What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-03-09 compared with 2025-02-11 · 151 added, 243 removed, 754 unchanged (34% of the section changed)

53 unchanged sentences

2002 Stock Incentive Plan of FSP Corp.

Second Amendment to Credit Agreement, dated February 21, 2024, among FSP Corp., Bank of America, N.A.

and the other parties thereto

Second Amendment to Second Amended and Restated Credit Agreement, dated February 21, 2024, among FSP Corp., Bank of Montreal and the other parties thereto.

First Amendment to Note Purchase Agreement, dated February 21, 2024, among FSP Corp.

and the other parties named therein as purchasers.

First Amendment to Credit Agreement, dated February 10, 2023, among FSP Corp., Bank of America, N.A.

and the other parties thereto.

First Amendment to Second Amended and Restated Credit Agreement, dated February 10, 2023, among FSP Corp., Bank of Montreal and the other parties thereto.

Credit Agreement, dated January 10, 2022, among FSP Corp., Bank of America, N.A.

and the other parties thereto.

Joinder and Increase Agreement, dated February 10, 2022, among FSP Corp., BankUnited N.A.

and Bank of America, N.A., as administrative agent.

Second Amended and Restated Credit Agreement, dated September 27, 2018, among FSP Corp., Bank of Montreal and the other parties thereto.

Note Purchase Agreement, dated October 24, 2017, among FSP Corp.

and the other parties named therein as purchasers.

Credit Agreement, dated February 26, 2026, among FSP Corp., Alter Domus (US) LLC and the lenders party thereto

Form of Retention Agreement.

1 unchanged sentence

Cooperation Agreement, dated as of November 27, 2024, by and among FSP Corp., Converium Capital Inc., Converium Capital Master Fund LP, Converium PGEQ Multi-Strategy Fund L.P., Erez REIT Opportunities LP and Erez Asset Management LLC.

Letter Agreement, dated October 15, 2025, by and among FSP Corp., Converium Capital Inc., Converium Capital Master Fund LP and Converium PGEQ Multi-Strategy Fund L.P.

Insider Trading Policy.

19 unchanged sentences

Incorporated by reference to Exhibit 10.1 to FSP Corp.’s Annual Report on Form 10-K, filed on March 29, 2002 (File No.

Incorporated by reference to Exhibit 10.2 to FSP Corp.’s Annual Report on Form 10-K, filed on February 26, 2024 (File No.

Incorporated by reference to Exhibit 10.3 to FSP Corp.’s Annual Report on Form 10-K, filed on February 26, 2024 (File No.

Incorporated by reference to Exhibit 10.1 to FSP Corp.’s Current Report on Form 8-K, filed on March 4, 2026 (File No.

Incorporated by reference to Exhibit 10.5 to FSP Corp.’s Annual Report on Form 10-K, filed on February 24, 2006 (File No.

Incorporated by reference to Exhibit 99.2 to FSP Corp.’s Current Report on Form 8-K, filed on February 8, 2006 (File No.

Incorporated by reference to Exhibit 10.2 to FSP Corp.’s Current Report on Form 8-K, filed on February 10, 2023 (File No.

Incorporated by reference to Exhibit 10.1 to FSP Corp.’s Current Report on Form 8-K, filed on January 12, 2022 (File No.

Incorporated by reference to Exhibit 10.3 to FSP Corp.’s Annual Report on Form 10-K, filed on February 15, 2022 (File No.

Incorporated by reference to Exhibit 10.1 to FSP Corp.’s Current Report on Form 8-K, filed on September 27, 2018 (File No.

Incorporated by reference to Exhibit 10.1 to FSP Corp.’s Current Report on Form 8-K, filed on November 27, 2024 (File No.

Incorporated by reference to Exhibit 10.2 to FSP Corp.’s Current Report on Form 8-K, filed on October 15, 2025 (File No.

Incorporated by reference to Exhibit 19.1 to FSP Corp.’s Annual Report on Form 10-K, filed on February 11, 2025 (File No.

Incorporated by reference to Exhibit 99.2 to FSP Corp.’s Current Report on Form 8-K, filed on February 8, 2006 (File No.

Incorporated by reference to Exhibit 10.1 to FSP Corp.’s Current Report on Form 8-K, filed on November 27, 2024 (File No.

Incorporated by reference to Exhibit 97 to FSP Corp.’s Annual Report on Form 10-K, filed on February 26, 2024 (File No.

3 unchanged sentences

Not applicable.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf as of February 11, 2025 by the undersigned, thereunto duly authorized.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf as of March 9, 2026 by the undersigned, thereunto duly authorized.

FRANKLIN STREET PROPERTIES CORP.

4 unchanged sentences

Chief Executive Officer and Director (Principal Executive Officer)

February 11, 2025

March 9, 2026

Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)

February 11, 2025

/s/ Kenneth A.

February 11, 2025

March 9, 2026

/s/ Dennis J.

February 11, 2025

March 9, 2026

/s/ Georgia Murray

February 11, 2025

March 9, 2026

Georgia Murray

/s/ Bruce Schanzer

February 11, 2025

Bruce Schanzer

/s/ Jennifer Bitterman

March 9, 2026

Jennifer Bitterman

/s/ Milton P.

February 11, 2025

March 9, 2026

Franklin Street Properties Corp.

16 unchanged sentences

(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024 and the related notes and financial statement schedules listed in the index at Item 15(a)(2) and our report dated February 11, 2025 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025 and the related notes and financial statement schedules listed in the index at Item 15(a)(2) and our report dated March 9, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

16 unchanged sentences

Boston, Massachusetts

February 11, 2025

March 9, 2026

Report of Independent Registered Public Accounting Firm

5 unchanged sentences

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 11, 2025 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 9, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

28 unchanged sentences

Boston, Massachusetts

February 11, 2025

March 9, 2026

Franklin Street Properties Corp.

2 unchanged sentences

Real estate assets:

Land (amounts related to variable interest entities ("VIEs") of $ 6,416 and $ 6,416 at December 31, 2024 and December 31, 2023, respectively)

Buildings and improvements (amounts related to VIEs of $ 13,279 and $ 13,279 at December 31, 2024 and December 31, 2023, respectively)

Land (amounts related to variable interest entities ("VIEs") of $ 6,416 at December 31, 2024)

Buildings and improvements (amounts related to VIEs of $ 13,279 at December 31, 2024)

Fixtures and equipment

Less accumulated depreciation (amounts related to VIEs of $ 682 and $ 341 at December 31, 2024 and December 31, 2023, respectively)

Real estate assets, net (amounts related to VIEs of $ 19,013 and $ 19,354 at December 31, 2024 and December 31, 2023, respectively)

Acquired real estate leases, less accumulated amortization of $ 13,613 and $ 20,413 , respectively (amounts related to VIEs of $ 67 and $ 305 , less accumulated amortization of $ 35 and $ 222 at December 31, 2024 and December 31, 2023, respectively)

Asset held for sale

Cash, cash equivalents and restricted cash (amounts related to VIEs of $ 1,314 and $ 2,167 at December 31, 2024 and December 31, 2023, respectively)

Less accumulated depreciation (amounts related to VIEs of $ 682 at December 31, 2024)

Real estate assets, net (amounts related to VIEs of $ 19,013 at December 31, 2024)

Acquired real estate leases, less accumulated amortization of $ 14,648 and $ 13,613 , respectively (amounts related to VIEs of $ 67 less accumulated amortization of $ 35 at December 31, 2024)

