UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during the preceding 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 (Subsection 232.405) of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    YES [X]            NO [  ]

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

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).       YES [  ]            NO [X]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13, or 15 (d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.            YES [  ]            NO [  ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.            1,775

PART I – FINANCIAL INFORMATION

ITEM 1.       FINANCIAL STATEMENTS

The following financial statements and related information are included in this Form 10-Q, Quarterly Report.

1.         Accountant’s Review Report

2.         Balance Sheets

3.         Statements of Income and Retained Earnings

4.         Statements of Cash Flows

5.         Notes to Financial Statements (Unaudited)

The financial information included in Part I of this Form 10-Q has been reviewed by Brown Armstrong Accountancy Corporation, the Company's Certified Public Accountants, and all adjustments and disclosures proposed by said firm have been reflected in the data presented. The information furnished reflects all adjustments, which, in the opinion of management, are necessary to a fair statement of the results for the interim periods.

ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

STATEMENT ON FORWARD-LOOKING INFORMATION

Certain information included herein contains statements that may be considered forward-looking statements, such as statements relating to anticipated expenses, capital spending and financing sources. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made herein. These risks and uncertainties include, but are not limited to, those relating to competitive industry conditions, California tourism and weather conditions, dependence on existing management, leverage and debt service, the regulation of the recreational vehicle industry, domestic or global economic conditions and changes in federal or state tax laws or the administration of such laws.

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OVERVIEW

The Company continues to promote and depend upon recreational vehicle camping as the primary source of revenue. The rental of campsites to the general public provides income to cover expenses, complete capital improvements, and allow shareholders up to forty-five free nights camping annually. Additional revenues come from RV storage and spotting, RV service and repair, on-site convenience store, and other ancillary activities such as laundromat, arcade, and bike rental.

The Company has been fortunate not to have significant impact due to the current economy. The RVing public actively seeks accommodations on the Central Coast despite volatile fuel prices and personal financial uncertainties. RVing offers an affordable outdoor recreational experience, and the Company provides quality facilities and services in a highly popular location. Total year-to-date site occupancy is down 0.16% compared to this time last year due to earlier winter weather conditions. Occupancy projections look equal to last year throughout the remainder of the fiscal year. Revenues from ancillary operations such as the store, arcade, laundromat, and bike rental are trending below last year, and management feels this is directly related to the economy, and that this trend will continue throughout the remainder of the fiscal year.

RV storage continues to be a major source of revenue for the Company, and has enjoyed growth of 7.3% for the quarter. At this time, RV Storage is considered at maximum capacity with a substantial waiting list. RV storage provides numerous benefits to the customer, including: no stress of towing, no need to own a tow vehicle, use of RV by multiple family members, and convenience.

Ongoing investment in resort improvements has assured resort guests and shareholders a top quality, up-to-date facility. This quality and pride of ownership was evident when the National Association of RV Parks and Campgrounds Park of the Year was awarded to the resort for 2007-08. In addition, in a national “My Favorite Campground” contest sponsored by Woodalls, Pismo Coast Village was voted as one of the top ten favorite campgrounds for 2011. Also, Pismo Coast Village was one of thirty-four parks nationally to receive an industry rated “A” park from over 30,000 surveys for customer satisfaction in 2016.

The Company’s commitment to quality, value, and enjoyment is underscored by the business’s success due to word of mouth and referrals from guests. In addition, investment for online marketing, ads in the two leading national directories, and trade magazine advertising formulates most of the business-marketing plan.

RESULTS OF OPERATIONS

The Company develops its income from two sources: (a) Resort Operations, consisting of revenues generated from RV site rentals, from RV storage space operations, and from lease revenues from laundry and arcade operations by third party lessees; and (b) Retail Operations, consisting of revenues from General Store operations and from RV parts and service operations.

