What changed in this filing

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Item 9A. Controls and Procedures

2025-03-12 compared with 2024-03-14 · 266 added, 253 removed, 818 unchanged (39% of the section changed)

27 unchanged sentences

Equity Compensation Plan Information

The following table provides information as of December 31, 2023 about shares of our common stock that may be issued upon the exercise of options, warrants and rights under our 2018 Amended and Restated Incentive Plan (the “2018 Plan”), our 2020 Amended and Restated Incentive Plan (the “2020 Plan”;

and together with the 2018 Plan, the “Prior Plans”) and our 2022 Incentive Plan (the “2022 Plan”;

The following table provides information as of December 31, 2024 about shares of our common stock that may be issued upon the exercise of options, warrants and rights under our 2018 Amended and Restated Incentive Plan (the “2018 Plan”), our 2020 Amended and Restated Incentive Plan (the “2020 Plan”), the 2022 Incentive Plan (the "2022 Plan";

and together with the 2018 Plan and the 2020 Plan, the “Prior Plans”), and our 2024 Incentive Plan (the “2024 Plan”;

and together with the Prior Plans, the “Incentive Plans”).

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_______________________________________________________________________________

(1) Includes up to 209,322 shares, 211,417 and 213,751 shares of common stock issuable pursuant to restricted stock units (“RSUs”) that vest as of March 31, 2024, June 30, 2025 and June 30, 2026, respectively, if and to the extent specified conditions are satisfied by such vesting dates.

(1) Includes up to 198,761, 200,251 and 201,825 shares of common stock issuable pursuant to restricted stock units (“RSUs”) that vest as of June 30, 2025, June 30, 2026 and June 30, 2027, respectively, if and to the extent specified conditions are satisfied by such vesting dates.

RSUs granted pursuant to the 2022 Plan and the 2024 Plan account for 399,012 shares and 201,825 shares, respectively.

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Membership Interest Purchase Agreement dated as of February 23, 2016 entered into between TRB Newark Assemblage, LLC ("TRB") and TRB Newark TRS, LLC ("TRB REIT" and together with TRB, collectively, the "Seller") and RBH Partners III, LLC, and joined by RBH-TRB Newark Holdings, LLC and GS-RBH Newark Holdings, LLC (incorporated by reference to exhibit 10.2 filed with our Quarterly Report on Form 10-Q for the period ended March 31, 2016).

2018 Amended and Restated Incentive Plan (incorporated by reference to Exhibit 10.6 filed with our Current Report on Form 8-K on June 15, 2023).

Title of Exhibits

* Form of Restricted Shares Agreement for the 2018 Incentive Plan (incorporated by reference to Exhibit 10.10 filed with our Annual Report on Form 10-K filed December 10, 2018).

* 2020 Amended and Restated Incentive Plan (incorporated by reference to Exhibit 10.8 filed with our Current Report on Form 8-K on June 15, 2023).

* Form of Performance Awards Agreement granted in 2021 pursuant to the 2020 Incentive Plan (incorporated by reference to exhibit 10.1 of our Current Report on Form 8-K filed on June 11, 2021)

Amended and Restated Loan Agreement (the "Loan Agreement") made as of November 18, 2021, by and among us and VNB New York, LLC.

3 unchanged sentences

Form of Negative Pledge Agreement (incorporated by reference to Exhibit 10.4 filed with our Current Report on Form 8-K on November 18, 2021).

Letter agreement dated as of November 19, 2021 with respect to the Loan Agreement.

(incorporated by reference to exhibit 10.14 filed with our Annual Report on Form 10-K for the year ended December 31, 2021).

Letter agreement dated as of November 19, 2021 with respect to the Loan Agreement (incorporated by reference to exhibit 10.14 filed with our Annual Report on Form 10-K for the year ended December 31, 2021).

Amendment dated September 14, 2022 to the Loan Agreement (incorporated by reference to Exhibit 10.1 filed with our Current Report on Form 8-K on September 16, 2022).

* 2022 Incentive Plan (incorporated by reference to Exhibit 10.1 filed with our Current Report on Form 8-K on June 10, 2022).

Second amendment dated as of August 22, 2023 to the Amended and Restated Loan Agreement made as of November 18, 2021, as amended, by and between us and VNB New York, LLC.

(incorporated by reference to Exhibit 10.1 filed with our Quarterly Report on Form 10-Q on November 6, 2023).

* Form of Performance Awards Agreement granted in 2022 pursuant to the 2022 Incentive Plan (incorporated by reference to Exhibit 10.5 filed with our Quarterly Report on Form 10-Q for the period ended September 30, 2022).

(incorporated by reference to Exhibit 10.1 filed with our Quarterly Report on Form 10-Q for the period ended September 30, 2023).

Third amendment dated as of July 9, 2024 to the Amended and Restated Loan Agreement made as of November 18, 2021, as amended, by and between us and VNB New York, LLC (incorporated by reference to Exhibit 10.1 filed with our Current Report on Form 8-K on July 15, 2024).

Form of Membership Interest Purchase Agreement used to effectuate the purchase of the interests of our joint venture partners (incorporated by reference to Exhibit 10.1 filed with our Quarterly Report on Form 10-Q for the period ended March 31, 2022).

* 2018 Amended and Restated Incentive Plan (incorporated by reference to Exhibit 10.6 filed with our Current Report on Form 8-K on June 15, 2023).

* 2020 Amended and Restated Incentive Plan (incorporated by reference to Exhibit 10.8 filed with our Current Report on Form 8-K on June 15, 2023).

* 2022 Incentive Plan (incorporated by reference to Exhibit 10.1 filed with our Current Report on Form 8-K on June 10, 2022).

* 2024 Incentive Plan (incorporated by reference to Exhibit 10.1 filed with our Current Report on Form 8-K on June 11, 2024).

* Form of Restricted Shares Agreement for the 2018 Incentive Plan (incorporated by reference to Exhibit 10.10 filed with our Annual Report on Form 10-K filed December 10, 2018).

* Form of Restricted Share Agreement awarded in 2023 pursuant to the 2022 Incentive Plan (incorporated by reference to Exhibit 10.19 filed with our Annual Report on Form 10-K for the year ended December 31, 2022).

* Form of Restricted Share Agreement awarded in 2024 pursuant to the 2022 Incentive Plan (incorporated by reference to Exhibit 10.20 filed with our Annual Report on Form 10-K for the year ended December 31, 2023).

* Form of Performance Awards Agreement granted in 2021 pursuant to the 2020 Incentive Plan (incorporated by reference to exhibit 10.1 of our Current Report on Form 8-K filed on June 11, 2021)

* Form of Performance Awards Agreement granted in 2023 pursuant to the 2022 Incentive Plan (incorporated by reference to Exhibit 10.1 filed with our Quarterly Report on Form 10-Q for the period ended June 30, 2023).

* Form of Restricted Share Agreement awarded in 2024 pursuant to the 2022 Incentive Plan

* Form of Performance Awards Agreement granted in 2024 pursuant to the 2024 Incentive Plan (incorporated by reference to Exhibit 10.2 filed with our Quarterly Report on Form 10-Q for the period ended June 30, 2024).

Insider Trading Policy

Subsidiaries of the Registrant.

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Certification of Chief Financial Officer pursuant to Section 906 of the Act.

Registrant's Clawback Policy effective October 2, 2023.

Registrant's Clawback Policy effective October 2, 2023 (incorporated by reference to Exhibit 97.1 filed with our Annual Report on March 14, 2024).

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III—Real Estate Properties and Accumulated Depreciation

IV - Mortgage loans

All other schedules are omitted because they are not applicable or the required information is shown in the consolidated financial statements or the notes thereto.

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We have audited the accompanying consolidated balance sheets of BRT Apartments Corp.

and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, stockholders' equity and cash flows for each of the two years in the period ended December 31, 2023 and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, stockholders' equity and cash flows for each of the two years in the period ended December 31, 2024, and the related notes and financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with U.S.

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The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.

Valuation of Investments in Real Estate

Description of the Matter At December 31, 2023, the Company’s investments in real estate totaled approximately $636 million.

