UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

For the Quarterly period endedSeptember 30, 2017

OR

For the transition period from ______________________________ to ______________________________

Commission file number1-7865

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Sections 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YesxNo¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YesxNo¨

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

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

APPLICABLE ONLY TO CORPORATE ISSUERS:

State the number of shares outstanding of each of the issuer’sissuer's classes of common equity, as of the latest practicable date. 1,002,3921,013,292 Common shares were outstanding as of November 13, 2017.14, 2018.

HMG/COURTLAND PROPERTIES, INC.

Index

Cautionary Statement. This Form 10-Q contains certain statements relating to future results of the Company that are considered “forward-looking statements”"forward-looking statements" within the meaning of the Private Litigation Reform Act of 1995. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties, including, but not limited to, changes in political and economic conditions; interest rate fluctuation; competitive pricing pressures within the Company’sCompany's market; equity and fixed income market fluctuation; technological change; changes in law; changes in fiscal, monetary, regulatory and tax policies; monetary fluctuations as well as other risks and uncertainties detailed elsewhere in this Form 10-Q or from time-to-time in the filings of the Company with the Securities and Exchange Commission. Such forward-looking statements speak only as of the date on which such statements are made, and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events.

See notes to the condensed consolidated financial statements

See notes to the condensed consolidated financial statements

See notes to the condensed consolidated financial statements

HMG/COURTLAND PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements prepared in accordance with instructions for Form 10-Q, include all adjustments (consisting only of normal recurring accruals) which are necessary for a fair presentation of the results for the periods presented. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the Company’sCompany's Annual Report for the year ended December 31, 2016.2017. The balance sheet as of December 31, 20162017 was derived from audited consolidated financial statements as of that date. The results of operations for the three and nine months ended September 30, 20172018 are not necessarily indicative of the results to be expected for future periods or the full year.

The condensed consolidated financial statements include the accounts of HMG/Courtland Properties, Inc. (the “Company”"Company") and entities in which the Company owns a majority voting interest or controlling financial interest. All material transactions and balances with consolidated and unconsolidated entities have been eliminated in consolidation or as required under the equity method.

Refer to the consolidated financial statements and footnotes thereto included in the HMG/Courtland Properties, Inc. Annual Report on Form 10-K for the year ended December 31, 20162017 for recent accounting pronouncements. The Company does not believe that any recently issued, but not yet effective accounting standards, if currently adopted, will have a material effect on the Company’s consolidated financial position, results of operations and cash flows.

Investments in marketable securities consist primarily of large capital corporate equity and debt securities in varying industries or issued by government agencies with readily determinable fair values. These securities are stated at fairmarket value, as determined by the most recent traded price of each security at the balance sheet date. Consistent with the Company’sCompany's overall current investment objectives and activities, its entire marketable securities portfolio is classified as trading. Accordingly, all unrealized gains (losses) on this portfolio are recorded in the condensed consolidated statements of income. Included in investments in marketable securities is approximately $3.2$3.10 million and $6.2$2.96 million of large capital real estate investment trusts (REITs) as of September 30, 20172018 and December 31, 2016,2017, respectively.

NetApproximate net realized and unrealized gain (loss) gain from investments in marketable securities for the three and nine months ended September 30, 2018 and 2017 and 2016 is summarized below:approximately as follows:

For the three months ended September 30, 2018, net realized gain from sales of marketable securities was approximately $39,000 of which approximately $44,000 consisted of gross gains and $5,000 of gross losses. For the nine months ended September 30, 2018, net realized gain from sales of marketable securities was approximately $35,000 and consisted of approximately $68,000 of gross gains net of $33,000 of gross losses.

For the three months ended September 30, 2017, net realized gain from sales of marketable securities was approximately $115,000 and consisted of approximately $221,000$220,000 of gross gains and $105,000 of gross losses. For the nine months ended September 30, 2017, net realized gains from sales of marketable securities was approximately $26,000 and consisted of approximately $313,000 of gross gains net of $287,000 of gross losses.

