23 unchanged sentences
Subsequent Events
−Removed: In December 2019, a novel strain of coronavirus was reported in Wuhan, Hubei province, China.
−Removed: In the first several months of 2020, the virus, SARS-CoV-2, and resulting disease, COVID-19, spread to the United States, including New York State, the geographic location in which the Company operates.
−Removed: The Company's evaluation of the effects of these events is ongoing;
−Removed: however, in February and March 2020, some of our tenants began to experience decreasing demand for their products and services which may impact their ability to timely meet their lease obligations.
−Removed: Furthermore, on March 21 , 2020, New York Governor Andrew Cuomo issued an Executive Order entitled “New York State on PAUSE” (Policy that Assures Uniform Safety for Everyone) (the “Order”), pursuant to which, all non-essential employees (as defined by the State) must stay at home starting March 22, 2020 through April 19, 2020.
−Removed: The Order also includes a 90-day moratorium on any residential or commercial evictions.
−Removed: Beginning March 16, 2020, prior to the Order, the Company’s employees began temporarily working remotely to ensure the safety and well-being of our employees and their families.
−Removed: The Company’s technology infrastructure, for some time, has been set up to handle offsite seamless operations to address alternative disaster recovery disruption.
−Removed: As a result, all employees will continue to work remotely unless they report needing sick leave or family leave pursuant to regulated benefits.
−Removed: Small businesses and not-for-profit corporations, which account for approximately 39% ($834,000) of the Company’s projected annual rental revenues for 2020, are expected to be adversely affected disproportionately by the economic ramifications of COVID-19.
−Removed: Although it is difficult to estimate the duration and full extent of this disruption, the impact of COVID-19 on our future results could be significant and will largely depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus, the success of actions taken to contain or treat the coronavirus and reactions by consumers, companies, governmental entities and capital markets.
−Removed: We are actively working with our tenants to manage and mitigate the impact to COVID-19 on the Company’s operations, liquidity and resulting Net Asset Value.
−Removed: The COVID-19 public health crisis may also adversely impact our efforts to secure entitlements and the sale of our real estate.
−Removed: State and local governments are prioritizing COVID-19 crisis management and, to the extent possible, re-allocating resources accordingly which may adversely impact the timeline of our entitlements and technical approvals.
−Removed: Furthermore, the real estate market is also expected to be adversely affected which could further negatively impact the timing of sales and the resulting value of our real estate.
−Removed: The extent of the impact of COVID-19 on the Company's operational and financial performance and ultimately its Net Asset Value, will depend on future developments, including the duration and spread of the outbreak and related governmental or other regulatory actions.
−Removed: The Company has four employees.
−Removed: As a result, the Company’s ability to operate seamlessly and limit any adverse impact on its forecasted net asset value will also depend, in part, on whether any of its key employees are infected by the Coronavirus and become ill from COVID-19.
+Added: Contract Terminations.
+Added: Flowerfield - On August 27, 2019, the Company’s wholly owned subsidiary GSD Flowerfield, LLC entered into a Purchase and Sale Agreement (the “BSL Agreement”) for the sale of a 9.0-acre parcel of vacant land (the “BSL Agreement Property”) in the Flowerfield complex in Smithtown, New York for $16,800,000 to BSL St.
+Added: James LLC, a Delaware limited liability company (“BSL”).
+Added: The Agreement provided that BSL would have the right to terminate the BSL Agreement by written notice to GSD Flowerfield prior to the expiration of a defined inspection period (which had been extended via amendments to the BSL Agreement) if BSL was not fully satisfied, in BSL’s sole discretion, as to the status of title, suitability of the Property and all factors concerning same, in which case BSL would have the right to receive a refund of its earnest money deposit.
+Added: On March 16, 2021, the Company received a notice (the “BSL Termination Notice”) from BSL that it is terminating the BSL Agreement.
+Added: The BSL Termination Notice referenced the foregoing termination right and requested the return of the earnest money deposit to BSL in accordance with the provisions of the BSL Agreement.
+Added: The BSL Agreement Property is included in the Company’s subdivision application with the Town of Smithtown, New York, to subdivide the entire Flowerfield property into eight separate parcels (one parcel of which is a catering hall facility sold by the Company in 2002).
+Added: The Company believes the termination of the BSL Agreement should have no impact on the subdivision application, and will continue to actively market its entire Flowerfield property on the basis of eight subdivided lots subject to and contingent upon approvals for the subdivision and related entitlements.
+Added: Cortlandt Manor - As of December 7, 2019, the Company’s wholly owned subsidiaries GSD Cortlandt, LLC, a New York limited liability company and Buttonwood Acquisitions, LLC (together the “Cortlandt Subsidiaries”), executed a Purchase and Sale Agreement (the “SC Agreement”) for the sale of approximately 4.5 acres of its real property located in Cortlandt Manor, New York, together with improvements thereon (the “SC Agreement Property”) to Sound Cortlandt, LLC, a Delaware limited liability company (“SC LLC” for a purchase price of $5,720,000.
+Added: The SC Agreement provided that SC LLC would have the right to terminate the SC Agreement by written notice to the Cortlandt Subsidiaries prior to the expiration of a defined inspection period (which had been extended via amendments to the SC Agreement) if SC LLC was not fully satisfied, in SC LLC’s sole discretion, as to the status of title, suitability of the SC Agreement Property and all factors concerning same, in which case SC LLC would have the right to receive a refund of its earnest money deposit.
+Added: On February 1, 2021, the Company received a notice (the “SC Termination Notice”) from SC, LLC that it is terminating the SC Agreement.
+Added: The SC Termination Notice referenced the foregoing termination right and called for the Escrow Agent (as defined in the SC Agreement) to return the earnest money deposit immediately to SC LLC in accordance with the provisions of the SC Agreement.
+Added: The Company has made applications to the Town of Cortlandt (the “Town”) for a zoning amendment to rezone the entire Cortlandt property (owned by the Cortlandt Subsidiaries) into a Town Medical Oriented District (an “MOD) and to seek approval for a unified site plan.
+Added: The Company’s original site plan at the time of executing the SC Agreement sought to subdivide its entire Cortlandt Manor property into three parcels for the development of (i) a medical office building with retail, (ii) a multi-family residential housing project and (iii) an open space, passive recreation parcel.
+Added: The SC Agreement Property, which was the subject of the SC Agreement, is on the subdivision parcel in the original site plan for medical office building with ancillary retail space, but not on the multi-family residential housing parcel or the open space, passive recreation parcel.
+Added: In response to extensive public comments received during the Cortlandt Manor public hearing process and input from the Cortlandt Manor Town Board, the Company amended the site plan and subdivision application with the Town to reflect a two-lot subdivision comprising a combined total of 184,600 square feet of medical office space and 1,500 square feet of retail space.
+Added: The Company believes that the Town Board is expected to adopt an MOD designation for the Company’s Cortlandt property (inclusive of the two-lot subdivision and conceptual site plan approval) in early 2022.
Credit Facility .
−Removed: The Company amended and extended the Original Line which included extending the maturity date of the Interest-Only Phase to the earlier of April 30, 2020 or upon drawing down a total of $3,000,000 after which it automatically converts to a permanent loan maturing on the earlier of April 30, 2027 or 84 months after conversion to a permanent loan (the “Permanent Phase”).
−Removed: To secure access to additional working capital through the final sale date of the Cortlandt Property lots (“Lots”), the Company, through its subsidiary GSD Cortlandt, LLC (“GSD Cortlandt”) signed a commitment letter for a third loan evidenced by a non-revolving business line of credit agreement and promissory note with the Original Line bank for up to $2,500,000, which is scheduled to close in the second quarter of 2020.
−Removed: The term is 24 months, with an option to extend for an additional 12 months.
−Removed: The interest rate is a variable rate equal to the daily highest prime rate published by the Wall Street Journal plus 100 basis points (1%), rounded up to the nearest 1/8 percent), but in no event less than four and three quarters percent (4.75%).
−Removed: The ability to draw upon the line is limited to certain amounts, contingent upon whether GSD Cortlandt delivered signed contracts for one or both Lots.
−Removed: The line is secured by the Cortlandt property (approximately 14 acres) and cross collateralized by approximately 31.8 acres of the Flowerfield Industrial Park including the related buildings and leases.
−Removed: The Company anticipates modifying the terms of the loans following the completion of the subdivision so that the loans remain cross collateralized by the subdivided industrial park lot only.
−Removed: Effective February 27, 2020, the Company entered into an engagement letter with a national real estate finance firm (the “Firm”) pursuant to which the Firm agreed to assist the Company secure financing with prospective lenders, and the Company agreed to pay the Firm an origination fee equal to one percent (1%) of any loan secured by the Company with any lender introduced to the Company by the Firm other than designated excluded lenders with whom the Company has a preexisting relationship.
−Removed: The intended use of this facility is to finance tenant improvements on new leases, if any, and a reserve for additional working capital.
+Added: The Company amended and extended the working capital line which included extending the conversion date of the Interest-Only Phase to the earlier of May 20, 2021 or upon drawing down a total of $3,000,000 after which it automatically converts to a permanent loan maturing on the earlier of May 20, 2028 or 84 months after conversion to a permanent loan (the “Permanent Phase”).
+Added: On February 22, 2021, the Company, through its subsidiary GSD Cortlandt, LLC (“GSD Cortlandt”) amended its line to remove the contingency that required signed contracts on Cortlandt Manor to be able to draw on the line.
Directors, Executive Officers and Corporate Governance.
66 unchanged sentences
Palmedo has been a director of Lixte Biotechnology Holdings, Inc.
+Added: since 2005 and is currently a member of its Audit Committee.
Palmedo has shepherded numerous fledgling businesses in financial and technological markets and completed several financing agreements.
32 unchanged sentences
Section 16(a) of the Exchange Act requires that the Company’s directors, executive officers, and any person holding more than ten percent (“10% Holder”) of our common shares, file with the SEC reports of ownership changes, and that such individuals furnish the Company with copies of the reports.
−Removed: Based solely on the Company’s review of copies of Forms 3 and 4 and amendments thereto received by it during fiscal 2019 and Forms 5 and amendments thereto received by the Company with respect to fiscal 2019 and any written representations from certain reporting persons that no Form 5 is required, Gyrodyne believes that none of the Company’s executive officers, directors or 10% Holders failed to file on a timely basis reports required by section 16(a) of the Exchange Act during fiscal 2018.
−Removed: (d) Audit Committee Financial Expert
+Added: Based solely on the Company’s review of copies of Forms 3 and 4 and amendments thereto received by it during fiscal 2020 and Forms 5 and amendments thereto received by the Company with respect to fiscal 2020 and any written representations from certain reporting persons that no Form 5 is required, Gyrodyne believes that none of the Company’s executive officers, directors or 10% Holders failed to file on a timely basis reports required by section 16(a) of the Exchange Act during fiscal 2020 other than one Director who filed a late Form 5 with respect to the sale of 114 shares by each of the two trusts of which the Director serves as a trustee.
+Added: Audit Committee Financial Expert
The Board has an Audit Committee established in accordance with section 3(a)(58)(A) of the Exchange Act, which currently consists of Messrs.
6 unchanged sentences
as well as several other years of experience in the field of public accounting.
−Removed: (e) Code of Ethics
+Added: Code of Ethics
The Company has adopted a written Code of Ethics that applies to all its directors, officers and employees, including the Company’s Chief Executive Officer and Chief Financial Officer.
14 unchanged sentences
COO and Secretary
−Removed: (A) Consists of retention bonus payments vested and paid pursuant to the Retention Bonus Plan upon the sale of each of the real estate transactions closed during 2019 and 2018.
+Added: (A) Consists of retention bonus payments vested and paid pursuant to the Retention Bonus Plan upon the settlement of master lease from the sale of the Virginia Health Care Center.
The Registrant has concluded that aggregate amounts of perquisites and other personal benefits, securities or property to any of the current executives does not exceed $10,000 and that the information set forth in tabular form above is not rendered materially misleading by virtue of the omission of such personal benefits.
42 unchanged sentences
The Plan provides for bonuses to directors and to officers and employees determined by the gross sales proceeds from the sale of each property and the date of sale.
−Removed: The foregoing description reflects the terms set forth in in the plan as modified by three amendments.
The summary appearing below reflects the terms set forth in the Plan as modified by three amendments.
11 unchanged sentences
Other Employees
−Removed: 15% for the Chairman and 50% for the directors other than the Chairman (10% for each of the other five directors).
−Removed: The officer discretionary amount of 1.75% is vested but not allocated and will be allocated to the officers within the discretion of the Board.
+Added: 15% for the Chairman and 10% for each of the other five directors.
+Added: The officer discretionary amount of 1.75% will be allocated to the officers within the discretion of the Board.
Such shares of the bonus pool are earned only upon the completion of the sale of a property at a gross selling price equal to or greater than its Adjusted Appraised Value and is paid to the named beneficiaries of the Plan or their designees within 60 days of the completion of such sale or, if later, within 60 days of receipt of any subsequent post-completion installment payment related to such sale.
