OAKRIDGE HOLDINGS INC - FORM 10-Q

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 March 31, 2014

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, ILLINOIS 60654

(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 a 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)

APPLICATION 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 October 27, 2015, was 1,431,503.

OAKRIDGE HOLDINGS, INC.

FORM 10-Q

For the quarter ended March 31, 2014

TABLE OF CONTENTS

PART I. Financial Information

ITEM 1. Unaudited Condensed Consolidated Financial Statements:

(a) Condensed Consolidated Balance Sheets as of March 31, 2014 and June 30, 2013

(b) Condensed Consolidated Statements of Operations for the three months ended March 31, 2014 and 2013 and nine months ended March 31, 2014 and 2013

(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. Other Information

ITEM 6. Exhibits

SIGNATURES

PART I - FINANCIAL INFORMATION FORM 10-Q

ITEM 1 — FINANCIAL STATEMENTS

OAKRIDGE HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(UNAUDITED)

ASSETS	March 31, 2014	June 30, 2013
Current assets
Cash	$ 519,756	$ 35,796
Restricted cash	38,112	38,099
Trade accounts receivable, net	548,834	1,626,897
Inventories	2,754,128	2,862,176
Other current assets	62,319	42,370
Deferred income taxes	50,000	268,000
Current assets of discontinued operations	-	1,239,603
Total current assets	3,973,149	6,112,941

Property, plant & e quipment
Property, plant & equipment at cost	3,103,525	3,089,391
Less accumulated depreciation	(1,935,594)	(1,860,694)
Total property, plant & equipment	1,167,931	1,228,697

Other assets
Deferred financing costs	63,558	74,329
Other noncurrent assets	8,762	7,634
Noncurrent assets of discontinued operations	-	8,614,852
Total other assets	72,320	8,696,815

Total a ssets	$ 5,213,400	$ 16,038,453

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 SHEETS

(UNAUDITED)

LIABILITIES & STOCKHOLDERS' EQUITY ( DEFICIT )	March 31, 2014	June 30, 2013
Current l iabilities
Line of credit - bank	$ 614,175	$ 1,275,000
Short term notes payable - others	-	300,000
Trade accounts payable	557,391	864,847
Due to finance company	267,208	711,577
Accrued liabilities	289,488	719,501
Current maturities of long-term debt	270,093	315,361
Deferred revenue	2,340	343,350
Current liabilities of discontinued operations	-	1,925,677
Total current liabilities	2,000,695	6,455,313

Long-term liabilities
Long term debt less current portion	2,415,696	3,264,191
Noncurrent liabilities and non-controlling interest of discontinued operations	-	7,934,949
Total l ong-term liabilities and non-controlling interest	2,415,696	11,199,140

Total liabilities	4,416,391	17,654,453

Stockholders' equity ( deficit )
Common Stock	143,151	143,151
Paid-in-capital	2,457,975	2,457,975
Accumulated deficit	(1,804,117)	(4,217,126)
Total stockholders' equity ( deficit )	797,009	(1,616,000)

Total liabilities and stockholders' equity ( deficit )	$ 5,213,400	$ 16,038,453

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 STATEMENTs OF OPERATIONS

(UNAUDITED)

	Three Months Ended
	March 31, 2014	March 31, 2013
		(Restated)
Net revenue	1,138,810	1,036,865

Operating expenses
Cost of sales	970,691	936,331
Sales & marketing	37,533	36,046
General & administrative	136,777	134,507
Total operating expenses	1,145,001	1,106,884

Operating loss	(6,191)	(70,019)

Other income ( expense )
Interest income	1,207	44
Interest expense	(40,454)	(82,127)
Total other income ( expense )	(39,247)	(82,083)

Net loss from continuing operations before income taxes	(45,438)	(152,102)
Income tax expense (benefit)	78,000	(60,000)
Net loss from continuing operations	(123,438)	(92,102)

Discontinued operations:
Net income from discontinued operations before taxes	-	156,115
Income tax expense	-	62,000
Net income from discontinued operations	-	94,115

Net income (loss)	$ (123,438)	$ 2,013

Basic and diluted net income (loss) per share (Continuing operations)	$ (0.09)	$ (0.06)
Basic and diluted net income (loss) per share (Discontinued operations)	$ -	$ 0.06
Basic and diluted net income (loss) per share	$ (0.09)	$ -

Weighted -average common shares used in the computation of earnings per share:
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 STATEMENTS OF OPERATIONS

