Oakridge (OKRG) 10-Q 5 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information	3 Months Ended
	Sep. 30, 2016shares
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2016
Trading Symbol	okrg
Entity Registrant Name	OAKRIDGE HOLDINGS INC
Entity Central Index Key	73,605
Current Fiscal Year End Date	--06-30
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding	1,431,503
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well Known Seasoned Issuer	No
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2016	Jun. 30, 2016
Current assets
Cash	$ 214,447	$ 69,621
Trade accounts receivable, net	99,491	474,094
Inventories, net	983,485	1,042,484
Other current assets	15,188	11,183
Deferred income taxes, current	23,000	23,000
Total current assets	1,335,611	1,620,382
Property, plant & equipment
Property, plant & equipment at cost	3,122,986	3,118,243
Less accumulated depreciation	(2,082,543)	(2,061,543)
Total property, plant & equipment	1,040,443	1,056,700
Other assets (non-current):
Deferred long-term income taxes	171,000	91,000
Other assets, non-current	24,555	28,524
Total other assets	195,555	119,524
Total assets	2,571,609	2,796,606
Current liabilities
Trade accounts payable	493,195	546,845
Due to finance company	82,137	82,905
Accrued liabilities	356,658	382,742
Deferred revenue	162,599	112,638
Due to related party	90,062	90,062
Current maturities of long-term debt	288,423	305,104
Total current liabilities	1,473,074	1,520,296
Long-term liabilities
Long-term debt less current portion	1,598,440	1,671,601
Total Long-term liabilities	1,598,440	1,671,601
Total liabilities	3,071,514	3,191,897
Stockholders' deficit
Common Stock	143,151	143,151
Paid-in-capital	2,457,975	2,457,975
Accumulated deficit	(3,101,031)	(2,996,417)
Total stockholders' deficit	(499,905)	(395,291)
Total liabilities and stockholders' deficit	$ 2,571,609	$ 2,796,606

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Revenue, net:
Net Revenue	$ 502,174	$ 1,406,737
Cost of Revenue:
Cost of sales	525,000	1,140,959
Gross profit (loss)	(22,826)	265,778
Operating expenses
Sales & marketing	25,356	25,005
General & administrative	97,018	136,006
Total operating expenses	122,374	161,011
Operating income (loss)	(145,200)	104,767
Other expenses
Interest expense	(39,414)	(36,249)
Total other expenses	(39,414)	(36,249)
Net income (loss) before taxes	(184,614)	68,518
Income tax benefit (expense)	80,000	(27,000)
Discontinued Operation:
Net income (loss)	$ (104,614)	$ 41,518
Weighted -average common shares used in the computation of EPS
Basic and diluted	1,431,503	1,431,503
Basic and diluted net income (loss) per share	$ (0.07)	$ 0.03

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
net cash flows from operating activities:
Net income(loss)	$ (104,614)	$ 41,518
Depreciation and amortization	24,969	17,694
Deferred income taxes	(80,000)	0
Receivables	374,603	(100,381)
Inventories	58,999	358,203
Prepaids & other assets	(4,005)	7,905
Accounts payable and due to finance company	(54,418)	(126,687)
Deferred revenue	49,961	(97,703)
Accrued liabilities	(26,084)	82,418
Net cash flows from operating activities	239,411	182,967
Cash flows from investing activities:
Purchases of property and equipment	(4,743)	(4,541)
Net cash flows from investing activities	(4,743)	(4,541)
Cash flows from financing activities:
Principal payments on long-term debt	(89,842)	(62,602)
Net cash flows from financing activities	(89,842)	(62,602)
Net change in cash	144,826	115,824
Cash-continuing operations
Beginning of year	69,621	55,042
End of period	$ 214,447	$ 170,866

CONSOLIDATED STATEMENTS OF STOC

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - 3 months ended Sep. 30, 2016	USD ($)
Beginning Balance at Jun. 30, 2016	$ (395,291)
Net Income (Loss)	(104,614)
Ending Balance at Sep. 30, 2016	$ (499,905)