Income from resort operations for the three-month period ended June 30, 2017, increased $242,678, or 13.8%, above the same period in 2016. Resort Income for the nine months ended June 30, 2017, increased $282,661, or 6.2%, above the same period ended June 30, 2016. This increase in the quarter ending June 30, 2017, is due primarily to a $227,691, or 18.4%, increase in site revenue due to the timing of Spring Break, an annual high occupancy period of two weeks, which last year was during the previous quarter, and a site rental rate increase effective January 1, 2017. Also, there was an increase of $32,303, or 7.5%, in RV storage and towing activity. The increase in Resort Operations Income for the nine-month period reflects increases in site rental of $217,728, or 6.9%, and $68,111, or 5.6%, in storage activity for the reasons mentioned above. Management feels these increases in revenue reflect ongoing loyalty from return customers that appreciate the Resort’s location and commitment to quality guest services.

Seasonal fluctuations within this industry are expected, and management projects that income for the fourth quarter will be approximately 40% of its annual revenue. This approximation is based on historical information.

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Income from Retail Operations, for the three-month period ending June 30, 2017, decreased $16,114, or 4.5%, below the same period in 2016. This decrease reflects a $24,467, or 15.9%, decrease in RV Service revenue, and an increase in the General Store revenue of $8,355 or 4.2%. Income from Retail Operations for the nine-month period ending June 30, 2017, decreased by $116,908, or 12.1%, below the same period ended June 30, 2016. This reflects a $28,650, or 5.9%, decrease in the General Store income, and an $88,258, or 18.4%, decrease in RV Service income. Management feels this decrease in revenue from RV Service operation reflects the current shortage of trained technical staff. The Company anticipates similar activity in both income from resort operations and retail operations through the remainder of fiscal year 2017.

Operating expenses for the quarter ended June 30, 2017, decreased $62,461, or 4.9%, from the same period in 2016. This decrease in expense is primarily a result of reduced tree maintenance compared to the previous year, workers’ compensation, and repairs and maintenance. Operating expenses for the nine-month period ended June 30, 2017, decreased $78,273, or 2.1%, from the same period in 2016. This decrease is primarily due to reduced tree maintenance, workers’ compensation, interest, and garbage expense.

Cost of Goods Sold for 2017 are within projected levels at 43.6% of retail sales for the quarter and 42.8% year-to-date. Cost of Goods Sold for 2016 was 39.2% and 41.2%, respectively.

Interest Expense for the three-month and nine-month periods ended June 30, 2017, is $13,086 and $51,951, respectively, compared to $25,704 and $77,641 the previous year. This decrease in interest expense reflects the current interest rate, and the Company’s decision to make accelerated payments towards the note.

Net Income for the quarter ending June 30, 2017, increased by $271,293, or 120.0%, compared with the same period ending June 30, 2016. This quarterly increase in Net Income is primarily due to increased resort operations revenue, decreased operating expenses, and decreased interest expense. Net Income for the nine-months ending June 30, 2017, increased by $166,437, or 30.0%, compared with the same period ending June 30, 2016. This increase in Net Income is a result of an increase in resort operations revenue, decrease in cost of goods sold, and a decrease in operating expenses and interest. The last quarter of 2017 is expected to provide adequate resources for continuing business and provide for planned capital expenditures.

Management has introduced various marketing promotions with reduced rates to increase revenues during low occupancy periods. However, due to the nature of business and economic cycles and trends, rates may be adjusted accordingly, if deemed necessary. Although the supply-demand balance generally remains favorable, future-operating results could be adversely impacted by weak demand. This condition could limit the Company's ability to pass through inflationary increases in operating costs as higher rates. Increases in transportation and fuel costs or sustained recessionary periods could also unfavorably impact future results. However, the Company believes that its financial strength and market presence will enable it to remain extremely competitive.

LIQUIDITY

The Company's current cash position, as of June 30, 2017, is $3,376,892, which is 41.5% more than the same position in 2016. This increase is primarily due to increased revenues, decreased operating expenses, and timing of capital expenditures. The cash balance increased $760,222 from fiscal year ended September 30, 2016, due to increased rental deposits. The present level of cash is being maintained in anticipation of large capital expenditures in the upcoming fiscal year, which includes a new RV service and repair facility.

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Accounts Payable and accrued liabilities increased $54,561 to an amount of $236,541 for June 30, 2017, compared to the same period ending 2016. This increase was primarily due to timing of payment of monthly liabilities. All undisputed payables have been paid in full according to the Company's policy.

