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Item 1. Financial Statements

2024-08-13 compared with 2024-05-15 · 301 added, 160 removed, 804 unchanged (36% of the section changed)

3 unchanged sentences

(In thousands, except share and per share amounts)

As of March 31, 2024

As of June 30, 2024

As of December 31, 2023

24 unchanged sentences

Accrued preferred distributions

10,280 10,464

Earn-Out Liability

3 unchanged sentences

Mobile Infrastructure Corporation Stockholders’ Equity

Preferred stock Series A, $ 0.0001 par value, 50,000 shares authorized, 2,483 and 2,812 shares issued and outstanding, with a stated liquidation value of $ 2,483,100 and $ 2,812,000 as of March 31, 2024 and December 31, 2023, respectively

Preferred stock Series 1, $ 0.0001 par value, 97,000 shares authorized, 34,470 and 36,677 shares issued and outstanding, with a stated liquidation value of $ 34,470,140 and $ 36,677,000 as of March 31, 2024 and December 31, 2023

Preferred stock Series 2, $ 0.0001 par value, 60,000 shares authorized, $ 46,000 issued and converted (stated liquidation value of zero as of March 31, 2024 and December 31, 2023, respectively)

Common stock, $ 0.0001 par value, 500,000,000 shares authorized, 28,637,379 and 27,858,539 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively 2 2

Warrants issued and outstanding – 2,553,192 warrants as of March 31, 2024 and December 31, 2023

Preferred stock Series A, $ 0.0001 par value, 50,000 shares authorized, 2,281 and 2,812 shares issued and outstanding, with a stated liquidation value of $ 2,281,000 and $ 2,812,000 as of June 30, 2024 and December 31, 2023, respectively

Preferred stock Series 1, $ 0.0001 par value, 97,000 shares authorized, 31,501 and 36,677 shares issued and outstanding, with a stated liquidation value of $ 31,501,000 and $ 36,677,000 as of June 30, 2024 and December 31, 2023, respectively

Preferred stock Series 2, $ 0.0001 par value, 60,000 shares authorized, 46,000 issued and converted (stated liquidation value of zero as of June 30, 2024 and December 31, 2023)

Common stock, $ 0.0001 par value, 500,000,000 shares authorized, 29,763,475 and 27,858,539 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Warrants issued and outstanding – 2,553,192 warrants as of June 30, 2024 and December 31, 2023

Additional paid-in capital

13 unchanged sentences

(In thousands, except share and per share amounts, unaudited)

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Managed property revenue

$ 7,226 $ — $ 12,727 $ —

Base rent income

1,523 1,951 3,166 4,031

Percentage rental income

517 5,263 2,200 10,286

Total revenues

9,266 7,214 18,093 14,317

Operating expenses

Property taxes

1,809 1,742 3,713 3,498

Property operating expense

1,824 533 3,345 1,051

Depreciation and amortization

2,096 2,130 4,189 4,256

General and administrative

2,909 2,444 5,926 5,063

Professional fees

260 327 949 795

Organizational, offering and other costs

Total expenses

8,898 7,260 18,279 14,780

Interest expense

( 3,087 ) ( 3,676 ) ( 6,066 ) ( 7,276 )

(Loss) Gain on sale of real estate

— — ( 42 ) 660

Other (expense) income, net

( 60 ) 15 ( 128 ) 30

Change in fair value of Earn-Out liability

Total other income (expense)

Total other expense

( 2,837 ) ( 3,661 ) ( 5,272 ) ( 6,586 )

( 2,469 ) ( 3,707 ) ( 5,458 ) ( 7,049 )

Net loss attributable to non-controlling interest

( 1,112 ) ( 1,989 ) ( 2,003 ) ( 3,784 )

Net loss attributable to Mobile Infrastructure Corporation’s stockholders

$ ( 1,357 ) $ ( 1,718 ) $ ( 3,455 ) $ ( 3,265 )

Preferred stock distributions declared - Series A

( 34 ) ( 54 ) ( 71 ) ( 108 )

Preferred stock distributions declared - Series 1

( 452 ) ( 696 ) ( 943 ) ( 1,392 )

Net loss attributable to Mobile Infrastructure Corporation’s common stockholders

$ ( 1,843 ) $ ( 2,468 ) $ ( 4,469 ) $ ( 4,765 )

Basic and diluted loss per weighted average common share:

Net loss per share attributable to Mobile Infrastructure Corporation’s common stockholders - basic and diluted

$ ( 0.06 ) $ ( 0.19 ) $ ( 0.16 ) $ ( 0.36 )

Weighted average common shares outstanding, basic and diluted

29,225,378 13,089,848 28,731,365 13,089,848

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

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE THREE months ended MARCH 31, 2024 and 2023

FOR THE THREE and six months ended june 30, 2024 and 2023

(In thousands, except share amounts, unaudited)

22 unchanged sentences

36,953 $ — 28,637,379 $ 2 $ 3,319 $ 240,994 $ ( 136,389 ) $ 95,177 $ 203,103

Equity-based payments

— — — — — 402 — 1,308 1,710

Distributions to non-controlling interest holders

— — — — — — — ( 46 ) ( 46 )

Declared distributions – Series A ($ 14.38 per share)

— — — — — ( 34 ) — — ( 34 )

Declared distributions – Series 1 ($ 13.75 per share)

— — — — — ( 452 ) — — ( 452 )

Conversions - Series 1

( 2,969 ) — 1,053,518 — — 841 — — 841

Conversions - Series A

( 202 ) — 72,578 — — 61 — — 61

— — — — — — ( 1,357 ) ( 1,112 ) ( 2,469 )

Balance, June 30, 2024

33,782 $ — 29,763,475 $ 2 $ 3,319 $ 241,812 $ ( 137,746 ) $ 95,327 $ 202,714

Preferred stock

5 unchanged sentences

Balance, December 31, 2022 (as previously reported)

42,673 $ — 7,762,375 $ — $ 3,319 $ 193,176 $ ( 109,168 ) $ 99,681 $ 187,008

Retroactive application of the recapitalization

— — 5,327,473 — — — — — —

Balance, December 31, 2022 (as adjusted)

42,673 $ — 13,089,848 $ — $ 3,319 $ 193,176 $ ( 109,168 ) $ 99,681 $ 187,008

Equity-based payments

— — — — — — — 1,484 1,484

Distributions to non-controlling interest holders

— — — — — — — ( 306 ) ( 306 )

Declared distributions – Series A ($ 18.75 per share)

— — — — — ( 54 ) — — ( 54 )

Declared distributions – Series 1 ($ 17.50 per share)

— — — — — ( 696 ) — — ( 696 )

— — — — — — ( 1,548 ) ( 1,795 ) ( 3,343 )

Balance, March 31, 2023

42,673 $ — 13,089,848 $ — $ 3,319 $ 192,426 $ ( 110,716 ) $ 99,064 $ 184,093

Equity-based payments

— — — — — — — 1,214 1,214

Distributions to non-controlling interest holders

— — — — — — — ( 19 ) ( 19 )

Declared distributions – Series A ($ 18.75 per share)

— — — — — ( 54 ) — — ( 54 )

Declared distributions – Series 1 ($ 17.50 per share)

— — — — — ( 696 ) — — ( 696 )

— — — — — — ( 1,718 ) ( 1,989 ) ( 3,707 )

Balance, June 30, 2023

42,673 $ — 13,089,848 $ — $ 3,319 $ 191,676 $ ( 112,434 ) $ 98,270 $ 180,831

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

2 unchanged sentences

(In thousands, unaudited)

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Cash flows from operating activities:

$ ( 5,458 ) $ ( 7,049 )

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

1 unchanged sentence

Amortization of loan costs

Gain on settlement of liability ( 295 ) —

Loss on interest rate cap

5 unchanged sentences

Accounts payable and accrued expenses

( 1,566 ) 378

Deferred offering costs

Accounts receivable

( 1,405 ) ( 91 )

