U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

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FORM 10-Q

 

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x		Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
		For the quarterly period ended March 31, 2015
o		Transition Report Pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
		For the transition period of              to

 

Commission File Number 0-7865.

 

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SECURITY LAND AND DEVELOPMENT CORPORATION

 

(Exact name of issuer as specified in its charter) 

Georgia		58-1088232
(State or other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)

 

2816 Washington Road, #103, Augusta, Georgia 30909

(Address of Principal Executive Offices)

 

Issuers Telephone Number (706) 736-6334

 

  (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Year)

 

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Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES  x   NO  o

 

        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company x

 

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).  YES x    NO  o

 

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

                                                                                                                    oYes      xNo

 

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.

 

Class		Outstanding at May 11, 2015
Common Stock, $0.10 Par Value		5,243,107 shares

 

 

SECURITY LAND AND DEVELOPMENT CORPORATION

Form 10-Q

Index

 

Part I	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets as of March 31, 2015 and September 30, 2014	1
	Consolidated Statements of Income and Retained Earnings for the Three Month Periods ended and for the Six Month Periods ended March 31, 2015 and 2014	2
	Condensed Consolidated Statements of Cash Flows for the Three Month Periods ended and for the Six Month Periods ended March 31, 2015 and 2014	3
	Notes to the Consolidated Financial Statements	4-8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9-10
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	10
Item 4.	Controls and Procedures	10-11
Part II	OTHER INFORMATION	11
Item 1.	Legal Proceedings	11
Item 1A.	Risk Factors	11
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	11
Item 3.	Defaults Upon Senior Securities	11
Item 4.	Reserved for Future Use	11
Item 5.	Other Information	11
Item 6.	Exhibits	11
	SIGNATURES	12-14

 

  

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

  

SECURITY LAND AND DEVELOPMENT CORPORATION 

CONSOLIDATED BALANCE SHEETS

		March 31,				September 30,
		2015				2014
	(unaudited)
ASSETS
CURRENT ASSETS
Cash		$	464,311			$	65,982
Receivables from tenants, net of allowance of $46,392 and $43,578 at March 31, 2015 and September 30, 2014, respectively			443,594				527,579
Total current assets			907,905				593,561
INVESTMENT PROPERTIES
Investment properties for lease, net of accumulated depreciation			5,367,959				5,459,560
Land and improvements held for investment or development			3,639,598				3,639,598
			9,007,557				9,099,158
OTHER ASSETS			83,919				76,239
		$	9,999,381			$	9,768,958
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses			289,908			$	452,669
Income taxes payable			125,637				229,031
Current maturities of notes payable			219,933				554,065
Current maturities of deferred revenue			6,163				18,489
Current note payable to stockholder			-				50,433
Total current liabilities			641,641				1,304,687
LONG-TERM LIABILITIES
Notes payable, less current portion			3,146,194				2,435,541
Deferred income taxes			730,239				737,230
Total long-term liabilities			3,876,433				3,172,771
Total liabilities			4,518,074				4,477,458
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			4,623,780				4,433,973
Total Stockholders’ Equity			5,481,307				5,291,500
Liabilities and Stockholders’ Equity		$	9,999,381			$	9,768,958

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

SECURITY LAND AND DEVELOPMENT CORPORATION 

CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS

		For the Three Month								For the Six Month
		Period Ended March 31,								Period Ended March 31,
		2015				2014				2015				2014
		(unaudited)				(unaudited)				(unaudited)				(unaudited)
OPERATING REVENUE
Rent revenue		$	383,653			$	360,252			$	764,925			$	734,000
OPERATING EXPENSES
Depreciation and amortization			42,309				32,938				84,620				65,875
Property taxes			69,228				64,107				133,650				131,970
Payroll and related costs			20,222				19,930				42,093				40,063
Insurance and utilities			8,677				10,500				17,448				18,135
Repairs and maintenance			7,377				9,550				23,501				33,270
Professional services			18,000				28,576				42,944				40,156
Bad debt			-				-				2,814				-
Penalties			7,026				-				11,544				-
Other			728				1,969				2,442				2,573
			173,567				167,570				361,056				332,042
Operating income			210,086				192,682				403,869				401,958
OTHER EXPENSE
Interest			46,426				47,970				91,313				95,369
Income before income taxes			163,660				144,712				312,556				306,589
INCOME TAXES PROVISION (BENEFIT)
Income tax expense			69,723				53,897				129,740				115,828
Income tax deferred expense (benefit)			(3,494	)			1,035				(6,991	)			554
			66,229				54,932				122,749				116,382
Net income			97,431				89,780				189,807				190,207
RETAINED EARNINGS, BEGINNING OF PERIOD			4,526,349				4,204,582				4,433,973				4,104,155
RETAINED EARNINGS, END OF PERIOD		$	4,623,780			$	4,294,362			$	4,623,780			$	4,294,362
PER SHARE DATA
Net income per common share		$	0.02			$	0.02			$	0.04			$	0.04

  

The accompanying notes are an integral part of these consolidated financial statements.

