U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549
                                  FORM 10-KSB/A

                                 Amendment No. 1

|X|   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934 for the fiscal year ended. APRIL 30, 2003.

|_|   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934 for the transition period from___________to____________

      Commission file number 0-1684

                        GYRODYNE COMPANY OF AMERICA, INC.
                 (Name of small business issuer in its charter)

           NEW YORK                                      11-1688021
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

     102 FLOWERFIELD, ST. JAMES, NY                        11780
(Address of principal executive offices)                 (Zip Code)

Issuer's telephone number (631) 584-5400

Securities registered under Section 12(b) of the Exchange Act: NONE

Securities registered under Section 12(g) of the Exchange Act: COMMON STOCK
                                                               $1.00 PAR VALUE

                                                   Name of each exchange on
           Title of each class                        which registered
 COMMON STOCK, PAR VALUE $1.00 PER SHARE              NASDAQ SMALL CAP

Check whether the issuer (1) Filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such a shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes |X| No |_|

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB/A or any
amendment to this Form 10-KSB/A. |x|

The issuer's revenues for its most recent fiscal year were: $2,344,396

The aggregate market value of the 966,766 shares of voting stock held by
non-affiliates of the issuer on June 12, 2003 was $17,479,129. The aggregate
market value was computed by reference to the average bid and asked prices of
the common stock, on such date, on the NASDAQ system.

The number of shares outstanding of the issuer's Common $1.00 Par Value stock as
of June 12, 2003 was 1,117,062.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Definitive Proxy Statement to be filed pursuant to Regulation
14A for the FY 2003 Annual Meeting of Shareholders of the Company are
incorporated by reference into Part III hereof.

<PAGE>

                             INDEX TO FORM 10-KSB/A
                                FISCAL YEAR 2003

<TABLE>
<CAPTION>
ITEM #                                                                                                PAGE
------                                                                                                ----
<S>                                                                                                   <C>
PART I
         1 -Business                                                                                   3
         2 -Properties                                                                                 4
         3 -Legal Proceedings                                                                          5
         4 -Submission of Matters to a Vote of Security Holders                                        5

PART II
         5 -Market for Registrant's Common Stock and Related Stockholders' Matters                     5
         6 -Management's Discussion and Analysis of Financial Condition and Results of Operations      6
         7 -Financial Statements and Supplementary Data                                               11
         8 -Changes in and Disagreements on Accounting and Financial Data                             11

PART III
         9 -Directors and Executive Officers of Registrant                                            12
        10 -Compensation of Executive Officers and Directors                                          14
        11 -Security Ownership of Certain Beneficial Owners and Management                            15
        12 -Certain Relationships and Transactions                                                    16
        13 -Exhibits and Reports on Form 8K                                                           17
        14 -Controls and Procedures                                                                   17
             Signatures                                                                               18
             Exhibit 31.1 Certification
             Exhibit 32.1 Certification
</TABLE>


                                       2
<PAGE>

                                Explanatory Note

This Amendment No. 1 on Form 10-KSB/A amends Item 1 of Part I and Items 6, and 7
of Part II of our Annual Report on Form 10-KSB previously filed for the fiscal
year ended April 30, 2003. This Form 10-KSB/A is filed in connection with our
restated financial statements for the fiscal years ended April 30, 2003 and 2002
to correct the accounting of our limited partnership investment in the Callery
Judge Grove, L.P. For further discussion of this restatement, see Note 17, Prior
Period Adjustment, to our consolidated financial statements.

Financial statement information and related disclosures included in this Form
10-KSB/A reflect, where appropriate, changes as a result of the restated
financial statements. Certifications from our Chief Executive Officer and Chief
Financial Officer required by Sections 302 and 906 of the Sarbanes-Oxley Act of
2002 are attached to this Form 10-KSB/A. All other information contained in this
Form 10-KSB/A is as of the date of the original filing and does not reflect any
subsequent information or events other than the aforementioned changes.

We are filing an Amendment No. 1 to our quarterly reports on Form 10-QSB for
each of the first and second quarters of Fiscal 2004 concurrently with the
filing of this Form 10-KSB/A. We have not amended and do not intend to amend our
previously filed annual reports on Form 10-KSB or our quarterly reports on Form
10-QSB for the periods affected by the restated financial statements for periods
ending on or prior to April 30, 2003. For this reason, the consolidated
financial statements, auditors' reports and related financial information
contained in such reports for the affected periods should no longer be relied
upon.

                                     PART I

Item 1 Description of Business

(a) Business Development

Incorporated in New York in 1946, Gyrodyne Company of America, Inc. (the
"Company") was, from its inception and for the next 25 years, engaged in design,
testing, development, and production of coaxial helicopters primarily for the US
Navy. Following a sharp reduction in the Company's helicopter manufacturing
business and its elimination by 1975, the Company began converting its vacant
manufacturing facilities and established its rental property operation.

The Company concentrates its efforts on the development of its real estate
holdings in St. James and Stony Brook, New York. The converted buildings consist
of approximately 184,000 rentable square feet housing 66 tenants in space
suitable for office, engineering, manufacturing, and warehouse use. This rental
property operation is the principal business of the Company and currently
represents its sole source of revenue. The property, which is known as
Flowerfield, consists of 314 acres. Approximately 30 acres are utilized for the
rental property and the balance of 284 remain undeveloped. Flowerfield is
currently the subject of a development plan to construct an upscale residential
golf course community consisting of 336 home sites.

Neither the Company nor any of its subsidiaries have ever been in any
bankruptcy, receivership or similar proceeding.

References to the Company contained herein include its wholly owned
subsidiaries, except where the context otherwise requires.

(b) Business of Issuer

The Company manages its real estate operation and is a passive investor as a
limited partner in the Callery Judge Grove, L.P. which owns a large citrus grove
in Palm Beach County, Florida. The Company currently has a total of 10 full time
employees involved in support of the real estate operation and development
plans.

Real Estate

Gyrodyne owns a 314 acre site, primarily zoned for light industry, and is
located approximately 50 miles east of New York City on the north shore of Long
Island. Flowerfield's location also places it in hydrological zone VIII, one of
the most liberal with respect to effluent discharge rates.


                                       3
<PAGE>

The Flowerfield property is bisected by the town lines of Smithtown and
Brookhaven Townships. The existing buildings and approximately 132 acres are
located in the hamlet of St. James, Township of Smithtown, and the contiguous
balance of approximately 182 acres is located in the hamlet of Stony Brook,
Township of Brookhaven. The vacant property in St. James and Stony Brook is one
of the largest undeveloped industrially zoned parcels on Long Island. During the
latter part of fiscal 2002, the Company entered into a contract of sale in the
amount of $5,370,000 for 12 acres and buildings related to an existing tenants
catering facility. That transaction was completed in August, 2002 and the total
acres referred to above reflect that sale.

There are five main building groups with rental unit sizes ranging from 300 to
25,000 square feet. Given the location and size of rental units, the Flowerfield
Industrial Park attracts many smaller companies that are not dependent on
extensive material or product handling. The Port Jefferson Branch of the Long
Island Railroad runs through the property.

Environmental studies have been updated and numerous other studies including
archeological, ecological, and traffic have been conducted in connection with
development plans -- all with no significant adverse findings. The Company
believes that it does not incur material costs in connection with compliance
with environmental laws. During fiscal year 2003, the Company had no expenses
related to environmental issues.

During the past two years, several evaluations of highest and best use for the
property have resulted in the adoption of the plan to develop an upscale
residential golf course community at Flowerfield.

In that regard, Gyrodyne executed agreements with Landmark National to design
and develop an 18 hole championship golf course community at Flowerfield. The
contractual arrangements with Landmark were included as exhibits to the
Company's 2002 10-KSB annual report. Having completed the design phase for both
the golf course and the residential components of the development plan, the
Company filed its applications for a change of zone to achieve the appropriate
entitlements. Those applications were filed in the Towns of Brookhaven and
Smithtown in October, 2002 and June 2003, respectively.

Limited Partnership Investment in Callery-Judge Grove, L.P. (the "Grove")

The Company's initial participation through its wholly owned subsidiary,
Flowerfield Properties, Inc., represented a 20% limited partner's interest in
the Grove. Based on three subsequent capital infusions in which the Company did
not participate, our share is now approximately 10.93%. Although Management has
determined that development of the real estate owned by the Grove is in the best
interests of the Grove and its partners, the requirement to invest in achieving
shareholder value from the Flowerfield property has outweighed this alternative
investment opportunity.

The original limited partner investment of $1.1 million, which was made in 1965,
has over the years yielded distributions of approximately $5.5 million. Due to
recurring losses of the Grove, the investment is carried on the books of the
Company at $0 as a result of recording the Company's pro-rata share of losses
under the equity method of accounting. In fiscal 2000, when the Company's share
of losses equaled the carrying value of the investment, the equity method of
accounting was suspended, and no additional losses have been charged to
operations.

Item 2 Description of Property

(c) Description of Real Estate and Operating Data

The Company owns a 314 acre tract of land located on the north shore of Suffolk
County, Long Island, New York. The Company currently has approximately 184,000
square feet of rental space and has 66 tenants.

The land is carried on the Company's balance sheet at cost in the amount of
$796,451 while the buildings and improvements are carried at a depreciated cost
of $726,742. At the current time, the property and buildings, except for
Building #7 and the surrounding 6 1/2 acres, which, at statement date, were
encumbered by a 10 year collateral mortgage in the amount of $1,050,000, are
entirely without financial encumbrances. The principal balance of the mortgage
as of April 30, 2003 was $628,450. Subsequent to the close of business on April
30, 2003, the Company restructured its debt by securing a revolving line of
credit in the amount of $ 1,750,000. The existing mortgage, as described above,
was satisfied and the outstanding balance of $622,868 was incorporated into the
newly established credit facility. Collateral for the credit line consists of
the same 6 1/2 acres and building #7.

The average age of all the buildings is approximately 43 years and the
facilities continually undergo maintenance repair cycles for roofs, paved areas,
and building exteriors. The general condition of internal infrastructure, HVAC,
electrical, and plumbing is considered above average for facilities of this age.
The grounds feature extensive landscaping, are neatly groomed, and well
maintained.


                                       4
<PAGE>

The Company currently maintains a $10 million dollar liability umbrella policy
and has insured certain buildings and rent receipts predicated on an analysis of
risk, exposure, and loss history. It is Management's opinion that the premises
are adequately insured.

The following table sets forth certain information as of April 30, 2003 for the
total Company property.

                                                           Annual
                                                            Base
                     Rentable                Annual         Rent        Number
                      Square      Percent     Base       Per Leased       Of
    Property           Feet        Leased     Rent        SQ. FT.       Tenants
    --------           ----        ------     ----        -------       -------
 St. James, N.Y.     184,000        83%    $2,111,479      $11.48         66

Item 3 Legal Proceedings

In the normal course of business, the Company is a party to various legal
proceedings. After reviewing all actions and proceedings pending against or
involving the Company, Management considers that the aggregate loss, if any,
will not be material.

Item 4 Submission of Matters to a Vote of Security Holders

No matters were submitted to the vote of security holders during the fourth
quarter of Fiscal Year 2003.

                                     PART II

Item 5 Market for Common Equity and Related Stockholder Matters

(a) Market information

The Company's Common Stock, $1 Par Value (symbol: "GYRO") is traded in the
NASDAQ Small-Cap Market. Since June 10, 1948, the NASDAQ Small-Cap Market has
been the principal market in which the Company's stock is publicly traded. Set
forth below are the high and low sales prices for the Company's stock for each
full quarter within the two most recent fiscal years:

             ---------------------------------------------------------
                                           Sales Price     Sales Price
                         Quarter Ended         Low             High
                         -------------
             ---------------------------------------------------------
                          Fiscal 2002
             ---------------------------------------------------------
             July 31, 2001                    $14.89           $19.50
             ---------------------------------------------------------
             October 31, 2001                 $14.88           $19.00
             ---------------------------------------------------------
             January 31, 2002                 $13.91           $18.40
             ---------------------------------------------------------
             April 30, 2002                   $15.91           $19.00
             ---------------------------------------------------------
                          Fiscal 2003
             ---------------------------------------------------------
             July 31, 2002                    $14.95           $18.25
             ---------------------------------------------------------
             October 31, 2002                 $13.95           $16.99
             ---------------------------------------------------------
             January 31, 2003                 $12.56           $17.37
             ---------------------------------------------------------
             April 30, 2003                   $15.26           $17.55
             ---------------------------------------------------------

(b) Approximate Number of Equity Security Holders, including shares held in
Street name by brokers.

