U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

⌧	Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
x		Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended December 31, 2017
		For the quarterly period ended March 31, 2018
☐	Transition Report Pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
o		Transition Report Pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
	~~For the transition period of to~~	For the transition period of to

Commission File Number 0-7865.

SECURITY LAND AND DEVELOPMENT CORPORATION

(Exact name of issuer as specified in its charter)

Georgia

58-1088232

(State or other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification Number)

2816 Washington Road, #103, Augusta, Georgia 30909

(Address of Principal Executive Offices)

Issuers Telephone Number (706) 736-6334

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

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

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

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

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES ⌧x NO ☐o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ~~☐Yes~~ oYes ~~⌧No~~xNo

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

Class		Outstanding at ~~February~~May 1211, 2018
Common Stock, $0.10 Par Value		3,766,290 shares

Table of Contents

SECURITY LAND AND DEVELOPMENT CORPORATION

Form 10-Q

Index

Part I	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets as of December 31, 2017 and September 30, 2017	1
	Consolidated Balance Sheets as of March 31, 2018 and September 30, 2017	1
	Consolidated Statements of Income for the Three Month Periods ended December 31, 2017 and 2016	2
	Consolidated Statements of Income for the Three Month Periods ended and for the Six Month Periods ended March 31, 2018 and 2017	2
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Month Period ended December 31, 2017 and the Year Ended September 30, 2017.	3
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Six Month Period ended March 31, 2018 and the Year Ended September 30, 2017.	3
	Condensed Consolidated Statements of Cash Flows for the Three Month Periods ended ended December 31, 2017 and 2016	4
	Condensed Consolidated Statements of Cash Flows for the Three Month Periods ended and for the Six Month Periods ended March 31, 2018 and 2017	4
	Notes to the Consolidated Financial Statements	5-11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12-13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	13
Item 4.	Controls and Procedures	13
Part II	OTHER INFORMATION	14
Item 1.	Legal Proceedings	14
Item 1A.	Risk Factors	14
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	14
Item 3.	Defaults Upon Senior Securities	14
Item 4.	Reserved for Future Use	14
Item 5.	Other Information	14
Item 6.	Exhibits	1314
	SIGNATURES	15-17

PART I. FINANCIAL INFORMATION Item 1. Financial Statements

Item 1. Financial Statements
	SECURITY LAND AND DEVELOPMENT CORPORATION
SECURITY LAND AND DEVELOPMENT CORPORATION
	CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS
		March 31,		September 30,
	December 31,		September 30,
		2018		2017
	2017		2017
		(unaudited)
	(unaudited)		(audited)
	ASSETS
ASSETS
	CURRENT ASSETS
CURRENT ASSETS
	Cash	$ 325,295		$ 254,522
Cash	$ 298,390		$ 254,522
	Receivables from tenants, net of allowance of $72,793 and $71,967
Receivables from tenants, net of allowance of $71,967
	at March 31, 2018 and September 30, 2017, respectively	345,317		365,589
at December 31, 2017 September 30, 2017	267,139		365,589
	Prepaid property taxes	-		29,768
Prepaid property taxes	-		29,768
	Total current assets	670,612		649,879
Total current assets	565,529		649,879
	INVESTMENT PROPERTIES
INVESTMENT PROPERTIES
	Investment properties for lease, net of accumulated depreciation	6,648,855		6,742,993
Investment properties for lease, net of accumulated depreciation	6,695,924		6,742,993
	Land and improvements held for investment or development	3,804,728		3,804,728
Land and improvements held for investment or development	3,804,728		3,804,728
		10,453,583		10,547,721
	10,500,652		10,547,721
	OTHER ASSETS	15,245		17,774
OTHER ASSETS	16,510		17,774
		$ 11,139,440		$ 11,215,374
	$ 11,082,691		$ 11,215,374
	LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES AND STOCKHOLDERS’ EQUITY
	CURRENT LIABILITIES
CURRENT LIABILITIES
	Accounts payable and accrued expenses	$ 161,020		$ 223,482
Accounts payable and accrued expenses	$ 96,652		$ 223,482
	Income taxes payable	7,615		19,917
Income taxes payable	57,355		19,917
	Current maturities of notes payable	397,771		388,322
Current maturities of notes payable	393,033		388,322
	Total current liabilities	566,406		631,721
Total current liabilities	547,040		631,721
	LONG-TERM LIABILITIES
LONG-TERM LIABILITIES
	Notes payable, less current portion and deferred financing costs	4,131,594		4,330,863
Notes payable, less current portion and deferred financing costs	4,210,541		4,330,863
	Deferred income taxes	913,469		1,367,556
Deferred income taxes	917,134		1,367,556
	Total long-term liabilities	5,045,063		5,698,419
Total long-term liabilities	5,127,675		5,698,419
	Total liabilities	5,611,469		6,330,140
Total liabilities	5,674,715		6,330,140
	STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY
	Common stock, par value $.10 per share; 30,000,000 shares authorized;
Common stock, par value $.10 per share; 30,000,000 shares authorized;
	3,766,290 shares issued and outstanding at March 31, 2018 and
3,772,637 shares issued and outstanding at December 31, 2017
	3,797,137 shares issued and outstanding at September 30, 2017	376,629		379,719
and 3,797,137 shares issued and outstanding at September 30, 2017	377,264		379,719
	Retained earnings	5,151,342		4,505,515
Retained earnings	5,030,712		4,505,515
	Total Stockholders' Equity	5,527,971		4,885,234
Total Stockholders' Equity	5,407,976		4,885,234
	Liabilities and Stockholders' Equity	$ 11,139,440		$ 11,215,374
Liabilities and Stockholders' Equity	$ 11,082,691		$ 11,215,374
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
-1-
-1-

SECURITY LAND AND DEVELOPMENT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
	~~For the Three Months~~	For the Three Months			For the Six Months
	Ended December 31,
		Ended March 31,			Ended March 31,
	2017		2016
		2018		2017	2018	2017
	~~(unaudited)~~	(unaudited)	~~(unaudited)~~	(unaudited)	(unaudited)	(unaudited)
OPERATING REVENUES
Rent Revenues	$ 417,717		$ 414,939
Rent revenues		$ 484,580		$ 431,151	$ 902,297	$ 846,090
OPERATING EXPENSES
Depreciation and amortization	~~48,333~~	48,334	~~48,185~~	49,351	96,667	98,703
Property taxes	~~70,024~~	70,023	~~67,593~~	67,594	140,047	135,187
Payroll and related costs	~~23,529~~	67,644	~~26,063~~	26,778	91,173	52,841
Insurance and utilities	~~6,366~~	11,658	~~13,141~~	8,506	18,024	21,647
Repairs and maintenance	~~7,151~~	11,556	~~15,012~~	25,213	18,707	40,225
Professional services	~~21,740~~	28,527	~~57,032~~	28,460	50,267	85,492
Other	~~1,008~~	4,280	~~14,835~~	7,737	5,289	22,572
	178,151		241,861
		242,022		213,639	420,174	456,667
Operating income	~~239,566~~	242,558	~~173,078~~	217,512	482,123	389,423
OTHER EXPENSE
Interest	~~(70,159)~~	45,506	~~(37,768)~~	36,863	115,665	73,464
	(70,159)		(37,768)
		45,506		36,863	115,665	73,464
Income before income taxes	~~169,407~~	197,052	~~135,310~~	180,649	366,458	315,959
INCOME TAXES PROVISION (BENEFIT)
Income tax expense	~~54,207~~	69,613	~~59,131~~	79,245	123,820	138,376
Income tax deferred benefit	~~(450,422)~~	(3,665)	~~(7,768)~~	(10,259)	(454,087)	(18,027)
	(396,215)		51,363
		65,948		68,986	(330,267)	120,349
Net income	~~$ 565,622~~	$ 131,104	~~$ 83,947~~	$ 111,663	$ 696,725	$ 195,610
PER SHARE DATA
Net income per common share	~~$ 0.15~~	$ 0.03	~~$ 0.02~~	$ 0.02	$ 0.18	$ 0.04
The accompanying notes are an integral part of these consolidated financial statements.
-2-

