UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March~~June 3130, 2023

☐ 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: 000-55760

MOBILE INFRASTRUCTURE CORPORATION

(Exact name of registrant as specified in its charter)

Maryland		47-3945882
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

30 W. 4th Street, Cincinnati, OH 45202

(Address of Principal Executive Offices) (Zip Code)

Registrant’s Telephone Number, including Area Code: (513) 834-5110

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbols(s)	Name of each exchange on which registered
N/A	N/A	N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ☐ No ☒

As of ~~May~~August 1014, 2023, the registrant had 7,762,375 shares of common stock outstanding.

Table of Contents

TABLE OF CONTENTS

		Page
Part I	FINANCIAL INFORMATION
Item 1.	CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	1
	CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2023 (UNAUDITED) AND DECEMBER 31, 2022	1
	CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2023 (UNAUDITED) AND DECEMBER 31, 2022	1
	CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022 (UNAUDITED)	2
	CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022 (UNAUDITED)	2
	CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022 (UNAUDITED)	3
	CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022 (UNAUDITED)	3
	CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022 (UNAUDITED)	4
	CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022 (UNAUDITED)	4
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	5
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	16
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	2425
Item 4.	CONTROLS AND PROCEDURES	2425
Part II	OTHER INFORMATION
Item 1.	LEGAL PROCEEDINGS	2526
Item 1A.	RISK FACTORS	2526
Item 5	OTHER INFORMATION	2526
Item 6.	EXHIBITS	2526

Table of Contents

PART I

ITEM 1. FINANCIAL STATEMENTS

MOBILE INFRASTRUCTURE CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

	As of March 31, 2023			As of December 31, 2022
	As of June 30, 2023			As of December 31, 2022
	(unaudited)
ASSETS
Investments in real estate
Land and improvements	$	166,225		$	166,225
Buildings and improvements		272,~~862~~916			272,605
Construction in progress		1,~~418~~420			1,206
Intangible assets		10,~~129~~131			10,106
		450,634			450,142
		450,692			450,142
Accumulated depreciation and amortization		(3335,~~171~~295	)		(31,052	)
Total investments in real estate, net		~~417~~415,~~463~~397			419,090
Fixed assets, net		~~203~~200			210
Assets held for sale		—			696
Cash		32,~~119~~029			5,758
Cash – restricted		34,~~951~~144			5,216
Prepaid expenses		~~631~~348			953
Accounts receivable, net		21,~~536~~941			1,849
Due from related parties		—			156
Deferred offering costs		45,~~005~~109			2,086
Other assets		~~217~~218			99
Total assets	$	~~432~~429,~~125~~386		$	436,113
LIABILITIES AND EQUITY
Liabilities
Notes payable, net	$	~~146~~145,~~345~~675		$	146,948
Revolving credit facility, net		7273,~~929~~120			72,731
Accounts payable and accrued expenses		16,~~126~~036			16,351
Accrued preferred distributions		910,~~254~~005			8,504
Indemnification liability		2,596			2,596
Liabilities held for sale		—			968
Security deposits		166			161
Due to related parties		470			470
Deferred revenue		~~146~~486			376
Total liabilities		248,~~032~~554			249,105
Equity
Mobile Infrastructure Corporation Stockholders’ Equity
Preferred stock Series A, $0.0001 par value, 50,000 shares authorized, 2,862 shares issued and outstanding (stated liquidation value of $2,862,000 as of March 31, 2023 and December 31, 2022)		—			—
Preferred stock Series A, $0.0001 par value, 50,000 shares authorized, 2,862 shares issued and outstanding (stated liquidation value of $2,862,000 as of June 30, 2023 and December 31, 2022)		—			—
Preferred stock Series 1, $0.0001 par value, 97,000 shares authorized, 39,811 shares issued and outstanding (stated liquidation value of $39,811,000 as of March 31, 2023 and December 31, 2022)		—			—
Preferred stock Series 1, $0.0001 par value, 97,000 shares authorized, 39,811 shares issued and outstanding (stated liquidation value of $39,811,000 as of June 30, 2023 and December 31, 2022)		—			—
Non-voting, non-participating convertible stock, $0.0001 par value, 1,000 shares authorized, no shares issued and outstanding		—			—
Common stock, $0.0001 par value, 98,999,000 shares authorized, 7,762,375 shares issued and outstanding as of March 31, 2023 and December 31, 2022		—			—
Common stock, $0.0001 par value, 98,999,000 shares authorized, 7,762,375 shares issued and outstanding as of June 30, 2023 and December 31, 2022		—			—
Warrants issued and outstanding – 1,702,128 warrants as of March 31, 2023 and December 31, 2022, respectively		3,319			3,319
Warrants issued and outstanding – 1,702,128 warrants as of June 30, 2023 and December 31, 2022, respectively		3,319			3,319
Additional paid-in capital		~~192~~191,~~426~~676			193,176
Accumulated deficit		(~~110~~112,~~716~~433	)		(109,168	)
Total Mobile Infrastructure Corporation Stockholders’ Equity		8582,~~029~~562			87,327
Non-controlling interest		9998,~~064~~270			99,681
Total equity		~~184~~180,~~093~~832			187,008
Total liabilities and equity	$	~~432~~429,~~125~~386		$	436,113

The accompanying notes are an integral part of these consolidated financial statements.

- 1 -

Table of Contents

MOBILE INFRASTRUCTURE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts, unaudited)

	For the Three Months Ended March 31,
	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
Revenues
Base rental income	$	21,~~080~~951		$	12,~~931~~002		$	4,031		$	4,053
Management income		—			~~427~~—			—			313
Percentage rental income		5,~~023~~263			45,~~456~~031			10,286			9,456
Total revenues		7,~~103~~214			67,~~814~~033			14,317			13,822
Operating expenses
Property taxes		1,~~756~~742			1,~~631~~739			3,498			3,575
Property operating expense		~~518~~533			~~853~~698			1,051			1,472
Interest expense		3,~~599~~676			23,~~457~~366			7,276			5,957
Depreciation and amortization		2,~~126~~130			2,~~010~~064			4,256			4,031
General and administrative		2,~~620~~444			1,~~515~~838			5,063			3,344
Professional fees, net of reimbursement of insurance proceeds		~~469~~327			~~574~~494			795			1,175
Organizational, offering and other costs		3384			~~893~~1,876			117			2,722
Total expenses		1110,~~121~~936			912,~~933~~075			22,056			22,276
Other income (expense)
Gain on sale of real estate		~~660~~—			—			660			—
Other income		15			61
PPP loan forgiveness		—			328			—			328
Total other income (expense)		675			61
Other income		15			61			30			76
Net loss		(3,343	)		(3,058	)
Total other income (expense)		15			389			690			404
Net loss attributable to non-controlling interest		(1,795	)		(1,622	)
Net loss		(3,707	)		(4,653	)		(7,049	)		(8,050	)
Net loss attributable to Mobile Infrastructure Corporation’s stockholders	$	(1,548	)	$	(1,436	)
Net loss attributable to non-controlling interest		(1,989	)		(2,663	)		(3,784	)		(4,657	)
Preferred stock distributions declared - Series A		(54	)		(54	)
Net loss attributable to Mobile Infrastructure Corporation’s stockholders	$	(1,718	)	$	(1,990	)	$	(3,265	)	$	(3,393	)
Preferred stock distributions declared - Series 1		(696	)		(696	)
Preferred stock distributions declared - Series A		(54	)		(54	)		(108	)		(108	)
Net loss attributable to Mobile Infrastructure Corporation’s common stockholders	$	(2,298	)	$	(2,186	)
Preferred stock distributions declared - Series 1		(696	)		(696	)		(1,392	)		(1,392	)
Basic and diluted loss per weighted average common share:
Net loss attributable to Mobile Infrastructure Corporation’s common stockholders	$	(2,468	)	$	(2,740	)	$	(4,765	)	$	(4,893	)
Net loss per share attributable to Mobile Infrastructure Corporation’s common stockholders - basic and diluted	$	(0.30	)	$	(0.28	)
Basic and diluted loss per weighted average common share:
Weighted average common shares outstanding, basic and diluted		7,762,375			7,762,375
Net loss per share attributable to Mobile Infrastructure Corporation’s common stockholders - basic and diluted	$	(0.32	)	$	(0.35	)	$	(0.61	)	$	(0.63	)
Weighted average common shares outstanding, basic and diluted		7,762,375			7,762,375			7,762,375			7,762,375

The accompanying notes are an integral part of these consolidated financial statements.

- 2 -

Table of Contents

MOBILE INFRASTRUCTURE CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE THREE AND SIX months ended ~~March~~June 3130, 2023 and 2022

(In thousands, unaudited)

	Preferred stock				Common stock
	Number of Shares		Par Value		Number of Shares		Par Value		Warrants		Additional Paid-in Capital			Accumulated Deficit			Non-controlling interest			Total
Balance, December 31, 2022		42,673	$	—		7,762,375	$	—	$	3,319	$	193,176		$	(109,168	)	$	99,681		$	187,008
Equity based payments		—		—		—		—		—		—			—			1,484			1,484
Distributions to non-controlling interest holders		—		—		—		—		—		—			—			(306	)		(306	)
Declared distributions – Series A ($18.75 per share)		—		—		—		—		—		(54	)		—			—			(54	)
Declared distributions – Series 1 ($17.5 per share)		—		—		—		—		—		(696	)		—			—			(696	)
Net loss		—		—		—		—		—		—			(1,548	)		(1,795	)		(3,343	)
Balance, March 31, 2023		42,673	$	—		7,762,375	$	—	$	3,319	$	192,426		$	(110,716	)	$	99,064		$	184,093
Equity based payments		—		—		—		—		—		—			—			1,214			1,214
Distributions to non-controlling interest holders		—		—		—		—		—		—			—			(19	)		(19	)
Declared distributions – Series A ($18.75 per share)		—		—		—		—		—		(54	)		—			—			(54	)
Declared distributions – Series 1 ($17.5 per share)		—		—		—		—		—		(696	)		—			—			(696	)
Net loss		—		—		—		—		—		—			(1,717	)		(1,989	)		(3,706	)
Balance, June 30, 2023		42,673	$	—		7,762,375	$	—	$	3,319	$	191,676		$	(112,433	)	$	98,270		$	180,832

	Preferred stock				Common stock
	Number of Shares		Par Value		Number of Shares		Par Value		Warrants		Additional Paid-in Capital			Accumulated Deficit			Non-controlling interest			Total
Balance, December 31, 2021		42,673	$	—		7,762,375	$	—	$	3,319	$	196,176		$	(101,049	)	$	107,378		$	205,824
Declared distributions – Series A ($18.75 per share)		—		—		—		—		—		(54	)		—			—			(54	)
Declared distributions – Series 1 ($17.5 per share)		—		—		—		—		—		(696	)		—			—			(696	)
Net loss		—		—		—		—		—		—			(1,929	)		(1,622	)		(3,551	)
Balance, March 31, 2022		42,673	$	—		7,762,375	$	—	$	3,319	$	195,426		$	(102,978	)	$	105,756		$	201,523
Declared distributions – Series A ($18.75 per share)		—		—		—		—		—		(54	)		—			—			(54	)
Declared distributions – Series 1 ($17.5 per share)		—		—		—		—		—		(696	)		—			—			(696	)
Net loss		—		—		—		—		—		—			(1,379	)		(3,122	)		(4,501	)
Balance, June 30, 2022		42,673	$	—		7,762,375	$	—	$	3,319	$	194,676		$	(104,357	)	$	102,634		$	196,273

The accompanying notes are an integral part of these consolidated financial statements.

- 3 -

Table of Contents

MOBILE INFRASTRUCTURE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

	For the Three Months Ended March 31,
	For the Six Months Ended June 30,
	2023			2022
Cash flows from operating activities:
Net Loss	$	(37,~~343~~049	)	$	(38,~~058~~050	)
Adjustments to reconcile net loss to net cash (used in) operating activities:
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization expense		24,~~126~~256			24,~~010~~031
Amortization of loan costs		~~390~~759			~~100~~686
PPP loan forgiveness		—			(328	)
Gain on sale of real estate		(660	)		—
Equity based payment		12,~~397~~566			—391
Changes in operating assets and liabilities
Due to/from related parties		156			(~~136~~156	)
Accounts payable		~~(503~~263	)		~~(413~~2,325	)
Deposits		—			(340	)
Security deposits		5			(27	)
Security deposits		5			(46	)
Other assets		(119	)		113
Other assets		(118	)		105
Deferred offering costs		(3,022	)		—
Deferred offering costs		(1,919	)		—
Deferred revenue		110			(89	)
Deferred revenue		(230	)		(91	)
Accounts receivable		(91	)		1,828
Accounts receivable		(686	)		820
Prepaid expenses		605			270
Prepaid expenses		322			19
Other		—			(392	)
Net cash (used in) operating activities		(3,063	)		(1,030	)
Net cash provided by (used in) operating activities	$	(2,221	)	$	602
Cash flows from investing activities:
Capital expenditures		(~~224~~1,098	)		(801,078	)
Capitalized technology		(23	)		(5290	)
Purchase of investment in real estate		—			(17,512	)
Proceeds from sale of investment in real estate		1,475			—
Net cash provided by (used in) investing activities		~~1,228~~354			(~~132~~18,680	)
Cash flows from financing activities:
Payments on notes payable		(1,763	)		(821	)
Proceeds from line of credit		—			73,700
Distributions to non-controlling interest holders		(306	)		—
Payments on notes payable		(2,609	)		(56,797	)
Loan fees		—			(467	)
Distributions to non-controlling interest holders		(325	)		—
Net cash (used in) financing activities		(2,069	)		(1,288	)
Loan fees		—			(1,756	)
Net change in cash and cash equivalents and restricted cash		(3,904	)		(2,450	)
Net cash provided by (used in) financing activities		(2,934	)		15,147
Net change in cash and cash equivalents and restricted cash		(4,801	)		(2,931	)
Cash and cash equivalents and restricted cash, beginning of period		10,974			16,696
Cash and cash equivalents and restricted cash, end of period	$	76,~~070~~173		$	1413,~~246~~765
Reconciliation of Cash and Cash Equivalents and Restricted Cash:
Cash and cash equivalents at beginning of period	$	5,758		$	11,805
Restricted cash at beginning of period		5,216			4,891
Cash and cash equivalents and restricted cash at beginning of period	$	10,974		$	16,696
Cash and cash equivalents at end of period	$	32,~~119~~029		$	8,~~870~~182
Restricted cash at end of period		34,~~951~~144			5,~~376~~583
Cash and cash equivalents and restricted cash at end of period	$	76,~~070~~173		$	1413,~~246~~765
Supplemental disclosures of cash flow information:
Interest Paid	$	26,~~774~~102		$	25,~~439~~021
Non-cash investing and financing activities:
Dividends declared not yet paid	$	~~750~~1,500		$	~~750~~1,500
Accrued capital expenditures	$	~~309~~503		$	—

The accompanying notes are an integral part of these consolidated financial statements

- 4 -

Table of Contents

MOBILE INFRASTRUCTURE CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

~~March~~June 3130, 2023

(UNAUDITED)

Note A — Organization and Business Operations

Mobile Infrastructure Corporation (the “Company,” “we,” “us” or “our”), is a Maryland corporation formed on May 4, 2015. The Company focuses on acquiring, owning and leasing parking facilities and related infrastructure, including parking lots, parking garages and other parking structures throughout the United States. The Company targets both parking garage and surface lot properties primarily in top 50 U.S. Metropolitan Statistical Areas (“MSAs”), with proximity to key demand drivers, such as commerce, events and venues, government and institutions, hospitality and multifamily central business districts.

