U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

x		Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
☒		Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
		For the quarterly period ended June 30, 2016
		For the quarterly period ended December 31, 2016
o		Transition Report Pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
☐		Transition Report Pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
		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.~~

See ~~Large~~ the definitions of "large accelerated filer ~~o Accelerated~~," "accelerated filer" and "smaller reporting company" in rule 12b-2 of the oExchange Act.

Large accelerated filer ☐ Accelerated filer ☐ 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).

~~oYes~~ ☐ Yes ~~xNo~~☒ No

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 ~~August~~February 10, ~~2016~~2017
Common Stock, $0.10 Par Value		5,243,107 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 June 30, 2016 and September 30, 2015	1
	Consolidated Balance Sheets as of December 31, 2016 and September 30, 2016	1
	Consolidated Statements of Income and Retained Earnings for the Three Month Periods ended and for the Nine Month Periods ended June 30, 2016 and 2015	2
	Consolidated Statements of Income and Retained Earnings for the Three Month Periods ended December 31, 2016 and 2015	2
	Condensed Consolidated Statements of Cash Flows for the Three Month Periods ended and for the Nine Month Periods ended June 30, 2016 and 2015	3
	Condensed Consolidated Statements of Cash Flows for the Three Month Periods ended December 31, 2016 and 2015	3
	Notes to the Consolidated Financial Statements	4-8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9-10
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	10
Item 4.	Controls and Procedures	10
Part II	OTHER INFORMATION	1110
Item 1.	Legal Proceedings	1110
Item 1A.	Risk Factors	1110
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	1110
Item 3.	Defaults Upon Senior Securities	11
Item 4.	Reserved for Future Use	11
Item 5.	Other Information	11
Item 6.	Exhibits	11
	SIGNATURES	1211-1413

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

SECURITY LAND AND DEVELOPMENT CORPORATION
CONSOLIDATED BALANCE SHEETS
	June 30,	September 30,
	2016	2015
	(unaudited)
ASSETS
CURRENT ASSETS
Cash	$ 540,897	$ 412,847
Receivables from tenants, net of allowance of $53,809
at June 30, 2016 and $52,255 at September 30, 2015	360,388	386,469
Prepaid property taxes	-	23,251
Income taxes receivable	42,124	14,263
Total current assets	943,409	836,830
INVESTMENT PROPERTIES
Investment properties for lease, net of accumulated depreciation	6,952,129	7,075,175
Land and improvements held for investment or development	3,804,728	3,752,863
	10,756,857	10,828,038
OTHER ASSETS	72,058	79,353
	$ 11,772,324	$ 11,744,221
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$ 236,172	$ 282,769
Current maturities of notes payable	248,049	239,168
Total current liabilities	484,221	521,937
LONG-TERM LIABILITIES
Notes payable, less current portion	2,838,761	3,025,458
Deferred income taxes	1,414,442	1,413,187
Total long-term liabilities	4,253,203	4,438,645
Total liabilities	4,737,424	4,960,582
STOCKHOLDERS' EQUITY
Common stock, par value $.10 per share; 30,000,000 shares authorized;
5,243,107 shares issued and outstanding	524,311	524,311
Additional paid-in capital	333,216	333,216
Retained earnings	6,177,373	5,926,112
Total Stockholders' Equity	7,034,900	6,783,639
Liabilities and Stockholders' Equity	$ 11,772,324	$ 11,744,221
The accompanying notes are an integral part of these consolidated financial statements.
-1-

SECURITY LAND AND DEVELOPMENT CORPORATION

CONSOLIDATED BALANCE SHEETS

SECURITY LAND AND DEVELOPMENT CORPORATION
		December 31,		September 30,
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
		2016		2016
		For the Three Months			For the Nine Months
		(unaudited)
		Ended June 30,			Ended June 30,
ASSETS
		2016	2015		2016	2015
CURRENT ASSETS
		(unaudited)	(unaudited)		(unaudited)	(unaudited)
Cash	$	656,392	$	500,660
OPERATING REVENUES
Receivables from tenants, net of allowance of $52,293
Rent revenues		$ 421,639	$ 383,518		$ 1,251,997	$ 1,148,443
at December 31, 2016 and $53,809 at September 30, 2016		273,781		413,848
OPERATING EXPENSES
Prepaid property taxes		-		26,466
Depreciation and amortization		49,072	41,780		147,182	126,400
Income taxes receivable		-		22,441
Property taxes		68,198	66,158		200,876	199,808
Total current assets		930,173		963,415
Payroll and related costs		24,049	19,368		137,975	61,461
INVESTMENT PROPERTIES
Insurance and utilities		30,300	18,679		57,867	36,127
Investment properties for lease, net of accumulated depreciation		6,858,571		6,905,492
Repairs and maintenance		60,214	49,754		82,120	73,255
Land and improvements held for investment or development		3,804,728		3,804,728
Professional services		11,250	11,763		60,128	54,707
		10,663,299		10,710,220
Bad debt		1,553	-		1,553	2,814
OTHER ASSETS		67,195		69,627
Penalties		-	7		-	11,551
	$	11,660,667	$	11,743,262
Other		2,913	1,738		8,694	4,180
LIABILITIES AND STOCKHOLDERS’ EQUITY
		247,549	209,247		696,395	570,303
CURRENT LIABILITIES
Operating income		174,090	174,271		555,602	578,140
Accounts payable and accrued expenses		$ 93,312		$ 226,620
OTHER INCOME (EXPENSE)
Income taxes payable		36,001		-
Gain on sale of land		-	1,862,235		-	1,862,235
Current maturities of notes payable		253,483		250,418
Interest expense		(38,414)	(40,296)		(118,752)	(131,609)
Total current liabilities		382,796		477,038
Other income		-	138,868		7,616	138,868
LONG-TERM LIABILITIES
		(38,414)	1,960,807		(111,136)	1,869,494
Notes payable, less current portion		2,711,134		2,775,666
Income before income taxes		135,676	2,135,078		444,466	2,447,634
Deferred income taxes		1,398,900		1,406,668
INCOME TAXES PROVISION
Total long-term liabilities		4,110,034		4,182,334
Income tax expense		56,590	49,902		191,950	179,642
Total liabilities		4,492,830		4,659,372
Income tax deferred (benefit) expense		(7,637)	760,473		1,255	753,482
STOCKHOLDERS' EQUITY
		48,953	810,375		193,205	933,124
Common stock, par value $.10 per share; 30,000,000 shares authorized;
Net income		86,723	1,324,703		251,261	1,514,510
5,243,107 shares issued and outstanding		524,311		524,311
RETAINED EARNINGS, BEGINNING
Additional paid-in capital		333,216		333,216
OF PERIOD		6,090,650	4,623,780		5,926,112	4,433,973
Retained earnings		6,310,310		6,226,363
RETAINED EARNINGS, END OF PERIOD		$ 6,177,373	$ 5,948,483		$ 6,177,373	$ 5,948,483
Total Stockholders' Equity		7,167,837		7,083,890
PER SHARE DATA
Liabilities and Stockholders' Equity	$	11,660,667	$	11,743,262
Net income per common share		$ 0.02	$ 0.25		$ 0.05	$ 0.29
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-
-2-

SECURITY LAND AND DEVELOPMENT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
	For the Three Months	~~For the Three Months~~			~~For the Nine Months~~
		Ended June 30,			Ended June 30,
	Ended December 31,
		2016	~~2015~~	2015	~~2016~~	~~2015~~
		(unaudited)	~~(unaudited)~~	(unaudited)	~~(unaudited)~~	~~(unaudited)~~
OPERATING ACTIVITIES
OPERATING REVENUES
Net income		$ 86,723	$ 1,324,703		$ 251,261	$ 1,514,510
Rent revenues	$	414,939	$	410,360
Adjustments to reconcile net income to net cash provided by
OPERATING EXPENSES
operating activities:
Depreciation and amortization		49,352		49,056
Depreciation and amortization		49,072	41,780		147,182	126,400
Property taxes		67,593		64,479
Gain on sale of land		-	(1,862,235)		-	(1,862,235)
Payroll and related costs		26,063		84,631
Deferred income taxes		(7,637)	760,473		1,255	753,482
Insurance and utilities		13,141		10,967
Changes in deferred and accrued amounts		(113,230)	(96,116)		(25,126)	(290,612)
Repairs and maintenance		15,012		7,630
Net cash provided by operating activities		14,928	168,605		374,572	241,545
Professional services		57,032		30,128
INVESTING ACTIVITIES
Bad debt and other		14,835		3,902
Sale of investment properties and other assets for
		243,028		250,793
improvements to property held for lease		-	1,981,900		-	1,993,150
Operating income		171,911		159,567
Additions to restricted cash held by a qualified intermediary		-	(1,791,839)		-	(1,791,839)
OTHER INCOME (EXPENSE)
Additions to investment properties and other assets for
Interest		(36,601)		(40,528)
improvements to property held for lease		(21,095)	-		(68,706)	(11,949)
Other income		-		7,616
Net cash (used in) provided by investing activities		(21,095)	190,061		(68,706)	189,362
		(36,601)		(32,912)
FINANCING ACTIVITIES
Income before income taxes		135,310		126,655
Repayments to stockholder		-	-		-	(50,433)
INCOME TAXES PROVISION (BENEFIT)
Proceeds from note payable		-	-		-	1,500,000
Income tax expense		59,131		57,816
Principal payments on notes payable		(59,994)	(45,724)		(177,816)	(1,169,203)
Income tax deferred (benefit) expense		(7,768)		16,503
Net cash (used in) provided by financing activities		(59,994)	(45,724)		(177,816)	280,364
		51,363		74,319
Net (decrease) increase in cash		(66,161)	312,942		128,050	711,271
Net income		83,947		52,336
CASH, BEGINNING OF PERIOD		607,058	464,311		412,847	65,982
RETAINED EARNINGS, BEGINNING OF PERIOD		6,226,363		5,926,112
CASH, END OF PERIOD		$ 540,897	$ 777,253		$ 540,897	$ 777,253
RETAINED EARNINGS, END OF PERIOD	$	6,310,310	$	5,978,448
SUPPLEMENTAL CASH FLOW INFORMATION:
PER SHARE DATA
Cash paid for interest		$ 39,617	$ 47,752		$ 120,227	$ 137,956
Net income per common share	$	0.02	$	0.01
Cash paid for income taxes		$ 185,000	$ 125,737		$ 219,811	$ 351,880
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
-2-
-3-

