CHCI 10-K & 10-Q changes, risk factors and insider trading

The following discussion and analysis should be read in conjunction with our consolidated financial statementsstatements, andthe related notes thereto, and other financial information appearing elsewhere in this Annual Report on Form 10-K. AllUnless otherwise indicated, references to “20242025” and “20232024” are referring to the twelve-month period ended December 31 for each of those respective fiscal years. This section of this Annual Report on Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023. The following discussion may contain forward-looking statements that reflect our plans and expectations. Our actual results could differ materially from those anticipated by these forward-looking statements due to the factors discussed elsewhere in this Annual Report on Form 10-K.statements. We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.

We are a leading asset manager, developer, and operator of mixed-use and transit-oriented properties in the Washington, D.C. region. We have become one of the area’s premier real estate serviceservices companycompanies by creating extraordinary places, delivering exceptional experiences, and generating excellent results for all stakeholders.

Our Anchor Portfolio (see below for details) includes, or will soon include, millions of square feet of Trophy and Class A office towers, luxury multi-family residential buildings, luxury hotels with branded condominium residences, high-end retail and entertainment options, associated public spaces, and commercial parking garages to serve all the properties. In 2024,2025, Anchor portfolio assets generated a well over $100.0$120.0 million of gross revenue for the property owners.

The following table summarizes the operating assetsassets, categorized by asset type, that arewere included in our managed portfolio as of December 31, 20242025:

•21 commercial assetsasset that representrepresents approximately 266,0006,000 square feet; and

•1 residential asset with 420419 units representing approximately 430,000 square feet;feet.

Our development pipeline currently includes 5 commercial assets that represent approximately 1.5 million square feet, 5 residential assets with 2,326more than 2,300 units that represent approximately 2.5 million square feet, and 1 dual-use hotel with 240 keys that willrepresents includeapproximately 140220,000 keys.square feet. At full build out, our managed portfolio of assets is currently projected to total 88105 assets representing nearlyapproximately 10 million square feet.

The following tables provide further details on the operating assets included in our managed portfolio:

In November 2024, we entered into a definitive purchase agreement for Comstock 41 with SCG Development Holdings, LLC ("SCG") that is contingent upon the successful rezoning of the property to allow for the development of an affordable housing project at the site. Upon closing, we will enter into an operating agreement and a development agreement with SCG, under which we will provide construction management services for the affordable housing project that will be fully financed by SCG. We will also be entitledgiven the opportunity to provide property management services onceupon the development is ready for occupancy.delivery.

Operating costs and expenses increased 15.3%24.2% in 2024.2025. The $5.5$9.9 million comparative increasevariance was primarily due to aan $3.6$8.4 million increase in personnel expenses from increased headcount and employee compensationcompensation, andwhich includes a net $1.9$4.8 million increase in reimbursable/billableonboarding expenses.and payroll expenses from the 265 new ParkX employees that were hired in 2025 to meet the staffing needs for our expanding customer base.

Other income (expense) changed by $1.5$0.5 million in 2024, primarily driven by2025, primarily driven by a combined $0.9$0.3 million improvement in mark-to-market valuation impacts of equity method investments in real estate ventures and a $0.6$0.1 million increase in interest income stemming from interest earned on money market sweep accounts that were not active for all of 2023.accounts.

We recorded a $3.8$4.2 million income tax benefit in 2024,2025, compared to a provision$3.8 for incomemillion tax of $0.4 millionbenefit in 2023.2024. The $4.2$0.4 million net change was primarily driven by a $6.5 million valuation allowance release that was $1.0 million higher in the current period, partially offset by the impact of higher taxable income from operations. As of December 31, 2024,2025, we had $111.1$96.5 million of net operating loss (“NOL") carryforwards.

The increasesincrease in Adjusted EBITDA for the year ended December 31, 20242025 werewas primarily driven by significant increases in recurring fee-based revenue from our three operating property and parking management revenuesubsidiaries and supplemental asset management fee revenue.revenue from leasing activity.

Significant factors which could affect future liquidity include the adequacy of available lines of credit, cash flows generated from operating activities, working capital managementmanagement, and investments.

The $1.7$5.9 million variance in net operating cash activity was primarilydriven drivenby an $7.8 million incremental cash outflow stemming from changes to our net working capital, partially offset by a $1.7$1.9 million increase in net income from continuing operations after adjustments for non-cash items. The comparative net changes to our net working capital balancesdecrease werewas immaterial.primarily influenced by a decrease in related party accounts receivable collections.

