Comstock Holding Companies, Inc 10-Q for FY2022 Q2

Comstock Holding Companies, Inc. (CHCI)

10-Q 2022-08-15 For: 2022-06-30

Added on April 09, 2026

About this 10-Q

Comstock Holding Companies, Inc filed this 10-Q on August 15, 2022, covering the quarter ended June 30, 2022 (FY2022 Q2).

Headline figures

Quarter ended June 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $8.47M; up 33.9% from $6.32M a year earlier
Net income: $704K; down 93.7% from net income of $11.21M a year earlier
Diluted EPS: $0.30; down 75.8% from $1.24 a year earlier

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Delaware			20-1164345
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)


PART I – FINANCIAL INFORMATION		1

Item 1.	Condensed Consolidated Financial Statements (unaudited)	1

	Consolidated Balance Sheets .............................................................................................................................	1

	Consolidated Statements of Operations..............................................................................................................	2

	Consolidated Statements of Changes in Stockholders’ Equity...........................................................................	3

	Consolidated Statements of Cash Flows.............................................................................................................	4

	Notes to Condensed Consolidated Financial Statements....................................................................................	5

Item 2.	Management's Discussion and Analysis of Financial Condition.............................................................................	17

Item 3.	Quantitative and Qualitative Disclosures About Market Risk ...............................................................................	23

Item 4.	Controls and Procedures .........................................................................................................................................	23

PART II – OTHER INFORMATION		24

Item 1.	Legal Proceedings....................................................................................................................................................	24

Item 6.	Exhibits....................................................................................................................................................................	25

SIGNATURES..........................................................................................................................................................................		27


	June 30,		December 31,
	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	8,427	$	15,823
Accounts receivable	826		46
Accounts receivable - related parties	2,933		1,697
Prepaid expenses and other current assets	490		197
Current assets held for sale	—		2,313
Total current assets	12,676		20,076
Fixed assets, net	379		264
Intangible assets	144		—
Leasehold improvements, net	133		—
Investments in real estate ventures	7,455		4,702
Operating lease assets	6,985		7,245
Deferred income taxes, net	11,427		11,300
Other assets	26		15


Total assets	$	39,225	$	43,602

Liabilities and Stockholders' Equity
Current liabilities:
Accrued personnel costs	$	2,206	$	3,468
Accounts payable and accrued liabilities	649		783
Current operating lease liabilities	679		616
Current credit facility - due to affiliates	5,500		—
Current liabilities held for sale	—		1,194
Total current liabilities	9,034		6,061
Credit facility - due to affiliates	—		5,500
Operating lease liabilities	6,570		6,745
Total liabilities	15,604		18,306
Commitments and contingencies (Note 8)
Stockholders' equity:
Series C preferred stock; $0.01 par value; 20,000 shares authorized; none issued and outstanding as of June 30, 2022; 3,441 issued and outstanding as of December 31, 2021	—		6,765
Class A common stock; $0.01 par value; 59,780 shares authorized; 9,298 issued and 9,213 outstanding as of June 30, 2022; 8,102 issued and 8,017 outstanding as of December 31, 2021	93		81
Class B common stock; $0.01 par value; 220 shares authorized, issued, and outstanding as of June 30, 2022 and December 31, 2021	2		2
Additional paid-in capital	201,198		200,617
Treasury stock, at cost (86 shares of Class A common stock)	(2,662)		(2,662)
Accumulated deficit	(175,010)		(179,507)
Total stockholders' equity	23,621		25,296
Total liabilities and stockholders' equity	$	39,225	$	43,602


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenue	$	8,467	$	6,324	$	17,198	$	13,164
Operating costs and expenses:
Cost of revenue	6,831		5,502		13,766		11,580
Selling, general, and administrative	469		308		856		607
Depreciation and amortization	50		22		94		42
Total operating costs and expenses	7,350		5,832		14,716		12,229
Income (loss) from operations	1,117		492		2,482		935
Other income (expense):
Interest expense	(69)		(58)		(128)		(116)
Gain (loss) on real estate ventures	17		(100)		269		(94)
Other income (expense), net	1		(1)		1		—
Income (loss) from continuing operations before income tax	1,066		333		2,624		725
Provision for (benefit from) income tax	352		(11,316)		(104)		(11,314)
Net income (loss) from continuing operations	714		11,649		2,728		12,039
Net income (loss) from discontinued operations, net of tax	(10)		(444)		(277)		(587)
Net income (loss)	$	704	$	11,205	$	2,451	$	11,452
Impact of Series C preferred stock redemption	2,046		—		2,046		—
Net income (loss) attributable to common shareholders	$	2,750	$	11,205	$	4,497	$	11,452

