Cover
Cover - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Mar. 28, 2024 | Jun. 30, 2023 | ||
Document Type | 10-K | |||
Amendment Flag | false | |||
Document Annual Report | true | |||
Document Transition Report | false | |||
Document Period End Date | Dec. 31, 2023 | |||
Document Fiscal Period Focus | FY | |||
Document Fiscal Year Focus | 2023 | |||
Current Fiscal Year End Date | --12-31 | |||
Entity File Number | 001-39266 | |||
Entity Registrant Name | Harbor Custom Development, Inc. | |||
Entity Central Index Key | 0001784567 | |||
Entity Tax Identification Number | 46-4827436 | |||
Entity Incorporation, State or Country Code | WA | |||
Entity Address, Address Line One | 1201 Pacific Avenue, Suite 1200 | |||
Entity Address, City or Town | Tacoma | |||
Entity Address, State or Province | WA | |||
Entity Address, Postal Zip Code | 98402 | |||
City Area Code | (253) | |||
Local Phone Number | 649-0636 | |||
Entity Well-known Seasoned Issuer | No | |||
Entity Voluntary Filers | No | |||
Entity Current Reporting Status | Yes | |||
Entity Interactive Data Current | Yes | |||
Entity Filer Category | Non-accelerated Filer | |||
Entity Small Business | true | |||
Entity Emerging Growth Company | true | |||
Elected Not To Use the Extended Transition Period | false | |||
Entity Shell Company | false | |||
Entity Public Float | $ 5 | |||
Entity Common Stock, Shares Outstanding | 2,686,431 | |||
Documents Incorporated by Reference [Text Block] | None | |||
Document Financial Statement Error Correction [Flag] | false | |||
Auditor Firm ID | 89 | |||
Auditor Name | Rosenberg Rich Baker Berman, P.A | |||
Auditor Location | Somerset, New Jersey | |||
Common Stock [Member] | ||||
Title of 12(b) Security | Common Stock | |||
Trading Symbol | [1] | HCDIQ | ||
Series A Cumulative Convertible Preferred Stock | ||||
Title of 12(b) Security | Series A Cumulative Convertible Preferred Stock | |||
Trading Symbol | [1] | HCDPQ | ||
Warrant [Member] | ||||
Title of 12(b) Security | Warrants | |||
Trading Symbol | [1] | HCDWQ | ||
Warrant One [Member] | ||||
Title of 12(b) Security | Warrants | |||
Trading Symbol | [1] | HCDZQ | ||
[1]The Nasdaq Stock Market LLC filed a Form 25-NSE on February 15, 2024 to deregister the Company’s securities under Section 12(b) of the Securities Exchange Act of 1934, as amended. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
ASSETS | ||
Cash | $ 3,574,500 | $ 9,665,300 |
Restricted Cash | 597,600 | 597,600 |
Accounts Receivable, net | 279,800 | 1,707,000 |
Note Receivable, net | 950,000 | 4,525,300 |
Prepaid Expense and Other Assets | 1,250,900 | 5,318,100 |
Real Estate | 156,738,400 | 205,478,200 |
Property and Equipment, net | 1,610,500 | 2,289,500 |
Right of Use Assets | 1,749,200 | 1,926,100 |
Deferred Tax Asset, net | 4,659,300 | |
TOTAL ASSETS | 166,750,900 | 236,166,400 |
LIABILITIES | ||
Accounts Payable and Accrued Expenses | 5,945,900 | 14,090,700 |
Dividends Payable | 634,700 | |
Contract Liabilities | 25,300 | 497,400 |
Deferred Revenue | 49,900 | 52,000 |
Note Payable - Insurance | 529,300 | 378,500 |
Revolving Line of Credit Loan, net of Unamortized Debt Discount of $0 and $0.6 million respectively | 14,178,700 | 24,359,700 |
Equipment Loans | 2,057,100 | |
Finance Leases | 154,500 | |
Right of Use Liabilities | 2,779,400 | |
Total Liabilities Not Subject to Compromise | 146,051,400 | 160,610,500 |
Liabilities Subject to Compromise | 12,221,500 | |
TOTAL LIABILITIES | 158,272,900 | 160,610,500 |
COMMITMENTS AND CONTINGENCIES - SEE NOTE 14 | ||
STOCKHOLDERS’ EQUITY | ||
Preferred Stock, no par value per share, 10,000,000 shares authorized and 3,799,799 issued and outstanding at December 31, 2023 and December 31, 2022 | 62,912,100 | 62,912,100 |
Common Stock, no par value per share, 50,000,000 shares authorized and 2,686,431 issued and outstanding at December 31, 2023 and 718,835 issued and outstanding at December 31, 2022 | 43,030,200 | 35,704,700 |
Additional Paid In Capital | 3,096,800 | 1,266,300 |
Accumulated Deficit | (100,561,100) | (24,327,200) |
TOTAL STOCKHOLDERS’ EQUITY | 8,478,000 | 75,555,900 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 166,750,900 | 236,166,400 |
Nonrelated Party [Member] | ||
LIABILITIES | ||
Construction Loans - Related Parties, net of Unamortized Debt Discount of $0 and $0.1 million respectively | 125,322,300 | 107,483,700 |
Related Party [Member] | ||
LIABILITIES | ||
Construction Loans - Related Parties, net of Unamortized Debt Discount of $0 and $0.1 million respectively | $ 8,122,800 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Defined Benefit Plan Disclosure [Line Items] | ||
Debt instrument, unamortized discount | $ 0 | $ 600,000 |
Preferred stock, no par value | $ 0 | $ 0 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 3,799,799 | 3,799,799 |
Preferred stock, shares outstanding | 3,799,799 | 3,799,799 |
Common stock, no par value | $ 0 | $ 0 |
Common stock, shares authorised | 50,000,000 | 50,000,000 |
Common stock, shares issued | 2,686,431 | 718,835 |
Common stock, shares outstanding | 2,686,431 | 718,835 |
Nonrelated Party [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Debt instrument, unamortized discount | $ 800,000 | $ 1,900,000 |
Related Party [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Debt instrument, unamortized discount | $ 0 | $ 100,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Statement [Abstract] | ||
Sales | $ 59,256,700 | $ 55,414,300 |
Cost of Sales | 110,691,900 | 55,866,800 |
Gross Loss | (51,435,200) | (452,500) |
Operating Expenses | 9,754,200 | 16,237,700 |
Operating Loss | (61,189,400) | (16,690,200) |
Other Income (Expense) | ||
Interest Expense | (2,602,600) | (1,760,000) |
Interest Income | 151,000 | 465,600 |
Loss on Sale of Equipment | (47,700) | (3,433,800) |
Other Income | 51,500 | 38,000 |
Total Other Expense | (2,447,800) | (4,690,200) |
Bankruptcy Expense | 392,500 | |
Loss Before Income Tax | (64,029,700) | (21,380,400) |
Income Tax Expense (Benefit) | 4,589,400 | (4,458,200) |
Net Loss | (68,619,100) | (16,922,200) |
Net Loss Attributable to Non-controlling interests | (500) | |
Preferred Dividends | (7,614,800) | (7,759,900) |
Net Loss Attributable to Common Stockholders | $ (76,233,900) | $ (24,681,600) |
Loss Per Share - Basic | $ (39.19) | $ (35.29) |
Loss Per Share - Diluted | $ (39.19) | $ (35.29) |
Weighted Average Common Shares Outstanding - Basic | 1,945,233 | 699,490 |
Weighted Average Common Shares Outstanding - Diluted | 1,945,233 | 699,490 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($) | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Parent [Member] | Noncontrolling Interest [Member] | Total |
Balance at Dec. 31, 2021 | $ 32,122,700 | $ 66,507,500 | $ 752,700 | $ 1,646,500 | $ 101,029,400 | $ (1,291,600) | $ 99,737,800 |
Balance, shares at Dec. 31, 2021 | 657,767 | ||||||
Balance, shares at Dec. 31, 2021 | 4,016,955 | ||||||
Exercise of stock options | $ 10,500 | (1,900) | 8,600 | $ 8,600 | |||
Exercise of stock options, shares | 1,081 | 1,081 | |||||
Stock Compensation Expense | 515,500 | 515,500 | $ 515,500 | ||||
Stock Compensation Expense, shares | 5,293 | ||||||
Dissolution of Non-Controlling Interest | (1,292,100) | (1,292,100) | 1,292,100 | ||||
Preferred Stock Dividends | (7,759,900) | (7,759,900) | (7,759,900) | ||||
Repurchase of Stock | $ (437,700) | (437,700) | (437,700) | ||||
Repurchase of Stock, shares | (12,597) | ||||||
Conversion of Preferred Stock | $ 3,595,400 | $ (3,595,400) | |||||
Conversion of Preferred Stock, shares | 60,326 | (217,156) | |||||
Exercise of Warrants | $ 413,800 | 413,800 | 413,800 | ||||
Exercise of Warrants, shares | 6,965 | ||||||
Net Loss | (16,921,700) | (16,921,700) | (500) | (16,922,200) | |||
Balance at Dec. 31, 2022 | $ 35,704,700 | $ 62,912,100 | 1,266,300 | (24,327,200) | 75,555,900 | $ 75,555,900 | |
Balance, shares at Dec. 31, 2022 | 718,835 | 718,835 | |||||
Balance, shares at Dec. 31, 2022 | 3,799,799 | 3,799,799 | |||||
Exercise of stock options, shares | |||||||
Stock Compensation Expense | 218,100 | 218,100 | $ 218,100 | ||||
Stock Compensation Expense, shares | 3,285 | ||||||
Preferred Stock Dividends | (7,614,800) | (7,614,800) | (7,614,800) | ||||
Net Loss | (68,619,100) | (68,619,100) | (68,619,100) | ||||
Public Offering - Common Stock | $ 602,600 | 602,600 | 602,600 | ||||
Public Offering - Common Stock, shares | 160,500 | ||||||
Public Offering - Pre-funded Warrants and Common Warrants | 8,335,300 | 8,335,300 | 8,335,300 | ||||
Exercise of Pre-funded Warrants | $ 6,722,900 | (6,722,900) | |||||
Exercise of Pre-funded Warrants, shares | 1,790,718 | ||||||
Round Up of Shares from Reverse Stock Split | |||||||
Round Up of Shares from Reverse Stock Split, shares | 13,093 | ||||||
Balance at Dec. 31, 2023 | $ 43,030,200 | $ 62,912,100 | $ 3,096,800 | $ (100,561,100) | $ 8,478,000 | $ 8,478,000 | |
Balance, shares at Dec. 31, 2023 | 2,686,431 | 2,686,431 | |||||
Balance, shares at Dec. 31, 2023 | 3,799,799 | 3,799,799 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Loss | $ (68,619,100) | $ (16,922,200) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 333,500 | 1,407,400 |
Amortization of right of use assets | 176,900 | 542,800 |
Loss on sale of equipment | 47,700 | 3,433,800 |
Provision for loss on contract | 153,400 | 159,100 |
Impairment loss on real estate | 48,825,700 | 3,602,600 |
Impairment loss on note receivable | 1,200,000 | |
Stock compensation | 218,100 | 515,500 |
Amortization of revolver issuance costs | 640,300 | 457,400 |
Net change in assets and liabilities: | ||
Accounts receivable | 1,427,200 | (593,500) |
Contract assets | 2,167,200 | |
Notes receivable | 3,575,300 | (3,725,300) |
Prepaid expenses and other assets | 4,413,300 | (1,499,900) |
Real estate | 2,937,900 | (84,637,700) |
Deferred tax asset | 4,659,300 | (4,010,300) |
Accounts payable and accrued expenses | (6,093,000) | 3,428,100 |
Contract liabilities | (625,500) | 338,300 |
Deferred revenue | (2,100) | 7,200 |
Payments on right of use liability, net of incentives | (224,600) | 255,800 |
NET CASH USED IN OPERATING ACTIVITIES | (8,155,700) | (93,873,700) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property and equipment | (2,646,400) | |
Proceeds on the sale of equipment | 218,100 | 5,113,300 |
NET CASH PROVIDED BY INVESTING ACTIVITIES | 218,100 | 2,466,900 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Construction loans | 65,836,600 | 89,559,300 |
Payments on construction loans | (48,578,300) | (17,115,900) |
Financing fees construction loans | (1,864,000) | (2,470,200) |
Related party construction loans | (8,177,300) | 8,669,900 |
Payments on related party construction loans | (75,000) | (14,071,800) |
Financing fees related party construction loans | (105,400) | |
Revolving line of credit loan | 25,000,000 | |
Payments on revolving line of credit loan | (10,821,300) | |
Financing fees revolving line of credit loan | (1,097,700) | |
Payments on note payable - insurance | (645,300) | (1,115,500) |
Payments on equipment loans | (2,057,100) | (3,894,200) |
Payments on financing leases | (74,800) | (104,100) |
Preferred dividends | (634,700) | (7,796,100) |
Repurchase of common stock | (437,700) | |
Proceeds from common stock offering | 602,600 | |
Proceeds from pre-funded and common warrants offering | 8,335,400 | |
Proceeds from exercise of stock options | 8,600 | |
Proceeds from exercise of warrants | 413,700 | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 1,846,800 | 75,442,900 |
NET DECREASE IN CASH AND RESTRICTED CASH | (6,090,800) | (15,963,900) |
CASH AND RESTRICTED CASH AT BEGINNING OF YEAR | 10,262,900 | 26,226,800 |
CASH AND RESTRICTED CASH AT END OF YEAR | 4,172,100 | 10,262,900 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Interest paid | 14,760,300 | 8,635,600 |
Bankruptcy items - Professional fees and employee compensation paid | 261,000 | |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Termination of right of use leases | 346,900 | |
Amortization of debt discount capitalized | 3,023,800 | 2,307,000 |
Promissory notes issued for earnest money | 300,000 | 450,000 |
Cancellation of promissory note for earnest money | 750,000 | |
Financing of insurance | 796,200 | 590,100 |
Conversion of finance lease to equipment loan | 394,800 | |
Termination of finance leases | 79,700 | |
Financing of fixed assets additions | 110,000 | |
Dividends declared but not paid | 7,614,800 | 634,600 |
Conversion of preferred to common stock | 3,595,400 | |
Exercise of Pre-funded warrants | $ 6,723,000 |
NATURE OF OPERATIONS AND SUMMAR
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations The Company’s principal business activity involves acquiring raw land and developed lots for the purpose of building and selling single family and multi-family dwellings in Washington, California, Texas, and Florida. On August 1, 2019, the Company changed its name from Harbor Custom Homes, Inc. to Harbor Custom Development, Inc. The Company became an effective filer with the SEC and started trading on The Nasdaq Stock Market LLC (“Nasdaq”) on August 28, 2020. Nasdaq determined that the Company’s securities will be delisted from Nasdaq on December 12, 2023. Trading of the Company’s common stock (HCDI), preferred stock (HCDIP), and two classes of warrants (HCDIW and HCDIZ) was suspended at the opening of trading on December 21, 2023. On December 20, 2023, the Company received a notice from FINRA’s Department of Market Operations (the “FINRA Notice”) informing the Company that the trading symbols HCDIQ, HCDPQ, HCDWQ, and HCDZQ were assigned to its common stock, preferred stock, and warrants, respectively, and that as of December 21, 2023, the aforementioned securities would be quoted and traded in the market for unlisted securities (i.e., the “over-the-counter market”). As a result, trading of such securities commenced on OTC Pink Current Information on December 21, 2023 under the trading symbols HCDIQ, HCDPQ, HCDWQ, and HCDZQ. On December 11, 2023 (the “Petition Date”), Harbor Custom Development, Inc. and certain of its wholly owned subsidiaries, including Belfair Apartments, LLC; Pacific Ridge CMS, LLC; HCDI FL Condo LLC; HCDI Bridgeview LLC; HCDI Semiahmoo LLC; and Beacon Studio Farms LLC (collectively, the “Debtors”), filed a voluntary petition (the “Bankruptcy Petition”) for reorganization under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Western District of Washington (such court, the “Bankruptcy Court” and such case, the “Chapter 11 Case”). The Chapter 11 Case is being jointly administered under the caption In re Harbor Custom Development, Inc., et al., Case No. 23-42180-MJH. Principles of Consolidation The consolidated financial statements include the following subsidiaries of Harbor Custom Development, Inc. as of the reporting period ending dates as follow: SCHEDULE OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF SUBSIDIARIES Attributable Interest Names Dates of Formation December 31, December 31, Saylor View Estates, LLC* March 30, 2014 N/A N/A Belfair Apartments, LLC December 3, 2019 100 % 100 % Pacific Ridge CMS, LLC May 24, 2021 100 % 100 % Tanglewilde, LLC June 25, 2021 100 % 100 % HCDI FL CONDO LLC July 30, 2021 100 % 100 % HCDI Mira, LLC** August 31, 2021 N/A 100 % HCDI, Bridgeview LLC October 28, 2021 100 % 100 % HCDI Wyndstone, LLC September 15, 2021 100 % 100 % HCDI Semiahmoo, LLC December 17, 2021 100 % 100 % Mills Crossing, LLC*** July 21, 2022 100 % 100 % Broadmoor Ventures, LLC*** August 24, 2022 100 % 100 % GPB Holdings LLC*** October 29, 2022 100 % 100 % Winding Lane Estate LLC*** November 30, 2022 100 % 100 % Beacon Studio Farms LLC March 20, 2023 100 % N/A * Saylor View Estates, LLC was voluntarily dissolved with the State of Washington as of January 20, 2022. ** HCDI Mira, LLC was voluntarily dissolved with the State of Washington as of May 1, 2023. *** These subsidiaries no longer have any activities and not in use as they were either sold or cancelled during 2023. As of December 31, 2023 and December 31, 2022, the aggregate non-controlling interest was $ 0 Basis of Presentation The accompanying consolidated financial statements include the accounts of Harbor Custom Development, Inc and, its wholly owned subsidiaries, and are presented using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany accounts and transactions have been eliminated in consolidation. References to the “ASC” hereafter refer to the Accounting Standards Codification established by the Financial Accounting Standards Board (“FASB”) as the source of authoritative U.S. GAAP. All numbers in the financial statements are rounded to the nearest $100, except for Earnings (Loss) per Share (“EPS”) data, and numbers in the notes to the financial statements are rounded to the nearest million. Reclassification Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. Use of Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used. Going Concern Uncertainty The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. For the year ended December 31, 2023, the Company generated a net loss of $ 68.6 8.2 3.6 140.3 Debtor-in Possession In general, as debtors-in-possession under the Bankruptcy Code, we are authorized to continue to operate as an ongoing business but may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court. Pursuant to certain motions and applications intended to limit the disruption of the bankruptcy proceedings on our operations (the First Day Motions) and other motions filed with the Bankruptcy Court, the Bankruptcy Court has authorized the Company to conduct its business activities in the ordinary course, including, among other things and subject to the terms and conditions of such orders, pay employee wages and benefits, settle certain de minimis disputes and pay vendors and suppliers in the ordinary course for all goods and services. Reorganization Effective on December 11, 2023, the Company began to apply the provisions of ASC 852, Reorganizations (“ASC 852”), which is applicable to companies under bankruptcy protection, and requires amendments to the presentation of certain financial statement line items. ASC 852 requires that the financial statements for periods including and after the filing of the Chapter 11 Case distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Expenses (including professional fees), realized gains and losses, and provisions for losses that can be directly associated with the reorganization must be reported separately as Bankruptcy items in the consolidated statements of operations beginning December 11, 2023, the date of filing of the Chapter 11 Case. For the year ended December 31, 2023, Bankruptcy expense consisted of legal and professional fees and employee compensation costs directly attributable to bankruptcy. Liabilities that may be affected by the Plan must be classified as liabilities subject to compromise at the amounts expected to be allowed by the Bankruptcy Court, even if they may be settled for lesser amounts as a result of the Plan or negotiations with creditors. The amounts currently classified as liabilities subject to compromise may be subject to future adjustments depending on Bankruptcy Court actions, further developments with respect to disputed claims, determinations of secured status of certain claims, the values of any collateral securing such claims, or other events. Any resulting changes in classification will be reflected in subsequent financial statements. If there is uncertainty about whether a secured claim is undersecured, or will be impaired under the Plan, the entire amount of the claim is included with prepetition claims in liabilities subject to compromise. (See Note 12. Liabilities Subject to Compromise.) As a result of the filing of the Chapter 11 Case on December 11, 2023, the classification of pre-petition indebtedness is generally subject to compromise pursuant to the Plan. Generally, actions to enforce or otherwise effect payment of pre-bankruptcy filing liabilities are stayed. Although payment of pre-petition claims generally is not permitted, the Bankruptcy Court granted the Debtors authority to pay certain pre-petition claims in designated categories and subject to certain terms and conditions. This relief generally was designed to preserve the value of the Debtors’ businesses and assets. Among other things, the Bankruptcy Court authorized the Debtors’ to pay certain pre-petition claims relating to employee wages and benefits, taxes and critical vendors. The Debtors are paying and intend to pay undisputed post-petition liabilities in the ordinary course of business. In addition, the Debtors may reject certain pre-petition executory contracts and unexpired leases with respect to their operations with the approval of the Bankruptcy Court. Any damages resulting from the rejection of executory contracts and unexpired leases are treated as general unsecured claims. Stock-Based Compensation Effective November 19, 2018, the Company’s Board of Directors and stockholders approved and adopted the 2018 Incentive and Non-Statutory Stock Option Plan (the “2018 Plan”). The 2018 Plan allows the Administrator (as defined in the 2018 Plan), currently the Board of Directors, to determine the issuance of incentive stock options and non-qualified stock options to eligible employees and outside directors and consultants of the Company. The Company reserved 33,784 100,000 Effective December 3, 2020, the Company’s Board of Directors and stockholders approved and adopted the 2020 Restricted Stock Plan (the “2020 Plan”). The 2020 Plan allows the Administrator, currently the Compensation Committee, to determine the issuance of restricted stock to eligible officers, directors, and key employees. The Company reserved 35,000 100,000 The Company accounts for stock-based compensation in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 718, “Compensation – Stock Compensation” (“ASC 718”) which establishes financial accounting and reporting standards for stock-based employee and non-employee compensation. It defines a fair value-based method of accounting for an employee stock option or similar equity instrument. The Company recognizes all forms of share-based payments, including stock option grants, warrants and restricted stock grants, at their fair value on the grant date. Options and warrants are valued using a Black-Scholes option pricing model. Grants of share-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the share-based payment. The grants are amortized on a straight-line basis over the requisite service periods, which are generally the vesting period. The Company accounts for forfeitures of stock options as they occur. When forfeitures occur, the unvested portion of the previously recognized compensation cost is reversed in the period of the forfeiture. Stock-based compensation expenses are included in operating expenses in the consolidated statements of operations. For the years ended December 31, 2023 and 2022 when computing fair value of share-based payments, the Company has considered the following range of assumptions: SCHEDULE OF COMPUTING FAIR VALUE OF SHARE-BASED PAYMENTS December 31, 2023 December 31, 2022 Risk-free interest rate 4.30 % 1.73 3.54 Exercise price $ 3.73 $ 22.40 60.00 Expected life of grants in years 6.38 3.93 6.51 Expected volatility of underlying stock 43.50 % 42.34 48.13 Dividends — — The expected term is computed using the “simplified method” as permitted under the provisions of FASB ASC Topic 718-10-S99. The Company uses the simplified method to calculate the expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. The share price is the closing price on the date of grant. Expected volatility is based on the historical stock price volatility of comparable companies’ common stock as the stock does not have sufficient historical trading activity. Risk free interest rates were obtained from U.S. Treasury rates for the applicable expected terms. Repurchase of Equity Securities Share repurchases are recorded to common stock at the value of the cash consideration paid, as the Company’s common stock has no par value. These shares were being repurchased for the purpose of constructive retirement. (See Note 18. Stockholders’ Equity.) Reverse Stock Split On March 6, 2023, the Company effected a 1-for-20 reverse stock split 2023 Public Offering On May 18, 2023, the Company closed on a public offering of 160,500 1,790,718 1,951,218 8.9 117,073 The pre-funded warrants and common warrants were evaluated in accordance with FASB ASC Topics 480, Distinguishing Liabilities from Equity and 815, Derivatives and Hedging. The Company assessed whether the pre-funded warrants and common warrants are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, are mandatorily redeemable, embody obligations to repurchase shares or issue a variable number of shares, are exercisable without any contingent provisions, permit the holders to receive a fixed number of shares of common stock upon exercise, are indexed to the Company’s common stock, and are settled in shares. Based on this assessment, the pre-funded warrants and common warrants were classified as a component of permanent stockholders’ equity within additional paid-in capital and were recorded at the issuance date using a relative fair value allocation method. The Company values these equity instruments at issuance and allocated net proceeds from the sale proportionately to the common stock, the pre-funded warrants, and the common warrants. Of the net proceeds, $ 0.6 6.7 1.6 0.1 The common warrants and placement agent warrants were valued using a Black-Scholes pricing model. When computing the fair value of these warrants, the Company used 3.94 5.00 6.41 2.5 37.83 Earnings (Loss) Per Share (“EPS”) EPS is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to topic 260-10-45 of the FASB ASC. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the numerator may have to adjust for any dividends and income or loss associated with potentially dilutive securities that are assumed to have resulted in the issuance of shares of common stock and the denominator may have to adjust to include the number of additional shares of common stock that would have been outstanding if the dilutive potential shares of common stock had been issued during the period to reflect the potential dilution that could occur from shares of common stock issuable through a contingent shares issuance arrangement, stock options, warrants, RSUs, or convertible preferred stock. For purposes of determining diluted earnings per common share, the treasury stock method is used for stock options, warrants, and RSUs, and the if-converted method is used for convertible preferred stock as prescribed in FASB ASC Topic 260. Because of the net loss for the year ended December 31, 2023, the impact of including these in the computation of diluted EPS was anti-dilutive. In accordance with FASB ASC Topic 260-10-45, pre-funded warrants have been included in the weighted average common shares outstanding number for the purpose of calculating EPS. The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net loss attributable to common stockholders per share of common stock for the years ended December 31, 2023 and 2022. SCHEDULE OF COMPUTATION BASIC AND DILUTED NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS PER SHARE OF COMMON STOCK Year Ended December 31, 2023 Year Ended December 31, 2022 Numerator: Net loss attributable to common stockholders $ (76,233,900 ) $ (24,681,600 ) Effect of dilutive securities: — — Diluted net loss $ (76,233,900 ) $ (24,681,600 ) Denominator: Weighted average common shares outstanding - basic 1,945,233 699,490 Dilutive securities (a): Restricted Stock Awards — — Options — — Warrants — — Convertible Preferred Stock — — Dilutive securities — — Weighted average common shares outstanding and assumed conversion – diluted 1,945,233 699,490 Basic net loss per common share $ (39.19 ) $ (35.29 ) Diluted net loss per common share $ (39.19 ) $ (35.29 ) (a) - Outstanding anti-dilutive securities excluded: Unvested restricted stock awards 1,167 12,000 Stock options 98,459 37,546 Warrants to purchase common stock (20:1) ( 1 18,447,564 18,447,564 Warrants to purchase common stock (1:1) ( 2 2,068,291 — Convertible preferred stock ( 3 3,799,799 3,799,799 Warrants to purchase convertible preferred stock ( 3 12,000 12,000 Outstanding anti-dilutive securities excluded 12,000 12,000 (1) The number of outstanding warrants, issued prior to the reverse stock split on March 6, 2023, did not change or split pursuant to the reverse stock split, but the number of shares of common stock issuable upon exercise of these warrants was adjusted based on a 1 to 0.05 (2) The number of outstanding warrants issued after the reverse stock split on March 6, 2023 are exercisable for shares of common stock on a 1 to 1 ratio. (3) Preferred stock and warrants to purchase convertible preferred stock are convertible into common stock on a 0.2778 Fair Value of Financial Instruments For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the Company’s short-term financial instruments approximates fair value due to the relatively short period to maturity for these instruments. Cash and Cash Equivalents The Company considers all short-term debt securities purchased with a maturity of three months or less to be cash equivalents. There were no Accounts Receivable Accounts receivables are reported at the amount the Company expects to collect from outstanding balances. The Company provides for an allowance for credit losses based upon a review of the outstanding accounts receivable, historical collection information, and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. The allowance for credit losses was $ 0.1 0 Notes Receivable Notes receivables are recorded at amounts due to the Company according to the contractual terms of the loan agreement. The Company’s notes receivables are for the sale of real estate properties or financing the development of the properties prior to acquisition and are each secured by the underlying improved real estate properties. The Company reviews notes receivable for credit losses whenever events or circumstances indicate that the note may not be fully recoverable. Credit losses are present when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Under ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurements of Credit Losses on Financial Instruments, the allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The credit losses are measured based on the estimated uncollectible amount less the fair value of the underlying collateral. Credit loss is recognized with an allowance against the note receivable with a corresponding charge to bad debt expense under operating expenses. The allowance for credit losses is written down when the remaining note amount is collected in full. There was no 1.2 for notes receivable In March 2022, the Company entered into a promissory note with Rocklin Winding Lane 22, LLC for $ 4.8 0.8 5.1 1.0 Property and Equipment and Depreciation Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repair charges are expensed as incurred. Depreciation is computed by the straight-line method (after considering their respective estimated residual values) over the estimated useful lives: SCHEDULE OF PROPERTY AND EQUIPMENT ESTIMATED USEFUL LIVES Construction Equipment 5 10 Leasehold Improvements The lesser of 10 Furniture and Fixtures 5 Computers 3 Vehicles 10 Real Estate Assets Real estate assets are recorded at cost, except when real estate assets are acquired that meet the definition of a business combination in accordance with FASB ASC Topic 805, “Business Combinations,” where acquired assets are recorded at fair value. Interest, property taxes, insurance, and other incremental costs (including salaries) directly related to a project are capitalized during the construction period of major facilities and land improvements. The capitalization period begins when activities to develop the parcel commence and ends when the asset construction is completed and ready for rental or when the asset is sold, depending on the asset and the intended use. The capitalized costs are recorded as part of the asset to which they relate and are expensed as part of the rental costs or when the underlying asset is sold. The Company capitalized interest from related party borrowings of $ 0.4 1.1 9.8 5.7 A property is classified as “held for sale” when all of the following criteria for a plan of sale have been met: (1) Management, having the authority to approve the action, commits to a plan to sell the property; (2) The property is available for immediate sale in its present condition, subject only to terms that are usual and customary; (3) An active program to locate a buyer and other actions required to complete the plan to sell have been initiated; (4) The sale of the property is probable and is expected to be completed within one year of the contract date; (5) The property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (6) Actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. In addition to the annual assessment of potential triggering events in accordance with FASB ASC Topic 360, the Company applies a fair value-based impairment test to the net book value of assets on an annual basis and on an interim basis if certain events or circumstances indicate that an impairment loss may have occurred. As of December 31, 2023, the Company recorded impairment charges of $ 14.1 5.4 10.1 1.2 19.3 2.4 Revenue and Cost Recognition FASB ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. In accordance with ASC 606, revenue is recognized when a customer obtains control of the promised good or service. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods or services. The provision of ASC 606 includes a five-step process by which the Company determines revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which the Company expects to be entitled in exchange for those goods or services. ASC 606 requires the Company to apply the following steps: (1) identify the contract with the 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, performance obligations are satisfied. A detailed breakdown of the five-step process for revenue recognitions is as follows: Homes, Developed Lots, and Entitled Land 1. Identify the contract with a customer. The Company signs an agreement with a buyer to purchase the parcel of entitled land, developed lots that have completed infrastructure, or completed homes. 2. Identify the performance obligations in the contract. Performance obligations of the Company include delivering entitled land, developed lots, and completed homes to the customer, which are required to meet certain specifications outlined in the contract. 3. Determine the transaction price. The transaction price is fixed and specified in the contract. Any subsequent change orders or price changes are required to be approved by both parties. 4. Allocation of the transaction price to performance obligations in the contract. The parcel, lots, and homes are separate performance obligations for which the specific price is in the contract. 5. Recognize revenue when (or as) the entity satisfies a performance obligation. The Company recognizes revenue when title is transferred. The Company does not have any further material performance obligations once title is transferred. Fee Build 1. Identify the contract with a customer. The Company signs an agreement with a customer to construct the required infrastructure so that houses can be developed on the lots. 2. Identify the performance obligations in the contract. Performance obligations of the Company include delivering developed lots which are required to meet certain specifications that are outlined in the contract. 3. Determine the transaction price. The transaction price is fixed and specified in the contract. Any subsequent change orders or price changes are required to be approved by both parties. 4. Allocation of the transaction price to performance obligations in the contract. The nature of the industry involves a number of uncertainties that can affect the current state of the contract. Variable considerations are the estimates made due to a contract modification in the contractual service. Change orders, claims, extras, or back charges are common in contractual services activity as a form of variable consideration. If there is going to be a contract modification, judgment by management will need to be made to determine if the variable consideration is enforceable. The following factors are considered in determining if the variable consideration is enforceable: 1. The customer’s written approval of the scope of the change order; 2. Current contract language that indicates clear and enforceable entitlement relating to the change order; 3. Separate documentation for the change order costs that are identifiable and reasonable; and 4. The Company’s experience in negotiating change orders, especially as it relates to the specific type of contract and change order being evaluated. Once the Company receives a contract, it generates a budget of projected costs for the contract based on the contract price. If the scope of the contract during the contractual period needs to be modified, the Company files a change order. The Company does not continue to perform services until the change modification is agreed upon with documentation by both the Company and the customer. There are few times that claims, extras, or back charges are included in the contract. If there are multiple performance obligations to the contract, the costs must be allocated appropriately and consistently to each performance obligation. In the Company’s experience, usually only one performance obligation is stated per contract. If there are multiple services provided for one customer, the Company has a policy of splitting out the services over multiple contracts. 5. Recognize revenue when (or as) the entity satisfies a performance obligation. The Company uses the total costs incurred on the project relative to the total expected costs to satisfy the performance obligation. The input method involves measuring the resources consumed, labor hours expended, costs incurred, time lapsed, or machine hours used relative to the total expected inputs to the satisfaction of the performance obligation. Costs incurred prior to actual contract (i.e., design, engineering, procurement of material, etc.) should not be recognized as the Company does not have control of the good/service provided. When the estimate on a contract indicates a loss or claims against costs incurred reduce the likelihood of recoverability of such costs, the Company records the entire estimated loss in the period the loss becomes known. Project contracts typically provide for a schedule of billings or invoices to the customer based on the Company’s job to date percentage of completion of specific tasks inherent in the fulfillment of its performance obligation(s). The schedules for such billings usually do not precisely match the schedule on which costs are incurred. As a result, contract revenue recognized in the statement of operations can and usually does differ from amounts that can be billed or invoiced to the customer at any point during the contract. Amounts by which cumulative contract revenue recognized on a contract as of a given date exceed cumulative billings and unbilled receivables to the customer under the contract are reflected as a current contract asset in the Company’s balance sheet. Amounts by which cumulative billings to the customer under a contract as of a given date exceed cumulative contract revenue recognized on the contract would be reflected as a current contract liability in the Company’s balance sheet. (See Note 20. Uncompleted Contracts.) Revenues from contracts with customers are summarized by category as follows for the years ended December 31, 2023 and 2022: SCHEDULE OF REVENUE FROM CONTRACTS WITH CUSTOMERS AND BASED ON THE TIMING OF SATISFACTION OF PERFORMANCE OBLIGATIONS Year Ended Year Ended December 31, 2023 December 31, 2022 Homes $ 9,104,000 $ 28,670,000 Developed Lots 11,033,500 9,510,000 Entitled Land — 7,880,000 Fee Build 877,800 9,124,000 Multi-family 38,241,400 175,900 Construction Materials — 54,400 Total Revenue $ 59,256,700 $ 55,414,300 The following table disaggregates the Company’s revenue based on the timing of satisfaction of performance obligations for the years ended December 31, 2023 and 2022: Year Ended Year Ended December 31, 2023 December 31, 2022 Performance obligations satisfied at a point in time $ 58,378,900 $ 46,290,300 Performance obligations satisfied over time 877,800 9,124,000 Total Revenue $ 59,256,700 $ 55,414,300 Rental Income Rental income attributable to residential leases has been evaluated under FASB ASC Topic 842, Leases. Rental income is recorded when due from residents and recognized monthly as it was earned. Residential apartment leases may include lease income related to such items as utility recoveries, parking rent, storage rent and pet rent that the Company treats as a single lease component because the amenities cannot be leased on their own and the timing and pattern of revenue recognition are the same. Leases entered into between a resident and a property for the rental of an apartment unit are generally six months one Rental income is included as a part of sales on the statement of operations and within the multi-family segment presented in Note 19. Segments. Rental income was $ 3.5 0.2 Securi |
CONCENTRATIONS
CONCENTRATIONS | 12 Months Ended |
Dec. 31, 2023 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS | 2. CONCENTRATIONS Cash Concentrations The Company maintains cash balances at various financial institutions. These balances are secured by the Federal Deposit Insurance Corporation. These balances generally exceed the federal insurance limits. Uninsured cash balances were $ 2.6 8.1 Revenue Concentrations Homes For the year ended December 31, 2023, six individual customers represented more than 10 Developed Lots For the year ended December 31, 2023, two customers each represented 11 10 59 25 Entitled Land For the year ended December 31, 2023, there were no concentrations in relation to the entitled land segment.. For the year ended December 31, 2022, two customers each represented 57 43 Fee Build One customer represented 100 Multi-Family For the year ended December 31, 2023, two customers represented 54 37 |
NOTES RECEIVABLE
NOTES RECEIVABLE | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
NOTES RECEIVABLE | 3. NOTES RECEIVABLE The outstanding balance of notes receivable amounted to $ 1.0 4.5 9 0.2 0.5 0.2 0.2 In March 2022, the Company and Noffke Horizon View, LLC entered into a promissory note with a payment in full due on March 31, 2023 of $ 3.3 2.1 The details of notes receivables, net of valuation allowance are as follows: SCHEDULE OF NOTES RECEIVABLES, NET OF VALUATION ALLOWANCE December 31, 2023 December 31, 2022 Broadmoor Commons LLC $ — $ 1,000,300 Modern Homestead LLC 950,000 1,445,000 Noffke Horizon View, LLC — 2,080,000 Total Notes Receivable, Net $ 950,000 $ 4,525,300 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 4. PROPERTY AND EQUIPMENT Property and equipment stated at cost, less accumulated depreciation and amortization, consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT December 31, 2023 December 31, 2022 Machinery and Equipment $ 44,000 $ 505,300 Vehicles — 26,200 Furniture and Fixtures 692,100 695,600 Leasehold Improvements 1,467,100 1,524,000 Total Fixed Assets 2,203,200 2,751,100 Less Accumulated Depreciation (592,700 ) (461,600 ) Fixed Assets, Net $ 1,610,500 $ 2,289,500 Depreciation expense was $ 0.3 1.4 |
REAL ESTATE
REAL ESTATE | 12 Months Ended |
Dec. 31, 2023 | |
Real Estate [Abstract] | |
REAL ESTATE | 5. REAL ESTATE Real Estate consisted of the following components: SCHEDULE OF REAL ESTATE December 31, 2023 December 31, 2022 Land Held for Development $ 31,410,100 $ 47,166,700 Construction in Progress 96,205,900 123,927,300 Held for Sale 29,122,400 34,384,200 Total Real Estate $ 156,738,400 $ 205,478,200 |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued liabilities consisted of the following: SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES December 31, 2023 December 31, 2022 Trade Accounts Payable $ 6,599,600 $ 11,472,100 Retainage Payable 65,500 1,130,300 Accrued Compensation, Bonuses, and Benefits 143,200 384,700 Accrued Quarry Reclamation Costs 10,000 76,200 Other Accruals 1,179,500 1,027,400 Pre-petition Liabilities Subject to Compromise (2,051,900 ) — Total Accounts Payable and Accrued Expenses Not Subject to Compromise $ 5,945,900 $ 14,090,700 |
REVOLVING LINE OF CREDIT
REVOLVING LINE OF CREDIT | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
REVOLVING LINE OF CREDIT | 7. REVOLVING LINE OF CREDIT On March 7, 2022, the Company entered into a senior secured revolving credit facility (“the credit facility”) with BankUnited, N.A. (the “Lender”) for $ 25.0 two year 4.75 1.1 On February 23, 2023, the Company entered into an amended loan agreement (the “Amendment”) with the Lender, whereby the Lender agreed to waive its right to accelerate and declare all of the debt immediately due and owing, based upon the previously disclosed non-compliance with financial covenants resulting in technical default under the loan agreement. Further, the Lender waived the requirement that the Company comply with certain financial covenants through maturity of the debt. These concessions were made as a result of the Company granting the Lender second mortgage positions for certain properties owned by the Company, as well as transferring to the Lender membership certificates pledging certain properties as collateral. Additionally, the Company agreed to make principal reduction payments including paying the Lender $ 0.6 25 The Company evaluated the Amendment in accordance with ASC 470-50, Debt - Modifications and Extinguishments and applied the borrowing capacity model as it relates to a revolving debt arrangement. Under the Amendment, the Lender is no longer committed and has no further lending obligations to the Company, which reduced the borrowing capacity of available credit to $ 0 0.5 The filing of the Bankruptcy Petition constituted an event of default under the loan agreement dated March 7, 2022 and the Amendment to the Loan Agreement, dated February 22, 2023. The interest accrues at the default rate from December 2023, which rate floats at the contract rate plus 3 0.03 Interest expense was $ 2.5 1.6 As of December 31, 2023 and December 31, 2022, the revolving line of credit loan balance was $ 14.2 25.0 0 0.6 |
EQUIPMENT LOANS
EQUIPMENT LOANS | 12 Months Ended |
Dec. 31, 2023 | |
Disclosure Equipment Loans Abstract | |
EQUIPMENT LOANS | 8. EQUIPMENT LOANS Equipment loans consists of the following: SCHEDULE OF EQUIPMENT LOANS December 31, 2023 December 31, 2022 Various notes payable to banks and financial institutions with interest rates varying from 0.00 13.89 400 10,500 $ — $ 2,057,100 Book value of collateralized equipment: $ — $ 11,800 There were no future equipment loan maturities as of December 31, 2023. Interest expense was $ 0.001 0.2 |
