UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
--------------------
Date of Report (Date of earliest event reported): June 2, 2008
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GYRODYNE COMPANY OF AMERICA, INC.
(Exact name of Registrant as Specified in its Charter)
New York 000-01684 11-1688021
-------- --------- ----------
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
1 FLOWERFIELD, Suite 24
ST. JAMES, NEW YORK 11780
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(Address of principal executive
offices) (Zip Code)
(631) 584-5400
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Registrant's telephone number,
including area code
N/A
-------------------------
(Former name or former address, if
changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Gyrodyne Company of America, Inc. (the "Company") hereby amends Item 9.01 of its
Current Report on Form 8-K filed with the Securities and Exchange Commission on
June 3, 2008 and amended on such date (together, the "Form 8-K") in order to
file the Financial Statements under Rule 3-14 of Regulation S-X and the Pro
Forma Financial Information under Article 11 of Regulation S-X related to the
acquisition of five office buildings in a medical office complex known as
Cortlandt Manor Medical Center in Cortlandt Manor, New York from Cortlandt
Building Associates, LLC, as originally reported in the Form 8-K.
Item 9.01. Financial Statements and Exhibits
---------------------------------
Page
Financial Statements under Rule 3-14 of Regulation S-X
for Cortlandt Manor Medical Center...........................................
Report of Independent Auditors..........................................2
Statements of Revenue and Certain Expenses for the year
ended December 31, 2007, and for the three month period
ended March 31, 2008 (unaudited), with accompanying notes...............3
Pro Forma Financial Statement Information under Article 11 of
Regulation S-X...............................................................5
Unaudited Pro Forma Consolidated Balance Sheet of Gyrodyne
Company of America, Inc. as of March 31, 2008, with accompanying
notes and adjustments...................................................6
Unaudited Pro Forma Consolidated Statements of Operations of
Gyrodyne Company of America, Inc. for the year ended
December 31, 2007, and for the three months ended March 31,
2008, with accompanying notes and adjustments...........................8
Signature...................................................................11
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Report of Independent Auditors
------------------------------
To the Board of Directors and Stockholders
Gyrodyne Company of America, Inc.
We have audited the accompanying Statements of Revenue and Certain Expenses of
Cortlandt Manor Medical Center located in Cortlandt Manor, New York (the
"Property") for the year ended December 31, 2007. This statement is the
responsibility of the Company's management. Our responsibility is to express an
opinion on this statement based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the statement is
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the statement. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall presentation of the statement.
We believe that our audit provides a reasonable basis for our opinion.
The accompanying statement was prepared for the purpose of complying with the
rules and regulations of the Securities and Exchange Commission (for inclusion
in the Current Report on form 8-K/A of Gyrodyne Company of America, Inc.) as
described in Note 1 and is not intended to be a complete representation of the
Property's revenue and expenses.
In our opinion, the statement referred to above presents fairly, in all material
respects, the revenue and certain expenses described in Note 1 of the Cortlandt
Manor Medical Center for the year ended December 31, 2007 in conformity with
accounting principles generally accepted in the United States of America.
/s/ HOLTZ RUBENSTEIN REMINICK LLP
Melville, New York
July 22, 2008
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CORTLANDT MANOR MEDICAL CENTER
Statements of Revenue and Certain Expenses
For the Three
For the Year Ended Months Ended
December 31, 2007 March 31, 2008
(unaudited)
---------------- ----------------
Revenue $ 1,010,060 $ 250,952
---------------- ----------------
Certain Expenses:
Property operating 197,013 58,848
Real estate taxes 139,919 35,091
---------------- ----------------
Total expenses 336,932 93,939
---------------- ----------------
Revenue in excess of certain expenses $ 673,128 $ 157,013
================ ================
The accompanying notes are an integral part of these financial statements
3
CORTLANDT MANOR MEDICAL CENTER
Notes to Statements of Revenue and Certain Expenses
1. BACKGROUND AND BASIS OF PRESENTATION
The accompanying Statements of Revenue and Certain Expenses (the "Statements")
include the operations of the Cortlandt Manor Medical Center (the "Property")
for the year ended December 31, 2007 and the three months ended March 31, 2008.
