# EDGAR Filing Document

**Accession Number:** 0001589061
**File Stem:** 0001437749-26-010078
**Filing Date:** 2026-3
**Character Count:** 380051
**Document Hash:** 435c3a9b732e3ed2119bbd8d624f4a42
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-26-010078.hdr.sgml**: 20260327

**ACCESSION NUMBER**: 0001437749-26-010078

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 69

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260327

**DATE AS OF CHANGE**: 20260327

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Gyrodyne, LLC
- **CENTRAL INDEX KEY:** 0001589061
- **STANDARD INDUSTRIAL CLASSIFICATION:** OPERATORS OF NONRESIDENTIAL BUILDINGS [6512]
- **ORGANIZATION NAME:** 05 Real Estate & Construction
- **EIN:** 463838291
- **STATE OF INCORPORATION:** NY
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-37547
- **FILM NUMBER:** 26807084

**BUSINESS ADDRESS:**
- **STREET 1:** 1 FLOWERFIELD, SUITE 24
- **CITY:** ST. JAMES
- **STATE:** NY
- **ZIP:** 11780
- **BUSINESS PHONE:** 631-584-5400

**MAIL ADDRESS:**
- **STREET 1:** 1 FLOWERFIELD, SUITE 24
- **CITY:** ST. JAMES
- **STATE:** NY
- **ZIP:** 11780

?xml version='1.0' encoding='ASCII'? gyrllc20251231_10k.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

**FORM 10-K**

**(Mark One)** 

---

| | |
|:---|:---|
| ☒ | **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**  |
|  | For the fiscal year ended **December 31, 2025** |

---

OR

---

| | |
|:---|:---|
| ☐ | **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**  |
|  | For the transition period from to . |

---

Commission file number: **333-191820**

**<u>GYRODYNE, LLC</u>**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| <u>**New York**</u> | 46-3838291 |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| **<u>1 FLOWERFIELD, SUITE 24, ST. JAMES, NY</u>** | **<u>11780</u>** |
| (Address of principal executive offices) | (Zip Code) |

---

Registrant's telephone number, including area code **(631) 584-5400**

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol** | **Name of each exchange on which registered** |
| Common shares of limited liability company interests, par value $1.00 per share | GYRO | Nasdaq Capital Market |

---

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all the reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such 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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

(Check One):

---

| | |
|:---|:---|
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Non-accelerated filer ☒ | Smaller reporting company ☒ |
|  | Emerging growth company ☐ |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ☐

------

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of common shares held by non-affiliates of the registrant on **<u>June 30, 2025</u>** was **$6,244,153**. The aggregate market value was computed by reference to the closing price on such date of the common shares as reported on the Nasdaq Stock Market. Common shares held by each executive officer and director and by each person who to the registrant's knowledge owns 5% or more of the outstanding voting stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

On March 27, 2026, 2,199,308 common shares of the Registrant were outstanding.

**DOCUMENTS INCORPORATED BY REFERENCE**: None

------

**<u>**TABLE OF CONTENTS** TO FORM 10-K</u>**

**<u>FOR THE YEAR ENDED DECEMBER 31, 2025</u>**

---

| | | |
|:---|:---|:---|
| <u>ITEM #</u>  |  | <u>PAGE</u> |
| PART I |  |  |
| 1. | &nbsp;&nbsp;&nbsp; Business. | 4 |
| 1A. | &nbsp;&nbsp;&nbsp; Risk Factors. | 16 |
| 1B. | &nbsp;&nbsp;&nbsp; Unresolved Staff Comments. | 30 |
| 1C. | &nbsp;&nbsp;&nbsp; Cybersecurity | 30 |
| 2. | &nbsp;&nbsp;&nbsp; Properties. | 31 |
| 3. | &nbsp;&nbsp;&nbsp; Legal Proceedings. | 32 |
| 4. | &nbsp;&nbsp;&nbsp; Mine Safety Disclosures. | 32 |
| PART II |  |  |
| 5. | &nbsp;&nbsp;&nbsp; Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. | 33 |
| 6. | &nbsp;&nbsp;&nbsp; Reserved. | 34 |
| 7. | &nbsp;&nbsp;&nbsp; Management's Discussion and Analysis of Financial Conditions and Results of Operations. | 34 |
| 7A. | &nbsp;&nbsp;&nbsp; Quantitative and Qualitative Disclosures about Market Risk. | 42 |
| 8. | &nbsp;&nbsp;&nbsp; Financial Statements and Supplementary Data. | 42 |
| 9. | &nbsp;&nbsp;&nbsp; Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. | 42 |
| 9A. | &nbsp;&nbsp;&nbsp; Controls and Procedures. | 42 |
| 9B. | &nbsp;&nbsp;&nbsp; Other Information. | 43 |
| PART III |  |  |
| 10. | &nbsp;&nbsp;&nbsp; Directors, Executive Officers and Corporate Governance. | 44 |
| 11. | &nbsp;&nbsp;&nbsp; Executive Compensation. | 46 |
| 12. | &nbsp;&nbsp;&nbsp; Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. | 49 |
| 13. | &nbsp;&nbsp;&nbsp; Certain Relationships and Related Transactions, and Director Independence. | 51 |
| 14. | &nbsp;&nbsp;&nbsp; Principal Accounting Fees and Services. | 51 |
| PART IV |  |  |
| 15. | &nbsp;&nbsp;&nbsp; Exhibits and Financial Statement Schedules. | 52 |
| 16. | &nbsp;&nbsp;&nbsp; Form 10K Summary. | 54 |
|  | &nbsp;&nbsp;&nbsp; Signatures | 55 |
|  | &nbsp;&nbsp;&nbsp; Exhibit Index | 56 |

---

------

**PART I**

Introduction:

When we use the terms "Gyrodyne," the "Company," "we," "us," and "our," we mean Gyrodyne, LLC and all entities owned or controlled by us, including non-consolidated entities. References herein to our Annual Report are to this Annual Report on Form 10-K for the year ended December 31, 2025. References to "common shares" in this report refer to Gyrodyne, LLC's common shares representing limited liability company interests. References to the "Board" in this report refer to the Board of Directors of Gyrodyne, LLC.

All references to 2025 and 2024 refer to our fiscal years ended or the dates, as the context requires, December 31, 2025 and December 31, 2024, respectively.

**Item 1. Business.**

**Overview**

Gyrodyne, LLC (including its subsidiaries, "Gyrodyne", the "Company" or the "Registrant") is a limited liability company formed under the laws of the State of New York whose primary business is the management of a portfolio of medical office and industrial properties and the pursuit of entitlements on such properties located in Suffolk ("Flowerfield") and Westchester ("Cortlandt Manor") Counties, New York.

Substantially all of our developed properties are subject to leases in which the tenant reimburses the Company for a portion, all of or substantially all of the costs and/or cost increases for utilities, insurance, repairs, maintenance and real estate taxes. Certain leases provide that the Company is responsible for certain operating expenses.

Gyrodyne's corporate strategy is to enhance the value of Flowerfield and Cortlandt Manor by pursuing entitlement opportunities to provide purchasers increased development flexibility, and by enhancing the value of our leases. The Board and Management believe the aforementioned strategy will increase the aggregate value for such properties as a whole. The value of the real estate reported in the consolidated statement of net assets as of December 31, 2025 and December 31, 2024 includes some, but not all of the potential value impact that may result from such value enhancement efforts. There can be no assurance that our value enhancement efforts will result in property value increases that exceed the costs we incur in such efforts, or even any increase at all.

Our efforts to generate the highest values for Flowerfield and Cortlandt Manor may involve in limited circumstances other strategies to manage risk and or enhance the net value of Flowerfield and Cortlandt Manor to maximize the returns for our shareholders. Gyrodyne intends to dissolve after we complete the disposition of all of our real property assets, apply the proceeds of such dispositions first to settle any debts and claims, pending or otherwise, against Gyrodyne, and then pay distributions to holders of Gyrodyne common shares. The process of seeking entitlements and the amount and timing of distributions from proceeds of asset sales involve risks and uncertainties. As such, it is impossible at this time to determine with certainty the ultimate amount of proceeds that will actually be distributed to our shareholders or the timing of such payments. Accordingly, no assurance can be given that the distributions will equal or exceed the estimate of net assets presented in our consolidated statements of net assets. The actual nature, amount and timing of all distributions will be determined by Gyrodyne's Board in its sole discretion and will depend in part upon the Company's ability to convert our remaining assets into cash in compliance with our obligations under the Stipulation entered into in connection with a class action lawsuit settled in 2015 and satisfy our remaining liabilities and obligations. Under Gyrodyne's Amended and Restated Limited Liability Company Agreement (the "LLC Agreement"), such dissolution may be effected upon an election to dissolve the Company by the Board that is approved by the vote of holders of a majority of Gyrodyne common shares or, in the Board's sole discretion and without any separate approval by the holders of Gyrodyne common shares, at any time the value of Gyrodyne's assets, as determined by the Board in good faith, is less than $1,000,000.

We remain committed to (1) enhancing the net value of Flowerfield and Cortlandt Manor to maximize the returns for our shareholders, (2) completing the disposition of our assets, (3) making timely distributions to our shareholders, (4) managing capital and liquidity, (5) mitigating risks relating to interest rates and real estate cycles and (6) completing the liquidation of the Company.

The Company's remaining real estate investments, each of which is held in a single asset limited liability company wholly owned by the Company, consist of:

● Cortlandt Manor: 13.8 acres in Cortlandt Manor, New York, including the 31,000 square foot Cortlandt Medical Center; and

● Flowerfield: 63 acres in St. James, New York, including a 14-acre multi-tenanted industrial park comprising 135,000 rentable square feet.

------

**Strategic Plan to Enhance Property Values, Liquidate, Distribute Proceeds and Dissolve**

Our corporate strategy is to pursue entitlements on our two remaining properties so that they can be sold to one or more developers with increased development flexibility and thus maximize value and distributions to our shareholders. Gyrodyne intends to dissolve after we complete the disposition of all of our real property assets, apply the proceeds of such dispositions first to settle any debts and claims, pending or otherwise, against Gyrodyne, and then pay liquidating distributions to holders of Gyrodyne common shares. We are unable to predict the precise nature, amount or timing of such distributions. To accomplish our goal of maximizing asset values and distributions to our shareholders, the Company's plan consists of:

● managing the real estate portfolio to improve operating cash flow while simultaneously increasing the market values of the underlying properties;

● managing the strategic sale of real estate assets;

● pursuing the entitlement efforts of the Flowerfield and Cortlandt Manor properties, to increase development flexibility;

● focusing use of capital by the Company to preserve or improve the market value of the real estate portfolio;

● ensuring sufficient capital to operate through a position of strength through the duration of the liquidation to negotiate and enforce purchase agreements and defend our property rights in the Article 78 Proceeding and in any other such proceeding that may arise; and

● balancing working capital and funds available for the entitlement process.

Gyrodyne's strategy is to enhance the value of Flowerfield and Cortlandt Manor by pursuing entitlement opportunities to provide purchasers with increased development flexibility, and by enhancing the value of our leases. The Company believes the aforementioned strategy will increase the aggregate value for such properties as a whole. The value of the real estate reported in the consolidated statement of net assets as of December 31, 2025 includes some but not all of the potential value impact that may result from such value enhancement efforts. There can be no assurance that our value enhancement efforts will result in property value increases that exceed the costs we incur in such efforts, or even any increase at all. Our efforts to generate the highest values for Flowerfield and Cortlandt Manor may involve, in limited circumstances, strategies to manage risk and or enhance the net value of Flowerfield and Cortlandt Manor to maximize the returns for our shareholders.

Sales of properties by Gyrodyne could take the form of individual sales of assets, sales of groups of assets, a single sale of all or substantially all of the assets or some other form of sale. The assets may be sold to one or more purchasers in one or more transactions over a period of time.

A sale of substantially all of the assets of the Company would require shareholder approval under New York law. However, in the event of the sale of individual properties, that do not constitute substantially all of the Company's assets, it is not required or anticipated that any shareholder votes will be solicited. The prices at which the various assets may be sold depend largely on factors beyond our control, including, without limitation, the condition of financial and real estate markets, the availability of financing to prospective purchasers of the assets, regulatory approvals, public market perceptions, and limitations on transferability of certain assets.

On March 30, 2022, the Town of Smithtown Planning Board (the "Planning Board") voted four to zero with one abstention to grant Gyrodyne's application for preliminary approval to divide the Flowerfield property into eight lots, subject to certain conditions (the "Flowerfield Subdivision Application"). See, "*Property Value Enhancement* – *Flowerfield*" for a description of the subdivision application.

On April 26, 2022, the Incorporated Village of Head of the Harbor and certain other parties (collectively, the "Petitioners") commenced a special proceeding under Article 78 of New York's Civil Practice Law & Rules (the "Article 78 Proceeding") against the Town of Smithtown and certain other parties, including Gyrodyne, seeking to annul the Planning Board's determinations relating to the Flowerfield Subdivision Application. Specifically, the petition commencing the Article 78 Proceeding (the "Petition") seeks to annul the Planning Board's (i) approval of a findings statement pursuant to the State Environmental Quality Review Act ("SEQRA"), dated September 16, 2021, and adopted by the Planning Board on March 30, 2022, concerning the Flowerfield Subdivision Application, and (ii) preliminary approval on March 30, 2022 of the Flowerfield Subdivision Application. The arguments made in the Petition are substantially similar to those made by opponents of the Flowerfield Subdivision Application during the SEQRA and subdivision process. Gyrodyne and the Town of Smithtown are vigorously defending the Planning Board's determinations against the Petition. In June 2022, Gyrodyne and the Town of Smithtown filed motions to dismiss the Petition. During the third quarter of 2023, the Article 78 Proceeding was re-assigned to a different judge for the second time. On February 6, 2024, the Supreme Court of the State of New York, Suffolk County issued an order (the "Order"), denying the Motions in part and granting them in part. Specifically, the Order (i) denied the Motions as to three individual Petitioners and the St. James-Head of the Harbor Neighborhood Preservation Coalition, Inc., (ii) granted the Motions as to the remaining twenty (20) individual Petitioners and the Village of Head of the Harbor, (iii) denied the branch of Gyrodyne's motion alleging that Petitioners failed to state a claim. On October 11, 2024, the Supreme Court of the State of New York issued a ruling in favor of the Company dismissing the Petition in its entirety. On October 28, 2024, the Company received a notice of appeal filed by the petitioners in this proceeding seeking to appeal the court's dismissal of the Petition, citing as grounds for appeal "whether the court erred in denying the petition and dismissed the Article 78 Proceeding, and any and all other issues which may arise upon further review of the record on appeal".

------

On November 12, 2024, the petitioners filed a notice of motion to renew and reargue, seeking to have the court direct the respondents to undertake a supplemental environmental impact statement to address retaining of storm water at the property being developed in light of a recent storm, and to annul the resolution approving the preliminary site plan.

On March 17, 2025, the Supreme Court of the State of New York, Suffolk County issued an order denying the appellants motion to stay enforcement of the order, pending hearing and determination of appeal. On March 21, 2025, the Supreme Court of the State of New York, Suffolk County issued an order denying the Petitioners motion to renew and reargue. On April 16, 2025 the Petitioners filed a notice of appeal seeking to appeal the March 17, 2025 order denying the appellants motion to stay enforcement of the order dismissing the Petition pending the appeal.

On April 28, 2025 the Petitioners perfected their appeal on the original Petition (the "Appeal"). The Petitioners' memorandum of law largely repeats their earlier position and arguments, which the Supreme Court previously found to be an insufficient basis for overturning the Planning Board's determinations. Gyrodyne filed its response to the Appeal on July 25, 2025, and the Town submitted its reply to the Appeal on July 28, 2025.

Pleadings filed in the Article 78 Proceeding may be accessed through a link (and related instructions) to the New York State Unified

Court System which appears on the Company's website at https://www.gyrodyne.com.

Gyrodyne remains confident in its defense of the appeal, the motion to renew and reargue and the motion to appeal the denial of the Petitioners' motion to stay enforcement of the order. Gyrodyne believes that both the Article 78 Proceeding and the process of negotiating purchase agreements, securing final subdivision approval and final unappealable site plan approval and consummating the sale of our properties will extend into 2028, although there can be no assurance that Gyrodyne and the Town of Smithtown will be successful in the defense of the appeal and any other motions or that other factors beyond our control will not necessitate a further extension of the timeline.

The estimated timeline assumes that Flowerfield is not sold until the culmination of the Article 78 Proceeding. The developed portion of Flowerfield, situated on two separate lots, may be sold together or separately upon the resolution of the Article 78 Proceeding and the filing of the final subdivision map without site plan approval.

On March 20, 2023, the Town of Cortlandt Town Board adopted the SEQRA CM findings statement and approved local law establishing the Medical Oriented Zoning District (the "MOD") which includes Gyrodyne's Cortlandt Manor property. Pursuant to the adopted MOD, Gyrodyne received designation for total density of 154,000 square feet to be comprised of 150,000 square feet of medical use and 4,000 square feet of retail use (lot lines and their respective density could change until formal subdivision, if any, occurs).

Various other factors will continue to impact the timeline to achieve approvals, including the backlog of land use applications, zoning authority labor shortages and environmental concerns. Nevertheless, we will continue to market the properties and, although there can be no assurances, the Company believes subdivision approval will be received in the third quarter of 2026 for Flowerfield, and in 2027 for Cortlandt Manor.

On July 30, 2025, GSD Flowerfield LLC, a *New* York limited liability company ("GSD") wholly-owned by the Company, entered into a Purchase and Sale Agreement (as amended, the "B2K Agreement") for the sale of an approximately 49 acre parcel of vacant land to B2K Smithtown LLC ("B2K"), an affiliate of B2K Development LLC, which property forms a portion of the Company's Flowerfield complex in St. James, New York, for a purchase price of between $24,000,000 and $28,740,000, subject to conditions and contingencies set forth in the B2K Agreement. Included among the conditions set forth in the B2K Agreement is receipt of subdivision and site plan approval. Based on the terms of the B2K Agreement, we estimate the gross value of the B2K Agreement is $28,740,000, contingent on a pending site plan submission, which we believe will be approved by the Smithtown Planning Department. Under the terms of the B2K Agreement, the Company is required to issue B2K a credit at closing for the industrial park's proportionate share of costs for a sewer treatment plant ("STP") and on-site infrastructure costs aggregating $4,020,222, which is included in the Company's estimated costs in excess of receipts. The incremental value impact, if any, to the industrial building lots associated with access to an on-site STP is not estimable at this time as it is contingent on many unknown factors, including but not limited to the markets assessment of the probability of closing of the B2K transaction, timing for completion of the STP, and the future associated market demand for suite usage requiring an STP amenity.

We anticipate that future purchase agreements for Flowerfield or Cortlandt or any portions thereof will similarly identify receipt of subdivision and site plan approval as conditions to closing which the Company believes can be pursued simultaneously rather than sequentially.

Consistent with the Company's plan of liquidation the Company continues to engage JLL to sell the remaining Flowerfield and Cortlandt Manor properties as individual lots or combined. In addition, Gyrodyne would entertain offers for the acquisition of the Company itself if we believe such acquisition from a timing and value perspective would maximize the net assets in liquidation value for Gyrodyne's shareholders.

------

Assuming the process of seeking entitlements and selling assets is completed in 2028 and giving effect to the estimated cash flows from the operation of our existing properties, we expect that Gyrodyne will have a cash balance of approximately $25.9 million, prior to any future special distributions based on the estimate of net assets in liquidation presented in our Consolidated Statements of Net Assets. Such cash would equate to future distributions of $11.76 per share based on Gyrodyne having 2,199,308 common shares outstanding. These estimated distributions are based on values and outstanding share numbers effective as of December 31, 2025 and include some but not all of the potential value that may be derived from the entitlement efforts.

The Consolidated Statements of Net Assets are based on certain estimates. Uncertainties as to the precise value of our non-cash assets and the ultimate amount of our liabilities make it impracticable to predict the aggregate net value ultimately distributable to shareholders in a liquidation. Land entitlement costs, claims, liabilities and expenses from operations, including, but not limited to, operating costs, salaries, real estate taxes, payroll and local taxes, legal, accounting and consulting fees and miscellaneous office expenses, will continue to be incurred during our process of seeking entitlements and selling assets, which includes certain enhancement efforts. Such expenses, if exceeding our estimates, will reduce the amount of assets available for ultimate distribution to shareholders.

The Company intends to seek to modify one or more of its existing loan facilities to strengthen its financial position through the end of 2028, the forecasted completion of the liquidation process. The Company's goal with respect to any such modification is for its current cash and cash equivalent position post-loan modification to be adequate to fund our process of seeking entitlements and selling assets through such forecasted liquidation completion date. Management believes the Company will need additional capital to properly fund operations through the end of 2028 absent sufficient working capital raised through the combination of property sales or the modification of its existing credit facilities and or new credit facilities, or other alternative capital raising strategies. There can be no assurance, however, that the Company will be successful in securing any such loan modification/ and/or new credit facilities on terms that are satisfactory to the Company or on any terms at all or achieve a timely closing on the sale of a property to address its working capital needs. If such available cash and amounts received on the sale of assets are not adequate to provide for our obligations, liabilities, expenses and claims, distributions of cash and other assets to our shareholders would be eliminated. In the event our shareholders receive distributions from Gyrodyne and there are insufficient funds to pay any creditors who seek payment of claims against Gyrodyne, shareholders could be held liable for payments made to them and could be required to return all or a part of the distributions made to them.

**Property Value Enhancement**

The Company is pursuing entitlements to increase the development flexibility of its Flowerfield and Cortlandt Manor properties. During the year ended December 31, 2025, the Company incurred approximately $380,000 of land entitlement costs, consisting primarily of engineering costs, legal fees and real estate taxes to support the Company's respective entitlement efforts. We estimate that the Company may incur approximately $1.3 million in additional land entitlement costs through December 31, 2028 in pursuit of entitlements (approximately $331,000 in Cortlandt Manor and $995,000 in Flowerfield).

The Company is focusing its resources on positioning the properties to be sold with all entitlements to achieve increased development flexibility in the shortest period of time with the least amount of risk to the Company. Because of the vagaries of the real estate market, however, there can be no assurance that our value enhancement efforts will result in property value increases that exceed the costs we incur in such efforts, or even any increase at all. During the process of pursuing such entitlements, the Company may entertain offers from potential buyers who may be willing to pay prices for the properties on an "as is basis" that the Company finds more attractive from a timing or value perspective than values we believe may be reasonably achievable through completing the entitlement process ourselves.

***Cortlandt Manor***. On March 15, 2016, the Town of Cortlandt Manor (the "Town") adopted a 2016 Sustainable Comprehensive Plan (the "Plan") of which one key strategy was the recommendation of a MOD. The purpose of the proposed MOD is to expand the Town's existing medical infrastructure and encourage economic development, including capital investment, job creation and housing options. The MOD would allow for a continuum of care, i.e., independent living, assisted living and nursing/hospital care, within or in neighboring facilities by centralizing medical services and related activities. As a designated zoning district, the MOD could include hospital, ambulatory surgery, primary and urgent care, hospice, laboratories, social services, boutique hotels, retail and a wide range of housing.

The Company's existing 31,421 square foot Cortlandt Medical Center, situated on 13.8 acres, is located directly opposite New York Presbyterian's Hudson Valley Hospital Center and within the boundaries of the MOD. The Company has committed resources toward both market research and feasibility studies in support of achieving entitlements to maximize the value of the property. For approximately nine years the Company along with its planner and engineers have been working closely with the Town to help plan the MOD, identify issues and solutions involved in creating the Plan and more specifically, the MOD.

------

On March 31, 2017, The Company filed an application with the Town to develop the Cortlandt Manor property, as follows:

---

| | |
|:---|:---|
| SUBDIVISION LOT # | BUILDING SIZE/YIELD |
| Medical office | 100,000 sft |
| Multi-family apartments | 200 units |
| Retail | 4,000 sft |

---

In response to the extensive public comments and Town Board input received during the State Environmental Quality Review "(SEQR") Draft Generic Environmental Impact Statement ("DGEIS") public hearing process, the Company amended the site plan and subdivision application with the Town to develop the Cortlandt Manor property as follows:

---

| | |
|:---|:---|
| SUBDIVISION LOT # | BUILDING SIZE/YIELD |
| Medical office Lot #1 | 100,000 sft |
| Retail (Lot #1) | 4,000 sft |
| Medical Office Lot #2 | 84,600 sft |

---

As a property owner with eligible parcels in this district, Gyrodyne submitted an Environmental Assessment Form to the Town of Cortlandt Planning Department in December 2017 to support its application to receive a MOD campus designation. Once designated, the parcels would be governed by the use, dimensional and other provisions of the MOD zoning regulations and MOD zoning would replace the existing zoning. While the MOD zoning had not been formally adopted, Gyrodyne was proposing a two-phase medical office campus with limited retail and has designed the site to function as part of a future "hamlet center" with streetscape improvements. The existing medical office space will remain operational until phase 2 is implemented.

In addition to the primary proposal noted above, an alternate mixed-use plan was submitted as part of the SEQRA process. The alternate mixed-use plan included the following:

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp; SUBDIVISION LOT # | BUILDING SIZE/YIELD |
| &nbsp;&nbsp;&nbsp; Medical office Lot #1 | 83,500 sft |
| &nbsp;&nbsp;&nbsp;Retail (Lot #1) | 1,500 sft |
| &nbsp;&nbsp;&nbsp; Multi-Family Residential Lot #2 | 160 Units |

---

The alternate was reviewed for all categories of impacts in the SEQRA documentation similar to the primary proposal, and if approved as anticipated, would have allowed Gyrodyne the option to proceed with either program following MOD designation and subdivision. The alternate was not anticipated to impact the estimated timeline of approvals.

The Town of Cortlandt Planning Department hosted two public community outreach meetings in June and August 2018 where the Company presented its development plan for the Cortlandt Manor property. As anticipated, on August 7, 2018, the Town Board formally issued a "positive declaration" under the SEQRA, i.e., a declaration that the project may result in one or more significant environmental impacts and will require the preparation of an Environmental Impact Statement ("EIS"), the scope of which was also adopted. On August 28, 2018, the Town filed the Scope for a DGEIS with input from Gyrodyne for both the MOD zoning and the proposed uses so that upon adoption, minimal further SEQRA review (other than site plan review) should be required to develop the property. On September 17, 2019, the Town of Cortlandt Town Board as Lead Agency under SEQR adopted a resolution accepting the DGEIS as complete for public review. The Town of Cortlandt Town Board hosted two public hearings on the DGEIS on November 19, 2019 and January 14, 2020. The Town of Cortlandt Planning Board extended the public comment period 90 days with the next public hearing scheduled for April 14, 2020. As a result of the New York State's stay-at-home-order issued in March 2020, the April 14, 2020 public hearing was postponed to June 2020. The public hearing was then held on June 16, 2020 on a virtual platform. The Town closed the public comment period on June 30, 2020 and proceeded to review the public comments and prepare the Final GEIS ("FGEIS"). The FGEIS reflects the Cortlandt Manor property's proposed uses comprising 184,600 square feet of medical office space and 4,000 square feet of retail space (together with an Alternate Mixed-Use Plan). A Town Board work session was conducted March 7, 2022 for the primary purpose of having stakeholders present their current development programs for the benefit of the new Town Board members elected in November 2021. Although not required by SEQRA, the Town Board conducted another public hearing on May 2, 2022 and closed the hearing that evening while leaving the public comment period open for twenty days. The additional public comments were reviewed and required formal written responses by stakeholders including Gyrodyne. The Cortlandt Manor Town Board held a public work session on October 24, 2022. During late 2022, the Company's management team, based on discussions with the Town of Cortlandt, amended its mixed-use campus to reflect the following:

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp; SUBDIVISION LOT # | BUILDING SIZE/YIELD |
| &nbsp;&nbsp;&nbsp; Medical office Lot #1 | 100,000 sft |
| &nbsp;&nbsp;&nbsp;Retail (Lot #1) | 4,000 sft |
| &nbsp;&nbsp;&nbsp; Medical office (inclusive of the existing operating building) Lot #2 | 50,000 sft |

---

\*Lot lines could change until formal subdivision occurs.

------

On March 20, 2023, the Town of Cortlandt Town Board adopted the SEQRA Findings Statement and local law establishing the MOD designation for the property reflecting a total density of 154,000 square feet to be comprised of 150,000 square feet of medical use, inclusive of the existing medical office square footage but excluding non-rentable spaces, and 4,000 square feet of ancillary retail (lot lines and their respective density could change until formal subdivision occurs). The Company does not plan on developing the property. The Company believes, contingent on the timing for entering contracts (which we anticipate will include closing terms conditioned upon receiving site plan approval), the subdivision and site plan approval could be received in mid-2027.

The entitlement costs for the year ended December 31, 2025 associated with the ownership and development of this property were approximately $79,100.

***Flowerfield***. Following market research and related feasibility studies, we identified the entitlements that we believed will maximize the value of Flowerfield in the shortest amount of time with the lowest amount of risk. The Company has been in discussions with the Town of Smithtown on the potential real estate development projects identified by the market research and feasibility studies, all of which currently fall within our "as of right to build" zoning. We are also exploring with the Town of Smithtown whether it would be amenable to certain entitlements, special permits, or other concessions that would allow for the identified development projects.

In March 2017, the Company filed a pre-subdivision application with the Town of Smithtown (the "Pre-application") for the Flowerfield property along with the previously sold (2002) catering hall facility for an eight-lot subdivision which the Town of Smithtown initially determined must be processed as a nine-lot subdivision in response to certain comments received from the planning department. The final accepted FEIS (in 2021) included an eight-lot subdivision. In June 2017, the Company filed a subdivision application with the Town of Smithtown based on feedback provided by the Town of Smithtown staff in the pre-application process. Because of the property's location within 500 feet of a municipal boundary and a state road, the Town of Smithtown referred the Company's subdivision application to the Suffolk County Planning Commission as required by the Suffolk County Administrative Code and the New York State General Municipal Law.

On August 2, 2017, the Suffolk County Planning Commission voted 11-0 to approve Gyrodyne's subdivision application without conditions. Although the approval by the Suffolk County Planning Commission is not binding on the Town of Smithtown, the approval without conditions means that the requisite vote threshold for the application at the Town of Smithtown's Planning Board is a simple majority.

On November 15, 2017, the Town of Smithtown Planning Board conducted a public hearing in which the Company presented its subdivision plan for the Flowerfield property. On April 11, 2018, the Planning Board determined that the subdivision plan may result in one or more significant environmental impacts which will require the preparation of an EIS. As a result, at the April 11, 2018 Planning Board meeting, the Planning Board issued a SEQRA Positive Declaration, which was rescinded and re-issued by Planning Board Resolution dated May 9, 2018 that included a draft scope and a request for public comments on the scope (i.e., a public scoping process). The then current Town Planning Board Chairman communicated that a Positive Declaration would require up to one year to complete the SEQRA process. The Town issued the Final Scope on July 7, 2018. On August 15, 2018, the Company submitted the Draft EIS to the Town of Smithtown Planning Department prior to the public hearing. The Company received comments on its EIS at the end of the third quarter of 2018 and submitted its response to the Town of Smithtown Planning Department on February 15, 2019. On May 24, 2019, the Company received additional comments on its EIS and submitted its responses to the Town on June 4, 2019. On July 3, 2019, the Company received additional comments on its EIS and submitted its response to the Town of Smithtown Planning Department on August 28, 2019. On September 24, 2019, the Company received additional comments on its EIS and submitted its response to the Town of Smithtown Planning Department on October 25, 2019. The Town of Smithtown Planning Board as Lead Agency under SEQRA adopted a resolution accepting the DEIS as complete for public review on December 11, 2019 and announced a public comment period that closed on January 24, 2020. Furthermore, the Town Planning Board held and closed the public hearing for the DEIS on January 8, 2020. Following the closing of the public comment period, the Company received a copy of the public comments in February 2020. The Company reviewed the public comments and responded by submitting a Final EIS ("FEIS") on April 20, 2020. Following the receipt of additional comments on May 29 and June 9, 2020, the Company filed its FEIS on July 24, 2020. Following State DOT comments received July 31, 2020 and Town comments dated August 21, 2020, the Company filed a revised FEIS on September 16, 2020 and received new comments on October 16, 2020. The Company filed a revised FEIS on October 29, 2020. Upon addressing final Town comments received December 4, 2020, the Company filed its Final FEIS on December 9, 2020 reflecting an eight-lot subdivision. The FEIS was accepted by the Town Planning Board on March 10, 2021. Following a public comment period that closed on March 31, 2021, the Town of Smithtown forwarded the public comments and the FEIS to the Suffolk County Planning Commission. On May 5, 2021, the Suffolk County Planning Commission voted 5 to 4 to approve the application as a matter for local determination. Based on the fact that less than a majority of the 18 total members (10 members needed) voted to either approve or deny the application, the application is deemed approved as a matter for local determination. Thus, the Smithtown Planning Board may act and approve the matter with a simple majority vote. On September 20, 2021, the Town of Smithtown Conservation Board voted unanimously to recommend the Town of Smithtown Planning Board issue a SEQRA Negative Declaration, Determination of Non -Significance (an environmental Impact Statement is not necessary based on certain stated reasons and approve the Subdivision Application (eight lots inclusive of the lot for the proposed sewage treatment plant). On March 30, 2022, the Smithtown Planning Board voted four to zero with one abstention to adopt the Findings Statement by resolution, closing SEQR and held a public hearing for the approval of the Preliminary Subdivision at the same meeting. Approval of the Preliminary Subdivision was granted at that meeting. Technical comments on the Final Subdivision Plans received from the Suffolk County Department of Health Services and Suffolk County Department of Public Works on March 10, 2025, New York State Department of Environmental Conservation Wetland Permit issued on October 28, 2024, and New York State Department of Transportation plans are being submitted for NYS 25A-Stony Brook Road in March 2025 (no prior design comments) and prepared for resubmission to each agency for their final review and approvals. On April 28, 2025 the Petitioners perfected their appeal on the original Petition. The Petitioners' memorandum of law largely repeats their earlier position and arguments, which the Supreme Court previously found to be an insufficient basis for overturning the Planning Board's determinations. Gyrodyne filed its response to the Appeal on July 25, 2025 and the Town submitted its reply to the Appeal on July 28, 2025.Final Subdivision approval is expected in the third quarter 2026.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

------

The entitlement costs for the year ended December 31, 2025 associated with the ownership and development of this property consisting of architectural and engineering costs, legal expenses, economic analysis, soil management and surveys were approximately $301,300.

While we cannot predict the outcome of the subdivision application, we undertook to subdivide the Flowerfield property in a manner that we believed will result in increased development flexibility in the shortest amount of time and limited risk (i.e., included in our subdivision application is the separation of the existing industrial buildings into two separate lots which upon resolution of the Article 78 Proceeding and final subdivision approval will allow us to sell the two lots together or separately, without any site plan approval). There can be no assurance, however, that our value enhancement efforts will result in property value increases that exceed the costs we incur in such efforts, or even any increase at all. The pandemic has negatively impacted demand for office (including medical office) and hotel development "on spec".

**Healthcare Industry** 

The delivery of the majority of healthcare services requires real estate. The global outbreak of COVID-19 further validated this, as hospitals and other healthcare facilities during the pandemic were proven invaluable. As a consequence, healthcare providers depend on real estate to maintain and grow their businesses. We believe that the healthcare real estate market provides investment opportunities due to the:

● compelling demographics driving the demand for health services;

● specialized nature of healthcare real estate investing; and

● consolidation of the fragmented healthcare real estate sector.

