The accompanying notes are an integral part of these consolidated financial statements.
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"(“GAAP”).
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions, that it deems reasonable, that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from such estimates and assumptions.
The consolidated financial statements are comprised of the accounts of the Company and its wholly owned subsidiaries. All material intercompany transactions and balances have been eliminated.
Investments and ownership interests are accounted for under the equity method of accounting if the Company has the ability to exercise significant influence, but not control (under GAAP), over the investment. Investments accounted for under the equity method are carried at cost, plus or minus the Company'sCompany’s equity in the increases and decreases in the net assets after the date of acquisition and certain other adjustments. The Company'sCompany’s share of income or loss for equity method investments is recorded in the consolidated statements of operations as equity income (loss). Dividends received, if any, would reduce the carrying amount of the Company'sCompany’s investment.
Highly liquid investments, consisting principally of funds held in short-term money market accounts, with original maturities of less than three months, are classified as cash equivalents. The majority of the Company'sCompany’s cash and cash equivalents balances are maintained with a limited number of major financial institutions. Cash and cash equivalents balances at institutions may, at times, be above the Federal Deposit Insurance Corporation insured limit per account.
The JV Agreement and related operating agreements generally provide that all distributable cash shall be distributed as follows: (i) first, 100% to the members in proportion to their percentage interests until Investment LLC has received distributions yielding a 20% internal rate of return as calculated; (ii) second, 100% to the Sponsor as a return of (but not a return on) any additional capital contributions made by the Sponsor on account of manager overruns; and (iii) thereafter, (a) 50% to the members in proportion to their respective percentage interests at the time of such distribution, and (b) 50% to the Sponsor.
AMBASE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Additionally, the JV Agreement provides that (i) Mr. RichardR. A. Bianco, (the Company's current Chairman, President and Chief Executive Officer) ("Mr. R. A. Bianco"), his immediate family, and/or any limited liability company wholly-owned thereby, and/or a trust in which Mr. R. A. Bianco and/or his immediate family is the beneficiary, shall at all times own, in the aggregate, not less than 20% of the outstanding shares of AmBase; and (ii) Mr. R. A. Bianco shall remain the Chairman of the Board of Directors of AmBase for the duration of the JV Agreement.
In March 2014, the Company entered into an amended and restated operating agreement for Investment LLC (the "Amended“Amended and Restated Investment Operating Agreement"Agreement”) to grant a 10% subordinated participation interest in Investment LLC to Mr. R. A. Bianco as contingent future incentive for Mr. R. A. Bianco'sBianco’s past, current and anticipated ongoing role to develop and commercialize the Company'sCompany’s equity investment in the 111 West 57th Property. Pursuant to the terms of the Amended and Restated Investment Operating Agreement, Mr. R.A. Bianco has no voting rights with respect to his interest in Investment LLC, and his entitlement to receive 10% of the distributions from Investment LLC is subject to the Company first receiving distributions equal to 150% of the Company'sCompany’s initial aggregate investment in Investment LLC and the Joint Venture, plus any additional investments by the Company,, and only with respect to any distributions thereafter. At the current time the Company has not expensed nor accrued any amounts relating to this subordinated participation interest, as no amount or range of amounts can be reasonably estimated or assured.
During 2014, in connection with the funding of additional capital calls under the JV Agreement for required borrowing and development costs for the 111 West 57th Property, the Company'sCompany’s management and its Board of Directors concluded that, given the continuing development risks of the 111 West 57th Property and the Company'sCompany’s financial position, the Company should not at that time increase its already significant concentration and risk exposure to the 111 West 57th Property. Nonetheless, the Company sought to limit dilution of its interest in the Joint Venture resulting from any failure to fund the capital call requirements, but at the same time wished to avoid the time, expense and financial return requirements (with attendant dilution and possible loss of voting rights) that obtaining a replacement third-party investor would require. The Company therefore entered into a second amended and restated operating agreement for Investment LLC ("(“Second Amended and Restated Investment Operating Agreement"Agreement”) pursuant to which Capital LLC was admitted as a member of Investment LLC. In exchange for Capital LLC contributing toward Investment LLC capital calls in respect of the 111 West 57th Property,available cash of Investment LLC will be distributed first to Capital LLC until it has received a 20% internal rate of return (calculated as provided for in the JV Agreement as noted above), second to the Company until it has received 150% of its capital, and;and, thereafter, available cash is split 10/90, with 10% going to Mr. R.A.R. A. Bianco as the subordinated participation interest noted above and 90% going to Capital LLC and the Company pari-passu, with Capital LLC receiving one-half of its pro-rata share based on capital contributed and the Company receiving the balance. No other material changes were made to the Amended and Restated Investment Operating Agreement, and neither Mr. R. A. Bianco nor Capital LLC has any voting rights with respect to their interest and investment in Investment LLC.
In accordance with the JV Agreement, Shortfall Capital Contributions may be treated either as a member loan or as a dilutive capital contribution by the funding party valued at one and one-half times the amount actually contributed. The Sponsor deemed the Shortfall Capital Contributions as dilutive capital contributions to the Company. The Company disagrees with the Sponsor’s investment percentage calculations. The Sponsor has taken the position that the Capital Contribution Requests, if taken together, would have caused the Company’s combined ownership percentage to be diluted to approximately 48%. The parties have a dispute with regard to the calculation of the revised investment percentages resulting from the Capital Contribution Requests, along with the treatment and allocation of these Shortfall Capital Contribution amounts.
On June 30, 2015, 111 West 57th Partners obtained financing for the 111 West 57th Property. The financing was obtained in two parts: (i) a first mortgage construction loan with AIG Asset Management (US), LLC (along with its affiliates “AIG”); and (ii) a mezzanine loan with Apollo Commercial Real Estate Finance, Inc. (along with its affiliates “Apollo”), as detailed herein. Both loans have a four-year term with a one-year extension option subject to satisfying certain conditions. The loan agreements (the “Loan Agreements”) also include customary events of default and other customary terms and conditions. Simultaneously with the closing of the AIG and the Apollo financing, 111 West 57th Partners repaid all outstanding liabilities and obligations to Annaly CRE, LLC under the initial mortgage and acquisition loan agreement, dated June 28, 2013, between the joint venture entities and Annaly CRE, LLC. The remaining loan proceeds were to be drawn down and used as necessary for construction and related costs, loan interest escrow and other related project expenses for development of the 111 West 57th Property.
AMBASE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Information relating to the June 30, 2015 financing for 111 West 57th Partners is as follows:
| (in thousands) | | | |
Financing obtained by 111 West 57th Partners - AIG | | $ | 400,000 | |
Financing obtained by 111 West 57th Partners - Apollo | | $ | 325,000 | |
| Annaly CRE LLC initial mortgage and acquisition loan repaid | | $ | 230,000 | |
In April 2016, AmBase initiated a litigation in the New York State Supreme Court for New York County (the “NY Court”), Index No. 652301/2016, (“AmBase v. 111 West 57th Sponsor LLC, et al.”) (the “111 West 57th Action”). The defendants in that litigation are 111 West 57th Sponsor LLC, 111 West 57th JDS LLC, PMG West 57th Street LLC, 111 West 57th Control LLC, 111 West 57th Developer LLC, 111 West 57th KM Equity LLC, 111 West 57th KM Group LLC, Kevin Maloney, Matthew Phillips, Michael Stern, Ned White, 111 Construction Manager LLC, Property Markets Group, Inc., JDS Development LLC, JDS Construction Group LLC (collectively, “Defendants”) and nominal defendant 111 West 57th Partners LLC. In June 2018, Defendants removed the complaint to the U.S. District Court for the Southern District of New York (the “Federal Court”), where it is docketed as case number 18-cv-5482-AT. For additional information with regard to the Company’s legal proceedings relating to the 111 West 57th Property, see Note 9 herein.
In December 2016, the Sponsor proposed for approval a “proposed budget” (the “Proposed Budget”), which the Sponsor claims reflected an increase in other costs resulting in the need for additional funding in order to complete the project. The Company disputes, among other items, the calculation of the percentage increase of hard costs shown in the Proposed Budget. The Company believes the aggregate projected hard costs in the Proposed Budget exceed a contractually stipulated limit as a percentage of the hard costs set forth in the prior approved budget, thus allowing Investment LLC the option to exercise its Equity Put Right. Consequently, subsequent to the Sponsor’s presentation of the Proposed Budget, Investment LLC notified the Sponsor that it was exercising its Equity Put Right pursuant to the JV Agreement. The Sponsor refused to honor the exercise of Investment LLC’s Equity Put Right. The Sponsor claims, among other things, that the conditions precedent were not met because they claim that the increase in aggregate hard costs in the Proposed Budget does not exceed the contractually stipulated limit that would allow the exercise of the Equity Put Right.
The Company further contends that a portion of the Proposed Budget increases are manager overruns (as defined in the JV Agreement) and thus should be paid for by the Sponsor. The Sponsor denies that the Proposed Budget increases were manager overruns. The Company continues to challenge the nature and substance of the Proposed Budget increases and how they should be treated pursuant to the JV Agreement.
The Sponsor claimed that additional borrowings of $60 million to $100 million were needed to complete the project. Shortly thereafter, the Sponsor informed the Company that Apollo had indicated that due to budget increases, it believed the current loan was “out of balance” (meaning, according to Apollo, the projected budget exceeds the original budget approved in connection with the loan); and thus 111 West 57th Partners LLC, or its subsidiaries would need additional funding in order to bring the loan back into balance. The Company considered approving the additional financing, but informed the Sponsor that it had concerns about the Proposed Budget and the implications of the Proposed Budget, as well as other questions which needed to be addressed first.
In March 2017, the Company and Mr. RichardR. A. Bianco the Company's Chairman, President and Chief Executive Officer ("R. A. Bianco") entered into an agreement for Mr. R. A. Bianco to provide to the Company a financial commitment in the form of a line of credit up to ten million dollars ($10,000,000) or additional amount(s) as may be necessary and agreed to enable AmBase to contribute capital to Investment LLC and/or other affiliated subsidiaries of the Company to meet capital calls for the of 111 West 57th Property if and when the case may be necessary on terms agreeable to/by the Company (as determined by the independent members of the Board of Directors) and Mr. R. A. Bianco at such time. The agreement providesprovided that additional borrowings from Mr. R. A. Bianco pursuant to this line of credit shallwould be secured by the Company'sCompany’s commercial office building in Greenwich, Connecticut. As a result of the sale of the Company’s commercial office building in Greenwich Connecticut. In January 2018, any borrowings from Mr. R. A. Bianco under this line of credit will be unsecured.
Capital contributed by Capital LLCAround this time, Apollo provided loan forbearances to the borrowers and guarantors in December 2014 and April 2015, whichorder to allow the Sponsor time (while the building continued to be built) to raise the additional financing that Sponsor claimed would be needed in order to complete the 111 West 57th project. This forbearance period ended on June 29, 2017. Around this date, the Company was fully repaid as partadvised that Apollo sold a portion of the July 2015 Distribution, wasmezzanine loan—broken off as follows:
| (in thousands) | | | |
| Capital contributed by Capital LLC | | $ | 9,868 | |
a junior mezzanine loan—to an affiliate of Spruce Capital Partners LLC, (“Spruce”) (the “Junior Mezzanine Loan”).
AMBASE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
On June 30, 2017, Spruce declared an event of default under the Junior Mezzanine Loan and demanded immediate payment of the full outstanding balance of the Junior Mezzanine Loan. Spruce then gave notice to the junior mezzanine borrower that it proposed to accept the pledged collateral (including the joint venture members’ collective interest in the property) in full satisfaction of the joint venture’s indebtedness under the Junior Mezzanine Loan (i.e., a “Strict Foreclosure”).