For the three months ended September 30, 2016, net realized gain from sales of marketable securities was approximately $318,000, and consisted of approximately $408,000 of gross gains and $90,000 of gross losses. For the nine months ended September 30, 2016, net realized gain from sales of marketable securities was approximately $301,000, and consisted of approximately $620,000 of gross gains net of $319,000 of gross losses.

Investment gains and losses on marketable securities may fluctuate significantly from period to period in the future and could have a significant impact on the Company’sCompany's net earnings. However, the amount of investment gains or losses on marketable securities for any given period has no predictive value and variations in amount from period to period have no practical analytical value.

4.INVESTMENT IN REAL ESTATE PARTNERSHIP

In September 2014, the Company, through a wholly owned subsidiary (HMG Orlando LLC, a Delaware limited liability company), acquired a one-third equity membership interest inAs previously reported on Form 8-K dated February 20, 2018, JY-TV Associates, LLC, a Florida limited liability company (“JY-TV”) and entered into the Amended and Restated Operating Agreement of JY-TV (the “Agreement”(“Seller”). On May 19, 2015, pursuant to the terms of a Construction Loan Agreement, between JY-TV Associates LLC (“JY-TV” or the “Borrower”, which is an entity one-third owned by a wholly-owned subsidiaryHMG, completed the sale of the Company) and Wells Fargo Bank (“Lender”), Lender loaned to the Borrower the principal sum of $27 million pursuant to a senior secured construction loan (“Loan”). The proceeds of the Loan were used to finance the previously reported construction ofits multi-family residential apartments containing 240 units totaling approximately 239,000 net rentable square feet on a 9.5-acre site located in Orlando, Florida pursuant to the previously reported Agreement of Sale (the “Agreement”) to Murano 240, LLC (as per an Assignment and Assumption of Agreement of Sale with Cardone Real Estate Acquisitions, LLC), a Delaware limited liability company, an unrelated entity (“Project”Purchaser”). The Projectfinal sales price was $50,150,000 and the sales proceeds were received in cash and payment of outstanding debt. The gain on the sale to HMG was approximately $5.5 million, net of the incentive fee.

For the nine months ended September 30, 2018 JY-TV reported net income of approximately $17.9 million, which includes approximately $18.2 million in gain on sale of property, depreciation and amortization expense of $402,000, interest expense of $159,000, write-off of certain prepaid and other assets upon the sale of property of approximately $147,000 and other net operating revenues. The Company’s portion of JY-TV’s net income is approximately 97% leased. $5.9 million ($144,000 of loss from operations and $6.1 million in gain on sale of property (before the $608,000 incentive fee). JY-TV made distributions totaling $21.75 million in February 2018. The Company’s portion of those distributions was $7.25 million. In June 2018 JY-TV made another distribution of $825,000, of which the Company’s portion was $275,000. Final accounting and distribution from JY-TV is expected before the end of fiscal 2018.

For the nine months ended September 30, 2017 JY-TV reported a net loss of approximately $500,000,$457,000, which includes depreciation and amortization expense of $1.2 million$777,000 and interest expense of $845,000.$573,000. The Company’s portion of that loss for the nine months ended September 30, 2017 is approximately $167,000.$153,000. In March 2017, JY-TV distributed $390,000 to its members. The Company’s portion of that distribution was $130,000.

The Company and certain affiliates of the other two members of the Borrower (“Guarantors”) entered into a Completion Guaranty Agreement (“Completion Guaranty”) and a Repayment Guaranty Agreement (“Repayment Guaranty”) (collectively, the “Guaranties”) with the Lender. Under the Completion Guaranty, Guarantors shall unconditionally guaranty, on a joint and several bases, lien free completion of all improvements with respect to the Project and any construction or completion obligations required to be made by the Borrower pursuant to any approved leases. Under the Repayment Guaranty, Guarantors shall provide an unconditional guaranty including the repayment of $11.5 million of the principal balance of the Loan, repayment of all accrued but unpaid interest and payment of any other sums payable under any of the Loan Agreement. Each Guarantor is required to maintain compliance at all times with certain financial covenants, as defined. As of September 30, 2017, the Company was in compliance with all debt covenants. The construction loan matures on May 19, 2018.

As of September 30, 2017,2018, the Company’s portfolio of other investments had an aggregate carrying value of approximately $6.2$5.9 million and we have committed to further fund additional amounts of approximately $2.5$1.2 million as required by agreements with the investees. The carrying value of these investments is equal to contributions less distributions received and loss valuation adjustments, if any.

During the nine months ended September 30, 2017,2018, we made cash contributions to other investments of approximately $1.7$1.08 million, including five new investments totaling approximately $1.1 million in contributions plus $600,000consisting of $455,000 in follow on contributions to existing investments. Theinvestment commitments and $625,000 in four new investments, consist of an investmentas follows: $200,000 in a partnership owning multi-family residentialdeveloping real estate in Atlanta, Georgia for $400,000, $250,000 in a partnership owning a mortgage secured by property being developed in Hollywood,Orlando, Florida, $300,000 in a poolstock fund investing in pharmaceuticals and related industries, and a total of mortgage loans secured by property located near$125,000 in the west coastsecond funds of Florida, $75,000 co-investment with current investee in a partnershiptwo existing investees owning one stock, and $75,000 in a seed capital fund.diversified businesses.

During the nine months ended September 30, 2017,2018, we received cash distributions from other investments of approximately $1.2$1.59 million. SuchThese distributions included $368,000approximately $475,000 (net of 10% holdback pending year end audit of partnership) received in June 2018 from the redemption of an investment in a partnership owning investment contracts which resulted in a loss of less than $1,000, $404,000 from one investment in a partnership owning one stockrental apartments in San Antonio, Texas which waswere sold in March 2017,2018 at a $260,000 distributiongain to the Company of approximately $105,000, and approximately $141,000 in distributions from an on-going investment in a pool of mortgages sold back to the seller bank in July 2017,power and variousenergy partnership. The other distributions were primarily from real estate and related investments. Also, in the first quarter of 2018 the Company’s investments in two private banks experienced mergers with publicly traded larger banks and we received stock in those publicly traded banks plus approximately $34,000 in cash. The cash portion was recorded as gain from other investments. The bank securities we received from the mergers are being held in our marketable securities portfolio at the carrying value equal to our original investment in the private banks (with an unrealized gain of approximately $182,000 as of September 30, 2018).

Net income from other investments for the three and nine months ended September 30, 2018 and 2017, and 2016, is summarized below:approximately as follows:

The following tables present approximate gross unrealized losses and fair values for those investments that were in an unrealized loss position as of September 30, 20172018 and December 31, 2016,2017, aggregated by investment category and the length of time that investments have been in a continuous loss position:

When evaluating the investments for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer and any changes thereto, and the Company’s intent to sell, or whether it is more likely than not it will be required to sell, the investment before recovery of the investment’s amortized cost basis.

In accordance with ASC Topic 320-10-65, Recognition and Presentation of Other-Than-Temporary Impairments thereThere were no impairment valuation adjustments for the three and nine months ended September 30, 20172018 and 2016.2017.

In accordance with ASC Topic 820, the Company measures cash and cash equivalents and marketable debt and equity securities at fair value on a recurring basis. Other investments are measured at fair value on a nonrecurring basis.

The following are the major categories of assets and liabilities measured at fair value on a recurring basis during as of September 30, 20172018 and December 31, 2016,2017, using quoted prices in active markets for identical assets (Level 1) and significant other observable inputs (Level 2). For the periods presented, there were no major assets measured at fair value on a recurring basis which useswhere significant unobservable inputs were used (Level 3):

Assets and liabilities measured at fair value on a recurring basis are summarized below:

Carrying amount is the estimated fair value for corporate debt securities and time deposits based on a market-based approach using observable (Level 2) inputs such as prices of similar assets in active markets.

The Company as a qualifying real estate investment trust (“REIT”) distributes its taxable ordinary income to stockholders in conformity with requirements of the Internal Revenue Code and is not required to report deferred items due to its ability to distribute all taxable income. In addition, net operating losses can be carried forward to reduce future taxable income but cannot be carried back.