BASIS OF PRESENTATION

BASIS OF PRESENTATION	3 Months Ended
	Sep. 30, 2016
BASIS OF PRESENTATION [Text Block]	1. BASIS OF PRESENTATION The accompanying Condensed Consolidated Financial Statements include the accounts of Oakridge Holdings, Inc. (the “Company”) and its wholly owned subsidiary. All significant intercompany transactions and balances have been eliminated. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to present such information fairly. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to Securities and Exchange Commission rules and regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2016. Operating results for the three-month period ended September 30, 2016 may not necessarily be indicative of the results to be expected for any other interim period or for the full year. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The most significant estimates in the financial statements include, but are not limited to, accounts receivable and inventory reserves, investments, depreciation and accruals. Actual results could differ from those estimates.

Earnings Per Common Share

Earnings Per Common Share	3 Months Ended
	Sep. 30, 2016
Earnings Per Common Share [Text Block]	2 . EARNINGS PER COMMON SHARE Earnings per Common Share (EPS) are presented on both a basic and diluted basis in accordance with the provisions of Accounting Standards Codification Topic 260 - Earnings per Share. Basic EPS is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects the maximum dilution that would result after giving effect to dilutive convertible debentures. The following table presents the computation of basic and diluted EPS: Three Months Ended September 30, 2016 September 30, 2015 Net income (loss) $ ( 104,614) $41,518 Weighted -average common shares used in the computation of EPS Basic and diluted 1,431,503 1,431,503 Basic and diluted net income (loss) per share (0.07) 0.03

COMPREHENSIVE INCOME (LOSS)

COMPREHENSIVE INCOME (LOSS)	3 Months Ended
	Sep. 30, 2016
COMPREHENSIVE INCOME (LOSS) [Text Block]	3. COMPREHENSIVE INCOME The Company has no significant components of other comprehensive income and accordingly, comprehensive income is the same as net income for all periods.

Inventories

Inventories	3 Months Ended
	Sep. 30, 2016
Inventories [Text Block]	4. INVENTORIES The table below summarizes information about reported components of inventory for as of September 30, 2016 and as of June 30, 2016: September 30, 2016 June 30, 2016 Raw Material $605,569 $624,011 Work in Process 377,916 418,473 Finished Goods - - Inventory $983,485 $1,042,484

Debt

Debt	3 Months Ended
	Sep. 30, 2016
Debt [Text Block]	5. DEBT Long-term debt consisted of the following: September 30, 2016 June 30, 2016 Note payable — bank, payable in monthly installments of $6,672 including interest at 6.0% with a balloon payment in January 2023. Effective June 2015, the interest rate is 10% due to payment default in accordance with the terms of the note. The note is secured by the first mortgage on property owned by the Company, continuing commercial guarantees from both the Company and the chief executive officer/key stockholder and by the assignment of a life insurance policy on the chief executive officer/key stockholder. $838,441 $844,708 Note payable — SBA, payable in monthly installments of $20,503 including interest at the prime rate (as published by the Wall Street Journal) plus 1% adjusted every calendar quarter (4.25% at September 30, 2016), maturing in May 2018. The note is secured by the assets of the Company and the unconditional guarantee of the chief executive officer/key stockholder. 396,697 472,145 Note payable — SBA, payable in monthly installments of $5,107, including interest and SBA fees for an interest rate of 5.2% maturing March 2033. The note is secured by a second mortgage on property owned by the Company and an unconditional guarantee from both the Company and the chief executive officer/key stockholder. 651,725 659,852 Total Debt 1,886,863 1,976,705 Less current maturities 288,423 305,104 Long term Debt $1,598,440 $1,671,601 The Company’s credit agreements with its bank contain certain annual covenants, which were not met at June 30, 2013 and 2014, but which were subsequently waived by the bank. The covenants for June 2015 and June 2016 were not met and were not waived by the bank. However, due to the passage of time the notes have not been reclassified as due on demand as of June 30, 2016. The next covenant calculation date will be June 30, 2017.

Statutory Accounting Practices

Statutory Accounting Practices Disclosure	3 Months Ended
	Sep. 30, 2016
Statutory Accounting Practices Disclosure [Table Text Block] [Text Block]	6. RECENTLY ISSUED ACCOUNTING GUIDANCE (a) Revenue Recognition In May 2014, the Financial Standards Accounting Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under United States Generally Accepted Accounting Procedures (GAAP). The core principles of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. The standard is effective for annual periods beginning after December 15, 2016 and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). We are currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements and have not yet determined the method by which we will adopt the standard in 2017. The Company currently plans to adopt the standard using the “modified retrospective method”. Under that method, we will apply the rules to all contracts existing as of January 1, 2018, recognizing in the beginning retained earnings an adjustment for the cumulative effect of the change and providing additional disclosure comparing results to previous accounting standards. Upon initial evaluation, we believe the requirements of this standard will not result in a significant change to our results. (b) Leases In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842 ” (“ASU 2016-02”), which requires lessees to put most leases on their balance sheets but recognize the expenses on their income statements in a manner similar to current practice. The standard states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. The standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2018. Early adoption is permitted. We are currently evaluating the timing of our adoption and the impact that the updated standard will have on our consolidated financial statements. (c) Inventory In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, requiring that inventory be measured at the lower of cost and net realizable value. Net realizable value is defined as estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This ASU is effective within annual periods beginning on or after December 15, 2016, including interim periods within that reporting period. We are currently evaluating the impact this guidance may have on our consolidated financial statements. (d) Income Taxes In November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740)” providing guidance on the balance sheet classification of deferred taxes. The guidance effective for fiscal years beginning after December 15, 2016 and for interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the impact this guidance may have on our consolidated financial statements. (e) Statement of Cash Flows During August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, to address diversity in how certain cash receipts and cash payments are presented and classified in the statements of cash flows. The amendments are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The amendments should be applied using a retrospective transition method to each period presented. If retrospective application is impractical for some of the issues addressed by the update, the amendments for those issues would be applied prospectively. Early adoption is permitted, including adoption in an interim period. The Company does not expect the adoption of ASU 2016-15 to have a material impact on our consolidated financial statements.

Subsequent Events

Subsequent Events	3 Months Ended
	Sep. 30, 2016
Subsequent Events [Text Block]	7. SUBSEQUENT EVENT On February 24, 2017, Stinar Corporation signed a line of credit agreement with Kruckeberg Industries, LLC in amount of $100,000.00. The Maturity Date of this line of credit will be March 1, 2018, with interest rate of 9%.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Sep. 30, 2016
Summary of Significant Accounting Policies [Text Block]	8. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Environmental Costs Environmental expenditures that pertain to current operations or relate to future revenue are expensed or capitalized consistent with the Company's capitalization policy. Expenditures that result from the remediation of an existing condition caused by past operations that do not contribute to current or future revenue are expensed. Liabilities are recognized for remedial activities when the clean-up is probable and the cost can be reasonably estimated. As requested by Kruckeberg Industries, LLC, from January 2016 to March 2016, Landmark Environmental, LLC conducted a Phase I Environmental test and a Supplemental Phase II Environmental test and revealed that areas of buried debris and impacted soils should be excavated and transported off-site for disposal to allow for future redevelopment of the Property. The quote for excavation is around $76,000. The Company is planning to do the excavation in 2017.

Earnings Per Common Share (Tabl

Earnings Per Common Share (Tables)	3 Months Ended
	Sep. 30, 2016
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]	Three Months Ended September 30, 2016 September 30, 2015 Net income (loss) $ ( 104,614) $41,518 Weighted -average common shares used in the computation of EPS Basic and diluted 1,431,503 1,431,503 Basic and diluted net income (loss) per share (0.07) 0.03

Inventories (Tables)

Inventories (Tables)	3 Months Ended
	Sep. 30, 2016
Schedule of Inventory, Current [Table Text Block]	September 30, 2016 June 30, 2016 Raw Material $605,569 $624,011 Work in Process 377,916 418,473 Finished Goods - - Inventory $983,485 $1,042,484

Debt (Tables)

