Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Item 6. Selected Financial Data
Item 7. Management Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information
Part III
Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accountant Fees and Services
Item 15. Exhibits and Financial Statement Schedules
PART I
Oakridge Holdings, Inc. and its subsidiary, collectively, are called the "Company" or "Oakridge," and all references to "our," "us" and "we" refer to Oakridge Holdings, Inc. and its subsidiary, collectively, unless the context otherwise requires. The Company has one business segment — aviation ground support equipment.
On June 29, 1998, the Company acquired substantially all of the assets of Stinar Corporation, a Minnesota corporation. Stinar Corporation has been in business for 67 years and is an established international manufacturer, and its products are used by the airline support equipment industry.
As of and for the fiscal years ended June 30,
2013 | 2014 | |
Revenues: | $5,277,837 | $9,415,838 |
Operating profit (loss): | $163,464 | $(636,507) |
Identifiable assets: | $5,764,244 | $6,183,998 |
REGULATIONS
FISCAL YEAR
|
2014
|
2013
|
||
Low High
|
Low High
|
|||
First Quarter
|
$ .43 $ .43
|
$ .40 $ .40
|
||
Second Quarter
|
$. 37 $ .43
|
$ .40 $ .44
|
||
Third Quarter
|
$. 33 $ .39
|
$ .40 $ .44
|
||
Fourth Quarter
|
$ .33 $ .33
|
$ .40 $ .43
|
CORPORATE:
ITEM 9A: CONTROLS AND PROCEDURES.
- Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
- Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
- Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
- 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 be adequately reviewed. This is normally accomplished by assigning duties so that no one person handles a transaction from beginning to end and incompatible duties between functions are not handled by the same person. Our management plans to explore implementing cost-effective measures to establish a more formal review process in an effort to reduce the risk of fraud and financial misstatements.
- Due to weaknesses in the Company’s financial reporting controls specifically relating to inventory at the Aviation Ground Support Equipment segment, 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. Management plans to explore implementing cost effective measures to improve its inventory reporting system in an effort to reduce the risk of a material misstatement of the 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 the proper recognition and recording of receivables and revenue. Management plans to consult with third party advisors who are knowledgeable regarding revenue recognition in an effort to reduce the risk and material misstatement of the financial statements.
- Engaged a third party specialist for advice and consultation
- Provided training and education to different accounting functions
- Established review controls
- 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
- 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.
Director
|
Age
|
Principal Occupation
|
Director Since
|
Robert C. Harvey
|
63
|
Chairman of the Board, Chief Executive Officer and Chief Financial Officer of the Company and its wholly owned subsidiaries
|
1992
|
Robert B. Gregor
|
63
|
Secretary of the Company and Vice President of Sales and Marketing of the Company's wholly owned subsidiary
|
1993
|
Lester Lind
|
66
|
Retired Business Owner of VonHanson's Meats
|
2011
|
Pamela Whitney
|
62
|
Auditor for Wells Fargo Audit & Security
|
2003
|
Stewart Levin
|
59
|
Broker at Hallberg Commercial Insurers, Inc.
|
2011
|
Name and Principal Position |
Year |
Salary
($)
|
All Other Compensation
($)
|
Total
($)
|
Robert C. Harvey
Chairman of the Board, Chief Executive Officer and Chief Financial Officer
|
2014
2013
|
$171,692
$198,400
|
$3,360
$13,600
|
$188,652
$212,000
|
Robert B. Gregor
Secretary and Vice President of Marketing and Sales of Stinar Corporation
|
2014
2013
|
$83,873
$114,800
|
$206
$206
|
$84,079
$115,006
|
Name
|
Fees earned or paid in cash
($) |
Total
($)
|
Lester Lind
|
2,000
|
2,000
|
Pamela Whitney
|
2,000
|
2,000
|
Stewart Levin
|
2,000
|
2,000
|
Name
|
Number of shares beneficially owned
(1)
|
Percent of Class
|
|
Robert C. Harvey*
|
312,278
(2)
|
21.8%
|
|
Robert B. Gregor*
|
147,164
(3)
|
10.2%
|
|
Lester Lind
|
--
|
--
|
|
Pamela Whitney
|
--
|
--
|
|
Stewart Levin
|
--
|
--
|
|
All directors and executive officers as a group (5 persons)
|
459,442
(2, 3)
|
32.0%
|
(1) Unless otherwise noted, all shares shown are held by persons possessing sole voting and investment power with respect to such shares. Shares not outstanding but deemed beneficially owned by virtue of the right of a person or member or a group to acquire them within 60 days are treated as outstanding only when determining the amount and percent owned by such person or group.
