Business Overview - Gyrodyne's primary business involves managing a portfolio of medical office and industrial properties located in Suffolk and Westchester Counties, New York[98]. - Gyrodyne's strategy includes pursuing entitlement opportunities to increase property values and maximize shareholder returns[104]. - The company intends to dissolve after completing the disposition of all real property assets and making liquidating distributions to shareholders[101]. - Gyrodyne's dual strategy aims to enhance the value of its properties while managing the strategic sale of real estate assets[105]. Financial Position and Projections - The company expects to have a cash balance of approximately $22.56 million by December 31, 2022, which would equate to future liquidating distributions of $15.22 per share based on 1,482,680 common shares outstanding[108]. - Estimated net assets in liquidation as of March 31, 2021, are $22,560,059, resulting in estimated liquidating distributions of approximately $15.22 per common share based on 1,482,680 shares outstanding[176]. - The company estimates total gross cash proceeds from the sale of its assets to be approximately $39.05 million, with an estimated distributable cash of around $22.56 million from the liquidation process[195]. - The cash balance at the end of the liquidation period is estimated to be $2.37 million, plus adjustments for various items through December 31, 2022[178]. Entitlement and Development Efforts - The Company has applied for a zoning amendment to rezone the Cortlandt property into a Medical Oriented District (MOD) and seeks approval for a unified site plan[119]. - The amended site plan includes a two-lot subdivision with a total of 184,600 square feet of medical office space and 1,500 square feet of retail space[120]. - The Company is pursuing entitlements for the Flowerfield property to maximize its value, with ongoing discussions with the Town of Smithtown regarding potential development projects[130]. - The Company anticipates incurring approximately $1.32 million in costs over the liquidation period ending December 31, 2022, to obtain entitlements for the Flowerfield and Cortlandt Manor properties[186]. Risks and Challenges - The company faces risks and uncertainties related to economic conditions, regulatory approvals, and the ongoing COVID-19 pandemic, which may impact its business operations[95]. - The pandemic has negatively impacted demand for office and hotel development, influencing the Company's subdivision plan at Flowerfield[135]. - The healthcare industry, which includes the Company's tenants, is facing increased regulation that could materially impact operations and marketability of properties[137]. - The company is required to make adequate provisions to satisfy known and unknown liabilities, which could delay or limit future distributions to shareholders[189]. Financial Management and Costs - The Company has incurred approximately $174,000 in land entitlement costs during the three months ended March 31, 2021, with an estimated additional $1.3 million in costs through December 31, 2022[122]. - The Company has taken proactive measures to manage costs, deferring approximately $717,000 in land development fees and other professional fees[144]. - The Company secured a second loan for up to $3,000,000, which includes an interest-only phase for the first 24 months, converting to a permanent loan maturing on January 20, 2028[146]. - The Company has secured a loan for up to $2,500,000 to enhance liquidity, with a variable interest rate not less than 4.75%[148]. Lease and Revenue Activities - During the three months ended March 31, 2021, the Company executed three new leases and four renewals, generating annual revenue of approximately $42,000 and $67,000 respectively[151]. - The Company has deferred approximately $97,000 of rental revenue due to tenants affected by COVID-19, with all deferred rent expected to be collected under alternate arrangements[150]. - The company reported cash flows for the three months ended March 31, 2021, including $634,806 in rent and reimbursements and $431,814 in operating costs, resulting in a net cash use[204]. Property Sales and Liquidation - The estimated gross real estate proceeds are $39.05 million, with selling costs on real estate estimated at $3.08 million[184]. - General and administrative expenses are estimated at $2.77 million, while retention bonus plan costs for directors, officers, and employees are estimated at $2.91 million[184]. - The company does not intend to develop properties but will focus on positioning them for sale with necessary entitlements to maximize value[179]. - The company is considering various options to maximize total value during the liquidation process, including entertaining offers from potential buyers for the properties[186].