Accounts Receivable for the period ending June 30, 2017, increased $15,264 above June 30, 2016, and reflects the increase in our annual RV storage business.

The Company has consistently demonstrated an ability to optimize revenues developed from Resort and Retail Operations during the summer season. During other less revenue producing periods, RV storage space and site rentals are paid for in advance and used for Resort improvements and cash reserves. The Company has a revolving line of credit for $500,000 to augment operating or capital expenditure cash needs during off-season periods. The Company considers its financial position sufficient to meet its anticipated future financial requirements. The foregoing information is forward-looking, based upon certain assumptions of future performance, which may not come to fruition.

CAPITAL RESOURCES AND PLANNED EXPENDITURES

The Company plans capital expenditures of approximately $900,000 in fiscal year 2017 to further enhance the resort facilities and services. These projects include building a new RV Service and Repair facility, purchase of a new RV storage tow vehicle, purchase of new vehicles for maintenance, security, and RV Service, upgrade RV storage security, and repair the Overlook ramp. Funding for these projects is expected to be from normal operating cash flows and, if necessary, supplemented with outside financing. These capital expenditures are expected to increase the resort’s value to its shareholders and the general public.

Capital projects are designed to enhance the marketability of the camping sites and enhance support facilities. Recognizing the age of the Resort and increased demands resulting from modern recreational vehicles, the Board has directed management to provide plans to update and improve accommodations of the Resort.

DISCLOSURE CONCERNING WEBSITE ACCESS TO COMPANY REPORTS

The Company makes available on its website, www.pismocoastvillage.com, access to its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (SEC).

The public may read and copy any of the materials filed with the Securities and Exchange Commission on official business days during the hours of 10:00 a.m. to 3:00 p.m., at the SEC's Public Reference Room located at 100 F Street, N. E., Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy statements, and other information that the Company files with the SEC.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Not Applicable

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ITEM 4T.     CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the "1934 Act"), as of June 30, 2017, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer/General Manager (our principal executive officer) and our Chief Financial Officer (our principal financial officer). Based upon and as of the date of that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as described in Item 8A(T) included with our Annual Report on Form 10-K for the year ended September 30, 2016.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the 1934 Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the 1934 Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

INTERNAL CONTROL OVER FINANCIAL REPORTING

There have not been any changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) promulgated by the SEC under the 1934 Act) during the nine-months ended June 30, 2017, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

No pending legal proceedings against the Company other than routine litigation incidental to the business.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not Applicable

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not Applicable

ITEM 5. OTHER INFORMATION

Not Applicable

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ITEM 6. EXHIBITS

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

PISMO COAST VILLAGE, INC.

(Registrant)

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REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Board of Directors

Pismo Coast Village, Inc.

165 South Dolliver Street

Pismo Beach, California 93449

We have reviewed the accompanying balance sheets of Pismo Coast Village, Inc. (Company) as of June 30, 2017 and 2016, and the related statements of income and retained earnings and cash flows for the three and nine-month periods ended June 30, 2017 and 2016. These interim financial statements are the responsibility of the Company's management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the balance sheet of the Company as of September 30, 2016, and the related statements of income and retained earnings, and cash flow for the year then ended, and in our report dated November 12, 2016, we expressed an unmodified opinion on those financial statements. In our opinion, the information set forth in the accompanying balance sheet as of September 30, 2016, is fairly stated, in all material respects.

BROWN ARMSTRONG ACCOUNTANCY CORPORATION

Bakersfield, California

August 11, 2017

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PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2017 AND 2016 (Unaudited) AND SEPTEMBER 30, 2016 (Audited)

NOTE 1 – NATURE OF BUSINESS

Nature of Business

Pismo Coast Village, Inc. (Company) is a recreational vehicle camping resort. Its business is seasonal in nature with the fourth quarter, the summer, being its busiest and most profitable.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue and Cost Recognition

The Company’s revenue is recognized on the accrual basis as earned based on the date of stay. Expenditures are recorded on the accrual basis whereby expenses are recorded when incurred, rather when paid.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid investments including certificates of deposit with maturities of three months or less when purchased, to be cash equivalents.

