Postal Realty Trust, Inc. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the rules and regulations of the SEC and that such information is accumulated and communicated to management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. We have carried out an evaluation, under the supervision and with the participation of management, including our Principal Executive Officer and Principal Financial Officer, regarding the effectiveness of our disclosure controls and procedures as of December 31, 2023, the end of the period covered by this Annual Report on Form 10-K. Based on the foregoing, our Principal Executive Officer and Principal Financial Officer have concluded, as of December 31, 2023, that our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in reports filed or submitted under the Exchange Act (i) is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate to allow for timely decisions regarding required disclosure. Management’s Report on Internal Control Over Financial Reporting Our management, including our Principal Executive Officer and Principal Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the original framework in Internal Control - Integrated Framework issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control - Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2023. Changes in Internal Control over Financial Reporting There was no change in our internal control over financial reporting that occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION On December 14, 2023 , an affiliate of Andrew Spodek , our chief executive officer , terminated its previously disclosed pre-arranged trading plan, which was entered into on May 11, 2023 , and entered into a new pre-arranged trading plan (the “10b5-1 plan”) that is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. Under the new 10b5-1 plan, the affiliate of Mr. Spodek can purchase up to 70,000 shares of our Class A common stock between March 14, 2024 and March 13, 2025, subject to price and trading limitations under the plan. On February 29, 2024, we mutually terminated the open market sale agreement dated November 4, 2022 with Janney Montgomery Scott LLC in connection with our ATM Program. For description of the material terms and conditions of the terminated sale agreement and details regarding our ATM Program, see Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—ATM Program.” We did not incur any penalties as a result of such termination. 44 Table of Contents ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 45 Table of Contents PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by Item 10 is incorporated by reference to our definitive Proxy Statement for our 2024 annual stockholders’ meeting. ITEM 11. EXECUTIVE COMPENSATION The information required by Item 11 is incorporated by reference to our definitive Proxy Statement for our 2024 annual stockholders’ meeting. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by Item 12 is incorporated by reference to our definitive Proxy Statement for our 2024 annual stockholders’ meeting. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by Item 13 is incorporated by reference to our definitive Proxy Statement for our 2024 annual stockholders’ meeting. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by Item 14 is incorporated by reference to our definitive Proxy Statement for our 2024 annual stockholders’ meeting. 46 Table of Contents PART IV EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (1) Financial Statements Our consolidated financial statements and notes thereto, together with the Reports of Independent Registered Public Accounting Firm are included in Item 8 of this Annual Report on Form 10-K commencing on page F-1. (2) Financial Statement Schedules Our financial statement schedule is included in Part IV of this Annual Report on Form 10-K. (3) Exhibits A list of exhibits to this Annual Report on Form 10-K is set forth on the Index to Exhibits commencing on page 50 and is incorporated herein by reference. 47 Table of Contents Postal Realty Trust, Inc. Schedule III - Real Estate and Accumulated Depreciation As of December 31, 2023 Number of Properties (1) Encumbrances Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount Carried at Close of Period (2) Accumulated Depreciation Date Acquired Depreciable Life (Yrs) (3) State/Territory Land Buildings & Improvements Land Buildings & Improvements Total Alabama 30 — 3,455 19,222 173 3,455 19,395 22,850 1,352 2013-2023 40 Alaska 1 — 15 51 — 15 51 66 10 2018 40 Arizona 12 — 1,454 6,808 8 1,454 6,816 8,270 224 2021-2023 40 Arkansas 32 — 1,613 5,932 29 1,613 5,961 7,574 972 2013-2023 40 California 31 — 12,176 20,710 324 12,176 21,034 33,210 1,300 2019-2023 40 Colorado 21 — 1,531 11,377 66 1,531 11,443 12,974 1,208 2019-2023 40 Connecticut 8 — 1,166 5,245 78 1,166 5,323 6,489 489 2013-2022 40 Delaware 3 — 361 799 — 361 799 1,160 55 2020-2023 40 Florida 27 — 6,490 13,644 97 6,490 13,741 20,231 963 2013-2023 40 Georgia 31 — 1,795 8,170 194 1,795 8,364 10,159 688 2013-2023 40 Hawaii 1 — 1,810 1,447 168 1,810 1,615 3,425 111 2021 40 Idaho 12 — 99 1,346 — 99 1,346 1,445 304 2013-2023 40 Illinois 77 — 1,487 9,544 452 1,487 9,996 11,483 868 2013-2023 40 Indiana 30 — 1,497 8,310 396 1,497 8,706 10,203 742 2019-2023 40 Iowa 35 — 886 6,665 182 886 6,847 7,733 637 2013-2023 40 Kansas 31 — 1,103 10,005 608 1,103 10,613 11,716 972 2013-2023 40 Kentucky 27 — 1,167 4,385 29 1,167 4,414 5,581 341 2013-2023 40 Louisiana 34 — 2,238 8,685 123 2,238 8,808 11,046 1,165 2013-2023 40 Maine 44 — 1,570 4,673 364 1,570 5,037 6,607 590 2013-2023 40 Maryland 8 — 852 1,632 32 852 1,664 2,516 196 2013-2022 40 Massachusetts 20 — 3,529 10,174 84 3,529 10,258 13,787 2,229 2007-2023 40 Michigan 59 — 3,291 12,108 610 3,291 12,718 16,009 1,411 2011-2023 40 Minnesota 61 316 1,306 11,605 384 1,306 11,989 13,295 880 2013-2023 40 Mississippi 30 — 1,797 8,116 184 1,797 8,300 10,097 660 2013-2023 40 Missouri 45 — 1,384 7,650 156 1,384 7,806 9,190 791 2013-2023 40 Montana 13 — 435 3,359 94 435 3,453 3,888 391 2013-2023 40 Nebraska 31 — 233 3,309 117 233 3,426 3,659 242 2013-2023 40 Nevada 5 — 591 3,301 — 591 3,301 3,892 198 2013-2023 40 New Hampshire 8 — 519 1,231 8 519 1,239 1,758 121 2019-2022 40 New Jersey 9 — 782 3,624 16 782 3,640 4,422 136 2019-2023 40 New Mexico 8 — 726 1,825 — 726 1,825 2,551 98 2019-2023 40 New York 58 — 5,324 18,462 332 5,324 18,794 24,118 1,220 2019-2023 40 North Carolina 59 — 6,404 19,200 193 6,404 19,393 25,797 1,910 2013-2023 40 North Dakota 22 — 231 2,256 4 231 2,260 2,491 280 2013-2023 40 Ohio 41 844 3,218 13,935 279 3,218 14,214 17,432 1,405 2006-2023 40 Oklahoma 59 — 2,080 10,685 209 2,080 10,894 12,974 1,479 2013-2023 40 Oregon 5 — 1,555 3,104 27 1,555 3,131 4,686 124 2020-2023 40 Pennsylvania 103 31,634 9,416 66,677 652 9,416 67,329 76,745 6,976 2005-2023 40 Puerto Rico 1 — 99 349 — 99 349 448 19 2022 40 South Carolina 26 194 1,967 5,844 1,151 1,967 6,995 8,962 521 2019-2023 40 South Dakota 24 — 422 2,927 31 422 2,958 3,380 292 2013-2023 40 Tennessee 28 — 3,037 10,147 94 3,037 10,241 13,278 1,042 2013-2023 40 Texas 96 — 5,442 22,966 607 5,442 23,573 29,015 3,447 2005-2023 40 Utah 4 — 318 2,044 — 318 2,044 2,362 102 2020-2023 40 Vermont 21 — 1,395 4,512 24 1,395 4,536 5,931 321 2019-2023 40 Virginia 27 — 2,949 11,480 89 2,949 11,569 14,518 796 2019-2023 40 Washington 9 — 539 1,691 16 539 1,707 2,246 182 2013-2023 40 West Virginia 45 — 1,240 8,570 211 1,240 8,781 10,021 498 2019-2023 40 Wisconsin 86 — 2,820 18,048 684 2,820 18,732 21,552 2,673 2005-2023 40 Wyoming 9 — 260 3,019 — 260 3,019 3,279 160 2013-2023 40 1,507 $ 32,988 $ 106,074 $ 440,868 $ 9,579 $ 106,074 $ 450,447 $ 556,521 $ 43,791 Explanatory Notes : (1) Excludes two properties accounted for as direct financing leases. (2) The aggregate cost for Federal Income Tax purposes was approximately $ 573.5 million as of December 31, 2023. (3) Estimated useful life for buildings. 48 Table of Contents The following table reconciles real estate for the years ended December 31, 2023 and 2022: For the Years Ended December 31, 2023 2022 Beginning Balance $ 474,991 $ 348,365 Acquisitions 78,608 123,719 Capital Improvements 3,068 3,251 Write-offs ( 145 ) ( 322 ) Other ( 1 ) ( 22 ) Ending Balance $ 556,521 $ 474,991 Explanatory Note: (1) Other includes reclassification adjustments. The following table reconciles accumulated depreciation for the years ended December 31, 2023 and 2022: For the Years Ended December 31, 2023 2022 Beginning Balance $ ( 31,257 ) $ ( 20,884 ) Depreciation expense ( 12,503 ) ( 10,695 ) Write-offs and other ( 31 ) 322 Ending Balance $ ( 43,791 ) $ ( 31,257 ) 49 Table of Contents EXHIBIT INDEX Exhibit Number Description 3.1 Articles of Amendment and Restatement of the Company, dated as of May 15, 2019 (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019). 3.2 Amended and Restated Bylaws of the Company , effective as of August 4, 2023 (incorporated by reference to Exhibit 3.1 to the Comp a ny ' s Quarterly Report on Form 10-Q filed on August 8, 2023). 4.1 Form of Certificate of Class A Common Stock of the Company (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-11/A filed on May 7, 2019). 4.2 Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (incorporated by reference to Exhibit 4.2 to the Company’s Annual Report on Form 10-K filed with the Commission on March 27, 2020). 10.1 First Amended and Restated Agreement of Limited Partnership of the Postal Realty LP, dated May 16, 2019 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019). 10.2 Postal Realty Trust, Inc. Amended and Restated Alignment of Interest Program (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 29, 2020).† 10.3 Representation, Warranty and Indemnity Agreement, dated as of May 14, 2019, by and among the Company, Postal Realty LP and Andrew Spodek (incorporated by reference to Exhibit 10.14 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).† 10.4 Tax Indemnification Agreement, dated as of May 14, 2019, by and among the Company, United Properties Holding, Inc., United Post Office Investments, Inc. and Andrew Spodek (incorporated by reference to Exhibit 10.15 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).† 10.5 Form of Right of First Offer Agreement (incorporated by reference to Exhibit 10.18 to the Company’s Registration Statement on Form S-11/A filed on May 7, 2019).† 10.6 Tax Protection Agreement, dated as of May 14, 2019, by and among the Company, Postal Realty LP, Andrew Spodek, Tayaka Holdings, LLC and IDJ Holdings, LLC (incorporated by reference to Exhibit 10.17 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).† 10.7 Tax Protection Agreement, dated as of May 14, 2019, by and among the Company, Postal Realty LP and Nationwide Postal Management Holdings, Inc. (incorporated by reference to Exhibit 10.18 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).† 10.8 Tax Protection Agreement, dated as of May 14, 2019, by and among the Company, Postal Realty LP and Unlimited Postal Holdings LP (incorporated by reference to Exhibit 10.19 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).† 10.9 Form of Third Party Management Agreement (incorporated by reference to Exhibit 10.11 of the Company’s Registration Statement on Form S-11/A filed on May 7, 2019). 10.10 Indemnification Agreement, dated as of May 17, 2019, by and between the Company and Patrick Donahue (incorporated by reference to Exhibit 10.21 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).† 10.11 Indemnification Agreement, dated as of May 17, 2019, by and between the Company and Anton Feingold (incorporated by reference to Exhibit 10.22 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).† 10.12 Indemnification Agreement, dated as of May 17, 2019, by and between the Company and Jeremy Garber (incorporated by reference to Exhibit 10.23 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).† 10.13 Indemnification Agreement, dated as of May 17, 2019, by and between the Company and Jane Gural-Senders (incorporated by reference to Exhibit 10.24 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).† 10.14 Indemnification Agreement, dated as of May 17, 2019, by and between the Company and Barry Lefkowitz (incorporated by reference to Exhibit 10.25 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).† 10.15 Indemnification Agreement, dated as of May 17, 2019, by and between the Company and Andrew Spodek (incorporated by reference to Exhibit 10.26 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).† 10.16 Indemnification Agreement, dated as of January 1, 2021, by and between the Company and Robert B. Klein (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on August 13, 2021) .† 10.17 Indemnification Agreement, dated as of May 17, 2019, by and between the Company and Matt Brandwein (incorporated by reference to Exhibit 10.27 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).† 10.18 Amended and Restated Employment Agreement, dated October 17, 2023 , by and between the Company and Andrew Spodek (incorporated by reference to Exhibit 10. 1 to the Company’s Cur rent Report on Form 8-K filed on October 20 , 20 23 ).† * 10.19 Amended and Restated Employment Agreement, dated October 17, 2023, by and between the Company and Jeremy Garber (incorporated by reference to Exhibit 10. 2 to the Company’s Current Report on Form 8-K filed on October 20, 2023).† * 10.20 Amended and Restated Employment Agreement, dated October 17, 2023, by and between the Company and Robert Klein (incorporated by reference to Exhibit 10. 3 to the Company’s Current Report on Form 8-K filed on October 20, 2023).†* 10.21 2019 Equity Incentive Plan of the Company (incorporated by reference to Exhibit 10.2 to the Company’s Registration Statement on Form S-11/A filed on May 7, 2019).† 10.22 Amendment No. 1 to the Postal Realty Trust, Inc. 2019 Equity Incentive Plan, effective as of June 26, 2020 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 1, 2020).† 10.23 Amendment No. 2 to the Postal Realty Trust, Inc. 2019 Equity Incentive Plan, effective as of June 18, 2021 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 21, 2021) .† 10.24 Form of 2019 Equity Incentive Plan Stock Award Agreement and Notice (incorporated by reference to Exhibit 10.5 of the Company’s Registration Statement on Form S-11/A filed on May 7, 2019).† 50 Table of Contents Exhibit Number Description 10.25 Form of 2019 Employee Stock Purchase Plan of the Company (incorporated by reference to Exhibit 10.4 to the Company’s Registration Statement on Form S-11/A filed on May 7, 2019). † 10.26 Form of LTIP Unit Vesting Agreement (incorporated by reference to Exhibit 10.6 of the Company’s Registration Statement on Form S-11/A filed on May 7, 2019).† 10.27 Credit Agreement, dated August 9, 2021, by and among Postal Realty LP, the Company, the certain subsidiaries from time to time party thereto as guarantors, and Bank of Montreal, as administrative agent, and the several banks and financial institutions party thereto as lenders (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 10, 2021) . 10.28 First Amendment to Credit Agreement, dated May 11, 2022, by and among Postal Realty LP, the Company, the certain subsidiaries from time to time party thereto as guarantors, and Bank of Montreal, as administrative agent, and the several banks and financial institutions party thereto as lenders (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 11, 2022). 10.29 Second Amendment to Credit Agreement, dated July 24, 2023, by and among Postal Realty LP, the Company , the certain subsidiaries from time to time party thereto as guarantors, and Bank of Montreal, as administrative agent, and the several banks and financial institutions party thereto as lenders (incorporated by reference to Exhibit 10.1 to the Company' s Current Report on Form 8-K filed on July 26, 2023). 10.30 Open-End Mortgage, Security Agreement, Fixture Filing, Financing Statement and Assignment of Leases and Rents, dated as of December 18, 2020, by and among Thorn Hill Postal Realty Holdings LLC, The United States Life Insurance Company in the City of New York and National Union Fire Insurance Company of Pittsburgh, PA (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 21, 2020). 10.31 Promissory Note (USLIC), dated December 18, 2020, made by Thorn Hill Postal Realty Holdings LLC to The United States Life Insurance Company in the City of New York (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on December 21, 2020). 10.32 Promissory Note (USLIC – Fortitude), dated December 18, 2020, made by Thorn Hill Postal Realty Holdings LLC to The United States Life Insurance Company in the City of New York (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on December 21, 2020). 10.33 Promissory Note (NUFIC), dated December 18, 2020, made by Thorn Hill Postal Realty Holdings LLC to National Union Fire Insurance Company of Pittsburgh, PA (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on December 21, 2020). 10.34 Suretyship Agreement, dated December 18, 2020, in favor of The United States Life Insurance Company in the City of New York and National Union Fire Insurance Company of Pittsburgh, PA (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on December 21, 2020). 21.1 Subsidiaries of the Company.* 23.1 Consent of Deloitte & Touche LLP .* 23.2 Consent of BDO USA, P.C .* 31.1 Certification of Annual Report by Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.* 31.2 Certification of Annual Report by Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.* 32.1 Certification of Chief Executive Officer furnished pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* 32.2 Certification of Chief Financial Officer furnished pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* 97.1 Incentive Compensation Recoupment Policy . * 101.INS INSTANCE DOCUMENT** 101.SCH SCHEMA DOCUMENT** 101.CAL CALCULATION LINKBASE DOCUMENT** 101.LAB LABELS LINKBASE DOCUMENT** 101.PRE PRESENTATION LINKBASE DOCUMENT** 101.DEF DEFINITION LINKBASE DOCUMENT** 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) _______________________ * Filed herewith † Compensatory plan or arrangement ** Submitted electronically herewith. Attached as Exhibit 101 to this report are the following documents formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations and Comprehensive Income; (iii) Consolidated Statements of Changes in Equity; (iv) Consolidated Statements of Cash Flows; and (v) Notes to Consolidated Financial Statements. ITEM 16. FORM 10-K SUMMARY None. 51 Table of Contents SIGNATURES 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 by the undersigned, thereunto duly authorized. POSTAL REALTY TRUST, INC. Date: February 29, 2024 By: /s/ Andrew Spodek Andrew Spodek Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Name Title Date /s/ Andrew Spodek Chief Executive Officer and Director February 29, 2024 Andrew Spodek (Principal Executive Officer) /s/ Robert B. Klein Chief Financial Officer February 29, 2024 Robert B. Klein (Principal Financial Officer) /s/ Matt Brandwein Senior Vice President, Chief Accounting Officer February 29, 2024 Matt Brandwein (Principal Accounting Officer) /s/ Patrick Donahoe Independent Director, Chair of February 29, 2024 Patrick Donahoe Board of Directors /s/ Barry Lefkowitz Independent Director February 29, 2024 Barry Lefkowitz /s/ Jane Gural-Senders Independent Director February 29, 2024 Jane Gural-Senders /s/ Anton Feingold Independent Director February 29, 2024 Anton Feingold 52