(UNAUDITED)

	Nine Months Ended
	March 31, 2014	March 31, 2013
		(Restated)
Net revenue	3,821,082	6,630,783

Operating expenses
Cost of sales	3,261,476	5,745,794
Sales & marketing	108,663	85,831
General & administrative	467,396	449,354
Total operating expenses	3,837,535	6,280,979
Operating income (loss)	(16,453)	349,804

Other income ( expense )
Interest income	1,288	98
Interest expense	(171,116)	(300,838)
Debt forgiveness	440,000	-
Loss on extinguishment of debt	-	(224,000)
Total other income ( expense )	270,172	(524,740)
Net income (loss) from continuing operations before income taxes	253,719	(174,936)
Income tax expense	(34,000)	(8,000)
Net income (loss) from continuing operations	219,719	(182,936)

Discontinued operations:
Net income from discontinued operations before taxes	236,619	356,019
Income tax expense	(103,106)	(142,000)
Gain on disposal of discontinued operations, net of income taxes of $114,964	2,059,777	-
Net income from discontinued operations	2,193,290	214,019
Net income	$ 2,413,009	$ 31,083
Basic net income (loss) per share (Continu ing operations)	$ 0.16	$ (0.13)
Basic net income per share (Discontinued operations)	$ 1.53	$ 0.15
Basic net income per share	$ 1.69	$ 0.02


Diluted net income (loss) per share (Continu ing operations)	$ 0.10	$ (0.13)
Diluted net income per share (Discontinued operations)	$ 0.89	$ 0.15
Diluted net income per share	$ 0.99	$ 0.02
Weighted -average common shares used in the computation of earnings per share
Basic	1,431,503	1431503
Diluted	2,455,496	1431503

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 STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Nine Months Ended
	March 31, 2014	March 31, 2013
		(Restated)
Cash flows from operating activities:
Net income	2,413,009	31,083
Net income from discontinued operations	2,193,290	214,019
Net income (loss) from continuing operations	219,719	(182,936)
Adjustments to reconcile net income (loss) to
net cash flows from operating activities-continuing operations:
Depreciation and amortization	85,671	49,242
Debt forgiveness	(440,000)	-
Loss on extinguishment of debt	-	224,000
Deferred income taxes	218,000	157,000
Change in receivables	1,078,063	(84,395)
Change in inventories	108,048	1,523,426
Change in prepaids & other assets	(21,077)	(55,028)
Change in accounts payable and due to finance company	(751,825)	(1,254,177)
Change in deferred revenue	(341,010)	345,935
Change in accrued liabilities	9,987	(87,291)
Net cash flows from operating activities-continuing operations	165,576	635,776
Net cash flows from operating activities-discontinued operations	(33,028)	524,420
Net cash flows from operating activities	132,548	1,160,196

Cash flows from investing activities:
Purchases of property and equipment	(14,134)	(38,124)
Changes in restricted cash	(13)	48,821
Proceeds from sale of discontinued operations	1,500,000	-
Net cash flows from investing activities-continuing operations	1,485,853	10,697
Net cash flows from investing activities-discontinued operations	(162,177)	(506,688)
Net cash flows from investing activities	1,323,676	(495,991)

Cash flows from financing activities:
Net payments on lines of credit	(660,825)	(785,845)
Principal payments on short-term notes payable	(150,000)	-
Funds from discontinued operations	127,119	373,375
Principal payments on long-term debt	(483,763)	(233,249)
Net cash flows from financing activities-continuing operations	(1,167,469)	(645,719)
Net cash flows from financing activities-discontinued operations	(78,251)	101,854
Net cash flows from financing activities	(1,245,720)	(543,865)

Net change in cash	210,504	120,340
Less: Change in cash-discontinued operations	(273,456)	119,586
Net change in cash-continuing operations	483,960	754

Cash-continuing operations
Beginning of year	35,796	130,740
End of period	519,756	131,494

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 STATEMENT

(Unaudited)

1. BASIS OF PRESENTATION

The accompanying Condensed Consolidated Financial Statements include the accounts of Oakridge Holdings, Inc. (the "Company") and its wholly owned subsidiaries. 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, 2013. Operating results for the nine-month period ended March 31, 2014 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.

On December 23, 2013, the Company sold Lain and Son, Inc. and its subsidiaries ("Lain") located in Chicago, Illinois. The condensed consolidated financial statements reflect Lain as discontinued operations in all periods presented (see Note 6).

