UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)                                                                                                                 
X          QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended        
September 30, 2015
OR
TRANSITION REPORT UNDER SECTION 13 OR
15(d) OF THE EXCHANGE ACT
 
For the transition period from to Commission file number 0-1937
 
OAKRIDGE HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
 
           MINNESOTA                            41-0843268
                      (State or other jurisdiction of    (I.R.S. Employer
                      Incorporation or organization)     Identification Number)
 
          400 WEST ONTARIO STREET, CHICAGO, ILLINOIS60654
(Address of principal executive offices)                 (Zip Code)
 
(312) 505-9267
(Issuer's telephone number)
 (Former name, former address and former fiscal year,  if changed since last report)
 
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
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.)
{X}Yes  { }No
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
{ }Yes  {X}No
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 or the Exchange Act.
 
Large Accelerated filer ___                    Accelerated Filer   ___
Non-accelerated filer   ___Smaller reporting company _ X _
(Do not check if a smaller reporting company)
 
APPLICABLE ONLY TO CORPORATE ISSUERS
 
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:  
                                                            
The number of shares outstanding of Registrant’s Common Stock on December 22, 2016, was 1,431,503.

OAKRIDGE HOLDINGS, INC.
 
FORM 10-Q
For the quarter ended September 30, 2015
TABLE OF CONTENTS PART I.                       Financial Information
 
ITEM 1.            Unaudited Condensed Consolidated Financial Statements:  

      (a)  Condensed Consolidated Balance Sheets as of September 30, 2015 and June 30, 2015
      (b)  Condensed Consolidated Statements of Operations for the three months ended September 30, 2015 and 2014
      (c)  Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2015 and 2014
      (d)  Notes to Condensed Consolidated Financial Statements 
 
ITEM 2.            Management’s Discussion and Analysis of Financial Condition and Results of Operations 
 
ITEM 3.           Quantitative and Qualitative Disclosures about Market Risk
 
ITEM 4.           Controls and Procedures
 
 

         PART II.           Other Information

 
ITEM 1.           Legal Proceedings 
                             ITEM 1A.         Risk Factors
ITEM 2-4.        Not Applicable
 
ITEM 5.           Not Applicable
 

          ITEM 6.           Exhibits

 
 
SIGNATURES
 

PART I - FINANCIAL INFORMATION                                                                                            FORM 10-Q
ITEM 1 — FINANCIAL STATEMENTS
 
OAKRIDGE HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
 
ASSETS
September 30, 2015
June 30, 2015
Current assets
   
Cash
 $                 170,866 
 $                   55,042 
Trade accounts receivable, net
                    564,233 
                    463,852 
Inventories
                2,024,431 
                2,382,634 
Other current assets
                      31,960 
                      36,032 
Deferred income taxes
                    126,000 
                    126,000 
Total current assets
                2,917,490 
                3,063,560 
     
Property, plant & equipment
   
Property, plant & equipment at cost
                3,133,118 
                3,128,577 
Less accumulated depreciation
              (2,034,534)
              (2,016,840)
Total property, plant & equipment
                1,098,584 
                1,111,737 
     
Other assets
   
Deferred financing costs
                      40,569 
                      44,402 
Deferred long-term income taxes
                    129,000 
                    129,000 
Other asset, non-current
                         8,783 
                         8,783 
Total other assets
                    178,352 
                    182,185 
     
Total assets
 $             4,194,426 
 $             4,357,482 
 
See accompanying notes to the condensed consolidated financial statements

PART I - FINANCIAL INFORMATION                                                                                             FORM 10-Q
ITEM 1 — FINANCIAL STATEMENTS
 
OAKRIDGE HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
 
 
 
LIABILITIES & STOCKHOLDERS' EQUITY
September 30, 2015
June 30, 2015
Current liabilities
   
Trade accounts payable
   $                810,328 
      $              825,288 
Due to finance company
                    185,461 
                    297,188 
Accrued liabilities
                    677,185 
                    594,767 
Current maturities of long-term debt
                    305,353 
                    317,990 
Deferred revenue
                    195,982 
                    293,685 
Total current liabilities
                2,174,309 
                2,328,918 
     