                                               Number of Holders
   Title of Class                             as of June 12, 2003
   --------------------------------------------------------------
   Common Stock, $1.00 Par Value                     1,076


                                       5
<PAGE>

(c) A 10% stock dividend was declared on April 15, 2002 to shareholders of
record on May 1, 2002 which was distributed on May 15, 2002. The new shares
issued totaled 100,646 and there were 495.220 fractional shares paid in cash.
There were no stock dividends declared in the fiscal year ended April 30, 2003.

(d) Equity Compensation Plan Information

--------------------------------------------------------------------------------

                                                              Number of
                                                              Securities
                                                              Remaining
                   Number of                                  Available for
                   Securities to be                           Future Issuance
                   Issued upon                                Under Equity
                   Exercise of                                Compensation
                   Outstanding        Weighted-average        Plans (excluding
                   Options,           exercise price of       Securities
     Plan          Warrants and       outstanding options     Reflected in
     Category      Rights             warrants and rights     Column (a))
                        (a)                   (b)                  (c)
--------------------------------------------------------------------------------

Equity
Compensation
Plans approved
By security
Holders               170,615                $18.30              154,354
--------------------------------------------------------------------------------
Equity
Compensation
Plans not
Approved by
Security holders           --                    --                   --
--------------------------------------------------------------------------------
Total                 170,615                $18.30              154,354
--------------------------------------------------------------------------------

See footnote 6 to the financial statements for a description of the Company's
stock option plans.

Item 6 Management's Discussion and Analysis of Financial Condition and Results
of Operations

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

The statements made in this Form 10-KSB/A that are not historical facts contain
"forward-looking information" within the meaning of the Private Securities
Litigation Reform Act of 1995, and Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, both as amended, which can
be identified by the use of forward-looking terminology such as "may," "will,"
"anticipates," "expects," "projects," "estimates," "believes," "seeks," "could,"
"should," or "continue," the negative thereof, other variations or comparable
terminology. Important factors, including certain risks and uncertainties with
respect to such forward-looking statements that could cause actual results to
differ materially from those reflected in such forward-looking statements
include, but are not limited to the effect of economic and business conditions,
including risk inherent in the Long Island, New York real estate market, the
ability to obtain additional capital and other risks detailed from time to time
in our SEC reports. We assume no obligation to update the information in this
Form 10-KSB/A.

Critical Accounting Policies

The consolidated financial statements of the Company include accounts of the
Company and all majority-owned and controlled subsidiaries. The preparation of
financial statements in conformity with accounting principles generally accepted
in the United States ("GAAP") requires management to make estimates and
assumptions in certain circumstances that affect amounts reported in the
Company's consolidated financial statements and related notes. In preparing
these financial statements, management has utilized


                                       6
<PAGE>

information available including its past history, industry standards and the
current economic environment, among other factors, in forming its estimates and
judgments of certain amounts included in the consolidated financial statements,
giving due consideration to materiality. It is possible that the ultimate
outcome as anticipated by management in formulating its estimates inherent in
these financial statements might not materialize. However, application of the
critical accounting policies below involves the exercise of judgment and use of
assumptions as to future uncertainties and, as a result, actual results could
differ from these estimates. In addition, other companies may utilize different
estimates, which may impact comparability of the Company's results of operations
to those of companies in similar businesses.

Revenue Recognition

Rental revenue is recognized on a straight-line basis, which averages minimum
rents over the terms of the leases. The excess of rents recognized over amounts
contractually due, if any, are included in deferred rents receivable on the
Company's balance sheets. Certain leases also provide for tenant reimbursements
of common area maintenance and other operating expenses and real estate taxes.
Ancillary and other property related income is recognized in the period earned.

Real Estate

Rental real estate assets, including land, buildings and improvements,
furniture, fixtures and equipment are recorded at cost. Tenant improvements,
which are included in buildings and improvements, are also stated at cost.
Expenditures for ordinary maintenance and repairs are expensed to operations as
they are incurred. Renovations and/or replacements, which improve or extend the
life of the asset are capitalized and depreciated over their estimated useful
lives.

Depreciation is computed utilizing the straight-line method over the estimated
useful lives of ten to thirty years for buildings and improvements and three to
twenty years for machinery and equipment.

The Company is required to make subjective assessments as to the useful lives of
its properties for purposes of determining the amount of depreciation to reflect
on an annual basis with respect to those properties. These assessments have a
direct impact on the Company's net income. Should the Company lengthen the
expected useful life of a particular asset, it would be depreciated over more
years, and result in less depreciation expense and higher annual net income.

Real estate held for development is stated at the lower of cost or net
realizable value. In addition to land, land development and construction costs,
real estate held for development includes interest, real estate taxes and
related development and construction overhead costs which are capitalized during
the development and construction period.

Net realizable value represents estimates, based on management's present plans
and intentions, of sale price less development and disposition cost, assuming
that disposition occurs in the normal course of business.

Long Lived Assets

On a periodic basis, management assesses whether there are any indicators that
the value of the real estate properties may be impaired. A property's value is
impaired only if management's estimate of the aggregate future cash flows
(undiscounted and without interest charges) to be generated by the property are
less than the carrying value of the property. Such cash flows consider factors
such as expected future operating income, trends and prospects, as well as the
effects of demand, competition and other factors. To the extent impairment
occurs, the loss will be measured as the excess of the carrying amount of the
property over the fair value of the property.

The Company is required to make subjective assessments as to whether there are
impairments in the value of its real estate properties and other investments.
These assessments have a direct impact on the Company's net income, since an
impairment charge results in an immediate negative adjustment to net income. In
determining impairment, if any, the Company has adopted Financial Accounting
Standards Board ("FASB") Statement No. 144, "Accounting for the Impairment or
Disposal of Long Lived Assets".

Stock-Based Compensation

The Company applies the intrinsic value-based method of accounting prescribed by
Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued
to Employees, and related interpretations, to account for stock-based employee
compensation plans and reports pro forma disclosures in its Form 10-KSB filings
by estimating the fair value of options issued and the related expense in
accordance with SFAS No. 123. Under this method, compensation cost is recognized
for awards of shares of common stock or stock options to directors, officers and
employees of the Company only if the quoted market price of the stock at the
grant date (or other measurement date, if later) is greater than the amount the
grantee must pay to acquire the stock.


                                       7
<PAGE>

             RESULTS OF OPERATIONS FOR THE YEAR ENDED APRIL 30, 2003
                  AS COMPARED TO THE YEAR ENDED APRIL 30, 2002

The Company is reporting net income of $1,769,668 for fiscal year ending April
30, 2003 compared to the prior year results of $21,645. Diluted per share
earnings amounted to $1.58 and $0.02 for the two periods, respectively. The
increase in net income of $1,748,023 is due primarily from the sale of 12 acres
and certain buildings to an existing tenant at Flowerfield for $5.4 million.
Proceeds from that transaction improved this year's earnings by $1,742,614 after
tax. Pursuant to the contract of sale, the Company is holding a five percent
interest only mortgage in the amount of $1.8 million, which matures in August
2005.

Revenue from rental property amounted to $2,344,396 for the current year
representing a decrease of $263,609 from the prior year total of $2,608,005.
This 10% decline is directly attributable to the loss of rental income brought
about by the aforementioned sale, which accounted for $242,240 of the decrease.
Since the sale of this property only impacted earnings for the final nine months
of fiscal 2003, future rental revenues will decline by approximately $334,000 on
an annualized basis.

Rental property expenses for the period amounted to $905,264 and reflect a 24%
reduction of $285,693 to the prior year total of $1,190,957. Several factors
account for this decline. Due to the fact that we formally filed for a change of
zone to accommodate a residential golf course community, $143,244 in real estate
taxes on the undeveloped portion of Flowerfield were capitalized pursuant to
generally accepted accounting practice. As a result, the operating expense for
real estate taxes amounted to $295,198 and $428,031 during 2003 and 2002,
respectively. Since capitalization of these taxes occurred for only the last six
months of fiscal 2003, and based on the current level of taxes, the future
impact on annualized operating expenses will be a reduction of approximately
$277,000. A reduction in staffing levels contributed to a decrease in salaries
and benefits totaling $81,234, representing a 25 % savings in that category of
expense; salaries and benefits amounted to $250,141 and $331,375 for fiscal year
2003 and 2002, respectively. We anticipate being able to maintain the current
staffing level for the future. As reported in our July 31, 2002 quarterly
filing, the remaining major factor to the reduction in rental property expense
was a negotiated, non-recurring utility refund totaling $64,968.

As a result of the foregoing, income from rental property kept pace with the
prior year, amounting to $1,439,132 compared to the 2002 result of $1,417,048, a
$22,084 increase. As outlined above, the loss of future rental revenue brought
about by the sale of certain properties should be more than offset by the
capitalization of real estate taxes attributable to land under development and
the reduced staffing levels accomplished this past year.

General and administrative expenses reflect a nominal 4% increase over the prior
year amounting to $1,477,748 compared to $1,424,520 in 2002. Despite the fact
that the increase amounted to $53,228, there were several significant variances
during the year. Salaries and benefits increased by $90,307 and totaled $656,514
as compared to $566,207 for the prior year. For the most part, increases in
salaries of $27,508 and $54,331 in stock compensation were the contributing
factors. Fees for outside services, including legal and consulting were reduced
by $193,800 from $296,391 to $102,591 for 2002 and 2003, respectively. During
the prior year, Gyrodyne experienced considerable expense relating to the K
Capital attempt to force the sale of the Company and other legal expenses
incurred during our search for the highest and best use of the Flowerfield
property. These two issues amounted to $115,904 and $101,620, respectively, in
fiscal 2002 and account for the major portion of the comparative decrease in
2003. Corporate governance expenses also decreased by $78,053 from $325,034
during the prior year compared to $246,981 for fiscal 2003. Again, costs
involved with the K Capital issue were a major factor in conducting the
Company's annual meeting and related proxy issues. By comparison, 2002 annual
meeting expenses exceeded those of 2003 by $104,198. The balance of the
corporate governance variance between the two periods was the result of reduced
expenses of $17,005 for Directors fees, which amounted to $88,318, and $105,323
for 2003 and 2002, respectively. The final and most significant variance was an
increase of $224,972 in the 2003 pension expense which totaled $259,880 compared
to $34,908 during the prior year. This expense is the result of the formula
required by FASB 87, which governs the accounting treatment for defined benefit
pension plans. Additionally, during fiscal 2003, the Company made a cash
contribution of $254,000 to bolster the pension plan's liquidity. We anticipate
that pension expense and cash contributions will remain at similar levels in
future years. A number of immaterial variances in several other expense
categories accounted for approximately $10,000 in additional increased expenses.

Net of general and administrative expenses, the Company experienced a loss from
operations of $38,616 and $7,472 for 2003 and 2002, respectively.

Interest income totaled $87,121 during fiscal 2003 which is $38,150 above the
2002 total of $48,971. The major contributing factor was $65,500 in interest
earned on the $1.8 million mortgage resulting from the sale of property
mentioned earlier in this report. This was partially offset by a reduction of
$27,350 in income from our interest bearing deposits and is the direct result of
a 1.2% weighted average decrease in interest rates between the two periods.


                                       8
<PAGE>

For 2003, the recorded gain on the sale of the 12-acre parcel and buildings
related to a former tenant's catering facility amounted to $3,124,307. The
balance of the deferred gain of $1.6 million on the $5.4 million sale will be
recognized upon the receipt of the proceeds of the three-year mortgage. The land
and buildings subject to this sale had a carrying value of $558,763 on the
Company's balance sheet.

As a result, income before tax amounted to $3,172,812 for fiscal 2003 compared
to a $20,180 result for the prior year. Absent the income derived from the cited
sale, earnings for both periods would have been comparable.