SECURITY LAND AND DEVELOPMENT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
			Additional	~~Additional~~			Total	~~Total~~
	Common	~~Common~~	Paid-in	~~Paid-in~~	Retained	~~Retained~~	Stockholders'	~~Stockholders'~~
	Stock	~~Stock~~	Capital	~~Capital~~	Earnings	~~Earnings~~	Equity	~~Equity~~
Balance, September 30, 2016 (audited)	$ 524,311	~~$ 524,311~~	$ 333,216	~~$ 333,216~~	$ 6,226,363	~~$ 6,226,363~~	$ 7,083,890	~~$ 7,083,890~~
Net income	-	-	-	-	331,817	~~331,817~~	331,817	~~331,817~~
Purchase and retirement of common stock	(144,592)	~~(144,592)~~	(333,216)	~~(333,216)~~	(2,052,665)	~~(2,052,665)~~	(2,530,473)	~~(2,530,473)~~
Balance, September 30, 2017 (audited)	379,719	~~379,719~~	-	-	4,505,515	~~4,505,515~~	4,885,234	~~4,885,234~~
Net income	-	-	-	-	696,725	~~565,622~~	696,725	~~565,622~~
Purchase and retirement of common stock	(3,090)	~~(2,455)~~	-	-	(50,898)	~~(40,425)~~	(53,988)	~~(42,880)~~
Balance, December 31, 2017 (unaudited)		$ 377,264		$ -		$ 5,030,712		$ 5,407,976
Balance, March 31, 2018 (unaudited)	$ 376,629		$ -		$ 5,151,342		$ 5,527,971
The accompanying notes are an integral part of these consolidated financial statements.
-3-

SECURITY LAND AND DEVELOPMENT CORPORATION AND SUBSIDIARIES
SECURITY LAND AND DEVELOPMENT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
CONSOLIDATED STATEMENTS OF CASH FLOWS
	For the Three Months		For the Six Months
	Ended December 31,
	Ended March 31,		Ended March 31,
	2017	2016
	2018	2017	2018	2017
	(unaudited)	(unaudited)	(unaudited)	(unaudited)
OPERATING ACTIVITIES
Net income	$ ~~565~~131,~~622~~104	$ 83111,~~947~~663	$ 696,725	$ 195,610
Adjustments to reconcile net income to net cash provided by
operating activities:
Bad debts	-826	1(3,~~516~~019)	826	(1,503)
Depreciation and amortization	48,~~333~~334	48,~~185~~184	96,667	96,369
Interest on deferred financing costs	1,333	1,167	2,666	2,334
Deferred income tax	(~~450~~3,~~422~~665)	(710,~~768~~259)	(454,087)	(18,027)
Changes in deferred and accrued amounts	38(64,~~826~~377)	9052,~~152~~351	(25,550)	142,503
Net cash provided by operating activities	~~203~~113,~~692~~555	~~217~~200,~~199~~087	317,247	417,286
FINANCING ACTIVITIES
Purchase and retirement of common stock	(4211,~~880~~108)	-	(53,988)	-
Principal payments on notes payable	(~~116~~75,~~944~~542)	(6162,~~467~~218)	(192,486)	(123,685)
Net cash used in financing activities	(~~159~~86,~~824~~650)	(6162,~~467~~218)	(246,474)	(123,685)
Net increase in cash	4326,~~868~~905	~~155~~137,~~732~~869	70,773	293,601
CASH, BEGINNING OF PERIOD	~~254~~298,~~522~~390	~~500~~656,~~660~~392	254,522	500,660
CASH, END OF PERIOD	$ ~~298~~325,~~390~~295	$ ~~656~~794,~~392~~261	$ 325,295	$ 794,261
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$ 6844,~~943~~244	$ 4037,~~379~~129	$ 113,187	$ 77,508
Cash paid for income taxes	$ -121,510	$ ~~669~~42,862	$ 121,510	$ 43,351
The accompanying notes are an integral part of these consolidated financial statements.
-4-

SECURITY LAND AND DEVELOPMENT CORPORATION

Notes to the Consolidated Financial Statements

Note 1 – Basis of Presentation

The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10-Q, Article 8 of Regulation S-X and accounting principles generally accepted in the United States of America; therefore, they do not include all disclosures necessary for a complete presentation of financial condition, results of operations, and cash flows. Such statements are unaudited but, in the opinion of management, reflect all adjustments, which are of a normal recurring nature and necessary for a fair presentation of results for the selected interim periods. Users of financial information produced for interim periods are encouraged to refer to the footnotes contained in the audited financial statements appearing in our Form 10-K for the year ended September 30, 2017 when reviewing these interim financial statements.

The financial statements include estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The consolidated financial statements include the accounts of Security Land and Development Corporation and its four wholly owned subsidiaries, Royal Palms Motel, Inc., SLDC, LLC, SLDC 2, LLC and SLDC III, LLC (described on a consolidated basis as the “Company”). Significant intercompany transactions and accounts are eliminated in consolidation.

EstimatesCritical ofAccounting Useful Lives of Investment Properties for Purposes of DepreciationPolicies:

~~Management~~Estimates ~~has estimated useful lives~~ of ~~investment~~Useful ~~properties,~~Lives ~~except for land that is leased, and the Company utilizes the straight-line method to compute depreciation over the estimated useful lives~~ of ~~the investment properties.~~Investment ~~Actual~~Properties ~~depreciation~~for ofPurposes ~~investment properties will vary from management’s estimates, and the value~~ of ~~investment properties is more directly impacted by market conditions and the physical condition of the investment properties.~~Depreciation

~~Evaluation~~Management has estimated useful lives of ~~Long-Lived~~investment ~~Assets~~properties, except for land that is ~~Impairment~~leased, and the Company utilizes the straight-line method to compute depreciation over the estimated useful lives of the investment properties. Actual depreciation of investment properties will vary from management’s estimates, and the value of investment properties is more directly impacted by market conditions and the physical condition of the investment properties.

~~The~~Evaluation ~~Company~~of ~~evaluates long~~Long-~~lived~~Lived ~~assets~~Assets for ~~impairment whenever events or changes in circumstances~~ indicate that the carrying amount of investment properties may not be recoverable. In evaluating recoverability, the Company generally estimates future cash flows expected to result from the use of the asset and its eventual disposition. An impairment loss is recognized when the expected future cash flows of the asset are less than its carrying amount.Impairment

~~Estimates~~The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of ~~Income~~investment ~~Tax~~properties ~~Rates~~may not ~~Applicable~~be recoverable. In evaluating recoverability, the Company generally estimates future cash flows expected to result from the use of the asset and ~~Deferred~~its ~~Taxes~~eventual disposition. An impairment loss is recognized when the expected future cash flows of the asset are less than its carrying amount.

