What changed in this filing

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Item 9A. Controls and Procedures

2025-03-28 compared with 2024-03-29 · 188 added, 159 removed, 931 unchanged (27% of the section changed)

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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.

Based solely on the Company’s review of copies of Forms 3 and 4 and amendments thereto received by it during fiscal 2023 and Forms 5 and amendments thereto received by the Company with respect to fiscal 2023 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 2023, except for one late filing of a Form 4 by Richard Smith due to difficulties securing an EDGAR access code.

Based solely on the Company’s review of copies of Forms 3 and 4 and amendments thereto received by it during fiscal 2024 and Forms 5 and amendments thereto received by the Company with respect to fiscal 2024 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 2024.

Audit Committee Financial Expert

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The Company is not including the information contained on its website as part of, or incorporating it by reference to, this Report.

Insider Trading Policy

The Company has adopted an insider trading policy and procedures governing the purchase, sale, and/or other dispositions of our securities (the “Insider Trading Policy”) that applies to all directors, officers, employees, consultants, contractors of the Company and its subsidiaries, as well as the Company itself.

We believe that the Insider Trading Policy is reasonably designed to promote compliance with insider trading laws, rules and regulations with respect to the purchase, sale and/or other dispositions of the Company's securities, as well as any listing standards, rules and regulations applicable to us.

A copy of the Insider Trading Policy is filed as Exhibit 97.2 to this Report.

Executive Compensation.

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Officer Discretionary Amount (c)

Other Employees

Other Employees (d)

15% (18.75%) for the Chairman and 10% (12.5%) for each of the other three remaining participant directors.

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The officer discretionary amount will be allocated to the officers within the discretion of the Board.

Other employees will receive 0.75% prior to amendment 5 or 2.143% after amendment No.

5 and the approval of the restricted stock plan.

The remaining 3.10% (prior to amendment 5) or 8.857% (after amendment 5) will be allocated to officers and employees within the discretion of the Board.

Under the Plan, there were no payments made during the years ended 2024 and 2023.

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compensation earnings

* Philip Palmedo resigned from the Board, effective July 28, 2023 and Jan Loeb was immediately appointed as his replacement.

Deferred Compensation Plan.

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Greenwich, CT 06870

Grantham, Mayo, Van Otterloo & Co., LLC

40 Rowes Wharf

Boston, MA 02110

3300 South Dixie Highway, Suite 1-365

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12 to Schedule 13D was filed by David Goldman, Douglas Jamieson and Peter Goldstein.

On March 14, 2024, Towerview LLC filed Amendment No.

11 to 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 342,296 common shares.

Amendment No.

11 to Schedule 13G was filed by Daniel R.

On October 21, 2024, Towerview LLC filed Form 4 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 340,996 common shares.

The Form 4 was filed by Daniel R.

On March 14, 2024, Lance Gad Revocable Trust filed a Schedule 13G/A 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 166,765 common shares.

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On March 26, 2024, Star Equity Fund LP communicated to the Company that it had acquired an additional 56,579 common shares in the recently completed rights offering.

On February 13, 2024, Grantham, Mayo, Van Otterloo & Co.

LLC filed Amendment No.

1 to Schedule 13G with the Securities and Exchange Commission stating that it has the power to vote or direct the vote, and the power to dispose of or direct the disposition of 119,248 common shares.

Amendment No.

1 to Schedule 13G was filed by Gregory Pottle.

On August 20, 2020, Neil Subin filed Amendment No.

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A summary of the additional rent under the new arrangement is as follows:

Total Commitment (excluding renewal options)

Total Commitment (excluding

renewal options)

April 2022-Dec 2027

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Audit Fees (1)

(1) Audit Fees consist of aggregate fees billed for professional services rendered for the audit of the Company’s annual financial statements, review of the interim financial statements included in quarterly reports, and services that are normally provided by the principal accountants in connection with statutory and regulatory filings or engagements for the fiscal years ended December 31, 2023 and 2022, respectively.

(1) Audit Fees consist of aggregate fees billed for professional services rendered for the audit of the Company’s annual financial statements, review of the interim financial statements included in quarterly reports, S-1 consent and services that are normally provided by the principal accountants in connection with statutory and regulatory filings or engagements for the fiscal years ended December 31, 2024 and 2023, respectively.

(2) 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.

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Short Form Order of Supreme Court of the State of New York, Suffolk County, dated February 6, 2024 (13)

Short Form Order of Supreme Court of the State of New York, Suffolk County, dated March 21, 2025 (14)

List of all subsidiaries (14)

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Executive Compensation Clawback Policy (15)

Insider Trading Policy (14)

Inline XBRL Instance (14)

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Filed as part of this report.

Incorporated herein by reference to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 29, 2024.

Furnished herewith in accordance with Item 601(b)(32) of Regulation S-K.

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** XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

Form 10-K Summary.

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

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Short Form Order of Supreme Court of the State of New York, Suffolk County, dated February 6, 2024 (13)

Short Form Order of Supreme Court of the State of New York, Suffolk County, dated March 21, 2025 (14)

List of all subsidiaries (14)

3 unchanged sentences

Executive Compensation Clawback Policy (15)

Insider Trading Policy (14)

Inline XBRL Instance (14)

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Filed as part of this report.

Incorporated herein by reference to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 29, 2024.

Furnished herewith in accordance with Item 601(b)(32) of Regulation S-K.

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The income valuation technique consists of a discounted cash flow model.

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.

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, discount rates and in certain instances offers that could differ materially from actual results.

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.

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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.

We evaluated offers both received and made by management on the properties being valued

We have served as the Company's auditor since 1990.