Allowance for Doubtful Accounts

It is the policy of management to review the outstanding accounts receivable at year-end, as well as historical bad debt write-offs, and establish an allowance for doubtful accounts for estimated uncollectible accounts. Management did not believe an allowance for doubtful accounts was necessary as of June 30, 2017, September 30, 2016, or June 30, 2016.

Inventory

Inventory has been valued at the lower of cost or market on a first-in, first-out basis. Inventory is comprised primarily of finished goods in the general store and in the RV repair shop.

Property and Equipment

All property and equipment are recorded at cost. Depreciation of property and equipment is computed using the straight line method based on the cost of the assets, less allowance for salvage value, where appropriate. Depreciation rates are based upon the following estimated useful lives:

Earnings (Loss) Per Share

The earnings (loss) per share reported on the financial statements are based on the 1,775 shares outstanding as of the balance sheet dates. The financial statements report only basic earnings per share, as there are no potentially dilutive shares outstanding.

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PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

AS OF JUNE 30, 2017 AND 2016 (Unaudited) AND SEPTEMBER 30, 2016 (Audited)

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Advertising

The Company follows the policy of charging the costs of non-direct advertising as incurred. Advertising expense was $39,454 and $28,516 for the nine months ended June 30, 2017 and 2016, respectively, and $6,447 and $5,205 for the three months ended June 30, 2017 and 2016, respectively. Advertising expense was included in operating expenses on the statement of operations.

Concentration of Credit Risk

At June 30, 2017, September 30, 2016, and June 30, 2016, the Company had cash deposits of $1,471,482, $725,895, and $598,133, respectively, in excess of the $250,000 federally insured limit with Pacific Premier Bank (formerly Heritage Oaks Bank). However, because Pacific Premier Bank is a member of the Certificate of Deposit Account Registry Service (CDARS), large deposits are divided into smaller amounts and placed with other FDIC insured banks, which are also members of the CDARS network. Then, those member banks issue CDs in amounts under $250,000, so that the entire deposit balance is eligible for FDIC Insurance.

Reclassifications

Certain reclassifications have been made to prior year balances to conform to current year presentation. These reclassifications had no effect on the Company’s results of operations or financial position.

Subsequent Events

Events subsequent to June 30, 2017 have been evaluated through August 11, 2017, which is the date the financial statements were available to be issued. Management did not identify any subsequent events that require disclosure.

Income Taxes

The Company uses the asset-liability method of computing deferred taxes in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Income Taxes topic. FASB ASC 740 requires, among other things, that if income is expected for the entire year, but there is a net loss to date, a tax benefit is recognized based on the annual effective tax rate.

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PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

AS OF JUNE 30, 2017 AND 2016 (Unaudited) AND SEPTEMBER 30, 2016 (Audited)

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income Taxes (continued)

FASB ASC 740 also requires, among other things, the recognition and measurement of uncertain tax positions based on a “more likely than not” (likelihood greater than 50%) approach. As of June 30, 2017, management has considered its tax positions and believes that the Company did not maintain any uncertain tax positions under this approach and, accordingly, all tax positions have been fully recorded in the provision for income taxes. It is the policy of the Company to consistently classify interest and penalties associated with income tax expense separately from the provision for income taxes, and accordingly no interest or penalties associated with income taxes have been included in this calculation, or separately in the Statement of Operations and Retained Earnings. The Company does not expect any material changes through December 31, 2018. Although the Company does not maintain any uncertain tax positions, tax returns remain subject to examination by the Internal Revenue Service for fiscal years ending on or after September 30, 2013 and by the California Franchise Tax Board for fiscal years ending on or after September 30, 2012.

NOTE 3 – PISMO COAST VILLAGE RECREATIONAL VEHICLE RESORT AND RELATED ASSETS

At June 30, 2017, September 30, 2016, and June 30, 2016, property and equipment included the following:

Depreciation and amortization expense was $312,895 and $310,849 for the nine months ended June 30, 2017 and 2016, respectively, and $105,169 and $105,392 for the three months ended June 30, 2017 and 2016, respectively.