SECURITY LAND AND DEVELOPMENT CORPORATION

*SECURITY LAND AND DEVELOPMENT CORPORATION*
*CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS*
	For the Three Months
	Ended December 31,
		2016		2015
		(unaudited)		(unaudited)
OPERATING ACTIVITIES
Net income	$	83,947	$	52,336
Adjustments to reconcile net income to net cash provided by
operating activities:
Bad debts		1,516		-
Depreciation and amortization		49,353		49,056
Deferred income taxes		(7,768)		16,503
Changes in deferred and accrued amounts		90,151		105,188

Net cash provided by operating activities		217,199		223,083

INVESTING ACTIVITIES
Additions to investment properties and improvements
to properties held for development		-		(7,705)

Net cash used in investing activities		-		(7,705)

FINANCING ACTIVITIES
Principal payments on notes payable		(61,467)		(58,554)

Net cash used in financing activities		(61,467)		(58,554)

Net increase in cash		155,732		156,824

CASH, BEGINNING OF PERIOD		500,660		412,847

CASH, END OF PERIOD	$	656,392	$	569,671


SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for interest	$	40,379	$	40,793

Cash paid for income taxes	$	669	$	485

The accompanying notes are an integral part of these consolidated financial statements.
-3-

~~Notes~~SECURITY toLAND AND ~~the~~DEVELOPMENT ~~Consolidated Financial Statements~~CORPORATION

~~Note~~ Notes 1to the –Consolidated ~~Basis~~Financial ~~of Presentation~~Statements

~~The accompanying~~ ~~unaudited~~Note ~~consolidated~~1 ~~financial~~– ~~statements~~Basis ~~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, 2015 when reviewing these interim financial statements.Presentation

The ~~financial~~accompanying ~~statements~~unaudited ~~include~~consolidated ~~estimates~~financial ~~and~~statements ~~assumptions~~were ~~that~~prepared ~~affect~~in ~~the~~accordance ~~reported~~with ~~amounts~~instructions for Form 10-Q, Article 8 of ~~assets~~Regulation S-X and ~~liabilities,~~accounting principles generally accepted in the ~~disclosure~~United States of ~~contingent~~America; ~~assets~~therefore, ~~and~~they ~~liabilities~~do not atinclude ~~the~~all ~~date~~disclosures ofnecessary ~~the~~for ~~financial~~a ~~statements~~complete ~~and~~presentation ~~the~~of ~~reported~~financial condition, ~~amounts~~results of ~~revenue~~operations, and cash flows. Such statements are unaudited ~~expenses~~but, ~~during~~in the ~~reporting~~opinion ~~period.~~of ~~Actual~~management, ~~results~~reflect ~~could~~all ~~differ~~adjustments, ~~from~~which ~~those~~are of a ~~estimates.~~normal ~~The~~recurring ~~consolidated~~nature ~~financial~~and ~~statements~~necessary ~~include~~for ~~the~~a ~~accounts~~fair presentation of results for ~~Security~~the ~~Land~~selected ~~and~~interim ~~Development~~periods. ~~Corporation~~Users ~~and~~of ~~its~~financial ~~four~~information ~~wholly~~produced ~~owned~~for ~~subsidiaries,~~interim ~~Royal~~periods ~~Palms~~are ~~Motel, Inc.,~~encouraged ~~SLDC,~~to ~~LLC,~~refer ~~SLDC~~to 2,the ~~LLC~~footnotes ~~and~~contained ~~SLDC~~in the ~~III,~~audited ~~LLC~~financial ~~(described~~statements onappearing ain ~~consolidated~~our ~~basis~~Form 10-K asfor the ~~“Company”).~~year ~~Significant~~ended ~~intercompany~~September 30, ~~transactions~~2016 ~~and~~when ~~accounts~~reviewing ~~are~~these ~~eliminated~~interim infinancial ~~consolidation~~statements.

~~Critical~~ The ~~Accounting~~financial statements ~~Policies:~~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 has~~ ~~estimated~~Estimates ~~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 Company~~ ~~evaluates~~Evaluation ~~long~~of 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 Company has~~ ~~deferred~~Estimates ~~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 has deferred income taxes through a series of tax-deferred 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 sale of assets may differ ~~Company~~from management’s ~~Form 10-K~~estimates ~~for~~as a result of changes in tax laws, the ~~year~~tax ~~ended~~status of ~~September 30~~the Company, ~~2015~~or ~~for~~the ~~further~~actual taxable earnings of the Company in the periods ~~information~~the ~~regarding~~deferred ~~its~~income ~~critical~~taxes ~~accounting~~become ~~policies~~due.

Refer to the Company’s Form 10-4-K for the year ended September 30, 2016 for further information regarding its critical accounting policies.

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

~~Recently Issued Accounting Standards~~ -4-

~~In May 2014, the Financial~~ ~~Accounting~~Note ~~Standards~~1 ~~Board~~– ~~(“FASB”)~~Basis issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts (Topic 606). The new standard is effective for reporting periods beginning after December 15, 2017 and early adoption is not permitted. 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~~Presentation, ~~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. In March 2016, the FASB amended the Revenue from Contracts with Customers topic of the Accounting Standards Codification to clarify the implementation guidance on principal versus agent considerations and address how an entity should assess whether it is the principal or the agent in contracts that include three or more parties. In April 2016, the FASB amended the Revenue from Contracts with Customers topic of the Accounting Standards Codification to clarify guidance related to identifying performance obligations and accounting for licenses of intellectual property. The amendments will be effective for the Company for reporting periods beginning after December 15, 2017. The Company is currently evaluating the impacts of adoption and the implementation approach to be used.Continued

InRecently NovemberIssued 2015, the FASB amended the Income Taxes topic of the Accounting Standards Codification to simplify the presentation of deferred income taxes. Under the amended guidance, deferred tax liabilities and assets are required to be classified as noncurrent in a classified statement of financial position. The amendments are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods with early adoption permitted as of the beginning of an interim or annual reporting period. The Company has not yet adopted the amended guidance. The Company is currently evaluating the impact of adoption.

In ~~February~~May ~~2016~~2014, the FASB issued ~~new~~ guidance to change ~~accounting~~the ~~for~~recognition ~~leases~~of ~~and~~revenue ~~that~~from ~~will generally~~contracts ~~require~~with ~~most~~customers ~~leases~~in tofuture periods. beThe ~~recognized~~core onprinciple of the ~~balance~~new ~~sheet.~~guidance ~~The~~is ~~new lease~~that ~~standard~~an ~~only~~entity ~~contains~~should recognize ~~targeted~~revenue ~~changes~~ to ~~accounting~~reflect bythe ~~lessors, however,~~transfer ~~lessees~~of ~~will~~goods beand ~~required~~services to ~~recognize~~customers ~~most leases~~ in ~~their balance~~ ~~sheets~~an asamount ~~lease~~equal ~~liabilities~~to ~~for~~the ~~lease~~consideration ~~payments~~the ~~and~~entity ~~right-of-use~~receives ~~assets representing~~or ~~the~~expects ~~lessee’s rights~~ to ~~use~~receive. The ~~the~~guidance ~~underlying~~will ~~assets~~be effective for the ~~lease terms~~Company for ~~lease~~reporting ~~arrangement~~periods ~~longer~~beginning after ~~than~~December 1215, ~~months~~2017. ~~Under~~The ~~this~~comprehensive ~~approach,~~new ~~a lessee~~standard will ~~account~~supersede ~~for most~~ existing revenue ~~capita/finance~~recognition ~~leases~~guidance ~~as Type A leases~~ and ~~most~~require ~~existing~~revenue ~~operating~~to ~~leases~~be asrecognized ~~Type~~when Bpromised goods ~~leases.~~or ~~Type~~services Aare ~~and~~transferred ~~Type~~to Bcustomers ~~leases have~~in ~~unique~~amounts ~~accounting~~that ~~and~~reflect ~~disclosure requirements. Existing sale-leaseback~~the ~~guidance,~~consideration ~~including~~to ~~guidance~~which ~~for~~the ~~real~~Company ~~estate,~~expects ~~will~~to be ~~replaced~~entitled ~~with~~in aexchange ~~new~~for ~~model~~those ~~applicable~~goods toor ~~both lessees and lessors~~services. Adoption ~~The~~of the new ~~guidance~~rules ~~will~~could beaffect ~~effective~~the ~~for~~timing of ~~fiscal~~revenue ~~years~~recognition ~~and~~for ~~interim~~certain ~~periods~~transactions. The ~~within~~guidance ~~those~~permits ~~fiscal years beginning after~~two ~~December~~implementation 15approaches, ~~2018.~~one ~~Early~~requiring ~~adoption~~retrospective isapplication ~~permitted~~of ~~for~~the ~~all companies and~~new ~~organizations.~~standard ~~Management~~with isrestatement ~~currently~~of ~~analyzing~~prior ~~the~~years ~~impact~~and ofone ~~the~~requiring ~~adoption~~prospective application of ~~this~~ ~~guidance~~the onnew ~~the~~standard ~~company’s~~with ~~consolidated~~disclosure ~~financial~~of ~~statements,~~results ~~including~~under old ~~assessing~~standards. The ~~changes~~Company ~~that~~is ~~might~~currently beevaluating ~~necessary~~the toimpact ~~information~~of ~~technology~~adoption ~~system, processes~~ and ~~internal~~the implementation ~~controls~~approach to ~~capture~~be ~~new data and address changes in financial reporting~~used.

In ~~May~~August ~~2016~~2014, the FASB ~~amended~~issued ~~the~~guidance that ~~Revenue~~is ~~from~~intended ~~Contracts~~to ~~with~~define ~~Customers~~management’s ~~topic~~responsibility ofto ~~the~~evaluate ~~Accounting~~whether ~~Standards~~there ~~Codification~~is substantial doubt about an organization’s ability to ~~clarify~~continue ~~guidance~~as ~~related~~a going concern and to ~~collectability~~provide related footnote disclosures. In connection with preparing financial statements, ~~noncash~~management will need to evaluate whether there ~~consideration~~are conditions or events, ~~presentation~~considered ofin ~~sales~~the ~~tax~~aggregate, ~~and~~that ~~transition~~raise substantial doubt about the organization’s ability to continue as a going concern within one year after the date that the financial statements are issued. The ~~amendments will~~guidance will be effective for the Company for ~~reporting~~the ~~periods~~annual ~~beginning~~period ~~after~~ending ~~December~~September 1530, 2017, and for annual periods and interim periods thereafter. The Company does not expect ~~these~~this ~~amendments~~guidance to have a material effect on its financial statements.

