MAYS J W INC - Quarter Report: 2020 April (Form 10-Q)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended April 30, 2020
or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from __________ to __________

Commission File Number            1-3647           

J. W. Mays, Inc.
(Exact Name of Registrant as Specified in its Charter)

New York		11-1059070
State or Other Jurisdiction of		I.R.S. Employer Identification No.
Incorporation or Organization
9 Bond Street, Brooklyn, New York		11201
Address of Principal Executive Offices		Zip Code

           (718) 624-7400           
Registrant’s Telephone Number, Including Area Code

                                 Not Applicable                                 
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒   No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒   No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐   No ☒

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐   No ☐

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1 par value	MAYS	NASDAQ

APPLICABLE ONLY TO CORPORATE ISSUERS:

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

Class		Outstanding at June 4, 2020
Common Stock, $1 par value		2,015,780 shares

This report contains 30 pages.

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J. W. MAYS, INC.

INDEX

		Page No.
Part I - Financial Information:
Item 1. Financial Statements
Condensed Consolidated Balance Sheets – April 30, 2020 (unaudited) and July 31, 2019		3
Condensed Consolidated Statements of Operations – Three and nine months ended April 30, 2020 and 2019 (unaudited)		4
Condensed Consolidated Statements of Changes in Shareholders’ Equity – Three and nine months ended April 30, 2020 and 2019 (unaudited)		5
Condensed Consolidated Statements of Cash Flows – Nine months ended April 30, 2020 and 2019 (unaudited)		6
Notes to Condensed Consolidated Financial Statements		7 - 19
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.		20 - 25
Item 3. Quantitative and Qualitative Disclosures About Market Risk		25
Item 4. Controls and Procedures		25
Part II - Other Information:
Item 1. Legal Proceedings		26
Item 1A. Risk Factors		26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		26
Item 3. Defaults Upon Senior Securities		26
Item 4. Mine Safety Disclosures		26
Item 5. Other Information		26
Item 6. Exhibits and Reports on Form 8-K		26
Signatures		27
Exhibit 31 Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.1 - Chief Executive Officer		28
31.2 - Chief Financial Officer		29
Exhibit 32 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
18 U.S.C. Section 1350		30

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Part I - Financial Information

Item 1 - Financial Statements

J. W. MAYS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

		April 30				July 31
ASSETS		2020				2019
		(Unaudited)				(Audited)
Property and Equipment - Net		$	47,144,223			$	53,129,303
Current Assets:
Cash and cash equivalents			6,126,989				4,117,647
Receivables - Net			534,856				402,154
Real estate taxes refundable			101,735				–
Income taxes refundable			–				9,683
Restricted cash			292,033				181,193
Prepaid expenses			1,077,759				2,159,701
Total current assets			8,133,372				6,870,378
Other Assets:
Deferred charges			3,776,403				3,729,818
Accumulated amortization			(1,366,996	)			(1,153,996	)
Net			2,409,407				2,575,822
Operating lease right-of-use assets			37,698,819				–
Restricted cash			850,949				964,884
Unbilled receivables			1,488,550				1,668,461
Marketable securities			3,487,381				3,580,227
Total other assets			45,935,106				8,789,394
TOTAL ASSETS		$	101,212,701			$	68,789,075
LIABILITIES AND SHAREHOLDERS' EQUITY
Long-Term Liabilities:
Mortgages payable		$	7,762,830			$	–
Note payable			511,931				–
Security deposits payable			766,506				690,422
Payroll and other accrued liabilities			85,875				448,939
Operating lease liabilities			28,166,873				–
Deferred income taxes			4,898,000				5,096,000
Total long-term liabilities			42,192,015				6,235,361
Current Liabilities:
Accounts payable			162,100				30,964
Income taxes payable			26,973				–
Payroll and other accrued liabilities			2,181,288				2,426,535
Other taxes payable			8,400				8,847
Operating lease liabilities			1,159,492				–
Current portion of mortgages payable			1,134,852				5,287,162
Current portion of note payable			210,795				–
Current portion of security deposits payable			42,533				192,193
Total current liabilities			4,926,433				7,945,701
TOTAL LIABILITIES			47,118,448				14,181,062
Shareholders' Equity:
Common stock, par value $1 each share (shares - 5,000,000 authorized; 2,178,297 issued)			2,178,297				2,178,297
Additional paid in capital			3,346,245				3,346,245
Retained earnings			49,857,563				50,371,323
			55,382,105				55,895,865
Common stock held in treasury, at cost - 162,517 shares at April 30, 2020 and at July 31, 2019			(1,287,852	)			(1,287,852	)
Total shareholders' equity			54,094,253				54,608,013
Contingencies (Note 13)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	101,212,701			$	68,789,075

See Notes to Condensed Consolidated Financial Statements.

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J.W. MAYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

		Three Months Ended								Nine Months Ended
		April 30				April 30				April 30				April 30
		2020				2019				2020				2019
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
Revenues
Rental income		$	5,128,574			$	5,267,237			$	15,203,549			$	15,705,108
Recovery of real estate taxes			–				8,315				–				53,341
Total revenues			5,128,574				5,275,552				15,203,549				15,758,449
Expenses
Real estate operating expenses			3,443,130				3,020,188				10,206,355				9,113,794
Administrative and general expenses			1,771,233				1,135,750				4,297,879				4,184,557
Depreciation			410,610				474,761				1,192,997				1,414,045
(Gain) loss on disposition of property and equipment			(13,129	)			–				40,992				–
Total expenses			5,611,844				4,630,699				15,738,223				14,712,396
Income (loss) from operations before investment income, interest expense and income taxes			(483,270	)			644,853				(534,674	)			1,046,053
Investment income and interest expense:
Investment income (loss)			(5,327	)			27,377				135,591				184,488
Change in fair value of marketable securities			(268,649	)			285,426				(205,399	)			143,209
Interest expense			(52,777	)			(31,721	)			(107,278	)			(121,049	)
			(326,753	)			281,082				(177,086	)			206,648
Income (loss) from operations before income taxes			(810,023	)			925,935				(711,760	)			1,252,701
Income taxes provided (benefit)			(225,000	)			270,000				(198,000	)			382,000
Net income (loss)		$	(585,023	)		$	655,935			$	(513,760	)		$	870,701
Income (loss) per common share		$	(.29	)		$	.32			$	(.25	)		$	.43
Dividends per share		$	–			$	–			$	–			$	–
Average common shares outstanding			2,015,780				2,015,780				2,015,780				2,015,780

See Notes to Condensed Consolidated Financial Statements.

