What changed in this filing

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Item 1. Financial Statements

2024-08-08 compared with 2024-05-14 · 62 added, 43 removed, 399 unchanged (21% of the section changed)

3 unchanged sentences

in thousands, except per share data)

March 31, December 31,

June 30, December 31,

Current assets:

27 unchanged sentences

59,780 shares authorized;

9,690 issued and 9,605 outstanding as of March 31, 2024;

9,705 issued and 9,619 outstanding as of June 30, 2024;

9,525 issued and 9,440 outstanding as of December 31, 2023

1 unchanged sentence

$ 0.01 par value;

220 shares authorized, issued, and outstanding as of March 31, 2024 and December 31, 2023

220 shares authorized, issued, and outstanding as of June 30, 2024 and December 31, 2023

Additional paid-in capital 202,205 202,112

8 unchanged sentences

in thousands, except per share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Revenue $ 10,753 $ 8,967 $ 21,391 $ 19,242

25 unchanged sentences

Shares Amount Shares Amount APIC stock deficit Total

Three Months Ended March 31, 2024

Three and Six Months Ended June 30, 2024

Balance as of December 31, 2023 9,525 $ 94 220 $ 2 $ 202,112 $ ( 2,662 ) $ ( 162,330 ) $ 37,216

3 unchanged sentences

Balance as of March 31, 2024 9,690 $ 96 220 $ 2 $ 201,912 $ ( 2,662 ) $ ( 161,420 ) $ 37,928

Three Months Ended March 31, 2023

Issuance of common stock, net of shares withheld for taxes 15 — — — 3 — — 3

Stock-based compensation — — — — 290 — — 290

Net income (loss) — — — — — — 946 946

Balance as of June 30, 2024 9,705 $ 96 220 $ 2 $ 202,205 $ ( 2,662 ) $ ( 160,474 ) $ 39,167

Three and Six Months Ended June 30, 2023

Balance as of December 31, 2022 9,337 $ 93 220 $ 2 $ 201,535 $ ( 2,662 ) $ ( 170,114 ) $ 28,854

3 unchanged sentences

Balance as of March 31, 2023 9,478 $ 94 220 $ 2 $ 201,479 $ ( 2,662 ) $ ( 169,360 ) $ 29,553

Issuance of common stock, net of shares withheld for taxes 33 — — — ( 96 ) — — ( 96 )

Stock-based compensation — — — — 266 — — 266

Net income (loss) — — — — — — 475 475

Balance as of June 30, 2023 9,511 $ 94 220 $ 2 $ 201,649 $ ( 2,662 ) $ ( 168,885 ) $ 30,198

See accompanying Notes to Condensed Consolidated Financial Statements

2 unchanged sentences

in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating Activities

4 unchanged sentences

(Gain) loss on real estate ventures 294 479

Distributions from real estate ventures — 27

Deferred income taxes 567 303

73 unchanged sentences

The following table summarizes the Company's investments in real estate ventures that are recorded on the consolidated balance sheets (in thousands):

March 31, December 31,

June 30, December 31,

Investment Ownership % 2024 2023 Accounting Method

10 unchanged sentences

("Investors X"), an unconsolidated variable interest entity that owns the Company's residual homebuilding operations.

As of March 31, 2024, all residential lots have been sold.

As of June 30, 2024, all residential lots have been sold.

The proceeds from the sales will be released as land development work associated with these projects is completed.

5 unchanged sentences

In February 2020, the Company arranged for DivcoWest to purchase a majority ownership stake in The Hartford and secured a $ 87.0 million loan facility from MetLife.

As part of the transaction, the Company entered into asset management and property management agreements to manage the property in exchange for market-rate fees, for which it recognized $ 0.3 million of revenue for the three months ended March 31, 2024.

As part of the transaction, the Company entered into asset management and property management agreements to manage the property in exchange for market-rate fees, for which it recognized $ 0.2 million and $ 0.5 million of revenue for the three and six months ended June 30, 2024, respectively.

Fair value of the property is determined on a quarterly basis using an income approach and sales comparable approach model.

As of March 31, 2024, the Company’s ownership interest in the Hartford was 2.5 %.

As of June 30, 2024, the Company’s ownership interest in the Hartford was 2.5 %.

(See Note 12 for additional information).

3 unchanged sentences

In connection with the transaction, the Company received an acquisition fee and is entitled to receive investment related income and promote distributions in connection with its equity interest in the asset.

The Company also provides asset, residential, retail and parking property management services for the property in exchange for market-rate fees, for which it recognized $ 0.3 million of revenue for the three months ended March 31, 2024.

