UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


Quarterly Report Under Section10−Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 orOR 15(d) of the

Securities Exchange Act ofOF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2015

quarterly period ended: March 31, 2020

or

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

For the transition period from ____________ to _____________

Commission File No.Number: 000-51229


STACK-IT STORAGE,

MANUFACTURED HOUSING PROPERTIES INC.

 (Exact Name

(Exact name of Registrantregistrant as specified in its charter)


Nevada 51-0482104
(State or other jurisdiction of incorporation)
incorporation or organization)		 (IRSI.R.S. Employer
Identification Number)No.)

11011 Richmond Avenue, Suite 525
Houston, Texas
 
77042
136 Main Street, Pineville, North Carolina28134
(Address of principal executive offices) (zipZip Code)

(980) 273-1702
(Registrant’s telephone number, including area code)
(713) 479-7050
 (Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the Registrantregistrant (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 Registrantregistrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes: x No: o


Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes: x No: o


Yes ☒  No ☐

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


Large accelerated filer    o      Accelerated filer     o    Non-accelerated filer    o    

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

If an emerging growth company, x


indicate by check mark if the registrant has elected not to use the extended transition period for comply 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 Exchange Act).  Yes o☐ No x


The number☒

As of May 14, 2019, there were 12,342,080 common shares outstanding of Common Stock, par value $.01 per share, as of August 11, 2015 was 15,598,015 shares.

the registrant issued and outstanding.

 

STACK-IT STORAGE, INC.
 (formerly, Caprock Oil,

Manufactured Housing Properties Inc.)

FORM

Quarterly Report on Form 10-Q

JUNE 30, 2015

INDEX

Period Ended March 31, 2020

TABLE OF CONTENTS

PART I. I
FINANCIAL INFORMATIONPage
 
Item 1.Financial Statements.1
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 2015 (Unaudited) and December 31, 2014 (Unaudited)3
Consolidated Statements of Operations for the three months ended June 30, 2015 and 2014 (Unaudited)4
Consolidated Statements of Operations for the six months ended June 30, 2015 and 2014 (Unaudited)5
Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2014 (Unaudited)6
Notes to Consolidated Financial Statements (Unaudited)7
Item 2. Management'sManagement’s Discussion and Analysis of Financial Condition and Results of OperationsOperations.1318
Item 3.Quantitative and Qualitative Disclosures About Market RiskRisk.1625
Item 4.Controls and Procedures.26
 
PART II
FINANCIAL INFORMATION
 
Item 4. Controls and Procedures1.16Legal Proceedings.27
Item 1A.Risk Factors.27
PART II. OTHER INFORMATION
Item 1. Legal Proceedings17
Item 1A. Risk Factors     17
Item 2.Unregistered Sales of Equity Securities and Use of ProceedsProceeds.1727
Item 3.Defaults Upon Senior Securities.27
Item 4.Mine Safety Disclosures.27
Item 5.Other Information.27
Item 6.Exhibits.28

i

PART I

FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS.

MANUFACTURED HOUSING PROPERTIES INC.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Page
  
Item 3. Defaults Upon Senior Securities17
 
Item 4. Mine Safety DisclosuresCondensed Consolidated Balance Sheets as of March 31, 2020 (unaudited) and December 31, 2019172
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2020 and 2019 (unaudited) 
Item 5. Other Information173
Condensed Consolidated Statements of Shareholders’ Deficit for the Three Months Ended March 31, 2020 and 2019 (unaudited) 
Item 6. Exhibits174
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2020 and 2019 (unaudited) 5
SignatureNotes to Unaudited Condensed Consolidated Financial Statements186
STACK-IT STORAGE, INC.
 (formerly, Caprock Oil, Inc.)
Consolidated Balance Sheets
(Unaudited)

  June 30,  December 31, 
  2015  2014 
Assets      
Current assets:      
Cash and cash equivalents $394,487  $80,025 
Accounts receivable (net of allowance for doubtful accounts of $228,574)  122,429   270,132 
Prepaid expenses and other  20,266   49,586 
Total current assets  537,182   399,743 
         
Property and equipment:        
Oil and gas properties, evaluated (full cost method)  7,501,897   16,046,178 
Oil and gas properties, unevaluated (full cost method)  214,018   1,005,603 
Other property and equipment  40,978   40,978 
Total property and equipment  7,756,893   17,092,759 
Less:  Accumulated depreciation, depletion, amortization and impairment  (7,188,953)  (10,536,660)
Net property and equipment  567,940   6,556,099 
         
Other assets:        
Other noncurrent assets  5,238   5,238 
Total other assets  5,238   5,238 
         
Total assets $1,110,360  $6,961,080 
         
Liabilities and Stockholders’ Equity (Deficit)        
Current liabilities:        
Current portion of long-term debt - related party $125,000  $- 
Current portion of long-term debt - other  12,295   2,052,040 
Accounts payable - related party  -   217,724 
Accounts payable - other  349,675   931,088 
Accrued liabilities  654,909   1,575,144 
Total current liabilities  1,141,879   4,775,996 
         
Deferred income taxes  155,000   803,800 
Asset retirement obligations  105,580   479,165 
Total liabilities  1,402,459   6,058,961 
         
Stockholders’ equity (deficit):        
Preferred stock, $.01 par value per share, 1,000,000 shares authorized,        
None issued  -   - 
Common stock, $.01 par value per share, 200,000,000 shares authorized,        
5,181,348 shares and 5,180,828 shares, issued and outstanding  51,813   51,808 
Additional paid in capital  15,788,467   15,484,703 
Accumulated deficit  (16,132,379)  (14,634,392)
Total stockholders’ equity (deficit)  (292,099)  902,119 
         
Total liabilities and stockholders’ equity (deficit) $1,110,360  $6,961,080 

MANUFACTURED HOUSING PROPERTIES INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2020 AND DECEMBER 31, 2019

  March 31, 2020  December 31, 2019 
Assets  (unaudited)   (As Revised)  
Investment Property        
Land $12,094,338  $10,885,938 
Site and Land Improvements  20,286,401   17,466,801 
Buildings and Improvements  7,396,472   6,214,725 
Total Investment Property  39,777,211   34,567,464 
Accumulated Depreciation & Amortization  (1,750,330)  (1,394,958)
Net Investment Property  38,026,881   33,172,506 
Cash and Cash Equivalents, including restricted cash of $335,905  2,748,681   4,146,411 
Accounts Receivable, net  40,029   31,881 
Other Assets  523,105   557,012 
Total Assets $41,338,696  $37,907,810 
         
Liabilities        
Accounts Payable $271,727  $227,406 
Notes Payable, net of $821,772 and $633,629 debt discount  32,194,746   28,359,247 
Note Payable – Related Party  689,546   797,906 
Note Payable – Line of Credit Related Party  816,500   1,730,000 
Accrued Liabilities  572,353   551,481 
Tenant Security Deposits  335,905   316,035 
Total Liabilities  34,880,777   31,982,075 
         
Commitments and Contingencies (See note 5)        
         
Redeemable Preferred Stock – subject to redemption        
Series A Cumulative Redeemable Convertible Preferred Stock, par value $0.01 per share; 4,000,000 shares authorized; 1,890,000 shares issued and outstanding as of March 31, 2020 and December 31, 2019; redemption value $7,087,500  5,027,125   4,909,000 
Series B Cumulative Redeemable Preferred Stock, par value $0.01 per share; 1,000,000 shares authorized; 524,957 and 409,722 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively; redemption value $7,874,355  5,172,664   3,973,610 
         
Stockholders’ deficit        
Common Stock, par value $0.01 per share; 200,000,000 shares authorized; 12,342,080 and 12.336,080 shares are issued and outstanding as of March 31, 2020 and December 31, 2019, respectively  123,421   123,361 
Additional Paid in Capital  328,959   759,849 
Accumulated Deficit  (4,194,250)  (3,840,085)
Total Stockholders’ Deficit  (3,741,870)  (2,956,875)
         
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $41,338,696  $37,907,810 

See accompanying notes to unaudited consolidated financial statements.


3
STACK-IT STORAGE, INC.
 (formerly, Caprock Oil, Inc.)
Consolidated Statements of Operations
(Unaudited)
  Three Months Ended June 30, 
  2015  2014 
Revenues:      
Oil and gas sales $110,424  $644,568 
Total revenues  110,424   644,568 
         
Operating expenses:        
Lease operating expense  173,912   381,115 
Depreciation, depletion and amortization  51,237   103,409 
Impairment expense  397,300   - 
Accretion expense  2,325   10,030 
Workover expense  -   388,878 
Selling, general and administrative  379,788   370,811 
Gain on creditor settlements  (523,815)   - 
Total operating expenses  480,747   1,254,243 
         
Operating loss  (370,323)  (609,675)
         
Other income (expense):        
Interest income  73   89 
Interest expense  (100,167)  (22,148)
         
Loss before income taxes  (470,417)  (631,734)
         
Benefit for income taxes:        
Current  61,492   - 
Deferred  108,900   140,100 
         
Net loss $(300,025) $(491,634)
         
Net loss per share, basic and diluted $(0.06) $(0.10)
         
Weighted average shares outstanding, basic and diluted  5,181,348   5,109,377 
 See accompanying notes to unaudited consolidated financial statements.

4
STACK-IT STORAGE, INC.
 (formerly, Caprock Oil, Inc.)
Consolidated Statements of Operations
(Unaudited)
  Six Months Ended June 30, 
  2015  2014 
Revenues:      
Oil and gas sales $272,624  $1,149,193 
Total revenues  272,624   1,149,193 
         
Operating expenses:        
Lease operating expense  431,575   755,047 
Depreciation, depletion and amortization  147,798   178,231 
Impairment expense  1,395,224   - 
Accretion expense  13,045   19,840 
Workover expense  68,185   771,318 
Selling, general and administrative  781,224   763,928 
Gain on creditor settlements  (523,815)   - 
Total operating expenses  2,313,236   2,488,364 
         
Operating loss  (2,040,612)  (1,339,171)
         
Other income (expense):        
Interest income  87   315 
Interest expense  (167,754)  (43,306)
         
Loss before income taxes  (2,208,279)  (1,382,162)
         
Benefit for income taxes:        
Current  61,492   - 
Deferred  648,800   343,900 
         
Net loss $(1,497,987) $(1,038,262)
         
Net loss per share, basic and diluted $(0.29) $(0.21)
         
Weighted average shares outstanding, basic and diluted  5,181,264   5,046,540 
 See accompanying notes to unaudited consolidated financial statements.

5
STACK-IT STORAGE, INC.
 (formerly, Caprock Oil, Inc.)
Consolidated Statements of Cash Flows
(Unaudited)

  Six Months Ended June 30, 
  2015  2014 
Cash flows from operating activities:      
Net loss $(1,497,987) $(1,038,262)
 Adjustments to reconcile net loss to net        
  cash provided by (used in) operations        
Depreciation, depletion and amortization  147,798   178,231 
Impairment expense  1,395,224   - 
Benefit for income taxes (deferred)  (648,800)  (343,900)
Accretion expense  13,045   19,840 
Stock based compensation  300,284   370,688 
Gain on creditor settlements  (523,815)  - 
Changes in current assets and liabilities  (126,141)  557,526 
Other changes, net  3,485   - 
Net cash flows from operating activities  (936,907)  (255,877)
         
Cash flows from investing activities:        
Purchase of property and equipment  (146,188)  (163,940)
Sale of property and equipment  2,026,302   - 
Net cash flows from investing activities  1,880,114   (163,940)
         
Cash flows from financing activities:        
Proceeds of long term debt - related parties  345,000   - 
Proceeds of private equity offering  -   500,000 
Payments of long term debt - related parties  (220,000)  - 
Payments of long term debt - others  (753,745)  (360,749)
Net cash flows from financing activities  (628,745)  139,251 
         
Net increase (decrease) in cash and cash equivalents  314,462   (280,566)
Cash and cash equivalents at beginning of period  80,025   877,525 
         
Cash and cash equivalents at end of period $394,487  $596,959 
         
Supplemental cash flow data:        
Cash paid for interest $165,481  $43,227 
         
Supplemental non-cash financing/investing activity:        
Notes payable paid upon sale of property  1,286,000   - 
Accounts payable paid upon sale of property  239,063   - 
Asset retirement obligations reduced upon sale of property  383,895   - 
Accrued liabilities reduced upon sale of property  653,330   - 
Accounts payable incurred for oil and gas properties  -   193,072 
See accompanying notes to unaudited consolidated financial statements.