 

 

SECURITY LAND AND DEVELOPMENT CORPORATION 

CONSOLIDATED STATEMENTS OF CASH FLOWS

		For the Three Month								For the Six Month
		Period Ended March 31,								Period Ended March 31,
		2015				2014				2015				2014
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
OPERATING ACTIVITIES
Net income		$	97,431			$	89,780			$	189,807			$	190,207
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization			42,309				32,938				84,620				65,875
Deferred income tax			(3,494	)			1,035				(6,991	)			554
Changes in deferred and accrued amount:			(188,600	)			(30,032	)			(194,496	)			(20,383	)
Net cash (used in) provided by operating activities			(52,354	)			93,721				72,940				236,253
INVESTING ACTIVITIES
Sale of investment properties and other assets for improvements to property held for lease			11,250				-				11,250				-
Additions to investment properties and other assets for improvements to property held for lease			(11,949	)			(4,000	)			(11,949	)			(4,000	)
Net cash used in investing activities			(699	)			(4,000	)			(699	)			(4,000	)
FINANCING ACTIVITIES
Repayments to stockholder			(50,433	)			-				(50,433	)			-
Proceeds from stockholder			-				50,015				-				50,015
Proceeds from note payable			1,500,000				4,007				1,500,000				4,007
Principal payments on notes payable			(962,485	)			(144,710	)			(1,123,479	)			(286,860	)
Net cash provided by (used in) financing activities			487,082				(90,688	)			326,088				(232,838	)
Net increase (decrease) in cash			434,029				(967	)			398,329				(585	)
CASH, BEGINNING OF PERIOD			30,282				24,981				65,982				24,599
CASH, END OF PERIOD		$	464,311			$	24,014			$	464,311			$	24,014
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest		$	46,815			$	52,733			$	90,204			$	100,132
Cash paid for income taxes		$	188,241			$	86,835			$	226,143			$	86,835

 

The accompanying notes are an integral part of these consolidated financial statements.

 

SECURITY LAND AND DEVELOPMENT CORPORATION

 

Notes to the Consolidated Financial Statements

 

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, 2014 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, 2014 for further information regarding its critical accounting policies.

 

 

Note 1 – Basis of Presentation, Continued

 

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts (Topic 606). The new standard is effective for reporting periods beginning after December 15, 2016 and early adoption is not permitted. 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 impacts of adoption and the implementation approach to be used.

 

Note 2 – Investment Properties

 

Investment properties leased or held for lease to others under operating leases consisted of the following at March 31, 2015 and September 30, 2014:

		March 31,				September 30,
		2015				2014
		(unaudited)
National Plaza building, land and improvements		$	5,325,348			$	5,325,348
Evans Ground Lease, land and improvements			2,382,673				2,382,673
Commercial land and improvements			3,639,598				3,639,598
			11,347,619				11,347,619
Less accumulated depreciation			(2,439,796	)			(2,360,803	)
			8,907,823				8,986,816
Residential rental property			134,597				145,847
Less accumulated depreciation			(34,863	)			(33,505	)
			99,734				112,342
Investment properties for lease, net of accumulated depreciation		$	9,007,557			$	9,099,158

 

Depreciation expense totaled approximately $40,000 and $31,000 for the three-month periods ended March 31, 2015 and 2014, respectively and approximately $80,000 and $62,000 for the six-month periods ended March 31, 2015 and 2014, respectively.

 

The National Plaza is a retail strip center located on Washington Road in Augusta Georgia. Approximately 81% of the rentable space at the National Plaza is leased to Publix Supermarkets, Inc., the 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 requires 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.

 

 

Note 2 – Investment Properties, Continued

 

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 $3,639,598 at March 31, 2015 and September 30, 2014.

 

Refer to the Company’s Form 10-K for the year ended September 30, 2014 for further information on operating lease agreements and land held for investment or development purposes.