As of ~~March~~June 3130, 2023, the Company owned 43 parking facilities in 21 separate markets throughout the United States, with a total of 15,676 parking spaces and approximately 5.4 million square feet. The Company also owns approximately 0.2 million square feet of retail/commercial space adjacent to its parking facilities.

The Company is the sole general partner of Mobile Infra Operating Partnership, L.P., a Maryland limited partnership (the “Operating Partnership”). The Company owns substantially all of its assets and conducts substantially all of its operations through the Operating Partnership, is the sole general partner of the Operating Partnership and owns approximately 45.8% of the common units of the Operating Partnership (the “OP Units”). Color Up, LLC, a Delaware limited liability company (“Color Up”) and HSCP Strategic III, LP, a Delaware limited partnership (“HS3”), are limited partners of the Operating Partnership and own approximately 44.2% and 10%, respectively, of the outstanding OP Units. Color Up is our largest stockholder and is controlled by the Company’s Chief Executive Officer and a director, Manuel Chavez, the Company’s President, Chief Financial Officer and a director, Stephanie Hogue, and a director of the Company, Jeffrey Osher. HS3 is controlled by Mr. Osher.

The Company previously elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes and operated in a manner that allowed the Company to qualify as a REIT through December 31, 2019. As a consequence of lease modifications entered into during the COVID-19 pandemic, the Company earned income from a number of tenants that did not constitute qualifying REIT income for purposes of the annual REIT gross income tests, and, as a result, the Company was not in compliance with the annual REIT income tests for its taxable year ended December 31, 2020. Accordingly, the Company did not qualify for taxation as a REIT in 2020 and continues to be taxed as a C corporation. As a C corporation, the Company is not required to distribute any amounts to its stockholders.

Merger with Fifth Wall Acquisition Corp. III

On December 13, 2022, the Company and Fifth Wall Acquisition Corp. III (“FWAC”), a special purpose acquisition company sponsored by Fifth Wall Acquisition Sponsor III LLC ("Fifth Wall"), entered into a definitive merger agreement, which was subsequently amended by the First Amendment to Agreement and Plan of Merger dated March 23, 2023 (the “Merger Agreement”). Upon closing of the merger (the “Merger”), FWAC will be the surviving entity and will be renamed “Mobile Infrastructure Corporation”. The combined company following the Merger (“New MIC”) expects to be publicly traded on the New York Stock Exchange American under the ticker “BEEP.” Following the steps of the Merger as provided in the Merger Agreement:

●

each then issued and outstanding Class A Share of FWAC will convert, on a one-for-one basis, into one share of New MIC common stock;

●

each then issued and outstanding share of the Company’s common stock will convert, on a one-to-1.5 basis, into one share of New MIC common stock;

●

each share of the Company’s Series 1 and Series A preferred stock issued and outstanding will be converted into the right to receive one share of Series 1 and Series A preferred stock of New MIC; and

●

each of the Company’s common stock warrants will become a warrant to purchase that number of shares of New MIC common stock equal to the product of (a) the number of shares of common stock that would have been issuable upon the exercise of such common stock warrant and (b) 1.5.

Additionally, inon June ~~connection~~15, ~~with~~2023, ~~the~~HS3, ~~execution~~Harvest ofSmall ~~the~~Cap ~~Merger~~Partners, ~~Agreement~~L.P. and Harvest Small Cap Partners Master, ~~FWAC~~Ltd., ~~entered~~entities ~~into~~controlled ~~subscription~~by ~~agreements~~Mr. ~~with~~Osher, and Bombe-MIC Pref, LLC, an ~~initial~~entity ~~PIPE~~controlled ~~investor~~by Mr. Chavez and of which Ms. Hogue is a member, (collectively, the “~~Initial~~Preferred PIPE ~~Investor~~Investors”), each entered into a Subscription Agreement with FWAC pursuant to which, among other things, the ~~Initial~~Preferred PIPE ~~Investor~~Investors agreed to ~~purchase~~subscribe ~~from~~for ~~New~~and ~~MIC~~purchase, ~~prior~~and toFWAC orhas ~~substantially~~agreed ~~concurrently~~to ~~with~~issue ~~the~~and ~~closing~~sell ofto the ~~Merger~~Preferred PIPE Investors, ~~$10~~a ~~million~~total of ~~common~~ ~~stock~~46,000 shares of Series 2 Convertible Preferred Stock, par value $0.0001 per share, ~~of New MIC~~ (the “~~New~~Series ~~MIC~~2 ~~Common~~Preferred Stock”), of New MIC at $~~10.00~~1,000 per 1share for an aggregate purchase price of $46,000,000. Subject to the terms and conditions of the Subscription Agreement, the Series 2 Preferred Stock will convert into approximately 12,534,060 shares of New MIC Common Stock on December 31, 2023. The ~~Initial~~Series ~~PIPE~~2 ~~Investor~~Preferred isStock ~~controlled~~will bybe ~~Jeffrey~~entitled ~~Osher,~~to receive dividends at a ~~member~~cumulative annual rate of 10% during the ~~Company’s~~period ~~Board~~between the initial issuance of ~~Directors~~such shares and athe ~~control~~conversion ~~person~~thereof into shares of ~~HS3~~New MIC Common Stock. Dividends will be paid in kind and also convert into shares of New MIC Common Stock on the conversion date.

The Merger ~~Agreement~~was ~~also~~approved ~~contemplates~~by ~~other~~a ~~PIPE~~majority ~~investments~~of ~~through~~ the ~~entry~~Company’s ~~into~~stockholders ~~one~~at ora ~~more~~meeting ~~additional~~held ~~subscription~~on August ~~agreements~~10, ~~with~~2023. The ~~one~~Merger oris ~~more~~expected ~~investors~~ to ~~purchase~~close ~~Class~~on Aor ~~Shares~~around August ~~of FWAC~~18, ~~New MIC Common Stock, New MIC preferred stock or convertible notes of New MIC~~2023.

~~Pursuant~~Concurrent towith the closing of the Merger, the Operating Partnership will convert from a Maryland limited partnership to a Delaware limited liability company (the “Operating Company”). As a limited liability company, the Operating Company will continue to be treated as a partnership and a disregarded entity for tax and accounting purposes. Following the conversion, the Company will be a member of the Operating Company and the Operating Company will be managed by a board ~~consisting~~ of ~~board members~~managers, one appointed by the Company and one appointed by the other members of the Operating Company.

During the ~~three~~ six months ended ~~March~~June 3130, 2023 and the year ended December 31, 2022, the Company incurred costs of approximately $13.90 million and $2.1 million, respectively, associated with the Merger. These costs are being accounted for as deferred offering costs in accordance with FASB ASC Topic 340, Other Assets and Deferred Costs and are reflected within deferred offering costs on our Consolidated Balance Sheets.

- 5 -

Table of Contents

Note B — Summary of Significant Accounting Policies

Basis of Accounting

The consolidated financial statements of the Company are prepared on the accrual basis of accounting and in accordance with principles generally accepted in the United States of America (“GAAP”) for interim financial information as contained in the FASB ASC, and in conjunction with rules and regulations of the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary to give a fair presentation of operating results for the periods presented have been included. Certain prior period amounts have been reclassified to conform to the current period presentation. Operating results for the three and six months ended ~~March~~June 3130, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. There were no significant changes to our significant accounting policies during the ~~three~~six months ended ~~March~~June 3130, 2023. For a full summary of our accounting policies, refer to our 2022 Annual Report on Form 10-K as originally filed with the SEC on March 22, 2023.

Going Concern

The accompanying consolidated financial statements are prepared in accordance with GAAP applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The Company has incurred net losses since its inception and anticipates net losses for the near future. As of ~~March 31~~June 30, 2023, the Company was not in compliance with all applicable covenants in agreements governing its debt, resulting in events of default. Additionally, based on the Company’s expected financial performance for the twelve-month period subsequent to the filing of the ~~March~~June 3130, 2023 Form 10-Q, the Company expects that it will not be in compliance with a financial covenant under the Revolving Credit Facility, which would result in an event of default. Such event allows the lender to accelerate the maturity of the debt under the Revolving Credit Facility which carries a balance of $73.7 million as of ~~March 31~~June 30, 2023. Further, our independent auditor included an explanatory paragraph regarding our ability to continue as a “going concern” in its report on our financial statements for the year ended December 31, 2022 (as included in our Form 10-K), which constitutes an event of default under our Revolving Credit Facility. The Revolving Credit Facility also requires the Company to initiate an equity raise in order to achieve a fixed charge coverage ratio (“FCCR”) of 1.4 to 1.0 as of ~~March,~~June 3130, 2023. The Company does not currently have sufficient cash on hand, liquidity or projected future cash flows to repay these outstanding amounts upon an event of default. These conditions and events raise substantial doubt about the Company’s ability to continue as a going concern.

In response to these conditions, management’s plans include utilizing proceeds from the ~~following:~~pending merger with Fifth Wall Acquisition Corporation III to pay-down a portion of the outstanding balance on the Revolving Credit Facility, which will result in reduced interest cost and an improved FCCR.

Additional plans include the following:

Capitalizing on recent business development initiatives that we anticipate will improve total revenues through increased utilization of our parking assets and in many cases at higher average ticket rates.

Management is budgeting reduced overhead costs in 2023 through the reduction or elimination of certain controllable expenses.

We are pursuing further amendments and/or extensions with respect to the Revolving Credit Facility, including waivers of noncompliance with covenants.

4. We have initiated equity raise or liquidity events, including the proposed merger with Fifth Wall Acquisition Corporation III.

However, there can be no assurance that we will be successful in completing any of these options. As a result, management’s plans cannot be considered probable and thus does not alleviate substantial doubt about our ability to continue as a going concern.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts of liabilities that might result from the outcome of this uncertainty.

Consolidation

The consolidated financial statements include the accounts of the Company, the Operating Partnership, each of their wholly owned subsidiaries, and all other entities in which the Company has a controlling financial interest. For entities that meet the definition of a variable interest entity (“VIE”), the Company consolidates those entities when the Company is the primary beneficiary of the entity. The Company is determined to be the primary beneficiary when it possesses both the power to direct activities that most significantly impact the economic performance of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. The Company continually evaluates whether it qualifies as the primary beneficiary and reconsiders its determination of whether an entity is a VIE upon reconsideration events. All intercompany activity is eliminated in consolidation.

Noncontrolling interests on our Consolidated Balance Sheets represent the portion of equity that we do not own in the entities we consolidate. Net income or loss attributable to non-controlling interest in our Consolidated Statements of Operations represents our partners’ share of net income or loss that is generally allocated on a pro-rata basis based on ownership percentage.

- 6 -

Table of Contents

Noncontrolling interests on our Consolidated Balance Sheets represent the portion of equity that we do not own in the entities we consolidate. Net income or loss attributable to non-controlling interest in our Consolidated Statements of Operations represents our partners’ share of net income or loss that is generally allocated on a pro-rata basis based on ownership percentage.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding asset impairment and purchase price allocations to record investments in real estate, as applicable.

Concentration

The Company had fifteen and fourteen parking tenant-operators during the ~~three~~six months ended ~~March~~June 3130, 2023 and 2022, respectively. One tenant/operator, SP + Corporation (Nasdaq: SP) (“SP+”), represented 6061.90% and 5659.14% of the Company’s revenue, excluding commercial revenue, for the ~~three~~six months ended ~~March~~June 3130, 2023 and 2022, respectively. Premier Parking Service, LLC represented 12.54% and 1513.03% of the Company’s revenue, excluding commercial revenue, for the ~~three~~six months ended ~~March~~June 3130, 2023 and 2022, respectively.

In addition, the Company had concentrations in Cincinnati (19.2%), Detroit (12.5%), Chicago (8.7%), and Houston (7.8%) based on gross book value of real estate as of ~~March~~June 3130, 2023 and December 31, 2022.

As of ~~March~~June 3130, 2023 and December 31, 2022, 4957.86% and 59.2% of the Company’s outstanding accounts receivable balance, respectively, was with SP+.

Acquisitions

All assets acquired and liabilities assumed in an acquisition of real estate accounted for as a business combination are measured at their acquisition date fair values. For acquisitions of real estate accounted for as an asset acquisition, the fair value of consideration transferred by the Company (including transaction costs) is allocated to all assets acquired and liabilities assumed on a relative fair value basis.

In making estimates of fair values for purposes of allocating purchase price, the Company will utilize several sources, including independent third-party valuations that may be obtained in connection with the acquisition or financing of the respective property and other market data. The Company will also consider information obtained about each property as a result of the Company’s pre-acquisition due diligence, as well as subsequent marketing and leasing activities, in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed.

The Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets acquired based on their relative fair values. Tangible assets include land, land improvements, buildings, fixtures and tenant improvements on an as-if vacant basis. The Company utilizes various estimates, processes and information to determine the as-if vacant property value. Estimates of value are made using customary methods, including data from appraisals, comparable sales, discounted cash flow analysis and other methods. Amounts allocated to land, land improvements, buildings and fixtures are based on valuations performed by independent third parties or on the Company’s analysis of comparable properties in the Company’s portfolio. Identifiable intangible assets include amounts allocated to acquire leases for above- and below-market lease rates, the value of in-place leases, and the value of customer relationships, as applicable. The aggregate value of intangible assets related to in-place leases is primarily the difference between the property valued with existing in-place leases adjusted to market rental rates and the property valued as if vacant. Factors considered by the Company in its analysis of the in-place lease intangibles include an estimate of carrying costs during the expected lease-up period for each property, considering current market conditions and costs to execute similar leases. In estimating carrying costs, the Company will include real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up period. Estimates of costs to execute similar leases including leasing commissions, legal and other related expenses are also utilized.

