DEF 14A: Broad Street Realty Sets Date for 2024 Annual Stockholders Meeting

Broad Street Realty announces its 2024 Annual Meeting of Stockholders to be held virtually on May 29, 2024, covering director elections, auditor ratification, and executive compensation.

Summary

• Broad Street Realty, Inc. will hold its 2024 Annual Meeting of Stockholders on May 29, 2024, in a virtual-only format.
• Stockholders will vote on the election of seven director nominees for one-year terms, the ratification of Cherry Bekaert LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2024, and an advisory vote on executive compensation.
• The board of directors recommends voting for all director nominees, for the ratification of Cherry Bekaert, and for the approval of executive compensation.
• The record date for determining stockholders eligible to vote is April 12, 2024.
• As of the record date, there were 33,431,411 shares of common stock outstanding.
• The proxy materials are available online at www.edocumentview.com/BRST.
• The board determined that Jeffrey H. Foster, Daniel J.W. Neal, Samuel M. Spiritos and Jeffery C. Walraven are independent directors.
• The company dismissed BDO USA, P.C. as their independent registered public accounting firm on May 1, 2023, and engaged Cherry Bekaert LLP on the same day.
• Audit fees billed by Cherry Bekaert for 2023 were $429,957, while BDO billed $1,192,445 for 2022.
• Audit-related fees were $86,300 for Cherry Bekaert in 2023 and $177,750 for BDO in 2022.

Sentiment

Score: 7

Explanation: The document is primarily informational and procedural, with a neutral tone. The inclusion of routine corporate governance matters and standard disclosures contributes to a moderately positive sentiment, as it indicates the company is fulfilling its obligations to shareholders.

Positives

• The board is actively engaged in risk oversight through its committees.
• The company has a Code of Ethics for Chief Executive Officer and Senior Financial Officers to promote ethical conduct.
• Stockholders have multiple avenues to communicate with the board.
• The company provides detailed information on director and executive compensation.
• The company is providing stockholders the opportunity to cast an advisory vote on executive compensation.

Negatives

• The company changed its independent registered public accounting firm from BDO USA, P.C. to Cherry Bekaert LLP.
• The reports on the company's financial statements as of and for the fiscal years ended December 31, 2022 and 2021 contained an explanatory paragraph indicating that there was substantial doubt about the company's ability to continue as a going concern.
• Messrs. Foster and Spiritos were each inadvertently late in filing a Form 4, each reporting one transaction, related to grants of common stock in lieu of their cash retainers on July 3, 2023.

Risks

• The company's future performance is subject to various risks, as detailed in its Form 10-K.
• The advisory vote on executive compensation is non-binding, so the board may choose to disregard stockholder concerns.
• The company is subject to certain related party transactions, which could present conflicts of interest.

Future Outlook

The document outlines the matters to be voted on at the 2024 Annual Meeting and provides information relevant to those votes, but does not contain specific forward-looking statements about the company's future financial performance or strategic direction.

Management Comments

• On behalf of our Board of Directors and our employees, we thank you for your continued interest in and support of our company.
• We look forward to seeing you on May 29, 2024.

Industry Context

As a real estate company, Broad Street Realty's annual meeting and proxy statement are standard corporate governance procedures. The items being voted on are typical for publicly traded companies.

Comparison to Industry Standards

• The director compensation structure, including cash retainers and stock awards, is generally in line with industry practices for companies of similar size and scope.
• The company's corporate governance practices, such as having an audit committee comprised of independent directors, align with regulatory requirements and best practices for publicly traded companies.
• The disclosure of related party transactions is a standard practice to ensure transparency and address potential conflicts of interest.

Related Party Transactions

• Mr. Jacoby received 136,213 Common OP units, Mr. Yockey received 136,213 Common OP units and Mr. Topchy received 14,338 Common OP units as consideration in the remaining Merger.
• Messrs. Jacoby and Yockey entered into a representation, warranty and indemnification agreement with the Company and the Operating Partnership.
• The Operating Partnership and the Eagles Sub-OP entered into a preferred equity investment agreement with the Fortress Member.
• The company entered into the Fortress Governance Agreement.
• The company issued a warrant to purchase common stock (the Fortress Warrant) to the Fortress Member.
• The Operating Partnership entered into a cash flow pledge agreement (the Cash Flow Pledge) in favor of the Fortress Member.
• The company entered into a guaranty of recourse obligations (the Company Guaranty) for the benefit of the Fortress Member.
• The company entered into a registration rights agreement (the Registration Rights Agreement) with the Fortress Member.
• One of the company's subsidiaries and CF Flyer Mezz entered into a $15.0 million mezzanine loan (the Fortress Mezzanine Loan).
• As of December 31, 2023 and 2022, the company had $1.1 million and $1.2 million, respectively, in receivables due from related parties.
• As of December 31, 2023 and 2022, the company had approximately $0.1 million and less than $0.1 million, respectively, in payables due to properties managed by us related to amounts borrowed by us for working capital.
• During the year ended December 31, 2022 the company provided management services for Lamar Station Plaza West and the property known as Cypress Point Shopping Center.
• Messrs. Jacoby, Yockey, Topchy, Foster and Neal had indirect ownership interests in BBL Current Owner, LLC (BBL Current ), which owned Midtown Row.
• Messrs. Jacoby and Yockey have guaranteed the company's subsidiaries obligations under (i) the Eagles Sub-OP Operating Agreement, (ii) the loan agreement (the Basis Loan Agreement) and (iii) the mortgage loan secured by Brookhill Azalea Shopping Center.
• On December 27, 2019, pursuant to the merger agreements for the Mergers, the Company and the Operating Partnership entered into tax protection agreements (the Initial Tax Protection Agreements) with each of the prior investors in BSV Colonial Investor LLC, BSV Lamonticello Investors LLC and BSV Patrick Street Member LLC, including Messrs. Jacoby, Yockey and Topchy, in connection with their receipt of Common OP units in certain of the Mergers closed on December 27, 2019.
• Mr. Spiritos is the managing partner of Shulman Rogers LLP, which represents the company in certain real estate matters, including with matters related to the Mergers.
• The company's Charter and bylaws provide for certain indemnification rights for the company's directors and officers, and the company entered into an indemnification agreement with each of the company's executive officers and directors.

Stakeholder Impact

• Shareholders are provided with the opportunity to vote on key corporate matters.
• Employees are indirectly impacted by decisions regarding executive compensation and corporate governance.
• The selection of an independent auditor impacts the credibility of the company's financial reporting.
• The company's performance and governance practices can affect its relationships with customers, suppliers, and creditors.

Next Steps

• Stockholders are encouraged to vote on the proposals outlined in the proxy statement.
• The company will hold the 2024 Annual Meeting of Stockholders on May 29, 2024.
• The Board will consider the results of the advisory vote on executive compensation.

Key Dates

Keywords

annual meeting, proxy statement, directors, executive compensation, auditor, corporate governance, stockholders, Broad Street Realty