What changed in this filing

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Item 1A. Risk Factors

2025-03-11 compared with 2024-03-22 · 80 added, 161 removed, 499 unchanged (33% of the section changed)

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Risks Related to Our Business

Increased fuel prices may adversely affect our operating environment and costs.

We have a limited operating history which makes our future performance difficult to predict.

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A material failure, inadequacy, interruption or security failure of our technology networks and related systems could harm our business.

Hogue and Mr.

Osher currently and on a fully diluted basis, own, directly or indirectly, more than 50% of our outstanding voting equity and have the ability to exercise significant influence on us and the Operating Company, including the approval of significant corporate transactions.

The development and use of emerging technologies like artificial intelligence, or AI, presents risks and challenges that may impact our business and lead to unintended consequences and result in legal and/or regulatory actions, reputational harm or otherwise materially harm our business.

Osher currently and on a fully diluted basis, owns, directly or indirectly, more than 50% of our outstanding voting equity and has the ability to exercise significant influence on us and the Operating Company, including the approval of significant corporate transactions.

Our executive officers and certain members of our Board face or may face conflicts of interest related to their positions and interests in other entities, which could hinder our ability to implement our business strategy and generate returns to investors.

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Risks Related to Financial, Tax and Accounting Issues

We may have future financing needs and may not be able to obtain additional financing at all or on acceptable terms.

We identified material weaknesses in our internal control over financial reporting, and we may identify additional material weaknesses in the future or otherwise fail to maintain effective internal control over financial reporting, which may result in material misstatements of our financial statements or cause us to fail to meet its periodic reporting obligations.

These material weaknesses could adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner.

We may face litigation and other risks as the result of the material weakness in our internal control over financial reporting.

We may not be able to access financing sources on attractive terms, or at all, which could adversely affect our ability to execute our business plan.

If we cannot obtain sufficient capital on acceptable terms our business and our ability to operate could be materially adversely impacted.

We may have future financing needs and may not be able to access financing sources on acceptable terms, or at all, which could adversely affect our ability to execute our business plan.

If we fail to maintain effective internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner or prevent fraud and be subject to fines, penalties or judgments, which can harm our reputation or otherwise cause a decline in investor confidence.

We may face litigation and other risks as the result of the previously identified material weakness in our internal control over financial reporting.

Risks Related to Our Indebtedness and Certain Other Obligations

We have debt, and we may incur additional debt;

if we are unable to comply with the restrictions and covenants in the Credit Agreement, there could be an event of default under the terms of the Credit Agreement, which could result in an acceleration of repayments.

if we are unable to comply with the restrictions and covenants in the Line of Credit or any future debt agreement, there could be an event of default under the terms of the Line of Credit or a future debt agreement, which could result in an acceleration of repayment.

We may be required to take write-downs or write-offs, restructuring and impairment or other charges.

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Risks Related to Our Business and Industry

Increased fuel prices may adversely affect our operating environment and costs.

Fuel prices have a direct impact on the ability and frequency of consumers to engage in activities related to transportation.

Increases in the price of fuel may result in higher transportation costs and adversely affect consumer use at our parking garages.

Increases in fuel costs also can lead to other non-recoverable, direct expense increases to us through, for example, increased costs of energy.

Increases in energy costs for our tenants are typically recovered from leases, although our share of energy costs increases as a result of lower occupancies, and higher operating cost reimbursements impact the ability to increase underlying rents.

Rising fuel prices also may increase the cost of construction and the cost of materials that are petroleum-based, thus affecting the development of our existing assets or our tenants’ ongoing development projects.

We have a limited operating history which makes our future performance difficult to predict.

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Legacy MIC was formed on May 4, 2015, and our current management team has been in place since August 2021.

Accordingly, we have a limited operating history, particularly as an internally managed company.

Accordingly, we have a limited operating history.

Investors should not assume that our future performance will be similar to our past performance.

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The inability to implement, maintain and upgrade adequate safeguards could have a material and adverse impact on our business, financial condition and results of operations.

Hogue and Mr.

As of March 1, 2024, (a) Mr.

Hogue and Mr.

Osher beneficially own, as the controlling persons of Color Up, LLC, a Delaware limited liability company (“Color Up”), 3,937,247 shares of our Common Stock, or 13.8% of the outstanding shares of our Common Stock, a warrant to purchase 2,553,192 shares of our Common Stock (the "Warrant"), and 11,242,635 of the class of membership interests of the Operating Company designated as “Common Units” (the “Common Units”) pursuant to the Limited Liability Company Agreement of the Operating Company (the “Operating Agreement”), or approximately 26.5% of the outstanding Common Units as of such date, (b) Mr.

Chavez and Ms.

Hogue beneficially own, as the manager and a member of Bombe Pref, respectively, 1,798,364 shares of our Common Stock, or 6.3% of the outstanding shares of our Common Stock, (c) Mr.

Osher beneficially owns through HS3 and HSCP Master, 11,989,098 shares of our Common Stock, or 42.1% of the outstanding shares of our Common Stock, and 2,709,330 Common Units, or approximately 6.4% of the outstanding Common Units.

