10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

For the quarterly period ended June 30, 2024

☐ 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.)

7857 WEST SAMPLE ROAD, SUITE 134

CORAL SPRINGS, Florida 33065

(Address of principal executive offices) (Zip Code)

(201) 265-0169

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered

None.

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 (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

YES
☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒  Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.  See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☐	Accelerated Filer	☐	Non-Accelerated Filer	☒	Smaller Reporting Company	☒
Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

YES ☐ NO ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ☐
NO ☒

At July 31, 2024, there were 84,938,211 shares outstanding of the registrant’s common stock, $0.01 par value per share.

AmBase Corporation

Quarterly Report on Form 10-Q

June 30, 2024

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION	Page
Item 1.	Condensed Consolidated Financial Statements (unaudited)	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 4.	Controls and Procedures	23
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity and Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	24
Signatures		24

PART I - FINANCIAL INFORMATION

Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AMBASE CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

(in thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Operating expenses:
Compensation and benefits	$	352		$	347		$	711		$	732
Professional and outside services		1,570			813			2,881			1,541
Property operating and maintenance		6			2			10			10
Insurance		12			57			44			115
Other operating		65			28			84			41
Total operating expenses		2,005			1,247			3,730			2,439
Operating income (loss)		(2,005	)		(1,247	)		(3,730	)		(2,439	)
Interest income		19			-			19			1
Interest expense		(51	)		22			63			51
Income (loss) before income taxes		(1,935	)		(1,269	)		(3,774	)		(2,489	)
Income tax expense (benefit)		-			-			-			-
Net income (loss)	$	(1,935	)	$	(1,269	)	$	(3,774	)	$	(2,489	)
Net income (loss) per common share - basic	$	(0.02	)	$	(0.03	)	$	(0.06	)	$	(0.06	)
Weighted average common shares outstanding - basic		84,938			40,738			62,838			40,738

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

AMBASE CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except per share data)

Assets:	June 30, 2024			December 31, 2023
Cash and cash equivalents	$	434		$	78
Other assets		-			-
Total assets	$	434		$	78
Liabilities and Stockholders’ Equity (Deficit):
Liabilities:
Accounts payable and accrued liabilities	$	1,713		$	3,225
Loan(s) payable – related party		-			3,198
Total liabilities		1,713			6,423
Commitments and contingencies (Note 6)
Stockholders’ equity (deficit):
Common stock ($0.01 par value, 85,000 authorized in 2024 and 85,000 authorized in 2023, 84,938 issued and 84,938 outstanding in 2024 and 46,410 issued and 40,738 outstanding in 2023)		849			464
Additional paid-in capital		551,591			548,304
Accumulated deficit		(553,719	)		(549,945	)
Treasury stock, at cost – 2024 – 0 shares; and 2023 - 5,672 shares		-			(5,168	)
Total stockholders’ equity (deficit)		(1,279	)		(6,345	)
Total liabilities and stockholders’ equity (deficit)	$	434		$	78

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

AMBASE CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

(Unaudited)

(in thousands)	Common stock		Additional paid-in capital		Accumulated deficit			Treasury stock			Total
January 1, 2024	$	464	$	548,304	$	(549,945	)	$	(5,168	)	$	(6,345	)
Net income (loss)		-		-		(1,839	)		-			(1,839	)
March 31, 2024		464		548,304		(551,784	)		(5,168	)		(8,184	)
Net income (loss)		-		-		(1,935	)		-			(1,935	)
Sale of common stock - Equity Offering		385		3,287		-			5,168			8,840
June 30, 2024	$	849	$	551,591	$	(553,719	)	$	-		$	(1,279	)

(in thousands)	Common stock		Additional paid-in capital		Accumulated deficit			Treasury stock			Total
January 1, 2023	$	464	$	548,304	$	(544,674	)	$	(5,168	)	$	(1,074	)
Net income (loss)		-		-		(1,220	)		-			(1,220	)
March 31, 2023		464		548,304		(544,894	)		(5,168	)		(2,294	)
Net income (loss)		-		-		(1,269	)		-			(1,269	)
June 30, 2023	$	464	$	548,304	$	(547,163	)	$	(5,168	)	$	(3,563	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

AMBASE CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Six months ended June 30,
(in thousands)	2024			2023
Cash flows from operating activities:
Net income (loss)	$	(3,774	)	$	(2,489	)
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities
Changes in operating assets and liabilities:
Other assets		-			61
Accounts payable and accrued liabilities		(1,512	)		903
Net cash provided (used) by operating activities		(5,286	)		(1,525	)
Cash flows from financing activities:
Sale of common stock – equity offering		8,840			-
Payoff of loan payable – related party		(3,548	)		-
Proceeds from loan payable – related party		350			1,265
Net cash provided (used) by financing activities		5,642			1,265
Net change in cash and cash equivalents		356			(260	)
Cash and cash equivalents at beginning of period		78			349
Cash and cash equivalents at end of period	$	434		$	89
Supplemental cash flow disclosure:
Income taxes refunded (paid)	$	-		$	-
Interest expense paid	$	148		$	-

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

AMBASE CORPORATION AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1 – The Company and Basis of Presentation and Going Concern

The accompanying condensed consolidated financial statements of AmBase Corporation and subsidiaries (“AmBase” or the “Company”) are unaudited and subject to year-end adjustments. All material intercompany transactions and balances have been eliminated. In the opinion of management, these financial statements reflect all adjustments, consisting only of normal recurring adjustments unless otherwise disclosed, necessary for a fair presentation of the Company’s consolidated financial position, results of operations and cash flows. Results for interim periods are not necessarily indicative of results for the full year. The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that it deems reasonable, that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from such estimates and assumptions. The unaudited interim condensed consolidated financial statements presented herein are condensed and 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, 2023.

A fundamental principle of the preparation of financial statements in accordance with GAAP is the assumption that an entity will continue in existence as a going concern, which contemplates continuity of operations and the realization of assets and settlement of liabilities occurring in the ordinary course of business. In accordance with this requirement, the Company has prepared its accompanying condensed consolidated financial statements assuming the Company will continue as a going concern.

The Company has incurred operating losses and used cash for operating activities for the past several years. The Company has continued to keep operating expenses at a reduced level; however, there can be no assurance that the Company’s current level of operating expenses will not increase or that other uses of cash will not be necessary.  The Company believes that based on its current level of operating expenses, its existing cash and cash equivalents may not be sufficient to cover operating cash needs through the twelve month period from the financial statement reporting date. Based on the above factors, management determined there is substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The financial statements do not include adjustments to the carrying value of assets and liabilities, which might be necessary should the Company not continue in operation.

In order to continue as a going concern, the Company must take steps to manage its current level of cash and cash equivalents, through various ways, including but not limited to, raising additional capital through the sale of equity or debt securities or long term borrowings, which may include additional borrowings from affiliates of the Company, litigation funding agreements, reducing operating expenses, and seeking recoveries from various sources. There can be no assurance that the Company will be able to adequately implement these cash management measures, in whole or in part or raise capital or obtain financing on terms acceptable to the Company, if at all.

In June 2013, the Company purchased an equity interest in a real estate development property through a joint venture agreement to purchase and develop real property located at 105 through 111 West 57th Street in New York, New York (the “111 West 57th Property”). The Company is engaged in material disputes and litigation with regard to the 111 West 57th Property.  Despite ongoing litigation challenging the legitimacy of the actions taken in connection with the “Strict Foreclosure”, (as defined and as further discussed herein), the Company recorded an impairment for the full amount of its equity investment in the 111 West 57th Property in 2017. Prior to the Strict Foreclosure, the carrying value of the Company’s equity investment in the 111 West 57th Property represented a substantial portion of the Company’s assets and net equity value.

For additional information regarding the Company’s recording of an impairment of its equity investment in the 111 West 57th Property in 2017 and the Company’s legal proceedings relating to the 111 West 57th Property, including the Company’s challenge to the Strict Foreclosure, see Note 3 and Note 6.

5

AMBASE CORPORATION AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

On April 1, 2024, the Company completed the issuance and sale, of all the shares of the Company’s common stock (the “Shares”) in the private placement offering (the “Equity Offering”) on the previously disclosed terms and conditions, including Shares purchased by an institutional investor not affiliated with the Company and Shares purchased by BARC Investments, LLC, an affiliate of the Company owned and controlled by two of the Company’s directors and their sibling. The offer and sale of the shares in the Equity Offering was completed in reliance on the exemption from registration under Rule 506(c) of Regulation D promulgated under Section 4(a)(2) of the Securities Act of 1933, as amended. See Note 9 for additional information.

The Company will continue to consider and explore other litigation funding agreements with third party litigation funders that it could enter into for portions of the litigation costs for up to $5 million of funding, at market terms to be agreed upon at such times. In general, litigation funding agreements are structured so that the litigation funder would receive back their initial funding amount first (i.e. before any recovery is received by the Company), plus an additional multiple ranging from 1.0 times to 3.5 times the amount funded (depending on various factors), plus depending on the funder, additional fees, expenses, interest and potentially an additional percentage of the total recovery received. There can be no assurance that the Company would be able to secure any such additional litigation funding on acceptable terms or at all.

While the Company’s management is evaluating future courses of action to protect and/or recover the value of the Company’s equity investment in the 111 West 57^th Property, the adverse developments make it uncertain as to whether any such courses of action will be successful. Any such efforts are likely to require sustained effort over a period of time and substantial additional financial resources. Inability to recover all or most of such value would, in all likelihood, have a material adverse effect on the Company’s financial condition and future prospects. The Company can give no assurances with regard if it will prevail with respect to any of its claims.

Note 2 – Summary of Significant Accounting Policies

New accounting pronouncements

There are no new accounting pronouncements that would likely materially affect the Company’s unaudited condensed consolidated financial statements.

Note 3 – Investment in 111 West 57^th Partners LLC

In June 2013, the Company purchased an equity interest in the 111 West 57^th Property.  The Company is engaged in material disputes and litigation with regard to the 111 West 57^th Property. Despite ongoing litigation challenging the legitimacy of the actions taken in connection with the “Strict Foreclosure”, (as defined below and as further discussed herein), the Company recorded an impairment for the full amount of its equity investment in the 111 West 57th Property in 2017.

For additional information regarding the Company’s 111 West 57^th Property equity investment, events leading up to the Strict Foreclosure, the Company’s recording of an impairment of its equity investment in the 111 West 57^th Property and the Company’s legal proceedings relating to the 111 West 57^th Property, including the Company’s challenge to the Strict Foreclosure, see herein below and Note 6.

In June 2013, 111 West 57^th Investment LLC (“Investment LLC”), a then newly formed subsidiary of the Company, entered into a joint venture agreement (as amended, the “JV Agreement”) with 111 West 57th Sponsor LLC (the “Sponsor”), pursuant to which Investment LLC invested (the “Investment”) in a real estate development property to purchase and develop the 111 West 57^th Property.  In consideration for making the Investment, Investment LLC was granted a membership interest in 111 West 57^th Partners LLC (“111 West 57^th Partners”), which indirectly acquired the 111 West 57^th Property on June 28, 2013 (the “Joint Venture,” and such date, the “Closing Date”).  The Company also indirectly contributed an additional amount to the Joint Venture in exchange for an additional indirect interest in the Joint Venture.  Other members and the Sponsor contributed additional cash and/or property to the Joint Venture. The Company recorded its investment in 111 West 57^th Partners utilizing the equity method of accounting. The Joint Venture plans were to redevelop the 111 West 57^th Property into a luxury residential tower and retail project.

Amounts relating to the Company’s initial June 2013 investment in the 111 West 57^th Property follow:

($ in thousands)
Company’s aggregate initial investment	$	57,250
Company’s aggregate initial membership interest %		60.3	%

6

AMBASE CORPORATION AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

The JV Agreement and related operating agreements generally provide that all distributable cash shall be distributed as follows: (i) first, 100% to the members in proportion to their percentage interests until Investment LLC has received distributions yielding a 20% internal rate of return as calculated; (ii) second, 100% to the Sponsor as a return of (but not a return on) any additional capital contributions made by the Sponsor on account of manager overruns; and (iii) thereafter, (a) 50% to the members in proportion to their respective percentage interests at the time of such distribution, and (b) 50% to the Sponsor.

In March 2014, the Company entered into an amended and restated operating agreement for Investment LLC (the “Amended and Restated Investment Operating Agreement”) to grant a 10% subordinated participation interest in Investment LLC to the Company’s Chairman, President and Chief Executive Office, Mr. Richard A. Bianco (“Mr. R.A. Bianco”), as a contingent future incentive for Mr. R.A. Bianco’s past, current and anticipated ongoing role to develop and commercialize the Company’s equity investment in the 111 West 57^th Property.  Pursuant to the terms of the Amended and Restated Investment Operating Agreement, Mr. R.A. Bianco has no voting rights with respect to his interest in Investment LLC, and his entitlement to receive 10% of the distributions from Investment LLC is subject to the Company first receiving distributions equal to 150% of the Company’s initial aggregate investment in Investment LLC and the Joint Venture, plus any additional investments by the Company, and only with respect to any distributions thereafter. At the current time, the Company has not expensed nor accrued any amounts relating to this subordinated participation interest, as no amount or range of amounts can be reasonably estimated or assured.

During 2014, in connection with the funding of additional capital calls under the JV Agreement for required borrowing and development costs for the 111 West 57^th Property, the Company’s management and its Board of Directors concluded that, given the continuing development risks of the 111 West 57^th Property and the Company’s financial position, the Company should not at that time increase its already significant concentration and risk exposure to the 111 West 57th Property.  Nonetheless, the Company sought to limit dilution of its interest in the Joint Venture resulting from any failure to fund the capital call requirements, but at the same time wished to avoid the time, expense and financial return requirements (with attendant dilution and possible loss of voting rights) that obtaining a replacement third-party investor would require. The Company, therefore, entered into a second amended and restated operating agreement for Investment LLC (“Second Amended and Restated Investment Operating Agreement”) pursuant to which Capital LLC was admitted as a member of Investment LLC. In exchange for Capital LLC contributing toward Investment LLC capital calls in respect of the 111 West 57^th Property, available cash of Investment LLC will be distributed first to Capital LLC until it has received a 20% internal rate of return (calculated as provided for in the JV Agreement as noted above), second to the Company until it has received 150% of its capital, and, thereafter, available cash is split 10/90, with 10% going to Mr. R.A. Bianco as the subordinated participation interest noted above and 90% going to Capital LLC and the Company pari-passu, with Capital LLC receiving one-half of its pro-rata share based on capital contributed and the Company receiving the balance. No other material changes were made to the Amended and Restated Investment Operating Agreement, and neither Mr. R.A. Bianco nor Capital LLC has any voting rights with respect to their interest and investment in Investment LLC.

In accordance with the JV Agreement, shortfall capital contributions may be treated either as a member loan or as a dilutive capital contribution as set forth in the JV Agreement. The Sponsor deemed the shortfall capital contributions as dilutive capital contributions to the Company.  The Company disagrees with the Sponsor’s investment percentage calculations. The Sponsor has taken the position that the capital contribution requests, if taken together, would have caused the Company’s combined ownership percentage to be diluted below the Company’s initial membership interest percentage. The parties have a dispute with regard to the calculation of the revised investment percentages resulting from the capital contribution requests, along with the treatment and allocation of these shortfall capital contribution amounts.

On June 30, 2015, 111 West 57^th Partners obtained financing for the 111 West 57^th Property.  The financing was obtained in two parts: (i) a first mortgage construction loan with AIG Asset Management (US), LLC (along with its affiliates “AIG”); and (ii) a mezzanine loan with Apollo Commercial Real Estate Finance, Inc. (along with its affiliates “Apollo”), as detailed herein.  Both loans initially had certain repayment term dates with extension option(s) subject to satisfying certain conditions.  The loan agreements (the “Loan Agreements”) also include customary events of default and other customary terms and conditions.  Simultaneously with the closing of the AIG and the Apollo financing, 111 West 57^th Partners repaid all outstanding liabilities and obligations to Annaly CRE, LLC under the initial mortgage and acquisition loan agreement, dated June 28, 2013, between the joint venture entities and Annaly CRE, LLC.  The remaining loan proceeds were to be drawn down and used as necessary for construction and related costs, loan interest escrow and other related project expenses for development of the 111 West 57^th Property.

7

AMBASE CORPORATION AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

In April 2016, the Company initiated a litigation in the New York State Supreme Court for New York County (the “NY Court”), Index No. 652301/2016, (“AmBase v. 111 West 57th Sponsor LLC, et al.”) (the “Sponsor Action”).  The defendants in that litigation include 111 West 57th Sponsor LLC, Kevin Maloney, Michael Stern, and various members and affiliates, Liberty Mutual Insurance Company, and Liberty Mutual Fire Insurance Company (collectively, “Defendants”) and nominal defendants 111 West 57th Partners LLC and 111 West 57th Mezz 1 LLC.  For additional information with regard to the Company’s legal proceedings relating to the 111 West 57th Property, see Note 6.

In December 2016, the Sponsor proposed for approval a “proposed budget” (the “Proposed Budget”), which the Sponsor claims reflected an increase in other costs resulting in the need for additional funding in order to complete the project. The Company disputes, among other items, the calculation of the percentage increase of hard costs shown in the Proposed Budget. The Company believes the aggregate projected hard costs in the Proposed Budget exceed a contractually stipulated limit as a percentage of the hard costs set forth in the prior approved budget, thus allowing Investment LLC the option to exercise its equity put right as set forth in the JV Agreement (the “Equity Put Right”). Consequently, subsequent to the Sponsor’s presentation of the Proposed Budget, Investment LLC notified the Sponsor that it was exercising its Equity Put Right pursuant to the JV Agreement. The Sponsor refused to honor the exercise of Investment LLC’s Equity Put Right. The Sponsor claims, among other things, that the conditions precedent were not met because it claims that the increase in aggregate hard costs in the Proposed Budget does not exceed the contractually stipulated limit that would allow the exercise of the Equity Put Right.

The Company further contends that a portion of the Proposed Budget increases are manager overruns (as defined in the JV Agreement) and thus should be paid for by the Sponsor. The Sponsor denies that the Proposed Budget increases were manager overruns. The Company continues to challenge the nature and substance of the Proposed Budget increases and how they should be treated pursuant to the JV Agreement.

The Sponsor claimed that additional borrowings were needed to complete the project. Shortly thereafter, the Sponsor informed the Company that Apollo had indicated that due to budget increases, it believed the current loan was “out of balance” (meaning, according to Apollo, the projected budget exceeds the original budget approved in connection with the loan); and thus 111 West 57th Partners LLC, or its subsidiaries would need additional funding in order to bring the loan back into balance. The Company considered approving the additional financing but informed the Sponsor that it had concerns about the Proposed Budget and the implications of the Proposed Budget, as well as other questions which needed to be addressed first.

Around this time, Apollo provided loan forbearances to the borrowers and guarantors to allow the Sponsor time (while the building continued to be built) to raise the additional financing that Sponsor claimed would be needed to complete the 111 West 57th project. This forbearance period ended on June 29, 2017. Around this date, the Company was advised that Apollo sold a portion of the mezzanine loan—broken off as a junior mezzanine loan—to an affiliate of Spruce Capital Partners LLC (“Spruce”) (the “Junior Mezzanine Loan”).

On June 30, 2017, Spruce declared an event of default under the Junior Mezzanine Loan and demanded immediate payment of the full outstanding balance of the Junior Mezzanine Loan.  Spruce then gave notice to the junior mezzanine borrower that it proposed to accept the pledged collateral (including the joint venture members’ collective interest in the property) in full satisfaction of the joint venture’s indebtedness under the Junior Mezzanine Loan (i.e., a “Strict Foreclosure”).

On July 25, 2017, the Company filed a complaint against Spruce and the Sponsor and requested injunctive relief halting the Strict Foreclosure from the New York State Supreme Court for New York County, (the “NY Court”) Index No. 655031/2017, (the “Lender Action”). The defendants in the Lender Action were 111 W57 Mezz Investor, LLC, Spruce Capital Partners LLC, 111 West 57th Sponsor LLC, Michael Z. Stern, and Kevin P. Maloney (collectively, “Defendants”) and nominal defendants 111 West 57th Partners LLC and 111 West 57^th Mezz 1 LLC. The Company has since voluntarily discontinued its claims against Sponsor, Stern, and Maloney, without prejudice to reinstating them in the Lender Action or any other action. For additional information with regard to the Lender Action, see Note 6.

8

AMBASE CORPORATION AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

On August 30, 2017, Spruce issued a Notice of Retention of Pledged Collateral in Full Satisfaction of Indebtedness. By purporting to accept the pledged collateral, pursuant to a Strict Foreclosure process, Spruce claims to have completed the retention of the collateral pledged by the junior mezzanine borrower, and therefore, the Company’s interest in the 111 West 57th Property (the “Strict Foreclosure”). Despite ongoing litigation challenging the legitimacy of the actions taken in connection with the Strict Foreclosure, the Company recorded an impairment for the full amount of its equity investment in the 111 West 57^th Property in 2017. Prior to the Strict Foreclosure, the carrying value of the Company’s equity investment in the 111 West 57^th Property represented a substantial portion of the Company’s assets and net equity value.

For additional information regarding the Company’s legal proceedings relating to the 111 West 57^th Property, including the Company’s challenge to the Strict Foreclosure, see Note 6.

With respect to its disputes and litigation relating to its interest in the 111 West 57th Property, the Company is pursuing, and will continue to pursue, other options to realize the Company’s investment value, various legal courses of action to protect its legal rights, recovery of its asset value from various sources of recovery, as well as considering other possible economic strategies, including the possible sale of the Company’s interest in and/or rights with respect to the 111 West 57^th Property; however, there can be no assurance that the Company will prevail with respect to any of its claims.

The Company can give no assurances regarding the outcome of the matters described herein, including as to the effect of Spruce’s actions described herein, whether the Sponsor will perform their contractual commitments to the Company under the JV Agreement, as to what further action, if any, the lenders may take with respect to the project, as to the ultimate resolution of the ongoing litigation proceedings relating to the Company’s investment interest in the 111 West 57^th Property, as to the ultimate effect of the Sponsor’s, the Company’s or the lenders’ actions on the project, as to the completion or ultimate success of the project, or as to the value or ultimate realization of any portion of the Company’s equity investment in the 111 West 57^th Property.

While the Company’s management is evaluating future courses of action to protect and/or recover the value of the Company’s equity investment in the 111 West 57^th Property, the adverse developments make it uncertain as to whether any such courses of action will be successful. Any such efforts are likely to require sustained effort over a period of time and substantial additional financial resources. Inability to recover all or most of such value would, in all likelihood, have a material adverse effect on the Company’s financial condition and future prospects. The Company can give no assurances with regard to if it will prevail with respect to any of its claims.

Note 4 - Savings Plan

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 a percentage of their compensation, which are matched by the Company at a percentage of the employees’ elected 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.  All contributions are subject to the maximum limitations contained in the Code.

The Company’s matching contributions to the Savings Plan, charged to expense, were as follows:

($ in thousands)	Three Months Ended						Six Months Ended
	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
Company matching contributions	$	28		$	28		$	80		$	79
Employer match %		100	%		100	%		100	%		100	%

9

AMBASE CORPORATION AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

Note 5 - Income Taxes

The Company and its 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 unaudited condensed consolidated 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, a greater than 50% probability exists that the tax benefits will actually be realized sometime in the future.

The Company has a deferred tax asset arising primarily from NOL carryforwards. The Company has a full valuation allowance on the deferred tax asset amounts, as management has no basis to conclude that realization is more likely than not.  Management does not believe that any significant changes in unrecognized income tax benefits are expected to occur over the next year.

The Company’s management is continuing to work closely with outside advisors on the Company’s various federal tax return matters for the numerous interrelated tax years. The Company cannot predict whether or not the IRS and/or other tax authorities will review the Company’s tax returns filed, to be filed and/or as filed in prior years. There is risk relating to assumptions regarding the outcome of tax matters, based in whole or in part upon consultation with outside advisors; risk relating to potential unfavorable decisions in tax proceedings; and risks regarding changes in, and/or interpretations of federal and state income tax laws. Moreover, applicable provisions of the Code and IRS regulations permit the IRS to challenge Company tax positions and filed returns or seek additional taxes for an extended period of time after such returns are filed. The Company can give no assurances as to the final outcome of any IRS review, if any.

The Company was a plaintiff in a legal proceeding seeking recovery of damages from the United States Government for the loss of the Company’s wholly-owned subsidiary, Carteret Savings Bank, F.A. (the “SGW Legal Proceedings”).  A settlement agreement in the SGW Legal Proceedings between the Company, the Federal Deposit Insurance Corporation-Receiver (“FDIC-R”) and the Department of Justice (“DOJ”) on behalf of the United States of America (the “United States”), was executed (the “SGW 2012 Settlement Agreement”) which was approved by the United States Court of Federal Claims (the “Court of Federal Claims”) in October 2012.  On August 6, 2013, Senior Judge Smith issued an opinion which addressed the relief sought by AmBase. In summary, the court held that the Settlement Agreement is a contract and that it entitles the Company to receive both “(1) the amount of the tax consequences resulting from taxation of the damages award plus (2) the tax consequences of receiving the first component.”  But the Court of Federal Claims did not award an additional amount for the second component at that time given the remaining uncertainty surrounding the ultimate tax treatment of the settlement proceeds and the gross-up, as well as uncertainty relating to the Company’s future income.  The Court of Federal Claims indicated that either the Company or the government is entitled to seek further relief “if, and when, the facts justify it.”

10

AMBASE CORPORATION AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

Note 6 - Legal Proceedings

From time to time, the Company and its subsidiaries may be named as a defendant in various lawsuits or proceedings.  At the current time except as set forth below, the Company is unaware of any legal proceedings pending against the Company.  The Company intends to aggressively contest all litigation and contingencies, as well as pursue all sources for contributions to settlements. However, there can be no assurance that the Company will prevail with respect to any of its claims.

The Company is a party to material legal proceedings as follows:

AmBase Corp., et al. v. 111 West 57^th Sponsor LLC, et al. In April 2016, AmBase and certain of its subsidiaries and affiliates (collectively, the “Plaintiffs”) initiated a litigation in the New York State Supreme Court for New York County (the “NY Court”), Index No. 652301/2016, (“AmBase v. 111 West 57th Sponsor LLC, et al.”) (the “Sponsor Action”).  The defendants in that litigation include 111 West 57th Sponsor LLC (the “Sponsor”), Kevin Maloney, Michael Stern, and various members and affiliates, (collectively, “Defendants”) and nominal defendants 111 West 57th Partners LLC and 111 West 57th Mezz 1 LLC. In the current version of the complaint, AmBase alleges that Defendants violated multiple provisions in the JV Agreement, including by failing to honor the exercise of AmBase’s contractual “equity put right” as set forth in the JV Agreement (the “Equity Put Right”) and by not objecting to the 2017 foreclosure of the junior mezzanine loan on the project. AmBase is seeking compensatory damages, punitive damages, indemnification and equitable relief, including a declaration of the parties’ rights, and an accounting. The Company has also demanded from the Sponsor access to the books and records for the 111 West 57th Property which the Sponsor refused, claiming they have provided all books and records as required.

The Defendants filed a motion to dismiss an earlier complaint, and on January 12, 2018, the NY Court issued an opinion allowing some of AmBase’s claims to go forward and dismissing others (“2018 Order”). Among other claims that the NY Court declined to dismiss was AmBase’s claim that the Defendants violated the implied covenant of good faith and fair dealing by frustrating AmBase’s Equity Put Right. Claims that the NY Court dismissed included AmBase’s claim that the Defendants breached their contract with AmBase by financing capital contributions for the project through funds obtained from third parties. On January 16, 2018, some of the Defendants wrote to the NY Court suggesting that the opinion contained certain clerical errors and was missing a page. On January 18, 2018, the NY Court removed its previous opinion from the docket and on January 29, 2018, posted a revised opinion. On April 13, 2018, AmBase filed a notice of appeal of the 2018 Order to the New York Supreme Court Appellate Division, First Judicial Department (the “Appellate Division”). On January 22, 2020, the Company filed a motion with the Appellate Division seeking to enlarge the time to perfect the Company’s appeal of the 2018 Order, in light of an intervening removal to and remand from federal court. On July 2, 2020, the Appellate Division granted AmBase’s motion and enlarged the time to perfect the Company’s appeal to the October 2020 Term of the Appellate Division. On April 29, 2021, the Appellate Division affirmed Justice Bransten’s dismissal of the claims on appeal, while the claims that were not previously dismissed remain pending in the trial court.

On April 27, 2018, the Company filed a third amended complaint adding federal RICO claims, and new claims for declaratory judgment, breach of contract, fraud, and breach of fiduciary duty, based on information discovered during the course of discovery and events that had transpired since the Company filed its previous complaint in the Sponsor Action. On June 18, 2018, Defendants removed the complaint to the U.S. District Court for the Southern District of New York (the “Federal Court”), where it was docketed as case number 18-cv-5482-AT.

On October 25, 2018, the Federal Court issued an order granting Defendants’ motion to dismiss the Company’s RICO claims and declined to exercise supplemental jurisdiction over the Company’s state-law claims, dismissing the latter claims without prejudice. On August 30, 2019, the U.S. Court of Appeals for the Second Circuit affirmed the Federal Court’s dismissal of the federal RICO claims, vacated the Federal Court’s dismissal of the state-law claims, and remanded with instructions for the Federal Court to remand those claims to the NY Court. On September 25, 2019, the Federal Court remanded the case to the NY Court, where it was assigned to the Honorable O. Peter Sherwood.

11

AMBASE CORPORATION AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

On June 11, 2020, Defendants filed a motion with the NY Court to dismiss some of the state law claims asserted by the Company in the third amended complaint.  On July 28, 2020, Plaintiffs filed a motion for leave to amend the third amended complaint, which Defendants opposed.  The proposed complaint added, among other things, claims arising from certain defendants’ role in the 2017 foreclosure of the junior mezzanine loan on the project. On July 22, 2021, the NY Court granted Plaintiffs leave to amend and denied the motion to dismiss without prejudice as moot in light of the Court’s decision granting Plaintiffs leave to amend.

On July 29, 2021, Plaintiffs filed their fourth amended complaint. On September 3, 2021, Defendants submitted a motion to dismiss the fourth amended complaint in part, which Plaintiffs opposed. On May 9, 2022, the NY Court issued a Decision and Order on Defendants’ motion to dismiss, allowing some of AmBase’s claims to go forward and dismissing others (“May 9, 2022 Order”). The NY Court declined to dismiss AmBase’s claims that the Defendants breached their contracts with AmBase by permitting transfers or encumbrances upon 111 West 57th Sponsor LLC’s and 111 West 57th Control LLC’s membership interests in connection with third-party financing without seeking or obtaining prior written approval.  The Court also declined to dismiss AmBase’s claim that Defendants breached their obligations under the Development Agreement by, among other things, failing to use “commercially reasonable efforts” to plan, design, develop, construct, and obtain permits for the Property in a timely manner and failing to devote sufficient time and attention to its obligations under the Development Agreement.

Claims that the NY Court dismissed included AmBase’s claims that Defendants breached their contract with AmBase by making capital contributions to Sponsor from third parties; consenting to the strict foreclosure without obtaining AmBase’s prior written approval in violation of the “Major Decisions” provision; refusing to cooperate and share information with AmBase’s construction consultant; and engaging in fraud and intentional misconduct in violation of Joint Venture Agreement section 8.5. The NY Court also dismissed AmBase’s claim that Defendants made fraudulent misrepresentations or omissions (as duplicative of the breach of contract claims) and other claims whose dismissal was compelled by a prior decision of the First Department, namely, AmBase’s claims that Sponsor, Stern, and Maloney breached their fiduciary duties of loyalty; to impose a constructive trust on the insurance loss fund; and to impose a constructive trust on Stern’s, Maloney’s, JDS’s, PMG’s, and the construction manager’s construction management fees and Stern’s and Maloney’s equity interest in the Project.  Finally, the Court dismissed AmBase’s current allegations that piercing certain of Defendants’ corporate veils is warranted. On January 18, 2023, the Company filed a notice of appeal appealing the May 9, 2022 Order with regard to all defendants in the Sponsor Action and perfected the appeal on July 10, 2023.

On November 28, 2023, the Appellate Division First Department issued its decision modifying the NY Court’s decision in part and affirming the NY Court’s decision in part. The First Department modified the NY Court’s decision by reinstating Plaintiffs’ breach of contract claim based on Defendants’ refusing to cooperate and share information with AmBase’s construction consultant and one part of Plaintiffs’ fraudulent misrepresentation or omission claim asserted against one of the individual defendants. The First Department otherwise affirmed the NY Court’s decision.

Liberty Mutual Insurance Company and Liberty Mutual Fire Insurance Company (“Liberty Mutual Defendants”) were named as defendants in the fourth amended complaint. On September 30, 2021, the Liberty Mutual Defendants answered the fourth amended complaint and filed a counterclaim against the Company’s subsidiaries for specific performance of a pledge agreement securing certain insurance policies issued for the Project. Plaintiffs replied to those counterclaims on October 20, 2021. On March 14, 2024, the parties filed a Stipulation of Discontinuance Against Liberty Mutual Insurance Company and Liberty Mutual Fire Insurance Company whereby all causes of action, counterclaims, and crossclaims by and against the Liberty Mutual Defendants were discontinued without prejudice.  The Court entered the Stipulation on March 15, 2024.

Matthew Phillips was also named as an individual defendant in the fourth amended complaint.  Following the First Department’s reinstatement of one part of Plaintiffs’ fraudulent misrepresentation or omission claim as asserted against Phillips, on March 26, 2024, the parties filed a Stipulation of Discontinuance Against Matthew Phillips whereby Plaintiffs AmBase Corporation and 111 West 57th Investment LLC discontinued their Fifth Claim for Relief for fraudulent misrepresentation or omission only against Phillips, with prejudice.

On January 30, 2023, Sponsor, Stern, Maloney, and various defendant members and affiliates filed their answer and asserted counterclaims against the Company’s subsidiaries for breach of the Joint Venture Agreement in connection with a proposed refinancing of the Project in 2016. Plaintiffs replied to those counterclaims on February 21, 2023. Discovery in the case is currently ongoing. For additional information with regard to the Company’s investment in the 111 West 57^th Property, including the foreclosure, see Note 3.

12

AMBASE CORPORATION AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

AmBase Corp., et al. v. Spruce Capital Partners, et al. In July 2017, the Company initiated a second litigation in the NY Court, Index No. 655031/2017, (the “Lender Action”). The defendants in the 111 West 57^th Spruce action were 111 W57 Mezz Investor, LLC (“Spruce”), Spruce Capital Partners LLC, 111 West 57th Sponsor LLC, Michael Z. Stern, and Kevin P. Maloney and nominal defendants 111 West 57th Partners LLC and 111 West 57^th Mezz 1 LLC. The Company has since voluntarily discontinued its claims against Sponsor, Stern, and Maloney, without prejudice to reinstating them in the 111 West 57^th Spruce Action or any other action.

Spruce had given notice to the junior mezzanine borrower that it proposed to accept the pledged collateral (including the joint venture members’ collective interest in the property) in full satisfaction of the joint venture’s indebtedness under the Junior Mezzanine Loan (i.e., a “Strict Foreclosure”). After the Sponsor refused to object to Spruce’s proposal on behalf of the junior mezzanine borrower, and Spruce refused to commit to honor Investment LLC’s objection on its own behalf, the Company initiated the 111 West 57^th Spruce Action to obtain injunctive relief halting the Strict Foreclosure.  For additional information on the events leading to this litigation see Note 3.

On July 26, 2017, the NY Court issued a temporary restraining order barring Spruce from accepting the collateral, pending a preliminary injunction hearing scheduled for August 14, 2017. Spruce and the Sponsor subsequently filed papers in opposition to the request for a preliminary injunction and cross-motions to dismiss and quash subpoenas. On August 14, 2017, the NY Court postponed the hearing until August 28, 2017, keeping the temporary restraining order preventing a Strict Foreclosure in effect until the August 28, 2017 hearing. Subsequently, the Company filed a response brief in support of their request for injunctive relief halting the Strict Foreclosure process and in opposition to the motions to quash the subpoenas.

On August 28, 2017, the NY Court held a preliminary injunction hearing, lifted the temporary restraining order, denied Plaintiffs’ request for a preliminary injunction, and granted Defendants’ cross-motions. In order to prevent the Strict Foreclosure process from going forward, the Company immediately obtained an interim stay from the New York Supreme Court Appellate Division, First Judicial Department (“Appellate Division”). That stay remained in place until August 29, 2017, permitting the Company to obtain an appealable order, notice an appeal, and move for a longer-term stay or injunctive relief pending appeal. The Appellate Division held a hearing on August 29, 2017, to consider the Company’s motion for an interim stay or injunctive relief pending appeal, both of which it denied, thus allowing the purported Strict Foreclosure to move forward.

In January 2019, the Appellate Division issued a decision that resolved the Company’s appeal from the order denying a preliminary injunction and dismissing its claims. The Appellate Division affirmed the decision below in part and otherwise dismissed the appeal. It noted that the Company should be allowed to move for leave to amend to state claims for damages and/or the imposition of a constructive trust, as the dismissal of the Company’s claims was without prejudice.

On May 3, 2019, the Company’s subsidiary, Investment LLC, entered into a stipulation with Spruce to amend the complaint in the Lender Action to state claims against Spruce for breaches of the Uniform Commercial Code and Pledge Agreement and various torts. The amended complaint sought the entry of a declaratory judgment, the impression of a constructive trust, permanent injunctive relief restraining Spruce from disposing of or encumbering the 111 West 57^th Property, and damages, including punitive damages. The amended complaint did not name the Company as a plaintiff or Spruce Capital Partners as a defendant. On May 31, 2019, Spruce filed a motion to dismiss the amended complaint. On January 29, 2020, the Court entered a decision and order granting in part and denying in part Spruce’s motion to dismiss the amended complaint. On February 26, 2020, Spruce filed a notice of appeal to the Appellate Division seeking the appeal of the January 29, 2020 order. On March 4, 2020, Investment LLC filed a notice of cross-appeal to the Appellate Division, seeking to appeal the January 29, 2020 order to the extent the NY Court dismissed some of Investment LLC’s claims. On March 30, 2021, the Appellate Division issued a decision and order revising the January 29, 2020, order by reinstating Investment LLC’s derivative claim for breach of the covenant of good faith and fair dealing and dismissing the remaining claims.

While the appeal was pending, the parties to the Lender Action conducted discovery. On April 13, 2021, Investment LLC moved for leave to file a Second Amended Complaint to (1) bolster its factual allegations against the existing Defendant, (2) add claims against Spruce Capital Partners, Joshua Crane, and Robert Schwartz (“Spruce Defendants”), Arthur Becker and his affiliates (“Atlantic Defendants”), Apollo and its affiliates (“Apollo Defendants”), and AIG and its affiliates (“AIG Defendants”). On September 30, 2021, the Court granted the motion, and Investment LLC filed its Second Amended Complaint on the same day. On November 22, 2021, the various defendants filed separate motions to dismiss the claims against them. On December 13, 2021, Investment LLC filed a combined opposition to the motions. The defendants filed their replies on January 7, 2022.

13

AMBASE CORPORATION AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

On May 17, 2022, Plaintiff in the Lender Action filed a motion requesting that the court hold oral argument on the pending motions to dismiss. The court granted the motion and heard argument on July 22, 2022. During argument, counsel for Plaintiff made an oral motion to amend the complaint to add an express allegation that Defendants committed the tort of interference with contractual relations by procuring Sponsor’s breach of the implied covenant of good faith and fair dealing in the JV Agreement. The court called for supplemental briefs on the issue, which were filed on August 5, 2022.

On December 15, 2022, the NY Court issued a decision and order granting in part and denying in part the motions to dismiss (“December 15, 2022 Order”). Specifically, the NY Court declined to dismiss Plaintiff’s claims against ACREFI Mortgage Lending, LLC, Apollo Credit Opportunity Fund III AIV I LP, and AGRE Debt 1 – 111 W 57, LLC (“Apollo Lenders”) for breach of the Pledge Agreement in connection with the strict foreclosure. The NY Court dismissed Plaintiff’s claims for tortious interference with contract against the Spruce Defendants, AIG Defendants, and Apollo Defendants, and Plaintiff’s claim for unjust enrichment against the Atlantic Defendants.

On January 3, 2023, the Apollo Lenders filed a notice of appeal to the Appellate Division seeking review of the December 15, 2022 Order. On January 18, 2023, Plaintiff filed notices of appeal and cross-appeal appealing the December 15, 2022, Order with regard to all Defendants. On August 9, 2023, pursuant to mutual agreement with the Plaintiff and the AIG Defendants, Plaintiff filed a stipulation to withdraw its appeal against the AIG Defendants.  Following briefing and oral argument, the Appellate Division First Department issued its decision on October 5, 2023.  The First Department modified the NY Court’s decision to dismiss Plaintiff’s claim against the Apollo Lenders for breach of the Pledge Agreement in connection with the strict foreclosure, and otherwise affirmed the NY Court’s decision.  On November 3, 2023, Plaintiff filed motions for leave to appeal the First Department’s decision to the Court of Appeals in both the First Department and the Court of Appeals. On December 19, 2023, the First Department denied Plaintiff’s motion for leave to appeal to the Court of Appeals, which concerned Plaintiff’s claim against the Apollo Lenders for breach of the Pledge Agreement in connection with the strict foreclosure and Plaintiff’s claims against the Spruce Defendants and Apollo Lenders for tortious interference with contract.  On April 23, 2024, the Court of Appeals denied Plaintiff’s motion for leave to appeal to the Court of Appeals, which concerned Plaintiff’s claims against Apollo Commercial Real Estate Finance, Inc. and Apollo Global Management, Inc. for tortious interference with contract.

On January 13, 2023, the Apollo Lenders filed their answer and affirmative defenses to the Company’s Second Amended Complaint together with crossclaims against 111 W57th Mezz Investor LLC, Spruce Capital Partners LLC, Joshua Crane, Robert Schwartz, Michael Stern, Kevin Maloney, 111 West 57th Sponsor LLC, 111 West 57th Control LLC, and 111 West 57th Manager LLC (the “Crossclaim Defendants”). The crossclaims were for (1) contribution against all Crossclaim Defendants; (2) indemnification against 111 W57th Mezz Investor LLC, Spruce Capital, Crane, and Schwartz; and (3) a declaratory judgment that 111 W57th Mezz Investor LLC, through Spruce Capital, Crane, and Schwartz, has indemnified the Apollo Lenders against any and all loss that the Apollo Lenders have incurred or may incur in defending against this case. On January 23, 2023, the Apollo Lenders filed a notice of voluntary discontinuance without prejudice, voluntarily discontinuing their first crossclaim for contribution only as it was brought against Stern, Maloney, Sponsor, 111 West 57th Control LLC, and 111 West 57th Manager LLC. On April 30, 2024, the Apollo Lenders filed a motion for an order of discontinuance of their crossclaims, which the Court granted on June 7, 2024, and which was entered on June 12, 2024.

On July 12, 2024, Plaintiff served a motion for leave to appeal to the Court of Appeals the judgment, to the extent it was final, against Apollo Lenders, Spruce Capital Partners LLC, Joshua Crane, and Robert Schwartz.  Also on July 12, 2024, Plaintiff filed a notice of appeal to the First Department of the trial court’s order granting Apollo Lenders’ motion for an order of discontinuance of their crossclaims.

On January 30, 2023, Defendant 111 W57 Mezz Investor LLC filed its answer to Plaintiff’s Second Amended Complaint. Because the Court has resolved the motions to dismiss, discovery has recommenced, and Plaintiffs are actively seeking the production of documents.

Since the Company is not a party to the Loan Agreements, it does not have access to communications with the lenders, except for those individual communications that the Sponsor has elected to share or that have been produced in the ongoing litigation.  The Company has continued to demand access to such information, including access to the books and records for the 111 West 57^th Property both under the JV Agreement and as part of the Sponsor Action and the Lender Action. For additional information with regard to the Company’s investment in the 111 West 57^th Property and the Company’s recording of an impairment of its equity investment in the 111 West 57^th Property in 2017, see Note 3.

14

AMBASE CORPORATION AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

111 West 57th Investment LLC, et al. v. Kasowitz Benson Torres LLP, et al., No. 151139/2024 (N.Y. Sup. Ct.). On June 27, 2024, 111 West 57th Investment LLC, derivatively on behalf of 111 West 57th Partners LLC and 111 West 57th Mezz 1 LLC, and 111 West 57th Manager Funding LLC, derivatively on behalf of 111 West 57th Manager LLC (collectively, “Plaintiffs”), filed a Complaint against Kasowitz Benson Torres LLP and Douglas B. Heitner (collectively, “Defendants”) in the Supreme Court of the State of New York, County of New York. Plaintiffs’ claims arise out of Defendants’ representation of 111 West 57th Partners LLC, 111 West 57th Mezz 1 LLC, and 111 West 57th Manager LLC in connection with the real estate development project of 111 West 57th Street (the “Project”) and related financing and other transactions, while simultaneously representing persons and entities with interests adverse to and in conflict with 111 West 57th Partners LLC’s, 111 West 57th Mezz 1 LLC’s, and 111 West 57th Manager LLC’s interests (and the interests of other members of these represented entities), including but not limited to: Michael Stern, Kevin Maloney, and various entities owned and/or controlled by them.  Specifically, in representing 111 West 57th Partners LLC, 111 West 57th Mezz 1 LLC, and 111 West 57th Manager LLC throughout the restructuring of the financing and the raising of capital for the Project, including, without limitation, the New York Uniform Commercial Code “strict foreclosure” in 2017 on the Project, Defendants acted to the detriment of these clients to benefit their other, longtime clients, resulting in 111 West 57th Partners LLC losing an extremely valuable asset in the strict foreclosure.  Plaintiffs assert claims for breach of fiduciary duty and legal malpractice.  Plaintiffs seek to recover money damages, improperly paid legal fees, costs, attorneys’ fees, and such other relief as is just and proper (together with interest thereon).  On July 2, 2024, Plaintiff voluntarily discontinued their claims, without prejudice and without costs, as against Defendant Douglas B. Heitner.  For additional information with regard to the Company’s investment in the 111 West 57th Property, see Note 3.

