Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 28, 2023 | Jun. 30, 2022 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Current Fiscal Year End Date | --12-31 | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Transition Report | false | ||
Entity File Number | 001-39266 | ||
Entity Registrant Name | Harbor Custom Development, Inc. | ||
Entity Incorporation, State or Country Code | WA | ||
Entity Tax Identification Number | 46-4827436 | ||
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 | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 15.6 | ||
Entity Common Stock, Shares Outstanding | 719,152 | ||
Documents Incorporated by Reference | None. | ||
Entity Central Index Key | 0001784567 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Common Stock | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | HCDI | ||
Security Exchange Name | NASDAQ | ||
Series A Cumulative Convertible Preferred Stock | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Series A Cumulative Convertible Preferred Stock | ||
Trading Symbol | HCDIP | ||
Security Exchange Name | NASDAQ | ||
Warrants | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Warrants | ||
Trading Symbol | HCDIW | ||
Security Exchange Name | NASDAQ | ||
Warrants | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Warrants | ||
Trading Symbol | HCDIZ | ||
Security Exchange Name | NASDAQ |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | Rosenberg Rich Baker Berman P.A. |
Auditor Location | Somerset, New Jersey |
Auditor Firm ID | 89 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash | $ 9,665,300 | $ 25,629,200 |
Restricted Cash | 597,600 | 597,600 |
Accounts Receivable, net | 1,707,000 | 1,113,500 |
Contract Assets | 0 | 2,167,200 |
Total Notes Receivable | 4,525,300 | 2,000,000 |
Prepaid Expense and Other Assets | 5,318,100 | 2,778,100 |
Real Estate | 205,478,200 | 122,136,100 |
Property and Equipment, net | 2,289,500 | 9,199,700 |
Right of Use Assets | 1,926,100 | 3,429,700 |
Deferred Tax Asset | 4,659,300 | 649,000 |
TOTAL ASSETS | 236,166,400 | 169,700,100 |
LIABILITIES | ||
Accounts Payable and Accrued Expenses | 14,090,700 | 10,662,800 |
Dividends Payable | 634,700 | 670,900 |
Contract Liabilities | 497,400 | 0 |
Deferred Revenue | 52,000 | 44,800 |
Note Payable D&O Insurance | 378,500 | 903,800 |
Revolving Line of Credit Loan, net of Unamortized Debt Discount of $0.6 million and $0 respectively | 24,359,700 | 0 |
Equipment Loans | 2,057,100 | 5,268,500 |
Finance Leases | 154,500 | 543,400 |
Construction Loans, net of Unamortized Debt Discount of $1.9 million and $4.4 million respectively | 107,483,700 | 34,957,100 |
Construction Loans - Related Parties, net of Unamortized Debt Discount of $0.1 million and $1.1 million respectively | 8,122,800 | 13,426,600 |
Right of Use Liabilities | 2,779,400 | 3,484,400 |
TOTAL LIABILITIES | 160,610,500 | 69,962,300 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS’ EQUITY | ||
Preferred Stock, no par value per share, 10,000,000 shares authorized and 3,799,799 issued and outstanding at December 31, 2022 and 4,016,955 issued and outstanding at December 31, 2021 | 62,912,100 | 66,507,500 |
Common Stock, no par value per share, 50,000,000 shares authorized and 718,835 issued and outstanding at December 31, 2022 and 657,767 issued and outstanding at December 31, 2021 | 35,704,700 | 32,122,700 |
Additional Paid In Capital | 1,266,300 | 752,700 |
Retained Earnings (Accumulated Deficit) | (24,327,200) | 1,646,500 |
Stockholders’ Equity | 75,555,900 | 101,029,400 |
Non-Controlling Interest | 0 | (1,291,600) |
TOTAL STOCKHOLDERS’ EQUITY | 75,555,900 | 99,737,800 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 236,166,400 | $ 169,700,100 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Revolving line of credit loan, net of debt discount | $ 0.6 | $ 0 |