~~The~~Estimates ~~Company has deferred income taxes through a series~~ of ~~tax-deferred~~Income ~~like-kind~~Tax ~~exchange transactions~~Rates onApplicable ~~certain investment properties and through accelerated~~to ~~depreciation~~Deferred elections on certain other assets. Actual income taxes that may become due when taxable gains are realized on the sale of assets may differ from management’s estimates as a result of changes in tax laws, the tax status of the Company, or the actual taxable earnings of the Company in the periods the deferred income taxes become due.Taxes

~~Refer~~The toCompany ~~the~~has ~~Company’s~~deferred ~~Form 10~~income taxes through a series of tax-Kdeferred ~~for~~like-kind exchange transactions on certain investment properties and through accelerated depreciation elections on certain other assets. Actual income taxes that may become due when taxable gains are realized on the ~~year~~sale ~~ended~~of ~~September 30~~assets may differ from management’s estimates as a result of changes in tax laws, ~~2017~~the ~~for~~tax ~~further~~status of the Company, or the ~~information~~actual ~~regarding~~taxable ~~its~~earnings ~~critical~~of ~~accounting~~the ~~policies~~Company in the periods the deferred income taxes become due.

~~(Continued)~~Refer to the Company’s Form 10-K for the year ended September 30, 2017 for further information regarding its critical accounting policies.

~~- 5 -~~(Continued)

~~Note 1 – Basis of Presentation, Continued~~-5-

InNote ~~May~~1 ~~2014,~~– ~~the~~Basis ~~FASB issued guidance to change the recognition~~ of revenue from contracts with customers in future periods. The core principle of the new guidance is that an entity should recognize revenue to reflect the transfer of goods and services to customers in an amount equal to the consideration the entity receives or expects to receive. The guidance will be effective for the Company for reporting periods beginning after December 15Presentation, ~~2017. The comprehensive new standard will supersede existing~~ revenue recognition guidance and require revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the Company expects to be entitled in exchange for those goods or services. Adoption of the new rules could affect the timing of revenue recognition for certain transactions. The guidance permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. The Company is currently evaluating the impact of adoption and the implementation approach to be used.Continued

InRecently AugustIssued 2015,Accounting the FASB deferred the effective date of ASU 2014-09, Revenue from Contracts with Customers. As a result of the deferral, the guidance in ASU 2014-09 will be effective for the Company for reporting periods beginning after December 15, 2017. The Company will apply the guidance using a modified retrospective approach. The Company does not expect these amendments to have a material effect on its financial statements. Standards

In ~~March~~May ~~2016~~2014, the FASB ~~amended~~issued ~~the~~guidance ~~Revenue~~to ~~from~~change ~~Contracts~~the ~~with~~recognition ~~Customers~~of ~~topic~~revenue offrom ~~the~~contracts ~~Accounting~~with ~~Standards~~customers ~~Codification~~in tofuture periods. ~~clarify~~The core principle of the ~~implementation~~new guidance onis ~~principal~~that ~~versus~~an ~~agent~~entity ~~considerations~~should recognize ~~and~~revenue ~~address~~to ~~how~~reflect anthe ~~entity~~transfer ~~should~~of ~~assess~~goods ~~whether~~and itservices isto ~~the~~customers ~~principal~~in oran ~~the~~amount ~~agent~~equal into ~~contracts~~the ~~that~~consideration ~~include~~the ~~three~~entity receives or ~~more~~expects ~~parties~~to receive. The guidance ~~amendments~~ will be effective for the Company for reporting periods beginning after December 15, 2017. The ~~Company~~comprehensive ~~does~~new ~~not~~standard ~~expect~~will ~~these~~supersede ~~amendments~~existing revenue recognition guidance and require revenue to ~~have~~be arecognized ~~material~~when ~~effect~~promised goods onor services are transferred to customers in amounts that reflect the ~~its~~consideration ~~financial~~to ~~statements~~which the Company expects to be entitled in exchange for those goods or services. Adoption of the new rules could affect the timing of revenue recognition for certain transactions. The guidance permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. The Company is currently evaluating the impact of adoption and the implementation approach to be used.

In ~~April~~August ~~2016~~2015, the FASB ~~amended~~deferred the ~~Revenue~~ ~~from~~effective ~~Contracts~~date ~~with Customers topic~~ of ~~the~~ASU ~~Accounting~~2014-09, ~~Standards~~Revenue ~~Codification~~from ~~to clarify~~Contracts ~~guidance~~with ~~related~~Customers. toAs ~~collectability, noncash consideration, presentation~~a result of ~~sales~~the ~~tax~~deferral, ~~and~~the ~~transition.~~guidance ~~The~~in ~~amendments~~ASU 2014-09 will be effective for the ~~Company~~ Company for reporting periods beginning after December 15, 2017. The Company will apply the guidance using a modified retrospective approach. The Company does not expect these amendments to have a material effect on its financial statements.

In ~~May~~March 2016, the FASB amended the Revenue from Contracts with Customers topic of the Accounting Standards Codification to clarify the implementation guidance ~~related~~on toprincipal ~~collectability,~~versus ~~noncash~~agent ~~consideration,~~considerations and ~~presentation~~address how an entity should assess whether it is the principal or the ofagent ~~sales~~in ~~tax,~~contracts ~~and~~that ~~transition~~include three or more parties. The amendments will be effective for the Company for reporting periods beginning after December 15, 2017. The Company does not expect these amendments to have a material effect on its financial statements.

In ~~December~~April 2016, the FASB ~~issued~~amended ~~amendments to clarify~~ the ~~Accounting~~Revenue from ~~Standards~~Contracts ~~Codification,~~with ~~correct~~Customers ~~unintended application~~topic of ~~guidance, and make minor improvements to~~ the ~~ASC~~Accounting ~~that~~Standards ~~are~~Codification ~~not expected~~ to ~~have a significant effect on current accounting practice or create~~ aclarify ~~significant~~guidance ~~administrative~~related ~~cost~~ to ~~most~~collectability, ~~entities.~~noncash ~~The~~consideration, ~~amendments were~~presentation ~~effective~~of ~~upon~~sales ~~issuance (December 14~~tax, ~~2016)~~and ~~for amendments that do not have~~ transition ~~guidance~~. ~~Amendments~~The ~~that~~amendments ~~are subject to transition guidance~~ will be effective for ~~fiscal~~the ~~years,~~Company for ~~and~~reporting ~~interim~~ periods ~~within those fiscal years,~~ beginning after December 15, ~~2016~~2017. ~~Early adoption is permitted.~~ The Company does not expect these amendments to have a material effect on its financial statements.

In ~~December~~May 2016, the FASB ~~issued~~amended ~~technical corrections and improvements to~~ the Revenue from Contracts with Customers ~~Topic.~~ ~~These~~topic ~~corrections~~of ~~make~~the aAccounting ~~limited~~Standards ~~number~~Codification ~~of revisions~~ to ~~several pieces~~ ofclarify ~~the~~guidance ~~revenue~~related ~~recognition~~to ~~standard~~collectability, ~~issued~~noncash inconsideration, ~~2014.~~presentation of ~~The~~sales ~~effective~~tax, ~~date~~ and transition. ~~requirements~~The ~~for~~amendments ~~the technical corrections~~ will be effective for the ~~Company~~ Company for reporting periods beginning after December 15, 2017. The Company ~~will~~ ~~apply the guidance using a modified retrospective approach. The Company~~ does not expect these amendments to have a material effect on its financial statements.

In December 2016, the FASB issued amendments to clarify the Accounting Standards Codification, correct unintended application of guidance, and make minor improvements to the ASC that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The amendments were effective upon issuance (~~Continued~~December 14, 2016) for amendments that do not have transition guidance. Amendments that are subject to transition guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company does not expect these amendments to have a material effect on its financial statements.