AmBase Corp. et al. v. 111 West 57th Sponsor LLC et al., No. 651782/2024 (N.Y. Sup. Ct.). On April 4, 2024, AmBase Corporation, 111 West 57th Manager Funding LLC, and 111 West 57th Investment LLC, on behalf of itself and derivatively on behalf of 111 West 57th Partners LLC and 111 West 57th Mezz 1 LLC (collectively, “Plaintiffs”), filed a Summons with Notice against 111 West 57th Sponsor LLC, 111 West 57th Control LLC, 111 West 57th Developer LLC, Kevin Maloney, Michael Stern, JDS Construction Group LLC, JDS Development LLC, PMG Construction Group LLC, Property Markets Group, Inc., 111 Construction Manager LLC, Manager Member 111W57 LLC, and John and Jane Does 1–10 (collectively, “Defendants”) in the Supreme Court of the State of New York, County of New York. Plaintiffs’ claims arise out of alleged fraudulent transfers by, between, and/or to Defendants before and during the pendency of the underlying litigation AmBase Corp. et al. v. 111 West 57th Sponsor LLC et al., Index No. 652301/2016.  Specifically, despite knowing of contractual agreements, obligations, and/or claims between Plaintiffs and the Defendants, following the commencement of the suit by Plaintiffs, Defendants allegedly continued to make transfers and/or incur obligations in violation of the law, for no consideration or equivalent value, which rendered the transferor(s) insolvent (or when they were already insolvent), and rendering the transferor(s) unable to meet debts as they become due, unable to pay actual or future creditors, unable to meet business/transaction obligations as they arise, and/or with the actual intent to hinder, delay, and/or defraud Plaintiffs and other creditors.  The Summons with Notice further states that, upon information and belief, the scheme included the transfer to one or more insider(s) and or their affiliates, principals, and/or agents.  The scheme was allegedly concealed from Plaintiffs, who were not given the opportunity to consent or to dissent.  Plaintiffs allege that they have suffered damages and demand relief of no less than $100 million plus Plaintiffs’ own attorneys’ fees and costs, as well as restitution, constructive trust, the voiding of the fraudulent conveyances, statutory remedies, and such other and further relief as the Court deems proper.  For additional information with regard to the Company’s investment in the 111 West 57th Property, see Note 3.

AmBase Corp., et al. v. ACREFI Mortgage Lending LLC, et al. In June 2018, the Company initiated another litigation in the NY Court, Index No. 655031/2017, (the “Apollo Action”). The defendants in the Apollo Action were ACREFI Mortgage Lending, LLC, Apollo Credit Opportunity Fund III AIV I LP, AGRE Debt 1 – 111 W 57, LLC, and Apollo Commercial Real Estate Finance, Inc. (collectively, the “Apollo Defendants”). In the Apollo Action, the Company alleged that the Apollo Defendants aided and abetted the Sponsor, Stern, and Maloney in breaching their fiduciary duties to the Company in connection with the 111 West 57th Property and tortiously interfered with the JV Agreement. The Company was seeking damages as well as punitive damages for tortious interference with the JV Agreement and aiding and abetting the Sponsor’s breaches of their fiduciary duties to the joint venture. The Apollo Defendants filed a motion to dismiss on August 17, 2018. On October 22, 2019, the NY Court entered an order dismissing the Company’s complaint in the Apollo Action in its entirety. On November 8, 2019, the NY Court entered judgment (the “Apollo Dismissal”) dismissing the Apollo Action in favor of the Apollo Defendants. On December 10, 2019, the Company filed a notice of appeal seeking the appeal of the Apollo Dismissal. On August 7, 2020, the Company perfected its appeal of the Apollo Dismissal. After Investment LLC filed its motion to amend the complaint in the Lender Action to add claims against Apollo, the parties to the Apollo Action filed a stipulation to withdraw the appeal in the Apollo Action. For additional information with regard to the Company’s investment in the 111 West 57th Property, see Note 3.

15

AMBASE CORPORATION AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

AmBase Corp., et al. v. Custom House Risk Advisors, Inc., et al. On April 2, 2020, the Company initiated litigation in the United States District Court for the Southern District of New York, Case No. 1:20-cv-02763-VSB (the “Custom House Action”). The defendants in the Custom House Action were Custom House Risk Advisors, Inc. and Elizabeth Lowe (collectively, the “Custom House Defendants”). In the Custom House Action, the Company alleged that the Custom House Defendants (a) aided and abetted Sponsor, Stern, and Maloney in breaching their fiduciary duties to the Company by structuring an insurance policy to the personal benefit of Sponsor, Stern and Maloney and the detriment of the 111 West 57th Project and concealing the structure and ownership of the insurance policy from the Company and (b) committed fraud by making material misrepresentations about the terms of the policy to the Company, inducing the Company to contribute additional capital to the 111 West 57th Project to cover the costs of the insurance policy. The Company sought damages as well as disgorgement of profits the Custom House Defendants earned from their wrongful conduct. On April 10, 2020, the Custom House Defendants waived service of process. In an agreement dated July 31, 2020, the Company and the Custom House Defendants agreed to certain terms for a settlement and entered into a settlement agreement which requires that the Custom House Defendants satisfy certain conditions prior to any dismissal of the Custom House Action. On December 6, 2021, the Court approved a stipulation dismissing the Company’s claims and agreed to retain jurisdiction to enforce the settlement agreement.   For additional information with regard to the Company’s investment in the 111 West 57^th Property, see Note 3.

With respect to its disputes and litigation relating to its interest in the 111 West 57th Property, the Company is pursuing, and will continue to pursue, other options to realize the Company’s investment value, various legal courses of action to protect its legal rights, recovery of its asset value from various sources of recovery, as well as considering other possible economic strategies, including the possible sale of the Company’s interest in and/or rights with respect to the 111 West 57^th Property; however, there can be no assurance that the Company will prevail with respect to any of its claims.

The Company can give no assurances regarding the outcome of the matters described herein, including as to the effect of Spruce’s actions described herein, whether the Sponsor will perform their contractual commitments to the Company under the JV Agreement, as to what further action, if any, the lenders may take with respect to the project, as to the ultimate resolution of the ongoing litigation proceedings relating to the Company’s investment interest in the 111 West 57^th Property, as to the ultimate effect of the Sponsor’s, the Company’s or the lenders’ actions on the project, as to the completion or ultimate success of the project, or as to the value or ultimate realization of any portion of the Company’s equity investment in the 111 West 57^th Property. For additional information with regard to the Company’s investment in the 111 West 57^th Property, see Note 3.

While the Company’s management is evaluating future courses of action to protect and/or recover the value of the Company’s equity investment in the 111 West 57^th Property, the adverse developments make it uncertain as to whether any such courses of action will be successful. Any such efforts are likely to require sustained effort over a period of time and substantial additional financial resources. Inability to recover all or most of such value would, in all likelihood, have a material adverse effect on the Company’s financial condition and future prospects. The Company can give no assurances with regard to if it will prevail with respect to any of its claims.

Note 7 – Litigation Funding Agreement

In 2017, the Company entered into a Litigation Funding Agreement (the “2017 LFA”) with Mr. R.A. Bianco, to provide litigation funding to the Company for litigation costs in connection with the Company’s legal proceedings relating to the Company’s equity investment in the 111 West 57^th Property.

In 2019, after receiving approval from the Special Committee, the Company and Mr. R.A. Bianco entered into an amendment to the 2017 LFA (the “2019 LFA Amendment”). In summary the 2019 LFA Amendment provided for the release of Mr. R.A. Bianco from all further funding obligations under the 2017 LFA and that, in the event the Company receives any litigation proceeds from the 111 West 57^th Litigation, such litigation proceeds shall be distributed as follows:

(i) first, 100% to the Company in an amount equal $7,500,000; and

(ii) thereafter, any additional amounts shall be distributed (a) 75% to the Company and (b) 25% to Mr. R.A. Bianco.

16

AMBASE CORPORATION AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

Note 8 – Loan(s) Payable – Related Party

The Company and Mr. R.A. Bianco entered into an agreement(s) for Mr. R.A. Bianco to provide senior loan(s) to the Company for working capital. The loan(s) are due on the earlier of the date the Company receives funds from any source, (excluding funds received by the Company by any litigation funding entity to fund any of the 111 West 57^th legal proceedings), sufficient to pay all amounts due under the loan(s), including all accrued interest thereon, including without limitation, from a settlement of the 111 West 57^th legal proceedings or (b) the date(s) indicated herein.

The Company and Mr. R.A. Bianco further agreed that amounts due pursuant to the loan(s) plus interest can be converted by Mr. R.A. Bianco, at his option, into a litigation funding agreement pari-pasu with any litigation funding agreement entered into by the Company with a litigation funding entity.

Information regarding the loan(s) payable is as follows: ($ in thousands)

Date of loan(s)	Rate			Due Date	December 31, 2023
February 2023		6.50	%	February 28, 2025	$	300
April 2023		6.50	%	April 30, 2025		325
May 2023		6.50	%	May 31, 2025		310
June 2023		7.00	%	June 30, 2025		330
July 2023		7.00	%	July 31, 2025		333
August 2023		7.00	%	August 31, 2025		250
October 2023		7.00	%	October 31, 2025		300
November 2023		7.00	%	November 30, 2025		450
December 2023		7.00	%	December 31, 2025		600
					$	3,198

Information regarding accrued interest expense on the loan(s) payable is as follows:

(in thousands)	June 30, 2024		December 31, 2023
Accrued interest expense	$	-	$	85

In January 2024 through March 2024, the Company and Mr. R.A. Bianco entered into additional agreements pursuant to which Mr. R.A. Bianco made additional loans to the Company aggregating $350,000, for use as working capital in accordance with the same terms of the loan(s) payable noted herein.

In April 2024, with funds received from the Equity Offering, the Company repaid Mr. R.A. Bianco the full amount of the loan(s) payable outstanding, plus accrued interest. For additional information, see Note 9.

For additional information regarding the Company’s litigation funding effort, see Note 1. For additional information regarding the Company’s legal proceedings relating to the 111 West 57^th Property, including the Company’s challenge to the Strict Foreclosure, see Note 3 and Note 6.

17

AMBASE CORPORATION AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

Note 9 - Stockholders’ Equity

As disclosed in the Company’s periodic financial reports, as previously filed with the Securities and Exchange Commission (“SEC”), on February 28, 2024, the Company commenced a private placement offering (the “Equity Offering”) of shares of the Company’s common stock (the “Shares”).

On April 1, 2024, the Company completed the issuance and sale of all the Shares in the Equity Offering in accordance with the terms and conditions thereof, including Shares purchased by an institutional investor not affiliated with the Company and Shares purchased by BARC Investments, LLC, an affiliate of the Company owned and controlled by two of the Company’s directors and their sibling.  The Shares sold consisted of authorized unissued shares and treasury shares held. The offer and sale of the Shares in the Equity Offering was completed in reliance on the exemption from registration under Rule 506(c) of Regulation D promulgated under Section 4(a)(2) of the Securities Act of 1933, as amended.  The Equity Offering is more fully described in the Equity Offering documents and disclosed in the Company’s reports as previously filed with the SEC.

Summary information of private placement Equity Offering is as follows:

($ in thousands, except per share data)

Number of Shares purchased by BARC		42,950,460
Number of Shares purchased by others		1,250,000
Total number of Shares offered and purchased		44,200,460
Equity Offering – purchase price per Share	$	0.20
Total proceeds received from the Equity Offering	$	8,840

At the Company’s June 2, 2024, Annual Meeting of Stockholders, the Company’s stockholders approved an amendment to the Company’s Restated Certificate of Incorporation to increase the number of authorized shares of the Company’s common stock. A copy of the Company’s Amended and Restated Certificate of Incorporation as filed and recorded with the Secretary of State of the State of Delaware effective as of July 23, 2024, is filed as Exhibit 3.1 to this Quarterly Report on Form 10-Q for the quarter ended June 30, 2024.

Authorized common stock consists of the following:

(shares in thousands)	July 23, 2024		December 31, 2023
Par value	$	0.01	$	0.01
Authorized shares		200,000		85,000
Issued shares		84,938		46,410
Outstanding shares		84,938		40,738

Note 10 - Subsequent Events

The Company has performed a review of events subsequent to the balance sheet dated June 30, 2024, through the filing of these interim financial statements.  Other than as discussed herein, the Company has no events, subsequent to June 30, 2024, and through the date these unaudited condensed consolidated financial statements were issued.

18

AMBASE CORPORATION AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Statement for Forward-Looking Information

This quarterly report together with other statements and information publicly disseminated by the Company may contain certain 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 Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted or quantified. 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. When used in this Quarterly Report, the words “estimates,” “expects,” “anticipates,” “believes,” “plans,” “intends” and variations of such words and similar expressions are intended to identify forward-looking statements that involve risks and uncertainties.  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 those set forth in “Item 1A, Risk Factors” and elsewhere in the Company’s Annual Report on Form 10-K and in the Company’s other public filings with the Securities and Exchange Commission including, but not limited to: (i) risks with regard to the ability of the Company to continue as a going concern; (ii) assumptions regarding the outcome of legal and/or tax matters, based in whole or in part upon consultation with outside advisors; (iii) risks arising from unfavorable decisions in tax, legal and/or other proceedings; (iv) transaction volume in the securities markets; (v) the volatility of the securities markets; (vi) fluctuations in interest rates; (vii) risks inherent in the real estate business, including, but not limited to, insurance risks, tenant defaults, risks associated with real estate development activities, changes in occupancy rates or real estate values; (viii) changes in regulatory requirements which could affect the cost of doing business; (ix) general economic conditions; (x) risks with regard to whether or not the Company’s current financial resources will be adequate to fund operations over the next twelve months from financial statement issuance date and/or continue operations; (xi) changes in the rate of inflation and the related impact on the securities markets; (xii) changes in federal and state tax laws and (xiii) additionally, there is risk relating to assumptions regarding the outcome of tax matters, based in whole or in part upon consultation with outside advisors; risk relating to potential unfavorable decisions in tax proceedings; risks regarding changes in, and/or interpretations of federal and state income tax laws; and risk of IRS and/or state tax authority assessment of additional tax plus interest. These are not the only risks that we face. There may be additional risks that we do not presently know of or that we currently believe are immaterial which could also impair our business and financial position.

Undue reliance should not be placed on these forward-looking statements, which are applicable only as of the date hereof. The Company undertakes no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this Quarterly Report or to reflect the occurrence of unanticipated events. Accordingly, there is no assurance that the Company’s expectations will be realized.

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 and in Part II – Item 8 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

BUSINESS OVERVIEW

AmBase Corporation (the “Company” or “AmBase”) is a Delaware corporation that was incorporated in 1975.  AmBase is a holding company.  At June 30, 2024, the Company’s assets consisted primarily of cash and cash equivalents. The Company is engaged in the management of its assets and liabilities.

In June 2013, the Company purchased an equity interest in a real estate development property through a joint venture agreement to purchase and develop real property located at 105 through 111 West 57^th Street in New York, New York (the “111 West 57^th Property”). The Company is engaged in material disputes and litigation with regard to the 111 West 57^th Property. Despite ongoing litigation challenging the legitimacy of the actions taken in connection with the “Strict Foreclosure”, (as defined and further discussed herein), the Company recorded an impairment for the full amount of its equity investment in the 111 West 57th Property in 2017. Prior to the Strict Foreclosure, the carrying value of the Company’s equity investment in the 111 West 57^th Property represented a substantial portion of the Company’s assets and net equity value.

19

AMBASE CORPORATION AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

For additional information concerning the Company’s recording of an impairment of its equity investment in the 111 West 57^th Property in 2017 and the Company’s legal proceedings relating to the 111 West 57^th Property, including the Company’s challenge to the Strict Foreclosure, see Part I – Item 1 – Note 3 and Note 6 to the Company’s unaudited condensed consolidated financial statements.

FINANCIAL CONDITION AND LIQUIDITY

The Company’s assets at June 30, 2024, aggregated $434,000 consisting of cash and cash equivalents of $434,000.  At June 30, 2024, the Company’s liabilities aggregated $1,713,000.  Total stockholders’ deficit was $1,279,000.

A fundamental principle of the preparation of financial statements in accordance with GAAP is the assumption that an entity will continue in existence as a going concern, which contemplates continuity of operations and the realization of assets and settlement of liabilities occurring in the ordinary course of business. In accordance with this requirement, the Company has prepared its accompanying unaudited condensed consolidated financial statements assuming the Company will continue as a going concern.

The Company has incurred operating losses and used cash for operating activities for the past several years. The Company has continued to keep operating expenses at a reduced level; however, there can be no assurance that the Company’s current level of operating expenses will not increase or that other uses of cash will not be necessary.  The Company believes that based on its current level of operating expenses, its existing cash and cash equivalents may not be sufficient to cover operating cash needs through the twelve month period from the financial statement reporting date.  Based on the above factors, management determined there is substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The financial statements do not include adjustments to the carrying value of assets and liabilities, which might be necessary should the Company not continue in operation.

In order to continue as a going concern, the Company must take steps to manage its current level of cash and cash equivalents, through various ways, including but not limited to, raising additional capital through the sale of equity or debt securities or long-term borrowings, which may include additional borrowings from affiliates of the Company, litigation funding agreements, reducing operating expenses, and seeking recoveries from various sources.  There can be no assurance that the Company will be able to adequately implement these cash management measures, in whole or in part or raise capital or obtain financing on terms acceptable to the Company, if at all.

In June 2013, the Company purchased an equity interest in the 111 West 57^th Property. The Company is engaged in material disputes and litigation with regard to the 111 West 57^th Property. Despite ongoing litigation challenging the legitimacy of the actions taken in connection with the “Strict Foreclosure”, (as defined and further discussed herein), in accordance with GAAP, the Company recorded an impairment for the full amount of its equity investment in the 111 West 57th Property of $63,745,000 in 2017.  Prior to the Strict Foreclosure, the carrying value of the Company’s equity investment in the 111 West 57^th Property represented a substantial portion of the Company’s assets and net equity value.

For additional information concerning the Company’s recording of an impairment of its equity investment in the 111 West 57^th Property and the Company’s legal proceedings relating to the 111 West 57^th Property, including the Company’s challenge to the Strict Foreclosure, see Part I – Item 1 – Note 3 and Note 6 to the Company’s unaudited condensed consolidated financial statements.

With respect to its disputes and litigation relating to its interest in the 111 West 57th Property, the Company is pursuing, and will continue to pursue, other options to realize the Company’s investment value, various legal courses of action to protect its legal rights, recovery of its asset value from various sources of recovery, as well as considering other possible economic strategies, including the possible sale of the Company’s interest in and/or rights with respect to the 111 West 57^th Property; however, there can be no assurance that the Company will prevail with respect to any of its claims.

The Company can give no assurances regarding the outcome of the matters described herein, including as to the effect of Spruce’s actions described herein, whether the Sponsors will perform their contractual commitments to the Company under the JV Agreement, as to what further action, if any, the lenders may take with respect to the project, as to the ultimate resolution of the ongoing litigation proceedings relating to the Company’s investment interest in the 111 West 57^th Property, as to the ultimate effect of the Sponsors’, the Company’s or the lenders’ actions on the project, as to the completion or ultimate success of the project, or as to the value or ultimate realization of any portion of the Company’s equity investment in the 111 West 57^th Street. For additional information with regard to the Company’s investment in the 111 West 57^th Property and the legal proceedings related thereto, see Part I – Item 1 – Note 3 and Note 6 to the Company’s unaudited condensed consolidated financial statements.

20

AMBASE CORPORATION AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

While the Company’s management is evaluating future courses of action to protect and/or recover the value of the Company’s equity investment in the 111 West 57^th Property, the adverse developments make it uncertain as to whether any such courses of action will be successful. Any such efforts are likely to require sustained effort over a period of time and substantial additional financial resources. Inability to recover all or most of such value would in all likelihood have a material adverse effect on the Company’s financial condition and future prospects.  The Company can give no assurances with regard to if it will prevail with respect to any of its claims.

As previously disclosed in a Current Report on Form 8-K as filed with the Securities and Exchange Commission on February 28, 2024, the Company commenced a private placement offering (the “Equity Offering”) of up to 44,200,460 shares (the “Shares”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”) for $0.20 per share of Common Stock.

On April 1, 2024, the Company completed the issuance and sale of all Shares in the Equity Offering on the previously disclosed terms and conditions. The offer and sale of the Shares in the Equity Offering was completed in reliance on the exemption from registration under Rule 506(c) of Regulation D promulgated under Section 4(a)(2) of the Securities Act of 1933, as amended.  Total proceeds received from the Equity Offering were $8,840,000.  For additional information, see Part I – Item 1 – Note 9 to the Company’s unaudited condensed consolidated financial statements.

The Company will continue to consider and explore other litigation funding agreements with third party litigation funders that it could enter into for portions of the litigation costs for up to $5 million of funding, at market terms to be agreed upon at such times.  In general, litigation funding agreements are structured so that the litigation funder would receive back their initial funding amount first (i.e. before any recovery is received by the Company), plus an additional multiple ranging from 1.0 times to 3.5 times the amount funded (depending on various factors), plus depending on the funder, additional fees, expenses, interest and potentially an additional percentage of the total recovery received. There can be no assurance that the Company would be able to secure any such additional litigation funding on acceptable terms or at all.

In 2017, the Company entered into a Litigation Funding Agreement (the “LFA”) with Mr. R.A. Bianco. Pursuant to the LFA, Mr. R.A. Bianco agreed to provide litigation funding to the Company, to satisfy actual documented litigation costs and expenses of the Company, including attorneys’ fees, expert witness fees, consulting fees and disbursements in connection with the Company’s legal proceedings related to the Company’s equity investment in the 111 West 57th Property. In 2019, the Company and Mr. R.A. Bianco entered into an amendment to the LFA (the “Amendment). For additional information including the terms of the Litigation Funding Agreement, as amended by the Amendment, see Part I – Item 1 – Note 7 to the Company’s unaudited condensed consolidated financial statements.

For the six months ended June 30, 2024, cash of $5,286,000 was used by operations as a result of the payment of operating expenses and prior year accruals.

For the six months ended June 30, 2023, cash of $1,525,000 was used by operations as a result of the payment of operating expenses and prior year accruals.

Accounts payable and accrued liabilities as of June 30, 2024, decreased from December 31, 2023, principally relating to the payment of outstanding accrued expenses in April 2024, with funds received from the Equity Offering.  For additional information, see Part I – Item 1 – Note 9 to the Company’s unaudited condensed consolidated financial statements.

Loan(s) payable – related party was $- as of June 30, 2024, compared to $3,198,000 as of December 31, 2023, relating to loans made to the Company from Mr. R.A. Bianco, for working capital. In January 2024 through March 2024, the Company and Mr. R.A. Bianco entered into additional agreements pursuant to which Mr. R.A. Bianco made additional loans to the Company aggregating $350,000, for use as working capital. In April 2024, with funds received from the Equity Offering, the Company repaid Mr. R.A. Bianco the full amount of the loan(s) payable outstanding plus accrued interest. For additional information, see Part I – Item 1 – Note 8 to the Company’s unaudited condensed consolidated financial statements.