The value of lease intangibles is amortized to depreciation and amortization expense in our Consolidated Statements of Operations over the remaining term of the respective lease. If a tenant terminates its lease with us, the unamortized portion of any lease intangible is recognized over the shortened lease term.

Impairment of Long-Lived Assets and Indefinite-Lived Intangible Assets

We periodically evaluate our long-lived assets, primarily investments in real estate, for indicators of impairment. When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the assets for potential impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If impairment exists, due to the inability to recover the carrying value of a property through future undiscounted cash flows, we recognize an impairment loss to the extent that the carrying value exceeds the estimated fair value of the property.

- 7 -

Table of Contents

When we determine that a property should be classified as held for sale, we recognize an impairment loss to the extent the property's carrying value exceeds its fair value less estimated cost to dispose of the asset.

At least annually, we review indefinite-lived intangible assets for indicators of impairment. We first evaluate qualitative factors to determine if it is more likely than not that the carrying value of an indefinite-lived intangible asset exceeds its estimated fair value. Such qualitative factors include the impact of macroeconomic conditions, changes in the industry or market, cost factors, and financial performance. If we then conclude that impairment exists, we will recognize a charge to earnings representing the difference between the carrying amount and the estimated fair value of the indefinite-lived intangible asset.

Immaterial Correction

During the year ended December 31, 2022, the Company identified certain errors impacting our first and second quarter ~~filing~~filings of 2022. A summary of such errors is outlined in the table below and includes errors related to the cut-off and classification of accruals, cash, prepaids and expenses, accounting and record keeping for tenant billings and deposits, accounting related to interest expense, elimination of intercompany receivables and payables, and corrections related to the calculation of noncontrolling interest.

	As of March 31, 2022
	As of June 30, 2022
	As reported		~~Adjustments~~	~~As Corrected~~Adjustments			As Corrected
	(in thousands)
Consolidated Balance Sheet:
Buildings and improvements	$ ~~254,482~~	271,046	~~$ (156)~~	$ ~~254,326~~	(156	)	$	270,890
Fixed assets, net	56	296	~~(43)~~	13	(81	)		215
Cash	~~9,418~~	8,623	~~(548)~~	~~8,870~~	(441	)		8,182
Cash – restricted	~~5,043~~	5,357	~~333~~	~~5,376~~	226			5,583
Prepaid expenses	~~462~~	544	~~194~~	~~656~~	(138	)		406
Accounts receivable	~~3,312~~	2,494	~~(197)~~	~~3,115~~	(291	)		2,203
Due from related parties	-	-	~~156~~	~~156~~	156			156
Other assets	~~103~~	121	~~(47)~~	56	(127	)		(6	)
Accounts payable and accrued liabilities	15,589		(954)	14,635
Notes payable, net		150,299			(37	)		150,262
Security Deposit	166		(46)	120
Revolving Credit Facility, net		72,106			290			72,396
Deferred revenue	99		(35)	64
Accounts payable and accrued liabilities		18,530			(856	)		17,674
Accumulated deficit	(102,855)		370	(102,485)
Security Deposit		185			(46	)		139
Non-controlling interest	104,906		850	105,756
Deferred revenue		101			(35	)		66
Accumulated deficit		(104,541	)		(305	)		(104,846	)
Non-controlling interest		102,986			(352	)		102,634

	Three Months Ended March 31, 2022
	Three Months Ended June 30, 2022									Six Months Ended June 30, 2022
	As reported		~~Adjustments~~	~~As Corrected~~Adjustments			As Corrected			As reported			Adjustments			As Corrected
	(in thousands, except per share data)									(in thousands, except per share data)
Consolidated Statement of Operations:
Base rent income	$ ~~2,051~~	2,122	~~$ (120)~~	$ ~~1,931~~	(120	)	$	2,002		$	4,173		$	(120	)	$	4,053
Management agreement	-	427	~~427~~	~~427~~	(427	)		-			427			(114	)		313
Percentage rent	~~4,329~~	4,856	~~127~~	~~4,456~~	175			5,031			9,185			271			9,456
Property taxes	~~1,836~~	1,844	~~(205)~~	~~1,631~~	(105	)		1,739			3,680			(105	)		3,575
Property operating expense	~~837~~	731	16	~~853~~	(33	)		698			1,568			(96	)		1,472
General and administrative	~~1,506~~	1,882	9	~~1,515~~	(44	)		1,838			3,388			(44	)		3,344
Professional fees	~~1,988~~	532	~~(520)~~	~~1,468~~	(38	)		494			1,562			(387	)		1,175
Depreciation and amortization	1,967		43	2,010
Organizational, offering and other costs		1,567			309			1,876			2,525			197			2,722
Interest expense	(2,539)		83	(2,457)
Depreciation and amortization		2,021			43			2,064			3,988			43			4,031
Other income	15		46	61
Interest expense		(3,168	)		(198	)		(3,366	)		(5,707	)		(250	)		(5,957	)
Net loss	(4,278)		1,220	(3,058)
Other income		15			46			61			30			46			76
Net income attributable to non-controlling interest	(2,472)		850	(1,622)
Net loss		(3,997	)		(656	)		(4,653	)		(8,275	)		225			(8,050	)
Net loss attributable to Mobile Infrastructure Corporation’s common stockholders	(2,556)		370	(2,186)
Net income attributable to non-controlling interest		(2,311	)		(352	)		(2,663	)		(4,783	)		126			(4,657	)
Net loss per share attributable to Mobile Infrastructure Corporation’s common stockholders - basic and diluted	$ (0.33)		$ 0.05	$ (0.28)
Net loss attributable to Mobile Infrastructure Corporation’s common stockholders		(2,436	)		(304	)		(2,740	)		(4,992	)		99			(4,893	)
Net loss per share attributable to Mobile Infrastructure Corporation’s common stockholders - basic and diluted	$	(0.31	)	$	(0.04	)	$	(0.35	)	$	(0.64	)	$	0.01		$	(0.63	)

- 8 -

Table of Contents

Reportable Segments

Our principal business is the ownership and operation of parking facilities. We do not distinguish our principal business, or group our operations, by geography or size for purposes of measuring performance. Accordingly, we have presented our results as a single reportable segment.

Equity Compensation

Equity compensation is based on the grant date fair value of the equity awards and is recognized as general and administrative expense in our Consolidated Statement of Operations over the requisite service or performance period. Forfeitures are recognized as incurred. Certain equity awards are subject to vesting based upon the satisfaction of various service, market, or performance conditions.

Note C – Acquisitions and Dispositions of Investments in Real Estate

2023

On February 28, 2023, the Company sold a parking lot located in Wildwood, New Jersey for $1.5 million, resulting in a gain on sale of real estate of approximately $0.7 million. The Company received net proceeds of approximately $0.3 million after the repayment of the outstanding mortgage loan, interest and transaction costs.

2022

In June 2022, the Company acquired a 555 space garage located in Oklahoma City, Oklahoma for $17.5 million.

Note D - Intangible Assets

A schedule of the Company’s intangible assets and related accumulated amortization as of ~~March~~June 3130, 2023 and December 31, 2022 is as follows (dollars in thousands):

	As of March 31, 2023				As of December 31, 2022
	As of June 30, 2023				As of December 31, 2022
	Gross carrying amount		Accumulated amortization		Gross carrying amount		Accumulated amortization
In-place lease value	$	2,564	$	1,~~702~~783	$	2,564	$	1,621
Lease commissions		165		~~113~~119		165		106
Indefinite lived contract		3,160		—		3,160		—
Acquired technology		4,~~240~~242		~~672~~784		4,217		561
Total intangible assets	$	10,~~129~~131	$	2,~~487~~686	$	10,106	$	2,288

Amortization of the in-place lease value, lease commissions and acquired technology are included in depreciation and amortization in the accompanying Consolidated Statements of Operations. Amortization expense associated with intangible assets totaled approximately $0.2 million for both the three months ended June 30, 2023 and 2022 and approximately $0.4 million for both the ~~three~~six months ended ~~March~~June 3130, 2023 and 2022.

A schedule of future amortization of acquired intangible assets for the ~~three~~six months ended ~~March~~June 3130, 2023 and thereafter is as follows (dollars in thousands):

	In-place lease value		Lease commissions		Acquired technology
2023 (Remainder)	$	~~241~~161	$	1912	$	~~342~~231
2024		303		20		448
2025		189		9		448
2026		102		34		~~447~~448
2027		2726		1		~~419~~421
Thereafter		-		-		1,~~464~~462
	$	~~862~~781	$	5246	$	3,~~568~~458

- 9 -

Table of Contents

Note E — Notes Payable

As of ~~March~~June 3130, 2023, the principal balances on notes payable are as follows (dollars in thousands):

Loan	Original Debt Amount		Monthly Payment		Balance as of 36/3130/23			Lender		Interest Rate			Loan Maturity
MVP Clarksburg Lot	$	476	I/O		$	379		Vestin Realty Mortgage II			7.50	%	8/25/2023
MVP Milwaukee Old World	$	771	I/O		$	1,871		Vestin Realty Mortgage II			7.50	%	8/25/2023
MVP Milwaukee Clybourn	$	191	I/O		$	191		Vestin Realty Mortgage II			7.50	%	8/25/2023
MVP Cincinnati Race Street, LLC	$	2,550	I/O		$	3,450		Vestin Realty Mortgage II			7.50	%	8/25/2023
Minneapolis Venture	$	2,000	I/O		$	4,000		Vestin Realty Mortgage II			7.50	%	8/25/2023
MVP Memphis Poplar (3)	$	1,800	I/O		$	1,800		LoanCore			5.38	%	3/6/2024
MVP St. Louis (3)	$	3,700	I/O		$	3,700		LoanCore			5.38	%	3/6/2024
Mabley Place Garage, LLC	$	9,000	$	44	$	7,~~583~~532		Barclays			4.25	%	12/6/2024
322 Streeter Holdco LLC	$	25,900	$	130	$	25,~~184~~015		American National Insurance Co.			3.50	%	3/1/2025
MVP Houston Saks Garage, LLC	$	3,650	$	20	$	2,~~935~~907		Barclays Bank PLC			4.25	%	8/6/2025
Minneapolis City Parking, LLC	$	5,250	$	29	$	4,~~341~~302		American National Insurance, of NY			4.50	%	5/1/2026
MVP Bridgeport Fairfield Garage, LLC	$	4,400	$	23	$	3,~~631~~598		FBL Financial Group, Inc.			4.00	%	8/1/2026
West 9th Properties II, LLC	$	5,300	$	30	$	4,~~459~~421		American National Insurance Co.			4.50	%	11/1/2026
MVP Fort Worth Taylor, LLC	$	13,150	$	73	$	11,~~095~~000		American National Insurance, of NY			4.50	%	12/1/2026
MVP Detroit Center Garage, LLC	$	31,500	$	194	$	27,~~424~~160		Bank of America			5.52	%	2/1/2027
MVP St. Louis Washington, LLC (1)	$	1,380	$	8	$	1,~~266~~258		KeyBank	*		4.90	%	5/1/2027
St. Paul Holiday Garage, LLC (1)	$	4,132	$	24	$	3,~~789~~764		KeyBank	*		4.90	%	5/1/2027
Cleveland Lincoln Garage, LLC (1)	$	3,999	$	23	$	3,~~666~~643		KeyBank	*		4.90	%	5/1/2027
MVP Denver Sherman, LLC (1)	$	286	$	2	$	~~262~~260		KeyBank	*		4.90	%	5/1/2027
MVP Milwaukee Arena Lot, LLC (1)	$	2,142	$	12	$	1,~~964~~951		KeyBank	*		4.90	%	5/1/2027
MVP Denver 1935 Sherman, LLC (1)	$	762	$	4	$	~~698~~694		KeyBank	*		4.90	%	5/1/2027
MVP Louisville Broadway Station, LLC (2)	$	1,682	I/O		$	1,682		Cantor Commercial Real Estate	**		5.03	%	5/6/2027
MVP Whitefront Garage, LLC (2)	$	6,454	I/O		$	6,454		Cantor Commercial Real Estate	**		5.03	%	5/6/2027
MVP Houston Preston Lot, LLC (2)	$	1,627	I/O		$	1,627		Cantor Commercial Real Estate	**		5.03	%	5/6/2027
MVP Houston San Jacinto Lot, LLC (2)	$	1,820	I/O		$	1,820		Cantor Commercial Real Estate	**		5.03	%	5/6/2027
St. Louis Broadway, LLC (2)	$	1,671	I/O		$	1,671		Cantor Commercial Real Estate	**		5.03	%	5/6/2027
St. Louis Seventh & Cerre, LLC (2)	$	2,057	I/O		$	2,057		Cantor Commercial Real Estate	**		5.03	%	5/6/2027
MVP Indianapolis Meridian Lot, LLC (2)	$	938	I/O		$	938		Cantor Commercial Real Estate	**		5.03	%	5/6/2027
St Louis Cardinal Lot DST, LLC	$	6,000	I/O		$	6,000		Cantor Commercial Real Estate	**		5.25	%	5/31/2027
MVP Preferred Parking, LLC	$	11,330	$	66	$	11,~~199~~143		Key Bank	**		5.02	%	8/1/2027
Less unamortized loan issuance costs					$	(~~791~~613	)
					$	~~146~~145,~~345~~675

(1)	The Company issued a promissory note to KeyBank for $12.7 million secured by the pool of properties.

(2)	The Company issued a promissory note to Cantor Commercial Real Estate Lending, L.P. (“CCRE”) for $16.25 million secured by the pool of properties.
(3)	The loan is secured by a Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing on each of the properties owned by MVP St. Louis 2013 and MVP Memphis Poplar.