Net cash (used in) operating activities

$ ( 1,011 ) $ ( 2,221 )

Cash flows from investing activities:

Capital expenditures

( 351 ) ( 1,098 )

Capitalized technology

(Payments) proceeds on sale of investment in real estate

( 155 ) 1,475

Net cash (used in) provided by investing activities

1 unchanged sentence

Payments on notes payable

( 7,084 ) ( 2,609 )

Proceeds from notes payable

Distributions to non-controlling interest holders

( 92 ) ( 325 )

Net cash (used in) financing activities

( 1,880 ) ( 2,934 )

Net change in cash and cash equivalents and restricted cash

( 3,397 ) ( 4,801 )

Cash and cash equivalents and restricted cash, beginning of period

16,711 10,974

Cash and cash equivalents and restricted cash, end of period

$ 13,314 $ 6,173

Reconciliation of Cash and Cash Equivalents and Restricted Cash:

Cash and cash equivalents at beginning of period

$ 11,134 $ 5,758

Restricted cash at beginning of period

Cash and cash equivalents and restricted cash at beginning of period

$ 16,711 $ 10,974

Cash and cash equivalents at end of period

$ 8,690 $ 2,029

Restricted cash at end of period

Cash and cash equivalents and restricted cash at end of period

$ 13,314 $ 6,173

Supplemental disclosures of cash flow information:

Interest Paid

$ 5,721 $ 6,102

Non-cash investing and financing activities:

Dividends declared not yet paid

Distributions paid in common stock

Right of use asset and lease liability

Accrued preferred distributions paid in common stock

Right of use asset obtained in exchange for lease obligation

Note receivable related to disposition of property

4 unchanged sentences

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

June 30, 2024

Note A — Organization and Business Operations

1 unchanged sentence

III or “FWAC”) is a Maryland corporation.

We focus on acquiring, owning and leasing parking facilities and related infrastructure, including parking lots, parking garages and other parking structures throughout the United States.

We focus on acquiring, owning and optimizing parking facilities and related infrastructure, including parking lots, parking garages and other parking structures throughout the United States.

We target both parking garage and surface lot properties primarily in the top 50 U.S.

Metropolitan Statistical Areas, with proximity to key demand drivers, such as commerce, events and venues, government and institutions, hospitality and multifamily central business districts.

As of March 31, 2024, we own 42 parking facilities in 21 separate markets throughout the United States, with a total of approximately 15,400 parking spaces and approximately 5.2 million square feet.

We also own approximately 0.2 million square feet of retail/commercial space adjacent to its parking facilities.

As of June 30, 2024, we own 42 parking facilities in 21 separate markets throughout the United States, with a total of approximately 15,400 parking spaces and approximately 5.2 million square feet.

We also own approximately 0.2 million square feet of retail/commercial space adjacent to our parking facilities.

FWAC was a blank check, Cayman Islands exempted company, incorporated on February 19, 2021 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more business entities.

10 unchanged sentences

The Operating Company is managed by a board of directors, one appointed by the Company and one appointed by the other members of the Operating Company.

Currently, the two directors of the Operating Company are Manuel Chavez, III, our Chief Executive Officer and a director, and Stephanie Hogue, our President, Chief Financial Officer and a director.

Currently, the two directors of the Operating Company are Manuel Chavez, III, our Chief Executive Officer and a director, and Stephanie Hogue, our President and a director.

The Company owns approximately 68.1 % of the Common Units of the Operating Company.

Color Up, LLC, a Delaware limited liability company (“Color Up”) and HSCP Strategic III, LP, a Delaware limited partnership ( “HS3” ), are also members of the Operating Company and own approximately 26.4 % and 6.4 %, respectively, of the outstanding Common Units.

Color Up is our largest stockholder and is controlled by Mr.

Hogue and, Jeffrey Osher, a director of the Company.

HS3 is controlled by Mr.

The remaining Common Units are held by certain of our executive officers and directors (directly or indirectly) and outside investors.

The Company is publicly traded on the NYSE American under the ticker “BEEP.” As a result of the Merger:

3 unchanged sentences

The outstanding common stock warrant of Legacy MIC to purchase 1,702,128 shares of Legacy MIC common stock at an exercise price of $ 11.75 per share became a warrant to purchase 2,553,192 shares of common stock of the Company at an exercise price of $ 7.83 per share.

Additionally, on June 15, 2023, HS3, Harvest Small Cap Partners, L.P.

Additionally, on June 15, 2023, HSCP Strategic III, LP, a Delaware limited partnership ( “HS3” ), Harvest Small Cap Partners, L.P.

and Harvest Small Cap Partners Master, Ltd., entities controlled by Mr.

9 unchanged sentences

The business affairs of the Company are controlled by the Board consisting of eight individuals, seven of whom were board members of Legacy MIC and one designated by FWAC (the Board has subsequently reduced to seven individuals);

The management of the Company is led by Legacy MIC’s Chief Executive Officer, Manuel Chavez, III, and President and Chief Financial Officer, Stephanie Hogue;

The management of the Company is led by Legacy MIC’s Chief Executive Officer, Manuel Chavez, III, and President, Stephanie Hogue;

Legacy MIC was significantly larger than FWAC in terms of revenue, total assets (excluding cash) and employees.

11 unchanged sentences

Certain prior period amounts have been reclassified to conform to the current period presentation.

Operating results for the three months ended March 31, 2024 , are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

There were no significant changes to our significant accounting policies during the three months ended March 31, 2024 other than those noted below.

Operating results for the three and six months ended June 30, 2024 , are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

There were no significant changes to our significant accounting policies during the six months ended June 30, 2024 other than those noted below.

For a full summary of our accounting policies, refer to our Annual Report on Form 10 -K for the fiscal year ended December 31, 2023 filed with the SEC on March 22, 2024.

4 unchanged sentences

We have $ 93.1 million of debt maturing within twelve months of the date of the issuance of the Quarterly Report which is comprised of $ 58.7 million related to the Revolving Credit Facility and $ 34.4 million of notes payable.

We do not currently have sufficient cash on hand, liquidity or projected future cash flows to repay these outstanding amounts upon maturity.

These conditions and events raise substantial doubt about the Company’s ability to continue as a going concern.

We are currently analyzing financial and strategic alternatives in order to satisfy these debt maturities.

While there can be no assurance that we will satisfy the debt prior to or at maturity, management has determined it is probable that we will be able to address these maturities by (i) refinancing the Revolving Credit facility or executing extension options through June 2025 made available under the Third Amendment to the Credit Agreement effective March 1, 2024 and (ii) refinancing the notes payable and/or selling the real estate investments and utilizing the sales proceeds to satisfy the related notes payable.

As such, we have concluded that these plans alleviate substantial doubt about our ability to continue as a going concern.

While there can be no assurance that we will satisfy the debt prior to or at maturity, management has determined it is probable that it will be able to address the notes payable maturities by refinancing the notes payable and/or selling the real estate investments and utilizing the sales proceeds to satisfy the related notes payable.

With respect to the Revolving Credit Facility, we are evaluating several refinancing options supported by current term sheets received from multiple lenders.

We expect to execute on available options in 2024.

However, the finalization of the refinancing under these options are not fully within our control and therefore cannot be deemed probable and thus our plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts of liabilities that might result from the outcome of this uncertainty.

Use of Estimates

4 unchanged sentences

Our operators may act as agents collecting revenues on our behalf or may act as lessee if under a lease agreement.

The revenue from locations where SP + Corporation (Nasdaq:

SP) (“SP+”) acts as either a lease tenant or an operator agent represented 58.8 % and 60.9 % of our revenue, excluding commercial revenue, for the three months ended March 31, 2024 and 2023, respectively.

In addition, we had concentrations in Cincinnati ( 18.7 % and 19.4 %), Detroit ( 10.4 % and 10.3 %), and Chicago ( 9.2 % and 9.1 %) based on gross book value of real estate as of March 31, 2024 and December 31, 2023, respectively.

We had concentrations of our outstanding accounts receivable balance with SP+ of 34.9 % and 60.1 % as of March 31, 2024 and December 31, 2023, respectively.

During the first quarter of 2024, the majority of these receivable balances represent cash paid by parkers that was collected on our behalf by these operators.

The revenue from locations where Metropolis Technologies, Inc.

(“Metropolis”) acts as either a lease tenant or an operator agent represented 56.9 % and 61.0 % of our revenue, excluding commercial revenue, for the six months ended June 30, 2024 and 2023, respectively.

In addition, we had concentrations in Cincinnati ( 18.7 % and 19.4 %), Detroit ( 10.4 % and 10.3 %), and Chicago ( 9.2 % and 9.1 %) based on gross book value of real estate as of June 30, 2024 and December 31, 2023, respectively.

We had concentrations of our outstanding accounts receivable balance with Metropolis of 32.2 % and 60.1 % as of June 30, 2024 and December 31, 2023, respectively.

During the six months ended June 30, 2024, the majority of these receivable balances represent cash paid by parkers that was collected on our behalf by these operators.

Revenue Recognition

During the first quarter of 2024, 26 of our parking facilities converted from lease arrangements with operators to contracts with the operator to provide services for a set fee.

During the first half of 2024, 27 of our parking facilities converted from lease arrangements with operators to contracts with the operator to provide services for a set fee.

Under these contracts, the operators will run the day-to-day activities at the facilities under our direction.

6 unchanged sentences

We apply judgment in assessing the ultimate realization of our receivables and we estimate an allowance for doubtful accounts based on various factors, such as the aging of our receivables, historical experience, and the financial condition of our obligors.

Allowance for doubtful accounts was immaterial as of March 31, 2024 and December 31, 2023.

Allowance for doubtful accounts was immaterial as of June 30, 2024 and December 31, 2023.

Legacy MIC previously elected to be taxed as a REIT for federal income tax purposes and operated in a manner that allowed Legacy MIC to qualify as a REIT through December 31, 2019.

3 unchanged sentences

A full valuation allowance for deferred tax assets was historically provided each year since we believed that as a REIT it was more likely than not that it would not realize the benefits of its deferred tax assets.

As a taxable C Corporation, we have evaluated our deferred tax assets for the three months ended March 31, 2024 , which consist primarily of net operating losses and our investment in the Operating Company.

As a taxable C Corporation, we have evaluated our deferred tax assets for the six months ended June 30, 2024 , which consist primarily of net operating losses and our investment in the Operating Company.

Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets.

A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three -year period ended March 31, 2024.

A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three -year period ended June 30, 2024.

Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth.

We have continued to generate a net loss and as such have determined that we will continue to record a full valuation allowance against our deferred tax assets for the three months ended March 31, 2024 .

We have continued to generate a net loss and as such have determined that we will continue to record a full valuation allowance against our deferred tax assets for the six months ended June 30, 2024 .

A change in circumstances may cause us to change our judgment about whether deferred tax assets should be recorded, and further whether any such assets would more likely than not be realized.

13 unchanged sentences

December 31, 2024

We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements.

We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements, including additional required disclosures.

ASU 2023 - 09—Income Taxes (TOPIC 740 ):

5 unchanged sentences

Scope Application of Profits Interest and Similar Awards The amendment clarifies how an entity determines whether a profits interest or similar award is ( 1 ) within the scope of ASC 718 or ( 2 ) not a share-based payment arrangement and therefore within the scope of other guidance.

December 31, 2024 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements.

January 1, 2025 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements.

Note C — Reverse Recapitalization

31 unchanged sentences

The Earn-Out Shares vest if certain milestones related to share price are achieved as further described in Footnote M.

Because the shares have voting rights but have contingent vesting conditions, we have included the shares as issued but not outstanding on the face of the Consolidated Balance Sheets.

Because the shares have voting rights but have contingent vesting conditions, we consider the shares to be issued but not outstanding.

The estimated fair value of the Earn-Out Shares was recorded as approximately $ 5.8 million as of the Closing Date and is presented as Earn-Out Liability on the Consolidated Balance Sheets.

29 unchanged sentences

We disaggregate revenue from contracts with customers by Transient Parkers and Contract Parkers.

We have concluded that such disaggregation of revenue best depicts the overall economic nature and timing of our revenue and cash flows affected by the economic factors of the respective contractual arrangement.

Disaggregated revenue for the three months ended March 31, 2024 are as follows (dollars in thousands):

For the Three Months Ended March 31, 2024

We have concluded that such disaggregation of revenue best depicts the overall nature and timing of our revenue and cash flows affected by the economic factors of the respective contractual arrangement.

Disaggregated revenue for the three and six months ended June 30, 2024 are as follows (dollars in thousands):

For the Three Months Ended June 30, 2024

For the Six Months Ended June 30, 2024

Transient Parkers

$ 4,697 $ 7,971

Contract Parkers

1 unchanged sentence

Total Managed Property Revenue

$ 7,226 $ 12,727

Ancillary revenue includes contracted revenue for other uses outside of parking, such as billboard revenue, and is recognized over time.

3 unchanged sentences

Receivables may be from parking customers who have a contractual obligation to pay for their usage or from the operators of the facilities who have collected parking fees on our behalf.

As of March 31, 2024, we had $ 1.0 million of outstanding accounts receivable related to our managed property revenue.

It is our standard procedure to bill Contract Parkers fifteen days prior to when they will be using the facility in accordance with agreed-upon contractual terms.

As of June 30, 2024, we had $ 3.4 million of outstanding accounts receivable related to our managed property revenue.

It is our standard procedure to bill Contract Parkers in the month prior to when they will be using the facility in accordance with agreed-upon contractual terms.

Billing typically occurs prior to revenue recognition, resulting in contract liabilities.

The majority of any contract liability will be recognized at end of the following month.

Changes in deferred revenue primarily include prepayments for future parking months and reductions due to revenue recognition.

Contract liabilities and deferred revenue are included in Accounts Payable and Accrued Expenses on the Consolidated Balance Sheets.

The following table provides information about changes to deferred revenue during the three months ended March 31, 2024 ( dollars in thousands):

For the Three Months Ended March 31, 2024

Balance, beginning of period

Additional deferred revenue

Recognition of revenue from deferred revenue

Balance, end of period

Changes in deferred revenue primarily include prepayments for future parking months and recognition of previously deferred revenue.

No material amounts in deferred revenue represent prepayments longer than a single month.

As of June 30, 2024, we had approximately $ 0.3 million of deferred managed property revenue included in Accounts Payable and Accrued Expenses on the Consolidated Balance Sheets.

There was no deferred managed property revenue as of December 31, 2023.

Note E — Acquisitions and Dispositions of Investments in Real Estate

2 unchanged sentences

Under the terms of the financing arrangement, the buyer will pay interest of 8.0 % on a $ 3.12 million dollar note for a term of 24 months, at which time the principal amount of the loan will be due.

The note is recorded as Notes Receivable on the Consolidated Balance Sheets and the interest income is recorded as Other Income on the Consolidated Statements of Operations.

The note is recorded as Note Receivable on the Consolidated Balance Sheets and the interest income is recorded as Other Income on the Consolidated Statements of Operations.

In July 2024, we sold one parking lot in Clarksburg, West Virginia for approximately $ 0.5 million.

We received proceeds of approximately $ 0.4 million, after transaction costs, which were used to pay down a portion of the outstanding balance on the Revolving Credit Facility, as defined below.

In February 2023, we sold a parking lot located in Wildwood, New Jersey for $ 1.5 million, resulting in a gain on sale of real estate of approximately $ 0.7 million.

2 unchanged sentences

A schedule of our intangible assets and related accumulated amortization as of

March 31, 2024 and

June 30, 2024 and

December 31, 2023 is as follows (dollars in thousands):

As of March 31, 2024

As of June 30, 2024

As of December 31, 2023

14 unchanged sentences

Amortization of the in-place lease value, lease commissions and acquired technology are included in Depreciation and Amortization in our Consolidated Statements of Operations.

