Annual Statements Open main menu

MAYS J W INC - Quarter Report: 2022 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, 2022

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
Incorporation or Organization
  I.R.S. Employer Identification No.
     
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.

 

Large accelerated filer Accelerated filer
Non-accelerated filer  Smaller reporting company 
  Emerging growth company 

 

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

 

Indicate by check mark whether the registrant 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

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, $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 9, 2022
Common Stock, $1 par value   2,015,780 shares

 

This report contains 27 pages.

 

 

 

 

J. W. MAYS, INC.

 

INDEX

 

  Page No.
Part I - Financial Information:  
   
Item 1. Financial Statements  
   
Consolidated Balance Sheets (Unaudited) – April 30, 2022 and July 31, 2021 3
Consolidated Statements of Operations (Unaudited) – Three and nine months ended April 30, 2022 and 2021 4
Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) – Three and nine months ended April 30, 2022 and 2021 5
Consolidated Statements of Cash Flows (Unaudited) – Nine months ended April 30, 2022 and 2021 6
Notes to Consolidated Financial Statements (Unaudited) 7 - 17
   
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 18 - 22
   
Item 3. Quantitative and Qualitative Disclosures About Market Risk 22
   
Item 4. Controls and Procedures 22
   
Part II - Other Information:  
Item 1. Legal Proceedings 23
Item 1A. Risk Factors 23
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 23
Item 3. Defaults Upon Senior Securities 23
Item 4. Mine Safety Disclosures 23
Item 5. Other Information 23
Item 6. Exhibits and Reports on Form 8-K 23
   
Signatures 24
   
Exhibit 31 Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  
31.1 - Chief Executive Officer 25
31.2 - Chief Financial Officer 26
   
Exhibit 32 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  
18 U.S.C. Section 1350 27

 

-2-

Index 

 

Part I - Financial Information

 

Item 1. Financial Statements

 

J. W. MAYS, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

   April 30
2022
   July 31
2021
 
ASSETS        
Property and Equipment-at cost:        
Land  $6,067,805   $6,067,805 
Buildings held for leasing:          
Buildings, improvements and fixtures   75,549,098    74,547,096 
Construction in progress   2,565,884    2,244,959 
    78,114,982    76,792,055 
Accumulated depreciation   (36,038,604)   (34,793,458)
Buildings - net   42,076,378    41,998,597 
Property and equipment-net   48,144,183    48,066,402 
           
Cash and cash equivalents   1,909,732    1,552,389 
Restricted cash   1,067,122    882,330 
Receivables, net   2,443,437    2,416,769 
Marketable securities   3,374,954    3,901,093 
Prepaids and other assets   1,218,712    2,384,727 
Deferred charges, net   3,344,733    3,739,243 
Operating lease right-of-use assets   32,656,027    34,566,169 
TOTAL ASSETS  $94,158,900   $97,509,122 
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
           
Liabilities:          
Mortgages payable  $6,653,458   $7,518,777 
Accounts payable and accrued expenses   1,875,909    2,632,905 
Security deposits payable   985,263    834,470 
Operating lease liabilities   26,843,847    27,840,930 
Deferred income taxes   4,344,000    4,582,000 
Total Liabilities   40,702,477    43,409,082 
           
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   49,219,733    49,863,350 
    54,744,275    55,387,892 
Common stock held in treasury, at cost - 162,517 shares at April 30, 2022 and July 31, 2021   (1,287,852)   (1,287,852)
Total shareholders’ equity   53,456,423    54,100,040 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $94,158,900   $97,509,122 

 

See Notes to Accompanying Consolidated Financial Statements

 

-3-

Index 

 

J. W. MAYS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

   Three Months Ended   Nine Months Ended 
   April 30   April 30   April 30   April 30 
   2022   2021   2022   2021 
Revenues                
Rental income  $5,484,082   $5,161,888   $15,891,978   $15,043,749 
Total revenues   5,484,082    5,161,888    15,891,978    15,043,749 
                     
Expenses                    
Real estate operating expenses   3,763,723    3,714,427    11,063,910    10,882,590 
Administrative and general expenses   1,281,229    1,243,872    4,102,753    3,757,064 
Depreciation   421,858    445,825    1,325,540    1,335,268 
Total expenses   5,466,810    5,404,124    16,492,203    15,974,922 
                     
Income (loss) from operations   17,272    (242,236)   (600,225)   (931,173)
                     
Other income and interest expense:                    
Investment income   3,467    7,960    208,769    174,121 
Change in fair value of marketable securities   (61,161)   252,736    (297,899)   276,751 
Interest expense   (33,615)   (86,381)   (192,262)   (254,151)
    (91,309)   174,315    (281,392)   196,721 
                     