~~Other accounting~~ ~~standards~~In ~~that~~August ~~have~~2015, ~~been~~the FASB issued oramendments to ~~proposed~~the byInterest topic of the ~~FASB~~Accounting orStandards ~~other~~Codification to clarify the ~~standards-setting~~SEC ~~bodies~~staff’s ~~are~~position ~~not~~on ~~expected~~presenting toand ~~have~~measuring adebt ~~material~~issuance ~~impact~~costs onincurred in ~~the~~connection with line-of-credit arrangements. The amendments were effective upon issuance. The Company’s ~~financial~~does ~~position,~~not ~~results~~expect ofthese ~~operations~~amendments orto ~~cash~~have ~~flows~~a material effect on its financial statements.

In August 2015, the FASB deferred the effective date of ASU 2014-509, 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.

~~Note~~ In 2November –2015, ~~Investment~~the FASB amended the ~~Properties~~Income Taxes topic of the Accounting Standards Codification to simplify the presentation of deferred income taxes by requiring that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments will be effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company will apply the guidance prospectively. The Company does not expect these amendments to have a material effect on its financial statements.

~~Investment~~ ~~properties~~In ~~leased~~February or2016, ~~held~~the ~~for~~FASB ~~lease~~amended tothe Leases ~~others~~topic ~~under~~of ~~operating~~the ~~leases~~Accounting ~~consisted~~Standards Codification to revise certain aspects of recognition, measurement, presentation, and disclosure of leasing transactions. The amendments will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the ~~following~~effect atthat implementation of the new ~~June~~standard 30will have on its financial position, ~~2016~~results ~~and~~of ~~September 30~~operations, ~~2015:~~and cash flows.

	June 30, 2016		September 30, 2015
	(unaudited)
National Plaza building, land and improvements	$	5,322,260	$	5,305,419
Evans Ground Lease, land and improvements		2,382,673		2,382,673
Wrightsboro Road Building, land and improvements		1,905,875		1,905,875
Commercial land and improvements		3,804,728		3,752,863
		13,415,536		13,346,830
Less accumulated depreciation		(2,658,679)		(2,518,792)
Investment properties for lease, net of depreciation	$	10,756,857	$	10,828,038

In March 2016, the FASB amended the Revenue from Contracts with Customers topic of the Accounting Standards Codification to clarify the implementation guidance on principal versus agent considerations and address how an entity should assess whether it is the principal or the agent in contracts that 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.

~~Depreciation~~ ~~expense totaled approximately $47,000 and $39,000 for the three~~ -~~month periods ended June 30, 2016 and 2015, respectively and approximately $140,000 and $120,000 for the nine~~5-~~month periods ended June 30, 2016 and 2015, respectively.~~

~~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. (Continued)

~~The Company entered~~ ~~into~~Note a1 ~~long-term~~– ~~ground~~Basis ~~lease with a major national tenant and its developer in May 2006 on approximately 18 acres~~ of ~~land in Columbia County~~Presentation, ~~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 at year 21 and another option every 5 years thereafter for a possible total lease term of 50 years. 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~~Recently ~~the~~issued ~~Company~~accounting ~~purchased a commercial building consisting of approximately 25~~standards,~~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 was available for lease as of September 30, 2015. The Company is recognizing rents on a straight-line basis over the lease term. continued

~~The~~ In ~~Company~~March ~~holds~~2016, the FASB issued guidance to simplify several ~~parcels~~aspects of ~~land~~the accounting for ~~investment~~share-based orpayment ~~development~~award transactions ~~purposes~~including the income tax consequences, ~~including~~the ~~19.38 acres~~classification of awards ~~land~~as ineither ~~North~~equity ~~Augusta~~or liabilities, ~~South~~and ~~Carolina,~~the ~~purchased~~classification inon ~~parcels~~the ~~during~~statement ~~2007~~of ~~and~~cash ~~2008~~flows. ~~The~~Additionally, ~~Company~~the ~~also~~guidance ~~owns~~simplifies ~~approximately~~two 85areas ~~acres~~specific ofto entities ~~land~~other inthan ~~south~~public business entities allowing them apply a practical ~~Richmond~~expedient ~~County,~~to ~~Georgia~~estimate the expected term for all awards with performance or service conditions that have certain characteristics and also allowing them to make a ~~1.1~~one-~~acre~~time ~~parcel~~election ~~along~~to ~~Washington~~switch ~~Road~~from inmeasuring all liability-classified ~~Augusta,~~awards ~~Georgia~~at ~~that~~fair ~~adjoins~~value ~~the~~to ~~Company’s~~measuring ~~National~~them ~~Plaza~~at ~~investment~~intrinsic ~~property~~value. The ~~aggregate~~amendments ~~costs~~will be ofeffective ~~these~~for ~~investment~~the ~~properties~~Company ~~held~~ for ~~investment~~annual ~~or development~~periods ~~was~~beginning $3after December 15,~~804,728~~ 2016 and ~~$3,752,863~~interim atperiods ~~June~~within ~~30,~~those ~~2016~~annual ~~and~~periods-public ~~September~~business ~~30,~~entities. ~~2015,~~The ~~respectively~~Company does not expect these amendments to have a material effect on its financial statements.

~~Refer~~ In toMay 2016, the FASB amended the Revenue ~~Company’s~~from ~~Form 10-K~~Contracts ~~for~~with Customers topic of the ~~year~~Accounting ~~ended~~Standards ~~September 30~~Codification to clarify guidance related to collectability, ~~2015~~noncash ~~for~~consideration, ~~further~~presentation ~~information~~of onsales ~~operating~~tax, ~~lease~~and ~~agreements~~transition. ~~and~~The ~~land~~amendments ~~held~~will be effective for ~~investment~~the orCompany ~~development~~for ~~purposes~~reporting periods beginning after December 15, 2017. The Company does not expect these amendments to have a material effect on its financial statements.

~~-6-~~ In August 2016, the 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 15, 2017 including interim periods within those fiscal years. The Company does not expect these amendments to have a material effect on its financial statements.

~~Note~~ Other 3accounting –standards ~~Notes~~that ~~Payable~~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 position, results of operations or cash flows.

~~Notes~~ Note ~~payable~~2 ~~consisted~~– ofInvestment ~~the following at:~~Properties

	June 30, 2016	September 30, 2015
	(unaudited)
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%.	$ 1,729,554	$ 1,812,690
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 $15,220, including principal and interest, through April 2025, and bears interest at a fixed rate of 4%. The proceeds were used to pay the Company’s outstanding income tax liability, four notes payable collateralized by the Company’s land held for lease and investment portfolio and one uncollateralized note payable to a shareholder. The proceeds were also used to fund improvements at National Plaza.	1,357,256	1,451,936
	3,086,810	3,264,626
Less current maturities	(248,049)	(239,168)
	$ 2,838,761	$ 3,025,458

Investment properties leased or held for lease to others under operating leases consisted of the following at December 31, 2016 and September 30, 2016:

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).

	December 31, 2016			September 30, 2016
	(unaudited)

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		1,905,875			1,905,875
Commercial land and improvements		3,804,728			3,804,728
		13,415,536			13,415,536

Less accumulated depreciation		(2,752,237	)		(2,705,316	)

Investment properties for lease, net of depreciation	$	10,663,299		$	10,710,220

~~Current maturities~~ ofDepreciation expense ~~notes~~totaled ~~payable~~approximately ~~will~~$47,000 ~~require~~and ~~the Company to make payments over the next 12 months totaling~~ $~~248~~48,~~049.~~000 ~~The~~for ~~Company projects that it will be able to fund~~ the ~~payment~~ ofthree-month ~~its current maturities of notes payable through cash flows generated~~periods ~~from~~ended ~~its~~December ~~operations~~31, 2016 and ~~cash on hand~~2015, ~~but there can be no assurance that this will occur~~respectively.

~~Note~~ National 4Plaza –is ~~Income~~a retail ~~Taxes~~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.

~~At September 30,~~ 2015 the Company had income taxes receivable of $14,263 related to the fiscal year 2015. As of June 30, 2016, the Company has income taxes receivable of $42,124, all of which will be applied to estimated taxes due for the fourth quarter of 2016. -6-

~~Note 5 - Concentrations~~ (Continued)

~~Substantially all~~ ofNote ~~the~~2 ~~Company’s~~– ~~assets~~Investment ~~consist of real estate located in Richmond and Columbia Counties in the state of Georgia and in Aiken County~~Properties, ~~South Carolina. Substantially~~ all of the Company’s revenues are earned from three of the Company’s investment properties, National Plaza, the Evans Ground Lease, and the Wrightsboro Road Lease, which comprise approximately 51%, 40% and 9% of the Company’s revenues, respectively, for the three-month period ended June 30, 2016. The anchor tenant for National Plaza, Publix Supermarkets, Inc. (“Publix”), a regional food supermarket chain, leases approximately 81% of the space at National Plaza. The Company generates approximately 31% of its revenues though its lease with Publix.Continued

The Company entered into a long-7term 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 at year 21 and another option every 5 years thereafter for a possible total lease term of 50 years. 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.

~~Note~~ In 6September 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 was available for lease as of September 30, 2016. The Company is recognizing rents on a straight-line ~~Related~~basis ~~Party~~over ~~Transactions~~the lease term.

The Company holds ~~purchases~~several ~~insurance~~parcels ~~from~~of anland ~~insurance~~for ~~company~~investment ofor ~~which~~development apurposes, ~~member~~including 19.38 acres of ~~the Company’s~~land ~~Board~~in ofNorth ~~Directors~~Augusta, isSouth ~~President~~Carolina, ~~Emeritus~~purchased in parcels during 2007 and 2008. The Company’s ~~Board~~also owns approximately 85 acres of land in south ~~Directors~~Richmond ~~believes~~County, ~~that~~Georgia ~~the~~and ~~insurance~~a ~~prices~~1.1-acre ~~obtained~~parcel ~~from~~along ~~the~~Washington ~~insurance~~Road in ~~company~~Augusta, ~~were~~Georgia ~~not~~that inadjoins ~~excess~~the ofCompany’s ~~prices~~National ~~that~~Plaza ~~would~~investment ~~have~~property. The ~~been~~aggregate ~~paid~~costs ~~had~~of ~~the~~these ~~Company~~investment properties held for investment or ~~obtained~~development ~~this~~was ~~insurance~~$3,804,728 ~~from~~at ~~other~~December ~~sources~~31, 2016 and September 30, 2016, respectively.

~~The Company hired~~ anRefer ~~attorney~~to ~~who is a member of~~ the Company’s ~~Board~~Form 10-K offor ~~Directors~~the ~~and~~year ~~who~~ended ~~also serves as Vice President of the Company~~September 30, to2016 ~~represent~~for ~~the~~further information ~~Company~~on inoperating alease ~~legal matter~~agreements ~~regarding~~and aland ~~tenant’s~~held ~~claim~~ for ~~reimbursement~~investment ~~of certain expenses~~or ~~charged.~~development ~~The matter was settled in June 2015~~purposes.

Note 73 -– ~~Legal~~Notes ~~Matter~~Payable and Line of Credit

~~In June 2015, the~~ ~~Company~~Notes ~~settled~~payable aconsisted ~~legal matter regarding a tenant’s claim for reimbursement~~ of ~~certain~~ ~~expenses charged to~~ the ~~tenant by the Company. Refer to the~~following ~~Company’s Form 10-K for the year ended September 30, 2015 for further information regarding this settlement.~~ at:

-8-

		December 31, 2016 (unaudited)		September 30, 2016

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%.	$	1,672,074	$	1,701,024
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 $15,220, including principal and interest, through April 2025, and bears interest at a fixed rate of 4%. The proceeds were used to pay the Company’s outstanding income tax liability, four notes payable collateralized by the Company’s land held for lease and investment portfolio and one uncollateralized note payable to a shareholder. The proceeds were also used to fund improvements at National Plaza.		1,292,543		1,325,060
		2,964,617		3,026,084
Less current maturities		(253,483)		(250,418)
	$	2,711,134	$	2,775,666

-7-

(Continued)

Note 3 – Notes Payable and Line of Credit, Continued

Current maturities of notes payable will require the Company to make payments over the next 12 months totaling $253,483. 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.

In November of 2016, the Company obtained a $3,000,000 line of credit from a regional financial institution to finance a probable equity transaction. The Company has not used the line of credit. The line bears a rate of 3.5% and matures November 29, 2017. See Note 7 – Subsequent Event.

Note 4 – Income Taxes

At September 30, 2016, the Company had income taxes receivable of $22,441 related to the fiscal year 2016. As of December 31, 2016, the Company has income taxes payable of $36,001, all of which was related to estimated taxes due for the fourth quarter of 2016 and was paid in full in January of 2017.

Note 5 - Concentrations

Substantially all of 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 revenues are earned from three of the Company’s investment properties, National Plaza, the Evans Ground Lease, and the Wrightsboro Road Lease, which comprise approximately 51%, 40% and 9% of the Company’s revenues, respectively, for the three-month period ended December 31, 2016. The anchor tenant for National Plaza, Publix Supermarkets, Inc. (“Publix”), a regional food supermarket chain, leases approximately 81% of the space at National Plaza. The Company generates approximately 31% of its revenues though its lease with Publix.

Note 6 - Related Party Transactions

The Company purchases insurance from an insurance company of which a member of the Company’s Board of Directors is President Emeritus. The Company’s Board of Directors believes that the insurance prices obtained from the insurance company were not in excess of prices that would have been paid had the Company obtained this insurance from other sources.

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 – Subsequent Event

On February 7, 2017 Security Land & 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 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 expires on March 15, 2017, unless extended by the Company.

-8-

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

Results of Operations:

The Company’s results of operations for the ~~nine~~ three months ended ~~June~~December 3031, 2016, and a comparative analysis of the same period for 2015 are presented below:

					Increase (decrease)
					2016 compared to 2015
	2016		2015		Amount			Percent
Rent revenues	$	1414,~~251,997~~939	$	1410,~~148,443~~360	$	~~103~~4,~~554~~579		91%
Gain on sale of land		-		1,862,235		(1,862,235)		-100%
Operating expenses		243,028		250,793		(7,765	)	-3%
Operating expenses		696,395		570,303		126,092		22%
Interest expense		36,601		40,528		(3,927	)	-10%
Interest expense		118,752		131,609		(12,857)		-10%
Income tax expense, net		51,363		74,319		(22,956	)	-31%
Income tax expense		193,205		933,124		(739,919)		-79%
Other income		-		7,616		(7,616	)	-100%
Other income		7,616		138,868		(131,252)		-95%
Net income		83,947		52,336		31,611		60%
Net income		251,261		1,514,510		(1,263,249)		-83%

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. Rental income for the nine months ended June 30, 2016 increased compared to the same period for 2015 due to the addition of the rent related to the Wrightsboro Road property lease which commenced on October 1, 2015.

Refer to the Company’s Form 10-K for the year ended September 30, ~~2015~~2016 for further information regarding the properties owned and their lease terms.