Our tenants in our Cortlandt Manor property are healthcare service providers. Furthermore, the Company's previous expansion of its leasing relationship with Stony Brook University ("SBU"), SBU Hospital and affiliates of SBU Hospital at our Flowerfield property increased its exposure to the healthcare industry. The healthcare industry is subject to substantial regulation and faces increased regulation particularly relating to fraud, waste and abuse, cost control and healthcare management. The healthcare industry may experience a significant expansion of applicable federal, state or local laws and regulations, previously enacted or future healthcare reform, new interpretations of existing laws and regulations or changes in enforcement priorities, all of which could materially impact the business and operations of our tenants and therefore the marketability of our properties.

Our healthcare tenants are subject to extensive federal, state, and local licensure laws, regulations and industry standards governing business operations, the physical plant and structure, patient rights and privacy and security of health information. Our tenants' failure to comply with any of these laws could result in loss of licensure, denial of reimbursement, imposition of fines or other penalties, suspension or exclusion from the government sponsored Medicare and Medicaid programs, loss of accreditation or certification, or closure of the facility. In addition, efforts by third-party payors, such as the Medicare and Medicaid programs and private insurance carriers, including health maintenance organizations and other health plans, impose greater discounts and more stringent cost controls upon healthcare provider operations (through changes in reimbursement rates and methodologies, discounted fee structures, the assumption by healthcare providers of all or a portion of the financial risk or otherwise). Our tenants may also face significant limits on the scope of services reimbursed and on reimbursement rates and fees, all of which could impact their ability to pay rent or other obligations to us. Referral sources, including physicians and managed care organizations, may change their lists of hospitals or physicians to which they refer patients. Competition and loss of referrals could adversely affect our tenants' ability to make rental payments, which could adversely affect our rental revenues. Any reduction in rental revenues resulting from the inability of our medical office buildings and our tenants to compete successfully may have an adverse effect on our business, financial condition and results of operations and our ability to make distributions to our shareholders.

**Real Estate**

The Company owns properties in St. James and Cortlandt Manor, New York.

***St. James, New York***. In St. James, New York, the Company owns a 63-acre site called Flowerfield, primarily zoned for light industry, which is located approximately 50 miles east of New York City on the North Shore of Long Island in the Town of Smithtown. Flowerfield's location places it in Hydrogeologic Zone VIII**,** one of the most liberal with respect to effluent discharge rates. As of December 31, 2025, there were 28 tenants, including four tenants under month-to-month commitments, comprising 32 leases. The annual base rent at Flowerfield based on the rates in effect as of December 2025 is approximately $1,469,000 which included month-to-month annualized base rent of approximately $149,000 on 11,183 square feet. The occupancy rate was 82% as of December 31, 2025.

------

***Cortlandt Manor, New York***. In Cortlandt Manor, New York, the Company owns 13.8 acres inclusive of the 31,421 square foot Cortlandt Medical Center. The property is located directly opposite New York Presbyterian's Hudson Valley Hospital Center and within the boundaries of the proposed MOD. The property consists of five office buildings. As of December 31, 2025, there were three tenants, comprising three leases. The annual base rent based on the rates in effect as of December 2025, is approximately $872,000. The property was 82% occupied as of December 31, 2025.

**Lingering Pandemic Effects and Macroeconomics**

The COVID-19 pandemic has also adversely impacted, and may continue to impact adversely, the timeliness of local government in granting required approvals, as state and local staff charged with processing our subdivision applications all postponed activity due to work-from-home transitions. Accordingly, COVID-19 has caused, and may continue to cause, the completion of important stages in our efforts to secure entitlements to be delayed. The pandemic has also resulted in a significant shift toward commercial acceptance of remote working and telemedicine which has adversely impacted the occupancy rate and average rate per square foot, although medical office has faced less of a challenge from work-from-home shifts. Furthermore, the residual effects of the pandemic continue to negatively impact demand for real estate development projects "on spec".

We are affected by the fiscal and monetary policies of the United States Government and its agencies, including the policies of the Federal Reserve, which regulates the supply of money and credit in the United States. The combination of elevated interest rates and persistent inflation (or the perception that any of these events may continue) have contributed to continued weakness in commercial real estate markets, including in those real estate markets in which we operate. Changes in fiscal and monetary policies are beyond our control and are difficult to predict. Although the Federal Reserve decreased the federal funds rate multiple times in 2024 and three in 2025, the rate continues to be elevated and there can be no assurance that the rate will continue to decrease or that it will not be increased in 2026 and beyond. Regulated lending institutions are adjusting their business models to increase capital requirements for direct loans to real estate and thus continue to be constrained in providing capital for commercial real estate properties. Changes in the federal funds rate as well as the other policies of the Federal Reserve affect interest rates, which have a significant impact on our financial condition.

The extent of the continuing impact of these public health and macroeconomic risks on the Company's operational and financial performance and ultimately its Net Asset Value**,** will depend on current and future developments, including the residual effects of the COVID-19 pandemic and the extent to which persistently high interest rates continue to have an adverse impact on the real estate industry and a recessionary effect generally.

As a result of the foregoing developments, we are unable to determine what the ultimate impact will be on our timeline for seeking entitlements and selling properties, and ultimately on the amount of proceeds and distributions from those sales**.** 

**Tax Status**

As a limited liability company, Gyrodyne is not subject to an entity level income tax but rather is treated as a partnership for tax purposes, with its items of income, gain, deduction, loss and credit being reported on the Company's information return, on Form 1065, and allocated annually on Schedule K-1 to its members pro rata.

The Bipartisan Budget Act of 2015 (the "2015 Act") changed this procedure for partnership tax audits and audit adjustments for partnership returns of large partnerships for fiscal years beginning after December 31, 2017. Pursuant to the 2015 Act, if any audit by the IRS of our income tax returns for any fiscal year beginning after December 31, 2017 results in any adjustments, the IRS may collect any resulting taxes, including any applicable penalties and interest, directly from Gyrodyne. IRS tax audit assessments on tax years beginning January 1, 2018 will require Gyrodyne to a) bear any tax liability resulting from such audit, or b) elect to push out the tax audit adjustments to the respective shareholders once it has been calculated at the company level.

**Competition**

Our properties are located in St. James and Cortlandt Manor, New York. The Company competes in the leasing of medical, professional and general office space and engineering, manufacturing and warehouse space with a considerable number of other real estate companies, some of which have greater marketing and financial resources than the Company and may generally be able to accept more risk than we can prudently manage, including risk with respect to creditworthiness of tenants. These entities and others may be prospective buyers, as well as competitors, with respect to both properties. Principal factors of competition in the Company's rental property business are the quality of properties, leasing terms (including rent and other charges and allowances for tenant improvements), attractiveness and convenience of location, financial strength of its competitors, the quality and breadth of tenant services provided and reputation as an owner and operator of quality office properties in its relevant market. Additionally, the Company's ability to compete depends upon, among other factors, trends in the national and local economies, investment alternatives, financial condition and operating results of current and prospective tenants, availability and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation and population trends.

------

In pursuit of our business plan, and the sale of properties, the Company competes with other real estate investors, including pension funds, insurance companies, foreign investors, real estate partnerships, public and private real estate investment trusts, private individuals and other domestic real estate companies, many of which have greater financial and other resources than the Company. With respect to properties presently owned by the Company, we compete with other owners of like properties for tenants and purchasers.

**Internal Growth and Effective Asset Management**

***Tenant Relations and Lease Compliance***. We strive to maintain strong contacts with our tenants in order to understand their current and future real estate rental and development needs. We directly monitor each of our rental properties to ensure they are properly maintained and meet the needs of our tenants.

***Extending Lease Maturities***. We seek to extend leases in advance of expirations to achieve high occupancy levels.

**Financing Strategy**

The Company intends to seek to modify one or more of its existing loan facilities to strengthen its financial position through the end of 2028, the forecasted completion of the liquidation process. The Company's goal with respect to any such modification is for its current cash and cash equivalent position post-loan modification to be adequate to fund our process of seeking entitlements and selling assets through such forecasted liquidation completion date. Management believes the Company will need additional capital to properly fund operations through the end of 2028 absent sufficient working capital raised through the combination of property sales or the modification of its existing credit facilities and or new credit facilities, or other alternative capital raising strategies. There can be no assurance, however, that the Company will be successful in securing any such loan modification/ and/or new credit facilities on terms that are satisfactory to the Company or on any terms at all or achieve a timely closing on the sale of a property to address its working capital needs. If such available cash and amounts received on the sale of assets are not adequate to provide for our obligations, liabilities, expenses and claims, distributions of cash and other assets to our shareholders would be eliminated. In the event our shareholders receive distributions from Gyrodyne and there are insufficient funds to pay any creditors who seek payment of claims against Gyrodyne, shareholders could be held liable for payments made to them and could be required to return all or a part of the distributions made to them.

We generally finance our operations through cash on hand. On March 7, 2024, the Company closed a rights offering resulting in approximately $4.4 million of net proceeds to the Company, thereby ensuring we could operate from a position of strength through the duration of the liquidation estimated at the time of such offering to be the end of 2026 (but now being extended to the end of 2028), to negotiate and enforce purchase agreements and defend our property rights in the Article 78 Proceeding and in any other such proceeding that may arise**.** Furthermore, certain of the Company's major vendors have informally agreed to defer payment on 50% of their fees until the first subdivided lot is sold. While these same vendors remain committed to deferring a large portion of their deferred fees (as disclosed in footnote 8), the extended timeline to the end of 2028 is resulting in economic pressure to provide for a yet to be determined partial payment, albeit expected to be less than half of the outstanding liability). Additionally, on December 6, 2019, the Company's Board of Directors approved the Gyrodyne, LLC Nonqualified Deferred Compensation Plan for Employees and Directors (the "DCP") effective as of January 1, 2020. The plan is a nonqualified deferred compensation plan maintained for officers and directors of the Company. Under the DCP, officers and directors may elect to defer a portion of their compensation to the DCP and receive interest on such deferred payments at a fixed rate of 5% (per annum). All DCP benefits will be paid in a single lump sum cash payment on December 15, 2031, unless a Plan of Liquidation is established for Gyrodyne before the distribution date in which case all benefits will be paid in a single lump sum cash payment after execution of an amendment to terminate the DCP (*See Deferred Compensation Plan below)*.

The Company secured a non-revolving credit line for up to $3,000,000 (the "Original Line") with a bank, which closed on March 21, 2018. The original line included an interest only phase. On April 30, 2021, the loan converted to the Permanent Phase with an outstanding principal balance of $2,200,000. During the Permanent Phase, the Company is paying interest at a fixed rate of 3.85%, plus principal based on a 20-year amortization period. The loan will mature on April 30, 2028. The outstanding balance as of December 31, 2025 was $1,828,416.

To secure access to additional working capital through the final sale date of the Flowerfield industrial buildings, the Company secured a second loan evidenced by a non-revolving business line of credit agreement and promissory note with the Original Line bank for up to $3,000,000, which closed on January 24, 2019. This loan included an interest only phase. On May 20, 2021, the loan converted to the Permanent Phase with an outstanding principal balance of $3,000,000. During the Permanent Phase, the Company pays interest at a fixed rate of 3.85%, plus principal based on a 20-year amortization period. The loan will mature on May 20, 2028. The outstanding balance as of December 31, 2025 was $2,503,293.

------

Both lines are secured by approximately 31.8 acres of the Flowerfield Industrial Park including the related buildings and leases. As of December 31, 2025, the Company is in compliance with the loan covenants. The Company anticipates modifying the terms of the loans following the completion of the subdivision so that the loans remain secured by the subdivided industrial park lot only.

On September 15, 2021, the Company, through its subsidiary GSD Cortlandt, LLC ("GSD Cortlandt"), secured a $4.95 million term loan (the "2021 Mortgage Loan") with Signature Bank, the proceeds of which were used to pay off the previous GSD Cortlandt debt facility of which $1,050,000 was outstanding. The term of the 2021 Mortgage Loan is five years with an option to extend for an additional five years (the "Extension Period"). Until the initial maturity date, the 2021 Mortgage Loan bears interest at an annual rate equal to 3.75%. If the maturity date is extended for the Extension Period, the rate of interest on the 2021 Mortgage Loan will adjust and be fixed for the Extension Period to the greater of (i) 3.75% or (ii) 275 basis points in excess of the weekly average yield on United States Treasury Securities adjusted to a constant maturity of five years as most recently made available by the Federal Reserve Board as of thirty days prior to the first day of the Extension Period. The 2021 Mortgage Loan will be paid in monthly installments of principal and interest calculated on the basis of a thirty-year amortization schedule. If the maturity date is extended for the Extension Period, the amount of each monthly installment will be recalculated for the Extension Period based on the adjusted interest rate on the 2021 Mortgage Loan and an amortization schedule of twenty-five years. The lender has the right, but not the obligation, to decline to extend the term of the 2021 Mortgage Loan if the loan to value ratio of the property is greater than seventy percent (70%), or the property does not support a debt service coverage ratio (as calculated by the lender) of at least 1.3 to 1, in each case on the date the extension is exercised.

The 2021 Mortgage Loan may be prepaid in whole or in part, at any time, provided the borrower (GSD Cortlandt) pays the bank with each prepayment a prepayment fee equal to (i) during the first loan year and, if applicable, the first loan year of the Extension Period, five percent of the amount of such prepayment; (ii) during the second loan year and, if applicable, during the second loan year of the Extension Period, four percent of the amount of such prepayment; (iii) during the third loan year and, if applicable, during the third loan year of the Extension Period, three percent of the amount of such prepayment; (iv) during the fourth loan year and, if applicable, during the fourth loan year of the Extension Period, two percent of the amount of such prepayment; and (v) during the fifth loan year and, if applicable, during the fifth loan year of the Extension Period, one percent of the amount of such prepayment. There will be no prepayment fee for any prepayment made during the sixty-day period immediately preceding the initial maturity date or the last sixty days of the Extension Period. All prepayments must include accrued and unpaid interest through the date of prepayment. If the Cortlandt Manor property is sold to a bona fide third-party purchaser within the initial two years of the term of the 2021 Mortgage Loan, the prepayment fee to be paid upon repayment of the 2021 Mortgage Loan in full will be reduced by fifty percent. The outstanding balance as of December 31, 2025 was $4,558,993.

The 2021 Mortgage Loan is secured by the Cortlandt Manor property located at 1985 Crompond Road (5.01 acres).

On December 27, 2023, the Company, through its subsidiaries GSD Cortlandt, LLC ("GSD Cortlandt") and Buttonwood Acquisition, LLC ("Buttonwood"), secured a term mortgage loan (the "2023 Mortgage Loan") in the principal amount of $1,500,000 with LLYR Resources, LLC ("LLYR"). The net proceeds of the 2023 Mortgage Loan will be used for general working capital. The 2023 Mortgage Loan is unconditionally and irrevocably guaranteed by the Company. The term of the 2023 Mortgage Loan is two years. Until the maturity date, the 2023 Mortgage Loan bears interest at a floating interest rate of 1.5% per annum in excess of the Wall Street Prime Rate, with such interest only payable monthly, which may be prepaid, in whole or in part, at any time, without payment of a prepayment fee.

The 2023 Mortgage Loan is secured by a first mortgage in the amount of $1,500,000 on the interests of GSD Cortlandt in 1989 Crompond Road and 1987 Crompond Road in Cortlandt Manor, New York, and the interests of Buttonwood in 206 Buttonwood Avenue and certain vacant land off of Buttonwood Road in Cortlandt Manor, New York. The Company closed on a loan modification with LLYR to extend the loan for an additional 24 months commencing January 1, 2026 at a revised interest rate of 15% which the Company may refinance with no early repayment penalty.

On February 1, 2024, the Company entered into an agreement with one vendor which had previously agreed to defer 50% of payment until the closing of the first property lot sale that is the subject of either the Flowerfield or Cortlandt Manor subdivision. The agreement called for a $200,000 payment on outstanding invoices plus an interest payment on such invoices, interest to accrue monthly on the outstanding balance, agreement to pay all future invoices in full, and conversion of the remaining outstanding balance of $477,829 (balance due after the $200,000 payment) to a loan payable within 15 days of the sale of one of the Company's properties. The loan accrued interest at 0.75% per month through 2024 and is accruing interest at 1.0% per month from January 2025.

**Environmental Matters**

Based on our ongoing review of each of our properties, as of the date of this report, we are not aware of any environmental condition with respect to any of the properties which we believe would be reasonably likely to have a material adverse effect on our financial condition and/or results of operations. There can be no assurance that (i) changes in law, (ii) the conduct of tenants, (iii) activities related to properties in the surrounding area, (iv) contamination through the water table due to the low elevation and immediate proximity of the industrial park to the Long Island Sound or (v) the discovery of environmental conditions the extent or severity of which were unknown, will not expose us to material liability in the future.

------

The Company believes that each of its properties is in compliance, in all material respects, with federal, state and local regulations regarding hazardous waste and other environmental matters and is not aware of any environmental contamination at any of its properties that would require any material capital expenditure for the remediation thereof. No assurance can be given, however, that environmental regulations will not in the future have a materially adverse effect on the properties.

**Insurance**

The Company carries comprehensive liability, property, terrorism and umbrella insurance coverage which includes fire, flood, earthquakes and business interruption insurance on all our properties. The Company annually reviews its policies with regard to both risk management and the underlying premiums and believes the policy specifications, insurance limits and deductibles are appropriate given the relative risk of loss, the cost of the coverage and industry practice and, in the opinion of the Company's management, all its properties are adequately insured.

**Major Tenants**

For the year ended December 31, 2025, rental income from the Company's three largest tenants represented approximately 26%, 19% and 11%, respectively, of total rental income. The three largest tenants by revenue as of December 31, 2025 consist of a medical tenant in the Cortlandt Manor Medical Center, a New York State Agency located in the industrial park, and an athletics facility in the industrial park.

For the year ended December 31, 2024, rental income from the Company's three largest tenants represented approximately 25%, 21% and 9%, respectively, of total rental income. The three largest tenants by revenue as of December 31, 2024 consist of a medical tenant in the Cortlandt Manor Medical Center, a New York State Agency located in the industrial park, and an athletics facility in the industrial park.

**Fiscal Year 2025 Transaction Summary**

The following summarizes our significant transactions and other activity during the year ended December 31, 2025.

***Leasing Activity.***

During 2025, the Company signed four new leases comprising 5,676 square feet, annual base rent of approximately $104,500, excluding tenant reimbursements and total commitments of approximately $257,400. There were three terminations comprising 4,471 square feet and approximately $62,600 in annual revenue, excluding tenant reimbursements. A total of 7 lease renewals were signed during 2025 comprising approximately 31,800 square feet, $518,000 in annual revenue and $2,998,000 in total commitments. Additionally, there were five expansions comprising 2,407 square feet, $37,000 in annual revenues and $116,728 in total commitments. The Company agreed to approximately $345,000 in lease incentives/concessions in the form of a rent abatement and approximately $27,000 in tenant improvements. Commissions paid during the year ended 2025 were approximately $174,000.

***Disposition Activity.***

***Purchase and Sale Agreement with B2K Smithtown LLC***

On July 30, 2025, GSD Flowerfield LLC, a *New* York limited liability company ("GSD") wholly-owned by the Company, entered into a Purchase and Sale Agreement (as amended, the "B2K Agreement") for the sale of an approximately 49 acre parcel of vacant land to B2K Smithtown LLC ("B2K"), an affiliate of B2K Development LLC, which property forms a portion of the Company's Flowerfield complex in St. James, New York, for a purchase price of between $24,000,000 and $28,740,000, subject to conditions and contingencies set forth in the B2K Agreement. Included among the conditions set forth in the B2K Agreement is receipt of subdivision and site plan approval. Based on the terms of the B2K Agreement, we estimate the gross value of the B2K Agreement is $28,740,000, contingent on a pending site plan submission, which we believe will be approved by the Smithtown Planning Department. Under the terms of the B2K Agreement, the Company is required to issue B2K a credit at closing for the industrial park's proportionate share of costs for a sewer treatment plant ("STP") and on-site infrastructure costs aggregating $4,020,222, which is included in the Company's estimated costs in excess of receipts. The incremental value impact, if any, to the industrial building lots associated with access to an on-site STP is not estimable at this time as it is contingent on many unknown factors, including but not limited to the markets assessment of the probability of closing of the B2K transaction, timing for completion of the STP, and the future associated market demand for suite usage requiring an STP amenity.

------

Among other provisions, the B2K Agreement provides for: (i) an earnest money deposit of $250,000 to be delivered to the escrow agent, subject to a 90-day investigation period, during which time B2K will have the right to terminate the B2K Agreement by written notice to GSD if B2K will not be fully satisfied, in B2K's sole discretion, as to the status of title, suitability of the Premises and all factors concerning same, prior to the expiration of the investigation period, in which case B2K will have the right to receive a refund of its earnest money deposit; and (ii) unless B2K terminates the B2K Agreement on or prior to the end of the investigation period (the "Investigation Period Notice Date"), the closing to occur on the earlier of: (A) that certain date that is no later than eight (8) months after the Town of Smithtown grants Site Plan Approval (as defined in the B2K Agreement), or (B) sixty (60) days after B2K waives the Site Plan Approval contingency. Such closing date is estimated to occur no later than October 2028 or alternatively by June 2029 if B2K exercises both of its site plan extension options. Based on the above, the Company is extending its estimated timeline to complete the liquidation to December 31, 2028.

The B2K Agreement is also contingent on the receipt of Subdivision Approval (as defined in the B2K Agreement) and B2K obtaining, at B2K's sole cost and expense, certain other required approvals (the "Approvals") beyond all relevant appeal periods within 18 months following the later of: (i) a designated number of days following the Investigation Period Notice Date or (ii) a designated number of days following the issuance of Subdivision Approval (the "Approval Period").

If B2K fails to obtain the Approvals prior to the expiration of the Approval Period (subject to certain extension rights), B2K may terminate the B2K Agreement or waive the foregoing approval contingencies and close title within 60 days.

The B2K Agreement also contains additional customary covenants, conditions, representations and warranties.

The foregoing description of the B2K Agreement is only a summary of its material terms, does not purport to be a complete description of the rights and obligations of the parties thereunder and is qualified in its entirety by reference to the full text of the B2K Agreement, which was filed as an exhibit to the Company's Current Report on Form 8-K on August 4, 2025.

On October 28, 2025, the Company entered into the first amendment to the B2K Agreement which extends the investigation period to December 5, 2025.

On January 6, 2026, the Company entered into the second amendment to the B2K Agreement which among other provisions provides as follows:

● **On-Site Improvements.** At closing, the Company will credit B2K $1,520,222 toward the purchase price for specified on-site improvements to Lots 1 and 3 of Flowerfield, with no increase if additional work is required.B2K will be responsible for constructing all common facilities and offsite improvements, while the Company will use commercially reasonable effects to cooperate by providing access at no cost to the Company.

● **Investigation Period.** The parties acknowledge that the investigation period, as extended, has expired and that B2K's right to terminate the Agreement under Section 3.1(D) of the Agreement is null and void and of no further force nor effect.

**Deferred Compensation Plan**

On December 6, 2019, the Company's Board of Directors (the "Board") approved the Gyrodyne, LLC Nonqualified Deferred Compensation Plan (the "DCP") for Employees and Directors effective as of January 1, 2020. The DCP is a nonqualified deferred compensation plan maintained for officers and directors of the Company. Under the DCP, officers and directors may elect to defer a portion of their compensation to the DCP and receive interest on such deferred payments at a fixed rate of 5% (per annum). All DCP benefits will be paid in a single lump sum cash payment on December 15, 2031, as amended, unless a Plan of Liquidation is established for Gyrodyne before the distribution date in which case all benefits will be paid in a single lump sum cash payment after execution of an amendment to terminate the DCP. The foregoing description of the DCP does not purport to be complete and is qualified in its entirety by reference to the full text of the DCP, which was filed as an exhibit to the Company's Form 8-K, filed with the Securities and Exchange Commission on December 13, 2019 and incorporated herein by reference. With the exception of Jan Loeb, appointed to the Board in July 2023, each of the Directors elected (under the DCP) to defer 100% of their director fees for the years 2020 thru 2025. Two of the four directors have elected not to defer any fees during 2026; the other two directors elected to defer approximately 71% of their respective 2026 director fees.

**Subsequent Business Events**

***Leasing Activity***.

Subsequent to December 31, 2025, the Company signed one new lease comprising approximately 1,300 square feet and $11,000 in annual revenue and total lease commitments. There were two terminations comprising approximately 4,900 square feet and $68,000 in annual revenue.

------

**Employees**

As of December 31, 2025 and 2024 we had two and four employees, respectively.

**Industry Segments**

Gyrodyne's corporate strategy is to enhance the value of Flowerfield and Cortlandt Manor by pursuing entitlement opportunities to provide purchasers increased development flexibility, and by enhancing the value of our leases, and then selling our properties in an orderly manner at higher values. The Company manages this strategy on an aggregated, single segment basis for purposes of assessing performance and making decisions (inclusive of capital allocation, leasing, entitlements and sales). Therefore, the Company has only one reporting segment.

As reported in footnote two the Company is on a liquidation basis of accounting. The detailed information regularly provided to the chief operating decision maker ("CODM"), President and CEO, is reported in footnote four in detail supporting the estimated liquidation and operating costs net of estimated receipts. This information allows the CODM to manage and forecast any impact the operations have on the estimated real estate value and in the aggregate allows the CODM to calculate estimated distributions. The net assets as of December 31, 2025 ($25,858,997) and December 31, 2024 ($30,596,313) results in estimated distributions of approximately $11.76 and $13.91 per common share, respectively, based on 2,199,308 shares outstanding.

**Available Information**

We electronically file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports, and proxy statements, with the SEC. You may read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, D.C. 20549, or you may obtain information by calling the SEC at 1-800-SEC-0330. The SEC maintains an internet address at <u>http://www.sec.gov</u> that contains reports, proxy statements and information statements, and other information, which you may obtain free of charge. In addition, copies of our filings with the SEC may be obtained from our website located at www.gyrodyne.com**.** We make available, free of charge, on or through the Investor Relations section of our website, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as well as prospectuses and Proxy Statements, as soon as reasonably practicable following the electronic filing of such material with the U.S. Securities and Exchange Commission ("SEC"). Also available on our website is our Audit Committee Charter and our Code of Business Conduct and Ethics governing our directors, officers and employees. In addition, our web site includes information with respect to purchases and sales of securities by our officers, directors as well as any non-GAAP financial disclosures (defined by SEC's Regulation G) that we may make public orally, or in writing. We are not incorporating our website or any information from the website into this Form 10-K.

Our Investor Relations department can be contacted at One Flowerfield, Suite 24, St. James, New York 11780, ATTN: Investor Relations or by Telephone: 631-584-5400.

Principal Executive Offices – Our principal executive office is located at One Flowerfield, Suite 24, St James, New York 11780. Our telephone number is 631-584-5400.

**Item 1A. Risk Factors.** 

Gyrodyne's business, financial condition, results of operations and distribution potential are subject to risks customary for real property owners, as well as additional risks associated with Gyrodyne's strategic plan of positioning our remaining properties for sale at enhanced values and making distributions to our shareholders. In addition to the factors discussed elsewhere in this Report, the following risks and uncertainties could materially harm the value of our properties and the magnitude of distributions to our shareholders, including causing Gyrodyne's actual results to differ materially from those projected in any forward-looking statements. The following summary of significant risk factors is not all-inclusive or necessarily in order of importance. Additional risks and uncertainties not presently known to Gyrodyne or that Gyrodyne currently deems immaterial also may materially adversely affect us in future periods. For more information about forward-looking statements, see the section of this report entitled "Cautionary Statement Concerning Forward-Looking Information" below.

***There are risks associated with seeking to enhance the value of certain properties.***

Gyrodyne has been pursuing various entitlement opportunities to increase the development flexibility of our Flowerfield and Cortlandt Manor properties in order to enhance the resulting aggregate value for such properties as a whole. Our efforts to seek enhancements of such properties are subject to various risks, including the following:

● any delay or denial of a required entitlement or permit, including zoning, land use, environmental, emissions or other related permits, would adversely impact our property enhancement plans;

------

● our analysis of site context, of demographic trends, of decisions of anchor institutions and of growth opportunities generally may not result in identifying the correct high value land uses and programmatic synergies;

● capital improvement costs and other expenses of such enhancements may be higher than projected, potentially making the project unfeasible or unprofitable;

● we may not have funds available or be able to obtain financing for these value-enhancement projects on favorable terms, if at all;

● we may experience delays in the repositioning or improvement process.

For these and other reasons, we cannot assure you that we will realize growth in the value of our Flowerfield and Cortlandt Manor properties that exceeds our land entitlement costs or any at all, and as a result our ability to make distributions to our shareholders could be adversely affected.

***Community opposition could adversely impact our efforts to obtain entitlements and enhance the value of our properties.***

The process of seeking required entitlements, permits and approvals is sometimes delayed or prevented due to community opposition and adverse publicity from neighboring property owners, members of the general public or non-governmental organizations, or other third parties and other factors beyond our control. The Company's efforts to seek entitlements, permits or other approvals have been the subject of protests by civic groups asserting environmental, traffic and congestion issues as well as adverse impact to the historic nature of the area. Such community opposition could lead to the denial of entitlements, permits or other approvals essential to our efforts to increase the value of our properties or to the imposition of restrictive conditions with which it is not practicable or feasible to comply and could impact our ability to enhance the value of our properties.

On March 30, 2022, the Town of Smithtown Planning Board (the "Planning Board") unanimously granted Gyrodyne's application for preliminary approval to divide the Flowerfield property into eight lots, subject to certain conditions (the "Flowerfield Subdivision Application"). On April 26, 2022, the Incorporated Village of Head of the Harbor and certain other parties commenced a special proceeding (the "Article 78 Proceeding") against the Town of Smithtown and certain other parties, including the Company, seeking to annul the Planning Board's determinations relating to the Flowerfield Subdivision Application. The Article 78 Proceeding was commenced by the filing of a petition (the "Petition") in the Supreme Court of the State of New York, Suffolk County, pursuant to Article 78 of New York's Civil Practice Law and Rules ("Article 78"). Specifically, the Petition seeks to annul the Planning Board's (i) approval of a findings statement, pursuant to the SEQRA, dated September 16, 2021, and adopted by the Planning Board on March 30, 2022, concerning the Flowerfield Subdivision Application, and (ii) preliminary approval on March 30, 2022 of the Flowerfield Subdivision Application. The arguments made in the Petition are substantially similar to those made by opponents of the Flowerfield Subdivision Application during the SEQRA and subdivision process. The Company and the Town of Smithtown are vigorously defending the Planning Board's determinations against the Petition. In June 2022, Gyrodyne and the Town of Smithtown filed motions to dismiss the Petition. During the third quarter of 2023, the Article 78 Proceeding was re-assigned to a different judge for the second time. On February 6, 2024, the Supreme Court of the State of New York, Suffolk County issued an order (the "Order"), denying the Motions in part and granting them in part. Specifically, the Order (i) denied the Motions as to three individual Petitioners and the St. James-Head of the Harbor Neighborhood Preservation Coalition, Inc., (ii) granted the Motions as to the remaining twenty (20) individual Petitioners and the Village of Head of the Harbor, (iii) denied the branch of Gyrodyne's motion alleging that Petitioners failed to state a claim. On October 11, 2024, the Supreme Court of the State of New York issued a ruling in favor of the Company dismissing the Article 78 petition in its entirety. On October 28, 2024, the Company received a notice of appeal filed by the petitioners in this proceeding seeking to appeal the court's dismissal of the Article 78 petition, citing as grounds for appeal "whether the court erred in denying the petition and dismissed the Article 78 proceeding, and any and all other issues which may arise upon further review of the record on appeal".

On November 12, 2024, the petitioners filed a notice of motion to renew and reargue, seeking to have the court direct the respondents to undertake a supplemental environmental impact statement to address retaining of storm water at the property being developed in light of a recent storm, and to annul the resolution approving the preliminary site plan.

On March 17, 2025, the Supreme Court of the State of New York, Suffolk County issued an order denying the appellants motion to stay enforcement of the order, pending hearing and determination of appeal. On March 21, 2025, the Supreme Court of the State of New York, Suffolk County issued an order denying the Petitioners motion to renew and reargue. On April 16, 2025 the Petitioners filed a notice of appeal seeking to appeal the March 17, 2025 order denying the appellants motion to stay enforcement of the order dismissing the Petition pending the appeal.

On April 28, 2025 the Petitioners perfected their appeal on the original Petition. The Petitioners' memorandum of law largely repeats their earlier position and arguments, which the Supreme Court previously found to be an insufficient basis for overturning the Planning Board's determinations. Gyrodyne filed its response to the Appeal on July 25, 2025 and the Town submitted its reply to the Appeal on July 28, 2025.

------

Challenging a government decision in an Article 78 proceeding can lead to delay in enforcement of the government action, whether or not the suit is successful, and the government sometimes agrees to delay implementation until legal challenges are resolved. Moreover, there can be no assurances that there will not be any additional efforts to challenge decisions made by the Town of Smithtown or any other governmental agency decision impacting our properties or our efforts to enhance the value of our properties through the commencement of other Article 78 proceedings or other forms of litigation. Although Article 78 proceedings take place on an expedited timeline and generally without discovery, we cannot provide any assurances as to the anticipated resolution of the Article 78 Proceeding, or any future Article 78 proceedings relating to our properties that may be commenced in the future, given the impact the pandemic has had on the court system. Consequently, the Article 78 Proceeding and any future such proceedings could result in further extensions of the Company's timeline for completing the process of securing entitlements, selling our properties and distributing net proceeds and there can be no assurance that the Company and the Town of Smithtown will be successful in the defense of the Planning Board's determinations against the Petition.

***We cannot assure you of the exact timing and amount of any further distributions to our shareholders.***

Our estimate of net assets on December 31, 2025 is $25.9 million or $11.76 per common share. These estimated amounts are based on a number of assumptions and factors outside of our control. The process of disposing of our real property assets in an orderly manner designed to obtain the best value reasonably available for such assets may fail to create value or may result in lower than expected value and may result in lower than expected proceeds, or in no proceeds, for distribution to our shareholders. The actual nature, amount and timing of all distributions will be determined by Gyrodyne in our sole discretion, and will depend on, and could be delayed by, among other things, sales of our real estate assets, claim settlements with creditors, resolution of outstanding litigation matters, payment of incentive bonuses to those employees and directors who are vested under the Retention Bonus Plan and unanticipated or greater-than-expected expenses. Examples of uncertainties that could reduce the value of or eliminate distributions to our shareholders include unanticipated costs relating to:

● failure to achieve favorable values for our properties in their disposition;

● the defense, satisfaction or settlement of lawsuits or other claims that may be made or threatened against us in the future;

● delay or failure to settle claims; and

● administration and settlement of federal and state tax audits, if any.

As a result, we cannot determine with certainty the amount or timing of distributions to our shareholders.

***If we are unable to find buyers for our properties at our expected sales prices, distributions may be delayed or reduced.***

In calculating our estimated net assets, we assume that we will be able to find buyers for all our properties at our estimated amounts. However, we may have overestimated the sales prices that we will be able to obtain for these properties or underestimated the costs associated with such sales. If we are not able to find buyers for these properties in a reasonably timely manner or if we have overestimated the sales prices we will receive, distributions payable to holders of our common shares would be delayed or reduced. Furthermore, our estimated net assets are based on current market conditions, but real estate market values are constantly changing and tend to fluctuate with changes in inflation, interest rates, supply and demand dynamics, real property utilization trends, climate change initiatives, occupancy percentages, lease rates, the availability of suitable buyers, the perceived quality and dependability of income flows from tenancies and a number of other factors, both local and national. In addition, transactional fees and expenses, environmental contamination at our properties or unknown liabilities, if any, may adversely impact the net proceeds from those properties.