Loss from operations before income taxes   (74,037)   (67,921)   (881,617)   (734,452)
Income taxes provided (benefit)   (17,000)   (26,000)   (238,000)   (223,000)
Net loss  $(57,037)  $(41,921)  $(643,617)  $(511,452)
                     
Loss per common share, basic and diluted  $(.03)  $(.02)  $(.32)  $(.25)
                     
Dividends per share  $
   $
   $
   $
 
                     
Average common shares outstanding, basic and diluted   2,015,780    2,015,780    2,015,780    2,015,780 

 

See Notes to Accompanying Consolidated Financial Statements

 

-4-

Index 

 

J. W. MAYS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(UNAUDITED)

 

   Common
Stock
   Additional
Paid In
Capital
   Retained
Earnings
   Common Stock
Held in
Treasury
   Total 
Three Months Ended April 30, 2022                    
Balance at January 31, 2022  $2,178,297   $3,346,245   $49,276,770   $(1,287,852)  $53,513,460 
Net loss, three months ended April 30, 2022   
    
    (57,037)   
    (57,037)
Balance at April 30, 2022  $2,178,297   $3,346,245   $49,219,733   $(1,287,852)  $53,456,423 
Three Months Ended April 30, 2021                         
Balance at January 31, 2021  $2,178,297   $3,346,245   $48,995,787   $(1,287,852)  $53,232,477 
Net loss, three months ended April 30, 2021   
    
    (41,921)   
    (41,921)
Balance at April 30, 2021  $2,178,297   $3,346,245   $48,953,866   $(1,287,852)  $53,190,556 
                          
   Common
Stock
   Additional
Paid In
Capital
   Retained
Earnings
   Common Stock
Held in
Treasury
   Total 
Nine Months Ended April 30, 2022                    
Balance at July 31, 2021  $2,178,297   $3,346,245   $49,863,350   $(1,287,852)  $54,100,040 
Net loss, nine months ended April 30, 2022   
    
    (643,617)   
    (643,617)
Balance at April 30, 2022  $2,178,297   $3,346,245   $49,219,733   $(1,287,852)  $53,456,423 
Nine Months Ended April 30, 2021                         
Balance at July 31, 2020  $2,178,297   $3,346,245   $49,465,318   $(1,287,852)  $53,702,008 
Net loss, nine months ended April 30, 2021   
    
    (511,452)   
    (511,452)
Balance at April 30, 2021  $2,178,297   $3,346,245   $48,953,866   $(1,287,852)  $53,190,556 

 

See Notes to Accompanying Consolidated Financial Statements

-5-

Index 

 

J. W. MAYS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

   Nine Months Ended 
   April 30 
   2022   2021 
Cash Flows From Operating Activities:        
Net loss  $(643,617)  $(511,452)
           
Adjustments to reconcile net income (loss) to net cash provided by operating activities:          
Bad debt expense (recoveries)   214,350    209,000 
Provision (Benefit) for deferred income taxes   (238,000)   (223,000)
Depreciation   1,325,540    1,335,268 
Amortization of deferred charges   394,510    291,200 
Operating lease expense in excess of cash payments   913,059    1,001,337 
Deferred finance costs included in interest expense   28,584    28,584 
Net realized (gain) on marketable securities   (48,213)   (276,751)
Net unrealized (gain) loss on marketable securities   297,899    (83,176)
Deferred Charges   
-
    (1,138,562)
Changes in Operating Assets and Liabilities:          
Receivables   (241,018)   (367,654)
Prepaid expenses and other assets   1,166,015    1,142,370 
Accounts payable and accrued expenses   (756,996)   85,918 
Security deposits payable   150,793    4,442 
Cash provided by operating activities   2,562,906    1,497,524 
           
Cash Flows From Investing Activities:          
Acquisition of property and equipment   (1,403,321)   (1,781,448)
Marketable securities:          
Receipts from sales   400,254    494,990 
Payments for purchases   (123,801)   (581,467)
Cash (used) in investing activities   (1,126,868)   (1,867,925)
           
Cash Flows From Financing Activities:          
Payments - mortgage and other debt payments   (893,903)   (855,607)
Net cash (used) in financing activities   (893,903)   (855,607)
           
Increase (decrease) in cash, cash equivalents and restricted cash   542,135   (1,226,008)
           
Cash, cash equivalents and restricted cash at beginning of period   2,434,719    4,403,801 
           
Cash, cash equivalents and restricted cash at end of period  $2,976,854   $3,177,793 

 

See Notes to Accompanying Consolidated Financial Statements.