Common Units are redeemable for shares of our Common Stock, on a one-for-one basis, or cash at our option, pursuant and subject to the terms and provisions of the Operating Agreement.

Pursuant to their current ownership and potential future ownership of our Common Stock, Mr.

Hogue and Mr.

Osher have the ability to influence the outcome of matters presented to our stockholders, including the election of the Board and approval of significant corporate transactions, including business combinations, consolidations and mergers.

The development and use of emerging technologies like artificial intelligence, or AI, presents risks and challenges that could impact our business and lead to unintended consequences and result in legal and/or regulatory actions, reputational harm or otherwise materially harm our business.

We continue to evaluate how emerging technologies like artificial intelligence, or AI, machine learning, generative AI and large language models may impact our business.

These new and emerging technology are in the early stages of commercial use and present a number of inherent risks.

If we integrate AI into our business and the recommendations, forecasts, or analyses with which AI assists in producing are deficient or inaccurate, we may experience perceived or actual brand or reputational harm, competitive harm, legal liability, cybersecurity risks, privacy risks, compliance risks, ethical issues, and new or enhanced governmental or regulatory scrutiny, and we may incur additional costs to resolve such issues.

In addition, state and federal regulations relating to these emerging technologies are quickly evolving, and should we adopt such technologies, we may require significant resources to maintain our business practices while seeking to comply with U.S.

Any failure to accurately identify and address our responsibilities and liabilities in this new environment could negatively affect any solutions we develop incorporating such technologies and could subject us to reputational harm, regulatory action or litigation, any of which may harm our financial condition and operating results.

Further, market demand and acceptance of AI technologies are uncertain, and we may be unsuccessful in our product development efforts.

Prior to integrating AI into our business, we plan to develop policies governing the use of AI to help reasonably ensure that such AI is used in a trustworthy manner by our employees, contractors, and authorized agents and that our assets, including intellectual property, competitive information, personal information we may collect or process, and customer information, are protected.

Any failure by our personnel, contractors, or other agents to adhere to our established policies could violate confidentiality obligations or applicable laws and regulations, jeopardize our intellectual property rights, cause or contribute to unlawful discrimination, or result in the misuse of personally identifiable information or the injection of malware into our systems, any of which could have a material adverse effect on our business, results of operations, and financial condition.

As of December 31, 2024, Mr.

Osher beneficially owns directly or through HS3, Harvest Small Cap and HSCP Master, 24,837,069 shares of our Common Stock, or approximately 61.5% of the outstanding shares of our Common Stock and 2,170,213 warrants to purchase shares of our Common Stock.

Pursuant to his current ownership and potential future ownership of our Common Stock, Mr.

Osher has the ability to influence the outcome of matters presented to our stockholders, including the election of the Board and approval of significant corporate transactions, including business combinations, consolidations and mergers.

Therefore, Mr.

Hogue and Mr.

Osher have substantial influence over us and could exercise influence in a manner that is not in the best interests of our other stockholders.

Osher has substantial influence over us and could exercise influence in a manner that is not in the best interests of our other stockholders.

This concentration of voting power might also have the effect of delaying or preventing a change of control that our stockholders may view as beneficial.

Additionally, Mr.

Osher is the managing member of No Street Capital LLC, which serves as the investment manager of the Lenders on the Line of Credit, as defined herein.

Manuel Chavez, III, our Chief Executive Officer and a member of the Board, Stephanie Hogue, our President, Chief Financial Officer, Corporate Secretary, Treasurer and a member of the Board, and Jeffrey B.

Osher, a member of the Board, together beneficially own a significant percentage of our Common Stock, and Bombe, HS3 and three entities controlled by Mr.

Chavez are members of Color Up, which is a member of the Operating Company.

Hogue and Mr.

Osher, together beneficially own a significant percentage of our Common Stock.

Chavez and Ms.

Hogue will also continue in their ownership and management roles with Bombe.

Hogue will continue in their ownership and management roles with Bombe and Bombe-Pref.

Osher will continue his ownership and management role with HS3, Harvest Small Cap and HSCP Master.

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A decrease in the demand for parking facilities or other developments adversely affecting such sector of the real estate market would likely have a more pronounced effect on our financial performance than if we owned a more diversified real estate portfolio.

If adverse economic conditions reduce discretionary spending, business travel or other economic activity, such as sporting events and entertainment, that fuels demand for parking, our revenues could be reduced.

For example, fuel prices have a direct impact on the ability and frequency of consumers to engage in activities related to transportation.

Increases in the price of fuel may result in higher transportation costs and adversely affect consumer use at our parking garages.

In addition, if adverse economic conditions reduce discretionary spending, business travel or other economic activity, such as sporting events and entertainment, that fuels demand for parking, our revenues could be reduced.

In addition, our parking facilities tend to be concentrated in urban areas.

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Moreover, changing lifestyles and technological innovations also may decrease the need for parking spaces, thereby decreasing the demand for parking facilities.

The need for parking spaces, for example, may decrease as the public increases its use of livery service companies and ridesharing companies or elects to take public transit for their transportation needs.