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Change in real estate value

Issuance of common shares, net

Remeasurement of assets and liabilities

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The COVID-19 pandemic caused significant delays in the regulatory approval process, as state, county and local staff charged with processing our subdivision applications all postponed activity due to work-from-home transitions.

On March 30, 2022, the Town of Smithtown Planning Board (the “Planning Board”) unanimously granted Gyrodyne’s application for preliminary approval to divide the Flowerfield property into eight lots, subject to certain conditions (the “Flowerfield Subdivision Application”).

On March 30, 2022, the Town of Smithtown Planning Board (the “Planning Board”) voted four to zero with one abstention to grant Gyrodyne’s application for preliminary approval to divide the Flowerfield property into eight lots, subject to certain conditions (the “Flowerfield Subdivision Application”).

On April 26, 2022, the Incorporated Village of Head of the Harbor and certain other parties (collectively, the “Petitioners”), commenced a special proceeding under Article 78 of New York’s Civil Practice Law & Rules (the “Article 78 Proceeding”) against the Town of Smithtown and certain other parties, including Gyrodyne, seeking to annul the Planning Board’s determinations relating to the Flowerfield Subdivision Application.

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Gyrodyne and the Town of Smithtown are vigorously defending the Planning Board’s determinations against the Petition.

In June 2022, Gyrodyne and the Town of Smithtown filed motions to dismiss the Petition.

In June 2022, Gyrodyne and the Town of Smithtown filed motions to dismiss the Petition (the “Motions”).

On February 6, 2024, the Supreme Court of the State of New York, Suffolk County issued an order (the “Order”), denying the Motions in part and granting them in part.

Specifically, the Order (i) denied the Motions as to three individual Petitioners and the St.

James-Head of the Harbor Neighborhood Preservation Coalition, Inc., (ii) granted the Motions as to the remaining twenty (20) individual Petitioners and the Village of Head of the Harbor, (iii) denied the branch of Gyrodyne’s motion alleging that Petitioners failed to state a claim, and (iv) requires Gyrodyne to serve an answer within twenty (20) days of service of the Order.

The parties will submit their respective briefs on the merits of the remaining Petitioners’ contentions after which we believe the Court will render a decision.

The Article 78 Proceeding could take an additional six months or more for a decision given the impact the pandemic has had on the court system with additional time needed for an appeal, if one is filed.

Nevertheless, Gyrodyne remains confident that the process of negotiating purchase agreements, securing final subdivision approval and final unappealable site plan approval and consummating the sale of our properties will culminate by year-end 2025, although there can be no assurance that Gyrodyne and the Town of Smithtown will be successful in the defense of the Planning Board’s determinations against the Petition or that other factors beyond our control (i.e., potential contract contingencies including site plan approval for the undeveloped portion of Flowerfield (the developed portion, situated on two separate lots may be sold together or separately upon the resolution of the Article 78 Proceeding and the conclusion of the subdivision, without any site plan approvals)) will not necessitate an extension of the timeline.

The Flowerfield subdivision will remain subject to the Article 78 Proceeding unless Gyrodyne and the Town of Smithtown prevail in their defense of the Planning Board’s determinations against the Petition.

Nevertheless, the Company will continue its efforts to identify one or more purchasers for Flowerfield and execute purchase agreements, and it is unclear at this time what impact, if any, the Article 78 Proceeding will have on such efforts.

On October 11, 2024, the Supreme Court of the State of New York issued a ruling in favor of the Company dismissing the Article 78 petition in its entirety.

On October 28, 2024, the Company received a notice of appeal filed by the petitioners in this proceeding seeking to appeal the court’s dismissal of the Article 78 petition, citing as grounds for appeal “whether the court erred in denying the petition and dismissed the Article 78 proceeding, and any and all other issues which may arise upon further review of the record on appeal”.

On November 12, 2024, the petitioners filed a notice of motion to renew and reargue, seeking to have the court direct the respondents to undertake a supplemental environmental impact statement to address retaining of storm water at the property being developed in light of a recent storm, and to annul the resolution approving the preliminary site plan.

On March 17, 2025, the Supreme Court of the State of New York, Suffolk County issued an order denying the appellants motion to stay enforcement of the order, pending hearing and determination of appeal.

On March 21, 2025, the Supreme Court of the State of New York, Suffolk County issued an order denying the Petitioners motion to renew and reargue.

Pleadings filed in the Article 78 Proceeding may be accessed through a link (and related instructions) to the New York State Unified Court System which appears on the Company’s website at https://www.gyrodyne.com.

An Article 78 Proceeding could take up to two years or more to run its course given the likelihood of appeals and other motions.

Nevertheless, Gyrodyne remains confident in its defense of the appeal and the motion to renew and reargue.

Due to the anticipated time it may take for the appeal and any other motions in the Article 78 Proceeding to be finally resolved.

Gyrodyne believes that the process of negotiating purchase agreements, securing final subdivision approval and final unappealable site plan approval and consummating the sale of our properties will extend into 2026, although there can be no assurance that Gyrodyne and the Town of Smithtown will be successful in the defense of the appeal and any other motions or that other factors beyond our control will not necessitate a further extension of the timeline.

The developed portion of Flowerfield, situated on two separate lots, may be sold together or separately upon the resolution of the Article 78 Proceeding and the filing of the final subdivision map without site plan approval.

GYRODYNE, LLC

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Years Ended December 31, 2024 and 2023

The estimated timeline assumes that Flowerfield is not sold until the culmination of the Article 78 Proceeding.

Although Gyrodyne believes that selling individual lots will maximize value, it is also pursuing prospective purchasers who may be willing to purchase all of Flowerfield as an undivided parcel for terms that Gyrodyne finds more attractive from a timing and value perspective and which may allow for a sale before 2026.