***Distributions to shareholders may be delayed or reduced as a result of sale agreement provisions, including under our agreement with B2K, that allow purchasers to terminate agreements, that result in purchaser defaults or that make the purchase price contingent upon site plan approval.***

Purchase and sale agreements for the sale of our properties may contain standard market provisions that give the purchaser the right to terminate the agreement, for any reason or no reason, prior to the expiration of an evaluation period, and receive a refund of earnest money deposits. The consummation of property sales under such agreements, including our purchase and sale agreement with B2K (the "B2K Agreement"), are also subject to satisfaction of standard closing conditions. The closing under the B2K Agreement is, and closings under future purchase and sale agreements are expected to be, contingent upon the purchaser obtaining (at its expense) final site plan approval for a designated number of units within a specified period of time, with the purchaser having a right to terminate the agreement or extend the approval period if it fails to secure such approval within such time period, and with the purchase price for the property being a function of agreed upon price per unit and the number of approved units. If any property sale contemplated by the B2K Agreement or future sale agreements does not close because a purchaser exercises its termination right or defaults, or because of a failure of a closing condition or for any other reason, we will need to locate a new buyer for the property, which we may be unable to do promptly or at a price or on terms that are as favorable as contained in the original sale agreement. Many of the costs incurred due to a sale that fails to close are sunk costs with no future value and we will also incur additional costs involved in negotiating a new sale agreement for such property. These additional costs are not included in our projections. In the event that we incur these additional costs or if the number of approved units under final site plan approval turns out to be below what we anticipate, distributions to our shareholders would be delayed or reduced.

------

***Illiquidity of real estate and lack of diversification may make it difficult for us to sell properties or achieve satisfactory returns in one or more properties within projected timelines.***

Our assets consist substantially of real properties which are relatively illiquid assets. We may encounter difficulty in disposing of properties when tenants vacate either at the expiration of the applicable lease or otherwise. When we decide to sell a particular property, our ability to do so and the prices we receive on their sale may be affected by many factors, including the number of potential buyers, the number of competing properties on the market and other market conditions, as well as whether the property is leased and if it is leased, the terms of the lease. As a result, we may be unable to sell our properties for an extended period of time at the values disclosed in our Consolidated Statement of Net Assets, which would adversely affect our results of operations, liquidity and financial condition. We expect to complete our process of pre-development enhancement and subsequent sale of all our properties by December 31, 2026. However, the illiquid nature of real estate and the short timeframe that we have chosen to complete pre-development value enhancement and subsequent sale of assets could adversely impact the prospects for achieving our value enhancement and sale objectives and may ultimately result in an extension of the timeline and or additional costs for achieving our pre-development property value enhancement and asset sale objectives.

***If our land entitlement and liquidation costs or unpaid liabilities are greater than we expect, our distributions to our shareholders may be delayed or reduced.***

In order to obtain certain entitlements, permits and approvals, we may be required to prepare and present additional data to governmental authorities pertaining to the potential adverse impact that any proposed activities may have on the environment, individually or in the aggregate. Certain approval procedures may require preparation of studies to assess the environmental impact of new sites or the expansion of existing sites. Compliance with these regulatory requirements is expensive and significantly lengthens the time needed to develop a site.

The liquidation basis of accounting requires us to accrue all costs associated with implementing and completing our plan of liquidation. Total liability for estimated costs in excess of estimated receipts during liquidation, inclusive of the costs listed above plus costs associated with the sale of real estate, payments made under the retention bonus plan, litigation costs and liquidating costs, total $17,334,618 inclusive of a closing credit to B2K for certain infrastructure costs of approximately $4 million. The total amount of land entitlement costs, transaction fees and all operating and administrative costs in the liquidation is not yet known and, therefore, we have used estimates of these costs in calculating the amounts of our projected distributions to our shareholders. To the extent that we have underestimated these costs in calculating our projections or we incur unforeseen additional costs, our actual distributions may be lower than our estimated net assets. In addition, if the claims of our creditors are greater than we have anticipated, or we decide to acquire one or more insurance policies covering unknown or contingent claims against us, our distributions may be delayed or reduced. Further, if a reserve fund is established, payment of distributions to our holders of common shares may be delayed or reduced.

***We are subject to risks associated with proxy contests and other actions of activist shareholders.***

Publicly traded companies have increasingly become subject to campaigns by activist investors advocating corporate actions such as governance changes, financial restructurings, sales of assets and changes to executive and director compensation.

The Company received a notice dated June 4, 2025 from Star Equity Fund, LP ("Star Equity"), which claimed to own approximately 7.1% of our outstanding shares at the time of submission, purporting to give notice of its intent to nominate a slate of two candidates for election as directors at the 2025 annual meeting of shareholders.

On October 16, 2025, the Company entered into a letter agreement (the "Star Agreement") with Star Equity, pursuant to which Star Equity agreed to irrevocably withdraw its June 4, 2025 notice of intent to nominate two directors at the 2025 annual meeting. The Star Agreement also obligates Star Equity to vote all Gyrodyne shares it owns in accordance with the Board's recommendations including on the election of directors prior to the Termination Date (as defined below), except that Star Equity will be permitted to vote (i) in its discretion on any proposal regarding certain extraordinary transactions, and (ii) in accordance with the recommendation of Institutional Shareholder Services to the extent the recommendation differs from the Board's recommendation on any matter presented to the shareholders at a special meeting of shareholders following the 2025 annual meeting. Star Equity's obligations continue until December 31, 2026, or December 31, 2027 if the Board re-nominates both Nader G.M. Salour and Jan H. Loeb for election at the Company's 2026 annual meeting and both Messrs. Salour and Loeb agree to such re-nomination (the "Termination Date").

The Star Agreement also prevents Star Equity until the Termination Date from, among other things, (i) nominating any person for election or submitting any shareholder proposal for consideration at any meeting of shareholders of the Company at which directors are to be elected, (ii) soliciting proxies or (iii) taking actions to change or influence the Board, management or the direction of certain Company matters. Until the Termination Date, the Company and Star Equity have also agreed not to disparage each other.

Under the Star Agreement, the Company agreed to nominate only one Board member at the 2025 annual meeting, Richard Smith, for election for an additional three-year term and to reduce the size of the board from five to four seats. If any of Jan H. Loeb, Nader G.M. Salour, Richard B. Smith or Ronald J. Macklin (each, a "Continuing Director") resigns or ceases to be a director due to death or disability, then the Board and Star Equity will engage in good faith discussions to identify a mutually acceptable independent (as defined under Nasdaq listing rules) replacement director (the "Replacement Director"), and if they cannot agree the size of the Board will be reduced to three directors. In such event, if a remaining Continuing Director subsequently resigns or ceases to be a director due to death or disability, then the Board may not make an additional appointment until the Board and Star Equity identify a mutually acceptable Replacement Director.

------

The Company also agreed not to increase Board fees and to limit the aggregate fee paid to the Chairman of the Board to $65,000.

Star Equity also purported to deliver a notice of intent to nominate a slate of two candidates in 2023 (the "2023 Nomination Notice"), and then submitted a shareholder proposal to the Company pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the "Shareholder Proposal"). The Company later entered into a letter agreement with Star Equity, pursuant to which Star Equity agreed to irrevocably withdraw both the 2023 Nomination Notice and the Shareholder Proposal.

Through December 31, 2025, the cumulative cost to the Company of responding to and resolving the foregoing shareholder activist campaigns, including changes to our incentive compensation arrangements, was approximately $1,050,000.

A proxy contest or related activities on the part of activist shareholders, including, among others, Star Equity, could adversely affect our business for a number of reasons, including, without limitation, the following:

● Responding to proxy contests and other actions by activist shareholders can be costly and time-consuming, disrupting our operations and diverting the attention of our Board, management and employees, and could adversely impact the Company's ability to achieve timely or at all our strategic objective of positioning our properties so they can be sold at higher values resulting in maximum distributions to all of our shareholders;

● Perceived uncertainties as to our future direction may result in the loss or compromise of potential opportunities to liquidate our properties for maximum value;

● A successful proxy contest could result in a change of control of our Board, and such an event could subject us to certain contractual obligations under certain material agreements;

● If nominees advanced by activist shareholders are elected or appointed to our Board with a specific agenda, it may adversely affect our ability to effectively and timely implement our strategic plan to position our properties for sale at values that will maximize distributions to all of our shareholders; and

● Proxy contests may cause our stock price to experience periods of volatility.

***Stipulation of Settlement prohibits us from selling our remaining properties at prices below December 2014 appraised values.***

On August 14, 2015, the Company entered a Stipulation of Settlement (the "Settlement") providing for the settlement of a putative class action lawsuit against the Company and certain related parties. Under the Settlement, Gyrodyne agreed that any sales of its properties would be effected only in arm's-length transactions at prices at or above their appraised values as of 2014.

As of December 31, 2025, the aggregate appraised value of our remaining unsold properties exceeded the respective 2014 aggregate appraised value for such properties.

The requirement in the Settlement that the Company sell its remaining properties at prices above the December 2014 appraised values could limit the options available to the Company. The Company believes that it is in the best interests of the shareholders to pursue certain pre-development enhancements to our remaining properties prior to seeking their ultimate disposition to a developer or other purchaser because doing so will result in higher aggregate values for such properties as a whole and thus higher estimated distributions as compared with selling the properties with their current zoning and entitlements. The Company may also entertain offers from potential buyers who may be willing to pay prices for the properties in their current entitlement and zoning status that the Company finds more attractive from a timing or value perspective than might be achievable through completing an entitlement process. If the Company receives an offer prior to the completion of the entitlement process that it believes is in the best interests of the shareholders, it may nevertheless be prevented from consummating such transaction because of the price floor set in the Settlement. In addition, a severe downturn in the general economy or in the real estate market, or other negative factors beyond our control, may drive down the values of commercial real estate properties, or otherwise result in the values of our remaining properties being reduced to levels below the 2014 appraised values, in which case we may be prohibited under the Settlement from selling such properties. Such limitation on the options available to the Company may make it more difficult to accomplish our stated objective of completing the process of seeking entitlements and selling assets by December 31, 2028.

Furthermore, the Stipulation's price floor provision does not factor in land entitlement costs that may be incurred in enhancing the value of any particular property. The price floor provision may create a perverse incentive for the Company to incur certain land entitlement costs to increase the value of a property beyond its stipulated price floor even if the land entitlement costs incurred exceed the amount of the increase in value.

------

***Risks incidental to real estate ownership and management.***

Because our business plan is to pursue the opportunistic disposition of our properties, we do not expect to make any further investments other than to enhance the values of the Flowerfield and Cortlandt Manor properties which may include acquisitions of land and/or executing land swaps. Accordingly, an investment in Gyrodyne depends upon the financial performance and the value of our current portfolio of properties, which properties are subject to the risks normally associated with the ownership and management of rental properties and real estate in general. The risks associated with ownership and management of rental properties include the non-performance of lease obligations by tenants, leasehold improvements that will be costly or difficult to remove should it become necessary to re-rent the leased space for other uses, covenants in certain retail leases that limit the types of tenants to which available space can be rented (which may limit demand or reduce the rents realized on re-renting), rights of termination of leases due to events of casualty or condemnation affecting the leased space or the property or due to interruption of the tenant's quiet enjoyment of the leased premises, and obligations of a landlord to restore the leased premises or the property following events of casualty or condemnation. The risks associated with ownership and management of real estate in general include:

• adverse changes in general and local economic conditions which affect the demand for real estate assets;

• competition from other properties;

• fluctuations in interest rates;

• reduced availability of financing;

• the cyclical nature of the real estate industry and possible oversupply of, or reduced demand for, properties in the markets in which our investments are located;

• the attractiveness of our properties to tenants and purchasers;

• how well we manage our properties;

• changes in market rental rates and our ability to rent space on favorable terms;

• the financial condition of our tenants including their becoming insolvent and bankrupt;

• the need to periodically renovate, repair and re-lease space and the costs thereof; and

• increases in maintenance, insurance and operating costs.

***Our shareholders may be liable to our creditors for an amount up to the amount distributed by us if our reserves for payments to creditors are inadequate.***

In the event our shareholders receive distributions from Gyrodyne at a time when the Company is insolvent or is rendered insolvent thereby and there are insufficient funds to pay any creditors who seek payment of claims against Gyrodyne, shareholders could be held liable under New York State's fraudulent conveyance laws for payments made to them and could be required to return all or a part of distributions made to them. Under the New York Uniform Voidable Transactions Act signed into law on December 6, 2019, the reach-back period for voidable transaction claims other than claims based on fraud is reduced from six years to four years with respect to distributions made on or after April 4, 2020.

***Our properties may subject us to known and unknown liabilities.***

Our existing properties may have known and unknown liabilities for which we would have no recourse, or only limited recourse, to the former owners of such properties. As a result, if a liability were successfully asserted against us based upon ownership of an acquired property, we might be required to pay significant sums to settle it, which could adversely affect our financial results, cash flow and proceeds available for distribution. Unknown liabilities relating to properties could include:

• liabilities for clean-up of pre-existing disclosed or undisclosed environmental contamination;

• claims by tenants, vendors or other persons arising on account of actions or omissions of the former owners of the properties; and

• liabilities incurred in the ordinary course of business.

------

***Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, could adversely affect our business operations, strategic goals and our financial condition and results of operations.***

The Company intends to seek to modify one or more of its existing loan facilities to strengthen its financial position through the end of 2028, the forecasted completion of the liquidation process. The Company's goal with respect to any such modification is for its current cash and cash equivalent position post-loan modification to be adequate to fund our process of seeking entitlements and selling assets through such forecasted liquidation completion date. Management believes the Company will need additional capital to properly fund operations through the end of 2028 absent sufficient working capital raised through the combination of property sales or the modification of its existing credit facilities and or new credit facilities, or other alternative capital raising strategies. There can be no assurance, however, that the Company will be successful in securing any such loan modification/ and/or new credit facilities on terms that are satisfactory to the Company or on any terms at all or achieve a timely closing on the sale of a property to address its working capital needs. If such available cash and amounts received on the sale of assets are not adequate to provide for our obligations, liabilities, expenses and claims, distributions of cash and other assets to our shareholders would be eliminated. In the event our shareholders receive distributions from Gyrodyne and there are insufficient funds to pay any creditors who seek payment of claims against Gyrodyne, shareholders could be held liable for payments made to them and could be required to return all or a part of the distributions made to them.

Although we assess our banking relationships as we believe necessary or appropriate, our access to funding sources and other credit arrangements in amounts adequate to finance or capitalize our business operations and strategic plans to position our properties and sell them for maximum value could be significantly impaired by factors that affect us, the financial institutions with which we have arrangements directly, or the financial services industry or economy in general. These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry. These factors could involve financial institutions or financial services industry companies with which we have financial or business relationships but could also include factors involving financial markets or the financial services industry generally.

The results of events or concerns that involve one or more of these factors could include a variety of material and adverse impacts on our current and projected business operations and our financial condition and results of operations. These could include, but may not be limited to, delayed access to deposits or other financial assets or the uninsured loss of deposits or other financial assets, and/or the inability to refund, roll over or extend the maturity of, or enter into new credit facilities or other working capital resources.

In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all. Any decline in available funding or access to our cash and liquidity resources could, among other risks, adversely impact our ability to achieve our strategic goals or cover our operating expenses, financial obligations or fulfill our other obligations, result in breaches of our financial and/or contractual obligations or result in violations of federal or state wage and hour laws. Any of these impacts, or any other impacts resulting from the factors described above or other related or similar factors not described above, could have material adverse impacts on our liquidity and our current and/or projected business operations and financial condition and results of operations.

***Changes in economic and capital markets conditions, including periods of generally deteriorating real estate industry fundamentals, may significantly affect our results of operations and returns to our stockholders.***

We are subject to risks generally incident to the ownership of real estate investments, including changes in global, national, regional or local economic, demographic or capital market conditions, including economic impacts resulting from actual or perceived instability in the U.S. banking system or as a result of the ongoing conflicts between Russia and Ukraine and conflicts in the Middle East, as well as other factors particular to the locations of our properties. In addition, the threat or imposition of new tariffs may create uncertainty in real estate markets and shift demand for industrial and/or medical office properties. A recession could adversely impact the value of our properties as a result of, among other items, increased tenant defaults under our leases, lower demand for rentable space, as well as potential oversupply of rentable space, each of which could lead to increased concessions, tenant improvement expenditures or reduced rental rates to maintain occupancies. These conditions could also adversely impact the financial condition of the tenants that occupy our properties and, as a result, their ability to pay us rents.

To the extent that a general economic slowdown is prolonged or becomes more severe or real estate fundamentals deteriorate, it may have a significant and adverse impact on the values of our properties, revenues, results from operations, financial condition, liquidity, overall business prospects and ultimately our ability to pay distributions to our shareholders.

------

***If we are unable to maintain the occupancy rates of currently leased space and/or to lease currently available space, if tenants default under their leases or other obligations to us or if our cash flow is otherwise less than we expect, distributions to our shareholders may be delayed or reduced.***

The sales proceeds that could be generated from opportunistic dispositions of our real properties depend in large part on occupancy and rental rates, our success in renting currently available space and the existence of any significant tenant defaults that were not subsequently cured. In calculating the estimated distributions, it was assumed that we would maintain the occupancy rates of currently leased space and that we would not experience any significant tenant defaults during the process of seeking entitlements and selling assets that were not subsequently cured. Negative trends in one or more of these factors may adversely affect the resale value of the properties, which would reduce our distributions. Disposition proceeds and related distributions will be reduced to the extent that we receive less rental income than we expect. We may also decide in the event of a tenant default to restructure the lease, which could require us to substantially reduce the rent payable to us under the lease or make other modifications that are unfavorable to us.

***We may be unable to renew expiring leases or re-lease vacant space on a timely basis or on attractive terms, which could have a material adverse effect on our results of operations and cash flow.***

The Company has approximately 52% of its annual leasing revenue up for renewal in 2026. Current tenants may not renew their leases upon the expiration of their terms and may attempt to terminate their leases prior to the expiration of their current terms. This risk has been increased by tenants working from home during and after the recent pandemic which has resulted in certain tenants re-evaluating the size and/or lay-out of their existing leased premises. If non-renewals or terminations occur, we may not be able to locate qualified replacement tenants and, as a result, we could lose a significant source of revenue while remaining responsible for the payment of our financial obligations. Moreover, the terms of a renewal or new lease, including the amount of rent, may be less favorable to us than the current lease terms, or we may be forced to provide tenant improvements at our expense or provide other concessions or additional services to maintain or attract tenants. Any of these factors could cause a decline in lease revenue or an increase in operating expenses, which would have a material adverse effect on our financial condition, results of operations or cash flows.

***We are subject to risks associated with the financial condition of our tenants.***

Our tenants may experience a downturn in their business resulting in their inability to make rental payments when due. In addition, a tenant may seek the protection of bankruptcy, insolvency or similar laws, which could result in the rejection and termination of such tenant's lease and cause a reduction in our cash flow. We cannot evict a tenant solely because of its filing for bankruptcy. A bankruptcy court, however, may authorize a tenant to reject and terminate its lease. In such a case, our claim against the tenant for past due rent and unpaid future rent would be subject to a statutory cap that might be substantially less than the remaining rent owed under the lease. In any event, it is unlikely that a bankrupt tenant will pay the entire amount it owes us under a lease. The loss of rental payments from tenants would likely reduce proceeds from real property dispositions and distributions from such proceeds.

The Coronavirus pandemic has affected and will likely for the foreseeable future affect the markets in which our tenants operate and otherwise impact our facilities, which will adversely impact the businesses of our tenants and, in turn, our business, financial condition, results of operations and our ability to pay distributions.

***The loss of a major tenant could adversely affect our financial condition.***

We are and expect that we will continue to be subject to a degree of tenant concentration at certain of our operating properties. As indicated above, we are subject to risks associated with the financial condition of our tenants. In the event that a tenant occupying a significant portion of one or more of our properties or whose rental income represents a significant portion of the rental revenue at such property or properties were to experience financial weakness, default on its lease, elect not to renew its lease or file bankruptcy it would negatively impact our financial condition and, as a result, our distributions. Our existing leases with Stony Brook University Hospital and affiliates comprise approximately 21% of our total rentable square feet and the annual rent is expected to represent approximately 24% of our annual rental revenue for 2026.

The largest medical tenant in the Cortlandt Manor Medical Center represents 14% of our total rentable square feet as of December 31, 2025. The annual rent from such tenant is expected to represent approximately 34% of our annual rental revenue for 2026.

***We may experience increased operating costs, which might reduce our estimated net assets and the sales prices received for our properties.***

Our properties are subject to increases in operating expenses such as for cleaning, electricity, heating, ventilation and air conditioning, administrative costs and other costs associated with security, landscaping and repairs and maintenance of our properties. In general, under our leases with tenants, we pass through all or a portion of these costs to them. There can be no assurance that tenants will actually bear the full burden of these higher costs, or that such increased costs will not lead them, or other prospective tenants, to seek space elsewhere. If operating expenses increase, the availability of other comparable space in the geographic markets of our properties might limit our ability to increase rents; if operating expenses increase without a corresponding increase in revenues, our profitability could diminish thereby reducing our estimated proceeds on disposition of real properties and limit the amount and likely delay the timing of our distributions.

------

***Some of our potential losses may not be covered by insurance.***

We use our discretion in determining amounts, coverage limits and deductibility provisions of insurance, with a view to maintaining appropriate insurance coverage on our properties at a reasonable cost and on suitable terms. This may result in insurance coverage that, in the event of a substantial loss, would not be sufficient to pay the full current market value or current replacement cost of the property and also may result in certain losses being totally uninsured. Inflation, changes in building codes, zoning or other land use ordinances, environmental considerations or other factors might not make it feasible to use insurance proceeds to replace a building after such building has been damaged or destroyed. Under such circumstances, the insurance proceeds, if any, received by us might not be adequate to restore our economic position with respect to such property.

***We may incur costs to comply with environmental laws.***

The obligation to pay for the cost of complying with existing environmental laws, ordinances and regulations, as well as the cost of complying with future legislation, may increase our operating costs. Under various federal, state and local environmental laws, ordinances and regulations, a current or previous owner or operator of real property may be liable for the costs of removal or remediation of hazardous or toxic substances on or under the property. Environmental laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances and whether or not such substances originated from the property. Insurance that we maintain related to potential environmental issues on our properties may not be adequate to cover all possible contingencies.

Legislative or regulatory initiatives related to global warming/climate change concerns may negatively impact our business. Recently, there has been an increasing focus and continuous debate on global climate change including increased attention from regulatory agencies and legislative bodies. For example, on March 21, 2022 the Securities and Exchange Commission proposed new rules that would require registrants to provide information on greenhouse-gas emissions and risks related to climate change in their registration statements and annual reports. This increased focus may lead to new initiatives directed at regulating an as yet unspecified array of environmental matters. Legislative, regulatory or other efforts in the U.S. to combat climate change could result in future increases in the cost of raw materials, taxes, transportation and utilities for our vendors and for us which would result in higher operating costs for the Company. Also, compliance with new and revised environmental, zoning, land-use or building codes, laws, rules or regulations, could have a material and adverse effect on our business. However, we are unable to predict at this time, the potential effects, if any, that any future environmental initiatives may have on our business.

***Our business, operations and timelines for pursuing entitlements, property sales and distributions of proceeds could be adversely affected by the Coronavirus pandemic.***

The global health crisis caused by the novel coronavirus ("COVID-19") pandemic and its resurgences has and may continue to negatively impact economic activity, which, despite progress in vaccination efforts, remains uncertain and cannot be predicted with confidence. The long-term impact of the pandemic on our liquidation plan cannot be predicted at this time, and could depend on numerous factors, including the impact of work-from-home and telemedicine on real property utilization trends, vaccination rates among the population, effectiveness of COVID-19 vaccines and responses by governmental bodies and regulators, including in particular those local authorities that preside over our entitlement process.

Although the Company's ongoing operations have appeared to recover generally from the effects of the COVID-19 pandemic, the pandemic has resulted and may continue to result in delays in necessary interactions with local authorities and ultimately delays in receiving approvals from such authorities due to limitations in employee resources or forced furlough of government employees. Such effects will likely for the foreseeable future to continue to impact our timeline for pursuing entitlements, selling our properties and making distributions.

Also, the Company's ability to operate seamlessly and limit any adverse impact on our forecasted Net Asset Value will depend in part on whether any of our key employees are infected by the Coronavirus and become ill from COVID-19.

As the impact of the COVID-19 pandemic on our efforts to secure entitlements evolves, the Company will continue to monitor the impact on the Company and respond appropriately. At this time, however, it is difficult to predict to what degree further disruption might impact the Company's operations and financial results or how the potential strategic impacts of COVID-19 will affect our entitlement process.

***A sustained or further increase in inflation could have an adverse impact on our operating expenses, and higher interest rates could result in lower sales proceeds from future dispositions****.*

In an effort to control inflation, the Federal Reserve in March 2022 began, has continued, and is expected to continue, to raise interest rates. During periods of increasing interest rates, real estate valuations have generally decreased as a result of rising capitalization rates, which tend to be positively correlated with interest rates. Consequently, prolonged periods of higher interest rates may negatively impact the valuation of our properties and result in lower sales proceeds from future dispositions.

------

A sustained or further increase in inflation could have an adverse impact on our operating expenses incurred in connection with, among other things, repairs and maintenance, janitorial, utilities, security and insurance. Some of our operating expenses may be recoverable through our lease arrangements. Substantially all of our developed properties are subject to leases in which the tenant reimburses the Company for a portion, all of or substantially all of the costs and/or cost increases for utilities, insurance, repairs, maintenance and real estate taxes. Certain leases provide that the Company is responsible for certain operating expenses. There can be no assurance that our tenants would be able to absorb these expense increases and be able to continue to pay us their portion of operating expenses, capital expenditures and rent. Also, due to rising costs, our tenants may be unable to continue operating their businesses altogether. Alternatively, our tenants may decide to relocate to areas with lower rent and operating expenses. Such adverse impacts on our tenants may cause increased vacancies, which may add pressure to lower rents and increase our expenditures for re-leasing resulting in reduced sale proceeds.

***Our common shares are thinly traded and there may not be an active, liquid trading market for our common shares.***

Our common shares are thinly traded and have substantially less liquidity than the average trading market for many other publicly traded companies. Thinly traded stocks can be more volatile than stock trading in an active public market. Our stock price has been volatile in the past and several factors could cause the price to fluctuate substantially in the future. These factors include but are not limited to our announcement of developments related to our plan to sell our properties opportunistically (some of which are or may be the subject of enhancement efforts), stock performance of other companies deemed to be peers, news reports of issues related to REITs or other real property owners and the real estate market and market forces generally. Over the past several years, the stock market has experienced a high level of price and volume volatility, and market prices for the stock of many companies, including those in the real estate sector, have experienced wide price fluctuations that have not necessarily been related to operating performance. Our stock price may fluctuate significantly in the future, and these fluctuations may be unrelated to our performance. General market declines or market volatility in the future, especially in the real estate sector of the economy, could adversely affect the price of our common shares, and the current market price may not be indicative of future market prices. There is no guarantee that an active trading market for our common shares will be maintained on Nasdaq, or that the volume of trading will be sufficient to allow for timely trades. Investors may not be able to sell their shares quickly or at the latest market price if trading in our stock is not active or if trading volume is limited. In addition, if trading volume in our common shares is limited, trades of relatively small numbers of shares may have a disproportionate effect on the market price of our common shares. Therefore, our shareholders may not be able to sell their shares at the volume, prices or times that they desire.

***If our common shares are delisted from Nasdaq, shareholders may find it difficult to dispose of their shares.***

We believe we are currently in compliance with all of our Nasdaq listing requirements. Nevertheless, there are no assurances that we will be able to sustain long-term compliance with Nasdaq's stockholders' equity requirement or minimum bid price requirement for continued listing, particularly as we reduce our overall assets through the distribution of sales proceeds to our shareholders. If we fail to maintain compliance with applicable Nasdaq listing requirements, our common shares may be delisted by Nasdaq involuntarily. In addition, even if we are successful in maintaining compliance with applicable Nasdaq listing requirements, our board of directors may decide that the costs of compliance and the demands of management time and Company resources required to maintain our Nasdaq listing are greater than the benefits received by the Company and its shareholders from being a listed company and that, accordingly, consistent with other cash management and cost reduction measures that we have implemented, we should voluntarily delist from the Nasdaq Capital Market. If our common shares were delisted from Nasdaq voluntarily or involuntarily, trading of our common shares most likely will be conducted in the over-the-counter market on an electronic bulletin Board established for unlisted securities such as OTCQX, OTCBX or OTC Pink which will reduce the market liquidity of our common shares. Delisting may result in lower levels of ownership and trading by institutional shareholders, who are generally guided by quantitative and qualitative investment standards such as market capitalization, minimum share price and liquidity, which in turn often produces lower trading volumes and reduced liquidity. As a result, an investor would find it more difficult to dispose of, or obtain accurate quotations for the price of, our common shares. Also, many brokers will not allow customers to hold non-listed securities in managed accounts or place restrictions which inhibit holding or trading, and it is generally understood that brokers will not recommend non-listed securities to retail clients, perhaps not as official policy but rather as a practical reality. We cannot assure you that our common shares, if delisted from Nasdaq voluntarily, or if they would be delisted involuntarily by Nasdaq, will be listed on another national securities exchange or quoted on an over-the counter quotation system.

***We do not anticipate making distributions other than distributions from property dispositions or of liquidation proceeds.***

We have not paid any dividends other than the following special dividends/distributions:

● June 15, 2016- A special distribution of $9.25 per share.

● September 15, 2016- A special distribution of $1.50 per share.

● July 7, 2017 – A special distribution of $1.00 per share.

------

We have a history of operating losses and we anticipate operating losses in the future. There can be no guarantee that we will have income to distribute other than proceeds from the sale of properties or of the Company, and we may not make any dividends or distributions in the future other than distributions of proceeds on the sale of the Company or any of our assets.

***The value of our medical office park may be affected by factors in the healthcare industry.***

Approximately 31,400 square feet of our rentable space and approximately 30% of our gross revenues for 2025 was attributable to our medical office property. The medical office property is subject to various operating risks common to the healthcare industry, many of which are beyond our control, including the following:

• adverse trends in healthcare provider operations, such as changes in the demand for and methods of delivering healthcare services, changes in third party reimbursement policies, significant unused capacity in certain areas, which has created substantial competition for patients among healthcare providers in those areas, increased expense for uninsured patients, increased competition among healthcare providers, increased liability insurance expense, continued pressure by private and governmental payors to reduce payments to providers of services and increased scrutiny of billing, referral and other practices by federal and state authorities and private insurers;

• competition from other medical properties in our markets;

• over-building of medical parks in our markets, which adversely affects occupancy and revenues at our properties;

• hospitals servicing the local markets increasing their interest in employing private practitioners or increasing their real estate portfolio of medical office space for rent or real estate/medical practice related joint ventures;

• reductions in medical reimbursements from Medicaid and Medicare which directly impact private practitioners;

• unknown or unidentified adverse consequences from federal healthcare legislation on private practitioners will adversely affect our medical properties in the form of rent rates and tenant reimbursements; and

• changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances.

***Investment in medical parks is capital intensive.***

Our medical properties require periodic capital expenditures and renovation to remain competitive. Maintaining our occupancy upon renewals or locating new tenants may require rent concessions, tenant improvements or a combination of both. Additionally, the recent federal healthcare legislation has caused some medical professionals to increase their space requirements. Our ability to relocate our tenants into more suitable space within our medical parks may be limited due to the size of the suites currently vacant and the willingness of tenants to relocate within the building. Our ability to fund capital expenditures may be limited.

***Our medical office properties and tenants are subject to competition*.**

Our medical office properties face competition from nearby hospitals and other medical office buildings that provide comparable services. Some of those competing facilities are owned by governmental agencies and supported by tax revenues, while others are owned by nonprofit corporations and may be supported to a large extent by endowments and charitable contributions. These types of financial support are not available to the medical office property we own. Similarly, our medical office tenants face competition from other medical practices in nearby hospitals and other medical facilities. Further, referral sources, including physicians and managed care organizations, may change their lists of hospitals or physicians to which they refer patients. Competition and loss of referrals could adversely affect our tenants' ability to make rental payments, which could adversely affect our rental revenues. Any reduction in rental revenues resulting from the inability of our medical office buildings and our tenants to compete successfully may have an adverse effect on our business, financial condition and results of operations and our ability to make distributions to our shareholders.

***Federal health care legislation has affected medical office real estate.***

Our tenants in our Cortlandt Manor property are healthcare service providers. The healthcare industry is currently experiencing rapid regulatory changes and uncertainty; changes in the demand for and methods of delivering healthcare services; changes in third-party reimbursement policies; expansion of insurance providers into patient care; continuing pressure by private and governmental payors to reduce payments to providers of services; and increased scrutiny of billing, referral and other practices by governmental authorities. These factors may adversely affect the economic performance of some or all of our medical office tenants and, in turn, our performance.

------

Our healthcare tenants are also subject to extensive federal, state, and local licensure laws, regulations and industry standards governing business operations, the physical plant and structure, patient rights and privacy and security of health information. Our tenants' failure to comply with any of these laws could result in loss of licensure, denial of reimbursement, imposition of fines or other penalties, suspension or exclusion from the government sponsored Medicare and Medicaid programs, loss of accreditation or certification, or closure of the facility. In addition, efforts by third-party payors, such as the Medicare and Medicaid programs and private insurance carriers, including health maintenance organizations and other health plans, impose greater discounts and more stringent cost controls upon healthcare provider operations (through changes in reimbursement rates and methodologies, discounted fee structures, the assumption by healthcare providers of all or a portion of the financial risk or otherwise). Our tenants may also face significant limits on the scope of services reimbursed and on reimbursement rates and fees, all of which could impact their ability to pay rent or other obligations to us. Referral sources, including physicians and managed care organizations, may change their lists of hospitals or physicians to which they refer patients. Competition and loss of referrals could adversely affect our tenants' ability to make rental payments, which could adversely affect our rental revenues. Any reduction in rental revenues resulting from the inability of our medical office buildings and our tenants to compete successfully may have an adverse effect on our business, financial condition and results of operations and our ability to make distributions to our shareholders.

***Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our properties and harm our financial condition.***

Because real estate investments are relatively illiquid, our ability to promptly sell one or more properties in the portfolio in response to changing economic, financial and investment conditions is limited.

The real estate market is affected by many factors that are beyond our control, including:

• adverse changes in international, national, regional and local economic and market conditions;

• changes in interest rates and in the cost and terms of debt financing;

• absence of liquidity in credit markets which limits the availability and amount of debt financing;

• changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances;

• the ongoing need for capital improvements, particularly in older structures;

• changes in operating expenses; and

• civil unrest, acts of God, including earthquakes, floods and other natural disasters, and acts of war or terrorism, including the consequences of the terrorist acts, such as those that occurred on September 11, 2001.

***We are subject to risks stemming from the New York State budgets.***

Our industrial park borders Stony Brook University and our leases with the University, including leases with the University's affiliates, represent over 21% of our overall rentable space. The New York State budget puts additional pressure on Stony Brook University, part of the State University of New York system, to cut costs. Many of our tenants service the local area and may be adversely affected by a reduction in business from Stony Brook University. Stony Brook University and its affiliates currently have three leases with Gyrodyne comprising approximately 34,000 square feet and $534,000 in annual rental revenue.