On July 2015 Distribution,25, 2017, the Company filed a complaint against Spruce and the Sponsor and requested injunctive relief halting the Strict Foreclosure from the New York State Supreme Court for New York County, (the “NY Court”) Index No. 655031/2017, (the “111 West 57th Spruce Action”). The defendants in the 111 West 57th Spruce action were 111 W57 Mezz Investor, LLC, Spruce Capital Partners LLC, was repaid111 West 57th Sponsor LLC, Michael Z. Stern, and Kevin P. Maloney (collectively, “Defendants”) and nominal defendants 111 West 57th Partners LLC and 111 West 57th Mezz 1 LLC. The Company has since voluntarily discontinued its claims against Sponsor, Stern, and Maloney, without prejudice to reinstating them in the 111 West 57th Spruce Action or any other action. For additional information with regard to the Company’s legal proceedings relating to the 111 West 57th Property, see Note 9 herein.
On August 30, 2017, Spruce issued a Notice of Retention of Pledged Collateral in Full Satisfaction of Indebtedness. By purporting to accept the pledged collateral, pursuant to a Strict Foreclosure process, Spruce claims to have completed the retention of the collateral pledged by the junior mezzanine borrower, and therefore, the Company’s interest in the 111 West 57th Street Property.
In June 2018, the Company initiated another litigation in the NY Court, Index No. 655031/2017, (the “Apollo Action”). The defendants in the Apollo Action are ACREFI Mortgage Lending, LLC, Apollo Credit Opportunity Fund III AIV I LP, AGRE Debt 1 – 111 W 57, LLC, and Apollo Commercial Real Estate Finance, Inc. (collectively, the “Apollo Defendants”). In the Apollo Action, the Company alleges that the Apollo Defendants aided and abetted the Sponsor, Stern, and Maloney in breaching their fiduciary duties to the Company in connection with the 111 West 57th Property and tortuously interfered with the JV Agreement. See Note 9 herein for additional information regarding the Apollo Action.
As further discussed herein, despite ongoing litigation challenging the legitimacy of the actions taken by the Sponsor and Spruce in connection with the Company’s investment in the 111 West 57th Property, in accordance with GAAP, the Company recorded an impairment for the full amount of its capital investment. Additional amountsequity investment in the 111 West 57th Property, in 2017. Prior to the Strict Foreclosure, the carrying value of the Company’s equity investment in the 111 West 57th Property represented a substantial portion of the Company’s assets and net equity value. The Company is and will continue to pursue the recovery of its asset value from various sources of recovery; however, there can be no assurance that the Company will prevail with respect to any of its claims.
With respect to its disputes and litigation relating to its interest in the 111 West 57th Property, the Company is continuing to pursue various legal courses of action, as well as considering other possible economic strategies, including the possible sale of the Company’s interest in and/or rights with respect to the 111 West 57th Property. The Company is continuing to pursue other options to realize the Company’s investment value and/or protect its legal rights.
The Company can give no assurances regarding the outcome of the matters described herein, including as to the effect of Spruce’s actions described herein, whether the Sponsor will perform their contractual commitments to the Company under the JV Agreement, as to what further action, if any, the lenders may still be payabletake with respect to Capital LLC based onthe project, as to the ultimate resolution of the ongoing litigation proceedings relating to the Company’s investment returns received oninterest in the 111 West 57th Property, as further described herein.
Pursuant to various capital contribution requests in December 2014, February 2015 and April 2015, the Company was requested to contribute funds to the Joint Venture (the "Capital Contribution Requests"). The Company choseultimate effect of the Sponsor’s, the Company’s or the lenders’ actions on the project, as to contribute only athe completion or ultimate success of the project, or as to the value or ultimate realization of any portion of the amounts requested pursuant toCompany’s equity investment in the Capital Contribution Requests. The remaining amounts requested pursuant to the Capital Contribution Requests (not funded by the Company) were contributed by either the Sponsor, which deemed its capital contributions on behalf of the Company to be Shortfall Capital Contributions ("Shortfall Capital Contributions") or by the Company from Capital LLC, pursuant to the terms of the Second Amended and Restated Investment Operating Agreement as noted herein.
The Company made111 West 57th Street Property. For additional capital contributions to the Joint Venture as indicated below:
(in thousands) | | Year Ended December 31 , 2016 | |
Capital contributions | | $ | - | |
In accordance with the JV Agreement, Shortfall Capital Contributions may be treated either as a member loan or as a dilutive capital contribution by the funding party valued at one and one-half times the amount actually contributed. The Sponsor deemed the Shortfall Capital Contributions as dilutive capital contributions to the Company. The Company believes in accordance with the terms of the agreements, a portion of the Shortfall Capital Contribution amounts should be treated as a member loan, therefore, resulting in no dilution to the Company. The Sponsor contends that the Capital Contribution Requests, if taken together, would cause the Company to be diluted to approximately 48%. The parties have a disputeinformation with regard to the calculation ofCompany’s legal proceedings relating to the revised investment percentages resulting from the Capital Contribution Requests, along with the treatment and allocation of these Shortfall Capital Contribution amounts.
In April 2016, the Company filed an action in New York State Supreme Court against the Sponsors, et al., pursuant to which the Company is seeking compensatory damages, as well as punitive damages and equitable relief including a declaration of the parties' rights, an accounting, and a constructive trust over distributions. For additional information, see Note 10 – Legal Proceedings.
The Company has recorded the investment in 111 West 57th Partners utilizing the equity method of accounting, as pursuantProperty, see Note 9 herein.
For information relating to the various agreementsLitigation Funding Agreement entered into between the Company has significant influence, but does not have control, as defined under GAAP. Accordingly,and Mr. Richard A. Bianco, the resultsCompany’s President and Chief Executive Officer, see Note 10.
While the Company’s management is evaluating future courses of operationsaction to protect and/or recover the value of the Company’s equity investment in the 111 West 57th PartnersProperty, the adverse developments make it uncertain as to whether any such courses of action will be successful. Any such efforts are includedlikely to require sustained effort over a period of time and require substantial additional financial resources. Inability to recover all or most of such value would in equity income (loss) in the Company's consolidated statements of operations. As of December 31, 2016, the Company's carrying amount of its investment in 111 West 57th Partners, as noted in the Company's consolidated balance sheet, is greater than the Company's equity in the underlying net assets of 111 West 57th Partners by $867,000, categorized as goodwill, due toall likelihood have a difference resulting from the reduction in equity for syndication fees paid relating to 111 West 57th Partners. The Company reviews its investments and ownership interests recorded under the equity method for impairment on a regular basis and if events or changes in circumstances indicate that a loss in the value of its investment may be other than temporary. Basedmaterial adverse effect on the Company's analysis, the Company believes, there was no impairment on the Company's equity method investment for the periods ended December 31, 2016 or December 31, 2015.Company’s financial condition and future prospects.
The following tables present summarized financial information for the Company's equity method investment in 111 West 57th Partners. The amounts shown represent 100%27
AMBASE CORPORATION AND SUBSIDIARIES
(in thousands)
| Assets: | | December 31, 2016 | | | December 31, 2015 | |
| Real estate held for development, net | | $ | 563,133 | | | $ | 440,370 | |
| Escrow deposits | | | 9,000 | | | | 9,400 | |
| Other assets | | | 6,908 | | | | 26,827 | |
| Total assets | | $ | 579,041 | | | $ | 476,597 | |
| Liabilities: | | | | | | | | |
| Loans payable | | $ | 441,749 | | | $ | 340,693 | |
| Other liabilities | | | 16,788 | | | | 14,447 | |
| Total liabilities | | | 458,537 | | | | 355,140 | |
| Equity: | | | | | | | | |
| Total members' equity | | | 120,504 | | | | 121,457 | |
| Total liabilities and members' equity | | $ | 579,041 | | | $ | 476,597 | |
| (in thousands) | | Year Ended December 31 , 2016 | | | Year Ended December 31 , 2015 | |
| Rental income | | $ | 0 | | | $ | 0 | |
| Expenses | | | 953 | | | | 3,158 | |
| Net income (loss) | | $ | (953 | ) | | $ | (3,158 | ) |
Notes to Consolidated Financial Statements
Note 5 - Savings Plans
The Company sponsors the AmBase 401(k) Savings Plan (the "Savings Plan"“Savings Plan”), which is a "Section“Section 401(k) Plan"Plan” within the meaning of the Internal Revenue Code of 1986, as amended (the "Code"“Code”). The Savings Plan permits eligible employees to make contributions of a percentage of their compensation, which are matched by the Company at a percentage of the employees'employees’ elected deferral. Employee contributions to the Savings Plan are invested at the employee'semployee’s discretion, in various investment funds. The Company'sCompany’s matching contributions are invested in the same manner as the compensation reduction contributions. All contributions are subject to maximum limitations contained in the Code.
The Company'sCompany’s matching contributions to the Savings Plan, charged to expense, were as follows:
| ($ in thousands) | | Year Ended December 31, 2016 | | | Year Ended December 31, 2015 | | | Year Ended December 31, 2018 | | | Year Ended December 31, 2017 | |
| Company matching contributions | | $ | 25 | | | $ | 30 | | | $ | 25 | | | $ | 25 | |
| Employer match % | | | 33 | % | | | 33 | % | | | 33 | % | | | 33 | % |
Note 6 - Stockholders'Stockholders’ Equity
Authorized common stock consists of the following:
| (shares in thousands) | | December 31, 2016 | | | December 31, 2015 | | | December 31, 2018 | | | December 31, 2017 | |
| Par value | | $ | 0.01 | | | $ | 0.01 | | | $ | 0.01 | | | $ | 0.01 | |
| Authorized shares | | | 85,000 | | | | 200,000 | | | | 85,000 | | | | 85,000 | |
| Issued shares | | | 46,410 | | | | 46,410 | | | | 46,410 | | | | 46,410 | |
| Outstanding shares | | | 40,738 | | | | 40,738 | | | | 40,738 | | | | 40,738 | |
Authorized cumulative preferred stock consists of the following:
| (shares in thousands) | | December 31, 2016 | | | December 31, 2015 | |
| Par value | | $ | 0.01 | | | $ | 0.01 | |
| Authorized shares | | | 20,000 | | | | 50,000 | |
| Issued shares | | | - | | | | - | |
| Outstanding shares | | | - | | | | - | |
At the Company's June 2, 2016 Annual Meeting of Stockholders, the Company's stockholders approved an amendment to the Company's Restated Certificate of Incorporation to reduce the number of authorized shares of the Company's common stock and cumulative preferred stock as noted above.
(shares in thousands) | | December 31, 2018 | | | December 31, 2017 | |
| Par value | | $ | 0.01 | | | $ | 0.01 | |
| Authorized shares | | | 20,000 | | | | 20,000 | |
| Issued shares | | | - | | | | - | |
| Outstanding shares | | | - | | | | - | |
Changes in the outstanding shares of Common Stock of the Company are as follows:
| (in thousands) | Year Ended December 31, 2016 | | Year Ended December 31, 2015 | | Year Ended December 31, 2018 | | | Year Ended December 31, 2017 | |
| Common stock outstanding at beginning of period | 40,738 | | 40,738 | | | 40,738 | | | | 40,738 | |
| Common stock repurchased for treasury | - | | - | | | - | | | | - | |
| Issuance of treasury stock | - | | - | | | - | | | | - | |
| Common stock outstanding at end of period | 40,738 | | 40,738 | | | 40,738 | | | | 40,738 | |
AMBASE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Changes in the treasury shares of Common Stock of the Company are as follows:
| (in thousands) | Year Ended December 31, 2016 | | Year Ended December 31, 2015 | | Year Ended December 31, 2018 | | | Year Ended December 31, 2017 | |
| Treasury stock held at beginning of period | 5,672 | | 5,672 | | | 5,672 | | | | 5,672 | |
| Common stock repurchased for treasury | - | | - | | | - | | | | - | |
| Issuance of treasury stock | - | | - | | | - | | | | - | |
| Treasury stock held at end of period | 5,672 | | 5,672 | | | 5,672 | | | | 5,672 | |
Common Stock Repurchase Plan
The Company'sCompany’s common stock repurchase plan (the "Repurchase Plan"“Repurchase Plan”) allows for the repurchase by the Company of its common stock in the open market. The Repurchase Plan is conditioned upon favorable business conditions and acceptable prices for the common stock. Purchases under the Repurchase Plan may be made, from time to time, in the open market, through block trades or otherwise. Depending on market conditions and other factors, purchases may be commenced or suspended any time or from time to time without prior notice. Pursuant to the Repurchase Plan, the Company has repurchased shares of common stock from unaffiliated parties at various dates at market prices at their time of purchase, including broker commissions.
