There were approximately 721 stockholders of record of Banyan’s common stock as of March 21, 2017. There are additional stockholders who own stock in their accounts at brokerage firms and other financial institutions.

Common Stock

As of December 31, 2016, our certificate of incorporation authorized us to issue 50.0 million shares of common stock, par value $0.01 per share. The holders of our common stock are entitled to one vote per share on all matters to be voted upon by our stockholders, including the election of directors. Our shares of common stock are not convertible into any other security and do not have any preemptive rights, conversion rights, redemption rights or sinking fund provisions. Stockholders are entitled to receive dividends out of funds legally available if our board of directors, in its discretion, determines to issue dividends and only then at the times and in the amounts that our board of directors may determine. In the event of our liquidation, dissolution, or winding up, our stockholders receive ratably any net assets that remain after the payment of all of our debts, preferred stock and other liabilities.

Our certificate of incorporation also limits the number of shares that may be held by any one person or entity.  No person or entity may directly or indirectly acquire shares if it would cause the person or entity to be:

Our board has the authority and has in the past exercised its discretion to exempt shareholders from the foregoing limitations if such shareholders can provide evidence to assure the board that no NOLs will be lost or limited by such exemption or the board determines such exemption is in the best interests of Banyan.

Dividends

We intend to reinvest our earnings, if any, in the business, and have never declared or paid, and do not intend to declare or pay, any cash dividends on our common stock.  

Stock Options

In 2016, no compensatory stock options were issued and 5,000 shares expired on June 26, 2016.

Item 6. Selected Financial Data.

Not applicable.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and related notes included under Item 8 of this Annual Report on Form 10-K.

Overview

Banyan is a shell company without significant operations. Our management team is investigating potential operating companies to acquire and additional sources of financing. Currently we are seeking acquisitions of active companies within various industries throughout North America, but we cannot guarantee we will complete an acquisition in any of these industries.

Our History

The Company was originally organized under the laws of the Commonwealth of Massachusetts in 1985, for the purpose of investing in mortgage loans. The Company was reorganized as a Delaware corporation in 1987. From 1989 to 1992 the Company experienced severe losses as a result of a decline in real estate values and the resulting defaults on the mortgages it held. In 1998, the Company changed its name to B.H.I.T. Inc., and again changed its name to Banyan Rail Services Inc. in 2010. From 2009 to 2012, the Company operated and experienced severe losses from an operating subsidiary in the rail services sector and is now a shell company.

The Company’s ability to continue on a going-concern basis is dependent upon, among other things, raising capital, obtaining debt financing and finding an operating business to acquire, and other factors, many of which are beyond our control.

The Company intends to keep its statutory filings current.

Recent Events

Sale of Subsidiary

During 2016, the Company established a wholly-owned subsidiary, Banyan Medical Partners, LLC (“BMP”), and certain other subsidiaries wholly-owned by BMP. The purpose of these companies was to acquire medical office buildings in the United States. The Company was unable to raise the capital needed to consummate the first medical building opportunity. On March 9, 2017, the Company sold its wholly owned subsidiary, BMP and BMP’s wholly owned subsidiaries to Patriot Equity, LLC, (“Patriot”) a limited liability company owned solely by Gary O. Marino, the Company’s chairman of the board. The selling price was $277,756 in the form of BMP assuming a portion of the Company’s note balance due to Boca Equity Partners LLC (“BEP”). The consideration of $277,756 will be used to recoup the $110,000 in property deposits as of December 31, 2016 and other 2016 expenses incurred by the Company on behalf of BMP. The Company will retain its obligations under the portion of the note to BEP not assumed by BMP in the amount of $313,177. The sale of BMP was approved by the independent members of the Company’s board.

Gary O. Marino, the Company’s chairman of the board, is the chairman, president, and chief executive officer of BEP. Mr. Marino and the Company’s interim chief executive officer, president and chief financial officer, Paul S. Dennis, and director Donald S. Denbo also hold membership interests in BEP.

Financing Agreements

Preferred stock dividends for Series A Preferred Stock for the years ended December 31, 2016 and 2015 are accrued in the amount of $103,750 per annum. During 2012, due to the lack of cash flow, the Company offered to pay the accrued dividends in common stock in lieu of cash. Several preferred shareholders accepted the common stock in lieu of cash and the common shares for these dividends. In February 2016, the Company issued 29,856 shares of common stock in lieu of $29,249 of preferred stock dividends accrued at December 31, 2015 for those preferred shareholders who accepted the common stock in lieu of cash offer. The total accrued but unpaid preferred stock dividends for Series A is $329,017 as of December 31, 2016. The remaining accrual will be paid when the Company has sufficient cash flows as determined by the board of directors.

On July 27, 2016, the Company entered into a Demand Note and Loan Agreement (“Note”) with BEP providing for draws of up to $250,000. Loans under the Note bore interest at an annual rate of 10% and outstanding principal and interest were due on demand. This Note was replaced, cancelled and terminated on December 31, 2016 when the Company entered into a new Demand Note and Loan Agreement (“New Note”) with BEP. The New Note balance as of December 31, 2016 was $471,826, which represents advances from BEP under the Note and New Note, advances made since the date of the Note and New Note and interest accrued thereon. Gary O. Marino, the Company’s chairman of the board, is the chairman, president, and chief executive officer of BEP. Mr. Marino and the Company’s interim chief executive officer, president and chief financial officer, Paul S. Dennis, and director Donald S. Denbo also hold membership interests in BEP.

Common Stock Issuance

On August 8, 2016, the Company issued an aggregate of 220,000 shares of common stock to Donald S. Denbo, Paul S. Dennis, Mark L. Friedman, Gary O. Marino, and Jon D. Ryan as compensation for services as directors in 2016. The Company recorded compensation expense in the amount (included in general and administrative on the Consolidated Statement of Operations) of $165,000 for the value of their services as of September 30, 2016. The compensation expense is based on the $0.75 a share market price of the Company’s stock at the time of issuance as required by applicable accounting guidance.

Critical Accounting Policies and Estimates

The following discussion and analysis of our results of operations and financial condition is based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities, if any, at the date of the financial statements. We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. If these estimates differ materially from actual results, the impact on our financial statements may be material.

We review our financial reporting and disclosure practices and accounting policies quarterly to ensure that they provide accurate and transparent information relative to the current economic and business environment. During the year ended December 31, 2016, there were no significant changes to the critical accounting policies.

Use of Estimates

The preparation of financial statements, in conformity with accounting principles generally accepted in the United States, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash

The Company considers all cash, bank deposits and highly liquid investments with an original maturity of three months or less to be cash.

Fair Value of Financial Instruments

Recorded financial instruments at December 31, 2016 consist of cash and short-term obligations. The related fair values of these financial instruments approximated their carrying values due to either the short-term nature of these instruments or based on the interest rates currently available to the Company.

Earnings per Share

Basic earnings (loss) per share are computed based on weighted average shares outstanding during the period. Diluted earnings (loss) per share are computed using the weighted average number of common and dilutive common stock equivalent shares outstanding during the period. Dilutive common stock equivalent shares consist of the dilutive effect of stock options, and preferred stock common stock equivalents.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Accounting for Income Taxes, as clarified by ASC 740-10, Accounting for Uncertainty in Income Taxes.  Under this method, deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities given the provisions of enacted tax laws.

Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year. In providing for deferred taxes, the Company considers tax regulations of the jurisdictions in which the Company operates, estimates of future taxable income, and available tax planning strategies. If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria of ASC 740.

ASC 740-10 requires that the Company recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the “more-likely-than-not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

Retained Earnings Distributions

The Company’s preferred stockholders are entitled to receive payment before any of the common stockholders upon a liquidation of the Company and we cannot pay dividends on our common stock unless we first pay dividends required by our preferred stock.

Results of Operations

The following table summarizes our results for the years ended December 31, 2016 and 2015:

General and Administrative Expenses

The table below summarizes the general and administrative expenses for the years ended December 31, 2016 and 2015:

General and administrative expenses for the year ended December 31, 2016 were $859,401 as compared to $1,104,478 for the year ended December 31, 2015. The primary reason for the decrease was a decrease in compensation costs of $390,842 due to a decrease in director stock compensation and a decrease in public company costs due primarily to decreased stock transfer services. These decreases are offset by increases in (1) professional fees and consulting services related to pursuing operating acquisition opportunities, (2) other costs including travel expenses increasing approximately $18,000 related to pursuing operating acquisition opportunities and dues and subscriptions increasing approximately $8,000 and (3) office expense increasing primarily to office lease and administrative support costs.

Interest expense

Interest expense was $13,208 and $0 for the years ended December 31, 2016 and 2015, respectively. The increase in interest expense was due to the increase in note payable due to related party of $458,618 as of December 31, 2016 from $0 as of December 31, 2015.

Income tax expense

Income tax expense was $0 for the years ended December 31, 2016 and 2015, respectively, due to a full valuation allowance being recorded by the Company for any deferred tax assets created as the result of any net operating losses generated by operations.

A valuation allowance offsets net deferred tax assets for which future realization is considered to be less likely than not. A valuation allowance is evaluated by considering all positive and negative evidence about whether the deferred tax assets will be realized. At the time of evaluation, the allowance can be either increased or reduced. A reduction could result in the complete elimination of the allowance if positive evidence indicates that the value of the deferred tax assets is no longer impaired and the allowance is no longer required.

The Company’s net deferred tax assets before valuation allowance as of December 31, 2016 and 2015, was $2,838,189 and $2,536,507, respectively, most of which relates to net operating losses that expire from 2019 to 2036. The Company recorded an operating loss for the year and has a history of operating losses. After assessing the realization of the net deferred tax assets, we have recorded a valuation allowance of 100% of the value of the net deferred tax assets as we currently believe it more likely than not that the Company will not realize operating profits and taxable income so as to utilize all of the net operating losses in the near future.

Net loss attributable to common stockholders

Net loss attributable to common shareholders was ($0.09) per share for the year ended December 31, 2016 as compared to ($0.15) per share for the year ended December 31, 2015. The difference of ($0.06) per common share is primarily the result of a reduction in net loss attributable to common stockholders of $231,869 and an increase of 2,221,312 in the weighted average number of common shares outstanding.

Financial Condition and Liquidity

Our cash balances at December 31, 2016 and 2015 were $450 and $327,382, respectively. The following is a summary of our cash flow activity for the years ended December 31, 2016 and 2015:

Net cash used in operating activities

For the year ended December 31, 2016, our net loss of ($872,609) adjusted for non-cash expenses and benefits was ($707,609). This use of cash increased resulting from an increase in property deposits and prepaid and other current assets of $132,951 and was offset by an increase in accounts payable and accrued expenses of $41,802 and an increase in accrued interest due to related party of $13,208.

For the year ended December 31, 2015, our net loss of ($1,104,478) adjusted for non-cash expenses and benefits was ($548,958). This use of cash increased resulting from a decrease in accounts payable and accrued expenses of $45,809 and an increase in prepaid insurance of $8,752.

At December 31, 2016, the Company had a deficiency in working capital of $754,634 as compared to working capital of $27,476 at December 31, 2015. The change in working capital is primarily the result of 2016 losses incurred by the Company in excess of a loan received from BEP. The Company recognizes that, due to the lack of operations and cash flow, it will have to rely upon loans from a related party and future capital contributions from investors to generate cash flow for the foreseeable future.