The Company’s 95%-owned taxable REIT subsidiary, CII, files a separate income tax return and its operations are not included in the REIT’s income tax return.

Distributed capital gains on sales of real estate as they relate to REIT activities are not subject to taxes; however, undistributed capital gains may be subject to corporate tax.

In March 2018, the Company paid a cash dividend of approximately $2.5 million (or $2.50 per share) to shareholders of record as of March 21, 2018. The dividend was a capital gain distribution to shareholders. No dividends were declared for the year ended December 31, 2017.

In January 2017, the Company accountspaid a cash dividend of approximately $501,000 (or $.50 per share) to shareholders of record as of December 29, 2016. The dividend was a return of capital to shareholders. No dividends were declared for income taxes in accordance with ASC Topic 740, “Accounting for Income Taxes.” ASC Topic 740 requires a Company to use the asset and liability method of accounting for income taxes. Under this method,year ended December 31, 2017.

The deferred income taxes are recognized for the tax consequences of “temporary differences” by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax basesbasis of existing assets and liabilities. The effect on deferred income taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred taxes only pertain to CII. As of September 30, 2017,2018, and December 31, 2016,2017, the Company has recorded a net deferred tax liability of $76,000approximately $144,000 and $84,000, respectively, primarily as a result of timing differences associated with the carrying value of the investment in affiliate (TGIF) and other investments. CII’s NOL carryover to 2018 is approximately $1.1 million, the estimated at $1 million expiring beginning in 2028 and hastax benefits of which have been fully reserved due to CII historically having tax losses.

The provision for income taxes in the consolidated statements of comprehensive income consists approximately of the following:

The Company follows the provisions of ASC Topic 740-10, “Accounting for Uncertainty in Income Taxes” which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with ASC Topic 740, and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This topic also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.8.STOCK OPTIONS

Based on our evaluation, we have concluded that there are no significant uncertain tax positions requiring recognition in our consolidated financial statements. Our evaluation was performedIn January and March 2018 three directors and one officer exercised options to purchase a total of 10,900 shares at $9.31 per share (options to purchase 1,600 shares by one director were exchanged for the tax years ended December 31, 2016. The Company’s federal income tax returns since 2013 are subject to examination by the Internal Revenue Service, generally for a period of three years after the returns were filed.

We may from time to time be assessed interest or penalties by major tax jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. In the event we have received an assessment for interest and/or penalties, it has been classified in the consolidated financial statements as selling, general and administrative expense.

new options via Stock Option Agreement re-load provision). Stock based compensation expense is recognized using the fair-value method for all awards. During the nine months ended September 30, 20172018 there were no options granted, exercised, expired or forfeited.

The following table summarizes stock option activity during the nine months ended September 30, 2018:

The following table summarizes information concerning outstanding and exercisable options as of September 30, 2017:2018:

As of September 30, 2017,2018, the stock options outstanding and exercisable had anno intrinsic value of approximately $13,000.value.

9.SUBSEQUENT EVENT

In May 2018, the Company received a Determination of Eligibility under the Brownfields Reuse and Liability Limitation Act (BRELLA) related to environmental remediation of the Company’s 6-acre property located in Montpelier, Vermont (“the remediation plan”). Under BRELLA we will receive a Certificate of Completion upon performance of all actions required under the approved corrective action plan developed for the property. Statutory liability protections become effective upon issuance of the Certificate of Completion. Forbearance from state enforcement action is in effect during the BRELLA provided that all required activities are being implemented in good faith.

On October 17, 2018, the Company received approval from the Vermont Department Environmental Conservation (VTDEC) of its corrective action plan relating to the remediation plan. The estimated costs to remediate the property is $458,000. The Company owns approximately 70% of the property and we have recorded as expense our portion, $319,000, of the anticipated remediation costs as of September 30, 2018. The remediation work is expected to begin in the fourth quarter of 2018 with completion sometime in 2019.

RESULTS OF OPERATIONS

The Company reported a net loss of approximately $501,000 ($0.49 per share) for the three months ended September 30, 2018, and net income of approximately $4.61 million ($4.56 per share) for the nine months ended September 30, 2018. For the three and nine months ended September 30, 2017, we reported net losses of $182,000 ($0.18 per share) and $151,000 ($0.15 per share) for the three and nine months ended September 30, 2017,, respectively. For the three months ended September 30, 2016, we reported a net loss of $49,000 ($0.05 per share), and for the nine months ended September 30, 2016 we reported net income of $181,000 ($0.18 per share).

REVENUES

AND OTHER INCOME

Rentals and related revenues for the three and nine months ended September 30, 20172018 were approximately $16,000$18,000 and $52,000,$54,000, respectively and primarily consists of rent from the Advisor to CII for its corporate office. For the three and nine months ended September 30, 20162017 rental and related revenues were $16,000 and $49,000,$52,000, respectively.

Net realized and unrealized gain from investments in marketable securities:

Net realized gain from sales ofinvestments in marketable securities for the three and nine months ended September 30, 2018 was approximately $39,000 and $35,000, respectively. Net realized gain from investments in marketable securities for the three and nine months ended September 30, 2017 was approximately $115,000 and $26,000, respectively. Net realized gainUnrealized net (loss) from sales ofinvestments in marketable securities for the three and nine months ended September 30, 20162018 was approximately $318,000($37,000) and $301,000,($9,000), respectively. Net unrealized lossUnrealized net (loss) gain from investments in marketable securities for the three months ended September 30, 2017 and 2016 was approximately $105,000 and $257,000, respectively. Net unrealized gain from investments in marketable securities for the nine months ended September 30, 2017 and 2016 was approximately $215,000(105,000) and $315,000,$215,000, respectively. For further details refer to Note 3 to Condensed Consolidated Financial Statements (unaudited).

Equity loss in residential real estate partnership:

Equity loss from operations in residential real estate partnership for the three andnine months ended September 30, 2018 was approximately $144,000. Equity loss from operations in residential real estate partnership for the nine months ended September 30, 2017 was approximately $14,000 and $167,000, respectively. This is as compared with equity loss of $52,000 for the three and nine months ended September 30, 2016. For further details, refer to Note 4 to Condensed Consolidated Financial Statements (unaudited).

Net income from other investments:

Net income from other investments for the three and nine months ended September 30, 2018 was approximately $80,000 and $371,000, respectively. Net income from other investments for the three and nine months ended September 30, 2017 was approximately $80,000 and $428,000, respectively. This is as compared with net income from other investments for the three and nine months ended September 30, 2016 of approximately $157,000 and $274,000, respectively. For further details refer to Note 5 to Condensed Consolidated Financial Statements (unaudited).

Interest, dividend and other income:

Interest, dividend and other income for the three and nine months ended September 30, 2018 was approximately $83,000 and $271,000, respectively. Interest, dividend and other income for the three and nine months ended September 30, 2017 was approximately $109,000 and $373,000, respectively. This is as compared with interest, dividend and other income for the three and nine months ended September 30, 2016 was approximately $148,000 and $452,000, respectively. The decreases in the three and nine-month prior year comparable periods was primarily due to decreased dividend income, as a result of increased sale of marketable securities.offset partially by increase in interest income from T-bills.

EXPENSES

GeneralRental and administrative expenses for the three months ended September 30, 2017 as compared with the same period in 2016 increased by approximately $37,000 (45%). The increase was due primarily to $26,000 in expenses relating to a prospective real estate transaction in Orlando, Florida which did not close.

Professional fees andother properties operating expenses for the three and nine months ended September 30, 2017 decreased by approximately $33,000 (60%) and $44,000 (25%), respectively2018 as compared with the prior year comparable periods.same periods in 2017 increased by $309,000 (908%) and $294,000 (333%), respectively. The increases were primarily the result of $319,000 in estimated environmental remediation costs relating the Company’s property located in Montpelier, Vermont. For further details refer to Note 9 to Condensed Consolidated Financial Statements (unaudited)

General and administrative expenses for the three and nine months ended September 30, 2018 as compared with the same periods in 2017 decreased by $25,000 (22%) and $23,000 (10%), respectively. The decreases were primarily fromattributable to decreased shareholder relations legal feestravel, dues and decreased tax consulting fees.subscriptions expenses relating to Courtland Investments, Inc. of approximately $46,000, partially offset by increased costs relating to a proposed real estate venture in Orlando which was not pursued and the related deposits were written off.