Information relating to the Repurchase Plan is as follows:
(in thousands) | | Year Ended December 31, 2016 2018 | |
| Common shares repurchased to treasury during the period | | | - | |
| Aggregate cost of shares repurchased during the period | | $ | - | |
| (in thousands) | | December 31, 2016 2018 | |
| Total number of common shares authorized for repurchase | | | 10,000 | |
| Total number of common shares repurchased to date | | | 6,226 | |
| Total number of shares that may yet be repurchased | | | 3,774 | |
Common stock reserved for issuance under the Company's 1993 Stock Incentive Plan as further described in Note 829 herein, and other non-related employee benefit plans is as follows:
AMBASE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(in thousands) | December 31, 2016 |
1993 Stock Incentive Plan | | 4,320 |
Other employee benefit plan | | 110 |
Total common shares reserved for issuance | | 4,430 |
Stockholder Rights Plan
On January 29, 1986,March 27, 2019, the Company'sCompany’s Board of Directors adopted an amended and restated shareholder rights plan (the “New Rights Plan”) pursuant to which the Board of Directors declared a dividend distribution of one right (a “Right”) for each outstanding share of Common Stock of the Company.Company on April 17, 2019. In connection with the New Rights Plan, the Company entered into an amended and restated rights agreement with American Stock Transfer & Trust Company, LLC, as rights agent (the “New Rights Agreement”). The Rights Plan replaces the Company’s former shareholder rights as amended, which entitleplan originally adopted by the Company in January 1986 (the (“Original Rights Plan”).
Under the New Rights Plan, each Right entitles the holder to purchase from the Company aone share of the Company’s common stock, par value $0.01 per share (the “Common Stock”), at a price equal to 50% of $75.00,the then current market value of the Common Stock. The Rights are not exercisable until either a person or group of affiliated persons acquires 25% or more of the Company'sCompany’s outstanding common sharesCommon Stock or upon the commencement or disclosure of an intention to commence a tender offer or exchange offer for 20% or more of the common shares.Common Stock. The rightsRights are redeemable by the Company at $0.05$0.01 per rightRight at any time until the earlier of the tenth day following an accumulation of 20% or more of the Company'sCompany’s shares by a single acquirer or group, or the occurrence of certain Triggering Events (as defined in the StockholderNew Rights Plan)Agreement). In addition, the eventBoard of Directors may, at its option and in its sole and absolute discretion, at any time after a Triggering Event, mandatorily exchange all or part of the rights becomethen outstanding and exercisable and thereafter,Rights for consideration per Right consisting of one-half of the Company is acquired in a merger or other business combination, or in certain other circumstances, each right will entitle the holder to purchase from the surviving corporation, forsecurities that would be issuable at such time upon the exercise price, Common Stock having a market value of twice the exercise price of the right.one Right. The rightsRights are subject to adjustment to prevent dilution and expire on February 10, 2021.
Note 7 - Earnings Per ShareMarch 27, 2029.
The calculationNew Rights Plan differs from the Original Rights Plan in the following material respects:
1. The purchase price of basic and diluted earningsthe Rights has been updated from a fixed amount per Right to the formula based on a 50% discount to the current market value of the Common Stock to align with the Company’s current per share including the effect of dilutive securities is as follows:
(in thousands, except per share data)
| | | Year Ended December 31, 2016 | | | Year Ended December 31, 2015 | |
| Net income (loss) | | $ | (3,219 | ) | | $ | (4,625 | ) |
| Weighted average common shares outstanding | | | 40,738 | | | | 40,738 | |
| | | | | | | | | |
| Assumed dilutive effect of stock option exercise(s) | | | - | | | | - | |
| Weighted average common shares outstanding assuming dilution | | | 40,738 | | | | 40,738 | |
| Net income (loss) per common share - basic | | $ | (0.08 | ) | | $ | (0.11 | ) |
| Net income (loss) per common share - assuming dilution | | $ | (0.08 | ) | | $ | (0.11 | ) |
Options to purchase shares of common stock which were excluded from the computation of diluted earnings per share due to the effect of being antidilutive in the computation of earnings per share were as follows:
(in thousands) | December 31, 2016 | | December 31, 2015 |
Option shares | - | | - |
Note 8 - Incentive Plans
Under the Company's 1994 Senior Management Incentive Compensation Plan (the "1994 Plan"), any executive officermarket price of the Company whose compensation is required to be reported to stockholders underCommon Stock as well as the Securities Exchange Act of 1934 (the "Participants") and who is serving as such at any time during the fiscal year as to which an award is granted, may receive an award of a cash bonus ("Bonus"), in an amount determined by the Personnel Committee of the Company's Board of Directors (the "Committee") and payable from an annual bonus fund (the "Annual Bonus Pool"). The Committee may award Bonuses under the 1994 Plan to Participants not later than 120 days after the end of each fiscal year (the "Reference Year").
If the Committee grants a Bonus under the 1994 Plan, the amount of the Annual Bonus Pool will be an amount equal to the sum of (i) plus (ii), where:
(i) a percentage of the amount by which the Company's Total Stockholders' Equity, as defined, on the last day of a Reference Year increased over the Company's Total Stockholders' Equity, as defined, on the last day of the immediately preceding Reference Year; and
(ii) a percentage of the amount by which the Company's market value, as defined, on the last day of the Reference Year increased over the Company's market value on the last day of the immediately preceding Reference Year.
Notwithstanding the foregoing, the 1994 Plan provides that in the event of a decrease in either or both of items (i) and/or (ii) above, the Annual Bonus Pool is determined by reference to the last Reference Year in which there was an increase in such item. If the Committee determines within the time period to award a Bonus, the share of the Annual Bonus Pool to be allocated to Participants shall be pursuant to percentages of the Annual Bonus Pool as set forth in the 1994 Plan to the Company's Chief Executive Officer, and a percentage of the Annual Bonus Pool shall be allocated pro rata to each of the Company's Participants as determined by the Committee. The Committee in its discretion may reduce the percentage of the Annual Bonus Pool to any Participant for any Reference Year, and such reduction shall not increase the share of any other Participant. The 1994 Plan is not the exclusive plan under which the Executive Officers may receive cash or other incentive compensation or bonuses. No bonuses were paid attributable to the 1994 Plan for 2016 and 2015.
Under the Company's 1993 Stock Incentive Plan (the "1993 Plan"), the Company may grant to officers and employees of the Company and its subsidiaries, stock options ("Options"), stock appreciation rights ("SARs"), restricted stock awards ("Restricted Stock"), merit awards ("Merit Awards") and performance share awards ("Performance Shares") through May 28, 2018. A pre-determined number of shares of the Company's Common Stock are reservedauthorized for issuance under the 1993 Plan (upon the exerciseCompany’s Certificate of Options and Stock Appreciation Rights, and awards of Restricted Stock and Performance Shares); however, only a portion of such shares are available for the issuance of Restricted Stock Awards and Merit Awards. Such shares shall be authorized but unissued shares of Common Stock. Options may be granted as incentive stock options ("ISOs") intended to qualify for favorable tax treatment under Federal tax law or as nonqualified stock options ("NQSOs"). SARs may be granted with respect to any Options granted under the 1993 Plan and may be exercised only when the underlying Option is exercisable.Incorporation;
2. The 1993 Plan requires that the exerciseredemption price of all Options and SARs be equalthe Rights has been reduced from $0.05 per share to or greater than the fair value of the Company's Common Stock on the date of grant of that Option. The term of any NQSO, ISO or related SAR cannot exceed terms under federal tax law and/or as prescribed in the 1993 Plan. Subject to the terms of the 1993 Plan and any additional restrictions imposed at the time of grant, Options and any related SARs ordinarily will become exercisable pursuant to a vesting period prescribed at the time of grant. In the case of a "Change of Control" of the Company (as defined in the 1993 Plan), Options granted pursuant to the 1993 Plan may become fully exercisable as to all optioned shares from and after the date of such Change in Control in the discretion of the Committee or as may otherwise be provided in the grantee's Option agreement. Death, retirement, or absence for disability will not result in the cancellation of any Options.
As a condition to any award of Restricted Stock or Merit Award under the 1993 Plan, the Committee may require a participant to pay an amount equal to, or in excess of,$0.01 per Right, the par value of the shares of Restricted Stock orCompany’s Common Stock awarded to him or her. Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered during a "Restricted Period", which in the case of grants to employees shall not be less than one year from the date of grant. The Restricted Period with respect to any outstanding shares of Restricted Stock awarded to employees may be reduced by the Committee at any time, but in no event shall the Restricted Period be less than one year. Except for such restrictions, the employee as the owner of such stock shall have all of the rights of a stockholder including, but not limited to, the right to vote such stock and to receive dividends thereon as and when paid. In the event that an employee's employment is terminated for any reason, an employee's Restricted Stock will be forfeited; provided, however, that the Committee may limit such forfeiture in its sole discretion. At the end of the Restricted Period, all shares of Restricted Stock shall be transferred free and clear of all restrictions to the employee. In the case of a Change in Control of the Company (as defined in the 1993 Plan), an employee may receive his or her Restricted Stock free and clear of all restrictions in the discretion of the Committee, or as may otherwise be provided pursuant to the employee's Restricted Stock award.Stock;
Performance Share awards3. An exchange feature has been added that grants the Board of Common Stock underDirectors the 1993 Plan shall be earned on the basisauthority to exchange outstanding, exercisable Rights for shares of the Company's performance in relation to established performance measures for a specific performance period. Such measures may include, but shall not be limited to, return on investment, earnings per share, return on stockholder's equity, or return to stockholders. Performance Shares may not be sold, assigned, transferred, pledged or otherwise encumbered during the relevant performance period. Performance Shares may be paid in cash, shares ofCompany’s Common Stock or shares of Restricted Stock in such portions as the Committee may determine. An employee must be employed at the end of the performance period to receive payments of Performance Shares; provided, however, in the event that an employee's employment is terminated by reason of death, disability, retirement or other reason approved by the Committee, the Committee may limit such forfeiture in its sole discretion. In the case of a Change in Control of the Company (as defined in the 1993 Plan), an employee may receive his or her Performance Shares in the discretion of the Committee, or as may otherwise be provided in the employee's Performance Share award.Stock; and
Incentive plan activity is summarized4. Administrative provisions have been added that require a stockholder to make certain representations regarding its beneficial ownership of Company securities upon exercise or exchange of Rights.
AMBASE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note 7 – Commitments and Contingencies
Future minimum rental payments for office space under non-cancellable operating leases for the Company’s executive office in Boca Raton, Florida as of December 31, 2018, were as follows (in thousands):
| Year | | Amount | |
| 2019 | | $ | 3 | |
| 2020 | | | - | |
| 2021 | | | - | |
| 2022 | | | - | |
| 2023 | | | - | |
| Thereafter | | | - | |
| | | $ | 3 | |
Rent expense was as follows:
(shares in thousands) | | Number of
Shares Under Option
| | | Weighted Average Exercise Price | |
| | | | | | |
Outstanding at January 1, 2015 | | | - | | | $ | - | |
Exercised | | | - | | | | - | |
Granted | | | - | | | | - | |
Expired | | | - | | | | - | |
| | | | | | | | |
Outstanding at December 31, 2015 | | | - | | | | - | |
Exercised | | | - | | | | - | |
Granted | | | - | | | | - | |
Expired | | | - | | | | - | |
| | | | | | �� | | |
Outstanding at December 31, 2016 | | | - | | | | - | |
| | | | | | | | |
Options exercisable at: | | | | | | | | |
December 31, 2016 | | | - | | | $ | - | |
December 31, 2015 | | | - | | | $ | - | |
| ($ in thousands) | | Year Ended December 31, 2018 | | | Year Ended December 31, 2017 | |
| Rent expense | | $ | 14 | | | $ | 13 | |
| Approximate square feet of leased office space | | | 1,085 | | | | 1,085 | |
Information relating to the 1993 Plan is as follows:
(in thousands) | | December 31, 2016 | | | December 31, 2015 | |
Unamortized compensation cost relating to non-vested stock options | | $ | - | | | $ | - | |
Stock based compensation expense recorded for the year ended | | $ | - | | | $ | - | |
Options to purchase shares of common stock which were excluded from computation of diluted earnings per share due to the effect of being anti-dilutive in the computation of earnings per share. | | | - | | | | | |
Common shares reserved for issuance | | | 4,320 | | | | | |
Shares available for future stock option grants | | | 4,320 | | | | | |
Intrinsic value of options outstanding | | $ | - | | | | | |
Intrinsic value of options exercisable | | $ | - | | | | | |
The fair value of option awards are estimated on the date of grant using the Black-Scholes-Merton option valuation model ("Black-Scholes") utilizing certain assumptions at the time of valuation. Expected volatilities are based on historical volatility of the Company's stock. The Company uses historical data to estimate option exercises and employee terminations within the valuation model. The expected term of options granted is estimated based on the contractual lives of option grants, option vesting period and historical data and represents the period of time that options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury bond yield in effect at the time of grant.