The Property was acquired by Gyrodyne Company of America, Inc. (the "Company")
on June 2, 2008, for $7.0 million. The Property is a 29,811 square-foot
(unaudited) multi-tenant five building complex located in Cortlandt Manor, NY.
The accompanying Statements have been prepared on the accrual basis of
accounting. The Statements have been prepared for the purpose of complying with
the rules and regulations of the Securities and Exchange Commission and for
inclusion in the current reports on Form 8-K of the Company as required by the
Securities and Exchange Commission, Regulation S-X, Rule 3-14. The Statements
are not intended to be a complete presentation of the actual operations of the
Property for the year ended December 31, 2007 and for the three months ended
March 31, 2008. Expenses excluded relate to the Property's management fees,
depreciation and amortization expense, interest expense and other costs not
directly related to the future operations of the Property.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Real Estate
Costs related to the acquisition of and improvements to the Property and related
equipment are capitalized. Expenditures related to repairs and maintenance are
expensed as incurred.
Revenue Recognition
Rental revenues are recorded on a straight-line basis over the term of the
leases. Reimbursements from tenants for real estate taxes and other recoverable
operating expenses are recognized as revenue in the period the applicable
expenses are incurred.
Property Operating Expenses
Property operating expenses represent the direct expenses of operating the
Property and include maintenance, utilities, repairs and insurance costs that
are expected to continue in the ongoing operation of the Property.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions of the reported amounts of revenues and certain
expenses during the reporting period. Actual results could differ from those
estimates used in the preparation of the financial statements.
Interim Statements
The statement for the three months ended March 31, 2008 is unaudited and has
been presented for informational purposes; however, in the opinion of the
Company's management, all significant adjustments necessary for a fair
presentation of the Statement for the interim period have been included. The
Company is not aware of any other material factors relating to the Property that
would cause the reported financial information not to be indicative of the
operating results.
4
PRO FORMA FINANCIAL STATEMENTS
The following unaudited, pro forma balance sheet as of March 31, 2008 has been
prepared and included in the Form 10-Q dated March 31, 2008 filed by Gyrodyne
Company of America, Inc. (the "Company"). Presented here are the components of
the transaction, acquisition of land and buildings, assumption of current leases
and entry into a mortgage agreement, which are combined with the Company's
accounts as if the transaction had occurred on March 31, 2008.
The following unaudited, pro forma consolidated condensed statement of
operations for the three months ended March 31, 2008, has been prepared to
reflect the acquisition of the Cortlandt Manor Medical Center as if such
transaction had been completed on January 1, 2008.
The following unaudited, pro forma consolidated condensed statement of
operations for the year ended December 31, 2007, has been prepared to reflect
the acquisition of the Cortlandt Manor Medical Center as if such transaction had
been completed on January 1, 2007.
These unaudited, pro forma consolidated condensed financial statements should be
read in conjunction with the audited financial statements of the Company and the
related management's discussion and analysis of financial condition and results
of operations included in our Annual Report on Form 10-K for the year ended
December 31, 2007 and our unaudited March 31, 2008 Form 10-Q. In the opinion of
management, all material adjustments to reflect the effects of this transaction
have been made.
The pro forma consolidated condensed financial information is unaudited and is
not necessarily indicative of the results that would have occurred if the
transaction had been consummated in the periods presented, or on any particular
date in the future, nor does it purport to represent the financial position,
results of operations or cash flows for future periods. In addition, in
conjunction with these unaudited pro forma consolidated condensed financial
statements, you should read the Statements of Revenue and Certain Expenses of
the acquired property contained elsewhere in this Form 8-K/A.
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GYRODYNE COMPANY OF AMERICA, INC.
