital 1,736,000 1,736,000
Accumulated other comprehensive income 743,000 278,000
Retained earnings 30,806,000 30,603,000
Less: treasury stock,3,467,356 and
3,460,282 shares, at cost (3,487,000) (3,451,000)
------------ -------------
Total Stockholders' Equity $ 30,747,000 $ 30,115,000
============= =============
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 32,456,000 $ 31,387,000
============= =============
See accompanying notes to financial statements.
Page 15
George Risk Industries, Inc.
Income Statements
For the Years Ended April 30, 2013 and 2012
Year Ended Year Ended
Apr 30, 2013 Apr 30, 2012
-------------- --------------
Net Sales $ 10,510,000 $ 10,285,000
Less: Cost of Goods Sold (5,089,000) (4,760,000)
------------- -------------
Gross Profit $ 5,421,000 $ 5,525,000
Operating Expenses:
General and Administrative 790,000 776,000
Sales 1,821,000 1,612,000
Engineering 71,000 54,000
Rent Paid to Related Parties 41,000 46,000
------------- -------------
Total Operating Expenses $ 2,723,000 $ 2,488,000
Income From Operations 2,698,000 3,037,000
Other Income (Expense)
Other 4,000 19,000
Interest Expense (3,000) -
Dividend and Interest Income 789,000 735,000
Gain on Investments 460,000 51,000
Gain on Sale of Assets - 12,000
------------- -------------
$ 1,250,000 $ 817,000
Income Before Provisions for Income Taxes 3,948,000 3,854,000
Provision for Income Taxes
Current Expense 1,000,000 1,087,000
Deferred tax expense 227,000 119,000
------------- -------------
Total Income Tax Expense 1,227,000 1,206,000
Net Income $ 2,721,000 $ 2,648,000
============= =============
Basic and Diluted Earnings
Per Share of Common Stock: $ 0.54 $ 0.52
Weighted Average Number of
Common Shares Outstanding 5,037,837 5,045,103
Weighted Average Number of
Common Shares Outstanding (Diluted) 5,058,337 5,065,603
See accompanying notes to financial statements.
Page 16
George Risk Industries, Inc.
Statements of Comprehensive Income
For the Years Ended April 30, 2013 and 2012
Year Ended Year Ended
Apr 30, 2013 Apr 30, 2012
-------------- --------------
Net Income $ 2,721,000 $ 2,648,000
------------- -------------
Other Comprehensive Income, Net of Tax
Unrealized gain (loss) on securities:
Unrealized holding gains (losses)
arising during period 736,000 (159,000)
Reclassification adjustment for
(gains) losses included in net income 62,000 154,000
Income tax expense related to other
comprehensive income (333,000) 2,000
------------- -------------
Other Comprehensive Income 465,000 (3,000)
Comprehensive Income $ 3,186,000 $ 2,645,000
============= =============
See accompanying notes to financial statements.
Page 17
George Risk Industries, Inc.
Statements of Changes in Stockholders' Equity
For the Years Ended April 30, 2013 and 2012
Common Stock
Preferred Stock Class A
----------------- -----------------
Shares Amount Shares Amount
Balances, April 30,
2011 4,100 $ 99,000 8,502,881 $850,000
Purchases of common
stock - - - -
Dividend declared at
$0.23 per common
share outstanding - - - -
Unrealized gain (loss),
net of tax effect - - - -
Net Income - - - -
________ ________ _________ ________
Balances, April 30,
2012 4,100 99,000 8,502,881 850,000
________ ________ _________ ________
Purchases of common
stock - - - -
Dividend declared at
$0.50 per common
share outstanding - - - -
Unrealized gain (loss),
net of tax effect - - - -
Net Income - - - -
-------- -------- --------- --------
Balance, April 30,
2013 4,100 $ 99,000 8,502,881 $850,000
======== ======== ========= ========
See accompanying notes to financial statements.
Page 18
George Risk Industries, Inc.
Statements of Changes in Stockholders' Equity
For the Years Ended April 30, 2013 and 2012
Accumulated
Treasury Stock Other
Paid-In (Common Class A) Comprehensive Retained
Captial Income Earnings Total
---------------------------------------------------------------------------
Shares Amount
$1,736,000 3,451,857 $(3,410,000) $ 281,000 $29,115,000 $28,671,000
- 8,425 (41,000) - - (41,000)
- - - - (1,160,000) (1,160,000)
- - - (3,000) - (3,000)
- - - - 2,648,000 2,648,000
---------- --------- ------------ ------------ ----------- -----------
1,736,000 3,460,282 (3,451,000) 278,000 30,603,000 30,115,000
---------- --------- ------------ ------------ ----------- -----------
- 7,074 (36,000) - - (36,000)
- - - - (2,518,000) (2,518,000)
- - - 465,000 - 465,000
- - - - 2,721,000 2,721,000
---------- --------- ----------- ----------- ----------- -----------
$1,736,000 3,467,356 $(3,487,000) $ 743,000 $30,806,000 $30,747,000
========== ========= =========== =========== =========== ===========
See accompanying notes to financial statements.
Page 18
George Risk Industries, Inc.
