Filed
Pursuant to Rule 424(b)(3)
Registration
No. 333-274666
PROSPECTUS
SUPPLEMENT NO. 3
(To
Prospectus dated November 2, 2023)
Mobile
Infrastructure Corporation
Up
to 37,156,865 Shares of Common Stock
Warrant
to Purchase 2,553,192 Shares of Common Stock
This
prospectus supplement is being filed to update and supplement the information contained in the prospectus, dated November 2, 2023 (the
“Prospectus”), with certain information contained in Exhibit 99.1 relating to Item 2.02 in our Current Report on Form
8-K, furnished to the Securities and Exchange Commission ( the “SEC”) on March 14, 2024 (the “Current Report”).
The information from Exhibit 99.1 included in the Prospectus is limited to: the headings “Fourth Quarter Business and Financial
Highlights” and the bullets appearing directly thereunder, “Financial Results” and the paragraphs appearing directly
thereunder; and “Discussion and Reconciliation of Non-GAAP Measures” and the paragraphs appearing directly thereunder, including
the explanations of our non-GAAP financial measures; and the financial tables presenting the preliminary, unaudited consolidated balance
sheets, consolidated statements of operations and non-GAAP financial measures and reconciliation to GAAP results. No other information
is included in Exhibit 99.1 or in the Current Report furnished to the SEC on March 14, 2024, is included in the Prospectus. Accordingly,
we have attached the Current Report to this prospectus supplement.
The
Prospectus and this prospectus supplement relate to the offer and sale from time to time by the selling securityholders named in the
Prospectus or their permitted transferees of
| (A) | up
to 37,156,865 shares of our common stock, par value $0.0001 per share (the “Common
Stock”), consisting of: |
|
(i) |
3,937,246
shares of Common Stock issued as merger consideration to Color Up (as defined in the Prospectus) in connection with the consummation
of the Merger (as defined in the Prospectus) based upon an implied equity consideration value of $10.00 per share; in 2021, Color
Up purchased 2,624,831 shares of Legacy MIC Common Stock (as defined in the Prospectus) at a price per share of $11.75, which shares
were exchanged in the Merger for the 3,937,246 shares of Common Stock for an effective price per share of approximately $7.83; as
of the date of this prospectus supplement, Color Up beneficially owns approximately 37% of our Common Stock; |
|
|
|
|
(ii)
|
up
to 2,553,192 shares of Common Stock issuable upon the exercise of a warrant to purchase Common Stock (the “Warrant”)
at an exercise price of $7.83 per share, owned by Color Up, which was initially a warrant to purchase 1,702,128 shares of Legacy
MIC Common Stock at an exercise price of $11.75 per share, and which was assumed and converted into the Warrant in connection with
the Merger; |
|
|
|
|
(iii)
|
907,000
shares of Common Stock issued upon the conversion of Class A ordinary shares, par value $0.0001 per share, of Fifth Wall Acquisition
Corp. III, a Cayman Islands exempted company (“FWAC”), in connection with the Domestication (as defined in the
Prospectus) that were originally purchased by Fifth Wall Acquisition Sponsor III LLC, a Cayman Islands limited liability company
(“Sponsor”), in a private placement, which occurred simultaneously with the initial public offering of FWAC, at
$10.00 per share for an aggregate purchase price of $9,070,000; |
|
|
|
|
(iv)
|
2,020,000
shares of Common Stock issued upon the conversion of Class B ordinary shares, par value $0.0001 per share, of FWAC, in connection
with the Domestication, originally purchased by the Sponsor for approximately $0.003 per share, comprised of (a) 1,900,000 shares
of Common Stock held by the Sponsor and (b) 120,000 shares of Common Stock transferred by the Sponsor to four former directors of
FWAC; |
|
|
|
|
(v)
|
13,787,462
shares of Common Stock issuable upon the conversion of 46,000 shares of our Series 2 Convertible Preferred Stock, par value $0.0001
per share, upon the earlier to occur of (a) December 31, 2023 and (b) a change in control of us, purchased by the Preferred PIPE
Investors (as defined in the Prospectus) for $1,000 per share for an aggregate purchase price of $46,000,000, inclusive of 1,253,404
shares of Common Stock issuable to the Preferred PIPE Investors upon the conversion of Dividends (as defined in the Prospectus),
resulting in an effective purchase price of approximately $3.34 per share; and |
|
|
|
|
(vi)
|
up
to 13,951,965 shares of Common Stock issuable in the event of our election to issue shares of Common Stock in lieu of cash payments
upon redemption of Common Units (as defined in the Prospectus); of such shares 11,242,635 shares of Common Stock are potentially
issuable to Color Up at an effective purchase price of approximately $7.83 per share and 2,709,330 shares are potentially issuable
to HSCP Strategic III, L.P., an entity controlled by Jeffrey B. Osher, a member of our Board, at an effective purchase price of approximately
$7.38 per share; and |
This
prospectus supplement updates and supplements the information in the Prospectus and is not complete without, and may not be delivered
or utilized except in combination with, the Prospectus, including any amendments or supplements thereto. This prospectus supplement is
qualified by reference to the Prospectus, including any amendments or supplements thereto, except to the extent that the information
in this prospectus supplement updates and supersedes the information contained therein.
Our
Common Stock is listed on the NYSE American LLC under the symbol “BEEP.” On March 13, 2024, the closing price of our Common
Stock was $3.75. The Warrant will not be listed for trading.
We
are an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended, and are subject to
reduced public company reporting requirements. The Prospectus and this prospectus supplement comply with the requirements that apply
to an issuer that is an emerging growth company.
See
the section titled “Risk Factors” beginning on page 9 of the Prospectus to read about factors you should consider before
buying our securities.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued
under the Prospectus or determined if the Prospectus or this prospectus supplement is truthful or complete. Any representation to the
contrary is a criminal offense.
The
date of this prospectus supplement is March 14,
2024.
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d)
of
the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): March 14, 2024
MOBILE
INFRASTRUCTURE CORPORATION
(Exact
name of registrant as specified in its charter)
Maryland |
|
001-40415 |
|
98-1583957 |
(State
or other jurisdiction
of incorporation) |
|
(Commission
File
Number) |
|
(IRS
Employer
Identification No.) |
30
W. 4th Street
Cincinnati,
Ohio |
|
45202 |
(Address
of principal executive offices) |
|
(Zip
Code) |
Registrant’s
telephone number, including area code: (513) 834-5110
Not
applicable
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange
on
which registered |
Common
Stock, $0.0001 par value per share |
|
BEEP |
|
NYSE
American LLC |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☒
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
2.02 |
Results of Operations and Financial Condition. |
On
March 14, 2024, Mobile Infrastructure Corporation (the “Company”) issued a press release (the “Press Release”)
regarding the Company’s financial results for its fourth fiscal quarter and year ended December 31, 2023. A copy of the Company’s
press release is furnished hereto as Exhibit 99.1.
The
information contained in this Item 2.02 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933,
as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such
a filing.
Item
7.01 |
Regulation FD Disclosure. |
On
March 14, 2024, the Company made available on its website at https://ir.mobileit.com the Press Release regarding the Company’s
financial results for its fourth fiscal quarter and year ended December 31, 2023.
The
information contained in this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or incorporated
by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference
in such a filing.
Item 9.01 |
Financial Statements and Exhibits. |
(d)
Exhibits
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
|
MOBILE INFRASTRUCTURE CORPORATION |
|
|
|
Date:
March 14, 2024 |
By: |
/s/
Stephanie Hogue |
|
Name: |
Stephanie
Hogue |
|
Title: |
Chief
Financial Officer |
Exhibit
99.1
News
Release
Mobile
Infrastructure Reports Fourth Quarter 2023 Financial Results
—Fourth
Quarter and Full Year Parking Asset Portfolio Performance Substantially Ahead of Year-Ago Levels—
—Converted
Two-Thirds of Portfolio to Management Contracts—
—2024
Guidance Anticipates Accelerating Growth in Parking Asset Portfolio Performance—
CINCINNATI—(BUSINESSWIRE)—Mobile
Infrastructure Corporation (NYSE American: BEEP), (“Mobile”, “Mobile Infrastructure” or the “Company”),
owners of a diversified portfolio of parking assets throughout the United States, today reported results for the fourth quarter and full
year ended December 31, 2023.
