What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2025-03-11 compared with 2024-03-22 · 131 added, 125 removed, 156 unchanged (62% of the section changed)

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Market Information

Our common stock is traded on the NYSE American under the ticker symbol “BEEP.” Prior to the consummation of the Merger, FWAC’s Class A ordinary shares were listed on the Nasdaq Stock Market LLC under the ticker symbol “FWAC.”

Our common stock is traded on the NYSE American under the ticker symbol “BEEP.”

Holders of Record

As of March 1, 2024, we had approximately 30.4 million shares of Common Stock outstanding, held by a total of 1,257 stockholders of record.

As of February 28, 2025, we had approximately 42.6 million shares of Common Stock outstanding, held by a total of 1,046 stockholders of record.

We believe the actual number of beneficial owners of our Common Stock is greater than this number of record holders and includes beneficial owners whose shares are held in “street name” by brokers, banks and other nominees.

We do not currently, and may not in the future, generate sufficient cash flow from operations to pay and fully fund future distributions.

We do not currently anticipate that we will be able to resume the payment of distributions.

We do not currently, and may not in the future, generate sufficient cash flow from operations to pay and fund future distributions on our shares of Common Stock.

We do not currently anticipate that we will be able to resume the payment of distributions on our shares of Common Stock.

However, if distributions do resume, all or a portion of the distributions may be paid from other sources, such as cash flows from equity offerings, financing activities, or borrowings.

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If we pay distributions from sources other than cash flow from operations, the funds available to us for investments would be reduced and the share value may be diluted.

The level of distributions will be determined by our Board and depend on several factors including current and projected liquidity requirements, anticipated operating cash flows and tax considerations, and other relevant items deemed applicable by our Board.

No cash dividends can be made on the Common Stock until the preferred distributions are paid.

The declaration and payment and level of distributions will be determined by our Board in its sole discretion and depend on a variety of factors, including current and projected liquidity requirements, anticipated operating cash flows and tax considerations, and other relevant items deemed applicable by our Board.

Securities Authorized for Issuance under Equity Compensation Plans

Information regarding securities authorized for issuance under our equity compensation plan is incorporated herein by reference to Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of Part III of this Annual Report.

Recent Sales of Unregistered Equity Securities

There are no unreported sales of equity securities as at December 31, 2024.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

On September 11, 2024, the Company announced that the Board authorized a share repurchase program for the repurchase of up to $10,000,000 of shares of Common Stock.

The following table summarizes the share repurchase activity for the three months ended December 31, 2024.

The average price paid per share includes broker commissions.

Total Number of Shares Purchased

Average Price Paid per Share

Total Number of Shares Purchased as Part of Publicly Announced Programs

Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs

October 1 - 31, 2024

November 1 - 30, 2024

December 1 - 31, 2024

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

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Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties.

See “Forward-Looking Statements” preceding Part I.

and “Risk Factors” for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from the results described in or implied by these forward-looking statements.

We are a Maryland corporation focused on acquiring, owning and leasing 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 top 50 U.S.

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

See “Forward-Looking Statements” preceding Part I and “Risk Factors” for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from the results described in or implied by these forward-looking statements.

We are a Maryland corporation focused 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 top 50 MSAs with proximity to key demand drivers, such as commerce, events and venues, government and institutions, hospitality and multifamily central business districts.

As of December 31, 2024, we owned 40 parking facilities in 20 separate markets throughout the United States, with a total of approximately 15,100 parking spaces and approximately 5.2 million square feet.

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

Consummation of the Merger

On the Closing Date, we consummated the Merger and the other transactions contemplated by the Merger Agreement.

Additionally, on the Closing Date, the Conversion was consummated by which the Operating Partnership converted into the Operating Company.

Finally, on the Closing Date, we consummated the Preferred PIPE Financing, pursuant to which the Preferred PIPE Investors purchased a total of 46,000 shares of Series 2 Preferred Stock at $1,000 per share for an aggregate purchase price of $46,000,000.

On December 31, 2023, the Series 2 Preferred Stock converted into 13,787,462 shares of Common Stock inclusive of 1,253,404 shares of Common Stock issued to the Preferred PIPE Investors upon the conversion of dividends.