-In 6December -2016, the FASB issued technical corrections and improvements to the Revenue from Contracts with Customers Topic. These corrections make a limited number of revisions to several pieces of the revenue recognition standard issued in 2014. The effective date and transition requirements for the technical corrections will be effective for the Company for reporting periods beginning after December 15, 2017. The Company will apply the guidance using a modified retrospective approach. The Company does not expect these amendments to have a material effect on its financial statements.

~~Note 1 – Basis of Presentation,~~ (Continued)

~~In February 2016, the FASB amended the Leases~~ ~~topic of the Accounting Standards Codification to require all leases with lease~~ ~~terms over 12 months to be capitalized as a right~~ -of6-use asset and lease liability on the balance sheet at the date of lease commencement. Leases will be classified as either finance leases or operating leases. This distinction will be relevant for the pattern of expense recognition in the income statement. The amendments will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the effect that implementation of the new standard will have on its financial position, results of operations, and cash flows.

InNote ~~August~~1 ~~2016,~~– ~~the~~Basis ~~FASB amended the Statement~~ of Cash Flows topic of the Accounting Standards Codification to clarify how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments will be effective for the Company for fiscal years beginning after December 15Presentation, ~~2017 including interim periods within those fiscal years. The Company does not expect these amendments to have a material effect on its financial statements.~~ Continued

InRecently November,Issued 2016, the FASB amended the Statement of Cash Flows topic of the Accounting Standards Codification to clarify how restricted cash is presented and classified in the statement of cash flows. The amendments will be effective for the Company for fiscal years beginning after December 15, 2017 including interim periods within those fiscal years. Early adoption is permitted. The Company does not expect these amendments to have a material effect on its financial statements. continued

In ~~October~~February 2016, the FASB amended the ~~Income~~ ~~Taxes~~Leases topic of the Accounting Standards Codification to ~~modify~~require all leases with lease terms over 12 months to be capitalized as a right-of-use asset and lease liability on the ~~accounting~~balance sheet at the date of lease commencement. Leases will be classified as either finance leases or operating leases. This distinction will be relevant for ~~intra-entity~~the ~~transfers~~pattern of ~~assets~~expense ~~other~~recognition ~~than~~in ~~inventory~~the income statement. The amendments will be effective for ~~the Company for~~ fiscal years beginning after December 15, ~~2017~~2018, including interim periods within those fiscal years. Early adoption is permitted. The Company ~~does~~is ~~not~~currently ~~expect~~evaluating ~~these~~the ~~amendments~~effect tothat implementation ~~have~~of athe ~~material effect~~new standard will have on its financial ~~statements~~position, results of operations, and cash flows.

In ~~January~~August ~~2017~~2016, the FASB ~~issued~~amended ~~guidance to~~the ~~clarify~~Statement ~~the definitions~~ of aCash ~~business~~Flows ~~with~~topic ~~the objective~~ of ~~adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendment to~~ the ~~Business~~ ~~Combinations~~Accounting ~~Topic~~Standards isCodification ~~intended~~ to ~~address concerns that the existing~~ ~~definition~~clarify ofhow acertain ~~business~~cash ~~has~~receipts ~~been applied too broadly~~ and ~~has~~cash ~~resulted~~payments inare ~~many~~presented and ~~transactions~~classified ~~being recorded as business acquisitions that~~ in ~~substance~~the ~~are~~statement ~~more akin~~of tocash ~~asset acquisitions~~flows. The ~~guidance~~amendments will be effective for the Company for ~~reporting~~ ~~periods~~fiscal years beginning after December 15, 2017. ~~Early~~including interim ~~adoption~~periods ~~is permitted~~within those fiscal years. The Company does not expect these amendments to have a material effect on its financial statements.

In ~~January~~November, ~~2017~~2016, the FASB ~~updated~~amended the ~~Accounting~~Statement ~~Changes~~of ~~and~~Cash ~~Error~~Flows ~~Corrections~~topic ~~and the Investments—Equity Method and Joint Ventures Topics~~ of the Accounting Standards Codification~~. The~~ ~~ASU~~to ~~incorporates~~clarify ~~into~~how ~~the~~restricted ~~Accounting~~cash ~~Standards~~is ~~Codification~~presented ~~recent~~and ~~SEC~~classified ~~guidance about~~in ~~disclosing,~~the ~~under~~statement ~~SEC~~of cash ~~SAB Topic 11~~flows.M, ~~the~~The ~~effect~~amendments onwill ~~financial~~be ~~statements of~~effective ~~adopting~~for the ~~revenue,~~Company ~~leases,~~for ~~and~~fiscal ~~credit losses standards. The ASU was~~years ~~effective~~beginning ~~upon~~after ~~issuance.~~December ~~The~~15, ~~Company~~2017 isincluding ~~currently~~interim ~~evaluating~~periods ~~the~~within ~~impact~~those onfiscal ~~additional~~years. ~~disclosure~~Early ~~requirements~~adoption ~~as each of the standards~~ is ~~adopted,~~permitted. ~~however it~~The Company does not expect these amendments to have a material effect on its financial ~~position,~~ ~~results of operations or cash flows~~statements.

In ~~January~~October ~~2017~~2016, the FASB amended the ~~Goodwill~~Income ~~and~~Taxes ~~Other~~topic ~~Topic~~ of the Accounting Standards Codification to ~~simplify the~~modify the accounting for ~~goodwill~~intra-entity ~~impairment~~transfers ~~for~~of ~~public~~assets ~~business entities and~~ other ~~entities~~ ~~that~~than ~~have goodwill reported in their financial statements and have not elected the private company alternative for the subsequent measurement of goodwill~~inventory. The ~~amendment removes Step 2 of the goodwill impairment test. A goodwill~~ ~~impairment~~amendments will ~~now~~ be ~~the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The~~ effective ~~date and transition requirements~~ for the ~~technical corrections will be effective for the~~ Company for ~~reporting~~fiscal ~~periods~~years beginning ~~after~~ after December 15, ~~2019. Early~~2017, ~~adoption~~including ~~is permitted for~~ interim ~~or annual~~periods ~~goodwill~~within ~~impairment~~those ~~tests~~fiscal ~~performed~~years. onEarly adoption ~~testing~~is ~~dates after January 1, 2017~~permitted. The Company does not expect these amendments to have a ~~material~~ material effect on its financial statements.

In January 2017, the FASB issued guidance to clarify the definitions of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (~~Continued~~or disposals) of assets or businesses. The amendment to the Business Combinations Topic is intended to address concerns that the existing definition of a business has been applied too broadly and has resulted in many transactions being recorded as business acquisitions that in substance are more akin to asset acquisitions. The guidance will be effective for the Company for reporting periods beginning after December 15, 2017. Early adoption is permitted. The Company does not expect these amendments to have a material effect on its financial statements.

-In 7January -2017, the FASB updated the Accounting Changes and Error Corrections and the Investments—Equity Method and Joint Ventures Topics of the Accounting Standards Codification. The ASU incorporates into the Accounting Standards Codification recent SEC guidance about disclosing, under SEC SAB Topic 11.M, the effect on financial statements of adopting the revenue, leases, and credit losses standards. The ASU was effective upon issuance. The Company is currently evaluating the impact on additional disclosure requirements as each of the standards is adopted, however it does not expect these amendments to have a material effect on its financial position, results of operations or cash flows.

~~Note~~In 1January –2017, ~~Basis~~the FASB amended the Goodwill and Other Topic of the Accounting Standards Codification to simplify ~~Presentation~~the accounting for goodwill impairment for public business entities and other entities that have goodwill reported in their financial statements and have not elected the private company alternative for the subsequent measurement of goodwill. The amendment removes Step 2 of the goodwill impairment test. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, ~~Continued~~not to exceed the carrying amount of goodwill. The effective date and transition requirements for the technical corrections will be effective for the Company for reporting periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect these amendments to have a material effect on its financial statements.

In February 2017, the FASB amended the Other Income Topic of the Accounting Standards Codification to clarify the scope of the guidance on nonfinancial asset de-recognition as well as the accounting for partial sales of nonfinancial assets. The amendments conform the de-recognition guidance on nonfinancial assets with the model for transactions in the new revenue standard. The amendments will be effective for the Company for reporting periods beginning after December 15, 2017. The Company does not expect these amendments to have a material effect on its financial statements.(Continued)

~~In September 2017, the FASB updated the~~ ~~Revenue from Contracts with Customers and the Leases Topics of the Accounting~~ ~~Standards Codification. The amendments incorporate into the Accounting Standards Codification recent SEC guidance about certain public business entities (PBEs) electing to use the non~~ -PBE effective dates solely to adopt the FASB’s new standards on revenue and leases. The amendments were effective upon issuance. The Company is currently in the process of evaluating the impact of adoption of this guidance, however it does not expect these amendments to have a material effect on its financial statements. 7-

InNote ~~November~~1 ~~2017,~~– ~~the~~Basis ~~FASB updated the Income Statement and Revenue from Contracts with Customers Topic~~ of the Accounting Standards Codification. The amendments incorporate into the Accounting Standards Codification recent SEC guidance related to revenue recognition. The amendments were effective upon issuance. The Company is currently evaluating the impact on revenue recognitionPresentation, ~~however it does not expect these amendments to have a material effect on its financial statements.~~ Continued

OtherRecently accountingIssued standardsAccounting that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial positionStandards, results of operations or cash flows.continued

~~Certain~~In ~~reclassifications~~February ~~have~~2017, ~~been~~the ~~made~~FASB amended the Other Income Topic of the Accounting Standards Codification to clarify the scope of the ~~prior~~guidance ~~quarter~~on ~~ended~~nonfinancial ~~December~~asset ~~31,~~de-recognition ~~2016~~as well as the accounting for partial sales of nonfinancial assets. ~~These~~The ~~reclassifications~~amendments ~~had~~conform nothe de-recognition ~~effect~~guidance on ~~previously~~nonfinancial ~~reported~~assets ~~stockholders’~~with ~~equity~~the model for transactions in the new revenue standard. The amendments will be effective for the Company for reporting periods beginning after December 15, ~~net~~2017. The ~~income~~Company ordoes ~~cash~~not ~~flows~~expect these amendments to have a material effect on its financial statements.

~~Note~~In 2September –2017, ~~Investment~~the ~~Properties~~FASB updated the Revenue from Contracts with Customers and the Leases Topics of the Accounting Standards Codification. The amendments incorporate into the Accounting Standards Codification recent SEC guidance about certain public business entities (PBEs) electing to use the non-PBE effective dates solely to adopt the FASB’s new standards on revenue and leases. The amendments were effective upon issuance. The Company is currently in the process of evaluating the impact of adoption of this guidance, however it does not expect these amendments to have a material effect on its financial statements.

~~Investment~~In ~~properties leased~~November or2017, ~~held~~the ~~for~~FASB ~~lease~~updated tothe Income ~~others~~Statement ~~under~~and ~~operating~~Revenue ~~leases~~from ~~consisted~~Contracts with Customers Topic of the ~~following~~Accounting atStandards ~~December~~Codification. ~~31,~~The ~~2017~~amendments ~~and~~incorporate ~~September 30~~into the Accounting Standards Codification recent SEC guidance related to revenue recognition. The amendments were effective upon issuance. The Company is currently evaluating the impact on revenue recognition, ~~2017:~~however it does not expect these amendments to have a material effect on its financial statements.

	December 31, 2017		September 30, 2017
	(unaudited)		(audited)
National Plaza building, land and improvements	$	5,322,260	$	5,322,260
Evans Ground Lease, land and improvements		2,382,673		2,382,673
Wrightsboro Road building, land and improvements		1,929,690		1,929,690
Commercial land and improvements		3,804,728		3,804,728
		13,439,351		13,439,351
Less accumulated depreciation		(2,938,699)		(2,891,630)
Investment properties for lease, net of depreciation	$	10,500,652	$	10,547,721

In March 2018, the FASB updated the Income Taxes Topic of the Accounting Standards Codification. The amendments incorporate into the Accounting Standards Codification recent SEC guidance related to the income tax accounting implications of the Tax Cuts and Job Act. The amendments were effective upon issuance. The Company does not expect these amendments to have a material effect on its financial statements.

~~Depreciation~~Other ~~expense~~accounting standards that have been ~~totaled~~issued ~~approximately~~or ~~$47,000~~proposed ~~for~~by the ~~three~~FASB or other standards-~~month~~setting ~~periods~~bodies ~~ended~~are ~~December~~not expected 31to have a material impact on the Company’s financial position, ~~2017~~results ~~and~~of ~~2016.~~operations or cash flows.

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

~~(Continued)~~Certain reclassifications have been made to a prior quarter ended March 31, 2017. These reclassifications had no effect on previously reported stockholders’ equity, net income or cash flows.

-Note 82 -– Investment Properties

~~Note~~Investment properties 2leased –or ~~Investment~~held ~~Properties,~~for lease to others under operating leases consisted ~~Continued~~of the following at March 31, 2018 and September 30, 2017:

The Company entered into a long-term ground lease with a major national tenant and its developer in May 2006 on approximately 18 acres of land in Columbia County, Georgia. The agreement required monthly rental payments of $20,833 during the development period, which was completed in January 2007. Following the expiration of the development period, the lease required annual rental payments of $500,000 for the first 5 years then increasing 5% in years 6, 11, and 16. The lessee has an option to renew in year 21 and another option every 5 years thereafter for a possible total lease term of 50 years.

	March 31, 2018		September 30, 2017
	(unaudited)		(audited)

National Plaza building, land and improvements	$	5,322,260	$	5,322,260
Evans Ground Lease, land and improvements		2,382,673		2,382,673
Wrightsboro Road building, land and improvements		1,929,690		1,929,690
Commercial land and improvements		3,804,728		3,804,728
		13,439,351		13,439,351
Less accumulated depreciation		(2,985,768)		(2,891,630)

Investment properties for lease, net of depreciation	$	10,453,583	$	10,547,721

~~The lease provides for the tenant to pay for insurance and property taxes. The Company is recognizing rents on a straight-line basis over the lease term.~~(Continued)

In September of 2015, the Company purchased a commercial building consisting of approximately 25,000 square feet of retail space and 27,000 square feet of warehouse space on approximately 3.5 acres of land located on Wrightsboro Road. The retail space is currently leased to a local retailer and rent commenced on October 1, 2015. The related lease term is 10 years with annual rental payments totaling $142,000, paid monthly, increasing to $153,000 per year in 2021. The warehouse space is available for lease. The Company is recognizing rents on a straight -~~line basis over the lease term.~~ 8-

~~The~~Note ~~Company~~2 ~~holds several~~– ~~parcels~~Investment ~~of land for investment or development purposes~~Properties, ~~including 19.38~~ acres of land in North Augusta, South Carolina, purchased in parcels during 2007 and 2008. The Company also owns approximately 85 acres of land in south Richmond County, Georgia and a 1.1-acre parcel along Washington Road in Augusta, Georgia that adjoins the Company’s National Plaza investment property. The aggregate costs of these investment properties held for investment or development was $3,804,728 at December 31, 2017 and September 30, 2017, respectively.Continued

~~Refer~~Depreciation expense tototaled ~~the Company’s~~approximately ~~Form 10-K~~$47,000 for the ~~year~~three-month periods ended ~~September 30~~March 31, 2018 and 2017 ~~for~~and ~~further information~~approximately on$94,000 ~~operating~~for ~~lease~~the ~~agreements~~six-month ~~and~~periods ~~land~~ended ~~held~~March 31, ~~for~~2018 ~~investment~~and ~~or development purposes~~2017.

