Wellsford Real Properties, Inc. (AMEX:WRP) announced today that its
net assets in liquidation at December 31, 2006 aggregated
$57,595,561, or $8.67 per share, based upon 6,646,378 common shares
outstanding, compared to $56,569,414, or $8.74 per share, at
December 31, 2005 based upon 6,471,179 common shares outstanding.
At December 31, 2006, WRP had total assets of $108,477,483, which
was comprised primarily of real estate assets under development of
$41,159,400, investments in Reis, Inc. (�Reis�) of $20,000,000,
cash of $39,050,333, restricted cash of $2,936,978 and deferred
merger costs of $2,677,764. Total liabilities and minority
interests of $50,881,922 at December 31, 2006 was comprised of the
reserve for estimated costs during the period of liquidation of
$18,301,885, mortgage notes and construction loans payable of
$20,129,461, the reserve for option cancellations of $2,633,408 and
construction payables, other accruals and liabilities and minority
interests aggregating $9,817,168. During the year ended December
31, 2006, net assets in liquidation increased $1,026,147. This
increase is primarily attributable to (1) operating income of
$1,767,467, which primarily represents interest income earned from
cash and cash equivalents, (2) amounts recognized from real estate
assets under development of $1,551,640, which resulted from the net
effect of sales of condominiums and homes and value adjustments to
the development projects, (3) cash proceeds of $1,008,035 from the
exercise of stock options by an officer in November 2006 and (4) a
decrease in the option cancellation reserve of $925,943 which
primarily reflects the changes in the market price of WRP�s common
stock between March 31, 2006 and December 31, 2006, offset by a
$4,226,938 provision upon the adoption by the board of directors of
modifications in the terms of WRP�s stock option plans during the
first quarter of 2006. The provision resulted from the modification
to allow for cash payments that would be made to option holders, at
their election, as consideration for the cancellation of their
options in the amount of fair value of WRP common stock in excess
of the adjusted exercise prices of outstanding options as of March
31, 2006. WRP announced in November 2005 that its stockholders had
ratified the Plan of Liquidation (the �Plan�) at the annual meeting
held on November 17, 2005. After the approval of the Plan by the
stockholders, WRP completed the sale of its largest asset, the
three residential rental phases of its Palomino Park project for
$176,000,000. On December 14, 2005, WRP made an initial liquidating
distribution of $14.00 per share, aggregating approximately
$90,597,000, to its stockholders. For all periods preceding
stockholder approval of the Plan on November 17, 2005, WRP�s
financial statements are presented on the going concern basis of
accounting. As required by generally accepted accounting
principles, WRP adopted the liquidation basis of accounting as of
the close of business on November 17, 2005. Under the liquidation
basis of accounting, assets are stated at their estimated net
realizable value and liabilities are stated at their estimated
settlement amounts, which estimates will be periodically reviewed
and adjusted as appropriate. If the Merger with Reis (as described
below) is consummated, then WRP will change from the liquidation
basis of accounting to the going concern basis of accounting upon
the effective termination of the Plan. WRP reported revenues of
$13,218,359 and net income of $3,018,292, or $0.47 per basic and
diluted share, during the period January 1, 2005 to November 17,
2005. Remaining Activities, Assets and Investments At December 31,
2006, WRP�s remaining activities, assets and investments were
comprised primarily of the following: The 259 unit Gold Peak
condominium development in Highlands Ranch, Colorado is the
remaining phase from WRP�s Palomino Park development. Sales
commenced in January 2006 and 108 Gold Peak units were sold by
December 31, 2006. At December 31, 2006 an additional 31 units were
under contract. The Orchards is a single family home development in
East Lyme, Connecticut, upon which WRP commenced building 101
single family homes on 139 acres. An additional 60 homes could be
built on a contiguous 85 acre parcel of land also owned by WRP.
Sales commenced in June 2006 and five homes were sold by December
31, 2006. At December 31, 2006, an additional three East Lyme homes
were under contract. A 75% ownership interest in a joint venture
that owns two land parcels aggregating approximately 300 acres in
Claverack, New York. One land parcel is subdivided into seven
single family home lots on approximately 65 acres. One house and
one lot were sold to a purchaser during the year ended December 31,
2006. The remaining 235 acres, known as The Stewardship, was
originally subdivided into six single family home lots. WRP
recently obtained conditional subdivision approval to increase the
number of developable residential lots to 48. WRP intends to obtain
construction financing, complete the required infrastructure,
construct two model homes and sell lots and homes to individual
buyers. Ownership interests aggregating 23% in Reis, a provider of
commercial real estate market information to investors, lenders and
other professionals in the debt and equity capital markets. A 10%
interest in Clairborne Fordham, a company which currently owns and
is selling the remaining two unsold residential units of a
50-story, 277 unit, luxury condominium apartment project in
Chicago, Illinois. Merger with Reis On October 11, 2006 WRP
announced that it had entered into a definitive merger agreement to
acquire Reis (the �Merger�). The Merger was approved by the
independent members of WRP�s board of directors on that date. Reis
stockholders, excluding Wellsford Capital, a wholly-owned
subsidiary of WRP, will receive, in the aggregate, approximately
$34,579,414 in cash and 4,237,673 shares of newly issued common
stock of WRP which, for purposes of the Merger, has been
established at $8.16 per share, resulting in an implied equity
value for Reis of approximately $90,000,000. The rules of the
American Stock Exchange (the �AMEX�) require WRP�s stockholders to
approve the issuance of shares of common stock of WRP to Reis
stockholders, since such an issuance would be greater than 20% of
the WRP common shares currently outstanding. The transaction, which
is also subject to the approval of Reis�s stockholders, regulatory
approvals and other customary closing conditions, is expected to
close in the second quarter of 2007. WRP filed a registration
statement on Form S-4 with the Securities and Exchange Commission
on December 28, 2006 and, as amended, on March 9, 2007. If the
Merger is consummated, WRP will terminate its previously adopted
Plan, but will continue with its residential development and sales
activities related to its real estate assets over a period of
years. The cash portion of the purchase price is to be funded by a
loan extended to Reis by a financial institution aggregating
$27,000,000 (of which $25,000,000 may be used to pay the cash
portion of the Merger consideration and the payment of related
Merger costs and the remaining $2,000,000 may be utilized for
Reis�s working capital needs) and WRP�s cash on hand. On the
consummation of the Merger, WRP will have approximately 10,700,000
shares of common stock outstanding and will change its corporate
name to Reis, Inc. Following the consummation of the Merger,
current Reis stockholders will own approximately 38% of WRP. If the
merger is consummated, WRP estimates that $1.15 of the $14.00 per
share liquidating distribution in 2005 will be recharacterized as
taxable dividend income. There can be no assurance that Reis�s
stockholders will vote to approve the Merger and adopt the Merger
agreement or that WRP�s stockholders will vote to issue shares of
WRP�s common stock in connection with the Merger. Furthermore,
there can be no assurance following a vote in favor of the Merger
and such issuance of WRP�s common stock that the Merger will be
consummated. This press release, together with other statements and
information publicly disseminated by WRP, contains certain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking
statements relate to WRP�s outlook or expectations for earnings,
revenues, expenses, asset quality or other future financial or
business performance, strategies or expectations, or the impact of
legal, regulatory or supervisory matters on WRP�s business
operations or performance. Specifically, forward-looking statements
may include: -- statements relating to the benefits of the merger
with Reis; -- statements relating to future business prospects,
revenue, income and cash flows of WRP individually; -- statements
relating to revenues of the resulting company after the merger with
Reis; and -- statements preceded by, followed by or that include
the words "estimate," "plan," "project," "intend," "expect,"
"anticipate," "believe," "seek," "target" or similar expressions.
These statements reflect WRP�s management�s judgment based on
currently available information and involve a number of risks and
uncertainties that could cause actual results to differ materially
from those in the forward-looking statements. With respect to these
forward-looking statements, WRP�s management has made assumptions
regarding, among other things, the determination of estimated net
realizable value for its assets and the determination of estimated
settlement amounts for its liabilities and general economic
conditions. Future performance cannot be ensured. Actual results
may differ materially from those in the forward-looking statements.
Some factors that could cause WRP�s actual results to differ
include: -- expected benefits from the merger with Reis may not be
fully realized or at all; -- revenues following the merger with
Reis may be lower than expected; -- the possibility of litigation
arising as a result of terminating the Plan; -- adverse changes in
the real estate industry and the markets in which the post-merger
company will operate; -- the inability to retain and increase the
number of customers of the post-merger company; -- competition; --
difficulties in protecting the security, confidentiality, integrity
and reliability of the data of the post-merger company; -- legal
and regulatory issues; -- changes in accounting policies or
practices; and -- the risk factors listed under "Item 1A. Risk
Factors" of WRP's annual report on Form 10-K for the year ended
December 31, 2006 as filed with the Securities and Exchange
Commission ("SEC") on March 29, 2007 and under "Risk Factors" in
WRP's registration statement on Form S-4 as initially filed on
December 28, 2006 and, as amended, on March 9, 2007. You are
cautioned not to place undue reliance on any forward-looking
statements, which speak only as of the date of this press release.
Except as required by law, WRP undertakes no obligation to publicly
update or release any revisions to these forward-looking statements
to reflect any events or circumstances after the date of this press
release or to reflect the occurrence of unanticipated events.
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