What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-21 compared with 2024-03-21 · 149 added, 198 removed, 607 unchanged (36% of the section changed)

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Report of Independent Registered Public Accounting Firm (PCAOB ID # 248 )

Consolidated Balance Sheets at December 31, 2022 and 2021 ...........................................................................................

Consolidated Balance Sheets a s of December 31, 2024 and 2023

Consolidated Statements of Operations for the Years Ended December 31, 2024 and 2023

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Basis for opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

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Stockholders' equity:

Series C preferred stock;

$ 0.01 par value;

20,000 shares authorized;

none issued or outstanding as of December 31, 2023 and 2022

Class A common stock;

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Other income (expense):

Interest income (expense), net 96 ( 222 )

Interest income 672 96

Gain (loss) on real estate ventures ( 297 ) ( 1,187 )

Other income (expense), net 63 79

Income (loss) from continuing operations before income tax 8,152 7,853

Income (loss) from operations before income tax 10,725 8,152

Provision for (benefit from) income tax ( 3,835 ) 368

Net income (loss) from continuing operations 7,784 7,728

Net income (loss) from discontinued operations, net of tax — ( 381 )

Net income (loss) $ 14,560 $ 7,784

Impact of Series C preferred stock redemption — 2,046

Net income (loss) attributable to common stockholders $ 7,784 $ 9,393

Weighted-average common stock outstanding:

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Net income (loss) per share:

Basic - Continuing operations $ 0.81 $ 1.09

Basic - Discontinued operations — ( 0.04 )

Basic net income (loss) per share $ 0.81 $ 1.05

Diluted - Continuing operations $ 0.77 $ 1.02

Diluted - Discontinued operations — ( 0.04 )

Diluted net income (loss) per share $ 0.77 $ 0.98

Basic $ 1.48 $ 0.81

Diluted $ 1.41 $ 0.77

See accompanying Notes to Consolidated Financial Statements.

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(In thousands)

Series C Class A Class B

Preferred Stock Common Stock Common Stock Treasury Accumulated

Shares Amount Shares Amount Shares Amount APIC stock deficit Total

Class A Class B

Common Stock Common Stock Treasury Accumulated

Shares Amount Shares Amount APIC stock deficit Total

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

Issuance of common stock, net of shares withheld for taxes 165 1 — — ( 391 ) — — ( 390 )

Redemption of Series C preferred stock ( 3,441 ) ( 6,765 ) 1,000 10 — — 709 — 2,046 ( 4,000 )

Stock-based compensation 23 — — — 968 — — 968

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Year Ended December 31,

Operating Activities - Continuing Operations

Net income (loss) from continuing operations $ 7,784 $ 7,728

Adjustments to reconcile net income (loss) from continuing operations to net cash provided by (used in) operating activities:

Operating Activities

Net income (loss) $ 14,560 $ 7,784

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization 302 212

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Net cash provided by (used in) operating activities 10,675 9,003

Investing Activities - Continuing Operations

Investing Activities

Investments in real estate ventures ( 140 ) ( 1,583 )

Proceeds from sale of CES — 1,016

Distributions from real estate ventures 586 335

Purchase of deferred compensation plan securities ( 428 ) ( 52 )

Purchase of fixed assets/leasehold improvements/intangibles ( 247 ) ( 626 )

Purchase of fixed assets ( 368 ) ( 247 )

Net cash provided by (used in) investing activities ( 350 ) ( 1,547 )

Financing Activities - Continuing Operations

Payments under credit facility - due to affiliates — $ ( 5,500 )

Redemption of Series C Preferred Stock — ( 4,000 )

Financing Activities

Proceeds from issuance of common stock related to equity awards 226 —

Payment of taxes related to the net share settlement of equity awards ( 578 ) ( 390 )

Net cash provided by (used in) financing activities ( 352 ) ( 390 )

Discontinued Operations

Operating cash flows, net — ( 305 )

Investing cash flows, net — —

Financing cash flows, net — ( 26 )

Net cash provided by (used in) discontinued operations — ( 331 )

Net increase (decrease) in cash and cash equivalents 9,973 7,066

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Income taxes 3 26

Supplemental Disclosure of Non-Cash Investing and Financing Activities

Issuance of Series A common stock to redeem Series C preferred stock $ — $ 4,230

Right of use assets and lease liabilities at commencement — 1,224

See accompanying Notes to Consolidated Financial Statements.

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("Comstock" or the "Company"), founded in 1985 and incorporated in the state of Delaware in 2004, is a leading asset manager, developer, and operator of mixed-use and transit-oriented properties in the Washington, D.C.

metropolitan area.

On March 31, 2022, the Company completed the sale of Comstock Environmental Services, LLC ("CES"), a wholly owned subsidiary, to August Mack Environmental, Inc.

("August Mack") for approximately $ 1.4 million of total consideration.

(See Note 3 for additional information).

On June 13, 2022, the Company completed two separate significant transactions to further deleverage its balance sheet and enhance its long-term revenue outlook and growth potential.

The first one with CP Real Estate Services, LC (“CPRES”), an entity owned by Christopher Clemente, Comstock’s Chief Executive Officer, redeemed all outstanding Series C preferred stock at a significant discount to carrying value.

Secondly, the Company executed a new asset management agreement with Comstock Partners, LC ("CP"), an entity controlled by Mr.

Clemente and wholly owned by Mr.

Clemente and certain family members, which covers its Anchor Portfolio of assets (the "2022 AMA").

(See Notes 10 and 14 for additional information).

The Company operates through four primarily real estate-focused subsidiaries – CHCI Asset Management, LC (“CAM”);

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

The Company has reflected CES as a discontinued operation in its consolidated statements of operations for all periods presented.

Unless otherwise noted, all amounts and disclosures throughout these Notes to Consolidated Financial Statements relate to the Company's continuing operations.

(See Note 3 for additional information).

Use of Estimates

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The Company's CODM, its Chief Executive Officer, primarily reviews consolidated results of operations to assess performance and make decisions on how to allocate resources, therefore the Company views its operations and manages its business as one reportable operating segment.

(See Note 15 for additional information).

Cash and Cash Equivalents

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The Company evaluates the recoverability of its long-lived assets for impairment whenever events or circumstances indicate that the carrying amount of the assets may not be recoverable.

Recoverability is measured by comparing the carrying amount of the asset to the future undiscounted cash flows the asset is expected to generate.

Recoverability is measured by comparing the carrying amount of the

asset to the future undiscounted cash flows the asset is expected to generate.

If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset.

Goodwill and Intangible Assets

On an annual basis, and at interim periods when circumstances require, the Company tests the recoverability of any goodwill and intangible assets balances that exist at that time and reviews for indicators of impairment.

The Company performs impairment assessments at the reporting unit level, which is defined as an operating segment or one level below an operating segment, also known as a component.

To test for the recoverability of goodwill and indefinite-lived intangible assets, the Company first performs a qualitative assessment based on economic, industry and company-specific factors for all or selected reporting units to determine whether the existence of events and circumstances indicates that it is more likely than not that the goodwill or indefinite-lived intangible asset is impaired.

Based on the results of the qualitative assessment, two additional steps in the impairment assessment may be required.

The first step would require a comparison of each reporting unit’s fair value to the respective carrying value.

If the carrying value exceeds the fair value, a second step is performed to measure the amount of impairment loss on a relative fair value basis, if any.

Intangible Assets

On an annual basis, and at interim periods when circumstances require, the Company tests the recoverability of any intangible assets balances that exist at that time and reviews for indicators of impairment.

To test for the recoverability of indefinite-lived intangible assets, the Company first performs a qualitative assessment based on economic, industry and company-specific factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired.

Next, a quantitative assessment is performed to compare the fair value of the indefinite-lived asset to the respective carrying value.

If the carrying value exceeds the fair value, a second assessment is performed to measure the amount of impairment loss on a relative fair value basis, if any.

Fair Value Measurement

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Operating lease assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments (e.g., rent) over the lease term beginning at the commencement date.

The operating lease

assets are adjusted for lease incentives, deferred rent, and initial direct costs, if incurred.

The operating lease assets are adjusted for lease incentives, deferred rent, and initial direct costs, if incurred.

The related lease expense is recognized on a straight-line basis over the lease term.

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The lease term is defined as the non-cancelable portion of the lease term plus any periods covered by an option to extend the lease if it is reasonably certain that the option will be exercised.

The Company operates under long-term asset management and property management agreements that provide recurring fee-based revenue streams.

• Asset management services are anchored by a long-term, full-service asset management agreement with Comstock Partners, LC ("CP"), an affiliate entity controlled by Chief Executive Officer Christopher Clemente, which includes a cost-plus fee structure and covers all of the properties in the Company's Anchor Portfolio (the "2022 AMA" - See Note 13 in the Notes to Consolidated Financial Statements for additional information).

• Property management services are performed through three wholly owned subsidiaries:

CHCI Commercial, CHCI Residential, and ParkX Management ("ParkX").

All properties in the Company's managed portfolio have entered into property management agreements with the Company's operational subsidiaries that provide services for market-rate fees.

The Company’s revenue streams, revenue recognition policies, and cost of revenue details are summarized by the following:

Asset Management/Property Management/Parking

Asset Management/Property Management/Parking Management

Asset management pricing associated with the 2022 AMA includes a cost-plus management fee or a market-rate fee form of variable consideration, and the Company earns whichever is higher.

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Property Management pricing is generally in the form of a monthly management fee based upon property-level cash receipts, square footage under management, or some other variable metric.

Parking management pricing is generally in the form of a fixed monthly management fee to include additional fixed fees for accounting, remote monitoring, ticketing, insurance, and various other site-level services.

In addition, property management and parking revenue includes reimbursable expenses such as payroll and other employee costs for those performing services at managed properties.

Parking management pricing is generally in the form of a monthly management fee and additional fees for accounting, remote monitoring, ticketing, insurance, and various other site-level services.

In addition, property management and ParkX revenue includes reimbursable expenses such as payroll and other employee costs for those performing services at managed properties.

Asset management, property management, and parking services represent a series of distinct daily services rendered over time.

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(See Note 13 for additional information).

Incentive Fees are calculated as a percentage of the imputed profit that would be realized upon the hypothetical sale or recapitalization of the asset (or assets) for which triggering event criteria were met.

The calculation of imputed profit is based on a fair market value assessment that includes highly variable financial inputs and must also consider macro-economic and environmental factors that may affect fair market value.

Incentive Fees represent variable consideration and are calculated as a percentage of the imputed profit that would be realized upon the hypothetical sale or recapitalization of the asset (or assets) for which triggering event criteria were met.

The calculation of imputed profit is based on a fair market value assessment that includes highly variable financial inputs and must also consider

macro-economic and environmental factors that may affect fair market value.

Due to the subjective and potentially volatile nature of this variable consideration, revenue is only recognized on Incentive Fees for each managed asset when 1) any material uncertainties associated with the valuation of real estate assets that drive Incentive Fees are substantially resolved and 2) it is probable that a significant reversal in the amount of related cumulative Incentive Fee revenue recognized will not occur.

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Cost of Revenue

Cost of revenue is composed primarily of employment expenses for personnel dedicated to providing services to the Anchor Portfolio as well as the costs and expenses of the Company related to maintaining the public listing of its shares and complying with related regulatory and reporting obligations pursuant to the 2022 AMA.

It also includes payroll and other reimbursable expenses incurred under the Company's various property management agreements.

Cost of revenue is composed primarily of employment expenses for personnel providing services to the Company's managed portfolio of assets.

It also includes reimbursable expenses incurred under the Company's various asset and property management agreements, as well as the expenses related to the public listing of its shares and corresponding regulatory reporting obligations.

Stock-Based Compensation

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Recent Accounting Pronouncements - Adopted

In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments—Credit Losses:

Measurement of Credit Losses on Financial Instruments .” This guidance is intended to introduce a revised approach to the recognition and measurement of credit losses, emphasizing an updated model based on current expected credit losses ("CECL") rather than incurred losses.

The Company adopted the standard effective January 1, 2023, and determined that adoption of the standard had no material impact on its consolidated financial statements and related disclosures.

Recent Accounting Pronouncements - Not Yet Adopted

In March 2023, the FASB issued ASU 2023-01, “ Leases (Topic 842) – Common Control Arrangements .” This guidance amends certain provisions of ASC 842, specifically those that apply to leasing arrangements between related parties under common control.

The standard will become effective for fiscal years beginning after December 15, 2023, and early adoption is permitted.

The Company does not expect the adoption of this standard to have a material impact on the Company’s consolidated financial statements and related disclosures.

In October 2023, the FASB issued ASU 2023-06, “ Disclosure Improvements – Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative .” This guidance affects a wide variety of topics in the Codification.

The effective date for each amendment will be the date on which the removal of the respective related disclosures from Regulation S-X or Regulation S-K becomes effective.

Early adoption is prohibited.

The Company does not expect the adoption of this standard to have a material impact on the Company’s consolidated financial statements and related disclosures.

The standard is effective for fiscal years beginning after December 15, 2023, and early adoption was permitted.

The Company adopted the standard effective January 1, 2024 and determined that adoption of the standard had no material impact on its consolidated financial statements and related disclosures.

In November 2023, the FASB issued ASU 2023-07, “ Segment Reporting (Topic 280):

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This standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted and requires retrospective application to all prior periods presented in the financial statements.

The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

The Company adopted the standard effective January 1, 2024 and determined that adoption of the standard had no material impact on its consolidated financial statements.

(See Note 15 for the related segment disclosures).

Recent Accounting Pronouncements - Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, “ Income Taxes (Topic 740):

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The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

Discontinued Operations

On March 31, 2022, the Company completed the sale of CES to August Mack in accordance with the Asset Purchase Agreement for approximately $ 1.4 million of total consideration, composed of $ 1.0 million in cash and $ 0.4 million of cash held in escrow that is subject to net working capital and other adjustments.

The Company executed this divestiture to enhance its focus and pursue continued growth initiatives for its core asset management business.

The following table reconciles major line items constituting pretax income (loss) from discontinued operations to net income (loss) from discontinued operations as presented in the consolidated statements of operations (in thousands):

Year Ended December 31,

Revenue $ — $ 1,460

Cost of revenue — ( 1,562 )

Selling, general, and administrative — ( 403 )

Other income (expense) — 87

Pre-tax income (loss) from discontinued operations — ( 418 )

Provision for (benefit from) income tax — ( 37 )

Net income (loss) from discontinued operations $ — $ ( 381 )

The Company recognized a net loss of $ 0.2 million on the divestiture of CES, calculated by comparing the final adjusted purchase price to the carrying value of the net assets sold in the transaction as of March 31, 2022.

These amounts reflect the finalized transaction costs and net working capital adjustments.

In November 2024, the FASB issued ASU 2024-03, “ Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses .” This guidance requires disclosure of disaggregated information about certain financial statement expense line items presented on the consolidated statements of operations in the notes to the financial statements on an interim and annual basis.

The standard can be applied either prospectively or retrospectively and is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

Fixed Assets & Intangible Assets

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Depreciation expense for the years ended December 31, 2024 and 2023 was $ 0.3 million and $ 0.2 million, respectively.

On May 6, 2022, the Company purchased the rights to the www.comstock.com domain name for $ 0.1 million.

In May 2022, the Company purchased the rights to the www.comstock.com domain name for $ 0.1 million.

The Company has recorded the domain name purchase as an indefinite-lived intangible asset on its consolidated balance sheets that will be tested annually for impairment.

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Additional details on each investment are as follows:

On April 30, 2019, the Company entered into a master transfer agreement with CPRES which entitled the Company to priority distribution of residual cash flow from its Class B membership interest in Comstock Investors X, L.C.

In April 2019, the Company entered into a master transfer agreement with CP Real Estate Services, LC (“CPRES”), an entity owned by Mr.

Clemente, which entitled the Company to priority distribution of residual cash flow from its Class B membership interest in Comstock Investors X, L.C.

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

As of December 31, 2023, the residual cash flow primarily relates to anticipated proceeds from the sale of rezoned residential lots.

The cash will be released as land development work associated with these projects is completed and lots are sold.

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

The proceeds from the lot sales will be distributed to the Company as remaining land development work associated with these projects is completed.

(See Note 13 for additional information).

In December 2019, the Company entered into a joint venture with CP to acquire The Hartford Building ("The Hartford"), a Class-A office building adjacent to Clarendon Station on Metro’s Orange Line in Arlington County’s premier transit-oriented office market, the Rosslyn-Ballston Corridor.

Built in 2003, the 211,000 square foot mixed-use Leadership in Energy and Environmental Design (“LEED”) GOLD building is being leased to multiple high-quality tenants.

Built in 2003, the 211,000 square foot, LEED Gold-certified building is located in the premier Rosslyn-Ballston corridor.

In February 2020, the Company arranged for DivcoWest to purchase a majority ownership stake in The Hartford Building 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 $ 0.9 million of revenue for the year ended December 31, 2023.

Fair value is determined using an income approach and sales comparable approach models.

December 31, 2024.

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

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

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In October 2021, the Company entered into a joint venture with CP to acquire a stabilized 15-story, luxury high-rise apartment building in Rockville, Maryland that was rebranded as BLVD Forty Four.

Located one block from the Rockville Station on Metro's Red Line and in the heart of the I-270 Technology and Life Science Corridor, the 263 -unit mixed use property built in 2015 includes approximately 16,000 square feet of retail and a commercial parking garage.

Built in 2015 and located one block from the Rockville Station on Metro's Red Line in the heart of the I-270 Technology and Life Science Corridor, the 263 -unit mixed use property includes approximately 16,000 square feet of retail and a commercial parking garage.

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 $ 1.3 million of revenue for the year ended December 31, 2024.

Fair value is determined using an income approach and sales comparable approach models.

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

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

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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 $ 1.1 million of revenue

for the year ended December 31, 2023.

Fair value is determined using an income approach and sales comparable approach models.

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 $ 1.2 million of revenue for the year ended December 31, 2024.

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

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

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(See Note 13 for additional information).

In November 2024, the Company entered into a definitive purchase agreement for Comstock 41 with SCG Development Holdings, LLC ("SCG") that is contingent upon the successful rezoning of the property to allow for the development of an affordable housing project at the site.

Upon closing, the Company will enter into an operating agreement and a development agreement with SCG, under which the Company will provide construction management services for the affordable housing project that will be fully financed by SCG.

The Company will also be entitled to provide property management services once the development is ready for occupancy.

Other Investments

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("STS") to provide title insurance to its clients.

The Company records this co-investment using the equity method of accounting and adjusts the carrying value of the investment for its proportionate share of net income and distributions.

The Company records this co-investment using the equity method of accounting and adjusts the carrying value of the investment for

its proportionate share of net income and distributions.

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

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Investment Financial Information

The following tables summarize the combined summarized statements of operations information for our unconsolidated investments in real estate ventures (in thousands):

The following tables summarize the combined statements of operations information for our unconsolidated investments in real estate ventures (in thousands):

Year Ended December 31,

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The Company does not have any lease liabilities which have not yet commenced as of December 31, 2024.

Credit Facility - Due to Affiliates

On March 19, 2020, the Company entered into a Revolving Capital Line of Credit Agreement with CPRES, pursuant to which the Company secured a $ 10.0 million capital line of credit (the “Credit Facility”) that will expire in March 2025.

The Credit Facility provides for an initial variable interest rate of the Wall Street Journal Prime Rate plus 1.00 % per annum on advances made under the Credit Facility, payable monthly in arrears.

The Company made a $ 5.5 million initial draw on the Credit Facility in the form of a note with an April 30, 2023, maturity date.

On September 30, 2022, the Company paid down its $ 5.5 million outstanding principal balance on the Credit Facility in full.

As of December 31, 2023, the Credit Facility remained available for use and the Company had no outstanding debt or financing arrangements for which future payments are due .

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 scheduled to expire in March 2025 (the “Credit Facility”).

As of December 31, 2024, the full balance of the Credit Facility remained available for use and the Company had no outstanding debt or financing arrangements for which future payments are due.

On March 19, 2025, the Company entered into an agreement with CP to secure a new $ 10.0 million capital line of credit with the same variable interest rate structure as the Credit Facility that is scheduled to expire in March 2030 (the "New Credit Facility").

Commitments and Contingencies

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however, the Company does not expect the results, if any, to have a material adverse impact on its results of operations, financial position, or liquidity.

The Company records a contingent liability when it is both probable that a liability has been incurred and the amount can be reasonably

The Company records a contingent liability when it is both probable that a liability has been incurred and the amount can be reasonably estimated;

however, the Company is not aware of any reasonably possible losses that would have a material impact on its results of operations, financial position, or liquidity.

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Holders of Class A common stock are entitled to one vote per share and holders of Class B common stock are entitled to fifteen votes per share.

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

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

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

Preferred Stock

The Company's certificate of incorporation authorizes the issuance of Series C non-convertible preferred stock with a par value of $ 0.01 per share.

Series C Preferred Stock has a discretionary, non-cumulative, dividend feature and is redeemable by holders in the event of liquidation or change in control of the Company.

On June 13, 2022, the Company entered into a Share Exchange and Purchase Agreement ("SEPA") with CPRES, pursuant to which the Company acquired from CPRES all outstanding shares of its non-convertible and non-redeemable Series C preferred stock for (i) 1.0 million shares of the Company’s Class A common stock, valued at the consolidated closing bid price of the Class A shares on Nasdaq on the business day immediately preceding the entry into the SEPA and (ii) $ 4.0 million in cash.

The SEPA was unanimously approved by the independent directors of the Company.

Upon completion of the transaction, all shares of Series C preferred stock were immediately cancelled and fully retired.

At the time of the transaction, the total carrying value of the Series C preferred stock (including the related additional paid-in capital) was $ 10.3 million.

The share exchange was accounted for as a redemption;

therefore, the $ 2.0 million difference between the carrying value and the $ 8.3 million fair value of the consideration paid upon redemption was added to net income to arrive at income attributable to common stockholders and calculate net income (loss) per share for the Company's fiscal year ended December 31, 2022.

(See Note 13 for additional information).

Stock-based Compensation

On February 12, 2019, the Company approved the 2019 Omnibus Incentive Plan (the “2019 Plan”), which replaced the 2004 Long-Term Compensation Plan (the “2004 Plan”).

The 2019 Plan provides for the issuance of stock options, stock appreciation rights ("SARs"), restricted stock, restricted stock units, dividend equivalents, performance awards, and stock or other stock-based awards.

The 2019 Plan mandates that all lapsed, forfeited, expired, terminated, cancelled and withheld shares, including those from the predecessor plan, be returned to the 2019 Plan and made available for issuance.

The 2019 Plan originally authorized

2.5 million shares of the Company's Class A common stock for issuance.

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

As of December 31, 2024, there were 1.4 million shares of Class A common stock available for issuance under the 2019 Plan.

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Exercisable as of December 31, 2024 90 $ 2.72 3.2 $ 479

There were no stock option exercises during the year ended December 31, 2023.

The total intrinsic value of stock options exercised during the year ended December 31, 2024 was $ 0.1 million.

There were no stock options exercised during the year ended December 31, 2023 .

All the Company's revenue was for the years ended December 31, 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 type (in thousands):

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

Year Ended December 31,

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Year Ended December 31,

Revenue by Timing

Recurring/over time $ 43,666 $ 37,151

Point-in-time 7,628 7,570

Total revenue $ 51,294 $ 44,721

Year Ended December 31,

Revenue by Contract Fee Type 1

Fixed-price $ 6,255 $ 7,048

Cost-plus 26,170 22,652

Variable 12,296 9,613

Cost Recovery 2

$ 33,687 $ 32,261

14,001 10,019

Total revenue $ 51,294 $ 44,721

1 Certain contracts contain multiple revenue streams with characteristics that lend to classification in more than one category.

Certain contracts contain multiple revenue streams that lend to classification in more than one category.

Includes cost plus revenues tied to asset management services under the 2022 AMA and reimbursable expenses.

Includes fixed rate contract amounts applied to various variable metrics to determine the amount of revenue earned.

Includes fixed fee arrangements where the dollar value of the revenue earned remains consistent over time.

Pursuant to the terms of the 2022 AMA, the Company may earn and recognize incentive fee revenue for certain commercial assets in its managed portfolio based on specific dates and measurement criteria that are defined in the agreement.

(See Note 13 for additional information).

For the years ended December 31, 2024, and 2023 the Company recognized revenue from incentive fees of $ 1.5 million and $ 4.8 million, respectively.

The incentive fee revenue recognized in both periods stemmed from scheduled annual triggering events for operating assets that began on October 1, 2022, and are scheduled each October 1 through 2024, pursuant to the terms of the 2022 AMA.

All Incentive Fees recognized to date have been related to services performed in prior periods for which revenue recognition criteria were previously constrained.

Subsequent to these scheduled triggering events, and in accordance with terms pursuant to the 2022 AMA, incentive fees may be recognized on assets currently under development upon the achievement of future triggering events tied to various metrics that indicate stabilization, such as occupancy and leasing rates.

(See Note 14 in the Notes to Consolidated Financial Statements for additional information).

All incentive fee revenue recognized to date has been related to services performed in prior periods for which revenue recognition criteria were previously constrained.

The following table summarizes the components of the provision for (benefit from) income tax (in thousands):

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Bonus accrual 1,277 1,172

Goodwill amortization — ( 1 )

Valuation allowance ( 17,146 ) ( 23,666 )

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Net Income (Loss) Per Share

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

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

Year Ended December 31,

Net income (loss) from continuing operations - Basic and Diluted $ 7,784 $ 7,728

Impact of Series C preferred stock redemption — 2,046

Net income (loss) from continuing operations attributable to common stockholders - Basic and Diluted 7,784 9,774

Net income (loss) from discontinued operations - Basic and Diluted — ( 381 )

Net income (loss) attributable to common shareholders - Basic and Diluted $ 7,784 $ 9,393

Net income (loss) - Basic and Diluted $ 14,560 $ 7,784

Weighted-average common shares outstanding - Basic 9,846 9,629

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Net income (loss) per share:

Basic - Continuing operations $ 0.81 $ 1.09

Basic - Discontinued operations — ( 0.04 )

Basic net income (loss) per share $ 0.81 $ 1.05

Diluted - Continuing operations $ 0.77 $ 1.02

Diluted - Discontinued operations — ( 0.04 )

Diluted net income (loss) per share $ 0.77 $ 0.98

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):

Basic $ 1.48 $ 0.81

Diluted $ 1.41 $ 0.77

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

Year Ended December 31,

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Related Party Transactions

On June 13, 2022, CHCI Asset Management, L.C.

In June 2022, CHCI Asset Management, L.C.

(“CAM”), an entity wholly owned by the Company, entered into a new master asset management agreement with CP (the “2022 AMA”) that superseded in its entirety the previous asset management agreement between CAM and CPRES dated April 30, 2019 (the “2019 AMA”).

Entry into the 2022 AMA was unanimously approved by the independent directors of the Company.

Consistent with the structure of the 2019 AMA, the 2022 AMA engages CAM to manage and administer CP’s commercial real estate portfolio (the "Anchor Portfolio") and the day to-day operations of CP and each property-owning subsidiary of CP (collectively, the “CP Entities”).

The 2022 AMA engages CAM to manage and administer CP’s commercial real estate portfolio (the "Anchor Portfolio") and the day to-day operations of CP and each property-owning subsidiary of CP (collectively, the “CP Entities”).

CAM will provide investment advisory, development, and asset management services necessary to build out, stabilize and manage the Anchor Portfolio, which currently consists primarily of two of the larger transit-oriented, mixed-use developments located on Washington D.C.

Metro’s Silver Line (Reston Station and Loudoun Station) that are owned by CP Entities and ultimately controlled by Mr.

Pursuant to the fee structures set forth in both the 2022 AMA and 2019 AMA, CAM is entitled to receive an annual payment equal to the greater of the "Cost-Plus Fee" or the "Market Rate Fee".

The Cost-Plus Fee is equal to the sum of (i) the comprehensive costs incurred by or for providing services to the Anchor Portfolio, (ii) the costs and expenses of the Company related to maintaining the listing of its shares on a securities exchange and complying with regulatory and reporting obligations of

a public company, and (iii) a fixed annual payment of $ 1.0 million.

The Market Rate Fee calculation is defined in the respective asset management agreements as the sum of the fees detailed in the following table:

Description 2022 AMA 2019 AMA

Pursuant to the fee structures set forth in the 2022 AMA, CAM is entitled to receive an annual payment equal to the greater of the "Cost-Plus Fee" or the "Market Rate Fee".

The Market Rate Fee calculation is defined in the 2022 AMA as the sum of the fees detailed in the following table:

Description 2022 AMA Fees

Asset Management Fee 2.5 % of Anchor Portfolio revenue

2.5 % of Anchor Portfolio revenue

Entitlement Fee 15 % of total re-zoning costs

Encompassed in Development and Construction Fee

Development and Construction Fee 5 % of development costs (excluding previously charged Entitlement Fees)

4 % of development costs

Property Management Fee 1 % of Anchor Portfolio revenue

1 % of Anchor Portfolio revenue

Acquisition Fee 1 % on first $ 50 million of purchase price;

0.5 % above $ 50 million

0.5 % of purchase price

Disposition Fee 1 % on first $ 50 million of sale price;

0.5 % above $ 50 million

0.5 % of sale price

In addition to the annual payment of either the Market Rate Fee or the Cost-Plus Fee, CAM is also entitled on an annual basis to receive certain supplemental fees, as detailed for the respective asset management agreements in the following table:

Description 2022 AMA 2019 AMA

Description 2022 AMA

Incentive Fee When receiving Market Rate Fee :

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On a mark-to-market basis, an incentive fee equal to 10 % of the imputed profit of certain real estate assets comprising the Anchor Portfolio for which a Triggering Event 1 has occurred, after calculating a compounding preferred return of 8 % on CP invested capital (the “Base Incentive Fee”)

10 % of the free cash flow of each of the real estate assets comprising the Anchor Portfolio after calculating a compounding preferred return of 8 % on CPRES invested capital

Investment Origination Fee 1 % of raised capital

1 % of raised capital

Leasing Fee $ 1 /per sqft.

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for lease renewals

$ 1 / per sqft.

for new leases and $ 0.50 / per sqft.

for lease renewals

Loan Origination Fee 1 % of any Financing Transaction or other commercially reasonable and mutually agreed upon fee

1 % of any Financing Transaction or other commercially reasonable and mutually agreed upon fee

Triggering events are differentiated between operating assets (i.e., those already in service) and assets under development.

Operating asset triggering events are scheduled for specific dates, whereas triggering events for assets under development are tied to various metrics that indicate stabilization, such as occupancy and leasing rates.

On September 11, 2024, the Company entered into an amendment to the 2022 AMA with an effective date of July 1, 2024 (the "First Amendment") that included, among others, the following key revised provisions:

• A deferral of the Operating Assets Trigger Event that was originally scheduled on October 1, 2024 (as defined in the original 2022 AMA) to calculate incentive fee revenue for seven specified managed portfolio assets to be, at the election of the Company upon the occurrence of the event and with consent from CP, either (a) October 1, 2027, (b) upon the sale of the asset, (c) upon the refinance of the asset, or (d) the period of time in which an 85 % leased rate has been achieved if the asset is a commercial asset;

• A revised definition of the Development and Construction Management Fee to include payment of the fee during delays in delivery caused by a casualty event;

• A revised definition of Supplemental Fees to include a lease termination fee equal to 3.50 % of the gross rental revenue paid by any tenant of a commercial asset in connection with the early termination of a lease.

Except as amended by the First Amendment, the original terms of the 2022 AMA remain in full force and effect.

The 2022 AMA will terminate on January 1, 2035 (“Initial Term”) and will automatically renew for successive additional one year terms (each an “Extension Term”) unless CP delivers written notice of non-renewal of the 2022 AMA at least 180 days prior to the termination date of the Initial Term or any Extension Term.

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These property management agreements each have initial terms of one year with successive, automatic one-year renewal terms.

The Company generally receives base management fees under these agreements based upon a percentage of gross rental revenues for the portions of the buildings being managed in addition to reimbursement of specified expenses, including employment expenses of personnel employed by the Company in the management and operation of each property.

The Company generally receives base management fees under these agreements based upon a percentage of gross rental revenues for the

portions of the buildings being managed in addition to reimbursement of specified expenses, including employment expenses of personnel employed by the Company in the management and operation of each property.

Construction Management Agreements

The Company has construction management agreements with properties owned by CP Entities under which the Company receives fees to provide certain construction management and supervision services, including construction supervision and management of the buildout of certain tenant premises.

The Company receives a flat construction management fee for each engagement under a work authorization based upon the construction management or supervision fee set forth in the applicable tenant’s lease, which fee is generally 1 % to 4 % of the total costs (or total hard costs) of construction of the tenant’s improvements in its premises, or as otherwise agreed to by the parties.

The Company has construction management agreements with properties owned by CP Entities under which the Company receives fees to provide certain construction management and supervision services, including management of tenant buildouts and casualty event remediation and restoration.

The Company typically receives a construction management fee that is set forth in the applicable tenant’s lease or executed work authorization and based on a percentage of the total costs (or total hard costs) of the project.

Lease Procurement Agreements

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Business Management Agreements

On April 30, 2019, CAM entered into a Business Management Agreement with Investors X, whereby CAM provides Investors X with asset and professional services related to the wind down of the Company’s divested homebuilding operations and the continuation of services related to the Company’s divested land development activities.

The aggregate fee payable to CAM from Investors X under the Business Management Agreement, which ended on December 31, 2022, was $ 0.9 million payable in 15 quarterly installments of $ 0.1 million each.

In July 2019, CAM entered into a Business Management Agreement (the “BC Management Agreement”) with CPRES, whereby CAM provides CPRES with professional management and consultation services, including, without limitation, consultation on land development and real estate transactions, for a residential community located in Monteverde, Florida.

On January 1, 2023, a successor contract for the BC Management Agreement was executed by DCS Real Estate Investments, LC, an entity controlled by a member of CP.

The BC Management Agreement provided that DCS Real Estate Investments, LC pay CAM an annual management fee equal to $ 0.4 million and reimburse CAM for certain expenses.

The BC Management Agreement was terminated effective December 31, 2024.

On February 1, 2024, CAM entered into a Business Management Agreement (the “SH Management Agreement”) with Springfield Holdings, LLC (“Springfield”), an entity controlled by a member of CP, whereby CAM provides Springfield with professional management and consultation on land development and real estate services for a residential community located in Ranson, West Virginia.

The initial term of the SH Management Agreement expires on December 31, 2024 with automatic one-year renewals.

The SH Management Agreement provides that Springfield will reimburse CAM for certain immaterial title, survey, and architectural expenses at cost.

In April 2019, the Company entered into a master transfer agreement with CPRES that entitled the Company to priority distribution of residual cash flow from its Class B membership interest in Comstock Investors X, L.C.

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

The Company considers Investors X to be a variable interest entity over which it does not have the power to direct activities that most significantly impact economic performance, therefore it is not the primary beneficiary of Investors X and does not have to consolidate the entity into its financial results.

(See Note 4 for additional information).

On July 1, 2019, CAM entered into a Business Management Agreement (the “BC Management Agreement”) with CPRES, whereby CAM provides CPRES with professional management and consultation services, including, without limitation, consultation on land development and real estate transactions, for a residential community located in Monteverde, Florida.

On January 1, 2023, a successor contract for the BC Management Agreement was executed by DCS Real Estate Investments, LC, an entity controlled by a member of CP.

The BC Management Agreement is structured in successive renewable one-year terms.

The BC Management Agreement provides that DCS Real Estate Investments, LC will pay CAM an annual management fee equal to $ 0.4 million, payable in equal monthly installments and will reimburse CAM for certain expenses.

In December 2019, the Company made an investment related to the purchase of The Hartford Building ("The Hartford"), a stabilized commercial office building located at 3101 Wilson Boulevard in the Clarendon area of Arlington County, Virginia.

In December 2019, the Company made an investment related to the purchase of The Hartford, a stabilized commercial office building located at 3101 Wilson Boulevard in the Clarendon area of Arlington, Virginia.

In conjunction with the investment, the Company entered into an operating agreement with CP to form Comstock 3101 Wilson, LC, to purchase The Hartford.

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BLVD Forty Four/BLVD Ansel

In October 2021 and March 2022, the Company entered into joint ventures with CP to acquire BLVD Forty Four and BLVD Ansel, respectively, two adjacent mixed-use luxury high-rise apartment buildings located near the Rockville Metro Station in Montgomery County, Maryland.

The Company considers BLVD Forty Four and BLVD Ansel to be variable interest entities upon which it exercises significant influence;

however, considering key factors such as the Company’s ownership interest, participation in policy-making decisions, and oversight of management services by majority equity holders, the Company concluded that the power to direct activities that most significantly impact economic performance is shared.

however, considering key factors such as the Company’s ownership interest and participation in policy-making decisions by majority equity holders, and oversight of management services by majority equity holders, the Company concluded that the power to direct activities that most significantly impact economic performance is shared.

Given that the Company is not the entity most closely associated with the properties, it concluded that it is not the primary beneficiary and does not have a controlling financial interest in either property.

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The entitlement success fee, if earned, will equal 25 % of the economic value created by the relocation of the MPDUs (subject to reasonable agreed upon changes at the time of the calculation) and due upon approval of a finalized amendment to the existing project development plan by local government agencies.

(See Note 5 for additional information).

Corporate Leases

On November 1, 2020, the Company relocated its corporate headquarters to office space located at 1900 Reston Metro Plaza in Reston, Virginia, pursuant to a ten-year lease agreement with an affiliate controlled and owned by Christopher Clemente, its Chief Executive Officer, and his family.

On November 1, 2022, the Company executed a 3,778 square foot lease expansion agreement with terms that align with the original agreement.

( See Note 6 for additional information).

On January 1, 2022, ParkX Management, LC, a subsidiary of the Company, entered into a five-year lease agreement for its parking operations monitoring center with an affiliate controlled and owned by Mr.

Clemente and his family.

In November 2020, the Company relocated its corporate headquarters to office space owned and controlled by its Chief Executive Officer Christopher Clemente and his family, pursuant to a ten-year lease agreement.

In November 2022, the Company executed a 3,778 square foot lease expansion agreement with terms that align with the original agreement.

( See Note 6 for additional information).

Series C Preferred Stock Redemption

On June 13, 2022, the Company entered into the SEPA with CPRES, pursuant to which the Company acquired from CPRES all outstanding shares of its non-convertible and non-redeemable Series C preferred stock at a significant discount to carrying value.

In January 2022, ParkX Management, LC, a subsidiary of the Company, entered into a separate five-year lease agreement with an affiliate controlled and owned by Mr.

Clemente and his family to host ParkX's specialized remote monitoring center operations.

( See Note 5 for additional information).

Credit Facility

On March 19, 2025, the Company entered into an agreement with CP to secure a new $ 10.0 million capital line of credit with a variable interest rate of the Wall Street Journal Prime Rate plus 1.00 % per annum that is scheduled to expire in March 2030, replacing a pre-existing expiring credit facility with CPRES ( See Note 6 for additional information).

Employee Benefit Plans

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The combined total expense for this plan was $ 0.7 million and $ 0.6 million for the years ended December 31, 2024 and 2023, respectively.

In addition, the Company adopted a non-qualified deferred compensation plan ("NQDC Plan") in November 2023.

In November 2023, the Company adopted a non-qualified deferred compensation plan ("NQDC Plan").

The NQDC Plan allows certain eligible employees to defer, on a pre-tax basis, a portion of their base annual salary and/or their annual bonus and earn tax-deferred earnings on these deferrals.

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NQDC Plan assets and liabilities are marked-to-market each quarter.

Fair value changes to NQDC Plan liabilities are recorded as a benefit plan-related operating expense and the net investment income (loss) from NQDC Plan assets is recorded as other income (expense) in our condensed consolidated statements of income.

As of December 31, 2024, total NQDC plan assets and liabilities were $ 0.4 million and $ 0.5 million, respectively.

For the year ended December 31, 2023, there were no distributions from the Company's NQDC Plan.

During the year ended December 31, 2024, there were $ 0.1 million in distributions from the Company's NQDC Plan.

Segment Information

The Company’s CODM is the Chief Executive Officer.

The Company views its operations and manages its business as a single reportable operating segment.

Segment revenue is primarily generated from the performance of various real estate services through the asset and property management contracts entered into with customers.

The CODM evaluates segment performance and decides how to allocate resources primarily based on the Company’s consolidated net income results, as reported in the consolidated statements of operations as "net income (loss)".

The measure of segment assets is reported on the consolidated balance sheets as "total assets".

The financial information reviewed by the CODM includes the following disaggregation of operating expenses for the Company's single reportable operating segment (in thousands):

Year Ended December 31,

Asset management and corporate operating expenses $ 23,807 $ 21,618

Commercial operating expenses 4,042 4,086

Residential operating expenses 4,835 4,492

ParkX operating expenses 7,076 4,181

Stock compensation 945 968

Depreciation and amortization 302 212

Total operating costs and expenses $ 41,007 $ 35,557

Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

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 8. Financial Statements and Supplementary Data