Gyrodyne(US:GYRO)2023-05-12 14:51Financial Projections and Liquidation - Gyrodyne expects to have a cash balance of approximately $30.31 million by December 31, 2024, prior to any future special distributions, equating to estimated distributions of $20.44 per share based on 1,482,680 common shares outstanding [125]. - The Company estimates net assets in liquidation as of March 31, 2023, at $30,309,439, resulting in estimated distributions of approximately $20.44 per common share based on 1,482,680 shares outstanding [178]. - The Company anticipates the completion of the liquidation process by December 31, 2024, although this timeline may be affected by factors beyond its control [170]. - The cash balance at the end of the liquidation period is estimated to be $3.68 million, with adjustments for various costs and revenues expected until December 31, 2024 [179]. - The estimated cash proceeds from rental operations are projected to total $1.98 million, net of commissions and rental costs [183]. - The Company estimates total gross cash proceeds from the sale of its assets to be approximately $53.67 million, with an estimated distributable cash of approximately $30.31 million from the liquidation [191]. - Major vendors have informally agreed to defer payment on 50% of their fees until the first subdivided lot is sold, aiding cash flow during liquidation [190]. - The Company is considering seeking supplemental funding through a new credit facility or pro-rata rights offering to strengthen its cash position during liquidation [190]. - The Company anticipates that cash and cash equivalents, along with proceeds from asset sales, will exceed the costs to complete the liquidation [192]. - The Company has not experienced any significant credit risk on cash as of March 31, 2023, and maintains bank account balances exceeding FDIC insurance limits [193]. - General and administrative expenses, excluding final liquidation costs, are estimated to be $4.26 million [184]. Real Estate Development and Entitlements - The company aims to complete the disposition of its real estate assets and make timely distributions to shareholders, with a focus on enhancing the net value of its properties [112]. - Gyrodyne's remaining real estate investments include 63 acres in Flowerfield and 13.8 acres in Cortlandt Manor, with the latter designated for 154,000 square feet of total density, including 150,000 square feet for medical use [118][122]. - The company is pursuing entitlement opportunities for its properties to increase development flexibility and maximize value for shareholders [114]. - The Flowerfield property has received preliminary approval for subdivision into eight lots, but is currently subject to an Article 78 proceeding that could delay the process [117][121]. - The Company is pursuing entitlements for Flowerfield and Cortlandt Manor properties to enhance development flexibility, with a focus on minimizing risk [129]. - The Town of Cortlandt adopted a SEQRA Findings Statement on March 20, 2023, establishing a MOD designation for the property, allowing for a total density of 154,000 square feet [135]. - The Company has committed resources toward market research and feasibility studies to maximize the value of the Cortlandt Manor property, which includes a proposed medical office campus [131]. - The Company is exploring potential real estate development projects at Flowerfield that fall within "as of right to build" zoning, while seeking additional entitlements from the Town of Smithtown [137]. - The Company filed a pre-subdivision application for the Flowerfield property, which was initially processed as a nine-lot subdivision but ultimately approved as an eight-lot subdivision in 2021 [138]. - The Company is pursuing entitlements and density approvals for the Flowerfield property, which involves extensive analysis and could materially impact property value [163]. - The Town of Smithtown Planning Board granted preliminary approval to divide the Flowerfield property into eight lots on March 30, 2022 [164]. - The Company is addressing technical comments from various agencies regarding the Final Subdivision Plans, with final approval expected in the second half of 2023 [141]. - The Company believes subdivision approval for Flowerfield will be received in the second half of 2023, and for Cortlandt Manor by mid-2023, contingent on contract timing [169]. Operational Challenges and Market Conditions - Risks include ongoing litigation related to the Article 78 proceeding and market conditions affecting the sale of assets [106][120]. - The COVID-19 pandemic has adversely impacted the timeliness of local government approvals, causing delays in securing entitlements [149]. - The Company is facing increased regulatory scrutiny in the healthcare industry, which could impact the marketability of its properties [145]. - The U.S. Federal Reserve raised interest rates a total of seven times in 2022 and three times in 2023, affecting the economic outlook and potentially leading to a recession [152]. - The Company is actively reviewing operating activities for possible cost reductions throughout the liquidation process [192]. - There have been no significant changes in market risk since the last report filed on March 30, 2023 [196]. Financial Performance and Revenue - The Company incurred approximately $253,000 in land entitlement costs during Q1 2023, with an estimated additional $952,000 expected through December 31, 2024 [128]. - The entitlement costs for the three months ended March 31, 2023, associated with the ownership and development of the Cortlandt Manor property were approximately $45,500 [136]. - The entitlement costs for the three months ended March 31, 2023, were approximately $207,400 [142]. - During the three months ended March 31, 2023, the Company executed 5 renewals comprising approximately 6,700 square feet, generating annual revenue of approximately $96,000 and total commitments of approximately $229,000 [156]. - The Company experienced one termination of a tenant resulting in a loss of $6,260 in monthly rent [156]. - The decrease in net assets from January 1 to March 31, 2023, was $58,060, primarily due to additional general and administrative fees [186]. - As of March 31, 2023, the Company had cash and cash equivalents totaling approximately $3.68 million, which is expected to be adequate for funding the liquidation process [191]. - The Company secured a $4.95 million term loan on September 15, 2021, to pay off previous debt, with $1,050,000 outstanding at that time [194].