Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2016 | Feb. 14, 2017 | |
Document and Entity Information: | ||
Entity Registrant Name | SECURITY LAND & DEVELOPMENT CORP | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2016 | |
Amendment Flag | false | |
Entity Central Index Key | 88,572 | |
Current Fiscal Year End Date | --09-30 | |
Entity Common Stock, Shares Outstanding | 5,243,107 | |
Entity Filer Category | Smaller Reporting Company | |
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 (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Dec. 31, 2016 | Sep. 30, 2016 |
CURRENT ASSETS | ||
Cash | $ 656,392 | $ 500,660 |
Receivables from tenants, net of allowance of $52,293 at December 31, 2016 and $53,809 at September 30, 2016 | 273,781 | 413,848 |
Prepaid property taxes | 0 | 26,466 |
Income taxes receivable | 0 | 22,441 |
Total current assets | 930,173 | 963,415 |
INVESTMENT PROPERTIES | ||
Investment properties for lease, net of accumulated depreciation | 6,858,571 | 6,905,492 |
Land and improvements held for investment or development | 3,804,728 | 3,804,728 |
Total investment properties | 10,663,299 | 10,710,220 |
OTHER ASSETS | 67,195 | 69,627 |
Total Assets | 11,660,667 | 11,743,262 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 93,312 | 226,620 |
Income taxes payable | 36,001 | 0 |
Current maturities of notes payable | 253,483 | 250,418 |
Total current liabilities | 382,796 | 477,038 |
LONG-TERM LIABILITIES | ||
Notes payable, less current portion | 2,711,134 | 2,775,666 |
Deferred income taxes | 1,398,900 | 1,406,668 |
Total long-term liabilities | 4,110,034 | 4,182,334 |
Total liabilities | 4,492,830 | 4,659,372 |
STOCKHOLDERS' EQUITY | ||
Common stock, par value $.10 per share; 30,000,000 shares authorized; 5,243,107 shares issued and outstanding | 524,311 | 524,311 |
Additional paid-in capital | 333,216 | 333,216 |
Retained earnings | 6,310,310 | 6,226,363 |
Total Stockholders' Equity | 7,167,837 | 7,083,890 |
Liabilities and Stockholders' Equity | $ 11,660,667 | $ 11,743,262 |
CONSOLIDATED BALANCE SHEETS (U3
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | Dec. 31, 2016 | Sep. 30, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance on receivables from tenants | $ 52,293 | $ 53,809 |
Common Stock, Par Value | $ 0.10 | $ 0.10 |
Common Stock, Shares Authorized | 30,000,000 | 30,000,000 |
Common Stock, shares issued | 5,243,107 | 5,243,107 |
Common Stock, shares outstanding | 5,243,107 | 5,243,107 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (Unaudited) - USD ($) | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
OPERATING REVENUES | ||
Rent revenues | $ 414,939 | $ 410,360 |
OPERATING EXPENSES | ||
Depreciation and amortization | 49,352 | 49,056 |
Property taxes | 67,593 | 64,479 |
Payroll and related costs | 26,063 | 84,631 |
Insurance and utilities | 13,141 | 10,967 |
Repairs and maintenance | 15,012 | 7,630 |
Professional services | 57,032 | 30,128 |
Bad debt and other | 14,835 | 3,902 |
Total operating expenses | 243,028 | 250,793 |
Operating income | 171,911 | 159,567 |
OTHER INCOME (EXPENSE) | ||
Interest | (36,601) | (40,528) |
Other Income | 0 | 7,616 |
Total other income (expense) | (36,601) | (32,912) |
Income before income taxes | 135,310 | 126,655 |
INCOME TAXES PROVISION (BENEFIT) | ||
Income tax expense | 59,131 | 57,816 |
Income tax deferred (benefit) expense | (7,768) | 16,503 |
Total income taxes provision (benefit) | 51,363 | 74,319 |
Net income | 83,947 | 52,336 |
RETAINED EARNINGS, BEGINNING OF PERIOD | 6,226,363 | 5,926,112 |
RETAINED EARNINGS, END OF PERIOD | $ 6,310,310 | $ 5,978,448 |
PER SHARE DATA | ||
Net income per common share | $ .02 | $ .01 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
OPERATING ACTIVITIES | ||
Net income | $ 83,947 | $ 52,336 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Bad debts | 1,516 | 0 |
Depreciation and amortization | 49,352 | 49,056 |
Deferred income taxes | (7,768) | 16,503 |
Changes in deferred and accrued amounts | 90,151 | 105,188 |
Net cash provided by operating activities | 217,199 | 223,083 |
INVESTING ACTIVITIES | ||
Additions to investment properties and improvements to properties held for development | 0 | (7,705) |
Net cash used in investing activities | 0 | (7,705) |
FINANCING ACTIVITIES | ||
Principal payments on notes payable | (61,467) | (58,554) |
Net cash used in financing activities | (61,467) | (58,554) |
Net increase in cash | 155,732 | 156,824 |
CASH, BEGINNING OF PERIOD | 500,660 | 412,847 |
CASH, END OF PERIOD | 656,392 | 569,671 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for interest | 40,379 | 40,793 |
Cash paid for income taxes | $ 669 | $ 485 |
1. Basis of Presentation
