Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 14, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | MANUFACTURED HOUSING PROPERTIES INC. | |
Entity Central Index Key | 0001277998 | |
Amendment Flag | false | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 12,342,080 | |
Entity File Number | 000-51229 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | NV |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
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 4) | ||
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 |
Series A Cumulative Convertible Preferred Stock | ||
Liabilities | ||
Redeemable Preferred Stock – subject to redemption | 5,027,125 | 4,909,000 |
Series B Cumulative Redeemable Preferred Stock | ||
Liabilities | ||
Redeemable Preferred Stock – subject to redemption | $ 5,172,664 | $ 3,973,610 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Restricted cash | $ 335,905 | |
Notes Payable, net | $ 821,772 | $ 633,629 |
Common Stock, Par Value | $ 0.01 | $ 0.01 |
Common Stock, Authorized | 200,000,000 | 200,000,000 |
Common Stock, Issued | 12,342,080 | 12.336080 |
Common Stock, Outstanding | 12,342,080 | 12.336080 |
Series A Cumulative Redeemable Convertible Preferred Stock | ||
Preferred Stock, Par Value | $ 0.01 | $ 0.01 |
Preferred Stock, Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Issued | 472,500 | 472,500 |
Preferred Stock, Outstanding | 472,500 | 472,500 |
Preferred Stock, Redemption Value | $ 7,087,500 | |
Series B Cumulative Redeemable Preferred Stock | ||
Preferred Stock, Par Value | $ 0.01 | $ 0.01 |
Preferred Stock, Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Issued | 524,957 | 409,722 |
Preferred Stock, Outstanding | 524,957 | 409,722 |
Preferred Stock, Redemption Value | $ 7,874,355 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 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) |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Changes in Stockholders’ Deficit - USD ($) | COMMON STOCK | ADDITIONAL PAID IN CAPITAL | NON CONTROLLING INTEREST | ACCUMULATED DEFICIT | Total |
Beginning balance at Dec. 31, 2018 | $ 103,500 | $ 451,567 | $ 293,241 | $ (1,801,338) | |
Beginning balance, shares at Dec. 31, 2018 | 10,350,062 | ||||
Stock option expense | 8 | $ 8 | |||
Common Stock issuance for acquisition of minority interest | $ 20,000 | 273,241 | (293,241) | ||
Common Stock issuance for acquisition of minority interest, shares | 2,000,000 | ||||
Common Stock issuance for line of credit | $ 5,450 | 299,750 | 305,200 | ||
Common Stock issuance for line of credit, shares | 545,000 | ||||
Common stock issuance for service | 24,500 | 24,500 | |||
Common stock issuance for service, shares | |||||
Preferred shares Series A dividends | (4,667) | (4,667) | |||
Net income (loss) | (719,314) | (719,314) | |||
Ending balance at Mar. 31, 2019 | $ 128,950 | 1,058,403 | (2,520,652) | (1,333,299) | |
Ending balance, shares at Mar. 31, 2019 | 12,895,062 | ||||
Beginning balance at Dec. 31, 2019 | $ 123,361 | 759,849 | (3,840,085) | (2,956,875) | |
Beginning balance, shares at Dec. 31, 2019 | 12,336,080 | ||||
Stock option expense | 539 | 539 | |||
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) | |||
Common Stock issuance to preferred share holders | $ 60 | 1,560 | 1,620 | ||
Common Stock issuance to preferred share holders, shares | 6,000 | ||||
Net income (loss) | (354,165) | (354,165) | |||
Ending balance at Mar. 31, 2020 | $ 123,421 | $ 328,959 | $ (4,194,250) | $ (3,741,870) | |
Ending balance, shares at Mar. 31, 2020 | 12,342,080 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 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 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 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Cash, Cash Equivalents and Restricted Cash) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash, cash equivalents and restricted cash consist of the following: | ||
End of period | $ 2,412,776 | $ 748,779 |
Cash and cash equivalents | 335,905 | 132,540 |
Restricted cash | 2,748,681 | 881,319 |
Cash, cash equivalents and restricted cash consist of the following: | ||
Beginning of period | 3,830,376 | 327,122 |
Cash and cash equivalents | 316,035 | 131,149 |