Statements of Cash Flows
For the Years Ended April 30, 2013 and 2012
Year Ended Year Ended
Apr 30, 2013 Apr 30, 2012
------------- -------------
Cash Flows from Operating Activities:
Net income $ 2,721,000 $ 2,648,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 174,000 160,000
(Gain) on sale of investments (460,000) (51,000)
(Gain) on sale of property and equipment 0 (12,000)
Bad debt expense (2,000) 0
Reserve for obsolete inventory 0 38,000
Deferred income taxes 227,000 119,000
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable (244,000) (95,000)
Inventories 277,000 (535,000)
Prepaid expenses 80,000 10,000
Employee receivables (1,000) 0
Income tax overpayment (593,000) 0
Increase (decrease) in:
Accounts payable (28,000) (32,000)
Accrued expense 47,000 0
Income tax payable 0 210,000
------------- -------------
Net cash provided by (used in)
operating activities $ 2,198,000 $ 2,460,000
Cash Flows From Investing Activities:
Other assets manufactured and purchased 1,000 169,000
Proceeds from sale of assets 0 20,000
(Purchase) of property and equipment (104,000) (298,000)
Proceeds from sale of marketable securities 89,000 168,000
(Purchase) of marketable securities (760,000) (891,000)
(Purchase) of long-term investment (10,000) (10,000)
(Loans) made to employees (3,000) (10,000)
Collections of loans to employees 5,000 7,000
(Purchase) of treasury stock (36,000) (41,000)
------------- -------------
Net cash provided by (used in)
investing activities $ (818,000) $ (886,000)
Cash Flows From Financing Activities:
Principal payments on long-term debt (4,000) 0
Dividends paid (2,290,000) (1,055,000)
------------- -------------
Net cash provided by (used in)
financing activities $ (2,294,000) $ (1,055,000)
Net Increase (Decrease) in Cash and
Cash Equivalents $ (914,000) $ 519,000
============= =============
See accompanying notes to financial statements
Page 19
Cash and Cash Equivalents, beginning
of period $ 5,773,000 $ 5,254,000
Cash and Cash Equivalents,
end of period $ 4,859,000 $ 5,773,000
============= =============
Supplemental Disclosure for Cash Flow Information:
Cash Payments for:
Income taxes paid $ 1,607,000 $ 855,000
Interest expense $ 3,000 $ 0
Cash receipts for:
Income taxes $ 19,000 $ 21,000
See accompanying notes to financial statements
Page 20
George Risk Industries, Inc.
Notes to Financial Statements
April 30, 2013
1. Nature of Business and Summary of Significant Accounting Policies
Nature of Business-The company is engaged in the design, manufacture, and
marketing of computer keyboards, push-button switches, security alarm
components, pool alarms and hydro sensors.
Restatement - In its previously filed financial statements for the year
ended April 30, 2013, and included in its annual report in Form 10-K, the
Company incorrectly calculated deferred income taxes. Accordingly, the
Company has restated its financial statements for the period ended April
30, 2013. The table below reflects the effect of restatement on the
Company's financial statements for the year.
Net income prior to restatement $ 3,788,000
Recalculated deferred income taxes (1,067,000)
------------
Net income after restatement $ 2,721,000
============
Retained earnings prior to restatement $31,873,000
Recalculated deferred income taxes (1,067,000)
------------
Retained earnings after restatement $30,806,000
============
The tables below show the effect of restatement of the Company's
financial statements for the year ended April 30, 2013 as described
above.
As Originally 04/30/2013 04/30/2013
Balance Sheet - April 30, 2013 Reported Adjustments As Restated
Current Assets
Deferred Income Taxes $ 635,000 $ 635,000 $ -
Current Liabilies
Deferred Income Taxes $ - $ 432,000 $ 432,000
Stockholders' Equity $31,873,000 $(1,067,000) $30,806,000
-----------------------------------------
As Originally 04/30/2013 04/30/2013
Income Statement - April 30, 2013 Reported Adjustments As Restated
Deferred tax (benefit) expense $ (840,000) $ 1,067,000 $ 227,000
Net Income $ 3,788,000 $(1,067,000) $ 2,721,000
-----------------------------------------
Statement of Cash Flows - April 30, 2013
As Orginally 04/30/2013 04/30/2013
Reported Adjustments As Restated
Net income $ 3,788,000 $(1,067,000) $ 2,721,000
Deferred income taxes $ (840,000) $ 1,067,000 $ 227,000
-----------------------------------------
Page 21
Statement of Stockholders' Equity
April 30, 2013
As Originally 04/30/2013 04/30/2013
Reported Adjustments As Restated
Net income $ 3,788,000 $(1,067,000) $ 2,721,000
Retained earnings $31,873,000 $(1,067,000) $30,806,000
-----------------------------------------
Statement of Comprehensive Income
April 30, 2013
As Originally 04/30/2013 04/30/2013
Reported Adjustments As Restated
Net income $ 3,788,000 $(1,067,000) $ 2,721,000
Retained earnings $ 4,253,000 $(1,067,000) $ 3,186,000
-----------------------------------------
Cash and Cash Equivalents - The company considers all investments purchased
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 company sells its products
to security alarm distributors, alarm installers, and original equipment
manufacturers. The company 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 collectibility 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 company has
recorded an allowance for doubtful accounts of $4,000 for the year ended
April 30, 2013 and $6,000 for the year ended April 30, 2012. For the fiscal
year ended April 30, 2013 bad debt expense was a net credit of $1,926 due
to bad debt recoveries during the year. For the fiscal year ended April 30,
2012, bad debt expense was a net credit of $213.
Inventories - Inventories are stated at the lower of cost or market. Cost is
determined using the average cost-pricing method. The company uses standard
costs to price its manufactured inventories approximating average costs.