Cash, cash equivalents and restricted cash (amounts related to VIEs of $ 1,314 at December 31, 2024)

Tenant rent receivables

8 unchanged sentences

Liabilities and Stockholders’ Equity:

Bank note payable

Term loans payable, less unamortized financing costs of $ 441 and $ 2,220 , respectively

Series A & Series B Senior Notes, less unamortized financing costs of $ 236 and $ 1,191 , respectively

Accounts payable and accrued expenses (amounts related to VIEs of $ 534 and $ 590 at December 31, 2024 and December 31, 2023, respectively)

Accounts payable and accrued expenses (amounts related to VIEs of $ 534 at December 31, 2024)

Accrued compensation

8 unchanged sentences

Additional paid-in capital

Accumulated other comprehensive income

Distributions in excess of accumulated earnings

6 unchanged sentences

(in thousands, except per share amounts)

Related party revenue:

Management fees and interest income from loans

Total revenues

6 unchanged sentences

Gain on consolidation of Sponsored REIT

Impairment and loan loss reserve

Gain (loss) on sale of properties and impairment of assets held for sale, net

Loss on sale of properties and impairment of assets held for sale, net

Interest income

Income (loss) before taxes

Net income (loss)

Loss before taxes

Weighted average number of shares outstanding, basic and diluted

Net income (loss) per share, basic and diluted

Net loss per share, basic and diluted

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

2 unchanged sentences

(in thousands)

Net income (loss)

Other comprehensive income (loss):

Other comprehensive loss:

Unrealized gain on derivative financial instruments

Reclassification from accumulated other comprehensive income into interest expense

Total other comprehensive income (loss)

Comprehensive income (loss)

Total other comprehensive loss

Comprehensive loss

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

8 unchanged sentences

Comprehensive income

Repurchased shares

Shares issued for:

3 unchanged sentences

Comprehensive loss

Repurchased shares

Shares issued for:

3 unchanged sentences

Comprehensive loss

Repurchased shares

Shares issued for:

8 unchanged sentences

Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization expense

4 unchanged sentences

Gain on consolidation of Sponsored REIT

Impairment and loan loss reserve

(Gain) loss on sale of properties and impairment of assets held for sale, net

Loss on sale of properties and impairment of assets held for sale, net

Changes in operating assets and liabilities:

12 unchanged sentences

Proceeds received from sales of properties

Net cash provided by investing activities

Net cash provided by (used in) investing activities

Cash flows from financing activities:

1 unchanged sentence

Proceeds received from termination of interest rate swap

Stock repurchases

Borrowings under Bank note payable

24 unchanged sentences

FSP Property Management LLC provides asset management and property management services.

The Company also has a non-controlling common stock interest in the corporation that is the sole member of FSP Monument Circle LLC, which corporation was organized to operate as a real estate investment trust (“Monument Circle” or the “Sponsored REIT”).

As of December 31, 2024, the Company owned and operated a portfolio of real estate consisting of 14 operating properties, and the Sponsored REIT, which was consolidated effective January 1, 2023.

As of December 31, 2025, the Company owned and operated a portfolio of real estate consisting of 14 operating properties.

The Company may pursue, on a selective basis, the sale of its properties in order to take advantage of the value creation and demand for its properties, for geographic, property specific reasons or for other general corporate purposes.

19 unchanged sentences

The Company determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and considers that conclusion upon a reconsideration event.

As of January 1, 2023, the Company’s relationship with the Sponsored REIT was considered a VIE and the Company became the primary beneficiary.

Upon this reconsideration event, the entity is included within the Company’s consolidated financial statements and all intercompany accounts and transactions have been eliminated in consolidation.

As of January 1, 2023, the Company’s relationship with FSP Monument Circle LLC, which corporation was organized to operate as a real estate investment trust (“Monument Circle” or the “Sponsored REIT”) was considered a VIE and the Company became the primary beneficiary.

Upon this reconsideration event, the entity was included within the Company’s consolidated financial statements and all intercompany accounts and transactions were eliminated in consolidation.

A gain on consolidation of approximately $ 0.4 million was recognized in the three months ended March 31, 2023.

Cash and cash equivalents of $ 3 million held by Monument Circle was included in the Company’s cash and cash equivalents upon consolidation and is reflected as “Consolidation of Sponsored REIT” in the consolidated statement of cash flows.

The cash and cash equivalents held by Monument Circle are unable to be utilized for the Company’s operational purposes.

The creditors of Monument Circle’s trade payables do not have any recourse against the Company.

The cash and cash equivalents held by Monument Circle were unable to be utilized for the Company’s operational purposes.

The creditors of Monument Circle’s trade payables did not have any recourse against the Company.

The property held by Monument Circle was sold on June 6, 2025, and Monument Circle and the corporation that had been its sole member were dissolved on December 9, 2025 .

The consolidation value of Monument Circle was allocated to real estate investments and leases, including lease origination costs.

23 unchanged sentences

(2) Unobservable inputs were weighted based on the fair value of the related instrument.

Prior to January 1, 2023, the Company’s relationship with the Sponsored REIT was considered a VIE in which the Company was not the primary beneficiary.

The Company’s maximum exposure to losses associated with this VIE was limited to the principal amount outstanding under the loan from the Company to the Sponsored REIT secured by a mortgage on real estate owned by the Sponsored REIT (the “Sponsored REIT Loan”) net of the allowance for credit loss, the related accrued interest receivable and an exit fee receivable, which were in aggregate approximately $ 22.1 million at December 31, 2022.

The accrued interest and exit fee receivables are included in prepaid expenses and other assets in the consolidated balance sheet and were approximately $ 2.3 million at December 31, 2022.

The relationships and investments related to the Sponsored REIT are summarized in Note 3.

33 unchanged sentences

Amortization is computed using the straight-line method over the term of the leases, which range from 101 months to 151 months .

Amortization expense was approximately $ 0.1 million, $ 0.1 million and $ 0.2 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Amortization expense was approximately $ 10,000 , $ 0.1 million and $ 0.1 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Amortization related to leases with rents below the market rate is included with rental revenue in the consolidated statements of income.

47 unchanged sentences

The Company recognizes the gross cost of the common shares it repurchases as a reduction in stockholders’ equity using the treasury stock method.

Maryland law does not recognize a separate treasury stock account but provides that shares

repurchased are classified as authorized but unissued shares.

Maryland law does not recognize a separate treasury stock account but provides that shares repurchased are classified as authorized but unissued shares.

Accordingly, the Company reduces common stock for the par value and the excess of the purchase price over the par value is a reduction to additional paid-in capital.

11 unchanged sentences

Amortization of favorable and unfavorable leases

Related Party and Other Revenue - Property and asset management fees, interest income on loans and other income are recognized when the related services are performed and the earnings process is complete.

Related Party and Other Revenue - Property and asset management fees and other income are recognized when the related services are performed and the earnings process is complete.

Segment Reporting

5 unchanged sentences

Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue shares were exercised or converted into shares.

There were no potential dilutive shares outstanding at December 31, 2024, 2023 and 2022.

There were no potential dilutive shares outstanding at

December 31, 2025, 2024 and 2023.

The denominator used for calculating basic and diluted net income per share was 103,640,000 , 103,510,000 and 103,357,000 for the years ended December 31, 2025 , 2024 and 2023 , respectively.

7 unchanged sentences

Ineffectiveness, if any, is recognized in other comprehensive income (“OCI”) and reclassified into the income statement.

The Company reviews

the effectiveness of each hedging transaction, which involves estimating future cash flows, at least quarterly.

