UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2019

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: 001-09043

MedAmerica Properties Inc.

(Exact name of registrant as specified in its charter)

Delaware	36-3361229
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Boca Center, Tower 1, 5200 Town Center Circle, Suite 550, Boca Raton, Florida 33486

(Address of principal executive offices) (Zip Code)

561-617-8050

(Registrant's telephone number, including area code)

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

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

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

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

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

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

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	N/A	N/A

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

As of May 9 , 2019, the registrant had 2,610,568 shares of common stock, $0.01 par value per share, outstanding.

MedAmerica Properties Inc.

Form 10-Q

Table of Contents

Part I — Financial Information		1
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Cautionary Statement Concerning Forward-Looking Statements		11
Overview		11
Critical Accounting Policies and Estimates		13
Results from Operations		13
General and Administrative Expenses		13
Interest Expense		14
Income Tax Expense		14
Net Loss Attributable to Common Shareholders		14
Financial Condition and Liquidity		14
Off-Balance Sheet Arrangements		15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15
Item 4.	Controls and Procedures	16
Part II — Other Information		16
Item 1.	Legal Proceedings	16
Item 1A.	Risk Factors	16
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16
Item 3.	Defaults Upon Senior Securities	16
Item 4.	Mine Safety Disclosures	16
Item 5.	Other Information	16
Item 6.	Exhibits	17
Signatures		18

Part I — Financial Information

Item 1. Financial Statements

MedAmerica Properties Inc.

Condensed Balance Sheets

	March 31, 2019			December 31, 2018
ASSETS		(unaudited)
Current assets
Cash and equivalents	$	76,474		$	139,721
Prepaid insurance and other current assets		23,514			33,784
Total current assets		99,988			173,505
Other assets
Equipment & furnishings, net		17,768			18,576
Total other assets		17,768			18,576
Total assets	$	117,756		$	192,081
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses	$	150,505		$	92,566
Accrued dividends		27,361			27,361
Loan payable - insurance financing		20,684			33,184
Total current liabilities		198,550			153,111
Total liabilities		198,550			153,111
Stockholders' equity
Series A Preferred stock, $0.01 par value, 20,000 shares authorized, 500 issued at March 31, 2019 and 2018		5			5
Common stock, $0.01 par value, 50,000,000 shares authorized, 2,610,568 issued at March 31, 2019 and 2018		26,105			26,105
Additional paid-in capital		111,861,799			111,861,799
Accumulated deficit		(111,968,703	)		(111,848,939	)
Total stockholders' equity		(80,794	)		38,970
Total liabilities and stockholders' equity	$	117,756		$	192,081

See Notes to Condensed Financial Statements

1

MedAmerica Properties Inc.

Condensed Statements of Operations

(Unaudited)

	Three months ended March 31,
	2019			2018
General & administrative expenses	$	119,271		$	208,801
Loss from operations		(119,271	)		(208,801	)
Interest expense		(493	)		(384	)
Net loss	$	(119,764	)	$	(209,185	)
Dividends for the benefit of preferred stockholders:
Preferred stock dividends		(1,250	)		(1,250	)
Net loss attributable to common stockholders	$	(121,014	)	$	(210,435	)
Basic and diluted average number of common shares outstanding		2,610,568			2,610,568
Net loss per common share basic and diluted	$	(0.05	)	$	(0.08	)

See Notes to Condensed Financial Statements

2

MedAmerica Properties Inc.

Condensed Statements of Cash Flows

(Unaudited)

	Three months ended March 31,
	2019			2018
Cash flows used in operating activities:
Net loss	$	(119,764	)	$	(209,185	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		808			808
Changes in assets and liabilities:
Decrease in prepaid expenses and other assets		10,269			7,500
(Decrease)/Increase in accounts payable and accrued expenses		57,940			(15,753	)
Net cash used in operating activities		(50,747	)		(216,630	)
Cash flows used in financing activities:
Payment of note payable - insurance financing		(12,500	)		(12,500	)
Net cash used in financing activities		(12,500	)		(12,500	)
Net decrease in cash		(63,247	)		(229,130	)
Cash at beginning of period		139,721			708,382
Cash at end of period	$	76,474		$	479,252
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	493		$	0
Franchise taxes	$	-		$	5,650
Non cash financing activities:
Prepaid insurance loan financing	$	20,684		$	0

See Notes to Condensed Financial Statements

3

MedAmerica Properties Inc.

Condensed Statements of Stockholders’ Equity

 (unaudited)

	Three Month Period Ended March 31, 2019
	Common Stock			Common Stock	Preferred Stock				Additional		Accumulated		Treasury Stock
	Shares		Amount	Subscribed	Shares		Amount		Paid in Capital		Deficit		Shares		Amount		Total
Stockholders’ equity January 1, 2019	2,610,568	$	26,105	-	500	$	5	$	111,861,799	$	(111,848,939	)	-	$	-	$	38,970
Net loss for the three months ended March 31, 2019											(119,764	)					(119,764	)
Stockholders’ (deficit)  March 31, 2019	2,610,568	$	26,105	-	500	$	5	$	111,861,799	$	(111,968,703	)	-	$	-	$	(80,794	)

	Three Month Period Ended March 31, 2018
	Common Stock			Common Stock	Preferred Stock				Additional		Accumulated		Treasury Stock
	Shares		Amount	Subscribed	Shares		Amount		Paid in Capital		Deficit		Shares		Amount		Total
Stockholders’ equity January 1, 2018	2,610,568	$	26,105	-	500	$	5	$	111,861,799	$	(111,246,399	)	-	$	-	$	641,510
Net loss for the three months ended March 31, 2018											(209,185	)					(209,185	)
Stockholders’ equity March 31, 2018	2,610,568	$	26,105	-	500	$	5	$	111,861,799	$	(111,455,584	)	-	$	-	$	432,325

See Notes to Condensed Financial Statements

4

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1. Nature of Operations

MedAmerica Properties Inc. (the “Company” or “MedAmerica”) was originally organized under the laws of the Commonwealth of Massachusetts in 1985, under the name VMS Hotel Investment Trust, for the purpose of investing in mortgage loans. The Company was subsequently reorganized as a Delaware corporation in 1987 and changed its name to B.H.I.T. Inc. In 2010, the Company changed its name from B.H.I.T. Inc. to Banyan Rail Services Inc. From 2009 to 2012, the Company experienced severe losses from an operating subsidiary in the rail services sector. In 2016, after exploring various industries and researching numerous companies, the board of directors elected to pursue investing in commercial real estate. In 2018, the Company began negotiating a transaction with a sponsor of real estate properties located in the United States. The Company entered into a letter of intent with the sponsor in September 2018, which was amended in November 2018 and April 2019. As of May 9, 2019, no definitive agreement has been executed. It is currently estimated that the transaction would be expected to be consummated late in the second quarter of 2019, but there can be no assurance that there will not be delays or that the Transaction will be successfully completed. 

In April 2017, our board of directors and the holders of a majority of our outstanding shares of common stock approved by written consent amendments to the Company’s certificate of incorporation to (1) change the name of the Company from “Banyan Rail Services Inc.” to “MedAmerica Properties Inc.,” and (2) effect a 1 for 10 reverse stock split of the issued and outstanding shares of common stock of the Company. On June 15, 2017, the Company filed these amendments with the Secretary of State of the State of Delaware and the name change and reverse stock split became effective with the Financial Industry Regulatory Authority, Inc. (“FINRA”) on June 20, 2017. As appropriate, all common stock share quantities have been updated to reflect the 1 for 10 reverse stock split.

Note 2. Basis of Presentation

The accompanying Financial Statements give effect to all adjustments necessary to present fairly the financial position and results of operations and cash flows of the Company.  In January 2019 the Company dissolved all of its subsidiaries and is no longer presenting consolidated financial statements.  All subsidiaries were inactive.  

Note 3. Liquidity and Profitability

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, the financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company management believes that cash on hand and a line of credit from a related party will be adequate to fund its limited overhead and other cash requirements for the next twelve months.

During 2017 the Company completed a private placement of its common stock, raising $1,940,005. As of March 31, 2019, the Company had a cash balance of approximately $76,000 and negative working capital of approximately $99,000..

We have undertaken, and will continue to implement, various measures to address our financial condition, including:

● Consummate the acquisition of 12 shopping centers referred to in Note 1 (the “Transaction”). We do not have an executed agreement and there can be no assurance we will be able to consummate the Transaction.

If the Transaction is not consummated:

• Curtailing costs and consolidating operations, where feasible.

• Seeking debt, equity and other forms of financing, including funding through strategic partnerships.

• Reducing operations to conserve cash.

• Investigating and pursuing transactions with third parties, including strategic transactions and relationships.

The Company management believes that these measures, coupled with cash on hand and a line of credit from a related party (see Note 9) will be adequate to fund its limited overhead and other cash requirements for the next twelve months. There can be no assurance that we will be able to consummate the Transaction or secure the additional funding we need. If our efforts to do so are unsuccessful, we will be required to further reduce or eliminate our operations. However, Boca Equity Partners LLC (“BEP”), an entity controlled by our chairman, has committed to funding operations through May, 2020 in the event the Transaction does not close.

5

Note 4. Summary of Significant Accounting Policies

Unaudited Interim Condensed Financial Information

The unaudited interim condensed financial statements of the Company as of March 31, 2019 for the three months ended March 31, 2019 and 2018 included herein have been prepared in accordance with the instructions for Form 10-Q under the Securities Exchange Act of 1934, as amended, and Article 8 of Regulation S-X under the Securities Act of 1933, as amended. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations relating to interim condensed financial statements.

In the opinion of management, the accompanying unaudited interim condensed financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position of the Company at March 31, 2019 and the results of its operations and its cash flow for the three months ended March 31, 2019 and 2018. The results of operations and cash flows for such periods are not necessarily indicative of results expected for the full year or for any future period.

Use of Estimates

The preparation of financial statements, in conformity with accounting principles generally accepted in the United States ("U.S. GAAP"), requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, equity, revenues and expenses and disclosures of contingent assets and liabilities at the date and period ending of the financial statements. Actual results could differ from those estimates.

Cash

The Company considers all cash, bank deposits and highly liquid investments with an original maturity of three months or less to be cash equivalents. From time to time our cash deposits exceed federally insured limits.

Equipment and Furnishings

Equipment and furnishings are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from 3 to 7 years. Expenditures for repairs and maintenance are charged to expense as incurred. For assets sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any related gain or loss is reflected in income for the period statement of operations.

Fair Value of Financial Instruments

Recorded financial instruments as of March 31, 2019, consist of cash and cash equivalents, accounts payable, accrued liabilities and short-term obligations. The related fair values of these financial instruments approximated their carrying values due to either the short-term nature of these instruments or based on the interest rates currently available to the Company.

Income (Loss) Per Common Share

The Company computes net income (loss) per common share in accordance with the provision included in Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) 260, Earnings per Share. Under ASC 260, basic and diluted income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares and common share equivalents outstanding during the period. Basic income (loss) per common share excludes the effect of potentially dilutive securities, while diluted income (loss) per common share reflects the potential dilution that would occur if securities or other contracts to issue common shares were exercised for, converted into or otherwise resulted in the issuance of common shares. The Company’s potentially dilutive securities are not included in the computation of diluted loss per share because their impact is anti-dilutive due to the net loss.

6

Income Taxes

The Company accounts for our income taxes using FASB ASC Topic 740, "Income Taxes", which requires the recognition of deferred tax liabilities and assets for expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

The Company follows the provisions regarding Accounting for Uncertainty in Income Taxes, which require the recognition of a financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. We applied these changes to tax positions for our fiscal years ending December 31, 2018 and December 31, 2017. We had no material unrecognized tax benefits and no adjustments to our financial position, results of operations or cash flows that were required. Generally, federal, state and local authorities may examine the Company's tax returns for three years from the date of filing. We do not expect that unrecognized tax benefits will increase within the next twelve months. We recognize accrued interest and penalties related to uncertain tax positions as income tax expense. 

Retained Earnings Distributions

The Company’s preferred stockholders are entitled to receive payment before any of the common stockholders upon a liquidation of the Company, and we cannot pay dividends on our common stock unless we first pay dividends required by our preferred stock.

Preferred Stock Dividends

The holder of Series A Cumulative Preferred Stock (“Preferred Stock”) are entitled to receive cumulative, non-compounded, cash dividends on each outstanding share of Preferred Stock at the rate of 10.0% of the issuance price per annum (“Preferred Dividends”), which began accumulating on January 1, 2010. The Preferred Dividends are payable semiannually to the holder of Preferred Stock, when and as declared by the Board of Directors.

Recently Issued Accounting Pronouncements

Management has determined that all recently issued accounting pronouncements will not have a material impact on the Company’s financial statements or do not apply to the Company’s operations.

7

Note 5. Equipment and Furnishings

The amount of equipment and furnishings as of March 31, 2019 and December 31, 2018, are as follows:

Description	March 31, 2019			December 31, 2018
Office equipment and furnishings	$	21,829		$	21,829
Computer equipment		787			787
Total		22,616			22,616
Less accumulated depreciation		(4,848	)		(4,040	)
Equipment and furnishings, net	$	17,768		$	18,576

Depreciation expense related to equipment and furnishings amounted to $808 for the three months ended March 31, 2019.

Note 6. Preferred Stock and Common Stock

Stock Split

In April 2017, the board of directors and the then majority shareholder approved a 1 for 10 reverse stock split (“Stock Split”) of the issued and outstanding shares of common stock of the Company. On June 15, 2017, the Company filed an amendment to its articles of incorporation with the Delaware Secretary of State effecting the Stock Split. The Stock Split became effective with the Financial Industry Regulatory Authority, Inc. (“FINRA”) on June 20, 2017.

Pursuant to the Stock Split, each outstanding share of the Company’s common stock was automatically exchanged for one - tenth of a share. As a result, each stockholder now owns a reduced number of shares of the Company’s common stock. The Stock Split affects all stockholders uniformly and does not affect any stockholder’s percentage ownership in the Company or the proportionate voting rights and other rights and preferences of the stockholders, except for adjustments that may result from the treatment of fractional shares, which have been rounded to the nearest whole share. The number of the Company’s authorized shares of common stock was not affected by the Stock Split.

Private Placement

From February 10, 2017 through December 31, 2017, the Company accepted subscriptions of $1,940,005 for unregistered shares of the Company’s common stock for $1.50 a share (the “2017 Private Placement”). The issuances of common stock were made in reliance on Section 4(a)(2) of the Securities Act of 1933 for the offer and sale of securities not involving a public offering and Rule 506(b) under the Securities Act. The proceeds from the 2017 Private Placement are being used for working capital and to fund operations. In 2017, the Company issued 1,293,334 shares of common stock under the 2017 Private Placement, along with 2,500 shares of common stock under a prior private placement.

Preferred Stock Exchange

In April 2017, the Company offered our preferred shareholders shares of our common stock in exchange for their Series A cumulative preferred stock (“Preferred Stock”) and accumulated preferred dividends outstanding as of December 31, 2016. Pursuant to the offer, each share of Preferred Stock would be exchanged for 20 shares of (post-split) common stock and each dollar of preferred dividend would be exchanged for 0.2 shares of common stock. All preferred shareholders, except one, accepted the offer resulting in the conversion of 9,875 shares of Preferred Stock and $301,656 of accumulated preferred dividends into 257,831 shares of common stock, which were issued in the third quarter of 2017. The effective date of the exchange was June 30, 2017. This exchange resulted in deemed dividends on preferred stock conversion of $148,125.

Subsequent to the reverse stock split, the private placement and the preferred stock exchange, there are 2,610,568 shares of common stock issued and outstanding, consisting of 1,056,903 shares after the reverse stock split, 1,293,334 shares from the private placement, 2,500 shares from a prior year private placement and 257,831 shares from the preferred stock and preferred dividend exchange.

8

Preferred Stock Dividends

The holder of Preferred Stock is entitled to receive cumulative, non-compounded cash dividends on each outstanding share of Preferred Stock at the rate of 10% of the Issuance Price per annum (“Preferred Dividends”), which began to accrue on January 1, 2010. Preferred Dividends are payable semiannually to the holder of Preferred Stock. Any Preferred Dividends due and unpaid on any Payment Date, whether or not declared by the board of directors, shall accrue with any other due and unpaid Preferred Dividends, regardless of whether there are profits, surplus or other funds of the Company legally available for payment of dividends.

Substantially all the Preferred stockholders had previously agreed to accept common stock in lieu of cash for payment of Preferred Dividends. In February 2016, the Company issued 29,856 shares of common stock in lieu of $29,249 of Preferred Dividends for those Preferred stockholders who accepted the common stock in lieu of the cash offer. The total accrued but unpaid Preferred Dividends is $27,361 as of March 31, 2019 and December 31, 2018. An additional $11,250 and $10,000 of cumulative Preferred Dividends are undeclared and unaccrued as of March 31, 2019 and December 31, 2018, respectively, and are not included in the balance sheet.

Common Stock

As of March 31, 2019 the Company’s board of directors and officers beneficially own 838,060 shares of the Company’s common stock or 32.10% of the outstanding common stock. Included in the 838,060 shares are 351,966 shares owned by Marino Family Holdings LLC controlled by our chairman, Gary O. Marino, and 91,348 shares owned by Banyan Rail Holdings LLC, of which Mr. Marino is the president and significant stockholder.           

Note 7. Earnings (Loss) per Share

The Company excluded from its diluted earnings per share calculation 500 common shares issuable upon conversion of shares of convertible preferred stock that were outstanding March 31, 2019 and 2018 as well as 70,000 and 60,000 options that were outstanding as of March 31, 2019 and 2018, respectively, as their inclusion would be anti-dilutive.

Note 8. Stock-Based Compensation

On August 23, 2017, the Company issued an aggregate of 60,000 stock options to its directors and officers. The related stock compensation expense was not material.

On June 11, 2018, the Company issued an aggregate of 10,000 stock options to a director as compensation for board services. The related stock compensation expense was not material.

The Company previously had stock option agreements with its directors and officers. Details of options activity is as follows:

	Number of Shares		Weighted Average Exercise Price per Share		Weighted Average Fair Value at Grant Date		Weighted Average Remaining Contractual Life		Intrinsic Value
Balance December 31, 2016		-	$	-		-		-		-
Options granted		60,000		8.00		-		-		-
Options exercised		-		-		-		-		-
Options expired		-		-		-		-		-
Balance December 31, 2017		60,000	$	8.00	$	-		4.75	$	-
Options granted		10,000		6.00		-		-		-
Options exercised		-		-		-		-		-
Options expired		-		-		-		-		-
Balance December 31, 2018		70,000	$	7.71	$	-		3.86	$	-
Options granted		-		-		-		-		-
Options exercised		-		-		-		-		-
Options expired		-		-		-		-		-
Balance March 31, 2019		70,000	$	7.71	$	-		3.61	$	-

The fair values of stock options are estimated using the Black-Scholes method, which takes into account variables such as estimated volatility, expected holding period, dividend yield, and the risk-free interest rate. The risk-free interest rate is the five-year treasury rate at the date of grant. The expected life is based on the contractual life of the options at the date of grant. All 70,000 options were fully vested at grant date. The intrinsic value is not material.

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Note 9. Related Party Relations and Transactions

Gary O. Marino, the Company’s chairman of the board, is the chairman, president, and chief executive officer of Boca Equity Partners LLC (“BEP”), Patriot Equity LLC (“Patriot”), Banyan Medical Partners LLC (“BMP”), and Banyan Surprise Plaza LLC (“BSP”). Mr. Marino owns 100% of Patriot, Patriot owns 100% of BMP and BSP through and along with other wholly owned subsidiaries. Mr. Marino, Mr. Paul S. Dennis, Mr. Donald Denbo and Mr. Bennett Marks, members of the Company's board of directors, Mr. Joseph Bencivenga, a member of the Company’s board of directors and the Company’s President and Chief Executive Officer and Ms. Patricia Sheridan, the Company’s Chief Financial Officer also hold membership interests in BEP.

On July 27, 2016, the Company entered into a Demand Note and Loan Agreement (the “Note”) with BEP providing for draws of up to $250,000. Loans under the Note bore interest at an annual rate of 10% and outstanding principal and interest were due on demand. This Note was cancelled and terminated on December 31, 2016 when the Company entered into a new Demand Note and Loan Agreement (the “New Note”) with BEP for $471,826. The New Note represents advances from BEP under the New Note, payments made since the date of the New Note and interest accrued thereon. The New Note bore interest at the rate of 10% per annum and is payable upon demand. BEP is committed to making advances to the Company under the New Note as the Company may from time to time request. The balance drawn on the New Note including accrued interest was paid in full May 31, 2017. The Note remains available to the Company to draw upon and the balance as of the date of this report due under the New Note is $0.