As described in Notes 1 and 11 to the consolidated financial statements, the Company reviews its investments in real estate when events or circumstances change indicating the carry value of the investment may not be recoverable.

Auditing the Company’s impairment analysis involved a high degree of subjectivity due to the judgment used by management to determine when indicators of impairment exist.

How We Addressed the Matter in Our Audit For investments in real estate, we obtained and reviewed management’s analysis of whether any indicators of impairment were identified, evaluated whether the list of indicators of impairment was complete, and evaluated whether conclusions reached by management were reasonable based on property-specific factors.

Preferred Equity Investments

Description of the Matter At December 31, 2024, the Company accounted for preferred equity investments totaling $17.7 million, net, as loans.

As discussed in Notes 1 and 5 to the consolidated financial statements, at the inception of each such investment, the Company determined that the joint ventures in which the Company has the preferred equity investments are variable interest entities (“VIEs”), that the Company is not the primary beneficiary, and that such investments should be accounted for as loans.

Auditing the Company’s accounting for its preferred equity investments was especially challenging because (i) assessing the economic rights and control of the activities of the VIEs that most significantly impact their economic performance to determine the primary beneficiary and (ii) evaluating, among other things, the classification and accounting for the preferred equity investments as loans, are highly judgmental.

How We Addressed the Matter in Our Audit To test the Company’s determination that it is not the primary beneficiary of the VIEs as well as its classification and accounting for the preferred equity investments as loans, our procedures included, among others, inspecting the preferred equity agreements, evaluating the judgments used by management to identify the activities of the VIEs that most significantly impact the economic performance of the joint ventures, and assessing the characteristics of the preferred equity investments, specifically the Company’s participation in the expected residual profits and the cash equity investments funded by the borrowers.

/s/ Ernst & Young LLP

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Investment in unconsolidated joint ventures 31,344 34,242

Loan receivables, net of deferred fees of $ 313 and allowance for credit loss of $ 270

Cash and cash equivalents 27,856 23,512

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Credit facility — —

Accounts payable and accrued liabilities 21,948 22,631

Accounts payable, accrued and other liabilities 24,915 21,948

Total Liabilities 508,549 481,518

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Rental and other revenue from real estate properties $ 94,773 $ 93,069

Other income 548 12

Loan interest and other income 857 548

Total revenues 95,630 93,617

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15,595 15,433

Provision for credit loss 270 —

Depreciation and amortization 25,926 28,484

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Gain on insurance recovery — 240

Loss on extinguishment of debt — ( 563 )

Income from continuing operations 4,069 50,920

Provision for taxes 54 821

Income from continuing operations, net of taxes 4,015 50,099

(Loss) income from continuing operations ( 9,862 ) 4,069

(Benefit) provision for taxes ( 226 ) 54

(Loss) income from continuing operations, net of taxes ( 9,636 ) 4,015

Income attributable to non-controlling interests ( 155 ) ( 142 )

Net income attributable to common stockholders $ 3,873 $ 49,955

Net (loss) income attributable to common stockholders $ ( 9,791 ) $ 3,873

Weighted average number of shares of common stock outstanding:

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Distributions to non-controlling interests — — — ( 139 ) ( 139 )

Shares issued through equity offering program, net 5 9,940 — — 9,945

Shares issued through DRIP — 3,034 — — 3,034

Shares repurchased ( 7 ) ( 14,392 ) — — ( 14,399 )

Net income — — 3,873 142 4,015

Other comprehensive income — — — — —

Comprehensive income — — — — 50,099

Balances, December 31, 2023 $ 175 $ 267,271 $ ( 38,986 ) $ ( 15 ) $ 228,445

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Shares repurchased ( 2 ) ( 3,493 ) — — ( 3,495 )

Net income — — 3,873 142 4,015

Net (loss) income — — ( 9,791 ) 155 ( 9,636 )

Balances, December 31, 2024 $ 179 $ 272,275 $ ( 67,485 ) $ ( 55 ) $ 204,914

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Cash flows from operating activities:

Net Income $ 4,015 $ 50,099

Net (loss) income $ ( 9,636 ) $ 4,015

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 25,926 28,484

Provision for credit loss 270 —

Amortization of deferred financing fees 1,150 1,072

Amortization of debt fair value adjustment 558 613

Amortization of deferred loan fee income ( 9 ) —

Amortization of restricted stock and restricted stock units 4,877 4,768

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Gain on insurance recovery — ( 240 )

Loss on extinguishment of debt — 563

Increases and decreases from changes in other assets and liabilities:

(Increase) decrease in other assets ( 787 ) 5,142

Decrease in accounts payable and accrued liabilities ( 678 ) ( 3,923 )

Decrease (increase) in other assets 559 ( 787 )

Increase (decrease) in accounts payable and accrued liabilities 2,898 ( 678 )

Net cash provided by operating activities 24,143 19,606

1 unchanged sentence

Improvements to real estate owned ( 6,152 ) ( 9,643 )

Purchase and consolidation of joint venture properties — ( 101,666 )

Additions to loan receivables ( 18,250 ) —

Proceeds from the sale of real estate owned 953 711

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Proceeds from insurance recoveries — 240

Net cash provided by (used in) investing activities 16,679 ( 15,775 )

Net cash (used in) provided by investing activities ( 18,907 ) 16,679

Cash flows from financing activities:

Proceeds from mortgages payable 27,375 21,173

Mortgage payoffs — ( 41,666 )

Mortgage principal payments ( 3,888 ) ( 3,308 )

Proceeds from credit facility — 43,000

Repayment of credit facility — ( 19,000 )

2 unchanged sentences

Distributions to non-controlling interests ( 195 ) ( 139 )

Proceeds from the sale of common stock — 9,945

Proceeds from the issuance of DRP shares 3,626 3,034

Repurchase of shares of common stock ( 3,495 ) ( 14,399 )

Net cash used in financing activities ( 32,231 ) ( 13,422 )

Net increase (decrease) in cash, cash equivalents, restricted cash and escrows:

4,054 ( 13,747 )

Net cash provided by (used in) financing activities 3,568 ( 32,231 )

Net increase in cash, cash equivalents, restricted cash and escrows:

Cash, cash equivalents, restricted cash and escrows at beginning of year 31,775 27,721

BRT APARTMENTS CORP.

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Year Ended December 31,

Cash, cash equivalents, restricted cash and escrows at beginning of year 27,721 41,468

Cash, cash equivalents, restricted cash and escrows at end of year $ 40,579 $ 31,775

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Cash paid during the year for interest expense $ 20,870 $ 20,433

Cash paid during the year for income and excise taxes $ 689 $ 283

Consolidation on buyout of partnership interest:

Increase in real estate assets $ — ( 370,513 )

Increase in other assets — ( 13,893 )

Increase in mortgage payable — 231,896

Increase in deferred loan costs — ( 3,892 )

Increase in accounts payable and accrued liabilities — 6,278

Decrease in investment in unconsolidated joint ventures — 48,458

$ — $ ( 101,666 )

Cash paid (net of refunds received) during the year for income and excise taxes $ ( 439 ) $ 689

See accompanying notes to consolidated financial statements.

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At December 31, 2024, BRT:

(i) wholly-owns 21 multi-family properties located in 11 states with an aggregate of 5,420 units and a carrying value of $ 634,046,000 ;

(ii) has ownership interests, through unconsolidated entities, in seven multi-family properties located in four states with an aggregate of 2,287 units, and the carrying value of its net equity investment is $ 30,418,000 ;

and (iii) owns other assets, through consolidated and unconsolidated subsidiaries, with a carrying value of $ 5,615,000 .

The Company's 28 multi-family properties are located in 11 states primarily in the Southeast United States and Texas.

(i) wholly-owns 21 multi-family properties located in eleven states with an aggregate of 5,420 units and a carrying value of $ 614,235,000 ;

(ii) has ownership interests, through unconsolidated entities, in eight multi-family properties located in four states with an aggregate of 2,527 units, and the carrying value of its net equity investment is $ 31,258,000 ;

(iii) have investments in joint ventures that own two multi-family properties which investments are treated for financial statement reporting purposes as loans ("the Preferred Equity Investments"), with a carrying value of $ 17,667,000 , and (iv) owns other assets, through consolidated and unconsolidated subsidiaries, with a carrying value of $ 1,765,000 .

