##### 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, 2009
  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

30339-2029(Address of principal executive
    offices)

(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
  o o
  Regulation S-K Form 10-K Form 10-K. o
  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




---





TABLE OF CONTENTS  PART IITEM 1. BUSINESSITEM 1A. RISK FACTORSITEM 1B. UNRESOLVED STAFF COMMENTSITEM 2. PROPERTIESITEM 3. LEGAL PROCEEDINGSITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSPART 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 OPERATIONSREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMCONSOLIDATED BALANCE SHEETSCONSOLIDATED STATEMENTS OF OPERATIONSCONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITYCONSOLIDATED STATEMENTS OF CASH FLOWSNOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the Years Ended April 30, 2009 and 2008SCHEDULE III -- REAL ESTATE AND ACCUMULATED DEPRECIATION April 30, 2009ITEM 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 SCHEDULESSIGNATURESEX-21EX-23.(A)EX-31.1EX-31.2EX-32.1EX-32.2    Table of Contents  
  PART I
 
  ITEM 1.
    BUSINESS              BUILDING
    PERFORMANCE EFFICIENCY (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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REAL
    ESTATE SEGMENT
      EMPLOYEES
    AND EMPLOYEE RELATIONS
    SEASONAL
    NATURE OF BUSINESS
    COMPETITION
   3




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##### Table of Contents



BACKLOG
    IncreaseApril 30,


(Decrease)2009


2008


Amount


PercentageBPE(1)

$
9,885,000


$
7,171,000


$
2,714,000



38Real Estate(2)


2,808,000



3,071,000



(263,000
)


(9
)Less: Intersegment eliminations(3)


(547,000
)


(581,000
)


34,000



(6
)Total Backlog

$
12,146,000


$
9,661,000


$
2,485,000



26   (1)
    
    BPE backlog at April 30, 2009, increased by approximately
    $2,714,000, or 38%, compared to the year-earlier period,
    primarily due to:      (b)
    a decrease of approximately $127,000 in productivity software
    products and services; and(c)
    a decrease of approximately $1,224,000 in energy management
    consulting services, primarily as a result of the successful
    completion of approximately $850,000 of multi-year consulting
    services projects.  The Company estimates that a substantial majority of the BPE
    backlog at April 30, 2009, will be recognized as revenue
    prior to April 30, 2010.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 $130,000 or 1.3%.(2)
    
    Real Estate backlog at April 30, 2009, decreased by
    approximately $263,000, or 9%, compared to the year-earlier
    period, primarily due to a decrease in future rental revenues at
    the Companys owned office building located in Newnan,
    Georgia, due to the anchor tenants default as described in
    ITEM 2. PROPERTIES  Owned Office
    Buildings.(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
    EXECUTIVE
    OFFICERS OF THE REGISTRANT
    Alan R.
    Abrams(54)
    Officer
    since 1988   4




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Rick A.
    Paternostro(39)
    Officer
    since 2000    Melinda
    S. Garrett(53)
    Officer
    since 1990    J. Andrew
    Abrams(49)
    Officer
    since 1988    M. Todd
    Jarvis(43)
    Officer
    since 2004     
  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 grow revenues from these offerings, its prospects will be
    adversely affected.
        
    the ability to add new products and services for the BPE Segment
    on a timely basis, and the ability to keep its current products
    and services competitive;
    the successful hiring, training and retention of qualified
    personnel; 5




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
    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 the
    ability to integrate such acquired businesses into existing
    operations.    The Company may not be able to secure additional capital,
    if needed, on favorable terms, or at all, which could materially
    adversely affect the Companys ability to operate its
    businesses and grow the BPE Segment.
          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.
     6




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Current market and economic conditions could impact demand
    for the Companys services and products
  and/or
  In recent years, net earnings have been driven
    significantly by capital gains from the sale of real estate
    income-producing properties. Without such gains recurring in the
    future, the Company might not be profitable.
      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.
     7




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If the Company cannot find suitable business acquisition
    candidates or integrate completed business acquisitions
    successfully, its prospects could be adversely affected.
        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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Risks
    Related to the Companys BPE Segment
  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, it may encounter pricing
    pressure and implementation challenges, and the Company may have
    to delay revenue recognition with respect to certain sales to
    these customers, all of which could harm the BPE Segments
    business.
    A portion of the BPE Segments revenues are derived
    from fixed price contracts, which could result in losses on
    contracts.
   9




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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.
    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 is obtained to a customers data, 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.
    The BPE Segment is dependent on the assistance of its
    customers to complete projects on a timely basis. If a customer
    is unable or unwilling to offer assistance, it could affect
    project timelines and reduce or slow the recognition of energy
    savings revenues.
   10




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Risks
    Related to the Companys Real Estate Segment
    The market for purchasing and leasing 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;
    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.       11




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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.
    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   12




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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)


2009


Company


2009


2009(1)


2009(2)11459 Old Nashville Hwy. Smyrna, TN(3)


8.0



51,925



100



2006


$
568,838


$
303,014


$
4,032,8878102 Blanding Blvd. Jacksonville, FL(4)


18.8



174,220



98



1999


$
1,786,012


$
610,238


$
7,060,380   (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. The lender has an option to
    call the note for early repayment any time after July 1,
    2011, upon thirteen months prior written notice.    LeaseSquare


Expiration


OptionsAnchor Tenant(1)

Location

Footage


Date


to RenewHarbor Freight Tools

Jacksonville, FL


15,700



2012


4 for 5 years eachPublix(2)

Jacksonville, FL


85,560



2010


6 for 5 years eachOffice Depot

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)
    
    Publix has subleased the premises to Floor and Decor Outlets,
    but remains liable under the lease until the lease expires.     13




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##### Table of Contents



OWNED
    OFFICE BUILDINGS
      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(s)


2009


Company


2009


2009(1)


2009(2)246 Bullsboro Dr.
    Newnan, GA(3)


1.35



21,000



28



2007


$
473,124


$
223,350


$
3,168,9591945 The Exchange
    Atlanta, GA(4)


3.12



65,880



54



1997


$
785,808


$
444,087


$
4,340,273   (1)
    
    Includes principal and interest.(2)
    
    The Companys liability for repayment is limited by
    exculpatory provisions to its interests in the respective
    mortgaged properties.(3)
    
    Acquired by the Company in March 2007, originally developed in
    1983 by unrelated third parties, and completely renovated in
    2006 by unrelated third parties.(4)
    
    Includes the Companys corporate headquarters building of
    which the Company leases approximately 25,928 square feet.
    Rental income includes $576,080 of 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   (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
   14




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##### Table of Contents



Feet in


Placed in Service


Income


ExpenseLocation

Acres


Building


by Company


2009


2009Davenport, IA


10.0



84,180



1977


$
255,311


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

Acres


Completed


Intended Use(1)Mundy Mill Road









Commerical 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   
  ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   15




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PART II
 
  ITEM 5.
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED
    STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
    SECURITIES  Market PricesFiscal 2009


Fiscal 2008(1)


Cash DividendsHigh


Low


High


Low


Paid per ShareTrade


Trade


Trade


Trade


2009


2008(1)First Quarter

$
6.09


$
3.71


$
6.28


$
3.95


$
0.038


$
0.034Second Quarter


5.13



2.58



6.42



4.08



0.038



0.034Third Quarter


3.75



1.07



6.19



5.44



0.038



0.034Fourth Quarter


2.45



1.50



6.19



3.73



0.020



0.034   (1)
    
