##### Table of Contents





SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
  Form 10-K
 ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d)
 OF THE SECURITIES EXCHANGE ACT
    OF 1934
  For the
    fiscal year ended April 30, 2010
  Commission file number 0-10146
  SERVIDYNE, INC.
 (Exact name of registrant as
    specified in its charter)
  Georgia

58-0522129(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    identification No.)1945 The Exchange, Suite 300, Atlanta, GA(Address of principal
    executive offices)

30339-2029(Zip
    Code)   Registrants telephone number, including area code:
 (770) 953-0304
  SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE
    ACT:
  Title of Each Class:

Name of Each Exchange on Which Registered:Common Stock, $1.00 Par Value Per Share

NASDAQ Global Market   SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE
    ACT:
 (Title of Class)
 None
   o NO þ
   o NO þ
   YES þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. þ
  12b-2
 Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller
    reporting
    company þ   Rule 12b-2
 o NO þ
    DOCUMENTS
    INCORPORATED BY REFERENCE




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TABLE OF CONTENTS  PART IITEM 1. BUSINESSITEM 1A. RISK FACTORSITEM 1B. UNRESOLVED STAFF COMMENTSITEM 2. PROPERTIESITEM 3. LEGAL PROCEEDINGSPART IIITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESITEM 6. SELECTED FINANCIAL DATAITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCONSOLIDATED BALANCE SHEETSCONSOLIDATED STATEMENTS OF OPERATIONSCONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITYCONSOLIDATED STATEMENTS OF CASH FLOWSNOTES TO CONSOLIDATED FINANCIAL STATEMENTSITEM 9. CHANGES IN AND DISAGREEMENTS WITH INDEPENDENT AUDITORS ON ACCOUNTING AND FINANCIAL DISCLOSUREITEM 9A. CONTROLS AND PROCEDURESITEM 9B. OTHER INFORMATIONPART IIIITEMS 10-14.PART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULESEX-21EX-23.AEX-31.1EX-31.2EX-32.1EX-32.2    Table of Contents  
  PART I
 
  ITEM 1.
    BUSINESS              BPE
    SEGMENT
    
    The BPE Energy Solution is designed to help building owners and
    operators substantially reduce energy consumption and cut
    utility and operating costs of their existing facilities. Major
    elements include: energy modeling; energy audits; building
    retro-commissioning;
    LEED®

    and ENERGY
    STAR®

    certifications; comprehensive preventive maintenance of
    energy-consuming equipment; turn-key design and implementation
    of energy-saving lighting systems; and retrofits of mechanical
    and electrical systems.
    The BPE Environmental Sustainability Solution is designed to
    help building owners and operators identify and transform
    wasteful and inefficient facilities into cost-effective, energy
    efficient and environmentally sustainable facilities. Major
    elements include: energy and sustainability audits; building
    performance benchmarking and utility monitoring;
    retro-commissioning of existing systems; efficiency improvements
    of existing energy conversion and water consuming building
    assets; and other efficiency improvements that extend the lives
    of building infrastructures and equipment.
    The BPE Occupant Satisfaction Solution is designed to help
    building owners and operators measurably improve the comfort
    level and satisfaction of their tenants, guests and employees.
    Major elements include: proprietary Web/wireless systems to
    manage guest and tenant service requests; identification of
    low-cost and no-cost operating efficiency improvements; lighting
    quality upgrades; technical staff training; more consistent
    control of building temperature and humidity conditions; and
    improved reliability of building systems and controls. 2




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
    The BPE Utility Solution is designed to be a cost effective and
    reliable way for utilities and their customers to modify peak
    usage of electricity by implementing demand response programs
    that utilize smart gridtechnologies, in order to reduce
    excess demand on the electric grid, lessen the need for
    utilities to build expensive new energy generating plants, and
    provide substantial ongoing cost savings for building owners and
    operators. The Company launched this new product line, marketed
    under the name Fifth Fuel
    Managementtm,

    during the current fiscal year, by expanding the Companys
    Web-based
    iTendant®

    platform to create the real-time, energy optimization and demand
    response system. Major elements include: comprehensive demand
    response facility audits; technology-enabled real-time demand
    response programs (automatic, semi-automatic and manual);
    reliable two-way, fast and secure communication and tracking;
    retro-commissioning of existing systems; customized site
    training; and
    step-by-step
    processes for optimized demand response participation.    REAL
    ESTATE SEGMENT
      EMPLOYEES
    AND EMPLOYEE RELATIONS
    SEASONAL
    NATURE OF BUSINESS
    COMPETITION
   3




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BACKLOG
    IncreaseApril 30,


(Decrease)2010


2009


Amount


PercentageBPE(1)

$
15,369,000


$
9,885,000


$
5,484,000



55Real Estate(2)


2,726,000



2,737,000



(11,000
)


(0
)Less: Intersegment eliminations(3)


(595,000
)


(547,000
)


(48,000
)


9Total Backlog

$
17,500,000


$
12,075,000


$
5,425,000



45   (1)
    
    BPE backlog at April 30, 2010, increased by approximately
    $5,484,000, or 55%, compared to the year-earlier period,
    primarily due to:    (b)
    approximately $790,000 in new backlog from the BPE
    Segments new Fifth Fuel
    Managementtm

    service offering;(c)
    an increase of approximately $249,000 in lighting products from
    the Companys lighting distribution business;    (d)
    a decrease of approximately $176,000 in productivity software
    products and services; and(e)
    a decrease of approximately $457,000 in energy management
    consulting services, primarily due to the successful completion
    of multi-year consulting services projects.  BPE backlog includes some contracts that can be cancelled by
    customers with less than one years notice, and assumes
    such cancellation provisions will not be invoked. The value of
    such contracts included in the prior years backlog that
    were subsequently cancelled was approximately $70,000 or 0.7%.(2)
    
    During the first quarter of fiscal 2011, the Company sold its
    owned shopping center in Jacksonville, Florida (see Note 20
    Subsequent Events to the consolidated financial
    statements for more information). The Real Estate backlog
    related to this property was $1,306,000 and $1,358,000 as of
    April 30, 2010, and April 30, 2009, respectively.
    These amounts are included in the total Real Estate backlog
    figures shown above.(3)
    
    Represents rental revenues at the Companys owned
    headquarters building to be paid to the Real Estate Segment by
    the Parent Company and the BPE Segment.    REGULATION
   4




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EXECUTIVE
    OFFICERS OF THE REGISTRANT
    Alan R.
    Abrams(55)
    Officer
    since 1988    Rick A.
    Paternostro(40)
    Officer
    since 2000    M. Todd
    Jarvis(44)
    Officer
    since 2004    Melinda
    S. Garrett(54)
    Officer
    since 1990    J. Andrew
    Abrams(50)
    Officer
    since 1988     
  ITEM 1A.
    RISK
    FACTORS  Form 10-K,
  Risks
    Related to the Company
  The Companys business depends on the success of its
    building performance efficiency offerings. If the Company fails
    to continue to grow revenues from these offerings, its prospects
    will be adversely affected.
   5




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
    the ability of the BPE Segment to add new products and services
    on a timely basis, and the ability to keep its current products
    and services competitive;
    the successful hiring, training and retention of qualified
    personnel;
    the establishment of new relationships and the expansion of
    existing relationships with customers and suppliers;
    the availability of adequate capital; and
    the ability to make profitable business acquisitions and to
    integrate such acquired businesses into existing operations.    The Company may deplete its capital resources before the
    BPE Segment achieves sufficient positive cash flow to fund the
    Companys operations, and may not be able to secure
    additional capital on favorable terms, or at all, which could
    materially adversely affect the Companys ability to
    operate its businesses and grow the BPE Segment.
           6




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The Company has redeployed a substantial portion of its
    capital previously invested in the Real Estate Segment to grow
    the BPE Segment. The Company cannot guarantee that the return,
    if any, on investing these resources in the BPE Segment will
    exceed the return that might otherwise be achievable from the
    Real Estate Segment or from an investment in another line of
    business.
      Prevailing capital market and economic conditions could
    impact demand for the Companys services and
    products.
  and/or
  In recent years, the Companys ability to generate
    net earnings has been significantly dependent on achieving
    capital gains from the sale of real estate income-producing
    properties. Without such gains recurring in the future, the
    Company might not be profitable.
     7




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The Company is dependent upon key personnel, and the loss
    of any such key personnel could adversely impair the
    Companys ability to conduct its business. In addition, the
    implementation of the Companys growth strategy will
    require the addition of suitable personnel.
      If the Company cannot find suitable candidates for
    business acquisition or cannot integrate completed business
    acquisitions successfully, its prospects could be adversely
    affected.
      day-to-day
  The Company is subject to changing regulations regarding
    corporate governance and required public disclosure that have
    increased both the costs of compliance and the risks of
    noncompliance. As a small public company, these costs of
    compliance may affect the Company disproportionately as compared
    with larger competitors.
     8




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The Companys earnings in a future period could be
    adversely affected by non-cash adjustments to goodwill and other
    intangible assets, if a future test of these assets were to
    indicate a material impairment.
    Risks
    Related to the Companys BPE Segment
  The markets for the BPE Segments products, services
    and technology are very competitive, and are becoming more so;
    if the BPE Segment cannot successfully compete in those markets,
    the Companys business could be materially and adversely
    affected.
     9




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Failure to adequately expand the BPE Segments sales
    force may impede its growth.
    As more of the BPE Segments sales efforts are
    targeted at larger enterprise customers, its sales cycle may
    become longer and more expensive, and it may encounter pricing
    pressure and implementation challenges, all of which could harm
    the Companys business.
    A limited number of customers comprise a significant
    portion of the revenues and backlog of the BPE Segment. The loss
    of, or any significant decrease in, business from these
    customers could have an adverse effect on the BPE Segments
    results.
     10