PRO FORMA BALANCE SHEET
March 31, 2008
--------------------------------------------------
ASSETS Cortlandt Manor Gyrodyne
------ As Reported Medical Company of
(1) Center (2) America, Inc. (3)
-------------- -------------- --------------
REAL ESTATE
Rental property:
Land $ 2,303,017 $ 600,000 $ 2,903,017
Building and improvements 10,497,195 6,414,362 16,911,557
Machinery and equipment 179,335 179,335
-------------- -------------- --------------
12,979,547 7,014,362 19,993,909
Less accumulated depreciation 2,713,456 2,713,456
-------------- -------------- --------------
10,266,091 7,014,362 17,280,453
-------------- -------------- --------------
Land held for development:
Land 558,466 558,466
Land development costs 815,109 815,109
-------------- -------------- --------------
1,373,575 1,373,575
-------------- -------------- --------------
Total real estate, net 11,639,666 7,014,362 18,654,028
Cash and Cash Equivalents 3,608,541 (1,869,966) 1,738,575
Investment In Marketable Securities 9,930,627 9,930,627
Rent Receivable, net of allowance for doubtful accounts 102,745 102,745
Interest Receivable 59,316 59,316
Prepaid Expenses And Other Assets 410,169 209,480 619,649
Prepaid Pension Costs 1,122,299 1,122,299
-------------- -------------- --------------
Total Assets $ 26,873,363 $ 5,353,876 $ 32,227,239
============== ============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES:
Accounts payable $ 218,036 $ 3,325 $ 221,361
Accrued liabilities 184,409 184,409
Tenant security deposits payable 290,487 113,308 403,795
Mortgage payable 5,481,305 5,250,000 10,731,305
Deferred income taxes 7,832,000 (2,800,000) 5,032,000
-------------- -------------- --------------
Total Liabilities 14,006,237 2,566,633 16,572,870
-------------- -------------- --------------
Commitments And Contingencies
STOCKHOLDERS' EQUITY:
Common stock, $1 par value; authorized 4,000,000
shares; 1,531,086 shares issued 1,531,086 1,531,086
Additional paid-in capital 7,978,395 7,978,395
Accumulated Other Comprehensive Income: 119,490 119,490
Balance of undistributed income other than gain or loss on
sales of properties 4,775,852 2,787,243 7,563,095
-------------- -------------- --------------
14,404,823 2,787,243 17,192,066
Less cost of shares of common stock held in treasury
of 241,208 (1,537,697) (1,537,697)
-------------- -------------- --------------
Total Stockholders' Equity 12,867,126 2,787,243 15,654,369
-------------- -------------- --------------
Total Liabilities and Stockholders' Equity $ 26,873,363 $ 5,353,876 $ 32,227,239
============== ============== ==============
The accompanying notes are an integral part of this statement
6
GYRODYNE COMPANY OF AMERICA, INC.
Notes and Adjustments to Pro Forma Consolidated Balance Sheet
As of March 31, 2008
(unaudited)
1. This column reflects the balance sheet as of March 31, 2008 as reported by
the Company in its Form 10-Q dated March 31, 2008.
2. This column reflects the completed transaction of the acquisition of the
Cortlandt Manor Medical Center as described below:
On June 2, 2008, Gyrodyne Company of America, Inc. (the "Company") acquired
the Cortlandt Manor Medical Center in Cortlandt Manor, New York (the
"Property") from Cortlandt Building Associates, LLC (the "Seller"). The
property consists of five office buildings which are situated on 5.01 acres
with approximately 29,800 square feet of rentable space and a current
occupancy rate of 97%. The purchase price was $7,000,000, or $234.81 per
square foot. The aggregate monthly rent flow from the Property is currently
$85,000. There is no material relationship between the Company and the
Seller. Of the $7,000,000 purchase price for the Property, the Company paid
$500,000 as a refundable deposit upon the signing of the contract to
acquire the Property and received financing in the amount of $5,250,000
from M&T Bank.
3. This column reflects the accounts of the Company as if the transaction had
occurred on March 31, 2008.
