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
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Date of Report (Date of earliest event reported): June 27, 2007
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GYRODYNE COMPANY OF AMERICA, INC.
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(Exact name of Registrant as Specified in its Charter)
New York 000-01684 1-1688021
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(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 Reports on Form 8-K filed with the Securities and Exchange Commission on
July 3, 2007 (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 ten office buildings
in a medical office complex known as Port Jefferson Professional Park in Port
Jefferson Station, New York from Frank M. Pellicane Realty, LLC and Pelican
Realty, LLC, both unrelated third parties, as originally reported in the Form
8-K.
Item 9.01. Financial Statements and Exhibits
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Page
Financial Statements under Rule 3-14 of Regulation S-X
for Port Jefferson Professional Park..........................................
Report of Independent Auditors............................................2
Statements of Revenue and Certain Expenses for the year
ended December 31, 2006, and for the six month period
ended June 30, 2007 (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 June 30, 2007, 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, 2006, and for the six months ended June 30, 2007,
with accompanying notes and adjustments...................................8
Signature....................................................................11
1
Report of Independent Auditors
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To the Board of Directors and Stockholders
Gyrodyne Company of America, Inc.
We have audited the accompanying Statements of Revenue and Certain Expenses of
Port Jefferson Professional Park located in Port Jefferson Station, New York
(the "Property") for the year ended December 31, 2006. 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 Port
Jefferson Professional Park for the year ended December 31, 2006 in conformity
with accounting principles generally accepted in the United States of America.
/s/ HOLTZ RUBENSTEIN REMINICK LLP
Melville, New York
September 10, 2007
2
PORT JEFFERSON PROFESSIONAL PARK
Statement of Revenue and Certain Expenses
For the Year For the Six
Ended Months Ended
December 31, June 30,
2006 2007
(unaudited)
---------- ----------
Revenue $ 997,970 $ 588,736
---------- ----------
Certain Expenses:
Property operating 152,074 99,756
Real estate taxes 155,964 78,103
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Total expenses 308,038 177,859
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Revenue in excess of certain expenses $ 689,932 $ 410,877
========== ==========
The accompanying notes are an integral part of these financial statements
3
PORT JEFFERSON PROFESSIONAL PARK
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 Port Jefferson Professional Park (the "Property")
for the year ended December 31, 2006 and the six months ended June 30, 2007. The
Property was acquired by Gyrodyne Company of America, Inc. (the "Company") from
an unaffiliated third party on June 27, 2007, for approximately $8.9 million.
The Property is a 41,651 square-foot (unaudited) multi-tenant ten building
complex located in Port Jefferson Station, 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, 2006 and for the six months ended June
30, 2007. 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 six months ended June 30, 2007 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, balance sheet as of June 30, 2007 has been prepared and
included in the Form 10-Q dated June 30, 2007 filed by Gyrodyne Company of
America, Inc. (the "Company"). Presented here are the components of the
transaction, acquisition of land and buildings, assumption of existing mortgage
and current leases, which are combined with the Company's accounts as if the
transaction had not occurred.
The following unaudited, pro forma consolidated statement of operations for the
six months ended June 30, 2007, has been prepared to reflect the acquisition of
the Port Jefferson Professional Park as if such transaction had been completed
on January 1, 2007.
The following unaudited, pro forma consolidated condensed statement of
operations for the year ended December 31, 2006, has been prepared to reflect
the acquisition of the Port Jefferson Professional Park as if such transaction
had been completed on January 1, 2006.
