Comstock Holding Companies, Inc. 10-K

Item 8. Financial Statements and Supplementary Data COMSTOCK HOLDING COMPANIES, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID # 248 ) F- 1 Consolidated Balance Sheets as of December 31, 2025 and 2024 F- 3 Consolidated Statements of Operations for the Years Ended December 31, 2025 and 2024 F- 4 Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2025 and 2024 F- 5 Consolidated Statements of Cash Flows for the Years Ended December 31, 2025 and 2024 F- 6 Notes to Consolidated Financial Statements F- 7 20 Table of Contents Report of Independent Registered Public Accounting Firm Board of Directors and Stockholders Comstock Holding Companies, Inc. Opinion on the financial statements We have audited the accompanying consolidated balance sheets of Comstock Holding Companies, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Basis for opinion 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. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical audit matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Realizability of deferred tax assets and valuation allowance assessment As described further in Note 11 to the consolidated financial statements, the Company assesses available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of existing deferred tax assets. The Company continues to record valuation allowances against deferred tax assets when it is considered more likely than not that the deferred tax asset will not be realized prior to expiration. During 2025, after weighing all available positive and negative evidence, the Company released $7.5 million of the valuation allowance as management deemed estimated future taxable income to be sufficient to realize additional deferred tax assets related to net operating loss and tax credit carryforwards. The principal consideration for our determination that the realizability of deferred tax assets is a critical audit matter is that the estimate of future taxable income is an accounting estimate subject to a high level of estimation uncertainty. There is inherent uncertainty and subjectivity related to management’s judgments and assumptions regarding the Company’s future taxable income, the determination of which is complex in nature and may be affected by future operations of the Company and market or economic conditions. As such, significant auditor judgment was required. F-1 Table of Contents Our audit procedures related to the realizability of deferred tax assets included the following, among others. • We obtained an understanding of the design and tested implementation of controls relating to the evaluation of the realizability of deferred tax assets and the estimation of future taxable income; • We evaluated management’s assumptions regarding the Company’s estimated future taxable income, including comparison of previous forecasts to actual results and obtained support for incremental changes applied to the prior forecast; • With the assistance of our income tax specialists, we evaluated the nature of each of the deferred tax assets, including their expiration dates and their projected utilization when compared to projections of future taxable income. /s/ GRANT THORNTON LLP We have served as the Company’s auditor since 2020. Philadelphia, Pennsylvania March 17, 2026 F-2 Table of Contents COMSTOCK HOLDING COMPANIES, INC. Consolidated Balance Sheets (In thousands, except per share data) December 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 31,282 $ 28,761 Accounts receivable, net 829 282 Accounts receivable - related parties 19,137 7,254 Prepaid expenses and other current assets 2,018 430 Total current assets 53,266 36,727 Fixed assets, net 674 574 Intangible assets 144 144 Leasehold improvements, net 30 60 Investments in real estate ventures 5,953 6,228 Operating lease assets 5,002 5,916 Deferred income taxes, net 18,894 14,720 Deferred compensation plan assets 897 438 Other assets 102 60 Total assets $ 84,962 $ 64,867 Liabilities and Stockholders' Equity Current liabilities: Accrued personnel costs $ 7,839 $ 4,952 Accounts payable and accrued liabilities 847 781 Current operating lease liabilities 994 922 Total current liabilities 9,680 6,655 Deferred compensation plan liabilities 960 492 Operating lease liabilities 4,356 5,351 Total liabilities 14,996 12,498 Commitments and contingencies (Note 6) Stockholders' equity: Class A common stock; $ 0.01 par value; 59,780 shares authorized; 9,958 issued and 9,872 outstanding as of December 31, 2025; 9,774 issued and 9,689 outstanding as of December 31, 2024 99 97 Class B common stock; $ 0.01 par value; 220 shares authorized, issued, and outstanding as of December 31, 2025 and 2024 2 2 Additional paid-in capital 203,246 202,702 Treasury stock, at cost ( 86 shares of Class A common stock) ( 2,662 ) ( 2,662 ) Accumulated deficit ( 130,719 ) ( 147,770 ) Total stockholders' equity 69,966 52,369 Total liabilities and stockholders' equity $ 84,962 $ 64,867 See accompanying Notes to Consolidated Financial Statements. F-3 Table of Contents COMSTOCK HOLDING COMPANIES, INC. Consolidated Statements of Operations (In thousands, except per share data) Year Ended December 31, 2025 2024 Revenue $ 62,861 $ 51,294 Operating costs and expenses: Cost of revenue 48,080 38,630 Selling, general, and administrative 2,545 2,075 Depreciation and amortization 306 302 Total operating costs and expenses 50,931 41,007 Income (loss) from operations 11,930 10,287 Other income (expense): Interest income 807 672 Gain (loss) on real estate ventures ( 1 ) ( 297 ) Other income (expense), net 141 63 Income (loss) from operations before income tax 12,877 10,725 Provision for (benefit from) income tax ( 4,174 ) ( 3,835 ) Net income (loss) $ 17,051 $ 14,560 Weighted-average common stock outstanding: Basic 10,067 9,846 Diluted 10,470 10,327 Net income (loss) per share: Basic $ 1.69 $ 1.48 Diluted $ 1.63 $ 1.41 See accompanying Notes to Consolidated Financial Statements. F-4 Table of Contents COMSTOCK HOLDING COMPANIES, INC. Consolidated Statements of Changes in Stockholders' Equity (In thousands) Class A Class B Common Stock Common Stock Treasury Accumulated Shares Amount Shares Amount APIC stock deficit Total Balance as of December 31, 2023 9,525 $ 94 220 $ 2 $ 202,112 $ ( 2,662 ) $ ( 162,330 ) $ 37,216 Issuance of common stock, net of shares withheld for taxes 232 3 — — ( 355 ) — — ( 352 ) Stock-based compensation 17 — — — 945 — — 945 Net income (loss) — — — — — — 14,560 14,560 Balance as of December 31, 2024 9,774 $ 97 220 $ 2 $ 202,702 $ ( 2,662 ) $ ( 147,770 ) $ 52,369 Issuance of common stock, net of shares withheld for taxes 175 2 — — ( 516 ) — — ( 514 ) Stock-based compensation 9 — — — 1,060 — — 1,060 Net income (loss) — — — — — — 17,051 17,051 Balance as of December 31, 2025 9,958 $ 99 220 $ 2 $ 203,246 $ ( 2,662 ) $ ( 130,719 ) $ 69,966 See accompanying Notes to Consolidated Financial Statements. F-5 Table of Contents COMSTOCK HOLDING COMPANIES, INC. Consolidated Statements of Cash Flows (In thousands) Year Ended December 31, 2025 2024 Operating Activities Net income (loss) $ 17,051 $ 14,560 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 306 302 Stock-based compensation 1,060 945 (Gain) loss on real estate ventures 1 297 Distributions from real estate ventures — 82 Deferred income taxes ( 4,174 ) ( 3,835 ) Accrued interest income ( 67 ) ( 70 ) (Gain) loss on disposal of fixed assets 4 — (Gain) loss on deferred compensation plan 20 3 Changes in operating assets and liabilities: Accounts receivable ( 12,430 ) ( 2,291 ) Prepaid expenses and other current assets ( 272 ) ( 7 ) Accrued personnel costs 2,887 271 Accounts payable and accrued liabilities 67 ( 57 ) Deferred compensation plan liabilities 352 455 Other assets and liabilities ( 8 ) 20 Net cash provided by (used in) operating activities 4,797 10,675 Investing Activities Investments in real estate ventures ( 57 ) ( 140 ) Distributions from real estate ventures 289 586 Capitalized expenses for real estate ventures ( 1,249 ) — Purchase of deferred compensation plan securities ( 477 ) ( 428 ) Proceeds from sales of deferred compensation plan securities 112 — Purchase of fixed assets ( 380 ) ( 368 ) Net cash provided by (used in) investing activities ( 1,762 ) ( 350 ) Financing Activities Proceeds from issuance of common stock related to equity awards 112 226 Payment of taxes related to the net share settlement of equity awards ( 626 ) ( 578 ) Net cash provided by (used in) financing activities ( 514 ) ( 352 ) Net increase (decrease) in cash and cash equivalents 2,521 9,973 Cash and cash equivalents, beginning of period 28,761 18,788 Cash and cash equivalents, end of period $ 31,282 $ 28,761 Supplemental Cash Flow Information Net cash paid (received) for: Interest $ ( 809 ) $ ( 602 ) Income taxes — 3 See accompanying Notes to Consolidated Financial Statements. F-6 Table of Contents COMSTOCK HOLDING COMPANIES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (In thousands, except per share data or otherwise indicated) 1. Company Overview Comstock Holding Companies, Inc. ("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. region. The Company operates through four primarily real estate-focused subsidiaries – CHCI Asset Management, LC (“CAM”); CHCI Residential Management, LC; CHCI Commercial Management, LC; and Park X Management, LC. 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and include the accounts of the Company and its consolidated subsidiaries. Intercompany balances and transactions have been eliminated. Certain prior period amounts have been reclassified to conform to current period presentation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Significant items subject to such estimates include, but are not limited to, the valuation of equity method investments, incentive fee revenue recognition, and the valuation of deferred tax assets. Assumptions made in the development of these estimates contemplate both the macroeconomic landscape and the Company's anticipated results, however actual results may differ materially from these estimates. Fiscal Year Comstock uses a fiscal reporting calendar which begins on January 1 and ends on December 31. The fiscal years presented are the years ended December 31, 2025 (“2025”) and December 31, 2024 (“2024”). Each of the Company’s fiscal quarters ends on the last day of the calendar month. Segment Information Operating segments are defined as components of a business that can earn revenue and incur expenses for which discrete financial information is evaluated on a regular basis by the chief operating decision maker (“CODM”) in order to decide how to allocate resources and assess performance. 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 Cash and cash equivalents are comprised of cash and short-term investments with maturities of three months or less when purchased. The Company’s cash and cash equivalents include holdings in checking and overnight sweep investment accounts, all of which have daily maturities. The carrying amount of cash equivalents approximates fair value due to the short-term maturity of these investments. Accounts Receivable Accounts receivable are recorded at the amount invoiced. The Company records an allowance for doubtful accounts on an as-needed basis to reduce the trade accounts receivables balance by the estimated amounts that may become uncollectible in the future. The allowance for doubtful accounts estimate is based on the accounts receivable aging report, historical collection experience, and the payee's general financial condition. The Company does not record an allowance for doubtful accounts on accounts receivable from related parties due to the nature of the receivables and collection history. As of December 31, 2025, the Company had no recorded allowances for doubtful accounts. F-7 Table of Contents Concentrations of Credit Risk Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, and accounts receivable from related parties. The Company invests a significant portion of its excess cash position into U.S. Treasury-based funds through an automated overnight sweep investment account program administered by a brokerage firm affiliated with the bank at which the majority of our cash deposits are held. The Company maintains cash and cash equivalents in financial institutions that management believes to be financially sound and with minimal credit risk. At times, the Company's deposits exceed federally insured limits, however management believes that the Company’s credit risk exposure is mitigated by the financial strength of the banking institutions in which the deposits are held. The Company does a significant amount of business with related parties, demonstrated by related parties accounting for 89.6 % of its consolidated revenue and 95.8 % of its accounts receivable in 2025. The Company generally does not obtain collateral or other security to support financial instruments subject to credit risk and monitors the credit standing of its related party entities. Investments in Real Estate Ventures The Company holds investments in certain real estate ventures that qualify for equity method accounting treatment. Based on elections made at the investment date, the Company has elected to record certain equity method investments at fair value. With this treatment, investments are recorded at fair value on the consolidated balance sheets and subsequently remeasured at each reporting period. The fair value of these investments as of the balance sheet date is generally determined using a discounted cash flow analysis, income approach, or sales-comparable approach, depending on the unique characteristics of the real estate venture. Assumptions about the discount rate are based on a weighted average cost of capital built up from various interest rate components applicable to the Company. Assumptions about the growth rate and future financial performance of a reporting unit are based on the Company's forecasts, business plans, economic projections and anticipated future cash flows. Market multiples are derived from recent transactions among comparable real estate properties of similar size, construct, and location. The net change in the fair value of the investments is recorded on the consolidated statements of operations as other income (expense). In addition, the Company performs an analysis on its investments in real estate ventures to determine if they qualify as a variable interest entity (“VIE”). For an entity in which we have acquired an interest, the entity will be considered a VIE if either of the following characteristics are met: (i) the entity lacks sufficient equity to finance its activities without additional subordinated financial support, or (ii) equity holders, as a group, lack the characteristics of a controlling financial interest. If an entity is determined to be a VIE, the Company then determines if it is the primary beneficiary to determine if the entity needs to be included in its consolidated financial results. The