UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section
13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 2005
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission file number 1-7265
AMBASE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 95-2962743
(State of incorporation) (I.R.S. Employer Identification No.)
100 PUTNAM GREEN, 3RD FLOOR
GREENWICH, CONNECTICUT 06830
(Address of principal executive offices) (Zip Code)
(203) 532-2000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
------- ------
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
YES NO X
------- -------------
At August 9, 2005, there were 46,233,519 shares outstanding of the
registrant's common stock, $0.01 par value per share.
AmBase Corporation
Quarterly Report on Form 10-Q
June 30, 2005
TABLE OF CONTENTS Page
------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited).....................................................................1
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.................................................13
Item 3. Quantitative and Qualitative Disclosures About Market Risk..........................................15
Item 4. Controls and Procedures.............................................................................16
PART II - OTHER INFORMATION
Item 1. Legal Proceedings...................................................................................17
Item 4. Submission of Matters to a Vote of Security Holders.................................................18
Item 6. Exhibits............................................................................................18
Signatures ....................................................................................................19
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
AMBASE CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except for share amounts)
June 30, December 31,
2005 2004
(unaudited)
======== =========
Assets:
Cash and cash equivalents......................................................... $ 6,751 $10,124
Investment securities:
Held to maturity (market value $8,690 and $8,586, respectively)............... 8,690 8,590
Available for sale, carried at fair value .................................... 1,761 2,112
-------- --------
Total investment securities....................................................... 10,451 10,702
-------- --------
Accounts receivable............................................................... 4 1
Real estate owned:
Land............................................................................ 554 6,954
Buildings and improvements...................................................... 1,900 12,810
-------- --------
2,454 19,764
Less: accumulated depreciation................................................. (207) (763)
-------- --------
Real estate owned, net............................................................ 2,247 19,001
Real estate held for sale, net (see notes 6 and 7)................................ 16,588 -
Other assets...................................................................... 654 1,032
-------- --------
Total assets...................................................................... $ 36,695 $ 40,860
======== ========
Liabilities and Stockholders' Equity:
Liabilities:
Accounts payable and accrued liabilities.......................................... $ 821 $ 1,495
Supplemental retirement plan...................................................... 12,637 11,594
Other liabilities................................................................. 348 2,197
-------- --------
Total liabilities................................................................. 13,806 15,286
-------- --------
Commitments and contingencies..................................................... - -
-------- --------
Stockholders' equity:
Common stock ($0.01 par value, 200,000,000 authorized, 46,410,007 issued and
46,233,519 outstanding)........................................................... 464 464
Paid-in capital................................................................... 547,956 547,956
Accumulated other comprehensive income............................................ (449) (375)
Accumulated deficit............................................................... (524,397) (521,786)
Treasury stock, at cost - 176,488 shares.......................................... (685) (685)
-------- --------
Total stockholders' equity........................................................ 22,889 25,574
-------- --------
Total liabilities and stockholders' equity........................................ $ 36,695 $ 40,860
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
AMBASE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
Second Quarter and Six Months Ended June 30
(Unaudited)
(in thousands, except per share data)
Second Quarter Six Months
2005 2004 2005 2004
==== ==== ==== ====
Revenues:
Rental income............................................... $ 43 $ 48 $ 86 $ 90
Operating expenses:
Compensation and benefits................................... 1,105 1,026 2,275 2,109
Professional and outside services........................... 661 172 1,114 272
Property operating and maintenance ......................... 42 21 70 48
Depreciation .............................................. 12 12 25 25
Insurance................................................... 28 34 44 53
Other operating ............................................ 36 46 86 91
---------- --------- --------- ---------
1,884 1,311 3,614 2,598
---------- --------- --------- ---------
Operating loss ............................................. (1,841) (1,263) (3,528) (2,508)
---------- --------- --------- ---------
Interest income............................................. 146 123 271 238
Realized gains on sales of investment securities............ - 229 20 336
---------- --------- --------- ---------
Loss from continuing operations before
income taxes........................................... (1,695) (911) (3,237) (1,934)
Income tax expense.......................................... (30) (30) (60) (60)
---------- --------- --------- ---------
Loss from continuing operations............................. (1,725) (941) (3,297) (1,994)
---------- --------- --------- ---------
Income from discontinued operations (see notes 6 and 7)..... 345 327 686 650
---------- --------- --------- ---------
Net loss.................................................... $(1,380) $(614) $(2,611) $(1,344)
========== ========= ========= =========
Per share data:
Basic:
Loss from continuing operations............................. $ (0.04) $(0.02) $ (0.07) $ (0.04)
Income from discontinued operations......................... 0.01 0.01 0.01 0.01
--------- --------- --------- ----------
Net loss.................................................... $ (0.03) $(0.01) $ (0.06) $ (0.03)
========= ========= ========= ==========
Assuming dilution:
Loss from continuing operations............................. $ (0.04) $(0.02) $ (0.07) $ (0.04)
Income from discontinued operations......................... 0.01 0.01 0.01 0.01
--------- --------- --------- ----------
Net loss.................................................... $ (0.03) $(0.01) $ (0.06) $ (0.03)
========= ========= ========= ==========
Weighted average common shares outstanding:
Basic....................................................... 46,234 46,234 46,234 46,217
========= ========= ========= ==========
Diluted................................................... 46,234 46,234 46,234 46,217
========= ========= ========= ==========
The accompanying notes are an integral part of these consolidated financial
statements.
AMBASE CORPORATION AND SUBSIDIARIES
Consolidated Statement of Comprehensive Income (Loss)
Second Quarter and Six Months Ended June 30
(Unaudited)
(in thousands)
Second Quarter Six Months
2005 2004 2005 2004
====== ===== ===== =====
Net loss.............................................................. $(1,380) $ (614) $(2,611) $(1,344)
Unrealized holding gains (losses) on investment securities
available for sale............................................... 108 8 (74) 62
-------- -------- -------- ---------
Comprehensive loss.................................................... $(1,272) $ (606) $(2,685) $(1,282)
======= ======== ======== =========
The accompanying notes are an integral part of these consolidated financial
statements.