Net cash provided by financing activities

On July 27, 2016, the Company entered into a Demand Note and Loan Agreement (“Note”) with BEP providing for draws of up to $250,000. Loans under the Note bore interest at an annual rate of 10% and outstanding principal and interest were due on demand. This Note was replaced, cancelled and terminated on December 31, 2016 when the Company entered into a new Demand Note and Loan Agreement (“New Note”) with BEP. The New Note balance as of December 31, 2016 was $471,826, which represents advances from BEP under the Note and New Note, advances made since the date of the Note and New Note and interest accrued thereon. Gary O. Marino, the Company’s chairman of the board, is the chairman, president, and chief executive officer of BEP. Mr. Marino and the Company’s interim chief executive officer, president and chief financial officer, Paul S. Dennis, and director Donald S. Denbo also hold membership interests in BEP.

During 2015, the Company issued 2,936,111 shares of common stock to accredited investors for $528,500. The proceeds of the advances were used to fund working capital requirements.

Preferred stock dividends for Series A are accrued for years ended December 31, 2016 and 2015 in the amount of $103,750 per annum. During 2012, due to the lack of cash flow, the Company offered to pay the accrued dividends in common stock in lieu of cash. Several preferred shareholders accepted the common stock in lieu of cash. In 2016 and 2015, respectively, the Company issued shares of common stock in lieu of $29,249 and $58,500 of preferred stock dividends accrued at year end for those preferred stockholders who accepted the common stock in lieu of cash offer.

New Accounting Pronouncements

Not applicable.

Off-Balance Sheet Financing Arrangements

We do not have any material off-balance sheet financing arrangements.

Inflation

We do not believe inflation had a material impact on our results of operations for the years ended December 31, 2016 and 2015.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 8. Financial Statements and Supplementary Data.

Our financial statements for the years ended December 31, 2016 and 2015 follow this annual report, beginning on page 28.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

On January 20, 2017, the board of directors ratified the dismissal of the Company’s independent registered accounting firm of Daszkal Bolton LLP and engaging the new firm of Zachary Salum and Auditors PA. There were no disagreements with accountants on accounting and financial disclosures.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of December 31, 2016, our management, under the direction of our principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended. Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2016.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining an adequate system of internal control over financial reporting as defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles defined in the Exchange Act.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements and even when determined to be effective, can only provide reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

At the end of December 31, 2016, we carried out evaluations of our effectiveness of internal control over financial reporting under the direction of our Chief Executive Officer and Chief Financial Officer. In making this evaluation, management used the criteria set forth inInternal Control Over Financial Reporting — Guidance for Smaller Public Companies (2006) issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. At December 31, 2016, based upon those evaluations, management concluded that our internal control over financial reporting was effective as of December 31, 2016.

Attestation Report of Independent Registered Public Accounting Firm

This annual report does not include an attestation report of our registered public accounting firms regarding internal control over financial reporting. Management’s report on internal control over financial reporting was not subject to attestation by our registered public accounting firms pursuant to Section 989G of the Dodd Frank Wall Street Reform and Consumer Protection Act and rules of the Securities and Exchange Commission.

Item 9B. Other Information.

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Directors and Executive Officers

Our current directors and executive officers are:

Gary O. Marino, age 72, joined our board in January 2007, was appointed chairman in January 2008 and also served as our chief executive officer from November 2008 until he stepped down in October 2013. Mr. Marino served as chairman, president and CEO of Patriot Rail Corp., an owner and operator of short line and regional railroads, from 2005 until 2012, and formerly held the same positions at RailAmerica, Inc. a company he founded in 1985, until his retirement in 2004. From 1984 until 1993, Mr. Marino served as chairman, president and CEO of Boca Raton Capital Corporation, a publicly owned venture capital investment company. Prior to that he spent more than fifteen years in commercial banking in New York as a senior loan officer and was also president and CEO of two small business investment companies (SBICs), as well as president of a Florida-based commercial bank. Mr. Marino received his B.A. degree from Colgate University and his M.B.A. from Fordham University. From 1966 to 1969, he served as an officer of the United States Army Ordnance Corps. He has also served on the board of directors of the American Association of Railroads. We believe Mr. Marino is well qualified to serve on the board due to his broad experience as an entrepreneur and CEO.

Paul S. Dennis, age 78, joined the board in January 2007 and was appointed interim chief executive officer, president and chief financial officer on November 28, 2016. Previously, Mr. Dennis served as interim chief executive officer from April 2008 and chief financial officer from February 2007 to November 2008. Mr. Dennis has served as president and CEO of Associated Health Care Management Company, Inc. since 1977. Health Care Management is a Cleveland, Ohio based company that managed eight nursing care facilities and four congregate living facilities. The company has sold all but one of its facilities. Mr. Dennis has also been a director and officer with various companies and business ventures in the hardware distribution, pharmaceuticals distribution and steel fabrication industries and a real estate developer, general contractor, owner and investor. We believe Mr. Dennis is highly qualified to serve on Banyan’s board due to his broad experience as an entrepreneur and CEO.

Donald S. Denbo, age 67, joined the board in October 2013. Mr. Denbo has over 40 years of business experience, and is a founding member of Commercial Insurance Associates, LLC (CIA), an independent insurance agency specializing in risk management for a diversified client base. His knowledge and practice is varied, as it encompasses his more than 30 years of success in the insurance industry. In addition, Mr. Denbo has been an owner of Denbo Metal Recovery and a director of Tennessee Valley Recycling LLC, Bancroft Technology Group, Jet Plex Associates, Shadow Bluff Development, Reid Hill and Greymont Kennels, LLC. Mr. Denbo’s education includes a B.S. and M.S. in Psychology from the University of Tennessee, studies at the Vanderbilt School of Medicine and a PhD in Economics from the London School of Economics. We believe Mr. Denbo is highly qualified to serve on Banyan’s board due to his broad experience as an entrepreneur.

The board of directors has established certain attributes that it seeks in identifying candidates for directors. In particular, they look for individuals who have very high integrity, business savvy, an owner-oriented attitude and a deep genuine interest in Banyan. These are the same attributes that Gary O. Marino, Banyan’s Chairman, believes to be essential if one is to be an effective member of the board of directors. In considering candidates for director, the board considers the entirety of each candidate’s credentials in the context of these attributes. In the judgment of the Board, as a whole, each of the directors possesses such attributes.

Committees of the Board

We are currently a shell company without operations and are presently investigating potential acquisition candidates. As a result, our directors have not designated audit, nominating or other committees. Instead, these responsibilities are handled by the entire board. Without an audit committee, we have not designated a director as an “audit committee financial expert” as defined by SEC rules. Although we are pleased with the diverse skills and level of expertise that our directors possess, we may add additional directors as our operations grow and form appropriate committees at that time.

Code of Ethics

In March 2004, our board of directors unanimously adopted a code of conduct and ethics that applies to all of our officers, directors and employees, including our principal executive officer, principal financial and principal accounting officer. We will provide a copy of our code without charge upon written request to Paul S. Dennis, Boca Center, Tower 1, 5200 Town Center Circle, Suite 550, Boca Raton, Florida 33486.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Securities Act of 1934 requires our directors and executive officers, and persons who own more than 10% of our common stock, to make filings with the SEC reporting their ownership of our common stock and to furnish us with copies of these filings. Based solely on our review of copies of reports furnished to us, we believe all Section 16(a) filing requirements were timely met in 2016. Copies of these filings are available on our website atwww.banyanrail.net or the SEC’s website at www.sec.gov.

Director Nominations

Our board of directors does not have a nominating committee. Instead, the board believes it is in the best interests of the Company to rely on the insight and expertise of all directors in the nominating process.

Our directors will recommend qualified candidates for director to the full board and nominees are subject to approval by a majority of our board members. Nominees are not required to possess specific skills or qualifications; however, nominees are recommended and approved based on various criteria including relevant skills and experience, personal integrity and ability and willingness to devote their time and efforts to Banyan. Qualified nominees are considered without regard to age, race, color, sex, religion, disability or national origin. We do not use a third party to locate or evaluate potential candidates for director. The board of directors considers nominees recommended by stockholders according to the same criteria.  

Item 11. Executive Compensation.

Summary Compensation Table

The following table summarizes the compensation paid by us to our executive officers for the years ended December 31, 2016 and 2015, as determined in accordance with SEC rules.

Director Compensation

On August 8, 2016, we issued an aggregate of 220,000 shares of common stock to Donald S. Denbo, Paul S. Dennis, Mark L. Friedman, Gary O. Marino and Jon D. Ryan as compensation for services as a director. The value of which is reflected in the table below, except for Messrs. Dennis and Ryan’s compensation which is described above under Summary Compensation.

On July 7, 2015, we issued an aggregate of 896,000 shares of common stock to Donald S. Denbo, Paul S. Dennis, Mark L. Friedman and Gary O. Marino as compensation for services as a director. The value of which is reflected in the table below, except for Mr. Dennis’ compensation which is described above under Summary Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table lists the stock ownership of our directors and executive officers (current and former) and significant stockholders as of March 21, 2017.

Equity Compensation Plan Information

We have not issued any other options, warrants or rights in 2016 or 2015 under our Equity Compensation Plan. In 2016 and 2015, 5,000 and 10,000 options, respectively, expired for our directors. Our equity plans are summarized in the following table.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Transactions with Related Parties

On December 29, 2014, the Company agreed to issue 1,807,408 shares of common stock to Banyan Holdings in exchange for cancellation of two (2) notes receivable plus accrued interest in the amount $325,333. Gary O. Marino, the Company’s chairman, is the president of Banyan Holdings and a significant owner of the Company. The shares were issued in January 2015. The Company recorded a discount of $3,922,073 to reflect the difference between the offering price and the quoted market price on the date the offering was subscribed. The discount was recorded as interest expense in 2014.

On December 29, 2014, the Company agreed to issue 2,777,778 shares to Marino Holdings, LLC for $0.18 a share or $500,000 in total. Gary O. Marino, the Company’s chairman, is the manager of Marino Holdings, LLC. and a significant owner of the Company. The proceeds from the sale of the shares were used for working capital purposes. The shares were issued in January 2015. The Company recorded a discount of $6,027,778 to reflect the difference between the offering price and the quoted market price on the date the offering was subscribed. The discount was recorded as compensation expense in 2014.

On December 29, 2014, the Company agreed to issue 138,889 shares of common stock to Coalbrookdale Partners as part of a private placement of common stock in exchange for the cancellation of advances made to the Company in the amount of $25,000. The shares were issued in January 2015. The proceeds of the money received were used to fund working capital requirements. Donald S. Denbo, a director of the Company, is a partner in Coalbrookdale Partners. The Company recorded a discount of $301,389 to reflect the difference between the offering price and the quoted market price on the date the offering was subscribed. The discount was recorded as compensation expense in 2014.

Also on December 29, 2014, the Company agreed to issue 138,889 Shares to Jon D. Ryan for $0.18 a share, or $25,000 in total. Mr. Ryan was the Company’s chief executive officer, president and chief financial officer of the Company at the time the shares were issued in January 2015. The Company recorded a discount of $301,389 to reflect the difference between the offering price and the quoted market price on the date the offering was subscribed. The discount was recorded as compensation expense in 2014.

On July 7, 2015, the Company issued an aggregate of 896,000 shares of common stock to Donald S. Denbo, Paul S. Dennis, Mark L. Friedman and Gary O. Marino as compensation for services as a director. The Company recorded compensation expense in the amount (included in general and administrative on the Consolidated Statement of Operations) of $555,520 for the value of their services in 2015.

On June 1, 2015, the Company entered into a month-to-month office lease and administrative support agreement (the “Agreement”) with BEP. The Agreement was effective as of January 1, 2015 and terminated on October 1, 2016, the effective date of a new agreement (the “New Agreement”). The Agreement and New Agreement provide for the Company’s use of a portion of BEP’s offices and certain overhead items at the BEP offices such as space, utilities and other administrative services for $4,750 and $6,605 per month, respectively. In addition, the New Agreement calls for the Company to reimburse BEP a one-time charge in the amount of $37,122 related to the costs of the set-up of the new office and move.

Also on June 1, 2015, the Company entered into a support agreement (the “Support Agreement”) with BEP. The Support Agreement was effective as of January 1, 2015 and terminated on October 1, 2016, the effective date of a new support agreement (the “New Support Agreement”). The Support Agreement and the New Support Agreement provide for corporate support services. The Support Agreement and the New Support Agreements are for a month-to-month term and the New Support Agreement will terminate upon the Company’s payment of a success fee, should the Company acquire more than 50% of the assets or capital stock of any company (an “Acquisition”) during the terms of the Support Agreement or the New Support Agreement or within the one year period following the termination of either. Within five days of the closing of any potential Acquisition, Banyan will pay to BEP 2% of the cash purchase price paid by the Company to the seller(s) for the Acquisition.

On July 27, 2016, the Company entered into a Demand Note and Loan Agreement (the “Note”) with BEP providing for draws of up to $250,000. Loans under the Note bore interest at an annual rate of 10% and outstanding principal and interest were due on demand. This Note was replaced, cancelled and terminated on December 31, 2016 when the Company entered into a new Demand Note and Loan Agreement (“the New Note”) with BEP. The New Note balance as of December 31, 2016 was $471,826 which represents advances from BEP under the Note, advances made since the date of the Note and interest accrued thereon. The New Note bears interest at the rate of 10% per annum and is payable upon demand. BEP may, but is not required to, make advances to the Company as the Company may from time to time request.

Gary O. Marino, the Company’s chairman of the board, is the chairman, president, and chief executive officer of BEP. Mr. Marino, the Company’s interim chief executive officer, president and chief financial officer, Paul S. Dennis, and director, Donald S. Denbo also hold membership interests in BEP.

Director Independence

Our board has determined that Donald S. Denbo is “independent” as defined by NASDAQ Stock Market Listing Rule 5605(a) (2). Although we are not listed for trading on the NASDAQ stock market, we have selected the NASDAQ rules as an appropriate guideline for determining the independence of our board members.

Item 14. Principal Accounting Fees and Services.

On January 20, 2017, the board of directors ratified the dismissal of the Company’s independent registered accounting firm of Daszkal Bolton LLP and engagement of the new firm of Zachary Salum and Auditors PA. No payments were made to Zachary Salum and Auditors PA for the year ending December 31, 2016.

Daszkal Bolton LLP served as our independent registered public accounting firm through January 19, 2017 as described above and was paid $48,000 and $53,109 for their review of the Company’s Form 10-Q’s for the quarters ended March 31, 2016, June 30, 2016 and September 30, 2016 and for the audit of the Form 10-K for the year ended December 31, 2015. Additionally, Daszkal Bolton LLP was paid $5,5002018, filed with the Securities and $7,550 for certain tax services forExchange Commission on April 11, 2019 (the “Annual Report”), is to correct an error in the year ended Decemberdisclosure concerning the compensation of a member of the board of directors contained in the Annual Report. In addition, the Annual Report inadvertently omitted exhibits 31 2016 and 2015, respectively. Also, Daszkal Bolton LLP was paid $3,46532, and $2,050 forthose exhibits are filed with this Amendment.  No other consulting services duringchanges have been made to the years ending December 31, 2016Annual Report. This Amendment includes disclosure as of the original filing date of the Annual Report, does not reflect events that may have occurred subsequent to the original filing date, and 2015, respectively.other than as described in this Amendment, does not modify or update in any way disclosures made in the Annual Report.

BecauseAmendment to Annual Report

The paragraph preceding the director compensation table under “Item 1. Executive Compensation — Director Compensation” at page 17 of the sizeAnnual Report erroneously stated that director Vineet Bedi was granted an option in June 2018 in connection with his oversight of the proposed Transaction (as defined in the Annual Report). MedAmerica was not yet exploring the Transaction in June 2018 and Mr. Bedi was granted the option shortly after joining the MedAmerica’s board of directors in May 2018. In order to correct this error, the paragraph introducing the director compensation table is hereby deleted in its entirety and replaced with the following:

On May 24, 2018, Vineet Bedi joined MedAmerica’s board of directors and on June 11, 2018 we granted Mr. Bedi a fully-vested five-year option to purchase 10,000 shares of our common stock for $6.00 per share for his services as a director. None of our other directors were compensated for their service on the board the directors have not designated an audit committee.  Instead, these responsibilities are handled by the entire board, which considers and pre-approves any audit or non-audit services to be performed by Zachary Salum and Auditors PA. Our board believes the services provided by Zachary Salum and Auditors PA are compatible with maintaining our auditor’s independence.in 2018.

Item 15. Exhibits, Financial Statement Schedules.

31.1*

*Filed herewith.

SIGNATURES

In accordance withPursuant to the requirements of Section 13 or 15(d) of the Exchange Act Banyan Rail Servicesof 1934, MedAmerica Properties Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of Banyan Rail ServicesMedAmerica Properties Inc. and in the capacities and on the dates indicated.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Banyan Rail Services, Inc. and Subsidiaries

Boca Raton, Florida

We have audited the accompanying consolidated balance sheet of Banyan Rail Services, Inc. and Subsidiaries as of December 31, 2016, and the related consolidated statements of operations, stockholders’ (deficit) equity, and cash flows for the year then ended. Banyan Rail Services, Inc.’s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Banyan Rail Services, Inc. and Subsidiaries as of December 31, 2016, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 of the accompanying consolidated financial statements, the Company has incurred significant recurring losses from operations, its total liabilities exceeds its total assets, and is dependent on outside sources of funding for continuation of its operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 4. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Zachary Salum Auditors P.A.

South Miami, Florida

March 27, 2017

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Banyan Rail Services, Inc.

Boca Raton, Florida

We have audited the accompanying balance sheet of Banyan Rail Services, Inc. (the “Company”) as of December 31, 2015, and the related statement of operations, stockholders’ equity, and cash flow for each of the year then ended. The Company’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2015, and the results of its operations and its cash flows for year then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company continues to experience recurring losses and negative cash flows from operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding those matters are described in the footnotes accompanying the financial statements. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

/s/ Daszkal Bolton LLP

Boca Raton, Florida

March 22, 2016

See Notes to Consolidated Financial Statements

Banyan Rail Services Inc. and Subsidiaries

Consolidated Statements of Operations

See Notes to Consolidated Financial Statements

Banyan Rail Services Inc. and Subsidiaries

Consolidated Statements of Cash Flows

See Notes to Consolidated Financial Statements

Banyan Rail Services Inc. and Subsidiaries

Consolidated Statements of Stockholders’ (Deficit) Equity

Years Ended December 31, 2016 and 2015

See Notes to Consolidated Financial Statements

Banyan Rail Services, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 1.  Nature of Operations

Banyan Rail Services, Inc. (the “Company”) was originally organized under the laws of the Commonwealth of Massachusetts in 1985, under the name VMS Hotel Investment Trust, for the purpose of investing in mortgage loans, principally to entities affiliated with VMS Realty Partners. The Company was subsequently reorganized as a Delaware corporation in 1987 and changed its name to B.H.I.T. Inc. In 2010, the Company changed its name from B.H.I.T. Inc. to Banyan Rail Services Inc. From 2009 to 2012, the Company operated and experienced severe losses from an operating subsidiary in the rail services sector and is now a shell company.

The Company is actively seeking to acquire active businesses within a variety of industries throughout North America.

Liquidity and Going Concern (See Note 4) The Company’s ability to continue a going-concern basis is dependent upon, among other things, raising capital, finding an operating business to acquire, and other factors, many of which are beyond our control.

Note 2.  Principles of Consolidation and Basis of Presentation

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company accounts have been eliminated in consolidation.

Basis of Presentation

The accompanying consolidated financial statements give effect to all adjustments necessary to present fairly the financial position and results of operations and cash flows of the Company and its subsidiaries.

Note 3.  Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements, in conformity with accounting principles generally accepted in the United States, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash

The Company considers all cash, bank deposits and highly liquid investments with an original maturity of three months or less to be cash equivalents. From time to time our cash deposits exceed federally insured limits.

Fair Value of Financial Instruments

Recorded financial instruments as of December 31, 2016 consist of cash, prepaid expenses, accounts payable, accrued liabilities and short-term obligations. The related fair values of these financial instruments approximated their carrying values due to either the short-term nature of these instruments or based on the interest rates currently available to the Company.

Banyan Rail Services, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 3.  Summary of Significant Accounting Policies (Continued)

(Loss) Per Common Share

The Company computes net loss per common share in accordance with the provision included in ASC 260,Earnings per Share (“ASC 260”). Under ASC 260, basic and diluted income per share is computed by dividing net loss available to shareholders by the weighted average number of common shares and common share equivalents outstanding during the period. Basic loss per common share excludes the effect of potentially dilutive securities, while diluted loss per common share reflects the potential dilution that would occur if securities or other contracts to issue common shares were exercised for, converted into or otherwise resulted in the issuance of common shares.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Accounting for Income Taxes, as clarified by ASC 740-10, Accounting for Uncertainty in Income Taxes.  Under this method, deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities given the provisions of enacted tax laws.

Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year. In providing for deferred taxes, the Company considers tax regulations of the jurisdictions in which the Company operates, estimates of future taxable income, and available tax planning strategies. If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria of ASC 740.

ASC 740-10 requires that the Company recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the “more-likely-than-not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

Retained Earnings distributions

The Company’s preferred stockholders are entitled to receive payment before any of the common stockholders upon a liquidation of the Company and we cannot pay dividends on our common stock unless we first pay dividends required by our preferred stock.

Recently Issued Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either a full retrospective or retrospective with cumulative effect transition method. In August 2015, the FASB issued ASU 2015-14 which defers the effective date of ASU 2014-09 one year making it effective for annual reporting periods beginning after December 15, 2018. As the Company does not as yet generate revenue from customers, adoption of the standard is expected to have no impact on the accompanying consolidated financial statements.

During 2016, the Financial Accounting Standards Board (the “FASB”) has issued Accounting Standards Updates (“ASUs”) 2016-01 through 2016-17. Except for ASU 2016-02, 2016-09, and 2016-15, which are discussed below, these ASUs provide technical corrections or simplification to existing guidance and to specialized industries or entities and therefore have minimal, if any, impact on the Company.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires lessees to recognize most leases on the balance sheet. The provisions of this ASU are effective for annual periods beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. Because neither the Company nor any of its subsidiaries are parties to any leases, this ASU has no impact on the accompanying consolidated financial statements.

Banyan Rail Services, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 3.  Summary of Significant Accounting Policies (Continued)

Recently Issued Accounting Pronouncements (Continued)

In March 2016, the FASB issued ASU 2016-09, Compensation–Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The objective of this ASU is to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted for any entity in any interim or annual period. This ASU will not have a material impact on the Company’s condensed financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. This ASU is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017, with early adoption permitted. The implementation of this ASU is not expected to have a material impact on the Company’s financial statements.

Note 4.  Liquidity and Going Concern

At and for the period ended December 31, 2016, the Company had a net working capital deficit of $754,634 and incurred negative cash flows from operating activities of $785,550. The Company’s future liquidity and capital requirements are dependent upon many factors, including our ability to identify and complete acquisitions as well as the success of any business we do acquire. We may need to raise additional funds in order to meet working capital requirements, make additional capital expenditures or to take advantage of other opportunities. We cannot be certain that we will be able to obtain financing on favorable terms or at all. If we are unable to raise needed capital, our growth and our ability to continue as a going concern will be curtailed. In addition, if we raise capital by selling additional shares of stock, the percentage ownership of our current shareholders will be diluted.

Note 5.  Preferred Stock and Common Stock

Preferred stock dividends for Series A Preferred Stock for the years ended December 31, 2016 and 2015 are accrued in the amount of $103,750 per annum. During 2012, due to the lack of cash flow, the Company offered to pay the accrued dividends in common stock in lieu of cash. Several preferred shareholders accepted the common stock in lieu of cash and the common shares for these dividends. In February 2016, the Company issued 29,856 shares of common stock in lieu of $29,249 of preferred stock dividends accrued at December 31, 2015 for those preferred shareholders who accepted the common stock in lieu of cash offer. The total accrued but unpaid preferred stock dividends for Series A is $329,017 and $254,517 as of December 31, 2016 and 2015, respectively. The remaining accrual will be paid when the Company has sufficient cash flows as determined by the board of directors.

On August 8, 2016, the Company issued an aggregate of 220,000 shares of common stock to Donald S. Denbo, Paul S. Dennis, Mark L. Friedman, Gary O. Marino, and Jon D. Ryan as compensation for services as directors in 2016. The Company recorded compensation expense in the amount (included in general and administrative on the Consolidated Statement of Operations) of $165,000 for the value of their services as of September 30, 2016. The compensation expense is based on the $0.75 a share market price of the Company’s stock at the time of issuance as required by applicable accounting guidance.

As of December 31, 2016, Banyan Rail Holdings, LLC (“Banyan Holdings”) and Marino Family Holdings, LLC (“Marino Holdings”) owned 2,726,114 and 3,097,778 shares of common stock, respectively.

Banyan Rail Services, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6.  (Loss) per Share

The Company excluded from the diluted earnings per share calculation 103,750 common shares issuable upon conversion of shares of convertible preferred stock that were outstanding at December 31, 2016 and 2015, as their inclusion would be anti-dilutive. In addition, the Company excluded 5,000 stock options as of December 31, 2015, which subsequently expired in July 2016 as their inclusion would be anti-dilutive.

Note 7.  Stock-Based Compensation

The Company previously had stock option agreements with its directors and officers for serving on the Company’s board of directors and as officers. The option activity is as follows:

Prior to June 30, 2010 the Company had not adopted a formal stock option plan. The number of options issued and the grant dates were determined at the discretion of the Company’s Board. Certain options vested at the date of grant and others vested over a one year period. The options were exercisable for periods not exceeding three to five years from the date of grant. On July 1, 2010, at its annual meeting of stockholders, the 2010 Stock Option and Award Plan was approved.

The fair values of stock options were estimated using the Black-Scholes method, which takes into account variables such as estimated volatility, expected holding period, dividend yield, and the risk free interest rate. The risk free interest rate was the five year treasury rate at the date of grant. The expected life was based on the contractual life of the options at the date of grant.

Note 8.  Income Taxes 

The provision for income taxes consists of the following components:

Banyan Rail Services, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 8.  Income Taxes (Continued)

The components of deferred income tax assets and liabilities are as follows:

The Company’s federal net operating loss (“NOL”) carryforward balance as of December 31, 2016 was $7,277,408, expiring between 2018 and 2036.

Banyan Rail Services, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 8.  Income Taxes (Continued)

A schedule of the NOLs is as follows:

The Company’s net deferred tax assets before valuation allowance as of December 31, 2016 was $2,838,189, most of which relates to net operating losses that expire from 2018 to 2036. The Company recorded an operating loss for the year and has a history of operating losses. After assessing the realization of the net deferred tax assets, we have recorded a valuation allowance of 100% of the value of the net deferred tax assets as we believe it more likely than not that the Company will not realize operating profits and taxable income so as to utilize all of the net operating losses in the future. During the year ended December 31, 2016, the Company recorded a valuation allowance of $301,682.

The Company is subject to income taxes in the U.S. federal jurisdiction and Florida state jurisdiction. The tax regulations within each jurisdiction are subject to interpretation of related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no longer subject to U.S. federal, state and local examinations by tax authorities for the years before 2013.

The income tax provision differs from the expense that would result from applying statutory rates to income before income taxes principally because of permanent differences and the release of the valuation allowance on net deferred tax assets for which realization is certain. The effective tax rates for 2016 and 2015 were computed by applying the federal and state statutory corporate tax rates as follows:

Banyan Rail Services, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 8.  Income Taxes (Continued)

The Company adopted the provisions of ASC 740, previously FASB Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes, on January 1, 2007. Previously the Company has accounted for tax contingencies in accordance with Statement of Financial Accounting Standards 5, Accounting for Contingencies.

The Company recognizes the financial statement impact of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than–not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. At the adoption date the Company applied ASC 740 to all tax positions for which the statute of limitations remained open. As a result of the implementation of ASC 740, the Company did not recognize a material increase in the liability for uncertain tax positions.

In adopting ASC 740-10, the Company elected to classify interest and penalties related to unrecognized tax benefits as income tax expenses. The Company has no accrued interest and penalties as of the years ended December 31, 2016 and 2015.

A reconciliation of beginning and ending amount of unrecognized tax benefits is as follows:

As of December 31, 2016 and December 31, 2015, the balance in unrecognized tax benefits was $0 and $11,400, respectively. The increases or decreases in each year are the result of management’s assessment that certain positions taken meet or no longer meet the more likely than not criteria established in ASC 740-10.  If these unrecognized tax benefits were ultimately recognized, they would have reduced the Company’s annual effective tax rate.

Note 9.  Related Party Transactions

On December 29, 2014, the Company agreed to issue 1,807,408 shares of common stock to Banyan Holdings in exchange for cancellation of two (2) notes receivable plus accrued interest in the amount $325,333. Gary O. Marino, the Company’s chairman, is the president of Banyan Holdings and a significant owner of the Company. The shares were issued in January 2015. The Company recorded a discount of $3,922,073 to reflect the difference between the offering price and the quoted market price on the date the offering was subscribed. The discount was recorded as interest expense in 2014.

Banyan Rail Services, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 9.  Related Party Transactions (Continued)

On December 29, 2014, the Company agreed to issue 2,777,778 shares to Marino Holdings, LLC for $0.18 a share or $500,000 in total. Gary O. Marino, the Company’s chairman, is the manager of Marino Holdings, LLC. and a significant owner of the Company. The proceeds from the sale of the shares were used for working capital purposes. The shares were issued in January 2015. The Company recorded a discount of $6,027,778 to reflect the difference between the offering price and the quoted market price on the date the offering was subscribed. The discount was recorded as compensation expense in 2014.

On December 29, 2014, the Company agreed to issue 138,889 shares of common stock to Coalbrookdale Partners as part of a private placement of common stock in exchange for the cancellation of advances made to the Company in the amount of $25,000. The shares were issued in January 2015. The proceeds of the money received were used to fund working capital requirements. Donald S. Denbo, a director of the Company, is a partner in Coalbrookdale Partners. The Company recorded a discount of $301,389 to reflect the difference between the offering price and the quoted market price on the date the offering was subscribed. The discount was recorded as compensation expense in 2014.

Also on December 29, 2014, the Company agreed to issue 138,889 Shares to Jon Ryan for $0.18 a share, or $25,000 in total. Mr. Ryan was the Company’s chief executive officer, president and chief financial officer of the Company at the time the shares were issued in January 2015. The Company recorded a discount of $301,389 to reflect the difference between the offering price and the quoted market price on the date the offering was subscribed. The discount was recorded as compensation expense in 2014.

On July 7, 2015, the Company issued an aggregate of 896,000 shares of common stock to Donald S. Denbo, Paul S. Dennis, Mark L. Friedman and Gary O. Marino as compensation for services as a director. The Company recorded compensation expense in the amount (included in general and administrative on the Consolidated Statement of Operations) of $555,520 for the value of their services in 2015.

On June 1, 2015, the Company entered into a month-to-month office lease and administrative support agreement (the “Agreement”) with Boca Equity Partners LLC (“BEP”). The Agreement was effective as of January 1, 2015 and terminated on October 1, 2016, the effective date of a new agreement (the “New Agreement”). The Agreement and New Agreement provide for the Company’s use of a portion of BEP’s offices and certain overhead items at the BEP offices such as space, utilities and other administrative services for $4,750 per month through September 2016 and $6,605 per month effective October 1, 2016. In addition, the New Agreement calls for the Company to reimburse BEP a one-time charge in the amount of $37,122 related to the costs of the set-up of the new office and move.

Also on June 1, 2015, the Company entered into a support agreement (the “Support Agreement”) with BEP. The Support Agreement was effective as of January 1, 2015 and terminated on October 1, 2016, the effective date of a new support agreement (the “New Support Agreement”). The Support Agreement and the New Support Agreement provide for corporate support services. The Support Agreement and the New Support Agreements are for a month-to-month term and the New Support Agreement will terminate upon the Company’s payment of a success fee, should the Company acquire more than 50% of the assets or capital stock of any company (an “Acquisition”) during the terms of the Support Agreement or the New Support Agreement or within the one year period following the termination of either. Within five days of the closing of any potential Acquisition, Banyan will pay to BEP 2% of the cash purchase price paid by the Company to the seller(s) for the Acquisition.

On July 27, 2016, the Company entered into a Demand Note and Loan Agreement (the “Note”) with BEP providing for draws of up to $250,000. Loans under the Note beared interest at an annual rate of 10% and outstanding principal and interest were due on demand. This Note was cancelled and terminated on December 31, 2016 when the Company entered into a new Demand Note and Loan Agreement (“the New Note”) with BEP. The New Note balance at December 31, 2016 is $471,826 which represents advances from BEP under the Note, advances made since the date of the Note and interest accrued thereon. The New Note bears interest at the rate of 10% per annum and is payable upon demand. BEP may, but is not required to, make advances to the Company as the Company may from time to time request.

Banyan Rail Services, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 9.  Related Party Transactions (Continued)

Gary O. Marino, the Company’s chairman of the board, is the chairman, president, and chief executive officer of BEP. Mr. Marino, the Company’s interim chief executive officer, president and chief financial officer, Paul S. Dennis, and director Donald S. Denbo also hold membership interests in BEP.

The Company’s directors are currently not receiving cash compensation for their services but were compensated through the issuance of common shares, see Note 5. Preferred Stock and Common Stock.

The Company’s board of directors and officers beneficially own 7,092,375 shares of the Company’s common stock as of December 31, 2016 (67.12% of the outstanding common stock).

Note 10.  Subsequent Events

During 2016, the Company established a wholly-owned subsidiary, Banyan Medical Partners, LLC (“BMP”), and certain other subsidiaries wholly-owned by BMP. The purpose of these companies was to acquire medical office buildings in the United States. The Company was unable to raise the capital needed to consummate the first medical building opportunity. On March 9, 2017, the Company sold its wholly owned subsidiary, BMP and BMP’s wholly owned subsidiaries to Patriot Equity, LLC, a limited liability company owned solely by Gary O. Marino, the Company’s chairman of the board. The selling price was $277,756 in the form of BMP assuming a portion of the Company’s note payable balance due to BEP. The consideration of $277,756 will be used to recoup the $110,000 in property deposits as of December 31, 2016 and other 2016 expenses incurred by the Company on behalf of BMP.