On March 20, 2023, the Town of Cortlandt Town Board adopted the SEQRA findings statement and approved local law establishing the Medical Oriented Zoning District (the “MOD”) which includes Gyrodyne’s Cortlandt Manor property.

Pursuant to the adopted MOD, Gyrodyne received designation for total density of 154,000 square feet to be comprised of 150,000 square feet of medical use and 4,000 square feet of retail use.

Various other factors will continue to impact the timeline to achieve approvals, including the backlog of land use applications, labor shortages and environmental concerns.

Various other factors will continue to impact the timeline to achieve approvals, including the backlog of land use applications, zoning authority labor shortages and environmental concerns.

Nevertheless, we will continue to market the properties and, although there can be no assurances, the Company believes subdivision approval will be received in mid-2025 for Flowerfield, and could be received for Cortlandt Manor in mid-2026, contingent on the timing for entering contracts (which we anticipate will include closing terms conditioned upon receiving subdivision (if requested) and site plan approval which the Company believes can be pursued simultaneously rather than sequentially).

Although Gyrodyne believes that selling individual lots will maximize value, it is also pursuing prospective purchasers who may be willing to pay purchase prices for the entire undivided Flowerfield or Cortlandt Manor property, or for the entire company itself, that Gyrodyne finds more attractive from a timing and value perspective.

On January 5, 2024, Gyrodyne retained JLL Capital Markets to market the Company’s Flowerfield and Cortlandt Manor properties.

Gyrodyne 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.

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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 a class action lawsuit settled in 2015 (See Note 16 – Contingencies) and satisfy our remaining liabilities and obligations.

Under Gyrodyne’s Amended and Restated Limited Liability Company Agreement (the “LLC Agreement”), such dissolution would occur upon an election to dissolve the Company by the Board that is approved by the vote of holders of a majority of Gyrodyne common shares or, in the Board’s sole discretion and without any separate approval by the holders of 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 .

Under Gyrodyne’s Amended and Restated Limited Liability Company Agreement (the “LLC Agreement”), such dissolution may be effected upon an election to dissolve the Company by the Board that is approved by the vote of holders of a majority of Gyrodyne common shares or, in the Board’s sole discretion and without any separate approval by the holders of 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 .

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2024 and 2023

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:

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James, New York, including a 14 -acre multi-tenanted industrial park comprising 135,000 rentable square feet.

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2023 and 2022

Summary of Significant Accounting Policies

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These differences may be material.

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, 2025.

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 in 2026.

The Company is in the process of pursuing entitlements and density approvals, 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 has involved extensive analysis 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 with increased development flexibility.

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 values.

The Company believes the process of negotiating purchase agreements, securing final approvals and consummating the sale of our properties will culminate by year-end 2025.

The Company intends to aggressively market its properties and negotiate contracts in an effort to complete the process as soon as practicable with the ultimate timeline being largely dependent on factors outside the Company’s control, including without limitation the Article 78 Proceeding and delays in securing final regulatory approvals caused by the ongoing backlog of land use applications, government labor shortages and the pandemic.

Consequently, there can be no assurance that the Company will be able to meet our formal stated deadline of December 2025.

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, 2025.

As previously stated, on an ongoing basis, Gyrodyne evaluates the estimates and assumptions that can have a significant impact on the reported net assets in liquidation and will update respective information accordingly for any costs and value associated with a change in the duration of the liquidation, as we cannot give any assurance on the timing of the ultimate sale of all the Company’s properties.

GYRODYNE, LLC

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Years Ended December 31, 2024 and 2023

The Company believes the process of negotiating purchase agreements, securing final approvals and consummating the sale of our properties will culminate in 2026.

Consequently, there can be no assurance that the Company will be able to meet our formal stated deadline of 2026.

On an ongoing basis, Gyrodyne evaluates the estimates and assumptions that can have a significant impact on the reported net assets in liquidation and will update respective information accordingly for any costs and value associated with a change in the duration of the liquidation, as we cannot give any assurance on the timing of the ultimate sale of all the Company’s properties.

Management Estimates – In preparing the consolidated financial statements in conformity with U.S.

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Actual results could differ from those estimates.

The real estate market is cyclical in nature.

Property values are affected by, among other things, the availability of capital, occupancy rates, rental rates, interest rates and inflation rates.

As a result, determining real estate values involves many assumptions.

Amounts ultimately realized may vary significantly from the net assets in liquidation values presented.

The Company’s most significant accounting estimate relates to the determination of the value of net assets in liquidation.

Fair Value of Real Estate - The Company also considers in its valuation estimates the receipt of any expressions of interest/letters from perspective buyers adjusted to reflect the Company’s best estimate of any contingent financial terms inclusive of approval density and related site plans.

Cash equivalents - The Company considers all certificates of deposits, money market funds, treasury securities and other highly liquid debt instruments purchased with short-term maturities to be cash equivalents.

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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.

Industry Segments - Gyrodyne’s corporate strategy is to enhance the value of Flowerfield and Cortlandt Manor by pursuing entitlement opportunities to provide purchasers increased development flexibility, and by enhancing the value of our leases, and then selling our properties in an orderly manner at higher values.

The Company manages this strategy on an aggregated, single segment basis for purposes of assessing performance and making decisions (inclusive of capital allocation, leasing, entitlements and sales).

Therefore, the Company has only one reporting segment.

As reported, the Company is on a liquidation basis of accounting.

The detailed information regularly provided to the chief operating decision maker (“CODM”), the President and CEO, is reported in Note 4 in detail supporting the estimated liquidation and operating costs net of estimated receipts.

This information allows the CODM to manage and forecast any impact the operations have on the estimated real estate value and in the aggregate allows the CODM to calculate estimated distributions.