Page 22
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:
Classification Useful Life 2013 2012
in Years Cost Cost
Dies, jigs, and molds 3-7 $1,570,000 $1,503,000
Machinery and equipment 5-10 1,137,000 1,134,000
Furniture and fixtures 5-10 147,000 147,000
Leasehold improvements 5-32 178,000 178,000
Buildings 20 658,000 658,000
Automotive and aircraft 3-5 411,000 406,000
Software 2-5 139,000 129,000
Land N/A 13,000 13,000
----------- -----------
Total 4,253,000 4,168,000
Accumulated depreciation (3,552,000) (3,397,000)
----------- -----------
Net $ 701,000 $ 771,000
=========== ===========
Depreciation expense of $174,000 and $160,000 were charged to operations
for the years ended April 30 2013 and 2012, 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 included in
selling expenses. Advertising expense amounted to $243,000 and $221,000
for the years ended April 30, 2013 and 2012, 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.
Page 23
The flow-through method of accounting for tax credits has been adopted by
the 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 owner-
ship 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 inter-
nal 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, 2013, the Company operated in two segments
organized by security line products and all other products. See Note 9 for
further segment information disclosures.
Page 24
Reclassifications - Certain reclassifications have been made to conform to
the current year presentation. The total net income and equity are unchanged
due to those reclassifications.
Recently Issued Accounting Pronouncements - In May 2012, we adopted Account-
ing Standards Update No. 2011-05, Presentation of Comprehensive Income. This
guidance requires an entity to present the total of comprehensive income, the
components of net income, and the components of other comprehensive income
either in a single continuous statement of comprehensive income or in two
separate but consecutive statements and eliminates the option to present the
components of other comprehensive income as part of the statement of equity.
We have continued to present a separate statement of comprehensive income and
the adoption of this guidance did not have any impact on our results of
operations, financial position or cash flows.
2. Inventories
Inventories at April 30, 2013 and 2012 consisted of the following:
2013 2012
---------- ----------
Raw materials $1,552,000 $1,682,000
Work in process 412,000 543,000
Finished goods 275,000 291,000
----------- -----------
2,239,000 2,516,000
Less: allowance for obsolete inventory (165,000) (165,000)
----------- -----------
Totals $2,074,000 $2,351,000
=========== ===========
Page 25
3. Marketable Securities
The Company has investments in publicly traded equity securities as well as
certain state and municipal debt securities. These securities are classified
as available-for-sale securities, and are reported at fair value. Available-
for-sale investments in debt securities mature between May 2013 and November
2048. 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 stockholders' equity.
Dividend and interest income are reported as earned.
As of April 30, 2013, investments available-for-sale consisted of the
following:
Gross Gross
Cost Unrealized Unrealized Fair
Basis Gains Losses Value
------------ ------------ ------------ ------------
Municipal bonds $ 7,596,000 $ 291,000 $ (12,000) $ 7,875,000
REITs $ 67,000 2,000 (2,000) $ 67,000
Equity securities $10,939,000 $ 1,099,000 $ (102,000) $11,936,000
Money markets and CDs $ 2,330,000 $ 0 $ 0 $ 2,330,000
------------ ------------ ------------ ------------
Total $20,932,000 $ 1,392,000 $ (116,000) $22,208,000
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 loss. The investments are periodically evaluated to
determine if impairment changes are required. As a result of this standard,
management recorded impairment losses of $20,000 for the year ended April 30,
2013 and $72,000 for the year ended April 30, 2012.
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 April 30, 2013.
Page 26
Less than 12 months 12 months or greater Total
----------------------- --------------------- ---------------------
Fair Unrealized Fair Unrealized Fair Unrealized
Value Loss Value Loss Value Loss
...........................................................................
Municipal bonds
$ 657,000 $ (8,000) $ 220,000 $ (4,000) $ 877,000 $ (12,000)
Equity securities
$1,033,000 $ (71,000) $ 143,000 $ (33,000) $1,176,000 $ (104,000)
Total
$1,690,000 $ (79,000) $ 363,000 $ (37,000) $2,053,000 $ (116,000)
Municipal Bonds
The unrealized losses on the Company's investments in municipal bonds were
caused by interest rate increases. The contractual terms of these invest-
ments 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 occurs, which may be
maturity, the Company does not consider these investments to be other-than-
temporarily impaired at April 30, 2013.
Marketable Equity Securities
The Company's investments in marketable equity securities consist of a wide
variety of companies. Investments in these companies include growth, growth
income, and foreign investment objectives. Management has evaluated the
individual holdings, and because of the recent decline in the stock market,
does not consider these investments to be other-than-temporarily impaired
at April 30, 2013.
Page 27
4. 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 and its subsidiaries. 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 contributions from eligible employees who
may contribute a percentage of their eligible compensation, limited and
subject to statutory limits. The Plan is also funded by discretionary
matching employer contributions from the company. 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 of approximately $12,000 were paid during
the fiscal year ending April 30, 2013 and $12,000 worth of matching
contributions were paid during the fiscal year ended April 30, 2012. There
were no discretionary contributions paid during either of the fiscal years
ending April 30, 2013 and 2012.
5. Stockholders' Equity
Preferred Stock - Each share of the Series #1 preferred stock is convertible
at the option of the holder into five shares of Class A common stock and is
also redeemable at the option of the board of directors at $20 per share.
The holders of the convertible preferred stock shall be entitled to a divid-
end at a rate up to $1 per share annually, payable quarterly as declared by
the board of directors. No dividends were declared or paid during the two
years ended April 30, 2013.
Convertible preferred stock without par value may be issued from time to time
as determined by the board of directors. Shares of different series shall be
of equal rank but may vary as to terms and conditions.
Class A Common Stock - The holders of the Class A common stock are entitled
to receive dividends as declared by the board of directors. No dividends may
be paid on the Class A common stock until the holders of the Series #1 pre-
ferred stock have been paid a dividend for the four prior quarters and
provision has been made for the full dividend in the current fiscal year.