6
STACK-IT STORAGE, INC.
(formerly, Caprock Oil, Inc.)
Accompanying Notes to Unaudited Condensed Consolidated Financial Statements
(Unaudited)


MANUFACTURED HOUSING PROPERTIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2020 AND 2019

(UNAUDITED)

  March 31,
2020		  March 31,
2019		 
Revenue      
Rental and related income $1,302,412  $524,374 
Management fees, related party  3,725   12,000 
Total revenues  1,306,137   536,374 
         
Community operating expenses        
Repair and maintenance  66,570   43,290 
Real estate taxes  59,190   23,561 
Utilities  141,461   31,593 
Insurance  41,901   6,271 
General and administrative expense  205,570   95,106 
Total community operating expenses  514,692   199,821 
         
Corporate payroll and overhead  317,443   135,963 
Depreciation and amortization expense  389,993   134,926 
Interest expense  438,174   232,706 
Refinancing costs  -   552,272 
         
Total Expenses  1,660,302   1,255,688 
         
Net loss before provision for income taxes  (354,165)  (719,314)
Provision for income taxes  -   - 
Net Loss attributable to the Company $(354,165) $(719,314)
         
Preferred stock dividends        
     Series A preferred dividends  94,500   4,667 
     Series A preferred put option value accretion  118,125   - 
     Series B preferred dividends  92,996   - 
     Series B preferred put option value accretion  127,368   - 
     Total preferred stock dividends $432,989  $4,667 
         
Net Loss attributable to common shareholders $(787,154) $(723,981)
         
Weighted average shares – basic and fully diluted  

12,339,291

   12,527,673 
         
Weighted average – basic and fully diluted $(0.06) $(0.06)

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

(1)           

MANUFACTURED HOUSING PROPERTIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

FOR THE THREE MONTHS ENDED MARCH 31, 2020 AND 2019

(UNAUDITED)

  COMMON STOCK  ADDITIONAL  NON     STOCKHOLDERS’ 
  SHARES  PAR VALUE  PAID IN CAPITAL  

CONTROLLING

INTEREST

  

ACCUMULATED

DEFICIT

  EQUITY (DEFICIT) 
                   
Balance at January 1, 2019  10,350,062  $103,500  $451,567  $293,241  $(1,801,338) $(953,030)
Stock option expense  -   -   8   -   -   8 
Common Stock issuance for acquisition of minority interest (as revised)  2,000,000   20,000   273,241   (293,241)  -   - 
Common Stock issuance for related party line of credit  545,000   5,450   299,750   -   -   305,200 
Common Stock issuance for service  -   -   24,500   -   -   24,500 
Preferred shares Series A dividends  -   -   (4,667)  -   -   (4,667)
Imputed interest  -   -   14,004   -   -   14,004 
Net Loss  -   -   -   -   (719,314)  (719,314)
Balance at March 31, 2019 (as revised)  12,895,062  $128,950  $1,058,403  $-  $(2,520,652) $(1,333,299)
                         
Balance at January 1, 2020 (as revised)  12,336,080  $123,361  $759,849  $-  $(3,840,085) $(2,956,875)
Stock option expense  -   -   539   -   -   539 
Common Stock issuance to preferred share holders  6,000   60   1,560   -   -   1,620 
Preferred shares Series A dividends  -   -   (94,500)  -   -   (94,500)
Preferred shares Series A put option value accretion  -   -   (118,125)  -   -   (118,125)
Preferred shares Series B dividends  -   -   (92,996)  -   -   (92,996)
Preferred shares Series B put option value accretion  -   -   (127,368)  -   -   (127,368)
Net Loss  -   -   -   -   (354,165)  (354,165)
Balance at March 31, 2020  12,342,080  $123,421  $328,959  $-  $(4,194,250) $(3,741,870)

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements


MANUFACTURED HOUSING PROPERTIES INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2020 AND 2019

(UNAUDITED)

  March 31, 2020  March 31, 2019 
Cash Flows from Operating Activities:        
Net Loss $(354,165) $(719,314)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:        
In-kind contribution of interest  -   14,004 
Provision for bad debts  3,802   4,076 
Stock option expense  539   8 
Stock compensation expense  -   329,700 
Write off mortgage cost  -   68,195 
Depreciation and amortization  389,993   134,927 
Changes in operating assets and liabilities:        
Accounts receivable  (8,148)  (331)
Other assets  33,907   (154,177)
Accounts payable  44,321   (22,734)
Accrued expenses  (31,306)  (235,684)
Other liabilities and deposits  19,870   1,391 
Net Cash Provided by (Used in) Operating Activities  98,813   (579,939)
Cash Flows from Investing Activities:        
         
    Capital Improvements  (71,747)  - 
Purchases of investment properties  (988,000)  (33,514)
Net Cash Used in Investing Activities  (1,059,747)  (33,514)
Cash Flows from Financing Activities:        
Proceeds from related – party note  -   7,076 
Repayment of note payable – line of credit related party  (913,500)  (2,754,550)
Proceeds from note payables  -   8,241,000 
Repayment of notes payable  (126,358)  (4,942,319)
Proceeds from issuance of preferred stock  1,152,350   600,000 
Fees in connection of preferred stock issuance  (80,664)  (110,039)
Repayment of note payable - related party  (108,360)  - 
Payment of mortgage costs recorded as debt discount  (172,768)  - 
         
Preferred shares dividends  (187,496)  (4,667)
Net Cash Provided by (Used in) Financing Activities  (436,796)  1,036,501 
         

Net Change in cash, cash equivalents and restricted cash

  (1,397,730)  423,048 
Cash, cash equivalents and restricted cash at beginning of the period  4,146,411   458,271 
Cash, cash equivalents and restricted cash at end of the period $2,748,681  $881,319 
         

Cash, cash equivalents and restricted cash consist of the following:        
End of period        
Cash and cash equivalents $ 2,412,776  $748,779 
Restricted cash  335,905   132,540 
  $ 2,748,681  $881,319 
Cash, cash equivalents and restricted cash consist of the following:        
Beginning of period       
Cash and cash equivalents $ 3,830,376  $327,122 
Restricted cash  316,035   131,149 
  $ 4,146,411  $458,271 
Cash paid for:        
Income Taxes $-  $- 
Interest $405,409  $218,702 
         
Non-Cash Investing and Financing Activities        
Purchase of Minority Interest in Pecan Grove $-  $537,562 
Notes related to acquisitions $4,150,000   - 
Non-cash Preferred stock accretion $245,493  $- 

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

5

MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

Organization

Manufactured Housing Properties Inc. (the “Company”) is a Nevada corporation whose principal activities are to acquire, own, and operate manufactured housing communities.

Basis of Presentation


Interim Financial Information –

The accompanyingCompany prepares its consolidated financial statements have been prepared by Stack-it Storage, Inc., formerly, Caprock Oil, Inc. (“we”, “our” orunder the “Company”), without audit,accrual basis of accounting, in accordanceconformity with accounting principles generally accepted in the UnitesUnited States of America (“GAAP”).

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with GAAP for interim financial information and pursuantwith the instructions to Form 10-Q of Regulation S-X. They do not include all information and footnotes required by GAAP for complete financial statements. The December 31, 2019 consolidated balance sheet data were derived from audited financial statements but do not include all disclosures required by GAAP. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the rules and regulations ofconsolidated financial statements for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission.Commission on April 14, 2020. The interim unaudited condensed consolidated financial statements should be read in conjunction with those consolidated financial statements included in the Form 10-K. In the opinion of management, these consolidatedall adjustments considered necessary for a fair statement of the financial statements, contain all adjustments, consisting onlysolely of normal recurring adjustments, necessary to fairly state the financial position of the Company as of June 30, 2015, thehave been made. Operating results of its operations for the three monthmonths ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020.

The Company’s formation of all subsidiaries and six month periods ended June 30, 2015date of consolidation are as follows: 

Name of SubsidiaryState of FormationDate of FormationOwnership
Pecan Grove MHP LLCNorth CarolinaOctober 12, 2016100%*
Butternut MHP Land LLCDelawareMarch 1, 2017100%
Azalea MHP LLCNorth CarolinaOctober 25, 2017100%
Holly Faye MHP LLCNorth CarolinaOctober 25, 2017100%
Chatham Pines MHP LLCNorth CarolinaOctober 31, 2017100%
Maple Hills MHP LLCNorth CarolinaOctober 31, 2017100%
Lakeview MHP LLCSouth CarolinaNovember 1, 2017100%
MHP Pursuits LLCNorth CarolinaJanuary 31, 2019100%
Mobile Home Rentals LLCNorth CarolinaSeptember 30, 2016100%
Hunt Club MHP LLCSouth CarolinaMarch 8, 2019100%
B&D MHP LLCSouth CarolinaApril 4, 2019100%
Crestview MHP LLCNorth CarolinaJune 28, 2019100%
Springlake MHP LLCGeorgiaOctober 10, 2019100%
ARC MHP LLCSouth CarolinaNovember 13, 2019100%
Countryside MHP LLCSouth CarolinaMarch 12, 2020100%
Evergreen MHP LLCTennesseeMarch 17, 2020100%

*The Company originally acquired a 75% interest. In January 2019, the Company acquired the remaining 25% interest from a related party.

All intercompany transactions and 2014,balances have been eliminated in consolidation. The Company does not have a majority or minority interest in any other company, either consolidated or unconsolidated.

6

MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Revenue Recognition

The Company’s revenues primarily consist of rental revenues and fee and other income. The Company has the following revenue sources and revenue recognition policies:

·Rental revenues include revenues from the leasing land lot or a combination of both, the mobile home and land at our properties to tenants.
oRevenues from the leasing of land lot or a combination of both, the mobile home and land at the Company’s properties to tenants include (i) lease components, including land lot or a combination of both, the mobile home and land, and (ii) reimbursement of utilities and account for the components as a single lease component in accordance with Accounting Standards Codification (“ASC”) 842.
oRevenues derived from fixed lease payments are recognized on a straight-line basis over the non-cancelable period of the lease. The Company commences rental revenue recognition when the underlying asset is available for use by the lessee. Revenue derived from the reimbursement of utilities are generally recognized in the same period as the related expenses are incurred. The Company’s leases are month-to-month.
·Fee and other income include late fees, violation fees and other revenue arising from contractual agreements with third parties. This revenue is recognized as the services are transferred in accordance with ASC 606.
·Mobile home sale revenues are recognized in accordance with Topic 606 of the Financial Accounting Standards Board (“FASB”) ASC for revenue recognition. On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09, which is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company considers revenue realized or realizable and earned when all the five following criteria are met: (1) identification of the contract with a customer, (2) identification of the performance obligations in the contract, (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligations in the contract, and (5) recognition of revenue when (or as) we satisfy a performance obligation.

Under ASC 842, the Company must assess on an individual lease basis whether it is probable that the Company will collect the future lease payments. The Company considers the tenant's payment history and current credit status when assessing collectability. When collectability is not deemed probable, the Company will write-off the tenant's receivables, including straight-line rent receivable, and limit lease income to cash received.

Accounts Receivable

Accounts receivable consist primarily of amounts currently due from residents. Accounts receivables are reported in the balance sheet at outstanding principal adjusted for any charge-offs and the allowance for losses. The Company records an allowance for bad debt when receivables are over 90 days old.

Acquisitions

The Company accounts for acquisitions as asset acquisitions in accordance with ASC 805, “Business Combinations,” and allocates the purchase price of the property based upon the fair value of the assets acquired, which generally consist of land, site and land improvements, buildings and improvements and rental homes. The Company allocates the purchase price of an acquired property generally determined by internal evaluation as well as third-party appraisal of the property obtained in conjunction with the purchase.

Net Income (Loss) Per Share

Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding plus the weighted average number of net shares that would be issued upon exercise of stock options pursuant to the treasury stock method. Total dilutive securities outstanding as of March 31, 2020 and 2019 totaled 656,175 and 541,334 stock options, respectively, 1,890,000 and 280,000 convertible Preferred Series A shares, respectively, which are convertible into common shares at $2.50 per share for a total of 756,000 and 112,000, respectively, which are not included in dilutive loss per share as the effect would be anti-dilutive.

Use of Estimates

The presentation of financial statements in conformity with GAAP requires management to make estimates and assumptions that effect 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 reported period. Actual results could differ from those estimates.

Investment Property and Depreciation

Investment property which consists of property and equipment are carried at cost. Depreciation for Sites and Building is computed principally on the straight-line method over the estimated useful lives of the assets (ranging from 15 to 25 years). Depreciation of Improvements to Sites and Buildings, Rental Homes and Equipment and Vehicles is computed principally on the straight-line method over the estimated useful lives of the assets (ranging from 3 to 25 years). Land Development Costs are not depreciated until they are put in use, at which time they are capitalized as Sites and Land Improvements. Interest Expense pertaining to Land Development Costs are capitalized. Maintenance and Repairs are charged to expense as incurred and improvements are capitalized. The costs and related accumulated depreciation of property sold or otherwise disposed of are removed from the financial statement and any gain or loss is reflected in the current period’s results of operations.


MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Impairment Policy

The Company applies FASB ASC 360-10, “Property, Plant & Equipment,” to measure impairment in real estate investments. Rental properties are individually evaluated for impairment when conditions exist which may indicate that it is probable that the sum of expected future cash flows (on an undiscounted basis without interest) from a rental property is less than the carrying value under its historical net cost basis. These expected future cash flows consider factors such as future operating income, trends and prospects as well as the effects of leasing demand, competition and other factors. Upon determination that a permanent impairment has occurred, rental properties are reduced to their fair value. For properties to be disposed of, an impairment loss is recognized when the fair value of the property, less the estimated cost to sell, is less than the carrying amount of the property measured at the time there is a commitment to sell the property and/or it is actively being marketed for sale. A property to be disposed of is reported at the lower of its carrying amount or its estimated fair value, less its cost to sell. Subsequent to the date that a property is held for disposition, depreciation expense is not recorded. There was no impairment during the three monthmonths ended March 31, 2020 and six month periods2019.

Cash and Cash Equivalents

The Company considers all highly liquid financial instruments purchased with an original maturity of three months or less to be cash equivalents.

The Company maintains cash balances at banks and deposits at times may exceed federally insured limits. Management believes that the financial institutions that hold the Company’s cash are financially secure and, accordingly, minimal credit risk exists. At March 31, 2020 and December 31, 2019, the Company had approximately $1,155,724 and $2,553,454 above the FDIC-insured limit, respectively, including restricted cash held for tenants security deposits of $335,905 and $316,035, respectively.

Stock Based Compensation

All stock based payments to employees, nonemployee consultants, and to nonemployee directors for their services as directors, including any grants of restricted stock and stock options, are measured at fair value on the grant date and recognized in the statements of operations as compensation or other expense over the relevant service period in accordance with FASB ASC Topic 718. Stock based payments to nonemployees are recognized as an expense over the period of performance. Such payments are measured at fair value at the earlier of the date a performance commitment is reached or the date performance is completed. In addition, for awards that vest immediately and are nonforfeitable the measurement date is the date the award is issued. The Company recorded stock option expense of $539 and $8 during the three months ended June 30, 2015March 31, 2020 and 2014.  2019, respectively.

Fair Value of Financial Instruments

The Company follows paragraph 825-10-50-10 of the FASB ASC for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB ASC to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

Reclassifications

Certain amounts in the prior year amountsperiod presentation have been reclassified to conform with the current presentation.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year presentation.  Thesein which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company recognizes deferred tax assets to the extent that the Company believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

The Company recognizes interest and penalties, if any, with income tax expense in the accompanying consolidated statement of operations. As of March 31, 2020, and December 31, 2019, there were no such accrued interest or penalties.


MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires that entities use a new forward looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 is effective for annual reporting periods, including interim reporting periods within those periods, beginning after December 15, 2022. The Company is currently evaluating the potential impact this standard may have on the consolidated financial statementsstatements.

In March 2019, the FASB issued ASU No. 2019-01, “Leases (Topic 842): Codification Improvements.” ASU 2019-01 aligns the guidance for fair value of the underlying asset by lessors with existing guidance in Topic 842. The ASU requires that the fair value of the underlying asset at lease commencement is its cost reflecting in volume or trade discounts that may apply. However, if there has been a significant lapse of time between the date the asset was acquired and the lease commencement date, the definition of fair value as outlined in Topic 820 should be readapplied. In addition, the ASU exempts both lessees and lessors from having to provide certain interim disclosures in conjunctionthe fiscal year in which a company adopts the new leases standard. The update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is still evaluating the impact of this ASU on the Company’s consolidated financial statements.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying condensed consolidated financial statements.

Impact of Coronavirus Pandemic

In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China. The virus has since spread to over 150 countries and every state in the United States. On March 11, 2020, the World Health Organization declared the outbreak a pandemic, and on March 13, 2020, the United States declared a national emergency.

Most states and cities, including where the Company’s properties are located, have reacted by instituting quarantines, restrictions on travel, “stay at home” rules and restrictions on the types of businesses that may continue to operate, as well as guidance in response to the pandemic and the need to contain it.

The Company is carefully reviewing all rules, regulations, and orders and responding accordingly. The Company has taken steps to take care of its employees, including providing the ability for employees to work remotely and implementing strategies to support appropriate social distancing techniques for those employees who are not able to work remotely. The Company has also taken precautions with regard to employee, facility and office hygiene as well as implementing significant travel restrictions. The Company is also assessing its business continuity plans for all business units in the context of the pandemic. This is a rapidly evolving situation, and the Company will continue to monitor and mitigate developments affecting its workforce, its tenants, and the public at large to the extent the Company is able to do so.

The rules and restrictions put in place have had a negative impact on the economy and business activity and may adversely impact the ability of the Company’s tenants, many of whom may be restricted in their ability to work, to pay their rent as and when due.  In addition, the Company’s property managers may be limited in their ability to properly maintain the Company’s properties.  Enforcing the Company’s rights as landlord against tenants who fail to pay rent or otherwise do not comply with the terms of their leases may not be possible as many jurisdictions, including those where are properties are located, have established rules and/or regulations preventing us from evicting tenants for certain periods in response to the pandemic. If the Company is unable to enforce its rights as landlords, our Annual Reportbusiness would be materially affected. 

If the current pace of the pandemic cannot be slowed and the spread of the virus is not contained, the Company’s business operations could be further delayed or interrupted. The Company expects that government and health authorities may announce new or extend existing restrictions, which could require the Company to make further adjustments to its operations in order to comply with any such restrictions. The duration of any business disruption cannot be reasonably estimated at this time but may materially affect the Company’s ability to operate its business and result in additional costs.

The extent to which the pandemic may impact the Company’s results will depend on Form 10-Kfuture developments, which are highly uncertain and cannot be predicted as of the date hereof, including new information that may emerge concerning the severity of the pandemic and steps taken to contain the pandemic or treat its impact, among others. Nevertheless, the pandemic and the current financial, economic and capital markets environment present material uncertainty and risk with respect to the Company’s performance, financial condition, results of operations and cash flows.

NOTE 2 – Revision of Prior Year Immaterial Misstatement

During the quarter ended March 31, 2020, the Company identified a certain error in recording our minority interest buyout for Pecan Grove during the first quarter of 2019. This error resulted in decreasing our land Investment Property and Equity by $244,321 and had no impact on our income statements.

The Company assessed the materiality of this error considering both qualitative and quantitative factors and determined that for both the quarter and fiscal year ended December 31, 2014.


Name Change and Reverse Stock Split – Effective July 17, 2015,2019, the Company changed its name from Caprock Oil, Inc. to Stack-it Storage, Inc. and completed a 1-for-10 reverse split of its Common Stock.  Accordingly, all Common Stock share and per share amounts in the consolidated financial statements have been retroactively adjusted to reflect the reverse stock split.  Following the sale of a substantial portion of the Company’s oil and gas properties to another company in May 2015 (see Note 2), the Company expects to continue to maintain ownership of its remaining oil and gas properties for the foreseeable future while it also plans to seek new business opportunities as an owner and operator of self-storage facilities.

Recently Issued Accounting Pronouncements – In the six months ended June 30, 2015, the Financial Accounting Standards Board issued several new Accounting Standards Updates which the Company believes will have little or no applicability to the Company.


(2)           Sales of Oil & Gas Properties

In May 2015, the Company sold all of its working interests in three operated oil and gas fields in Texas to another oil and gas company.  The cash sales price received at closingerror was $3,100,000, which is subject to a post-closing adjustment for the net revenues and expenditures attributable to the properties in the period from the effective date, January 1, 2015, to the closing date.  In July, 2015, the amount of the post-closing adjustment was determined by mutual agreement of both parties to be less than $5,000.   The net proceeds of this sale were largely used to pay off the Company’s long term debt (see Note 7).  Asset retirement obligations of $383,895 were assumed by the buyer and other liabilities in the amount of $653,330 were reduced in this sale.  No gain or loss was recognized on this sale.

In January 2015, the Company sold its non-operated working interest in a producing oil field in Texas to the company which is the operator of the field (see Note 11).  The cash sales price was $500,000, subject to adjustments for unpaid revenues and expenditures incurred through the effective date, January 1, 2015.  After taking such adjustments into account, the Company received net cash proceeds from the sale in the amount of approximately $261,000.  No gain or loss was recognized on this sale.

7

(3)           Going Concern

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.immaterial. The Company has reported net losses from operations in the last two years and has a substantial working capital deficitdecided to correct this error as of June 30, 2015.  These factors, among others, indicate that the Company may be unablerevisions to continue as a going concern for a reasonable period of time.  The consolidatedour previously issued financial statements do not contain any adjustments to reflectand will adjust the possible future effects on the classification of assets or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.


(4)           Acquisition of Cinco NRG, LLC

On March 17, 2014, the Company completed the acquisition of Cinco NRG, LLC (“Cinco”), a private oil and gas company, which was under common control by its majority shareholder.  The Company acquired Cinco through the issuance of a total of 4,694,254 shares of its Common Stock.  As a resultForm 10-K when filed in succeeding periods of this transaction,fiscal year.

The table below present the members of Cinco owned approximately 95%impact of the Company’s total shares of Common Stock outstanding at the date of the acquisition.  In conjunction with this transaction, the Company also issued 125,000 shares of its Common Stock to an officer of the Company (see Note 10).  Cinco was formed in April 2013 to acquire working interests in specific oil and gas properties in the States of Texas and Alabama.  At the time of the acquisition, Cinco had a small working interest in a producing oil field in Texas and working interests in several exploratory prospects in Alabama.  Cinco is now a wholly-owned subsidiary of the Company.


As noted above, the Company and Cinco were both under common control by a majority shareholder prior to this transaction.  Under the accounting rules for entities under common control, the Company has accounted for Cinco’s operations on a retrospective basisrevision in the Company’s condensed consolidated financial statements fromstatements.

 December 31, 2019 
 As Previously Reported  Adjustment  As Revised 
Balance Sheet / Statement of Changes in Stockholders’ Equity         
Investment Property         
Land $11,130,259  $(244,321) $10,885,938 
Total Investment Property  34,811,785   (244,321)  34,567,464 
Net Investment Property  33,416,827   (244,321)  33,172,506 
Total Assets  38,152,131   (244,321)  37,907,810 
Additional Paid in Capital  1,004,170   (244,321)  759,849 
Total Stockholders’ Deficit  (2,712,554)  (244,321)  (2,956,875)
Total Liabilities and Stockholders' Deficit $38,152,131  $(244,321) $37,907,810 

The unaudited condensed consolidated income statement and statement of cash flows are not presented because there is no impact to these statements.

NOTE 3 – INVESTMENT PROPERTY

Investment Property consists of the inception of Cinco in April 2013.



(5)           Oil & Gas Properties

In the six months ended June 30, 2015, the Company recorded a total non-cash impairment allowance to the carrying value of its oilfollowing as of:

  

March 31,

2020

  December 31,
2019		 
     (As Revised) 
Investment Property      
Land $12,094,338  $10,885,938 
Site and Land Improvements  20,286,401   17,466,801 
Buildings and Improvements  7,396,472   6,214,725 
Total Investment Property  39,777,211  

 

 

34,567,464 
Less: accumulated depreciation and amortization  (1,750,330)  (1,394,958)
Net Investment Property $38,026,881  $33,172,506 

Depreciation and gas properties in the amount of $1,395,224 (of this amount, $397,300 was recorded in the three months ended June 30, 2015, while the remaining $997,924 was recorded inamortization expense totaled $389,993 and $134,926 for the three months ended March 31, 2015).  Such adjustments resulted from applying2020, and 2019, respectively.

During the quarterly “ceiling test” limitations underthree months ended March 31, 2019, the full cost accounting rulesCompany acquired the 25% minority interest in Pecan Grove MHP LLC. The Company also acquired two manufactured housing communities and accounted for them as asset acquisitions during a period of rapidly declining oil prices.  These rules limit the capitalized costs of evaluated propertiesthree months ended March 31, 2020 totaling $5,310,767 (See note 8).


MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 – PROMISSORY NOTES

Secured Promissory Notes

The Company has issued promissory notes payable to lenders related to the aggregateacquisition of its manufactured housing communities. These promissory notes range from 3.3% to 7.0% with 5 to 30 years principal amortization. Two of the “estimated present value,” discounted at a 10-percentpromissory notes had an initial 6 months period on interest rate, of future net revenues from proved reserves, based on current economic and operating conditions.


As of June 30, 2015, the Company has exploratory projects with capitalized costs of $214,018 that were reflected in unevaluated properties (such amount excludes the costs of exploratory projects of $923,115, which were transferred to evaluated properties in the six months ended June 30, 2015).  Capitalized costs of the remaining projects have not been evaluated, therefore, no related depreciation, depletion and amortization expense was recorded as of June 30, 2015.  An evaluation of these projects is largely expected to be completed by December 31, 2015.

8
(6)           Creditor Settlements

In June 2015, the Company reached agreements with various unsecured creditors to settle outstanding payable balances at substantially discounted amounts from the recorded liabilities in exchange for immediate payments of the discounted amounts.  In accordance with such agreements, the Company settled total liabilities at recorded amounts of $910,401 for a total discount of $523,815.  Accordingly, the Company recognized a gain on the creditor settlements in the amount of $523,815 in the six months ended June 30, 2015.


(7)           Long Term Debt

As of June 30, 2015 and December 31, 2014, the Company had the following long-term debt obligations:

  June 30,  December 31, 
  2015  2014 
$25,000,000 line of credit with a bank, maturing on January 1, 2015, default interest rate at 5.0% above prime, payable monthly, secured by first lien on CYMRI, LLC’s oil and gas properties $-  $1,286,000 
         
Bridge loans from individuals, due in October 2015, interest at 15% per annum, with second position security interest on oil and gas properties pledged to bank and first position on other oil and gas properties  125,000   700,000 
         
Unsecured notes payable assumed in acquisition of Cinco NRG, LLC  -   25,000 
         
Other short term notes for equipment and insurance financing, interest rates at 6% to 8%  12,295   41,040 
   137,295   2,052,040 
Current portion of long term debt  (137,295)  (2,052,040)
         
             Long term debt, net of current portion $-  $- 
Borrowings under the bank credit agreementonly payments. The promissory notes are secured by the oilreal estate assets and gas properties$7,471,738 for four assets were guaranteed by Raymond M. Gee, the Company’s chairman, chief executive officer and owner of our legacy subsidiaries, CYMRI, LLC (“CYMRI”) and Triumph Energy, Inc. (“Triumph”), were subject to a borrowing base, dependent on oil and gas reserves.  On January 1, 2015, the credit agreement expired andprincipal stockholder of the outstanding borrowings of $1,286,000 became due and payable, however,Company. 

During the three months ended March 31, 2019, the Company did not make such payment at that time and was in defaultrefinanced a total of $4,940,750 from current loans payable to $8,241,000 of new notes payable from five of the credit agreement.communities, resulting in an additional loan payable of $3,320,859. The Company continuedused the additional loans payable proceeds from the refinance to make monthly interest payments onretire the outstanding borrowings atrelated party note payable described below. During the default rate of interest in the first quarter of 2015.  Upon closing of the sale of CYMRI’s producing oil and gas properties on May 20, 2015 (see Note 2),three months ended March 31, 2019, the Company fully repaid all outstanding borrowings underwrote off mortgage costs of $68,195 and capitalized $110,039 of mortgage costs due to the credit agreement and the credit agreement was terminated.


In October 2014,refinancing.

As of March 31, 2020, the Company implemented a “bridge loan” program whereby it made short term borrowings from a grouprecorded $222,768 of individual lenders.  Bymortgage cost related to the two acquisitions.