Long-term liabilities
   
Long term debt less current portion
                1,905,363 
                1,955,328 
Total Long-term liabilities and non-controlling interest
                1,905,363 
                1,955,328 
     
Total liabilities
                4,079,672 
                4,284,246 
     
Stockholders' equity
   
Common Stock
                    143,151 
                    143,151 
Paid-in-capital
                2,457,975 
                2,457,975 
Accumulated deficit
              (2,486,372)
              (2,527,890)
Total stockholders' equity
                    114,754 
                      73,236 
     
Total liabilities and stockholders' equity
 $             4,194,426 
 $             4,357,482 
 
 
See accompanying notes to the condensed consolidated financial statements
 

PART I - FINANCIAL INFORMATION                                                                                                                                         FORM 10-Q
ITEM 1 — FINANCIAL STATEMENTS
OAKRIDGE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
 
 
Three Months Ended 
 
September 30, 2015
September 30, 2014
     
     
Net Revenue
 $           1,406,737 
 $       1,369,775 
     
Cost of sales
               1,140,959 
          1,161,036 
     
Gross profit
                  265,778 
              208,739 
     
Operating expenses
   
Sales & marketing
                     25,005 
                24,675 
General & Administrative
                  136,006 
              115,605 
Total operating expenses
                  161,011 
              140,280 
     
Operating income
                  104,767 
                68,459 
     
Other income (expenses)
   
Interest Income
                              -   
                      237 
Interest Expense
                  (36,249)
              (44,653)
Total other expenses
                  (36,249)
              (44,416)
     
Net income 
                     68,518 
                24,043 
Income tax expense
                  (27,000)
                (9,000)
Net income
                     41,518 
                15,043 
     
     
Basic and diluted net income per share
 $                      0.03 
 $                  0.01 
     
Weighted -average common shares used in the computation of EPS
 
Basic and diluted
               1,431,503 
          1,431,503 
 
See accompanying notes to the condensed consolidated financial statements
 

PART I - FINANCIAL INFORMATION                                                                            FORM 10-Q
ITEM 1 — FINANICAL STATEMENTS   
 
OAKRIDGE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
 
 
Three Months Ended
 
September 30, 2015
September 30, 2014
     
Cash flows from operating activities:  
   
Net income
 $                    41,518 
 $                    15,043 
Adjustments to reconcile net income to 
   
  net cash flows from operating activities:
   
Depreciation and amortization
                        17,694 
                        19,585 
Deferred income taxes
                                 -   
                     (22,000)
Receivables
                   (100,381)
                     (42,436)
Inventories
                     358,203 
                     (21,068)
Prepaids & other assets
                          7,905 
                     (23,868)
Accounts payable and due to finance company
(126,678)
                     115,812 
Deferred revenue
                     (97,703)
                     (41,103)
Accrued liabilities
                   (82,418
                        69,601 
Net cash flows from operating activities
                     182,967 
                        69,566 
     
Cash flows used in investing activities:
   
Purchases of property and equipment
                        (4,541)
                        (4,233)
Changes in restricted cash
                                 -   
                                (6)
Net cash flows used in investing activities
                        (4,541)
                        (4,239)
     
Cash flows used in financing activities:
   
Increase (decrease) in line of credit
                                 -   
                        42,803 
Principal payments on long-term debt
                     (62,602)
                                (83,032)   
Net cash flows used in financing activities
                     (62 , 602)
                     (40,229)
     
Net change in cash
                     115,824 
                        25,098 
     
Cash
   
Beginning of year
                        55,042 
                     324,291 
End of period
 $                  170,866 
 $                  349,389 
 
See accompanying notes to the condensed consolidated financial statements
 

PART I - FINANCIAL INFORMATION                                                                            FORM 10-Q
ITEM 1 — FINANICAL STATEMENTS   
         
OAKRIDGE HOLDINGS, INC.
                   NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
         
             
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, 2015. Operating results for the three-month period ended September 30, 2015 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.  
 

 
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, 2015
September 30, 2014,
     
Net income
 $ 41,518
 $ 15,043
     
Weighted -average common shares used in the computation of EPS
 
Basic and diluted
1,431,503
1,431,503
     
Basic and diluted net income per share
0.03
0.01
               


            
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.
        