AMBASE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Six Months Ended June 30
(Unaudited)
(in thousands)
2005 2004
==== ====
Cash flows from operating activities:
Net loss....................................................................... $(2,611) $(1,344)
Adjustments to reconcile net loss to net cash used by operations:
Depreciation and amortization.............................................. 166 165
Accretion of discount - investment securities.............................. (83) (51)
Realized gains on investment securities available for sale................ (20) (336)
Changes in other assets and liabilities:
Accounts receivable........................................................ (3) (1)
Other assets............................................................... 378 (171)
Accounts payable and accrued liabilities................................... (674) (500)
Other liabilities.......................................................... (806) 828
Other, net..................................................................... 2 (1)
-------- ---------
Net cash used by operating activities.......................................... (3,651) (1,411)
-------- ---------
Cash flows from investing activities:
Maturities of investment securities - held to maturity......................... 17,283 17,353
Purchases of investment securities - held to maturity.......................... (17,301) (8,499)
Purchases of investment securities - available for sale........................ (252) (17,224)
Sales of investment securities - available for sale............................ 548 8,273
-------- ---------
Net cash provided (used) by investing activities............................... 278 (97)
-------- ---------
Cash flows from financing activities:
Stock options exercised........................................................ - 17
-------- ---------
Net cash provided by financing activities...................................... - 17
-------- ---------
Net decrease in cash and cash equivalents...................................... (3,373) (1,491)
Cash and cash equivalents at beginning of period............................... 10,124 2,785
-------- ---------
Cash and cash equivalents at end of period..................................... $6,751 $1,294
======== =========
Supplemental cash flow disclosures:
Income taxes paid.............................................................. $ 87 $ 86
=========== =========
The accompanying notes are an integral part of these consolidated financial
statements.
AMBASE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note 1 - Organization
The accompanying consolidated financial statements of AmBase Corporation
and its wholly-owned subsidiaries (the "Company") are unaudited and subject to
year-end adjustments. All material intercompany transactions and balances have
been eliminated. In the opinion of management, the interim financial statements
reflect all adjustments, consisting only of normal recurring adjustments unless
otherwise disclosed, necessary for a fair statement of the Company's financial
position and results of operations. Results for interim periods are not
necessarily indicative of results for the full year. Certain reclassifications
have been made to the prior year consolidated financial statements to conform
with the current year presentation. The consolidated financial statements have
been prepared in accordance with accounting principles generally accepted in the
United States of America ("GAAP"). The preparation of financial statements in
conformity with GAAP requires management to make certain 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 unaudited interim financial statements presented
herein should be read in conjunction with the Company's consolidated financial
statements filed in its Annual Report on Form 10-K for the year ended December
31, 2004.
The Company's assets currently consist primarily of cash and cash
equivalents, investment securities, and real estate owned. The Company's main
source of operating revenue is rental income earned on real estate owned. The
Company also earns non-operating revenue principally consisting of investment
earnings on investment securities and cash equivalents. The Company continues to
evaluate a number of possible acquisitions, and is engaged in the management of
its assets and liabilities, including the contingent assets, as described in
Part II - Item 1. The Company intends to aggressively contest all litigation and
contingencies, as well as pursue all sources for contributions to settlements.
See notes 6 and 7 below for a discussion of the Company's sale of a portion
of the real estate owned, which has been reclassified as real estate held for
sale in the accompanying Consolidated Balance Sheet as of June 30, 2005, and the
results of operations have been retroactively reclassified as discontinued
operations in the accompanying Consolidated Statement of Operations for the
periods presented in accordance with Financial Accounting Standards Board,
Statement of Financial Accounting Standards No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" ("SFAS 144").
The Company's management expects that operating cash needs for the
remainder of 2005 will be met principally by the receipt of non-operating
revenue consisting of investment earnings on investment securities and cash
equivalents, rental income received, and the Company's current financial
resources.
Note 2 - Recent Accounting Pronouncements
In October 2004, the Financial Accounting Standards board issued SFAS No.
123R (revised 2004), "Share-Based Payment" ("SFAS 123R"). SFAS 123R requires
companies to categorize share-based payments as either liability or equity
awards. For liability awards, companies will remeasure the award at fair value
at each balance sheet date until the award is settled. Equity classified awards
are measured at the fair value and are not remeasured. SFAS 123R will be
effective for annual periods beginning January 1, 2006. Awards issued, modified,
or settled after the effective date will be measured and recorded in accordance
with SFAS 123R. The Company believes that the implementation of this standard
will not have a material effect on the Company's consolidated financial position
or results of operations.
Note 3 - Legal Proceedings
For a discussion of the Company's legal proceedings, including a discussion
of the Company's Supervisory Goodwill litigation, see Part II - Item 1 - Legal
Proceedings.
Note 4 - Cash and Cash Equivalents
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.
AMBASE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note 5 - Investment Securities
Investment securities - held to maturity consist of U.S. Treasury Bills
with original maturities of one year or less and are carried at amortized cost
based upon the Company's intent and ability to hold these investments to
maturity.
Investment securities - available for sale, consist of investments in
equity securities held for an indefinite period and are carried at fair value
with net unrealized gains and losses recorded directly in a separate component
of stockholders' equity.