***Our investments are concentrated in a single industry, making us more vulnerable economically than if our investments were more diversified.***

We are subject to risks inherent in concentrating investments in real estate. The risks resulting from a lack of diversification become even greater as a result of our historical business strategy to invest primarily in healthcare properties. A downturn in the real estate industry could materially adversely affect the value of our facilities. A downturn in the healthcare industry could negatively affect our tenants' ability to make lease payments to us. Consequently, our ability to meet debt service obligations or make distributions to our shareholders is dependent on the real estate and healthcare industries.

------

***Geographic concentration of our properties will make our business vulnerable to economic downturns in the New York metropolitan area.***

All our remaining properties are located in the New York metropolitan area, specifically Northern Westchester and eastern Long Island. Economic conditions in these locations will significantly affect our revenues and the value of our properties. Business layoffs or downsizing, industry slowdowns, changing demographics, the COVID-19 pandemic and other similar factors may adversely affect the economic climate in these areas. Any resulting oversupply or reduced demand for space in the New York metropolitan area would therefore have a disproportionate negative impact on our revenues.

***We are subject to risks associated with renovations and capital improvements.***

Our properties have an ongoing need for renovations and other capital improvements, including replacement of HVAC systems, parking lots, and other structural items. Tenants often require us to make periodic capital improvements as a condition of renewing leases. Capital improvements and renovation projects may give rise to the following risks:

• possible environmental problems;

• construction cost overruns and delays;

• a possible shortage of available cash to fund capital improvements and the related possibility that financing for these capital improvements may not be available to us on affordable terms; and

• uncertainties as to market demand or a loss of market demand after capital improvements have begun.

The costs associated with capital improvements on our properties could adversely affect our financial condition.

***Cybersecurity risks and cyber incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our tenant and other business relationships, all of which could negatively impact our financial condition.***

A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of our information resources. These incidents may be an intentional attack or an unintentional event and could involve gaining unauthorized access to our information systems for purposes of misappropriating assets, stealing confidential information, corrupting data or causing operational disruption. The result of these incidents may include disrupted operations, misstated or unreliable financial data, liability for stolen assets or information, increased cybersecurity protection and insurance costs, litigation and damage to our tenant and investor relationships. As our reliance on technology has increased, so have the risks posed to our information systems, both internal and those we have outsourced. There is no guarantee that any processes, procedures and internal controls we have implemented or will implement will prevent cyber intrusions, which could have a negative impact on our financial condition, operations, tenant and other business relationships or confidential information.

***Our mortgage indebtedness could adversely impact the value of our shareholders***' ***investment if the value of the property securing the debt falls or if we are forced to refinance the debt during adverse economic conditions.***

The Company secured a non-revolving credit line for up to $3,000,000 (the "Original Line") with a bank, which closed on March 21, 2018. The original line included an interest only phase. On April 30, 2021, the loan converted to the Permanent Phase with an outstanding principal balance of $2,200,000. During the Permanent Phase, the Company is paying interest at a fixed rate of 3.85%, plus principal based on a 20-year amortization period. The loan will mature on April 30, 2028. The outstanding balance as of December 31, 2025 was $1,828,416.

To secure access to additional working capital through the final sale date of the Flowerfield industrial buildings, the Company secured a second loan evidenced by a non-revolving business line of credit agreement and promissory note with the Original Line bank for up to $3,000,000, which closed on January 24, 2019. This loan included an interest only phase. On May 20, 2021, the loan converted to the Permanent Phase with an outstanding principal balance of $3,000,000. During the Permanent Phase, the Company pays interest at a fixed rate of 3.85%, plus principal based on a 20-year amortization period. The loan will mature on May 20, 2028. The outstanding balance as of December 31, 2025 was $2,503,293.

Both lines are secured by approximately 31.8 acres of the Flowerfield Industrial Park including the related buildings and leases. As of December 31, 2025, the Company is in compliance with the loan covenants. The Company anticipates modifying the terms of the loans following the completion of the subdivision so that the loans remain secured by the subdivided industrial park lot only.

------

On September 15, 2021, the Company, through its subsidiary GSD Cortlandt, LLC ("GSD Cortlandt"), secured a $4.95 million term loan (the "2021 Mortgage Loan") from Signature Bank, the proceeds of which were used to pay off the previous GSD Cortlandt debt facility of which $1,050,000 was outstanding. The term of the 2021 Mortgage Loan is five years with an option to extend for an additional five years (the "Extension Period"). Until the initial maturity date, the 2021 Mortgage Loan bears interest at an annual rate equal to 3.75%. If the maturity date is extended for the Extension Period, the rate of interest on the 2021 Mortgage Loan will adjust and be fixed for the Extension Period to the greater of (i) 3.75% or (ii) 275 basis points in excess of the weekly average yield on United States Treasury Securities adjusted to a constant maturity of five years as most recently made available by the Federal Reserve Board as of thirty days prior to the first day of the Extension Period. The 2021 Mortgage Loan will be paid in monthly installments of principal and interest calculated on the basis of a thirty-year amortization schedule. If the maturity date is extended for the Extension Period, the amount of each monthly installment will be recalculated for the Extension Period based on the adjusted interest rate on the Mortgage Loan and an amortization schedule of twenty-five years. The lender has the right, but not the obligation, to decline to extend the term of the 2021 Mortgage Loan if the loan to value ratio of the property is greater than seventy percent (70%), or the property does not support a debt service coverage ratio (as calculated by the lender) of at least 1.3 to 1, in each case on the date the extension is exercised.

The 2021 Mortgage Loan may be prepaid in whole or in part, at any time, provided the borrower (GSD Cortlandt) pays the bank with each prepayment a prepayment fee equal to (i) during the first loan year and, if applicable, the first loan year of the Extension Period, five percent of the amount of such prepayment; (ii) during the second loan year and, if applicable, during the second loan year of the Extension Period, four percent of the amount of such prepayment; (iii) during the third loan year and, if applicable, during the third loan year of the Extension Period, three percent of the amount of such prepayment; (iv) during the fourth loan year and, if applicable, during the fourth loan year of the Extension Period, two percent of the amount of such prepayment; and (v) during the fifth loan year and, if applicable, during the fifth loan year of the Extension Period, one percent of the amount of such prepayment. There will be no prepayment fee for any prepayment made during the sixty-day period immediately preceding the initial maturity date or the last sixty days of the Extension Period. All prepayments must include accrued and unpaid interest through the date of prepayment. If the Cortlandt Manor property is sold to a bona fide third-party purchaser within the initial two years of the term of the 2021 Mortgage Loan, the prepayment fee to be paid upon repayment of the 2021 Mortgage Loan in full will be reduced by fifty percent. The outstanding balance as of December 31, 2025 was $4,558,993.

The 2021 Mortgage Loan is secured by the Cortlandt Manor property located at 1985 Crompond Road (5.01 acres).

On December 27, 2023, the Company, through its subsidiaries GSD Cortlandt, LLC ("GSD Cortlandt") and Buttonwood Acquisition, LLC ("Buttonwood"), secured a term mortgage loan (the "2023 Mortgage Loan") in the principal amount of $1,500,000 with LLYR Resources, LLC ("LLYR"). The net proceeds of the 2023 Mortgage Loan will be used for general working capital. The 2023 Mortgage Loan is unconditionally and irrevocably guaranteed by the Company. The term of the 2023 Mortgage Loan is two years. Until the maturity date, the 2023 Mortgage Loan bears interest at a floating interest rate of 1.5% per annum in excess of the Wall Street Prime Rate, with such interest payable monthly, which may be prepaid, in whole or in part, at any time, without payment of a prepayment fee.

The 2023 Mortgage Loan is secured by a first mortgage in the amount of $1,500,000 on the interests of GSD Cortlandt in 1989 Crompond Road and 1987 Crompond Road in Cortlandt Manor, New York, and the interests of Buttonwood in 206 Buttonwood Avenue and certain vacant land off of Buttonwood Road in Cortlandt Manor, New York. The Company closed on a loan modification with the LLYR to extend the loan for an additional 24 months commencing January 1, 2026 at a revised interest rate of 15% which the Company may refinance with no early repayment penalty.

On February 1, 2024, an agreement was signed with one vendor who had previously agreed to defer 50% of payment until the closing of the first property lot sale that is the subject of either the Flowerfield or Cortlandt Manor subdivision. The agreement called for a $200,000 payment on outstanding invoices, plus an interest payment on such invoices, interest to be accrued on the outstanding balance, agreement to pay all future invoices in full, and conversion of the remaining outstanding balance of $477,829 (balance after the $200,000 payment) to a loan payable within 15 days of the sale of one of the Company's properties. The loan accrued interest at 0.75% per month through 2024 and is accruing interest at 1.0% per month from January 2025.

***Changes in federal tax law could adversely affect the tax treatment of distributions to our shareholders.***

Legislative, regulatory or administrative changes could be enacted or promulgated at any time, either prospectively or with retroactive effect, and may adversely affect the Company and our shareholders. Gyrodyne is not subject to an entity level income tax but rather is treated as a partnership for tax purposes, with its items of income, gain, deduction, loss and credit being reported on the Company's information return, on Form 1065, and allocated annually on Schedule K-1 to our shareholders pro rata. Tax legislation informally known as the Tax Cuts and Jobs Act of 2017 (the "2017 Tax Cuts and Jobs Act") was signed into law on December 22, 2017, generally effective for taxable years beginning on or after January 1, 2018. In addition to modifying income tax rates for individuals and corporations, the 2017 Tax Cuts and Jobs Act made certain changes to the tax treatment for pass-through entities, such as Gyrodyne.

------

***Loss of key management personnel.***

Our success depends to a significant extent upon the continuing efforts of Gary Fitlin, our Chief Executive Officer and Chief Financial Officer, and Peter Pitsiokos, our Chief Operating Officer. We have programs in place that have been designed to motivate, reward and retain such executive officers, including employment agreements and our Retention Bonus Plan. Nevertheless, the loss or unavailability of either of our executive officers due to retirement, resignation, COVID-19 or otherwise could have a material adverse effect on our business, financial condition and results of operations in general, and our efforts to position our properties to maximize values and distributions to shareholders in particular, if we are unable to retain our executive officers. In addition, the Company's controller resigned as a full-time employee as of February 28, 2025. The former controller continues to provide certain services to the Company under the terms of a consulting agreement dated as of March 1, 2025 (the "Consulting Agreement"). Nevertheless, the Company may find it necessary to hire another person to perform certain functions not covered by the Consulting Agreement and be prepared to assume such functions that are covered by the Consulting Agreement in the event the Consulting Agreement is terminated. If the Company is required to hire such additional person, the cost of doing so could have a material adverse effect on our business, financial condition and results of operations in general.

***We have entered into an agreement to sell a significant portion of our Flowerfield property, but the transaction is contingent on receiving subdivision and site plan approval, which may take years or may not be obtained at all. In the meantime, we expect to continue to incur operating losses and have limited cash runway.***

As part of our strategic plan to position our remaining real estate assets to maximize value, sell those assets at their highest achievable prices, distribute the net proceeds to shareholders and ultimately dissolve the Company, we have entered into an agreement to sell approximately 49 undeveloped acres of our Flowerfield property to B2K Smithtown LLC ("B2K"), an affiliate of B2K Development LLC. The closing of the sale is contingent upon receipt of all required governmental approvals, including final subdivision and site plan approvals. The process for securing these approvals is subject to a variety of risks outside our control, and may take years, if achieved at all.

In the interim, we expect to continue incurring operating losses. We currently have available cash resources sufficient to fund operations for approximately 18 months absent the sale of any other real estate assets which we are currently pursuing. The Company will entertain a wide range of options to meet its capital needs through the completion of the liquidation. These risks could materially and adversely affect the value of our shares and the timing and amount of any potential liquidation distribution.

The Company intends to seek to modify one or more of its existing loan facilities to strengthen its financial position through the end of 2028, the forecasted completion of the liquidation process. The Company's goal with respect to any such modification is for its current cash and cash equivalent position post-loan modification to be adequate to fund our process of seeking entitlements and selling assets through such forecasted liquidation completion date. Management believes the Company will need additional capital to properly fund operations through the end of 2028 absent sufficient working capital raised through the combination of property sales or the modification of its existing credit facilities and or new credit facilities, or other alternative capital raising strategies. There can be no assurance, however, that the Company will be successful in securing any such loan modification/ and/or new credit facilities on terms that are satisfactory to the Company or on any terms at all or achieve a timely closing on the sale of a property to address its working capital needs.

**Item 1B. Unresolved Staff Comments.**

None

**Item 1C. Cybersecurity**

*Risk Management and Strategy*

We recognize the critical importance of developing, implementing, and maintaining robust cybersecurity measures to safeguard our information systems and protect the confidentiality, integrity, and availability of our data.

*Managing Material Risks & Integrated Overall Risk Management*

We have strategically integrated cybersecurity risk management into our broader risk management framework to promote a company-wide culture of cybersecurity risk management. This integration ensures that cybersecurity considerations are an integral part of our decision-making processes at every level. Our management team works closely with our IT service provider to continuously evaluate and address cybersecurity risks in alignment with our business objectives and operational needs.

*Oversee Third-party Risk*

Because we are aware of the risks associated with third-party service providers, we have implemented stringent processes that isolate the Company's financial and operating records from any other systems including email and other internet applications.

------

**Item 2. Properties.**

The executive office of the Company is located at 1 Flowerfield, Suite 24, St. James, New York and consists of approximately 3,256 square feet.

**Real Estate Investments**

The Company owns a 63-acre property located in St. James, in the Town of Smithtown on the North Shore of Suffolk County, Long Island, New York. The property currently has 130,009 square feet of rental space and is approximately 82% occupied by 28 tenants. In addition, the Company owns a medical office park which consists of five buildings located in Cortlandt Manor, New York, just outside the city of Peekskill, New York. The property has 31,421 square feet of rental space and is currently 82% occupied by three tenants.

During 2025 and 2024, land entitlement costs incurred were approximately $380,400 and $442,300, respectively. The Company continues to believe the pursuit of entitlements will increase the development flexibility of our properties.

Following the Merger, effective September 1, 2015, the Company adopted the liquidation basis of accounting and therefore reports the land and buildings on the Consolidated Statement of Net Assets at net realizable value. The net realizable value on December 31, 2025 is estimated to be $53,990,000. This value includes some but not all of the increase in value the Company believes is achievable from enhancement efforts.

The average age of the buildings on our properties is approximately 65 years at Flowerfield and 35 years at Cortlandt Manor. All 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 average for facilities of this age. The grounds feature landscaping, are neatly groomed and well maintained.

There are four buildings in the Flowerfield Industrial Park with rental unit sizes ranging from 140 to 26,573 square feet. Given the location and size of rental units, the Flowerfield Industrial Park attracts tenants ranging in size from Stony Brook University and the Stony Brook University Hospital to many smaller companies that are not dependent on extensive material or product handling. In the five buildings located in the Cortlandt Medical Center, the rental size units range from 1,253 to 3,943 square feet and consist primarily of medical professionals.

The Company maintains liability umbrella policies 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 December 31, 2025 for each of the properties:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  | Annual |  | Number Of |
|  |  |  |  | Base |  | Tenants Who |
|  | Rentable |  | Annual | Rent | Number | Occupy 10% |
|  | Square | Percent | Base | Per Leased | Of | Or More Of |
| Property | Feet | Leased | Rent | SQ. FT. | Tenants | Rentable Sq. Ft. |
| Flowerfield Industrial Park | 130009 | 82% | $1469349 | $13.76 | 28 | 2 |
| Cortlandt Medical Center | 31421 | 82% | $872338 | $33.95 | 3 | 1 |
| All Locations | 161430 | 82% | $2341687 | $17.68 | 31 | 3 |

---

The following table sets forth scheduled lease expirations on the properties as of December 31, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  |  | % of Gross Annual |
|  | Number of | Square | Total | Rental Revenues |
|  | Leases | Feet | Annual | Represented |
| Fiscal Year End | Expiring | Expiring | Rent | By Such Leases |
| 2026 | 15 | 45000 | $1174000 | 52.18% |
| 2027 | 12 | 17000 | 224000 | 9.94% |
| 2027 | 4 | 8000 | 130000 | 5.78% |
| 2027 | 1 | 2000 | 35000 | 1.53% |
| 2030 | 2 | 30000 | 496000 | 22.03% |
| Thereafter | 1 | 17000 | 192000 | 8.54% |

---

The properties are located in St. James and Cortlandt Manor, both of which are in New York State. In June 2017, the Company filed a subdivision application for the Flowerfield property along with the previously sold catering facility totaling approximately 74 acres with the Town of Smithtown. Additionally, the Company filed an application with the Town of Cortlandt Manor on the development of that property on March 31, 2017 (see, "Property Value Enhancement", above).

------

**Item 3. Legal Proceedings.**

***Putative Class Action Lawsuit***

On August 14, 2015, the Company entered a Stipulation of Settlement (the "Settlement") providing for the settlement of a putative class action lawsuit against the Company and certain related parties. Under the Settlement, Gyrodyne agreed that any sales of its properties would be effected only in arm's-length transactions at prices at or above their appraised values as of 2014.

As of December 31, 2025, the aggregate appraised value of our remaining unsold properties exceeded the respective 2014 aggregate appraised value for such properties. See, "Risk Factors – Stipulation of Settlement prohibits us from selling our remaining properties at prices below the December 2014 appraised values".

***Article 78 Proceeding***

On April 26, 2022, the Incorporated Village of Head of the Harbor and certain other parties commenced a special proceeding (the "Article 78 Proceeding") against the Town of Smithtown and certain other parties, including the Company, seeking to annul the Planning Board's determinations relating to the Flowerfield Subdivision Application. The Article 78 Proceeding was commenced by the filing of a petition (the "Petition") in the Supreme Court of the State of New York, Suffolk County, pursuant to Article 78 of New York's Civil Practice Law and Rules ("Article 78"). Specifically, the Petition seeks to annul the Planning Board's (i) approval of a findings statement, pursuant to the SEQRA, dated September 16, 2021, and adopted by the Planning Board on March 30, 2022, concerning the Flowerfield Subdivision Application, and (ii) preliminary approval on March 30, 2022, of the Flowerfield Subdivision Application. The arguments made in the Petition are substantially similar to those made by opponents of the Flowerfield Subdivision Application during the SEQRA and subdivision process. The Company and the Town of Smithtown are vigorously defending the Planning Board's determinations against the Petition. In June 2022, Gyrodyne and the Town of Smithtown filed motions to dismiss the Petition. During the third quarter of 2023, the Article 78 Proceeding was re-assigned to a different judge for the second time. On February 6, 2024, the Supreme Court of the State of New York, Suffolk County issued an order (the "Order"), denying the Motions in part and granting them in part. Specifically, the Order (i) denied the Motions as to three individual Petitioners and the St. James-Head of the Harbor Neighborhood Preservation Coalition, Inc., (ii) granted the Motions as to the remaining twenty (20) individual Petitioners and the Village of Head of the Harbor, (iii) denied the branch of Gyrodyne's motion alleging that Petitioners failed to state a claim. On October 11, 2024, the Supreme Court of the State of New York issued a ruling in favor of the Company dismissing the Article 78 petition in its entirety. On October 28, 2024, the Company received a notice of appeal filed by the petitioners in this proceeding seeking to appeal the court's dismissal of the Article 78 petition, citing as grounds for appeal "whether the court erred in denying the petition and dismissed the Article 78 proceeding, and any and all other issues which may arise upon further review of the record on appeal".

On November 12, 2024, the petitioners filed a notice of motion to renew and reargue, seeking to have the court direct the respondents

to undertake a supplemental environmental impact statement to address retaining of storm water at the property being developed in light of a recent storm, and to annul the resolution approving the preliminary site plan.

On March 17, 2025, the Supreme Court of the State of New York, Suffolk County issued an order denying the appellants motion to stay enforcement of the order, pending hearing and determination of appeal. On March 21, 2025, the Supreme Court of the State of New York, Suffolk County issued an order denying the Petitioners motion to renew and reargue. On April 16, 2025 the Petitioners filed a notice of appeal seeking to appeal the March 17, 2025 order denying the appellants motion to stay enforcement of the order dismissing the Petition pending the appeal.

On April 28, 2025 the Petitioners perfected their appeal on the original Petition. The Petitioners' memorandum of law largely repeats their earlier position and arguments, which the Supreme Court previously found to be an insufficient basis for overturning the Planning Board's determinations. Gyrodyne filed its response to the Appeal on July 25, 2025 and the Town submitted its reply to the Appeal on July 28, 2025.

Pleadings filed in the Article 78 Proceeding may be accessed through a link (and related instructions) to the New York State Unified

Court System which appears on the Company's website at https://www.gyrodyne.com.

***General***

In addition to the foregoing, in the normal course of business, Gyrodyne is a party to various legal proceedings. After reviewing all actions and proceedings pending against or involving Gyrodyne, management considers that any loss resulting from such proceedings individually or in the aggregate will not be material to Gyrodyne's financial condition or results of operations.

**Item 4. Mine Safety Disclosures.**

Not applicable.

------

**PART II**

**Item 5. Market for Registrant**'**s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.**

**Market information**

The Company's common shares began trading on the Nasdaq Capital Market under the symbol "GYRO" beginning September 1, 2015. Prior to the Merger, the Corporation's common shares (symbol: "GYRO") were traded in the Nasdaq Capital Market, the principal market from June 10, 1948. The Company believes it is currently in compliance with all of its Nasdaq listing requirements. See, "Risk Factors -- *If our common shares are delisted from Nasdaq, shareholders may find it difficult to dispose of their shares*".

Approximate number of equity security holders of record (not including beneficial owners holding shares in street name).

---

| | | |
|:---|:---|:---|
|  | Number of Holders of Record | Number of Holders of Record |
| Title of Class | as of March 1, 2026 | as of March 1, 2026 |
| Common shares of limited liability interests |  | 219 |

---

Gyrodyne's corporate strategy is to enhance the value of Flowerfield and Cortlandt Manor by pursuing entitlement opportunities to provide purchasers increased development flexibility, and by enhancing the value of our leases, and then selling our properties in an orderly manner at higher values. The value of the real estate reported in the Statement of Net Assets as of December 31, 2025, includes some but not all of the potential value impact that may result, if any, from such value enhancement efforts. There can be no assurance that our value enhancement efforts will result in property value increases that exceed the costs we incur in such efforts, or even any increase at all. Gyrodyne intends to dissolve after it completes the disposition of all of its real property assets, applies the proceeds of such dispositions first to settle any debts and claims, pending or otherwise, against Gyrodyne, and then pays distributions to holders of Gyrodyne common shares.

Future special distribution declarations are at the discretion of the Company. The magnitude and timing of any special distributions will depend on our actual cash flow, proceeds generated from strategic sales of properties, our financial condition, capital requirements and such other factors as the Company deems relevant. The actual cash flow available to pay special distributions will depend on a number of factors including, among others, the factors discussed under "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of this Annual Report.

The Company does not have an equity compensation plan for its employees or officers but does have a restricted stock compensation plan for its directors effective November 14, 2023.

On March 12, 2024, the Company issued 625,000 Common Shares in connection with the Company's rights offering which closed March 7, 2024, at a subscription price of $8.00 per share, generating gross proceeds of approximately $5.0 million and net proceeds of approximately $4.4 million.

**Sale of Unregistered Securities**

None.

**Equity Compensation Plan Information**

The Gyrodyne, LLC Restricted Stock Award Plan (the "Stock Plan") was approved by the Board on September 5, 2023 and by the shareholders of the Company on October 12, 2023 and became effective on October 12, 2023. Under the Stock Plan, the Company issued to the former director participants in the Retention Bonus Plan (the "Bonus Plan"), in exchange for the waiver and forfeiture of their Bonus Plan benefits, an aggregate of 91,628 Gyrodyne shares, subject to vesting, effective November 14, 2023.

The primary features of the Stock Plan are as follows:

● ***Purpose:*** The purpose of adoption of the Stock Plan was to incentivize the former director participants in the Bonus Plan to exchange their interests in the Bonus Plan for shares in the Company issuable under the Stock Plan, which would allow for compensation plan separation between directors and employees and better alignment of interests between director participants and shareholders.

● ***Eligibility:*** Directors of the Company who were participants in the Bonus Plan were eligible to receive grants under the Stock Plan. The eligible directors were Paul Lamb, Ronald Macklin, Nader Salour and Richard Smith. All such individuals agreed to exchange their Bonus Plan benefits for shares under the Stock Plan, subject to shareholder approval of the Stock Plan. Jan Loeb was not a participant in the Bonus Plan and was not eligible to participate in the Stock Plan.

------

● ***Maximum Shares:*** The total number of shares that were authorized for issuance under the Stock Plan at the effective time is 91,628 shares, or approximately 5.8% of the common shares outstanding at the effective time of the adoption of the Stock Plan after giving effect to the issuance of the Stock Plan shares (or 4.2% of the current total common shares outstanding after giving effect to the rights offering). All 91,628 Stock Plan shares were issued effective November 14, 2023 to Stock Plan participants. There are no remaining shares issuable in the Stock Plan.

● ***Administration:*** Pursuant to the terms of the Stock Plan, the Stock Plan is administered and interpreted by a committee consisting of either (i) the Board, or (ii) the President and at least two other directors appointed by the Board. The committee has full power and authority to administer and interpret the Stock Plan, to make factual determinations and to adopt or amend such rules, regulations, agreements and instruments for implementing the Stock Plan and for the conduct of its business as it deems necessary or advisable, to waive requirements relating to formalities or other matters that do not modify the substance of rights of participants or constitute a material amendment of the Stock Plan, to correct any defect or supply any omission of the Stock Plan or any grant document and to reconcile any inconsistencies in the Stock Plan or any grant document.

● ***Restricted Stock:*** Incentives under the Stock Plan consisted of grants of restricted stock. No shares issued under the Stock Plan, or any interest therein, are transferrable by a participant, whether voluntarily or involuntarily, unless and until a liquidating distribution is made to the shareholders, except by will or by the laws of descent or distribution, and may not be subject to any voluntary or involuntary pledge, assignment, alienation, attachment, or similar encumbrance or transfer. All shares issued in connection with a grant are subject to the terms, conditions, and restrictions set forth in the Company's articles of organization, amended and restated limited liability company agreement, or other governing documents of the Company, as amended.

● ***Vesting:*** Vesting of shares issued under the Stock Plan occurs (i) in equal one-third tranches on each of the first three anniversaries of the grant date, and (ii) at such time as a liquidating distribution is made to the shareholders of the Company. Unvested Stock Plan shares will be forfeited by a participant if such participant is no longer serving on the Board at or prior to such time that liquidating distributions are paid to the shareholders other than as a result of death, disability or failure to be reelected.

● ***Amendments:*** The Board may amend, suspend or terminate the Stock Plan at any time, in its discretion, except that shareholder approval is required for any amendment that increases the number of shares available for grant, accelerates vesting or results in a material increase in benefits or a change in eligibility requirements.

The shares under the Stock Plan were distributed as follows in lieu of the director portion of the Bonus Plan of $2,702,285:

---

| | |
|:---|:---|
| **Board Member** | **Shares of Restricted Stock** |
| Paul Lamb | 30542 |
| Ronald Macklin | 20362 |
| Nader Salour | 20362 |
| Richard Smith | 20362 |
| Total | 91628 |

---

**Issuer Purchases of Equity Securities**

None.

**Item 6. Reserved.**

**Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.**

**Cautionary Statement Concerning Forward**–**Looking Statements**

The statements made in this Form 10-K and in other materials the Company has filed or may file with the Securities and Exchange Commission, in each case 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, and other variations or comparable terminology as well as statements regarding the evaluation of liquidation contingencies. These forward-looking statements are based on the current plans and expectations of management and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those reflected in such forward-looking statements. Such risks and uncertainties include, but are not limited to, risks and uncertainties generally relating to our efforts to enhance the values of our remaining properties and seek the orderly, strategic sale of such properties as soon as reasonably practicable, risks associated with the Article 78 Proceeding against the Company and any other litigation that may develop in connection with our efforts to enhance the value of and sell our properties, risks relating to our national marketing campaign led by JLL for the sale of our Flowerfield and Cortlandt Manor properties, risks associated with our purchase and sale agreement with B2K (and future purchase and sale agreements for our remaining properties that may be contingent on years-long regulatory contingencies) in light of our financial condition, community activism risk, proxy contests and other actions of activist shareholders, regulatory enforcement risk, risks inherent in the real estate markets of Suffolk and Westchester Counties in New York, the potential residual effects of the COVID-19 pandemic, lingering risks relating to the 2023 banking crisis and closure of two major banks (including one with whom we indirectly had a mortgage loan which the FDIC transferred in December 2023 to a new holder following the banks closure), ongoing inflation risk, ongoing interest rate uncertainty, recession uncertainty and supply chain constraints or disruptions and other risks detailed from time to time in the Company's SEC reports. These and other matters the Company discuss in this Report, or in the documents it incorporates by reference into this Report, may cause actual results to differ from those the Company describes. The Company assumes no obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

------

New factors emerge from time to time, and it is not possible for us to predict which factors will affect future results. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results, including the timeline to complete the liquidation, to differ materially from those contained in any forward-looking statement. In particular, it is difficult to fully assess the risks of persistent inflation, high interest rates and possible recession at this time. The Company assumes no obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

**Overview**

When we use the terms "Gyrodyne," the "Company," "we," "us," and "our," we mean Gyrodyne, LLC and all entities owned or controlled by us, including non-consolidated entities. References to "common shares" in this report refer to Gyrodyne, LLC's common shares representing limited liability company interests. We operate as a fully integrated, self-administered and self-managed real estate company focused on pursuing entitlements, owning, leasing and managing medical, commercial and industrial real estate. Our tenants include unrelated diversified entities with a recent emphasis on medical office parks and industrial properties. Our properties are located in Suffolk and Westchester counties in New York, which are characterized by strong real estate markets.

As of December 31, 2025, the consolidated portfolio includes two developed properties, consisting of 9 buildings with an aggregate of 161,430 rentable square feet. The Company also owns undeveloped land parcels adjacent to developed properties for which alternative entitlement plans are currently being considered in order to increase development flexibility of the relevant primary property.

**Leasing Operations**

Our operating focus is on maximizing cashflows and market value of our operating properties while we are securing entitlements with the objective of increasing development flexibility with respect to our remaining properties and maximizing distributions to our shareholders as soon as reasonably practicable. As of December 31, 2025, our properties were 82% leased to 31 tenants. As of December 31, 2024, our properties were 82% leased to 32 tenants.

Our leasing strategy for 2026 includes focusing on leasing vacant space, negotiating early renewals for leases scheduled to expire through 2026 and identifying new tenants or existing tenants seeking additional space.

**Lease Expirations**

The following is a summary of lease expirations and related revenues of leases in place on December 31, 2025. This table assumes that none of the tenants' exercise renewal options or early termination rights, if any, at or prior to the scheduled expirations:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  |  | % of Gross Annual |
|  | Number of | Square | Total | Rental Revenues |
|  | Leases | Feet | Annual | Represented |
| Fiscal Year End | Expiring | Expiring | Rent | By Such Leases |
| 2026 | 15 | 45000 | $1174000 | 52.18% |
| 2027 | 12 | 17000 | 224000 | 9.94% |
| 2028 | 4 | 8000 | 130000 | 5.78% |
| 2029 | 1 | 2000 | 35000 | 1.53% |
| 2030 | 2 | 30000 | 496000 | 22.03% |
| Thereafter | 1 | 17000 | 192000 | 8.54% |

---

------

The success of our leasing strategy will be dependent upon the general economic conditions and more specifically real estate market conditions and trends in the United States and in our target markets of Suffolk and Westchester Counties in New York. We cannot give any assurance that leases will be renewed or that available space will be re-leased at rental rates equal to or above the current contractual rental rates.

We actively manage the renewal process. Historically, this has resulted in a very low turnover rate with our tenants. As a result, the Company continues to actively manage lease termination dates and often approaches tenants up to one year in advance to gauge renewal interest and negotiate related leases. Where a termination is likely, the Company begins marketing the property prior to termination to timely identify the market rent for the specific space, expected vacancy period and market demanded tenant concessions and incentives.

The Company may offer tenant concessions in the form of rent abatements rather than tenant improvements to maximize its working capital position. However, tenant improvement incentives may be offered in certain cases where concessions are not effective in meeting the demands of the existing or prospective tenant.

The Company has approximately 52% of its annual leasing revenue up for renewal in 2026, in 2025 it was 31%. General economic conditions, coupled with rental markets in which we operate, will dictate how rental rates on new leases and renewals will compare, favorably or unfavorably, to those leases that were signed in 2025.

**Critical Accounting Policies**

Gyrodyne intends to dissolve after we complete the disposition of all of our real property assets, apply the proceeds of such dispositions first to settle any debts and claims, pending or otherwise, against Gyrodyne, and then pay distributions to holders of Gyrodyne common shares. Therefore, effective September 1, 2015 Gyrodyne adopted the liquidation basis of accounting. This basis of accounting is considered appropriate when, among other things, liquidation of the entity is "imminent", as defined in ASC 205-30, Presentation of Financial Statements Liquidation Basis of Accounting. Under the LLC Agreement, the Board may elect, in its sole discretion and without any separate approval by shareholders, to dissolve the Company at any time the value of the Company's assets, as determined by the Board in good faith, is less than $1 million. The LLC Agreement also provides that the Company will dissolve, and its affairs wound up upon the sale, exchange or other disposition of all the real properties of the Company. As a result, liquidation is "imminent" in accordance with the guidance provided in ASC 205-30.

***Principles of consolidation -*** The consolidated financial statements include the accounts of Gyrodyne and all subsidiaries. All consolidated subsidiaries are wholly owned. All inter-company balances and transactions have been eliminated.

***Basis of Presentation - Liquidation Basis of Accounting*** – Under the liquidation basis of accounting the consolidated balance sheet and consolidated statements of operations, equity, comprehensive income and cash flows are no longer presented. The consolidated statements of net assets and changes in net assets are the principal financial statements presented under the liquidation basis of accounting.

Under the liquidation basis of accounting, all the Company's assets have been stated at their estimated net realizable value, or liquidation value, (which represents the estimated amount of cash that Gyrodyne will collect on the disposal of assets (prior to any credits for contribution amounts which are reflected in the costs in excess of receipts) as it carries out the plan of liquidation), which is based on independent third-party appraisals, estimates and other indications of sales value. All liabilities of the Company, including those estimated costs associated with implementing the plan of liquidation, have been stated at their estimated settlement amounts. These amounts are presented in the accompanying statements of net assets. These estimates are periodically reviewed and adjusted as appropriate. There can be no assurance that these estimated values will be realized. Such amounts should not be taken as an indication of the timing or amount of future distributions or our actual dissolution. The valuation of assets at their net realizable value and liabilities at their anticipated settlement amount represent estimates, based on present facts and circumstances, of the net realizable value of the assets and the costs associated with carrying out the plan of liquidation. The actual values and costs associated with carrying out the plan of liquidation may differ from amounts reflected in the accompanying consolidated financial statements because of the plan's inherent uncertainty. These differences may be material. In particular, the estimates of our costs will vary with the length of time necessary to complete the plan of liquidation, which is currently anticipated to be completed by December 31, 2028.

The Company's assumptions and estimates (including the sales proceeds of all its real estate holdings, selling costs, retention bonus payments, rental revenues, rental expenses, capital expenditures, land entitlement costs, litigation fees, general and administrative fees, director and officer liability and reimbursement, post liquidation insurance tail coverage policy and final liquidation costs) are based on completing the liquidation by December 31, 2028. As previously stated, on an ongoing basis, Gyrodyne evaluates the estimates and assumptions that can have a significant impact on the reported net assets in liquidation and will update relevant information accordingly for any costs and value associated with a change in the duration of the liquidation, as we cannot give any assurance on the timing of the ultimate sale of all the Company's properties.

