George Risk Industries, Inc. (OTCMKTS:RSKIA) Files An 8-K Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review
Item 4.02 (a).
On March 4, 2020, the Chief Financial Officer of George Risk Industries Inc. (the “Company”) determined that an error that existed in the Company’s previously issued financial statements for the quarters ended July 31, 2019 and October 31, 2019 and for the year ended April 30, 2019 (collectively, the “Relevant Periods”) filed with the Securities and Exchange Commission on September 18, 2019, December 20, 2019 and August 13, 2019 respectively. The Company failed to give effect to the phase in of FASB ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”) in the financial statements included in the Company’s 10-Q and 10-K. ASU 2016-01, which was effective for public business entities for fiscal years beginning after December 31, 2017, is intended to enhance the reporting model for certain financial instruments to provide users of financial instruments with more decision-useful information and addresses certain aspects of the recognition, measurement, presentation, and disclosure of financial instruments. This new standard affects all entities that hold financial assets or owe financial liabilities.
The Chief Financial Officer promptly notified the Board of Directors of the existence of the error. The Chief Financial Officer has also discussed the matter with the Company’s auditors, Haynie and Company. As a result of this error, the previously filed financial statements in the Forms 10-K and 10-Q should no longer be relied upon.
The Company is restating its financial statements for the Relevant Periods to reflect the phase in of ASU 2016-01 which will impact how it records other comprehensive income. Under the new guidance in ASU 2016-01 the Company should record unrealized gains and losses in the value of the equity securities it owns in the income statement, whereas, under previous guidance those gains and losses were recorded as other comprehensive income. The Company expects to file these amendments for the Relevant Periods as soon as possible which will contain restated financial statements. The restatements are expected to have an impact on the financial statements for the Relevant Periods as previously filed, with changes reflected in the relevant income statements on other comprehensive income (loss), unrealized gains (losses), and earnings per share, an impact on the relevant balance sheets equity sections, adjustments to the statements of cash flow and related disclosures and Management’s Discussion and Analysis of Financial Condition and Results of Operations.
No changes for the restatement are expected to have any impact on our cash position, cash flow, liquidity, or operations.
About George Risk Industries, Inc. (OTCMKTS:RSKIA)
George Risk Industries, Inc. (GRI) is a diversified manufacturer of electronic components, encompassing the security industry’s variety of door and window contact switches, environmental products, proximity switches and custom keyboards. The Company is engaged in the design, manufacture, and sale of computer keyboards, push button switches, burglar alarm components and systems, pool alarms, thermostats and water sensors, among others. Its segments include Security alarm products and Other products. The security products division comprises products, which are sold across the world through distributors that in turn sell the products to security installation companies. These products are used for residential, commercial, industrial and government installations. GRI owns and operates its main manufacturing plant and offices in Kimball, Nebraska with a satellite plant approximately 40 miles away in Gering, Nebraska.