Investment securities consist of the following:
June 30, 2005 December 31, 2004
========================================= ======================================
Cost or Cost or
Carrying Amortized Fair Carrying Amortized Fair
(in thousands) Value Cost Value Value Cost Value
======== ========= ======= ======== ========= ======
Held to Maturity:
U.S. Treasury Bills...... $ 8,690 $ 8,690 $ 8,690 $ 8,590 $ 8,590 $ 8,586
Available for Sale:
Equity Securities......... 1,761 1,798 1,761 2,112 2,075 2,112
--------- --------- --------- ----------- ---------- -----------
$ 10,451 $10,488 $ 10,451 $ 10,702 $ 10,665 $ 10,698
========= ========= ========= =========== ========== ===========
The gross unrealized gains (losses) on investment securities, at June 30,
2005 and December 31, 2004 consist of the following:
(in thousands) 2005 2004
===== =====
Held to Maturity:
Gross unrealized losses....................................................... $ - $ (4)
====== ======
Available for Sale:
Gross unrealized gains........................................................ $ 18 $ 41
====== ======
Gross unrealized losses....................................................... $ (55) $ (4)
======= ======
AMBASE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
The realized gain on the sales of investment securities available for sale
for the second quarter and six months ended June 30, 2005 and June 30, 2004, are
as follows:
Second Quarter Six Months
(in thousands) 2005 2004 2005 2004
======= ===== ====== ======
Net sale proceeds................................................... $ - $ 836 $ 548 $ 8,273
Cost basis.......................................................... - (607) (528) (7,937)
------- -------- -------- --------
Realized gains...................................................... $ - $ 229 $ 20 $ 336
======= ======== ======== ========
During the six months ended June 30, 2004, the Company purchased and sold a
$7 million U.S. Treasury Note resulting in a gain of $89,000 which is included
in realized gains on investment securities in the Consolidated Statement of
Operations.
Note 6 - Real Estate Owned
As of June 30, 2005, the Company owned two commercial office buildings in
Greenwich, Connecticut that contain 14,500 and 38,000 square feet, respectively.
The Company utilizes a small portion of the office space in the first building
for its executive offices, with the remaining square footage available for lease
to unaffiliated third parties.
The buildings and improvements are carried at cost, net of accumulated
depreciation of $207,000 and $763,000 at June 30, 2005 and December 31, 2004,
respectively. Depreciation expense is recorded on a straight-line basis over 39
years. Tenant security deposits of $305,000 at June 30, 2005 and December 31,
2004, are included in other liabilities.
The Company earns rental income under operating leases with tenants.
Minimum lease rentals are recognized on a straight-line basis over the terms of
the leases. The cumulative difference between lease revenue recognized under
this method and the contractual lease payment terms is recorded as deferred rent
receivable and is included in other assets on the Consolidated Balance Sheets.
Revenue from tenant reimbursement of common area maintenance, utilities and
other operating expenses are recognized pursuant to the tenant's lease when
earned and due from tenants.
Included in property operating and maintenance are expenses for common area
maintenance, utilities, real estate taxes and other reimbursable operating
expenses, which have not been reduced by amounts reimbursable by tenants
pursuant to applicable lease agreements.
As further discussed in note 7 herein, in May 2005, the Company entered
into an agreement to sell its 38,000 square foot office building at Two
Soundview Drive in Greenwich, Connecticut ("Two Soundview"), originally
purchased in December 2002, to Ceruzzi Holdings, LLC, an unaffiliated third
party. As of June 30, 2005, the net carrying value of Two Soundview has been
reclassified as real estate held for sale in the Company's Consolidated Balance
Sheet. In accordance with the classification of Two Soundview as real estate
held for sale, the results of operations relating to Two Soundview for the
periods presented herein have been retroactively reclassified to discontinued
operations in accordance with SFAS 144.
In July 2005, the Company completed the sale of Two Soundview. The sale
price was $28 million less normal real estate closing adjustments. A gain from
the sale, of approximately $10 million, will be reflected in the Company's
financial statements for the quarterly period ending September 30, 2005.
AMBASE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note 7 - Real Estate Held for Sale, Net
As more fully discussed in note 6, the net carrying value of Two Soundview
has been reclassified as real estate held for sale as of June 30, 2005, and the
results of operations for Two Soundview for the periods presented have been
retroactively reclassified as discontinued operations. In July 2005, the Company
completed the sale of Two Soundview. A gain from the sale, of approximately $10
million, will be reflected in the Company's financial statements for the
quarterly period ending September 30, 2005.
The net carrying value of real estate held for sale is as follows:
(in thousands) June 30, 2005
=============
Land.......................................................... $ 6,400
Building and improvements..................................... 10,910
---------
17,310
Less: accumulated depreciation............................... (722)
---------
Carrying value, net........................................... $ 16,588
=========
Included in the Consolidated Balance Sheet at June 30, 2005, are other
assets and other liabilities relating to real estate held for sale. Other assets
includes $519,000 of deferred rental revenue resulting from the recognition of
rental revenue on a straight-line basis over the terms of tenant leases versus
contractual lease payment terms, and $38,000 of real estate commissions
previously capitalized. Other liabilities includes $305,000 of security
deposits held on behalf of tenants.
Income from discontinued operations is as follows:
Second Quarter Six Months
2005 2004 2005 2004
==== ==== ==== ====
(in thousands)
Revenues:
Rental income................................................. $ 530 $ 508 $ 1,060 $ 1,001
Operating expenses:
Professional and outside services............................. 11 12 22 20
Property operating and maintenance ........................... 98 93 201 179
Depreciation.................................................. 70 70 140 140
Insurance..................................................... 5 5 9 9
Other operating............................................... 1 1 2 3
------ ------- --------- ---------
Operating expenses............................................ 185 181 374 351
------ ------- --------- ----------
Income from discontinued operations........................... $ 345 $ 327 $ 686 $ 650
====== ====== ========= ==========
No adjustment for income taxes has been reflected in the income from
discontinued operations presented above as the Company has sufficient regular
net operating loss ("NOL") carryforwards and alternative minimum tax
carryforwards to offset the gain. The Company generated NOL's in all periods
presented, however, ultimate utilization of such NOL's before their expiration
is uncertain. Accordingly, the Company has reflected a full valuation allowance
on such tax assets and has not reflected any net tax benefit.