                         LIQUIDITY AND CAPITAL RESOURCES

Net cash used in operating activities was $1,339,266 in fiscal 2003 and $244,666
in fiscal 2002. The principal use of cash in both periods were funds used in
connection with planning and pre-construction costs associated with land
development plans for the golf course community.

Net cash provided by investing activities was $2,477,109 and $908,219 in fiscal
2003 and 2002, respectively. The cash proceeds in both periods were primarily a
result of the sale of the 12-acre parcel for $5.4 million, which was completed,
in fiscal 2003. In fiscal 2002, we received a $1,000,000 deposit toward the
sale. In fiscal 2003, we received additional cash proceeds of approximately $2.5
million. The remaining sales price was satisfied with a three year, $1.8
million, 5% mortgage. The entire principal balance from the mortgage receivable
matures in August 2005.

Net cash used in financing activities was $12,316 and $2,246,601 in fiscal 2003
and 2002, respectively. The net use of cash in fiscal 2003 was a result of the
repayment of long-term debt of $30,574, net of proceeds from the exercise of
stock options of $18,258. The net cash used in fiscal 2002 was primarily a
result of the repurchase of 111,000 shares of the Company's common stock from K
Capital.

As of April 30, 2003, the Company had cash and cash equivalents of $2,231,317
and anticipates having the capacity to fund normal operating and administrative
expenses, its regular debt service requirements and the remaining predevelopment
expenses related to securing entitlements for the planned residential golf
course community. To date, expenses associated with the development of the
Flowerfield property, which have been capitalized, total $2,444,654. As of April
30, 2003, the portion of those expenses attributable to the residential golf
course community amount to $1,015,094. Working capital, which is the total of
current assets less current liabilities as shown in the accompanying chart,
amounted to $1,990,507 at April 30, 2003.

                                                              April 30,
                                                     --------------------------
                                                        2003            2002
                                                     ----------     -----------

Current assets:
   Cash and cash equivalents                         $2,231,317     $ 1,105,790
   Rent receivable, net                                  71,437          30,079
   Net prepaid expenses and other assets                193,369          70,225
                                                     ----------     -----------
      Total current assets                            2,496,123       1,206,094
                                                     ----------     -----------

Current liabilities:
   Accounts payable and accrued expenses                249,624         409,356
   Deposit on contract of sale                               --       1,000,000
   Tenant security deposits payable                     238,204         253,878
   Current portion of loans payable                      17,788          63,820
                                                     ----------     -----------
      Total current liabilities                         505,616       1,727,054
                                                     ----------     -----------

Working capital                                      $1,990,507     $  (520,960)
                                                     ==========     ===========

Subsequent to the close of business on April 30, 2003, the Company restructured
its only outstanding mortgage debt on the Flowerfield property. That amortizing
loan, which had a balance of $622,868 at an average interest rate of 8.04%
during fiscal '03, was satisfied and incorporated into a newly established
revolving credit line in the amount of $1,750,000 at prime plus one percent,
currently 5.00 %. The unused portion of the credit-line will enhance our
financial position and liquidity and be available, if needed, to fund any
unforeseen expenses associated with the Company's development plan.


                                       9
<PAGE>

The following table presents the Company's expected cash requirements for
contractual obligations outstanding as of April 30, 2003.

<TABLE>
<CAPTION>
                                                      Payments Due By Period
                                                   Less                             More
Contractual Obligation                             than 1      1-3        3-5      than 5
                                        Total       Year      Years      Years      Years
<S>                                   <C>         <C>         <C>       <C>             <C>
Long-term Debt                        $669,610     17,788     17,221    634,601         --
Operating Lease                         52,500     52,500         --         --         --
Other Contractual Obligations          255,000    180,000     75,000         --         --
                                      --------   --------   --------   --------   --------
Total Contractual Obligations         $977,110    250,288     92,221    634,601         --
                                      ========   ========   ========   ========   ========
</TABLE>

Our limited partnership investment in the Callery Judge Grove, L.P. is carried
on the Company's balance sheet at $0 as a result of recording equity losses
equal to the carrying value of the investment. This represents a 10.93%
ownership in a 3,500-acre citrus grove in Palm Beach County, Florida. The
estimated fair value of this investment based upon a third party appraisal
report is $6,442,000.

The land is currently part of a 65,000-acre master planned community, which is
under review by local regulatory authorities. We have no current forecast as to
the likelihood of, or the timing required to achieve appropriate entitlements
that might impact the Grove's value.

Following the Company's April 12, 2002 purchase and redemption of 111,000 shares
of Gyrodyne stock from K Capital, the Board of Directors announced a 10% stock
dividend to shareholders of record as of May 1, 2002. A distribution of 100,646
shares to the record date shareholders was affected on May 15, 2002.

Last year's annual report included a description of our contractual agreements
with Landmark National to design and develop an 18 hole championship golf course
community with 336 home sites on the Company's 314 acre Flowerfield property
located in Stony Brook/St. James, New York. Those contractual agreements were
exhibited in our April 30, 2002 10-KSB filing. The Company is party to two
separate development contracts with Landmark National, one for the design of the
golf course itself and the other for land planning and design of the residential
community. The golf course agreement calls for monthly payments of $5,000 with a
maximum total of $150,000 and a one-time fee of $100,000 for a grading report on
the course layout, which was completed during fiscal 2003. The residential land
planning and design contract includes monthly payments of $10,000 with a maximum
payment totaling $ 300,000. Landmark is also entitled to a construction
management fee of 4.5% of construction costs. Through April 30, 2003, the
Company has paid $180,000 to Landmark under these contractual obligations. The
balance of Landmark's compensation is incentive driven and based on a 10%
participation in future profits from the residential golf course development.
Additionally, in a separate agreement for the future, Landmark is under contract
to manage the completed golf and clubhouse facilities under a long-term
management agreement. The annual fee for such service is $ 100,000. The
contracts also provide for termination and builders fees, which are more clearly
defined in Note 11 to the financial statements. The design stage and various
required exhibits including an archaeological report along with economic and
traffic impact studies have been completed and applications have been filed with
the Towns of Brookhaven and Smithtown seeking the appropriate change of zone to
accommodate the development plan.

In December 2002, the Stony Brook University approached the Company with an
interest in discussing the purchase of all 314 acres that comprise the
Flowerfield property. Those discussions were eventually discontinued when we
recognized that their valuations of the property did not coincide with both our
own and those of our independent outside consultants. In April, 2003, having
failed in their attempts to purchase the Flowerfield property at what was
clearly viewed as a below market price, the University announced that the Board
of Trustees of the State University of New York had adopted a resolution which
empowered the Stony Brook University to commence eminent domain proceedings to
acquire the Gyrodyne property. At this writing, there has been no other action
announced. We have attempted to create an awareness of the property's true value
by offering to share certain outside evaluations with the University but they
have indicated no interest in such an exercise. We believe that armed with the
knowledge of the property's value, Stony Brook University and/or the State of
New York will either abandon their interest in our property or come to the
realization that their appetite for Flowerfield must be accompanied by the
appropriate funding required to purchase or condemn it at its highest and best
use, which is an established procedural guideline in eminent domain findings.
Based on the past several years, the valuations of independent outside
consultants, and expressions of interest from qualified builders to purchase
home sites at Flowerfield, we remain confident that our plan for a residential
golf course community represents that highest and best use.


                                       10
<PAGE>

Item 7 Financial Statements and Supplementary Data

See Financial Statements and Financial Statement Contents commencing on the
Contents page followed by Page F-1.

Financial Statements include:

            (1)   Independent Auditors' Reports

            (2)   Consolidated Balance Sheets as of April 30, 2003 and April 30,
                  2002

            (3)   Consolidated Statements of Income for the years ended April
                  30, 2003 and April 30, 2002

            (4)   Consolidated Statement of Stockholders' Equity for the years
                  ended April 30, 2003 and April 30, 2002

            (5)   Consolidated Statements of Cash Flows for the years ended
                  April 30, 2003 and April 30, 2002

            (6)   Notes to Consolidated Financial Statements

            (7)   Schedules

                  (a)   The information required by the following schedules has
                        been included in the financial statements, is not
                        applicable, or not required.

                        Schedule I, II, III, IV, V, VI, VII, VIII, IX, X, XI,
                        XII and XIII.

Item 8 Changes in and Disagreements on Accounting and Financial Data

In connection with the audits for the three most recent years, there have been
no disagreements with Holtz Rubenstein & Co., LLP, on any matter of accounting
principles or practices, financial statement disclosures, or auditing scope or
procedure.


                                       11
<PAGE>

                                    PART III

Item 9 Directors, Executive Officers, Promoters and Control Persons; Compliance
With Section 16(a) of the Exchange Act.

(a) The following table lists the names, ages and positions of all executive
officers and directors and all persons nominated or chosen to become such. Each
director has been elected to the term indicated. Directors whose term of office
ends in 2003 shall serve until the next Annual Meeting of Stockholders or until
their successors are elected and qualified.

<TABLE>
<CAPTION>
                        Name & Principal Occupation or Employment                 Age      First Became a   Current Board
                                                                                              Director      Term Expires
--------------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>          <C>             <C>
Stephen V. Maroney                                                                 61           1996            2004
President, CEO, Treasurer, and Director of the Company

Peter Pitsiokos                                                                    43           ---
Executive Vice President, Secretary & General Counsel of the Company

Frank D'Alessandro                                                                 57           ---
Controller of the Company

Paul L. Lamb                                                                       57           1997            2003
Partner of Lamb & Barnosky, LLP
Chairman of the Board of Directors of the Company

Robert H. Beyer                                                                    70           1977            2005
Consultant
Director of the Company

Philip F. Palmedo                                                                  69           1996            2004
Chairman of International Resources Group
Director of the Company

Robert F. Friemann                                                                 56           1998            2005
CPA and a Retired Partner of Albrecht, Viggiano, Zureck & Company, P.C.
Director of the Company

Richard B. Smith                                                                   48           2002            2003
Senior Vice President for Private Banking at Suffolk County National Bank
Director of the Company

Ronald J. Macklin                                                                  41           2003            2003
Managing Counsel for KeySpan Corporation
Director of the Company
</TABLE>


                                       12
<PAGE>

(b) Business Experience

Stephen V. Maroney, age 61, was initially engaged by the Company as an outside
consultant in June 1996 and elected to the Board of Directors in July of that
same year. Mr. Maroney is the former President of Extebank, a Long Island based
commercial bank with a presence in Nassau and Suffolk Counties and New York
City. Prior to that appointment, he served as Extebank's Chief Financial
Officer. Mr. Maroney was appointed to the position of President, CEO and
Treasurer by the Gyrodyne Board of Directors on March 14, 1999. His career on
Long Island spans a period of over 40 years and includes involvement in numerous
civic, charitable and professional organizations.

Peter Pitsiokos, age 43, joined the Company in November 1992, is the Executive
Vice President, and serves as the Company's Secretary and General Counsel. Mr.
Pitsiokos was formerly the Executive Assistant District Attorney in Suffolk
County, New York. He also served as the Assistant Director of Economic
Development and the Director of Water Resources in the Town of Brookhaven. He
holds a Law degree from Villanova University and a BA degree from the State
University of New York at Stony Brook.

Frank D'Alessandro, age 57, joined the Company in March 1997 as its Controller.
Prior to joining the Company, he was Controller of Cornucopia Pet Foods Inc., a
distributor of all natural pet foods. Previous to that he spent many years in
various financial positions. Mr. D'Alessandro holds an MBA degree in Finance as
well as a BBA in Accounting, both from Hofstra University.

Paul L. Lamb, age 57, has been a Director since 1997 and became Chairman of the
Board on March 14, 1999. He is a founding partner in the law firm of Lamb &
Barnosky, LLP; a past President of the Suffolk County Bar Association; and a
Dean of the Suffolk Academy of Law. He holds a B.A. from Tulane University, a
J.D. from the University of Kentucky and an LL.M. from the University of London,
England.