Management
Commentary
Commenting
on the results, Manuel Chavez III, Chief Executive Officer, said “Our asset portfolio performed well in the fourth quarter, with
net operating income up over 27% from the prior year quarter, reflecting positive leasing trends and reduced operating expenses. These
results capped a transformative year for Mobile Infrastructure in which we completed a merger transaction, deleveraged the balance sheet,
and provided liquidity to shareholders by listing the Company on the New York Stock Exchange American.
“Mobile’s
strategy of actively managing our asset portfolio led to accelerating organic revenue growth in the second half of 2023. Our asset management
team is leveraging our proprietary technology platform and working directly with service providers to customize offerings that address
the dynamic parking needs of our corporate, hospitality, and transient customers. Additionally, in the first quarter, we converted 26
of our portfolio assets from leased to management contracts. This action will give us greater flexibility to optimize rates and utilization,
while also executing strategies to contain operating expenses.
“Full
year results were impacted by substantial non-cash charges, primarily associated with our merger and listing, that are not expected to
recur in future periods. We ended the year with an improved financial position, highlighted by $29.1 million of debt paydown. Our parking
asset portfolio was valued at over $520 million in late 2022 by an independent national real estate services firm. Since that time, our
net operating income has increased by 9.5%.”
Fourth
Quarter Business and Financial Highlights
|
● |
Total
revenue was $7.9 million as compared to $6.9 million in the prior year period. |
|
● |
Net
loss attributable to common stockholders was $9.2 million as compared to $5.2 million in the prior year period. |
|
● |
NOI*
was $5.5 million as compared to $4.3 million in the prior year period. |
|
● |
Adjusted
EBITDA* was $3.4 million as compared to $2.5 million in the prior year period. |
*An
explanation and reconciliation of non-GAAP financial measures are presented later in this press release.
30 West 4th Street, Cincinnati, OH, Phone: 212-509-4000
| Fourth Quarter 2023 Financial Results |
| Page 2 |
Financial
Results
Total
revenue of $7.9 million during the fourth quarter of 2023 increased by 14.3% from $6.9 million in the prior year quarter. Total property
taxes and operating expenses for the fourth quarter of 2023 were $2.4 million, as compared to $2.6 million during the same period in
2022.
Net
loss attributable to common stockholders of $9.2 million, or $0.69 per diluted share, compared with $5.2 million, or $0.40 per diluted
share, in the comparable prior year period.
Net
Operating Income (“NOI”), defined by the Company as total revenues less property taxes and operating expenses, was $5.5 million
for the fourth quarter of 2023, representing a 27.7% increase from the fourth quarter of 2022, and demonstrating the model’s inherent
operating leverage from higher revenue and lower property operating expenses.
General
and administrative expenses of $3.9 million reflected $2.4 million of non-cash compensation.
Interest
expense for the fourth quarter 2023 was $3.0 million, as compared to $3.4 million during the fourth quarter of 2022, benefiting from
the repayment of debt in the third quarter of 2023.
Adjusted
EBITDA was $3.4 million for the fourth quarter of 2023, representing a 36.5% increase over the same year-ago period. The increase reflects
the benefit of NOI improvement, partially offset by an increase in professional fees related to the transition to management contracts
and general and administrative expenses due to increased insurance costs and compensation expense.
As
of December 31, 2023, the Company had $17.0 million in cash, cash equivalents, and restricted cash. As of December 31, 2023, total debt
outstanding, including outstanding borrowings on the credit facility and notes payable, was $192.9 million, compared to total debt outstanding
of $219.7 million as of December 31, 2022.
Summary
and Outlook**
“Mobile
Infrastructure ended 2023 with positive momentum, and we expect the investment made over the last eighteen months to result in accelerating
organic net operating income growth in 2024. Our priorities are to drive operating efficiencies across our portfolio by utilizing proprietary
data analytics, together with on-site relationships, to tailor our offerings to specific markets and evaluate opportunities for ancillary
revenue. Based on the visibility in our current parking asset portfolio, we expect revenues to range from $38 million to $40 million
for 2024, reflecting mid-single-digit organic growth and the shift from leased to managed contracts. Net operating income is expected
to range from $22.5 million to $23.25 million for full year 2024.
“Longer
term, we expect return to office trends and the conversion of commercial office buildings to residences in several of our markets to
serve as growth tailwinds. At the same time, Mobile Infrastructure intends to build on its successful operating model to become the acquirer
of choice in the fragmented parking industry. We have a pipeline of potential acquisitions which could be completed once financial market
conditions improve.
| Fourth Quarter 2023 Financial Results |
| Page 3 |
“2023
was a transformational year for our company, and 2024 will be a year in which we focus on operational improvements as we work to further
strengthen the performance of our existing asset portfolio. We appreciate the dedication of the Mobile team, the quality of our service
providers, and the support of our shareholders and look forward to delivering strong returns in the periods ahead,” Mr. Chavez
concluded.
**
The Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis, where it is unable to provide a meaningful
or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. Please see
Discussion and Reconciliation of Non-GAAP Measures later in this press release for further discussion.
Fourth
Quarter 2023 Conference Call and Webcast Information
Mobile
will hold a conference call to discuss its fourth quarter and full year 2023 results on Thursday, March 14, 2024, at 4:30 p.m. ET. To
participate on the day of the call, dial 1-866-652-5200, or internationally 1-412-317-6060, approximately ten minutes before the call
and tell the operator you wish to join the Mobile Infrastructure Conference Call.
A
live webcast of the conference call will be available in the Investor Relations section of the Mobile Infrastructure website at 4Q
Earnings Webcast. A webcast archive will be available approximately two hours after the call ends on the Mobile website through June
14, 2024.
Forward-Looking
Statements
Certain
statements contained in this press release are forward-looking statements, within the meaning of the Private Securities Litigation Reform
Act of 1995. All statements included in this press release that are not historical facts (including any statements concerning our net
operating income and revenue projections, our assessment of various trends impacting our economic performance, the effects of implementation
of strategic model changes, other plans and objectives of management for future operations or economic performance, or assumptions or
forecasts related thereto) are forward-looking statements. Forward-looking statements are typically identified by the use of terms such
as “may,” “should,” “expect,” “could,” “intend,” “plan,” “anticipate,”
“estimate,” “believe,” “continue,” “predict,” “potential” or the negative
of such terms and other comparable terminology.
The
forward-looking statements included herein are based upon the Company’s current expectations, plans, estimates, assumptions and
beliefs, which involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among
other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible
to predict accurately and many of which are beyond the Company’s control. Although the Company believes that the expectations reflected
in such forward-looking statements are based on reasonable assumptions, the actual results and performance could differ materially from
those set forth in the forward-looking statements. Factors which could have a material adverse effect on operations and future prospects
include, but are not limited to the fact that we previously incurred and may continue to incur losses, we may be unable to attain our
investment strategy or increase the value of our portfolio, our parking facilities face intense competition, which may adversely affect
rental and fee income, we may not be able to access financing sources on attractive terms, or at all, which could adversely affect our
ability to execute our business plan, and other risks and uncertainties discussed in the section titled “Risk Factors” of
our final prospectus, filed with the Securities and Exchange Commission (the “SEC”) pursuant to Rule 424(b) under the Securities
Act of 1933 on November 2, 2023, in connection with our registration statement on Form S-11 and subsequent filings the Company makes
with the SEC from time to time, particularly under the sections titled “Risk Factors” and “Management’s Discussion
and Analysis of Financial Condition and Results of Operations,” including the Company’s Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q.
| Fourth Quarter 2023 Financial Results |
| Page 4 |
Any
of the assumptions underlying the forward-looking statements included herein could be inaccurate, and undue reliance should not be placed
upon any forward-looking statements included herein. All forward-looking statements are made as of the date of this press release, and
the risk that actual results will differ materially from the expectations expressed herein will increase with the passage of time. Except
as otherwise required by the federal securities laws, the Company undertakes no obligation to publicly update or revise any forward-looking
statements made after the date of this press release, whether as a result of new information, future events, changed circumstances or
any other reason. In light of the significant uncertainties inherent in the forward-looking statements included in this press release,
the inclusion of such forward-looking statements should not be regarded as a representation by us or any other person that the objectives
and plans set forth in this press release will be achieved.
About
Mobile Infrastructure Corporation
Mobile
Infrastructure Corporation is a Maryland corporation. The Company owns a diversified portfolio of parking assets primarily located in
the Midwest and Southwest. As of December 31, 2023, the Company owned 43 parking facilities in 21 separate markets throughout the United
States, with a total of 15,700 parking spaces and approximately 5.4 million square feet. The Company also owns approximately 0.2 million
square feet of retail/commercial space adjacent to its parking facilities. Learn more at www.mobileit.com.
Mobile
Contact
David
Gold
Lynn
Morgen
beepir@advisiry.com
(212) 750-5800
| Fourth Quarter 2023 Financial Results |
| Page 5 |
MOBILE
INFRASTRUCTURE CORPORATION
CONSOLIDATED
BALANCE SHEETS
(In
thousands, except per share amounts, unaudited)
| |
As of December 31, | |
| |
2023 | | |
2022 | |
ASSETS | |
| | |
| |
Investments in real estate | |
| | | |
| | |
Land and improvements | |
$ | 161,291 | | |
$ | 166,225 | |
Buildings and improvements | |
| 260,966 | | |
| 272,605 | |
Construction in progress | |
| 273 | | |
| 1,206 | |
Intangible assets | |
| 10,187 | | |
| 10,106 | |
| |
| 432,717 | | |
| 450,142 | |
Accumulated depreciation and amortization | |
| (29,838 | ) | |
| (31,052 | ) |
Total investments in real estate, net | |
| 402,879 | | |
| 419,090 | |
| |
| | | |
| | |
Cash | |
| 11,134 | | |
| 5,758 | |
Cash – restricted | |
| 5,577 | | |
| 5,216 | |
Accounts receivable, net | |
| 2,269 | | |
| 1,849 | |
Other assets, net | |
| 1,378 | | |
| 1,262 | |
Deferred offering costs | |
| — | | |
| 2,086 | |
Assets held for sale | |
| — | | |
| 696 | |
Due from related parties | |
| — | | |
| 156 | |
Total assets | |
$ | 423,237 | | |
$ | 436,113 | |
LIABILITIES AND EQUITY | |
| | | |
| | |
Liabilities | |
| | | |
| | |
Notes payable, net | |
$ | 134,380 | | |
$ | 146,948 | |
Revolving credit facility, net | |
| 58,523 | | |
| 72,731 | |
Accounts payable and accrued expenses | |
| 14,666 | | |
| 19,484 | |
Accrued preferred distributions | |
| 10,464 | | |
| 8,504 | |
Earn-out Liability | |
| 1,779 | | |
| — | |
Due to related parties | |
| 470 | | |
| 470 | |
Liabilities held for sale | |
| — | | |
| 968 | |
Total liabilities | |
| 220,282 | | |
| 249,105 | |
| |
| | | |
| | |
Equity | |
| | | |
| | |
Mobile Infrastructure Corporation Stockholders’ Equity | |
| | | |
| | |
Preferred stock Series A, $0.0001 par value, 50,000 shares authorized, 2,812 and 2,862 shares issued and outstanding, with a stated liquidation value of $2,812,000 and $2,862,000 as of December 31, 2023 and December 31, 2022, respectively | |
| — | | |
| — | |
Preferred stock Series 1, $0.0001 par value, 97,000 shares authorized, 36,752 and 39,811 shares issued and outstanding, with a stated liquidation value of $36,752,000 and $39,811,000 as of December 31, 2023 and December 31, 2022, respectively) | |
| — | | |
| — | |
Preferred stock Series 2, $0.0001 par value, 60,000 shares authorized, 46,000 shares issued and converted (stated liquidation value of zero as of December 31, 2023 and December 31, 2022) | |
| — | | |
| — | |
Common stock, $0.0001 par value, 500,000,000 shares authorized, 29,758,439 shares issued and 27,858,439 shares outstanding as of December 31, 2023, and 14,989,848 shares issued and 13,089,848 shares outstanding as of December 31, 2022 | |
| 2 | | |
| — | |
Warrants issued and outstanding – 2,553,192 warrants as of December 31, 2023 and December 31, 2022 | |
| 3,319 | | |
| 3,319 | |
Additional paid-in capital | |
| 240,357 | | |
| 193,176 | |
Accumulated deficit | |
| (134,291 | ) | |
| (109,168 | ) |
Total Mobile Infrastructure Corporation Stockholders’ Equity | |
| 109,387 | | |
| 87,327 | |
Non-controlling interest | |
| 93,568 | | |
| 99,681 | |
Total equity | |
| 202,955 | | |
| 187,008 | |
Total liabilities and equity | |
$ | 423,237 | | |
$ | 436,113 | |
| Fourth Quarter 2023 Financial Results |
| Page 6 |
MOBILE
INFRASTRUCTURE CORPORATION
CONSOLIDATED
STATEMENTS OF OPERATIONS
(In
thousands, except per share amounts, unaudited)
| |
For the Three Months Ended | | |
For the Year Ended
| |
| |
December 31, 2023 | | |
December 31, 2022 | | |
December 31, 2023 | | |
December 31, 2022 | |
Revenues | |
| | | |
| | | |
| | | |
| | |
Base rental income | |
$ | 2,125 | | |
$ | 2,119 | | |
$ | 8,165 | | |
$ | 8,345 | |
Management income | |
| — | | |
| — | | |
| — | | |
| 427 | |
Percentage rental income | |
| 5,767 | | |
| 4,785 | | |
| 22,107 | | |
| 20,329 | |
Total revenues | |
| 7,892 | | |
| 6,904 | | |
| 30,272 | | |
| 29,101 | |
| |
| | | |
| | | |
| | | |
| | |
Operating expenses | |
| | | |
| | | |
| | | |
| | |
Property taxes | |
| 1,878 | | |
| 1,709 | | |
| 7,178 | | |
| 6,885 | |
Property operating expense | |
| 544 | | |
| 912 | | |
| 1,985 | | |
| 2,947 | |
Depreciation and amortization | |
| 2,123 | | |
| 2,080 | | |
| 8,512 | | |
| 8,248 | |
General and administrative | |
| 3,942 | | |
| 2,683 | | |
| 13,160 | | |
| 8,535 | |
Preferred Series 2 - issuance expense | |
| - | | |
| - | | |
| 16,101 | | |
| - | |
Professional fees | |
| 603 | | |
| 250 | | |
| 1,724 | | |
| 2,690 | |
Organization, offering and other costs | |
| 1,514 | | |
| 1,745 | | |
| 2,862 | | |
| 5,592 | |
Impairment | |
| 282 | | |
| — | | |
| 8,982 | | |
| — | |
Total operating expenses | |
| 10,886 | | |
| 9,379 | | |
| 60,504 | | |
| 34,897 | |
| |
| | | |
| | | |
| | | |
| | |
Loss from operations | |
| (2,994 | ) | |
| (2,475 | ) | |
| (30,232 | ) | |
| (5,796 | ) |
| |
| | | |
| | | |
| | | |
| | |
Other | |
| | | |
| | | |
| | | |
| | |
Interest expense | |
| (3,017 | ) | |
| (3,415 | ) | |
| (13,910 | ) | |
| (12,912 | ) |
Gain (loss) from sale of real estate | |
| — | | |
| — | | |
| 660 | | |
| (52 | ) |
PPP loan forgiveness | |
| — | | |
| — | | |
| — | | |
| 328 | |
Other income, net | |
| 27 | | |
| (32 | ) | |
| 1,179 | | |
| 106 | |
Change in fair value of Earn-out Liability | |
| (563 | ) | |
| — | | |
| 4,065 | | |
| — | |
Total other expense | |
| (3,553 | ) | |
| (3,447 | ) | |
| (8,006 | ) | |
| (12,530 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net loss | |
| (6,547 | ) | |
| (5,922 | ) | |
| (38,238 | ) | |
| (18,326 | ) |
Net loss attributable to non-controlling interest | |
| (2,524 | ) | |
| (1,470 | ) | |
| (13,115 | ) | |
| (10,207 | ) |
Net loss attributable to stockholders | |
$ | (4,023 | ) | |
| (4,452 | ) | |
$ | (25,123 | ) | |
| (8,119 | ) |
| |
| | | |
| | | |
| | | |
| | |
Preferred stock distributions declared - Series A | |
| (41 | ) | |
| (54 | ) | |
| (197 | ) | |
| (216 | ) |
Preferred stock distributions declared - Series 1 | |
| (521 | ) | |
| (696 | ) | |
| (2,555 | ) | |
| (2,784 | ) |
Preferred stock distributions declared - Series 2 | |
| (4,600 | ) | |
| — | | |
| (4,600 | ) | |
| — | |
Net loss attributable to common stockholders | |
| (9,185 | ) | |
| (5,202 | ) | |
| (32,475 | ) | |
| (11,119 | ) |
| |
| | | |
| | | |
| | | |
| | |
Basic and diluted loss per weighted average common share: | |
| | | |
| | | |
| | | |
| | |
Net loss per share attributable to common stockholders - basic and diluted | |
$ | (0.69 | ) | |
$ | (0.40 | ) | |
$ | (2.45 | ) | |
$ | (0.85 | ) |
Weighted average common shares outstanding, basic and diluted | |
| 13,400,159 | | |
| 13,089,848 | | |
| 13,244,388 | | |
| 13,089,848 | |
| Fourth Quarter 2023 Financial Results |
| Page 7 |
Discussion
and Reconciliation of Non-GAAP Measures
Net
Operating Income
Net
Operating Income (“NOI”) is presented as a supplemental measure of our performance. The Company believes that NOI provides
useful information to investors regarding our results of operations, as it highlights operating trends such as pricing and demand for
our portfolio at the property level as opposed to the corporate level. NOI is calculated as total revenues less property operating expenses
and property taxes. The Company uses NOI internally in evaluating property performance, measuring property operating trends, and valuing
properties in our portfolio. Other real estate companies may use different methodologies for calculating NOI, and accordingly, the Company’s
NOI may not be comparable to other real estate companies. NOI should not be viewed as an alternative measure of financial performance
as it does not reflect the impact of general and administrative expenses, depreciation and amortization, interest expense, other income
and expenses, or the level of capital expenditures necessary to maintain the operating performance of the Company’s properties
that could materially impact results from operations.
EBITDA
and Adjusted EBITDA
Earnings
Before Interest Expense, Taxes, Depreciation and Amortization (“EBITDA”) reflects net income (loss) excluding the impact
of the following items: interest expense, depreciation and amortization, and the provision for income taxes, for all periods presented.
When applicable, Adjusted EBITDA also excludes certain recurring and non-recurring items from EBITDA, including, but not limited to gains
or losses from disposition of real estate assets, impairment write-downs of depreciable property, non-cash changes in the fair value
of the Earn-Out liability, merger-related charges and other expenses, gains or losses on settlements, and stock-based compensation expense.
The
use of EBITDA and Adjusted EBITDA facilitates comparison with results from other companies because it excludes certain items that can
vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on
a company’s capital structure, debt levels, and credit ratings. The tax positions of companies can also vary because of their differing
abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. EBITDA and Adjusted
EBITDA also exclude depreciation and amortization expense because differences in types, use, and costs of assets can result in considerable
variability in depreciation and amortization expense among companies. The Company excludes stock-based compensation expense in all periods
presented to address the considerable variability among companies in recording compensation expense because companies use stock-based
payment awards differently, both in the type and quantity of awards granted. The Company uses EBITDA and Adjusted EBITDA as measures
of operating performance which allows for comparison of earnings and evaluation of debt leverage and fixed cost coverage. These non-GAAP
financial measures should be considered along with, but not as alternatives to, net income (loss), cash flow from operations or any other
operating GAAP measure.
Forward-Looking
Basis
The
Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis, where it is unable to provide a meaningful
or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is
due to the inherent difficulty of forecasting the timing and/or amount of various items that would impact net income which is the most
directly comparable forward-looking GAAP financial measure. This includes, for example, external growth factors and balance sheet items,
that have not yet occurred, are out of the Company’s control and/or cannot be reasonably predicted. For the same reasons, the Company
is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without
the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.
| Fourth Quarter 2023 Financial Results |
| Page 8 |
The
following table presents NOI as well as a reconciliation of NOI to Net Loss, the most directly comparable financial measure under GAAP
reported in our consolidated financial statements, for the three and twelve months ended December 31, 2023 and 2022 (in thousands):
| |
For the Three Months Ended December 31, | | |
For the Year Ended December 31, | |
| |
2023 | | |
2022 | | |
2023 | | |
2022 | |
Revenues | |
| | | |
| | | |
| | | |
| | |
Base rental income | |
| 2,125 | | |
| 2,119 | | |
| 8,165 | | |
| 8,345 | |
Management income | |
| — | | |
| — | | |
| — | | |
| 427 | |
Percentage rental income | |
| 5,767 | | |
| 4,785 | | |
| 22,107 | | |
| 20,329 | |
Total revenues | |
| 7,892 | | |
| 6,904 | | |
| 30,272 | | |
| 29,101 | |
Operating Expenses | |
| | | |
| | | |
| | | |
| | |
Property taxes | |
| 1,878 | | |
| 1,709 | | |
| 7,178 | | |
| 6,885 | |
Property operating expense | |
| 544 | | |
| 912 | | |
| 1,985 | | |
| 2,947 | |
Net Operating Income | |
| 5,470 | | |
| 4,283 | | |
| 21,109 | | |
| 19,269 | |
| |
| | | |
| | | |
| | | |
| | |
Reconciliation | |
| | | |
| | | |
| | | |
| | |
Net loss | |
| (6,547 | ) | |
| (5,922 | ) | |
| (38,238 | ) | |
| (18,326 | ) |
Loss (gain) on sale of real estate | |
| — | | |
| — | | |
| (660 | ) | |
| 52 | |
PPP loan forgiveness | |
| — | | |
| — | | |
| — | | |
| (328 | ) |
Other income | |
| (27 | ) | |
| 32 | | |
| (1,179 | ) | |
| (106 | ) |
Change in fair value of Earn-out liability | |
| 563 | | |
| — | | |
| (4,065 | ) | |
| - | |
Interest expense | |
| 3,017 | | |
| 3,415 | | |
| 13,910 | | |
| 12,912 | |
Depreciation and amortization | |
| 2,123 | | |
| 2,080 | | |
| 8,512 | | |
| 8,248 | |
General and administrative | |
| 3,942 | | |
| 2,683 | | |
| 13,160 | | |
| 8,535 | |
Preferred Series 2 - issuance expense | |
| — | | |
| — | | |
| 16,101 | | |
| - | |
Professional fees | |
| 603 | | |
| 250 | | |
| 1,724 | | |
| 2,690 | |
Organizational, offering and other costs | |
| 1,514 | | |
| 1,745 | | |
| 2,862 | | |
| 5,592 | |
Impairment of real estate assets | |
| 282 | | |
| — | | |
| 8,982 | | |
| - | |
Net Operating Income | |
$ | 5,470 | | |
$ | 4,283 | | |
$ | 21,109 | | |
$ | 19,269 | |
The
following table presents the calculation of EBITDA and Adjusted EBITDA for the three and twelve months ended December 31, 2023 and 2022
(in thousands):
| |
4Q 2023 | | |
4Q 2022 | | |
2023 | | |
2022 | |
(in thousands) | |
| | | |
| | | |
| | | |
| | |
Reconciliation of Net loss to Adjusted EBITDA | |
| | | |
| | | |
| | | |
| | |
Net Income (Loss) | |
$ | (6,547 | ) | |
$ | (5,922 | ) | |
$ | (38,238 | ) | |
$ | (18,326 | ) |
Interest expense | |
| 3,017 | | |
| 3,415 | | |
| 13,910 | | |
| 12,912 | |
Income tax expense (benefit) | |
| — | | |
| — | | |
| — | | |
| — | |
Depreciation and amortization | |
| 2,123 | | |
| 2,080 | | |
| 8,512 | | |
| 8,248 | |
EBITDA Attributable to the Company | |
$ | (1,407 | ) | |
$ | (427 | ) | |
$ | (15,816 | ) | |
$ | 2,834 | |
Organization and offering costs | |
| 1,514 | | |
| 1,745 | | |
| 2,862 | | |
| 5,592 | |
Impairment of real estate | |
| 282 | | |
| — | | |
| 8,982 | | |
| — | |
Preferred Series 2 - Issuance expense and dividend | |
| — | | |
| — | | |
| 16,101 | | |
| — | |
Change in fair value of Earn-out liability | |
| 563 | | |
| — | | |
| (4,065 | ) | |
| — | |
Gain on settlement of indemnification liability | |
| — | | |
| — | | |
| (1,155 | ) | |
| — | |
Gain on sale of real estate | |
| — | | |
| — | | |
| (660 | ) | |
| 52 | |
PPP Loan Forgiveness | |
| — | | |
| — | | |
| — | | |
| (328 | ) |
Equity and non-cash compensation | |
| 2,416 | | |
| 1,149 | | |
| 8,552 | | |
| 2,901 | |
Adjusted EBITDA Attributable to the Company | |
$ | 3,368 | | |
$ | 2,467 | | |
$ | 14,801 | | |
$ | 11,051 | |
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