The Company reviews the effectiveness of each hedging transaction, which involves estimating future cash flows, at least quarterly.

Derivative instruments designated in a hedge relationship to mitigate exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges.

13 unchanged sentences

The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability including credit risk, which was not significant to the overall value.

These inputs (See Notes 2 and 10) were considered and applied to the Company’s Sponsored REIT purchase price allocation and assets held for sale.

Level 3 inputs were used to value assets acquired in the consolidation of the Sponsored REIT and the valuation of certain assets held for sale.

These inputs (See Notes 2 and 10) were considered and applied to the Company’s Sponsored REIT purchase price allocation.

Level 3 inputs were used to value assets acquired in the consolidation of the Sponsored REIT.

Subsequent Events

3 unchanged sentences

2023-06, Disclosure Improvements:

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative (“ASU 2023-06”).

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative

(“ASU 2023-06”).

ASU 2023-06 adds interim and annual disclosure requirements to GAAP at the request of the Securities and Exchange Commission.

8 unchanged sentences

Early adoption is permitted.

The Company adopted ASU 2023-07, which did not have a material impact on the consolidated financial statements.

The Company adopted ASU 2023-07 on January 1, 2024, which did not have a material impact on the consolidated financial statements.

In December 2023, the FASB issued ASU No.

4 unchanged sentences

ASU 2023-09 is effective for public entities for fiscal years beginning after December 15, 2024.

The Company does not anticipate that the adoption of ASU 2023-09 will have a material impact on the consolidated financial statements.

The Company adopted ASU 2023-09 on January 1, 2025, which did not have a material impact on the consolidated financial statements.

In November 2024, the FASB issued ASU No.

7 unchanged sentences

Investment in Sponsored REITs

The Company held a common stock interest in one Sponsored REIT on each of December 31, 2024, 2023 and 2022.

The Company held a common stock interest in the Sponsored REIT on each of December 31, 2024 and 2023.

The property held by Monument Circle was sold on June 6, 2025, and Monument Circle and the corporation that had been its sole member were dissolved on December 9, 2025

Management fees and interest income from loans:

Asset management fees range from 1 % to 5 % of collected rents, and the applicable contracts are cancellable with 30 day s notice.

Asset management fee income from non-consolidated entities amounted to approximately $ 0 , $ 0 and $ 28,000 for the years ended December 31, 2024, 2023 and 2022, respectively.

Prior to the consolidation of Monument Circle on January 1, 2023, the Company held the Sponsored REIT Loan, which was reported in the balance sheet as a related party mortgage loan receivable.

The Company reviewed the need for an allowance under the current expected credit loss model for the Sponsored REIT Loan at each reporting period.

The measurement of expected credit losses was based upon historical experiences, current conditions, and reasonable and supportable forecasts that affected the collectability of the reported amount.

The Company elected to apply the practical expedient for financial assets secured by collateral in instances where the borrower was experiencing financial difficulty and repayment of the Sponsored REIT Loan was expected to be provided substantially through operation or sale of the collateral.

The Company used the fair value of the collateral at the reporting date, and an adjustment to the allowance for expected credit losses was recorded when the amortized cost basis of the financial asset exceeded the fair value of the collateral, less costs to sell.

The Company regularly evaluated the extent and impact of any credit deterioration that could affect performance and the value of the secured property, as well as the financial and operating capability of the borrower.

A property’s operating results and existing cash balances were considered and used to assess whether cash flows from operations were sufficient to cover the current and future operating and debt service requirements.

The Company also evaluated the borrower’s competency in managing and operating the secured property and considered the overall economic environment, real estate sector and geographic sub-market in which the secured property was located.

The Company applied normal loan review and underwriting procedures (as may be implemented or modified from time to time) in making that judgment.

The Company recognized interest income and fees from the Sponsored REIT Loan of approximately $ 0.0 million, $ 0.0 million and $ 1.8 million for the years ended December 31, 2024, 2023 and 2022, respectively.

On October 29, 2021, the Company agreed to amend and restate the Sponsored REIT Loan to extend the maturity date from December 6, 2022 to June 30, 2023 and to advance an additional $ 3.0 million tranche of indebtedness to FSP Monument Circle LLC with the same June 30, 2023 maturity date, effectively increasing the aggregate principal amount

of the Sponsored REIT Loan from $ 21 million to $ 24 million.

The Company did not recognize asset management fee income from non-consolidated entities for each of the years ended December 31, 2025, 2024 and 2023.

The Company did not recognize income or fees from the Sponsored REIT Loan for each of the years ended December 31, 2025, 2024 and 2023.

On October 29, 2021, the Company agreed to amend and restate the then existing Sponsored REIT Loan to extend the maturity date from December 6, 2022 to June 30, 2023 and to advance an additional $ 3.0 million tranche of indebtedness to Monument Circle with the same June 30, 2023 maturity date, effectively increasing the aggregate principal amount of the Sponsored REIT Loan from $ 21 million to $ 24 million.

In addition, the Company agreed to defer all principal and interest payments due under the Sponsored REIT Loan until the maturity date.

As part of its consideration for agreeing to amend and restate the Sponsored REIT Loan, the Company obtained from the stockholders of the parent of Monument Circle the right to vote their shares in favor of any sale of the property owned by Monument Circle any time on or after January 1, 2023.

The amended and restated Sponsored REIT Loan qualified as a troubled debt restructuring.

January 1, 2023.

There were no commitments to lend additional funds to the Sponsored REIT.

On June 26, 2023, the Sponsored REIT Loan maturity was extended to September 30, 2023.

On September 26, 2023, the Sponsored REIT Loan maturity was extended to September 30, 2024.

On September 27, 2024, the Sponsored REIT Loan maturity was extended to September 30, 2025.

The Company recorded a $ 4.2 million increase in its provision for credit losses during the year ended December 31, 2022.

The change in the allowance for credit losses during the year ended December 31, 2022 was primarily due to the deterioration within the current real estate market, changes to key assumptions applied within the Company’s financial model to reflect these market changes, such as the exit capitalization and discount rates, and due to an increase in the accrued interest receivable balance.

On September 26, 2023, the Sponsored REIT Loan maturity was further extended to September 30, 2024.

On September 27, 2024, the Sponsored REIT Loan maturity was further extended to September 30, 2025.

The Sponsored REIT Loan was extinguished on June 6, 2025, when the property securing the loan was sold.

More information on the sale is included in Note 10, “Disposition of Properties and Assets Held for Sale” in these Consolidated Financial Statements.

The Company recorded a $ 4.2 million decrease in its provision for credit losses during the year ended December 31, 2023.

The change in the allowance for credit losses during the year ended December 31, 2023 is due to the consolidation of Monument Circle.

The change in the allowance for credit losses during the year ended December 31, 2023 was due to the consolidation of Monument Circle.

The following table presents a roll-forward of the Company’s allowance for credit losses.

6 unchanged sentences

Bank Note Payable, Term Note Payable and Private Placements

On February 26, 2026, the Company entered into a Credit Agreement with Alter Domus (US) LLC, as administrative agent, and the lenders from time-to-time party thereto, which provides for initial term loans in an aggregate principal amount of $ 275 million.

The Company used the net proceeds of such initial term loans to refinance and retire all outstanding indebtedness under the BMO Term Loan, BofA Term Loan and the Senior Notes (each as defined below).

See Note 12, Subsequent Events, of these Notes to Consolidated Financial Statements for further information on the Credit Agreement.

BMO Term Loan

As of December 31, 2024, the Company has a term loan borrowing in the aggregate principal amount of approximately $ 71.1 million (the “BMO Term Loan”) with Bank of Montreal, as administrative agent, and the other lending institutions party thereto, that matures on April 1, 2026.

On February 21, 2024, the Company amended the BMO Term Loan by entering into a Second Amendment to Second Amended and Restated Credit Agreement with Bank of Montreal and the other lending institutions party thereto (the “BMO Second Amendment”).

The BMO Second Amendment amended the Second Amended and Restated Credit Agreement dated September 27, 2018 (the “Original BMO Credit Agreement”), as amended by the First Amendment to Second Amended and Restated Credit Agreement dated February 10, 2023 (the “BMO First Amendment”), to, among other things:

(1) extend the maturity date from October 1, 2024 to April 1, 2026;

(2) change the interest rate from either 300 basis points over SOFR or 200 basis points over the base rate to either 300 basis points over SOFR with a floor on SOFR of 500 basis points or 200 basis points over the base rate with a floor on the base rate of 600 basis points;

(3) provide that, if, as of March 31, 2025, the aggregate principal amount outstanding under the BMO Term Loan, BofA Term Loan (defined below) and the Senior Notes (defined below) exceeds $ 200 million, the spread over SOFR or the base rate, as applicable, will permanently increase by 100 basis points from 300 basis points to 400 basis points in the case of SOFR, and from 200 basis points to 300 basis points in the case of the base rate;

(4) require mandatory prepayments of the BMO Term Loan, the BofA Term Loan and the Senior Notes with net cash proceeds from the disposition of property, assets and equity issuances as follows:

(a) 25.55556 % to the BMO Term Loan;

(b) 20.00000 % to the BofA Term Loan;

and (d) the remaining 10 % to be retained by the Company;

(5) require that, within 90 days of the February 21, 2024 effective date of the BMO Second Amendment, certain of the Company’s subsidiaries guarantee the BMO Term Loan;

(6) require that, within 90 days of the February 21, 2024 effective date of the BMO Second Amendment, the Company pledge its equity interests in certain of the Company’s subsidiaries as collateral for the BMO Term Loan;

(7) reduce the Company’s minimum fixed charge coverage ratio from 1.50 x to 1.25 x;

and (8) reduce the Company’s minimum unsecured interest coverage ratio from

1.75 x to 1.25 x.

The Original BMO Credit Agreement, as amended by the BMO First Amendment and the BMO Second Amendment, is referred to as the BMO Credit Agreement.

On February 21, 2024, as part of the BMO Second Amendment, the Company repaid an approximately $ 29.0 million portion of the BMO Term Loan.

On July 10, 2024, the Company repaid an approximately $ 7.2 million portion of the BMO Term Loan from asset sale proceeds of a property located in Glen Allen, Virginia.

On October 25, 2024, the Company repaid an approximately $ 7.8 million portion of the BMO Term Loan from asset sale proceeds of a property located in Atlanta, Georgia.

Effective February 21, 2024, upon entering into the BMO Second Amendment, the BMO Term Loan bears interest at either (i) 300 basis points over one , three or six month term SOFR, plus a corresponding adjustment of 0.11448 %, 0.26161 % or 0.42826 %, respectively, with a floor on SOFR of 5.00 % or (ii) 200 basis points over the base rate with a floor on the base rate of 6.00 %.

In addition, effective February 21, 2024 upon entering into the BMO Second Amendment, if, as of March 31, 2025, the aggregate principal amount outstanding under the BMO Term Loan, the BofA Term Loan and the Senior Notes exceeds $ 200 million, the spread over SOFR or the base rate, as applicable, will permanently increase by 100 basis points from 300 basis points to 400 basis points in the case of SOFR, and from 200 basis points to 300 basis points in the case of the base rate.

As of December 31, 2025, the Company had a term loan borrowing in the aggregate principal amount of approximately $ 70.7 million (the “BMO Term Loan”) with Bank of Montreal, as administrative agent, and the other lending institutions party thereto, which would have matured on April 1, 2026.

The BMO Term Loan was subject to the terms of the Second Amended and Restated Credit Agreement dated September 27, 2018 (the “Original BMO Credit Agreement”), as amended by the First Amendment to Second Amended and Restated Credit Agreement dated February 10, 2023 (the “BMO First Amendment”) and the Second Amendment to Second Amended and Restated Credit Agreement dated February 21, 2024 (the “BMO Second Amendment The Original BMO Credit Agreement, as amended by the BMO First Amendment and the BMO Second Amendment, is referred to as the “BMO Credit Agreement”.

As of December 31, 2024, the interest rate on the BMO Term Loan was 8.00 % per annum.

The weighted average variable interest rate on all amounts outstanding under the BMO Term Loan was 8.34 % for the year ended December 31, 2024.

Effective April 1, 2025, the interest rate on the BMO Term Loan increased from 8.00 % per annum to 9.00 % per annum.

As of December 31, 2025, the interest rate on the BMO Term Loan was 9.00 % per annum.

The weighted average variable interest rate on all amounts outstanding under the BMO Term Loan from February 8, 2023, which is when the Company terminated its outstanding interest rate swaps applicable to the BMO Term Loan as described below, through December 31, 2023, was approximately 8.11 % per annum.

Although the interest rate on the BMO Term Loan was variable under the BMO Credit Agreement, the Company fixed the base LIBOR interest rate that previously applied to the BMO Term Loan by entering into interest rate swap transactions.

On February 20, 2019, the Company entered into ISDA Master Agreements with a group of banks that fixed the base LIBOR interest rate on the BMO Term Loan at 2.39 % per annum for the period beginning on August 26, 2020 and ending January 31, 2024.

On February 8, 2023, the Company terminated all outstanding interest rate swaps applicable to the BMO Term Loan and, on February 10, 2023, the Company received an aggregate of approximately $ 4.3 million as a result of such terminations, of which approximately $ 0.1 million related to interest receivable.

The BMO Credit Agreement contains customary affirmative and negative covenants for credit facilities of this type, including limitations with respect to indebtedness, liens, investments, mergers and acquisitions, disposition of assets, use of net cash proceeds from the disposition of property, assets and equity issuances, mandatory prepayments, the requirement to have certain subsidiaries provide guarantees, the requirement to pledge the Company’s equity interests in certain subsidiaries as collateral, changes in business, certain restricted payments, repurchases and redemptions of the Company’s common stock, going concern qualifications to the Company’s financial statements, and transactions with affiliates.

In addition, the BMO Credit Agreement also restricts the Company’s ability to make quarterly dividend distributions that exceed $ 0.01 per share of the Company’s common stock;

provided, however, that notwithstanding such restriction, the Company is permitted to make dividend distributions based on the Company’s good faith estimate of projected or estimated taxable income or otherwise as necessary to retain the Company’s status as a real estate investment trust, to meet the distribution requirements of Section 857 of the Internal Revenue Code or to eliminate any income or excise taxes to which the Company would otherwise be subject.

The BMO Credit Agreement also contains financial covenants that require the Company to maintain a minimum tangible net worth, a maximum leverage ratio, a maximum secured leverage ratio, a maximum secured recourse leverage ratio, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, and minimum unsecured interest coverage.

The weighted average variable interest rate on all amounts outstanding under the BMO Term Loan was 8.75 % for the year ended December 31, 2025.

The BMO Credit Agreement contained customary affirmative and negative covenants for credit facilities of this type.

The BMO Credit Agreement also contained financial covenants that required the Company to maintain a minimum tangible net worth, a maximum leverage ratio, a maximum secured leverage ratio, a maximum secured recourse leverage ratio, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, and minimum unsecured interest coverage.

The Company was in compliance with the BMO Term Loan financial covenants as of December 31, 2025.

The BMO Credit Agreement provides for customary events of default with corresponding grace periods, including failure to pay any principal or interest when due, certain cross defaults and a change in control of the Company (as defined in the BMO Credit Agreement).

In the event of a default by the Company, the administrative agent may, and at the request of the requisite number of lenders shall, declare all obligations under the BMO Credit Agreement immediately due and payable, terminate the lenders’ commitments to make loans under the BMO Credit Agreement, and enforce any and all rights of the lenders or administrative agent under the BMO Credit Agreement and related

For certain events of default related to bankruptcy, insolvency, and receivership, the commitments of lenders will be automatically terminated and all outstanding obligations of the Company will become immediately due and payable.

The BMO Credit Agreement provided for customary events of default with corresponding grace periods, including failure to pay any principal or interest when due, certain cross defaults and a change in control of the Company (as defined in the BMO Credit Agreement).

BofA Term Loan

As of December 31, 2024, the Company has a term loan borrowing in the aggregate principal amount of approximately $ 55.6 million (the “BofA Term Loan”) with Bank of America, N.A.

as administrative agent, and other lending institutions party thereto that matures on April 1, 2026.

Prior to February 21, 2024, we referred to the BofA Term Loan as the BofA Revolver.

On February 21, 2024, the Company amended the BofA Term Loan by entering into a Second Amendment to Credit Agreement with the lending institutions party thereto (the “BofA Second Amendment”).

The BofA Second Amendment amended the Credit Agreement dated January 10, 2022 (the Original BofA Credit Agreement, as amended by the First Amendment to Credit Agreement dated February 10, 2023 (the “BofA First Amendment”) to, among other things:

(1) extend the maturity date from October 1, 2024 to April 1, 2026;

(2) convert borrowings from being either revolving loans or letters of credit to a term loan;

(3) change the interest rate from 300 basis points over SOFR to 300 basis points over SOFR with a floor on SOFR of 500 basis points in the case of SOFR, and from 200 basis points to 300 basis points in the case of the base rate;

(4) provide that, if, as of March 31, 2025, the aggregate principal amount outstanding under the BMO Term Loan, the BofA Term Loan and the Senior Notes exceeds $ 200 million, the spread over SOFR will permanently increase by 100 basis points from 300 basis points to 400 basis points;

(5) require mandatory prepayments of the BMO Term Loan, the BofA Term Loan and the Senior Notes with net cash proceeds from the disposition of property, assets and equity issuances as follows:

(a) 25.55556 % to the BMO Term Loan;

(b) 20.00000 % to the BofA Term Loan;

and (d) the remaining 10 % to be retained by the Company;

(6) require that, within 90 days of the February 21, 2024 effective date of the BofA Second Amendment, certain of the Company’s subsidiaries guarantee the BofA Term Loan;

(7) require that, within 90 days of the February 21, 2024 effective date of the BofA Second Amendment, the Company pledge its equity interests in certain of the Company’s subsidiaries as collateral for the BofA Term Loan;

(8) reduce the Company’s minimum fixed charge coverage ratio from 1.50 x to 1.25 x;

and (9) reduce the Company’s minimum unsecured interest coverage ratio from 1.75 x to 1.25 x.

As of December 31, 2025, the Company had a term loan borrowing in the aggregate principal amount of approximately $ 55.3 million (the “BofA Term Loan”) with Bank of America, N.A.

as administrative agent, and other lending institutions party thereto, which would have matured on April 1, 2026.

The BofA Term Loan was subject to the terms of the Credit Agreement dated January 10, 2022, as amended by the First Amendment to Credit Agreement dated February 10, 2023 (the “BofA First Amendment”) and the Second Amendment to Credit Agreement dated February 21, 2024 (the “BofA Second Amendment”).

The Original BofA Credit Agreement, as amended by the BofA First Amendment and the BofA Second Amendment, is referred to as the “BofA Credit Agreement”.

On February 21, 2024, as part of the BofA Second Amendment, the Company repaid an approximately $ 22.7 million portion of the BofA Revolver.

On July 10, 2024, the Company repaid an approximately $ 5.6 million portion of the BofA Term Loan from asset sale proceeds of a property located in Glen Allen, Virginia.

On October 25, 2024, the Company repaid an approximately $ 6.1 million portion of the BofA Term Loan from asset sale proceeds of a property located in Atlanta, Georgia.

Effective February 21, 2024, upon entering into the BofA Second Amendment, the BofA Term Loan bears interest at 300 basis points over either (i) the daily simple SOFR, plus an adjustment of 0.11448 %, or (ii) one , three or six month term SOFR, plus a corresponding adjustment of 0.11448 %, 0.26161 % or 0.42826 %, respectively, with a floor on SOFR of 5.00 %.

In addition, effective February 21, 2024, upon entering into the BofA Second Amendment, under certain circumstances, such as if SOFR is not able to be determined, the BofA Term Loan bears interest at 200 basis points over the base rate with a floor on the base rate of 600 basis points.

In addition, effective February 21, 2024 upon entering into the BofA Second Amendment, if, as of March 31, 2025, the aggregate principal amount outstanding under the BMO Term Loan, the BofA Term Loan and the Senior Notes exceeds $ 200 million, the spread over SOFR will permanently increase by 100 basis points from 300 basis points to 400 basis points in the case of SOFR, and from 200 basis points to 300 basis points in the case of the base rate.

As of December 31, 2024, the interest rate on the BofA Term Loan was 8.00 % per annum.

The weighted average variable interest rate on all amounts outstanding under the BofA Term Loan for the year ended December 31, 2024 was approximately 8.34 % per annum.

Effective April 1, 2025, the interest rate on the BofA Term Loan increased from 8.00 % per annum to 9.00 % per annum.

As of December 31, 2025, the interest rate on the BofA Term Loan was 9.00 % per annum.

The weighted average variable interest rate on all amounts outstanding under the BofA Term Loan was 8.75 % for the year ended December 31, 2025.

As of December 31, 2023, the interest rate on the BofA Revolver was 8.47 % per annum.

The weighted average variable interest rate on all amounts outstanding under the BofA Revolver through December 31, 2023 was approximately 8.05 % per annum.

The BofA Credit Agreement contains customary affirmative and negative covenants for credit facilities of this type, including limitations with respect to indebtedness, liens, investments, mergers and acquisitions, disposition of assets, use of net cash proceeds from the disposition of property, assets and equity issuances, mandatory prepayments, the requirement to have certain subsidiaries provide guarantees, the requirement to pledge the Company’s equity interests in certain subsidiaries as collateral, changes in business, certain restricted payments, repurchases and redemptions of the Company’s common stock, going concern qualifications to the Company’s financial statements, and transactions with affiliates.

In addition, the BofA Credit Agreement also restricts the Company’s ability to make quarterly dividend distributions that exceed $ 0.01 per share of the Company’s common stock;

The BofA Credit Agreement also contains financial covenants that require the Company to maintain a minimum tangible net worth, a maximum leverage ratio, a maximum secured leverage ratio, a maximum secured recourse leverage ratio, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, and minimum unsecured interest coverage.

The BofA Credit Agreement contained customary affirmative and negative covenants for credit facilities of this type.

The BofA Credit Agreement also contained financial covenants that required the Company to maintain a minimum tangible net worth, a maximum leverage ratio, a maximum secured leverage ratio, a maximum secured recourse leverage ratio, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, and minimum unsecured interest coverage.

The Company was in compliance with the BofA Term Loan financial covenants as of December 31, 2025.

The BofA Credit Agreement provides for customary events of default with corresponding grace periods, including failure to pay any principal or interest when due, failure to comply with the provisions of the BofA Credit Agreement, certain cross defaults and a change in control of the Company (as defined in the BofA Credit Agreement).

In the event of a default by the Company, BofA, in its capacity as administrative agent, may, and at the request of the requisite number of lenders shall, declare all obligations under the BofA Credit Agreement immediately due and payable and enforce any and all rights of the lenders or BofA under the BofA Credit Agreement and related documents.

For certain events of default related to bankruptcy, insolvency, and receivership, all outstanding obligations of the Company will become immediately due and payable.

As of December 31, 2024, the Company has senior notes in the aggregate principal amount of approximately $ 123.6 million (the “Senior Notes”) that mature on April 1, 2026.

The Senior Notes consist of (i) Series A Senior Notes due April 1, 2026 in an aggregate principal amount of approximately $ 71.7 million (the “Series A Notes”) and (ii) Series B Senior Notes due April 1, 2026 in the aggregate principal amount of approximately $ 51.9 million (the “Series B Notes”).

On February 21, 2024, the Company amended the terms of the Senior Notes by entering into a First Amendment to Note Purchase Agreement (the “NPA First Amendment”) with the purchasers party thereto.

The NPA First Amendment amended the Note Purchase Agreement dated October 24, 2017 (the “Original Note Purchase Agreement”) to, among other things:

(1) extend the maturity date of the Series A Notes from December 20, 2024 to April 1, 2026;

(2) shorten the maturity date of the Series B Notes from December 20, 2027 to April 1, 2026;

(3) increase the interest rate applicable to the Series A Notes from 4.49 % per annum to 8.00 % per annum;

(4) increase the interest rate applicable to the Series B Notes from 4.76 % per annum to 8.00 % per annum;

(5) provide that, if, as of March 31, 2025, the aggregate principal amount outstanding under the BMO Term Loan, the BofA Term Loan and the Senior Notes exceeds $ 200 million, the per annum interest rates applicable to the Series A Note and the Series B Notes will permanently increase by 1.00 % from 8.00 % per annum to 9.00 % per annum;

(6) require mandatory prepayments of the BMO Term Loan, the BofA Term Loan and the Senior Notes with net cash proceeds from the disposition of property, assets and equity issuances as follows:

(a) 25.55556 % to the BMO Term Loan;

(b) 20.00000 % to the BofA Term Loan;

and (d) the remaining 10 % to be retained by the Company;

(7) require that, within 90 days of the February 21, 2024 effective date of the NPA First Amendment, certain of the Company’s subsidiaries guarantee the Senior Notes;

(8) require that, within 90 days of the February 21, 2024 effective date of the NPA First Amendment, the Company pledge its equity interests in certain of the Company’s subsidiaries as collateral for the Senior Notes;

and (9) conform all financial covenants and negative covenants in the Note Purchase Agreement with the BofA Credit Agreement and the BMO Credit Agreement.

The BofA Credit Agreement provided for customary events of default with corresponding grace periods, including failure to pay any principal or interest when due, failure to comply with the provisions of the BofA Credit Agreement, certain cross defaults and a change in control of the Company (as defined in the BofA Credit Agreement).

As of December 31, 2025, the Company had senior notes in the aggregate principal amount of approximately $ 122.9 million (the “Senior Notes”) that mature on April 1, 2026.

The Senior Notes consisted of (i) Series A Senior Notes due April 1, 2026 in an aggregate principal amount of approximately $ 71.3 million (the “Series A Notes”) and (ii) Series B Senior Notes due April 1, 2026 in the aggregate principal amount of approximately $ 51.6 million (the “Series B Notes”).

The Senior Notes were subject to the terms of the Note Purchase Agreement dated October 24, 2017 (the “Original Note Purchase Agreement”), as amended by the First Amendment to Note Purchase Agreement dated February 21, 2024 (the “NPA First Amendment”).

The Original Note Purchase Agreement, as amended by the NPA First Amendment, is referred to as the “Note Purchase Agreement”.

On February 21, 2024, as part of the NPA First Amendment, the Company repaid an approximately $ 29.2 million portion of the Series A Notes and an approximately $ 21.2 million portion of the Series B Notes.

On July 10, 2024, the

Company repaid an approximately $ 7.2 million portion of the Series A Notes and an approximately $ 5.3 million portion of the Series B Notes from asset sale proceeds of a property located in Glen Allen, Virginia.

On October 25, 2024, the Company repaid an approximately $ 7.8 million portion of the Series A Notes and an approximately $ 5.7 million portion of the Series B Notes from asset sale proceeds of a property located in Atlanta, Georgia.

As of December 31, 2024, approximately $ 71.7 million aggregate principal amount of the Series A Notes remained outstanding and approximately $ 51.9 million aggregate principal amount of the Series B Notes remained outstanding.

As of December 31, 2024, the interest rate on the Series A Notes was 8.00 % per annum and the interest rate on the Series B Notes was 8.00 % per annum.

As of December 31, 2023, the interest rate on the Series A Notes was 4.49 % per annum and the interest rate on the Series B Notes was 4.76 % per annum.

The Note Purchase Agreement contains customary affirmative and negative covenants, including limitations with respect to indebtedness, liens, investments, mergers and acquisitions, disposition of assets, use of net cash proceeds from the disposition of property, assets and equity issuances, mandatory prepayments, the requirement to have certain subsidiaries provide guarantees, the requirement to pledge the Company’s equity interests in certain subsidiaries as collateral, changes in business, certain restricted payments, repurchases and redemptions of the Company’s common stock, going concern qualifications to the Company’s financial statements, transactions with affiliates, certain restrictions on severance, retention and similar arrangements applicable to the Company’s executive officers, and real estate investment trust compliance requirements.

In addition, the Note Purchase Agreement also restricts the Company’s ability to make quarterly dividend distributions that exceed $ 0.01 per share of the Company’s common stock;

The Note Purchase Agreement also contains financial covenants that require the Company to maintain a minimum tangible net worth, a maximum leverage ratio, a maximum secured leverage ratio, a maximum secured recourse leverage ratio, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, and minimum unsecured interest coverage.

Effective April 1, 2025, the interest rates on both the Series A Notes and the Series B Notes permanently increased from 8.00 % per annum to 9.00 % per annum.

As of December 31, 2025 and December 31, 2024, the interest rate on both the Series A Notes and the Series B Notes was 9.00 % per annum and 8.00 % per annum, respectively.

The Note Purchase Agreement contained customary affirmative and negative covenants The Note Purchase Agreement also contained financial covenants that required the Company to maintain a minimum tangible net worth, a maximum leverage ratio, a maximum secured leverage ratio, a maximum secured recourse leverage ratio, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, and minimum unsecured interest coverage.

The Company was in compliance with the Note Purchase Agreement financial covenants as of December 31, 2025.

The Note Purchase Agreement contains customary events of default, including payment defaults, cross defaults with certain other indebtedness, breaches of covenants and bankruptcy events.

In the case of an event of default, the purchasers may, among other remedies, accelerate the payment of all obligations.

The Note Purchase Agreement contained customary events of default, including payment defaults, cross defaults with certain other indebtedness, breaches of covenants and bankruptcy events.

Financial Instruments:

3 unchanged sentences

On February 8, 2023, the Company terminated the 2019 BMO Interest Rate Swap applicable to the BMO Term Loan and, on February 10, 2023, the Company received an aggregate of approximately $ 4.3 million as a result of such terminations, of which approximately $ 0.1 million related to interest receivable.

As of December 31, 2024 and December 31, 2023, there were no derivative instruments.

There were no derivative instruments as of December 31, 2025 and December 31, 2024.

The 2019 BMO Interest Rate Swap qualified as a cash flow hedge and has been recognized on the consolidated balance sheets at fair value.

3 unchanged sentences

(in thousands)

Year Ended December 31,

Interest Rate Swaps in Cash Flow Hedging Relationships:

21 unchanged sentences

Balance December 31, 2025

Repurchase of Common Stock

On June 23, 2021, the Board of Directors of the Company authorized the repurchase of up to $ 50 million of the Company’s common stock from time to time in the open market, privately negotiated transactions or other manners as permitted by federal securities laws.

The repurchase authorization may be suspended or discontinued at any time.

The Company repurchased 846,739 shares of common stock during the first quarter of 2022 at an aggregate cost of approximately $ 4.8 million and at an average cost of approximately $ 5.72 per share, inclusive of brokerage

The Company did not repurchase any shares of common stock during the remainder of 2022, 2023 or in 2024.

On February 10, 2023, the Company announced it had discontinued the previous repurchase authorization made on June 23, 2021.

The excess of the purchase price over the par value of the shares repurchased is applied to reduce additional paid-in capital.

A summary of the repurchase of common stock by the Company is shown in the following table:

(Cost in thousands)

Shares Repurchased

Balance, December 31, 2021

Repurchase of shares

Balance, December 31, 2022

Federal Income Tax Reporting

18 unchanged sentences

The statute of limitations for the Company’s income tax returns is generally three years and as such, the Company’s returns that remain subject to examination would be primarily from 2022 and thereafter.

The Company is subject to a business tax known as the Revised Texas Franchise Tax.

Some of the Company’s leases allow reimbursement by tenants for these amounts because the Revised Texas Franchise Tax replaces a portion of the property tax for school districts.

Because the tax base on the Revised Texas Franchise Tax is derived from an income based measure, it is considered an income tax.

The Company recorded a provision for the Revised Texas Franchise Tax of $ 0.2 million, $ 0.3 million and $ 0.2 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Net operating losses

6 unchanged sentences

Income Tax Expense

The Company recognized approximately $ 31,000 in Federal Income Tax expense related to the sale of Monument Circle for the year ended December 31, 2025.

The Company is subject to a business tax known as the Revised Texas Franchise Tax.

Some of the Company’s leases allow reimbursement by tenants for these amounts because the Revised Texas Franchise Tax replaces a portion of the property tax for school districts.

Because the tax base on the Revised Texas Franchise Tax is derived from an income based measure, it is considered an income tax.

The Company recorded a provision for the Revised Texas Franchise Tax of $ 0.2 million, $ 0.2 million and $ 0.3 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The income tax expense reflected in the consolidated statements of income relates primarily to state income taxes as a result of some states that limit the use of net operating losses, which are in Other Taxes, and to a lesser extent, the Revised Texas Franchise Tax.

3 unchanged sentences

(Dollars in thousands)

Federal Income Tax

Revised Texas Franchise Tax

9 unchanged sentences

The contract was amended on October 25, 2016 to extend the contract through September 30, 2024 and amended again on February 7, 2024 to extend the contract through September 30, 2026.

As of December 31, 2024 and December 31, 2023, the Company’s right-of-use asset was $ 0.7 million and $ 0.3 million, respectively, which is

included in prepaid and other assets on the consolidated balance sheet.

As of December 31, 2025 and December 31, 2024, the Company’s right-of-use asset was $ 0.3 million and $ 0.7 million, respectively, which is included in prepaid and other assets on the consolidated balance sheet.

A discount rate equal to the Company’s incremental borrowing rate was applied to the future monthly contractual lease payments remaining as of December 31, 2025 to compute the lease liability.

28 unchanged sentences

2031 and thereafter

(1) Includes amounts recognized from variable lease payments of $ 35,413 , $ 42,311 , and $ 49,730 for the year ended December 31, 2024, 2023 and 2022, respectively.

(1) Includes amounts recognized from variable lease payments of $ 31,592 , $ 35,413 and $ 42,311 for the years ended December 31, 2025, 2024 and 2023, respectively.

Retirement Plan

4 unchanged sentences

The Company’s total contribution under the 401(k) plan amounted to $ 0.1 million, $ 0.1 million and $ 0.1 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Dispositions of Property

Disposition of Properties and Assets Held for Sale

On April 7, 2025, Monument Circle entered into a purchase and sale agreement to sell its property located in Indianapolis, Indiana to a third party for a gross sales price of $ 6.0 million.

The property was sold on June 6, 2025 at a total loss of $ 12.9 million, including an impairment loss of $ 13.3 million that was recorded during the three months ended March 31, 2025 and was decreased by $ 0.4 million for final sale adjustments during the three months ended June 30, 2025 after the sale was completed.

In October 2021, as part of its consideration for agreeing to amend and restate the Sponsored REIT Loan, the Company obtained from the stockholders of the parent of Monument Circle the right to vote their shares in favor of any sale of the property owned by Monument Circle any time on or after January 1, 2023.

At March 31, 2025, the Company recorded this property at the fair value less cost to sell, which was less than the carrying value and resulted in an impairment loss of $ 13.3 million.

The Company reclassified $ 5.7 million of this office property as an asset held for sale, which was comprised of $ 18.9 million in real estate assets, net of accumulated depreciation, prior to the impairment.

The reclassification was a non-cash investing activity on the statement of cash flows.

The Company estimated the fair value of this property, less estimated costs to sell, based on the purchase price set forth in the letter of intent to purchase the property that Monument Circle entered into with the third party (Level 3 inputs, as there are no observable inputs).

In 2024, the Company sold an office property located in Richardson, Texas on January 26, 2024, for a gross sales price of $ 35 million.

2 unchanged sentences

During the three months ended June 30, 2024, the Company entered into an agreement to sell a property in Glen Allen, Virginia for a gross sales price of approximately $ 31.0 million and an expected loss of $ 13.2 million, which was recorded as an impairment.

The property was sold on July 8, 2024, at the expected loss.

The property was sold on July 8, 2024, at

the expected loss.

During the three months ended September 30, 2024, the Company recorded an additional $ 0.7 million in costs related to the sale of properties previously sold.

5 unchanged sentences

The Company sold one office property located in Charlotte, North Carolina on August 9, 2023 for a gross sales price of $ 9.2 million, at a loss of $ 0.8 million.

During the three months ended September 30, 2023, the Company recorded a gain on sale of $ 53,000 as a result of conveying approximately

7,826 square feet of land at the Company’s Addison, Texas property to the Town of Addison as part of a road revitalization project.

During the three months ended September 30, 2023, the Company recorded a gain on sale of $ 53,000 as a result of conveying approximately 7,826 square feet of land at the Company’s Addison, Texas property to the Town of Addison as part of a road revitalization project.

During the three months ended September 30, 2023, the Company reclassified $ 96.4 million of its office properties in Miami, Florida and Atlanta, Georgia as assets held for sale as of September 30, 2023.

13 unchanged sentences

The Company reclassified $ 34.4 million of this office property as an asset held for sale, which comprised of $ 31.1 million in real estate assets, net of accumulated depreciation, $ 3.4 million in straight-line rents receivable, and $ 2.0 million in deferred leasing commissions, net of accumulated amortization.

In 2022, the Company sold two office properties located in Broomfield, Colorado on August 31, 2022 for an aggregate gross sales price of $ 102.5 million, at a gain of approximately $ 24.1 million.

The Company sold an office property located in Evanston, Illinois on December 28, 2022 for a sales price of $ 27.8 million, at a gain of approximately $ 3.9 million.

The Company used the proceeds of the dispositions principally to repay outstanding indebtedness.

The Company concluded the dispositions did not represent a strategic shift and reports the results of operations of its properties in its consolidated statements of operations, which includes rental income, rental operating expenses, real estate taxes and insurance and depreciation and amortization.

The operating results for the properties that the Company disposed of or classified as assets held for sale are summarized below:

The operating results for the properties that the Company disposed of or classified as assets held for sale are summarized

Year ended December 31,

4 unchanged sentences

Depreciation and amortization

Income from dispositions and assets held for sale

(Loss) income from dispositions and assets held for sale

Segment Information

14 unchanged sentences

(in thousands)

December 31, 2025

December 31, 2024

December 31, 2023

Total consolidated revenues

3 unchanged sentences

Real estate taxes and insurance

Reconciliation to Net Income (Loss)

Net income (loss)

Reconciliation to Net loss

December 31, 2025

December 31, 2024

December 31, 2023

Add (deduct):

1 unchanged sentence

Gain on consolidation of Sponsored REIT

Impairment and loan loss reserve

(Gain) loss on sale of properties and impairment of assets held for sale, net

5 unchanged sentences

Subsequent Events

On February 26, 2026 (the “Closing Date”), the Company entered into a Credit Agreement (the “Credit Agreement”) with Alter Domus (US) LLC, as administrative agent (the “Agent”), and Silver Oak Capital LLC, an affiliate of TPG Credit (collectively, the lenders from time to time party thereto the “Lenders”).

The Credit Agreement provides for a secured credit facility (the “Credit Facility”) for aggregate principal commitments of up to $ 320 million, consisting of (i) initial term loans in an aggregate principal amount of $ 275 million (the “Initial Term Loans”), and (ii) delayed draw term loans available upon the approval of the Lenders after the Closing Date in an aggregate principal amount of up to $ 45 million (the “Delayed Draw Term Loans” and together with the Initial Term Loans, the “Term Loans”).

The Delayed Draw Term Loans may be used, subject to certain conditions, to fund tenant improvements, leasing commissions, building improvements and other uses approved by the Lenders.

The Term Loans are not subject to amortization and have an initial stated maturity date of February 26, 2029.

The maturity date is subject to potential extension of up to one year at the option of the Company, subject to the satisfaction of certain conditions (the “Extension Option”).

Borrowings under the Credit Facility bear interest at an initial interest rate of 9.0 % per annum.

The Initial Term Loans were issued with original issue discount of 6.0 % of the principal amount thereof.

The Delayed Draw Term Loans, if any, will be issued with original issue discount of 6.0 % of the principal amount thereof.

If the Company exercises the Extension Option, the interest rate will increase to a rate of 13.0 % per annum.

Additionally, if the Company exercises the Extension Option, the Company must pay the following extension fees multiplied by the then-outstanding principal amount of Term Loans on each applicable date:

(i) 36th month anniversary of Closing Date:

(ii) 39th month anniversary of Closing Date:

(iii) 42nd month anniversary of Closing Date:

(iv) 45th month anniversary of Closing Date:

(v) 48th month anniversary of Closing Date:

The Credit Agreement requires the Company to prepay outstanding Term Loans with certain proceeds of dispositions of real property.

Additionally, the Company may voluntarily prepay the outstanding Term Loans at any time;

provided, that if the Company prepays any Term Loans prior to the first anniversary of the Closing Date, the Company is required to pay a make‑whole payment equal to the amount of interest that would have accrued on such Term Loans to and excluding the first anniversary of the Closing Date.

The Company is required to pay an exit fee of 4.0 % of the aggregate principal amount of such Term Loans upon any permitted repayment of the Term Loans prior to the applicable maturity date.

The Company must also pay customary agency fees.

The obligations under the Credit Facility are guaranteed by substantially all subsidiaries of the Company and secured by a first priority lien on substantially all of the assets of the Company and its subsidiaries, including a first priority security interest in all of the Company’s and its subsidiaries’ personal property and a first priority mortgage liens on the Company’s and its subsidiaries’ real property, in each case subject to certain exceptions.

The Credit Agreement contains customary representations and affirmative and negative covenants for credit facilities of this type, including, without limitation and subject to certain exceptions, restrictions on indebtedness, liens, investments, mergers, consolidations and other fundamental changes, dispositions of assets (including real property), capital expenditures, changes in business, certain restricted payments, transactions with affiliates, burdensome agreements, sale leaseback transactions, prepayments of other debt, corporate operating expenses and severance and retention payments.

The Credit Agreement also contains financial covenants that require the Company to maintain (i) a minimum tangible net worth $ 424,884,000 plus 70 % of the aggregate net proceeds received by the Company in connection with any offering of stock or other equity in the Company after December 31, 2025 (with a step-down based on the sale of

mortgaged properties of the Company and its subsidiaries) and (ii) a minimum liquidity of not less than $ 5,000,000 in cash or cash equivalents.

The Credit Agreement provides for customary events of default with corresponding grace periods, including, among other things, failure to pay principal or interest when due, breaches of certain covenants, inaccuracies in representations and warranties, certain cross defaults, certain defaults under material contracts, insolvency or bankruptcy events, the entry of certain judgments, the occurrence of a change in control of the Company (as defined in the Credit Agreement) and the departure of the chairman and chief executive officer of the Company.

In the event of a default by the Company, the Agent may, and at the request of the requisite number of Lenders shall, declare any commitment of the Lenders to make Term Loans terminated, declare all obligations under the Credit Agreement immediately due and payable and enforce any and all rights of the Lenders under the Credit Agreement and related documents.

Certain events of default related to bankruptcy, insolvency, and receivership result in the automatic acceleration of all outstanding obligations.

The Company used the proceeds of the Initial Term Loans on the Closing Date to refinance and retire all outstanding indebtedness under the documents evidencing the BMO Term Loan, the BofA Term and the Senior Notes and to pay fees and expenses related to the Credit Agreement.

The Company may use the proceeds of any Delayed Draw Term Loans funded to finance tenant improvements, leasing commissions, building improvements and other uses approved by the Lenders, subject to certain conditions, in each case as permitted under the Credit Agreement.

On January 9, 2026 , the Board of Directors of the Company declared a cash distribution of $ 0.01 per share of common stock payable on February 12, 2026 , to stockholders of record on January 23, 2026 .

In March 2026, the Board of Directors determined to suspend quarterly cash dividends to reduce operating expenses and to redeploy that capital into leasing efforts intended to enhance the value of our portfolio.

In addition, the Credit Agreement provides that we may not declare dividends in excess of the greater of $ 0.01 per share or such amount as is required to maintain our status as a REIT.

Any future declaration and payment of dividends will be determined from time to time by the Board of Directors and will depend on, among other things, our results of operations, cash flows, liquidity, financial condition, capital requirements and other factors the Board of Directors deems relevant.

Franklin Street Properties Corp.

27 unchanged sentences

600 17th Street, Denver, CO

Monument Circle, Indianapolis, IN

Balance — Real Estate

13 unchanged sentences

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