    Adjusted for stock dividend.     16




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ITEM 6.
    SELECTED
    FINANCIAL DATA    Years Ended April 30,

2009


2008


2007


2006


2005Net (Loss) Earnings(1)

$
(4,587,450
)

$
1,335,562


$
966,626


$
525,766


$
1,897,054Net Loss  Continuing Operations

$
(4,587,450
)

$
(1,160,542
)

$
(1,148,405
)

$
(424,508
)

$
(1,439,570
)Net Earnings  Discontinued Operations

$



$
2,496,104


$
2,115,031


$
950,274


$
3,336,624Net (Loss) Earnings Per Share(1)(3)

$
(1.23
)

$
.36


$
.26


$
.14


$
.51Net Loss Per Share  Continuing Operations(3)

$
(1.23
)

$
(.31
)

$
(.31
)

$
(.11
)

$
(.39
)Net Earnings Per Share  Discontinued Operations(3)

$



$
.67


$
.57


$
.26


$
.90Consolidated Revenues  Continuing Operations

$
16,456,372


$
19,347,726


$
17,009,005


$
15,868,293


$
19,659,516Consolidated Revenues  Reclassified to Discontinued
    Operations(2)

$



$



$
2,066,228


$
2,371,882


$
3,009,834Weighted Average Shares Outstanding at Year-End(3)


3,716,700



3,711,659



3,707,217



3,708,797



3,703,749Cash Dividends Paid Per Share(3)

$
.13


$
.14


$
.14


$
.14


$
.29Shareholders Equity

$
17,538,530


$
22,466,378


$
21,460,211


$
20,946,748


$
20,913,411Shareholders Equity Per Share(3)

$
4.72


$
6.05


$
5.79


$
5.65


$
5.93Working Capital

$
7,030,872


$
13,769,470


$
5,713,582


$
8,352,086


$
9,792,866Depreciation and Amortization  Continuing
    Operations(4)

$
1,624,795


$
1,506,618


$
1,317,905


$
929,851


$
1,011,234Total Assets

$
43,644,656


$
52,315,550


$
57,393,421


$
52,410,256


$
48,592,810Income-Producing Properties and Property and Equipment, net(5)

$
20,188,931


$
22,585,309


$
22,459,873


$
14,011,977


$
13,884,382Income-Producing Properties and Property and Equipment,
    net  Reclassified to Discontinued Operations(2)

$



$



$
10,334,044


$
7,548,794


$
11,365,490Long-Term Debt(6)

$
19,220,640


$
19,708,769


$
19,086,723


$
13,416,512


$
13,636,640Long-Term Debt  Reclassified to Discontinued
    Operations(2)

$



$



$
6,052,018


$
7,873,030


$
11,717,967Total Liabilities

$
26,106,126


$
29,849,172


$
35,933,210


$
31,463,508


$
28,813,171Variable Rate Debt(6)(7)

$
850,000


$
870,000


$
3,400,000


$
930,000


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


(22.9
)%


6.1
%


4.6
%


2.5
%


9.3
%   (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 in accordance with SFAS 144.(3)
    
    Adjusted for stock dividend.(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.(6)
    
    Does not include mortgage debt associated with discontinued
    operations.(7)
    
    Includes short-term and long-term debt. 17




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ITEM 7.
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
    CONDITION AND RESULTS OF OPERATIONS  INTRODUCTION
    Accounting
    for the Impairment or Disposal of Long-Lived Assets,
    RECENT
    DEVELOPMENTS
       18




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


Amount


Percentage2009


2008


Change


ChangeBPE(1)

$
13,192


$
14,249


$
(1,057
)


(7
)Real Estate(2)


3,264



5,098



(1,834
)


(36
)$
16,456


$
19,347


$
(2,891
)


(15
)  19




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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


Percentage2009


2008


Change


ChangeEnergy Savings Projects

$
5,534


$
8,550


$
(3,016
)


(35
)Lighting Products


1,665







1,665



Energy Management Services


2,319



2,355



(36
)


(2
)Productivity Software


3,674



3,344



330



10$
13,192


$
14,249


$
(1,057
)


(7
)   BPE Segment revenues decreased by approximately $1,057,000, or
    7%, in fiscal 2009 compared to fiscal 2008, primarily due to:  (a)
    energy savings (lighting and mechanical) project revenues that
    were approximately $3,016,000 lower than in the year-earlier
    period, primarily because of:  i.
    delays in the receipt of certain orders, as discussed above,
    which were subsequently received; and  ii.
    the absence of revenues of approximately $1 million that
    were generated by a one-time special project for a large retail
    customer in the year-earlier period;    iii.
    revenues of approximately $1,860,000 from several new energy
    savings project customers, representing the initial phases of
    new energy savings program initiatives for those customers.  year-over-year
  (b)
    lighting product revenues of approximately $1,665,000, as the
    result of the Companys acquisition during the first
    quarter of fiscal 2009 of its lighting distribution
    business; and  (c)
    an increase in productivity software revenues of approximately
    $330,000, primarily due to new customer implementations and
    conversions from legacy software systems to the Companys
    proprietary
    web/wireless
    system.  While management believes that the decrease in BPE Segment
    revenues in fiscal 2009 compared to fiscal 2008 is due in part
    to the general deterioration of the overall economy and its
    effect on certain of the Companys customers, revenues in
    the second half of fiscal 2009 were approximately 28% higher
    than the comparable prior year period, and order activity was
    strong in the second half of fiscal 2009. As a result,
    management believes that the Company is well positioned to
    continue to grow BPE Segment revenues.(2)
    
    In the current year, fiscal 2009, Real Estate revenues decreased
    by approximately $1,834,000 or 36%, compared to the same period
    in fiscal 2008, primarily due to:  (a)
    the absence in the current fiscal year of revenues of
    approximately $1,553,000 generated last year by the sale of the
    Companys leasehold interest in its shopping center in
    Jacksonville, Florida; and(b)
    a net decrease in rental revenues of approximately $377,000 at
    the Companys owned headquarters building in Atlanta,
    Georgia, primarily because of the expiration of a third-party
    anchor tenant lease in January 2008;    (c)
    approximately $66,000 in rental revenues as the result of an
    early lease termination in the first quarter of fiscal
    2009; and  (d)
    approximately $90,000 from the receipt of promissory notes in
    exchange for the termination of a lease guarantee in the fourth
    quarter of fiscal 2009. 20




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


for the Years EndedApril 30,


April 30,2009


2008


2009


2008BPE(1)

$
8,562


$
9,540



65



67Real Estate(2)


2,116



2,225



65



44$
10,678


$
11,765



65



61   NOTES TO CHART B
  (1)
    
    BPE Segment cost of revenues decreased by approximately
    $978,000, or 10%, in fiscal 2009 compared to fiscal 2008,
    primarily due to the corresponding decrease in revenues (see
    Chart A).On a
    percentage-of-revenues
    basis, BPE Segment cost of revenues decreased by approximately
    2% in fiscal 2009 compared to fiscal 2008, primarily due to a
    change in the mix of services and products.(2)
    