The need for parking spaces, for example, may decrease as the public increases its use of delivery service companies and ridesharing companies or elects to take public transit for their transportation needs.

Future technological innovations, such as driverless vehicles, also may decrease the need for parking spaces.

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In addition, increased competition for customers may require us to make capital improvements to facilities that we would not otherwise make.

The operations of a large number of our properties in our portfolio are currently concentrated with one tenant operator.

One tenant operator, SP Plus Corporation (“SP+”), leased properties that contributed approximately 61.3% of our parking rental revenue for the fiscal year ended December 31, 2023.

In October 2023, SP+ announced that it entered into a definitive agreement to be acquired by Metropolis Technologies, Inc.

(“Metropolis”).

If the proposed transaction is consummated, our largest tenant operator will be Metropolis.

This significant concentration of operational risk in one tenant operator makes us more vulnerable economically than if our operations were more evenly diversified among many tenant operators.

Any adverse developments in SP+’s business (or Metropolis’s business, if the proposed transaction is consummated), financial strength or ability to operate our properties efficiently and effectively could have a material adverse effect on our results of operations.

We cannot provide assurance that SP+ (or Metropolis, if the proposed transaction is consummated) will satisfy its obligations to us or effectively and efficiently operate our properties.

The failure or inability of SP+ (or Metropolis, if the proposed transaction is consummated) to satisfy its obligations to us or effectively and efficiently operate our properties could adversely affect our financial position, results of operations and cash flows.

The operations of a large number of our properties in our portfolio are currently concentrated with two tenant operators.

The revenue from locations where Metropolis Technologies, Inc.

(“Metropolis”) and LAZ Parking (“LAZ”) act as either a lease tenant or an operator agent represented 55.7% and 15.3% of our revenue, excluding commercial revenue, respectively, for the fiscal year ended December 31, 2024.

This significant concentration of operational risk in two tenant operators makes us more vulnerable economically than if our operations were more evenly diversified among many tenant operators.

Any adverse developments in Metropolis’s or LAZ's business, financial strength or ability to operate our properties efficiently and effectively could have a material adverse effect on our results of operations.

We cannot provide assurance that Metropolis or LAZ will satisfy its obligations to us or effectively and efficiently operate our properties.

The failure or inability of Metropolis or LAZ to satisfy their obligations to us or effectively and efficiently operate our properties could adversely affect our financial position, results of operations and cash flows.

See the section titled “Business—Concentration.

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We enter into agreements with operators who assist us in offering parking facilities to the public and providing contracted parking to customers.

One of our strategic objectives is to focus heavily on the performance of each parking facility, working with our operators to create a business plan for each parking facility to improve cash flow and rental income.

While our operators continue to execute on the asset-level business plans, it is possible that the economic slowdown will materially impact the performance of our assets.

While our operators continue to execute on the asset-level business plans, it is possible that an economic slowdown will materially impact the performance of our assets.

Our inability or the inability of our operators to execute on these business plans could have a material adverse effect on our business, financial condition and results of operations.

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natural disasters such as hurricanes, snow, earthquakes, flood or severe weather storms;

civil unrest, crime, or the perception of crime;

acts of war or terrorism, including the consequences of terrorist attacks;

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Risks Related to Financial, Tax and Accounting Issues

We may have future financing needs and may not be able to obtain additional financing at all or on acceptable terms.

As of December 31, 2023, we had $96.3 million of debt due within twelve months.

On March 1, 2024, we entered into the Third Amendment to the Credit Agreement, which provided extension options on $58.7 million outstanding under a revolving credit facility through June 2025.

In addition, in February 2024, we refinanced $5.5 million of notes payable maturing in March 2024 with a new maturity date of March 1, 2029.

After the completion of these refinancing transactions, we had $32.1 million of mortgage notes payable maturing within twelve months of the date the consolidated financial statements included in this Report were available to be issued.

We may have future financing needs and may not be able to access financing sources on acceptable terms, or at all, which could adversely affect our ability to execute our business plan.

We have $29.9 million of debt due within twelve months of the date of issuance of this Annual Report which is comprised of $27.2 million related to the Line of Credit (as defined herein) and a $2.7 million note payable.

In September 2024, we entered into a $40.4 million revolving credit facility agreement with Harvest Small Cap and HSCP Masters (collectively, the “Lenders”) maturing in September 2025 (the “Line of Credit”).

Borrowings under the Line of Credit accrue interest at a rate of 15.0% per annum, with interest payable in arrears at maturity or upon repayment of any principal amount borrowed under the Line of Credit.

As of December 31, 2024, $27.2 million was outstanding under the Line of Credit.

There is a risk that we may not be able to refinance existing debt or that the terms of any refinancing will not be as favorable as the terms of the existing debt.

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A prolonged worsening of credit market conditions would have a material adverse effect on our ability to obtain financing on favorable terms, if at all.

These material weaknesses could adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S.

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These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects.

Our management identified material weaknesses in our internal control over financial reporting in connection with its assessment as of and for the fiscal year ended December 31, 2023.