 

-6-

Index 

 

J. W. MAYS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

1. Summary of Significant Accounting Policies:

 

Beginning March 2020 and continuing through April 2022, we experienced an increase in late payments due to the impact of COVID-19 and the related reductions in economic activity from ongoing government mandated business regulations. The effects of COVID-19 on our tenants have been reflected in our allowance for credit losses for accounts receivable. In limited circumstances, we have agreed to rent deferrals for certain tenants. We also continue to experience volatility in the valuation of our equity investments through April 30, 2022.

 

Looking ahead, the full impact of COVID-19 and continuing government regulation on our business is unknown and highly unpredictable. 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; distribution of vaccines; and the macroeconomic impact of government measures to contain the spread of the virus and related government regulations.

 

Basis of Presentation

 

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, impairment analysis of long-lived assets, 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 instructions for reporting on Form 10-Q and Article 8 of Regulations S-X of the SEC Rules and Regulations. The July 31, 2021 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, 2021. 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, 2022 or any other period.

 

As of April 30, 2022, the economic impacts of COVID-19 continue to evolve. As a result, many of our estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As additional information becomes available, our estimates may change materially in future periods.

 

-7-

Index 

 

Restricted Cash

 

Restricted cash primarily consists of cash held in bank accounts for tenant security deposits and other amounts required under certain loan agreements.

 

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 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 considers business and economic impacts 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 effect on our allowance for uncollectible accounts receivables in future periods.

 

As of April 30, 2022 and July 31, 2021, and primarily because of the economic effects of COVID-19, the Company recorded an allowance for uncollectible receivables in the amount of $399,000 and $318,000, respectively, as an offset to receivables.

 

Activity in the allowance for uncollectible receivables and bad debt expense for each period follows:

 

   Allowance for                 
   Uncollectible                 
   Accounts Receivable   Bad Debt Expense 
   Period Ended   Three Months Ended   Nine Months Ended 
   April 30   July 31   April 30   April 30 
   2022   2021   2022   2021   2022   2021 
Beginning balance  $318,000   $82,000   $
   $
   $
   $
 
Charge-offs   
    
    
    
    133,350    
 
Reserve adjustments   81,000   236,000   (5,000)   135,000    81,000   209,000
Ending balance  $399,000   $318,000   $(5,000)  $135,000   $214,350   $209,000 

 

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.

 

-8-

Index 

 

During the nine months ended April 30, 2022, the Company had expenditures of $92,941 for steel work at its Jowein building in Brooklyn, New York. During this period, the Company also had expenditures of $161,337 for renovations at its 9 Bond Street building in Brooklyn, New York, and $1,050,680 at its Fishkill, New York building including:

 

1)$241,587 to resurface the parking lot. The total cost was $342,316 and was completed in August 2021.

 

2)$240,908 for canopy work.

 

3)$421,919 for elevator modernization. The total cost is $892,000 and is anticipated to be completed in May 2023.

 

4)$85,649 for lighting.

 

5)Storefront and sidewalk expenditures of $60,617.

 

During the nine months ended April 30, 2021, the Company had expenditures of:

 

1)$963,754 at its Fishkill, New York building; including $351,810 for a second lobby, $593,702 for façade work, and $18,242 for various other improvements.

 

2)$241,240 for stairwell and sidewalk upgrades at its Jamaica, New York building.

 

3)$576,454 at its Jowein building in Brooklyn, New York; including $428,509 for new tenant improvements and $147,945 for roof work.

 

Impairment

 

The Company reviews property and equipment and related lease intangibles for possible impairment when certain events or changes in circumstances indicate the carrying amount of the asset may not be recoverable through operations plus estimated disposition proceeds. Events or changes in circumstances that may occur include, but are not limited to, significant changes in real estate market conditions, estimated residual values, and an expectation to sell assets before the end of the previously estimated life. Impairments are measured to the extent the current book value exceeds the estimated fair value of the asset less disposition costs for any assets classified as held for sale. As of April 30, 2022 and July 31, 2021, the Company has determined there was no impairment 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 4 to 21 years, using the straight-line method. If a lease is terminated early, such costs are expensed.

 

Leases - Lessor Revenue

 

The Company accounts for revenue in accordance with Accounting Standards Update (ASU) 2014-09 (Topic 606) Revenue from Contracts with Customers. Rental income 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 are included in accounts receivable and 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, are 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, and 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.

 

-9-

Index 

 

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 $10,316,000 as of July 31, 2021 available to offset future taxable income. As of July 31, 2021, the Company had unused state and city net operating loss carryforwards of approximately $12,356,000 for state and $10,321,000 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.