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 eight months
ended December 31, 2006 and our unaudited June 30, 2007 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
June 30, 2007
--------------------------------------------------
ASSETS Gyrodyne
------ Company of Port Jefferson
America, Inc. Professional As
(1) Park (2) Reported (3)
-------------- -------------- --------------
REAL ESTATE
Rental property:
Land $ 3,017 $ 2,300,000 $ 2,303,017
Building and improvements 3,386,192 6,614,344 10,000,536
Machinery and equipment 179,335 179,335
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3,568,544 8,914,344 12,482,888
Less accumulated depreciation 2,531,812 2,531,812
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1,036,732 8,914,344 9,951,076
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Land held for development:
Land 558,466 558,466
Land development costs 607,293 607,293
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1,165,759 1,165,759
-------------- -------------- --------------
Total real estate, net 2,202,491 8,914,344 11,116,835
Cash and Cash Equivalents 3,603,826 (514,386) 3,089,440
Investment In Marketable Securities 14,849,336 (2,725,000) 12,124,336
Rent Receivable, net of allowance for
doubtful accounts 58,643 58,643
Interest Receivable 405,936 405,936
Prepaid Expenses And Other Assets 475,251 59,552 534,803
Prepaid Pension Costs 1,101,841 1,101,841
-------------- -------------- --------------
Total Assets $ 22,697,324 $ 5,734,510 $ 28,431,834
============== ============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES:
Accounts payable $ 198,527 $ 15,000 $ 213,527
Accrued liabilities 181,902 91,799 273,701
Tenant security deposits payable 147,735 77,101 224,836
Mortgage payable - 5,544,319 5,544,319
Deferred income taxes 8,135,000 (725,000) 7,410,000
-------------- -------------- --------------
Total Liabilities 8,663,164 5,003,219 13,666,383
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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: 89,100 89,100
Balance of undistributed income other than gain
or loss on sales of properties 5,973,276 731,291 6,704,567
-------------- -------------- --------------
15,571,857 731,291 16,303,148
Less cost of shares of common stock held
in treasury of 241,208 (1,537,697) (1,537,697)
-------------- -------------- --------------
Total Stockholders' Equity 14,034,160 731,291 14,765,451
-------------- -------------- --------------
Total Liabilities and Stockholders' Equity $ 22,697,324 $ 5,734,510 $ 28,431,834
============== ============== ==============
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 June 30, 2007
(unaudited)
1. This column reflects the accounts of the Company as if the transaction had
not occurred on June 27, 2007.
2. This column reflects the completed transaction of the acquisition of the
Port Jefferson Professional Park as described below:
On June 27, 2007, the Company acquired ten buildings in the Port Jefferson
Professional Park in Port Jefferson Station, New York. The buildings were
acquired for an aggregate purchase price of $8,850,000. The buildings,
located at 1-6, 8, 9 and 11 Medical Drive and 5380 Nesconset Highway in
Port Jefferson Station, are situated on 5.16 acres with 41,651 square feet
of rentable space. The purchase price per square foot was $ 212.48 and the
aggregate monthly rent flow from the property is currently $73,032.85. The
property has a 97% occupancy rate. The Company satisfied $5,551,191.38 of
the purchase price by the assumption of the existing mortgage debt on the
property and the remainder in cash after adjustments.
3. This column reflects the balance sheet as of June 30, 2007 as reported by
the Company in its Form 10-Q dated June 30, 2007.
