Commission File No. 1-5926
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
Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes
¨
No
x
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
¨
No
x
Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K 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, 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.
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
is a shell company (as defined in Rule 12b-2 of the Exchange Act).
The aggregate market value of the common
stock held by non-affiliates of the registrant at October 1, 2017 was $870,161.
As of April 30, 2017, there were 5,000,000
shares of the registrant’s common stock outstanding.
Report of Independent
Certified Public Accountants
Balance Sheets as of
April 30, 2017 and 2016
Statements of Operations
for Years ended April 30, 2017 and 2016
.
Statements
of Changes in Shareholders’ Equity (Deficiency) for Years ended April 30, 2017 and 2016
Statements of Cash Flows
for Years ended April 30, 2017 and 2016
Notes to Financial Statements
|
(b)
|
All schedules have been omitted because they are inapplicable, not required or the information
is included elsewhere in the financial statements or notes thereto.
|
There were no reports
on Form 8-K for the three months ended April 30, 2017.
SIGNATURES
In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned,
thereto duly authorized on October 31, 2017.
|
MILLER INDUSTRIES, INC.
|
|
|
|
/s/ Marc Napolitano
|
|
By:
|
Marc Napolitano, President
and Chief Executive Officer
|
In
accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in
the capacities indicated on October 31, 2017.
Signature
|
Title
|
|
|
/s/ Marc Napolitano
|
|
President, Chief Executive Officer
|
Marc Napolitano
|
(Principal Executive Officer)
(Principal Financial Officer)
(Principal Accounting Officer)
|
Report
of Independent Registered Accounting Firm
Shareholders and Board of Directors
Miller Industries, Inc.
Miami, Florida
I have audited the
accompanying balance sheets of Miller Industries, Inc. as of April 30, 2017 and 2016 , and the related statements of operations,
shareholders’ equity, and cash flows for each of the two years in the period ended April 30, 2017. These financial statements
are the responsibility of the Company’s management. My responsibility is to express an opinion on these financial statements
based on my audits.
I conducted my audits
in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards -require that
I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
The Company is not required to have, nor was I engaged to perform, an audit of its internal control over financial reporting. My
audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control
over financial reporting. Accordingly, I express no such opinion. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An Audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide
a reasonable basis for my opinion.
In my opinion, the
financial statements referred to above present fairly, in all material respects, the financial position of Miller Industries, Inc.
as of April 30, 2017 and 2016 and the results of its operations and its cash flows for each of the two years in the period ended
April 30, 2017, in conformity with accounting principles generally accepted in the United States of America.
|
/s/ Larry Wolfe
|
|
LARRY WOLFE
|
|
Certified Public Accountant
|
Miami, Florida
August 24, 2017
MILLER INDUSTRIES, INC.
BALANCE SHEET
APRIL 30, 2017 AND 2016
ASSETS
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