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J.W. MAYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)

		Common Stock			Additional Paid In Capital			Unrealized Gain on Marketable Securities				Retained Earnings				Common Stock Held in Treasury				Total
Three Months Ended April 30, 2020
Balance at January 31, 2020		$	2,178,297		$	3,346,245		$	–			$	50,442,586			$	(1,287,852	)		$	54,679,276
Net loss, three months ended April 30, 2020			–			–			–				(585,023	)			–				(585,023	)
Balance at April 30, 2020		$	2,178,297		$	3,346,245		$	–			$	49,857,563			$	(1,287,852	)		$	54,094,253
Three Months Ended April 30, 2019
Balance at January 31, 2019		$	2,178,297		$	3,346,245		$	–			$	49,071,288			$	(1,287,852	)		$	53,307,978
Net income, three months ended April 30, 2019			–			–			–				655,935				–				655,935
Balance at April 30, 2019		$	2,178,297		$	3,346,245		$	–			$	49,727,223			$	(1,287,852	)		$	53,963,913
		Common Stock			Additional Paid In Capital			Unrealized Gain on Marketable Securities				Retained Earnings				Common Stock Held in Treasury				Total
Nine Months Ended April 30, 2020
Balance at July 31, 2019		$	2,178,297		$	3,346,245		$	–			$	50,371,323			$	(1,287,852	)		$	54,608,013
Net loss, nine months ended April 30, 2020			–			–			–				(513,760	)			–				(513,760	)
Balance at April 30, 2020		$	2,178,297		$	3,346,245		$	–			$	49,857,563			$	(1,287,852	)		$	54,094,253
Nine Months Ended April 30, 2019
Balance at July 31, 2018		$	2,178,297		$	3,346,245		$	487,136			$	48,369,386			$	(1,287,852	)		$	53,093,212
Reclassification of unrealized gains on marketable securities to retained earnings			–			–			(487,136	)			487,136				–				–
Net income, nine months ended April 30, 2019			–			–			–				870,701				–				870,701
Balance at April 30, 2019		$	2,178,297		$	3,346,245		$	–			$	49,727,223			$	(1,287,852	)		$	53,963,913

See Notes to Condensed Consolidated Financial Statements

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J. W. MAYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended April 30
	2020				2019
	(Unaudited)				(Unaudited)
Cash Flows From Operating Activities:
Net income (loss)	$	(513,760	)		$	870,701
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Bad debt expense		596,292				3,328
Depreciation		1,192,997				1,414,045
Loss on disposition of property and equipment		40,992				–
Amortization of deferred charges		213,000				223,690
Operating lease expense in excess of cash payments		868,975				–
Deferred finance costs included in interest expense		22,463				17,156
Net realized and unrealized (gain) loss on marketable securities		176,853				(189,625	)
Other assets - unbilled receivables		179,911				(82,202	)
- deferred charges		(46,585	)			(522,292	)
Deferred income taxes		(198,000	)			382,000
Changes in:
Receivables		(728,994	)			102,479
Real estate taxes refundable		(101,735	)			–
Income taxes refundable		9,683				1,109
Prepaid expenses		1,081,942				984,451
Accounts payable		131,136				(37,905	)
Payroll and other accrued liabilities		340,594				232,203
Income taxes payable		26,973				–
Other taxes payable		(447	)			(1,286	)
Cash provided by operating activities		3,292,290				3,397,852
Cash Flows From Investing Activities:
Acquisition of property and equipment		(5,439,243	)			(3,064,228	)
Marketable securities:
Receipts from sales		621,161				219,744
Payments for purchases		(705,168	)			(316,007	)
Cash (used) by investing activities		(5,523,250	)			(3,160,491	)
Cash Flows From Financing Activities:
Borrowing - Mortgage debt		4,866,806				–
Increase (decrease) - security deposits payable		(73,576	)			9,453
Mortgage and other debt payments		(323,823	)			(162,172	)
Mortgage financing costs paid		(232,200	)			–
Cash provided (used) by financing activities		4,237,207				(152,719	)
Increase in cash, cash equivalents and restricted cash		2,006,247				84,642
Cash, cash equivalents and restricted cash at beginning of period		5,263,724				6,879,623
Cash, cash equivalents and restricted cash at end of period	$	7,269,971			$	6,964,265

See Notes to Condensed Consolidated Financial Statements.

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J. W. MAYS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.	The Impact of COVID-19 on our Results and Operations:
	In late 2019, an outbreak of COVID-19 emerged and by March 11, 2020 was declared a global pandemic by The World Health Organization. Throughout the United States and locally, governments and municipalities instituted measures in an effort to control the spread of COVID-19, including quarantines, shelter-in-place orders, school closings, travel restrictions and the closure of non-essential businesses. By the end of March and into April 2020, the economic impacts became significant. In March and April 2020, we experienced an increase in late payments due to the impact of COVID-19 and the related reductions in economic activity from government mandated business disruptions and shelter-in-place orders. The effects of COVID-19 on our tenants have been reflected in an increase in our allowance for credit losses for accounts receivable. March and April rent collections and increased past due activity may not be indicative of unpaid rents in any future period. In addition, we experienced volatility in the valuation of our equity investments. Looking ahead, the full impact of COVID-19 on our business is unknown and highly unpredictable. Many of our tenants will suffer reductions in revenue and, depending upon the duration of quarantines and the corresponding economic slowdown, some of our tenants have or will seek rent deferrals or become unable to pay their rent. While we believe our tenants are required to pay rent under their leases, we are considering temporary rent relief on a case-by-case basis. Our past results may not be indicative of our future performance and historical trends in revenues, income from operations, net income, earnings per share, cash provided by operating activities, among others, may differ materially. For example, to the extent the pandemic continues to disrupt economic activity nationally and in New York, NY, like other businesses, it could adversely affect our business operations and financial results through prolonged decreases in revenue, credit deterioration of our tenants, depressed economic activity, or declines in capital markets. In addition, many of our expenses are less variable in nature and may not correlate to changes in revenues. The extent of the impact will depend on a number of factors, including the duration and severity of the pandemic; advances in testing, treatment and prevention; and the macroeconomic impact of government measures to contain the spread of the virus and related government stimulus measures.
	Accounting Records and Use of Estimates:
	The accounting records are maintained in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of the Company’s financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, the disclosure of contingent assets and liabilities, incremental borrowing rates and recognition of renewal options for operating lease right-of-use assets and liabilities, and the reported amounts of revenues and expenses during the reporting period. The estimates that we make include allowance for doubtful accounts, depreciation, income tax assets and liabilities, fair value of marketable securities and revenue recognition. Estimates are based on historical experience where applicable or other assumptions that management believes are reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results may differ from those estimates under different assumptions or conditions. The interim financial statements are prepared pursuant to the requirements for reporting on Form 10-Q. The July 31, 2019 condensed consolidated balance sheet was derived from audited financial statements but does not include all disclosures required by GAAP. The interim financial statements and notes thereto should be read in conjunction with the financial statements and notes included in the Company's latest Form 10-K Annual Report for the fiscal year ended July 31, 2019. In the opinion of management, the interim financial statements reflect all adjustments of a normal recurring nature necessary for a fair statement of the results for interim periods. The results of operations for the current period are not necessarily indicative of the results for the entire fiscal year ending July 31, 2020. As of April 30, 2020, the impact of COVID-19 continues to unfold. As a result, many of our estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and as additional information becomes available, our estimates may change materially in future periods.
	Accounts Receivable
	Generally, rent is due from tenants at the beginning of the month in accordance with terms of each lease. Based upon its periodic assessment of the quality of the receivables, management uses its historical knowledge of the tenants and industry experience to determine whether a reserve or write-off is required. The Company uses specific identification to write-off receivables to bad debt expense in the period when issues of collectibility become known. Collectibility issues include late rent payments, circumstances when a tenant indicates their intention to vacate the property without paying, or when tenant litigation or bankruptcy proceedings are not expected to result in full payment. Management also assesses collectibility by reviewing accounts receivable on an aggregate basis where similar characteristics exist. In determining the amount of the allowance for credit losses, the Company considers historical collectibility based on past due status and a tenant’s payment history. We also consider current market conditions and reasonable and supportable forecasts of future economic conditions. Our assessment as of April 30, 2020 considered business and market disruptions caused by COVID-19. The continued volatility in market conditions and evolving shifts in credit trends are difficult to predict causing variability and volatility that may have a material impact on our allowance for uncollectible accounts receivables in future periods. As of July 31, 2019, management determined no allowance for uncollected receivables was considered necessary. As of April 30, 2020, and primarily as a result of the effects of COVID-19, the Company recorded the following: 1) an allowance for expected uncollectible receivables in the amount of $420,000 as an offset to receivables 2) unbilled receivables were reduced by approximately $136,000 for uncollectible amounts. For the three and nine months ended April 30, 2020 and 2019, bad debt expense included in general and administrative expense on the Consolidated Statements of Operations was $596,292 and $3,328, respectively.

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	Property and Equipment Property and equipment are stated at cost. Depreciation is calculated using the straight-line method and the declining-balance method. Amortization of improvements to leased property is calculated over the life of the lease. Lives used to determine depreciation and amortization are generally as follows:
	Buildings and improvements		18-40 years
	Improvements to leased property		3-10 years
	Fixtures and equipment		7-12 years
	Other		3-5 years
	Maintenance, repairs, renewals and improvements of a non-permanent nature are charged to expense when incurred. Expenditures for additions and major renewals or improvements are capitalized along with the associated interest cost during construction. The cost of assets sold or retired, and the accumulated depreciation or amortization thereon are eliminated from the respective accounts in the year of disposal, and the resulting gain or loss is credited or charged to income. Capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset’s estimated useful life. The Company reviews long-lived assets for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered. At April 30, 2020 and July 31, 2019, there were no impairments of its property and equipment. Deferred Charges Deferred charges consist principally of costs incurred in connection with the leasing of property to tenants. Such costs are amortized over the related lease periods, ranging from 1 to 21 years, using the straight-line method. If a lease is terminated early, such costs are expensed. Leases - Lessor Revenue Property held for leasing in the Company’s real estate rental operations is disclosed in Note 5. Rent is recognized from tenants under executed leases no later than on an established date or on an earlier date if the tenant should commence conducting business. Unbilled receivables represent the excess of scheduled rental income recognized on a straight-line basis over rental income as it becomes receivable according to the provisions of the lease. The effect of lease modifications that result in rent relief or other credits to tenants, including any retroactive effects relating to prior periods, is recognized in the period when the lease modification is signed. At the time of the lease modification, we assess the realizability of any accrued but unpaid rent and amounts that had been recognized as revenue in prior periods. As lessor, we have elected to combine the lease components (base rent), non-lease components (reimbursements of common area maintenance expenses) and reimbursements of real estate taxes and account for the components as a single lease component in accordance with ASC 842. If the amounts are not determined to be realizable, the accrued but unpaid rent is written off. Accounts receivable are recognized in accordance with lease agreements at its net realizable value. Rental payments received in advance are deferred until earned. Leases - Lessee The Company determines if an arrangement is a lease at inception. With the adoption of ASC 842, operating leases are included in operating lease right-of-use assets, current portion of operating lease liabilities, and long-term operating lease liabilities on the Company’s balance sheet. Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

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Taxes

The computation of the annual expected effective tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected operating income for the year and future periods, projections of the proportion of income (or loss), and permanent and temporary differences. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is acquired, or as additional information is obtained. The evolving facts and circumstances surrounding COVID-19 could result in the application of different provisions of tax laws and cause our estimated annual effective tax rate to change significantly through the remainder of the year. To the extent the estimated annual effective tax rate changes during a quarter, the effect of the change on prior quarters is included in tax expense for the current quarter.

The Company had a federal net operating loss carryforward approximating $4,002,346 as of July 31, 2019 available to offset future taxable income. As of July 31, 2019, the Company had unused state and city net operating loss carryforwards of approximately $10,170,071 for state and $8,274,000 for city, available to offset future state and city taxable income. The net operating loss carryforwards will begin to expire, if not used, in 2035.

New York State and New York City taxes are calculated using the higher of taxes based on income or the respective capital- based franchise taxes. Beginning with the Company’s tax year ended July 31, 2016, changes in the law required the state capital-based tax will be phased out over a 7-year period. New York City taxes will be based on capital for the foreseeable future. Capital-based franchise taxes are recorded to administrative and general expense. State tax amounts in excess of the capital-based franchise taxes are recorded to income tax expenses. Due to both the application of the capital-based tax and due to the possible absence of city taxable income, the Company does not record city deferred taxes.

Reclassification:

The condensed consolidated financial statements for prior years reflect certain reclassifications to conform with classifications adopted in the nine months ended April 30, 2020. These reclassifications have no effect on net income or loss as previously reported

Recently adopted accounting standards:

In January 2016, the FASB issued ASU No. 2016-01 "Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." ASU 2016-01 amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments, including the requirement to measure certain equity investments at fair value with changes in fair value recognized in net income. ASU No. 2016-01 is effective for interim and annual periods beginning after December 15, 2017. We adopted this standard effective August 1, 2018 and recorded a cumulative effect adjustment to increase opening retained earnings at August 1, 2018 by $487,136 as required for equity investments recorded at fair value, formerly available-for-sale securities.

In November 2016, the FASB issued ASU 2016-18, “Restricted Cash”. ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Restricted cash and restricted cash equivalents will be included with cash and cash equivalents when reconciling the beginning of period and end of period balances on the statement of cash flows upon adoption of this standard. ASU 2016-18 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017. We adopted this standard effective August 1, 2018 with retrospective application to our consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, “Leases.” ASU 2016-02 is intended to increase transparency and comparability among organizations in accounting for leasing arrangements. This guidance establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases.

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In July 2018, the FASB issued ASU No. 2018-10, “Codification Improvements to Topic 842”, which provides amendments and clarification to ASU 2016-12 based on the FASB’s interaction with stakeholders. In July 2018, the FASB issued ASU No. 2018-11 “Leases (Topic 842): Targeted Improvements”, which amends Leases (Topic 842) to (i) add an optional transition method that would permit entities to apply the new requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the year of adoption, and (ii) provide a practical expedient for lessors regarding the separation of the lease and non-lease components of a contract. In December 2018, the FASB issued ASU No. 2018-20, “Leases (Topic 842) Narrow-Scope Improvement for Lessors,” which clarifies how to apply the leases standard when accounting for sales taxes and other similar taxes collected from lessees, certain lessor costs, and recognition of variable payments for contracts with lease and non-lease components. In March 2019, the FASB issued ASU 2019-01, “Leases (Topic 842) Codification Improvements”, which provides amendments for issues brought to the Board’s attention through its interactions with stakeholders. The issues identified are as follows. 1. Determining the fair value of the underlying asset by lessors that are not manufacturers or dealers, 2. Presentation on the statement of cash flows-sales-type and direct financing leases, 3. Transition disclosures related to Topic 250, Accounting Changes and Error Corrections. These standards are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.

The new standards were adopted by the Company for the fiscal year beginning August 1, 2019. Upon adoption of Topic 842, the Company elected the following practical expedients:

1.	The Company applied the optional transition method of recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the initial period of adoption. Upon adoption on August 1, 2019, the Company did not have an adjustment to opening retained earnings.

2.	As lessee and lessor, the Company has elected not to reassess lease classifications and all leases will continue to be classified as operating leases under the new standard.

As a result of the adoption of the new lease accounting guidance, the Company recognized on August 1, 2019:

●	Operating lease right-of-use assets of $27.1 million.
●	Operating lease liabilities of approximately $17.9 million, based on the net present value of remaining minimum rental payments, discounted using the Company’s incremental borrowing rate of 3.88%.
●	The initial recording of operating lease right-of-use assets of $27.1 million includes adjustments of approximately $10.2 million primarily relating to building and improvements, net of accumulated depreciation, required pursuant to a ground lease with an affiliate, principally owned by a director of the Company (“landlord”). Upon lease termination in 2029, the building and all improvements will be turned over to the landlord as property owner.
●	The initial operating lease liability of $17.9 million includes an adjustment of remaining accrued rent of approximately $.95 million.

The Company’s lessor accounting remains similar under Topic 842 but updated to align with certain changes to the lessee model and the new revenue recognition standard (ASU 2014-09). Upon adoption of the lease standards on August 1, 2019, changes in accounting for the Company’s lease revenue as lessor were not significant.

Recently issued accounting standards:

In April 2020, the FASB issued a Staff Q&A on accounting for leases during the COVID-19 pandemic, focused on the application of lease guidance in ASC Topic 842, Leases (“ASC 842”). The Q&A states that it would be acceptable to make a policy election regarding rent concessions resulting from COVID-19, which would not require entities to account for these rent concessions as lease modifications under certain conditions. Entities making the election will continue to recognize rental revenue on a straight-line basis for qualifying concessions. Rent abatements would be recognized as reductions to revenue during the period in which they were granted. Rent deferrals would result in an increase to accounts receivable during the deferral period with no impact on rental revenue recognition. We are currently evaluating options related to this policy election.

2.	Income Per Share of Common Stock:

Income per share has been computed by dividing the net income for the periods by the weighted average number of shares of common stock outstanding during the periods, adjusted for the purchase of treasury stock. Shares used in computing income per share were 2,015,780 for the nine months ended April 30, 2020 and April 30, 2019.

3.	Marketable Securities:

The Company’s marketable securities consist of investments in equity securities. Dividends and interest income are accrued as earned. Realized gains and losses are determined on a specific identification basis. The Company reviews marketable securities for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered. The changes in the fair value of these securities are recognized in current period earnings in accordance with ASC 825.

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The Company follows GAAP which establishes a fair value hierarchy that prioritizes the valuation techniques and creates the following three broad levels, with Level 1 valuation being the highest priority:

Level 1 valuation inputs are quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date (e.g., equity securities traded on the New York Stock Exchange).

Level 2 valuation inputs are from other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted market prices of similar assets or liabilities in active markets, or quoted market prices for identical or similar assets or liabilities in markets that are not active).

Level 3 valuation inputs are unobservable (e.g., an entity’s own data) and should be used to measure fair value to the extent that observable inputs are not available.

Following is a description of the valuation methodologies used for assets measured at fair value on a recurring basis. There have been no changes in the methodologies used at April 30, 2020 and July 31, 2019.

Equity securities are valued at the closing price reported on the active market on which the individual securities are traded that the Company has access to.

Mutual funds are valued at the daily closing price as reported by the fund. Mutual funds held by the Company are open-end mutual funds that are registered with the Securities and Exchange Commission. These funds are required to publish their daily net asset value (“NAV”) and to transact at that price. The mutual funds held by the Company are deemed to be actively traded.

In accordance with the provisions of Fair Value Measurements, the following are the Company's financial assets measured on a recurring basis presented at fair value.

Fair value measurements at reporting date

		Total												Total
		April 30,												July 31,
Description		2020			Level 1			Level 2			Level 3			2019			Level 1			Level 2			Level 3
Assets:
Marketable securities		$	3,487,381		$	3,487,381		$	–		$	–		$	3,580,227		$	3,580,227		$	–		$	–

As of April 30, 2020 and July 31, 2019, the Company's marketable securities were classified as follows:

		April 30, 2020												July 31, 2019
					Gross			Gross									Gross			Gross
					Unrealized			Unrealized			Fair						Unrealized			Unrealized			Fair
		Cost			Gains			Losses			Value			Cost			Gains			Losses			Value
Noncurrent:
Mutual funds		$	1,076,183		$	155,070		$	–		$	1,231,253		$	845,306		$	264,425		$	–		$	1,109,731
Equity securities			1,537,832			730,165			11,869			2,256,128			1,656,156			814,340			–			2,470,496
		$	2,614,015		$	885,235		$	11,869		$	3,487,381		$	2,501,462		$	1,078,765		$	–		$	3,580,227

Investment income consists of the following:

		Three Months Ended							Nine Months Ended
		April 30							April 30
		2020				2019			2020			2019
Gain (loss) on sale of marketable securities		$	(18,435	)		$	–		$	28,546		$	46,415
Interest income			1,270				15,025			14,320			42,466
Dividend income			11,838				12,352			92,725			95,607
Total		$	(5,327	)		$	27,377		$	135,591		$	184,488

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4.	Financial Instruments and Credit Risk Concentrations:

Financial instruments that are potentially subject to concentrations of credit risk consist principally of marketable securities, cash and cash equivalents and receivables. Marketable securities and cash and cash equivalents are placed with multiple financial institutions and multiple instruments to minimize risk. No assurance can be made that such financial institutions and instruments will minimize all such risk.

The Company derives rental income from approximately fifty tenants, of which one tenant accounted for 16.45%, another tenant accounted for 14.49% and a third tenant accounted for 12.26% of rental income during the nine months ended April 30, 2020. The nine months ended April 30, 2019 had one tenant account for 18.22%, another tenant account for 14.40% and a third tenant account for 11.81% of rental income. No other tenant accounted for more than 10% of rental income during the same periods.

As of April 30, 2020, two tenants accounted for approximately 41.9% of receivables and three tenants accounted for 48.14% of unbilled receivables. As of July 31, 2019, four tenants accounted for 68.8% of receivables and four tenants accounted for 68.44% of unbilled receivables.

