UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE TO
Tender Offer Statement under Section 14(d)(1)
or 13(e)(1)
of the Securities Exchange Act of 1934
(Amendment No. 1)
American Strategic Investment Co.
| [text] |
| (Name of Subject Company (Issuer)) |
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| Bellevue Capital Partners, LLC |
| (Name of Filing Persons (Offerors)) |
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| Class A Common Stock, Par Value $0.01 per share |
| (Title of Class of Securities) |
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| 649439304 |
| (CUSIP Number of Class of Securities) |
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Nicholas S. Schorsch
Managing Member
Bellevue Capital Partners, LLC
222 Bellevue Avenue
Newport, RI 02840
(212) 415-6500
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(Name, address and telephone number of person authorized to receive notices
and communications on behalf of filing persons) |
With a copy to:
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David S. Huntington, Esq.
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019-6064
(212) 373-3000
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| ☐ | Check the box if the filing relates
solely to preliminary communications made before the commencement of a tender offer. |
Check the appropriate boxes below to designate any transactions to which
the statement relates:
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third-party tender offer subject to Rule 14d-1. |
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issuer tender offer subject to Rule 13e-4. |
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going-private transaction subject to Rule 13e-3. |
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amendment to Schedule 13D under Rule 13d-2. |
Check the following box if the filing is a final amendment reporting the
results of the tender offer: ☐
If applicable, check the appropriate box(es) below to designate the appropriate
rule provision(s) relied upon:
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Rule 13e-4(i) (Cross-Border Issuer Tender Offer) |
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Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) |
SCHEDULE TO
This Amendment No. 1 to Tender Offer Statement
on Schedule TO (“Amendment No. 1”) amends the Tender Offer Statement on Schedule TO (the “Original Schedule TO”
and, together with Amendment No. 1 , the “Schedule TO”) originally filed with the Securities and Exchange Commission on September
27, 2023 (the “Offer Date”) in connection with the offer (the “Offer”) by Bellevue Capital Partners, LLC (“Bellevue”,
“we”, “us” or “our”) to purchase for cash up to 350,000 shares (the “shares”) of Class
A common stock, par value $0.01 per share (the “common stock”), of American Strategic Investment Co. (the “Company”),
the subject company, at a purchase price equal to $10.25 per share (the “Purchase Price”), in cash, less
any applicable withholding taxes and without interest.
The Offer is being
made upon the terms and subject to the conditions set forth in the Offer to Purchase, dated September 27, 2023, and previously
filed as Exhibit (a)(1) to the Original Schedule TO (the “Original Offer to Purchase”), as amended and supplemented by this
Amendment No. 1, dated October 4, 2023 and filed herewith as Exhibit (a)(1) (the “Amended Offer to Purchase” and, together
with the Original Offer to Purchase, the “Offer to Purchase”).
The purpose of this Amendment No. 1 is
to amend the CUSIP number listed in the Schedule TO and the Offer to Purchase filed herewith as Exhibit (a)(1).
The information contained in the Offer to Purchase,
including all schedules and annexes thereto, is hereby expressly incorporated herein by reference in response to all of the items of this
Schedule TO as more particularly described below.
| Item 1. | Summary Term Sheet. |
Reference is made to the information set forth
under “Summary Term Sheet” in the Offer to Purchase, which is incorporated herein by reference.
| Item 2. | Subject Company Information. |
(a) The
name of the subject company and issuer is American Strategic Investment Co. The address and telephone number of the Company is set forth
under Item 3.
(b) Reference
is made to the information set forth under “Introduction” in the Offer to Purchase, which is incorporated herein by reference.
(c) Reference
is made to the information set forth in the Offer to Purchase under Section 7 (“Price Range of Shares; Dividends”), which
is incorporated herein by reference.
| Item 3. | Identity and Background of Filing Person. |
Bellevue is the filing person. The address of
its principal executive office is 222 Bellevue Avenue, Newport, RI 02840, and its telephone number is (212) 415-6500. Reference is made
to the information set forth in the Offer to Purchase under Section 11 (“Interest of Directors and Executive Officers; Transactions
and Arrangements Concerning the Shares”), which is incorporated herein by reference.
| Item 4. | Terms of the Transaction. |
(a) Reference
is made to the information set forth in the Offer to Purchase under the following headings, with such information being incorporated herein
by reference:
Summary Term Sheet;
Introduction;
| Section 1 |
(“Number of Shares; Proration”); |
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| Section 2 |
(“Purpose of the Offer; Certain Effects of the Offer”); |
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| Section 3 |
(“Procedures for Tendering Shares”); |
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| Section 4 |
(“Withdrawal Rights”); |
| Section 5 |
(“Purchase of Shares and Payment of Purchase Price”); |
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| Section 6 |
(“Conditions of the Offer”); |
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| Section 7 |
(“Price Range of Shares; Dividends”); |
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| Section 8 |
(“Source and Amount of Funds”); |
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| Section 9 |
(“Certain Information Concerning the Company”); |
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| Section 10 |
(“Certain Information Concerning Us”); |
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| Section 11 |
(“Interest of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares”); |
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| Section 12 |
(“Legal Matters; Regulatory Approvals”); |
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| Section 13 |
(“Material U.S. Federal Income Tax Consequences”); |
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| Section 14 |
(“Extension of the Offer; Termination; Amendment”); |
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| Section 15 |
(“Fees and Expenses; Information Agent; Depositary”); and |
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| Section 16 |
(“Miscellaneous”). |
(b) Reference
is made to the information set forth under “Introduction” and under Section 11 (“Interest of Directors and Executive
Officers; Transactions and Arrangements Concerning the Shares”) in the Offer to Purchase, which is incorporated herein by reference.
| Item 5. | Past Contacts, Transactions, Negotiations and Agreements. |
Reference is made to the information set forth
under Section 11 (“Interest of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares”) in
the Offer to Purchase, which is incorporated herein by reference.
| Item 6. | Purposes of the Transaction and Plans or Proposals. |
(a), (b) and (c) Reference is made to the information
set forth under “Summary Term Sheet,” under Section 2 (“Purpose of the Offer; Certain Effects of the Offer”) and
under Section 11 (“Interest of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares”) in
the Offer to Purchase, which is incorporated herein by reference.
| Item 7. | Source and Amount of Funds or Other Consideration. |
(a), (b) and (d) Reference is made to the information
set forth under Section 8 (“Source and Amount of Funds”) in the Offer to Purchase, which is incorporated herein by reference.
| Item 8. | Interest in Securities of the Subject Company. |
(a) and (b) Reference is made to the information
set forth under Section 11 (“Interest of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares”)
in the Offer to Purchase, which is incorporated herein by reference.
| Item 9. | Persons/Assets, Retained, Employed, Compensated or Used. |
Reference is made to the information set forth
under “Summary Term Sheet” and under Section 15 (“Fees and Expenses; Information Agent; Depositary”) in the Offer
to Purchase, which is incorporated herein by reference.
| Item 10. | Financial Statements. |
Not applicable. Pursuant to Instruction 2 to
Item 10 of Schedule TO, Bellevue’s financial statements are not considered material because (i) the consideration offered consists
solely of cash, (ii) the tender offer is not subject to any financing condition, and (iii) cash requirements will be funded from Bellevue’s
available cash. Reference is made to the information set forth in Section 7 (“Source and Amount of Funds or Other Consideration”)
in the Offer to Purchase, which is incorporated herein by reference.
| Item 11. | Additional Information. |
| (a) | Reference is made to the information set forth under Section 2 (“Purpose of the Offer; Certain Effects of the Offer”);
under Section 10 (“Certain Information Concerning Us”); under Section 11 (“Interest of Directors and Executive Officers;
Transactions and Arrangements Concerning the Shares”); and under Section 12 (“Legal Matters; Regulatory Approvals”)
in the Offer to Purchase, which is incorporated herein by reference. |
| (b) | The information set forth in the Offer to Purchase and the related Letter of Transmittal, copies of which are filed as Exhibits (a)(1)
and (a)(2) hereto, as each may be amended or supplemented from time to time, is incorporated herein by reference. The
information contained in all of the exhibits referred to in Item 12 below is incorporated herein by reference. |
| Item 13. | Information Required by Schedule 13E-3. |
Not applicable.
SIGNATURE
After due inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this statement is true, complete and correct.
Dated: October 4, 2023
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BELLEVUE CAPITAL PARTNERS, LLC |
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By: |
/s/ Nicholas Schorsch |
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Name: |
Nicholas Schorsch |
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Title: |
Managing Member |
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EXHIBIT (a)(1)
Offer to Purchase for Cash
Up to 350,000 Shares of Class A Common Stock of
American Strategic Investment Co.
CUSIP: 649439304
At $10.25 Per Share
By: Bellevue Capital Partners, LLC
The Offer, the proration
period and withdrawal rights expire at 11:59 p.m., New York City time, on October 26, 2023, unless the Offer is extended or terminated.
Bellevue Capital Partners, LLC (“Bellevue”,
“we”, “us” or “our”) hereby seeks to acquire up to 350,000 shares (the “shares”) of Class
A common stock, par value $0.01 per share (the “common stock”), of American Strategic Investment Co. (the “Company”),
the subject company, at a purchase price equal to $10.25 per share (the “Purchase Price”), in cash, less
any applicable withholding taxes and without interest, upon the terms and subject to the conditions set forth in this document
(the “Offer to Purchase”) and in the related Letter of Transmittal as each may be supplemented or amended from time to time
(which together constitute the “Offer”).
The Company reported 3,548 holders of record
owning an aggregate of 2,326,993 shares of common stock outstanding as of August 8, 2023, according to its Quarterly Report on Form 10-Q
for the quarter ended June 30, 2023.
Bellevue and its affiliates currently beneficially
own 857,354 shares of common stock in the Company, or approximately 36.8% of the common stock outstanding as of August 8, 2023. If we
purchase the full 350,000 shares we are offering to purchase in the Offer, those shares would represent approximately 15.0% of the Company’s
outstanding shares based on the number of shares outstanding as of August 8, 2023, according to the Company’s Quarterly Report on
Form 10-Q for the quarter ended June 30, 2023. Consummation of the Offer, if all shares sought are tendered, would require payment by
Bellevue of approximately $3,587,500 in aggregate purchase price, which we intend to fund out of our existing capital and assets. We expressly
reserve the right, in our sole discretion, to change the Purchase Price and to increase or decrease the number of shares sought in the
Offer, subject to applicable legal and regulatory requirements. See Section 14.
Holders of shares (the “stockholders”)
are urged to consider the following factors:
| · | Stockholders who tender their shares will give up the opportunity to participate in any future benefits from the ownership of shares,
including potential future distributions by the Company from property operations or dispositions, and the purchase price per share payable
to a tendering stockholder by Bellevue may be less than the total amount which might otherwise be received by the stockholder with respect
to its shares. |
| · | Bellevue is making the Offer for investment purposes and with the intention of making a profit from the ownership of the shares. In
establishing the Purchase Price of $10.25 per share, Bellevue is motivated to establish the lowest price which might be acceptable to
stockholders consistent with Bellevue’s objectives. |
| · | The Offer to Purchase is not conditioned upon any minimum number of shares being tendered. If more than 350,000 shares are validly
tendered and not withdrawn, Bellevue will accept for purchase 350,000 shares from tendering stockholders on a pro rata basis, subject
to the terms and conditions herein. A stockholder may tender any or all shares owned by such stockholder. |
Bellevue expressly reserves the right, in its
sole discretion, at any time and from time to time, (i) to extend the period of time during which the Offer is open and thereby delay
acceptance for payment of, and the payment for, any shares, subject to the restriction below, (ii) upon the occurrence of any of the conditions
specified in Section 6 below and prior to the Expiration Date, to terminate the Offer and not accept for payment any shares, and (iii)
to amend the Offer in any respect prior to the Expiration Date. Notice of any such extension, termination or amendment will promptly be
disseminated to stockholders in a manner reasonably designed to inform stockholders of such change in compliance with Rule 14d-4(c) under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In the case of an extension of the Offer, such extension
will be followed by a press release or public announcement which will be issued no later than 9:00 a.m., Eastern Time, on the next business
day after the scheduled Expiration Date, in accordance with Rule 14e-1(d) under the Exchange Act.