At June 30, 2017, September 30, 2016. and June 30, 2016, the cost of assets under capital lease was $263,077, and related accumulated amortization was $190,099, $160,772, and $150,615, respectively. Amortization expense on assets under capital lease was $29,327 and $26,882 for the nine months ended June 30, 2017 and 2016, respectively, and $9,776 and $10,156 for the three months ended June 30, 2017 and 2016, respectively.

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PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

AS OF JUNE 30, 2017 AND 2016 (Unaudited) AND SEPTEMBER 30, 2016 (Audited)

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NOTE 4 – LINE OF CREDIT

The Company has a revolving line of credit with Pacific Premier Bank (formerly Heritage Oaks Bank) for $500,000, which expires on March 20, 2018. There was no outstanding balance on the line of credit at June 30, 2017, September 30, 2016, and June 30, 2016

NOTE 5 – NOTE PAYABLE

At June 30, 2017, September 30, 2016, and June 30, 2016, the note payable consisted of the following:

At June 30, 2017, future minimum payments on the note were as follows:

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PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

AS OF JUNE 30, 2017 AND 2016 (Unaudited) AND SEPTEMBER 30, 2016 (Audited)

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NOTE 6 – Capital Lease Obligations

At June 30, 2017, September 30, 2016, and June 30, 2016, capital lease obligations consisted of the following:

At June 30, 2017, future minimum payments on the capital lease obligations were as follows:

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PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

AS OF JUNE 30, 2017 AND 2016 (Unaudited) AND SEPTEMBER 30, 2016 (Audited)

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NOTE 7 – COMMON STOCK

Each share of stock is intended to provide the shareholder with free use of the resort for a maximum of 45 days per year. If the Company is unable to generate sufficient funds from the public, the Company may be required to charge shareholders for services.

A shareholder is entitled to a pro rata share of any dividends as well as a pro rata share of the assets of the Company in the event of its liquidation or sale. The shares are personal property and do not constitute an interest in real property. The ownership of a share does not entitle the owner to any interest in any particular site or camping period.

NOTE 8 – INCOME TAXES

The provision for income taxes for the three months and nine months ending June 30, 2017 and 2016 is as follows:

The Company uses the asset-liability method of computing deferred taxes in accordance with FASB ASC Topic 740. The difference between the effective tax rate and the statutory tax rates is due primarily to the effects of the graduated tax rates, state taxes net of the federal tax benefit and nondeductible variable costs of shareholder usage.

As of June 30, 2017, September 30, 2016, and June 30, 2016, the Company’s deferred tax liability was $799,700, $846,200 and $823,300, respectively. Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future. The majority of the balance is due to timing differences of depreciation expense, caused by the use of accelerated depreciation methods for tax calculations.

NOTE 9 – OPERATING LEASES

The Company leases a lot in Oceano, California, to use as storage lot, at $2,933 per month. The lease has converted to a month-to-month lease; however, the lessor is considering a long-term renewal at this time.

The Company has a five-year lease obligation for a copier. Rental expense under this operating lease is $384 per month. Future minimum lease payments under this obligation are as follows:

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PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

AS OF JUNE 30, 2017 AND 2016 (Unaudited) AND SEPTEMBER 30, 2016 (Audited)

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NOTE 9 - OPERATING LEASES (continued)

Rent expense under these lease agreements was $33,853 and $39,759 for the nine months ended June 30, 2017 and 2016, respectively, and $12,283 and $21,482 for the three months ended June 30, 2017 and 2016, respectively.

NOTE 10 - EMPLOYEE RETIREMENT PLANS

The Company is the sponsor of a 401(k) profit sharing pension plan, which covers substantially all full-time employees. Employer contributions are discretionary and are determined on an annual basis. The Company’s matching portion of the 401(k) safe harbor plan was $43,909 and $43,591 for the nine months ended June 30, 2017 and 2016, respectively, and $12,568 and $11,800 for the three months ended June 30, 2017 and 2016, respectively.

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