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			April 30				July 31
			2020				2019
	Land		$	6,067,805			$	6,067,805
	Buildings held for leasing
	Buildings and improvements			69,509,426				86,461,353
	Improvements to leased property			–				1,478,012
	Construction in progress			3,787,801				2,325,940
				73,297,227				90,265,305
	Accumulated depreciation			(32,344,996	)			(43,310,270	)
	Buildings - net			40,952,231				46,955,035
	Fixtures and equipment and other:
	Fixtures and equipment			144,545				144,545
	Other fixed assets			175,139				164,066
				319,684				308,611
	Accumulated depreciation			(195,497	)			(202,148	)
	Fixtures and equipment and other - net			124,187				106,463
	Property and equipment - net		$	47,144,223			$	53,129,303
	Construction in progress includes:
			April 30				July 31
			2020				2019
	Building improvements at 9 Bond Street in Brooklyn, NY		$	–			$	29,132
	Building improvements at 25 Elm Place in Brooklyn, NY			426,533				426,533
	Improvements to leased property			–				303,975
	Building improvements at Fishkill, NY building			3,361,268				1,566,300
			$	3,787,801			$	2,325,940

	Leased property included in the Company’s real estate rental operations consists of the following:
			Estimated Useful Life		April 30, 2020
	Operating lease right-of-use-assets		Lease Terms – 7 to 54 years		$	37,698,819

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								April 30, 2020							July 31, 2019
			Current
			Annual			Final		Due			Due				Due				Due
			Interest			Payment		Within			After				Within				After
			Rate			Date		One Year			One Year				One Year				One Year
	(1) Bond St. building,		4.375	%		12/1/2024		$	1,001,268		$	4,074,909			$	5,298,610			$	–
	(2) Fishkill building		3.980	%		4/1/2025			133,584			3,866,416
	Deferred financing costs								–			(178,495	)			(11,448	)			–
	Net							$	1,134,852		$	7,762,830			$	5,287,162			$	–

			Three Months Ended						Nine Months Ended
			April 30						April 30
			2020			2019			2020			2019
	Base rent - fixed		$	4,481,258		$	4,787,888		$	13,533,287		$	14,263,378
	Reimbursements of common area costs			291,889			193,661			605,324			557,734
	Non-lease components (real estate taxes)			355,427			285,688			1,064,938			883,996
	Rental income		$	5,128,574		$	5,267,237		$	15,203,549		$	15,705,108

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			Under ASC 842
			As of April 30, 2020
			Company
			Owned			Leased
	Fiscal Year		Property			Property			Total
	For the remainder of 2020		$	2,312,566		$	1,491,489		$	3,804,055
	2021			9,720,596			4,902,022			14,622,618
	2022			8,056,526			3,916,701			11,973,227
	2023			7,231,670			3,148,299			10,379,969
	2024			5,420,577			2,864,682			8,285,259
	2025			4,255,120			2,286,979			6,542,099
	After 2025			23,408,985			9,682,265			33,091,250
	Total		$	60,406,040		$	28,292,437		$	88,698,477
			Under ASC 840
			As of July 31, 2019
			Company
			Owned			Leased
	Fiscal Year		Property			Property			Total
	2020		$	10,038,712		$	6,120,283		$	16,158,995
	2021			9,521,380			5,009,044			14,530,424
	2022			7,878,165			4,039,069			11,917,234
	2023			7,399,288			3,270,666			10,669,954
	2024			6,483,940			2,987,050			9,470,990
	After 2024			52,632,826			14,842,540			67,475,366
	Total		$	93,954,311		$	36,268,652		$	130,222,963

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			Operating Lease			Operating Lease			Monthly Rent
			Right-of-Use-Asset				Liability		Expense
	Upon initial adoption, August 1, 2019		$	27,104,937		$	16,728,284		$	235,350
	After various lease extensions through April 30, 2020		$	37,698,819		$	29,326,365		$	277,570

			Three Months Ended				Nine Months Ended
			April 30, 2020				April 30, 2020
	Sublease income		$	1,880,508			$	5,402,369
	Operating lease cost			(798,132	)			(2,308,189	)
	Excess of sublease income over lease cost		$	1,082,376			$	3,094,180
	The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities as of April 30, 2020:

	April 30, 2020		$	1,989,126
	April 30, 2021			2,112,289
	April 30, 2022			2,128,723
	April 30, 2023			2,145,753
	April 30, 2024			2,163,029
	Thereafter			28,095,443
	Total undiscounted cash flows			38,634,363
	Less: present value discount			(9,307,998	)
	Total Lease Liabilities		$	29,326,365
	Other information:
	Operating cash flows from operating leases		$	1,387,214
	Weighted-average remaining lease term - operating leases			18.23 years
	Weighted-average discount rate - operating leases			2.89	%

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	The following table represents future minimum lease payments under non-cancelable operating leases at July 31, 2019 as presented in the Company's Annual Report on Form 10-K:
			Operating
	Fiscal Year		Leases
	2020		$	1,897,318
	2021			1,941,494
	2022			2,057,814
	2023			2,072,000
	2024			2,086,697
	After 2024			11,701,293
	Total required*		$	21,756,616
	* Minimum payments have not been reduced by minimum sublease rentals of $36,268,652 under operating leases due in the future under non-cancelable leases.

	Rent payments related to an affiliate principally owned by a director of the Company totaled $246,812 and $740,436 for the three and nine months, respectively, for each of the periods ending April 30, 2020 and 2019. The rental payments are for two leases which expire May 31, 2030 and April 30, 2031, respectively.
9.	Unbilled Receivables and Rental Income: Unbilled receivables represent the excess of scheduled rental income recognized on a straight-line basis over rental income as it becomes receivable according to the provisions of each lease.
10.	Employees' Retirement Plan: The Company sponsors a noncontributory Money Purchase Plan covering substantially all of its non-union employees. Operations were charged $67,312 and $314,897 as contributions to the Plan for the three and nine months ended April 30, 2020, respectively, and $106,580 and $359,353 as contributions to the Plan for the three and nine months ended April 30, 2019, respectively. Multi-employer plan: The Company contributes to a union sponsored multi-employer pension plan covering its union employees. The Company contributions to the pension plan were $14,360 and $46,180 for the three and nine months ended April 30, 2020 respectively and $16,327 and $45,786 as contributions to the plan for the three and nine months ended April 30, 2019, respectively. Contributions and costs are determined in accordance with the provisions of negotiated labor contracts or  terms of the plans. The Company also contributes to union sponsored health benefit plans. Contingent Liability for Pension Plan: Information as to the Company’s portion of accumulated plan benefits and plan assets is not reported separately by the pension plan. Under the Employee Retirement Income Security Act, upon withdrawal from a multi-employer benefit plan, an employer is required to continue to pay its proportionate share of the plan’s unfunded vested benefits, if any. Any liability under this provision cannot be determined: however, the Company has not made a decision to withdraw from the plan.