 

Recently adopted accounting standards:

 

In April 2020, the Financial Accounting Standards Board 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 deferrals would result in an increase to accounts receivable during the deferral period with no impact on rental revenue recognition. The Company elected this policy for the year ended July 31, 2020. Rent deferrals included in receivables were $280,000 and $364,963 as of April 30, 2022 and July 31, 2021, respectively.

 

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 three and nine months ended April 30, 2022 and 2021, respectively.

 

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.

 

-10-

Index 

 

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, 2022 and July 31, 2021.

 

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.

 

Fair value measurements at reporting date

 

   Total               Total             
   April 30,               July 31,             
Description  2022   Level 1   Level 2   Level 3   2021   Level 1   Level 2   Level 3 
Assets:                                
Marketable securities  $3,374,954   $3,374,954   $
   $
   $3,901,093   $3,901,093   $
   $
 

 

As of April 30, 2022 and July 31, 2021, the Company's marketable securities were classified as follows:

 

   April 30, 2022   July 31, 2021 
       Gross   Gross           Gross   Gross     
       Unrealized   Unrealized   Fair       Unrealized   Unrealized   Fair 
   Cost   Gains   Losses   Value   Cost   Gains   Losses   Value 
Mutual funds  $962,518   $361,703   $
   $1,324,221   $984,869   $619,972   $
   $1,604,841 
Equity securities   1,150,072    900,661    
    2,050,733    1,355,961    940,291    
    2,296,252 
   $2,112,590   $1,262,364   $
   $3,374,954   $2,340,830   $1,560,263   $
   $3,901,093 

 

-11-

Index 

 

Investment income consists of the following:

 

   Three Months Ended   Nine Months Ended 
   April 30   April 30 
   2022   2021   2022   2021 
Interest income  $2   $271   $3   $565 
Dividend income   3,465    7,689    160,553    90,380 
Gain on sale of marketable securities   
    
    48,213    83,176 
Total  $3,467   $7,960   $208,769   $174,121 

 

4.Financial Instruments and Credit Risk Concentrations:

 

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

 

Five tenants accounted for approximately 70% and 66% of receivables as of April 30, 2022 and July 31, 2021, respectively. During the nine months ended April 30, 2022 and 2021, two tenants accounted for 31% and 30% of total rental revenue, respectively.

 

5.Long-Term Debt – Mortgages:

 

   Current           
   Annual  Final        
   Interest  Payment  April 30,   July 31, 
   Rate  Date  2022   2021 
(1) Bond St. building, Brooklyn, NY  4.375%  12/1/2024  $3,028,313   $3,817,450 
(2) Fishkill building  3.98%  4/1/2025   3,727,416    3,832,182 
Deferred financing costs         (102,271)   (130,855)
Net        $6,653,458   $7,518,777 

 

(1) In November 2019, the Company refinanced the remaining balance of a $6,000,000, 3.54% interest rate loan with another bank for $5,255,920 plus an additional $144,080 for a total of $5,400,000. The interest rate on the new loan is fixed at 4.375%. The loan is self-liquidating over a period of five years and secured by the Nine Bond Street land and building in Brooklyn, New York.

 

(2) 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 land and building; amortized over a 20-year period with an interest rate of 3.98% and is due in five years.

 

6.Note Payable:

 

In April 2020, the Company obtained a $722,726 loan, with an interest rate of .98% per annum, issued by a bank through the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”) under Division A. Title I of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act’’). On May 26, 2021, the SBA authorized full forgiveness of the Company’s PPP loan in the amount of $722,726, plus accrued interest. Such proceeds were recorded as a full reduction of the note payable and extinguishment of debt income in the year ending July 31, 2021.

 

-12-

Index 

 

7.Operating Leases:

 

Lessor

 

The Company leases office and retail space to tenants under operating leases in commercial buildings. The rental terms range from approximately 5 to 49 years. The leases provide for the payment of fixed base rent payable monthly in advance as well as reimbursements of real estate taxes and common area costs. The Company has elected to account for lease revenues and the reimbursements of common area costs as a single component included as rental income in our consolidated statements of operations.

 

The following table disaggregates the Company's revenues by lease and non-lease components:

 

   Three Months Ended   Nine Months Ended 
   April 30   April 30 
   2022   2021   2022   2021 
Base rent - fixed  $4,995,037   $4,643,772   $14,545,998   $13,705,903 
Reimbursements of common area costs   233,016    245,744    588,929    552,439 
Non-lease components (real estate taxes)   256,029    272,372    757,051    785,407 
Rental income  $5,484,082   $5,161,888   $15,891,978   $15,043,749 

 

Future minimum non-cancelable rental income for leases with initial or remaining terms of one year or more is as follows:

 

   As of April 30, 2022 
   Company         
   Owned   Leased     
Fiscal Year  Property   Property   Total 
For the remainder of 2022  $3,576,791   $1,659,578   $5,236,369 
2023   9,933,651    3,484,190    13,417,841 
2024   7,814,976    3,026,387    10,841,363 
2025   7,465,714    2,643,176    10,108,890 
2026   6,616,668    2,508,693    9,125,361 
2027   5,908,609    2,366,238    8,274,847 
After 2027   28,420,420    5,116,243    33,536,663 
Total  $69,736,829   $20,804,505   $90,541,334 

 

Lessee

 

The Company’s real estate operations include leased properties under long-term, non-cancelable operating lease agreements. The leases expire at various dates through 2073, including options to extend or terminate the lease when it is reasonably certain the Company will exercise that option. Certain leases provide for increases in future minimum annual rental payments as defined in the lease agreements.

 

-13-

Index 

 

Operating lease costs for leased real property was exceeded by sublease rental income from the Company’s real estate operations as follows:

 

   Three Months Ended
April 30
   Nine Months Ended
April 30
 
   2022   2021   2022   2021 
Sublease income  $1,813,958   $1,900,150   $5,411,096   $5,368,431 
Operating lease cost   (832,715)   (832,713)   (2,498,135)   (2,498,133)
Excess of sublease income over lease cost  $981,243   $1,067,437   $2,912,961   $2,870,298 

 

   Three Months Ended
April 30
   Nine Months Ended
April 30
 
Other information:  2022   2021   2022   2021 
Operating cash flows from operating leases  $529,788   $507,182   $1,585,075   $1,496,795 

 

The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities as of April 30, 2022:

 

   Operating 
Period Ended April 30,            Leases 
2023  $2,128,723 
2024   2,145,753 
2025   2,163,029 
2026   2,201,559 
2027   2,269,387 
Thereafter   23,624,495 
Total undiscounted cash flows   34,532,946 
Less: present value discount   (7,689,099)
Total Lease Liabilities  $26,843,847 

 

As of April 30, 2022, our operating leases had a weighted average remaining lease term of 16.87 years and a weighted average discount rate of 2.86%.

 

8. Employees' Retirement Plan:

 

The Company sponsors a noncontributory Money Purchase Plan covering substantially all its non-union employees. Operations were charged $112,469 and $337,500 as contributions to the Plan for the three and nine months ended April 30, 2022, respectively, and $109,760 and $329,743 as contributions to the plan for the three and nine months ended April 30, 2021, respectively.

 

Multi-employer plan:

 

The Company contributes to a union sponsored multi-employer pension plan covering its union employees. Company contributions to the pension plan were $29,740 and $67,239 for the three and nine months ended April 30, 2022, respectively, and $17,925 and $48,498 for the three and nine months ended April 30, 2021, respectively. Contributions and costs are determined in accordance with the provisions of negotiated labor contracts or terms of the plan. The Company also contributes to a union sponsored health benefit plan.

 

-14-

Index 

 

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.

 

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, 2020
Certified zone status:   Critical and declining status
Status determination date:   January 1, 2020
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, 2020:   Yes
Rehabilitation plan implemented:   Yes
Employer subject to surcharge:   Yes
Contract expiration date:   November 30, 2022

 

For the plan years 2019 through November 30, 2021, under the pension fund’s rehabilitation plan, the Company agreed to pay a minimum contribution rate equal to a 9% increase over the prior year total contribution rate. Effective December 1, 2021 through the contract expiration date of November 30, 2022, the Company’s contribution rate is 19.66% of each covered employee’s pay. The contract with a union covers rates of pay, hours of employment and other conditions of employment for approximately 23% of the Company’s 31 employees. The Company considers that its labor relations with its employees and union are good.

 

9.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 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 
   2022   2021 
Cash and cash equivalents  $1,909,732   $2,315,885 
Restricted cash, tenant security deposits   968,262    763,094 
Restricted cash, escrow   71,720    71,674 
Restricted cash, other   27,140    27,140 
   $2,976,854   $3,177,793 

 

-15-

Index 

 

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 
   2022   2021 
Cash Flow Information          
Interest paid, net of capitalized interest of $61,299 (2022) and $42,846 (2021)  $195,951   $252,453 
Income taxes paid (refunded)   
    (23,040)

 

10.Capitalization:

 

The Company is capitalized entirely through common stock with identical voting rights and rights to liquidation. Treasury stock is recorded at cost and consists of 162,517 shares at April 30, 2022 and at July 31, 2021.

 

11.Related Party Transactions:

 

The Company has two operating leases with Weinstein Enterprises, Inc. (“Landlord”), an affiliated company, principally owned by the Chairman of the Board of Directors of both the Company and Landlord. One lease is for building, improvements, and land located at Jamaica Avenue at 169th Street, Jamaica, New York. Another lease is for premises located at 504-506 Fulton Street, Brooklyn, New York.

 

Rent payments and expense relating to these two operating leases with Landlord follow:

 

   Rent Payments   Rent Payments   Rent Expense   Rent Expense 
   Three Months Ended   Nine Months Ended   Three Months Ended   Nine Months Ended 
   April 30   April 30   April 30   April 30 
Property  2022   2021   2022   2021   2022   2021   2022   2021 
Jamaica Avenue at 169th Street  $156,250   $156,250   $468,750   $468,750   $379,359   $379,359   $1,138,078   $1,138,078 
504-506 Fulton Street   90,564    90,564    271,692    271,692    87,609    87,609    262,828    262,828 
Total  $246,814   $246,814   $740.442   $740,442   $466,968   $466,968   $1,400,906   $1,400,906 

 

The following summarizes assets and liabilities related to these two operating leases:

 

   Right-Of-Use        
   Assets   Liabilities    
   April 30   July 31   April 30   July 31    
Property  2022   2021   2022   2021   Expiration Date
Jamaica Avenue at 169th Street  $11,793,423   $12,842,642   $4,579,558   $4,959,450   May 31, 2030
504-506 Fulton Street   2,650,730    2,831,134    2,757,042    2,946,306   April 30, 2031
Total  $14,444,153   $15,673,776   $7,336,600   $7,905,756    

 

Upon termination of the Jamaica, New York lease in 2030, all premises included in operating lease right-of-use assets plus leasehold improvements will be turned over to the Landlord.

 

-16-

Index 

  

12.Contingencies:

 

There are various 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 has not been determined at this time.

 

-17-

Index 

 

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:

 

Beginning March 2020 and continuing through April 2022, we experienced an increase in late payments due to the impact of COVID-19 and the related reductions in economic activity from ongoing government mandated business regulations. The effects of COVID-19 on our tenants have been reflected in our allowance for credit losses for accounts receivable. In limited circumstances, we have agreed to rent deferrals for certain tenants. We also continue to experience volatility in the valuation of our equity investments through April 30, 2022.

 

Looking ahead, the full impact of COVID-19 and continuing government regulation on our business is unknown and highly unpredictable. 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 economic impact will depend on a number of factors, including the duration and severity of the pandemic; distribution of vaccines; and the macroeconomic impact of government measures to contain the spread of the virus and related government regulations.

 

Critical Accounting Policies and Estimates:

 

Critical accounting policies are defined as those most important to the portrayal of a company’s financial condition and results and require the most difficult, subjective, or complex judgments. 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 and liabilities at the date of the financial statements, the reported amount of revenues, and expenses during the reporting period and related disclosure of contingent assets and liabilities. We believe the critical accounting policies in Note 1 affect our more significant judgments and estimates used in the preparation of our financial statements. Estimates are based on historical experience, where applicable or other assumptions that management believes are reasonable under the circumstances. We have identified the policies described in Note 1 as our critical accounting policies. Actual results may differ from these estimates under different assumptions and conditions. Recently adopted accounting standards are also disclosed in Note 1.

 

As of April 30, 2022, the economic impacts of COVID-19 continue to evolve. As a result, many of our estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As additional information becomes available, our estimates may change materially in future periods.

 

Results of Operations:

 

Three months ended April 30, 2022 compared to the three months ended April 30, 2021:

 

In the three months ended April 30, 2022, the Company reported net loss of $(57,037), or $(.03) per share. In the comparable three months ended April 30, 2021, the Company reported a net loss of $(41,921) or $ (.02) per share. The loss in the 2022 three months was primarily due to a decrease in fair value of marketable securities combined with increases in amortization of deferred charges of brokerage fees for new tenants, bad debt expense, payroll and insurance costs. These expenses were partially offset by an increase in revenue and decreases in real estate taxes.

 

-18-

Index 

 

Revenues in the current three months increased to $5,484,082 from $5,161,888 in the comparable 2021 three months primarily due to rental income from five new tenants and increased rents from existing tenants.

 

Real estate operating expenses in the current three months increased to $3,763,723 from $3,714,427 in the comparable 2021 three months primarily due to increases in amortization expense of deferred charges of brokerage fees for new tenants, insurance and payroll costs; partially offset by decreases in real estate taxes.

 

Administrative and general expenses in the current three months increased to $1,281,229 from $1,243,872 in the comparable 2021 three months primarily due to increases in insurance, payroll costs and bad debt expense.

 

Depreciation expense in the current three months of $421,858 approximated $445,825 in the comparable 2021 three months.

 

Interest expense and investment losses in the current three months aggregated $(91,309) primarily due to a $(61,161) change in the fair value of marketable securities; partially offset by a decrease in interest expense. In the three months ended April 30, 2021, the fair value of marketable securities increased resulting in investment income exceeding interest expense by $174,315.

 

Nine months ended April 30, 2022 compared to the nine months ended April 30, 2021:

 

In the nine months ended April 30, 2022, the Company reported net loss of $(643,617), or $(.32) per share. In the comparable nine months ended April 30, 2021, the Company reported a net loss of $(511,452) or $ (.25) per share. The loss in the 2022 nine months was primarily due to a decrease in fair value of marketable securities combined with increases in amortization of deferred charges of brokerage fees for new tenants, bad debt expense, payroll and insurance costs. These expenses were partially offset by an increase in revenue and decreases in real estate taxes.

 

Revenues in the current nine months increased to $15,891,978 from $15,043,749 in the comparable 2021 nine months primarily due to rental income from five new tenants and increased rents from existing tenants.

 

Real estate operating expenses in the current nine months increased to $11,063,910 from $10,882,590 in the comparable 2021 nine months primarily due to increases in amortization expense of deferred charges of brokerage fees for new tenants, insurance and payroll costs; partially offset by decreases in real estate taxes.

 

Administrative and general expenses in the current nine months increased to $4,102,753 from $3,757,064 in the comparable 2021 nine months primarily due to increases in insurance, payroll costs and bad debt expense.

 

Depreciation expense in the current nine months of $1,325,540 approximated $1,335,268 in the comparable 2021 nine months.

 

Interest expense and investment losses in the current nine months aggregated $(281,392) primarily due to a $(297,899) change in the fair value of marketable securities; partially offset by an increase in investment income and decrease in interest expense. In the nine months ended April 30, 2021, the fair value of marketable securities increased resulting in investment income exceeding interest expense by $196,721.

 

Liquidity and Capital Resources:

 

The impact of COVID-19 and the related reductions in economic activity from business disruptions and government regulations continued in the nine months ended April 30, 2022. The Company had bad debt expense of $214,350 from August 2021 to April 2022. We continue to experience volatility in the valuation of our equity investments through April 30, 2022. To the extent the COVID-19 pandemic and government regulations continue 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 November 2020, the Company leased 23,000 square feet to an office tenant at its Jowein building in Brooklyn, New York. The cost of renovations for this tenant were $501,293 and brokerage commissions were $979,000. Occupancy and rental payments commenced in January 2022.

 

In April 2021, the Company leased 1,600 square feet to a retail tenant at its Nine Bond Street Brooklyn, New York building. Rent commenced in November 2021.

 

In July 2021, the Company leased 2,270 square feet to an office tenant at its Nine Bond Street Brooklyn, New York building. Rent commenced in September 2021. To accommodate this tenant, an existing tenant surrendered 440 square feet.

 

On November 24, 2021, a tenant who occupies 5,350 square feet of retail space at the Company’s Nine Bond Street building in Brooklyn, New York exercised their option to terminate their lease effective May 31, 2022. The annual loss in rental income will approximate $320,000 per annum.

 

-19-

Index 

 

In January 2022, the company leased 500 square feet at its Jamaica, New York building. Rent commenced in January 2022.

 

In April 2022, the Company leased 14,100 square feet to an office tenant for a term of ten years at its Nine Bond Street Brooklyn, New York building. Rent commenced in June 2022. To accommodate this new tenant, an existing tenant who is on a month-to-month lease surrendered 10,788 square feet. The tenant surrendering space will continue to occupy 46,421 square feet at these premises on a month-to-month lease.

 

Cash Flows From Operating Activities:

 

Accounts Payable and Accrued Expenses: The Company had a balance due on April 30, 2022 for brokerage commissions of $709,299

 

Beginning in March 2020 and continuing through April 2022, 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 regulations. The effects of COVID-19 on our tenants have been reflected in our allowance for credit losses for accounts receivable.

 

From August 2021 through April 2022, the Company had bad debt expense of $214,350. We continue to experience volatility in the valuation of our equity investments through April 30, 2022. To the extent the COVID-19 pandemic continues to disrupt economic activity nationally and in New York, New York, 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.