The following are terms of these notes:

  Maturity Date Interest Rate  Balance 03/31/20  Balance 12/31/19 
Butternut MHP Land LLC 03/30/20  6.500% $1,111,166  $1,114,819 
Butternut MHP Land LLC Mezz 04/01/27  7.000%  278,834   280,013 
Pecan Grove MHP LLC 02/22/29  5.250%  3,086,021   3,095,274 
Azalea MHP LLC 03/01/29  5.400%  824,965   835,445 
Holly Faye MHP LLC 03/01/29  5.400%  579,825   574,096 
Chatham MHP LLC 04/01/24  5.875%  1,760,497   1,771,506 
Lake View MHP LLC 03/01/29  5.400%  1,851,006   1,857,266 
B&D MHP LLC 04/25/29  5.500%  1,845,717   1,854,788 
Hunt Club MHP LLC 05/01/24  5.750%  1,438,294   1,447,364 
Crestview MHP LLC 07/31/24  5.500%  4,146,819   4,173,652 
Maple MHP LLC 01/01/23  5.125%  2,668,253   2,688,653 
Springlake MHP LLC 11/14/22  3.310%  4,000,000   4,000,000 
ARC MHP LLC 01/01/30  5.500%  5,275,121   5,300,000 
Countryside MHP LLC 03/20/50  5.500%  3,000,000   -   
Evergreen MHP LLC 04/01/32  3.990%  1,150,000   -   
Totals note payables        33,016,518   28,992,876 
Discount Direct Lender Fees        (821,772)  (633,629)
Total net of Discount       $32,194,746  $28,359,247 

Related Party Promissory Note

On May 2015, such borrowings had reached $820,000, of which $220,000 was from related parties (see Note 11). Amounts advanced under the bridge loan program accrued interest at the rate of 15% per annum, with the principal due in one year and a prepayment penalty due in the event of early payment (payable in cash or stock).  The bridge lenders were granted a subordinated security interest in the Company’s assets.  Upon closing of the sale of a small producing property in January 2015 (see Note 2),8, 2017, the Company madeissued a partial paymentpromissory note to the bridge lendersMetrolina Loan Holdings, LLC (“Metrolina”) in the principal amount of $100,000$3,000,000. The note is interest only payment based on 8%, and also10% deferred until maturity to be paid prepayment penalties consisting of cash of $9,273 and 520 shares of Common Stock.  Upon closing of the sale of CYMRI’s producing oil and gas properties on May 20, 2015 (see Note 2), the Company fully repaid all then outstanding bridge loans in thewith principal amount of $820,000 and paid cash prepayment penalties in the amount of $88,061.

In June 2015, the Company re-borrowed $125,000 from an entity affiliated with a major shareholder under the same loan program, but with an equity conversion feature, in anticipation of near term capital needs in the self-storage business (see Notes 1 and 13).  This convertiblebalance. The note payable was evaluated to determine whether it had a beneficial conversion feature or the characteristics of a derivative and was determined to have neither.

9

(8)           Income Tax Refund

In June 2015, the Company received a refund from the Internal Revenue Service (“IRS”) for overpayment of income taxes on its 2008 consolidated federal income tax return in the amount of $61,492.  This refund resulted from the settlement of an IRS audit of the Company’s 2008 consolidated federal income tax return.  The Company had not previously recorded a tax benefit for such a refund.  Accordingly, the Company recognized a current income tax benefit for the amount of this income tax refund in the six months ended June 30, 2015.


(9)           Stockholders’ Equity

Basic income or loss per common share is computed by dividing the net income or loss by the weighted average number of shares of common stock outstanding during the period.  Diluted income or loss per common share is computed by dividing net income or loss by the weighted average number of shares of common stock outstanding during the period and potentially dilutive common share equivalents, consisting of stock options and warrants, under the Treasury Stock Method. The effects of potential common stock equivalents are not included in computations when their effect is anti-dilutive.  In the three month and six month periods ended June 30, 2015 and 2014, there were no dilutive common stock equivalents reflected in the determination of net loss per share as the effect would have been anti-dilutive.

On June 30, 2014, the Company closed a private equity offering with three accredited investors for the sale of 25,000 Units with each Unit comprised of twooriginally awarded Metrolina 455,000 shares of Common Stock as consideration, which resulted in making Metrolina a related party due to its significant ownership. During the year ended December 31, 2019, the Company paid off the entire balance on the note of $2,754,550 plus interest and amended the agreement to allow for the redeployment of the $3,000,000 available, eliminated the conversion option whereby Metrolina could convert the ratio of total outstanding debt at time of exercise of the option into an amount of newly issued shares of the Company’s Common Stock determined by dividing the outstanding indebtedness by $3,000,000 multiplied by 10% with a Warrantcap of 864,500 shares. As of March 31, 2010, there was $2,183,500 available for redeployment. The amendment resulted in issuing an additional 545,000 shares with a fair value of $305,200 for a total of 1,000,000 shares awarded to Metrolina. The note gives Metrolina the right and option to purchase oneits pro rata share of Common Stock,debt or equity securities issued to maintain up to 10% equity interest in the Company at an offeringthe most recent price of $20.00 per Unit, resultingany equity transaction for seven years from the amendment dated February 26, 2019. This note matures in gross proceedsMay of $500,000.

(10)         Stock-Based Compensation

Through July 17, 2015,2023. As of March 31, 2020, and December 31, 2019, the balance on this note was $816,500 and $1,730,000, respectively. During the three months ended March 31, 2020 and 2019, the Company had a stock-based compensation plan which was approved by the stockholders in October 2005 and amended in October 2006.  Under this plan, which was scheduled to expire in October 2015, a maximum of 24,000 shares could be awarded to directors, employees and consultants in the form of grants of stock or stock options with underlying registration rights.  The terms and other conditions applicable to each such grant were generally determined by the Board of Directors.  Effective July 17, 2015, this plan was replaced by a new shareholder approved compensation plan, with substantially the same features, under which a maximum of 2,000,000 shares may be awarded to directors, employees and consultants in the form of stockrecorded interest expense related grants (with certain annual and per person limitations).
Pursuant to the terms of the October 2005 stock-based compensation plan, the Company made a grant of 24,000 freely tradable shares of Common Stock in March 2014 to a consultant who performed certain services for the Company.  Based on quoted prices fornote totaling $36,028 and $86,238, respectively. The related party note is guaranteed by Mr. Gee, the Company’s stock, the Company calculated the value of such issued shares at $132,000 and recorded an expense of that amount in the six months ended June 30, 2014.Chief Executive Officer.


10
In conjunction with the acquisition of Cinco,

MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Revolving Promissory Note

On October 1, 2017, the Company issued 125,000 shares of restricted Common Stocka revolving promissory note to anRaymond M. Gee, the Company’s chairman and chief executive officer, ofpursuant to which the Company inmay borrow up to $1,500,000 from Mr. Gee on a revolving basis for working capital purposes. This note has a five-year term with no annual interest and principal payment is deferred until the maturity date. As of March 2014 (see Note 4).  The restricted shares will vest over a three year period.  Based31, 2020, and December 31, 2019, the outstanding balance on quoted prices for the Company’s stock, the Company calculated the value of such issued shares at $687,500this note was $689,546 and will amortize that total amount of expense over a three year period.$797,906, respectively. During the sixthree months ended June 30, 2015March 31, 2020, and 2014,2019, the Company recorded amortized expense in the amounts of $114,584 and $76,388, respectively, for this grant.


In May 2014, the Company engaged a new Chief Executive Officer and granted him non-registered options to acquire 200,000 shares of Common Stock at an exercise price of $6.50 per share, which was equalimputed interest related to the quoted pricenote of its Common Stock on the date$0 and $14,004, respectively.

Maturities of the grant.  Of these options, 20,000 shares vested immediatelyLong-Term Obligations for Five Years and the remaining 180,000 shares will vest ratably over a threeBeyond

The minimum annual principal payments of notes payable at March 31, 2020 by fiscal year period.  The estimated fair value of the option was calculated using a Black Scholes option pricing model based on the following assumptions: (a) Computed volatilitywere:

2020 (remainder of year) $358,920 
2021  572,362 
2022  4,606,975 
2023  3,065,286 
2024  7,192,359 
Thereafter  17,220,616 
Total minimum principal payments $33,016,518 

NOTE 5 – 187%; (b) Expected risk free interest rate – 1.6%; (c) Expected dividend yield – zero; (d) Expected option term – 4.4 years, calculated pursuant to ASC 718-10; and (e) Forfeitures – 0%, subject to adjustment for actual experience.  On the basis of these assumptions, the Company calculated the value of such options at $1,238,000 and will amortize that total amount of expense over a three year period.  During the six months ended June 30, 2015 and 2014, the Company recorded amortized expense in the amounts of $185,700 and $162,300, respectively, for this grant.  The intrinsic value of such non-registered options is zero and there are no other options currently outstanding.


For the grants summarized above, the Company recorded aggregate stock compensation expense in the amounts of $300,284 and $370,688, respectively, in the six month periods ended June 30, 2015 and 2014.  As of June 30, 2015, the Company has total future unrecognized compensation expense in the amount of $1,062,847.

(11)         Related Party Transactions

A member of the Company’s Board of Directors is the president of a private oil and gas company which has a substantial number of oil and gas properties in Texas and Louisiana.  Cinco owned a 10% working interest in a producing field in Texas operated by this company (through January 2015) and also participated for a 5% working interest in the drilling of an unsuccessful well operated by this company in Louisiana in July 2014.  In both instances, this company billed Cinco for its share of the capital and operating costs of the properties under a standard industry joint operating agreement.  Cinco’s resulting accounts payable balance with this company in the amount of $217,724 at December 31, 2014, was repaid in conjunction with the sale transaction in January 2015 (see Note 2).

Through May 20, 2015, the Company received short-term bridge loans from entities affiliated with a major shareholder in the amount of $220,000, which were repaid on that date (see Note 7).  In June 2015, the Company re-borrowed $125,000 from one of these entities in anticipation of near term capital needs in the self-storage business (see Notes 1 and 13).

 (12)        Contingencies

COMMITMENTS AND CONTINGENCIES

From time to time, the Company may become involved in litigationvarious lawsuits and legal proceedings, which arise in the ordinary course of business. At the present time,However, litigation is subject to inherent uncertainties, and an adverse result in these or other than the Company’s disclosures below, the Company’s managementmatters may arise that may harm its business. The Company is currently not aware of any such litigation or other legal proceedings or claims that couldthey believe will have, individually or in the aggregate, a material adverse effect on its resultsbusiness, financial condition or operating results.

NOTE 6 – STOCKHOLDERS’ EQUITY

Preferred Stock

The Company is authorized to issue up to 10,000,000 shares of operations, cash flows or financial condition.

11
Triumph Energy, Inc., a current subsidiary, and a former subsidiary which was sold in 2008, were named as joint defendants in several lawsuits involving professional liability and other matters arising in the normal course of business in the State of Louisiana, most of which were settled at no net cost to Triumph.  At present, there is only one such remaining case which is expected to be settled shortly at no net cost to Triumph.  Accordingly,preferred stock, $0.01 par value.

Series A Preferred Stock

On May 8, 2019, the Company has recorded no loss provision as of June 30, 2015.


In October 2008, an insurer for the Company’s inactive Construction Staffing subsidiary filed a lawsuit againstcertificate of designation with the subsidiary alleging defaultNevada Secretary of State pursuant to which the Company designated 4,000,000 shares of its preferred stock as Series A Cumulative Convertible Preferred Stock (the “Series A Preferred Stock”). The Series A Preferred Stock has the following voting powers, designations, preferences and relative rights, qualifications, limitations or restrictions:

Ranking. The Series A Preferred Stock ranks, as to dividend rights and rights upon our liquidation, dissolution, or winding up, senior to the Common Stock.

Dividend Rate and Payment Dates. Dividends on a premium finance obligationthe Series A Preferred Stock are cumulative and payable monthly in arrears to all holders of record on the applicable record date. Holders of Series A Preferred Stock will be entitled to receive cumulative dividends in the amount of approximately $200,000,$0.017 per share each month, which is equivalent to the rate of 8% of the $2.50 liquidation preference per share. Dividends on shares of Series A Preferred Stock will continue to accrue even if any of the Company’s agreements prohibit the current payment of dividends or the Company does not have earnings. During the three months ended March 31, 2020, and 2019, the Company paid dividends of $94,500 and $4,667, respectively.

Liquidation Preference. The liquidation preference for each share of Series A Preferred Stock is $2.50. Upon a liquidation, dissolution or winding up of the Company, holders of shares of Series A Preferred Stock will be entitled to receive the liquidation preference with respect to their shares plus interestan amount equal to any accrued but unpaid dividends (whether or not declared) to, but not including, the date of payment with respect to such shares.

11

MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Stockholder Optional Conversion. Each share of Series A Preferred Stock is convertible, at any time and attorney’s fees.from time to time, at the option of the holder thereof and without the payment of additional consideration, into that number of shares of Common Stock determined by dividing the liquidation preference of such share by the conversion price then in effect. The conversion price is initially equal $2.50, subject to adjustment as set forth in the certificate of designation. In addition, if at any time the trading price of the Common Stock is greater than the liquidation preference of $2.50, the Company may deliver a written notice to all holders to cause each holder to convert all or part of such holders’ Series A Preferred Stock.

Company Call and Stockholder Put Options. Commencing on the fifth anniversary of the initial issuance of shares of Series A Preferred Stock and continuing indefinitely thereafter, the Company will have a right to call for redemption the outstanding shares of Series A Preferred Stock at a call price equal to $3.75, or 150% of the original issue price of the Series A Preferred Stock, and correspondingly, each holder of shares of Series A Preferred Stock shall have a right to put the shares of Series A Preferred Stock held by such holder back to us at a put price equal to $3.75, or 150% of the original issue purchase price of such shares. During the three months ended March 31, 2020 and 2019, the Company recorded a put option value accretion of $118,125 and $0, respectively.

Voting Rights. The Company believes that its inactive Construction Staffing subsidiary has a meritorious position in this mattermay not authorize or issue any class or series of equity securities ranking senior to the Series A Preferred Stock as to dividends or distributions upon liquidation (including securities convertible into or exchangeable for any such senior securities) or amend the Company’s articles of incorporation (whether by merger, consolidation, or otherwise) to materially and has not engaged legal counsel to defend this case.  A default judgment was rendered in favoradversely change the terms of the plaintiff in January 2011Series A Preferred Stock without the affirmative vote of at least two-thirds of the votes entitled to be cast on such matter by holders of the outstanding shares of Series A Preferred Stock, voting together as a class. Otherwise, holders of the shares of Series A Preferred Stock do not have any voting rights.

As of March 31, 2020, there were 1,890,000 shares of Series A Preferred Stock issued and outstanding. As of March 31, 2020, the Series A Preferred Stock balance was made up of Series A Preferred Stock totaling $4,725,000 and accretion of put options totaling $302,125. As of December 31, 2019, the Series A Preferred Stock balance was made up of Series A Preferred Stock totaling $4,725,000 and accretion of put options totaling $184,000.