AMBASE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note 8 - Income Taxes
The Company and its 100% owned domestic subsidiaries file a consolidated
federal income tax return. The Company recognizes both the current and deferred
tax consequences of all transactions that have been recognized in the financial
statements, calculated based on the provisions of enacted tax laws, including
the tax rates in effect for current and future years. Net deferred tax assets
are recognized immediately when a more likely than not criterion is met; that
is, greater than 50% probability exists that the tax benefits will actually be
realized sometime in the future. The Company has calculated a net deferred tax
asset of $36 million and $34 million as of June 30, 2005 and December 31, 2004,
respectively, arising primarily from net operating loss ("NOL") carryforwards,
alternative minimum tax ("AMT") credits (not including the anticipated tax
effects of NOL's expected to be generated from the Company's tax basis in
Carteret Savings Bank, F.A. and subsidiaries ("Carteret"), resulting from the
election decision, as more fully described below). At the present time,
management has no basis to conclude that realization is more likely than not and
a valuation allowance has been recorded against net deferred tax assets.
As a result of the Office of Thrift Supervision's December 4, 1992
placement of Carteret in receivership, under the management of the Resolution
Trust Corporation ("RTC")/Federal Deposit Insurance Corporation ("FDIC"), and
then proposed Treasury Reg. ss.1.597-4(g), the Company had previously filed its
1992 and subsequent federal income tax returns with Carteret disaffiliated from
the Company's consolidated federal income tax return. Based upon the impact of
Treasury Reg. ss.1.597-4(g), which was issued in final form on December 20,
1995, a continuing review of the Company's tax basis in Carteret, and the impact
of prior year tax return adjustments on the Company's 1992 federal income tax
return as filed, the Company decided not to make an election pursuant to final
Treasury Reg. ss.1.597-4(g) to disaffiliate Carteret from the Company's
consolidated federal income tax return effective as of December 4, 1992 (the
"Election Decision").
The Company has made numerous requests to the RTC/FDIC for tax information
pertaining to Carteret and the resulting successor institution, Carteret Federal
Savings Bank ("Carteret FSB"); however, all of the information still has not
been received. Based on the Company's Election Decision, as described above, and
the receipt of some of the requested information from the RTC/FDIC, the Company
has amended its 1992 consolidated federal income tax return to include the
federal income tax effects of Carteret and Carteret FSB (the "1992 Amended
Return"). The Company is still in the process of amending its consolidated
federal income tax returns for 1993 and subsequent years.
The Company anticipates that, as a result of filing a consolidated federal
income tax return with Carteret FSB, a total of approximately $170 million of
tax NOL carryforwards will be generated from the Company's tax basis in
Carteret/Carteret FSB as tax losses are incurred by Carteret FSB of which $158
million are still available for future use. Based on the Company's filing of the
1992 Amended Return, approximately $56 million of NOL carryforwards are
generated for tax year 1992 which expire in 2007, with the remaining
approximately $102 million of NOL carryforwards to be generated, expiring no
earlier than 2008. These NOL carryforwards would be available to offset future
taxable income, in addition to the NOL carryforwards as further detailed below.
The Company can give no assurances with regard to the 1992 Amended Return, or
amended returns for subsequent years, or the final amount or expiration of NOL
carryforwards ultimately generated from the Company's tax basis in Carteret.
In March 2000, the Company filed several carryback claims and amendments to
previously filed carryback claims with the IRS (the "Carryback Claims") seeking
refunds from the IRS of alternative minimum tax and other federal income taxes
paid by the Company in prior years plus applicable IRS interest, based on the
filing of the 1992 Amended Return. In April 2003, IRS examiners issued a letter
to the Company proposing to disallow the Carryback Claims. The Company sought
administrative review of the letter by protesting to the Appeals Division of the
IRS. In February 2005, IRS Appeals Officials completed their review of the
Carryback Claims, and disallowed them. The Company is currently considering
whether to file suit for the tax refunds it seeks, plus interest, with respect
to the Carryback Claims. Even if the Company files suit, the Company can give no
assurances as to the final amounts of refunds, if any, or when they might be
received.
Based upon the Company's federal income tax returns as filed from 1993 to
2003 (subject to IRS audit adjustments), and excluding the NOL carryforwards
generated from the Company's tax basis in Carteret/Carteret FSB, as noted above,
at June 30, 2005, the Company has NOL carryforwards, aggregating approximately
$36 million, available to reduce future federal taxable income which expire if
unused beginning in 2008. The Company's federal income tax returns for years
subsequent to 1992 have not been reviewed by the IRS.
AMBASE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
The utilization of certain carryforwards is subject to limitations under
U.S. federal income tax laws. In addition, the Company has approximately $21
million of AMT credit carryforwards ("AMT Credits"), which are not subject to
expiration. Based on the filing of the Carryback Claims, as further discussed
above, the Company is seeking to realize approximately $8 million of the $21
million of AMT Credits.
The Company expects to utilize approximately $10 million of NOL
carryforwards and $10 million of AMT NOL carryforwards to fully offset any
taxable income generated from the sale of Two Soundview as discussed in notes 6
and 7 herein.