Specifically, these control deficiencies constitute material weaknesses, either individually or in the aggregate, relating to:

(i) the lack of appropriate segregation of duties within the accounting and finance groups and (ii) the ineffective design, implementation, and operation of controls relevant to the financial reporting process, specifically related to the documentation of the review of controls.

Our management had also identified a material weakness in our internal control over financial reporting in connection with its assessment for the year ended December 31, 2022 relating to the lack of formal and effective controls over user access to certain information systems to ensure adequate restriction of users and privileged access to transaction processing applications.

Additionally, as previously described in Part II, Item 9A of the Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed by FWAC, prior to the Merger, FWAC’s management identified that FWAC’s control around the interpretation and accounting for extinguishment of a significant contingent obligation was not effectively designed or maintained.

That material weakness resulted in the restatement of FWAC’s interim financial statements for the quarters ended June 30, 2022 and September 30, 2022.

In connection with our assessment for the year ended December 31, 2023, management concluded these material weaknesses were remediated.

We have identified and implemented, and continue to implement, certain remediation efforts to improve the effectiveness of our internal control over financial reporting and disclosure controls and procedures.

These remediation efforts are ongoing.

The following remedial actions have been identified and initiated as of December 31, 2023:

We have and will continue to hire and train additional accounting resources that have the requisite levels of experience.

We have and will continue to reallocate responsibilities across the finance organization to allow for the appropriate segregation of duties to be applied.

We have and will continue to re-evaluate the permissions of user roles within our accounting system in order to establish more appropriate segregation of duties.

We have and will continue to enhance our internal control documentation for key controls to ensure the appropriate assignment of preparers and reviewers and the establishment of policies and procedures that would require control performers to document the execution of controls with the appropriate level of precision and supporting evidence.

As we continue to evaluate and work to improve its internal control over financial reporting our management may determine that additional or different measures to address control deficiencies or modifications to the remediation plan are necessary.

The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.

Any failure to maintain such internal control could adversely impact our ability to report our financial position and results of operations on a timely and accurate basis.

If our financial statements are not accurate, investors may not have a complete understanding of our operations.

Likewise, if our financial statements are not filed on a timely basis, we could be subject to sanctions or investigations by the NYSE American LLC (“NYSE American”), the SEC, or other regulatory authorities.

Likewise, if our financial statements are not filed on a timely basis, we could be subject to sanctions or investigations by the NYSE American, the SEC, or other regulatory authorities.

Additionally, failure to timely file required Exchange Act reports will cause us to be ineligible to utilize short-form registration statements on Form S-3, which may impair our ability to obtain capital in a timely fashion to execute our business strategies or issue shares of Common Stock to effect an acquisition.

Ineffective internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our Common Stock and may result in a material adverse effect on our business.

We can give no assurance that any additional material weaknesses or resulting restatements of financial results will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting or circumvention of these controls.

In addition, even if we are successful in strengthening our controls and procedures, in the future those controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our financial statements.

We may face litigation and other risks as a result of the material weakness in our internal control over financial reporting.

As a result of such material weakness and the restatements described above, we may face potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the restatement and material weaknesses in our internal control over financial reporting and the preparation of its financial statements.

We may face litigation and other risks as a result of the previously identified material weakness in our internal control over financial reporting.

As most recently disclosed in our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2024, we identified material weaknesses in our internal control over financial reporting related to (i) the lack of appropriate segregation of duties within the accounting and finance groups, (ii) the ineffective design, implementation, and operation of controls relevant to the financial reporting process, specifically related to the documentation of the review of controls, and (iii) the calculation and review of noncontrolling interest.

As disclosed in Item 9A.

of this Annual Report, management, including our Chief Executive Officer and Chief Financial Officer, has concluded such material weaknesses have been remediated as of December 31, 2024.

Although remediated, we may face potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the restatement and material weaknesses in our internal control over financial reporting discussed above and in Item 9A.

of this Annual Report and the preparation of our financial statements.

We have no knowledge of any such litigation or dispute.

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This, in turn, may hinder our ability to raise more capital by issuing securities or by borrowing more money.

If we cannot obtain sufficient capital on acceptable terms, our business and our ability to operate could be materially adversely impacted.

In addition to customary representations, warranties, covenants, and indemnities, our existing loan agreements require us and/or our subsidiaries to comply with covenants involving, among other matters, limitations on incurrence of indebtedness, debt cancellation, property cash flow allocation, liens on properties and requirements to maintain minimum unrestricted cash balances.

Unless we are able to sell assets, we may be unable to meet the minimum unrestricted cash balances in our loan agreements, which could result in events of default.

Our existing loan agreements contain covenants that may limit our ability to sell assets, including covenants that limit debt cancellation and assignment of debt in connection with the sale of an asset.

In addition, certain of our assets are collateral under multiple loan agreements, which may limit our ability to sell such assets.

We may enter into additional loan agreements that also may contain covenants, including those requiring us to comply with various financial covenants.

If we breach covenants under our loan agreements, we could be held in default under such loans, which could accelerate our repayment date and materially adversely affect our financial condition, results of operations and cash flows.