Impact of Return to Work

Return to Work

The return to normalized movement following the COVID-19 pandemic is relatively uneven among markets and industries, which has impacted the performance of our assets, as many of our properties are located in urban centers, near government buildings, entertainment centers, or hotels.

While the employment level in the United States has nearly returned to 2019 levels, many companies continue to deploy a work-from-home or hybrid remote strategy for employees.

Many companies continue to deploy a work-from-home or hybrid remote strategy for employees.

We anticipate that a hybrid work structure for traditional central business district office workers will be the normalized state going-forward.

This has impacted the performance of many of our assets that have office exposure and underscores the importance of a multi-key demand driver strategy in repositioning current and/or acquiring new assets.

Asset Management Contracts

In January and February 2024, 26 of our 43 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.

Managed Property Revenue Contracts

In 2024, 29 of our 40 assets converted to management contracts.

We believe asset management contracts provide the opportunity for 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.

In addition, the move to management contracts properly aligns the incentives and rewards for revenue growth between the third-party operator and the Company.

This change is also expected to result in better revenue linearity compared to revenue recognition in our current agreements, in which lease payments are based on cash collections from operators.

Overall, the conversion to contracts also provides enhanced visibility on the performance of the portfolio within our financial results.

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.

The conversion to asset management contracts will impact the comparability of operating results in future periods as we expect to recognize additional revenue because our operators will no longer share in the revenue and certain expenses that were paid by the operators will now be recognized by us.

This change is also expected to result in better revenue linearity compared to revenue recognition in our lease agreements, in which lease payments are based on cash collections from operators.

Overall, the conversion to management contracts also provides enhanced visibility on the performance of the portfolio within our financial results.

Our intent is to convert the remaining assets to asset management contracts by the end of 2027.

Same Location RevPAS

Revenue Per Available Stall (“RevPAS”) is used to evaluate parking operations and performance.

RevPAS is defined as average monthly Parking Revenue (managed property revenue less related sales tax and credit card fees) divided by the parking stalls in the locations the Parking Revenue was earned.

Parking Revenue does not include Billboard or Commercial Rent, or revenue from locations that are under Lease Agreements.

Parking Revenue is a meaningful component of revenue that is used to judge the performance of locations and the ability to manage each location.

We believe RevPAS is a meaningful indicator of our performance because it measures the period-over-period change in revenues for comparable locations.

Parking Revenue should not be viewed as an alternative measure of our financial performance as it does not reflect all components of revenue, which may be material.

Same location RevPAS represents Parking Revenue at our assets under management agreements prior to the second quarter of 2024 with the exception of two assets where we do not have sufficient historical data to calculate RevPAS.

We believe same location RevPAS is a key performance measure that allows for review of fluctuations in revenue without the impact of portfolio transaction or changes in revenue structure.

Average monthly same location RevPAS for 2024 was $209.24 per month.

Results of Operations for the Years Ended December 31, 2024 and 2023 (dollars in thousands)

For the Year Ended December 31,

Managed property revenue

Base rental income

Management income

Percentage rental income

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Total Revenues

The increase in total revenues for 2023 compared to 2022 is due primarily to the acquisition of one parking asset in Oklahoma City in the second quarter of 2022, increased contract parking and additional demand for event parking, specifically in markets with sporting events, theatres, festivals, and other gatherings, partially offset by changes in lease structures resulting in lower base rental and management income as well as the sale of one parking asset in the first quarter of 2023.

The increase in total revenues for 2024 compared to 2023 is due primarily to 29 of our 40 assets converting to management contracts in 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 Year Ended December 31,

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Organizational, offering and other costs

Total operating expenses

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 $1.0 million decrease in Property Operating Expense is primarily related to professional services related to engineering surveys and other operating expenses in 2022 attributable to the five properties acquired during 2021 and one property acquired during the second quarter of 2022.

The increase in property operating expense for the year ended December 31, 2024 compared to the same period in 2023 is due primarily to 29 of our 40 assets converting to management contracts in 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 Expense

The $4.6 million increase in General and administrative expenses during the year ended December 31, 2023 compared to December 31, 2022 is primarily attributable to an increase in Equity Based Compensation in 2023 of $5.6 million offset by a decrease in gross wages of $1.0 million.