There are no other material commitments for capital expenditures as of June 30, 2024.  Inflation has had no material impact on the business and operations of the Company.

21

AMBASE CORPORATION AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

Results of Operations for the Three Months and Six Months Ended June 30, 2024 vs. the Three Months and Six Months Ended June 30, 2023

The Company recorded a net loss of $1,935,000 or $0.02 per share and $3,774,000 or $0.06 per share in the three months and six months ended June 30, 2024, respectively, compared to a net loss of $1,269,000 or $0.03 per share and $2,489,000 or $0.06 per share in the respective 2023 periods.

Compensation and benefits were $352,000 and $711,000 in the three months and six months ended June 30, 2024, respectively, compared to $347,000 and $732,000 in the respective 2023 periods.  The decrease in the six month period ended June 30, 2024, versus the respective 2023 period, is due to a decrease in compensation related expenses recorded in the 2024 six month period.

Professional and outside services increased to $1,570,000 and $2,881,000 in the three months and six months ended June 30, 2024, respectively, compared to $813,000 and $1,541,000 in the respective 2023 periods.  The increase in the 2024 periods as compared to the 2023 periods is principally the result of a higher level of legal and professional fees incurred in 2024 in connection with the Company’s legal proceedings relating to the Company’s investment in the 111 West 57^th Property.  For additional information with regard to the Company’s investment in the 111 West 57^th Property and the legal proceedings related thereto, see Part I – Item 1 – Note 3 and Note 6 to the Company’s unaudited condensed consolidated financial statements.

Property operating and maintenance expenses were $6,000 and $10,000 for the three months and six months ended June 30, 2024, respectively, compared to $2,000 and $10,000 in the respective 2023 periods.  The increase in the 2024 three months period versus the respective 2023 period is principally due to timing of payments in the three months and six months ended June 30, 2024, compared to the respective June 30, 2023, periods.

Insurance expenses were $12,000 and $44,000 in the three months and six months ended June 30, 2024, respectively, compared to $57,000 and $115,000 in the respective 2023 periods.  The decrease is generally due to a decrease in certain policy coverages in the three months and six months ended June 30, 2024, compared to the respective 2023 periods.

Other operating expenses were $65,000 and $84,000 in the three and six months ended June 30, 2024, respectively, compared with $28,000 and $41,000 in the respective 2023 periods.  The increase in the June 30, 2024, three and six months ended compared to the June 30, 2023, three and six months ended is due to a generally higher level of related expenses in the respective 2024 periods.

Interest income in the three months and six months ended June 30, 2024, was $19,000 and $19,000, respectively, compared with $- and $1,000 in the respective 2023 periods.  The increased interest income in the June 30, 2024, three and six month periods is due to a higher level of cash and cash equivalents in the 2024 periods versus the respective 2023 periods based on funds received from the Equity Offering in April 2024.  For additional information, see Part I – Item 1 – Note 9 to the Company’s unaudited condensed consolidated financial statements.

Interest expense in the three months and six months ended June 30, 2024, was ($51,000) and $63,000, respectively, compared with $22,000 and $51,000 in the respective 2023 periods.  The negative interest expense for the 2024 three month period is attributable to the reversal of interest expense owed to a professional firm for outstanding invoices that did not have to be paid due to the Company fully paying the outstanding amounts due in April 2024.  Interest expense for the 2024 six month period is attributable to interest expense relating to the loan(s) payable – related party. Interest expense for the 2023 period is attributable to interest expense to a professional firm for outstanding and unpaid professional fees and interest expense relating to the loan(s) payable – related party.  For additional information see Part I – Item 1 – Note 8 to the Company’s unaudited condensed consolidated financial statements.

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. For additional information including a discussion of income tax matters, see Part I – Item 1 – Note 5 to the Company’s unaudited condensed consolidated financial statements.

22

AMBASE CORPORATION AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

Item 4. CONTROLS AND PROCEDURES

Our disclosure controls and procedures include our controls and other procedures to ensure that information required to be disclosed in this and other reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure and to ensure that such information is recorded, processed, summarized and reported within the time periods.

Our Chief Executive Officer and Chief Financial Officer have conducted an evaluation of our disclosure controls and procedures as of June 30, 2024.  Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) are effective to ensure that the information required to be disclosed by us in the reports we file under the Exchange Act is recorded, processed, summarized and reported with adequate timeliness.

There have been no changes during the most recent fiscal quarter in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

For a discussion of the Company’s legal proceedings, see Part I - Item 1 - Note 6 to the Company’s unaudited condensed consolidated financial statements.

Item 1A. RISK FACTORS

There have been no material changes to the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, in response to Item 1A of Part I of Form 10-K.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

a. Not applicable

b. Not applicable

c. None

Common Stock Repurchase Plan

The Company’s common stock repurchase plan (the “Repurchase Plan”) allows for the repurchase by the Company of up to 10 million shares of its common stock in the open market.  The Repurchase Plan is conditioned upon favorable business conditions and acceptable prices for the common stock. Purchases under the Repurchase Plan may be made, from time to time, in the open market, through block trades or otherwise.  Depending on market conditions and other factors, purchases may be commenced or suspended any time or from time to time without prior notice.  No common stock repurchases have been made pursuant to the Repurchase Plan during the year to date 2024 period.

Item 3. DEFAULTS UPON SENIOR SECURITIES Not Applicable.

Item 4 . MINE SAFETY DISCLOSURES Not Applicable.

23

AMBASE CORPORATION AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

Item 5. OTHER INFORMATION

(a)          None.

(b)          None.

(c)          None.

Item 6. EXHIBITS

3.1*	Amended and Restated Certificate of Incorporation AmBase Corporation effective as of July 23, 2024.
10.1	Senior Promissory Note for $100,000, between Richard A. Bianco, the Company’s President and Chief Executive Officer (“Mr. R.A. Bianco”) and the Company (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K as filed with the SEC on January 26, 2024, and incorporated herein by reference).
10.2	Senior Promissory Note for $50,000, between Richard A. Bianco, the Company’s President and Chief Executive Officer (“Mr. R.A. Bianco”) and the Company (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K as filed with the SEC on February 8, 2024, and incorporated herein by reference).
10.3	Senior Promissory Note for $100,000, between Richard A. Bianco, the Company’s President and Chief Executive Officer (“Mr. R.A. Bianco”) and the Company (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K as filed with the SEC on February 27, 2024, and incorporated herein by reference).
10.4	Senior Promissory Note for $100,000, between Richard A. Bianco, the Company’s President and Chief Executive Officer (“Mr. R.A. Bianco”) and the Company (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K as filed with the SEC on March 11, 2024, and incorporated herein by reference).
10.5	Form of Subscription Agreement (filed as Exhibit 10.22 to the Company’s Annual Report on Form 10-K as filed with the SEC on March 18, 2024, and incorporated herein by reference).
10.6	Standby Purchase Agreement dated February 28, 2024, between BARC Investments LLC and the Company (filed as Exhibit 10.23 to the Company’s Annual Report on Form 10-K as filed with the SEC on March 18, 2024, and incorporated herein by reference).
31.1*	Rule 13a-14(a) Certification of Chief Executive Officer
31.2*	Rule 13a-14(a) Certification of Chief Financial Officer
32.1*	Section 1350 Certification of Chief Executive Officer
32.2*	Section 1350 Certification of Chief Financial Officer
101.1*	The following financial statements from AmBase Corporation’s quarterly report on Form 10-Q for the quarter ended June 30, 2024 formatted in XBRL: (i) Condensed Consolidated Statements of Operations (unaudited); (ii) Condensed Consolidated Balance Sheets (unaudited); (iii) Condensed Consolidated Statements of Cash Flow (unaudited); (iv) Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (unaudited); and (v) Notes to Condensed Consolidated Financial Statements (unaudited).
104.1*	The Cover Page from this Quarterly Report on Form 10-Q, formatted in Inline XBRL.

* filed herewith

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 Ferrara
By	JOHN FERRARA Vice President, Chief Financial Officer and Controller (Duly Authorized Officer and Principal Financial and Accounting Officer)
Date:	August 9, 2024

24

EX-31

Exhibit 3.1

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

OF AMBASE CORPORATION

The undersigned, being the duly elected Vice President and Chief Financial Officer of AmBase Corporation (the “Company”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware,

DOES HEREBY CERTIFY AS FOLLOWS:

1.          The name of the corporation is AmBase Corporation.  AmBase Corporation was originally incorporated under the name of CityHome Corporation.  The original Certificate of Incorporation of CityHome Corporation was filed with the Secretary of State of the State of Delaware on October 22, 1975.  A Certificate of Amendment of Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on June 11, 1987.  A Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on March 10, 1988.  A Certificate of Amendment of Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on May 19, 1989.  A Certificate of Amendment of Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on February 12, 1991.  A Certificate of Amendment of Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on June 15, 2016.

2.          The Amended and Restated Certificate of Incorporation attached hereto was duly authorized and adopted in accordance with the provisions of Section 242 and Section 245 of the General Corporation Law of the State of Delaware by the Board of Directors and the stockholders of the Company.

3.          The Amended and Restated Certificate of Incorporation be, and it hereby is, amended and restated in its entirety as attached hereto and shall be effective on the date of filing hereof.

IN WITNESS WHEREOF, the undersigned has signed this Amended and Restated Certificate of Incorporation under the seal of the Company.

AMBASE CORPORATION

/s/ John Ferrara

By:  John Ferrara, Vice President and Chief Financial Officer

July 9, 2024

ATTEST:

/s/ Richard A. Bianco

Richard A. Bianco

1

AMENDED AND RESTATED

CERTIFICATE OF INCORPOATION

OF

AMBASE CORPORATION

FIRST:  The name of the corporation (hereinafter called the “Company”) is AMBASE CORPORATION.

SECOND:  The registered office of the Company is to be located at 1209 Orange Street, in the City of Wilmington, in the County of New Castle, in the State of Delaware.  The name of its registered agent at that address is The Corporation Trust Company.

THIRD:  The purpose of the Company is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

FOURTH:  The total number of shares of all classes of stock which the Company is authorized to issue is 220,000,000.  All such shares are to have a par value and are classified as 20,000,000 shares of Cumulative Preferred Stock, each share of such class having a par value of $0.01 and 200,000,000 shares of Common Stock, each share of such class having a par value of $0.01.

The designations and the powers, preferences and rights, and the qualifications, limitations or restrictions of the Cumulative Preferred Stock and Common Stock of the Company are set forth in the following provisions:

SECTION A:  PROVISIONS RELATING TO CUMULATIVE PREFERRED STOCK

I. The Cumulative Preferred Stock may be issued from time to time in one or more series, the shares of each series to have such designations and powers, preferences and rights, and qualifications, limitations and restrictions thereof, as are stated and expressed herein and in the resolution or resolutions providing for the issue of such series adopted by the Board of Directors as hereafter provided.

2

II. Authority is hereby expressly granted to the Board of Directors of the Company, subject to the provisions of this Article Fourth, to authorize the issue of one or more series of Cumulative Preferred Stock, and with respect to each series to fix by resolution or resolutions providing for the issues of such series:

(a) The number of shares of Cumulative Preferred Stock which shall comprise such series and the distinctive designation thereof;

(b) The dividend rate or rates (which may be contingent upon the happening of certain events) on the shares of such series, the date or dates from which dividends shall accumulate as herein provided and the quarterly dates on which dividends, if declared, shall be payable;

(c) Whether or not the shares of such series shall be redeemable, the limitations and restrictions with respect to such redemption, the manner of selecting shares of such series for redemption if fewer than all shares are to be redeemed, and the amount, if any, in addition to any accrued dividends thereon which the holders of shares of such series shall be entitled to receive upon the redemption thereof, which amount may vary at different redemption dates and may be different with respect to shares redeemed through the operation of any purchase, retirement or sinking fund and with respect to shares otherwise redeemed;

(d) The amount in addition to any accrued dividends thereon which the holders of shares of such series shall be entitled to receive upon the voluntary or involuntary liquidation, dissolution or winding up of the Company, which amount shall not be less than par value but otherwise may vary depending on whether such liquidation, dissolution or winding up is voluntary or involuntary and, if voluntary, may vary at different dates (the amount so payable upon such involuntary liquidation, dissolution or winding up, exclusive of accrued dividends, being hereinafter sometimes called the “involuntary liquidation value”);

(e) Whether or not the shares of such series shall be subject to the operation of a purchase, retirement or sinking fund, and, if so, whether such purchase, retirement or sinking fund shall be cumulative or noncumulative, the extent to and the manner in which such fund shall be applied to the purchase or redemption of the shares of such series for retirement or to other corporate purposes and the terms and provisions relative to the operation thereof;

(f) Whether or not the shares of such series shall be convertible into or exchangeable for shares of stock of any other class or classes, or of any other series of the same class, or for any other securities of the Company, and if so convertible or exchangeable, the price or prices or the rate or rates of conversion or exchange and the method, if any, of adjusting the same;

(g) The voting powers, if any, of such series in addition to the voting powers provided in paragraphs X and XI of this Section A; and

(h) Any other preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof as shall not be inconsistent with the Section A.

III. All shares of any one series of Cumulative Preferred Stock shall be identical with each other in all respects, except that shares of any one series issued at different times may differ as to the dates from which dividends thereon shall be cumulative; and all series shall rank equally and be identical in all respects, except as permitted by the foregoing provisions of paragraph II of this Section A.

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IV. Before any dividends on any class or classes of stock of the Company ranking junior to the Cumulative Preferred Stock (other than dividends payable in shares of any class or classes of stock of the Company ranking junior to the Cumulative Preferred Stock) shall be declared or paid or set apart for payment, the holders of shares of Cumulative Preferred Stock of each series shall be entitled to such cash dividends, but only when and as declared by the Board of Directors out of funds legally available therefor, as they may be entitled to in accordance with the resolution or resolutions adopted by the Board of Directors providing for the issue of such series, payable quarterly on such dates as may be fixed in such resolution or resolutions in each year to holders of record on the respective dates not exceeding fifty (50) days preceding such dividend payment dates as may be determined by the Board of Directors in advance of the payment of each particular dividend.  Such dividends shall be cumulative from the date or dates fixed in the resolution or resolutions adopted by the Board of Directors providing for the issue of such series, which date or dates shall in no instance be more the ninety (90) days before or after the date of the initial issuance of shares of such series then to be issued.  Dividends in full shall not be declared or paid or set apart for payment on the Cumulative Preferred Stock of any one series for any dividend period unless dividends in full have been declared or paid or set apart payment on the Cumulative Preferred Stock of all series for all dividend periods terminating on the same or any earlier date.  When the dividends are not paid in full on all series of the Cumulative Preferred Stock, the shares of all series shall share ratably in the payment of dividends, including accumulations, if any, in accordance with the sums which would be payable on said shares if all dividends were declared and paid in full.  A “dividend period” is the period between any two consecutive dividend payment dates (or, when shares are originally issues, the period from the date from which dividends are cumulative to the first dividend payment date) as fixed for a particular series.  Accruals of dividends shall not bear interest.

V. In the event of any liquidation, dissolution nor winding up the Company, whether voluntary or involuntary, before any payment or distribution of the assets of the Company shall be made to or set apart for the holders of shares of any class or classes of stock of the Company ranking junior to the Cumulative Preferred Stock, the holders of the shares of each series of the Cumulative Preferred Stock shall be entitled to receive payment of the amount per share fixed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of the shares of such series, plus an amount equal to all dividends accrued thereon to the date of final distribution to such holders, but they shall be entitled to no further payment.  If, upon any liquidation, dissolution or winding up of the Company, the assets of the Company, or proceeds thereof, distributable among the holders of the shares of the Cumulative Preferred Stock shall be insufficient to pay in full the preferential amount aforesaid, then such assets, or the proceeds thereof, shall be distributed among such holders ratably in accordance with the respective amounts which would be payable on such shares if all amounts payable thereon were paid in full.  For the purposes of this paragraph V., the sale, conveyance, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all the property or assets of the Company or any subsidiary of the Company or a consolidation or merger of the Company or any subsidiary of the Company with one or more corporations shall not be deemed to be a liquidation, dissolution or winding up, voluntary or involuntary.

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VI. To the extent and (subject to the provisions of this paragraph VI and paragraphs VII through IX of this Section A) upon the terms fixed in the resolution or resolutions adopted by the Board of Directors providing for the issue of any such series, the Company, at the option of the Board of Directors, may redeem at any time the whole or from time to time any part of the Cumulative Preferred Stock of any series at the outstanding, at the amount fixed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of the series of such shares, plus in every case an amount equal to all accrued dividends with respect to each share so to be redeemed (the total sum so payable on any such redemption being in this Section A referred to as the “redemption price”).  Notice of every such redemption, stating the redemption date, the redemption price and the place of payment thereof, shall be mailed at least thirty (30) and not more than sixty (60) days in advance of the date designated for such redemption to the holders of record of the shares of Cumulative Preferred Stock so to be redeemed at their respective addresses as the same shall appear on the books of the Company.  A similar notice shall be published at least once in a daily newspaper printed in the English language and published and of general circulation in the Borough of Manhattan, the City of New York.  In order to facilitate the redemption of any shares of Cumulative Preferred Stock that may be selected for redemption as provided in this paragraph VI, the Board of Directors is authorized to cause the transfer books of the Company to be closed as to such shares at any time not exceeding fifty (50) days prior to the date designated for redemption thereof.  In case of the redemption of a part only of any series of Cumulative Preferred Stock at the time outstanding, the shares of such series so to be redeemed shall be selected in such manner as may be fixed in the resolution or resolutions adopted by the Board of Directors providing for the issue of such series, or in the event such manner of selection is not fixed in such resolution or resolutions, such shares shall be selected pro rata or by lot as the Board of Directors may from time to time determine.  The Board of Directors shall have full power and authority, subject to the limitations and provisions herein contained, to prescribe the terms and conditions upon which the Cumulative Preferred Stock shall be redeemed from time to time.

VII. If after the giving of such notice but before the redemption date specified therein, the Company shall deposit with a bank or trust company, having a capital and surplus of at least $5,000,000, in trust to be applied to the redemption of the shares of Cumulative Preferred Stock so called for redemption, the funds necessary for such redemption, then from and after the date of such deposit all rights of the holders of the shares of Cumulative Preferred Stock so called for redemption shall cease and terminate, excepting only the right to receive the redemption price therefore, but without interest, and such shares shall not thereafter be deemed to be outstanding.  Any funds so deposited which shall not be required for such redemption because of the exercise of any right of conversion or exchange subsequent to the date of such deposit shall be returned to the Company.  In case the holders of shares of Cumulative Preferred Stock which shall have been called for redemption shall not, within six (6) years after the date fixed for redemption, claim the amount deposited with respect to the redemption thereof, any such bank or trust company shall, upon demand, pay over to the Company such unclaimed amounts and thereupon such bank or trust company shall be relieved of all responsibility in respect thereof to such holder and such holder shall look only to the Company for the payment thereof.  Any interest accrued on funds so deposited shall be paid to the Company from time to time.

VIII. Shares of Cumulative Preferred Stock which have been redeemed or purchased or retired through the operation of a purchase, retirement or sinking fund or which have been converted into shares of any other class or classes of stock  of the Company ranking junior to the Cumulative Preferred Stock, upon compliance with any applicable provisions of the General Corporation Law of Delaware, s hall have the status of authorized and unissued shares of Cumulative Preferred Stock and may be reissued as a part of the series of which they were originally a part (if the terms of such series do not prohibit such reissue) or as part of a new series of Cumulative Preferred Stock to be created by resolution or resolutions of the Board of Directors or as part of any other series of Cumulative Preferred Stock the terms of which do not prohibit such reissue.

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IX. If at any time the Company shall have failed to pay dividends in full on the Cumulative Preferred Stock, thereafter and until dividends in full, including all accrued and unpaid dividends to the next preceding dividend payment date on the Cumulative Preferred Stock outstanding shall have been declared and set apart in trust for payment or paid, or if at any time the Company shall have failed to pay in full amounts payable with respect to any obligations to retire shares of the Cumulative Preferred Stock, thereafter and until such amounts shall have been paid in full or set apart in trust for payment, (a) the Company, without the affirmative vote or consent of the holders of at least 66 2/3% of the Cumulative Preferred Stock at the time outstanding, given in person or by proxy, either in writing or by resolution adopted at a special meeting called for the purpose, at which the holders of the Cumulative Preferred Stock shall vote separately as a class, regardless of series, shall not redeem less than all of the Cumulative Preferred Stock at such time outstanding, other than in accordance with paragraph XV of this Section A, and (b) the Company shall not purchase any Cumulative Preferred Stock except in accordance with a purchase offer made in writing to all holders of Cumulative Preferred Stock of all series upon such terms as the Board of Directors, in their sole discretion after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series, shall determine (which determination shall be final and conclusive) will result in fair and equitable treatment among the respective series; provided that (i) the Company, to meet the requirement of any purchase, retirement or sinking fund provisions with respect to any series, may use shares of such series acquired by it prior to such failure and then held by it as treasury stock and (ii) nothing shall prevent the Company from completing the purchase or redemption of shares of Cumulative Preferred Stock for which a purchase contract was entered into for any purchase, retirement or sinking fund purposes, or the notice of redemption of which was initially mailed,  prior to such default.

X. So long as any of the Cumulative Preferred Stock is outstanding the Company:

(a) Will not declare or pay, or set apart for payment, any dividends (other than dividends payable in shares of any class or classes of stock of the Company ranking junior to the Cumulative Preferred Stock), or make any distribution on any class or classes or stock of the Company ranking junior to the Cumulative Preferred Stock, and will not redeem, purchase or otherwise acquire, whether voluntarily, for a sinking fund or otherwise, any shares of any class or classes of stock of the Company ranking junior to the Cumulative Preferred Stock, if at the time of making such declaration, payment, setting apart, distribution, redemption, purchase or acquisition the Company shall be in default with respect to any dividend payable on or any obligation to retire shares of Cumulative Preferred Stock, provided that notwithstanding the foregoing the Company may at any time redeem, purchase or otherwise acquire shares of stock of any such junior class in exchange for, or out of the net cash proceeds from the concurrent sale of other shares of stock of any such junior class;

(b) Will not, without the affirmative vote or consent of the holders of at least 66 2/3% of all the Cumulative Preferred Stock at the time outstanding, given in person or by proxy, either in writing or by resolution adopted at a special meeting called for the purpose, at which the holders of the Cumulative Preferred Stock, regardless of series, shall vote separately as a class, (i) create any  other class or classes of stock ranking prior to the Cumulative Preferred Stock, either as to dividends or upon liquidation, or create any stock or other security convertible into or exchangeable for or evidencing the right to purchase any such stock so ranking prior to the Cumulative Preferred Stock, or increase the authorized number of shares of any such other class of stock or other security, or (ii) amend, later or repeal (by any means, including, without limitation, merger or consolidation) any of the provision of this Section A so as to materially adversely affect the preferences, rights or powers of the Cumulative Preferred Stock; and

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(c) Will not, without the affirmative vote or consent of the holders of at least 66 2/3% of any series of the Cumulative Preferred Stock at the time outstanding, given in person or by proxy, either in writing or by resolution adopted at a special meeting called for the purpose (the holders of such series of the Cumulative Preferred Stock consenting or voting, as the case may be, separately as a class), amend, alter or repeal (by any means, including, without limitation, merger or consolidation) any of the provisions herein or in the resolution or resolutions adopted by the Board of Directors providing for the issue of such series so as to materially adversely affect the preferences, rights or powers of the Cumulative Preferred Stock of such series.

