The following table summarizes our cash flows for the periods indicated (in thousands): | --- | --- | --- | --- | --- | |-------------------------------------------------------------------------------|-------|-----------------------|----------|------------| | Continuing operations | | Year Ended \n2022 | December | 31, \n2021 | | Net cash provided by (used in) operating activities | $ | 8,397 | $ | 8,688 | | Net cash provided by (used in) investing activities | | (2,099) | | 1,276 | | Net cash provided by ( ...

TABLE OF CONTENTS UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________________________________________________ FORM 10-Q __________________________________________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period fr ...

TABLE OF CONTENTS UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________________________________________________ FORM 10-Q __________________________________________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ...

Revenue and Income - Revenue for the three months ended March 31, 2022, was $8.731 million, a 27.6% increase from $6.840 million in the same period of 2021[109]. - The company reported a net income of $1.747 million for the three months ended March 31, 2022, compared to a net income of $247,000 in the same period of 2021[109]. - Net income from continuing operations for Q1 2022 was $2.014 million, compared to $390 thousand in Q1 2021, representing a significant increase[120]. - Adjusted EBITDA for Q1 2022 was $1.606 million, up from $617 thousand in Q1 2021, indicating strong operational performance[120]. Revenue Breakdown - Asset management revenue increased by $1.104 million (22.6%) to $5.997 million, while property management revenue rose by $501,000 (30.7%) to $2.131 million[110]. - Other income increased by $244,000, primarily due to higher mark-to-market valuations of fixed-rate debt associated with equity method investments[113]. Operating Costs and Expenses - Total operating costs and expenses for the three months ended March 31, 2022, were $7.366 million, reflecting a 15.1% increase from $6.397 million in 2021[112]. Cash Flow and Liquidity - Cash and cash equivalents as of March 31, 2022, were $11.6 million, with an additional $4.5 million available from credit facilities, reflecting adequate liquidity[121]. - Net cash used in operating activities decreased to $1.952 million in Q1 2022 from $2.040 million in Q1 2021, showing improved cash flow management[125]. - Total net decrease in cash and cash equivalents for Q1 2022 was $4.263 million, compared to a decrease of $375 thousand in Q1 2021, indicating cash flow challenges[125]. - The company has historically financed operations through internally generated funds and credit facilities, emphasizing a reliance on operational cash flow[123]. - Future liquidity may be affected by credit availability, cash flow from operations, and working capital management[122]. - The company believes it has adequate liquidity to fund current operations and meet existing debt commitments[124]. Investments and Development - The company completed the divestiture of Comstock Environmental Services for approximately $1.4 million, enhancing its focus on core asset management business[104]. - The managed portfolio includes 36 operating assets, comprising 15 commercial assets totaling approximately 2.2 million square feet and 6 multifamily assets totaling 1,636 units[99]. - The development pipeline consists of 12 assets, including approximately 1.4 million square feet of planned commercial development and approximately 2,600 multifamily units[99]. Risk Management and Strategy - The company expects to maintain the ability to manage risk and pursue growth opportunities in the greater Washington, D.C. area, leveraging over 35 years of experience[107]. - The benefit from income taxes was $0.5 million in 2022, attributed to a release of a deferred tax asset valuation allowance[114]. Financing Activities - Net cash used in investing activities was $1.785 million in Q1 2022, a shift from $1.653 million provided in Q1 2021, primarily due to a $2.7 million real estate investment[129]. - Net cash used in financing activities increased to $297 thousand in Q1 2022 from $105 thousand in Q1 2021, driven by changes in loan activity and tax payments[130].