The Black-Scholes option valuation model requires the inputCompany also rents on a short term basis approximately 200 square feet of highly subjective assumptions, including the expected life of the stock-based award and stock price volatility. The assumptions utilized represent management's best estimates, but these estimates involve inherent uncertainties and the application of management's judgment. As a result, if other assumptions had been used, our recorded stock-based compensation expense could have been materially different from the amounts previously recorded. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. If the actual forfeiture rate is materially different from our estimate, the share-based compensation expense could be materially different. The Company believes that the use of the Black-Scholes model meets the fair value measurement objectives of accounting principles generally acceptedoffice space in the United States of America and reflects all substantive characteristics of the instruments being valued.Emerson, NJ.
The Black-Scholes option valuation model was developed for use in estimating the fair value31
AMBASE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Compensation expense relating to stock options would be recorded in the Consolidated Statement of Operations, with a corresponding increase to additional paid in capital in the Consolidated Statements of Changes in Stockholders' Equity.
Note 98 - Income Taxes
The components of income tax expense (benefit) are as follows:
| (in thousands) | | Year Ended December 31, 2016 | | | Year Ended December 31, 2015 | | | Year Ended December 31, 2018 | | | Year Ended December 31, 2017 | |
| Federal - current | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| State - current | | | (142 | ) | | | 140 | | | | 5 | | | | 6 | |
| Total current | | | (142 | ) | | | 140 | | | | 5 | | | | 6 | |
| | | | | | | | | | |
| Federal - deferred | | | (1,752 | ) | | | (1,365 | ) | | | 312 | | | | (6,037 | ) |
| State - deferred | | | (105 | ) | | | (205 | ) | | | (7,755 | ) | | | (5,402 | ) |
| Change in valuation allowance | | | 1,857 | | | | 1,570 | | | | 6,052 | | | | (8,653 | ) |
| Total deferred | | | - | | | | - | | | | (1,391 | ) | | | (20,092 | ) |
| Income tax expense (benefit) | | $ | (142 | ) | | $ | 140 | | | $ | (1,386 | ) | | $ | (20,086 | ) |
The components of pretax income (loss) and the difference between income taxes computed at the statutory federal rate and the provision for income taxes are as follows:
| (in thousands) | | Year Ended December 31, 2016 | | | Year Ended December 31, 2015 | | | Year Ended December 31, 2018 | | | Year Ended December 31, 2017 | |
| | | | | | | | | | | | | |
| Income (loss) before income taxes | | $ | (3,361 | ) | | $ | (4,485 | ) | | $ | (1,051 | ) | | $ | (68,143 | ) |
| Tax expense (benefit) : | | | | | | | | | | | | | | | | |
| Tax at statutory federal rate | | $ | (1,176 | ) | | $ | (1,570 | ) | | $ | (221 | ) | | $ | (23,851 | ) |
| State income taxes | | | (142 | ) | | | 140 | | | | (59 | ) | | | (5,019 | ) |
| Permanent items | | | – | | | | – | | |
| Other | | | (681 | ) | | | - | | |
| Rate change | | | | (5,759 | ) | | | 16,047 | |
| Permanent items, tax credits and other adjustments | | | | 118 | | | | - | |
| AMT – Sequestration Reversal (change in law) | | | | (1,391 | ) | | | 1,390 | |
| Deferred true-ups | | | | (126 | ) | | | - | |
| Change in valuation allowance | | | 1,857 | | | | 1,570 | | | | 6,052 | | | | (8,653 | ) |
| Income tax expense (benefit) | | $ | (142 | ) | | $ | 140 | | | $ | (1,386 | ) | | $ | (20,086 | ) |
A reconciliation of the United States federal statutory rate to the Company'sCompany’s effective income tax rate is as follows:
| | | Year Ended December 31, 2016 | | | Year Ended December 31, 2015 | | | Year Ended December 31, 2018 | | Year Ended December 31, 2017 | |
| Tax at statutory federal rate | | 35.0 | % | | 35.0 | % | | | 21.0 | % |
|
| 35.0 | % |
| State income taxes | | 4.2 | | | (3.1) | | | | 5.6 | | | 7.0 | |
| Rate change | | | | 548.0 | | | (24.0 | ) |
| Permanent difference, tax credits and other adjustments | | - | | | - | | | | (11.2 | ) | | | - | |
| Other | | 20.3 | | | - | | |
| AMT – Sequestration Reversal (change in law) | | | | 132.4 | | | (2.0
| )
|
| Deferred true-ups | | | | 12.0 | | | -
|
|
| Change in valuation allowance | | (55.3) | | | (35.0) | | | | (575.9 | ) | | | 13.0 | |
| Effective income tax rate | | 4.2 | % | | (3.1) | % | | | 131.9 | % | | | 29.0 | % |
AMBASE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
For the year ended December 31, 2016,2018, the Company recorded an income tax benefit of $1,386,000. This amount reflects an income tax benefit of $1,391,000 attributable to a release of a valuation allowance in relation to additional AMT credit carryforwards available for refund under the 2017 Tax Act, due to the elimination of reductions for the effect of sequestration amounts. This amount is partially offset by a $5,000 state tax expense, attributable to a provision for a tax on capital imposed by the state jurisdictions.
For the year ended December 31, 2017, the Company recorded an income tax benefit partially offset by a state tax expense, attributable to a provision for a tax on capital imposed by the state jurisdictions. The income tax benefit for the year ended December 31, 2017, is attributable to a release of a valuation allowance in relation to the AMT credit carryforwards and resulting deferred tax asset due to recognition of AMT credit carryforwards projected to be refundable as provided for in the 2017 Tax Act as further detailed herein. For the year ended December 31, 2017, other includes amounts relating to deferred tax true-ups.
The Company has not been notified of any potential tax audits by any federal, state or local tax authorities. TheAs such, the Company believes the statutes of limitations for the assessment of additional federal and state tax liabilities are generally closed for tax years prior to 2013.2015. Interest and/or penalties related to underpayments of income taxes, or on uncertain tax positions, if applicable, would be included as a component of income tax expense (benefit). The accompanying financial statements do not include any amounts for interest and/or penalties.
State income tax amounts for the year ended December 31, 2016, reflect a net benefit related to current year and prior year state tax true-ups. State income tax amounts for the year ended December 31, 2015, reflect a provision for a tax on capital imposed by the state jurisdictions.
The utilization of certain carryforwards and carrybacks is subject to limitations under U.S. federal income tax laws. Based on the Company'sCompany’s federal tax returns as filed and to be filed, the Company estimates it has federal NOL carryforwards and federal alternative minimum tax credit carryforwards ("AMT Credits") available to reduce future federal taxable income which would expire if unused, as indicated below.
Based on the Company’s 2017 income tax returns as filed in October 2018, the Company’s NOL carryforwards increased due to the 2017 income tax loss recognized with regard to the Company’s investment in the 111 West 57th Street Property. For additional information with regard to the Company’s investment in the 111 West 57th Property and the Company’s legal proceedings related thereto, see Note 4 and Note 9.
The federal NOL carryforwards as of December 31, 20162018, are as follows:
Tax Year Originating | Tax Year Expiring | | Amount | | | Tax Year Expiring | | Amount | |
| | | | | | | | | | |
| 2006 | 2026 | | $ | 500,000 | | | 2026 | | $ | 500,000 | |
| 2007 | 2027 | | | 12,700,000 | | | 2027 | | | 12,700,000 | |
| 2008 | 2028 | | | 4,600,000 | | | 2028 | | | 4,600,000 | |
| 2009 | 2029 | | | 2,400,000 | | | 2029 | | | 2,400,000 | |
| 2010 | 2030 | | | 1,900,000 | | | 2030 | | | 1,900,000 | |
| 2011 | 2031 | | | 1,900,000 | | | 2031 | | | 1,900,000 | |
| 2013 | 2033 | | | 3,700,000 | | | 2033 | | | 3,700,000 | |
| 2014 | 2034 | | | 4,900,000 | | | 2034 | | | 4,900,000 | |
| 2015 | 2035 | | | 4,200,000 | | | 2035 | | | 4,200,000 | |
| 2016 | 2036 | | | 2,600,000 | | | 2036 | | | 3,400,000 | |
| 2017 | | | 2037 | | | 68,000,000 | |
| 2018 | | | - | | | 500,000 | |
| | | | $ | 39,400,000 | | |
| | $ | 108,700,000 | |
AMBASE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
AMT creditscredit carryforwards available, which can be used to offset income generated in future years which are not subject to expiration, are as follows:follows:
| | | Amount | |
| AMT Credits | | $ | 21,000,000 | |
| | | Amount | |
| AMT credits carryforwards | | $ | 21,483,000 | |
As noted above the Company has AMT credit carryforwards from prior tax years. In accordance with the 2017 Tax Act AMT credit carryforwards, are expected to be claimed by the Company as refundable on tax returns filed and/or to be filed in future tax years and at various percentages as noted below.
The Company’s AMT credit carryforward amount(s) projected to be claimed as refundable for each tax year are as follows:
Tax Year (a) | | Declining balance of the AMT credit carryforward amount(s) available for each tax year (a)(b) | | | % of AMT credit carryforward amount(s) available to be claimed as refundable for each tax year | | | AMT credit carryforward amount(s) projected to be claimed as refundable for each tax year (a)(b) | |
| | | | | | | | | | |
| 2019 | | $ | 10,741,000 | | | | 50 | % | | $ | 5,371,000 | |
| 2020 | | | 5,371,000 | | | | 50 | % | | | 2,685,000 | |
| 2021 | | | 2,685,000 | | | | 100 | % | | | 2,685,000 | |
| | | | | | | | | | | $ | 10,741,000 | |
| (a) | Assumes no regular federal income tax liability in tax years presented above which would reduce any AMT credit carryforward amount(s) ultimately refunded. |
| (b) | See herein with regard the filing of the Company’s 2018 federal income tax return and the March 2019 federal tax refund received. |
In January 2019, the Company filed its 2018 federal income tax return seeking a refund of approximately $10.7 million of AMT credit carryforwards as provided for in the 2017 Tax Cuts and Jobs Act. This amount is reflected as a federal tax receivable at December 31, 2018. The remaining amount of $10.7 million is reflected as a deferred tax asset at December 31, 2018, based on tax returns to be filed in future years. In March 2019, the Company received a $10.7 million federal tax refund based on the Company’s 2018 federal income tax return as filed. The IRS typically has broad discretion to examine taxpayer tax returns, even after refunds have been paid to taxpayers, which could result in adjustments to AMT credit carryforward amounts refunded and/or claimed as refundable and/or AMT credit carryforward amounts ultimately received. See herein for additional information.
