UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)
[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2018
OR
[  ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to ___________
Commission file number 0-8463

PISMO COAST VILLAGE, INC.

(Exact name of registrant as specified in its charter)

   California                                                                                                                                                                                          95-2990441

(State or other jurisdiction of                                                                                                                                                     (IRS Employer ID No.)

incorporation or organization)

165 South Dolliver Street, Pismo Beach, CA                                                                                                                                                  93449

(Address of Principal Executive Offices)                                                                                                                                                     (Zip Code)

(805) 773-5649

Registrant’s telephone number, including area code

(Former name, former address and former fiscal year, if changed since last report)

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 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 and posted on its corporate Web Site, 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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.

[  ] Large accelerated filer	[  ] Accelerated filer
[X] Non-accelerated filer	[X] Smaller reporting company
	[  ] Emerging growth company

1

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).       YES [  ]            NO [X]

APPLICABLE ONLY TO ISSUERS 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 [  ]            NO [  ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.            1,775

PART I – FINANCIAL INFORMATION

ITEM 1.       FINANCIAL STATEMENTS

The following financial statements and related information are included in this Form 10-Q, Quarterly Report.

1.   Accountant’s Review Report

2.   Balance Sheets

3.   Statements of Income and Retained Earnings

4.   Statements of Cash Flows

5.   Notes to Financial Statements (Unaudited)

The financial information included in Part I of this Form 10-Q has been reviewed by Brown Armstrong Accountancy Corporation, the Company's Certified Public Accountants, and all adjustments and disclosures proposed by said firm have been reflected in the data presented. The information furnished reflects all adjustments, which, in the opinion of management, are necessary to a fair statement of the results for the interim periods.

ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

STATEMENT ON FORWARD-LOOKING INFORMATION

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.

2

OVERVIEW

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 forty-five free nights camping annually. Additional revenues come from RV storage and spotting, RV service and repair, on-site convenience store, and other ancillary activities such as laundromat, arcade, and bike rental.

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. Fiscal year-to-date, site occupancy is down 5.4%, or 1,611 nights, primarily due to weather, and during the previous year the Company donated 705 nights to Thomas Fire evacuees. Based on advanced reservation deposits, occupancy projections are even compared to this time last year. Revenues from ancillary operations, such as the General Store, RV Service, arcade, laundromat, and bike rental, are down 2.2% year-to-date, and management feels this trend will improve as business moves into the primary camping season. Industry projections anticipate positive business trends and reasonable fuel prices as the summer season approaches.

RV storage and towing continue to be a primary source of revenue for the Company. 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. Revenues for RV storage and towing are down 2.2% compared to the previous year due to weather-related reduced site occupancy and losing a commercial storage customer.

Ongoing investment in resort improvements has assured resort guests and shareholders a top quality, up-to-date facility. This quality and pride of ownership was evident when the National Association of RV Parks and Campgrounds Park of the Year was awarded to the resort for 2007-08. In addition, in a national “My Favorite Campground” contest sponsored by Woodall’s, Pismo Coast Village was voted as one of the top ten favorite campgrounds for 2011. Also, Pismo Coast Village was one of thirty-two parks nationally to receive an industry rated “A” park from over 33,000 surveys for customer satisfaction in 2018.

The Company’s commitment to quality, value, and enjoyment is underscored by the business’s success due to word of mouth and referrals from guests. In addition, investment for online marketing, ads in the leading national directory, and trade magazine advertising formulates most of the business-marketing plan.

RESULTS OF OPERATIONS

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 from lease revenues from laundry, restaurant, and arcade operations by third party lessees; and (b) Retail Operations, consisting of revenues from General Store operations and from RV parts and service operations.

Income from Resort Operations for the three-month period ended December 31, 2018, decreased $7,504, or 0.5%, from the same period in 2017. This decrease is primarily due to a $1,090, or 0.1%, decrease in year-to-date site revenue, and a $10,089, or 2.2%, decrease in RV storage and towing activity. Vending revenue, which includes income from the arcade, restaurant, and laundromat, increased $4,924, or 21.6%.

Seasonal fluctuations within this industry are expected, and management projects that income for the fourth quarter will be approximately 40% of its annual revenue. This approximation is based on historical information.

