ST. JAMES, N.Y., July 13, 2011 /PRNewswire/ -- Gyrodyne Company of America, Inc. (NASDAQ: GYRO) announced today that it filed a registration statement on Form S-3 with the Securities and Exchange Commission (the "SEC") for a rights offering in which shareholders will receive non-transferable rights to purchase additional shares of Gyrodyne common stock, par value $1.00 per share. The rights will be issued to all shareholders as of a record date, which will be determined promptly following the registration statement being declared effective by the SEC. The subscription price has also yet to be determined. Gyrodyne will provide notice of the record date and subscription price at such time as they are determined. Assuming the rights offering is fully subscribed, Gyrodyne currently expects the net proceeds of the offering to be approximately $9 million.
The proposed rights offering will also include an over-subscription privilege, which will entitle a shareholder who exercises all of its basic subscription privilege in full the right to purchase additional shares of common stock that remain unsubscribed at the expiration of the rights offering, subject to the availability and pro rata allocation of shares among persons exercising this over-subscription right. In the event the rights offering is over-subscribed, Gyrodyne may, in its sole discretion, elect to offer a number of additional shares to fulfill over-subscription requests such that the maximum net proceeds in the offering would be approximately $10 million.
The number of shares that each shareholder will be able to purchase will depend on the market price of Gyrodyne's stock when the subscription price is determined. The offering is expected to commence shortly after the registration statement for the shares and rights is declared effective by the SEC.
The net proceeds of the offering will be used to pursue Gyrodyne's rights in its condemnation litigation, to fund the cost of pursuing development rights for its Flowerfield property, to make necessary capital improvements in its real estate portfolio and for general working capital.