(2) Includes 66,857 shares held by Robert Harvey's wife and children in which he may be deemed to share voting and investment power, but as to which he disclaims beneficial ownership. Also includes 245,422 shares held jointly by Robert Harvey and his wife.
(3) Includes 2,350 shares held by Robert Gregor's wife and children in which he may be deemed to share voting and investment power, but as to which he disclaims beneficial ownership. Also includes 144,814 shares held jointly by Robert Gregor and his wife.
ITEM 14:PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Fiscal 2014
|
Fiscal 2013
|
||
OT
|
BDO
|
MTK
|
|
Audit Fees
|
$57,500
|
$58,750
|
$15,000
|
Audit-Related Fees
|
-
|
-
|
-
|
Tax Fees
|
-
|
-
|
-
|
All Other Fees
|
|||
Total
|
$57,500
|
$58,750
|
$15,000
|
ITEM 15: EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
EXHIBIT 31
RULE 13a-14(a)/15d-14(a)
CERTIFICATIONS
EXHIBIT 32
Dated: January 29, 2016
Page
|
|
Reports of Independent Registered Public Accounting Firms
|
1-2
|
Consolidated Financial Statements:
|
|
Consolidated Balance Sheets
|
3-4
|
Consolidated Statements of Operations
|
5
|
Consolidated Statements of Stockholders' Equity
|
6
|
Consolidated Statements of Cash Flows
|
7
|
Notes to Consolidated Financial Statements
|
8-16
|
ASSETS
|
June 30, 2014
|
June 30, 2013
|
Current assets
|
||
Cash
|
$ 324,291
|
$ 35,796
|
Restricted cash
|
38,117
|
38,099
|
Trade accounts receivable, less allowance for doubtful accounts of $15,000 in 2014 and 2013
|
1,233,714
|
1,626,897
|
Inventories
|
2,829,055
|
2,862,176
|
Other current assets
|
44,010
|
42,370
|
Deferred income taxes
|
50,000
|
268,000
|
Current assets of discontinued operations
|
-
|
1,239,603
|
Total current assets
|
4,519,187
|
6,112,941
|
Property, plant & equipment
|
||
Property, plant & equipment at cost
|
3,118,897
|
3,089,391
|
Less accumulated depreciation
|
(1,942,354)
|
(1,860,694)
|
Total property, plant & equipment
|
1,176,543
|
1,228,697
|
Other assets
|
||
Deferred financing costs
|
59,731
|
74,329
|
Other noncurrent assets
|
8,783
|
7,634
|
Noncurrent assets of discontinued operations
|
-
|
8,614,852
|
Total other assets
|
68,514
|
8,696,815
|
Total assets
|
$ 5,764,244
|
$ 16,038,453
|
OAKRIDGE HOLDINGS, INC. AND SUBSIDIARIES
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
|
June 30, 2014
|
June 30, 2013
|
Current liabilities
|
||
Line of credit - bank
|
$ 798,514
|
$ 1,275,000
|
Short term notes payable - others
|
-
|
300,000
|
Trade accounts payable
|
622,362
|
864,847
|
Due to finance company
|
444,592
|
711,577
|
Accrued liabilities
|
331,532
|
719,501
|
Current maturities of long-term debt
|
353,181
|
315,361
|
Deferred revenue
|
41,103
|
343,350
|
Current liabilities of discontinued operations
|
-
|
1,925,677
|
Total current liabilities
|
2,591,284
|
6,455,313
|
Long-term liabilities
|
||
Long term debt less current maturities
|
2,258,428
|
3,264,191
|
Noncurrent liabilities and non-controlling interest of discontinued operations
|
-
|
7,934,949
|
Total long-term liabilities and non-controlling interest
|
2,258,428
|
11,199,140
|
Total liabilities
|
4,849,712
|
17,654,453
|
Stockholders' equity (deficit)
|
||
Preferred Stock, $.10 par value, 1,000,000 shares authorized and none issued
|
-
|
-
|
