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ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE
SECURITIES EXCHANGE ACT OF 1934
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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(State of incorporation)
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(I.R.S. Employer Identification No.)
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Yes
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☐ | ☒ |
Yes
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☐ | ☒ |
(Check one):
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Large Accelerated Filer
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☐ |
Accelerated Filer
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☐ |
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☒
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Smaller Reporting Company
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Emerging Growth Company
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||||||||||
YES
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☐ |
NO
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☐ |
YES
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NO
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☒ |
PART I
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Page
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Item 1.
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1
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Item 1A.
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2
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Item 1B.
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8
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Item 2.
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8
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Item 3.
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8
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Item 4.
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8
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PART II
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Item 5.
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8
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Item 6.
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9
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Item 7.
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9
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Item 8.
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14
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Item 9.
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35
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Item 9A.
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35
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Item 9B.
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35
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Item 9C.
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36
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PART III
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Item 10.
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36
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Item 11.
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36
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Item 12.
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36
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Item 13.
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36
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Item 14.
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36
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PART IV
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Item 15.
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37
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Item 16.
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38
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ITEM 1. |
BUSINESS
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American Stock Transfer & Trust Company, LLC
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6201 15th Avenue
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Brooklyn, NY 11219
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Attention: Shareholder Services
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(800) 937-5449 or (718) 921-8200 Ext. 6820
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AmBase Corporation
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12 Lincoln Blvd., Suite 202
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Emerson, NJ 07630
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Attn: Shareholder Services
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ITEM 1A. |
RISK FACTORS
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- |
funds may be expended and management’s time devoted to projects that may not be completed,
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- |
required approvals may not be obtained from governmental entities or other third parties,
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- |
construction costs of a project may exceed original estimates, negatively impacting the economic feasibility of the project,
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- |
projects may be delayed due to, without limitation, adverse weather conditions, labor or material shortages,
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- |
occupancy rates and rents at a completed project may be less than anticipated, and
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- |
expenses at completed development projects may be higher than anticipated.
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- |
deterioration in regional and local economic and real estate market conditions,
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- |
failure to complete construction and lease-up on schedule or within budget may increase debt service expense and construction and other costs,
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- |
increased operating costs, including insurance premiums, utilities and real estate taxes, due to inflation and other factors which may not necessarily be offset by increased rents,
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- |
changes in interest rate levels and the availability of financing,
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- |
fluctuations in tourism patterns,
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- |
adverse changes in laws and regulations (including tax, environmental, zoning and building codes, landlord/tenant and other housing laws and regulations) and agency or court interpretations of such
laws and regulations and the related costs of compliance,
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- |
potential changes in supply of, or demand for rental properties similar to the Company’s,
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- |
competition for tenants and changes in rental rates,
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- |
concentration in a single real estate asset and class,
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- |
needs for additional capital which may be required for needed development or repositioning of one or more real estate assets may exceed the Company’s abilities or its desired minimum level of liquidity,
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- |
difficulty in reletting properties on favorable terms or at all,
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- |
impairments in the Company’s ability to collect rent payments when due,
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- |
the potential for uninsured casualty and other losses,
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- |
the impact of present or future environmental legislation and compliance with environmental laws,
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- |
changes in federal or state tax laws, and
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- |
acts of terrorism and war.
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ITEM 1B. |
UNRESOLVED STAFF COMMENTS
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ITEM 2. |
PROPERTIES
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ITEM 3. |
LEGAL PROCEEDINGS
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ITEM 4. |
MINE SAFETY DISCLOSURES
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ITEM 5. |
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES
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ITEM 6. |
[RESERVED]
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ITEM 7. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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Years Ended December 31,
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||||||||
2021
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2020
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|||||||
Operating expenses:
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||||||||
Compensation and benefits
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$
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$
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||||
Professional and outside services
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|
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||||||
Property operating and maintenance
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||||||
Insurance
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||||||
Other operating
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||||||
Total operating expenses
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||||||
Operating income (loss)
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(
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)
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(
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)
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||||
Interest income
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|
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||||||
Income (loss) before income taxes
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(
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)
|
(
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)
|
||||
Income tax expense (benefit)
|
|
(
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)
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|||||
Net income (loss)
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$
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(
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)
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$
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(
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)
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||
Net income (loss) per common share - basic
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$
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(
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)
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$
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(
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)
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||
Weighted average common shares outstanding - basic
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Assets:
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December 31,
2021
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December 31,
2020
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||||||
Cash and cash equivalents
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$
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$
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||||
Other assets
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|
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||||||
Total assets
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$
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$
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||||
Liabilities and Stockholders’ Equity:
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||||||||
Liabilities:
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||||||||
Accounts payable and accrued liabilities
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$
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$
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||||
Total liabilities
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|
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||||||
Commitments and contingencies (Note 6)
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||||||||
Stockholders’ equity:
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||||||||
Common stock ($
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||||||
Additional paid-in capital
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|
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||||||
Accumulated deficit
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(
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)
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(
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)
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||||
Treasury stock, at cost – 2021 -
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(
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)
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(
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)
|
||||
Total stockholders’ equity
|
|
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||||||
Total liabilities and stockholders’ equity
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$
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$
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(in thousands)
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Common
stock
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Additional
paid-in
capital
|
Accumulated
deficit
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Treasury
stock
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Total
|
|||||||||||||||
January 1, 2020
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$
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$
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$
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(
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)
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$
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(
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)
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$
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|
||||||||
Net income (loss)
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|
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(
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)
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(
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)
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|||||||||||||
December 31, 2020
|
|
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(
|
)
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(
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)
|
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|||||||||||||
Net income (loss)
|
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||
December 31, 2021
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$
|
|
$
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$
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(
|
)
|
$
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(
|
)
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$
|
|
Years Ended December 31,
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||||||||
(in thousands)
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2021
|
2020
|
||||||
Cash flows from operating activities:
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||||||||
Net income (loss)
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$
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(
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)
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$
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(
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)
|
||
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities
|
||||||||
Changes in operating assets and liabilities:
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||||||||
Federal income tax receivable – refunds received
|
|
|
||||||
Other assets
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(
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)
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(
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)
|
||||
Accounts payable and accrued liabilities
|
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(
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)
|
|||||
Net cash provided (used) by operating activities
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(
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)
|
|
|||||
Net change in cash and cash equivalents
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(
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)
|
|
|||||
Cash and cash equivalents at beginning of year
|
|
|
||||||
Cash and cash equivalents at end of year
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$
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$
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|
||||
Supplemental cash flow disclosure:
|
||||||||
Income taxes refunded (paid)
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$
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|
$
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|
||||
Supplemental cash flow disclosure of non-cash operating activities:
|
||||||||
Deferred tax asset reclassified to federal income tax receivable
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$
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|
$
|
|
($ in thousands)
|
||||
Company’s aggregate initial investment
|
$
|
|
||
Company’s aggregate initial membership interest %
|
|
%
|
||
Other members and Sponsor initial investment
|
$
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|
($ in thousands)
|
Year Ended
December 31,
2021
|
Year Ended
December 31,
2020
|
||||||
Company matching contributions
|
$
|
|
$
|
|
||||
Employer match %
|
|
%
|
|
%
|
(shares in thousands)
|
December 31,
2021
|
December 31,
2020
|
||||||
Par value
|
$
|
|
$
|
|
||||
Authorized shares
|
|
|
||||||
Issued shares
|
|
|
||||||
Outstanding shares
|
|
|
(shares in thousands)
|
December 31,
2021
|
December 31,
2020
|
||||||
Par value
|
$
|
|
$
|
|
||||
Authorized shares
|
|
|
||||||
Issued shares
|
|
|
||||||
Outstanding shares
|
|
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(in thousands)
|
Year Ended
December 31,
2021
|
Year Ended
December 31,
2020
|
||||||
Common stock outstanding at beginning of period
|
|
|
||||||
Common stock repurchased for treasury
|
|
|
||||||
Issuance of treasury stock
|
|
|
||||||
Common stock outstanding at end of period
|
|
|
(in thousands)
|
Year Ended
December 31,
2021
|
Year Ended
December 31,
2020
|
||||||
Treasury stock held at beginning of period
|
|
|
||||||
Common stock repurchased for treasury
|
|
|
||||||
Issuance of treasury stock
|
|
|
||||||
Treasury stock held at end of period
|
|
|
(in thousands)
|
Year Ended December 31, 2021
|
|||
Common shares repurchased to treasury during the period
|
|
|||
Aggregate cost of shares repurchased during the period
|
$
|
|
(in thousands)
|
December 31,
2021
|
|||
Total number of common shares authorized for repurchase
|
|
|||
Total number of common shares repurchased to date
|
|
|||
Total number of shares that may yet be repurchased
|
|
($ in thousands)
|
Year Ended
December 31, 2021
|
Year Ended
December 31, 2020
|
||||||
Rent expense
|
$
|
|
$
|
|
||||
Approximate square feet of leased office space
|
|
|
(in thousands)
|
Year Ended
December 31,
2021
|
Year Ended
December 31,
2020
|
||||||
Federal - current
|
$
|
|
$
|
(
|
)
|
|||
State - current
|
|
|
||||||
Total current
|
|
(
|
)
|
|||||
Federal - deferred
|
(
|
)
|
(
|
)
|
||||
State - deferred
|
(
|
)
|
(
|
)
|
||||
Change in valuation allowance
|
|
|
||||||
Total deferred
|
|
|
||||||
Income tax expense (benefit)
|
$
|
|
$
|
(
|
)
|
(in thousands)
|
Year Ended
December 31,
2021
|
Year Ended
December 31,
2020
|
||||||
Income (loss) before income taxes
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Tax expense (benefit) :
|
||||||||
Tax at statutory federal rate
|
$
|
(
|
)
|
$
|
(
|
)
|
||
State income taxes
|
(
|
)
|
(
|
)
|
||||
Permanent items, tax credits and other adjustments
|
|
(
|
)
|
|||||
Deferred true-ups
|
|
|
||||||
Change in valuation allowance
|
|
|
||||||
Income tax expense (benefit)
|
$
|
|
$
|
(
|
)
|
Year Ended
December 31,
2021
|
Year Ended
December 31,
2020
|
|||||||
Tax at statutory federal rate
|
|
% |
|
% | ||||
State income taxes
|
|
|
||||||
Permanent difference, tax credits and other adjustments
|
|
|
||||||
Change in valuation allowance
|
(
|
)%
|
(
|
)%
|
||||
Effective income tax rate
|
|
|
(in thousands) |
December 31,
2021
|
December 31,
2020
|
||||||
Deferred tax asset
|
$
|
|
$
|
|
||||
Valuation allowance
|
(
|
)
|
(
|
)
|
||||
Net deferred tax asset recognized
|
$
|
|
$
|
|
|
(i) |
first,
|
|
(ii) |
thereafter, any additional amounts shall be distributed (a)
|
ITEM 9. |
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A. |
CONTROLS AND PROCEDURES
|
ITEM 9B. |
OTHER INFORMATION
|
ITEM 9C. |
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
|
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11. |
EXECUTIVE COMPENSATION
|
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14. |
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
1. Index to Financial Statements:
|
Page
|
|
Report of Independent Registered Public Accounting Firm
|
14
|
|
Consolidated Statements of Operations
|
15
|
|
Consolidated Balance Sheets
|
16
|
|
Consolidated Statements of Changes in Stockholders’ Equity
|
17
|
|
Consolidated Statements of Cash Flows
|
18
|
|
Notes to Consolidated Financial Statements
|
19
|
Restated Certificate of Incorporation of AmBase Corporation (as amended and restated – July 15, 2017), (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the year
ended December 31, 2017).
|
||
By-Laws of AmBase Corporation (as amended through March 15, 1996), (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017).
|
||
Amended & Restated Rights Agreement dated as of March 27, 2019 between the Company and American Stock Transfer and Trust Co. (incorporated by reference to Exhibit 4.1 to the Company’s Annual Report on
Form 10-K for the year ended December 31, 2018).
|
||
Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934. (incorporated by reference to Exhibit 4.2 to the Company’s Annual Report on Form 10-K for the year ended
December 31, 2019).