3

Income from retail operations decreased by $10,578 for the three-month period ended December 31, 2018, 4.1% below the same period in 2017. The General Store income decreased $12,450, or 8.9%, while the RV Service and Repair income increased revenue by $1,873, or 1.6%, compared to the previous year. This decrease in revenue for the General Store operation was due to weather and lower site occupancy for the period.

The Company anticipates slight to moderate increases in both income from resort operations and in retail operations as the fiscal year progresses.

Operating expenses for the three-month period ending December 31, 2018, increased $86,773, or 6.7%, above the same period ended December 31, 2017. This reflects an increase in labor, pension plan match, credit card expense, electricity, repairs and maintenance, and advertising. Other operating costs remain consistent with the prior year and are considered well managed to create an effective operation.

Cost of goods sold expenses for the three-month period ended December 31, 2018, are 49.9%, compared to 44.5% for the same period in 2017, which is within the guidelines established by management for the individual category sales of RV supplies and General Store merchandise.

Interest expense for the three-month period ended December 31, 2018, was $2,560, compared to $2,408 for the same period ending 2017.

Income before provisions for income taxes for the three-month period ended December 31, 2018 decreased by $111,103 below the same period in 2017. This decrease in income before provision for income taxes is a result of increased operating expenses and decrease in total income.

Due to the nature of business and economic cycles and trends, rates may be adjusted accordingly, if deemed necessary. Although the supply-demand balance generally remains favorable, future-operating results could be adversely impacted by weak demand. This condition could limit the Company's ability to pass through inflationary increases in operating costs as higher rates.

Increases in transportation and fuel costs or sustained recessionary periods could also unfavorably impact future results. However, the Company believes that its financial strength and market presence will enable it to remain extremely competitive. It is anticipated the published rates will continue to market site usage at its highest value and not negatively impact the Company's ability to capture an optimum market share.

LIQUIDITY

The Company's current cash position, as of December 31, 2018, is $4,269,231, which is 53.0% more than the same position in 2017. The cash balance increased $66,795 from the fiscal year ended September 30, 2018, due to capital expenditures. The Company has maintained cash balances in anticipation for large capital expenditures necessary to upgrade the resort. The Company has also maintained a line of credit of $500,000 to insure funds will be available, if required.

Accounts payable and accrued liabilities increased $33,808 above the same period last year and increased $105,183 since the 2018 fiscal year end, which reflects a timing of capital projects and accrued vacation. All undisputed payables have been paid in full according to the Company's policy.

Working capital increased to $2,450,863 at the end of the first quarter of fiscal year 2019, compared with $2,317,928 at the end of fiscal year 2018.

4

CAPITAL RESOURCES AND PLANNED EXPENDITURES

The Company plans capital expenditures of approximately $950,000 in fiscal year 2019 to further enhance the resort facilities and services. These projects include building a new RV Service Repair facility; purchase a new trailer tow truck, resort surveillance upgrade, and a lift for the RV Service and Repair facility. Funding for these projects is expected to be from normal operating cash flows and, if necessary, supplemented with outside financing. These capital expenditures are expected to increase the resort’s value to its shareholders and the general public.

Capital expenditures are consistent with prior years and operations and are expected to provide adequate resources to support the amounts committed to complete the authorized capital projects during the fiscal year. Second quarter site occupancy and storage fill are expected to be consistent with that of the past year. Capital projects are designed to enhance the marketability of the camping sites and enhance support facilities.

DISCLOSURE CONCERNING WEBSITE ACCESS TO COMPANY REPORTS

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 (SEC).

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 at 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 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEM 4. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the “1934 Act”), as of December 31, 2018, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer/General Manager (our principal executive officer) and our Chief Financial Officer (our principal financial officer). Based upon and as of the date of that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as described in Item 8A(T) included with our Annual Report on Form 10-K for the year ended September 30, 2018.

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 1934 Act is recorded, processed, summarized and reported within the time periods specified in the SEC’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 1934 Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

5

INTERNAL CONTROL OVER FINANCIAL REPORTING

There have not been any changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) promulgated by the SEC under the 1934 Act) during the three-months ended December 31, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II -- OTHER INFORMATION

ITEM 1.       LEGAL PROCEEDINGS

No pending legal proceedings against the Company other than routine litigation incidental to the business.