Our failure to comply with covenants in any of our loan agreements will likely constitute an event of default and, if not cured or waived, may result in:

acceleration of all of our debt under such loan agreement (and any other debt containing a cross-default or cross-acceleration provision, including certain of our loan agreements) that we may be unable to repay from internal funds or to refinance on favorable terms, or at all;

our inability to borrow any unused amounts under such loan agreement, even if we are current in payments on borrowings under such loan agreement;

the loss of some or all of our assets to foreclosure or sale.

Further, our loan agreements may contain cross default provisions, which could result in a default on our other outstanding debt.

Any such event of default, termination of commitments, acceleration of payments, or foreclosure of our assets could have a material adverse effect on our financial condition, results of operations and cash flows and ability to continue to operate or make distributions to our investors in the future.

A default also could limit significantly our financing alternatives, which could cause us to curtail our investment activities and/or dispose of assets.

It is also possible that we could become involved in litigation related to matters concerning the loan, and such litigation could result in significant costs to us.

Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our financial condition and results of operations.

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In addition, under Section 382 of the Code, a corporation that undergoes an “ownership change” (as defined under Sections 382 and 383 of the Code and applicable Treasury Regulations) is subject to limitations on its ability to utilize its pre-change NOLs and certain other tax attributes to offset post-change taxable income or taxes.

The Merger as well as transactions that occurred prior to the Merger, including transactions contemplated by the Purchase and Contribution Agreement, may have resulted in an ownership change under Section 382 of the Code that could affect our ability to utilize our NOLs to offset future taxable income.

The Merger as well as transactions that occurred prior to the Merger, including transactions contemplated by the Equity Purchase and Contribution Agreement (the “Purchase and Contribution Agreement”), dated January 8, 2021, by and among Legacy MIC, the Operating Partnership, Michael Shustek, Vestin Realty Mortgage I, Inc., a Maryland corporation, Vestin Realty Mortgage II, Inc., a Maryland corporation, and Color Up, LLC (“Color Up”), may have resulted in an ownership change under Section 382 of the Code that could affect our ability to utilize our NOLs to offset future taxable income.

Furthermore, our ability to utilize NOLs of companies that we have acquired or that we may acquire in the future may be subject to limitations.

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We have debt, and we may incur additional debt;

We are subject to numerous risks associated with our debt, including the risk that our cash flows could be insufficient to meet the required payments on our debt.

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Excessive debt could limit our ability to obtain financing for working capital, capital expenditures, acquisitions, refinancing, lease obligations, or other purposes, prevent us from achieving investment grade ratings from nationally recognized credit rating agencies, and reduce our ability to make distributions to our investors.

In addition, the Credit Agreement, dated as of March 29, 2022, by and among the Operating Company, certain subsidiaries of the Operating Company, KeyBanc Capital Markets, as lead arranger, KeyBank, National Association, as administrative agent and lender, and the other financial institutions party thereto as lenders, as amended by Amendment No.

1 to Credit Agreement, dated November 17, 2022;

by the Waiver and Second Amendment to Credit Agreement, dated August 25, 2023 (the “Second Amendment to Credit Agreement”);

and the Third Amendment to the Credit Agreement, dated March 1, 2024 (as amended, the “Credit Agreement”) contains customary representations, warranties, conditions to borrowing, covenants, and events of default, including certain covenants that limit or restrict, subject to certain exceptions, our ability, and the ability of the Operating Company and our other subsidiaries to sell or transfer assets, enter into a merger or consolidate with another company, create liens, make investments or acquisitions or incur certain indebtedness.

Among other things, the Credit Agreement requires us to maintain:

a total leverage ratio not to exceed 65%;

an interest reserve in an amount equal to $375,000, subject to adjustment;

an aggregate of $7,000,000 in unencumbered cash, unencumbered cash equivalents, and amounts on deposit in an account containing cash collateral to be used for interest payments;

a borrowing base interest coverage ratio of no less than 1.10 to 1.00;

a tangible net worth of not less than $206,908,200 plus 90% of the net proceeds received by us or the Operating Company and certain of our subsidiaries at any time from the issuance of stock (whether common, preferred, or otherwise) by us, the Operating Company, or certain of our other subsidiaries.

If we are unable to comply with the restrictions and covenants in the Credit Agreement or any future debt agreement or if we default under the terms of the Credit Agreement or any future debt agreement, there could be an event of default.

Our ability to comply with these restrictions and covenants, including meeting any financial ratios and tests, may be affected by events beyond our control.

We cannot assure that we will be able to comply with these restrictions and covenants or meet such financial ratios and tests.

In the event of a default under the Credit Agreement or any future debt agreement, the lenders could terminate their commitments to lend or accelerate the loans and declare all amounts borrowed under the Credit Agreement due and payable.

The Line of Credit contains customary representations, warranties, conditions to borrowing, covenants, and events of default, including certain covenants that limit or restrict, subject to certain exceptions, our ability, and the ability of the Operating Company and our other subsidiaries to sell or transfer assets, enter into a merger or consolidate with another company, create liens, make investments or acquisitions or incur certain indebtedness.

If we are unable to comply with the restrictions and covenants in the Line of Credit or any future debt agreement or if we default under the terms of the Line of Credit or any future debt agreement, there could be an event of default.