Restricted cash | $ 4,146,411 | $ 458,271 |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Organization | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION | 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 The Company prepares its consolidated financial statements under the accrual basis of accounting, in conformity with accounting principles generally accepted in the United 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 with 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 consolidated 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 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, all adjustments considered necessary for a fair statement of the financial statements, consisting solely of normal recurring adjustments, have been made. Operating results for the three months 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 date of consolidation are as follows: Name of Subsidiary State of Formation Date of Formation Ownership Pecan Grove MHP LLC North Carolina October 12, 2016 100%* Butternut MHP Land LLC Delaware March 1, 2017 100% Azalea MHP LLC North Carolina October 25, 2017 100% Holly Faye MHP LLC North Carolina October 25, 2017 100% Chatham Pines MHP LLC North Carolina October 31, 2017 100% Maple Hills MHP LLC North Carolina October 31, 2017 100% Lakeview MHP LLC South Carolina November 1, 2017 100% MHP Pursuits LLC North Carolina January 31, 2019 100% Mobile Home Rentals LLC North Carolina September 30, 2016 100% Hunt Club MHP LLC South Carolina March 8, 2019 100% B&D MHP LLC South Carolina April 4, 2019 100% Crestview MHP LLC North Carolina June 28, 2019 100% Springlake MHP LLC Georgia October 10, 2019 100% ARC MHP LLC South Carolina November 13, 2019 100% Countryside MHP LLC South Carolina March 12, 2020 100% Evergreen MHP LLC Tennessee March 17, 2020 100% * 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 balances have been eliminated in consolidation. The Company does not have a majority or minority interest in any other company, either consolidated or unconsolidated. 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. o Revenues 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. o Revenues 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. 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. 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 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 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 in 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. 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 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 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 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 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 business 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 future 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. |
Revision of Prior Year Immateri
Revision of Prior Year Immaterial Misstatement | 3 Months Ended |
Mar. 31, 2020 | |
Revision of Prior Year Immaterial Misstatement [Abstract] | |
Revision of Prior Year Immaterial Misstatement | 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, 2019, the error was immaterial. The Company has decided to correct this error as revisions to our previously issued financial statements and will adjust the Form 10-K when filed in succeeding periods of this fiscal year. The table below present the impact of the revision in the Company's condensed consolidated financial statements. 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. |
Investment Property
Investment Property | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
INVESTMENT PROPERTY | NOTE 3 – INVESTMENT PROPERTY Investment Property consists of the following as of: March 31, 2020 December 31, (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 amortization expense totaled $389,993 and $134,926 for the three months ended March 31, 2020, and 2019, respectively. During the three months ended March 31, 2019, the Company 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 the three months ended March 31, 2020 totaling $5,310,767 (See note 8). |
Promissory Notes
Promissory Notes | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
PROMISSORY NOTES | NOTE 4 – PROMISSORY NOTES Secured Promissory Notes The Company has issued promissory notes payable to lenders related to the acquisition 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 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 Related Party Promissory Note On May 8, 2017, the Company issued a promissory note to Metrolina Loan Holdings, LLC ("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 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. 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 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. Revolving Promissory Note 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. Maturities of Long-Term Obligations for Five Years and Beyond The minimum annual principal payments of notes payable at March 31, 2020 by fiscal year were: 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 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 5 – COMMITMENTS AND CONTINGENCIES From time to time, the Company 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 that may harm its business. The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results. |
Stockholders_ Equity
