Gyrodyne(US:GYRO)2023-03-30 18:44Financial Projections and Distributions - As of December 31, 2022, Gyrodyne expects a cash balance of approximately $30.37 million by December 31, 2024, which would equate to future distributions of $20.48 per share based on 1,482,680 common shares outstanding[32]. - The estimated distributions to shareholders are based on values as of December 31, 2022, and include some but not all potential value from entitlement efforts[32]. - The company acknowledges that distributions to shareholders may be delayed or reduced due to various uncertainties, including market conditions and legal challenges[121]. - Future special distribution declarations will depend on actual cash flow and proceeds from property sales[208]. Property Development and Entitlements - Gyrodyne's strategy includes pursuing entitlements for Flowerfield and Cortlandt Manor to enhance property values and maximize shareholder returns[23]. - The Flowerfield property subdivision received preliminary approval on March 30, 2022, but is currently subject to an Article 78 Proceeding that could delay final approvals[26][27]. - The Company anticipates that the process of negotiating purchase agreements and securing final approvals will culminate by year-end 2024[31]. - The Company is focusing on positioning properties for sale with all entitlements to achieve increased development flexibility with minimal risk[40]. - The Company is exploring potential real estate development projects in Flowerfield that fall within "as of right to build" zoning[49]. - The Company anticipates that subdivision and site plan approval for the Cortlandt Manor property could be received by mid-2024[47]. - The Company has been in discussions with the Town of Smithtown regarding entitlements and special permits for the Flowerfield property[49]. - The Company intends to enhance property values through entitlement opportunities and strategic sales of properties[207]. Financial Position and Liabilities - The Company incurred approximately $315,500 in land entitlement costs during the year ended December 31, 2022, with an estimated additional $1.2 million in costs expected through December 31, 2024[39]. - The total liability for estimated costs during liquidation is $14,758,728, which includes costs associated with the sale of real estate and litigation[125]. - The Company has an outstanding principal balance of $2,075,005 on a non-revolving credit line as of December 31, 2022, with a fixed interest rate of 3.85%[84]. - The Company has a second loan with an outstanding balance of $2,838,477 as of December 31, 2022, also at a fixed interest rate of 3.85%[85]. - The Company secured a loan for $4.95 million on September 15, 2021, part of which was used to pay off existing working capital loans[70]. - The Company secured a $4.95 million term loan with Signature Bank, bearing an interest rate of 3.75% for five years, with an option to extend for an additional five years[87]. - As of December 31, 2022, the outstanding balance of the Mortgage Loan was $4,846,601[88]. - The Company is considering seeking supplemental funding to strengthen its cash position during the liquidation process[33]. Rental Income and Occupancy - As of December 31, 2022, the annual base rent at Flowerfield is approximately $1,706,000 with an occupancy rate of 83%[60]. - The annual base rent at Cortlandt Manor is approximately $908,000 with an occupancy rate of 92% as of December 31, 2022[61]. - Rental income from the Company's three largest tenants represented approximately 23%, 21%, and 9% of total rental income for the year ended December 31, 2022[97]. - The company's projected annual rental revenues for 2023 from not-for-profit corporations and tenants not affiliated with SBU or SBU Hospital are expected to be approximately $1,020,000, accounting for 39% of total revenues[145]. - The existing leases with Stony Brook University Hospital and affiliates represent approximately 27% of the company's annual rental revenue for 2023[146]. - The largest medical tenant in the Cortlandt Manor Medical Center accounts for 28% of the company's annual rental revenue for 2023[147]. - The total annual rent for all locations is $2,613,700, with an overall occupancy rate of 85%[192]. Risks and Challenges - The company is facing community opposition that could delay the process of obtaining necessary entitlements and approvals for property value enhancement[117]. - The company is defending against an Article 78 proceeding that could extend the timeline for securing entitlements and selling properties[119]. - The company faces risks associated with tenant defaults, which could adversely affect cash flow and distributions to shareholders[143]. - Increased operating costs due to inflation could reduce the estimated net assets and sales prices of properties[156]. - The company may incur costs to comply with environmental laws, which could increase operating expenses[150]. - The ongoing impact of the COVID-19 pandemic may continue to affect the company's operations and timelines for property sales and distributions[152]. - The company's common shares are thinly traded, leading to potential volatility and limited liquidity in the market[158]. - A sustained increase in interest rates could negatively impact property valuations and lower sales proceeds from future dispositions[156]. - The company has a history of operating losses and anticipates future operating losses, with no guarantee of income to distribute other than proceeds from property sales[160]. Company Operations and Compliance - The Company operates in one segment: the ownership and management of industrial and medical office buildings[111]. - The Company believes all properties are in compliance with environmental regulations and is not aware of any contamination requiring material capital expenditure[93]. - The Company carries comprehensive insurance coverage on all properties, including liability, property, and business interruption insurance[95]. - The Company has four employees as of December 31, 2022 and 2021[109]. - The average age of buildings at Flowerfield is approximately 62 years, and 32 years at Cortlandt Manor[189]. - The Company has committed resources to market research and feasibility studies to maximize property value in Cortlandt Manor[42]. - The Company is in compliance with loan covenants as of December 31, 2022[86].