Robert Beyer, age 70, has been a Director of the company since November 1977. He
is also a Director of the Company's subsidiaries. He retired from the United
States Naval Reserve in 1993 with the rank of Captain. He retired from his
position as Senior Inertial Systems Engineer with the Naval Air Systems Command
in 1998. He has an electrical engineering degree from New York University and a
graduate degree in International Business from Sophia University in Tokyo,
Japan. Mr. Beyer was employed by Gyrodyne from 1962-1973. He was stationed in
Japan as a Technical Representative for the Company's remotely piloted
helicopters from 1963 to 1970.

Philip F. Palmedo, age 69, was appointed to the Board of Directors in July 1996.
Mr. Palmedo is Chairman of International Resources Group and former President of
the Long Island Research Institute. He has shepherded numerous fledgling
businesses into the financial and technological markets completing several
financing and joint venture technology agreements. He has M.S. and Ph.D. degrees
from M.I.T.

Robert F. Friemann, age 56, was appointed to the Board of Directors in October
1998. He is currently a CPA and a retired partner of Albrecht, Viggiano, Zureck
& Company, P.C. Mr. Friemann is a member of the American Institute of Certified
Public Accountants and the New York State Society of Certified Public
Accountants. He has been an instructor for the New York State Society of
Certified Public Accountants and is the author of numerous articles on issues
including taxation, accounting and auditing.

Richard B. Smith, age 48, was appointed to the Board of Directors in November
2002. He currently serves as Senior Vice President for Private Banking at
Suffolk County National Bank. Previously, he worked for 10 years at Key Bank
(Dime Savings Bank) and for 3 years at L.I. Trust/Apple Bank. He received an MBA
in Finance from SUNY Albany in 1983. Mr. Smith serves as the Mayor of the
Incorporated Village of Nissequogue and as a Trustee of the Smithtown Historical
Society.

Ronald J. Macklin, age 41, was appointed to the Board of Directors in June 2003.
Mr. Macklin currently serves as Managing Counsel for KeySpan where he has held
various positions within the Office of General Counsel since 1991. Previously,
he was associated with the law firms of Roseman & Colin and Cullen & Dykman. He
received a B.A. degree from Stony Brook University and his Juris Doctorate from
Union University's Albany Law School.

(c) Compliance with Section 16(a) of the Exchange Act

A review of all Forms 3 & 4 filed with the Registrant indicates that there were
no late filings of any required Forms 3 or Forms 4 with the Securities and
Exchange Commission for fiscal year 2003. A review of current year filings
indicates that no 10% holder of Gyrodyne Common Stock $1 Par Value failed to
file timely reports.


                                       13
<PAGE>

Item 10 Compensation of Executive Officers and Directors

(a) Executive Compensation

During the fiscal years ended April 30, 2003, April 30, 2002, and April 30,
2001, two Directors or Officers received remuneration in excess of $100,000 in
such capacity.

<TABLE>
<CAPTION>
                                                       SUMMARY COMPENSATION TABLE
                                                           Annual Compensation
                                                                                Long term Compensation
                                                                       ---------------------------------------
                                      Annual Compensation                    Awards                  Pay outs
                                  ----------------------------------------------------------------------------
                                                                                            Securities
                                                          Other Annual     Restricted       Underlying       LTIP
       Name and                    Salary      Bonus      Compensation        Stock        Options/LSARs    Payout     All Other
  Principal Position       Year      ($)        ($)           ($)           Award ($)           (#)           ($)     Compensation
-----------------------------------------------------------------------------------------------------------------------------------
<S>                        <C>    <C>           <C>        <C>                  <C>           <C>              <C>          <C>
Stephen V. Maroney
President & CEO            2003   209,500       0          22,422 (A)           0             20,355           0            0

                           2002   190,750       0               0               0             13,750           0            0

                           2001   181,058       0               0               0             10,500           0            0
Peter Pitsiokos
Exec.V.P. and Secretary    2003   148,990       0          17,797 (B)           0             13,945           0            0

                           2002   123,128       0               0               0             14,300           0            0

                           2001   127,242       0          20,647 (B)           0              8,000           0            0
</TABLE>

(A) In FY 03, Mr. Maroney received 1,430 shares from stock awards granted with a
value of $22,422. The Registrant has concluded that aggregate amounts of
personal benefits to any of the current executives does not exceed the lesser of
$50,000 or 10% of compensation and bonuses reported above for the named
executive officers, and that the information set forth in tabular form above is
not rendered materially misleading by virtue of the omission of such personal
benefits.

(B) In FY 03, Mr. Pitsiokos received 1,135 shares from stock awards granted with
a value of $17,797. For the year ended 2000, Mr. Pitsiokos received 4,093 shares
from the exercise of stock appreciation rights granted in FY 95, 25% of which
was amortized in FY 01 with a value of $20,647.

Option/SAR Grants in Last Fiscal Year

--------------------------------------------------------------------------------

                     Number of     % of Total
                     Securities    Options/SARs
                     Underlying    Granted to
                     Options/SARs  Employees in   Exercise or Base  Expiration
      Name           Granted (#)   Fiscal Year    Price ($/Sh)      Date
--------------------------------------------------------------------------------

Stephen V. Maroney     3,300           7.9%        $15.938            8/12/07
Stephen V. Maroney    17,055          40.8%        $15.680           10/29/07
Peter Pitsiokos       13,945          33.4%        $15.680           10/29/07


                                       14
<PAGE>

              AGGREGATED OPTION/LSAR EXERCISED IN LAST FISCAL YEAR
                          AND FY-END OPTION/LSAR VALUES

<TABLE>
<CAPTION>
                                                                 Number of Securities          Value of Unexercised
                                                                Underlying Unexercised             In-the-Money
                                       Shares                      Options/LSAR's at             Options/LSAR's at
                                     Acquired on     Value          April 30, 2003              April 30, 2003 ($)
               Name                   Exercise     Realized    Exercisable/Unexercisable     Exercisable/Unexercisable
               ----                   --------     --------    -------------------------     -------------------------
<S>                                      <C>          <C>              <C>                          <C>
Stephen V. Maroney                       --           --               60,780/0                     $94,658/$0
President and CEO
Peter Pitsiokos                          --           --               40,895/0                     $62,392/$0
Exec. V.P. and Secretary
</TABLE>

(b) Compensation of Directors

      Each Director is entitled to receive a fee of $12,000 a year, $1,000 per
Board meeting attended and $500 for each Committee meeting attended and are
reimbursed for travel and Company business related expenses. The Company
continued its policy which states that Directors who are also employees of the
Company do not receive any additional compensation for their services as
Directors.

(c) Employment Contracts

      Effective January 23, 2003, the Company entered into an amended and
restated employment agreement with Stephen V. Maroney as President, Chief
Executive Officer, and Treasurer and Peter Pitsiokos as Executive Vice
President, Secretary, and General Counsel. Their annual salaries are currently
at $209,500 and $152,500, respectively. The terms of the agreements were
extended from one to three years and provide for a severance payment equivalent
to three years salary in the event of a change in control. Both agreements were
attached as Exhibit 10, Material Contracts, in the 10-QSB dated January 31,
2003.

Item 11 Security Ownership of Certain Beneficial Owners and Management

(a) The following table sets forth as of June 12, 2003 those persons or entities
known by the Company to be Beneficial Owners of more than 5% of the Company's
Common Stock $1 Par Value, its only equity security.

                                         Type of       Number of      Percent of
          Name and Address              Ownership    shares Owned       Class
          ----------------              ---------    ------------       -----
Private Capital Management, Inc.
8889 Pelican Bay Blvd., Suite 500
Naples, Florida 34108                   Beneficial       193,957        17.36

Gerard Scollan
80 Browns River Road
Sayville, NY 11782 (A)                  Beneficial       113,796        10.19

Gyrodyne Company of America, Inc.
St. James, NY 11780 (B)                 Beneficial        82,580         7.39

(A) Includes 102,241 shares of Company stock held by Lovin Oven Catering of
Suffolk, Inc., of which Mr. Scollan is the majority shareholder.

(B) As Gyrodyne has the authority to direct HSBC Holdings, the Trustee of the
Gyrodyne Pension Plan, to vote the securities of the Company held by the Pension
Fund, Gyrodyne Company of America, Inc. has been listed above as the beneficial
owner of the 82,580 shares held by HSBC Holdings as Trustee for the Gyrodyne
Pension Fund.


                                       15
<PAGE>

(b) In addition, the following table as of June 12, 2003 includes the
outstanding voting securities beneficially owned by the executive officers and
directors, and the number of shares owned by directors and executive officers as
a group.

<TABLE>
<CAPTION>
                                                                               Shares of stock
                                                                                 Beneficially          Pct. of Common
            Name & Principal Occupation or Employment                               Owned               Stock Owned
---------------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>                     <C>
Stephen V. Maroney                                                                  16,293                  1.46
President, CEO, Treasurer and Director of the Company

Peter Pitsiokos                                                                      9,091        (B)       (A)
Executive Vice President, Secretary & General Counsel of the Company

Paul L. Lamb                                                                        15,989        (C)       1.43
Partner of Lamb & Barnosky, LLP
Chairman of the Board of Directors of the Company

Robert H. Beyer                                                                      9,263        (D)       (A)
Consultant
Director of the Company

Philip F. Palmedo                                                                    9,999                  (A)
Chairman of International Resources Group
Director of the Company

Robert F. Friemann                                                                   3,291                  (A)
CPA and a Retired Partner of Albrecht, Viggiano, Zureck & Company, P.C.
Director of the Company

Richard B. Smith                                                                     1,000                  (A)
Senior Vice President for Private Banking at Suffolk County National Bank
Director of the Company

Ronald J. Macklin                                                                        0                  (A)
Managing Counsel for KeySpan Corporation
Director of the Company

All Directors and Executive
Officers as a Group (8 persons)                                                     64,926                  5.81
</TABLE>

(A)   Less than 1%.

(B)   Does not include his wife's and minor children's ownership of 989 shares
      in which he denies any beneficial interest.

(C)   Includes 13,747 shares held by Lamb & Barnosky, LLP Profit Sharing Trust.
      Mr. Lamb is a trustee of the Profit Sharing Trust.

(D)   Does not include his wife's ownership of 1,801 shares in which he denies
      any beneficial interest.

Item 12 Certain Relationships and Related Transactions

(a) Transactions with Management and Others

On August 8, 2002, the Company closed on a Contract of Sale with Sco Properties,
Inc., a New York corporation wholly-owned by Gerard Scollan, to sell to Sco
Properties, Inc. certain real estate owned by the Company for $5,370,000.00.

Other than the transaction above, there were no transactions with any officer,
director, or beneficial owner of more than 5% of the Company's common stock, or
any relative or spouse of the foregoing persons, that had a direct or indirect
interest in any transaction involving the Company or its subsidiaries which
exceeded $60,000 in the prior year.


                                       16
<PAGE>

(b) Certain Relationships and Transactions

The Company has engaged the firm of Lamb & Barnosky, LLP as outside legal
counsel for a number of years. Director Lamb is a partner in the firm to which
Gyrodyne incurred legal fees of $119,201 and $309,191 in FY 2003 and FY 2002,
respectively.

(c) Indebtedness of Management

No loans were made to any officer, director, or any member of their immediate
families during the fiscal year just ended, nor were any amounts due and owing
the Company or its subsidiaries from those parties at fiscal year end.

Item 13 Exhibits and Reports on Form 8-K

(a) Exhibits Required: Exhibit 31.1 CEO/CFO Certification required under section
302 of the Sarbanes-Oxley Act of 2002. Exhibit 32.1 CEO/CFO Certification
Pursuant to 18 USC, Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K - None were filed by the Company for the fourth quarter
of FY 2003. On May 29, 2003, the Company filed a Form 8-K attaching a press
release concerning the announced plans by the State University of New York to
acquire the Company's real estate for use by the University's Stony Brook
campus. On June 10, 2003, the Company filed another Form 8-K attaching a press
release announcing the appointment of Ronald J. Macklin to its Board of
Directors.

Item 14. Controls and Procedures

The Company's management, including the Chief Executive Officer and Chief
Financial Officer, has evaluated the effectiveness of the design and operation
of the Company's disclosure controls and procedures within 90 days prior to the
filing of this Annual Report on Form 10-KSB/A, and based on their evaluation,
the Chief Executive Officer and Chief Financial Officer have concluded that
these disclosure controls and procedures are effective.