Amortization expense associated with intangible assets totaled a pproximately $ 0.2 million for both the three months ended March 31, 2024 and 2023.

Estimated future amortization of intangible assets as of March 31, 2024 for each of the next five years is as follows (dollars in thousands):

Amortization expense associated with intangible assets totaled a pproximately $ 0.2 million for both the three months ended June 30, 2024 and 2023 and approximately $ 0.4 million for both the six months ended June 30, 2024 and 2023.

Estimated future amortization of intangible assets as of June 30, 2024 for each of the next five years is as follows (dollars in thousands):

In-place lease value

5 unchanged sentences

Note G — Notes Payable and Revolving Credit Facility

As of March 31, 2024 , the principal balances on notes payable are as follows (dollars in thousands):

As of June 30, 2024 , the principal balances on notes payable are as follows (dollars in thousands):

Original Debt Amount

88 unchanged sentences

Some notes contain various terms and conditions including debt service coverage ratios and debt yield limits.

As of March 31, 2024 , borrowers for two of our loans totaling $ 38.0 million, failed to meet certain loan covenants.

As a result, we are subject to additional cash management procedures, which resulted in approximately $ 1.0 million of restricted cash as of March 31, 2024 .

As of June 30, 2024 , borrowers for one of our loans totaling $ 26.4 million, failed to meet certain loan covenants.

As a result, we are subject to additional cash management procedures, which resulted in approximately $ 0.6 million of restricted cash as of June 30, 2024 .

In order to exit cash management, certain debt service coverage ratios or debt yield tests must be exceeded for two consecutive quarters to return to less restrictive cash management procedures.

As of March 31, 2024 , future principal payments on notes payable are as follows (dollars in thousands):

As of June 30, 2024 , future principal payments on notes payable are as follows (dollars in thousands):

2024 (remainder)

8 unchanged sentences

Exercising an option following that maturity date would result in an interest rate spread above SOFR of 3.5 %.

In March 2024, we requested, and KeyBank accepted, a fixed all-in rate on our Revolving Credit Facility of 8.5 % from April 1 until July 1, 2024.

As of March 31, 2024, the balance of unamortized loan fees associated with the Revolving Credit Facility is $ 0.3 million which is being amortized to Interest Expense, Net in the Consolidated Statements of Operations over the remaining term.

In June 2024, we requested, and KeyBank accepted, a fixed all-in rate on our Revolving Credit Facility of 8.4 % from July 1 until October 1, 2024.

As of June 30, 2024, the balance of unamortized loan fees associated with the Revolving Credit Facility is $ 0.1 million which is being amortized to Interest Expense, Net in the Consolidated Statements of Operations over the remaining term.

Note H — Equity

8 unchanged sentences

however, such distributions will continue to accrue in accordance with the terms of the Series A Preferred Stock.

As of March 31, 2024 and December 31, 2023, approximately $ 0.7 million and $ 0.8 million of Series A Preferred Stock distributions that were accrued and unpaid, respectively, are included in Accrued Preferred Distributions on the Consolidated Balance Sheet.

As of June 30, 2024 and December 31, 2023, approximately $ 0.7 million and $ 0.8 million of Series A Preferred Stock distributions that were accrued and unpaid, respectively, are included in Accrued Preferred Distributions on the Consolidated Balance Sheet.

Subject to our redemption rights, each share of Series A Preferred Stock is convertible into common stock at the election of the holder thereof by delivery of a written notice.

Each share of Series A Preferred Stock will convert into a number of shares of common stock determined by dividing the sum of (i) 100% of the Series A Preferred Stock stated value, which is $1,000, plus (ii) any accrued but unpaid dividends to, but not including, the date of conversion by the volume weighted average price per share of common stock for the 20 trading days prior to the delivery date of the receipt of the notice.

During the first quarter of 2024 , approximately 300 shares of Series A Preferred Stock converted to approximately 100,000 shares of common stock and the payment of accrued distributions in common stock are shown as a non-cash item in the Consolidated Statements of Cash Flows.

During the six months ended June 30, 2024 , approximately 500 shares of Series A Preferred Stock converted to approximately 172,000 shares of common stock and the payment of accrued distributions in common stock are shown as a non-cash item in the Consolidated Statements of Cash Flows.

Series 1 Convertible Redeemable Preferred Stock

2 unchanged sentences

On March 24, 2020, the Legacy MIC Board unanimously authorized the suspension of the payment of distributions on the Series 1 Preferred Stock, however, such distributions will continue to accrue in accordance with the terms of the Series 1 Preferred Stock.

As of March 31, 2024 and December 31, 2023, approximately $ 9.5 million and $ 9.7 million of Series 1 Preferred Stock distributions that were accrued and unpaid, respectively, are included in Accrued Preferred Distributions on the consolidated balance sheet.

As of June 30, 2024 and December 31, 2023, approximately $ 9.2 million and $ 9.7 million of Series 1 Preferred Stock distributions that were accrued and unpaid, respectively, are included in Accrued Preferred Distributions on the consolidated balance sheet.

Subject to our redemption rights, each share of Series 1 Preferred Stock is convertible into common stock at the election of the holder thereof by delivery of a written notice.

Each share of Series 1 Preferred Stock will convert into a number of shares of common stock determined by dividing the sum of (i) 100% of the Series 1 Preferred Stock stated value, which is $1,000, plus (ii) any accrued but unpaid dividends to, but not including, the date of conversion by the volume weighted average price per share of common stock for the 20 trading days prior to the receipt of the notice.

During the first quarter of 2024 , approximately 2,200 shares of Series 1 Preferred Stock converted to approximately 680,000 shares of common stock and the payment of accrued distributions in common stock are shown as a non-cash item in the Consolidated Statements of Cash Flows.

In accordance with its warrant agreement between Legacy MIC and Color Up, dated August 25, 2021 ( the “Warrant Agreement”), Color Up had the right to purchase up to 1,702,128 shares of common stock, at an exercise price of $ 11.75 per share for an aggregate cash purchase price of up to $ 20.0 million (the “Common Stock Warrants”).

During the six months ended June 30, 2024 , approximately 5,200 shares of Series 1 Preferred Stock converted to approximately 1.7 million shares of common stock and the payment of accrued distributions in common stock are shown as a non-cash item in the Consolidated Statements of Cash Flows.

In accordance with its warrant agreement between Legacy MIC and Color Up, LLC, a Delaware limited liability company controlled by Mr.

Hogue, and Mr.

Osher (“Color Up”) dated August 25, 2021 ( the “Warrant Agreement”), Color Up had the right to purchase up to 1,702,128 shares of common stock, at an exercise price of $ 11.75 per share for an aggregate cash purchase price of up to $ 20.0 million (the “Common Stock Warrants”).

Each whole Common Stock Warrant entitled the registered holder thereof to purchase one whole share of common stock at a price of $ 11.75 per share, subject to customary adjustments, at any time following a “Liquidity Event,” which was defined as an initial public offering and/or listing of the common stock on the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange.

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Subsequent to the Closing date, on August 29, 2023, New MIC and Color Up entered into an Amended and Restated Warrant Agreement (the “Amended Warrant Agreement”), pursuant to which the Warrant Agreement was amended and restated to (i) reflect the effects of the Merger (including but not limited to the reduction in the exercise price of the Common Stock Warrants from $ 11.75 to $ 7.83 per share and the increase in the number of the underlying shares from 1,702,128 shares of Legacy MIC common stock to 2,553,192 shares of our common stock) and (ii) permit Color Up to exercise the Common Stock Warrants on a cashless basis at Color Up’s option.

Subsequently, Color Up distributed the entirety of the Common Stock Warrants to HS3 and Bombe Asset Management, LLC, an entity owned and controlled by Mr.

Chavez and Ms.