------

***Management Estimates*** – In preparing the consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles ("GAAP") and the liquidation basis of accounting, management is required to make estimates and assumptions that affect the reported amounts of assets, including net assets in liquidation, and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of receipts and expenditures for the reporting period. Actual results could differ from those estimates. The real estate market is cyclical in nature. Property values are affected by, among other things, the availability of capital, occupancy rates, rental rates, interest rates and inflation rates. As a result, determining real estate values involves many assumptions. Amounts ultimately realized may vary significantly from the net assets in liquidation values presented. The Company's most significant accounting estimate relates to the determination of the value of net assets in liquidation.

***Fair Value of Real Estate -*** The Company also considers in its valuation estimates the receipt of any expressions of interest/letters from perspective buyers adjusted to reflect the Company's best estimate of any contingent financial terms inclusive of approval density and related site plans.

***Cash equivalents -*** The Company considers all certificates of deposits, money market funds, treasury securities and other highly liquid debt instruments purchased with short-term maturities to be cash equivalents.

***Allowance for doubtful accounts*** – Rent receivable is carried at net realizable value. Management makes estimates of the collectability of rents receivable. Management specifically analyzes receivables and historical bad debts, tenant concentrations, tenant creditworthiness, current economic trends and changes in tenant payment patterns when evaluating the adequacy of the allowance for doubtful accounts.

***Fair Value Measurements*** – ****The Company believes the concepts for determining net realizable value are consistent with the guidance for measuring fair value. As a result, the Company follows the guidance of FASB Accounting Standards Codification, *Fair Value Measurements and Disclosures* to determine the fair value of financial and non-financial instruments. The guidance defines fair value, establishes a hierarchy framework for measuring fair value and expands disclosures related to the fair value. The guidance establishes a hierarchy breaking down observable and unobservable inputs into three levels: Level 1 – observable inputs in an active market on or around the measurement date, Level 2 – observable inputs that are based on prices not quoted on active markets but corroborated by market data and Level 3 – unobservable inputs utilized when no other data is available.

***Estimated Distributions per Share*** – Under the liquidation basis of accounting, the Company reports estimated distributions per share data by dividing net assets by the number of shares outstanding.

***Industry Segments -*** Gyrodyne's corporate strategy is to enhance the value of Flowerfield and Cortlandt Manor by pursuing entitlement opportunities to provide purchasers increased development flexibility, and by enhancing the value of our leases, and then selling our properties in an orderly manner at higher values. The Company manages this strategy on an aggregated, single segment basis for purposes of assessing performance and making decisions (inclusive of capital allocation, leasing, entitlements and sales). Therefore, the Company has only one reporting segment.

As reported in footnote two, the Company is on a liquidation basis of accounting. The detailed information regularly provided to the chief operating decision maker ("CODM"), President and CEO, is reported in footnote 4 in detail supporting the estimated liquidation and operating costs net of estimated receipts. This information allows the CODM to manage and forecast any impact the operations have on the estimated real estate value and in the aggregate allows the CODM to calculate estimated distributions. The net assets as of December 31, 2025 ($25,858,997) and December 31, 2024 ($30,596,313) results in estimated distributions of approximately $11.76 and $13.91 per common share, respectively, based on 2,199,308 shares outstanding.

***New accounting pronouncements -*** Management has evaluated the impact of newly issued accounting pronouncements, whether effective or not as of December 31, 2025, and has concluded that they will not have a material impact on the Company's consolidated financial statements since the Company reports on a liquidation basis.

**Discussion of the Statement of Net Assets**

Net assets as of December 31, 2025 and December 31, 2024 would result in estimated liquidating distributions of $25,858,997 and $30,596,313, respectively, or approximately $11.76 and $13.91 per common share, respectively, based on 2,199,308 shares outstanding. The decrease of $4,737,316 in estimated liquidating distributions is mainly attributable to an increase in estimated liquidation and operating costs net of estimated receipts for the two year timeline extension of approximately $3,500,000 (to allow sufficient time for the B2K Agreement (dated July 30<sup>th</sup>, 2025 inclusive of its latest amendment dated January 6, 2026) to close), the closing credit to B2K for certain sewer treatment plant and onsite infrastructure costs of approximately $4,000,000, increase in retention bonuses and selling costs due to the increased value of real estate of approximately $479,000, prepayment penalty and loan extension/new loan fees of approximately $140,000 and additional land development fees of $190,000 (excluding the adjustment attributable to the timeline extension) partially offset by the increase in real estate value of approximately $3,600,000.

------

The cash balance at the end of the liquidation period (currently estimated to be December 31, 2028, although the estimated completion of the liquidation period may change), excluding any interim distributions, is estimated based on adjustments for the following items which are estimated through December 31, 2028:

1. The estimated cash receipts from the operation of the Company's properties net of rental property related expenditures as well as costs expected to be incurred to preserve or improve the net realizable value of the properties at their estimated gross sales proceeds.

2. Net proceeds from the sale of all the Company's real estate holdings.

3. The general and administrative expenses and or liabilities associated with operations and the liquidation of the Company including severance, director and officer liability coverage including post liquidation tail policy coverage, and financial and legal fees (inclusive of the Article 78 Proceeding) to complete the liquidation.

4. Costs for the pursuit of entitlement of the Flowerfield and Cortlandt Manor properties.

5. Retention bonus amounts.

6. Debt service on the Company's credit facilities.

The Company estimates the net realizable value of its real estate assets by using income and market valuation techniques. The Company may estimate net realizable values using market information such as broker opinions of value, appraisals, and recent sales data for similar assets or discounted cash flow models, which primarily rely on Level 3 inputs, as defined under FASB ASC Topic No. 820, Fair Value Measurement. The Company also considers in its valuation estimates the receipt of any credible expressions of interest/letters from perspective buyers adjusted to reflect the Company's best estimate of any contingent financial terms such as approved density and related site plans. The cash flow models include estimated cash inflows and outflows over a specified holding period. These cash flows may include contractual rental revenues, projected future rental revenues and expenses and forecasted capital improvements and lease commissions based upon market conditions determined through discussion with local real estate professionals and relevant Company experience with its current and previously owned properties. Capitalization rates and discount rates utilized in these models are estimated by management based upon rates that management believes to be within a reasonable range of current market rates for the respective properties based upon an analysis of factors such as property and tenant quality, geographical location, local supply and demand observations and no sewage treatment plant. To the extent the Company underestimates or overestimates forecasted cash outflows (capital improvements, lease commissions, operating costs and credit costs) or overestimates or underestimates forecasted cash inflows (rental revenue rates) or other unfavorable or favorable variances of the aforementioned assumptions, the estimated net realizable value of its real estate assets could be overstated or understated.

The Company estimates that it will incur approximately $1.326 million (included in the consolidated statement of net assets as part of the estimated liquidation and operating costs net of receipts) in land entitlement costs from January 2026 through the end of the liquidation period, currently estimated to conclude on or about December 31, 2028, in an effort to obtain entitlements, including special permits. The Company believes the commitment of these resources will enable the Company to position the properties for sale with all entitlements necessary to maximize the aggregate Flowerfield and Cortlandt Manor property values and resulting distributions. During the year ended December 31, 2025, the Company incurred approximately $380,000 of land entitlement costs, consisting predominately of engineering fees, legal fees and real estate taxes. The Company believes the remaining balance of $1.326 million (inclusive of real estate taxes of $448,500 and regulatory fees of $408,000) will be incurred from January 2026 through the end of the liquidation period. The Company does not intend to develop the properties but rather positioning the properties for increased development flexibility in the shortest period of time with the least amount of risk to the Company. The costs and time frame to achieve the entitlements could change due to a range of factors including a shift in the value of certain entitlements making it more profitable to pursue a different mix of entitlements and the dynamics of the real estate market. As a result, the Company has focused and will continue to focus its land entitlement efforts on achieving the highest and best use while considering the time and direct and indirect costs necessary to achieve such entitlements. During the process of pursuing such entitlements, the Company may entertain offers from potential buyers who may be willing to pay premiums for the properties that the Company finds more acceptable from a timing or value perspective than completing the entitlement processes itself. There can be no assurance that our value enhancement efforts will result in property value increases that exceed the costs we incur in such efforts, or even any increase at all.

Net assets as of December 31, 2025 and December 31, 2024 would result in estimated liquidating distributions of $25,858,997 and $30,596,313, or approximately $11.76 and $13.91 per common share, respectively, based on 2,199,308 and 1,574,308 shares outstanding, respectively, based on estimates and other indications of sales value. This estimate of distributions includes projections of costs and expenses to be incurred during the period required to complete the plan of liquidation. There is inherent uncertainty with these projections, and they could change materially based on the timing of the sales, change in values of the Cortlandt Manor and/or Flowerfield properties (whether market driven or resulting from the land entitlement efforts) net of any bonuses, favorable or unfavorable changes in the land entitlement costs, the performance of the underlying assets, the market for commercial real estate properties generally and any changes in the underlying assumptions of the projected cash flows.

------

The following table summarizes the estimates to arrive at the Net Assets in Liquidation as of December 31, 2025 (dollars are in millions).

---

| | |
|:---|:---|
| December 31, 2025 cash and cash equivalents balance | $4.53 |
| Principal payments on loan | (10.87) |
| Free cash flow from rental operations | 2.23 <sup>(i)</sup> |
| General and administrative expenses | (5.94)<sup>(ii)</sup> |
| Land entitlement costs in pursuit of the highest and best use | (1.33) |
| Gross real estate proceeds | 53.99 <sup>(iii)</sup> |
| B2K Closing Credit for certain infrastructure | (4.02)<sup>(iv)</sup> |
| Selling costs on real estate | (3.06) |
| Retention bonus plan for officers and employees | (2.23) |
| Final liquidation and dissolution costs | (1.50)<sup>(v)</sup> |
| Other | (5.94)<sup>(vi)</sup> |
| Net Assets | $25.86 |

---

(i) The Company estimates the cash proceeds from rental operations net commissions and rental costs, inclusive of expenditures to preserve or improve the properties at its current estimated market value will total $2.23.

(ii) The general and administrative expenses, excluding final liquidation costs, is estimated to be ($5.94)

(iii) The incremental value, if any, associated with the pending STP amenity (see iv) is not included in gross real estate proceeds as such value is not estimable based on current factors.

(iv) Under the terms of the B2K agreement (dated July 30<sup>th</sup>, 2025 inclusive of its latest amendment dated January 6, 2026) B2K is funding its proportionate share, based on effluence, of the buildout of the sewer treatment plant and onsite infrastructure costs. This credit that will be given at closing is contributed to the Industrial Parks proportionate share.

(v) The costs represent all anticipated costs to liquidate the Company including D&O tail, severance and professional fees.

(vi) The Company estimates interest income will be offset by interest expense and the settlement of its working capital accounts resulting in a balance of ($5.94).

**Discussion of Changes in Net Assets**

Gyrodyne's strategy is to enhance the value of Flowerfield and Cortlandt Manor, by pursuing various entitlement opportunities, which the Gyrodyne Board believes will improve the potential of obtaining better aggregate values for such properties as a whole. The pursuit of the highest and best use of Flowerfield and Cortlandt Manor may involve other strategies to manage risk and or enhance the net value of Flowerfield and Cortlandt Manor to maximize the returns for our shareholders. Gyrodyne intends to dissolve after we complete the disposition of all of our real property assets, apply the proceeds of such dispositions first to settle any debts and claims, pending or otherwise, against Gyrodyne, and then pays distributions to holders of Gyrodyne common shares. Therefore, the Company includes in its financial statements the Consolidated Statement of Changes in Net Assets for the years ended December 31, 2025 and 2024, respectively, all of which is discussed below:

---

| | |
|:---|:---|
| Net assets on January 1, 2024 | $30721034 |
| Changes in net assets from January 1 through December 31, 2024: |  |
| Remeasurement of assets and liabilities | (1151101) |
| Issuance of common shares, net | 4418380 |
| Change in value of real estate | (3392000) |
| Total change in net assets | (124721) |
| Net assets on December 31, 2024 | 30596313 |
| Changes in net assets for the year ended December 31, 2025 |  |
| Remeasurement of assets and liabilities | (8339316)<sup>(a)</sup> |
| Change in value of real estate | 3602000 |
| Total change in net assets | (4737316) |
| Net assets on December 31, 2025 | $25858997 |

---

<sup>(a)</sup> The remeasurement of assets and liabilities during 2025 includes approximately $4 million in a closing credit to B2K for certain infrastructure costs and approximately $3.5 million in costs relating to the timeline extension.

------

**Liquidity and Capital Resources** 

*Cash Flows*:

As we pursue our plan to sell our properties strategically, including certain enhancement efforts, we believe that a main focus of management is to effectively manage our net assets through cash flow management of our tenant leases, maintaining or improving occupancy, and enhance the value of the Flowerfield and Cortlandt Manor properties via the pursuit of the associated change in entitlements.

As the Company executes on the liquidation plan, it will review its capital needs and make prudent distribution decisions regarding any excess cash. Upon completion of these activities, Gyrodyne will distribute the remaining cash to its shareholders and then proceed to complete the dissolution of the Company, delist its shares from Nasdaq or other exchange platform and terminate its registration and reporting obligations under the Securities Exchange Act of 1934, as Amended (the "Exchange Act"). Gyrodyne is required to make adequate provisions to satisfy its known and unknown liabilities which could substantially delay or limit its ability to make future distributions to shareholders. The process of accounting for liabilities, including those that are currently unknown or whose amounts are uncertain may involve difficult valuation decisions which could adversely impact the amount or timing of any future distributions.

We generally finance our operations through cash on hand. On March 7, 2024, the Company closed a rights offering resulting in approximately $4.4 million of net proceeds to the Company, thereby ensuring we could operate from a position of strength through the duration of the liquidation estimated at the time of such offering to be the end of 2026 (but being extended to the end of 2028), to negotiate and enforce purchase agreements and defend our property rights in the Article 78 Proceeding and in any other such proceeding that may arise**.** Furthermore, certain of the Company's major vendors have informally agreed to defer payment on 50% of their fees until the first subdivided lot is sold. While these same vendors remain committed to deferring a large portion of their deferred fees (as disclosed in footnote 8), the extended timeline to the end of 2028 is resulting in economic pressure to provide for a yet to be determined partial payment, albeit expected to be less than half of the outstanding liability). Additionally, on December 6, 2019, the Company's Board of Directors approved the Gyrodyne, LLC Nonqualified Deferred Compensation Plan for Employees and Directors (the "DCP") effective as of January 1, 2020. The plan is a nonqualified deferred compensation plan maintained for officers and directors of the Company. Under the DCP, officers and directors may elect to defer a portion of their compensation to the DCP and receive interest on such deferred payments at a fixed rate of 5% (per annum). All DCP benefits will be paid in a single lump sum cash payment on December 15, 2031, unless a Plan of Liquidation is established for Gyrodyne before the distribution date in which case all benefits will be paid in a single lump sum cash payment after execution of an amendment to terminate the DCP (*See Deferred Compensation Plan below)*.

As of December 31, 2025, the Company had cash and cash equivalents totaling approximately $4.5 million. The cash will be partially used to fund our efforts to generate the highest values for the Flowerfield and Cortlandt Manor properties while simultaneously pursuing the strategic sale of these properties. The pursuit of the highest values for Flowerfield and Cortlandt Manor may involve other investments and or other strategies to manage risk and or enhance the net value of Flowerfield and Cortlandt Manor to maximize the returns for our shareholders. The Company is estimating and reporting in the consolidated statements of net assets total gross cash proceeds from the sale of its assets of approximately $53.99 million. Based on the Company's current cash balance and the above forecast, the Company estimates distributable cash stemming from the liquidation of the Company of approximately $25.86 million.

The Company intends to seek to modify one or more of its existing loan facilities to strengthen its financial position through the end of 2028, the forecasted completion of the liquidation process. The Company's goal with respect to any such modification is for its current cash and cash equivalent position post-loan modification to be adequate to fund our process of seeking entitlements and selling assets through such forecasted liquidation completion date. Management believes the Company will need additional capital to properly fund operations through the end of 2028 absent sufficient working capital raised through the combination of property sales or the modification of its existing credit facilities and or new credit facilities, or other alternative capital raising strategies. There can be no assurance, however, that the Company will be successful in securing any such loan modification/ and/or new credit facilities on terms that are satisfactory to the Company or on any terms at all or achieve a timely closing on the sale of a property to address its working capital needs. If such available cash and amounts received on the sale of assets are not adequate to provide for our obligations, liabilities, expenses and claims, distributions of cash and other assets to our shareholders would be eliminated. In the event our shareholders receive distributions from Gyrodyne and there are insufficient funds to pay any creditors who seek payment of claims against Gyrodyne, shareholders could be held liable for payments made to them and could be required to return all or a part of the distributions made to them.

The Company's primary sources of funds are as follows:

● current cash and cash equivalents;

● rents and tenant reimbursements received on our remaining real estate operating assets;

● sale of assets; and

Excluding gross proceeds from the sale of assets, the Company's gross rents and tenant reimbursements net of rental expenses is less than the combined total annual general and administrative costs, capital expenditures and land entitlement costs creating a net use of cash on an annual basis through the liquidation process. The Company believes the cash and cash equivalents plus the proceeds from the sale of assets will exceed the costs to complete the liquidation of the Company. In addition, the Company has and will continue to review operating activities for possible cost reductions and additional capital/credit needs throughout the liquidation process.

------

Major elements of the Company's cashflows for the year ended December 31, 2025 were as follows:

Operating Cashflows:

● $3,050,479 in rent and reimbursements.

● <u>($2057276)</u> in operating costs.

● $993,203 in net operating income.

Nonoperating Cashflows:

● ($79085) of land entitlement costs incurred for the Cortlandt Manor property.

● ($301351) of land entitlement costs incurred for the Flowerfield property.

● ($54391) of capital expenditures on the real estate portfolio excluding those costs incurred for land entitlement.

● ($2616409) of corporate expenditures including interest expense.

● ($301390) of principal payments on our loans.

● $989,788 in changes in working capital.

Major elements of the Company's cashflows for the year ended December 31, 2024 were as follows:

Operating Cashflows:

● $3,105, 989 in rent and reimbursements.

● <u>($1898920)</u> in operating costs.

● $1,207,069 in net operating income.

Nonoperating Cashflows:

● $4,418,380 of net proceeds from the issuance of common shares.

● ($87718) of land entitlement costs incurred for the Cortlandt Manor property.

● ($334610) of land entitlement costs incurred for the Flowerfield property.

● ($172506) of capital expenditures on the real estate portfolio excluding those costs incurred for land entitlement.

● ($1987749) of corporate expenditures including interest expense.

● ($288976) of principal payments on our loans.

● ($347349) in changes in working capital.

*Lingering Pandemic Effects and Macroeconomics:*

The COVID-19 pandemic may continue to impact adversely, the timeliness of local government in granting required approvals, as state and local staff charged with processing our subdivision applications all postponed activity due to work-from-home transitions. Accordingly, COVID-19 has caused, and may continue to cause, the completion of important stages in our efforts to secure entitlements to be delayed. The pandemic has also resulted in a significant shift toward commercial acceptance of remote working and telemedicine which may adversely impact our occupancy rate and average rate per square foot, although medical office has faced less of a challenge from work-from-home shifts.

We are affected by the fiscal and monetary policies of the United States Government and its agencies, including the policies of the Federal Reserve, which regulates the supply of money and credit in the United States. The combination of elevated interest rates and persistent inflation (or the perception that any of these events may continue) have contributed to continued weakness in commercial real estate markets, including in those real estate markets in which we operate. Changes in fiscal and monetary policies are beyond our control and are difficult to predict. Although the Federal Reserve decreased the federal funds rate multiple times in 2024 and three times in 2025, the rate continues to be elevated and there can be no assurance that the rate will continue to decrease or that it will not be increased in 2026 and beyond. Regulated lending institutions are adjusting their business models to increase capital requirements for direct loans to real estate and thus continue to be constrained in providing capital for commercial real estate properties. Changes in the federal funds rate as well as the other policies of the Federal Reserve affect interest rates, which have a significant impact on our financial condition.

The extent of the continuing impact of these public health and macroeconomic risks on the Company's operational and financial performance and ultimately its Net Asset Value, will depend on current and future developments, including the residual effects of the COVID-19 pandemic and the extent to which persistently high interest rates continue to have an adverse impact on the real estate industry or have a recessionary effect generally.

As a result of the foregoing developments, we are unable to determine what the ultimate impact of general economic conditions will be on our timeline for seeking entitlements and selling properties, and ultimately on the amount proceeds and distributions from those sales.

*Healthcare:* 

Our tenants in our Cortlandt Manor property are healthcare service providers. Furthermore, the Company previously expanded its leasing relationship with Stony Brook University, Stony Brook University Hospital and affiliates of Stony Brook University Hospital at our Flowerfield property which increased its exposure to the healthcare industry. The healthcare industry is subject to substantial regulation and faces increased regulation particularly relating to fraud, waste and abuse, cost control and healthcare management. The healthcare industry may experience a significant expansion of applicable federal, state or local laws and regulations, previously enacted or future healthcare reform, new interpretations of existing laws and regulations or changes in enforcement priorities, all of which could materially impact the business and operations of our tenants and therefore the marketability of our properties.

------

Our healthcare tenants are subject to extensive federal, state, and local licensure laws, regulations and industry standards governing business operations, the physical plant and structure, patient rights and privacy and security of health information. Our tenants' failure to comply with any of these laws could result in loss of licensure, denial of reimbursement, imposition of fines or other penalties, suspension or exclusion from the government sponsored Medicare and Medicaid programs, loss of accreditation or certification, or closure of the facility. In addition, efforts by third-party payors, such as the Medicare and Medicaid programs and private insurance carriers, including health maintenance organizations and other health plans, impose greater discounts and more stringent cost controls upon healthcare provider operations (through changes in reimbursement rates and methodologies, discounted fee structures, the assumption by healthcare providers of all or a portion of the financial risk or otherwise). Our tenants may also face significant limits on the scope of services reimbursed and on reimbursement rates and fees, all of which could impact their ability to pay rent or other obligations to us. Referral sources, including physicians and managed care organizations, may change their lists of hospitals or physicians to which they refer patients. Competition and loss of referrals could adversely affect our tenants' ability to make rental payments, which could adversely affect our rental revenues. Any reduction in rental revenues resulting from the inability of our medical office buildings and our tenants to compete successfully may have an adverse effect on our business, financial condition and results of operations and our ability to make distributions to our shareholders.

**Property Value Enhancement** 

See, "*Business*—*Property Value Enhancement*—*Cortlandt Manor*" and "—*Flowerfield*", above, for more detailed disclosure.

**Item 7A. Quantitative and Qualitative Disclosures About Market Risk.**

The Company places its temporary cash investments with high credit quality financial institutions. Certain financial instruments could potentially subject the Company to concentrations of credit risk, such as cash equivalents and longer-term investments. The Company maintains bank account balances, which exceed FDIC insurance limits. The Company has not experienced any losses in such accounts and believes that it is not exposed to any significant credit risk on cash. Management does not believe significant credit risk exists as of December 31, 2025.

**Item 8. Financial Statements and Supplementary Data.**

See Consolidated Financial Statements and accompanying Notes to Consolidated Financial Statements commencing on the Contents page followed by Page F-1.

Consolidated Financial Statements include:

(1) Report of Independent Registered Public Accounting Firm (PCAOB ID 23)

(2) Consolidated Statements of Net Assets as of December 31, 2025 and 2024 (liquidation basis)

(3) Consolidated Statements of Changes in Net Assets for the years ended December 31, 2025 and 2024 (liquidation basis)

(4) Notes to Consolidated Financial Statements

(5) Schedules

All other information required by the following schedules has been included in the consolidated financial statements, is not applicable, or not required:<br>

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

**Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.**

None

**Item 9A. Controls and Procedures.**

**Disclosure Controls and Procedures**

As of the end of the period covered by this Report, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15 under the Securities Exchange Act of 1934 (the "Exchange Act")). Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of the evaluation date, our disclosure controls and procedures were effective as of December 31, 2025 to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms and (ii) is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

------

**Internal Control over Financial Reporting**

The Company's management is responsible for establishing and maintaining an adequate system of internal control over financial reporting as defined in rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The Company's internal control over financial reporting includes those policies and procedures that:

● Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company's assets;

● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the Company's financial statements in accordance with generally accepted accounting principles in the United States of America, and that the Company's receipts and expenditures are being made only in accordance with authorizations of its management and directors; and

● Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company's management assessed the effectiveness of its system of internal control over financial reporting as of December 31, 2025. In making this assessment, management used the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in 2013. Based on the Company's assessment and the criteria set forth by COSO, management believes that the Company did maintain effective internal control over financial reporting as of December 31, 2025.

The COSO methodology used in determining effective control over financial reporting follows the concepts in the 2013 Internal Control – Integrated Framework. The guidance demonstrates the applicability of those concepts to help smaller public companies design and implement internal controls to support the achievement of financial reporting objectives. It highlights 5 integrated components (control environment, risk assessment, control activities, information and communication and monitoring activities) and 17 key principles of the 2013 framework, providing a principles-based approach to internal control.

Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to the rules of the Securities and Exchange Commission that permit the Company, as a smaller reporting company, to provide only management's report in this Annual Report. As such, this Annual Report does not include an attestation report of the Company's public accounting firm regarding internal control over financial reporting.

**Changes in Internal Control over Financial Reporting**

There was no change in our internal control over financial reporting identified with our evaluation that occurred during the year ended December 31, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

**Item 9B. Other Information.** 

Paul Lamb was not re-elected to the Company's Board of Directors at the Company's annual shareholder meeting on November 5, 2025, therefore his term ended at such time. Following the 2025 annual shareholders meeting, the Board was reduced to four members.

------

**PART III**

**Item 10. Directors, Executive Officers and Corporate Governance.**

(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 2026 shall serve until the next Annual Meeting of Stockholders or until their successors are elected and qualified. All officers of the Company are elected by the Board to one-year terms.

---

| | | | | |
|:---|:---|:---|:---|:---|
| Name & Principal Occupation or Employment | Age | First Became a<br> Director of<br> Gyrodyne, LLC | First Became a<br> Director of<br> Gyrodyne Company<br> Of America, Inc. | Current<br> Board<br> Term<br> Expires |
| Gary J. Fitlin | 60 |  |  |  |
| President, CEO CFO and Treasurer of the Company |  |  |  |  |
| Jan H. Loeb | 66 | 2023 |  | 2026 |
| Managing Member Leap Tide Capital Management LLC |  |  |  |  |
| Director of the Company |  |  |  |  |
| Ronald J. Macklin | 63 | 2015 | 2003 | 2027 |
| Director of the Company |  |  |  |  |
| Peter Pitsiokos | 66 |  |  |  |
| Executive Vice President, COO, Secretary and Chief Compliance Officer of the Company |  |  |  |  |
| Nader G.M. Salour | 67 | 2015 | 2006 | 2026 |
| Principal, Cypress Realty of Florida, LLC |  |  |  |  |
| Director of the Company |  |  |  |  |
| Richard B. Smith | 71 | 2015 | 2002 | 2028 |
| Mayor of the Incorporated Village of Nissequogue |  |  |  |  |
| Director of the Company |  |  |  |  |

---

(b) Business Experience

Gary J. Fitlin, age 60, joined the Company in October 2009 as its Chief Financial Officer and Treasurer. From August 2012 through February 24, 2013, Mr. Fitlin served as interim President and Chief Executive Officer following the resignation of Stephen V. Maroney in August 2012. Following the separation of Frederick C Braun III, (President and Chief Executive Officer from February 2013 through April 2017), from the Company, the Board of Directors appointed Gary Fitlin as President and Chief Executive Officer effective May 1, 2017. Prior to joining the Company, he was Director of Accounting Implementation for Lexington Realty Trust, a publicly traded real estate investment trust on the NYSE, from July 2006 to March 2008, where he was responsible for mergers and acquisitions. Prior to that, Mr. Fitlin served as Vice President and Corporate Controller for Source Media (f/k/a Thomson Media), a publisher and software solution provider, from June 2005 to July 2006, where he was responsible for global accounting, management reporting, tax compliance and planning, financial systems, risk management and contract administration. Prior to that, he served as a senior financial officer for various publicly traded companies where he was responsible for mergers and acquisitions, global accounting, management reporting, tax compliance and planning, financial systems, risk management and contract administration. Mr. Fitlin is a Certified Public Accountant, an alumnus of Arthur Andersen & Co., and holds a BS degree in Accounting and Economics from the State University of New York at Oswego.

Jan H. Loeb, age 66, was appointed to our Board in July 2023. Mr. Loeb has more than forty years of business, money management and investment banking experience. He has been the Managing Member of Leap Tide since 2007. From 2005 to 2007, he served as the President of Leap Tide's predecessor, Leap Tide Capital Management Inc., which was formerly known as AmTrust Capital Management Inc. He served as a Portfolio Manager of Chesapeake Partners, privately-owned hedge fund sponsor investing in the public equity and alternative investment markets, from February 2004 to January 2005. From January 2002 to December 2004, he served as Managing Director at Jefferies & Company, Inc., an American multinational independent investment bank and financial services company. From 1994 to 2001, he served as Managing Director at Dresdner Kleinwort Wasserstein, Inc. (formerly Wasserstein Perella & Co., Inc.), a boutique investment banking firm. He served as a Lead Director of American Pacific Corporation, a chemical manufacturing corporation, from July 8, 2013 to February 27, 2014, and also served as its Director from January 1997 to February 27, 2014. He served as an Independent Director of Pernix Therapeutics Holdings Inc. (formerly, Golf Trust of America, Inc.), a specialty pharmaceutical business, from 2006 to August 31, 2011. He served as a Director of aerospace and defense company TAT Technologies, Ltd. from August 2009 to December 21, 2016. He served as a Director of Keweenaw Land Association, Ltd., a subsurface mineral mining company, from December 2016 until May 2019. He has served as President, Executive Chairman and board member of Novelstem International Corp., a biotechnology company, from June 2018 to December 2024. He has served as Chairman of Newstem Ltd., a biopharmaceutical company since June 2018. He has served as President and CEO of Acorn Energy Corp., an energy utility company, since January 2016 and CEO of Omnimetrix, LLC, a subsidiary of Acorn Energy Corp., since December 2019. He currently serves as Chairman and Director of Agudath Israel of Baltimore, Inc., a nonprofit religious organization.

------

Ronald J. Macklin, age 63, was appointed to the Board in June 2003. Mr. Macklin served through April 2019 as Senior Vice President and U.S. General Counsel for National Grid and formerly Key Span Corporate Services, where he has held various positions within the Office of General Counsel since 1991. Previously, he was associated with the law firms of Rosenman & 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. The Board concluded that Mr. Macklin should serve as a director of the Company because of his legal expertise, which includes his legal experience in corporate transactions, real estate matters, litigation, compliance and business ethics.

Peter Pitsiokos, age 66, joined the Company in July 1992 as its Assistant Secretary and served as its General Counsel from 1992-2004. He has been the Company's Executive Vice President, Chief Operating Officer and Chief Compliance Officer since 2004. He has also been Secretary of the Company for over 20 years. 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 is a former trustee of the Three Village Central School District in Setauket, New York. Mr. Pitsiokos also maintained a private law practice in which he represented several national and local owners, managers and developers of real estate. He holds a law degree from Villanova University and a BA degree from Stony Brook University. Mr. Pitsiokos is also a Counselor of Real Estate.

Nader G.M. Salour, age 67, was appointed to the Board in October 2006 and then elected by the shareholders at the Company's annual meeting in December 2006. Mr. Salour has been a Principal of Cypress Realty of Florida since 2000. He served as President of Abacoa Development Company from June 1996 to June 2006 and has served as a Director of Abacoa Partnership for Community since December 1997 and as a Director of the Economic Council of Palm Beach County since 2004. The Board concluded that Mr. Salour should serve as a director of the Company because of his extensive experience in the real estate industry, including development, construction, project analysis and financing.

Richard B. Smith, age 71, was appointed to the Board in November 2002. Mr. Smith was Vice President in the Commercial Banking Division of the First National Bank of Long Island from February 2006 through his retirement in December 2018. He previously served as Senior Vice President for Private Banking at Suffolk County National Bank from May 2000 to February 2005. Previously, he worked for 10 years at Key Bank (Dime Savings Bank) and for three 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. Mr. Smith served as a Trustee of the Smithtown Historical Society for 27 years prior to retiring. He is also a former Trustee for St. Catherine's Medical Center in Smithtown, New York. The Board concluded that Mr. Smith should serve as a director of the Company because of his background in both the Long Island financial sector and his role in, and experience with, local government issues and zoning matters.

(c) Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires that the Company's directors, executive officers, and any person holding more than ten percent ("10% Holder") of our common shares, file with the SEC reports of ownership changes, and that such individuals furnish the Company with copies of the reports.

Based solely on the Company's review of copies of Forms 3 and 4 and amendments thereto received by it during fiscal 2025 and Forms 5 and amendments thereto received by the Company with respect to fiscal 2025 and any written representations from certain reporting persons that no Form 5 is required, Gyrodyne believes that none of the Company's executive officers, directors or 10% Holders failed to file on a timely basis reports required by section 16(a) of the Exchange Act during fiscal 2025.

(d) Audit Committee Financial Expert

The Board has an Audit Committee established in accordance with section 3(a)(58)(A) of the Exchange Act, which consists of Messrs. Smith, Salour, and Macklin. All members are "financially literate" and have been determined to be "independent" within the meaning of SEC regulations and Nasdaq rules. The Board had previously determined that at least one member, Mr. Smith qualifies as an "audit committee financial expert" as a result of relevant experience in the commercial banking industry.

(e) Code of Ethics

The Company has adopted a written Code of Ethics that applies to all its directors, officers and employees, including the Company's Chief Executive Officer and Chief Financial Officer. It is available on the Company's website at <u>www.gyrodyne.com</u> and any person may obtain without charge a paper copy by writing to the Secretary at the address set forth on page 1. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding any amendment to, or waiver from, the provision of our Code of Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions and that relates to any element of our Code of Ethics by posting such information on our website at <u>www.gyrodyne.com</u> within four business days of such amendment or waiver**.** The Company is not including the information contained on its website as part of, or incorporating it by reference to, this Report.

(f) Insider Trading Policy

The Company has adopted an insider trading policy and procedures governing the purchase, sale, and/or other dispositions of our securities (the "Insider Trading Policy") that applies to all directors, officers, employees, consultants, contractors of the Company and its subsidiaries, as well as the Company itself. We believe that the Insider Trading Policy is reasonably designed to promote compliance with insider trading laws, rules and regulations with respect to the purchase, sale and/or other dispositions of the Company's securities, as well as any listing standards, rules and regulations applicable to us. A copy of the Insider Trading Policy is filed as Exhibit 97.2 to this Report.

------

**Item 11. Executive Compensation.** 

(a) Executive Compensation

The following table sets forth the total compensation awarded to, earned by or paid to each of the Company's executive officers for services rendered during the years ended December 31, 2025 and 2024.