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GYRODYNE COMPANY OF AMERICA, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Year Ended December 31, 2006
---------------------------------------------
Historical (1) Acquisition (2) Pro Forma
------------ ------------ ------------
Revenues
Rental Income $ 1,313,970 $ 997,970 $ 2,311,940
Interest Income 1,594,988 - 1,594,988
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2,908,958 997,970 3,906,928
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Expenses
Rental expenses 734,597 308,038 1,042,635
General and administrative expenses 2,714,668 - 2,714,668
Depreciation 48,401 169,599 218,000
Interest - 323,943 323,943
------------ ------------ ------------
3,497,666 801,580 4,299,246
(Loss) on condemnation of rental property (1,500,000) - (1,500,000)
------------ ------------ ------------
(Loss) Income from Operations Before Benefit
for Income Taxes (2,088,708) 196,390 (1,892,318)
Benefit for Income Taxes (1,747,814) (725,000) (2,472,814)
------------ ------------ ------------
Net (Loss) Income $ (340,894) $ 921,390 $ 580,496
============ ============ ============
Net (Loss) Income Per Common Share:
Basic $ (0.28) $ 0.47
============ ============ ============
Diluted $ (0.28) $ 0.46
============ ============ ============
Weighted Average Number Of Common
Shares Outstanding:
Basic 1,237,201 1,237,201
============ ============ ============
Diluted 1,237,201 1,259,100
============ ============ ============
The accompanying notes are an integral part of this statement
8
GYRODYNE COMPANY OF AMERICA, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Six Months Ended June 30, 2007
---------------------------------------------
Historical (3) Acquisition (4) Pro Forma
------------ ------------ ------------
Revenues
Rental Income $ 590,724 $ 588,736 $ 1,179,460
Interest Income 651,399 - 651,399
------------ ------------ ------------
1,242,123 588,736 1,830,859
------------ ------------ ------------
Expenses
Rental expenses 391,577 177,859 569,436
General and administrative expenses 1,402,942 - 1,402,942
Depreciation 30,904 84,799 115,703
Interest expense - 160,276 160,276
------------ ------------ ------------
1,825,423 422,934 2,248,357
------------ ------------ ------------
(Loss) Income from Operations Before Benefit
for Income Taxes (583,300) 165,802 (417,498)
Benefit for Income Taxes (100,989) (725,000) (825,989)
------------ ------------ ------------
Net (Loss) Income $ (482,311) $ 890,802 $ 408,491
============ ============ ============
Net (Loss) Income Per Common Share:
Basic $ (0.38) $ 0.32
============ ============ ============
Diluted $ (0.38) $ 0.32
============ ============ ============
Weighted Average Number Of Common
Shares Outstanding:
Basic 1,269,689 1,269,689
============ ============ ============
Diluted 1,269,689 1,269,689
============ ============ ============
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, 2006 and the Six Months Ended June 30, 2007
(unaudited)
1. This column represents the results of Gyrodyne Company of America, Inc. for
the year ended December 31, 2006. On May 1, 2006 the Company changed its
fiscal year ending April 30, to a calendar year ending December 31, and
therefore filed a transition report for the eight months ended December 31,
2006 on Form 10-K with the Securities and Exchange Commission. This was in
connection with the Company converting to a Real Estate Investment Trust.
The amounts shown for the twelve months ended December 31, 2006 were
prepared from internal statements and therefore are unaudited.
2. This column represents the historical operations of Port Jefferson
Professional Park as if the Company had owned the property for the entire
twelve month period shown, adjusted for depreciation in the amount of
$169,599, depreciated on a 39 year life, and interest expense in the amount
of $323,943, as if the Company had paid the assumed mortgage for the twelve
months ended December 31, 2006. In addition, the deferred tax credit in the
amount of $725,000 has been shown as part of the acquisition since, as a
REIT, the purchase of the Port Jefferson Professional Park 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. as
if the acquisition did not take place on June 27, 2007. Revenue of $10,239,
expenses of $434 and a deferred tax benefit of $725,000 were reversed to
reflect the Company's results for the six months ended June 30, 2007 as if
the acquisition had not taken place.
4. This column represents the historical operations of Port Jefferson
Professional Park as if the Company had owned the property for the entire
six month period shown adjusted for depreciation in the amount of $84,799,
depreciated on a 39 year life, and interest expense in the amount of
$160,276, as if the Company had paid the assumed mortgage for the six
months ended June 30, 2007. In addition, the deferred tax credit in the
amount of $725,000 has been shown as part of the acquisition since, as a
REIT, the purchase of the Port Jefferson Professional Park 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, thereunto duly authorized.
GYRODYNE COMPANY OF AMERICA, INC.
By: /s/ Stephen V. Maroney
-----------------------------------------------
Stephen V. Maroney
President, Chief Executive Officer and Treasurer
Date: September 12, 2007
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