Interest expense for the nine months ended September 30, 2018 as compared with the same period in 2017 increased by approximately $18,000 (37%). The increase was primarily due to increased margin borrowings and increased interest rates.

EFFECT OF INFLATION:

Inflation affects the costs of holding the Company’sCompany's investments. Increased inflation would decrease the purchasing power of our mainly liquid investments.

LIQUIDITY, CAPITAL EXPENDITURE REQUIREMENTS AND CAPITAL RESOURCES

The Company’sCompany's material commitments primarily consist of a note payable to the Company’s 49% owned affiliate, T.G.I.F. Texas, Inc. (“TGIF”) of approximately $1.55$1.34 million due on demand and contributions committed to other investments of approximately $2.5$1.2 million due upon demand. The $9.99 million in margin is primarily related to the purchase of US T-bills at quarter end. The T-bills were sold in October 2018 and the related margin was repaid. The purchase of T-bills at quarter end is for the purposes of qualifying for the REIT asset test. The funds necessary to meet thesethe other obligations are expected from the proceeds from the sales of investments, distributions from investments and available cash.

MATERIAL COMPONENTS OF CASH FLOWS

For the nine months ended September 30, 2018, net cash used in operating activities was approximately $1.4 million, primarily consisting of operating expenses and $500,000 partial payment of the incentive fee due to the Advisor.

For the nine months ended September 30, 2017, net cash used in operating activities was approximately $501,000, primarily consisting of operating expenses.

For the nine months ended September 30, 2017,2018, net cash provided by investing activities was approximately $2.8$8.43 million. This consisted primarily of distributions from investment in residential real estate partnership of $7.525 million (mainly from the sales proceeds of the Orlando, Florida property), net proceeds from salesredemptions of marketable securities of $5.6$1.14 million, distributions from other investments of $1.2$1.56 million, distributionsproceeds from investment in residential partnershipcollection of $130,000mortgage loan receivable of $500,000 and distribution from TGIFaffiliate of $193,000. These sources of funds were partially offset by uses including $2.7of cash consisting primarily of $1.38 million in purchases of marketable securities and $1.7$1.08 million of contributions to other investmentsinvestments.

For the nine months ended September 30, 2017,2018, net cash used inprovided by financing activities was $532,000,approximately $7.07 million, consisting of dividends paidmargin borrowings of $501,000$9.73 million and $50,000 principal repayment on loan due to TGIF. This is$92,000 of proceeds from stock options exercised. These sources of funds were partially offset by increased margin borrowingsa dividend payment of $20,000.$2.53 million and repayment of note payable to affiliate of $210,000.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable

Item 4. Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q have concluded that, based on such evaluation, our disclosure controls and procedures were effective and designed to ensure that material information relating to us and our consolidated subsidiaries, which we are required to disclose in the reports we file or submit under the Securities Exchange Act of 1934, was made known to them by others within those entities and reported within the time periods specified in the SEC’sSEC's rules and forms.

There were no changes in the Company’sCompany's internal controls over financial reporting identified in connection with the evaluation of such internal control over financial reporting that occurred during our last fiscal quarter which have materially affected, or reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

The Company hasAs previously reported, we have one current program to repurchase up to $600,000 of outstanding shares of our common stock from time to time in the open market at prevailing market prices or in privately negotiated transactions. This program was approved by our Board of Directors on June 30, 2016 and expires on June 29, 2021. As of September 30, 2017,2018, the maximum dollar value of shares that may yet be purchased under the program is $259,719. During the nine months ended September 30, 2017,2018 there were no shares purchased as part of this publicly announced program.

(a) Certifications pursuant to 18 USC Section 1350-Sarbanes-Oxley Act of 2002. Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.