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A portion of the BPE Segments revenues are derived
    from fixed price contracts, which could result in losses on
    contracts.
    The BPE Segment often utilizes subcontractors in
    performing services or completing projects, whose potential
    unavailability or unsatisfactory performance could have a
    material adverse effect on the Companys business and
    financial position.
    The Company could be exposed to environmental liability
    related to the disposal of hazardous materials.
    If the BPE Segments security measures for its
    proprietary software solutions were breached, and as a result
    unauthorized access to a customers data were obtained, the
    offerings of the BPE Segment could be perceived as not being
    sufficiently secure, customers might curtail or stop using the
    BPE Segments products and services, and the BPE Segment
    could incur significant losses and liabilities.
   11




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The BPE Segment is dependent on the assistance of its
    customers to complete projects on a timely basis. If a customer
    were unable or unwilling to offer assistance, it could affect
    project timelines and reduce or slow the recognition of energy
    savings project revenues.
    The BPE Segments new Fifth Fuel
    Managementtm product line is largely untested. If the Company fails to
    fully develop this product line, its prospects could be
    adversely affected. Moreover, the development of Fifth Fuel
    Managementtm will require additional capital, which the Company may not
    be able to obtain.
  tm tm
  
    The Companys ability to develop, acquire
    and/or
    license any additional technologies and processes necessary to
    fully develop and implement the Fifth Fuel
    Managementtm

    system;
    The Companys ability to market and sell this new offering
    to significant customers, such as public and investor-owned
    utilities and building owners and operators; and
    The availability of adequate capital to fund the full
    development, marketing and working capital requirements of Fifth
    Fuel
    Managementtm.  tm
  tm
  tm
  The value to customers of the energy savings products and
    services offered by the Companys BPE Segment is
    substantially impacted by the prevailing conditions of energy
    markets; if energy prices and utility costs were to decline,
    sales and profits of the BPE Segments energy savings
    products and service offerings might not grow, or could even
    decline.
   12




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Risks
    Related to the Companys Real Estate Segment
    The market for acquiring, managing, leasing and profitably
    disposing of commercial real estate is affected by general
    economic and market risks.
    
    Changes in the national, regional and local economic climate;
    Local conditions such as an oversupply of properties or a
    reduction in demand for properties;
    The attractiveness of the properties to prospective tenants or
    acquirers;
    Competition from other available properties;
    Material contractual defaults by tenants;
    Changes in market rental rates; and
    The need to periodically repair, renovate and re-lease space.     13




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The Companys real estate properties could be subject
    to uninsured losses and condemnation costs.
    Compliance with environmental laws could adversely affect
    the Company.
  clean-up clean-up clean-up
  Any failure to sell income-producing properties on a
    timely basis could adversely affect the Companys results
    of operations.
   14




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The Company might not be able to refinance its
    income-producing real estate properties on a timely basis or on
    acceptable terms.
   
  ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS   
  ITEM 2.
    PROPERTIES      OWNED
    SHOPPING CENTERS
    Percentageof Square

Calendar





PrincipalLeasable

Footage

Year



Debt

Amount of DebtSquare

Leased as of

Placed in

Rental

Service

OutstandingFeet in

April 30,

Service by

Income

Payments

as of April 30,Location

Acres

Building(s)

2010

Company

2010

2010(1)

2010(2)11459 Old Nashville Hwy. Smyrna, TN(3)


8.0



51,925



100



2006


$
569,387


$
302,999


$
3,984,2238102 Blanding Blvd. Jacksonville, FL(4)(5)


18.8



174,220



98



1999


$
1,769,034


$
610,238


$
6,877,513   (1)
    
    Includes principal and interest.(2)
    
    The Companys liability for repayment is generally limited
    by exculpatory provisions to its interests in the respective
    mortgaged properties.(3)
    
    Acquired by the Company in August 2006 and originally developed
    by unrelated third parties in 1998.(4)
    
    Acquired by the Company in 1999 and originally developed by
    unrelated third parties in 1985.(5)
    
    In June 2010, the Company sold its owned shopping center located
    in Jacksonville, Florida. See Note 20 Subsequent
    Events to the consolidated financial statements for more
    information. 15




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##### Table of Contents



LeaseSquare

Expiration

OptionsAnchor Tenant(1)

Location

Footage

Date

to RenewHarbor Freight Tools(2)

Jacksonville, FL


15,700



2012


4 for 5 years eachPublix/Floor & Decor(2)(3)

Jacksonville, FL


85,560



2020


2 for 5 years eachOffice Depot(2)

Jacksonville, FL


22,692



2013


1 for 5 yearsFood Lion

Smyrna, TN


33,000



2019


4 for 5 years each   (1)
    
    A tenant is considered to be an Anchor Tenant if it
    leases 12,000 square feet or more for an initial lease term
    of five (5) years or more.(2)
    
    This is an anchor tenant at the Companys owned shopping
    center in Jacksonville, Florida, which was sold in June 2010.
    See Note 20 Subsequent Events to the
    consolidated financial statements for more information.(3)
    
    Publix has subleased the premises to Floor and Decor Outlets,
    but remains liable under the lease until the lease expires in
    August 2010.      OWNED
    OFFICE BUILDING
      Percentage







Principalof Square

Calendar





Amount ofLeasable

Footage

Year



Debt

DebtSquare

Leased as of

Placed in

Rental

Service

OutstandingFeet in

April 30,

Service by

Income

Payments

as of April 30,Location

Acres

Building

2010

Company

2010

2010(1)

2010(2)1945 The Exchange Atlanta, GA(3)


3.12



65,880



54



1997


$
743,765


$
442,877


$
4,228,588   (1)
    
    Includes principal and interest.(2)
    
    The Companys liability for repayment is generally limited
    by exculpatory provisions to its interest in the mortgaged
    property.(3)
    
    The Companys corporate headquarters facility, of which the
    Company leases and occupies approximately 25,928 square
    feet. Rental income includes $567,762 in intercompany rent at a
    competitive market rate recognized by the Company and its
    operating segments. The building was originally developed by
    unrelated third parties in 1974, and was acquired and
    re-developed by the Company in 1997.    Lease

OptionsSquare

Expiration

toAnchor Tenant(1)

Location

Footage

Date

RenewServidyne, Inc.(2)


Atlanta, GA



25,928



2012



None  16




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##### Table of Contents



(1)
    
    A tenant is considered to be an Anchor Tenant if it
    leases 12,000 square feet or more for an initial lease term
    in of five (5) years or more.(2)
    
    The Company leases its corporate headquarters office space
    from the Real Estate Segment.    LEASEBACK
    SHOPPING CENTER
        Square

Calendar Year

Rental

RentFeet in

Placed in Service

Income

ExpenseLocation

Acres

Building

by Company

2010

2010Davenport, IA


10.0



84,180



1977


$
255,308


$
105,203   REAL
    ESTATE HELD FOR FUTURE DEVELOPMENT, LEASE OR SALE
    Calendar YearDevelopmentLocation

Acres

Completed

Intended Use(1)Mundy Mill Road









Commercial development pads or up toOakwood, GA


3.474



1987


three outlotsNorth Cleveland Avenue
    North Ft. Myers, FL


0.73



1993


One outlot   (1)
    
    Outlot as used herein refers to a small parcel of
    land platted separately from a shopping center parcel. An outlot
    is generally sold to, leased to, or developed as a fast-food
    restaurant, a bank, a convenience store, a small retail center,
    or other commercial uses.     
  ITEM 3.
    LEGAL
    PROCEEDINGS   17




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##### Table of Contents



PART II
 
  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES  MARKET
    FOR REGISTRANTS COMMON EQUITY
  Market PricesFiscal 2010

Fiscal 2009

Cash DividendsHigh

Low

High

Low

Paid per ShareTrade

Trade

Trade

Trade

2010

2009First Quarter

$
2.90


$
1.51


$
6.09


$
3.71


$
0.020


$
0.038Second Quarter


2.93



1.75



5.13



2.58



0.010



0.038Third Quarter


2.30



1.53



3.75



1.07



0.010



0.038Fourth Quarter


7.24



1.60



2.45



1.50



0.010



0.020       ISSUER
    PURCHASES OF EQUITY SECURITIES
  Total Number of Shares

Maximum Number ofPurchased as Part of

Shares that May Yet BeTotal Number of

Average Price

Publicly Announced Plans

Purchased under thePeriod

Shares Purchased

Paid per Share

or Programs

Plans or ProgramsAs of April 30, 2009














100,000September 1-30, 2009


2,189



2.05



2,189



97,811December 1-31, 2009


12,500



1.74



12,500



85,311January 1-31, 2010


2,292



1.77



2,292



83,019Total


16,981







16,981    18




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##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA    Years Ended April 30,

2010


2009


2008


2007


2006Net (Loss) Earnings(1)

$
(1,715,041
)

$
(4,587,450
)

$
1,335,562


$
966,626


$
525,766Net Loss  Continuing Operations

$
(2,373,234
)

$
(3,275,869
)

$
(1,161,729
)

$
(1,157,462
)

$
(424,508
)Net Earnings (Loss)  Discontinued Operations

$
658,193


$
(1,311,581
)

$
2,497,291


$
2,124,088


$
950,274Net (Loss) Earnings Per Share(1)(3)

$
(.46
)

$
(1.23
)

$
.36


$
.26


$
.14Net Loss Per Share  Continuing Operations(3)

$
(.64
)

$
(.88
)

$
(.31
)

$
(.31
)

$
(.11
)Net Earnings (Loss) Per Share  Discontinued
    Operations(3)

$
.18


$
(.35
)

$
.67


$
.57


$
.25Consolidated Revenues  Continuing Operations

$
20,899,101


$
15,983,881


$
18,918,106


$
16,957,175


$
15,868,293Consolidated Revenues - Reclassified to Discontinued
    Operations(2)