 

Note 3 – Notes Payable

 

Notes payable consisted of the following at:

		March 31,				September 30,
		2015				2014
		(unaudited)
In November of 2012, the Company converted the line of credit to a fixed rate loan due December 2017. The new term loan accrued interest at 5.5% annually with monthly installments of $3,287. The balance related to the purchase of the 1 acre adjoining the North Augusta, South Carolina property in May 2008 and was collateralized by the residential property on Stanley Drive in Augusta, Georgia. The note was paid off in March 2015.		$	-			$	260,323
A note payable to an insurance company, secured with a mortgage interest in National Plaza and an assignment of rents. The note was payable in monthly installments of $35,633, including principal and interest, through June 2015, and bore interest at a fixed rate of 7.875%. The note was paid off in March 2015.			-				310,423
A note payable to a regional financial institution collateralized with 17.54 acres of land in North Augusta, South Carolina. The note was payable in monthly installments of $7,563, including principal and interest, through July 2018, and bore interest at a fixed rate of 5%. The note was paid off in March 2015.			-				319,330
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%.			1,866,127				1,918,026
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.			1,500,000				-

A construction loan to a regional financial institution collateralized with 17.54 acres of land in North Augusta, South Carolina. The loan was procured to finance tenant improvements for the lease of in-line space at National Plaza executed on January 17, 2014. In April, 2014 construction of the tenant improvements was completed and with total principal borrowed of $186,804. The loan converted to a note payable with monthly installments of $3,728 including principal and interest over a 60 month term with fixed interest of 4.25%. The related lease agreement calls for monthly payments of this amount to be paid to the Company in addition to monthly minimum rental payments. The note was paid off in March 2015.			-				181,504
A note payable to a stockholder, who is also a member of the Flanagin Family, to meet the cash flow needs of the Company. The note matured in July 2015 and accrued interest at 5%. The note was paid off in March 2015.			-				50,433
			3,366,127				3,040,039
Less current maturities			(219,933	)			(604,498	)
		$	3,146,194			$	2,435,541

 

 

Note 3 – Notes Payable, Continued

 

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). Additionally, funding can be obtained from members of the Company’s Board of Directors.

 

Current maturities of notes payable will require the Company to make payments over the next 12 months totaling $219,933. 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.

 

If the Company is unsuccessful in their efforts described above, the Company intends to seek additional financing or sell certain of its assets.

 

Note 4 – Income Taxes

 

At September 30, 2014 the Company had outstanding income taxes payable of $229,031, all of which was related to the fiscal year 2014. In March 2015 the Company executed a note payable to a regional financial institution, secured with a mortgage interest in National Plaza and an assignment of rents and used a portion of the related proceeds to pay the outstanding tax liability for the fiscal year 2014 in full.

 

Note 5 – 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. Approximately 99% of the Company’s revenues are earned from two of the Company’s investment properties, National Plaza and the Evans Ground Lease, which comprise approximately 56% and 43% of the Company’s revenues, respectively. 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 42% of its revenues though its lease with Publix.

 

 

Note 6 – Related Party Transactions

 

The Company hired an attorney who is also a member of the Company’s Board of Directors and who also serves as Vice President of the Company, to represent the Company in a legal matter regarding a tenant’s claim for reimbursement of certain expenses charged. It is the opinion of the Company’s management that the Company is not liable for this claim.

 

During the second quarter of fiscal 2014, the Company borrowed $50,015 from a stockholder, who is also a member of the Flanagin family, to meet cash flow needs. This note was paid in full in March 2015.

 

Note 7- Subsequent Events

 

In April 2015 the Company sold 0.159 acres as permanent easement and 0.038 acres as fee simple right of way, previously included in National Plaza, to the City of Augusta, Georgia, for a road realignment project. Also in April 2015, the Company entered into a contract to replace the roof at National Plaza.

 

In February 2015 the Company has entered into a contract to sell approximately one (1) acre of land, currently included as part of National Plaza, adjacent to Stanley Drive and a residential house on .43 acres of land held for lease on Stanley Drive. The closing for this sale is expected to be June 15, 2015. The Company is searching for property to purchase as part of a tax-free like kind exchange as part of the June 2015 closing.

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Results of Operations:

 

The Company’s results of operations for the six months ended March 31, 2015, and a comparative analysis of the same period for 2014 are presented below:

 

										Increase (Decrease)
										2015 compared to 2014
		2015				2014				Amount				Percent
Rent revenue		$	764,925			$	734,000			$	30,925				4	%
Operating expenses			361,056				332,042				29,014				9	%
Interest expense			91,313				95,369				(4,056	)			-4	%
Income tax expense			122,749				116,382				6,367				5	%
Net income			189,807				190,207				(400	)			0	%

 

Rent revenue consists primarily of rent revenue from the Company’s National Plaza, a strip center on Washington Road in Augusta, Georgia, and the Evans Ground Lease in Evans, Georgia. The Company also earned rent revenue from a ground lease with an auto-repair service operation on an out-parcel of National Plaza. Rental income for the six months period ended March 31, 2015 increased compared to the same period for 2014 due to increased occupancy in the small shops at National Plaza.

 

Refer to the Company’s Form 10-K for the year ended September 30, 2014 for further information regarding the properties owned and their lease terms.

 

Total operating expenses for the six months ended March 31, 2015 increased compared to the same period for 2014 due primarily to increased depreciation expense and income tax penalties. Depreciation expense increased due to capital expenses incurred in relation to a tenant build-out in 2014. Tax penalties incurred in 2015 that were not incurred in 2014 relate to the Company’s outstanding income tax balance at September 30, 2014. Management expects operating expenses for the remainder of the current fiscal year to be comparable to the current operating period.

 

Interest expense for the six month period ended March 31, 2015 decreased compared to 2014 due to the decrease in debt resulting from scheduled principal payments and debt restructuring. Management expects interest expense for the remainder of the current fiscal year to continue to increase given the increase in outstanding debt.

 

Income tax expense for the six month period ended March 31, 2015 increased slightly compared to the same period for 2014 due mainly to higher rental income and decreased interest expense as noted above. Management expects income tax expense for the remainder of the current fiscal year to be comparable to the current operating period.

 

 

Liquidity and Sources of Capital:

 

The Company’s ratio of current assets to current liabilities at March 31, 2015 was 142%. The ratio was 45% at September 30, 2014.

 

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). Additionally, funding can be obtained from members of the Board of Directors.

 

Current maturities of notes payable will require the Company to make payments over the next 12 months totaling $219,933. 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.

 

Cautionary Note Regarding Forward-Looking Statements:

 

The results of operations for the six-month period ended March 31, 2015 are not necessarily indicative of the results that may be expected for the entire fiscal year. The Company may, from time to time, make written or oral forward-looking statements, including statements contained in the Company’s filings with the Securities and Exchange Commission (the “Commission”) and its reports to stockholders. Such forward-looking statements are made based on management’s belief as well as assumptions made by, and information currently available to, management pursuant to “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The Company’s actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, but not limited to, competition from other real estate companies, the ability of the Company to obtain financing for projects, and the continuing operations of tenants.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risks

 

Not applicable to smaller reporting companies

 

Item 4. Controls and Procedures

 

(a)

Within the 90 days prior to the filing date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934. Based upon that evaluation, the Company’s Chief Executive Officer concluded that the Company’s disclosure controls and procedures were ineffective.

 

(b)	There were no significant changes in the Company’s internal controls over financial reporting or in other factors that could significantly affect these controls subsequent to the date the Chief Executive Officer carried out the evaluation.

 

As of September 30, 2014, the Company’s management evaluated the effectiveness of its internal control. Based on the evaluation, the Company’s management concluded that the Company’s internal control over financial reporting was ineffective as of September 30, 2014 and identified a material weakness related to the lack of segregation of duties, accounting personnel with the requisite knowledge of GAAP and the lack of written policies and procedures over financial reporting.

 

Notwithstanding the existence of this material weakness in our internal control over financial reporting, our management believes that the consolidated financial statements included in its reports fairly present in all material respects the Company’s financial condition, results of operations and cash flows for the periods presented. There has been no change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

During 2011, the Company was notified by a tenant of a claim for reimbursement of certain expenses charged. It is the opinion of the Company’s management that the Company is not liable for this claim. The Company has accrued approximately $150,000 for professional fees and other expenses to defend its position.

 

Item 1A. Risk Factors

 

The Company, as a smaller reporting company, is not required to provide the information required by this item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None

 

Item 3. Defaults Upon Senior Securities

 

None

 

Item 4. Reserved for Future Use

 

Item 5. Other Information

 

Management of the Company notes that no Forms 8-K were filed during the period and Management is not aware of any un-reported matters occurring during the period that would require disclosure in a Form 8-K.

 

Item 6. Exhibits

 

(a)		Exhibit No.		Description
		31.1		Certification Pursuant to Section 302 of Sarbanes-Oxley Act of 2002
		32.1		Certification Pursuant to Section 906 of Sarbanes-Oxley Act of 2002
		101		The following financial information from Security Land and Development Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 is formatted in Extensible Business Reporting Language (XBRL): (i) The Consolidated Balance Sheets, (ii) the Consolidated Statements of Income and Retained Earnings, (iii) the condensed Consolidated Statements of Cash Flows and (iv) Notes to Consolidated Financial Statements.

 

 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

SECURITY LAND AND DEVELOPMENT CORPORATION

(Registrant)

By:	/s/ T. Greenlee Flanagin		May 11, 2015
	T. Greenlee Flanagin		Date
	President Chief Executive Officer and Chief Financial Officer