The Company may, without any vote or consent of the holders of shares of any series of Cumulative Preferred Stock, (a) increase the number of shares of authorized Common Stock, whether or not the shares of one or more series of Cumulative Preferred Stock have general voting rights, and (b) increase the authorized number of shares of Cumulative Preferred Stock.

XI. Whenever dividends payable on all shares of the Cumulative Preferred Stock shall be in default in a n aggregate amount equal to six (6) full quarterly dividends on the shares of all Cumulative Preferred Stock then outstanding, the number of directors then constituting the Board of Directors of the Company shall ipso facto be increased by two (2), and the holders of the Cumulative Preferred Stock shall have, in addition to  any other voting rights, the exclusive and special right, voting separately as a class and without regard to series, to elect two (2) directors of the Company to fill such newly created directorships.  Whenever such right of the holders of the Cumulative Preferred Stock shall have vested, such right may be exercised initially either at a special meeting of such holders of the cumulative Preferred Stock called as provided in paragraph XII of this Section A, or any annual meeting of stockholders, and thereafter at annual meetings of stockholders.  The right of the holders of the Cumulative Preferred Stock voting separately as a class to elect members of the Board of Directors or the Company as aforesaid shall continue until such time as all dividends accumulated on all series of Cumulative Preferred Stock to the dividend payment date next preceding the date of any such determination shall have been paid in full, or declared and set apart in trust for payment, at which time the special right of the holders of the Cumulative Preferred Stock so to vote separately as a class for the election of directors shall terminate, subject to retesting in the event of each and every subsequent default in an aggregate amount equal to six (6) full quarterly dividends as above provided.  Upon such termination the number of directors constituting the Board of Directors shall be reduced as provided in paragraph XIV of this Section A.

XII. At any time when such special voting power shall have vested in the holders of the Cumulative Preferred Stock as provided in paragraph XI of this Section A, a proper officer of the Company shall, upon the written request of the holders of record of at least 10% of the Cumulative Preferred Stock then outstanding, regardless of series, addressed to the Secretary of the Company, call a special meeting of the holders of the Cumulative Preferred Stock for the purpose of electing directors.  Such meeting shall be held at the earliest practicable date at the place for the holding of annual meetings of stockholders of the Company.  If such meeting shall not be called by the proper officers of the Company within twenty (20) days after personnel service of the said written request upon the Secretary of the Company, or within twenty (20) days after mailing the same within the United States of America, by registered mail addressed to the Secretary of the Company at its principal office, the holders of record of at least 10% of the Cumulative Preferred Stock then outstanding, regardless of series, may designate in writing one of their number to call such meeting at the expense of the Company, and such meeting may be called by such person so designated upon the notice required for annual meetings of stockholders and shall be held at the place for the holding of annual meeting of stockholders of the Company.  Any holder of Cumulative Preferred Stock so designated shall have access to the stock books of the Company for the purpose of causing meetings of stockholders to be called pursuant to these provisions.  Notwithstanding the provisions of this paragraph XII, no such special meeting shall be called during the period within ninety (90) days immediately preceding the date fixed for the next annual meeting of stockholders.

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XIII. At any meeting held for the purpose of electing directors at which the holders of the Cumulative Preferred Stock shall have the special right, voting separately as a class, to elect directors as provided in paragraph XI of this Section A, the presence, in person or by proxy, of the holders of 33 1/3% of the Cumulative Preferred Stock then outstanding shall be required to constitute a quorum of such class for the election of any director by the holders of the Cumulative Preferred Stock as a class.  At any such meeting or adjournment thereof: (a) the absence of a quorum of the Cumulative Preferred Stock shall not prevent the election of directors other than those to be elected by the Cumulative Preferred Stock voting as a class and the absence of a quorum for the election of such other directors shall not prevent the election of the directors to be elected by the Cumulative Preferred Stock voting as a class; and (b) in the absence of either or both such quorums, a majority of the holders present in person or by proxy of the stock or stocks which lack a quorum shall have power to adjourn the meeting for the election of directors which they are entitled to elect from time to time without notice other than announcement at the meeting until a quorum shall be present.

XIV. During any period when the holders of the Cumulative Preferred Stock have the right to vote as a class for directors as provided in paragraph XI of this Section A: (a) the directors so elected by the holders of the Cumulative Preferred Stock shall continue in office until their successors shall have been elected by such holders or until termination of the right  of the holders or the Cumulative Preferred Stock to vote as a class for directors; and (b) any vacancies in the Board of Directors shall be filled only by vote of a majority (even if that be only a single director) of the remaining directors theretofore elected by the holders of the class or classes of stock which elected the director whose office shall have become vacant.  Immediately upon any termination of the right of holders of the Cumulative Preferred Stock to vote as a class for directors as provided in paragraph XI of the Section A: (a) the term of office of the directors then in office so elected by the holders of the Cumulative Preferred Stock shall terminate; and (b) the number of directors shall be such number as may be provided for in the By-Laws irrespective of any increase made pursuant to the provisions of said paragraph XI.

XV. If in any case the amounts payable with respect to any obligation to retire shares of the Cumulative Preferred Stock are not paid in full in the case of all series with respect to which such obligations exist, the number of shares of each of such series to be retired pursuant to any such obligations shall be in proportion to the respective amounts which would be payable on account of such obligations if all amounts payable in respect of such series were discharged in full.

XVI. No holder of Cumulative Preferred Stock shall have any pre-emptive right to subscribe to stock, obligations, warrants, rights to subscribe to stock or other securities of the Company of any class, whether now or hereafter authorized.

XVII. The term “class or classes of stock of the Company ranking junior to the Cumulative Preferred Stock” shall mean the Common Stock referred to in Section B of this Article Fourth and any other class or classes of stock of the Company hereafter authorized which shall rank junior to the  Cumulative Preferred Stock as to dividends or upon liquidation.

SECTION B:  PROVISIONS RELATING TO COMMON STOCK

I. Subject to the provision of law and the preference of the Cumulative Preferred Stock, dividends may be paid on the Common Stock of the Company at such time and in such amounts as the Board of Directors may deem advisable.

II. The Board of Directors of the Company is authorized to effect the elimination of shares of its Common Stock purchased or otherwise reacquired by the Company from the authorized capital stock or number of shares of the Company in the manner provided for in the General Corporation Law of Delaware.

III. No holder of Common Stock shall have any pre-emptive right to subscribe to stock, obligations, warrants, rights to subscribe to stock or other securities of the Company of any class whether now or hereafter authorized.

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SECTION C:  GENERAL

Subject to the provisions of law and the foregoing provisions of this Restated Certificate of Incorporation, the Company may issue shares of its Cumulative Preferred Stock or Common Stock, from time to time, for such consideration (not less than the par value or stated value thereof) as may be fixed by the Board of Directors, which is expressly authorized to fix the same in its absolute and uncontrolled discretion, subject as aforesaid.  Shares so issued, for which the consideration has been paid or delivered to the Company, shall be deemed fully paid stock, and shall not be liable to any further call or assessments thereon, and the holders of such shares shall not be liable for any further payments in respect of such shares.

FIFTH:  The directors shall be divided into three (3) classes:  the terms of office of those of the first class to expire at the annual meeting to be held during the calendar year 1986, the term of office of those of the second class to expire at the annual meeting to be held during the calendar year 1987 and the term of office of those of the third class to expire at the annual meeting to be held during the calendar year 1988.  At each annual meeting, commencing with the annual meeting to be held during the calendar year 1986, each of the successors to the directors of the class whose term shall have expired that year, shall be elected for a term running until the third annual meeting next succeeding  his election and until his successor shall have been duly elected and shall have qualified, except that, upon the filling of any vacancies in the Board of Directors occurring otherwise than by expiration of term of office, a successor shall be elected for the unexpired term and except that, if the number of directors be increased, the additional directors shall be divided among the three (3) classes.  The provisions of this Article Fifth may not be amended, altered or repealed unless such amendment, alteration or repeal, as the case may be, has been submitted to the stockholders of this Company at an annual or special meeting thereof and four-fifths (4/5) of the outstanding stock entitled to vote thereon, and four-fifth(4/5) of the outstanding stock of each class entitled to vote thereon as a class, has been voted in favor of such amendment, alteration or real, as the case may be.

SIXTH:  Any action that may be taken by the Stockholders of the Company at a meeting thereof may be taken by the Stockholders of the Company without such a meeting in accordance with the applicable requirements of Delaware law.

SEVENTH:  Except as may otherwise be provided pursuant to Section (A) of Article Fourth of this Restated Certificate of Incorporation in connection with rights of the holders of Cumulative Preferred Stock to elect additional directors under specified circumstances, any director may be removed from office only for cause and only by the affirmative vote of the holders of not less than four-fifths (4/5) of the outstanding stock entitled to vote in connection with the election of directors, voting together as a single class; provided, however, that where such removal is approved by a majority of the Disinterested Directors (as defined in Article Eighth), the affirmative vote of the holders of not less than a majority of the outstanding stock entitled to vote in connection with the election of directors, voting together as a single class, shall be required for approval of such removal.

EIGHTH:  (a) Higher Vote for Business Combinations.  In addition to any affirmative vote required by law or by this Restated Certificate of Incorporation or by the terms of any securities of the Company, and except as otherwise expressly provided in Section (b) or this Article Eighth, any Business Combination shall require the affirmative vote of: (i) the holders of not less than four-fifths (4/5) of the then outstanding Voting Stock of the Company; and (ii) the holders of not less than a majority of the then outstanding Voting Stock of the Company, other than stock held by any Interested Stockholder that is (or an Affiliate or Associate of which is) a party to such Business Combination or by any Affiliate or Associate of such Interested Stockholder, in each case voting together as a single class.  Such affirmative vote shall be required notwithstanding that a vote may not be required, or that a lesser  percentage may be specified, by law, by any other provision of this Restated Certificate of Incorporation, in any agreement with any national securities exchange or any other Person or otherwise.

(b)          When Higher Vote is Not Required.  He provision s of Section (a) of this Article Eighth shall not be applicable to any particular Business Combination, and such Business Combination shall require only such affirmative vote, if any, of the stockholders as is required by law and any other provision of this Restated Certificate of Incorporation, if there are one or more Disinterested Directors and the Business Combination shall have been approved by the affirmative vote of a majority of the Disinterested Directors, even if the Disinterested Directors do not constitute a quorum of the entire Board of Directors.

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(c)          Certain Definitions.  For purposes of this Article Eighth, the following terms shall have the following meanings:

(i) “Business Combination” shall mean:

(A)  any merger or consolidation of the Company or any Subsidiary with: (i) an Interested stockholder; or (ii) any other company (whether or not itself an Interested Stockholder) which is, or after such merger or consolidation would be, an Affiliate or Associate of an Interested Stockholder;

(B)  any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions, whether or not related) to or with an Interested Stockholder or an Affiliate or Associate of an Interested Stockholder of any assets of the Company or any Subsidiary having an aggregate Fair Market Value of $50,000,000 or more;

(C)  the issuance or transfer by the Company or any Subsidiary (in one transaction or a series of transactions, whether or not related) or any securities of the Company or any Subsidiary to an Interested Stockholder or an Affiliate or Associate of an Interested Stockholder, in exchange for cash, securities or other property (or a combination thereof) having an aggregate Fair Market Value of $50,000,000 or more (other than an issuance of securities upon conversion of convertible securities of the Company or a Subsidiary which were not acquired by such Interested Stockholder (or such Affiliate or Associate) from the Corporation or a Subsidiary);

(D)  the adoption of any plan or proposal for the liquidation or dissolution of the Company proposed by or on behalf of an Interested Stockholder or an Affiliate or Associate of an Interested Stockholder;

(E)  any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any Subsidiary or any other transaction (whether or not with or into or otherwise involving an Interested Stockholder) which has the effect, directly or indirectly, of increasing the percentage of the outstanding shares of: (i) any class of equity securities of the Company or any Subsidiary; or (ii) any class of securities of the Company or any Subsidiary convertible into equity securities of the Company or any Subsidiary, represented by securities of such class which are directly or indirectly owned by an Interested Stockholder and all of its Affiliates and Associates; or

(F)  any agreement, arrangement or understanding providing for any one or more of the actions specified in clauses (A) through (E) of this paragraph (i).

(ii)          “Affiliate” or “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), as in effect on July 1, 1985 (the term “registrant” in said Rule 12b-2 meaning, in this case, the Company or a Subsidiary).

(iii)         “Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act, as in effect on July 1, 1985;

(iv)         “Disinterested Director” shall mean any member of the Board of Directors of the Company who is neither the Interested Stockholder involved in the Business Combination or matter as to which a vote of Disinterested Directors is provided hereunder, nor an Affiliate, Associate, employee, agent, representative or nominee of such Interested Stockholder, or a relative of any of the foregoing, and who (A) was a member of the Board of Directors of the Company prior to the time that such Interested Stockholder became an Interested Stockholder, (B) is recommended or elected to succeed a Disinterested Director by the affirmative vote of a majority of Disinterested Directors then on the Board of Directors of the Company, or (c) is elected to the Board of Directors of the Company at the 1985 Annual Meeting of Stockholders.

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(v)         “Fair Market Value” shall mean (A) in the case of stock, the highest closing sale price during the 30-day period including and immediately preceding the date in question of a share of such stock on the Composite Tape for New York Stock Exchange Listed Stocks, or, if such stock is not reported on such Composite Tape, on the New York Stock Exchange or, if such stock is not listed on such Exchange, on the principal United States securities exchange registered under the Exchange Act on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing bid quotation with respect to a share of such stock during the 30-day period including and immediately preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotation System or any similar interdealer quotation system then in use, or, if no such quotation is available, the fair market value on the date in question of a share of such stock as determined by a majority of the Disinterested Directors in good faith; and (B) in the case of property other than cash or s tock, the fair market value of such property on the date in question as determined by a majority of the Disinterested Directors in good faith.

(vi)        “Interested Stockholder” shall mean any Person (other than the Company or any Subsidiary or any profit-sharing, employee stock ownership or other employee benefit plan of the Company or any Subsidiary, or any trustee of or fiduciary with respect to any such plan when acting in such capacity) who or which:

(A)    is, or was at any time within the two-year period immediately prior to the date in question, the Beneficial Owner of 5% or more of the voting power of the then outstanding Voting Stock of the Company or a Subsidiary; or

(B)     is an assignee of, or has otherwise succeeded to, any shares of Voting Stock of the Company or a Subsidiary of which an Interested Stockholder was the Beneficial Owner at any time within the two-hear period immediately prior to the date in question, if such assignment or succession shall have occurred in the course of a transaction, or series of transactions, not involving a public offering within the meaning of the  Securities Act of 1933, as amended, and the rules and regulations thereunder (or any subsequent provisions replacing such Act, rules and/or regulations).

For the purposes of determining whether a Person is an Interested Stockholder, the outstanding Voting Stock of the Company or a Subsidiary shall include unissued shares of Voting Stock of the Company or a Subsidiary, as the case may be, or which the Interested Stockholder is the Beneficial Owner but shall not include any other shares of Voting Stock of the Company or a Subsidiary which may be issuable pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, warrants or options, or otherwise, to any Person who is not the Interested Stockholder.

(vii) A “Person” shall mean any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity, as well as any syndicate or group deemed to be a person under Section 14(d)(2) of the Exchange Act.

(viii) “Subsidiary” shall mean any corporation of which the Company owns, directly or indirectly, (A) a majority of the outstanding shares or equity securities of such corporation, or (B) shares having a majority of the voting power represented by all of the outstanding shares of Voting Stock of such corporation.  For the purpose of determining whether a corporation is a Subsidiary, the outstanding Voting Stock and shares of equity securities thereof shall include unissued shares of which the Company is the Beneficial Owner, but except for the purposes of paragraph (vi) of this Section (c), shall not include any other shares which may be issuable pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, warrants or options, or otherwise, to any Person other than the Company.

(ix)“Voting Stock” shall mean outstanding shares of capital stock of the relevant corporation entitled to vote generally in the election of directors.  The term “class” of Voting Stock shall be deemed to refer to a series of Voting Stock where more than one series of Voting Stock is outstanding within a class of Voting Stock.

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(d)          Powers of Disinterested Directors.  A majority of the Disinterested Directors shall have the power and duty to determine, on the basis of information known to them after reasonable inquiry, all facts necessary to determine compliance with this Article Eighth, including, without limitation, (i) whether a Person is an Interested Stockholder; (ii) the number of shares of Voting Stock beneficially owned by any person; (iii) whether a Person is an Affiliate or Associate of another; (iv) whether a Person has an agreement, arrangement or understanding with another Person as to the matters referred to in clause (F) of the definition of “Business Combination” in Section (c), and (v) whether the assets which are the subject of any Business Combination have, or the consideration to be received for the issuance or transfer of securities by the Company or any Subsidiary in any Business Combination has, an aggregate Fair Market Value of $50,000,000 or  more; and the good faith determination of a majority of the Disinterested Directors on such matters shall be conclusive and binding for all the purposes of this Article Eighth.

(e)                    No Effect on Fiduciary Obligations.  Nothing contained in this Article Eighth shall be construed to impose any fiduciary duty, obligation or responsibility on the Board of Directors, or any member thereof, to approve any Business Combination or recommend its adoption or approval to the stockholders of the Company, nor shall the Board of Directors, or any member thereof be limited or restricted in any manner with respect to evaluations of or actions and responses taken with respect to such Business Combination.

NINTH:  The provisions set forth in this Article Ninth and in Articles Sixth, Seventh, Eighth, Tenth and Eleventh of this Restated Certificate of Incorporation may not be amended, altered, repealed or rescinded in any respect, and no other provision or provisions maybe adopted which impair(s) in any respect the operation or effect of any such provision, except by the affirmative vote of (a) the holders of not less than four-fifths (4/5) of the outstanding stock entitled to vote thereon, voting together as a single class, and (b) where such action is proposed by an Interested Stockholder or by an Associate or Affiliate of an Interested Stockholder (as defined in Article Eighth), the holders of not less than a majority of the outstanding stock entitled to vote thereon, voting together as a single class, other than stock held by the Interested Stockholder (or the Affiliate or Associate thereof) that proposed such action, or any Affiliate or Associate of such Interested Stockholder; provided, however, that where such action is approved by a majority of the Disinterested Directors (as defined in Article Eighth), the affirmative vote of the holders of not less than a majority of the outstanding stock entitled to vote thereon, voting together as a single class, shall be required for approval of such action.

TENTH:  The Board of Directors shall have the power to adopt, amend, alter, or repeal the By-Laws of the Company as provided in such By-Laws.  The stockholders shall also have the power to adopt, amend, alter or repeal the By-Laws of the Company; provided, however, that, notwithstanding the foregoing and anything contained in this Restated Certificate of Incorporation to the contrary, unless amended, altered or repealed by the Board of Directors as provided in the By-Laws, Sections 1.01 and 1.02 of Article I, Sections 2.01, 2.02, 2.03, 2.04, 2.07 and 2.08 of Article II, Section 3.01 of Article III, Article V and Section 7.01 of Article VII of the By-Laws may not be amended, altered, repealed or rescinded in nay respect and no other provision or provisions may be adopted which impair(s) in any respect the operation or effect of any such provision, except by the same vote that would be required to amend Article Ninth of this Restated Certificate of Incorporation.

ELEVENTH:  To the fullest extent that the General Corporation Law of the State of Delaware as it exists on the date hereof or as it may hereafter be amended permits the limitation or elimination of the liability of directors, no director of the Company shall be liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director.  No amendment to or repeal of this Article shall apply to or have any effect on the liability or alleged liability of any director of the Company for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal.

12

EX-31.1

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY

ACT OF 2002

I, Richard A. Bianco, certify that:

1. I have reviewed this quarterly report on Form 10-Q of AmBase Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

/s/ Richard A. Bianco

Richard A. Bianco

Chairman, President and Chief Executive Officer

AmBase Corporation

Date:  August 9, 2024

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY

ACT OF 2002

I, John Ferrara, certify that:

1. I have reviewed this quarterly report on Form 10-Q of AmBase Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

/s/ John Ferrara

John Ferrara

Vice President, Chief Financial Officer, and Controller

AmBase Corporation

Date:  August 9, 2024

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES OXLEY ACT OF 2002

In connection with the quarterly report of AmBase Corporation (the “Company”) on Form 10-Q for the period ending June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard A. Bianco, Chief Executive Officer of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

This Certification accompanies this Form 10-Q as an exhibit but shall not be deemed as having been filed for purposes of Section 18 of the Securities Exchange Act of 1934 or as a separate disclosure document of the Company or the certifying officer.

/s/ Richard A. Bianco

Richard A. Bianco

Chairman, President and Chief Executive Officer

AmBase Corporation

Date:  August 9, 2024

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES OXLEY ACT OF 2002

In connection with the quarterly report of AmBase Corporation (the “Company”) on Form 10-Q for the period ending June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John Ferrara, Chief Financial Officer of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

This Certification accompanies this Form 10-Q as an exhibit but shall not be deemed as having been filed for purposes of Section 18 of the Securities Exchange Act of 1934 or as a separate disclosure document of the Company or the certifying officer.