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	Information for contributing employer’s participation in the multi-employer plan:

		Legal name of Plan:		United Food and Commercial Workers Local 888 Pension Fund
		Employer identification number:		13-6367793
		Plan number:		001
		Date of most recent Form 5500:		December 31, 2018
		Certified zone status:		Critical and declining status
		Status determination date:		January 1, 2018
		Plan used extended amortization provisions in status calculation:		Yes
		Minimum required contribution:		Yes
		Employer contributing greater than 5% of Plan contributions for year ended December 31, 2018:		Yes
		Rehabilitation plan implemented:		Yes
		Employer subject to surcharge:		Yes
		Contract expiration date:		November 30, 2022

	For the plan years 2019-2022, under the pension fund’s rehabilitation plan, the Company agreed to pay a minimum contribution rate equal to 9.1% of the prior year total contribution rate. The Company has 29 employees and has a contract, expiring November 30, 2022, with a union covering rates of pay, hours of employment and other conditions of employment for approximately 21% of its employees. The Company considers that its labor relations with its employees and union are good.
11.	Cash Flow Information: For purposes of reporting cash flows, the Company considers cash equivalents to consist of short-term highly liquid investments with maturities of three (3) months or less, which are readily convertible into cash. The following is a reconciliation of the Company’s cash and cash equivalents and restricted cash to the total presented on the consolidated statement of cash flows:
			April 30
			2020				2019
	Cash and cash equivalents		$	6,126,989			$	5,330,262
	Restricted cash, tenant security deposits			793,539				1,342,124
	Restricted cash, escrow			321,603				258,399
	Restricted cash, other			27,840				33,480
			$	7,269,971			$	6,964,265
	Amounts in restricted cash primarily consist of cash held in bank accounts for tenant security deposits, amounts set aside in accordance with certain loan agreements, and security deposits with landlords and utility companies.
	Supplemental disclosure:		Nine Months Ended
			April 30
			2020				2019
	Cash Flow Information
	Interest paid, net of capitalized interest of $101,064 (2020) and $41,024 (2019)		$	68,781			$	104,802
	Income taxes paid (refunded)			(23,041	)			–
	Non-cash information
	Recognition of operating lease right-of-use assets		$	39,464,411
	Recognition of operating lease liabilities			30,222,981
	Mortgage refinance			5,255,920

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12.	Common Stock: The Company has one class of common stock with identical voting rights and rights to liquidation.
13.	Contingencies: On November 2, 2018 the Company settled the lawsuit relating to defective workmanship and breach of contract to replace a roof and various other work on its Fishkill, New York building. The Company agreed to pay $635,000 to the Plaintiffs, D. Owens Electric, Inc., Mid-Hudson Structural Concrete, Inc. d/b/a Recycle Depot, and BSB Construction, Inc., in settlement of the claims made against the Company. This settlement resolves the actions and disputes referred to in the Decision and Order dated October 30, 2018 of the Supreme Court of the State of New York, County of Dutchess. The $635,000 was paid in full on November 6, 2018. There are various other lawsuits and claims pending against the Company. It is the opinion of management that the resolution of these matters will not have a material adverse effect on the Company’s Consolidated Financial Statements. If the Company sells, transfers, disposes of or demolishes 25 Elm Place, Brooklyn, New York, then the Company may be liable to create a condominium unit for the loading dock. The necessity of creating the condominium unit and the cost of such condominium unit cannot be determined at this time.

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Item 2.

J. W. MAYS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our financial statements and related notes thereto contained in this report. In this discussion, the words “Company”, “we”, “our” and “us” refer to J.W. Mays, Inc. and subsidiaries.

Forward Looking Statements:

The following can be interpreted as including forward looking statements under the Private Securities Litigation Reform Act of 1995. The words “outlook”, “intend”, “plans”, “efforts”, “anticipates”, “believes”, “expects” or words of similar import typically identify such statements. Various important factors that could cause actual results to differ materially from those expressed in the forward-looking statements are identified under the heading “Cautionary Statement Regarding Forward-Looking Statements” below. Our actual results may vary significantly from the results contemplated by these forward-looking statements based on a number of factors including, but not limited to, availability of labor, marketing success, competitive conditions and the change in economic conditions of the various markets we serve.

The Impact of COVID-19 on our Results and Operations:

In late 2019, an outbreak of COVID-19 emerged and by March 11, 2020 was declared a global pandemic by The World Health Organization. Throughout the United States and locally, governments and municipalities instituted measures in an effort to control the spread of COVID-19, including quarantines, shelter-in-place orders, school closings, travel restrictions and the closure of non-essential businesses. By the end of March and into April 2020, the economic impacts became significant.

In March and April 2020, we experienced an increase in late payments due to the impact of COVID-19 and the related reductions in economic activity from government mandated business disruptions and shelter-in-place orders. The effects of COVID-19 on our tenants have been reflected in an increase in our allowance for credit losses for accounts receivable. March and April rent collections and increased past due activity may not be indicative of unpaid rents in any future period. In addition, we experienced volatility in the valuation of our equity investments.

Looking ahead, the full impact of COVID-19 on our business is unknown and highly unpredictable. Many of our tenants will suffer reductions in revenue and, depending upon the duration of quarantines and the corresponding economic slowdown, some of our tenants have or will seek rent deferrals or become unable to pay their rent. While we believe our tenants are required to pay rent under their leases, we are considering temporary rent relief on a case-by-case basis. Our past results may not be indicative of our future performance and historical trends in revenues, income from operations, net income, earnings per share, cash provided by operating activities, among others, may differ materially. For example, to the extent the pandemic continues to disrupt economic activity nationally and in New York, NY, like other businesses, it could adversely affect our business operations and financial results through prolonged decreases in revenue, credit deterioration of our tenants, depressed economic activity, or declines in capital markets. In addition, many of our expenses are less variable in nature and may not correlate to changes in revenues. The extent of the impact will depend on a number of factors, including the duration and severity of the pandemic; advances in testing, treatment and prevention; and the macroeconomic impact of government measures to contain the spread of the virus and related government stimulus measures.

Critical Accounting Policies and Estimates:

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. We believe the critical accounting policies in Note 1 to the Condensed Consolidated Financial Statements disclose our more significant judgments and estimates used in the preparation of our financial statements. Actual results may differ from these estimates under different assumptions and conditions. (See Note 1 on pages 7 through 10 to the Condensed Consolidated Financial Statements herein and Note 1 on pages 9 through 12 to the Consolidated Financial Statements in the Annual Report to Shareholders for the fiscal year ended July 31, 2019).

As of April 30, 2020, the impact of COVID-19 continues to unfold. As a result, many of our estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and as additional information becomes available, our estimates may change materially in future periods.

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Results of Operations:

Three months ended April 30, 2020 compared to the three months ended April 30, 2019:

In the three months ended April 30, 2020, the Company reported net loss of ($585,023), or ($.29) per share. In the comparable three months ended April 30, 2019, the Company reported net income of $655,935, or $.32 per share. Revenue in the current three months decreased, real estate operating expenses increased and administrative and general expense increased as explained below.

Revenues in the current three months decreased to $5,128,574 from $5,275,552 in the comparable 2019 three months primarily due to loss of rental income from four tenants and a reduction in rent from an existing tenant, partially offset by rental from one new tenant.

Real estate operating expenses in the current three months increased to $3,443,130 from $3,020,188 in the comparable 2019 three months primarily due to:

1)	increases in real estate taxes and license and permit costs,
2)	increases in rent expense due to the recording of the building to right-of-use asset (see Notes 1, 5 and 8),
3)	partially offset by decreases in payroll costs and leasing commissions

Administrative and general expenses in the current three months increased to $1,771,233 from $1,135,750 in the comparable 2019 three months primarily due to:

1)	increases in bad debt expense in the amount of $556,000 due to the recording of an allowance for uncollectible receivables and a reduction of unbilled receivables for uncollectible amounts (see Note 1). Increased bad debt expense was mostly caused by the effects of COVID-19 and the result of government mandated business disruptions and shelter-in-place orders.
2)	increases in legal and professional costs.

The gain on disposition of property and equipment in the three months ended April 30, 2020 in the amount of $13,129 was from the sale of an automobile.

Depreciation expense in the current three months decreased to $410,610 from $474,761 in the comparable 2019 three months primarily due to a decrease in depreciation on the Jamaica building due to the recording of the building to right-of-use asset (see Notes 1, 5 and 8).

Interest expense exceeded investment income in the current three months by $326,753 and investment income exceeded interest expense by $281,082 in the comparable 2019 three months. The decrease in investment income was primarily due to the change in fair value of marketable securities resulting from the effects of COVID-19.

Nine months ended April 30, 2020 compared to the nine months ended April 30, 2019:

In the nine months ended April 30, 2020, the Company reported net loss of ($513,760), or ($.25) per share. In the comparable nine months ended April 30, 2019, the Company reported net income of $870,701, or $.43 per share. Revenue in the current nine months decreased and real estate operating expenses increased as explained below.

Revenues in the current nine months decreased to $15,203,549 from $15,758,449 in the comparable 2019 nine months primarily due to loss of rental income from four tenants and a reduction in rent from an existing tenant, partially offset by rental from one new tenant.

Real estate operating expenses in the current nine months increased to $10,206,355 from $9,113,794 in the comparable 2019 nine months primarily due to:

1)	increases in real estate taxes and license and permit costs,
2)	increases in rent expense due to the recording of the building to right-of-use asset (see Notes 1, 5 and 8),
3)	partially offset by decreases in maintenance costs and leasing commissions

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Administrative and general expenses in the current nine months increased to $4,297,879 from $4,184,557 in the comparable 2019 nine months primarily due to:

1)	increases in bad debt expense in the amount of $556,000 due to the recording of an allowance for uncollectible receivables and a reduction of unbilled receivables for uncollectible amounts (see Note 1). Increased bad debt expense was mostly caused by the effects of COVID-19 and the result of government mandated business disruptions and shelter-in-place orders.
2)	increases in legal and professional costs.
3)	partially offset due to settlement of litigation costs in the amount of $635,000 in the 2019 nine months (see Note 13).

The loss on disposition of property and equipment in the nine months ended April 30, 2020 in the amount of $40,992 was from a loss of $54,121, for the removal of a canopy at the Company’s Fishkill, New York property offset by a gain of $13,129 from the sale of an automobile. The 2019 nine months did not have a loss on disposition of property and equipment.

Depreciation expense in the current nine months decreased to $1,192,997 from $1,414,045 in the comparable 2019 nine months primarily due to a decrease in depreciation on the Jamaica building due to the recording of the building to right-of-use asset (see Notes 1, 5 and 8), partially offset by additional depreciation from prior year improvements in the Brooklyn buildings.

Interest expense exceeded investment income in the current nine months by $177,086 and investment income exceeded interest expense by $206,648 in the comparable 2019 nine months. The decrease in investment income was primarily due to the change in fair value of marketable securities resulting from the effects of COVID-19.

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Liquidity and Capital Resources:

In March and April 2020, we experienced an increase in late payments due to the impact of COVID-19 and the related reductions in economic activity from business disruptions and shelter-in-place orders. In addition, we experienced declines in the valuation of our equity investments. To the extent the COVID-19 pandemic continues to disrupt economic activity nationally and in New York, NY, the impact may include increased bad debt expense, lower rental income and occupancy levels at our properties which may result in less cash provided by operating activities. Many of our expenses are less variable in nature and may not correlate to changes in revenues.

In March 2017, the Company leased 7,700 square feet to a medical facility at its Nine Bond Street Brooklyn, New York building, for a term of ten years with two five-year option periods. To accommodate this tenant, an existing tenant surrendered 400 square feet of retail space. The cost of renovations for this tenant was $329,154 and brokerage commissions were $216,052. The tenant took occupancy and commenced payment of rent in October 2019.

The tenant who leased 20,000 square feet of space at the Company’s Massapequa, New York property to open a restaurant had their lease terminated in April 2019 for non-payment of rent. The tenant’s lease commenced in September 2018 and rent was supposed to begin in January 2019. The Company re-leased these premises in August 2019 to a fast food restaurant expiring in April 2030. Rent is expected to commence in September 2020.

In July 2019, the Company leased 47,000 square feet to a community college at its Fishkill, New York building for a term of fifteen years with two five-year option periods. The cost of renovations for this tenant will be approximately $3,200,000 and brokerage commissions will be $448,939. The tenant is expected to take occupancy and commence payment of rent in June 2020.

In July 2019, the retail tenant at the Company’s Fishkill, New York building who occupies 90,000 square feet gave notice to terminate their lease effective October 30, 2019. The loss in annual rent will be approximately $250,000. The Company and the tenant then agreed to extend the lease until December 2019.

In August 2019, a tenant who occupies 23,603 square feet of office space at the Company’s Jowein building in Brooklyn, New York vacated the premises. The loss in annual rent will be approximately $814,000.

In September 2019, a retail tenant who occupies 128,196 square feet surrendered approximately 22,000 square feet at the Company’s Nine Bond Street building in Brooklyn, New York. The loss in annual rent will be approximately $965,000.

In November 2019, the Company refinanced a loan with a bank for the balance due in the amount of $5,255,920 plus an additional $144,080 for a total of $5,400,000. The interest rate is 4.375% per annum. The loan is self-liquidating over a five-year period.

In November 2019, the Company extended a lease with one of the Company’s landlords, which expires in April 2026 for an additional eight years and eight months to expire in December 2034 at its Nine Bond Street building in Brooklyn, New York.

In February 2020, a retail tenant who occupies 5,500 Square feet at the Company’s Jowein building in Brooklyn, New York vacated the premises. The annual loss in rents will be approximately $165,000.

In March 2020, the Company obtained a loan with a bank in the amount of $4,000,000 to finance renovations and brokerage commissions relating to space leased to a community college at the Fishkill, New York building. The loan is secured by the Fishkill, New York building; amortized over a 20-year period with an interest rate of 3.98% and is due in five years (See Note 6).

In April 2020, the Company extended leases with three of the Company’s landlords at its Nine Bond Street building in Brooklyn, New York. All three of the leases were extended until April 2044. The Company also extended its lease with its landlord at the Company’s Jamaica, New York building until May 2030.

In April 2020, a tenant who occupies 108,000 square feet of warehouse space at the Company's Circleville, Ohio building extended their lease for an additional three years to expire May 31, 2023.

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In April 2020, the Company obtained a $722,726 loan issued by a bank through the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”). PPP loan payments are deferred for a period of six months until October 10, 2020. The interest rate on the loan is .98% per annum and it matures in twenty-four months on April 10, 2022. PPP provides forgiveness of loan proceeds used for qualified and documented payroll costs, mortgage interest payments, rent payments and utilities, if less than 25% of such proceeds are used for non-payroll costs (See Note 7).

Cash Flows From Operating Activities:

Deferred Expenses: The Company had an additional $46,585 for brokerage commissions incurred from an existing tenant’s extension of a lease at the Company’s Jamaica, New York building.

Payroll and Other Accrued Liabilities: The Company had a balance due at April 30, 2020 for brokerage commissions of $583,428.

In March and April 2020, we experienced an increase in late payments due to the impact of COVID-19 and the related reductions in economic activity from business disruptions and shelter-in-place orders. In addition, we experienced declines in the valuation of our equity investments. To the extent the COVID-19 pandemic continues to disrupt economic activity nationally and in New York, NY, the impact may include increased bad debt expense, lower rental income and occupancy levels at our properties which may result in less cash provided by operating activities. Many of our expenses are less variable in nature and may not correlate to changes in revenues.

Cash Flows From Investing Activities:

The Company had expenditures of $289,699 for the nine months ended April 30, 2020 for elevator upgrade work at the Company’s Nine Bond Street building in Brooklyn, New York.

The Company had expenditures for elevator upgrade work in the amount of $152,336 for the nine months ended April 30, 2020, at the Company’s Jamaica, New York building. The Company also had expenditures of $291,545 for renovation work for two existing tenants.

The Company had expenditures for renovations for a new tenant in the amount of $2,875,331 for the nine months ended April 30, 2020, at its Fishkill, New York building. The total cost was $3,481,909 and was completed in May 2020. The Company also had expenditures of $615,243 for four new elevators for the nine months ended April 30, 2020. The total cost will be approximately $1,800,000 and is anticipated to be completed in early 2021. The Company also had expenditures of $771,544 for a new lobby for the nine months ended April 30, 2020. The total cost was $1,645,886 and was completed in April 2020. The Company also had expenditures of $130,508 for a second lobby in the nine months ended April 30, 2020. The total cost will be approximately $900,000 and is expected to be completed in December 2020.

The Company had expenditures in the amount of $221,442 for elevator upgrade work at its Jowein building in Brooklyn, New York.

Cash flows from Financing Activities:

In November 2019, the Company refinanced with a bank the remaining balance of a previous loan due of $5,255,920 plus an additional $144,080 for a total of $5,400,000 (See Note 6).

In March 2020, the Company obtained a loan with a bank in the amount of $4,000,000 (See Note 6).

In April 2020, the Company obtained a $722,726 loan issued by a bank through the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”) (See Note 7).

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Cautionary Statement Regarding Forward-Looking Statements:

This section, Management’s Discussion and Analysis of Financial Condition and Results of Operations, other sections of this Report on Form 10-Q and other reports and verbal statements made by our representatives from time to time may contain forward-looking statements that are based on our assumptions, expectations and projections about us and the real estate industry. These include statements regarding our expectations about revenues, our liquidity, our expenses and our continued growth, among others. Such forward-looking statements by their nature involve a degree of risk and uncertainty. We caution that a variety of factors, including but not limited to the factors listed below, could cause business conditions and our results to differ materially from what is contained in forward-looking statements:

●	changes in the rate of economic growth in the United States;
●	the ability to obtain credit from financial institutions and the related costs;
●	changes in the financial condition of our customers;
●	changes in regulatory environment;
●	lease cancellations;
●	changes in our estimates of costs;
●	war and/or terrorist attacks on facilities where services are or may be provided;
●	outcomes of pending and future litigation;
●	increasing competition by other companies;
●	compliance with our loan covenants;
●	recoverability of claims against our customers and others by us and claims by third parties against us;
●	changes in estimates used in our critical accounting policies; and
●	pandemics and the ongoing effects of COVID-19.

Other factors and assumptions not identified above were also involved in the formation of these forward-looking statements and the failure of such other assumptions to be realized, as well as other factors, may also cause actual results to differ materially from those projected. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described above in connection with any forward-looking statements that may be made by us.

We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to review any additional disclosures we make in proxy statements, quarterly reports on Form 10-Q, annual reports on Form 10-K and any Form 8-K reports filed with the United States Securities and Exchange Commission.

Item 3. Quantitative and Qualitative Disclosures About Market Risk:

The Company uses fixed-rate debt to finance its capital requirements. These transactions do not expose the Company to market risk related to changes in interest rates. The Company does not use derivative financial instruments. At April 30, 2020, the Company had fixed-rate debt of $9,798,903.

Item 4. Controls and Procedures:

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded, as of the end of the period covered by this quarterly report, our disclosure controls and procedures were effective and provide reasonable assurance that the information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported accurately and within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the period covered by this report that have materially affected, or are likely to materially affect, our internal control over financial reporting.

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Part II - Other Information

	Item	1. Legal Proceedings
		From time to time we are involved in legal actions arising in the ordinary course of business. In our opinion, the outcome of such matters in the aggregate will not have a material adverse effect on our financial condition, results of operations or cash flows. See also Note 12 to the Company’s Condensed Consolidated Financial Statements.
	Item	1A. Risk Factors
		There have been no changes to our risk factors from those disclosed in our Annual Report on Form 10-K for our fiscal year ended July 31, 2019, except that as stated in “Cautionary Statements Regarding Forward-Looking Statements”, the last factor listed thereon, “pandemics and the ongoing effects of COVID-19” could adversely affect our results and operations as set forth on page 20 and further explained on various other pages under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
	Item	2. Unregistered Sales of Equity Securities and Use of Proceeds
		None
	Item	3. Defaults Upon Senior Securities
		None
	Item	4. Mine Safety Disclosures
		Not applicable
	Item	5. Other Information
		None
	Item	6. Exhibits and Reports on Form 8-K
	(a)	List of Exhibits:

(b)	Reports on Form 8-K – Two reports on Form 8-K were filed by the registrant for the period ended April 30, 2020.
	Item reported:
	The Company reported its financial results for the three and six months ended January 31, 2020. Date of report filed – March 5, 2020.
	The Company reported entry into a material definitive agreement. Date of report filed – March 5, 2020.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

					J.W. MAYS, Inc.
					(Registrant)
Date:	June 4, 2020				Lloyd J. Shulman
					Lloyd J. Shulman
					President
					Chief Executive Officer
Date:	June 4, 2020				Mark S. Greenblatt
					Mark S. Greenblatt
					Vice President
					Chief Financial Officer

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