4 unchanged sentences
It also provides for entitlement to a future benefit in the event of death, voluntary termination following substantial reduction in compensation or board fees, mutually agreed separation to right-size the board or involuntary termination without cause, except that a participant will only be eligible to receive a benefit to the extent that a property is sold within three years following the separation event and the sale produces an internal rate of return equal to at least four percent of the property’s value as of December 31 immediately preceding such event and that the sale exceeded the Adjusted Appraised Value.
−Removed: The payments made during the twelve months ended December 31, 2019 and 2018 under the Plan relate to the settlement of the master lease from the Sale of the Virginia Health Care Center and the sale of one building in the Port Jefferson Professional Park, respectively, were as follows:
+Added: There were no payments made under the Plan during the twelve months ended December 31, 2020.
+Added: The payments made during the twelve months ended December 31, 2019 under the Plan relate to the settlement of the master lease from the Sale of the Virginia Health Care Center were as follows:
RETENTION BONUS PLAN PARTICPANTS
4 unchanged sentences
2020 DIRECTOR COMPENSATION
−Removed: The following table shows the compensation earned by or paid in cash to each of the Company’s non-officer directors for the year ended December 31, 2019:
+Added: The following table shows the compensation earned by each of the Company’s non-officer directors for the year ended December 31, 2020:
Fees earned or paid in cash
5 unchanged sentences
On December 6, 2019, the Company’s Board of Directors approved the Gyrodyne, LLC Nonqualified Deferred Compensation Plan for Employees and Directors (the “DCP”) effective as of January 1, 2020.
−Removed: The plan is a nonqualified deferred compensation plan maintained for officers and directors of the Company.
+Added: The DCP is a nonqualified deferred compensation plan maintained for officers and directors of the Company.
Under the DCP, officers and directors may elect to defer a portion of their compensation to the DCP and receive interest on such deferred payments at a fixed rate of 5%.
1 unchanged sentence
The foregoing description of the DCP does not purport to be complete and is qualified in its entirety by reference to the full text of the DCP, which is attached hereto as Exhibit 10.12.
−Removed: Each of the Directors elected (under the DCP) to defer 100% of their director fees for 2020.
+Added: Each of the Directors elected (under the DCP) to defer 100% of their director fees for 2020 and 2021.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
As of December 31, 2020, there were no equity compensation plans under which securities of the Company were authorized for issuance.
−Removed: The following table sets forth certain information as of March 25, 2020, regarding the beneficial ownership of the Company’s common shares by (i) each person who the Company believes to be the beneficial owner of more than 5% of its outstanding common shares, (ii) each present director, (iii) each person listed in the Summary Compensation Table under “Executive Compensation,” and (iv) all the Company’s present executive officers and directors as a group.
+Added: The following table sets forth certain information as of April 13, 2021, regarding the beneficial ownership of the Company’s common shares by (i) each person who the Company believes to be the beneficial owner of more than 5% of its outstanding common shares, (ii) each present director, (iii) each person listed in the Summary Compensation Table under “Executive Compensation,” and (iv) all the Company’s present executive officers and directors as a group.
Name and address of beneficial owner
−Removed: Amount and nature of beneficial ownership (1)
+Added: Amount and nature of
+Added: beneficial ownership (1)
Percent of Class (10)
6 unchanged sentences
Rye, NY 10580
−Removed: 3300 South Dixie Highway, Suite 1-365
−Removed: West Palm Beach, FL 33405
Grantham, Mayo, Van Otterloo & Co., LLC
1 unchanged sentence
Boston, MA 02110
+Added: 3300 South Dixie Highway, Suite 1-365
+Added: West Palm Beach, FL 33405
Towerview LLC.
21 unchanged sentences
James, NY 11780
−Removed: All executive officers and
−Removed: Directors as a group (8 persons)
+Added: All executive officers and Directors as a group (8 persons)
(1) Except as otherwise indicated, the beneficial owner has sole voting and investment power.
3 unchanged sentences
Jad Fakhry, collectively, the reporting persons.
−Removed: (3) On July 9, 2018, Gamco Investors Inc.
+Added: (3) On April 1, 2021, Gamco Investors Inc.
filed a Schedule 13D with the Securities and Exchange Commission stating that GAMCO, a group of investment funds, beneficially owns an aggregate of 170,870 common shares.
2 unchanged sentences
The Schedule 13D was filed by Mario Gabelli, David Goldman, Douglas Jamieson and Kevin Handwerker.
−Removed: (4) On January 23, 2018, Neil Subin filed a Schedule 13G with the Securities and Exchange Commission stating that he has the power to vote or direct the vote and has power to dispose of or direct the disposition of 117,151 common shares.
(4) On February 12, 2021, Grantham, Mayo, Van Otterloo & Co.
1 unchanged sentence
The Schedule 13G was filed by Gregory Pottle.
+Added: (5) On August 20, 2020, Neil Subin filed a Schedule 13G with the Securities and Exchange Commission stating that he has the power to vote or direct the vote and has power to dispose of or direct the disposition of 113,557 common shares.
(6) On January 12, 2021, Towerview LLC filed a Schedule 13G with the Securities and Exchange Commission stating that each reporting person has shared power to vote or direct the vote and has shared power to dispose of or direct the disposition of 101,500 common shares.
4 unchanged sentences
Lamb is a trustee of the Profit-Sharing Trust.
−Removed: (9) Does not include his wife’s ownership of 4,125 shares, or 400 shares in a trust for two relatives for which he is the Trustee, in which he denies any beneficial interest.
−Removed: (10) The percent of class is calculated on the basis of the number of shares outstanding, which is 1,482,680 as of March 25, 2020.
+Added: (9) Does not include his wife’s ownership of 4,125 shares in which he denies any beneficial interest.
+Added: (10) The percent of class is calculated on the basis of the number of shares outstanding, which is 1,482,680 as of April 13, 2021.
Ownership Limitation
7 unchanged sentences
A summary of the leasing arrangements is as follows:
−Removed: Total Commitment (excluding remaining renewal options)
−Removed: Additional Commitment (assumes two-year renewal option is exercised)
+Added: Total Commitment
+Added: (excluding remaining
+Added: renewal options)
+Added: Additional Commitment
+Added: (assumes two-year renewal
+Added: option is exercised)
Jan 2019-Dec 2020
9 unchanged sentences
Any space not subleased may be used by the tenant rent-free for certain stated art uses, although the tenant is responsible for certain passthrough expenses such as electric and heat.
−Removed: Since rent is only due if the space is sublet, the Company believes the fair value of the space to the extent not sublet reflects a below market lease over the term ending December 31, 2019 of $18,170 and total commitments including two-year renewal option of up to $72,680.
+Added: Since rent is only due if the space is sublet, the Company believes the fair value of the space to the extent not sublet reflects a below market lease over the year ending December 31, 2020 of $18,170 and total commitments including two-year renewal option of up to $72,680.
+Added: In December 2020, the tenant exercised the second and last renewal term option, extending the lease terms until December 31, 2022.
During the twelve months ended December 31, 2020 and 2019, respectively, the Company received rental revenue of $35,607 and $34,720, respectively.
5 unchanged sentences
The Company has compensation, nominating, investment and audit committees, the members of which are also independent as defined by the listing requirements of the Nasdaq Stock Market.
−Removed: Principal Account ing Fees and Services .
−Removed: The following is a summary of the fees billed to the Company by Baker Tilly Virchow Krause, LLP, its independent registered principal accountants, for professional services rendered for the years ended December 31, 2019 and 2018:
+Added: Principal Accounting Fees and Services.
+Added: The following is a summary of the fees billed to the Company by Baker Tilly US, LLP, its independent registered principal accountants, for professional services rendered for the years ended December 31, 2020 and 2019:
Fiscal December 31,
5 unchanged sentences
(3) Tax Fees consist of aggregate fees billed for professional services rendered by the Company’s principal accountant for tax compliance, tax advice and tax planning.
−Removed: The amounts disclosed consist of fees paid for the preparation of federal and state income tax returns.
+Added: The amounts disclosed consist of fees paid for the preparation of federal and state income tax returns and K-1’s.
The Audit Committee is responsible for the appointment, compensation and oversight of the work of the principal accountants and approves in advance any services to be performed by the principal accountants, whether audit-related or not.
3 unchanged sentences
Exhibits and Financial Statement Schedules.
−Removed: (a) Financial Statements :
+Added: Financial Statements:
Report of Independent Registered Public Accounting Firm
4 unchanged sentences
Schedule I, III, IV, V, VI, VII, VIII, IX, X, XI, XII and XIII.
−Removed: (b) Exhibits:
The following exhibits are either filed as part of this report or are incorporated herein by reference as indicated:
Amended and Restated Limited Liability Company Agreement of Gyrodyne, LLC (1)
−Removed: Second Amended and Restated Agreement of Limited Partnership of Callery-Judge Grove, dated as of February 9, 2005, by and among CJG Management, Ltd., as the general partner and those persons and entities whose names and addresses appear on the books and records of the Partnership as partners.
Compensation of Directors (2)
13 unchanged sentences
Nonqualified Deferred Compensation Plan (11)
−Removed: Board Advisor Agreement dated as of May 24, 2016 with Jad Fakhary (3)
+Added: Board Advisor Agreement dated as of May 24, 2016 with Jad Fakhry (12)
Amendment No.
5 unchanged sentences
Purchase and Sale Agreement effective as of December 7, 2019 between GSD Cortlandt LLC, Buttonwood LLC and Sound Cortlandt LLC (12)
−Removed: Engagement letter with a National Real Estate Finance Firm, effective February 27, 2020 (3)
+Added: Notice of Termination from Sound Cortlandt, LLC (2)
+Added: Notice of Termination from BSL St.
+Added: James LLC (2)
List of all subsidiaries (2)
10 unchanged sentences
2 to Form S-4, Annex F, filed with the Securities and Exchange Commission on June 17, 2014.
−Removed: Incorporated herein by Reference to the Annual Report Form KSB, filed with the Securities and Exchange Commission on July 5, 2005.
Filed as part of this report.
8 unchanged sentences
Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on December 13, 2019.
+Added: Incorporated herein by reference to Form 10-K, filed with the Securities and Exchange Commission on March 26, 2020.
Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on August 30, 2019.
3 unchanged sentences
Fitlin, President, Chief Executive Officer, Chief Financial Officer and Treasurer
−Removed: March 26, 2020
+Added: April 13, 2021
********************
3 unchanged sentences
Smith, Director
−Removed: March 26, 2020
+Added: April 13, 2021
/S/ Elliot H.
Levine, Director
−Removed: March 26, 2020
+Added: April 13, 2021
/S/ Ronald J.
Macklin, Director
−Removed: March 26, 2020
+Added: April 13, 2021
Lamb, Director
−Removed: March 26, 2020
+Added: April 13, 2021
Exhibit Index
Amended and Restated Limited Liability Company Agreement of Gyrodyne, LLC (1)
−Removed: Second Amended and Restated Agreement of Limited Partnership of Callery-Judge Grove, dated as of February 9, 2005, by and among CJG Management, Ltd., as the general partner and those persons and entities whose names and addresses appear on the books and records of the Partnership as partners.
Compensation of Directors (2)
13 unchanged sentences
Nonqualified Deferred Compensation Plan (11)
−Removed: Board Adviser Agreement dated as of May 24, 2016 with Jad Fakhry (3)
+Added: Board Advisor Agreement dated as of May 24, 2016 with Jad Fakhry (12)
Amendment No.
5 unchanged sentences
Purchase and Sale Agreement effective as of December 7, 2019 between GSD Cortlandt LLC, Buttonwood LLC and Sound Cortlandt LLC (12)
−Removed: Engagement letter with a National Real Estate Finance Firm, effective February 27, 2020 (3)
+Added: Notice of Termination from Sound Cortlandt, LLC (2)
+Added: Notice of Termination from BSL St.
+Added: James LLC (2)
List of all subsidiaries (2)
9 unchanged sentences
Incorporated herein by reference to Amendment No.
−Removed: 2 to Form S-4, filed with the Securities and Exchange Commission on June 17, 2014.
−Removed: Incorporated herein by reference to the Annual Report on Form 10-KSB, filed with the Securities and Exchange Commission on July 5, 2005.
+Added: 2 to Form S-4, Annex F, filed with the Securities and Exchange Commission on June 17, 2014.
Filed as part of this report.
8 unchanged sentences
Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on December 13, 2019.
+Added: Incorporated herein by reference to Form 10-K, filed with the Securities and Exchange Commission on March 26, 2020.
Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on August 30, 2019.
8 unchanged sentences
Report of Independent Registered Public Accounting Firm
−Removed: Consolidated Statements of Net Assets at December 31, 2019 and 2018 (liquidation basis)
+Added: Consolidated Statements of Net Assets as of December 31, 2020 and 2019 (liquidation basis)
Consolidated Statements of Changes in Net Assets for the years ended December 31, 2020 and 2019 (liquidation basis)
19 unchanged sentences
We believe that our audits provide a reasonable basis for our opinion.
−Removed: /s/ Baker Tilly Virchow Krause, LLP
−Removed: Melville, New York
+Added: Critical Audit Matter
+Added: The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:
+Added: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.
+Added: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
+Added: Liquidation Value of Real Estate Assets - Refer to Notes 2, 3, 7 and 13 to the Consolidated Financial Statements
+Added: Critical Audit Matter Description
+Added: The Company presents its consolidated financial statements under the liquidation basis of accounting and, accordingly, presents its real estate assets at their liquidation value at each reporting period.
+Added: The Company estimates the liquidation value of its real estate assets by using both income and market valuation techniques.
+Added: The market valuation techniques use estimates and assumptions based on market information, such as broker opinions of value, appraisals, and recent sales data for similar assets.
+Added: The income valuation technique consists of a discounted cash flow model.
+Added: As disclosed by management, the Company’s evaluation of anticipated discounted cash flows is subjective and is based, in part, on estimates and assumptions, such as market rental rates, capitalization rates, and discount rates that could differ materially from actual results.
+Added: We identified the liquidation value of real estate assets as a critical audit matter because of the significant estimates and assumptions management makes to determine the liquidation value of the real estate assets, specifically the estimates of market rental rates, capitalization rates, and discount rates for each real estate asset.
+Added: Performing audit procedures to evaluate the reasonableness of these estimates and assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.
+Added: How the Critical Audit Matter Was Addressed in the Audit
+Added: Our audit procedures related to the critical audit matter included, among other things, the following:
+Added: We obtained an understanding of the design and implementation of the controls over management’s evaluation of the key estimates and assumptions used in the determination of the liquidation value of real estate assets, including those over the selection of market rental rates, capitalization rates, and discount rates.
+Added: With the assistance of our fair value specialists, we performed the following procedures:
+Added: Assessed the reasonableness of the significant assumptions used in both real estate appraisals and discounted cash flow analyses, including estimates of market rental rates, capitalization rates, and discount rates.
+Added: Tested the source information underlying the assumptions.
+Added: Developed a range of independent estimates, regarding the assumptions, focusing on the geographical location and property type and compared our independent estimates to the estimates and assumptions used by the Company.
+Added: Tested the mathematical accuracy and completeness of the discounted cash flow analyses.
+Added: We evaluated the reasonableness of management’s discounted cash flow analyses by comparing management’s projections to the Company’s historical results and external market sources.
+Added: We evaluated whether the assumptions were consistent with evidence obtained in other areas of the audit.
+Added: We evaluated the impact of current market events and conditions, including the effect of COVID-19 pandemic, as well as any recent and relevant comparable transactions, on the valuation techniques and assumptions used by management.
+Added: We evaluated management’s ability to reasonably estimate liquidation value of real estate based on the subsequent sales of the Company’s properties.
We have served as the Company's auditor since 1990.
−Removed: March 26, 2020
+Added: /s/ Baker Tilly US, LLP
+Added: Melville, New York
+Added: April 13, 2021
PART I – FINANCIAL INFORMATION
7 unchanged sentences
Cash and cash equivalents
+Added: Restricted cash
Rent receivable
4 unchanged sentences
Tenant security deposits payable
−Removed: Mortgage loan payable
+Added: Mortgage loans payable
Estimated liquidation and operating costs net of receipts
Total Liabilities
−Removed: Net assets in liquidation
See notes to consolidated financial statements
3 unchanged sentences
Year ended December 31,
−Removed: Net assets in liquidation, beginning of period
−Removed: Changes in net assets in liquidation:
−Removed: Change in liquidation value of real estate
+Added: Net assets, beginning of period
+Added: Changes in net assets:
+Added: Change in real estate value
Remeasurement of assets and liabilities
−Removed: Net increase in liquidation value
−Removed: Net assets in liquidation, end of period
+Added: Net (decrease)/increase in value
+Added: Net assets, end of period
See notes to consolidated financial statements
1 unchanged sentence
AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
+Added: Notes to Consolidated Financial Statements (Liquidation Basis)
Years Ended December 31, 2020 and 2019
−Removed: Gyrodyne, LLC (including its subsidiaries, “Gyrodyne”, the “Company” or the “Registrant”) is a limited liability company formed under the laws of the State of New York whose primary business is the management of a portfolio of medical office and industrial properties and the pursuit of entitlement on such properties, which are located in Suffolk (“Flowerfield”) and Westchester Counties (“Cortlandt Manor”), New York.
+Added: Gyrodyne, LLC (including its subsidiaries, “Gyrodyne”, the “Company” or the “Registrant”) is a limited liability company formed under the laws of the State of New York whose primary business is the management of, and the pursuit of entitlements on, a portfolio of medical office and industrial properties located in Suffolk (“Flowerfield”) and Westchester Counties (“Cortlandt Manor”), New York State.
Substantially all of our developed properties are subject to leases in which the tenant reimburses the Company for a portion, all of or substantially all of the costs and/or cost increases for utilities, insurance, repairs, maintenance and real estate taxes.
1 unchanged sentence
Gyrodyne’s corporate strategy is to enhance the value of Flowerfield and Cortlandt Manor by pursuing entitlement opportunities and enhancing the value of its leases.
−Removed: The Board believes the aforementioned strategy will improve the chances of increasing the values for such properties.
−Removed: The value of the real estate reported in the consolidated statement of net assets as of December 31, 2019 (predicated on current asset values) includes some, but not all of the potential value impact that may result from such value enhancement efforts.
+Added: The Company believes the aforementioned strategy will improve the chances of increasing the values for such properties.
+Added: The value of the real estate reported in the consolidated statements of net assets as of December 31, 2020 and 2019 (predicated on current asset values) includes some, but not all of the potential value impact that may result from such value enhancement efforts.
There can be no assurance that our value enhancement efforts will result in property value increases that exceed the costs we incur in such efforts, or even any increase at all.
−Removed: Our efforts to generate the highest values for Flowerfield and Cortlandt Manor may involve in limited circumstances the pursuit of joint venture relationships, entitlements, other investments and/or other strategies to enhance the net value of Flowerfield and Cortlandt Manor to maximize the returns for our shareholders.
−Removed: The Company does not expect the pursuit of joint ventures, if any, to adversely affect the timing of distributions to our shareholders.
−Removed: Gyrodyne intends to dissolve after it completes the disposition of all of its real property assets, applies the proceeds of such dispositions first to settle any debts and claims, pending or otherwise, against Gyrodyne, and then makes liquidating distributions to holders of Gyrodyne common shares.
−Removed: The liquidation process and the amount and timing of distributions involve risks and uncertainties.
+Added: Our efforts to generate the highest values for Flowerfield and Cortlandt Manor may involve in limited circumstances other strategies to enhance the net value of Flowerfield and Cortlandt Manor to maximize the returns for our shareholders.
+Added: Gyrodyne intends to dissolve after it completes the disposition of all of its real property assets, applies the proceeds of such dispositions first to settle any debts and claims, pending or otherwise, against Gyrodyne, and then makes distributions to holders of Gyrodyne common shares.
+Added: The process of seeking entitlements to enhance property values and the amount and timing of distributions from proceeds of asset sales involve risks and uncertainties.
As such, it is impossible at this time to determine the ultimate amount of proceeds that will actually be distributed to our shareholders or the timing of such payments.
−Removed: Accordingly, no assurance can be given that the distributions will equal or exceed the estimate of net assets in liquidation presented in our consolidated statements of net assets.
+Added: Accordingly, no assurance can be given that the distributions will equal or exceed the estimate of net assets presented in our consolidated statements of net assets.
The actual nature, amount and timing of all distributions will be determined by Gyrodyne’s Board in its sole discretion and will depend in part upon the Company’s ability to convert our remaining assets into cash in compliance with our obligations under the Stipulation entered into in connection with the class action lawsuit (See Note 14 – Contingencies) and settle and pay our remaining liabilities and obligations.
−Removed: Under Gyrodyne’s Amended and Restated Limited Liability Company Agreement (the “LLC Agreement”), such dissolution may be effected upon the vote of holders of a majority of Gyrodyne common shares or, in the Board’s discretion and without any separate approval by the holders of the Gyrodyne common shares, at any time the value of Gyrodyne’s assets, as determined by the Board in good faith, is less than $1,000,000.
+Added: Under Gyrodyne’s Amended and Restated Limited Liability Company Agreement (the “LLC Agreement”), such dissolution may be effected upon the vote of holders of a majority of Gyrodyne common shares or, in the Company’s discretion and without any separate approval by the holders of the Gyrodyne common shares, at any time the value of Gyrodyne’s assets, as determined by the Company in good faith, is less than $1,000,000.
The Company’s remaining real estate investments, each of which is held in a single asset limited liability company wholly owned by the Company, consist of:
−Removed: the Cortlandt Manor Medical Center comprising approximately 34,000 square feet situated on approximately 13.8 acres;
−Removed: the Flowerfield Industrial Park comprising approximately 127,000 rentable square feet.
−Removed: The industrial park is multi-tenanted and situated on ten acres of a 68-acre property in St.
−Removed: James, New York, all of which is owned by the Company.
−Removed: Approximately 62 of the 68 acres are included in the subdivision application filed with the Town of Smithtown.
−Removed: Approximately 5 acres of the 68-acre Flowerfield industrial park are zoned residential and non-contiguous to the Flowerfield property and are being actively marketed for sale.
+Added: Cortlandt Manor:13.8 acres in Cortlandt Manor, New York, consisting of the 34,000 square foot Cortlandt Manor Medical Center;
+Added: 68 acres in St.
+Added: James, New York, including a 10-acre multi-tenanted industrial park comprising 127,000 rentable square feet.
+Added: 63 of the 68 acres are included in the subdivision application filed with the Town of Smithtown.
+Added: 5 acres of the 68 acres are zoned residential and non-contiguous to the Flowerfield property.
Summary of Significant Accounting Policies
−Removed: Gyrodyne intends to dissolve after it completes the disposition of all of its real property assets, applies the proceeds of such dispositions first to settle any debts and claims, pending or otherwise, against Gyrodyne, and then makes liquidating distributions to holders of Gyrodyne common shares.
+Added: Gyrodyne intends to dissolve after it completes the disposition of all of its real property assets, applies the proceeds of such dispositions first to settle any debts and claims, pending or otherwise, against Gyrodyne, and then makes distributions to holders of Gyrodyne common shares.
Therefore, effective September 1, 2015 Gyrodyne adopted the liquidation basis of accounting.
This basis of accounting is considered appropriate when, among other things, liquidation of the entity is “imminent”, as defined in ASC 205-30, Presentation of Financial Statements Liquidation Basis of Accounting.
−Removed: Under the LLC Agreement, the Board may elect, in its sole discretion and without any separate approval by shareholders, to dissolve the Company at any time the value of the Company’s assets, as determined by the Board in good faith, is less than $1 million.
+Added: Under the LLC Agreement, the Company may elect, in its sole discretion and without any separate approval by shareholders, to dissolve the Company at any time the value of the Company’s assets, as determined by the Company in good faith, is less than $1 million.
The LLC Agreement also provides that the Company will dissolve, and its affairs wound up, upon the sale, exchange or other disposition of all the real properties of the Company.
2 unchanged sentences
AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
+Added: Notes to Consolidated Financial Statements (Liquidation Basis)
Years Ended December 31, 2020 and 2019
−Removed: Principles of C onsolidation - The consolidated financial statements include the accounts of Gyrodyne and all subsidiaries.
+Added: Principles of Consolidation - The consolidated financial statements include the accounts of Gyrodyne and all subsidiaries.
All consolidated subsidiaries are wholly owned.
12 unchanged sentences
In particular, the estimates of our costs will vary with the length of time necessary to complete the plan of liquidation, which is currently anticipated to be completed by December 31, 2022.
−Removed: The Company is in the process of pursuing entitlements and density, and our ability to obtain required permits and authorizations is subject to factors beyond our control, including environmental concerns of governmental entities, community groups and purchasers (Purchase and Sale Agreement entered but not yet closed/prospective purchasers).
+Added: The Company is in the process of pursuing entitlements and density, and our ability to obtain required permits and authorizations is subject to factors beyond our control, including environmental concerns of governmental entities, community groups and purchasers.
The process will involve extensive analysis internally at the government entity level, as well as between government entities such as town planning departments and Gyrodyne and or purchasers, and will continue up until such time as entitlement and density decisions are made by the relevant government entities.
The Company hopes to secure favorable decisions on entitlements and density so that we can then seek the sale of our remaining properties at higher prices (than those achievable under their current entitlements) and then proceed with the liquidation and dissolution of the Company.
+Added: Any deviation in use or density between what we are pursuing in our entitlement efforts and what is ultimately permitted could have a material impact on value.
The Company expects the process of pursuing entitlements, density, sales, liquidation and dissolution could extend through December 31, 2022 with the ultimate timing to a certain extent managed by Gyrodyne but also dependent upon and under the control of the applicable municipality’s planning board or other governmental authority and or purchasers.
−Removed: Accordingly, it is not possible to predict with certainty the timing or aggregate amount which may ultimately be distributed to common shareholders and no assurance can be given that the distributions will equal or exceed the estimate presented in the accompanying statements of net assets.
+Added: Accordingly, it is not possible to predict with certainty the timing or aggregate amount which may ultimately be distributed to common shareholders and no assurance can be given that the distributions will equal or exceed the estimate presented in the accompanying consolidated statements of net assets.
The Company’s assumptions and estimates (including the sales proceeds of all its real estate holdings, selling costs, retention bonus payments, rental revenues, rental expenses, capital expenditures, land entitlement costs, general and administrative fees, director and officer liability and reimbursement, post liquidation insurance tail coverage policy and final liquidation costs) are based on completing the liquidation by December 31, 2022.
5 unchanged sentences
AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
+Added: Notes to Consolidated Financial Statements (Liquidation Basis)
Years Ended December 31, 2020 and 2019
2 unchanged sentences
Management makes estimates of the collectability of rents receivable.
−Removed: Management specifically analyzes receivables and historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts.
+Added: Management specifically analyzes receivables and historical bad debts, tenant concentrations, tenant creditworthiness, current economic trends, including the impact of the outbreak of the novel strain of coronavirus (COVID-19) on tenants’ business, and changes in tenant payment patterns when evaluating the adequacy of the allowance for doubtful accounts.
Estimated Distributions per Share – Under the liquidation basis of accounting, the Company reports estimated distributions per share data by dividing net assets in liquidation by the number of shares outstanding.
−Removed: New A ccounting P ronouncements - Management has evaluated the impact of newly issued accounting pronouncements, whether effective or not as of December 31, 2019, and has concluded that they will not have a material impact on the Company’s consolidated financial statements since the Company reports on a liquidation basis.
−Removed: Statements of Net Assets in Liquidation
−Removed: Net assets in liquidation at December 31, 2019 would result in estimated liquidating distributions of approximately $21.16 per common share.
−Removed: This is an increase of $3.05 from the December 31, 2018 net assets in liquidation of $18.11 per common share.
−Removed: The increase in net assets in liquidation results from an increase in the real estate value of $12.1 million ($8.14 per share) of the properties that are the subject of the purchase and sale agreements with BSL St.
−Removed: James LLC and Sound Cortlandt, LLC (see note 5), respectively, and other adjustments to the remaining properties partially offset by an increase in the expense reserve (the estimated costs in excess of receipts) per share by $7.5 million ($5.09 per share).
−Removed: The increase in the expense reserve is mainly the result of an extension in the estimated liquidation timeline of 18 months attributable to the pursuit of entitlements (and the associated costs), entitlement costs and an increase to the retention bonus payments and selling costs as a result of the increase in real estate value.
−Removed: The cash balance at the end of the liquidation period (currently estimated to be December 31, 2021, although the estimated completion of the liquidation period may change), excluding any interim distributions, is estimated based on the December 31, 2019 cash balance of $2.2 million with adjustments for the following items which are estimated through December 31, 2021:
+Added: New Accounting Pronouncements - Management has evaluated the impact of newly issued accounting pronouncements, whether effective or not as of December 31, 2020, and has concluded that they will not have a material impact on the Company’s consolidated financial statements since the Company reports on a liquidation basis.
+Added: Statements of Net Assets
+Added: Net assets as of December 31, 2020 and 2019 would result in estimated distributions of $22,487,944 and $31,369,637, or approximately $15.17 and $21.16 per common share, respectively, based on 1,482,680 shares outstanding.
+Added: The decrease of $8,881,693 or $5.99 per share is mainly attributable to the change in the estimated value of the real estate, due to the current status of entitlement uses and market conditions, the extension of the liquidation period and additional land development costs, offset by a decrease in estimated selling costs and estimated retention bonus.
+Added: More specifically, in response to the extensive public comments received during the Cortlandt Manor State Environmental Quality Review Draft Generic Environmental Impact Study (“SEQR DGEIS”) public hearing process and input from the Cortlandt Manor Town Board, the Company amended the Cortlandt Manor site plan and subdivision application with the Town to develop the Cortlandt Manor property as follows:
+Added: SUBDIVISION LOT #
+Added: BUILDING SIZE/YIELD
+Added: Medical office Lot #1
+Added: Retail (Lot #1)
+Added: Medical Office Lot #2
+Added: The original site plan, in response to the Town’s request, was a mixed-use plan comprising of 100,000 square feet of medical use, 4,000 square feet of retail and 200 units of multitenant residential use.
+Added: The change in use from partly residential to mostly medical combined with the reduction in retail and the cancellation of the purchase and sale agreement on a portion of the Cortlandt Manor property resulted in a reduction to the estimated real estate value by approximately $3,820,000.
+Added: The remaining decrease in value of approximately $5,400,000 is driven by the market decline in real estate value in Flowerfield, including the termination of the BSL Agreement, that is directly related to and stems from the impact of the pandemic.
+Added: The Town of Cortlandt has expressed preliminary demands for certain offsite improvements that are directly related to the higher traffic related to medical.
+Added: Furthermore, the pandemic continues to adversely impact medical office but has created a significant demand for residential real estate.
+Added: As a result, contingent on discussions with the Town of Cortlandt on the pandemic’s impact to the local market, we may further amend our site plan to include some residential component if doing so will provide a higher return with an equivalent timeline, although there can be no assurance that such amended plan will be approved.
+Added: Additionally, the pandemic has also adversely impacted demand for office (including medical office) and hotel development “on spec”.
+Added: The Company’s subdivision plan at Flowerfield will allow for any combination of the aforementioned uses and is marketing the undeveloped lots to reflect such flexibility.
+Added: GYRODYNE, LLC
+Added: AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements (Liquidation Basis)
+Added: Years Ended December 31, 2020 and 2019
+Added: The value degradation of $9,220,000 net of the lower bonuses and selling costs of $1,767,038 and $439,203, respectively, directly reduced the estimated net assets by $7,013,759 or $4.73 per share.
+Added: The cash balance at the end of the liquidation period (currently estimated to be December 31, 2022, although the estimated completion of the liquidation period may change), excluding any interim distributions, is estimated based on adjustments for the following items which are estimated through December 31, 2022:
The estimated cash receipts from the operation of the Company’s properties net of rental property related expenditures as well as costs expected to be incurred to preserve or improve the net realizable value of the properties at their estimated gross sales proceeds.
Net proceeds from the sale of all the Company’s real estate holdings.
−Removed: The general and administrative expenses and or liabilities associated with operations and the liquidation of the Company including severance, director and officer liability inclusive of post liquidation tail policy coverage, and financial and legal fees to complete the liquidation.
−Removed: Costs for the pursuit of entitlement of the Flowerfield and Cortlandt Manor properties, to maximize value.
−Removed: Retention bonus amounts based on the net realizable value of the real estate under the Retention Bonus Plan (See Note 12).
−Removed: Proceeds from the draw downs on the Company’s credit facilities to fund tenant improvements and working capital and costs to repay such outstanding debt.
+Added: The general and administrative expenses and or liabilities associated with operations and the liquidation of the Company including severance, director and officer liability coverage including post liquidation tail policy coverage, and financial and legal fees to complete the liquidation.
+Added: Costs for the pursuit of entitlements on the Flowerfield and Cortlandt Manor properties.
+Added: Retention bonus amounts (See Note 12).
+Added: Costs, including principal payments, net of draw-downs on the Company’s credit facilities to fund tenant improvements and working capital and related fees.
The Company estimates the net realizable value of its real estate assets by using income and market valuation techniques.
2 unchanged sentences
The cash flow models include estimated cash inflows and outflows over a specified holding period.
−Removed: These cash flows may include contractual rental revenues, projected future rental revenues and expenses and forecasted common area capital and tenant improvements and lease commissions based upon market conditions determined through discussion with local real estate professionals, experience the Company has with its other owned properties in such markets and expectations for growth.
+Added: These cash flows may include contractual rental revenues, projected future rental revenues and expenses and forecasted capital improvements and lease commissions based upon market conditions determined through discussion with local real estate professionals and experience the Company has with its other owned properties in such markets.
Capitalization rates and discount rates utilized in these models are estimated by management based upon rates that management believes to be within a reasonable range of current market rates for the respective properties based upon an analysis of factors such as property and tenant quality, geographical location and local supply and demand observations.
−Removed: To the extent the Company underestimates forecasted cash outflows (tenant improvements, lease commissions and operating costs) or overestimates forecasted cash inflows (rental revenue rates), the estimated net realizable value of its real estate assets could be overstated.
−Removed: GYRODYNE, LLC
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: Years Ended December 31, 2019 and 2018
−Removed: The Company is pursuing various avenues to maximize total value during the liquidation process so that we can maximize distributions to our shareholders.
−Removed: The Company estimates that it will incur approximately $1.8 million (included in the statement of net assets as part of the estimated liquidation and operating costs net of receipts, See Note 4) in land entitlement costs from January 2020 through the end of the liquidation period, currently estimated to conclude on or about December 31, 2021, in an effort to obtain entitlements, including special permits.
−Removed: The Company believes the commitment of these resources will enable the Company to position the properties for sale with all entitlements necessary to maximize the Flowerfield and Cortlandt Manor property values.
+Added: To the extent the Company underestimates forecasted cash outflows (capital improvements, lease commissions and operating costs) or overestimates forecasted cash inflows (rental revenue rates), the estimated net realizable value of its real estate assets could be overstated.
+Added: The Company estimates that it will incur approximately $1.5 million (included in the consolidated statement of net assets as part of the estimated liquidation and operating costs net of receipts, See Note 4) in land entitlement costs from January 2021 through the end of the liquidation period, currently estimated to conclude on or about December 31, 2022, in an effort to obtain entitlements, including special permits.
+Added: The Company believes the commitment of these resources will enable the Company to position the properties for sale with all entitlements necessary to maximize the Flowerfield and Cortlandt Manor property values and resulting distributions.
During the year ended December 31, 2020, the Company incurred approximately $1.0 million of land entitlement costs, consisting predominately of engineering fees.
−Removed: The Company believes the remaining balance of $1.8 million (an aggregate of approximately $556,000 which Company vendors have agreed to defer until the first post subdivision property lot is sold) will be incurred from January 2020 through the end of the liquidation period.
+Added: The Company believes the remaining balance of $1.5 million (approximately $321,000 of which certain of the Company service vendors have agreed to defer until the first post subdivision property lot is sold) will be incurred from January 2021 through the end of the liquidation period.
The Company does not intend to develop the properties but rather to commit resources to position the properties for sale in a timely manner with all entitlements necessary to achieve maximum pre-construction values.
The costs and time frame to achieve the entitlements could change due to a range of factors including a shift in the value of certain entitlements making it more profitable to pursue a different mix of entitlements and the dynamics of the real estate market.
−Removed: As a result, the Company has focused and will continue to focus its land entitlement efforts on achieving the highest and best use.
+Added: As a result, the Company has focused and will continue to focus its land entitlement efforts on achieving the highest and best use while considering the time necessary to achieve such entitlements.
During the process of pursuing such entitlements, the Company may entertain offers from potential buyers who may be willing to pay premiums for the properties that the Company finds more acceptable from a timing or value perspective than completing the entitlement processes itself.
1 unchanged sentence
There can be no assurance that our value enhancement efforts will result in property value increases that exceed the costs we incur in such efforts, or even any increase at all.
−Removed: The net assets in liquidation at December 31, 2019 ($31,369,637) and 2018 ($26,846,670) results in estimated liquidating distributions of approximately $21.16 and $18.11, respectively, per common share (based on 1,482,680 shares outstanding), based on estimates and other indications of sales value (predicated on current asset values including the purchase prices set forth in the purchase and sale agreements with BSL St.
−Removed: James LLC and Sound Cortlandt, LLC, respectively, for the properties that are subject of such agreements) which includes some but not all of the potential sales proceeds that may result directly or indirectly from our land entitlement efforts.
−Removed: Some of the additional value that may be derived from the land entitlement efforts is not included in the estimated liquidating distributions as of December 31, 2019 because the amount of such additional value that may result from such efforts are too difficult to predict with sufficient certainty.
+Added: GYRODYNE, LLC
+Added: AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements (Liquidation Basis)
+Added: Years Ended December 31, 2020 and 2019
+Added: The net assets as of December 31, 2020 ($22,487,944) and 2019 ($31,369,637) results in estimated distributions of approximately $15.17 and $21.16, respectively, per common share (based on 1,482,680 shares outstanding), based on estimates and other indications of sales value (predicated on current asset values) which includes some but not all of the potential sales proceeds that may result directly or indirectly from our land entitlement efforts.
+Added: Some of the additional value that may be derived from the land entitlement efforts is not included in the estimated distributions as of December 31, 2020 because the amount of such additional value that may result from such efforts are too difficult to predict with sufficient certainty.
The Company believes the land entitlement efforts will enhance estimated distributions per share through the improved values (a large amount of which has already been included in the reported value for real estate held for sale) from the sales of the Flowerfield and Cortlandt Manor properties net of the costs to achieve the improved values and other expenses.
−Removed: This estimate of liquidating distributions includes projections of costs and expenses to be incurred during the period required to complete the plan of liquidation.
+Added: This estimate of distributions includes projections of costs and expenses to be incurred during the period required to complete the plan of liquidation.
There is inherent uncertainty with these projections, and they could change materially based on the timing of the sales, change in values of the Cortlandt Manor and/or Flowerfield properties (whether market driven or resulting from the land entitlement efforts) net of any bonuses (if such values exceed the minimum values required to pay bonuses under the retention bonus plan), favorable or unfavorable changes in the land entitlement costs, the performance of the underlying assets, the market for commercial real estate properties generally and any changes in the underlying assumptions of the projected cash flows.
4 unchanged sentences
These costs are estimated and are anticipated to be paid during the liquidation period.
−Removed: GYRODYNE, LLC
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: Years Ended December 31, 2019 and 2018
The change in the liability for estimated costs in excess of estimated receipts during liquidation from January 1, 2020 through December 31, 2020 is as follows:
−Removed: January 1, 2019
−Removed: Expenditures/ (Receipts)
−Removed: Remeasurement of Assets and Liabilities
−Removed: December 31, 2019
−Removed: Estimated net inflows from investment of real estate
+Added: Expenditures/
+Added: Remeasurement of
+Added: Assets and Liabilities
+Added: Estimated rents and reimbursements
Property operating costs
−Removed: Tenant improvements
−Removed: Common area capital expenditures
+Added: Capital expenditures
Land entitlement costs
3 unchanged sentences
Less prepaid expenses and other assets
−Removed: Liability for estimated costs in excess of estimated receipts during liquidation**
+Added: Liability for estimated liquidation and operating costs net of estimated receipts
+Added: GYRODYNE, LLC
+Added: AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements (Liquidation Basis)
+Added: Years Ended December 31, 2020 and 2019
+Added: *The Company reached agreements with certain service vendors to defer payment of approximately $321,000 of the $1.5 million until the closing of the first property lot sale that is the subject of either the Flowerfield or Cortlandt Manor subdivision, respectively.
**The amounts reported are based on the provisions of the retention bonus plan and the reported amount of the real estate assets estimated net realizable value.
−Removed: ** These estimates are based on the liquidation being completed by December 31, 2021.
−Removed: The remeasurement is the result of the extension, entitlement costs and increased retention bonus payments and selling costs attributable to the increase in real estate values.
+Added: Based on the estimated real estate value of the Cortlandt property, aggregate proceeds from the sale of the two Cortlandt lots would not exceed the adjusted floor under the retention bonus plan and therefore the above table only reflects the projected bonus from the sale of the Flowerfield property.
The change in the liability for estimated costs in excess of estimated receipts during liquidation from January 1, 2019 through December 31, 2019 is as follows:
−Removed: January 1, 2018
−Removed: Expenditures/ (Receipts)
−Removed: Remeasurement of Assets and Liabilities
−Removed: December 31, 2018
−Removed: Estimated net inflows from investment of real estate
+Added: Expenditures/
+Added: Remeasurement of
+Added: Assets and Liabilities
+Added: Estimated rents and reimbursements
Property operating costs
−Removed: Tenant improvements
−Removed: Common area capital expenditures
+Added: Capital expenditures
Land entitlement costs
3 unchanged sentences
Less prepaid expenses and other assets
−Removed: Liability for estimated costs in excess of estimated receipts during liquidation**
+Added: Liability for estimated liquidation and operating costs net of estimated receipts
*The amounts reported are based on the provisions of the retention bonus plan and the reported amount of the real estate assets estimated net realizable value.
−Removed: **These estimates were based on the liquidation being completed by June 30, 2020.
+Added: Disposition Activities
+Added: Properties Under Contract
+Added: Flowerfield - On May 11, 2020, the Company’s wholly owned subsidiary GSD Flowerfield, LLC entered into a Purchase and Sale Agreement (the “Non-Contiguous Property Agreement”) for the sale of a 5.0-acre parcel of vacant land (the “Non-Contiguous Property”) that is non-contiguous to and not part of the Flowerfield complex in Smithtown, New York for a purchase price of $500,000.
+Added: Under the Non-Contiguous Property Agreement, $25,000 of the purchase price was deposited in escrow at signing with the $475,000 balance payable at closing, subject to Buyer’s right to terminate as described below.
+Added: Under the Non-Contiguous Property Agreement:
+Added: (i) Buyer will have the right during an investigation period to conduct a phase 1 environmental survey and or other related analysis.
+Added: Buyer will have the right to terminate the Non-Contiguous Property Agreement, during the investigation period, by written notice to GSD Flowerfield if Buyer is not fully satisfied, in its sole discretion, as to the status of title, suitability of the property and all factors concerning same, in which case Buyer will have the right to receive a refund of its down payment;
+Added: (ii) unless Buyer terminates the Non-Contiguous Property Agreement on or prior to the end of the investigation period, the closing will occur on the 20th day following the earlier of (y) the Town of Smithtown’s granting of the Approvals (as defined in the Non-Contiguous Property Agreement and as described below);
+Added: or (z) Buyer’s waiver of such Approvals.
GYRODYNE, LLC
AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
+Added: Notes to Consolidated Financial Statements (Liquidation Basis)
Years Ended December 31, 2020 and 2019
−Removed: Disposition Activities
−Removed: Flowerfield - On August 27, 2019, the Company’s wholly-owned subsidiary GSD Flowerfield, LLC entered into a Purchase and Sale Agreement (the “BSL Agreement”) for the sale of an approximately 9.0 acre parcel of vacant land in the Flowerfield complex in Smithtown, New York for $16,800,000 to BSL St.
+Added: The Non-Contiguous Property Agreement is also contingent on the receipt of a Certificate of Correction/Subdivision Plan (“Correction Plan”) signed and approved by the Town of Smithtown and the Suffolk County Department of Health Services (“SCDHS”) for the Non-Contiguous Property and the recharge basin and building Permits Approval (as defined in the Non-Contiguous Property Agreement and as described below).
+Added: The Approval condition requires that the Buyer obtain the Correction Plan to create the two parcels and the recharge basin (as generally depicted in the Non-Contiguous Property Agreement) within a specified time (the “Approval Period”) following the last day of the investigation period.
+Added: The Correction Plan is specifically delineated in the Non-Contiguous Property Agreement.
+Added: In March 2021, the Buyer-received the Correction Plan signed and approved by the Town of Smithtown and the SCDHS for the Non-Contiguous Property and the recharge basins.
+Added: As a result, the Company anticipates the closing to occur during the second quarter of 2021.
+Added: Terminated Contracts
+Added: Flowerfield - On August 27, 2019, the Company’s wholly owned subsidiary GSD Flowerfield, LLC entered into a Purchase and Sale Agreement (the “BSL Agreement”) for the sale of a 9.0-acre parcel of vacant land (the “BSL Agreement Property”) in the Flowerfield complex in Smithtown, New York for $16,800,000 to BSL St.
James LLC, a Delaware limited liability company (“BSL”).
−Removed: Under the BSL Agreement:
−Removed: (i) BSL will have the right to terminate the BSL Agreement, during an investigation period, by written notice to GSD if BSL is not fully satisfied, in its sole discretion, as to the status of title, suitability of the Premises and all factors concerning same, in which case BSL will have the right to receive a refund of its earnest money deposit;
−Removed: (ii) if BSL does not terminate the BSL Agreement on or prior to the end of the investigation period, BSL will be obligated to deliver an additional earnest money deposit to the escrow agent, which together with the initial earnest money deposit will be applied toward the purchase price at closing;
−Removed: (iii) unless BSL terminates the BSL Agreement on or prior to the end of the investigation period, the closing will occur on the 30th day following the earlier of (y) the Town of Smithtown’s granting of the Site Plan Approval (as defined in the BSL Agreement and as described below);
−Removed: or (z) BSL’s waiver of the Site Plan Approval.
−Removed: The BSL Agreement is also contingent on the receipt of Subdivision Approval (as defined in the BSL Agreement and as described below).
−Removed: The Subdivision Approval condition requires that GSD obtain a subdivision of the Gyrodyne/Flowerfield complex into separate parcels to create the Property (as generally depicted in the BSL Agreement) within a specified time (the “Subdivision Approval Period”) following the last day of the investigation period.
−Removed: If the Subdivision Approval is not obtained within the Subdivision Approval Period, each of GSD and BSL have the right to terminate the BSL Agreement.
−Removed: BSL will also have a limited right to terminate the BSL Agreement in the event the Subdivision Approval contains requirements specified in the BSL Agreement.
−Removed: If Subdivision Approval has not been denied by the Town of Smithtown at or prior to the last day of the Subdivision Approval Period, GSD shall have the right to extend its time to obtain the Subdivision Approval for a specified period of time.
−Removed: If Subdivision Approval is not obtained within such additional time, each of GSD and BSL have the right to terminate the BSL Agreement.
−Removed: The Site Plan Approval is specifically delineated in the BSL Agreement.
−Removed: If BSL fails to obtain the Site Plan Approval prior to the end of the site plan approval period, BSL may cancel the BSL Agreement, waive the Site Plan Approval contingency, or extend the site plan period for a specified period upon the payment of an extension fee.
−Removed: If, after such extension, BSL fails to obtain the Site Plan Approval, BSL may cancel the BSL Agreement, waive the Site Plan Approval contingency, or extend the site plan period for an additional specified period with a second non-refundable extension fee.
−Removed: The BSL Agreement also contains additional customary covenants, conditions, representations and warranties.
−Removed: Cortlandt Manor - Gyrodyne, LLC, a New York limited liability company (the “Company”), has announced the execution by its subsidiaries GSD Cortlandt, LLC, a New York limited liability company (“GSD”), and Buttonwood Acquisition, LLC (“Buttonwood” and together with GSD, the “Cortlandt Subsidiaries”), of a Purchase and Sale Agreement (the “Agreement”) effective as of December 7, 2019 (the “Effective Date”) for the sale of approximately 4.5 acres of its real property located in Cortlandt Manor, New York, together with the improvements thereon (the “Property”), to Sound Cortlandt, LLC, a Delaware limited liability company (“SC LLC”), for a purchase price of $5,720,000.
−Removed: The Town of Cortlandt (the “Town”) is processing a proposed zoning initiative to create a Medical Oriented District (“MOD”) that would include the entire Cortlandt property (owned by the Cortlandt Subsidiaries) within its boundaries.
−Removed: Included in the Town’s initiative is the Company’s site plan to subdivide the entire property into three parcels for the development of (i) a medical office building with retail, (ii) a multi-family residential housing project and (iii) an open space, passive recreation parcel.
−Removed: The Property that is the subject of the Agreement consists of the medical office building with ancillary retail space, and does not include the multi-family residential housing parcel or the open space, passive recreation parcel.
+Added: The Agreement provided that BSL would have the right to terminate the BSL Agreement by written notice to GSD Flowerfield prior to the expiration of a defined inspection period (which had been extended via amendments to the BSL Agreement) if BSL was not fully satisfied, in BSL’s sole discretion, as to the status of title, suitability of the Property and all factors concerning same, in which case BSL would have the right to receive a refund of its earnest money deposit.
+Added: On March 16, 2021, the Company received a notice (the “BSL Termination Notice”) from BSL that it is terminating the BSL Agreement.
+Added: The BSL Termination Notice referenced the foregoing termination right and requested the return of the earnest money deposit to BSL in accordance with the provisions of the BSL Agreement.
+Added: The BSL Agreement Property is included in the Company’s subdivision application with the Town of Smithtown, New York, to subdivide the entire Flowerfield property into eight separate parcels (one parcel of which is a catering hall facility sold by the Company in 2002).
+Added: The Company believes the termination of the BSL Agreement should have no impact on the subdivision application, and will continue to actively market its entire Flowerfield property on the basis of eight subdivided lots subject to and contingent upon approvals for the subdivision and related entitlements.
+Added: Cortlandt Manor - As of December 7, 2019, the Company’s wholly owned subsidiaries GSD Cortlandt, LLC, a New York limited liability company and Buttonwood Acquisition, LLC (together the “Cortlandt Subsidiaries”), executed a Purchase and Sale Agreement (the “SC Agreement”) for the sale of approximately 4.5 acres of its real property located in Cortlandt Manor, New York, together with the improvements thereon (the “SC Agreement Property”), to Sound Cortlandt, LLC, a Delaware limited liability company (“SC LLC”), for a purchase price of $5,720,000.
+Added: The SC Agreement provided that SC LLC would have the right to terminate the SC Agreement by written notice to GSD prior to the expiration of a defined inspection period (which had been extended via amendments to the SC Agreement) if SC LLC was not fully satisfied, in SC LLC’s sole discretion, as to the status of title, suitability of the SC Agreement Property and all factors concerning same, in which case SC LLC would have the right to receive a refund of its earnest money deposit.
+Added: On February 1, 2021, the Company received a notice (the “SC Termination Notice”) from SC LLC that it is terminating the SC Agreement.
+Added: The SC Termination Notice referenced the foregoing termination right and called for the Escrow Agent (as defined in the SC Agreement) to return the earnest money deposit immediately to SC LLC in accordance with the provisions of the SC Agreement.
GYRODYNE, LLC
AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
+Added: Notes to Consolidated Financial Statements (Liquidation Basis)
Years Ended December 31, 2020 and 2019
−Removed: The Agreement requires:
−Removed: (i) an inspection period that will expire after a set period, during which time SC LLC will have the right to terminate the Agreement by written notice to GSD if SC LLC will not be fully satisfied, in SC LLC’s sole discretion, as to the status of title, suitability of the Property and all factors concerning same, prior to the expiration of the inspection period, in which case SC LLC will have the right to receive a refund of its earnest money deposit;
−Removed: (ii) if SC LLC does not terminate the Agreement on or prior to the end of the inspection period, SC LLC will be obligated to deliver an additional earnest money deposit to the escrow agent, which together with the initial earnest money deposit will be applied toward the purchase price at closing;
−Removed: (iii) unless SC LLC terminates the Agreement on or prior to the end of the inspection period, the closing will occur on the 60th day following the earlier of (y) the applicable governmental authorities granting of the Final Project Approvals (as defined in the Agreement and as described below);
−Removed: or (z) SC LLC’s waiver of the Final Project Approvals.
−Removed: The Final Project Approvals are also contingent on the receipt of Subdivision Approval and Site Plan Approval (each as defined in the Agreement and as described below).
−Removed: The Subdivision Approval condition requires that the Cortlandt Subsidiaries obtain approval as and to the extent necessary to allow for the conveyance of the medical office building parcel to SC LLC and the conveyance of the recreation parcel to the owner’s association within a specified time following the last day of the inspection period.
−Removed: If such Subdivision Approval is not obtained within such specified time following the last day of the inspection period, SC LLC has the right to terminate the Agreement.
−Removed: The Agreement provides SC LLC with a limited right to terminate the Agreement in the event the Subdivision Approval contains requirements specified in the Agreement.
−Removed: In the event the Subdivision Approval has not been denied by the Town at or prior to the last day of the specified period, SC LLC shall have the right to extend the time to obtain the Subdivision Approval for a specified period of time.
−Removed: If such Subdivision Approval is not obtained within such additional time, SC LLC has the right to terminate the Agreement.
−Removed: The Site Plan Approval is specifically delineated in the Agreement.
−Removed: If SC LLC fails to obtain the Site Plan Approval prior to the closing date (expected to be May 4, 2021), SC LLC may cancel the Agreement, waive the Site Plan Approval contingency, or extend the closing date.
−Removed: The Agreement also contains additional customary covenants, conditions, representations and warranties.
−Removed: Port Jefferson Professional Park – In August 2018, the Company sold its final building (11 Medical Drive) in the Port Jefferson Professional Park for $800,000.
+Added: Loans Payable
The Company secured a non-revolving credit line for up to $3,000,000 (the “Original Line”) with a bank, which closed on March 21, 2018.
−Removed: There was an interest only phase for the first eight months of the loan (“Interest-Only Phase”).
−Removed: On January 24, 2019, the Company amended and extended the Original Line which included extending the maturity date of the Interest-Only Phase to the earlier of January 20, 2020 or upon drawing down a total of $3,000,000 after which it automatically converts to a permanent loan maturing on the earlier of January 20, 2027 or 84 months after conversion to a permanent loan (the “Permanent Phase”).
−Removed: The Company amended and extended the Original Line which included extending the maturity date of the Interest-Only Phase to the earlier of April 30, 2020 or upon drawing down a total of $3,000,000 after which it automatically converts to a permanent loan maturing on the earlier of April 30, 2027 or 84 months after conversion to a permanent loan (the “Permanent Phase”).
−Removed: The interest rate during the Interest-Only Phase is a variable rate equal to the daily highest prime rate published by the Wall Street Journal plus 100 basis points (1% rounded up to the nearest 1/8 percent), but in no event less than the initial interest rate in effect on the closing date (6.5%).
−Removed: During the Permanent Phase, the Company will pay interest at a fixed rate based on the Federal Home Loan Bank rate for a 7-year maturity as made available by the Federal Home Loan Bank of New York plus a margin of 200 basis points (2%) rounded up to the nearest 1/8 percent, plus principal based on a 20-year amortization period.
+Added: The original line included an interest only phase for the first eight months of the loan (as amended the “Interest-Only Phase”).
+Added: The Company amended and extended the Original Line which included extending the conversion date of the Interest-Only Phase to the earlier of April 30, 2021 or upon drawing down a total of $3,000,000 after which it automatically converts to a permanent loan maturing on the earlier of April 30, 2028 or 84 months after conversion to a permanent loan (the “Permanent Phase”).
+Added: The interest rate, per the latest modification, during the Interest-Only Phase is a variable rate equal to the daily highest prime rate published by the Wall Street Journal plus 150 basis points (1.5% rounded up to the nearest 1/8 percent), adjusted daily, but shall not be less than 4.75%.
+Added: During the Permanent Phase, the Company will pay interest at a fixed rate based on the Federal Home Loan Bank rate for a 7-year maturity as made available by the Federal Home Loan Bank of New York plus a margin of 200 basis points (2%) rounded up to the nearest 1/8 percent, but shall not be less than 3.85%, plus principal based on a 20-year amortization period.
The Permanent Phase interest rate currently would be 3.85%.
2 unchanged sentences
The balance of the loan can be drawn upon for improvements to be completed by the Company, as landlord, pursuant to future leases with the State University of New York or institutions affiliated with it (or other tenants subject to the bank’s approval) anytime during the Interest-Only Phase.
−Removed: GYRODYNE, LLC
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: Years Ended December 31, 2019 and 2018
To secure access to additional working capital through the final sale date of the Flowerfield industrial buildings, the Company secured a second loan evidenced by a non-revolving business line of credit agreement and promissory note with the Original Line bank for up to $3,000,000, which closed on January 24, 2019.
−Removed: There is an interest only phase for the first twenty-four months of the loan (“Interest-Only Phase”) after which it automatically converts to a permanent loan maturing on January 20, 2028 (84 months after conversion to a permanent loan) (the “Permanent Phase”).
−Removed: The interest rate during the Interest-Only Phase shall be a variable rate equal to the daily highest prime rate published by the Wall Street Journal plus 100 basis points (1% rounded up to the nearest 1/8 percent), but in no event less than the initial interest rate in effect on the closing date (6.5%).
−Removed: During the Permanent Phase, the Company will pay interest at a fixed rate based on the Federal Home Loan Bank rate for a 7-year maturity as made available by the Federal Home Loan Bank of New York plus a margin of 200 basis points (2%) rounded up to the nearest 1/8 percent, plus principal based on a 20-year amortization period.
−Removed: Permanent Phase interest rate currently would be 3.25%.
−Removed: Two advances of $1,000,000 and $500,000 were drawn on September 30 and December 31, 2019, respectively.
−Removed: The balance of $1,419,932, net of closing costs of $80,068, is available to be drawn down.
+Added: This loan included an interest only phase for the first twenty-four months of the loan (“Interest-Only Phase”) after which it automatically converts to a permanent loan maturing on January 20, 2028 (84 months after conversion to a permanent loan) (the “Permanent Phase”).
+Added: The Company amended and extended the line which included extending the conversion date of the Interest-Only Phase to the earlier of May 20, 2021 or upon drawing down a total of $3,000,000 after which it automatically converts to a permanent loan maturing on the earlier of May 20, 2028 or 84 months after conversion to a permanent loan.
+Added: The interest rate during the Interest-Only Phase shall be a variable rate equal to the daily highest prime rate published by the Wall Street Journal plus 100 basis points (1% rounded up to the nearest 1/8 percent), but in no event less than 4.75%.
+Added: During the Permanent Phase, the Company will pay interest at a fixed rate based on the Federal Home Loan Bank rate for a 7-year maturity as made available by the Federal Home Loan Bank of New York plus a margin of 200 basis points (2%) rounded up to the nearest 1/8 percent, but shall not be less than 3.85%, plus principal based on a 20-year amortization period.
+Added: The Permanent Phase interest rate currently would be 3.85%.
+Added: Pursuant to the terms of the loan, the bank is in the process of converting the loan to a permanent loan following the drawdowns of $1,580,068, $1,000,000 and $419,932 in 2019, 2020 and January 2021, respectively.
Both lines are secured by approximately 31.8 acres of the Flowerfield Industrial Park including the related buildings and leases.
1 unchanged sentence
The Company anticipates modifying the terms of the loans following the completion of the subdivision so that the loans remain secured by the subdivided industrial park lot only.
−Removed: The loan payable matures upon the earlier of the sale of the Flowerfield Industrial Park or as follows:
−Removed: Years Ending December 31,
−Removed: To secure access to additional working capital through the final sale date of the Cortlandt Property lots (“Lots”), the Company, through its subsidiary GSD Cortlandt, LLC (“GSD Cortlandt”) signed a commitment letter for a third loan evidenced by a non-revolving business line of credit agreement and promissory note with the Original Line bank for up to $2,500,000, which is scheduled to close in the second quarter of 2020.
+Added: To secure access to additional working capital, the Company, through its subsidiary GSD Cortlandt, LLC (“GSD Cortlandt”) secured a loan evidenced by a non-revolving business line of credit agreement and promissory note with the Original Line bank for up to $2,500,000 which closed on July 16, 2020.
The term is 24 months, with an option to extend for an additional 12 months.
The interest rate is a variable rate equal to the daily highest prime rate published by the Wall Street Journal plus 100 basis points (1%), rounded up to the nearest 1/8 percent, but in no event less than four and three quarters percent (4.75%).
−Removed: The ability to draw upon the line is limited to certain amounts, contingent upon whether GSD Cortlandt delivered signed contracts for one or both Lots.
−Removed: The line is secured by the Cortlandt property (approximately 14 acres) and cross collateralized by approximately 31.8 acres of the Flowerfield Industrial Park including the related buildings and leases.
+Added: The terms of the loan originally limited access to certain amounts, contingent upon GSD Cortlandt securing purchase agreements for one or both Cortlandt Property lots.
+Added: On February 22, 2021, the loan was amended to remove such limitation on draws.
+Added: Advances of $379,765 and $670,235, were drawn at closing and on January 28, 2021, respectively.
+Added: Under the line, a balance of $1,450,000 is available at the Lender’s discretion.
+Added: The line is secured by the Cortlandt property (13.8 acres) and cross collateralized by 31.8 acres of the Flowerfield Industrial Park including the related buildings and leases.
The Company anticipates modifying the terms of the loans following the completion of the subdivision so that the loans remain cross collateralized by the subdivided industrial park lot only.
−Removed: Effective February 27, 2020, the Company entered into an engagement letter with a national real estate finance firm (the “Firm”) pursuant to which the Firm agreed to assist the Company secure financing with prospective lenders, and the Company agreed to pay the Firm an origination fee equal to one percent (1%) of any loan secured by the Company with any lender introduced to the Company by the Firm other than designated excluded lenders with whom the Company has a preexisting relationship.
−Removed: The intended use of this facility is to finance tenant improvements on new leases, if any, and a reserve for additional working capital.
GYRODYNE, LLC
AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
+Added: Notes to Consolidated Financial Statements (Liquidation Basis)
Years Ended December 31, 2020 and 2019
+Added: The loans payable mature upon the earlier of the sale of the Flowerfield Industrial Park or as follows:
+Added: Years Ending December 31,
The Company reports its financial statements under the liquidation basis of accounting which reflects real estate value at net realizable value (predicated on current asset values).
−Removed: During 2019 and 2018, the net realizable value of real estate increased by $12,068,730 and $3,984,605, respectively.
−Removed: The 2019 increase is mainly attributable to the Purchase and Sale Agreements entered into in Flowerfield and Cortlandt Manor (see Note 5).
−Removed: The 2018 increase was primarily driven by the increase in value attributable to the entitlement process.
+Added: During 2020, the net realizable value of real estate decreased by $9,220,000 and in 2019 it increased by $12,068,730.
+Added: The 2020 decrease is primarily driven by the change in use in Cortlandt Manor from partly residential to all medical, the cancellation of the contract on lot one in Cortlandt Manor, the termination of the BSL Agreement and by the market decline in real estate value in Flowerfield that is directly related to and stems from the impact of the pandemic.
+Added: The 2019 increase was mainly attributable to the Purchase and Sale Agreements entered into in Flowerfield and Cortlandt Manor (see Note 5).
The valuation of the remaining real estate as of December 31, 2020 was $39,050,000.
Net Realizable Value at beginning of period
−Removed: Increases in Net Realizable Value
+Added: Change in Net Realizable Value
Cortlandt Manor
−Removed: Less Property Sales
−Removed: Port Jefferson Professional Park
−Removed: Net Realizable Value at December 31,
+Added: Net Realizable Value on December 31,
+Added: Accounts Payable and Accrued Liabilities
+Added: Accounts Payable
Accrued Liabilities
−Removed: Accrued liabilities at December 31, 2019 and 2018 are as follows:
+Added: December 31, 2020
+Added: December 31, 2019
+Added: December 31, 2020
+Added: December 31, 2019
+Added: Current accounts payable
+Added: Accrued liabilities
+Added: Other accounts
+Added: Deferred Compensation to
+Added: Directors (b)
+Added: The Company reached agreements with certain service vendors to defer payment until the closing of the first property lot sale that is the subject of either the Flowerfield or Cortlandt Manor subdivision, respectively.
+Added: The director fees and interest accrued under the deferred Compensation Plan where each director elected to defer 100% of his fees for 2020 and 2021.
+Added: This amount also includes the deferred compensation of a Board advisor per an agreement to defer payments due.
+Added: GYRODYNE, LLC
+Added: AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements (Liquidation Basis)
+Added: Years Ended December 31, 2020 and 2019
+Added: Accrued liabilities on December 31, 2020 and 2019 are as follows:
Payroll and related taxes
7 unchanged sentences
The Company’s standard lease terms include rent due on the first of the month.
−Removed: The Company credit terms extend a standard ten-day grace period across its tenant portfolio and in no event are credit terms extended beyond one year.
+Added: The Company credit terms extend a standard ten-day grace period across its tenant portfolio and do not normally provide extensions beyond one year.
The Company manages its billing and collection process internally to enable timely identification of collection issues.
The controls and related processes enable the Company to timely identify and establish payment plans to minimize material losses from defaults.
−Removed: GYRODYNE, LLC
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: Years Ended December 31, 2019 and 2018
+Added: In accordance with generally accepted accounting principles, the Company identifies high risk collectibles, records them on a cash basis and does not include them in revenue or accounts receivable.
As of December 31, 2020 and 2019, respectively, the Company’s allowance for doubtful accounts reflected the following activity:
10 unchanged sentences
The Company has not experienced any losses in such accounts and believes that it is not exposed to any significant credit risk on cash.
−Removed: Management does not believe significant credit risk existed at December 31, 2019 and 2018.
+Added: Management does not believe significant credit risk existed on December 31, 2020 and 2019.
As the Company executes on the sale of its assets, its regional concentration in tenants will lessen thereby resulting in the increased credit risk from exposure of the local economies.
+Added: GYRODYNE, LLC
+Added: AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements (Liquidation Basis)
+Added: Years Ended December 31, 2020 and 2019
For the year ended December 31, 2020 rental income from the Company’s three largest tenants represented approximately 24%, 21% and 9% of total rental income.
−Removed: The three largest tenants by revenue as of December 31, 2019 consist of a state agency located in the industrial park, a medical tenant in the Cortlandt Manor Medical Center and a tenant in the industrial park that recently expanded its space.
−Removed: During the year ended December 31, 2018 we increased the space leased to the state agency, by approximately 93%, which increased the concentration of credit risk respectively.
+Added: The three largest tenants by revenue as of December 31, 2020 consist of a state agency located in the industrial park, a medical tenant in the Cortlandt Manor Medical Center and a tenant in the industrial park that previously expanded its space.
The current economic challenges facing state and local budgets impacted most of the Company’s largest tenants.
−Removed: In addition, the current economic challenges stemming from the coronavirus are disproportionately impacting small businesses which comprise 39% of our expected 2020 rental revenue.
+Added: In addition, the current economic challenges stemming from the coronavirus are disproportionately impacting not-for-profit tenants and tenants that are neither medical offices nor part of or affiliated with SBU or SBU Hospital which together comprise 37% of our expected 2021 rental revenue.
There can be no assurance that the Company’s leases will renew for the same square footage, at favorable rates net of tenant improvements, if at all.
5 unchanged sentences
The agreement provides for a bonus of $125,000 payable upon a change of control as defined in the agreement.
−Removed: In addition, each agreement provides for severance equivalent to 6 months of base salary and the vesting and related payment of the change of control bonus.
+Added: In addition, the agreement provides for severance equivalent to 6 months of base salary and the vesting and related payment of the change of control bonus.
The Company also has an employment agreement with its Chief Operating Officer (“COO”) executed on May 8, 2014 which provides for severance on a termination without cause equal to 6 months of base salary.
1 unchanged sentence
Under Company policy the aggregate severance commitment contingency to other employees is approximately $81,716.
−Removed: GYRODYNE, LLC
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: Years Ended December 31, 2019 and 2018
Retention Bonus Plan- In May 2014, the Board of Directors approved a retention bonus plan (as amended, the “Plan”) designed to recognize the nature and scope of the responsibilities of our directors, executives and employees related to the Company’s strategic plan to enhance the property values, liquidate and dissolve, to reward and incent performance in connection therewith, to align the interests of directors, executives and employees with our shareholders and to retain such persons during the term of such plan.
1 unchanged sentence
The summary appearing below reflects the terms set forth in the Plan as modified by three amendments.
−Removed: There were no further amendments to the terms of the Plan during the current reporting period.
+Added: There have been no further amendments to the terms of the Plan during the current reporting period.
The Plan provides for a bonus pool funded with an amount equal to 5% of the specified appraised value of such properties (set forth in the Plan), so long as the gross selling price of a property is at least equal to its 2013 appraised value as designated in the bonus plan.
−Removed: Additional funding of the bonus pool will occur on a property-by-property basis only if the gross sales price of a property exceeds the Adjusted Appraised Value defined as the sum of (i) its 2013 appraised value, in which case additional funding will occur and (ii) land development costs incurred on a property since the date of the 2013 appraisal, as follows:
+Added: Additional funding of the bonus pool will occur on a property-by-property basis only if the gross sales price of a property exceeds the Adjusted Appraised Value defined as the sum of (i) its 2013 appraised value and (ii) land development costs incurred on a property since the date of the 2013 appraisal, as follows:
10% on the first 10% of appreciation, 15% on the next 10% of appreciation and 20% on appreciation greater than 20%.
+Added: GYRODYNE, LLC
+Added: AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements (Liquidation Basis)
+Added: Years Ended December 31, 2020 and 2019
The bonus pool is distributable in the following proportions to the named participants in the bonus plan for so long as they are directors or employees of the Company:
6 unchanged sentences
Other Employees
−Removed: 15% for the Chairman and 50% for the directors other than the Chairman (10% for each of the other five directors).
−Removed: The officer discretionary amount of 1.75% is vested but not allocated and will be allocated to the officers within the discretion of the Board.
+Added: 15% for the Chairman and 10% for each of the other five directors.
+Added: The officer discretionary amount of 1.75% will be allocated to the officers within the discretion of the Board.
Such shares of the bonus pool are earned only upon the completion of the sale of a property at a gross selling price equal to or greater than its Adjusted Appraised Value and is paid to the named beneficiaries of the Plan or their designees within 60 days of the completion of such sale or, if later, within 60 days of receipt of any subsequent post-completion installment payment related to such sale.
4 unchanged sentences
It also provides for entitlement to a future benefit in the event of death, voluntary termination following substantial reduction in compensation or board fees, mutually agreed separation to right-size the board or involuntary termination without cause, except that a participant will only be eligible to receive a benefit to the extent that a property is sold within three years following the separation event and the sale produces an internal rate of return equal to at least four percent of the property’s value as of December 31 immediately preceding such event and that the sale exceeded the Adjusted Appraised Value.
−Removed: GYRODYNE, LLC
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: Years Ended December 31, 2019 and 2018
−Removed: The payments made during the twelve months ended December 31, 2019 and 2018 under the Plan relate to the settlement of the master lease from the Sale of the Virginia Health Care Center and the sale of one building in the Port Jefferson Professional Park, respectively, were as follows:
+Added: Under the Plan, there were no payments made during the year ended 2020.
+Added: The payments made during the year ended December 31, 2019 under the Plan relate to the settlement of the master lease from the Sale of the Virginia Health Care Center, were as follows:
RETENTION BONUS PLAN PARTICPANTS
4 unchanged sentences
Deferred Compensation Plan - On December 6, 2019, the Company’s Board of Directors approved the Gyrodyne, LLC Nonqualified Deferred Compensation Plan for Employees and Directors (the “DCP”) effective as of January 1, 2020.
−Removed: The plan is a nonqualified deferred compensation plan maintained for officers and directors of the Company.
+Added: The DCP is a nonqualified deferred compensation plan maintained for officers and directors of the Company.
Under the DCP, officers and directors may elect to defer a portion of their compensation to the DCP and receive interest on such deferred payments at a fixed rate of 5%.
All DCP benefits will be paid in a single lump sum cash payment on December 15, 2026, unless a Plan of Liquidation is established for Gyrodyne before the distribution date in which case all benefits will be paid in a single lump sum cash payment after execution of an amendment to terminate the DCP.
−Removed: Each of the Directors elected (under the DCP) to defer 100% of their director fees for 2020.
+Added: Each of the Directors elected (under the DCP) to defer 100% of their director fees for 2020 and 2021.
+Added: GYRODYNE, LLC
+Added: AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements (Liquidation Basis)
+Added: Years Ended December 31, 2020 and 2019
Fair Value of Financial Instruments
15 unchanged sentences
The cash flow models include estimated cash inflows and outflows over a specified holding period.
−Removed: These cash flows may include contractual rental revenues, projected future rental revenues and expenses and forecasted tenant improvements and lease commissions based upon market conditions determined through discussion with local real estate professionals, experience the Company has with its other owned properties in such markets and expectations for growth.
+Added: These cash flows may include contractual rental revenues, projected future rental revenues and expenses and forecasted capital improvements and lease commissions based upon market conditions determined through discussion with local real estate professionals, experience the Company has with its other owned properties in such markets and expectations for growth.
Capitalization rates and discount rates utilized in these models are estimated by management based upon rates that management believes to be within a reasonable range of current market rates for the respective properties based upon an analysis of factors such as property and tenant quality, geographical location and local supply and demand observations.
−Removed: To the extent, the Company underestimates forecasted cash outflows (tenant improvements, lease commissions and operating costs) or over estimates forecasted cash inflows (rental revenue rates), the estimated net realizable value of its real estate assets could be overstated.
−Removed: GYRODYNE, LLC
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: Years Ended December 31, 2019 and 2018
+Added: To the extent, the Company underestimates forecasted cash outflows (capital improvements, lease commissions and operating costs) or over estimates forecasted cash inflows (rental revenue rates), the estimated net realizable value of its real estate assets could be overstated.
Contingencies
−Removed: Putative Class Action Lawsuit - On July 3, 2014, a purported stockholder of the Company filed a putative class action lawsuit against Gyrodyne Company of America, Inc.
−Removed: (the “Corporation”) and members of its Board of Directors (the "Individual Defendants"), and against Gyrodyne Special Distribution, LLC (“GSD”) and the Company (collectively, the "Defendants"), in the Supreme Court of the State of New York, County of Suffolk (the "Court"), captioned Cashstream Fund v.
−Removed: Lamb, et al., Index No.
−Removed: 065134/2014 (the "Action").
−Removed: The complaint alleged, among other things, that (i) the Individual Defendants breached their fiduciary duties or aided and abetted the breach of those duties in connection with the merger of the Corporation and GSD into the Company (the “Merger”) and (ii) the Corporation and the Individual Defendants breached their fiduciary duties by failing to disclose material information in the proxy statement/prospectus relating to the Merger.
−Removed: On August 14, 2015, the parties to the Action entered into a Stipulation of Settlement (the "Settlement") providing for the settlement of the Action, subject to the Court's approval.
−Removed: Under the Settlement, Gyrodyne amended its Proxy Statement on August 17, 2015 with certain supplemental disclosures and agreed that any sales of its properties would be effected only in arm's-length transactions at prices at or above their appraised values as of December 2014.
−Removed: The plaintiff, on behalf of itself and the members of the putative class it represents, agreed to release and dismiss with prejudice all claims that had or could have been asserted in the Action or in any other forum against the Defendants and their affiliates and agents arising out of or relating to the Merger and the other transactions alleged by plaintiff in its complaint, as supplemented.
−Removed: On April 8, 2016, the Court entered a Final Order and Judgment approving the Settlement.
−Removed: By order of the same date, the Court also granted plaintiff’s application for an award of attorney’s fees and reimbursement of expenses in the amount of $650,000 which was paid in full in April 2016.
+Added: Putative Class Action Lawsuit - On August 14, 2015, the Company entered a Stipulation of Settlement (the "Settlement") providing for the settlement of a putative class action lawsuit against the Company and certain related parties.
+Added: Under the Settlement, Gyrodyne agreed that any sales of its properties would be effected only in arm's-length transactions at prices at or above their appraised values as of 2014.
As of December 31, 2020 and 2019, the value of the remaining unsold properties exceeded the respective 2014 appraised value.
1 unchanged sentence
After reviewing all actions and proceedings pending against or involving the Company, management considers that any loss resulting from such proceedings individually or in the aggregate will not be material to the Company’s financial statements.
+Added: GYRODYNE, LLC
+Added: AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements (Liquidation Basis)
+Added: Years Ended December 31, 2020 and 2019
+Added: In December 2019, a novel strain of coronavirus was reported in Wuhan, Hubei province, China.
+Added: In the first several months of 2020, the virus, SARS-CoV-2, and resulting disease, COVID-19, spread to the United States, including New York State, the geographic location in which the Company operates.
+Added: The Company's evaluation of the effects of these events is ongoing;
+Added: however, in February and March 2020, some of our tenants began to experience decreasing demand for their products and services which has impacted their ability to timely meet their lease obligations.
+Added: Furthermore, on March 21 , 2020, New York Governor Andrew Cuomo issued an Executive Order entitled “New York State on PAUSE” (Policy that Assures Uniform Safety for Everyone) (the “Order”), pursuant to which, all non-essential employees (as defined by the State) must stay at home starting March 22, 2020 through April 19, 2020.
+Added: The Order also includes a 90-day moratorium on any residential or commercial evictions.
+Added: On April 16, 2020, the Order was subsequently extended until May 15, 2020.
+Added: Governor Cuomo outlined guidelines that will help regions create individual plans based on facts and data to reopen New York.
+Added: The loosening of restrictions in New York will be considered on a regional basis (The Cortlandt property is located in the Mid-Hudson region and the Flowerfield property is located in the Long Island region), based on the following criteria.
+Added: These criteria are designed to allow phased reopening’s to begin in each region only if:
+Added: The infection rate is sufficiently low;
+Added: The health care system has the capacity to absorb a potential resurgence in new cases;
+Added: Diagnostic testing capacity is sufficiently high to detect and isolate new cases;
+Added: Robust contact-tracing capacity is in place to help prevent the spread of the virus.
+Added: While most business in all regions have opened under certain guidelines (including occupancy limitations), a rise in COVID-19 cases could and has fostered certain small hot spots to be quarantined or returned to a more restrictive phase of reopening under government order.
+Added: Beginning March 16, 2020, prior to the Order, the Company’s employees began temporarily working remotely to ensure their and their family’s safety and well-being.
+Added: The Company’s technology infrastructure, for some time, has been set up to handle offsite seamless operations to respond to disaster recovery disruption.
+Added: As a result, all employees will continue to work remotely unless they report needing sick leave or family leave pursuant to regulated benefits.
+Added: Small businesses have been and are expected to continue to be adversely affected disproportionately by the economic ramifications of COVID-19.
+Added: In terms of its own tenants, the Company deems as small businesses those that are neither part of or affiliated with Stony Brook University or SBU Hospital, non-medical offices and not-for-profit corporations, which in the aggregate account for approximately 37% ($776,000) of the Company’s projected annual rental revenues for 2021.
+Added: Although it is difficult to estimate the duration and full extent of the COVID-19 pandemic, its impact on our future results could be significant and will largely depend on future developments which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the novel coronavirus, the success of actions taken to contain or treat COVID-19 and reactions by consumers, companies, governmental entities and capital markets.
+Added: We are actively working with our tenants to manage and mitigate the impact of COVID-19 on the Company’s operations, liquidity and resulting Net Asset Value.
+Added: The COVID-19 public health crisis has also adversely impacted the timeline to secure entitlements and the sale of our real estate.
+Added: Furthermore, the real estate market is also being adversely affected which could further negatively impact the timing of sales and the resulting value of our real estate.
+Added: The extent of the impact of COVID-19 on the Company's operational and financial performance and ultimately its Net Asset Value, will depend on current and future developments, including the duration and spread of the outbreak and related governmental or other regulatory actions and the effectiveness of the Covid 19 vaccine program.
+Added: In addition, the pandemic has resulted in a seismic shift toward commercial acceptance of remote working which may adversely impact our occupancy rate and average rate per square foot.
+Added: The Company’s ability to operate seamlessly and limit any adverse impact on its forecasted net asset value will also depend, in part, on whether any of its key employees or key advisers are infected by the Coronavirus and become ill from COVID-19.
+Added: GYRODYNE, LLC
+Added: AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements (Liquidation Basis)
+Added: Years Ended December 31, 2020 and 2019
Related Party Transactions
2 unchanged sentences
Total Commitment
−Removed: ( excluding renewal
+Added: (excluding renewal options)
Additional Commitment
−Removed: (assumes two-year renewal
−Removed: option is exercised)
+Added: (assumes two-year renewal option is exercised)
+Added: Jan 2019-Dec 2020
+Added: Jan 2019-Dec 2020
+Added: Jan 2019-Dec 2020
In February 2019, the Company amended the square footage under the master lease with the not-for-profit originally entered into in August 2016.
7 unchanged sentences
Since rent is only due if the space is sublet, the Company believes the fair value of the space to the extent not sublet reflects a below market lease over the term ending December 31, 2020 of $18,170 and total commitments including two-year renewal option of up to $72,680.
−Removed: GYRODYNE, LLC
−Removed: AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
−Removed: Years Ended December 31, 2019 and 2018
+Added: In December 2020, the tenant exercised the second and last renewal term option, extending the lease terms until December 31, 2022.
During the twelve months ended December 31, 2020 and 2019, respectively, the Company received rental revenue of $35,607 and $34,720, respectively.
1 unchanged sentence
The Chairman is also a partner of the firm Lamb & Barnosky, LLP that provided pro bono legal representation to the aforementioned not-for-profit corporation on the lease.
+Added: Reclassifications
+Added: Certain amounts in the prior period have been reclassified to conform to the classification used in the current period due to the agreements with certain service vendors to defer payment until the closing of the first property lot sale that is the subject of either the Flowerfield or Cortlandt Manor subdivision, respectively.
Subsequent Events
−Removed: In December 2019, a novel strain of coronavirus was reported in Wuhan, Hubei province, China.
−Removed: In the first several months of 2020, the virus, SARS-CoV-2, and resulting disease, COVID-19, spread to the United States, including New York State, the geographic location in which the Company operates.
−Removed: The Company's evaluation of the effects of these events is ongoing;
−Removed: however, in February and March 2020, some of our tenants began to experience decreasing demand for their products and services which may impact their ability to timely meet their lease obligations.
−Removed: Furthermore, on March 21 , 2020, New York Governor Andrew Cuomo issued an Executive Order entitled “New York State on PAUSE” (Policy that Assures Uniform Safety for Everyone) (the “Order”), pursuant to which, all non-essential employees (as defined by the State) must stay at home starting March 22, 2020 through April 19, 2020.
−Removed: The Order also includes a 90-day moratorium on any residential or commercial evictions.
−Removed: Beginning March 16, 2020, prior to the Order, the Company’s employees began temporarily working remotely to ensure the safety and well-being of our employees and their families.
−Removed: The Company’s technology infrastructure, for some time, has been set up to handle offsite seamless operations to address alternative disaster recovery disruption.
−Removed: As a result, all employees will continue to work remotely unless they report needing sick leave or family leave pursuant to regulated benefits.
−Removed: Small businesses and not-for-profit corporations, which account for approximately 39% ($834,000) of the Company’s projected annual rental revenues for 2020, are expected to be adversely affected disproportionately by the economic ramifications of COVID-19.
−Removed: Although it is difficult to estimate the duration and full extent of this disruption, the impact of COVID-19 on our future results could be significant and will largely depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus, the success of actions taken to contain or treat the coronavirus and reactions by consumers, companies, governmental entities and capital markets.
−Removed: We are actively working with our tenants to manage and mitigate the impact to COVID-19 on the Company’s operations, liquidity and resulting Net Asset Value.
−Removed: The COVID-19 public health crisis may also adversely impact our efforts to secure entitlements and the sale of our real estate.
−Removed: State and local governments are prioritizing COVID-19 crisis management and, to the extent possible, re-allocating resources accordingly which may adversely impact the timeline of our entitlements and technical approvals.
−Removed: Furthermore, the real estate market is also expected to be adversely affected which could further negatively impact the timing of sales and the resulting value of our real estate.
−Removed: The extent of the impact of COVID-19 on the Company's operational and financial performance and ultimately its Net Asset Value, will depend on future developments, including the duration and spread of the outbreak and related governmental or other regulatory actions.
−Removed: The Company has four employees.
−Removed: As a result, the Company’s ability to operate seamlessly and limit any adverse impact on its forecasted net asset value will also depend, in part, on whether any of its key employees are infected by the Coronavirus and become ill from COVID-19.
+Added: Cortlandt Manor.
+Added: As of December 7, 2019, the Company’s wholly owned subsidiaries GSD Cortlandt, LLC, a New York limited liability company, and Buttonwood Acquisition, LLC (together the “Cortlandt Subsidiaries”), executed a Purchase and Sale Agreement (the “SC Agreement”) for the sale of approximately 4.5 acres of its real property located in Cortlandt Manor, New York, together with the improvements thereon (the “SC Agreement Property”), to Sound Cortlandt, LLC, a Delaware limited liability company (“SC LLC”), for a purchase price of $5,720,000.
+Added: The SC Agreement provided that SC LLC would have the right to terminate the SC Agreement by written notice to GSD prior to the expiration of a defined inspection period (which had been extended via amendments to the SC Agreement) if SC LLC was not fully satisfied, in SC LLC’s sole discretion, as to the status of title, suitability of the SC Agreement Property and all factors concerning same, in which case SC LLC would have the right to receive a refund of its earnest money deposit.
GYRODYNE, LLC
AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements
+Added: Notes to Consolidated Financial Statements (Liquidation Basis)
Years Ended December 31, 2020 and 2019
+Added: On February 1, 2021, the Company received a notice (the “SC Termination Notice”) from SC LLC that it is terminating the SC Agreement.
+Added: The SC Termination Notice referenced the foregoing termination right and called for the Escrow Agent (as defined in the SC Agreement) to return the earnest money deposit immediately to SC LLC in accordance with the provisions of the SC Agreement.
+Added: On August 27, 2019, the Company’s wholly owned subsidiary GSD Flowerfield, LLC entered into a Purchase and Sale Agreement (the “BSL Agreement”) for the sale of a 9.0-acre parcel of vacant land (the “BSL Agreement Property”) in the Flowerfield complex in Smithtown, New York for $16,800,000 to BSL St.
+Added: James LLC, a Delaware limited liability company (“BSL”).
+Added: The Agreement provided that BSL would have the right to terminate the BSL Agreement by written notice to GSD Flowerfield prior to the expiration of a defined inspection period (which had been extended via amendments to the BSL Agreement) if BSL was not fully satisfied, in BSL’s sole discretion, as to the status of title, suitability of the Property and all factors concerning same, in which case BSL would have the right to receive a refund of its earnest money deposit.
+Added: On March 16, 2021, the Company received a notice (the “BSL Termination Notice”) from BSL that it is terminating the BSL Agreement.
+Added: The BSL Termination Notice referenced the foregoing termination right and requested the return of the earnest money deposit BSL in accordance with the provisions of the BSL Agreement.
+Added: The BSL Agreement Property is included in the Company’s subdivision application with the Town of Smithtown, New York, to subdivide the entire Flowerfield property into eight separate parcels (one parcel of which is a catering hall facility sold by the Company in 2002).
+Added: The Company believes the termination of the BSL Agreement should have no impact on the subdivision application, and will continue to actively market its entire Flowerfield property on the basis of eight subdivided lots subject to and contingent upon approvals for the subdivision and related entitlements.
Credit Facility .
−Removed: The Company amended and extended the Original Line which included extending the maturity date of the Interest-Only Phase to the earlier of April 30, 2020 or upon drawing down a total of $3,000,000 after which it automatically converts to a permanent loan maturing on the earlier of April 30, 2027 or 84 months after conversion to a permanent loan (the “Permanent Phase”).
−Removed: To secure access to additional working capital through the final sale date of the Cortlandt Property lots (“Lots”), the Company, through its subsidiary GSD Cortlandt, LLC (“GSD Cortlandt”) signed a commitment letter for a third loan evidenced by a non-revolving business line of credit agreement and promissory note with the Original Line bank for up to $2,500,000, which is scheduled to close in the second quarter of 2020.
−Removed: The term is 24 months, with an option to extend for an additional 12 months.
−Removed: The interest rate is a variable rate equal to the daily highest prime rate published by the Wall Street Journal plus 100 basis points (1%), rounded up to the nearest 1/8 percent), but in no event less than four and three quarters percent (4.75%).
−Removed: The ability to draw upon the line is limited to certain amounts, contingent upon whether GSD Cortlandt delivered signed contracts for one or both Lots.
−Removed: The line is secured by the Cortlandt property (approximately 14 acres) and cross collateralized by approximately 31.8 acres of the Flowerfield Industrial Park including the related buildings and leases.
−Removed: The Company anticipates modifying the terms of the loans following the completion of the subdivision so that the loans remain cross collateralized by the subdivided industrial park lot only.
−Removed: Effective February 27, 2020, the Company entered into an engagement letter with a national real estate finance firm (the “Firm”) pursuant to which the Firm agreed to assist the Company secure financing with prospective lenders, and the Company agreed to pay the Firm an origination fee equal to one percent (1%) of any loan secured by the Company with any lender introduced to the Company by the Firm other than designated excluded lenders with whom the Company has a preexisting relationship.
−Removed: The intended use of this facility is to finance tenant improvements on new leases, if any, and a reserve for additional working capital.
+Added: The Company amended and extended the working capital line which included extending the conversion date of the Interest-Only Phase to the earlier of May 20, 2021 or upon drawing down a total of $3,000,000 after which it automatically converts to a permanent loan maturing on the earlier of May 20, 2028 or 84 months after conversion to a permanent loan (the “Permanent Phase”).
+Added: On February 22, 2021, the Company, through its subsidiary GSD Cortlandt, LLC (“GSD Cortlandt”) amended its line to remove the contingency that required signed purchase and sale agreements on Cortlandt Manor to be able to draw on the line.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.