Gyrodyne(US:GYRO)2024-05-10 14:31Financial Projections and Distributions - Gyrodyne expects a cash balance of approximately $35.39 million by December 31, 2025, equating to future distributions of $16.09 per share based on 2,199,308 common shares outstanding[127]. - Estimated net assets as of March 31, 2024, are $35,386,711, resulting in estimated liquidating distributions of approximately $16.09 per common share based on 2,199,308 shares outstanding[186]. - The cash balance at the end of the liquidation period is estimated to be $7.53 million, with total gross cash proceeds from asset sales projected at approximately $53.78 million[201]. - Estimated distributions per share as of December 31, 2023, were approximately $19.51 based on 1,574,308 shares outstanding[186]. - The Company believes cash and cash equivalents, along with proceeds from asset sales, will exceed liquidation costs[202]. Liquidation Strategy - The company aims to complete the disposition of all real property assets and make timely distributions to shareholders as part of its liquidation strategy[113]. - The Company plans to dissolve after completing the disposition of all real property assets and settling any debts and claims[196]. Real Estate Investments and Development - Gyrodyne's remaining real estate investments include 13.8 acres in Cortlandt Manor with a 31,000 square foot medical center and 63 acres in Flowerfield with a 135,000 rentable square foot industrial park[115]. - The company is managing its real estate portfolio to improve operating cash flow while increasing market values[116]. - Gyrodyne's dual strategy focuses on enhancing property values through entitlement opportunities and improving lease values to maximize returns for shareholders[117]. - The Company is focusing on enhancing the development flexibility of its Flowerfield and Cortlandt Manor properties, with a commitment to minimize risks and maximize value[131]. - The Company has been in discussions with the Town of Smithtown regarding potential real estate development projects that fall within "as of right to build" zoning[141]. Entitlement and Approval Processes - The company anticipates subdivision approval for Flowerfield in the second half of 2024 and for Cortlandt Manor in mid-2025, contingent on various factors[125]. - The Company has received preliminary approval to subdivide the Flowerfield property into eight lots, subject to conditions[120]. - The Company plans to submit final subdivision plans for the Flowerfield property, with final approval expected in the second half of 2024[145]. - The Company anticipates receiving subdivision approval for the Flowerfield property in the second half of 2024, and for the Cortlandt Manor property by mid-2025, contingent on contract timing and site plan approval[177]. - The Company filed a pre-subdivision application for the Flowerfield property, which was approved as an eight-lot subdivision in 2021[142]. Costs and Financial Management - The Company incurred approximately $55,000 in land entitlement costs during Q1 2024, with an estimated additional $1,156,000 expected through December 31, 2025[130]. - The entitlement costs for the three months ended March 31, 2024, associated with the Cortlandt Manor property were approximately $10,600[140]. - The entitlement costs for the three months ended March 31, 2024, for the Flowerfield property were approximately $44,200, covering architectural and engineering costs, legal expenses, and surveys[146]. - The company estimates incurring approximately $1,156,000 in land entitlement costs from April 2024 through the end of the liquidation period[188]. Impact of External Factors - The ongoing Article 78 Proceeding may impact the timeline for property sales, with a potential resolution expected by year-end 2025[122]. - The COVID-19 pandemic has caused delays in local government approvals and may continue to impact occupancy rates and average rates per square foot due to a shift towards remote working and telemedicine[154][156]. - The Article 78 Proceeding related to the Flowerfield subdivision could take an additional six months or more for a decision, impacting the timeline for property sales[174]. - Gyrodyne's ability to meet its stated timeline for asset sales is dependent on factors outside its control, including regulatory approvals and the Article 78 Proceeding[126]. Revenue and Operating Performance - During the three months ended March 31, 2024, the Company executed three lease renewals totaling approximately 1,700 square feet with annual revenue of about $25,000, while four terminations accounted for approximately 5,300 square feet and $46,000 in annual revenue[164]. - The Company reported $778,447 in rent and reimbursements for the three-months ended March 31, 2024[204]. - Operating costs amounted to ($504,358), resulting in a net operating income of $274,089[204]. - The estimated cash flow from rental operations is projected to total $1.97 million, net of commissions and rental costs[193]. Corporate Governance and Compliance - The Company adopted a liquidation basis of accounting effective September 1, 2015, as liquidation is considered imminent due to the planned disposition of all real property assets[167]. - The Company remains subject to extensive regulations in the healthcare industry, which could materially impact tenants' operations and their ability to pay rent[150]. - The Company has a loan payable agreement with a vendor, with a $200,000 payment due and an outstanding balance of $477,829 to be converted to a loan accruing interest at 0.75% per month through 2024[165]. - The Company follows FASB guidance for fair value measurements, utilizing observable and unobservable inputs to determine asset values[182]. - There have been no significant changes in market risk since the last report filed on March 28, 2024[206].