Page 28
During the fiscal year ended April 30, 2013, the Company purchased 7,074
shares of Class A common stock. This was accomplished by stockholders
contacting the company.
Stock Transfer Agent - The Company does not have an independent stock trans-
fer agent. The company maintains all stock records.
6. Earnings Per Share
Basic and diluted earnings per share, assuming convertible preferred stock
was converted for each period presented are:
April 30, 2013
-----------------------------------
Income Shares Per-Share
(Numerator) (Denominator) Amount
Net Income $2,721,000
==========
Basic EPS $2,721,000 5,037,837 $0.5401
Effect of dilutive
Convertible Preferred
Stock - 20,500 (0.0022)
---------- --------- --------
Diluted EPS $2,721,000 5,058,337 $0.5379
========== ========= ========
April 30, 2012
-----------------------------------
Income Shares Per-Share
(Numerator) (Denominator) Amount
Net Income $2,648,000
----------
Basic EPS $2,648,000 5,045,103 $0.5249
Effect of dilutive
Convertible Preferred
Stock - 20,500 (0.0022)
---------- --------- --------
Diluted EPS $2,648,000 5,065,603 $0.5227
========== ========= ========
Page 29
7. Commitments, Contingencies, and Related Party Transactions
The Company leases a building from Ken and Bonnie Risk. Ken Risk was the
Chairman of the Board and the President and CEO of the company until his
death in February 2013. Bonnie Risk is Ken's wife, is also an director and
employee of the 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, 2013 and 2012.
The company also leased its airplane from former President and CEO Ken Risk,
who was also a majority stockholder, on a month-to-month basis requiring
payments of $2,250. Airplane lease expenses charged to operations for the
fiscal year ended April 30, 2013 was $22,500 and it was $27,000 for the fis-
cal year ended April 30, 2012. During the year ended April 30, 2000, the
Company paid $210,000 and the President/CEO contributed the airplane in trade
for another airplane. The Company and this officer jointly own the airplane.
The company has the airplane up for sale since there is no longer a pilot for
the aircraft.
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 day banking operations. Year end balances of accounts
held at this bank are $3,350,000 for the year ended April 30, 2013 and
$4,818,000 for the year ended April 30, 2012. The Company also received
interest income from FirstTier Bank in the amount of $2,000 for the year
ended April 30, 2013 and $3,000 for the year ended April 30, 2012.
Page 30
8. Income Taxes
Reconciliation of income taxes with Federal and State taxable income:
2013 2012
------------ ------------
Income before income taxes $3,948,000 $3,854,000
State income tax deduction (196,000) (211,000)
Capital loss carryforwards
(utilized) accumulated (479,000) (120,000)
Interest and dividend income (601,000) (603,000)
Domestic production activities
deduction (284,000) (266,000)
Nondeductible expenses
and timing differences 27,000 (85,000)
----------- -----------
Taxable income $2,415,000 $2,569,000
=========== ===========
The following schedule reconciles the provision for income taxes to the
amount computed by applying the statutory rate to income before income taxes:
Income before taxes at statutory
rate $1,650,000 $1,611,000
Increase (decrease)income
taxes resulting from:
State income taxes (82,000) (88,000)
Interest and dividend income (251,000) (252,000)
Domestic production activities (119,000) (111,000)
Deferred taxes 227,000 119,000
Other temporary and
permanent differences (198,000) (73,000)
----------- -----------
Income tax expense $1,227,000 $1,206,000
=========== ===========
Federal Tax Rate 34.0% 34.0%
State Tax Rate 7.8% 7.8%
----- -----
Blended statutory rate 41.8% 41.8%
===== =====
Page 31
Deferred tax asset (liabilities) consist of the following omponents at
April 30, 2013 and 2012:
Deferred tax current assets (liabilities):
Capital loss carryforward $ 0 $ 287,000
Allowance for doubtful accounts 2,000 0
Inventory valuation 69,000 0
Accrued vacation 30,000 32,000
Accumulated unrealized (gain)/loss on
investments (533,000) (200,000)
---------- -----------
Net deferred tax assets (liabilities) $ (432,000) $ 119,000
=========== ===========
Deferred long-term tax assets (liabilities):
Depreciation (133,000) (124,000)
----------- -----------
Net deferred long-term tax assets
(liabilities) $ (133,000) $ (124,000)
=========== ===========
All capital loss carryforwards were used up during the current fiscal year.
Page 32
9. Business Segments
The following is financial information relating to industry segments:
April 30,
2013 2012
-----------------------------
Net revenue:
Security alarm products $ 9,200,000 $ 9,045,000
Other products 1,310,000 1,240,000
------------- -------------
Total net revenue $ 10,510,000 $ 10,285,000
============= =============
Income from operations:
Security alarm products $ 2,362,000 $ 2,671,000
Other products 336,000 366,000
------------- -------------
Total income from operations $ 2,698,000 $ 3,037,000
====+======== =============
Identifiable assets:
Security alarm products $ 3,778,000 $ 3,463,000
Other products 797,000 1,213,000
Corporate general 27,881,000 26,711,000
------------- -------------
Total assets $ 32,456,000 $ 31,387,000
============= =============
Depreciation and amortization:
Security alarm products $ 23,000 $ 24,000
Other products 131,000 112,000
Corporate general 20,000 24,000
------------- -------------
Total depreciation and
amortization $ 174,000 $ 160,000
============= =============
Capital expenditures:
Security alarm products $ 12,000 $ 0
Other products 71,000 281,000
Corporate general 21,000 17,000
------------- ------------
Total capital expenditures $ 104,000 $ 298,000
============= ============
Page 33
10. Concentrations
The company maintains its cash balance in a financial institution in Kimball,
Nebraska. Accounts at this institution are insured by the Federal Deposit
Insurance Corporation for up to $250,000. For the years ended April 30, 2013
and 2012, the Company had uninsured balances of $3,100,000 and $4,568,000,
respectively. Management believes that this financial institution is
financially sound and the risk of loss is minimal. The Company also main-
tains cash balances in money market funds at the above-mentioned financial
institution. Such balances are not insured.