In Total ~~June~~operating expenses offor ~~2015~~the three months ended December 31, 2016 decreased compared to the ~~Company~~same ~~recognized~~period for 2015 due to a ~~gain~~bonus onto the ~~sale~~Company’s ofpresident ~~approximately~~in 1relation ~~acre~~to the sale of ~~land, previously~~an ~~included~~approximately as1 ~~part~~acre outparcel of National Plaza, ~~adjacent~~and tothe Stanley Drive ~~and a residential~~ house onpaid in 2015.43 ~~acres~~This ofwas ~~land~~offset ~~held~~by ~~for~~slightly ~~lease~~higher onprofessional ~~Stanley~~fees paid ~~Drive~~in 2016. ~~The~~Refer ~~proceeds~~to ~~from~~the Company’s Form 10-K for the year ended ~~this~~September 30, ~~sale~~2016 ~~were~~for ~~used~~further ininformation aregarding ~~tax~~these ~~deferred~~transactions. Management ~~like~~expects ~~kind~~operating ~~exchange~~expenses for the ~~Wrightsboro Road~~remainder ~~property~~of ~~that~~the ~~was~~current ~~purchased~~fiscal year to be in-line ~~September~~with ~~2015~~operating expenses above incurred for the first quarter.

~~Total operating~~ ~~expenses~~Interest expense for the ~~nine~~three months ended ~~June~~December 3031, 2016 ~~increased~~decreased compared to ~~the same period for~~ 2015 due to ~~a bonus to~~ the ~~Company’s~~decrease ~~president~~ in ~~relation~~debt toresulting ~~the sale of an approximately 1 acre outparcel of National Plaza and the Stanley Drive house. The proceeds~~ from ~~this~~scheduled ~~sale~~principal ~~were used in a tax deferred like kind exchange for the Wrightsboro Road property that was purchased in September 2015~~payments. ~~The Company’s operating expenses also increased due to the property tax~~Management ~~expense~~expects ~~for~~interest ~~Wrightsboro Road property purchased during 2015. Refer to the Company’s Form 10-K for the year ended September 30, 2015 for further information regarding these transactions. In addition, operating~~ expense ~~also increased due to depreciation cost related to the Wrightsboro Road property acquired in 2015. Management expects operating expenses~~ for the remainder of the current fiscal year to continue ~~decrease slightly relative~~ to ~~the~~decrease ~~current operating period~~ as ~~no other~~outstanding ~~similar~~debt ~~bonuses~~continues ~~are~~to ~~anticipated in the current fiscal year~~amortize.

~~Interest~~ Income tax expense for the ~~nine~~three ~~months~~month period ended ~~June~~December 3031, 2016 decreased compared to ~~2015 due to~~ the ~~decrease~~same inperiod ~~debt~~for ~~resulting~~2015 ~~from~~due ~~scheduled~~to ~~principal~~deferred ~~payments.~~tax ~~Management expects~~expense ~~interest~~recognized ~~expense~~in ~~for~~2015 related to the ~~remainder~~sale of the ~~current~~outparcel ~~fiscal~~and ~~year~~rental ~~to continue~~house toon ~~decrease~~Stanley asDrive ~~outstanding~~noted ~~debt continues to amortize~~above.

Income tax expense for the nine month period ended June 30, 2016 decreased compared to the same period for 2015 due to deferred tax expense recognized in 2015 related to the sale of the outparcel and rental house on Stanley Drive noted above.

-9-

During 2011, the Company was notified by a tenant of a claim for reimbursement of certain expenses the Company charged in association with a tenant lease. It was the opinion of the Company's management that the Company was not liable for the claim. Beginning in 2011 the Company accrued approximately $150,000 for professional fees and other expenses to defend its position against the claim. The matter was settled in June 2015 and resulting costs totaled approximately $11,000. The remaining accrual of approximately $138,000 was written off and recognized as other income in June 2015.

Liquidity and Sources of Capital:

The Company’s ratio of current assets to current liabilities at ~~June~~December 3031, 2016 was ~~195~~243%. The ~~ratio~~ ratio was ~~160~~202% at September 30, ~~2015~~2016.

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 notes payable will require the Company to make payments over the next 12 months totaling $~~248~~253,~~049~~483. 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. The Company plans to use the $3,000,000 available line of credit to fund the February 7, 2017 tender offer.

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Cautionary Note Regarding Forward-Looking Statements:

The results of operations for the three ~~and nine~~ months ended ~~June~~December 3031, 2016 are not ~~necessarily~~ 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~~ Securities Litigation Reform Act of 1995. The Company’s actual results may ~~differ~~ 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, ~~2015~~2016, 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, ~~2015~~2016 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.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

~~During 2011, the Company was notified by a~~ tenant of a claim for reimbursement of certain expenses charged by the Company. The Company accrued approximately $150,000 for professional fees and other expenses to defend its position. The matter was settled in the year ended September 30, 2015 and the approximately $139,000 was recognized as income as a result of the settlement.None

Item 1A. Risk Factors

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

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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 no Forms 8-K were filed during the period and Management is not aware of any un-reported matters occurring during the period that would require disclosure 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 ~~June~~December 3031, 2016 is formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income and Retained Earnings, (iii) the condensed Consolidated Statements of Cash Flows and (iv) Notes to Consolidated Financial Statements.

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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	~~August~~February 10, ~~2016~~2017
	T. Greenlee Flanagin	Date
	President
	Chief Executive Officer and Chief Financial Officer

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