* 2 Year Interest Only

** 10 Year Interest Only

I/O - Interest Only

Reserve funds are generally required for repairs and replacements, real estate taxes, and insurance premiums. Some notes contain various terms and conditions including debt service coverage ratios and debt yield limits. As of ~~March~~June 3130, 2023, borrowers for ~~three~~two of the Company’s loans totaling $5538.37 million, failed to meet certain loan covenants. As a result, we are subject to additional cash management procedures, which resulted in approximately $0.63 million of restricted cash at ~~March~~June 3130, 2023. In order to exit cash management, certain debt service coverage ratios or debt yield tests must be exceeded for two consecutive quarters to return to less restrictive cash management procedures. During the three months ended ~~March~~June 3130, 2023, ~~two loans~~ one loan exited cash management as the ~~properties have~~ property has maintained consecutive quarters of the minimum debt service coverage ratio.

As of March 31, 2023, future principal payments on notes payable are as follows (dollars in thousands):

2023 (remainder)	$	12,262
2024		16,012
2025		29,091
2026		22,708
2027		67,063
Thereafter		—
Total	$	147,136

- 10 -

Table of Contents

As of June 30, 2023, future principal payments on notes payable are as follows (dollars in thousands):

2023 (remainder)	$	11,414
2024		16,012
2025		29,091
2026		22,708
2027		67,063
Thereafter		—
Total	$	146,288

Note F - Revolving Credit Facility

On March 29, 2022, the Company entered into a Credit Agreement (the “Credit Agreement”) with KeyBank Capital Markets, as lead arranger, and KeyBank, National Association, as administrative agent. The Credit Agreement refinanced the Company’s then current loan agreements for certain properties. The Credit Agreement provides for, among other things, a $75.0 million revolving credit facility, originally maturing on April 1, 2023 (the “Revolving Credit Facility”). The Revolving Credit Facility may be increased by up to an additional $75.0 million provided that no event of default has occurred and certain other conditions are satisfied. Borrowings under the Revolving Credit Facility bear interest at a Secured Overnight Financing Rate (“SOFR”) benchmark rate or Alternate Base Rate, plus a margin of between 1.75% and 3.00%, with respect to SOFR loans, or 0.75% to 2.00%, with respect to base rate loans, based on the Company’s leverage ratio as calculated under the Credit Agreement. The Credit Agreement is secured by a pool of properties and requires compliance with certain financial covenants. The Credit Agreement also includes financial covenants that require the Company to (i) maintain a total leverage ratio not to exceed 65.0%, (ii) not to exceed certain fixed charge coverage ratios, and (iii) maintain a certain tangible net worth.

During 2022, the Company drew $73.7 million on the Revolving Credit Facility to pay-off certain mortgage loans and fund an acquisition of a single garage.

On November 17, 2022, the Company executed an amendment to the Credit Agreement which extends the maturity of the Revolving Credit Facility to April 1, 2024, amends certain financial covenants through the new term, and adds a requirement for the Company to use diligent efforts to pursue an equity raise or liquidity event by March 31, 2023. As of ~~March 31~~June 30, 2023, the Company was not in compliance with all applicable covenants in agreements governing its debt, resulting in events of default.

As of ~~March 31~~June 30, 2023, the balance of unamortized loan fees associated with the Revolving Credit Facility is $0.86 million which is being amortized to interest expense in the Consolidated Statements of Operations over the remaining term.

Note G - Equity

Series A Preferred Stock

On November 1, 2016, the Company commenced an offering of up to $50 million in shares of the Company’s Series A Convertible Redeemable Preferred Stock (“Series A Preferred Stock”), par value $0.0001 per share, together with warrants to acquire the Company’s Common Stock, in a Regulation D 506(c) private placement to accredited investors.

The holders of the Series A Preferred Stock are entitled to receive, when and as authorized by the Board of Directors and declared by the Company out of funds legally available for the payment of dividends, cash dividends at the rate of 5.75% per annum of the initial stated value of $1,000 per share. Since a Listing Event, as defined in the charter, did not occur by March 31, 2018, the cash dividend rate has been increased to 7.50%, until a Listing Event at which time, the annual dividend rate will be reduced to 5.75% of the stated value.

On March 24, 2020, the Company’s Board of Directors unanimously authorized the suspension of the payment of distributions on the Series A Preferred Stock; however, such distributions will continue to accrue in accordance with the terms of the Series A Preferred Stock. Since initial issuance, the Company had declared distributions of approximately $1.3 million of which approximately $0.6 million had been paid to Series A stockholders. As of ~~March~~June 3130, 2023 and December 31, 2022, approximately $0.7 million and $0.6 million of Series A Preferred Stock distributions that were accrued and unpaid, respectively, are included in accounts payable and accrued expenses on the Consolidated Balance Sheet.

Series 1 Preferred Stock

On March 29, 2017, the Company filed with the State Department of Assessments and Taxation of Maryland Articles Supplementary to the charter of the Company classifying and designating 97,000 shares of its authorized capital stock as shares of Series 1 Convertible Redeemable Preferred Stock (“Series 1 Preferred Stock”), par value $0.0001 per share. On April 7, 2017, the Company commenced the Regulation D 506(b) private placement of shares of Series 1 Preferred Stock, together with warrants to acquire the Company’s common stock, to accredited investors.

The holders of the Series 1 Preferred Stock are entitled to receive, when and as authorized by the Company’s Board of Directors and declared by us out of legally available funds, cumulative, cash dividends on each share at an annual rate of 5.50% of the stated value pari passu with the dividend preference of the Series A Preferred Stock and in preference to any payment of any dividend on the Company’s common stock; provided that since a Listing Event, as defined in the charter, has not occurred by April 7, 2018, the annual dividend rate on all Series 1 Preferred Stock shares has been increased to 7.00% of the stated value until the occurrence of a Listing Event, at which time, the annual dividend rate will be reduced to 5.50% of the stated value.

Each holder of Series 1 Preferred Stock received, for every $1,000 in shares subscribed by such holder, detachable warrants to purchase 35 shares of the Company’s common stock if the Company’s common stock is listed on a national securities exchange. Since a Listing Event did not occur on or prior to the fifth anniversary of the final closing date of the offering (ie. January 31, 2023), the outstanding warrants automatically expired.

- 11 -

Table of Contents

~~On March~~The ~~24,~~holders ~~2020~~of the Series 1 Preferred Stock are entitled to receive, when and as authorized by the Company’s Board of Directors ~~unanimously~~and ~~authorized~~declared ~~the~~by ~~suspension~~us out of ~~the~~legally ~~payment~~available offunds, ~~distributions~~cumulative, oncash ~~the~~dividends ~~Series~~on 1each ~~Preferred~~share ~~Stock,~~at ~~however,~~an ~~such~~annual ~~distributions~~rate ~~will~~of 5.50% ~~continue~~of tothe ~~accrue~~stated invalue ~~accordance~~pari passu with the ~~terms~~dividend preference of the Series 1A Preferred Stock. ~~Since~~and ~~initial~~in ~~issuance,~~preference ~~the~~to ~~Company~~any ~~had~~payment ~~declared distributions~~ of ~~approximately~~any ~~$15.0 million of~~dividend ~~which~~on ~~approximately~~the ~~$6.4~~Company’s ~~million~~common ~~had~~stock; ~~been~~provided ~~paid~~that tosince ~~Series~~a 1Listing ~~Preferred~~Event, ~~Stock~~as ~~stockholders.~~defined Asin the ~~of March 31~~charter, ~~2023~~ ~~and December~~has not occurred 31by April 7, ~~2022~~2018, the ~~approximately~~annual ~~$8.6~~dividend rate on all Series ~~million~~1 Preferred ~~and~~Stock $shares has been increased to 7.~~9 million~~00% of ~~Series~~the 1stated ~~Preferred~~value ~~Stock~~until ~~distributions~~the ~~that~~occurrence ~~were~~of ~~accrued~~a ~~and~~Listing ~~unpaid~~Event, ~~respectively~~at which time, ~~are~~the ~~included~~annual individend ~~accounts~~rate ~~payable~~will ~~and~~be ~~accrued~~reduced ~~expenses~~to 5.50% onof the ~~consolidated~~stated ~~balance sheet~~value.

Each holder of Series 1 Preferred Stock received, for every $1,000 in shares subscribed by such holder, detachable warrants to purchase 35 shares of the Company’s common stock if the Company’s common stock is listed on a national securities exchange. Since a Listing Event did not occur on or prior to the fifth anniversary of the final closing date of the offering (ie. January 31, 2023), the outstanding warrants automatically expired.

On March 24, 2020, the Company’s Board of Directors unanimously authorized the suspension of the payment of distributions on the Series 1 Preferred Stock, however, such distributions will continue to accrue in accordance with the terms of the Series 1 Preferred Stock. Since initial issuance, the Company had declared distributions of approximately $15.7 million of which approximately $6.4 million had been paid to Series 1 Preferred Stock stockholders. As of June 30, 2023 and December 31, 2022, approximately $9.3 million and $7.9 million of Series 1 Preferred Stock distributions that were accrued and unpaid, respectively, are included in accounts payable and accrued expenses on the consolidated balance sheet.

Warrants

In accordance with its warrant agreement between the Company and Color Up, dated August 25, 2021 (the “Warrant Agreement”), Color Up has the right to purchase up to 1,702,128 shares of common stock, at an exercise price of $11.75 per share for an aggregate cash purchase price of up to $20.0 million (the “Common Stock Warrants”). Each whole Common Stock Warrant entitles the registered holder thereof to purchase one whole share of common stock at a price of $11.75 per share, subject to customary adjustments, at any time following a “Liquidity Event,” which is defined as an initial public offering and/or listing of the common stock on the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange. The Common Stock Warrants will expire on August 25, 2026.

The Common Stock Warrants are classified as equity and recorded at the issuance date fair value.

Securities Purchase Agreement

On November 2, 2021, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) by and among the Company, the Operating Partnership, and HS3, pursuant to which the Operating Partnership issued and sold to HS3 (a) 1,702,128 newly issued OP Units; and (b) 425,532 newly-issued Class A units of limited partnership of the Operating Partnership (“Class A Units”) which entitle HS3 to purchase up to 425,532 additional OP Units (the “Additional OP Units”) at an exercise price equal to $11.75 per Additional OP Unit, subject to adjustment as provided in the Class A Unit agreement, and HS3 paid to the Operating Partnership cash consideration of $20.0 million. The Additional OP Units are available to be exercised only upon completion of a Liquidity Event, as defined in the Securities Purchase Agreement.

Convertible Noncontrolling Interests

As of ~~March~~June 3130, 2023, the Operating Partnership had approximately 17.0 million OP Units outstanding, excluding any equity incentive units granted. Under the terms of the Third Amended and Restated Limited Partnership Agreement, OP Unit holders may elect to exchange certain OP Units for shares of the Company’s Common Stock upon completion of a liquidity event. The OP Units outstanding as of ~~March~~June 3130, 2023 are classified as noncontrolling interests within permanent equity on our Consolidated Balance Sheet.

Dividend Reinvestment Plan

The Company has a Dividend Reinvestment Plan (“DRIP”) which allows its stockholders to invest distributions in additional shares of our common stock, subject to certain limits. Stockholders who elect to participate in the DRIP may choose to invest all or a portion of their cash distributions in shares of our common stock at a price equal to our most recent estimated value per share. On March 22, 2018, the Company suspended payment of distributions and as such there are currently no distributions to invest in the DRIP.

- 12 -

Table of Contents

Share Repurchase Program

On May 29, 2018, the Company’s Board of Directors suspended the Share Repurchase Program, other than for hardship repurchases in connection with a shareholder’s death. Repurchase requests made in connection with the death of a stockholder can be repurchased at a price per share equal to 100% of the amount the stockholder paid for each share, or once the Company had established an estimated NAV per share, 100% of such amount as determined by the Company’s Board of Directors, subject to any special distributions previously made to the Company’s stockholders. On March 24, 2020, the Board of Directors suspended all repurchases, even in the case of a stockholder’s death.

Note H — Equity Compensation

On February 28, 2023, Mr. Chavez and Ms. Hogue were granted 81,301 and 50,813 LTIP Units, respectively, in lieu of their 2022 target annual bonus. Of these awards granted to Mr. Chavez and Ms. Hogue, 13,550 and 10,163 LTIP Units vested immediately, with the remaining scheduled to vest over a three year period. The grant date fair value was determined to be $13.48 per unit for each of the LTIP Units awarded. Additionally, the non-management members of the Board of Directors were granted 26,082 LTIP Units in lieu of their 2022 compensation. The Director’s LTIP Units will vest over a three year period, with the exception of immediate vesting for LTIP Units granted to Shawn Nelson, a former director that retired from the Board effective December 31, 2022. The grant date fair value was determined to be $14.76 per unit for each of the LTIP Units awarded to the non-management members of the Board.

For the three and six months ended ~~March~~June 3130, 2023, the Company recognized $1.42 million and $2.6 million in non-cash amortization of equity awards, respectively. No amortization expense was recognized for the three and six months ended ~~March~~June 3130, 2022. As of ~~March~~June 3130, 2023 there was $2019.3 1 million of unrecognized non-cash amortization, including $15.7 million for LTIP Units and Performance LTIP Units (“PUs”) granted in 2022 which vest upon the achievement of a Liquidity Event (as defined in the respective LTIP agreements) and/or certain performance measures, which are considered not probable.

~~- 12~~The - following table sets forth a roll forward of all incentive equity awards for the six months ended June 30, 2023:

Table of Contents

	*As of June 30, 2023*
	Number of Incentive Equity Awards			Weighted Avg Grant FV Per Share
Unvested - January 1, 2023		1,782,027		$	12.65
Granted		158,196			13.69
Vested		(32,422	)		13.91
Forfeited		—			—
Unvested - June 30, 2023		1,907,801		$	12.72

The following table sets forth a roll forward of all incentive equity awards for the three months ended March 31, 2023:

	As of March 31, 2023
	Number of Incentive Equity Awards			Weighted Avg Grant FV Per Share
Unvested - January 1, 2023		1,782,027		$	12.65
Granted		158,196			(13.69	)
Vested		(29,562	)		13.76
Forfeited		—			—
Unvested - March 31, 2023		1,910,661		$	12.72

Note I - Earnings Per Share

Basic and diluted loss per weighted average common share (“EPS”) is calculated by dividing net income (loss) attributable to the Company’s common stockholders, including any participating securities, by the weighted average number of shares outstanding for the period. The Company includes the effect of participating securities in basic and diluted earnings per share computations using the two-class method of allocating distributed and undistributed earnings when the two-class method is more dilutive than the treasury stock method. Outstanding warrants were antidilutive as a result of the net loss for the three and six months ended ~~March 31~~June 30, 2023 and 2022 and therefore were excluded from the dilutive calculation. The Company includes unvested PUs as contingently issuable shares in the computation of diluted EPS once the market criteria is met, assuming that the end of the reporting period is the end of the contingency period. The Company had 150,000 additional performance units that were granted to our executive officers on May 27, 2022, which are considered antidilutive to the dilutive loss per share calculation for the three and six months ended ~~March 31~~June 30, 2023~~. The~~ ~~Company~~and ~~did not have any additional dilutive shares resulting in basic loss per share equaling dilutive loss per share for the three months ended March 31,~~ 2022.