CONSTRUCTION LOANS
CONSTRUCTION LOANS | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
CONSTRUCTION LOANS | 9. CONSTRUCTION LOANS The Company has various construction loans with private individuals and finance companies. The loans are collateralized by specific construction projects. Most loans are generally on one two one two The loans have interest ranging from 7.99 13.00 13.55 24.00 0.8 The loan balances related to third party lenders as of December 31, 2023 and December 31, 2022 were $ 126.2 109.4 0.8 1.9 156.7 193.1 |
LETTER OF CREDIT
LETTER OF CREDIT | 12 Months Ended |
Dec. 31, 2023 | |
Letter Of Credit | |
LETTER OF CREDIT | 10. LETTER OF CREDIT The Company has a letter of credit agreement with WaFd Bank of $ 0.6 1 |
NOTE PAYABLE - INSURANCE
NOTE PAYABLE - INSURANCE | 12 Months Ended |
Dec. 31, 2023 | |
Disclosure Note Payable Insurance Abstract | |
NOTE PAYABLE - INSURANCE | 11. NOTE PAYABLE - INSURANCE The Company purchased Directors & Officers (D&O) insurance on August 28, 2023 for $ 0.4 0.03 11 7.90 0.6 0.1 11 4.75 0.2 0.4 The Company also obtained financing on General Liability insurance for $ 0.5 0.1 10 8.95 0.3 |
LIABILITIES SUBJECT TO COMPROMI
LIABILITIES SUBJECT TO COMPROMISE | 12 Months Ended |
Dec. 31, 2023 | |
Liabilities Subject To Compromise | |
LIABILITIES SUBJECT TO COMPROMISE | 12. LIABILITIES SUBJECT TO COMPROMISE Liabilities subject to compromise as part of the Chapter 11 Case consisted of the following: SCHEDULE OF LIABILITIES SUBJECT TO COMPROMISE December 31, 2023 Pre-petition Accounts Payable and Accrued Expenses $ 2,051,900 Dividends Payable 7,614,800 Right of Use Liabilities 2,554,800 Pre-petition Liabilities Subject to Compromise $ 12,221,500 These amounts represent the Company’s current estimate of known or potential obligations to be resolved in connection with the Chapter 11 Case and may differ from actual future settlement amounts paid. Differences between liabilities estimated and claims filed, or to be filed, will be investigated and resolved in connection with the claims resolution process. Determination of the value at which liabilities will ultimately be settled cannot be made until the Plan becomes effective. The Company will continue to evaluate and adjust the amount and classification of its pre-petition liabilities. Such adjustments may be material. Any additional liabilities that are subject to compromise will be recognized accordingly, and the aggregate amount of Liabilities subject to compromise may change. |
DEFINED CONTRIBUTION PLAN
DEFINED CONTRIBUTION PLAN | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
DEFINED CONTRIBUTION PLAN | 13. DEFINED CONTRIBUTION PLAN Effective January 1, 2016, the Company established a 401(k) plan for qualifying employees; employee contributions are voluntary. Company contributions to the plan for the years ended December 31, 2023 and 2022 were $ 0.1 0.1 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 14. COMMITMENTS AND CONTINGENCIES From time to time the Company is subject to compliance audits by federal, state, and local authorities relating to a variety of regulations including wage and hour laws, taxes, and workers’ compensation. There are no significant or pending litigation or regulatory proceedings known at this time other than the uncertainty with the results of the Chapter 11 proceedings. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 15. RELATED PARTY TRANSACTIONS Notes Payable The Company entered into construction loans with Sound Equity, LLC of which Robb Kenyon, a former director and minority shareholder, is a partner. These loans were originated between April 2019 and June 2021; the loans generally have a 12 24 7.99 11.00 0 8.2 0.1 0.1 0 0.1 0.4 1.1 Robb Kenyon resigned as a director of the Company on July 8, 2021. Due to Related Party The Company previously utilized a quarry to process waste materials from the completion of raw land into sellable/buildable lots. The materials produced by the quarry and sold by the Company to others were subject to a 25 100 0 0 0 0.04 Rental Expense The Company previously entered into property management agreements with Olympic Management Company (“OMC”), which was owned and operated by a family member related to the Company’s former Chief Executive Officer and President. OMC served as a managing agent for leasing and managing the Company’s Mills Crossing, Belfair View, Pacific Ridge, and Wyndstone multi-family properties. The Company paid management fees to OMC, which consisted of service fees of up to $ 3,000 500 0.3 0.04 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
LEASES | 16. LEASES The Company determines if an arrangement contains a lease at inception. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The Company’s leases consist of leaseholds on office space, machinery, and equipment. The Company utilized a portfolio approach in determining the discount rate. The portfolio approach takes into consideration the range of the term, the range of the lease payments, the category of the underlying asset and the Company’s estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments. The Company also considered its recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating the incremental borrowing rates. The lease term includes options to extend the lease when it is reasonably certain that the Company will exercise that option. These operating leases contain renewal options for periods ranging from three five years Leases with a term of 12 months or less are not recorded on the balance sheet, per the election of the practical expedient noted above. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company recognizes variable lease payments in the period in which the obligation for those payments is incurred. Variable lease payments that depend on an index or a rate are initially measured using the index or rate at the commencement date, otherwise variable lease payments are recognized in the period incurred. The components of lease expense were as follows: SCHEDULE OF COMPONENTS OF LEASE EXPENSE Year Ended Year Ended December 31, 2023 December 31, 2022 Finance leases expense Depreciation of assets $ 8,900 $ 76,000 Interest on lease liabilities 2,000 17,700 Operating lease expense 286,800 677,400 Total net lease cost $ 297,700 $ 771,100 Supplemental balance sheet information related to leases was as follows: SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES December 31, 2023 December 31, 2022 Operating leases: Operating lease ROU assets $ 1,749,200 $ 1,926,100 Total ROU Liabilities $ 2,554,800 $ 2,779,400 Finance leases: Property and equipment, at cost $ — $ 178,800 Less: Accumulated depreciation — 79,100 Property and equipment, net $ — $ 99,700 Total Finance lease liabilities $ — $ 154,500 Supplemental cash flow and other information related to leases was as follows: SCHEDULE OF CASH FLOW AND OTHER INFORMATION RELATED TO LEASES Year Ended Year Ended December 31, 2023 December 31, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases - lease payments $ (224,600 ) $ (358,100 ) Operating cash flows from operating leases - lease incentives — 613,900 Financing cash flows from finance leases - lease payments (74,800 ) (104,100 ) Assets obtained in exchange for lease liabilities: Operating leases $ — $ — Finance leases — 110,000 Weighted average remaining lease term (in years): Operating leases 8.25 9.2 Finance leases — 0.9 Weighted average discount rate: Operating leases 4.0 % 4.0 % Finance leases — 7.5 % The minimum lease payments under the terms of the operating leases are as follows for the years ended December 31: SCHEDULE OF MINIMUM LEASE PAYMENTS UNDER THE TERMS OF OPERATING LEASES Operating Leases 2024 $ 316,300 2025 325,700 2026 335,400 2027 345,500 2028 355,800 Thereafter 1,365,900 Total lease payments $ 3,044,600 Less amount of discount/interest (489,800 ) Operating leases $ 2,554,800 |
INCOME TAX
INCOME TAX | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | 17. INCOME TAX The components of net deferred tax assets and liabilities at December 31, 2023 and 2022 are set forth below: SCHEDULE OF COMPONENTS OF NET DEFERRED TAX ASSETS AND LIABILITIES December 31, 2023 December 31, 2022 Deferred tax assets: Federal NOL carryforwards $ 6,790,800 $ 1,905,900 UNICAP 783,700 1,865,900 Lease liability 561,400 586,300 Stock based compensation 7,400 15,400 Investments — 200 Impairment loss on note receivable and real estate and loss provision on fee build contracts 10,388,700 1,046,700 Sec. 163(j) interest deduction carryforwards 823,100 273,100 Tax Credits 72,000 72,000 Charitable Contribution Carryover 2,000 — Bad Debt Expense 263,700 — Advanced Rent Payments 11,000 — Total assets $ 19,703,800 $ 5,765,500 Deferred tax liabilities: Property and equipment $ 290,200 $ 480,200 Right of use assets 538,000 553,800 Sec. 481(a) adjustments 37,600 72,200 Total liabilities $ 865,800 $ 1,106,200 Subtotal deferred tax assets $ 18,838,000 $ 4,659,300 Valuation allowance (18,838,000 ) — Net deferred tax assets $ — $ 4,659,300 The Company is required to establish a valuation allowance for any portion of the deferred tax asset that the Company concludes is more likely than not to be unrealizable. The Company’s assessment considered all evidence, both positive and negative, including the nature, frequency, and severity of any current and cumulative losses, taxable income in carry back years, the scheduled reversal of deferred tax liabilities, tax planning strategies, and projected future taxable income in making this assessment. As of December 31, 2023, the Company determined that it was not more likely than not that the Company’s deferred tax assets would be realized and therefore recorded a valuation allowance of $ 15.8 no The Company has approximately $ 30.9 13.0 no The components of income tax expense (benefit) and the effective tax rates for the years ended December 31, 2023 SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) Year Ended Year Ended December 31, 2023 December 31, 2022 Current: Federal $ (107,500 ) $ (456,300 ) State 28,700 8,400 Total Current (78,800 ) (447,900 ) Deferred: Federal (13,335,700 ) (3,989,100 ) State (834,100 ) (21,200 ) Total Deferred (14,169,800 ) (4,010,300 ) Valuation Allowance 18,838,000 — Total Income Tax Expense (Benefit) $ 4,589,400 $ (4,458,200 ) The expected tax rate differs from the U.S. Federal statutory rate as follows: SCHEDULE OF EXPECTED TAX RATE 2023 2022 US federal statutory rate 21.0 % 21.0 % Change in federal valuation allowance (29.4 )% — % Accrual to return changes and other adjustments to deferred balances (0.1 )% (0.5 )% Tax credits 0.1 % 0.3 % Incentive stock options — % (0.1 )% State taxes 1.2 % 0.1 % Change in tax rate — % 0.1 % Other — % — % Effective Tax Rate (7.2 )% 20.9 % The Company has not recorded any uncertain tax positions for any tax year and treats accrued interest and penalties on income tax liabilities as income tax expense for the years ended December 31, 2023 and The Company files an income tax return in the U.S. and is subject to examination by the IRS for the tax years 2019, 2020, 2021 and 2022. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | 18. STOCKHOLDERS’ EQUITY Common Stock The Company is authorized to issue 50,000,000 no 2,686,431 718,835 Each share of common stock has one Preferred Stock The Company is authorized to issue 10,000,000 no 3,799,399 2.00 25.00 20 Conversion at Option of Holder 0.2778 Dividends Preferred Stock 2.00 8 25.00 7.6 0.6 Common Stock. 2023 Public Offering On May 16, 2023, the Company entered into securities purchase agreements (the “Purchase Agreements”) with certain institutional investors (the “Investors”), pursuant to which the Company agreed to issue and sell to the Investors in a public offering (the “Offering”) (i) 160,500 no 1,790,718 1,951,218 5.125 5.1249 8.9 117,073 6.41 0.6 6.7 1.6 0.1 Reverse Stock Split On February 17, 2023, the Company held a special meeting of stockholders at which the stockholders approved a proposal to effect a reverse split of its issued and outstanding shares of common stock at a ratio of between 1-for-3 and 1-for-25 On February 27, 2023, the Board of Directors approved the implementation of the Reverse Stock Split at a ratio of 1-for-20 As a result of the Reverse Stock Split, every 20 Repurchase of Equity Securities On May 10, 2022, the Board of Directors approved a stock repurchase program authorizing the repurchase of up to $ 5.0 15 12,597 35.23 0.4 As a part of the amended loan agreement reached with BankUnited, N.A. on February 23, 2023, the Company agreed that it will not repurchase any of its currently outstanding securities. (A) Options The following is a summary of the Company’s option activity: SCHEDULE OF STOCK OPTION ACTIVITY Options Weighted Average Exercise Price Outstanding – January 1, 2022 23,163 $ 56.43 Exercisable – January 1, 2022 17,186 $ 55.47 Granted 19,600 $ 23.79 Exercised (1,081 ) $ 8.00 Forfeited/Cancelled (4,135 ) $ 34.48 Outstanding – December 31, 2022 37,546 $ 41.51 Exercisable – December 31, 2022 19,696 $ 55.55 Granted 140,000 $ 3.73 Exercised — $ — Forfeited/Cancelled (79,087 ) $ 8.97 Outstanding – December 31, 2023 98,459 $ 13.93 Exercisable – December 31, 2023 17,543 $ 54.67 SCHEDULE OF STOCK OPTION OUTSTANDING AND EXERCISABLE Options Outstanding Options Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 3.73 130.00 98,459 9.00 $ 13.93 17,543 $ 54.67 During the year ended December 31, 2023, 140,000 3.73 ten years 0.3 Stock-Based Compensation During the year ended December 31, 2022, the Company issued 19,600 22.40 41.80 ten years one three years 0.2 Stock-Based Compensation. During the year ended December 31, 2023, the Company had no 1,081 8.00 0.01 The Company recognized share-based compensation net of forfeitures related to options of $ 0.1 0.1 On December 31, 2023, unrecognized share-based compensation was $ 0.2 The intrinsic value for outstanding and exercisable options as of December 31, 2023 and 2022 was $ 0 0 (B) Warrants The following is a summary of the Company’s common stock warrant activity, for warrants that are exercisable at a 20 to 1 ratio to common stock: SCHEDULE OF COMMON STOCK WARRANT ACTIVITY Warrants* Weighted Average Exercise Price Outstanding – January 1, 2022 18,486,859 $ 3.46 Exercisable – January 1, 2022 18,486,859 $ 3.46 Granted 100,000 $ 3.00 Exercised (139,295 ) $ 2.97 Forfeited/Cancelled — $ — Outstanding – December 31, 2022 18,447,564 $ 3.47 Exercisable – December 31, 2022 18,380,897 $ 3.47 Granted — $ — Exercised — $ — Forfeited/Cancelled — $ — Outstanding – December 31, 2023 18,447,564 $ 3.47 Exercisable – December 31, 2023 18,414,231 $ 3.47 * As a result of the Reverse Stock Split, each warrant now entitles the holder to purchase one-twentieth (0.05) of one share of common stock. SCHEDULE OF WARRANT OUTSTANDING AND EXERCISABLE Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.40 7.50 18,447,564 2.68 $ 3.47 18,414,231 $ 3.47 During the year ended December 31, 2023, the Company did not issue any warrants with a 20 to 1 ratio 100,000 5,000 3.00 five years three years 0.1 The intrinsic value for outstanding and exercisable warrants as of December 31, 2023 and 2022 was $ 0 0 The following is a summary of the Company’s common stock warrant activity, for warrants that are exercisable at a 1 to 1 ratio to common stock: Warrants Weighted Average Exercise Price Outstanding – January 1, 2023 — $ — Exercisable – January 1, 2023 — $ — Granted 2,068,291 $ 5.08 Exercised — $ — Forfeited/Cancelled — $ — Outstanding – December 31, 2023 2,068,291 $ 5.08 Exercisable – December 31, 2023 2,068,291 $ 5.08 Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 5.00 6.41 2,068,291 4.38 $ 5.08 2,068,291 $ 5.08 During the year ended December 31, 2023, the Company issued 2,068,291 5.00 6.41 five years 1.8 The intrinsic value for outstanding and exercisable warrants as of December 31, 2023 was $ 0 The following is a summary of the Company’s preferred stock warrant activity: Warrants Weighted Average Exercise Price Outstanding – January 1, 2022 12,000 $ 24.97 Exercisable – January 1, 2022 12,000 $ 24.97 Granted — $ — Exercised — $ — Forfeited/Cancelled — $ — Outstanding – December 31, 2022 12,000 $ 24.97 Exercisable – December 31, 2022 12,000 $ 24.97 Granted — $ — Exercised — $ — Forfeited/Cancelled — $ — Outstanding – December 31, 2023 12,000 $ 24.97 Exercisable – December 31, 2023 12,000 $ 24.97 Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 24.97 12,000 2.44 $ 24.97 12,000 $ 24.97 During the years ended December 31, 2023 and 2022, the Company did no The intrinsic value for outstanding and exercisable preferred warrants as of December 31, 2023 and 2022 was $ 0 (C) Pre-Funded Warrants The following is a summary of the Pre-Funded Warrant activity: Pre-Funded Warrants Weighted Average Exercise Price Outstanding – January 1, 2023 — $ — Exercisable – January 1, 2023 — $ — Granted 1,790,718 $ 0.0001 Exercised (1,790,718 ) $ 0.0001 Forfeited/Cancelled — $ — Outstanding – December 31, 2023 — $ — Exercisable – December 31, 2023 — $ — During the year ended December 31, 2023, the Company issued Pre-Funded Warrants to purchase 1,790,718 0.0001 7.6 During the year ended December 31, 2023, all Pre-Funded Warrants were exercised for 1,790,718 (D) Restricted Stock Plan The following is a summary of the Company’s restricted stock activity: SCHEDULE OF RESTRICTED STOCK ACTIVITY Restricted Stock Weighted Average Fair Value Non Vested Balance - January 1, 2022 7,250 $ 49.02 Granted 11,555 $ 39.16 Vested 6,805 $ 50.87 Forfeited/Cancelled — $ — Non Vested Balance - December 31, 2022 12,000 $ 38.48 Granted — $ — Vested 3,834 $ 38.78 Forfeited/Cancelled 6,999 $ 38.70 Non Vested Balance - December 31, 2023 1,167 $ 36.20 The Company periodically grants restricted stock awards to the Board of Directors and certain employees pursuant to the 2020 Plan. These typically are awarded by the Compensation Committee at one time and from time to time, to vest over one three years The Company recognized $ 0.1 0.4 On December 31, 2023, there was $ 0.03 |
SEGMENTS
SEGMENTS | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
SEGMENTS | 19. SEGMENTS In accordance with FASB ASC Topic 280, Segment Reporting, an operating segment is defined as a component of an enterprise for which discrete financial information is available and reviewed regularly by the chief operating decision maker (“CODM”), or decision making group, to evaluate performance and make operating decisions. The Company identified its CODM group as its two The Company’s business is organized into five 1) Homes; 2) Developed lots; 3) Entitled land; 4) Multi-family; and 5) Fee Build. The reporting segments follow the same accounting policies used in the preparation of the Company’s consolidated financial statements. The following represents revenue, cost of goods sold, and gross profit (loss) information for the Company’s reportable segments for the years ended December 31, 2023 and 2022. SCHEDULE OF REVENUE FROM SEGMENT REPORTING INFORMATION Year Ended December 31, 2023 Year Ended December 31, 2022 Revenue by segment Homes $ 9,104,000 $ 28,670,000 Developed lots 11,033,500 9,510,000 Entitled land — 7,880,000 Multi-family 38,241,400 175,900 Fee Build 877,800 9,124,000 Other — 54,400 Total Sales $ 59,256,700 $ 55,414,300 Cost of goods sold by segment Homes $ 14,061,900 $ 24,027,100 Developed lots 21,325,400 9,797,700 Entitled land 14,817,500 4,060,200 Multi-family 59,337,300 2,564,400 Fee Build 942,600 13,597,500 Other 207,200 1,819,900 Total Cost of Sales $ 110,691,900 $ 55,866,800 Gross profit (loss) by segment Homes $ (4,957,900 ) $ 4,642,900 Developed lots (10,291,900 ) (287,700 ) Entitled land (14,817,500 ) 3,819,800 Multi-family (21,095,900 ) (2,388,500 ) Fee Build (64,800 ) (4,473,500 ) Other (207,200 ) (1,765,500 ) Total Gross Profit (Loss) $ (51,435,200 ) $ (452,500 ) The following represents total assets for the Company’s reportable segments at December 31, 2023 and December 31, 2022: SCHEDULE OF TOTAL ASSETS FOR THE COMPANY’S REPORTABLE SEGMENTS December 31, 2023 December 31, 2022 Homes $ 18,786,400 $ 29,880,500 Developed lots 15,789,800 43,469,900 Entitled land 26,126,600 9,499,600 Multi-family 98,167,300 131,485,900 Fee Build 22,100 1,703,200 Unallocated (Shared) 7,858,700 20,127,300 Total Assets $ 166,750,900 $ 236,166,400 |
UNCOMPLETED CONTRACTS
UNCOMPLETED CONTRACTS | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
UNCOMPLETED CONTRACTS | 20. UNCOMPLETED CONTRACTS Costs, estimated earnings and billings on uncompleted contracts are summarized as follows at December 31, 2023 and December 31, 2022: SCHEDULE OF COSTS ESTIMATED EARNINGS AND BILLINGS ON UNCOMPLETED CONTRACTS December 31, 2023 December 31, 2022 Costs incurred on uncompleted contracts $ 20,525,800 $ 19,429,800 Estimated loss (3,702,800 ) (3,495,100 ) Costs and estimated earnings on uncompleted contracts 16,823,000 15,934,700 Billings to date 16,842,700 16,273,000 Costs and estimated earnings in excess of billings on uncompleted contracts — — Billings in excess of costs and estimated earnings on uncompleted contracts (19,700 ) (338,300 ) Provision for loss on contract (5,600 ) (159,100 ) Contract Liabilities, net $ (25,300 ) $ (497,400 ) At December 31, 2023, the contract liability was $ 0.03 0.5 0.02 1.7 |
CONDENSED COMBINED DEBTOR-IN-PO
CONDENSED COMBINED DEBTOR-IN-POSSESSION FINANCIAL INFORMATION (UNADUITED) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