Note 9 - Comprehensive Income (Loss)
Comprehensive income (loss) is composed of net income (loss) and other
comprehensive income (loss) which includes the change in unrealized gains
(losses) on investment securities available for sale and recognition of
additional minimum pension liability, as follows:
Second Quarter Ended Six Months Ended
(in thousands) June 30, 2005 June 30, 2005
========================================== =======================================
Unrealized Minimum Accumulated Unrealized Minimum Accumulated
Gains (Losses) Pension Other Gains on Pension Other
Investment Liability Comprehensive Investment Liability Comprehensive
Securities Adjustment Income Securities Adjustment Income
=========== ========= =========== ========== ========== ===========
Balance beginning of period....$ (145) $ (412) $ (557) $ 37 $ (412) $ (375)
Reclassification adjustment for
gains realized in net loss... - - - (5) - (5)
Change during the period....... 108 - 108 (69) - (69)
--------- --------- ----------- ----------- ----------- ------------
Balance end of period..........$ (37) $ (412) $ (449) $ (37) $ (412) $ (449)
========= ========= =========== =========== =========== ===========
(in thousands) Second Quarter Ended Six Months Ended
June 30, 2004 June 30, 2004
============================= ==============================
Unrealized Accumulated Unrealized Accumulated
Gains (Losses) Other Gains (Losses) Other
on Investment Comprehensive on Investment Comprehensive
Securities Income Securities Income
=========== =========== ============= =============
Balance beginning of period............ $ 138 $ 138 $ 84 $ 84
Reclassification adjustment for gains
realized in net loss........... (52) (52) (71) (71)
Change during the period............... 60 60 133 133
----------- ----------- ------------- -------------
Balance end of period.................. $ 146 $ 146 $ 146 $ 146
=========== =========== ============= =============
AMBASE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note 10 - Stock Based Compensation
The Company has adopted the disclosure requirements of Financial Accounting
Standards Board, Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" ("Statement 123"), but continues to
account for stock compensation using APB Opinion 25, "Accounting for Stock
Issued to Employees" ("APB 25"), making pro forma disclosures of net income
(loss) and earnings per share as if the fair value based method had been
applied. No compensation expense, attributable to stock incentive plans, has
been charged to earnings.
The Black-Scholes option pricing model was used to estimate the fair value
of the options at date of grant based on various factors including dividend
yield, stock price volatility, interest rates, and expected life of options.
The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options, which have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, and
given the changes in the price per share of the Company's Common Stock, in
management's opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options.
For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. If the Company
had elected to recognize compensation cost for stock options based on the fair
value at date of grant for stock options, consistent with the method prescribed
by Statement 123, net loss and net loss per share would have been changed to the
pro forma amounts indicated below.
Second Quarter Ended Six Months Ended
-------------------------- ------------------------------
June 30, June 30, June 30, June 30,
(in thousands, except per share data) 2005 2004 2005 2004
======== ======== ======== ========
Loss from continuing operations, as reported...... $ (1,725) $ (941) $ (3,297) $ (1,994)
Income from discontinued operations, as reported.. 345 327 686 650
-------- -------- --------- ---------
Net loss, as reported............................. (1,380) (614) (2,611) (1,344)
Pro forma adjustments:
Deduct: pro forma stock based compensation expense for
stock options pursuant to Statement 123......... (32) (20) (63) (39)
-------- -------- --------- ---------
Net loss, pro forma............................... $ (1,412) $ (634) $ (2,674) $ (1,383)
======== ======== ========= =========
Per share data:
Basic:
Loss from continuing operations, as reported...... $ (0.04) $ (0.02) $ (0.07) $ (0.04)
Income from discontinued operations, as reported.. 0.01 0.01 0.01 0.01
-------- -------- --------- ---------
Net loss, as reported............................. $ (0.03) $ (0.01) $ (0.06) $ (0.03)
======== ======== ========= =========
Net loss, pro forma.............................. $ (0.03) $ (0.01) $ (0.06) $(0.03)
======== ======== ========= =========
Assuming dilution:
Loss from continuing operations, as reported...... $ (0.04) $ (0.02) $ (0.07) $ (0.04)
Income from discontinued operations, as reported.. 0.01 0.01 0.01 0.01
-------- ------- --------- ---------
Net loss, as reported............................. $ (0.03) $ (0.01) $ (0.06) $ (0.03)
======== ======= ========= =========
Net loss, pro forma............................... $ (0.03) $ (0.01) $ (0.06) $ (0.03)
======== ======= ========= =========
Options to purchase 1,440,000 shares of common stock for the second quarter
and six months ended June 30, 2005, and 1,290,000 shares of common stock for the
second quarter and six months ended June 30, 2004, were excluded from the
computation of diluted earnings per share because these options were
antidilutive.
AMBASE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note 11 - Pension and Savings Plans
The Company sponsors a non-qualified supplemental retirement plan
("Supplemental Plan") under which only one current executive officer of the
Company is a participant. The cost of the Supplemental Plan is actuarially
determined and is accrued but not funded.
Pension expense for the Supplemental Plan was as follows:
Second Quarter Ended Six Months Ended
------------------------- --------------------------
June 30, June 30, June 30, June 30,
(in thousands) 2005 2004 2005 2004
======== ======== ======== ========
Service cost of current period................................ $ 258 $ 230 $ 515 $ 460
Interest cost on projected benefit obligation................. 192 172 384 344
Amortization of unrecognized losses........................... 72 39 144 79
-------- -------- -------- --------
$ 522 $ 441 $ 1,043 $ 883
======== ======== ======== ========
The Company sponsors the AmBase 401(k) Savings Plan (the "Savings Plan"),
which is a "Section 401(k) Plan" within the meaning of the Internal Revenue Code
of 1986, as amended (the "Code"). The Savings Plan permits eligible employees to
make contributions of up to 15% of compensation, which are matched by the
Company at a percentage determined annually. The employer match is currently
100% of the employee's compensation eligible for deferral. Employee
contributions to the Savings Plan are invested at the employee's discretion, in
various investment funds. The Company's matching contributions are invested in
the same manner as the compensation reduction contributions. The Company's
matching contributions to the Savings Plan, charged to expense, were $3,000 and
$48,000 for the second quarter and six months ended June 30, 2005, respectively
and $3,000 and $43,000 for the second quarter and six months ended June 30, 2004
respectively. All contributions are subject to maximum limitations contained in
the Code.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
From time to time, the Company may publish "Forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or make oral statements that constitute forward-looking
statements. The forward-looking statements may relate to such matters as
anticipated financial performance, future revenues or earnings, business
prospects, projected ventures, anticipated market performance, anticipated
litigation results or the timing of pending litigation, and similar matters. The
Private Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements. In order to comply with the terms of the safe
harbor, the Company cautions readers that a variety of factors could cause the
Company's actual results to differ materially from the anticipated results or
other expectations expressed in the Company's forward-looking statements. These
risks and uncertainties, many of which are beyond the Company's control,
include, but are not limited to: (i) transaction volume in the securities
markets; (ii) the volatility of the securities markets; (iii) fluctuations in
interest rates; (iv) changes in occupancy rates or real estate value; (v)
changes in regulatory requirements which could affect the cost of doing
business; (vi) general economic conditions; (vii) changes in the rate of
inflation and the related impact on the securities markets; (viii) changes in
federal and state tax laws; and (ix) risks arising from unfavorable decisions in
our current material litigation matters, or unfavorable decisions in other
supervisory goodwill cases. The Company does not undertake any obligation to
update or revise any forward-looking statements whether as a result of future
events, new information or otherwise.