Debt (Tables)	3 Months Ended
	Sep. 30, 2016
Schedule of Debt [Table Text Block]	September 30, 2016 June 30, 2016 Note payable — bank, payable in monthly installments of $6,672 including interest at 6.0% with a balloon payment in January 2023. Effective June 2015, the interest rate is 10% due to payment default in accordance with the terms of the note. The note is secured by the first mortgage on property owned by the Company, continuing commercial guarantees from both the Company and the chief executive officer/key stockholder and by the assignment of a life insurance policy on the chief executive officer/key stockholder. $838,441 $844,708 Note payable — SBA, payable in monthly installments of $20,503 including interest at the prime rate (as published by the Wall Street Journal) plus 1% adjusted every calendar quarter (4.25% at September 30, 2016), maturing in May 2018. The note is secured by the assets of the Company and the unconditional guarantee of the chief executive officer/key stockholder. 396,697 472,145 Note payable — SBA, payable in monthly installments of $5,107, including interest and SBA fees for an interest rate of 5.2% maturing March 2033. The note is secured by a second mortgage on property owned by the Company and an unconditional guarantee from both the Company and the chief executive officer/key stockholder. 651,725 659,852 Total Debt 1,886,863 1,976,705 Less current maturities 288,423 305,104 Long term Debt $1,598,440 $1,671,601

Debt (Narrative) (Details)

Debt (Narrative) (Details)	3 Months Ended
	Sep. 30, 2016
Debt 1	2,016

Schedule of Earnings Per Share,

Schedule of Earnings Per Share, Basic and Diluted (Details)	3 Months Ended
	Sep. 30, 2016USD ($)
Earnings Per Common Share Schedule Of Earnings Per Share, Basic And Diluted 1	$ 104,614
Earnings Per Common Share Schedule Of Earnings Per Share, Basic And Diluted 2	41,518
Earnings Per Common Share Schedule Of Earnings Per Share, Basic And Diluted 3	1,431,503
Earnings Per Common Share Schedule Of Earnings Per Share, Basic And Diluted 4	$ 1,431,503
Earnings Per Common Share Schedule Of Earnings Per Share, Basic And Diluted 5	(0.07)
Earnings Per Common Share Schedule Of Earnings Per Share, Basic And Diluted 6	0.03

Schedule of Inventory, Current

Schedule of Inventory, Current (Details)	3 Months Ended
	Sep. 30, 2016USD ($)
Inventories Schedule Of Inventory, Current 1	$ 605,569
Inventories Schedule Of Inventory, Current 2	624,011
Inventories Schedule Of Inventory, Current 3	377,916
Inventories Schedule Of Inventory, Current 4	418,473
Inventories Schedule Of Inventory, Current 5	0
Inventories Schedule Of Inventory, Current 6	0
Inventories Schedule Of Inventory, Current 7	983,485
Inventories Schedule Of Inventory, Current 8	$ 1,042,484

Schedule of Debt (Details)

Schedule of Debt (Details)	3 Months Ended
	Sep. 30, 2016USD ($)
Debt Schedule Of Debt 1	$ 6,672
Debt Schedule Of Debt 2	6.00%
Debt Schedule Of Debt 3	10.00%
Debt Schedule Of Debt 4	$ 838,441
Debt Schedule Of Debt 5	844,708
Debt Schedule Of Debt 6	$ 20,503
Debt Schedule Of Debt 7	1.00%
Debt Schedule Of Debt 8	(4.25%)
Debt Schedule Of Debt 9	$ 396,697
Debt Schedule Of Debt 10	472,145
Debt Schedule Of Debt 11	$ 5,107
Debt Schedule Of Debt 12	5.20%
Debt Schedule Of Debt 13	$ 651,725
Debt Schedule Of Debt 14	659,852
Debt Schedule Of Debt 15	1,886,863
Debt Schedule Of Debt 16	1,976,705
Debt Schedule Of Debt 17	288,423
Debt Schedule Of Debt 18	305,104
Debt Schedule Of Debt 19	1,598,440
Debt Schedule Of Debt 20	$ 1,671,601