$



$
472,491


$
429,620


$
2,118,058


$
2,371,882Weighted Average Shares Outstanding at Year-End(3)


3,685,834



3,716,700



3,711,659



3,707,217



3,708,797Cash Dividends Paid Per Share(3)

$
0.05


$
.13


$
.14


$
.14


$
.14Shareholders Equity

$
15,789,479


$
17,538,530


$
22,466,378


$
21,460,211


$
20,946,748Shareholders Equity Per Share(3)

$
4.28


$
4.72


$
6.05


$
5.79


$
5.65Working Capital(1)

$
3,571,875


$
7,030,872


$
13,769,470


$
5,713,582


$
8,352,086Depreciation and Amortization - Continuing Operations(4)

$
1,377,176


$
1,453,882


$
1,409,305


$
1,301,948


$
929,851Total Assets

$
39,833,019


$
43,644,656


$
52,315,550


$
57,393,421


$
52,410,256Income-Producing Properties and Property and Equipment, net(5)

$
18,064,697


$
18,428,346


$
18,722,204


$
18,522,978


$
14,011,977Income-Producing Properties and Property and Equipment,
    net  Reclassified to Discontinued Operations(2)

$



$
1,760,585


$
3,863,105


$
14,270,939


$
7,548,794Long-Term Debt(6)(7)

$
16,555,501


$
16,092,252


$
16,539,203


$
19,086,723


$
13,416,512Long-Term Debt  Reclassified to Discontinued
    Operations(2)

$



$
3,128,388


$
3,169,566


$
6,052,018


$
7,873,030Total Liabilities

$
24,043,540


$
26,106,126


$
29,849,172


$
35,933,210


$
31,463,508Variable Rate Debt(6)(8)

$
850,000


$
850,000


$
870,000


$
3,400,000


$
930,000Return on Average Shareholders Equity(1)


(10.3
)%


(22.9
)%


6.1
%


4.6
%


2.5
%   (1)
    
    Includes continuing operations, discontinued operations, and
    extraordinary items, if any.(2)
    
    Includes amounts previously reported as continuing operations in
    prior period annual reports that have been reclassified to
    discontinued operations.(3)
    
    Adjusted for stock dividends.(4)
    
    Depreciation and amortization for certain sold income-producing
    properties have been reclassified as discontinued operations
    and, therefore, are not included in the periods presented.(5)
    
    Does not include property held for sale, real estate held for
    future development or sale, or sold income-producing properties
    that have been reclassified as assets of discontinued
    operations. This does include the owned shopping center which
    was sold subsequent to fiscal year end in June 2010. See
    Note 20 Subsequent Events to the consolidated
    financial statements for more information.(6)
    
    Does not include mortgage debt associated with discontinued
    operations.(7)
    
    Includes the mortgage debt of approximately $6,878,000 on the
    owned shopping center which was sold subsequent to fiscal year
    end in June 2010. See Note 20 Subsequent Events
    to the consolidated financial statements for more information.(8)
    
    Includes short-term and long-term debt. 19




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##### Table of Contents



ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  INTRODUCTION
      OVERVIEW
  BUILDING
    PERFORMANCE EFFICIENCY SEGMENT
  year-over-year year-over-year 1
    tm
    1 The

    Company believes EBITDA is a useful non-GAAP measurement of the
    BPE Segments performance, because it provides information
    that can be used to further evaluate the operational
    effectiveness of the business. One should not consider EBITDA an
    alternative to, or a more meaningful indicator of the
    segments operating performance than, earnings before taxes
    as determined in accordance with GAAP.
 20




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tm tm ® tm tm tm
      REAL
    ESTATE SEGMENT
   21




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##### Table of Contents



LIQUIDITY
      RESULTS
    OF OPERATIONS
  REVENUES
    CHART
    A
    REVENUES FROM CONTINUING OPERATIONS
    SUMMARY BY SEGMENT(Dollars in
    thousands)
  Years EndedApril 30,

Amount

Percentage2010

2009

Change

ChangeBPE(1)

$
18,172


$
13,192


$
4,980



38Real Estate


2,727



2,792



(65
)


(2
)$
20,899


$
15,984


$
4,915



31  22




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##### Table of Contents



NOTES TO CHART A
  (1)
    
    The following table indicates the BPE Segment revenues by
    service and product type:  BPE
    SEGMENT REVENUES  SUMMARY BY SERVICE &
    PRODUCT TYPE(Dollars in
    thousands)
  Years EndedApril 30

Amount

Percentage2010

2009

Change

ChangeEnergy Savings Projects

$
11,051


$
5,534


$
5,517



100Lighting Products


1,933



1,665



268



16Energy Management Services


1,801



2,319



(518
)


(22
)Fifth Fuel Management Services


28







28



Productivity Software


3,359



3,674



(315
)


(9
)$
18,172


$
13,192


$
4,980



38   BPE Segment revenues increased by approximately $4,980,000, or
    38%, in fiscal 2010 compared to fiscal 2009, primarily due to:  (a)
    an increase in energy savings (lighting and mechanical) project
    revenues of approximately $5,517,000, primarily due to the
    substantial increase in revenues from customers in both the
    private sector and the government sector, including revenues of
    approximately $3,160,000 from several new energy savings project
    customers, representing the initial phases of new energy savings
    program initiatives for those customers; and  (b)
    an increase in lighting product revenues of approximately
    $268,000 due to improved business conditions;    (c)
    a decrease in energy management services of approximately
    $518,000 due to the completion of multi-year consulting services
    projects; and  (d)
    a decrease in productivity software revenues of approximately
    $315,000 due to fewer new implementations with existing
    large-portfolio customers.  COST OF
    REVENUES
     23




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##### Table of Contents



CHART
    B
    COST OF REVENUES FROM CONTINUING OPERATIONS
    SUMMARY BY SEGMENT(Dollars in
    thousands)
  Percentage ofSegment RevenuesYears Ended

for the Years EndedApril 30,

April 30,2010

2009

2010

2009BPE(1)

$
12,301


$
8,562



68



65Real Estate


1,862



1,787



68



64$
14,163


$
10,349



68



65   NOTES TO CHART B
  (1)
    
    BPE Segment cost of revenues increased by approximately
    $3,739,000, or 44%, in fiscal 2010 compared to fiscal 2009,
    primarily due to the corresponding increase in revenues (see
    Chart A).On a
    percentage-of-revenues
    basis, BPE Segment cost of revenues increased by approximately
    3% in fiscal 2010 compared to fiscal 2009, primarily due to a
    change in the mix of services and products.  SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
      CHART
    C
    SELLING, GENERAL AND ADMINISTRATIVE EXPENSES FROM CONTINUING
    OPERATIONS
    SUMMARY BY SEGMENT(Dollars in
    thousands)
  Percentage ofSegment RevenuesYears Ended

for the Years EndedApril 30,

April 30,2010

2009

2010

2009BPE(1)

$
5,830


$
5,718



32



43Real Estate(2)


563



687



21



25Parent Company(3)


3,405



3,493



16



22$
9,798


$
9,898



47



62   NOTES TO CHART C
  (1)
    
    BPE Segment SG&A expenses increased by approximately
    $112,000, or 2%, in fiscal 2010 compared to fiscal 2009,
    primarily due to approximately $236,000 of one-time, outside
    consulting costs, partially offset by a decrease in general and
    administrative costs and product and project development
    expenses. 24




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##### Table of Contents



On a
    percentage-of-revenues
    basis, BPE Segment SG&A expenses decreased by approximately
    11% in fiscal 2010 compared to fiscal 2009, primarily due to the
    increase in revenues (see Chart A) without a corresponding
    proportional increase in expenses.(2)
    
    Real Estate Segment SG&A expenses decreased by
    approximately $124,000, or 18%, in fiscal 2010 compared to
    fiscal 2009, primarily due to a decrease in personnel-related
    costs, consulting fees and legal fees.On a
    percentage-of-revenue
    basis, Real Estate Segment SG&A expenses decreased by
    approximately 4% in fiscal 2010 compared to fiscal 2009,
    primarily due to the decrease in expenses without a
    corresponding proportional decrease in revenues (see Chart A).(3)
    
    Parent SG&A expenses decreased by approximately $88,000, or
    3%, in fiscal 2010 compared to fiscal 2009, primarily due to a
    decrease in legal fees of approximately $230,000 related to
    costs incurred in the prior year to settle an insurance claim
    and decreased SEC compliance costs, partially offset by an
    increase in fair value of deferred executive compensation plan
    liabilities of approximately $166,000.On a
    percentage-of-revenues
    basis, Parent SG&A expenses decreased by approximately 6%
    in fiscal 2010 compared to fiscal 2009, due to the increase in
    revenues (see Chart A) and the decrease in expenses.  (LOSS)
    EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME
    TAXES
  year-over-year
    CHART
    D
    (LOSS) EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME
    TAXES
    SUMMARY BY SEGMENT(Dollars in
    thousands)
  Years Ended


(Increase)April 30,


Decrease2010


2009


AmountBPE(1)

$
64


$
(1,126
)

$
1,190Real Estate(2)


(667
)


(627
)


(40
)Parent Company(3)


(3,236
)


(3,194
)


(42
)Total

$
(3,839
)

$
(4,947
)

$
1,108   NOTES TO CHART D
  (1)
    
    BPE Segment earnings before income taxes of approximately
    $64,000 for fiscal 2010 represents earnings growth of
    approximately $1,190,000 compared to the same period in fiscal
    2009, primarily due to the increase in revenues of approximately
    $4,980,000 (see Chart A), an increase in gross margin of
    approximately $1,240,000, and an increase in other income of
    approximately $68,000, partially offset by an increase in
    SG&A expenses of approximately $112,000 (see Chart C). The
    financial performance improvement of the BPE Segment is the
    result of improving business conditions combined with the
    containment of overhead costs.(2)
    