The $1.2$1.4 million variance in net investing cash activity was primarily driven by a $1.4$1.2 million decreaseof capitalized costs in investments2025 inrelated real estate ventures, partially offset byto a $0.4potential millionmultifamily increaseproperty in purchases of securities to fund non-qualified deferred compensation plan liabilities.acquisition.

The immaterial$0.2 million variance in net financing cash activity was primarily driven by $0.2 million of proceeds in conjunction with the issuance of common stock related to equity awards, which was almost entirely offset by a $0.2$0.1 million decrease in equity award-related proceeds collected and an immaterial increase in cash paid for taxes related to the net share settlement of equity awards.

Incentive Fees are calculated as a percentage of the imputed profit that would be realized upon the hypothetical sale or recapitalization of the asset (or assets) for which triggering event criteria were met. The calculation of imputed profit is based on a fair market value assessment that includes highly variable financial inputs and must also consider macro-economic and environmental factors that may affect fair market value. Due to the subjective and potentially volatile nature of this variable consideration, we only recognize revenue 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, we only recognize Incentive Fees at or near each asset's respective triggering event (as detailed in the 2022 AMA) when imputed profit couldcan be reasonably calculated and the calculation has received consent from all parties, thereby confirming it can relied upon to not materially change.

The following discussion and analysis should be read in conjunction with our consolidated financial statements, the related notes thereto, and Management’s Discussion and Analysis included in our 2025 Annual Report on Form 10-K, as well as our condensed consolidated financial statements and the related notes thereto included elsewhere in this document. Unless otherwise indicated, references to “2026” refer to the three and six months ended MarchJune 31,30, 2026 and references to “2025” refer to the three and six months ended MarchJune 31,30, 2025. The following discussion may contain forward-looking statements that reflect our plans and expectations. Our actual results could differ materially from those anticipated by these forward-looking statements. We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.

We are a leading assetreal manager,estate developer,company specializing in the development, acquisition, operation, and operatormanagement of mixed-use andmixed-use, transit-oriented properties inand thedata Washington,center D.C. region.developments. We have become one of the area’sa premier real estate services company by creating extraordinary places, delivering exceptional experiences, and generating excellent results for all stakeholders.

We provide a comprehensive suite of real estate services to our asset-owning clients, including asset management, property management, development and construction management, and more. Our client base is composedconsists primarily of institutional real estate investors, high net worth family offices, financial institutions, and governmental bodies seeking to develop real estate they own through public-private partnerships. We employ a talented staff of real estate professionals thatwho are led by our seasoned management team and are tasked with delivering high-quality services to the premium, strategically located assets in our managed portfolio.

We have directly aligned the equity ownership of our Company with the ownership interests of the affiliated assets that we manage in our Anchor Portfolio. This relationship, along with the baseline cost-plus feature and supplemental performance-based revenue opportunities provided by the 2022 AMA, provides us with a stable business platform on which we can (i) produce consistent, positive financial results, (ii) mature and expand our real estate service offerings, (iii) diversify and grow our managed portfolio of assets, both organically and through additional third-party relationships, (iv) pursue strategic investments and complimentarycomplementary acquisitions, and (v) deliver exceptional value to our shareholders.

Our Anchor Portfolio (see below for details) includes, or will soon include,includes millions of square feet of Trophy and Class A office towers, luxury multi-family residential buildings, luxury hotels with branded condominium residences, high-end retail and entertainment options, amenity-rich public spaces, and commercial parking garages to serve all the properties. Over the twelve months of fiscal year 2025, Anchor Portfolio assets generated over $120.0 million of gross revenue for the property owners.

The following table summarizes the operating assets, categorized by asset type, that were included in our managed portfolio as of MarchJune 31,30, 2026:

Our development pipeline currently includes 56 commercial assets that represent approximately 1.51.6 million square feet, 54 residential assets with more than 2,3001,200 units that represent approximately 2.51.3 million square feet, and 1 dual-use hotel with 240 keys that represents approximately 220,000 square feet. At full build out, our managed portfolio of assets is currently projected to total 113119 assets that represent overapproximately 1010.5 million square feet.

Our management team is committed to executingbuilding ouron goalthe toreputation provideComstock has earned as a leading commercial real estate developer and asset manager by creating extraordinary places, providing exceptional experiencesexperiences, toand thosegenerating weexcellent doreturns businessfor withall while maximizing shareholder value.stakeholders. We believe that we are properly staffed for current and foreseeable market conditions and will maintain the ability to manage risk and pursue additional growth as opportunities arise. Our realasset estate developmentmanagement and assetproperty management operations are primarily focused on the greater Washington, D.C. area, where we believe our decades of experience provides us with the best opportunity to continue developing, managing, and investing in high-quality real estate assets and capitalizing on positive growth trends.