The Company's 29 multi-family properties are located primarily in the Southeast United States and Texas.

BRT conducts its operations to qualify as a real estate investment trust, or REIT, for Federal income tax purposes.

Substantially all of the Company's assets are comprised of multi-family real estate assets generally leased to tenants on a one-year basis.

Most of the Company's assets are comprised of multi-family real estate assets generally leased to tenants on a one-year basis.

Therefore, the Company aggregates real estate assets for reporting purposes and operates in one reportable segment.

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The joint venture that owns a commercial property in Yonkers, NY was determined not to be a variable interest entity ("VIE") but is consolidated because the Company has controlling rights in such entity.

The Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting.

Other than the preferred equity investments (described in the following paragraph), the Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting.

For each joint venture, the Company evaluated the rights provided to each party in the venture to assess the consolidation of the venture.

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The distributions to each joint venture partner are determined pursuant to the applicable operating agreement and may not be pro-rata to the percentage equity interest each partner has in the applicable venture.

Certain items on the consolidated financial statements for the year ended December 31, 2022, have been reclassified to conform with the current year's presentation including reclassifying (i) Credit Facility deferred fees to Other assets and (ii) Deposit and escrows within Cash and Restricted Cash on the statement of cash flows.

Income Tax Status

The joint ventures in which we have the preferred equity investments were determined to be VIE's, as it has been determined that the equity holders lack the ability to direct the activities of the legal entity that most significantly impact the entity's economic performance.

It was determined that the Company is not the primary beneficiary as the Company does not have the power to direct the activities of the VIE that most significantly impact the VIE's performance, and therefore these entities are not consolidated.

The Company qualifies as a real estate investment trust under sections 856-860 of the Internal Revenue Code of 1986, as amended.

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Rental payments are due in advance.

Lease concessions are generally reported on a straight line basis over the lease term.

Leases on residential properties are generally for terms that do not exceed one year .

Rental revenue from commercial properties, including the base rent that each tenant is required to pay in accordance with the terms of their respective leases, net of any rent concessions and lease incentives, is reported on a straight-line basis over the non-cancellable term of the lease.

Current Returns (as defined in Note 5- Loan receivables) from our preferred equity investments are recorded as interest income when it is earned from the sponsor of the joint venture and Hurdle Returns ( as defined in Note 5- Loan Receivable) are recorded as interest income when it is probable that it will be received.

Deferred loan fees are capitalized and recorded into income over the life of the investment.

Real Estate Properties

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The value, as determined, is allocated to the gross assets acquired based on management’s determination of the relative fair values of these assets and liabilities.

Whenever the Company buys out the remaining interest from joint venture partners, the Company follows a cost-accumulation approach, wherein the Company allocates the cost basis of its existing interest and the purchase price to the Company of its partners' remaining interest, to the real estate acquired (including land, buildings and improvements, and identified intangibles such as acquired in-place leases) and acquired liabilities.

Depreciation for multi-family properties is computed on a straight-line basis over an estimated useful life of 30 years.

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The Company accounts for the sale of real estate when title passes to the buyer, sufficient equity payments have been received, there is no continuing involvement by the Company and there is reasonable assurance that the remaining receivable, if any, will be collected.

Asset Impairments

Real Estate Asset Impairments

The Company reviews each real estate asset owned quarterly to determine if there are indicators of impairment.

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These cash flows consider factors such as expected future operating income, trends, the effects of leasing demands, and other factors.

In evaluating a property for impairment, various factors are considered, including estimated current and expected operating cash flow from the property during the projected holding period, costs necessary to extend the life or improve the asset, expected capitalization rates, projected stabilized net operating income, selling costs, and the ability to hold and dispose of such real estate in the ordinary course of business.

Valuation adjustments may be necessary in the event that effective interest rates, rent-up periods, future economic conditions, and other relevant factors vary significantly from those assumed in valuing the property.

If future evaluations result in a decrease in the value of the property below its carrying value, the reduction will be recognized as an

In evaluating a property for

BRT APARTMENTS CORP.

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NOTE 1—ORGANIZATION, BACKGROUND AND SIGNIFICANT ACCOUNTING POLICIES (continued)

impairment charge.

impairment, various factors are considered, including estimated current and expected operating cash flow from the property during the projected holding period, costs necessary to extend the life or improve the asset, expected capitalization rates, projected stabilized net operating income, selling costs, and the ability to hold and dispose of such real estate in the ordinary course of business.

If future evaluations result in a decrease in the value of the property below its carrying value, the reduction will be recognized as an impairment charge.

The fair values related to the impaired real estate assets are considered to be a level 3 valuation within the fair value hierarchy because they are based on unobservable inputs and are subjective in nature.

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The fair values related to the impaired investments in real estate ventures are considered to be a level 3 valuation within the fair value hierarchy.

Loan receivables

Loan receivables represent preferred equity investments that were funded by the Company with the intent and ability to hold to maturity or payoff.

At the inception of each investment we determine whether such investment should be accounted for as a loan, equity interest or real estate.

We have determined that all such investments are properly accounted for and reported as loans.

Loans receivable are held for investment and may be subordinate to other senior loans.

Loans receivable are reported at their unpaid principal balance, net of any deferred loan costs, and allowance for current expected credit losses (“CECL”).

Unamortized premiums, discounts or deferred loans costs are deferred and amortized over the estimated life of the loan using the effective interest method and recognized in "Loan interest and other income" in the Company’s Consolidated Statement of Operations.

The Company monitors the credit quality of its loans receivable on an ongoing basis and considers indicators of credit quality such as loan payment activity, the estimated fair value of the related property, the seniority of the Company’s loan in relation to other debt and the prospects of the borrower.

Given the small number of loans outstanding, the Company believes the characteristics of these receivables are not sufficiently similar to allow an evaluation as a group for CECL allowance.

As such, all of the Company’s loans are evaluated individually for this purpose.

The Company evaluates the collectability of both principal and interest based upon an assessment of the underlying value of the investment to determine whether these receivables are impaired.

In accordance with accounting guidance, the Company it treating its preferred equity investments as loans.

Despite participating in the expected residual profit, each borrower (i.e., the sponsor/owner of the multi-family property in which the Company made a preferred equity investment) has a cash equity investment substantial to the project that are not funded by the mortgage lender.

As such these arrangements are accounted for as loan receivables.

Allowance for Credit Losses on Loan Receivables

The CECL reserve required under ASU 2016-13 “Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments (Topic 326)” (“ASU 2016-13”), reflects the Company's estimate as of the balance sheet date of potential credit losses related to its loan portfolio.

Changes to the CECL reserve are recognized through a provision for or reversal of current expected credit loss reserve on the Company's consolidated statements of operations.

ASU 2016-13 specifies the reserve should be based on relevant information about past events, including historical loss experience, current loan portfolio, market conditions and reasonable and supportable macroeconomic forecasts for the duration of each loan.

The Company has elected to apply the practical expediant to exclude accrued interest receivable from the amortized cost basis of the receivables.

The Company considers key credit quality indicators in underwriting loans and estimating credit losses, including:

the capitalization of borrowers and sponsors;

the expertise of the sponsors in a particular real estate sector and geographic market;

collateral type;

geographic region;

use and occupancy of the property;

property market value;

loan amount and lien position;

industry risk rating for the same and similar loans;

and prior experience with the sponsor.

Such analyses are completed and reviewed by asset management personnel and evaluated by senior management on at least a quarterly basis, utilizing various

BRT APARTMENTS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2024

NOTE 1—ORGANIZATION, BACKGROUND AND SIGNIFICANT ACCOUNTING POLICIES (continued)

data sources, including, to the extent available, (i) periodic financial data such as property occupancy, rental rates, capitalization and discount rates, (ii) site inspections, (iii) sales and financing comparables, (iv) current credit spreads for refinancing and (v)

other relevant market data.

Ultimate repayment of our Preferred Loan Interests is sensitive to interest rate changes, general economic conditions, liquidity, existence of an active sales market for properties, and availability of replacement financing.

Adjustments to the allowance are recorded on the Company's Consolidated Statements of Operations as "Provision for credit loss".