    Real Estate Segment cost of revenues decreased by approximately
    $109,000, or 5%, in fiscal 2009 compared to fiscal 2008,
    primarily due to the absence of approximately $94,000 in sales
    costs that were included in the prior year as a result of the
    sale of the Companys leasehold interest in a shopping
    center located in Jacksonville, Florida, in July 2007.On a
    percentage-of-revenues
    basis, Real Estate Segment cost of revenues increased by
    approximately 21% in fiscal 2009 compared to fiscal 2008,
    primarily due to the inclusion of revenues of approximately
    $1,553,000 in the prior year that were generated by the sale of
    the Companys leasehold interest in a shopping center
    located in Jacksonville, Florida, in July 2007; the costs of the
    sale included in the prior year were approximately $94,000.  SELLING,
    GENERAL AND ADMINISTRATIVE EXPENSES
     21




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##### Table of Contents



CHART
    C
    SELLING, GENERAL AND ADMINISTRATIVE EXPENSES FROM CONTINUING
    OPERATIONS
    SUMMARY BY SEGMENT(Dollars in
    thousands)
  Percentage ofYears Ended


Segment RevenuesApril 30,


for the Years Ended April 30,2009


2008


2009


2008BPE(1)

$
5,718


$
5,068



43



36Real Estate(2)


694



797



21



16Parent(3)


3,493



3,272



21



17$
9,905


$
9,137



60



47   NOTES TO CHART C
  (1)
    
    BPE Segment SG&A expenses increased by approximately
    $650,000, or 13%, in fiscal 2009 compared to fiscal 2008,
    primarily due to:  (a)
    the additional operating costs of approximately $1,060,000
    associated with the Companys new lighting distribution
    business, which was acquired during the first quarter of fiscal
    2009;    (b)
    a decrease in sales and marketing expenses of approximately
    $204,000; and  (c)
    a decrease of approximately $218,000 due to reduced personnel
    costs, consulting costs, and other cost-savings measures.  On a
    percentage-of-revenues
    basis, BPE Segment SG&A expenses increased by approximately
    7% in fiscal 2009 compared to fiscal 2008, primarily due to the
    decrease in revenues without a corresponding proportional
    decrease in expenses (see Chart A).(2)
    
    Real Estate Segment SG&A expenses decreased by
    approximately $103,000, or 13%, in fiscal 2009 compared to
    fiscal 2008, primarily due to decreases in insurance, legal, and
    personnel costs.On a
    percentage-of-revenue
    basis, Real Estate Segment SG&A expenses increased by
    approximately 5% in fiscal 2009 compared to fiscal 2008,
    primarily due to the inclusion of revenues of approximately
    $1,553,000 in the prior year that were generated by the sale of
    the Companys leasehold interest in a shopping center
    located in Jacksonville, Florida, in July 2007.(3)
    
    Parent SG&A expenses increased by approximately $221,000,
    or 7%, in fiscal 2009 compared to fiscal 2008, primarily due to:  (a)
    an increase in legal fees of approximately $212,000 that were
    incurred to settle an insurance claim, as well as increased SEC
    compliance costs;  (b)
    an increase in personnel-related expenses of approximately
    $167,000;  (c)
    an increase in accounting and other non-legal compliance costs
    of approximately $149,000; and  (d)
    an increase in stock compensation expense of approximately
    $73,000;    (e)
    a decrease of approximately $494,000 in incentive compensation
    expenses, as there were no incentive compensation expenses in
    fiscal 2009.  percentage-of-revenues
 22




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##### Table of Contents



(LOSS)
    EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME
    TAXES
      CHART
    D
    (LOSS) EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME
    TAXES
    SUMMARY BY SEGMENT(Dollars in
    thousands)
  Years Ended


IncreaseApril 30,


(Decrease)2009


2008


AmountBPE(1)

$
(1,126
)

$
(402
)

$
(724
)Real Estate(2)

$
(2,835
)


1,673



(4,508
)Parent(3)


(3,194
)


(3,231
)


37Total

$
(7,155
)

$
(1,960
)

$
(5,195
)   NOTES TO CHART D
  (1)
    
    BPE Segment loss before income taxes increased by approximately
    $724,000 for fiscal 2009 compared to the same period in fiscal
    2008, primarily due to:  (a)
    a decrease in revenues of approximately $1,057,000 (see Chart
    A), primarily due to delays in the receipt of customer orders
    for certain energy savings projects in the first half of fiscal
    2009. Such orders have been received and have contributed to the
    BPE backlog at April 30, 2009, that is 38% higher than the
    BPE backlog balance at April 30, 2008;  (b)
    a corresponding decrease in cost of revenues of approximately
    $978,000; and  (c)
    an increase in SG&A expenses of approximately $650,000,
    primarily due to the additional costs associated with the
    Companys new lighting distribution business which was
    acquired during the first quarter of this fiscal year, offset by
    reductions in sales and marketing and general and administrative
    expenses.  (2)
    
    Real Estate Segment loss before income taxes of approximately
    $2,835,000 for fiscal 2009 represents an earnings decline of
    approximately $4,508,000 compared to the same period in fiscal
    2008, primarily due to:  (a)
    a decrease in revenues of approximately $1,834,000 (see Chart
    A), primarily due to the absence of revenues of approximately
    $1,553,000 generated in the prior year by the sale of a
    leasehold interest, as well as a net decrease in rental revenues
    of approximately $377,000 from the Companys owned
    headquarters building in Atlanta, Georgia, primarily due to the
    expiration of a third party anchor tenant lease in January
    2008; and  (b)
    an impairment loss of approximately $2,159,000 on the
    Companys owned office building located in Newnan, Georgia.
    For further information, see ITEM 2:
    PROPERTIES  Owned Office Buildings and
    Note 7 to the consolidated financial statements.  (3)
    
    Parent loss before income taxes decreased by approximately
    $37,000 for fiscal 2009 compared to the same period in fiscal
    2008, primarily due to:  (a)
    the settlement of an insurance claim in the amount of $285,000;    (b)
    an increase in SG&A expenses of approximately $221,000. 23




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##### Table of Contents



INCOME
    TAX BENEFIT
    INTEREST
    COSTS
    ACQUISITIONS
  Fiscal
    2009
    Fiscal
    2008
    GAINS ON
    SALE OF REAL ESTATE HELD FOR SALE OR FUTURE
    DEVELOPMENT
  Fiscal
    2009
    Fiscal
    2008
    DISCONTINUED
    OPERATIONS
  Fiscal
    2009
    Fiscal
    2008
   24




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##### Table of Contents



LIQUIDITY
    AND CAPITAL RESOURCES
        (a)
    losses in fiscal 2009 from continuing operations before
    depreciation, amortization, income taxes and impairment loss on
    income-producing property of approximately $3,371,000;  (b)
    cash payments of approximately $494,000 for incentive
    compensation expenses accrued in the prior fiscal year, but paid
    in fiscal 2009 as a result of the successful achievement of
    certain Company earnings and performance goals in the prior year;  (c)
    an increase in other current assets of approximately $348,000,
    due primarily to an increase in inventories and prepaid software
    consulting expenses; and  (d)
    a net decrease in trade accounts payable, accrued expenses, and
    other liabilities of approximately $65,000, due to the timing
    and submission of payments;    (e)
    a decrease in net accounts receivable of $595,000, primarily as
    a result of the timing of billing and receipt of payments. 25