/s/ John Ferrara

John Ferrara

Vice President and Chief Financial Officer

AmBase Corporation

Date:  August 9, 2024

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2024	Jul. 31, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2024
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Document Transition Report	false
Entity File Number	1-7265
Entity Registrant Name	AMBASE CORPORATION
Entity Central Index Key	0000020639
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	95-2962743
Entity Address, Address Line One	7857 WEST SAMPLE ROAD, SUITE 134
Entity Address, City or Town	CORAL SPRINGS
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33065
City Area Code	201
Local Phone Number	265-0169
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		84,938,211

XML

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Operating expenses:
Compensation and benefits	$ 352	$ 347	$ 711	$ 732
Professional and outside services	1,570	813	2,881	1,541
Property operating and maintenance	6	2	10	10
Insurance	12	57	44	115
Other operating	65	28	84	41
Total operating expenses	2,005	1,247	3,730	2,439
Operating income (loss)	(2,005)	(1,247)	(3,730)	(2,439)
Interest income	19	0	19	1
Interest expense	(51)	22	63	51
Income (loss) before income taxes	(1,935)	(1,269)	(3,774)	(2,489)
Income tax expense (benefit)	0	0	0	0
Net income (loss)	$ (1,935)	$ (1,269)	$ (3,774)	$ (2,489)
Net income (loss) per common share - basic (in dollars per share)	$ (0.02)	$ (0.03)	$ (0.06)	$ (0.06)
Weighted average common shares outstanding - basic (in shares)	84,938	40,738	62,838	40,738

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Assets:
Cash and cash equivalents	$ 434	$ 78
Other assets	0	0
Total assets	434	78
Liabilities:
Accounts payable and accrued liabilities	1,713	3,225
Loan(s) payable - related party	0	3,198
Total liabilities	1,713	6,423
Commitments and contingencies (Note 6)
Stockholders' equity (deficit):
Common stock ($0.01 par value, 85,000 authorized in 2024 and 85,000 authorized in 2023, 84,938 issued and 84,938 outstanding in 2024 and 46,410 issued and 40,738 outstanding in 2023)	849	464
Additional paid-in capital	551,591	548,304
Accumulated deficit	(553,719)	(549,945)
Treasury stock, at cost - 2024 - 0 shares; and 2023 - 5,672 shares	0	(5,168)
Total stockholders' equity (deficit)	(1,279)	(6,345)
Total liabilities and stockholders' equity (deficit)	$ 434	$ 78

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Jun. 30, 2024	Dec. 31, 2023
Stockholders' equity (deficit):
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	85,000	85,000
Common stock, shares issued (in shares)	84,938	46,410
Common stock, shares outstanding (in shares)	84,938	40,738
Treasury stock, at cost (in shares)	0	5,672

XML

Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Treasury Stock [Member]	Total
Balance at Dec. 31, 2022	$ 464	$ 548,304	$ (544,674)	$ (5,168)	$ (1,074)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	0	0	(1,220)	0	(1,220)
Balance at Mar. 31, 2023	464	548,304	(544,894)	(5,168)	(2,294)
Balance at Dec. 31, 2022	464	548,304	(544,674)	(5,168)	(1,074)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)					(2,489)
Balance at Jun. 30, 2023	464	548,304	(547,163)	(5,168)	(3,563)
Balance at Mar. 31, 2023	464	548,304	(544,894)	(5,168)	(2,294)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	0	0	(1,269)	0	(1,269)
Balance at Jun. 30, 2023	464	548,304	(547,163)	(5,168)	(3,563)
Balance at Dec. 31, 2023	464	548,304	(549,945)	(5,168)	(6,345)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	0	0	(1,839)	0	(1,839)
Balance at Mar. 31, 2024	464	548,304	(551,784)	(5,168)	(8,184)
Balance at Dec. 31, 2023	464	548,304	(549,945)	(5,168)	(6,345)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)					(3,774)
Balance at Jun. 30, 2024	849	551,591	(553,719)	0	(1,279)
Balance at Mar. 31, 2024	464	548,304	(551,784)	(5,168)	(8,184)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	0	0	(1,935)	0	(1,935)
Sale of common stock - Equity Offering	385	3,287	0		8,840
Sale of common stock - Equity Offering				5,168
Balance at Jun. 30, 2024	$ 849	$ 551,591	$ (553,719)	$ 0	$ (1,279)

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash flows from operating activities:
Net income (loss)	$ (3,774)	$ (2,489)
Changes in operating assets and liabilities:
Other assets	0	61
Accounts payable and accrued liabilities	(1,512)	903
Net cash provided (used) by operating activities	(5,286)	(1,525)
Cash flows from financing activities:
Sale of common stock - equity offering	8,840	0
Payoff of loan payable - related party	(3,548)	0
Proceeds from loan payable - related party	350	1,265
Net cash provided (used) by financing activities	5,642	1,265
Net change in cash and cash equivalents	356	(260)
Cash and cash equivalents at beginning of period	78	349
Cash and cash equivalents at end of period	434	89
Supplemental cash flow disclosure:
Income taxes refunded (paid)	0	0
Interest expense paid	$ 148	$ 0

XML

The Company and Basis of Presentation and Going Concern

6 Months Ended

Jun. 30, 2024

The Company and Basis of Presentation and Going Concern [Abstract]

The Company and Basis of Presentation and Going Concern

Note 1 – The Company and Basis of Presentation and Going Concern

The accompanying condensed consolidated financial statements of AmBase Corporation and subsidiaries (“AmBase” or the “Company”) are unaudited and subject to year-end adjustments. All material intercompany transactions and balances have been eliminated. In the opinion of management, these financial statements reflect all adjustments, consisting only of normal recurring adjustments unless otherwise disclosed, necessary for a fair presentation of the Company’s consolidated financial position, results of operations and cash flows. Results for interim periods are not necessarily indicative of results for the full year. The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that it deems reasonable, that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from such estimates and assumptions. The unaudited interim condensed consolidated financial statements presented herein are condensed and 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, 2023.

A fundamental principle of the preparation of financial statements in accordance with GAAP is the assumption that an entity will continue in existence as a going concern, which contemplates continuity of operations and the realization of assets and settlement of liabilities occurring in the ordinary course of business. In accordance with this requirement, the Company has prepared its accompanying condensed consolidated financial statements assuming the Company will continue as a going concern.

The Company has incurred operating losses and used cash for operating activities for the past several years. The Company has continued to keep operating expenses at a reduced level; however, there can be no assurance that the Company’s current level of operating expenses will not increase or that other uses of cash will not be necessary.  The Company believes that based on its current level of operating expenses, its existing cash and cash equivalents may not be sufficient to cover operating cash needs through the twelve month period from the financial statement reporting date. Based on the above factors, management determined there is substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The financial statements do not include adjustments to the carrying value of assets and liabilities, which might be necessary should the Company not continue in operation.

In order to continue as a going concern, the Company must take steps to manage its current level of cash and cash equivalents, through various ways, including but not limited to, raising additional capital through the sale of equity or debt securities or long term borrowings, which may include additional borrowings from affiliates of the Company, litigation funding agreements, reducing operating expenses, and seeking recoveries from various sources. There can be no assurance that the Company will be able to adequately implement these cash management measures, in whole or in part or raise capital or obtain financing on terms acceptable to the Company, if at all.

In June 2013, the Company purchased an equity interest in a real estate development property through a joint venture agreement to purchase and develop real property located at 105 through 111 West 57th Street in New York, New York (the “111 West 57th Property”). The Company is engaged in material disputes and litigation with regard to the 111 West 57th Property.  Despite ongoing litigation challenging the legitimacy of the actions taken in connection with the “Strict Foreclosure”, (as defined and as further discussed herein), the Company recorded an impairment for the full amount of its equity investment in the 111 West 57th Property in 2017. Prior to the Strict Foreclosure, the carrying value of the Company’s equity investment in the 111 West 57th Property represented a substantial portion of the Company’s assets and net equity value.

For additional information regarding the Company’s recording of an impairment of its equity investment in the 111 West 57th Property in 2017 and the Company’s legal proceedings relating to the 111 West 57th Property, including the Company’s challenge to the Strict Foreclosure, see Note 3 and Note 6.

On April 1, 2024, the Company completed the issuance and sale, of all the shares of the Company’s common stock (the “Shares”) in the private placement offering (the “Equity Offering”) on the previously disclosed terms and conditions, including Shares purchased by an institutional investor not affiliated with the Company and Shares purchased by BARC Investments, LLC, an affiliate of the Company owned and controlled by two of the Company’s directors and their sibling. The offer and sale of the shares in the Equity Offering was completed in reliance on the exemption from registration under Rule 506(c) of Regulation D promulgated under Section 4(a)(2) of the Securities Act of 1933, as amended. See Note 9 for additional information.

The Company will continue to consider and explore other litigation funding agreements with third party litigation funders that it could enter into for portions of the litigation costs for up to $5 million of funding, at market terms to be agreed upon at such times. In general, litigation funding agreements are structured so that the litigation funder would receive back their initial funding amount first (i.e. before any recovery is received by the Company), plus an additional multiple ranging from 1.0 times to 3.5 times the amount funded (depending on various factors), plus depending on the funder, additional fees, expenses, interest and potentially an additional percentage of the total recovery received. There can be no assurance that the Company would be able to secure any such additional litigation funding on acceptable terms or at all.

While the Company’s management is evaluating future courses of action to protect and/or recover the value of the Company’s equity investment in the 111 West 57^th Property, the adverse developments make it uncertain as to whether any such courses of action will be successful. Any such efforts are likely to require sustained effort over a period of time and substantial additional financial resources. Inability to recover all or most of such value would, in all likelihood, have a material adverse effect on the Company’s financial condition and future prospects. The Company can give no assurances with regard if it will prevail with respect to any of its claims.

XML

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2024

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2 – Summary of Significant Accounting Policies

New accounting pronouncements

There are no new accounting pronouncements that would likely materially affect the Company’s unaudited condensed consolidated financial statements.

XML

Investment in 111 West 57th Partners LLC

6 Months Ended

Jun. 30, 2024

Investment in 111 West 57th Partners LLC [Abstract]

Investment in 111 West 57th Partners LLC

Note 3 – Investment in 111 West 57^th Partners LLC

In June 2013, the Company purchased an equity interest in the 111 West 57^th Property.  The Company is engaged in material disputes and litigation with regard to the 111 West 57^th Property. Despite ongoing litigation challenging the legitimacy of the actions taken in connection with the “Strict Foreclosure”, (as defined below and as further discussed herein), the Company recorded an impairment for the full amount of its equity investment in the 111 West 57th Property in 2017.

For additional information regarding the Company’s 111 West 57^th Property equity investment, events leading up to the Strict Foreclosure, the Company’s recording of an impairment of its equity investment in the 111 West 57^th Property and the Company’s legal proceedings relating to the 111 West 57^th Property, including the Company’s challenge to the Strict Foreclosure, see herein below and Note 6.

In June 2013, 111 West 57^th Investment LLC (“Investment LLC”), a then newly formed subsidiary of the Company, entered into a joint venture agreement (as amended, the “JV Agreement”) with 111 West 57th Sponsor LLC (the “Sponsor”), pursuant to which Investment LLC invested (the “Investment”) in a real estate development property to purchase and develop the 111 West 57^th Property.  In consideration for making the Investment, Investment LLC was granted a membership interest in 111 West 57^th Partners LLC (“111 West 57^th Partners”), which indirectly acquired the 111 West 57^th Property on June 28, 2013 (the “Joint Venture,” and such date, the “Closing Date”).  The Company also indirectly contributed an additional amount to the Joint Venture in exchange for an additional indirect interest in the Joint Venture.  Other members and the Sponsor contributed additional cash and/or property to the Joint Venture. The Company recorded its investment in 111 West 57^th Partners utilizing the equity method of accounting. The Joint Venture plans were to redevelop the 111 West 57^th Property into a luxury residential tower and retail project.

Amounts relating to the Company’s initial June 2013 investment in the 111 West 57^th Property follow:

($ in thousands)
Company’s aggregate initial investment	$	57,250
Company’s aggregate initial membership interest %		60.3	%

The JV Agreement and related operating agreements generally provide that all distributable cash shall be distributed as follows: (i) first, 100% to the members in proportion to their percentage interests until Investment LLC has received distributions yielding a 20% internal rate of return as calculated; (ii) second, 100% to the Sponsor as a return of (but not a return on) any additional capital contributions made by the Sponsor on account of manager overruns; and (iii) thereafter, (a) 50% to the members in proportion to their respective percentage interests at the time of such distribution, and (b) 50% to the Sponsor.

In March 2014, the Company entered into an amended and restated operating agreement for Investment LLC (the “Amended and Restated Investment Operating Agreement”) to grant a 10% subordinated participation interest in Investment LLC to the Company’s Chairman, President and Chief Executive Office, Mr. Richard A. Bianco (“Mr. R.A. Bianco”), as a contingent future incentive for Mr. R.A. Bianco’s past, current and anticipated ongoing role to develop and commercialize the Company’s equity investment in the 111 West 57^th Property.  Pursuant to the terms of the Amended and Restated Investment Operating Agreement, Mr. R.A. Bianco has no voting rights with respect to his interest in Investment LLC, and his entitlement to receive 10% of the distributions from Investment LLC is subject to the Company first receiving distributions equal to 150% of the Company’s initial aggregate investment in Investment LLC and the Joint Venture, plus any additional investments by the Company, and only with respect to any distributions thereafter. At the current time, the Company has not expensed nor accrued any amounts relating to this subordinated participation interest, as no amount or range of amounts can be reasonably estimated or assured.

During 2014, in connection with the funding of additional capital calls under the JV Agreement for required borrowing and development costs for the 111 West 57^th Property, the Company’s management and its Board of Directors concluded that, given the continuing development risks of the 111 West 57^th Property and the Company’s financial position, the Company should not at that time increase its already significant concentration and risk exposure to the 111 West 57th Property.  Nonetheless, the Company sought to limit dilution of its interest in the Joint Venture resulting from any failure to fund the capital call requirements, but at the same time wished to avoid the time, expense and financial return requirements (with attendant dilution and possible loss of voting rights) that obtaining a replacement third-party investor would require. The Company, therefore, entered into a second amended and restated operating agreement for Investment LLC (“Second Amended and Restated Investment Operating Agreement”) pursuant to which Capital LLC was admitted as a member of Investment LLC. In exchange for Capital LLC contributing toward Investment LLC capital calls in respect of the 111 West 57^th Property, available cash of Investment LLC will be distributed first to Capital LLC until it has received a 20% internal rate of return (calculated as provided for in the JV Agreement as noted above), second to the Company until it has received 150% of its capital, and, thereafter, available cash is split 10/90, with 10% going to Mr. R.A. Bianco as the subordinated participation interest noted above and 90% going to Capital LLC and the Company pari-passu, with Capital LLC receiving one-half of its pro-rata share based on capital contributed and the Company receiving the balance. No other material changes were made to the Amended and Restated Investment Operating Agreement, and neither Mr. R.A. Bianco nor Capital LLC has any voting rights with respect to their interest and investment in Investment LLC.

In accordance with the JV Agreement, shortfall capital contributions may be treated either as a member loan or as a dilutive capital contribution as set forth in the JV Agreement. The Sponsor deemed the shortfall capital contributions as dilutive capital contributions to the Company.  The Company disagrees with the Sponsor’s investment percentage calculations. The Sponsor has taken the position that the capital contribution requests, if taken together, would have caused the Company’s combined ownership percentage to be diluted below the Company’s initial membership interest percentage. The parties have a dispute with regard to the calculation of the revised investment percentages resulting from the capital contribution requests, along with the treatment and allocation of these shortfall capital contribution amounts.

On June 30, 2015, 111 West 57^th Partners obtained financing for the 111 West 57^th Property.  The financing was obtained in two parts: (i) a first mortgage construction loan with AIG Asset Management (US), LLC (along with its affiliates “AIG”); and (ii) a mezzanine loan with Apollo Commercial Real Estate Finance, Inc. (along with its affiliates “Apollo”), as detailed herein.  Both loans initially had certain repayment term dates with extension option(s) subject to satisfying certain conditions.  The loan agreements (the “Loan Agreements”) also include customary events of default and other customary terms and conditions.  Simultaneously with the closing of the AIG and the Apollo financing, 111 West 57^th Partners repaid all outstanding liabilities and obligations to Annaly CRE, LLC under the initial mortgage and acquisition loan agreement, dated June 28, 2013, between the joint venture entities and Annaly CRE, LLC.  The remaining loan proceeds were to be drawn down and used as necessary for construction and related costs, loan interest escrow and other related project expenses for development of the 111 West 57^th Property.

In April 2016, the Company initiated a litigation in the New York State Supreme Court for New York County (the “NY Court”), Index No. 652301/2016, (“AmBase v. 111 West 57th Sponsor LLC, et al.”) (the “Sponsor Action”).  The defendants in that litigation include 111 West 57th Sponsor LLC, Kevin Maloney, Michael Stern, and various members and affiliates, Liberty Mutual Insurance Company, and Liberty Mutual Fire Insurance Company (collectively, “Defendants”) and nominal defendants 111 West 57th Partners LLC and 111 West 57th Mezz 1 LLC.  For additional information with regard to the Company’s legal proceedings relating to the 111 West 57th Property, see Note 6.

In December 2016, the Sponsor proposed for approval a “proposed budget” (the “Proposed Budget”), which the Sponsor claims reflected an increase in other costs resulting in the need for additional funding in order to complete the project. The Company disputes, among other items, the calculation of the percentage increase of hard costs shown in the Proposed Budget. The Company believes the aggregate projected hard costs in the Proposed Budget exceed a contractually stipulated limit as a percentage of the hard costs set forth in the prior approved budget, thus allowing Investment LLC the option to exercise its equity put right as set forth in the JV Agreement (the “Equity Put Right”). Consequently, subsequent to the Sponsor’s presentation of the Proposed Budget, Investment LLC notified the Sponsor that it was exercising its Equity Put Right pursuant to the JV Agreement. The Sponsor refused to honor the exercise of Investment LLC’s Equity Put Right. The Sponsor claims, among other things, that the conditions precedent were not met because it claims that the increase in aggregate hard costs in the Proposed Budget does not exceed the contractually stipulated limit that would allow the exercise of the Equity Put Right.

The Company further contends that a portion of the Proposed Budget increases are manager overruns (as defined in the JV Agreement) and thus should be paid for by the Sponsor. The Sponsor denies that the Proposed Budget increases were manager overruns. The Company continues to challenge the nature and substance of the Proposed Budget increases and how they should be treated pursuant to the JV Agreement.

The Sponsor claimed that additional borrowings were needed to complete the project. Shortly thereafter, the Sponsor informed the Company that Apollo had indicated that due to budget increases, it believed the current loan was “out of balance” (meaning, according to Apollo, the projected budget exceeds the original budget approved in connection with the loan); and thus 111 West 57th Partners LLC, or its subsidiaries would need additional funding in order to bring the loan back into balance. The Company considered approving the additional financing but informed the Sponsor that it had concerns about the Proposed Budget and the implications of the Proposed Budget, as well as other questions which needed to be addressed first.

Around this time, Apollo provided loan forbearances to the borrowers and guarantors to allow the Sponsor time (while the building continued to be built) to raise the additional financing that Sponsor claimed would be needed to complete the 111 West 57th project. This forbearance period ended on June 29, 2017. Around this date, the Company was advised that Apollo sold a portion of the mezzanine loan—broken off as a junior mezzanine loan—to an affiliate of Spruce Capital Partners LLC (“Spruce”) (the “Junior Mezzanine Loan”).

On June 30, 2017, Spruce declared an event of default under the Junior Mezzanine Loan and demanded immediate payment of the full outstanding balance of the Junior Mezzanine Loan.  Spruce then gave notice to the junior mezzanine borrower that it proposed to accept the pledged collateral (including the joint venture members’ collective interest in the property) in full satisfaction of the joint venture’s indebtedness under the Junior Mezzanine Loan (i.e., a “Strict Foreclosure”).

On July 25, 2017, the Company filed a complaint against Spruce and the Sponsor and requested injunctive relief halting the Strict Foreclosure from the New York State Supreme Court for New York County, (the “NY Court”) Index No. 655031/2017, (the “Lender Action”). The defendants in the Lender Action were 111 W57 Mezz Investor, LLC, Spruce Capital Partners LLC, 111 West 57th Sponsor LLC, Michael Z. Stern, and Kevin P. Maloney (collectively, “Defendants”) and nominal defendants 111 West 57th Partners LLC and 111 West 57^th Mezz 1 LLC. The Company has since voluntarily discontinued its claims against Sponsor, Stern, and Maloney, without prejudice to reinstating them in the Lender Action or any other action. For additional information with regard to the Lender Action, see Note 6.

On August 30, 2017, Spruce issued a Notice of Retention of Pledged Collateral in Full Satisfaction of Indebtedness. By purporting to accept the pledged collateral, pursuant to a Strict Foreclosure process, Spruce claims to have completed the retention of the collateral pledged by the junior mezzanine borrower, and therefore, the Company’s interest in the 111 West 57th Property (the “Strict Foreclosure”). Despite ongoing litigation challenging the legitimacy of the actions taken in connection with the Strict Foreclosure, the Company recorded an impairment for the full amount of its equity investment in the 111 West 57^th Property in 2017. Prior to the Strict Foreclosure, the carrying value of the Company’s equity investment in the 111 West 57^th Property represented a substantial portion of the Company’s assets and net equity value.

For additional information regarding the Company’s legal proceedings relating to the 111 West 57^th Property, including the Company’s challenge to the Strict Foreclosure, see Note 6.

With respect to its disputes and litigation relating to its interest in the 111 West 57th Property, the Company is pursuing, and will continue to pursue, other options to realize the Company’s investment value, various legal courses of action to protect its legal rights, recovery of its asset value from various sources of recovery, as well as considering other possible economic strategies, including the possible sale of the Company’s interest in and/or rights with respect to the 111 West 57^th Property; however, there can be no assurance that the Company will prevail with respect to any of its claims.

The Company can give no assurances regarding the outcome of the matters described herein, including as to the effect of Spruce’s actions described herein, whether the Sponsor will perform their contractual commitments to the Company under the JV Agreement, as to what further action, if any, the lenders may take with respect to the project, as to the ultimate resolution of the ongoing litigation proceedings relating to the Company’s investment interest in the 111 West 57^th Property, as to the ultimate effect of the Sponsor’s, the Company’s or the lenders’ actions on the project, as to the completion or ultimate success of the project, or as to the value or ultimate realization of any portion of the Company’s equity investment in the 111 West 57^th Property.

While the Company’s management is evaluating future courses of action to protect and/or recover the value of the Company’s equity investment in the 111 West 57^th Property, the adverse developments make it uncertain as to whether any such courses of action will be successful. Any such efforts are likely to require sustained effort over a period of time and substantial additional financial resources. Inability to recover all or most of such value would, in all likelihood, have a material adverse effect on the Company’s financial condition and future prospects. The Company can give no assurances with regard to if it will prevail with respect to any of its claims.

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Savings Plan

6 Months Ended

Jun. 30, 2024

Savings Plan [Abstract]

Savings Plan

Note 4 - Savings Plan

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 a percentage of their compensation, which are matched by the Company at a percentage of the employees’ elected 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.  All contributions are subject to the maximum limitations contained in the Code.

The Company’s matching contributions to the Savings Plan, charged to expense, were as follows:

($ in thousands)	Three Months Ended						Six Months Ended
	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
Company matching contributions	$	28		$	28		$	80		$	79
Employer match %		100	%		100	%		100	%		100	%

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Income Taxes

6 Months Ended

Jun. 30, 2024

Income Taxes [Abstract]

Income Taxes

Note 5 - Income Taxes

The Company and its 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 unaudited condensed consolidated 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, a greater than 50% probability exists that the tax benefits will actually be realized sometime in the future.

The Company has a deferred tax asset arising primarily from NOL carryforwards. The Company has a full valuation allowance on the deferred tax asset amounts, as management has no basis to conclude that realization is more likely than not.  Management does not believe that any significant changes in unrecognized income tax benefits are expected to occur over the next year.