1. Basis of Presentation | 3 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Note 1 – Basis of Presentation The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10-Q, Article 8 of Regulation S-X and accounting principles generally accepted in the United States of America; therefore, they do not include all disclosures necessary for a complete presentation of financial condition, results of operations, and cash flows. Such statements are unaudited but, in the opinion of management, reflect all adjustments, which are of a normal recurring nature and necessary for a fair presentation of results for the selected interim periods. Users of financial information produced for interim periods are encouraged to refer to the footnotes contained in the audited financial statements appearing in our Form 10-K for the year ended September 30, 2016 when reviewing these interim financial statements. The financial statements 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 four wholly owned subsidiaries, Royal Palms Motel, Inc., SLDC, LLC, SLDC 2, LLC and SLDC III, LLC (described on a consolidated basis as the “Company”). Significant intercompany transactions and accounts are eliminated in consolidation. Critical Accounting Policies: Estimates of Useful Lives of Investment Properties for Purposes of Depreciation Management has estimated useful lives of investment properties, except for land, that is leased, and the Company utilizes the straight-line method to compute depreciation over the estimated useful lives of the investment properties. Actual depreciation of investment properties will vary from management’s estimates, and the value of investment properties is more directly impacted by market conditions and the physical condition of the investment properties. Evaluation of Long-Lived Assets for Impairment The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of investment properties may not be recoverable. In evaluating recoverability, the Company generally estimates future cash flows expected to result from the use of the asset and its eventual disposition. An impairment loss is recognized when the expected future cash flows of the asset are less than its carrying amount. Estimates of Income Tax Rates Applicable to Deferred Taxes The Company has deferred income taxes through a series of tax-deferred like-kind exchange transactions on certain investment properties and through accelerated depreciation elections on certain other assets. Actual income taxes that may become due when taxable gains are realized on the sale of assets may differ from management’s estimates as a result of changes in tax laws, the tax status of the Company, or the actual taxable earnings of the Company in the periods the deferred income taxes become due. Refer to the Company’s Form 10-K for the year ended September 30, 2016 for further information regarding its critical accounting policies. Recently Issued Accounting Standards In May 2014, the FASB issued guidance to change the recognition of revenue from contracts with customers in future periods. The core principle of the new guidance is that an entity should recognize revenue to reflect the transfer of goods and services to customers in an amount equal to the consideration the entity receives or expects to receive. The guidance will be effective for the Company for reporting periods beginning after December 15, 2017. The comprehensive new standard will supersede existing revenue recognition guidance and require revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the Company expects to be entitled in exchange for those goods or services. Adoption of the new rules could affect the timing of revenue recognition for certain transactions. The guidance permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. The Company is currently evaluating the impact of adoption and the implementation approach to be used. In August 2014, the FASB issued guidance that is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. In connection with preparing financial statements, management will need to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the organization’s ability to continue as a going concern within one year after the date that the financial statements are issued. The guidance will be effective for the Company for the annual period ending September 30, 2017, and for annual periods and interim periods thereafter. The Company does not expect this guidance to have a material effect on its financial statements. In August 2015, the FASB issued amendments to the Interest topic of the Accounting Standards Codification to clarify the SEC staff’s position on presenting and measuring debt issuance costs incurred in connection with line-of-credit arrangements. The amendments were effective upon issuance. The Company does not expect these amendments to have a material effect on its financial statements. In August 2015, the FASB deferred the effective date of ASU 2014-09, Revenue from Contracts with Customers. As a result of the deferral, the guidance in ASU 2014-09 will be effective for the Company for reporting periods beginning after December 15, 2017. The Company will apply the guidance using a modified retrospective approach. The Company does not expect these amendments to have a material effect on its financial statements. In November 2015, the FASB amended the Income Taxes topic of the Accounting Standards Codification to simplify the presentation of deferred income taxes by requiring that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments will be effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company will apply the guidance prospectively. The Company does not expect these amendments to have a material effect on its financial statements. In February 2016, the FASB amended the Leases topic of the Accounting Standards Codification to revise certain aspects of recognition, measurement, presentation, and disclosure of leasing transactions. The amendments will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the effect that implementation of the new standard will have on its financial position, results of operations, and cash flows. In March 2016, the FASB amended the Revenue from Contracts with Customers topic of the Accounting Standards Codification to clarify the implementation guidance on principal versus agent considerations and address how an entity should assess whether it is the principal or the agent in contracts that include three or more parties. The amendments will be effective for the Company for reporting periods beginning after December 15, 2017. The Company does not expect these amendments to have a material effect on its financial statements. In March 2016, the FASB issued guidance to simplify several aspects of the accounting for share-based payment award transactions including the income tax consequences, the classification of awards as either equity or liabilities, and the classification on the statement of cash flows. Additionally, the guidance simplifies two areas specific to entities other than public business entities allowing them apply a practical expedient to estimate the expected term for all awards with performance or service conditions that have certain characteristics and also allowing them to make a one-time election to switch from measuring all liability-classified awards at fair value to measuring them at intrinsic value. The amendments will be effective for the Company for annual periods beginning after December 15, 2016 and interim periods within those annual periods-public business entities. The Company does not expect these amendments to have a material effect on its financial statements. In May 2016, the FASB amended the Revenue from Contracts with Customers topic of the Accounting Standards Codification to clarify guidance related to collectability, noncash consideration, presentation of sales tax, and transition. The amendments will be effective for the Company for reporting periods beginning after December 15, 2017. The Company does not expect these amendments to have a material effect on its financial statements. In August 2016, the FASB amended the Statement of Cash Flows topic of the Accounting Standards Codification to clarify how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments will be effective for the Company for fiscal years beginning after December 15, 2017 including interim periods within those fiscal years. The Company does not expect these amendments to have a material effect on its financial statements. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows. |
2. Investment Properties
2. Investment Properties | 3 Months Ended |
Dec. 31, 2016 | |
INVESTMENT PROPERTIES | |
Investment Properties | Investment properties leased or held for lease to others under operating leases consisted of the following at December 31, 2016 and September 30, 2016: December 31, 2016 September 30, 2016 (unaudited) National Plaza building, land and improvements $ 5,322,260 $ 5,322,260 Evans Ground Lease, land and improvements 2,382,673 2,382,673 Wrightsboro Road Building, land and improvements 1,905,875 1,905,875 Commercial land and improvements 3,804,728 3,804,728 13,415,536 13,415,536 Less accumulated depreciation (2,752,237 ) (2,705,316 ) Investment properties for lease, net of depreciation $ 10,663,299 $ 10,710,220 Depreciation expense totaled approximately $47,000 and $48,000 for the three-month periods ended December 31, 2016 and 2015, respectively. 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 National Plaza’s anchor tenant. The Company entered into a long-term ground lease with a major national tenant and its developer in May 2006 on approximately 18 acres of land in Columbia County, Georgia. The agreement required monthly rental payments of $20,833 during the development period, which was completed in January 2007. Following the expiration of the development period, the lease required annual rental payments of $500,000 for the first 5 years then increasing 5% in years 6, 11, and 16. The lessee has an option to renew at year 21 and another option every 5 years thereafter for a possible total lease term of 50 years. The lease provides for the tenant to pay for insurance and property taxes. The Company is recognizing rents on a straight-line basis over the lease term. In September of 2015, the Company purchased a commercial building consisting of approximately 25,000 square feet of retail space and 27,000 square feet of warehouse space on approximately 3.5 acres of land located on Wrightsboro Road. The retail space is currently leased to a local retailer and rent commenced on October 1, 2015. The related lease