The Company’s management is continuing to work closely with outside advisors on the Company’s tax matters as they relate to the 2017 Tax Act and on the various federal tax return matters for the numerous interrelated tax years, including the provisions and application of the 2017 Tax Act along with the amounts and timing of any AMT credit carryforward refunds. The AMT credit carryforward amounts from prior tax years and related refund(s) received and/or projected to be received could potentially be subject to IRS or other tax authority audits, including possible IRS Joint Committee review and/or approval. The Company cannot predict whether or not the IRS and/or other tax authorities will review the Company’s tax returns filed, to be filed and/or as filed in prior years, and/or if they will seek repayment from the Company of any amounts already refunded as a result of an IRS review, if any. Moreover, applicable provisions of the Code and IRS regulations permit the IRS to challenge Company tax positions and filed returns and seek recovery of refunded amounts or of additional taxes for an extended period of time after such returns are filed.
AMBASE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
The 2017 Tax Act makes broad and complex changes to the Code, including, among other changes, significant changes to the U.S. corporate tax rate and certain other changes to the Code that impact the taxation of corporations. The U.S. Treasury Department, the IRS, and other standard-setting bodies could interpret or issue additional guidance in the future on how provisions of the 2017 Tax Act will be applied or otherwise administered that differs from our interpretation. As we complete our analysis of the 2017 Tax Act, and IRS regulations and guidance issued in respect thereof and collect and prepare necessary data, and interpret any additional guidance, we may make adjustments to provisional amounts that we have recorded that may materially impact our provision for income taxes in the period in which the adjustments are made. Additionally, there is risk relating to assumptions regarding the outcome of tax matters, based in whole or in part upon consultation with outside advisors; risk relating to potential unfavorable decisions in tax proceedings; and risks regarding changes in, and/or interpretations of federal and state income tax laws. The Company can give no assurances as to the final outcome of any IRS review of the AMT credit carryforward refunds already received or the final amount of any future AMT credit carryforward refunds, if any, or when they might be received.
Based on the Company'sCompany’s state tax returns as filed and to be filed, the Company estimates that it has state NOL carryforwards to reduce future state taxable income, which would expire if unused.
The state NOL carryforwards as of December 31, 20162018, are as follows:
Tax Year Originating | Tax Year Expiring | | Amount | | | Tax Year Expiring | | Amount | |
| | | | | | | | | | |
| 2011 | 2031 | | $ | 1,800,000 | | | 2031 | | $ | 1,800,000 | |
| 2013 | 2033 | | | 2,700,000 | | | 2033 | | | 2,700,000 | |
| 2014 | 2034 | | | 4,200,000 | | | 2034 | | | 4,200,000 | |
| 2015 | 2035 | | | 4,100,000 | | | 2035 | | | 4,100,000 | |
| 2016 | 2036 | | | 2,800,000 | | | 2036 | | | 2,800,000 | |
| 2017 | | | 2037 | | | 68,000,000 | |
| 2018 | | | 2038 | | | 500,000 | |
| | | | $ | 15,600,000 | | | | | $ | 84,100,000 | |
The Company has a deferred tax asset arising primarily from NOL carryforwards and AMT creditscredit carryforwards as follows:
| | | December 31, 2016 | | | December 31, 2015 | | | December 31, 2018 | | | December 31, 2017 | |
| Net deferred tax asset | | $ | 36,400,000 | | | $ | 34,500,000 | | |
| Deferred tax asset | | | $ | 44,501,000 | | | $ | 47,800,000 | |
| Valuation allowance | | | (36,400,000 | ) | | | (34,500,000 | ) | | | (33,760,000 | ) | | | (27,708,000 | ) |
| Net deferred tax asset recognized | | $ | - | | | $ | - | | | $ | 10,741,000 | | | $ | 20,092,000 | |
AAt December 31, 2017, a valuation allowance has been establishedwas released in relation to the AMT credit carryforwards which are projected to be refundable as part of the 2017 Tax Act enacted in December 2017. In 2018, the Company released its valuation allowance in relation to additional AMT credit carryforwards available for refund (under the 2017 Tax Act), due to the elimination of reductions for the entireeffect of sequestration amounts. A full valuation allowance remains on the remaining deferred tax asset amounts, as management has no basis to conclude that realization is more likely than not. Management does not believe that any significant changes in unrecognized income tax benefits are expected to occur over the next year.
Note 10 - Legal Proceedings35
AMBASE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
From time to time, the Company and its subsidiaries may be named as a defendant in various lawsuits or proceedings. At the current time except as set forth below, the Company is unaware of any legal proceedings pending against the Company. The Company intends to aggressively contest all litigation and contingencies, as well as pursue all sources for contributions to settlements.
The Company is a party to a lawsuit as follows:
AmBase v. 111 West 57th Sponsor LLC, et al.In April 2016, the Company initiated a litigation in the New York State Supreme Court for New York County (the "NY Court"), Index No. 652301/2016, against defendants 111 West 57th Sponsor LLC, 111 West 57th JDS LLC, PMG West 57th Street LLC, 111 West 57th Control LLC, 111 West 57th Developer LLC, Elliot Joseph, 111 West 57th KM Equity LLC, 111 West 57th KM Group LLC, Kevin Maloney, Matthew Phillips, Michael Stern, Ned White and Franklin R. Kaiman (collectively, "Defendants") and nominal defendant 111 West 57th Partners LLC. AmBase alleges in this action that the Defendants engaged in an unlawful scheme to dilute AmBase's equity interest in the joint real estate venture 111 West 57th Partners, to develop the 111 West 57th Street Property and to keep for themselves certain financing opportunities in breach of Defendants' contractual and fiduciary duties. The complaint also alleges that defendants have failed to honor the exercise of AmBase's equity put right. AmBase is seeking compensatory damages, as well as punitive damages and equitable relief including a declaration of the parties' rights, an accounting, and a constructive trust over distributions received by the Defendants. The complaint in this action has been filed and discovery is in the initial stages.
Note 9 - Legal Proceedings
From time to time, the Company and its subsidiaries may be named as a defendant in various lawsuits or proceedings. At the current time except as set forth below, the Company is unaware of any legal proceedings pending against the Company. The Company intends to aggressively contest all litigation and contingencies, as well as pursue all sources for contributions to settlements.
The Company is a party to material legal proceedings as follows:
AmBase Corp., et al. v. 111 West 57th Sponsor LLC, et al.In April 2016, AmBase initiated a litigation in the New York State Supreme Court for New York County (the “NY Court”), Index No. 652301/2016, (“AmBase v. 111 West 57th Sponsor LLC, et al.”) (the “111 West 57th Action”). The defendants in that litigation are 111 West 57th Sponsor LLC, 111 West 57th JDS LLC, PMG West 57th Street LLC, 111 West 57th Control LLC, 111 West 57th Developer LLC, 111 West 57th KM Equity LLC, 111 West 57th KM Group LLC, Kevin Maloney, Matthew Phillips, Michael Stern, Ned White, 111 Construction Manager LLC, Property Markets Group, Inc., JDS Development LLC, JDS Construction Group LLC (collectively, “Defendants”) and nominal defendant 111 West 57th Partners LLC. In the current version of the complaint, AmBase alleges that Defendants violated multiple provisions in the JV Agreement, including by failing to honor the exercise of AmBase’s contractual “equity put right” as set forth in the JV Agreement (the “Equity Put Right”), and committed numerous acts of fraud and breaches of fiduciary duty. AmBase is seeking compensatory damages, as well as treble damages under the federal Racketeer Influenced and Corrupt Organizations Act (RICO), punitive damages, indemnification and equitable relief including a declaration of the parties’ rights, and an accounting. The Company has also demanded from the Sponsor access to the books and records for the 111 West 57th Property which the Sponsor refused, claiming they have provided all books and records as required. The Defendants filed motions to dismiss, and on January 12, 2018, the NY Court issued an opinion allowing some of AmBase’s claims to go forward and dismissing others. Among other claims that the NY Court declined to dismiss was AmBase’s claim that the Defendants violated the implied covenant of good faith and fair dealing by frustrating AmBase’ s Equity Put Right. Claims that the NY Court dismissed included AmBase’s claim that the Defendants breached their contract with AmBase by financing capital contributions for the project through funds obtained from third parties. On January 16, 2018, some of the Defendants wrote to the NY Court suggesting that the opinion contained certain clerical errors and was missing a page. On January 18, 2018, the NY Court removed its previous opinion from the docket and on January 29, 2018, posted a revised opinion. A discovery conference in this case is was held on February 27, 2018. On April 27, 2018, the Company filed a third amended complaint adding federal RICO claims, and new claims for declaratory judgment, breach of contract, fraud, and breach of fiduciary duty, based on information discovered during the course of discovery and events that have transpired since the Company filed its previous complaint in the 111 West 57th Action. On June 18, 2018, Defendants removed the complaint to the U.S. District Court for the Southern District of New York (the “Federal Court”), where it is docketed as case number 18-cv-5482-AT.
On October 25, 2018, the Federal Court issued an order granting the defendants’ motion to dismiss the Company’s RICO claims and declined to exercise supplemental jurisdiction over the Company’s state-law claims. The next month, the Company noticed an appeal, and on January 11, 2019, it served its opening brief in that appeal. The United States Court of Appeals for the Second Circuit (the “Appeals Court”) granted the Company’s motion to file its brief under seal and on the public docket in redacted form. Subsequently, in February 2019 the Defendant’s filed their response brief and in March 2019, the Company filed its reply brief. The Company is awaiting the scheduling of oral argument and/or a decision from the Appeals Court. For additional information with regard to the Company’s investment in the 111 West 57th Property, see Note 4.
AmBase Corp., et al. v. Spruce Capital Partners, et al. In July 2017, the Company initiated a second litigation in the NY Court, Index No. 655031/2017, (the “111 West 57th Spruce Action”). The defendants in the 111 West 57th Spruce action were 111 W57 Mezz Investor, LLC, Spruce Capital Partners LLC, 111 West 57th Sponsor LLC, Michael Z. Stern, and Kevin P. Maloney (collectively, “Defendants”) and nominal defendants 111 West 57th Partners LLC and 111 West 57th Mezz 1 LLC. The Company has since voluntarily discontinued its claims against Sponsor, Stern, and Maloney, without prejudice to reinstating them in the 111 West 57th Spruce Action or any other action.
Spruce had given notice to the junior mezzanine borrower that it proposed to accept the pledged collateral (including the joint venture members’ collective interest in the property) in full satisfaction of the joint venture’s indebtedness under the Junior Mezzanine Loan (i.e., a “Strict Foreclosure”). After the Sponsor refused to object to Spruce’s proposal on behalf of the junior mezzanine borrower, and Spruce refused to commit to honor Investment LLC’s objection on its own behalf, the Company initiated the 111 West 57th Spruce Action to obtain injunctive relief halting the Strict Foreclosure. For additional information on the events leading to this litigation see Note 4.
AMBASE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
On July 26, 2017, the NY Court issued a temporary restraining order barring Spruce from accepting the collateral, pending a preliminary injunction hearing scheduled for August 14, 2017. Spruce and the Sponsor subsequently filed papers in opposition to the request for a preliminary injunction and cross-motions to dismiss and quash subpoenas. On August 14, 2017, the NY Court postponed the hearing until August 28, 2017, keeping the temporary restraining order preventing a Strict Foreclosure in effect until the August 28, 2017 hearing. Subsequently the Company filed response briefs in support of their request for injunctive relief halting the Strict Foreclosure process and briefs in opposition to the motions to quash the subpoenas.
On August 28, 2017, the NY Court held a preliminary injunction hearing, lifted the temporary restraining order, denied Plaintiffs’ request for a preliminary injunction, and granted Defendants’ cross-motions. In order to prevent the Strict Foreclosure process from going forward, the Company immediately obtained an interim stay from the New York Supreme Court Appellate Division, First Judicial Department (“Appellate Division”). That stay remained in place until four (4) P.M. August 29, 2017, permitting the Company to obtain an appealable order, notice an appeal, and move for a longer-term stay or injunctive relief pending appeal. The Appellate Division held a hearing on August 29, 2017, to consider the Company’s motion for an interim stay or injunctive relief pending appeal, both of which it denied, thus allowing the purported Strict Foreclosure to move forward.
