Stockholder's Equity

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

Stockholder's Equity

 Note 12. Stockholder's Equity

The Company issued 4,500,000 shares of Class A common stock in conjunction with the IPO resulting in net proceeds of approximately $71.1 million after deducting approximately $5.4 million in underwriting discounts and before giving effect to $6.4 million in other expenses relating to the IPO. In addition, the Company issued 637,058 shares of Class A common stock and 27,206 shares of Voting Equivalency stock in connection with the Formation Transactions. Each outstanding share of Voting Equivalency stock entitles its holder to 50 votes on all matters on which Class A common stockholders are entitled to vote, including the election of directors, and holders of shares of Class A common stock and Voting Equivalency stock will vote together as a single class. Shares of Voting Equivalency stock are convertible into shares of Class A common stock, on a one-for-one basis, at the election of the holder at any time. Additionally, one share of Voting Equivalency stock will automatically convert into one share of Class A common stock for each 49 OP Units transferred (including by the exercise of redemption rights afforded with respect to OP Units) to a person other than a permitted transferee. This ratio is a function of the fact that each share of Voting Equivalency stock entitles its holder to 50 votes on all matters on which Class A common stockholders are entitled to vote and maintains the voting proportion of holders of Voting Equivalency stock with the holder's economic interest in our Company.

Dividends

During the year ended December 31, 2019, the Company declared and paid dividends of $1.4 million to Class A common stockholders, Voting Equivalency stockholders, OP unitholders and LTIP unitholders, or $0.203 per share as shown in the table below.

Declaration Date	Record Date	Date Paid	Amount Per Share
June 26, 2019	July 9, 2019	July 31, 2019	$	0.0630
November 5, 2019	November 15, 2019	December 2, 2019	$	0.1400

Non-controlling Interests

Non-controlling interests in the Company represent OP Units held by the Predecessor's prior investors and certain sellers of properties to the Company and LTIP Units primarily issued to the Company's CEO in connection with the IPO and in lieu of cash compensation. In addition, during the year ended December 31, 2019, the Company issued 824,350 of OP Units in connection with a portfolio that the Company acquired and 5,298 LTIP Units to an employee. As of December 31, 2019, noncontrolling interests consisted of 2,157,462 OP Units and 120,004 LTIP Units and represented approximately 30.0% of the outstanding Operating Partnership units. Operating Partnership units and shares of common stock have essentially the same economic characteristics, as they share equally in the total net income or loss distributions of the Operating Partnership. Beginning on or after the date which is 12 months after the later of (i) the completion of the IPO or (ii) the date on which a person first became a holder of common units, each limited partner and assignees of limited partners will have the right, subject to the terms and conditions set forth in the partnership agreement to require the Operating Partnership to redeem all or a portion of the OP Units held by such limited partner or assignee in exchange for cash, or at the Company's sole discretion, in shares of the Company's Class A common stock, on a one-for-one basis determined in accordance with and subject to adjustment under the partnership agreement.

The Operating Partnership unitholders are entitled to share in cash distributions from the Operating Partnership in proportion to its percentage ownership of OP Units.

Restricted Stock and Other Awards

Pursuant to the Company's 2019 Equity Incentive Plan, or Equity Incentive Plan, the Company may grant equity incentive awards to its directors, officers, employees and consultants. Upon completion of the IPO, the Company issued 73,529 LTIP Units to the Company's CEO, 58,824 restricted shares of Class A common stock to the Company's president, 33,824 restricted shares of Class A common stock to other employees and 38,235 restricted shares of Class A common stock to the Company's non-employee directors under the Equity Incentive Plan. In addition, the Company issued 41,177 LTIP Units to the Company's CEO and an aggregate of 17,647 restricted shares of Class A common stock to its non-employee directors, in each case in lieu of cash compensation for the twelve-month period following completion of the IPO. The Company issued an aggregate 5,298 LTIP Units and 317 restricted shares of Class A common stock to certain employees after the completion of the IPO. The maximum number of shares of Class A common stock that is available to be issued under our Equity Incentive Plan is 541,584 shares. To the extent an award granted under the Equity Incentive Plan expires or terminates, the shares subject to any portion of the award that expires or terminates without having been exercised or paid, as the case may be, will become available for issuance of additional awards.

Awards issued in connection with the IPO will vest in three equal, annual installments on each of the three anniversaries of the date of grant. Awards issued to the Company's non-employee directors in lieu of cash compensation will fully vest on the first anniversary of the grant and awards issued as equity compensation vest in three equal, annual installments on each of the three anniversaries of the date of grant. Awards issued to the Company's CEO in lieu of cash compensation will cliff vest on the eighth anniversary of the date of grant. No forfeitures or vesting's occurred during the year ended December 31, 2019. The weighted average grant date fair value for all outstanding awards as of December 31, 2019 was $16.96. During the year ended December 31, 2019, the Company recognized compensation expense of $1.0 million related to all awards which is recorded in "General and administrative" on the Company's Consolidated and Combined Consolidated Statements of Operations. As of December 31, 2019, there was $3.6 million of total unrecognized compensation cost related to unvested awards, which is expected to be recognized over a weighted average period of 3.01 years.

In February 2020, in connection with the Equity Incentive Plan, the Company issued 53,230 LTIP Units to the Company's CEO for his 2019 incentive bonus and 57,367 restricted shares of Class A common stock to the Company's president for his 2019 incentive bonus and his election to defer of a portion of his 2020 annual salary. In addition, in February 2020, in connection with the Equity Incentive Plan, the Company issued 11,184 restricted shares of Class A common stock for annual grants, 23,424 restricted stock units (each, an "RSU," and collectively, "RSUs")  and 23,424 restricted shares of Class A common stock to other employees for 2019 incentive bonus and elections by certain employees to defer 2020 annual salary. RSUs reflect the right to receive shares of Class A common stock. RSUs issued for 2019 incentive bonuses will vest fully on the date of grant. RSUs issued in lieu of deferrals of 2020 annual salary cliff vest on December 31, 2020. LTIP Units issued to the Company's CEO and restricted shares of Class A common stock issued to the president in lieu of cash compensation cliff vest on the eighth anniversary of the date of grant. Certain restricted shares of Class A common stock issued to employees will vest in three equal, annual installments on each of the first three anniversaries of the date of grant, while other restricted shares of Class A common stock issued to employees in lieu of cash compensation cliff will vest on the eighth anniversary of the date of grant.

In March 2020, the Company issued an aggregate of 13,708 LTIP Units, 12,076 restricted shares of Class A common stock and 38,672 RSUs to certain officers of the Company. The LTIP Units and restricted shares of Class A common stock will vest in three equal, annual installments over the approximately three year period ending December 31, 2022, subject to continued employment with the Company and the RSUs are subject to the achievement of performance-based vesting conditions and continued employment with the Company. The RSUs are market-based awards and are subject to the achievement of performance-based hurdles relating to the Company's absolute total stockholder return and continued employment with the Company over the approximately three year period from the grant date through December 31, 2022. Such RSU recipients may earn up to 100% of the RSUs that were issued. Upon vesting pursuant to the terms of the RSUs, the RSUs that vest will be settled in shares of Class A common stock and the recipients will be entitled to receive the distributions that would have been paid with respect to a share of Class A common stock (for each share that vests) on or after the date the RSUs were initially granted.

Employee Stock Purchase Plan

In connection with the IPO, the Postal Realty Trust, Inc. 2019 Qualified Employee Stock Purchase Plan ("ESPP"), allows the Company's employees to purchase shares of the Company's Class A common stock at a discount. A total of 100,000 shares of Class A common stock will be reserved for sale and authorized for issuance under the ESPP. The Code permits us to provide up to a 15% discount on the lesser of the fair market value of such shares of stock at the beginning of the offering period and the code of the offering period. The initial offering period ended on December 31, 2019 and 3,538 shares were issued on January 3, 2020 under the ESPP. During the year ended December 31, 2019, the Company recognized compensation expense of $0.02 million which is recorded in "General and administrative" on the Company's Consolidated and Combined Consolidated Statements of Operations.