If the Company has determined that a loan or a portion of the loan is uncollectable, it will write off the uncollectable portion of the loan through an adjustment to its CECL allowance based on the net present value of expected future cash flows.

Write-offs are recorded in the period in which the loan balance is deemed uncollectible based on management’s judgment.

Equity Based Compensation

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Net income is also allocated to the unvested restricted stock outstanding during each period, as the restricted stock is entitled to receive dividends and is therefore considered a participating security.

The RSU's are excluded from the basic earnings per share calculation, as they are not participating securities.

The RSUs are excluded from the basic earnings per share calculation, as they are not participating securities.

Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue shares of common stock were exercised or converted into shares of common stock or resulted in the issuance of shares of common stock that share in the earnings of the Company.

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Restricted cash consists of cash held for construction costs and property improvements for specific joint venture properties as may be required by contractual arrangements

Other assets consist of real estate tax , insurance and replacement escrows (classified as restricted cash within the consolidated statement of cash flows), lease intangibles, tenant receivables, prepaid expenses and other receivables.

Segment Reporting

On January 1, 2024, the Company adopted the FASB ASU No.

2023-07, Segment Reporting – Improvements to Reportable Segments Disclosures , as amended, which enhances disclosures of significant segment expenses regularly provided to the chief operating decision maker.

BRT APARTMENTS CORP.

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NOTE 1—ORGANIZATION, BACKGROUND AND SIGNIFICANT ACCOUNTING POLICIES (continued)

Substantially all of the Company’s real estate assets, at acquisition, are comprised of real estate owned that is leased to tenants on a short-term basis.

Therefore, the Company aggregates real estate assets for reporting purposes and operates in one reportable segment.

The Company’s Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer.

As the Company operates in one reportable segment, the CODM is provided financial reports which include (i) a consolidated and property level income statements (detailing total revenues, total real estate operating expenses and net income).

These financial reports assist the CODM in assessing the Company’s financial performance and in allocating resources appropriately.

Other assets consist of real estate tax , insurance and replacement escrows (all of the foregoing classified as restricted cash within the consolidated statement of cash flows), lease intangibles, tenant receivables, prepaid expenses and other receivables.

Deferred Costs

Fees and costs incurred in connection with multi-family property financings are deferred and amortized over the term of the related debt obligations.

Fees and costs paid related to the successful negotiation of commercial leases are deferred and amortized on a straight-line basis over the terms of the respective leases.

Fees and costs paid related to the successful negotiation of commercial leases are deferred and amortized on a straight-line basis over the terms of the respective leases and are included in other assets on the consolidated balance sheets.

Use of Estimates

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Actual results could differ from those estimates.

Reclassifications

Immaterial Error Correction

During the preparation of financial statements for the current year, it was determined that we were not correctly including the escrow accounts classified within other assets within cash flows from operating activities and cash flows from investing activities on the Consolidated Statements of Cash Flows.

As a result, we have made an immaterial error correction to the prior period to reclassify the deposits and escrows within Cash and Restricted Cash on the Statement of Cash Flows resulting in an increase in net cash from operating activities of $ 425,000 and a decrease in net cash used in investing activities of $ 3,596,000 from what was previously reported.

NOTE 2— REAL ESTATE PROPERTIES

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North Carolina 1 264 4,295 5 %

Missouri 1 174 3,802 4 %

Ohio 1 264 3,935 4 %

Missouri 1 174 3,770 4 %

Other (a) — — 1,595 2 %

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NOTE 3— ACQUISITIONS AND DISPOSITIONS

Acquisitions of Interests in Joint Ventures

During 2023, the Company did not acquire any partnership interests.

During 2022, the Company purchased its partners' remaining interests in 11 joint ventures.

The Company determined that in each acquisition the gross assets acquired are concentrated in a single identifiable asset.

Therefore, these transactions do not meet the definition of a business and are accounted for as asset acquisitions.

Property Dispositions

During the year ended December 31, 2024, the Company sold a cooperative apartment unit located in New York, NY for a sales price of $ 1,050,000 and, after closing costs, recognized a gain of $ 806,000 on the sale.

During the year ended December 31, 2023, the Company sold a cooperative apartment unit located in New York, NY for a sales price of $ 785,000 and, after closing costs, recognized a gain of $ 604,000 on the sale.

BRT APARTMENTS CORP.

2 unchanged sentences

December 31, 2024

NOTE 3—ACQUISITIONS AND DISPOSITIONS (continued)

The following table summarizes these purchases (dollars in thousands):

Buyout Date Property Name Location Units Remaining Interest Purchased Purchase Price (1)

03/23/2022 Verandas at Alamo San Antonio, TX 288 28 % $ 8,721

04/07/2022 Vanguard Heights Creve Coeur, MO 174 22 % 4,880

05/11/2022 Jackson Square Tallahassee, FL 242 20 % 7,215

05/24/2022 Brixworth at Bridge Street Huntsville, AL 208 20 % 10,697

05/26/2022 Woodland Apartments Boerne, TX 120 20 % 3,881

06/30/2022 Grove at River Place Macon, GA 240 20 % 7,485

07/12/2022 Civic I Southaven, MS 392 25 % 18,233

07/12/2022 Civic II Southaven, MS 384 25 % 17,942

07/14/2022 Abbotts Run Wilmington, NC 264 20 % 9,010

07/19/2022 Somerset at Trussville Trussville, AL 328 20 % 10,558

08/03/2022 Magnolia Pointe Madison, AL 204 20 % 7,246

Total 2,844 $ 105,868

____________________________

(1) The purchase price reflects the Company's purchase of its joint venture partner's promote interest in the venture.

Includes $ 3,596 escrows but excludes closing costs of $ 2,191 and operating cash acquired from the joint venture of $ 2,797 .

During 2022, the Company assessed the fair value of the tangible assets of each acquired property as of the applicable acquisition date using estimated building costs between $ 90 and $ 215 per square foot, with a weighted average square foot cost of $ 158 and estimated land costs between $ 4.11 and $ 50.14 per square foot with a weighted average square foot cost of $ 6.65 , which are Level 3 unobservable input in the fair value hierarchy.

The following table summarizes the purchase price allocation of the book values of those properties whose remaining interest was purchased and consolidated in 2022 and is based on the proportionate share of the estimated fair value of the property on the acquisition date (dollars in thousands):

Property Land Building and Improvements Total Land and building Acquisition related lease intangible Total Assets Acquisition related mortgage intangible

Verandas at Alamo $ 3,336 $ 33,465 $ 36,801 $ 797 $ 37,598 $ ( 61 )

Vanguard Heights 5,466 30,826 36,292 508 36,800 578

Jackson Square 3,398 27,167 30,565 634 31,199 283

Brixworth at Bridge Street 1,959 20,080 22,039 321 22,360 —

Woodland Apartments 1,289 12,853 14,142 233 14,375 —

Grove at River Place 2,866 16,416 19,282 396 19,678 136

Civic I 3,646 45,554 49,200 913 50,113 562

Civic II 3,847 46,452 50,299 1,013 51,312 1,254

Abbotts Run 3,468 37,312 40,780 701 41,481 481

Somerset at Trussville 4,095 42,943 47,038 869 47,907 1,090

Magnolia Pointe 2,052 22,023 24,075 503 24,578 396

NOTE 4— RESTRICTED CASH

The restricted cash reflected on the consolidated balance sheets represents funds held by the Company specifically allocated for capital improvements at properties where we have a preferred equity investment;

such funds are not generally available for general corporate purposes.

NOTE 5— LOANS

The Company made preferred equity investments in two separate joint ventures which in turn acquired multifamily properties in the locations identified below.

In accordance with GAAP, these investments are treated as loans.

These investments are unsecured and are subordinate, including the payment of the returns thereon, to the mortgage debt encumbering the property acquired by the applicable joint venture.

Information as to these investments at December 31, 2024 is summarized below (dollars and thousands):

Location Investment Date Annual Return Current Return Hurdle Return Invested Amount Redemption Date Deferred fees

Wilmington, NC October 2024 13 % 6.00 % 7.00 % $ 7,000 November 2031 $ 135

Kennesaw, GA November 2024 13 % 6.50 % 6.50 % 11,250 June 2029 178

$ 18,250 $ 313

These investments provide for (1) an Annual Return ( as set forth in the table above) to the Company, of which the Current Return ( as set forth in the table above) is payable monthly to the extent of remaining cash flow, if any, parri passu or after the sponsor's receipt of its management fees and specified returns on its investment and (2) the total amount invested by the Company, including any unpaid portion of the Current Return and the Hurdle Return, to be payable to the Company, prior to any payments to the sponsor, upon the earlier to occur of certain events ( e.g., sale of the property or the refinancing of the mortgage underlying the property) and the redemption date specified above.

The Current Return is recorded as interest income when it is due from the sponsor and the Hurdle Return is recognized as interest income when it is received.

The Company's exposure to loss is limited to its original Invested Amount (as set forth in the table above).

The following table provides the net carrying value of our loans as of December 31, 2024 (dollars in thousands);

December 31, 2024

Unpaid principal balance $ 18,250

allowance for credit loss ( 270 )

deferred loan fees ( 313 )

Net carrying value $ 17,667

We recorded $ 206,000 of interest income (including loan fee amortization of $ 9,000 ) related to these loans in the year ended December 31, 2024.

As of December 31, 2024, these loans were current in their payment of the Current Return.

BRT APARTMENTS CORP.

2 unchanged sentences

December 31, 2024

NOTE 3—ACQUISITIONS AND DISPOSITIONS (continued)

Property Dispositions

During the year ended December 31, 2023, the Company sold a cooperative apartment unit located in New York, NY for a sales price of $ 785,000 and after closing costs, recognized a gain of $ 604,000 on the sale.

During the year ended December 31, 2022, the Company sold a land parcel located in Daytona, FL for a sales price of $ 4,700,000 and after closing costs, recognized a nominal gain.

NOTE 4— RESTRICTED CASH

The restricted cash reflected on the consolidated balance sheets represents funds held by the Company specifically allocated for capital improvements at joint venture multi-family properties;

such funds are not generally available for general corporate purposes.

NOTE 6— ALLOWANCE FOR CREDIT LOSS

Changes in the Company's allowance for credit loss were as follows for the year ended December 31, 2024

(in thousands):

December 31, 2024

CECL allowance at beginning of year $ —

Provision for credit loss 270

Balance at end of year $ 270

There was no CECL allowance for the year ended December 31, 2023.

NOTE 7— LEASES

5 unchanged sentences

The Company is a lessee under a ground lease in Yonkers, NY which is classified as an operating lease.

The ground lease which was set to expire September 30, 2024, provided for one 21-year renewal option.

The renewal option was exercised in 2023 and the ground lease is scheduled to expire on June 30, 2045.

There are no further renewal options.

The ground lease is scheduled to expire on June 30, 2045.

There are no renewal options.

As of December 31, 2024 , the remaining lease term is 20.5 years.

2 unchanged sentences

As of December 31, 2024, the remaining lease term, including renewal options deemed exercised, is 12.0 years.

As of December 31, 2023 , the Company's right-of-use ("ROU") assets and lease liabilities were $ 2,183,000 and $ 2,318,000 , respectively and as of December 31, 2022, the Company's ROU assets and lease liabilities were $ 2,371,000 and $ 2,472,000 , respectively.

As of December 31, 2024 , the Company's right-of-use ("ROU") assets and lease liabilities were $ 2,003,000 and $ 2,167,000 , respectively and as of December 31, 2023, the Company's ROU assets and lease liabilities were $ 2,183,000 and

$ 2,318,000 , respectively.

The ROU assets and lease liabilities are reported on the consolidated balance sheets in Other assets and Accounts payable and accrued liabilities , respectively.

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NOTE 8— INVESTMENT IN UNCONSOLIDATED VENTURES

At December 31, 2023 and 2022, the Company owned interests in unconsolidated joint ventures that owned seven multi-family properties and an interest in a development property (the "Unconsolidated Properties"), respectively.

The condensed balance sheets below presents information regarding such properties (dollars in thousands):

At December 31, 2024 and 2023, the Company owned interests in unconsolidated joint ventures (the "Unconsolidated Properties") that owns multi-family properties (including Stono Oaks that was in lease-up at December 31, 2024 and that was a development project at December 31, 2023).

The condensed balance sheets below presents information regarding such investments (other than the preferred equity investments) (dollars in thousands):

Real estate properties, net of accumulated depreciation of $ 81,843 and $ 69,970

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___________________________________

(1) Includes work-in-process at December 31, 2023 and 2022 of approximately $ 46,509 and $ 24,335 , respectively, related to the Stono Oaks development project.

(1) Includes work-in-process at December 31, 2023 of approximately $ 46,509 , related to Stono Oaks.

BRT APARTMENTS CORP.

13 unchanged sentences

Other equity earnings 235 126

Impairment of assets — ( 8,553 )

Insurance recoveries — 8,553

Gain on insurance recoveries — 65

3 unchanged sentences

BRT equity in earnings and equity in earnings from sale of unconsolidated joint venture properties $ 1,644 $ 17,037

Purchase of Interest in a Joint Venture

On March 10, 2022, the Company acquired for $ 3,500,000 , a 17.45 % interest in a planned 240 -unit development property located in Johns Island, SC.

In 2023, the Company contributed an additional $ 316,000 to this venture.

In December 2022, the venture recorded an impairment charge of $ 8,553,000 due to a fire at the development.

This loss is covered by insurance and accordingly, the venture recorded an insurance recovery of $ 8,553,000 .

The Company recorded its proportionate share of the impairment charge and the insurance recovery.

As of December 31, 2023, the property is substantially complete and leasing has commenced.

Dispositions of Properties

The table below provides information regarding the disposition of real estate properties by unconsolidated joint ventures in the year ended December 31, 2023 (dollars in thousands):

Location Sale Date Number of Units Sale Price Gain on Sale BRT Share of Gain on Sale BRT Share of Loss of Extinguishment on Debt

Chatham Court and Reflections - Dallas, TX 5/12/2023 494 $ 73,000 $ 38,418 $ 14,744 $ 212

BRT APARTMENTS CORP.

2 unchanged sentences

December 31, 2024

NOTE 6—INVESTMENT IN UNCONSOLIDATED VENTURES (continued)

Dispositions of Properties

The table below provides information regarding the disposition of real estate properties by unconsolidated joint ventures in the year ended December 31, 2023 and 2022 (dollars in thousands):

Location Sale Date Number of Units Sale Price Gain on Sale BRT Share of Gain on Sale BRT Share of Loss of Extinguishment on Debt

Chatham Court and Reflections - Dallas, TX 5/12/2023 494 $ 73,000 $ 38,418 $ 14,744 $ 212

Verandas at Shavano - San Antonio, TX 2/8/2022 288 $ 53,750 $ 23,652 $ 12,961 $ —

Reatreat at Cinco Ranch - Katy, TX 6/14/2022 268 68,300 30,595 17,378 686

The Vive - Kannapolis, NC 6/30/2022 312 91,250 47,086 22,720 787

Waters Edge - Columbia, SC 8/31/2022 204 32,400 16,937 11,472 388

Total 2022 1,072 $ 245,700 $ 118,270 $ 64,531 $ 1,861

Joint Venture Buyouts

In 2022, the Company purchased its venture partners' remaining interests in joint ventures that owned 11 multi-family properties.

The operations and accounts of these joint ventures which, as a result of such purchases, are wholly-owned by the Company are consolidated into the operations and accounts of the Company as of their respective acquisition dates.

See Note 3 for information regarding these buyouts.

NOTE 9— DEBT OBLIGATIONS

7 unchanged sentences

(1) Excludes $ 374 and $ 289 at December 31, 2024 and 2023, respectively, of deferred fees related to our credit facility which is reflected in Other Assets.

BRT APARTMENTS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2023

NOTE 7—DEBT OBLIGATIONS (continued)

A summary of activity in property debt, net of deferred loan fees, for the year ended December 31, 2024 is as follows (dollars in thousands):

5 unchanged sentences

Balance at December 31, 2024 $ 446,471

At December 31, 2023, $ 426,436,000 of mortgage debt with a weighted average interest rate of 4.02 % and a weighted average remaining term to maturity of 7.0 years is outstanding on 18 of the Company's multi-family properties.

At December 31, 2024, $ 450,481,000 of mortgage debt, all of which is fixed rate, with a weighted average interest rate of 4.09 % and a weighted average remaining term to maturity of 6.1 years, is outstanding on 19 of the Company's multi-family properties.

Scheduled principal repayments for the periods indicated are as follows (dollars in thousands):

Year Ending December 31, Scheduled Principal Payments

Thereafter 241,737

The following table summarizes the information regarding the mortgages relating to the properties in which BRT purchased the remaining interests of its joint venture partners during the twelve months ended December 31, 2022 (dollars in thousands):

Property Name Location Debt at Purchase Date (a) Interest Rate Maturity Date Interest only through

Verandas at Alamo San Antonio, TX $ 27,000 3.64 % Oct 2029 Oct 2024

Vanguard Heights Creve Coeur, MO 29,700 4.41 % July 2031 June 2025

Jackson Square Tallahassee, FL 21,524 4.19 % Sept 2027 Sept 2022

Brixworth at Bridge Street (b) Huntsville, AL 11,147 4.25 % June 2032 Maturity

The Woodland Apartments Boerne, TX 7,914 4.74 % Feb 2026 N/A

Grove at River Place (c) Macon, GA 11,426 4.39 % Feb 2026 N/A

Civic I Southaven, MS 27,389 4.24 % March 2026 N/A

Civic II Southaven, MS 30,105 3.73 % Sept 2026 N/A

Abbotts Run Wilmington, NC 23,160 4.71 % July 2030 July 2025

Somerset at Trussville Trussville, AL 32,250 4.19 % June 2029 May 2025

Magnolia Pointe Madison, AL 15,000 4.08 % Jan 2028 Dec 2022

2025 $ 19,860

(a) Excludes fair value adjustments of $ 4,719 determined as part of the purchase price allocation.

(b) The original mortgage debt of $ 11,147 was refinanced with new ten-year mortgage debt of $ 18,952 immediately following the buyout.

The interest rate, maturity date and

interest - only terms reflect the new mortgage.

(c ) Includes a supplemental mortgage of $ 1,056 which was paid off immediately following the buyout.

Thereafter 212,840

BRT APARTMENTS CORP.

6 unchanged sentences

Thereafter 15

Total $ 1,387

On August 22, 2024, the Company obtained mortgage debt of $ 27,375,000 on its Woodland Trails - LaGrange, GA multi-family property;

such mortgage debt matures in September 2031, bears an interest rate of 5.22 % and is interest only for the term of the mortgage.

On February 24, 2023, the Company obtained mortgage debt of $ 21,173,000 on its Silvana Oaks - North Charleston, SC multi-family property;

such mortgage debt matures in March 2033, bears an interest rate of 4.45 % and is interest only for the term of the mortgage.

The Company paid off the following debt during the year ended December 31, 2022 (dollars in thousands):

Property Name Location Mortgage Payoff Interest Rate Payoff Date Maturity Date

Avalon Pensacola, FL $ 14,558 4.29 % 1/26/2022 3/1/2022

Silvana Oaks N.

Charleston, SC 14,904 3.79 % 10/28/2022 11/1/2022

Total $ 29,462

Interest expense for the years ended December 31, 2024 and 2023, which includes amortization of deferred loans fees and fair value adjustments, was $ 19,372,000 and $ 18,819,000 respectively.

Credit Facility

The Company's credit facility with an affiliate of Valley National Bank ("VNB"), as amended, allows the Company to borrow, subject to compliance with borrowing base requirements and other conditions, up to $ 60,000,000 .

On July 9, 2024, the Company's credit facility, with an affiliate of Valley National Bank ("VNB"), was amended to, among other things, reduce the borrowing capacity from $ 60,000,000 to $ 40,000,000 , extend the facility's maturity from September 2025 to September 2027 and revise certain financial and other covenants.

The facility allows the Company to borrow, subject to compliance with borrowing base requirements and other conditions, up to $ 40,000,000 .

The facility can be used to facilitate the acquisition of multi-family properties, repay mortgage debt secured by multi family properties and for operating expense ( i.e., working capital (including dividend payments));

provided that no more than $ 25,000,000 may be used for operating expenses.

The facility, which was amended in August 2023 to change the interest rate from a prime based rate to a SOFR based rate, is secured by the cash available in certain cash accounts maintained by the Company at VNB and the Company's pledge of its interests in the entities that own the unencumbered properties used in calculating the borrowing base.

The interest rate, which adjusts monthly and is subject to a floor of 6.00 %, equals one-month term SOFR plus 250 basis points.

The interest rate in effect as of December 31, 2023 and March 1, 2024 was 7.85 % and 7.82 %, respectively.

The facility is secured by the cash available at VNB and the Company's pledge of the interests in the entities that own the properties, and matures in September 2027.

The interest rate on the credit facility, which adjusts monthly and is subject to a floor of 6.00 %, equals one-month term SOFR plus 250 basis points.

The interest rate in effect as of December 31, 2024 and February 28, 2025 was 6.96 % and 6.83 %, respectively.

There is an unused facility fee of 0.25 % per annum on the total amount committed by VNB and unused by the Company.

The facility matures in September 2025.

At December 31, 2024, the Company is in compliance in all material respects with its obligations under the facility.

At December 31, 2023, and March 1, 2024, there was no outstanding balance on the facility and $ 60,000,000 was available to be borrowed.

At December 31, 2022, there was an outstanding balance of $ 19,000,000 on the facility.

The average balance outstanding on the facility for 2023 and 2022 was $ 2,811,000 and $ 7,907,000 , respectively.

At December 31, 2024, and February 28, 2025, there was no outstanding balance on the facility and $ 40,000,000 was available to be borrowed.

At December 31, 2023, there was no outstanding balance of on the facility.

There was no average balance outstanding on the facility for 2024 and for 2023 it was $ 2,811,000 .

Interest expense for the years ended December 31, 2024 and 2023, which includes amortization of deferred financing costs and unused fees, was $ 365,000 and $ 574,000 , respectively.

Deferred costs of $ 374,000 and $ 289,000 are recorded in Other Assets on the consolidated balance sheets at December 31, 2024 and 2023, respectively.

BRT APARTMENTS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2023

NOTE 7—DEBT OBLIGATIONS (continued)

Junior Subordinated Notes

3 unchanged sentences

The notes mature April 30, 2036.

BRT APARTMENTS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2024

NOTE 9—DEBT OBLIGATIONS (continued)

The notes require interest only payments through the maturity date, at which time repayment of all outstanding principal and unpaid interest is due.

10 unchanged sentences

As of December 31, 2024, tax returns for the calendar years 2021 through 2023 remain subject to examination by the Internal Revenue Service and various state and local tax jurisdictions.

During the years ended December 31, 2023 and 2022, the Company recorded $ 54,000 and $ 821,000 , respectively, of state franchise tax expense, net of refunds, relating to the 2023 and 2022 calendar years.

During the years ended December 31, 2024 and 2023, the Company recorded $( 226,000 ) and $ 54,000 , respectively, of state franchise tax (benefit) expense, net of refunds, relating to the 2024 and 2023 calendar years.

Earnings and profits, which determine the taxability of dividends to stockholders, differs from net income reported for financial statement purposes due to various items, including timing differences related to impairment charges, depreciation methods and carrying values.

3 unchanged sentences

Stock Based Compensation

In 2022, the Company's board of directors adopted and the stockholders' approved the 2022 Incentive Plan (the "2022 Plan").

In 2024, the Company's stockholders approved the 2024 Incentive Plan (the "2024 Plan").

This plan permits the Company to grant:

(i) stock options, restricted stock, restricted stock units, performance shares awards and any one or more of the foregoing, up to a maximum of 1,000,000 shares;

(i) stock options, restricted stock, restricted stock units, performance shares awards and any one or more of the foregoing, for up to a maximum of 1,000,000 shares;

and (ii) cash settled dividend equivalent rights in tandem with the grant of restricted stock units and certain performance based awards.