The following table reconciles the numerator and denominator used in computing the Company’s basic and diluted per-share amounts for net loss attributable to common stockholders for the three and six months ended ~~March~~June 3130, 2023 and 2022 (dollars in thousands):

	For the three months ended						For the six months ended
	March 31, 2023			March 31, 2022
	June 30, 2023			June 30, 2022			June 30, 2023			June 30, 2022
Numerator:
Net loss attributable to MIC	$	(2,~~298~~468	)	$	(2,~~186~~740	)	$	(4,765	)	$	(4,893	)
Net loss attributable to participating securities		—			—			—			—
Net loss attributable to MIC common stock	$	(2,~~298~~468	)	$	(2,~~186~~740	)	$	(4,765	)	$	(4,893	)
Denominator:
Basic and dilutive weighted average shares of Common Stock outstanding		7,762,375			7,762,375			7,762,375			7,762,375
Basic and diluted loss per weighted average common share:
Basic and dilutive	$	(0.3032	)	$	(0.2835	)	$	(0.61	)	$	(0.63	)

- 13 -

Table of Contents

Note J – Variable Interest Entities

The Company, through a wholly owned subsidiary of its Operating Partnership, owns a 51.0% beneficial interest in MVP St. Louis Cardinal Lot, DST, a Delaware Statutory Trust (“MVP St. Louis”). MVP St. Louis is the owner of a 2.56-acre, 376-vehicle commercial parking lot, known as the Cardinal Lot.

MVP St. Louis is considered VIE and the Company concludes that it is the primary beneficiary since the power to direct the activities that most significantly impact the economic performance of MVP St. Louis was held by MVP Parking DST, LLC (the “Manager”) and certain subsidiaries of the Manager, which is controlled by Mr. Chavez.

As a result, the Company consolidates its investment in MVP St. Louis and MVP St. Louis Cardinal Lot Master Tenant, LLC, which had total assets of approximately $1112.90 million (substantially all real estate investments) and liabilities of approximately $6.01 million (substantially all mortgage debt) as of ~~March 31~~June 30, 2023.

- 13 -

Table of Contents

Note K - Income Taxes

The Company previously elected to be taxed as a REIT for federal income tax purposes and operated in a manner that allowed the Company to qualify as a REIT through December 31, 2019. As a consequence of the COVID-19 pandemic, the Company earned management income in lieu of lease income from a number of distressed tenants, which did not constitute qualifying REIT income for purposes of the annual REIT gross income tests, and, as a result, the Company was not in compliance with the annual REIT income tests for the year ended December 31, 2020. Accordingly, the Company did not qualify for taxation as a REIT in 2020 and continues to be taxed as a C corporation. As a C corporation, the Company is subject to federal income tax on its taxable income at regular corporate rates.

A full valuation allowance for deferred tax assets was historically provided each year since the Company believed that as a REIT it was more likely than not that it would not realize the benefits of its deferred tax assets. As a taxable C Corporation, the Company has evaluated its deferred tax assets for the ~~three~~six months ended ~~March~~June 3130, 2023, which consist primarily of net operating losses and its investment in the Operating Partnership. Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended ~~December~~June 3130, ~~2022~~2023. Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth. Despite substantial growth in property-level operations, the Company has continued to generate a net loss and as such the Company has determined that it will continue to record a full valuation allowance against its deferred tax assets for the ~~three~~six months ended ~~March~~June 3130, 2023. A change in circumstances may cause the Company to change its judgment about whether deferred tax assets should be recorded, and further whether any such assets would more likely than not be realized. The Company would generally report any change in the valuation allowance through its Consolidated Statements of Operations in the period in which such changes in circumstances occur.

Note L — Fair Value

A fair value measurement is based on the assumptions that market participants would use in pricing an asset or liability in an orderly transaction. The hierarchy for inputs used in measuring fair value are as follows:

Level 1 – Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 – Inputs include quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations whose inputs are observable.

Level 3 – Model-derived valuations with unobservable inputs.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

The Company's financial instruments include cash and cash equivalents, restricted cash, accounts receivable and accounts payable. Due to their short maturities, the carrying amounts of these assets and liabilities approximate fair value. The estimated fair value of the Company’s debt (including notes payable and the Revolving Credit Facility) was derived using Level 2 inputs and approximate $~~207~~206.64 million and $207.4 million as of ~~March~~June 3130, 2023 and December 31, 2022, respectively.

Our real estate assets are measured and recognized at fair value on a nonrecurring basis when we determine an impairment has occurred. To estimate fair value the Company may use internally developed valuation models or independent third-parties. 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. Each of these approaches utilized estimates and assumptions regarding an assets’ future performance and cash flows as well as market conditions, capitalization rates and discount rates which are all considered Level 2 inputs.

- 14 -

Table of Contents

Note M— Commitments and Contingencies

The nature of the Company’s business exposes our properties, the Company, the Operating Partnership and its other subsidiaries to the risk of claims and litigation in the normal course of business. Other than as noted below, or routine litigation arising out of the ordinary course of business, the Company is not presently subject to any material litigation nor, to its knowledge, is any material litigation threatened against the Company.

The Company has previously disclosed stockholder class action lawsuits alleging direct and derivative claims against the Company, certain of its then-officers, then-directors, the Former Advisor and/or Mr. Shustek captioned Arthur Magowski v. The Parking REIT, Inc., et. al, No. 24-C-19003125 (filed on May 31, 2019), Michelle Barene v. The Parking REIT, Inc., et. al, No. 24-C-19003527 (filed on June 27, 2019) and SIPDA Revocable Trust v. The Parking REIT, Inc., et al, Case No. 2:19-cv-00428 (filed on March 12, 2019). As a result of the Transaction, the Settlement Agreement (as defined in the Purchase Agreement) was entered into subject to completion of Color Up’s Tender Offer (as defined in the Purchase Agreement) for up to 900,506 shares of the Company’s outstanding Common Stock at $11.75 per share. Upon the expiration of the Tender Offer on November 5, 2021, the terms of the Settlement Agreement were satisfied and the prior lawsuits settled.

- 14 -

Table of Contents

The Company has previously disclosed that the SEC was conducting an investigation relating to the Company. On March 11, 2021, the SEC notified the Company that they do not intend to recommend an enforcement action by the Commission against the Company.

The SEC investigation also related to the conduct of the Company’s former chairman and chief executive officer, Mr. Shustek. On July 29, 2021, the SEC filed a civil lawsuit against Mr. Shustek and his advisory firm Vestin Mortgage LLC, alleging violations of the securities laws (Case 2-21-civ-01416-JCM-BNW, U.S. District Court, District of Nevada). The SEC seeks disgorgement, injunctions, and bars against Mr. Shustek, and related penalties. Pursuant to the Transaction, Mr. Shustek's right to indemnification by the Company for certain claims related to the SEC's investigation shall not exceed $2 million. This liability was recognized by the Company upon the closing of the Transaction and is included in indemnification liability on our Consolidated Balance Sheet. Effective as of the closing of the Transaction, Mr. Shustek resigned as Chief Executive Officer and director of the Company. On March 6, 2023, Mr. Shustek filed a complaint against the Company seeking advancement of indemnification expenses related to the SEC investigation (Case No. 1:2023CV00599). The Company denies the allegations that Mr. Shustek is entitled to advancement of expenses and intends to vigorously defend the lawsuit.

On August 25, 2021, the Company also entered into an Assignment of Claims, Causes of Action, and Proceeds Agreement, or the Assignment of Litigation Agreement, pursuant to which the Company assigned to the Former Advisor certain claims and claim proceeds that the Company had against Ira S. Levine, Levine Law Group, Inc. (or any other name by which a firm including Ira Levine was known), Edwin Herbert Bentzen IV and Andrew Fenton. ~~The Settlement Agreement is not related to the Assignment of Litigation Agreement.~~ On April 3, 2023, the parties entered into a settlement agreement and mutual release related to the Ira Levine matter. The Settlement Agreement is not related to the Assignment of Litigation Agreement.

In January 2023, the 43rd District Court of Parker County, Texas entered summary judgment in favor of the plaintiff, John Roy, who alleges he is due a commission relating to a proposed sale of the Fort Worth Taylor parking facility which was never consummated. The Company has filed an appeal. As a result of the court’s summary judgment, in December 2022 we recognized a charge of $0.7 million for the full estimated amount of damages (including legal fees and costs). The $0.7 million was recognized within organizational, offering and other costs in our Consolidated Statements of Operations and indemnification liability on our Consolidated Balance Sheets. During the first quarter of 2023, and as part of the appeals process, the Company posted cash collateral of $0.7 million for an appeals bond, which is reflected in Cash - Restricted on our Consolidated Balance Sheets.

Note N — Related Party Transactions and Arrangements

Two of the Company’s assets, 1W7 Carpark and 222W7, are currently operated by PCA, Inc., dba Park Place Parking. Park Place Parking is a private parking operator that is wholly owned by relatives of the Company’s CEO. The Company’s CEO is neither an owner nor beneficiary of Park Place Parking. Park Place Parking has been operating these assets for five and four years, respectively. Both assets were acquired in 2021 with their management agreements in place. As of ~~March~~June 3130, 2023 and 2022, the Company recorded a balance of approximately $0.2 million and $0.1 million, respectively, from Park Place Parking which is included in accounts receivable, net on the Consolidated Balance Sheets and has been paid subsequent to ~~March~~June 3130, 2023 within terms of the lease agreement.

In connection with the Company's recapitalization transaction in August 2021, the Company owes approximately $469,231 to certain member entities of Color Up relating to prorated revenues for the month of August 2021 of the three properties contributed by Color Up. The accrual is reflected within due to related parties on the Consolidated Balance Sheets.

Additionally, in connection with the Company's recapitalization transaction in August 2021, the Company was due approximately $156,000 from Color Up as consideration for OP Units then issued which was reflected within due from related parties on the Consolidated Balance Sheet as of December 31, 2022. The Company received all amounts due in March 2023.

License Agreement

On August 25, 2021, the Company entered into a Software License and Development Agreement with an affiliate of Bombe Asset Management, Ltd., an affiliate of the Company’s CEO and CFO, or the Supplier, pursuant to which the Company granted to the Supplier a limited, non-exclusive, non-transferable, worldwide right and license to access certain software and services for a fee of $5,000 per month.

Tax Matters Agreement

On August 25, 2021, the Company, the Operating Partnership and Color Up entered into the Tax Matters Agreement, or the Tax Matters Agreement, pursuant to which the Operating Partnership agreed to indemnify Color Up and certain affiliates and transferees of Color Up, together, the Protected Partners, against certain adverse tax consequences in connection with (1) (i) a taxable disposition of certain specified properties and (ii) certain dispositions of the Protected Partners’ interest in the Operating Partnership, in each case, prior to the tenth anniversary of the completion of the Transaction (or earlier, if certain conditions are satisfied); and (2) the Operating Partnership’s failure to provide the Protected Partners the opportunity to guarantee a specified amount of debt of the Operating Partnership during the period ending on the tenth anniversary of the completion of the Transaction (or earlier, if certain conditions are satisfied). In addition, and for so long as the Protected Partners own at least 20% of the units in the Operating Partnership received in the Transaction, the Company agreed to use commercially reasonable efforts to provide the Protected Partners with similar guarantee opportunities.

- 15 -

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a financial review and analysis of the Company’s financial condition and results of operations for the three and six months ended ~~March~~June 3130, 2023 and 2022. This discussion and analysis should be read in conjunction with the accompanying consolidated financial statements and the notes thereto and Management's Discussion and Analysis of Financial Conditions and Results of Operations in the Company’s annual report on Form 10-K for the year ended December 31, 2022. As used herein, the terms “we,” “our” and “us” refer to Mobile Infrastructure Corporation, and, as required by context, Mobile Infra Operating Partnership, L.P., formerly known as MVP REIT II Operating Partnership, LP, which the Company refers to as the “Operating Partnership,” and to their subsidiaries.

Forward-Looking Statements

Certain statements included in this quarterly report on Form 10-Q (this “Quarterly Report”) that are not historical facts (including any statements concerning investment objectives, other plans and objectives of management for future operations or economic performance, or assumptions or forecasts related thereto) are forward-looking statements. Forward-looking statements are typically identified by the use of terms such as “may,” “should,” “expect,” “could,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “predict,” “potential” or the negative of such terms and other comparable terminology.

The forward-looking statements included herein are based upon the Company’s current expectations, plans, estimates, assumptions and beliefs, which involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the Company’s control. Although the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, the actual results and performance could differ materially from those set forth in the forward-looking statements. Factors which could have a material adverse effect on operations and future prospects include, but are not limited to:

	●	the fact that the Company has limited history, as the Company was formed in 2015;
	●	the Company’s ability to complete and realize the expected benefits of a liquidity event, including the consummation of the ~~proposed~~pending merger with Fifth Wall Acquisition Corporation III;

● the Company's ability to achieve positive future financial and operating performance after the ~~proposed~~pending merger with Fifth Wall Acquisition Corporation III;

●

the Company’s ability to generate sufficient cash flows to pay distributions to the Company’s stockholders;

●

the impact on our business and those of our tenants from epidemics, pandemics or outbreaks of an illness, disease or virus (including COVID-19), including lockdowns and similar mandates;

●

the fact that the Company has experienced net losses since inception and may continue to experience additional losses;

●

changes in economic conditions generally and the real estate and debt markets specifically, including economic trends impacting parking facilities;

●

risks inherent in the real estate business, including tenant defaults, potential liability relating to environmental matters and the lack of liquidity of real estate investments;

●

competitive factors that may limit the Company’s ability to make investments or attract and retain tenants;

●

the ability of leases under our New Lease Structure (as defined below) to provide increases in same property rental revenue as compared to our prior leases;

●

the Company’s ability to attain its investment strategy or increase the value of its portfolio;

●

the loss of key personnel could have a material adverse effect upon the Company's ability to conduct and manage the Company’s business;

●

the performance of properties the Company has acquired or may acquire or loans the Company has made or may make that are secured by real property;

●

the Company’s ability to successfully integrate pending acquisitions and transactions and implement an operating strategy;

●

potential damage and costs arising from natural disasters, terrorism and other extraordinary events, including extraordinary events affecting parking facilities included in the Company’s portfolio;

●

the Company’s ability to act on its pipeline of acquisitions;

●

the availability of capital and debt financing generally, and any failure to obtain debt financing at favorable terms or a failure to satisfy the conditions, covenants and requirements of that debt;

●

changes in interest rates;

●

the Company’s ability to negotiate amendments or extensions to existing debt agreements;

●

the Company’s loss of REIT status and ability to remediate its loss of REIT status under U.S. federal income tax law;

●

potential adverse impacts from changes to the U.S. tax laws; and

●

changes to generally accepted accounting principles in the United States, or GAAP.

Any of the assumptions underlying the forward-looking statements included herein could be inaccurate, and undue reliance should not be placed upon any forward-looking statements included herein. All forward-looking statements are made as of the date of this Quarterly Report, and the risk that actual results will differ materially from the expectations expressed herein will increase with the passage of time. Except as otherwise required by the federal securities laws, the Company undertakes no obligation to publicly update or revise any forward looking statements made after the date of this Quarterly Report, whether as a result of new information, future events, changed circumstances or any other reason. In light of the significant uncertainties inherent in the forward looking statements included in this Quarterly Report, the inclusion of such forward-looking statements should not be regarded as a representation by us or any other person that the objectives and plans set forth in this Quarterly Report will be achieved.

- 16 -

Table of Contents

Overview

The Company focuses on acquiring, owning and leasing parking facilities and related infrastructure, including parking lots, parking garages and other parking structures throughout the United States. The Company targets both parking garage and surface lot properties primarily in top 50 U.S. Metropolitan Statistical Areas (“MSAs”), with proximity to key demand drivers, such as commerce, events and venues, government and institutions, hospitality and multifamily central business districts.

Merger with Fifth Wall Acquisition Corp. III

●

each then issued and outstanding Class A Share of FWAC will convert, on a one-for-one basis, into one share of New MIC common stock;

●

each then issued and outstanding share of the Company’s common stock will convert, on a one-to-1.5 basis, into one share of New MIC common stock;

●

Additionally, inon ~~connection~~June ~~with~~15, ~~the~~2023, ~~execution~~HS3, ofHarvest ~~the~~Small ~~Merger~~Cap ~~Agreement~~Partners, ~~FWAC~~L.P. ~~entered~~and ~~into~~Harvest ~~subscription~~Small ~~agreements~~Cap ~~with~~Partners Master, Ltd., entities controlled by Mr. Osher, and Bombe-MIC Pref, LLC, an ~~initial~~entity ~~PIPE~~controlled ~~investor~~by Mr. Chavez and of which Ms. Hogue is a member, (collectively, the “~~Initial~~Preferred PIPE ~~Investor~~Investors”), each entered into a Subscription Agreement with FWAC pursuant to which, among other things, the ~~Initial~~Preferred PIPE ~~Investor~~Investors agreed to ~~purchase~~subscribe ~~from~~for ~~New~~and ~~MIC~~purchase, ~~prior~~and toFWAC orhas ~~substantially~~agreed ~~concurrently~~to ~~with~~issue ~~the~~and ~~closing~~sell ofto the ~~Merger~~Preferred PIPE Investors, ~~$10~~a ~~million~~total of ~~common~~ ~~stock~~46,000 shares of Series 2 Convertible Preferred Stock, par value $0.0001 per share, ~~of New MIC~~ (the “~~New~~Series ~~MIC~~2 ~~Common~~Preferred Stock”), of New MIC at $~~10.00~~1,000 per 1share for an aggregate purchase price of $46,000,000. Subject to the terms and conditions of the Subscription Agreement, the Series 2 Preferred Stock will convert into approximately 12,534,060 shares of New MIC Common Stock on December 31, 2023. The ~~Initial~~Series ~~PIPE~~2 ~~Investor~~Preferred isStock ~~controlled~~will bybe ~~Jeffrey~~entitled ~~Osher,~~to receive dividends at a ~~member~~cumulative annual rate of 10% during the ~~Company’s~~period ~~Board~~between the initial issuance of ~~Directors~~such shares and athe ~~control~~conversion ~~person~~thereof into shares of ~~HS3~~New MIC Common Stock. Dividends will be paid in kind and also convert into shares of New MIC Common Stock on the conversion date.

The Merger ~~Agreement~~was ~~also~~approved ~~contemplates~~by ~~other~~a ~~PIPE~~majority ~~investments~~of ~~through~~ the ~~entry~~Company’s ~~into~~stockholders ~~one~~at ora ~~more~~meeting ~~additional~~held ~~subscription~~on ~~agreements~~August ~~with~~10, ~~one~~2023. The orMerger ~~more~~is ~~investors~~expected to ~~purchase~~close ~~Class~~on Aor ~~Shares~~around ofAugust ~~FWAC~~18, ~~New MIC Common Stock, New MIC preferred stock or convertible notes of New MIC~~2023.

Objectives

Over the next twelve months, management of the Company will be focused predominantly on the following strategic objectives:

• Completing the Merger with FWAC ~~and attracting a number of PIPE investors~~ in order to provide liquidity to the Company’s ~~scale~~stockholders and ~~capacity~~the ~~for~~pay ~~growth~~down of certain indebtedness of the Company; • Working with third-party operators to optimize the performance of the Company’s parking facilities and other assets to move towards cash flow positivity; • Reducing corporate overhead to move the Company towards profitability; • Pursuing options for refinancing near-term debt maturities; and • Continuing to identify paths for remediation of REIT status.

Management of the Company has continued to work closely with our tenants to evaluate capital requirements of the assets, with a view to understanding current and future demand drivers of those assets. The Company has been implementing its proprietary technology which provides real-time information on the performance of assets. Under the New Lease Structure, the Company has funded capital expenditures related to upgrades and optimization of our parking facilities, including but not limited to gate arm systems, lighting, and large capital improvements to structure and concrete. We expect to maintain an active dialogue with our tenants for the betterment of the Company’s portfolio.

- 17 -

Table of Contents

Management of the Company has continued to work closely with our tenants to evaluate capital requirements of the assets, with a view to understanding current and future demand drivers of those assets. The Company has been implementing its proprietary technology which provides real-time information on the performance of assets. Under the new lease structure, which requires tenants to pay a lower base rent (typically $500-$1,000 per month) and percentage rent equal to a designated percentage (typically 90%) of the amount by which gross revenues at the property during any lease year exceed a negotiated base amount ("New Lease Structure"), the Company has funded capital expenditures related to upgrades and optimization of our parking facilities, including but not limited to gate arm systems, lighting, and large capital improvements to structure and concrete. We expect to maintain an active dialogue with our tenants for the betterment of the Company’s portfolio.

Investment Strategy & Criteria

~~The~~Because the Company’s management team has a long experience in the parking industry, the Company often receives off-market calls for parking facilities that are not yet being marketed for sale, as well as have early notices on properties just getting ready to be marketed. As such, the Company has a pipeline of acquisitions that is both bespoke and actionable, that the Company believes are off-market and largely unavailable to our competitors. The Company intends to continue to consolidate the industry through acquisitions, partnering with both owners and tenants, to create a meaningful pipeline and scale.

The Company’s investment strategy has historically focused primarily on acquiring, owning and leasing parking facilities, including parking lots, parking garages and other parking structures throughout the United States. The Company has historically focused primarily on investing in income-producing parking lots and garages with air rights in MSAs. In expanding the Company’s portfolio, the Company will seek geographically diverse investments that address multiple key demand drivers and demonstrate consistent consumer use that are expected to generate cash flows and provide greater predictability during periods of economic uncertainty. Such targeted investments include, but are not limited to, parking facilities near one or more of the following key demand drivers:

	•	Commerce
	•	Events and venues
	•	Government and institutions
	•	Hospitality
	•	Multifamily central business districts

The Company generally targets parking facilities that are near multiple key demand drivers so as not to be solely reliant on a single source of income. Parking garages in downtown cores constitute a large portion of the Company’s parking facilities as they serve multiple key demand drivers.

The Company works closely with our current tenants to understand the return to each individual market, both as the Company considers the key demand drivers of the Company’s current assets, as well as new assets that the Company may consider acquiring as part of our investment strategy. The Company’s deep relationships with key tenants help facilitate collaboration with respect to our portfolio.

The Company is focused on acquiring properties that are expected to generate cash flow, located in populated MSAs and expected to produce income within 12 months of the properties’ acquisition. The Company intends to acquire under-managed parking facilities and collaborate with its tenants to implement a tailored, value-add approach that includes fostering the implementation of identified value levers and mitigating risk exposure, while fostering local business relationships to derive market knowledge and connectivity.

In the event of a future acquisition of properties, the Company would expect the foregoing criteria to serve as guidelines; however, management and the Company’s Board of Directors may vary from these guidelines to acquire properties which they believe represent value or growth opportunities.

The Company cannot assure you that the Company will attain investment objectives or that the value of the Company’s assets will not decrease. The Company’s Board of Directors utilizes the investment policies to ensure investment decisions are in the best interests of the Company’s stockholders.

Trends and Other Factors Affecting Our Business

Various trends and other factors affect or have affected the Company's operating results, including:

The COVID-19 Pandemic

The COVID-19 pandemic has significantly adversely impacted global economic activity, contributing to significant volatility. The return to normalized movement is relatively uneven among markets and industries, which has impacted the performance of our assets, as many of the Company’s properties are located in urban centers, near government buildings, entertainment centers, or hotels. While the employment level in the United States has nearly returned to 2019 levels, 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. During 2020 and 2021, many state and local governments restricted public gatherings and implemented social distancing measures, which has, in some cases, eliminated or severely reduced the demand for parking. Governments have now lifted or modified most of these measures, which should continue to encourage greater movement around and between cities. Should public health restrictions be reinstated due to COVID-19 or any future pandemic, the Company’s rental revenue may continue to be adversely affected and may be further materially adversely affected to the extent that economic conditions result in the elimination of jobs or the migration of jobs from the urban centers where the Company’s parking facilities are situated to other locations. In particular, a majority of the Company’s property leases call for additional percentage rent, which will be adversely impacted by a decline in the demand for parking. However, we see increasing demand for multi-use assets that have exposure to entertainment and sporting venues or have exposure to driving travel through hotel relationships. As restrictions continue to lift across the United States, we anticipate a return to normal, in particular a return to driving vacations, which may positively impact the longer-term outlook of central business districts.

- 18 -

Table of Contents

The COVID-19 Pandemic

The COVID-19 pandemic has significantly adversely impacted global economic activity, contributing to significant volatility. The return to normalized movement is relatively uneven among markets and industries, which has impacted the performance of our assets, as many of the Company’s properties are located in urban centers, near government buildings, entertainment centers, or hotels. While the employment level in the United States has nearly returned to 2019 levels, 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. During 2020 and 2021, many state and local governments restricted public gatherings and implemented social distancing measures, which has, in some cases, eliminated or severely reduced the demand for parking. Governments have now lifted these measures, which should continue to encourage greater movement around and between cities. Should public health restrictions be reinstated due to COVID-19 or any future pandemic, the Company’s rental revenue may continue to be adversely affected and may be further materially adversely affected to the extent that economic conditions result in the elimination of jobs or the migration of jobs from the urban centers where the Company’s parking facilities are situated to other locations. In particular, a majority of the Company’s property leases call for additional percentage rent, which will be adversely impacted by a decline in the demand for parking. However, we see increasing demand for multi-use assets that have exposure to entertainment and sporting venues or have exposure to driving travel through hotel relationships. As restrictions continue to lift across the United States, we anticipate a return to normal, in particular a return to driving vacations, which may positively impact the longer-term outlook of central business districts.

The COVID-19 pandemic has had, and may continue to have, a material adverse effect on the Company’s business, financial condition, results of operations, cash flows, liquidity and ability to satisfy debt service obligations, and its duration and ultimate lasting impact is unknown. The Company’s business, financial condition, results of operations, cash flows, liquidity and ability to satisfy debt service obligations may continue to be negatively impacted as a result of the COVID-19 pandemic and may remain at depressed levels compared to pre-COVID-19 pandemic levels for an extended period.

Results of Operations for the three months ended ~~March~~June 3130, 2023, compared to the three months ended ~~March~~June 3130, 2022 (dollars in thousands):

	For the Three Months Ended March 31,
	For the Three Months Ended June 30,
	2023		2022		$ Change			% Change
Revenues
Base rental income	$	21,~~080~~951	$	12,~~931~~002	$	~~149~~(51	)		7(2.75	)%
Management income		—		427		(427	)		(100.0	)%
Percentage rental income		5,263		5,031		232			4.6	%
Percentage rental income		5,023		4,456		567			12.7	%
Total revenues	$	7,214	$	7,033	$	181			2.6	%
Total revenues	$	7,103	$	6,814	$	289			4.2	%

Base rental income

The ~~increase~~decrease in base rental income for the three months ended ~~March~~June 3130, 2023 compared to the same period in 2022 is due primarily to changes in lease structure partially offset by the acquisition of one parking asset in Oklahoma City in the second quarter of 2022 ~~and an increase of tenant reimbursements~~.

Management income

The management income for the three months ended March 31, 2022 is attributable to operator collections for a management agreement that was converted into the New Lease Structure at the beginning of 2022.

Percentage rental income

The $0.62 million increase in percentage rent income is due primarily to (1) a $0.2 million increase related to one property acquired during the second quarter of 2022 and (2) demand for event parking, specifically in markets with sporting events, theatres, festivals, and other gatherings. This demand positively affects several of our properties in Chicago, Cincinnati and Denver and was partially offset by lower revenues from contract parking in Detroit.