The company has sales to a security alarm distributor representing 40% of
total sales for the year ended April 30, 2013 and 41% for the year ended
April 30, 2012. This distributor accounted for 55% and 51% of accounts
receivable at April 30, 2013 and 2012, respectively.
Security switch sales made up 84% of the total sales for the fiscal year
ended April 30, 2013 and and 88% of the total sales for the fiscal year ended
April 30, 2012.
11. Fair Value Measurements
The carrying value of our 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 measurements) and the lowest priority to
unobservable inputs (Level 3 measurements). The levels of the fair value
hierarchy under US GAAP are described below:
Page 34
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 in-
struments in active markets, quoted prices for identical
or similar instruments in markets that are not active,
and model-based valuation techniques for which all sig-
nificant 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 in-
clude use of option pricing models, discounted cash flow
models and similar techniques.
Marketable Securities
---------------------
As of April 30, 2013, our investments consisted of money markets, publicly
traded equity securities as well as certain state and municipal debt
securities. Our 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 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, the inputs are re-
corded as Level 2.
Fair Value Hierarchy
--------------------
The following tables set 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 class-
ified in their entirety based on the lowest level of input that is sig-
nificant to the fair value measurement.
Assets Measured at Fair Value on a Recurring Basis
as of April 30, 2014
---------------------------------------------------
Level 1 Level 2 Level 3 Total
------- ------- ------- -------
Assets:
Money Markets and CDs $ 2,330,000 $ 0 $ 0 $ 2,330,000
Equity Securities $11,935,000 $ 0 $ 0 $11,935,000
Municipal Bonds and
RETIs $ 0 $ 7,943,000 $ 0 $ 7,943,000
------------ ------------ ---------- ------------
Total fair value of
assets measured on a
recurring basis $14,265,000 $ 7,943,000 $ 0 $22,208,000
Page 35
Item 9 Disagreements on Accounting and Financial Disclosures
There were no disagreements with accountants on accounting and financial
disclosure.
Item 9A Controls and Procedures
Evaluation of disclosure controls and procedures:
-------------------------------------------------
Based on their evaluation of our disclosure controls and procedures (as de-
fined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of April
30, 2013, our president and chief executive officer (also working as our
chief financial officer) has concluded that our disclosure controls and
procedures are effective such that information required to be disclosed by us
in the reports that we file or submit under the Exchange Act is (i) recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and (ii) accumulated and communi-
cated to our management, including our chief executive officer (also working
as our chief financial officer), as appropriate to allow timely decisions re-
garding disclosure. A control system cannot provide absolute assurance,
however, that the objectives of the control systems are met, and no evalu-
ation of controls can provide absolute assurance that all control issues and
instances of fraud, if any, within a company have been detected.
Internal control over financial reporting:
------------------------------------------
The Company's management is responsible for establishing and maintaining
adequate internal controls over financial reporting for the Company. Due to
limited resources, Management conducted an evaluation of internal controls
based on criteria established in Internal Control - Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO "). The results of this evaluation determined that our
internal control over financial reporting was ineffective as of April 30,
2013, due to a material weakness. A material weakness in internal control
over financial reporting is defined as a deficiency, or a combination of de-
ficiencies, in internal control over financial reporting, such that there is
a reasonable possibility that a material misstatement of the Company's annual
or interim financial statements will not be prevented or detected on a timely
basis. A significant deficiency is a deficiency, or a combination of de-
ficiencies, in internal control over financial reporting that is less severe
than a material weakness, yet important enough to merit attention by those
responsible for oversight of our financial reporting.
Management's assessment identified the following material weakness in inter-
nal control over financial reporting:
* The small size of our Company limits our ability to achieve the desired
level of separation of internal controls and financial reporting,
particularly as it relates to financial reporting and deferred taxes.
Due to the passing of our CEO, the current CEO and CFO roles are being
fulfilled by the same individual. We do not have an audit committee.
Until such time as the Company is able to hire a Controller, we do not
believe we meet the full requirement for separation for financial re-
porting purposes and deferred taxes.
Page 36
As a result of the material weakness in internal control over financial re-
porting described above, the Company's management has concluded that, as of
April 30, 2013, the Company's internal control over financial reporting was
not effective based on the criteria in Internal Control - Integrated Frame-
work issued by the COSO.
To date, the Company has not been able hire a controller. We will continue
to follow the standards for the Public Company Accounting Oversight Board
(United States) for internal control over financial reporting to include
procedures that:
* Pertain to the maintenance of records in reasonable detail accurately
that fairly reflect the transactions and dispositions of the Company's
assets;
* Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of the financial statements in
accordance with generally accepted accounting principles, and that
receipts and expenditures are being made only in accordance with auth-
orizations of management and the Board of Directors; and
* Provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, or disposition of the Company's
assets that could have a material effect on the financial statements.
Due to the passing of the CEO during the fiscal year 2013, our internal con-
trol structure has changed such that there is no separation of duties for
financial reporting and deferred taxes, as discussed above.
