DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - shares | 9 Months Ended | |
Apr. 30, 2019 | Jun. 06, 2019 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | MAYS J W INC | |
Entity Central Index Key | 0000054187 | |
Document Type | 10-Q | |
Document Period End Date | Apr. 30, 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Trading Symbol | mays | |
Current Fiscal Year End Date | --07-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Document Fiscal Year Focus | 2019 | |
Entity Common Stock, Shares Outstanding | 2,015,780 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Apr. 30, 2019 | Jul. 31, 2018 |
ASSETS | ||
Property and Equipment - Net (Notes 5 and 6) | $ 52,443,167 | $ 50,792,984 |
Current Assets: | ||
Cash and cash equivalents (Notes 4 and 9) | 5,330,262 | 5,255,073 |
Receivables (Note 4) | 146,497 | 252,304 |
Income taxes refundable | 7,683 | 8,792 |
Restricted cash | 82,643 | 100,789 |
Prepaid expenses | 966,681 | 1,951,132 |
Total current assets | 6,533,766 | 7,568,090 |
Other Assets: | ||
Deferred charges | 3,750,454 | 3,228,162 |
Less: accumulated amortization | 1,593,135 | 1,369,445 |
Net | 2,157,319 | 1,858,717 |
Restricted cash | 1,551,360 | 1,523,761 |
Unbilled receivables (Notes 4 and 7) | 1,759,295 | 1,677,093 |
Marketable securities (Notes 3 and 4) | 3,427,716 | 3,141,828 |
Total other assets | 8,895,690 | 8,201,399 |
TOTAL ASSETS | 67,872,623 | 66,562,473 |
Long-Term Liabilities: | ||
Mortgage payable (Note 5) | 5,264,285 | |
Security deposits payable | 1,269,981 | 1,242,382 |
Deferred income taxes (Note 1) | 4,888,000 | 4,506,000 |
Total long-term liabilities | 6,157,981 | 11,012,667 |
Current Liabilities: | ||
Accounts payable | 36,300 | 74,205 |
Payroll and other accrued liabilities | 2,336,562 | 2,104,359 |
Other taxes payable | 6,954 | 8,240 |
Current portion of mortgage payable (Note 5) | 5,287,770 | 168,501 |
Current portion of security deposits payable | 83,143 | 101,289 |
Total current liabilities | 7,750,729 | 2,456,594 |
TOTAL LIABILITIES | 13,908,710 | 13,469,261 |
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 |
Unrealized gain on marketable securities - net of deferred taxes of $313,000 at July 31, 2018 | 487,136 | |
Retained earnings | 49,727,223 | 48,369,386 |
Stockholders' Equity before Treasury Stock | 55,251,765 | 54,381,064 |
Less common stock held in treasury, at cost - 162,517 shares at April 30, 2019 and at July 31, 2018 (Note 10) | 1,287,852 | 1,287,852 |
Total shareholders' equity | 53,963,913 | 53,093,212 |
Contingencies (Note 12) | ||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 67,872,623 | $ 66,562,473 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Apr. 30, 2019 | Jul. 31, 2018 |
Common stock, par value | $ 1 | $ 1 |
Common stock, shares authorized | 5,000,000 | 5,000,000 |
Common stock, shares issued | 2,178,297 | 2,178,297 |
Treasury stock, shares | 162,517 | 162,517 |
Unrealized Gain on Available-for-sale Securities - Net of Deferred Taxes [Member] | ||
Unrealized gain (loss) on available-for-sale securities, deferred taxes (benefit) | $ 313,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Revenues | ||||
Rental income (Notes 1, 4 and 7) | $ 5,091,673 | $ 4,854,910 | $ 15,182,598 | $ 14,431,671 |
Recovery of real estate taxes | 8,315 | 53,341 | ||
Total revenues | 5,099,988 | 4,854,910 | 15,235,939 | 14,431,671 |
Expenses | ||||
Real estate operating expenses | 2,844,624 | 2,918,858 | 8,591,284 | 8,491,805 |
Administrative and general expenses | 1,135,750 | 1,062,316 | 4,184,557 | 3,433,154 |
Depreciation (Note 6) | 474,761 | 443,697 | 1,414,045 | 1,311,386 |
Total expenses | 4,455,135 | 4,424,871 | 14,189,886 | 13,236,345 |
Income from operations before investment income, interest expense and income taxes | 644,853 | 430,039 | 1,046,053 | 1,195,326 |
Investment income and interest expense: | ||||
Investment income (Note 3) | 27,377 | 15,909 | 184,488 | 90,131 |
Change in fair value of marketable securities (Notes 1 and 3) | 285,426 | 143,209 | ||
Interest expense (Notes 5 and 9) | (31,721) | (44,776) | (121,049) | (191,961) |
Total investment income and interest expense | 281,082 | (28,867) | 206,648 | (101,830) |
Income from operations before income taxes | 925,935 | 401,172 | 1,252,701 | 1,093,496 |
Income taxes provided (benefit) | 270,000 | 83,000 | 382,000 | (2,074,000) |
Net income | 655,935 | 318,172 | 870,701 | 3,167,496 |
Retained earnings, beginning of period | 49,071,288 | 48,244,569 | 48,369,386 | 45,395,245 |
Reclassification of unrealized gain on investments to retained earnings (Note 1) | 487,136 | |||
Retained earnings, end of period | $ 49,727,223 | $ 48,562,741 | $ 49,727,223 | $ 48,562,741 |
Income per common share (Note 2) | $ .32 | $ 0.16 | $ .43 | $ 1.57 |
Dividends per share | ||||
Average common shares outstanding | 2,015,780 | 2,015,780 | 2,015,780 | 2,015,780 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 655,935 | $ 318,172 | $ 870,701 | $ 3,167,496 |
Unrealized gain (loss) on available-for-sale securities: | ||||
Unrealized gains (losses) arising during the period, net of taxes (benefit) of ($27,037) for the three months ended April 30, 2018 and $43,963 for the nine months ended April 30, 2018 | (117,213) | 57,969 | ||
Reclassification adjustment for net gains included in net income, net of taxes of $7,770 for the three months ended April 30, 2018 and $7,963 for the nine months ended April 30, 2018 | (17,630) | (15,457) | ||
Unrealized gain (losses) on available-for-sale securities, net of taxes | (134,843) | 42,512 | ||
Comprehensive income | $ 655,935 | $ 183,329 | $ 870,701 | $ 3,210,008 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended |
Apr. 30, 2018 | Apr. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Unrealized holding gains arising during the period, tax | $ (27,037) | $ 43,963 |