Each of the Company's Amended and Restated 2020 Incentive Plan (the "2020 Plan") and the Amended and Restated 2018 Incentive Plan (the "2018 Plan";

and together with the 2020 Plan, the "Prior Plans") authorized the Company to grant up to 1,000,000 and 600,000 , respectively, of shares of common stock pursuant to the same type of awards available under the 2022 Plan.

As of December 31, 2024, 798,175 shares are available for issuance pursuant to awards under the 2024 Plan.

Awards to acquire 600,837 shares of common stock are outstanding under the 2024 Plan, the 2022 Incentive Plan (the "2022 Plan"), the 2020 Amended and Restated Incentive Plan (the "2020 Plan"), and the 2018 Amended and Restated Incentive Plan (the "2018 Plan;

and together with the 2020 Plan and the 2022 Plan, the "Prior Plans").

No further awards may be granted pursuant to the Prior Plans.

BRT APARTMENTS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2023

NOTE 9—STOCKHOLDERS' EQUITY (continued)

Incentive Plan 2022 Plan 2020 Plan 2018 Plan

The table below reflects activity under the 2024 Plan and the Prior Plans:

Incentive Plan 2024 Plan 2022 Plan 2020 Plan 2018 Plan

Maximum shares 1,000,000 1,000,000 1,000,000 600,000

4 unchanged sentences

Remaining shares available to be issued 798,175 (1) — — —

(1) Excludes 166,439 shares of restricted shares issued in January 2024.

(1) Excludes 165,408 restricted shares issued in January 2025.

BRT APARTMENTS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2024

NOTE 11—STOCKHOLDERS' EQUITY (continued)

Restricted Stock

In January 2023 and January 2022, the Company granted shares of restricted stock pursuant to the 2022 Plan and 2020 Plan.

In January 2024 and January 2023, the Company granted shares of restricted stock pursuant to the 2022 Plan and 2020 Plan, respectively.

The shares of restricted stock generally vest five years from the date of grant and under specified circumstances, including a change in control, may vest earlier.

12 unchanged sentences

Unearned compensation at period end $ 6,660 $ 7,484

BRT APARTMENTS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2023

NOTE 9—STOCKHOLDERS' EQUITY (continued)

Restricted Stock Units

In June 2023 and June 2022, the Company issued restricted stock units (the "RSUs") to acquire shares of common stock.

In July 2024 and June 2023, the Company, pursuant to the 2024 Plan and the 2022 Plan, respectively, issued restricted stock units (the "RSUs") to acquire shares of common stock.

The RSUs granted entitle the recipients, subject to continued service during the applicable performance period, to (i) shares of common stock, (the "TSR Award"), based on achieving, during the three-year performance period (the "Measurement Period"), specified levels in compounded annual growth rate ("CAGR") in total stockholder return (“TSR”), and (ii) shares of common stock based on achieving, during the Measurement Period, specified levels in CAGR in adjusted funds from operations (the "AFFO Award"), in each case as determined pursuant to the award agreement.

2 unchanged sentences

The shares underlying the RSUs are not participating securities but are contingently issuable shares.

BRT APARTMENTS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2024

NOTE 11—STOCKHOLDERS' EQUITY (continued)

The tables below presents activity and changes in the number of RSUs under the Company's equity incentive plans, compensation expense and unearned compensation for the periods indicated (dollars in thousands):

5 unchanged sentences

Total RSUs granted in applicable year 215,325 214,990

Vested ( 123,384 ) —

Forfeitures ( 39,656 ) ( 1,239 )

Expired ( 85,938 ) —

Total unvested RSUs at end of year 600,837 634,490

9 unchanged sentences

Expense is not recognized on RSUs which the Company does not expect to vest because the performance conditions are not expected to be satisfied.

BRT APARTMENTS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2023

NOTE 9—STOCKHOLDERS' EQUITY (continued)

Performance assumptions are re-evaluated quarterly.The total amount recorded at the grant date as deferred compensation with respect to the AFFO awards granted in 2024 and 2023 was $ 1,132,000 and $ 1,879,000 respectively.

The following table reflects the compensation expense recorded for all incentive plans (dollars in thousands):

The following table reflects the compensation expense recorded for all equity incentive plans (dollars in thousands):

Year Ended December 31,

2 unchanged sentences

Total compensation $ 4,877 $ 4,768

BRT APARTMENTS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2024

NOTE 11—STOCKHOLDERS' EQUITY (continued)

Earnings Per Share

2 unchanged sentences

Numerator for basic and diluted earnings per share:

Net income $ 4,015 $ 50,099

Net (loss) income $ ( 9,636 ) $ 4,015

Deduct (earnings) attributable to non-controlling interests ( 155 ) ( 142 )

Deduct (earnings) allocated to unvested restricted stock ( 953 ) ( 2,472 )

Net income available for common stockholders:

Deduct loss (earnings) allocated to unvested restricted stock 493 ( 953 )

Net (loss) income available for common stockholders:

basic and diluted $ ( 9,298 ) $ 2,920

5 unchanged sentences

Weighted average number of shares 17,752,226 17,948,276

Earnings per common share, basic $ 0.16 $ 2.67

Earnings per common share, diluted $ 0.16 $ 2.66

(Loss) earnings per common share, basic $ ( 0.52 ) $ 0.16

(Loss) earnings per common share, diluted $ ( 0.52 ) $ 0.16

Equity Distribution Agreements

Effective as of May 12, 2023, the Company (i) terminated the equity distribution agreements dated March 18, 2022 and (ii) entered into equity distribution agreements with three sales agents to sell up to $ 40,000,000 of shares of its common stock from time-to-time in an at-the-market offering.

During the year ended December 31, 2023, the Company did not sell any shares.

During the year ended December 31, 2022 the Company sold 347,815 shares, for an aggregate sales price of $ 7,870,000 , before commissions and fees of $ 98,000 .

In May 2023, the Company (i) terminated the equity distribution agreements dated March 18, 2022 and (ii) entered into equity distribution agreements with three sales agents to sell up to $ 40,000,000 of shares of its common stock from time-to-time in an at-the-market offering.

During the years ended December 31, 2024 and 2023, the Company did not sell any shares.

At December 31, 2024, the Company is authorized to sell an aggregate of $ 40,000,000 of shares pursuant to the equity distribution agreements.

1 unchanged sentence

Pursuant to the Company’s repurchase program(s), as amended from time to time, the Company is authorized to repurchase shares of its common stock through open-market transactions, privately negotiated transactions, or otherwise.

During the year ended December 31, 2024, the Company purchased 193,529 shares of common stock for total consideration of approximately $ 3,495,000 , net of commissions of $ 12,000 .

During the year ended December 31,2023, the Company repurchased 779,423 shares of common stock for total consideration of approximately $ 14,397,000 , net of commissions of $ 44,000 .

As of December 31, 2024, the Company is authorized to repurchase approximately $ 6,089,000 of shares of common stock.

From January 1, 2025 through February 28, 2025, the Company repurchased 65,018 shares of common stock at an average price per share of $ 17.49 for an aggregate cost of $ 1,137,000 .

At February 28, 2025, the Company is authorized to repurchase up to $ 4,952,000 of shares of common stock through December 31, 2025.

On March 11, 2025, the Board of Directors authorized the repurchase of up to $ 10,000,000 shares of stock through December 31, 2026.

BRT APARTMENTS CORP.

3 unchanged sentences

NOTE 11—STOCKHOLDERS' EQUITY (continued)

In June 2023, the Board of Directors extended the term of the Company's share repurchase program from December 31, 2023 to December 31, 2025 and increased the existing repurchase authorization from $ 5,000,000 to $ 10,000,000 of shares.

In August 2023 and December 2023, the Board of Directors, replenished the authorization by approximately $ 6,750,000 and $ 7,230,000 , respectively, to increase the repurchase authorization as of such date to $ 10,000,000 of shares.

During the year ended December 31,2023, the Company repurchased 779,423 shares of common stock for total consideration of approximately $ 14,397,000 , net of commissions of $ 44,000 .

As of December 31, 2023, the Company is authorized to repurchase approximately $ 9,584,000 of shares of common stock.

From January 1, 2024 through March 1, 2024, the Company repurchased 123,061 shares of common stock at an average price per share of $ 18.43 for an aggregate cost of $ 2,268,000 .