Assuming that the conditions to the Offer are
satisfied or waived and the Offer is fully subscribed, we would purchase 350,000 shares at a Purchase Price per share of $10.25, representing
approximately 15.0% of the Company’s outstanding shares (based on the number of shares outstanding as of August 8, 2023, according
to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023).
The Company’s shares are listed and traded
on the New York Stock Exchange (“NYSE”) under the trading symbol “NYC.” On September 26, 2023, the last reported
sale price of the shares on the NYSE was $6.22 per share, which is below the $10.25 per share Purchase Price for the Offer. Stockholders
are urged to obtain current market quotations for the shares before deciding whether to tender their shares.
None of Bellevue, the Information Agent,
the Depositary or any of our or their respective affiliates makes any recommendation to you as to whether you should tender or refrain
from tendering your shares. You must make your own decision as to whether to tender your shares and, if so, how many shares to tender.
In so doing, you should read carefully all of the information in this Offer to Purchase, and in the other Offer materials, including our
reasons for making the Offer. See Section 2. You are urged to discuss your decisions with your tax advisor, financial advisor and/or broker.
Neither the SEC nor any state securities
commission has approved or disapproved of this transaction or passed upon the merits or fairness of such transaction or passed upon the
adequacy or accuracy of the information contained in this Offer to Purchase. Any representation to the contrary is a criminal offense.
If you have questions or need assistance, or
you require additional copies of this Offer Purchase, the Letter of Transmittal or other related materials, you should contact the Information
Agent at the address and telephone number set forth on the back cover of this Offer to Purchase.
The Information Agent for the Offer is:
Innisfree M&A Incorporated
The date of this Offer to Purchase is September
27, 2023.
IMPORTANT
Questions and requests for assistance may be
directed to Innisfree M&A Incorporated, the information agent for the Offer (the “Information Agent”), at the telephone
number and address set forth on the back cover of this Offer to Purchase. You may request additional copies of the. Offer materials from
the Information Agent at its telephone number and address set forth on the back cover of this Offer to Purchase. Stockholders also may
contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer.
If you want to tender all or some of your shares,
you must do one of the following before the Offer expires:
| · | if your shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, contact such nominee
and have such nominee tender your shares for you; |
| · | if you are an institution participating in The Depository Trust Company, referred to as “Book-Entry Transfer Facility”
in this Offer to Purchase, tender your shares according to the procedure for book-entry transfer described in Section 3 of this Offer
to Purchase; or |
| · | if you hold certificates or book entry shares in your own name, complete and sign a Letter of Transmittal according to its instructions
and deliver it, together with any required signature guarantees, the certificates for your shares and any other documents required by
the Letter of Transmittal, to the Depositary, at its address shown on the Letter of Transmittal. |
Beneficial owners should be aware that their
broker, dealer, commercial bank, trust company or other nominee may establish its own earlier deadline for participation in the Offer.
Accordingly, beneficial owners wishing to participate in the Offer should contact their broker, dealer, commercial bank, trust company
or other nominee as soon as possible in order to determine the times by which such owner must take action in order to participate in the
Offer.
To tender shares properly, other than shares
registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you must properly complete and duly execute
the Letter of Transmittal or an agent’s message, and any other documents required by the Letter of Transmittal.
This Offer does not constitute an offer to
purchase shares in any jurisdiction in which, or from any person from whom, it is unlawful to make the Offer under applicable securities
or blue sky laws. Subject to
applicable law, delivery of this Offer to Purchase shall not under any circumstances create any implication that the information contained
in or incorporated by reference in this Offer to Purchase is correct as of any time after the date of this Offer to Purchase or that there
has been no change in the information included or incorporated by reference herein or in our affairs since the date hereof.
We have not authorized any person to make
any recommendation on our behalf as to whether you should tender or refrain from tendering your shares in the Offer. We have not authorized
any person to give any information or to make any representations in connection with the Offer other than those contained or incorporated
by reference in this document or in the related Letter of Transmittal. If anyone makes any recommendation or representation to you or
gives you any information, you must not rely on that recommendation, representation or information as having been authorized by us, the
Information Agent, the Depositary or any of our or their respective affiliates.
TABLE OF CONTENTS
Page
SUMMARY OF THE TENDER
OFFER
We are providing this summary of the Offer
for your convenience. It highlights certain material information in this Offer to Purchase, but you should realize that it does not describe
all of the details of the Offer to the same extent described elsewhere in this Offer to Purchase. We urge you to read carefully the entire
Offer to Purchase and the other Offer materials because they contain the full details of the Offer. We have included references to the
sections of this Offer to Purchase where you will find a more complete discussion.
Who is offering to purchase my shares?
The offer to purchase your shares is being made
by: Bellevue Capital Partners, LLC, a Delaware limited liability company. Bellevue is an entity that controls New York City Advisors,
LLC (the “Advisor”). The Advisor manages the Company’s day-to-day business with the assistance of the Company’s
property manager, New York City Properties, LLC (the “Property Manager”). The Advisor and Property Manager are under common
control with AR Global Investments, LLC (“AR Global”) and these related parties receive compensation and fees for providing
services to the Company. The Company also reimburses these entities for certain expenses they incur in providing these services. See Section
1.
Bellevue currently beneficially owns 857,354
shares of common stock in the Company, or approximately 36.8% of the Company’s outstanding shares as of August 8, 2023. If Bellevue
acquires the full 350,000 shares in the Offer, it will beneficially own 51.9% of the Company’s outstanding shares.
What are the classes and amounts of securities
sought in the Offer?
We are seeking to purchase up to 350,000 shares
of common stock of the Company, or a lower amount depending on the number of shares of common stock properly tendered and not properly
withdrawn pursuant to the Offer.
What will be the Purchase Price for the shares?
We are offering to pay $10.25 per share. If
you tender your shares to us in the Offer, you will not have to pay brokerage fees or similar expenses.
What will be the form of payment of the Purchase
Price?
If your shares are purchased in the Offer, you
will be paid the Purchase Price in cash, less any applicable withholding taxes and without interest, for each of your shares that we purchase
pursuant to the Offer. On the terms and subject to the conditions of the Offer (including the proration provisions), promptly following
the Expiration Date, we will pay the Purchase Price less any applicable withholding taxes and without interest,
for each of your shares that we purchase pursuant to the Offer. See Section 5.
How will you pay for the shares?
Assuming an aggregate of 350,000 shares are
purchased in the Offer, the aggregate purchase price would be $3,587,500. We intend to pay for the shares and all fees and expenses applicable
to the Offer with our available cash. We have sufficient cash on hand to fund the aggregate purchase price of the Offer, including all
fees and expenses.
How long do I have to tender my shares?
You may tender your shares until the Expiration
Date. The Expiration Date is at 11:59 p.m., New York City time, on October 26, 2023, unless we extend or terminate the Offer. We may choose
to extend the Offer for any reason. We cannot assure you that the Offer will be extended or, if extended, for how long. See Section 1
and Section 14. If a broker, dealer, commercial bank, trust company or other nominee holds your shares, it is likely that, for administrative
reasons, such nominee has an earlier deadline that must be met for your shares to be tendered by
the Expiration Date. Accordingly, beneficial owners wishing to participate
in the Offer should contact their broker, dealer, commercial bank, trust company or other nominee as soon as possible in order to determine
the times by which such owner must take action in order to participate in the Offer.
Can the Offer be extended, amended or terminated,
and under what circumstances?
We can extend or amend the Offer in our sole
discretion, subject to applicable laws. If we extend the Offer, we will delay the acceptance of any shares that have been tendered. We
can terminate the Offer under certain circumstances. See Section 6 and Section 14.
How will I be notified if the Company extends
the Offer or amends the terms of the Offer?
We will issue a press release no later than
9:00 a.m., New York City time, on the business day after the previously scheduled Expiration Date if we decide to extend the Offer. We
will announce any amendment to the Offer by making a public announcement of the amendment. In the event that the terms of the Offer are
amended, we will file with the SEC an amendment to our Tender Offer Statement on Schedule TO-T relating to the Offer describing the amendment
and disseminate additional Offer materials as determined in accordance with applicable law. See Section 14.
What is the purpose of the Offer?
We are making this Offer because we believe
the Company’s shares represents an attractive investment. This structure allows us to purchase a fixed number of shares for one
price per share. If completed, the Offer will provide stockholders with an opportunity to obtain liquidity with respect to all or a portion
of their shares, without potential disruption to the share price and the usual transaction costs inherent in open market purchases and
sales.
Mr. Nicholas S. Schorsch is the sole managing
member of Bellevue. Bellevue is an entity that controls the Advisor. Bellevue is the sole member of AR Global, which is the sole member
of American Realty Capital III, LLC (“ARC III”). ARC III is the sole member of New York City Special Limited Partnership,
LLC, which is the sole member of the Advisor. The Advisor manages the Company’s day-to-day business with the assistance of the Company’s
Property Manager. The Advisor and Property Manager are under common control with AR Global and these related parties receive compensation
and fees for providing services to the Company.
In connection with the company’s Rights
Offering (as defined below) which expired on February 22, 2023, the Company’s board of directors waived the limits contained in
the Company’s Rights Plan (as defined below). In addition, the Company’s board of directors waived the existing limit imposed
on purchases by Bellevue and its affiliates including future issuances of common stock issued in lieu of the Company paying cash to the
Advisor for asset management services. Bellevue, the Advisor and other affiliates or persons related to Bellevue have granted an irrevocable
proxy to the Company pursuant to which the Company has the right to vote any shares owned by these persons or entities in excess of 34.9%
of the Company’s outstanding shares of common stock in the same proportion as all other shares voted by the Company’s stockholders.
Are there any conditions to the Offer?
Yes. Our obligation to accept and pay for your
tendered shares depends on a number of conditions that must be satisfied in our reasonable judgment or waived on or prior to the Expiration
Date, including:
| · | No legal action shall have been threatened, instituted or pending that challenges or relates to the Offer
or that, in our reasonable judgment, could materially and adversely affect the Company’s business, condition (financial or otherwise),
assets, income, operations or prospects or otherwise materially impair the contemplated future conduct of the Company’s business
or our ability to purchase shares in the Offer; |
| · | No general suspension of trading in, or limitation on prices for, securities on any |
national securities exchange or in the over-the-counter
markets in the United States or the declaration of a banking moratorium or any suspension of payment in respect of banks in the United
States shall have occurred;
| · | No commencement or escalation of war, armed hostilities, or other international or national calamity, including,
but not limited to, any outbreak of a pandemic or contagious disease (including the COVID-19 pandemic to the extent that there is any
material adverse development related thereto on or after September 26, 2023 that in our reasonable judgment makes it inadvisable for us
to proceed with the Offer) or an act of terrorism, directly or indirectly involving the United States shall have occurred on or after
September 26, 2023, the last trading day prior to the commencement of the Offer; |
| · | No changes in the general political, market, economic or financial conditions in the United States or abroad
that, in our reasonable judgment, could materially and adversely affect the Company’s business, condition (financial or otherwise),
assets, income, operations or prospects; |
| · | No decline shall have occurred in the market price for the Company’s shares or in the Dow Jones Industrial
Average, New York Stock Exchange Index, Nasdaq Composite Index or the Standard and Poor’s 500 Composite Index by more than 10% from
the close of trading on September 26, 2023, as measured based solely on the last reported closing price for any particular trading day; |
| · | No limitation, whether or not mandatory, by any governmental, regulatory or administrative agency or authority
on, or event that could reasonably be expected to materially affect, the extension of credit by banks or other lending institutions in
the United States shall have occurred; |
| · | No tender or exchange offer for any or all of the Company’s shares, or any merger, acquisition, business
combination or other similar transaction with or involving the Company or any of its subsidiaries, shall have been proposed, announced
or made by any person or shall have been publicly disclosed since September 26, 2023, and the Company shall not have entered into a definitive
agreement or an agreement in principle with any person with respect to a merger, acquisition, business combination or other similar transaction,
other than in the ordinary course of business (in each case other than the Offer) since September 26, 2023; |
| · | No change in law or in the official interpretation or administration of law, or relevant position or policy
of a governmental authority with respect to any laws, applicable to the Offer; |
| · | The consummation of the Offer and the purchase of shares will not cause the shares to cease to be listed
on the NYSE or cause the shares to be subject to deregistration under the Exchange Act; |
| · | No person (including a group) shall have acquired, or proposed to acquire, beneficial ownership of more
than 5% of the outstanding shares (other than as publicly disclosed in a filing with the SEC on or before September 26, 2023) nor shall
any new group have been formed that beneficially owns more than 5% of the outstanding shares; |
| · | No person (including a group) that has publicly disclosed in a filing with the SEC on or before September
26, 2023 that it has beneficial ownership of more than 5% |
of the outstanding shares shall have acquired,
or publicly announced its proposal to acquire, beneficial ownership of an additional 1% or more of the outstanding shares; and
| · | No person shall have filed a Notification and Report Form under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, or made a public announcement reflecting an intent to acquire the Company or any of its subsidiaries or any of
the Company’s assets or securities. |
These conditions are described in greater detail
in Section 6.
How do I tender my shares?
To tender your shares, prior to 11:59 p.m.,
New York City time, on October 26, 2023, or any later time and date to which the Offer may be extended:
| · | if your shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, contact such nominee
and have such nominee tender your shares for you; |
| · | if you are an institution participating in The Depository Trust Company, referred to as “DTC” or the “Book-Entry
Transfer Facility,” tender your shares according to the procedure for book-entry transfer described in Section 3; or |
| · | if you hold certificates or book entry shares in your own name, complete and sign a Letter of Transmittal according to its instructions
and deliver it, together with any required signature guarantees, the certificates for your shares and any other documents required by
the Letter of Transmittal, to the Depositary at its address shown on the Letter of Transmittal. |
Beneficial owners should be aware that their
broker, dealer, commercial bank, trust company or other nominee may establish its own earlier deadline for participation in the Offer.
Accordingly, beneficial owners wishing to participate in the Offer should contact their broker, dealer, commercial bank, trust company
or other nominee as soon as possible in order to determine the times by which such owner must take action in order to participate in the
Offer.
How will the Offer affect the number of record
holders?
If any of the Company’s stockholders who
hold shares in their own name as holders of record or who are “registered holders” as participants in DTC’s system whose
names appear on a security position listing, tender their shares in full and that tender is accepted in full, then the number of the Company’s
record holders would be reduced. See Section 2.
Can I change my mind after I have tendered
shares in the Offer, but before the Expiration Date?
Yes. You may withdraw any shares you have tendered
at any time before the Expiration Date, which will occur at 11:59 p.m., New York City time, on October 26, 2023, unless we extend or terminate
the Offer.
If you hold interests in shares through a broker,
you must follow the broker’s procedures described in instructions that you will receive, which may include an earlier deadline for
notifying the broker of your desire to withdraw your shares.
How do I withdraw shares I previously tendered?
You must deliver on a timely basis a written
notice of your withdrawal to the Depositary at the address appearing on the back cover of this Offer to Purchase. Your notice of withdrawal
must specify your name, the number of shares to be withdrawn and the name of the registered holder of such shares. Additional requirements
will
apply if the certificates for shares to be withdrawn have been delivered
to the Depositary or if your shares have been tendered under the procedure for book-entry transfer set forth in Section 3. See Section
4.
Has the Company or its board of directors
adopted a position on the Offer?
None of the Company, the Company’s board
of directors, the Information Agent, the Depositary or any of their respective affiliates has made any recommendation to you as to whether
you should tender or refrain from tendering your shares.
We cannot predict how the Company’s common
stock will trade after expiration of the Offer, and it is possible that the Company’s common stock price will trade above the Purchase
Price after expiration of the Offer. You must make your own decision as to whether to tender your shares and, if so, how many shares to
tender. In doing so, you should read carefully all of the information in, or incorporated by reference in, this Offer to Purchase, in
the related Letter of Transmittal and in the other Offer materials. You are urged to discuss these matters with your own tax advisor,
financial advisor and/or broker.
When and how will Bellevue pay for the shares
I tender?
Promptly after the Expiration Date, we will
pay the Purchase Price, less any applicable withholding taxes and without interest, for the shares we purchase. We will announce the preliminary
results of the Offer, including preliminary information about any expected proration, on the business day following the Expiration Date.
We expect that we will announce the final proration factor and pay the Purchase Price for any shares purchased pursuant to the Offer promptly
after the Expiration Date, after we have determined the number of shares properly tendered and not properly withdrawn. We will pay for
the shares accepted for purchase by depositing the aggregate Purchase Price with the Depositary promptly after the Expiration Date. The
Depositary will transmit to you the payment for all of your shares accepted for payment. See Section 5.
What is a recent market price for the shares?
On September 26, 2023, the last trading day
prior to the commencement by the Company of the Offer, the closing price of the shares on the NYSE was $6.22 per share, which is below
the $10.25 per share Purchase Price for the Offer. You are urged to obtain current market quotations for the shares before deciding whether
to tender your shares. See Section 8.
Will I have to pay brokerage fees and commissions
if I tender my shares?
If you are a holder of record of your shares
and you tender your shares directly to the Depositary, you will not incur any brokerage fees or commissions. If you hold your shares through
a broker, dealer, commercial bank, trust company or other nominee and such nominee tenders shares on your behalf, such nominee may
charge you a fee for doing so. We urge you to consult your broker or other nominee to determine whether any charges will apply. See Sections
5 and 15.
What are the U.S. federal income tax consequences
if I tender my shares?
The receipt of cash for your tendered shares
generally will be treated for U.S. federal income tax purposes as consideration received in a sale or exchange of the tendered shares.
If you are a U.S. Holder (as defined in Section 13), generally, you will be subject to U.S. federal income taxation upon the receipt of
cash in exchange for the shares that you tender. See Section 13 for additional information.
If you are a Non-U.S. Holder (as defined in
Section 13), if the receipt of cash by you received in the sale or exchange is not effectively connected with your conduct of a trade
or business in the United States, you generally will not be subject to U.S. federal income taxation on the receipt of such cash, subject
to certain exceptions. See Section 13.
We recommend that you consult your own tax
advisor regarding the particular tax consequences to you of tendering shares for cash pursuant to the Offer, including the applicability
and effect of any U.S. state or local tax laws or other non-U.S. tax laws. See Section 13.
Will I have to pay stock transfer tax if
I tender my shares?
Except as otherwise provided herein and in the
Letter of Transmittal, if you instruct the Depositary in the Letter of Transmittal to make the payment for the tendered shares to the
registered holder, you will generally not be required to pay any stock transfer taxes on our purchase of the shares pursuant to the Offer.
See Section 5.
To whom can I talk if I have questions?
The Information Agent can help answer your questions.
The Information Agent for the Offer is Innisfree M&A Incorporated Please call 877-750-0537, Monday through
Friday, from 10:00 a.m. to 4:00 p.m., New York City time.
Innisfree M&A Incorporated
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, NY 10022
Banks and Brokers Call: 212-750-5833
All Others Call Toll Free: 877-750-0537
CAUTIONARY STATEMENT
CONCERNING FORWARD-LOOKING STATEMENTS
This Offer to Purchase and the documents incorporated
by reference into this Offer to Purchase contain certain forward-looking statements. These statements generally are identified by the
use of words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “estimates,”
“expects,” “plans,” “intends,” “should,” or similar expressions. Forward-looking statements
speak only as of the date they are made and, as a result. are subject to risks and uncertainties. Many factors could cause actual future
events to differ materially from the forward-looking statements in this Offer to Purchase or the other Offer documents delivered to you
or filed by us. You should carefully consider these and other uncertainties described in the Offer to Purchase and the other Offer documents
that have been or will be delivered to you or filed by us with the SEC. You are cautioned not to place undue reliance on any such forward-looking
statements. We do not give any assurance that we will achieve our expectations. The inclusion of any statement in the Offer to Purchase
or any other Offer documents delivered to you or filed by us does not constitute an admission by us or any other person that the events
or circumstances described in such statement are material.
You should read this Offer to Purchase and the
documents that we reference in this Offer to Purchase and have filed as exhibits to the Tender Offer Statement on Schedule TO filed with
the SEC, of which this Offer to Purchase is a part, completely and with the understanding that actual future results may be materially
different from what we expect. We qualify all of our forward-looking statements by each of these cautionary statements.
INTRODUCTION
To the Holders of shares of common stock
of the Company:
We invite the stockholders of the Company to
tender their shares of the common stock of the Company. Upon the terms and subject to the conditions of this Offer to Purchase and the
related Letter of Transmittal, Bellevue is offering to purchase up to 350,000 shares of common stock in the aggregate, at a Purchase Price
of $10.25 per share, less any applicable withholding taxes and without interest.
The Offer will expire at 11:59 p.m., New York
City time, on October 26, 2023 (such date and time, as the same may be extended, the “Expiration Date”), unless extended or
terminated. We may, in our sole discretion, extend the period of time in which the Offer will remain open. We may also terminate the Offer
under certain circumstances. See Section 6 and Section 14. Upon the terms and subject to the conditions of this Offer to Purchase, including
the provisions relating to proration described in this Offer to Purchase, we have determined a single Purchase Price that we will pay
for shares properly tendered and not properly withdrawn from the Offer.
Upon the terms and subject to the conditions
of this Offer to Purchase, including the provisions relating to proration provisions described in this Offer to Purchase, we will purchase
all shares properly tendered at the Purchase Price and not properly withdrawn. Shares not purchased in the Offer will be returned to the
tendering stockholders at our expense promptly after the expiration of the Offer. See Section 1.
If completed, the Offer will provide stockholders
with an opportunity to obtain liquidity with respect to all or a portion of their shares, without potential disruption to the share price
and the usual transaction costs inherent in open market purchases and sales.
None of Bellevue, the Information Agent,
the Depositary or any of our or their affiliates made, any recommendation to you as to whether you should tender or refrain from tendering
your shares. You must make your own decision as to whether to tender your shares and, if so, how many shares to tender. In so doing, you
should read carefully all of the information in, or incorporated by reference in, this Offer to Purchase, the related Letter of Transmittal
and the other Offer materials, including our reasons for making the Offer. See Section 2. You are urged to discuss these matters with
your own tax advisor, financial advisor and/or broker.
We expressly reserve the right, in our sole
discretion, to change the Purchase Price and to increase or decrease the number of shares sought in the Offer, subject to applicable legal
and regulatory requirements. See Section 14.
If the conditions to the Offer have been satisfied
or waived and up to 350,000 shares have been properly tendered at a Purchase Price of $10.25 per share and not properly withdrawn prior
to the Expiration Date, we will buy all shares properly tendered at the Purchase Price and not properly withdrawn.
If the conditions to the Offer have been satisfied
or waived and more than 350,000 shares have been properly tendered at a Purchase Price of $10.25 and not properly withdrawn prior to the
Expiration Date, we will buy shares on a pro rata basis, with appropriate adjustment to avoid purchases of fractional shares, from all
stockholders who properly tender shares at the Purchase Price.
Therefore, it is possible that we will not purchase
all of the shares tendered pursuant to the Offer. See Sections 1 and 5, respectively, for additional information concerning priority and
proration procedures.
We will pay the Purchase Price, less any applicable
withholding taxes and without interest, for all shares purchased. Tendering stockholders who hold shares registered in their own name
and who tender their shares directly to the Depositary will not be obligated to pay brokerage commissions, solicitation fees or, except
as otherwise provided in Section 5 and the Letter of Transmittal, stock transfer taxes on our purchase of
shares pursuant to the Offer. Stockholders holding shares through brokers, dealers, commercial banks, trust companies or other nominees
are urged to consult such nominees to determine whether transaction costs apply. Also, any
tendering stockholder or other payee who fails to complete, sign
and deliver the Internal Revenue Service (“IRS”) Form W-9 included with the Letter of Transmittal (or such other IRS form
as may be applicable) may be subject to U.S. federal backup withholding on the gross proceeds paid to the payee pursuant to the Offer,
unless such payee establishes that such payee is within the class of persons that is exempt from backup withholding. See Section 3. Also
see Section 13 for a discussion of certain U.S. federal income tax consequences of the Offer.
As of August 8, 2023, the Company
had 2,326,993 shares of common stock issued and outstanding. The shares are listed and traded on the NYSE. On September 26, 2023,
the last trading day prior to the commencement by the Company of the Offer, the last reported sale price of the shares on the NYSE was
$6.22 per share. Stockholders are urged to obtain current market quotations for the shares before deciding whether to tender their shares.
See Section 8.
THE TENDER OFFER
| 1. | Number of Shares; Price; Proration |
General. Upon the terms and subject to
the conditions of the Offer, we hereby offer to purchase for cash up to 350,000 shares of the Company’s common stock properly tendered
and not properly withdrawn in accordance with Section 4 before the Expiration Date of the Offer, at a Purchase Price of $10.25 per share,
less any applicable withholding taxes and without interest. See Section 14 for a description of our right to extend, delay, terminate
or amend the Offer. We also expressly reserve the right, in our sole discretion, to change the Purchase Price and to increase or decrease
the number of shares sought in the Offer, subject to applicable legal and regulatory requirements.
If the conditions to the Offer have been satisfied
or waived and up to 350,000 shares having an aggregate purchase price of approximately $3,587,500 are properly tendered and not properly
withdrawn prior to the Expiration Date, we will buy all shares properly tendered at the Purchase Price and not properly withdrawn. If
the Offer is oversubscribed as described below, shares tendered will be subject to proration. The proration period and withdrawal rights
expire on the Expiration Date.
For purposes of the Offer, a “business
day” means any day other than a Saturday, Sunday or U.S. federal holiday and consists of the time period from 12:01 a.m. through
12:00 midnight, New York City time.
All shares tendered and not purchased pursuant
to the Offer, including shares not purchased because they were tendered at a price greater than the Purchase Price or because of the proration
provision, will be returned to the tendering stockholders or, in the case of shares delivered by book- entry transfer, credited to the
account at the Book-Entry Transfer Facility from which the transfer had previously been made, at our expense promptly following the Expiration
Date.
Priority of Purchases. Upon the terms
and subject to the conditions of the Offer, we will purchase at the Purchase Price properly tendered shares not properly withdrawn on
a pro rata basis, with appropriate adjustments to avoid purchases of fractional shares. Therefore, it is possible that we will not purchase
any or all of the shares that a holder tenders in the Offer.
Proration. If proration of tendered shares
is required, we will determine the proration factor promptly following the Expiration Date. Proration for each stockholder tendering shares
will be based on the ratio of the number of shares properly tendered at the Purchase Price and not properly withdrawn by such stockholder
to the total number of shares properly tendered at the Purchase Price and not properly withdrawn by all stockholders. The preliminary
results of any proration will be announced by press release promptly after the Expiration Date. We expect that we will announce the final
proration factor and pay the Purchase Price for any shares purchased pursuant to the Offer promptly after the Expiration Date, after we
have determined the number of shares properly tendered and not properly withdrawn. Stockholders may obtain preliminary proration information
from the Information Agent and may be able to obtain such information from their brokers.
This Offer to Purchase and the related Letter
of Transmittal will be mailed to record holders of shares and will be furnished to brokers, dealers, commercial banks, trust companies
and other nominees whose names, or the names of whose nominees, appear on the Company’s stockholder list or, if applicable, who
are listed as participants in a clearing agency’s security position listing for subsequent transmittal to beneficial owners of shares.
| 2. | Purpose of the Offer; Certain Effects of the Offer |
Purpose of the Offer. We are making this
Offer because we believe the Company’s shares represent an attractive investment. This structure allows us to purchase a fixed number
of shares for one price per share. If completed, the Offer will provide stockholders with an opportunity to obtain liquidity with respect
to all or a portion of their shares, without potential disruption to the share price and the usual transaction costs inherent in open
market purchases and sales.
None of Bellevue, the Information Agent, the
Depositary or any of our or their respective affiliates makes any recommendation as to whether you should tender or not tender your shares.
You must make your own decision as to whether to tender your shares and, if so, how many shares to tender. We recommend you consult your
own financial and tax advisors, and carefully read and evaluate the information in this Offer to Purchase and in the related Letter of
Transmittal, before taking any action with respect to the Offer.
Certain Effects of the Offer. As of August
8, 2023, we had 2,326,993 shares of common stock outstanding. Assuming that the conditions to the Offer are satisfied or waived and the
Offer is fully subscribed, we would purchase 350,000 shares at a Purchase Price per share of $10.25, representing approximately 15.0%
of the Company’s outstanding shares (based on the number of shares outstanding as of August 8, 2023, according to the Company’s
Quarterly Report on Form 10-Q for the quarter ended June 30, 2023). Stockholders may be able to sell non-tendered shares in the future
on the NYSE or otherwise, at a net price higher than the Purchase Price. We can give no assurance as to the price at which a stockholder
may be able to sell such shares in the future.
The Offer will reduce the Company’s “public
float,” which is the number of shares owned by non-affiliate stockholders and available for trading in the securities markets, and
is likely to reduce the number of the Company’s stockholders. These reductions may reduce the volume of trading in the Company’s
shares and may result in lower stock prices and reduced liquidity in the trading of the Company’s shares following completion of
the Offer. In addition, the Offer will increase the proportional ownership of the Company’s officers and directors who are not participating
in the Offer and any other stockholders who do not participate or participate only in part in the Offer.
Based on the published guidelines of the NYSE
and the conditions of the Offer, we do not believe that our purchase of shares pursuant to the Offer will result in the delisting from
the NYSE of the remaining shares. The shares are registered under the Exchange Act, which requires, among other things, that the Company
furnish certain information to its stockholders and the SEC and comply with the SEC’s proxy rules in connection with meetings of
the Company’s stockholders. We have reasonably determined that the consummation of the Offer will not cause the Company’s
shares to be delisted from the NYSE or eligible for deregistration under the Exchange Act.
Except as otherwise disclosed or incorporated
by reference in this Offer to Purchase, neither the Company nor Bellevue currently have any plans, proposals or negotiations underway
that relate to or would result in:
| · | any extraordinary transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries; |
| · | any purchase, sale or transfer of a material amount of the Company’s or any of its subsidiaries’ assets; |
| · | any material change in the Company’s present dividend rate or policy, or its indebtedness or capitalization; |
| · | any change in the Company’s present board of directors or management, including but not limited to, any plans or proposals to
change the number or the term of directors or to fill any existing vacancies on the Company’s board of directors or to change any
material term of the employment contract of any executive officer; |
| · | any other material change in the Company’s corporate structure or business; |
| · | any class of the Company’s equity securities ceasing to be authorized to be quoted on the NYSE; |
| · | the termination of registration under Section 12(b) of the Exchange Act of any class of the Company’s equity securities; |
| · | the suspension of the Company’s obligation to file reports under Section 15(d) of the Exchange Act; |
| · | the acquisition or disposition by any person of additional securities of the Company, or the disposition of the Company’s securities,
other than pursuant to the Company’s share repurchase program or |
issuances or grants of, or purchases pursuant to, equity
awards granted to directors, officers and employees (including employees of companies that may be acquired by the Company); or
| · | any changes in the Company’s charter, bylaws or other governing instruments or other actions that could impede the acquisition
of control of the Company. |
While neither we nor the Company has any definitive
plans or proposals regarding any of the foregoing as of the date of this Offer to Purchase (except as in the documents incorporated by
reference herein or as disclosed in this Offer to Purchase, including this Section 2), the Company’s management continually assesses
and reassesses possible acquisitions, divestitures, joint ventures, restructurings, and other extraordinary corporate transactions and
other matters. Notwithstanding the foregoing, the Company reserve the right to change its plans and intentions at any time, as the Company
deems appropriate, subject to its obligation to update this Offer to Purchase to reflect material changes in the information contained
herein. Stockholders tendering shares in the Offer may run the risk of foregoing the benefit of any appreciation in the market price of
the shares resulting from such potential future events.
| 3. | Procedures for Tendering Shares |
Proper Tender of Shares. For shares to
be tendered properly pursuant to the Offer, the certificates for the shares or confirmation of receipt of the shares under the procedure
for book- entry transfer set forth below, together with a properly completed and duly executed Letter of Transmittal, including any required
signature guarantees, or an Agent’s Message (as defined below) in the case of a book-entry transfer, and any other documents required
by the Letter of Transmittal, in each case, must be received by the Depositary at its address set forth on the back cover page of this
document prior to 11:59 p.m., New York City time, on the Expiration Date.
Notwithstanding any other provisions hereof,
payment for shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of
certificates for such shares (or a timely confirmation of a book-entry transfer of such shares into the Depositary’s account at
the Book-Entry Transfer Facility), a properly completed and duly executed Letter of Transmittal (or facsimile thereof) with any required
signature guarantees, or an Agent’s Message in connection with book-entry delivery, and any other documents required by the Letter
of Transmittal.
Stockholders who hold shares through brokers,
dealers, commercial banks, trust companies or other nominees are urged to consult their brokers, dealers, commercial banks, trust companies
or other nominees as it is likely that — for administrative reasons — such nominees have an earlier deadline for you to act
to instruct them to accept the Offer on your behalf so that they can meet the above requirements on a timely basis. In addition, you may
wish to determine whether transaction costs are applicable if you tender shares through a broker, dealer, commercial bank, trust company
or other nominee.
Book-Entry Delivery. The Depositary has
established an account with respect to the shares at The Depository Trust Company (referred to as “DTC” or the “Book-Entry
Transfer Facility”) for purposes of the Offer, and any financial institution that is a participant in the system of the Book-Entry
Transfer Facility may make delivery of shares by causing the Book-Entry Transfer Facility to transfer such shares into the Depositary’s
account in accordance with the procedures of the Book-Entry Transfer Facility. However, although delivery of shares may be effected through
book-entry transfer, a properly completed and duly executed Letter of Transmittal together with any required signature guarantees or an
Agent’s Message and any other required documents must, in any case, be received by the Depositary at one of its addresses set forth
on the back cover of this Offer to Purchase by 11:59 p.m., New York City time, on the Expiration Date. Delivery of the Letter of Transmittal
and any other required documents to the Company, the Information Agent or Book-Entry Transfer Facility does not constitute delivery to
the Depositary.
The term “Agent’s Message”
means a message transmitted by the Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of the book-entry
confirmation, stating that the Book-Entry Transfer Facility has received an express acknowledgment from the participant tendering shares
through the Book-Entry
Transfer Facility that the participant has received and agrees to
be bound by the terms of the Letter of Transmittal and that we may enforce that agreement against that participant.
Method of Delivery. The method of
delivery of all documents, including share certificates, is at the election and risk of the tendering stockholder. If delivery is by mail,
registered mail with return receipt requested, properly insured, is recommended. Shares will be deemed delivered only when actually received
by the Depositary (including in the case of a book-entry transfer, by book-entry confirmation). In all cases, sufficient time should be
allowed to ensure timely delivery.
Signature Guarantees. Except as otherwise
provided below, all signatures on a Letter of Transmittal must be guaranteed by a financial institution (including most banks, savings
and loans associations and brokerage houses) that is a participant in the Securities Transfer Agents Medallion Program (an “Eligible
Institution”). No signature guarantee is required if either: (a) the Letter of Transmittal is signed by the registered holder of
the shares exactly as the name of the registered holder appears on the certificate(s) for the shares tendered with this Letter of Transmittal
or (b) in the case of book-entry shares, on the records of the Depositary, and payment and delivery are to be made directly to such registered
holder and such registered holder has not completed the box entitled “Special Payment Instructions.” If a share certificate
is registered in the name of a person other than the person executing a Letter of Transmittal, or if payment is to be made to a person
other than the registered holder, then the share certificate must be endorsed or accompanied by an appropriate stock power, in either
case signed exactly as the name of the registered holder appears on the certificate, with the signature guaranteed by an Eligible Institution.
U.S. Federal Backup Withholding. To prevent
the potential imposition of U.S. federal backup withholding (currently, at a rate of 24%) on the gross proceeds payable to a tendering
beneficial owner pursuant to the Offer, prior to receiving such payments, each beneficial owner must submit to the Depositary (or other
applicable withholding agent) a correct, properly completed and executed IRS Form W-9 (“Form W-9”) in the case of a U.S. Holder
(as defined in Section 13), or IRS Form W-8BEN or IRS Form W-8BEN-E (“Form W-8BEN”), IRS Form
W-8IMY (“Form W-8IMY”), IRS Form W-8ECI (“Form W-8ECI”), or other applicable IRS Form W-8 in the case of a Non-U.S.
Holder (as defined in Section 13), or otherwise establish an exemption from backup withholding. Backup withholding is not an additional
tax. Any amounts withheld under the backup withholding rules will be allowed as a credit against the beneficial owner’s U.S. federal
income tax liability, if any, and may entitle the beneficial owner to a refund, so long as the required information is timely furnished
to the IRS. Stockholders are urged to consult their own tax advisors regarding the application of backup withholding in their particular
circumstances and the availability of, and procedure for obtaining, an exemption from backup withholding.
Non-U.S. Holders are urged to consult their
own tax advisors regarding the particular tax consequences to them of selling shares pursuant to the Offer.
Tender Constitutes an Agreement. The
tender of shares pursuant to any one of the procedures described above will constitute the tendering stockholder’s acceptance of
the terms and conditions of the Offer and an agreement between the tendering stockholder and us upon the terms and subject to the conditions
of the Offer, which agreement will be governed by, and construed in accordance with the laws of the State of New York. In addition, the
tender of shares pursuant to any one of the procedures described above will constitute the tendering stockholder’s representation
and warranty to us that: (1) the stockholder has a “net long position” in the shares or equivalent securities at least equal
to the shares tendered within the meaning of Rule 14e-4 promulgated by the SEC under the Exchange Act; (2) the tender of shares complies
with Rule 14e-4 under the Exchange Act; (3) the tendered shares are not currently subject to any contractual or other restriction; and
(4) the stockholder has the full power and authority to tender and assign the shares tendered, as specified in the Letter of Transmittal.
It is a violation of Rule 14e-4 under the Exchange
Act for a person, directly or indirectly, to tender shares for his or her own account unless the person so tendering (i) has a net long
position equal to or greater than the number of (x) shares tendered or (y) other securities immediately convertible into, or exercisable
or exchangeable for, the number of shares tendered and will acquire such shares for tender by conversion, exercise or exchange of such
other securities and (ii) will cause such shares to be delivered in accordance with the terms of the Offer. Rule 14e-4 under the Exchange
Act provides a similar restriction applicable to the tender or guarantee of a tender on behalf of another person.
Determination of Validity; Rejection of Shares;
Waiver of Defects; No Obligation to Give Notice of Defects. We will determine all questions as to the Purchase Price, the form of
documents and the validity, eligibility (including time of receipt) and acceptance for payment of any tender of shares. We reserve the
right to reject any or all tenders of shares determined by us not to be in proper form, or the acceptance of which or payment for which
may, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defect or irregularity in any tender of particular
shares (without waiving such defect or irregularity with respect to any other shares). No tender of shares will be deemed to be properly
made until all defects and irregularities have been cured or waived. Unless waived, any defects or irregularities in connection with tenders
must be cured within such time as we shall determine. None of Bellevue, the Information Agent, the Depositary, any of our or their respective
affiliates or any other person is or will be under any duty to give notification of any defect or irregularity in tenders or incur any
liability for failure to give any such notification.
Return of Unpurchased Shares. If any
properly tendered shares are not purchased pursuant to the Offer or are properly withdrawn before the Expiration Date, or if less than
all shares evidenced by a stockholder’s certificates are tendered, certificates for unpurchased shares will be returned promptly
after the expiration or termination of the Offer or the proper withdrawal of the shares, as applicable, or, in the
case of shares properly tendered by book-entry transfer at the Book-Entry Transfer Facility, the shares will be credited to the appropriate
account maintained by the tendering stockholder at the Book-Entry Transfer Facility, in each case without expense to the stockholder.
Lost, Stolen, Destroyed or Mutilated Certificates.
Stockholders whose certificate or certificates for part or all of their shares that have been lost, stolen, destroyed or mutilated may
contact Computershare Trust Company, N.A., as Transfer Agent for the Company’s shares, at toll-free (866) 524-0719. The replacement
certificate will then be required to be submitted together with the Letter of Transmittal in order to receive payment for shares that
are tendered and accepted for payment. A bond may be required to be posted by the stockholder to secure against the risk that the certificate
or certificates may be subsequently recirculated. Stockholders are urged to contact the Transfer Agent immediately in order to permit
timely processing of this documentation and to determine if the posting of a bond is required.
Certificates for shares, together with a
properly completed and duly executed Letter of Transmittal or facsimile thereof, or an Agent’s Message, and any other documents
required by the Letter of Transmittal, must be delivered to the Depositary and not to us, the Company or Information Agent. Any such documents
delivered to us, the Company or Information Agent will not be deemed to be properly tendered.
Tenders of shares made pursuant to the Offer
may be withdrawn at any time prior to the Expiration Date. If we extend the period of time during which the Offer is open, are delayed
in accepting for payment or paying for shares or are unable to accept for payment or pay for shares pursuant to the Offer for any reason,
then, without prejudice to our rights under the Offer, the Depositary may, on our behalf, retain all shares tendered, and such shares
may not be withdrawn except as otherwise provided in this Section 4.
For a withdrawal to be effective, a written
or emailed transmission notice of withdrawal must:
| · | be timely received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase; and |
| · | specify the name of the person who tendered the shares to be withdrawn, the number of shares to be withdrawn and the name of the registered
holder of the shares, if different from that of the person who tendered such shares. |
If the shares to be withdrawn have been delivered
to the Depositary, a signed notice of withdrawal with signatures guaranteed by an Eligible Institution (except in the case of shares tendered
by an Eligible Institution) must be submitted prior to the release of such shares. In addition, such notice must specify, in the case
of shares tendered by delivery of certificates, the name of the registered holder (if different from that of the tendering stockholder)
and the serial numbers shown on the particular certificates evidencing the shares to be withdrawn or, in
the case of shares tendered by book-entry transfer, the name and
number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn shares.
Withdrawals may not be rescinded, and shares
withdrawn will thereafter be deemed not properly tendered for purposes of the Offer. However, withdrawn shares may be retendered by following
one of the procedures described in Section 3 at any time prior to the Expiration Date.
We will determine all questions as to the form
and validity (including time of receipt) of any notice of withdrawal. We also reserve the right to waive any defect or irregularity in
the withdrawal of shares by any stockholder. None of Bellevue, the Information Agent, the Depositary, any of our or their respective affiliates
or any other person will be under any duty to give notification of any defect or irregularity in any notice of withdrawal or incur any
liability for failure to give any such notification.
| 5. | Purchase of Shares and Payment of Purchase Price |
On the terms and subject to the conditions of
the Offer, promptly following the Expiration Date, we will accept for payment and pay an aggregate Purchase Price of up to $3,587,500
(or such greater amount as we may elect to purchase, subject to applicable law) for shares that are properly tendered at prices at the
Purchase Price and not properly withdrawn prior to the Expiration Date. For purposes of the Offer, we will be deemed to have accepted
for payment, subject to the proration provisions of the Offer, shares that are properly tendered at the Purchase Price and not properly
withdrawn, only when, as and if we give oral or written notice to the Depositary of our acceptance of the shares for payment pursuant
to the Offer.
Upon the terms and subject to the conditions
of the Offer, we will accept for payment, and pay the Purchase Price per share for, all of the shares accepted for payment pursuant to
the Offer promptly after the Expiration Date. In all cases, payment for shares tendered and accepted for payment pursuant to the Offer
will be made promptly, taking into account any time necessary to determine any proration, but only after timely receipt by the Depositary
of (1) certificates for shares, or a timely book-entry confirmation of the deposit of shares into the Depositary’s account at DTC,
(2) a validly completed and duly executed Letter of Transmittal including any required signature guarantees, or, in the case of a book-
entry transfer, an Agent’s Message, and (3) any other required documents.
For purposes of the Offer, we will be deemed
to have accepted for payment and therefore purchased shares that are properly tendered at the Purchase Price and not properly withdrawn,
subject to the proration provisions of the Offer, only when, as and if we give oral or written notice to the Depositary of our acceptance
of the shares for payment pursuant to the Offer.
We will pay for shares purchased under the Offer
by depositing the aggregate purchase price for such shares with the Depositary, which will act as agent for the purpose of receiving payment
from us and transmitting payment to the tendering stockholders. See the Letter of Transmittal. Under no circumstances will interest
on the Purchase Price be paid by us regardless of any delay in making such payment.
In the event of proration, we will determine
the proration factor and pay for those tendered shares accepted for payment promptly after the Expiration Date. The preliminary results
of any proration will be announced by press release promptly after the Expiration Date. Certificates for all shares tendered and not purchased,
including all shares not purchased due to proration, will be returned to the tendering stockholder, or, in the case of shares tendered
by book-entry transfer, will be credited to the account maintained with the Book-Entry Transfer Facility by the participant therein who
so delivered the shares, at our expense, promptly after the Expiration Date or termination of the Offer. In addition, if certain events
occur, we may not be obligated to purchase shares under the Offer. See Section 6.
Except as otherwise provided in this Section
5 and the Letter of Transmittal, we will pay all stock transfer taxes, if any, payable on the transfer to us of shares purchased pursuant
to the Offer. If, however, payment of proceeds in respect of any shares purchased is to be made to, or shares not tendered or not purchased
are to be returned in the name of, any person other than the registered holder(s), or if tendered shares are registered in the name of
any person other than the person(s) signing the Letter of Transmittal, the amount of all stock transfer taxes,
if any (whether imposed on the registered holder(s), such other
person or otherwise), payable on account of the transfer to such other person will be the responsibility of the stockholder and satisfactory
evidence of the payment of the stock transfer taxes, or exemption therefrom, may be required prior to such payment. See the Letter of
Transmittal.
Any tendering stockholder or other payee
who fails to properly complete, execute and deliver a Form W-9 (included with the Letter of Transmittal) or an applicable Form W-8 may
be subject to U.S. federal backup withholding on the gross proceeds paid pursuant to the Offer. See Section 3 and Section 13.
| 6. | Conditions of the Offer |
Notwithstanding any other provision of the Offer,
we will not be required to accept for payment or pay for any shares tendered, and may terminate or amend the Offer or may postpone the
acceptance for payment of, and the payment for, shares tendered, subject to the requirements of the Exchange Act for prompt payment for
or return of shares, if at any time on or after the date of this Offer to Purchase and before the Expiration Date any of the following
events shall have occurred or are reasonably determined by us or the Company to have occurred, that, in our reasonable judgment and regardless
of the circumstances giving rise to such event (other than any action or omission to act by us or our affiliates), makes it inadvisable
to proceed with the Offer or with acceptance for payment or payment:
| · | there shall have been threatened, instituted or pending any action or proceeding by any government or governmental, regulatory or
administrative agency, authority or tribunal or any other person, domestic or foreign, before any court, authority, agency or tribunal
that directly or indirectly (i) challenges the making of the Offer or the acquisition of some or all of the shares pursuant to the Offer
or otherwise relates in any manner to the Offer or (ii) in our reasonable judgment, could materially and adversely affect the Company’s
and its subsidiaries’ business, condition (financial or otherwise), assets, income, operations or prospects, taken as a whole, or
otherwise materially impairs in any way the contemplated future conduct of the business of us and our subsidiaries, taken as a whole,
or materially impairs our ability to purchase the shares in the Offer; |
| · | there shall have been any action threatened, pending or taken, or approval withheld, or any statute, rule, regulation, judgment, order
or injunction threatened, proposed, sought, promulgated, enacted, entered, amended, enforced or deemed to be applicable to the Offer or
us or any of our subsidiaries, by any court or any authority, agency or tribunal that, in our reasonable judgment, would or is reasonably
likely to directly or indirectly (i) make the acceptance for payment of, or payment for, some or all of the shares illegal or otherwise
restricts or prohibits completion of the Offer, (ii) delay or restrict our ability, or render us unable, to accept for payment or pay
for some or all of the shares or (iii) materially and adversely affect e Company’s and its subsidiaries’ business, condition
(financial or otherwise), assets, income, operations or prospects, taken as a whole, or otherwise materially impair in any way the contemplated
future conduct of the business of the Company and its subsidiaries; |
| · | there shall have occurred (i) any general suspension of trading in, or limitation on prices for, securities on any national securities
exchange or in the over-the-counter market in the United States, (ii) the declaration of a banking moratorium or any suspension of payments
in respect of banks in the United States, (iii) on or after September 26, 2023, the last trading day prior to the commencement of the
Offer, the commencement or escalation of a war, armed hostilities or other international or national calamity directly or indirectly involving
the United States or any of its territories, including, but not limited to, any outbreak of a pandemic or contagious disease (including
the COVID-19 pandemic, to the extent that there is any material adverse development related thereto on or after September 26, 2023 which
in our reasonable judgment makes it inadvisable for us to proceed with the Offer) or an act of terrorism, (iv) any change in the general
political, market, economic or financial conditions in the United States or abroad that could, in our reasonable judgment, have a material
adverse effect on the Company and its subsidiaries’ business, condition (financial or otherwise), assets, income, operations or
prospects, taken as a whole, or (v) in the case of any of the foregoing existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof; |
| · | there shall have been a decrease of more than 10% in the market price for the Company’s shares or in the Dow Jones Industrial
Average, the New York Stock Exchange Index, the Nasdaq Composite Index or the Standard and Poor’s 500 Composite Index measured from
the close of trading on September 26, 2023, as measured based solely on the last reported closing price for any particular trading day; |
| · | there shall have occurred any limitation, whether or not mandatory, by any governmental, regulatory or administrative agency or authority
on, or any event that could reasonably be expected to materially affect, the extension of credit by banks or other lending institutions
in the United States; |
| · | a tender or exchange offer for any or all of the shares, or any merger, acquisition, business combination or other similar transaction
with or involving the Company or any of its subsidiaries, has been proposed, announced or made by any person or has been publicly disclosed
or the Company has entered into a definitive agreement or an agreement in principle with any person with respect to a merger, acquisition,
business combination or other similar transaction since September 26, 2023, other than in the ordinary course of business (in each case
other than the Offer); |
| · | there shall not have occurred any change in law or in the official interpretation or administration of law, or relevant position or
policy of a governmental authority with respect to any laws, applicable to the Offer; |
| · | the consummation of the Offer and the purchase of shares will cause the shares to cease to be traded on or listed on the NYSE or otherwise
cause the shares to be deregistered under the Exchange Act; |
| · | a person or “group” (as that term is used in Section 13(d)(3) of the Exchange Act) has acquired or proposes to acquire
beneficial ownership of more than 5% of the outstanding shares, whether through the acquisition of stock, the formation of a group, the
grant of any option or right, or otherwise (other than as and to the extent disclosed in a Schedule 13D or Schedule 13G filed with the
SEC on or before September 26, 2023); |
| · | a person or group who has filed a Schedule 13D or Schedule 13G with the SEC on or before September 26, 2023, has acquired or proposes
to acquire, whether through the acquisition of stock, the formation of a group, the grant of any option or right, or otherwise (other
than solely as a result of the Offer made hereby), beneficial ownership of an additional 1% or more of the outstanding shares; or |
| · | a person or group has filed a Notification and Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
reflecting an intent to acquire the Company or any of its shares, or has made a public announcement reflecting an intent to acquire the
Company or any of its subsidiaries or any of the Company’s or their respective assets or securities. |
If any of the conditions referred to above is
not satisfied, we may:
| · | terminate the Offer and return all tendered shares to the tendering stockholders; |
| · | extend the Offer and, subject to withdrawal rights as set forth in Section 4, retain all of the tendered shares until the expiration
of the Offer as so extended; |
| · | waive the condition and, subject to any requirement to extend the period of time during which the Offer is open, purchase all of the
shares properly tendered and not properly withdrawn prior to the Expiration Date; or |
| · | delay acceptance for payment or payment for shares, subject to applicable law, until satisfaction or waiver of the conditions to the
Offer. |
Each of the conditions referred to above is
for our sole benefit and may be asserted or waived by us, in whole or in part, prior to the Expiration Date. Any determination by us concerning
the satisfaction of the conditions
described above will be final and binding on all parties, except
as finally determined in a subsequent judicial proceeding if our determinations are challenged by stockholders. Our failure at any time
to exercise any of the foregoing rights will not be deemed a waiver of any right, and each such right will
be deemed an ongoing right that may be asserted at any time prior to the Expiration Date; provided that, notwithstanding the foregoing,
in the event that one or more of the events described above occurs, we will promptly notify securityholders of our determination as to
whether we will waive or modify the applicable condition(s) and continue the Offer or terminate the Offer. However, once the Offer has
expired, then all of the conditions to the Offer must have been satisfied or waived. In certain circumstances, if we waive any of the
conditions described above or otherwise elect to proceed with the Offer despite any such conditions not being satisfied, then we may be
required to extend the Offer.
Our right to terminate or amend the Offer or
to postpone the acceptance for payment of, or the purchase of and the payment for, shares tendered if any of the above listed events occur
(or shall have been reasonably determined by us to have occurred) at any time at or prior to the Expiration Date shall not be affected
by any subsequent event, regardless of whether such subsequent event otherwise would have resulted in the event having been “cured”
or ceasing to exist.
| 7. | Price Range of Shares; Dividends |
The Company’s shares are listed and traded
on the NYSE under the trading symbol “NYC” The following table sets forth, for each of the periods indicated, the intra-day
high and low sales prices of the shares as reported on the NYSE.
| | |
Market Price | |
Dividends |
| | |
High | |
Low | |
|
| 2021 | |
| |
| |
|
| First Quarter | |
$ | 10.37 | | |
$ | 7.67 | | |
$ | 0.10 | |
| Second Quarter | |
| 14.80 | | |
| 8.11 | | |
| 0.10 | |
| Third Quarter | |
| 14.25 | | |
| 7.88 | | |
| 0.10 | |
| Fourth Quarter | |
| 11.88 | | |
| 5.79 | | |
| 0.10 | |
| 2022 | |
| | | |
| | | |
| | |
| First Quarter | |
$ | 13.75 | | |
$ | 9.72 | | |
$ | 0.10 | |
| Second Quarter | |
| 13.63 | | |
| 5.00 | | |
| 0.10 | |
| Third Quarter | |
| 5.44 | | |
| 2.73 | | |
| — | |
| Fourth Quarter | |
| 3.74 | | |
| 1.70 | | |
| — | |
| 2023 | |
| | | |
| | | |
| | |
| First Quarter | |
| 15.70 | | |
| 1.58 | | |
| — | |
| Second Quarter | |
| 14.75 | | |
| 6.70 | | |
| — | |
| Third Quarter (through September 26, 2023) | |
$ | 9.48 | | |
$ | 6.20 | | |
$ | — | |
On September 26, 2023, the last trading day
prior to the commencement by the Company of the Offer, the last reported sale price of the shares on the NYSE was $6.22
per share. We urge stockholders to obtain current market quotations for the shares before deciding whether to tender their shares.
Any dividend payment must be approved by the
Company’s board of directors. In determining whether to pay any dividend, the Company’s board of directors may consider the
Company’s earnings, financial condition, capital resources and capital requirements, alternative uses of capital, restrictions imposed
by any existing debt, economic conditions and other factors considered relevant by the Company’s board of directors. As a result
of the Offer, the Company may, among other things, have less flexibility in relation to future dividends and share repurchases.
Through the six months ended June 30, 2022 and
for the year ended December 31, 2021, the Company paid dividends to common stockholders in the amount of $0.10 per share on a quarterly
basis, payable to holders of record on a single quarterly record date. On July 1, 2022, the Company announced that it suspended paying
dividends and has not declared or paid dividends, beginning with the quarter ended June 30, 2022.
| 8. | Source and Amount of Funds |
Assuming the Offer is fully subscribed, we expect
that the aggregate cost of the purchases, including all fees and expenses related to the Offer, will be approximately $3,837,500
million. The Company intends to fund the Offer with cash on hand.
| 9. | Certain Information Concerning the Company |
General Information About the Company.
American Strategic Investment Co. owns a portfolio of high-quality commercial real estate located within the five boroughs of New York
City. The Company’s principal office is located at 650 Fifth Avenue, 30th Floor, New York, New York 10019, and its telephone
number is (212) 415-6500. Its internet address is www.americanstrategicinvestment.com. Unless expressly stated otherwise, the
information contained on the Company’s website or connected to the Company’s website is not incorporated by reference into
this Offer to Purchase and should not be considered part of this Offer to Purchase.
Additional Information About the
Company. The Company is subject to the information requirements of the Exchange Act, and in accordance therewith files periodic
reports, proxy statements and other information relating to its business, financial condition and other matters. The Company is
required to disclose in such proxy statements certain information, as of particular dates, concerning its directors and executive
officers, their compensation, the principal holders of its securities and any material interest of such persons in transactions with
the Company. Such material and other information may be viewed on the SEC’s website, www.sec.gov.
| 10. | Certain Information Concerning Us |
General Information
About Us. Bellevue Capital Partners, LLC is a Delaware limited liability company that controls the Advisor. The Advisor manages
the Company’s day-to-day business with the assistance of the Property Manager. The Advisor and Property Manager are under common
control with AR Global and these related parties receive compensation and fees for providing services to the Company. The Company also
reimburses these entities for certain expenses they incur in providing these services. See Sections 1 and 11. Our business address is
222 Bellevue Avenue, Newport, RI 02840 and our telephone number is (212) 415-6500.
| 11. | Interest of Directors and Executive Officers; Transactions
and Arrangements Concerning the Shares |
As of August 8, 2023, the Company had 2,326,993
shares of common stock outstanding. Bellevue and its affiliates currently beneficially own 857,354 shares of common stock in the Company,
or approximately 36.8% of the Company’s outstanding shares as of August 8, 2023. If Bellevue acquires the full 350,000 shares in
the Offer, it will beneficially own 51.9% of the Company’s outstanding shares.
Bellevue Capital Partners, LLC is a Delaware
limited liability company that controls the Advisor. The Advisor manages the Company’s day-to-day business with the assistance of
the Property Manager. The Advisor and Property Manager are under common control with AR Global and these related parties receive compensation
and fees for providing services to the Company. The Company also reimburses these entities for certain expenses they incur in providing
these services.
Michael R. Anderson, the Company’s chief
executive officer, also has served as the general counsel of AR Global and Bellevue since 2020. Joseph Marnikovic, the Company’s
chief financial officer, also has served as the chief financial officer of AR Global and Bellevue since 2019.
Amendment to Rights Agreement
and Waiver Agreement
On February 4, 2022, the Company’s board
of directors granted (i) a waiver from the Aggregate Share Ownership Limit, as defined and contained in Section 5.7 of the Company’s
charter, to permit each of Bellevue, the Advisor, entities controlled by Bellevue, Edward M. Weil. Jr., who is an officer of the Advisor
and a holder of a non-controlling interest in Bellevue, and their respective affiliates and certain other entities and individuals who
would be treated as Beneficially Owning or Constructively Owning (each as defined in the Charter) shares held by either or both of Bellevue
and the Advisor, including Mr. Weil, to Beneficially Own or Constructively Own Shares in an amount up to 20% of the outstanding shares
(subject to certain constraints for each such entity and individual on the total actual ownership of shares by such entities and individuals),
to the extent and on the terms set forth in each ownership limit waiver agreement (collectively, the “Charter Ownership Limit Waiver
Agreements”); and (ii) a waiver from the provisions contained in Section 1.1 of the Amended and Restated Rights Agreement, dated
August 17, 2020 (as amended by Amendment No. 1 dated August 12, 2021, the “Rights Plan”), to permit each party to the Charter
Ownership Limit Waiver Agreements to Beneficially Own (as defined in the Rights Plan) shares to the maximum extent allowed by the Charter
Ownership Limit Waiver Agreements without being deemed an “Acquiring Person” under Section 1.1 of the Rights Plan, subject
to the terms set forth in the rights plan waiver agreement (the “Rights Plan Waiver Agreement,” and together with the Charter
Ownership Limit Waiver Agreements, the “Waiver Agreements”).
On August 10, 2022, the Company (1) amended
the Charter Ownership Limit Waiver Agreements to (i) immediately increase the Excepted Holder Limit (as defined therein) to 21% and (ii)
increase the Expected Holder Limit to up to 25% upon conditions precedent being satisfied to increase the Excepted Holder Limit to up
to 25% (the “Charter Waiver Agreement Amendments”), and (2) amended the Rights Plan Waiver Agreement to implement corresponding
changes. Concurrent with these amendments, the Company’s board of directors reduced the Aggregate Share Ownership Limit to 6% for
all stockholders of the Company that are not otherwise Bellevue, the Advisor, their respective affiliates or persons who would be treated
as Beneficially Owning or Constructively Owning shares of the Company’s common stock held by either or both of Bellevue and the
Advisor (the “Excluded Persons”). The terms and conditions of the Charter Ownership Limit Waiver Agreements entered into with
each of these entities or individuals are the same except for the actual number of shares the entities or individuals may own or acquire.
All other terms and conditions contained in the Company’s charter will otherwise continue to apply to the shares that the entities
or individuals may own or acquire.
On February 22, 2023, the Company completed
a non-transferable rights offering (the “Rights Offering”), in which the Company raised aggregate gross proceeds of approximately
$5.0 million. The Company issued the 386,100 shares of common stock subscribed for in the Rights Offering on February 27, 2023.
In connection with the Rights Offering which
expired on February 22, 2023, the Company’s board of directors waived the limits contained in the Company’s Rights Plan. In
addition, the Company’s board of directors waived the existing limit imposed on purchases by Bellevue and its affiliates including
future issuances of common stock issued in lieu of the Company paying cash to the Advisor for asset management services. Bellevue, the
Advisor and other affiliates or persons related to Bellevue have granted an irrevocable proxy to the Company pursuant to which the Company
has the right to vote any shares owned by these persons or entities in excess of 34.9% of the Company’s outstanding shares of common
stock in the same proportion as all other shares voted by the Company’s stockholders.
Transactions with Executive Officers,
Directors and Other Related Persons
For more information regarding the Company’s
related party transactions, please see the Company’s definitive proxy statement on Schedule 14A, filed with the SEC on April 18,
2023.
Recent Securities Transactions
Based on our records and on information provided
to us, neither the Company, nor any of its affiliates, directors or executive officers have effected any transactions involving shares
of the Company’s common stock during the 60 days prior to the date of this Offer to Purchase, except as otherwise set forth in this
Offer to Purchase.
Company Arrangements Concerning
the Shares
For more information regarding the Company’s
equity incentive plans, director and executive officer compensation arrangements and related matters, please see the Company’s definitive
proxy statement on Schedule 14A, filed with the SEC on April 18, 2023.
| 12. | Legal Matters; Regulatory Approvals |
We are not aware of the applicability of any
antitrust laws or any license or regulatory permit that appears material to the Company’s business that might be adversely affected
by our acquisition of the shares as contemplated by the Offer or of any approval or other action by any government or governmental, administrative
or regulatory authority or agency, domestic, foreign or supranational, that would be required for our acquisition or ownership of the
shares as contemplated by the Offer. Should any such approval or other action be required, we presently contemplate that we will seek
that approval or other action. We are unable to predict whether we will be required to delay the acceptance for payment of or payment
for shares tendered pursuant to the Offer pending the outcome of any such matter. There can be no assurance that any such approval or
other action, if needed, would be obtained or would be obtained without substantial cost or conditions or that the failure to obtain the
approval or other action might not result in adverse consequences to our business and financial condition.
| 13. | Material U.S. Federal Income Tax Consequences |
The following discussion is a general summary
of certain material U.S. federal income tax consequences to tendering U.S. Holders and Non-U.S. Holders (each as defined below) of a sale
of shares pursuant to the Offer. The Offer will have no U.S. federal income tax consequences to beneficial owners that do not tender any
shares in the Offer. This summary is based upon the Internal Revenue Code of 1986, as amended (the “Code”), the applicable
Treasury Regulations promulgated thereunder, published rulings and administrative pronouncements of the IRS and applicable judicial decisions,
all as in effect as of the date hereof and all of which are subject to change or differing interpretations, possibly on a retroactive
basis. Any such change or differing interpretation may cause the U.S. federal income tax consequences to vary substantially from those
described below. The Company has not requested and will not request a ruling from the IRS with respect to any of the U.S. federal income
tax consequences described below or any part of the Offer. The IRS may disagree with and challenge any of the conclusions reached herein,
and a court may sustain such position.
This discussion addresses only beneficial owners
who hold their shares as “capital assets” within the meaning of Section 1221 of the Code (generally, property held for investment)
and does not address all U.S. federal income tax consequences that may be relevant to beneficial owners in light of their particular circumstances
or to beneficial owners subject to special rules under the U.S. federal income tax laws (such as, for example, dealers or brokers in securities
or commodities, traders in securities who elect to apply a mark- to-market method of accounting, U.S. Holders whose “functional
currency” is not the U.S. dollar, banks or other financial institutions, insurance companies, tax-exempt organizations, pension
plans, regulated investment companies or real estate investment trusts, controlled foreign corporations, passive foreign investment companies,
former citizens or residents of the United States, U.S. expatriates, partnerships or other pass-through entities for U.S. federal income
tax purposes (or investors therein), persons who hold shares as part of a hedge, appreciated financial position, straddle, conversion
or other risk reduction or integrated transaction, persons for whom the sale of shares pursuant to the Offer would constitute a “wash
sale” for U.S. federal income tax purposes, persons who hold or received their shares pursuant to the exercise of any employee stock
options or otherwise as compensation or through a tax-qualified retirement plan, persons who hold (or that held, directly, indirectly
or constructively, at any time during the five-year period ending on the date of the sale of their shares pursuant to the Offer) 5% or
more of the Company’s common stock, and persons required to accelerate the recognition of any item of income with respect to their
shares as a result of such item being recognized on an applicable financial statement). This discussion does not address the effect of
any state, local or non-U.S. tax laws, or any U.S. federal tax considerations other than those pertaining to the income tax (e.g.,
estate or gift tax), that may be applicable to beneficial owners of shares, nor does it address any aspects of the unearned income Medicare
contribution tax under Section 1411 of the Code, the Foreign Account Tax Compliance Act of 2010 (including the Treasury Regulations promulgated
thereunder and intergovernmental agreements entered into pursuant thereto or in connection therewith and any laws, regulations or practices
adopted in connection with any such agreement) or the alternative minimum tax.
Beneficial owners are urged to consult their
own tax advisors regarding the tax consequences of a sale of shares pursuant to the Offer, including the applicability and effect of any
state, local and non-U.S. tax laws.
As used herein, a “U.S. Holder”
means a beneficial owner of shares that is, for U.S. federal income tax purposes, (i) an individual who is a citizen or resident of the
United States, (ii) a corporation created or organized in or under the laws of the United States, any state thereof or the District of
Columbia, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source or (iv) a trust (A)
the administration of which is subject to primary supervision of a court within the United States and with respect to which one or more
United States persons, as defined under Section 7701(a)(30) of the Code, have the authority to control all substantial decisions of the
trust, or (B) that has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a United States person.
As used herein, a “Non-U.S. Holder” means a beneficial owner of shares that is neither a U.S. Holder nor an entity or arrangement
treated as a partnership for U.S. federal income tax purposes.
The U.S. federal income tax treatment of a person
that is treated as a partner in an entity or arrangement treated as a partnership for U.S. federal income tax purposes that holds shares
generally will depend on the status of the partner and the activities of the partnership. Partners tendering shares of Company stock and
persons holding beneficial interests in shares of Company stock through a partnership are urged to consult their own tax advisors regarding
the U.S. federal income and other tax consequences of a sale of shares pursuant to the Offer.
Certain Material U.S. Federal
Income Tax Consequences of the Offer to Tendering U.S. Holders
The sale of shares by a U.S. Holder pursuant
to the Offer will generally be treated as a sale or exchange for U.S. federal income tax purposes. A U.S. Holder will recognize gain or
loss on the receipt of cash in exchange for shares pursuant to the Offer equal to the difference between the amount of cash received and
the adjusted tax basis of the shares sold. A U.S. Holder must calculate gain or loss separately for each
block of shares (generally, shares acquired at the same cost in a single transaction) sold pursuant to the Offer. The gain or loss will
be capital gain or loss and generally will be long-term capital gain or loss if the holding period for such shares is more than one year
as of the date of the sale. The ability to deduct capital losses is subject to limitations.
Certain Material U.S. Federal
Income Tax Consequences of the Offer to Tendering Non-U.S. Holders
Any gain recognized by such Non-U.S. Holder
on the sale of shares pursuant to the Offer generally will not be subject to U.S. federal income tax unless (i) such gain is “effectively
connected” with a trade or business carried on by the Non-U.S. Holder within the United States (and, if required pursuant to an
applicable income tax treaty, is attributable to a permanent establishment of the Non-U.S. Holder within the United States) or (ii) the
Non-U.S. Holder is an individual who is physically present in the United States for 183 days or more during the taxable year of the sale
and certain other conditions are met. If the gain is described in clause (i) above, the gain generally will be subject to U.S. federal
income tax on a net income basis, in the same manner as if the Non-U.S. Holder were a resident of the United States. A Non-U.S. Holder
that is a corporation may be subject to an additional “branch profits tax” at a rate of 30% (or such lower rate as may be
specified by an applicable income tax treaty) with respect to any effectively connected earnings and profits (subject to certain adjustments).
A Non-U.S. Holder described in clause (ii) above will be subject to U.S. federal income tax at a rate of 30% (or such lower rate as may
be specified by an applicable income tax treaty) on the gain derived from the sale, which may be offset by certain U.S. source capital
losses, even though the Non-U.S. Holder is not considered a resident of the United States.
Non-U.S. Holders are urged to consult their
own tax advisors regarding the particular tax consequences to them of selling shares in the Offer.
Information Reporting and Backup
Withholding
Payments of proceeds pursuant to the Offer will
generally be subject to information reporting. In addition, as described in Section 3 above, U.S. federal backup withholding (currently
at a rate of 24%) may apply to payments of gross proceeds paid to a U.S. Holder pursuant to the Offer unless the U.S. Holder delivers
to the applicable withholding agent a properly completed and executed Form W-9 or otherwise establishes an exemption. Certain
persons (including corporations) are not subject to these backup
withholding rules. Backup withholding generally will not apply to payments of gross proceeds in the Offer
to a Non-U.S. Holder if the Non-U.S. Holder submits a properly completed, applicable IRS Form W-8, signed under penalties of perjury,
attesting to such holder’s non-U.S. status and otherwise complies with the backup withholding rules. Backup withholding is not an
additional tax. Amounts withheld under the backup withholding rules may be credited against the holder’s U.S. federal income tax
liability and may entitle the holder to a refund of any excess amounts withheld, provided that the required information is timely furnished
to the IRS. See Section 3 for additional information.
The preceding discussion is intended for
general information only and is not a complete analysis or discussion of all potential tax effects that may be important to particular
beneficial owners. Each beneficial owner is urged to consult such beneficial owner’s own tax advisor to determine its particular
tax consequences of selling shares in the Offer in light of such beneficial owner’s particular circumstances, including the applicability
and effect of any state, local and non-U.S. tax laws.
| 14. | Extension of the Offer; Termination; Amendment |
We expressly reserve the right, in our sole
discretion, at any time and from time to time, and regardless of whether or not any of the events set forth in Section 7 shall have occurred
or shall be deemed by us to have occurred, to extend the period of time during which the Offer is open and thereby delay acceptance for
payment of, and payment for, any shares by giving oral or written notice of such extension to the Depositary and making a public announcement
of such extension. We also expressly reserve the right to terminate the Offer and not accept for payment or pay for any shares not theretofore
accepted for payment or paid for or, subject to applicable law and regulation, to postpone payment for shares upon the occurrence of any
of the conditions specified in Section 7 hereof by giving oral or written notice of such termination or postponement to the Depositary
and making a public announcement of such termination or postponement. Our reservation of the right to delay payment for shares which we
have accepted for payment is limited by Exchange Act Rule 14e-1(c), which requires that we must pay the consideration
offered or return the shares tendered promptly after termination or withdrawal of the Offer.
Subject to compliance with applicable law and
regulation, we further reserve the right, in our sole discretion, and regardless of whether any of the events set forth in Section 7 shall
have occurred or shall be deemed by us to have occurred, to amend the Offer in any respect, including, without limitation, by decreasing
or increasing the consideration offered in the Offer to holders of shares or by decreasing or increasing the number of shares being sought
in the Offer. Amendments to the Offer may be made at any time and from time to time effected by public announcement, such announcement,
in the case of an extension, to be issued no later than 9:00 a.m., New York City time, on the next business day after the last previously
scheduled or announced Expiration Date. Any public announcement made pursuant to the Offer will be disseminated promptly to stockholders
in a manner reasonably designed to inform stockholders of such change. Without limiting the manner in which we may choose to make a public
announcement, except as required by applicable law and regulation, we shall have no obligation to publish, advertise or otherwise communicate
any such public announcement other than by making a release through a newswire service.
If we materially change the terms of the
Offer or the information concerning the Offer, we will extend the Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The rules and certain related releases and interpretations
of the SEC provide that the minimum period during which a tender offer must remain open following material changes in the terms of
the tender offer or information concerning the tender offer (other than a change in price or a change in percentage of securities
sought) will depend on the facts and circumstances, including the relative materiality of such terms or information. As a general
matter, if we materially change the terms of the Offer or the information concerning the Offer (other than a change in price or a
change in percentage of securities sought), including the waiver of a material condition, we are required to extend the Offer, if
necessary, so that the Offer remains open for at least five business days following such change. If (1) we increase or decrease the
price to be paid for shares or increase or decrease the aggregate number of shares being sought in the Offer and (2) the Offer is
scheduled to expire at any time earlier than the expiration of a period ending on the tenth business day from, and including, the
date that such notice of an increase or decrease is first published, sent or given to stockholders in the manner specified in this
Section 14, the Offer will be extended until the expiration of such period of ten business days.
| 15. | Fees and Expenses; Information Agent; Depositary |
We have retained Innisfree M&A Incorporated
to act as Information Agent and Computershare Trust Company, N.A. to act as Depositary in connection with the Offer. The Information Agent
may contact holders of shares by mail, e-mail, telephone and in person and may request brokers, dealers, commercial banks, trust companies
and other nominee stockholders to forward materials relating to the Offer to beneficial owners. The Information Agent and the Depositary
will each receive reasonable and customary compensation for their respective services, will be reimbursed by us for specified reasonable
out-of-pocket expenses and will be indemnified against certain liabilities in connection with the Offer, including certain liabilities
under the federal securities laws.
We will not pay any fees or commissions to brokers
or dealers (other than fees to the Information Agent as described above) for soliciting tenders of shares pursuant to the Offer or for
making any recommendation in connection with the Offer. Stockholders holding shares through brokers, dealers, commercial banks, trust
companies or other nominees are urged to consult such nominees to determine whether transaction costs are applicable if stockholders tender
shares through such nominees and not directly to the Depositary. We will, however, upon request, reimburse brokers, dealers, commercial
banks, trust companies and other nominees for customary mailing and handling expenses incurred by them in forwarding the Offer and related
materials to the beneficial owners of shares held by them as a nominee or in a fiduciary capacity. No broker, dealer, commercial bank,
trust company or other nominee has been authorized to act as the agent of us, the Information Agent or the Depositary for purposes of
the Offer. We will pay or cause to be paid all stock transfer taxes, if any, on our purchase of shares except as otherwise provided in
this document and the Letter of Transmittal.
In making the Offer, we are not aware of
any U.S. State where the making of the Offer is not in compliance with applicable law. If, however, we become aware that the making
of the Offer or the acceptance of shares pursuant to the Offer is not permitted by administrative or judicial action pursuant to a
U.S. State statute (“State Law”), we will make a good faith effort to comply with such applicable State Law. If, after
such good faith effort, we cannot comply with the applicable State Law, the Offer will not be made to the holders of shares in that
U.S. State. In any U.S. State where the securities or Blue Sky laws require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on our behalf by one or more registered brokers or dealers licensed under the laws of such U.S.
State. We have filed with the SEC a Tender Offer Statement on Schedule TO, which
contains additional information with respect to the Offer. The Schedule TO, including the exhibits and any amendments and
supplements thereto, may be examined, and copies may be obtained, at the same places and in the same manner as is set forth in
Section 10 with respect to information concerning us.
We have not made any recommendation as to
whether you should tender or refrain from tendering your shares in the Offer. We have not authorized any person to make any recommendation
on our behalf as to whether you should tender or refrain from tendering your shares in the Offer. We have not authorized any person to
give any information or to make any representations in connection with the Offer other than those contained in this document or documents
incorporated by reference or in the related Letter of Transmittal. If given or made, any recommendation or any such information or representations
must not be relied upon as having been authorized by us, the Information Agent, the Depositary or any of our or their respective affiliates.
Bellevue Capital Partners, LLC
September 27, 2023
SCHEDULE I
BELLEVUE AND ITS CONTROLLING PERSONS
The purchaser is Bellevue Capital Partners,
LLC, a Delaware limited liability company. The address of Bellevue is 222 Bellevue Avenue, Newport, RI 02840 (telephone number: (212)
415-6500).
Mr. Nicholas S. Schorsch is the sole managing
member of Bellevue. Bellevue is an entity that controls the Advisor. Bellevue is the sole member of AR Global, which is the sole member
of ARC III. ARC III is the sole member of New York City Special Limited Partnership, LLC, which is the sole member of the Advisor. The
Advisor manages the Company’s day-to-day business with the assistance of the Company’s Property Manager. The Advisor and Property
Manager are under common control with AR Global and these related parties receive compensation and fees for providing services to the
Company.
In connection with the company’s Rights
Offering which expired on February 22, 2023, the Company’s board of directors waived the limits contained in the Company’s
Rights Plan. In addition, the Company’s board of directors waived the existing limit imposed on purchases by Bellevue and its affiliates
including future issuances of common stock issued in lieu of the Company paying cash to the Advisor for asset management services. Bellevue,
the Advisor and other affiliates or persons related to Bellevue have granted an irrevocable proxy to the Company pursuant to which the
Company has the right to vote any shares owned by these persons or entities in excess of 34.9% of the Company’s outstanding shares
of common stock in the same proportion as all other shares voted by the Company’s stockholders.
The Letter of Transmittal and certificates for
shares and any other required documents should be sent or delivered by each stockholder or such stockholder’s broker, dealer, commercial
bank, trust company or other nominee to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
Computershare Trust Company, N.A.
| BY MAIL |
|
BY OVERNIGHT DELIVERY |
| Computershare |
|
Computershare |
| C/O Voluntary Corporate Actions |
|
C/O Voluntary Corporate Actions |
| P.O. Box 43011 |
|
Suite V |
| Providence, RI 02940-3011 |
|
150 Royall Street |
| |
|
Canton, MA 02021 |
DELIVERY OF THE LETTER OF TRANSMITTAL TO
AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
Questions or requests for assistance may be
directed to the Information Agent at its telephone number and address set forth below. Requests for additional copies of this Offer to
Purchase, the related Letter of Transmittal or the other Offer materials may be directed to the Information Agent at the telephone number
and address set forth below. Stockholders also may contact their broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer. To confirm delivery of shares, stockholders are directed to contact the Depositary.
The Information Agent for the Offer is:
Innisfree M&A Incorporated
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, NY 10022
Banks and Brokers Call: 212-750-5833
All Others Call Toll Free: 877-750-0537
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