Stockholders’ Equity | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders' deficit | |
STOCKHOLDERS’ EQUITY | NOTE 6 – STOCKHOLDERS' EQUITY Preferred Stock The Company is authorized to issue up to 10,000,000 shares of preferred stock, $0.01 par value. Series A Preferred Stock On May 8, 2019, the Company filed a certificate of designation with the Nevada 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 Dividend Rate and Payment Dates Liquidation Preference Stockholder Optional Conversion Company Call and Stockholder Put Options 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 the following voting powers, designations, preferences and relative rights, qualifications, limitations or restrictions: Ranking pari passu Dividend Rate and Payment Dates Liquidation Preference Company Call and Stockholder Put Options Voting Rights No Conversion Right 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. The following table summarizes the stock options outstanding as of March 31, 2020: Number of options Weighted average exercise price Weighted average remaining contractual term 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 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 estimated using the Black Scholes option pricing model with the following assumptions for grants made during the periods indicated. Stock option assumptions March 31, December 31, Risk-free interest rate - 0.26 % Expected dividend yield - 0.00 % Expected volatility - 15.17 % Expected life of options (in years) - 10.0 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 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. 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 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 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. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
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 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 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 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 ) |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and Organization (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Organization | Organization Manufactured Housing Properties Inc. (the "Company") is a Nevada corporation whose principal activities are to acquire, own, and operate manufactured housing communities. Mobile Home Rental Holdings ("MHRH") was formed in April 2016 to acquire the assets for Pecan Grove MHP in November 2016 and Butternut MHP in April 2017. To continue the acquisition and aggregation of mobile home parks, MHRH intend to raise capital in the public markets. Therefore, on October 21, 2017, MHRH was acquired by and merged with a public entity Stack-it Storage, Inc. (OTC: STAK). As part of the merger transaction, Stack-it Storage, Inc. changed its name to Manufactured Housing Properties Inc. (OTC: MHPC). For accounting purposes, this transaction was accounted for as a reverse merger and has been treated as a recapitalization of Stack-it Storage, Inc. with Manufactured Housing Properties, Inc. as the accounting acquirer. |
Basis of Presentation | Basis of Presentation The Company prepares its consolidated financial statements under the accrual basis of accounting, in conformity with accounting principles generally accepted in the United 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 with 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 consolidated 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 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, all adjustments considered necessary for a fair statement of the financial statements, consisting solely of normal recurring adjustments, have been made. Operating results for the three months 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 date of consolidation are as follows: Name of Subsidiary State of Formation Date of Formation Ownership Pecan Grove MHP LLC North Carolina October 12, 2016 100%* Butternut MHP Land LLC Delaware March 1, 2017 100% Azalea MHP LLC North Carolina October 25, 2017 100% Holly Faye MHP LLC North Carolina October 25, 2017 100% Chatham Pines MHP LLC North Carolina October 31, 2017 100% Maple Hills MHP LLC North Carolina October 31, 2017 100% Lakeview MHP LLC South Carolina November 1, 2017 100% MHP Pursuits LLC North Carolina January 31, 2019 100% Mobile Home Rentals LLC North Carolina September 30, 2016 100% Hunt Club MHP LLC South Carolina March 8, 2019 100% B&D MHP LLC South Carolina April 4, 2019 100% Crestview MHP LLC North Carolina June 28, 2019 100% Springlake MHP LLC Georgia October 10, 2019 100% ARC MHP LLC South Carolina November 13, 2019 100% Countryside MHP LLC South Carolina March 12, 2020 100% Evergreen MHP LLC Tennessee March 17, 2020 100% * 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 balances have been eliminated in consolidation. The Company does not have a majority or minority interest in any other company, either consolidated or unconsolidated. |
Revenue Recognition | 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. o Revenues 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. o Revenues 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 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 | 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 | 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 | 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 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. |
Impairment Policy | 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. |
Cash and Cash Equivalents | 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 | 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 | 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 | Reclassifications Certain amounts in the prior period presentation have been reclassified to conform with the current presentation. |
Income Taxes | 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 in 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. |
Recent Accounting Pronouncements | 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 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 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 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 pronouncements, if adopted, would have a material effect on the accompanying condensed consolidated financial statements. |
Impact of Coronavirus Pandemic | 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 business 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 future 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. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and Organization (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of subsidiaries | Name of Subsidiary State of Formation Date of Formation Ownership Pecan Grove MHP LLC North Carolina October 12, 2016 100%* Butternut MHP Land LLC Delaware March 1, 2017 100% Azalea MHP LLC North Carolina October 25, 2017 100% Holly Faye MHP LLC North Carolina October 25, 2017 100% Chatham Pines MHP LLC North Carolina October 31, 2017 100% Maple Hills MHP LLC North Carolina October 31, 2017 100% Lakeview MHP LLC South Carolina November 1, 2017 100% MHP Pursuits LLC North Carolina January 31, 2019 100% Mobile Home Rentals LLC North Carolina September 30, 2016 100% Hunt Club MHP LLC South Carolina March 8, 2019 100% B&D MHP LLC South Carolina April 4, 2019 100% Crestview MHP LLC North Carolina June 28, 2019 100% Springlake MHP LLC Georgia October 10, 2019 100% ARC MHP LLC South Carolina November 13, 2019 100% Countryside MHP LLC South Carolina March 12, 2020 100% Evergreen MHP LLC Tennessee March 17, 2020 100% * The Company originally acquired a 75% interest. In January 2019, the Company acquired the remaining 25% interest from a related party. |
Investment Property (Tables)
Investment Property (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of investment property | March 31, 2020 December 31, (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 |
Promissory Notes (Tables)
Promissory Notes (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of secured promissory 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 |
Schedule of minimum annual principal payments of notes payable | 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 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders' deficit | |
Schedule of stock options outstanding | Number of options Weighted average exercise price Weighted average remaining contractual term 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 |
Schedule of vested options outstanding | Strike Price Range ($) Outstanding stock options Weighted average remaining contractual term 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 |
Schedule of stock option assumptions | Stock option assumptions March 31, December 31, Risk-free interest rate - 0.26 % Expected dividend yield - 0.00 % Expected volatility - 15.17 % Expected life of options (in years) - 10.0 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of acquisition of the manufactured housing communities acquired assets | 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 |
Schedule of pro-forma information | 3/31/2020 Consolidated Acquisitions Adjustment 3/31/2020 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 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 ) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies and Organization (Details) | 3 Months Ended | |
Mar. 31, 2020 | ||
Subsidiary 1 | ||
Name of Subsidiary | Pecan Grove MHP LLC | |
State of Formation | North Carolina | |
Date of Consolidation | October 12, 2016 | |
Ownership | 100.00% | [1] |
Subsidiary 2 | ||
Name of Subsidiary | Butternut MHP Land LLC | |
State of Formation | Delaware | |
Date of Consolidation | March 1, 2017 | |
Ownership | 100.00% | |
Subsidiary 3 | ||
Name of Subsidiary | Azalea MHP LLC | |
State of Formation | North Carolina | |
Date of Consolidation | October 25, 2017 | |
Ownership | 100.00% | |
Subsidiary 4 | ||
Name of Subsidiary | Holly Faye MHP LLC | |
State of Formation | North Carolina | |
Date of Consolidation | October 25, 2017 | |
Ownership | 100.00% | |
Subsidiary 5 | ||
Name of Subsidiary | Chatham Pines MHP LLC | |
State of Formation | North Carolina | |
Date of Consolidation | October 31, 2017 | |
Ownership | 100.00% | |
Subsidiary 6 | ||
Name of Subsidiary | Maple Hills MHP LLC | |
State of Formation | North Carolina | |
Date of Consolidation | October 31, 2017 | |
Ownership | 100.00% | |
Subsidiary 7 | ||
Name of Subsidiary | Lakeview MHP LLC | |
State of Formation | South Carolina | |
Date of Consolidation | November 1, 2017 | |
Ownership | 100.00% | |
Subsidiary 8 | ||
Name of Subsidiary | MHP Pursuits LLC | |
State of Formation | North Carolina | |
Date of Consolidation | January 31, 2019 | |
Ownership | 100.00% | |
Subsidiary 9 | ||
Name of Subsidiary | Mobile Home Rentals LLC | |
State of Formation | North Carolina | |
Date of Consolidation | September 30, 2016 | |
Ownership | 100.00% | |
Subsidiary 10 | ||
Name of Subsidiary | Hunt Club MHP LLC | |
State of Formation | South Carolina | |
Date of Consolidation | March 8, 2019 | |
Ownership | 100.00% | |
Subsidiary 11 | ||
Name of Subsidiary | B&D MHP LLC | |
State of Formation | South Carolina | |
Date of Consolidation | April 4, 2019 | |
Ownership | 100.00% | |
Subsidiary 12 | ||
Name of Subsidiary | Crestview MHP LLC | |
State of Formation | North Carolina | |
Date of Consolidation | June 28, 2019 | |
Ownership | 100.00% | |
Subsidiary 13 | ||
Name of Subsidiary | Springlake MHP LLC | |
State of Formation | Georgia | |
Date of Consolidation | October 10, 2019 | |
Ownership | 100.00% | |
Subsidiary 14 | ||
Name of Subsidiary | ARC MHP LLC | |
State of Formation | South Carolina | |
Date of Consolidation | November 13, 2019 | |
Ownership | 100.00% | |
Subsidiary 15 | ||
Name of Subsidiary | Countryside MHP LLC | |
State of Formation | South Carolina | |
Date of Consolidation | March 12, 2020 | |
Ownership | 100.00% | |
Subsidiary 16 | ||
Name of Subsidiary | Evergreen MHP LLC | |
State of Formation | Tennessee | |
Date of Consolidation | March 17, 2020 | |
Ownership | 100.00% | |
[1] | The Company originally acquired a 75% interest. In January 2019, the Company acquired the remaining 25% interest from a related party. |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies and Organization (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Summary of Significant Accounting Policies and Organization (Textual) | ||
Stock option expense | $ 539 | $ 8 |
Common shares total | 161,000 | 28,000 |
Conversion of option share | 656,175 | 541,334 |
Available balance in concentration of credit risk | $ 1,155,724 | $ 2,553,454 |
Common stock price per share | $ 2.50 | |
Series A Preferred Stock [Member] | ||
Summary of Significant Accounting Policies and Organization (Textual) | ||
Conversion of option share | 1,890,000 | 280,000 |
Description of convertible into common shares | Which are convertible into common shares at $2.50 per share for a total of 756,000 and 112,000, respectively, which are not included in dilutive loss per share as the effect would be anti-dilutive. | |
Minimum [Member] | ||
Summary of Significant Accounting Policies and Organization (Textual) | ||
Property and equipment estimated useful lives of the assets | 15 years | |
Maximum [Member] | ||
Summary of Significant Accounting Policies and Organization (Textual) | ||
Property and equipment estimated useful lives of the assets | 25 years |
Revision of Prior Year Immate_2
Revision of Prior Year Immaterial Misstatement (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Investment Property | |||
Land | $ 12,094,338 | $ 10,885,938 | |
Total Investment Property | 39,777,211 | 34,567,464 | |
Net Investment Property | 38,026,881 | 33,172,506 | |
Total Assets | 41,338,696 | 37,907,810 | |
Additional Paid in Capital | 328,959 | 759,849 | |
Total Stockholders’ Deficit | (3,741,870) | (2,956,875) | $ (1,333,299) |
Total Liabilities and Stockholders' Deficit | $ 41,338,696 | 37,907,810 | |
Adjustment [Member] | |||
Investment Property | |||
Land | (244,321) | ||
Total Investment Property | (244,321) | ||
Net Investment Property | (244,321) | ||
Total Assets | (244,321) | ||
Additional Paid in Capital | (244,321) | ||
Total Stockholders’ Deficit | (244,321) | ||
Total Liabilities and Stockholders' Deficit | (244,321) | ||
As Previously Reported [Member] | |||
Investment Property | |||
Land | 11,130,259 | ||
Total Investment Property | 34,811,785 | ||
Net Investment Property | 33,416,827 | ||
Total Assets | 38,152,131 | ||
Additional Paid in Capital | 1,004,170 | ||
Total Stockholders’ Deficit | (2,712,554) | ||
Total Liabilities and Stockholders' Deficit | $ 38,152,131 |
Revision of Prior Year Immate_3
Revision of Prior Year Immaterial Misstatement (Details Textual) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Revision of Prior Year Immaterial Misstatement (Textual) | ||
Total Investment Property | $ 39,777,211 | $ 34,567,464 |
Adjustment [Member] | ||
Revision of Prior Year Immaterial Misstatement (Textual) | ||
Total Investment Property | $ (244,321) |
Investment Property (Details)
Investment Property (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
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 |
Investment Property (Details Te
Investment Property (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 389,993 | $ 134,926 |
Acquire manufactured housing cost | $ (988,000) | $ (33,514) |
Percentage of acquired interest | 25.00% |
Promissory Notes (Details)
Promissory Notes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
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 |
Butternut MHP Land LLC [Member] | ||
Maturity date | Mar. 30, 2020 | |
Interest rate | 6.50% | |
Totals note payables | $ 1,111,166 | 1,114,819 |
Butternut MHP Land LLC Mezz [Member] | ||
Maturity date | Apr. 1, 2027 | |
Interest rate | 7.00% | |
Totals note payables | $ 278,834 | 280,013 |
Pecan Grove MHP LLC [Member] | ||
Maturity date | Feb. 22, 2029 | |
Interest rate | 5.25% | |
Totals note payables | $ 3,086,021 | 3,095,274 |
Azalea MHP LLC [Member] | ||
Maturity date | Mar. 1, 2029 | |
Interest rate | 5.40% | |
Totals note payables | $ 824,965 | 835,445 |
Holly Faye MHP LLC [Member] | ||
Maturity date | Mar. 1, 2029 | |
Interest rate | 5.40% | |
Totals note payables | $ 579,825 | 574,096 |
Chatham MHP LLC [Member] | ||
Maturity date | Apr. 1, 2024 | |
Interest rate | 5.875% | |
Totals note payables | $ 1,760,497 | 1,771,506 |
Lakeview MHP LLC | ||
Maturity date | Jan. 1, 2029 | |
Interest rate | 5.40% | |
Totals note payables | $ 1,851,006 | 1,857,266 |
B&D MHP LLC [Member] | ||
Maturity date | Apr. 25, 2029 | |
Interest rate | 5.50% | |
Totals note payables | $ 1,845,717 | 1,854,788 |
Hunt Club MHP LLC [Member] | ||
Maturity date | May 1, 2024 | |
Interest rate | 5.75% | |
Totals note payables | $ 1,438,294 | 1,447,364 |
Crestview MHP LLC [Member] | ||
Maturity date | Jul. 31, 2024 | |
Interest rate | 5.50% | |
Totals note payables | $ 4,146,819 | 4,173,652 |
Springlake MHP LLC [Member] | ||
Maturity date | Nov. 14, 2022 | |
Interest rate | 3.31% | |
Totals note payables | $ 4,000,000 | 4,000,000 |
ARC MHP LLC [Member] | ||
Maturity date | Jan. 1, 2030 | |
Interest rate | 5.50% | |
Totals note payables | $ 5,275,121 | 5,300,000 |
Maple Hills MHP LLC [Member] | ||
Maturity date | Jan. 1, 2023 | |
Interest rate | 5.125% | |
Totals note payables | $ 2,668,253 | |
Countryside MHP LLC [Member] | ||
Maturity date | Mar. 20, 2050 | |
Interest rate | 5.50% | |
Totals note payables | $ 3,000,000 | |
Evergreen MHP LLC [Member] | ||
Maturity date | Apr. 1, 2032 | |
Interest rate | 3.99% | |
Totals note payables | $ 1,150,000 |
Promissory Notes (Details 1)
Promissory Notes (Details 1) | Mar. 31, 2020USD ($) |
Debt Disclosure [Abstract] | |
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 |
Promissory Notes (Details Textu
Promissory Notes (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Oct. 01, 2017 | May 08, 2017 | |
Promissory Notes (Textual) | |||||
Secured promissory notes, description | 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. | ||||
Write off of mortgage cost | $ 68,195 | ||||
Mortgage costs due to refinancing | 222,768 | 110,039 | |||
Outstanding balance | 816,500 | $ 1,730,000 | |||
Imputed interest | $ 0 | 14,004 | |||
Interest rate terms | The note is interest only payment based on 8%, and 10% deferred until maturity to be paid with principal balance. | ||||
Interest expense related note | $ 36,028 | $ 86,238 | |||
Metrolina Loan Holdings, LLC [Member] | |||||
Promissory Notes (Textual) | |||||
Principal amount | $ 3,000,000 | ||||
Common stock shares | 455,000 | ||||
Related party promissory note, description | 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 Company at the most recent price of any equity transaction for seven years from the amendment dated February 26, 2019. | ||||
Raymond M. Gee [Member] | |||||
Promissory Notes (Textual) | |||||
Principal amount | 7,471,738 | ||||
Outstanding balance | 689,546 | $ 797,906 | |||
Working capital | $ 1,500,000 | ||||
Available for redeployment | $ 2,183,500 | ||||
Minimum [Member] | |||||
Promissory Notes (Textual) | |||||
Promissory notes | 4.50% | ||||
Principal amortization years | 5 years | ||||
Maximum [Member] | |||||
Promissory Notes (Textual) | |||||
Promissory notes | 7.00% | ||||
Principal amortization years | 30 years |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - Equity Incentive Plan [Member] - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Number of options Granted | 136,500 | |
Number of options Exercised | ||
Number of options Forfeited / cancelled / expired | (21,659) | |
Number of options Outstanding, ending | 656,175 | |
Weighted average exercise price Granted | ||
Weighted average exercise price Exercised | ||
Weighted average exercise price Forfeited / cancelled / expired | ||
Weighted average exercise price Outstanding, ending | $ 0.03 | |
Weighted average remaining contractual terms, (in years) | 8 years 4 months 24 days | 8 years 8 months 12 days |
Stockholders_ Equity (Details 1
Stockholders’ Equity (Details 1) | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Strike Price Range 0.01 [Member] | |
Strike Price Range | $ 0.01 |
Outstanding stock options | shares | 519,675 |
Weighted average remaining contractual term (in years) | 8 years |
Weighted average outstanding strike price | $ 0.01 |
Vested stock options | shares | 519,675 |
Weighted average vested strike price | $ 0.01 |
Strike Price Range 0.27 [Member] | |
Strike Price Range | $ 0.27 |
Outstanding stock options | shares | 136,500 |
Weighted average remaining contractual term (in years) | 10 years |
Weighted average outstanding strike price | $ 0.27 |
Vested stock options | shares | 45,500 |
Weighted average vested strike price | $ 0.27 |
Stockholders_ Equity (Details 2
Stockholders’ Equity (Details 2) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Stockholders' deficit | ||
Risk-free interest rate | 0.26% | |
Expected dividend yield | 0.00% | |
Expected volatility | 15.17% | |
Expected life of options (in years) | 10 years |
Stockholders_ Equity (Details T
Stockholders’ Equity (Details Textual) - USD ($) | May 08, 2019 | Dec. 02, 2019 | Nov. 01, 2019 | Feb. 28, 2019 | Jan. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2017 |
Stockholders’ Equity (Textual) | |||||||||
Preferred stock, par value | $ 0.01 | $ 0.01 | |||||||
Common Stock, shares authorized | 200,000,000 | 200,000,000 | |||||||
Common Stock, shares issued | 12,342,080 | 12.336080 | |||||||
Common Stock, shares outstanding | 12,342,080 | 12.336080 | |||||||
Stock issued for cash, shares | 6,000 | 0 | |||||||
Stock issued for cash, value | $ 1,620 | $ 0 | |||||||
Stock option expense | $ 539 | 8 | |||||||
Equity incentive plan, description | 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. | ||||||||
Aggregate intrinsic shares of money options | 519,675 | ||||||||
Aggregate intrinsic value | $ 135,116 | ||||||||
Accretion of put option | $ 184,000 | ||||||||
Mertolina [Member] | |||||||||
Stockholders’ Equity (Textual) | |||||||||
Commons stock issued shares for service | 545,000 | ||||||||
Commons stock issued value for service | $ 305,200 | ||||||||
Gvest Real Estate Capital LLC [Member] | |||||||||
Stockholders’ Equity (Textual) | |||||||||
Stock issued for cash, shares | 2,000,000 | ||||||||
Stock issued for cash, value | $ 537,562 | ||||||||
Percentage of interst rate | 25.00% | ||||||||
Series A Preferred Stock [Member] | |||||||||
Stockholders’ Equity (Textual) | |||||||||
Preferred stock, par value | $ 0.01 | $ 0.01 | |||||||
Preferred stock, authorized | 10,000,000 | 10,000,000 | |||||||
Preferred stock, shares issued | 472,500 | 472,500 | |||||||
Preferred stock, designated shares | 4,000,000 | ||||||||
Cumulative dividends, per shares | $ 0.017 | ||||||||
Liquidation preference per share | $ 2.50 | ||||||||
Dividend rate, percentage | 8.00% | ||||||||
Dividends paid | $ 94,500 | 4,667 | |||||||
Liquidation preference, description | The liquidation preference for each share of Series A Preferred Stock is $2.50. | ||||||||
Conversion price | $ 2.50 | ||||||||
Common Stock is greater than the liquidation preference, per shares | $ 2.50 | ||||||||
Put option cost | 118,125 | 0 | |||||||
Call and stockholder put options, description | 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. | ||||||||
Preferred stock total in cash | $ 4,725,000 | ||||||||
Series B Preferred Stock [Member] | |||||||||
Stockholders’ Equity (Textual) | |||||||||
Preferred stock, par value | $ 0.01 | $ 0.01 | |||||||
Preferred stock, authorized | 10,000,000 | 10,000,000 | |||||||
Preferred stock, shares issued | 524,957 | 409,722 | |||||||
Preferred stock, designated shares | 1,000,000 | ||||||||
Cumulative dividends, per shares | $ 0.067 | ||||||||
Liquidation preference per share | $ 10 | ||||||||
Dividend rate, percentage | 8.00% | ||||||||
Dividends paid | $ 92,996 | 0 | |||||||
Liquidation preference, description | 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. | ||||||||
Call and stockholder put options, description | 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. | ||||||||
Offering Share of preferred stock | 1,000,000 | ||||||||
Offering price per shares | $ 10 | ||||||||
Maximum offering amount | $ 10,000,000 | ||||||||
Gross proceeds | 1,152,350 | ||||||||
Net proceeds | 1,071,686 | ||||||||
Public offering, description | 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. | ||||||||
Accretion of put option | $ 127,368 | $ 0 | |||||||
Equity Incentive Plan [Member] | |||||||||
Stockholders’ Equity (Textual) | |||||||||
Shares issued | 136,500 | 519,675 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | May 08, 2017 | Jan. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Oct. 01, 2017 |
Related Party Transactions (Textual) | ||||||
Note Payable - related party | $ 689,546 | $ 797,906 | ||||
Imputed interest | 0 | $ 14,004 | ||||
Paid off balance amount | $ 2,754,550 | |||||
Related party transaction, description | 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. | |||||
Redeployment amount | $ 3,000,000 | |||||
Additional issue shares | 545,000 | |||||
Fair value | $ 305,200 | |||||
Fair value of shares awarded to Metrolina | 1,000,000 | |||||
Note Payable - Related Party | $ 33,016,518 | $ 28,992,876 | ||||
Debt or equity securities issued rate | 10.00% | |||||
Debt, description | Mr. Gee received a $50,000 fee for his personal guarantee on a promissory note relating to a loan for one of the Company’s acquisitions | |||||
Interest expense related note | $ 36,028 | 86,238 | ||||
Gvest Real Estate Capital LLC [Member] | ||||||
Related Party Transactions (Textual) | ||||||
Interest rate | 25.00% | |||||
Common Stock, shares | 2,000,000 | |||||
Cost value | $ 537,562 | |||||
Lease cost | 4,000 | |||||
Rent expense | $ 12,000 | $ 0 | ||||
Mr. Gee [Member] | ||||||
Related Party Transactions (Textual) | ||||||
Working capital | $ 1,500,000 | |||||
Metrolina Loan Holdings, LLC [Member] | ||||||
Related Party Transactions (Textual) | ||||||
Principal amount | $ 3,000,000 | |||||
Common Stock, shares | 455,000 | |||||
Additional issue shares | 305,200 | 12,000 | ||||
Metrolina Loan Holdings, LLC [Member] | Minimum [Member] | ||||||
Related Party Transactions (Textual) | ||||||
Interest rate | 8.00% | |||||
Metrolina Loan Holdings, LLC [Member] | Maximum [Member] | ||||||
Related Party Transactions (Textual) | ||||||
Interest rate | 10.00% |
Acquisitions (Details)
Acquisitions (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Land | $ 1,208,400 |
Improvements | 2,819,600 |
Building | 1,110,000 |
Acquisition Cost | 172,768 |
Total purchase price | 5,310,768 |
Countryside MHP [Member] | |
Land | 777,000 |
Improvements | 1,813,000 |
Building | 1,110,000 |
Acquisitions [Member] | |
Acquisition Cost | 21,642 |
Total purchase price | $ 3,721,642 |
Acquisition date | Mar. 31, 2020 |
Evergreen MHP [Member] | |
Land | $ 431,400 |
Improvements | 1,006,600 |
Building | |
Adjustment [Member] | |
Acquisition Cost | 151,126 |
Total purchase price | $ 1,589,126 |
Acquisition date | Mar. 31, 2020 |
Acquisitions (Details 1)
Acquisitions (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Total revenue | $ 1,473,755 | $ 1,203,877 |
Total expenses | 1,720,599 | 1,585,561 |
Depreciation and amortization expense | 389,993 | 134,926 |
Interest expense | 438,174 | 232,706 |
Net income (loss) | (337,008) | (1,055,422) |
Preferred stock dividends and put option value accretion | 432,989 | 4,667 |
Net Loss attributable to common shareholders | $ (787,154) | $ (723,981) |
Weighted average - basic and fully diluted | $ (0.06) | $ (0.08) |
Consolidated | ||
Total revenue | $ 1,306,137 | $ 536,374 |
Total expenses | 1,660,302 | 1,255,688 |
Depreciation and amortization expense | ||
Interest expense | ||
Net income (loss) | (354,165) | (719,314) |
Preferred stock dividends and put option value accretion | 432,989 | 4,667 |
Net Loss attributable to common shareholders | (787,154) | (723,981) |
Acquisitions [Member] | ||
Total revenue | 167,618 | 667,503 |
Total expenses | 60,297 | 329,873 |
Depreciation and amortization expense | ||
Interest expense | ||
Net income (loss) | 107,321 | 337,630 |
Preferred stock dividends and put option value accretion | ||
Net Loss attributable to common shareholders | 107,321 | 337,630 |
Adjustment [Member] | ||
Depreciation and amortization expense | 49,445 | 341,232 |
Interest expense | 40,719 | $ 332,506 |
Preferred stock dividends and put option value accretion | ||
Net Loss attributable to common shareholders | $ 26,429 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - USD ($) | May 01, 2020 | Apr. 01, 2020 |
Subsequent Events (Textual) | ||
Subsequent event, description | The Company refinanced the loans for Butternut MHP Land LLC (see Note 3) 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. | |
Federal payroll protection program loan | $ 139,300 |