There were no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
their evaluation.


                                       17
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) 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.


              /S/ Stephen V. Maroney
              -------------------------------------------
              Stephen V. Maroney, President, Treasurer,
              Director and Principal Executive Officer
              Date:  March 19, 2004


              /S/ Frank D'Alessandro
              -------------------------------------------
              Frank D'Alessandro, Controller
              Date:  March 19, 2004

                              ********************

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following on behalf of the Registrant and in the
capacities and on the dates indicated.


               /S/ Philip F. Palmedo
               ------------------------------------------
               Philip F. Palmedo, Director,
               Date:  March 19, 2004


               /S/ Stephen V. Maroney
               ------------------------------------------
               Stephen V. Maroney, Director
               Date:  March 19, 2004


               /S/ Robert F.Friemann
               ------------------------------------------
               Robert F. Friemann, Director
               Date:  March 19, 2004


                                       18
<PAGE>

               GYRODYNE COMPANY OF AMERICA, INC. AND SUBSIDIARIES

              REPORT ON AUDITS OF CONSOLIDATED FINANCIAL STATEMENTS

                       YEARS ENDED APRIL 30, 2003 AND 2002

                                    CONTENTS

                                                                     Page
                                                                     ----

Independent auditors' report                                         F-1

Consolidated balance sheets                                          F-2

Consolidated statements of income                                    F-3

Consolidated statement of stockholders' equity                       F-4

Consolidated statements of cash flows                                F-5

Notes to consolidated financial statements                       F-6 - F-22

<PAGE>

                          Independent Auditors' Report

Board of Directors and Stockholders
Gyrodyne Company of America, Inc.
St. James, New York

We have audited the accompanying consolidated balance sheets of Gyrodyne Company
of America, Inc. and Subsidiaries as of April 30, 2003 and 2002 and the related
consolidated statements of income, stockholders' equity and cash flows for the
years then ended. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall consolidated financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Gyrodyne Company of America, Inc. and Subsidiaries as of April 30, 2003 and 2002
and the results of their operations and their cash flows for the years then
ended in conformity with accounting principles generally accepted in the United
States of America.

As more fully discussed in Note 17, the accompanying financial statements have
been restated to correct the accounting of a limited partnership investment
interest from the cost method to the equity method. The financial statements
have been restated to account for this investment in accordance with EITF Topic
D-46 "Accounting for Limited Partnership Investments" and the guidance in
paragraph 8 of SOP 78-9 "Accounting for Investments in Real estate Ventures,"
which requires the use of the equity method for investments in limited
partnerships, unless the investor's interest is so minor that the limited
partner has virtually no influence over partnership operating and financial
policies. EITF Topic D-46 noted that practice generally has viewed limited
partnership investments greater than 3% to 5% to be more than minor. In our
original report we expressed an unqualified opinion on the April 30, 2003 and
2002 financial statements, and our opinion on the revised statements, as
expressed herein, remains unqualified.


                                                     HOLTZ RUBENSTEIN & CO., LLP

Melville, New York
June 20, 2003 (except for notes 3, 4 and 17
for which the date is February 19, 2004)


                                       F-1

<PAGE>

               GYRODYNE COMPANY OF AMERICA, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                  April 30,
                                                         ----------------------------
                              ASSETS                          2003            2002
                                                         ------------    ------------
                                                          (As restated, See Note 17)
<S>                                                      <C>             <C>
REAL ESTATE:
  Rental property:
    Land                                                 $      4,250    $      4,746
    Building and improvements                               3,915,361       4,668,358
    Machinery and equipment                                   156,292         116,851
                                                         ------------    ------------
                                                            4,075,903       4,789,955
  Less accumulated depreciation                             3,269,147       3,396,834
                                                         ------------    ------------
                                                              806,756       1,393,121
                                                         ------------    ------------

  Land held for development:
    Land                                                      792,201         803,592
    Land development costs                                  2,444,654       1,499,930
                                                         ------------    ------------
                                                            3,236,855       2,303,522
                                                         ------------    ------------
      Total real estate, net                                4,043,611       3,696,643

CASH AND CASH EQUIVALENTS                                   2,231,317       1,105,790
RENT RECEIVABLE, net of allowance for doubtful
  accounts of $41,000 and $62,000, respectively                71,437          30,079
MORTGAGE RECEIVABLE                                         1,800,000              --
PREPAID EXPENSES AND OTHER ASSETS                             244,598         122,527
PREPAID PENSION COSTS                                       1,662,505       1,668,252
                                                         ------------    ------------

                                                         $ 10,053,468    $  6,623,291
                                                         ============    ============
              LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
  Accounts payable and accrued expenses                  $    249,624    $    409,356
  Deposit on contract for sale of real estate                      --       1,000,000
  Deferred gain of sale of real estate                      1,573,900              --
  Tenant security deposits payable                            238,204         253,878
  Loans payable                                               669,610         700,184
  Deferred income taxes                                     1,861,000         641,000
                                                         ------------    ------------
      Total liabilities                                     4,592,338       3,004,418
                                                         ------------    ------------

COMMITMENTS

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                                7,278,191       7,235,301
  Deficit                                                    (816,758)     (2,586,426)
                                                         ------------    ------------
                                                            7,992,519       6,179,961
  Less cost of shares of common stock held in treasury     (2,531,389)     (2,561,088)
                                                         ------------    ------------
      Total stockholders' equity                            5,461,130       3,618,873
                                                         ------------    ------------

                                                         $ 10,053,468    $  6,623,291
                                                         ============    ============
</TABLE>

                 See notes to consolidated financial statements


                                       F-2

<PAGE>

               GYRODYNE COMPANY OF AMERICA, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

                                                   Years Ended
                                                    April 30,
                                           --------------------------
                                               2003           2002
                                           -----------    -----------

REVENUE FROM RENTAL PROPERTY               $ 2,344,396    $ 2,608,005
                                           -----------    -----------

RENTAL PROPERTY EXPENSE:
  Real estate taxes                            295,198        428,031
  Operating and maintenance                    467,946        594,012
  Interest expense                              56,611         61,520
  Depreciation                                  85,509        107,394
                                           -----------    -----------
                                               905,264      1,190,957
                                           -----------    -----------

INCOME FROM RENTAL PROPERTY                  1,439,132      1,417,048
                                           -----------    -----------

GENERAL AND ADMINISTRATIVE                   1,477,748      1,424,520
                                           -----------    -----------

LOSS FROM OPERATIONS                           (38,616)        (7,472)
                                           -----------    -----------

OTHER INCOME (EXPENSE):
  Gain on sale of real estate                3,124,307             --
  Lease termination expense, net                    --        (28,443)
  Gain on sale of equipment                         --          7,124
  Interest income                               87,121         48,971
                                           -----------    -----------
                                             3,211,428         27,652
                                           -----------    -----------

INCOME BEFORE PROVISION FOR INCOME TAXES     3,172,812         20,180

PROVISION (BENEFIT)  FOR INCOME TAXES        1,403,144         (1,465)
                                           -----------    -----------

NET INCOME                                 $ 1,769,668    $    21,645
                                           ===========    ===========

NET INCOME PER COMMON SHARE:
  Basic                                    $      1.59    $      0.02
                                           ===========    ===========
  Diluted                                  $      1.58    $      0.02
                                           ===========    ===========

WEIGHTED AVERAGE NUMBER OF COMMON
  SHARES OUTSTANDING:
    Basic                                    1,114,422      1,218,076
                                           ===========    ===========
    Diluted                                  1,121,465      1,225,452
                                           ===========    ===========

                 See notes to consolidated financial statements


                                       F-3
<PAGE>

               GYRODYNE COMPANY OF AMERICA, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                          $1 Par Value
                                          Common Stock                                        Treasury Stock
                                     ----------------------   Additional    Retained     ------------------------
                                                     Par       Paid in      Earnings                                  Total
                                       Shares       Value      Capital      (Deficit)       Shares       Cost         Equity
                                     ----------  ----------  -----------   -----------   ----------   -----------   -----------
<S>                                   <C>        <C>         <C>           <C>              <C>       <C>           <C>
Balance at May 1, 2001,
as previously reported                1,531,086  $1,531,086  $ 7,539,475   $   123,856      412,775   $(2,374,075)  $ 6,820,342

Prior period adjustment                      --          --           --    (1,030,104)          --            --    (1,030,104)
                                     ----------  ----------  -----------   -----------   ----------   -----------   -----------

Balance at May 1, 2001, as restated   1,531,086   1,531,086    7,539,475      (906,248)     412,775    (2,374,075)    5,790,238

Purchase of treasury stock                   --          --           --            --      111,000    (2,247,750)   (2,247,750)
10% stock dividend                           --          --     (344,656)   (1,701,823)          --     2,038,082        (8,397)
Exercise of stock options                    --          --       36,754            --       (3,650)       20,987        57,741
Issuance of stock for services               --          --        3,728            --         (290)        1,668         5,396
Net income                                   --          --           --        21,645           --            --        21,645
                                     ----------  ----------  -----------   -----------   ----------   -----------   -----------

Balance at April 30, 2002             1,531,086   1,531,086    7,235,301    (2,586,426)     519,835    (2,561,088)    3,618,873
Issuance of treasury stock for
  payment of 10% stock dividend              --          --           --            --     (100,646)           --            --
Exercise of stock options                    --          --        8,483            --       (1,700)        9,775        18,258
Issuance of stock for services               --          --       34,407            --       (3,465)       19,924        54,331
Net income                                   --          --           --     1,769,668           --            --     1,769,668
                                     ----------  ----------  -----------   -----------   ----------   -----------   -----------

Balance at April 30, 2003             1,531,086  $1,531,086  $ 7,278,191   $  (816,758)     414,024   $(2,531,389)  $ 5,461,130
                                     ==========  ==========  ===========   ===========   ==========   ===========   ===========
</TABLE>

                 See notes to consolidated financial statements


                                       F-4
<PAGE>

                        GYRODYNE COMPANY OF AMERICA, INC. AND SUBSIDIARIES

                              CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                  Years Ended
                                                                   April 30,
                                                           -------------------------
                                                               2003          2002
                                                           -----------   -----------
<S>                                                        <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                               $ 1,769,668   $    21,645
                                                           -----------   -----------
  Adjustments to reconcile net income to net cash used in
    operating activities:
      Depreciation and amortization                            102,721       120,330
      Bad debt expense                                           3,045        13,550
      Deferred income tax provision (benefit)                1,220,000       (38,000)
      Non-cash compensation                                     54,331         5,396
      Pension expense                                          259,880        34,903
      Gain on sale of equipment                                     --        (5,599)
      Gain on sale of property                              (3,124,307)           --
      Changes in operating assets and liabilities:
      (Increase) decrease in assets:
        Land development costs                              (1,011,379)     (284,384)
        Accounts receivable                                    (44,403)      (22,699)
        Prepaid expenses and other assets                     (139,283)       25,023
        Prepaid pension costs                                 (254,133)           --
      Increase (decrease) in liabilities:
        Accounts payable and accrued expenses                 (159,732)     (122,193)
        Tenant security deposits                               (15,674)        7,362
                                                           -----------   -----------
      Total adjustments                                     (3,108,934)     (266,311)
                                                           -----------   -----------
      Net cash used in operating activities                 (1,339,266)     (244,666)
                                                           -----------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisition of property, plant and equipment                 (46,516)      (98,581)
  Proceeds from sale of equipment                                   --         6,800
  Proceeds from sale of real estate                          2,523,625            --
  Deposit on contract for sale of real estate                       --     1,000,000
                                                           -----------   -----------
      Net cash provided by investing activities              2,477,109       908,219
                                                           -----------   -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayment of loans payable                                   (30,574)      (56,592)
  Proceeds from exercise of stock options                       18,258        57,741
  Purchase of treasury stock                                        --    (2,247,750)
                                                           -----------   -----------
       Net cash used in financing activities                   (12,316)   (2,246,601)
                                                           -----------   -----------

Net increase (decrease) in cash and cash equivalents         1,125,527    (1,583,048)

Cash and cash equivalents at beginning of year               1,105,790     2,688,838
                                                           -----------   -----------

Cash and cash equivalents at end of year                   $ 2,231,317   $ 1,105,790
                                                           ===========   ===========
</TABLE>

                 See notes to consolidated financial statements


                                       F-5

<PAGE>

               GYRODYNE COMPANY OF AMERICA, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                       YEARS ENDED APRIL 30, 2003 AND 2002

1.    Summary of Significant Accounting Policies:

      a.    Organization and nature of operations

            Gyrodyne Company of America, Inc. and Subsidiaries (the "Company")
is primarily a lessor of industrial and commercial real estate to unrelated
diversified entities located in Long Island, New York.