On August 30, 2017, Spruce issued a Notice of Retention of Pledged Collateral in Full Satisfaction of Indebtedness. By purporting to accept the pledged collateral, pursuant to a Strict Foreclosure process, Spruce claims to have completed the retention of the collateral pledged by the junior mezzanine borrower, and therefore, the Company’s interest in the 111 West 57th Street Property. Prior to the Strict Foreclosure, the carrying value of the Company’s equity investment in the 111 West 57th Property represented a substantial portion of the Company’s assets and net equity value. The Company will continue to challenge the validity of the actions that led to this purported transfer of title.
The Appellate Division recently issued a decision that resolves the Company’s appeal from the order denying a preliminary injunction and dismissing its claims. The Appellate Division’s decision indicates that the Company’s request for a declaratory judgment is not moot “because plaintiff 111 West 57th Investment LLC (‘Investment’) might be entitled to damages from defendant 111 W57 Mezz Investor LLC (‘Junior Mezz Lender’) if it is judicially determined that Investment had the right to object to the Strict Foreclosure pursuant to Uniform Commercial Code.” The Appellate Division noted that the Company should be allowed to move for leave to amend to state claims for damages and/or the imposition of a constructive trust, as the dismissal of the Company’s claims was without prejudice.
On March 20, 2019, the Company’s subsidiary, 111 West 57th Investment LLC, moved for leave to amend the complaint in the 111 West 57th Spruce Action to state claims for breaches of the Uniform Commercial Code and Pledge Agreement, various torts, and constructive trust. The proposed amended complaint seeks a declaratory judgment, the impression of a constructive trust, permanent injunctive relief restraining Spruce from disposing of or encumbering the Property, and damages, including punitive damages. The proposed amended complaint does not name the Company as a plaintiff or Spruce Capital Partners as a defendant.
Since the Company is not party to the Loan Agreements, it does not have access to communications with the lenders, except for those individual communications that the Sponsor has elected to share or that have been produced in the ongoing litigation. The Company has continued to demand access to such information, including access to the books and records for the 111 West 57th Property both under the JV Agreement and as part of the 111 West 57th Action and the 111 West 57th Spruce Action.
For additional information with regard to the Company’s investment in the 111 West 57th Property and the Company’s recording of an impairment of its equity investment in the 111 West 57th Property in 2017; see Note 4.
AMBASE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
AmBase Corp., et al. v. ACREFI Mortgage Lending LLC, et al. In June 2018, the Company initiated another litigation in the NY Court, Index No. 655031/2017, (the “Apollo Action”). The defendants in the Apollo Action are ACREFI Mortgage Lending, LLC, Apollo Credit Opportunity Fund III AIV I LP, AGRE Debt 1 – 111 W 57, LLC, and Apollo Commercial Real Estate Finance, Inc. (collectively, the “Apollo Defendants”). In the Apollo Action, the Company alleges that the Apollo Defendants aided and abetted the Sponsor, Stern, and Maloney in breaching their fiduciary duties to the Company in connection with the 111 West 57th Property and tortuously interfered with the JV Agreement. The Company is seeking damages as well as punitive damages for tortious interference with the JV Agreement and aiding and abetting the Sponsor’s breaches of their fiduciary duties to the joint venture. The Defendants filed their motion to dismiss on August 17, 2018, and the Company filed its opposition brief on September 17, 2018, and the Defendants filed their reply brief on October 5, 2018. The Court heard oral argument on the motion to dismiss in March 2019. The Company is awaiting a decision on the motion to dismiss from the Court. For additional information with regard to the Company’s investment in the 111 West 57th Property and the JV Agreement; see Note 4.
With respect to its disputes and litigation relating to its interest in the 111 West 57th Property, the Company is continuing to pursue various legal courses of action, as well as considering other possible economic strategies, including the possible sale of the Company’s interest in and/or rights with respect to the 111 West 57th Property. The Company is continuing to pursue other options to realize the Company’s investment value and/or protect its legal rights.
The Company can give no assurances regarding the outcome of the matters described herein, including as to the effect of Spruce’s actions described herein, whether the Sponsor will perform their contractual commitments to the Company under the JV Agreement, as to what further action, if any, the lenders may take with respect to the project, as to the ultimate resolution of the ongoing litigation proceedings relating to the Company’s investment interest in the 111 West 57th Property, as to the ultimate effect of the Sponsor’s, the Company’s or the lenders’ actions on the project, as to the completion or ultimate success of the project, or as to the value or ultimate realization of any portion of the Company’s equity investment in the 111 West 57th Street Property. For additional information with regard to the Company’s investment in the 111 West 57th Property see Note 4.
While the Company’s management is evaluating future courses of action to protect and/or recover the value of the Company’s equity investment in the 111 West 57th Property, the adverse developments make it uncertain as to whether any such courses of action will be successful. Any such efforts are likely to require sustained effort over a period of time, and require substantial additional financial resources. Inability to recover all or most of such value would in all likelihood have a material adverse effect on the Company’s financial condition and future prospects.
For information relating to the Litigation Funding Agreement entered into between the Company and Mr. Richard A. Bianco, the Company’s President and Chief Executive Officer, see Note 10.
IsZo Capital L.P. derivatively and on behalf of AmBase Corporation v. Richard A. Bianco, et al. In February 2018, IsZo Capital L.P. commenced an action, IsZo Capital L.P. derivatively and on behalf of AmBase Corporation v. Richard A. Bianco, et al., Index No. 650812/2018 in the New York State Supreme Court for New York County (the “IsZo Capital L.P. action”). The defendants in the action include all officers and directors of AmBase Corporation and AmBase Corporation as a nominal defendant. The plaintiff alleges various breaches of fiduciary duty against all of the directors and officers concerning the decisions made in the 111 West 57th Street Property investment and a certain litigation funding agreement. IsZo Capital L.P. also seeks declaratory judgment relief concerning a litigation funding agreement and the 111 West 57th Street Property. AmBase and the officers and directors intend to vigorously defend themselves. Service of the summons and complaint has been accepted by counsel on behalf of all defendants and a motion to dismiss was served and filed in early May 2018. The motion was returnable on July 17, 2018 and all motion papers have now been submitted to the Court.
Oral argument on the Company’s motion to dismiss was held on the motion on October 19, 2018, at which time the Court decided that Alessandra Bianco, Richard Bianco, Jr., Jerry Carnegie, John Ferrara and Joseph Bianco should be dismissed as defendants in the case. The Court reserved decision as to dismissal of the balance of the case pending the Court’s receipt of a transcript of the oral argument. On December, 26, 2018, the Court issued its written decision on the balance of the motion to dismiss. The Court dismissed a cause of action against Richard Bianco, dismissed in part the single cause of action against Kenneth Schmidt, and dismissed a cause of action for declaratory judgment. What remains is a single cause of action against Richard Bianco, a single cause of action against Kenneth Schmidt (in part), and a single declaratory judgment cause of action.
AMBASE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
The remaining defendants moved for re-argument of the December 26, 2018 decision, which motion was fully submitted as of March 13, 2019. Defendants, upon re-argument, are seeking dismissal of the entirety of plaintiff’s action, and currently await a decision from the Court on that motion. Defendants, in addition, filed a Notice of Appeal as regards the December 26, 2018 decision on March 6, 2019, which appeal must be perfected on or before September 6, 2019.
On January 15, 2019, the Company filed its answer to the surviving causes of action, as well as asserted counterclaims against the plaintiff. It also served initial discovery demands upon the plaintiff. The Company intends to continue to vigorously defend against plaintiff’s action and prosecute its counterclaims. The Company can give no assurances regarding the outcome of the matters described herein.
Note 10 – Litigation Funding Agreement
In September 2017, the Company’s executive officers and its Board of Directors concluded that it was in the Company’s interest to obtain a litigation funding commitment to finance litigation with respect to the ongoing disputes with the Sponsors and the lenders in the 111 West 57th Street Property project, and to seek to recover value for the Company with respect to its equity investment in 111 West 57th Street Property, whether by direct recovery or from asserting claims against the Sponsors, their principals and/or certain of the lenders (collectively, “Future Recovery Litigation”).
As a result of developments in the legal proceedings concerning the Company’s equity investment in the 111 West 57th Property, the Company’s interest in obtaining a litigation funding commitment to finance litigation with respect to the ongoing disputes with the Sponsors and the lenders in the 111 West 57th Street Property project, and the Company’s efforts to seek to recover value for the Company with respect to its equity investment in the 111 West 57th Property, the Company’s Board of Directors negotiated and accepted an offer from Mr. R. A. Bianco, its long-time chief executive officer, to provide a litigation fund of seven million dollars ($7,000,000) (along with additional amounts as may be necessary from time to time as agreed to by the Company and Mr. Bianco), to fund the Company’s litigation expenses in connection with Future Recovery Litigation, (the “Litigation Funding Agreement”).
In consideration of such financial commitment, the Litigation Funding Agreement provides that any financial recovery in such Future Recovery Litigation shall be distributed as follows:
| i. | first, to reimburse Mr. R. A. Bianco on a dollar-for-dollar basis for any Company litigation expenses and/or other unpaid amounts advanced by him in connection with Future Recovery Litigation; and |
| ii. | thereafter, a percentage of the recovery to the Company and a percentage of the recovery to Mr. R. A. Bianco, respectively, (the “Recovery Sharing Ratio”); with the ratio and percentages of 30% to 45% depending on the length of time to obtain recovery. |
The payment of the amounts pursuant to the Litigation Funding Agreement could become payable by the Company in the future based on the recovery by the Company of amounts relating to the 111 West 57th Property. The recovery, by the Company, of any amounts are not within the control of the Company and cannot be predicted at this time, and therefore, the aggregate amounts funded pursuant to the Litigation Funding Agreement are presented in a temporary equity classification below total liabilities in the Company’s consolidated balance sheets for the periods presented, until such time that the legal proceedings or the Litigation Funding Agreement are concluded. The Company shall not be obligated to repay such funded amounts except as described herein.
Legal expenses incurred attributable to the Litigation Funding Agreement are included in the Company’s consolidated statements of operations as part of professional and outside services, as follows:
(in thousands) | | Year Ended | |
| | | December 31, 2018 | | | December 31, 2017 | |
| Legal expenses attributable to the Litigation Funding Agreement | | $ | 1,860 | | | | 1,511 | |
In the first quarter of 2019, Mr. R. A. Bianco funded an additional $470,000 of legal expenses pursuant to the Litigation Funding Agreement, for litigation services rendered in 2019 and 2018.
AMBASE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note 11 – Commitments and ContingenciesLoans Payable
Future minimum rental paymentsIn May 2016, the Company and Mr. R. A. Bianco entered into an agreement for office space under non-cancellable operating leases forMr. R. A. Bianco to provide to the Company's executive office in Boca Raton, FloridaCompany a secured working capital line of credit of up to one million dollars ($1,000,000) or additional amount(s) as of December 31, 2016, weremay be necessary and agreed to on an as follows (in thousands):needed basis, if and when necessary, subject to customary and market terms and conditions to be agreed upon at such time (the “WC Agreement”).
| Year | | Amount | |
| 2017 | | $ | 13 | |
| 2018 | | | 14 | |
| 2019 | | | 3 | |
| 2020 | | | - | |
| 2021 | | | - | |
| Thereafter | | | - | |
| | | $ | 30 | |
Pursuant to the WC Agreement, Mr. R. A. Bianco made several loans to the Company for use as working capital. The loans were due on the earlier of the date the Company received funds from any source sufficient to pay all amounts due under the loans, including accrued interest thereon, or the due date noted below. Accrued interest payable associated with the loans was included in accounts payable and accrued liabilities in the Company’s consolidated balance sheet.
Rent expenseIn January 2018, pursuant to the WC Agreement, Mr. R.A. Bianco made an additional loan to the Company, as noted in the consolidated statement of cash flows, for use as working capital as reflected and in accordance with the period wassame terms of the loans payable noted herein.