ITEM 2.       UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not Applicable

ITEM 3.       DEFAULTS UPON SENIOR SECURITIES

Not Applicable

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The annual meeting for the shareholders of Pismo Coast Village, Inc. was held Saturday, January 19, 2019, at 9:00 a.m. at the South County Regional Center, 800 West Branch Street, Arroyo Grande, California 93420. At that meeting, the following Directors were elected to serve until the annual meeting in January 2020 or until successors are elected and have qualified. Following each elected Director's name is the total number of votes cast for that Director:

Bessom, David	666
Blank, Sam	640
Buchaklian, Harry	660
Enns, Rodney	661
Fischer, William	642
Hardesty, Wayne	643
Hearne, Dennis	703
Hughes, Terris	662
Johnson, Marcus	668
King, Karen	644
Nelson, Garry	644
Nunlist, Ronald	641
Pappi, Jr., George	696
Plumley, Dwight	733
Roberts, Jerry	697
Skaggs, Brian	644
Willems, Gary	661
Williams, Jack	642

Further, the following additional matters were voted upon at the meeting, and the number of affirmative votes and negative votes cast with respect to each such matter is set forth below:

Proposal to approve the selection of Brown Armstrong Accountancy Corporation to serve as independent certified public accountants for the Company for Fiscal Year 2018 - 2019: 

Affirmative Votes	663
Negative Votes	1
Abstentions	15

6

ITEM 5.       OTHER INFORMATION

The annual meeting of the shareholders of Pismo Coast Village, Inc. was held Saturday, January 19, 2019, at 9:00 a.m. at the South County Regional Center, 800 West Branch Street, Arroyo Grande, California 93420. Following that meeting, the newly elected Board held a reorganizational meeting at which the following officers were elected to serve until the next Annual Shareholders’ Meeting:

President	Terris Hughes
Executive Vice President	Garry Nelson
V. P. – Finance/Chief Financial Officer	Wayne Hardesty
V. P. – Operations	Rodney Enns
V. P. – Secretary	George Pappi, Jr.
Assistant Corporate Secretary	Jay Jamison

ITEM 6.       EXHIBITS

Exhibit No.	Description of Exhibit
27	Financial Data Schedule
99	Accountant’s Review Report
31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Terris Hughes, President and Chairman of the Board)
31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Jay Jamison, Chief Executive Officer and principal executive officer)
31.3	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Wayne Hardesty, Chief Financial Officer, principal financial officer and principal accounting officer)
32.1	Certification Pursuant to 18 U. S. C. Subsection 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Terris Hughes, President and Chairman of the Board)
32.2	Certification Pursuant to 18 U. S. C. Subsection 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Jay Jamison, Chief Executive Officer and principal executive officer)
32.3	Certification Pursuant to 18 U. S. C. Subsection 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Wayne Hardesty, Chief Financial Officer, principal financial officer and principal accounting officer)

7

SIGNATURES

Pursuant to the requirements 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.

PISMO COAST VILLAGE, INC.

(Registrant)

Date:          February 14, 2019

Signature:   /s/ TERRIS HUGHES                                                                

Terris Hughes, President and Chairman of the Board

Date:          February 14, 2019

Signature:   /s/ WAYNE HARDESTY                                                           

Wayne Hardesty, V.P. - Finance/Chief Financial Officer

(principal financial officer and principal accounting officer)

Date:          February 14, 2019

Signature:   /s/ JAY JAMISON                                                                     

Jay Jamison, General Manager/Chief Executive Officer

(principal executive officer)

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REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Board of Directors

and Stockholders of Pismo Coast Village, Inc.

165 South Dolliver Street

Pismo Beach, California

Results of Review of Interim Financial Information

We have reviewed the balance sheets of Pismo Coast Village, Inc., (the Company) as of December 31, 2018 and 2017, and the related statements of income and comprehensive income for the three-month period ended December 31, 2018 and 2017, and statements of cash flows for the three-month periods then ended, and the related notes (collectively referred to as the interim financial statements). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the balance sheet of the Company as of December 31, 2018, and the related statements of income, comprehensive income, retained earnings, and cash flows for the year then ended (not presented herein); and in our report dated November 23, 2018, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying balance sheet as of December 31, 2018, is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived .

Basis for Review Results

These interim financial statements are the responsibility of the Company’s management. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. 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.

BROWN ARMSTRONG ACCOUNTANCY CORPORATION

Bakersfield, California

We have served as the Company’s auditor since 2005.

Bakersfield, California

February 14, 2019

9

PISMO COAST VILLAGE, INC. BALANCE SHEETS DECEMBER 31, 2018 AND 2017 AND SEPTEMBER 30, 2018
	December 31, 2018 (Unaudited)		September 30, 2018 (Audited)		December 31, 2017 (Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	4,269,231	$	4,202,436	$	2,791,031
Accounts receivable		28,768		55,409		20,377
Inventories		196,482		182,437		206,922
Prepaid expenses		144,211		15,423		158,726
Total current assets		4,638,692		4,455,705		3,177,056
Property and equipment
Net of accumulated depreciation and amortization		14,606,379		14,607,089		14,653,545
Investments		83,835		111,204		-
Total Assets	$	19,328,906	$	19,173,998	$	17,830,601
The accompanying notes are an integral part of these financial statements.

10

PISMO COAST VILLAGE, INC. BALANCE SHEETS DECEMBER 31, 2018 AND 2017 AND SEPTEMBER 30, 2018
	December 31, 2018 (Unaudited)		September 30, 2018 (Audited)		December 31, 2017 (Unaudited)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable and accrued liabilities	$	357,044	$	251,861	$	323,236
Accrued salaries and vacation		99,153		338,106		86,828
Rental deposits		1,629,495		1,499,084		1,497,514
Income taxes payable		65,700		8,300		134,200
Current portion of capital lease obligations		36,437		40,426		45,098
Total current liabilities		2,187,829		2,137,777		2,086,876
Long-Term Liabilities
Deferred taxes		505,600		520,300		795,400
Capital lease obligations, net of current portion		160,268		168,476		121,448
Total Liabilities		2,853,697		2,826,553		3,003,724
Stockholders’ Equity
Common stock – no par value, 1,800 shares issued      1,775 shares outstanding at      December 31, 2018 and 2017, respectively		5,569,268		5,569,268		5,569,268
Retained earnings		10,847,106		10,700,173		9,257,609
Accumulated other comprehensive income		58,835		78,004		-
Total stockholders’ equity		16,475,209		16,347,445		14,826,877
Total Liabilities and Stockholders’ Equity	$	19,328,906		19,173,998	$	17,830,601
The accompanying notes are an integral part of these financial statements.

11

PISMO COAST VILLAGE, INC. STATEMENTS OF OPERATIONS (UNAUDITED) THREE MONTHS ENDED DECEMBER 31, 2018 AND 2017
	Three Months Ended December 31,
	2018		2017
Income
Resort operations	$	1,568,813	$	1,576,317
Retail operations		244,507		255,085
Total income		1,813,320		1,831,402
Costs and Expenses
Operating expenses		1,378,452		1,291,679
Cost of goods sold		121,897		113,554
Depreciation		105,009		106,855
Total costs and expenses		1,605,358		1,512,088
Income from operations		207,962		319,314
Other Income (Expense)
Interest/dividend income		1,531		1,130
Interest expense		(2,560)		(2,408)
Total other income (expense)		(1,029)		(1,278)
Income Before Provision for Income Tax		206,933		318,036
Provision for Income Tax		60,000		136,400
Net Income		146,933		181,636
Other Comprehensive Income
Change in unrealized holding gains on available-for-sale securities,     net of change in applicable deferred taxes of $8,200		(19,169)		-
Total other comprehensive loss		(19,169)		-
Total Comprehensive Income	$	127,764	$	181,636
Net Income Per Share		82.78		102.33
Total Comprehensive Income Per Share	$	71.98	$	102.33
The accompanying notes are an integral part of these financial statements.