This annual report does not include an attestation report of the Corpor-
ation's registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by
the Corporation's registered public accounting firm pursuant to Section
404(c) of the Sarbanes-Oxley Act of 2002, as amended, that permit the Cor-
poration to provide only the management's report in this annual report.
Item 9B Other Information
None.
Page 37
Part III
Item 10 Directors and Executive Officers of the Registrant
(a & b) Identification of Directors and Executive Officers
All of the executive officers of the corporation serve at the pleasure of the
board of directors and do not have fixed terms.
The following information as of April 30, 2013 is furnished with respect to
each director and executive officer:
Director or
Name Principal Occupation or Employment Age Officer Since
---- ---------------------------------- --- -------------
Stephanie M. Chairman of the Board, Chief Executive 41 August 8, 1999
Risk McElroy Officer and Chief Financial Officer
Sharon
Westby Secretary/Treasurer 61 June 16, 2006
Jerry
Andersen Director, retired 82 August 28, 1978
Donna
Debowey Director, retired GRI plant manager 75 July 12, 2005
Joel H.
Wiens Director, FirsTier Banks 83 Sept 6, 2007
Bonnie P.
Risk Director, Stock Transfer Agent at GRI 63 March 15, 2013
The following director compensation table is furnished with respect to each
director that served during the year ended April 30, 2013:
Non-equity Non-
incentive qualified
Director's plan deferred
Fees Stock Option compen- compensation
Name Paid Awards Awards sation earnings Total
---- -------- ------ ------ ---------- ------------ -----
Stephanie
Risk-McElroy (1) -- -- -- -- -- --
Sharon
Westby (1) -- -- -- -- -- --
Jerry
Andersen (2) $ 150.00 -- -- -- -- $ 150.00
Donna
Debowey (2) $ 150.00 -- -- -- -- $ 150.00
Joel H.
Wiens (2) $ 150.00 -- -- -- -- $ 150.00
Bonnie P.
Risk (1) -- -- -- -- -- --
The inside directors (1), or employees of the company, do not receive
additional compensation for their services. Outside directors (2) are paid
$150 per meeting for their services.
Page 38
(c) Identification of Certain Significant Employees
None.
(d) Family Relationships
Stephanie Risk-McElroy and Bonnie P. Risk have a daughter-mother relation-
ship.
(e) Business Experience of Directors and Executive Officers
Stephanie Risk-McElroy, Chairman of the Board, Chief Executive Officer and
Chief Financial Officer, has over seventeen years of experience in the
accounting field. Ms. Risk-McElroy graduated from Hastings College with a
degree in Accounting. Stephanie worked for Platte Valley Sales from May 1990
until January 1997 as a staff accountant. In 1997, she pursued her career
with an accounting manager position at Kershner's Auto Korner. She joined
the accounting staff at GRI in 1999 and then was promoted to CFO upon re-
tirement of the prior CFO. Upon the death of her father, Ken R. Risk, in
February, 2013, she was appointed to the position of Chairman of the Board
and Chief Executive Officer.
Ms. Risk-McElroy serves on the Board of Directors of GRI, as a direct link to
the financial condition of the company. She and her staff oversee all the
accounting obligations of the Company. She has knowledge and experience in
business outside of the company that makes her an asset to the Board. And
with her new appointment as President, she oversees all the day to day oper-
ations as well.
Sharon Westby, the corporate secretary, worked at GRI right after high school
for a couple of years as the personal secretary to the founder of the com-
pany, George Risk, who was president and CEO. Before she returned to the
company in 1982, Sharon was a Clerk Steno 1 at Jackson County Welfare in
Kansas City, MO, worked in medical records at the Kimball County Hospital in
Kimball, NE, and also managed motels in Texas and Nebraska. She is the Ex-
ecutive Assistant to the President and CEO and Sales Administrator of the
Keyboard and Switch division of GRI.
Ms. Westby continues in her position on the Board of Directors at GRI with
over 27 years of experience with the company. She has seen the company
through many years of ups and downs, has great knowledge of her product line
and is very customer oriented in trying to sell her products to the "non-
security use" industry.
Jerry Andersen, director, worked in the banking industry from 1967 until his
retirement in August 2000. He was the Senior Vice President at American
National Bank in Kimball, NE as well as serving several years in high pos-
itions at First State Bank in Kimball. His position with the bank for many
years was as loan officer and for the last four years he held the position of
Compliance Officer.
Mr. Andersen has served many years on the Board of Directors at GRI. He
brings knowledge in financial and business matters to the table and although
is retired, he still has an active interest in the success of the company.
Page 39
Donna Debowey, director, worked in various retail stores and restaurants
until she started at GRI in 1968. She started on the production line, but
quickly worked her way up the ranks. She has been a Production Line Super-
visor, Director of Quality Control and was named Plant Manager and Senior
Vice President in 1998. She held that position until her retirement in 2003.
Ms. Debowey made the transition from employee of GRI to a member of the Board
of Directors with no hesitation after her retirement. She brings her 40+
years of experience in the industry to the table and has a vested interest in
seeing the continued success of the company that she helped to build.
Joel H. Wiens, Director, is an entrepreneur with many business interests. He
is a director and principal shareholder of FirsTier Banks Nebraska/Wyoming,
director of FirsTier II BanCorporation (which owns FirsTier Bank Nebraska/
Wyoming), Chairman of Rite-A-Way Industries (lodging and hospitality
industries), real estate investments, and ranching and livestock.
Mr. Wiens took his place on the Board of Directors when his predecessor Mike
Nelson, (who is affiliated with Mr. Wiens' financial institutions) retired
from the Board to take another position within the Banks and moved away.
