| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION | (A) Organization The Company is a Nevada corporation
whose principal activities together with its affiliates, acquires, owns, and operates 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
is being 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. (B) Critical Accounting Policies We believe that the following accounting policies
are the most critical to aid you in fully understanding and evaluating these condensed consolidated financial statements. Basis of Presentation These unaudited condensed Consolidated Financial
Statements have been prepared pursuant to Securities and Exchange Commission (“SEC”) rules and regulations. Accordingly,
they do not include all of the information and note disclosures required by U.S. Generally Accepted Accounting Principles ("GAAP")
for complete financial statements and should be read in conjunction with the financial statements and notes thereto included in
the 2017 Form 10. The following notes to the condensed Consolidated
Financial Statements highlight significant changes to the notes included in the 2017 Form 10 and present interim disclosures
as required by the SEC. The accompanying condensed Consolidated Financial Statements reflect, in the opinion of management, all
adjustments and estimates necessary for a fair presentation of the interim financial statements, which are of a normal, recurring
nature. Revenues and expenses are subject to seasonal fluctuations and accordingly, quarterly interim results may not be indicative
of full year results. The Company prepares its financial
statements under the accrual basis of accounting, in conformity with accounting principles generally accepted in the United States
of America (“GAAP”). The Company’s subsidiaries
are all formed in the state of North Carolina as Limited Liability Companies. The acquisition and date of consolidation are as
follows:
Date of Consolidation Subsidiary Ownership
October 2016 Pecan Grove MHP, LLC 75%
April 2017 Butternut MHP, LLC 100%
November 2017 Azalea MHP, LLC 100%
November 2017 Holly Faye MHP, LLC 100%
November 2017 Chatham MHP, LLC 100%
November 2017 Lake View MHP, LLC 100%
December, 2017 Maple Hills MHP, LLC 100% 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. The following unaudited pro-forma
information presents the combined results of operations for the periods as if the above acquisitions of manufactured housing communities
had been completed on January 1, 2017.
For the six months ended
June 30, 2017
Total Revenue $ 965,427
Total (Expenses) (1,063,280 )
Net (Loss) (97,854 )
Net Income Attributable to non-controlling interest 9,008
Net Loss Attributable to the Company (106,862 )
Net Loss per common share, basic and diluted $ (0.01 ) Revenue Recognition The Company follows paragraph 606 of the FASB Accounting
Standards Codification for revenue recognition and ASU 2014--09. On January 1, 2018, the Company adopted 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) Identify the Contract
with a Customer, (2) Identify the Performance Obligations in the Contract, (3) Determine the Transaction Price, (4) Allocate the
Transaction Price to the Performance Obligations in the Contract, and (5) Recognize Revenue When (or As) the Entity Satisfies a
Performance Obligation. Results for reporting periods beginning after January 1, 2018 are presented under ASU 2014-09, while
prior period amounts are not adjusted and continue to be reported under the previous accounting standards. There was no impact
to revenues as a result of applying ASU 2014-09 for the six months ended June 30, 2018, and there have not been any significant
changes to our business processes, systems, or internal controls as a result of implementing the standard. 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 June 30, 2018 and 2017 totaled 698,000 and 0 stock options, respectively and
786,695 and 0 convertible shares, respectively. Use of Estimates The preparation of financial statements
in conformity with accounting principles generally accepted in the United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s significant accounting
estimates and assumptions affecting the consolidated financial statements were the estimates and assumptions used in valuation
of equity and derivative instruments. Those significant accounting estimates or assumptions bear the risk of change due to the
fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult
to measure or value. Management bases its estimates on
historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other
sources. Management regularly reviews its
estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions.
After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those
estimates. Significant estimates include the assumptions used in valuing equity-based transactions, valuation of deferred tax assets,
depreciable lives of property and equipment and valuation of investment property. Investment Property and Equipment and
Depreciation Property and equipment are carried
at cost. Depreciation for Sites and Building is computed principally on the straight-line method over the estimated useful lives
of the assets (ranging from 15 to 25 years). Depreciation of Improvements to Sites and Buildings, Rental Homes and Equipment and
Vehicles is computed principally on the straight-line method over the estimated useful lives of the assets (ranging from 3 to 25
years). Land Development Costs are not depreciated until they are put in use, at which time they are capitalized as Sites and Land
Improvements. Interest Expense pertaining to Land Development Costs are capitalized. Maintenance and Repairs are charged to expense
as incurred and improvements are capitalized. The costs and related accumulated depreciation of property sold or otherwise disposed
of are removed from the financial statement and any gain or loss is reflected in the current year’s results of operations. Impairment Policy The Company applies Financial Accounting
Standards Board Accounting Standards Codification (“ASC”) 360-10, Property, Plant & Equipment (“ASC 360-10”)
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. 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 June 30, 2018 and 2017, the Company
had no cash balances above the FDIC-insured limit, respectively. Stock Based Compensation All stock based payments to employees,
non-employee consultants, and to non-employee 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. Stock based payments to non-employees 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 non-forfeitable the measurement date
is the date the award is issued. Fair Value of Financial Instruments We follow paragraph 825-10-50-10
of the FASB Accounting Standards Codification for disclosures about fair value of our financial instruments and paragraph 820-10-35-37
of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of our financial
instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted
in the United States of America (“U.S. 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. Recent Accounting Pronouncements In May 2017, the FASB issued ASU No. 2017-09,
“Compensation Stock Compensation (Topic 718): Scope of Modification Accounting.” ASU 2017-09 clarifies which changes
to the terms or conditions of a share-based payment award are subject to the guidance on modification accounting under FASB Accounting
Standards Codification Topic 718. Entities would apply the modification accounting guidance unless the value, vesting requirements
and classification of a share-based payment award are the same immediately before and after a change to the terms or conditions
of the award. ASU No. 2017-09 is effective for fiscal years beginning after December 15, 2017, including interim periods within
those fiscal years. The Company has evaluated the potential impact this standard may have on the consolidated financial statements
and determined that it had no impact on the consolidated financial statements. On February 22, 2017, the FASB issued ASU No.
2017-05, “Other Income Gains and Losses from the De-recognition of Nonfinancial Assets.” ASU 2017-05 provides guidance
for recognizing gains and losses from the transfer of nonfinancial assets and in-substance nonfinancial assets in contracts with
non-customers, unless other specific guidance applies. The standard requires a company to de-recognize nonfinancial assets once it
transfers control of a distinct nonfinancial asset or distinct in substance nonfinancial asset. Additionally, when a company transfers
its controlling interest in a nonfinancial asset, but retains a noncontrolling ownership interest, the company is required to measure
any noncontrolling interest it receives or retains at fair value. The guidance requires companies to recognize a full gain or loss
on the transaction. As a result of the new guidance, the guidance specific to real estate sales in ASC 360-20 will be eliminated.
As such, sales and partial sales of real estate assets will now be subject to the same de-recognition model as all other nonfinancial
assets. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within that reporting
period. The Company has evaluated the potential impact this standard may have on the consolidated financial statements and determined
that it had no impact on the consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15,
“Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments.” ASU 2016-15 will
make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows.
ASU 2016-15 is effective for annual reporting periods, including interim reporting periods within those periods, beginning after
December 15, 2017. Early adoption is permitted. The Company believes that the adoption of this standard will not have a material
impact on our financial position, results of operations or cash flows. The Company has evaluated the potential impact this standard
may have on the consolidated financial statements and determined that it had no impact on the consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13,
“Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU
2016-13 requires that entities use a new forward looking “expected loss” model that generally will result in the earlier
recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current
conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 is
effective for annual reporting periods, including interim reporting periods within those periods, beginning after December 15,
2019. The Company is currently evaluating the potential impact this standard may have on the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02,
“Leases.” ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to
recognize most leases on their balance sheets and making targeted changes to lessor accounting. The standard requires a modified
retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option
to use certain transition relief. ASU 2016-02 will be effective for annual reporting periods beginning after December 15, 2018.
Early adoption is permitted. The Company is currently evaluating the potential impact this standard may have on the consolidated
financial statements and the timing of adoption. In January 2016, the FASB issued ASU 2016-01,
“Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities.”
ASU 2016-01 requires equity investments (except those accounted for under the equity method of accounting, or those that result
in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public
business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes,
requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset,
and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate
the fair value that is required to be disclosed for financial instruments measured at amortized cost. ASU 2016-01 is effective
for annual reporting periods, including interim reporting periods within those periods, beginning after December 15, 2017, and
early adoption is permitted. The Company has evaluated the potential impact this standard may have on the consolidated financial
statements and determined that it had no impact on the 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 Consolidated Financial Statements. |