Reclassification adjustment for net gains included in net income, tax | $ 7,770 | $ 7,963 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) | Common Stock | Additional Paid In Capital | Unrealized Gain on Marketable securities [Member] | Retained Earnings | Common Stock Held in Treasury | Total |
Balance at Jul. 31, 2017 | $ 2,178,297 | $ 3,346,245 | $ 368,476 | $ 45,395,245 | $ 1,287,852 | $ 50,000,411 |
Increase in unrealized gains on marketable securities | 42,512 | 42,512 | ||||
Net income/loss | 3,167,496 | 3,167,496 | ||||
Balance at Apr. 30, 2018 | 2,178,297 | 3,346,245 | 410,988 | 48,562,741 | 1,287,852 | 53,210,419 |
Increase in unrealized gains on marketable securities | 76,148 | 76,148 | ||||
Net income/loss | (193,355) | (193,355) | ||||
Balance at Jul. 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 (Note 1) | (487,136) | 487,136 | ||||
Net income/loss | 870,701 | 870,701 | ||||
Balance at Apr. 30, 2019 | $ 2,178,297 | $ 3,346,245 | $ 49,727,223 | $ 1,287,852 | $ 53,963,913 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Cash Flows From Operating Activities: | ||
Net income | $ 870,701 | $ 3,167,496 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 1,414,045 | 1,311,386 |
Amortization of deferred charges | 223,690 | 222,600 |
Deferred finance costs included in interest expense | 17,156 | 17,154 |
Net realized and unrealized (gain) loss on sale of marketable securities | (189,625) | 805 |
Other assets - unbilled receivables | (82,202) | 204,016 |
Other assets - deferred charges | (522,292) | (20,488) |
Deferred income taxes | 382,000 | (2,063,000) |
Changes in: | ||
Receivables | 105,807 | 101,563 |
Income taxes refundable | 1,109 | (40,369) |
Prepaid expenses | 984,451 | 721,673 |
Accounts payable | (37,905) | (60,703) |
Payroll and other accrued liabilities | 232,203 | (660,481) |
Other taxes payable | (1,286) | (1,835) |
Cash provided by operating activities | 3,397,852 | 2,899,817 |
Cash Flows From Investing Activities: | ||
Acquisition of property and equipment | (3,064,228) | (1,831,066) |
Marketable securities: | ||
Receipts from sales | 219,744 | 268,857 |
Payments for purchases | (316,007) | (98,340) |
Cash (used) by investing activities | (3,160,491) | (1,660,549) |
Cash Flows From Financing Activities: | ||
Increase - security deposits payable | 9,453 | 297,653 |
Mortgage and other debt payments | (162,172) | (121,238) |
Cash provided (used) by financing activities | (152,719) | 176,415 |
Increase in cash and cash equivalents | 84,642 | 1,415,683 |
Cash, cash equivalents and restricted cash at beginning of period | 6,879,623 | 6,676,929 |
Cash, cash equivalents and restricted cash at end of period (Note 9) | $ 6,964,265 | $ 8,092,612 |
Accounting Records and Use of E
Accounting Records and Use of Estimates | 9 Months Ended |
Apr. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Accounting Records and Use of Estimates | 1. 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, 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, 2018 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, 2018. 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, 2019. 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. To the extent the estimated annual effective tax rate changes during a quarter, see below, the effect of the change on prior quarters is included in tax expense for the current quarter. Revenue Recognition All of the real estate owned by the Company is held for leasing to tenants except for a small portion used for Company offices. 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. Contingent rental income is recorded when earned and is not based on tenant revenue. 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. lf 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. Taxes On December 22, 2017, the United States gov ernment (“U.S.”) enacted significant changes to the U.S. tax law following the passage and signing of H.R.1, “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018” (the “Tax Act”) (previously known as “The Tax Cuts and Jobs Act”). The Tax Act included significant changes to existing tax law, including a permanent reduction to the U.S. federal corporate income tax rate from 34% to 21%, a one-time repatriation tax on deferred foreign income, deductions, credits and business related exclusions. The permanent reduction to the U.S. federal corporate income tax rate from 34% to 21% was effective January 1, 2018 (the “Effective Date”). The Company has a federal net operating loss carryforward approximating $4,078,000 as of July 31, 2018 available to offset future taxable income. As of July 31, 2018, the Company had unused state and city net operating loss carryforwards of approximately $10,107,000 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. During the quarter ended July 31, 2018, the Company recorded a state deferred tax asset, deferred tax liability and deferred taxes on unrealized gain on marketable securities in the amounts of $790,000, $1,430,000 and $53,000, respectively, resulting in a state deferred tax expense of $587,000. 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 expense. 