Joel's knowledge and experience in business and industry span 50+ years and
serves as a valuable asset to GRI.
Bonnie P. Risk, Director, attended Wayne State College in Wayne, Nebraska.
Upon returning back home to Columbus, NE, she worked in factory positions.
Upon her marriage to Ken Risk, she became a homemaker, raising 3 children and
working at several sales positions. In 1981, she and Ken started Platte
Valley Sales in Hastings, Nebraska, and her expertise was in accounting and
sales. For 8 years, she ran the Hastings business while Ken devoted his time
to both GRI in Kimball and Platte Valley Sales in Hastings. Ken and Bonnie
moved to Kimball in 1997. In 1998, she began at GRI in sales support. She
continues in sales support, and became the company stock transfer agent in
2004 upon retirement of Eileen Risk and is an assistant to the chief finan-
cial officer.
(f) Involvement in Certain Legal Proceedings
None.
(g) Promoters and Control Persons
None.
Page 40
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Exchange Act requires our executive officers and
directors and persons who own more than 10% of a registered class of our
equity securities to file with the SEC initial statements of beneficial
ownership, reports of changes in ownership and annual reports concerning
their ownership of our common stock and other equity securities, on Forms 3,
4 and 5 respectively. Executive officers, directors and greater than 10%
shareholders are required by the SEC regulations to furnish us with copies of
all Section 16(a) reports that they file.
Based solely on our review of copies of the Section 16(a) reports filed for
the fiscal year ended April 30, 2013, we believe that all filing requirements
applicable to our officers, directors, and greater than 10% beneficial owners
were complied with.
Code of Ethics and Code of Business Conduct
The company does not have a written code of ethics at this time. The company
is a small business and employees know that the President of the company must
approve all material business. The company also has checks and balances to
make sure that there is not any fraud or illegal activities taking place.
Corporate Governance
Nominating and Compensation Committees
---------------------------------------
We do not have standing nominating or compensation committees, or committees
performing similar functions. Our Board of Directors believes that it is not
necessary to have a standing compensation committee at this time because our
Board of Directors adequately performs the functions of such committee.
Our Board of Directors also is of the view that it is appropriate for us not
to have a standing nominating committee because our Board of Directors has
performed and will perform adequately the functions of a nominating
committee. Our Board of Directors has not adopted a charter for the nomin-
ation committee. There have not been any defined policy or procedure re-
quirements for stockholders to submit recommendations or nomination for
directors. Our Board of Directors does not believe that a defined policy
with regard to the consideration of candidates recommended by stockholders is
necessary at this time because we believe that, given the early stages of our
development, a specific nominating policy would be premature and of little
assistance until our business operations are at a more advanced level.
Page 41
Audit Committee
----------------
We do not have a standing audit committee at the present time. Our Board of
Directors has determined that we do not have a board member that qualifies as
an "audit committee financial expert" as defined in Item 401(h) of Regulation
S-K, nor do we have a board member that qualifies as "independent" as the
term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Ex-
change Act of 1934, as amended.
Other Committees
-----------------
All proceedings of our Board of Directors for the year ended April 30, 2013
were conducted by resolutions consented to in writing by our directors and
filed with the minutes of the proceedings of the Board of Directors. Our
Company currently does not have any committees.
Page 42
Item 11 Executive Compensation
The following table sets forth certain information regarding the compensation
paid to or accrued by the company for the chief executive officer for
services rendered in all capacities during each of the company's fiscal year
ended April 30, 2013 and 2012 (no other officer had compensation over
$100,000):
Change in
Pension
Value and
Non- Non-
Equity qualified
Incentive Deferred All
Name and Plan Compen Other
principal Stock Option Compen- sation Compen-
position Year Salary Bonus Awards Awards sation Earnings sation Total
--------- ---- ------- ----- ------ ------ --------- -------- ------- -----
Ken R.
Risk, 2013 $73,000 $ 82,000 -- -- -- -- $2,000 $157,000
Former
Chief
Executive 2012 $83,000 $102,000 -- -- -- -- $2,000 $187,000
Officer
Ken R. Risk did not have an employment contract with the company. He received
a base salary and bonus/commission based on a percentage of sales for the
year. Other compensation consisted of a yearly discretionary match by the
company, which included the contribution match made by the company into the
401K plan. The match consists of 25% of the deferral that is made by the
employee, up to 4% of their earnings.
Page 43
Item 12 Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding our Common Stock
beneficially owned as of April 30, 2013, for (i) each stockholder known to be
the beneficial owner of 5% or more of our outstanding Common Stock, (ii) each
executive officer and director, and (iii) all executive officers and
directors as a group. In general, a person is deemed to be a beneficial
owner of a security if that person has or shares the power to vote or direct
the voting of such security, or the power to dispose or to direct the dis-
position of such security. A person is also deemed to be a beneficial owner
of any securities of which the person has the right to acquire beneficial
ownership within 60 days. Share of Common Stock subject to options, warrants
or convertible securities exercisable or convertible within 60 days are
deemed outstanding for computing the percentage of the person or entity hold-
ing such options, warrants or convertible securities but are not deemed out-
standing for computing the percentage of any other person. Percentages are
determined based on 5,035,525 shares of Common Stock of the Company issued
and outstanding and less treasury shares as of April 30, 2013. To the best
of our knowledge, subject to community and marital property laws, all persons
named have sole voting and investment power with respect to such shares,
except as otherwise noted.