Debt discount | 1.9 | 4.4 |
Debt discount | $ 0.1 | $ 1.1 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 3,799,799 | 4,016,955 |
Preferred stock, shares outstanding (in shares) | 3,799,799 | 4,016,955 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares, issued (in shares) | 718,835 | 657,767 |
Common stock outstanding (in shares) | 718,835 | 657,767 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Sales | $ 55,414,300 | $ 72,352,700 |
Cost of Sales | 55,866,800 | 50,419,400 |
Gross Profit (Loss) | (452,500) | 21,933,300 |
Operating Expenses | 16,237,700 | 11,151,600 |
Operating Income (Loss) | (16,690,200) | 10,781,700 |
Other Income (Expense) | ||
Interest Expense | (1,760,000) | (249,300) |
Interest Income | 465,600 | 0 |
Loss on Sale of Equipment | (3,433,800) | (35,900) |
Other Income | 38,000 | 127,200 |
Total Other Expense | (4,690,200) | (158,000) |
Income (Loss) Before Income Tax | (21,380,400) | 10,623,700 |
Income Tax Expense (Benefit) | (4,458,200) | 1,766,900 |
Net Income (Loss) | (16,922,200) | 8,856,800 |
Net Loss Attributable to Non-controlling interests | (500) | (1,700) |
Preferred Dividends | (7,759,900) | (2,724,900) |
Net Income (Loss) Attributable to Common Stockholders | $ (24,681,600) | $ 6,133,600 |
Earnings (Loss) Per Share - Basic (in dollars per share) | $ (35.29) | $ 8.56 |
Earnings (Loss) Per Share - Diluted (in dollars per share) | $ (35.29) | $ 8.13 |
Weighted Average Common Shares Outstanding - Basic (in shares) | 699,490 | 716,837 |
Weighted Average Common Shares Outstanding - Diluted (in shares) | 699,490 | 1,089,678 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Income (Loss) | $ (16,922,200) | $ 8,856,800 |
Adjustments to reconcile net income (loss) to net cash from operating activities: | ||
Depreciation | 1,407,400 | 1,084,200 |
Amortization of right of use assets | 542,800 | 387,900 |
Loss on sale of equipment | 3,433,800 | 35,900 |
Provision for loss on contract | 159,100 | 0 |
Impairment loss on real estate | 3,602,600 | 0 |
Impairment loss on note receivable | 1,200,000 | 0 |
Stock compensation | 515,500 | 499,900 |
Forgiveness on PPP loan | 0 | (10,000) |
Amortization of revolver issuance costs | 457,400 | 0 |
Net change in assets and liabilities: | ||
Accounts receivable | (593,500) | (1,035,300) |
Contract assets | 2,167,200 | (2,167,200) |
Notes receivable | (3,725,300) | (2,000,000) |
Prepaid expenses and other assets | (1,499,900) | 290,300 |
Real estate | (84,637,700) | (98,527,500) |
Deferred tax asset | (4,010,300) | (649,000) |
Accounts payable and accrued expenses | 3,428,100 | 7,962,800 |
Contract liabilities | 338,300 | 0 |
Deferred revenue | 7,200 | (851,500) |
Payments on right of use liability, net of incentives | 255,800 | (301,100) |
NET CASH USED IN OPERATING ACTIVITIES | (93,873,700) | (86,423,800) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property and equipment | (2,646,400) | (745,600) |
Proceeds on the sale of equipment | 5,113,300 | 69,500 |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | 2,466,900 | (676,100) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Construction loans | 89,559,300 | 53,366,600 |
Payments on construction loans | (17,115,900) | (24,069,200) |
Financing fees construction loans | (2,470,200) | (5,574,900) |
Related party construction loans | 8,669,900 | 19,789,600 |
Payments on related party construction loans | (14,071,800) | (11,793,800) |
Financing fees related party construction loans | (105,400) | (1,982,900) |
Revolving line of credit loan, net of payments | 25,000,000 | 0 |
Financing fees revolving line of credit loan | (1,097,700) | 0 |