Equity Based Compensation costs for the year ended December 31, 2023 we attributable to non-cash compensation for certain executive LTIP Units granted in February 2023 and awards granted related to 2023 performance, as well as the cancellation of executive LTIP Units for $1.4 million in the third quarter of 2023.

The $2.4 million decrease in general and administrative expenses during the year ended December 31, 2024 compared to December 31, 2023 is primarily attributable to equity based compensation for certain executive performance units expensed through December 31, 2023 of $4.2 million and the cancellation of executive LTIP Units for $1.4 million in the third quarter of 2023, partially offset by non-cash compensation cost for awards granted in 2024 and an increase in payroll and technology expenses.

Preferred Series 2 - Issuance Expense

As part of accounting for the reverse recapitalization, we evaluated the Series 2 Preferred Stock arrangement, and determined that the fair value of the Series 2 Preferred Stock at the time of the transaction of $66.7 million ($4.84 per share) exceeded the implied conversion rate ($3.34 per share) based on a total of 13,787,464 shares of common stock being issued on December 31, 2023 in return for $46 million in proceeds.

As part of accounting for the reverse recapitalization in 2023, we evaluated the Series 2 Preferred Stock arrangement, and determined that the fair value of the Series 2 Preferred Stock at the time of the transaction of $66.7 million ($4.84 per share) exceeded the implied conversion rate ($3.34 per share) based on a total of 13,787,464 shares of common stock issued on December 31, 2024 and $4.6 million of dividends paid in kind in return for $46 million in proceeds.

As a result, the excess in fair value was treated as non-cash compensation and was recorded as Preferred Series 2 - Issuance Expense on the Consolidated Statements of Operations.

Professional Fees

Professional fees decreased by approximately $1.0 million during the year ended December 31, 2023 compared to the year ended December 31, 2022.

The decrease was primarily due to consulting costs related to valuation, tax, and accounting services needed in 2022 that were non-recurring items in 2023.

Organizational, Offering and Other C osts

In May 2022, Legacy MIC entered into an Agreement and Plan of Merger (the “MIT Merger Agreement”) by and between Legacy MIC and Mobile Infrastructure Trust, a Maryland real estate investment trust (“MIT”).

Pursuant to the terms of the MIT Merger Agreement, Legacy MIC would merge with and into MIT, with MIT continuing as the surviving entity resulting from the transaction.

Prior to and as a condition to the merger with MIT, MIT expected to undertake an initial public offering of its common shares of beneficial interest.

Also, in March 2022, Legacy MIC had entered into an agreement with MIT, requiring Legacy MIC to be allocated, bear and (where practicable) pay directly certain costs and expenses related to the merger with MIT.

In connection with the execution of the Merger Agreement with FWAC, the MIT Merger Agreement and the cost allocation agreement with MIT were terminated.

The $2.7 million decrease in Organizational, Offering and Other Costs during 2023 compared to 2022 is due to the termination of the MIT Merger Agreement and other transactions primarily attributable to legal and accounting fees.

This is partially offset by transaction costs associated with the Merger that were allocated to the 1,900,000 FWAC Class B ordinary shares that converted to Common Stock and which are subject to an earn-out structure (the “Earn-Out Shares”) under terms outlined in the Second Amended and Restated Sponsor Agreement as well as well as $1.0 million in lender consent costs.

During the year ended December 31, 2023 the Company recorded approximately $9.0 million of asset impairment charges related to assets impacted by delayed return-to-work trends or other reductions of demand-drivers impacting these assets, as well as disposition of properties.

The decrease in organizational, offering and other costs during the year ended December 31, 2024 compared to December 31, 2023 is primarily attributable to transaction costs associated with the Merger that were allocated to the 1,900,000 FWAC Class B Shares that converted to common stock and which are subject to an earn-out structure (the “Earn-Out Shares”) under terms outlined in the Second Amended and Restated Sponsor Agreement as well as well as $1.0 million in lender consent costs.

During the year ended December 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 year ended December 31, 2023, we recorded approximately $9.0 million of asset impairment charges related to assets impacted by delayed return-to-work trends or other reductions of demand-drivers impacting these assets, as well as disposition of properties.

For the Year Ended December 31,

Interest expense, net

Gain (loss) on sale of real estate

Gain on sale of real estate

Other income, net

Change in fair value of Earn-Out liability

PPP loan forgiveness

Total other, net

Total other expense

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

Interest Expense

The increase in Interest expense, net of approximately $1.0 million during the year ended December 31, 2023 compared to the prior year is primarily attributable to increases in interest rates on the Revolving Credit Facility compared to the prior year partially offset by the repayment of $9.9 million of mortgage loans and the paydown of $15.0 million on the Revolving Credit Facility.

The decrease in interest expense, net of approximately $0.1 million during the year ended December 31, 2024 compared to the prior year is primarily attributable to the repayment of $9.9 million of mortgage loans in the third quarter of 2023 and the paydowns of $15.0 million and $5.0 million on the Revolving Credit Facility in the third quarter of 2023 and 2024, respectively.

This was partially offset by interest expense on the Line of Credit entered into in the third quarter of 2024 and the refinancing of the Revolving Credit Facility with the 2034 CMBS Loan in December 2024.

Gain (Loss) on Sale of Real Estate

In February 2024, we disposed of our Cincinnati Race Street location for $3.15 million, resulting in a loss on sale of real estate of approximately $0.1 million.

In July 2024, we sold one parking lot in Clarksburg, West Virginia for approximately $0.5 million, resulting in an immaterial loss on sale of real estate.

In November 2024, we sold a parking lot located in Indianapolis, Indiana for approximately $4.6 million, resulting in a gain on sale of real estate of approximately $2.7 million.

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.

We received net proceeds of approximately $0.3 million after the repayment of the outstanding mortgage loan, interest and transaction costs.

In September 2022 we sold a parking lot located in Canton, Ohio for $0.7 million, resulting in a loss on sale of real estate of approximately $0.1 million.

Other Income, Net

The increase in Other Income, Net of approximately $1.1 million during the year ended December 31, 2023 compared to the prior year is primarily attributable to a settlement agreement relating to indemnification expenses entered into in third quarter 2023.

The decrease in other income, net of approximately $0.7 million during the year ended December 31, 2024 compared to the prior year is primarily attributable to a gain from a settlement agreement entered into on September 6, 2023 partially offset by legal related gains in 2024.

Change in Fair Value of 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 during the period are based on changes in Company stock price and are reflected in earnings.

PPP loan forgiveness

During May 2021, the Company received notification from the U.S.

Small Business Administration ("SBA") stating that the first-round paycheck protection program loan was forgiven in full in the amount of $348,000.

During April 2022, the Company received notification from the SBA stating that the second-round paycheck protection program loan was forgiven in full in the amount of $328,000.

The forgiveness of these loans was recognized in the consolidated statements of operations in the month they were forgiven.

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

Non-GAAP Measures

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

For the Years Ended December 31,

For the Year Ended December 31,

Managed property revenue

Base rental income

Management income

Percentage rental income

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Reconciliation

(Gain) loss on sale of real estate

PPP loan forgiveness

Gain on sale of real estate

Other income, net

Change in fair value of Earn-Out liability

Interest expense

Interest expense, net

Depreciation and amortization

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Organizational, offering and other costs

Impairment of real estate assets

Net Operating Income

EBITDA and Adjusted EBITDA

Earnings Before Interest Expense, Taxes, Depreciation and Amortization (“EBITDA”) reflects net income (loss) excluding the impact of the following items:

Adjusted EBITDA

Adjusted Earnings Before Interest Expense, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) reflects net income (loss) excluding the impact of the following items:

interest expense, depreciation and amortization, and the provision for income taxes, for all periods presented.

When applicable, Adjusted EBITDA also excludes certain recurring and non-recurring items from EBITDA, including, but not limited to gains or losses from disposition of real estate assets, impairment write-downs of depreciable property, non-cash changes in the fair value of the Earn-out liability, merger-related charges and other expenses, gains or losses on settlements, and stock-based compensation expense.

Our use of EBITDA and Adjusted EBITDA facilitates comparison with results from other companies because it excludes certain items that can vary widely across different industries or among companies within the same industry.

Adjusted EBITDA also excludes stock based compensation expense, non-cash changes in the fair value of the Earn-Out Liability, gains or losses from disposition of real estate assets, impairment write-downs of depreciable property, merger-related charges, and Other Income, Net.

Our use of Adjusted EBITDA facilitates comparison with results from other companies because it excludes certain items that can vary widely across different industries or among companies within the same industry.

For example, interest expense can be dependent on a company’s capital structure, debt levels, and credit ratings.

The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate.

EBITDA and Adjusted EBITDA also exclude depreciation and amortization expense because differences in types, use, and costs of assets can result in considerable variability in depreciation and amortization expense among companies.

Adjusted EBITDA also excludes depreciation and amortization expense because differences in types, use, and costs of assets can result in considerable variability in depreciation and amortization expense among companies.

We exclude stock-based compensation expense in all periods presented to address the considerable variability among companies in recording compensation expense because companies use stock-based payment awards differently, both in the type and quantity of awards granted.

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 years ended December 31, 2023 and 2022 (dollars in thousands):

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

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

For the Year Ended December 31,

Reconciliation of Net loss to Adjusted EBITDA Attributable to the Company

Interest expense

Interest expense, net

Depreciation and amortization

EBITDA Attributable to the Company

Organization and offering costs

Impairment of real estate

Organizational, offering and other costs

Preferred Series 2 - issuance expense

Change in fair value of Earn-Out liability

Gain on settlement of indemnification liability

Other income, net

Gain on sale of real estate

PPP loan forgiveness

Equity and non-cash compensation

Equity based compensation

Adjusted EBITDA Attributable to the Company

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Sources and Uses of Cash

Aside from standard operating expenses, we expect our principal cash demands to be for:

Aside from standard operating expenses, we expect our principal cash demands in both the short term and long term to be for:

principal and interest payments on our outstanding indebtedness;

capital expenditures;

redemption and dividend payments on the Series A Preferred Stock and Series 1 Preferred Stock;

funding of our share repurchase program;

acquisitions of assets.

Our principal source of funds will be rental income from tenants at our parking facilities as well as existing cash on hand as a result of the Merger and the Preferred PIPE Investment.

Our principal source of funds will be rental income and managed property revenue at our parking facilities as well as existing cash on hand and the Line of Credit.

We also may sell properties that we own or place mortgages on properties that we own to raise capital.

During 2022 and 2023, and subsequent to December 31, 2023, we have taken steps to both extend and ladder maturities in our debt profile, including:

In March 2022 we entered into the Credit Agreement, and established a $75.0 million revolving credit facility (the “Revolving Credit Facility”).

During 2022, we used $73.7 million of available capacity to refinance certain of our current loans for various properties and to finance the acquisition of a parking garage in June 2022.

In November 2022 we amended the Credit Agreement to extend the maturity of the Credit Agreement to April 1, 2024 and amended certain financial covenants through the new term.

As of December 31, 2022, we were not in compliance with all applicable financial covenants under the Credit Agreement, resulting in certain events of default.

Subsequently, we entered into the Second Amendment to the Credit Agreement, which resulted in, among other things, a waiver of all existing events of defaults, certain modifications to the financial covenants and a decrease of available credit from $75.0 million to $58.7 million;

We have $29.9 million of debt due within twelve months of the date of the filing of this Annual Report which is comprised of $27.2 million related to the Line of Credit and $2.7 million of notes payable.

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

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

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

We plan to refinance the Line of Credit and note payable prior to their maturities.

However, as refinancing is outside of our control, we plan to sell real estate assets as needed to satisfy the obligations.

Management has determined it is probable that it will be able to successfully implement these plans.

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

During 2023 and 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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In February 2024, we refinanced $5.5 million of notes payable maturing in March 2024 with a 5-year note for $5.9 million.

In March 2024, we executed the Third Amendment to the Credit Agreement, which provided extension options through June 2025 with increased interest rate spreads above SOFR at each extension.

We executed one of these options, which extends the maturity through October 2024.

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

We intend to pursue additional refinancing options related to the Credit Agreement and our near-term maturities.

In September 2024, we entered into a $40.4 million Line of Credit, maturing in September 2025 (the “Line of Credit”).

Borrowings under the Line of Credit will 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.

The proceeds from the Line of Credit (after payment of related legal fees) are only to be used for redemption payments on the Series A Preferred Stock and Series 1 Preferred Stock, unpaid dividends on the Series A Preferred Stock and Series 1 Preferred Stock accrued prior to the closing date of the Line of Credit, funding of the share repurchase program, and a $5.0 million paydown on the Revolving Credit Facility.

