Annual Report for Fiscal Year Ending 12-31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations is based on and should be read in conjunction with the audited consolidated financial statements and the notes thereto contained elsewhere in this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. See "Forward-Looking Statements" preceding Part I and "Risk Factors" for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from the results described in or implied by these forward-looking statements.

Overview

General

We are a Maryland corporation focused on acquiring, owning and optimizing parking facilities and related infrastructure, including parking lots, parking garages and other parking structures throughout the United States. We target both parking garage and surface lot properties primarily in top 50 MSAs with proximity to key demand drivers, such as commerce, events and venues, government and institutions, hospitality and multifamily central business districts.

As of December 31, 2025, we owned 36 parking facilities in 19 separate markets throughout the United States, with a total of approximately 13,500 parking spaces and approximately 4.7 million square feet. We also own approximately 0.2 million square feet of commercial space adjacent to our parking facilities.

Return to Work

The return to normalized movement following the COVID-19 pandemic is relatively uneven among markets and industries, which has impacted the performance of our assets, as many of our properties are located in urban centers, near government buildings, entertainment centers, or hotels. Many companies continue to deploy a work-from-home or hybrid remote strategy for employees. We anticipate that a hybrid work structure for traditional central business district office workers will be the normalized state going-forward. This has impacted the performance of many of our assets that have office exposure and underscores the importance of a multi-key demand driver strategy in repositioning current and/or acquiring new assets.

Managed Property Revenue Contracts

To date, 28 of our 36 assets have converted to management contracts. We believe asset management contracts provide the opportunity for NOI growth through more transparent and controlled expense management and will reduce the revenue variability associated with the timing of payments for contract parking agreements. In addition, the move to management contracts properly aligns the incentives and rewards for revenue growth between the third-party operator and the Company. This change is also expected to result in better revenue linearity compared to revenue recognition in our lease agreements, in which lease payments are based on cash collections from operators. Overall, the conversion to management contracts also provides enhanced visibility on the performance of the portfolio within our financial results. Our intent is to convert the remaining assets to asset management contracts by the end of 2027.

Same Location RevPAS

Revenue Per Available Stall ("RevPAS") is used to evaluate parking operations and performance. RevPAS is defined as average monthly Parking Revenue (managed property revenue less related sales tax and credit card fees) divided by the parking stalls in the locations the Parking Revenue was earned. Parking Revenue does not include billboard or commercial rent, or revenue from locations that are under lease agreements. Parking Revenue is a meaningful component of revenue that is used to judge the performance of locations and the ability to manage each location. We believe RevPAS is a meaningful indicator of our performance because it measures the period-over-period change in revenues for comparable locations. Parking Revenue and RevPAS should not be viewed as alternative measures of our financial performance as they do not reflect all components of revenue, which may be material.

Same location RevPAS represents Parking Revenue at our assets under management agreements prior to the second quarter of 2024, and excludes an asset for which we do not have sufficient historical data to calculate RevPAS. We believe same location RevPAS is a key performance measure that allows for review of fluctuations in revenue on a comparable asset basis, without the impact of portfolio transactions or changes in revenue structure. Average monthly same location RevPAS for the years ended December 31, 2025 and 2024 was $199.36 and $209.24 per month, respectively.

Results of Operations for the Years Ended December 31, 2025 and 2024 (dollars in thousands)

		For the Year Ended December 31,
		2025				2024				$ Change				% Change
Revenues
Managed property revenue		$	28,619			$	27,848			$	771				2.8	%
Base rental income			5,394				6,195				(801	)			(12.9	)%
Percentage rental income			1,062				2,965				(1,903	)			(64.2	)%
Total revenues		$	35,075			$	37,008			$	(1,933	)			(5.2	)%

Total Revenues

The decrease in total revenues for the year ended December 31, 2025 compared to the same period in 2024 is due partially to $0.6 million of nonrecurring revenue resulting from collections of remaining 2023 percent rent payments for lease agreements which were converted to management contracts at the beginning of 2024. Within total revenues, conversions to management agreements resulted in certain locations recognizing Managed Property Revenue in 2025 while recognizing Base Rental Income and Percentage Rental Income for portions for 2024.

The decline in revenue was further driven by the Detroit market, where a significant area restructuring plan is causing a reduction in office occupancy and related traffic. Additionally, event reductions because of the Cincinnati convention center remodel and traffic disruptions near our Nashville location drove temporary transient revenue declines in those markets. Our sale of three assets in 2024 also resulted in a decrease of approximately $0.2 million in 2025. These impacts were partially offset by contract growth in our Cleveland market, increased transient traffic in Oklahoma City partially as a result of game and event attendance, and favorable return-to-office trends in one of our St. Louis locations.

		For the Year Ended December 31,
		2025				2024				$ Change				% Change (1)
Operating expenses
Property taxes		$	6,988			$	7,256			$	(268	)			(3.7	)%
Property operating expense			7,367				7,119				248				3.5	%
Depreciation and amortization			10,577				8,403				2,174				25.9	%
General and administrative			7,969				10,794				(2,825	)			(26.2	)%
Professional fees			1,554				1,759				(205	)			(11.7	)%
Impairment			3,762				157				3,605				NM
Total expenses		$	38,217			$	35,488			$	2,729				7.7	%

(1)

Line items that result in a percent change that exceed certain limitations are considered not meaningful ("NM") and indicated as such.

Property Taxes

The decrease in property taxes for the year ended December 31, 2025 compared to the same period in 2024 is due primarily to favorable results from property tax appeals as well as a reduction in expense from three assets sold during 2024.

Property Operating Expense

The increase in property operating expense for the year ended December 31, 2025 compared to the same period in 2024 is due primarily to additional expense related to properties that converted to management contracts after January 2024, as property operating expenses were incurred for only a partial period during 2024.

Depreciation and Amortization

The $2.2 million increase in depreciation and amortization for the year ended December 31, 2025 compared to the same period in 2024 is primarily due to accelerated amortization associated with the phase out of the Inigma software, which was completed during 2025.

General and Administrative Expense

The $2.8 million decrease in general and administrative expenses during the year ended December 31, 2025 compared to the same period in 2024 is primarily attributable to the vesting of certain one-time equity compensation awards in 2024 related to the Merger, as well as the non-cash impact of a change in timing of annual equity awards in 2025.

Professional Fees

The $0.2 million decrease in professional fees during the year ended December 31, 2025 compared to the same period in 2024 is primarily attributable to savings in tax preparation services and legal fees incurred in 2024 associated with additional filings.

Impairment

During the years ended December 31, 2025 and 2024, we impaired approximately $3.8 million and $0.2 million of our real estate assets, respectively, as a result of planned dispositions of properties.

		For the Year Ended December 31,
		2025				2024				$ Change				% Change (1)
Other
Interest expense, net		$	(19,039	)		$	(13,830	)		$	(5,209	)			37.7	%
Loss on extinguishment of debt			(2,600	)			-				(2,600	)			100.0	%
(Loss) gain on sale of real estate			(124	)			2,651				(2,775	)			NM
Other income, net			256				434				(178	)			(41.0	)%
Change in fair value of Earn-Out liability			935				844				91				10.8	%
Total other expense		$	(20,572	)		$	(9,901	)		$	(10,671	)			107.8	%

(1)

Line items that result in a percent change that exceed certain limitations are considered not meaningful ("NM") and indicated as such.

Interest Expense

The increase in interest expense of approximately $5.2 million during the year ended December 31, 2025 compared to the same period in 2024 is primarily attributable to interest expense and loan fee amortization on the Line of Credit entered into in the third quarter of 2024 and higher interest expense resulting from the refinancing of the $75.0 million revolving credit facility with KeyBank National Association ("the Revolving Credit Facility") with the 2034 CMBS Loan in December 2024.

Loss on Extinguishment of Debt

In connection with entering into the Asset-Backed Securitization, we incurred approximately $2.6 million in fees related to prepayment penalties and legal costs.

(Loss) Gain on Sale of Real Estate

In November 2025, we sold a parking lot located in Indianapolis, Indiana for approximately $2.0 million, resulting in a gain on sale of real estate of approximately $0.5 million, and two parking lots in Denver, Colorado for approximately $2.5 million, resulting in a $0.1 million loss on sale of real estate. In December 2025, we sold a parking garage located in Lubbock, Texas for approximately $11.0 million, resulting in a loss on sale of real estate of approximately $0.5 million.

In February 2024, we disposed of our Cincinnati Race Street location for $3.15 million, resulting in a loss on sale of real estate of approximately $0.1 million. In July 2024, we sold one parking lot in Clarksburg, West Virginia for approximately $0.5 million, resulting in an immaterial loss on sale of real estate. In November 2024, we sold a parking lot located in Indianapolis, Indiana for approximately $4.6 million, resulting in a gain on sale of real estate of approximately $2.7 million.

Other Income, Net

The $0.2 million decrease in other income during the year ended December 31, 2025 compared to the same period in 2024 is primarily attributable to a $0.3 million gain from a settlement agreement entered into in September 2024.

Change in Fair Value of Earn-out Liability

This is non-cash gain or loss as the estimated fair value of the 1,900,000 shares of common stock that are subject to an earn-out structure ("Earn-Out Shares"), as described below, change. Fair value fluctuations of the liability during the period are reflected in earnings and are a result of changes in stock price and the remaining duration of the earn-out period.

Non-GAAP Measures

Net Operating Income

Net Operating Income ("NOI") is presented as a supplemental measure of our performance. We believe 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. We use 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, our NOI may not be comparable to other real estate companies. NOI should not be viewed as an alternative measure of our 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 our properties that could materially impact our results from operations.

The following table presents our NOI as well as a reconciliation of NOI to Net Loss, the most directly comparable financial measure under U.S. GAAP reported in our consolidated financial statements, for the years ended December 31, 2025 and 2024 (dollars in thousands):

		For the Year Ended December 31,
		2025				2024			%
Revenues
Managed property revenue			28,619				27,848
Base rental income			5,394				6,195
Percentage rental income			1,062				2,965
Total revenues			35,075				37,008		(5.2)%
Operating expenses
Property taxes			6,988				7,256
Property operating expense			7,367				7,119
Net Operating Income		$	20,720			$	22,633		(8.5)%
Reconciliation
Net loss			(23,714	)			(8,381	)
Loss on extinguishment of debt			2,600				-
Loss (gain) on sale of real estate			124				(2,651	)
Other income, net			(256	)			(434	)
Change in fair value of Earn-Out liability			(935	)			(844	)
Interest expense, net			19,039				13,830
Depreciation and amortization			10,577				8,403
General and administrative			7,969				10,794
Professional fees			1,554				1,759
Impairment			3,762				157
Net Operating Income		$	20,720			$	22,633

Adjusted EBITDA

Adjusted Earnings Before Interest Expense, Taxes, Depreciation and Amortization ("Adjusted EBITDA") reflects net income (loss) excluding the impact of the following items: interest expense, depreciation and amortization, and the provision for income taxes, stock-based compensation expense, non-cash changes in the fair value of the Earn-Out Liability, gains or losses from disposition of real estate assets, impairment write-downs of depreciable property, and Other Income, Net for all periods presented.

Our use of 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. Adjusted EBITDA also excludes 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. We exclude 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. We use Adjusted EBITDA as a measure of operating performance which allow us to compare earnings and evaluate debt leverage and fixed cost coverage.

The following table presents our calculation of Adjusted EBITDA for the for the years ended December 31, 2025 and 2024 (dollars in thousands):

		For the Year Ended December 31,
		2025				2024
Reconciliation of Net Loss to Adjusted EBITDA Attributable to the Company
Net loss		$	(23,714	)		$	(8,381	)
Interest expense, net			19,039				13,830
Depreciation and amortization			10,577				8,403
Impairment			3,762				157
Change in fair value of Earn-Out liability			(935	)			(844	)
Other income, net			(256	)			(434	)
Loss on extinguishment of debt			2,600				-
Loss (gain) on sale of real estate			124				(2,651	)
Equity-based compensation			3,136				5,719
Adjusted EBITDA Attributable to the Company		$	14,333			$	15,799

Liquidity and Capital Resources

Sources and Uses of Cash

Aside from standard operating expenses, we expect our principal cash demands in both the short term and long term to be for:

	•	principal and interest payments on our outstanding indebtedness;
	•	capital expenditures;
	•	redemption and dividend payments on the Series A Preferred Stock and Series 1 Preferred Stock;
	•	funding of our share repurchase program; and
	•	acquisitions of assets.

Our principal source of funds will be managed property revenue and rental income at our parking facilities as well as existing cash on hand and the Line of Credit, as needed. We may also sell properties or place mortgages on properties to raise capital.

Debt

During 2024 and 2025, we have taken steps to both extend and ladder maturities in our debt profile, including:

	•	In February 2024, we refinanced $5.5 million of notes payable maturing in March 2024 with a 5-year note in the principal amount of $5.9 million.
	•	In September 2024, we entered into a $40.4 million Line of Credit, that matures on March 31, 2026. Borrowings under the Line of Credit will accrue interest at a rate of 15.0% per annum, with interest payable in arrears at maturity or upon repayment of any principal amount borrowed under the Line of Credit. The proceeds from the Line of Credit (after payment of related legal fees) are only to be used for redemption payments on the Series A Preferred Stock and Series 1 Preferred Stock, unpaid dividends on the Series A Preferred Stock and Series 1 Preferred Stock accrued prior to the closing date of the Line of Credit, funding of the share repurchase program, and a $5.0 million paydown on the Revolving Credit Facility.

	•	In December 2024, we refinanced a $7.2 million note payable with a 3-year note in the principal amount of $12 million.
	•	In December 2024, we entered into a $75.5 million, 10-year CMBS financing agreement. The 2034 CMBS Loan bears a fixed annual interest rate of 7.755% and is secured by a pool of seven properties. Proceeds of the 2034 CMBS Loan were used to repay and discharge the Revolving Credit Facility and refinance a property-level loan.
	•	In October 2025, we refinanced $84.2 million of long-term debt through an Asset-Backed Securitization of 19 properties in our portfolio. In this transaction, we issued 4.15% Series 2025-1 Class A-2 Notes priced at 88.30% of the principal amount of $100 million. The Notes have an anticipated repayment date in October 2030 and a final maturity date in October 2055.

Certain lenders may require reserves related to capital improvements, insurance, and excess cash. These lender-required reserves make up the majority of our restricted cash amounts as of December 31, 2025.

As of December 31, 2025, we had approximately $224.2 million aggregate principal amount of indebtedness outstanding, including $198.3 of long-term debt, primarily consisting of $75.1 million outstanding under the 2034 CMBS Loan and $99.6 million outstanding under the Notes.

We currently have $25.9 million related to the Line of Credit due within twelve months of the date of the filing of this Annual Report. Additionally, as of the date of this filing, the Line of Credit has $5.6 million of accrued interest that is due upon maturity. We do not currently have sufficient cash on hand, liquidity or projected cash flows to repay the outstanding amount and related interest due upon maturity. These conditions and events raise substantial doubt about the Company's ability to continue as a going concern.

Management has approved a plan to extend the Line of Credit and to sell real estate assets to satisfy the debt maturity, allowing the Company to sell the properties on an orderly basis. Management has determined that it is probable the plan will be successfully implemented. Accordingly, we have concluded that this plan alleviates substantial doubt about the Company's ability to continue as a going concern.

Asset Acquisitions

Our future acquisitions or development of properties cannot be accurately projected because such acquisitions or development activities depend upon available opportunities that come to our attention and upon our ability to successfully acquire, develop and lease such properties. However, we have identified a pipeline of acquisition opportunities that we believe is bespoke and actionable, while being largely off-market and unavailable to our competitors. As of December 31, 2025, we have identified and are evaluating several parking facilities as potential acquisition targets.

Distributions and redemptions

In September 2024, we paid all accrued and unpaid dividends for the past dividend periods on the Series A Preferred Stock and Series 1 Preferred Stock. Additionally, we declared monthly dividend payments on the Series A Preferred Stock and Series 1 Preferred Stock for each month beginning September 2024 through December 2025. The payment of future dividends is subject to the Board's discretion and will be determined by the Board based on the Company's financial condition and such other considerations as the Board deems relevant. Additionally, in September 2024, we began electing to redeem shares of Series A Preferred Stock and Series 1 Preferred Stock for cash rather than converting to common stock. Proceeds from the Line of Credit are used to pay the stated value of the shares redeemed for cash as well as the accrued and unpaid dividends for past dividend periods.

In March 2018, we suspended the payment of distributions on our common stock. There can be no assurance that cash distributions to our common stockholders will be resumed in the future. The actual amount and timing of distributions, if any, will be determined by our Board in its discretion and typically will depend on various factors that our Board deems relevant. We do not currently, and may not in the future, generate sufficient cash flow from operations to fund distributions. We do not currently anticipate that we will be able to resume the payment of distributions. However, if distributions do resume, all or a portion of the distributions may be paid from other sources, such as cash flows from equity offerings, financing activities, borrowings, or by way of waiver or deferral of fees. We have not established any limit on the extent to which distributions could be funded from these other sources.

Share repurchase program

In September 2024, the Board authorized a share repurchase program of up to $10 million of shares of our outstanding common stock. Repurchases may be made from time to time through open-market purchases or privately negotiated transactions. Proceeds from the Line of Credit and cash on hand are used to fund the share repurchase program.

Warrants

As of December 31, 2025, there are 2,553,192 warrants to purchase 2,553,192 shares of our common stock at an exercise price of $7.83 per share outstanding. While exercise of the Common Stock Warrants is a potential source of cash, we do not currently believe this is a likely event and therefore do not use this assumption in our operating plans.

Cash flow activities

The following table summarizes our cash flows for the years ended December 31, 2025 and 2024 (dollars in thousands):

		For the Year Ended December 31,
		2025				2024
Net cash provided by (used in) operating activities		$	848			$	(784	)
Net cash provided by investing activities		$	16,334			$	4,235
Net cash used in financing activities		$	(17,717	)		$	(4,343	)

Cash flows from operating activities

During the year ended December 31, 2025, $0.8 million of cash was provided by operating activities compared to $0.8 million used in operating activities during the year ended December 31, 2024, an increase of $1.6 million. The cash provided by operating activities for the year ended December 31, 2025 was primarily attributable to changes in working capital and NOI results for the period, partially offset by cash paid for interest. The cash used in operating activities for the year ended December 31, 2024 was primarily attributable to payment of general and administrative and professional fees, cash paid for interest, and settlement of liabilities and changes in working capital, which offset NOI results for the period.

Cash flows from investing activities

During the year ended December 31, 2025, $16.3 million of cash was provided by investing activities compared to $4.2 million provided by investing activities during the year ended December 31, 2024, an increase of $12.1 million. The cash provided by investing activities for the year ended December 31, 2025 was primarily attributable to proceeds from the sale of four parking assets in 2025 and the collection of a note receivable, partially offset by routine and strategic capital expenditures. The cash provided by investing activities during the year ended December 31, 2024 was primarily attributable to proceeds from the sale of three of our parking assets in 2024 partially offset by routine and strategic capital expenditures.

Cash flows from financing activities

During the year ended December 31, 2025, $17.7 million of cash was used in financing activities compared to $4.3 million used in financing activities during the year ended December 31, 2024, an increase of $13.4 million. The cash used in financing activities for the year ended December 31, 2025 was primarily attributable to principal debt payments and loan repayment and refinancing, including related loan fees, as well as distribution and redemption payments on the Series 1 Preferred Stock and Series A Preferred Stock and repurchases of common stock through the share repurchase plan, partially offset by draws on the Line of Credit. The cash used in financing activities during the year ended December 31, 2024 was primarily attributable to the proceeds from the Line of Credit, refinancing of the Revolving Credit Facility and certain notes payable and related loan fees, as well as distribution and redemption payments on the Series 1 Preferred Stock and Series A Preferred Stock.

Critical Accounting Estimates

Our accounting estimates have been established in conformity with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If management's judgment or interpretation of the facts and circumstances relating to various transactions is different, it is possible that different accounting policies will be applied, or different amounts of assets, liabilities, revenues and expenses will be recorded, resulting in a different presentation of the financial statements or different amounts reported in the financial statements.

Additionally, other companies may utilize different estimates that may impact comparability of our results of operations to those of companies in similar businesses. Below is a discussion of the accounting policies that management considers to be most critical. These policies require complex judgment in their application or estimates about matters that are inherently uncertain.

Impairment of Long-Lived Assets

On a quarterly basis, we employ a multi-step approach to assess our real estate assets for possible impairment and record any impairment charges identified. The first step is the identification of potential triggering events, such as declines in NOI and performance compared to internal forecasts. If the results of this first step indicate a triggering event for a property, we proceed to the second step, utilizing an undiscounted cash flow model to identify potential impairment. The undiscounted cash flow model requires us to utilize judgement in the selection of the anticipated holding periods, growth rates, capitalization rates and expected future cash flows. If the undiscounted cash flows are less than the net book value of the property as of the balance sheet date, we estimate the fair value of the asset. If the determined fair value is lower than the net book value of the property, we record an impairment charge.

Valuing our investment in real estate assets in both the second and third step of our impairment testing requires us to utilize a significant amount of judgment in the inputs that we select. We select these inputs based on all available evidence and using techniques that are commonly employed by other real estate companies. To estimate fair value we may use internally developed valuation models or independent third-parties where available. In either case, the fair value of real estate may be based on a number of approaches including the income capitalization approach, sales comparable approach or discounted cash flow approach. We utilize market data such as sales price per stall on comparable recent real estate transactions to estimate the fair value of the real estate assets. We also utilize expected net sales proceeds to estimate the fair value of any properties that are actively being marketed for sale.

We believe that our real estate valuation estimates are based on reasonable assumptions. However, the use of inappropriate estimates could result in an incorrect valuation of our real estate properties, which could result in material impairment losses in the future.