    Real Estate Segment loss before income taxes increased by
    approximately $40,000, or 6%, compared to the same period in
    fiscal 2009, primarily due to the decrease in revenues of
    approximately $65,000 (see Chart A), a decrease in gross margin
    of approximately $139,000, and a decrease in interest and other
    income of approximately $55,000, partially offset by the
    decrease in SG&A expenses of approximately $124,000 (see
    Chart C) and a decrease in interest expense of
    approximately $28,000.(3)
    
    Parent Company loss before income taxes increased by
    approximately $42,000, or 1%, compared to the same period in
    fiscal 2009, primarily due to one-time other income of
    approximately $285,000 recognized last year 25




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related to the settlement of an insurance claim, partially
    offset by higher other income in the current year related to the
    increase in fair value of deferred executive compensation plan
    assets of approximately $166,000 and a current year decrease in
    SG&A expense of approximately $88,000 (see Chart C).  INCOME
    TAX BENEFIT
    INTEREST
    COSTS
    ACQUISITIONS
  Fiscal
    2010
    Fiscal
    2009
    DISCONTINUED
    OPERATIONS
  Fiscal
    2010
      Fiscal
    2009
   26




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##### Table of Contents



LIQUIDITY
    AND CAPITAL RESOURCES
        (a)
    losses in fiscal 2010 from continuing operations before
    depreciation, amortization and income taxes of approximately
    $2,462,000;  (b)
    an increase in net accounts receivable of approximately
    $1,341,000, primarily due to growth in BPE Segment activity, as
    well as the timing of billing and receipt of payments; and  (c)
    an increase in cost and earnings in excess of billings of
    approximately $306,000;    (d)
    a net increase in trade accounts payable, accrued expenses, and
    other liabilities of approximately $1,781,000, primarily due to
    growth in BPE Segment activity, as well as the timing and
    submission of payments; and  (e)
    a decrease in other current assets of approximately $60,000.    (a)
    approximately $512,000 used for additions to intangible assets,
    primarily related to enhancements to the BPE Segments
    proprietary building productivity software solutions, and to
    purchase accounting software;  (b)
    approximately $228,000 used for additions to income-producing
    properties related to building and tenant improvements; and  (c)
    approximately $122,000 used for additions to property and
    equipment, primarily related to vehicle and computer hardware
    purchases.    (a)
    proceeds from long-term loans against the Companys
    interest in the cash surrender value of certain life insurance
    policies of approximately $982,000;    (b)
    scheduled principal payments on real estate mortgage notes of
    approximately $343,000;  (c)
    payment of the regular quarterly cash dividends to shareholders
    of approximately $185,000;  (d)
    scheduled principal payments on other debt of $185,000; and  (e)
    repurchases of shares of the Companys common stock of
    approximately $31,000.   27




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tm
  tm
   28




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Mortgage
    Notes
    Secured
    Letter of Credit
    Repurchases
    of Common Stock
    EFFECTS
    OF INFLATION ON REVENUES AND OPERATING PROFITS
    year-over-year
   29




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CRITICAL
    ACCOUNTING POLICIES
    Revenue
    Recognition
      percentage-of-completion and/or percentage-of-completion
   30




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##### Table of Contents



Long-Lived
    Assets: Income-Producing Properties, Capitalized Software, and
    Property and Equipment
        
    A significant decrease in the market price of a long-lived asset;
    A significant adverse change in the extent or manner in which a
    long-lived asset is being used or in its physical condition;
    A significant adverse change in legal factors or in the business
    climate that could affect the value of a long-lived asset,
    including an adverse action or assessment by a regulator;
    An accumulation of costs significantly in excess of the amount
    originally expected for the acquisition or construction of a
    long-lived asset;
    A current-period operating or cash flow loss combined with a
    history of operating or cash flow losses or a projection or
    forecast that demonstrates continuing losses associated with the
    use of a long-lived asset;
    A current expectation that, more likely than not, a long-lived
    asset will be sold or otherwise disposed of significantly before
    the end of its previously estimated useful life;
    The Company has recently sold similar income-producing
    properties at losses;
    The Company has received purchase offers at prices below
    carrying value; 31




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##### Table of Contents




    Income-producing properties that have significant vacancy rates
    or significant rollover exposure from one or more tenants;
    A major tenant experiencing financial difficulties that may
    jeopardize the tenants ability to meet its lease
    obligations;
    Depressed market conditions;
    Presence of a new competitive property constructed in the
    assets market area; and
    Evidence of significant corrective measures required to cure
    structural problems, physical obsolescence, or deterioration of
    essential building components.        
    A change in the estimated remaining useful life of the asset;
    A change in the manner in which the asset is used in the
    income-generating business of the Company; or
    A current-period operating or cash flow loss combined with a
    history of operating or cash flow losses, or a projection or
    forecast that demonstrates continuing losses associated with the
    use of a long-lived asset.    Valuation
    of Goodwill and Other Indefinite-Lived Intangible
    Assets
     32




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33




---



##### Table of Contents



Income
    Taxes
                  Discontinued
    Operations
   34




---



##### Table of Contents



Recent
    Accounting Pronouncements
  105-10, The FASB Accounting Standards Codification and the Hierarchy
    of Generally Accepted Accounting Principles 105-10 ASC 105-10
  Subsequent Events
  2010-09, Subsequent Events 2010-09). 2010-09 2010-09 ASU 2010-09
  Financial Instruments
  350-30, Intangibles  Goodwill and Other; General
    Intangibles Other than Goodwill 350-30) Risks and Uncertainties Intangibles  Goodwill
    and Other Business Combinations ASC 350-30
  CAUTIONARY
    STATEMENT REGARDING FORWARD-LOOKING INFORMATION
  Form 10-K, tm
 35




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36




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##### Table of Contents



MANAGEMENT
    REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
  Rules 13a-15(f) 15d-15(f)
    Internal Control-Integrated Framework.
   37




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
            
    38




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##### Table of Contents



SERVIDYNE,
    INC.
  CONSOLIDATED
    BALANCE SHEETS
  April 30,2010


2009ASSETSCURRENT ASSETS:Cash and cash equivalents (Note 2)

$
1,923,641


$
4,821,126Receivables:Trade accounts and notes, net of allowance for doubtful accounts
    of $94,039 and $121,463, respectively


1,045,477



1,277,508Contracts, net of allowance for doubtful accounts of $22,530 and
    $4,294, respectively, including retained amounts of $675,281 and
    $219,385, respectively


3,337,177



1,764,327Costs and earnings in excess of billings (Note 5)


715,129



408,950Assets of discontinued operations (Note 4)






314,906Deferred income taxes (Note 11)


451,875



529,708Other current assets (Note 2)


1,293,609



1,485,599Total current assets


8,766,908



10,602,124INCOME-PRODUCING PROPERTIES, net (Note 6)


17,382,252



17,630,790PROPERTY AND EQUIPMENT, net (Note 7)


682,445



797,556ASSETS OF DISCONTINUED OPERATIONS (Note 4)






1,909,434OTHER ASSETS:Real estate held for future development or sale


853,109



853,109Intangible assets, net (Note 17)


2,810,417



2,832,286Goodwill (Note 17)


6,354,002



6,354,002Other assets (Note 2)


2,983,886



2,665,355Total assets

$
39,833,019


$
43,644,656LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Trade and subcontractors payables

$
2,483,996


$
851,633Accrued expenses


1,633,731



1,388,229Deferred revenue


507,383



601,347Billings in excess of costs and earnings (Note 5)


53,100



28,215Liabilities of discontinued operations (Note 4)






175,541Short-term debt and current maturities of long-term debt


516,823



526,287Total current liabilities


5,195,033



3,571,252DEFERRED INCOME TAXES (Note 11)


1,253,373



2,246,919LIABILITIES OF DISCONTINUED OPERATIONS (Note 4)






3,370,826OTHER LIABILITIES


1,039,633



824,877MORTGAGE NOTES PAYABLE, less current maturities
    (Note 8)


14,723,501



15,092,252OTHER LONG-TERM DEBT, less current maturities (Note 9)


1,832,000



1,000,000Total liabilities


24,043,540



26,106,126COMMITMENTS AND CONTINGENCIES (Note 18)SHAREHOLDERS EQUITY:Common stock, $1 par value; 10,000,000 shares
    authorized; 3,919,773 issued and 3,676,383 outstanding at
    April 30, 2010; 3,917,778 issued and 3,691,369 outstanding
    at April 30, 2009


3,919,773



3,917,778Additional paid-in capital


6,206,521



6,026,101Retained earnings


6,669,330



8,569,451Treasury stock (common shares) of 243,390 and 226,409,
    respectively


(1,006,145
)


(974,800
)Total shareholders equity


15,789,479



17,538,530Total liabilities and shareholders equity

$
39,833,019


$
43,644,656    39




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##### Table of Contents



SERVIDYNE,
    INC.
  CONSOLIDATED STATEMENTS OF OPERATIONS
  Year Ended April 30,2010


2009REVENUES:Building Performance Efficiency (BPE)

$
18,171,536


$
13,192,310Real Estate


2,727,565



2,791,57120,899,101



15,983,881COST OF REVENUES:BPE


12,300,803



8,562,024Real Estate


1,862,609



1,787,23614,163,412



10,349,260SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:


9,797,862



9,898,010OTHER (INCOME) AND EXPENSES:Other income (Note 2)


(294,029
)


(317,322
)Interest income


(12,507
)


(107,180
)Interest expense


1,083,810



1,107,986777,274



683,484LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES


(3,839,447
)