4. INVENTORIES
               The table below summarizes information about reported components of inventory for as of September 30, 2015 and as of June 30, 2015:
 
September 30, 2015
 
June 30, 2015
Raw Material
     $ 723,763
 
     $ 984,376
Work in Process
1,300,668
 
1,398,258
Finished Goods
-
 
-
   Inventory
    $ 2,024,431
 
    $ 2,382,634
 
5.        DEBT
Lines of Credit — Bank
 
The Company had a line of credit agreement with the Signature Bank allowing borrowings up to $ 1,000,000 , subject to certain borrowing base limitations, with interest at 2 % over the reference rate with a floor of 7 % ( 7 % at June 30, 2015), matured in Aug, 2015.  The reference rate was the rate announced by U.S. Bank National Association referred to as the “U.S. Bancorp Prime Lending Rate”.  As of September 30, 2015 and June 30, 2015, the outstanding borrowings under this line of credit were $0 and $0 respectively. The proceeds could only be used to finance inventory destined for export outside the United States and to support performance bonds associated with related contract down payments.  The note was secured by the foreign accounts receivable and export inventory of the Company’s wholly-owned subsidiary, Stinar HG, Inc., continuing commercial guarantees from the Company, the Chief Executive Officer and VP of Marketing and Sales and the assignment of a life insurance policy on the Chief Executive Officer.
Long-term debt consisted of the following:
 
September 30, 2015
June 30, 2015
Note payable — bank, payable in monthly installments of $ 6,672 including interest at 6.0 % with a balloon payment in January 2023. 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. 
 $ 858,674
$ 859,542
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, 2015), 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.
638,109
674,376
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.
683,959
691,903
Note payable — bank, payable in monthly installments of $ 6,091 with interest at 2.75 % over the U.S Bancorp Prime Lending Rate through February 2016. Effective June 2015, the interest rate is7.25 % due to payment default in accordance with the terms of the note.  The note is secured by the assets of the Company, the unconditional guarantee of the chief executive officer/key stockholder, and by the assignment of a life insurance policy on the chief executive officer/key stockholder.
29,974
47,497
Total Debt
2,210,716
2,273,318
Less current maturities
305,353
317,990
Long term Debt
 $ 1,905,363
$ 1,955,328
 
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 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, 2015. The covenants for June 2016 were not met and were not waived by the bank. The next covenant calculation date will be June 30, 2017. 

 
6.       RECENTLY ISSUED ACCOUNTING GUIDANCE
 
(a)       Revenue Recognition
In August 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-14, "Revenue Recognition - Revenue from Contracts with Customers," which extended the effective date of a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The new standard will now be effective for interim and annual periods beginning after December 15, 2017, and either full retrospective adoption or modified retrospective adoption is permitted. The Company is evaluating the impact of this standard.
 
(b)        Going Concern
In August 2014, the FASB issued ASU 2014-15 "Presentation of Financial Statements—Going Concern (Subtopic 205-40) (Topic 718): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern". This ASU requires an entity to evaluate whether conditions or events, in the aggregate, raise substantial doubt about the entity's ability to continue as a going concern for one year from the date the financial statements are issued or are available to be issued. The new guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2016. The adoption of this ASU is not expected to have an impact on the Company's consolidated financial position, results of operations or cash flows.
 
(c)      Disclosure of Discontinued Operations
In April 2014, the FASB issued ASU 2014-08 “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. The amendments in this Update improve the definition of discontinued operations by limiting discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have (or will have) a major effect on an entity’s operations and financial results. The adoption of this ASU is not expected to have an impact on the Company’s consolidated financial position, results of operations or cash flows.
 
(d)       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.
 
(e)      Statement of Cash Flow
In 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 statement 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 as of the earliest date practicable.  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 its consolidated financial statements.
                   
ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
           
The following is management’s discussion and analysis of certain significant factors which have affected the Company's financial position and operating results during the periods included in the accompanying condensed consolidated financial statements.
Management's discussion and analysis of financial condition and results of operations, as well as other portions of this document, include certain forward-looking statements about the Company’s business and products, revenues, expenditures and operating and capital requirements. From time to time, information provided by the Company or statements made by its directors, officers or employees may contain “forward-looking” information subject to numerous risks and uncertainties.  Any statements made herein that are not statements of historical fact are forward-looking statements including, but not limited to, statements concerning the characteristics and growth of the Company’s markets and customers, the Company’s objectives and plans for its future operations and products and the Company’s expected liquidity and capital resources. Such forward-looking statements are based on a number of assumptions and involve a number of risks and uncertainties, and, accordingly, actual results could differ materially for those discussed.  Among the factors that could cause actual results to differ materially from those projected in any forward-looking statement are as follows: the effect of business and economic conditions; conditions in the industries in which the Company operates, particularly the airline industry; the Company’s ability to win government contracts; the impact of competitive products and continued pressure on prices realized by the Company for its products; constraints on supplies of raw material used in manufacturing certain of the 

Company’s products or services provided; capacity constraints limiting the production of certain products; changes in anticipated operating results, credit availability, equity market conditions or the Company’s debt levels may further enhance or inhibit the Company’s ability to maintain or raise appropriate levels of cash; requirements for unseen maintenance, repairs or capital asset acquisitions; difficulties or delays in the development, production, testing and marketing of products; market acceptance issues, including the failure of products to generate anticipated sales levels; difficulties in manufacturing process and in realizing related cost savings and other benefits; the effects of changes in trade, monetary and fiscal policies, and laws and regulations; foreign exchange rates and fluctuations in those rates; the cost and effects of legal and administrative proceedings, including environmental proceedings; and the risk factors reported from time to time in the Company’s SEC reports. The Company undertakes no obligation to update any forward-looking statement as a result of future events or developments.
 
FINANCIAL CONDITION AND LIQUIDITY
 
The Company’s liquidity needs arise from its debt service, working capital and capital expenditures. The Company has historically funded its liquidity needs with proceeds from equity contributions, bank borrowing, short term notes from officers, cash flows from operations and the offering of its subordinated debentures.
During the three month period ended September 30, 2015, the Company recorded a net income from continuing operations of $41,518 compared to a net income from continuing operations of $15,043 during the three month period ended September 30, 2014.
For the first three months of fiscal year 2016, the Company had an increase in cash and cash equivalents of $115,824, compared to an increase in cash and cash equivalents of $25,098 for the same period in fiscal year 2015. As of September 30, 2015, the Company held cash and cash equivalents of $170,866, compared to $349,389 for cash and cash equivalents as of September 30, 2014.  The Company’s net cash provided by operating activities for the three month period ended September 30, 2015 was primarily due to the reduction of inventory of $358,203.  The Company used this net cash for the three month period ended September 30, 2015 to reduce accounts payable and accrues liabilities by $44,269, respectively and deferred revenue by $97,703.
Cash flow used in investing activities was $4,541 during the first three months of fiscal year 2016 and was primarily used for the payment of debt, compared to a negative cash flow of $4,239 used in the first three months of fiscal year 2015.  Net cash used for financing activities was $66,602 during the first three months of fiscal year 2016, and was used to pay down the notes payable, compared to a $40,229 from financing activity in the first quarter of prior fiscal year 2015.  The remaining increases and decreases in the components of the Company’s financial position reflect normal operating activity.
The Company had positive working capital of $743,181 at September 30, 2015, an increase of $8,539 since June 30, 2015 due primarily to reductions in inventory. At September 30, 2015, current assets amounted to $2,917,490 and current liabilities were $2,174,309, resulting in current ratio of 1.34 to 1.0, compared to 1.32 to 1.0 at June 30, 2015. Long-term debt was $1,905,363 at September 30, 2015 compared to $1,955,328 at June 30, 2015. Stockholders’ equity was a positive $114,754 at September 30, 2015 compared to a positive balance of $73,236 at June 30, 2015.  The Company’s present working capital 
must continue to improve in order for it to meet current operating needs.
Capital expenditures for continuing operation for the first three months of fiscal year 2016 were $4,542, compared with capital expenditures of $4,233 during the same period in fiscal year 2015. The Company anticipates that it will spend approximately $25,000 on capital expenditures during the final three quarters of fiscal year 2016 for equipment and building improvements for aviation ground support operations.  The Company plans to finance these capital expenditures primarily through operating cash flows as net income continues to improve in the aviation segment.
The Company has no lines of credit facilities as of September 30, 2015. The company needs to have a line of credit.
As indicated above, the Company believes that its financial position and debt capacity should enable it to meet its current and future cash requirements despite the need for improved working capital to meet current operating needs.
 