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##### Table of Contents



(a)
    approximately $903,000 used for the acquisition of the
    Companys lighting distribution business in the first
    quarter of fiscal 2009;  (b)
    approximately $358,000 used for additions to intangible assets,
    primarily related to the development of enhancements to
    BPEs proprietary building productivity software solutions;  (c)
    approximately $193,000 used for additions to income-producing
    properties, primarily related to tenant and building
    improvements;  (d)
    $150,000 used for the purchase of a
    held-to-maturity
    investment related to a scheduled increase in restricted cash as
    required by a provision of a real estate mortgage loan agreement;  (e)
    approximately $166,000 used for additions to property and
    equipment; and  (f)
    approximately $140,000 received from a real estate tenant and
    temporarily placed in escrow, related to a lease modification
    and assignment agreement.    (a)
    payment of the regular quarterly cash dividends to shareholders
    of approximately $501,000;  (b)
    scheduled principal payments on real estate mortgage notes of
    approximately $352,000;  (c)
    scheduled principal payments on other long-term debt of
    approximately $281,000; and  (d)
    repurchases of the Companys common stock of approximately
    $136,000.         26




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##### Table of Contents



Mortgage
    Notes
    Secured
    Letter of Credit
    Repurchases
    of Common Stock
   27




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##### Table of Contents



CONTRACTUAL
    OBLIGATIONS
    Payment Due by PeriodLess than








More thanContractual Obligations

Total


1 Year


1 - 3 Years


3 - 5 Years


5 YearsMortgage notes payable(1)

$
18,602,498


$
381,858


$
849,421


$
4,654,661


$
12,716,558Interest on mortgage notes payable(2)


9,576,156



1,202,059



2,324,331



1,685,238



4,364,52828,178,654



1,583,917



3,173,752



6,339,899



17,081,086Operating leases(3)


376,977



105,203



210,406



61,368



Other long-term debt


1,185,000



185,000



1,000,000







Interest on other long-term debt(4)


289,407



120,769



168,638







1,474,407



305,769



1,168,638







Total

$
30,030,038


$
1,994,889


$
4,552,796


$
6,401,267


$
17,081,086   (1)
    
    Regularly scheduled principal amortization and final payments
    due upon maturity. On one of the mortgage notes, the lender has
    an option to call the note for early repayment any time after
    July 1, 2011, upon thirteen (13) months prior written
    notice. The balance of this mortgage note payable was
    approximately $7,060,000 as of April 30, 2009. The
    information presented here assumes the call option will not be
    exercised.(2)
    
    In computing interest expense, the Company used the applicable
    contractual rate. All of the mortgage notes payable are fixed
    rate debt instruments. The Companys liability for
    repayment of each of these mortgages is limited by exculpatory
    provisions to its interest in the respective mortgaged
    properties.(3)
    
    Future minimum rental payments on the leaseback shopping center.
    The Companys liability for payment under this lease is
    limited to its interest in the leaseback.(4)
    
    In computing interest expense related to variable rate debt, a
    coupon rate of 4.75% (prime rate at April 30, 2009, plus
    1.5%) was assumed for all periods, and for fixed rate debt, the
    applicable contractual rate was used for all periods.  EFFECTS
    OF INFLATION ON REVENUES AND OPERATING PROFITS
       28




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CRITICAL
    ACCOUNTING POLICIES
    Revenue
    Recognition
  Revenue Recognition
    percentage-of-completion 81-1, Accounting for Performance of Construction-Type and Certain
    Production-Type Contracts (SOP 81-1). SOP 81-1, and/or SOP 81-1, percentage-of-completion
   29




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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; 30




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##### Table of Contents




    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;
    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.      00-3 98-1, Accounting for the Costs of Computer Software Developed or
    Obtained for Internal Use SOP 98-1
    
    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. 31




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##### Table of Contents



Valuation
    of Goodwill and Other Indefinite-Lived Intangible
    Assets
  Goodwill
    and Other Intangible Assets
             32




---



##### Table of Contents



Income
    Taxes
         33




---



##### Table of Contents



Discontinued
    Operations
  Accounting for the
    Impairment or Disposal of Long-Lived Assets,
  Recent
    Accounting Pronouncements
  non-grandfathered,
  The
    Hierarchy of Generally Accepted Accounting Principles
  Subsequent Events
 34




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##### Table of Contents



FAS 115-2 FAS 124-2, Recognition and Presentation of Other-Than-Temporary
    Impairments FAS 115-2 FAS 124-2). FAS 115-2 FAS 124-2
  Business Combinations Business Combinations
  FSP 142-3, Determining the Useful Life of Intangible Assets (FSP 142-3). FSP 142-3 Goodwill and Other Intangible Assets Business
    Combinations FSP 142-3
  Fair Value Measurements
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities  including an amendment of FASB Statement
    No. 115
 35




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##### Table of Contents



CAUTIONARY
    STATEMENT REGARDING FORWARD-LOOKING INFORMATION
  Form 10-K,
     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 30,2009


2008ASSETSCURRENT ASSETS:Cash and cash equivalents (Note 2)

$
4,821,126


$
8,382,947Restricted cash (Note 4)






3,470,700Receivables:Trade accounts and notes, net of allowance for doubtful accounts
    of $145,236 and $33,196, respectively


1,368,577



1,610,846Contracts, net of allowance for doubtful accounts of $4,294 and
    $93,811, respectively, including retained amounts of $219,385
    and $91,357, respectively


1,764,327



1,998,077Costs and earnings in excess of billings (Note 6)


408,950



275,754Deferred income taxes (Note 11)


579,423



750,488Other current assets (Note 2)


1,659,721



1,011,304Total current assets


10,602,124



17,500,116INCOME-PRODUCING PROPERTIES, net (Note 7)


19,391,375



21,773,409PROPERTY AND EQUIPMENT, net (Note 8)


797,556



811,900OTHER ASSETS:Real estate held for future development or sale


853,109



853,109Intangible assets, net (Note 18)


2,910,596



3,222,125Goodwill (Note 18)


6,354,002



5,458,717Other assets (Note 2)


2,735,894



2,696,174Total assets

$
43,644,656


$
52,315,550LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Trade and subcontractors payables

$
851,633


$
550,360Accrued expenses


1,416,145



1,143,794Deferred revenue


708,401



848,197Accrued incentive compensation






494,000Billings in excess of costs and earnings (Note 6)


28,215



62,559Current maturities of mortgage notes and other long-term debt


566,858



631,736Total current liabilities


3,571,252



3,730,646DEFERRED INCOME TAXES (Note 11)


2,489,357



5,271,441OTHER LIABILITIES


824,877



1,138,316MORTGAGE NOTES PAYABLE, less current maturities
    (Note 9)


18,220,640



18,603,769OTHER LONG-TERM DEBT, less current maturities (Note 10)


1,000,000



1,105,000Total liabilities


26,106,126



29,849,172COMMITMENTS AND CONTINGENCIES (Note 19)SHAREHOLDERS EQUITY:Common stock, $1 par value; 10,000,000 shares
    authorized;3,917,778 issued and 3,691,369 outstanding at April 30,
    2009;3,708,836 issued and 3,539,770 outstanding at April 30, 2008


3,917,778



3,708,836Additional paid-in capital


6,026,101



5,045,100Retained earnings


8,569,451



14,511,159Treasury stock (common shares) of 226,409 and 169,066,
    respectively


(974,800
)


(798,717
)Total shareholders equity


17,538,530



22,466,378Total liabilities and shareholders equity

$
43,644,656


$
52,315,550    39




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##### Table of Contents



SERVIDYNE,
    INC.