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. The decrease in the effective tax rate for the nine months ended April 30, 2019 as compared with the nine months ended April 30, 2018 was primarily attributable to the permanent reduction in federal tax rates from 34% to 21%, partially offset by New York State taxes. Recently adopted accounting standards: In May 2014, the Financial Accounting Standards Board (“FASB”), issued Accounting Standards Update (“ASU”) 2014 -09 “Revenue from Contracts with Customers” (“ASU 2014 - 09”) establishing ASC Topic 606 Revenue from Contracts with Customers. ASU 2014-09 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. ASU 2014-09 requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. ASU 2014-09 is effective for interim and annual reporting in fiscal years that begin after December 15, 2016. ASU 2015-14 extended the implementation date for fiscal years beginning after December 31, 2017. Subsequent to the issuance of ASU 2014-09, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Consid erations (Reporting Revenue Gross versus Net)”, ASU No. 2016 - 10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing”, ASU No. 2016 -12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients”, and ASU No. 2016-20, "Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers." The additional ASU's clarified certain provisions of ASU 2014-09 in response to recommendations from the Transition Resource Group established by the FASB and have the same effective date and transition requirements as ASU 2014-09. We adopted these standards effective August 1, 2018 using the modified retrospective approach, which allows us to apply the new standard to all existing contracts not yet completed as of the effective date and record a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption, however there was no cumulative-effect required to be recognized in our retained earnings as the date of adoption. The adoption of this standard did not have a material impact on our consolidated financial statements. 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 2018, the FASB issued ASU No. 2018-02, “ Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ” , to address a specific consequence of the Tax Act by allowing a reclassification from accumulated other comprehensive income (loss) to retained earnings for stranded tax effects resulting from the Tax Act’s reduction of the U.S. federal corporate income tax rate. The standard is effective for all entities for annual periods beginning after December 15, 2018, with early adoption permitted, and is to be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Act is recognized. The Company early adopted this ASU effective August 1, 2018 and applied this new guidance in the period of adoption. As a result, $92,000 of income taxes stranded in accumulated other comprehensive income (loss) was classified to retained earnings. The ASU also requires the Company to disclose its policy on accounting for income tax effects in accumulated other comprehensive income (loss). In general, the Company applies the individual item approach with respect to marketable securities. In August 2018, the U.S. Securities and Exchange Commission ("SEC") adopted final rules under SEC Release No. 33-10532, Disclosure Update and Simplification, amending and expanding certain disclosure requirements. The rules require, among other things, that registrants include in their interim financial statements a reconciliation of changes in shareholders' equity in the notes or as a separate statement that reconciles the beginning balance to the ending balance of each caption in shareholders' equity for each period for which an income statement is required to be filed. The Company applied the new SEC disclosure requirements to the Consolidated Statements of Changes in Shareholders' Equity in the third quarter of fiscal 2019 on a retrospective basis. Recently issued accounting standards not yet adopted: 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. Lessor accounting remains similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition standard (ASU 2014-09). ASU 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. 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. Entities will be required to recognize and measure leases as of the earliest period presented using a modified retrospective approach. 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 ap ply 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 will be effective for the Company for the fiscal year beginning August 1, 2019, with early adoption permitted, and the Company expects to use the cumulative-effect adjustment approach in the year of adoption. The adoption of this guidance is expected to result in an increase in assets and liabilities on the Company’s balance sheet, with no material impact on the statement of income. However, the ultimate impact of adopting this ASU will depend on the Company’s lease portfolio as of the adoption date. |
Income Per Share of Common Stoc
Income Per Share of Common Stock | 9 Months Ended |
Apr. 30, 2019 | |
Earnings Per Share [Abstract] | |
Income Per Share of Common Stock | 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, 2019 and April 30, 2018. |
Marketable Securities
Marketable Securities | 9 Months Ended |
Apr. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Marketable Securities | 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. Prior to August 1, 2018, unrealized gains and losses resulting from changes in the fair value of these securities were included in “other comprehensive income” . Effective August 1, 2018, the changes in the fair value of these securities are recognized in current period earnings in accordance with ASC 825. 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, 2019 and July 31, 2018. 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 2019 Level 1 Level 2 Level 3 2018 Level 1 Level 2 Level 3 Assets: Marketable securities $ 3,427,716 $ 3,427,716 $ – $ – $ 3,141,828 $ 3,141,828 $ – $ – As of April 30, 2019 and July 31, 2018, the Company's marketable securities were classified as follows: April 30, 2019 July 31, 2018 Gross Gross Gross Gross Unrealized Unrealized Fair Unrealized Unrealized Fair Cost Gains Losses Value Cost Gains Losses Value Noncurrent: Mutual funds $ 844,106 $ 233,546 $ – $ 1,077,652 $ 774,602 $ 237,149 $ – $ 1,011,751 Equity securities 1,640,264 709,800 – 2,350,064 1,567,089 562,988 – 2,130,077 $ 2,484,370 $ 943,346 $ – $ 3,427,716 $ 2,341,691 $ 800,137 $ – $ 3,141,828 Investment income consists of the following: Three Months Ended Nine Months Ended April 30 April 30 2019 2018 2019 2018 Gain (loss) on sale of marketable securities $ – $ 912 $ 46,415 $ (805 ) Interest income 15,025 5,737 42,466 12,488 Dividend income 12,352 9,260 95,607 78,448 Total $ 27,377 $ 15,909 $ 184,488 $ 90,131 |
Financial Instruments and Credi
Financial Instruments and Credit Risk Concentrations | 9 Months Ended |
Apr. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments and Credit Risk Concentrations | 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 18.22%, another tenant accounted for 14.40% and a third tenant accounted for 11.81% of rental income during the nine months ended April 30, 2019. The nine months ended April 30, 2018 had one tenant account for 17.70%, another tenant account for 15.33% and a third tenant account for 12.25% of rental income. No other tenant accounted for more than 10% of rental income during the same periods. |
Long-Term Debt - Mortgage
Long-Term Debt - Mortgage | 9 Months Ended |
Apr. 30, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt - Mortgage | 5. Long-Term Debt – Mortgage: April 30, 2019 July 31, 2018 Current Annual Final Due Due Due Due Interest Payment Within After Within After Rate Date One Year One Year One Year One Year Bond St. building, Brooklyn, NY 3.54% 2/1/2020 $ 5,341,439 $ – $ 168,501 $ 5,298,610 Less: Deferred financing costs 53,669 – – 34,325 Total $ 5,287,770 $ – $ 168,501 $ 5,264,285 On January 9, 2015, the Company refinanced its loan with a bank for $6,000,000, which included the outstanding balance as of January 2015 in the amount of $5,347,726 and an additional borrowing of $652,274. The loan is for a period of five years with a payment based on a twenty-five year amortization period. The interest rate for this period is fixed at 3.54% per annum. The mortgage loan is secured by the Bond Street building in Brooklyn, New York. The Company is in the process of refinancing the loan with a bank for an additional five years. |
Property and Equipment - at cos
Property and Equipment - at cost | 9 Months Ended |
Apr. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment - at cost | 6. Property and Equipment – at cost: April 30 July 31 2019 2018 Property: Buildings and improvements $ 85,754,150 $ 82,728,826 Improvements to leased property 1,478,012 1,478,012 Land 6,067,805 6,067,805 Construction in progress 1,800,060 1,786,980 95,100,027 92,061,623 Less accumulated depreciation 42,769,109 41,382,962 Property - net 52,330,918 50,678,661 Fixtures and equipment and other: Fixtures and equipment 144,545 144,545 Other fixed assets 164,066 205,619 308,611 350,164 Less accumulated depreciation 196,362 235,841 Fixtures and equipment and other - net 112,249 114,323 Property and equipment - net $ 52,443,167 $ 50,792,984 Construction in progress includes: April 30 July 31 2019 2018 Building improvements at 9 Bond Street in Brooklyn, NY $ 292,730 $ 102,640 Building improvements at 25 Elm Place in Brooklyn, NY 403,881 153,010 Building improvements at Jamaica, NY building 303,975 779,399 Building improvements at Fishkill, NY building 799,474 751,931 $ 1,800,060 $ 1,786,980 The Company has committed to construct four new elevators in the Company’s Fishkill, New York building. The cost will be approximately $1,800,000 and is anticipated to be completed in the fall of 2019. |
Unbilled Receivables and Rental
Unbilled Receivables and Rental Income | 9 Months Ended |
Apr. 30, 2019 | |
Unbilled Receivables And Rental Income | |
Unbilled Receivables and Rental Income | 7. 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. |
Employees' Retirement Plan
Employees' Retirement Plan | 9 Months Ended |
Apr. 30, 2019 | |
Retirement Benefits [Abstract] | |
Employees' Retirement Plan | 8. Employees' Retirement Plan: The Company sponsors a noncontributory Money Purchase Plan covering substantially all of its non-union employees. Operations were charged $106,580 and $359,353 as contributions to the Plan for the three and nine months ended April 30, 2019, respectively, and $82,308 and $311,145 as contributions to the plan for the three and nine months ended April 30, 2018, 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 $16,327 and $45,786 for the three and nine months ended April 30, 2019, respectively, and $14,963 and $49,119 as contributions to the plan for the three and nine months ended April 30, 2018, 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. 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, 2017 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, 2017: Yes Rehabilitation plan implemented: Yes Employer subject to surcharge: Yes Contract expiration date: November 30, 2019 For the plan years 2017- 2019, 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, 2019, with a union covering rates of pay, hours of employment and other conditions of employment for approximately 24% of its employees. The Company considers that its labor relations with its employees and union are good. |
Cash Flow Information
Cash Flow Information | 9 Months Ended |
Apr. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash Flow Information | 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 (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 2019 2018 Cash and cash equivalents $ 5,330,262 $ 6,478,050 Restricted cash, tenant security deposits 1,342,124 1,322,850 Restricted cash, escrow 258,399 258,232 Restricted cash, other 33,480 33,480 $ 6,964,265 $ 8,092,612 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 2019 2018 Interest paid, net of capitalized interest of $41,024 (2019) and $23,609 (2018) $ 104,802 $ 175,718 Income taxes paid $ – $ 31,994 |
Common Stock
Common Stock | 9 Months Ended |
Apr. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Common Stock | 10. Common Stock: The Company has one class of common stock with identical voting rights and rights to liquidation. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 9 Months Ended |
Apr. 30, 2019 | |
Accumulated Other Comprehensive Income [Abstract] | |
Accumulated Other Comprehensive Income | 11. Accumulated Other Comprehensive Income: The only component of accumulated other comprehensive income is unrealized gain (loss) on marketable securities. A summary of the changes in accumulated other comprehensive income for the three and nine months ended April 30, 2019 and 2018 is as follows: Three Months Ended Nine Months Ended April 30 April 30 2019 2018 2019 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Beginning balance, net of tax effect $ – $ 545,831 $ 487,136 $ 368,476 Other comprehensive income, net of tax effect: Unrealized gain on marketable securities – (144,250 ) – 101,932 Tax effect – 27,037 – (43,963 ) Unrealized gain on marketable securities, net of tax effect – (117,213 ) – 57,969 Unrealized loss on marketable securities reclassified to retained earnings – (25,400 ) (800,136 ) (23,420 ) Tax effect – 7,770 313,000 7,963 – (17,630 ) (487,136 ) (15,457 ) Ending balance, net of tax effect $ – $ 410,988 $ – $ 410,988 A summary of the line items in the Condensed Consolidated Statements of Income and Retained Earnings affected by the amounts reclassified from accumulated other comprehensive income is as follows: Details about accumulated other comprehensive income components Affected line item in the statement where net income is presented ---------------------------------------------------- --------------------------------------------- Other comprehensive income reclassified tax effect Investment income |
Contingencies
Contingencies | 9 Months Ended |
Apr. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | 12. 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 Duchess. 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. |
Accounting Records and Use of_2
Accounting Records and Use of Estimates (Policies) | 9 Months Ended |
Apr. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Accounting Records and Use of Estimates | 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, 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, 2018 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, 2018. 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, 2019. 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. To the extent the estimated annual effective tax rate changes during a quarter, see below, the effect of the change on prior quarters is included in tax expense for the current quarter. |
Revenue Recognition | Revenue Recognition All of the real estate owned by the Company is held for leasing to tenants except for a small portion used for Company offices. 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. Contingent rental income is recorded when earned and is not based on tenant revenue. 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. lf 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. |
Taxes | Taxes On December 22, 2017, the United States gov ernment (“U.S.”) enacted significant changes to the U.S. tax law following the passage and signing of H.R.1, “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018” (the “Tax Act”) (previously known as “The Tax Cuts and Jobs Act”). The Tax Act included significant changes to existing tax law, including a permanent reduction to the U.S. federal corporate income tax rate from 34% to 21%, a one-time repatriation tax on deferred foreign income, deductions, credits and business related exclusions. The permanent reduction to the U.S. federal corporate income tax rate from 34% to 21% was effective January 1, 2018 (the “Effective Date”). The Company has a federal net operating loss carryforward approximating $4,078,000 as of July 31, 2018 available to offset future taxable income. As of July 31, 2018, the Company had unused state and city net operating loss carryforwards of approximately $10,107,000 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. During the quarter ended July 31, 2018, the Company recorded a state deferred tax asset, deferred tax liability and deferred taxes on unrealized gain on marketable securities in the amounts of $790,000, $1,430,000 and $53,000, respectively, resulting in a state deferred tax expense of $587,000. 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 expense. 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. The decrease in the effective tax rate for the nine months ended April 30, 2019 as compared with the nine months ended April 30, 2018 was primarily attributable to the permanent reduction in federal tax rates from 34% to 21%, partially offset by New York State taxes. |
Recently adopted accounting standards | Recently adopted accounting standards: In May 2014, the Financial Accounting Standards Board (“FASB”), issued Accounting Standards Update (“ASU”) 2014 -09 “Revenue from Contracts with Customers” (“ASU 2014 - 09”) establishing ASC Topic 606 Revenue from Contracts with Customers. ASU 2014-09 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. ASU 2014-09 requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. ASU 2014-09 is effective for interim and annual reporting in fiscal years that begin after December 15, 2016. ASU 2015-14 extended the implementation date for fiscal years beginning after December 31, 2017. Subsequent to the issuance of ASU 2014-09, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Consid erations (Reporting Revenue Gross versus Net)”, ASU No. 2016 - 10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing”, ASU No. 2016 -12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients”, and ASU No. 2016-20, "Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers." The additional ASU's clarified certain provisions of ASU 2014-09 in response to recommendations from the Transition Resource Group established by the FASB and have the same effective date and transition requirements as ASU 2014-09. We adopted these standards effective August 1, 2018 using the modified retrospective approach, which allows us to apply the new standard to all existing contracts not yet completed as of the effective date and record a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption, however there was no cumulative-effect required to be recognized in our retained earnings as the date of adoption. The adoption of this standard did not have a material impact on our consolidated financial statements. 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 2018, the FASB issued ASU No. 2018-02, “ Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ” , to address a specific consequence of the Tax Act by allowing a reclassification from accumulated other comprehensive income (loss) to retained earnings for stranded tax effects resulting from the Tax Act’s reduction of the U.S. federal corporate income tax rate. The standard is effective for all entities for annual periods beginning after December 15, 2018, with early adoption permitted, and is to be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Act is recognized. The Company early adopted this ASU effective August 1, 2018 and applied this new guidance in the period of adoption. As a result, $92,000 of income taxes stranded in accumulated other comprehensive income (loss) was classified to retained earnings. The ASU also requires the Company to disclose its policy on accounting for income tax effects in accumulated other comprehensive income (loss). In general, the Company applies the individual item approach with respect to marketable securities. In August 2018, the U.S. Securities and Exchange Commission ("SEC") adopted final rules under SEC Release No. 33-10532, Disclosure Update and Simplification, amending and expanding certain disclosure requirements. The rules require, among other things, that registrants include in their interim financial statements a reconciliation of changes in shareholders' equity in the notes or as a separate statement that reconciles the beginning balance to the ending balance of each caption in shareholders' equity for each period for which an income statement is required to be filed. The Company applied the new SEC disclosure requirements to the Consolidated Statements of Changes in Shareholders' Equity in the third quarter of fiscal 2019 on a retrospective basis. |
Recently issued accounting standards not yet adopted | Recently issued accounting standards not yet adopted: 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. Lessor accounting remains similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition standard (ASU 2014-09). ASU 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. 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. Entities will be required to recognize and measure leases as of the earliest period presented using a modified retrospective approach. 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 ap ply 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 will be effective for the Company for the fiscal year beginning August 1, 2019, with early adoption permitted, and the Company expects to use the cumulative-effect adjustment approach in the year of adoption. The adoption of this guidance is expected to result in an increase in assets and liabilities on the Company’s balance sheet, with no material impact on the statement of income. However, the ultimate impact of adopting this ASU will depend on the Company’s lease portfolio as of the adoption date. |
Marketable Securities (Tables)
Marketable Securities (Tables) | 9 Months Ended |
Apr. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of financial assets measured at fair value on recurring basis | 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 2019 Level 1 Level 2 Level 3 2018 Level 1 Level 2 Level 3 Assets: Marketable securities $ 3,427,716 $ 3,427,716 $ – $ – $ 3,141,828 $ 3,141,828 $ – $ – |
Schedule of classified marketable securities | As of April 30, 2019 and July 31, 2018, the Company's marketable securities were classified as follows: April 30, 2019 July 31, 2018 Gross Gross Gross Gross Unrealized Unrealized Fair Unrealized Unrealized Fair Cost Gains Losses Value Cost Gains Losses Value Noncurrent: Mutual funds $ 844,106 $ 233,546 $ – $ 1,077,652 $ 774,602 $ 237,149 $ – $ 1,011,751 Equity securities 1,640,264 709,800 – 2,350,064 1,567,089 562,988 – 2,130,077 $ 2,484,370 $ 943,346 $ – $ 3,427,716 $ 2,341,691 $ 800,137 $ – $ 3,141,828 |
Schedule of investment income | Investment income consists of the following: Three Months Ended Nine Months Ended April 30 April 30 2019 2018 2019 2018 Gain (loss) on sale of marketable securities $ – $ 912 $ 46,415 $ (805 ) Interest income 15,025 5,737 42,466 12,488 Dividend income 12,352 9,260 95,607 78,448 Total $ 27,377 $ 15,909 $ 184,488 $ 90,131 |
Long-Term Debt - Mortgage (Tabl
Long-Term Debt - Mortgage (Tables) | 9 Months Ended |
Apr. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | April 30, 2019 July 31, 2018 Current Annual Final Due Due Due Due Interest Payment Within After Within After Rate Date One Year One Year One Year One Year Bond St. building, Brooklyn, NY 3.54% 2/1/2020 $ 5,341,439 $ – $ 168,501 $ 5,298,610 Less: Deferred financing costs 53,669 – – 34,325 Total $ 5,287,770 $ – $ 168,501 $ 5,264,285 |
Property and Equipment - at c_2
Property and Equipment - at cost (Tables) | 9 Months Ended |
Apr. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | April 30 July 31 2019 2018 Property: Buildings and improvements $ 85,754,150 $ 82,728,826 Improvements to leased property 1,478,012 1,478,012 Land 6,067,805 6,067,805 Construction in progress 1,800,060 1,786,980 95,100,027 92,061,623 Less accumulated depreciation 42,769,109 41,382,962 Property - net 52,330,918 50,678,661 Fixtures and equipment and other: Fixtures and equipment 144,545 144,545 Other fixed assets 164,066 205,619 308,611 350,164 Less accumulated depreciation 196,362 235,841 Fixtures and equipment and other - net 112,249 114,323 Property and equipment - net $ 52,443,167 $ 50,792,984 |
Schedule of property and equipment construction in progress | Construction in progress includes: April 30 July 31 2019 2018 Building improvements at 9 Bond Street in Brooklyn, NY $ 292,730 $ 102,640 Building improvements at 25 Elm Place in Brooklyn, NY 403,881 153,010 Building improvements at Jamaica, NY building 303,975 779,399 Building improvements at Fishkill, NY building 799,474 751,931 $ 1,800,060 $ 1,786,980 |
Cash Flow Information (Tables)
Cash Flow Information (Tables) | 9 Months Ended |
Apr. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of cash and cash equivalents and restricted 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 2019 2018 Cash and cash equivalents $ 5,330,262 $ 6,478,050 Restricted cash, tenant security deposits 1,342,124 1,322,850 Restricted cash, escrow 258,399 258,232 Restricted cash, other 33,480 33,480 $ 6,964,265 $ 8,092,612 |
Schedule of supplemental disclosure | Supplemental disclosure: Nine Months Ended April 30 2019 2018 Interest paid, net of capitalized interest of $41,024 (2019) and $23,609 (2018) $ 104,802 $ 175,718 Income taxes paid $ – $ 31,994 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Apr. 30, 2019 | |
Accumulated Other Comprehensive Income [Abstract] | |
Schedule of Accumulated Other Comprehensive Income | A summary of the changes in accumulated other comprehensive income for the three and nine months ended April 30, 2019 and 2018 is as follows: Three Months Ended Nine Months Ended April 30 April 30 2019 2018 2019 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Beginning balance, net of tax effect $ – $ 545,831 $ 487,136 $ 368,476 Other comprehensive income, net of tax effect: Unrealized gain on marketable securities – (144,250 ) – 101,932 Tax effect – 27,037 – (43,963 ) Unrealized gain on marketable securities, net of tax effect – (117,213 ) – 57,969 Unrealized loss on marketable securities reclassified to retained earnings – (25,400 ) (800,136 ) (23,420 ) Tax effect – 7,770 313,000 7,963 – (17,630 ) (487,136 ) (15,457 ) Ending balance, net of tax effect $ – $ 410,988 $ – $ 410,988 |
Accounting Records and Use of_3
Accounting Records and Use of Estimates (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | Jul. 31, 2018 | |
Operating Loss Carryforwards [Line Items] | |||||
Period over which state capital-based tax will be phased out | 7 years | ||||
Deferred tax liabilities | $ 1,430,000 | ||||
State deferred tax asset | 790,000 | ||||
Deferred taxes unrealized gain (loss) on available-for-sale securities | 53,000 | ||||
Corporate income tax | 21.00% | 34.00% | 21.00% | 34.00% | |
Deferred Income Tax | $ 587,000 | $ 587,000 | |||
Unrealized gain on marketable securities reclassified to retained earnings, net of tax effect | $ 17,630 | 487,136 | $ 15,457 | ||
Reclassification of income taxes stranded in accumulated other comprehensive income (loss) to retained earnings | $ 92,000 | ||||
Domestic Tax Authority [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Operating loss carryforwards | 4,078,000 | ||||
State and Local Jurisdiction [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Operating loss carryforwards | 10,107,000 | ||||
City Jurisdiction [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Operating loss carryforwards | $ 8,274,000 |
Income Per Share of Common St_2
Income Per Share of Common Stock (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Leases [Abstract] | ||||
Average common shares outstanding | 2,015,780 | 2,015,780 | 2,015,780 | 2,015,780 |
Marketable Securities (Schedule
Marketable Securities (Schedule of financial assets measured at fair value on recurring basis) (Details) - USD ($) | Apr. 30, 2019 | Jul. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 3,427,716 | $ 3,141,828 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 3,427,716 | 3,141,828 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | ||
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities |
Marketable Securities (Schedu_2
Marketable Securities (Schedule of classified marketable securities) (Details) - USD ($) | Apr. 30, 2019 | Jul. 31, 2018 |
Marketable Securities [Line Items] | ||
Fair Value | $ 3,427,716 | $ 3,141,828 |
Noncurrent [Member] | ||
Marketable Securities [Line Items] | ||
Fair Value | 3,427,716 | 3,141,828 |
Gross Unrealized Gains | 943,346 | 800,137 |
Gross Unrealized Losses | ||
Cost | 2,484,370 | 2,341,691 |
Noncurrent [Member] | Mutual Funds [Member] | ||
Marketable Securities [Line Items] | ||
Fair Value | 1,077,652 | 1,011,751 |
Gross Unrealized Gains | 233,546 | 237,149 |
Gross Unrealized Losses | ||
Cost | 844,106 | 774,602 |
Noncurrent [Member] | Corporate Equity Securities [Member] | ||
Marketable Securities [Line Items] | ||
Fair Value | 2,350,064 | 2,130,077 |
Gross Unrealized Gains | 709,800 | 562,988 |
Gross Unrealized Losses | ||
Cost | $ 1,640,264 | $ 1,567,089 |
Marketable Securities (Schedu_3
Marketable Securities (Schedule of investment income) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Gain (loss) on sale of marketable securities | $ 912 | $ 46,415 | $ (805) | |
Interest income | 15,025 | 5,737 | 42,466 | 12,488 |
Dividend income | 12,352 | 9,260 | 95,607 | 78,448 |
Total | $ 27,377 | $ 15,909 | $ 184,488 | $ 90,131 |
Financial Instruments and Cre_2
Financial Instruments and Credit Risk Concentrations (Details) - tenants | 9 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Concentration Risk [Line Items] | ||
Number of tenants | 50 | |
Customer One [Member] | Rental Income [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk | 18.22% | 17.70% |
Customer Two [Member] | Rental Income [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk | 14.40% | 15.33% |
Customer Three [Member] | Rental Income [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk | 11.81% | 12.25% |
Long-Term Debt - Mortgage (Sche
Long-Term Debt - Mortgage (Schedule of long-term debt) (Details) - USD ($) | 9 Months Ended | ||
Apr. 30, 2019 | Jul. 31, 2018 | Jan. 09, 2015 | |
Less: Deferred financing costs | |||
Due After One Year, Total | $ 5,264,285 | ||
Bond St. Building Brooklyn NY Two [Member] | |||
Mortgage: | |||
Due Within One Year | 5,341,439 | 168,501 | |
Due After One Year | 5,298,610 | ||
Less: Deferred financing costs | |||
Due Within One Year | 53,669 | ||
Due After One Year | 34,325 | ||
Due Within One Year, Total | 5,287,770 | 168,501 | |
Due After One Year, Total | $ 5,264,285 | ||
Current Annual Interest Rate | 3.54% | 3.54% | |
Final Payment Date | Feb. 1, 2020 |
Long-Term Debt - Mortgage (Narr
Long-Term Debt - Mortgage (Narrative) (Details) - Bond St. Building Brooklyn NY Two [Member] - USD ($) | Jan. 09, 2015 | Apr. 30, 2019 |
Debt Instrument [Line Items] | ||
Closed bank liabilities | $ 6,000,000 | |
Additional loans | 652,274 | |
Amount outstanding | $ 5,347,726 | |
Term of loan | 5 years | |
Amortization period of loan | 25 years | |
Interest rate, percent | 3.54% | 3.54% |
Property and Equipment - at c_3
Property and Equipment - at cost (Details) - USD ($) | Apr. 30, 2019 | Jul. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment - net | $ 52,443,167 | $ 50,792,984 |
Construction in progress | 1,800,060 | 1,786,980 |
Building Improvements at 9 Bond Street in Brooklyn, NY [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Construction in progress | 292,730 | 102,640 |
Building improvements at 25 Elm Place in Brooklyn, NY [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Construction in progress | 403,881 | 153,010 |
Building improvements at Jamaica, NY building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Construction in progress | 303,975 | 779,399 |
Building improvements at Fishkill, NY building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Construction in progress | 799,474 | 751,931 |
Buildings and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 85,754,150 | 82,728,826 |
Improvements to Leased Property [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 1,478,012 | 1,478,012 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 6,067,805 | 6,067,805 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 1,800,060 | 1,786,980 |
Property [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 95,100,027 | 92,061,623 |
Less accumulated depreciation | 42,769,109 | 41,382,962 |
Property and equipment - net | 52,330,918 | 50,678,661 |
Fixtures and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 144,545 | 144,545 |
Other Fixed Assets [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 164,066 | 205,619 |
Fixtures and equipment and other [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 308,611 | 350,164 |
Less accumulated depreciation | 196,362 | 235,841 |
Property and equipment - net | 112,249 | $ 114,323 |
Cost [Member] | Fishkill, New York Property [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Construction in progress | $ 1,800 |
Employees' Retirement Plan (Det
Employees' Retirement Plan (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Retirement Benefits [Abstract] | ||||
Pension contributions | $ 106,580 | $ 82,308 | $ 359,353 | $ 311,145 |
Employer contributions | $ 16,327 | $ 14,963 | $ 45,786 | $ 49,119 |
Minimum contribution rate | 9.10% |
Cash Flow Information (Schedule
Cash Flow Information (Schedule of cash and cash equivalents and restricted cash) (Details) - USD ($) | Apr. 30, 2019 | Jul. 31, 2018 | Apr. 30, 2018 | Jul. 31, 2017 |
Supplemental Cash Flow Elements [Abstract] | ||||
Cash and cash equivalents | $ 5,330,262 | $ 5,255,073 | $ 6,478,050 | |
Restricted cash, tenant security deposits | 1,342,124 | 1,322,850 | ||
Restricted cash, escrow | 258,399 | 258,232 | ||
Restricted cash, other | 33,480 | 33,480 | ||
Cash flow information | $ 6,964,265 | $ 6,879,623 | $ 8,092,612 | $ 6,676,929 |
Cash Flow Information (Schedu_2
Cash Flow Information (Schedule of supplemental disclosure) (Details) - USD ($) | 9 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Supplemental Cash Flow Elements [Abstract] | ||
Interest paid, net of capitalized interest of $41,024 (2019) and $23,609 (2018) | $ 104,802 | $ 175,718 |
Income taxes paid | 31,994 | |
Capitalized interest | $ 41,024 | $ 23,609 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Accumulated Other Comprehensive Income [Abstract] | ||||
Beginning balance, net of tax effect | $ 545,831 | $ 487,136 | $ 368,476 | |
Other comprehensive income, net of tax effect: | ||||
Unrealized gain on marketable securities | (144,250) | 101,932 | ||
Tax effect | 27,037 | (43,963) | ||
Unrealized gain on marketable securities, net of tax effect | (117,213) | 57,969 | ||
Unrealized loss on marketable securities reclassified to retained earnings | (25,400) | (800,136) | (23,420) | |
Tax effect | 7,770 | 313,000 | 7,963 | |
Unrealized gain (loss) on marketable securities reclassified to retained earnings, net of tax effect | (17,630) | (487,136) | (15,457) | |
Ending balance, net of tax effect | $ 410,988 | $ 410,988 |
Contingencies (Details)
Contingencies (Details) | Nov. 06, 2018USD ($) |
Settled Litigation [Member] | |
Loss Contingencies [Line Items] | |
Payment of litigation settlement | $ 635,000 |