U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended September 30, 1997 [_] Transition Report Pursuant to Section 13 or 19(d) of the Securities Exchange Act of 1934 For the transition period from __________________ to __________________
ý
Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2005
o
Transition Report Pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period of to
Commission File Number 0-7865.
------SECURITY LAND AND DEVELOPMENT CORPORATION
----------------------------------------- GEORGIA 58-1088232 ------- ---------- (State(Exact name of
other Jurisdiction of (I.R.S. Employer Identification Number) Incorporation or Organization)small business issuer as specified in its charter)
Georgia
58-1088232
(State or other Jurisdiction of
Incorporation or Organization)(I.R.S. Employer
Identification Number)2816 Washington Road, #103, Augusta, Georgia 30909
- - -------------------------------------------- ----- (Address(Address of Principal Executive Offices)
Zip Code Issuer'sIssuers Telephone Number (706) 736-6334
-------------- ------------------------------------------------------------------ (Former(Former Name, Former Address
& fiscal year,and Former Fiscal Year, ifchanged from last report.)Changed Since Last Year)Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES
Xý NO----- -----oState the number of shares outstanding of each of the
issuer'sissuer’s classes of common equity, as of the latest practicable date.Class Outstanding at December 31, 1996 - - ---------------------------- -------------------------------- Common Stock, $.10 Par Value 5,237,607 shares
Class
Outstanding at August 12, 2005
Common Stock, $0.10 Par Value
5,247,107 shares
Transitional Small Business Disclosure Format:
Yes No X ----- -----YES o NO ýSECURITY LAND AND DEVELOPMENT CORPORATION
AND SUBSIDIARIES
Form 10-QSB
Index
Consolidated Balance Sheets as of June 30, 2005 and September 30, 2004
Management’s Discussion and Analysis of Financial Condition and Results of Operations
PART I. FINANCIAL INFORMATION
ITEMItem 1.
FINANCIAL STATEMENTS The following condensed consolidated financial statements of Security Land and Development Corporation and Subsidiary are included herein:
Page ----CONDENSED CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1996 2 CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995 3 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995 4 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 5Financial Statements SECURITY LAND AND DEVELOPMENT CORPORATION AND
SUBSIDIARY CONDENSEDSUBSIDIARIESCONSOLIDATED BALANCE
SHEET (UNAUDITED) DECEMBER 31, 1996 ASSETS
CURRENT ASSETSCash $ 39,618 Other current assets 1,480 ---------- TOTAL CURRENT ASSETS 41,098 ---------- INVESTMENTS AND OTHER ASSETS Land and improvements, at cost 317,014 Property leased to others under operating leases, less accumulated depreciation $774,308 5,606,088 Deferred tax 16,244 ---------- 5,939,346 ---------- $5,980,444 ========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 3,517 Current portion of long-term debt 101,766 Other current liabilities 31,113 Short-term loans, related party 50,500 ---------- TOTAL CURRENT LIABILITIES 186,896 ---------- LONG-TERM DEBT, LESS CURRENT MATURITIES 4,057,063 ---------- DEFERRED TAXES 23,756 ---------- DEFERRED INCOME 453,995 ---------- STOCKHOLDERS' EQUITY Common stock, at par value 623,761 Paid-in capital 333,766 Retained earnings 401,207 ---------- 1,358,734 Less subscribed shares 100,000 ---------- 1,258,734 ---------- $5,980,444 ==========SeeSHEETS
June 30,
2005
September 30,
2004
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
32,489
$
11,548
Receivable from tenants
29,873
53,340
Total current assets
62,362
64,888
INVESTMENT PROPERTIES
Investment properties for lease, net of accumulated depreciation
4,807,039
4,905,496
Land and improvements held for investment or development
2,161,630
2,142,382
6,968,669
7,047,878
OTHER ASSETS
40,968
42,656
$
7,071,999
$
7,155,422
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses
$
172,479
$
110,343
Income taxes payable
15,818
84,466
Current portion of notes payable and deferred income
386,943
347,072
Advances payable to stockholders
39,507
95,500
Total current liabilities
614,747
637,381
LONG-TERM LIABILITIES
Notes payable, less current portion
2,858,955
2,981,876
Deferred income taxes
389,178
389,178
Deferred income, less current portion
219,798
238,287
Total long-term liabilities
3,467,931
3,609,341
Total liabilities
4,082,678
4,246,722
STOCKHOLDERS' EQUITY