primary beneficiary has both (i) the power to direct the activities that most significantly impact the VIE’s economic performance, and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the entity. The Company considers a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIE’s economic performance, including evaluating the nature of relationships and activities of the parties involved and, where necessary, determining which party within a related-party group is most closely associated with the VIE and would therefore be considered the primary beneficiary. The Company determines primary beneficiary status of a VIE at the time of investment and performs ongoing reassessments to evaluate whether changes in the entity’s capital structure or changes in the nature of its involvement with the entity result in a change to the VIE designation or a change to its consolidation conclusion. (See Note 4 for additional information). Fixed Assets Fixed assets are carried at cost less accumulated depreciation and are depreciated on a straight-line basis over their estimated useful lives , which are as follows: Asset Class Estimated Useful Life Leasehold improvements Shorter of asset life or related lease term Furniture and fixtures 7 years Office equipment 5 years Vehicles 5 years Computer equipment 3 years Capitalized software 3 years Evaluation of Long-Lived Assets 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 F-8 Table of Contents 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. 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 The Company applies fair value accounting for all financial assets and liabilities that are reported at fair value in the financial statements on a recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting guidance establishes a defined three-tier hierarchy to classify and disclose the fair value of assets and liabilities on both the date of their initial measurement as well as all subsequent periods. The hierarchy prioritizes the inputs used to measure fair value by the lowest level of input that is available and significant to the fair value measurement. The three levels are described as follows: • Level 1 : Observable inputs. Quoted prices in active markets for identical assets and liabilities; • Level 2 : Observable inputs other than the quoted price. Includes quoted prices for similar instruments, quoted prices for identical or similar instruments in inactive markets and amounts derived from valuation models where all significant inputs are observable in active markets; and • Level 3 : Unobservable inputs. Includes amounts derived from valuation models where one or more significant inputs are unobservable and require the Company to develop relevant assumptions. The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level of classification as of each reporting period. Leases The determination of whether an arrangement contains a lease and the classification of a lease, if applicable, is made at lease commencement, at which time the Company also measures and recognizes a right-of-use ("ROU") asset, representing the Company’s right to use the underlying asset, and a lease liability, representing the Company’s obligation to make lease payments under the terms of the arrangement. 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 related lease expense is recognized on a straight-line basis over the lease term. The Company's leases generally do not include an implicit rate; therefore, an incremental borrowing rate is used that is based on information available at the lease commencement date in determining the present value of future minimum lease payments. The Company typically looks to floating interest rates charged under existing arrangements or current market interest rates at the time of lease commencement when determining the incremental borrowing rate. For the purpose of recognizing operating lease assets and liabilities, the Company has elected the practical expedient to not recognize an asset or lease liability for short-term leases, which are leases with a term of twelve months or less. 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. F-9 Table of Contents Revenue 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 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. Revenue for other asset management contracts is generally in the form of a monthly fee based upon property-level cash receipts or leasing agreements executed at the managed properties. 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 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. The revenue these services is presented gross for any services provided by the Company's employees and presented net of third-party reimbursements in instances where the Company does not control third-party services delivered to the client. Consistent with the transfer of control for distinct, daily services to the customer, revenue is typically recognized at the end of each period for the fees associated with the services performed. Financing Compensation for commercial mortgage and structured financing services is received via fees paid upon successful commercial financing from third-party lenders. The earned fees are contingent upon the funding of the loan, which represents the transfer of control for services to the customer. Therefore, the Company's performance obligation is satisfied at the point in time of the funding of the loan when there is a present right to payment. Leasing Compensation for providing strategic advice and execution for owners, investors, and occupiers is received in the form of a commission. The commission is paid upon signing of the lease by the tenant, therefore the Company's performance obligation is satisfied at the time of the contractual event, when there is a present right to payment. Construction & Development Fees for project and development services for owners and occupiers of real estate are typically variable and based on a percentage of the total project cost. Project and development services represent a series of performance obligations delivered over time; therefore, the Company recognizes revenue over time for these services accordingly. Incentive Fees Pursuant to the 2022 AMA, incentive compensation fees revenue ("Incentive Fees") may be earned on certain managed real estate assets if defined triggering events, which are differentiated based on the classification of the assets, are achieved. (See Note 13 for additional information). 