2 . RESTATEMENTS OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

Prior to fiscal year 2013, the Company capitalized pre-production engineering and drafting costs, incurred in connection with fixed-price contracts, as inventory and capitalized similar costs to develop technical manuals as property and equipment. The costs capitalized as inventory were amortized based on the number of units remaining to be delivered compared to the total units per the contract, while the costs capitalized as property and equipment were depreciated over the estimated useful life of the technical manuals. Upon review of ASC 340-10-25 "Preproduction Costs Related to Long-Term Supply Arrangements", the Company concluded in 2013 that these costs should have been expensed as incurred to the extent they exceed amounts specifically reimbursable by the customer or otherwise relieved from inventory when such reimbursable amounts are billed to the customer.

In both July 2010 and July 2012, the Company amended certain convertible debt agreements which extended the maturity of the debt and lowered the conversion price. The Company had originally incorrectly not recorded any loss associated with these amendments which essentially represented the incremental value conveyed by lowering the conversion price. The impact of this restatement to net income (loss) from continuing operations before income taxes was $ 0 and $ 224,000 for the three and nine months periods ended March 31, 2013.

As a result, the Company has restated its Condensed Consolidated Financial Statements for the quarters ended September 30, 2012, December 31, 2012 and March 31, 2013, including restating its accumulated deficit as of July 1, 2012 for the impact of the restatements for fiscal years 2012, 2011, 2010 and 2009. No relevant production costs were incurred prior to 2009.

The following tables present a summary of the effects of the restatements on the Company's Condensed Consolidated Financial Statements for both the three and nine month periods ended March 31, 2013.

		Consolidated Statement of Operations
		Previously
		Reported	Adjustments	Restated
Three Months Ended March 31, 2013
Continuing operations:
	Cost of sales	$ 969,060	$ ( 32,729 )	$ 936,331
	Operating loss	( 102,748 )	32,729	( 70,019 )
	Loss before income taxes	( 184,831 )	32,729	( 152,102 )
	Provision (benefit) for income taxes	( 71,000 )	11,000	( 60,000 )
	Net loss	( 113,831 )	21,729	( 92,102 )
Net income (loss)		( 19,716 )	21,729	2,013

Basic and diluted loss per share - continuing operations		$ (0.08)	$ 0.02	$ (0.06)
Basic and diluted loss per share		$ (0.01)	$ 0.01	$ 0

		Consolidated Statement of Operations
		Previously
		Reported	Adjustments	Restated
Nine Months Ended March 31, 2013
Continuing operations:
	Cost of sales	$ 5,998,602	$ (252,808)	$ 5,745,794
	Operating income	96,996	252,808	349,804
	Loss before income taxes	(203,744)	28,808	(174,936)
	Provision (benefit) for income taxes	(79,000)	87,000	8,000
	Net loss	(124,744)	(58,192)	(182,936)
Net income		89,275	(58,192)	31,083

Basic and diluted loss per share - continuing operations		$ (0.09)	$ (0.04)	$ (0.13)
Basic and diluted income per share		$ 0.06	$ (0.04)	$ 0.02

		Consolidated Statement of Cash Flows
		Previously
		Reported	Adjustments	Restated
Nine Months Ended March 31, 2013
Continuing operations:
	Cash flows from operating activities	$ 651,063	$ (15,287)	$ 635,776
	Cash flows from investing activities	(4,590)	15,287	10,697

3. 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 for nine and three months ended March 31, 2014 and 2013.

	Three Months Ended
	March 31, 2014	March 31, 2013
		(Restated)

Net income (loss) from continuing operations	$ (123,438)	$ (92,102)
Net Income from discontinued operations	0	94,115
Net income (loss)	$ (123,438)	$ 2,013

Weighted - average common shares used in the computation of basic earnings per share	1,431,503	1,431,503
Basic and diluted net income (loss) per share (Continuing operations)	$ (0.09)	$ (0.06)
Basic and diluted net income per share (Discontinued operations)	$ 0	$ 0.06
Basic and diluted net income (loss) per share	$ (0.09)	$ 0

	Nine Months Ended
	March 31, 2014	March 31, 2013
		(Restated)
Net income (loss) from continuing operations	$ 219,719	$ (182,936)
Net Income from discontinued operations	2,193,290	214,019
Net income	$ 2,413,009	$ 31,083

Weighted - average common shares used in the computation of basic earnings per share	1,431,503	1,431,503
Additional common shares to be issued assuming conversion of convertible debentures	1,023,993
Weighted - average common shares used in the computation of diluted earnings per share	2,455,496	1,431,503
Additional income from continuing operations, assuming conversion of convertible debentures at the beginning of the period, net of taxes	16,862

Basic net income (loss) per share (Continuing operations)	$ 0.16	$ (0.13)
Basic net income per share (Discontinued operations)	$ 1.53	$ 0.15
Basic net income per share	$ 1.69	$ 0.02

Diluted net income (loss) per share (Continuing operations)	$ 0.10	$ (0.13)
Diluted net income per share (Discontinued operations)	$ 0.89	$ 0.15
Diluted net income per share	$ 0.99	$ 0.02

As a result of the loss from continuing operations during the three months ended March 31, 2014 and 2013 and the nine months ended March 31, 2013, the effect of the convertible debentures on earnings per share would be anti-dilutive. As such, they were excluded from the diluted earnings per share calculation.

4. COMPREHENSIVE INCOME

The Company has no significant components of other comprehensive income and accordingly, comprehensive income (loss) is the same as net income (loss) for all periods.

5. INVENTORIES

The table below summarizes information about reported components of inventory for as of March 31, 2014 and as of June 30, 2013:

	March 31, 2014	June 30, 2013
Raw Material	1,802,792	1,730,189
Work In Process	951,336	1,131,987
Inventory	2,754,128	2,862,176

6 . DISCONTINUED OPERATIONS:

On December 11, 2013, the Company entered into a Stock Purchase Agreement (the "Agreement") with Robert C. Harvey, the Company's Chief Executive Officer and Chief Financial Officer and a director and the Chairman of the Board of Directors of the Company, pursuant to which the Company agreed to sell to Mr. Harvey the shares of common stock of Lain and Son, Inc. ("Lain"), a wholly-owned subsidiary of the Company. Lain and its subsidiaries own the assets used in the operations of the Company's cemetery business.

The purchase price payable to the Company under the Agreement was $2,060,000, consisting of (1) $1,500,000 in cash, and (2) satisfaction of $560,000 indebtedness owed by the Company to Mr. Harvey in the form of (i) $410,000 principal amount of debentures and (ii) a short-term loan of $150,000.

The closing of the transactions contemplated by the Agreement (the "Transactions") was completed on December 23, 2013. Following completion of the Transactions, Mr. Harvey has continued in his role as the Company's Chief Executive Officer, Chief Financial Officer and the Chairman of the Board of Directors of the Company.

The assets and liabilities of the discontinued operations are presented separately in the accompanying condensed consolidated balance sheet at June 30, 2013, and consist of the following:

		June 30, 2013
Current assets of discontinued operations:
Cash		$ 273,456
Accounts receivable		364,911
Inventory		570,679
Prepaids and other		30,557
		1,239,603
Noncurrent assets of discontinued operations:
Property, plant & equipment, net		740,426
Trust investments		7,874,426
		8,614,852
Total assets		9,854,455
Current liabilities of discontinued operations:
Accounts payable		144,214
Accrued expenses		198,912
Deferred revenue		1,564,823
Current maturities of long-term debt		17,728
		1,925,677
Noncurrent liabilities and non-controlling interest of discontinued operations:
Non-controlling interest in trust investments		7,874,426
Long-term debt, less current maturities		60,523
		7,934,949
Total liabilities		$ 9,860,626

The following tables illustrate the reporting of the discontinued operations on the face of the condensed consolidated statements of operations for the three months ended March 31, 2013 and nine months periods ended March 31, 2014 and 2013:
	Three months Ended
		March 31, 2013
Revenue		$ 881,918
Operating expenses:
Cost of sales		555,860
Sales & marketing		51,121
General & administrative		129,856
		736,837
Other income		11,034
Income before income taxes		156,115
Income tax expense		62,000
Net income from discontinued operations		$ 94,115

	Nine months Ended
	March 31, 2014	March 31, 2013
Revenue	$ 1,730,948	$ 2,557,314
Operating expenses:
Cost of sales	1,095,598	1,608,594
Sales & marketing	118,342	173,980
General & administrative	296,717	436,704
	1,510,657	2,219,278
Other income	16,328	17,983
Income before income taxes	236,619	356,019
Income tax expense	103,106	142,000
Gain on disposal of discontinued operations, net of income taxes of $ 114,964	2,059,777	0
Net income from discontinued operations	$ 2,193,290	$ 214,019

7. LINE OF CREDIT AND LONG-TERM DEBT

The Company has a line of credit with Signature Bank under the Small Business Administration (SBA) Export Working Capital Program for $1,000,000 ($614,175 outstanding at March 31, 2014 with interest at 2% over the reference rate with a floor of 7%) subject to certain borrowing base limitations related to export transactions maturing May 2014, which was subsequently renewed and extended to August 2015.