SUMMARY COMPENSATION TABLE

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name and principal**<br> **position** | **Year** | **Salary<br> ($)** | **Bonus<br> ($)** | **Stock** <br> **awards<br> ($)** | **Option** <br> **awards<br> ($)** | **Non-equity<br> incentive plan** <br> **compensation<br> ($)** | **Nonqualified**<br> **deferred**<br> **compensation** <br> **earnings<br> ($)** | **All other** <br> **compensation<br> ($)** | **Total<br> ($)** |
| Gary Fitlin | 2025 | 250000 | – |  | – |  | – |  | 250000 |
| President, CEO, CFO and Treasurer | 2024 | 250000 | – |  | – |  | – |  | 250000 |
| Peter Pitsiokos | 2025 | 200000 | – |  | – |  | – |  | 200000 |
| COO and Secretary | 2024 | 200000 | – |  | – |  | – |  | 200000 |

---

The Registrant has concluded that aggregate amounts of perquisites and other personal benefits, securities or property to any of the current executives does not exceed $10,000 and that the information set forth in tabular form above is not rendered materially misleading by virtue of the omission of such personal benefits.

(a) Employment Agreements

On May 17, 2013, the Company entered into a new employment agreement with Gary J. Fitlin (the "Employment Agreement") dated May 15, 2013 and effective April 1, 2013, pursuant to which Mr. Fitlin continued to serve as President and Chief Executive Officer and Chief Financial Officer. Pursuant to the Employment Agreement, Mr. Fitlin earns a base salary at the rate of $250,000 per year plus a discretionary bonus, as determined and approved by the Board based upon the profitability and/or performance of Gyrodyne. Additionally, Mr. Fitlin is entitled to a bonus equal to $125,000 if he is employed by the Company as of the effective date of a change-in control (the "Change-in-Control Bonus"). The Employment Agreement defines a change-in-control as the first to occur of a change in ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company, as each such term is defined under Section 409A of the Code. Pursuant to the terms of the Employment Agreement, there is no required minimum period of employment, and either the Company or Mr. Fitlin may terminate at any time, with or without cause. If Mr. Fitlin is terminated without cause, the Company must provide him with at least 60 days' prior written notice of termination and must pay him (i) the pro rata share of his base salary through those 60 days, (ii) the Change-in-Control Bonus, and (iii) severance pay equal to six months' base salary from the date of termination. If Mr. Fitlin is terminated for cause (as defined in the Employment Agreement), he will be paid the pro rata share of his base salary through the date of termination. Mr. Fitlin may also terminate upon 60 days' prior written notice. The foregoing description of the Employment Agreement is only a summary of its material terms, does not purport to be complete and is qualified in its entirety by reference to that agreement. A copy of the Employment Agreement was filed as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

On May 8, 2014, Gyrodyne entered into a new employment agreement with Peter Pitsiokos effective May 15, 2014, pursuant to which Mr. Pitsiokos continues to serve as Executive Vice-President, Chief Operating Officer, Chief Compliance Officer and Secretary. Pursuant to the agreement, Mr. Pitsiokos earns a base salary at the rate of $200,000 per year plus a discretionary bonus, as determined and approved by the Board based upon the profitability and/or performance of Gyrodyne. There is no required minimum period of employment, and either Gyrodyne or Mr. Pitsiokos may terminate at any time, with or without cause. If Mr. Pitsiokos is terminated without cause, Gyrodyne must provide him with at least 60 days' prior written notice of termination and must pay him the pro rata share of his base salary through those 60 days and severance pay equal to six months' base salary from the date of termination. On January 25, 2018, Gyrodyne entered into an amendment to the employment agreement with Mr. Pitsiokos effective January 25, 2018, to define with greater specificity Mr. Pitsiokos' duties and responsibilities with respect to the Company's properties.

(b) Outstanding Equity Awards at Fiscal Year End

As of the year ended December 31, 2025, there were no unexercised options and/or stock that has not vested or equity incentive plan awards held by any of the Company's named executive officers.

------

(c) Severance and Change-in-Control Benefits

Pursuant to the Employment Agreement with Mr. Fitlin, Mr. Fitlin earns a bonus equal to $125,000 if he is employed by the Company as of the effective date of a change-in-control (the "Change-in-Control Bonus"). The Employment Agreement defines a change-in-control as the first to occur of a change in ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company, as each such term is defined under Section 409A of the Code. Pursuant to the terms of the Employment Agreements, there is no required minimum period of employment, and either the Company or the executive may terminate at any time, with or without cause. If the executive is terminated without cause, the Company must provide him with at least 60 days' prior written notice of termination and must pay him (i) the pro rata share of his base salary through those 60 days, (ii) the Change-in-Control Bonus, and (iii) severance pay equal to six months' base salary from the date of termination. If the executive is terminated for cause (as defined in the Employment Agreements), he will be paid the pro rata share of his base salary through the date of termination. Each of the executives may also terminate upon 60 days' prior written notice.

Pursuant to the employment agreement with Mr. Pitsiokos, Mr. Pitsiokos may be terminated at any time, with or without cause. If Mr. Pitsiokos is terminated without cause, Gyrodyne must provide him with at least 60 days' prior written notice of termination and must pay him the pro rata share of his base salary through those 60 days and severance pay equal to six months' base salary from the date of termination.

(d) Retention Bonus Plan

In May 2014, the Board of Directors approved a retention bonus plan (as amended (5 amendments), the "Plan") designed to recognize the nature and scope of the responsibilities of our directors, executives and employees related to the Company's strategic plan to enhance the property values, liquidate and dissolve, to reward and incent performance in connection therewith, to align the interests of directors, executives and employees with our shareholders and to retain such persons during the term of such plan. The Plan provides for bonuses to directors and to officers and employees determined by the gross sales proceeds from the sale of each property and the date of sale.

The bonus pool is distributable in the following proportions to the named participants in the bonus plan for so long as they are employees of the Company:

---

| | |
|:---|:---|
| **Employee** | **Bonus Pool %** |
| Chief Executive Officer | 44.211% |
| Chief Operations Officer | 39.789% |
| Officer Discretionary Amount <sup>(a)</sup> | 16.000% |
| Total | 100.000% |

---

(a) The officer discretionary amount will be allocated to the officers within the discretion of the Board.

Under the Plan, there were no payments made during the years ended 2025 and 2024.

**2025 DIRECTOR COMPENSATION**

The following table shows the compensation earned by each of the Company's non-officer directors for the year ended December 31, 2025:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| Name<br> (a) | Fees earned or<br> paid in cash<br> (b) | Stock<br> awards<br> (c) | Option<br> awards<br> (d) | Non-equity<br> incentive plan<br> compensation<br> (e) | Nonqualified deferred<br> compensation earnings<br> (f) | All other<br> compensation<br> (g) | Total<br> (h) |
| Paul L. Lamb<sup>(a)</sup> | $100000 | $– $|  | $– $|  | $– $| 100000 |
| Jan H. Loeb | 42000 | – |  | – |  | – | 42000 |
| Richard B. Smith | 45833 | – |  | – |  | – | 45833 |
| Ronald J. Macklin | 42000 | – |  | – |  | – | 42000 |
| Nader G.M. Salour | 42000 | – |  | – |  | – | 42000 |
| Total | $271833 | $– $|  | $– $|  | $– $| 271833 |

---

(a) Effective immediately following the annual shareholder meeting on November 5, 2025, Mr. Lamb resigned from the Board at which time the Board was reduced to 4 members.

------

***Deferred Compensation Plan.*** On December 6, 2019, the Company's Board of Directors approved the Gyrodyne, LLC Nonqualified Deferred Compensation Plan for Employees and Directors (the "DCP") effective as of January 1, 2020. The DCP is a nonqualified deferred compensation plan maintained for officers and directors of the Company. Under the DCP, officers and directors may elect to defer a portion of their compensation to the DCP and receive interest on such deferred payments at a fixed rate of 5%. All DCP benefits will be paid in a single lump sum cash payment on December 15, 2031, unless a Plan of Liquidation is established for Gyrodyne before the distribution date in which case all benefits will be paid in a single lump sum cash payment after execution of an amendment to terminate the DCP. The foregoing description of the DCP does not purport to be complete and is qualified in its entirety by reference to the full text of the DCP. Each of the Directors, excluding Jan Loeb who was appointed to the Board in July 2023, elected (under the DCP) to defer 100% of their director fees for the years 2020 thru 2025. Two of the four directors have elected not to defer any fees during 2026; the other two directors elected to defer approximately 71% of their respective 2026 director fees.

***Restricted Stock Award Plan.*** The Gyrodyne, LLC Restricted Stock Award Plan (the "Stock Plan") was approved by the Board on September 5, 2023 and by the shareholders of the Company on October 12, 2023 and became effective on October 12, 2023. Under the Stock Plan, the Company issued to the former director participants in the Retention Bonus Plan (the "Bonus Plan"), in exchange for the waiver and forfeiture of their Bonus Plan benefits, an aggregate of 91,628 Gyrodyne shares, subject to vesting, effective November 14, 2023.

The primary features of the Stock Plan are as follows:

● ***Purpose:*** The purpose of adoption of the Stock Plan was to incentivize the former director participants in the Bonus Plan to exchange their interests in the Bonus Plan for shares in the Company issuable under the Stock Plan, which would allow for compensation plan separation between directors and employees and better alignment of interests between director participants and shareholders.

● ***Eligibility:*** Directors of the Company who were participants in the Bonus Plan are eligible to receive grants under the Stock Plan. The eligible directors were Paul Lamb, Ronald Macklin, Nader Salour and Richard Smith. All such individuals agreed to exchange their Bonus Plan benefits for shares under the Stock Plan, subject to shareholder approval of the Stock Plan. Jan Loeb was not a participant in the Bonus Plan and was not eligible to participate in the Stock Plan.

● ***Maximum Shares:*** The total number of shares that were authorized for issuance under the Stock Plan is 91,628 shares, or approximately 5.8% of the common shares outstanding at the effective time of the Stock Plan after giving effect to the issuance of the Stock Plan shares. All 91,628 Stock Plan shares were issued effective November 14, 2023 to Stock Plan participants. There are no remaining shares issuable in the Stock Plan.

● ***Administration:*** Pursuant to the terms of the Stock Plan, the Stock Plan is administered and interpreted by a committee consisting of either (i) the Board, or (ii) the President and at least two other directors appointed by the Board. The committee has full power and authority to administer and interpret the Stock Plan, to make factual determinations and to adopt or amend such rules, regulations, agreements and instruments for implementing the Stock Plan and for the conduct of its business as it deems necessary or advisable, to waive requirements relating to formalities or other matters that do not modify the substance of rights of participants or constitute a material amendment of the Stock Plan, to correct any defect or supply any omission of the Stock Plan or any grant document and to reconcile any inconsistencies in the Stock Plan or any grant document.

● ***Restricted Stock:*** Incentives under the Stock Plan consisted of grants of restricted stock. No shares issued under the Stock Plan, or any interest therein, are transferrable by a participant, whether voluntarily or involuntarily, unless and until a liquidating distribution is made to the shareholders, except by will or by the laws of descent or distribution, and may not be subject to any voluntary or involuntary pledge, assignment, alienation, attachment, or similar encumbrance or transfer. All shares issued in connection with a grant will be subject to the terms, conditions, and restrictions set forth in the Company's articles of organization, amended and restated limited liability company agreement, or other governing documents of the Company, as amended.

● ***Vesting:*** Vesting of shares issued under the Stock Plan occurs (i) in equal one-third tranches on each of the first three anniversaries of the grant date, and (ii) at such time as a liquidating distribution is made to the shareholders of the Company, subject to acceleration upon a liquidating distribution. Unvested Stock Plan shares will be forfeited by a participant if such participant is no longer serving on the Board at or prior to such time that liquidating distributions are paid to the shareholders other than as a result of death, disability or failure to be reelected.

● ***Amendments:*** The Board may amend, suspend or terminate the Stock Plan at any time, in its discretion, except that shareholder approval is required for any amendment that increases the number of shares available for grant, accelerates vesting or results in a material increase in benefits or a change in eligibility requirements.

------

The shares under the Stock Plan were distributed as follows in lieu of the director portion of the Bonus Plan of $2,702,285:

---

| | |
|:---|:---|
| **Board Member** | **Shares of Restricted Stock** |
| Paul Lamb | 30542 |
| Ronald Macklin | 20362 |
| Nader Salour | 20362 |
| Richard Smith | 20362 |
| Total | 91628 |

---

**Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.**

(a) As of December 31, 2025, there were no equity compensation plans under which securities of the Company were authorized for issuance, beyond the above shares of restricted stock issued in 2024.

(e) The following table sets forth certain information as of February 28, 2026, regarding the beneficial ownership of the Company's common shares by (i) each person who the Company believes to be the beneficial owner of more than 5% of its outstanding common shares, (ii) each present director, (iii) each person listed in the Summary Compensation Table under "Executive Compensation," and (iv) all the Company's present executive officers and directors as a group.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name and address of beneficial owner** | **Amount and nature of** <br> **beneficial ownership (1)** |  | **Percent of Class (10)** |  |
| Mario Gabelli /Gamco Asset Management Inc.<br> /Gabelli Funds/GCIA/Teton Advisors<br> One Corporate Center<br> Rye, NY 10580 | 430476 | (2) | 19.6 |  |
| Towerview LLC<br> 460 Park Avenue<br> New York, NY 10022 | 338107 | (3) | 15.4 |  |
| Lance Gad Revocable Trust<br> 5310 No. Ocean Drive, Unit 702<br> Riviera Beach, FL 33404 | 166765 | (4) | 7.6 |  |
| Star Equity Fund LP<br> 53 Forest Avenue, Suite 101<br> Greenwich, CT 06870 | 156774 | (5) | 7.1 |  |
| Jan H. Loeb<br> 1 Flowerfield, Suite 24<br> St. James, NY 11780 | 69218 | (6) | 3.1 |  |
| Nader G.M. Salour<br> 1 Flowerfield, Suite 24<br> St. James, NY 11780 | 33918 |  | 1.5 |  |
| Ronald J. Macklin<br> 1 Flowerfield, Suite 24<br> St. James, NY 11780 | 30441 |  | 1.4 |  |
| Richard B. Smith<br> 1 Flowerfield, Suite 24<br> St. James, NY 11780 | 21570 |  | 1 |  |
| Peter Pitsiokos<br> 1 Flowerfield, Suite 24<br> St. James, NY 11780 | 0 |  | \* |  |
| Gary J. Fitlin<br> 1 Flowerfield, Suite 24<br> St. James, NY 11780 | 0 |  | \* |  |
| All executive officers and<br> Directors as a group (6 persons) | 155147 |  | 7.1 | (7) |

---

------

(1) Except as otherwise indicated, the beneficial owner has sole voting and investment power. Except as indicated, the beneficial owner has not pledged as security, or has any rights to acquire beneficial ownership of, any securities of the Company.

(2) On March 21, 2024, Gamco Investors Inc. filed Amendment No. 12 to Schedule 13D with the Securities and Exchange Commission stating that GAMCO, a group of investment funds, beneficially owns an aggregate of 430,476 common shares. Power to dispose of and vote securities resides with Mario Gabelli, David Goldman, Peter Goldstein and Douglas Jamieson. Each reporting person has the shared power to vote or direct the vote and has shared power to dispose of or direct the disposition of 430,476 common shares. Amendment No. 12 to Schedule 13D was filed by David Goldman, Douglas Jamieson and Peter Goldstein.

(3) On September 8, 2025, Towerview LLC filed Form 4 with the Securities and Exchange Commission stating that each reporting person has shared power to vote or direct the vote and has shared power to dispose of or direct the disposition of 338,107 common shares. The Form 4 was filed by Daniel R. Tisch.

(4) On March 14, 2024, Lance Gad Revocable Trust filed a Schedule 13G/A with the Securities and Exchange Commission stating that he has the power to vote or direct the vote and has power to dispose of or direct the disposition of 166,765 common shares.

(5) On October 20, 2025, Star Equity Fund, LP filed a Schedule 13D/A with the Securities and Exchange Commission stating that it has the power to vote or direct the vote, and power to dispose of or direct the disposition of 156,774 common shares. The Schedule 13D/A was filed by Jeffrey Eberwein and Richard Coleman.

(6) Includes 7,940 shares in Individual Retirement Account, 6,000 shares by Steinberg Family Trust, 4,000 shares by Kollel Simchas Chaim, 9,800 shares by Son and 2,913 shares by Tide Realty Capital.

(7) The percent of class is calculated on the basis of the number of shares outstanding, which is 2,199,308 as of March 1, 2026.

**Ownership Limitation**

Under Gyrodyne, LLC's Amended and Restated Limited Liability Company Agreement, shareholders of Gyrodyne may not hold common shares representing in excess of 20% of the outstanding common shares at any time. If a shareholder of Gyrodyne exceeds 20% ownership, at any time for any reason whatsoever, including but not limited to additional contributions by shareholders, purchases or other acquisitions by shareholders, mergers, consolidations, acquisitions, or other business combinations involving the shareholder, then common shares in excess of such 20% ownership limit shall be transferred by such shareholder to an irrevocable trust formed and administered by Gyrodyne and of which such shareholder shall be the beneficiary. Such LLC Shares held in trust shall have no voting rights when held in the trust and shall be disregarded in computing any required votes under the Amended and Restated Limited Liability Company Agreement of Gyrodyne.

At the end of each fiscal quarter, or at such other earlier date as determined by the Board, the Company, on behalf of the trust, shall have the option to purchase such common shares from the trust at a price determined by an independent appraiser or to offer such common shares to third parties, including to other shareholder of Gyrodyne in proportion to their relative ownership percentage, or to other persons at the appraised price. However, in the event such a shareholder's ownership percentage including common shares held beneficially in the trust on behalf of such shareholder, at any time becomes less than the 20% ownership limit due to the sale of common shares by such shareholder or due to additional issuances of common shares by Gyrodyne, then the trust (to the extent such shareholder's common shares have not been sold pursuant) has an obligation to return such common shares up to the 20% ownership limit.

------

**Item 13. Certain Relationships and Related Transactions and Director Independence.** 

The Company has entered into various leasing arrangements with a not-for-profit organization of which the Company's former Chairman, Paul Lamb, serves as Chairman and a director but receives no compensation or any other financial benefit.

In March 2022, a Consolidated Lease Agreement was signed between the Company and the not-for-profit organization that extended the lease to December 2027. It also changed some terms of the original leases including rent on the master lease suite, 3% escalators and agreements on work to be done by the Company and the tenant. The signed Consolidated Lease Agreement reflects a below market lease of $8,829 annually and $44,144 during the extended period. A summary of the additional rent under the new arrangement is as follows:

---

| | | | |
|:---|:---|:---|:---|
| **Term** | **Square Feet** | **Annual Rent** | **Total Commitment (excluding renewal options)** |
| April 2022-Dec 2027 | 6006 | $51051 | $317455 |

---

During the twelve months ended December 31, 2025 and 2024, the Company received rental revenue of $55,784 and $54,160, respectively.

The independent members of the Board of the Company approved all of the leasing transaction described above.

The former Chairman was also a partner of the firm LambZankel, LLP that provided pro bono legal representation to the aforementioned not-for-profit corporation on the lease.

Effective immediately following the annual meeting of shareholders on November 5, 2025, Paul Lamb is no longer a director and thus is no longer deemed a "related person".

All members of the Board are independent directors as defined by the listing requirements of the Nasdaq Stock Market. Such independent directors are Messrs. Loeb, Macklin, Salour and Smith. The Company has compensation, nominating, investment and audit committees, all of the members of which are also independent as defined by the listing requirements of the Nasdaq Stock Market.

**Item 14. Principal Accounting Fees and Services.** 

The following is a summary of the fees billed to the Company by Baker Tilly US, LLP, its independent registered principal accountants, for professional services rendered for the years ended December 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
| **Fee Category** | **Fiscal** <br> **December 31,** <br> **2025** | **Fiscal** <br> **December 31,** <br> **2024** |
| Audit Fees (1) | $178500 | $265538 |
| Tax Fees (2) | 47560 | 46550 |
| Total Fees | $226060 | $312088 |

---

(1) Audit Fees consist of aggregate fees billed for professional services rendered for the audit of the Company's annual financial statements, review of the interim financial statements included in quarterly reports, S-1 consent and services that are normally provided by the principal accountants in connection with statutory and regulatory filings or engagements for the fiscal years ended December 31, 2025 and 2024, respectively.

(2) Tax Fees consist of aggregate fees billed for professional services rendered by the Company's principal accountant for tax compliance, tax advice and tax planning. The amounts disclosed consist of fees paid for the preparation of federal and state income tax returns and K-1's.

The Audit Committee is responsible for the appointment, compensation and oversight of the work of the principal accountants and approves in advance any services to be performed by the principal accountants, whether audit-related or not. The Audit Committee reviews each proposed engagement to determine whether the provision of services is compatible with maintaining the independence of the principal accountant's independent auditors. The Audit Committee has determined not to adopt any blanket pre-approval policies or procedures. All of the fees shown above were pre-approved by the Audit Committee.

------

**PART IV**

**Item 15. Exhibits and Financial Statement Schedules.** 

(a) <u>Financial Statements:</u>

Report of Independent Registered Public Accounting Firm<br>

Consolidated Statement of Net Assets as of December 31, 2025 and 2024 (liquidation basis)<br>

Consolidated Statement of Changes in Net Assets for the twelve months ended December 31, 2025 and 2024, (liquidation basis)<br>

Notes to Consolidated Financial Statements<br>

Schedules<br>

All other information required by the following schedules has been included in the consolidated financial statements, is not applicable, or not required:<br>

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

(b) <u>Exhibits:</u> The following exhibits are either filed as part of this report or are incorporated herein by reference as indicated:

---

| | |
|:---|:---|
| 3.1 | [<u>Articles of Organization of Gyrodyne, LLC, dated as of October 3, 2013 (1)</u>](http://www.sec.gov/Archives/edgar/data/1589061/000157104913000961/exhibit_3-1.htm) |

---

---

| | |
|:---|:---|
| 3.2 | [<u>Amended and Restated Limited Liability Company Agreement of Gyrodyne, LLC (2)</u>](http://www.sec.gov/Archives/edgar/data/1589061/000143774915016666/ex3-1.htm) |

---

---

| | |
|:---|:---|
| 10.1 | [<u>Employment Agreement, with Gary J. Fitlin, dated May 15, 2013 (3)</u>](http://www.sec.gov/Archives/edgar/data/44689/000143774913006603/gyro20130523_8kex10-2.htm) |

---

---

| | |
|:---|:---|
| 10.2 | [<u>Employment Agreement with Peter Pitsiokos dated May 8, 2014 (4)</u>](http://www.sec.gov/Archives/edgar/data/44689/000143774914008754/ex10-6.htm) |

---

---

| | |
|:---|:---|
| 10.3 | [<u>Indemnification Agreement, dated as of February 8, 2013, between the Company and each of its directors and officers (5)</u>](http://www.sec.gov/Archives/edgar/data/44689/000143774913001619/gyro20130214_8k.htm) |

---

---

| | |
|:---|:---|
| 10.4 | [<u>Amendment No. 1 to Employment Agreement with Peter Pitsiokos (6)</u>](http://www.sec.gov/Archives/edgar/data/1589061/000143774918001397/ex_104008.htm) |

---

---

| | |
|:---|:---|
| 10.5 | [<u>Amended and Restated Retention Bonus Plan (7)</u>](http://www.sec.gov/Archives/edgar/data/1589061/000143774916032825/ex10-1.htm) |

---

---

| | |
|:---|:---|
| 10.6 | [<u>Amendment No. 2 to Retention Bonus Plan (6)</u>](http://www.sec.gov/Archives/edgar/data/1589061/000143774918001397/ex_104009.htm) |

---

---

| | |
|:---|:---|
| 10.7 | [<u>Amendment No. 3 to Retention Bonus Plan (8)</u>](http://www.sec.gov/Archives/edgar/data/1589061/000143774918019387/ex_127571.htm) |

---

---

| | |
|:---|:---|
| 10.8 | [<u>Amendment No. 4 to the Retention Bonus Plan (9)</u>](http://www.sec.gov/Archives/edgar/data/1589061/000143774922011876/ex_373227.htm) |

---

---

| | |
|:---|:---|
| 10.9 | [<u>Amendment No. 5 to the Retention Bonus Plan (10)</u>](http://www.sec.gov/Archives/edgar/data/1589061/000143774923025610/ex_568333.htm) |

---

---

| | |
|:---|:---|
| 10.10 | [<u>Nonqualified Deferred Compensation Plan (11)</u>](http://www.sec.gov/Archives/edgar/data/1589061/000143774919024322/ex_167336.htm) |

---

---

| | |
|:---|:---|
| 10.11 | [<u>Restricted Stock Plan (12)</u>](http://www.sec.gov/Archives/edgar/data/1589061/000143774923025610/ex_568334.htm) |

---

---

| | |
|:---|:---|
| 10.12 | [<u>Short Form Order of Supreme Court of the State of New York, Suffolk County, dated February 6, 2024 (13)</u>](http://www.sec.gov/Archives/edgar/data/1589061/000143774924003600/ex_624415.htm) |
| 10.13 | [<u>Short Form Order of Supreme Court of the State of New York, Suffolk County, dated March 21, 2025 (19)</u>](http://www.sec.gov/Archives/edgar/data/1589061/000143774925009691/ex_794743.htm) |
| 10.14 | [<u>Purchase and Sale Agreement dated July 30, 2025 between GSD Flowerfield LLC and B2K Smithtown LLC (17)</u>](http://www.sec.gov/Archives/edgar/data/1589061/000143774925024553/ex_847549.htm) |
| 10.15 | [<u>First Amendment dated October 28, 2025 to Purchase and Sale Agreement between GSD Flowerfield LLC and B2K Smithtown LLC (18)</u>](http://www.sec.gov/Archives/edgar/data/1589061/000143774925034094/ex_882326.htm) |
| 10.16 | [<u>Second Amendment dated as of January 6, 2026 to Purchase Agreement dated as of July 30, 2025 between GSD Flowerfield LLC and B2K Smithtown LLC. (20)</u>](http://www.sec.gov/Archives/edgar/data/1589061/000143774926001119/ex_906667.htm) |

---

------

---

| | |
|:---|:---|
| 21.1 | [List of all subsidiaries (14)](ex_935088.htm) |

---

---

| | |
|:---|:---|
| 31.1 | [Rule 13a-14(a)/15d-14(a) Certifications (14)](ex_935089.htm) |

---

---

| | |
|:---|:---|
| 32.1 | [CEO/CFO Certifications Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (16<u>)</u>](ex_935090.htm) |

---

---

| | |
|:---|:---|
| 97.1 | [Executive Compensation Clawback Policy (15)](http://www.sec.gov/Archives/edgar/data/1589061/000143774924009908/ex_644655.htm) |
| 97.2 | [Insider Trading Policy (19)](http://www.sec.gov/Archives/edgar/data/1589061/000143774925009691/ex_794744.htm) |

---

---

| | |
|:---|:---|
| 101.INS | Inline XBRL Instance (14) |

---

---

| | |
|:---|:---|
| 101.SCH | Inline XBRL Taxonomy Extension Schema (14) |

---

---

| | |
|:---|:---|
| 101.CAL | Inline XBRL Taxonomy Extension Calculation (14) |

---

---

| | |
|:---|:---|
| 101.DEF | Inline XBRL Taxonomy Extension Definition (14) |

---

---

| | |
|:---|:---|
| 101.LAB | Inline XBRL Taxonomy Extension Labels (14) |

---

---

| | |
|:---|:---|
| 101.PRE | Inline XBRL Taxonomy Extension Presentation (14) |

---

---

| | |
|:---|:---|
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

---

(1) Incorporated herein by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-4 filed with the Securities and Exchange Commission on October 21, 2013.

(2) Incorporated herein by reference to Exhibit 3.2 to the Company's Registration Statement on Form 8-A12B filed with the Securities and Exchange Commission on September 1, 2015.

(3) Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on May 23, 2013.

(4) Incorporated herein by reference to the Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on May 12, 2014.

(5) Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on February 14, 2013.

(6) Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on January 31, 2018.

(7) Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on May 26, 2016.

(8) Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on November 2, 2018.

(9) Incorporated herein by reference to the Company's Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on May 11, 2022.

(10) Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on September 11, 2023.

(11) Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on December 13, 2019.

(12) Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on September 11, 2023.

------

(13) Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on February 9, 2024.

(14) Filed as part of this report.

(15) Incorporated herein by reference to the Company's Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 29, 2024.

(16) Furnished herewith in accordance with Item 601(b)(32) of Regulation S-K. This Exhibit is not deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certification will not be deemed incorporated by reference into any filings under the Securities Act, expect to the extent that the registrant specifically incorporates it by reference.

(17) Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on August 4, 2025.

(18) Incorporated herein by reference to the Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on November 10, 2025.

(19) Incorporated herein by reference to the Company's Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 28, 2025.

(20) Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on January 12, 2026.

\*\* XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

**Item 16. Form 10-K Summary.**

None.

------

**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, LLC. |
| /S/ Gary J. Fitlin |
| By Gary J. Fitlin, President, Chief Executive Officer, Chief Financial Officer and Treasurer |
| Date: March 27, 2026 |

---

\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*

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

---

| |
|:---|
| /S/ Richard B. Smith |
| By Richard B. Smith, Director |
| Date: March 27, 2026 |
| /S/ Ronald J. Macklin |
| By Ronald J. Macklin, Director |
| Date: March 27, 2026 |
| /S/ Nader Salour |
| By Nader Salour, Director |
| Date: March 27, 2026 |
| /S/ Jan Loeb |
| By Jan Loeb, Director |
| Date: March 27, 2026 |

---

------

**Exhibit Index**

---

| | |
|:---|:---|
| 3.1 | Articles of Organization of Gyrodyne, LLC, dated as of October 3, 2013 (1) |

---

---

| | |
|:---|:---|
| 3.2 | Amended and Restated Limited Liability Company Agreement of Gyrodyne, LLC (2) |

---

---

| | |
|:---|:---|
| 10.1 | Employment Agreement, with Gary J. Fitlin, dated May 15, 2013 (3) |

---

---

| | |
|:---|:---|
| 10.2 | Employment Agreement with Peter Pitsiokos dated May 8, 2014 (4) |

---

---

| | |
|:---|:---|
| 10.3 | Indemnification Agreement, dated as of February 8, 2013, between the Company and each of its directors and officers (5) |

---

---

| | |
|:---|:---|
| 10.4 | Amendment No. 1 to Employment Agreement with Peter Pitsiokos (6) |

---

---

| | |
|:---|:---|
| 10.5 | Amended and Restated Retention Bonus Plan (7) |

---

---

| | |
|:---|:---|
| 10.6 | Amendment No. 2 to Retention Bonus Plan (6) |

---

---

| | |
|:---|:---|
| 10.7 | Amendment No. 3 to Retention Bonus Plan (8) |

---

---

| | |
|:---|:---|
| 10.8 | Amendment No. 4 to the Retention Bonus Plan (9) |

---

---

| | |
|:---|:---|
| 10.9 | Amendment No. 5 to the Retention Bonus Plan (10) |

---

---

| | |
|:---|:---|
| 10.10 | Nonqualified Deferred Compensation Plan (11) |

---

---

| | |
|:---|:---|
| 10.11 | Restricted Stock Plan (12) |

---

------

---

| | |
|:---|:---|
| 10.12 | Short Form Order of Supreme Court of the State of New York, Suffolk County, dated February 6, 2024 (13) |
| 10.13 | Short Form Order of Supreme Court of the State of New York, Suffolk County, dated March 21, 2025 (19) |
| 10.14 | Purchase and Sale Agreement dated July 30, 2025 between GSD Flowerfield LLC and B2K Smithtown LLC (17) |
| 10.15 | First Amendment dated October 28, 2025 to Purchase and Sale Agreement between GSD Flowerfield LLC and B2K Smithtown LLC (18) |
| 10.16 | Second Amendment dated as of January 6, 2026 to Purchase Agreement dated as of July 30, 2025 between GSD Flowerfield LLC and B2K Smithtown LLC. (20) |

---

---

| | |
|:---|:---|
| 21.1 | List of all subsidiaries (14) |

---

---

| | |
|:---|:---|
| 31.1 | Rule 13a-14(a)/15d-14(a) Certifications (14) |

---

---

| | |
|:---|:---|
| 32.1 | CEO/CFO Certifications Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (16) |

---

---

| | |
|:---|:---|
| 97.1 | Executive Compensation Clawback Policy (15) |
| 97.2 | Insider Trading Policy (19) |

---

---

| | |
|:---|:---|
| 101.INS | Inline XBRL Instance (14) |

---

---

| | |
|:---|:---|
| 101.SCH | Inline XBRL Taxonomy Extension Schema (14) |

---

---

| | |
|:---|:---|
| 101.CAL | Inline XBRL Taxonomy Extension Calculation (14) |

---

---

| | |
|:---|:---|
| 101.DEF | Inline XBRL Taxonomy Extension Definition (14) |

---

---

| | |
|:---|:---|
| 101.LAB | Inline XBRL Taxonomy Extension Labels (14) |

---

---

| | |
|:---|:---|
| 101.PRE | Inline XBRL Taxonomy Extension Presentation (14) |

---

---

| | |
|:---|:---|
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

---

(1) Incorporated herein by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-4 filed with the Securities and Exchange Commission on October 21, 2013.

(2) Incorporated herein by reference to Exhibit 3.2 to the Company's Registration Statement on Form 8-A12B filed with the Securities and Exchange Commission on September 1, 2015.

(3) Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on May 23, 2013.

(4) Incorporated herein by reference to the Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on May 12, 2014.

(5) Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on February 14, 2013.

(6) Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on January 31, 2018.

(7) Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on May 26, 2016.

------

(8) Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on November 2, 2018.

(9) Incorporated herein by reference to the Company's Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on May 11, 2022.

(10) Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on September 11, 2023.

(11) Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on December 13, 2019.

(12) Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on September 11, 2023.

(13) Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on February 9, 2024.

(14) Filed as part of this report.

(15) Incorporated herein by reference to the Company's Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 29, 2024.

(16) Furnished herewith in accordance with Item 601(b)(32) of Regulation S-K. This Exhibit is not deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certification will not be deemed incorporated by reference into any filings under the Securities Act, expect to the extent that the registrant specifically incorporates it by reference.

(17) Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on August 4, 2025.

(18) Incorporated herein by reference to the Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on November 10, 2025.

(19) Incorporated herein by reference to the Company's Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 28, 2025.

(20) Incorporated herein by reference to Form 8-K, filed with the Securities and Exchange Commission on January 12, 2026.

\*\* XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

------

<u>**GYRODYNE, LLC AND SUBSIDIARIES**</u>

**REPORT ON AUDITS OF CONSOLIDATED**

**FINANCIAL STATEMENTS**

***Years Ended December 31, 2025 and 2024***

------

**GYRODYNE, LLC**

**AND SUBSIDIARIES**

---

| | |
|:---|:---|
| **Contents** | |
| *Years Ended December 31, 2025 and 2024* | *Pages* |
| Report of Independent Registered Public Accounting Firm | F-1 |
| Consolidated Statements of Net Assets as of December 31, 2025 and 2024 (liquidation basis) | F-3 |
| Consolidated Statements of Changes in Net Assets for the years ended December 31, 2025 and 2024 (liquidation basis) | F-4 |
| Notes to Consolidated Financial Statements | F-5-22 |

---

------

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the board of directors of Gyrodyne, LLC:

**Opinion on the Financial Statements**

We have audited the accompanying consolidated statements of net assets (liquidation basis) of Gyrodyne, LLC and Subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of changes in net assets (liquidation basis) for the years then ended, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated statements of net assets (liquidation basis) of the Company as of December 31, 2025 and 2024, and the related consolidated statements of changes in net assets (liquidation basis) for years then ended, in conformity with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

**Critical Audit Matter**

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

**Liquidation Value of Real Estate Assets - Refer to Notes 2, 3, 5, 7 and 14 to the Consolidated Financial Statements**

*Critical Audit Matter Description*

The Company presents its financial statements under the liquidation basis of accounting and, accordingly, presents its real estate assets at their liquidation value at each reporting period.