Information regarding the loans payable is as follows:
| ($ in thousands) | | Year Ended December 31, 2016 | | | Year Ended December 31, 2015 | |
| Rent expense | | $ | 12 | | | $ | 12 | |
| Approximate square feet of leased office space | | | 1,085 | | | | 1,085 | |
| | Date of Loan | | Rate | | Due Date | | December 31, 2017 | |
| Loan payable | | January 2017 | | | 5.25 | % | December 31, 2019 | | $ | 500,000 | |
| Loan payable | | April 2017 | | | 5.25 | % | December 31, 2019 | | | 500,000 | |
| Loan payable | | June 2017 | | | 5.25 | % | December 31, 2019 | | | 500,000 | |
| Loan payable | | September 2017 | | | 5.25 | % | December 31, 2019 | | | 150,000 | |
| Loan payable | | October 2017 | | | 5.25 | % | December 31, 2019 | | | 446,000 | |
| Loan payable | | December 2017 | | | 5.25 | % | December 31, 2019 | | | 200,000 | |
| | | | | | | |
| | $ | 2,296,000 | |
Information regarding accrued interest expense on the loans payable is as follows:
(in thousands) | | December 31, 2018 | | | December 31, 2017 | |
| Accrued interest expense | | $ | - | | | $ | 67 | |
The amounts noted above pursuant to the WC Agreement are distinct from the line of credit agreement for the 111 West 57th Property as discussed in Note 4 herein and distinct from the Litigation Funding Agreement amounts as discussed in Note 9 herein.
In January 2018, in connection with the sale by the Company of its commercial office building in Greenwich, Connecticut, the Company repaid the full amount of the working capital loan, plus accrued interest aggregating $2,623,000 to Mr. R. A. Bianco, and the WC Agreement was terminated. See Note 3 herein for additional information.
Note 12 - Subsequent Events
The Company has performed a review of events through the report issuance date.
| ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
None.
ITEM 9A. | ITEM 9A. | CONTROLS AND PROCEDURES |
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its filings with the Company's Exchange Act reportsSEC is recorded, processed, summarized and reported within the time periodsperiod specified in the SEC'sSEC’s rules and forms, and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based on the definition of "disclosure controls and procedures" in Rule 13a-15(e).disclosure. In designing and evaluating the disclosure controls and procedures, management has recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily wasis required to apply its judgment in evaluating the cost-benefit relationship of possibleits controls and procedures.
As of December 31, 2016,During the Company completed an evaluation, underfiscal period covered by this report, the supervision andCompany’s management, with the participation of the Company's management, including the Company's Chief Executive Officer and the Company's Chief Financial Officer of the Company, carried out an evaluation of the effectiveness of the design and operation of the Company'sCompany’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, Rule 13a-15(e) and 15d-15(e)as amended (the “Exchange Act”)). Based uponon that evaluation, the Company'sour Chief Executive Officer and Chief Financial Officer have concluded that the Company'sour disclosure controls and procedures arewere effective at a reasonable assurance level in timely alerting them to material information relating to us which is required to be included in our periodic Securities and Exchange Commission filings.as of December 31, 2018.
Evaluation ofManagement’s Report on Internal Control Overover Financial Reporting
Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting.reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company's internal control system was designed to provide reasonable assurance to the Company's management and board of directors regarding the preparation and fair presentation of published financial statements.
Management assessed the effectiveness of the Company'sCompany’s internal control over financial reporting (as definedis designed, under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. The Company’s internal control over financial reporting includes those policies and procedures that: (i) pertain to the Securities Exchange Actmaintenance of 1934 Rule 13a-15(f)records that, in reasonable detail, accurately and 15d-15(f))fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) 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.
The Company’s management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2016. In making this assessment, it used2018. This evaluation was based on the criteria set forthframework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)Commission. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.
Based on management’s evaluation under the framework in Internal Control-IntegratedControl—Integrated Framework (1992). Based on our assessment, we believe(2013), management concluded that as of December 31, 2016, the Company's internal control over financial reporting iswas effective based on those criteria.as of December 31, 2018.
This annual report does not include an attestation report of the Company’s independent public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent public accounting firm pursuant to rules of the SEC that permit the Company to provide only management’s report in this annual report.
Changes in Internal Control Overover Financial Reporting
There have beenwere no changes duringin the most recent fiscal quarter in ourCompany’s internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) ofduring the Exchange Act,quarter ended December 31, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B.| ITEM 9B. | OTHER INFORMATION |
Stockholder Rights Plan
InOn March 2017,27, 2019, the Company’s Board of Directors adopted an amended and restated shareholder rights plan (the “New Rights Plan”) pursuant to which the Board of Directors declared a dividend distribution of one right (a “Right”) for each outstanding share of Common Stock of the Company and Mr. Richard A. Bianco,on April 17, 2019. In connection with the Company's Chairman, President and Chief Executive Officer ("R. A. Bianco")New Rights Plan, the Company entered into an amended and restated rights agreement for Mr. R. A. Bianco to provide towith American Stock Transfer & Trust Company, LLC, as rights agent (the “New Rights Agreement”). The Rights Plan replaces the Company a financial commitment in the form of a line of credit up to ten million dollars ($10,000,000) or additional amount(s) as may be necessary and agreed to enable AmBase to contribute capital to Investment LLC and/or other affiliated subsidiaries of the Company to meet capital calls for the of 111 West 57th Property if and when the case may be necessary on terms agreeable to/Company’s former shareholder rights plan originally adopted by the Company (as determinedin January 1986 (the (“Original Rights Plan”).
Under the New Rights Plan, each Right entitles the holder to purchase from the Company one share of the Company’s common stock, par value $0.01 per share (the “Common Stock”), at a price equal to 50% of the then current market value of the Common Stock. The Rights are not exercisable until either a person or group of affiliated persons acquires 25% or more of the Company’s outstanding Common Stock or upon the commencement or disclosure of an intention to commence a tender offer or exchange offer for 20% or more of the Common Stock. The Rights are redeemable by the independent membersCompany at $0.01 per Right at any time until the earlier of the tenth day following an accumulation of 20% or more of the Company’s shares by a single acquirer or group, or the occurrence of certain Triggering Events (as defined in the New Rights Agreement). In addition, the Board of Directors)Directors may, at its option and R. A. Biancoin its sole and absolute discretion, at any time after a Triggering Event, mandatorily exchange all or part of the then outstanding and exercisable Rights for consideration per Right consisting of one-half of the securities that would be issuable at such time.time upon the exercise of one Right. The agreement providesRights are subject to adjustment to prevent dilution and expire on March 27, 2029.
The New Rights Plan differs from the Original Rights Plan in the following material respects:
1. The purchase price of the Rights has been updated from a fixed amount per Right to the formula based on a 50% discount to the current market value of the Common Stock to align with the Company’s current per share market price of the Common Stock as well as the number of shares of Common Stock authorized for issuance under the Company’s Certificate of Incorporation;
2. The redemption price of the Rights has been reduced from $0.05 per share to $0.01 per Right, the par value of the Company’s Common Stock;
3. An exchange feature has been added that additional borrowings from Mr. R. A. Bianco pursuantgrants the Board of Directors the authority to exchange outstanding, exercisable Rights for shares of the Company’s Common Stock; and
4. Administrative provisions have been added that require a stockholder to make certain representations regarding its beneficial ownership of Company securities upon exercise or exchange of Rights.
The Company is providing this lineinformation under 9B in lieu of credit shall be secured byfiling a Current Report Form 8-K under Items 1.01 and 9.01. A copy of the Company's commercial office building in Greenwich, Connecticut. This agreementNew Rights Agreement is filed as exhibit 10.9Exhibit 4.1 to this Annual Report on Form 10-K and is incorporated herein by reference. Disclosure of this agreement is being made under this Item 9B in lieu of Items 1.01 and 9.01 of Form 8-K.
reference
PART III
| ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
Information concerning executive officers and directors required by this item will be set forth in the Company's definitiveCompany’s Definitive Proxy Statement for its Annual Meeting of Shareholders to be held on June 1, 2017,7, 2019, which is incorporated herein by reference, which the Company intends to file with the Securities and Exchange Commission not later than 120 days after the end of its 20162018 fiscal year.
Code of Ethics
We have adopted a Code of Ethics that applies to our Chief Executive Officer, Chief Financial Officer and other senior officers. A copy of the Code of Ethics was filed with the SEC as Exhibit 14 to the Company'sCompany’s Annual Report on Form 10-K for the year ended December 31, 2003.
ITEM 11.EXECUTIVE COMPENSATION| ITEM 11. | EXECUTIVE COMPENSATION |
For the information required to be set forth by the Company in response to this item, see the Company's definitiveCompany’s Definitive Proxy Statement for its Annual Meeting of Shareholders to be held on June 1, 2017,7, 2019, under the captions "Executive“Executive Compensation," "Employment” “Employment Contracts,"” and "Compensation“Compensation of Directors"Directors” which are incorporated herein by reference, which the Company intends to file with the Securities and Exchange Commission not later than 120 days after the end of its 20162018 fiscal year.
ITEM 12.| ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND MANAGEMENT ANDRELATED STOCKHOLDER MATTERS |
The following table summarizes information about securities authorized for issuance under equity compensation plans of the Company at December 31, 2016 as follows:None.
| | Shares to be issued upon exercise of outstanding options | | | Weighted average exercise price of outstanding options | | | Shares available for future issuance | |
| | | | | | | | | |
Equity Compensation - plans approved by stockholders | | | | | | | | | |
| | | - | | | $ | - | | | | 4,320,000 | |
Equity Compensation - plan not approved by stockholders | | | | | | | | | | | | |
| | | - | | | | - | | | | 110,000 | |
Total | | | - | | | $ | - | | | | 4,430,000 | |
| | | | | | | | | | | | |
Plan not approved by stockholders
The Company has 110,000 shares of common stock reserved for issuance under the AmBase Corporation Stock Bonus Plan (the "Stock Bonus Plan"), which was approved by the Board of Directors of the Company in 1989. The purpose of the Stock Bonus Plan is to encourage individual performance and to reward eligible employees whose performance, special achievements, longevity of service to the Company or suggestions make a significant improvement or contribution to the growth and profitability of the Company. The Stock Bonus Plan is administered by the Personnel Committee of the Board of Directors. Members of the Personnel Committee are not eligible for an award pursuant to the Stock Bonus Plan. The Company's President may also designate eligible employees to receive awards, which are not to be in excess of 100 shares of Common Stock. No fees or expenses of any kind are to be charged to a participant. Any employee of the Company, except for certain officers or directors of the Company, is eligible to receive shares under the Stock Bonus Plan. Distributions of shares may be made from authorized but unissued shares, treasury shares or shares purchased on the open market.None.
For other information required to be set forth by the Company in response to this item, see the Company's definitiveCompany’s Definitive Proxy Statement for its Annual Meeting of Shareholders to be held on June 1, 2017,7, 2019, under the caption "Stock Ownership"“Stock Ownership”, which is incorporated herein by reference, which the Company intends to file with the Securities and Exchange Commission not later than 120 days after the end of its 20162018 fiscal year.
| ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
For the information required to be set forth by the Company in response to this item, see the Company's definitiveCompany’s Definitive Proxy Statement for its Annual Meeting of Shareholders to be held on June 1, 2017,7, 2019, under the captions "Proposal“Proposal No. 1 - Election of Directors"Directors” and "Information“Information Concerning the Board and its Committees,"” which are incorporated herein by reference, which the Company intends to file with the Securities and Exchange Commission not later than 120 days after the end of its 20162018 fiscal year.
| ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES |
The information concerning Principal Accounting Fees and Services is set forth by the Company under the heading "Proposal“Proposal 2 - Independent Registered Public Accounting Firm"Firm”, "Independent“Independent Registered Public Accountant Matters,"” in the Company's definitiveCompany’s Definitive Proxy Statement for its Annual Meeting of Shareholders to be held on June 1, 2017,7, 2019, which is incorporated herein by reference, which the Company intends to file with the Securities and Exchange Commission not later than 120 days after the end of its 20162018 fiscal year.