	For the Three Months Ended March 31,
	For the Three Months Ended June 30,
	2023		2022		$ Change			% Change
Operating expenses
Property taxes	$	1,~~756~~742	$	1,~~631~~739	$	~~125~~3			70.62	%
Property operating expense		~~518~~533		~~853~~698		(~~335~~166	)		(3923.37	)%
Interest expense		3,~~599~~676		23,~~457~~366		~~1,143~~311			469.52	%
General and administrative		2,~~620~~444		1,~~515~~838		~~1,104~~605			7232.9	%
Professional fees		~~469~~327		~~574~~494		(~~105~~167	)		(1833.48	)%
Organizational, offering and other costs		3384		~~893~~1,876		(~~860~~1,792	)		(9695.35	)%
Depreciation and amortization expenses		2,~~126~~130		2,~~010~~064		~~116~~66			53.82	%
Total operating expenses	$	1110,~~121~~936	$	912,~~933~~075	$	(1,~~188~~139	)		12(9.04	)%

Property taxes

The $0.1 million increase in property taxes during the three months ended March 31, 2023 compared to March 31, 2022 is attributable primarily to changes in estimated property tax assessments recognized in the first quarter of 2022.

- 19 -

Table of Contents

Property operating expense

The $0.32 million decrease in property operating expense during the three months ended ~~March~~June 3130, 2023 compared to ~~March~~June 3130, 2022 is attributable primarily to lower professional services related to engineering surveys, legal fees, and insurance costs.

Interest expense

The increase in interest expense of approximately $10.13 million during the three months ended June ~~March 31~~30, 2023 compared to the same period in the prior year is primarily attributable to (1) $10.67 million of ~~first quarter 2023~~increased interest expense on the Company’s Revolving Credit Facility (which includes $0.23 million of non-cash fee amortization), partially offset by the repayment of $56.1 million of mortgage loans during the second quarter of 2022.

General and administrative

The $10.16 million increase in general and administrative expenses during the three months ended ~~March~~June 3130, 2023 compared to ~~March~~June 3130, 2022 is primarily attributable to non-cash compensation cost for performance units granted on May 27, 2022 and certain executive LTIP Units granted on February 28, 2023 of approximately $1.42 million (compared to approximately $0.4 million in the second quarter of 2022) which was partially offset by a decrease in payroll and travel related costs.

Professional fees

Professional fees decreased by approximately $0.12 million during the three months ended ~~March~~June 3130, 2023 compared to ~~March~~June 3130, 2022. The decrease was primarily attributable to lower utilization of professional services firms including consulting, advisory and legal service providers.

Organizational, offering and other costs

On May 27, 2022, the Company entered into an Agreement and Plan of Merger (the “MIT Merger Agreement”) by and between the Company and Mobile Infrastructure Trust, a Maryland real estate investment trust (“MIT”). Pursuant to the terms of the MIT Merger Agreement, the Company would merge with and into MIT, with MIT continuing as the surviving entity resulting from the transaction. Prior to and as a condition to the merger with MIT, MIT expected to undertake an initial public offering of its common shares of beneficial interest. Also, in March 2022, the Company had entered into an agreement with MIT, requiring the Company to be allocated, bear and (where practicable) pay directly certain costs and expenses related to the merger with MIT. In connection with the execution of the Merger Agreement with FWAC, the MIT Merger Agreement and the cost allocation agreement with MIT were terminated.

The $01.98 million decrease in organizational, offering and other costs during the three months ended ~~March~~June 3130, 2023 compared to ~~March~~June 3130, 2022 is due to the termination of the MIT Merger Agreement and other transactions primarily attributable to legal and accounting fees.

Depreciation and amortization expenses

The $0.1 million increase in depreciation and amortization expenses during the three months ended ~~March~~June 3130, 2023 compared to ~~March~~June 3130, 2022 is due to the one property acquired during the second quarter of 2022.

	For the Three Months Ended March 31,
	For the Three Months Ended June 30,
	2023		2022		$ Change			% Change
Other income (expense)
Gain on sale of real estate		660		—		660			100.0	%
PPP loan forgiveness	$	—	$	328	$	(328	)		(100.0	)%
Other income		15		61		(46	)		(75.48	)%
Total other expense	$	~~675~~15	$	61389	$	~~614~~(374	)		~~1006~~(96.82	)%

~~Gain~~PPP onloan ~~sale of real estate~~forgiveness

OnDuring ~~February 28~~April 2022, ~~2023,~~ the Company ~~sold~~received anotification ~~parking~~from ~~lot~~the ~~located~~U.S. inSmall ~~Wildwood,~~Business ~~New~~Administration ~~Jersey~~("SBA") ~~for~~stating ~~$1.5~~that ~~million,~~the ~~resulting~~second-round paycheck inprotection ~~a gain~~program onloan ~~sale~~was offorgiven ~~real~~in ~~estate~~full ofin ~~approximately~~the amount of $0328,000.7 ~~million.~~ The ~~Company~~forgiveness ~~received net proceeds~~ of ~~approximately~~this ~~$0.3~~loan ~~million~~was ~~after~~recognized in the ~~repayment~~consolidated statements of ~~the~~operations ~~outstanding~~in ~~mortgage~~the ~~loan,~~month ~~interest~~it ~~and~~was ~~transaction costs~~forgiven.

- 20 -

Table of Contents

Results of Operations for the six months ended June 30, 2023, compared to the six months ended June 30, 2022 (dollars in thousands):

	For the Six Months Ended June 30,
	2023		2022		$ Change			% Change
Revenues
Base rental income	$	4,031	$	4,053	$	(22	)		(0.5	)%
Management income		-		313		(313	)		(100.0	)%
Percentage rental income		10,286		9,456		830			8.8	%
Total revenues	$	14,317	$	13,822	$	495			3.6	%

Base rental income

The decrease in base rental income for the six months ended June 30, 2023 compared to the same period in 2022 is due primarily to changes in lease structure partially offset by the acquisition of one parking asset in Oklahoma City in the second quarter of 2022.

Management income

The management income for the six months ended June 30, 2022 is attributable to operator collections for a management agreement that was converted into the New Lease Structure at the beginning of 2022.

Percentage rental income

The $0.8 million increase in percentage rent income is due primarily to (1) a $0.4 million increase related to one property acquired during the second quarter of 2022 and (2) demand for event parking, specifically in markets with sporting events, theatres, festivals, and other gatherings. This demand positively affects several of our properties in Chicago, Cincinnati and Denver and was partially offset by lower revenues from contract parking in Detroit.

	For the Six Months Ended June 30,
	2023		2022		$ Change			% Change
Operating expenses
Property taxes	$	3,498	$	3,575	$	(77	)		(2.2	)%
Property operating expense		1,051		1,472		(421	)		(28.6	)%
Interest expense		7,276		5,957		1,319			22.1	%
Depreciation and amortization expenses		4,256		4,031		225			5.6	%
General and administrative		5,063		3,344		1,719			51.4	%
Professional fees		795		1,175		(380	)		(32.3	)%
Organizational, offering and other costs		117		2,722		(2,605	)		(95.7	)%
Total operating expenses	$	22,056	$	22,276	$	(220	)		(1.0	)%

Property taxes

The $0.1 million decrease in property taxes during the six months ended June 30, 2023 compared to June 30, 2022 is attributable primarily to changes in estimated property tax assessments recognized in the first and second quarters of 2022.

Property operating expense

The $0.4 million decrease in property operating expense during the six months ended June 30, 2023 compared to June 30, 2022 is attributable primarily to lower professional services related to engineering surveys, legal fees, and insurance costs.

Interest expense

The increase in interest expense of approximately $1.3 million during the six months ended June 30, 2023 compared to the same period in the prior year is primarily attributable to (1) $2.3 million of increased interest expense on the Company’s Revolving Credit Facility (which includes $0.1 million of non-cash fee amortization), partially offset by the repayment of $56.1 million of mortgage loans during the second quarter of 2022.

- 21 -

Table of Contents

General and administrative

The $1.7 million increase in general and administrative expenses during the six months ended June 30, 2023 compared to June 30, 2022 is primarily attributable to non-cash compensation cost for performance units granted on May 27, 2022 and certain executive LTIP Units granted on February 28, 2023 of approximately $2.6 million (compared to approximately $0.4 million in the second quarter of 2022) which was partially offset by a decrease in payroll and travel related costs.

Professional fees

Professional fees decreased by approximately $0.4 million during the six months ended June 30, 2023 compared to June 30, 2022. The decrease was primarily attributable to lower utilization of professional services firms including consulting, advisory and legal service providers.

Organizational, offering and other costs

The $2.6 million decrease in organizational, offering and other costs during the six months ended June 30, 2023 compared to June 30, 2022 is due to the termination of the MIT Merger Agreement and other transactions primarily attributable to legal and accounting fees.

Depreciation and amortization expenses

The $0.2 million increase in depreciation and amortization expenses during the six months ended June 30, 2023 compared to June 30, 2022 is due to the one property acquired during the second quarter of 2022.

	For the Six Months Ended June 30,
	2023		2022		$ Change			% Change
Other income (expense)
Other income	$	30	$	76	$	(46	)		(60.3	)%
Gain on sale of real estate		660		—		660			100.0	%
PPP loan forgiveness		—		328		(328	)		(100.0	)%
Total other expense	$	690	$	404	$	286			70.8	%

Gain on sale of real estate

On February 28, 2023, the Company sold a parking lot located in Wildwood, New Jersey for $1.5 million, resulting in a gain on sale of real estate of approximately $0.7 million. The Company received net proceeds of approximately $0.3 million after the repayment of the outstanding mortgage loan, interest and transaction costs.

PPP loan forgiveness

During April 2022, the Company received notification from the SBA stating that the second-round paycheck protection program loan was forgiven in full in the amount of $328,000. The forgiveness of this loan was recognized in the consolidated statements of operations in the month it was forgiven.

Liquidity and Capital Resources

Effective March 29, 2022, the Company secured a $75.0 million Revolving Credit Facility with a $75.0 million accordion feature (the “Revolving Credit Facility”) with KeyBanc Capital Markets, as lead arranger, and KeyBank National Association, as administrative agent. During the second quarter of 2022, the Company drew on $73.7 million of the available $75.0 million to pay off the outstanding balances of near-term debt maturities as well as fund the acquisition of one parking asset. The $75.0 million accordion feature of the Revolving Credit Facility can be utilized for acquisitions, capital expenditures and other working capital requirements.

The Company’s principal source of funds to meet our operating expenses, pay debt service obligations and make distributions to our stockholders will be rental income from tenants at the Company’s parking facilities. Although the Company has no present intention to do so, the Company also may sell properties that the Company owns or place mortgages on properties that the Company owns to raise capital.

The Company has not entered into any swaps or hedges.

The Company’s short-term and long-term liquidity needs will consist primarily of funds necessary for payments of indebtedness, acquisitions of assets, capital expenditures, and costs associated with the Merger. Existing capital expenditure activities expected to be completed in the near-term for general deferred maintenance are expected to cost approximately $1.83 million.

- 22 -

Table of Contents

Sources and Uses of Cash

The following table summarizes our cash flows for the ~~three~~six months ended ~~March~~June 3130, 2023 and 2022 (dollars in thousands):

	For the Three Months Ended March 31,
	For the Six Months Ended June 30,
	2023			2022
Net cash (used in) operating activities	$	(3,063	)	$	(1,030	)
Net cash provided by (used in) operating activities	$	(2,221	)	$	602
Net cash provided by (used in) investing activities	$	~~1,228~~354		$	(~~132~~18,680	)
Net cash (used in) financing activities	$	(2,069	)	$	(1,288	)
Net cash provided by (used in) financing activities	$	(2,934	)	$	15,147

Comparison of the ~~three~~six months ended ~~March~~June 3130, 2023 to the ~~three~~six months ended ~~March~~June 3130, 2022:

Cash flows from operating activities

The cash used in operating activities for the ~~three~~ six months ended ~~March~~June 3130, 2023 was primarily attributable to a $0.35 million increase in revenue and ~~$0.3~~a decrease ~~in property operating expenses (partially offset by an increase~~ of approximately $0.1 million and $0.4 million in property taxes) and property operating expenses, respectively, an increase in cash paid for interest, real estate tax payments due earlier in the year and payment of certain general and administrative and professional fees that were accrued for in the fourth quarter of 2022.

Cash flows from investing activities

The cash provided by investing activities during the ~~three~~ six months ended ~~March~~June 3130, 2023 was primarily attributable to proceeds from the sale of one parking asset in February 2023. The cash used in investing activities during the ~~three~~six months ended ~~March 31~~June 30, 2022 was primarily attributable to routine and strategic capital expenditures and the acquisition of one parking asset in June 2022.

Cash flows from financing activities

The cash used in financing activities during the ~~three~~ six months ended ~~March~~June 3130, 2023 was primarily attributable to principal payments on mortgage loans, including $1.0 million for the one parking asset sold in February 2023, as well as distribution payments to non-controlling interest holders in MVP St. Louis Cardinal Lot, DST. The cash ~~used~~provided in by financing activities during the ~~three~~six months ended ~~March~~June 3130, 2022 was primarily attributable to ~~principal~~proceeds ~~payments~~from onthe ~~mortgage~~Revolving ~~loans~~Credit Facility of $73.7 million partially offset by the repayment of $55.1 million of notes payable and loan fees onresulting from the Revolving Credit Facility.

- 21 -

Table of Contents

Company Indebtedness

On March 29, 2022, the Company entered into the Credit Agreement which includes the Revolving Credit Facility. During 2022, the Company used $73.7 million of available capacity to refinance certain of the Company’s current loans for various properties and to finance the acquisition of a parking garage in June 2022. The remaining capacity of $1.3 million may also be available for our general corporate purposes, including liquidity, acquisitions and working capital. The Company borrows under the Revolving Credit Facility in U.S. dollars and expects borrowings to bear interest at a floating rate based upon a Secured Overnight Financing Rate, or SOFR, benchmark rate or an alternate base rate, plus a margin of between 1.75% and 3.00%, with respect to SOFR loans, or 0.75% to 2.00%, with respect to base rate loans, based on the leverage ratio as calculated pursuant to our Revolving Credit Facility.

The obligations under the Credit Agreement underlying the Revolving Credit Facility are guaranteed by the Company and other guarantors. The Credit Agreement contains customary representations, warranties, conditions to borrowing, covenants and events of default, including certain covenants that limit or restrict, subject to certain exceptions, the ability of the Company, the Operating Partnership and other subsidiaries to sell or transfer assets, enter into a merger or consolidate with another company, create liens, make investments or acquisitions or incur certain indebtedness. The Credit Agreement also includes financial covenants that require the Company to (i) maintain a total leverage ratio not to exceed 65.0%, (ii) not to exceed certain fixed charge coverage ratios, and (iii) maintain a certain tangible net worth.

As of ~~March~~June 3130, 2023, $73.7 million was outstanding under the Revolving Credit Facility.