Weighted-average common stock outstanding:
Basic	8,599		8,215		8,470		8,191
Diluted	9,157		9,061		9,033		9,014

Net income (loss) per share:
Basic - Continuing operations	$	0.32	$	1.42	$	0.56	$	1.47
Basic - Discontinued operations	—		(0.05)		(0.03)		(0.07)
Basic net income (loss) per share	$	0.32	$	1.37	$	0.53	$	1.40

Diluted - Continuing operations	$	0.30	$	1.29	$	0.53	$	1.34
Diluted - Discontinued operations	—		(0.05)		(0.03)		(0.07)
Diluted net income (loss) per share	$	0.30	$	1.24	$	0.50	$	1.27


	Series C			Class A			Class B
	Preferred Stock			Common Stock			Common Stock					Treasury		Accumulated
	Shares	Amount		Shares	Amount		Shares	Amount		APIC		stock		deficit		Total
Three and Six Months Ended June 30, 2022
Balance as of December 31, 2021	3,441	$	6,765	8,102	$	81	220	$	2	$	200,617	$	(2,662)	$	(179,507)	$	25,296
Issuance of common stock, net of shares withheld for taxes	—	—		130	1		—	—		(298)		—		—		(297)
Stock-based compensation	—	—		—	—		—	—		142		—		—		142
Net income (loss)	—	—		—	—		—	—		—		—		1,747		1,747
Balance as of March 31, 2022	3,441	$	6,765	8,232	$	82	220	$	2	$	200,461	$	(2,662)	$	(177,760)	$	26,888
Issuance of common stock, net of shares withheld for taxes	—	—		66	1		—	—		(191)		—		—		(190)
Redemption of Series C preferred stock	(3,441)	(6,765)		1,000	10		—	—		708		—		2,046		(4,001)
Stock-based compensation	—	—		—	—		—	—		220		—		—		220
Net income (loss)	—	—		—	—		—	—		—		—		704		704
Balance as of June 30, 2022	—	$	—	9,298	$	93	220	$	2	$	201,198	$	(2,662)	$	(175,010)	$	23,621

Three and Six Months Ended June 30, 2021
Balance as of December 31, 2020	3,441	$	6,765	7,953	$	79	220	$	2	$	200,147	$	(2,662)	$	(193,116)	$	11,215
Issuance of common stock, net of shares withheld for taxes	—	—		105	2		—	—		(189)		—		—		(187)
Stock-based compensation	—	—		—	—		—	—		183		—		—		183
Net income (loss)	—	—		—	—		—	—		—		—		247		247
Balance as of March 31, 2021	3,441	$	6,765	8,058	$	81	220	$	2	$	200,141	$	(2,662)	$	(192,869)	$	11,458
Issuance of common stock, net of shares withheld for taxes	—	—		36	—		—	—		(59)		—		—		(59)
Stock-based compensation	—	—		—	—		—	—		180		—		—		180
Net income (loss)	—	—		—	—		—	—		—		—		11,205		11,205
Balance as of June 30, 2021	3,441	$	6,765	8,094	$	81	220	$	2	$	200,262	$	(2,662)	$	(181,664)	$	22,784


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934




Carrying amounts of major classes of assets held for sale:
Accounts receivable	$	2,075

Prepaid expenses and other current assets	129
Total current assets	2,204
Fixed assets, net	106

Intangible assets, net	3
Total assets	$	2,313

Carrying amounts of major classes of liabilities held for sale:
Accrued personnel costs	$	153
Accounts payable and accrued liabilities	1,015
Loans payable	26
Total liabilities	$	1,194