term is 10 years with annual rental payments totaling $142,000, paid monthly, increasing to $153,000 per year in 2021. The warehouse space was available for lease as of September 30, 2016. The Company is recognizing rents on a straight-line basis over the lease term. The Company holds several parcels of land for investment or development purposes, including 19.38 acres of land in North Augusta, South Carolina, purchased in parcels during 2007 and 2008. The Company also owns approximately 85 acres of land in south Richmond County, Georgia and a 1.1-acre parcel along Washington Road in Augusta, Georgia that adjoins the Company’s National Plaza investment property. The aggregate costs of these investment properties held for investment or development was $3,804,728 at December 31, 2016 and September 30, 2016, respectively. Refer to the Company’s Form 10-K for the year ended September 30, 2016 for further information on operating lease agreements and land held for investment or development purposes. |
3. Notes Payable and Line of Cr
3. Notes Payable and Line of Credit | 3 Months Ended |
Dec. 31, 2016 | |
Notes Payable [Abstract] | |
Notes Payable and Line of Credit | Notes payable consisted of the following at: December 31, 2016 (unaudited) September 30, A note payable to an insurance company collateralized with approximately 18 acres of land in Columbia County, Georgia, and an assignment of the long-term ground lease. The note is payable in monthly installments of $17,896, including principal and interest, through May 1, 2027, and bears interest at a fixed rate of 5.85%. $ 1,672,074 $ 1,701,024 A note payable to a regional financial institution, secured with a mortgage interest in National Plaza and an assignment of rents. The note is payable in monthly installments of $15,220, including principal and interest, through April 2025, and bears interest at a fixed rate of 4%. The proceeds were used to pay the Company’s outstanding income tax liability, four notes payable collateralized by the Company’s land held for lease and investment portfolio and one uncollateralized note payable to a shareholder. The proceeds were also used to fund improvements at National Plaza. 1,292,543 1,325,060 2,964,617 3,026,084 Less current maturities (253,483 ) (250,418 ) $ 2,711,134 $ 2,775,666 Management of the Company expects future liquidity needs of the Company to be funded from rent revenues, refinancing and the appreciation in investment properties (which can be sold or mortgaged, if necessary). Current maturities of notes payable will require the Company to make payments over the next 12 months totaling $253,483. The Company projects that it will be able to fund the payment of its current maturities of notes payable through cash flows generated from its operations and cash on hand, but there can be no assurance that this will occur. In November of 2016, the Company obtained a $3,000,000 line of credit from a regional financial institution to finance a probable equity transaction. The Company has not used the line of credit. The line bears a rate of 3.5% and matures November 29, 2017. See Note 7 – Subsequent Event. |
4. Income Taxes
4. Income Taxes | 3 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | At September 30, 2016, the Company had income taxes receivable of $22,441 related to the fiscal year 2016. As of December 31, 2016, the Company has income taxes payable of $36,001, all of which was related to estimated taxes due for the fourth quarter of 2016 and was paid in full in January of 2017. |
5. Concentrations
5. Concentrations | 3 Months Ended |
Dec. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Substantially all of the Company’s assets consist of real estate located in Richmond and Columbia Counties in the state of Georgia and in Aiken County, South Carolina. Substantially all of the Company’s revenues are earned from three of the Company’s investment properties, National Plaza, the Evans Ground Lease, and the Wrightsboro Road Lease, which comprise approximately 51%, 40% and 9% of the Company’s revenues, respectively, for the three-month period ended December 31, 2016. The anchor tenant for National Plaza, Publix Supermarkets, Inc. (“Publix”), a regional food supermarket chain, leases approximately 81% of the space at National Plaza. The Company generates approximately 31% of its revenues though its lease with Publix. |
6. Related Party Transactions
6. Related Party Transactions | 3 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | The Company purchases insurance from an insurance company of which a member of the Company’s Board of Directors is President Emeritus. The Company’s Board of Directors believes that the insurance prices obtained from the insurance company were not in excess of prices that would have been paid had the Company obtained this insurance from other sources. During the quarter, the Company paid a stockholder who is also the son of the President for accounting services. The Company’s Board of Directors believes that the accounting services paid to the son of its President were not in excess of prices that would have been paid had the Company obtained accounting services from other sources. |
7. Subsequent Event
7. Subsequent Event | 3 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Event | On February 7, 2017 Security Land & Development Corporation offered to purchase up to 2,526,247 shares (approximately 48.2% of the Company’s outstanding shares) of its common stock from its stockholders through a tender offer at a price of $1.25 per share. The Offer is part of a plan intended to enhance stockholder value and provide liquidity for the stockholders. The Offer expires on March 15, 2017, unless extended by the Company. |
1. Basis of Presentation (Polic
1. Basis of Presentation (Policies) | 3 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10-Q, Article 8 of Regulation S-X and accounting principles generally accepted in the United States of America; therefore, they do not include all disclosures necessary for a complete presentation of financial condition, results of operations, and cash flows. Such statements are unaudited but, in the opinion of management, reflect all adjustments, which are of a normal recurring nature and necessary for a fair presentation of results for the selected interim periods. Users of financial information produced for interim periods are encouraged to refer to the footnotes contained in the audited financial statements appearing in our Form 10-K for the year ended September 30, 2016 when reviewing these interim financial statements. The financial statements 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 four wholly owned subsidiaries, Royal Palms Motel, Inc., SLDC, LLC, SLDC 2, LLC and SLDC III, LLC (described on a consolidated basis as the “Company”). Significant intercompany transactions and accounts are eliminated in consolidation. |
Estimates of Useful Lives of Investment Properties for Purposes of Depreciation | Estimates of Useful Lives of Investment Properties for Purposes of Depreciation Management has estimated useful lives of investment properties, except for land, that is leased, and the Company utilizes the straight-line method to compute depreciation over the estimated useful lives of the investment properties. Actual depreciation of investment properties will vary from management’s estimates, and the value of investment properties is more directly impacted by market conditions and the physical condition of the investment properties. |
Evaluation of Long-Lived Assets for Impairment | Evaluation of Long-Lived Assets for Impairment The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of investment properties may not be recoverable. In evaluating recoverability, the Company generally estimates future cash flows expected to result from the use of the asset and its eventual disposition. An impairment loss is recognized when the expected future cash flows of the asset are less than its carrying amount. |
Estimates of Income Tax Rates Applicable to Deferred Taxes | Estimates of Income Tax Rates Applicable to Deferred Taxes The Company has deferred income taxes through a series of tax-deferred like-kind exchange transactions on certain investment properties and through accelerated depreciation elections on certain other assets. Actual income taxes that may become due when taxable gains are realized on the sale of assets may differ from management’s estimates as a result of changes in tax laws, the tax status of the Company, or the actual taxable earnings of the Company in the periods the deferred income taxes become due. Refer to the Company’s Form 10-K for the year ended September 30, 2016 for further information regarding its critical accounting policies. |
Recently issued accounting standards | Recently Issued Accounting Standards In May 2014, the FASB issued guidance to change the recognition of revenue from contracts with customers in future periods. The core principle of the new guidance is that an entity should recognize revenue to reflect the transfer of goods and services to customers in an amount equal to the consideration the entity receives or expects to receive. The guidance will be effective for the Company for reporting periods beginning after December 15, 2017. The comprehensive new standard will supersede existing revenue recognition guidance and require revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the Company expects to be entitled in exchange for those goods or services. Adoption of the new rules could affect the timing of revenue recognition for certain transactions. The guidance permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. The Company is currently evaluating the impact of adoption and the implementation approach to be used. In August 2014, the FASB issued guidance that is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. In connection with preparing financial statements, management will need to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the organization’s ability to continue as a going concern within one year after the date that the financial statements are issued. The guidance will be effective for the Company for the annual period ending September 30, 2017, and for annual periods and interim periods thereafter. The Company does not expect this guidance to have a material effect on its financial statements. In August 2015, the FASB issued amendments to the Interest topic of the Accounting Standards Codification to clarify the SEC staff’s position on presenting and measuring debt issuance costs incurred in connection with line-of-credit arrangements. The amendments were effective upon issuance. The Company does not expect these amendments to have a material effect on its financial statements. In August 2015, the FASB deferred the effective date of ASU 2014-09, Revenue from Contracts with Customers. As a result of the deferral, the guidance in ASU 2014-09 will be effective for the Company for reporting periods beginning after December 15, 2017. The Company will apply the guidance using a modified retrospective approach. The Company does not expect these amendments to have a material effect on its financial statements. In November 2015, the FASB amended the Income Taxes topic of the Accounting Standards Codification to simplify the presentation of deferred income taxes by requiring that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments will be effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company will apply the guidance prospectively. The Company does not expect these amendments to have a material effect on its financial statements. In February 2016, the FASB amended the Leases topic of the Accounting Standards Codification to revise certain aspects of recognition, measurement, presentation, and disclosure of leasing transactions. The amendments will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the effect that implementation of the new standard will have on its financial position, results of operations, and cash flows. In March 2016, the FASB amended the Revenue from Contracts with Customers topic of the Accounting Standards Codification to clarify the implementation guidance on principal versus agent considerations and address how an entity should assess whether it is the principal or the agent in contracts that include three or more parties. The amendments will be effective for the Company for reporting periods beginning after December 15, 2017. The Company does not expect these amendments to have a material effect on its financial statements. In March 2016, the FASB issued guidance to simplify several aspects of the accounting for share-based payment award transactions including the income tax consequences, the classification of awards as either equity or liabilities, and the classification on the statement of cash flows. Additionally, the guidance simplifies two areas specific to entities other than public business entities allowing them apply a practical expedient to estimate the expected term for all awards with performance or service conditions that have certain characteristics and also allowing them to make a one-time election to switch from measuring all liability-classified awards at fair value to measuring them at intrinsic value. The amendments will be effective for the Company for annual periods beginning after December 15, 2016 and interim periods within those annual periods-public business entities. The Company does not expect these amendments to have a material effect on its financial statements. In May 2016, the FASB amended the Revenue from Contracts with Customers topic of the Accounting Standards Codification to clarify guidance related to collectability, noncash consideration, presentation of sales tax, and transition. The amendments will be effective for the Company for reporting periods beginning after December 15, 2017. The Company does not expect these amendments to have a material effect on its financial statements. In August 2016, the FASB amended the Statement of Cash Flows topic of the Accounting Standards Codification to clarify how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments will be effective for the Company for fiscal years beginning after December 15, 2017 including interim periods within those fiscal years. The Company does not expect these amendments to have a material effect on its financial statements. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows. |
2. Investment Properties (Table
2. Investment Properties (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
INVESTMENT PROPERTIES | |
Schedule of Investment properties leased or held for lease | December 31, 2016 September 30, 2016 (unaudited) National Plaza building, land and improvements $ 5,322,260 $ 5,322,260 Evans Ground Lease, land and improvements 2,382,673 2,382,673 Wrightsboro Road Building, land and improvements 1,905,875 1,905,875 Commercial land and improvements 3,804,728 3,804,728 13,415,536 13,415,536 Less accumulated depreciation (2,752,237 ) (2,705,316 ) Investment properties for lease, net of depreciation $ 10,663,299 $ 10,710,220 |
3. Notes Payable and Line of 15
3. Notes Payable and Line of Credit (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable and line of credit | December 31, 2016 (unaudited) September 30, A note payable to an insurance company collateralized with approximately 18 acres of land in Columbia County, Georgia, and an assignment of the long-term ground lease. The note is payable in monthly installments of $17,896, including principal and interest, through May 1, 2027, and bears interest at a fixed rate of 5.85%. $ 1,672,074 $ 1,701,024 A note payable to a regional financial institution, secured with a mortgage interest in National Plaza and an assignment of rents. The note is payable in monthly installments of $15,220, including principal and interest, through April 2025, and bears interest at a fixed rate of 4%. The proceeds were used to pay the Company’s outstanding income tax liability, four notes payable collateralized by the Company’s land held for lease and investment portfolio and one uncollateralized note payable to a shareholder. The proceeds were also used to fund improvements at National Plaza. 1,292,543 1,325,060 2,964,617 3,026,084 Less current maturities (253,483 ) (250,418 ) $ 2,711,134 $ 2,775,666 |
2. Investment Properties (Detai
2. Investment Properties (Details - Real estate) - USD ($) | Dec. 31, 2016 | Sep. 30, 2016 |
Real Estate Properties [Line Items] | ||
Investment property gross | $ 13,415,536 | $ 13,415,536 |
Less accumulated depreciation | (2,752,237) | (2,705,316) |
Total investment properties | 10,663,299 | 10,710,220 |
National Plaza building, land and improvements [Member] | ||
Real Estate Properties [Line Items] | ||
Investment property gross | 5,322,260 | 5,322,260 |
Evans Ground Lease, land and improvements [Member] | ||
Real Estate Properties [Line Items] | ||
Investment property gross | 2,382,673 | 2,382,673 |
Wrightsboro Road Building land and improvements [Member] | ||
Real Estate Properties [Line Items] | ||
Investment property gross | 1,905,875 | |
Wrightsboro [Member] | ||
Real Estate Properties [Line Items] | ||
Investment property gross | 1,905,875 | |
Commercial land and improvements [Member] | ||
Real Estate Properties [Line Items] | ||
Investment property gross | $ 3,752,863 | $ 3,804,728 |
2. Investment Properties (Det17
2. Investment Properties (Details Narrative) | 3 Months Ended | ||
Dec. 31, 2016USD ($)ft²aInteger | Dec. 31, 2015USD ($) | Sep. 30, 2016USD ($) | |
Depreciation expense | $ | $ 47,000 | $ 48,000 | |
Cost of properties held for investment or development | $ | $ 3,804,728 | $ 3,804,728 | |
National Plaza [Member] | Rentable Space [Member] | One Customer [Member] | |||
Concentration percentage | 81.00% | ||
Wrightsboro [Member] | |||
Acres of property held | Integer | 3.5 | ||
Wrightsboro [Member] | Retail Space [Member] | |||
Area of property held | ft² | 25,000 | ||
Wrightsboro [Member] | Warehouse Space [Member] | |||
Area of property held | ft² | 27,000 | ||
North Augusta, SC [Member] | |||
Acres of property held | 19.38 | ||
Richmond County [Member] | |||
Acres of property held | 85 | ||
Washington Road [Member] | |||
Acres of property held | 1.1 |
3. Notes Payable and Line of 18
3. Notes Payable and Line of Credit (Details - Notes payable) - USD ($) | 3 Months Ended | |
Dec. 31, 2016 | Sep. 30, 2016 | |
Debt Instrument [Line Items] | ||
Total notes payable | $ 2,964,617 | $ 3,026,084 |
Less current maturities | (253,483) | (250,418) |
Noncurrent notes payable | $ 2,711,134 | 2,775,666 |
Interest rate (in percent) | 3.50% | |
Note Payable 1 [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable | $ 1,672,074 | $ 1,701,024 |
Interest rate (in percent) | 5.85% | |
Periodic monthly installments | $ 17,896 | |
Debt maturity date | May 1, 2027 | |
Collateral | 18 acres of land in Columbia County, GA | |
Note Payable 2 [Member] | ||
Debt Instrument [Line Items] | ||
Total notes payable | $ 1,292,543 | $ 1,325,060 |
Interest rate (in percent) | 4.00% | |
Periodic monthly installments | $ 15,220 | |
Debt maturity date | Apr. 1, 2025 | |
Collateral | Secured with a mortgage interest in National Plaza and an assignment of rents. |
3. Notes Payable and Line of 19
3. Notes Payable and Line of Credit (Details Narrative) | 3 Months Ended |
Dec. 31, 2016USD ($) | |
Notes Payable [Abstract] | |
Current maturities of notes payable | $ 253,483 |
Credit line maximum borrowing capacity | $ 3,000,000 |
Credit line stated interest rate | 3.50% |
Credit line expiration date | Nov. 29, 2017 |
Credit line amount outstanding | $ 0 |
4. Income Taxes (Details Narrat
4. Income Taxes (Details Narrative) - USD ($) | Dec. 31, 2016 | Sep. 30, 2016 |
Income Tax Disclosure [Abstract] | ||
Income taxes receivable | $ 0 | $ 22,441 |
Income taxes payable | $ 36,001 | $ 0 |
5. Concentrations (Details)
5. Concentrations (Details) | 3 Months Ended |
Dec. 31, 2016 | |
Sales Revenue, Net [Member] | Publix [Member] | |
Concentration percentage | 31.00% |
National Plaza [Member] | Rent Revenue [Member] | |
Concentration percentage | 51.00% |
National Plaza [Member] | Rentable Space [Member] | One Customer [Member] | |
Concentration percentage | 81.00% |
Evans Ground Lease [Member] | Rent Revenue [Member] | |
Concentration percentage | 40.00% |
Wrightsboro Road Lease [Member] | Rent Revenue [Member] | |
Concentration percentage | 9.00% |