Management's Discussion and Analysis of Financial Condition and Results of
Operations, which follows, should be read in conjunction with the consolidated
financial statements and related notes, which are contained in Part I - Item 1,
herein. As a result of the previously announced sale of the Company's 38,000
square foot office building at Two Soundview Drive in Greenwich, CT ("Two
Soundview"), the net carrying value of Two Soundview has been reclassified as
real estate held for sale in the accompanying Consolidated Balance Sheet as of
June 30, 2005 and Consolidated Statements of Operations for the periods
presented have been retroactively reclassified to report the income from
discontinued operations separately from the results of continuing operations.
See Part I - Item 1 - notes 6 and 7 for additional information concerning the
sale of Two Soundview in July 2005.
LIQUIDITY AND CAPITAL RESOURCES
The Company's assets at June 30, 2005, aggregated $36,695,000 consisting
principally of cash and cash equivalents of $6,751,000, investment securities of
$10,451,000 and real estate owned of $18,835,000. At June 30, 2005, the
Company's liabilities aggregated $13,806,000. Total stockholders equity was
$22,889,000.
The liability for the supplemental retirement plan (the "Supplemental
Plan"), which is accrued but not funded, increased to $12,637,000 at June 30,
2005 from $11,594,000 at December 31, 2004. The Supplemental Plan liability
reflects the actuarially determined accrued pension costs in accordance with
GAAP. The increased liability is the result of additional accrued service
vesting, interest cost on the liability and utilization of an updated mortality
table. The Supplemental Plan liability is further affected by changes in
discount rates and experience which could be different from that assumed. See
Part I - Item 1, note 11 for a further discussion of the Supplemental Plan.
At June 30, 2005, the Company's accrual for its Supplemental Plan was $12.6
million. The Personnel Committee of the Company is continuing to review the
Supplemental Plan and the Company's related liability. In connection with this
review, the Company is considering various options, including termination and/or
curtailment of the Supplemental Plan. If the Supplemental Plan was terminated,
curtailed and/or paid out in a lump sum during 2005, the Company may increase
its accrual for the Supplemental Plan by a one-time charge of approximately $3.0
million, subject to the accounting rules relevant to the transaction, thereby
increasing the Company's Supplemental Plan liability and decreasing the
Company's stockholder's equity. The potential termination, curtailment and/or
lump sum payment of the Supplemental Plan has not been reflected in the
financial statements presented herein, as such transaction is still under review
and has not been approved. If the transaction was completed, the aggregate
accrual for the Supplemental Plan would be approximately $15.6 million.
For the six months ended June 30, 2005, cash of $3,651,000 was used by
operations, including the payment of prior year accruals and operating expenses,
partially offset by the receipt of rental income, interest income and investment
earnings. The cash needs of the Company for the first six months of 2005 were
satisfied by the receipt of rental income, interest income received on
investment securities and cash equivalents, and to a lesser extent the Company's
current financial resources. Management believes that the Company's cash
resources are sufficient to continue operations for 2005.
In March 2005, the Company paid $1,867,000 of previously incurred legal
fees and other expenses relating to the Company's defense of a withholding
obligation issue with the Internal Revenue Service ("IRS") which was
successfully concluded in October 2001. The Company had previously accrued these
costs which were reflected in other liabilities in prior period financial
statements.
For the six months ended June 30, 2004, cash of $1,411,000 was used by
operations, including the payment of prior year accruals and operating expenses
partially offset by the receipt of rental income, interest income, and
investment earnings.
The Company continues to evaluate a number of possible acquisitions and is
engaged in the management of its assets and liabilities, including the
contingent assets. Discussions and negotiations are ongoing with respect to
certain of these matters. The Company intends to aggressively contest all
litigation and contingencies, as well as pursue all sources for contributions to
settlements. For a discussion of lawsuits and proceedings, including the
Supervisory Goodwill litigation see Part II - Item 1 - Legal Proceedings.
As of June 30, 2005, the Company owned two commercial office buildings in
Greenwich, Connecticut. One building is approximately 14,500 square feet and is
available for lease to unaffiliated third parties with approximately 3,500
square feet utilized by the Company for its executive offices. The second
building, approximately 38,000 square feet, was sold in July 2005. See Part I -
Item 1 - notes 6 and 7 for further information concerning the sale of the
Company's 38,000 square foot building in July 2005.
The Company made no purchases of common stock pursuant to its common stock
repurchase plan during the first six months of 2005. There are no material
commitments for capital expenditures as of June 30, 2005. Inflation has had no
material impact on the business and operations of the Company.
Results of Operations for the Second Quarter and Six Months ended June 30,
2005 vs. the Second Quarter and Six Months Ended June 30, 2004
The Company's main source of operating revenue is rental income earned on
real estate owned. The Company also earns non-operating revenue consisting
principally of investment earnings on investment securities and cash
equivalents. The Company's management expects that operating cash needs for the
remainder of 2005 will be met principally by the receipt of non-operating
revenue consisting of interest income earned on investment securities and cash
equivalents, the Company's current financial resources, and rental income on
real estate owned.
