What changed in this filing

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Item 1. Financial Statements

2026-07-28 compared with 2026-04-28 · 80 added, 48 removed, 317 unchanged (29% of the section changed)

9 unchanged sentences

Acquired real estate leases, less accumulated amortization of $ 15,468 and $ 14,648 , respectively

Assets held for sale

Cash, cash equivalents and restricted cash

25 unchanged sentences

Consolidated Statements of Operations

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

(in thousands, except per share amounts)

6 unchanged sentences

Loss on extinguishment of debt

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

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

Interest income

15 unchanged sentences

Balance, March 31, 2025

Comprehensive loss

Equity-based compensation

Distributions $ 0.01 per

share of common stock

Balance, June 30, 2025

Balance, December 31, 2025

3 unchanged sentences

Balance, March 31, 2026

Comprehensive loss

Equity-based compensation

Balance, June 30, 2026

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

1 unchanged sentence

Consolidated Statements of Cash Flows

For the Three Months Ended March 31,

For the Six Months Ended June 30,

(in thousands)

2 unchanged sentences

Depreciation and amortization expense

Amortization of above and below market leases

Shares issued as compensation

Loss on extinguishment of debt

12 unchanged sentences

Property improvements, fixtures and equipment

Proceeds received from sales of properties

Net cash used in investing activities

6 unchanged sentences

Deferred financing costs

Net cash provided by (used in) financing activities

Net cash used in financing activities

Net decrease in cash, cash equivalents and restricted cash

7 unchanged sentences

Initial Term Loan original issue discount

Accrued deferred financing costs

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

5 unchanged sentences

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

As of March 31, 2026, the Company owned and operated a portfolio of real estate consisting of 14 operating properties.

As of June 30, 2026, 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.

The following table summarizes the Company’s number of owned properties and rentable square feet of real estate.

As of March 31,

As of June 30,

Owned and Consolidated Properties:

1 unchanged sentence

Rentable square feet

(1) Includes one property that was classified as an asset held for sale as of June 30, 2026.

Basis of Presentation

6 unchanged sentences

In the opinion of management, all adjustments (consisting solely of normal recurring matters) necessary for a fair presentation of the financial statements for these interim periods have been included.

Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026 or for any other period.

Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026 or for any other period.

The Company does not have any comprehensive loss other than what is included in net loss.

1 unchanged sentence

Financial Instruments

The Company estimates that the carrying values of cash and cash equivalents, restricted cash, receivables, prepaid expenses, accounts payable and accrued expenses, accrued compensation, and tenant security deposits approximate their fair values based on their short-term maturity and the term loans payable approximate their fair values as they bear interest at variable interest rates or at rates that are at market for similar investments.

based on their short-term maturity and the term loans payable approximate their fair values as they are at rates that are at market for similar investments.

Cash, Cash Equ ivalents and Restricted Cash

24 unchanged sentences

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 Company’s previous loan to Monument Circle that was secured by a mortgage on the real estate owned by Monument Circle (the “Sponsored REIT Loan”) was extinguished on June 6, 2025, when the property securing the loan was sold.

The Company’s previous loan to Monument Circle that was secured by a mortgage on the real estate owned by Monument Circle (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 7, “Disposition of Properties and Assets Held for Sale”.

1 unchanged sentence

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

The Company did not recognize asset management fee income from non-consolidated entities for the three months ended March 31, 2026 and 2025.

The Company did not recognize interest income and fees from the Sponsored REIT Loan for the three months ended March 31, 2025 .

The Company did not recognize asset management fee income from non-consolidated entities for each of the three and six months ended June 30, 2026 and 2025.

The Company did no t recognize interest income and fees from the Sponsored REIT Loan for the six months ended June 30, 2025 .

Recent Accounting Standards

23 unchanged sentences

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

As of March 31, 2026, the remaining balance of the unamortized original issue discount and the unamortized deferred financing costs amounted to approximately $ 16.1 million and $ 7.4 million, respectively.

As of June 30, 2026, there were no drawn balances on the Delayed Draw Term Loans and the remaining balance of the unamortized original issue discount and the unamortized deferred financing costs amounted to approximately $ 14.9 million and $ 7.0 million, respectively.

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

13 unchanged sentences

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 70 % of the impairment charge and/or loss resulting from dispositions of the mortgaged properties of the Company and its subsidiaries, or such other amount as agreed to by the Company and the Lenders) and (ii) a minimum liquidity of not less than $ 5,000,000 in cash or cash equivalents.

The Company was in compliance with the Credit Agreement financial covenants as of March 31, 2026.

The Company was in compliance with the Credit Agreement financial covenants as of June 30, 2026.

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.

2 unchanged sentences

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 (each as defined below) and to pay fees and expenses related to the Credit Agreement.

The Company incurred approximately $ 1.0 million of costs in connection with the retirement of the debt, consisting of a make-whole premium related to the Senior Notes and legal and professional fees payable to the lenders under the BMO Term Loan, the BofA Term Loan, and the Senior Notes.