The Company also provides asset, residential, retail and parking property management services for the property in exchange for market-rate fees, for which it recognized $ 0.3 million and $ 0.7 million of revenue for the three and six months ended June 30, 2024, respectively.

Fair value of the property is determined on a quarterly basis using an income approach and sales comparable approach model.

As of March 31, 2024, the Company’s ownership interest in BLVD Forty Four was 5.0 %.

As of June 30, 2024, the Company’s ownership interest in BLVD Forty Four was 5.0 %.

(See Note 12 for additional information).

2 unchanged sentences

The Company also provides asset, residential, retail and parking property management services for the property in exchange for market-rate fees, for which it recognized $ 0.3 million and $ 0.6 million of revenue for the three and six months ended June 30, 2024, respectively.

Fair value is determined on a quarterly basis using an income approach and sales comparable approach model.

As of March 31, 2024, the Company’s ownership interest in BLVD Ansel was 5.0 %.

As of June 30, 2024, the Company’s ownership interest in BLVD Ansel was 5.0 %.

(See Note 12 for additional information).

4 unchanged sentences

Change in fair value ( 281 )

Balance as of March 31, 2024 $ 4,762

Balance as of June 30, 2024 $ 4,666

In December 2023, the Company completed the acquisition of an 18,150 square foot land parcel located at 41 Maryland Avenue in Rockville, Maryland (“Comstock 41”) through a wholly owned subsidiary for $ 1.5 million.

7 unchanged sentences

The carrying value of the STS investment is recorded in "other assets" on the Company's consolidated statement of balance sheets.

The Company's proportionate share of STS net income and distributions are recorded in gain (loss) on real estate ventures in the consolidated statements of operations and was immaterial for the three months ended March 31, 2024 and 2023 .

The Company has operating leases for office space leased in various buildings for its own use.

4 unchanged sentences

The following table summarizes operating lease costs, by type (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Operating lease costs

3 unchanged sentences

The following table presents supplemental cash flow information related to the Company's operating leases (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Cash paid for lease liabilities:

Operating cash flows from operating leases $ 377 $ 411 $ 775 $ 800

As of March 31, 2024, the Company's operating leases had a weighted-average remaining lease term of 6.5 years and a weighted-average discount rate of 4.64 %.

As of June 30, 2024, the Company's operating leases had a weighted-average remaining lease term of 6.3 years and a weighted-average discount rate of 4.64 %.

The following table summarizes future lease payments (in thousands):

5 unchanged sentences

Total lease liabilities $ 6,707

The Company does not have any leases which have not yet commenced as of March 31, 2024.

The Company does not have any leases which have not yet commenced as of June 30, 2024.

In March 2020, the Company entered into a five-year Revolving Capital Line of Credit Agreement with CPRES, pursuant to which the Company secured a $ 10.0 million capital line of credit with a variable interest rate of the Wall Street Journal Prime Rate plus 1.00 % per annum (the “Credit Facility”).

As of March 31, 2024, the full balance of the Credit Facility remained available for use up through the March 19, 2025 expiration date, and the Company had no outstanding debt or financing arrangements for which future payments are due.

As of June 30, 2024, the full balance of the Credit Facility remained available for use up through the March 19, 2025 expiration date, and the Company had no outstanding debt or financing arrangements for which future payments are due.

Commitments and Contingencies

7 unchanged sentences

Fair Value Disclosures

As of March 31, 2024, the carrying amount of cash and cash equivalents, accounts receivable, other current assets, and accounts payable approximated fair value because of the short-term nature of these instruments.

As of March 31, 2024, deferred compensation plan assets, which are Company-funded investments that are meant to correlate with participant-directed hypothetical investments in stock and bond mutual funds, are measured using quoted prices in active markets based on the market price per unit multiplied by the number of units held (Level 1).

As of June 30, 2024, the carrying amount of cash and cash equivalents, accounts receivable, other current assets, and accounts payable approximated fair value because of the short-term nature of these instruments.

As of June 30, 2024, deferred compensation plan assets, which are Company-funded investments that are meant to correlate with participant-directed hypothetical investments in stock and bond mutual funds, are measured using quoted prices in active markets based on the market price per unit multiplied by the number of units held (Level 1).

Corresponding deferred compensation plan liabilities reflect the fair value of the aforementioned hypothetical investments and are based on inputs derived principally from observable market data (Level 2) through their direct correlation with the deferred compensation plan assets.

As of March 31, 2024, the Company had certain equity method investments in real estate ventures that it elected to record at fair value using significant unobservable inputs (Level 3).

As of June 30, 2024, the Company had certain equity method investments in real estate ventures that it elected to record at fair value using significant unobservable inputs (Level 3).

(See Note 3 for additional information).

6 unchanged sentences

Shares of our Class B common stock are convertible into an equivalent number of shares of our Class A common stock upon transfer.

As of March 31, 2024, the Company had not declared any dividends.

As of June 30, 2024, the Company had not declared any dividends.

Stock-based Compensation

3 unchanged sentences

The 2019 Plan originally authorized 2.5 million shares of the Company's Class A common stock for issuance.

As of March 31, 2024, there were 1.3 million shares of Class A common stock available for issuance under the 2019 Plan.

During the three months ended March 31, 2024, and 2023, the Company recorded stock-based compensation expense of $ 0.2 million and $ 0.2 million, respectively.

As of June 30, 2024, there were 1.3 million shares of Class A common stock available for issuance under the 2019 Plan.

During the three and six months ended June 30, 2024, the Company recorded stock-based compensation expense of $ 0.3 million and $ 0.5 million, respectively.

During the three and six months ended June 30, 2023, the Company recorded stock-based compensation expense of $ 0.3 million and $ 0.5 million, respectively.

Stock-based compensation costs are included in selling, general, and administrative expense on the Company's consolidated statements of operations.

As of March 31, 2024, there was $ 1.6 million of total unrecognized stock-based compensation, which is expected to be recognized over a weighted-average period of 2.1 years.

As of June 30, 2024, there was $ 1.3 million of total unrecognized stock-based compensation, which is expected to be recognized over a weighted-average period of 2.0 years.

Restricted Stock Units

10 unchanged sentences

Canceled/Forfeited ( 30 ) 4.40

Balance as of March 31, 2024 631 $ 3.99

Vested and expected to vest after March 31, 2024 632 3.99

Balance as of June 30, 2024 622 $ 3.99

Vested and expected to vest after June 30, 2024 619 3.99

Represents additional restricted stock units that vested and were released as a result of the satisfaction of a performance vesting condition.

The total intrinsic value of RSUs that vested during the three months ended March 31, 2024 and 2023 was $ 1.2 million and $ 0.9 million, respectively.

The total intrinsic value of RSUs that vested during the six months ended June 30, 2024 and 2023 was $ 1.2 million and $ 1.1 million, respectively.

Stock Options

7 unchanged sentences

Canceled/Forfeited — —

Balance as of March 31, 2024 116 $ 3.07 3.6 $ 261

Exercisable as of March 31, 2024 116 $ 3.07 3.6 $ 261

There were no stock option exercises during the three months ended March 31, 2024 and 2023.

All of the Company's revenue for the three months ended March 31, 2024 and 2023 was generated in the United States.

Balance as of June 30, 2024 108 $ 3.17 3.3 $ 361

Exercisable as of June 30, 2024 108 $ 3.17 3.3 $ 361

The total intrinsic value of stock options exercised during the six months ended June 30, 2024 was immaterial.

There were no stock options exercised in 2023.

All of the Company's revenue for the three and six months ended June 30, 2024 and 2023 was generated in the United States.

The following tables summarize the Company’s revenue by line of business, customer type, and contract fee type (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Revenue by Line of Business

3 unchanged sentences

Total revenue $ 10,753 $ 8,967 $ 21,391 $ 19,242

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Revenue by Customer Type

2 unchanged sentences

Total revenue $ 10,753 $ 8,967 $ 21,391 $ 19,242

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Revenue by Contract Fee Type (1)

8 unchanged sentences

The Company's effective tax rate in any given period is directly impacted by the timing and magnitude of any partial valuation allowance releases.

The Company's effective tax rates for the three months ended March 31, 2024 and 2023 differ from the U.S.

federal statutory tax rate of 21%, primarily due to state income taxes and the impact of stock compensation shortfall/windfall adjustments.

The Company's effective tax rates for the three and six months ended June 30, 2024 and 2023 differ from the U.S.

federal statutory tax rate of 21%, primarily due to impact of state income taxes and stock compensation shortfall/windfall adjustments.

Net Income (Loss) Per Share

The following table sets forth the calculation of basic and diluted net income (loss) per share (in thousands, except per share data):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Net income (loss) - Basic and Diluted $ 946 $ 475 $ 1,856 $ 1,229

6 unchanged sentences

The following common share equivalents have been excluded from the computation of diluted net income (loss) per share because their effect was anti-dilutive (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Restricted stock units 1 — — 2

87 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements