UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One) | |
[X] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the fiscal year ended September 30, | |
OR | |
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from __________ to ___________ |
Commission file number 0-8463
PISMO COAST VILLAGE, INC.INC.
(Exact name of registrant as specified in its charter)
California 95-2990441
(State or other jurisdiction of incorporation or organization) (IRS Employer ID No.)
165 South Dolliver Street, Pismo Beach, CA 93449
(Address of Principal Executive Offices) (Zip Code)
(805) 773-5649
Registrant’s telephone number, including area codecode.
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange on Which Registered | |||
Title of Each Class | |||
N/A | N/A |
Securities registered pursuant to Section 12(g) of the Act:
Common Stock
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES [ ] NO [[X]X]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES [ ] NO [[X]X]
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ]
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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 (Subsection 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES [X] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Subsection 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large, accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
[ ] Large accelerated filer
[ ] Accelerated filer
[X] Non-accelerated[X] non-accelerated filer
[X][X] Smaller reporting company
[ ] Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. [ X ]
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of registrant included in the filing reflect the correction of an error to previously issued financial statements. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES [ ] NO [X]
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter. $78,100,000$88,700,000
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13, or 15 (d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. YES [ X ] NO [ ]
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. 1,7751,774
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Notice of 20212023 Definitive Proxy Statement for the Annual Meeting of Shareholders to be held January 15, 2022,20, 2024, are incorporated by reference into Part III.
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FORM 10-K
PART I
ITEM 1. BUSINESSBUSINESS.
a. BUSINESS DEVELOPMENT
Pismo Coast Village, Inc., the "Registrant" or the "Company," was incorporated under the laws of the State of California on April 2, 1975. The Company's sole business is owning and operating Pismo Coast Village RV Resort, a recreational vehicle resort (hereinafter the "Resort") in Pismo Beach, California. The Resort has continued to enhance its business by upgrading facilities and services to better serve customers.
b. BUSINESS OF ISSUER
The Company is engaged in only one business, namely,company exclusively operates within the ownershiprealm of owning and operation of themanaging Pismo Coast Village RV Resort. The Company generatesIts revenue streams originate from rental of camping sites,site rentals, recreational vehicle storage, recreational vehicle repairtow services, and retail sales fromthrough a general storestore. With all activities consolidated within this single industry segment, the company's financials and recreational vehicle parts store. Accordingly, all of the revenues, operating profit (loss) and identifiable assets of the Company are entirely attributable to a single industry segment.its Resort operations.
Pismo Coast Village RV Resort isstands as a comprehensive, full-service 400-spacefacility featuring 400 spaces for recreational vehicle resort. Its Resortvehicles. The scope of resort operations includeencompasses site rentals, RV storage business,and tow services, a video arcade, laundromat, and othervarious income sources relatedlinked to the operation.its overall functioning. The retail facet of the operations includeis represented by a general store, RV parts store, and RV repair shop. In addition,store. Additionally, the Company hascompany hosts a recreation department that providesorchestrates activities and facilitates the rental of recreational equipment. In summary, the company's sole business focus is the ownership and operation of Pismo Coast Village RV Resort, showcasing a summer season youth program anddiverse range of offerings underpinned by a unified commitment to exceptional recreational equipment rentals.experiences.
PUBLIC AND SHAREHOLDER USERS
The present policy of the Company is to offer each shareholder the opportunity for 45 nights of free use of sites at the Resort; 25 nights may be used during prime time and 20 nights during non-prime time. The free use of sites by shareholders is managed by designating the nights of the year as prime time and non-prime time. A prime timeprime-time night is one that is most in demand, for example, Memorial Day Weekend and the period from June 1 until Labor Day. Non-prime time is that time with the least demand. Each shareholder is furnished annually a calendar that designates the prime and non-prime time nights; it also provides a schedule of when reservations can be made and the procedure for making reservations. Shareholder's free use of sites average approximately 21% to 24% annually (refer to Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, page 9).
SEASONAL ASPECTS OF BUSINESS
The business of the Company is seasonal and is concentrated during prime days of the year which are defined as follows: President's Day Weekend, Easter week, Memorial Day Weekend, summer vacation months, Labor Day, Thanksgiving Weekend and Christmas vacation.
WORKING CAPITAL REQUIREMENTS
By accumulating reserves during the prime seasons, the Company is able generally to meet its working capital needs during the off-season. Industry practice is to accumulate funds during the prime season, and use such funds, as necessary, in the off-season. The Company has arranged, but not used, a $500,000 line of credit to ensure funds are available, if necessary, in the off-season.
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COMPETITION
The Company is infaces competition withfrom nine other RV parks located within a five-mile radius. Sinceradius, but its property isdistinct advantage lies in being the onlysole property located adjacent to the beach, it has a competitive edge. The Company is recognizedbeach. Recognized as a recreational vehicle resort, rather than a park because ofit stands out for its upgraded facilities and amenities, which include 66 channels ofincluding a restaurant, general store, satellite TV, high-speed wireless internet, service throughout the property, a heated pool, a miniature golf course, and a comprehensive recreational program. The Resort is noted for its ability to provide full service, which includes RV storage and RV repair and service. The Resort is consistently given high ratings by industryIndustry travel guides based on resort appearance, facilities offered, and recreational programs. In November 2007,consistently rate Pismo Coast Village RV Resort was awardedhighly for its appearance, facilities, and recreational offerings, earning it the prestigious designation of 2007/2008"Best of Pismo Beach – RV Park of the Year, Large Park Category, by the National Association of RV Parks and Campgrounds (ARVC), which has a membership of more than 3,900 properties. Pismo Coast Village RV Resort also received national Park of the Year honorsResort" in 1999, 1997, and 1995. In fiscal year 2004, Pismo Coast Village RV Resort was awarded the designation of RV Park of the Year - Mega Park Category 2004 by the California Travel Parks Association (CTPA), now known as the California Association of RV Parks and Campgrounds (CalARVC). These factors allow the Resort to price its site rental fees above most of its competition based on perceived value received.September 2023.
Competition forIn the competitive tourist market is strong between the cities onof the Central Coast of California.California, the Resort management and staff are involvedactively collaborates with the City of Pismo Beach, Chamber of Commerce, Conference and Visitors Bureau, and areparticipating as major sponsors in cooperativejoint events and advertising. The Resort continues to market off-season discounts and place advertisementsadvertising initiatives. Ongoing marketing efforts include placements in trade publications, industry directories, and industry directories. In addition,collaboration with RV-related companies. Leveraging the Company placeseffectiveness of its brochure with companies selling or renting recreational vehicles and has found the Resort's website and social media, to be very effective. the Resort successfully engages with its target audience.
The marketing program also targetsstrategy extends to groups and clubs, by offering incentives such as group discounts, meeting facilities, and catering services. The Company'sDespite a competitive landscape, the Company allocated $58,944 to its marketing plan was funded $38,690 for the fiscal year 2021, which was developed out of operating revenues. The major source of the Company's business is repeat business, which has been developed by attention2022-2023, demonstrating a commitment to goodsustained growth. Emphasizing customer service and providing qualityhigh-quality recreational facilities.facilities, the Resort has cultivated a robust source of repeat business, underlining its success in building lasting relationships with patrons.
ENVIRONMENTAL REGULATION
The Company is affected by federal, state, and local antipollution laws and regulations. Due to the nature of its business operations (camping, RV storage and small retail store sales), the discharge of materials into the environment is not considered to be of a significant concern, and the EPA has not designated the Company as a potentially responsible party for clean upcleanup of hazardous waste.
The main property of the Resort is located within the boundaries of those lands under the review and purview of the Coastal Commission of the State of California and the City of Pismo Beach. The water and sewer systems are serviced by the City of Pismo Beach. The Company was subject to state and federal regulations regarding the fiscal year 1996 reconstruction of an outflow structure that empties into Pismo Creek at the north boundary of the Resort. Because the Resort is within the wetlands area, the California Coastal Commission required permits for repair and construction to be reviewed by the following agencies: City of Pismo Beach, State Lands Commission, Regional Water Quality Board, State of California, California Department of Fish and Game, State Department of Parks and Recreation and the Army Corps of Engineers.
EMPLOYEES
As of September 30, 2021,2023, the Company employed approximately 6160 people, with 1312 of these on a part-time basis and 48 on a full-time basis. Due to the seasonal nature of the business, additional staff isare needed during peak periods and fewer during the off-season. Staffing levels during the fiscal year ranged from approximately 5760 employees to 6371 employees. Management considers its labor relations to be good.
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ADDITIONAL INFORMATION
The Company has remained conservative when considering rates and rate increases. As a result of experiencing increasing operational expenses and conducting a local comparative rate study, the Board of Directors (Board) voted to increase all monthly trailer storagetowing fees $6$10 per monthtow transfer effective JanuaryAugust 1, 2021.2022. The Board also voted at the September 2020 meeting to increase all nightly rates $5 per night effective MarchOctober 1, 2021.2023. It is anticipated the proposed rates will continue to market site usage at itstheir highest value and not negatively impact the Company's ability to capture an optimum market share.
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c. REPORTS TO SECURITY HOLDERS
Pismo Coast Village, Inc. files quarterly reports, an annual report, and periodic reports, providing the public with current information about the Company and its operations with the Securities and Exchange Commission.
The Company makes available on its website, www.pismocoastvillage.com, access to its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission.
The public may read and copy any materials filed with the Securities and Exchange Commission, on official business days during the hours of 10:00 a.m. to 3:00 p.m., at the SEC's Public Reference Room located at 100 F Street, N. E., Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC aton 1-800-SEC-0330. The SEC maintains an internet site (http://www.sec.gov) that contains reports, proxy statements, and other information that the Company files electronically with the SEC.
ITEM 1A. RISK FACTORS.
A number of factors, many of which are common to the lodging industry and beyond our control, could affect our business, including the following:
The leisure and travel business are seasonal and seasonal variations in revenue at our Resort can be expected to cause quarterly fluctuations in our revenue. Our revenue is generally highest in the third and fourth quarters. Quarterly revenue also may be harmed by events beyond our control, such as extreme weather conditions, terrorist attacks or alerts, contagious diseases, economic factors, and other considerations affecting travel. To the extent that cash flow from operations is insufficient during any quarter due to temporary or seasonal fluctuations in revenue, we have to rely on our short-term line of credit for operations. Recent events beyond our control, including an economic slowdown and extreme weather conditions 2Q2023, harmed the operating performance of the Central Coast leisure industry generally. If these or similar events occur again, our operating and financial results may be harmed by declines in average daily rates or occupancy.
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Carrying our outstanding debt may harm our business and financial results by:
Our Resort has a need for renovations and potentially significant capital expenditures in connection with improvements, and the costs of such renovations or improvements may exceed our expectations.
Occupancy and the rates, we are able to charge are often affected by the maintenance and capital improvements at a resort, especially in the event that the maintenance of improvements is not completed on schedule, or if the improvements result in the closure of the General Store or a significant number of sites. The costs of necessary capital expenditure could harm our financial condition and reduce amounts available for operations. These capital improvements may also give rise to additional risks including:
We rely on our executive officers and management team, the loss of whom could significantly harm our business.
On July 15, 2022, Ms. Lesley Marr began her career with Pismo Coast Village, Inc. as General Manager, and assumed full responsibility in that position on November 8, 2022. Our continued success depends, to a significant extent, on the efforts and abilities of our General Manager, Lesley Marr. Ms. Marr is important to our business and strategy and to the extent that were she to depart and is not replaced with an experienced substitute, Ms. Marr’s departure could harm our operations, financial condition, and operating results.
Uninsured and underinsured losses could harm our financial condition, and the results of operations.
In the event of a catastrophic loss, our insurance coverage may not be sufficient to cover the full current market value or replacement cost of our lost properties. Should an uninsured loss or a loss in excess of insured limits occur, we could lose all or a portion of the capital we have invested in the Resort, as well as the anticipated future revenue from the Resort. In that event, we might nevertheless remain obligated for any notes payable or other financial obligations related to the property. Inflation, changes in building codes and ordinances, environmental considerations and other factors might also keep us from using insurance proceeds to replace or renovate the Resort after it has been damaged or destroyed. Under these circumstances, the insurance proceeds we receive might be inadequate to restore our economic position on the damaged or destroyed property.
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ITEM 1B. REMOVED AND RESERVED.
ITEM 1C. CYBERSECURITY.
Disclosure of cybersecurity risk, management, & strategy
CompuData Supports Pismo Coast Village through their Managed IT Services. This is done through patch management, a managed Network, Managed Security, and Managed 24/7 support. Pismo Coast Village has a comprehensive risk management process that all nodes on the network are set to follow. All external Vendors are SOC II compliant. Our users access all applications utilizing a two-factor authentication method at the Domain level and SSO for third Party applications.
Pismo Coast Village has not had a material or data breach. Our strategy is to mitigate risks preventatively. The is implemented through best-in-class cybersecurity strategies preventative measures carried out by our vendor CompuData. Our identifiable risk areas are twofold: First within accounting and second, within taking payments. Our accounting department is hosted on a cloud system utilizing SSL for access and encryption. Our Managed Services company, CompuData, manages risk and preventative cyber security to that server. Within our taking of payments, we are fully PCI compliant within our payment processing service, Clover. No Credit card information is stored or transferred outside of that system.
We engage a third-party Vendor as mentioned above, CompuData. Our vendors are whitelisted and are SOC II certified. Our Whitelisted Vendor applications are Newbook, Sage, Clover, and Office 365.
ITEM 2. PROPERTIESPROPERTIES.
The Company's principal asset consists of the Resort, which is located at 165 South Dolliver Street in Pismo Beach, California. The Resort is built on a 26-acre site and includes 400 campsites with full hookups and nearby restrooms with showers and common facilities, such as a video arcade, recreation hall, restaurant, general store, swimming pool, laundromat, and three playgrounds.
In 1980, the Company purchased a 2.1-acre parcel of real property located at 2250 22nd Street, Oceano, California, at a price of $66,564. The property is being used by the Company as a storage facility for recreational vehicles. The storage capacity of this lot is approximately 121 units. On October 20, 2014, the Company entered into a long-term lease with Verizon Wireless for the installation of a cell tower. The lease term is for five (5) years with up to four (4) additional five (5) year terms unless the lessee terminates the lease at the end of the current term.
In 1981, the Company exercised an option and purchased a 3.3-acre parcel located at 424 South Dolliver Street, Pismo Beach, California, at a price of $300,000. The property, which previously had been leased by the Company, is used primarily as a recreational vehicle storage yard. The storage capacity of this lot is approximately 120 units. On June 6, 2016, the Company entered into a long-term lease with Verizon Wireless for the installation of a cell tower. The lease term is for five (5) years with up to four (4) additional five (5) year terms unless the lessee terminates the lease at the end of the current term.
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In 1988, the Company purchased approximately 0.6 acres of property at 180 South Dolliver Street, Pismo Beach, California, across the street from the main property, consisting of a large building with a storefront and one large maintenance bay in the rear. Also, on the property is a smaller garage-type building with three parking stalls. TheIn April 2023, the Company enlarged its recreational vehicle repair operation, added RV storage for approximately eleven units and developed the storefrontentered into an RV parts store. The property was purchased for $345,000, of which $300,000 was financed and paid in full during fiscal year 1997.