Investment Property:
|
|
|
|
|
|
|
|
|
Land
|
|
$
|
161,443
|
|
|
$
|
161,443
|
|
Building and Improvements
|
|
|
1,049,908
|
|
|
|
1,049,908
|
|
Machinery and Equipment
|
|
|
11,106
|
|
|
|
11,106
|
|
Furniture and Fixtures
|
|
|
10,251
|
|
|
|
10,251
|
|
Total Cost
|
|
$
|
1,232,708
|
|
|
$
|
1,232,708
|
|
Less: Accumulated Depreciation
|
|
|
965,819
|
|
|
|
953,934
|
|
Net Book Value
|
|
$
|
266,889
|
|
|
$
|
278,774
|
|
|
|
|
|
|
|
|
|
|
Other Assets:
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents
|
|
$
|
2,007,930
|
|
|
$
|
1.817,572
|
|
Accounts Receivable ( Less Allowance for Doubtful
|
|
|
|
|
|
|
|
|
Accounts of $0 in 2017 and $0 in 2016)
|
|
|
1,034
|
|
|
|
1,049
|
|
Prepaid Expenses and Other Assets
|
|
|
18,287
|
|
|
|
32,590
|
|
Prepaid Income taxes
|
|
|
16,343
|
|
|
|
4,213
|
|
Deferred Lease Incentive (Net of Accumulated
|
|
|
|
|
|
|
|
|
Amortization - $55,222 in 2017 and $ 48,080 in 2016)
|
|
|
|
|
|
|
7,142
|
|
Loan Costs, Less Accumulated Amortization of
|
|
|
|
|
|
|
|
|
$ 7,962 and $6,888 in 2017 and 2016, respectively
|
|
|
2,773
|
|
|
|
3,847
|
|
Deferred Tax Assets
|
|
|
39,084
|
|
|
|
40,416
|
|
Total Other Assets
|
|
$
|
2,085,451
|
|
|
$
|
1,906,829
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
2,352,340
|
|
|
$
|
2,185,603
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
Liabilities:
|
|
|
|
|
|
|
|
|
Mortgage and Notes Payable
|
|
$
|
1,026,340
|
|
|
$
|
1,070,920
|
|
Accounts Payable and Accrued Expenses
|
|
|
160,071
|
|
|
|
198,465
|
|
Tennant’s Deposits and Advance Rents
|
|
|
182,221
|
|
|
|
70,267
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
$
|
1,368,632
|
|
|
$
|
1,345,652
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ Equity:
|
|
|
|
|
|
|
|
|
Common Stock - $.05 par, 5,000,000 shares
|
|
|
|
|
|
|
|
|
Authorized; 5,000,000 shares in 2015 and 2014
|
|
$
|
250,000
|
|
|
$
|
250,000
|
|
Paid-In Capital
|
|
|
1,212,102
|
|
|
|
1,212,102
|
|
Deficit
|
|
|
(478,394
|
)
|
|
|
(622,151
|
)
|
|
|
|
|
|
|
|
|
|
Total Shareholders’ Equity
|
|
$
|
983,708
|
|
|
$
|
839,951
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
$
|
2,352,340
|
|
|
$
|
2,185,603
|
|
See Accompanying Notes to Financial Statements.
MILLER INDUSTRIES, INC.
STATEMENT OF OPERATIONS
YEARS ENDED APRIL 30, 2017 AND 2016
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Rental Income
|
|
$
|
524,580
|
|
|
$
|
576,422
|
|
Utilities and other reimbursement
|
|
|
101,923
|
|
|
|
104,178
|
|
Other Income
|
|
|
13,786
|
|
|
|
6,356
|
|
|
|
|
|
|
|
|
|
|
Total Revenues
|
|
$
|
640,289
|
|
|
$
|
686,956
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
Rental Expenses (Except Interest)
|
|
$
|
331,676
|
|
|
$
|
337,828
|
|
Administrative
|
|
|
54,957
|
|
|
|
60,852
|
|
Interest
|
|
|
31,520
|
|
|
|
30,692
|
|
|
|
|
|
|
|
|
|
|
Total Expenses
|
|
$
|
418,153
|
|
|
$
|
429,372
|
|
|
|
|
|
|
|
|
|
|
Income Before Tax Provision
|
|
$
|
222,136
|
|
|
$
|
257,584
|
|
|
|
|
|
|
|
|
|
|
Provision (Benefit) for Income Tax:
|
|
|
|
|
|
|
|
|
Federal Income Tax
|
|
$
|
68,504
|
|
|
$
|
79,713
|
|
State Income Tax
|
|
|
9,875
|
|
|
|
11,485
|
|
|
|
|
|
|
|
|
|
|
Total Provision for Income Tax
|
|
$
|
78,379
|
|
|
$
|
91,198
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
|
143,757
|
|
|
$
|
166,386
|
|
|
|
|
|
|
|
|
|
|
Income per Common Share (Basic)
|
|
$
|
.03
|
|
|
$
|
.03
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares of Common Stock Outstanding (Basic)
|
|
|
5,000,000
|
|
|
|
5,000,000
|
|
See Accompanying Notes to Financial
Statements.
