CMCT(CMCT) - 2025 Q1 - Quarterly Report

markdown [PART I. Financial Information](index=3&type=section&id=PART%20I.%20Financial%20Information) This section covers the unaudited financial statements, management's analysis, market risk, and internal controls [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Q1 2025 and 2024, covering balance sheets, operations, equity, cash flows, and notes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) The Consolidated Balance Sheets show a slight decrease in total assets from $889.6 million to $882.3 million as of March 31, 2025 Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$882,343** | **$889,555** | | Investments in real estate, net | $706,537 | $709,194 | | Cash and cash equivalents | $19,772 | $20,262 | | **Total Liabilities** | **$566,909** | **$562,492** | | Debt, net | $512,658 | $505,732 | | **Total Equity** | **$294,635** | **$306,264** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) For Q1 2025, the company reported a net loss of $6.3 million, an increase from $3.9 million in Q1 2024 Q1 2025 vs. Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenues | $32,295 | $33,998 | | Total Expenses | $37,295 | $37,307 | | **Net Loss** | **$(6,272)** | **$(3,905)** | | Net Loss Attributable to the Company | $(6,114) | $(3,730) | | Redeemable preferred stock dividends | $(5,484) | $(7,759) | | **Net Loss Attributable to Common Stockholders** | **$(11,898)** | **$(12,295)** | | **Basic & Diluted EPS** | **$(20.73)** | **$(125.46)** | [Consolidated Statements of Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Equity) Total equity decreased from $306.3 million to $294.6 million in Q1 2025, driven by net loss and dividends - Key activities impacting equity in Q1 2025 included a net loss of **$6.1 million**, payment of preferred stock dividends totaling **$5.5 million**, and the redemption of Series A and A1 preferred stock paid for with common stock[13](index=13&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations decreased to $1.2 million in Q1 2025, while investing activities used $5.2 million Q1 2025 vs. Q1 2024 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $1,208 | $1,616 | | Net Cash Used in Investing Activities | $(5,157) | $(393) | | Net Cash Provided by Financing Activities | $206 | $191 | | **Net (Decrease) Increase in Cash** | **$(3,743)** | **$1,414** | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, **REIT** structure, reverse stock splits, debt, and related-party transactions - The company is a **REIT** primarily focused on acquiring, developing, and operating multifamily and Class A/creative office properties, and also owns a hotel and an SBA lending platform[17](index=17&type=chunk) - The company effected two reverse stock splits in 2025: a **1-for-10 split** in January and a **1-for-25 split** in April All share and per-share amounts are adjusted retroactively[19](index=19&type=chunk)[21](index=21&type=chunk) - The company recorded a loss of **$1.2 million** from its investments in unconsolidated joint ventures for Q1 2025, a significant increase from the **$0.3 million** loss in Q1 2024[81](index=81&type=chunk) - As of March 31, 2025, the company was **not in compliance with two covenants** under its 2022 Credit Facility The facility was subsequently **paid off in full and terminated** in April 2025 following a refinancing[100](index=100&type=chunk)[102](index=102&type=chunk) - The company plans to **continue satisfying some or all redemption requests for its preferred stock with shares of common stock** in 2025[139](index=139&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial performance, strategic shift to multifamily properties, and liquidity - The company's strategy is to increase its focus on premier multifamily properties, leveraging CIM Group's expertise and using an asset-light, co-investment approach to reduce capital outlay and risk[207](index=207&type=chunk)[208](index=208&type=chunk) Portfolio Occupancy and Rental Trends | Portfolio | Metric | As of March 31, 2025 | As of March 31, 2024 | | :--- | :--- | :--- | :--- | | **Office** | Occupancy | **70.2%** | **83.4%** | | | Ann. Rent/SqFt | **$61.14** | **$58.17** | | **Multifamily** | Occupancy | **80.2%** | **86.2%** | | | Monthly Rent/Unit | **$2,461** | **$2,737** | | **Hotel** | RevPAR | **$176.47** | **$166.84** | - Net loss for Q1 2025 increased to **$6.3 million** from **$3.9 million** in Q1 2024, driven by a **$1.9 million** decrease in segment net operating income and a **$1.1 million** increase in interest expense[228](index=228&type=chunk) - FFO attributable to common stockholders improved to **$(5.4) million** in Q1 2025 from **$(5.9) million** in Q1 2024, mainly due to a **$2.3 million** decrease in redeemable preferred stock dividends declared[232](index=232&type=chunk) - In April 2025, the company refinanced an Austin office property and used the proceeds to fully repay and terminate its **$15.0 million** 2022 Credit Facility, under which it had been out of compliance with certain covenants[262](index=262&type=chunk)[271](index=271&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk with 13.3% of debt floating, impacting earnings by $343 thousand per 50 bps - As of March 31, 2025, **86.7%** of the company's debt was fixed-rate, while **13.3%** was floating-rate[289](index=289&type=chunk) - A hypothetical **50 basis point** (**0.50%**) change in the SOFR interest rate would impact annual earnings by approximately **$343 thousand** based on the floating rate debt outstanding at March 31, 2025[289](index=289&type=chunk) - The company held two interest rate cap agreements with a total notional amount of **$175.8 million** to hedge against interest rate movements[290](index=290&type=chunk) [Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were **effective as of March 31, 2025**, with no material changes to internal controls - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were **effective as of March 31, 2025**[292](index=292&type=chunk) - **No changes** occurred during the quarter ended March 31, 2025, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[293](index=293&type=chunk) [PART II. Other Information](index=55&type=section&id=PART%20II.%20Other%20Information) This section includes disclosures on legal proceedings, risk factors, equity sales, and other general information [Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings beyond routine business litigation - The company reports **no material pending or threatened legal proceedings** outside of the ordinary course of business[296](index=296&type=chunk) [Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) **No material changes to risk factors** from the Annual Report on Form 10-K for the year ended December 31, 2024 are reported - **No material changes to risk factors** from the Annual Report on Form 10-K for the year ended December 31, 2024 are reported[297](index=297&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any common stock during Q1 2025 under its $10.0 million repurchase program - There were **no common stock repurchases** during the three months ended March 31, 2025[298](index=298&type=chunk) [Defaults Upon Senior Securities](index=55&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported **no defaults upon senior securities** - **None**[299](index=299&type=chunk) [Mine Safety Disclosures](index=55&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is **not applicable** to the company - **Not applicable**[300](index=300&type=chunk) [Other Information](index=55&type=section&id=Item%205.%20Other%20Information) The company initiated **voluntary delisting of its Common Stock from the Tel Aviv Stock Exchange** on May 8, 2025 - On May 8, 2025, the company filed a notice to **voluntarily delist its Common Stock from the Tel Aviv Stock Exchange (TASE)**, citing a low trading volume The delisting is expected to be effective three months from the notice date[303](index=303&type=chunk) - The company's common stock will **continue to be listed for trading on the Nasdaq Capital Market**[303](index=303&type=chunk) [Exhibits](index=56&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including amendments and loan agreements