(4,946,873
)INCOME TAX EXPENSE (BENEFIT) (Note 11):Current


13,309



Deferred


(1,479,522
)


(1,671,004
)(1,466,213
)


(1,671,004
)LOSS FROM CONTINUING OPERATIONS


(2,373,234
)


(3,275,869
)DISCONTINUED OPERATIONS (Note 4):Loss from discontinued operations, adjusted for applicable
    income tax benefit of $50,649 and $896,531, respectively


(82,638
)


(1,311,581
)Gain on disposition of income-producing properties, adjusted for
    applicable income tax expense of $447,808 and $0, respectively


740,831



EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS


658,193



(1,311,581
)NET LOSS

$
(1,715,041
)

$
(4,587,450
)NET EARNINGS (LOSS) PER SHARE (Note 14):From continuing operations  basic and diluted

$
(0.64
)

$
(0.88
)From discontinued operations  basic and diluted


.18



(.35
)NET LOSS PER SHARE  BASIC AND DILUTED

$
(0.46
)

$
(1.23
)    40




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##### Table of Contents



SERVIDYNE,
    INC.
  CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
  AdditionalCommon Stock


Paid-in


Retained


TreasuryShares


Amount


Capital


Earnings


Stock


TotalBALANCES at April 30, 2008


3,708,836


$
3,708,836


$
5,045,100


$
14,511,159


$
(798,717
)

$
22,466,378Net loss














(4,587,450
)






(4,587,450
)Stock compensation expense










205,118











205,118Common stock acquired


















(135,507
)


(135,507
)Common stock issued


22,781



22,781



68,469











91,250Cash dividends declared  $0.134 per share (adjusted for
    stock dividend)














(501,259
)






(501,259
)Stock dividend declared  5% at market value on date
    declared


186,161



186,161



707,414



(852,999
)


(40,576
)


BALANCES at April 30, 2009


3,917,778


$
3,917,778


$
6,026,101


$
8,569,451


$
(974,800
)

$
17,538,530Net loss














(1,715,041
)






(1,715,041
)Stock compensation expense










182,415











182,415Common stock acquired


















(31,345
)


(31,345
)Common stock issued


1,995



1,995



(1,995
)










Cash dividends declared  $0.047 per share














(185,080
)






(185,080
)BALANCES at April 30, 2010


3,919,773


$
3,919,773


$
6,206,521


$
6,669,330


$
(1,006,145
)

$
15,789,479    41




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##### Table of Contents



SERVIDYNE,
    INC.
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  Fiscal Year Ended2010


2009Cash flows from operating activities:Net loss

$
(1,715,041
)

$
(4,587,450
)Adjustments to reconcile net loss to net cash used in operating
    activities:(Earnings) loss from discontinued operations, net of tax


(658,193
)


1,311,581Loss on disposal of assets


1,378



9,683Depreciation and amortization


1,377,176



1,453,882Amortization of mortgage discount






(20,000
)Deferred tax benefit


(1,505,595
)


(1,714,488
)Stock compensation expense


182,415



205,118Adjustment to cash surrender value of life insurance


(62,442
)


(66,633
)Straight-line rent


22,606



(28,778
)Provision for doubtful accounts, net


(9,188
)


4,878Changes in assets and liabilities:Receivables


(1,331,631
)


667,583Costs and earnings in excess of billings


(306,179
)


(133,196
)Other current and long-term assets


59,684



(327,463
)Trade and subcontractors payable


1,632,363



(137,777
)Accrued expenses and deferred revenue


151,538



(24,873
)Accrued incentive compensation






(494,000
)Billings in excess of costs and earnings


24,885



(34,344
)Other liabilities


(2,900
)


(14,674
)Net cash used in operating activities


(2,139,124
)


(3,930,951
)Cash flows from investing activities:Acquisition, net of cash acquired






(902,657
)Premiums paid on officers life insurance policies


(61,464
)


(56,000
)Release of restricted cash held in escrow






3,470,700Purchase of held to maturity investments






(150,000
)Additions to income-producing properties


(228,006
)


(189,831
)Additions to property and equipment


(122,308
)


(166,166
)Additions to intangible assets


(511,992
)


(358,160
)Proceeds from sale of property and equipment


2,000



Net cash (used in) provided by investing activities


(921,770
)


1,647,886Cash flows from financing activities:Long-term loan proceeds


982,000



Mortgage repayments


(343,215
)


(321,091
)Debt repayments


(185,000
)


(280,875
)Repurchase of common stock


(31,345
)


(135,507
)Cash dividends paid to shareholders


(185,080
)


(501,259
)Net cash provided by (used in) financing activities


237,360



(1,238,732
)DISCONTINUED OPERATIONS:Operating activities


(13,319
)


100,555Investing activities


(1,021
)


(109,538
)Financing activities


(59,611
)


(31,041
)Net cash (used in) provided by discontinued operations


(73,951
)


(40,024
)Net decrease in cash and cash equivalents


(2,897,485
)


(3,561,821
)Cash at beginning of period


4,821,126



8,382,947Cash at end of period

$
1,923,641


$
4,821,126Supplemental disclosure of non-cash investing and financing
    activities:Issuance of Common Stock under 2000 Stock Award Plan

$
4,434


$
24,792Supplemental schedule of cash flow information:Cash paid during the year for interest

$
1,094,304


$
1,303,887Cash paid during the year for income taxes, net

$



$
    42




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##### Table of Contents



Total assets acquired, net of cash

$
1,577,844Total liabilities assumed


(583,937
)Net assets acquired, net of cash


993,907Less value of shares issued for acquisition


(91,250
)Total cash paid (including acquisition costs)

$
902,657     Elimination of mortgage note payable

$
(3,159,348
)Disposition of income-producing property, net


1,727,165Disposition of other related assets and liabilities, net


193,545    43




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the Years Ended April 30, 2010, and April 30,
    2009
  1.
    ORGANIZATION
    AND BUSINESS    2.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  (A)
    Principles
    of consolidation and basis of presentation    ASC 360-35, Property, Plant and Equipment 360-35).
  (B)
    Use of
    estimates    (C)
    Revenue
    recognition      percentage-of-completion
 44




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##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  and/or percentage-of-completion
      (D)
    Cash
    and cash equivalents and short-term investments   45




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##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (E)
    Real
    estate held for future development or sale    (F)
    Deferred
    loan costs    (G)
    Long-lived
    assets: income-producing properties, capitalized software, and
    property and equipment        
    A significant decrease in the market price of a long-lived asset;
    A significant adverse change in the extent or manner in which a
    long-lived asset is being used or in its physical condition;
    A significant adverse change in legal factors or in the business
    climate that could affect the value of a long-lived asset,
    including an adverse action or assessment by a regulator;
    An accumulation of costs significantly in excess of the amount
    originally expected for the acquisition or construction of a
    long-lived asset;
    A current-period operating or cash flow loss combined with a
    history of operating or cash flow losses or a projection or
    forecast that demonstrates continuing losses associated with the
    use of a long-lived asset;
    A current expectation that, more likely than not, a long-lived
    asset will be sold or otherwise disposed of significantly before
    the end of its previously estimated useful life;
    The Company has recently sold similar income-producing
    properties at losses;
    The Company has received purchase offers at prices below
    carrying value;
    Income-producing properties that have significant vacancy rates
    or significant rollover exposure from one or more tenants;
    A major tenant experiencing financial difficulties that may
    jeopardize the tenants ability to meet its lease
    obligations;
    Depressed market conditions; 46




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##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   
    Presence of a new competitive property constructed in the
    assets market area; and
    Evidence of significant corrective measures required to cure
    structural problems, physical obsolescence, or deterioration of
    essential building components.          
    A change in the estimated remaining useful life of the asset;
    A change in the manner in which the asset is used in the income
    generating business of the Company; or
    A current-period operating or cash flow loss combined with a
    history of operating or cash flow losses, or a projection or
    forecast that demonstrates continuing losses associated with the
    use of a long-lived asset.   47




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (H)
    Goodwill
    and other intangible assets    Acquired computer software

3 yearsProprietary BPE software solutions

5 yearsCustomer relationships

5 yearsLease costs

Over the term of the leaseLoan costs

Over the term of the loan              48




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          (I)
    Income
    taxes        (J)
    Derivative
    instruments and hedging activities   49




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (K)
    Discontinued
    operations    (L)
    Other
    current assets    2010


2009Inventory

$
537,624


$
654,443Prepaid software consulting






132,731Prepaid real estate taxes


48,928



65,685Deferred costs


31,248



92,210Prepaid insurance


75,751



119,849Prepaid rent


35,783



48,905Deposits


44,400



44,400Prepaid consulting fees


25,000



25,000Unbilled engineering revenue


170,520



112,690Other receivables


117,660



11,798Other


206,695



177,888$
1,293,609


$
1,485,599   (M)
    Other
    assets    2010


2009Cash surrender value of life insurance

$
1,447,224


$
1,323,318Deferred executive compensation


947,023



733,378Certificate of deposit


450,000



450,000Straight-line rent


117,757



140,362Notes receivable


9,000



9,250Other


12,882



9,047$
2,983,886


$
2,665,355   (N)
    Other
    income    (O)
    Recent
    accounting pronouncements  105-10, The FASB Accounting Standards Codification and the Hierarchy
    of Generally Accepted Accounting Principles 105-10
 50




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  ASC 105-10
  Subsequent Events
  2010-09, Subsequent Events 2010-09). 2010-09 2010-09 2010-09
  Financial Instruments
  350-30, Intangibles  Goodwill and Other; General
    Intangibles Other than Goodwill 350-30) Risks and Uncertainties Intangibles  Goodwill
    and Other Business Combinations ASC 350-30
  3.
    STOCK
    COMPENSATION       51




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##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Stock
    options
    2010