The Company incurred approximately $ 1.0 million of

costs in connection with the retirement of the debt, consisting of a make-whole premium related to the Senior Notes and legal and professional fees payable to the lenders under the BMO Term Loan, the BofA Term Loan, and the Senior Notes.

These costs were recognized as part of the loss on debt extinguishment.

3 unchanged sentences

The BMO Term Loan 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, which the Company refers to as the Original BMO Credit Agreement, as amended by the First Amendment to Second Amended and Restated Credit Agreement dated February 10, 2023, which the Company refers to as the BMO First Amendment, and the Second Amendment to Second Amended and Restated Credit Agreement dated February 21, 2024, which the Company refers to as the BMO Second Amendment.

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

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

1 unchanged sentence

The weighted average variable interest rate on all amounts outstanding under the BMO Term Loan was 9 % for the period of January 1, 2026 until February 26, 2026 and 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 BMO Credit Agreement also 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 (as defined in the BMO Credit Agreement).

BofA Term Loan

2 unchanged sentences

The BofA Term Loan would have matured on April 1, 2026.

The BofA Term Loan was subject to the terms of the Credit Agreement dated January 10, 2022, which the Company refers to as the Original BofA Credit Agreement, as amended by the First Amendment to Credit Agreement dated February 10, 2023, which the Company refers to as the BofA First Amendment, and the Second Amendment to Credit Agreement dated February 21, 2024, which the Company refers to as the BofA Second Amendment.

The Company refers to the Original BofA Credit Agreement, as amended by the BofA First Amendment and the BofA Second Amendment, as the BofA Credit Agreement.

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

1 unchanged sentence

The weighted average variable interest rate on all amounts outstanding under the BofA Term Loan was 9 % for the period of January 1, 2026 until February 26, 2026 and was 8.75 % for the year ended December 31, 2025.

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 BofA Credit Agreement also 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 (as defined in the BofA Credit Agreement).

On February 26, 2026, the Company repaid in its entirety the Company’s two series of senior notes in the aggregate principal amount of approximately $ 122.9 million, which the Company refers to as the Senior Notes.

1 unchanged sentence

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

The Senior Notes were subject to the terms of the Note Purchase Agreement dated October 24, 2017, which the Company refers to as the Original Note Purchase Agreement, as amended by the First Amendment to Note Purchase Agreement dated February 21, 2024.

The Company refers to the Original Note Purchase Agreement, as amended by the NPA First Amendment, as the Note Purchase Agreement.

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 February 26, 2026 and December 31, 2025, the interest rate on both the Series A Notes and the Series B Notes was 9.00 % per annum and 9.00 % 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.

Net Income (Loss) Per Share

1 unchanged sentence

Diluted net income (loss) 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 each of March 31, 2026 and 2025.

There were no potential dilutive shares outstanding at each of June 30, 2026 and 2025.

Stockholders’ Equity

As of March 31, 2026, the Company had 103,690,340 shares of common stock outstanding.

As of June 30, 2026, the Company had 104,011,708 shares of common stock outstanding.

The Company declared and paid dividends as follows (in thousands, except per share amounts):

2 unchanged sentences

First quarter of 2025

Second quarter of 2025

Equity-Based Compensation

4 unchanged sentences

Upon granting an Award, the Company will recognize compensation cost equal to the fair value of the Company’s common stock, as determined by the Company’s Board of Directors, on the date of the grant.

On May 30, 2025, the Company granted shares under the Plan to non-employee directors with the compensation cost related to such grants indicated in the table below, which was recognized during the three months ended June 30, 2025, and is included in general and administrative expenses for such period.

On May 30, 2025 and May 28, 2026, the Company granted shares under the Plan to non-employee directors with the compensation cost related to such grants indicated in the table below, which was recognized during the three months ended June 30, 2025 and June 30, 2026, respectively, and is included in general and administrative expenses for such period.

Such shares were fully vested on the date of issuance.

4 unchanged sentences

Shares granted 2026

Balance March 31, 2026

Balance June 30, 2026

The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”).

6 unchanged sentences

are the Company’s taxable REIT subsidiaries operating as taxable corporations under the Code.

The TRSs have gross amounts of net operating losses (“NOLs”) available to those taxable corporations of $ 5.0 million and $ 4.9 million as of December 31, 2025 and December 31, 2024, respectively.

The TRSs have gross

amounts of net operating losses (“NOLs”) available to those taxable corporations of $ 5.0 million and $ 4.9 million as of December 31, 2025 and December 31, 2024, respectively.

The NOLs created prior to 2018 will expire between 2030 and 2037 and the NOLs generated after 2017 will not expire.

A valuation allowance is provided for the full amount of the NOLs as the realization of any tax benefits from such NOLs is not assured.

The Company is expecting to use approximately $ 39,000 of the TRS’s NOLs in 2026 to offset federal income tax related to the actives of the TRSs;

therefore, approximately $ 39,000 of the valuation allowances were reversed during the three months ending March 31, 2026.

The Company is expecting to use approximately $ 79,000 of the TRS’s NOLs in 2026 to offset federal income tax related to the activities of the TRSs;

therefore, approximately $ 79,000 of the valuation allowances were reversed during the six months ended June 30, 2026.

Income taxes are recorded based on the future tax effects of the difference between the tax and financial reporting bases of the Company’s assets and liabilities.

7 unchanged sentences

Net operating losses

Section 382 of the Code restricts a corporation’s ability to use net operating losses (“NOLs”) to offset future taxable income following certain “ownership changes.” Such ownership changes occurred with past mergers and accordingly a portion of the NOLs incurred by the Company’s prior sponsored REITs available for use by the Company in any particular future taxable

year will be limited.

To the extent that the Company does not utilize the full amount of the annual NOLs limit, the unused amount may be carried forward to offset taxable income in future years.

1 unchanged sentence

A valuation allowance is provided for the full amount of the gross NOLs available as the realization of any tax benefits remaining from such NOLs is not assured.

The gross amount of NOLs available to the Company was approximately $ 150.8 million as of both March 31, 2026 and December 31, 2025.

The gross amount of NOLs available to the Company was approximately $ 150.8 million as of both June 30, 2026 and December 31, 2025.

Income Tax Expense

2 unchanged sentences

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 $ 52,000 and $ 52,000 for the three months ended March 31, 2026 and 2025, respectively.

The Company recorded a provision for the Revised Texas Franchise Tax of $ 100,000 and $ 103,000 for the six months ended June 30, 2026 and 2025, respectively.

The income tax expense reflected in the consolidated statements of operations relates primarily to a franchise tax on the Company’s Texas properties and federal income tax related to the TRSs.

For the Three Months Ended March 31,

For the Six Months Ended June 30,

(Dollars in thousands)

11 unchanged sentences

The Company applies ASC 842-Leases to the combined lease and non-lease components.

For the three months ended March 31, 2026 and 2025, the Company recognized the following amounts of income relating to lease payments:

For the six months ended June 30, 2026 and 2025, the Company recognized the following amounts of income relating to lease payments:

Income relating to lease payments:

For the Three Months Ended March 31,

For the Six Months Ended June 30,

(in thousands)

Income from leases (1)

(1) Includes amounts recognized from variable lease payments of $ 7,770 and $ 8,107 for the three months ended March 31, 2026 and 2025, respectively.

(1) Includes amounts recognized from variable lease payments of $ 15,573 and $ 15,929 for the six months ended June 30, 2026 and 2025, respectively.

Disposition of Properties and Assets Held for Sale

During the three months ended June 30, 2026, the Company entered into an agreement to sell its Greenwood Plaza property located in Englewood, Colorado for a gross sales price of approximately $ 19.4 million and an expected loss of $ 7.7 million.

The Company reclassified $ 18.0 million of its office property as an asset held for sale as of June 30, 2026, which is comprised of $ 24.2 million of real estate assets, net of accumulated depreciation, $ 0.7 million of straight-line rents receivable, and $ 0.8 million of deferred leasing commissions, net of accumulated amortization.

The Company recorded the property at the fair value less cost to sell, which was less than the carrying value and resulted in an impairment of $ 7.7 million in the three months ended June 30, 2026.

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

The Company estimated the fair value of the property, less estimated costs to sell, using the offers to purchase the property made by third parties (Level 3 inputs, as there is no active market).

The Company closed on the sale of the property on July 8, 2026.

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.

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

Three months ended June 30,

Six months ended June 30,

(in thousands)

Rental revenue

Rental operating expenses

Real estate taxes and insurance

Depreciation and amortization

(Loss) income from dispositions and assets held for sale

Segment Information

13 unchanged sentences

Three Months Ended

Six Months Ended

Three Months Ended

Six Months Ended

(in thousands)

March 31, 2026

March 31, 2025

June 30, 2026

June 30, 2025

Total consolidated revenues

Reconciling items:

Amortization of above/below market leases

Real estate operating expenses

1 unchanged sentence

Three Months Ended

Six Months Ended

Three Months Ended

Six Months Ended

Reconciliation to Net loss

March 31, 2026

March 31, 2025

June 30, 2026

June 30, 2025

Add (deduct):

2 unchanged sentences

Depreciation and amortization

Amortization of above/below market leases

General and administrative

1 unchanged sentence

Interest income

Subsequent Events

On July 8, 2026, the Company sold its Greenwood Plaza property located in Englewood, Colorado for a gross sales price of $ 19.4 million at a loss of approximately $ 7.7 million, which had been recorded as an impairment as of June 30, 2026.

On July 8, 2026, the Company used approximately $ 8.5 million of the net proceeds from the disposition for the repayment of the Initial Term Loans, including interest and fees.

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-Q

Item 1. Financial Statements