Common stock, par value $.10 per share, authorized 30,000,000 shares; issued and outstanding 5,247,107 shares
524,711
524,711
Additional paid-in capital
332,816
332,816
Retained earnings
2,131,794
2,051,173
2,989,321
2,908,700
$
7,071,999
$
7,155,422
The accompanying notes
to the condensedare an integral part of these consolidated financial statements.21
SECURITY LAND AND DEVELOPMENT CORPORATION AND
SUBSIDIARY CONDENSEDSUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED DECEMBER 31, 1996AND1995 (UNAUDITED)
1996 1995 ----------- -----------Revenues, rent earned $ 195,421 $ 145,830 --------- --------- Operating expenses: Payroll and related costs 8,511 8,620 Depreciation 34,313 31,571 Taxes 14,554 - Professional services 3,450 25 Insurance 3,271 1,918 Commissions 13,000 - Other 9,287 9,603 --------- --------- 86,386 51,737 --------- --------- Operating income 109,035 94,093 --------- --------- Financial income (expense): Interest income 296 1,837 Interest (expense) (82,202) (84,405) --------- --------- (81,906) (82,568) --------- --------- Income before income taxes 27,129 11,525 Applicable income taxes 4,856 - --------- --------- Net income $ 22,273 $ 11,525 ========= ========= Income per common share $ - $ _ ========= =========SeeRETAINED EARNINGS
For the Three Month
Period Ended June 30,
For the Nine Month
Period Ended June 30,
2005
2004
2005
2004
RENT REVENUE
$
207,621
$
208,794
$
618,877
$
620,644
OPERATING EXPENSES
Depreciation and amortization
33,382
33,394
100,145
100,256
Property taxes
33,874
28,240
86,220
87,869
Payroll and related costs
13,633
15,398
50,164
51,496
Insurance and utilities
12,281
8,197
31,245
21,853
Repairs and maintenance
7,275
10,596
20,195
28,721
Professional services
3,250
3,158
24,164
14,929
Other
2,176
917
4,089
8,059
105,871
99,900
316,222
313,183
101,750
108,894
302,655
307,461
OTHER INCOME (EXPENSE)
Interest
(63,709
)
(73,147
)
(190,682
)
(206,155
)
Gain on sale of investment property
—
—
—
370,854
(63,709
)
(73,147
)
(190,682
)
164,699
Operating income before income taxes
38,041
35,747
111,973
472,160
INCOME TAXES
15,306
14,299
31,352
188,864
Net income
22,735
21,448
80,621
283,296
RETAINED EARNINGS, BEGINNING OF PERIOD
2,109,059
2,062,591
2,051,173
1,800,743
RETAINED EARNINGS, END OF PERIOD
$
2,131,794
$
2,084,039
$
2,131,794
$
2,084,039
PER SHARE DATA
Net income per common share
$
0.00
$
0.00
$
0.02
$
0.05
The accompanying notes
to the condensedare an integral part of these consolidated financial statements.32
SECURITY LAND AND DEVELOPMENT CORPORATION AND
SUBSIDIARYSUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995 (UNAUDITED)
1996 1995 ------------ -----------CASH FLOWS FROM OPERATING ACTIVITIES Cash received from leases $ 217,328 $ 145,830 Interest received 296 1,837 Cash paid to suppliers and employees (95,203) (87,358) Interest paid (82,202) (84,405) --------- --------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 40,219 (24,096) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on long-term debt (24,698) (22,833) Principal payments on long-term debt, stockholder - (11,827) --------- --------- NET CASH (USED IN) FINANCING ACTIVITIES (24,698) (34,660) --------- --------- NET INCREASE (DECREASE) IN CASH 15,521 (58,756) CASH AT BEGINNING OF PERIOD 24,097 77,811 --------- --------- CASH AT END OF PERIOD $ 39,618 $ 19,055 ========= ========= RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES Net income $ 22,273 $ 11,525 Deferred income tax 4,856 - Adjustments to reconcile net income to net cash provided by (used in) operating activities Depreciation 34,313 31,571 Changes in assets and liabilities Increase in other assets (1,339) - (Decrease) in accounts payable, accrued expenses and deferrals (19,884) (67,192) --------- --------- NET CASH (USED IN) OPERATING ACTIVITIES $ 40,219 $ (24,096) ========= =========See
For the Three Month
Period Ended June 30,
For the Nine Month
Period Ended June 30,
2005
2004
2005
2004
OPERATING ACTIVITIES
Net income
$
22,735
$
21,448
$
80,621
$
283,296
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
33,382
33,394
100,145
100,256
Gain on sale of investment property
—
—
—
(370,854
)
Changes in deferred and accrued amounts
52,440
—
(1,534
)
173,728
Net cash provided by operating activities
108,557
54,842
179,232
186,426
INVESTING ACTIVITIES
Improvements to investment properties
(12,501
)
—
(19,248
)
—
Net cash used in investing activities
(12,501
)
—
(19,248
)
—
FINANCING ACTIVITIES
Repayment of advances from stockholders
(824
)
—
(55,993
)
—
Proceeds from note payable
—
—
110,000
—
Principal payments on notes payable
(67,944
)
—
(193,050
)
(102,155
)
Net cash used in financing activities
(68,768
)
—
(139,043
)
(102,155
)
Net increase in cash and cash equivalents
27,288
54,842
20,941
84,271
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
5,201
72,719
11,548
43,290
CASH AND CASH EQUIVALENTS, END OF PERIOD
$
32,489
$
127,561
$
32,489
$
127,561
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest
$
63,709
$
73,147
$
190,682
$
206,155
Cash paid for income taxes
$
—
$
—
$
100,000
$
—
The accompanying notes
to the condensedare an integral part of these consolidated financial statements.43
SECURITY LAND AND DEVELOPMENT CORPORATION
AND
SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995 (UNAUDITED) NOTESUBSIDIARIESNotes to the Consolidated Financial Statements
Note 1
- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES— Basis of PresentationThe accompanying unaudited consolidated financial statements
are presentedwere prepared in accordance withthe requirements ofinstructions for Form 10-QSB andconsequently toaccounting principles generally accepted in the United States of America; therefore, they do not include all disclosures necessary for a complete presentation ofthe disclosures normally required by generally accepted accounting principles or those normally madefinancial condition, results of operations, and cash flows. Such statements are unaudited but, in theCompany's annual Form 10-KSB filing. Accordingly,opinion of management, reflect all adjustments, which are of a normal recurring nature and necessary for a fair presentation of results for thereaderselected interim periods. Users ofthis Form 10-QSB may wishfinancial information produced for interim periods are encouraged to refer to theCompany'sfootnotes contained in the audited financial statements appearing in our Form 10-KSB for the year ended September 30,1996 for further information.2004 when reviewing interim financial statements.The financial
informationstatements include estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The consolidated financial statements include the accounts of Security Land and Development Corporation and its wholly owned subsidiaries, Royal Palms Motel, Inc. and SLDC, LLC, (described on a consolidated basis as the “Company”). Significant intercompany transactions and accounts are eliminated in consolidation.The results of the nine month period ended June 30, 2004 have been restated for the correction of an error in the previously reported gain on sale of investment property. During the audit of the Company’s financial statements as of and for the year ended September 30, 2004, management determined that the gain on sale of investment property had been understated. A gain on sale of investment property of $370,854 has been
preparedrecognized inaccordance withtheCompany's customary accounting practices and has notaccompanying financial statements for the nine month period ended June 30, 2004. The correction of this error, net of related income taxes, increased the reported amount of net income for the nine month period ended June 30, 2004 by $74,450.Certain reclassifications have been
audited. Inmade to theopinion2004 financial statements to conform to the 2005 presentation. Such reclassifications had no effect on reported amounts ofmanagement, the information presented reflects all adjustments necessary for a fair statement of interim results. All such adjustments are of a normal and recurring nature. NOTEnet income or retained earnings.4
Note 2
- INVESTMENT IN LEASES AND PROPERTY UNDER OPERATING LEASES Property— Investment PropertiesInvestment properties leased or held for lease to others under operating leases
consistsconsisted of the following atDecember 31, 1996:June 30, 2005 and September 30, 2004:
Land $ 813,660 Warehouse and buildings 5,566,736 ---------- 6,380,396 Less accumulated depreciation 774,308 ---------- $5,606,088 ==========
June 30,
September 30,
2005
2004
National Plaza building, land and improvements
$
5,136,296
$
5,136,296
Commercial rental buildings, land and improvements
788,887
788,887
5,925,183
5,925,183
Less accumulated depreciation
(1,255,596
)
(1,159,174
)
4,669,587
4,766,009
Residential rental property
145,847
145,847
Less accumulated depreciation
(8,395
)
(6,360
)
Investment properties for lease, net of accumulated depreciation
$
4,807,039
$
4,905,496
Depreciation expense totaled $131,276 for the year ended September 30, 2004. Depreciation expense totaled $98,457 and $100,256, respectively, for the nine month periods ended June 30, 2005 and 2004.
The National Plaza is a retail strip center located on Washington Road in Augusta Georgia. Approximately 81% of the rentable space at the National Plaza is leased to Publix Supermarkets, Inc., the center’s anchor tenant.
The Company also holds several parcels of land for investment or development purposes. Such investment properties include 12.77 acres of land in Columbia County, Georgia, and 84.4 acres of land in south Richmond County, Georgia. The Company is actively marketing the 12.77 acres of land in Columbia County, Georgia, to lease the property. At June 30, 2005, the Company was engaged in negotiations to lease this property under a long-term ground lease. The negotiations are not final, and there can be no guarantee that a ground lease will ultimately be executed.
Refer to the
Company'sCompany’s Form 10-KSB for the year ended September 30,19962004 for further information on operating lease agreements andterms. NOTEland held for investment or development purposes.5
Note 3
- SHORT-TERM LOANS - RELATED PARTY Short-term loans from a director of the Company— Notes PayableNotes payable consisted of the following at
December 31, 1996:
Cash advances, no stated interest rate or maturity date, unsecured $ 50,500 ========== NOTE 4 - LONG-TERM DEBT Long-term debt consisted of the following at December 31, 1996: 7.875% note payable to an insurance company due in monthly payments of $35,633, including interest, through June 2015, collateralized by real estate and assignment of lease payments from the property. $4,158,829 ---------- Less current maturities 101,766 ---------- $4,057,063 ==========5ITEMJune 30, 2005 and at September 30, 2004:
June 30,
September 30,
2005
2004
A note payable to an insurance company, secured with a mortgage interest in the National Plaza and an assignment of rents. The note is payable in monthly installments of $35,633, including interest, through June 2015, and bears interest at a fixed rate of 7.875%.
$
2,952,987
$
3,094,587
A note payable to a regional financial institution, collateralized with property held by the Company in Columbia County, Georgia. The note is payable in monthly installments of $3,251, including interest, through December 2006, with the note’s then remaining principal balance payable in a lump-sum. The note bears interest at the Prime rate. The note, which is dated December 2003, is a refinancing of the prior year note, which matured in November 2003.
85,900
113,045
A note payable to a regional financial institution, collateralized by the Company’s residential rental property. The note is payable in monthly installments of $1,332, including interest, through June 2008, with the note’s then remaining principal balance payable in a lump-sum. The note bears interest at the Prime rate, plus 0.25%.
89,839
96,664
A note payable to a regional financial institution, collateralized by real estate in Columbia County, Georgia. The note is payable in monthly installments of $3,454, including interest, through November 2007, with the note’s then remaining principal balance payable in a lump-sum. The note bears interest at a fixed rate of 6.25%.
92,520
—
3,221,246
3,304,296
Less current maturities
(362,291
)
(322,420
)
$
2,858,955
$
2,981,876
Note 4 — Concentrations
Substantially all of the Company’s assets consist of real estate located in Richmond and Columbia Counties in the state of Georgia. Approximately 88% of the Company’s revenues are earned from one of the Company’s investment properties, the National Plaza. The anchor tenant, Publix Supermarkets, Inc. (“Publix”), a regional food supermarket chain, leases approximately 81% of the space at the National Plaza. The Company generates approximately 67% of its revenues through its lease with Publix.
6
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONManagement’s Discussion and Analysis of Financial Condition and Results of OperationsCritical Accounting Policies:
Management of the Company has identified the following as critical accounting policies:
• Estimates of useful lives of investment property for purposes of depreciation.
• Evaluation of long-lived investment assets for impairment.
• Estimates of income tax rates applicable to deferred taxes.
Refer to the Company’s Form 10-KSB for the year ended September 30, 2004 for further information regarding its critical accounting policies.
Results of Operations:
The
Company'sCompany’s results of operations for thethree monthnine-month period endedDecember 31, 1996June 30, 2005, and a comparative analysis of the same period forthe 1995 year2004 are presented below:
Increase (Decrease) 1996 Compared to 1995 ------------------- 1996 1995 Amount Percent -------- -------- -------- -------Leasing revenue $195,421 $145,830 $49,591 34.0 Operating expenses 86,386 51,737 34,649 67.0 Interest expense 81,906 84,405 (2,499) (2.9)Revenue from leasing has increased from 1995 primarily as a result of additional space being leased at the strip-center facility on Washington Road. On an annualized basis, current revenues from leasing exceeds
Increase (Decrease)
2005 compared to
2004
2005
2004
Amount
Percent
Rent revenue
$
618,877
$
620,644
$
(1,767
)
(0.3
)%
Operating expenses
316,222
313,183
3,039
1.0
%
Interest expense
190,682
206,155
(15,473
)
(7.5
)%
Gain on sale of investment property
—
370,854
(370,854
)
n/a
Net income
80,621
283,296
(202,675
)
(71.5
)%
Rent revenue from leasing
forconsists primarily of revenue from theCompany's fiscal year ended September 30, 1996, as muchCompany’s National Plaza, a strip center on Washington Road in Augusta, Georgia. The Company also earns rent revenue from an office building on Old Evans Road in Evans, Georgia, and revenue from a ground lease with a auto-repair service operation on an outparcel of theadditional space leased atNational Plaza. Rent revenue decreased from 2004 to 2005 due primarily due to thestrip-center was leased near or subsequent to September 30, 1996. Leasefact that in the first quarter of the prior year, the Company earned rent revenue fromother properties owned by the Company has remained constant.a residential property that was sold in December 2003.Refer to the
Company'sCompany’s Form 10-KSB for the year ended September 30,1996,2004 for further information regarding the properties owned and lease terms.Operating expenses for the nine months ended June 30, 2005 have increased as compared to the same period for 2004. This increase is primarily due to an increase in professional services, insurance and utility expenses. During the current period there has been an increase in expenses related to the Company’s financial reporting requirements, including audit related fees. Insurance expenses have increased
from 1995 primarily becausedue to increased coverage and rates. Utility expenses have increased due to rate increases as well.. Management expects operating expenses for the remainder ofproperty taxes recognized inthe currentperiod and commissions paid in the current period for services relatedfiscal year toobtaining new tenants at the strip-center. On an annualized basis, operating expenses arebe comparable to theCompany's fiscal year ended September 30, 1996.current reporting period.Interest expense for the current
quarterperiod is comparable to19952004 and, on an annualized basis, is comparable to theCompany'sCompany’s interest expense for the fiscal year ended September 30,1996.2004.In the year ended September 30, 2004, the Company sold investment property for a gain of $370,854. The
Company'sCompany utilized the proceeds from the sale to acquire property in Columbia County, Georgia, that adjoined other parcels of land the Company was holding for investment or development purposes. The Company is not currently marketing as available for sale, on an active basis, any of its investment properties.7
Liquidity and Sources of Capital:
The Company’s ratio of current assets to current liabilities at
December 31, 1996June 30, 2005 was.22.0.10. The ratio wasalso .220.10 at September 30,1996,2004. Management of the Company expects future liquidity needs of the Company to be funded from operating revenues of the Company and appreciation in investment properties (which can be sold or mortgaged, if necessary).To fund its income tax liability for the year ended September 30, 2004, and for working capital, the Company borrowed from certain stockholders and from a regional financial institution under a mortgage note agreement.
The Company’s cash flow from operations has historically been less than what is required to fund the scheduled retirement of the Company’s existing long-term notes payable. In the last quarter of the year ended September 30, 2003, the Company entered into a ground lease that provided additional minimum annual rent revenue of approximately $45,000. The Company continues to pursue additional sources of rent revenue and to evaluate opportunities to reduce operating costs, however cash flow from operations continues to be less than what is required to fund the scheduled retirement of existing long-term notes payable.
In April 2005, one tenant in the National Plaza, leasing 1,300 square feet, broke the lease agreement and began vacating the space with twenty-one months remaining in the agreement. Attempts are being made to re-lease the vacated space. The former tenant has filed for bankruptcy protection and management does not believe it will be successful in collecting amounts owed to the Company under the lease. Rental fees from this tenant through March 31, 2005 were collected. Another tenant who leases 2,600 square feet within the National Plaza has given notice that they do not plan to renew their lease agreement when it expires on September 30, 2005. A tenant leasing office space in the professional building in Evans, Georgia has renegotiated the rent due under the lease to a reduced amount. The Company’s revenues and cash flows will decrease as a result of the above described events. However, the Company believes this property will not be impaired as a result of the decrease. The reduction in monthly rental revenue resulting from the 1,300 square feet vacated at the National Plaza and the reduction in rent at the professional building in Evans, Georgia, pursuant to the lease renegotiation, totaled $1,880. At the end of September 2005, when the tenant leasing 2,600 square feet at the National Plaza vacates its space at the end of its leasing contract, the Company will lose an additional $3,300 in monthly rental revenue. The Company’s cash flow and operating income will be adversely affected with the loss of these rental revenues. The Company is actively seeking tenants to increase occupancy levels and replace the lost rental revenues. The Company is also actively seeking new leasing opportunities with other investment properties.
The Company believes it has the ability to obtain short term financing, should it become necessary, until revenues and cash flow from operations can be sufficiently increased. The Company also plans to ground lease its investment property(s) on Washington Road in Evans, Georgia. The investment properties under consideration for a ground lease include the 12.77 acres in Evans, Georgia on Belair Road and North Belair Road Extension, at Washington Road and the adjoining 4.61 acres, on which is currently situated a commercial office building that is leased under short term leases At June 30, 2005, the Company was
.16 at December 31, 1995.engaged in negotiations to lease this property under a long-term ground lease. The Company has received a letter of intent and a deposit from a major national tenant and its developer pursuant to these negotiations. If the Company is successful in negotiating a ground lease on this property, it may need to demolish or relocate the building located 4.61 acre parcel to accommodate the potential development of the combined property. The building is currently leased as professional rental property by the Company to two tenants. Management’s leasing negotiations are not final, and there can be no guarantee that a ground lease will ultimately be executed.During the current
quarter,reporting period the Company satisfied liquidity needs through operatingrevenues.revenues and proceeds from a note payable. Management of the Company continues to expect future liquidity needs to be met from operating revenues of theCompany.Company and appreciation in investment properties (which can be sold or mortgaged, if necessary).8
Cautionary Note Regarding Forward-Looking Statements:
The results of operations for the three-month period and the nine-month period ended June 30, 2005 are not necessarily indicative of the results that may be expected for the entire fiscal year. The Company
does not expect any significant changemay, from time to time, make written or oral forward-looking statements, including statements contained in thenumberCompany’s filings with the Securities and Exchange Commission (the “Commission”) and its reports to stockholders. Such forward-looking statements are made based on management’s belief as well as assumptions made by, and information currently available to, management pursuant to “safe harbor” provisions ofemployees.the Private Securities Litigation Reform Act of 1995. The Company’s actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, but not limited to, competition from other real estate companies, the ability of the Company to obtain financing for projects, and the continuing operations of tenants.Item 3. Controls and Procedures
Within the 90 days prior to the filing date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Company’s Chief Executive Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in the Company’s SEC filings. Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in Company reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.
There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect internal controls subsequent to the date the Chief Executive Officer carried out the evaluation.
9
PART
II.II - OTHER INFORMATIONITEMItem 6.
EXHIBITS AND REPORTS ON FORM 8-K (a)Exhibits27 Financial Data Schedule (b) The Company did not file any reportsand Reports on Form 8-Kduring the three months ended December 31, 1996. 6
(a)
Exhibit No.
Description
31.1
Certification Pursuant to Section 302 of Sarbanes-Oxley Act of 2002
32.1
Certification Pursuant to Section 906 of Sarbanes-Oxley Act of 2002
(b)
No reports on Form 8-K were filed during the three months ended June 30, 2005.
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SECURITY LAND
&AND DEVELOPMENT CORPORATION---------------------------------------(Registrant)
February 12, 1997 By: /s/ T. Greenlee Flanagin ------------------------------ T. GREENLEE FLANAGIN President Chief Executive Officer 7INDEX TO EXHIBITS ----------------- Exhibit Number Description Sequential Page Number 27 Financial Data Schedule
By:
/s/ T. Greenlee Flanagin
August 12, 2005
T. Greenlee Flanagin
Date
President
Chief Executive Officer
10