In December 2013, the Company paid off $150,000 in unsecured notes payable due to a key officer/shareholder and applied another $150,000 in unsecured notes payable due the Company's Chief Executive Officer and Chief Financial Officer to the amounts owed the Company in connection with the sale of Lain (see Note 6). The Company's credit agreements with its bank contain certain annual covenants, which were not met at June 30, 2013, 2014 and 2015, but which were subsequently waived by the bank. The next covenant calculation date will be June 30, 2016.

Long -Term Debt

Long-term debt consisted of the following:

	March 31, 2014	June 30, 2013
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.	$ 892,729	$ 922,151
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 Mar 31 , 2014), 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.	938,033	1,089,303
Note payable — SBA, payable in monthly installments of $ 5,107 , including interest and SBA fees for an interest rate of 4.1 % 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.	723,247	753,876
Note payable — bank, payable in monthly installments of $ 6,091 with interest at 2.75 % over the U.S Bancorp Prime Lending Rate (6.0 % at Mar 31 , 2014) through February 2016. 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.	131,780	174,222
Long-term debt before debentures	2,685,789	2,939,552

Convertible subordinated debentures — unsecured with 9 % interest due quarterly, convertible into one common share for each $ 0.40 of principal, maturing on July 1, 2014. In December 2013, $ 410,000 of the debentures was applied to amounts owed to the Company in connection with the sales of Lain (see Note 6). The remaining $ 230,000 debentures were settled in cash during the three month period ended March 31, 2014	0	640,000

Subtotal	2,685,789	3,579,552
Less current maturities	270,093	315,361
	$ 2,415,696	$ 3,264,191

8. RELATED PARTY TRANSACTIONS

In December 2013, the Company's Chief Executive Officer and Chief Financial Officer forgave $440,000 of accrued salary due him for services rendered. As a result, the Company recorded income from debt forgiveness of $440,000 in other income (expense) in the Company's condensed consolidated statement of operations.

9 . 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) Inventory Measurement

In July 2015, the FASB issued Accounting Standards Update No. 2015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory," ("ASU 2015-11"). An entity using an inventory method other than last-in, first out ("LIFO") or the retail inventory method should measure inventory at the lower of cost and net realizable value. The new guidance clarifies that net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements and footnote disclosures.

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 that may further enhance or inhibit the Company's ability to maintain or raise appropriate levels of cash; requirements for unforeseen 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, laws and regulations; foreign exchange rates and fluctuations in those rates; the cost and effects of legal and administrative regulations and 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, capital expenditures and the guarantee of all debt by Robert C Harvey. The Company has historically funded its liquidity needs with proceeds from equity contributions, bank borrowing, short term notes from officers, cash flow from operations and the offering of its subordinated debentures.

The Company disposed of its cemetery operations on December 23, 2013. The purchase price payable to the Company under the Agreement was $2,060,000, consisting of (1) $1,500,000 in cash, and (2) satisfaction of $560,000 indebtedness owed by the Company to Mr. Harvey in the form of (i) $410,000 principal amount of debentures and (ii) a short-term loan of $150,000. The Company has used the $1,500,000 of cash received from the disposal to reduce it indebtedness and to provide financing needed to maintain the Company's aviation ground support equipment segment and for corporate activities. Since the cemetery operations are considered discontinued, the following discussion relates to the Company's aviation ground support equipment segment and corporate activities.