The Company estimates the liquidation value of its real estate assets by using both income and market valuation techniques. The market valuation techniques use estimates and assumptions based on market information, such as broker opinions of value, appraisals, and recent sales data for similar assets. The income valuation technique consists of a discounted cash flow model. As disclosed by management, the Company's evaluation of anticipated discounted cash flows is subjective and is based, in part, on estimates and assumptions, such as market rental rates, capitalization rates, discount rates and in certain instances offers or sales agreements that could differ materially from actual results.

------

We identified the liquidation value of real estate assets as a critical audit matter because of the significant estimates and assumptions management makes to determine the liquidation value of the real estate assets, specifically the estimates of capitalization and discount rates for each real estate asset. Performing audit procedures to evaluate the reasonableness of these estimates and assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

*How the Critical Audit Matter Was Addressed in the Audit*

Our audit procedures related to the critical audit matter included, among other things, the following:

● We obtained an understanding and evaluated the design and implementation of the controls over management's evaluation of the key estimates and assumptions used in the determination of the liquidation value of real estate assets, including those over the selection of capitalization and discount rates.

● With the assistance of our fair value specialists, we performed the following procedures:

---

| | |
|:---|:---|
| o | Assessed the reasonableness of the significant assumptions used in relevant real estate appraisals and discounted cash flow analyses, including estimates of capitalization and discount rates |
| o | Tested the source information underlying the assumptions |
| o | Developed a range of independent estimates, focusing on the geographical location and property type and compared our independent estimates to the estimates and assumptions used by the Company |
| o | Tested the mathematical accuracy and completeness of the discounted cash flow analyses |

---

● We evaluated the reasonableness of management's discounted cash flow analyses by comparing management's projections to the Company's historical results and external market sources.

● We evaluated offers both received and made by management on the properties being valued

We have served as the Company's auditor since 1990.

/s/ Baker Tilly US LLP

Tysons, Virginia

March 27, 2026

------

---

| |
|:---|
| **PART I** – **FINANCIAL INFORMATION** |
| **Item 1. Financial Statements.** |

---

---

| |
|:---|
| **GYRODYNE, LLC AND SUBSIDIARIES** |
| **CONSOLIDATED STATEMENTS OF NET ASSETS** |
| (Liquidation Basis) |

---

---

| | | |
|:---|:---|:---|
|  | December 31, 2025 | December 31, 2024 |
| <u>ASSETS:</u> |  |  |
| Real estate held for sale | $53990000 | $50388000 |
| Cash and cash equivalents | 4529597 | 5899232 |
| Rent receivable | 155205 | 335966 |
| Other receivables | 15899 | 36893 |
| Total Assets | $58690701 | $56660091 |
| <u>LIABILITIES:</u> |  |  |
| Accounts payable | $2086306 | $1524238 |
| Accrued liabilities | 2312459 | 2045596 |
| Deferred rent liability |  | 21195 |
| Tenant security deposits payable | 229790 | 213081 |
| Mortgage loans payable | 10868531 | 11169922 |
| Estimated liquidation and operating costs net of receipts | 17334618 | 11089746 |
| Total Liabilities | 32831704 | 26063778 |
| Net assets | $25858997 | $30596313 |

---

**See notes to consolidated financial statements**<br>

------

---

| |
|:---|
| **GYRODYNE, LLC AND SUBSIDIARIES** |
| **CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS** |
| (Liquidation Basis) |

---

---

| | | |
|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, |
|  | 2025 | 2024 |
| Net assets, beginning of period | $30596313 | $30721034 |
| Changes in net assets: |  |  |
| Change in real estate value | 3602000 | (3392000) |
| Issuance of common shares, net |  | 4418380 |
| Remeasurement of assets and liabilities | (8339316) | (1151101) |
| Net decrease in value | (4737316) | (124721) |
| Net assets, end of period | $25858997 | $30596313 |

---

**See notes to consolidated financial statements**<br>

------

---

| |
|:---|
| **GYRODYNE, LLC**<br>**AND SUBSIDIARIES**<br>**Notes to Consolidated Financial Statements (Liquidation Basis)** |
| *Years Ended December 31, 2025 and 2024* |

---

**1.** **The Company**

*Strategic Overview*

Gyrodyne, LLC's (including its subsidiaries, "Gyrodyne", the "Company" or the "Registrant") corporate strategy is to pursue entitlements on our two remaining properties, so that they can be sold to one or more developers with increased development flexibility at higher prices, thereby maximizing value and distributions. Gyrodyne intends to dissolve after we complete the disposition of our assets, apply the proceeds to settle debts and claims, and then pay liquidating distributions to our shareholders.

Gyrodyne filed subdivision applications in March 2017 with respect to Cortlandt Manor and Flowerfield. The COVID-19 pandemic caused significant delays in the regulatory approval process, as state, county and local staff charged with processing our subdivision applications all postponed activity due to work-from-home transitions.

***Flowerfield***

On March 30, 2022, the Town of Smithtown Planning Board (the "Planning Board") voted four to zero with one abstention to grant Gyrodyne's application for preliminary approval to divide the Flowerfield property into eight lots, subject to certain conditions (the "Flowerfield Subdivision Application").

On April 26, 2022, the Incorporated Village of Head of the Harbor and certain other parties (collectively, the "Petitioners"), commenced a special proceeding under Article 78 of New York's Civil Practice Law & Rules (the "Article 78 Proceeding") against the Town of Smithtown and certain other parties, including Gyrodyne, seeking to annul the Planning Board's determinations relating to the Flowerfield Subdivision Application. Specifically, the petition commencing the Article 78 Proceeding (the "Petition") seeks to annul the Planning Board's (i) approval of a findings statement pursuant to the State Environmental Quality Review Act ("SEQRA"), dated September 16, 2021, and adopted by the Planning Board on March 30, 2022 (the "Findings Statement"), concerning the Flowerfield Subdivision Application, and (ii) preliminary approval on March 30, 2022 of the Flowerfield Subdivision Application. The arguments made in the Petition are substantially similar to those made by opponents of the Flowerfield Subdivision Application during the SEQRA and subdivision process. Gyrodyne and the Town of Smithtown are vigorously defending the Planning Board's determinations against the Petition. In June 2022, Gyrodyne and the Town of Smithtown filed motions to dismiss the Petition (the "Motions"). On February 6, 2024, the Supreme Court of the State of New York, Suffolk County issued an order (the "Order"), denying the Motions in part and granting them in part. Specifically, the Order (i) denied the Motions as to three individual Petitioners and the St. James-Head of the Harbor Neighborhood Preservation Coalition, Inc., (ii) granted the Motions as to the remaining twenty (20) individual Petitioners and the Village of Head of the Harbor, (iii) denied the branch of Gyrodyne's motion alleging that Petitioners failed to state a claim. On October 11, 2024, the Supreme Court of the State of New York issued a ruling in favor of the Company dismissing the Petition in its entirety. On October 28, 2024, the Company received a notice of appeal filed by the petitioners in this proceeding seeking to appeal the court's dismissal of the Article 78 petition, citing as grounds for appeal "whether the court erred in denying the petition and dismissed the Article 78 proceeding, and any and all other issues which may arise upon further review of the record on appeal".

On November 12, 2024, the petitioners filed a notice of motion to renew and reargue, seeking to have the court direct the respondents to undertake a supplemental environmental impact statement to address retaining of storm water at the property being developed in light of a recent storm, and to annul the resolution approving the preliminary site plan.

On March 17, 2025, the Supreme Court of the State of New York, Suffolk County issued an order denying the appellants motion to stay enforcement of the order, pending hearing and determination of appeal. On March 21, 2025, the Supreme Court of the State of New York, Suffolk County issued an order denying the Petitioners motion to renew and reargue. On April 16, 2025 the Petitioners filed a notice of appeal seeking to appeal the March 17, 2025 order denying the appellants motion to stay enforcement of the order dismissing the Petition pending the appeal.

On April 28, 2025 the Petitioners perfected their appeal on the original Petition. The Petitioners' memorandum of law largely repeats their earlier position and arguments, which the Supreme Court previously found to be an insufficient basis for overturning the Planning Board's determinations. Gyrodyne filed its response to the Appeal on July 25, 2025 and the Town submitted its reply to the Appeal on July 28, 2025.

------

---

| |
|:---|
| **GYRODYNE, LLC**<br>**AND SUBSIDIARIES**<br>**Notes to Consolidated Financial Statements (Liquidation Basis)** |
| *Years Ended December 31, 2025 and 2024* |

---

Pleadings filed in the Article 78 Proceeding may be accessed through a link (and related instructions) to the New York State Unified Court System which appears on the Company's website at https://www.gyrodyne.com.

Gyrodyne remains confident in its defense of the appeal, the motion to renew and reargue and the motion to appeal the denial of the Petitioners' motion to stay enforcement of the order. Gyrodyne believes that both the Article 78 Proceeding and the process of negotiating purchase agreements, securing final subdivision approval and final unappealable site plan approval and consummating the sale of our properties will extend into 2028, although there can be no assurance that Gyrodyne and the Town of Smithtown will be successful in the defense of the appeals and any other motions or that other factors beyond our control will not necessitate a further extension of the timeline.

The estimated timeline assumes that Flowerfield is not sold until the culmination of the Article 78 Proceeding. The developed portion of Flowerfield, situated on two separate lots, may be sold together or separately upon the resolution of the Article 78 Proceeding and the filing of the final subdivision map without site plan approval.

***Cortlandt Manor***

On March 20, 2023, the Town of Cortlandt Town Board adopted the SEQRA findings statement and approved local law establishing the Medical Oriented Zoning District (the "MOD") which includes Gyrodyne's Cortlandt Manor property (the "CM Findings Statement"). Pursuant to the adopted MOD, Gyrodyne received designation for total density of 154,000 square feet to be comprised of 150,000 square feet of medical use and 4,000 square feet of retail use.

***Timeline and Marketing Campaign***

Various other factors will continue to impact the timeline to achieve approvals, including the backlog of land use applications, zoning authority labor shortages and environmental concerns. Nevertheless, we will continue to market the properties and, although there can be no assurances, the Company believes subdivision approval will be received in the third quarter of 2026 for Flowerfield, and in 2027 for Cortlandt Manor.

On July 30, 2025, GSD Flowerfield LLC, a *New* York limited liability company ("GSD") wholly-owned by the Company, entered into a Purchase and Sale Agreement (as amended, the "B2K Agreement") for the sale of an approximately 49 acre parcel of vacant land to B2K Smithtown LLC ("B2K"), an affiliate of B2K Development LLC, which property forms a portion of the Company's Flowerfield complex in St. James, New York, for a purchase price of between $24,000,000 and $28,740,000, subject to conditions and contingencies set forth in the B2K Agreement. Included among the conditions set forth in the B2K Agreement is receipt of subdivision and site plan approval. Based on the terms of the B2K Agreement, we estimate the gross value of the B2K Agreement is $28,740,000, contingent on a pending site plan submission, which we believe will be approved by the Smithtown Planning Department. Under the terms of the B2K Agreement, the Company is required to issue B2K a credit at closing for the industrial park's proportionate share of costs for a sewer treatment plant ("STP") and on-site infrastructure costs aggregating $4,020,222, which is included in the Company's estimated costs in excess of receipts. The incremental value impact, if any, to the industrial building lots associated with access to an on-site STP is not estimable at this time as it is contingent on many unknown factors, including but not limited to the markets assessment of the probability of closing of the B2K transaction, timing for completion of the STP, and the future associated market demand for suite usage requiring an STP amenity.

We anticipate that future purchase agreements for Flowerfield or Cortlandt or any portions thereof will similarly identify receipt of subdivision and site plan approval as conditions to closing which the Company believes can be pursued simultaneously rather than sequentially.

Consistent with the Company's plan of liquidation the Company continues to engage JLL to sell the remaining Flowerfield and Cortlandt Manor properties as individual lots or combined. In addition, Gyrodyne would entertain offers for the acquisition of the Company itself if we believe such acquisition from a timing and value perspective would maximize the net asset in liquidation value for Gyrodyne's shareholders.

------

---

| |
|:---|
| **GYRODYNE, LLC**<br>**AND SUBSIDIARIES**<br>**Notes to Consolidated Financial Statements (Liquidation Basis)** |
| *Years Ended December 31, 2025 and 2024* |

---

*Business*

Gyrodyne is a limited liability company formed under the laws of the State of New York whose primary business is the management of, and the pursuit of entitlements on, a portfolio of medical office and industrial properties located in Suffolk ("Flowerfield") and Westchester Counties ("Cortlandt Manor"), New York State.

Substantially all of our developed properties are subject to leases in which the tenant reimburses the Company for a portion, all of or substantially all of the costs and/or cost increases for utilities, insurance, repairs, maintenance and real estate taxes. Certain leases provide that the Company is responsible for certain operating expenses.

Our efforts to generate the highest values for Flowerfield and Cortlandt Manor may involve in limited circumstances other strategies to manage risk and or enhance the net value of Flowerfield and Cortlandt Manor to maximize the returns for our shareholders. Gyrodyne intends to dissolve after we complete the disposition of all of our real property assets, apply the proceeds of such dispositions first to settle any debts and claims, pending or otherwise, against Gyrodyne, and then pay distributions to holders of Gyrodyne common shares. The process of seeking entitlements and the amount and timing of distributions from proceeds of asset sales involve risks and uncertainties. As such, it is impossible at this time to determine with certainty the ultimate amount of proceeds that will actually be distributed to our shareholders or the timing of such payments. Accordingly, no assurance can be given that the distributions will equal or exceed the estimate of net assets presented in our consolidated statements of net assets. The actual nature, amount and timing of all distributions will be determined by Gyrodyne's Board in its sole discretion and will depend in part upon the Company's ability to convert our remaining assets into cash in compliance with our obligations under the Stipulation entered into in connection with a class action lawsuit settled in 2015 (See Note 16 – Contingencies) and satisfy our remaining liabilities and obligations. Under Gyrodyne's Amended and Restated Limited Liability Company Agreement (the "LLC Agreement"), such dissolution may be effected upon an election to dissolve the Company by the Board that is approved by the vote of holders of a majority of Gyrodyne common shares or, in the Board's sole discretion and without any separate approval by the holders of Gyrodyne common shares, at any time the value of Gyrodyne's assets, as determined by the Board in good faith, is less than $1,000,000.

The Company's two remaining real estate properties, each of which is held in a single asset limited liability company wholly owned by the Company, consist of:

● Cortlandt Manor:13.8 acres in Cortlandt Manor, New York, consisting of the 31,000 square foot Cortlandt Manor Medical Center; and

● Flowerfield: 63 acres in St. James, New York, including a 14-acre multi-tenanted industrial park comprising 135,000 rentable square feet.

**2.** **Summary of Significant Accounting Policies**

Gyrodyne intends to dissolve after we complete the disposition of all of our real property assets, apply the proceeds of such dispositions first to settle any debts and claims, pending or otherwise, against Gyrodyne, and then pay distributions to holders of Gyrodyne common shares. Therefore, effective September 1, 2015 Gyrodyne adopted the liquidation basis of accounting. This basis of accounting is considered appropriate when, among other things, liquidation of the entity is "imminent", as defined in ASC 205-30, Presentation of Financial Statements Liquidation Basis of Accounting. Under the LLC Agreement, the Board may elect, in its sole discretion and without any separate approval by shareholders, to dissolve the Company at any time the value of the Company's assets, as determined by the Board in good faith, is less than $1 million. The LLC Agreement also provides that the Company will dissolve, and its affairs wound up, upon the sale, exchange or other disposition of all the real properties of the Company. As a result, liquidation is deemed to be "imminent" in accordance with the guidance provided in ASC 205-30.

***Principles of Consolidation -*** The consolidated financial statements include the accounts of Gyrodyne and all subsidiaries. All consolidated subsidiaries are wholly owned. All inter-company balances and transactions have been eliminated.

------

---

| |
|:---|
| **GYRODYNE, LLC**<br>**AND SUBSIDIARIES**<br>**Notes to Consolidated Financial Statements (Liquidation Basis)** |
| *Years Ended December 31, 2025 and 2024* |

---

***Basis of Presentation - Liquidation Basis of Accounting*** – Under the liquidation basis of accounting the consolidated balance sheet and consolidated statements of operations, equity, comprehensive income and cash flows are no longer presented. The consolidated statements of net assets and the consolidated statements of changes in net assets are the principal financial statements presented under the liquidation basis of accounting.

Under the liquidation basis of accounting, all the Company's assets have been stated at their estimated net realizable value, or liquidation value, (which represents the estimated amount of cash that Gyrodyne will collect on the disposal of assets (prior to any credits for contribution amounts which are reflected in the costs in excess of receipts) as it carries out the plan of liquidation), which is based on independent third-party appraisals, estimates and other indications of sales value. All liabilities of the Company, including those estimated costs associated with implementing the plan of liquidation, have been stated at their estimated settlement amounts. These amounts are presented in the accompanying statements of net assets. These estimates are periodically reviewed and adjusted as appropriate. There can be no assurance that these estimated values will be realized. Such amounts should not be taken as an indication of the timing or amount of future distributions or our actual dissolution. The valuation of assets at their net realizable value and liabilities at their anticipated settlement amount represent estimates, based on present facts and circumstances, of the net realizable value of the assets and the costs associated with carrying out the plan of liquidation. The actual values and costs associated with carrying out the plan of liquidation may differ from amounts reflected in the accompanying consolidated financial statements because of the plan's inherent uncertainty. These differences may be material. In particular, the estimates of our costs will vary with the length of time necessary to complete the plan of liquidation, which is currently anticipated to be completed in 2028.

The Company is in the process of pursuing entitlements and density approvals, and our ability to obtain required permits and authorizations is subject to factors beyond our control, including environmental concerns of governmental entities, community groups and purchasers. The process has involved extensive analysis at the government entity level, as well as between government entities such as town planning departments and Gyrodyne and or purchasers, and will continue up until such time as entitlement and density decisions (which may also include site plan approval of prospective purchasers) are made by the relevant government entities. The Company hopes to secure favorable decisions on entitlements and density so that we can then seek the sale of our remaining properties with increased development flexibility. Any deviation in use or density between what we are pursuing in our entitlement efforts and what is ultimately permitted could have a material impact on values.

The Company believes the process of negotiating purchase agreements, securing final approvals and consummating the sale of our properties will culminate in 2028. The Company is actively marketing its properties and intends to negotiate contracts in an effort to complete the process as soon as practicable with the ultimate timeline being largely dependent on factors outside the Company's control, including without limitation the Article 78 Proceeding and delays in securing final regulatory approvals caused by the ongoing backlog of land use applications, zoning authority labor shortages and environmental concerns. Consequently, there can be no assurance that the Company will be able to meet our formal stated target of 2028.

The Company's assumptions and estimates (including the sales proceeds of all its real estate holdings, selling costs, retention bonus payments, rental revenues, rental expenses, capital expenditures, land entitlement costs, general and administrative fees, director and officer liability and reimbursement, post liquidation insurance tail coverage policy and final liquidation costs) are based on completing the liquidation in 2028. On an ongoing basis, Gyrodyne evaluates the estimates and assumptions that can have a significant impact on the reported net assets in liquidation and will update respective information accordingly for any costs and value associated with a change in the duration of the liquidation, as we cannot give any assurance on the timing of the ultimate sale of all the Company's properties.

***Management Estimates*** – ****In preparing the consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles ("GAAP") and the liquidation basis of accounting, management is required to make estimates and assumptions that affect the reported amounts of assets, including net assets in liquidation, and liabilities, and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of receipts and expenditures for the reporting period. Actual results could differ from those estimates. The real estate market is cyclical in nature. Property values are affected by, among other things, the availability of capital, occupancy rates, rental rates, interest rates and inflation rates. As a result, determining real estate values involves many assumptions. Amounts ultimately realized may vary significantly from the net assets in liquidation values presented. The Company's most significant accounting estimate relates to the determination of the value of net assets in liquidation.

------

---

| |
|:---|
| **GYRODYNE, LLC**<br>**AND SUBSIDIARIES**<br>**Notes to Consolidated Financial Statements (Liquidation Basis)** |
| *Years Ended December 31, 2025 and 2024* |

---

***Fair Value of Real Estate -*** The Company also considers in its valuation estimates the receipt of any expressions of interest/letters from perspective buyers adjusted to reflect the Company's best estimate of any contingent financial terms inclusive of approval density and related site plans.  ****

***Cash equivalents -*** The Company considers all certificates of deposits, money market funds, treasury securities and other highly liquid debt instruments purchased with short-term maturities to be cash equivalents.

***Allowance for doubtful accounts*** – Rent receivable is carried at net realizable value. Management makes estimates of the collectability of rents receivable. Management specifically analyzes receivables and historical bad debts, tenant concentrations, tenant creditworthiness, current economic trends and changes in tenant payment patterns when evaluating the adequacy of the allowance for doubtful accounts.

***Estimated Distributions per Share*** – Under the liquidation basis of accounting, the Company reports estimated distributions per share data by dividing net assets in liquidation by the number of shares outstanding.

***Industry Segments -*** Gyrodyne's corporate strategy is to enhance the value of Flowerfield and Cortlandt Manor by pursuing entitlement opportunities to provide purchasers increased development flexibility, and by enhancing the value of our leases, and then selling our properties in an orderly manner at higher values. The Company manages this strategy on an aggregated, single segment basis for purposes of assessing performance and making decisions (inclusive of capital allocation, leasing, entitlements and sales). Therefore, the Company has only one reporting segment.

As reported, the Company is on a liquidation basis of accounting. The detailed information regularly provided to the chief operating decision maker ("CODM"), the President and CEO, is reported in Note 4 in detail supporting the estimated liquidation and operating costs net of estimated receipts. This information allows the CODM to manage and forecast any impact the operations have on the estimated real estate value and in the aggregate allows the CODM to calculate estimated distributions. The net assets in liquidation as of December 31, 2025 ($25,858,997) and December 31, 2024 ($30,596,313) results in estimated distributions of approximately $11.76 and $13.91 per common share, respectively, based on 2,199,308 shares outstanding.

***New Accounting Pronouncements -*** Management has evaluated the impact of newly issued accounting pronouncements, whether effective or not as of December 31, 2025, and has concluded that they will not have a material impact on the Company's consolidated financial statements since the Company reports on a liquidation basis.

3. **Statements of Net Assets in Liquidation** 

Net assets as of December 31, 2025 and December 31, 2024 would result in estimated liquidating distributions of $25,858,997 and $30,596,313, respectively, or approximately $11.76 and $13.91 per common share, respectively, based on 2,199,308 shares outstanding. The decrease of $4,737,316 in estimated liquidating distributions is mainly attributable to an increase in estimated liquidation and operating costs net of estimated receipts for the two year timeline extension of approximately $3,500,000 (to allow sufficient time for the B2K Agreement (dated July 30<sup>th</sup>, 2025 inclusive of its latest amendment dated January 6, 2026) to close), the closing credit to B2K for certain sewer treatment plant and onsite infrastructure costs of approximately $4,000,000, increase in retention bonuses and selling costs due to the increased value of real estate of approximately $479,000, prepayment penalty and loan extension/new loan fees of approximately $140,000 and additional land development fees of $190,000 (excluding the adjustment attributable to the timeline extension) partially offset by the increase in real estate value of approximately $3,600,000.

The cash balance at the end of the liquidation period (currently estimated to be December 31, 2028, although the estimated completion of the liquidation period may change), excluding any interim distributions, is estimated based on adjustments for the following items which are estimated through December 31, 2028:

1. The estimated cash receipts from the operation of the Company's properties net of rental property related expenditures as well as costs expected to be incurred to preserve or improve the net realizable value of the properties at their estimated gross sales proceeds.

------

---

| |
|:---|
| **GYRODYNE, LLC**<br>**AND SUBSIDIARIES**<br>**Notes to Consolidated Financial Statements (Liquidation Basis)** |
| *Years Ended December 31, 2025 and 2024* |

---

2. Net proceeds from the sale of all the Company's real estate holdings.

3. The general and administrative expenses and or liabilities associated with operations and the liquidation of the Company including severance, director and officer liability coverage including post liquidation tail policy coverage, and financial and legal fees (inclusive of the Article 78 Proceeding) to complete the liquidation.

4. Costs for the pursuit of entitlements on the Flowerfield and Cortlandt Manor properties.

5. Retention bonus amounts (see Note 12).

6. Debt service on the Company's credit facilities.

The Company estimates the net realizable value of its real estate assets by using income and market valuation techniques. The Company may estimate net realizable values using market information such as broker opinions of value, appraisals, and recent sales data for similar assets or discounted cash flow models, which primarily rely on Level 3 inputs, as defined under FASB ASC Topic No. 820, Fair Value Measurement. The Company also considers in its valuation estimates the receipt of any credible expressions of interest/letters from perspective buyers adjusted to reflect the Company's best estimate of any contingent financial terms such as approved density and related site plans. The cash flow models include estimated cash inflows and outflows over a specified holding period. These cash flows may include contractual rental revenues, projected future rental revenues and expenses and forecasted capital improvements and lease commissions based upon market conditions determined through discussion with local real estate professionals and relevant Company experience with its current and previously owned properties. Capitalization rates and discount rates utilized in these models are estimated by management based upon rates that management believes to be within a reasonable range of current market rates for the respective properties based upon an analysis of factors such as property and tenant quality, geographical location, local supply and demand observations and no sewage treatment plant. To the extent the Company underestimates or overestimates forecasted cash outflows (capital improvements, lease commissions. operating costs and credit costs) or overestimates or underestimates forecasted cash inflows (rental revenue rates) or other unfavorable or favorable variances of the aforementioned assumptions, the estimated net realizable value of its real estate assets could be overstated or understated.

The Company estimates that it will incur approximately $1,326,000 in land entitlement costs (included in the consolidated statement of net assets as part of the estimated liquidation and operating costs net of receipts, (see Note 4)) from January 2026 through the end of the liquidation period, currently estimated to conclude in 2028, in an effort to obtain entitlements, including special permits. The Company believes the commitment of these resources will enable the Company to position the properties for sale with all entitlements necessary to maximize the aggregate Flowerfield and Cortlandt Manor property values and resulting distributions. During the year ended December 31, 2025, the Company incurred approximately $380,000 of land entitlement costs, consisting predominately of engineering fees, legal fees and real estate taxes. The Company believes the remaining balance of $1,326,000 (inclusive of real estate taxes of $448,500 and regulatory fees of $408,000) will be incurred from January 2026 through the end of the liquidation period. The Company does not intend on developing the properties but rather positioning the properties for increased development flexibility in the shortest period of time with the least amount of risk to the Company. The costs and time frame to achieve the entitlements could change due to a range of factors including a shift in the value of certain entitlements making it more profitable to pursue a different mix of entitlements and the dynamics of the real estate market. As a result, the Company has focused and will continue to focus its land entitlement efforts on achieving the highest and best use while considering the time and direct and indirect costs necessary to achieve such entitlements. During the process of pursuing such entitlements, the Company may entertain offers from potential buyers who may be willing to pay premiums for the properties that the Company finds more acceptable from a timing or value perspective than completing the entitlement processes itself. There can be no assurance that our value enhancement efforts will result in property value increases that exceed the costs we incur in such efforts, or even any increase at all.

The net assets in liquidation as of December 31, 2025 ($25,858,997) and December 31, 2024 ($30,596,313) results in estimated distributions of approximately $11.76 and $13.91 per common share, respectively, based on 2,199,308 shares outstanding, based on estimates and other indications of sales value. This estimate of distributions includes projections of costs and expenses to be incurred during the period required to complete the plan of liquidation. There is inherent uncertainty with these projections, and they could change materially based on the timing of the sales, change in values of the Cortlandt Manor and/or Flowerfield properties (whether market driven or resulting from the land entitlement efforts) net of any bonuses, favorable or unfavorable changes in the land entitlement costs, the performance of the underlying assets, the market for commercial real estate properties generally and any changes in the underlying assumptions of the projected cash flows.

------

---

| |
|:---|
| **GYRODYNE, LLC**<br>**AND SUBSIDIARIES**<br>**Notes to Consolidated Financial Statements (Liquidation Basis)** |
| *Years Ended December 31, 2025 and 2024* |

---

**4.** **Estimated Liquidation and Operating Costs Net of Estimated Receipts**

The liquidation basis of accounting requires the Company to estimate net cash flows from operations and to accrue all costs associated with implementing and completing the plan of liquidation. The Company currently estimates that it will incur liquidation and operating costs net of estimated receipts during the remaining liquidation period of $17,334,618 (inclusive of selling costs and retention bonuses aggregating approximately $5.3 Million and certain sewer treatment plant and related (direct/indirect) onsite infrastructure costs of approximately $4.0 million (which will be funded as a credit from closing proceeds pursuant to the B2K Agreement, as amended), excluding the gross proceeds from the real estate sales. These amounts can vary significantly due to, among other things, land entitlement costs, the timing and estimates for executing and renewing leases, capital expenditures to maintain the real estate at its current estimated realizable value and estimates of tenant improvement costs, costs to defend the Article 78 Proceeding, the timing of property sales and any direct/indirect costs incurred that are related to the sales (e.g., retention bonuses on the sale of the Cortlandt Manor and Flowerfield properties, real estate commissions, costs to address buy side due diligence inclusive of administrative fees, legal fees and property costs to address items arising from such due diligence and not previously known), the timing and amounts associated with discharging known and contingent liabilities and the costs associated with the winding up of operations. These costs are estimated and are anticipated to be paid during the remaining liquidation period.

The change in the liability for estimated costs in excess of estimated receipts during liquidation from January 1, 2025 through December 31, 2025 is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | January 1,<br> 2025 | Expenditures/ (Receipts) | Remeasurement of Assets and Liabilities | December 31,<br> 2025 |
| Assets: |  |  |  |  |
| Estimated rents and reimbursements | $5816979 | $(3050479) | $5027180 | $7793680 |
| Prepaid expenses and other assets | 470864 | 35532 |  | 506396 |
| Liabilities: |  |  |  |  |
| Property operating costs | (3850068) | 2057276 | (3416586) | (5209378) |
| Capital expenditures | (403442) | 54391 | (949) | (350000) |
| Land entitlement costs | (1238507) | 380435 | (467897) | (1325969) |
| Closing credit for infrastructure costs |  |  | (4020222) | (4020222) |
| Corporate expenditures | (6890106) | 2433240 | (4982084) | (9438950) |
| Selling costs on real estate assets | (3023280) | 184049 | (216120) | (3055351) |
| Retention bonus payments to officers and employees\* | (1972186) |  | (262638) | (2234824) |
| Liability for estimated liquidation and operating costs net of estimated receipts | $(11089746) | $2094444 | $(8339316) | $(17334618) |

---

\*The amounts reported are based on the provisions of the retention bonus plan and the reported amount of the real estate assets estimated net realizable value.

------

---

| |
|:---|
| **GYRODYNE, LLC**<br>**AND SUBSIDIARIES**<br>**Notes to Consolidated Financial Statements (Liquidation Basis)** |
| *Years Ended December 31, 2025 and 2024* |

---

The change in the liability for estimated costs in excess of estimated receipts during liquidation from January 1, 2024 through December 31, 2024 is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | January 1,<br> 2024 | Expenditures/ (Receipts) | Remeasurement of Assets and Liabilities | December 31,<br> 2024 |
| Assets: |  |  |  |  |
| Estimated rents and reimbursements | $6410201 | $(3105989) | $2512767 | $5816979 |
| Prepaid expenses and other assets | 716866 | (205519) | (40483) | 470864 |
| Liabilities: |  |  |  |  |
| Property operating costs | (3852991) | 1898920 | (1895997) | (3850068) |
| Capital expenditures | (300000) | 172506 | (275948) | (403442) |
| Land entitlement costs | (1210861) | 422328 | (449974) | (1238507) |
| Corporate expenditures | (7540106) | 1987749 | (1337749) | (6890106) |
| Selling costs on real estate assets | (3226800) |  | 203520 | (3023280) |
| Retention bonus payments to officers and employees | (2104949) |  | 132763 | (1972186) |
| Liability for estimated liquidation and operating costs net of estimated receipts | $(11108640) | $1169995 | $(1151101) | $(11089746) |

---

**5.** **Disposition Activities**

***Purchase and Sale Agreement with B2K Smithtown LLC***

On July 30, 2025, GSD Flowerfield LLC, a *New* York limited liability company ("GSD") wholly-owned by the Company, entered into a Purchase and Sale Agreement (as amended, the "B2K Agreement") for the sale of an approximately 49 acre parcel of vacant land to B2K Smithtown LLC ("B2K"), an affiliate of B2K Development LLC, which property forms a portion of the Company's Flowerfield complex in St. James, New York, for a purchase price of between $24,000,000 and $28,740,000, subject to conditions and contingencies set forth in the B2K Agreement. Included among the conditions set forth in the B2K Agreement is receipt of subdivision and site plan approval. Based on the terms of the B2K Agreement, we estimate the gross value of the B2K Agreement is $28,740,000, contingent on a pending site plan submission, which we believe will be approved by the Smithtown Planning Department. Under the terms of the B2K Agreement, the Company is required to issue B2K a credit at closing for the industrial park's proportionate share of costs for a sewer treatment plant ("STP") and on-site infrastructure costs aggregating $4,020,222, which is included in the Company's estimated costs in excess of receipts. The incremental value impact, if any, to the industrial building lots associated with access to an on-site STP is not estimable at this time as it is contingent on many unknown factors, including but not limited to the markets assessment of the probability of closing of the B2K transaction, timing for completion of the STP, and the future associated market demand for suite usage requiring an STP amenity.

Among other provisions, the B2K Agreement provides for: (i) an earnest money deposit of $250,000 to be delivered to the escrow agent, subject to a 90-day investigation period, during which time B2K will have the right to terminate the B2K Agreement by written notice to GSD if B2K will not be fully satisfied, in B2K's sole discretion, as to the status of title, suitability of the Premises and all factors concerning same, prior to the expiration of the investigation period, in which case B2K will have the right to receive a refund of its earnest money deposit; and (ii) unless B2K terminates the B2K Agreement on or prior to the end of the investigation period (the "Investigation Period Notice Date"), the closing to occur on the earlier of: (A) that certain date that is no later than eight (8) months after the Town of Smithtown grants Site Plan Approval (as defined in the B2K Agreement), or (B) sixty (60) days after B2K waives the Site Plan Approval contingency. Such closing date is estimated to occur no later than October 2028 or alternatively by June 30 2029 if B2K exercises both of its site plan extension options. Based on the above, the Company is extending its estimated timeline to complete the liquidation to December 31, 2028.

The B2K Agreement is also contingent on the receipt of Subdivision Approval (as defined in the B2K Agreement) and B2K obtaining, at B2K's sole cost and expense, certain other required approvals (the "Approvals") beyond all relevant appeal periods within 18 months following the later of: (i) a designated number of days following the Investigation Period Notice Date or (ii) a designated number of days following the issuance of Subdivision Approval (the "Approval Period").

If B2K fails to obtain the Approvals prior to the expiration of the Approval Period (subject to certain extension rights), B2K may terminate the B2K Agreement or waive the foregoing approval contingencies and close title within 60 days.

The B2K Agreement also contains additional customary covenants, conditions, representations and warranties.