In December 2024, we refinanced a $7.2 million note payable with a three-year note for $12 million.

In December 2024, we entered into a $75.5 million, 10-year CMBS financing agreement (the "2034 CMBS Loan").

The 2034 CMBS Loan bears a fixed annual interest rate of 7.755% and is secured by a pool of seven properties.

Proceeds of the 2034 CMBS Loan were used to repay and discharge the Revolving Credit Facility and refinance a property-level loan.

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

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Existing capital expenditure activities expected to be completed in the near-term for general deferred maintenance are expected to cost approximately $0.2 million.

Asset Acquisitions

Asset Acquisitions and Dispositions

Our future acquisitions or development of properties cannot be accurately projected because such acquisitions or development activities depend upon available opportunities that come to our attention and upon our ability to successfully acquire, develop and lease such properties.

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 December 31, 2023, we have identified and are evaluating several parking facilities with more than $300 million in asset value as potential acquisition targets.

Distributions and Warrants

As of December 31, 2024, we have identified and are evaluating several parking facilities as potential acquisition targets.

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

We are also evaluating the potential disposition of certain properties in our portfolio, the proceeds of which we could redeploy into potential acquisition targets.

Distributions and redemptions

In September 2024, we paid all accrued and unpaid dividends for the past dividend periods on the Series A Preferred Stock and Series 1 Preferred Stock.

Additionally, we declared monthly dividend payments on the Series A Preferred Stock and Series 1 Preferred Stock for each month beginning September 2024 through December 2024.

The payment of future dividends is subject to the Board’s discretion and will be determined by the Board based on the Company’s financial condition and such other considerations as the Board deems relevant.

Additionally, in September 2024, we began electing to redeem shares of Series A Preferred Stock and Series 1 Preferred Stock for cash rather than converting to common stock.

Proceeds from the Line of Credit are used to pay the stated value of the shares redeemed for cash as well as the accrued and unpaid dividends for past dividend periods.

In March 2018, we suspended the payment of distributions on our common stock.

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The actual amount and timing of distributions, if any, will be determined by our Board in its discretion and typically will depend on various factors that our Board deems relevant.

We do not currently, and may not in the future, generate sufficient cash flow from operations to fully fund distributions.

We do not currently, and may not in the future, generate sufficient cash flow from operations to fund distributions.

We do not currently anticipate that we will be able to resume the payment of distributions.

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We have not established any limit on the extent to which distributions could be funded from these other sources.

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

As of December 31, 2023, the balance unpaid dividends outstanding was approximately $0.8 million and $9.7 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.

Share repurchase program

In September 2024, the Board authorized a share repurchase program of up to $10 million of shares of our outstanding common stock.

Repurchases may be made from time to time through open-market purchases or privately negotiated transactions.

Proceeds from the Line of Credit are used to fund the share repurchase program.

As a result of the Merger, our previously outstanding warrants became warrants 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.

Cash flow activities

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For the Year Ended December 31,

Net cash provided by (used in) operating activities

Net cash (used in) investing activities

Net cash provided by financing activities

Net cash (used in) operating activities

Net cash provided by (used in) investing activities

Net cash (used in) provided by financing activities

Cash flows from operating activities

The cash used in operating activities for the year ended December 31, 2023 was primarily attributable to payments of deferred offering costs and other Merger-related amounts paid and an increase in cash paid for interest as a result of higher rates during the same comparable period.

In 2024, $0.8 million of cash was used in operating activities compared with $2.1 million used in operating activities in 2023, a decrease of $1.3 million.

The cash used in operating activities for the year ended December 31, 2024 was primarily attributable to payment of general and administrative and professional fees, cash paid for interest, and settlement of liabilities and changes in working capital, which offset the benefit of improved NOI for the period.

Cash flows from investing activities

In 2024, $4.2 million of cash was provided by investing activities compared with $0.3 million used in investing activities in 2023, an increase of $4.5 million.

The cash provided by investing activities during the year ended December 31, 2024 was primarily attributable to proceeds from the sale of three of our parking assets in 2024 partially offset by routine and strategic capital expenditures.

The cash used in investing activities during the year ended December 31, 2023 was primarily attributable to capital expenditures offset by proceeds from the sale of one parking asset in February 2023.