The Common Stock Warrants expire on August 25, 2026 and are classified as equity and recorded at the issuance date fair value.

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Convertible Noncontrolling Interests

As of March 31, 2024, the Operating Company had approximately 42.6 million Common Units outstanding, excluding any equity incentive units granted.

As of June 30, 2024, the Operating Company had approximately 43.7 million Common Units outstanding, excluding any equity incentive units granted.

Beginning six months after first acquiring Common Units, each member will have the right to redeem the Common Units for either cash or common stock, subject to both our discretion and the terms and conditions set forth in the limited liability company agreement of the Operating Company (the “Operating Agreement”).

The Common Units not held by the Company outstanding as of March 31, 2024 are classified as noncontrolling interests within permanent equity on our Consolidated Balance Sheet.

The Common Units not held by the Company outstanding as of June 30, 2024 are classified as noncontrolling interests within permanent equity on our Consolidated Balance Sheet.

Note I — Stock-Based Compensation

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At the same time, 0.2 million LTIP units were granted in lieu of his 2024 salary, which will vest in four equal increments each quarter over the next twelve months.

0.4 million LTIP units and 0.2 million restricted stock units awarded at a grant date fair value of $ 3.84 to our executives representing the long term incentive awards for 2023 and 2024.

0.4 million LTIP units and 0.2 million restricted stock units awarded at a grant date fair value of $ 3.84 to two of our executives representing the long term incentive awards for 2023 and 2024.

These awards will vest on a graded schedule over three years.

0.1 million LTIP Units and 0.1 million restricted stock units with a grant date fair value of $ 6.11 to our executives using the Monte Carlo method.

0.1 million LTIP Units and 0.1 million restricted stock units with a grant date fair value of $ 6.11 to two executives using the Monte Carlo method.

These awards will vest based upon the performance of our stock versus the Russell 2000 Index three years from the grant date.

0.2 million restricted stock units awarded to the independent directors as consideration for service in 2023 and 2024.

These awards have a grant date fair value of $ 3.84 and will vest twelve months on the one year anniversary of the grant date.

The following table sets forth a roll forward of all incentive equity awards for the three months ended March 31, 2024:

As of March 31, 2024

These awards have a grant date fair value of $ 3.84 and will vest on the one year anniversary of the grant date.

In May 2024, the Compensation Committee of the Board of Directors approved the issuance of the following awards:

approximately 56,000 restricted stock units awarded to one executive at a grant date fair value of $ 3.60 that vest on graded schedule over three years.

two tranches of 0.1 million restricted stock units that vest upon achievement of stock price performance goals (the “Founders’ Award”).

The fair value of both tranches was determined using the Monte Carlo method.

The first tranche of the awards, with a performance period through December 31, 2026, has an immaterial grant date fair value and the second tranche, with a performance period through December 31, 2028, has a grant date fair value of $ 0.84 per share.

Additionally, the Compensation Committee approved the modification of 2.3 million performance units previously granted to two executives to align the performance conditions and performance periods to the Founders’ Award and the Earn-Out Shares.

The incremental compensation expense of approximately $ 0.9 million will be recognized through the modified performance period of December 31, 2028 in General and Administrative on the Consolidated Statements of Operations.

approximately 33,000 restricted stock units to one executive with a grant date fair value of $ 6.11 using the Monte Carlo method.

This award will vest based upon the performance of our stock versus the Russell 2000 Index through January 2027.

The following table sets forth a roll forward of all incentive equity awards for the six months ended June 30, 2024:

Number of Incentive Equity Awards

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( 399,399 ) 4.71

Unvested - March 31, 2024

Unvested - June 30, 2024

4,095,846 $ 6.70

We recognized $ 1.8 million and $ 1.7 million of equity-based compensation expense for the three months ended March 31, 2024 and 2023, respectively, which is included in General and Administrative in the Consolidated Statements of Operations.

The remaining unrecognized compensation cost of approximately $ 5.6 million, which excludes $ 11.6 million related to awards deemed not probable to achieve their performance target, will be recognized over a weighted average term of 1.5 years.

We recognized $ 3.4 million and $ 3.1 million of equity-based compensation expense for the six months ended June 30, 2024 and 2023, respectively, which is included in General and Administrative in the Consolidated Statements of Operations.

The remaining unrecognized compensation cost of approximately $ 5.4 million will be recognized over a weighted average term of 2.1 years.

Performance based awards are valued at target and may have the ability to earn additional or fewer shares based on level of achievement.

Note J — Earnings Per Share

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We include the effect of participating securities in basic and diluted earnings per share computations using the two -class method of allocating distributed and undistributed earnings when the two -class method is more dilutive than the treasury stock method.

Outstanding warrants and stock-based compensation were antidilutive as a result of the net loss for the three months ended March 31, 2024 and 2023 and therefore were excluded from the dilutive calculation.

We include unvested PUs as contingently issuable shares in the computation of diluted EPS once the market criteria is met, assuming that the end of the reporting period is the end of the contingency period.

We had 3.9 million unvested service-and performance-based awards which are considered antidilutive to the dilutive loss per share calculation for the three months ended March 31, 2024 and 2023.

Outstanding warrants and stock-based compensation were antidilutive as a result of the net loss for the three and six months ended June 30, 2024 and 2023 and therefore were excluded from the dilutive calculation.

We include unvested performance units as contingently issuable shares in the computation of diluted EPS once the market criteria are met, assuming that the end of the reporting period is the end of the contingency period.

We had 4.1 million unvested service- and performance-based awards which are considered antidilutive to the dilutive loss per share calculation for the three and six months ended June 30, 2024 and 2023.

The following table reconciles the numerator and denominator used in computing our basic and diluted per-share amounts for net loss attributable to common stockholders for the

three months ended March 31, 2024 and 2023 (dollars in thousands):

six months ended June 30, 2024 and 2023 (dollars in thousands):

For the Three Months Ended

March 31, 2024

March 31, 2023

For the Six Months Ended

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Net loss attributable to MIC

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The lease is accounted for as an operating lease under ASU 2016 - 02, Leases – (Topic 842 ).

We recognized a Right of Use (“ROU”) Leased Asset and a Right of Use (“ROU”) Lease Liability on the lease commencement date which is included in Land and Improvements and Accounts Payable and Accrued Expenses, respectively, on the Consolidated Balance Sheets.

Through the discounting of the remaining lease payments at our incremental borrowing rate of 8.42 %, the value of both the ROU asset and ROU liability on March 31, 2024 was approximately $ 0.3 million.

We recognized approximately $ 9,000 of operating lease expense during the three months ended March 31, 2024.

We recognized a Right of Use (“ROU”) Leased Asset and a ROU Lease Liability on the lease commencement date which is included in Land and Improvements and Accounts Payable and Accrued Expenses, respectively, on the Consolidated Balance Sheets.

Through the discounting of the remaining lease payments at our incremental borrowing rate of 8.42 %, the value of both the ROU asset and ROU liability recognized at commencement date was approximately $ 0.3 million.

We recognized approximately $ 11,000 and $ 20,000 of operating lease expense during the three and six months ended June 30, 2024, respectively.

This expense is included in Property Operating Expense on the Consolidated Statements of Operations.

Changes in the lease liability and lease asset amortization expense were not material in the Statement of Cash Flows.

As of March 31, 2024, future lease payments are as follows (dollars in thousands):

As of March 31, 2024

As of June 30, 2024, future lease payments are as follows (dollars in thousands):

As of June 30, 2024

2024 (remainder)

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Louis and MVP St.

Louis Cardinal Lot Master Tenant, LLC, which had total assets of approximately $ 12.0 and $ 13.0 million (substantially all real estate investments) and liabilities of approximately $ 6.1 and $ 6.6 million (substantially all mortgage debt) as of March 31, 2024 and December 31, 2023, respectively.

Louis Cardinal Lot Master Tenant, LLC, which had total assets of approximately $ 12.2 and $ 13.0 million (substantially all real estate investments) and liabilities of approximately $ 6.3 and $ 6.6 million (substantially all mortgage debt) before consolidation as of June 30, 2024 and December 31, 2023, respectively.