~~Note~~National 3Plaza –is ~~Notes~~a retail ~~Payable~~strip center located on Washington Road in Augusta Georgia. Approximately 81% of the rentable space at the National Plaza is leased to Publix Supermarkets, Inc., the National Plaza’s anchor tenant.

~~Notes~~The ~~payable~~Company ~~consisted~~entered into a long-term ground lease with a major national tenant and its developer in May 2006 on approximately 18 acres of land in Columbia County, Georgia. The agreement required monthly rental payments of $20,833 during the development ~~following~~period, ~~at:~~which was completed in January 2007. Following the expiration of the development period, the lease required annual rental payments of $500,000 for the first 5 years then increasing 5% in years 6, 11, and 16. The lessee has an option to renew in year 21 and another option every 5 years thereafter for a possible total lease term of 50 years.

		December 31,2017	September 30,2017
		(unaudited)	(audited)
	A note payable to a regional financial institution, secured with a mortgage interest in National Plaza and an assignment of rents. The note is payable in monthly installments of $33,050, through August 2027, and accrues interest at an annual fixed rate of 4.3%. The note payable is collateralized by National Plaza.	$ 3,102,003	$ 3,188,257
	A note payable to an insurance company collateralized with approximately 18 acres of land in Columbia County, Georgia, and an assignment of the long-term ground lease. The note is payable in monthly installments of $17,896, including principal and interest, through May 1, 2027, and bears interest at a fixed rate of 5.85%.	1,551,957	1,582,647
		4,653,960	4,770,904
Less deferred financing costs		(50,386)	(51,719)
Less current maturities of notes payable		(393,033)	(388,322)
		$ 4,210,541	$ 4,330,863

The lease provides for the tenant to pay for insurance and property taxes. The Company is recognizing rents on a straight-line basis over the lease term.

~~(Continued)~~In September of 2015, the Company purchased a commercial building consisting of approximately 25,000 square feet of retail space and 27,000 square feet of warehouse space on approximately 3.5 acres of land located on Wrightsboro Road. The retail space is currently leased to a local retailer and rent commenced on October 1, 2015. The related lease term is 10 years with annual rental payments totaling $142,000, paid monthly, increasing to $153,000 per year in 2021. The warehouse space is available for lease. The Company is recognizing rents on a straight-line basis over the lease term.

-The 9Company holds several parcels of land for investment or development purposes, including 19.38 acres of land in North Augusta, South Carolina, purchased in parcels during 2007 and 2008. The Company also owns approximately 85 acres of land in south Richmond County, Georgia and a 1.1-acre parcel along Washington Road in Augusta, Georgia that adjoins the Company’s National Plaza investment property. The aggregate costs of these investment properties held for investment or development was $3,804,728 at both March 31, 2018 and September 30, 2017.

~~Note~~Refer 3to –the Company’s ~~Notes~~Form 10-K ~~Payable~~for the year ended September 30, ~~Continued~~2017 for further information on operating lease agreements and land held for investment or development purposes.

~~Management of the~~ ~~Company expects future liquidity needs of the Company to be funded from rent~~ ~~revenues, refinancing and the appreciation in investment properties (which can be sold or mortgaged, if necessary).~~ -9-

~~Current~~Note ~~maturities~~3 ~~of notes~~– ~~payable will require the Company to make payments over the next 12 months~~Notes ~~totaling~~Payable $393,033. The Company projects that it will be able to fund the payment of its current maturities of notes payable through cash flows generated from its operations and cash on hand, but there can be no assurance that this will occur.

~~Note~~Notes 4payable –consisted ~~Income~~of ~~Taxes~~the following at:

At September 30, 2017, the Company had income taxes payable of $19,917 related to the fiscal year 2017. As of December 31, 2017, the Company has income taxes payable of $57,355 related to the fiscal year 2017.


		March 31, 2018	September 30, 2017
		(unaudited)	(audited)

	A note payable to a regional financial institution, secured with a mortgage interest in National Plaza and an assignment of rents. The note is payable in monthly installments of $33,050, through August 2027, and accrues interest at an annual fixed rate of 4.3%. The note payable is collateralized by National Plaza.	$ 3,057,601	$ 3,188,257
	A note payable to an insurance company collateralized with approximately 18 acres of land in Columbia County, Georgia, and an assignment of the long-term ground lease. The note is payable in monthly installments of $17,896, including principal and interest, through May 1, 2027, and bears interest at a fixed rate of 5.85%.	1,520,817	1,582,647
		4,578,418	4,770,904
Less deferred financing costs		(49,053)	(51,719)
Less current maturities of notes payable		(397,771)	(388,322)
		$ 4,131,594	$ 4,330,863

~~The~~Management ~~Tax Cuts and Jobs Act (TCJA) was signed into law by the President on Friday December 22, 2017. The TCJA includes the reduction in the corporate tax rate from a top rate~~ of ~~35% to a flat rate of 21%, changes in business deductions, and many international provisions. The drop in~~ the ~~corporate rate is effective for tax years~~ ~~beginning~~Company ~~after~~expects ~~December~~future ~~31,~~liquidity ~~2017. IRC~~needs ~~Section 15 indicates that “if any rate~~ of ~~tax imposed…changes, and if~~ the ~~taxable~~Company ~~year~~to ~~includes the effective date of the change…, then tentative taxes shall~~ be ~~computed~~funded byfrom ~~applying the rate for~~rent ~~the period before the effective date of the change~~revenues, ~~and~~refinancing ~~the rate for the period on~~ and ~~after such date, to~~ the ~~taxable~~appreciation ~~income for the entire taxable year, and the tax for such taxable year shall be the sum of that proportion of each tentative tax which the number of days~~ in ~~each~~investment ~~period~~properties ~~bears to the number of days in the entire taxable year.”~~ (~~§15(a)). As~~which ~~the Company is a fiscal year~~can ~~taxpayer,~~be ~~they~~sold ~~will~~or ~~receive a partial benefit for the drop in the federal corporate tax rate for their fiscal year ended September 30~~mortgaged, ~~2018. The weighted~~if ~~average federal tax rate computed in accordance with IRC Section 15 is 24~~necessary).~~25% for the current fiscal year.~~

~~Based~~Current onmaturities of ~~the~~notes ~~drop~~payable inwill require the ~~corporate~~Company ~~tax rate~~ to amake ~~flat~~payments ~~21%,~~over the next 12 months totaling $397,771. The Company ~~revalued~~projects ~~each~~that ofit ~~their~~will ~~deferred~~be ~~tax~~able ~~assets~~to ~~and~~fund the ~~liabilities~~payment inof ~~the~~its current ~~period~~maturities ~~using~~of ~~the~~notes ~~new~~payable ~~corporate~~through ~~tax~~cash ~~rate. The~~flows ~~net~~generated ~~impact~~ from ~~this~~its ~~revaluing~~operations ~~resulted~~and incash aon ~~tax~~hand, ~~benefit~~but ~~recognized~~there incan ~~the~~be ~~current period~~no ~~ending~~assurance ~~December~~that ~~31,~~this will ~~2017 of $463,167~~occur.