The cash used in investing activities during the year ended December 31, 2022 was primarily attributable to routine and strategic capital expenditures and the acquisition of one parking asset in June 2022.

Cash flows from financing activities

The cash provided by financing activities during the year ended December 31, 2023 was primarily attributable to the Merger and the PIPE investment.

In 2024, $4.3 million of cash was used in financing activities compared with $8.2 million provided by financing activities in 2023, a decrease of $12.5 million.

The cash used in financing activities during the year ended December 31, 2024 was primarily attributable to the proceeds from the Line of Credit, refinancing of the Revolving Credit Facility and certain notes payable and related loan fees, as well as distribution and redemption payments on the Series 1 Preferred Stock and Series A Preferred Stock.

The cash provided by financing activities during the year ended December 31, 2023 was primarily attributable to the Merger and the Preferred PIPE Investment.

The proceeds from the Merger were then used to fund the $15.0 million paydown of the Revolving Credit Facility, payment of transaction costs, and pay-off of certain of mortgage loans.

The cash provided by financing activities during the year ended December 31, 2022 was primarily attributable to proceeds from the Revolving Credit Facility of $73.7 million partially offset by the repayment of $55.1 million of notes payable and loan fees resulting from the Revolving Credit Facility.

Critical Accounting Estimates

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1,900,000 FWAC Class B ordinary shares that converted to Common Stock are subject to “Earn-Out Shares” under terms outlined in the Second Amended and Restated Sponsor Agreement.

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

The Earn-Out Shares vest if certain milestones related to share price are achieved as further described in Footnote 15.

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.

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We utilize market data such as sales price per stall on comparable recent real estate transactions to estimate the fair value of the real estate assets.

We also utilize expected net sales proceeds to estimate the fair value of any centers that are actively being marketed for sale.

We also utilize expected net sales proceeds to estimate the fair value of any properties that are actively being marketed for sale.

We believe that our real estate valuation estimates are based on reasonable assumptions.

However, the use of inappropriate estimates could result in an incorrect valuation of our real estate properties, which could result in material impairment losses in the future.

All assets acquired and liabilities assumed in an acquisition of real estate accounted for as a business combination are measured at their acquisition date fair values.

For acquisitions of real estate accounted for as an asset acquisition, the fair value of consideration transferred by us (including transaction costs) is allocated to all assets acquired and liabilities assumed on a relative fair value basis.

In making estimates of fair values for purposes of allocating purchase price, we will utilize several sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data.

We will also consider information obtained about each property as a result of the our pre-acquisition due diligence, as well as subsequent marketing and leasing activities, in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed.

We allocate the purchase price of acquired properties to tangible and identifiable intangible assets acquired based on their relative fair values.

Tangible assets include land, land improvements, buildings, fixtures and tenant improvements on an as-if vacant basis.

We utilize various estimates, processes and information to determine the as-if vacant property value.

Estimates of value are made using customary methods, including data from appraisals, comparable sales, discounted cash flow analysis and other methods.

Amounts allocated to land, land improvements, buildings and fixtures are based on valuations performed by independent third parties or on our analysis of comparable properties in our portfolio.

Identifiable intangible assets include amounts allocated to acquire leases for above- and below-market lease rates, the value of in-place leases, and the value of customer relationships, as applicable.

The aggregate value of intangible assets related to in-place leases is primarily the difference between the property valued with existing in-place leases adjusted to market rental rates and the property valued as if vacant.

Factors considered in our analysis of the in-place lease intangibles include an estimate of carrying costs during the expected lease-up period for each property, considering current market conditions and costs to execute similar leases.

In estimating carrying costs, we will include real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up period.

Estimates of costs to execute similar leases including leasing commissions, legal and other related expenses are also utilized.

The value of lease intangibles is amortized to depreciation and amortization expense over the remaining term of the respective lease.

If a tenant terminates its lease with us, the unamortized portion of the in-place lease intangibles is recognized over the shortened lease term.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 under the Exchange Act and are not required to provide the information otherwise reported under this item.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our consolidated financial statements, together with the report of our independent registered public accounting firm, appear on pages F-1 though F-27 of this Annual Report.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 5. Market for Registrant’s Common Equity