For the first nine months of fiscal year 2014, the Company had an increase in cash from continuing operations of $483,960 compared to a cash increase in the same period in fiscal year 2013 of $754. As of March 31, 2014, the Company had no cash equivalents. During the nine month period ended March 31, 2014, the Company recorded net income from continuing operations after taxes of $219,719. The Company's net cash provided from continuing operating activities was $132,548 in the first nine months of fiscal year 2014 compared to net cash provided from operating activities of $1,160,196 in the same period in fiscal year 2013. During the first nine months of fiscal 2014, the increase in cash provided from continuing operating activities was primarily due to collections of accounts receivable, net income, and reductions in inventories, partially offset by reductions in accounts payable and due to finance company and deferred revenue. During the first nine months of fiscal 2014, cash provided by continuing investing activities was $1,323,676 primarily due to the sale of the discontinued operations. During the first nine months of fiscal 2014, net cash used for continuing financing activities was $1,245,720 primarily due to repayments on the line of credit, long-term debt to banks, convertible debentures and short-term debt. The remaining increases and decreases in the components of the Company's financial position reflect normal operating activity.

The Company had working capital from continuing operations of $1,972,454 at March 31, 2014, an increase of $1,628,752 from June 30, 2013. The increase in working capital was primarily due to the increase in cash from collection of accounts receivable and the sale of the Company's cemetery business, decreases in bank debt, trade accounts payable, due to finance company, accrued liabilities, and short-term debt of the Company. Current assets amounted to $3,973,149 and current liabilities were $2,000,695, resulting in a current ratio of 1.99 to 1 at March 31, 2014. Long-term debt was $2,415,696 and equity was $797,009 at March 31, 2014.

Capital expenditures for the first nine months of fiscal year 2014 were $14,134 compared with $38,124 for the same period in fiscal year 2013. The decrease in capital expenditures reflected the Company's limited cash flow provided from operating activities. The Company spent approximately $10,000 on capital expenditures during the final quarter of fiscal year 2014 for manufacturing tools and roof repair for aviation ground support operations. The Company financed these capital expenditures primarily through cash flows provided by operations.

As of March 31, 2014, the Company has one line of credit facility, with $1,000,000 of aggregate borrowing capacity of which $614,175 was outstanding leaving available credit of $385,825.

INFLATION

Because of the relatively low levels of inflation experienced during the first nine of this fiscal year, and as of March 31, 2014, inflation did not have a significant effect on the Company's results in the first nine months of fiscal year 2014.

RESULTS OF CONTINUING OPERATIONS

FIRST NINE MONTHS OF FISCAL YEAR 2014

COMPARED WITH FIRST NINE MONTHS OF FISCAL YEAR 2013

Revenue for the nine months ended March 31, 2014 was $3,821,082, a decrease of $2,809,701, or 42%, when compared to the nine months ended March 31, 2013. The decrease was primarily due to a decrease of $3,500,000, or 90%, in United States government contracts and GSA contracts due to a cut in United States governmental spending, in which the Company is the subcontractor. International sales increased $675,000, or 277%, and commercial sales remained constant in comparison to fiscal year 2013. The Company also manufactured 100% more non-motorized equipment in fiscal year 2014 in comparison to fiscal year 2013.

Cost of sales, as a percentage of sales for the nine months ended March 31, 2014 was 85% compared to 87% for the nine months ended March 31, 2013. This 2% improvement in cost of sales, as percentage of sales, was primarily due to product mix and manufacturing less motorized equipment.

Sales and marketing expenses for the nine months ended March 31, 2014 were $108,663, an increase of $23,832, or 27%, when compared to the nine months ended March 31, 2013. The increase was primarily due to sales commissions paid to international agents due to the increase in international sales.

General and administrative expenses for the nine months ended March 31, 2014, were $467,396, an increase of $18,042, or 4%, when compared to nine months ended March 31, 2013. The increase was primarily due to increased outside accounting services.

Other income (expense), which consists of interest expense, interest income and gains and losses from certain debt transactions, for the nine months ended March 31, 2014, was a combined income of $270,172 compared to a combined expense of $524,740 for the nine months ended March 31, 2013. The $794,912 increase in income was primarily due to less debt decreasing interest expense by $129,722, a $440,000 gain recorded in the nine months ended March 31, 2014 relating to debt forgiveness of certain amounts due the Company's President and CEO for accrued salary and a $224,000 loss on debt extinguishment recorded in the nine months ended March 31, 2013 as a result of amendments to the Company's convertible debentures.

RESULTS OF CONTINUING OPERATIONS

THREE MONTHS ENDED MARCH 31, 2014

COMPARED WITH THREE MONTHS ENDED MARCH 31, 2013

Revenues for the three months ended March 31, 2014 were $1,138,810, an increase of $101,945 or 10%, when compared to the three months ended March 31, 2013. The increase in revenue was primarily due to increased part sales and an increase in sales prices for equipment.

Cost of sales as a percentage of sales for the three months ended March 31, 2014 was 85% compared to 90% for the three months ended March 31, 2013. This 5% improvement in cost of sales as percentage of sales was primarily due to product mix and lower reliance on government contracts and GSA contracts.

Sales and marketing expenses for the three months ended March 31, 2014 were $37,533, an increase of $1,487, or 4%, when compared to the three months ended March 31, 2013. The increase is immaterial.

General and administrative expenses for the three months ended March 31, 2014 were $136,777, an increase of $2,270, or 2%, when compared to the three months ended March 31, 2013. The increase was primarily due to increased outside accounting services.

Other income (expense), which consists of interest expense and interest income, for the three months ended March 31, 2014, was a combined expense of $39,247 compared to a combined expense of $82,083 for the three months ended March 31, 2013. The $42,836 increase in income was primarily due to less debt decreasing interest expense by $41,673.

OFF BALANCE SHEET ARRANGEMENTS

The Company has no off-balance sheet arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

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 nine months ended March 31, 2014, we implemented our remediation efforts related to the following material weaknesses reported in the Form 10-K for the year ended June 30, 2013. 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.

The Company did not have effective controls to provide reasonable assurance as to the selection and application of generally accepted accounting principles around complex and/or non-routine transactions, including accounting for modifications to its subordinated convertible debentures. The Company lacked adequate technical expertise to apply proper accounting methods within the provisions of FASB ASC 470-50, "Modifications and Extinguishments", to account for modifications made to the debentures in 2011 and 2013.

Due to the lack of expertise and personnel for financial reporting, the Company was not able to file required financial reports on time.

As a result of the remediation efforts noted below, there were improvements in internal control over financial reporting during the nine months ended March 31, 2014 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 2013. We implemented the following remediation actions during the nine months ended March 31, 2014:

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 materials, 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 debt 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 ordinary 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

Changes in Registrant's Certifying Accountant

On February 4, 2014, Oakridge Holdings, Inc. (the "Company") dismissed BDO USA, LLP ("BDO") as the Company's independent registered public accounting firm. The Company appointed BDO to replace Moquist Thorvilson Kauffmann LLC as the Company's independent registered public accounting firm on August 6, 2013, which appointment was reported on the Company's Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission ("SEC") on August 8, 2013. BDO audited the Company's financial statements for the year ended June 30, 2013 ("Fiscal 2013").

The report of the Company's independent registered public accounting firm for the Company's two most recent fiscal years, including BDO's report for Fiscal

2013, did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. The decision to dismiss BDO was approved by the Company's Audit Committee. During the Company's two most recent fiscal years and the subsequent interim period preceding BDO's dismissal, there were: (i)no "disagreements" (within the meaning of Item 304(a) of Regulation S-K)between the Company and its independent registered public accounting firm on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of BDO, would have caused it to make reference to the subject matter of the disagreements in its reports on the consolidated financial statements of the Company; and (ii)except as noted below, no "reportable events" (as such term is defined in Item 304(a)(1)(v) of Regulation S-K).

In connection with its audit of the Company's financial statements for Fiscal

2013 and the Company's fiscal year ended June 30, 2012, the Company's independent registered public accounting firms reported the existence of material weaknesses in the Company's internal control over financial reporting to the audit committee of the Company. These material weaknesses and remediation were mentioned in detail in Part I, Item 4 of this Quarterly Report.

On February 27, 2014, with the approval of its Audit Committee, the Company appointed Olsen Thielen & Co., Ltd. as its independent registered public accounting firm.

ITEM 6 . EXHIBITS

The following exhibits are filed as part of this Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2014

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

(1) Incorporated by reference to the like numbered Exhibit to the Company's current report on Form 8-K filed with the Commission on July 1, 2010.

(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.

SIGNATURE

In accordance with the requirements of the Exchange Act, the Registrant has 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,

and Chief Financial Officer

Date: October 27, 2015

INDEX TO EXHIBITS

EXHIBIT DESCRIPTION PAGE

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)

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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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 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: October 27, 2015

/s/Robert 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.

Dated: October 27, 2015

By/s/ Robert C. Harvey

Robert C. Harvey

President, Chief Executive Officer,

Chief Financial Officer, Principal Accounting Officer
and Chairman of the Board of Directors

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OAKRIDGE HOLDINGS INC Reports