Revenue and Income - Revenue for 2021 was $31.1 million, an increase of 38.3% compared to $22.5 million in 2020[104] - Net income from continuing operations for 2021 was $16.0 million, significantly up from $2.1 million in 2020[102] - The asset management revenue increased by 40.4% to $22.5 million in 2021, driven by a $3.0 million increase in base asset management fees[104] - Net income from continuing operations for the year ended December 31, 2021, was $16,039,000, compared to $2,141,000 for the year ended December 31, 2020, representing a significant increase[120] - Adjusted EBITDA for 2021 was $5,798,000, up from $3,445,000 in 2020, indicating a growth of approximately 68.5%[120] Operating Costs and Expenses - Operating costs and expenses increased by 31.2% in 2021, totaling $26.0 million compared to $19.8 million in 2020[105] - Net cash provided by operating activities increased by $5.1 million in 2021, driven by a $2.8 million increase in net working capital and a $2.3 million rise in net income from continuing operations[123] Tax Benefits - The benefit from income taxes was $11.2 million in 2021, compared to an immaterial expense in 2020, primarily due to a partial release of a deferred tax asset valuation allowance[107] - The company recorded an $11.3 million income tax benefit in Q2 2021, representing a partial release of the valuation allowance on deferred tax assets[136] Assets and Development - The company managed a portfolio comprising 34 operating assets, including 14 commercial assets totaling approximately 2.2 million square feet and 6 multifamily assets totaling 1,636 units as of December 31, 2021[95] - The company has 18 development pipeline assets consisting of approximately 2.0 million square feet of planned commercial development and approximately 1,900 multifamily units[95] Cash and Liquidity - Cash and cash equivalents as of December 31, 2021, were $15.8 million, with an additional $4.5 million available from the Credit Facility[116] - The total net increase in cash from continuing operations for 2021 was $9,737,000, compared to $5,000,000 in 2020[128] - The company has adequate liquidity and capital availability to fund its current operations and meet existing debt commitments[119] - The company primarily financed its operations through internally generated funds and borrowings from credit facilities[118] Goodwill and Impairment - A total of $1.7 million in goodwill impairment charges was recorded in 2021, reflecting a significant write-off of the remaining goodwill balance[133] Share Repurchase - As of December 31, 2021, there were 404,000 shares of Class A common stock available for repurchase under the share repurchase program[122] Strategic Focus - The company is focused on leveraging its 30-plus years of experience in the greater Washington, D.C. area to capitalize on positive growth trends[100] Sale of Assets - The company completed the sale of Comstock Environmental Services for approximately $1.4 million on March 31, 2022[97] Investing Activities - Net cash provided by investing activities decreased by $0.4 million in 2021, primarily due to a $2.0 million real estate investment, partially offset by a $1.7 million increase in distributions from real estate ventures[124]

TABLE OF CONTENTS UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________________________________________________ FORM 10-Q __________________________________________________________________________ ☒ Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2021 or ☐ Transition Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period fr ...

[PART I – FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This part presents the unaudited condensed consolidated financial statements and management's discussion and analysis for Comstock Holding Companies, Inc [ITEM 1. FINANCIAL STATEMENTS (unaudited)](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20%28unaudited%29) Presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, equity, and cash flows, with detailed accounting notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position, detailing assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | |:----------------------------|------------------------------|----------------------------------| | Total Assets | $40,366 | $28,579 | | Total Liabilities | $17,582 | $17,364 | | Total Stockholders' Equity | $22,784 | $11,215 | - Total assets increased by **$11.787 million (41.2%)** from December 31, 2020, to June 30, 2021, primarily driven by an increase in cash and cash equivalents and deferred income taxes[10](index=10&type=chunk) - Total stockholders' equity significantly increased by **$11.569 million (103.2%)** from December 31, 2020, to June 30, 2021, largely due to the net income recognized during the period[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Details the company's financial performance over specific periods, including revenues, expenses, and net income Condensed Consolidated Statements of Operations (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | |:----------------------------------------------------|----------------------------------|----------------------------------|--------------------------------|--------------------------------| | Revenues | $6,324 | $4,505 | $13,164 | $9,939 | | Operating income | $492 | $901 | $935 | $1,382 | | Income from continuing operations before income tax | $463 | $852 | $837 | $1,181 | | Income tax benefit (expense) | $11,316 | $(13) | $11,314 | $(14) | | Net income | $11,205 | $1,180 | $11,452 | $1,168 | | Basic EPS (Continuing operations) | $1.42 | $0.10 | $1.47 | $0.13 | | Diluted EPS (Continuing operations) | $1.29 | $0.10 | $1.34 | $0.13 | - Net income for the three months ended June 30, 2021, increased significantly to **$11.205 million** from **$1.180 million** in the prior year, primarily due to a substantial income tax benefit of **$11.316 million**[12](index=12&type=chunk) - Revenues increased by **40.4%** for the three months and **32.4%** for the six months ended June 30, 2021, compared to the prior year, driven by increased reimbursable costs under the 2019 AMA and growth in assets under management[12](index=12&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) - Operating income decreased for both the three-month and six-month periods, despite revenue growth, indicating higher operating expenses relative to revenue[12](index=12&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Outlines changes in the company's equity accounts, reflecting net income, stock transactions, and other comprehensive income Condensed Consolidated Statements of Changes in Stockholders' Equity (in thousands) | Metric (in thousands) | Balance at Dec 31, 2020 | Balance at June 30, 2021 | |:--------------------------------|-------------------------|--------------------------| | Series C Preferred Stock Amount | $6,765 | $6,765 | | Class A Common Stock Amount | $79 | $81 | | Class B Common Stock Amount | $2 | $2 | | Additional Paid-in Capital | $200,147 | $200,262 | | Treasury Stock | $(2,662) | $(2,662) | | Accumulated Deficit | $(193,116) | $(181,664) | | Total Stockholders' Equity | $11,215 | $22,784 | - Total stockholders' equity increased from **$11.215 million** at December 31, 2020, to **$22.784 million** at June 30, 2021, primarily driven by net income of **$11.205 million** for the quarter and **$11.452 million** for the six months ended June 30, 2021[14](index=14&type=chunk) - The accumulated deficit decreased from **$(193.116) million** to **$(181.664) million**, reflecting the positive net income during the period[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Reports the cash generated and used by the company from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | |:----------------------------------------------------------|--------------------------------|--------------------------------| | Net cash provided by operating activities | $822 | $628 | | Net cash provided by investing activities | $2,483 | $674 | | Net cash used in financing activities | $(168) | $(246) | | Net cash provided by (used in) discontinued operations | $36 | $(1,424) | | Net increase (decrease) in cash and cash equivalents | $3,173 | $(368) | | Cash and cash equivalents, end of period | $10,205 | $3,143 | - Net cash provided by operating activities increased to **$822 thousand** for the six months ended June 30, 2021, from **$628 thousand** in the prior year, primarily due to non-cash expenses and a decrease in related party receivables[20](index=20&type=chunk)[132](index=132&type=chunk) - Net cash provided by investing activities significantly increased to **$2.483 million**, mainly from distributions from equity method investments[20](index=20&type=chunk)[132](index=132&type=chunk) - The company experienced a net increase in cash and cash equivalents of **$3.173 million**, resulting in an ending cash balance of **$10.205 million** as of June 30, 2021[20](index=20&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and additional information supporting the condensed consolidated financial statements [1. ORGANIZATION AND BASIS OF PRESENTATION](index=8&type=section&id=1.%20ORGANIZATION%20AND%20BASIS%20OF%20PRESENTATION) Describes the company's business, recent operational changes, and the accounting basis for its financial statements - Comstock Holding Companies, Inc. (CHCI) is a multi-faceted asset management and services company primarily focused in the Washington, D.C. Metropolitan Statistical Area[24](index=24&type=chunk) - In February 2021, the Company amended the entity names for several subsidiaries (e.g., CDS Asset Management, LC to CHCI Asset Management, LC) as part of operational efficiency enhancements[24](index=24&type=chunk) - In April 2021, the Company's Paycheck Protection Program (PPP) Loan of **$1.95 million** was forgiven by the SBA[28](index=28&type=chunk)[73](index=73&type=chunk) - On June 16, 2021, the Company made a strategic decision to sell Comstock Environmental Services, LLC (CES) to focus on its core asset management business, classifying CES as a discontinued operation[28](index=28&type=chunk)[40](index=40&type=chunk) [2. INVESTMENTS IN UNCONSOLIDATED ENTITIES](index=9&type=section&id=2.%20INVESTMENTS%20IN%20UNCONSOLIDATED%20ENTITIES) Details the company's equity method investments in real estate ventures and a title insurance joint venture - The Company reports equity method investments in real estate ventures at fair value, adjusting the investment each period by the change in fair value[34](index=34&type=chunk) Investments in Unconsolidated Entities (in millions) | Investment | Fair Value (June 30, 2021) | Fair Value (Dec 31, 2020) | Distributions (6 months ended June 30, 2021) | Change in Fair Value (6 months ended June 30, 2021) | |:-----------|:---------------------------|:--------------------------|:---------------------------------------------|:----------------------------------------------------| | Investors X| $2.5 million | $5.1 million | $2.5 million | $(107) thousand loss | | The Hartford| $1.2 million | $1.2 million | $0 | $(24) thousand loss | | Total | $3.652 million | $6.307 million | $(2,543) thousand | $(112) thousand loss | - The Company also accounts for its interest in a title insurance joint venture using the equity method, with earnings of **$18 thousand** for the six months ended June 30, 2021[39](index=39&type=chunk) [3. DISCONTINUED OPERATIONS](index=10&type=section&id=3.%20DISCONTINUED%20OPERATIONS) Explains the classification and financial impact of Comstock Environmental Services (CES) as a discontinued operation - On June 16, 2021, Comstock Environmental Services (CES) was classified as a discontinued operation to focus on core asset management, with the sale expected within 12 months[40](index=40&type=chunk) Discontinued Operations (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | |:----------------------------------------------------|----------------------------------|----------------------------------|--------------------------------|--------------------------------| | Revenue | $2,626 | $1,960 | $4,103 | $3,491 | | Operating income (loss) | $(117) | $396 | $(261) | $107 | | Loss on classification as held for sale | $(325) | $0 | $(325) | $0 | | Income (loss) from discontinued operations | $(443) | $382 | $(587) | $89 | - The loss from discontinued operations for the three and six months ended June 30, 2021, was primarily due to a **$325 thousand** impairment loss recognized on the reclassification of CES to held for sale[42](index=42&type=chunk)[129](index=129&type=chunk) [4. GOODWILL](index=11&type=section&id=4.%20GOODWILL) Discusses the company's goodwill balance and the impact of the CES classification on its valuation - Goodwill represents the excess of the aggregate purchase price over the fair value of net assets acquired in a business acquisition[43](index=43&type=chunk) - A **$325 thousand** charge was recognized as a loss on classification as held for sale in income from discontinued operations, resulting in an adjustment to goodwill, due to CES being classified as a discontinued operation[44](index=44&type=chunk) Goodwill (in thousands) | Metric | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | |:---------|------------------------------|----------------------------------| | Goodwill | $1,377 | $1,702 | [5. LEASES](index=12&type=section&id=5.%20LEASES) Outlines the company's accounting for leases, including ROU assets, lease liabilities, and operating lease costs - The Company recognizes ROU assets and lease liabilities for leases with terms exceeding twelve months, electing a practical expedient not to recognize for short-term leases[46](index=46&type=chunk) - The incremental borrowing rate for the new ten-year corporate office lease, which commenced November 1, 2020, was determined to be **4.25%**[46](index=46&type=chunk) Operating Lease Cost (in thousands) | Operating Lease Cost (in thousands) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | |:------------------------------------|----------------------------------|----------------------------------|--------------------------------|--------------------------------| | Fixed lease cost | $249 | $0 | $497 | $0 | | Variable lease cost | $88 | $0 | $163 | $0 | | Total operating lease cost | $337 | $0 | $660 | $0 | - Operating lease costs are reflected within 'Direct costs' in the Condensed Consolidated Statements of Operations as they are reimbursable under the 2019 Asset Management Agreement[48](index=48&type=chunk) [6. REVENUE](index=13&type=section&id=6.%20REVENUE) Describes the company's revenue streams, primarily from asset management services, and the timing of revenue recognition - The Company's primary revenue streams include Asset Management, Property Management, Capital Markets, Leasing, and Project & Development Services[51](index=51&type=chunk) - Asset Management services, primarily for the CDS Portfolio, involve comprehensive real estate asset management with fees based on a cost-plus or market-rate structure, whichever is higher[52](index=52&type=chunk) Revenue by Customer (in thousands) | Revenue by Customer (in thousands) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | |:-----------------------------------|----------------------------------|----------------------------------|--------------------------------|--------------------------------| | Related party | $6,268 | $4,493 | $13,093 | $9,891 | | Commercial | $56 | $12 | $71 | $48 | | Total Revenue | $6,324 | $4,505 | $13,164 | $9,939 | - For the six months ended June 30, 2021, **$13.1 million** of revenue was recognized over time, while **$54 thousand** was recognized at a point in time[61](index=61&type=chunk)[62](index=62&type=chunk) [7. DEBT](index=14&type=section&id=7.%20DEBT) Details the company's debt obligations, including notes payable to affiliates and financing for insurance Notes Payable (in thousands) | Notes Payable (in thousands) | June 30, 2021 | December 31, 2020 | |:-----------------------------------------|---------------|-------------------| | Notes payable - due to affiliates, unsecured | $5,500 | $5,500 | | Unsecured financing | $48 | $5 | | Total notes payable | $5,548 | $5,505 | - The Company has a **$10.0 million** Revolving Capital Line of Credit with an affiliate, from which **$5.5 million** was borrowed in March 2020, maturing on April 30, 2023, with an effective interest rate of **4.25%**[67](index=67&type=chunk) - Interest payments for all debt facilities decreased by **48.6%** to **$116 thousand** for the six months ended June 30, 2021, compared to **$226 thousand** in the prior year, primarily due to the retirement of the Comstock Growth Fund loan in 2020[69](index=69&type=chunk)[127](index=127&type=chunk) [8. CORONAVIRUS AID RELIEF AND ECONOMIC SECURITY ACT](index=15&type=section&id=8.%20CORONAVIRUS%20AID%20RELIEF%20AND%20ECONOMIC%20SECURITY%20ACT) Explains the company's Paycheck Protection Program (PPP) Loan, its forgiveness, and accounting treatment - In April 2020, the Company received **$1.95 million** under the Paycheck Protection Program (PPP) Loan[73](index=73&type=chunk) - The PPP Loan was fully forgiven by the SBA in April 2021[73](index=73&type=chunk) - The Company recognized PPP funding as a contra-expense during the three months ended June 30, 2020, when qualified expenses were incurred[73](index=73&type=chunk) [9. COMMITMENTS AND CONTINGENCIES](index=16&type=section&id=9.%20COMMITMENTS%20AND%20CONTINGENCIES) Addresses the company's legal proceedings and potential liabilities, noting no material impact - The Company is not subject to any material legal proceedings as of June 30, 2021[74](index=74&type=chunk) - Management believes that any potential liability from pending legal actions will not have a material adverse effect on the Company's financial position, operating results, and cash flows[74](index=74&type=chunk) - The Company has obtained adequate insurance coverage, rights to indemnification, or established appropriate reserves for legal proceedings[74](index=74&type=chunk) [10. FAIR VALUE DISCLOSURES](index=16&type=section&id=10.%20FAIR%20VALUE%20DISCLOSURES) Provides fair value estimates for financial instruments and investments, including the impact of CES reclassification - The carrying amounts of cash equivalents, accounts receivable, and accounts payable are reasonable estimates of their fair values due to their short maturities[75](index=75&type=chunk) - Investments in real estate ventures are reported at fair value using Level 3 inputs, such as discount rates, capitalization rates, rental and expense growth rates, and asset-specific market borrowing rates[78](index=78&type=chunk) Investments in Real Estate Ventures at Fair Value (in thousands) | Metric (in thousands) | June 30, 2021 | December 31, 2020 | |:--------------------------------------|---------------|-------------------| | Investments in real estate ventures at fair value | $3,700 | $6,300 | - Due to the classification of CES as a discontinued operation, an interim goodwill impairment test was performed, resulting in a **$325 thousand** loss on classification as held for sale[79](index=79&type=chunk) [11. RESTRICTED STOCK, STOCK OPTIONS AND OTHER STOCK PLANS](index=17&type=section&id=11.%20RESTRICTED%20STOCK%2C%20STOCK%20OPTIONS%20AND%20OTHER%20STOCK%20PLANS) Details the company's stock-based compensation, including restricted stock awards and unrecognized compensation costs - The Company issued **165,809** restricted stock awards to employees during the six months ended June 30, 2021, a decrease from **630,352** in the prior year[81](index=81&type=chunk) Stock-based Compensation Expense (in thousands) | Stock-based Compensation Expense (in thousands) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | |:------------------------------------------------|----------------------------------|----------------------------------|--------------------------------|--------------------------------| | General and administrative | $154 | $182 | $306 | $373 | - As of June 30, 2021, there was **$1.2 million** of unrecognized compensation cost related to stock options and restricted stock awards, with a weighted-average remaining contractual term of **6 years** for unexercised stock options[83](index=83&type=chunk) [12. INCOME (LOSS) PER SHARE](index=17&type=section&id=12.%20INCOME%20%28LOSS%29%20PER%20SHARE) Explains the calculation of basic and diluted income (loss) per share, including the treatment of anti-dilutive securities - Basic and diluted income (loss) per share are calculated using weighted average shares and share equivalents from continuing and discontinued operations[84](index=84&type=chunk) - Restricted stock awards, stock options, and warrants are included in diluted EPS calculations using the treasury stock method, unless their inclusion would be anti-dilutive[84](index=84&type=chunk) Anti-dilutive Securities (in thousands) | Anti-dilutive Securities (in thousands) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | |:----------------------------------------|----------------------------------|----------------------------------|--------------------------------|--------------------------------| | Restricted stock awards | 0 | 2 | 0 | 3 | | Stock options | 33 | 193 | 39 | 209 | | Warrants | 89 | 657 | 116 | 688 | | Total | 122 | 852 | 155 | 900 | [13. RELATED PARTY TRANSACTIONS](index=17&type=section&id=13.%20RELATED%20PARTY%20TRANSACTIONS) Describes various transactions with related parties, including leases, asset management agreements, and other service contracts - The Company leases its corporate headquarters from an affiliate controlled and owned by its CEO and family under a ten-year agreement effective November 1, 2020[86](index=86&type=chunk) - The 2019 Amended Asset Management Agreement (AMA) with CDS (an affiliate owned by the CEO) covers comprehensive asset management services for the Anchor Portfolio, including Reston Station and Loudoun Station[90](index=90&type=chunk)[113](index=113&type=chunk) - Under the 2019 AMA, fees are the greater of a market rate (e.g., **2.5%** of revenues, **4%** of construction costs) or a cost-plus fee (employment expenses, public listing costs, fixed annual payment of **$1 million**), plus additional incentive fees[90](index=90&type=chunk) Related Party Receivables (in thousands) | Related Party Receivables (in thousands) | June 30, 2021 | December 31, 2020 | |:-----------------------------------------|---------------|-------------------| | Receivables from related parties | $3,038 | $3,568 | - The Company also has residential, commercial, and parking property management agreements, construction management agreements with CDS Entities, and a Business Management Agreement with Investors X for wind-down services[91](index=91&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk) [14. INCOME TAXES](index=21&type=section&id=14.%20INCOME%20TAXES) Discusses the company's income tax benefit, effective tax rate, and deferred tax assets, including the valuation allowance release - The Company recognized a deferred income tax benefit of **$11.3 million** for both the three and six months ended June 30, 2021, a significant change from prior year expenses[99](index=99&type=chunk)[128](index=128&type=chunk) - The effective tax rate for the six months ended June 30, 2021, was **(8191.72)%**, a substantial decrease from **(0.85)%** in the prior year, due to a partial release of the valuation allowance[99](index=99&type=chunk) - The partial release of the valuation allowance was based on sufficient positive evidence, including cumulative positive results since 2018 and the long-term 2019 AMA, establishing a reasonable expectation of future taxable income[99](index=99&type=chunk) Deferred Tax Assets/Liabilities (in thousands) | Deferred Tax Assets/Liabilities (in thousands) | June 30, 2021 | December 31, 2020 | |:-----------------------------------------------|---------------|-------------------| | Net operating loss and tax credit carryforwards| $37,841 | $37,899 | | Total Deferred tax assets | $38,819 | $38,862 | | Less - valuation allowance | $(27,500) | $(38,780) | | Net deferred tax assets | $11,319 | $82 | | Net deferred tax liabilities | $(9) | $(103) | | Net deferred tax assets (liabilities) | $11,310 | $(21) | - The Company has approximately **$146.0 million** in federal and state Net Operating Losses (NOLs), which will begin expiring in 2027 if unused[101](index=101&type=chunk) [15. SEGMENT DISCLOSURES](index=22&type=section&id=15.%20SEGMENT%20DISCLOSURES) Identifies the company's single reportable segment, Asset Management, following the divestiture of CES - As of June 30, 2021, the Company operates through one reportable segment: Asset Management, following the classification of CES as a discontinued operation[102](index=102&type=chunk) - The Asset Management segment provides management services to real estate owners and businesses, including apartments, hotels, office buildings, retail stores, and mixed-use developments[102](index=102&type=chunk) - The managed properties are primarily located along the Washington, D.C. Metro Silver Line in Fairfax and Loudoun Counties, with additional projects in Maryland and Virginia[102](index=102&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=23&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management's analysis of financial condition and operations, covering business overview, strategic outlook, revenue, expenses, and liquidity [Cautionary Notes Regarding Forward-looking Statements](index=23&type=section&id=Cautionary%20Notes%20Regarding%20Forward-looking%20Statements) Warns readers about inherent risks and uncertainties associated with forward-looking statements in the report - The report includes forward-looking statements, identifiable by words like 'anticipate,' 'believe,' 'estimate,' and 'expect,' which are subject to inherent risks and uncertainties beyond the Company's control[106](index=106&type=chunk) - Key factors that could cause actual results to differ materially include general economic and market conditions, changes in real estate markets, ability to attract clients, regulatory actions, and public health emergencies like COVID-19[107](index=107&type=chunk) - The Company undertakes no obligation to update or revise any forward-looking statements, except as required by law[108](index=108&type=chunk) [Overview](index=23&type=section&id=Overview) Provides a high-level description of the company's business, its assets under management, and revenue generation - Comstock Holding Companies, Inc. (CHCI) is a developer, operator, and asset manager of mixed-use and transit-oriented development properties in the greater Washington, D.C. metropolitan area[110](index=110&type=chunk) - As of June 30, 2021, the Company's Assets Under Management (AUM) included **26 operating assets** (**1.9 million sq ft commercial**, **1,123 multifamily units**, **8,000+ parking spaces**), one commercial asset under construction (**250,000 sq ft**, **99% pre-leased**), and **18 development pipeline assets**[110](index=110&type=chunk)[113](index=113&type=chunk) - Revenue is generated from asset management services (property management, development, leasing, acquisition, debt/equity origination) and co-investments, with performance-based incentive compensation expected from the Anchor Portfolio[113](index=113&type=chunk) [Outlook](index=25&type=section&id=Outlook) Presents management's perspective on future performance, market positioning, and strategic focus - The Company believes its Anchor Portfolio is well-positioned to withstand potential negative impacts of the COVID-19 pandemic on the commercial real estate market[114](index=114&type=chunk) - Management is aligned with shareholder interests and committed to enhancing shareholder value, believing the Company is properly staffed and capable of managing risk and pursuing growth opportunities[114](index=114&type=chunk) - The Company's operations are primarily focused on the greater Washington, D.C. region, leveraging over **30 years** of experience in acquiring, developing, and managing high-quality real estate assets[114](index=114&type=chunk) [Managed Portfolio](index=25&type=section&id=Managed%20Portfolio) Describes key properties within the company's managed portfolio, including their development status and services provided - Reston Station: A **5 million square foot** mixed-use, transit-oriented development in Reston, VA, with **1.7 million square feet** completed, including residential, office, retail, and parking. The Company provides full real estate and asset management services under the 2019 AMA[116](index=116&type=chunk) - Loudoun Station: Loudoun County's first Metro-connected development, with **1 million square feet** completed, including residential, office, retail, and a **1,500-space** Metro commuter parking garage. The Company provides various services under the 2019 AMA[117](index=117&type=chunk) - Herndon Station: A planned development in Herndon, VA, including up to **340,000 square feet** of residential, retail, entertainment, and a **700-space** parking garage, with the Company providing asset management and development services under the 2019 AMA[118](index=118&type=chunk) - International Gateway: A privately owned portfolio of two mixed-use retail/office buildings in Tysons Corner, Virginia, for which the Company has provided asset management, property management, leasing, and consulting services since 2018[119](index=119&type=chunk) - The Hartford Building: A Class-A office building in Arlington County, Virginia, acquired in late 2019 in partnership with affiliates. The Company arranged for a majority ownership stake sale to DivcoWest in February 2020 and secured asset and property management agreements[120](index=120&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Analyzes the company's financial performance, detailing changes in revenue, direct costs, and other key expenses Results of Operations (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | |:----------------------------------------------------|----------------------------------|----------------------------------|--------------------------------|--------------------------------| | Revenue | $6,324 | $4,505 | $13,164 | $9,939 | | Direct costs | $5,502 | $3,213 | $11,580 | $7,849 | | General and administrative | $322 | $390 | $631 | $707 | | Selling and marketing | $8 | $1 | $18 | $1 | | Interest expense | $(58) | $(77) | $(116) | $(226) | | Income tax benefit (expense) | $11,316 | $(13) | $11,314 | $(14) | | Income (loss) from discontinued operations | $(443) | $382 | $(587) | $89 | - Revenue increased by **40.4%** for the three months and **32.4%** for the six months ended June 30, 2021, primarily due to increased reimbursable costs under the 2019 AMA and growth in assets under management, partially offset by a **$1.4 million** reduction in prior period revenue due to the PPP loan[121](index=121&type=chunk)[122](index=122&type=chunk) - Direct costs increased by **71.3%** for the three months and **47.5%** for the six months, mainly due to increased personnel expenses from growth in property and asset management businesses, with prior period costs reduced by **$1.9 million** from the PPP loan[124](index=124&type=chunk) - General and administrative expenses decreased by **10.7%** for the six months, primarily due to a decrease in stock compensation expense[125](index=125&type=chunk) - Interest expense decreased by **24.6%** for the three months and **48.6%** for the six months, mainly due to the retirement of the Comstock Growth Fund loan in the prior year[127](index=127&type=chunk) - A significant deferred income tax benefit of **$11.3 million** was recognized for both periods due to the release of the valuation allowance against NOL carryforwards[128](index=128&type=chunk) - Loss from discontinued operations for the three and six months ended June 30, 2021, was **$443 thousand** and **$587 thousand**, respectively, primarily due to an impairment loss on reclassification of CES to held for sale[129](index=129&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses the company's ability to generate and manage cash, including sources of funding and cash flow activities - The Company finances its operations, capital expenditures, and acquisitions through internally generated funds, distributions from equity method investments, and credit facilities[131](index=131&type=chunk) - Net cash provided by operating activities for the six months ended June 30, 2021, was **$822 thousand**, primarily from increases in non-cash expenses and a decrease in related party receivables, offset by deferred income taxes and personnel costs[132](index=132&type=chunk) - Net cash provided by investing activities was **$2.5 million**, mainly from distributions from equity method investments[132](index=132&type=chunk) - Net cash used in financing activities was **$168 thousand**, primarily due to taxes paid related to net share settlement of equity awards, net of proceeds from notes payable[132](index=132&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=29&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) No quantitative or qualitative disclosures about market risk are applicable for the reporting period - The Company has no quantitative and qualitative disclosures about market risk for the period[136](index=136&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=29&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Disclosure controls and procedures were effective as of June 30, 2021, with no material changes in internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of June 30, 2021[137](index=137&type=chunk) - Control systems, due to inherent limitations and resource constraints, can only provide reasonable, not absolute, assurance against error and fraud[138](index=138&type=chunk) - No changes occurred in internal control over financial reporting during the quarter ended June 30, 2021, that materially affected or are reasonably likely to materially affect it[141](index=141&type=chunk) [PART II – OTHER INFORMATION](index=31&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This part includes legal proceedings, exhibits, and required signatures for the report [ITEM 1. LEGAL PROCEEDINGS](index=31&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Legal proceedings information is incorporated by reference from Note 9, indicating no material legal actions - Information regarding legal proceedings is incorporated by reference from Note 9 - Commitments and Contingencies[144](index=144&type=chunk) [ITEM 6. EXHIBITS](index=33&type=section&id=ITEM%206.%20EXHIBITS) Lists all exhibits filed with Form 10-Q, including organizational documents, stock certificates, CEO/CFO certifications, and XBRL documents - The exhibits include Amended and Restated Certificate of Incorporation and Bylaws, Certificates of Designation for various preferred stock series, and Specimen Stock Certificate[146](index=146&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are filed herewith[146](index=146&type=chunk) - Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, Presentation Linkbase Documents) are included[146](index=146&type=chunk) [SIGNATURES](index=34&type=section&id=SIGNATURES) Report signed on August 16, 2021, by the Chairman, CEO, and CFO, as required by the Securities Exchange Act of 1934 - The report was signed on August 16, 2021[151](index=151&type=chunk)[152](index=152&type=chunk) - Signatories include Christopher Clemente, Chairman and Chief Executive Officer (Principal Executive Officer), and Christopher Guthrie, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)[151](index=151&type=chunk)

TABLE OF CONTENTS UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________________________________________________ FORM 10-Q __________________________________________________________________________ ☒ Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2021 or ☐ Transition Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from t ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________ FORM 10-K ____________________________________ (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-32375 ___________________________________ ...

TABLE OF CONTENTS UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________________________________________________ FORM 10-Q __________________________________________________________________________ ☒ Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2020 or ☐ Transition Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period fr ...