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 F-10 Table of Contents 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. As a result, the Company only recognizes Incentive Fees at or near each asset's respective triggering event (as detailed in the 2022 AMA) when imputed profit can be reasonably calculated and the calculation has received consent from all parties, thereby confirming it can relied upon to not materially change. Cost of Revenue 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 Stock-based compensation expense for restricted stock units is measured based on the fair value of the Company’s common stock on the grant date. The Company utilizes the Black-Scholes option pricing model to estimate the grant-date fair value of stock option awards. The exercise price of stock option awards is set to equal the quoted closing market price of the underlying common stock at the date of the grant. The following weighted-average assumptions are also used to calculate the estimated fair value of stock option awards: • Expected volatility : The expected volatility of the Company’s shares is estimated using the historical stock price volatility over the most recent period commensurate with the estimated expected term of the awards. • Expected term : The Company determines the expected term by calculating the weighted-average period of time between the grant date and exercise or post-vesting cancellation date of all outstanding stock options. • Dividend yield : The Company has not paid dividends and does not anticipate paying a cash dividend in the foreseeable future and, accordingly, uses an expected dividend yield of zero . • Risk-free interest rate : The Company bases the risk-free interest rate on the implied yield available on a U.S. Treasury note with a term equal to the estimated expected term of the awards. The Company applies the graded vesting attribution method to recognize compensation expense for stock-based awards. Using this method, the estimated grant-date fair value of the award is recognized over the requisite service period for each separately vesting tranche as though each tranche of the award is, in substance, a separate award. This advanced recognition expense from future vesting tranches results in the accelerated recognition of the overall compensation cost related to the award. The Company has elected to account for forfeitures as they occur. For awards with a performance-based vesting condition, the Company accrues stock-based compensation expense if it is probable that the performance condition will be achieved. Advertising Costs Advertising costs are expensed as incurred and typically relate to promotional materials and media expenses incurred to increase general brand exposure. These costs amounted to $ 0.1 million and $ 0.1 million for the years ended December 31, 2025 and 2024, respectively. Interest Income Interest income from our automated overnight "sweep account" program investments is recognized on an accrual basis. Interest income is included in "interest income (expense), net" on our consolidated statements of operations. Income Taxes Income taxes are accounted for under the asset and liability method in accordance with ASC 740. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on the deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. We provide a valuation allowance when we consider it “more likely than not” (greater than 50% probability) that a deferred income tax asset will not be fully recovered. Adjustments to the valuation allowance are a component of the deferred income tax expense or benefit in the consolidated statements of operations. F-11 Table of Contents For interim periods, an income tax provision (benefit) is recognized based on the estimated annual effective tax rate expected for the entire fiscal year. The interim annual estimated effective tax rate is based on the statutory tax rates then in effect, as adjusted for estimated changes in permanent differences, and excludes certain discrete items whose tax effect, when material, is recognized in the interim period in which they occur. These changes in permanent differences and discrete items result in variances to the effective tax rate from period to period. Impacts from significant pre-tax, non-recognized subsequent events are excluded from the interim estimated annual effective rate until the period in which they occur. Net Income (Loss) per Share Basic net income (loss) per share is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for common share equivalents or any impacts from Preferred Stock activity. Common share equivalents consist of the incremental common shares issuable upon the exercise of stock options and vesting of restricted stock unit awards. Diluted net income (loss) per common share is calculated by dividing net income (loss) attributable to common stockholders by the fully diluted weighted-average number of common shares outstanding during the period. The diluted weighted-average common shares outstanding amount includes the impact of common share equivalents, which are the incremental shares of common stock that would be issuable upon the hypothetical exercise of stock options and vesting of restricted stock unit awards. The common stock equivalents are calculated using the treasury stock method and average market prices during the periods and are included in the diluted net income (loss) per share calculation unless their inclusion would be anti-dilutive. Recent Accounting Pronouncements - 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 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): Improving Reportable Segment Disclosures .” This guidance is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The standard requires disclosures to include significant segment expenses that are regularly provided to the chief operating decision maker ("CODM"), a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources. The standard also requires all annual disclosures currently required by ASC Topic 280 to be included in interim periods. 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 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). In December 2023, the FASB issued ASU 2023-09, “ Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ” This guidance is a final standard on improvements to income tax disclosures and requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. This standard is effective for fiscal years beginning after December 15, 2024, and early adoption was permitted. The Company adopted the standard effective January 1, 2025 and included the required tax disclosure updates in the notes to its consolidated financial statements. (See Note 11 for additional information). Recent Accounting Pronouncements - Not Yet Adopted 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. F-12 Table of Contents 3. Fixed Assets & Intangible Assets The following table provides a detailed breakout of fixed assets, by type (in thousands): December 31, 2025 2024 Computer equipment and capitalized software $ 205 $ 519 Furniture and fixtures 158 123 Office equipment 67 67 Vehicles 708 393 Total fixed assets 1,138 1,102 Accumulated depreciation ( 464 ) ( 528 ) Total fixed assets, net $ 674 $ 574 Depreciation expense for the years ended December 31, 2025 and 2024 was $ 0.3 million and $ 0.3 million, respectively. 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. 4. Investments in Real Estate Ventures The following table summarizes the Company's investments in real estate ventures (in thousands): December 31, Investment Ownership % 2025 2024 Accounting Method Investors X 50.0 % $ 113 $ 395 Fair Value The Hartford 2.5 % 459 591 Fair Value BLVD Forty Four 5.0 % 1,744 1,661 Fair Value BLVD Ansel 5.0 % 1,972 1,952 Fair Value Total investments recorded at fair value 4,288 4,599 Comstock 41 100.0 % 1,665 1,629 Consolidated Total investments in real estate ventures $ 5,953 $ 6,228 The Company’s maximum loss exposure on each of its investments in real estate ventures is equal to the carrying amount of the investment. Investments Recorded at Fair Value Additional details on the Company's unconsolidated investments in real estate ventures that are recorded at fair value are as follows: Investors X In April 2019, the Company entered into a master transfer agreement with CP Real Estate Services, LC (“CPRES”), an entity owned by Comstock’s Chief Executive Officer Christopher Clemente, 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. As of December 31, 2025, 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). The Hartford 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, Virginia. Built in 2003, the 211,000 square foot, LEED Gold-certified, mixed-use building is located in the premier Rosslyn-Ballston corridor. In F-13 Table of Contents February 2020, the Company arranged for DivcoWest to purchase a majority ownership stake in The Hartford Building and secured an $ 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, under which it recognized $ 0.9 million and $ 1.0 million of revenue for the years ended December 31, 2025 and 2024, respectively. Fair value of the property is determined on a quarterly basis using an income approach model. As of December 31, 2025, the Company’s ownership interest in The Hartford was 2.5 %. (See Note 13 for additional information). BLVD Forty Four 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. 