SCHEDULE: Star Equity Group Boosts Gyrodyne Stake, Proposes Board Nominees

Star Equity Fund and its affiliates have increased their beneficial ownership in Gyrodyne, LLC to 7.1% and nominated two individuals for the company's board of directors.

Summary

• Star Equity Fund LP and its affiliated entities (the "Reporting Persons") collectively beneficially own 156,774 shares of Gyrodyne, LLC common stock.
• This represents approximately 7.1% of Gyrodyne's outstanding shares, based on 2,199,308 shares outstanding as of August 8, 2025.
• The Reporting Persons include Star Operating Companies, Star Equity Fund, Star Equity GP, Star Investment Management, Jeffrey E. Eberwein, Star Value, Hudson Global, Hannah M. Bible, and Matthew R. Sullivan.
• Hannah M. Bible and Matthew R. Sullivan are identified as nominees for election to Gyrodyne's board of directors.
• The Reporting Persons entered into a Joint Filing Agreement on August 22, 2025, to jointly file Schedule 13D statements.
• Star Equity Fund, LP engaged in several transactions in Gyrodyne shares in the last 60 days, including purchases between $8.26 and $8.51 per share and a sale of 1,186 shares at $11.22 per share on August 4, 2025.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive from the activist investor's perspective, as they are actively building a stake and seeking board representation, indicating a belief in potential value creation. The profitable sale of some shares also reflects a positive trading outcome. However, for the issuer, it introduces uncertainty regarding potential governance changes.

Positives

• Star Equity Fund, LP sold 1,186 shares at $11.22 on August 4, 2025, which is higher than their purchase prices ranging from $8.26 to $8.51, indicating a profitable transaction on those specific shares.
• The group's continued accumulation of shares and nomination of board members suggests a belief in the underlying value or potential for improvement at Gyrodyne, LLC.

Risks

• Potential for a proxy contest or boardroom battle if the nominated directors are not accepted by Gyrodyne's current management, which could create uncertainty for the company.
• The Reporting Persons' activist intentions may lead to strategic changes that could be disruptive or not align with all shareholder interests.

Future Outlook

The filing indicates a potential future shift in Gyrodyne, LLC's corporate governance with the nomination of two individuals to the board of directors by the activist investor group. This suggests an intent to influence the company's strategic direction or operations.

Management Comments

• Jeffrey E. Eberwein serves as the manager of Star Equity GP and Star Investment Management.
• Hannah M. Bible is a nominee for election to the board of directors of the Issuer.
• Matthew R. Sullivan is a nominee for election to the board of directors of the Issuer.

Industry Context

This filing represents a classic example of shareholder activism, where an investment group acquires a significant stake in a company and seeks to influence its management or strategic direction, often through board representation. Such actions are common in industries where companies may be perceived as undervalued or underperforming, and activists believe they can unlock shareholder value through governance changes or strategic shifts. Gyrodyne, LLC, as a real estate company, could be targeted for asset optimization or strategic review.

Comparison to Industry Standards

• The 7.1% stake is a substantial position for an activist investor, typically sufficient to demand board representation or influence strategic decisions, comparable to stakes taken by activist funds like Elliott Management or ValueAct Capital in their initial stages of engagement with target companies.
• The nomination of two board members (Hannah M. Bible and Matthew R. Sullivan) is a standard tactic for activist investors seeking to gain direct influence over corporate governance, similar to actions seen in campaigns at companies like Kohl's (by Macellum Advisors) or ExxonMobil (by Engine No. 1).
• The disclosure of transactions, including both purchases and a profitable sale, reflects typical trading patterns of activist funds that build positions over time, sometimes taking profits on portions of their holdings while maintaining a core strategic stake.

Management Changes

Corporate Governance

Legal Proceedings

• No Reporting Person has been convicted in a criminal proceeding or been party to a civil proceeding related to securities laws in the last five years.

Related Party Transactions

• The Joint Filing Agreement dated August 22, 2025, among the various Reporting Persons (Star Equity Fund, Star Operating Companies, Hudson Global, Jeffrey E. Eberwein, etc.) constitutes an arrangement among related parties with respect to the Issuer's securities.

Stakeholder Impact

• Shareholders: Potential for increased shareholder value if the activist campaign leads to strategic improvements or asset optimization. Conversely, a prolonged proxy fight could create uncertainty and negatively impact share price.
• Management/Board: Current management and board may face pressure to address the activist's concerns or defend their current strategy.
• Employees: Potential for strategic shifts or operational changes resulting from activist influence, which could impact employees.

Next Steps

• Gyrodyne, LLC's board will need to respond to the nomination of Hannah M. Bible and Matthew R. Sullivan for election to the board of directors.
• Further engagement or potential proxy contest between the Reporting Persons and Gyrodyne, LLC's management.

Key Dates

Recommendation

While the activist investor group's actions, including increasing their stake and nominating board members, suggest a belief in Gyrodyne's potential for value creation, the immediate impact and outcome of such an activist campaign are uncertain. Investors should hold their positions to observe how the company's board responds to these nominations and the potential for strategic changes before making further investment decisions. The profitable sale of some shares by Star Equity Fund, LP also indicates that the stock has seen some appreciation, but the overall strategy of the activist group and its long-term implications for Gyrodyne are yet to unfold.

Keywords

Gyrodyne LLC, Star Equity Fund, Schedule 13D, Beneficial Ownership, Activist Investor, Board Nominees, Corporate Governance, Shareholder Activism, Jeffrey E. Eberwein, Hudson Global