Mobile Infrastructure (BEEP) - 2024 Q1 - Quarterly Report

Part I - Financial Information Item 1. Financial Statements The company presents its unaudited consolidated financial statements for the quarter ended March 31, 2024 Consolidated Financial Statements (Unaudited) The company's unaudited statements show a slight asset decrease and an improved net loss of $3.0 million Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total assets | $420,067 | $423,237 | | Total liabilities | $216,964 | $220,282 | | Total equity | $203,103 | $202,955 | Consolidated Statement of Operations Highlights (in thousands, except per share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total revenues | $8,827 | $7,103 | | Net loss | $(2,989) | $(3,343) | | Net loss attributable to common stockholders | $(2,626) | $(2,298) | | Basic and diluted loss per share | $(0.09) | $(0.18) | Note A — Organization and Business Operations The company owns and leases 42 parking facilities and was formed via a reverse recapitalization in August 2023 - As of March 31, 2024, the company owns 42 parking facilities in 21 separate markets, with approximately 15,400 parking spaces[85][143] - The company was formed through a merger with FWAC on August 25, 2023, with Legacy MIC identified as the accounting acquirer in a reverse recapitalization[115][145] Note B — Summary of Significant Accounting Policies Key policies are outlined, including the alleviation of going concern doubts despite near-term debt maturities - Management believes it is probable that the company will be able to address $90.6 million of debt maturing within twelve months, thereby alleviating substantial doubt about its ability to continue as a going concern[122][123] - For Q1 2024, revenue from locations operated by SP+ Corporation represented 58.8% of the company's revenue (excluding commercial revenue)[125] - In Q1 2024, 26 parking facilities converted from lease arrangements to management contracts, leading to revenue and expenses being recognized on a gross basis[128] Note D – Managed Property Revenues Revenue is disaggregated into Transient and Contract Parkers, with contract balances also detailed Disaggregated Revenue (Q1 2024, in thousands) | Revenue Source | Amount | | :--- | :--- | | Transient Parkers | $3,266 | | Contract Parkers | $2,172 | | Ancillary Revenue | $63 | | Total Managed Property Revenue | $5,501 | - As of March 31, 2024, the company had $1.0 million of outstanding accounts receivable related to managed property revenue[4] Note E – Acquisitions and Dispositions of Investments in Real Estate The company details the disposition of two properties in 2024 and 2023, noting the financial outcomes - In February 2024, the company disposed of its Cincinnati Race Street location for $3.15 million, resulting in a loss on sale of approximately $0.1 million[7] - In February 2023, a parking lot in Wildwood, New Jersey was sold for $1.5 million, resulting in a gain of approximately $0.7 million[8] Note G — Notes Payable and Revolving Credit Facility The company details its $133.7 million in notes payable and its revolving credit facility terms - As of March 31, 2024, the total balance of notes payable was approximately $133.7 million, net of unamortized loan issuance costs[13][14] Future Principal Payments on Notes Payable (in thousands) | Year | Amount | | :--- | :--- | | 2024 (remainder) | $9,749 | | 2025 | $29,166 | | 2026 | $22,785 | | 2027 | $67,151 | | 2028 | $95 | | Thereafter | $5,507 | | Total | $134,453 | - In March 2024, the company amended its Credit Agreement, extending the maturity of its Revolving Credit Facility to October 2024[20] Note H - Equity The equity structure includes common and preferred stock, with $10.2 million in accrued preferred distributions - As of March 31, 2024, accrued and unpaid distributions for Series A and Series 1 Preferred Stock were approximately $0.7 million and $9.5 million, respectively[24][29] - In Q1 2024, shares of Series A and Series 1 Preferred Stock were converted into 780,000 shares of common stock[26][30] - The company has warrants outstanding to purchase 2,553,192 shares of common stock at an exercise price of $7.83 per share, expiring in August 2026[31][37] Note J – Earnings Per Share The company reconciles its basic and diluted loss per share, which improved to ($0.09) from ($0.18) EPS Reconciliation (Q1 2024 vs Q1 2023, in thousands, except per share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net loss attributable to MIC common stock | $(2,626) | $(2,298) | | Basic and dilutive weighted average shares | 28,237,352 | 13,089,848 | | Basic and diluted loss per share | $(0.09) | $(0.18) | Note N— Commitments and Contingencies The company details its involvement in routine litigation, including a settled commission dispute - In February 2024, a settlement agreement was signed in the John Roy lawsuit, which would resolve the estimated $0.7 million in damages[64] - The company is in arbitration with a vendor over a disputed balance of approximately $1.8 million, which has been fully accrued in Accounts Payable[65] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2024 results, highlighting revenue growth from contract conversions and liquidity challenges Trends and Other Factors Affecting our Business Performance is shaped by hybrid work trends and a strategic shift to management contracts for 26 assets - In Q1 2024, 26 of the company's 42 assets were converted to management contracts to enhance NOI growth and improve expense control[91] - The company anticipates that a hybrid work structure will be the normalized state, impacting assets with office exposure[90] Results of Operations Total revenues rose 24.3% to $8.8 million, driven by the conversion of properties to management contracts Revenue Comparison (Q1 2024 vs Q1 2023, in thousands) | Revenue Type | Q1 2024 | Q1 2023 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Managed Property Revenue | $5,501 | $— | $5,501 | 100.0% | | Base Rent Income | $1,643 | $2,080 | $(437) | (21.0)% | | Percentage rental income | $1,683 | $5,023 | $(3,340) | (66.5)% | | Total revenues | $8,827 | $7,103 | $1,724 | 24.3% | Operating Expense Comparison (Q1 2024 vs Q1 2023, in thousands) | Expense Type | Q1 2024 | Q1 2023 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Property taxes | $1,904 | $1,756 | $148 | 8.4% | | Property operating expense | $1,521 | $518 | $1,003 | NM | | General and administrative | $3,017 | $2,620 | $397 | 15.2% | | Total operating expenses | $9,381 | $7,522 | $1,859 | 24.7% | Non-GAAP Measures The company reconciles non-GAAP measures, showing an 11.9% increase in NOI and a slight rise in Adjusted EBITDA NOI Reconciliation (Q1 2024 vs Q1 2023, in thousands) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total revenues | $8,827 | $7,103 | | Less: Property taxes | $1,904 | $1,756 | | Less: Property operating expense | $1,521 | $518 | | Net Operating Income | $5,402 | $4,829 | Adjusted EBITDA Reconciliation (Q1 2024 vs Q1 2023, in thousands) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Income (Loss) | $(2,989) | $(3,343) | | Interest expense | 2,979 | 3,599 | | Depreciation and amortization | 2,093 | 2,126 | | EBITDA | $2,083 | $2,382 | | Adjustments (Impairment, Equity comp, etc.) | 1,449 | 1,027 | | Adjusted EBITDA | $3,532 | $3,409 | Liquidity and Capital Resources The company faces near-term liquidity challenges with $90.6 million in debt maturing within a year - The company has $90.6 million of debt maturing within twelve months, comprising $58.7 million from the Revolving Credit Facility and $31.9 million in notes payable[154] - The company has identified and is evaluating a pipeline of potential acquisition targets with an approximate asset value of $300 million[159] - Cash distributions on common stock remain suspended until accrued preferred stock distributions, totaling $10.2 million, are paid[160][162] Item 4. Controls and Procedures Disclosure controls were deemed ineffective due to material weaknesses in internal financial reporting controls - Management concluded that disclosure controls and procedures were not effective as of the end of the reporting period due to material weaknesses in internal control[176] - The material weaknesses relate to a lack of appropriate segregation of duties and ineffective design of financial reporting controls[177] - Remediation efforts are ongoing and include hiring additional accounting resources and enhancing internal control documentation[178][179] Part II - Other Information Item 1. Legal Proceedings The company is not subject to material litigation beyond what is disclosed in Note N of the financials - The company refers to Note N — Commitments and Contingencies for information on legal proceedings and states it is not subject to any other material litigation[182][183] Item 1A. Risk Factors No material changes have occurred to the risk factors disclosed in the company's latest Form 10-K - No material changes have occurred from the risk factors set forth in the company's annual report on Form 10-K filed on March 22, 2024[184] Item 6. Exhibits This section lists all exhibits filed with the quarterly report, including officer certifications - The report includes an index of exhibits filed concurrently, such as officer certifications and the Third Amendment to the Credit Agreement[188][190]