    CONSOLIDATED STATEMENTS OF OPERATIONS
  Year Ended April 30,2009


2008REVENUES:Building Performance Efficiency (BPE)

$
13,192,310


$
14,249,228Real Estate


3,264,062



5,098,49816,456,372



19,347,726COST OF REVENUES:BPE


8,562,024



9,539,949Real Estate


2,115,678



2,225,35310,677,702



11,765,302SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:


9,904,430



9,137,012OTHER (INCOME) AND EXPENSES:Other income (Note 2)


(317,957
)


(91,027
)Interest income


(111,786
)


(294,288
)Interest expense


1,300,295



1,371,171Loss on impairment of income-producing property (Note 7)


2,158,673



3,029,225



985,856GAIN ON SALE OF REAL ESTATE (Note 17), net of costs of sale
    of$0 and $279,481, respectively






580,519LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES


(7,154,985
)


(1,959,925
)INCOME TAX EXPENSE (BENEFIT) (Note 11):Current






15,907Deferred


(2,567,535
)


(815,290
)(2,567,535
)


(799,383
)LOSS FROM CONTINUING OPERATIONS


(4,587,450
)


(1,160,542
)DISCONTINUED OPERATIONS (Note 5):Earnings from discontinued operations, adjusted for applicable
    income tax expense of $0 and $11,219, respectively






18,305Gain on sale of real estate income-producing properties,
    adjusted for applicable income tax expense of $0 and $1,518,651,
    respectively






2,477,799EARNINGS FROM DISCONTINUED OPERATIONS






2,496,104NET (LOSS) EARNINGS

$
(4,587,450
)

$
1,335,562NET (LOSS) EARNINGS PER SHARE (Note 14):From continuing operations  basic and diluted

$
(1.23
)

$
(0.31
)From discontinued operations  basic and diluted






0.67NET (LOSS) EARNINGS PER SHARE  BASIC AND DILUTED

$
(1.23
)

$
0.36    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, 2007


3,695,336


$
3,695,336


$
4,875,160


$
13,684,779


$
(795,064
)

$
21,460,211Net earnings














1,335,562







1,335,562Common stock issued


2,500



2,500



(2,500
)










Stock compensation expense










132,440







(3,653
)


128,787Stock option exercise


11,000



11,000



40,000











51,000Cash dividends declared  $0.137 per share (adjusted
    for subsequent stock dividend)














(509,182
)






(509,182
)BALANCES 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
)

$
17,538,530    41




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##### Table of Contents



SERVIDYNE,
    INC.

    CONSOLIDATED STATEMENTS OF CASH FLOWS
  Fiscal Year Ended2009


2008CONTINUING OPERATIONS:Cash flows from operating activities:Net (loss) earnings

$
(4,587,450
)

$
1,335,562Earnings from discontinued operations, net of tax






(2,496,104
)Adjustments to reconcile net (loss) earnings to net cash used in
    operating activities:Loss on impairment of income-producing property


2,158,673



Gain on sale of real estate






(580,519
)Loss on disposal of assets


11,654



108,133Depreciation and amortization


1,624,795



1,506,618Amortization of mortgage discount


(20,000
)


(30,000
)Deferred tax benefit


(2,611,019
)


(799,383
)Stock compensation expense


205,118



128,787Adjustment to cash surrender value of life insurance


(66,633
)


(67,068
)Straight-line rent


(57,058
)


15,922Provision for doubtful accounts, net


22,523



112,294Changes in assets and liabilities:Receivables


572,018



(1,509,056
)Costs and earnings in excess of billings


(133,196
)


(10,214
)Other current assets


(347,896
)


352,359Other assets


(8,797
)


Trade and subcontractors payable


(138,263
)


(55,497
)Accrued expenses and deferred revenue


88,154



203,962Accrued incentive compensation


(494,000
)


(90,416
)Billings in excess of costs and earnings


(34,344
)


(156,746
)Other liabilities


(14,676
)


185,436Net cash used in operating activities


(3,830,397
)


(1,845,930
)Cash flows from investing activities:Deposit of cash proceeds from sale of real estate held in escrow






(3,470,700
)Release of restricted cash held in escrow


3,504,096



Deposit of restricted cash


(139,833
)


Purchase of held to maturity investments


(150,000
)


Proceeds from sale of real estate






852,260Additions to income-producing properties


(192,932
)


(732,833
)Additions to property and equipment


(166,166
)


(181,779
)Additions to intangible assets


(358,160
)


(269,758
)Acquisition, net of cash acquired


(902,657
)


Premiums paid on officers life insurance policies


(56,000
)


Net cash provided by (used in) investing activities


1,538,348



(3,802,810
)Cash flows from financing activities:Real estate loan proceeds






3,200,000Mortgage repayments


(352,131
)


(2,500,000
)Debt repayments


(280,875
)


(556,883
)Repurchase of common stock


(135,507
)


Deferred loan costs paid






(57,346
)Exercise of stock options






51,000Cash dividends paid to shareholders


(501,259
)


(509,182
)Net cash used in financing activities


(1,269,772
)


(372,411
)DISCONTINUED OPERATIONS:Operating activities






312,588Investing activities






14,616,120Financing activities






(6,187,504
)Net cash provided by discontinued operations






8,741,204Net (decrease) increase in cash and cash equivalents


(3,561,821
)


2,720,053Cash at beginning of period


8,382,947



5,662,894Cash at end of period

$
4,821,126


$
8,382,947Supplemental disclosure of non-cash financing activities:Issuance of Common Stock under 2000 Stock Award Plan

$
24,792


$
11,189Supplemental schedule of cash flow information:Cash paid during the year for interest

$
1,303,887


$
1,519,425Cash paid during the year for income taxes, net

$



$
  42




---



##### Table of Contents



SERVIDYNE,
    INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS  (Continued)
      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    43




---



##### Table of Contents



SERVIDYNE,
    INC.

    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    For the Years Ended April 30, 2009 and 2008
  1.
    ORGANIZATION
    AND BUSINESS    2.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  (A)
    Principles
    of consolidation and basis of presentation    Accounting for the
    Impairment or Disposal of Long-Lived Assets
  Restatement
    of Previously Issued Consolidated Financial Statements
  Form 10-Q Regulation S-X, Rule 5-03,
  Reclassification
    of Previously Issued Consolidated Financial Statements
    (B)
    Use of
    estimates   44




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##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (C)
    Revenue
    recognition  Revenue Recognition
    81-1, Accounting for Performance of Construction-Type and Certain
    Production-Type Contracts (SOP 81-1). SOP 81-1, and/or SOP 81-1,
   45




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##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      (D)
    Cash
    and cash equivalents and short-term investments    (E)
    Restricted
    cash    (F)
    Real
    estate held for future development or sale    (G)
    Deferred
    loan costs    (H)
    Long-lived
    assets: income-producing properties, capitalized software, and
    property and equipment   46




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##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        
    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;
    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.   47




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    00-3 98-1, Accounting for the Costs of Computer Software Developed or
    Obtained for Internal Use SOP 98-1
    
    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.    (I) 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)
  Goodwill and Other
    Intangible Assets
             49