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. As part of the transaction, the Company entered into asset management and property management agreements to provide asset, residential, retail, and parking services for the property in exchange for market-rate fees, under which it recognized $ 2.9 million and $ 1.3 million of revenue for the years ended December 31, 2025 and 2024, respectively. Fair value of the property is determined on a quarterly basis using an income approach model. As of December 31, 2025, the Company’s ownership interest in BLVD Forty Four was 5.0 %. (See Note 13 for additional information). BLVD Ansel In March 2022, the Company entered into a joint venture with CP to acquire BLVD Ansel, a newly completed 18-story, luxury high-rise apartment building with 250 units located adjacent to the Rockville Metro Station and BLVD Forty Four in Rockville, Maryland. BLVD Ansel features approximately 20,000 square feet of retail, 611 parking spaces, and expansive amenities including multiple private workspaces designed to meet the needs of remote-working residents. 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. As part of the transaction, the Company entered into asset management and property management agreements to provide asset, residential, retail, and parking services for the property in exchange for market-rate fees, under which it recognized $ 1.1 million and $ 1.2 million of revenue for the years ended December 31, 2025 and 2024, respectively. Fair value of the property is determined on a quarterly basis using an income approach model. As of December 31, 2025, the Company’s ownership interest in BLVD Ansel was 5.0 %. (See Note 13 for additional information). The following table below summarizes the activity of the Company’s unconsolidated investments in real estate ventures that are reported at fair value (in thousands): Balance as of December 31, 2023 $ 5,513 Investments 74 Distributions ( 668 ) Change in fair value ( 320 ) Balance as of December 31, 2024 $ 4,599 Investments 21 Distributions ( 289 ) Change in fair value ( 43 ) Balance as of December 31, 2025 $ 4,288 Comstock 41 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. This investment property sits adjacent to BLVD Ansel and BLVD Forty-Four and is currently a surface parking lot. Comstock 41 has existing entitlements for at least 117 dwelling units and approximately 11,000 square feet of retail space. (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 F-14 Table of Contents 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 given the opportunity to provide property management services upon delivery. In December 2025, the Company received legislative approval from the City of Rockville for the affordable housing development and the relocation of certain moderately-priced dwelling units (MPDUs) from BLVD Forty Four to Comstock 41. The rezoning approval triggered a $ 1.6 million entitlement success fee based on a contingent fee agreement with BLVD Forty Four that was recognized as revenue for the year ended December 31, 2025. (See Note 13 for additional information). Other Investments The Company has a joint venture with Superior Title Services, Inc. ("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 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 net income and distributions are recorded in gain (loss) on real estate ventures in the consolidated statements of operations and was immaterial for the years ended December 31, 2025 and 2024, respectively. In September 2025, the Company entered into a Purchase and Sale Agreement (the "Purchase Agreement") with a seller relating to the purchase of a 400 + unit multifamily building located in Rockville, Maryland, pursuant to which it paid a $ 1.0 million deposit that will be applied to the purchase price at closing. The deposit, as well as other costs directly related to this potential acquisition, are currently recorded on the Company's consolidated balance sheet in "prepaid expenses and other current assets." Closing of the acquisition is currently anticipated to occur in the first quarter of 2026. The Company has executed a letter of agreement with an institutional partner to form a joint venture upon closing on the acquisition that would result in the Company retaining a minority equity interest in the joint venture while providing asset management and property management services for the acquired asset. The letter of agreement stipulates that any non-refundable deposits and due diligence expenses will be shared by both parties. Investment Financial Information The following tables summarize the combined statements of operations information for our unconsolidated investments in real estate ventures (in thousands): Year Ended December 31, Combined Statements of Operations: 2025 2024 Revenue $ 29,793 $ 28,115 Operating income (loss) 18,596 16,237 Net income (loss) $ ( 4,761 ) ( 5,882 ) 5. Leases The Company has operating leases for office space leased in various buildings for its own use. The Company's leases have original terms ranging from 5 to 10 years. The Company's lease agreements do not contain any residual value guarantees or material restrictive covenants. Lease costs related to the Company's operating leases are primarily reflected in "cost of revenue" in the consolidated statements of operations, as they are a reimbursable cost under the Company's respective asset management agreements. (See Note 13 for additional information). The following table summarizes operating lease costs, by type (in thousands): Year Ended December 31, 2025 2024 Operating lease costs Fixed lease costs $ 1,186 $ 1,186 Variable lease costs 394 392 Total operating lease costs $ 1,580 $ 1,578 F-15 Table of Contents The following table presents supplemental cash flow information related to the Company's operating leases (in thousands): Year Ended December 31, 2025 2024 Cash paid for lease liabilities: Operating cash flows from operating leases $ 1,593 $ 1,559 As of December 31, 2025, the Company's operating leases had a weighted-average remaining lease term of 4.8 years and a weighted-average discount rate of 4.65 %. The following table summarizes future lease liability payments (in thousands): Year Ending December 31, Operating Leases 2026 $ 1,222 2027 1,204 2028 1,233 2029 1,262 2030 1,073 Thereafter — Total future lease payments 5,994 Imputed interest ( 644 ) Total lease liabilities $ 5,350 As of December 31, 2025, the Company does not have any liabilities related to leases that have not yet commenced. 