MILLER INDUSTRIES, INC.
STATEMENT OF CASH FLOWS
YEARS ENDED APRIL 30, 2017 AND 2016
|
|
2017
|
|
|
2016
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
|
$
|
143,757
|
|
|
$
|
166,386
|
|
Adjustments to Reconcile Net Income to Net Cash
|
|
|
|
|
|
|
|
|
Provided by (used for) Operating Activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
11,885
|
|
|
|
11,885
|
|
Amortization
|
|
|
8,216
|
|
|
|
11,787
|
|
Deferred Tax Asset Valuation Adjustment
|
|
|
1,332
|
|
|
|
(592
|
)
|
|
|
|
|
|
|
|
|
|
Changes in Operating Assets and Liabilities:
|
|
|
|
|
|
|
|
|
(Increase) Decrease in Accounts Receivable
|
|
|
15
|
|
|
|
1,476
|
|
(Increase) Decrease in Prepaid Expenses and Other
|
|
|
2,174
|
|
|
|
31,909
|
|
Increase (Decrease) in Accounts Payable and Accruals
|
|
|
(38,395
|
)
|
|
|
(21,203
|
)
|
Increase (Decrease) in Tenant Deposits
And Rent Paid in Advance
|
|
|
105,954
|
|
|
|
(4,558
|
)
|
|
|
|
|
|
|
|
|
|
Net Cash Provided by (used by) Operating Activity
|
|
$
|
234,938
|
|
|
$
|
197,090
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
Acquisition of Property, Equipment, and Intangible
|
|
$
|
-------
|
|
|
$
|
-------
|
|
|
|
|
|
|
|
|
|
|
Net Cash (used by) Investing Activities
|
|
$
|
-------
|
|
|
$
|
-------
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
Principal Payments Under Borrowings
|
|
$
|
(44,580
|
)
|
|
$
|
(44,580
|
)
|
Proceeds from Exercise of Stock Options
|
|
|
|
|
|
|
|
|
Net Cash Provided by (used by) Financing Activities
|
|
$
|
(44,580
|
)
|
|
$
|
(44,580
|
)
|
|
|
|
|
|
|
|
|
|
Net Increase (Decrease) in Cash and Cash Equivalents
|
|
$
|
190,358
|
|
|
$
|
152,150
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents at the Beginning of Year
|
|
|
1,817,572
|
|
|
|
1,665,062
|
|
Cash and Cash Equivalents at the End of Year
|
|
$
|
2,007,930
|
|
|
$
|
1,817,572
|
|
|
|
|
|
|
|
|
|
|
Additional Cash Flow Information:
|
|
|
|
|
|
|
|
|
Cash Payments During the Year
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
30,380
|
|
|
$
|
30,753
|
|
Income Taxes
|
|
$
|
89,177
|
|
|
$
|
116,758
|
|
See Accompanying Notes to Financial Statements.
MILLER INDUSTRIES, INC.
STATEMENT OF SHAREHOLDERS’ EQUITY
YEARS ENDED APRIL 30, 2017 AND 2016
|
|
Common Stock
|
|
|
|
Shares
Issued
|
|
|
Amount
|
|
|
Additional
Paid-In
Capital
|
|
|
(Deficit)
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at April 30, 2015
|
|
|
5,000,000
|
|
|
$
|
250,000
|
|
|
$
|
1,212,102
|
|
|
$
|
(788,537
|
)
|
|
$
|
673,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income –2016
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
166,386
|
|
|
|
166,386
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at April 30, 2016
|
|
|
5,000,000
|
|
|
$
|
250,000
|
|
|
$
|
1,212,102
|
|
|
$
|
(622,151
|
)
|
|
$
|
839,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income –2016
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
143,757
|
|
|
|
143,757
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at April 30, 2017
|
|
|
5,000,000
|
|
|
$
|
250,000
|
|
|
$
|
1,212,102
|
|
|
$
|
(478,394
|
)
|
|
$
|
983,708
|
|
See Accompanying Notes to Financial Statements.
Miller Industries, Inc.
Notes to Financial Statements
MILLER
INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2017 AND 2016
NOTE A - Summary of Significant Accounting
Policies
This summary of accounting policies for
Miller Industries Inc. is presented to assist in understanding the Company’s financial statements. The accounting policies
conform to U.S. generally accepted accounting principles and have been consistently applied in preparation of the financial statements.
Nature
of Operations
-
Miller Industries, Inc., a Florida
corporation, currently and since August 1991, has been engaged in the ownership and management of 97,813 square feet of offices
and warehouse located in Miami, Florida. During August 1991, the Company discontinued its operations of manufacturing of aluminum
windows and doors pursuant to a plan of reorganization.
Real
Property
-
Property is carried at cost.
The Company calculates depreciation under the straight-line method at annual rates based upon the estimated service lives of each
type of asset. These service lives are generally as follows:
Building and Improvements
|
|
10 to 30 years
|
Machinery and Equipment
|
|
7 years
|
Furniture and Fixtures
|
|
7 years
|
Real property and equipment,
with an original cost of approximately $ 745,000, have been fully depreciated at April 30, 2017.
Deferred
Costs
-
Deferred lease incentive and
loan costs are carried at cost. The Company amortizes these assets on a straight-line basis up to 10 years.
Income
Taxes
-
The Company accounts for income
taxes under the liability method. Deferred income tax assets and liabilities are determined based on differences between the financial
reporting and tax base of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when
the differences are expected to be reversed.
The Company uses a two-step approach
to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining
if the weight of available evidence indicates it is more likely than not, that the position will be sustained on audit, including
resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount,
which is more than 50% (fifty percent) likely of being realized upon ultimate settlement. The Company considers many factors when
evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments. At April 30, 2016 and 2017,
respectively, the Company did not record any liabilities for uncertain tax positions.
Miller Industries, Inc.
Notes to Financial Statements
Earnings
Per Share
-
Basic earnings per share (“EPS”)
is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding
during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential
of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by
using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock
options or warrants). Diluted EPS excludes all dilutive potential of shares of common stock if their effect is anti-dilutive.
Cash
and Cash Equivalents
-
The Company considers all short-term
investments with an original maturity of three months or less to be cash equivalents.
The balances are insured by the
Federal Deposit Insurance Corporation up to $250,000. At April 30, 2017, and 2016 the Company’s uninsured bank balances approximated
$1,758,000 and $1,567,000 respectively.
Financial
Instruments
-
The carrying amounts
of cash and cash equivalents, other assets, accounts payable, and
debt approximate fair
value.
Concentrations
-
The Company is subject to certain
risk arising from the concentration of its tenant income from entities that comprise 10% or more of the Company’s revenue.
Tenant “A” 47% of Revenue. Tenant “B” 29% of Revenue. Tenant “C” 20% of Revenue.
Revenue
Recognition
-
The Company recognizes rental
income on a straight-line basis over the respective lease terms.
Environmental
Cleanup Matters
-
The Company expenses environmental
expenditures related to existing conditions resulting from past or current operations and from which no current or future benefit
is discernable. The Company determines its liability on a site-by-site basis and records a liability at the time when it is probable
and can be reasonably estimated.
Use
of Estimates
-
The preparation of financial
statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes Actual results could differ from those estimates.
The most significant estimates included in the preparation of the financial statements are related to income taxes, asset lives,
accruals and valuation allowances.
Miller Industries, Inc.
Notes to Financial Statements
Comprehensive
Income
-
ASC 220, Comprehensive Income
established standards for reporting and displaying comprehensive income and its components in the financial statements. The company
does not have any comprehensive income for fiscal 2016 and 2015.
Long-Lived
Assets
-
Under ASC 360, Property, Plant
and Equipment, The Company evaluates the carrying value of long-lived assets (including property, equipment and intangible assets)
when events or circumstances warrant such a review. If the carrying value of the long-lived asset is considered impaired, a loss
is recognized based on the amount by which the carrying value exceeds the fair value of the asset. The respective fair values of
the Company’s long-lived assets exceeded their carrying amounts at April 30, 2017 and April 30, 2016.
Segments
-
The Company operates in one segment
and therefore segment information is not presented.
Derivative
Instruments
-
Under ASC 815, Derivative and
Hedging, the Company will be required to recognize all derivative instruments, including certain derivative instruments embedded
in other contracts on the balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through income.
If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of derivatives will either be offset
against the change in fair value of hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive
income until the hedged item is recognized in earnings. The ineffective portion of a derivative’s change in fair value will be
immediately recognized in earnings.
Stock-Based
Compensation
-
In accordance with ASC 718, Compensation-
Stock Based Compensation, the Company accounts for share-based payments using the fair value method. Common shares issued to third
parties for non-cash consideration are valued based on the fair market value of the service provided or the fair market value of
the common stock on the measurement date, whichever is more readily determinable.
Pensions
and Other Post-Retirement Benefits
-
ASC 715, Compensation –
Retirement benefits, requires additional disclosures relating to how investment allocation decisions are made, the major categories
of plan assets and the inputs and valuation techniques used to measure the fair value of plan assets. The overall objective of
ASC 715 is to improve and standardize disclosures about pensions and other post-retirement benefits and to make the required information
more understandable.
The Company has not initiated
benefit plans to date which would require disclosure under the statement.
Miller Industries, Inc.
Notes to Financial Statements
Advertising
Costs
-
Advertising costs are charged
to operations in the period incurred. The Company has not incurred any advertising costs for fiscal 2016 and 2015.
Business
Concentrations
-
Rental income of the Company’s
office and warehouse building is subject to the economic conditions of the industrial real estate market place. Changes in this
industry may significantly affect management’s estimates and the Company’s performance.
Accounting
Changes and Error Corrections
-
The Company follows ASC 250,
Accounting Changes and Error Corrections. Changes in accounting principle are reported through retrospective application of the
new accounting principle to all prior periods. Errors in the financial statements of a prior period discovered subsequent to their
issuance shall be reported as a prior period adjustment by restating the prior period.
Tenant’s
Security Deposits
-
The Company requires security
deposits from lessees for the duration of the lease. The security deposits are refunded when the tenant vacates, provided the tenant
has not damaged the space and is current on rental payments.
Fair
Value Measurements and Disclosures
-
ASC 820, Fair Value Measurements
and Disclosures, applies whenever other standards require assets or liabilities to be measured at fair value and does not expand
the use of fair value in any new circumstances. ASC 820 established a hierarchy that prioritizes the information used in developing
fair value estimates.
The levels of fair value hierarchy
are as follows:
Level 1 inputs
utilize unadjusted quoted prices in active markets for identical assets or liabilities that the company has the ability to access;
Level 2 inputs
utilize other-than-quoted prices that are observable, either directly or indirectly. Level 2 inputs include quoted prices for similar
assets and liabilities in active markets, and inputs such as interest rates and yield curves that are observable at commonly quoted
intervals; and
Level 3 inputs
are unobservable and are typically based on our own assumptions, including situations where there is little, if any, market activity.
In certain cases, the inputs
used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the Company categorizes such
financial asset or liability based on the lowest level input that is significant to the fair value measurement in its entirety.
Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers
factors specific to the asset or liability.
Miller Industries, Inc.
Notes to Financial Statements
Both observable and unobservable
inputs may be used to determine the fair value of positions that are classified within the Level 3 category. As a result, the unrealized
gains and losses for assets within the Level 3 category can include changes in fair value that were attributable to both observable
and unobservable inputs. The Company has no instruments that require additional disclosure.
Fair
Value Option for Financial Instruments
-
The Company’s financial
instruments consist principally of cash, receivables, accounts payable and mortgage payable. Pursuant to ASC 820, Fair Value Measurement
s and Disclosures and ASC 825, Financial Instruments, the fair value of the Company’s financial instruments are determined
based upon Level “1” and Level “2” inputs.
NOTE B - Mortgage Payable
Principal balances outstanding
and details of notes payable are summarized as follows:
|
|
2017
|
|
|
2016
|
10-year note payable, collateralized by mortgage on land and building, improvements, personal property collateral assignment of all rents and leases, along with the personal guaranty of the Company’s Chairman of the Board to 50% of all sums due under the loan. In addition, the guarantor shall indemnify lender from any and all liability which may result from the environmental condition of the property. The note bears interest at ½ of 1% (.050%) rate under the lenders prime rate per annum. The Rate of interest is adjustable annually based on the current Prime at the anniversary date. The company’s annual interest Rate at April 30, 2017 is 3.00%. The note is payable in Monthly installments of $3,715, plus accrued interest, with a final payment of approximately $911,000 due November 2019.
|
|
|
|
|
|
|
|
|
$
|
1,026,340
|
|
|
$1,070,920
|
Payments of principal required
on the foregoing debt are as follows:
Fiscal Year Ending
|
2018
|
|
|
44,580
|
|
2019
|
|
|
44,580
|
|
2020
|
|
|
937,180
|
|
|
|
|
|
|
Total
|
|
$
|
1,026,340
|
|
Land, buildings and improvements,
with an approximate cost of $1,233,000 and an approximate net book value of $ 267,000 are pledged as collateral for these obligations.
NOTE C - Income Taxes
The provision (benefit) for income
taxes consists of the following:
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
Current
|
|
$
|
77,047
|
|
|
$
|
91,790
|
|
Deferred
|
|
|
(1,368
|
)
|
|
|
(592
|
)
|
Tax Benefit of Net
Operating Loss Carryforward
|
|
|
----
|
|
|
|
----
|
|
Deferred
Tax Adjustment and Changes to Valuation Allowance
|
|
|
2,700
|
|
|
|
----
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
78,379
|
|
|
$
|
91,198
|
|
Miller Industries, Inc.
Notes to Financial Statements
Deferred income taxes arise primarily
due to temporary differences in recognizing certain revenues and expenses for tax purposes, the required use of extended lives
for calculation of depreciation for tax purposes.
The components of the net deferred
tax asset at April 30, 2017 and 2016 are as follows:
Properties and Equipment principally due to
|
|
|
|
|
|
|
Depreciation
|
|
$
|
39,084
|
|
|
$
|
40,416
|
|
|
|
|
|
|
|
|
|
|
Total gross deferred tax assets
|
|
$
|
39,084
|
|
|
$
|
40,416
|
|
Less: Valuation allowance
|
|
|
---
|
|
|
|
---
|
|
Net Deferred Tax Asset
|
|
$
|
39,084
|
|
|
$
|
39,824
|
|
A valuation allowance is provided
to reduce the deferred tax assets to a level which, more likely than not, will be realized. The net deferred assets reflect management’s
assessment of the amount which will be realized from future taxable earnings or alternative tax strategies.
Miller Industries, Inc.
Notes to Financial Statements
NOTE C – Income Taxes (continued)
Total Federal tax expense for
years ended April 30, 2016 and 2015 differed from the amount computed by applying the U.S. federal income tax rate of 34% to income
(loss) from continuing operations before income tax for the following reasons:
|
|
2017
|
|
|
2016
|
|
|
|
Percent
Of Pre-Tax
|
|
|
Percent
Of Pre-Tax
|
|
|
|
Amount
|
|
|
Income
|
|
|
Amount
|
|
|
Income
|
|
Income before provision for income taxes
|
|
$
|
222,136
|
|
|
|
100
|
%
|
|
$
|
257,584
|
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Computed expected tax expense
|
|
$
|
75,526
|
|
|
|
34
|
%
|
|
$
|
87,579
|
|
|
|
34
|
%
|
Federal tax (benefit) of State Income Tax
|
|
|
(3,281
|
)
|
|
|
(1
|
%)
|
|
|
(3,905
|
)
|
|
|
(1
|
%)
|
Sur Tax Exemption
|
|
|
(6,053
|
)
|
|
|
(3
|
%)
|
|
|
(4,383
|
)
|
|
|
(2
|
%)
|
Non deductible items and deferred tax adj
|
|
|
2,312
|
|
|
|
1
|
%
|
|
|
422
|
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual Federal Tax
|
|
$
|
68,504
|
|
|
|
31
|
%
|
|
$
|
79,713
|
|
|
|
31
|
%
|
Tax years that remain subject
to examination are years 2012 and forward.