2009Weighted





WeightedOptions to


Average


Options to


AveragePurchase


Exercise


Purchase


ExerciseShares


Price


Shares


PriceOutstanding at beginning of year


482,486


$
4.46



483,536


$
4.45Granted










10,500



5.24Forfeited










(11,550
)


4.59Expired














Exercised














Outstanding at end of year


482,486


$
4.46



482,486


$
4.46Vested at end of year


471,986


$
4.44



471,986


$
4.44Non-vested at end of year, that are expected to vest


10,500


$
5.24



10,500


$
5.24       WeightedAverageNumber of

RemainingOutstanding

ContractualExercise Price

Options

Term (Years)$4.42


415,629



2.53$4.59


55,440



4.90$5.19


917



4.13$5.24


10,500



3.12     Expected life (years)


5Dividend yield


2.55
%Expected stock price volatility


37.11
%Risk-free interest rate


3.73
%Fair value of options granted

$
1.16  52




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##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Stock
    appreciation rights
    2010


2009Weighted





WeightedAverage





AverageExercise





ExerciseSARs


Price


SARs


PriceOutstanding at beginning of year


565,350


$
4.37



411,600


$
4.26Granted


381,500



3.11



184,000



4.57Exercised














Forfeited


(19,425
)


4.62



(30,250
)


3.98Outstanding at end of year


927,425


$
3.85



565,350


$
4.37Vested at end of year


88,200


$
3.88






$
Non-vested at end of year, that are expected to vest


589,305


$
3.91



405,299


$
4.26   rd
    Weighted AverageOutstanding

Vested

Remaining ContractualExercise Price

SARs

SARs

Term (Years)$3.94


180,495



54,810



6.16$3.79


109,830



33,390



6.61$4.19


10,500



0



7.12$6.19


33,600



0



7.42$5.00


52,500



0



7.99$4.76


136,500



0



8.13$4.00


22,500



0



8.39$2.30


30,000



0



9.11$4.00


200,000



0



9.55$2.12


20,000



0



9.61$2.09


131,500



0



9.90  53




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2010

2009Expected life (years)


5



5Dividend yield


3.82
%


2.59
%Expected stock price volatility


55.88
%


37.25
%Risk-free interest rate


2.38
%


3.45
%Fair value of SARs granted

$
0.40


$
0.91     Shares
    of restricted stock
        2010


2009Weighted





WeightedNumber of


Average


Number of


AverageShares of


Fair Value


Shares of


Fair ValueRestricted


per Share


Restricted


per ShareStock


on Grant Date


Stock


on Grant DateNon-vested restricted stock at beginning of year


5,295


$
4.77



1,785


$
4.27Granted


2,600



2.11



5,800



4.72Forfeited


(500
)


2.12



(505
)


4.21Vested


(4,245
)


4.55



(1,785
)


4.23Non-vested restricted stock at end of year


3,150


$
2.99



5,295


$
4.77   4.
    DISCONTINUED
    OPERATIONS   54




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          2010


2009REAL ESTATE SEGMENTRental revenues

$
50,572


$
247,572Rental property operating expenses, including depreciation


183,859



297,011Loss on impairment of income-producing property






2,158,673Operating loss from discontinued operations


(133,287
)


(2,208,112
)Income tax benefit


50,649



896,531Operating loss from discontinued operations, net of tax


(82,638
)


(1,311,581
)Gain on disposition of income-producing properties


1,188,639



Income tax expense


(447,808
)


Gain on disposition of income-producing properties, net of tax


740,831



Earnings (loss) from discontinued operations, net of tax

$
658,193


$
(1,311,581
)   55




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Balances atApril 30,


April 30,2010


2009Assets of discontinued operationsAccounts receivable

$



$
91,069Deferred income taxes






49,715Other current assets






174,122Total current






314,906Income-producing properties






1,760,585Intangible assets






78,310Other assets






70,539Total non-current






1,909,434Total assets of discontinued operations

$



$
2,224,340Liabilities of discontinued operationsAccrued expenses

$



$
27,916Deferred Revenue






107,054Current maturities of mortgage notes and long-term debt payable






40,571Total current






175,541Deferred income taxes






242,438Mortgage notes payable






3,128,388Total non-current






3,370,826Total liabilities of discontinued operations

$



$
3,546,367   5.
    CONTRACTS
    IN PROGRESS    2010


2009Costs and earnings in excess of billings:Accumulated costs and earnings

$
4,030,255


$
2,129,684Amounts billed


3,315,126



1,720,734$
715,129


$
408,950Billings in excess of costs and earnings:Amounts billed

$
5,149,164


$
2,574,827Accumulated costs and earnings


5,096,064



2,546,612$
53,100


$
28,215  56




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  6.
    INCOME-PRODUCING
    PROPERTIES    EstimatedUseful Lives

2010(1)


2009(1)Land

N/A

$
5,868,144


$
5,868,144Buildings and improvements

7-39 years


15,702,497



15,474,491$
21,570,641


$
21,342,635Less  accumulated depreciation




4,188,389



3,711,845$
17,382,252


$
17,630,790    (1)
    
    Does not include the previously owned office building in Newnan,
    Georgia. See Note 4 Discontinued Operations for
    more information.    7.
    PROPERTY
    AND EQUIPMENT    EstimatedUseful Lives

2010


2009Buildings and improvements

3-39 years

$
499,839


$
496,276Equipment

3-10 years


1,296,278



1,661,297Vehicles

3-5 years


344,562



296,783$
2,140,679


$
2,454,356Less  accumulated depreciation




1,458,234



1,656,800$
682,445


$
797,556     8.
    MORTGAGE
    NOTES PAYABLE AND LEASES     57




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##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Year Ending April 30,

Owned(1)


Leaseback2011

$
2,471,000


$
255,0002012


2,336,000



255,0002013


1,644,000



149,0002014


1,143,000



2015


942,000



Thereafter


3,764,000



Total

$
12,300,000


$
659,000   (1)
    
    Approximately $7,152,000 of these future rental revenues are
    associated with the owned shopping center in Jacksonville,
    Florida, which was sold in June 2010. See Note 20
    Subsequent Events for more information.    Owned Income-Producing


LeasebackProperties Mortgage Payments


Center RentalYear Ending April 30,

Principal(1)


Interest(1)


Payments2011

$
366,823


$
990,749


$
105,2032012


391,531



966,105



105,2032013


4,256,038



711,889



61,3682014


296,128



617,363



2015


314,932



598,560



Thereafter


9,464,872



3,229,430



Total

$
15,090,324


$
7,114,096


$
271,774   (1)
    
    The principal and interest presented above includes amounts
    associated with the owned shopping center in Jacksonville,
    Florida, which was sold in June 2010. Principal due and payable
    in fiscal year 2011 was approximately $194,000 and in total was
    approximately $6,878,000. The related interest due and payable
    in 58




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##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  fiscal year 2011 was approximately $416,000 and in total was
    approximately $4,831,000. See Note 20 Subsequent
    Events for more information.      Secured
    letter of credit
    9.
    OTHER
    LONG-TERM DEBT    2010


2009Note payable bearing interest at 4.5%; principal and interest
    payments due in full at maturity; no maturity date; secured by
    related life insurance policy

$
370,000


$
Note payable bearing interest at 4.5%; principal and interest
    payments due in full at maturity; no maturity date; secured by
    related life insurance policy


200,000



Note payable bearing interest at 6.0%; principal and interest
    payments due in full at maturity in December 2011


412,000



Note payable, net of discount ($150,000 at April 30, 2010),
    bearing interest at the prime rate plus 1.5% (4.75% at
    April 30, 2010); interest only payments due monthly;
    matures December 18, 2011; secured by all general assets of
    The Wheatstone Energy Group


850,000



850,000Note payable bearing interest at 6.8%; interest due annually on
    December 31, beginning December 31, 2004, and
    principal payments due annually in installments as defined in
    the agreement commencing on December 19, 2008; matures on
    December 19, 2010


150,000



235,000Note payable bearing interest at 8.0%; interest due quarterly on
    a calendar year commencing on September 30, 2008, and
    principal payments due in full at maturity on June 6, 2009






100,000Total other long-term debt


1,982,000



1,185,000Less current maturities


150,000



185,000Total other long-term debt, less current maturities

$
1,832,000


$
1,000,000  59




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fiscal Year Ending April 30,2011

$
150,0002012


1,262,0002013


2014


2015


Thereafter


570,000Total

$
1,982,000     10.
    FAIR
    VALUE OF FINANCIAL INSTRUMENTS    
    Level 1 Quoted prices in active markets
    for identical assets or liabilities.
    Level 2 Inputs other than quoted prices
    which are observable for an asset or liability, either directly
    or indirectly, for substantially the full term of the financial
    instrument.
    Level 3 Unobservable inputs for an asset
    or liability when little or no market data is available.         60




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##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    11.
    INCOME
    TAXES    Current


Deferred


TotalYear ended April 30, 2010Federal

$



$
(1,323,377
)

$
(1,323,377
)State and local


13,309



(156,145
)


(142,836
)$
13,309


$
(1,479,522
)

$
(1,466,213
)Year ended April 30, 2009Federal

$



$
(1,625,901
)

$
(1,625,901
)State and local






(45,103
)


(45,103
)$



$
(1,671,004
)

$
(1,671,004
)     2010


2009Computed expected benefit

$
(1,305,412
)

$
(1,681,937
)State and local income taxes


(156,751
)


83,371Permanent items


(8,847
)


(6,638
)State net operating loss adjustment


14,846



(127,775
)Other


(10,049
)


61,975$
(1,466,213
)

$
(1,671,004
)  61




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2010


2009Deferred income tax assets:Items not currently deductible for tax purposes:Net operating loss carryforwards, federal and state(1)

$
3,898,970


$
3,144,227Valuation allowance


(150,512
)


(236,098
)Income-producing properties and property and equipment,
    principally because of differences in capitalized interest


54,118



53,981Capitalized costs


38,116



41,822Bad debt reserves


43,357



47,788Deferred compensation plan expenses


369,423



281,754Equity-based compensation expenses


223,107



152,283Compensated absences


52,354



46,048Other accrued expenses


318,266



394,951Other


91,632



35,249Gross deferred income tax assets


4,938,831



3,962,005Deferred income tax liabilities:Income-producing properties and property and equipment,
    principally because of differences in depreciation and
    capitalized interest


609,851



721,761Intangible assets, principally because of differences in
    amortization


842,539



714,407Gain on real estate sales structured as tax-deferred like-kind
    exchanges


4,229,515



4,158,252Other


58,424



84,796Gross deferred income tax liability


5,740,329



5,679,216Net deferred income tax liability

$
801,498


$
1,717,211   (1)
    
    The federal NOL carryforwards and all significant state NOL
    carryforwards expire between the fiscal years 2024 and 2030.         62




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  12.
    401(K)
    PLAN    13.
    SHAREHOLDERS
    EQUITY       63




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        14.
    NET
    (LOSS) EARNINGS PER SHARE      For the Year Ended April 30, 2010Earnings





Per Share(Loss)


Shares


AmountBasic EPS  loss per share from continuing operations

$
(2,373,234
)


3,685,834


$
(0.64
)Basic EPS  earnings per share from discontinued
    operations


658,193



3,685,834



0.18Effect of dilutive securities










Diluted EPS  loss per share

$
(1,715,041
)


3,685,834


$
(0.46
)   For the Year Ended April 30, 2009Per ShareLoss


Shares


AmountBasic EPS  loss per share from continuing operations

$
(3,275,869
)


3,716,700


$
(0.88
)Basic EPS  loss per share from discontinued operations


(1,311,581
)


3,716,700



(0.35
)Effect of dilutive securities










Diluted EPS  loss per share

$
(4,587,450
)


3,716,700


$
(1.23
)  64




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  15.
    OPERATING
    SEGMENTS  ® ® tm step-by-step
        2010


2009Customer 1


24
%


13
%         65




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  For the Year Ended







ParentApril 30, 2010

BPE


Real Estate


Company(1)


Eliminations


ConsolidatedRevenues from unaffiliated customersBPE Segment services and products:Energy savings projects

$
11,051,059














$
11,051,059Lighting products


1,932,521















1,932,521Energy management services


1,801,271















1,801,271Fifth fuel management services


28,000















28,000Productivity software


3,358,685















3,358,685Total revenues from unaffiliated customers

$
18,171,536


$
2,727,565


$



$



$
20,899,101Intersegment revenue


223,799



544,167







(767,966
)


Total revenues from continuing operations

$
18,395,335


$
3,271,732


$



$
(767,966
)

$
20,899,101(Loss) earnings from continuing operations before income taxes

$
(998,225
)

$
591,210


$
(3,407,886
)

$
(24,546
)

$
(3,839,447
)Segment assets

$
14,715,108


$
47,139,581


$
26,911,435


$
(48,933,105
)

$
39,833,019Goodwill

$
6,354,002


$



$



$



$
6,354,002Interest expenses

$
82,044


$
1,012,776


$
835,596


$
(846,606
)

$
1,083,810Depreciation and amortization

$
702,424


$
564,388


$
110,364


$



$
1,377,176Capital expenditures(2)

$
93,270


$
228,006


$
29,038


$



$
350,314   For the Year Ended







ParentApril 30, 2009

BPE


Real Estate


Company(1)


Eliminations


ConsolidatedRevenues from unaffiliated customersBPE Segment services and products:Energy savings projects

$
5,533,925














$
5,533,925Lighting products


1,664,855















1,664,855Energy management services


2,319,433















2,319,433Fifth fuel management services


















Productivity software


3,674,097















3,674,097Total revenues from unaffiliated customers

$
13,192,310


$
2,791,571


$



$



$
15,983,881Intersegment revenue


20,362



576,080







(596,442
)


Total revenues from continuing operations

$
13,212,672


$
3,367,651


$



$
(596,442
)

$
15,983,881(Loss) earnings from continuing operations before income taxes

$
(2,310,134
)

$
731,987


$
(3,354,164
)

$
(14,562
)

$
(4,946,873
)Segment assets

$
14,118,447


$
49,557,201


$
28,471,595


$
(48,502,587
)

$
43,644,656Goodwill

$
6,354,002


$



$



$



$
6,354,002Interest expenses

$
93,717


$
1,041,275


$
873,284


$
(900,290
)

$
1,107,986Depreciation and amortization

$
822,459


$
559,718


$
71,705


$



$
1,453,882Capital expenditures(2)

$
55,306


$
189,831


$
110,860


$



$
355,997  66




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (1)
    
    The Parent Companys loss in each period is derived from
    corporate headquarters activities and consists primarily of the
    following: Parent Company executive officers compensation
    and costs related to the Companys status as a
    publicly-held company, which include, among other items, legal
    fees, compliance costs, non-employee directors fees, and
    other reporting costs. The corporate headquarters activities do
    not earn revenue. All relevant costs related to the business
    operations of the Companys operating segments are either
    paid directly by the operating segments or are allocated to the
    segments by the Parent Company. The allocation method is
    dependent on the nature of each expense item. Allocated expenses
    include, among other items, accounting services, information
    technology services, insurance costs, and audit and tax
    preparation fees.(2)
    
    Includes property and equipment expenditures only.  16.
    ACQUISITIONS  Fiscal
    2010
    Fiscal
    2009
     67




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Assets andLiabilitiesAcquiredfrom Seller


Estimated LifeCurrent assets

$
322,514Property, furniture and equipment, net


58,699


Various (3-5)Trade name


61,299


15 yearsNon-compete agreements


63,323


2 yearsCustomer relationships


186,632


5 yearsGoodwill


895,285


IndefiniteTotal assets acquired

$
1,587,752Current liabilities


(483,937
)Long-term liabilities


(100,000
)Net assets acquired

$
1,003,815       Fiscal Year EndedApril 30, 2009Revenues

$
16,182Loss from continuing operations

$
(3,277
)Loss from discontinued operations

$
(1,312
)Net loss

$
(4,589
)Loss per share from continuing operations  basic and
    diluted

$
(0.88
)Loss per share from discontinued operations  basic
    and diluted

$
(0.35
)Net loss per share  basic and diluted

$
(1.23
)  68




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##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  17.
    GOODWILL
    AND OTHER INTANGIBLE ASSETS    April 30, 2010Gross Carrying


AccumulatedAmount


AmortizationIntangible assets, subject to amortization:Proprietary BPE software solutions

$
4,096,802


$
2,827,071Acquired computer software


676,837



493,885Real estate lease costs


609,105



255,701Customer relationships


404,632



286,433Deferred loan costs


254,949



136,495Non-compete agreements


63,323



60,684Tradename


61,299



7,834Other


44,882



42,016$
6,211,829


$
4,110,119Intangible assets and goodwill, not subject to
    amortization:Trademark

$
708,707Goodwill

$
6,354,002   April 30, 2009Gross Carrying


AccumulatedAmount


AmortizationIntangible assets, subject to amortization:Proprietary BPE software solutions

$
3,689,695


$
2,340,980Acquired computer software


466,589



458,883Real estate lease costs


565,597



190,189Customer relationships


404,632



252,216Deferred loan costs


254,949



114,163Non-compete agreements


63,323



29,023Tradename


61,299



3,746Other


45,844



39,149$
5,551,928


$
3,428,349Intangible assets and goodwill, not subject to
    amortization:Trademark

$
708,707Goodwill

$
6,354,002   Aggregate amortization expense for all amortizable intangible
    assets:For the year ended April 30, 2010

$
666,591For the year ended April 30, 2009


740,835   69




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##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Estimated future amortization expenses for all amortized
    intangible assets for the fiscal years ended:2011

$
654,2992012


514,9172013


358,9672014


259,1862015


138,888Thereafter


175,453$
2,101,710     18.
    COMMITMENTS
    AND CONTINGENCIES    19.
    QUARTERLY
    FINANCIAL INFORMATION (UNAUDITED)  Form 10-Q Form 10-Q Form 10-K
    Fiscal Year Ended April 30, 2010First


Second


Third


FourthQuarter


Quarter


Quarter


QuarterBPE revenues

$
3,873


$
3,923


$
4,120


$
6,255Real Estate revenues


694



669



718



647Total revenues from continuing operations


4,567



4,592



4,838



6,902Total revenues reclassified to discontinued operations


62



17







Gross profit from continuing operations


1,469



1,464



1,727



2,075Gross profit (loss) reclassified to discontinued
    operations


39



(1
)






Net (loss) earnings


(706
)


(708
)


120



(421
)(2)Net (loss) earnings per share  basic


(0.19
)


(0.19
)


0.03



(0.11
)Net (loss) earnings per share  diluted


(0.19
)


(0.19
)


0.03



(0.11
)  70




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##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Fiscal Year Ended April 30, 2009First


Second


Third


FourthQuarter


Quarter


Quarter


QuarterBPE revenues

$
2,720


$
3,434


$
3,339


$
3,699Real Estate revenues


701



682



716



693Total revenues from continuing operations(1)


3,421



4,116



4,055



4,392Total revenues reclassified to discontinued operations


103



103



103



73Gross profit from continuing operations


1,249



1,478



1,512



1,396Gross profit (loss) reclassified to discontinued operations


73



37



44



(2
)Net loss


(843
)


(910
)


(491
)


(2,343
)(3)Net loss per share  basic


(0.23
)


(0.24
)


(0.14
)


(0.62
)Net loss per share  diluted


(0.23
)


(0.24
)


(0.14
)


(0.62
)    (1)
    
    Quarterly revenues shown above for the first and second quarters
    of fiscal 2009 vary from the revenues previously reported in the
    quarterly reports on
    Form 10-Q
    for the periods ended July 31, 2008, and October 31,
    2008, because the Company has revised its presentation of
    interest income and certain components of other income.
    Subsequent to the issuance of the quarterly report on
    Form 10-Q
    for the period ended October 31, 2008, the Company
    determined that interest income and certain components of other
    income were not presented in accordance with the Securities and
    Exchange Commission (SEC)
    Regulation S-X,
    Article 5,
    Rule 5-03,
    Income Statement. Previously, the Company included
    interest income and certain components of other income in the
    determination of total revenues. Beginning in the third quarter
    of fiscal 2009, the Company has revised its presentation of
    interest income and certain components of other income to
    other (income) and expenses in the consolidated
    statement of operations. The Company does not believe that these
    restatements were material to the Companys consolidated
    financial statements for the year ended April 30, 2009, or
    to the consolidated financial statements of any prior periods.(2)
    
    Included in the net earnings for the third quarter of fiscal
    2010 is a pre-tax gain of approximately $1.2 million as a
    result of the elimination of the balance of the indebtedness on
    an owned office building in Newnan, Georgia, upon the
    propertys transfer to the note holder. See Note 4
    Discontinued Operations for more information.(3)
    
    Included in the net loss for the fourth quarter of fiscal 2009
    is an impairment loss before taxes of approximately $2,159,000
    related to the impairment of an owned office building in Newnan,
    Georgia. See Note 4 Discontinued Operations for
    more information.  20.
    SUBSEQUENT
    EVENTS    
    approximately $6.9 million for assumption of the mortgage
    note;
    approximately $0.5 million for funding of repair
    escrows; and
    approximately $0.6 million for closing costs and prorations. 71




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##### Table of Contents



SCHEDULE III  REAL
    ESTATE AND ACCUMULATED DEPRECIATION
    April 30, 2010
    CostsInitial Cost to Company


CapitalizedBuilding


Subsequentand


to AcquisitionDescription

Encumbrances


Land


Improvements


ImprovementsINCOME-PRODUCING PROPERTIES:Leaseback Shopping Center  Davenport, IA

$



$



$
2,150


$
220,214Office Building  Atlanta, GA


4,228,588



660,000



4,338,102



921,280Shopping Center  Smyrna, TN


3,984,223



1,300,140



3,626,595



46,562Shopping Center  Jacksonville, FL (1)


6,877,513



3,908,004



5,170,420



1,377,17415,090,324



5,868,144



13,137,267



2,565,230REAL ESTATE HELD FOR FUTURE DEVELOPMENT OR SALE:Land  Oakwood, GA






152,265







353,413Land  North Fort Myers






183,221







147,566



335,486







500,979$
15,090,324


$
6,203,630


$
13,137,267


$
3,066,209     Real Estate


Accumulated Depreciation2010


2009


2010


2009BALANCE AT BEGINNING OF YEAR

$
24,167,880


$
25,986,491


$
3,923,396


$
3,359,973ADDITIONS DURING YEARReal estate


228,006



188,729







Depreciation from continuing operations










476,544



563,423Depreciation from discontinued operations










34,556



Transfers














228,006



188,729



511,100



563,423DEDUCTIONS DURING YEARAccumulated depreciation on properties sold or transferred










246,107



Loss on impairment of income- producing property






2,007,340
(5)






Carrying value of real estate sold, transferred, or retired


1,972,136











1,972,136



2,007,340



246,107



BALANCE AT CLOSE OF YEAR

$
22,423,750


$
24,167,880


$
4,188,389


$
3,923,396  72




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##### Table of Contents



Life on WhichDepreciationGross Amounts at Which Carried at Close of Year











in LatestBuilding








Net








Earningsand


Capitalized





Accumulated


Date(s) of


Date


StatementLand


Improvements


Interest


Total(2)


Depreciation


Construction


Acquired


is Computed$



$
222,364


$



$
222,364


$
196,318



1995







7 years660,000



5,259,382







5,919,382



1,819,231



1974, 1997
(3)


1997



39 years1,300,140



3,673,157







4,973,297



394,501



1983, 2006
(4)


2006



39 years3,908,004



6,547,594







10,455,598



1,778,339



1985
(4)


1999



39 years5,868,144



15,702,497







21,570,641



4,188,389505,678







16,644



522,322











1987



330,787











330,787











1993



836,465







16,644



853,109



$
6,704,609


$
15,702,497


$
16,644


$
22,423,750


$
4,188,389       (1)
    
    In June 2010, the Company sold its owned shopping center located
    in Jacksonville, Florida. See NOTE 20 Subsequent
    Events to the consolidated financial statements for more
    information.(2)
    
    The aggregated cost for land and building and improvements for
    federal income tax purposes at April 30, 2010, is
    $15,140,262.(3)
    
    Developed by others in 1974, redeveloped by the Company in 1997.(4)
    
    Developed by others.(5)
    
    Impairment loss on the Companys owned office building in
    Newnan, Georgia. This property was disposed in January 2010. See
    NOTE 4 Discontinued Operations to the
    consolidated financial statements for further information. 73




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##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH INDEPENDENT AUDITORS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE   
  ITEM 9A.
    CONTROLS
    AND PROCEDURES  Rules 13a-15(e)
      Form 10-K, Internal Control-Integrated Framework
  Form 10-K
 
  ITEM 9B.
    OTHER
    INFORMATION    PART III
 
  ITEMS 10-14.
  Form 10-K
   74




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##### Table of Contents



PART IV
 
  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  Form 10-K:
  Financial Statements:
  Management Report on Internal Control over Financial Reporting


37Report of Independent Registered Public Accounting Firm


38Consolidated Balance Sheets at April 30, 2010, and
    April 30, 2009


39Consolidated Statements of Operations for the Years Ended
    April 30, 2010 and April 30, 2009


40Consolidated Statements of Shareholders Equity for the
    Years Ended April 30, 2010 and April 30, 2009


41Consolidated Statements of Cash Flows for the Years Ended
    April 30, 2010 and April 30, 2009


42Notes to Consolidated Financial Statements


44  Financial Statement Schedules:
  Schedule III  Real Estate and Accumulated
    Depreciation


72  Exhibits:
  ExhibitNo.3a.

Amended and Restated Articles of Incorporation(1)3b.

Amended and Restated Bylaws(2)10a.

Directors Deferred Compensation Plan(3)#10b.

2000 Stock Award Plan(4)#10c.

Alan R. Abrams Split Dollar Life Insurance Agreement dated
    May 31, 2001(5)#10d.

J. Andrew Abrams Split Dollar Life Insurance Agreement dated
    May 31, 2001(5)#10e.

Summary Description of Annual Incentive Bonus Plan(6)#10f.

Form of Stock Appreciation Right Agreement(7)#21.

List of the Companys Subsidiaries23a.

Consent of Deloitte & Touche LLP31.1

Certification of the CEO, pursuant to Section 302 of the
    Sarbanes-Oxley Act of 200231.2

Certification of the CFO, pursuant to Section 302 of the
    Sarbanes-Oxley Act of 200232.1

Section 906 Certification of the CEO32.2

Section 906 Certification of the CFO     (1)
    This exhibit is incorporated by reference to the Companys
    Form 8-K
    filed November 19, 2009 (SEC File
    No. 0-10146).(2)
    This exhibit is incorporated by reference to the Companys
    Form 8-K
    filed September 25, 2008 (SEC File
    No. 0-10146).(3)
    This exhibit is incorporated by reference to the Companys
    Form 8-K
    filed November 30, 2007 (SEC File
    No. 0-10146).(4)
    This exhibit is incorporated by reference to the Companys
    Form 10-K
    for the year ended April 30, 1991 (SEC File
    No. 0-10146).(5)
    This exhibit is incorporated by reference to the Companys
    Form S-8
    filed September 29, 2000 (SEC File
    No. 0-10146).(6)
    This exhibit is incorporated by reference to the Companys
    Form 10-K
    for the year ended April 30, 2001 (SEC File
    No. 0-10146).(7)
    This exhibit is incorporated by reference to the Companys
    Form 10-Q
    for the quarter ended October 31, 2005 (SEC File
    No. 0-10146).(8)
    This exhibit is incorporated by reference to the Companys
    Form 10-K
    for the year ended April 30, 2006 (SEC File
    No. 0-10146). #
    Management compensatory plan or arrangement.  (B)
    The Company hereby files as exhibits to this Annual Report on
    Form 10-K
    the exhibits set forth in Item 15(A)3 hereof.(C)
    The Company hereby files as financial statement schedules to
    this Annual Report on
    Form 10-K
    the financial statement schedules set forth in Item 15(A)2
    hereof. 75




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##### Table of Contents



SIGNATURES
      Dated: July 28, 2010

By: /s/  Alan
    R. AbramsAlan
    R. Abrams
    Chief Executive Officer     Dated: July 28, 2010

/s/  Alan
    R. AbramsAlan
    R. Abrams
    Chairman of the Board of Directors,
    Chief Executive OfficerDated: July 28, 2010

/s/  Samuel
    E. AllenSamuel
    E. Allen
    DirectorDated: July 28, 2010

/s/  Gilbert
    L. DanielsonGilbert
    L. Danielson
    DirectorDated: July 28, 2010

/s/  Herschel
    KahnHerschel
    Kahn
    DirectorDated: July 28, 2010

/s/  Robert
    T. McWhinney, Jr.Robert
    T. McWhinney, Jr.
    DirectorDated: July 28, 2010

/s/  Rick
    A. PaternostroRick
    A. Paternostro
    Chief Financial Officer  76