The net assets as of December 31, 2024 ($ 30,596,313 ) and December 31, 2023 ($ 30,721,034 ) results in estimated distributions of approximately $ 13.91 and $ 19.51 per common share, respectively, based on 2,199,308 and 1,574,308 shares outstanding, respectively.

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2024 and 2023

New Accounting Pronouncements - Management has evaluated the impact of newly issued accounting pronouncements, whether effective or not as of December 31, 2024, 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.

Statements of Net Assets in Liquidation

The increase of $ 353,535 is mainly attributable to the reduction in Retention Bonus Plan benefits stemming from the adoption of the Restricted Stock Plan and Amendment 5 of the Retention Bonus Plan ($ 3.6 million) (see Note 11 – Commitments) offset by expenses responding to and resolving a shareholder activism campaign and addressing feedback from shareholders ($ 1.2 million), costs net of receipts associated with a one year extension on the timeline ($ 1.5 million) and professional fees relating to the rights offering and loan closing fees ($ 411,000 ).

Net assets as of December 31, 2024 and December 31, 2023 would result in estimated liquidating distributions of $ 30,596,313 and $ 30,721,034 , or approximately $ 13.91 and $ 19.51 per common share, respectively, based on 2,199,308 and 1,574,308 shares outstanding, respectively (see Note 12 – Rights Offering).

The decrease of $ 124,721 in estimated liquidating distributions is mainly attributable to the decrease in real estate value of $ 3,392,000 and the increased costs associated with the one year time line extension ($ 1,912,000 ) offset by the cash raised in the rights offering (net proceeds of $ 4,418,380 ) which closed on March 7, 2024, savings in costs associated with the decrease in real estate value of 336,283 and other savings (approximately $ 425,000 of which approximately $ 350,000 is a result of a negotiated reduction in legal fees from the shareholder activist campaign).

Approximately $ 3.39 per share of the $ 5.60 decrease in net assets per share is attributable to the issuance in Rights Offering of 625,000 shares at $ 8 per share (reflecting a discount of $ 8.12 per share to the proforma net assets in liquidation as of December 31, 2023).

The cash balance at the end of the liquidation period (currently estimated to be December 31, 2026, 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, 2026:

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Principal payments on the Company’s credit facilities.

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2023 and 2022

The Company estimates the net realizable value of its real estate assets by using income and market valuation techniques.

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820, Fair Value Measurement.

The Company also considers in its valuation estimates the receipt of any expressions of interest/letters from perspective buyers adjusted to reflect the Company’s best estimate of any contingent financial terms inclusive of approval density and related site plans.

The cash flow models include estimated cash inflows and outflows over a specified holding period.

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 relevant Company experience with its current and previously owned properties.

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, local supply and demand observations.

To the extent the Company underestimates or overestimates forecasted cash outflows (capital improvements, lease commissions and operating costs) or overestimates or underestimates forecasted cash inflows (rental revenue rates), the estimated net realizable value of its real estate assets could be overstated or understated.

The Company estimates that it will incur approximately $ 1,210,900 (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 2024 through the end of the liquidation period, currently estimated to conclude on or about December 31, 2025, in an effort to obtain entitlements, including special permits.

To the extent the Company underestimates or overestimates forecasted cash outflows (capital improvements, excluding any costs for sewage treatment plants, lease commissions and operating costs) or overestimates or underestimates forecasted cash inflows (rental revenue rates) or other unfavorable or favorable variances of the aforementioned assumptions, the estimated net realizable value of its real estate assets could be overstated or understated.

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2024 and 2023

The Company estimates that it will incur approximately $ 1,239,000 in land entitlement costs (included in the consolidated statement of net assets as part of the estimated liquidation and operating costs net of receipts, (see Note 4)) from January 2025 through the end of the liquidation period, currently estimated to conclude in 2026, in an effort to obtain entitlements, including special permits.

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 aggregate Flowerfield and Cortlandt Manor property values and resulting distributions.

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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.

The value of the real estate reported in the statement of net assets as of December 31, 2023 includes some but not all of the potential value impact that may result from the land entitlement 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.

Net assets as of December 31, 2023 and December 31, 2022 would result in estimated liquidating distributions of $ 30,721,034 and $ 30,367,499 , or approximately $ 19.51 and $ 20.48 per common share, respectively, based on 1,574,308 and 1,482,680 shares outstanding, respectively (see Note 11 – Commitments, Restricted Stock Plan and Note 17 – Subsequent Events), based on estimates and other indications of sales value which includes some but not all of the potential sales proceeds that may result directly or indirectly from our land entitlement efforts.

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, 2023 and December 31, 2022 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 ultimately enhance estimated distributions per share through the improved aggregate values (some but not all 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 entitlements and other expenses.

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, 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.

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2023 and 2022

Estimated Liquidation and Operating Costs Net of Estimated Receipts

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Selling costs on real estate assets

Retention bonus payments to directors, officers and employees

Retention bonus payments to officers and employees

Liability for estimated liquidation and operating costs net of estimated receipts

*Corporate expenditures includes $ 258,600 in future legal fees to address the Article 78 proceeding.

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2024 and 2023

The change in the liability for estimated costs in excess of estimated receipts during liquidation from January 1, 2023 through December 31, 2023 is as follows:

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Liability for estimated liquidation and operating costs net of estimated receipts

*The remeasurement of corporate expenditures includes $ 500,000 in additional legal fees to address the Article 78 proceeding of which $ 170,000 was incurred through December 31, 2022 leaving a balance of $ 330,000 .

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2023 and 2022

* Corporate expenditures includes $ 258,600 in future legal fees to address the Article 78 proceeding.

Loans Payable

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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.

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2024 and 2023

On September 15, 2021, the Company, through its subsidiary GSD Cortlandt, LLC (“GSD Cortlandt”), secured a $ 4.95 million term loan (the “2021 Mortgage Loan”) with Signature Bank, the proceeds of which were used to pay off the previous GSD Cortlandt debt facility of which $ 1,050,000 was outstanding.

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The lender has the right, but not the obligation, to decline to extend the term of the 2021 Mortgage Loan if the loan to value ratio of the property is greater than seventy percent ( 70 %), or the property does not support a debt service coverage ratio (as calculated by the lender) of at least 1.3 to 1, in each case on the date the extension is exercised.

GSD Cortlandt also is responsible for all fees and expenses associated with the extension including, but not limited to, the lender’s reasonable legal fees, an inspection fee in the amount of $ 150 , and a tax service fee.

The 2021 Mortgage Loan may be prepaid in whole or in part, at any time, provided the borrower (GSD Cortlandt) pays the bank with each prepayment a prepayment fee equal to (i) during the first loan year and, if applicable, the first loan year of the Extension Period, five percent of the amount of such prepayment;

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All prepayments must include accrued and unpaid interest through the date of prepayment.

If the Cortlandt Manor property is sold to a bona fide third-party purchaser within the initial two years of the term of the Mortgage Loan, the prepayment fee to be paid upon repayment of the Mortgage Loan in full will be reduced by fifty percent.

On December 14, 2023, the FDIC transferred the 2021 Mortgage Loan to SIG CRE 2023 Venture LLC, which continues to be the holder of the 2021 Mortgage Loan.

The outstanding balance as of December 31, 2024 was $ 4,658,688 .

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2023 and 2022

On March 12, 2023, Signature Bank was closed by the New York State Department of Financial Services, which appointed the Federal Deposit Insurance Corporation (the “FDIC”) as receiver.

To protect depositors, the FDIC transferred all the deposits and substantially all of the assets of Signature Bank to Signature Bridge Bank, N.A., a full-service bank that will be operated by the FDIC as it markets the institution to potential bidders.

On March 12, 2023, the Company had approximately $ 61,000 on deposit and approximately $ 97,000 in a real estate tax escrow account (escrow balance will not exceed approximately $ 109,000 ) at Signature Bank.

Based upon the announcement on March 12, 2023, from the U.S.

Department of the Treasury, the U.S.

Federal Reserve and the FDIC that all depositors of Signature Bank would have access to all of their deposits and the fact that the amount on deposit is below the $250,000 cap on FDIC deposit insurance, the Company expects to have access to all of its cash on deposit at Signature Bank.

On December 14, 2023, the FDIC transferred the Mortgage Loan to SIG CRE 2023 Venture LLC, which is now the holder of the Mortgage Loan.

There are no undrawn amounts under the Mortgage Loan.

The 2021 Mortgage Loan is secured by the Cortlandt Manor property located at 1985 Crompond Road ( 5.01 acres).

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The 2023 Mortgage Loan is secured by a first mortgage in the amount of $ 1,500,000 on the interests of GSD Cortlandt in 1989 Crompond Road and 1987 Crompond Road in Cortlandt Manor, New York, and the interests of Buttonwood in 206 Buttonwood Avenue and certain vacant land off of Buttonwood Road in Cortlandt Manor, New York.

On February 1, 2024, an agreement was signed with one vendor who had previously agreed to defer 50 % of payment until the closing of the first property lot sale that is the subject of either the Flowerfield or Cortlandt Manor subdivision.

The agreement called for a $ 200,000 payment on outstanding invoices plus an interest payment on such invoices, interest to accrue monthly on the outstanding balance, agreement to pay all future invoices in full, and conversion of the remaining outstanding balance of $ 477,829 (balance due after the $ 200,000 payment) to a loan payable within 15 days of the sale of one of the Company’s properties.

The loan accrued interest at 0.75 % per month through 2024 and will accrue interest at 1.0 % per month starting January 2025.

The total debt payable mature as follows:

Years Ending December 31,

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2024 and 2023

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).

During 2023, the net realizable value of real estate increased by $ 110,000 and in 2022 it increased by $ 11,143,500 .

Both the 2023 and the 2022 increase is primarily driven by the current status of entitlement uses and market conditions.

During 2024, the net realizable value of real estate decreased by $ 3,392,000 and in 2023 it increased by $ 110,000 .

Both the 2024 and the 2023 change is primarily driven by the current status of entitlement uses and market conditions.

The valuation of the remaining real estate as of December 31, 2024 is $ 50,388,000 .

Net Realizable Value at beginning of period

Sale of Real Estate

Change in Net Realizable Value

1 unchanged sentence

Net Realizable Value on December 31,

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2023 and 2022

Accounts Payable and Accrued Liabilities

5 unchanged sentences

Deferred Compensation to Directors (b)

The Company reached agreements with certain service vendors to defer a portion of past obligations until the closing of the first property lot sale that is the subject of either the Flowerfield or Cortlandt Manor subdivision, respectively.

The director fees and interest accrued under the deferred Compensation Plan where most directors elected to defer 100 % of his fees for 2020, 2021, 2022, 2023 and 2024.

This amount also includes the deferred compensation of a Board advisor per an agreement to defer payments due.

Represents amount of deferred fees pursuant to informal agreements the Company reached with certain service vendors to defer payment until certain dates, some of which include the closing of the first property lot sale that is the subject of either the Flowerfield or Cortlandt Manor subdivision, respectively.

In February 2024, an agreement was made with one vendor who previously agreed to defer 50 % of their fees to pay $ 200,000 and to convert the remaining balance of $ 477,829 to an interest-bearing loan (see Note 5 – Loans Payable).

The director fees and interest accrued under the deferred Compensation Plan where most directors elected to defer 100 % of their fees for 2024, 2023, 2022, 2021 and 2020 excluding Jan Loeb who was nominated to the Board on July 28, 2023, and elected to a three-year term at the annual shareholder meeting on October 12, 2023.

This amount also includes the deferred compensation of a former Board advisor per an agreement to defer payments due under an advisor agreement and two previous Board members.

Accrued liabilities on December 31, 2024 and 2023 are as follows:

3 unchanged sentences

The Company’s open tax years are 2022, 2023 and 2024.

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2024 and 2023

The Bipartisan Budget Act of 2015 (the “2015 Act”) changed this procedure for partnership tax audits and audit adjustments for partnership returns of large partnerships for fiscal years beginning after December 31, 2017.

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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, 2023 and 2022, the Company had an $ 8,555 and zero balance, respectively, in its allowance for doubtful accounts.

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2023 and 2022

As of December 31, 2024 and 2023, the Company had an $ 0 and $ 8,555 balance, respectively, in its allowance for doubtful accounts.

Concentration of Credit Risk

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For the year ended December 31, 2023 rental income from the Company’s three largest tenants represented approximately 25 %, 21 % and 9 % of total rental income.

The three largest tenants by revenue as of December 31, 2022 consist of a New York State Agency located in the industrial park, a medical tenant in the Cortlandt Manor Medical Center and an athletics facility in the industrial park.

The three largest tenants by revenue as of December 31, 2023 consist of a medical tenant in the Cortlandt Manor Medical Center, a New York State Agency located in the industrial park, and an athletics facility in the industrial park.

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.

As of December 31, 2023 and 2022, other commitments and contingencies are summarized in the below table:

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2024 and 2023

As of December 31, 2024 and 2023, other commitments and contingencies are summarized in the table below:

Management Employment agreements with bonus* and severance commitment contingencies

9 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.

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2023 and 2022

As a result of feedback we received from shareholders during our shareholder listening tours in 2022 and 2023, the Company evaluated various possible changes to the Plan to better align the interests of the Plan participants with those of the shareholders.

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if employment terminates by death, disability or voluntary termination following substantial reduction in compensation (assuming no “cause” grounds for involuntary termination), however, the employee participant remains entitled to benefits only with respect to any property sales occurring within three years and yielding an internal rate of return of at least 4 % (IRR ceases to apply to periods beginning after the property is under contract).

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2024 and 2023

Benefits generally not payable until shareholders paid :

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Early sale incentive :

If any property is sold on or before June 30, 2024, the bonus pool for employee participants will be funded with an additional 1 % of net sale price.

If any property is sold on or before September 30, 2024, the bonus pool for employee participants will be funded with an additional 1 % of net sale price.

Removal of price floor :

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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:

Bonus Pool Percentage

Board Members/Employees

Prior to Amend.

Board Members and Employees

Amendment No.

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Officer Discretionary Amount (c)

Other Employees

15 % ( 18.75 %) for the Chairman and 10 % ( 12.5 %) for each of the other three remaining participant directors.

Jan Loeb (appointed to the Board on July 28, 2023) is not a participant in the Plan.

Amount forfeited upon the departure of two directors which would have been reallocated to the remaining directors pursuant to the Plan.

Jan Loeb (nominated to the Board on July 28, 2023 and elected to a three-year term on October 12, 2023) is not a participant in the Plan.

Amount forfeited upon departure of two directors, which would have been reallocated to the remaining directors pursuant to the Plan.

The officer discretionary amount will be allocated to the officers within the discretion of the Board.

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2023 and 2022

Other employees will receive 0.75 % prior to amendment 5 or 2.143 % after amendment No.

5 and the approval of the restricted stock plan.

The remaining 3.10 % (prior to amendment 5) or 8.857 % (after amendment 5) will be allocated to officers and employees within the discretion of the Board.

Under the Plan, there were no payments made during the year ended December 31, 2024.

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The purpose of adoption of the Stock Plan was to incentivize the former director participants in the Bonus Plan to exchange their interests in the Bonus Plan for shares in the Company issuable under the Stock Plan, which would allow for compensation plan separation between directors and employees and better alignment of interests between director participants and shareholders.

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2024 and 2023

Directors of the Company who were participants in the Bonus Plan were eligible to receive grants under the Stock Plan.

3 unchanged sentences

Maximum Shares:

The total number of shares that were authorized for issuance under the Stock Plan at the effective time is 91,628 shares, or approximately 5.8 % of the common shares outstanding at the effective time of the Stock Plan after giving effect to the issuance of the Stock Plan shares.

The total number of shares that were authorized for issuance under the Stock Plan at the effective time is 91,628 shares, or approximately 5.8 % of the common shares outstanding at the effective time of the adoption of the Stock Plan after giving effect to the issuance of the Stock Plan shares (or 4.2 % of the current total common shares outstanding after giving effect to the rights offering).

All 91,628 Stock Plan shares were issued effective November 14, 2023 to Stock Plan participants.

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All shares issued in connection with a grant are subject to the terms, conditions, and restrictions set forth in the Company’s articles of organization, amended and restated limited liability company agreement, or other governing documents of the Company, as amended.

Vesting of shares issued under the Stock Plan occurs (i) in equal one-third tranches on each of the first three anniversaries of the grant date, and (ii) at such time as a liquidating distribution is made to the shareholders of the Company, subject to acceleration upon a liquidating distribution.

Unvested Stock Plan shares will be forfeited by a participant if such participant is no longer serving on the Board at or prior to such time that liquidating distributions are paid to the shareholders other than as a result of death, disability or failure to be reelected.

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2023 and 2022

The Board may amend, suspend or terminate the Stock Plan at any time, in its discretion, except that shareholder approval is required for any amendment that increases the number of shares available for grant, accelerates vesting or results in a material increase in benefits or a change in eligibility requirements.

3 unchanged sentences

Richard Smith

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2024 and 2023

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.

2 unchanged sentences

All DCP benefits will be paid in a single lump sum cash payment on December 15, 2031, 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.

Each of the Directors elected (under the DCP) to defer 100 % of their director fees for 2020, 2021, 2022, 2023 and 2024 excluding Jan Loeb who was nominated to the Board on July 28, 2023.

Each of the Directors elected (under the DCP) to defer 100 % of their director fees for 2020, 2021, 2022, 2023, 2024 and 2025 excluding Jan Loeb who was nominated to the Board on July 28, 2023 and elected to a three-year term at the annual shareholder meeting on October 12, 2023.

Rights Offering

The Company completed a rights offering (the “Rights Offering”) on March 7, 2024 pursuant to which we generated net proceeds of approximately $ 4,400,000 .

In connection to the Rights Offering the Company filed a registration statement on Form S-1 with the Securities and Exchange Commission (the “Commission”) on December 29, 2023 to distribute to holders of Gyrodyne’s common shares on the record date of January 29, 2024 one non-transferable subscription right for each five shares held.

Each whole subscription right gave the shareholders the opportunity to purchase two of the Company’s common shares for $ 8.00 per share, or 625,000 shares in the aggregate.

If a shareholder exercised his or her basic subscription right in full, and other shareholders did not, such shareholder was entitled to an oversubscription privilege to purchase a portion of the unsubscribed shares at the subscription price, subject to proration and certain limitations.

The maximum dollar amount the Company sought to raise in the Rights Offering was $ 5 million in aggregate gross proceeds.

The Commission declared the registration statement effective on February 2, 2024 and the Company commenced the Rights Offering on February 6, 2024.

The Company announced on March 11, 2024 that it received subscriptions for 1,031,640 shares, greatly exceeding the maximum shares offered of 625,000 .

Shareholders were allocated 100 % of their basic subscriptions.

Based on the maximum 625,000 shares that were issuable in the rights offering, 271,836 shares were allocated to shareholders who properly exercised their oversubscription privilege, pro rata in proportion to the aggregate number of shares subscribed for under the over-subscription privilege, or approximately 40 % of each over-subscriber’s requested shares.

The rights offering resulted in 625,000 common shares issued on March 12, 2024 and net proceeds received (after expenses) of approximately $ 4,400,000 (gross proceeds of $ 5,000,000 less direct expenses of the rights offering of approximately $ 600,000 ).

The Company expects to use the net proceeds received from the Rights Offering to complete the pursuit of entitlements on the Company’s Flowerfield and Cortlandt Manor properties, for litigation fees and expenses in the Article 78 proceeding, for property purchase agreement negotiation and enforcement, for necessary capital improvements in the Company’s real estate portfolio, and for general working capital.

Fair Value of Financial Instruments

4 unchanged sentences

However, the Company adopted the liquidation basis of accounting, and therefore reports all assets and liabilities at net realizable value.

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2024 and 2023

The guidance emphasizes that fair-value is a market-based measurement, not an entity-specific measurement.

4 unchanged sentences

Our assessment of the significance of a particular input to the fair-value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2023 and 2022

Fair Value Measurements - The Company adopted the liquidation basis of accounting effective September 1, 2015;

2 unchanged sentences

The Company may estimate net realizable values using market information such as broker opinions of value, appraisals, and recent sales data for similar assets or discounted cash flow models, which primarily rely on Level 3 inputs.

The cash flow models include estimated cash inflows and outflows over a specified holding period.

9 unchanged sentences

Additionally, the Company agreed not to increase director compensation fees.

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2024 and 2023

The Cooperation Agreement also obligated Star Equity to vote all Company shares beneficially owned by it at the Annual Meeting in accordance with the Board’s recommendations.

4 unchanged sentences

Through December 31, 2024, the cumulative cost to the Company of responding to and resolving the foregoing shareholder activist campaign, including changes to our incentive compensation arrangements, was approximately $ 950,000

We are working with insurance coverage counsel to pursue coverage under our existing directors and officers insurance policy for amounts in excess of the $ 500,000 insurance deductible under the policy.

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2023 and 2022

On July 28, 2023, Philip F.

7 unchanged sentences

Loeb was elected by the shareholders to serve a three-year term.

Public Health and Macroeconomics

The COVID-19 pandemic was a significant factor in prolonging the entitlement process.

The pandemic has resulted in a significant shift toward commercial acceptance of remote working and telemedicine which is adversely impacting our occupancy rate and average rate per square foot.

Concurrently, the war between Russia and Ukraine increased uncertainty during 2022 and 2023 with such uncertainty being exacerbated by the war between Israel and Hamas in Gaza and a threat of a broader conflict.

Inflation has caused an increase in consumer prices, thereby reducing purchasing power and elevating the risks of a recession.

Due to increased inflation, the U.S.

Federal Reserve raised the federal funds rate a total of seven times during 2022 and four times in 2023.

In response, market interest rates have increased significantly during this time.

At the same time, the labor market remains historically tight and companies continue to look to add employees, pushing unemployment lower.

The extent of the impact of these public health and macroeconomic risks on the Company's operational and financial performance and ultimately its Net Asset Value, will depend on current and future developments, including the residual effects of the COVID-19 pandemic and the extent to which interest rate hikes to combat inflation have a recessionary effect.

Pandemic and Macroeconomics

The following discussion is intended to provide shareholders with certain information regarding the impacts of the COVID-19 pandemic on the Company’s business and management’s efforts to respond to those impacts.

Unless otherwise specified, the statistical and other information regarding the Company’s properties and tenants are estimates based on information currently available to the Company, may change, potentially significantly, going forward, and may not be indicative of the actual residual impact of the COVID-19 pandemic on the Company’s business, operations, cash flows and financial condition for the year ended December 31, 2024 and future periods.

The COVID-19 pandemic has also adversely impacted, and may continue to impact adversely, the timeliness of local government in granting required approvals, as state and local staff charged with processing our subdivision applications all postponed activity due to work-from-home transitions.

Accordingly, COVID-19 has caused, and may continue to cause, the completion of important stages in our efforts to secure entitlements to be delayed.

The pandemic has also resulted in a significant shift toward commercial acceptance of remote working and telemedicine which may adversely impact our occupancy rate and average rate per square foot, although medical office has faced less of a challenge from work-from-home shifts.

We are affected by the fiscal and monetary policies of the United States Government and its agencies, including the policies of the Federal Reserve, which regulates the supply of money and credit in the United States.

The combination of elevated interest rates and persistent inflation (or the perception that any of these events may continue) have contributed to continued weakness in commercial real estate markets, including in those real estate markets in which we operate.

Changes in fiscal and monetary policies are beyond our control and are difficult to predict.

Although the Federal Reserve decreased the federal funds rate multiple times in 2024, the rate continues to be elevated and there can be no assurance that the rate will continue to decrease or that it will not be increased in 2025 and beyond.

While lower market rates and increased capital markets liquidity supports commercial real estate property transactions and values, regulated lending institutions are adjusting their business models to increase capital requirements for direct loans to real estate and thus continue to be constrained in providing capital for commercial real estate properties.

Changes in the federal funds rate as well as the other policies of the Federal Reserve affect interest rates, which have a significant impact on our financial condition.

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2024 and 2023

The extent of the continuing impact of these public health and macroeconomic risks on the Company's operational and financial performance and ultimately its Net Asset Value, will depend on current and future developments, including the residual effects of the COVID-19 pandemic and the extent to which persistently high interest rates continue to have an adverse impact on the real estate industry or have a recessionary effect generally.

As a result of the foregoing developments, we are unable to determine what the ultimate impact of general economic conditions will be on our timeline for seeking entitlements and selling properties, and ultimately on the amount proceeds and distributions from those sales.

10 unchanged sentences

In June 2022, Gyrodyne and the Town of Smithtown filed motions to dismiss the Petition.

During the third quarter, the Article 78 Proceeding was re-assigned to a different judge for the second time.

During the third quarter of 2023, the Article 78 Proceeding was re-assigned to a different judge for the second time.

On February 6, 2024, the Supreme Court of the State of New York, Suffolk County issued an order (the “Order”), denying the Motions in part and granting them in part.

Specifically, the Order (i) denied the Motions as to three individual Petitioners and the St.

The parties will submit their respective briefs on the merits of the remaining Petitioners’ contentions after which we believe the Court will render a decision.

On October 11, 2024, the Supreme Court of the State of New York issued a ruling in favor of the Company dismissing the Article 78 petition in its entirety.

On March 21, 2025, the Supreme Court of the State of New York, Suffolk County issued an order denying the Petitioners motion to renew and reargue.

General - In the normal course of business, the Company is a party to various legal proceedings.

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.

GYRODYNE, LLC

2 unchanged sentences

Years Ended December 31, 2024 and 2023

General - In the normal course of business, the Company is a party to various legal proceedings.

Related Party Transactions

9 unchanged sentences

The Chairman was also a partner of the firm LambZankel, LLP that provided pro bono legal representation to the aforementioned not-for-profit corporation on the lease.

Subsequent Events

Rights Offering – The Company filed a registration statement on Form S-1 with the Securities and Exchange Commission (the “Commission”) on December 29, 2023 with respect to a proposed rights offering (the “Rights Offering”) for the Company to distribute to holders of Gyrodyne’s common shares on the record date of January 29, 2024 one non-transferable subscription right for each five shares held.

Each whole subscription right gave the shareholders the opportunity to purchase two of the Company’s common shares for $ 8.00 per share, or 625,000 shares in the aggregate.

The maximum dollar amount the Company sought to raise in the Rights Offering was $ 5 million in aggregate gross proceeds.

The Commission declared the registration statement effective on February 2, 2024 and the Company commenced the Rights Offering on February 6, 2024.

GYRODYNE, LLC

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Liquidation Basis)

Years Ended December 31, 2023 and 2022

The Rights Offering closed on March 7, 2024 and the Company announced on March 11, 2024 that it received subscriptions for 1,031,640 shares, greatly exceeding the maximum shares offered of 625,000 .

Shareholders were allocated 100 % of their basic subscriptions.

Inclusive of the issuance of shares and net proceeds from the Rights Offering, the December 31, 2023 estimated net assets in liquidation would be $ 35,463,133 or $ 16.12 per share based on 2,199,308 shares outstanding (current shares outstanding of 1,574,308 plus the Rights Offering shares of 625,000 ).

Loan payable – On February 1, 2024, an agreement was signed with one vendor who had previously agreed to defer 50 % of payment until the closing of the first property lot sale that is the subject of either the Flowerfield or Cortlandt Manor subdivision.

The agreement called for a $ 200,000 payment on outstanding invoices, an interest payment, agreement to pay all future invoices in full and the remaining outstanding balance of $ 477,829 was converted to a loan payable within 15 days of the sale of one of the Company’s properties.

The loan will accrue interest at 0.75 % per month through 2024 and 1.0 % per month starting January 2025.

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.

What changed 10-K

Item 9A. Controls and Procedures