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a long-term single tenant gross lease with Trailer Hitch RV. On December 31, 1998, the Company closed escrow on a parcel of property located at 1295 Sand Dollar Avenue, Oceano, California, to be developed as an additional RV storage facility. The 5.5-acre property is located adjacent to existing Company RV storage. On October 14, 1999, construction was completed, and the Company received County approval to occupy the premises. The property was purchased for $495,000, of which $395,000 was financed and paid in full in July 2000. Development cost amounted to $195,723 and was allocated from operational cash flow. StorageThe storage capacity for this property is approximately 408 units and is currently full.
On February 28, 2003, the Company closed escrow on a parcel of property to be developed as an additional RV storage facility. The 4.7-acre property is located on Fountain Avenue in Oceano, California, and was purchased for $650,000, of which $500,000 was financed. The note on this property was paid off in September 2005. The construction permit granted by the County of San Luis Obispo was contingent upon permit approval by the California Coastal Commission. In January 2006, the Commission denied the permit based on wetland conditions. The property is currently being considered for another use.use or possibly liquidation.
Due to the continued demand for RV storage and the denial of the aforementioned permit, the Board of Directors elected to purchase additional property. On January 11, 2006, the Company closed escrow on a six-acre property located at 974 Sheridan Road, Arroyo Grande, California, previously developed as an RV storage facility. The purchase price was $2.1 million and included approximately 80 existing storage customers. This property had been permitted and developed the previous year and is considered in good condition with a capacity of approximately 229 units.
On April 6, 2006, the Company purchased the 2.2-acre property located at 2030 Front Street in Oceano, California, that it previously rented from Union Pacific Railroad for RV storage. The purchase price was $925,000 and the condition is considered good. The lot is operating at full capacity with 181 units.
On May 9, 2008, the Company closed escrow on a 19.55-acre property located at 2180 Arriba Place in Arroyo Grande, California, to be developed for RV storage. The purchase price was $3.1 million for the undeveloped land. The Company received a development permit through the County of San Luis Obispo Planning Commission. The development was completed in May 2010, and the storage capacity is expected to be approximately 900 units. On January 21, 2013, the Company entered into a long-term lease with Verizon Wireless for the installation of a cell tower. The lease term is for five (5) years with up to four (4) additional five (5) year terms unless the lessee terminates the lease at the end of the current term.
On May 20, 2015, the Company closed escrow on a one-acre property located at 2096 Nipomo Street in Oceano, California, to be developed as an RV Repair and Service facility. The purchase price was $425,000 and required the demolition of a two-story residence. The Company successfully expanded the usable property area by seeking road abandonment. On September 1, 2017, the Company received a Minor Use Permit with conditions from San Luis Obispo County. Construction was completed and the Certificate of Occupancy was received from the County of San Luis Obispo in March of 2021. On April 16, 2023, the Company entered into a long-term single tenant gross lease with Trailer Hitch RV.
On April 19, 2023, the Company closed escrow on a 19.55-acre property located at 255 N. Oak Glen Avenue in Nipomo, California, to be developed for RV storage. The purchase price was $1.2 million for the undeveloped land and was a cash purchase with no additional encumbrances to the Corporate. On April 1, 2023, the Company entered into a long-term lease with OUTFRONT Media for the existing billboard. The lease term is for ten (10) years.
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There is no deferred maintenance on any of the Resort's facilities. The Company's facilities are in good condition and adequate to meet the needs of the shareholder users as well as the public users. The Company continues to develop sufficient revenue from general public sites sales to support a continued positive maintenance program and to meet the demands of shareholders use of free sites.
Management considers the Company's insurance policies offer adequate coverage for risk and liability exposure.
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1. TRAILER STORAGE LEASED YARDS
In 1986, the Company leased a parcel of land 100 feet wide by 960 feet long, located at 2030 Front Street in Oceano, California, from the Union Pacific Railroad Corporation. The property is being used by the Company as a storage facility for recreational vehicles. Capital improvements in the amount of $40,000 were made to this property, which provides storage for approximately 180 units. On July 29, 2005, Union Pacific Railroad Corporation sold the property to the Weyrick Family Trust, who, after entering into a five-year lease, agreed to sell the property to the Company for $925,000. This transaction was completed April 6, 2006.
Associated with the previously mentioned property, and included within the fenced storage perimeter, is the lease of a ten-foot by 960-foot section belonging to Union Pacific Railroad. This lease also allows for the Company's fence to encroach upon the lessor's property. This annual lease is currently $7,379, with a 3% automatic annual increase.
In 1991, the Company developed a lease for a five-acre RV storage lot at the Oceano Airport clear zone as storage for approximately 310 RVs. This lot, which is located at 1909 Delta Lane in Oceano, was developed to replace a 100-unit storage lot that was closed when the lease was not renewed. Construction was completed in January 1992 and capital improvements in the amount of $330,768 were made to this property of which $300,000 was financed and paid in full during fiscal year 1997. The original lease on the storage lot was for five years and the Company executed a third five-year option with the County of San Luis Obispo that expired December 31, 2006. In response to the Company's request for another five-year extension, the County has answered that, until the Oceano Airport Master Plan is updated, the lease will be a month-to-month holdover.holdover at $3,575 monthly.
On June 2, 2020, the San Luis Obispo County Board of Supervisors voted to approve a lease with the Company following the completion of the Oceano Drainage project. The initial lease term is for two years and may be extended for four additional and successive two-year terms. MonthlyThe lease was extended to June of 2022. The monthly lease is set at $3,737currently $3,924 with an annual adjustment based on the Consumer Price Index published in July.
The Resort leases out areas to other companies to ensure that the best service and equipment are available for guest use or creates cash flow for the Company. These areas are leased from the Company pursuant to the herein belowterms described in the leases.
1. RECREATIONAL ARCADE AGREEMENT WITH COIN AMUSEMENTS, INC.
This agreement is dated November 1, 2021, and pursuant to this agreement, the Company granted Coin Amusements, Inc. the concession to operate various coin-operated game units at the Resort. The one-year term expires on October 31, 2022,2023, and continued renewal is expected without significant impact.
2. WASH MULTIFAMILY LAUNDRY SYSTEMS, GOLETA, CA
The seven-year lease that expired October 31, 2016,2013, was renewed for another seventen years effective September 1, 2016. The lease grants Wash Multifamily Laundry Systems (“Wash”) the right to place and service coin-operated laundry machines on the Resort. The agreement provides that 70% of the Lessee's gross income be paid to the Company as rent. On September 8, 2016, Wash replaced allwill replace 18 washers and 18 dryers with new equipment. Continued renewal is expected without significant impact.equipment prior to Q3.
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3. PISMO COAST INVESTMENTS
The Company renewed a lease agreement with Ms. Jeanne Sousa, a California Corporations Licensed Broker, for the lease of a 200-square foot building at the Resort from which she conducts sales activities in the Company's stock. On November 8, 2019,11, 2022, the lease was renewed commencing January 1, 20202023, and terminating December 31, 2022. Continued renewal is expected without significant impact.2025. Termination or cancellation may be made by either Lessor or Lessee by giving the other party sixty (60) days written notice.
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4. VERIZON WIRELESS
The Company entered into a lease with GTE Mobilnet of Santa Barbara Limited Partnership, d/b/a Verizon Wireless, for a 42-foot by 37-foot portion of the RV storage lot located at 2180 Arriba Place, Arroyo Grande, California, for the construction and operation of a cell tower communications facility. The term of the lease is for five years commencing on January 21, 2013. On June 1, 2020, an amendment to the agreement was signed by the Company and Airtouch Cellular d/b/a Verizon Wireless. The amendment set the rent to $2000 per month with an annual increase of 2%. The amendment also stipulated six renewable five-year termsterms.
On October 20, 2014, the Company entered into a second lease with GTE Mobilnet of Santa Barbara Limited Partnership, d/b/a Verizon Wireless, for a 40-foot by 40-foot portion of the RV storage lot located at 2250 22nd Street, Oceano, California, for the construction and operation of a cell tower communications facility. The term of the lease is for five years commencing on October 20, 2014, and ending on October 19, 2019. Continued renewal is expected without significant impact. The Lessee, upon the annual anniversary date of the agreement, may terminate provided that three (3) months prior notice is given to the Lessor.
On January 14, 2016, the Company entered into a third lease with GTE Mobilnet of Santa Barbara Limited Partnership, d/b/a Verizon Wireless, for the placement of a 22-foot tall22-foot-tall flagpole cell tower at 165 South Dolliver, Pismo Beach, California. The lease includes space for the flagpole and equipment enclosure, conduits, and right of way. The term of the lease is for five years commencing on January 14, 2016, and ending on January 13, 2021. Continued renewal is expected without significant impact. The Lessee, upon the annual anniversary date of the agreement, may terminate provided that three (3) months prior notice is given to the Lessor.
On June 6, 2016, the Company entered into a fourth lease with GTE Mobilnet of Santa Barbara Limited Partnership, d/b/a Verizon Wireless, for a 40-foot by 40-foot portion of the RV storage lot located at 424 South Dolliver Street, Pismo Beach, California, for the construction and operation of a cell tower communications facility. The term of the lease is for five years commencing on June 6, 2016, and ending on June 5, 2021. Continued renewal is expected without significant impact. The Lessee, upon the annual anniversary date of the agreement, may terminate provided that three (3) months prior notice is given to the Lessor.
5. ROCK AND ROLL DINER OF OCEANO INC. d/b/a PISMO COAST VILLAGE GRILL
The Company entered into a lease with Mr. Marios Pouyioukkas, owner/operator of Rock and Roll Diner of Oceano Inc., for the lease of a 708-square foot space at the Resort from which the concessionaire operates the restaurant facilities as an independent food service operation. The term of the initial lease was from June 18, 2012, until December 31, 2013. The lease was renewed November 1, 2019, for a three-year period beginning January 1, 2020, and will expireexpiring December 31, 2022. Continued renewal is expected without significant impact.2023. This lease has been renewed for one-year terms for the years 2023 and 2024. Termination or cancellation may be made by either Lessor or Lessee by giving the other party thirty (30) days written notice.
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ITEM 3. LEGAL PROCEEDINGS
No pending legal proceedings against the Company other than routine litigation incidental to the business.
ITEM 4. (REMOVED AND RESERVED).
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES.
a. MARKET INFORMATION
There is no market for the Company's common stock, and there are only limited or sporadic transactions in its stock. Ms. Jeanne E. Sousa, a licensed broker/dealer, handled sales of the Company’s shares as Pismo Coast Investments. The last transaction the Company is aware of occurred August 10, 2021,September 28, 2023, at a price of $44,000$58,000 for one share conveyed. This price was used for the computation of aggregate market value of Company stock on page 2 of this Report.
b. HOLDERS
The approximate number of holders of the Company's common stock on September 30, 2021,2023, was 1,506.1,495.
c. DIVIDENDS
The Company has paid no dividends since it was organized in 1975, and although there is no legal restriction impairing the right of the Company to pay dividends, the Company does not intend to pay dividends in the foreseeable future. The Company selects to invest its available working capital to enhance the facilities at the Resort or develop properties supporting the Resort operations.
d. SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The Company does not currently have securities authorized for issuance under equity compensation plans.
e. RECENT SALES OF UNREGISTERED SECURITIES: USE OF PROCEEDS FROM REGISTERED SECURITIES
The Company does not have sales of unregistered securities.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable to smaller reporting companies. See Management’s Discussion and Analysis.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following analysis discusses the Company's financial condition as of September 30, 2021,2023, compared with September 30, 2020.2022. The discussion should be read in conjunction with the audited financial statement and the related notes to the financial statement and the other financial information included elsewhere in this Form 10-K.
Certain information included herein contains statements that may be considered forward-looking statements, such as statements relating to anticipated expenses, capital spending and financing sources. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made herein. These risks and uncertainties include, but are not limited to, those relating to competitive industry conditions, California tourism and weather conditions, dependence on existing management, leverage and debt service, the regulation of the recreational vehicle industry, domestic or global economic conditions, and changes in federal or state tax laws or the administration of such laws.
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OVERVIEW
Pismo Coast Village, Inc. operates as a 400-space recreational vehicle resort. The Company includes additional business operations to provide its users with athe full range of services expected of a recreational resort. These services include a store, video arcade, laundromat, recreational vehicle repair, RV parts shop and an RV storage operation.
The Company is authorized to issue 1,800 shares of one class, all with equal voting rights and all being without par value. Transfers of shares are restricted by Company bylaws. One such restriction is that transferees must acquire shares with intent to hold the same for the purpose of enjoying camping rights and other benefits to which a shareholder is entitled. Each share of stock is intended to provide the shareholder with the opportunity for 45 nights of free site use per year. However, if the Company is unable to generate sufficient funds from the public, the Company may be required to charge shareholders for services.
Management is charged with the task of developing sufficient funds to operate the Resort through site sales to general public guests by allocating a minimum of 175 sites to general public use and allocating a maximum of 225 sites for shareholder free use. The other service centers are expected to generate sufficient revenue to support themselves and/or produce a profit.
The Company continues to promote and depend upon recreational vehicle camping as the primary source of revenue. The rental of campsites to the general public provides income to cover expenses, complete capital improvements, and allow shareholders up to 45 free nights camping annually. Additional revenues come from RV storage and spotting, RV service and repair, on-site convenience store,stores, and other ancillary activities such as laundromat, arcade, and bike rental.
On March 11, 2020, the World Health Organization declared the outbreak of a coronavirus (COVID-19) a pandemic. In response, the County of San Luis Obispo followed by the Governor of California issued a Shelter at Home order effective March 19, 2020, requiring certain non-essential businesses to temporarily close to the public. The Company began canceling reservations on March 19 and closed the park on March 23. The resort remained closed until May 22, 2020 at which time the County of San Luis Obispo permitted occupancy to fifty percent. On June 5, 2020, the County of San Luis Obispo allowed lodging businesses to operate at full capacity with restrictions on amenities.
The RVing public actively seeks accommodations on the Central Coast despite volatile fuel prices and personal financial uncertainties. RVing offers an affordable outdoor recreational experience, and the Company provides quality facilities and services in a highly popular location. Site occupancy for fiscal year 2020 was down 18.0%, following the previous year’s occupancy, primarily dueAccording to the impacts of COVID-19. Revenues from ancillary operations,industry reports such as the General Store, RV service, laundromat, arcade,2023 KOA Camping Report published May 12, 2023, it indicates that camping continues to be robust and bike rental, were significantly decreased dueresilient, even in economic downturns. Camping is increasingly popular, with more people than ever viewing it as a way to the COVID-19 closurerelax, unwind, and ongoing impact.connect with family, friends, and nature.
FollowingCamping is an important leisure activity for many people. This may be because, even in an economic downturn, camping remains economically accessible for most individuals. Faced with a failing economic climate, 38% of campers are willing to give up other vacation activities to go camping. 80% of survey respondents from the full resort reopening on June 5, 2020, the company experienced multiple months of record occupancy, including fiscal year 2021 reflecting record occupancy. This occupancy has directly impacted the increase of revenue in all segments of the company.2023 KOA Camping Report said they would give up other leisure travel options to camp more.
