10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2016

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: 001-08594

PRESIDENTIAL REALTY CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Delaware	13-1954619
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

1430 Broadway, Suite 503

New York, NY 10018

(Address of Principal Executive Office)

Registrant’s Telephone Number, Including Area Code:  (914) 948-1300

N/A

(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 x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).

Yes x No ¨

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

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of August 15, 2016, there were 442,533 shares of Class A common stock and 3,846,147 shares of Class B common stock outstanding.

PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES 

Index to Form 10-Q

For the Quarterly Period Ended

June 30, 2016

		Page
Part I	Financial Information (Unaudited)
Item 1.	Financial Statements
	Consolidated Balance Sheets (Unaudited)	1
	Consolidated Statements of Operations (Unaudited)	2
	Consolidated Statements of Cash Flows (Unaudited)	3
	Notes to Consolidated Financial Statements (Unaudited)	4-10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	14
Item 4.	Controls and Procedures	14
Part II	Other Information
Item 1.	Legal Proceedings	15
Item 6.	Exhibits	15

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

						June 30,			December 31,
						2016			2015
						(Unaudited)
Assets
Real estate (Note 2)						$	1,169,459		$	1,118,345
Less: accumulated depreciation							626,325			602,220
Net real estate							543,134			516,125
Prepaid expenses							60,027			139,587
Other receivables (net of valuation allowance of  $1,471 in 2016 and $790 in 2015)							17,305			27,784
Cash and cash equivalents							301,056			442,922
Mortgage escrow							158,335			116,581
Other assets							8,439			5,453
Total Assets						$	1,088,296		$	1,248,452
Liabilities and Equity
Liabilities:
Mortgage payable, net of mortgage costs						$	1,583,213		$	1,590,024
Accounts payable and accrued liabilities							805,700			635,865
Other liabilities							48,578			38,841
Total Liabilities							2,437,491			2,264,730
Stockholders' Deficit:
Common stock: par value $.00001 per share
		June 30, 2016		December 31, 2015
	Class A
Authorized:			700,000		700,000
Issued:			442,533		442,533		4			4
	Class B
Authorized:			999,300,000		999,300,000
Issued:			3,846,147		3,846,147		38			38
Additional paid-in capital							3,108,471			3,108,471
Accumulated deficit							(4,457,708	)		(4,124,791	)
Total Stockholders' Deficit							(1,349,195	)		(1,016,278	)
Total Liabilities and Stockholders' Deficit						$	1,088,296		$	1,248,452

See notes to consolidated financial statements.

1

PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Revenues:
Rental	$	254,164		$	240,561		$	504,570		$	471,503
Interest on mortgages - notes receivable		-			-			-			200
Total		254,164			240,561			504,570			471,703
Costs and Expenses:
General and administrative		232,505			213,956			448,976			419,510
Rental property:
Operating expenses		131,798			131,544			283,674			284,192
Interest expense and amortization of mortgage costs		30,280			12,370			60,674			24,586
Real estate taxes		10,578			10,573			21,157			21,147
Depreciation on real estate		12,385			12,813			24,105			25,364
Total		417,546			381,256			838,586			774,799
Other Income:
Investment income		474			502			1,099			4,003
Net loss	$	(162,908	)	$	(140,193	)	$	(332,917	)	$	(299,093	)
Earnings per Common Share basic and diluted:
Net loss	$	(0.04	)	$	(0.03	)	$	(0.08	)	$	(0.07	)
Weighted Average Number of Shares Outstanding - basic and diluted		4,288,680			4,288,680			4,288,680			4,288,680

See notes to consolidated financial statements.

2

PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Six Months Ended June 30,
	2016			2015
Net Loss	$	(332,917	)	$	(299,093	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		31,971			28,203
Bad debt (recovery)		-			(5,600	)
Bad debt		681			-
Changes in assets and liabilities:
(Increase) decrease in:
Other receivables		9,798			16,734
Prepaid expenses		79,560			(2,085	)
Mortgage escrow		(41,754	)		(16,368	)
Other assets		(2,986	)		18,440
Increase (decrease) in:
Accounts payable and accrued liabilities		169,835			76,107
Other liabilities		9,737			12,612
Total adjustments		256,842			128,043
Net cash used in operating activities		(76,075	)		(171,050	)
Cash Flows from Investing Activities:
Payments received on notes receivable		-			405
Payments disbursed for capital improvements		(51,114	)		(5,157	)
Net cash used in investing activities		(51,114	)		(4,752	)
Cash Flows from Financing Activities:
Principal payments on mortgage debt		(14,677	)		(12,834	)
Net cash  used in financing activities		(14,677	)		(12,834	)
Net decrease in Cash and Cash Equivalents		(141,866	)		(188,636	)
Cash and Cash Equivalents, Beginning of period		442,922			442,613
Cash and Cash Equivalents, End of period	$	301,056		$	253,977
Supplemental cash flow information:
Interest paid in cash	$	52,481		$	21,747

See notes to consolidated financial statements.

3

PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Organization and Summary of Significant Accounting Policies

Organization

Presidential Realty Corporation (“Presidential” or the “Company”) is operated as a self-administrated, self-managed Real Estate Investment Trust (“REIT”). The Company is engaged principally in the ownership of income producing real estate. Presidential operates in a single business segment, investments in real estate related assets.

Basis of Presentation and Going Concern Considerations

For the six months ended June 30, 2016, the Company had a loss from operations. This combined with a history of operating losses and working capital deficiency, has been detrimental to our operations and could potentially affect our ability to meet our obligations and continue as a going concern. Our ability to continue as a going concern is dependent upon the successful execution of strategies to achieve profitability, and increase working capital by raising debt and/or equity. The accompanying financial statements do not include any adjustments that may result from this uncertainty.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the requirements of the Securities and Exchange Commission (“SEC”). The financial statements include all normal and recurring adjustments that are necessary for a fair presentation of the Company’s financial position and operating results.

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the requirements of the Securities and Exchange Commission (“SEC”) for interim financial information. The financial statements include all normal and recurring adjustments that are necessary for a fair presentation of the Company’s financial position and operating results. The results for such interim periods are not necessarily indicative of the results to be expected for the year. In the opinion of management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the results for the respective periods have been reflected. These consolidated financial statements and accompanying notes should be read in conjunction with the Company’s Form 10-K for the year ended December 31, 2015 filed on April 12, 2016.

Real Estate

Real estate is stated at cost. Generally, depreciation is provided on the straight-line method over the assets estimated useful lives, which range from twenty to thirty-nine years for buildings and improvements and from three to ten years for furniture and equipment. Maintenance and repairs are charged to operations as incurred and renewals and replacements are capitalized. The Company reviews each of its property investments for possible impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment of properties is determined to exist when estimated amounts recoverable through future operations on an undiscounted basis are below the properties carrying value. If a property is determined to be impaired, it is written down to its estimated fair value.

Sale of Real Estate

Presidential follows the guidance of the Property, Plant and Equipment Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) as it pertains to sales of real estate. Accordingly, the gains on certain transactions maybe deferred and recognized on the installment method until such transactions comply with the criteria for full profit recognition. At June 30, 2016 and 2015, the Company had no deferred gains.

4

PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Principles of Consolidation

The consolidated financial statements include the accounts of Presidential Realty Corporation and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated.

Rental Revenue Recognition

The Company acts as lessor under operating leases. Rental revenue is recorded on the straight-line basis from the later of the date of the commencement of the lease or the date of acquisition of the property subject to existing leases, which averages minimum rents over the terms of the leases. Certain leases require the tenants to reimburse a pro rata share of real estate taxes, utilities and maintenance costs. Recognition of rental revenue is generally discontinued when the rental is delinquent for ninety days or more, or earlier if management determines that collection is doubtful.

Allowance for Doubtful Accounts

The Company assesses the collectability of amounts due from tenants and other receivables, using indicators such as past-due accounts, the nature and age of the receivable, the payment history and the ability of the tenant or debtor to meet its payment obligations. Management’s estimate of allowances for doubtful accounts is subject to revision as these factors change. Rental revenue is recorded on the straight-line basis and rental revenue recognition is generally discontinued when the tenant in occupancy is delinquent for ninety days or more. Bad debt expense is charged for vacated tenant accounts and subsequent receipts collected for those receivables will reduce bad debt expense. As of June 30, 2016 and December 31, 2015, the allowance relating to tenant obligations was $1,471 and $790, respectively.

Net Loss Per Share

Basic net loss per share data is computed by dividing net loss by the weighted average number of shares of Class A and Class B common stock outstanding (excluding non-vested shares) during each period. Diluted net income per share is computed by dividing net income by the weighted average shares outstanding, including the dilutive effect, if any, of non-vested shares. For the three and six months ended June 30, 2016 and 2015, the weighted average shares outstanding as used in the calculation of diluted loss per share do not include 740,000, of outstanding stock options and 1,700,000 of outstanding warrants, as their inclusion would be antidilutive.

Cash

Cash includes cash on hand, cash in banks and cash in money market funds.

Management Estimates

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated balance sheets and the reported amounts of income and expense for the reporting period. Actual results could differ from those estimates.

Accounting for Stock Awards

The Company follows the guidance of ASC Topic 718 in accounting for stock-based compensation. Shares of Class B common stock granted are fully vested upon the grant date. The Company recorded the market value of any grants that were earned and vested in 2016 and 2015 to expense in each period.

Accounting for Uncertainty in Income Taxes

The Company follows the guidance of the recognition of current and deferred income tax accounts, including accrued interest and penalties, in accordance with ASC 740-10-25. Under this guidance, if the Company’s tax positions in relation to certain transactions were examined and were not ultimately upheld, the Company would be required to pay an income tax assessment and related interest. Alternatively, the Company could elect to pay a deficiency dividend to its shareholders in order to continue to qualify as a REIT and the related interest assessment to the taxing authorities.

5

PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Organization and Summary of Significant Accounting Policies (Continued)

Recent Accounting Pronouncements

In April 2015, the FASB issued ASU 2015-3, to simplify the presentation of debt issuance costs. This update requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the associated debt liability, consistent with the required presentation for debt discounts. This update is effective for interim and annual periods beginning after December 15, 2015. The Company adopted ASU 2015-03 January 1, 2016. The adoption of this standard resulted in the reclassification of $150,438 of unamortized debt issuance costs related to the Company’s mortgage loan (see Note 4b) from other assets to Mortgage payable within its consolidated balance sheets as of June 30, 2016 and December 31, 2015. Other than this reclassification, the adoption of ASU 2015-03 did not have an impact on the Company’s consolidated financial statements.

Accumulated amortization as of June 30, 2016 and December 31, 2015 was $14,750 and $6,884, respectively.

Amortization expenses of mortgage costs was $3,933 and $1,420 for the three months ended June 30, 2016 and 2015, respectively and $7,866 and $2,389 for the six months ended June 30, 2016 and 2015, respectively, which is included in interest expense.

In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASU 2016-02 supersedes the previous leases standard, Leases (Topic 840). The standard is effective on January 1, 2019, with early adoption permitted. The Company is currently in the process of evaluating the impact the adoption of ASU 2016-02 will have on the Company’s financial position or results of operations.

2. Real Estate

Real estate is comprised of the following:

	June 30, 2016		December 31, 2015
Land	$	79,100	$	79,100
Buildings		1,039,984		995,215
Furniture and equipment		50,375		44,030
Total	$	1,169,459	$	1,118,345

Rental revenue from the Mapletree Property constituted all of the rental revenue for the Company for the three and six months ended June 30, 2016 and 2015.

6

PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3. Investments in Partnership

We received distributions from Broadway Partners Fund II in the amount of $0 and $2,750 during the six months ended June 30, 2016 and 2015, respectively. This amount is reported as investment income on the statement of operations. This investment was previously written off. The Company recognizes income received from this investment on the cash basis. The Broadway Partners Fund II was closed at the end of 2014 and we do not expect any meaningful income from this investment in the future.

4. Mortgage Debt

a. On June 8, 2012, we closed on a mortgage and line of credit for a combined total of $1,000,000 with Country Bank for Savings on the Mapletree Industrial Center (the “Mapletree Property”). The mortgage was for $500,000 at a 5% interest rate, for a term of 5 years. Thereafter the interest adjusted monthly equal to the bank’s Prime Rate, plus 1% with an interest rate floor of 5%, for a term of 15 years. We received $459,620 of net proceeds. The line of credit was for $500,000, with an interest rate of 1% over the bank’s Prime Rate. The line of credit was due on demand. Both the mortgage and the line of credit were secured by the Mapletree Property.

b. On July 28, 2015, Palmer-Mapletree LLC, a wholly-owned subsidiary of the Company entered into a Loan Agreement (the “Loan Agreement”) with Natixis Real Estate Capital LLC providing for a mortgage loan in the principal amount of $1,750,000 (the “Loan”) at an interest rate of 6.031%. $934,794 of the loan proceeds were used to repay the prior mortgage loan and line of credit on the Mapletree Property which was entered into on June 8, 2012 with Country Bank for Savings (see Note 4a). $123,757 of the Loan proceeds was set aside for capital improvements and reserves for the property. We received net proceeds of $585,125. The Loan matures on August 5, 2025 and requires monthly payments of $11,308. The outstanding balance of the loan and mortgage costs at June 30, 2016 and December 31, 2015 was $1,725,785 and $142,572, respectively and $1,740,462 and $150,438, respectively. The Company is required to maintain certain financial covenants in accordance with the loan agreement. The Company was in compliance with the covenants at June 30, 2016.

5. Income Taxes

Presidential has elected to qualify as a Real Estate Investment Trust under the Internal Revenue Code. A REIT which distributes at least 90% of its real estate investment trust taxable income to its shareholders each year by the end of the following year and which meets certain other conditions will not be taxed on that portion of its taxable income which is distributed to its shareholders.

ASC 740 prescribes a more likely than not recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken. If the Company’s tax position in relation to a transaction was not likely to be upheld, the Company would be required to record the accrual for the tax and interest thereon. As of June 30, 2016, the tax years that remain open to examination by the federal, state and local taxing authorities are the 2012 – 2016 tax years and the Company was not required to accrue any liability for those tax years.

The Company has accumulated a net operating loss carry forward of approximately $20,400,000 expiring from 2028 through 2034.

For the six months ended June 30, 2016, the Company had a tax loss of approximately $220,000 ($.05 per share), which was all ordinary loss.

For the six months ended June 30, 2015, the Company had a tax loss of approximately $187,000 ($.04 per share), which was all ordinary loss.

7

PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

6. Commitments, Contingencies and Related parties

A. Commitments and Contingencies

1) Presidential is not a party to any material legal proceedings. The Company may from time to time be a party to routine litigation incidental to the ordinary course of its business.

2) In the opinion of management, the Company’s Mapletree Property is adequately covered by insurance in accordance with normal insurance practices.

B. Related Parties

1) Executive Employment Agreements

a. Nickolas W. Jekogian –On January 8, 2014, the Company and Mr. Nicholas W. Jekogian, Chairman and Chief Executive Officer of the Company, entered into an amendment to Mr. Jekogian’s employment agreement dated November 8, 2011. The amendment provides for (i) the extension of the employment term from May 3, 2013 to December 31, 2015, (ii) continuation of Mr. Jekogian’s base salary through the balance of the term at the rate of $225,000 per annum (subject to the continued deferral of the payment of the base salary until a Capital Event), (iii) removal of the $200,000 cap on the amount of any annual bonus that might be awarded Mr. Jekogian, (iv) the issuance to Mr. Jekogian of a “Warrant” to purchase 1,700,000 shares of the Company’s Class B Common Stock in exchange for the complete cancellation of $425,000 of the deferred compensation accrued under Mr. Jekogian’s employment agreement.

Mr. Jekogian’s employment agreement, as amended, expired at December 31, 2015 but the board agreed to continue Mr. Jekogian’s employment on the same terms as the agreement until otherwise terminated by the board.

Alexander Ludwig –On January 8, 2014, the Company and Mr. Alexander Ludwig, a Director, President, Chief Operating Officer and Principal Financial Officer of the Company entered into an amendment to Mr. Ludwig’s employment agreement dated November 8, 2011. The amendment provides for (i) the extension of the employment term from May 3, 2013 to December 31, 2015, (ii) continuation of Mr. Ludwig’s base salary through the balance of the term at the rate of $225,000 per annum, (iii) removal of the $200,000 cap on the amount of any annual bonus that might be awarded Mr. Ludwig.

Mr. Ludwig’s employment agreement, as amended, expired at December 31, 2015 but the board agreed to continue Mr. Ludwig’s employment on the same terms as the agreement until otherwise terminated by the board.

2) Other liabilities

On July 28, 2015 the Company successfully refinanced the Mapletree Property and made payments of $50,000 each and issued option agreements to each of three former officers of which one is currently a director. The options call for the issuance of a number of shares of restricted stock based on the value at the public offering price equal to the balance due of $413,750. The options vest upon the consummation of an underwritten registered public offering of the Company’s Class B Common Stock with gross proceeds of not less than $20,000,000. The options expire 5 years from the grant date. The underlying shares of the exercised options must be held for a period of 180 days, therefore a discount for lack of marketability was applied. The Company recorded an extinguishment of debt gain of $228,261 based on the carrying value of the deferred compensation of $413,750 and the fair value of the options issued of $185,489.

8

PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

6. Commitments, Contingencies and Related parties (Continued)

These options were valued using a monte carlo model valuation methodology. The model embodies relevant assumptions that address the features underlying these instruments. Significant assumption used in the monte carlo model to value these options were, the following: Exercise price - $1.00; Term - 5 years; Discount for lack of marketability - 29.19%; Volatility - 108.6%; Risk-free interest rate - 1.61%; Dividend rate - 0%.

C. Property Management Agreement

On November 8, 2011, the Company and Signature Community Management (“Signature”), (an entity owned by our CEO) entered into a Property Management Agreement pursuant to which the Company retained Signature as the exclusive, managing and leasing agent for the Company’s Mapletree Property. Signature receives compensation of 5% of monthly rental income actually received from tenants at the Mapletree Property. The property Management Agreement renewed for a one year term on November 8, 2015 and will automatically renew for one year terms until it is terminated by either party upon written notice. The Company incurred management fees of $10,647 and $10,020 for the three months ended June 30, 2016 and 2015, respectively and $20,977 and $20,288 for the six months ended June 30, 2016 and 2015, respectively.

D. Asset Management Agreement

On November 8, 2011, the Company entered into an Asset Management Agreement with Signature pursuant to which the Company engaged Signature to oversee the Mapletree Property. Signature will receive an asset management fee of 1.5% of the monthly gross rental revenues collected for the Mapletree Property. The Asset Management Agreement renewed for a one year term on November 8, 2015 and will automatically renew for one year terms until it is terminated by either party upon written notice. The Company incurred asset management fees of $3,194 and $3,005 for the three months ended June 30, 2016 and 2015, respectively and $6,293 and $6,068 for the six months ended June 30, 2016 and 2015, respectively.

E. Sublease

The Company subleases its executive office space under a month to month lease with Signature for a monthly rental payment of $1,100 or $13,200 per year. Either party may terminate the sublease upon 30 days prior written notice. The Company incurred $3,300 and $6,600 in rent expense for the three and six months ended June 30, 2016 and 2015, respectively.

7. Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash.

The Company generally maintains its cash in money market funds with financial institutions. Although the Company may maintain balances at these institutions in excess of the FDIC insurance limit, the Company does not anticipate and has not experienced any losses.

9

PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

8. Common Stock

The Class A and Class B common stock of Presidential have identical rights except that the holders of Class A common stock are entitled to elect two-thirds of the Board of Directors and the holders of the Class B common stock are entitled to elect one-third of the Board of Directors.

Other than as described in Note 9, no shares of common stock of Presidential are reserved.

9. Warrants and Options

On November 8, 2011, the Company issued 740,000 options at an exercise price of $1.25. A total of 148,000 shares vest six months after the grant date. The aggregate intrinsic value was $0.00. The remaining options vest upon the achievement of performance milestones. Options vesting on the achievement of performance milestones will not be recognized as compensation until such milestones are deemed probable of achievement. The Company has approximately $592,000 of unrecognized compensation expense respectively, related to unvested share-based compensation awards. For the three and six months ended June 30, 2016 and 2015 compensation expense was $0. Approximately $592,000 will vest upon the achievement of performance milestones.

10. Estimated Fair Value of Financial Instruments

At June 30, 2016 and December 31, 2015, the carrying amounts of the Company’s financial instruments, which include cash, accounts receivable and accounts payable and accrued expenses, approximate their fair value due to their generally short maturities.

10

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This report contains statements that do not relate to historical facts, but are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to analyses and other information based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to future events or trends, our future prospects and proposed development or business strategies, among other things. These statements can generally (although not always) be identified by their use of terms and phrases such as anticipate, appear, believe, continue, could, estimate, expect, indicate, intend, may, plan, possible, predict, project, pursue, will, would and other similar terms and phrases, as well as the use of the future tense. Forward-looking statements in this Quarterly Report on Form 10-Q speak only as of the date hereof, and forward looking statements in documents incorporated by reference speak only as of the date of those documents. Unless otherwise required by law, we undertake no obligation to publicly update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

Examples of forward-looking statements in this report include, but are not limited to, the following categories of expectations about:

· Our ability to implement plans for growth;

· Our ability to finance the acquisition of new real estate assets;

· Our ability to manage growth;

· Our ability to generate operating liquidity;

· Our ability to attract and maintain tenants for our rental properties;

· The demand for rental properties and the creditworthiness of tenants;

· Governmental actions and initiatives;

· Financial results for 2016 and beyond;

· Environmental and safety requirements;

· The form, timing and/or amount of dividend distributions in future periods.

Overview

Presidential is a Delaware corporation organized in 1983 to succeed to the business of a company of the same name which was organized in 1961 to succeed to the business of a closely held real estate business founded in 1911. Since 1982, we have elected to be treated as a real estate investment trust (“REIT”) for Federal and State income tax purposes. We own, directly or indirectly, interests in real estate and interests in entities which own real estate.

We outsource the management of the Mapletree Industrial Center to Signature Community Management.

We obtain funds for working capital and investment from our available cash, operating activities and refinancing of mortgage loans on our real estate.

On July 28, 2015, Palmer-Mapletree LLC, a wholly-owned subsidiary of the Company entered into a Loan Agreement (the “Loan Agreement”) with Natixis Real Estate Capital LLC providing for a mortgage loan in the principal amount of $1,750,000 (the “Loan”) at an interest rate of 6.031%. $934,794 of the loan proceeds were used to repay the prior mortgage loan and line of credit on the Mapletree Property which was entered into on June 8, 2012 with Country Bank for Savings (see Note 4a). $123,757 of the Loan proceeds was set aside for capital improvements and reserves for the property. We received net proceeds of $585,125. The Loan matures on August 5, 2025 and requires monthly payments of $11,308. The outstanding balance of the loan and mortgage costs at June 30, 2016 and December 31, 2015 was $1,725,785 and $142,572, respectively and $1,740,462 and $150,438, respectively. The Company is required to maintain certain financial covenants in accordance with the loan agreement. The Company was in compliance with the covenants at June 30, 2016.

11

Critical Accounting Policies

For the six months ended June 30, 2016, the Company had a loss from operations. This combined with a history of operating losses and working capital deficiency, has been detrimental to our operations and could potentially affect our ability to meet our obligations and continue as a going concern. Our ability to continue as a going concern is dependent upon the successful execution of strategies to achieve profitability, and increase working capital by raising debt and/or equity. The accompanying financial statements do not include any adjustments that may result from this uncertainty.

In preparing the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), management is required to make estimates and assumptions that affect the financial statements and disclosures. These estimates require difficult, complex and subjective judgments. Management has discussed with the Audit Committee the implementation of the critical accounting policies described below and the estimates required with respect to such policies.

Real Estate

Real estate is carried at cost, net of accumulated depreciation and amortization. Additions and improvements are capitalized and repairs and maintenance are charged to rental property operating expenses as incurred. Depreciation is generally provided on the straight-line method over the estimated useful life of the asset. The useful life of each property, as well as the allocation of the costs associated with a property to its various components, requires estimates by management. If management incorrectly estimates the allocation of those costs or incorrectly estimates the useful lives of its real estate, depreciation expense may be miscalculated.

The Company reviews each of its properties for impairment if events or changes in circumstances warrant. If impairment were to occur, the property would be written down to its estimated fair value. The Company assesses the recoverability of its investment in real estate based on undiscounted cash flow estimates. The future estimated cash flows of a property are based on current rental revenues and operating expenses, as well as the current local economic climate affecting the property. Considerable judgment is required in making these estimates and changes in these estimates could cause the estimated cash flows to change and impairment could occur. As of June 30, 2016, the Company’s net real estate was carried at $543,134.

Rental Revenue Recognition

The Company recognizes rental revenue on the straight-line basis from the later of the date of the commencement of the lease or the date of acquisition of the property subject to existing leases, which averages minimum rents over the terms of the leases. Certain leases require the tenants to reimburse a pro rata share of real estate taxes, utilities and maintenance costs.

Income Taxes

We operate in a manner intended to enable us to continue to qualify as a Real Estate Investment Trust under Sections 856 to 860 of the Code. Under those sections, a REIT which meets certain requirements is not subject to Federal income tax on that portion of its taxable income which is distributed to its shareholders, if at least 90% of its REIT taxable income (exclusive of capital gains) is so distributed. As a result of our ordinary tax loss for the six months ended June 30, 2016, there is no requirement to make a distribution for the six months ended June 30, 2016. In addition, no provision for income taxes was required at June 30, 2016.

12

Results of Operations

Results of operations for the three and six months ended June 30, 2016 compared to the three and six months ended June 30, 2015

Operations:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Revenues	$	254,164		$	240,561		$	504,570		$	471,703
Operating expenses	$	131,798		$	131,544		$	283,674		$	284,192
Net loss	$	(162,908	)	$	(140,193	)	$	(332,917	)	$	(299,093	)

Three months ended June 30, 2016

Revenues increased by $13,603 for the three months ended June 30, 2016, compared to the three months ended June 30, 2015, as a result of increased occupancy at the Mapletree Industrial Center.

Net loss for the three months ended June 30, 2016 was $162,908 compared to $140,193 for the three months ended June 30, 2015, an increase of $22,715. The increase was comprised of: (i) higher general and administrative expenses of approximately $18,500 mainly consisting of increases in legal fees, and (ii) an increase in interest expense and amortization expense of $17,910. The increase was offset by higher rental income of approximately $14,000 due to improved occupancy at the Mapletree Industrial Center.

Six months ended June 30, 2016

Revenues increased by $32,867 for the six months ended June 30, 2016, compared to the six months ended June 30, 2015, as a result of increased occupancy at the Mapletree Industrial Center.

Net loss for the six months ended June 30, 2016 was $332,917 compared to $299,093 for the six months ended June 30, 2015, an increase of $33,824. The increase was comprised of: (i) higher general and administrative expenses of approximately $29,500 mainly consisting of increases in legal fees, (ii) an increase in interest expense and amortization expense of approximately $36,000, and (iii) a decrease in investment income of $2,904, The increase was offset by higher rental income of approximately $33,000 due to improved occupancy at the Mapletree Industrial Center.

Balance Sheet

June 30, 2016 compared to December 31, 2015

Net real estate increased by $27,009 due to capital improvements of $51,114 recorded during the six months ended June 30, 2016 offset by depreciation expense of $24,105 on the MapleTree Industrial Center.

Prepaid expenses decreased by $79,560 primarily due to the accretion of the directors and officers tail policy purchased in 2011 and current directors and officers insurance premiums.

Accounts payable and accrued liabilities increased by $169,835 primarily due to accrued salary for Nicholas W. Jekogian, CEO, as required by his employment contract and legal fees related to the company exploring various growth options.

Other liabilities increased $9,737 primarily due to increases in prepaid rent and security deposits.

Mortgage escrow increased $41,754 primarily due to an increase in escrows related to insurance.

13

Liquidity and Capital Resources

We obtain funds for working capital and investment from our available cash.

For the six months ended June 30, 2016, the Company had a loss from operations. This combined with a history of operating losses and working capital deficiency, has been detrimental to our operations and could potentially affect our ability to meet our obligations and continue as a going concern. Our ability to continue as a going concern is dependent upon the successful execution of strategies to achieve profitability, and increase working capital by raising debt and/or equity. The accompanying financial statements do not include any adjustments that may result from this uncertainty.

At June 30, 2016, we had $301,056 in available cash, a decrease of $141,866 from $442,922 available at December 31, 2015. This decrease in cash and cash equivalents was due to cash used in operating activities of $76,075, cash used in investing activities of $51,114 and cash used in financing activities of $14,677.

Operating Activities

Cash from operating activities includes net cash received from rental property operations. For the six months ended June 30, 2016, cash received from interest on cash balances was $1,099. Net cash received from rental property operations was approximately $514,000. Net cash received from rental property operations is before additions and improvements and mortgage amortization.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

None

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

The Company, under the supervision and with the participation of its management, including its principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, herein referred to as the Exchange Act) as of the end of the period covered by this report. The purpose of disclosure controls is to ensure that information required to be disclosed in our reports filed with or submitted to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls are also designed to ensure that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. Based on this evaluation, the principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information required to be included in our periodic SEC filings and ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms.

(b) Changes in Internal Control over Financial Reporting

The principal executive officer and principal financial officer also conducted an evaluation of internal control over financial reporting, herein referred to as internal control, to determine whether any changes in internal control occurred during the three months ended June 30, 2016 that may have materially affected or which are reasonably likely to materially affect internal control. Based on that evaluation, there has been no change in the Company’s internal control during the three months ended June 30, 2016 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

14

PART II OTHER INFORMATION

Item 1. Legal Proceedings

None

Item 6. Exhibits

31.1	Certification of Chief Executive Officer of the Company pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
31.2	Certification of Chief Financial Officer of the Company pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
32.1	Certification of Chief Executive Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101 .INS	XBRL Instance Document
101 .SCH	XBRL Taxonomy Schema
101 .CAL	XBRL Taxonomy Calculation Linkbase
101 .DEF	XBRL Definition Linkbase
101 .LAB	Taxonomy Label Linkbase
101 .PRE	XBRL Taxonomy Presentation Linkbase

15

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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 on the 15th day of August 2016

PRESIDENTIAL REALTY CORPORATION
By:	/s/ Nickolas W. Jekogian
	Nickolas Jekogian Chief Executive Officer and Chairman of the Board
By:	/s/ Alexander Ludwig
	Alexander Ludwig
	President, Chief Operating Officer and Principal Financial Officer

EX-31.1

Exhibit 31.1

PRESIDENTIAL REALTY CORPORATION

CERTIFICATION PURSUANT TO RULE 13a-14 OR 15d-14 OF

THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Nickolas Jekogian, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2016 of Presidential Realty Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 15, 2016

/s/Nickolas W. Jekogian

Nickolas W.  Jekogian

Chief Executive Officer

EX-31.2

Exhibit 31.2

PRESIDENTIAL REALTY CORPORATION

CERTIFICATION PURSUANT TO RULE 13a-14 OR 15d-14 OF

THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Alexander Ludwig, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2016 of Presidential Realty Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 15, 2016

/s/ Alexander Ludwig   

Alexander Ludwig

President, Chief Operating Officer and Principal Financial
Officer

EX-32.1

Exhibit 32.1

PRESIDENTIAL REALTY CORPORATION

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Presidential Realty Corporation (the “Company”) on Form 10-Q for the period ended June 30, 2016 (the “Report”), I, Nickolas Jekogian, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/S/ Nickolas W. Jekogian

Nickolas W. Jekogian

Chief Executive Officer

(Principal Executive Officer)

Date: August 15, 2016

EX-32.2

Exhibit 32.2

PRESIDENTIAL REALTY CORPORATION

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Presidential Realty Corporation (the “Company”) on Form 10-Q for the period June 30, 2016 (the “Report”), I, Alexander Ludwig, President, Chief Operating Officer and Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/S/ Alexander Ludwig

Alexander Ludwig

President, Chief Operating Officer and Principal Financial
Officer

Date:  August 15,  2016

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 15, 2016
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Entity Registrant Name	PRESIDENTIAL REALTY CORP/DE/
Entity Central Index Key	0000731245
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	PDNLB
Common Class A [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		442,533
Common Class B [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		3,846,147

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Assets
Real estate (Note 2)	$ 1,169,459	$ 1,118,345
Less: accumulated depreciation	626,325	602,220
Net real estate	543,134	516,125
Prepaid expenses	60,027	139,587
Other receivables (net of valuation allowance of $1,471 in 2016 and $790 in 2015)	17,305	27,784
Cash and cash equivalents	301,056	442,922
Mortgage escrow	158,335	116,581
Other assets	8,439	5,453
Total Assets	1,088,296	1,248,452
Liabilities:
Mortgage payable, net of mortgage costs	1,583,213	1,590,024
Accounts payable and accrued liabilities	805,700	635,865
Other liabilities	48,578	38,841
Total Liabilities	2,437,491	2,264,730
Stockholders' Deficit:
Additional paid-in capital	3,108,471	3,108,471
Accumulated deficit	(4,457,708)	(4,124,791)
Total Stockholders' Deficit	(1,349,195)	(1,016,278)
Total Liabilities and Stockholders' Deficit	1,088,296	1,248,452
Common Class A [Member]
Stockholders' Deficit:
Common stock: par value $.00001 per share	4	4
Common Class B [Member]
Stockholders' Deficit:
Common stock: par value $.00001 per share	$ 38	$ 38

XML

CONSOLIDATED BALANCE SHEETS [Parenthetical] - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Valuation allowance for other receivables (in dollars)	$ 1,471	$ 790
Common stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Common Class A [Member]
Common Stock, Shares Authorized	700,000	700,000
Common stock, shares issued	442,533	442,533
Common Class B [Member]
Common Stock, Shares Authorized	999,300,000	999,300,000
Common stock, shares issued	3,846,147	3,846,147

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Revenues:
Rental	$ 254,164	$ 240,561	$ 504,570	$ 471,503
Interest on mortgages - notes receivable	0	0	0	200
Total	254,164	240,561	504,570	471,703
Costs and Expenses:
General and administrative	232,505	213,956	448,976	419,510
Rental property:
Operating expenses	131,798	131,544	283,674	284,192
Interest expense and amortization of mortgage costs	30,280	12,370	60,674	24,586
Real estate taxes	10,578	10,573	21,157	21,147
Depreciation on real estate	12,385	12,813	24,105	25,364
Total	417,546	381,256	838,586	774,799
Other Income:
Investment income	474	502	1,099	4,003
Net loss	$ (162,908)	$ (140,193)	$ (332,917)	$ (299,093)
Net Loss per Common Share basic and diluted (in dollars per share)	$ (0.04)	$ (0.03)	$ (0.08)	$ (0.07)
Earnings per Common Share basic and diluted:
Weighted Average Number of Shares Outstanding - basic and diluted	4,288,680	4,288,680	4,288,680	4,288,680

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Net loss	$ (332,917)	$ (299,093)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization	31,971	28,203
Bad debt (recovery)	0	(5,600)
Bad debt	681	0
(Increase) decrease in:
Other receivables	9,798	16,734
Prepaid expenses	79,560	(2,085)
Mortgage escrow	(41,754)	(16,368)
Other assets	(2,986)	18,440
Increase (decrease) in:
Accounts payable and accrued liabilities	169,835	76,107
Other liabilities	9,737	12,612
Total adjustments	256,842	128,043
Net cash used in operating activities	(76,075)	(171,050)
Cash Flows from Investing Activities:
Payments received on notes receivable	0	405
Payments disbursed for capital improvements	(51,114)	(5,157)
Net cash used in investing activities	(51,114)	(4,752)
Cash Flows from Financing Activities:
Principal payments on mortgage debt	(14,677)	(12,834)
Net cash used in financing activities	(14,677)	(12,834)
Net decrease in Cash and Cash Equivalents	(141,866)	(188,636)
Cash and Cash Equivalents, Beginning of period	442,922	442,613
Cash and Cash Equivalents, End of period	301,056	253,977
Supplemental cash flow information:
Interest paid in cash	$ 52,481	$ 21,747

XML

Organization and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Text Block]

1. Organization and Summary of Significant Accounting Policies

Organization

Presidential Realty Corporation (“Presidential” or the “Company”) is operated as a self-administrated, self-managed Real Estate Investment Trust (“REIT”). The Company is engaged principally in the ownership of income producing real estate. Presidential operates in a single business segment, investments in real estate related assets.

Basis of Presentation and Going Concern Considerations

For the six months ended June 30, 2016, the Company had a loss from operations. This combined with a history of operating losses and working capital deficiency, has been detrimental to our operations and could potentially affect our ability to meet our obligations and continue as a going concern. Our ability to continue as a going concern is dependent upon the successful execution of strategies to achieve profitability, and increase working capital by raising debt and/or equity. The accompanying financial statements do not include any adjustments that may result from this uncertainty.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the requirements of the Securities and Exchange Commission (“SEC”). The financial statements include all normal and recurring adjustments that are necessary for a fair presentation of the Company’s financial position and operating results.

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the requirements of the Securities and Exchange Commission (“SEC”) for interim financial information. The financial statements include all normal and recurring adjustments that are necessary for a fair presentation of the Company’s financial position and operating results. The results for such interim periods are not necessarily indicative of the results to be expected for the year. In the opinion of management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the results for the respective periods have been reflected. These consolidated financial statements and accompanying notes should be read in conjunction with the Company’s Form 10-K for the year ended December 31, 2015 filed on April 12, 2016.

Real Estate

Real estate is stated at cost. Generally, depreciation is provided on the straight-line method over the assets estimated useful lives, which range from twenty to thirty-nine years for buildings and improvements and from three to ten years for furniture and equipment. Maintenance and repairs are charged to operations as incurred and renewals and replacements are capitalized. The Company reviews each of its property investments for possible impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment of properties is determined to exist when estimated amounts recoverable through future operations on an undiscounted basis are below the properties carrying value. If a property is determined to be impaired, it is written down to its estimated fair value.

Sale of Real Estate

Presidential follows the guidance of the Property, Plant and Equipment Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) as it pertains to sales of real estate. Accordingly, the gains on certain transactions maybe deferred and recognized on the installment method until such transactions comply with the criteria for full profit recognition. At June 30, 2016 and 2015, the Company had no deferred gains.

Principles of Consolidation

The consolidated financial statements include the accounts of Presidential Realty Corporation and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated.

Rental Revenue Recognition

The Company acts as lessor under operating leases. Rental revenue is recorded on the straight-line basis from the later of the date of the commencement of the lease or the date of acquisition of the property subject to existing leases, which averages minimum rents over the terms of the leases. Certain leases require the tenants to reimburse a pro rata share of real estate taxes, utilities and maintenance costs. Recognition of rental revenue is generally discontinued when the rental is delinquent for ninety days or more, or earlier if management determines that collection is doubtful.

Allowance for Doubtful Accounts

The Company assesses the collectability of amounts due from tenants and other receivables, using indicators such as past-due accounts, the nature and age of the receivable, the payment history and the ability of the tenant or debtor to meet its payment obligations. Management’s estimate of allowances for doubtful accounts is subject to revision as these factors change. Rental revenue is recorded on the straight-line basis and rental revenue recognition is generally discontinued when the tenant in occupancy is delinquent for ninety days or more. Bad debt expense is charged for vacated tenant accounts and subsequent receipts collected for those receivables will reduce bad debt expense. As of June 30, 2016 and December 31, 2015, the allowance relating to tenant obligations was $1,471 and $790, respectively.

Net Loss Per Share

Basic net loss per share data is computed by dividing net loss by the weighted average number of shares of Class A and Class B common stock outstanding (excluding non-vested shares) during each period. Diluted net income per share is computed by dividing net income by the weighted average shares outstanding, including the dilutive effect, if any, of non-vested shares. For the three and six months ended June 30, 2016 and 2015, the weighted average shares outstanding as used in the calculation of diluted loss per share do not include 740,000, of outstanding stock options and 1,700,000 of outstanding warrants, as their inclusion would be antidilutive.

Cash

Cash includes cash on hand, cash in banks and cash in money market funds.

Management Estimates

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated balance sheets and the reported amounts of income and expense for the reporting period. Actual results could differ from those estimates.

Accounting for Stock Awards

The Company follows the guidance of ASC Topic 718 in accounting for stock-based compensation. Shares of Class B common stock granted are fully vested upon the grant date. The Company recorded the market value of any grants that were earned and vested in 2016 and 2015 to expense in each period.

Accounting for Uncertainty in Income Taxes

The Company follows the guidance of the recognition of current and deferred income tax accounts, including accrued interest and penalties, in accordance with ASC 740-10-25. Under this guidance, if the Company’s tax positions in relation to certain transactions were examined and were not ultimately upheld, the Company would be required to pay an income tax assessment and related interest. Alternatively, the Company could elect to pay a deficiency dividend to its shareholders in order to continue to qualify as a REIT and the related interest assessment to the taxing authorities.

Recent Accounting Pronouncements

In April 2015, the FASB issued ASU 2015-3, to simplify the presentation of debt issuance costs. This update requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the associated debt liability, consistent with the required presentation for debt discounts. This update is effective for interim and annual periods beginning after December 15, 2015. The Company adopted ASU 2015-03 January 1, 2016. The adoption of this standard resulted in the reclassification of $150,438 of unamortized debt issuance costs related to the Company’s mortgage loan (see Note 4b) from other assets to Mortgage payable within its consolidated balance sheets as of June 30, 2016 and December 31, 2015. Other than this reclassification, the adoption of ASU 2015-03 did not have an impact on the Company’s consolidated financial statements.

Accumulated amortization as of June 30, 2016 and December 31, 2015 was $14,750 and $6,884, respectively.

Amortization expenses of mortgage costs was $3,933 and $1,420 for the three months ended June 30, 2016 and 2015, respectively and $7,866 and $2,389 for the six months ended June 30, 2016 and 2015, respectively, which is included in interest expense.

In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASU 2016-02 supersedes the previous leases standard, Leases (Topic 840). The standard is effective on January 1, 2019, with early adoption permitted. The Company is currently in the process of evaluating the impact the adoption of ASU 2016-02 will have on the Company’s financial position or results of operations.

XML

Real Estate

6 Months Ended

Jun. 30, 2016

Real Estate [Abstract]

Real Estate Disclosure [Text Block]

2. Real Estate

Real estate is comprised of the following:

	June 30,  2016		December 31,  2015
Land	$	79,100	$	79,100
Buildings		1,039,984		995,215
Furniture and equipment		50,375		44,030
Total	$	1,169,459	$	1,118,345

Rental revenue from the Mapletree Property constituted all of the rental revenue for the Company for the three and six months ended June 30, 2016 and 2015.

XML

Investments in Partnership

6 Months Ended

Jun. 30, 2016

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments and Joint Ventures Disclosure [Text Block]

3. Investments in Partnership

We received distributions from Broadway Partners Fund II in the amount of $0 and $2,750 during the six months ended June 30, 2016 and 2015, respectively. This amount is reported as investment income on the statement of operations. This investment was previously written off. The Company recognizes income received from this investment on the cash basis. The Broadway Partners Fund II was closed at the end of 2014 and we do not expect any meaningful income from this investment in the future.

XML

Mortgage Debt

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

4. Mortgage Debt

a. On June 8, 2012, we closed on a mortgage and line of credit for a combined total of $1,000,000 with Country Bank for Savings on the Mapletree Industrial Center (the “Mapletree Property”). The mortgage was for $500,000 at a 5% interest rate, for a term of 5 years. Thereafter the interest adjusted monthly equal to the bank’s Prime Rate, plus 1% with an interest rate floor of 5%, for a term of 15 years. We received $459,620 of net proceeds. The line of credit was for $500,000, with an interest rate of 1% over the bank’s Prime Rate. The line of credit was due on demand. Both the mortgage and the line of credit were secured by the Mapletree Property.

b. On July 28, 2015, Palmer-Mapletree LLC, a wholly-owned subsidiary of the Company entered into a Loan Agreement (the “Loan Agreement”) with Natixis Real Estate Capital LLC providing for a mortgage loan in the principal amount of $1,750,000 (the “Loan”) at an interest rate of 6.031%. $934,794 of the loan proceeds were used to repay the prior mortgage loan and line of credit on the Mapletree Property which was entered into on June 8, 2012 with Country Bank for Savings (see Note 4a). $123,757 of the Loan proceeds was set aside for capital improvements and reserves for the property. We received net proceeds of $585,125. The Loan matures on August 5, 2025 and requires monthly payments of $11,308. The outstanding balance of the loan and mortgage costs at June 30, 2016 and December 31, 2015 was $1,725,785 and $142,572, respectively and $1,740,462 and $150,438, respectively. The Company is required to maintain certain financial covenants in accordance with the loan agreement. The Company was in compliance with the covenants at June 30, 2016.

XML

Income Taxes

6 Months Ended

Jun. 30, 2016

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

5. Income Taxes

Presidential has elected to qualify as a Real Estate Investment Trust under the Internal Revenue Code. A REIT which distributes at least 90% of its real estate investment trust taxable income to its shareholders each year by the end of the following year and which meets certain other conditions will not be taxed on that portion of its taxable income which is distributed to its shareholders.

ASC 740 prescribes a more likely than not recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken. If the Company’s tax position in relation to a transaction was not likely to be upheld, the Company would be required to record the accrual for the tax and interest thereon. As of June 30, 2016, the tax years that remain open to examination by the federal, state and local taxing authorities are the 2012 – 2016 tax years and the Company was not required to accrue any liability for those tax years.

The Company has accumulated a net operating loss carry forward of approximately $20,400,000 expiring from 2028 through 2034.

For the six months ended June 30, 2016, the Company had a tax loss of approximately $220,000 ($.05 per share), which was all ordinary loss.

For the six months ended June 30, 2015, the Company had a tax loss of approximately $187,000 ($.04 per share), which was all ordinary loss.

XML

Commitments, Contingencies and Related Parties

6 Months Ended

Jun. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

6. Commitments, Contingencies and Related parties

A. Commitments and Contingencies

1) Presidential is not a party to any material legal proceedings. The Company may from time to time be a party to routine litigation incidental to the ordinary course of its business.

2) In the opinion of management, the Company’s Mapletree Property is adequately covered by insurance in accordance with normal insurance practices.

B. Related Parties

1) Executive Employment Agreements

a. Nickolas W. Jekogian –On January 8, 2014, the Company and Mr. Nicholas W. Jekogian, Chairman and Chief Executive Officer of the Company, entered into an amendment to Mr. Jekogian’s employment agreement dated November 8, 2011. The amendment provides for (i) the extension of the employment term from May 3, 2013 to December 31, 2015, (ii) continuation of Mr. Jekogian’s base salary through the balance of the term at the rate of $225,000 per annum (subject to the continued deferral of the payment of the base salary until a Capital Event), (iii) removal of the $200,000 cap on the amount of any annual bonus that might be awarded Mr. Jekogian, (iv) the issuance to Mr. Jekogian of a “Warrant” to purchase 1,700,000 shares of the Company’s Class B Common Stock in exchange for the complete cancellation of $425,000 of the deferred compensation accrued under Mr. Jekogian’s employment agreement.

Mr. Jekogian’s employment agreement, as amended, expired at December 31, 2015 but the board agreed to continue Mr. Jekogian’s employment on the same terms as the agreement until otherwise terminated by the board.

Alexander Ludwig –On January 8, 2014, the Company and Mr. Alexander Ludwig, a Director, President, Chief Operating Officer and Principal Financial Officer of the Company entered into an amendment to Mr. Ludwig’s employment agreement dated November 8, 2011. The amendment provides for (i) the extension of the employment term from May 3, 2013 to December 31, 2015, (ii) continuation of Mr. Ludwig’s base salary through the balance of the term at the rate of $225,000 per annum, (iii) removal of the $200,000 cap on the amount of any annual bonus that might be awarded Mr. Ludwig.

Mr. Ludwig’s employment agreement, as amended, expired at December 31, 2015 but the board agreed to continue Mr. Ludwig’s employment on the same terms as the agreement until otherwise terminated by the board.

2) Other liabilities

On July 28, 2015 the Company successfully refinanced the Mapletree Property and made payments of $50,000 each and issued option agreements to each of three former officers of which one is currently a director. The options call for the issuance of a number of shares of restricted stock based on the value at the public offering price equal to the balance due of $413,750. The options vest upon the consummation of an underwritten registered public offering of the Company’s Class B Common Stock with gross proceeds of not less than $20,000,000. The options expire 5 years from the grant date. The underlying shares of the exercised options must be held for a period of 180 days, therefore a discount for lack of marketability was applied. The Company recorded an extinguishment of debt gain of $228,261 based on the carrying value of the deferred compensation of $413,750 and the fair value of the options issued of $185,489.

These options were valued using a monte carlo model valuation methodology. The model embodies relevant assumptions that address the features underlying these instruments. Significant assumption used in the monte carlo model to value these options were, the following: Exercise price - $1.00; Term - 5 years; Discount for lack of marketability - 29.19%; Volatility - 108.6%; Risk-free interest rate - 1.61%; Dividend rate - 0%.

C. Property Management Agreement

On November 8, 2011, the Company and Signature Community Management (“Signature”), (an entity owned by our CEO) entered into a Property Management Agreement pursuant to which the Company retained Signature as the exclusive, managing and leasing agent for the Company’s Mapletree Property. Signature receives compensation of 5% of monthly rental income actually received from tenants at the Mapletree Property. The property Management Agreement renewed for a one year term on November 8, 2015 and will automatically renew for one year terms until it is terminated by either party upon written notice. The Company incurred management fees of $10,647 and $10,020 for the three months ended June 30, 2016 and 2015, respectively and $20,977 and $20,288 for the six months ended June 30, 2016 and 2015, respectively.

D. Asset Management Agreement

On November 8, 2011, the Company entered into an Asset Management Agreement with Signature pursuant to which the Company engaged Signature to oversee the Mapletree Property. Signature will receive an asset management fee of 1.5% of the monthly gross rental revenues collected for the Mapletree Property. The Asset Management Agreement renewed for a one year term on November 8, 2015 and will automatically renew for one year terms until it is terminated by either party upon written notice. The Company incurred asset management fees of $3,194 and $3,005 for the three months ended June 30, 2016 and 2015, respectively and $6,293 and $6,068 for the six months ended June 30, 2016 and 2015, respectively.

E. Sublease

The Company subleases its executive office space under a month to month lease with Signature for a monthly rental payment of $1,100 or $13,200 per year. Either party may terminate the sublease upon 30 days prior written notice. The Company incurred $3,300 and $6,600 in rent expense for the three and six months ended June 30, 2016 and 2015, respectively.

XML

Concentration of Credit Risk

6 Months Ended

Jun. 30, 2016

Risks and Uncertainties [Abstract]

Concentration Risk Disclosure [Text Block]

7. Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash.

The Company generally maintains its cash in money market funds with financial institutions. Although the Company may maintain balances at these institutions in excess of the FDIC insurance limit, the Company does not anticipate and has not experienced any losses.

XML

Common Stock

6 Months Ended

Jun. 30, 2016

Stockholders Equity Note [Abstract]

Stockholders Equity Note Disclosure [Text Block]

8. Common Stock

The Class A and Class B common stock of Presidential have identical rights except that the holders of Class A common stock are entitled to elect two-thirds of the Board of Directors and the holders of the Class B common stock are entitled to elect one-third of the Board of Directors.

Other than as described in Note 9, no shares of common stock of Presidential are reserved.

XML

Warrants and Options

6 Months Ended

Jun. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Options [Text Block]

9. Warrants and Options

On November 8, 2011, the Company issued 740,000 options at an exercise price of $1.25. A total of 148,000 shares vest six months after the grant date. The aggregate intrinsic value was $0.00. The remaining options vest upon the achievement of performance milestones. Options vesting on the achievement of performance milestones will not be recognized as compensation until such milestones are deemed probable of achievement. The Company has approximately $592,000 of unrecognized compensation expense respectively, related to unvested share-based compensation awards. For the three and six months ended June 30, 2016 and 2015 compensation expense was $0. Approximately $592,000 will vest upon the achievement of performance milestones.

XML

Estimated Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

10. Estimated Fair Value of Financial Instruments

At June 30, 2016 and December 31, 2015, the carrying amounts of the Company’s financial instruments, which include cash, accounts receivable and accounts payable and accrued expenses, approximate their fair value due to their generally short maturities.

XML

Organization and Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Organization and Description Of Business Accounting [Policy Text Block]

Organization

Presidential Realty Corporation (“Presidential” or the “Company”) is operated as a self-administrated, self-managed Real Estate Investment Trust (“REIT”). The Company is engaged principally in the ownership of income producing real estate. Presidential operates in a single business segment, investments in real estate related assets.

Basis Of Presentation and Going Concern Considerations [Policy Text Block]

Basis of Presentation and Going Concern Considerations

For the six months ended June 30, 2016, the Company had a loss from operations. This combined with a history of operating losses and working capital deficiency, has been detrimental to our operations and could potentially affect our ability to meet our obligations and continue as a going concern. Our ability to continue as a going concern is dependent upon the successful execution of strategies to achieve profitability, and increase working capital by raising debt and/or equity. The accompanying financial statements do not include any adjustments that may result from this uncertainty.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the requirements of the Securities and Exchange Commission (“SEC”). The financial statements include all normal and recurring adjustments that are necessary for a fair presentation of the Company’s financial position and operating results.

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the requirements of the Securities and Exchange Commission (“SEC”) for interim financial information. The financial statements include all normal and recurring adjustments that are necessary for a fair presentation of the Company’s financial position and operating results. The results for such interim periods are not necessarily indicative of the results to be expected for the year. In the opinion of management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the results for the respective periods have been reflected. These consolidated financial statements and accompanying notes should be read in conjunction with the Company’s Form 10-K for the year ended December 31, 2015 filed on April 12, 2016.

Real Estate, Policy [Policy Text Block]

Real Estate

Real estate is stated at cost. Generally, depreciation is provided on the straight-line method over the assets estimated useful lives, which range from twenty to thirty-nine years for buildings and improvements and from three to ten years for furniture and equipment. Maintenance and repairs are charged to operations as incurred and renewals and replacements are capitalized. The Company reviews each of its property investments for possible impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment of properties is determined to exist when estimated amounts recoverable through future operations on an undiscounted basis are below the properties carrying value. If a property is determined to be impaired, it is written down to its estimated fair value.

Real Estate Held for Development and Sale, Policy [Policy Text Block]

Sale of Real Estate

Presidential follows the guidance of the Property, Plant and Equipment Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) as it pertains to sales of real estate. Accordingly, the gains on certain transactions maybe deferred and recognized on the installment method until such transactions comply with the criteria for full profit recognition. At June 30, 2016 and 2015, the Company had no deferred gains.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

The consolidated financial statements include the accounts of Presidential Realty Corporation and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated.

Revenue Recognition Leases, Operating [Policy Text Block]

Rental Revenue Recognition

The Company acts as lessor under operating leases. Rental revenue is recorded on the straight-line basis from the later of the date of the commencement of the lease or the date of acquisition of the property subject to existing leases, which averages minimum rents over the terms of the leases. Certain leases require the tenants to reimburse a pro rata share of real estate taxes, utilities and maintenance costs. Recognition of rental revenue is generally discontinued when the rental is delinquent for ninety days or more, or earlier if management determines that collection is doubtful.

Loans and Leases Receivable, Allowance for Loan Losses Policy [Policy Text Block]

Allowance for Doubtful Accounts

The Company assesses the collectability of amounts due from tenants and other receivables, using indicators such as past-due accounts, the nature and age of the receivable, the payment history and the ability of the tenant or debtor to meet its payment obligations. Management’s estimate of allowances for doubtful accounts is subject to revision as these factors change. Rental revenue is recorded on the straight-line basis and rental revenue recognition is generally discontinued when the tenant in occupancy is delinquent for ninety days or more. Bad debt expense is charged for vacated tenant accounts and subsequent receipts collected for those receivables will reduce bad debt expense. As of June 30, 2016 and December 31, 2015, the allowance relating to tenant obligations was $1,471 and $790, respectively.

Earnings Per Share, Policy [Policy Text Block]

Net Loss Per Share

Basic net loss per share data is computed by dividing net loss by the weighted average number of shares of Class A and Class B common stock outstanding (excluding non-vested shares) during each period. Diluted net income per share is computed by dividing net income by the weighted average shares outstanding, including the dilutive effect, if any, of non-vested shares. For the three and six months ended June 30, 2016 and 2015, the weighted average shares outstanding as used in the calculation of diluted loss per share do not include 740,000, of outstanding stock options and 1,700,000 of outstanding warrants, as their inclusion would be antidilutive.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash

Cash includes cash on hand, cash in banks and cash in money market funds.

Use of Estimates, Policy [Policy Text Block]

Management Estimates

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated balance sheets and the reported amounts of income and expense for the reporting period. Actual results could differ from those estimates.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Accounting for Stock Awards

The Company follows the guidance of ASC Topic 718 in accounting for stock-based compensation. Shares of Class B common stock granted are fully vested upon the grant date. The Company recorded the market value of any grants that were earned and vested in 2016 and 2015 to expense in each period.

Income Tax Uncertainties, Policy [Policy Text Block]

Accounting for Uncertainty in Income Taxes

The Company follows the guidance of the recognition of current and deferred income tax accounts, including accrued interest and penalties, in accordance with ASC 740-10-25. Under this guidance, if the Company’s tax positions in relation to certain transactions were examined and were not ultimately upheld, the Company would be required to pay an income tax assessment and related interest. Alternatively, the Company could elect to pay a deficiency dividend to its shareholders in order to continue to qualify as a REIT and the related interest assessment to the taxing authorities.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

In April 2015, the FASB issued ASU 2015-3, to simplify the presentation of debt issuance costs. This update requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the associated debt liability, consistent with the required presentation for debt discounts. This update is effective for interim and annual periods beginning after December 15, 2015. The Company adopted ASU 2015-03 January 1, 2016. The adoption of this standard resulted in the reclassification of $150,438 of unamortized debt issuance costs related to the Company’s mortgage loan (see Note 4b) from other assets to Mortgage payable within its consolidated balance sheets as of June 30, 2016 and December 31, 2015. Other than this reclassification, the adoption of ASU 2015-03 did not have an impact on the Company’s consolidated financial statements.

Accumulated amortization as of June 30, 2016 and December 31, 2015 was $14,750 and $6,884, respectively.

Amortization expenses of mortgage costs was $3,933 and $1,420 for the three months ended June 30, 2016 and 2015, respectively and $7,866 and $2,389 for the six months ended June 30, 2016 and 2015, respectively, which is included in interest expense.

In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASU 2016-02 supersedes the previous leases standard, Leases (Topic 840). The standard is effective on January 1, 2019, with early adoption permitted. The Company is currently in the process of evaluating the impact the adoption of ASU 2016-02 will have on the Company’s financial position or results of operations.

XML

Real Estate (Tables)

6 Months Ended

Jun. 30, 2016

Real Estate [Abstract]

Schedule of Real Estate Properties [Table Text Block]

Real estate is comprised of the following:

	June 30,  2016		December 31,  2015
Land	$	79,100	$	79,100
Buildings		1,039,984		995,215
Furniture and equipment		50,375		44,030
Total	$	1,169,459	$	1,118,345

XML

Organization and Summary of Significant Accounting Policies (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Accounting Policies [Line Items]
Allowance For Doubtful Other Receivables, Current	$ 1,471		$ 1,471		$ 790
Debt Instrument, Unamortized Discount					150,438
Accumulated Amortization, Deferred Finance Costs	14,750		14,750		$ 6,884
Amortization of Financing Costs	$ 3,933	$ 1,420	$ 7,866	$ 2,389
Warrant [Member]
Accounting Policies [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount			740,000	1,700,000

XML

Real Estate (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Real Estate [Line Items]
Land	$ 79,100	$ 79,100
Buildings	1,039,984	995,215
Furniture and equipment	50,375	44,030
Total	$ 1,169,459	$ 1,118,345

XML

Investments in Partnership (Details Textual) - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Schedule of Equity Method Investments [Line Items]
Proceeds from Equity Method Investment, Dividends or Distributions	$ 0	$ 2,750

XML

Mortgage Debt (Details Textual) - USD ($)		1 Months Ended
	Jun. 08, 2012	Jul. 28, 2015	Jun. 30, 2016	Dec. 31, 2015
Mortgage Debt [Line Items]
Mortgage and Line Of Credit Total	$ 1,000,000
Mortgage Loans on Real Estate, Interest Rate	5.00%
Mortgage Debt Maturity Period	5 years
Mortgage Loan Interest Rate Adjustment Description	interest adjusted monthly equal to the banks Prime Rate, plus 1% with an interest rate floor of 5%, for a term of 15 years
Proceeds From Mortgage Loan	$ 459,620
Line of Credit Facility, Amount Outstanding	$ 500,000
Line of Credit Facility, Interest Rate Description	with an interest rate of 1% over the banks Prime Rate
Secured Debt	$ 500,000		$ 1,583,213	$ 1,590,024
Palmer-Mapletree LLC [Member] | Loans Agreement [Member]
Mortgage Debt [Line Items]
Debt Instrument, Face Amount		$ 1,750,000
Debt Instrument, Interest Rate, Stated Percentage		6.031%
Repayments of Debt		$ 934,794
Debt Instrument, Maturity Date		Aug. 05, 2025
Debt Instrument, Periodic Payment, Total		$ 11,308
Loans Payable, Total			1,725,785	1,740,462
Proceeds from Issuance of Debt		585,125
Amount Transferred to Property Reserve		$ 123,757
Deferred Finance Costs, Net			$ 142,572	$ 150,438

XML

Income Taxes (Details Textual) - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Income Tax [Line Items]
Real Estate Investment Trust Taxable Loss	$ 220,000	$ 187,000
Real Estate Investment Trust Ordinary Income Loss Per Share	$ 0.05	$ 0.04
Operating Loss Expiration Term	expiring from 2028 through 2034
Operating Loss Carryforwards	$ 20,400,000
Real Estate Investment Trust Taxable Income Distributable To Shareholder	90.00%

XML

Commitments, Contingencies and Related parties (Details Textual) - USD ($)			1 Months Ended	3 Months Ended		6 Months Ended
	Jan. 08, 2014	Nov. 08, 2011	Jul. 28, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Commitments, Contingencies and Related parties [Line Items]
Operating Leases, Rent Expense, Sublease Rentals						$ 13,200
Operating Leases Rent Expense Sublease Rentals Per Monthly						1,100
Management fee of monthly rental income from tenants		5.00%
Asset Management Fees				$ 3,194	$ 3,005	6,293	$ 6,068
Operating Leases, Rent Expense				3,300	3,300	6,600	6,600
Property Management Fee				$ 10,647	$ 10,020	$ 20,977	$ 20,288
Asset Management Fee Percentage		1.50%
Gains (Losses) on Extinguishment of Debt			$ 228,261
Deferred Compensation Liability, Current and Noncurrent			413,750
Fair Value Of Stock Options Issued			$ 185,489
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period			5 years
Proceeds from Issuance Initial Public Offering			$ 20,000,000
Fair Value Assumptions, Exercise Price				$ 1.00		$ 1.00
Fair Value Assumptions, Expected Term						5 years
Fair Value Assumptions Expected Marketability						29.19%
Fair Value Assumptions, Expected Volatility Rate						108.60%
Fair Value Assumptions, Risk Free Interest Rate						1.61%
Fair Value Assumptions, Expected Dividend Rate						0.00%
Common Class B [Member]
Commitments, Contingencies and Related parties [Line Items]
Warrants Issued For Cancellation Of Deferred Compensation, Shares	1,700,000
Warrants Issued For Cancellation Of Deferred Compensation, Value	$ 425,000
Chief Operating Officer [Member]
Commitments, Contingencies and Related parties [Line Items]
Base Salary	225,000
Removal of Cap	200,000
Director, Chairman Of Board Of Directors and Chief Executive Officer [Member]
Commitments, Contingencies and Related parties [Line Items]
Base Salary	225,000
Removal of Cap	$ 200,000
Palmer Mapletree Property [Member]
Commitments, Contingencies and Related parties [Line Items]
Repayments of Related Party Debt			$ 50,000

XML

Warrants and Options (Details Textual) - USD ($)		6 Months Ended
	Nov. 08, 2011	Jun. 30, 2016	Jun. 30, 2015
Warrants and Stock Options [Line Items]
Share Based Compensation Arrangements By Share Based Payment Award Options Exercises In Period Weighted Average Exercise Price	$ 1.25
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number	148,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value	$ 0.00
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	$ 592,000
Stock Based Compensation		$ 0	$ 0
Compensation Expense Recognition Upon Achievement Of Performance Milestones		$ 592,000	$ 592,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	740,000