6. Debt In March 2025, the Company entered into a five-year Revolving Capital Line of Credit Agreement with CP, 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 2030 (the “Credit Facility”). As of December 31, 2025, 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. 7. Commitments and Contingencies The Company maintains certain non-cancelable operating leases that contain various renewal options. (See Note 5 for additional information) The Company is subject to litigation from time to time in the ordinary course of business; 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 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. The Company expenses legal defense costs as they are incurred. 8. Fair Value Disclosures As of December 31, 2025, 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 December 31, 2025, 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. F-16 Table of Contents As of December 31, 2025, 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 4 for additional information). The Company may also value its non-financial assets and liabilities, including items such as long-lived assets, at fair value on a non-recurring basis if it is determined that impairment has occurred. Such fair value measurements typically use significant unobservable inputs (Level 3), unless a quoted market price (Level 1) or quoted prices for similar instruments, quoted prices for identical or similar instruments in inactive markets, or amounts derived from valuation models (Level 2) are available. 9. Stockholders' Equity Common Stock The Company's certificate of incorporation authorizes the issuance of Class A common stock and Class B common stock, each with a par value of $ 0.01 per share. Holders of Class A common stock and Class B common stock are entitled to dividends when, as and if, declared by the Company's board of directors, subject to the rights of the holders of all classes of stock outstanding having priority rights to dividends. 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 Class B common stock are convertible into an equivalent number of shares of our Class A common stock upon transfer. As of December 31, 2025, the Company had not declared any dividends. 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. As of December 31, 2025, there were 1.3 million shares of Class A common stock available for issuance under the 2019 Plan. During the years ended December 31, 2025 and 2024, the Company recorded stock-based compensation expense of $ 1.1 million and $ 0.9 million, respectively. Stock-based compensation costs are included in selling, general, and administrative expense on the Company's consolidated statements of operations. As of December 31, 2025, there was $ 0.8 million of total unrecognized stock-based compensation, which is expected to be recognized over a weighted-average period of 1.9 years. Restricted Stock Units Restricted stock unit (“RSU”) awards granted to employees are subject to continued employment and generally vest in four annual installments over the four years period following the grant dates. The Company also grants certain RSU awards to management that contain additional vesting conditions tied directly to a defined performance metric for the Company (“PSUs”). The actual number of PSUs that will vest can range from 60 % to 120 % of the original grant target amount, depending upon actual Company performance below or above the established performance metric targets. The Company estimates performance in relation to the defined targets when calculating the related stock-based compensation expense. The following table summarizes all restricted stock unit activity (in thousands, except per share data): RSUs Outstanding Weighted-Average Grant Date Fair Value Balance as of December 31, 2024 531 $ 4.12 Granted 144 7.91 Performance awards (1) 1 4.63 Released ( 206 ) 3.94 Canceled/Forfeited ( 29 ) 5.36 Balance as of December 31, 2025 441 $ 5.37 Vested and expected to vest after December 31, 2025 445 $ 5.37 (1) Represents additional restricted stock units that vested and were released as a result of the satisfaction of a performance vesting condition. F-17 Table of Contents The total intrinsic value of RSUs that vested during the years ended December 31, 2025 and 2024 was $ 1.7 million and $ 1.5 million, respectively. Stock Options Non-qualified stock options generally expire 10 years after the grant date and, except under certain conditions, the options are subject to continued employment and vest in four annual installments over the four-year period following the grant dates. The following table summarizes all stock option activity (in thousands, except per share data and time periods): Options Outstanding Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Balance as of December 31, 2024 90 $ 2.72 3.2 $ 479 Granted — — Exercised ( 40 ) 2.00 Canceled/Forfeited — — Expired — — Balance as of December 31, 2025 50 $ 3.30 2.5 $ 416 Exercisable as of December 31, 2025 50 $ 3.30 2.5 $ 416 The total intrinsic value of stock options exercised during the years ended December 31, 2025 and 2024 was $ 0.4 million and $ 0.1 million, respectively. 10. Revenue All the Company's revenue was for the years ended December 31, 2025 and 2024 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): Year Ended December 31, 2025 2024 Revenue by Line of Business: Asset management $ 36,620 $ 31,497 Property management (1) 11,879 11,612 Parking management 14,362 8,185 Total revenue $ 62,861 $ 51,294 (1) CHCI Commercial and CHCI Residential Year Ended December 31, 2025 2024 Revenue by Customer Type: Related party $ 56,333 $ 48,278 Commercial 6,528 3,016 Total revenue $ 62,861 $ 51,294 F-18 Table of Contents Year Ended December 31, 2025 2024 Revenue by Timing: Recurring/over time $ 52,050 $ 43,666 Point-in-time 10,811 7,628 Total revenue $ 62,861 $ 51,294 Year Ended December 31, 2025 2024 Revenue by Contract Fee Type: (1) Cost recovery (2) $ 38,439 $ 33,687 Variable (3) 16,932 14,001 Fixed fee (4) 7,490 3,606 Total revenue $ 62,861 $ 51,294 (1) Certain contracts contain multiple revenue streams that lend to classification in more than one category. (2) Includes cost plus revenues tied to asset management services under the 2022 AMA and reimbursable expenses. (3) Includes fixed rate contract amounts applied to various variable metrics to determine the amount of revenue earned. (4) 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 year ended December 31, 2025, the Company recognized no revenue from incentive fees. For the year ended December 31, 2024, $ 1.5 million of revenue from incentive fees was recognized. Incentive fee revenue recognized prior to fiscal year 2025 was related to services performed in prior periods for which revenue recognition criteria were previously constrained. 11. Income Tax The following table summarizes the components of the provision for (benefit from) income tax (in thousands): Year Ended December 31, 2025 2024 Current: Federal $ — $ — State — — Total current taxes — — Deferred: Federal 2,711 2,313 State 612 358 Total deferred taxes 3,323 2,671 Other: Valuation allowance ( 7,497 ) ( 6,506 ) Provision for (benefit from) income taxes $ ( 4,174 ) $ ( 3,835 ) F-19 Table of Contents The following table presents a reconciliation of the statutory federal income tax rate to the Company's effective income tax rate (in thousands): Year Ended December 31, 2025 2024 $ % $ % Statutory rate $ 2,704 21.00 % $ 2,252 21.00 % State income taxes—net of federal benefit (1) ( 770 ) ( 5.98 ) % ( 608 ) ( 5.67 ) % Change in valuation allowance ( 6,117 ) ( 47.50 ) % ( 5,404 ) ( 50.39 ) % Nontaxable or nondeductible items: Sec. 162(m) compensation disallowance 167 1.30 % 96 0.90 % Stock compensation ( 252 ) ( 1.96 ) % ( 131 ) ( 1.23 ) % Other 94 0.73 % ( 40 ) ( 0.38 ) % Effective tax rate $ ( 4,174 ) ( 32.41 ) % $ ( 3,835 ) ( 35.77 ) % (1) State taxes in Virginia made up the majority (greater than 50%) of the tax effect in this category. The Company's effective tax rates for the years ended December 31, 2025 and 2024 differ from the U.S. federal statutory tax rate of 21%, primarily due to state income taxes and the impact of valuation allowance releases related to projected increases in future period income forecasts. The following table summarizes changes in the Company's deferred tax valuation allowance balance (in thousands): Year Ended December 31, 2025 2024 Valuation allowance - Beginning balance $ ( 17,146 ) $ ( 23,666 ) Valuation allowance release 7,497 6,506 Adjustment from impact of blended tax rate — 14 Valuation allowance - Ending balance $ ( 9,649 ) $ ( 17,146 ) Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company has recorded valuation allowances for certain tax attributes and deferred tax assets due to the existence of sufficient uncertainty regarding the future realization of those deferred tax assets through future taxable income. Based on its recent financial performance and current forecasts of future operating results, the Company conducts a quarterly analysis to determine if it is more likely than not that a portion of the deferred tax assets related to its net operating loss carryforwards will be utilized in future periods. The Company's effective tax rate in any given period is directly impacted by the timing and magnitude of any partial valuation allowance releases. F-20 Table of Contents The following table summarizes the components of the Company's deferred tax assets and liabilities (in thousands): December 31, 2025 2024 Deferred tax assets: Net operating loss and tax credit carryforwards $ 24,839 $ 28,589 Stock-based compensation 684 538 Investments in affiliates 990 1,420 Right of use lease liability 1,377 1,615 Bonus accrual 1,987 1,277 Other 2 — Valuation allowance ( 9,649 ) ( 17,146 ) Total deferred tax assets $ 20,230 $ 16,293 Deferred tax liabilities: Right of use lease asset $ ( 1,288 ) $ ( 1,523 ) Depreciation and amortization ( 48 ) ( 50 ) Total deferred tax liabilities $ ( 1,336 ) $ ( 1,573 ) Net deferred income tax assets (liabilities) $ 18,894 $ 14,720 As of December 31, 2025, the Company had $ 96.5 million of net operating loss (“NOL") carryforwards. These NOLs, if unused, will begin expiring in 2028. Under Code Section 382 (“Section 382”) rules, if a change of ownership is triggered, the Company’s NOL assets and possibly certain other deferred tax assets may be impaired. Given Section 382’s broad definition, an ownership change could be the unintended consequence of otherwise normal market trading in the Company’s stock that is outside of the Company’s control. In an effort to preserve the availability of these NOLs, the Company has adopted a Section 382 rights agreement that is scheduled to expire on March 28, 2035. The Section 382 rights agreement helps to reduce the likelihood of an unintended “ownership change”, thus preserving the value of these future tax benefits. We estimate that as of December 31, 2025, the three-year cumulative shift in ownership of the Company’s stock had not triggered a limitation in the use of our NOL asset. As of December 31, 2025, there were no uncertain tax positions that, if recognized, would affect the Company's effective tax rate. We file U.S. and state income tax returns in jurisdictions with varying statutes of limitations. All of our income tax returns remain subject to examination by federal and state tax authorities due to the availability of our NOL carryforwards. In July 2025, the U.S. government enacted budget reconciliation legislation known as the One Big Beautiful Bill Act of 2025, which included a broad range of tax reform provisions affecting businesses, including extending and modifying certain key Tax Cuts & Jobs Act provisions (both domestic and international), expanding certain Inflation Reduction Act incentives while accelerating the phase-out of others. The provisions of the legislation have multiple effective dates, with certain provisions effective starting in 2025 and others being implemented up through 2027. The impact to the Company’s income tax expense and effective tax rate for the year ended December 31, 2025 associated with this legislation is immaterial. F-21 Table of Contents 12. Net Income (Loss) Per Share The following table summarizes the calculation of basic and diluted net income per share (in thousands, except per share data): Year Ended December 31, 2025 2024 Numerator: Net income (loss) - Basic and Diluted $ 17,051 $ 14,560 Denominator: Weighted-average common shares outstanding - Basic 10,067 9,846 Effect of common share equivalents 403 481 Weighted-average common shares outstanding - Diluted 10,470 10,327 Net income (loss) per share: Basic $ 1.69 $ 1.48 Diluted $ 1.63 $ 1.41 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, 2025 2024 Restricted stock units — 2 Stock options — 1 13. Related Party Transactions Asset Management Agreements 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. Entry into the 2022 AMA was unanimously approved by the independent directors of the Company. 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. Clemente. 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 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 2022 AMA as the sum of the fees detailed in the following table: F-22 Table of Contents Description 2022 AMA Fees Asset Management Fee 2.5 % of Anchor Portfolio revenue Entitlement Fee 15 % of total re-zoning costs Development and Construction Fee 5 % of development costs (excluding previously charged Entitlement Fees) Property Management Fee 1 % of Anchor Portfolio revenue Acquisition Fee 1 % on first $ 50 million of purchase price; 0.5 % above $ 50 million Disposition Fee 1 % on first $ 50 million of sale price; 0.5 % above $ 50 million 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 Incentive Fee When receiving Market Rate Fee : On a mark-to-market basis, equal to 20 % 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 “Market Incentive Fee”) When receiving the Cost-Plus Fee : 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”) Investment Origination Fee 1 % of raised capital Leasing Fee $ 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 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; and • 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. Twenty-four months after the effective date of the 2022 AMA, CP is entitled to terminate the 2022 AMA without cause upon 180 days advance written notice to CAM. In the event of such a termination and in addition to the payment of any accrued annual fees due and payable as of the termination date under the 2022 AMA, CP is required to pay a termination fee equal to two times the Cost-Plus Fee or Market Rate Fee paid to CAM for the calendar year immediately preceding the termination. Residential, Commercial, and Parking Property Management Agreements The Company entered into separate residential property management agreements with properties owned by CP Entities under which the Company receives fees to manage and operate the properties, including tenant communications, leasing of apartment F-23 Table of Contents units, rent collections, building maintenance and day-to-day operations, engagement and supervision of contractors and vendors providing services for the buildings, and budget preparation and oversight. The Company entered into separate commercial property and parking management agreements with several properties owned by CP Entities under which the Company receives fees to manage and operate the office and retail portions of the properties, including tenant communications, rent collections, building maintenance and day-to-day operations, engagement and supervision of contractors and vendors providing services for the buildings, and budget preparation and oversight. 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. 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 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 The Company has lease procurement agreements with properties owned by CP Entities under which the Company receives certain finders' fees in connection with the procurement of new leases for such properties where an external broker is not engaged on behalf of the CP Entities. Such leasing fees are supplemental to the fees generated from the Company's management agreements referenced above and are generally 1 - 2 % of the future lease payments to be received by the CP Entity from the executed lease. Business Management Agreements In January 2023, CAM entered into a Business Management Agreement (the “BC Management Agreement”) with 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 to reimburse CAM for certain expenses. The BC Management Agreement was terminated effective December 31, 2024. In February 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 extended through December 31, 2024 with automatic one-year renewals. The SH Management Agreement provides that Springfield will reimburse CAM for certain pre-development expenses at cost. Investors X 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). The Hartford 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. Pursuant to the Operating Agreement, the Company held a minority membership interest of The Hartford and the remaining membership interests of The Hartford are held by CP. In February 2020, the Company, CP and DWF VI 3101 Wilson Member, LLC (“DWF”), an unaffiliated, third party, equity investor in The Hartford, entered into a limited liability company agreement (the “DWC Operating Agreement”) to form DWC 3101 Wilson Venture, LLC (“DWC”) to, among other things, acquire, own and hold all interests in The Hartford. In furtherance F-24 Table of Contents thereof, on February 7, 2020, the original operating agreement was amended and restated (the “A&R Operating Agreement”) to memorialize the Company’s and CP’s assignment of 100 % of its membership interests in The Hartford to DWC. As a result, DWC is the sole member of The Hartford Owner. The Company and CP, respectively, hold minority membership interests in, and DWF holds the majority membership interest in, DWC. ( See Note 4 for additional information). 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 Rockville, 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 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. In conjunction with the acquisition of Comstock 41, in 2023 the Company entered into an amendment to the existing asset management agreement with CP to introduce an acquisition pursuit fee of $ 0.1 million and contingent entitlement success fee to pursue potential relocation of moderately-priced dwelling units ("MPDUs") from BLVD Forty Four to Comstock 41. The acquisition pursuit fee was earned and recognized upon the completion of the Comstock 41 acquisition. The entitlement success fee is set to equal 25 % of the economic value created by the relocation of the MPDUs, as agreed upon by both parties, and due upon approval by local government agencies. In December 2025, the Company received legislative approval from the City of Rockville and recognized a $ 1.6 million entitlement success fee based on the agreement with BLVD Forty Four. (See Note 4 for additional information). Corporate Leases 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. 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). 14. Employee Benefit Plans The Company maintains defined contribution plans covering all full-time employees of the Company who have 90 days of service and are at least 21 years old. An eligible employee may elect to make a before-tax contribution of between 1 % and 90 % of his or her compensation through payroll deductions, not to exceed the annual limit set by law. The Company currently matches the first 3 % of participant contributions limited to 3 % of a participant’s gross compensation (maximum Company match is 4 %). The combined total expense for this plan was $ 1.0 million and $ 0.7 million for the years ended December 31, 2025 and 2024, respectively. 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. The NQDC Plan also provides for matching Company contributions that vest over a three-year period. In the NQDC Plan, a participant's deferrals, together with Company matching credits, are “invested” at the direction of the employee in a hypothetical portfolio of investments which are tracked by an administrator. The Company, through a broker partner affiliated with the NQDC Plan administrator, directly funds investments that are meant to correlate with participant-directed hypothetical investments in stock and bond mutual funds in an effort to directly provide for its future NQDC Plan liabilities. 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 consolidated statements of income. As of December 31, 2025, total NQDC plan assets and F-25 Table of Contents liabilities were $ 0.9 million and $ 1.0 million, respectively. During the year ended December 31, 2025, there were $ 0.1 million in distributions from the Company's NQDC Plan. 15. 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, 2025 2024 Asset management and corporate operating expenses $ 26,814 $ 23,807 Commercial operating expenses 4,352 4,042 Residential operating expenses 5,243 4,835 ParkX operating expenses 13,156 7,076 Stock compensation 1,060 945 Depreciation and amortization 306 302 Total operating costs and expenses $ 50,931 $ 41,007 16. Subsequent Events On March 13, 2026, the Company announced that it had entered into a letter of intent to establish a joint venture with Jericho Energy Ventures, Inc. ("Jericho"), a Canadian-based diversified energy company, to pursue the development of large-scale data center campuses in Oklahoma. The joint venture will focus on assembling a strategic portfolio of land that integrates approximately 18,000 acres of Jericho's subsurface land and energy assets with surface land interests, capitalizing on Jericho's direct access to an abundance of natural gas resources that can be utilized to deliver low-cost, high-performance power solutions and potential carbon sequestration with the capability to support the development of large-scale AI data center campuses. Pursuant to terms of the letter of intent, and to further align the party's joint interests, the Company made a $ 1.5 million initial investment in Jericho through a non-brokered private placement. In return, the Company received 25,684,932 variable voting shares of Jericho, as well as warrants to purchase up to 12,842,466 additional variable voting shares at an exercise price of $ 0.20 CAD that are exercisable for a period of 24 months from the date of issuance. F-26 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures None.