CONDENSED COMBINED DEBTOR-IN-POSSESSION FINANCIAL INFORMATION (UNADUITED) | 21. CONDENSED COMBINED DEBTOR-IN-POSSESSION FINANCIAL INFORMATION (UNADUITED) The financial statements included in this Note represent the Condensed Combined Financial Statements of the Debtors only, which include Harbor Custom Development, Inc. and most of its wholly-owned subsidiaries, except for its Tanglewilde, LLC, HCDI Wyndstone, LLC, and other subsidiaries either sold or cancelled during the year. These statements reflect the results of operations, financial position and cash flows of the combined Debtors, including certain amounts and activities between Debtors and Non-Debtor subsidiaries of the Company that are eliminated in the Consolidated Financial Statements. CONDENSED COMBINED BALANCE SHEETS (Unaudited) Amounts rounded to the nearest $100 SCHEDULE OF CONDENSED COMBINED FINANCIAL STATEMENTS December 31, 2023 ASSETS Cash $ 3,263,800 Restricted Cash 597,600 Accounts Receivable, net 279,800 Notes Receivable, net 950,000 Prepaid Expense and Other Assets 1,193,800 Real Estate 112,680,200 Property and Equipment, net 1,610,500 Right of Use Assets 1,749,200 Deferred Tax Asset, net - Intercompany balance due from non-debtor subsidiaries 16,574,400 TOTAL ASSETS $ 138,899,300 LIABILITIES AND STOCKHOLDERS’ EQUITY LIABILITIES Accounts Payable and Accrued Expenses $ 3,976,900 Contract Liabilities 25,300 Deferred Revenue 29,600 Note Payable - Insurance 529,300 Revolving Line of Credit Loan 14,178,700 Construction Loans 91,913,600 Liabilities not subject to compromise $ 110,653,400 Liabilities subject to compromise 12,221,500 TOTAL LIABILITIES $ 122,874,900 STOCKHOLDERS’ EQUITY Preferred Stock $ 62,912,100 Common Stock 43,030,200 Additional Paid In Capital 3,096,800 Accumulated Deficit (93,014,700 ) TOTAL STOCKHOLDERS’ EQUITY 16,024,400 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 138,899,300 CONDENSED COMBINED STATEMENTS OF OPERATIONS (Unaudited) Amounts rounded to the nearest $100 Year Ended December 31, 2023 Sales $ 23,061,600 Cost of Sales 70,402,700 Gross Loss (47,341,100 ) Operating Expenses 8,976,300 Operating Loss (56,317,400 ) Other Income (Expense) Interest Expense (2,602,600 ) Interest Income 151,000 Management fee income from subsidiary 687,900 Equity income of non-debtor subsidiaries, net 1,118,000 Loss on Sale of Equipment (47,700 ) Other Income 51,600 Total Other Expense (641,800 ) Bankruptcy Expense 392,500 Loss Before Income Tax $ (57,351,700 ) Income Tax Expense (Benefit) 4,589,400 Net Loss $ (61,941,100 ) Preferred Dividends (7,614,800 ) Net Loss Attributable to Common Stockholders $ (69,555,900 ) CONDENSED COMBINED STATEMENTS OF CASH FLOWS (Unaudited) Amounts rounded to the nearest $100 Year Ended December 31, 2023 OPERATING ACTIVITIES Net Loss $ (61,941,100 ) Adjustments to reconcile net loss to net cash from operating activities: Depreciation 333,500 Amortization of right of use assets 176,900 Loss on sale of equipment 47,700 Provision for loss on contract 153,400 Impairment loss on real estate 44,758,000 Stock compensation 218,100 Amortization of revolver issuance costs 640,300 Net change in assets and liabilities: Accounts receivable 1,427,200 Notes receivable 3,575,300 Prepaid expenses and other assets 4,468,200 Real estate (9,741,000 ) Deferred tax asset 4,659,300 Accounts payable and accrued expenses (3,994,700 ) Contract Liabilities (625,500 ) Deferred revenue (22,400 ) Payments on right of use liability, net of incentives (224,600 ) NET CASH USED IN OPERATING ACTIVITIES (16,091,400 ) INVESTING ACTIVITIES Proceeds on the sale of equipment 218,100 NET CASH PROVIDED BY INVESTING ACTIVITIES 218,100 FINANCING ACTIVITIES Construction loans 44,050,100 Payments on construction loans (31,363,300 ) Financing fees construction loans (1,804,000 ) Payments on related party construction loans (677,300 ) Payments on revolving line of credit loan (10,821,300 ) Payments on note payable - insurance (645,300 ) Payments on equipment loans (2,057,100 ) Payments on financing leases (74,800 ) Preferred dividends (634,700 ) Proceeds from common stock offering 602,600 Proceeds from pre-funded and common warrants offering 8,335,400 Intercompany transfers from non-debtor subsidiaries 7,669,800 NET CASH PROVIDED BY FINANCING ACTIVITIES 12,580,100 NET DECREASE IN CASH AND RESTRICTED CASH (3,293,200 ) CASH AND RESTRICTED CASH AT BEGINNING OF YEAR 7,154,600 CASH AND RESTRICTED CASH AT END OF PERIOD $ 3,861,400 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 22. SUBSEQUENT EVENTS The Company received a notice of default for Meadowscape construction loan from Buchanan Mortgage Holdings, LLC dated January 23, 2024. The default rate which shall be the lessor of (a) the maximum per annum rate of interest allowed by applicable legal requirements, and (b) six percent ( 6 34,048,901 On February 2, 2024, the Company’s wholly owned subsidiary, Tanglewilde, LLC (included as a “Debtor”), also filed a Bankruptcy Petition for reorganization under Chapter 11 of the Bankruptcy Code. Tanglewilde, LLC was added into the Company’s pending Chapter 11 Case. The Chapter 11 Case is being jointly administered under the caption In re Harbor Custom Development, Inc., et al., Case No. 23-42180-MJH. On March 5, 2024, the Board of Directors approved a joint plan of liquidation and/or reorganization to sell in an orderly manner all of the real estate assets of the Company and establish new equity interests of the Company, subject to Court approval (the “Proposed Plan”). |
NATURE OF OPERATIONS AND SUMM_2
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the following subsidiaries of Harbor Custom Development, Inc. as of the reporting period ending dates as follow: SCHEDULE OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF SUBSIDIARIES Attributable Interest Names Dates of Formation December 31, December 31, Saylor View Estates, LLC* March 30, 2014 N/A N/A Belfair Apartments, LLC December 3, 2019 100 % 100 % Pacific Ridge CMS, LLC May 24, 2021 100 % 100 % Tanglewilde, LLC June 25, 2021 100 % 100 % HCDI FL CONDO LLC July 30, 2021 100 % 100 % HCDI Mira, LLC** August 31, 2021 N/A 100 % HCDI, Bridgeview LLC October 28, 2021 100 % 100 % HCDI Wyndstone, LLC September 15, 2021 100 % 100 % HCDI Semiahmoo, LLC December 17, 2021 100 % 100 % Mills Crossing, LLC*** July 21, 2022 100 % 100 % Broadmoor Ventures, LLC*** August 24, 2022 100 % 100 % GPB Holdings LLC*** October 29, 2022 100 % 100 % Winding Lane Estate LLC*** November 30, 2022 100 % 100 % Beacon Studio Farms LLC March 20, 2023 100 % N/A * Saylor View Estates, LLC was voluntarily dissolved with the State of Washington as of January 20, 2022. ** HCDI Mira, LLC was voluntarily dissolved with the State of Washington as of May 1, 2023. *** These subsidiaries no longer have any activities and not in use as they were either sold or cancelled during 2023. As of December 31, 2023 and December 31, 2022, the aggregate non-controlling interest was $ 0 |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include the accounts of Harbor Custom Development, Inc and, its wholly owned subsidiaries, and are presented using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany accounts and transactions have been eliminated in consolidation. References to the “ASC” hereafter refer to the Accounting Standards Codification established by the Financial Accounting Standards Board (“FASB”) as the source of authoritative U.S. GAAP. All numbers in the financial statements are rounded to the nearest $100, except for Earnings (Loss) per Share (“EPS”) data, and numbers in the notes to the financial statements are rounded to the nearest million. |
Reclassification | Reclassification Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. |
Use of Estimates | Use of Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used. |
Going Concern Uncertainty | Going Concern Uncertainty The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. For the year ended December 31, 2023, the Company generated a net loss of $ 68.6 8.2 3.6 140.3 |
Debtor-in Possession | Debtor-in Possession In general, as debtors-in-possession under the Bankruptcy Code, we are authorized to continue to operate as an ongoing business but may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court. Pursuant to certain motions and applications intended to limit the disruption of the bankruptcy proceedings on our operations (the First Day Motions) and other motions filed with the Bankruptcy Court, the Bankruptcy Court has authorized the Company to conduct its business activities in the ordinary course, including, among other things and subject to the terms and conditions of such orders, pay employee wages and benefits, settle certain de minimis disputes and pay vendors and suppliers in the ordinary course for all goods and services. |
Reorganization | Reorganization Effective on December 11, 2023, the Company began to apply the provisions of ASC 852, Reorganizations (“ASC 852”), which is applicable to companies under bankruptcy protection, and requires amendments to the presentation of certain financial statement line items. ASC 852 requires that the financial statements for periods including and after the filing of the Chapter 11 Case distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Expenses (including professional fees), realized gains and losses, and provisions for losses that can be directly associated with the reorganization must be reported separately as Bankruptcy items in the consolidated statements of operations beginning December 11, 2023, the date of filing of the Chapter 11 Case. For the year ended December 31, 2023, Bankruptcy expense consisted of legal and professional fees and employee compensation costs directly attributable to bankruptcy. Liabilities that may be affected by the Plan must be classified as liabilities subject to compromise at the amounts expected to be allowed by the Bankruptcy Court, even if they may be settled for lesser amounts as a result of the Plan or negotiations with creditors. The amounts currently classified as liabilities subject to compromise may be subject to future adjustments depending on Bankruptcy Court actions, further developments with respect to disputed claims, determinations of secured status of certain claims, the values of any collateral securing such claims, or other events. Any resulting changes in classification will be reflected in subsequent financial statements. If there is uncertainty about whether a secured claim is undersecured, or will be impaired under the Plan, the entire amount of the claim is included with prepetition claims in liabilities subject to compromise. (See Note 12. Liabilities Subject to Compromise.) As a result of the filing of the Chapter 11 Case on December 11, 2023, the classification of pre-petition indebtedness is generally subject to compromise pursuant to the Plan. Generally, actions to enforce or otherwise effect payment of pre-bankruptcy filing liabilities are stayed. Although payment of pre-petition claims generally is not permitted, the Bankruptcy Court granted the Debtors authority to pay certain pre-petition claims in designated categories and subject to certain terms and conditions. This relief generally was designed to preserve the value of the Debtors’ businesses and assets. Among other things, the Bankruptcy Court authorized the Debtors’ to pay certain pre-petition claims relating to employee wages and benefits, taxes and critical vendors. The Debtors are paying and intend to pay undisputed post-petition liabilities in the ordinary course of business. In addition, the Debtors may reject certain pre-petition executory contracts and unexpired leases with respect to their operations with the approval of the Bankruptcy Court. Any damages resulting from the rejection of executory contracts and unexpired leases are treated as general unsecured claims. |
Stock-Based Compensation | Stock-Based Compensation Effective November 19, 2018, the Company’s Board of Directors and stockholders approved and adopted the 2018 Incentive and Non-Statutory Stock Option Plan (the “2018 Plan”). The 2018 Plan allows the Administrator (as defined in the 2018 Plan), currently the Board of Directors, to determine the issuance of incentive stock options and non-qualified stock options to eligible employees and outside directors and consultants of the Company. The Company reserved 33,784 100,000 Effective December 3, 2020, the Company’s Board of Directors and stockholders approved and adopted the 2020 Restricted Stock Plan (the “2020 Plan”). The 2020 Plan allows the Administrator, currently the Compensation Committee, to determine the issuance of restricted stock to eligible officers, directors, and key employees. The Company reserved 35,000 100,000 The Company accounts for stock-based compensation in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 718, “Compensation – Stock Compensation” (“ASC 718”) which establishes financial accounting and reporting standards for stock-based employee and non-employee compensation. It defines a fair value-based method of accounting for an employee stock option or similar equity instrument. The Company recognizes all forms of share-based payments, including stock option grants, warrants and restricted stock grants, at their fair value on the grant date. Options and warrants are valued using a Black-Scholes option pricing model. Grants of share-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the share-based payment. The grants are amortized on a straight-line basis over the requisite service periods, which are generally the vesting period. The Company accounts for forfeitures of stock options as they occur. When forfeitures occur, the unvested portion of the previously recognized compensation cost is reversed in the period of the forfeiture. Stock-based compensation expenses are included in operating expenses in the consolidated statements of operations. For the years ended December 31, 2023 and 2022 when computing fair value of share-based payments, the Company has considered the following range of assumptions: SCHEDULE OF COMPUTING FAIR VALUE OF SHARE-BASED PAYMENTS December 31, 2023 December 31, 2022 Risk-free interest rate 4.30 % 1.73 3.54 Exercise price $ 3.73 $ 22.40 60.00 Expected life of grants in years 6.38 3.93 6.51 Expected volatility of underlying stock 43.50 % 42.34 48.13 Dividends — — The expected term is computed using the “simplified method” as permitted under the provisions of FASB ASC Topic 718-10-S99. The Company uses the simplified method to calculate the expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. The share price is the closing price on the date of grant. Expected volatility is based on the historical stock price volatility of comparable companies’ common stock as the stock does not have sufficient historical trading activity. Risk free interest rates were obtained from U.S. Treasury rates for the applicable expected terms. Repurchase of Equity Securities Share repurchases are recorded to common stock at the value of the cash consideration paid, as the Company’s common stock has no par value. These shares were being repurchased for the purpose of constructive retirement. (See Note 18. Stockholders’ Equity.) Reverse Stock Split On March 6, 2023, the Company effected a 1-for-20 reverse stock split 2023 Public Offering On May 18, 2023, the Company closed on a public offering of 160,500 1,790,718 1,951,218 8.9 117,073 The pre-funded warrants and common warrants were evaluated in accordance with FASB ASC Topics 480, Distinguishing Liabilities from Equity and 815, Derivatives and Hedging. The Company assessed whether the pre-funded warrants and common warrants are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, are mandatorily redeemable, embody obligations to repurchase shares or issue a variable number of shares, are exercisable without any contingent provisions, permit the holders to receive a fixed number of shares of common stock upon exercise, are indexed to the Company’s common stock, and are settled in shares. Based on this assessment, the pre-funded warrants and common warrants were classified as a component of permanent stockholders’ equity within additional paid-in capital and were recorded at the issuance date using a relative fair value allocation method. The Company values these equity instruments at issuance and allocated net proceeds from the sale proportionately to the common stock, the pre-funded warrants, and the common warrants. Of the net proceeds, $ 0.6 6.7 1.6 0.1 The common warrants and placement agent warrants were valued using a Black-Scholes pricing model. When computing the fair value of these warrants, the Company used 3.94 5.00 6.41 2.5 37.83 |
Earnings (Loss) Per Share (“EPS”) | Earnings (Loss) Per Share (“EPS”) EPS is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to topic 260-10-45 of the FASB ASC. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the numerator may have to adjust for any dividends and income or loss associated with potentially dilutive securities that are assumed to have resulted in the issuance of shares of common stock and the denominator may have to adjust to include the number of additional shares of common stock that would have been outstanding if the dilutive potential shares of common stock had been issued during the period to reflect the potential dilution that could occur from shares of common stock issuable through a contingent shares issuance arrangement, stock options, warrants, RSUs, or convertible preferred stock. For purposes of determining diluted earnings per common share, the treasury stock method is used for stock options, warrants, and RSUs, and the if-converted method is used for convertible preferred stock as prescribed in FASB ASC Topic 260. Because of the net loss for the year ended December 31, 2023, the impact of including these in the computation of diluted EPS was anti-dilutive. In accordance with FASB ASC Topic 260-10-45, pre-funded warrants have been included in the weighted average common shares outstanding number for the purpose of calculating EPS. The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net loss attributable to common stockholders per share of common stock for the years ended December 31, 2023 and 2022. SCHEDULE OF COMPUTATION BASIC AND DILUTED NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS PER SHARE OF COMMON STOCK Year Ended December 31, 2023 Year Ended December 31, 2022 Numerator: Net loss attributable to common stockholders $ (76,233,900 ) $ (24,681,600 ) Effect of dilutive securities: — — Diluted net loss $ (76,233,900 ) $ (24,681,600 ) Denominator: Weighted average common shares outstanding - basic 1,945,233 699,490 Dilutive securities (a): Restricted Stock Awards — — Options — — Warrants — — Convertible Preferred Stock — — Dilutive securities — — Weighted average common shares outstanding and assumed conversion – diluted 1,945,233 699,490 Basic net loss per common share $ (39.19 ) $ (35.29 ) Diluted net loss per common share $ (39.19 ) $ (35.29 ) (a) - Outstanding anti-dilutive securities excluded: Unvested restricted stock awards 1,167 12,000 Stock options 98,459 37,546 Warrants to purchase common stock (20:1) ( 1 18,447,564 18,447,564 Warrants to purchase common stock (1:1) ( 2 2,068,291 — Convertible preferred stock ( 3 3,799,799 3,799,799 Warrants to purchase convertible preferred stock ( 3 12,000 12,000 Outstanding anti-dilutive securities excluded 12,000 12,000 (1) The number of outstanding warrants, issued prior to the reverse stock split on March 6, 2023, did not change or split pursuant to the reverse stock split, but the number of shares of common stock issuable upon exercise of these warrants was adjusted based on a 1 to 0.05 (2) The number of outstanding warrants issued after the reverse stock split on March 6, 2023 are exercisable for shares of common stock on a 1 to 1 ratio. (3) Preferred stock and warrants to purchase convertible preferred stock are convertible into common stock on a 0.2778 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the Company’s short-term financial instruments approximates fair value due to the relatively short period to maturity for these instruments. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term debt securities purchased with a maturity of three months or less to be cash equivalents. There were no |
Accounts Receivable | Accounts Receivable Accounts receivables are reported at the amount the Company expects to collect from outstanding balances. The Company provides for an allowance for credit losses based upon a review of the outstanding accounts receivable, historical collection information, and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. The allowance for credit losses was $ 0.1 0 |
Notes Receivable | Notes Receivable Notes receivables are recorded at amounts due to the Company according to the contractual terms of the loan agreement. The Company’s notes receivables are for the sale of real estate properties or financing the development of the properties prior to acquisition and are each secured by the underlying improved real estate properties. The Company reviews notes receivable for credit losses whenever events or circumstances indicate that the note may not be fully recoverable. Credit losses are present when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Under ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurements of Credit Losses on Financial Instruments, the allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The credit losses are measured based on the estimated uncollectible amount less the fair value of the underlying collateral. Credit loss is recognized with an allowance against the note receivable with a corresponding charge to bad debt expense under operating expenses. The allowance for credit losses is written down when the remaining note amount is collected in full. There was no 1.2 for notes receivable In March 2022, the Company entered into a promissory note with Rocklin Winding Lane 22, LLC for $ 4.8 0.8 5.1 1.0 |
Property and Equipment and Depreciation | Property and Equipment and Depreciation Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repair charges are expensed as incurred. Depreciation is computed by the straight-line method (after considering their respective estimated residual values) over the estimated useful lives: SCHEDULE OF PROPERTY AND EQUIPMENT ESTIMATED USEFUL LIVES Construction Equipment 5 10 Leasehold Improvements The lesser of 10 Furniture and Fixtures 5 Computers 3 Vehicles 10 |
Real Estate Assets | Real Estate Assets Real estate assets are recorded at cost, except when real estate assets are acquired that meet the definition of a business combination in accordance with FASB ASC Topic 805, “Business Combinations,” where acquired assets are recorded at fair value. Interest, property taxes, insurance, and other incremental costs (including salaries) directly related to a project are capitalized during the construction period of major facilities and land improvements. The capitalization period begins when activities to develop the parcel commence and ends when the asset construction is completed and ready for rental or when the asset is sold, depending on the asset and the intended use. The capitalized costs are recorded as part of the asset to which they relate and are expensed as part of the rental costs or when the underlying asset is sold. The Company capitalized interest from related party borrowings of $ 0.4 1.1 9.8 5.7 A property is classified as “held for sale” when all of the following criteria for a plan of sale have been met: (1) Management, having the authority to approve the action, commits to a plan to sell the property; (2) The property is available for immediate sale in its present condition, subject only to terms that are usual and customary; (3) An active program to locate a buyer and other actions required to complete the plan to sell have been initiated; (4) The sale of the property is probable and is expected to be completed within one year of the contract date; (5) The property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (6) Actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. In addition to the annual assessment of potential triggering events in accordance with FASB ASC Topic 360, the Company applies a fair value-based impairment test to the net book value of assets on an annual basis and on an interim basis if certain events or circumstances indicate that an impairment loss may have occurred. As of December 31, 2023, the Company recorded impairment charges of $ 14.1 5.4 10.1 1.2 19.3 2.4 |
Revenue and Cost Recognition | Revenue and Cost Recognition FASB ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. In accordance with ASC 606, revenue is recognized when a customer obtains control of the promised good or service. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods or services. The provision of ASC 606 includes a five-step process by which the Company determines revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which the Company expects to be entitled in exchange for those goods or services. ASC 606 requires the Company to apply the following steps: (1) identify the contract with the 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, performance obligations are satisfied. A detailed breakdown of the five-step process for revenue recognitions is as follows: Homes, Developed Lots, and Entitled Land 1. Identify the contract with a customer. The Company signs an agreement with a buyer to purchase the parcel of entitled land, developed lots that have completed infrastructure, or completed homes. 2. Identify the performance obligations in the contract. Performance obligations of the Company include delivering entitled land, developed lots, and completed homes to the customer, which are required to meet certain specifications outlined in the contract. 3. Determine the transaction price. The transaction price is fixed and specified in the contract. Any subsequent change orders or price changes are required to be approved by both parties. 4. Allocation of the transaction price to performance obligations in the contract. The parcel, lots, and homes are separate performance obligations for which the specific price is in the contract. 5. Recognize revenue when (or as) the entity satisfies a performance obligation. The Company recognizes revenue when title is transferred. The Company does not have any further material performance obligations once title is transferred. Fee Build 1. Identify the contract with a customer. The Company signs an agreement with a customer to construct the required infrastructure so that houses can be developed on the lots. 2. Identify the performance obligations in the contract. Performance obligations of the Company include delivering developed lots which are required to meet certain specifications that are outlined in the contract. 3. Determine the transaction price. The transaction price is fixed and specified in the contract. Any subsequent change orders or price changes are required to be approved by both parties. 4. Allocation of the transaction price to performance obligations in the contract. The nature of the industry involves a number of uncertainties that can affect the current state of the contract. Variable considerations are the estimates made due to a contract modification in the contractual service. Change orders, claims, extras, or back charges are common in contractual services activity as a form of variable consideration. If there is going to be a contract modification, judgment by management will need to be made to determine if the variable consideration is enforceable. The following factors are considered in determining if the variable consideration is enforceable: 1. The customer’s written approval of the scope of the change order; 2. Current contract language that indicates clear and enforceable entitlement relating to the change order; 3. Separate documentation for the change order costs that are identifiable and reasonable; and 4. The Company’s experience in negotiating change orders, especially as it relates to the specific type of contract and change order being evaluated. Once the Company receives a contract, it generates a budget of projected costs for the contract based on the contract price. If the scope of the contract during the contractual period needs to be modified, the Company files a change order. The Company does not continue to perform services until the change modification is agreed upon with documentation by both the Company and the customer. There are few times that claims, extras, or back charges are included in the contract. If there are multiple performance obligations to the contract, the costs must be allocated appropriately and consistently to each performance obligation. In the Company’s experience, usually only one performance obligation is stated per contract. If there are multiple services provided for one customer, the Company has a policy of splitting out the services over multiple contracts. 5. Recognize revenue when (or as) the entity satisfies a performance obligation. The Company uses the total costs incurred on the project relative to the total expected costs to satisfy the performance obligation. The input method involves measuring the resources consumed, labor hours expended, costs incurred, time lapsed, or machine hours used relative to the total expected inputs to the satisfaction of the performance obligation. Costs incurred prior to actual contract (i.e., design, engineering, procurement of material, etc.) should not be recognized as the Company does not have control of the good/service provided. When the estimate on a contract indicates a loss or claims against costs incurred reduce the likelihood of recoverability of such costs, the Company records the entire estimated loss in the period the loss becomes known. Project contracts typically provide for a schedule of billings or invoices to the customer based on the Company’s job to date percentage of completion of specific tasks inherent in the fulfillment of its performance obligation(s). The schedules for such billings usually do not precisely match the schedule on which costs are incurred. As a result, contract revenue recognized in the statement of operations can and usually does differ from amounts that can be billed or invoiced to the customer at any point during the contract. Amounts by which cumulative contract revenue recognized on a contract as of a given date exceed cumulative billings and unbilled receivables to the customer under the contract are reflected as a current contract asset in the Company’s balance sheet. Amounts by which cumulative billings to the customer under a contract as of a given date exceed cumulative contract revenue recognized on the contract would be reflected as a current contract liability in the Company’s balance sheet. (See Note 20. Uncompleted Contracts.) Revenues from contracts with customers are summarized by category as follows for the years ended December 31, 2023 and 2022: SCHEDULE OF REVENUE FROM CONTRACTS WITH CUSTOMERS AND BASED ON THE TIMING OF SATISFACTION OF PERFORMANCE OBLIGATIONS Year Ended Year Ended December 31, 2023 December 31, 2022 Homes $ 9,104,000 $ 28,670,000 Developed Lots 11,033,500 9,510,000 Entitled Land — 7,880,000 Fee Build 877,800 9,124,000 Multi-family 38,241,400 175,900 Construction Materials — 54,400 Total Revenue $ 59,256,700 $ 55,414,300 The following table disaggregates the Company’s revenue based on the timing of satisfaction of performance obligations for the years ended December 31, 2023 and 2022: Year Ended Year Ended December 31, 2023 December 31, 2022 Performance obligations satisfied at a point in time $ 58,378,900 $ 46,290,300 Performance obligations satisfied over time 877,800 9,124,000 Total Revenue $ 59,256,700 $ 55,414,300 |
Rental Income | Rental Income Rental income attributable to residential leases has been evaluated under FASB ASC Topic 842, Leases. Rental income is recorded when due from residents and recognized monthly as it was earned. Residential apartment leases may include lease income related to such items as utility recoveries, parking rent, storage rent and pet rent that the Company treats as a single lease component because the amenities cannot be leased on their own and the timing and pattern of revenue recognition are the same. Leases entered into between a resident and a property for the rental of an apartment unit are generally six months one Rental income is included as a part of sales on the statement of operations and within the multi-family segment presented in Note 19. Segments. Rental income was $ 3.5 0.2 Security deposits related to the residential apartment leases are maintained in a checking account, separate from the Company’s operating account, in accordance with Washington State laws. These security deposits are recorded within cash and customer deposit liabilities within accounts payable and accrued expenses. |
Cost of Sales | Cost of Sales Land acquisition costs are typically allocated to each lot based on the size of the lot in relation to the size of the total project or market value in relation to total purchase price. Development costs and capitalized interest are allocated to lots sold based on the same criteria. Fee build costs are charged to cost of sales as incurred. See the revenue recognition criteria above. Costs relating to the handling of recycled construction materials and converting items into usable construction materials for resale are charged to cost of sales as incurred. Rental expenses, relating to multi-family rental revenue, are charged to cost of sales as incurred. |
Advertising | Advertising Advertising expenses, which are expensed as incurred and included in operating expenses, were $ 0.3 0.4 |
Leases | Leases The Company’s leases consist of leaseholds on office space. The Company determines if an arrangement contains a lease at inception as defined by ASC 842. In order to meet the definition of a lease under ASC 842, the contractual arrangement must convey to us the right to control the use of an identifiable asset for a period of time in exchange for consideration. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The Company is a lessor for its residential apartment leases during the development and until the property is sold. The lease agreement is evaluated to determine the accounting treatment as a finance or operating lease in accordance with the ASC 842 lease standard. Rental income attributable to residential leases is recorded when due from residents and recognized monthly as it was earned. Residential apartment leases may include lease income related to such items as utility recoveries, parking rent, storage rent and pet rent that the Company treats as a single lease component because the amenities cannot be leased on their own and the timing and pattern of revenue recognition are the same. Leases entered into between a resident and a property for the rental of an apartment unit are generally 6 months to a year, and typically renewed on a month-to-month basis after the initial term. |
Income Taxes | Income Taxes Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss, credit carryforwards, and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. Management applies the criteria established under FASB ASC Topic 740, Income Taxes, to determine whether any valuation allowances are needed each year. The Company recognizes a tax benefit for an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities based on the technical merits of the position. There are no On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law. The IRA includes a 15% Corporate Alternative Minimum Tax (“Corporate AMT”) for tax years beginning after December 31, 2022. The Company does not expect the Corporate AMT to have a material impact on its consolidated financial statements. Additionally, the IRA imposes a 1% excise tax on net repurchases of stock by certain publicly traded corporations. The excise tax is imposed on the value of the net stock repurchased or treated as repurchased. The new law will apply to stock repurchases occurring after December 31, 2022. The IRA also extended the federal tax credit for building new energy-efficient homes delivered from January 1, 2022 (retroactively) through December 31, 2032, as well as modifies and increases it starting in 2023. The federal tax credits in 2022 reflected the impact of the extension under the IRA. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements On June 16, 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurements of Credit Losses on Financial Instruments (“ASU 2016-13”), which changes the impairment model for most financial assets. This update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the update is that financial assets measured at amortized cost should be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be effected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. Pursuant to ASU No. 2019-10, Financial Instruments ‒ Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2022 for small reporting companies, non-SEC filers, and all other companies. The adoption of ASU 2016-13 did not have a material impact on the Company’s consolidated financial statements. On March 12, 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (ASC 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASC 848 contains optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform. The amendments in this update are elective and apply to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, for which an entity has applied certain optional expedients that are retained through the end of the hedging relationship. In December 2022, ASU 2022-06 was issued which was effective upon issuance, defers the sunset date of this prior guidance from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief guidance in Topic 848. The adoption of ASU 2020-04 and ASU 2022-06 did not have a material impact on the Company’s consolidated financial statements. On May 3, 2021, the FASB released ASU No. 2021-04, Compensation – Earning Per Share (Topic 260), Debt - Modifications and Extinguishments (subtopic 470-50), Compensation - Stock Compensation (Topic 718), Contracts in Entity’s Own Equity (Subtopic 815-40), Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. The FASB issued this update to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example warrants) that remain equity classified after modification or exchange. The standard is effective for fiscal years beginning after December 15, 2021. The Company adopted ASU 2021-04 on January 1, 2022, however the adoption did not have an impact on the Company’s consolidated financial statements. In July 2023, the FASB released ASU No. 2023-03, Presentation of Financial Statements (Topic 205), Income Statement—Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation—Stock Compensation (Topic 718): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 120, SEC Staff Announcement at the March 24, 2022 EITF Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280—General Revision of Regulation S-X: Income or Loss Applicable to Common Stock (SEC Update). The FASB issued this update to describe and clarify the amendments as listed above. The Company assessed the amendments related to this update, specifically for Topics 205, 505 and 718 and noted that ASU No. 2023-03 does not have an impact on the Company’s consolidated financial statements. In July 2023, the SEC adopted the final rule under SEC Release No. 33-11216, Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure, requiring disclosure of material cybersecurity incidents on Form 8-K and periodic disclosure of a registrant’s cybersecurity risk management, strategy and governance in annual reports. Regulation S-K Item 6 disclosure requirements under this rule will be effective for the Company in the fourth quarter of 2023. Incident disclosure requirements in Form 8-K will be effective for the Company on June 15, 2024. The Company has adopted this rule and included the required disclosure within Item 1C. CYBERSECURITY. The Company is still evaluating and addressing the incident disclosure requirements effective June 15, 2024. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures which requires, among other things, the following: (i) enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker and included in a segment’s reported measure of profit or loss; (ii) disclosure of the amount and description of the composition of other segment items, as defined in ASU 2023-07, by reportable segment; and (iii) reporting the disclosures about each reportable segment’s profit or loss and assets on an annual and interim basis. The provisions of ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024; early adoption is permitted. The Company is currently evaluating the impact of ASU 2023-07 on the Company’s consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09 (“ASU 2023-09”), Income Taxes (Topic 740): Improvements to Income Tax Disclosures |
Impairment of Property and Equipment | Impairment of Property and Equipment The Company reviews fixed assets for impairment whenever events or circumstances indicate that the carrying value of such assets may not be fully recoverable. Impairment is present when the sum of estimated undiscounted future cash flow expected to result from use of the assets is less than carrying value. If impairment is present, the carrying value of the impaired asset is reduced to its fair value. Fair value is determined based on discounted cash flow or appraised values, depending on the nature of the assets. As of December 31, 2023 and December 31, 2022, there were no |
NATURE OF OPERATIONS AND SUMM_3
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SCHEDULE OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF SUBSIDIARIES | The consolidated financial statements include the following subsidiaries of Harbor Custom Development, Inc. as of the reporting period ending dates as follow: SCHEDULE OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF SUBSIDIARIES Attributable Interest Names Dates of Formation December 31, December 31, Saylor View Estates, LLC* March 30, 2014 N/A N/A Belfair Apartments, LLC December 3, 2019 100 % 100 % Pacific Ridge CMS, LLC May 24, 2021 100 % 100 % Tanglewilde, LLC June 25, 2021 100 % 100 % HCDI FL CONDO LLC July 30, 2021 100 % 100 % HCDI Mira, LLC** August 31, 2021 N/A 100 % HCDI, Bridgeview LLC October 28, 2021 100 % 100 % HCDI Wyndstone, LLC September 15, 2021 100 % 100 % HCDI Semiahmoo, LLC December 17, 2021 100 % 100 % Mills Crossing, LLC*** July 21, 2022 100 % 100 % Broadmoor Ventures, LLC*** August 24, 2022 100 % 100 % GPB Holdings LLC*** October 29, 2022 100 % 100 % Winding Lane Estate LLC*** November 30, 2022 100 % 100 % Beacon Studio Farms LLC March 20, 2023 100 % N/A * Saylor View Estates, LLC was voluntarily dissolved with the State of Washington as of January 20, 2022. ** HCDI Mira, LLC was voluntarily dissolved with the State of Washington as of May 1, 2023. *** These subsidiaries no longer have any activities and not in use as they were either sold or cancelled during 2023. |
SCHEDULE OF COMPUTING FAIR VALUE OF SHARE-BASED PAYMENTS | For the years ended December 31, 2023 and 2022 when computing fair value of share-based payments, the Company has considered the following range of assumptions: SCHEDULE OF COMPUTING FAIR VALUE OF SHARE-BASED PAYMENTS December 31, 2023 December 31, 2022 Risk-free interest rate 4.30 % 1.73 3.54 Exercise price $ 3.73 $ 22.40 60.00 Expected life of grants in years 6.38 3.93 6.51 Expected volatility of underlying stock 43.50 % 42.34 48.13 Dividends — — |
SCHEDULE OF COMPUTATION BASIC AND DILUTED NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS PER SHARE OF COMMON STOCK | The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net loss attributable to common stockholders per share of common stock for the years ended December 31, 2023 and 2022. SCHEDULE OF COMPUTATION BASIC AND DILUTED NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS PER SHARE OF COMMON STOCK Year Ended December 31, 2023 Year Ended December 31, 2022 Numerator: Net loss attributable to common stockholders $ (76,233,900 ) $ (24,681,600 ) Effect of dilutive securities: — — Diluted net loss $ (76,233,900 ) $ (24,681,600 ) Denominator: Weighted average common shares outstanding - basic 1,945,233 699,490 Dilutive securities (a): Restricted Stock Awards — — Options — — Warrants — — Convertible Preferred Stock — — Dilutive securities — — Weighted average common shares outstanding and assumed conversion – diluted 1,945,233 699,490 Basic net loss per common share $ (39.19 ) $ (35.29 ) Diluted net loss per common share $ (39.19 ) $ (35.29 ) (a) - Outstanding anti-dilutive securities excluded: Unvested restricted stock awards 1,167 12,000 Stock options 98,459 37,546 Warrants to purchase common stock (20:1) ( 1 18,447,564 18,447,564 Warrants to purchase common stock (1:1) ( 2 2,068,291 — Convertible preferred stock ( 3 3,799,799 3,799,799 Warrants to purchase convertible preferred stock ( 3 12,000 12,000 Outstanding anti-dilutive securities excluded 12,000 12,000 (1) The number of outstanding warrants, issued prior to the reverse stock split on March 6, 2023, did not change or split pursuant to the reverse stock split, but the number of shares of common stock issuable upon exercise of these warrants was adjusted based on a 1 to 0.05 (2) The number of outstanding warrants issued after the reverse stock split on March 6, 2023 are exercisable for shares of common stock on a 1 to 1 ratio. (3) Preferred stock and warrants to purchase convertible preferred stock are convertible into common stock on a 0.2778 |
SCHEDULE OF PROPERTY AND EQUIPMENT ESTIMATED USEFUL LIVES | SCHEDULE OF PROPERTY AND EQUIPMENT ESTIMATED USEFUL LIVES Construction Equipment 5 10 Leasehold Improvements The lesser of 10 Furniture and Fixtures 5 Computers 3 Vehicles 10 |
SCHEDULE OF REVENUE FROM CONTRACTS WITH CUSTOMERS AND BASED ON THE TIMING OF SATISFACTION OF PERFORMANCE OBLIGATIONS | Revenues from contracts with customers are summarized by category as follows for the years ended December 31, 2023 and 2022: SCHEDULE OF REVENUE FROM CONTRACTS WITH CUSTOMERS AND BASED ON THE TIMING OF SATISFACTION OF PERFORMANCE OBLIGATIONS Year Ended Year Ended December 31, 2023 December 31, 2022 Homes $ 9,104,000 $ 28,670,000 Developed Lots 11,033,500 9,510,000 Entitled Land — 7,880,000 Fee Build 877,800 9,124,000 Multi-family 38,241,400 175,900 Construction Materials — 54,400 Total Revenue $ 59,256,700 $ 55,414,300 The following table disaggregates the Company’s revenue based on the timing of satisfaction of performance obligations for the years ended December 31, 2023 and 2022: Year Ended Year Ended December 31, 2023 December 31, 2022 Performance obligations satisfied at a point in time $ 58,378,900 $ 46,290,300 Performance obligations satisfied over time 877,800 9,124,000 Total Revenue $ 59,256,700 $ 55,414,300 |
NOTES RECEIVABLE (Tables)
NOTES RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
SCHEDULE OF NOTES RECEIVABLES, NET OF VALUATION ALLOWANCE | The details of notes receivables, net of valuation allowance are as follows: SCHEDULE OF NOTES RECEIVABLES, NET OF VALUATION ALLOWANCE December 31, 2023 December 31, 2022 Broadmoor Commons LLC $ — $ 1,000,300 Modern Homestead LLC 950,000 1,445,000 Noffke Horizon View, LLC — 2,080,000 Total Notes Receivable, Net $ 950,000 $ 4,525,300 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Property and equipment stated at cost, less accumulated depreciation and amortization, consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT December 31, 2023 December 31, 2022 Machinery and Equipment $ 44,000 $ 505,300 Vehicles — 26,200 Furniture and Fixtures 692,100 695,600 Leasehold Improvements 1,467,100 1,524,000 Total Fixed Assets 2,203,200 2,751,100 Less Accumulated Depreciation (592,700 ) (461,600 ) Fixed Assets, Net $ 1,610,500 $ 2,289,500 |
REAL ESTATE (Tables)
REAL ESTATE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Real Estate [Abstract] | |
SCHEDULE OF REAL ESTATE | Real Estate consisted of the following components: SCHEDULE OF REAL ESTATE December 31, 2023 December 31, 2022 Land Held for Development $ 31,410,100 $ 47,166,700 Construction in Progress 96,205,900 123,927,300 Held for Sale 29,122,400 34,384,200 Total Real Estate $ 156,738,400 $ 205,478,200 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | Accounts payable and accrued liabilities consisted of the following: SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES December 31, 2023 December 31, 2022 Trade Accounts Payable $ 6,599,600 $ 11,472,100 Retainage Payable 65,500 1,130,300 Accrued Compensation, Bonuses, and Benefits 143,200 384,700 Accrued Quarry Reclamation Costs 10,000 76,200 Other Accruals 1,179,500 1,027,400 Pre-petition Liabilities Subject to Compromise (2,051,900 ) — Total Accounts Payable and Accrued Expenses Not Subject to Compromise $ 5,945,900 $ 14,090,700 |
EQUIPMENT LOANS (Tables)
EQUIPMENT LOANS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Disclosure Equipment Loans Abstract | |
SCHEDULE OF EQUIPMENT LOANS | Equipment loans consists of the following: SCHEDULE OF EQUIPMENT LOANS December 31, 2023 December 31, 2022 Various notes payable to banks and financial institutions with interest rates varying from 0.00 13.89 400 10,500 $ — $ 2,057,100 Book value of collateralized equipment: $ — $ 11,800 |
LIABILITIES SUBJECT TO COMPRO_2
LIABILITIES SUBJECT TO COMPROMISE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Liabilities Subject To Compromise | |
SCHEDULE OF LIABILITIES SUBJECT TO COMPROMISE | Liabilities subject to compromise as part of the Chapter 11 Case consisted of the following: SCHEDULE OF LIABILITIES SUBJECT TO COMPROMISE December 31, 2023 Pre-petition Accounts Payable and Accrued Expenses $ 2,051,900 Dividends Payable 7,614,800 Right of Use Liabilities 2,554,800 Pre-petition Liabilities Subject to Compromise $ 12,221,500 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
SCHEDULE OF COMPONENTS OF LEASE EXPENSE | The components of lease expense were as follows: SCHEDULE OF COMPONENTS OF LEASE EXPENSE Year Ended Year Ended December 31, 2023 December 31, 2022 Finance leases expense Depreciation of assets $ 8,900 $ 76,000 Interest on lease liabilities 2,000 17,700 Operating lease expense 286,800 677,400 Total net lease cost $ 297,700 $ 771,100 |
SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES | Supplemental balance sheet information related to leases was as follows: SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES December 31, 2023 December 31, 2022 Operating leases: Operating lease ROU assets $ 1,749,200 $ 1,926,100 Total ROU Liabilities $ 2,554,800 $ 2,779,400 Finance leases: Property and equipment, at cost $ — $ 178,800 Less: Accumulated depreciation — 79,100 Property and equipment, net $ — $ 99,700 Total Finance lease liabilities $ — $ 154,500 |
SCHEDULE OF CASH FLOW AND OTHER INFORMATION RELATED TO LEASES | Supplemental cash flow and other information related to leases was as follows: SCHEDULE OF CASH FLOW AND OTHER INFORMATION RELATED TO LEASES Year Ended Year Ended December 31, 2023 December 31, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases - lease payments $ (224,600 ) $ (358,100 ) Operating cash flows from operating leases - lease incentives — 613,900 Financing cash flows from finance leases - lease payments (74,800 ) (104,100 ) Assets obtained in exchange for lease liabilities: Operating leases $ — $ — Finance leases — 110,000 Weighted average remaining lease term (in years): Operating leases 8.25 9.2 Finance leases — 0.9 Weighted average discount rate: Operating leases 4.0 % 4.0 % Finance leases — 7.5 % |
SCHEDULE OF MINIMUM LEASE PAYMENTS UNDER THE TERMS OF OPERATING LEASES | The minimum lease payments under the terms of the operating leases are as follows for the years ended December 31: SCHEDULE OF MINIMUM LEASE PAYMENTS UNDER THE TERMS OF OPERATING LEASES Operating Leases 2024 $ 316,300 2025 325,700 2026 335,400 2027 345,500 2028 355,800 Thereafter 1,365,900 Total lease payments $ 3,044,600 Less amount of discount/interest (489,800 ) Operating leases $ 2,554,800 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF COMPONENTS OF NET DEFERRED TAX ASSETS AND LIABILITIES | The components of net deferred tax assets and liabilities at December 31, 2023 and 2022 are set forth below: SCHEDULE OF COMPONENTS OF NET DEFERRED TAX ASSETS AND LIABILITIES December 31, 2023 December 31, 2022 Deferred tax assets: Federal NOL carryforwards $ 6,790,800 $ 1,905,900 UNICAP 783,700 1,865,900 Lease liability 561,400 586,300 Stock based compensation 7,400 15,400 Investments — 200 Impairment loss on note receivable and real estate and loss provision on fee build contracts 10,388,700 1,046,700 Sec. 163(j) interest deduction carryforwards 823,100 273,100 Tax Credits 72,000 72,000 Charitable Contribution Carryover 2,000 — Bad Debt Expense 263,700 — Advanced Rent Payments 11,000 — Total assets $ 19,703,800 $ 5,765,500 Deferred tax liabilities: Property and equipment $ 290,200 $ 480,200 Right of use assets 538,000 553,800 Sec. 481(a) adjustments 37,600 72,200 Total liabilities $ 865,800 $ 1,106,200 Subtotal deferred tax assets $ 18,838,000 $ 4,659,300 Valuation allowance (18,838,000 ) — Net deferred tax assets $ — $ 4,659,300 |
SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) | The components of income tax expense (benefit) and the effective tax rates for the years ended December 31, 2023 SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) Year Ended Year Ended December 31, 2023 December 31, 2022 Current: Federal $ (107,500 ) $ (456,300 ) State 28,700 8,400 Total Current (78,800 ) (447,900 ) Deferred: Federal (13,335,700 ) (3,989,100 ) State (834,100 ) (21,200 ) Total Deferred (14,169,800 ) (4,010,300 ) Valuation Allowance 18,838,000 — Total Income Tax Expense (Benefit) $ 4,589,400 $ (4,458,200 ) |
SCHEDULE OF EXPECTED TAX RATE | The expected tax rate differs from the U.S. Federal statutory rate as follows: SCHEDULE OF EXPECTED TAX RATE 2023 2022 US federal statutory rate 21.0 % 21.0 % Change in federal valuation allowance (29.4 )% — % Accrual to return changes and other adjustments to deferred balances (0.1 )% (0.5 )% Tax credits 0.1 % 0.3 % Incentive stock options — % (0.1 )% State taxes 1.2 % 0.1 % Change in tax rate — % 0.1 % Other — % — % Effective Tax Rate (7.2 )% 20.9 % |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
SCHEDULE OF STOCK OPTION ACTIVITY | The following is a summary of the Company’s option activity: SCHEDULE OF STOCK OPTION ACTIVITY Options Weighted Average Exercise Price Outstanding – January 1, 2022 23,163 $ 56.43 Exercisable – January 1, 2022 17,186 $ 55.47 Granted 19,600 $ 23.79 Exercised (1,081 ) $ 8.00 Forfeited/Cancelled (4,135 ) $ 34.48 Outstanding – December 31, 2022 37,546 $ 41.51 Exercisable – December 31, 2022 19,696 $ 55.55 Granted 140,000 $ 3.73 Exercised — $ — Forfeited/Cancelled (79,087 ) $ 8.97 Outstanding – December 31, 2023 98,459 $ 13.93 Exercisable – December 31, 2023 17,543 $ 54.67 |
SCHEDULE OF STOCK OPTION OUTSTANDING AND EXERCISABLE | SCHEDULE OF STOCK OPTION OUTSTANDING AND EXERCISABLE Options Outstanding Options Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 3.73 130.00 98,459 9.00 $ 13.93 17,543 $ 54.67 |
SCHEDULE OF COMMON STOCK WARRANT ACTIVITY | The following is a summary of the Company’s common stock warrant activity, for warrants that are exercisable at a 20 to 1 ratio to common stock: SCHEDULE OF COMMON STOCK WARRANT ACTIVITY Warrants* Weighted Average Exercise Price Outstanding – January 1, 2022 18,486,859 $ 3.46 Exercisable – January 1, 2022 18,486,859 $ 3.46 Granted 100,000 $ 3.00 Exercised (139,295 ) $ 2.97 Forfeited/Cancelled — $ — Outstanding – December 31, 2022 18,447,564 $ 3.47 Exercisable – December 31, 2022 18,380,897 $ 3.47 Granted — $ — Exercised — $ — Forfeited/Cancelled — $ — Outstanding – December 31, 2023 18,447,564 $ 3.47 Exercisable – December 31, 2023 18,414,231 $ 3.47 * As a result of the Reverse Stock Split, each warrant now entitles the holder to purchase one-twentieth (0.05) of one share of common stock. The following is a summary of the Company’s common stock warrant activity, for warrants that are exercisable at a 1 to 1 ratio to common stock: Warrants Weighted Average Exercise Price Outstanding – January 1, 2023 — $ — Exercisable – January 1, 2023 — $ — Granted 2,068,291 $ 5.08 Exercised — $ — Forfeited/Cancelled — $ — Outstanding – December 31, 2023 2,068,291 $ 5.08 Exercisable – December 31, 2023 2,068,291 $ 5.08 The following is a summary of the Company’s preferred stock warrant activity: Warrants Weighted Average Exercise Price Outstanding – January 1, 2022 12,000 $ 24.97 Exercisable – January 1, 2022 12,000 $ 24.97 Granted — $ — Exercised — $ — Forfeited/Cancelled — $ — Outstanding – December 31, 2022 12,000 $ 24.97 Exercisable – December 31, 2022 12,000 $ 24.97 Granted — $ — Exercised — $ — Forfeited/Cancelled — $ — Outstanding – December 31, 2023 12,000 $ 24.97 Exercisable – December 31, 2023 12,000 $ 24.97 The following is a summary of the Pre-Funded Warrant activity: Pre-Funded Warrants Weighted Average Exercise Price Outstanding – January 1, 2023 — $ — Exercisable – January 1, 2023 — $ — Granted 1,790,718 $ 0.0001 Exercised (1,790,718 ) $ 0.0001 Forfeited/Cancelled — $ — Outstanding – December 31, 2023 — $ — Exercisable – December 31, 2023 — $ — |
SCHEDULE OF WARRANT OUTSTANDING AND EXERCISABLE | SCHEDULE OF WARRANT OUTSTANDING AND EXERCISABLE Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.40 7.50 18,447,564 2.68 $ 3.47 18,414,231 $ 3.47 Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 5.00 6.41 2,068,291 4.38 $ 5.08 2,068,291 $ 5.08 Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 24.97 12,000 2.44 $ 24.97 12,000 $ 24.97 |
SCHEDULE OF RESTRICTED STOCK ACTIVITY | The following is a summary of the Company’s restricted stock activity: SCHEDULE OF RESTRICTED STOCK ACTIVITY Restricted Stock Weighted Average Fair Value Non Vested Balance - January 1, 2022 7,250 $ 49.02 Granted 11,555 $ 39.16 Vested 6,805 $ 50.87 Forfeited/Cancelled — $ — Non Vested Balance - December 31, 2022 12,000 $ 38.48 Granted — $ — Vested 3,834 $ 38.78 Forfeited/Cancelled 6,999 $ 38.70 Non Vested Balance - December 31, 2023 1,167 $ 36.20 |
SEGMENTS (Tables)
SEGMENTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
SCHEDULE OF REVENUE FROM SEGMENT REPORTING INFORMATION | SCHEDULE OF REVENUE FROM SEGMENT REPORTING INFORMATION Year Ended December 31, 2023 Year Ended December 31, 2022 Revenue by segment Homes $ 9,104,000 $ 28,670,000 Developed lots 11,033,500 9,510,000 Entitled land — 7,880,000 Multi-family 38,241,400 175,900 Fee Build 877,800 9,124,000 Other — 54,400 Total Sales $ 59,256,700 $ 55,414,300 Cost of goods sold by segment Homes $ 14,061,900 $ 24,027,100 Developed lots 21,325,400 9,797,700 Entitled land 14,817,500 4,060,200 Multi-family 59,337,300 2,564,400 Fee Build 942,600 13,597,500 Other 207,200 1,819,900 Total Cost of Sales $ 110,691,900 $ 55,866,800 Gross profit (loss) by segment Homes $ (4,957,900 ) $ 4,642,900 Developed lots (10,291,900 ) (287,700 ) Entitled land (14,817,500 ) 3,819,800 Multi-family (21,095,900 ) (2,388,500 ) Fee Build (64,800 ) (4,473,500 ) Other (207,200 ) (1,765,500 ) Total Gross Profit (Loss) $ (51,435,200 ) $ (452,500 ) |
SCHEDULE OF TOTAL ASSETS FOR THE COMPANY’S REPORTABLE SEGMENTS | SCHEDULE OF TOTAL ASSETS FOR THE COMPANY’S REPORTABLE SEGMENTS December 31, 2023 December 31, 2022 Homes $ 18,786,400 $ 29,880,500 Developed lots 15,789,800 43,469,900 Entitled land 26,126,600 9,499,600 Multi-family 98,167,300 131,485,900 Fee Build 22,100 1,703,200 Unallocated (Shared) 7,858,700 20,127,300 Total Assets $ 166,750,900 $ 236,166,400 |
UNCOMPLETED CONTRACTS (Tables)
UNCOMPLETED CONTRACTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
SCHEDULE OF COSTS ESTIMATED EARNINGS AND BILLINGS ON UNCOMPLETED CONTRACTS | SCHEDULE OF COSTS ESTIMATED EARNINGS AND BILLINGS ON UNCOMPLETED CONTRACTS December 31, 2023 December 31, 2022 Costs incurred on uncompleted contracts $ 20,525,800 $ 19,429,800 Estimated loss (3,702,800 ) (3,495,100 ) Costs and estimated earnings on uncompleted contracts 16,823,000 15,934,700 Billings to date 16,842,700 16,273,000 Costs and estimated earnings in excess of billings on uncompleted contracts — — Billings in excess of costs and estimated earnings on uncompleted contracts (19,700 ) (338,300 ) Provision for loss on contract (5,600 ) (159,100 ) Contract Liabilities, net $ (25,300 ) $ (497,400 ) |
CONDENSED COMBINED DEBTOR-IN-_2
CONDENSED COMBINED DEBTOR-IN-POSSESSION FINANCIAL INFORMATION (UNADUITED) (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
SCHEDULE OF CONDENSED COMBINED FINANCIAL STATEMENTS | SCHEDULE OF CONDENSED COMBINED FINANCIAL STATEMENTS December 31, 2023 ASSETS Cash $ 3,263,800 Restricted Cash 597,600 Accounts Receivable, net 279,800 Notes Receivable, net 950,000 Prepaid Expense and Other Assets 1,193,800 Real Estate 112,680,200 Property and Equipment, net 1,610,500 Right of Use Assets 1,749,200 Deferred Tax Asset, net - Intercompany balance due from non-debtor subsidiaries 16,574,400 TOTAL ASSETS $ 138,899,300 LIABILITIES AND STOCKHOLDERS’ EQUITY LIABILITIES Accounts Payable and Accrued Expenses $ 3,976,900 Contract Liabilities 25,300 Deferred Revenue 29,600 Note Payable - Insurance 529,300 Revolving Line of Credit Loan 14,178,700 Construction Loans 91,913,600 Liabilities not subject to compromise $ 110,653,400 Liabilities subject to compromise 12,221,500 TOTAL LIABILITIES $ 122,874,900 STOCKHOLDERS’ EQUITY Preferred Stock $ 62,912,100 Common Stock 43,030,200 Additional Paid In Capital 3,096,800 Accumulated Deficit (93,014,700 ) TOTAL STOCKHOLDERS’ EQUITY 16,024,400 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 138,899,300 CONDENSED COMBINED STATEMENTS OF OPERATIONS (Unaudited) Amounts rounded to the nearest $100 Year Ended December 31, 2023 Sales $ 23,061,600 Cost of Sales 70,402,700 Gross Loss (47,341,100 ) Operating Expenses 8,976,300 Operating Loss (56,317,400 ) Other Income (Expense) Interest Expense (2,602,600 ) Interest Income 151,000 Management fee income from subsidiary 687,900 Equity income of non-debtor subsidiaries, net 1,118,000 Loss on Sale of Equipment (47,700 ) Other Income 51,600 Total Other Expense (641,800 ) Bankruptcy Expense 392,500 Loss Before Income Tax $ (57,351,700 ) Income Tax Expense (Benefit) 4,589,400 Net Loss $ (61,941,100 ) Preferred Dividends (7,614,800 ) Net Loss Attributable to Common Stockholders $ (69,555,900 ) CONDENSED COMBINED STATEMENTS OF CASH FLOWS (Unaudited) Amounts rounded to the nearest $100 Year Ended December 31, 2023 OPERATING ACTIVITIES Net Loss $ (61,941,100 ) Adjustments to reconcile net loss to net cash from operating activities: Depreciation 333,500 Amortization of right of use assets 176,900 Loss on sale of equipment 47,700 Provision for loss on contract 153,400 Impairment loss on real estate 44,758,000 Stock compensation 218,100 Amortization of revolver issuance costs 640,300 Net change in assets and liabilities: Accounts receivable 1,427,200 Notes receivable 3,575,300 Prepaid expenses and other assets 4,468,200 Real estate (9,741,000 ) Deferred tax asset 4,659,300 Accounts payable and accrued expenses (3,994,700 ) Contract Liabilities (625,500 ) Deferred revenue (22,400 ) Payments on right of use liability, net of incentives (224,600 ) NET CASH USED IN OPERATING ACTIVITIES (16,091,400 ) INVESTING ACTIVITIES Proceeds on the sale of equipment 218,100 NET CASH PROVIDED BY INVESTING ACTIVITIES 218,100 FINANCING ACTIVITIES Construction loans 44,050,100 Payments on construction loans (31,363,300 ) Financing fees construction loans (1,804,000 ) Payments on related party construction loans (677,300 ) Payments on revolving line of credit loan (10,821,300 ) Payments on note payable - insurance (645,300 ) Payments on equipment loans (2,057,100 ) Payments on financing leases (74,800 ) Preferred dividends (634,700 ) Proceeds from common stock offering 602,600 Proceeds from pre-funded and common warrants offering 8,335,400 Intercompany transfers from non-debtor subsidiaries 7,669,800 NET CASH PROVIDED BY FINANCING ACTIVITIES 12,580,100 NET DECREASE IN CASH AND RESTRICTED CASH (3,293,200 ) CASH AND RESTRICTED CASH AT BEGINNING OF YEAR 7,154,600 CASH AND RESTRICTED CASH AT END OF PERIOD $ 3,861,400 |
SCHEDULE OF CONDENSED CONSOLIDA
SCHEDULE OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF SUBSIDIARIES (Details) | Dec. 31, 2023 | Dec. 31, 2022 | |
Belfair Apartments, LLC [Member] | |||
Attributable Interest | 100% | 100% | |
Pacific Ridge CMS, LLC [Member] | |||
Attributable Interest | 100% | 100% | |
Tanglewilde, LLC [Member] | |||
Attributable Interest | 100% | 100% | |
HCDI FL CONDO LLC [Member] | |||
Attributable Interest | 100% | 100% | |
HCDI Mira, LLC [Member] | |||
Attributable Interest | [1] | 100% | |
HCDI, Bridgeview LLC [Member] | |||
Attributable Interest | 100% | 100% | |
HCDI Wyndstone, LLC [Member] | |||
Attributable Interest | 100% | 100% | |
HCDI Semiahmoo, LLC [Member] | |||
Attributable Interest | 100% | 100% | |
Mills Crossing, LLC [Member] | |||
Attributable Interest | [2] | 100% | 100% |
Broadmoor Ventures, LLC [Member] | |||
Attributable Interest | [2] | 100% | 100% |
GPB Holdings LLC [Member] | |||
Attributable Interest | [2] | 100% | 100% |
Winding Lane Estate LLC [Member] | |||
Attributable Interest | [2] | 100% | 100% |
Beacon Studio Farms LLC [Member] | |||
Attributable Interest | 100% | ||
[1]HCDI Mira, LLC was voluntarily dissolved with the State of Washington as of May 1, 2023.[2]These subsidiaries no longer have any activities and not in use as they were either sold or cancelled during 2023. |
SCHEDULE OF COMPUTING FAIR VALU
SCHEDULE OF COMPUTING FAIR VALUE OF SHARE-BASED PAYMENTS (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Risk-free interest rate | 4.30% | |
Risk-free interest rate, minimum | 1.73% | |
Risk-free interest rate, maximum | 3.54% | |
Exercise price | $ 3.73 | |
Expected life of grants in years | 6 years 4 months 17 days | |
Expected volatility of underlying stock | 43.50% | |
Expected volatility of underlying stock, minimum | 42.34% | |
Expected volatility of underlying stock, maximum | 48.13% | |
Dividends | ||
Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Exercise price | $ 22.40 | |
Expected life of grants in years | 3 years 11 months 4 days | |
Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Exercise price | $ 60 | |
Expected life of grants in years | 6 years 6 months 3 days |
SCHEDULE OF COMPUTATION BASIC A
SCHEDULE OF COMPUTATION BASIC AND DILUTED NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS PER SHARE OF COMMON STOCK (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Net loss attributable to common stockholders | $ (76,233,900) | $ (24,681,600) | |
Effect of dilutive securities: | |||
Diluted net loss | $ (76,233,900) | $ (24,681,600) | |
Weighted average common shares outstanding - basic | 1,945,233 | 699,490 | |
Weighted average common shares outstanding and assumed conversion – diluted | 1,945,233 | 699,490 | |
Basic net loss per common share | $ (39.19) | $ (35.29) | |
Diluted net loss per common share | $ (39.19) | $ (35.29) | |
Restricted Stock [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Dilutive securities | |||
Share-Based Payment Arrangement, Option [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Dilutive securities | |||
Outstanding anti-dilutive securities excluded | 98,459 | 37,546 | |
Warrant [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Dilutive securities | |||
Convertible Preferred Stock [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Dilutive securities | |||
Outstanding anti-dilutive securities excluded | [1] | 3,799,799 | 3,799,799 |
Restricted Stock Units (RSUs) [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Outstanding anti-dilutive securities excluded | 1,167 | 12,000 | |
Warrants to Purchase Common Stock (20:1) [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Outstanding anti-dilutive securities excluded | [2] | 18,447,564 | 18,447,564 |
Warrants to Purchase Common Stock (1:1) [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Outstanding anti-dilutive securities excluded | [3] | 2,068,291 | |
Warrants to Purchase Convertible Preferred Stock [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Outstanding anti-dilutive securities excluded | [1] | 12,000 | 12,000 |
[1]Preferred stock and warrants to purchase convertible preferred stock are convertible into common stock on a 0.2778 0.05 |
SCHEDULE OF COMPUTATION BASIC_2
SCHEDULE OF COMPUTATION BASIC AND DILUTED NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS PER SHARE OF COMMON STOCK (Details) (Parenthetical) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Stock split, conversion ratio | 0.05 |
Convertible conversion ratio | 0.2778 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT ESTIMATED USEFUL LIVES (Details) | Dec. 31, 2023 |
Other Machinery and Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Other Machinery and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 10 years |
Leaseholds and Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 10 years |
Property, Plant and Equipment, Depreciation Method [Extensible Enumeration] | Estimated useful lives |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Computer Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 10 years |
SCHEDULE OF REVENUE FROM CONTRA
SCHEDULE OF REVENUE FROM CONTRACTS WITH CUSTOMERS AND BASED ON THE TIMING OF SATISFACTION OF PERFORMANCE OBLIGATIONS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Product Information [Line Items] | ||
Total Revenue | $ 59,256,700 | $ 55,414,300 |
Transferred at Point in Time [Member] | ||
Product Information [Line Items] | ||
Total Revenue | 58,378,900 | 46,290,300 |
Transferred over Time [Member] | ||
Product Information [Line Items] | ||
Total Revenue | 877,800 | 9,124,000 |
Homes [Member] | ||
Product Information [Line Items] | ||
Total Revenue | 9,104,000 | 28,670,000 |
Developed Lots [Member] | ||
Product Information [Line Items] | ||
Total Revenue | 11,033,500 | 9,510,000 |
Entitled Land [Member] | ||
Product Information [Line Items] | ||
Total Revenue | 7,880,000 | |
Fee Build [Member] | ||
Product Information [Line Items] | ||
Total Revenue | 877,800 | 9,124,000 |
Multi-family [Member] | ||
Product Information [Line Items] | ||
Total Revenue | 38,241,400 | 175,900 |
Construction Materials [Member] | ||
Product Information [Line Items] | ||
Total Revenue | $ 54,400 |
NATURE OF OPERATIONS AND SUMM_4
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 12 Months Ended | ||||||||||
May 18, 2023 USD ($) $ / shares shares | Mar. 06, 2023 | Feb. 27, 2023 | Feb. 17, 2023 | Jun. 01, 2022 shares | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 03, 2020 shares | Nov. 19, 2018 shares | |
Property, Plant and Equipment [Line Items] | |||||||||||
Aggregate non-controlling interest | $ 8,478,000 | $ 75,555,900 | $ 99,737,800 | ||||||||
Net loss | 68,619,100 | 16,922,200 | |||||||||
Cash flows from operations | 8,155,700 | 93,873,700 | |||||||||
Cash balance | 3,574,500 | 9,665,300 | |||||||||
Substantial debt | 140,300,000 | ||||||||||
Reverse stock split | 1-for-20 reverse stock split | Reverse Stock Split at a ratio of 1-for-20 | 1-for-3 and 1-for-25 | ||||||||
Cash equivalents | 0 | 0 | |||||||||
Allowance for credit losses | 100,000 | 0 | |||||||||
Allowance for credit losses | 0 | 1,200,000 | |||||||||
Impairment charges | 48,825,700 | 3,602,600 | |||||||||
Rental income | 3,500,000 | 200,000 | |||||||||
Advertising expense | 300,000 | 400,000 | |||||||||
Uncertain tax positions | 0 | 0 | |||||||||
Impairment losses recognized for fixed assets | 0 | 0 | |||||||||
Land [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Impairment charges | 14,100,000 | ||||||||||
Homes [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Impairment charges | 5,400,000 | ||||||||||
Developed Lots [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Impairment charges | 10,100,000 | 1,200,000 | |||||||||
Multifamily [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Impairment charges | 19,300,000 | 2,400,000 | |||||||||
Related Party [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Capitalized interest | 400,000 | 1,100,000 | |||||||||
Loans Payable [Member] | Rocklin Winding Lane 22, LLC [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Real estate asset | 1,000,000 | ||||||||||
Rocklin Winding Lane 22, LLC [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Financing receivable, face amount | $ 4,800,000 | ||||||||||
Allowance for credit losses | $ 800,000 | ||||||||||
Recorded for a fair value | 5,100,000 | ||||||||||
Third Party [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Capitalized interest | $ 9,800,000 | 5,700,000 | |||||||||
Minimum [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Lease term | 6 months | ||||||||||
Maximum [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Lease term | 1 year | ||||||||||
Measurement Input, Risk Free Interest Rate [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Warrants of Expected volatility | 3.94 | ||||||||||
Measurement Input, Exercise Price [Member] | Minimum [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Warrants of Expected volatility | $ / shares | 5 | ||||||||||
Measurement Input, Exercise Price [Member] | Maximum [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Warrants of Expected volatility | $ / shares | 6.41 | ||||||||||
Measurement Input, Expected Term [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Warrants of expected life | 2 years 6 months | ||||||||||
Measurement Input, Price Volatility [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Warrants of Expected volatility | 37.83 | ||||||||||
Public Stock Offering [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Net proceeds | $ 8,900,000 | ||||||||||
Public Stock Offering [Member] | Pre-Funded Warrants [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Number of shares public offering | shares | 1,790,718 | ||||||||||
Net proceeds | $ 6,700,000 | ||||||||||
Public Stock Offering [Member] | Common Stock Offering Warrants [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Number of shares public offering | shares | 1,951,218 | ||||||||||
Net proceeds | $ 1,600,000 | ||||||||||
Public Stock Offering [Member] | Placement Agent Warrants [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Net proceeds | $ 100,000 | ||||||||||
Over-Allotment Option [Member] | Pre-Funded Warrants [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Number of shares public offering | shares | 117,073 | ||||||||||
The 2018 Plan [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Common stock for issuance of reserved shares | shares | 33,784 | ||||||||||
Number of shares authorized of common stock | shares | 100,000 | ||||||||||
The 2020 Plan [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Common stock for issuance of reserved shares | shares | 35,000 | ||||||||||
Number of shares authorized of common stock | shares | 100,000 | ||||||||||
Noncontrolling Interest [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Aggregate non-controlling interest | (1,291,600) | ||||||||||
Net loss | 500 | ||||||||||
Common Stock [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Aggregate non-controlling interest | $ 43,030,200 | $ 35,704,700 | $ 32,122,700 | ||||||||
Common Stock [Member] | Public Stock Offering [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Number of shares public offering | shares | 160,500 | ||||||||||
Net proceeds | $ 600,000 |
CONCENTRATIONS (Details Narrati
CONCENTRATIONS (Details Narrative) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Concentration Risk [Line Items] | ||
Uninsured cash balances | $ 2.6 | $ 8.1 |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Customer One [Member] | Homes [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10% | |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Customer One [Member] | Developed Lots [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 11% | 59% |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Customer One [Member] | Entitled Land [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 57% | |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Customer One [Member] | Fee Build [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 100% | 100% |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Customer One [Member] | Multi-Family Segment [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 54% | |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Customer Two [Member] | Homes [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10% | |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Customer Two [Member] | Developed Lots [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10% | 25% |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Customer Two [Member] | Entitled Land [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 43% | |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Customer Two [Member] | Multi-Family Segment [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 37% | |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Customer Three [Member] | Homes [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10% | |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Customer Four [Member] | Homes [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10% | |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Customer Five [Member] | Homes [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10% | |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Customer Six [Member] | Homes [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10% |
SCHEDULE OF NOTES RECEIVABLES,
SCHEDULE OF NOTES RECEIVABLES, NET OF VALUATION ALLOWANCE (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Notes Receivable, Net | $ 950,000 | $ 4,525,300 |
Broadmoor Commons LLC [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Notes Receivable, Net | 1,000,300 | |
Modern Homestead LLC [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Notes Receivable, Net | 950,000 | 1,445,000 |
Noffke Horizon View, LLC [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Notes Receivable, Net | $ 2,080,000 |
NOTES RECEIVABLE (Details Narra
NOTES RECEIVABLE (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Outstanding balance of notes receivable | $ 950,000 | $ 4,525,300 | |
Accrues interest at an annual rate | 9% | ||
Interest income | $ 200,000 | 500,000 | |
Accrued interest income receivable | 200,000 | 200,000 | |
Noffke Horizon View, LLC [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Outstanding balance of notes receivable | $ 2,080,000 | ||
Payment in due amount | $ 3,300,000 | ||
Noffke Horizon View, LLC [Member] | Loans Payable [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Reduced amount | $ 2,100,000 |
SCHEDULE OF PROPERTY AND EQUI_2
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Total Fixed Assets | $ 2,203,200 | $ 2,751,100 |
Less Accumulated Depreciation | (592,700) | (461,600) |
Fixed Assets, Net | 1,610,500 | 2,289,500 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Fixed Assets | 44,000 | 505,300 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Fixed Assets | 26,200 | |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Fixed Assets | 692,100 | 695,600 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Fixed Assets | $ 1,467,100 | $ 1,524,000 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 333,500 | $ 1,407,400 |
SCHEDULE OF REAL ESTATE (Detail
SCHEDULE OF REAL ESTATE (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Real Estate [Abstract] | ||
Land Held for Development | $ 31,410,100 | $ 47,166,700 |
Construction in Progress | 96,205,900 | 123,927,300 |
Held for Sale | 29,122,400 | 34,384,200 |
Total Real Estate | $ 156,738,400 | $ 205,478,200 |
SCHEDULE OF ACCOUNTS PAYABLE AN
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Trade Accounts Payable | $ 6,599,600 | $ 11,472,100 |
Retainage Payable | 65,500 | 1,130,300 |
Accrued Compensation, Bonuses, and Benefits | 143,200 | 384,700 |
Accrued Quarry Reclamation Costs | 10,000 | 76,200 |
Other Accruals | 1,179,500 | 1,027,400 |
Pre-petition Liabilities Subject to Compromise | (2,051,900) | |
Total Accounts Payable and Accrued Expenses Not Subject to Compromise | $ 5,945,900 | $ 14,090,700 |
REVOLVING LINE OF CREDIT (Detai
REVOLVING LINE OF CREDIT (Details Narrative) - USD ($) | 12 Months Ended | ||||
Oct. 01, 2023 | Feb. 23, 2023 | Mar. 07, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | |||||
Credit facility term | 10 months | ||||
Debt issuance costs | $ 1,097,700 | ||||
Line of credit loan balance | 14,178,700 | 24,359,700 | |||
Unamortized debt discount balance | 0 | 600,000 | |||
Revolving Credit Facility [Member] | Line of Credit [Member] | |||||
Debt Instrument [Line Items] | |||||
Revolving credit facility | $ 0 | $ 25,000,000 | |||
Credit facility term | 2 years | ||||
Debt issuance costs | 1,100,000 | ||||
Payment of principal reduction | $ 600,000 | ||||
Payment of principal reduction | 25% | ||||
Unamortized debt discount | $ 500,000 | ||||
Interest accrues at contract rate | 3% | ||||
Interests as incurred | $ 30,000 | ||||
Interest expense | 2,500,000 | 1,600,000 | |||
Line of credit loan balance | $ 14,200,000 | $ 25,000,000 | |||
Revolving Credit Facility [Member] | Line of Credit [Member] | Secured Overnight Financing Rate (SOFR) [Member] | |||||
Debt Instrument [Line Items] | |||||
Fluctuating rate of interest | 4.75% |
SCHEDULE OF EQUIPMENT LOANS (De
SCHEDULE OF EQUIPMENT LOANS (Details) - Notes Payable to Banks [Member] - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Various notes payable to banks and financial institutions with interest rates varying from 0.00% to 13.89%, collateralized by equipment with monthly payments ranging from $400 to $10,500: | $ 2,057,100 | |
Book value of collateralized equipment: | $ 11,800 |
SCHEDULE OF EQUIPMENT LOANS (_2
SCHEDULE OF EQUIPMENT LOANS (Details) (Parenthetical) - Notes Payable to Banks [Member] | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Minimum [Member] | |
Interest rates | 0% |
Monthly payments | $ 400 |
Maximum [Member] | |
Interest rates | 13.89% |
Monthly payments | $ 10,500 |
EQUIPMENT LOANS (Details Narrat
EQUIPMENT LOANS (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Notes Payable to Banks [Member] | ||
Debt Instrument [Line Items] | ||
Interest expense | $ 1 | $ 200 |
CONSTRUCTION LOANS (Details Nar
CONSTRUCTION LOANS (Details Narrative) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 01, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | |||
Construction loans, terms | 10 months | ||
Construction Loan Payable [Member] | |||
Debt Instrument [Line Items] | |||
Interests as incurred | $ 0.8 | ||
Unamortized debt discounts | 0.8 | $ 1.9 | |
Book value of collateralized | 156.7 | 193.1 | |
Construction Loan Payable [Member] | Third Party [Member] | |||
Debt Instrument [Line Items] | |||
Loan balances | $ 126.2 | $ 109.4 | |
Minimum [Member] | Construction Loan Payable [Member] | |||
Debt Instrument [Line Items] | |||
Construction loans, terms | 1 year | ||
Loans have interest rate | 7.99% | ||
Interests at default rates | 13.55% | ||
Maximum [Member] | Construction Loan Payable [Member] | |||
Debt Instrument [Line Items] | |||
Construction loans, terms | 2 years | ||
Loans have interest rate | 13% | ||
Interests at default rates | 24% |
LETTER OF CREDIT (Details Narra
LETTER OF CREDIT (Details Narrative) - Line of Credit [Member] - Letter of Credit [Member] $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Debt Instrument [Line Items] | |
Letter of credit agreement | $ 0.6 |
Prime Rate [Member] | |
Debt Instrument [Line Items] | |
letter of credit is prime plus rate | 1% |
NOTE PAYABLE - INSURANCE (Detai
NOTE PAYABLE - INSURANCE (Details Narrative) - USD ($) | Oct. 01, 2023 | Aug. 28, 2023 | Aug. 28, 2022 | Dec. 31, 2023 | Dec. 31, 2022 |
Short-Term Debt [Line Items] | |||||
Down payment | $ 100,000 | ||||
Debt instrument, term | 10 months | ||||
Interest rate on the loan | 8.95% | ||||
Loan balance | $ 529,300 | $ 378,500 | |||
General liability insurance | $ 500,000 | ||||
Loan balance | 300,000 | ||||
Directors & Officers Insurance August 2022 [Member] | |||||
Short-Term Debt [Line Items] | |||||
Loan balance | $ 200,000 | $ 400,000 | |||
Notes Payable, Other Payables [Member] | Directors & Officers Insurance August 2023 [Member] | |||||
Short-Term Debt [Line Items] | |||||
D & O insurance amount | $ 400,000 | $ 600,000 | |||
Down payment | $ 30,000 | $ 100,000 | |||
Debt instrument, term | 11 months | 11 months | |||
Interest rate on the loan | 7.90% | 4.75% |
SCHEDULE OF LIABILITIES SUBJECT
SCHEDULE OF LIABILITIES SUBJECT TO COMPROMISE (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Liabilities Subject To Compromise | ||
Pre-petition Accounts Payable and Accrued Expenses | $ 2,051,900 | |
Dividends Payable | 7,614,800 | |
Right of Use Liabilities | 2,554,800 | |
Pre-petition Liabilities Subject to Compromise | $ 12,221,500 |
DEFINED CONTRIBUTION PLAN (Deta
DEFINED CONTRIBUTION PLAN (Details Narrative) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Retirement Benefits [Abstract] | ||
Defined contribution plan cost | $ 0.1 | $ 0.1 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Related Party [Member] | ||
Related Party Transaction [Line Items] | ||
Outstanding loan | $ 8,122,800 | |
Interest costs | 400,000 | 1,100,000 |
Sound Equity LLC [Member] | Related Party [Member] | Construction Loan [Member] | ||
Related Party Transaction [Line Items] | ||
Outstanding loan | 0 | 8,200,000 |
Capitalized loan fees | 100,000 | 100,000 |
Unamortized debt discount | $ 0 | 100,000 |
SGRELLC [Member] | Management [Member] | Quarry Used To Process Waste Materials Transactions [Member] | ||
Related Party Transaction [Line Items] | ||
Commission payable percentage | 25% | |
Commission payable | $ 0 | 0 |
Commission expense | $ 0 | 40,000 |
SGRELLC [Member] | Management [Member] | Quarry Used To Process Waste Materials Transactions [Member] | SGRELLC [Member] | ||
Related Party Transaction [Line Items] | ||
Oenership percentage | 100% | |
Olympic Management Company [Member] | Related Party [Member] | Property Management Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Service fee expense | $ 3,000 | |
Property management fee | 500 | |
Cost of sales | $ 300,000 | $ 40,000 |
Minimum [Member] | Sound Equity LLC [Member] | Related Party [Member] | Construction Loan [Member] | ||
Related Party Transaction [Line Items] | ||
Related party transaction maturity term | 12 months | |
Related party transaction interest rate | 7.99% | |
Maximum [Member] | Sound Equity LLC [Member] | Related Party [Member] | Construction Loan [Member] | ||
Related Party Transaction [Line Items] | ||
Related party transaction maturity term | 24 months | |
Related party transaction interest rate | 11% |
SCHEDULE OF COMPONENTS OF LEASE
SCHEDULE OF COMPONENTS OF LEASE EXPENSE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases | ||
Depreciation of assets | $ 8,900 | $ 76,000 |
Interest on lease liabilities | 2,000 | 17,700 |
Operating lease expense | 286,800 | 677,400 |
Total net lease cost | $ 297,700 | $ 771,100 |
SCHEDULE OF SUPPLEMENTAL BALANC
SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Operating leases: | ||
Operating lease ROU assets | $ 1,749,200 | $ 1,926,100 |
Total ROU Liabilities | $ 2,554,800 | $ 2,779,400 |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Right of Use Liabilities | Right of Use Liabilities |
Finance leases: | ||
Property and equipment, at cost | $ 178,800 | |
Less: Accumulated depreciation | 79,100 | |
Property and equipment, net | $ 99,700 | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property and Equipment, net | Property and Equipment, net |
Total Finance lease liabilities | $ 154,500 |
SCHEDULE OF CASH FLOW AND OTHER
SCHEDULE OF CASH FLOW AND OTHER INFORMATION RELATED TO LEASES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases | ||
Operating cash flows from operating leases - lease payments | $ (224,600) | $ (358,100) |
Operating cash flows from operating leases - lease incentives | 613,900 | |
Financing cash flows from finance leases - lease payments | (74,800) | (104,100) |
Operating leases | ||
Finance leases | $ 110,000 | |
Weighted average remaining lease term operating leases | 8 years 3 months | 9 years 2 months 12 days |
Weighted average remaining lease term finance leases | 10 months 24 days | |
Weighted average discount rate operating leases | 4% | 4% |
Weighted average discount rate finance leases | 7.50% |
SCHEDULE OF MINIMUM LEASE PAYME
SCHEDULE OF MINIMUM LEASE PAYMENTS UNDER THE TERMS OF OPERATING LEASES (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Leases | ||
2024 | $ 316,300 | |
2025 | 325,700 | |
2026 | 335,400 | |
2027 | 345,500 | |
2028 | 355,800 | |
Thereafter | 1,365,900 | |
Total lease payments | 3,044,600 | |
Less amount of discount/interest | (489,800) | |
Operating leases | $ 2,554,800 | $ 2,779,400 |
LEASES (Details Narrative)
LEASES (Details Narrative) | Dec. 31, 2023 |
Minimum [Member] | |
Operating lease renewal term | 3 years |
Maximum [Member] | |
Operating lease renewal term | 5 years |
SCHEDULE OF COMPONENTS OF NET D
SCHEDULE OF COMPONENTS OF NET DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Income Tax Disclosure [Abstract] | ||
Federal NOL carryforwards | $ 6,790,800 | $ 1,905,900 |
UNICAP | 783,700 | 1,865,900 |
Lease liability | 561,400 | 586,300 |
Stock based compensation | 7,400 | 15,400 |
Investments | 200 | |
Impairment loss on note receivable and real estate and loss provision on fee build contracts | 10,388,700 | 1,046,700 |
Sec. 163(j) interest deduction carryforwards | 823,100 | 273,100 |
Tax Credits | 72,000 | 72,000 |
Charitable Contribution Carryover | 2,000 | |
Bad Debt Expense | 263,700 | |
Advanced Rent Payments | 11,000 | |
Total assets | 19,703,800 | 5,765,500 |
Property and equipment | 290,200 | 480,200 |
Right of use assets | 538,000 | 553,800 |
Sec. 481(a) adjustments | 37,600 | 72,200 |
Total liabilities | 865,800 | 1,106,200 |
Subtotal deferred tax assets | 18,838,000 | 4,659,300 |
Valuation allowance | (18,838,000) | |
Net deferred tax assets | $ 4,659,300 |
SCHEDULE OF COMPONENTS OF INCOM
SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Current: | ||
Federal | $ (107,500) | $ (456,300) |
State | 28,700 | 8,400 |
Total Current | (78,800) | (447,900) |
Deferred: | ||
Federal | (13,335,700) | (3,989,100) |
State | (834,100) | (21,200) |
Total Deferred | (14,169,800) | (4,010,300) |
Valuation Allowance | 18,838,000 | |
Total Income Tax Expense (Benefit) | $ 4,589,400 | $ (4,458,200) |
SCHEDULE OF EXPECTED TAX RATE (
SCHEDULE OF EXPECTED TAX RATE (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
US federal statutory rate | 21% | 21% |
Change in federal valuation allowance | (29.40%) | |
Accrual to return changes and other adjustments to deferred balances | (0.10%) | (0.50%) |
Tax credits | 0.10% | 0.30% |
Incentive stock options | (0.10%) | |
State taxes | 1.20% | 0.10% |
Change in tax rate | 0.10% | |
Other | ||
Effective Tax Rate | (7.20%) | 20.90% |
INCOME TAX (Details Narrative)
INCOME TAX (Details Narrative) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Income Tax Disclosure [Abstract] | ||
Deferred tax assets valuation allowance | $ 15,800,000 | |
Deferred tax assets valuation allowance | 18,838,000 | |
Net operating losses | 30,900,000 | 13,000,000 |
Operating loss carryforwards utilized | $ 0 | $ 0 |
SCHEDULE OF STOCK OPTION ACTIVI
SCHEDULE OF STOCK OPTION ACTIVITY (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||
Options outstanding, beginning | 37,546 | 23,163 |
Weighted average exercise price outstanding, beginning | $ 41.51 | $ 56.43 |
Options exercisable, beginning | 19,696 | 17,186 |
Weighted average exercise price exercisable, beginning | $ 55.55 | $ 55.47 |
Options, granted | 140,000 | 19,600 |
Weighted average exercise price, granted | $ 3.73 | $ 23.79 |
Options, exercised | (1,081) | |
Weighted average exercise price, exercised | $ 8 | |
Options, forfeited/cancelled | (79,087) | (4,135) |
Weighted average exercise price, forfeited/cancelled | $ 8.97 | $ 34.48 |
Options outstanding, ending | 98,459 | 37,546 |
Weighted average exercise price outstanding, ending | $ 13.93 | $ 41.51 |
Options exercisable, ending | 17,543 | 19,696 |
Weighted average exercise price exercisable, ending | $ 54.67 | $ 55.55 |
SCHEDULE OF STOCK OPTION OUTSTA
SCHEDULE OF STOCK OPTION OUTSTANDING AND EXERCISABLE (Details) | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Equity [Abstract] | |
Exercise price lower range limit | $ 3.73 |
Exercise price upper range limit | $ 130 |
Number of options outstanding | shares | 98,459 |
Weighted averge remaining contractual life options outstanding | 9 years |
Weighted average exercise price options outstanding | $ 13.93 |
Number of options exercisable | shares | 17,543 |
Weighted average exercise price options exercisable | $ 54.67 |
SCHEDULE OF COMMON STOCK WARRAN
SCHEDULE OF COMMON STOCK WARRANT ACTIVITY (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Warrants outstanding beginning | [1] | 18,447,564 | 18,486,859 |
Weighted average exercise price outstanding beginning | $ 3.47 | $ 3.46 | |
Warrants exercisable beginning | [1] | 18,380,897 | 18,486,859 |
Weighted average exercise price exercisable beginning | $ 3.47 | $ 3.46 | |
Warrants, granted | [1] | 100,000 | |
Weighted average exercise price, granted | $ 3 | ||
Warrants, exercised | [1] | (139,295) | |
Weighted average exercise price, exercised | $ 2.97 | ||
Warrants, forfeited or cancelled | [1] | ||
Weighted average exercise price, forfeited or cancelled | |||
Warrants outstanding ending | [1] | 18,447,564 | 18,447,564 |
Weighted average exercise price outstanding ending | $ 3.47 | $ 3.47 | |
Warrants exercisable ending | [1] | 18,414,231 | 18,380,897 |
Weighted average exercise price exercisable ending | $ 3.47 | $ 3.47 | |
Warrants to Purchase Common Stock (1:1) [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Warrants outstanding beginning | |||
Weighted average exercise price outstanding beginning | |||
Warrants exercisable beginning | |||
Weighted average exercise price exercisable beginning | |||
Warrants, granted | 2,068,291 | ||
Weighted average exercise price, granted | $ 5.08 | ||
Warrants, exercised | |||
Weighted average exercise price, exercised | |||
Warrants, forfeited or cancelled | |||
Weighted average exercise price, forfeited or cancelled | |||
Warrants outstanding ending | 2,068,291 | ||
Weighted average exercise price outstanding ending | $ 5.08 | ||
Warrants exercisable ending | 2,068,291 | ||
Weighted average exercise price exercisable ending | $ 5.08 | ||
Preferred Stock Warrant [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Warrants outstanding beginning | 12,000 | 12,000 | |
Weighted average exercise price outstanding beginning | $ 24.97 | $ 24.97 | |
Warrants exercisable beginning | 12,000 | 12,000 | |
Weighted average exercise price exercisable beginning | $ 24.97 | $ 24.97 | |
Warrants, granted | |||
Weighted average exercise price, granted | |||
Warrants, exercised | |||
Weighted average exercise price, exercised | |||
Warrants, forfeited or cancelled | |||
Weighted average exercise price, forfeited or cancelled | |||
Warrants outstanding ending | 12,000 | 12,000 | |
Weighted average exercise price outstanding ending | $ 24.97 | $ 24.97 | |
Warrants exercisable ending | 12,000 | 12,000 | |
Weighted average exercise price exercisable ending | $ 24.97 | $ 24.97 | |
Pre Funded Warrants [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Warrants outstanding beginning | |||
Weighted average exercise price outstanding beginning | |||
Warrants exercisable beginning | |||
Weighted average exercise price exercisable beginning | |||
Warrants, granted | 1,790,718 | ||
Weighted average exercise price, granted | $ 0.0001 | ||
Warrants, exercised | (1,790,718) | ||
Weighted average exercise price, exercised | $ 0.0001 | ||
Warrants, forfeited or cancelled | |||
Weighted average exercise price, forfeited or cancelled | |||
Warrants outstanding ending | |||
Weighted average exercise price outstanding ending | |||
Warrants exercisable ending | |||
Weighted average exercise price exercisable ending | |||
[1]As a result of the Reverse Stock Split, each warrant now entitles the holder to purchase one-twentieth (0.05) of one share of common stock. |
SCHEDULE OF WARRANT OUTSTANDING
SCHEDULE OF WARRANT OUTSTANDING AND EXERCISABLE (Details) | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Warrants to Purchase Common Stock (20:1) [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Exercise price of warrants lower limit | $ 0.40 |
Exercise price of warrants | $ 7.50 |
Number of outstanding warrants | shares | 18,447,564 |
Weighted average remaining contractual life warrants outstanding | 2 years 8 months 4 days |
Weighted average exercise price warrants outstanding | $ 3.47 |
Number of warrants exercisable | shares | 18,414,231 |
Weighted average exercise price warrants exercisable | $ 3.47 |
Warrants to Purchase Common Stock (1:1) [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Exercise price of warrants lower limit | 5 |
Exercise price of warrants | $ 6.41 |
Number of outstanding warrants | shares | 2,068,291 |
Weighted average remaining contractual life warrants outstanding | 4 years 4 months 17 days |
Weighted average exercise price warrants outstanding | $ 5.08 |
Number of warrants exercisable | shares | 2,068,291 |
Weighted average exercise price warrants exercisable | $ 5.08 |
Preferred Stock Warrant [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Exercise price of warrants | $ 24.97 |
Number of outstanding warrants | shares | 12,000 |
Weighted average remaining contractual life warrants outstanding | 2 years 5 months 8 days |
Weighted average exercise price warrants outstanding | $ 24.97 |
Number of warrants exercisable | shares | 12,000 |
Weighted average exercise price warrants exercisable | $ 24.97 |
SCHEDULE OF RESTRICTED STOCK AC
SCHEDULE OF RESTRICTED STOCK ACTIVITY (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Warrants outstanding beginning | [1] | 18,447,564 | 18,486,859 |
Weighted average exercise price outstanding beginning | $ 3.47 | $ 3.46 | |
Nonvested restricted stock, granted | [1] | 100,000 | |
Nonvested weighted averagefair value, granted | $ 3 | ||
Nonvested restricted stock, forfeited or cancelled | [1] | ||
Nonvested weighted averagefair value, forfeited or cancelled | |||
Warrants outstanding ending | [1] | 18,447,564 | 18,447,564 |
Weighted average exercise price outstanding ending | $ 3.47 | $ 3.47 | |
Restricted Stock [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Warrants outstanding beginning | 12,000 | 7,250 | |
Weighted average exercise price outstanding beginning | $ 38.48 | $ 49.02 | |
Nonvested restricted stock, granted | 11,555 | ||
Nonvested weighted averagefair value, granted | $ 39.16 | ||
Nonvested restricted stock, vested | 3,834 | 6,805 | |
Nonvested weighted averagefair value, vested | $ 38.78 | $ 50.87 | |
Nonvested restricted stock, forfeited or cancelled | 6,999 | ||
Nonvested weighted averagefair value, forfeited or cancelled | $ 38.70 | ||
Warrants outstanding ending | 1,167 | 12,000 | |
Weighted average exercise price outstanding ending | $ 36.20 | $ 38.48 | |
[1]As a result of the Reverse Stock Split, each warrant now entitles the holder to purchase one-twentieth (0.05) of one share of common stock. |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) | 12 Months Ended | |||||||||
May 18, 2023 USD ($) $ / shares shares | May 16, 2023 $ / shares shares | Mar. 06, 2023 | Feb. 27, 2023 shares | Feb. 17, 2023 | Dec. 31, 2023 USD ($) Integer $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | May 10, 2022 USD ($) | Dec. 31, 2021 shares | ||
Class of Stock [Line Items] | ||||||||||
Common stock, shares authorized | 50,000,000 | 50,000,000 | ||||||||
Common stock par value | $ / shares | $ 0 | |||||||||
Common stock, shares issued | 2,686,431 | 718,835 | ||||||||
Common stock, shares outstanding | 2,686,431 | 718,835 | ||||||||
Common stock voting rights | Integer | 1 | |||||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | ||||||||
Preferred stock, par value | $ / shares | $ 0 | |||||||||
Preferred stock, shares issued | 3,799,799 | 3,799,799 | ||||||||
Preferred stock, shares outstanding | 3,799,799 | 3,799,799 | ||||||||
Preferred stock converion ratio | 0.2778 | |||||||||
Accrued dividends | $ | $ 7,600,000 | $ 600,000 | ||||||||
Reverse stock split, description | 1-for-20 reverse stock split | Reverse Stock Split at a ratio of 1-for-20 | 1-for-3 and 1-for-25 | |||||||
Stock repurchase value | $ | $ 437,700 | |||||||||
Options issued | 140,000 | 19,600 | ||||||||
Exercise price | $ / shares | $ 3.73 | $ 23.79 | ||||||||
Options exercised | 1,081 | |||||||||
Options exercised per share | $ / shares | $ 8 | |||||||||
Options exercised fair value per share | $ | $ 8,600 | |||||||||
Share-based compensation net of forfeitures | $ | $ 218,100 | 515,500 | ||||||||
Unrecognized share-based compensation | $ | 200,000 | |||||||||
Intrinsic value for outstanding and exercisable options | $ | $ 0 | $ 0 | ||||||||
warrants to purchase | [1] | 100,000 | ||||||||
Prefunded warrants exercised | [1] | (139,295) | ||||||||
Share-Based Payment Arrangement, Option [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Options issued | 140,000 | 19,600 | ||||||||
Exercise price | $ / shares | $ 3.73 | |||||||||
Expiration period | 10 years | 10 years | ||||||||
Aggregate fair value of options | $ | $ 300,000 | $ 200,000 | ||||||||
Share-based compensation net of forfeitures | $ | $ 100,000 | $ 100,000 | ||||||||
Share-Based Payment Arrangement, Option [Member] | Minimum [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Exercise price | $ / shares | $ 22.40 | |||||||||
Vestng period | 1 year | |||||||||
Share-Based Payment Arrangement, Option [Member] | Maximum [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Exercise price | $ / shares | $ 41.80 | |||||||||
Vestng period | 3 years | |||||||||
Employees And Former Employees [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Options exercised | 0 | |||||||||
Former Employees [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Options exercised | 1,081 | |||||||||
Options exercised per share | $ / shares | $ 8 | |||||||||
Options exercised fair value per share | $ | $ 10,000 | |||||||||
Restricted Stock [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
warrants to purchase | 11,555 | |||||||||
Share based compensation | $ | $ 100,000 | $ 400,000 | ||||||||
Share based compensation | $ | $ 30,000 | |||||||||
Restricted Stock [Member] | Minimum [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Vestng period | 1 year | |||||||||
Restricted Stock [Member] | Maximum [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Vestng period | 3 years | |||||||||
Warrants to Purchase Common Stock (20:1) [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Class of warrant or right exercisable ratio, description | 20 to 1 ratio | |||||||||
Issuance of preferred warrants | 100,000 | |||||||||
Warrants to purchase | 5,000 | |||||||||
Exercise price of warrants | $ / shares | $ 3 | |||||||||
Exercise price of warrants term | 5 years | |||||||||
Exercise price of warrants vesting term | 3 years | |||||||||
Fair value of warrants | $ | $ 100,000 | |||||||||
Intrinsic value of warrants outstanding and exercisable | $ | $ 0 | $ 0 | ||||||||
Warrants to Purchase Common Stock (1:1) [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Issuance of preferred warrants | 2,068,291 | |||||||||
Exercise price of warrants term | 5 years | |||||||||
Fair value of warrants | $ | $ 1,800,000 | |||||||||
Intrinsic value of warrants outstanding and exercisable | $ | $ 0 | |||||||||
Warrants to Purchase Common Stock (1:1) [Member] | Minimum [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Exercise price of warrants | $ / shares | $ 5 | |||||||||
Warrants to Purchase Common Stock (1:1) [Member] | Maximum [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Exercise price of warrants | $ / shares | $ 6.41 | |||||||||
Preferred Stock Warrant [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Issuance of preferred warrants | 0 | 0 | ||||||||
Intrinsic value of warrants outstanding and exercisable | $ | $ 0 | $ 0 | ||||||||
Pre Funded Warrants [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Exercise price of warrants | $ / shares | $ 0.0001 | |||||||||
Fair value of warrants | $ | $ 7,600,000 | |||||||||
warrants to purchase | 1,790,718 | |||||||||
Prefunded warrants exercised | 1,790,718 | |||||||||
Common Stock [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Common stock, shares issued | 2,686,431 | 718,835 | 657,767 | |||||||
Reverse stock split | 20 | 13,093 | ||||||||
Stock repurchase program | $ | $ 5,000,000 | |||||||||
Stock repurchase program percentage | 15% | |||||||||
Stock repurchase, shares | 12,597 | |||||||||
Stock repurchase average price | $ / shares | $ 35.23 | |||||||||
Stock repurchase value | $ | $ 437,700 | |||||||||
Options exercised | 1,081 | |||||||||
Options exercised fair value per share | $ | $ 10,500 | |||||||||
Public Stock Offering [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Net proceeds | $ | $ 8,900,000 | |||||||||
Public Stock Offering [Member] | Pre-Funded Warrants [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of shares public offering | 1,790,718 | |||||||||
Net proceeds | $ | $ 6,700,000 | |||||||||
Public Stock Offering [Member] | Common Stock Offering Warrants [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of shares public offering | 1,951,218 | |||||||||
Net proceeds | $ | $ 1,600,000 | |||||||||
Public Stock Offering [Member] | Placement Agent Warrants [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Net proceeds | $ | $ 100,000 | |||||||||
Public Stock Offering [Member] | Securities Purchase Agreement [Member] | Pre-Funded Warrants [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of shares public offering | 1,790,718 | |||||||||
Public Stock Offering [Member] | Securities Purchase Agreement [Member] | Common Stock Offering Warrants [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of shares public offering | 1,951,218 | |||||||||
Combined public offering price | $ / shares | $ 5.125 | |||||||||
Public Stock Offering [Member] | Common Stock [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of shares public offering | 160,500 | |||||||||
Net proceeds | $ | $ 600,000 | |||||||||
Public Stock Offering [Member] | Common Stock [Member] | Securities Purchase Agreement [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Common stock par value | $ / shares | $ 0 | |||||||||
Number of shares public offering | 160,500 | |||||||||
Public Stock Offering [Member] | Warrant [Member] | Securities Purchase Agreement [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Combined public offering price | $ / shares | $ 5.1249 | |||||||||
Over-Allotment Option [Member] | Pre-Funded Warrants [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of shares public offering | 117,073 | |||||||||
Over-Allotment Option [Member] | Placement Agent Warrants [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Combined public offering price | $ / shares | $ 6.41 | |||||||||
Series A Preferred Stock [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Preferred stock, shares issued | 3,799,399 | |||||||||
Preferred stock, shares outstanding | 3,799,399 | |||||||||
Preferred stock dividend rate | $ / shares | $ 2 | |||||||||
Preferred stock liquidation preference per share | $ / shares | $ 25 | |||||||||
Preferred stock dividend terms | 20 days | |||||||||
Preferred stock converion ratio | 0.2778 | |||||||||
Preferred stock dividend rate percentage | 8% | |||||||||
[1]As a result of the Reverse Stock Split, each warrant now entitles the holder to purchase one-twentieth (0.05) of one share of common stock. |
SCHEDULE OF REVENUE FROM SEGMEN
SCHEDULE OF REVENUE FROM SEGMENT REPORTING INFORMATION (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Total Sales | $ 59,256,700 | $ 55,414,300 |
Total Cost of Sales | 110,691,900 | 55,866,800 |
Total Gross Profit (Loss) | (51,435,200) | (452,500) |
Homes [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Sales | 9,104,000 | 28,670,000 |
Total Cost of Sales | 14,061,900 | 24,027,100 |
Total Gross Profit (Loss) | (4,957,900) | 4,642,900 |
Developed Lots [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Sales | 11,033,500 | 9,510,000 |
Total Cost of Sales | 21,325,400 | 9,797,700 |
Total Gross Profit (Loss) | (10,291,900) | (287,700) |
Entitled Land [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Sales | 7,880,000 | |
Total Cost of Sales | 14,817,500 | 4,060,200 |
Total Gross Profit (Loss) | (14,817,500) | 3,819,800 |
Multi-Family Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Sales | 38,241,400 | 175,900 |
Total Cost of Sales | 59,337,300 | 2,564,400 |
Total Gross Profit (Loss) | (21,095,900) | (2,388,500) |
Fee Build [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Sales | 877,800 | 9,124,000 |
Total Cost of Sales | 942,600 | 13,597,500 |
Total Gross Profit (Loss) | (64,800) | (4,473,500) |
Other Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Sales | 54,400 | |
Total Cost of Sales | 207,200 | 1,819,900 |
Total Gross Profit (Loss) | $ (207,200) | $ (1,765,500) |
SCHEDULE OF TOTAL ASSETS FOR TH
SCHEDULE OF TOTAL ASSETS FOR THE COMPANY’S REPORTABLE SEGMENTS (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Segment Reporting Information [Line Items] | ||
Total Assets | $ 166,750,900 | $ 236,166,400 |
Homes [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 18,786,400 | 29,880,500 |
Developed Lots [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 15,789,800 | 43,469,900 |
Entitled Land [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 26,126,600 | 9,499,600 |
Multi-Family Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 98,167,300 | 131,485,900 |
Fee Build [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 22,100 | 1,703,200 |
Unallocated [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Assets | $ 7,858,700 | $ 20,127,300 |
SEGMENTS (Details Narrative)
SEGMENTS (Details Narrative) | 12 Months Ended |
Dec. 31, 2023 Segment | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Number of executive officers | 5 |
SCHEDULE OF COSTS ESTIMATED EAR
SCHEDULE OF COSTS ESTIMATED EARNINGS AND BILLINGS ON UNCOMPLETED CONTRACTS (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Costs incurred on uncompleted contracts | $ 20,525,800 | $ 19,429,800 |
Estimated loss | (3,702,800) | (3,495,100) |
Costs and estimated earnings on uncompleted contracts | 16,823,000 | 15,934,700 |
Billings to date | 16,842,700 | 16,273,000 |
Costs and estimated earnings in excess of billings on uncompleted contracts | ||
Billings in excess of costs and estimated earnings on uncompleted contracts | (19,700) | (338,300) |
Provision for loss on contract | (5,600) | (159,100) |
Contract Liabilities, net | $ (25,300) | $ (497,400) |
UNCOMPLETED CONTRACTS (Details
UNCOMPLETED CONTRACTS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Contract with customer liability | $ 25,300 | $ 497,400 |
Uncollected billings | $ 20,000 | $ 1,700,000 |
SCHEDULE OF CONDENSED COMBINED
SCHEDULE OF CONDENSED COMBINED FINANCIAL STATEMENTS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
ASSETS | ||
Cash | $ 3,574,500 | $ 9,665,300 |
Restricted Cash | 597,600 | 597,600 |
Accounts Receivable, net | 279,800 | 1,707,000 |
Note Receivable, net | 950,000 | 4,525,300 |
Prepaid Expense and Other Assets | 1,250,900 | 5,318,100 |
Real Estate | 156,738,400 | 205,478,200 |
Property and Equipment, net | 1,610,500 | 2,289,500 |
Right of Use Assets | 1,749,200 | 1,926,100 |
TOTAL ASSETS | 166,750,900 | 236,166,400 |
LIABILITIES | ||
Accounts Payable and Accrued Expenses | 5,945,900 | 14,090,700 |
Contract Liabilities | 25,300 | 497,400 |
Deferred Revenue | 49,900 | 52,000 |
Note Payable - Insurance | 529,300 | 378,500 |
Revolving Line of Credit Loan | 14,178,700 | 24,359,700 |
Liabilities not subject to compromise | 146,051,400 | 160,610,500 |
Liabilities subject to compromise | 12,221,500 | |
TOTAL LIABILITIES | 158,272,900 | 160,610,500 |
STOCKHOLDERS’ EQUITY | ||
Preferred Stock | 62,912,100 | 62,912,100 |
Common Stock | 43,030,200 | 35,704,700 |
Additional Paid In Capital | 3,096,800 | 1,266,300 |
Accumulated Deficit | (100,561,100) | (24,327,200) |
TOTAL STOCKHOLDERS’ EQUITY | 8,478,000 | 75,555,900 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 166,750,900 | 236,166,400 |
Sales | 59,256,700 | 55,414,300 |
Cost of Sales | 110,691,900 | 55,866,800 |
Gross Loss | (51,435,200) | (452,500) |
Operating Expenses | 9,754,200 | 16,237,700 |
Operating Loss | (61,189,400) | (16,690,200) |
Other Income (Expense) | ||
Interest Expense | (2,602,600) | (1,760,000) |
Interest Income | 151,000 | 465,600 |
Loss on Sale of Equipment | (47,700) | (3,433,800) |
Other Income | 51,500 | 38,000 |
Total Other Expense | (2,447,800) | (4,690,200) |
Bankruptcy Expense | 392,500 | |
Loss Before Income Tax | (64,029,700) | (21,380,400) |
Income Tax Expense (Benefit) | 4,589,400 | (4,458,200) |
Net Loss | (68,619,100) | (16,922,200) |
Preferred Dividends | (7,614,800) | (7,759,900) |
Net Loss Attributable to Common Stockholders | (76,233,900) | (24,681,600) |
Adjustments to reconcile net loss to net cash from operating activities: | ||
Depreciation | 333,500 | 1,407,400 |
Amortization of right of use assets | 176,900 | 542,800 |
Loss on sale of equipment | 47,700 | 3,433,800 |
Provision for loss on contract | 153,400 | 159,100 |
Impairment loss on real estate | 48,825,700 | 3,602,600 |
Stock compensation | 218,100 | 515,500 |
Amortization of revolver issuance costs | 640,300 | 457,400 |
Net change in assets and liabilities: | ||
Accounts receivable | 1,427,200 | (593,500) |
Notes receivable | 3,575,300 | (3,725,300) |
Prepaid expenses and other assets | 4,413,300 | (1,499,900) |
Real estate | 2,937,900 | (84,637,700) |
Deferred tax asset | 4,659,300 | (4,010,300) |
Accounts payable and accrued expenses | (6,093,000) | 3,428,100 |
Contract Liabilities | (625,500) | 338,300 |
Deferred revenue | (2,100) | 7,200 |
Payments on right of use liability, net of incentives | (224,600) | 255,800 |
NET CASH USED IN OPERATING ACTIVITIES | (8,155,700) | (93,873,700) |
INVESTING ACTIVITIES | ||
Proceeds on the sale of equipment | 218,100 | 5,113,300 |
NET CASH PROVIDED BY INVESTING ACTIVITIES | 218,100 | 2,466,900 |
FINANCING ACTIVITIES | ||
Construction loans | 65,836,600 | 89,559,300 |
Payments on construction loans | (48,578,300) | (17,115,900) |
Financing fees construction loans | (1,864,000) | (2,470,200) |
Payments on related party construction loans | (75,000) | (14,071,800) |
Payments on revolving line of credit loan | (10,821,300) | |
Payments on note payable - insurance | (1,097,700) | |
Payments on equipment loans | (645,300) | (1,115,500) |
Payments on financing leases | (74,800) | (104,100) |
Preferred dividends | (634,700) | (7,796,100) |
Proceeds from common stock offering | 602,600 | |
Proceeds from pre-funded and common warrants offering | 8,335,400 | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 1,846,800 | 75,442,900 |
NET DECREASE IN CASH AND RESTRICTED CASH | (6,090,800) | (15,963,900) |
CASH AND RESTRICTED CASH AT BEGINNING OF YEAR | 10,262,900 | 26,226,800 |
CASH AND RESTRICTED CASH AT END OF YEAR | 4,172,100 | 10,262,900 |
Debtors And Non Debtor Subsidiaries [Member] | ||
ASSETS | ||
Cash | 3,263,800 | |
Restricted Cash | 597,600 | |
Accounts Receivable, net | 279,800 | |
Note Receivable, net | 950,000 | |
Prepaid Expense and Other Assets | 1,193,800 | |
Real Estate | 112,680,200 | |
Property and Equipment, net | 1,610,500 | |
Right of Use Assets | 1,749,200 | |
Deferred Tax Asset, net | ||
Intercompany balance due from non-debtor subsidiaries | 16,574,400 | |
TOTAL ASSETS | 138,899,300 | |
LIABILITIES | ||
Accounts Payable and Accrued Expenses | 3,976,900 | |
Contract Liabilities | 25,300 | |
Deferred Revenue | 29,600 | |
Note Payable - Insurance | 529,300 | |
Revolving Line of Credit Loan | 14,178,700 | |
Construction Loans | 91,913,600 | |
Liabilities not subject to compromise | 110,653,400 | |
Liabilities subject to compromise | 12,221,500 | |
TOTAL LIABILITIES | 122,874,900 | |
STOCKHOLDERS’ EQUITY | ||
Preferred Stock | 62,912,100 | |
Common Stock | 43,030,200 | |
Additional Paid In Capital | 3,096,800 | |
Accumulated Deficit | (93,014,700) | |
TOTAL STOCKHOLDERS’ EQUITY | 16,024,400 | |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 138,899,300 | |
Sales | 23,061,600 | |
Cost of Sales | 70,402,700 | |
Gross Loss | (47,341,100) | |
Operating Expenses | 8,976,300 | |
Operating Loss | (56,317,400) | |
Other Income (Expense) | ||
Interest Expense | (2,602,600) | |
Interest Income | 151,000 | |
Management fee income from subsidiary | 687,900 | |
Equity income of non-debtor subsidiaries, net | 1,118,000 | |
Loss on Sale of Equipment | (47,700) | |
Other Income | 51,600 | |
Total Other Expense | (641,800) | |
Bankruptcy Expense | 392,500 | |
Loss Before Income Tax | (57,351,700) | |
Income Tax Expense (Benefit) | 4,589,400 | |
Net Loss | (61,941,100) | |
Preferred Dividends | (7,614,800) | |
Net Loss Attributable to Common Stockholders | (69,555,900) | |
Adjustments to reconcile net loss to net cash from operating activities: | ||
Depreciation | 333,500 | |
Amortization of right of use assets | 176,900 | |
Loss on sale of equipment | 47,700 | |
Provision for loss on contract | 153,400 | |
Impairment loss on real estate | 44,758,000 | |
Stock compensation | 218,100 | |
Amortization of revolver issuance costs | 640,300 | |
Net change in assets and liabilities: | ||
Accounts receivable | 1,427,200 | |
Notes receivable | 3,575,300 | |
Prepaid expenses and other assets | 4,468,200 | |
Real estate | (9,741,000) | |
Deferred tax asset | 4,659,300 | |
Accounts payable and accrued expenses | (3,994,700) | |
Contract Liabilities | (625,500) | |
Deferred revenue | (22,400) | |
Payments on right of use liability, net of incentives | (224,600) | |
NET CASH USED IN OPERATING ACTIVITIES | (16,091,400) | |
INVESTING ACTIVITIES | ||
Proceeds on the sale of equipment | 218,100 | |
NET CASH PROVIDED BY INVESTING ACTIVITIES | 218,100 | |
FINANCING ACTIVITIES | ||
Construction loans | 44,050,100 | |
Payments on construction loans | (31,363,300) | |
Financing fees construction loans | (1,804,000) | |
Payments on related party construction loans | (677,300) | |
Payments on revolving line of credit loan | (10,821,300) | |
Payments on note payable - insurance | (645,300) | |
Payments on equipment loans | (2,057,100) | |
Payments on financing leases | (74,800) | |
Preferred dividends | (634,700) | |
Proceeds from common stock offering | 602,600 | |
Proceeds from pre-funded and common warrants offering | 8,335,400 | |
Intercompany transfers from non-debtor subsidiaries | 7,669,800 | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 12,580,100 | |
NET DECREASE IN CASH AND RESTRICTED CASH | (3,293,200) | |
CASH AND RESTRICTED CASH AT BEGINNING OF YEAR | 7,154,600 | |
CASH AND RESTRICTED CASH AT END OF YEAR | $ 3,861,400 | $ 7,154,600 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - Buchanan Mortgage Holdings LLC [Member] | Feb. 02, 2024 USD ($) |
Subsequent Event [Line Items] | |
Interest rate per annum | 6% |
Principal amount | $ 34,048,901 |