Series B Preferred Stock

On December 2, 2019, the Company filed a certificate of designation with the Nevada Secretary of State pursuant to which the Company designated 1,000,000 shares of its preferred stock as Series B Cumulative Redeemable Preferred Stock (the “Series B Preferred Stock”). The Series B Preferred Stock has recorded an accrual for the subsidiary’s estimated loss exposure of approximately $100,000following voting powers, designations, preferences and relative rights, qualifications, limitations or restrictions:

Ranking. The Series B Preferred Stock rank, as of June 30, 2015.


The Company, as a lesseeto dividend rights and operator of oilrights upon liquidation, dissolution, or winding up, senior to the Common Stock and gas properties, is subject to various federal, statepari passu with the Series A Preferred Stock.

Dividend Rate and local laws and regulations relating to discharge of materials into, and protection of, the environment. These laws and regulations may, among other things, impose liabilityPayment Dates. Dividends on the lessee under an oilSeries B Preferred Stock are cumulative and gas lease for the costpayable monthly in arrears to all holders of pollution clean-up resulting from operations and subject the lessee to liability for pollution damages. The Company maintains insurance coverage, which it believes is customary in the industry, although the Company is not fully insured against all environmental risks. The Company is not aware of any environmental claims existing as of June 30, 2015, which have not been provided for, covered by insurance or otherwise have a material impact on its financial position or results of operations. There can be no assurance, however, that current regulatory requirements will not change, or past noncompliance with environmental laws will not be discoveredrecord on the Company’s properties.


(13)        Subsequent Events

Effective July 27, 2015, the short term bridge loan that was made in June 2015 by an entity affiliated with a major shareholderapplicable record date. Holders of Series B Preferred Stock will be entitled to receive cumulative dividends in the amount of $125,000$0.067 per share each month, which is equivalent to the annual rate of 8% of the $10.00 liquidation preference per share; provided that upon an event of default (generally defined as the Company’s failure to pay dividends when due or to redeem shares when requested by a holder), such amount shall be increased to $0.083 per month, which is equivalent to the annual rate of 10% of the $10.00 liquidation preference per share. During the three months ended March 31, 2020 and 2019, the Company paid dividends of $92,996 and $0, respectively.

Liquidation Preference. The liquidation preference for each share of Series B Preferred Stock is $10.00. Upon a liquidation, dissolution or winding up of the Company, holders of shares of Series B Preferred Stock will be entitled to receive the liquidation preference with respect to their shares plus an amount equal to any accrued but unpaid dividends (whether or not declared) to, but not including, the date of payment with respect to such shares.

Company Call and Stockholder Put Options. Commencing on the fifth anniversary of the initial issuance of shares of Series B Preferred Stock and continuing indefinitely thereafter, the Company will have a right to call for redemption the outstanding shares of Series B Preferred Stock at a call price equal to $15.00, or 150% of the original issue price of the Series B Preferred Stock, and correspondingly, each holder of shares of Series B Preferred Stock shall have a right to put the shares of Series B Preferred Stock held by such holder back to the Company at a put price equal to $15.00, or 150% of the original issue purchase price of such shares. During the three months ended March 31, 2020 and 2019, the Company recorded a put option value accretion of $127,368 and $0, respectively.


MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Voting Rights. The Company may not authorize or issue any class or series of equity securities ranking senior to the Series B Preferred Stock as to dividends or distributions upon liquidation (including securities convertible into or exchangeable for any such senior securities) or amend the Company’s articles of incorporation (whether by merger, consolidation, or otherwise) to materially and adversely change the terms of the Series B Preferred Stock without the affirmative vote of at least two-thirds of the votes entitled to be cast on such matter by holders of outstanding shares of Series B Preferred Stock, voting together as a class. Otherwise, holders of the shares of Series B Preferred Stock do not have any voting rights.

No Conversion Right. The Series B Preferred Stock is not convertible into shares of Common Stock.

On November 1, 2019, the Company launched an offering under Regulation A of Section 3(6) of the Securities Act of 1933, as, amended, for Tier 2 offerings, pursuant to which the Company is offering up to 1,000,000 shares of Series B Preferred Stock at an offering price of $10.00 per share, for a maximum offering amount of $10,000,000. In addition, the Company is offering bonus shares to early investors in this offering, whereby the first 400 investors will receive, in addition to Series B Preferred Stock, 100 shares of Common Stock, regardless of the amount invested, for a total of 40,000 shares of Common Stock.

During the three months ended March 31, 2020, the Company sold an aggregate of 115,235 shares of Series B Preferred Stock for total gross proceeds of $1,152,350. After deducting a placement fee and other expenses, the Company received net proceeds of $1,071,686. During the three months ended March 31, 2020 and 2019, the Company recorded a put option value accretion of $127,368.

As of March 31, 2020, there were 524,957 shares of Series B Preferred Stock issued and outstanding.

Common Stock

The Company is authorized to issue up to 200,000,000 shares of common stock, par value $0.01 per share. As of March 31, 2020, there were 12,342,080 shares of common stock issued and outstanding.

Stock Issued for Service

In February 2019, the Company issued an additional 545,000 shares of Common Stock for services to Metrolina with a fair value of $305,200.

Stock Issued for Cash

During the three months ended March 31, 2020 and 2019, the Company issued 6,000 and 0 shares of Common Stock, respectively, to early investors in the Regulation A offering, valued at $1,620 and $0, respectively.

Stock issued for Acquisition

In January 2019, the Company issued 2,000,000 shares of Common Stock to Gvest Real Estate Capital LLC, which is controlled and owned by Mr. Gee, the Company’s Chief Executive Officer, to acquire the 25% minority interest in Pecan Grove, which were valued at the historical cost value of $537,562.

Equity Incentive Plan

In December 2017, the Board of Directors, with the approval of a majority of the stockholders of the Company, adopted the Manufactured Housing Properties Inc. Stock Compensation Plan (the “Plan”) which is administered by the Compensation Committee. As of March 31, 2020, there were 656,175 shares granted and 343,825 shares remaining available under the Plan.

The Company has issued options to directors and officers under the Plan. One third of the options vest immediately, and two thirds vest in equal annual installments over a two-year period. The Company issued 519,675 shares in December 2017 and 136,500 shares in December 2019. The Company recorded stock option expense of $539 and $8 during the three months ended March 31, 2020 and 2019, respectively.


MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the stock options outstanding as of March 31, 2020:

  Number of options  Weighted average exercise price
(per share)		  Weighted average remaining contractual term
(in years)		 
Outstanding at December 31, 2019  656,175  $0.03   8.7 
Granted  -   -   - 
Exercised  -   -   - 
Forfeited / cancelled / expired  -   -   - 
Outstanding at March 31, 2020  656,175  $0.03   8.4 

The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company’s closing stock price at fiscal year-end and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holder had all options holders exercised their options on March 31, 2020. As of March 31, 2020, there were 519,675 “in-the-money” options with an aggregate intrinsic value of $135,116.

The following table summarizes information concerning options outstanding as of March 31, 2020.

Strike Price Range ($)  Outstanding stock options  Weighted average remaining contractual term
(in years)		  Weighted average outstanding strike price  Vested stock options  Weighted average vested strike price 
$0.01   519,675   8.0  $0.01   519,675  $0.01 
$0.27   136,500   10.0  $0.27   45,500  $0.27 

The table below presents the weighted average expected life in years of options granted under the Plan as described above. The risk-free rate of the stock options is based on the U.S. Treasury yield curve in effect at the time of grant, which corresponds with the expected term of the option granted.

The fair value of stock options was convertedestimated using the Black Scholes option pricing model with the following assumptions for grants made during the periods indicated.

Stock option assumptionsMarch 31,
2020

December 31,
2019

Risk-free interest rate  -0.26%
Expected dividend yield-0.00%
Expected volatility-15.17%
Expected life of options (in years)-10.0

NOTE 7 – RELATED PARTY TRANSACTIONS

On October 1, 2017, the Company issued a revolving promissory note to Raymond M. Gee, the Company’s chairman and chief executive officer, pursuant to which the Company may borrow up to $1,500,000 from Mr. Gee on a revolving basis for working capital purposes. This note has a five-year term with no annual interest and principal payment is deferred until the maturity date. As of March 31, 2020, and December 31, 2019, the outstanding balance on this note was $689,546 and $797,906, respectively. During the three months ended March 31, 2020, and 2019, the Company recorded imputed interest related to the note of $0 and $14,004, respectively.


MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On May 8, 2017, the Company issued a promissory note to Metrolina in the principal amount of $3,000,000. The note is interest only payment based on 8%, and 10% deferred until maturity to be paid with principal balance. The note originally awarded Metrolina 455,000 shares of Common Stock as consideration, which resulted in making Metrolina a related party due to its significant ownership. During the year ended December 31, 2019, the Company paid off the entire balance on the note of $2,754,550 plus interest and amended the agreement to allow for the redeployment of the $3,000,000 available, eliminated the conversion option whereby Metrolina could convert the ratio of total outstanding debt at time of exercise of the option into 10,416,667an amount of newly issued shares of the Company’s restricted Common Stock (see Notes 7determined by dividing the outstanding indebtedness by $3,000,000 multiplied by 10% with a cap of 864,500 shares. The amendment resulted in issuing an additional 545,000 shares with a fair value of $305,200 for a total of 1,000,000 shares awarded to Metrolina. The note gives Metrolina the right and 11).  

option to purchase its pro rata share of debt or equity securities issued to maintain up to 10% equity interest in the Company at the most recent price of any equity transaction for seven years from the amendment dated February 26, 2019. This note matures in May of 2023. As of March 31, 2020, and December 31, 2019, the balance on this note was $816,500 and $1,730,000, respectively. During the three months ended March 31, 2020 and 2019, the Company recorded interest expense related to the note totaling $36,028 and $86,238, respectively. The related party note is guaranteed by Mr. Gee, the Company’s Chief Executive Officer.

In January 2019, the Company issued 2,000,000 shares of Common Stock to Gvest Real Estate Capital LLC, an entity controlled by Mr. Gee, the Company’s Chief Executive Officer, to acquire the 25% minority interest in Pecan Grove, which were valued at the historical cost value of $537,562.

In August, 2019, the Company entered into an office lease agreement with Gvest Real Estate Capital LLC for the lease of its offices. The lease is $4,000 per month and is on a month-to-month term. Total rent expense for the three months ended March 31, 2020 and 2019 was $12,000 and $0, respectively.

During the three months ended March 31, 2020 and 2019, the Company recorded $3,725 and $12,000, respectively, in revenues related to property management consulting services provided to Gvest Real Estate Capital LLC. During the three months ended March 31, 2020, Mr. Gee, the Company’s Chief Executive Officer, received a $50,000 fee for his personal guarantee on a promissory note relating to a loan for one of the Company’s acquisitions.

NOTE 8 – ACQUISITIONS

The Company completed two acquisitions during the three months ended March 31, 2020. These were asset acquisitions from third parties and have been accounted for as asset acquisitions. The acquisition date estimated fair value was determined by third party appraisals.

Acquisition Date Name Land  Improvements  Building  Acquisition Cost  Total Purchase Price 
March 2020 Countryside MHP $777,000  $1,813,000  $1,110,000  $21,642  $3,721,642 
March 2020 Evergreen MHP  431,400   1,006,600   -     151,126   1,589,126 
    $

1,208,400

  $

2,819,600

  $1,110,000  $172,768  $5,310,768 


MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Pro-forma Financial Information

The following unaudited pro-forma information presents the combined results of operations for the three months ended March 31, 20120 and 2019 as if the above acquisitions of manufactured housing communities had been completed on January 1, 2020 and 2019.

  3/31/2020 Consolidated  Acquisitions  Adjustment  3/31/2020
Pro Forma		 
                

Total revenue

 $1,306,137  $167,618  $   $1,473,755 
                 
Total expenses  1,660,302   60,297       1,720,599 
Depreciation and amortization expense  -     -     49,445   49,445 
Interest expense  -     -     40,719   40,719 
Net income (loss) $(354,165) $107,321       (337,008)
                 
Preferred stock dividends and put option value accretion  432,989   -         432,989 
                 

Net Loss attributable to common shareholders

 $(787,154) $107,321      $(769,997)
                 
Weighted average - basic and fully diluted             $(0.06)

  3/31/2019 Consolidated  Acquisitions  Adjustment  3/31/2019
Pro Forma		 
                

Total revenue

 $536,374  $667,503  $    $1,203,877 
                 
Total expenses  1,255,688   329,873       1,585,561 
Depreciation and amortization expense  -     -     341,232   341,232 
Interest expense  -     -     332,506   332,506 
Net income (loss) $(719,314) $337,630       (1,055,422)
                 
Preferred stock dividends and put option value accretion  4,667   -         4,667 
                 

Net Loss attributable to common shareholders

 $(723,981) $337,630      $(1,060,089)
                 
Weighted average - basic and fully diluted             $(0.08)

NOTE 9 – SUBSEQUENT EVENTS

Loan Refinancing

On April 1, 2020, the Company refinanced the loans for Butternut MHP Land LLC (see Note 4) with the existing lender to increase the loan amount to $1,388,019 and to extend the maturity date to April 10, 2025. In addition, the interest rate was changed to 6% per annum, provided that on April 10, 2023 and thereafter, the interest rate shall be equal to (i) the per annum rate of interest identified as the “Prime Rate” as published in the monthly rates section of the Wall Street Journal plus (ii) 1% per annum, adjusted as the first day of each calendar quarter. The loan, as modified, is secured by the real estate assets of Butternut MHP Land LLC and is guaranteed by the Company and Raymond M. Gee, who received a loan guarantee fee of $70,000.

PPP Loan

On May 1, 2020, the Company received $139,300 from the Federal Payroll Protection Program loan.

17

12

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

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

Use of Terms

Except as otherwise indicated by the context and for the purposes of this report only, references in this report to “we,” “our” and the “Company” refer to Manufactured Housing Properties Inc., a Nevada corporation, and its consolidated subsidiaries.