Common Stock, $.10 par value, 50,000,000 shares authorized and 1,431,503 shares issued and outstanding in 2014 and 2013
|
143,151
|
143,151
|
Paid-in-capital
|
2,457,975
|
2,457,975
|
Accumulated deficit
|
(1,686,594)
|
(4,217,126)
|
Total stockholders' equity (deficit)
|
914,532
|
(1,616,000)
|
Total liabilities and stockholders' equity (deficit)
|
$ 5,764,244
|
$ 16,038,453
|
Years Ended
|
||
June 30, 2014
|
June 30, 2013
|
|
Net revenue
|
$
5,277,837
|
$
9,415,838
|
Cost of sales
|
4,413,257
|
9,278,326
|
Gross margin
|
864,580
|
137,512
|
Operating expenses:
|
||
Sales & marketing
|
146,302
|
141,287
|
General & administrative
|
554,814
|
632,732
|
Total operating expenses
|
701,116
|
774,019
|
Operating income (loss)
|
163,464
|
(636,507)
|
Other income (expense)
|
||
Interest income
|
1,575
|
150
|
Interest expense
|
(228,367)
|
(382,079)
|
Debt forgiveness
|
440,000
|
-
|
Loss on extinguishment of debt
|
-
|
(224,000)
|
Total other income (expense)
|
213,208
|
(605,929)
|
I
ncome (loss) from continuing operations before income taxes
|
376,672
|
(1,242,436)
|
Income tax expense
|
(39,430)
|
(1,000,000)
|
Net income (loss) from continuing operations
|
337,242
|
(2,242,436)
|
Discontinued operations:
|
||
I
ncome from discontinued operations before taxes
|
236,619
|
394,686
|
Income tax expense
|
(103,106)
|
(136,000)
|
Gain from
sale of
discontinued operations, net of income taxes of $114,964
|
2,059,777
|
-
|
Net income from discontinued operations
|
2,193,290
|
258,686
|
Net income
(loss)
|
$ 2,530,532
|
$ (1,983,750)
|
Weighted -average common shares used in the computation of earnings per share
|
||
Basic
|
1,431,503
|
1,431,503
|
Diluted
|
2,196,338
|
3,031,503
|
Basic net income (loss) per share (Continued operations)
|
0.24
|
(1.57)
|
Basic net income per share (Discontinued operations)
|
1.53
|
0.18
|
Basic net income
(loss)
per share
|
1.77
|
(1.39)
|
Diluted net income (loss) per share (Continuing operations)
|
0.16
|
(1.57)
|
Diluted net income per share (Discontinued operations)
|
1.00
|
0.09
|
Diluted net income
(loss)
per share
|
1.16
|
(1.39)
|
|
Common Stock
|
Additional
|
|
|
|
|
Number of
|
|
PaidIn
|
Accumulated
|
|
|
Shares
|
Amount
|
Capital
|
Deficit
|
Total
|
|
|
|
|
|
|
BALANCE, June 30, 2012
|
1,431,503
|
$ 143,151
|
$ 2,233,975
|
$ (2,233,376)
|
$ 143,750
|
Net loss
|
-
|
-
|
-
|
(1,983,750)
|
(1,983,750)
|
Change in terms of conversion options
|
-
|
-
|
224,000
|
-
|
224,000
|
BALANCE, June 30, 2013
|
1,431,503
|
143,151
|
2,457,975
|
(4,217,126)
|
(1,616,000)
|
Net income
|
-
|
-
|
-
|
2,530,532
|
2,530,532
|
BALANCE, June 30, 2014
|
1,431,503
|
$ 143,151
|
$ 2,457,975
|
$ (1,686,594)
|
$ 914,532
|
Years Ended
|
||
June 30, 2014
|
June 30, 2013
|
|
Cash flows from operating activities:
|
||
Net income (loss)
|
$ 2,530,532
|
$ (1,983,750)
|
Net income from discontinued operations
|
2,193,290
|
258,686
|
Net income (loss) from continuing operations
|
337,242
|
(2,242,436)
|
Adjustments to reconcile net income (loss) to
|
||
net cash flows from operating activities-continuing operations:
|
||
Depreciation and amortization
|
96,258
|
100,478
|
Debt forgiveness
|
(440,000)
|
-
|
Loss on extinguishment of debt
|
-
|
224,000
|
Deferred income taxes
|
218,000
|
1,143,000
|
Changes in receivables
|
393,183
|
(738,411)
|
Changes in inventories
