Gyrodyne(GYRO) - 2025 Q2 - Quarterly Report

FORM 10-Q Cover](index=1&type=section&id=FORM%2010-Q%20Cover) INDEX TO QUARTERLY REPORT OF GYRODYNE, LLC](index=2&type=section&id=INDEX%20TO%20QUARTERLY%20REPORT%20OF%20GYRODYNE%2C%20LLC) PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) Item 1. Financial Statements. Gyrodyne's consolidated financial statements on a liquidation basis report $32.61 million net assets as of June 30, 2025, with $14.83 per share estimated distribution Consolidated Statements of Net Assets | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :----------------------------- | :------------------------ | :------------------------ | | Real estate held for sale | $54,890,000 | $50,388,000 | | Cash and cash equivalents | $5,480,958 | $5,899,232 | | Total Assets | $60,522,637 | $56,660,091 | | Total Liabilities | $27,913,772 | $26,063,778 | | Net assets in liquidation | $32,608,865 | $30,596,313 | Consolidated Statement of Changes in Net Assets | Metric | Amount | | :-------------------------------------- | :------------ | | Net assets in liquidation, as of December 31, 2024 | $30,596,313 | | Change in liquidation value of real estate | $4,502,000 | | Remeasurement of assets and liabilities | $(2,489,448) | | Net increase in liquidation value | $2,012,552 | | Net assets in liquidation, as of June 30, 2025 | $32,608,865 | Notes to Consolidated Financial Statements 1. The Company - Gyrodyne's corporate strategy is to pursue entitlements on its two remaining properties (Cortlandt Manor and Flowerfield) to increase development flexibility and maximize sale prices, with the ultimate goal of dissolution after asset disposition and debt settlement[13] - The Flowerfield property received preliminary approval for an eight-lot subdivision on March 30, 2022, but this is subject to an ongoing Article 78 Proceeding appeal, which the company is vigorously defending[15][16] - For Cortlandt Manor, the Town of Cortlandt Town Board adopted a Medical Oriented Zoning District (MOD) on March 20, 2023, designating a total density of 154,000 square feet (150,000 sq ft medical, 4,000 sq ft retail)[23] - Subdivision approval is anticipated in Q4 2025 for Flowerfield and late 2026 for Cortlandt Manor, with the overall liquidation process expected to extend into 2027[24] - Gyrodyne's 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 (Cortlandt Manor) Counties, New York State[30] 2. Basis of Quarterly Presentations - Interim quarterly financial statements are prepared in conformity with GAAP and SEC rules, with certain information and footnote disclosures condensed or omitted[33][34] - This report should be read in conjunction with the audited consolidated financial statements and footnotes included in the Annual Report on Form 10-K for the year ended December 31, 2024[34] 3. Summary of Significant Accounting Policies - Gyrodyne adopted the liquidation basis of accounting effective September 1, 2015, as dissolution is deemed 'imminent' upon the disposition of all real property assets or if the value of assets falls below $1 million[35] - Under the liquidation basis, all assets are stated at their estimated net realizable value (liquidation value), and all liabilities, including estimated liquidation costs, are stated at their estimated settlement amounts[39] - The company's two remaining real estate properties are Cortlandt Manor (13.8 acres, 31,000 sq ft medical center) and Flowerfield (63 acres, 14-acre multi-tenanted industrial park with 135,000 sq ft)[38] - The process of negotiating purchase agreements, securing final approvals, and consummating the sale of properties is expected to culminate in 2027, though this timeline is subject to factors outside the company's control[41] Estimated Distributions per Common Share | Date | Net Assets in Liquidation | Estimated Distributions per Common Share | | :--- | :------------------------ | :--------------------------------------- | | June 30, 2025 | $32,608,865 | $14.83 | | December 31, 2024 | $30,596,313 | $13.91 | 4. Statements of Net Assets in Liquidation Net Assets in Liquidation and Estimated Distributions | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :---------------- | :----- | | Net assets in liquidation | $32,608,865 | $30,596,313 | +$2,012,552 | | Estimated distributions per share | $14.83 | $13.91 | +$0.92 | - The $2,012,552 increase in estimated liquidating distributions is mainly due to a $4,502,000 increase in real estate value and a $252,000 net increase in revenues from leasing activity[50] - This increase was offset by estimated liquidation and operating costs for a one-year timeline extension (approx. $2,257,000), additional selling and retention bonus costs (approx. $446,000), and additional land development fees ($50,000)[50] - The company estimates incurring approximately $12,710,951 in liquidation and operating costs net of estimated receipts during the remaining liquidation period, including selling costs and retention bonuses aggregating approximately $5.4 million[55] - Approximately $1,274,000 in land entitlement costs are estimated from July 2025 through the end of the liquidation period (currently estimated to conclude in 2027) to position properties for sale with increased development flexibility[53] 6. Loans Payable - The company has two non-revolving credit lines secured by Flowerfield Industrial Park, with outstanding balances of $1,871,475 and $2,561,824 as of June 30, 2025, both at a fixed interest rate of 3.85% and maturing in April and May 2028, respectively[58][59][60] - A $4.95 million 2021 Mortgage Loan secured by Cortlandt Manor property bears interest at 3.75% and has an outstanding balance of $4,609,072 as of June 30, 2025, maturing in September 2026 with a 5-year extension option[61][62][63] - A $1.5 million 2023 Mortgage Loan, secured by other Cortlandt Manor properties, bears a floating interest rate of 1.5% above the Wall Street Prime Rate and matures in two years[64][65] Total Debt Payable Maturity Schedule | Years Ending June 30, | Amount | | :-------------------- | :------------ | | 2026 | $1,811,502 | | 2027 | $5,197,692 | | 2028 | $4,011,006 | | Total | $11,020,200 | 7. Accounts payable and Accrued Liabilities Accounts Payable and Accrued Liabilities | Category | June 30