INFLATION
Because of the relatively low levels of inflation experienced this past fiscal year, and as of September 30, 2015, inflation did not have a significant effect on the Company’s results in the first three months of fiscal year 2016.
 
RESULTS OF OPERATIONS
FIRST QUARTER OF FISCAL YEAR 2016 COMPARED
WITH FIRST QUARTER OF FISCAL YEAR 2015
 
Revenue increased $36,962 to $1,406,737 or 2.7%, in the first quarter of fiscal year 2016 in comparison to the prior year’s comparable period.  The increase was primarily due to improved domestic sales.
Gross profit margin increased 27% in the first quarter of fiscal year 2016, compared to the corresponding period in fiscal year 2015.  This increase was primarily due to no U.S. Government contracts and international sales and a decrease in overhead needed due to less sales and no shipping costs or agent commission due to no international sales.
Selling expenses as a percentage of sales decreased 0.02% of net revenues for the comparable period. The increase of $330 in the first quarter of fiscal year 2016, compared to the corresponding period in fiscal year 2015, was primarily due to higher travel expense.
General and administrative expenses in the first quarter of fiscal year 2016 increased $20,401, or 17.6%, in comparison to the first quarter of fiscal year 2015.  The increase was primarily to higher credit fees of $6,920, and all other accounts being increased by management a small percentage.
Interest expense in the first quarter of fiscal year 2016 was $36,249, a decrease of $8,404, or 19%, in comparison to the first quarter of fiscal year 2015.  The decrease was due to lower debt balances and purchase of fewer chassis.
Interest income in the first quarter of fiscal year 2016 is immaterial.
 

OFF-BALANCE SHEET ARRANGEMENTS
 
The Company has no off-balance sheet arrangements.
 
ITEM 3.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
Not applicable.
 
ITEM 4.      CONTROLS AND PROCEDURES
 
An evaluation was carried out under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this quarterly report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.
 
 
(a)      CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
 
During the three months ended September 30, 2015, we continued to implement our remediation efforts related to the following material weaknesses reported in the Form 10-K for the year ended June 30, 2015. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.
Due to the limited number of Company personnel, a lack of segregation of duties exists. An essential part of internal control is for certain procedures to be properly segregated and the results of their performance to be adequately reviewed. 
Due to weaknesses in the Company’s financial reporting controls specifically relating to inventory, management believes there is more than a remote likelihood that a material misstatement of annual or interim financial statements would not be prevented or detected, as happened with our 2009 — 2012 annual financial statements. 
Due to the lack of expertise and personnel for financial reporting, the Company was not able to file required financial reports on time.
The Company did not have effective controls to provide reasonable assurance as to timely account reconciliations. Management believes that there is a more than remote likelihood that a material misstatement of annual or interim financial statements would not be prevented or detected in a timely manner. Management plans to update management plans in an effort to reduce the risk and material misstatement of the financial statements.
 

As a result of the remediation efforts noted below, there were improvements in internal control over financial reporting during the three months ended September 30, 2015 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. There were no other changes in internal control over financial reporting (as defined by Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 
(b)     REMEDIATION ACTIONS
 
In response to these material weaknesses, we developed remediation plans to address the control deficiencies identified in fiscal year 2015. We continued to implement the following remediation actions during the three months ended September 30, 2015: 
Segregation of duties
•  Engaged a third party specialist for advice and consultation   
•  Provided training and education to different accounting functions
•  Established review controls
 
Financial reporting control
•   Provided training for calculating the cost of raw material, work in progress, and finished goods. 
•   Completed review of the Company's critical accounting and internal control policies with third party advisors that are knowledgeable regarding GAAP and internal controls
•   Provided training and education relating to accounting for modifications and extinguishments
•   Hired third party advisors to assist in preparing consolidated financial statements
 
In addition to the above steps, management intends to continue its remediation efforts by:
 
•   Provide ongoing training and education relating to GAAP around complex and non-routine transactions specifically identified through regular review of emerging issues and Company business activities
•   Completing our review with the assistance of a third party advisor of the Company’s financial reporting controls and implementing recommended control procedures to strengthen the Company’s control procedures in areas which involve significant judgements and estimates, which involve application of complex accounting methods under GAAP, or which could have a material impact on the accuracy of our financial statements.
 