|
||
Employment Agreement dated as of March 30, 2006 between Richard A. Bianco and the Company, (incorporated by reference to Exhibit 10H to the Company’s Annual Report on Form 10-K for the year ended December
31, 2005).
|
||
Amendment to Employment Agreement dated as of January 1, 2008 between Richard A. Bianco and the Company, (incorporated by reference to Exhibit 10E to the Company’s Annual Report on Form 10-K for the year
ended December 31, 2007).
|
||
Amendment to Employment Agreement between Richard A. Bianco and the Company extending term of employment to May 31, 2023, (incorporated by reference to Exhibit 10.6 to the Company’s Annual Report on Form
10-K for the year ended December 31, 2017).
|
||
111 West 57th Partners LLC Limited Liability Company Agreement. Dated as of June 28, 2013, (incorporated by reference to
Exhibit 10.1 to Amendment no. 1 to the Company’s Quarterly Report on Form 10-Q/A for the quarterly period ended June 30, 2013).
|
||
Second Amended and Restated Limited Liability Company Agreement of 111 West 57th Investment, LLC dated December 19, 2014
(incorporated by reference to Exhibit 10.8 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014).
|
||
Agreement between Mr. Richard A. Bianco, the Company’s Chairman President and Chief Executive Officer (“Mr. 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 (incorporated by reference to
Exhibit 10.9 to the Company’s Annual Report on Form 10-K for the annual period ending December 31, 2016).
|
||
Amendment dated May 20, 2019 to the September 2017 Litigation Funding Agreement, between Mr. R. A. Bianco and the Company, (incorporated by reference to Exhibit 10.1 to the Company’s Current report on
Form 8-K filed May 21, 2019).
|
||
August 31, 2012, Supervisory Goodwill Settlement Agreement (originally filed as Exhibit 99 to the Company’s Current Report on Form 8-K filed on October 22, 2012 and incorporated by reference herein).
|
||
AmBase Corporation - 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, 2003).
|
||
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, 2021 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.
|
ITEM 16. |
FORM 10-K SUMMARY
|
/s/RICHARD A. BIANCO
|
Chairman, President and Chief Executive
|
Officer (Principal Executive Officer)
|
Date: March 25, 2022
|
/s/RICHARD A. BIANCO
|
/s/JOHN FERRARA
|
Chairman, President,
|
Vice President, Chief Financial Officer and Controller
|
Chief Executive Officer and Director
|
(Principal Financial and Accounting Officer)
|
Date: March 25, 2022
|
Date: March 25, 2022
|
/s/ALESSANDRA F. BIANCO
|
/s/RICHARD A. BIANCO, JR.
|
Director
|
Director
|
Date: March 25, 2022
|
Date: March 25, 2022
|
/s/JERRY Y. CARNEGIE
|
/s/KENNETH M. SCHMIDT
|
Director
|
Director
|
Date: March 25, 2022
|
Date: March 25, 2022
|
DIRECTORS AND OFFICERS
|
||||
Board of Directors
|
||||
Richard A. Bianco
|
Alessandra F. Bianco
|
Richard A. Bianco, Jr.
|
Jerry Y. Carnegie
|
Kenneth M. Schmidt
|
Chairman, President and
Chief Executive Officer
AmBase Corporation
|
Senior Officer
BARC Investments, LLC
|
Employee AmBase Corporation & Officer
BARC Investments, LLC
|
Private Investor
|
Private Investor
|
AmBase Officers
|
||||
Richard A. Bianco
|
John Ferrara
|
Joseph R. Bianco
|
||
Chairman, President and Chief Executive Officer
|
Vice President,
Chief Financial Officer and Controller
|
Treasurer
|
Annual Meeting of Stockholders
The 2022 Annual Meeting is currently scheduled to be held at 9:00 a.m. Eastern Time, on Thursday, June 2, 2022, at:
Hyatt Regency Hotel
1800 East Putnam Avenue
Greenwich, CT 06870
|
Corporate Headquarters
AmBase Corporation
7857 West Sample Road, Suite 134
Coral Springs, FL 33065
(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’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
185 Asylum Street
City Place I, 25th Floor
Hartford, CT 06103
|
Number of Stockholders
As of February 28, 2022, there were,
approximately 6,200 stockholders.
|