Strategy and Operations - Gyrodyne's strategy focuses on enhancing the value of Flowerfield and Cortlandt Manor through entitlement opportunities and lease value improvements[100]. - Gyrodyne's dual strategy involves pursuing joint ventures and other investments to maximize shareholder returns without adversely affecting distribution timing[101]. - The company is managing its real estate portfolio to improve operating cash flow while increasing market values[106]. - The Company is focusing on maximizing pre-construction values for its properties with the least amount of risk, potentially entertaining offers from buyers during the entitlement process[130]. - The Company is exploring potential real estate development projects in Flowerfield that align with existing zoning and may seek additional entitlements or concessions from the Town of Smithtown[137]. - The Company has committed resources toward market research and feasibility studies to achieve entitlements for maximizing property value[132]. - The Company aims to position its properties for sale with all necessary entitlements to achieve maximum value in the shortest time frame[130]. - The Company is pursuing various avenues to maximize total value during the liquidation process to enhance distributions to shareholders[185]. Financial Projections and Liquidation - As of June 30, 2020, the estimated cash balance at December 31, 2021, is projected to be approximately $31.38 million, equating to future liquidating distributions of $21.16 per share based on 1,482,680 common shares outstanding[109]. - The company intends to dissolve after completing the disposition of all real property assets and making liquidating distributions to shareholders[101]. - The estimated distributions are based on values as of June 30, 2020, and include some potential value from ongoing entitlement efforts[109]. - The liquidation process involves uncertainties regarding the ultimate amount and timing of distributions to shareholders[110]. - The estimated net assets in liquidation at June 30, 2020 amount to $31,379,681, resulting in estimated liquidating distributions of approximately $21.16 per common share based on 1,482,680 shares outstanding[188]. - The cash balance at the end of the liquidation period is estimated based on adjustments for various items, including net proceeds from the sale of all real estate holdings[184]. - The company estimates total gross cash proceeds from the sale of its assets to be approximately $48.27 million[202]. - The total change in net assets in liquidation from January 1 through June 30, 2020, was $10,044, resulting in net assets in liquidation of $31,379,681[193]. - The company anticipates that its current cash balance and access to credit facilities will be adequate to fund its liquidation process and dissolution[202]. Real Estate and Development - Gyrodyne's properties include the Cortlandt Manor Medical Center (34,000 square feet on 13.8 acres) and the Flowerfield Industrial Park (127,000 rentable square feet)[105]. - The Company filed an application to develop the Cortlandt Manor property, which includes a medical office building of 100,000 square feet, 200 multi-family apartments, and 4,000 square feet of retail space[133]. - The Town of Cortlandt is processing a proposed zoning initiative to create a Medical Oriented District (MOD) that would include the Company's property, aimed at expanding medical infrastructure and economic development[123]. - The Town of Smithtown approved the Company's subdivision application for the Flowerfield property without conditions, facilitating the next steps in the approval process[139]. - The Company anticipates that the Final Generic Environmental Impact Statement (GEIS) will be accepted by the Town Board in early 2021, with subdivision and site plan approvals expected by mid-2021[136]. - The Company has been actively engaging with the Town of Cortlandt to support its application for a Medical Oriented District designation, which would replace existing zoning[135]. Financial Performance and Costs - The Company incurred approximately $613,000 in land entitlement costs during the six months ended June 30, 2020, with an estimated additional $1.25 million expected through December 31, 2021[129]. - The entitlement costs for the six months ended June 30, 2020, were approximately $524,000[142]. - The Company incurred approximately $1.25 million in land entitlement costs to maximize the value of the Flowerfield and Cortlandt Manor properties[191]. - Operating cash flows included $1,197,672 in rent and reimbursements, with operating costs of $741,839 and corporate expenditures of $1,025,924[205]. - The Company incurred approximately $3,000 in lease commissions during the six months ended June 30, 2020[166]. - The Company has drawn down approximately $2.2 million from a credit facility for tenant improvements, with a remaining balance available for future draws[197]. - The Company has taken proactive measures to manage costs, including deferring approximately $507,000 of land development fees until the first post-subdivision property lot is sold[163]. Impact of COVID-19 - Risks related to the COVID-19 pandemic may impact business operations and timelines for property sales and distributions[95]. - The COVID-19 pandemic has significantly impacted the Company's operations, with uncertainty regarding the timeline for securing entitlements and the sale of real estate[153]. - The Company expects to meet the requirements for full or substantial forgiveness of the $82,100 PPP Loan under the CARES Act[200]. - The Company received total proceeds of $82,100 from a PPP Loan under the CARES Act, primarily used for payroll costs[164]. - The company anticipates modifying the terms of its loans following the completion of its subdivision to secure loans by the subdivided industrial park lot only[161]. Tenant and Lease Information - The annual lease commitments to service Stony Brook University and its affiliates as of June 30, 2020, amounted to $631,694, with most leases not up for renewal until 2025[146]. - The Company executed two new leases and nine renewals during the six months ended June 30, 2020, comprising approximately 1,100 and 14,800 square feet, generating annual revenue of approximately $13,800 and $254,000, respectively[165]. - Approximately 38% of the Company's tenants are classified as Small Businesses and not-for-profit corporations based on projected annual revenues for 2020[155].