Our ability to comply with these restrictions and covenants may be affected by events beyond our control.

We cannot assure that we will be able to comply with these restrictions and covenants.

In the event of a default under the Line of Credit or any future debt agreement, the Lenders could terminate their commitments to lend or accelerate the loans and declare all amounts borrowed under the Line of Credit due and payable.

If any of these events occur, our assets might not be sufficient to repay in full all of our outstanding indebtedness and we may be unable to find alternative financing.

Even if we could obtain alternative financing, it might not be on terms that are favorable or acceptable to us.

Additionally, we may not be able to amend the Credit Agreement or any future debt agreement or obtain needed waivers on satisfactory terms.

Additionally, we may not be able to amend the Line of Credit or any future debt agreement or obtain needed waivers on satisfactory terms.

We may be required to take write-downs or write-offs, restructuring and impairment or other charges.

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Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities.

In addition, charges of this nature may cause us to violate net worth or other covenants in the Credit Agreement or to which we may be subject to by virtue of obtaining post-combination debt financing.

In addition, charges of this nature may prevent us from obtaining debt financing.

Accordingly, investors could suffer a reduction in the value of their shares of Common Stock from any such write-down or write-downs.

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We have obtained, and intend to continue to obtain, loans that are secured by mortgages on our properties, and we may obtain additional loans evidenced by promissory notes secured by mortgages on our properties.

For example, in December 2024, we, through seven of our subsidiaries (the “Loan Borrowers”), entered into a $75.5 million CMBS financing with Argentic Real Estate Finance 2 LLC as lender (the “CMBS Loan”).

The CMBS Loan is secured by a first priority (i) mortgage, (ii) assignment of leases and rents and (iii) security interest in all personal property, including accounts, escrows, and reserves, granted by each of the seven Loan Borrowers.

If we default on the CMBS Loan, we could lose the seven properties owned by the Loan Borrowers through foreclosure.

The Operating Company serves as a non-recourse guarantor with respect to the CMBS Loan.

As a general policy, we will seek to obtain mortgages securing indebtedness which encumber only the particular property to which the indebtedness relates, but recourse on these loans may include all of our assets.

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Our inability to use Inigma or pKatalyst or enforce our intellectual property rights to Inigma or pKatalyst could have an adverse effect on our business, financial condition and results of operations.

We may in the future be subject to claims that we violated certain third-party intellectual property rights, which, even where meritless, can be costly to defend and could materially adversely affect our business, results of operations and financial condition.

Our success depends, in part, on our ability to maximize revenues and profitability at our parking facilities with a technology-driven approach to collaboration with our tenant operators, including the use of our proprietary software, without infringing on, misappropriating or otherwise violating the intellectual property rights of third parties.

However, we may not be aware that our software systems are infringing on, misappropriating or otherwise violating third party intellectual property rights and such third parties may bring claims alleging such infringement, misappropriation or violation.

Also, various “non-practicing entities” and other intellectual property rights holders may in the future attempt to assert intellectual property claims against us or seek to monetize the intellectual property rights they own to extract value through licensing or other settlements, even if the claims are meritless.

Our use of third-party software and other intellectual property rights may be subject to claims of infringement or misappropriation.

The vendors who provide us with technology that we incorporate in our proprietary software also could become subject to various infringement or misappropriation claims, which may then affect our use of our proprietary software.

We cannot guarantee that our internally developed or acquired technologies and content do not or will not infringe, misappropriate or otherwise violate the intellectual property rights of others.

From time to time, our competitors or other third parties may claim that we are infringing upon, misappropriating or otherwise violating their intellectual property rights.

We cannot predict the outcome of lawsuits and cannot ensure that the results of any such actions will not have an adverse effect on our business, financial condition, results of operations, cash flows, or prospects.

Any claims or litigation, even those without merit and regardless of the outcome, could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay substantial costs or damages, obtain a license, which may not be available on commercially reasonable terms or at all, pay significant ongoing royalty payments, settlements or licensing fees, prevent us from maximizing our revenues and profitability at our parking facilities and from using certain technologies, force us to implement expensive and time-consuming workarounds or redesigns, distract management from our business or impose other unfavorable terms.

We may not be able to obtain, maintain, protect, defend and enforce our trademarks and trade names, or build name recognition in our markets of interest, thereby harming our competitive position.

We believe that the protection of our trademark rights is an important factor in protecting our brand and maintaining goodwill.

We may be unable to obtain trademark protection for our technologies, logos, slogans and brands, and our existing trademark registrations and applications, and any trademarks that may be used in the future, may not provide us with competitive advantages or distinguish our brand and our business from those of our competitors.

Further, we may not timely or successfully register our trademarks.

If we do not adequately protect our rights in our trademarks from infringement and unauthorized use, any goodwill that we have developed in those trademarks could be lost or impaired, which could harm our brand and our business.

We have filed applications for registration, among other trademarks, the term “Mobile Infrastructure Corporation” in the United States.

Although we have applied for these trademark registrations, there are no certainties that these applications will result in our registration of these trademarks.