% of Class
Name and Address Number of Shares of Stock
of Beneficial Owener (1) of Common Stock (2) Outstanding (3)
------------------------ ------------------- ---------------
Ken R. Risk
Prior Chairman and CEO 2,187,056 43.4%
Stephanie M. Risk-McElroy
Chairman, CEO & CFO 1,775 Less than 1%
Donna Debowey
Director 500 Less than 1%
Bonnie Risk
Director 28,685 Less than 1%
Bonita Risk Family Irrevocable Trust 732,470 14.5%
Sharon Westby
Secretary 250 Less than 1%
Daniel Douglas
Vice President, Materials 250 Less than 1%
------------ -------------
All Officers and Directors as a group
(6 persons and 1 trust) 2,950,986 58.6%
5% Stockholders:
----------------
RWWM, Inc.
3260 Penryn Road
Suite 100
Loomis, CA 95650 291,743 5.79%
(1) Unless otherwise indicated, the address of the named beneficial owner is
George Risk Industries, Inc., 802 S. Elm Street, Kimball, NE 69145
Page 44
(2) Security ownership information for named beneficial owners (other than
executive officers and directors of the Company) is taken from statements
filed with the Securities and Exchange Commission pursuant to information
made known by the Company and from the Company's transfer agent.
(3) Based on the net shares outstanding as of April 30, 2013. This consists
of Common Shares issued and outstanding (8,502,881) less treasury shares
(3,467,356).
Changes in Control
------------------
We are not aware of any arrangements, including any pledge by any person of
our securities, the operation of which may result in a change in control of
the Company.
Item 13 Certain Relationships and Related Party Transactions
During each of three years ended April 30, 2013, 2012, and 2011, the company
executed transactions with related entities and individuals. Each of the
transactions was in terms at least as favorable as could be obtained from
unrelated third parties.
Related Party 2013 2012 2011
Airplane Lease
Ken R. Risk,
Former President and CEO $ 22,500 $ 27,000 $ 27,000
Building and Warehouse
Leases/Rentals
Ken R. Risk,
Former President and CEO $ 15,350 $ 18,420 $ 18,420
Bonnie Risk, Director $ 3,070 -- --
Bank Balances
Joel Wiens, Director $3,349,596 $4,818,466 $4,648,365
Interest Income
Joel Wiens, Director $ 2,211 $ 3,150 $ 8,373
Page 45
Item 14 Principal Accountant Fees and Services
1)Audit Fees
For each of the last two fiscal years the company incurred aggregate fees and
expenses for professional services rendered by our principal accountants for
the audit of our annual financial statements and review of our financial
statements for Form 10-Q. The amounts are listed below:
FYE 2013 $38,000 Haynie & Company
FYE 2012 $37,000 Haynie & Company
2) Audit-Related Fees
The company incurred aggregate fees and expenses for professional services
rendered by our principal accountants for the audit of the company's employee
benefit plan. The amounts are listed below:
FYE 2013 $ 6,000 Haynie & Company
FYE 2012 $ 5,800 Haynie & Company
3) Tax Fees
The company incurred aggregate fees or expenses for professional services
rendered by our principal accountants for tax compliance, tax advice, and
tax planning for the last two fiscal years. The amounts are listed below:
FYE 2013 $ 3,945 Haynie & Company
FYE 2012 $ 1,500 Haynie & Company
4) All Other Fees
There were no other fees incurred during each of the last two fiscal years.
5) The Board of Directors, considered whether, and determined that, the
auditor's provisions of non-audit services were compatible with maintaining
the auditor's independence. All the services described above were approved
by the Board of Directors pursuant to its policies and procedures.
Page 46
Part IV
Item 15 Exhibits and Reports on Form 8-K
3.(1).a Articles of Incorporation - Filed as Exhibit 5 to the
Registrant's Form 10-K for the fiscal year ended
April 10, 1970, and incorporated by reference herein
3.(i).b Certificate of Amendment to the Articles of
Incorporation of the Registrant - Filed as Exhibit 1.2
to the Registrant's Form 10-K for the fiscal year
ended April 30, 1971, and incorporated by reference
herein
3.(ii).c By-laws - Filed as Exhibit 1.3 to the Registrant's Form
10-K for the fiscal year ended April 10, 1971, and
incorporated by reference herein
10.1 Vendor agreement dated as of February 16, 2011 between Honeywell
International, Inc., acting through the ADI business of its
Security Group ("ADI") and George Risk Industries, Inc. - filed
herewith (see footnote below)
10.2 8-K for special dividend
10.3 8-K Ken Risk death
31.1 Certification pursuant to Rule 13a-14(a) of the Chief Executive
Officer (Principal Financial and Accounting Officer)
32.1 Certification pursuant to 18 U.S.C. 1350 of the Chief Executive
Officer (Principal Financial and Accounting Officer)
_____________________________________
Portions of this exhibit have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 under the Securities Exchange Act of
1934. The request is currently under review.
Page 47
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exc-
hange Act of 1934, as amended, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
/s/ Stephanie Risk-McElroy Date
Stephanie Risk-McElroy
President and Chairman of the Board July 28, 2014
Pursuant to the requirements of the Securities Exchange Act
of 1934, this Report has been signed below by the following
persons on behalf of the Registrant and in the capacities and
on the dates indicated.
/s/ Stephanie M. Risk-McElroy President and Chairman Date
Stephanie Risk-McElroy of the Board July 28, 2014
/s/ Jerry Andersen Director Date
Jerry Andersen July 28, 2014
/s/ Joel H. Wiens Director Date
Joel H. Wiens July 28, 2014
/s/ Donna Debowey Director Date
Donna Debowey July 28, 2014
/s/ Bonnie P. Risk Director Date
Bonnie P. Risk July 28, 2014
Page 48