At March 1, 2024, the Company is authorized to repurchase up to $ 7,316,000 of shares of common stock.

During the twelve months ended December 31, 2022, the Company did not repurchase any shares of common stock.

Dividend Reinvestment Plan

The Dividend Reinvestment Plan (the “DRP”), among other things, provides stockholders with the opportunity to reinvest all or a portion of their cash dividends paid on the Company’s common stock in additional shares of its common stock, at a discount, determined in the Company’s sole discretion, of up to 5 % from the market price for the common stock (as such price is calculated pursuant to the DRP).

The Dividend Reinvestment Plan (the “DRP”), which was reauthorized in 2024, among other things, provides stockholders with the opportunity to reinvest all or a portion of their cash dividends paid on the Company’s common stock in additional shares of its common stock, at a discount, determined in the Company’s sole discretion, of up to 5 % from the market price for the common stock (as such price is calculated pursuant to the DRP).

The discount from the market price as of December 31, 2024 was 3 %.

In the year ended December 31, 2024 and 2023, the Company issued 211,135 and 165,228 shares in lieu of cash dividends of $ 3,626,000 and $ 3,034,000 , respectively.

In March 2024, the Board of Directors reauthorized the DRP.

NOTE 12— RELATED PARTY TRANSACTIONS

34 unchanged sentences

The carrying amounts reported on the balance sheets for these instruments approximate their fair value due to the short term nature of these accounts.

Loan Receivables:

At December 31, 2024, the estimated fair value of the Company's loan receivables, equaled their carrying value due to their recent origination.

Junior subordinated notes:

13 unchanged sentences

At December 31, 2024 and 2023, the Company had no financial assets or liabilities measured at fair value.

Long-lived assets

The Company reviews its investments in real estate when events or circumstances change indicating the carry value of the investment may not be recoverable.

In the evaluation of an investment for impairment, many factors are considered, including estimated current and expected cash flows from the asset during the projected hold period, costs necessary to extend the life of the asset, expected capitalization rates, and projected stabilized net operating income and the ability to hold or dispose of the asset in the ordinary course of business.

BRT APARTMENTS CORP.

4 unchanged sentences

From time to time, the Company and/or its subsidiaries are parties to legal proceedings that arise in the ordinary course of business, and in particular, personal injury claims involving the operations of the Company's properties.

Although management believes that the primary and umbrella insurance coverage maintained with respect to such properties is sufficient to cover claims for compensatory damages, many of these personal injury claims also assert claims for exemplary ( i.e punitive) damages.

Although management believes that the primary and umbrella insurance coverage maintained with respect to such properties is sufficient to cover

NOTE 14—COMMITMENT AND CONTINGENCIES (continued)

claims for compensatory damages, many of these personal injury claims also assert claims for exemplary ( i.e punitive) damages.

Generally, insurance does not cover claims for punitive or exemplary damages.

The Company was one of several defendants in a wrongful death lawsuit which was settled.

In connection with the settlement, the Company paid $ 325,000 which payment was funded by the Company's insurance carrier.

The Company maintains a non-contributory defined contribution pension plan covering eligible employees and officers.

3 unchanged sentences

At December 31, 2024, the Company is the carve-out guarantor with respect to mortgage debt in principal amount of $ 443,107,000 at 18 multi-family properties.

NOTE 15— NEW ACCOUNTING PRONOUNCEMENT

In November 2024, the FASB issued ASU No.

2024 – 03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220–40):

Disaggregation of Income Statement Expenses.

This ASU aims to enhance financial reporting transparency by requiring disaggregated disclosure of income statement expenses for public business entities ("PBEs").

The ASU does not change the expense captions an entity presents on the face of the income statement;

rather, it requires disaggregation of certain expense captions into specified categories within the footnotes to the financial statements.

ASU 2024-03 adds ASC 220-40 to require a footnote disclosure about specific expenses by requiring PBEs to disaggregate, in a tabular presentation, each relevant expense caption on the face of the income statement that includes any of the following natural expenses:

(1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) depreciation, depletion, and amortization (DD&A) recognized as part of oil- and gas-producing activities or other types of depletion expenses.

The tabular disclosure would also include certain other expenses, when applicable.

The ASU does not change or remove existing expense disclosure requirements;

however, it may affect where that information appears in the footnotes to the financial statements.

2024 – 03 is applicable for fiscal years beginning after December 15, 2026.

The Company is evaluating the new guidance to determine impact on the Company’s consolidated financial statements.

BRT APARTMENTS CORP.

5 unchanged sentences

April - June 3rd Quarter

July - September 4th Quarter

July - Sept 4th Quarter

Oct - Dec Total

5 unchanged sentences

General and administrative 4,152 3,813 3,811 3,819 15,595

Provision for credit loss — — — 270 270

Depreciation 6,435 6,466 6,499 6,526 25,926

2 unchanged sentences

Equity in earnings of unconsolidated joint ventures 228 389 369 658 1,644

Equity in earnings from sale of unconsolidated joint venture properties — 14,744 — — 14,744

Gain on sale of real estate — — — 806 806

Casualty loss — — — ( 323 ) ( 323 )

Insurance recovery of casualty loss — 215 261 317 793

Gain on insurance recoveries 240 — — — 240

Income (loss) income from continuing operations ( 3,058 ) ( 2,374 ) ( 2,477 ) ( 1,953 ) ( 9,862 )

13 unchanged sentences

April - June 3rd Quarter

July - September 4th Quarter

July - Sept 4th Quarter

Oct - Dec Total

Rental and other revenue $ 22,939 $ 23,255 $ 23,510 $ 23,365 $ 93,069

Other income 4 2 6 — 12

Interest and other income — 63 342 143 548

Total revenues 22,939 23,318 23,852 23,508 93,617

2 unchanged sentences

General and administrative 4,055 3,848 4,017 3,513 15,433

Impairment charge — — — — —

Depreciation 8,008 7,543 6,544 6,389 28,484

1 unchanged sentence

Total revenues less total expenses ( 5,041 ) ( 4,134 ) ( 2,873 ) ( 2,234 ) ( 14,282 )

Equity in earnings (loss) of unconsolidated joint ventures 1,230 ( 50 ) 135 580 1,895

Equity in earnings of unconsolidated joint ventures 815 464 426 588 2,293

Equity in earnings from sale of unconsolidated joint venture properties — 14,744 — — 14,744

3 unchanged sentences

Gain on insurance recoveries 240 — — — 240

Loss on extinguishment of debt — ( 563 ) — — ( 563 )

Income (loss) from continuing operations ( 3,986 ) 11,289 ( 1,582 ) ( 1,652 ) 4,069

55 unchanged sentences

Capital improvements 6,152 9,643

9,643 376,808

Capitalized development expenses and carrying costs — —

Sales 147 106

2 unchanged sentences

Balance at end of year $ 615,915 $ 635,836

BRT APARTMENTS CORP.

AND SUBSIDIARIES

SCHEDULE IV—MORTGAGE LOANS ON REAL ESTATE

DECEMBER 31, 2024

(Dollars in thousands)

Description Interest Rate Final Maturity Date Periodic Payment Terms Prior Liens Face Amount of Mortgages Carrying Value of Mortgages Principal Amount of Loans subject to delinquent principal or interest

Multi-Family, Wilmington, NC 6 % November 2031 Current Return monthly;principal at maturity $ 30,191 $ 7,000 $ 6,763 $ —

Multi-Family, Kennesaw, GA 7 % June 2029 Current Return monthly;principal at maturity 21,123 11,250 10,904 —

Total $ 18,250 $ 17,667 $ —

See notes 1,5 and 6 to the consolidated financial statements.

BRT APARTMENTS CORP.

AND SUBSIDIARIES

SCHEDULE IV—MORTGAGE LOANS ON REAL ESTATE

DECEMBER 31, 2024

Notes to the schedule:

(a) The following summary reconciles mortgage loans at their carrying values:

Balance at beginning of year $ —

New loan receivables 18,250

Deferred loan fee income amortization 9

Deferred fees 322

Provision for credit loss 270

Balance at end of year $ 17,667

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures