Gyrodyne, LLC 10-Q

Item 1A. Risk Factors   For information regarding factors that could affect our business, results of operations, financial condition and liquidity, see the risk factors discussed under Part I, Item 1A of our 2020 Form 10-K filed with the Securities and Exchange Commission on April 13, 2021.   31     The following risk factors which appear in our 2020 Form 10-K are updated as follows:   Community opposition could adversely impact our efforts to obtain entitlements and enhance the value of our properties.   The process of seeking required entitlements, permits and approvals is sometimes delayed or prevented due to community opposition and adverse publicity from neighboring property owners, members of the general public or non-governmental organizations, or other third parties and other factors beyond our control. The Company’s efforts to seek entitlements, permits or other approvals have been the subject of protests by civic groups asserting environmental, traffic and congestion issues as well as adverse impact to the historic nature of the area. Such community opposition could lead to the denial of entitlements, permits or other approvals essential to our efforts to increase the value of our properties or to the imposition of restrictive conditions with which it is not practicable or feasible to comply and could impact our ability to enhance the value of our properties.   Even if the Company is successful in securing approval of its subdivision application, there is a substantial risk that opponents of our subdivision plan, and other aspect of our entitlement efforts may challenge the approval through a lawsuit under Article 78 of New York’s Civil Practice Law & Rules, naming both the Town of Smithtown and the Company as defendants. Challenging a government decision in an Article 78 proceeding can lead to delay in enforcement of the government action, whether or not the suit is successful. Petitioners often seek a temporary restraining order, preliminary injunction or other form of stay of some or all of the challenged action, and the government sometimes agrees to delay implementation until legal challenges are resolved. Although Article 78 proceedings take place on an expedited timeline and generally without discovery, an Article 78 proceeding could take two years or more to run its course given the likelihood of appeal and the impact the ongoing pandemic has had on the court system. Consequently, the commencement of an Article 78 proceeding with respect to an approval of our subdivision application and other aspect of our entitlement efforts could result in a further extension of the Company’s timeline for completing the process of securing entitlements, selling our properties and distributing net proceeds.   Our business, operations and timelines for pursuing entitlements, property sales and distributions of proceeds could be adversely affected by the Coronavirus pandemic.   The global health crisis caused by the novel coronavirus (“COVID-19”) pandemic and its resurgences has and may continue to negatively impact economic activity, which, despite progress in vaccination efforts, remains uncertain and cannot be predicted with confidence. In addition, a new Delta variant of COVID-19, which appears to be the most transmissible variant to date, has begun to spread domestically. The impact of the Delta variant cannot be predicted at this time, and could depend on numerous factors, including vaccination rates among the population, the effectiveness of COVID-19 vaccines against the Delta variant and the response by governmental bodies and regulators.   The Coronavirus pandemic has affected and will likely for the foreseeable future affect our timelines for pursuing entitlements, selling our properties and making distributions. The pandemic may result in delays in necessary interactions with local authorities and ultimately delays in receiving approvals from such authorities due to limitations in employee resources or forced furlough of government employees.   The real estate market is expected to continue to be adversely affected which could negatively impact the timing of sales and the resulting value of our real estate. A continuation or worsening of the levels of market disruption and volatility seen in the recent past could also have an adverse effect on the Company’s ability to access capital, which could in the future negatively affect the Company’s liquidity. In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect the Company’s business and the value of our properties.   Not-for-profit corporations and other tenants that are neither medical offices nor part of or affiliated with SBU or SBU Hospital, which together account for approximately 40% ($888,000) of the Company’s projected annual rental revenues for 2021, are expected to be adversely affected disproportionately by the economic ramifications of COVID-19. Although the duration and full extent of this disruption cannot be predicted with any certainty, 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 and its variants, including the Delta variant, the success of actions taken to contain or treat the coronavirus and reactions by consumers, companies, governmental entities and capital markets. 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.   Finally, the Company’s ability to operate seamlessly and limit any adverse impact on our forecasted Net Asset Value will depend in part on whether any of its key employees is infected by the Coronavirus and becomes ill from COVID-19.   The Company continues to monitor the impacts of COVID-19 on our business operations. At this time, however, it is difficult to predict how long the potential operational impacts of COVID-19 will last or to what degree further disruption might impact the Company’s operations and financial results.   Items 2 through 5 are not applicable to the Company in the six-months ended June 30, 2021.   32     Item 6. Exhibits.     3.1  Articles of Organization of Gyrodyne, LLC, dated as of October 3, 2013 (1)         3.2 Amended and Restated Limited Liability Company Agreement of Gyrodyne, LLC (2)         10.1 Amended and Restated Retention Bonus Plan (3)         10.2 Amendment No. 2 to the Retention Bonus Plan (4)         10.3 Amendment No. 3 to the Retention Bonus Plan (5)         31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer and Chief Financial Officer, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (6)         32.1 CEO and CFO Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (7)         101.INS Inline XBRL Instance (6)         101.SCH Inline XBRL Taxonomy Extension Schema (6)         101.CAL Inline XBRL Taxonomy Extension Calculation (6)         101.DEF Inline XBRL Taxonomy Extension Definition (6)         101.LAB Inline XBRL Taxonomy Extension Labels (6)         101.PRE Inline  XBRL Taxonomy Extension Presentation (6)         104  Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)     (1) Incorporated herein by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-4 filed with the Securities and Exchange Commission on October 21, 2013.         (2) Incorporated herein by reference to Exhibit 3.2 to the Company’s Registration Statement on Form 8-A12B filed with the Securities and Exchange Commission on September 1, 2015.         (3) Incorporated herein by reference to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on May 26, 2016.         (4) Incorporated herein by reference to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 31, 2018.         (5) Incorporated herein by reference to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on November 2, 2018.         (6) Filed as part of this Report.         (7) Furnished herewith in accordance with Item 601(b)(32) of Regulation S-K. This Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certification will not be deemed incorporated by reference into any filings under the Securities Act, expect to the extent that the registrant specifically incorporates it by reference.   SIGNATURES   Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.   GYRODYNE, LLC   Date: August 6, 2021 /s/ Gary Fitlin   By Gary Fitlin   President and Chief Executive Officer Chief Financial Officer and Treasurer   33     EXHIBIT INDEX         3.1 Articles of Organization of Gyrodyne, LLC, dated as of October 3, 2013 (1)             3.2 Amended and Restated Limited Liability Company Agreement of Gyrodyne, LLC (2)             10.1 Amended and Restated Retention Bonus Plan (3)             10.2 Amendment No. 2 to the Retention Bonus Plan (4)             10.3 Amendment No. 3 to the Retention Bonus Plan (5)             31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer and Chief Financial Officer, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (6)             32.1 CEO and CFO Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (7)        101.INS   Inline XBRL Instance (6)        101.SCH  Inline XBRL Taxonomy Extension Schema (6)        101.CAL  Inline XBRL Taxonomy Extension Calculation (6)        101.DEF  Inline XBRL Taxonomy Extension Definition (6)        101.LAB  Inline XBRL Taxonomy Extension Labels (6)        101.PRE  Inline  XBRL Taxonomy Extension Presentation (6)        104          Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)         (1) Incorporated herein by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-4 filed with the Securities and Exchange Commission on October 21, 2013.             (2) Incorporated herein by reference to Exhibit 3.2 to the Company’s Registration Statement on Form 8-A12B filed with the Securities and Exchange Commission on September 1, 2015.             (3) Incorporated herein by reference to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on May 26, 2016.             (4) Incorporated herein by reference to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 31, 2018.             (5) Incorporated herein by reference to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on November 2, 2018.             (6) Filed as part of this Report.             (7) Furnished herewith in accordance with Item 601(b)(32) of Regulation S-K. This Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certification will not be deemed incorporated by reference into any filings under the Securities Act, expect to the extent that the registrant specifically incorporates it by reference.   34