Competitors may adopt trademarks and/or tradenames similar to ours, thereby harming our ability to build brand identity and possibly leading to customer confusion.

In addition, there could be potential trade name or trademark infringement claims brought by owners of other trademarks that are similar to our trademarks.

Furthermore, our trademarks, upon registration, may be opposed, contested, circumvented or found to be unenforceable, weak or invalid, and we may not be able to prevent third parties from infringing or otherwise violating them or using similar marks in a manner that causes confusion or dilutes the value or strength of our brand.

Litigation or proceedings before the U.S.

Patent and Trademark Office or other governmental authorities and administrative bodies in the United States may be necessary in the future to enforce our trademark rights and to determine the validity and scope of the trademark rights of others.

Our efforts to obtain, maintain, protect, defend and enforce our trademarks may be ineffective and could result in substantial costs and diversion of resources, which could adversely affect our business, financial condition, and results of operations.

We may be unable to continue to use the domains that we use in our business or prevent third parties from acquiring and using domains that infringe, misappropriate or otherwise violate, are similar to, or otherwise decrease the value of our brand, trademarks, or service marks.

We have registered a domain that we use in, or is related to, our business, www.mobileit.com.

If we lose the ability to use the domain name, whether due to trademark claims, failure to renew the applicable registration, or any other cause, we may be forced to market our offerings under a new domain name, which could cause us substantial harm or cause us to incur significant expense in order to purchase rights to the domain name in question.

In addition, our competitors and other third parties could attempt to capitalize on our brand recognition by using domains similar to ours.

We may be unable to prevent our competitors and other third parties from acquiring and using domains that infringe, misappropriate, or otherwise violate, are similar to, or otherwise decrease the value of our brand or our trademarks or service marks.

Obtaining, maintaining, protecting, defending and enforcing our rights in our domain may require litigation, which could result in substantial costs and diversion of resources, which could in turn adversely affect our business, financial condition, and results of operations.

Risks Related to Ownership of Our Securities

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For example, as of August 28, 2023, the first trading date of our Common Stock on the NYSE American, the closing price of our Common Stock was $10.37.

Since then, the closing price of our Common Stock reached a low of $3.10 on September 27, 2023, and on March 1, 2024, the closing price of our Common Stock was $3.55.

Since then, the closing price of our Common Stock reached a low of $2.48 on August 5, 2024, and on February 28, 2025, the closing price of our Common Stock was $3.66.

Capital markets have been volatile in the recent past.

After the most recent U.S.

economic recession, the U.S.

Federal Reserve took actions that resulted in low interest rates for a long period of time.

In March 2022, the U.S.

Federal Reserve increased interest rates for the first time since 2018 and raised rates six more times in 2022 and four more times in 2023.

in December 2023, the U.S.

Federal Reserve signaled that at least one rate cut may come in 2024;

however, there can be no guarantee that interest rates will not continue to increase.

Market volatility, as well as general economic, market or political conditions, and the current adverse macroeconomic conditions including inflation, fluctuations in fuel prices, rising interest rates, and reduced consumer confidence, could reduce the market price of shares of our Common Stock regardless of its operating performance.

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Further, holders of Preferred Stock will be entitled to receive a preference payment if we liquidate, dissolve, or wind up before any payment is made to holders of Common Stock, likely reducing the amount holders of Common Stock would otherwise receive upon such an occurrence.

Holders of Series 1 Preferred Stock and Series A Preferred Stock will have the right to require us to convert their Series 1 Preferred Stock and Series A Preferred Stock into Common Stock, but we may, at our option, redeem such shares of Preferred Stock for cash.

Holders of Series 1 Preferred Stock and Series A Preferred Stock have the right to require us to convert their Series 1 Preferred Stock and Series A Preferred Stock into Common Stock, but we may, at our option, redeem such shares of Preferred Stock for cash.

Holders of the Series A Preferred Stock and Series 1 Preferred Stock are entitled to cumulative dividends before any dividends may be declared or set aside on Common Stock.

Upon our voluntary or involuntary liquidation, dissolution or winding up, before any payment is made to holders of Common Stock, holders of Series A Preferred Stock and Series 1 Preferred Stock will be entitled to receive a liquidation preference of $1,000.00 per share plus any accrued and unpaid distributions.

As of December 31, 2023 , 2,812 and 36,677 shares of Series A Preferred Stock and Series 1 Preferred Stock, respectively, were issued and outstanding, and approximately $0.8 million and $9.7 million of distributions on the Series A Preferred Stock and the Series 1 Preferred Stock, respectively, were accrued and unpaid.

On December 31, 2023, 46,000 shares of Series 2 Preferred Stock converted into 13,787,462 shares of Common Stock.

Following the conversion of the Series 2 Preferred Stock, there were no shares of Series 2 Preferred Stock issued and outstanding.

As of December 31, 2024 , 1,949 and 18,165 shares of Series A Preferred Stock and Series 1 Preferred Stock, respectively, were issued and outstanding.

As of December 31, 2024 there were no shares of Series 2 Preferred Stock issued and outstanding.