NOTE D - Rental Income
During 2017 the Company leased
warehouse and manufacturing space to three unrelated third parties under leases that expire at various dates thru fiscal 2020.
Rental income approximated $ 524,000 and $ 576,000 for fiscal 2017 and 2016, respectively. Rental income from these leases amounted
to 100 % of the total 2017 rental income and 100 % of the total 2016 rental income.
Future minimum rental income
under non-cancelable leases, excluding cost of living adjustments are as follows:
2018
|
|
$
|
504,000
|
|
2019
|
|
$
|
361,000
|
|
2020
|
|
$
|
81,000
|
|
Miller Industries, Inc.
Notes to Financial Statements
NOTE E - Rental Expenses (Except for Interest)
Rental expenses consisted of:
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
Commissions
|
|
$
|
13,345
|
|
|
$
|
16,736
|
|
Depreciation and Amortization
|
|
|
19,027
|
|
|
|
23,672
|
|
Insurance
|
|
|
25,652
|
|
|
|
27,077
|
|
Management Fees
|
|
|
60,000
|
|
|
|
60,000
|
|
Outside Services
|
|
|
4,867
|
|
|
|
3,966
|
|
Repairs and Maintenance
|
|
|
9,504
|
|
|
|
7,243
|
|
Utilities
|
|
|
83,099
|
|
|
|
89,980
|
|
Taxes and permits
|
|
|
116,182
|
|
|
|
109,154
|
|
|
|
|
|
|
|
|
|
|
Totals
|
|
$
|
331,676
|
|
|
$
|
337,828
|
|
NOTE F - Administrative Expenses
Administrative expenses consisted of:
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
Accounting and Legal
|
|
$
|
25,504
|
|
|
$
|
24,895
|
|
Penalties
|
|
|
50
|
|
|
|
1,241
|
|
Office Supplies/Postage/Other
|
|
|
1,078
|
|
|
|
890
|
|
Stockholders’ Expenses
|
|
|
26,153
|
|
|
|
31,933
|
|
Telephone
|
|
|
2,172
|
|
|
|
1,893
|
|
|
|
|
|
|
|
|
|
|
Totals
|
|
$
|
54,957
|
|
|
$
|
60,852
|
|
NOTE G - Related Party Transactions
Management fees and reimbursements
in the amount of $ 60,000 and $60,000 for 2017 and 2016 was paid to Angelo Napolitano, CEO, Harnap Corp which is controlled by
Mr. Napolitano, was reimbursed for bookkeeping services, repairs, legal and office supplies for approximately $21,610 and $20,200
for 2017 and 2016. The mortgage note payable is guaranteed by the company’s C.E.O. up to 50% of all sums due.
NOTE H – Commitments, Contingent Liabilities, Other
Matters, and Subsequent Events
In April
2015, the FASB issued ASU No. 2015-03, simplifying the presentation of debt issuance costs. ASU 2015-03 is effective for fiscal
years beginning after December 15, 2015. Debt issuance costs will be required to be classified as a direct reduction of the debt
balances. Amortization of Debt Issuance Costs using the effective interest method with any amortization recorded as part of interest
expense. We have adopted the ASU for fiscal years and interim periods beginning May 1, 2016.
In April
2017, the client entered into a seven month lease of approximately 33,667 square feet of space through Nov of 2017. The rent was
prepaid for the full term of the lease.