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          (J)
    Income
    taxes        (K)
    Derivative
    instruments and hedging activities  Accounting for Derivative Instruments and Hedging
    Activities
 50




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (L)
    Discontinued
    operations  Accounting for the
    Impairment or Disposal of Long-Lived Assets
  (M)
    Other
    current assets    2009


2008Inventory

$
654,443


$
359,181Prepaid software consulting


132,731



Prepaid real estate taxes


89,213



156,562Deferred costs


92,210



115,865Prepaid insurance


119,849



79,708Prepaid rent


48,905



52,139Deposits


194,994



42,470Prepaid consulting fees


25,000



25,000Other


302,376



180,379$
1,659,721


$
1,011,304   (N)
    Other
    assets    2009


2008Cash surrender value of life insurance

$
1,323,318


$
1,200,684Deferred executive compensation


733,378



1,032,145Short-term investment


450,000



300,000Straight-line rent


210,901



153,845Notes receivable


9,250



9,500Other


9,047



$
2,735,894


$
2,696,174   (O)
    Other
    income   51




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (P)
    Recent
    accounting pronouncements  non-grandfathered,
  The
    Hierarchy of Generally Accepted Accounting Principles
  Subsequent Events
  FAS 115-2 FAS 124-2, Recognition and Presentation of Other-Than-Temporary
    Impairments FAS 115-2 FAS 124-2). FAS 115-2 FAS 124-2
  Business Combinations Business Combinations
 52




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FSP 142-3, Determining the Useful Life of Intangible Assets (FSP 142-3). FSP 142-3 Goodwill and Other Intangible Assets Business
    Combinations FSP 142-3
  Fair Value Measurements
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities  including an amendment of FASB Statement
    No. 115
  3.
    STOCK
    COMPENSATION       53




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##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Stock
    options
    2009


2008Weighted





WeightedOptions to


Average


Options to


AveragePurchase


Exercise


Purchase


ExerciseShares


Price


Shares


PriceOutstanding at beginning of year


483,536


$
4.45



595,540


$
4.44Granted


10,500



5.24







Forfeited


(11,550
)


4.59



(62,370
)


4.43Expired










(38,084
)


4.42Exercised










(11,550
)


4.42Outstanding at end of year


482,486


$
4.46



483,536


$
4.45Vested at end of year


471,986


$
4.44



483,536


$
4.45       WeightedAverageNumber of


RemainingOutstanding


ContractualExercise Price

Options


Life (Years)$4.42


415,629



3.53$4.59


55,440



5.90$5.19


917



5.13$5.24


10,500



4.12     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      54




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##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Stock
    appreciation rights
    2009


2008Weighted





WeightedAverage





AverageExercise





ExerciseSARs


Price


SARs


PriceOutstanding at beginning of year


411,600


$
4.26



451,500


$
3.86Granted


184,000



4.57



117,600



5.29Exercised














Forfeited


(30,250
)


3.98



(157,500
)


3.91Outstanding at end of year


565,350


$
4.37



411,600


$
4.26Vested at end of year





$







$
       Outstanding


Exercisable


ContractualExercise Price

SARs


SARs


Life (Years)$3.94


182,700



0



7.16$3.79


111,300



0



7.61$4.09


10,500



0



8.02$4.19


10,500



0



8.12$6.19


38,850



0



8.42$5.00


52,500



0



8.99$4.76


136,500



0



9.13$4.00


22,500



0



9.39     2009


2008Expected life (years)


5



7.23Dividend yield


2.59
%


2.75
%Expected stock price volatility


37.25
%


38.14
%Risk-free interest rate


3.45
%


4.13
%Fair value of SARs granted

$
0.91


$
1.16  55




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Shares
    of restricted stock
      2009


2008Non-vested restricted stock at beginning of year


1,785



Granted


5,800



2,625Forfeited


(505
)


(840
)Vested


(1,785
)


Non-vested restricted stock at end of year


5,295



1,785     4.
    RESTRICTED
    CASH    5.
    DISCONTINUED
    OPERATIONS    EITF 87-24, Allocation of Interest to Discontinued Operations
 56




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Real
    estate sales of income-producing properties
      2009


2008REAL ESTATE SEGMENTRental revenues

$



$
1,129,510Rental property operating expenses, including depreciation






812,439Interest expenses and loan prepayment fees






287,547Total operating earnings from discontinued operations






29,524Income tax expense






11,219Total operating earnings from discontinued operations, net of tax






18,305Gain on sale of income-producing properties






3,996,450Income tax expense






1,518,651Gain on sale of income-producing properties, net of tax






2,477,799Earnings from discontinued operations, net of tax

$



$
2,496,104     6.
    CONTRACTS
    IN PROGRESS    2009


2008Costs and earnings in excess of billings:Accumulated costs and earnings

$
2,129,684


$
976,783Amounts billed


1,720,734



701,029$
408,950


$
275,754Billings in excess of costs and earnings:Amounts billed

$
2,574,827


$
4,508,831Accumulated costs and earnings


2,546,612



4,446,272$
28,215


$
62,559  57




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  7.
    INCOME-PRODUCING
    PROPERTIES    EstimatedUseful Lives

2009


2008Land

N/A

$
6,198,061


$
6,574,218Buildings and improvements

7-39 years


17,116,710



18,559,164$
23,314,771


$
25,133,382Less  accumulated depreciation




3,923,396



3,359,973$
19,391,375


$
21,773,409       8.
    PROPERTY
    AND EQUIPMENT    EstimatedUseful Lives

2009


2008Buildings and improvements

3-39 years

$
496,276


$
496,276Equipment

3-10 years


1,661,297



1,407,235Vehicles

3-5 years


296,783



308,808$
2,454,356


$
2,212,319Less  accumulated depreciation




1,656,800



1,400,419$
797,556


$
811,900     9.
    MORTGAGE
    NOTES PAYABLE AND LEASES     58




---



##### Table of Contents



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

Owned


Leaseback2010

$
2,314,000


$
255,0002011


1,777,000



255,0002012


1,405,000



255,0002013


863,000



149,0002014


429,000



Thereafter


1,727,000



Total

$
8,515,000


$
914,000     Owned Income-Producing


LeasebackProperties Mortgage Payments


Center RentalYear Ending April 30,

Principal(1)(2)


Interest


Payments2010

$
381,858


$
1,202,059


$
105,2032011


411,036



1,175,840



105,2032012


438,385



1,148,491



105,2032013


4,305,762



891,405



61,3682014


348,899



793,833



Thereafter


12,716,558



4,364,528



Total

$
18,602,498


$
9,576,156


$
376,977   (1)
    
    On one of the mortgage notes, the lender has an option to call
    the note for early repayment any time after July 1, 2011,
    upon thirteen (13) months prior written notice. The
    balance of this mortgage note payable was approximately
    $7,060,000 as of April 30, 2009. The information presented
    here assumes the call option will not be exercised.(2)
    
    During the fourth quarter of fiscal 2009, the anchor tenant of
    the Companys Newnan office building defaulted on its lease
    obligations. Due to the tenants default, the current
    financial condition, and the fact that the tenant has vacated
    the leased space, the Company does not anticipate that such
    tenant will make any additional lease payments. Consequently,
    the Company has not made payments on the propertys
    mortgage loan beginning in 59




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##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  May 2009 and has offered to return the property to the
    lender. The lender has not yet communicated to the Company how
    it plans to proceed. Exculpatory provisions of the mortgage loan
    generally limit the Companys liability for repayment to
    its interest in the property. This schedule was prepared based
    on the fact that the Newnan mortgage loan was not in default as
    of April 30, 2009. The principal amounts shown above
    include the following amounts for the Newnan mortgage loan:
    $41,602 in 2010; $44,150 in 2011; $46,854 in 2012; $49,724 in
    2013; $52,770 in 2014; and $2,933,859 thereafter. The interest
    amounts shown above include the following amounts for the Newnan
    mortgage loan: $187,639 in 2010; $185,091 in 2011; $182,387 in
    2012; $179,516 in 2013; $176,471 in 2014; and $536,538
    thereafter.        Secured
    letter of credit
    10.
    OTHER
    LONG-TERM DEBT    2009


2008Note payable, net of discount ($150,000 at April 30, 2009),
    bearing interest at the prime rate plus 1.5% (4.75% at
    April 30, 2009); interest only payments due monthly;
    matures December 18, 2011; secured by all general assets of
    The Wheatstone Energy Group.

$
850,000


$
870,000Note 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.


235,000



275,000Note payable bearing interest at 8.25%; interest due monthly on
    the first day of the month commencing on September 1, 2007,
    and principal payments due in full at maturity on July 31,
    2008.






240,875Note 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.


100,000



Total other long-term debt.


1,185,000



1,385,875Less current maturities.


185,000



280,875Total other long-term debt, less current maturities.

$
1,000,000


$
1,105,000  60




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fiscal Year Ending April 30,2010

$
185,0002011


150,0002012


850,0002013


2014


Thereafter


Total

$
1,185,000       11.
    INCOME
    TAXES    Current


Deferred


TotalYear ended April 30, 2009Federal

$



$
(2,432,808
)

$
(2,432,808
)State and local






(134,727
)


(134,727
)$



$
(2,567,535
)

$
(2,567,535
)Year ended April 30, 2008Federal

$
15,907


$
(657,936
)

$
(642,029
)State and local






(157,354
)


(157,354
)$
15,907


$
(815,290
)

$
(799,383
)     2009


2008Computed expected benefit

$
(2,432,695
)

$
(666,375
)State and local income taxes


(6,253
)


(78,397
)Permanent items


(6,638
)


(13,371
)State net operating loss adjustment


(127,775
)


(35,540
)Federal net operating loss adjustment


(28,203
)


Other


34,029



(5,700
)$
(2,567,535
)

$
(799,383
)  61




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2009


2008Deferred income tax assets:Items not currently deductible for tax purposes:Net operating loss carryforwards, federal and state(1)

$
3,088,067


$
2,285,566Valuation allowance


(236,098
)


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


53,981



53,981Gain/loss on disposal of assets


819,170



Capitalized costs


41,822



45,624Bad debt reserves


56,821



74,322Deferred compensation plan expenses


281,754



392,287Compensated absences


46,048



34,820Other accrued expenses


394,951



629,271Other


285,501



126,861Gross deferred income tax assets


4,832,017



3,406,634Deferred income tax liabilities:Income producing properties and property and equipment,
    principally because of differences in depreciation and
    capitalized interest


1,368,778



1,322,436Gain on real estate sales structured as tax-deferred like-kind
    exchanges


5,261,572



6,521,598Other


111,601



83,553Gross deferred income tax liability


6,741,951



7,927,587Net deferred income tax liability

$
1,909,934


$
4,520,953   (1)
    
    The federal NOL carryforwards expire in various years after
    fiscal 2024. The majority of the state NOL carryforwards expire
    between the fiscal years 2024 and 2027.         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
    EARNINGS (LOSS) PER SHARE  Earnings Per Share,
      For the Year Ended April 30, 2009Earnings





Per Share(Loss)


Shares


AmountBasic EPS  loss per share from continuing operations

$
(4,587,450
)


3,716,700


$
(1.23
)Effect of dilutive securities










Diluted EPS  earnings per share

$
(4,587,450
)


3,716,700


$
(1.23
)   For the Year Ended April 30, 2008Earnings





Per Share(Loss)


Shares


AmountBasic EPS  loss per share from continuing operations

$
(1,160,542
)


3,711,659


$
(0.31
)Basic EPS  earnings per share from discontinued
    operations


2,496,104



3,711,659



0.67Effect of dilutive securities










Diluted EPS  earnings per share

$
1,335,562



3,711,659


$
0.36   15.
    OPERATING
    SEGMENTS  ® ®
 64




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          2009


2008Customer 1


N/A



10
%Customer 2


13
%


17
%       Form 10-Q
    65




---



##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2009

BPE


Real Estate


Parent(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















2,319,433Productivity software


3,674,097















3,674,097Total revenues from unaffiliated customers

$
13,192,310


$
3,264,062


$



$



$
16,456,372Intersegment revenue


20,362



576,080







(596,442
)


Total revenues from continuing operations

$
13,212,672


$
3,840,142


$



$
(596,442
)

$
16,456,372(Loss) earnings from continuing operations before income taxes

$
(2,310,134
)

$
(1,476,125
)

$
(3,354,164
)

$
(14,562
)

$
(7,154,985
)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


$
1,233,584


$
873,284


$
(900,290
)

$
1,300,295Depreciation and amortization

$
822,459


$
730,630


$
71,705


$



$
1,624,795Capital expenditures

$
55,306


$
192,932


$
110,860


$



$
359,098   2008

BPE


Real Estate


Parent(1)


Eliminations


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

$
8,550,237














$
8,550,237Lighting products


















Energy management services


2,354,859















2,354,859Productivity software


3,344,132















3,344,132Total revenues from unaffiliated customers

$
14,249,228


$
5,098,498


$



$



$
19,347,726Intersegment revenue






589,465







(589,465
)


Total revenues from continuing operations

$
14,249,228


$
5,687,963


$



$
(589,465
)

$
19,347,726(Loss) earnings from continuing operations before income taxes

$
(1,352,130
)

$
3,164,601


$
(3,733,527
)

$
(38,869
)

$
(1,959,925
)Segment assets

$
15,731,963


$
52,215,621


$
29,220,492


$
(44,852,526
)

$
52,315,550Goodwill

$
5,458,717


$



$



$



$
5,458,717Interest expenses

$
131,349


$
1,272,587


$
1,054,243


$
(1,087,008
)

$
1,371,171Depreciation and amortization

$
716,303


$
732,843


$
57,472


$



$
1,506,618Capital expenditures

$
114,777


$
732,833


$
67,002


$



$
914,612  66




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##### 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. 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.  16.
    ACQUISITIONS  Fiscal
    2009
        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  67




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##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Fiscal Year2009


2008Revenues

$
16,654


$
22,591Net (loss) earnings

$
(4,589
)

$
1,256Net (loss) earnings per share  basic

$
(1.23
)

$
0.34Net (loss) earnings per share  diluted

$
(1.23
)

$
0.34   Fiscal
    2008
    17.
    DISPOSITIONS  Fiscal
    2009
    Fiscal
    2008
       68




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##### Table of Contents



SERVIDYNE,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    18.
    GOODWILL
    AND OTHER INTANGIBLE ASSETS    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


699,852



308,010Customer relationships


404,632



252,216Deferred loan costs


331,488



128,826Non-compete agreements


63,323



29,023Tradename


61,299



3,746Other


45,844



39,149$
5,762,722


$
3,560,833Intangible assets and goodwill, not subject to
    amortization:Trademark

$
708,707Goodwill

$
6,354,002   April 30, 2008Gross Carrying


AccumulatedAmount


AmortizationIntangible assets, subject to amortization:Proprietary BPE software solutions

$
3,403,208


$
1,788,415Acquired computer software


462,555



453,038Real estate lease costs


823,091



208,966Customer relationships


218,000



188,933Deferred loan costs


331,488



94,170Other


28,660



20,062$
5,267,002


$
2,753,584Intangible assets and goodwill, not subject to
    amortization:Trademark

$
708,707Goodwill

$
5,458,717Aggregate amortization expense for all amortizable intangible
    assets:For the year ended April 30, 2009





$
813,464For the year ended April 30, 2008






748,033  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 years ended:2010






660,4402011






520,7832012






373,4842013






250,8442014






163,511Thereafter






232,827$
2,201,889     19.
    COMMITMENTS
    AND CONTINGENCIES    20.
    QUARTERLY
    FINANCIAL INFORMATION (UNAUDITED)  Form 10-Q
  Earnings per Share, Form 10-Q
 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


804



784



819



857Total revenues from continuing operations(2)


3,524



4,218



4,158



4,556Total revenues reclassified to discontinued operations














Gross profit from continuing operations


1,297



1,490



1,532



1,459Gross profit reclassified to discontinued operations














Net loss


(847
)


(906
)


(491
)


(2,343
)(1)Net loss per share  basic


(0.23
)


(0.24
)


(0.13
)


(0.63
)Net loss per share  diluted


(0.23
)


(0.24
)


(0.13
)


(0.63
)   Fiscal Year Ended April 30, 2008First


Second


Third


FourthQuarter


Quarter


Quarter


QuarterBPE revenues

$
4,766


$
3,987


$
3,221


$
2,275Real Estate revenues


2,529



888



895



787Total revenues from continuing operations(2)


7,295



4,875



4,116



3,062Total revenues reclassified to discontinued operations


378



382







Gross profit from continuing operations


3,459



1,609



1,442



1,073Gross profit reclassified to discontinued operations


57



63







Net earnings (loss)


1,558



(345
)


582



(459
)Net earnings (loss) per share  basic


0.42



(0.09
)


0.16



(0.13
)Net earnings (loss) per share  diluted


0.42



(0.09
)


0.16



(0.13
)   (1)
    
    Included in 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 income-producing property in
    Newnan, Georgia. See Note 7 to the consolidated financial
    statements.(2)
    
    Quarterly revenues shown above vary from quarterly revenues
    previously reported in the first and second quarters of fiscal
    2009 and in each quarter of fiscal 2008, because the Company has
    revised its presentation of interest income and certain
    components of other income. For further information, see
    Restatement of Previously Issued Consolidated Financial
    Statements in Note 2 to the consolidated
    financial statements. 71




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##### Table of Contents



SCHEDULE III  REAL
    ESTATE AND ACCUMULATED DEPRECIATION
    April 30, 2009
  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


4,340,272



660,000



4,338,102



792,149Office Building  Newnan, GA


3,168,959



329,917



1,615,594



26,625Shopping Center  Smyrna, TN


4,032,887



1,300,140



3,626,595



39,762Shopping Center  Jacksonville, FL


7,060,380



3,908,004



5,170,420



1,285,09918,602,498



6,198,061



14,752,861



2,363,849REAL 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$
18,602,498


$
6,533,547


$
14,752,861


$
2,864,828     Real Estate


Accumulated Depreciation2009


2008


2009


2008BALANCE AT BEGINNING OF YEAR

$
25,986,491


$
41,347,949


$
3,359,973


$
8,262,070ADDITIONS DURING YEARReal estate


188,729



742,139







Depreciation from continuing operations










563,423



562,720Depreciation from discontinued operations














Transfers














188,729



742,139



563,423



562,720DEDUCTIONS DURING YEARAccumulated depreciation on properties sold or transferred














5,464,817
(5)Loss on impairment of income- producing property


2,007,340
(4)










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






16,103,597
(5)






2,007,340



16,103,597







5,464,817BALANCE AT CLOSE OF YEAR

$
24,167,880


$
25,986,491


$
3,923,396


$
3,359,973  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(1)


Depreciation


Construction


Acquired


is Computed$



$
222,364


$



$
222,364


$
193,388



1995







7 years660,000



5,130,251







5,790,251



1,674,654



1974,1997
(2)


1997



39 years329,917



1,642,219







1,972,136



211,551



1998
(3)


2007



39 years1,300,140



3,666,357







4,966,497



289,444



1983,2006
(3)


2006



39 years3,908,004



6,455,519







10,363,523



1,554,359



1985
(3)


1999



39 years6,198,061



17,116,710







23,314,771



3,923,396505,678







16,644



522,322











1987



330,787











330,787











1993



836,465







16,644



853,109



$
7,034,526


$
17,116,710


$
16,644


$
24,167,880


$
3,923,396       (1)
    
    The aggregated cost for land and building and improvements for
    federal income tax purposes at April 30, 2009, is
    $16,377,445.(2)
    
    Developed by others in 1974, redeveloped by the Company in 1997.(3)
    
    Developed by others.(4)
    
    Impairment loss on the Companys owned office building in
    Newnan, Georgia.(5)
    
    Primarily represents the sales of the office park in Marietta,
    Georgia, the shopping centers in Orange Park, Florida, and
    Columbus, Georgia, and a portion of the undeveloped land in
    Oakwood, Georgia. 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, 2009 and 2008


39Consolidated Statements of Operations for the Years Ended
    April 30, 2009 and April 30, 2008


40Consolidated Statements of Shareholders Equity for the
    Years Ended April 30, 2009 and April 30, 2008


41Consolidated Statements of Cash Flows for the Years Ended
    April 30, 2009 and April 30, 2008


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 September 25, 2008 (SEC File
    No. 0-10146).(2)
    This exhibit is incorporated by reference to the Companys
    Form 8-K
    filed November 30, 2007 (SEC File
    No. 0-10146).(3)
    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).(4)
    This exhibit is incorporated by reference to the Companys
    Form S-8
    filed September 29, 2000 (SEC File
    No. 0-10146).(5)
    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).(6)
    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).(7)
    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, 2009

By: /s/  Alan
    R. AbramsAlan
    R. Abrams
    Chief Executive Officer     Dated: July 28, 2009

/s/  Alan
    R. AbramsAlan
    R. Abrams
    Chairman of the Board of Directors,
    Chief Executive OfficerDated: July 28, 2009

/s/  J.
    Andrew AbramsJ.
    Andrew Abrams
    DirectorDated: July 28, 2009

/s/  Samuel
    E. AllenSamuel
    E. Allen
    DirectorDated: July 28, 2009

/s/  Gilbert
    L. DanielsonGilbert
    L. Danielson
    DirectorDated: July 28, 2009

/s/  Herschel
    KahnHerschel
    Kahn
    DirectorDated: July 28, 2009

/s/  Robert
    T. McWhinney, Jr.Robert
    T. McWhinney, Jr.
    DirectorDated: July 28, 2009

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