|
33,121
|
2,194,609
|
Changes in prepaids & other assets
|
(2,789)
|
(9,694)
|
Changes in accounts payable and due to finance company
|
(509,470)
|
(939,119)
|
Changes in deferred revenue
|
(302,247)
|
(90,005)
|
Changes in accrued liabilities
|
52,031
|
66,737
|
Net cash flows from operating activities-continuing operations
|
(124,671)
|
(290,841)
|
Net cash flows from operating activities-discontinued operations
|
(33,028)
|
580,654
|
Net cash flows from operating activities
|
(157,699)
|
289,813
|
Cash flows from investing activities:
|
||
Purchases of property and equipment
|
(29,506)
|
(32,156)
|
Changes in restricted cash
|
(18)
|
48,816
|
Proceeds from sale of discontinued operations
|
1,500,000
|
-
|
Net cash flows from investing activities-continuing operations
|
1,470,476
|
16,660
|
Net cash flows from investing activities-discontinued operations
|
(162,177)
|
(545,926)
|
Net cash flows from investing activities
|
1,308,299
|
(529,266)
|
Cash flows from financing activities:
|
||
Net payments on lines of credit
|
(476,486)
|
64,155
|
Principal payments on short-term notes payable
|
(150,000)
|
-
|
Funds from discontinued operations
|
127,119
|
382,480
|
Principal payments on long-term debt
|
(557,943)
|
(267,398)
|
Net cash flows from financing activities-continuing operations
|
(1,057,310)
|
179,237
|
Net cash flows from financing activities-discontinued operations
|
(78,251)
|
(5,393)
|
Net cash flows from financing activities
|
(1,135,561)
|
173,844
|
Net change in cash
|
15,039
|
(65,609)
|
Less: Change in cash-discontinued operations
|
(273,456)
|
29,335
|
Net change in cash-continuing operations
|
288,495
|
(94,944)
|
Cash-continuing operations
|
||
Beginning of year
|
35,796
|
130,740
|
End of period
|
$ 324,291
|
$ 35,796
|
Supplemental Disclosures of Cash Flow Information
|
||
Cash paid during the years for:
|
||
Interest
|
$ 228,367
|
$ 337,154
|
Income taxes
|
$ 7,497
|
$ 1,000
|
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
|
||
Debt issuance costs financed with long-term debt
|
$ -
|
$ 37,273
|
Purchases of property and equipment financed with long-term debt- discontinued operations
|
$ -
|
$ 83,644
|
OAKRIDGE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2014 AND 2013
1. The Company
8
OAKRIDGE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2014 AND 2013
9
OAKRIDGE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2014 AND 2013
10
OAKRIDGE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2014 AND 2013
OAKRIDGE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2014 AND 2013
2014
|
2013
|
|
Finished goods
|
$
24,144
|
$
-
|
Workinprocess
|
1,050,010
|
756,213
|
Raw materials and trucks
|
1,754,901
|
2,105,963
|
$
2,829,055
|
$
2,862,176
|
2014
|
2013
|
|
Land and improvements
|
$
414,960
|
$
414,960
|
Building and improvements
|
1,540,733
|
1,533,160
|
Vehicles
|
64,623
|
64,200
|
Equipment
|
1,098,581
|
1,077,071
|
$
3,118,897
|
$
3,089,391
|
2014
|
2013
|
|
Compensation and payroll taxes
|
$
220,868
|
$
646,196
|
Interest
|
-
|
48,909
|
Other
|
20,364
|
24,396
|
Income Taxes
|
90,300
|
-
|
$
331,532
|
$
719,501
|
12
OAKRIDGE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2014 AND 2013
Long- Term Debt
30-Jun-14
|
30-Jun-13
|
|
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.
