Project Equity Partnership to Fund Comstock's Newest Community in
Loudoun County, Virginia
Capital Raise Will Assist Company in Regaining Compliance With NASDAQ
Listing Requirements
WASHINGTON & RESTON, Va.--(BUSINESS WIRE)--
Comstock Holding Companies, Inc. (NASDAQ: CHCI) (the "Company")
announced today that it has initiated a private placement offering
solely to accredited investors of interests in Comstock Investors IX,
which is the latest private placement in a series of recently completed
investment offerings sponsored by the Company. The Company intends to
use the up to $3 million of expected proceeds from the offering to
provide the equity financing for the Company's Stone Ridge community of
35 single family homes in Loudoun County, Virginia, scheduled for
development commencing in the coming months. The offering may be
increased to provide financing for existing and future projects that are
currently under investment review.
This new subdivision, which will be annexed into the adjacent Stone
Ridge Community Association, is located in the Route 50 corridor of
eastern Loudoun County, where the Company recently completed its
successful Eastgate project. Stone Ridge is one of the most desirable
master planned, mixed-use communities in Northern Virginia, offering
quality amenities including the Stone Ridge Social Club, sports
clubhouse, swimming pools, tennis facilities, the Gum Spring Public
Library and highly rated Loudoun County Public Schools. The Company's
new line of single-family homes at Stone Ridge will be priced from the
high $500s with sales scheduled to commence in October 2015.
The completion of the Comstock IX offering will assist the Company in
satisfying the minimum stockholders' equity requirement for continued
listing on the Nasdaq Capital Market. On April 28, 2015, the Company
received a deficiency letter (the "Notice Letter") from The Nasdaq Stock
Market LLC ("Nasdaq") advising the Company that based on the Company's
financial statements included in its most recent 10-K that the Company's
reported stockholders' equity of $1,855,000 did not meet the minimum of
$2,500,000 required under Nasdaq Listing Rule 5550(b)(1). The deficiency
is primarily the result of the Company's redemption of non-controlling
interests (included as equity in the Company's financial statements)
during 2014 of $14.6 million coupled with an operating loss of $3.1
million incurred during 2014. The $3.1 million operating loss for 2014
is largely the result of a non-cash impairment charge of $2.7 million
and a restructuring charge of $0.6 million.
The Notice Letter has no immediate effect on the listing of the
Company's shares of Class A common stock on Nasdaq. The Company intends
to submit its plan for addressing the subject listing deficiency within
the 45 calendar days provided under Nasdaq rules. If the Company's plan
is not accepted by Nasdaq, the Company will have an opportunity to
appeal the decision to a Hearings Panel. The Company plans to take
additional actions during the second quarter of 2015 with the intention
of ensuring its ability to regain compliance with this listing
requirement. These actions may include issuance of common or preferred
equity, additional project specific capital raises and the potential
conversion of existing unsecured shareholder debt to equity.
To participate in the Comstock IX offering, an investor must be
qualified as an "accredited investor" as defined in Rule 501(a) of
Regulation D under the Securities Act of 1933, as amended. Additional
details of the offering are available by contacting Joe Squeri, Chief
Financial Officer.
About Comstock Holding Companies, Inc.
Comstock is a multi-faceted real estate development and services company
that builds a wide range of housing products under its Comstock Homes
brand through its wholly owned subsidiary, Comstock Homes of Washington,
LC, and provides a variety of capital markets advisory and real estate
asset related services through its wholly owned subsidiary, Comstock
Real Estate Services, LC. Comstock's extensive real estate development
experience positions Comstock Real Estate Services, LC to provide a
unique brand of experience based capital markets advisory and real
estate asset management services to clients nationwide. Comstock Holding
Companies, Inc. is a publicly traded company, trading on NASDAQ under
the symbol CHCI. For more information about Comstock, please visit: www.comstockhomes.com.
Cautionary Statement Regarding Forward-Looking Statements
This release contains "forward-looking" statements that are made
pursuant to the Safe Harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include, but
are not limited to, statements that express the Company's intentions,
expectations, strategies, predictions and other statements related to
future activities, events or conditions. These statements are based on
current expectations and projections about the Company which are based
in part on assumptions made by management. Such assumptions involve
known and unknown risks and uncertainties that may cause actual future
results to differ materially from those projected or contemplated in the
forward-looking statements, including the standards and policies of
Nasdaq; fluctuations in the Company's general financial and operating
results; changes in the capital markets; general economic conditions;
the Company's ability to service its debt; inherent risks in investment
in real estate; the Company's ability to compete in the markets in which
it operates; economic risks in the markets in which the Company
operates, including actions related to government spending; delays in
governmental approvals and/or land development activity at the Company's
projects; regulatory actions; fluctuations in operating results; the
Company's anticipated growth strategies; shortages and increased costs
of labor or building materials; the availability and cost of land in
desirable areas; adverse weather conditions or natural disasters; the
Company's ability to raise debt and equity capital and grow its
operations on a profitable basis; and the Company's continuing
relationships with affiliates. Additional information concerning these
and other important risks and uncertainties can be found under the
heading "Risk Factors" in the Company's most recent Form 10-K, as filed
with the Securities and Exchange Commission. Comstock specifically
disclaims any obligation to update or revise any forward-looking
statements, whether as a result of new information, future developments
or otherwise.
Company:
Comstock Holding Companies, Inc.
Joe Squeri,
703-230-1229
Chief Financial Officer
or
Investor
Relations:
LHA
Harriet Fried, 212-838-3777
hfried@lhai.com
Source: Comstock Holding Companies, Inc.
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