12

PISMO COAST VILLAGE, INC. STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED) DECEMBER 31, 2018, SEPTEMBER 30, 2018 AND 2017
						Accumulated Other Comprehensive Income
	Common Stock			Retained Earnings
								Total
	Shares		Amount
Balance – December 31, 2017	1,775	$	5,569,268	$	9,257,609	$	-	$	14,826,877
Net Income					577,695				577,695
Balance – March 31, 2018	1,775	$	5,569,268	$	9,835,304	$	-	$	15,404,572
Net Income			-		441,584		-		441,584
Balance – June 30, 2018	1,775	$	5,569,268	$	10,276,888	$	-	$	15,846,156
Net Income	-		-		423,285		-		423,285
Other comprehensive income	-		-		-		78,004		78,004
Balance – September 30, 2018	1,775	$	5,569,268	$	10,700,173	$	78,004	$	16,347,445
Net Income	-		-		146,933		-		146,933
Other comprehensive loss	-		-		-		(19,169)		(19,169)
Balance – December 31, 2018	1,775	$	5,569,268	$	10,847,106	$	58,835	$	16,475,209
The accompanying notes are an integral part of these financial statements.

13

PISMO COAST VILLAGE, INC. STATEMENTS OF CASH FLOWS (UNAUDITED) THREE MONTHS ENDED DECEMBER 31, 2018 AND 2017
		2018			2017
Cash Flows From Operating Activities
Net Income			$	146,933			$	181,636
Adjustments to reconcile net income to net   cash provided by (used in) operating activities:
Depreciation and amortization	$	105,009			$	106,855
Changes in operating assets and liabilities:
Decrease in accounts receivable		26,641				884
(Increase) in inventories		(14,045)				(15,899)
(Increase) in prepaid expenses		(128,788)				(138,750)
Increase in accounts payable and   accrued liabilities		105,183				55,486
(Decrease) in accrued salaries and vacation		(238,953)				(239,254)
Increase in rental deposits		130,411				8,628
Increase in Income taxes payable		57,400				81,600
Deferred taxes		(6,500)				(15,200)
Total adjustments				36,358				(155,650)
Net cash provided by (used in) operating   activities				183,291				25,986
Cash Flows From Investing Activities
Capital expenditures		(104,299)				(34,528)
Net cash used in investing activities				(104,299)				(34,528)
Cash Flows from Financing Activities
Principal payments on capital lease obligations		(12,197)				(12,193)
Net cash used in financing activities				(12,197)				(12,193)
Net increase (decrease) in cash and   cash equivalents				66,795				(20,735)
Cash and Cash Equivalents – Beginning of   Period				4,202,436				2,811,766
Cash and Cash Equivalents – End of Period			$	4,269,231			$	2,791,031
Schedule of Payments of Interest and Taxes
Cash paid for interest			$	2,560			$	2,408
The accompanying notes are an integral part of these financial statements.

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PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2018 AND 2017 AND SEPTEMBER 30, 2018

NOTE 1 – NATURE OF BUSINESS

Pismo Coast Village, Inc. (the Company) is a recreational vehicle camping resort. Its business is seasonal in nature with the fourth quarter, the summer, being its busiest and most profitable.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue and Cost Recognition

The Company's revenue is recognized on the accrual basis as earned based on the date of stay. Expenditures are recorded on the accrual basis whereby expenses are recorded when incurred, rather than when paid.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. As of December 31, 2018, September 30, 2018 and December 31, 2017 the Company had $6,075, $6,070 and $6,056 of cash equivalents, respectively.

Allowance for Doubtful Accounts

It is the policy of management to review the outstanding accounts receivable at year-end, as well as historical bad debt write-offs, and establish an allowance for doubtful accounts for estimated uncollectible accounts. Management did not believe an allowance for doubtful accounts was necessary as of December 31, 2018, September 30, 2018, or December 31, 2017.

Inventories

Inventories have been valued at the lower of cost or market on a first-in, first-out basis. Inventories are comprised primarily of finished goods in the general store and parts in the RV shop.

Property and Equipment

All property and equipment are recorded at cost. Depreciation of property and equipment is computed using straight-line method based on the cost of the assets, less allowance for salvage value, where appropriate. Depreciation rates are based upon the following estimated useful lives:

Building and park improvements	5 to 40 years
Furniture, fixtures, equipment and leasehold improvements	3 to 31.5 years
Transportation equipment	5 to 10 years

Investments

Investments 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 Codification (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, on 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 specific identification method.

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PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2018 AND 2017 AND SEPTEMBER 30, 2018

PAGE 2

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair Value Measurements

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 disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset 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.