            In April 2002, the Company announced redevelopment plans of a
significant portion of real estate holdings, for the construction of an 18-hole
championship golf course and 336 luxury residential units. In connection with
this redevelopment plan, the Company executed agreements with Landmark National
to design and develop the golf course community.

      b.    Principles of consolidation

            The accompanying consolidated financial statements include the
accounts of Gyrodyne Company of America, Inc. ("GCA") and all majority owned
subsidiaries. Investments in affiliates in which the Company has the ability to
exercise significant influence, but not control, would be accounted for under
the equity method. Investment interests in excess of 5% in limited partnerships
are accounted for under the equity method.

            All consolidated subsidiaries are wholly owned, and all significant
inter-company transactions have been eliminated.

      c.    Rental real estate

            Rental real estate assets are stated at cost, and reported net of
accumulated depreciation and amortization. Tenant improvements, which are
included in buildings and improvements, are also stated at cost. Expenditures
for ordinary maintenance and repairs are expensed to operations as they are
incurred. Renovations and or replacements, which improve or extend the life of
the asset are capitalized and depreciated over their estimated useful lives.

      d.    Real estate held for development

            Real estate held for development is stated at the lower of cost or
net realizable value. In addition to land, land development and construction
costs, real estate held for development includes interest, real estate taxes and
related development and construction overhead costs which are capitalized during
the development and construction period.

            Net realizable value represents estimates, based on management's
present plans and intentions, of sale price less development and disposition
cost, assuming that disposition occurs in the normal course of business.


                                       F-6

<PAGE>

1.    Summary of Significant Accounting Policies: (Cont'd)

      e.    Long-lived assets

            On a periodic basis, management assesses whether there are any
indicators that the value of the real estate properties may be impaired. A
property's value is impaired only if management's estimate of the aggregate
future cash flows (undiscounted and without interest charges) to be generated by
the property are less than the carrying value of the property. Such cash flows
consider factors such as expected future operating income, trends and prospects,
as well as the effects of demand, competition and other factors. To the extent
impairment occurs, the loss will be measured as the excess of the carrying
amount of the property over the fair value of the property.

            The Company is required to make subjective assessments as to whether
there are impairments in the value of its real estate properties and other
investments. These assessments have a direct impact on the Company's net income,
since an impairment charge results in an immediate negative adjustment to net
income. In determining impairment, if any, the Company has adopted Financial
Accounting Standards Board ("FASB") Statement No. 144, "Accounting for the
Impairment or Disposal of Long Lived Assets".

      f.    Depreciation and amortization

            Depreciation and amortization are provided on the straight-line
method over the estimated useful lives of the assets, as follows:

            Buildings and improvements                            10 to 30 years
            Machinery and equipment                                3 to 20 years

            Expenditures for maintenance and repairs are charged to operations
as incurred. Significant renovations are capitalized.

      g.    Revenue recognition

            Minimum revenues from rental property are recognized on a
straight-line basis over the terms of the related leases.

      h.    Allowance for doubtful accounts

            Management must make estimates of the uncollectability of accounts
receivable. Management specifically analyzed accounts receivable and analyzes
historical bad debts, customer concentrations, customer credit-worthiness,
current economic trends and changes in customer payment terms when evaluating
the adequacy of the allowance for doubtful accounts.

      i.    Investments

            The Company has a 10.93% limited partnership interest in
Callery-Judge Grove, L.P. (the "Grove") that owns a 3500-acre citrus grove in
Palm Beach County, Florida. The Company is accounting for this investment under
the equity method in accordance with EITF Topic D-46 "Accounting for Limited
Partnership Investments" and the guidance in paragraph 8 of SOP 78-9 "Accounting
for Investments in Real Estate Ventures."


                                       F-7

<PAGE>

1.    Summary of Significant Accounting Policies: (Cont'd)

      i.    Investments Cont'd)

            In fiscal 2000, when the Company's share of losses equaled the
carrying value of the investment, the equity method of accounting was suspended,
and no additional losses have been charged to operations.

            See Note 3 for summarized financial information and certain
information about the appraised value of the Grove.

      j.    Cash equivalents

            The Company considers all highly liquid debt instruments purchased
with a maturity of three months or less to be cash equivalents.

      k.    Net income per common share and per common equivalent share

            The reconciliations for the years ended April 30, 2003 and April 30,
2002 are as follows:

                                                         Year Ended
                                                        April 30, 2003
                                             --------------------------------
                                               Income     Shares    Per Share
                                             ----------  ---------  ---------

            Basic EPS                        $1,769,668  1,114,422  $    1.59
            Effect of dilutive securities -
              common stock options                   --      7,043       (.01)
                                             ----------  ---------  ---------
                 Diluted EPS                 $1,769,668  1,121,465  $    1.58
                                             ==========  =========  =========

                                                       Year Ended
                                                      April 30, 2002
                                             --------------------------------
                                               Income     Shares    Per Share
                                             ----------  ---------  ---------

            Basic EPS                        $   21,645  1,218,076  $     .02
            Effect of dilutive securities -
              common stock options                   --      7,376         --
                                             ----------  ---------  ---------

                 Diluted EPS                 $   21,645  1,225,452  $     .02
                                             ==========  =========  =========

      l.    Income taxes

            Deferred tax assets and liabilities are determined based on
differences between financial reporting and tax bases of assets and liabilities,
and are measured using the enacted tax rates and laws that will be in effect
when the differences are expected to reverse.

      m.    Stock-based compensation

            The Company applies APB Opinion No. 25 and related interpretations
in accounting for stock-based compensation to employees. Stock compensation to
non-employees is accounted for at fair value in accordance with Statement of
Financial Accounting Standard No. 123, "Accounting for Stock-Based
Compensation."


                                       F-8

<PAGE>

1.    Summary of Significant Accounting Policies: (Cont'd)

      n.    Use of estimates

            The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The most
significant assumptions and estimates relate to depreciable lives and the
valuation of real estate.

      o.    New accounting pronouncements

            In August 2001, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards (SFAS) Statement No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets" which was
effective for fiscal periods beginning after December 15, 2001. Statement No.
144 establishes an accounting model for impairment or disposal of long-lived
assets including discontinued operations.

            In April 2002, the Financial Accounting Standards Board (FASB)
issued SFAS No. 145, "Recission of FASB Statements No. 4, 44, and 64, Amendment
of FASB Statement No. 13, and Technical Corrections". This Statement rescinds
FASB Statement No. 4, "Reporting Gains and Losses from Extinguishment of Debt",
and an amendment of that Statement, FASB Statement No. 64, "Extinguishments of
Debt Made to Satisfy Sinking-Fund Requirements". This Statement also rescinds
FASB Statement No. 44, "Accounting for Intangible Assets of Motor Carriers".
This Statement amends FASB Statement No. 13, "Accounting for Leases", to
eliminate an inconsistency between the required accounting for sale-leaseback
transactions and the required accounting for certain lease modifications that
have economic effects that are similar to sale-leaseback transactions. The
provisions of this Statement related to the rescission of Statement No. 4 shall
be applied in fiscal years beginning after May 15, 2002. All other provisions of
this Statement shall be effective for financial statements issued on or after
May 15, 2002.

            In August 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities", which establishes new standards of
accounting and reporting for costs associated with exit or disposal activities.
This standard requires that a liability is recorded as of the date an obligation
is incurred. This Statement also requires that an exit or disposal liability be
initially measured at fair value. SFAS No. 146 does not apply to disposal
activities qualifying as a discontinued operation. This Statement was effective
for exit or disposal activities initiated after December 31, 2002.

            In December 2002, the FASB issued SFAS No. 148 "Accounting for
Stock-Based Compensation--Transition and Disclosure--an amendment of FASB
Statement No. 123". This Statement amends SFAS No. 123, "Accounting for
Stock-Based Compensation", to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based
employee compensation. In addition, this Statement amended the disclosure
requirements of Statement 123 to require prominent disclosures in both annual
and interim financial statements about the method of accounting for stock-based
employee compensation and the effect of the method used on reported results.
This Statement was effective for fiscal years ending after December 15, 2002.

            The adoption of SFAS Nos. 144, 145, 146 and 148 did not have a
material effect on the financial statements of the Company.


                                       F-9

<PAGE>

1.    Summary of Significant Accounting Policies: (Cont'd)

      o.    New accounting pronouncements (Cont'd)

            In April 2003, the FASB issued SFAS No. 149 "Amendment of Statement
133 on Derivative Instruments and Hedging Activities". This Statement amends and
clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives) and for hedging activities under FASB
Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities". This Statement is effective for contracts entered into or modified
after June 30, 2003 and for hedging relationships designated after June 30,
2003.

            In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity,"
which improves the accounting for certain financial instruments that, under
previous guidance, issuers could account for as equity. The new Statement
requires that those instruments be classified as liabilities in statements of
financial position. SFAS No. 150 also requires disclosures about alternative
ways of settling the instruments and the capital structure of entities, all of
whose shares are mandatorily redeemable. Most of the guidance in Statement 150
is effective for all financial instruments entered into or modified after May
31, 2003, and otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003.

            The Company is currently evaluating the impact of Statement Nos. 149
and 150. The Company does not believe that these pronouncements will have a
material effect on the financial statements.

2.    Mortgage Receivable:

      Mortgage receivable in the principal amount $1,800,000 due from a former
tenant in connection with sale of real estate (Note 7). The mortgage bears
interest at 5% per annum with interest only payments due quarterly, commencing
in November 2002. The principal and any unpaid interest are due and payable in
August 2005. The mortgage is secured by the related real estate along with a
third party guarantee of approximately $1,430,000.

3.    Investment in the Grove Partnership:

      The Company has a 10.93% limited partnership interest in the Callery-Judge
Grove, L.P. (the "Grove"). As of April 30, 2003 and 2002, the carrying value of
the Company's investment was $0.

      The Grove has reported to its limited partners that in June 2002 it
received an independent appraisal report of the citrus grove property, which is
now the subject of development applications. Based upon that appraisal, at April
30, 2003, strictly on a pro-rata basis, the estimated fair value of the
Company's interest in the Grove would be approximately $6,442,000. The Company
cannot predict what, if any, value it will ultimately realize from this
investment.


                                      F-10

<PAGE>

3.    Investment in the Grove Partnership: (Cont'd)

      The fiscal year end of the Grove is June 30. Summarized financial
information of the Grove as of June 30, 2002 and 2001 is as follows:

                                             Years Ended June 30,
                                      ---------------------------------
                                           2002               2001
                                      --------------     --------------
                                      (in thousands)     (in thousands)

      Total current assets               $  2,826           $  4,365
      Total assets                         22,625             25,947
      Total current liabilities            17,011              2,764
      Total liabilities                    18,002             18,223
      Total partners' capital               4,623              7,724
      Total revenues                       13,771             13,535
      Net loss                             (3,101)            (4,176)

4.    Income Taxes:

      The Company files a consolidated U.S. federal income tax return that
includes all 100% owned subsidiaries. State tax returns are filed on a
consolidated or separate basis, depending on the applicable laws.

      The provision (benefit) for income taxes is comprised of the following:

                                                     Years Ended
                                                       April 30,
                                            -----------------------------
                                                2003              2002
                                            -----------       -----------

      Current:
         Federal                            $        --       $        --
         State                                  183,144            36,535
                                            -----------       -----------
                                                183,144            36,535
                                            -----------       -----------
      Deferred:
         Federal                                985,000            12,000
         State                                  235,000           (50,000)
                                            -----------       -----------
                                              1,220,000           (38,000)
                                            -----------       -----------

                                            $ 1,403,144       $    (1,465)
                                            ===========       ===========


                                      F-11

<PAGE>

4.    Income Taxes: (Cont'd)

      The components of the net deferred tax liabilities are as follows:

<TABLE>
<CAPTION>
                                                                         April 30,
                                                              -----------------------------
                                                                  2003              2002
                                                              -----------       -----------
<S>                                                           <C>               <C>
      Deferred tax assets:
         Stock compensation                                   $    53,000       $    38,000
         Accrued sick and vacation                                 13,000            11,000
         Provision for bad debt                                    17,000            26,000
         Tax loss carryforwards                                    10,000           555,000
         Contribution carryover                                        --             4,000
                                                              -----------       -----------
              Total deferred tax assets                            93,000           634,000

      Deferred tax liabilities:
         Prepaid pension costs                                   (697,000)         (699,000)
         Tax losses realized in excess of carrying value
          on investment in limited partnership                   (658,000)         (576,000)
         Land development costs                                  (599,000)               --
                                                              -----------       -----------
              Total deferred tax liabilities                   (1,954,000)       (1,275,000)
                                                              -----------       -----------

              Net deferred income taxes                       $(1,861,000)      $  (641,000)
                                                              ===========       ===========
</TABLE>

      The Company has federal net operating loss carryforwards of approximately
$30,000, which can be used to reduce future taxable income through 2022. There
was no current federal tax provision for the years ended April 30, 2003 and
2002, as the Company was able to apply net operating loss carry forwards to its
federal taxable income.

      A reconciliation of the federal statutory rate to the Company's effective
tax rate is as follows:

                                                              Years Ended
                                                                April 30,
                                                         --------------------
                                                           2003          2002
                                                         ------        ------

      U.S. Federal statutory income rate                   34.0%         34.0%
      State income tax, net of federal tax benefits         7.5           7.5
      Permanent differences                                  --           7.9
      Change in valuation allowance                          --         (94.2)
      Other differences, net                                2.7          37.5
                                                         ------        ------

                                                           44.2%         (7.3)%
                                                         ======        ======

5.    Retirement Plans:

      The Company has a noncontributory defined benefit pension plan covering
substantially all of its employees. The benefits are based on annual average
earnings for the highest sixty (60) months (whether or not continuous)
immediately preceding the Participant's termination date. Annual contributions
to the plan are at least equal to the minimum amount, if any, required by the
Employee Retirement Income Security Act of 1974 but no greater than the maximum
amount that can be deducted for federal income tax purposes. Contributions are
intended to provide not only for benefits attributed to service to date but also
those expected to be earned in the future. Employer contributions to the plan
approximated $254,000 and $0 for the years ended April 30, 2003 and 2002,
respectively.


                                      F-12

<PAGE>

5.    Retirement Plans: (Cont'd)

      Net periodic pension expense consists of the following components:

<TABLE>
<CAPTION>
                                                                      Years Ended
                                                                         April 30,
                                                              -----------------------------
                                                                  2003              2002
                                                              -----------       -----------
<S>                                                           <C>               <C>
      Service cost                                            $    97,139       $    81,564
      Interest costs                                              122,120           104,899
      Expected return on assets                                  (115,487)         (138,902)
      Net amortization                                            156,108           (12,658)
                                                              -----------       -----------

      Pension expense                                         $   259,880       $    34,903
                                                              ===========       ===========
</TABLE>

      The Plan's funded status is as follows:

<TABLE>
<CAPTION>
                                                                        April 30,
                                                              -----------------------------
                                                                  2003              2002
                                                              -----------       -----------
<S>                                                           <C>               <C>
      Change in projected benefit obligation:
         Projected benefit obligation, beginning of year      $ 1,412,369       $ 1,210,194
         Service cost                                              97,139            81,564
         Interest cost                                            122,120           104,899
         Actuarial loss                                           315,180           201,898
         Benefits paid                                           (183,295)         (186,186)
                                                              -----------       -----------

      Projected benefit obligation, end of year               $ 1,763,513       $ 1,412,369
                                                              ===========       ===========

      Change in plan assets:
         Fair value of plan assets, beginning of year         $ 1,496,256       $ 1,837,125
         Actual return on plan assets                              67,081          (138,143)
         Employer contribution                                    254,133                --
         Actual benefits paid                                    (245,106)         (202,726)
                                                              -----------       -----------

      Fair value of plan assets, end of year                  $ 1,572,364       $ 1,496,256
                                                              ===========       ===========

      Reconciliation of funded status:
         Funded status                                        $  (191,149)      $    83,887
         Unrecognized net actuarial loss                        1,595,210         1,253,183
         Unrecognized prior service cost                          258,444           331,182
                                                              -----------       -----------

      Prepaid pension cost                                    $ 1,662,505       $ 1,668,252
                                                              ===========       ===========
</TABLE>

            Assumptions used in accounting for the Company's defined benefit
      pension plan are as follows:

<TABLE>
<CAPTION>
                                                                       Years Ended
                                                                        April 30,
                                                              -----------------------------
                                                                  2003              2002
                                                              -----------       -----------
<S>                                                                <C>               <C>
      Discount rate                                                7.5%              8.0%
      Rate of increase in compensation                             4.0%              5.0%
      Expected long-term rate of return on plan assets             8.0%              8.0%
</TABLE>


                                      F-13

<PAGE>

5.    Retirement Plans: (Cont'd)

      Securities of the Company included in plan assets are as follows:

                                                       April 30,
                                            ------------------------------
                                               2003                2002
                                            ----------          ----------

      Number of shares                          82,580              78,346
      Market value                          $1,391,473          $1,327,965

6.    Stock Options Plans:

      Incentive Stock Option Plan

      The Company has a stock option plan (the "Plan") under which participants
may be granted either Incentive Stock Options ("ISOs"), Non-Qualified Stock
Options ("NQSOs") or Stock Grants. The purpose of the Plan is to promote the
overall financial objectives of the Company and its shareholders by motivating
those persons selected to participate in the Plan to achieve long-term growth in
shareholder equity in the Company and by retaining the association of those
individuals who are instrumental in achieving this growth. Such options or
grants become exercisable at various intervals based upon vesting schedules as
determined by the Compensation Committee. The options expire between October
2003 and October 2007.

      During the year ended April 30, 2003, the Company granted 3,465 shares of
common stock to employees with a value of approximately $54,000.

      The ISOs may be granted to employees and consultants of the Company at a
price not less than the fair market value on the date of grant. All such options
are authorized and approved by the Board of Directors, based on recommendations
of the Compensation Committee.

      ISOs may be granted along with Stock Appreciation Rights, which permit the
holder to tender the option to the Company in exchange for stock, at no cost to
the optionee, that represents the difference between the option price and the
fair market value on date of exercise. NQSOs may be issued with Limited Stock
Appreciation Rights, which are exercisable, for cash, in the event of a change
of control. In addition, an incentive kicker may be provided for Stock Grants,
ISOs and NQSOs, which increases the number of grants or options based on the
market price of the shares at exercise versus the option price. A reload feature
may also be attached which permits the optionee to tender previously purchased
stock, in lieu of cash, for the purchase of the options and receive additional
options equal to the number of shares tendered.

      Non-Employee Director Stock Option Plan:

      The Company adopted a non-qualified stock option plan for all non-employee
Directors of the Company in October 1996. Each non-employee Director was granted
an initial 2,500 options on the date of adoption of the plan. These options are
exercisable in three equal annual installments commencing on the first
anniversary date subsequent to the grant. Additionally, each non-employee
Director was granted 1,250 options on each January 1, 1997 through 2000,
respectively. These additional options are exercisable in full on the first
anniversary date subsequent to the date of grant.


                                      F-14

<PAGE>

6.    Stock Option Plans: (Cont'd)

      A summary of the Company's various fixed stock option plans as of April
30, 2003 and 2002, and changes during the years then ended is presented below:

<TABLE>
<CAPTION>
                                                      Years Ended April 30,
                                           -------------------------------------------
                                                  2003                    2002
                                           --------------------   --------------------
                                                       Weighted               Weighted
                                                        Average                Average
                                                       Exercise               Exercise
      Fixed Stock Options                   Shares       Price     Shares       Price
      -------------------                  --------    --------   --------    --------
<S>                                         <C>        <C>         <C>        <C>
      Outstanding, beginning of year        142,340    $  15.13    120,975    $  14.90
      Granted                                41,800       15.70     35,090       15.94
      Exercised                              (1,700)      10.74     (5,500)      14.08
      Canceled                              (11,825)      13.97     (8,225)      16.02
                                           --------               --------

      Outstanding, end of year              170,615       15.39    142,340       15.13
                                           ========               ========

      Options exercisable at year end       170,615       15.39    142,340       15.13
                                           ========               ========

      Weighted average fair value of
         options granted during the year               $   5.56               $   5.35
                                                       ========               ========
</TABLE>

      The following table summarizes information about stock options outstanding
at April 30, 2003:

<TABLE>
<CAPTION>
                                          Options Outstanding                       Options Exercisable
                            -----------------------------------------------   -----------------------------
                                               Weighted
                                                Average          Weighted                        Weighted
                                               Remaining          Average                         Average
             Range of         Number          Contractual        Exercise        Number          Exercise
          Exercise Price    Outstanding          Life              Price       Outstanding         Price
        -----------------   -----------    -----------------   ------------  ----------------  ------------
<S>                           <C>                <C>              <C>               <C>           <C>
        $10.73 - $13.46        31,850            1.40             $11.71             31,850       $11.71
        $14.23 - $16.16       100,265            3.66             $15.44            100,265       $15.44
        $18.16 - $19.10        38,500            1.97             $18.30             38,500       $18.30
</TABLE>

      Shares reserved for future issuance at April 30, 2003 are comprised of the
following:


      Shares issuable upon exercise of stock options under the
         Company's Non-Employee Director Stock Option Plan        72,000

      Shares issuable under the Company's Non-Employee
         Director Stock Compensation Plan                         22,792

      Shares issuable upon exercise of stock options under
         the Company's stock incentive plan                      230,177
                                                                 -------

                                                                 324,969
                                                                 -------


                                      F-15

<PAGE>

6.    Incentive Stock Option Plan (Cont'd)

      In accordance with APB Opinion No. 25, no compensation expense has been
recognized for the employee stock option plans. Had the Company recorded
compensation expense for the employee stock options based on the fair value at
the grant date for awards in the years ended April 30, 2003 and 2002 consistent
with the provisions of SFAS No. 123, the Company's net income and net income per
share would have been adjusted to the following pro forma amounts:

                                                      2003          2002
                                                   -----------   -----------

      Net income, as reported                      $ 1,769,668   $    21,645
      Net income (loss), pro forma                   1,636,095      (134,935)
      Basic income per share, as reported                 1.59           .02
      Basic income (loss) per share, pro forma            1.47          (.11)
      Diluted income per share, as reported               1.58           .02
      Diluted income (loss) per share, pro forma          1.46          (.11)

      For the purposes of the pro forma presentation, the fair value of each
option grant is estimated on the date of grant using the Black-Scholes
option-pricing model. The following range of weighted-average assumptions were
used for grants during the fiscal years ended April 30, 2003 and 2002.

                                                         Years Ended
                                                            April 30,
                                                   -------------------------
                                                       2003          2002
                                                   -----------   -----------

      Dividend yield                                       0.0%          0.0%
      Volatility                                          47.0%         41.0%
      Risk-Free interest rate                              2.0%          4.0%
      Expected life                                     5 Years       5 Years

      Incentive Compensation Plan:

      The Company has an incentive compensation plan for all full-time employees
and members of the Board in order to promote shareholder value. The benefits of
the incentive compensation plan are realized only upon a change in control of
the Company. Change in control is defined as the accumulation by any person,
entity or group of 30% or more of the combined voting power of the Company's
voting stock or the occurrence of certain other specified events. In the event
of a change in control, the Company's plan provides for a cash payment equal to
the difference between the plan's "establishment date" price of $15.39 per share
and the per share price of the Company's common stock on the closing date,
equivalent to 100,000 shares of company common stock. The payment amount would
be distributed to eligible participants based upon their respective weighted
percentages (ranging from .5% to 18%).

7.    Loans Payable:

                                                            April 30,
                                                   -------------------------
                                                       2003          2002
                                                   -----------   -----------

      Term loan, bank (a)                          $   628,450   $   688,197
      Installment loans, other                          41,160        11,987
                                                   -----------   -----------

                                                   $   669,610   $   700,184
                                                   ===========   ===========


                                      F-16

<PAGE>

7.    Loans Payable: (Cont'd)

      (a) The loan required monthly installment payments of $9,643, including
interest at 8.45% per annum, until March 1, 2003 when the monthly installment
payments were adjusted to $8,704, including interest at 5.96%. The remaining
unpaid principal of approximately $470,000 is due in September 2005. The loan
provides for an adjustment to the fixed interest rate on every fifth anniversary
based upon the U.S. Treasury note rate. The loan is secured by the assignment of
rents and a first collateral mortgage on certain real estate. The Bank requires
compensating balances totaling 20% of the ending monthly balance of the loan to
be held in interest bearing and non-interest bearing deposit accounts.

      On May 29, 2003, the Company entered into a revolving line of credit
agreement with a new lending institution. The line of credit has a maximum
borrowing limit of $1,750,000, and bears interest at 1% above the prime-lending
rate (4.25% at April 30, 2003). The line is secured by certain real estate and
expires on June 1, 2006. Subsequent to year-end, proceeds from the line were
used to pay-off the balance of the outstanding bank term loan. As a result, the
term loan is not included in the following schedule of annual maturities of
loans payable.

      Annual maturities of loans payable is as follows:

                  Years Ending
                    April 30,                                   Amount
                  ------------                               ---------

                    2004                                     $  17,788
                    2005                                         9,810
                    2006                                         7,411
                    2007                                       630,279
                    2008                                         4,322
                                                             ---------

                                                             $ 669,610
                                                             ---------

8.    Sale of Real Estate:

      On August 8, 2002, the Company sold approximately twelve acres of property
and certain buildings with a carrying value of approximately $559,000 to an
existing tenant. The contract of sale amounted to $5,370,000 under which the
Company received a cash payment of approximately $3,600,000 and a three-year
mortgage for $1,800,000 with interest at 5%. The profit on the sale of the land
and buildings was $4,700,000 net of transaction costs of approximately $113,000.
Pursuant to Statement of Financial Accounting Standards No. 66, approximately
$1,570,000 of the gain on this sale has been deferred as of April 30, 2003. The
deferred gain will be recognized upon collection of the related mortgage
receivable.

9.    Stockholders' Equity:

      a.    Repurchase of common stock

            On April 12, 2002, the Company repurchased 111,000 shares of common
stock from one of its stockholders at a price of $20.25 per share. The par value
method of accounting is used for common stock repurchases. The excess of the
cost of shares acquired over their par value is allocated to paid-in capital
with the excess over market value charged to retained earnings.


                                      F-17

<PAGE>

9.    Stockholders' Equity: (Cont'd)

      b.    Stock dividend

            On April 15, 2002, the Company's Board of Directors declared a 10%
stock dividend payable on May 15, 2002 for shareholders of record as of May 1,
2002. A total of 100,646 shares of common stock were issued out of treasury in
connection with this dividend. The financial statements at April 30, 2002 give
effect to the dividend and reflect a reduction of treasury stock equal to the
fair value of the stock dividend of $2,038,082. All references in the
accompanying financial statements to the number of common shares and per share
amounts have been restated to reflect the stock dividend.

            In connection with the 10% stock dividend, a cash dividend of $8,397
was paid to stockholders for fractional shares.

            No dividends were declared during year-end April 30, 2003.

10.   Concentration of Credit Risk:

      Financial instruments, which potentially subject the Company to
concentrations of credit risk, consist principally of cash and cash equivalents
and long-term investments. The Company places its temporary cash investments
with high credit quality financial institutions and, by policy, limits the
amount of credit exposure in any one financial institution. The Company is
affected by the economics of the Citrus industry due to its investments therein.
Management does not believe significant credit risk exists at April 30, 2003.

11.   Supplemental Disclosures of Cash Flow Information:

                                                         Years Ended
                                                           April 30,
                                                   -------------------------
                                                       2003          2002
                                                   -----------   -----------
      Cash paid during the year for:
         Interest                                  $    60,049   $    61,520
                                                   ===========   ===========

         Income taxes                              $   270,000   $    88,359
                                                   ===========   ===========

12.   Commitments:

      a.    Lease commitments

            The future minimum revenues from rental property under the terms of
all noncancellable tenant leases, assuming no new or renegotiated leases are
executed for such premises, for future years are approximately as follows:

                Years Ending
                  April 30,
                -------------

                    2004                            $ 1,371,000
                    2005                                534,000
                    2006                                398,000
                    2007                                104,000


                                      F-18

<PAGE>

12.   Commitments: (Cont'd)

      b.    Employment agreements

            Effective January 23, 2003, the Company amended the existing
employment contracts with two officers, which provide for annual salaries
aggregating $362,000. The terms of the agreements were extended from one to
three years and provide for a severance payment equivalent to three years salary
in the event of a change in control.

      c.    Royalty agreement

            The Company is entitled to a 3% royalty on any revenues generated by
Aviodyne, Inc. as a result of the assets purchased from the Company. For the
years ended April 30, 2003 and 2002 no royalty payments had been earned.

      d.    Land development contract

            The Company has entered into a Golf Operating and Asset Management
Agreement (the "Agreement") with Landmark National ("Landmark") for the design
and development of an 18-hole championship golf course community. The Agreement
provides for Landmark to design, construct and mange the golf course and related
facilities, and to design and plan the proposed residential community. Fees for
Landmarks services is as follows:

            Golf course design and operations:

            o $5,000 per month, not to exceed $150,000, for the design of the
golf course and related facilities.

            o A $100,000 golf course grading plan fee after completion of the
grading plan.

            o If Landmark designs the golf course as a "Signature Landmark
Course," a one time licensing fee not to exceed $250,000 is due.

            o A monthly builders fee, upon commencement of construction of the
golf course, equal to 4.5% of the total cost of the golf course and related
facilities.

            o Upon commencement of the operations of the golf course, a $100,000
annual management fee.

      Residential Community Planning and Design:

      o $10,000 per month, not to exceed $300,000, for the design and planning
of the residential community.

      o $75,000 annual fee commencing upon the beginning of the operations,
sales and marketing phase of the residential community, and terminating upon the
sale of all building lots.

      Total Project:

      o A monthly builders fee, upon commencement of construction of the golf
course and the residential community, equal to 4.5% of the total construction
costs, as defined.

      o An incentive fee equal to 10% of the pre-tax income of the Project, as
defined.


                                      F-19

<PAGE>

12.   Commitments: (Cont'd)

      d.    Land development contract (Cont'd)

      Termination:

      Should the Company terminate the Agreement prior to completion without
cause, a termination fee is payable to Landmark as follows:

      a. $500,000 prior to the completion of the design and master plan phase of
the golf course and related facilities;

      b. $1,000,000 after the completion of the design and master plan phase of
the golf course and related facilities and prior to the opening of the golf
course to third parties;

      c. If termination occurs after the golf course and related facilities are
open for use by third parties a sum equal to 50% of the entire amount of
unearned fees that would have been earned by Landmark through the expiration
date of the agreement.

      The Agreement expires on April 9, 2017.

13.   Fair Value of Financial Instruments:

      The methods and assumptions used to estimate the fair value of the
following classes of financial instruments were:

      The carrying amount of cash, receivables and payables and certain other
short-term financial instruments approximate their fair value.

      The estimated fair value of the Company's investment in the Grove
Partnership at April 30, 2003, based upon an independent third party appraisal
report, is approximately $6,442,000 based on the Company's ownership percentage.

      The book value of the Company's loans payable approximates its fair value.

14.   Related Party Transactions:

      A law firm related to a director provided legal services to the Company
for which it was compensated approximately $119,000 and $309,000 for the years
ended April 30, 2003 and 2002, respectively.

15.   Major Customers:

      For the year ended April 30, 2003 rental income from three tenants
represented 17%, 13% and 11% of total rental income.

      For the year ended April 30, 2002 rental income from three tenants
represented 16%, 12% and 11% of total rental income.

      During the year, one of the Company's major tenants purchased land,
buildings, and improvements from the Company (see Note 7), therefore terminating
its lease agreement with the Company. Rental income from this tenant for the
years ended April 30, 2003 and 2002 was approximately $90,000 and $304,000,
respectively.


                                      F-20

<PAGE>

16.   Contingencies:

      In December 2002, the State University of New York at Stony Brook ("SUNY
Stony Brook") approached the Company with an interest in discussing the purchase
of all 314 acres that comprise the Company's real estate holding in New York.
Those discussions were eventually discontinued, as management did not believe
that the purchase price offered by SUNY Stony Brook was reflective of the
current value of the property.

      In April 2003, SUNY Stony Brook announced that the Board of Trustees of
the State University of New York had adopted a resolution, which empowered SUNY
Stony Brook to commence eminent domain proceedings to acquire the property. As
of June 20, 2003, SUNY Stony Brook has not announced any further actions.

      Management believes that the valuations of the property by SUNY Stony
Brook does not coincide with both our own and those of our independent outside
consultants, and condemnation at the property's highest and best use will
reflect the outside valuations that have been obtained. Management is confident
that the plan for a residential golf course community represents that highest
and best use.

17.   Prior Period Adjustment

      The accompanying financial statements have been restated to account for
the Company's limited partnership investment in Callery-Judge Grove, L.P. (the
"Grove") in accordance with EITF Topic D-46 "Accounting for Limited Partnership
Investments" and the guidance in paragraph 8 of SOP 78-9 "Accounting for
Investments in Real Estate Ventures," which requires the use of the equity
method for investments in limited partnerships, unless the investor's interest
is so minor that the limited partner has virtually no influence over partnership
operating and financial policies. In particular, EITF Topic D-46 notes that
practice generally has viewed investments of more than 3% to 5% to be more than
minor.

      The Company originally purchased its limited partnership interest in 1965
and received a 20% interest. Through April 30, 1995, the Company accounted for
this investment under the equity method. In Fiscal 1996, the Company changed its
accounting for this investment to the cost method. Management believed that the
cost method of accounting was more appropriate because the partnership agreement
had been amended to further limit the rights of the limited partners, the
Company's ownership interest had been diluted through capital calls that it did
not participate in and the Company had no influence over the partnership
operating and financial policies. The Company's ownership interest, as a result
of additional capital calls of the partnership, in which the Company did not
participate, has subsequently been diluted to 10.93%.

      The financial statements have been restated to conform with the guidance
of EITF Topic D-46 and paragraph 8 of SOP 78-9 as it pertains to investments in
limited partnerships, and specifically the practice of accounting for limited
partnership investments of more than 3% to 5% under the equity method of
accounting.

      Retained earnings at the beginning of fiscal 2001 have been reduced by
$1,030,104, net of income tax benefit of $555,000, to apply the use of the
equity method and write down the carrying value of the investment as a result of
cumulative losses of the Grove. The adjustment had no affect on the net income
for the years ended April 30, 2003 and 2002.


                                      F-21

<PAGE>

17.   Prior Period Adjustment (Cont'd)

      The effects of the restatement were as follows:

<TABLE>
<CAPTION>
                                                     2003                          2002
                                           --------------------------    --------------------------
                                                As                           As
                                            Previously        As         Previously         As
                                             Reported      Restated       Reported       Restated
                                             --------      --------       --------       --------
<S>                                         <C>           <C>            <C>            <C>
      At April, 30:

      Investment in the Grove Partnership   $ 1,585,104   $        --    $ 1,585,104    $        --
      Deferred Income Taxes                   2,416,000     1,861,000      1,196,000        641,000
      Retained Earnings                         213,346      (816,758)    (1,556,322)    (2,586,426)
</TABLE>


                                      F-22