------

---

| |
|:---|
| **GYRODYNE, LLC**<br>**AND SUBSIDIARIES**<br>**Notes to Consolidated Financial Statements (Liquidation Basis)** |
| *Years Ended December 31, 2025 and 2024* |

---

The foregoing description of the B2K Agreement is only a summary of its material terms, does not purport to be a complete description of the rights and obligations of the parties thereunder and is qualified in its entirety by reference to the full text of the B2K Agreement, which was filed as an exhibit to the Company's Current Report on Form 8-K on August 4, 2025.

On October 28, 2025, the Company entered into the first amendment to the B2K Agreement which extends the investigation period to December 5, 2025.

On January 6, 2026, the Company entered into the second amendment to the B2K Agreement which among other provisions provides as follows:

● **On-Site Improvements.** At closing, the Company will credit B2K $1,520,222 toward the purchase price for specified on-site improvements to Lots 1 and 3 of Flowerfield (which is in addition to the $2.5 million cap for the Company's proportionate share of the STP as reflected in the original agreement), with no increase if additional work is required.B2K will be responsible for constructing all common facilities and offsite improvements, while the Company will use commercially reasonable effects to cooperate by providing access at no cost to the Company.

● **Investigation Period.** The parties acknowledge that the investigation period, as extended, has expired and that B2K's right to terminate the Agreement under Section 3.1(D) of the Agreement is null and void and of no further force nor effect.

**6.** **Loans Payable** 

The Company secured a non-revolving credit line for up to $3,000,000 (the "Original Line") with a bank, which closed on March 21, 2018. The original line included an interest only phase. On April 30, 2021, the loan converted to the Permanent Phase with an outstanding principal balance of $2,200,000. During the Permanent Phase, the Company is paying interest at a fixed rate of 3.85%, plus principal based on a 20-year amortization period. The loan will mature on April 30, 2028. The outstanding balance as of December 31, 2025 was $1,828,416.

To secure access to additional working capital through the final sale date of the Flowerfield industrial buildings, the Company secured a second loan evidenced by a non-revolving business line of credit agreement and promissory note with the Original Line bank for up to $3,000,000, which closed on January 24, 2019. This loan included an interest only phase. On May 20, 2021, the loan converted to the Permanent Phase with an outstanding principal balance of $3,000,000. During the Permanent Phase, the Company pays interest at a fixed rate of 3.85%, plus principal based on a 20-year amortization period. The loan will mature on May 20, 2028. The outstanding balance as of December 31, 2025 was $2,503,293.

Both lines are secured by approximately 31.8 acres of the Flowerfield Industrial Park including the related buildings and leases. As of December 31, 2025, the Company is in compliance with the loan covenants. The Company anticipates modifying the terms of the loans following the completion of the subdivision so that the loans remain secured by the two subdivided industrial park lots only.

On September 15, 2021, the Company, through its subsidiary GSD Cortlandt, LLC ("GSD Cortlandt"), secured a $4.95 million term loan (the "2021 Mortgage Loan") with Signature Bank, the proceeds of which were used to pay off the previous GSD Cortlandt debt facility of which $1,050,000 was outstanding. The term of the 2021 Mortgage Loan is five years with an option to extend for an additional five years (the "Extension Period"). Until the initial maturity date (October 10, 2026), the 2021 Mortgage Loan bears interest at an annual rate equal to 3.75%. If the maturity date is extended for the Extension Period, the rate of interest on the 2021 Mortgage Loan will adjust and be fixed for the Extension Period to the greater of (i) 3.75% or (ii) 275 basis points in excess of the weekly average yield on United States Treasury Securities adjusted to a constant maturity of five years as most recently made available by the Federal Reserve Board as of thirty days prior to the first day of the Extension Period. The 2021 Mortgage Loan will be paid in monthly installments of principal and interest calculated on the basis of a thirty-year amortization schedule. If the maturity date is extended for the Extension Period, the amount of each monthly installment will be recalculated for the Extension Period based on the adjusted interest rate on the 2021 Mortgage Loan and an amortization schedule of twenty-five years. The lender has the right, but not the obligation, to decline to extend the term of the 2021 Mortgage Loan if the loan to value ratio of the property is greater than seventy percent (70%), or the property does not support a debt service coverage ratio (as calculated by the lender) of at least 1.3 to 1, in each case on the date the extension is exercised.

------

---

| |
|:---|
| **GYRODYNE, LLC**<br>**AND SUBSIDIARIES**<br>**Notes to Consolidated Financial Statements (Liquidation Basis)** |
| *Years Ended December 31, 2025 and 2024* |

---

The 2021 Mortgage Loan may be prepaid in whole or in part, at any time, provided the borrower (GSD Cortlandt) pays the bank with each prepayment a prepayment fee equal to (i) during the first loan year and, if applicable, the first loan year of the Extension Period, five percent of the amount of such prepayment; (ii) during the second loan year and, if applicable, during the second loan year of the Extension Period, four percent of the amount of such prepayment; (iii) during the third loan year and, if applicable, during the third loan year of the Extension Period, three percent of the amount of such prepayment; (iv) during the fourth loan year and, if applicable, during the fourth loan year of the Extension Period, two percent of the amount of such prepayment; and (v) during the fifth loan year and, if applicable, during the fifth loan year of the Extension Period, one percent of the amount of such prepayment. There will be no prepayment fee for any prepayment made during the sixty-day period immediately preceding the initial maturity date or the last sixty days of the Extension Period. All prepayments must include accrued and unpaid interest through the date of prepayment. On December 14, 2023, the FDIC transferred the 2021 Mortgage Loan to SIG CRE 2023 Venture LLC, which continues to be the holder of the 2021 Mortgage Loan. The outstanding balance as of December 31, 2025 was $4,558,993.

The 2021 Mortgage Loan is secured by the Cortlandt Manor property located at 1985 Crompond Road (5.01 acres).

On December 27, 2023, the Company, through its subsidiaries GSD Cortlandt, LLC ("GSD Cortlandt") and Buttonwood Acquisition, LLC ("Buttonwood"), secured a term mortgage loan (the "2023 Mortgage Loan") in the principal amount of $1,500,000 with LLYR Resources, LLC ("LLYR"). The net proceeds of the 2023 Mortgage Loan will be used for general working capital. The 2023 Mortgage Loan is unconditionally and irrevocably guaranteed by the Company. The term of the 2023 Mortgage Loan is two years. Until the maturity date, the 2023 Mortgage Loan bears interest at a floating interest rate of 1.5% per annum in excess of the Wall Street Prime Rate, with such interest payable monthly, which may be prepaid, in whole or in part, at any time, without payment of a prepayment fee.

The 2023 Mortgage Loan is secured by a first mortgage in the amount of $1,500,000 on the interests of GSD Cortlandt in 1989 Crompond Road and 1987 Crompond Road in Cortlandt Manor, New York, and the interests of Buttonwood in 206 Buttonwood Avenue and certain vacant land off of Buttonwood Road in Cortlandt Manor, New York. The Company closed on a loan modification with LLYR to extend the loan for an additional 24 months, commencing January 1, 2026 at a revised interest rate of 15% which the Company may refinance with no early repayment penalty.

On February 1, 2024, an agreement was signed with one vendor who had previously agreed to defer 50% of payment until the closing of the first property lot sale that is the subject of either the Flowerfield or Cortlandt Manor subdivision. The agreement called for a $200,000 payment on outstanding invoices plus an interest payment on such invoices, interest to accrue monthly on the outstanding balance, agreement to pay all future invoices in full, and conversion of the remaining outstanding balance of $477,829 (balance due after the $200,000 payment) to a loan payable within 15 days of the sale of one of the Company's properties. The loan accrued interest at 0.75% per month through 2024 and 1.0% per month starting January 2025.

The total debt payable mature as follows:

---

| | |
|:---|:---|
| Years Ending December 31, |  |
| 2026 | $4771270 |
| 2027 | 2198426 |
| 2028 | 3898835 |
| 2029 |  |
| 2030 |  |
| Total | $10868531 |

---

------

---

| |
|:---|
| **GYRODYNE, LLC**<br>**AND SUBSIDIARIES**<br>**Notes to Consolidated Financial Statements (Liquidation Basis)** |
| *Years Ended December 31, 2025 and 2024* |

---

**7.** **Real Estate**

The Company reports its financial statements under the liquidation basis of accounting which reflects real estate value at net realizable value (predicated on current asset values). During 2025, the net realizable value of real estate increased by $3,602,000 and in 2024 it decreased by $3,392,000. Both the 2025 and the 2024 change is primarily driven by the current status of entitlement uses and market conditions. The valuation of the remaining real estate as of December 31, 2025 is $53,990,000.

---

| | | |
|:---|:---|:---|
|  | 2025 | 2024 |
| Net Realizable Value at beginning of period | $50388000 | $53780000 |
| **Change in Net Realizable Value** |  |  |
| Cortlandt Manor |  | (3480000) |
| Flowerfield | 3602000 | 88000 |
| **Net Realizable Value on December 31,** | $53990000 | $50388000 |

---

**8.** **Accounts Payable and Accrued Liabilities**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Accounts Payable | Accounts Payable |  | Accrued Liabilities | Accrued Liabilities |
|  | December 31, | December 31, |  | December 31, | December 31, |
|  | 2025 | 2024 |  | 2025 | 2024 |
| Current accounts payable | $731708 | $484934 | Accrued liabilities | $264662 | $322548 |
| Other accounts payable (a) | 1354598 | 1039304 | Deferred Compensation to Directors (b) | 2047797 | 1723048 |
| Total | $2086306 | $1524238 | Total | $2312459 | $2045596 |

---

(a) Represents amount of deferred fees pursuant to informal agreements the Company reached with certain service vendors to defer payment until certain dates, some of which include the closing of the first property lot sale that is the subject of either the Flowerfield or Cortlandt Manor subdivision, respectively.

(b) The director fees and interest accrued under the deferred Compensation Plan where most directors elected to defer 100% of their fees for the years 2020 thru 2025 excluding Jan Loeb who was nominated to the Board on July 28, 2023, and elected to a three-year term at the annual shareholder meeting on October 12, 2023. Two of the four directors have elected not to defer any fees during 2026; the other two directors elected to defer approximately 71% of their respective 2026 director fees. This amount also includes the deferred compensation of a former Board advisor per an agreement to defer payments due under an advisor agreement and three previous Board members.

Accrued liabilities on December 31, 2025 and 2024 are as follows:

---

| | | |
|:---|:---|:---|
|  | December 31, | December 31, |
|  | 2025 | 2024 |
| Payroll and related taxes | $48932 | $73806 |
| Professional fees | 215730 | 248742 |
| Total | $264662 | $322548 |

---

**9.** **Income Taxes**

As a limited liability company, Gyrodyne is not subject to an entity level income tax but rather is treated as a partnership for tax purposes, with its items of income, gain, deduction, loss and credit being reported on the Company's information return, on Form 1065, and allocated annually on Schedule K-1 to its members pro rata. The Company's open tax years are 2023, 2024 and 2025.

The Bipartisan Budget Act of 2015 (the "2015 Act") changed this procedure for partnership tax audits and audit adjustments for partnership returns of large partnerships for fiscal years beginning after December 31, 2017. Pursuant to the 2015 Act, if any audit by the IRS of our income tax returns for any fiscal year beginning after December 31, 2017 results in any adjustments, the IRS may collect any resulting taxes, including any applicable penalties and interest, directly from Gyrodyne. IRS tax audit assessments on tax years beginning January 1, 2018 will require Gyrodyne to: a) bear any tax liability resulting from such audit, or b) elect to push out the tax audit adjustments to the respective shareholders once it has been calculated at the company level.

------

---

| |
|:---|
| **GYRODYNE, LLC**<br>**AND SUBSIDIARIES**<br>**Notes to Consolidated Financial Statements (Liquidation Basis)** |
| *Years Ended December 31, 2025 and 2024* |

---

**10.** **Credit Quality of Rents Receivable**

The Company's standard lease terms include rent due on the first of the month. The Company credit terms extend a standard ten-day grace period across its tenant portfolio and do not normally provide extensions beyond one year.

The Company manages its billing and collection process internally to enable timely identification of collection issues. The controls and related processes enable the Company to timely identify and establish payment plans to minimize material losses from defaults. In accordance with generally accepted accounting principles, the Company identifies high risk collectibles, records them on a cash basis and does not include them in revenue or accounts receivable.

As of December 31, 2025 and 2024, the Company had a $0 balance in its allowance for doubtful accounts.

**11.** **Concentration of Credit Risk**

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents. The Company places its temporary cash investments with high credit quality financial institutions and generally limits the amount of credit exposure in any one financial institution. The Company maintains bank account balances, which exceed insured limits. The Company has not experienced any losses in such accounts and believes that it is not exposed to any significant credit risk on cash. Management does not believe significant credit risk existed on December 31, 2025 and 2024. As the Company executes on the sale of its assets, its regional concentration in tenants will lessen thereby resulting in the increased credit risk from exposure of the local economies.

For the year ended December 31, 2025 rental income from the Company's three largest tenants represented approximately 26%, 19% and 11% of total rental income. The three largest tenants by revenue as of December 31, 2025 consist of a medical tenant in the Cortlandt Manor Medical Center, a New York State Agency located in the industrial park, and an athletics facility in the industrial park.

For the year ended December 31, 2024 rental income from the Company's three largest tenants represented approximately 25%, 21% and 9% of total rental income. The three largest tenants by revenue as of December 31, 2024 consist of a medical tenant in the Cortlandt Manor Medical Center, a New York State Agency located in the industrial park, and an athletics facility in the industrial park.

There can be no assurance that the Company's leases will renew for the same square footage, at favorable rates net of tenant improvements, if at all.

**12.** **Commitments**

As of December 31, 2025 and 2024, other commitments and contingencies are summarized in the table below:

---

| | | |
|:---|:---|:---|
|  | 2025 | 2024 |
| Management Employment agreements with bonus\* and severance commitment contingencies | $350000 | $350000 |
| Other employee severance commitment contingencies |  | 89000 |
| Total | $350000 | $439000 |
| *\*Excludes Retention Bonus Payments*  | | |

---

***Employment agreements -*** The Company has an employment agreement with its Chief Executive Officer. The agreement provides for a bonus of $125,000 payable upon a change of control as defined in the agreement. In addition, the agreement provides for severance equivalent to 6 months of base salary and the vesting and related payment of the change of control bonus.

------

---

| |
|:---|
| **GYRODYNE, LLC**<br>**AND SUBSIDIARIES**<br>**Notes to Consolidated Financial Statements (Liquidation Basis)** |
| *Years Ended December 31, 2025 and 2024* |

---

The Company also has an employment agreement with its Chief Operating Officer ("COO") executed on May 8, 2014 which provides for severance on a termination without cause equal to 6 months of base salary. On January 25, 2018, Gyrodyne entered into an amendment to the employment agreement with the COO to define with greater specificity the COO's duties and responsibilities with respect to the Company's properties.

***Retention Bonus Plan-*** In May 2014, the Board of Directors approved a retention bonus plan (as amended (5 amendments), the "Plan") designed to recognize the nature and scope of the responsibilities of our directors, executives and employees related to the Company's strategic plan to enhance the property values, liquidate and dissolve, to reward and incent performance in connection therewith, to align the interests of directors, executives and employees with our shareholders and to retain such persons during the term of such plan. The Plan provides for bonuses to officers by the gross sales proceeds from the sale of each property and the date of sale.

The bonus pool is distributable in the following proportions to the named participants in the bonus plan for so long as they are directors or employees of the Company:

---

| | |
|:---|:---|
| **Employees** | **Amendment No. 5 RSP approved** |
| Chief Executive Officer | 44.211% |
| Chief Operations Officer | 39.789% |
| Officer Discretionary Amount (a) | 16.000% |
| Total | 100.000% |

---

(a) The officer discretionary amount will be allocated to the officers within the discretion of the Board.

Under the Plan, there were no payments made during the year ended December 31, 2025.

***Restricted Stock Award Plan*** – The Gyrodyne, LLC Restricted Stock Award Plan (the "Stock Plan") was approved by the Board on September 5, 2023 and by the shareholders of the Company on October 12, 2023 and became effective on October 12, 2023. Under the Stock Plan, the Company issued to the former director participants in the Retention Bonus Plan (the "Bonus Plan"), in exchange for the waiver and forfeiture of their Bonus Plan benefits, an aggregate of 91,628 Gyrodyne shares, subject to vesting, effective November 14, 2023.

The primary features of the Stock Plan are as follows:

● ***Purpose:*** The purpose of adoption of the Stock Plan was to incentivize the former director participants in the Bonus Plan to exchange their interests in the Bonus Plan for shares in the Company issuable under the Stock Plan, which would allow for compensation plan separation between directors and employees and better alignment of interests between director participants and shareholders.

● ***Eligibility:*** Directors of the Company who were participants in the Bonus Plan were eligible to receive grants under the Stock Plan. The eligible directors were Paul Lamb, Ronald Macklin, Nader Salour and Richard Smith. All such individuals agreed to exchange their Bonus Plan benefits for shares under the Stock Plan, subject to shareholder approval of the Stock Plan. Jan Loeb was not a participant in the Bonus Plan and was not eligible to participate in the Stock Plan.

● ***Maximum Shares:*** The total number of shares that were authorized for issuance under the Stock Plan at the effective time is 91,628 shares, or approximately 5.8% of the common shares outstanding at the effective time of the adoption of the Stock Plan after giving effect to the issuance of the Stock Plan shares (or 4.2% of the current total common shares outstanding after giving effect to the rights offering). All 91,628 Stock Plan shares were issued effective November 14, 2023 to Stock Plan participants. There are no remaining shares issuable in the Stock Plan.

------

---

| |
|:---|
| **GYRODYNE, LLC**<br>**AND SUBSIDIARIES**<br>**Notes to Consolidated Financial Statements (Liquidation Basis)** |
| *Years Ended December 31, 2025 and 2024* |

---

● ***Administration:*** Pursuant to the terms of the Stock Plan, the Stock Plan is administered and interpreted by a committee consisting of either (i) the Board, or (ii) the President and at least two other directors appointed by the Board. The committee has full power and authority to administer and interpret the Stock Plan, to make factual determinations and to adopt or amend such rules, regulations, agreements and instruments for implementing the Stock Plan and for the conduct of its business as it deems necessary or advisable, to waive requirements relating to formalities or other matters that do not modify the substance of rights of participants or constitute a material amendment of the Stock Plan, to correct any defect or supply any omission of the Stock Plan or any grant document and to reconcile any inconsistencies in the Stock Plan or any grant document.

● ***Restricted Stock:*** Incentives under the Stock Plan consisted of grants of restricted stock. No shares issued under the Stock Plan, or any interest therein, are transferrable by a participant, whether voluntarily or involuntarily, unless and until a liquidating distribution is made to the shareholders, except by will or by the laws of descent or distribution, and may not be subject to any voluntary or involuntary pledge, assignment, alienation, attachment, or similar encumbrance or transfer. All shares issued in connection with a grant are subject to the terms, conditions, and restrictions set forth in the Company's articles of organization, amended and restated limited liability company agreement, or other governing documents of the Company, as amended.

● ***Vesting:*** Vesting of shares issued under the Stock Plan occurs (i) in equal one-third tranches on each of the first three anniversaries of the grant date, and (ii) at such time as a liquidating distribution is made to the shareholders of the Company. Unvested Stock Plan shares will be forfeited by a participant if such participant is no longer serving on the Board at or prior to such time that liquidating distributions are paid to the shareholders other than as a result of death, disability or failure to be reelected.

● ***Amendments:*** The Board may amend, suspend or terminate the Stock Plan at any time, in its discretion, except that shareholder approval is required for any amendment that increases the number of shares available for grant, accelerates vesting or results in a material increase in benefits or a change in eligibility requirements.

The shares under the Stock Plan were distributed as follows in lieu of the director portion of the Bonus Plan of $2,702,285:

---

| | |
|:---|:---|
| **Board Member** | **Shares of Restricted Stock** |
| Paul Lamb | 30542 |
| Ronald Macklin | 20362 |
| Nader Salour | 20362 |
| Richard Smith | 20362 |
| Total | 91628 |

---

***Deferred Compensation Plan*** – On December 6, 2019, the Company's Board of Directors approved the Gyrodyne, LLC Nonqualified Deferred Compensation Plan for Employees and Directors (the "DCP") effective as of January 1, 2020. The DCP is a nonqualified deferred compensation plan maintained for officers and directors of the Company. Under the DCP, officers and directors may elect to defer a portion of their compensation to the DCP and receive interest on such deferred payments at a fixed rate of 5%. All DCP benefits will be paid in a single lump sum cash payment on December 15, 2031, unless a Plan of Liquidation is established for Gyrodyne before the distribution date in which case all benefits will be paid in a single lump sum cash payment after execution of an amendment to terminate the DCP. Each of the Directors elected (under the DCP) to defer 100% of their director fees for the years 2020 thru 2025 excluding Jan Loeb who was nominated to the Board on July 28, 2023 and elected to a three-year term at the annual shareholder meeting on October 12, 2023. Two of the four directors have elected not to defer any fees during 2026; the other two directors elected to defer approximately 71% of their respective 2026 director fees.

------

---

| |
|:---|
| **GYRODYNE, LLC**<br>**AND SUBSIDIARIES**<br>**Notes to Consolidated Financial Statements (Liquidation Basis)** |
| *Years Ended December 31, 2025 and 2024* |

---

**13.** **Rights Offering**

The Company completed a rights offering (the "Rights Offering") on March 7, 2024 pursuant to which we generated net proceeds of approximately $4,400,000. In connection to the Rights Offering the Company filed a registration statement on Form S-1 with the Securities and Exchange Commission (the "Commission") on December 29, 2023 to distribute to holders of Gyrodyne's common shares on the record date of January 29, 2024 one non-transferable subscription right for each five shares held. Each whole subscription right gave the shareholders the opportunity to purchase two of the Company's common shares for $8.00 per share, or 625,000 shares in the aggregate. If a shareholder exercised his or her basic subscription right in full, and other shareholders did not, such shareholder was entitled to an oversubscription privilege to purchase a portion of the unsubscribed shares at the subscription price, subject to proration and certain limitations. The maximum dollar amount the Company sought to raise in the Rights Offering was $5 million in aggregate gross proceeds.

The Commission declared the registration statement effective on February 2, 2024 and the Company commenced the Rights Offering on February 6, 2024.

The Company announced on March 11, 2024 that it received subscriptions for 1,031,640 shares, greatly exceeding the maximum shares offered of 625,000. Shareholders were allocated 100% of their basic subscriptions. Based on the maximum 625,000 shares that were issuable in the rights offering, 271,836 shares were allocated to shareholders who properly exercised their oversubscription privilege, pro rata in proportion to the aggregate number of shares subscribed for under the over-subscription privilege, or approximately 40% of each over-subscriber's requested shares. The rights offering resulted in 625,000 common shares issued on March 12, 2024 and net proceeds received (after expenses) of approximately $4,400,000 (gross proceeds of $5,000,000 less direct expenses of the rights offering of approximately $600,000).

The Company is using the net proceeds received from the Rights Offering to complete the pursuit of entitlements on the Company's Flowerfield and Cortlandt Manor properties, for litigation fees and expenses in the Article 78 proceeding, for property purchase agreement negotiation and enforcement, for necessary capital improvements in the Company's real estate portfolio, and for general working capital.

**14.** **Fair Value of Financial Instruments**

***Assets and Liabilities Measured at Fair-Value*** – The Company believes the concepts for determining net realizable value are consistent with the guidance for measuring fair value. As a result, the Company follows authoritative guidance on fair value measurements, which defines fair-value, establishes a framework for measuring fair-value, and expands disclosures about fair-value measurements. The guidance applies to reported balances that are required or permitted to be measured at fair-value under existing accounting pronouncements.

The Company follows authoritative guidance on the fair value option for financial assets, which permits companies to choose to measure certain financial instruments and other items at fair-value in order to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently. However, the Company adopted the liquidation basis of accounting, and therefore reports all assets and liabilities at net realizable value.

The guidance emphasizes that fair-value is a market-based measurement, not an entity-specific measurement. Therefore, a fair-value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair-value measurements, the guidance establishes a fair-value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy, as defined under FASB ASC Topic No. 820, Fair Value Measurements) and the reporting entity's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). In instances where the determination of the fair-value measurement is based on inputs from different levels of the fair-value hierarchy, the level in the fair-value hierarchy within which the entire fair-value measurement falls is based on the lowest level input that is significant to the fair-value measurement in its entirety. Our assessment of the significance of a particular input to the fair-value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

------

---

| |
|:---|
| **GYRODYNE, LLC**<br>**AND SUBSIDIARIES**<br>**Notes to Consolidated Financial Statements (Liquidation Basis)** |
| *Years Ended December 31, 2025 and 2024* |

---

***Fair Value Measurements -*** The Company adopted the liquidation basis of accounting effective September 1, 2015; accordingly, the Company reports all real estate at their net realizable value.

The Company estimates the net realizable value of its real estate assets by using income and market valuation techniques. The Company may estimate net realizable values using market information such as broker opinions of value, appraisals, and recent sales data for similar assets or discounted cash flow models, which primarily rely on Level 3 inputs. The Company also considers in its valuation estimates the receipt of any expressions of interest/letters from perspective buyers adjusted to reflect the Company's best estimate of any contingent financial terms such as approved density and related site plans. The cash flow models include estimated cash inflows and outflows over a specified holding period. These cash flows may include contractual rental revenues, projected future rental revenues and expenses and forecasted capital improvements and lease commissions based upon market conditions determined through discussion with local real estate professionals, and relevant Company experience with its current and previously owned properties. Capitalization rates and discount rates utilized in these models are estimated by management based upon rates that management believes to be within a reasonable range of current market rates for the respective properties based upon an analysis of factors such as property and tenant quality, geographical location, local supply and demand observations and no sewage treatment plant. To the extent, the Company underestimates or overestimates forecasted cash outflows (capital improvements, lease commissions, operating costs and credit costs) or overestimates or understates forecasted cash inflows (rental revenue rates) or other unfavorable or favorable variances of the aforementioned assumptions, the estimated net realizable value of its real estate assets could be overstated or understated.

**15.** **Governance** 

***Director Nomination and Proposal from Shareholder*** – ****

The Company received a notice dated June 4, 2025 from Star Equity Fund, LP ("Star Equity"), which claimed to own approximately 7.1% of our outstanding shares at the time of submission, purporting to give notice of its intent to nominate a slate of two candidates for election as directors at the 2025 Annual Meeting of Shareholders.

On October 16, 2025, the Company entered into a letter agreement (the "Star Agreement") with Star Equity Fund, LP (collectively with its affiliates, "Star Equity").

Pursuant to the Star Agreement, Star Equity agreed to irrevocably withdraw its June 4, 2025 notice of intent to nominate two candidates for election to the Company's Board of Directors (the "Board") at the Annual Meeting. The Star Agreement obligates Star Equity to vote all Gyrodyne shares it owns in accordance with the Board's recommendations including on the election of directors prior to the Termination Date (as defined below), except that Star Equity will be permitted to vote (i) in its discretion on any proposal regarding certain extraordinary transactions, and (ii) in accordance with the recommendation of Institutional Shareholder Services to the extent the recommendation differs from the Board's recommendation on any matter presented to the shareholders at a special meeting of shareholders following the Annual Meeting. Star Equity's obligations will continue until December 31, 2026, or December 31, 2027 if the Board re-nominates both Nader G.M. Salour and Jan H. Loeb for election at the Company's 2026 annual meeting and both Messrs. Salour and Loeb agree to such re-nomination (the "Termination Date").

The Star Agreement also prevents Star Equity until the Termination Date from, among other things, (i) nominating any person for election or submitting any shareholder proposal for consideration at any meeting of shareholders of the Company at which directors are to be elected, (ii) soliciting proxies or (iii) taking actions to change or influence the Board, management or the direction of certain Company matters. Until the Termination Date, the Company and Star Equity have also agreed not to disparage each other.

Under the Star Agreement, the Company agreed to nominate only one Board member at the 2025 Annual Meeting, Richard Smith, for election for an additional three-year term and to reduce the size of the board from, five to four directors. If any of Jan H. Loeb, Nader G.M. Salour, Richard B. Smith or Ronald J. Macklin (each, a "Continuing Director") resigns or ceases to be a director due to death or disability, then the Board and Star Equity will engage in good faith discussions to identify a mutually acceptable independent (as defined under Nasdaq listing rules) replacement director (the "Replacement Director"), and if they cannot agree the size of the Board will be reduced to three directors. In such event, if a remaining Continuing Director subsequently resigns or ceases to be a director due to death or disability, then the Board may not make an additional appointment until the Board and Star Equity identify a mutually acceptable Replacement Director.

The Company also agreed not to increase Board fees and to limit the aggregate fee paid to the Chairman of the Board to $65,000.

------

---

| |
|:---|
| **GYRODYNE, LLC**<br>**AND SUBSIDIARIES**<br>**Notes to Consolidated Financial Statements (Liquidation Basis)** |
| *Years Ended December 31, 2025 and 2024* |

---

**16.** **Contingencies**

***Putative Class Action Lawsuit -*** On August 14, 2015, the Company entered a Stipulation of Settlement (the "Settlement") providing for the settlement of a putative class action lawsuit against the Company and certain related parties. Under the Settlement, Gyrodyne agreed that any sales of its properties would be effected only in arm's-length transactions at prices at or above their appraised values as of 2014.

As of December 31, 2025 and 2024, the value of the remaining unsold properties exceeded the respective 2014 appraised value.

***Article 78 Proceeding*** – ****On April 26, 2022, the Incorporated Village of Head of the Harbor and certain other parties, commenced a special proceeding (the "Article 78 Proceeding"), against the Town of Smithtown and certain other parties, including the Company, seeking to annul the Town of Smithtown Planning Board's (the "Planning Board") determinations relating to the Flowerfield Subdivision Application. The Article 78 Proceeding was commenced by the filing of a petition (the "Petition") in the Supreme Court of the State of New York, Suffolk County, pursuant to Article 78 of the N.Y. Civil Practice Law and Rules. Specifically, the Petition seeks to annul the Planning Board's (i) approval of a findings statement, pursuant to the SEQRA, dated September 16, 2021, and adopted by the Planning Board on March 30, 2022, concerning the Flowerfield Subdivision Application, and (ii) preliminary approval on March 30, 2022 of the Flowerfield Subdivision Application. The arguments made in the Petition are substantially similar to those made by opponents of the Flowerfield Subdivision Application during the SEQRA and subdivision process. The Company and the Town of Smithtown are vigorously defending the Planning Board's determinations against the Petition. In June 2022, Gyrodyne and the Town of Smithtown filed motions to dismiss the Petition. During the third quarter of 2023, the Article 78 Proceeding was re-assigned to a different judge for the second time. On February 6, 2024, the Supreme Court of the State of New York, Suffolk County issued an order (the "Order"), denying the Motions in part and granting them in part. Specifically, the Order (i) denied the Motions as to three individual Petitioners and the St. James-Head of the Harbor Neighborhood Preservation Coalition, Inc., (ii) granted the Motions as to the remaining twenty (20) individual Petitioners and the Village of Head of the Harbor, (iii) denied the branch of Gyrodyne's motion alleging that Petitioners failed to state a claim. On October 11, 2024, the Supreme Court of the State of New York issued a ruling in favor of the Company dismissing the Article 78 petition in its entirety. On October 28, 2024, the Company received a notice of appeal filed by the petitioners in this proceeding seeking to appeal the court's dismissal of the Article 78 petition, citing as grounds for appeal "whether the court erred in denying the petition and dismissed the Article 78 proceeding, and any and all other issues which may arise upon further review of the record on appeal".

On November 12, 2024, the petitioners filed a notice of motion to renew and reargue, seeking to have the court direct the respondents to undertake a supplemental environmental impact statement to address retaining of storm water at the property being developed in light of a recent storm, and to annul the resolution approving the preliminary site plan.

On March 17, 2025, the Supreme Court of the State of New York, Suffolk County issued an order denying the appellants motion to stay enforcement of the order, pending hearing and determination of appeal. On March 21, 2025, the Supreme Court of the State of New York, Suffolk County issued an order denying the Petitioners motion to renew and reargue. On April 16, 2025 the Petitioners filed a notice of appeal seeking to appeal the March 17, 2025 order denying the appellants motion to stay enforcement of the order dismissing the Petition pending the appeal.

On April 28, 2025 the Petitioners perfected their appeal on the original Petition. The Petitioners' memorandum of law largely repeats their earlier position and arguments, which the Supreme Court previously found to be an insufficient basis for overturning the Planning Board's determinations. Gyrodyne filed its response to the Appeal on July 25, 2025 and the Town submitted its reply to the Appeal on July 28, 2025.

Pleadings filed in the Article 78 Proceeding may be accessed through a link (and related instructions) to the New York State Unified Court System which appears on the Company's website at https://www.gyrodyne.com.

------

---

| |
|:---|
| **GYRODYNE, LLC**<br>**AND SUBSIDIARIES**<br>**Notes to Consolidated Financial Statements (Liquidation Basis)** |
| *Years Ended December 31, 2025 and 2024* |

---

***General -*** 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 any loss resulting from such proceedings individually or in the aggregate will not be material to the Company's financial statements.

**17.** **Related Party Transactions**

The Company has entered into various leasing arrangements with a not-for-profit organization of which the Company's former Chairman, Paul Lamb, serves as Chairman and a director but receives no compensation or any other financial benefit.

In March 2022, a Consolidated Lease Agreement was signed between the Company and the not-for-profit organization that extended the lease to December 2027. It also changed some terms of the original leases including rent on the master lease suite, 3% escalators and agreements on work to be done by the Company and the tenant. The signed Consolidated Lease Agreement reflects a below market lease of $8,829 annually and $44,144 during the extended period. A summary of the additional rent under the new arrangement is as follows:

---

| | | | |
|:---|:---|:---|:---|
| **Term** | **Square Feet** | **Annual Rent** | **Total Commitment (excluding renewal options)** |
| April 2022-Dec 2027 | 6006 | $51051 | $317455 |

---

During the twelve months ended December 31, 2025 and 2024, the Company received rental revenue of $55,784 and $54,160, respectively.

The independent members of the Board of the Company approved all of the leasing transaction described above.

The former Chairman was also a partner of the firm LambZankel, LLP that provided pro bono legal representation to the aforementioned not-for-profit corporation on the lease.

Following the annual meeting on November 5, 2025, Paul Lamb is longer a director and thus is longer deemed a "related person" (see Note 15 – Governance).

## Exhibit 21.1

**Exhibit 21.1**

**List of Subsidiaries**

1. Flowerfield Properties, Inc.

2. GSD Flowerfield, LLC

3. GSD Port Jefferson, LLC

4. GSD Cortlandt, LLC

5. Buttonwood Acquisition, LLC

## Exhibit 31.1

**Exhibit 31.1**

**Rule 13a-14(a)/15d-14(a) Certification** 

I, Gary Fitlin, certify that:

1. I have reviewed this annual report on Form 10-K of Gyrodyne, LLC;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 27, 2026

<u>/s/ GARY FITLIN</u><br> By Gary Fitlin,<br> President and Chief Executive Officer<br> Chief Financial Officer and Treasurer<br>

## Exhibit 32.1

**Exhibit 32.1**

**CEO CERTIFICATION PURSUANT TO** 

**18 U.S.C. SECTION 1350,** 

**AS ADOPTED PURSUANT TO** 

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the annual report of Gyrodyne, LLC (the "Company") on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission (the "Report"), I, Gary Fitlin, Chief Executive Officer and Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the consolidated financial condition of the Company as of the dates presented and consolidated results of operations of the Company for the periods presented.

Date: March 27, 2026

<u>/s/ GARY FITLIN</u><br> By Gary Fitlin,<br> President and Chief Executive Officer<br> Chief Financial Officer and Treasurer<br>