Most (56%) RVers plan to RV camp the same amount or more in the event of an economic downturn. 33% of RVers say they’ll use their RVs more, and 23% said they would use their RVs the same amount as usual. This is significant and helps demonstrate the economic resilience of outdoor hospitality.
RV storage continuesand towing continue to providebe a significant portionprimary source of revenue for the Company’s revenue.Company. In April 2023, the company purchased 4.42 acres to develop a 150 site self-storage lot due to having a 300+ waitlist for new clients. RV storage provides numerous benefits to the customer including: no stress of towing, no need to own a tow vehicle, use of RV by multiple family members, and convenience. RV storage continues to have a strong demand for both self and tow storage.
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Ongoing investment in Resortresort improvements has assured Resort guests and shareholders a top quality, up-to-date facility. This quality and pride of ownership was evident whenas the National Association of RV Parksresort continues to maintain high standards and Campgrounds Park of the Year was awarded to the Resort for 2007 - 2008. In addition, in 2008 the Resort was the only industry rated "A" park in California for customer satisfaction based on internet visitor surveys collected nationallyagain, has been recognized with quality ratings by Guest Reviews.Good Sam. The Resort also received the Guest Reviews “A” rated park recognition for the years 2011, 2012, 2013, 2014, 2015, 2016 and one of 30 parks nationally in 2017.
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The Company'sCompany’s commitment to quality, value, and enjoyment is underscored by the business'business’s success due to word of mouth and referrals from guests. In addition, investment for online marketing, social media content, ads in the leading national directories,directory, and trade magazine advertising formulates most of the business-marketing plan.
CURRENT OPERATING PLANS
The Board of Directors continues its previously established policy by adopting a stringent conservative budget for fiscal year 2022,2024, which projects a positive cash flow of approximately $2,757,241$1,205,030 from operations. This projection is based on paid site occupancy reflecting similar occupancy as experienced in fiscal year 2019, as fiscal year 2020 occupancy was skewed due to the COVID-19 closure.2023. The 20222024 budget plan includes a $5 per night increase for all site rentals effective JanuaryOctober 1, 2022.2023. While the Company projects a positive cash flow, this cannot be assured for fiscal year 2022.2024.
FINANCIAL CONDITION
The business of the Company is seasonal and is concentrated on prime days of the year which are defined as follows: President's Day weekend, Easter week, Memorial Day weekend, summer vacation months, Labor Day weekend, Thanksgiving week, and Christmas/New Year’s week. There are no known trends that affect business or affect revenue.
The Company develops its income from two sources: (a) Resort Operations, consisting of revenues generated from RV site rentals, from RV storage space operations, and lease revenues from the laundromat, arcade, restaurant operations and property leases for cell tower communications facilities by third party lessees; and (b) Retail Operations, consisting of revenues from general store operations and from RV parts and service operations.recreation.
With the possibility of requiring additional funds for planned capital improvements and the winter season, the Company maintains a $500,000 Line of Credit to ensure funds will be available if required. In anticipation of future large projects, the Board of Directors has instructed management to build operational cash balances. The Company has no other liabilities to creditors other than current accounts payable arising from its normal day-to-day operations and advance Resort rental reservation deposits, none of which are in arrears.
LIQUIDITY
The Company's policy is to use its ability to generate operating cash flow to meet its expected future needs for internal growth. The Company has continued to maintain sufficient cash so as to not require the use of a short-term line of credit during the off-season period, and the Company expects to be able to do so (although no assurance of continued cash flow can be given).
Net cash provided by operating activities totaled $3,001,4051,188,155 in 2021,2023, compared to $1,424,339$1,710,003 for the 20202022 fiscal year. Reduction in Net Cash provided by operating activities in 2023 of $521,848 can largely be attributed to the closing of the PCV RV Service Shop in April 2023. RV Service Shop income for 2023 was $255,424 versus $632,983 in 2022.
During fiscal year 2021,2023, capital investment of $169,180$1,412,193 was made that included purchasing 19.55-acre property located at 255 N. Oak Glen Avenue in Nipomo, California, to be developed for RV storage. In addition to the purchase of a new street sweeper, a garbage compactor container,lowboy tilt-trailer to haul equipment, redesign, upgrade for Square common area including patio furniture, electrical and final construction on the RV shop. During fiscal year 2020, capital investment of $637,041 was made that included construction on the new RV service facility,lighting. Two golf carts were purchased for maintenance and a new Hino trailer tow truck.one for Security. These projects were completed on timetime. During fiscal year 2022, capital investment of $247,870 was made that included Wi-Fi upgrade, surveillance cameras, new truck for security, new truck for RV Service, new backhoe, new outfall pumps and within budget.electrical panel, pool heater, and two golf carts.
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Fiscal year 2021's2023's current ratio (current assets to current liabilities) of 3.064.12 increased from fiscal year 2019's current2022’s ratio of 2.60.3.82. The increase in the current ratio is the result of increased cash and cash equivalents.reduced accrued liabilities as well as reduced Rental deposits.
Working Capital increased to $6,377,259$8,511,851 at the end of fiscal year 2021,2023, compared to $4,288,675$8,499,383 at the end of fiscal year 2020.2022. This increase is primarily a result of increased cash and cash equivalents as a result of increased incomeinterest received from Resort operations and postponement of some capital projects.investments.
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CAPITAL RESOURCES AND PLANNED EXPENDITURES
The Company plans capital expenditures up to $223,000$1,611,000 in fiscal year 20222024 to further enhance the Resort facilities and services. This would include upgradingremodeling the resort WiFi system, installing six surveillanceGeneral Store, Mini Golf Course and Guest Services Building, development of L Lot in Nipomo for RV Storage and environmental studies for Z Lot. In addition to replacement of all restroom and laundry water heaters and adding security cameras onfor Lots of B and E. The Board of Directors continues to evaluate the resort, replacing two older pickups,property Solar project with an initial cost of $4M before tax credits and replacing a tractor.rebates. Funding for these projects is expected to come from normal operating cash flows and, if necessary, be supplemented with outside financing. These capital expenditures are expected to increase the Resort's value to its shareholders and the general public.
RESULTS OF OPERATIONS
OCCUPANCY BY SEGMENT | |||||
2023 | 2022 | ||||
OCCUPANCY | |||||
% of Shareholder Site Use | 29.6% | 28.0% | |||
% of Paid Site Rental | 70.4% | 71.6% | |||
% Total Site Occupancy | 77.4% | 85.7% | |||
% of Storage Rental | 99.0% | 99.0% | |||
Resort Operations | $ | 8,728,725 | $ | 9,021,458 | |
Retail Operations | $ | 955,343 | $ | 1,315,075 | |
Operating Lease Income | $ | 66,559 | $ | - |
YEAR-TO-YEAR COMPARISON
Revenue: Operating revenue, interest and other income increased above the prior fiscal year ended September 30, 2020, by $2,379,128, or 32.0%.
REVENUE BY SEGMENT | ||||||
2021 | 2020 | |||||
OCCUPANCY | ||||||
% of Shareholder Site Use | 23.8% | 20.4% | ||||
% of Paid Site Rental | 65.4% | 47.1% | ||||
% Total Site Occupancy | 87.5% | 67.7% | ||||
% of Storage Rental | 99.0% | 99.0% | ||||
Average Paid Site | $ | 67.27 | $ | 64.8 | ||
RESORT OPERATIONS | ||||||
Site Rental | $ | 6,421,329 | $ | 4,469,703 | ||
Storage Operations | 1,895,295 | 1,788,939 | ||||
Support Operations |
| 188,275 |
| 121,726 | ||
Total | 8,504,899 | 6,380,368 | ||||
RETAIL OPERATIONS | ||||||
Store | 705,779 | 554,899 | ||||
RV Repair/Parts Store |
| 600,228 |
| 495,488 | ||
Total | 1,306,007 | 1,050,387 | ||||
INTEREST INCOME |
| 981 |
| 2,004 | ||
TOTAL REVENUE | $ | 9,811,887 | $ | 7,432,759 |
Occupancy rates on the previous table are calculated based on the quantity occupied as compared to the total sites available for occupancy (i.e., total occupied to number of total available). Average paid site is based on site revenue and paid sites. Resort support operations include revenues received from the arcade, laundromat, recreational activities, and other less significant sources.
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20212023 COMPARED WITH 20202022
Resort operations income increased $2,124,531, or 33.3%,decreased $292,733 primarily due to COVID-19significant rains in the months of late Dec 2022, and the resort campsites being closed from March 23, 2020 until May 22, 2020. Paid site revenue increased $1,951,626, or 43.7%, due to an increase of 26,372, or 38.2% in paid site night occupancy. Due to the temporary resort closure in 2020, RV Storage and RV Spotting revenue increased $111,526, or 6.5%, for fiscal year ended September 30, 2021.
Retailfirst quarter 2023. The retail operations income increased $255,620, or 24.3%,decreased $359,732 primarily due to the impact of COVID-19 on all resort retail segments during fiscal year 2020. While the RV Service operation was able to remain open, the General Store on the resort was closed from March 23, 2020 until June 5, 2020. The RV Service department revenue increased $104,740, or 21.1% above the previous year.closing and liquidation in April 2023. The General Store revenuewas impacted by a 1Q reduction in occupancy, increased $150,879, or 27.2% above the previous year.costs of goods and staffing challenges. In an effort to maximize revenue, management continues to stock more appropriate items, more effectively merchandise,effective merchandising, margin reviews and pay greater attention to customer service. In addition, management has actively promoted the RV service and retail operation locally compared to previous years.
Interest/Dividend Income decreased $1,023, or 51.0%, belowincreased $128,618 above the previous year. This increase was primarily due to interest income from treasury bills purchased in 2023. Interest Expense decreasedincreased to $13,545($14,532) in 20212023 compared to $17,413($11,849) the previous year.
The Company also received an Employee Retention Credit payment of $245,280 in June of 2022 which was not available in 2023.
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Operating Expenses increased $581,865, or 11.1%, as a result of labor, small equipment, credit card service expense, land lease, utilities including water/sewer, gas, electricity, and garbage, and vehicle expense. During the 2020 COVID-19 closure, 50% of the staff continued working. During this time many expenses were reduced or managed accordingly.
Maintaining a conservative approach, most expense items were managed well below plan and in many categories below the previous year. The Board of Directors has directed management$814,852 due to continue maintenance projects as needed to provide a first-class resort for campers using recreational vehicles.
Income before provision for income tax of $3,470,535, a 172.3% increase above last year, is reflective of increased income from operations.
Net income of $2,413,335 for fiscal year 2021 shows an increase of $1,534,479, or 174.6%, above a net income of $878,856 in 2020. This increase in net income is a reflection of the increase in the income before provision for income tax.
INFLATION has not had a significant impact on our profit position. The Company has increased rates, which have more than compensated for the rate ofemployee compensation taxes, benefits and insurances expenses, Stockholder expenses due to Carol Lyons expenses, non-capitalized property improvements, extraordinary outside consultant expenses, and maintenance supplies and contract repair effected by inflation.
FUTURE OPERATING RESULTS couldThe Prior Management Team focused on keeping expenses under budget to maximum net profit. Choosing to be unfavorably impactedreactionary in regard to maintenance, internal operating systems and equipment needs had a definite effect on the extent that changing prices result in lower discretionary income2022-2023 operating expenditures. The Operations Team is working on the development of a preventative maintenance plan, as well as a systems and equipment road map. A proactive approach will allow us to better control our budget.
Inflation has had an impact on our profit position for customers and/or increased transportation costs to the Resort. In addition, increasing prices affect2023. Inflation has affected operations and liquidity by raising the replacement cost of property and equipment.
FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS:
A number of factors, many of which are commonThe Company has implemented minor rate increases to the lodging industry and beyond our control, could affect our business, including the following:
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The leisure and travel business is seasonal and seasonal variations in revenue at our Resort can be expected to cause quarterly fluctuations in our revenue.
Our revenue is generally highest in the third and fourth quarters. Quarterly revenue also may be harmed by events beyond our control, such as extreme weather conditions, terrorist attacks or alerts, contagious diseases, economic factors, and other considerations affecting travel. To the extent that cash flow from operations is insufficient during any quarter due to temporary or seasonal fluctuations in revenue, we have to rely on our short-term line of credit for operations.
In the recent past, events beyond our control, including an economic slowdown and terrorism, harmed the operating performance of the leisure industry generally, and if these or similar events occur again, our operating and financial results may be harmed by declines in average daily rates or occupancy.
Carrying our outstanding debt may harm our business and financial results by:
Our Resort has a need for ongoing renovations and potentially significant capital expenditures in connection with improvements, and the costs of such renovations or improvements may exceed our expectations.
Occupancy and the rates we are able to charge are often affected by the maintenance and capital improvements at a resort, especially in the event that the maintenance of improvementsStorage customers which is not completed on schedule, or if the improvements result in the closure of the General Store or a significant number of sites. The costs of capital expenditures we need to make could harm our financial condition and reduce amounts available for operations. These capital improvements may also give rise to additional risks including:currently below market.
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We rely on our executive officers, the loss of whom could significantly harm our business.
Our continued success will depend, to a significant extent, on the efforts and abilities of our C.E.O. and General Manager, Jay Jamison. Mr. Jamison is important to our business and strategy and to the extent that were he to depart and is not replaced with an experienced substitute, Mr. Jamison's departure could harm our operations, financial condition and operating results.
Uninsured and underinsured losses could harm our financial condition, and results of operations.
Various types of catastrophic issues, such as losses due to wars, terrorist acts, earthquakes, floods, pollution or environmental matters, generally are either uninsurable or not economically insurable, or may be subject to insurance coverage limitations, such as large deductibles or co-payments. Our Resort is located on the coast of California, which has been historically at greater risk to certain acts of nature (such as severe storms, fires and earthquakes).
In the event of a catastrophic loss, our insurance coverage may not be sufficient to cover the full current market value or replacement cost of our lost properties. Should an uninsured loss or a loss in excess of insured limits occur, we could lose all or a portion of the capital we have invested in the Resort, as well as the anticipated future revenue from the Resort. In that event, we might nevertheless remain obligated for any notes payable or other financial obligations related to the property. Inflation, changes in building codes and ordinances, environmental considerations and other factors might also keep us from using insurance proceeds to replace or renovate the Resort after it has been damaged or destroyed. Under these circumstances, the insurance proceeds we receive might be inadequate to restore our economic position on the damaged or destroyed property.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Pismo Coast Village, Inc. is responsible for the information and representations contained in this report. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which we considered appropriate in the circumstances and include some amounts based on our best estimates and judgments. Other financial information in this report is consistent with these financial statements.
Our accounting systems include controls designed to reasonably assure assets are safeguarded from unauthorized use or disposition and provide for the preparation of financial statements in conformity with accounting principles generally accepted in the United States of America. These systems are supplementedcurrently under review by the selectionManagement and Interim Audit Chairperson. Additional training of qualified financialaccounting personnel and an organizational structure that providesrestructuring for appropriate segregationadded layers of duties.review are being considered.