The Company’s management is continuing to work closely with outside advisors on the Company’s various federal tax return matters for the numerous interrelated tax years. The Company cannot predict whether or not the IRS and/or other tax authorities will review the Company’s tax returns filed, to be filed and/or as filed in prior years. There is risk relating to assumptions regarding the outcome of tax matters, based in whole or in part upon consultation with outside advisors; risk relating to potential unfavorable decisions in tax proceedings; and risks regarding changes in, and/or interpretations of federal and state income tax laws. Moreover, applicable provisions of the Code and IRS regulations permit the IRS to challenge Company tax positions and filed returns or seek additional taxes for an extended period of time after such returns are filed. The Company can give no assurances as to the final outcome of any IRS review, if any.

The Company was a plaintiff in a legal proceeding seeking recovery of damages from the United States Government for the loss of the Company’s wholly-owned subsidiary, Carteret Savings Bank, F.A. (the “SGW Legal Proceedings”).  A settlement agreement in the SGW Legal Proceedings between the Company, the Federal Deposit Insurance Corporation-Receiver (“FDIC-R”) and the Department of Justice (“DOJ”) on behalf of the United States of America (the “United States”), was executed (the “SGW 2012 Settlement Agreement”) which was approved by the United States Court of Federal Claims (the “Court of Federal Claims”) in October 2012.  On August 6, 2013, Senior Judge Smith issued an opinion which addressed the relief sought by AmBase. In summary, the court held that the Settlement Agreement is a contract and that it entitles the Company to receive both “(1) the amount of the tax consequences resulting from taxation of the damages award plus (2) the tax consequences of receiving the first component.”  But the Court of Federal Claims did not award an additional amount for the second component at that time given the remaining uncertainty surrounding the ultimate tax treatment of the settlement proceeds and the gross-up, as well as uncertainty relating to the Company’s future income.  The Court of Federal Claims indicated that either the Company or the government is entitled to seek further relief “if, and when, the facts justify it.”

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Legal Proceedings

6 Months Ended

Jun. 30, 2024

Legal Proceedings [Abstract]

Legal Proceedings

Note 6 - Legal Proceedings

From time to time, the Company and its subsidiaries may be named as a defendant in various lawsuits or proceedings.  At the current time except as set forth below, the Company is unaware of any legal proceedings pending against the Company.  The Company intends to aggressively contest all litigation and contingencies, as well as pursue all sources for contributions to settlements. However, there can be no assurance that the Company will prevail with respect to any of its claims.

The Company is a party to material legal proceedings as follows:

AmBase Corp., et al. v. 111 West 57^th Sponsor LLC, et al. In April 2016, AmBase and certain of its subsidiaries and affiliates (collectively, the “Plaintiffs”) initiated a litigation in the New York State Supreme Court for New York County (the “NY Court”), Index No. 652301/2016, (“AmBase v. 111 West 57th Sponsor LLC, et al.”) (the “Sponsor Action”).  The defendants in that litigation include 111 West 57th Sponsor LLC (the “Sponsor”), Kevin Maloney, Michael Stern, and various members and affiliates, (collectively, “Defendants”) and nominal defendants 111 West 57th Partners LLC and 111 West 57th Mezz 1 LLC. In the current version of the complaint, AmBase alleges that Defendants violated multiple provisions in the JV Agreement, including by failing to honor the exercise of AmBase’s contractual “equity put right” as set forth in the JV Agreement (the “Equity Put Right”) and by not objecting to the 2017 foreclosure of the junior mezzanine loan on the project. AmBase is seeking compensatory damages, punitive damages, indemnification and equitable relief, including a declaration of the parties’ rights, and an accounting. The Company has also demanded from the Sponsor access to the books and records for the 111 West 57th Property which the Sponsor refused, claiming they have provided all books and records as required.

The Defendants filed a motion to dismiss an earlier complaint, and on January 12, 2018, the NY Court issued an opinion allowing some of AmBase’s claims to go forward and dismissing others (“2018 Order”). Among other claims that the NY Court declined to dismiss was AmBase’s claim that the Defendants violated the implied covenant of good faith and fair dealing by frustrating AmBase’s Equity Put Right. Claims that the NY Court dismissed included AmBase’s claim that the Defendants breached their contract with AmBase by financing capital contributions for the project through funds obtained from third parties. On January 16, 2018, some of the Defendants wrote to the NY Court suggesting that the opinion contained certain clerical errors and was missing a page. On January 18, 2018, the NY Court removed its previous opinion from the docket and on January 29, 2018, posted a revised opinion. On April 13, 2018, AmBase filed a notice of appeal of the 2018 Order to the New York Supreme Court Appellate Division, First Judicial Department (the “Appellate Division”). On January 22, 2020, the Company filed a motion with the Appellate Division seeking to enlarge the time to perfect the Company’s appeal of the 2018 Order, in light of an intervening removal to and remand from federal court. On July 2, 2020, the Appellate Division granted AmBase’s motion and enlarged the time to perfect the Company’s appeal to the October 2020 Term of the Appellate Division. On April 29, 2021, the Appellate Division affirmed Justice Bransten’s dismissal of the claims on appeal, while the claims that were not previously dismissed remain pending in the trial court.

On April 27, 2018, the Company filed a third amended complaint adding federal RICO claims, and new claims for declaratory judgment, breach of contract, fraud, and breach of fiduciary duty, based on information discovered during the course of discovery and events that had transpired since the Company filed its previous complaint in the Sponsor Action. On June 18, 2018, Defendants removed the complaint to the U.S. District Court for the Southern District of New York (the “Federal Court”), where it was docketed as case number 18-cv-5482-AT.

On October 25, 2018, the Federal Court issued an order granting Defendants’ motion to dismiss the Company’s RICO claims and declined to exercise supplemental jurisdiction over the Company’s state-law claims, dismissing the latter claims without prejudice. On August 30, 2019, the U.S. Court of Appeals for the Second Circuit affirmed the Federal Court’s dismissal of the federal RICO claims, vacated the Federal Court’s dismissal of the state-law claims, and remanded with instructions for the Federal Court to remand those claims to the NY Court. On September 25, 2019, the Federal Court remanded the case to the NY Court, where it was assigned to the Honorable O. Peter Sherwood.

On June 11, 2020, Defendants filed a motion with the NY Court to dismiss some of the state law claims asserted by the Company in the third amended complaint.  On July 28, 2020, Plaintiffs filed a motion for leave to amend the third amended complaint, which Defendants opposed.  The proposed complaint added, among other things, claims arising from certain defendants’ role in the 2017 foreclosure of the junior mezzanine loan on the project. On July 22, 2021, the NY Court granted Plaintiffs leave to amend and denied the motion to dismiss without prejudice as moot in light of the Court’s decision granting Plaintiffs leave to amend.

On July 29, 2021, Plaintiffs filed their fourth amended complaint. On September 3, 2021, Defendants submitted a motion to dismiss the fourth amended complaint in part, which Plaintiffs opposed. On May 9, 2022, the NY Court issued a Decision and Order on Defendants’ motion to dismiss, allowing some of AmBase’s claims to go forward and dismissing others (“May 9, 2022 Order”). The NY Court declined to dismiss AmBase’s claims that the Defendants breached their contracts with AmBase by permitting transfers or encumbrances upon 111 West 57th Sponsor LLC’s and 111 West 57th Control LLC’s membership interests in connection with third-party financing without seeking or obtaining prior written approval.  The Court also declined to dismiss AmBase’s claim that Defendants breached their obligations under the Development Agreement by, among other things, failing to use “commercially reasonable efforts” to plan, design, develop, construct, and obtain permits for the Property in a timely manner and failing to devote sufficient time and attention to its obligations under the Development Agreement.

Claims that the NY Court dismissed included AmBase’s claims that Defendants breached their contract with AmBase by making capital contributions to Sponsor from third parties; consenting to the strict foreclosure without obtaining AmBase’s prior written approval in violation of the “Major Decisions” provision; refusing to cooperate and share information with AmBase’s construction consultant; and engaging in fraud and intentional misconduct in violation of Joint Venture Agreement section 8.5. The NY Court also dismissed AmBase’s claim that Defendants made fraudulent misrepresentations or omissions (as duplicative of the breach of contract claims) and other claims whose dismissal was compelled by a prior decision of the First Department, namely, AmBase’s claims that Sponsor, Stern, and Maloney breached their fiduciary duties of loyalty; to impose a constructive trust on the insurance loss fund; and to impose a constructive trust on Stern’s, Maloney’s, JDS’s, PMG’s, and the construction manager’s construction management fees and Stern’s and Maloney’s equity interest in the Project.  Finally, the Court dismissed AmBase’s current allegations that piercing certain of Defendants’ corporate veils is warranted. On January 18, 2023, the Company filed a notice of appeal appealing the May 9, 2022 Order with regard to all defendants in the Sponsor Action and perfected the appeal on July 10, 2023.

On November 28, 2023, the Appellate Division First Department issued its decision modifying the NY Court’s decision in part and affirming the NY Court’s decision in part. The First Department modified the NY Court’s decision by reinstating Plaintiffs’ breach of contract claim based on Defendants’ refusing to cooperate and share information with AmBase’s construction consultant and one part of Plaintiffs’ fraudulent misrepresentation or omission claim asserted against one of the individual defendants. The First Department otherwise affirmed the NY Court’s decision.

Liberty Mutual Insurance Company and Liberty Mutual Fire Insurance Company (“Liberty Mutual Defendants”) were named as defendants in the fourth amended complaint. On September 30, 2021, the Liberty Mutual Defendants answered the fourth amended complaint and filed a counterclaim against the Company’s subsidiaries for specific performance of a pledge agreement securing certain insurance policies issued for the Project. Plaintiffs replied to those counterclaims on October 20, 2021. On March 14, 2024, the parties filed a Stipulation of Discontinuance Against Liberty Mutual Insurance Company and Liberty Mutual Fire Insurance Company whereby all causes of action, counterclaims, and crossclaims by and against the Liberty Mutual Defendants were discontinued without prejudice.  The Court entered the Stipulation on March 15, 2024.

Matthew Phillips was also named as an individual defendant in the fourth amended complaint.  Following the First Department’s reinstatement of one part of Plaintiffs’ fraudulent misrepresentation or omission claim as asserted against Phillips, on March 26, 2024, the parties filed a Stipulation of Discontinuance Against Matthew Phillips whereby Plaintiffs AmBase Corporation and 111 West 57th Investment LLC discontinued their Fifth Claim for Relief for fraudulent misrepresentation or omission only against Phillips, with prejudice.

On January 30, 2023, Sponsor, Stern, Maloney, and various defendant members and affiliates filed their answer and asserted counterclaims against the Company’s subsidiaries for breach of the Joint Venture Agreement in connection with a proposed refinancing of the Project in 2016. Plaintiffs replied to those counterclaims on February 21, 2023. Discovery in the case is currently ongoing. For additional information with regard to the Company’s investment in the 111 West 57^th Property, including the foreclosure, see Note 3.

AmBase Corp., et al. v. Spruce Capital Partners, et al. In July 2017, the Company initiated a second litigation in the NY Court, Index No. 655031/2017, (the “Lender Action”). The defendants in the 111 West 57^th Spruce action were 111 W57 Mezz Investor, LLC (“Spruce”), Spruce Capital Partners LLC, 111 West 57th Sponsor LLC, Michael Z. Stern, and Kevin P. Maloney and nominal defendants 111 West 57th Partners LLC and 111 West 57^th Mezz 1 LLC. The Company has since voluntarily discontinued its claims against Sponsor, Stern, and Maloney, without prejudice to reinstating them in the 111 West 57^th Spruce Action or any other action.

Spruce had given notice to the junior mezzanine borrower that it proposed to accept the pledged collateral (including the joint venture members’ collective interest in the property) in full satisfaction of the joint venture’s indebtedness under the Junior Mezzanine Loan (i.e., a “Strict Foreclosure”). After the Sponsor refused to object to Spruce’s proposal on behalf of the junior mezzanine borrower, and Spruce refused to commit to honor Investment LLC’s objection on its own behalf, the Company initiated the 111 West 57^th Spruce Action to obtain injunctive relief halting the Strict Foreclosure.  For additional information on the events leading to this litigation see Note 3.

On July 26, 2017, the NY Court issued a temporary restraining order barring Spruce from accepting the collateral, pending a preliminary injunction hearing scheduled for August 14, 2017. Spruce and the Sponsor subsequently filed papers in opposition to the request for a preliminary injunction and cross-motions to dismiss and quash subpoenas. On August 14, 2017, the NY Court postponed the hearing until August 28, 2017, keeping the temporary restraining order preventing a Strict Foreclosure in effect until the August 28, 2017 hearing. Subsequently, the Company filed a response brief in support of their request for injunctive relief halting the Strict Foreclosure process and in opposition to the motions to quash the subpoenas.

On August 28, 2017, the NY Court held a preliminary injunction hearing, lifted the temporary restraining order, denied Plaintiffs’ request for a preliminary injunction, and granted Defendants’ cross-motions. In order to prevent the Strict Foreclosure process from going forward, the Company immediately obtained an interim stay from the New York Supreme Court Appellate Division, First Judicial Department (“Appellate Division”). That stay remained in place until August 29, 2017, permitting the Company to obtain an appealable order, notice an appeal, and move for a longer-term stay or injunctive relief pending appeal. The Appellate Division held a hearing on August 29, 2017, to consider the Company’s motion for an interim stay or injunctive relief pending appeal, both of which it denied, thus allowing the purported Strict Foreclosure to move forward.

In January 2019, the Appellate Division issued a decision that resolved the Company’s appeal from the order denying a preliminary injunction and dismissing its claims. The Appellate Division affirmed the decision below in part and otherwise dismissed the appeal. It noted that the Company should be allowed to move for leave to amend to state claims for damages and/or the imposition of a constructive trust, as the dismissal of the Company’s claims was without prejudice.

On May 3, 2019, the Company’s subsidiary, Investment LLC, entered into a stipulation with Spruce to amend the complaint in the Lender Action to state claims against Spruce for breaches of the Uniform Commercial Code and Pledge Agreement and various torts. The amended complaint sought the entry of a declaratory judgment, the impression of a constructive trust, permanent injunctive relief restraining Spruce from disposing of or encumbering the 111 West 57^th Property, and damages, including punitive damages. The amended complaint did not name the Company as a plaintiff or Spruce Capital Partners as a defendant. On May 31, 2019, Spruce filed a motion to dismiss the amended complaint. On January 29, 2020, the Court entered a decision and order granting in part and denying in part Spruce’s motion to dismiss the amended complaint. On February 26, 2020, Spruce filed a notice of appeal to the Appellate Division seeking the appeal of the January 29, 2020 order. On March 4, 2020, Investment LLC filed a notice of cross-appeal to the Appellate Division, seeking to appeal the January 29, 2020 order to the extent the NY Court dismissed some of Investment LLC’s claims. On March 30, 2021, the Appellate Division issued a decision and order revising the January 29, 2020, order by reinstating Investment LLC’s derivative claim for breach of the covenant of good faith and fair dealing and dismissing the remaining claims.

While the appeal was pending, the parties to the Lender Action conducted discovery. On April 13, 2021, Investment LLC moved for leave to file a Second Amended Complaint to (1) bolster its factual allegations against the existing Defendant, (2) add claims against Spruce Capital Partners, Joshua Crane, and Robert Schwartz (“Spruce Defendants”), Arthur Becker and his affiliates (“Atlantic Defendants”), Apollo and its affiliates (“Apollo Defendants”), and AIG and its affiliates (“AIG Defendants”). On September 30, 2021, the Court granted the motion, and Investment LLC filed its Second Amended Complaint on the same day. On November 22, 2021, the various defendants filed separate motions to dismiss the claims against them. On December 13, 2021, Investment LLC filed a combined opposition to the motions. The defendants filed their replies on January 7, 2022.

On May 17, 2022, Plaintiff in the Lender Action filed a motion requesting that the court hold oral argument on the pending motions to dismiss. The court granted the motion and heard argument on July 22, 2022. During argument, counsel for Plaintiff made an oral motion to amend the complaint to add an express allegation that Defendants committed the tort of interference with contractual relations by procuring Sponsor’s breach of the implied covenant of good faith and fair dealing in the JV Agreement. The court called for supplemental briefs on the issue, which were filed on August 5, 2022.

On December 15, 2022, the NY Court issued a decision and order granting in part and denying in part the motions to dismiss (“December 15, 2022 Order”). Specifically, the NY Court declined to dismiss Plaintiff’s claims against ACREFI Mortgage Lending, LLC, Apollo Credit Opportunity Fund III AIV I LP, and AGRE Debt 1 – 111 W 57, LLC (“Apollo Lenders”) for breach of the Pledge Agreement in connection with the strict foreclosure. The NY Court dismissed Plaintiff’s claims for tortious interference with contract against the Spruce Defendants, AIG Defendants, and Apollo Defendants, and Plaintiff’s claim for unjust enrichment against the Atlantic Defendants.

On January 3, 2023, the Apollo Lenders filed a notice of appeal to the Appellate Division seeking review of the December 15, 2022 Order. On January 18, 2023, Plaintiff filed notices of appeal and cross-appeal appealing the December 15, 2022, Order with regard to all Defendants. On August 9, 2023, pursuant to mutual agreement with the Plaintiff and the AIG Defendants, Plaintiff filed a stipulation to withdraw its appeal against the AIG Defendants.  Following briefing and oral argument, the Appellate Division First Department issued its decision on October 5, 2023.  The First Department modified the NY Court’s decision to dismiss Plaintiff’s claim against the Apollo Lenders for breach of the Pledge Agreement in connection with the strict foreclosure, and otherwise affirmed the NY Court’s decision.  On November 3, 2023, Plaintiff filed motions for leave to appeal the First Department’s decision to the Court of Appeals in both the First Department and the Court of Appeals. On December 19, 2023, the First Department denied Plaintiff’s motion for leave to appeal to the Court of Appeals, which concerned Plaintiff’s claim against the Apollo Lenders for breach of the Pledge Agreement in connection with the strict foreclosure and Plaintiff’s claims against the Spruce Defendants and Apollo Lenders for tortious interference with contract.  On April 23, 2024, the Court of Appeals denied Plaintiff’s motion for leave to appeal to the Court of Appeals, which concerned Plaintiff’s claims against Apollo Commercial Real Estate Finance, Inc. and Apollo Global Management, Inc. for tortious interference with contract.

On January 13, 2023, the Apollo Lenders filed their answer and affirmative defenses to the Company’s Second Amended Complaint together with crossclaims against 111 W57th Mezz Investor LLC, Spruce Capital Partners LLC, Joshua Crane, Robert Schwartz, Michael Stern, Kevin Maloney, 111 West 57th Sponsor LLC, 111 West 57th Control LLC, and 111 West 57th Manager LLC (the “Crossclaim Defendants”). The crossclaims were for (1) contribution against all Crossclaim Defendants; (2) indemnification against 111 W57th Mezz Investor LLC, Spruce Capital, Crane, and Schwartz; and (3) a declaratory judgment that 111 W57th Mezz Investor LLC, through Spruce Capital, Crane, and Schwartz, has indemnified the Apollo Lenders against any and all loss that the Apollo Lenders have incurred or may incur in defending against this case. On January 23, 2023, the Apollo Lenders filed a notice of voluntary discontinuance without prejudice, voluntarily discontinuing their first crossclaim for contribution only as it was brought against Stern, Maloney, Sponsor, 111 West 57th Control LLC, and 111 West 57th Manager LLC. On April 30, 2024, the Apollo Lenders filed a motion for an order of discontinuance of their crossclaims, which the Court granted on June 7, 2024, and which was entered on June 12, 2024.

On July 12, 2024, Plaintiff served a motion for leave to appeal to the Court of Appeals the judgment, to the extent it was final, against Apollo Lenders, Spruce Capital Partners LLC, Joshua Crane, and Robert Schwartz.  Also on July 12, 2024, Plaintiff filed a notice of appeal to the First Department of the trial court’s order granting Apollo Lenders’ motion for an order of discontinuance of their crossclaims.

On January 30, 2023, Defendant 111 W57 Mezz Investor LLC filed its answer to Plaintiff’s Second Amended Complaint. Because the Court has resolved the motions to dismiss, discovery has recommenced, and Plaintiffs are actively seeking the production of documents.

Since the Company is not a party to the Loan Agreements, it does not have access to communications with the lenders, except for those individual communications that the Sponsor has elected to share or that have been produced in the ongoing litigation.  The Company has continued to demand access to such information, including access to the books and records for the 111 West 57^th Property both under the JV Agreement and as part of the Sponsor Action and the Lender Action. For additional information with regard to the Company’s investment in the 111 West 57^th Property and the Company’s recording of an impairment of its equity investment in the 111 West 57^th Property in 2017, see Note 3.

111 West 57th Investment LLC, et al. v. Kasowitz Benson Torres LLP, et al., No. 151139/2024 (N.Y. Sup. Ct.). On June 27, 2024, 111 West 57th Investment LLC, derivatively on behalf of 111 West 57th Partners LLC and 111 West 57th Mezz 1 LLC, and 111 West 57th Manager Funding LLC, derivatively on behalf of 111 West 57th Manager LLC (collectively, “Plaintiffs”), filed a Complaint against Kasowitz Benson Torres LLP and Douglas B. Heitner (collectively, “Defendants”) in the Supreme Court of the State of New York, County of New York. Plaintiffs’ claims arise out of Defendants’ representation of 111 West 57th Partners LLC, 111 West 57th Mezz 1 LLC, and 111 West 57th Manager LLC in connection with the real estate development project of 111 West 57th Street (the “Project”) and related financing and other transactions, while simultaneously representing persons and entities with interests adverse to and in conflict with 111 West 57th Partners LLC’s, 111 West 57th Mezz 1 LLC’s, and 111 West 57th Manager LLC’s interests (and the interests of other members of these represented entities), including but not limited to: Michael Stern, Kevin Maloney, and various entities owned and/or controlled by them.  Specifically, in representing 111 West 57th Partners LLC, 111 West 57th Mezz 1 LLC, and 111 West 57th Manager LLC throughout the restructuring of the financing and the raising of capital for the Project, including, without limitation, the New York Uniform Commercial Code “strict foreclosure” in 2017 on the Project, Defendants acted to the detriment of these clients to benefit their other, longtime clients, resulting in 111 West 57th Partners LLC losing an extremely valuable asset in the strict foreclosure.  Plaintiffs assert claims for breach of fiduciary duty and legal malpractice.  Plaintiffs seek to recover money damages, improperly paid legal fees, costs, attorneys’ fees, and such other relief as is just and proper (together with interest thereon).  On July 2, 2024, Plaintiff voluntarily discontinued their claims, without prejudice and without costs, as against Defendant Douglas B. Heitner.  For additional information with regard to the Company’s investment in the 111 West 57th Property, see Note 3.