On November 17, 2022, the Company executed an amendment to Credit Agreement which extends the maturity of the Revolving Credit Facility to April 1, 2024, amends certain financial covenants through the new term, and adds a requirement for the Company to use diligent efforts to pursue an equity raise or liquidity event by March 31, 2023. In connection with this extension, the Company paid an extension fee of $375,000 (plus expenses) which is being deferred and amortized over the new term of the Revolving Credit Facility to interest expense on the consolidated statement of operations.

As of ~~March 31~~June 30, 2023, the Company was not in compliance with all applicable covenants in agreements governing its debt, resulting in events of default. Additionally, based on the Company’s expected financial performance for the twelve-month period subsequent to the filing of the ~~March~~June 3130, 2023 Form 10-Q, the Company expects that it will not be in compliance with a financial covenant under the Revolving Credit Facility, which would result in an event of default. Such event allows the lender to accelerate the maturity of the debt under the Revolving Credit Facility which carries a balance of $73.7 million as of ~~March 31~~June 30, 2023. Further, our independent auditor included an explanatory paragraph regarding our ability to continue as a “going concern” in its report on our financial statements for the year ~~ending~~ ended December 31, 2022 (as included in our Form 10-K), which constitutes an event of default under our Revolving Credit Facility. The Revolving Credit Facility also requires the Company to initiate an equity raise in order to achieve a fixed charge coverage ratio (“FCCR”) of 1.4 to 1.0 as of ~~March,~~June 3130, 2023. The Company does not currently have sufficient cash on hand, liquidity or projected future cash flows to repay these outstanding amounts upon an event of default. These conditions and events raise substantial doubt about the Company’s ability to continue as a going concern.

- 23 -

Table of Contents

Additional plans include the following:

Management is budgeting reduced overhead costs in 2023 through the reduction or elimination of certain controllable expenses.

We are pursuing further amendments and/or extensions with respect to the Revolving Credit Facility, including waivers of noncompliance with covenants.

4. We have initiated equity raise or liquidity events, including the proposed merger with Fifth Wall Acquisition Corporation III.

However, there can be no assurance that we will be successful in completing any of these options. As a result, management’s plans cannot be considered probable and thus does not alleviate substantial doubt about our ability to continue as a going concern.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts of liabilities that might result from the outcome of this uncertainty.

Over time, management intends to both extend and sculpt our maturity wall, so that our maturities are spread over multiple years. As of the date of this filing, the Company has significant commercial mortgage-backed securities (“CMBS”) debt with prohibitive defeasance, which will limit our ability to refinance our CMBS debt prior to the maturity date or any permitted prepayment date. As our loans approach maturity, we will assess the lowest cost, most flexible options available to the Company and refinance those loans accordingly. Our intent over the mid-term period is to work with lending relationships to maintain a revolver that can address upcoming maturities, should market conditions not permit us to refinance with longer-term debt.

The Company may establish capital reserves with respect to particular investments. The Company also may, but is not required to, establish reserves out of cash flow generated by investments or out of net sale proceeds in non-liquidating sale transactions. Working capital reserves are typically utilized to fund tenant improvements, leasing commissions and major capital expenditures. The Company’s lenders also may require working capital reserves.

- 22 -

Table of Contents

Distributions on Common Stock

On March 22, 2018, the Company suspended the payment of distributions on its Common Stock. There can be no assurance that cash distributions to the Company’s common stockholders will be resumed in the future. The actual amount and timing of distributions, if any, will be determined by the Company’s Board of Directors in its discretion and typically will depend on various factors that the Company's Board of Directors deems relevant.

The Company does not currently, and may not in the future, generate sufficient cash flow from operations to fully fund distributions. The Company does not currently anticipate that it will be able to resume the payment of distributions on its Common Stock. 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. The Company has not established any limit on the extent to which distributions could be funded from these other sources. Accordingly, the amount of distributions paid may not reflect current cash flow from operations and distributions may include a return of capital, (rather than a return on capital). If the Company pays distributions from sources other than cash flow from operations, the funds available to the Company for investments would be reduced and the share value may be diluted. The level of distributions will be determined by the Board of Directors and depend on several factors including current and projected liquidity requirements, anticipated operating cash flows and tax considerations, and other relevant items deemed applicable by the Board of Directors.

The Company did not repurchase any of its shares during the ~~three~~six months ended ~~March~~June 3130, 2023. No cash dividends can be made on the Common Stock until the preferred distributions are paid.

Dividend Reinvestment Plan

From inception through March 22, 2018, when the Company suspended payment of distributions of Common Stock, the Company had paid approximately $1.8 million in cash, issued 83,437 shares of its Common Stock as a Dividend Reinvestment Plan (“DRIP”) and issued 153,826 shares of its Common Stock in distributions to the Company’s stockholders. All of the cash distributions were paid from offering proceeds and constituted a return of capital.

Preferred Stock

On March 24, 2020, the Company’s Board of Directors unanimously authorized the suspension of the payment of distributions on the Series A Convertible Redeemable Preferred Stock ("Series A Preferred Stock"), par value $0.0001 per share, and Series 1 Convertible Redeemable Preferred Stock ("Series 1 Preferred Stock" and, together with the Series A Preferred Stock, "Preferred Stock"), par value $0.0001 per share; however, such distributions will continue to accrue in accordance with the terms of the Series A Preferred Stock and Series 1 Preferred Stock.

As of ~~March~~June 3130, 2023 and 2022, approximately $0.7 million and $0.45 million of accrued and unpaid Series A Preferred Stock distributions, respectively, are included in accrued preferred distributions on the consolidated balance sheet.

As of ~~March~~June 3130, 2023 and 2022, approximately $89.63 million and $56.85 million of accrued and unpaid Series 1 Preferred Stock distributions, respectively, are included in accrued preferred distributions on the consolidated balance sheet.

Common Stock Warrants

In connection with the Company's recapitalization transaction in August 2021, the Company entered into a warrant agreement (the “Warrant Agreement”) pursuant to which it issued warrants (the “Warrants”) to Color Up to purchase up to 1,702,128 shares of Common Stock, at an exercise price of $11.75 per share for an aggregate cash purchase price of up to $20.0 million (the “Common Stock Warrants”). Each whole Common Stock Warrant entitles the registered holder thereof to purchase one whole share of Common Stock at a price of $11.75 per share (the “Warrant Price”), subject to customary adjustments, at any time following a “Liquidity Event,” which is defined as an initial public offering and/or Listing of the Common Stock on the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange. The Common Stock Warrants will expire five years after the date of the Warrant Agreement.

The Company assesses its warrants as either equity or a liability based upon the characteristics and provisions of each instrument. Warrants classified as equity are recorded at fair value as of the date of issuance on the Company’s balance sheet and no further adjustments to their valuation are made. Management estimates the fair value of these warrants using option pricing models and assumptions that are based on the individual characteristics of the warrants or other instruments on the valuation date, as well as assumptions for future financings, expected volatility, expected life, yield and risk -~~free~~ ~~interest~~24 ~~rate. As of March 31, 2023, all outstanding warrants issued by the Company were classified as equity.~~-

Table of Contents

The Company assesses its warrants as either equity or a liability based upon the characteristics and provisions of each instrument. Warrants classified as equity are recorded at fair value as of the date of issuance on the Company’s balance sheet and no further adjustments to their valuation are made. Management estimates the fair value of these warrants using option pricing models and assumptions that are based on the individual characteristics of the warrants or other instruments on the valuation date, as well as assumptions for future financings, expected volatility, expected life, yield and risk-free interest rate. As of June 30, 2023, all outstanding warrants issued by the Company were classified as equity.

Critical Accounting Policies

Our 2022 Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (the "SEC") on March 22, 2023, contains a description of our critical accounting policies and estimates, including those relating to real estate investments and acquisitions. There have been no significant changes to our critical accounting policies during 2023.

- 23 -

Table of Contents

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

In connection with the filing of this Form 10-Q for the quarter ended ~~March~~June 3130, 2023, our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”) evaluated the Company's disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. As a result of this evaluation, our CEO and CFO concluded that the material weaknesses previously identified in Item 9A. “Controls and Procedures” of our Annual Report on Form 10-K for the year ended December 31, 2022, were still present as of ~~March~~June 3130, 2023 (“the Evaluation Date”). Based on those material weaknesses, and the evaluation of our disclosure controls and procedures, our CEO and CFO concluded that our disclosure controls and procedures were not effective as of the Evaluation Date.

(b) Remediation Plan and Status

Our remediation efforts previously identified in Item 9A. “Controls and Procedures” of our Annual Report on Form 10-K for the year ended December 31, 2022, are ongoing and we continue our initiatives to implement and document policies, procedures, and internal controls. Remediation of the identified material weaknesses and strengthening our internal control environment will require a substantial effort throughout 2023 and beyond. While we believe the steps taken to date and those planned for implementation will improve our internal controls over financial reporting, we have not completed all remediation efforts. The planned remediation activities described in Item 9A. “Controls and Procedures” of our Annual Report on Form 10-K for the year ended December 31, 2022 highlight our commitment to remediating our identified material weaknesses and remain largely unchanged through the date of filing this Quarterly Report.

The following remedial actions have been identified and initiated by the Company through ~~March~~June 3130, 2023:

● We have hired ~~a Chief Accounting Officer~~ and will ~~hire~~continue ~~(as~~to ~~needed)~~hire and train additional accounting resources with appropriate levels of experience and reallocating responsibilities across the finance organization. This measure provides for segregation of duties and ensures that the appropriate level of knowledge and experience will be applied based on the risk and complexity of transactions and tasks under review.

	●	We will continue to educate control owners and enhance policies to ensure appropriate restrictions related to user access and privileged access are in place.
	●	We have re-evaluated the permissions of user roles within our accounting system and have re-assigned access to individuals in order to establish more appropriate segregation of duties.
	●	We have enhanced internal control documentation for key controls to ensure the assignment of preparers and reviewers, and establishing policies for the formal sign-off of key controls.
	●	Beginning with the third quarter of 2022, we established a formal Disclosure Committee to enhance governance by management for the oversight of internal controls over financial reporting, including disclosure controls and procedures.

●

We have provided access to accounting literature and research to enable the control owners in evaluating technical accounting pronouncements for certain transactions, in addition to utilizing third party resources when appropriate.

●

Through our continued remediation efforts, we have identified and recorded certain accounting adjustments during the third and fourth quarters of 2022 that were considered immaterial, individually and in the aggregate, to our consolidated financial statements taken as a whole for the affected periods. Our continued remediation activities will include the designing of internal control policies and practices that directly respond to these accounting adjustments.

As the Company continues to evaluate and works to improve its internal control over financial reporting, the Company’s management may determine that additional or different measures to address control deficiencies or modifications to the remediation plan are necessary.

There have been no changes in internal control over financial reporting during the ~~first~~second quarter of 2023, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

- 2425 -

Table of Contents

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The nature of the Company’s business exposes its properties, the Company, its Operating Partnership and its other subsidiaries to the risk of claims and litigation in the normal course of business. Other than as noted above or routine litigation arising out of the ordinary course of business, the Company is not presently subject to any material litigation nor, to its knowledge, is any material litigation threatened against the Company.

See Note M — Commitments and Contingencies in Part I, Item 1 Notes to the Consolidated Financial Statements of this Quarterly Report.

ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors set forth in the Company’s annual report on Form 10-K for the year ended December 31, 2022.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

2.1		First Amendment to Agreement and Plan of Merger, dated as of March 23, 2023, by and among Fifth Wall Acquisition Corp. III, Queen Merger Corp. I and Mobile Infrastructure Corporation (Incorporated by reference as Exhibit 2.1 to Form 8-K filed March 23, 2023).
3.1		Articles of Amendment and Restatement of THE PARKING REIT, Inc. (Incorporated by reference as Exhibit 3.1 to Pre-Effective Amendment No. 2 to the Registration Statement on Form S-11 filed September 24, 2015).
3.2		Articles of Amendment of THE PARKING REIT, Inc. (Incorporated by reference as Exhibit 3.1 to Form 8-K filed December 18, 2017).
3.3		Articles of Amendment of MOBILE INFRASTRUCTURE CORPORATION (Incorporated by reference as Exhibit 3.1 to Form 8-K filed November 12, 2021).
3.4		Certificate of Correction to the Articles of Amendment and Restatement of Mobile Infrastructure Corporation (Incorporated by reference as Exhibit 3.1 to Form 8-K filed March 21, 2022).
3.5		Articles Supplementary for Series A Convertible Redeemable Preferred Stock of THE PARKING REIT, Inc. (Incorporated by reference as Exhibit 3.1 to Form 8-K filed October 28, 2016).
3.6		Articles Supplementary for Series 1 Convertible Redeemable Preferred Stock of THE PARKING REIT, Inc. (Incorporated by reference as Exhibit 3.1 to Form 8-K filed March 30, 2017).
3.7		Amended & Restated Bylaws of MOBILE INFRASTRUCTURE CORPORATION. (Incorporated by reference as Exhibit 3.2 to Form 8-K filed November 12, 2021).
10.1		Second Amended and Restated Sponsor Agreement, dated June 15, 2023, by and among Fifth Wall Acquisition Corp. III, Fifth Wall Acquisition Sponsor III LLC, Mobile Infrastructure Corporation and certain holders of Fifth Wall Acquisition Corp. III’s Class B ordinary shares (Incorporated by reference as Exhibit 10.1 to Form 8-K filed June 16, 2023).
31.1(*)		Certification of Chief Executive Officer pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a)) and Section 302 of the Sarbanes-Oxley Act of 2002.
31.2(*)		Certification of Chief Financial Officer pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a)) and Section 302 of the Sarbanes-Oxley Act of 2002.
32(*)		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101(*)		The following materials from the Company’s Quarterly Report on Form 10-Q for the ~~three~~six months ended ~~March~~June 3130, 2023, formatted in iXBRL (inline extensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statement of Stockholder’s Equity; (iv) Consolidated Statements of Cash Flows; and (v) Notes to Financial Statements. As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Section 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Filed concurrently herewith.

- 2526 -

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Mobile Infrastructure Corporation
	By:	/s/ Manuel Chavez
		Manuel Chavez
		Chief Executive Officer
	Date:	~~May~~August 1214, 2023
	By:	/s/ Stephanie Hogue
		Stephanie Hogue
		President and Chief Financial Officer
	Date:	~~May~~August 1214, 2023

- 2627 -

Filing Compare · Mobile Infrastructure Corp