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REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders
Pismo Coast Village, Inc.
165 South Dolliver Street
Pismo Beach, California
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Pismo Coast Village, Inc. (the Company) (a California corporation) as of September 30, 20212023, and 2020, and2022; the related statements of income, and comprehensive income, stockholders’ equity, and cash flows for each of the years in the two-year period ended September 30, 2021 and 2020,2023; and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 20212023, and 2020,2022, and the results of its operations and its cash flows for each of the years in the two-year period ended September 30, 2021,2023 and 2022, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the auditaudits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
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Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved ourare especially challenging, subjective, or involve complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
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Income Taxes
Management’s estimates of the deferred tax assets, liabilities, and provisions disclosed in Note 7 are based primarily on the differences between depreciation measurements on a tax basis versus GAAPaccounting principles generally accepted in the United States of America (GAAP) basis, and timing of vacation expense recognition and shareholder site usage. We evaluated the key factors and assumptions used to develop the estimates of income tax provisions in determining that they are reasonable in relation to the financial statements taken as a whole.
We identified the evaluation of the Company’s income tax provisions as a critical audit matter because the application of tax law and timing of recognition of income tax expense and benefits is complex and involves subjective judgement.judgment.
We have served as the Company’s auditor since 2005.
BROWN ARMSTRONG
ACCOUNTANCY CORPORATION
Auditor Firm ID: #237
Bakersfield, California
November 12, 2021December 13, 2023
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Pismo Coast Village, Inc.
Financial Statements
Years Ended September 30, 2023, and 2022
PISMO COAST VILLAGE, INC. BALANCE SHEET SEPTEMBER 30, 2021 AND 2020 | |||||
2021 | 2020 | ||||
Assets | |||||
Current assets | |||||
Cash and cash equivalents | $ | 9,226,456 | $ | 6,452,110 | |
Accounts receivable | 36,764 | 25,610 | |||
Inventories | 200,107 | 190,211 | |||
Prepaid income taxes | - | 271,200 | |||
Prepaid expenses |
| 16,657 |
| 22,086 | |
Total current assets | 9,479,984 | 6,961,217 | |||
Property and equipment | |||||
Net of accumulated depreciation and amortization |
| 15,262,544 |
| 15,537,195 | |
Total assets | $ | 24,742,528 | $ | 22,498,412 | |
Liabilities and Stockholders’ Equity | |||||
Current liabilities | |||||
Accounts payable and accrued liabilities | $ | 319,576 |
| 280,784 | |
Accrued salaries and vacation | 417,544 | 278,874 | |||
Rental deposits | 2,244,848 | 2,058,135 | |||
Income taxes payable | 60,000 | - | |||
Current portion of capital lease obligations |
| 60,757 |
| 54,749 | |
Total current liabilities | 3,102,725 | 2,672,542 | |||
Long-term liabilities | |||||
Deferred taxes | 443,300 | 423,100 | |||
PPP Loan Payable | - | 555,715 | |||
Capital lease obligations, net of current portion |
| 156,638 |
| 220,525 | |
Total liabilities |
| 3,702,663 |
| 3,871,882 | |
Stockholders’ equity | |||||
Common stock – 0 par value, 1,800 shares issued, | 5,569,268 | 5,569,268 | |||
Retained earnings |
| 15,470,597 |
| 13,057,262 | |
Total stockholders’ equity |
| 21,039,865 |
| 18,626,530 | |
Total liabilities and Stockholders’ Equity | $ | 24,742,528 | $ | 22,498,412 | |
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The accompanying notes are an integral part of these financial statements. |
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Table of Contents
2. Exhibits filed with this Form 10-K Report:
Exhibit No. | Description of Exhibit | |
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PISMO COAST VILLAGE, INC. STATEMENTS OF INCOME AND COMPREHENSIVE INCOME YEARS ENDED SEPTEMBER 30, 2021 AND 2020 | |||||
2021 | 2020 | ||||
Income | |||||
Resort operations | $ | 8,504,899 | $ | 6,380,368 | |
Retail operations |
| 1,306,007 |
| 1,050,387 | |
Total income |
| 9,810,906 |
| 7,430,755 | |
Costs and expenses | |||||
Operating expenses | 5,816,253 | 5,234,388 | |||
Cost of goods sold | 625,358 | 491,597 | |||
Depreciation |
| 443,831 |
| 414,805 | |
Total cost and expenses |
| 6,885,442 |
| 6,140,790 | |
Income from operations |
| 2,925,464 |
| 1,289,965 | |
Other income (expense) | |||||
Interest and dividend income | 981 | 2,004 | |||
Interest expense | (13,545) | (17,413) | |||
PPP loan forgiveness income |
| 557,635 |
| - | |
Total other income (expense) |
| 545,071 |
| (15,409) | |
Income before provision for income tax | 3,470,535 | 1,274,556 | |||
Provision for income tax |
| 1,057,200 |
| 395,700 | |
Net income |
| 2,413,335 |
| 878,856 | |
Net income per share | $ | 1,359.63 | $ | 495.13 | |
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Total comprehensive income per share | $ | 1,359.63 |
| $ | 495.13 |
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The accompanying notes are an integral part of these financial statements. |
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Pismo Coast Village, Inc. Balance Sheet September 30, 2023, and 2022 | |||||
2023 | 2022 | ||||
Assets | |||||
Current assets | |||||
Cash and cash equivalents | $ | 884,943 | $ | 1,019,465 | |
Cash Reserved for Capital Improvements | 8,407,996 | 9,566,367 | |||
Investments | 1,042,140 | - | |||
Accounts receivable | 55,528 | 49,115 | |||
Inventories | 120,901 | 216,842 | |||
Prepaid income taxes | 395,800 | 323,900 | |||
Prepaid expenses |
| 333,945 |
| 342,211 | |
Total current assets | 11,241,253 | 11,517,900 | |||
Other Assets | |||||
Property and equipment, net of accumulated |
| 16,011,915 |
| 15,031,100 | |
Total assets | $ | 27,253,168 | $ | 26,549,000 | |
Liabilities and Stockholders' Equity | |||||
Current liabilities | |||||
Accounts payable and accrued liabilities | $ | 246,491 | $ | 265,444 | |
Accrued salaries and vacation | 309,921 | 432,187 | |||
Rental deposits | 2,084,012 | 2,268,627 | |||
Building security deposits | 25,000 | - | |||
Current portion of finance lease obligations |
| 63,978 |
| 52,256 | |
Total current liabilities | 2,729,402 | 3,018,514 | |||
Long-term liabilities | |||||
Deferred taxes | $ | 439,400 | $ | 424,900 | |
Finance lease obligations, net of current portion |
| 59,885 |
| 104,382 | |
Total liabilities |
| 3,228,687 |
| 3,547,796 | |
Stockholders' equity | |||||
Common stock - no par value, 1,800 shares issued, | $ | 5,566,130 | $ | 5,566,130 | |
Retained earnings | 18,423,537 | 17,435,074 | |||
Accumulated other comprehensive income |
| 34,814 |
| - | |
Total stockholders' equity |
| 24,024,481 |
| 23,001,204 | |
Total liabilities and stockholders' equity | $ | 27,253,168 | $ | 26,549,000 | |
The accompanying notes are an integral part of these financial statements. |
19
PISMO COAST VILLAGE, INC. STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY YEARS ENDED SEPTEMBER 30, 2021 AND 2020 | |||||||||||||
Accumulated Other Comprehensive Income | |||||||||||||
Common Stock | Retained Earnings | ||||||||||||
Shares | Amount | Total | |||||||||||
Balance – September 30, 2018 | 1,775 | $ | 5,569,268 | $ | 10,700,173 | $ | 78,004 | $ | 16,347,445 | ||||
Net Income |
|
|
|
|
|
| 1,478,233 |
|
|
|
|
| 1,478,233 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain on investments |
|
|
| (78,004) |
| (78,004) | |||||||
Balance – September 30, 2019 | 1,775 | $ | 5,569,268 | $ | 12,178,406 | $ | - | $ | 17,747,674 | ||||
Net Income |
|
|
|
|
|
| 878,856 |
|
|
|
|
| 878,856 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain on investments |
|
|
| - |
| - | |||||||
Balance – September 30, 2020 | 1,775 | $ | 5,569,268 | $ | 13,057,262 | $ | - | $ | 18,626,530 | ||||
Net Income |
|
|
|
|
|
| 2,413,335 |
|
|
|
|
| 2,413,335 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain on investments |
|
|
| - |
| - | |||||||
Balance – September 30, 2021 | 1,775 | $ | 5,569,268 | $ | 15,470,597 | $ | - | $ | 21,039,865 | ||||
The accompanying notes are an integral part of these financial statements. |
20
PISMO COAST VILLAGE, INC. STATEMENT OF CASH FLOWS YEARS ENDED SEPTEMBER 30, 2021 AND 2020 | |||||
|
| ||||
| 2021 |
| 2020 | ||
Cash flows from operating activities | |||||
Net Income | $ | 2,413,335 | $ | 878,856 | |
Adjustments to reconcile net income to net | |||||
Depreciation and amortization | 443,831 | 414,805 | |||
PPP loan forgiveness income | (555,715) | - | |||
Accounts receivable | (11,154) | 24,802 | |||
Inventory | (9,896) | 1,035 | |||
Prepaid income taxes | 271,200 | (266,300) | |||
Prepaid expenses | 5,429 | 4,021 | |||
Accounts payable and accrued liabilities | 38,792 | 4,413 | |||
Accrued salaries and vacation | 138,670 | (81,036) | |||
Rental deposits | 186,713 | 465,443 | |||
Income taxes payable | 60,000 | - | |||
Deferred taxes |
| 20,200 | (21,700) | ||
Total adjustments | 588,070 |
| 545,483 | ||
Net cash provided by operating activities | 3,001,405 | 1,424,339 | |||
Cash flows from investing activities | |||||
Purchases of property and equipment | (169,180) | (637,041) | |||
Net cash used in investing activities | (169,180) | (637,041) | |||
Cash flows from financing activities | |||||
Proceeds from Loans | - | 555,715 | |||
Acquisition of capital lease assets | - | 81,669 | |||
Principal payments on capital lease obligations |
| (57,879) | (48,596) | ||
Net cash used in financing activities | (57,879) |
| 588,788 | ||
Net increase in cash and cash equivalents | 2,774,346 | 1,376,086 | |||
Cash and cash equivalents – beginning of year |
| 6,452,110 |
| 5,076,024 | |
Cash and cash equivalents – end of year | $ | 9,226,456 | $ | 6,452,110 | |
Schedule of payments of interest and taxes | |||||
Cash paid for income tax | $ | 705,768 | $ | 663,631 | |
Cash paid for interest | $ | 13,545 | $ | 17,413 | |
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements. |
|
|
|
|
Pismo Coast Village, Inc. | |||||
| |||||
2023 |
| 2022 | |||
Income | |||||
Resort operations | $ | 8,728,725 | $ | 9,021,458 | |
Retail operations | 955,343 | 1,315,075 | |||
Operating Lease Income |
| 66,559 |
| - | |
Total income |
| 9,750,627 |
| 10,336,533 | |
Costs and expenses | |||||
Operating expenses | $ | 7,552,851 | $ | 6,737,999 | |
Cost of goods sold | 544,989 | 639,434 | |||
Depreciation and amortization |
| 460,132 |
| 479,314 | |
Total costs and expenses |
| 8,557,972 |
| 7,856,747 | |
Income from operations | 1,192,655 | 2,479,786 | |||
Other income (expense) | |||||
Interest and dividend income | $ | 143,440 | $ | 14,822 | |
Interest expense | (14,532) | (11,849) | |||
Employee Retention Credit Income | - | 245,280 | |||
Gain (loss) on disposal of fixed assets |
| 9,500 |
| - | |
Total other income (expense) |
| 138,408 |
| 248,253 | |
Income before provision for income tax | 1,331,063 | 2,728,039 | |||
Provision for income tax |
| 342,600 |
| 724,700 | |
Net income | $ | 988,463 | $ | 2,003,339 | |
Net income per share | $ | 557.19 | $ | 1,129.28 | |
Total comprehensive income per share | $ | 557.19 | $ | 1,129.28 | |
The accompanying notes are an integral part of these financial statements. |
20
Pismo Coast Village, Inc.Statement of Changes in Stockholders’ Equity | |||||||||||||
| Common Stock |
| Retained Earnings |
| Accumulated Other Comprehensive Income |
|
Total | ||||||
|
|
|
| ||||||||||
Shares | Amount | ||||||||||||
Balance - September 30, 2020 | 1,775 | $ | 5,569,268 | $ | 13,057,262 | $ | - | $ | 18,626,530 | ||||
Net Income |
|
|
| $ | 2,413,335 |
|
| $ | 2,413,335 | ||||
Balance - September 30, 2021 | 1,775 | $ | 5,569,268 | $ | 15,470,597 | $ | - | $ | 21,039,865 | ||||
Net Income |
|
|
|
| $ | 2,003,339 |
|
| $ | 2,003,339 | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase of common stock | (1) |
| $ | (3,138) |
| $ | (38,862) |
|
|
|
| $ | (42,000) |
Balance - September 30, 2022 | 1,774 | $ | 5,566,130 | $ | 17,435,074 | $ | - | $ | 23,001,204 | ||||
Net Income | $ | 988,463 | $ | 988,463 | |||||||||
Other comprehensive income |
|
|
|
|
|
|
|
| $ | 34,814 | $ | 34,814 | |
Balance - September 30, 2023 | 1,774 | $ | 5,566,130 | $ | 18,423,537 | $ | 34,814 | $ | 24,024,481 | ||||
The accompanying notes are an integral part of these financial statements. |
21
Pismo Coast Village, Inc. | |||||
2023 | 2022 | ||||
Cash flows from operating activities | |||||
Net Income | $ | 988,463 | $ | 2,003,339 | |
Adjustments to reconcile net income to net | |||||
Depreciation and amortization | 460,132 | 479,314 | |||
Changes in operating assets and liabilities: | |||||
Accounts receivable | (6,413) | (12,351) | |||
Inventory | 95,941 | (16,735) | |||
Prepaid income taxes | (71,900) | (323,900) | |||
Prepaid expenses | 8,266 | (325,554) | |||
Accounts payable and accrued liabilities | (18,953) | (54,132) | |||
Accrued salaries and vacation | (122,266) | 14,643 | |||
Rental deposits | (184,615) | 23,779 | |||
Building security deposits | 25,000 | - | |||
Income taxes payable | - | (60,000) | |||
Long term deferred income taxes |
| 14,500 |
| (18,400) | |
Total adjustments |
| 199,692 |
| (293,336) | |
Net cash provided by operating activities |
| 1,188,155 |
| 1,710,003 | |
Cash flows from investing activities | |||||
Capital expenditures | (1,412,193) | - | |||
Purchase of Investments |
| (1,007,326) | (247,870) | ||
Net cash used investing activities |
| (2,419,519) |
| (247,870) | |
Cash flows from financing activities | |||||
Repurchase of capital stock | - | (42,000) | |||
Principal payments on finance lease obligations |
| (61,529) |
| (60,757) | |
Net cash used in financing activities |
| (61,529) |
| (102,757) | |
Net (decrease)increase in cash and cash equivalents | (1,292,893) | 1,359,376 | |||
Cash and cash equivalents - beginning of year |
| 10,585,832 |
| 9,226,456 | |
Cash and cash equivalent - end of year |
| 9,292,939 |
| 10,585,832 | |
|
|
|
|
|
|
Reconciliation of Cash and Cash Equivalents Per Balance Sheet | |||||
Cash and equivalents | 884,943 | 1,019,465 | |||
Cash reserved for capital improvements |
| 8,407,996 |
| 9,566,367 | |
Cash and cash equivalents per statement of cash flows | 9,292,939 | 10,585,832 | |||
Schedule of payments of interest and taxes | |||||
Cash paid for income tax | $ | 400,000 | $ | 1,127,000 | |
Cash paid for interest | $ | 14,532 | $ | 11,849 | |
Supplemental schedule of non-cash activities | |||||
Net of unrealized holdings gain on available-for-sale | $ | 34,814 | |||
The accompanying notes are an integral part of these financial statements. |
22
Note 1: Nature of PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020Business
NOTE 1: Nature of Business
PismoCoastVillage,Inc. (the (theCompany)isarecreationalvehiclecampingresort.Itsbusinessisseasonalinnaturewith the fourth quarter, the summer, being its busiest and most profitable.
NOTE Note2:SummaryofSignificantAccounting Policies
RevenuefromContractswithCustomers
TheFinancialAccountingStandardsBoard(FASB)issuednewguidancethatcreatedTopic606, RevenuefromContracts with Customers, in the Accounting Standards Codification (ASC).Topic 606 supersedes the revenue recognition requirements in FASB ASC 605, Revenue Recognition, and requires the recognition of revenue when promised goodsor services are transferred to customers in an amount thatreflects the consideration to which an entity expects to be entitled in exchange for those goods or services.The new guidance also added Subtopic 340-40, Other Assets and Deferred Costs-Contracts with Customers, to the ASC to require the deferral of incremental costs of obtaining a contract with a customer.The cumulative impact of adopting FASB ASC 606 was immaterial and did not require an adjustment to retained earnings.
Revenue primarily consists of recreational camping space rentals, revenue from recreational vehicle storage space, foodand RV service beveragesalesand repairs, food otherancillarygoodsand beverage sales and other ancillary goods and services.Revenueisrecognizedwhenspacesareoccupiedor goods and services have been delivered or rendered, respectively.
Sales taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producingrevenue- producing transaction, that are collected by the Company from a customer, are excluded from revenue.Finally, the Company collects Transient Occupancy Taxes (TOT) and Tourism Business Improvement District (TBID) assessments from guests which are remitted to the City of Pismo Beach and County of San Luis Obispo and are excluded from revenues.AtSeptember30, 2021 2023,and 2020, 2022,theCompanyhad $85,714 $80,443and $71,145 $84,860inTOTandTBIDassessments due to the City of Pismo Beach and the County of San Luis Obispo included in accrued expenses on the combined balance sheet, respectively.
PerformanceObligations
For performance obligations related to the Company accommodations and other ancillary goods and services, control transferstothecustomeratapointintime.TheCompany’sprincipaltermsofsaleoccursimultaneouslywhencontrol of the goods and services aretransferred to the customer and payment is accepted.The Company does not have any significant financing components.
TheCompanydoesnotdisclosethevalueofunsatisfiedperformanceobligationsforcontractswithanexpectedlength ofoneyearorless.Dueto thenatureofthebusiness,theCompany’srevenueisnotsignificantlyimpactedbyrefunds. Cash payments received in advance of guests staying at the resort are refunded to guests if the guest cancels within thespecifiedtimeperiod,beforeanyservicesarerendered.Refundsrelatedtoservicesaregenerallyrecognizedasan adjustment to the transaction price at the time the resort stay occurs or services are rendered.
DisaggregationDesegregation ofRevenue
Revenue from performance obligations satisfied at a point in time consists of sales related to the Company accommodations and other ancillary goods and services at the location in Pismo Beach, California.
22
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
PAGE 2
NOTE 2: Summary of Significant Accounting Policies (Continued)
California. The geographic nature ofthe revenue could affectthenature, timing, amount and uncertainty ofrevenueand cash flows.Revenue from site rentals, storage rental, spotting, and store and accessory sales accounts for approximately 66%, 14%15%, 4%5%, and 13% 10%oftheCompanytotalrevenuefortheperiodendedSeptember 30, 2021, 2023,respectively.Revenuefromother ancillary goods and services accounts for the remaining 3%4% of revenue for the period ended September 30, 2021.2023.
23
Note 2:SummaryofSignificantAccountingPolicies(Continued)
CustomerDeposits
The Company does not recognize revenue when a customer prepays for resort accommodations. accommodation.Rather, the Company records a deferred revenue liability equal to the amount received.Revenue is then recognized when the customer stays at the resort.As of September 30, 20212023, and 2020,2022, the Company had Customer deposits related to prepaidvillageaccommodationswas $2,244,848 $2,084,012and $2,058,135 $2,268,627onthebalancesheetasrentaldeposits,respectively.
CashandCashEquivalents
Forthe purposesofthestatementofcashflows,theCompany considersallhighlyliquidinvestments includingcertificates of deposit with an original maturity of three months or less when purchased to be cash equivalents.As of September30, 20212023,and2022,theCompanyhad$2,511and$6,089ofcashequivalents.
CashReservedforCapitalImprovementsandDeferredMaintenance
The Company keeps separate funds reserved for capital improvements and 2020,deferred maintenance. Historically, the Company had $6,097hasnotcarriedahighamountofdebt;thisseparatereserveiskept inordertoself-financemajorimprovement and $6,096 ofhave cash equivalents.ready upon project permit approval.
AllowanceforDoubtfulAccounts
It is the policy of management to review the outstanding accounts receivable at year-end, as well as historical bad debtwrite-offs,andestablishanallowancefordoubtfulaccountsforestimateduncollectibleaccounts.Management did not believe an allowance for doubtful accounts was necessary as of September 30, 20212023, or 2020.2022.
Inventories
Inventorieshavebeenvaluedatthelowerofcostormarketonafirst-in,first-outbasis.Inventoriesarecomprised primarily of finished goods in the general store and in the RV repair shop.store.
PropertyandEquipment
Allpropertyandequipmentarerecordedatcost.Depreciationofpropertyandequipmentiscomputedusingthe straight linestraight-line method based on the cost of the assets, less allowance for salvage value, where appropriate. appropriate.
Depreciation ratesarebaseduponthefollowingestimatedusefullives:
Building and resort improvements | 5 to 40 years |
Furniture, fixtures, equipment, and leasehold improvements | 5 to 31.5 years |
Transportation equipment | 5 to 10 years |
23
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
PAGE 3
NOTE 2: Summary of Significant Accounting Policies (Continued)
Earnings Per Share
The earningspersharearebasedonthe 1,775 1,774sharesissuedandoutstanding.Thefinancialstatements reportonly basic earnings per share, as there are no potentially dilutive shares outstanding.
24
Note 2: SummaryofSignificantAccountingPolicies(Continued)
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United StatesofAmericarequirestheCompanytomakeestimatesandassumptionsthataffectcertainreportedamountsand disclosures.Accordingly, actual results could differ from those estimates.
Advertising
The Companyfollowsthepolicyofchargingthecostsofnon-directadvertisingasincurred.Advertisingexpenses was $38,690
$70,709and $39,589 $58,944fortheyearsendedSeptember30, 2021 2023,and 2020, 2022,respectively.Advertisingexpense wass were included in operating expenses on the statement of operations.
Concentration of CreditRisk
At September30, 2021 2023,and 2020, 2022,theCompany hadcashdepositsof $7,400,355 $417,269and $4,591,578 $552,851inexcessofthe $250,000$250,000 federally insuredlimit with PacificPremierBank, respectively.However,becausePacificPremierBank is a memberof the Certificate of Deposit Account Registry Service (CDARS), large deposits are divided into smaller amounts and placed with other FDIC insured banks which are also members of the CDARS network.Then, those member banks issue CDs in amounts under $250,000, so that the entire deposit balance is eligible for FDIC insurance. Due to large fluctuations in the Operating checking account, there may be times when the balance is above the $250,000 FDIC threshold.
Risks and Uncertainties
Due to uncertainty surrounding the recent COVID-19 pandemic, the length and severity of the outbreak, and the volatility in the world investment markets, there is increasing uncertainty as to how these events will affect results of operations and financial position of the Company going forward. As required by executive order by the Governor of California in March 2020, all non-essential businesses were required to close services offered in person to the public. As such, the recreational vehicle camping resort operated by the Company was required to close and thereby effecting the occupancy rate. However, the Company did see an increase in occupancy rates from July through the report date.
Income Taxes
The Company uses the asset-liability method of computing deferred taxes in accordance with Accounting Standards Codification(ASC)IncomeTaxestopic.ASC Income Taxes topic. ASC 740requires,amongotherthings,thatifincomeisexpectedfortheentire year, but there is a net loss to date, a tax benefit is recognized based on the annual effective tax rate.
FASB ASC 740 also requires, among other things, the recognition and measurement of uncertain tax positions based on a "more likely than not" (likelihood greater than 50%) approach.As of September 30, 2021,2023, management has considered its tax positions and believes that the Company did not maintain any uncertain tax positions under this approach and,accordingly, alltax positions have been fully recorded in the provision for income taxes.
24
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
PAGE 4
NOTE 2: Summary of Significant Accounting Policies (Continued)
It is the policy oftheCompany toconsistentlyclassifyinterestandpenaltiesassociatedwithincometax expenseseparatelyfromthe provision for income taxes, and accordingly no interest or penalties associated with income taxes have been included inthiscalculation,orseparatelyintheStatementofOperationsandRetainedEarnings.TheCompanydoesnotexpect any material changes through September 30, 2022. 2024.Although the Company does not maintain any uncertain tax positions,taxreturnsremainsubjectto examination bytheInternalRevenueServiceforfiscalyearsendingonor after September 30, 2018,and by the California Franchise Tax Board for fiscal years ending on or after September 30, 2017.
Investments
NOTEInvestments in securities have been classified in the balance sheet, according to management’s intent, as securities available-for-sale under the provisions of Financial Accounting Standards Board (FASB) Accounting Standards modification (ASC) Topic 320 Investments – Debt and Equity Securities. Available-for-sale securities consist of investment securities not classified as trading securities nor as held-to-maturity securities. Unrealized holding gains and losses, net of deferred taxes,
25
Pismo Coast Village, Inc.
Notes to Financial Statements
September 30, 2023, and 2022
Page 26
Note 2: SummaryofSignificantAccountingPolicies(Continued)
available-for-sale securities are reported as a net amount in a separate component of stockholders’ equity until realized. Gains and losses on the sale of available-for-sale securities are determined using the specification method.
FairValueMeasurements
The Company records its financial assets and liabilities at fair value in accordance with the Fair Value Measurements and Disclosures Topic of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) (the Topic).
This Topic provides a framework for measuring fair value, clarifies the definition of fair value and expands disclosuresregardingfairvaluemeasurements.Fairvalueisdefinedasthepricethatwouldbereceivedtosellanasset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at that reporting date. The Topic also establishes a three-tier hierarchy, as follows, which prioritizes the inputs used in the valuation methodologies in measuring fair value.
Level1:Inputstothevaluationmethodologyareunadjustedquotedpricesforidenticalassetsorliabilitiesinactive markets that the Company has the ability to access.
Level 2:Inputstothevaluationmethodologyinclude:
Quoted pricesforsimilarassetsandliabilitiesinactivemarkets.
Quoted pricesforidenticalorsimilarassetsorliabilitiesinactivemarkets.
Inputs otherthanquotedpricesthatareobservablefortheassetorliability.
Inputs thatarederivedprincipallyfromorcorroboratedbyobservablemarketdatabycorrelationor other means.
If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.
Level 3: PropertyInputs to the valuation methodology are unobservable and Equipmentsignificant to the fair value measurement. The following is a description of the valuation methodologies used for assets measured at fair value:
Investments: Investments in US Treasury Bills are recorded at fair value based upon quoted market prices using Level 1 input.
The hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.
At September 30, 20212023, the following sets forth by level, within the fair value hierarchy, the Company’s assets at fair value:
September 30, 2023 | ||||||||
Level 1 | Level 2 | Level 3 | ||||||
Investment in US Treasury Bill | $ | 1,042,140 | $ | - | $ | - | ||
Total assets at fair value | $ | 1,042,140 |
|
|
|
|
26
Pismo Coast Village, Inc.
Notes to Financial Statements
September 30, 2023, and 2020,2022
Page 27
Note 2: SummaryofSignificantAccountingPolicies(Continued)
Leases
On October 1, 2022, the Company adopted Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842), using the optional transition method, which allowed the application of the new standard at the adoption date and the recognition of a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without adjusting previously reported results. As a result, the Company’s financial statements for periods prior to September 30, 2022, have not been revised to reflect the new lease accounting guidance.
In adopting ASC Topic 842, the Company elected the package of practical expedients permitted under the transition guidance within the new standard. This package allowed the Company to carry forward historical lease classifications, to not reassess whether any expired or existing contracts are or contain leases, and to not reassess the accounting for initial direct costs for any existing leases.
The Company determines if an arrangement is a lease at inception. Operating leases are included in the operating lease right-of-use (ROU) assets, current liabilities, and long-term operating lease liabilities in the balance sheet. Finance leases are included in property and equipment, includedcurrent liabilities, and long-term finance lease liabilities in the balance sheet. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. For determining the present value of lease payments, the Company uses the discount rate implicit in the lease when readily determinable. As most of the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate in determining the present value of lease payments that approximates the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term. At adoption, the ROU asset also includes any lease payment made and excludes lease incentives and initial direct costs. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
The Company evaluates contracts to determine if they contain a lease at inception. The Company’s material leases primarilyconsistofvehicles.Inaccordancewith GAAP,theCompanyclassifiesleasesasoperatingorfinanceleasesfor financial reporting purposes, beginning at the lease commencement date. The lease term used in the classification includes the non-cancelable period for which the Company has the right to use the underlying asset, along with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option would result in an economic penalty.
The Companyhaselectedtoaccountforshort-termleases,thosewithaleasetermof12monthsorless,byrecognizing leasepayments inprofitand losson astraight-linebasis overthe termofthelease,andvariableleasepayments inthe periodinwhichtheobligationforthepaymentsisincurred.Thisaccountingpolicyselectionhasbeenmadeconsistently for all short-term leases within the same asset class. The Company records operating rent expense on a straight-line basisbeginning on the lease commencement date (when theCompany takes possession ofthe premises) and ends on the lease termination date. For finance leases, the lease liability is unwound using the effective interest rate method, where interest expense is recognized over the lease term. The right-of-use asset is amortized on a straight-line basis over the shorter of the lease term or the useful life of the underlying asset. Maintenance, insurance, and property tax expenses are accounted for on an accrual basis as variable lease costs. Variable lease costs for operating leases are recognized in the period when changes in facts and circumstances on which the variable lease payments are based occur. For more information on the Company’s lease arrangements, refer to Note 5 – Lease.
27
Pismo Coast Village, Inc.
Notes to Financial Statements
September 30, 2023, and 2022
Page 28
Note 3: Property and Equipment
At September30,2023,and2022,propertyandequipmentincludedthe following:
2023 | 2022 | ||||||||||
2021 | 2020 | ||||||||||
Land | $ | 10,394,747 | $ | 10,394,747 | $ | 11,608,707 | $ | 10,394,747 | |||
Building and resort improvements | 13,185,090 | 11,349,248 | 13,262,158 | 13,174,590 | |||||||
Furniture, fixtures, equipment and leasehold improvements | 777,074 | 679,303 | |||||||||
Furniture, fixtures, equipment, and leasehold improvements | 895,394 | 870,440 | |||||||||
Transportation equipment | 794,974 | 794,974 | 979,354 | 959,978 | |||||||
Construction in progress | 87,589 | 1,852,022 |
| 149,714 |
| 87,589 | |||||
25,239,474 | 25,070,294 | 26,895,327 | 25,487,344 | ||||||||
Less accumulated depreciation |
| (9,976,930) |
| (9,533,099) | |||||||
$ | 15,262,544 | $ | 15,537,195 | ||||||||
Less accumulated depreciation and amortization |
| (10,883,412) |
| (10,456,244) | |||||||
Property and Equipment, Net | $ | 16,011,915 | $ | 15,031,100 |
Depreciation and amortization expense was $443,831expenses were $460,132 and $414,805$479,314 for the years ended September 30, 20212023, and 2020,2022, respectively.
At September 30, 20212023, and 20202022 the cost of assets under capitalfinance lease was $405,819$434,573 and $405,819, respectively, and related accumulated amortization was $267,393$385,311 and $196,991,$331,071, respectively. Depreciation expenseAmortization expenses on assets under capitalfinance lease was $70,402$54,240 and $70,276$63,678 for the years ended September 30, 20212023, and 2020,2022, respectively.
NOTENote 4: Line of Credit
The Company hadhas a revolving line of credit with Pacific Premier Bank (formerly Heritage Oaks Bank) for $500,000, expiring April 1, 2022. The Company received a Letter of Credit written in favor of2024. There was no outstanding balance on the County of San Luis Obispo (the County), California for $412,062 to cover a bond requirement relating to public improvements as part of the Company’s construction of a new RV service facility. The Company completed the required public improvements and the Letterline of credit has been exonerated.as of September 30, 2023, or 2022.
2528
Pismo Coast Village, Inc.
Notes to Financial Statements
September 30, 2023, and PISMO COAST VILLAGE, INC.2022
Page 29
NOTES TO FINANCIAL STATEMENTSNote 5: Leases – Lessee
SEPTEMBER 30, 2021 AND 2020
PAGE 5
NOTE 5: CapitalDisclosure Subsequent to the Adoption of the New Lease Obligations
Accounting Standard (ASU 2016-02). At September 30, 20212023, and 2020, capital2022, finance lease obligations consisted of the following:
2021 | 2020 | ||||
A 2016 Hino truck leased from Donahue Transportation Services Corp, payable in monthly installments of $1,159, including Interest at 4.532% per annum, through January 2023. | $ | 16,373 | $ | 29,261 | |
A 2018 Hino truck leased from Donahue Transportation Services Corp, payable in monthly installments of $1,147, including interest at 4.644% per annum, through September 2024. | 36,762 | 48,552 | |||
A 2019 Hino truck leased from Donahue Transportation Services Corp, payable in monthly installments of $1,151, including interest at 4.181% per annum, through May 2025. | 44,677 | 56,411 | |||
A 2019 Hino truck leased from Donahue Transportation Services Corp, payable in monthly installments of $1,151, including interest at 4.101% per annum, through December 2025. | 51,419 | 62,874 | |||
A 2020 Hino truck leased from Donahue Transportation Services Corp, payable in monthly installments of $1,166, including interest at 5.406% per annum, through May 2027. | 68,164 | 78,176 | |||
$ | 217,395 | $ | 275,274 | ||
Less current portion |
| (60,757) |
| (54,749) | |
Total capital lease obligations, net of current portion | $ | 156,638 | $ | 220,525 |
2023 | 2022 | ||||
A 2016 Hino truck leased from Donahue Transportation Services Corp, payable in monthly installments of $1,257, including interest at 4.532% per annum, through December 2024. | $ | 19,483 | $ | 2,837 | |
A 2018 Hino truck leased from Donahue Transportation Services Corp, payable in monthly installments of $1,154, including interest at 4.644% per annum, through August 2024. | 11,366 | 24,358 | |||
A 2019 Hino truck leased from Donahue Transportation Services Corp, payable in monthly installments of $1,162, including interest at 4.181% per annum, through March 2025. | 19,525 | 32,364 | |||
A 2019 Hino truck leased from Donahue Transportation Services Corp, payable in monthly installments of $1,151, including interest at 4.101% per annum, through September 2025. | 27,044 | 39,482 | |||
A 2020 Hino truck leased from Donahue Transportation Services Corp, payable in monthly installments of $1,166, including interest at 5.406% per annum, through May 2027. | 46,445 | 57,597 | |||
$ | 123,863 |
| 156,638 | ||
Less current portion |
| (63,978) |
| (52,256) | |
Total non-current finance lease obligations | $ | 59,885 |
| 104,382 |
AtThe following table is a summary of the components of the net lease cost for the years ended September 30, 2021, future minimum payments on capital lease obligations were as follows:2023, and 2022, respectively.
For the Twelve Months Ending September 30, | |||
2022 | $ | 69,611 | |
2023 | 58,468 | ||
2024 | 53,374 | ||
2025 | 34,615 | ||
2026 | 13,992 | ||
Thereafter |
| 9,328 | |
Present value of future minimum payments | 239,388 | ||
Less amount representing interest |
| (21,993) | |
217,395 | |||
Less current portion of capital lease obligations |
| (60,757) | |
Total capital lease obligations, net of current portion | $ | 156,638 |
2023 | 2022 | ||||
Finance lease cost | |||||
Amortization of ROU assets | $ | 54,240 | $ | 63,678 | |
Interest on lease liabilities |
| 4,956 |
| 7,589 | |
Total finance lease cost | $ | 59,196 | $ | 71,267 |
2629
Pismo Coast Village, Inc.
Notes to Financial Statements
September 30, 2023, and 2022
Page 30
Supplemental cashPISMO COAST VILLAGE, INC.flow
informationrelatedNOTES TO FINANCIAL STATEMENTSto
leasesforSEPTEMBER theyearsendedSeptember30, 2021 AND 20202023,
and2022PAGE 6areas follows.
2023 | 2022 | ||||
Cash paid for amounts included in the measurement of | |||||
Financing cash flows paid for principal portion of | $ | 61,529 | $ | 60,757 |
Supplemental balancesheetinformationrelatedtoleasesSeptember30,2023,and2022areas follows.
September 30 | September 30 | ||||
2023 | 2022 | ||||
Finance leases: | |||||
Property and equipment, gross | $ | 434,573 | $ | 405,819 | |
Accumulated amortization | (385,311) | (331,071) | |||
Property and equipment net | $ | 49,262 | $ | 74,748 | |
Current portion of long-term liabilities | $ | 63,978 | $ | 52,256 | |
Long-term liabilities, less current portion |
| 59,885 |
| 104,382 | |
Total finance liabilities | $ | 123,863 | $ | 156,638 | |
Weighted average remaining lease term | |||||
Finance leases | 1.87 years | 3.16 years | |||
Weighted average discount rate | |||||
Finance leases | 4.69% | 4.69% |
30
Pismo Coast Village, Inc.
Notes to Financial Statements
September 30, 2023, and 2022
Page 31
Note 5: Leases - Lessee (Continued)
The followingtablesummarizedthematurityoftheleaseliabilitiesatSeptember30, 2023.
For the Twelve Months Ending September 30 | Finance Lease | |
2024 | $ | 68,458 |
2025 | 39,643 | |
2026 | 13,992 | |
2027 | 9,328 | |
2028 | - | |
Thereafter |
| - |
Total minimum lease payments | 131,421 | |
Less amount representing interest |
| (7,558) |
Present value of lease payments | 123,863 | |
Less current portion |
| (63,978) |
Finance lease obligations, net of current portion | $ | 59,885 |
Note 6: Leases – Lessor
On April1,2023,theCompanyamendedanoperatingleaseagreementforaBillboardlocatedinSantaMaria,CA.The lease is a 10-year lease, expiring May 30, 2033. The lease calls for annual income of $12,536 for years 1 to 5 and will increase to $15,036 per year for years 6 to 10.
NOTEThe following table summarizes the future operating lease income.
For the Twelve Months Ending September 30 | ||
2024 | $ | 12,536 |
2025 | 12,536 | |
2026 | 12,536 | |
2027 | 12,536 | |
2028 | 12,536 | |
Thereafter |
| 75,180 |
$ | 137,860 |
On May 1, 2023, the Company entered into an operating lease agreement for commercial building space at 180 S. DolliverSt.,PismoBeach,CA93449.Theleaseisa10-year lease,expiringMay30,2033, andcallsformonthlyincome of $3,075. Commences May 1, 2023.
The following table summarizes the future operating lease income.
For the Twelve Months Ending | ||
2024 | $ | 36,900 |
2025 | 36,900 | |
2026 | 36,900 | |
2027 | 36,900 | |
2028 | 36,900 | |
Thereafter |
| 169,125 |
$ | 353,625 |
31
Pismo Coast Village, Inc.
Notes to Financial Statements
September 30, 2023, and 2022
Page 32
Note 6: Common StockLeases – Lessor (Continued)
On May 1, 2023, the Company entered into an operating lease agreement for commercial building space at 2096 Nipomo St.,Oceano,CA93445.Theleaseisa10-year lease,expiringMay30,2033,andcallsformonthlyincomeof $6,200.CommencesMay1,2023.
The following table summarizes the future operating lease income.
For the Twelve Months Ending September 30 | ||
2024 | $ | 74,400 |
2025 | 74,400 | |
2026 | 74,400 | |
2027 | 74,400 | |
2028 | 74,400 | |
Thereafter |
| 341,000 |
$ | 713,000 |
Each share of stock is intended to provide the shareholder with free use of the resort for a maximumof 45 days per year.IftheCompanyisunabletogeneratesufficientfundsfromthepublic,theCompany mayberequiredtocharge shareholders for services.
A shareholder is entitled to a pro rata share of any dividends as well as a pro rata share of the assets of the Company in the event of its liquidation or sale.The shares are personal property and do not constitute an interest in real property.Theownershipofasharedoesnotentitletheownertoanyinterestinanyparticularsiteorcamping period.
NOTE 7:Note 8: Income Taxes
The provisionsforincometaxesfortheyearsendedSeptember30, 2021 2023,and 2020 2022areas follows:
2021 | 2020 | 2023 | 2022 | ||||||||
Current: | |||||||||||
Federal | $ | 661,700 | $ | 291,200 | $ | 229,500 | $ | 524,500 | |||
State |
| 375,400 |
| 126,200 |
| 98,600 |
| 218,500 | |||
1,037,100 | 417,400 | $ | 328,100 | $ | 743,000 | ||||||
Deferred: | |||||||||||
Federal | 24,400 | (20,900) | $ | 4,600 | $ | (12,900) | |||||
State |
| (4,300) |
| (800) |
| 9,900 |
| (5,400) | |||
14,500 | (18,300) | ||||||||||
Provision for income taxes | $ | 1,057,200 | $ | 395,700 | $ | 342,600 | $ | 724,700 |
The Company uses the asset-liability method of computing deferred taxes in accordance with FASB ASC Topic 740. Thedifferencebetweentheeffectivetaxrateandthestatutorytaxratesisdueprimarilytotheimpactofstatetaxes net of the federal tax benefit and nondeductible variable costs of shareholder usage.
32
Pismo Coast Village, Inc.
Notes to Financial Statements
September 30, 2023, and 2022
Page 33
Note 8: Income Taxes (Continued)
At September30, 2021 2023,and 2020, 2022,thedeferredincometaxliabilitiesconsistedofthefollowing:
2021 | 2020 | 2023 | 2022 | ||||||||
Deferred tax assets (liabilities): | |||||||||||
Federal | $ | (390,800) | $ | (366,400) | $ | (382,400) | $ | (377,800) | |||
State |
| (52,500) |
| (56,700) |
| (57,000) |
| (47,100) | |||
Net deferred income taxes | $ | (443,300) | $ | (423,100) | $ | (439,400) | $ | (424,900) |
Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reportedamountsinthefinancialstatements,whichwillresultintaxableordeductibleamountsinthefuture.The majority of the balance is due to timing differences of depreciation expense, caused by the use of accelerated depreciation methods for tax calculations.
27At September
30,2023,PISMO COAST VILLAGE, INC.and
2022,theNOTES TO FINANCIAL STATEMENTSdeferred
incometaxSEPTEMBER 30, 2021 AND 2020liabilities
consistedofPAGE 7thefollowingtemporarydifferences:
NOTE 7: Income Taxes (Continued)
At September 30, 2021 and 2020, the deferred income tax liabilities consisted of the following temporary differences:
2021 | 2020 | ||||||||||
2023 | 2022 | ||||||||||
Depreciation | $ | (552,900) | $ | (492,200) | $ | (478,800) | $ | (525,400) | |||
Unrealized gain on investments |
| - |
| - |
| - |
| - | |||
Total gross deferred tax liabilities |
| (552,900) |
| (492,200) |
| (478,800) |
| (525,400) | |||
Vacation accrual | 30,100 | 30,700 | 700 | 34,400 | |||||||
Federal benefit of state taxes |
| 79,500 |
| 38,400 |
| 38,700 |
| 66,100 | |||
Total gross deferred tax assets |
| 109,600 |
| 69,100 |
| 39,400 |
| 100,500 | |||
$ | (439,400) | $ | (424,900) | ||||||||
$ | (443,300) | $ | (423,100) |
There were no net operating loss or tax credit carryforwards for the year ended September 30, 20212023, or 20202022 for federal or state.
NOTE 8: Payroll Protection Plan Loan
On April 28, 2020, the Company (the “Borrower”) was granted a loan in the aggregate amount of $553,802, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The loan, which was in the form of a note dated April 28, 2020 issued by the borrower, matures on April 28, 2022 and bears interest at a rate of 0.98% per annum, payable monthly commencing on November 28, 2020. The note may be prepaid by the borrower at any time prior to maturity with no prepayment penalties. Funds from the loan were only used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations incurred before February 15, 2020. The Company received full forgiveness of the loan as of May 10, 2021.
NOTE 9: Operating Leases
The Company leases a lot located in Oceano for $3,575 per month. The lease has converted to a month-to-month lease however the lessor is considering a long-term renewal at this time.
The Company has a five-year lease obligation for a copier. Rental expense under this operating lease is $384 per month. Future minimum lease payments under this obligation are as follows:
For the Twelve Months Ending September 30, | |||
2021 | $ | 4,608 | |
2022 |
| 1,920 | |
$ | 6,528 |
Rent expense under these lease agreements was $55,945 and $26,091 for the years ended September 30, 2021 and 2020, respectively.
28
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
PAGE 8
NOTE 10:Note 9: Employee Retirement Plans
The Company is the sponsor of a 401(k)-profit sharing pension plan, which covers substantially all full-time employees. Employer contributions are discretionary and are determined on an annual basis. The Company’s matching portion of the 401(k) safe harbor plan was $64,148$93,769 and $64,089$73,679 for the years ended September 30, 20212023, and 2020,2022, respectively.
NOTE 11:Note 10: Subsequent Events
Events subsequent to September 30, 20212023, have been evaluated through November 12, 2021,December 13, 2023, which is the date the financial statements were available to be issued. Management did not identify any subsequent events that required disclosure.
2933
Supplementary Information
Pismo Coast Village, Inc.
Schedule of Operating Expenses
September 30, 2023, and 2022
| 2023 |
|
| 2022 | |
Administrative salaries | $ | 708,278 | $ | 731,182 | |
Advertising and promotion | 70,709 | 58,944 | |||
Auto and truck expense | 150,815 | 164,520 | |||
Bad debts | 4,042 | 1,042 | |||
Contract services | 49,033 | 68,703 | |||
Corporation expense | 95,455 | 47,361 | |||
Custodial supplies | 39,017 | 39,133 | |||
Direct labor | 2,474,450 | 2,405,668 | |||
Employee travel and training | 95,861 | 34,648 | |||
Equipment lease | 6,254 | 5,389 | |||
Insurance | 1,040,034 | 643,325 | |||
Miscellaneous | 197,596 | 109,420 | |||
Office supplies and expense | 177,312 | 101,991 | |||
Payroll tax expense | 256,598 | 223,849 | |||
Payroll service | 62,169 | 47,042 | |||
Pension plan match | 93,769 | 73,679 | |||
Professional services | 158,104 | 121,634 | |||
Property taxes | 245,745 | 215,930 | |||
Recreational supplies | 17,118 | 3,521 | |||
Rent - storage lots | 55,591 | 53,011 | |||
Repairs and maintenance | 283,783 | 283,124 | |||
Retail operating supplies | 16,857 | 5,653 | |||
Security | 2,682 | 14,808 | |||
Service charges | 297,327 | 354,231 | |||
Taxes and licenses | 14,622 | 11,343 | |||
Telephone | 40,383 | 34,371 | |||
Uniforms | 48,285 | 32,225 | |||
Utilities |
| 850,962 |
| 852,252 | |
Total operating expenses | $ | 7,552,851 | $ | 6,737,999 |
PISMO COAST VILLAGE, INC.No assurance isprovidedonthesefinancialstatements.
34
SCHEDULE OF OPERATING EXPENSESTable of Contents
INDEPENDENT AUDITOR’S REPORT
SEPTEMBER 30, 2021 AND 2020ON SUPPLEMENTARY INFORMATION
2021 | 2020 | ||||
Administrative salaries | $ | 665,879 | $ | 565,767 | |
Advertising and promotion | 38,690 | 39,589 | |||
Auto and truck expense | 100,628 | 98,201 | |||
Bad debts | 1,237 | 2,192 | |||
Contract services | 40,051 | 69,744 | |||
Corporation expense | 43,886 | 35,794 | |||
Custodial supplies | 27,060 | 23,049 | |||
Direct labor | 2,067,476 | 1,756,135 | |||
Employee travel and training | 23,904 | 30,975 | |||
Equipment lease | 5,178 | 5,080 | |||
Insurance | 512,414 | 511,556 | |||
Miscellaneous | 56,312 | 40,538 | |||
Office supplies and expense | 83,937 | 78,981 | |||
Payroll tax expense | 216,173 | 193,100 | |||
Payroll service | 36,518 | 47,625 | |||
Pension plan match | 64,148 | 64,089 | |||
Professional services | 94,236 | 117,041 | |||
Property taxes | 230,197 | 227,009 | |||
Recreational supplies | 962 | 519 | |||
Rent - storage lots | 50,767 | 21,011 | |||
Repairs and maintenance | 201,268 | 298,569 | |||
Retail operating supplies | 6,805 | 4,397 | |||
Security | 13,738 | 14,281 | |||
Service charges | 294,955 | 209,820 | |||
Taxes and licenses | 11,917 | 11,251 | |||
Telephone | 34,658 | 31,748 | |||
Uniforms | 32,604 | 27,505 | |||
Utilities |
| 860,655 |
| 708,822 | |
Total operating expenses | $ | 5,816,253 | $ | 5,234,388 |
30
INDEPENDENT AUDITOR'S REPORT
ON SUPPLEMENTAL INFORMATION
To the Board of Directors and Shareholders
Pismo Coast Village, Inc.
165 South Dolliver Street
Pismo Beach, California
We have audited the financial statements of Pismo Coast Village, Inc. (the Company) as of and for the years ended September 30, 20212023, and 2020,2022, and our reports thereon dated November 12, 2021,December 13, 2023, which expressed an unqualified opinion on those financial statements, appears on page 16. The supplementary information contained in the Statements of Operations for the Three Months Ended September 30, 20212023, and 2020,2022, has been subjected to audit procedures performed in conjunction with the audit of the Company’s financial statements. The supplementary information is the responsibility of the Company’s management. Our audit procedures included determining whether the supplementary information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplementary information. In forming our opinion on the supplementary information, we evaluated whether the supplementary information, including its form and content, is presented in conformity with accounting principles generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the financial statements as a whole.
BROWN ARMSTRONG
ACCOUNTANCY CORPORATION
BROWN ARMSTRONG ACCOUNTANCY CORPORATION
Bakersfield, California
Bakersfield, California
November 12, 2021December 13, 2023
3135
PISMO COAST VILLAGE, INC. STATEMENTS OF INCOME (UNAUDITED) THREE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020 | ||||||||||
Pismo Coast Village, Inc. Statements of Operations Three Months Ended September 30, 2023, and 2022 | Pismo Coast Village, Inc. Statements of Operations Three Months Ended September 30, 2023, and 2022 | |||||||||
|
| |||||||||
2021 | 2020 | 2023 |
|
| 2022 | |||||
Income: | ||||||||||
Resort operations | $ | 2,549,078 | $ | 2,372,518 | $ | 2,558,576 | $ | 2,630,835 | ||
Retail operations |
| 361,810 |
| 389,306 | 248,680 | 380,368 | ||||
Operating Lease Income | 66,559 | 380,368 | ||||||||
Total income |
| 2,910,888 |
| 2,761,824 | 2,873,815 | 3,011,203 | ||||
Costs and expenses: | ||||||||||
Operating expenses | 1,836,557 | 1,462,417 | 2,106,120 | 2,174,497 | ||||||
Cost of goods sold | 180,249 | 199,329 | 134,996 | 185,083 | ||||||
Depreciation |
| 122,747 |
| 104,988 | 95,446 | 121,964 | ||||
Total cost and expenses |
| 2,139,553 |
| 1,766,734 | ||||||
Total costs and expenses | 2,336,562 |
| 2,481,544 | |||||||
Income from operations |
| 771,335 |
|
| 995,090 | 537,253 |
| 529,659 | ||
Other income (expense): | ||||||||||
Other income(expense) | ||||||||||
Interest income | 70 | 500 | 49,822 | 176 | ||||||
Interest expense | (2,639) | (4,250) | 3,787 | (3,077) | ||||||
Total other income (expense) |
| (2,569) |
| (3,750) | 53,609 |
| (2,901) | |||
|
| |||||||||
Income before provision for income tax | 768,766 | 991,340 | ||||||||
Income before provision for income taxes | 590,862 |
| 526,758 | |||||||
|
| |||||||||
Provision for income tax |
| 1,696,100 |
| 486,800 | 475,100 |
| 1,227,300 | |||
|
| |||||||||
Net income | $ | (927,334) | $ | 504,540 | ||||||
Net profit | $ | 115,762 | $ | (700,542) | ||||||
|
| |||||||||
Net income per share | $ | (522.44) | $ | 284.25 | ||||||
|
|
|
|
|
| |||||
Total comprehensive income per share | $ | (522.44) |
| $ | 284.25 | |||||
|
|
|
|
|
| |||||
Net Profit per share | $ | 65.25 | $ | (394.89) |
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There has been no change of accountants, nor any disagreement with accountants, on any matter of accounting principle, practices, or financial statement disclosures required to be reported under this item.
ITEM 9A(T). CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports, filed, or submitted under the Securities Exchange Act, is recorded, processed, summarized, and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Our management, under the direction of our Chief Executive Officer and Chief Financial Officer (who is our principal accounting officer), has evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of September 30, 20212023 (the end of the period covered by this report). Based on that evaluation, our principal executive officer and our principal accounting officer concluded that these disclosure controls and procedures were effective as of such a date.
INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is also responsible for establishing internal control over financial reporting ("ICFR") as defined in Rules 13a-I5(f) and 15(d)-15(f) under the 1934 Act. Our ICFR is intended to be designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Our ICFR is expected to include policies and procedures that management believes are necessary that:
1. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;Company.
2. provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and our directors; and
3. provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.
Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect of financial statement preparation and may not prevent or detect misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.
33
As of September 30, 2020,2023, management assessed the effectiveness of the Company's internal control over financial reporting (ICFR) based on the criteria for effective ICFR established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and SEC guidance on conducting such assessments by smaller reporting companies and non-accelerated filers. Based on that assessment, management concluded that, during the period covered by this report, such internal controls and procedures were effectiveineffective as of September 30, 2021.2023. The Management and Interim Audit Chairperson will be analyzing procedures and staff to evaluate where changes need to be made.
37
Pismo CoastVillage,Inc. 2022-2023
This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management'sThe management’s report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management'sthe management’s report in this Annual Report.
There were no changes in our internal control over financial reporting during the fiscal year ended September 30, 20212023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
No disclosure is required under this item.item.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
a. The Company's Directors were chosen at the Shareholders’ Annual Meeting held January 16, 2021.21, 2023. The Directors serve for one year, or until their successors are elected. The names, ages, background, and other information concerning the Directors, including other offices held by the Directors with the Company, are set forth below.
The following is a list of the Company's Directors and Executive Officers setting forth their functions and experience. There is no understanding or agreement under which the Directors hold office.
DAVID BESSOM, Director |
|
David Bessom attended Bakersfield Jr. College in Bakersfield, CA, receiving an |
SAM BLANK, Director |
|
Sam Blank served as a public-school teacher and administrator for more than 30 years. He earned Associate, Bachelor’s, Master’s, and Doctoral degrees from Citrus College, CSU Fullerton, Whittier College, and Brigham Young University, respectively. He holds lifetime California teaching and administrative credentials. Dr. Blank began his career in 1967 as a middle school teacher in the West Covina USD. He soon became an assistant principal in neighboring Charter Oak USD. In 1979, he joined Poway USD, where he served as principal of elementary and middle schools until he retired in 2001. He has been principal of schools that received California Distinguished Schools and National |
34
HARRY BUCHAKLIAN, Director |
|
Harry Buchaklian has a B.A. degree from California State University, Fresno, in industrial arts, |
38
Pismo CoastVillage,Inc. 2022-2023
SUZANNE COLVIN, Director | Aged 60 |
Ms. Colvin has over 25 years’ financial leadership experience in rapidly growing, global, industry-leading technology companies, both public and private. She is currently Chief Financial Officer at PLACE Inc., a full-service real estate and technology platform that provides best of class back-office support to the top real estate teams. Previously, she was CFO of Egnyte, an industry leading software as a service company that provides content security and governance, and she was CFO at Napster (NASDAQ: NAPS), the first digital music subscription service. Ms. Colvin began her career as an independent auditor at Price Waterhouse, is a Certified Public Accountant and has a bachelor’s degree in business with a concentration in Accounting from Cal Poly San Luis Obispo. Ms. Colvin lives in San Jose, California and has been a Pismo Coast Village shareholder for sixteen years. |
RODNEY ENNS, Director, and Vice President – Operations |
|
Rodney Enns has a B.S. degree in computer engineering from California State University, Fresno, and a secondary math teaching credential from the State of California. He was president, owned and operated, Ennsbrook Ent., an incorporated poultry enterprise, from 1975 to 1995. Mr. Enns then worked as an electrical engineer at Voltage Multipliers, Inc., and was promoted to senior engineer before leaving in August 2005. He |
WILLIAM FISCHER, Director |
|
William (Bill) Fischer resides in Camarillo, California. He served four years in the U.S. Air Force during the Korean War, attaining the rank of Staff Sergeant. He is a graduate of California State University, Northridge, with a B.S. degree in accounting. He worked in the aerospace, entertainment, and public utility industries until 1969 when he was hired by Getty Oil Company’s corporate office in Los Angeles, California, as an accounting supervisor. Texaco, Inc. acquired Getty Oil in 1985, and he was promoted to Manager of Benefits Plans Accounting and transferred to Houston, Texas. Mr. Fischer was responsible for the Savings/Thrift, 401(k), and ESOP Plans administration until 1989, when he elected early retirement. He was an independent financial consultant to various companies until 2006. Mr. Fischer was also |
WAYNE HARDESTY, Director |
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Wayne Hardesty graduated from Arizona State University in 1955. He was commissioned an Ensign from the Naval Officer Candidate School in Newport, Rhode Island, in 1956, and was immediately assigned to the Navy Area Audit Office in Los Angeles, California, for duty at U.S.C. and General Dynamics-Pomona. He entered civil service in 1959, and remained with the Audit Office until 1973, at which time he became a price analyst for the U.S. Air Force at Norton Air Force Base working on the MX and Minuteman Project. Mr. Hardesty received his MBA from Southern Illinois University in 1980. He retired from civil service in 1988 and became self-employed, primarily in tax preparation for both individual and business returns. He became a licensed Enrolled Agent in 1989 and currently operates Hardesty Financial Services in Rancho Cucamonga, California. Mr. Hardesty has been a member of the Board since September 2008, has served three years as Chairman of the Audit Committee, and has served eight years as Chief Financial Officer and Vice President – Finance and as Chair of the Finance Committee. |
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Terris (Terry) Hughes holds an A.A. degree from Bakersfield Junior College in California in police science. He was employed by Belridge/Shell Oil for twenty-three years, from 1973 to 1997, holding the position of senior training technician for the last ten years of that time. He was employed as an internal consultant for Aera Energy LLC, an oil industry company formed in 1997 between the Shell Oil and Mobil Oil Corporations. His duties were to serve as a behavior base safety advisor and provide safety training to Aera Energy LLC employees. He retired from Aera Energy LLC on December 31, 2014. Mr. Hughes then opened his own business entitled Saf-T-Treasures and travels the country providing safety and motivational presentations to employees of various industries. He has been a member of the Board since January 1996, has served one year as Vice President – Policy, three years as Executive Vice President, and five years as President. |
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Pismo CoastVillage,Inc. 2022-2023
MARCUS JOHNSON, Director |
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Marcus Johnson (Marc) has spent his entire career as an educator in the Central Valley of California. For sixteen years he taught, then spent the next twenty-one years in leadership roles, retiring in 2013 from the Sanger Unified School District, where he spent fourteen years, with twelve of those years as Superintendent. Currently, he serves as the K-12 |
KAREN KING, Director, and Executive Vice President |
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Karen King studied business finance and management at California Lutheran University in Thousand Oaks, California, and at the University of Phoenix. From 1991 to 2006, she was employed as Director of Credit Risk and Underwriting Management, Credit Risk Manager, Customer Account Team Lead Underwriting and Quality Control, and as Desktop Underwriter Technology Instructor with Fannie Mae, and, from 2006 to 2008, she was employed with PMI Mortgage Insurance Company as Vice President, National Account Operations in Walnut Creek, California. In June 2008, Mrs. King and her family relocated to Camarillo, California, where she was employed until December 2009 as a sales agent for Camarillo Properties, a local real estate brokerage firm. In December 2009, she accepted employment with Bank of America, and held the positions of Vice President - Investor Audit, Vice President - Executive Customer Relations, Office of the CEO, and Vice President - Operations Risk. She left Bank of America in September 2015 when she was hired by Wells Fargo Bank as Vice President, |
GARRY NELSON, Director |
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Garry Nelson is a graduate of Cal Poly University, San Luis Obispo, California, and has been involved in agriculture for more than forty years. From 2003 until his retirement in 2014, he was employed as the |
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RONALD NUNLIST, Director |
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Ronald Nunlist was employed in the oil business for many years. From 1995 to 1997, he was employed as an operations foreman by Cal Resources LLC, an oil industry company owned by Shell Oil Corporation. From 1997 until his retirement in 1999, Mr. Nunlist was employed as a logistics specialist by Aera Energy LLC, an oil industry company formed between the Shell Oil and Mobil Oil Corporations. Mr. Nunlist presently serves as a planning commissioner for the City of Shafter, California. He has been a member of the Board since January 1986, serving ten years as President (1992 to 1997 and from 2011 to 2016), and ten years as Vice President – Operations. |
GEORGE PAPPI, JR., Director and CEO/Executive |
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Mr. Pappi’s current occupation is as a property major case |
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Pismo CoastVillage,Inc. 2022-2023
DWIGHT PLUMLEY, Director |
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Dwight Plumley attended College of the Sequoias in California, studying electronic engineering and construction real estate. In 1973, he started in the produce equipment industry working for Packers Manufacturing, Inc. as a service and installation supervisor. In 1979, he became employed by Pennwalt Corporation, an international equipment producer, as a project manager and supervisor. Mr. Plumley purchased Packers Manufacturing, Inc. in 1987, and, as |
JERRY ROBERTS, Director |
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Jerry Roberts has an associate of arts degree in math and science from the College of the Sequoias, Visalia, California; a bachelor’s degree in biological sciences from the University of the Pacific, Stockton, California; an MBA degree from the Santa Clara University Graduate School of Business, Santa Clara, California; and is licensed by the California State Board of Accountancy as a Certified Public Accountant. He was first licensed in 1982 after fulfilling experience requirements while in the employment of the international accounting firm of Arthur Andersen & Co. Mr. Roberts is currently a partner in the accounting, tax, and consulting firm of Lampros & Roberts, established in 1985. Mr. Roberts has been married to his wife Denise since 1978. They have three sons and currently reside in Los Gatos, California. Mr. Roberts has been a member of the Board since March 2013, and |
BRIAN SKAGGS, Director |
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Brian Skaggs received his Bachelor of Science degree in Civil Engineering in 1980, and, in 1988, received a |
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GARY WILLEMS, Director and Vice President-Secretary |
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Gary Willems holds a B.A. degree in music education and a California life teaching credential from Fresno Pacific University, as well as a professional clear administrative services credential. Mr. Willems started teaching in 1977 and was a Band Director for thirty years in the Dinuba/Reedley area. He was also Head Marching Band Director of the Reedley High School Band from 1985 to 2007. In 2007, he moved into school administration where he was employed as the Visual and Performing Arts Coordinator and the Administrator of the Dunlap Leadership Academy Charter School (an on-line high school) at Kings Canyon Unified School District. In 2014, Mr. Willems retired from education, and he is now enjoying time with his wife, children, and grandchildren. Mr. Willems has served on the Board of Directors since January 2001, served two years as Vice President – Secretary, and is currently |
JACK WILLIAMS, Director, Chief Financial Officer, and Vice President - Finance |
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Mr. Williams graduated from San Diego State University in 1974 with a B.S. in accounting. Following that, he has been employed in the field of accounting in a variety of industries, including agriculture, construction, heavy equipment sales, and manufacturing. He was employed as a financial analyst by Texaco Oil Corporation in the Bakersfield, California, area from 1997 until 1999, and as Chief Financial Officer for Goodwill Industries of South-Central California from March 2000 to November 2004. Mr. Williams was an interim controller for Diversified Utilities Services, a position he held from April 2005 to December 2005. He established his own C.P.A. practice in 1983, which he continues to own and operate. Mr. Williams has been a member of the Board since January 1995, and |
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Pismo CoastVillage,Inc. 2022-2023
b. OTHER OFFICERS AND SIGNIFICANT EMPLOYEES
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CHARLES AMIAN, Sr. Operations Manager | Aged 57 |
Charles Amian has been |
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c. FAMILY RELATIONSHIPS
There are no familial relationships between the Directors nor between the Directors and the Officers.
d. INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
To the knowledge of the Company, none of the officers or directors have been personally involved in any bankruptcy or insolvency proceedings. To the knowledge of the Company, none of the directors or officers have been convicted in any criminal proceedings (excluding traffic violations and other minor offenses) or are the subject of a criminal proceeding which is presently pending, nor have such persons been the subject of any order, judgment, or decree of any court of
competent jurisdiction, permanently or temporarily enjoining them from acting as an investment advisor, underwriter, broker or dealer in securities, or as an affiliated person, director or insurance company, or from engaging in or continuing in any conduct or practice in connection with any such activity or in connection with the purchase or sale of any security, nor were any of such persons the subject of a federal or state authority barring or suspending, for more than 60 days, the right of such person to be engaged in any such activity, which order has not been reversed or suspended.
e. AUDIT COMMITTEE FINANCIAL EXPERT
Our Board of Directors has determined that it does not have a member of its Audit Committee that qualifies as an "audit committee financial expert" as defined in Item 401(e) of Regulation S-B and is "independent" as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934, as amended.
We believe that the members of our Audit Committee are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. Due to the fact that the Directors of Pismo Coast Village, Inc. do not receive compensation for the services they provide in that capacity, the Company has been unable to nominate and retain a director with the required expertise to stand for election to the Board of Directors. However, until the time that our Audit Committee has a qualified audit committee financial expert, we believe our engagement of Glenn Burdette (GB), Certified Public Accountants, satisfies this requirement. GB provides the Company's quarterly compilation of the balance sheets and the related statements of income and retained earnings, and cash flows in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants.
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Pismo CoastVillage,Inc. 2022-2023
f. CODE OF ETHICS
On November 8, 2003, the Company's Board of Directors adopted the introduction to our code of ethical conduct. After further review, consideration was given to adopting a more comprehensive and detailed Code. At the meeting of the Executive Committee held June 19, 2009, the committee approved a recommendation to present a revised Code of Ethics to the full Board for adoption. At the Board of Directors’ meeting held July 18, 2009, the Board unanimously approved the revised and complete Code of Ethics that applies to all the Company's employees and directors, including our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions.
The complete text of the revised Code of Ethics is filed with this Form 10-K as Exhibit 14. In addition, the Company has posted the Code of Ethics on its website, www.pismocoastvillage.com.
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A copy of the Company’s Code of Ethics will be provided to any person, without charge, upon written request. Requests for the Company’s Code of Ethics should be addressed to:
Mr. Jay Jamison, Chief Executive Officer/Ms. Lesley Marr, General Manager
Pismo Coast Village, Inc.
165 South Dolliver Street
Pismo Beach CA 93449
g. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s directors, officers, and persons who beneficially own more than ten percent of a registered class of our equity securities within specified time periods to file with the SEC initial reports (“Form 3”) of beneficial ownership and reports of changes (“Form 4” and “Form 5”) in beneficial ownership of Common Stock of the Company. To the Company’s knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports were required, all of the Company’s officers, directors, and beneficial owners of greater than ten percent of the outstanding Common Stock complied with the Section 16(a) filing requirements for the fiscal year ended September 30, 2021.2023.
ITEM 11. EXECUTIVE COMPENSATION STOCK OPTIONS AND STOCK APPRECIATION RIGHTS GRANTED DURING THE LAST FISCAL YEAR
This information required by Item 11 is incorporated by reference in the Company’s Definitive Proxy Statement for the Annual Meeting of Shareholders to be held January 15, 2022,21, 2023, under the caption “Compensation of Directors and Executive Officers.” The Definitive Proxy Statement is expected to be filed with the Commission on or before December 17, 2021.14, 2023.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
Not applicable.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
a. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
No person owns beneficially of record more than 5% of the Company's securities.
b. SECURITY OWNERSHIP OF MANAGEMENT.
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Pismo CoastVillage,Inc. 2022-2023
The following sets forth the securities beneficially owned, directly, by all directors and officers as a group as of September 30, 2021:2023:
Board Member | Title of Class | *Amount of | Percent of Class |
David Bessom
| Common Stock | 1 Share |
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Sam Blank
| Common Stock | 1 Share |
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Harry Buchaklian
| Common Stock | 1 Share |
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Rodney Enns
| Common Stock | 1 Share |
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William Fischer
| Common Stock | 1 Share |
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Wayne Hardesty
Rancho Cucamonga CA 91730 | Common Stock | 1 Share |
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Marcus Johnson | Common Stock | 2 Shares |
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Karen King
| Common Stock | 1 Share |
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Garry Nelson
| Common Stock | 1 Share |
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Ronald Nunlist
| Common Stock | 4 Shares |
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George Pappi, Jr.
| Common Stock | 1 Share |
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Dwight Plumley
| Common Stock | 3 Shares |
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Jerry Roberts
| Common Stock | 3 Shares |
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Brian Skaggs
| Common Stock |
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Gary Willems
| Common Stock | 1 Share |
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Jack Williams
| Common Stock | 1 Share |
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All Officers and Directors as a Group | Common Stock |
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* Amount of Ownership: All such shares are owned beneficially and of record, and there are no additional shares known to the Company for which the listed beneficial owner has the right to acquire beneficial ownership as specified in Rule 13D-3(d)(1) of the Exchange Act.
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Pismo CoastVillage,Inc. 2022-2023
c. CHANGES IN CONTROL
Not applicable.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
There have been no transactions during the past two years, or proposed transactions, to which the Company was or is to be a party, in which any of the officers, directors, nominees, named shareholders, or family members of any such persons, had or is to have a direct or indirect material interest, other than transactions where competitive bids determine the rates or charges involved, or where the amount involved does not exceed $120,000, or where the interest of the party arises solely from the ownership of securities of the Company and the party received no extra or special benefit that was not shared by all shareholders.
EMPLOYMENT AGREEMENTS
See Item 11, Executive Compensation - Employment contracts and termination ofCurrent employment and change in control arrangements, for a discussion of the current employment contracts betweencontract, Pismo Coast Village, Inc., and Mr. Jamison.Lesley Marr.
OTHER ARRANGEMENTS
During the fiscal years 20212023 and 2020,2022, Pismo Coast Village, Inc. paid for various hospitality functions and for travel, lodging and hospitality expenses for spouses who occasionally accompanied directors when they were traveling on company business. Management believes that the expenditures wereexpenditure was to Pismo Coast Village, Inc.'s benefit.
CERTAIN BUSINESS RELATIONSHIPS
None.
(1)-(5) INDEBTEDNESS OF MANAGEMENT
None.
TRANSACTIONS WITH PROMOTERS
Not applicable.
DIRECTOR INDEPENDENCE
Our Board of Directors consists of shareholders of the Resort and therefore are not considered to be "independent" as defined by Section 121A of the American Stock Exchange Listing Standards. The Board considers all relevant facts and circumstances in its determination of independence of all members of the Board (including any relationships set forth in this Form 10-K under the heading "Certain Related Person Transactions"). As disclosed above, the Audit Committee, the Nominating Committee and the Personnel and Compensation/Benefits Committee members are not considered to be independent.
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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The shareholders will vote on the independent audit firm for the fiscal year ending September 30, 20222024, at the annual shareholders’ meeting held on January 15, 2022.20, 2024.
The following table discloses the fees that the Company was billed for professional services rendered by its independent public accounting firm, Brown Armstrong Accountancy Corporation, in each of the last two fiscal years.
Years Ended September 30, | Years ended September 30, | |||||||||
| 2021 | 2020 | 2023 | 2022 | ||||||
Audit fees (1) | $ | 51,900 | 53,100 | |||||||
Audi fees (1) | $ | 60,300 | $ | 51,900 | ||||||
Audit-related fees (2) | - | - | - | - | ||||||
Tax fees (3) | - | - | - | - | ||||||
All other fees (4) |
| 2,500 |
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| 2,500 |
| 2,500 | ||
Total | $ | 54,400 | $ | 55,600 | $ | 62,800 | $ | 54,400 |
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Pismo CoastVillage,Inc. 2022-2023
The previous table reflects fees billed for the audit of the Company's consolidated financial statements included in its Form 10-K and review of its quarterly reports on Form 10-Q.
(1) Reflects fees, if any, for consulting services related to financial accounting and reporting matters.
(2) Reflects fees billed for tax compliance, tax advice and preparation of the Company's federal tax return.
(3) Reflects fees, if any, for other products or professional services not related to the audit of the Company's consolidated financial statements and review of its quarterly reports, or for tax services.
(4) AUDIT COMMITTEE'S PREAPPROVAL POLICIES AND PROCEDURES
For the fiscal years ended September 30, 20212023, and September 30, 2020,2022, all audit related services, tax services and other services were pre-approved by the Audit Committee, which concluded that the provision of such services by Brown Armstrong were compatible with the maintenance of that firm's independence in the conduct of its auditing function.
(5) No effort expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year was attributed to work performed by persons other thanother-than the accountant's full-time, permanent employees.
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PART IVTable of Contents
Pismo CoastITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Village,EXHIBITS AND INDEX OF EXHIBITS
1. Financial Statements included in this Form 10-K Report:Inc. 2022-2023
2. Exhibits filed with this Form 10-K Report:
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: PISMO COAST VILLAGE, INC.
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and Chairman of the Board | Date: |
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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
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/s/ KAREN KING Karen King, Executive Vice President and Director | Date: | December 13, 2023 | |
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/s/ GARY WILLEMS Gary Willems, Vice President – Secretary and Director | Date: | December 13, 2023 | |
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