|
$
886,379
|
$
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 June 30, 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.
|
886,567
|
1,089,303
|
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.
|
723,239
|
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 June 30, 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.
|
115,424
|
174,222
|
Long-term debt before debentures
|
2,611,609
|
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 sale of Lain. The remaining $
230,000
debentures were settled in cash during the three month period ended March 31, 2014. The debentures were issued to shareholders/officers of the Company $
560,000
) and an outside investor $
80,000
). On July 1, 2012, the debentures were amended, extending the maturity date to July 1, 2014 and reducing the conversion rate from $
0.50
to $
0.40
per common share. As a result of the amendment, the original debentures were considered extinguished and a loss on extinguishment of debt of $
224,000
was recorded as a charge to earnings during the year ended June 30, 2013.
|
-
|
640,000
|
Subtotal
|
2,611,609
|
3,579,552
|
Less current maturities
|
353,181
|
315,361
|
$
2,258,428
|
$
3,264
,
191
|
|
Future maturities of longterm debt are as follows at June 30, 2014:
|
||
2015
|
353,181
|
|
2016
|
343,615
|
|
2017
|
313,892
|
|
2018
|
241,941
|
|
2019
|
161,941
|
|
Thereafter
|
1,197,039
|
|
$
2,611,609
|
13
OAKRIDGE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2014 AND 2013
2014
|
2013
|
|
Current tax expense (benefit)
|
||
Federal
|
$
32,600
|
$
-
|
State
|
57,700
|
-
|
Total current
|
90,300
|
-
|
Deferred tax expense (benefit)
|
||
Federal
|
1,110,625
|
(
378,000
)
|
State
|
314,056
|
(
95,000
)
|
Total deferred
|
1,424,681
|
(
473,000
)
|
Valuation Allowance
|
1,257,481
|
(
1,473,000
)
|
Total expense for income taxes
|
$
257,500
|
$
1,000,000
|
Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities. The major temporary differences that give rise to the deferred tax liabilities and assets are as follows at June 30
:
|
||
2014
|
2013
|
|
Deferred tax assets:
|
||
Inventory
|
$
7,188
|
$
27,000
|
Accrued Compensation
|
65,448
|
213,000
|
Tax credit carryforwards
|
123,769
|
158,000
|
Net operating loss carryforwards
|
127,612
|
1,352,000
|
Other
|
7,108
|
19,000
|
Valuation allowance
|
(
258,125
)
|
(
1,473,000
)
|
Gross deferred tax asset
|
73,000
|
296,000
|
Deferred tax liabilities:
|
||
Property and equipment
|
(
23,000
)
|
(
28,000
)
|
Gross deferred tax liability
|
(
23,000
)
|
(
28,000
)
|
Net deferred tax asset
- Current
|
$
50,000
|
$
268,000
|
2014
|
2013
|
|
Statutory U.S. federal tax rate
|
-34
%
|
-34
%
|
State taxes, net of federal benefit
|
-2
%
|
-2
%
|
Permanent differences and other
|
1
%
|
-3
%
|
Valuation allowance
|
44
%
|
119
%
|
Effective tax rate
|
9
%
|
80
%
|
.
|
||
The Company has federal and state net operating loss carryforwards of approximately $
291,351
and $
2,775,429
, respectively. Net operating loss carry forwards expires beginning in 2028.
|
||
Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases, as well as from net operating loss and tax credit carry forwards, and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. We evaluate the recoverability of these future tax deductions and credits by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies. To the extent we do not consider it more likely than not that a deferred tax asset will be recovered, a valuation allowance is established. The Company has determined that a valuation allowance of $
258,125
and $
1,473,000
, related to deferred tax assets is necessary at June 30, 2014 and June 30, 2013.