Level 1:  Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.

Level 2:  Inputs to the valuation methodology include:

*     Quoted prices for similar assets and liabilities in active markets;

*     Quoted prices for identical or similar assets or liabilities in active markets;

*     Inputs other than quoted prices that are observable for the asset or liability;

*     Inputs that are derived principally from or corroborated by observable market data by correlation or

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:  Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The following is a description of the valuation methodologies used for assets measured at fair value:

Investments:  Investments in common stock are recorded at fair value based upon quoted market prices using Level 1 inputs.

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 December 31, 2018, the following sets forth by level, within the fair value hierarchy, the Company’s assets at fair value:

	Level 1		Level 2		Level 3
Investment in common stock	$	83,835	$	-	$	-
Total assets at fair value	$	83,835	$	-	$	-

At September 30, 2018, the following sets forth by level, within the fair value hierarchy, the Company’s assets at fair value:

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PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2018 AND 2017 AND SEPTEMBER 30, 2018

PAGE 3

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair Value Measurements (continued)

	Level 1		Level 2		Level 3
Investment in common stock	$	111,204	$	-	$	-
Total assets at fair value	$	111,204	$	-	$	-

Earnings Per Share

The earnings per share are based on the 1,775 shares outstanding. The financial statements report only basic earnings per share, as there are no potentially dilutive shares outstanding.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Advertising

The Company follows the policy of charging the costs of non-direct response advertising as incurred. Advertising expense was $24,334 and $10,119 for the three months ended December 31, 2018 and 2017, respectively. Advertising expense was included in operating expenses on the statement of operations.

Concentration of Credit Risk

At December 31, 2018, September 30, 2018, and December 31, 2017, the Company had cash deposits of $2,405,870, $2,301,721 and $892,188, respectively, in excess of the $250,000 federally insured limit with Pacific Premier Bank. However, because Pacific Premier Bank is a member of 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.

Reclassifications

Certain reclassifications have been made to prior year balances to conform to current year presentation. These reclassifications had no effect on the Company’s results of operations or financial position.

Income Taxes

The Company uses the asset-liability method of computing deferred taxes in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Income Taxes topic. ASC 740 requires, among other things, that if income is expected for the entire year, but there is a net loss to date, a tax benefit is recognized based on the annual effective tax rate.

17

PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2018 AND 2017 AND SEPTEMBER 30, 2018

PAGE 4

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income Taxes (continued)

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 December 31, 2018, management has considered its tax positions and believes that the Company did not maintain any uncertain tax positions under this approach and, accordingly, all tax positions have been fully recorded in the provision for income taxes. It is the policy of the Company to consistently classify interest and penalties associated with income tax expense separately from the provision for income taxes, and accordingly no interest or penalties associated with income taxes have been included in this calculation, or separately in the Statement of Operations and Retained Earnings. The Company does not expect any material changes through December 31, 2019. Although the Company does not maintain any uncertain tax positions, tax returns remain subject to examination by the Internal Revenue Service for fiscal years ending on or after September 30, 2016 and by the California Franchise Tax Board for fiscal years ending on or after September 30, 2015.

NOTE 3 – PROPERTY AND EQUIPMENT

At December 31, 2018, September 30, 2018, and December 31, 2017, property and equipment included the following:

	December 31, 2018		September 30, 2018		December 31, 2017
Land	$	10,394,746	$	10,394,746	$	10,394,746
Building and resort improvements		11,353,001		11,353,001		11,343,482
Furniture, fixtures, equipment and     leasehold improvements		666,768		666,768		666,768
Transportation equipment		741,437		709,115		704,359
Construction in progress		397,466		325,489		178,853
		23,553,418		23,449,119		23,288,208
Less: accumulated depreciation		(8,947,039)		(8,842,030)		(8,634,663)
Total	$	14,606,379	$	14,607,089	$	14,653,545

Depreciation expense for the three months ended December 31, 2018 and 2017 was $105,009 and $106,855 respectively.

At December 31, 2018, September 30, 2018, and December 31, 2017, the cost of assets under capital lease was $317,401, $374,171, and $292,802, respectively, and related accumulated amortization was $152,714, $196,397, and $158,245, respectively. Amortization expense on assets under capital lease was $12,140 and $10,909 for the three months ended December 31, 2018 and 2017, respectively.