~~Income~~Note ~~taxes~~4 ~~have~~– ~~been~~Income provided using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax laws and rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.Taxes

~~During~~At ~~the~~September ~~three-month period ended December 31~~30, 2017, the Company ~~recorded $396,215 in income tax benefits at an effective~~ ~~rate~~had ~~of -233.88% The Company records~~ income taxes ~~using~~payable anof ~~estimated~~$19,917 ~~annual effective~~related ~~tax rate for interim reporting. The individually largest factor contributing~~ to the ~~difference~~fiscal ~~between~~year ~~the~~2017. ~~federal~~As ~~statutory rate~~ of ~~24.25%~~March ~~and the Company’s effective tax rate for the three-month period ended December~~ 31, 2018, ~~2017~~all ~~was~~income taxes ~~the~~payable ~~benefit~~related ~~relating~~ to the ~~revaluing~~fiscal ofyear ~~the~~2017 ~~deferred~~had ~~tax~~been ~~asset and liability balances to the new federal statutory rate~~paid.

~~Note~~The 5Tax -Cuts ~~Concentrations~~and Jobs Act (TCJA) was signed into law by the President on Friday December 22, 2017. The TCJA includes the reduction in the corporate tax rate from a top rate of 35% to a flat rate of 21%, changes in business deductions, and many international provisions. The drop in the corporate rate is effective for tax years beginning after December 31, 2017. IRC Section 15 indicates that “if any rate of tax imposed…changes, and if the taxable year includes the effective date of the change…, then tentative taxes shall be computed by applying the rate for the period before the effective date of the change, and the rate for the period on and after such date, to the taxable income for the entire taxable year, and the tax for such taxable year shall be the sum of that proportion of each tentative tax which the number of days in each period bears to the number of days in the entire taxable year.” (§15(a)). As the Company is a fiscal year taxpayer, they will receive a partial benefit for the drop in the federal corporate tax rate for their fiscal year ended September 30, 2018. The weighted average federal tax rate computed in accordance with IRC Section 15 is 24.25% for the current fiscal year.

~~Substantially~~Based ~~all~~on of the ~~Company’s~~drop ~~assets consist of real estate located~~ in ~~Richmond~~the ~~and~~corporate ~~Columbia~~tax ~~Counties~~rate into ~~the~~a ~~state~~flat ~~of Georgia and in Aiken County~~21%, ~~South Carolina. Substantially all of~~ the Company’s ~~revenues~~revalued ~~are~~each ~~earned from three~~ of ~~the~~their ~~Company’s~~deferred ~~investment properties,~~tax ~~National~~assets ~~Plaza, the Evans Ground Lease,~~ and ~~the Wrightsboro Road~~ ~~Lease,~~liabilities ~~which~~in ~~comprise approximately 51%, 40% and 9% of~~ the ~~Company’s~~current ~~revenues, respectively,~~period ~~for~~using the ~~three-month~~new ~~period~~corporate ~~ended~~tax ~~December 31, 2017~~rate. The ~~anchor~~net ~~tenant~~impact ~~for~~from ~~National~~this ~~Plaza,~~revaluing ~~Publix~~resulted ~~Supermarkets, Inc.~~in ~~(“Publix”),~~ a ~~regional~~ ~~food~~tax ~~supermarket~~benefit ~~chain, leases approximately 81%~~ of ~~the~~$463,167 ~~space~~recognized atas ~~National~~of ~~Plaza.~~December ~~The Company generates approximately~~ 31%, ~~of its revenues through its lease with Publix~~2017.

~~- 10 -~~(Continued)

~~Note 6~~ - ~~Related Party Transactions~~10-

~~During~~Note ~~the~~4 ~~quarter, the~~– ~~Company~~Income ~~paid~~Taxes, a stockholder who is also the son of the President for accounting services. The Company’s Board of Directors believes that the accounting services paid to the son of its President were not in excess of prices that would have been paid had the Company obtained accounting services from other sources. Continued

~~Note~~Income 7taxes –have ~~Stockholders’~~been ~~Equity~~provided using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax laws and rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

OnDuring ~~February~~the 7,six-month ~~2017, Security~~period ~~Land~~ended ~~and~~March ~~Development Corporation offered to purchase up to 2~~31,~~526,247~~ ~~shares~~2018, ~~(approximately 48.2% of~~ the Company’s ~~outstanding~~recorded ~~shares)~~$330,267 ofin ~~its~~income ~~common stock~~tax ~~from~~benefits ~~its stockholders through a tender offer (“the Offer”)~~ at aan ~~price~~effective ofrate ~~$1.25 per share. The Offer is part~~ of ~~a plan intended to enhance stockholder value and provide liquidity for the stockholders~~-90.12% The ~~Offer expired on March 15, 2017, was extended by the~~ Company, ~~and~~records onincome ~~April~~taxes ~~19,~~using ~~2017~~an ~~Security~~estimated ~~Land~~annual ~~and~~effective ~~Development~~tax ~~Corporation~~rate ~~amended~~for ~~the~~interim ~~above offer to increase the offer price to $1~~reporting.60 ~~per share.~~ The ~~amended~~individually ~~Offer~~largest ~~expired~~factor oncontributing ~~May 5, 2017. On May 5, 2017, Security Land and Development Corporation amended the April 19, 2017 Offer~~ to ~~increase~~ the ~~offer~~difference ~~price~~between ~~to $1.75 per share. Within~~ the ~~offer~~federal ~~period,~~statutory ~~192,860 shares~~rate ~~were sold by members~~ of ~~the Board of Directors who are not part of the Flanagin family~~24. ~~As of December 31, 2017, the Flanagin family owned approximately 58~~25% ofand the Company’s effective ~~common~~tax ~~stock.~~rate ~~During~~for the ~~offer~~six-month period, ~~the Company~~ended ~~has~~March ~~purchased and retired a total of 1~~31,~~470,470~~ ~~shares~~2018 ofwas ~~its stock for $2,573,323. Included within these shares purchased by~~ the ~~Company were 192,860~~ ~~shares~~benefit ~~sold~~relating byto ~~members of~~ the ~~Board~~revaluing of ~~Directors who are not part of~~ the ~~Flanagin~~ ~~family.~~deferred ~~The~~tax ~~Company~~asset ~~utilized cash in hand~~ and ~~funds obtained from the~~liability ~~line~~balances ~~of credit that has since been converted~~ to athe ~~term~~new ~~note.~~federal ~~See~~statutory ~~Note 3 – Notes Payable~~rate.

Note 85 –- ~~Subsequent Events~~Concentrations

InSubstantially ~~January,~~all of ~~2018~~the Company’s assets consist of real estate located in Richmond and Columbia Counties in the state of Georgia and in Aiken County, South Carolina. Substantially all of the Company’s ~~purchased~~revenues anare earned from three of the Company’s investment ~~additional~~properties, 6National Plaza,~~347~~ ~~shares~~the ~~shares~~Evans Ground Lease, and the Wrightsboro Road Lease, which comprise approximately 55%, 37% and 8% of the Company’s revenues, respectively, for $1the three-month period ended March 31, 2018.75 ~~per~~The ~~share~~anchor tenant orfor ~~$11~~National Plaza,~~107~~ Publix Supermarkets, Inc. (“Publix”), a regional food supermarket chain, leases approximately 81% of the space at National Plaza. The Company generates approximately 29% of its revenues through its lease with Publix.

-Note 116 - Related Party Transactions

During the quarter, the Company paid a stockholder who is also the son of the President for accounting services. The Company’s Board of Directors believes that the accounting services paid to the son of its President were not in excess of prices that would have been paid had the Company obtained accounting services from other sources.

Note 7 – Stockholders’ Equity

On February 7, 2017, Security Land and Development Corporation offered to purchase up to 2,526,247 shares (approximately 48.2% of the Company’s outstanding shares) of its common stock from its stockholders through a tender offer (“the Offer”) at a price of $1.25 per share. The Offer is part of a plan intended to enhance stockholder value and provide liquidity for the stockholders. The Offer expired on March 15, 2017, was extended by the Company, and on April 19, 2017 Security Land and Development Corporation amended the above offer to increase the offer price to $1.60 per share. The amended Offer expired on May 5, 2017. On May 5, 2017, Security Land and Development Corporation amended the April 19, 2017 Offer to increase the offer price to $1.75 per share. Within the offer period, 192,860 shares were sold by members of the Board of Directors who are not part of the Flanagin family. As of March 31, 2018, the Flanagin family owned approximately 58% of the Company’s common stock. During the offer period, the Company has purchased and retired a total of 1,477,817 shares of its stock for $2,584,430. Included within these shares purchased by the Company were 192,860 shares sold by members of the Board of Directors who are not part of the Flanagin family. The Company utilized cash on hand and funds obtained from the line of credit that has since been converted to a term note. See Note 3 – Notes Payable.

-11-

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

Results of Operations:

The Company’s ~~results~~ results of operations for the ~~three~~six months ended ~~December~~March 31, ~~2017~~2018, and a ~~comparative~~ comparative analysis of the same period for ~~2016~~2017 are presented below:

					Increase (decrease)
					2017 compared to 2016
					2018 compared to 2017
	2017		2016		Amount		Percent
	2018		2017		Amount		Percent
Rent revenues	$	~~417~~902,~~717~~297	$	~~414~~846,~~939~~090	$	256,~~778~~207	17%
Operating expenses		~~178~~420,~~151~~174		~~241~~456,~~861~~667		(6336,~~710~~493)	-268%
Interest expense		70115,~~159~~665		3773,~~768~~464		3242,~~391~~201	8857%
Income tax (benefit) expense, net		(~~396~~330,~~215~~267)		51120,~~363~~349		(~~477~~450,~~578~~616)	-~~1,147~~374%
Net income		~~565~~696,~~622~~725		83195,~~947~~610		~~481~~501,~~675~~115	~~675~~256%

Rent revenues consist of rent revenue from the Company’s National Plaza, a strip center on Washington Road in Augusta, Georgia, and the Evans Ground Lease in Evans, Georgia. The Company also earned rent revenue from a lease on the Wrightsboro Road property with an apparel and home goods retailer and a ground lease with an auto-repair service operation on an out-parcel of National Plaza.

Refer to the Company’s Form 10-K for the year ended September 30, 2017 for further information regarding the properties owned and their lease terms.

Total operating expenses for the ~~three~~six months ended ~~December~~March 31, ~~2017~~2018 decreased compared to the ~~same~~ same period for ~~2016~~2017 due primarily to roofing and plumbing repair costs incurred in 2017 ~~2016~~ that were not incurred in the current period. Refer to the Company’s Form 10-K for the year ended September 30, 2017 for further information regarding these transactions. Management expects operating expenses for the remainder of the current fiscal year to be in-line with operating expenses above incurred ~~for~~during the first ~~quarter~~two quarters of fiscal year 2018.

Interest expense ~~for~~ for the ~~three~~six months ended ~~December~~March 31, ~~2017~~2018 increased compared to ~~2016~~2017 due to the increase in debt resulting from the debt restructuring completed in the prior year. Management expects interest expense for the remainder of the current fiscal year to be in-line with interest expense incurred induring the first ~~quarter~~two quarters of fiscal year 2018.

Income tax expense for the ~~three~~ six-month period ended ~~December~~March 31, ~~2017~~2018 decreased significantly ~~compared~~ compared to the same period for ~~2016~~2017 due to the Tax Cuts and Job Act being signed into law in December 2017.

Liquidity and Sources of Capital:

The Company’s ratio of current assets to current liabilities at ~~December~~March 31, ~~2017~~2018 was ~~103~~118%. The ~~ratio~~ ratio was 103% at September 30, 2017.

Management of the Company expects future liquidity needs of the Company to be funded from rent revenues, refinancing, and the appreciation in investment properties (which can be sold or mortgaged, if necessary).

Current maturities of of notes payable will require the Company to make payments over the next 12 ~~months~~ months totaling $~~393~~397,~~033~~771. The Company projects that it will be able to fund the payment of its current maturities of notes payable through cash flows generated from its operations and cash on hand, but there can be no assurance that this will occur.

- 12 -

Cautionary Note Regarding Forward-Looking Statements:

The results of operations for the ~~three~~six months ended ~~December~~March 31, ~~2017~~2018 are not necessarily indicative of the results that may be expected for the entire fiscal year. The Company may, from time to time, make written or oral forward-looking statements, including statements contained in the Company’s filings with the Securities and Exchange Commission (the “Commission”) and its reports to stockholders. Such forward-looking statements are made based on management’s belief as well as assumptions made by, and information currently available to, management pursuant to “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The Company’s actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, but not limited to, competition from other real estate companies, the ability of the Company to obtain financing for projects, and the continuing operations of tenants.

Item 3. Quantitative and Qualitative Disclosures About Market Risks

Not applicable to smaller reporting companies.

Item 4. Controls and Procedures

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

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

As of September 30, 2017, the Company’s management evaluated the effectiveness of its internal control. Based on the evaluation, the Company’s management concluded that the Company’s internal control over financial reporting was ineffective as of September 30, 2017 and identified a material weakness related to the lack of segregation of duties, accounting personnel with the requisite knowledge of GAAP and the lack of written policies and procedures over financial reporting.

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

- 13 -

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None

Item 1A. Risk Factors

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

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

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Reserved for Future Use

Item 5. Other Information

Management of the Company notes that Forms 8-K were filed during the period for the departure of two members of the Board of Directors. Management is not aware of any un-reported matters occurring during the period that would require any additional disclosures in a Form 8-K.

Item 6. Exhibits

(a)	Exhibit No.	Description
	31.1	Certification Pursuant to Section 302 of Sarbanes-Oxley Act of 2002
	32.1	Certification Pursuant to Section 906 of Sarbanes-Oxley Act of 2002
	101	The following financial information from Security Land and Development Corporation’s Quarterly Report on Form 10-Q for the quarter ended ~~December~~March 31, ~~2017~~2018 is formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Changes in Stockholders’ Equity, (iv) the Condensed Consolidated Statements of Cash Flows and (v) Notes to Consolidated Financial Statements.

- 14 -

SIGNATURES

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

SECURITY LAND AND DEVELOPMENT CORPORATION

(Registrant)

By:	/s/ T. Greenlee Flanagin	~~February~~May 1211, 2018
	T. Greenlee Flanagin	Date
	President
	Chief Executive Officer and Chief Financial Officer

- 15 -

Filing Compare · SECURITY LAND & DEVELOPMENT CORP