Note M — Fair Value

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Due to their short maturities or recent nature, the carrying amounts of these assets and liabilities approximate fair value.

The estimated fair value of our debt (including notes payable and the Revolving Credit Facility) was derived using Level 2 inputs and approximates $ 185.3 million and $ 182.9 million as of March 31, 2024 and December 31, 2023, respectively.

The estimated fair value of our debt (including notes payable and the Revolving Credit Facility) was derived using Level 2 inputs and approximates $ 183.7 million and $ 182.9 million as of June 30, 2024 and December 31, 2023, respectively.

Recurring and Nonrecurring Fair Value Measurements

Our Earn-Out Shares and interest rate cap are measured and recognized at fair value on a recurring basis, while certain real estate assets and liabilities are measured and recognized at fair value as needed.

Fair value measurements that occurred as of and during the three months ended March 31, 2024 and the year ended December 31, 2023 were as follows (in thousands):

March 31, 2024

Fair value measurements that occurred as of and during the six months ended June 30, 2024 and the year ended December 31, 2023 were as follows (in thousands):

June 30, 2024

December 31, 2023

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Because we are a newly-listed company with limited share activity, we were required to exercise judgment in estimating expected volatility ( 30.0 % to 45.0 %) and in selection of comparable companies.

We recognized a gain of approximately $ 0.7 million during the three months ended March 31, 2024, as a result of changes in the estimated fair values after the Merger.

We recognized a gain of approximately $ 1.0 million during the six months ended June 30, 2024, as a result of changes in the estimated fair values after the Merger.

The gain is recorded as the Change in Fair Value of Earn-Out Liability in the Consolidated Statements of Operations.

The following table reflects the change in value during the three months ended March 31, 2024 (in thousands):

The following table reflects the change in value during the six months ended June 30, 2024 (in thousands):

Level 3 Liability

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Change in fair value recognized in earnings

Balance as of March 31, 2024

Balance as of June 30, 2024

Our real estate assets are measured and recognized at fair value on a nonrecurring basis when we determine an impairment has occurred.

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Because we use estimates and assumptions regarding an assets’ future performance and cash flows as well as market conditions and discount rates, we determined the impaired assets would fall under Level 3 of the fair value hierarchy.

During the three months ended March 31, 2024, we impaired approximately $ 0.2 million of our real estate assets as a result of a planned disposition of a property.

During the six months ended June 30, 2024, we impaired approximately $ 0.2 million of our real estate assets as a result of a planned disposition of a property.

Note N — Commitments and Contingencies

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Legacy MIC filed an appeal.

As a result of the court’s summary judgment, in December 2022 we recognized a charge of $ 0.7 million for the full estimated amount of damages (including legal fees and costs).

In July 2024, the Texas Court of Appeals, Second District, reversed the decision of the District Court granting summary judgement in favor of Mr.

Roy and remanded the case to the District Court for further consideration.

As a result of the District Court’s summary judgment, in December 2022 we recognized a charge of $ 0.7 million for the full estimated amount of damages (including legal fees and costs).

During the first quarter of 2023, and as part of the appeals process, Legacy MIC posted cash collateral of $ 0.7 million for an appeals bond, which is reflected in Cash-Restricted on our Consolidated Balance Sheets.

In February 2024 we signed a settlement agreement which would result in the sale of one of our properties to John Roy with the estimated $ 0.7 million of damages being given as a credit at the time of sale.

This sale is contingent upon John Roy obtaining a lender commitment for financing by April 15, 2024, as well as normal due diligence contingencies in the purchase contract.

As of the date of this filing, John Roy has obtained financing and due diligence is in process.

In September 2023, we entered into arbitration with one vendor regarding disputes over amounts payable.

The entire balance in dispute of approximately $ 1.8 million is accrued for in Accounts Payable and Accrued Expenses on the Consolidated Balance Sheets.

In September 2023, we entered into arbitration with one vendor regarding disputes over amounts payable of approximately $ 1.8 million.

In June 2024, a settlement was reached and the net impact of the gain on the settlement and related legal and administrative fees is immaterial to the Consolidated Statements of Operations for the six months ended June 30, 2024.

The remaining amount payable is accrued for in Accounts Payable and Accrued Expenses on the Consolidated Balance Sheets.

Note O — Related Party Transactions and Arrangements

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Our CEO is neither an owner nor beneficiary of Park Place Parking.

Park Place Parking has been operating these assets for six and five years, respectively.

Both assets were acquired in 2021 with their management agreements in place.

As of March 31, 2024 and December 31, 2023, we recorded balances of approximately $ 0.4 million and $ 0.1 million, respectively, from Park Place Parking which are included in Accounts Receivable, Net on the Consolidated Balance Sheets and were subsequently paid within terms of the lease agreement.

As of June 30, 2024 and December 31, 2023, we recorded balances of approximately $ 0.2 million and $ 0.1 million, respectively, from Park Place Parking which are included in Accounts Receivable, Net on the Consolidated Balance Sheets and were subsequently paid within terms of the management agreement.

In May 2022, we entered into a lease agreement with ProKids, an Ohio not -for-profit.

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ProKids will have no rent due to us throughout the lease term, other than a rental fee on parking spaces used by the ProKids staff and visitors.

As of March 31, 2024, ProKids does not owe us rental income related to the lease agreement.

As of June 30, 2024, ProKids does not owe us rental income related to the lease agreement.

In connection with our recapitalization transaction in August 2021, we owe approximately $ 0.5 million to certain member entities of Color Up relating to prorated revenues for the month of August 2021 of the three properties contributed by Color Up.

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We have agreed to pay for certain tax return preparation services of Color Up and certain member entities of Color Up as well as certain legal services in connection with the Registration Rights Agreement.

We have incurred approximately $ 0.1 million related to these services which is reflected in General and Administrative and Other Income (Expense) on the Consolidated Statements of Operations for the three months ended March 31, 2024.

Total fees are estimated to be approximately $ 0.2 million.

License Agreement

On August 25, 2021, we entered into a Software License and Development Agreement with an affiliate of Bombe Asset Management, Ltd., an affiliate of our CEO and CFO (the “Supplier”), pursuant to which we granted to the Supplier a limited, non-exclusive, non-transferable, worldwide right and license to access certain software and services for a fee of $ 5,000 per month.

On August 25, 2021, we entered into a Software License and Development Agreement with an affiliate of Bombe Asset Management, Ltd., an affiliate of our CEO and President (the “Supplier”), pursuant to which we granted to the Supplier a limited, non-exclusive, non-transferable, worldwide right and license to access certain software and services for a fee of $ 5,000 per month.

Tax Matters Agreement

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MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a financial review and analysis of our financial condition and results of operations for the three months ended March 31, 2024 and 2023.

The following is a financial review and analysis of our financial condition and results of operations for the three and six months ended June 30, 2024 and 2023.

This discussion and analysis should be read in conjunction with the accompanying consolidated financial statements and the notes thereto and Management’s Discussion and Analysis of Financial Conditions and Results of Operations in our annual report on Form 10-K for the fiscal year ended December 31, 2023.

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we may be unable to grow our business by acquisitions of additional parking facilities;

the risks related to our financial statements expressing doubt about our ability to continue as a going concern;

our parking facilities face intense competition, which may adversely affect rental and fee income;

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III or “FWAC”) is a Maryland corporation.

We focus on acquiring, owning and leasing parking facilities and related infrastructure, including parking lots, parking garages and other parking structures throughout the United States.

We focus on acquiring, owning and optimizing parking facilities and related infrastructure, including parking lots, parking garages and other parking structures throughout the United States.

We target both parking garage and surface lot properties primarily in the top 50 U.S.

Metropolitan Statistical Areas, with proximity to key demand drivers, such as commerce, events and venues, government and institutions, hospitality and multifamily central business districts.