We are committed to a strong internal control environment, and believe that, when fully implemented, the remediation actions described above will represent significant improvements in the Company’s accounting and financial reporting functions. The Company anticipates that it will complete its testing of the additional internal control processes designed to remediate these material weaknesses during the balance of 2015. We will continue to assess the effectiveness of our remediation efforts in connection with management’s future evaluations of internal control over financial reporting.
 

             PART II       OTHER INFORMATION

               ITEM 1.      LEGAL PROCEEDINGS

 
The Company is from time to time involved in the ordinary course of litigation incidental to the conduct of its businesses.  The Company believes that none of its pending litigation will have a material adverse effect on the Company’s businesses, financial condition or results of operations.
 
ITEM 1A.    RISK FACTORS
 
Not applicable.
 
ITEM 2.      UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
Not applicable.
 
ITEM 3.      DEFAULTS UPON SENIOR SECURITIES
 
Not applicable.
 
ITEM 4.  MINE SAFETY DISCLOSURE
 
Not applicable.
 
ITEM 5.  OTHER INFORMATION
 
Not applicable.
 
ITEM 6.      EXHIBITS
 
The following exhibits are filed as part of this Quarterly Report
on Form 10-Q for the quarterly period ending September 30, 2015:
 
 
3(i)        Amended and Restated Articles of Incorporation, as amended (2)
 
3(ii)            Amended and Superseding By-Laws of the Company, as amended (2)
 
31         Rule 13a-14(a)/15d-14(a) Certifications
 
32         Section 1350 Certifications
 
100             XBRL-Related Documents
 
(1)             Incorporated by reference to the like numbered Exhibit to the Company’s Current Report on Form 8-K filed with the Commission on February 7, 2011.
 
(2)             Incorporated by reference to the like numbered Exhibit to the Company’s Annual Report on Form 10-KSB for the fiscal year ended June 30, 1996.
 
SIGNATURES
 
In accordance with the requirements of the Exchange Act, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
                                   Oakridge Holdings, Inc.
 
                                   /s/ Robert C. Harvey
 
                                   Robert C. Harvey
                                   Chief Executive Officer
                          Principal Accounting Officer
 
 
Date:  December 22, 2016
 

INDEX TO EXHIBITS
 
 
DESCRIPTION                                                                 METHOD OF FILING
 
 
3(i)     Amended and Restated Articles of Incorporation of the Company                       (incorporated by reference)
 
3(ii)    Amended and Superseding By-Laws of the Company, as amended                    (incorporated by reference)
 
31       Rule 13a-14(a)/15d-14(a) Certifications                                                              (filed electronically)
 
32       Section 1350 Certifications                                                                                  (filed electronically)
 
100      XBRL-Related Documents                                                                                 (filed electronically)
 

EXHIBIT 31
 
RULE 13a-14(a)/15d-14(a) CERTIFICATIONS
 
I, Robert C. Harvey, certify that:
 
         1.I have reviewed this quarterly report on Form 10-Q of Oakridge Holdings, Inc.;
 
         2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 
 
         3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 
 
         4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and I have: 
 
         a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;
 
         b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
         c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and 
 
         d)disclosed in this report any change in the registrant’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
 
         5.I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
         a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and 
 
         b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date:    December 22, 2016
 
/s/ Robert C. Harvey
 
Robert C. Harvey
President, Chief Executive Officer,
Chief Financial Officer, Principal Accounting Officer and
Chairman of the Board of Directors
 

EXHIBIT 32
 
SECTION 1350 Certifications
 
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned certifies that this periodic report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in this periodic report fairly presents, in all material respects, the financial condition and results of operations of Oakridge Holdings, Inc.
 
 
Date:    December 22, 2016
 
/s/ Robert C. Harvey
 
Robert C. Harvey
President, Chief Executive Officer,
Chief Financial Officer, Principal Accounting Officer and
Chairman of the Board of Directors