AmBase Corp. et al. v. 111 West 57th Sponsor LLC et al., No. 651782/2024 (N.Y. Sup. Ct.). On April 4, 2024, AmBase Corporation, 111 West 57th Manager Funding LLC, and 111 West 57th Investment LLC, on behalf of itself and derivatively on behalf of 111 West 57th Partners LLC and 111 West 57th Mezz 1 LLC (collectively, “Plaintiffs”), filed a Summons with Notice against 111 West 57th Sponsor LLC, 111 West 57th Control LLC, 111 West 57th Developer LLC, Kevin Maloney, Michael Stern, JDS Construction Group LLC, JDS Development LLC, PMG Construction Group LLC, Property Markets Group, Inc., 111 Construction Manager LLC, Manager Member 111W57 LLC, and John and Jane Does 1–10 (collectively, “Defendants”) in the Supreme Court of the State of New York, County of New York. Plaintiffs’ claims arise out of alleged fraudulent transfers by, between, and/or to Defendants before and during the pendency of the underlying litigation AmBase Corp. et al. v. 111 West 57th Sponsor LLC et al., Index No. 652301/2016.  Specifically, despite knowing of contractual agreements, obligations, and/or claims between Plaintiffs and the Defendants, following the commencement of the suit by Plaintiffs, Defendants allegedly continued to make transfers and/or incur obligations in violation of the law, for no consideration or equivalent value, which rendered the transferor(s) insolvent (or when they were already insolvent), and rendering the transferor(s) unable to meet debts as they become due, unable to pay actual or future creditors, unable to meet business/transaction obligations as they arise, and/or with the actual intent to hinder, delay, and/or defraud Plaintiffs and other creditors.  The Summons with Notice further states that, upon information and belief, the scheme included the transfer to one or more insider(s) and or their affiliates, principals, and/or agents.  The scheme was allegedly concealed from Plaintiffs, who were not given the opportunity to consent or to dissent.  Plaintiffs allege that they have suffered damages and demand relief of no less than $100 million plus Plaintiffs’ own attorneys’ fees and costs, as well as restitution, constructive trust, the voiding of the fraudulent conveyances, statutory remedies, and such other and further relief as the Court deems proper.  For additional information with regard to the Company’s investment in the 111 West 57th Property, see Note 3.

AmBase Corp., et al. v. ACREFI Mortgage Lending LLC, et al. In June 2018, the Company initiated another litigation in the NY Court, Index No. 655031/2017, (the “Apollo Action”). The defendants in the Apollo Action were ACREFI Mortgage Lending, LLC, Apollo Credit Opportunity Fund III AIV I LP, AGRE Debt 1 – 111 W 57, LLC, and Apollo Commercial Real Estate Finance, Inc. (collectively, the “Apollo Defendants”). In the Apollo Action, the Company alleged that the Apollo Defendants aided and abetted the Sponsor, Stern, and Maloney in breaching their fiduciary duties to the Company in connection with the 111 West 57th Property and tortiously interfered with the JV Agreement. The Company was seeking damages as well as punitive damages for tortious interference with the JV Agreement and aiding and abetting the Sponsor’s breaches of their fiduciary duties to the joint venture. The Apollo Defendants filed a motion to dismiss on August 17, 2018. On October 22, 2019, the NY Court entered an order dismissing the Company’s complaint in the Apollo Action in its entirety. On November 8, 2019, the NY Court entered judgment (the “Apollo Dismissal”) dismissing the Apollo Action in favor of the Apollo Defendants. On December 10, 2019, the Company filed a notice of appeal seeking the appeal of the Apollo Dismissal. On August 7, 2020, the Company perfected its appeal of the Apollo Dismissal. After Investment LLC filed its motion to amend the complaint in the Lender Action to add claims against Apollo, the parties to the Apollo Action filed a stipulation to withdraw the appeal in the Apollo Action. For additional information with regard to the Company’s investment in the 111 West 57th Property, see Note 3.

AmBase Corp., et al. v. Custom House Risk Advisors, Inc., et al. On April 2, 2020, the Company initiated litigation in the United States District Court for the Southern District of New York, Case No. 1:20-cv-02763-VSB (the “Custom House Action”). The defendants in the Custom House Action were Custom House Risk Advisors, Inc. and Elizabeth Lowe (collectively, the “Custom House Defendants”). In the Custom House Action, the Company alleged that the Custom House Defendants (a) aided and abetted Sponsor, Stern, and Maloney in breaching their fiduciary duties to the Company by structuring an insurance policy to the personal benefit of Sponsor, Stern and Maloney and the detriment of the 111 West 57th Project and concealing the structure and ownership of the insurance policy from the Company and (b) committed fraud by making material misrepresentations about the terms of the policy to the Company, inducing the Company to contribute additional capital to the 111 West 57th Project to cover the costs of the insurance policy. The Company sought damages as well as disgorgement of profits the Custom House Defendants earned from their wrongful conduct. On April 10, 2020, the Custom House Defendants waived service of process. In an agreement dated July 31, 2020, the Company and the Custom House Defendants agreed to certain terms for a settlement and entered into a settlement agreement which requires that the Custom House Defendants satisfy certain conditions prior to any dismissal of the Custom House Action. On December 6, 2021, the Court approved a stipulation dismissing the Company’s claims and agreed to retain jurisdiction to enforce the settlement agreement.   For additional information with regard to the Company’s investment in the 111 West 57^th Property, see Note 3.

With respect to its disputes and litigation relating to its interest in the 111 West 57th Property, the Company is pursuing, and will continue to pursue, other options to realize the Company’s investment value, various legal courses of action to protect its legal rights, recovery of its asset value from various sources of recovery, as well as considering other possible economic strategies, including the possible sale of the Company’s interest in and/or rights with respect to the 111 West 57^th Property; however, there can be no assurance that the Company will prevail with respect to any of its claims.

The Company can give no assurances regarding the outcome of the matters described herein, including as to the effect of Spruce’s actions described herein, whether the Sponsor will perform their contractual commitments to the Company under the JV Agreement, as to what further action, if any, the lenders may take with respect to the project, as to the ultimate resolution of the ongoing litigation proceedings relating to the Company’s investment interest in the 111 West 57^th Property, as to the ultimate effect of the Sponsor’s, the Company’s or the lenders’ actions on the project, as to the completion or ultimate success of the project, or as to the value or ultimate realization of any portion of the Company’s equity investment in the 111 West 57^th Property. For additional information with regard to the Company’s investment in the 111 West 57^th Property, see Note 3.

While the Company’s management is evaluating future courses of action to protect and/or recover the value of the Company’s equity investment in the 111 West 57^th Property, the adverse developments make it uncertain as to whether any such courses of action will be successful. Any such efforts are likely to require sustained effort over a period of time and substantial additional financial resources. Inability to recover all or most of such value would, in all likelihood, have a material adverse effect on the Company’s financial condition and future prospects. The Company can give no assurances with regard to if it will prevail with respect to any of its claims.

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Litigation Funding Agreement

6 Months Ended

Jun. 30, 2024

Litigation Funding Agreement [Abstract]

Litigation Funding Agreement

Note 7 – Litigation Funding Agreement

In 2017, the Company entered into a Litigation Funding Agreement (the “2017 LFA”) with Mr. R.A. Bianco, to provide litigation funding to the Company for litigation costs in connection with the Company’s legal proceedings relating to the Company’s equity investment in the 111 West 57^th Property.

In 2019, after receiving approval from the Special Committee, the Company and Mr. R.A. Bianco entered into an amendment to the 2017 LFA (the “2019 LFA Amendment”). In summary the 2019 LFA Amendment provided for the release of Mr. R.A. Bianco from all further funding obligations under the 2017 LFA and that, in the event the Company receives any litigation proceeds from the 111 West 57^th Litigation, such litigation proceeds shall be distributed as follows:

(i) first, 100% to the Company in an amount equal $7,500,000; and

(ii) thereafter, any additional amounts shall be distributed (a) 75% to the Company and (b) 25% to Mr. R.A. Bianco.

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Loan(s) Payable - Related Party

6 Months Ended

Jun. 30, 2024

Loan(s) Payable - Related Party [Abstract]

Loan(s) Payable - Related Party

Note 8 – Loan(s) Payable – Related Party

The Company and Mr. R.A. Bianco entered into an agreement(s) for Mr. R.A. Bianco to provide senior loan(s) to the Company for working capital. The loan(s) are due on the earlier of the date the Company receives funds from any source, (excluding funds received by the Company by any litigation funding entity to fund any of the 111 West 57^th legal proceedings), sufficient to pay all amounts due under the loan(s), including all accrued interest thereon, including without limitation, from a settlement of the 111 West 57^th legal proceedings or (b) the date(s) indicated herein.

The Company and Mr. R.A. Bianco further agreed that amounts due pursuant to the loan(s) plus interest can be converted by Mr. R.A. Bianco, at his option, into a litigation funding agreement pari-pasu with any litigation funding agreement entered into by the Company with a litigation funding entity.

Information regarding the loan(s) payable is as follows: ($ in thousands)

Date of loan(s)	Rate			Due Date	December 31, 2023
February 2023		6.50	%	February 28, 2025	$	300
April 2023		6.50	%	April 30, 2025		325
May 2023		6.50	%	May 31, 2025		310
June 2023		7.00	%	June 30, 2025		330
July 2023		7.00	%	July 31, 2025		333
August 2023		7.00	%	August 31, 2025		250
October 2023		7.00	%	October 31, 2025		300
November 2023		7.00	%	November 30, 2025		450
December 2023		7.00	%	December 31, 2025		600
					$	3,198

Information regarding accrued interest expense on the loan(s) payable is as follows:

(in thousands)	June 30, 2024		December 31, 2023
Accrued interest expense	$	-	$	85

In January 2024 through March 2024, the Company and Mr. R.A. Bianco entered into additional agreements pursuant to which Mr. R.A. Bianco made additional loans to the Company aggregating $350,000, for use as working capital in accordance with the same terms of the loan(s) payable noted herein.

In April 2024, with funds received from the Equity Offering, the Company repaid Mr. R.A. Bianco the full amount of the loan(s) payable outstanding, plus accrued interest. For additional information, see Note 9.

For additional information regarding the Company’s litigation funding effort, see Note 1. For additional information regarding the Company’s legal proceedings relating to the 111 West 57^th Property, including the Company’s challenge to the Strict Foreclosure, see Note 3 and Note 6.

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Stockholders' Equity

6 Months Ended

Jun. 30, 2024

Stockholders' Equity [Abstract]

Stockholders' Equity

Note 9 - Stockholders’ Equity

As disclosed in the Company’s periodic financial reports, as previously filed with the Securities and Exchange Commission (“SEC”), on February 28, 2024, the Company commenced a private placement offering (the “Equity Offering”) of shares of the Company’s common stock (the “Shares”).

On April 1, 2024, the Company completed the issuance and sale of all the Shares in the Equity Offering in accordance with the terms and conditions thereof, including Shares purchased by an institutional investor not affiliated with the Company and Shares purchased by BARC Investments, LLC, an affiliate of the Company owned and controlled by two of the Company’s directors and their sibling.  The Shares sold consisted of authorized unissued shares and treasury shares held. The offer and sale of the Shares in the Equity Offering was completed in reliance on the exemption from registration under Rule 506(c) of Regulation D promulgated under Section 4(a)(2) of the Securities Act of 1933, as amended.  The Equity Offering is more fully described in the Equity Offering documents and disclosed in the Company’s reports as previously filed with the SEC.

Summary information of private placement Equity Offering is as follows:

($ in thousands, except per share data)

Number of Shares purchased by BARC		42,950,460
Number of Shares purchased by others		1,250,000
Total number of Shares offered and purchased		44,200,460
Equity Offering – purchase price per Share	$	0.20
Total proceeds received from the Equity Offering	$	8,840

At the Company’s June 2, 2024, Annual Meeting of Stockholders, the Company’s stockholders approved an amendment to the Company’s Restated Certificate of Incorporation to increase the number of authorized shares of the Company’s common stock. A copy of the Company’s Amended and Restated Certificate of Incorporation as filed and recorded with the Secretary of State of the State of Delaware effective as of July 23, 2024, is filed as Exhibit 3.1 to this Quarterly Report on Form 10-Q for the quarter ended June 30, 2024.

Authorized common stock consists of the following:

(shares in thousands)	July 23, 2024		December 31, 2023
Par value	$	0.01	$	0.01
Authorized shares		200,000		85,000
Issued shares		84,938		46,410
Outstanding shares		84,938		40,738

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Subsequent Events

6 Months Ended

Jun. 30, 2024

Subsequent Events [Abstract]

Subsequent Events

Note 10 - Subsequent Events

The Company has performed a review of events subsequent to the balance sheet dated June 30, 2024, through the filing of these interim financial statements.  Other than as discussed herein, the Company has no events, subsequent to June 30, 2024, and through the date these unaudited condensed consolidated financial statements were issued.

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Insider Trading Arrangements	3 Months Ended
	Jun. 30, 2024
Insider Trading Arrangements [Line Items]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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The Company and Basis of Presentation and Going Concern (Policies)

6 Months Ended

Jun. 30, 2024

The Company and Basis of Presentation and Going Concern [Abstract]

Basis of Presentation

The accompanying condensed consolidated financial statements of AmBase Corporation and subsidiaries (“AmBase” or the “Company”) are unaudited and subject to year-end adjustments. All material intercompany transactions and balances have been eliminated. In the opinion of management, these financial statements reflect all adjustments, consisting only of normal recurring adjustments unless otherwise disclosed, necessary for a fair presentation of the Company’s consolidated financial position, results of operations and cash flows. Results for interim periods are not necessarily indicative of results for the full year. The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that it deems reasonable, that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from such estimates and assumptions. The unaudited interim condensed consolidated financial statements presented herein are condensed and 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, 2023.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2024

Summary of Significant Accounting Policies [Abstract]

New Accounting Pronouncements

New accounting pronouncements

There are no new accounting pronouncements that would likely materially affect the Company’s unaudited condensed consolidated financial statements.

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Investment in 111 West 57th Partners LLC (Tables)

6 Months Ended

Jun. 30, 2024

Investment in 111 West 57th Partners LLC [Abstract]

Initial Investment in 111 West 57th Property

Amounts relating to the Company’s initial June 2013 investment in the 111 West 57^th Property follow:

($ in thousands)
Company’s aggregate initial investment	$	57,250
Company’s aggregate initial membership interest %		60.3	%

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Savings Plan (Tables)

6 Months Ended

Jun. 30, 2024

Savings Plan [Abstract]

Matching Contributions to Savings Plan

The Company’s matching contributions to the Savings Plan, charged to expense, were as follows:

($ in thousands)	Three Months Ended						Six Months Ended
	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
Company matching contributions	$	28		$	28		$	80		$	79
Employer match %		100	%		100	%		100	%		100	%

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Loan(s) Payable - Related Party (Tables)

6 Months Ended

Jun. 30, 2024

Loan(s) Payable - Related Party [Abstract]

Loans Payable

Information regarding the loan(s) payable is as follows: ($ in thousands)

Date of loan(s)	Rate			Due Date	December 31, 2023
February 2023		6.50	%	February 28, 2025	$	300
April 2023		6.50	%	April 30, 2025		325
May 2023		6.50	%	May 31, 2025		310
June 2023		7.00	%	June 30, 2025		330
July 2023		7.00	%	July 31, 2025		333
August 2023		7.00	%	August 31, 2025		250
October 2023		7.00	%	October 31, 2025		300
November 2023		7.00	%	November 30, 2025		450
December 2023		7.00	%	December 31, 2025		600
					$	3,198

Accrued Interest Expense on Loans Payable

Information regarding accrued interest expense on the loan(s) payable is as follows:

(in thousands)	June 30, 2024		December 31, 2023
Accrued interest expense	$	-	$	85

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Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2024

Stockholders' Equity [Abstract]

Private Placement Equity Offering

Summary information of private placement Equity Offering is as follows:

($ in thousands, except per share data)

Number of Shares purchased by BARC		42,950,460
Number of Shares purchased by others		1,250,000
Total number of Shares offered and purchased		44,200,460
Equity Offering – purchase price per Share	$	0.20
Total proceeds received from the Equity Offering	$	8,840

Authorized Common Stock

Authorized common stock consists of the following:

(shares in thousands)	July 23, 2024		December 31, 2023
Par value	$	0.01	$	0.01
Authorized shares		200,000		85,000
Issued shares		84,938		46,410
Outstanding shares		84,938		40,738

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The Company and Basis of Presentation and Going Concern (Details) $ in Millions	6 Months Ended
	Jun. 30, 2024 USD ($)	Apr. 01, 2024 Director
Litigation Settlement [Abstract]
Number of directors | Director		2
Maximum [Member]
Litigation Settlement [Abstract]
Litigation costs | $	$ 5
Litigation settlement funding amount multiplier	3.5
Minimum [Member]
Litigation Settlement [Abstract]
Litigation settlement funding amount multiplier	1

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Investment in 111 West 57th Partners LLC, Summary (Details) - Investment in 111 West 57th Partners LLC [Member] $ in Thousands	Jun. 28, 2013 USD ($)
Initial Investment Relating to the 111 West 57th Property [Abstract]
Company's aggregate initial investment	$ 57,250
Company's aggregate initial membership interest %	60.30%

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Investment in 111 West 57th Partners LLC, Additional Information Regarding Equity Investment in 111 West 57th Property (Details) - USD ($)	3 Months Ended	6 Months Ended
	Mar. 31, 2014	Jun. 30, 2024	Dec. 31, 2023
Additional Information Regarding Equity Investment in 111 West 57th Property [Abstract]
Description of partnership agreement distribution		The JV Agreement and related operating agreements generally provide that all distributable cash shall be distributed as follows: (i) first, 100% to the members in proportion to their percentage interests until Investment LLC has received distributions yielding a 20% internal rate of return as calculated; (ii) second, 100% to the Sponsor as a return of (but not a return on) any additional capital contributions made by the Sponsor on account of manager overruns; and (iii) thereafter, (a) 50% to the members in proportion to their respective percentage interests at the time of such distribution, and (b) 50% to the Sponsor.
Subordinated participation interest to CEO	10.00%
Percentage of distribution on company's initial investment to be received prior to CEO receiving percentage distribution	150.00%
Interest expense, subordinated participation interest		$ 0
Interest Payable		$ 0	$ 85,000
Voting rights		0.00%
Investment LLC [Member] | Capital LLC [Member]
Additional Information Regarding Equity Investment in 111 West 57th Property [Abstract]
Terms of distributions to Capital LLC		available cash of Investment LLC will be distributed first to Capital LLC until it has received a 20% internal rate of return (calculated as provided for in the JV Agreement as noted above), second to the Company until it has received 150% of its capital, and, thereafter, available cash is split 10/90, with 10% going to Mr. R.A. Bianco as the subordinated participation interest noted above and 90% going to Capital LLC and the Company pari-passu, with Capital LLC receiving one-half of its pro-rata share based on capital contributed and the Company receiving the balance.

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Savings Plan (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Savings Plan [Abstract]
Company matching contributions	$ 28	$ 28	$ 80	$ 79
Employer match %	100.00%	100.00%	100.00%	100.00%

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Legal Proceedings (Details) $ in Millions	Apr. 04, 2024 USD ($)
Minimum [Member]
Legal Proceedings [Abstract]
Damages sought by plaintiffs	$ 100

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Litigation Funding Agreement (Details) - Amendment [Member] $ in Thousands	6 Months Ended
	Jun. 30, 2024 USD ($)
Litigation Funding Commitment [Abstract]
Maximum amount of litigation proceeds to be distributed to the Company	$ 7,500
Percentage of distribution ratio	75.00%
Maximum [Member]
Litigation Funding Commitment [Abstract]
Percentage of distribution ratio up to maximum amount to the Company	100.00%
R. A. Bianco [Member]
Litigation Funding Commitment [Abstract]
Percentage of distribution ratio	25.00%

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Loan(s) Payable - Related Party (Details) - USD ($)	6 Months Ended
	Jun. 30, 2024	Mar. 31, 2024	Dec. 31, 2023
Loans Payable [Abstract]
Outstanding balance	$ 0		$ 3,198,000
Accrued Interest Expense on Loans Payable [Abstract]
Accrued interest expense	$ 0		85,000
R. A. Bianco [Member]
Loans Payable [Abstract]
Outstanding balance		$ 350,000,000
Loans Payable [Member] | February 2023 [Member]
Loans Payable [Abstract]
Date of loan	Feb. 01, 2023
Rate	6.50%
Due date	Feb. 28, 2025
Outstanding balance			300,000
Loans Payable [Member] | April 2023 [Member]
Loans Payable [Abstract]
Date of loan	Apr. 01, 2023
Rate	6.50%
Due date	Apr. 30, 2025
Outstanding balance			325,000
Loans Payable [Member] | May 2023 [Member]
Loans Payable [Abstract]
Date of loan	May 01, 2023
Rate	6.50%
Due date	May 31, 2025
Outstanding balance			310,000
Loans Payable [Member] | June 2023 [Member]
Loans Payable [Abstract]
Date of loan	Jun. 01, 2023
Rate	7.00%
Due date	Jun. 30, 2025
Outstanding balance			330,000
Loans Payable [Member] | July 2023 [Member]
Loans Payable [Abstract]
Date of loan	Jul. 01, 2023
Rate	7.00%
Due date	Jul. 31, 2025
Outstanding balance			333,000
Loans Payable [Member] | August 2023 [Member]
Loans Payable [Abstract]
Date of loan	Aug. 01, 2023
Rate	7.00%
Due date	Aug. 31, 2025
Outstanding balance			250,000
Loans Payable [Member] | October 2023 [Member]
Loans Payable [Abstract]
Date of loan	Oct. 01, 2023
Rate	7.00%
Due date	Oct. 31, 2025
Outstanding balance			300,000
Loans Payable [Member] | November 2023 [Member]
Loans Payable [Abstract]
Date of loan	Nov. 01, 2023
Rate	7.00%
Due date	Nov. 30, 2025
Outstanding balance			450,000
Loans Payable [Member] | December 2023 [Member]
Loans Payable [Abstract]
Date of loan	Dec. 01, 2023
Rate	7.00%
Due date	Dec. 31, 2025
Outstanding balance			$ 600,000

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Stockholders' Equity (Details) $ / shares in Units, $ in Thousands	Apr. 01, 2024 USD ($) Director $ / shares shares	Jul. 23, 2024 $ / shares shares	Jun. 30, 2024 $ / shares shares	Dec. 31, 2023 $ / shares shares
Equity Offering [Abstract]
Number of directors | Director	2
Common Stock [Abstract]
Par value (in dollars per share) | $ / shares			$ 0.01	$ 0.01
Authorized shares (in shares)			85,000,000	85,000,000
Issued shares (in shares)			84,938,000	46,410,000
Outstanding shares (in shares)			84,938,000	40,738,000
Private Placement Equity Offering [Member]
Private Placement Equity Offering [Abstract]
Number of shares offered and purchased (in shares)	44,200,460
Equity Offering - purchase price per Share (in dollars per share) | $ / shares	$ 0.2
Total proceeds received from the Equity Offering | $	$ 8,840
Private Placement Equity Offering [Member] | Others [Member]
Private Placement Equity Offering [Abstract]
Number of shares offered and purchased (in shares)	1,250,000
Private Placement Equity Offering [Member] | Related Party [Member] | BARC Investments, LLC [Member]
Private Placement Equity Offering [Abstract]
Number of shares offered and purchased (in shares)	42,950,460
Subsequent Event [Member]
Common Stock [Abstract]
Par value (in dollars per share) | $ / shares		$ 0.01
Authorized shares (in shares)		200,000,000
Issued shares (in shares)		84,938,000
Outstanding shares (in shares)		84,938,000