	June 30,		December 31,
Description	2022		2021
Investors X	$	1,387	$	1,484
The Hartford	1,201		1,211
BLVD Forty Four	2,259		2,007
BLVD Ansel	2,608		—
Total	$	7,455	$	4,702


Balance as of December 31, 2021	$	4,702
Investments	2,684
Distributions	(88)
Change in fair value	157
Balance as of June 30, 2022	$	7,455


Year Ending December 31,	Operating Leases
2022	$	483
2023	985
2024	1,008
2025	1,031
2026	1,054
Thereafter	4,091
Total future lease payments	8,652
Imputed interest	(1,403)
Total lease liabilities	$	7,249


	RSUs Outstanding	Weighted-Average Grant Date Fair Value
Balance as of December 31, 2021	847	$	2.28
Granted	219	4.63


Released	(223)	2.64
Canceled/Forfeited	(133)	2.38
Balance as of June 30, 2022	710	$	2.97


	Options Outstanding	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Balance as of December 31, 2021	397	$	2.89	5.7	$	998
Granted	—	—
Exercised	(119)	1.87
Canceled/Forfeited	(3)	2.24
Expired	(60)	3.97
Balance as of June 30, 2022	215	$	3.19	5.0	$	429
Exercisable as of June 30, 2022	209	$	3.23	4.0	$	413


Description	2022 AMA	2019 AMA
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


Anchor Portfolio
Reston Station			Mixed-use development on Metro's Silver Line (Phase I); strategically located between Tyson's Corner, Va. and Dulles International Airport
Loudoun Station			Mixed-use development on Metro's Silver Line (Phase II); first Metro-connected development in Loudoun County, Va.
Herndon Station			Mixed-use development in the historic downtown portion of Herndon, Va.; focus of public-private partnership with Town of Herndon

Investments/Assets Under Management
The Hartford Building			Joint venture; 211,000 square foot mixed-use building on Metro's Orange Line in Arlington, Va.
BLVD Forty Four			Joint venture; 15-story, luxury high-rise apartment building near Rockville Metro Station in Montgomery County, Md.; adjacent to BLVD Ansel
BLVD Ansel			Joint venture; 18-story, luxury high-rise apartment building near Rockville Metro Station in Montgomery County, Md.; adjacent to BLVD Forty Four
International Gateway			Various real-estate services provided for two privately-owned mixed-use buildings located in Tyson's Corner, Va.
Investors X			Investment in company that owns residual homebuilding operations


	Description	2022 AMA	2019 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 Event1 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 Event1 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. for new leases and $0.50/per sqft. 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

1	Triggering events determined annually as defined in the agreement, but generally as each managed asset is leased and stabilized.


	Three Months Ended June 30,
	2022				2021				Change
	Amount		%		Amount		%		$		%
Asset management	$	5,538	65.4	%	$	4,257	67.3	%	$	1,281	30.1	%
Property management	2,192		25.9	%	1,712		27.1	%	480		28.0	%
Parking management	737		8.7	%	355		5.6	%	382		107.6	%
Total revenue	$	8,467	100.0	%	$	6,324	100.0	%	$	2,143	33.9	%


	Six Months Ended June 30,
	2022				2021				Change
	Amount		%		Amount		%		$		%
Asset management	$	11,535	67.1	%	$	9,150	69.5	%	$	2,385	26.1	%
Property management	4,323		25.1	%	3,342		25.4	%	981		29.4	%
Parking management	1,340		7.8	%	672		5.1	%	668		99.4	%
Total revenue	$	17,198	100.0	%	$	13,164	100.0	%	$	4,034	30.6	%


	COMSTOCK HOLDING COMPANIES, INC.

Date: August 15, 2022	By:	/s/ CHRISTOPHER CLEMENTE
		Christopher Clemente Chairman and Chief Executive Officer

Date: August 15, 2022	By:	/s/ CHRISTOPHER GUTHRIE
		Christopher Guthrie Chief Financial Officer


(i)			the Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021;
(ii)			the Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021;
(iii)			the Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2022 and 2021;
(iv)			the Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021; and
(v)			the Notes to Condensed Consolidated Financial Statements.