On September 13, 2018, the Company entered into an office lease and administrative support agreement (the “2018 Lease Agreement”) with BEP. The 2018 Lease Agreement has a month-to-month term commencing on September 1, 2018. The 2018 Lease Agreement provides for the Company’s use of a portion of BEP’s offices and certain overhead items at the BEP offices such as space, utilities and other administrative services for $5,000 a month. The 2018 Lease Agreement replaces the June 8, 2017 office lease and administrative support agreement between the Company and BEP. Total expense incurred under these agreements amounted to $15,000 and $45,000 for the quarters ended March 31, 2019 and 2018, respectively.

During 2018 the Company's President and CEO performed work for International Rail Partners LLC (“IRP”), an entity controlled by the Company’s Chairman. The Company billed back IRP for compensation and expenses in the amount of $125,090 for the year ended December 31, 2018 of which $57,244 related to compensation and expenses for the quarter ended March 31, 2018.  Compensation to the president ended July 31, 2018.  

The Company’s directors have not received cash compensation for their services in 2018 or 2017 but were compensated with stock options. See footnote 8 Stock-Based Compensation for further discussion.

As of December 31, 2018 and March 31, 2019, the Company’s board of directors and officers beneficially own 838,060 shares of the Company’s common stock or 32.10% of the outstanding common stock. Included in the 838,060 shares are 351,966 shares owned by Marino Family Holdings LLC controlled by our chairman, Gary O. Marino, and 91,348 shares owned by Banyan Rail Holdings LLC, of which Mr. Marino is the president and significant stockholder.

Note 10. Subsequent Events

The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the financial statements were issued for potential recognition or disclosure. Other than the following, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.

In April 2019, our board of directors and the holders of a majority of our outstanding shares of common stock approved by written consent an amendment to the Company’s Bylaws allowing for the compensation of its directors and officers serving as directors. This amendment is expected to be effective in May 2019.

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

The following discussion should be read in conjunction with the accompanying unaudited Financial Statements and notes thereto included under Part I, Item 1 of this Quarterly Report on Form 10-Q. In addition, reference should be made to our audited Financial Statements and notes thereto and related “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC”).

Cautionary Statement Concerning Forward-Looking Statements

This Quarterly Report on Form 10-Q contains information about the Company, some of which includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 including statements regarding the timing relating to the Transaction. Forward-looking statements are statements other than historical information or statements about our current condition. You can identify forward-looking statements by the use of terms such as “believes,” “contemplates,” “expects,” “may,” “will,” “could,” “should,” “would,” or “anticipates,” other similar phrases, or the negatives of these terms. We have based the forward-looking statements relating to our operations on our current expectations, estimates and projections about us and the markets we serve. We caution you that these statements are not guarantees of future performance and involve risks and uncertainties. These risks include internal issues relating to the shopping center limited liability companies including obtaining the required investor and lender consents. See also the Risk Factors in Item 1A of our 2018 Annual Report on Form 10-K, filed with the SEC on April 11, 2019. We have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Accordingly, the actual outcomes and results may differ materially from what we have expressed or forecast in the forward-looking statements. Any differences could result from a variety of factors, including the following:

● Closing the proposed strategic transaction discussed in this report; and

● Any of our other plans, objectives, expectations or intentions contained in this report that are not historical facts.

You should not place undue reliance on our forward-looking statements, which reflect our analysis only as of the date of this report. The risks and uncertainties listed above and elsewhere in this report and other documents that we file with the SEC, including our annual report on Form 10-K, quarterly reports on Form 10-Q, and any current reports on Form 8-K, must be carefully considered by any investor or potential investor in the Company. We undertake no obligation to update forward-looking statements, except as required by law.

Overview

MedAmerica is a real estate management company with limited operations. During 2018, up to the time we were introduced to the commercial real estate company described below, we were focused on seeking to acquire medical office buildings. None of our discussions concluded in any acquisitions.

As part of our search, we were introduced to the sponsor of multiple commercial real estate properties located in the United States in late 2018. After that introduction and continuing to date, we have been engaged in negotiations which, if consummated, would result in us executing merger agreements and consummating a strategic transaction (the “Transaction”) with MedAmerica becoming the owner of between 12 and 17 retail shopping centers, the sponsor of such properties appointing five of seven members of our board of directors, and the sponsor and its investors owning a substantial majority of our common stock and the sponsor and its investors ending up as our principal shareholders. We have not yet signed a binding agreement with respect to the Transaction and any such binding agreement will be subject to a number of closing conditions, including obtaining certain financing. There can be no assurance that the Transaction will be consummated.

Our History

The Company was originally organized under the laws of the Commonwealth of Massachusetts in 1985, under the name VMS Hotel Investment Trust, for the purpose of investing in mortgage loans. The Company was subsequently reorganized as a Delaware corporation in 1987 and changed its name to B.H.I.T. Inc. In 2010, the Company changed its name from B.H.I.T. Inc. to Banyan Rail Services Inc. From 2009 to 2012, the Company experienced severe losses from an operating subsidiary in the rail services sector. In 2016, after exploring various industries and researching numerous companies, the board of directors elected to pursue investing in commercial real estate. In 2017 the Company changed its name to MedAmerica Properties Inc.

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The Transaction

We have been negotiating with the sponsor of several limited liability companies, each of which owns a separate shopping center located in the United States. We have reached an agreement in principal with regard to the form of merger agreement and the proposed capitalization of the combined company. Assuming we sign the merger agreements and ultimately close the Transaction, the Company will initially own 12 shopping centers and will subsequently acquire an additional five shopping centers, subject to lender approval and other closing conditions. Each shopping center has its own indebtedness secured by the particular center. The real estate mortgages for the other five shopping centers are held by entities which issued commercial mortgage-backed securities for which the approval process is lengthier or otherwise need more time to close than the shopping centers we expect to acquire at the initial closing. Accordingly, at the initial closing the Company expects to acquire 12 shopping centers at which time the current investors in the shopping centers will own approximately 89.06% of the Company and our shareholders will own the remaining 10.94%. Assuming we close the Transaction and acquire all of the shopping centers, we will issue common stock to the sponsor and the current investors in the shopping centers who collectively will own approximately 92.76% of our common stock on a fully diluted basis with our current shareholders owning approximately 7.24%.

Closing is subject to a number of contingencies including approval by the required percentage of partners of each property-owning entity, obtaining satisfactory resolution of the proposed accounting treatment, execution of definitive merger agreements (the terms of which have been agreed upon), our board of director’s receipt of a fairness opinion, lender approvals, obtaining $47 million of financing to refinance existing indebtedness and to provide growth capital and other customary closing conditions.

It is currently estimated that the Transaction would be expected to be consummated late in the second quarter of 2019, but there can be no assurance that there will not be delays. We cannot assure you that we will sign the merger agreements or close the Transaction. If we do not close the Transaction, our board of directors will have to reexamine its plans with regard to acquiring real estate properties. See Item 1A “Risk Factors” in our 2018 Annual Report on Form 10-K, filed with the SEC on April 11, 2019.

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Critical Accounting Policies and Estimates

In response to the SEC's financial reporting release, FR-60, Cautionary Advice Regarding Disclosure About Critical Accounting Policies, the Company has selected its most subjective accounting estimation process for purposes of explaining the methodology used in calculating the estimate in addition to the inherent uncertainties pertaining to the estimate and the possible effects on the Company's financial condition.  These estimates involve certain assumptions that if incorrect could create a material adverse impact on the Company's results of operations and financial condition.  For a discussion of our significant accounting policies, See Note 4- "Summary of Significant Accounting Policies" in the accompanying Notes to Financial Statements.  

There were no material changes to our principal accounting estimates during the period covered by this report.    

Results from Operations

The following table summarizes our results for the three months ended March 31, 2019 and 2018:

	Three months ended March 31,						Variance
	2019			2018			$			%
General & administrative expenses	$	119,271		$	208,801		$	(89,530	)		-42.9	%
Loss from operations		(119,271	)		(208,801	)		89,530			-42.9	%
Interest expense		(493	)		(384	)		(109	)		28.4	%
Net loss	$	(119,764	)	$	(209,185	)	$	89,421			-42.7	%
Dividends for the benefit of preferred stockholders:
Preferred stock dividends		(1,250	)		(1,250	)		-			0.0	%
Net loss attributable to common stockholders	$	(121,014	)	$	(210,435	)	$	89,421			-42.5	%

General and Administrative Expenses

General and administrative expenses include: compensation expense, professional fees, insurance, office and rent expenses and costs related to being a public company.

For the three months ended March 31, 2019, general and administrative expenses decreased $90,000 compared to the three months ended March 31, 2018.

For the three months ended March 31, 2019, the overall decrease in general and administrative expenses is primarily due to:

● A decrease in travel and entertainment of approximately $44,000;

● A decrease in rent of approximately $30,000 paid to a related party;

● A decrease in officers’ compensation expense of approximately $22,500;

● A decrease in taxes of approximately $8,000;

● A decrease in investor relations of approximately $7,000;

● A decrease in computer expenses of approximately $3,000; and

● A decrease in other expenses of approximately $3,000.

● Offset by an increase in professional fees of approximately $28,000.

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Interest Expense

Interest expense was $493 and $384 for the three months ended March 31, 2019 and 2018, respectively. The increase in interest expense was due to the increase in the rate charged for the insurance loan financing.

Income Tax Expense

Income tax expense was $0 for the three months ended March 31, 2019 and 2018 due to a full valuation allowance being recorded by the Company for any deferred tax assets created as the result of any net operating losses generated by operations.

A valuation allowance is evaluated by considering all positive and negative evidence about whether the deferred tax assets will be realized. At the time of evaluation, the allowance can be either increased or reduced. A reduction could result in the complete elimination of the allowance if positive evidence indicates that the value of the deferred tax assets is no longer impaired and the allowance is no longer required.

Net Loss Attributable to Common Shareholders

Net loss attributable to common stockholders was ($0.05) and ($0.08) per share for the three months ended March 31, 2019 and 2018, respectively. The difference of ($0.03) per common share is primarily the result of a reduction in general and administrative expenses.

Financial Condition and Liquidity

Our cash balances at April 22, 2019, March 31, 2019 and December 31, 2018 were $33,514, $76,474 and $139,721, respectively. The following is a summary of our cash flow activity for the three months ended March 31, 2019 and 2018:

	Three Months Ended March 31,
	2019			2018
Net cash (used in) operating activities	$	(50,747	)	$	(216,630	)
Net cash used in investing activities	$	-		$	-
Net cash provided by (used in) financing activities	$	(12,500	)	$	(12,500	)

Net cash used by in operating activities        

For the three months ended March 31, 2019, net cash used in operating activities was $50,747 as compared to $216,630 for the three months ended March31, 2018. The decrease in cash used in operating activities was primarily due a reduction in general and administrative expenses and an increase in accounts payable and accrued expenses.

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Net cash used in by financing activities

For the three months ended March 31, 2019, net cash used in financing activities was $12,500 as compared to cash used in financing activities of $12,500 for the three months ended March 31, 2018. There was no change in net cash used in financing activities.

Pending the closing of the Transaction, the Company expects to be able to borrow funds from an affiliate of its Chairman in order to meet operating expenses. If the Transaction closes, the Company anticipates that it will have adequate working capital and will not have to resort to related party loans. If the proposed Transaction does not close, the Company will be reliant upon BEP unless it can obtain equity or debt financing from third parties.  BEP has committed to funding operations through May, 2020 in the event the Transaction does not close.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”) Rule 13a-15(e)) as of March 31, 2019.

Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of March 31, 2019. 

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during the quarter ended March 31, 2019, identified in connection with our evaluation that has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II — Other Information

Item 1. Legal Proceedings

The Company is not a party, nor is its property the subject of, any material pending legal proceedings.

Item 1A. Risk Factors

              There have been no material changes during the period covered by this report in the risk factors previously disclosed under "Risk Factors" in our 2018 Annual Report on Form 10-K.  

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.                               

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

10.4	Support Agreement, dated February 3, 2017, by and between MedAmerica Properties Inc. and Boca Equities Partners LLC. Exhibit 10.4 to the Form 10-K filed March 31, 2017 is incorporated by reference herein.
31.1*	Rule 13(a)-14(a)/15(d-(14(a) Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Rule 13(a)-14(a)/15(d)-14(a) Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**	Certification Pursuant to 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 Schema Document
101.CAL*	XBRL Calculation Document
101.DEF*	XBRL Definition Linkbase Document
101.LAB*	XBRL Label Linkbase Document
101.PRE*	XBRL Presentation Linkbase Document

*Filed herewith

**Furnished herewith

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Signatures

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

	MedAmerica Properties Inc.
Date: May 14, 2019	By:	/s/ Joseph C. Bencivenga
		Joseph C. Bencivenga President and Chief Executive Officer (Principal Executive Officer)

Date:  May 14, 2019	By:	/s/ Patricia K. Sheridan
		Patricia K. Sheridan Chief Financial Officer (Principal Financial Officer)

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