PART IV | | | |
| ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
| (a) | Documents filed as a part of this report: | | |
| 1. Index to Financial Statements: | | Page |
| | Report of Independent Registered Public Accounting Firm | | 1216 |
| | Consolidated Statements of Operations | | 1317 |
| | Consolidated Balance Sheets | | 1418 |
| | Consolidated Statements of Changes in Stockholders'Stockholders’ Equity | | 1519 |
| | Consolidated Statements of Cash Flows | | 1620 |
| | Notes to Consolidated Financial Statements | 21 |
| (b) | 17Exhibits: |
2. Index to Financial Statements Schedules: | | |
| | Schedule III - Real Estate and Accumulated Depreciation | | |
(b) Exhibits: | | |
| 3.1.3.1 | |
| | 3.2. | |
| 3.2 | By-Laws of AmBase Corporation (as amended through March 15, 1996), (incorporated(incorporated by reference to Exhibit 3B3.2 to the Company'sCompany’s Annual Report on Form 10-K for the year ended December 31, 1995)2017). |
| | 4. | |
| | Amended & Restated Rights Agreement dated as of February 10, 1986March 27, 2019 between the Company and American Stock Transfer and Trust Co. (as amended March 24, 1989, November 20, 1990, February 12, 1991, October 15, 1993, February 1, 1996, November 1, 2000, November 9, 2005, November 10, 2010, and November 10, 2015), (incorporated by reference to Exhibit 4 to the Company's Annual Report on Form 10-K for the year ended December 31, 1990, the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 1993, the Company's Annual Report on Form 10-K for the year ended December 31, 1995, the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2000, the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2005, the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2010, and the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015, respectively). |
| | 10.1. | 1993 Stock Incentive Plan as amended (incorporated by reference to Exhibit A to the Company's Proxy Statement for the Annual Meeting of Stockholders held on May 16,2008 and the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2010, respectively).
|
| | 10.2.10.1 | 1994 Senior Management Incentive Compensation Plan (incorporated by reference to Exhibit A to the Company's Proxy Statement for the Annual Meeting of Stockholders held on May 27, 1994).
|
| 10.3. | AmBase Officers and Key Employees Stock Purchase and Loan Plan (incorporated by reference to Exhibit 10E to the Company's Annual Report on Form 10-K for the year ended December 31, 1989).
|
| 10.4. | Employment Agreement dated as of March 30, 2006 between Richard A. Bianco and the Company, for employment from June 1, 2007 through May 31, 2012, (incorporated by reference to Exhibit 10H to the Company'sCompany’s Annual Report on Form 10-K for the year ended December 31, 2005), and. |
| | |
| 10.2 | Amendment to Employment Agreement dated as amendedof January 1, 2008 between Richard A. Bianco and the Company, (incorporated by reference to Exhibit 10E to the Company'sCompany’s Annual Report on Form 10-K for the year ended December 31, 2007) as amended as. |
| | |
| 10.3 | Amendment to Employment Agreement between Richard A. Bianco and the Company extending term of January 1, 2012,employment to May 31, 2023, (incorporated by reference to Exhibit 10D10.6 to the Company'sCompany’s Annual Report on Form 10-K for the year ended December 31, 2011), and as amended as of June 17, 2013, (incorporated by reference to the Company's Current Report on Form 8-K filed on June 21, 2013 and to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013)2017). |
| | 10.5 | |
| 10.4 | |
| | 10.6 | |
| 10.5 | |
| | 10.7 | |
| 10.6 | |
| 10.8 | Loan Agreement between Mr. Richard A. Bianco, the Company's Chairman President and Chief Executive Officer ("R. A. Bianco") and the Company. |
| 10.9 | Agreement between Mr. Richard A. Bianco, the Company's Chairman President and Chief Executive Officer ("R. A. Bianco") and the Company for Mr. R. A. Bianco to provide to the Company a financial commitment in the form of a line of credit up to ten million dollars ($10,000,000) or additional amount(s) as may be necessary and agreed to enable AmBase to contribute capital to the 111 West 57th Property. |
| 14. | AmBase Corporation - Code of Ethics as adopted by Board of DirectorsProperty (incorporated by reference to Exhibit 1410.9 to the Company'sCompany’s Annual Report on Form 10-K for the year endedannual period ending December 31, 2003)2016).
|
| | 21. | |
| 10.7 | Company (incorporated by reference to Exhibit 10.1 to the Company’s Current report on Form 8-K dated September 26, 2017 and Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ending September 30, 2017). |
| | 23. | Consent of Independent Registered Public Accounting Firm.
|
| | 31.110.8 | Rule 13a-14(a) Certification of Chief Executive Officer Pursuant to Rule 13a-14.
|
| 31.2 | Rule 13a-14(a) Certification of Chief Financial Officer Pursuant to Rule 13a-14.
|
| 32.1 | Section 1350 Certification of Chief Executive Officer pursuant to Rule 18 U.S.C. Section 1350.
|
| 32.2 | Section 1350 Certification of Chief Financial Officer pursuant to Rule 18 U.S.C. Section 1350.
|
| 99.1 | |
| | 99.2 | United States Court of Federal Claims Opinion and Order dated August 6, 2013 regarding tax gross-up, initially filed under seal reissued for publication August 16, 2013 (originally filed as Exhibit 99 to the Company's Current Report on Form 8-K filed on August 20, 2013 and incorporated by reference herein).
|
| | 101.114 | The following financial statements from AmBase Corporation'sCorporation - Code of Ethics as adopted by Board of Directors (incorporated by reference to Exhibit 14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 20162003). |
| | |
| | Subsidiaries of the Registrant. |
| | |
| | Rule 13a-14(a) Certification of Chief Executive Officer Pursuant to Rule 13a-14. |
| | |
| | Rule 13a-14(a) Certification of Chief Financial Officer Pursuant to Rule 13a-14. |
| | Section 1350 Certification of Chief Executive Officer pursuant to Rule 18 U.S.C. Section 1350. |
| | |
| | Section 1350 Certification of Chief Financial Officer pursuant to Rule 18 U.S.C. Section 1350. |
| | |
| 101.1* | The following financial statements from AmBase Corporation’s Annual Report on Form 10-K for the year ended December 31, 2018 formatted in XBRL: (i) Consolidated Statement of Operations; (ii) Consolidated Balance Sheets; (iii) Consolidated Statements of Cash Flow: and (iv) Notes to Consolidated Financial Statements. |
Exhibits, except as otherwise indicated above, are filed herewith.
ITEM 16. | ITEM 16. | FORM 10-K SUMMARY |
Not applicable.
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.
AMBASE CORPORATION
/s/RICHARD A. BIANCO
Chairman, President and Chief Executive
Officer (Principal Executive Officer)
Date: March 27, 2019
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 on the dates indicated.
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. |
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AMBASE CORPORATION | | |
| | |
| | |
| | |
/s/RICHARD A. BIANCO
Chairman, President and Chief Executive
Officer (Principal Executive Officer)
Date: March 30, 2017
| | |
| | |
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 on the dates indicated. |
| | |
| | |
| | |
/s/RICHARD A. BIANCO Chairman, President, Chief Executive Officer and Director Date: March 30, 201727, 2019 | | /s/JOHN FERRARA Vice President, Chief Financial Officer and Controller (Principal Financial and Accounting Officer) Date: March 30, 201727, 2019 |
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| | |
/s/ALESSANDRA F. BIANCO Director Date: March 30, 201727, 2019 | | /s/RICHARD A. BIANCO, JR. Director Date: March 30, 201727, 2019 |
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/s/JERRY Y. CARNEGIE Director Date: March 30, 201727, 2019 | | /s/KENNETH M. SCHMIDT Director Date: March 30, 201727, 2019 |
AMBASE CORPORATION AND SUBSIDIARIES45
SCHEDULE III. REAL ESTATE AND ACCUMULATED DEPRECIATION
(dollars in thousands)
| | | | | | | | | | | | | | | |
| | | | | | Initial Cost to Company | | | Cost Capitalized Subsequent to Acquisition | | | Gross Amount at which Carried at Close of Period | | | | |
| Description | | Encumbrances | | | Land | | | Building & Improvements | | | Improvements | | | Land | | | Building & Improvements | | | Total | |
| Office Building: | | | | | | | | | | | | | | | | | | | | | |
| Greenwich, CT | | $ | - | | | $ | 554 | | | $ | 1,880 | | | $ | 20 | | | $ | 554 | | | $ | 1,900 | | | $ | 2,454 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total | | $ | - | | | $ | 554 | | | $ | 1,880 | | | $ | 20 | | | $ | 554 | | | $ | 1,900 | | | $ | 2,454 | |
[Additional columns below]
[Continued from above table, first column(s) repeated]
| | | | | | | | |
| Description | | Accumulated Depreciation | | | Date of Construction | | Date Acquired | Life on Which Depreciation in Latest Income Statement is Computed |
| Office Building: | | | | | | | | |
| Greenwich, CT | | $ | 774 | | | | 1970 | | April, 2001 | 39 years |
| | | | | | | | | | | |
| Total | | $ | 774 | | | | | | | |
| | | | | | | | | | | |
| | | Year Ended December 31, 2016 | | | Year Ended December 31, 2015 | |
| | | | | | | |
| Balance at beginning of year | | $ | 2,454 | | | $ | 2,454 | |
| Improvements | | | - | | | | - | |
| Acquisitions | | | - | | | | - | |
| Disposition | | | - | | | | - | |
| Balance at end of year | | $ | 2,454 | | | $ | 2,454 | |
| | | | | | | | | |
| Total cost for federal tax purposes at end of each year | | $ | 2,454 | | | $ | 2,454 | |
| | | | | | | | | |
[b] Reconciliation of accumulated depreciation as follows:
| Balance at beginning of year | | $ | 726 | | | $ | 678 | |
| Depreciation expense | | | 48 | | | | 48 | |
| Dispositions | | | - | | | | - | |
| Balance at end of year | | $ | 774 | | | $ | 726 | |
| DIRECTORS AND OFFICERS | | | |
| | | | | |
Board of Directors | | | | |
Richard A. Bianco Chairman, President and Chief Executive Officer AmBase Corporation | Alessandra F. Bianco Senior Officer BARC Investments, LLC | Richard A. Bianco, Jr. Employee AmBase Corporation & Officer BARC Investments, LLC | Jerry Y. Carnegie Private Investor | Kenneth M. Schmidt Private Investor |
| | | | | |
AmBase Officers | | | | |
Richard A. Bianco Chairman, President and Chief Executive Officer | John Ferrara Vice President, Chief Financial Officer and Controller | Joseph R. Bianco Treasurer | | |
INVESTOR INFORMATION
Annual Meeting of Stockholders The 20172019 Annual Meeting is currently scheduled to be held at 9:00 a.m. Eastern Time, on Thursday, June 1, 2017,6, 2019, at: Hyatt Regency Hotel 1800 East Putnam Avenue Greenwich, CT 06870 | | Corporate Headquarters AmBase Corporation 100 Putnam Green, 3rd FloorOne South Ocean Boulevard, Suite 301
Greenwich, CT 06830-6027Boca Raton, FL 33432
(203) 532-2000(201) 265-0169
| |
Common Stock Trading AmBase stock is traded through one or more market-makers with quotations made available on the over-the-counter market. Issue: Common Stock Abbreviation: AmBase Ticker Symbol: ABCP.OB Transfer Agent and Registrar American Stock Transfer & Trust Company, LLC 6201 15th Avenue Brooklyn, NY 11219 Attention: Shareholder Services (800) 937-5449 or (718) 921-8200 Ext. 6820 | | Stockholder Inquiries Stockholder inquiries, including requests for the following: (i) change of address; (ii) replacement of lost stock certificates; (iii) Common Stock name registration changes; (iv) Quarterly Reports on Form 10-Q; (v) Annual Reports on Form 10-K; (vi) proxy material; and (vii) information regarding stockholdings, should be directed to: American Stock Transfer & Trust Co. LLC 6201 15th Ave. Brooklyn, NY 11219 Attention: Shareholder Services (800) 937-5449 or (718) 921-8200 Ext. 6820 In addition, the Company'sCompany’s public reports, including Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K and Proxy Statements, can be obtained through the Securities and Exchange Commission EDGAR Database over the World Wide Web at www.sec.gov. |
| | | | |
Independent Registered Public Accountants Marcum LLP Maritime Center 555 Long Wharf Drive New Haven, CT 06511 | | Number of Stockholders As of February 28, 2017,2019, there were, approximately 9,2008,200 stockholders. | |