Special Note Regarding Forward Looking Statements

In addition to historical information, this report contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that include information relating to future events, future financial performance, strategies, expectations, competitive environment, regulation and availability of resources. These forward-looking statements include, without limitation: statements concerning projections, predictions, expectations, estimates or forecasts for our business, financial and operating results and future economic performance; statements of management’s goals and objectives; trends affecting our financial condition, and results of operations or future prospects; statements regarding our financing plans or growth strategies; statements concerning litigation or other matters; and other similar expressions concerning matters that are not historical facts. Words such as “may,” “will,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes” and “estimates,” and similar expressions, as well as statements in future tense, identify forward-looking statements.

Forward-looking statements should not be read in conjunctionas a guarantee of future performance or results and will not necessarily be accurate indications of the times, or by which, that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management’s good faith beliefs as of that time with respect to future events and is qualified in its entirety by, the consolidated financial statements and notes thereto included in Item 1 in this Quarterly Report on Form 10-Q. This item contains forward-looking statements that involveare subject to risks and uncertainties. Actualuncertainties that could cause actual performance or results mayto differ materially from those indicatedexpressed in suchor suggested by the forward-looking statements.

Overview

The Company has historically operated in

Potential investors should not place undue reliance on any forward-looking statements. Except as expressly required by the Exploration & Production (“E&P”) business butfederal securities laws, there is currentlyno undertaking to publicly update or revise any forward-looking statements, whether as a transformation intoresult of new information, future events, changed circumstances or any other reason. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. Potential investors should not make an investment decision based solely on our projections, estimates or expectations.

Overview

We are a self-administered, self-managed, vertically integrated owner and operator of self-storage facilities.  Inmanufactured housing communities. Manufactured housing communities are residential developments designed and improved for the E&P business, our two “legacy” subsidiaries, CYMRI, LLCplacement of detached, single-family manufactured homes that are produced off-site and Triumph Energy, Inc., held ownership interests ininstalled and set on residential sites within the community. The owner of a generally static groupmanufactured home leases the site on which it is located and the lessee of oila manufactured home leases both the home and gas properties in Texassite on which the home is located. We earn income from leasing manufactured home sites to tenants who own their own manufactured home and Louisiana through May 2015.  As indicated in Note 2, we entered into two separate transactionsthe rental of company-owned manufactured homes to residents of the communities.

We originally incorporated in the first halfState of 2015 which resultedNevada as Frontier Staffing, Inc. on September 3, 2003. Since our incorporation, we have experienced several name changes and have been engaged in the divestment ofseveral different business endeavors. On October 12, 2017, Mobile Home Rental Holdings LLC, a substantial portion of our oil and gas properties (all of which were in Texas) and the payment of nearly all of our property related debt.  For the foreseeable future, we expect to continue to maintain ownership of our remaining oil and gas properties (most of which are in Louisiana) while seeking new opportunities in the self-storage business.


On March 17, 2014, we completed the acquisition of Cinco NRG, LLC (“Cinco”), a private oil and gasNorth Carolina limited liability company, which engaged in acquiring and operating manufactured housing properties, merged with and into the Company. In connection with the merger, the name of the Company was under common control by our majority shareholder.  We acquired Cinco throughchanged to Manufactured Housing Properties Inc., the issuanceformer business and management of Mobile Home Rental Holdings LLC became the business and management, respectively of the Company.

As of March 31, 2020, we own and operate ten manufactured housing communities containing approximately 726 developed sites, and a total of 4,694,254 shares of our Common Stock.  At261 company-owned manufactured homes, including:

●Pecan Grove – a 81 lot, all-age community situated on 10.71 acres and located in Charlotte, North Carolina.

●Butternut– a 59 lot, all-age community situated on 13.13 acres and located in Corryton, Tennessee, a suburb of Knoxville, Tennessee.


●Azalea Hills – a 41 lot, all-age community situated on 7.46 acres and located in Gastonia, North Carolina, a suburb of Charlotte, North Carolina.

●Holly Faye – a 37 lot all-age community situated on 8.01 acres and located in Gastonia, North Carolina, a suburb of Charlotte North Carolina.

●Lakeview– a 97 lot all-age community situated on 17.26 acres in Spartanburg, South Carolina.

●Chatham Pines – a 49 lot all-age community situated on 23.57 acres and located in Chapel Hill, North Carolina.

●Maple Hills – a 73 lot all-age community situated on 21.20 acres and located in Mills River, North Carolina, which is part of the Asheville, North Carolina, Metropolitan Statistical Area.

●Hunt Club Forest – a 79 lot all-age community situated on 13.02 acres and located in the Columbia, South Carolina metro area.

●B&D– a 97 lot all-age community situated on 17.75 acres and located in Chester, South Carolina.

●Crestview– a 113 lot all-age community situated on 17.1 acres and located in the Ashville, NC MSA, North Carolina, Metropolitan Statistical Area.

●Spring Lake – a 225 lot all-age community situated on 72.7 acres and located in Warner Robins, Georgia.

●ARC – a 182 lot all-age community situated on 39.34 acres and located in Lexington, South Carolina.

●Countryside – a 110 lot all-age community situated on 35 acres and located in Lancaster, North Carolina.

●Evergreen – a 65 lot all-age community situated on 28.4 acres and located in Dandridge, Tennessee.

We believe that manufactured housing is accepted by the timepublic as a viable and economically attractive alternative to common stick-built single-family housing. We believe that the affordability of the acquisition, Cinco hadmodern manufactured home makes it a small working interestvery attractive housing alternative. Manufactured housing is one of the only non-subsidized affordable housing options in the U.S. Demand for housing affordability continues to increase, but supply remains static, as there are virtually no new manufactured housing communities being developed. We are committed to becoming an industry leader in providing this affordable housing option and an improved level of service to our residents, while producing an attractive and stable risk adjusted return to our investors.

Recent Developments

Impact of Coronavirus Pandemic

In December 2019, a producing fieldnovel strain of coronavirus was reported to have surfaced in TexasWuhan, China. The virus has since spread to over 150 countries and every state in the United States. On March 11, 2020, the World Health Organization declared the outbreak a pandemic, and on March 13, 2020, the United States declared a national emergency.

Most states and cities, including where our properties are located, have reacted by instituting quarantines, restrictions on travel, “stay at home” rules and restrictions on the types of businesses that may continue to operate, as well as working interestsguidance in several exploratory prospectsresponse to the pandemic and the need to contain it.

We are carefully reviewing all rules, regulations, and orders and responding accordingly. We have taken steps to take care of our employees, including providing the ability for employees to work remotely and implementing strategies to support appropriate social distancing techniques for those employees who are not able to work remotely. We have also taken precautions with regard to employee, facility and office hygiene as well as implementing significant travel restrictions. We are also assessing our business continuity plans for all business units in Alabama.  Under the accountingcontext of the pandemic. This is a rapidly evolving situation, and we will continue to monitor and mitigate developments affecting our workforce, our tenants, and the public at large to the extent we are able to do so.


The rules and restrictions put in place have had a negative impact on the economy and business activity and may adversely impact the ability of our tenants, many of whom may be restricted in their ability to work, to pay their rent as and when due.  In addition, our property managers may be limited in their ability to properly maintain our properties.  Enforcing our rights as landlord against tenants who fail to pay rent or otherwise do not comply with the terms of their leases may not be possible as many jurisdictions, including those where are properties are located, have established rules and/or regulations preventing us from evicting tenants for entities under common control,certain periods in response to the pandemic. If we have reflected Cinco’sare unable to enforce our rights as landlords, our business would be materially affected. 

If the current pace of the pandemic cannot be slowed and the spread of the virus is not contained, our business operations could be further delayed or interrupted. We expect that government and health authorities may announce new or extend existing restrictions, which could require us to make further adjustments to our operations in order to comply with any such restrictions. The duration of any business disruption cannot be reasonably estimated at this time but may materially affect our ability to operate our business and result in additional costs.

The extent to which the pandemic may impact our results will depend on future developments, which are highly uncertain and cannot be predicted as of the date of this Form 10-Q, including new information that may emerge concerning the severity of the pandemic and steps taken to contain the pandemic or treat its impact, among others. Nevertheless, the pandemic and the current financial, economic and capital markets environment present material uncertainty and risk with respect to our performance, financial condition, results of operations and cash flows.

Loan Refinancing

On April 1, 2020, the Company refinanced the loans for Butternut MHP Land LLC described below with the existing lender to increase the loan amount to $1,388,019 and to extend the maturity date to April 10, 2025. In addition, the interest rate was changed to 6% per annum, provided that on April 10, 2023 and thereafter, the interest rate shall be equal to (i) the per annum rate of interest identified as the “Prime Rate” as published in the monthly rates section of the Wall Street Journal plus (ii) 1% per annum, adjusted as the first day of each calendar quarter. The loan, as modified, is secured by the real estate assets of Butternut MHP Land LLC and is guaranteed by the Company and Raymond M. Gee, who received a retroactive basis in our consolidated financial statementsloan guarantee fee of $70,000.

PPP Loan

On May 1, 2020, the Company received $139,300 from the inception of Cinco in April 2013.

Federal Payroll Protection Program loan.

Results of Operations


Comparison of Three Months Ended March 31, 2020 and 2019

The following discussion reflectstable sets forth key components of our results of operations during the revenues and expenses for the three month and six month periods ended June 30, 2015 and 2014, as reported in our consolidated financial statements and notes thereto included in Item 1.


Three months ended June 30, 2015 versus three months ended June 30, 2014 — TotalMarch 31, 2020 and 2019, both in dollars and as a percentage of our revenues.

  Three months Ended
March 31, 2020		  Three months Ended
March 31, 2019		 
  Amount  Percent of Revenues  Amount  Percent of Revenues 
Revenue            
Rental and related income $1,302,412   99.71% $524,374   97.76%
Management fees, related party  3,725   0.29%  12,000   2.24%
Total revenues  1,306,137   100.00%  536,374   100.00%
Community operating expenses                
Repair and maintenance  66,570   5.10%  43,290   8.07%
Real estate taxes  59,190   4.53%  23,561   4.39%
Utilities  141,461   10.83%  31,593   5.89%
Insurance  41,901   3.21%  6,271   1.17%
General and administrative expense  205,570   15.74%  95,106   17.73%
Total community operating expenses  514,692   39.41%  199,821   37.25%
Corporate payroll and overhead  317,443   24.30%  135,963   25.35%
Depreciation and amortization expense  389,993   29.86%  134,926   25.16%
Interest expense  438,174   33.55%  232,706   43.39%
Refinancing costs  -   -   552,272   102.96%
Total expenses  1,660,302   127.11%  1,255,688   234.11%
Net loss $(354,165)  (27.11%) $(719,314)  (134.11%)
Preferred stock dividends and put option value accretion  (432,989)  (33.15%)  (4,667)  (0.87%)
Net loss attributable to common stockholders $(787,154)  (60.26%) $(723,981)  (134.98%)


Revenues. For the three months ended March 31, 2020, we had total revenues not including interest income,of $1,306,137, as compared to $536,374 for the three months ended June 30, 2015 were $110,000March 31, 2019, an increase of $769,763, or 143.5%. The increase in revenues between the periods was primarily due to $706,839 of rental income from the acquisition of six manufactured housing communities during the quarters subsequent to March 31, 2019. Excluding the six acquisitions, our revenues increased by $62,924 due to rent increases and increase in occupancy.

Community Operating Expenses. For the three months ended March 31, 2020, we had total community operating expenses of $514,692, as compared to $645,000$199,821 for the three months ended June 30, 2014. 


OilMarch 31, 2019, an increase of $314,871, or 157.6%. The increase in community operating expenses was primarily due to expenses related to the acquisition of six manufactured housing communities subsequent to March 31, 2019 totaling $276,151. Excluding the six acquisitions, our community operating expenses increased slightly due to additional repair and gas revenuesmaintenance costs.

Corporate Payroll and Overhead Expenses. For the three months ended March 31, 2020, we had corporate payroll and overhead expenses of $317,443, as compared to $135,963 for the three months ended June 30, 2015 were $110,000March 31, 2019, an increase of $181,480. Such increase was primarily due to additional audit fees due to our acquisition audits, and additional corporate personnel to support our growth.

Depreciation and Amortization Expense. For the three months ended March 31, 2020, we had depreciation and amortization expense of $389,993, as compared to $645,000$134,926 for the three months ended June 30, 2014.  InMarch 31, 2019, an increase of $255,067, or 189.0%. The increase was primarily due to the acquisition of six manufactured housing communities subsequent to March 31, 2019.

Interest Expense. For the three months ended June 30, 2015, revenues from oil production were $92,000, reflecting net volumesMarch 31, 2020, we had interest expense of 1,857 barrels at an average price of $49.54 per barrel, while gas revenues were $18,000, reflecting net volumes of 9,112 Mcf at an average price of $1.98 per Mcf.  On an overall basis, these amounts reflect a decrease in production volumes of approximately 61%, due$438,174, as compared to the sale of our producing oil and gas properties in Texas, compounded by a dramatic decrease in average oil and gas prices of approximately 56%.


Lease operating expenses (“LOE”), including production taxes, were $174,000$232,706 for the three months ended June 30, 2015 versus $381,000March 31, 2019, an increase of $205,468. The increase was primarily comprised of $220,658 related to new debt associated with our acquisition of six manufactured housing communities subsequent to March 31, 2019. This was partially offset from the decrease of interest resulting from the refinancing of five of our manufactured housing communities during the first quarter of 2019.

Net Loss. The factors described above resulted in a net loss of $354,165 for the three months ended June 30, 2014.  This decrease was largely dueMarch 31, 2020, as compared to lower production volumes.


Depreciation, depletion and amortization expense$719,314 for the three months ended June 30, 2015March 31, 2019, a decrease of $365,149, or 50.76%.

Liquidity and Capital Resources

As of March 31, 2020, we had cash and cash equivalents of $2,748,681. In addition to cash generated through operations, we use a variety of sources to fund our cash needs, including acquisitions. We intend to continue to increase our real estate investments. Our business plan includes acquiring communities that yield in excess of our cost of funds and then investing in physical improvements, including adding rental homes onto otherwise vacant sites. Our ability to continue acquiring communities are dependent on our ability to raise capital. There is no guarantee that any of these additional opportunities will materialize or that we will be able to take advantage of such opportunities. The growth of our real estate portfolio depends on the availability of suitable properties which meet our investment criteria and appropriate financing.

We will require additional funding to finance the growth of our current and expected future operations as well as to achieve its strategic objectives. We believe that our current available cash along with anticipated revenues will be sufficient to meet our cash needs for the near future. There can be no assurance that financing will be available in amounts or terms acceptable to us, if at all.

Summary of Cash Flow

The following table provides detailed information about our net cash flow for the period indicated:

Cash Flow

  Three months Ended
March 31,		 
  2020  2019 
Net cash provided by (used in) operating activities $

98,813

  $(579,939)
Net cash used in investing activities  

(1,059,747

)  (33,514)
Net cash provided by (used in) financing activities  

(436,796

)  1,036,501 
Net increase (decrease) in cash and cash equivalents  (1,397,730)  423,048 
Cash and cash equivalents at beginning of period  4,146,411   458,271 
Cash and cash equivalent at end of period $2,748,681  $881,319 


Net cash provided by operating activities was $51,000 versus $103,000$98,813 for the three months ended June 30, 2014.  This decrease was mostly due to lower production volumes.


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Impairment expense for the three months ended June 30, 2015 was $397,000 versus zero for the three months ended June 30, 2014.  This increase was due to the full cost ceiling test adjustment recorded in the three months ended June 30, 2015 (see Note 5).
Accretion expense on asset abandonment obligations for the three months ended June 30, 2015 was $2,000 versus $10,000 for the three months ended June 30, 2014. This decrease was due to the sale of our producing oil and gas properties in Texas.

Workover expenses for the three months ended June 30, 2015 were zero versus $389,000 for the three months ended June 30, 2014.  This decrease was due to the unexpectedly high workover costs of CYMRI’s largest water injection well in the second quarter of 2014.

Selling, general and administrative (“SG&A”) expenses for the three months ended June 30, 2015 were $380,000March 31, 2020, as compared to $371,000 for the three months ended June 30, 2014.  This increase was not considered to be significant.

Gain from creditor settlements for the three months ended June 30, 2015 were $524,000 compared to zero for the three months ended June 30, 2014.  This increase was due to the settlements reached with various creditors of our subsidiary, CYMRI, LLC, in June 2015 (see Note 6).

Interest expense for the three months ended June 30, 2015 was $100,000 versus $22,000 for the three months ended June 30, 2014.  This increase was due to interest expense and prepayment penalties on bridge loans in the current period.

Income taxes were a benefit of $170,000 for the three months ended June 30, 2015 compared to $140,000 for the three months ended June 30, 2014.  These benefit amounts reflected consolidated income tax rates of approximately 36% (due to current tax refund) and 22%, respectively.

Six months ended June 30, 2015 versus six months ended June 30, 2014 — Total revenues, not including interest income, for the six months ended June 30, 2015 were $273,000 compared to $1,149,000 for the six months ended June 30, 2014. 

Oil and gas revenues for the six months ended June 30, 2015 were $273,000 compared to $1,149,000 for the six months ended June 30, 2014.  In the six months ended June 30, 2015, revenues from oil production were $226,000, reflecting volumes of 5,491 barrels at an average price of $41.15 per barrel, while gas revenues were $47,000, reflecting volumes of 20,799 Mcf at an average price of $2.25 per Mcf.  On an overall basis, these amounts reflect a decrease in production volumes of approximately 43%, due to the sale of our producing oil and gas properties in Texas, compounded by a dramatic decrease in average oil and gas prices of approximately 58%.

Lease operating expenses (“LOE”), including production taxes, were $432,000 for the six months ended June 30, 2015 versus $755,000 for the six months ended June 30, 2014.  This decrease was largely due to lower production volumes.

Depreciation, depletion and amortization expense for the six months ended June 30, 2015 was $148,000 versus $178,000 for the six months ended June 30, 2014.  This decrease was mostly due to lower production volumes.

Impairment expense for the six months ended June 30, 2015 was $1,395,000 versus zero for the six months ended June 30, 2014.  This increase was due to the full cost ceiling test adjustment recorded in the six months ended June 30, 2015 (see Note 5).

Accretion expense on asset abandonment obligations for the six months ended June 30, 2015 was $13,000 versus $20,000 for the six months ended June 30, 2014.  This decrease was due to the sale of our producing oil and gas properties in Texas.

Workover expenses for the six months ended June 30, 2015 were $68,000 versus $771,000 for the six months ended June 30, 2014.  This decrease was due to the major workover of CYMRI’s largest producing oil and gas well in the first quarter of 2014 as well as the unexpectedly high workover costs of CYMRI’s largest water injection well in the second quarter of 2014.
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Selling, general and administrative (“SG&A”) expenses for the six months ended June 30, 2015 were $781,000 compared to $764,000 for the six months ended June 30, 2014.  This increase was not considered to be significant.

Gain from creditor settlements for the six months ended June 30, 2015 were $524,000 compared to zero for the six months ended June 30, 2014.  This increase was due to the settlements reached with various creditors of our subsidiary, CYMRI, LLC, in June 2015 (see Note 6).

Interest expense for the six months ended June 30, 2015 was $168,000 versus $43,000 for the six months ended June 30, 2014.  This increase was due to interest expense and prepayment penalties on bridge loans in the current period.

Income taxes were a benefit of $710,000 for the six months ended June 30, 2015 compared to $344,000 for the six months ended June 30, 2014.  These benefit amounts reflected consolidated income tax rates of approximately 32% (due to current tax refund) and 25%, respectively.
Liquidity and Capital Resources
Operating activities.  Net$579,939 net cash used in operating activities for the sixthree months ended June 30, 2015 was $937,000 compared to $256,000 forMarch 31, 2019. For the sixthree months ended June 30, 2014.  This difference was primarilyMarch 31, 2020, the net loss of $354,165, offset by depreciation and amortization in the amount of $389,993, an increase in accounts payable in the amount of $44,321, an increase in other assets in the amount of $33,907 due to lender’s escrowed funds that was released back to us upon the relative changescompletion of certain capital improvement projects, and a decrease in current assets and current liabilities.accrued expenses in the amount of $
31,306Investing activities.  Net, were the primary drivers of the net cash provided by operating activities. For the three months ended March 31, 2019, the net loss of $719,314, a decrease in accrued expenses in the amount of $235,684, and a decrease in other assets in the amount of $154,177, offset by stock based compensation expense in the amount of $329,700, depreciation and amortization in the amount of $134,927, and write off mortgage cost in the amount of $68,195, were the primary drivers of the net cash used in operating activities.

Net cash used in investing activities was $1,880,000 $1,059,747for the sixthree months ended June 30, 2015March 31, 2020, as compared to $33,514 for the three months ended March 31, 2019. Net cash used in investing activities for the three months ended March 31, 2020 consisted of the purchase of two manufactured housing communities in the amount of$5,310,768, out of which $4,150,000 was financed with notes payable,and capital improvements in the amount of $71,747, while net cash used in investing activities of $164,000 for the sixthree months ended June 30, 2014.  This increase was largely due to the proceeds from the divestmentMarch 31, 2019 consisted of a substantial portion of our oil and gas properties in two separate transactions in the first half of 2015 (see Note 2).capital improvements. 


Financing activities.Net cash used in financing activities was $629,000 $436,796for the sixthree months ended June 30, 2015March 31, 2020, as compared to $1,036,501 net cash provided by financing activities of $139,000 for the sixthree months ended June 30, 2014.  This relative difference was chiefly dueMarch 31, 2019. For the three months ended March 31, 2020, net cash used in financing activities consisted of repayment of related party notes payable of $913,500, fees in connection with preferred stock issuance of $80,664, preferred share dividends of $187,496, repayment of notes payable $126,358, payment of mortgage costs recorded as debt discount of $172,768, and repayment of related party note of $108,360, offset by proceeds from issuance of preferred stock of $1,152,350, while net cash provided by financing activities for the three months ended March 31, 2019 consisted of proceeds from notes payable of $8,241,000, proceeds from issuance of preferred stock of $600,000 and proceeds from related party note of $7,076, offset by repayment of notes payable of $4,942,319, repayments of related party notes payable of $2,754,550, fees in connection with preferred stock issuance of $110,039 and preferred share dividends of $4,667.

Regulation A Offering

On November 1, 2019, we launched an offering under Regulation A of Section 3(6) of the Securities Act for Tier 2 offerings, pursuant to current periodwhich we are offering up to 1,000,000 shares of Series B Preferred Stock at an offering price of $10.00 per share, for a maximum offering amount of $10,000,000. In addition, we are offering bonus shares to early investors in this offering, whereby the first 400 investors will receive, in addition to Series B Preferred Stock, 100 shares of Common Stock, regardless of the amount invested, for a total of 40,000 shares of Common Stock.

As of March 31, 2020, we sold an aggregate of 524,957 shares of Series B Preferred Stock for total gross proceeds of $5,249,570. After deducting a placement fee and other expenses, we received net debt repayments.


Going Concern

The accompanying consolidated financial statements have been prepared onproceeds of approximately $4,882,100. We also issued a going concern basis, which contemplates the realizationtotal of assets and satisfaction21,400 shares of liabilitiesCommon Stock to early investors in the normal coursethis offering with a fair value of business. $5,778.

Secured Promissory Notes

The Company has reported net lossesissued promissory notes payable to lenders related to the acquisition of its manufactured housing communities. These promissory notes range from operations3.3% to 7.0% with 5 to 30 years principal amortization. Two of the promissory notes had an initial 6 months period on interest only payments. The promissory notes are secured by the real estate assets and $7,471,738 for four assets were guaranteed by Raymond M. Gee, the Company’s chairman, chief executive officer and owner of the principal stockholder of the Company. 

During the three months ended March 31, 2019, the Company refinanced a total of $4,940,750 from current loans payable to $8,241,000 of new notes payable from five of the communities, resulting in an additional loan payable of $3,320,859. The Company used the additional loans payable proceeds from the refinance to retire the related party note payable described below. During the three months ended March 31, 2019, the Company wrote off mortgage costs of $68,195 and capitalized $110,039 of mortgage costs due to the refinancing.

As of March 31, 2020, the Company recorded $222,768 of mortgage cost related to the two acquisitions.


The following are terms of these notes:

  Maturity Date Interest Rate  Balance 03/31/20  Balance 12/31/19 
Butternut MHP Land LLC 03/30/20  6.500% $1,111,166  $1,114,819 
Butternut MHP Land LLC Mezz 04/01/27  7.000%  278,834   280,013 
Pecan Grove MHP LLC 02/22/29  5.250%  3,086,021   3,095,274 
Azalea MHP LLC 03/01/29  5.400%  824,965   835,445 
Holly Faye MHP LLC 03/01/29  5.400%  579,825   574,096 
Chatham MHP LLC 04/01/24  5.875%  1,760,497   1,771,506 
Lake View MHP LLC 03/01/29  5.400%  1,851,006   1,857,266 
B&D MHP LLC 04/25/29  5.500%  1,845,717   1,854,788 
Hunt Club MHP LLC 05/01/24  5.750%  1,438,294   1,447,364 
Crestview MHP LLC 07/31/24  5.500%  4,146,819   4,173,652 
Maple MHP LLC 01/01/23  5.125%  2,668,253   2,688,653 
Springlake MHP LLC 11/14/22  3.310%  4,000,000   4,000,000 
ARC MHP LLC 01/01/30  5.500%  5,275,121   5,300,000 
Countryside MHP LLC 03/20/50  5.500%  3,000,000   -   
Evergreen MHP LLC 04/01/32  3.990%  1,150,000   -   
Totals note payables        33,016,518   28,992,876 
Discount Direct Lender Fees        (821,772)  (633,629)
Total net of Discount       $32,194,746  $28,359,247 

Metrolina Promissory Note

On May 8, 2017, the Company issued a promissory note to Metrolina Loan Holdings, LLC (“Metrolina”) in the last two yearsprincipal amount of $3,000,000. The note is interest only payment based on 8%, and presently has10% deferred until maturity to be paid with principal balance. The note originally awarded Metrolina 455,000 shares of Common Stock as consideration, which resulted in making Metrolina a working capital deficitrelated party due to its significant ownership. During the year ended December 31, 2019, the Company paid off the entire balance on the note of $2,754,550 plus interest and amended the agreement to allow for the redeployment of the $3,000,000 available, eliminated the conversion option whereby Metrolina could convert the ratio of total outstanding debt at time of exercise of the option into an amount of newly issued shares of the Company’s Common Stock determined by dividing the outstanding indebtedness by $3,000,000 multiplied by 10% with a cap of 864,500 shares. The amendment resulted in issuing an additional 545,000 shares with a fair value of $305,200 for a total of 1,000,000 shares awarded to Metrolina. The note gives Metrolina the right and option to purchase its pro rata share of debt or equity securities issued to maintain up to 10% equity interest in the amountCompany at the most recent price of $605,000.  These factors, among others, indicate thatany equity transaction for seven years from the amendment dated February 26, 2019. This note matures in May of 2023. As of March 31, 2020, and December 31, 2019, the balance on this note was $816,500 and $1,730,000, respectively. During the three months ended March 31, 2020 and 2019, the Company recorded interest expense related to the note totaling $36,028 and $86,238, respectively. The related party note is guaranteed by Mr. Gee.

Revolving Promissory Note

On October 1, 2017, the Company issued a revolving promissory note to Raymond M. Gee, our chairman and chief executive officer, pursuant to which the Company may be unableborrow up to continue as$1,500,000 from Mr. Gee on a going concernrevolving basis for working capital purposes. This note has a reasonable periodfive-year term with no annual interest and principal payment is deferred until the maturity date. As of time.  The consolidated financial statements do not contain any adjustments to reflectMarch 31, 2020, and December 31, 2019, the possible future effectsoutstanding balance on this note was $689,546 and $797,906, respectively. During the classification of assets or the amountsthree months ended March 31, 2020, and classification of liabilities that may result should2019, the Company be unablerecorded imputed interest related to continue as a going concern.


the note of $0 and $14,004, respectively.

Off-Balance Sheet Arrangements

As of March 31, 2020, we had no off-balance sheet arrangements.

Critical Accounting Policies and Estimates


Our

The discussion and analysis of our financial condition and results of operations are based onupon our consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles in the United States.(“GAAP”). The preparation of these consolidated financial statements requires usmanagement to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses.  We believe that certainexpenses, and related disclosure of contingent assets and liabilities at the date of our consolidated financial statements. Actual results may differ from these estimates under different assumptions or conditions.


Significant accounting policies affectare defined as those that involve significant judgment and potentially could result in materially different results under different assumptions and conditions. Management believes the following critical accounting policies are affected by our more significant judgments and estimates used in the preparation of our consolidated financial statements.  See our Annual Report

Revenue Recognition. Our revenues primarily consist of rental revenues and fee and other income. We have the following revenue sources and revenue recognition policies:

·Rental revenues include revenues from the leasing land lot or a combination of both, the mobile home and land at our properties to tenants.
oRevenues from the leasing of land lot or a combination of both, the mobile home and land at our properties to tenants include (i) lease components, including land lot or a combination of both, the mobile home and land, and (ii) reimbursement of utilities and account for the components as a single lease component in accordance with Accounting Standards Codification (“ASC”) 842.
oRevenues derived from fixed lease payments are recognized on a straight-line basis over the non-cancelable period of the lease. We commence rental revenue recognition when the underlying asset is available for use by the lessee. Revenue derived from the reimbursement of utilities are generally recognized in the same period as the related expenses are incurred. Our leases are month-to-month.
·Fee and other income include late fees, violation fees and other revenue arising from contractual agreements with third parties. This revenue is recognized as the services are transferred in accordance with ASC 606.
·Mobile home sale revenues are recognized in accordance with Topic 606 of the Financial Accounting Standards Board (“FASB”) ASC for revenue recognition. On January 1, 2018, we adopted Accounting Standards Update (“ASU”) 2014-09, which is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. We consider revenue realized or realizable and earned when all the five following criteria are met: (1) identification of the contract with a customer, (2) identification of the performance obligations in the contract, (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligations in the contract, and (5) recognition of revenue when (or as) we satisfy a performance obligation.

Under ASC 842, we must assess on Form 10-Kan individual lease basis whether it is probable that we will collect the future lease payments. We consider the tenant’s payment history and current credit status when assessing collectability. When collectability is not deemed probable, we write-off the tenant’s receivables, including straight-line rent receivable, and limit lease income to cash received.

Investment Property and Equipment and Depreciation. Property and equipment are carried at cost. Depreciation for Sites and Building is computed principally on the straight-line method over the estimated useful lives of the assets (ranging from 15 to 25 years). Depreciation of Improvements to Sites and Buildings, Rental Homes and Equipment and Vehicles is computed principally on the straight-line method over the estimated useful lives of the assets (ranging from 3 to 25 years). Land Development Costs are not depreciated until they are put in use, at which time they are capitalized as Sites and Land Improvements. Interest Expense pertaining to Land Development Costs are capitalized. Maintenance and Repairs are charged to expense as incurred and improvements are capitalized. The costs and related accumulated depreciation of property sold or otherwise disposed of are removed from the financial statement and any gain or loss is reflected in the current year’s results of operations.

Impairment Policy. The Company applies FASB ASC 360-10, “Property, Plant & Equipment,” to measure impairment in real estate investments. Rental properties are individually evaluated for impairment when conditions exist which may indicate that it is probable that the sum of expected future cash flows (on an undiscounted basis without interest) from a rental property is less than the carrying value under its historical net cost basis. These expected future cash flows consider factors such as future operating income, trends and prospects as well as the effects of leasing demand, competition and other factors. Upon determination that a permanent impairment has occurred, rental properties are reduced to their fair value. For properties to be disposed of, an impairment loss is recognized when the fair value of the property, less the estimated cost to sell, is less than the carrying amount of the property measured at the time there is a commitment to sell the property and/or it is actively being marketed for sale. A property to be disposed of is reported at the lower of its carrying amount or its estimated fair value, less its cost to sell. Subsequent to the date that a property is held for disposition, depreciation expense is not recorded. There was no impairment during the three months ended March 31, 2020 and 2019.


Stock-Based Compensation. All stock based payments to employees, nonemployee consultants, and to nonemployee directors for their services as directors, including any grants of restricted stock and stock options, are measured at fair value on the grant date and recognized in the statements of operations as compensation or other expense over the relevant service period in accordance with FASB ASC Topic 718. Stock based payments to nonemployees are recognized as an expense over the period of performance. Such payments are measured at fair value at the earlier of the date a performance commitment is reached or the date performance is completed. In addition, for awards that vest immediately and are nonforfeitable the measurement date is the date the award is issued. The Company recorded stock option expense of $539 and $8 during the three months ended March 31, 2020 and 2019, respectively.

Fair Value of Financial Instruments. The Company follows paragraph 825-10-50-10 of the FASB ASC for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB ASC to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

Reclassifications.Certain amounts in the prior period presentation have been reclassified to conform with the current presentation.

Income Taxes. We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, we determine deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year endedin which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

We recognize deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

We record uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

We recognize and interest and penalties, if any, with income tax expense in the accompanying consolidated statement of operations. As of March 31, 2020, and December 31, 20142019, there were no such accrued interest or penalties.

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires that entities use a new forward looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 is effective for annual reporting periods, including interim reporting periods within those periods, beginning after December 15, 2019. The Company adopted this standard on January 1, 2020. The adopted of this standard had no impact on the unaudited condensed consolidated financial statements.

In March 2019, the FASB issued ASU No. 2019-01, “Leases (Topic 842): Codification Improvements.” ASU 2019-01 aligns the guidance for fair value of the underlying asset by lessors with existing guidance in Topic 842. The ASU requires that the fair value of the underlying asset at lease commencement is its cost reflecting in volume or trade discounts that may apply. However, if there has been a further descriptionsignificant lapse of our criticaltime between the date the asset was acquired and the lease commencement date, the definition of fair value as outlined in Topic 820 should be applied. In addition, the ASU exempts both lessees and lessors from having to provide certain interim disclosures in the fiscal year in which a company adopts the new leases standard. The update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is still evaluating the impact of this ASU on the Company’s consolidated financial statements.

Management does not believe that any other recently issued, but not yet effective accounting policies and estimates.


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pronouncements, if adopted, would have a material effect on the accompanying condensed consolidated financial statements.

ITEM 3.             QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.


Information for this Item is not required as the Registrant is a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act.
ITEM 4.             CONTROLS AND PROCEDURES

(a)
ITEM 4.CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Disclosure controls and procedures


refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rule 13a-15(e) of June 30, 2015,the Exchange Act, our Chief Executive Officermanagement has carried out an evaluation, with the participation and Chief Financial Officer evaluatedunder the supervision of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our internal controls over financial reporting which encompasses our disclosure controls and procedures.  Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures, as of the endMarch 31, 2020. Based upon, and as of the period covered bydate of this Quarterly Report were not effectiveevaluation, our chief executive officer and chief financial officer determined that, because of a lack of segregation of duties, asthe material weaknesses described in Item 9A. (b)9A “Controls and Procedures” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2014,2019 and further referenced below, which we vieware still in the process of remediating as an integral part of March 31, 2020, our disclosure controls and procedures.


The lackprocedures were not effective.

Changes in Internal Control Over Financial Reporting

We regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.

During its evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2020, our management identified the following material weaknesses:

●We lack proper segregation of duties due to the limited number of employees within the accounting department.

●We lack effective closing procedures.

To mitigate the current limited resources and limited employees, we rely heavily on direct management oversight of transactions, along with the use of legal and accounting professionals. As we grow, we expect to increase our number of employees, which will enable us to implement adequate segregation of duties referencedwithin the internal control framework.

Our management has identified the steps necessary to address the material weaknesses, and implemented the following remedial procedures:

●We have implemented dual signatures and approvals on all payments.

●We have added and plan to continue to add additional employees to assist in the financial closing procedures.

●As necessary, we will continue to engage consultants or outside accounting firms in order to ensure proper accounting for our consolidated financial statements.

We intend to complete the remediation of the material weaknesses discussed above representsas soon as practicable but we can give no assurance that we will be able to do so. Designing and implementing an effective disclosure controls and procedures is a material weaknesscontinuous effort that requires us to anticipate and react to changes in our internalbusiness and the economic and regulatory environments and to devote significant resources to maintain a financial reporting system that adequately satisfies our reporting obligations. The remedial measures that we have taken and intend to take may not fully address the material weaknesses that we have identified, and material weaknesses in our disclosure controls over financial reporting.  Notwithstanding this weakness, management believes thatand procedures may be identified in the consolidated financial statements includedfuture. Should we discover such conditions, we intend to remediate them as soon as practicable. We are committed to taking appropriate steps for remediation, as needed.

Other than in this report fairly present, in all material respects, our consolidated financial position and resultsconnection with the implementation of operations as of and for the quarter ended June 30, 2015.


(b) Changes in internal controls over financial reporting

There wasremedial measures described above, there were no changechanges in our internal controls over financial reporting that occurred during the first quarter ended June 30, 2015,of fiscal 2020 that hashave materially affected, or isare reasonably likely to materially affect, our internal controlscontrol over financial reporting.


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PART II.           II

OTHER INFORMATION



ITEM 1.             LEGAL PROCEEDINGS
See Note 12
ITEM 1.LEGAL PROCEEDINGS.

From time to Consolidated Financial Statements.


time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these, or other matters, may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

ITEM 1A. RISK FACTORS

Information for this Item is not required as the Registrant is a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act.

FACTORS.

Not applicable.

ITEM 2.             UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

We have not sold any equity securities during the three months ended March 31, 2020 that were not previously disclosed in a current report on Form 8-K that was filed during the quarter.

During the three months ended March 31, 2020, we did not repurchase any shares of our common stock.

ITEM 3.             DEFAULTS UPON SENIOR SECURITIES
ITEM 3.DEFAULTS UPON SENIOR SECURITIES.

None.


ITEM 4.             MINE SAFETY DISCLOSURES
None.

ITEM 4.MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5.             OTHER INFORMATION
None.
ITEM 5.OTHER INFORMATION.

We have no information to disclose that was required to be in a report on Form 8-K during the first quarter of fiscal year 2020 but was not reported. There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.


ITEM 6.             EXHIBITS
ITEM 6.EXHIBITS.

31.1Exhibit No. CertificationDescription of ChiefExhibit
3.1Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form 10 filed on April 19, 2018)
3.2Certificate of Designation of Series A Cumulative Convertible Preferred Stock (incorporated by reference to Exhibit 2.2 to the Offering Statement on Form 1-A filed on May 9, 2019)
3.3Certificate of Designation of Series B Cumulative Redeemable Preferred Stock (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on December 5, 2019)
3.4Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Registration Statement on Form 10 filed on April 19, 2018)
10.1Purchase and Sale Agreement, dated January 7, 2020, between MHP Pursuits LLC and Gilmer and Sons Mobile Homes Sales and Rentals, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on January 13, 2020)
10.2Purchase and Sale Agreement, dated January 7, 2020, between MHP Pursuits LLC and J&A Real Estate, LLC (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on January 13, 2020)
10.3Purchase and Sale Agreement, dated January 1, 2020, between MHP Pursuits LLC and Evergreen Marketing LLC (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed on March 27, 2020)
10.4Promissory Note issued by Countryside MHP LLC to J & A Real Estate LLC on March 12, 2020 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on March 27, 2020)
10.5Mortgage, Assignment of Rents and Leases, Security Agreement and Fixture Filing, dated March 12, 2020, between Countryside MHP LLC and J & A Real Estate LLC (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed on March 27, 2020)
10.6Loan Agreement, dated March 17, 2020, between Evergreen MHP LLC and Hunt Mortgage Capital, LLC (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed on March 27, 2020)
10.7Promissory Note issued by Evergreen MHP LLC to Hunt Mortgage Capital, LLC on March 17, 2020 (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed on March 27, 2020)
31.1*Certifications of Principal Executive Officer filed pursuant to 15 U.S.C. Section 7241, as adoptedpursuant to Section 302 of the Sarbanes-Oxley Act of 20022002.
31.232.1* CertificationCertifications of ChiefPrincipal Financial Officer filed pursuant to 15 U.S.C. Section 7241, as adoptedpursuant to Section 302 of the Sarbanes-Oxley Act of 20022002.
32.132.1* CertificationCertifications of ChiefPrincipal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adoptedpursuantadopted pursuant to Section 906 of the Sarbanes-Oxley Act of 20022002.
32.232.2* CertificationCertifications of ChiefPrincipal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adoptedpursuantadopted pursuant to Section 906 of the Sarbanes-Oxley Act of 20022002.
101.INS101.INS* XBRL Instance Document
101.SCH101.SCH* XBRL Taxonomy Extension Schema Document
101.CAL101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB101.DEF* XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*XBRL Taxonomy Extension Label Linkbase Document
101.PRE101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF* XBRL Taxonomy Extension Definition Linkbase DocumentFiled herewith
17
SIGNATURE


SIGNATURES

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

Date: May 15, 2020
STACK-IT STORAGE,MANUFACTURED HOUSING PROPERTIES INC.
 
 /s/ Raymond M. Gee
 Name: Raymond M. Gee
August 11, 2015
By:Title: Chief Executive Officer
/s/ D. Hughes Watler, Jr.(Principal Executive Officer)
 
 D. Hughes Watler, Jr./s/ Michael Z. Anise
 Chief Financial OfficerName: Michael Z. Anise
 Title: President and Chief Financial Officer
 (Principal Financial and Accounting Officer)

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