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GYRODYNE COMPANY OF AMERICA, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Year Ended December 31, 2007
--------------------------------------------------
Historical (1) Acquisition (2) Pro Forma
-------------- -------------- --------------
Revenues
Rental Income $ 1,879,882 $ 1,010,060 $ 2,889,942
Interest Income 1,038,150 - 1,038,150
-------------- -------------- --------------
2,918,032 1,010,060 3,928,092
-------------- -------------- --------------
Expenses
Rental expenses 896,340 366,128 1,262,468
General and administrative expenses 3,332,332 12,866 3,345,198
Depreciation 150,176 164,471 314,647
Provisions for loss of interest on
condemnation proceeds 332,377 - 332,377
Interest 162,450 242,778 405,228
-------------- -------------- --------------
4,873,675 786,243 5,659,918
Loss Income from Operations Before Benefit for
Income Taxes (1,955,643) 223,817 (1,731,826)
Benefit for Income Taxes (403,989) (2,800,000) (3,203,989)
-------------- -------------- --------------
Net (Loss) Income $ (1,551,654) $ 3,023,817 $ 1,472,163
============== ============== ==============
Net (Loss) Income Per Common Share:
Basic $ (1.21) $ 1.15
============== ============== ==============
Diluted $ (1.21) $ 1.15
============== ============== ==============
Weighted Average Number Of Common
Shares Outstanding:
Basic 1,279,867 1,279,867
============== ============== ==============
Diluted 1,279,867 1,279,867
============== ============== ==============
The accompanying notes are an integral part of this statement
8
GYRODYNE COMPANY OF AMERICA, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Three Months Ended March 31, 2008
--------------------------------------------------
Historical (3) Acquisition (4) Pro Forma
-------------- -------------- --------------
Revenues
Rental Income $ 660,867 $ 250,952 $ 911,819
Interest Income 168,691 - 168,691
-------------- -------------- --------------
829,558 250,952 1,080,510
-------------- -------------- --------------
Expenses
Rental expenses 254,041 100,434 354,475
General and administrative expenses 561,793 3,217 565,010
Depreciation 62,373 41,118 103,491
Interest expense 78,998 61,055 140,053
-------------- -------------- --------------
957,205 205,824 1,163,029
-------------- -------------- --------------
(Loss) Income from Operations Before Benefit for
Income Taxes (127,647) 45,128 (82,519)
Benefit for Income Taxes - (2,800,000) (2,800,000)
-------------- -------------- --------------
Net (Loss) Income $ (127,647) $ 2,845,128 $ 2,717,481
============== ============== ==============
Net (Loss) Income Per Common Share:
Basic $ (0.10) $ 2.11
============== ============== ==============
Diluted $ (0.10) $ 2.11
============== ============== ==============
Weighted Average Number Of Common
Shares Outstanding:
Basic 1,289,878 1,289,878
============== ============== ==============
Diluted 1,289,878 1,289,878
============== ============== ==============
The accompanying notes are an integral part of this statement
9
GYRODYNE COMPANY OF AMERICA, INC.
Notes and Adjustments to Pro Forma Consolidated Statement of Operations for the
Year Ended December 31, 2007 and the Three Months Ended March 31, 2008
(unaudited)
1. This column represents the results of Gyrodyne Company of America, Inc. for
the year ended December 31, 2007 filed on Form 10-K with the Securities and
Exchange Commission.
2. This column represents the historical operations of Cortlandt Manor Medical
Center as if the Company had owned the property for the entire twelve month
period shown, adjusted for depreciation in the amount of $164,471,
depreciated on a 39 year life, and interest expense in the amount of
$242,778, as if the Company had paid the mortgage on the property for the
twelve months ended December 31, 2007. In addition, the deferred tax credit
in the amount of $2,800,000 has been shown as part of the acquisition
since, as a REIT, the purchase of the Cortlandt Manor Medical Center will
eliminate that portion of the deferred tax created from the condemnation of
the Flowerfield property.
3. This column represents the results of Gyrodyne Company of America, Inc. for
the three months ended March 31, 2008 filed on Form 10-Q with the
Securities and Exchange Commission.
4. This column represents the historical operations of Cortlandt Manor Medical
Center as if the Company had owned the property for the entire three month
period shown adjusted for depreciation in the amount of $41,118,
depreciated on a 39 year life, and interest expense in the amount of
$61,055, as if the Company had paid the mortgage on the property for the
three months ended March 31, 2008. In addition, the deferred tax credit in
the amount of $2,800,000 has been shown as part of the acquisition since,
as a REIT, the purchase of the Cortlandt Manor Medical Center will
eliminate that portion of the deferred tax created from the condemnation of
the Flowerfield property.
10
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
GYRODYNE COMPANY OF AMERICA, INC.
By: /s/ Stephen V. Maroney
-----------------------------------
Stephen V. Maroney
President, Chief Executive Officer and Treasurer
Date: July 23, 2008
11