We are a “ controlled company ” within the meaning of the applicable rules of the NYSE American and, as a result, may qualify for exemptions from certain corporate governance requirements.

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and (iv) director nominees selected, or recommended for selection to our Board, by the nominating committee.

As of December 31, 2023, Manuel Chavez, III, our Chief Executive Officer and a member of the Board, Stephanie Hogue, our President, Chief Financial Officer, Corporate Secretary, Treasurer and a member of the Board, and Jeffrey B.

Osher, a member of the Board, as a group, control more than 50% of the voting power of our outstanding Common Stock, and as a result, we are a “controlled company” within the meaning of applicable rules of the NYSE American.

As of December 31, 2024, Jeffrey B.

Osher, a member of the Board, controls more than 50% of the voting power of our outstanding Common Stock, and as a result, we are a “controlled company” within the meaning of applicable rules of the NYSE American.

Though we currently do not intend to take advantage of any “controlled company” exemptions, if we were to elect to be exempt from some or all of the aforementioned corporate governance requirements, you may not have the same protections afforded to stockholders of companies that are subject to all of the NYSE American corporate governance requirements.

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The ability to provide this public guidance, and the ability to accurately forecast our results of operations, could be impacted by future public health crises.

Our actual results may not always be in line with or exceed any guidance we have provided, especially in times of economic uncertainty, such as the current global economic uncertainty being experienced as a result of the war in Ukraine, the Israel-Hamas war and the recent U.S.

Federal Reserve interest rate hikes.

If, in the future, our operating or financial results for a particular period do not meet any guidance provided or the expectations of investment analysts, or if we reduce our guidance for future periods, the market price of our Common Stock could decline as well.

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(a) sell additional shares of stock in the future, (b) sell securities that are convertible into Common Stock, (c) issue Common Stock in a private offering of securities to institutional investors, or (d) issue Common Stock to sellers of properties acquired by us in connection with an exchange for Common Units, which are convertible into Common Stock.

In addition, as of March 1, 2024, there are currently outstanding:

(i) one Warrant to purchase up to 2,553,192 shares of Common Stock;

(ii) 42,419,600 Common Units;

In addition, as of February 28, 2025, there are currently outstanding:

(i) warrants to purchase up to 2,553,192 shares of Common Stock;

(ii) 4,570,504 Common Units held by third parties;

(iii) 2,250,000 of the class of membership interest of the Operating Company designated as “Performance Units” (the “Performance Units”);

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Because the Board has the power to establish the preferences and rights of each class or series of preferred stock, it may afford the holders of any series or class of preferred stock preferences, powers, and rights senior to the rights of holders of Common Stock or Preferred Stock.

Any sales of our Common Stock (including shares of Common Stock issuable upon the exercise or conversion, as applicable, of the Warrant, Common Units or Preferred Stock or the redemption of Preferred Stock) pursuant to Rule 144 under the Securities Act or our effective registration statements on Form S-11, filed with the SEC on September 25, 2023 (as amended), could adversely affect the prevailing market price of our Common Stock.

The issuance of Common Stock upon any exercise or conversion, as applicable, of the Warrant, Common Units or Preferred Stock or redemption of Preferred Stock also may have the effect of reducing our net income per share (or increasing our net loss per share).

Any sales of our Common Stock (including shares of Common Stock issuable upon the exercise or conversion, as applicable, of the Warrants, Common Units or Preferred Stock or the redemption of Preferred Stock) pursuant to Rule 144 under the Securities Act or our effective registration statements on Form S-11, filed with the SEC on September 25, 2023, as post-effectively amended by Post Effective Amendment No.1 to Form S-11, filed with the SEC on April 12, 2024, could adversely affect the prevailing market price of our Common Stock.

The issuance of Common Stock upon any exercise or conversion, as applicable, of the Warrants, Common Units or Preferred Stock or redemption of Preferred Stock also may have the effect of reducing our net income per share (or increasing our net loss per share).

In addition, the existence of Preferred Stock may encourage short selling by market participants because the existence of redemption payments could depress the value or market price of the Common Stock.

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We may issue additional shares of Common Stock or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of our Common Stock.

Pursuant to the Incentive Award Plan, we may issue an aggregate of up to 3,687,500 of shares of Common Stock and restricted stock units or incentive units of the Operating Company (or a similar type of incentive equity security permitted under the Incentive Award Plan) issuable to certain of our officers and directors as determined by the compensation committee of the Board, which amount will be subject to increase from time to time.

Pursuant to the Mobile Infrastructure Corporation and Mobile Infra Operating Company, LLC 2023 Incentive Award Plan (the “Incentive Award Plan”), we may issue an aggregate of up to 3,687,500 of shares of Common Stock and restricted stock units or incentive units of the Operating Company (or a similar type of incentive equity security permitted under the Incentive Award Plan) issuable to certain of our officers and directors as determined by the compensation committee of the Board, which amount will be subject to increase from time to time.

We may also issue additional shares of Common Stock or other equity securities of equal or senior rank in the future in connection with, among other things, future acquisitions or repayment of outstanding indebtedness, without stockholder approval, in a number of circumstances.

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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-K

Item 1A. Risk Factors