For the second quarter and six months ended June 30, 2005, the Company
earned rental income from real estate owned of $43,000 and $86,000,
respectively, as compared to $48,000 and $90,000 for the second quarter and six
months ended June 30, 2004, respectively.
Compensation and benefits increased to $1,105,000 in the second quarter and
$2,275,000 in the six months ended June 30, 2005, respectively, compared with
$1,026,000 and $2,109,000 in respective 2004 periods. The increases were
principally the result of a higher level of benefits costs and accruals.
Included in compensation and benefits is an accrual for the Supplemental
Retirement Plan of $522,000 and $1,043,000 for the second quarter and six month
period ended June 30, 2005, respectively, compared to $441,000 and $883,000,
respectively, for the same 2004 periods.
Professional and outside services increased to $661,000 and $1,114,000 in
the second quarter and six months ended June 30, 2005, compared to $172,000 and
$272,000 in the respective 2004 periods. The increases in the 2005 second
quarter and six month periods as compared to the respective 2004 periods is
principally due to increased legal fees relating to the Supervisory Goodwill
litigation proceeding during 2005 and, to a lesser extent, other corporate
professional fees.
Property operating and maintenance expenses were $42,000 and $70,000 for
the second quarter and six months ended June 30, 2005, respectively, compared to
$21,000 and $48,000 in the respective 2004 periods. The increased expenses in
2005 compared to the 2004 periods are generally due to increased cost of
building repairs and maintenance. Property operating and maintenance expenses
have not been reduced by tenant reimbursements.
Interest income in the second quarter and six months ended June 30, 2005,
increased to $146,000 and $271,000, respectively, from $123,000 and $238,000, in
the respective 2004 periods. The increase is principally due to an increased
yield on the investments, classified as investments available for sale.
No investment securities available for sale were sold in the second quarter
ended June 30, 2005. For the six months ended June 30, 2005, realized gains on
sales of investment securities available for sale were $20,000. For the second
quarter and six months ended June 30, 2004, realized gains on investment
securities available for sale were $229,000 and $336,000, respectively.
The income tax provisions of $30,000 and $60,000 for the second quarter and
six months ended June 30, 2005, respectively, and $30,000 and $60,000 the second
quarter and six months ended June 30, 2004, respectively, are primarily
attributable to a provision for a minimum tax on capital to the state of
Connecticut. Income taxes applicable to operating income (loss) are generally
determined by applying the estimated effective annual income tax rates to pretax
income (loss) for the year-to-date interim period. Income taxes applicable to
unusual or infrequently occurring items are provided in the period in which such
items occur.
DISCONTINUED OPERATIONS
As discussed in Part I - Item 1 notes 6 and 7, in July 2005, the Company
completed the sale of Two Soundview. The sale price was $28 million less normal
real estate closing adjustments. A gain from the sale, of approximately $10
million, will be reflected in the Company's financial statements for the
quarterly period ending September 30, 2005.
Income from discontinued operations increased to $345,000 and $686,000 for
the second quarter and six months ended June 30, 2005, respectively compared
with $327,000 and $650,000 for the comparable 2004 periods, principally as a
result of increased rental income earned in the 2005 periods.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company holds short-term investments as a source of liquidity. The
Company's interest rate sensitive investments at June 30, 2005 and December 31,
2004 with maturity dates of less than one year consist of the following:
2005 2004
================= =================
Carrying Fair Carrying Fair
Value Value Value Value
(in thousands) -------- ----- -------- -----
U.S. Treasury Bills......................... $ 8,690 $ 8,690 $ 8,590 $ 8,586
======== ======= ======== =======
Weighted average interest rate.............. 2.67% 1.71%
======== ========
The Company's current policy is to minimize the interest rate risk of its
short-term investments by investing in U.S. Treasury Bills with maturities of
less than one year. There were no significant changes in market exposures or the
manner in which interest rate risk is managed during the period.
The Company's portfolio of equity securities has exposure to equity price
risk. Equity price risk is defined as the potential loss in fair value resulting
from an adverse change in prices. The equity securities are primarily in the
form of preferred stock in utility companies. The equity securities are held for
an indefinite period and are carried at fair value with net unrealized gains and
losses recorded directly in a separate component of stockholder's equity.
The table below summarizes the Company's equity price risk and shows the
effect of a hypothetical 20% increase and 20% decrease in market price as of the
dates indicated below. The selected hypothetical changes are for illustrative
purposes only and are not necessarily indicative of the best or worse case
scenarios.
(in thousands) June 30, December 31,
2005 2004
Equity Securities Available for Sale: ======== ============
Fair value ...................................................... $ 1,761 $ 2,112
======== ============
Hypothetical fair value at a 20% increase in market price........ $ 2,113 $ 2,534
======== ============
Hypothetical fair value at a 20% decrease in market price........ $ 1,409 $ 1,690
======== ============
Item 4. CONTROLS AND PROCEDURES
The Company maintains disclosure controls and procedures that are designed
to ensure that information required to be disclosed in the Company's Exchange
Act reports is recorded, processed, summarized and reported within the time
periods specified in the SEC'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). In designing and evaluating the
disclosure controls and procedures, management 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 was required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.
The Company carried out an evaluation, under the supervision and with the
participation of the Company's management, including the Company's Chief
Executive Officer and the Company's Chief Financial Officer, of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures as of June 30, 2005. Based on the foregoing, the Company's Chief
Executive Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures were effective.
There have been no significant changes in the Company's internal controls
or other factors that could significantly affect the internal controls
subsequent to the date the Company completed its evaluation.
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 stock holdings,
should be directed to:
American Stock Transfer and Trust Company
59 Maiden Lane
New York, NY 10038
Attention: Shareholder Services
(800) 937-5449 or (718) 921-8200 Ext. 6820
Copies of Quarterly reports on Form 10-Q, Annual Reports on Form 10-K and
Proxy Statements can also be obtained directly from the Company free of charge
by sending a request to the Company by mail as follows:
AmBase Corporation
100 Putnam Green, 3rd Floor
Greenwich, CT 06830
Attn: Shareholder Services
In addition, the Company'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 Internet
at www.sec.gov. Materials filed with the SEC may also be read or copied by
visiting the SEC's Public Reference Room, 450 Fifth Street, NW, Washington, DC
20549. Information on the operation of the Public Reference Room may be obtained
by calling 1-800-SEC-0330.
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
The information contained in Item 8 - Note 10 in AmBase's Annual Report on
Form 10-K for the year ended December 31, 2004, is incorporated by reference
herein and the defined terms set forth below have the same meaning ascribed to
them in that report. There have been no material developments in such legal
proceedings, except as set forth below.
The Company is or has been a party in a number of lawsuits or proceedings,
including the following:
Supervisory Goodwill Litigation. In April 2005, Judge Smith heard oral
argument on the United States Department of Justice and the FDIC motions
requesting that Judge Smith certify for immediate appeal his ruling that the
Company is entitled to challenge the validity of the receivership deficit.
Because Judge Smith's ruling on the receivership deficit issue is not a final
order, both Judge Smith and the Court of Appeals for the Federal Circuit would
have to agree to an appeal of that issue at this time. Following the April 2005
oral argument, Judge Smith entered an order, on April 25, 2005, staying
resolution of the motions to certify an interlocutory appeal pending the holding
of a "show cause" hearing. Judge Smith indicated at the oral argument that the
purpose of the show cause hearing was to allow the Company to outline the
evidence and arguments it was prepared to offer in order to challenge the
validity and size of the receivership deficit. Judge Smith directed the parties
to attempt to reach agreement regarding a schedule for the completion of
discovery on receivership deficit issues, and he directed the parties to submit
to the Court such an agreed proposed discovery schedule, or, if the parties are
unable to reach agreement, separate proposed schedules for discovery, in early
May 2005. Judge Smith further encouraged the parties to discuss the procedures
and schedule for the show cause hearing, and to provide the Court with a
proposed order on such matters.
In accordance with the Court's direction, the parties agreed upon a
schedule for the completion of fact discovery and procedures for the show cause
proceeding. In accordance with the parties' agreement, Judge Smith entered an
order on May 23, 2005, providing that fact discovery would be completed within
45 days of the completion of document production by the Government. The May 23,
2005 order further provides that (i) 45 days after the close of discovery, the
Company is to file a statement of issues summarizing the respects in which the
receivership books allegedly overstate or misstate the receivership deficit;
(ii) 45 days after the filing of the Company's statement of issues, the United
States and the FDIC are to file responses; and (iii) 15 days after the filing of
such responses, the Company is to file a reply. In the event the Company
determines that it will rely upon expert testimony regarding the receivership
issue, the May 23, 2005 order provides for a schedule governing the submission
of expert reports or affidavits by the parties and depositions of such experts.
Finally, the May 23, 2005 order schedules a telephonic status conference to be
held on September 15, 2005 to discuss the status of the case. Because the
Government has not yet completed the production of documents requested by the
Company in discovery, it is not yet known when either fact discovery or briefing
on the show cause proceeding will be completed. No assurance can be given
regarding the ultimate outcome of the litigation.
The Court of Claims decisions in the Company's case, as well as other
decisions in Winstar-related cases, are publicly available and may be relevant
to the Company's Supervisory Goodwill claims, but are not necessarily indicative
of the ultimate outcome of the Company's actions.
Litigation with SDG, Inc. In September 2000, the Company filed a lawsuit in
the United States District Court for the District of Connecticut (Case No.
3:00CV1694 (DJS)) (the"Court") against SDG, Inc. ("SDG") and certain of its
officers and directors to pursue various claims against such parties, including,
but not limited to, the claims that SDG failed to honor a binding contract which
granted the Company the right to act as the exclusive investment
banking/financial advisor to SDG, and its subsidiaries and affiliates. SDG filed
various counterclaims. On August 3, 2005, the Court issued its decision denying
all the Company's claims and the defendants' counterclaims. The Company is
presently reviewing its options. The Company will continue to monitor the status
of SDG and its subsidiary, AMDG, Inc. No assurances can be given regarding the
ultimate outcome of this litigation.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's annual meeting of stockholders on May 20, 2005, a vote was
taken for the election of two Directors of the Company to hold office for a
three year term and until their successors shall have been duly elected. The
aggregate number of shares of Common Stock voted in person or by proxy for the
nominees were as follows:
Nominee For Withheld
================ ========== =========
Richard A. Bianco 32,664,939 3,592,106
John B. Costello 32,667,212 3,489,833
There were no broker non-votes. The terms of directors Robert E. Long and
Michael L. Quinn continued after the meeting.
A vote was also taken on the proposal to ratify the appointment of
PricewaterhouseCoopers LLP as the independent accountants for the Company for
the year ending December 31, 2005. The aggregate numbers of shares of Common
Stock voted in person or by proxy were as follows:
For Against Abstain
========== ========= =========
34,225,846 301,440 1,729,759
There were no broker non-votes.
The foregoing proposals are described more fully in the Company's
definitive proxy statement, filed with the Securities and Exchange Commission on
April 1, 2005 pursuant to Section 14(a) of the Securities Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
Item 6. EXHIBITS
Exhibit 31.1 Rule 13a-14(a) Certification of Chief Executive Officer
Exhibit 31.2 Rule 13a-14(a) Certification of Chief Financial Officer
Exhibit 32.1 Section 1350 Certification of Chief Executive Officer
Exhibit 32.2 Section 1350 Certification of Chief Financial Officer
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMBASE CORPORATION
/s/ John P. Ferrara
- ------------------------------------------------------
By JOHN P. FERRARA
Vice President, Chief Financial Officer and Controller
(Duly Authorized Officer and Principal Financial and
Accounting Officer)
Date: August 12, 2005