NOTE 4 - LINE OF CREDIT

The Company has a revolving line of credit with Pacific Premier Bank for $500,000, expiring March 24, 2019. There was no outstanding balance on the line of credit as of December 31, 2018, September 30, 2018, or December 31, 2017.

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PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2018 AND 2017 AND SEPTEMBER 30, 2018

PAGE 5

NOTE 5 – CAPITAL LEASE OBLIGATIONS

At December 31, 2018, September 30, 2018, and December 31, 2017, capital lease obligations consisted of the following:

	December 31, 2018		September 30, 2018		December 31, 2017
A 2013 Hino truck leased from Donahue Transportation Services Corp, payable in monthly installments of $1,046, including interest at 4.751% per annum, through April 2019.	$	4,144	$	7,210	$	16,191
A security system for Lot-K leased from RLC Funding, payable in monthly installments of $1,295, including interest at 13.537% per annum, through October 2018.		-		1,280		12,181
A 2016 Hino truck leased from Donahue Transportation Services Corp, payable in monthly installments of $1,116, including interest at 4.532% per annum, through January 2023.		49,837		52,600		60,702
A 2018 Hino truck leased from Donahue Transportation Services Corp, payable in monthly installments of $1,116, including interest at 4.644% per annum, through September 2024.		67,467		70,012		77,472
A 2019 Hino truck leased from Donahue Transportation Services Corp, payable in monthly installments of $1,116, including interest at 4.181% per annum, through May 2025.		75,257		77,800		-
		196,705		208,902		166,546
Less current portion		(36,437)		(40,426)		(45,098)
Total capital lease obligations	$	160,268	$	168,476	$	121,448

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PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2018 AND 2017 AND SEPTEMBER 30, 2018

PAGE 6

NOTE 5 – CAPITAL LEASE OBLIGATIONS (continued)

At December 31, 2018, future minimum payments on capital lease obligations were as follows:

For the Twelve Months Ending December 31,
2019	$	44,361
2020		40,176
2021		40,176
2022		40,176
2023		27,900
Thereafter		29,016
Present value of future minimum payments		221,805
Less amount representing interest		(25,100)
		196,705
Less current portion of capital lease obligations		(36,437)
Total capital lease obligations, net of current portion	$	160,268

NOTE 6 - COMMON STOCK

Each share of stock is intended to provide the shareholder with free use of the resort for a maximum of 45 days per year. If the Company is unable to generate sufficient funds from the public, the Company may be required to charge 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. The ownership of a share does not entitle the owner to any interest in any particular site or camping period.

NOTE 7 - INCOME TAXES

The provision for income taxes for the three months ended December 31, 2018 and 2017, is as follows:

	Three Months Ended
	December 31, 2018		December 31, 2017
Income tax provision	$	60,000	$	136,400

The Company uses the asset-liability method of computing deferred taxes in accordance with FASB ASC Topic 740. The difference between the effective tax rate and the statutory tax rates is due primarily to the effects of state taxes net of the federal tax benefit and nondeductible variable costs of shareholder usage.

As of December 31, 2018, September 30, 2018, and December 31, 2017, the Company’s deferred tax liability was $505,600, $520,300, and $795,400, respectively. Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future. The majority of the balance is due to timing differences of depreciation expense, caused by the use of accelerated depreciation methods for tax calculations.

20

PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2018 AND 2017 AND SEPTEMBER 30, 2018

PAGE 7

NOTE 8 - OPERATING LEASES

The Company leases a lot, which is located in Oceano, California, and is leased at $3,172 per month. The lease has converted to a month-to-month lease.

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 December 31,
2019	$	4,608
2020		4,608
2021		4,608
2022		768
	$	14,592

Rent expense under these agreements was $11,149 and $10,835 for the three-months ended December 31, 2018 and 2017, respectively.

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 $24,087 and $18,700 for the three months ended December 31, 2018 and 2017, respectively.

NOTE 10 – SUBSEQUENT EVENTS

Events subsequent to December 31, 2018 have been evaluated through February 14, 2019, which is the date the financial statements were available to be issued. Management did not identify any subsequent events that required disclosure.

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