|
14
OAKRIDGE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2014 AND 2013
Years Ended
|
|||
June 30 , 2014
|
June 30 , 2013
|
||
Net income (loss) from continuing operations
|
$
337,242
|
$
(2,242,436
)
|
|
Net Income from discontinued operations
|
2,193,290
|
258,686
|
|
Net income (loss)
|
$
2,530,532
|
$
(1,983,750
)
|
|
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 | 764,835 | 1,600,000 | |
Weighted - average common shares used in the computation of diluted earnings per share | 2,196,338 | 3,031,503 | |
Additional income from continuing operations, assuming conversion of convertible debentures at the beginning of the period, net of taxes | $ 16,862 | $ 34,560 | |
Basic net income (loss) per share (Continuing operations)
|
$
0.24
|
$
(1.57)
|
|
Basic net income per share (Discontinued operations)
|
$
1.53
|
$
0.18
|
|
Basic net income (loss) per share
|
$
1.77
|
$
(1.39)
|
|
Diluted net income (loss) per share (Continuing operations)
|
$
0.16
|
$
(1.57)
|
|
Diluted net income per share (Discontinued operations)
|
$
1.00
|
$
0.09
|
|
Diluted net income (loss) per share
|
$
1.16
|
$
(1.39)
|
|
As a result of the loss from continuing operations during the year ended June 30, 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.
|
OAKRIDGE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2014 AND 2013
Years ended June 30,
|
||
2014
|
2013
|
|
Revenues
|
$
1,730,948
|
$
3,342,833
|
Cost of Goods Sold
|
1,095,598
|
2,143,115
|
Gross Profit
|
635,350
|
1,199,718
|
Selling Expense
|
118,342
|
247,373
|
General & administrative
|
296,717
|
583,692
|
Total Selling, General & administrative
|
415,059
|
831,065
|
Income from Operations
|
220,291
|
368,653
|
Other income (expenses)
|
16,328
|
26,033
|
Income from operations before taxes
|
236,619
|
394,686
|
Income taxes
|
103,106
|
136,000
|
Net Income
|
$
133,513
|
$
258,686
|
|
||
Reconciliation of the carrying amounts of major classes of assets and liabilities of the discontinued operations that are presented separately in the consolidated balance sheet is as follows:
|
||
2013
|
||
Cash
|
$
273,456
|
|
Accounts Receivable
|
364,911
|
|
Inventories
|
570,679
|
|
Other current assets
|
30,557
|
|
Current assets of discontinued operations
|
$
1,239,603
|
|
Property and equipment, net
|
$
740,426
|
|
Cemetery perpetual care trusts
|
5,753,417
|
|
Pre-need investments
|
2,121,009
|
|
Non-current assets of discontinued operations (1)
|
$
8,614,852
|
|
Trade payables
|
$
144,214
|
|
Accrued liabilities
|
198,912
|
|
Deferred Revenue
|
1,564,823
|
|
Current maturities of long-term debt
|
17,728
|
|
Current liabilities of discontinued operations
|
$
1,925,677
|
|
Cemetery perpetual care trust
|
$
5,753,417
|
|
Pre-need investments
|
2,121,009
|
|
Long-term debt less current portion
|
60,523
|
|
Non-current liabilities of discontinued operations
|
$
7,934,949
|
|
(1) Excludes intercompany receivable due from continuing operations of approximately $
5.1
million. This amount is eliminated upon consolidation and therefore is not included in the consolidated balance sheet.
|
1. |
The Company's contributions to the multi-employer plan may be used to provide benefits to all participating employees of the program, including employees of other employers. |
2. |
In the event that another participating employer ceases contributions to the multi-employer plan, the Company may be responsible for any unfunded obligations along with the remaining participating employers. |
3. |
If the Company chooses to withdraw from the multi-employer plan, then the Company may be required to pay a withdrawal liability, based on the underfunded status of the plan at that time. |