As of March 31, 2024, we own 42 parking facilities in 21 separate markets throughout the United States, with a total of approximately 15,400 parking spaces and approximately 5.2 million square feet.

As of June 30, 2024, we own 42 parking facilities in 21 separate markets throughout the United States, with a total of approximately 15,400 parking spaces and approximately 5.2 million square feet.

We also own approximately 0.2 million square feet of retail/commercial space adjacent to its parking facilities.

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The Operating Company is managed by a board of directors, one appointed by the Company and one appointed by the other members of the Operating Company.

Currently, the two directors of the Operating Company are Manuel Chavez, III, our Chief Executive Officer and a director, and Stephanie Hogue, our President, Chief Financial Officer and a director.

Currently, the two directors of the Operating Company are Manuel Chavez, III, our Chief Executive Officer and a director, and Stephanie Hogue, our President and a director.

The Company owns approximately 68.1% of the Common Units of the Operating Company.

Color Up, LLC, a Delaware limited liability company (“Color Up”) and HSCP Strategic III, LP, a Delaware limited partnership (“HS3”), are also members of the Operating Company and own approximately 26.4% and 6.4%, respectively, of the outstanding Common Units.

Color Up is our largest stockholder and is controlled by Mr.

Hogue and, Jeffrey Osher, a director of the Company.

HS3 is controlled by Mr.

The remaining Common Units are held by certain of our executive officers and directors (directly or indirectly) and outside investors.

Trends and Other Factors Affecting our Business

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Managed Property Revenue Contracts

In the first quarter of 2024, 26 of our 42 assets converted to management contracts.

In the first half of 2024, 27 of our 42 assets converted to management contracts.

We believe asset management contracts provide the opportunity for net operating income ("NOI") growth through more transparent and controlled expense management, and will reduce the revenue variability associated with the timing of payments for contract parking agreements.

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Our intent is to convert the remaining assets to asset management contracts by the end of 2027, with additional assets expected to be converted in 2024.

Results of Operations for the three months ended March 31, 2024 (dollars in thousands):

For the Three Months Ended March 31,

Results of Operations for the Three Months Ended June 30, 2024 (dollars in thousands):

For the Three Months Ended June 30,

Managed property revenue

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Total revenues

The increase in total revenues for the three months ended March 31, 2024 compared to the same period in 2023 is due primarily to 26 of our 42 assets converting to management contracts in the first quarter of 2024, as noted above.

The increase in total revenues for the three months ended June 30, 2024 compared to the same period in 2023 is due primarily to 27 of our 42 assets converting to management contracts in the first half of 2024, as noted above.

The change to management contracts results in us recognizing revenue from all parking transactions at those locations.

Under the previous lease agreements, we only received a portion of the revenue after a certain threshold was reached.

For the Three Months Ended March 31,

For the Three Months Ended June 30,

Operating expenses

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Organizational, offering and other costs

Depreciation and amortization expenses

Total operating expenses

Depreciation and amortization

Total expenses

Line items that result in a percent change that exceed certain limitations are considered not meaningful (“NM”) and indicated as such.

Property operating expense

The increase in property operating expense for the three months ended March 31, 2024 compared to the same period in 2023 is due primarily to 26 of our 42 assets converting to management contracts in the first quarter of 2024, as noted above.

The change to management contracts results in higher reflected operating expenses as revenues reported were net of certain costs under the previous lease agreements.

The increase in property operating expense for the three months ended June 30, 2024 compared to the same period in 2023 is due primarily to 27 of our 42 assets converting to management contracts in the first half of 2024, as noted above.

The change to management contracts results in higher reflected operating expenses as revenues under the previous lease agreements were calculated based on collections reduced by certain costs, whereas these costs are now recorded as property operating expense under management contracts.

General and administrative

The $0.4 million increase in general and administrative expenses during the three months ended March 31, 2024 compared to the three months ended March 31, 2023 is primarily attributable to non-cash compensation cost for certain executive LTIP Units and restricted stock units granted in January 2024 as well as an increase in payroll and technology expenses.

The $0.5 million increase in general and administrative expenses during the three months ended June 30, 2024 compared to the three months ended June 30, 2023 is primarily attributable to non-cash compensation cost for certain executive LTIP Units and restricted stock units granted in the first half of 2024, as well as an increase in payroll and technology expenses.

For the Three Months Ended June 30,

Interest expense

Other (expense) income, net

Change in fair value of Earn-Out liability

Total other expense

Interest expense

The decrease in interest expense of approximately $0.6 million during the three months ended

June 30, 2024 compared to the same period in the prior year is primarily attributable to the repayment of $9.9 million of mortgage loans and the paydown of $15.0 million on the Revolving Credit Facility in the third quarter of 2023 partially offset by increases in interest rates on the Revolving Credit Facility compared to the prior year.

Change in the fair value of the Earn-Out liability

In connection with the Merger, in August 2023 we recognized a liability for Earn-Out Shares which may vest if certain hurdles are met regarding share price.

Changes to the fair value of the liability during the period are reflected in earnings.

Results of Operations for the Six Months Ended June 30, 2024 (dollars in thousands):

For the Six Months Ended June 30,

Managed property revenue

Base rent income

Percentage rental income

Total revenues

The increase in total revenues for the six months ended June 30, 2024 compared to the same period in 2023 is due primarily to 27 of our 42 assets converting to management contracts in the first half of 2024, as noted above.

The change to management contracts results in us recognizing revenue from all parking transactions at those locations.

Under the previous lease agreements, we only received a portion of the revenue after a certain threshold was reached.

For the Six Months Ended June 30,

Operating expenses

Property taxes

Property operating expense

General and administrative

Professional fees

Professional fees increased by approximately $0.2 million during the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

The increase was primarily attributable to higher utilization of legal professional services firms in 2024.

During the three months ended March 31, 2024, we impaired approximately $0.2 million of our real estate assets as a result of a planned disposition of a property.

For the Three Months Ended March 31,

Organizational, offering and other costs

Depreciation and amortization

Total expenses

Property taxes

The increase in property taxes for the

six months ended

June 30, 2024 compared to the same period in 2023 is due primarily to increases in estimated property tax assessments recognized in the first half of 2024.

Property operating expense

The increase in property operating expense for the six months ended June 30, 2024 compared to the same period in 2023 is due primarily to 27 of our 42 assets converting to management contracts in the first half of 2024, as noted above.

General and administrative

The $0.9 million increase in general and administrative expenses during the six months ended June 30, 2024 compared to the six months ended June 30, 2023 is primarily attributable to non-cash compensation cost for certain executive LTIP Units and restricted stock units granted in the first half of 2024, as well as, an increase in payroll and technology expenses.

Professional fees

Professional fees increased by approximately $0.2 million during the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

The increase was primarily attributable to additional professional service fees and costs associated with being publicly traded on the NYSE American.

During the six months ended June 30, 2024, we impaired approximately $0.2 million of our real estate assets as a result of a planned disposition of a property.

For the Six Months Ended June 30,

Interest expense

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Interest expense

The decrease in interest expense of approximately $0.6 million during the three months ended

March 31, 2024 compared to the same period in the prior year is primarily attributable to the repayment of $9.9 million of mortgage loans and the paydown of $15.0 million on the Revolving Credit Facility in Q2 2023 partially offset by increases in interest rates on the Revolving Credit Facility compared to the prior year.

The decrease in interest expense of approximately $1.2 million during the

six months ended

(Loss) Gain on sale of real estate

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In connection with the Merger, in August 2023 we recognized a liability for Earn-Out Shares which may vest if certain hurdles are met regarding share price.

Changes to the fair value during the period are based on changes in Company stock price and are reflected in earnings.

Changes to the fair value of the liability during the period are reflected in earnings.

Non-GAAP Measures

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The following table presents our NOI as well as a reconciliation of NOI to Net Loss, the most directly comparable financial measure under U.S.

GAAP reported in our consolidated financial statements, for the three months ended March 31, 2024 and 2023 (dollars in thousands):

For the Three Months Ended March 31,

GAAP reported in our consolidated financial statements, for the three and six months ended June 30, 2024 and 2023 (dollars in thousands):

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Managed property revenue

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Loss (gain) on sale of real estate

Other expense (income)

Other (expense) income, net

Change in fair value of Earn-Out liability

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We use EBITDA and Adjusted EBITDA as measures of operating performance which allow us to compare earnings and evaluate debt leverage and fixed cost coverage.

The following table presents our calculation of EBITDA and Adjusted EBITDA for the for the three months ended March 31, 2024 and 2023 (dollars in thousands):

For the Three Months Ended March 31,

The following table presents our calculation of EBITDA and Adjusted EBITDA for the three and six months ended June 30, 2024 and 2023 (dollars in thousands):

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Reconciliation of Net Loss to Adjusted EBITDA Attributable to the Company

Net Income (Loss)

Interest expense

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EBITDA Attributable to the Company

Organization and offering costs

Organizational, offering and other costs

Impairment of real estate

Change in fair value of Earnout liability

Change in fair value of Earn-Out liability

Loss (gain) on sale of real estate

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We have $93.1 million of debt maturing within twelve months of the date of the issuance of the Quarterly Report which is comprised of $58.7 million related to the Revolving Credit Facility and $34.4 million of notes payable.

We do not currently have sufficient cash on hand, liquidity or projected future cash flows to repay these outstanding amounts upon maturity.

These conditions and events raise substantial doubt about the Company’s ability to continue as a going concern.

We are currently analyzing financial and strategic alternatives in order to satisfy these debt maturities.

With respect to the Revolving Credit Facility, we are evaluating several refinancing options supported by current term sheets received from multiple lenders.

We expect to execute on available options in 2024.

See Note B — Summary of Significant Accounting Policies in Part I, Item 1 Notes to the Consolidated Financial Statements of this Quarterly Report for further discussion.

During 2023 and the first quarter of 2024, we have taken steps to both extend and ladder maturities in our debt profile, including:

During 2023 and the six months ended June 30, 2024, we have taken steps to both extend and ladder maturities in our debt profile, including:

In September 2023, we paid approximately $9.9 million to Vestin Realty Mortgage II, Inc.

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Certain lenders may require reserves related to capital improvements, insurance, and excess cash.

These lender-required reserves make up the majority of our restricted cash amounts as of March 31, 2024.

These lender-required reserves make up the majority of our restricted cash amounts as of June 30, 2024.

Capital Expenditures

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However, we have identified a pipeline of acquisition opportunities that we believe is bespoke and actionable, while being largely off-market and unavailable to our competitors.

As of March 31, 2024, we have identified and are evaluating several parking facilities with approximately $300 million in asset value as potential acquisition targets.

As of June 30, 2024, we have identified and are evaluating several parking facilities with approximately $300 million in asset value as potential acquisition targets.

However, we are unlikely to acquire additional parking facilities until more favorable financial market conditions are realized.

Distributions and Warrants

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We are currently accruing dividends in accordance with the terms of the Series A Preferred Stock and Series 1 Preferred Stock.

As of March 31, 2024, the balance unpaid dividends outstanding was approximately $0.7 million and $9.5 million for Series A Preferred Stock and Series 1 Preferred Stock, respectively.

As of June 30, 2024, the balance unpaid dividends outstanding was approximately $0.7 million and $9.2 million for Series A Preferred Stock and Series 1 Preferred Stock, respectively.

No cash dividend on the common stock can be paid until the preferred distributions are paid.

As a result of the Merger, our previously outstanding warrant became the Warrant to purchase 2,553,192 shares of our common stock at an exercise price of $7.83 per share, exercisable as of the date of the Closing.

As a result of the Merger, our previously outstanding warrant became a warrant to purchase 2,553,192 shares of our common stock at an exercise price of $7.83 per share, exercisable as of the date of the Closing (the “Common Stock Warrants”).

As of the Closing Date, FWAC, Legacy MIC, and Color Up entered into a Warrant Assumption and Amendment Agreement (the “Warrant Assumption and Amendment Agreement”) to the Warrant Agreement, whereby the Company assumed the Common Stock Warrants remaining outstanding and unexpired at that time, and such Common Stock Warrants became the common stock warrants of the Company.

On August 29, 2023, the Company and Color Up entered into the Amended and Restated Warrant Agreement pursuant to which the Warrant Agreement was amended and restated to reflect the effects of the Merger and permit Color Up to exercise the Warrant on a cashless basis at Color Up’s option.

While exercise of the Warrant is a potential source of cash, we do not currently believe this is a likely event and therefore do not use this assumption in our operating plans.

On August 29, 2023, the Company and Color Up entered into the Amended and Restated Warrant Agreement pursuant to which the Warrant Agreement was amended and restated to reflect the effects of the Merger and permit Color Up to exercise the Common Stock Warrants on a cashless basis at Color Up’s option.

Subsequently, Color Up distributed the entirety of the Common Stock Warrants to HSCP Strategic III, LP, an entity controlled by Mr.

Osher, and Bombe Asset Management, LLC, an entity owned and controlled by Mr.

Chavez and Ms.

While exercise of the Common Stock Warrants is a potential source of cash, we do not currently believe this is a likely event and therefore do not use this assumption in our operating plans.

Sources and Uses of Cash

The following table summarizes our cash flows for the three months ended March 31, 2024 and 2023 (dollars in thousands):

For the Three Months Ended March 31,

The following table summarizes our cash flows for the six months ended June 30, 2024 and 2023 (dollars in thousands):

For the Six Months Ended June 30,

Net cash (used in) operating activities

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Net cash (used in) financing activities

Comparison of the three months ended March 31, 2024 to the three months ended March 31, 2023:

Comparison of the six months ended June 30, 2024 to the six months ended June 30, 2023:

Cash flows from operating activities

The cash used in operating activities for the three months ended March 31, 2024 was primarily attributable to payment of certain general and administrative and professional fees and changes in working capital which offset the benefit of changes in NOI for the period.

The cash used in operating activities for the six months ended June 30, 2024 was primarily attributable to payment of certain general and administrative and professional fees and changes in working capital, which offset the benefit of changes in NOI for the period.

Cash flows from investing activities

The cash used in investing activities during the three months ended March 31, 2024 was primarily attributable to capital expenditures and payments on sale of one parking asset in February 2024 as the sale was financed with a note receivable.

The cash used in investing activities during the three months ended March 31, 2023 was primarily attributable to routine and strategic capital expenditures and the sale of one parking asset in February 2023.

The cash used in investing activities during the six months ended June 30, 2024 was primarily attributable to capital expenditures and payments on sale of one parking asset in February 2024 as the sale was financed with a note receivable.

The cash provided by investing activities during the six months ended June 30, 2023 was primarily attributable to routine and strategic capital expenditures and the sale of one parking asset in February 2023.

Cash flows from financing activities

The cash used in financing activities during the three months ended March 31, 2024 was primarily attributable to the refinancing of certain notes payable and related loan fees.

The cash used in financing activities during the three months ended March 31, 2023 was primarily attributable to principal payments on mortgage loans, including $1.0 million for the one parking asset sold in February 2023, as well as distribution payments to non-controlling interest holders in MVP St.

The cash used in financing activities during the six months ended June 30, 2024 was primarily attributable to the refinancing of certain notes payable and related loan fees.

The cash used in financing activities during the six months ended June 30, 2023 was primarily attributable to principal payments on mortgage loans, including $1.0 million for the one parking asset sold in February 2023, as well as distribution payments to non-controlling interest holders in MVP St.

Louis Cardinal Lot, DST.

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These factors are unique to each location and we expect the fluctuations will primarily impact transient parking revenues while contract parking revenues will remain relatively stable.

Because of these seasonality factors, and other factors described herein, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year.

Due to these seasonality factors, and other factors described herein, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year.

Critical Accounting Policies

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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