UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2020
Commission file number: 1-7865
HMG/Courtland Properties, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
59-1914299
(IRS Employer Identification No.)
1870 S. Bayshore Drive
Coconut Grove (Miami),
Florida 33133
(Address of principal executive offices)
305-854-6803
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
| Common Stock, par value $1.00 per share | HMG | NYSE Amex |
Securities registered pursuant to Section 12(g) of the Act
None
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 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 x No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨
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 | ¨ |
| Non-accelerated Filer | ¨ | Smaller Reporting Company | x |
| 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. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
The aggregate market value of the voting stock held by non-affiliates of the Registrant (excludes shares of voting stock held by directors, executive officers and beneficial owners of more than 10% of the Registrant’s voting stock; however, this does not constitute an admission that any such holder is an “affiliate” for any purpose) based on the closing price of the stock as traded on the NYSE Amex Exchange on the last business day of the Registrant’s most recently completed second fiscal quarter (June 30, 2020) was $4,580,457. The number of shares outstanding of the issuer’s common stock, $1 par value as of the latest practicable date: 1,007,248 shares of common stock, $1 par value, as of March 30, 2021.
EXPLANATORY NOTE
This Amendment No. 1 on Form 10-K/A (this “Amendment”) amends the Annual Report of HMG/COURTLAND PROPERTIES, INC. on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission on March 30, 2021 (the “Original Form 10-K”). This Amendment is being filed for the sole purpose of updating the audit opinion which the audit opinion signature was omitted in error. We have not updated the information contained herein for events occurring subsequent to March 30, 2021, the filing date of the Original Form 10-K. Except as noted in this Explanatory Note, this Amendment does not alter or amend any of our other disclosures contained in the Original Form 10-K.
| -1- |
|
PART IV |
Item 15 |
PART IV
ITEM 15 EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES
The following exhibit is filed as part of this report:
| 23.01* | Report of Independent Registered Public Accounting Firm |
| * | Filed herewith. |
| -2- |
|
PART IV |
Signatures |
SIGNATURES
Under the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the authorized persons below.
DATED March 30, 2021
HMG/Courtland Properties, Inc.
|
/s/ MAURICE WIENER |
|
| Maurice Wiener | |
| Chief executive officer | |
| (Principal Executive Officer) |
| -3- |
Exhibit 23.01
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders
HMG/Courtland Properties, Inc. and Subsidiaries
Coconut Grove, Florida
We have audited the accompanying consolidated balance sheets of HMG/Courtland Properties, Inc. (a Delaware corporation) and Subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of income, changes in stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2020, and the related notes to the consolidated financial statements (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated 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 audit to obtain reasonable assurance about whether the consolidated 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 consolidated 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 consolidated 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 consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Other Investments Impairment Assessment
Description of Matter
As disclosed in Note 4 to the consolidated financial statements, the Company’s portfolio of other investments consists of 46 individual investments, primarily in limited partnerships, with an aggregate carrying valuing of $4,940,403. The valuation of other investments requires significant judgement due to the absence of quoted market prices, inherent lack of liquidity, and the long-term nature of such assets, and are carried at cost less distributions and other than temporary unrealized losses. These investments are evaluated for impairment as events or changes in circumstances indicate that the carrying value of the investment may not be recoverable. The Company performed impairment analyses at the end of each quarter to determine the recoverability of the carrying value of each investment. Accordingly, the Company recognized other-than-temporary impairment charges of $407,329 during the Company’s fiscal year, to write down the carrying amount to fair value of two of its other investments.
Auditing management’s impairment analysis involved a higher degree of judgment and an increased extent of effort, due to the estimation uncertainty resulting from the unobservable nature of the inputs used in the valuations and the limited number of comparable market transactions for the same or similar investments.
How We Addressed the Matter in Our Audit
Our audit procedures included the following:
| · | Obtained an understanding of the internal controls and processes in place over management’s impairment assessments. |
| · | We inquired of management regarding changes to the investment portfolio and investment strategies. |
| · | We evaluated the valuation methodologies used by the Company to determine whether they were consistent with generally accepted accounting principles. |
| · | We obtained a rollforward of the investment balance, vouching a sample of contributions into investments and distributions from investments, in order to recalculate the gain for the period. |
| · | We selected a sample of investments and confirmed the cumulative capital contributions and ownership interests directly with the investees. |
/s/ Cherry Bekaert LLP
We have served as the Company’s auditor since 2010.
Coral Gables, Florida
March 30, 2021