OurThe growthfoundation willof continueour toasset-light, bedebt-free fueledbusiness bymodel is our Anchor Portfolio, which we believe will continue to generate revenue and fuel additional growth as developmentfuture phases of our large-scale, mixed-use, transit oriented developments are completed and constructionbecome effortsstabilized. are completed. Importantly, theThe long-term asset management agreement covering the properties included in the Anchor Portfolio provides us with visibility tointo future revenue and earnings growth while mitigating the riskrisks fortypically potentialassociated losses.with Ourreal fee-based,estate asset-light, debt-free business model will continue to generate cashdevelopment and provide us with the flexibility and resources needed to capitalize on additional strategic growth opportunities as they arise.operation.

Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025

Revenue increased 38.0%74.1% in 2026. The $4.8$9.6 million comparative increase was driven by a $4.7 million increase in supplemental fee revenue, primarily stemming from significant leasing activity and a $0.8 million acquisition fee earned in the current period. Also contributing to the increase was the continued expansion of our managed portfolio, resulting in a $2.6 million, or 89.6%,78.1%, increase in recurring, fee-based property management services revenue from our Commercial, Residential, and ParkX operating subsidiaries and a $1.6$0.9 million increase in asset management services revenue. ParkX alone executed 13 new service contracts in 2026, five of which were with third-party customers.

Operating costs and expenses increased 45.9%42.4% in 2026. The $5.0$4.7 million comparative increase was primarily due to a $3.5$3.4 million net increase in personnel expenses from increased headcount and employee compensation, including a $0.9$0.6 million increase in annual bonus and commissions expense. Also contributing were a $0.4 million increase in reimbursable costs, a $0.2 million increase in stock-based compensation expense, and a $0.2 million of additional legal costs.

Other income (expense) changed by $0.5$4.2 million in 2026, primarily driven by a $0.4 millionthe unrealized gain on equity investments stemming from the mark-to-market valuation of the initial $1.5 million investment inour Jericho Energy Ventures, Inc. equity securities (see Note 4 in the Notes to Consolidated Financial Statements for additional information).

Provision for income tax was $0.2$2.3 million in 2026, compared to $0.3$0.6 million in 2025. The $0.1$1.7 million decreaseincrease is primarily the result of higher stocktaxable compensationincome windfalland adjustments.the tax impact from significant unrealized gains on equity investments.

The increaseincreases in Adjusted EBITDA for the three and six months ended MarchJune 31,30, 2026 iswere primarily driven by the continued expansion of our managed portfolio that brought significant increases in recurring fee-based revenue from our three operating property management subsidiaries and higher asset management fee revenue. Also contributing were significant increases in supplemental leasing fee revenue fromand theacquisition continuedfee expansion of our managed portfolio.revenue.

Our principal sources of liquidity as of MarchJune 31,30, 2026 were our cash and cash equivalents of $19.6$25.3 million and our $10.0 million of available borrowings on our Credit Facility. (See Note 6 in the Notes to Consolidated Financial Statements for additional information).

Significant factors whichthat could affect future liquidity include the adequacy of available lines of credit, cash flows generated from operating activities, working capital management, the adequacy of available lines of credit, and required capital commitments related to investments. (See Note 7 in the Notes to Consolidated Financial Statements for additional information).

Our primary capital needs are for working capital obligations and other general corporate purposes, including investments and capital expenditures. Our primary sources of working capital are cash from operations and distributions from investments in real estate ventures. We have historically financed our operations with internally generated funds and, more rarely and only when necessary, borrowings from our Credit Facility. We believe we currently have adequate liquidity and availability of capital to fund our present operations.

The $6.3$5.6 million variance in net operating cash activity was driven by a $6.4 million incremental cash outflow stemming from changes to our net working capital, partially offset by a $0.1$5.1 million increase in net income after adjustments for non-cash items.items and a $0.5 million incremental cash inflow stemming from changes to our net working capital. The net working capital decreaseincrease was primarily influenced by aan decreaseincrease in related party accounts receivable collections and annual bonus payoutsdecrease in Januaryprepaid 2026.expenses, partially offset by an increase in accrued personnel costs.

The $4.7$13.1 million variance in net investing cash activity was driven by a $3.4$11.8 million increase in investments in real estate ventures due to the completed acquisitionacquisitions of The Reed.Reed and Woodland Pointe. Also contributing to the increase was the initial $1.5 million investment in Jericho Energy Ventures, Inc. equity securities.

The $0.2$0.1 million variance in net financing cash activity was driven by a $0.2 million increase in cash paid for taxes related to the net share settlement of equity awards, partially offset by a $0.1 million increase in proceeds collected from the exercise of stock option awards.