 

-20-

Index 

 

Cash Flows From Investing Activities:

 

During the nine months ended April 30, 2022, the Company had expenditures of $92,941 for steel work at its Jowein building in Brooklyn, New York. During this period, the Company also had expenditures of $161,337 for renovations at its 9 Bond Street building in Brooklyn, New York, and $1,050,680 at its Fishkill, New York building including:

 

1)$241,587 to resurface the parking lot. The total cost was $342,316 and was completed in August 2021.
   
2)$240,908 for canopy work.
   
3)$421,919 for elevator modernization. The total cost is $892,000 and is anticipated to be completed in May 2023.
   
4)$85,649 for lighting.
   
5)Stonefront and sidewalk expenditures of $60,617.

 

Related Party Transactions:

 

The Company has two operating leases with Weinstein Enterprises, Inc. (“Landlord”), an affiliated company, principally owned by the Chairman of the Board of Directors of both the Company and Landlord. One lease is for building, improvements, and land located at Jamaica Avenue at 169th Street, Jamaica, New York. Another lease is for premises located at 504-506 Fulton Street, Brooklyn, New York.

 

Rent payments and expense relating to these two operating leases with Landlord follow:

 

   Rent Payments   Rent Payments   Rent Expense   Rent Expense 
   Three Months Ended   Nine Months Ended   Three Months Ended   Nine Months Ended 
   April 30   April 30   April 30   April 30 
Property  2022   2021   2022   2021   2022   2021   2022   2021 
Jamaica Avenue at 169th Street  $156,250   $156,250   $468,750   $468,750   $379,359   $379,359   $1,138,078   $1,138,078 
504-506 Fulton Street   90,564    90,564    271,692    271,692    87,609    87,609    262,828    262,828 
Total  $246,814   $246,814   $740.442   $740,442   $466,968   $466,968   $1,400,906   $1,400,906 

 

The following summarizes assets and liabilities related to these two operating leases:

 

   Right-Of-Use        
   Assets   Liabilities    
   April 30   July 31   April 30   July 31    
Property  2022   2021   2022   2021   Expiration Date
Jamaica Avenue at 169th Street  $11,793,423   $12,842,642   $4,579,558   $4,959,450   May 31, 2030
504-506 Fulton Street   2,650,730    2,831,134    2,757,042    2,946,306   April 30, 2031
Total  $14,444,153   $15,673,776   $7,336,600   $7,905,756    

 

-21-

Index 

 

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, terrorist attacks, or civil unrest effecting 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. On April 30, 2022, the Company had fixed-rate debt of $6,755,729.

 

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.

 

-22-

Index 

 

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 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, 2021.

 

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:

 

        Sequentially
Exhibit       Numbered
Number   Exhibit   Page
(3)   Articles of Incorporation and Bylaws.   N/A
(3ii)   By-laws, as amended — incorporated by reference   N/A
(10i)   Material contracts - Employment agreements   N/A
(10ii)   Material contracts - Retirement plan   N/A
(11)   Statement re computation of per share earnings   N/A
(12)   Statement re computation of ratios   N/A
(14)   Code of ethics   N/A
(15)   Letter re unaudited interim financial information.   N/A
(18)   Letter re change in accounting principles.   N/A
(19)   Report furnished to security holders.   N/A
(31)   Additional exhibits - Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.    
    (31.1) Chief Executive Officer    
    (31.2) Chief Financial Officer    
(32)   Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.    
(95)   Mine safety disclosure   N/A

 

EX-101.INS   XBRL Instance Document. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
EX-101.SCH   XBRL Taxonomy Extension Schema Document
EX-101.CAL   XBRL Taxonomy Extension Calculation Linkbase Document
EX-101.DEF   Definition Taxonomy Extension Linkbase Document
EX-101.LAB   XBRL Taxonomy Extension Label Linkbase Document
EX-101.PRE   XBRL Taxonomy Extension Presentation Linkbase Document
EX-104   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

(b) Report on Form 8-K – Two reports on Form 8-K were filed by the registrant for the period ended April 30, 2022.

Item reported:

The Company reported its financial results for the three months ended January 31, 2022
Date of report filed – March 10, 2022.

 

The Company reported the election of Ms. Jennifer L. Caruso to the Board and her appointment to the Investment Advisory Committee of the Board.
Date of report filed – March 16, 2022.

 

-23-

Index 

 

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 9, 2022   Lloyd J. Shulman
    Lloyd J. Shulman
    President
    Chief Executive Officer
 
Date:  June 9, 2022   Mark S. Greenblatt
    Mark S. Greenblatt
    Vice President
    Chief Financial Officer

 

-24-