Payments on note payable D&O insurance | (1,115,500) | (1,247,700) |
Payments on equipment loans | (3,894,200) | (1,893,700) |
Payments on financing leases | (104,100) | (356,900) |
Payments on PPP loan | 0 | (9,300) |
Net proceeds from issuance of common stock | 0 | 25,101,000 |
Net proceeds from issuance of preferred stock | 0 | 66,572,300 |
Preferred dividends | (7,796,100) | (2,054,000) |
Repurchase of common stock | (437,700) | (5,000,000) |
Proceeds from exercise of stock options | 8,600 | 18,000 |
Proceeds from exercise of warrants | 413,700 | 0 |
Deferred offering costs | 0 | 65,100 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 75,442,900 | 110,930,200 |
NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH | (15,963,900) | 23,830,300 |
CASH AND RESTRICTED CASH AT BEGINNING OF YEAR | 26,226,800 | 2,396,500 |
CASH AND RESTRICTED CASH AT END OF YEAR | 10,262,900 | 26,226,800 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Interest paid | 8,635,600 | 4,190,200 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
New right of use obligations | 0 | 2,943,800 |
Termination of right of use leases | 346,900 | 0 |
Amortization of debt discount capitalized | 2,307,000 | 3,238,300 |
Promissory notes issued for earnest money | 450,000 | 0 |
Financing of D&O insurance | 590,100 | 1,410,400 |
Conversion of finance lease to equipment loan | 394,800 | 0 |
Cancellation of finance leases | 0 | 99,100 |
Financing of fixed assets additions | 110,000 | 1,566,800 |
Dividends declared but not paid | 634,600 | 670,900 |
Conversion of preferred to common stock | $ 3,595,400 | $ 64,800 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) | Total | Common Stock | Preferred Stock | Stockholders' Equity (Deficit) | Stockholders' Equity (Deficit) Common Stock | Stockholders' Equity (Deficit) Preferred Stock | Common Stock | Common Stock Common Stock | Preferred Stock | Preferred Stock Preferred Stock | Additional Paid in Capital | Retained Earnings (Accumulated Deficit) | Non-Controlling Interest |
Beginning balance, shares (in shares) at Dec. 31, 2020 | 281,827 | ||||||||||||
Beginning balance, shares (in shares) at Dec. 31, 2020 | 0 | ||||||||||||
Beginning balance, value at Dec. 31, 2020 | $ 6,414,700 | $ 7,704,600 | $ 11,956,900 | $ 0 | $ 234,800 | $ (4,487,100) | $ (1,289,900) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net proceeds from issuance of stock (in shares) | 460,000 | 4,020,555 | |||||||||||
Net proceeds from issuance of stock | $ 25,101,000 | $ 66,572,300 | $ 25,101,000 | $ 66,572,300 | $ 25,101,000 | $ 66,572,300 | |||||||
Exercise of stock options (in shares) | 2,252 | 2,252 | |||||||||||
Exercise of stock options | $ 18,000 | 18,000 | 18,000 | ||||||||||
Stock Compensation Expense (in shares) | 3,025 | ||||||||||||
Stock Compensation Expense | 499,900 | 499,900 | 499,900 | ||||||||||
Preferred Stock Dividends | (2,724,900) | (2,724,900) | (2,724,900) | ||||||||||
Repurchase of Stock (in shares) | (90,337) | (90,337) | |||||||||||
Repurchase of Stock | (5,000,000) | $ (5,000,000) | (5,000,000) | $ (5,000,000) | |||||||||
Conversion of Preferred stock (in shares) | 1,000 | (3,600) | |||||||||||
Conversion of Preferred stock | 0 | 0 | $ 64,800 | $ (64,800) | |||||||||
Net Income (Loss) | $ 8,856,800 | 8,858,500 | 8,858,500 | (1,700) | |||||||||
Ending balance, shares (in shares) at Dec. 31, 2021 | 657,767 | 657,767 | |||||||||||
Ending balance, shares (in shares) at Dec. 31, 2021 | 4,016,955 | 4,016,955 | |||||||||||
Ending balance, value at Dec. 31, 2021 | $ 99,737,800 | 101,029,400 | $ 32,122,700 | $ 66,507,500 | 752,700 | 1,646,500 | (1,291,600) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Exercise of stock options (in shares) | 1,081 | 1,081 | |||||||||||
Exercise of stock options | $ 8,600 | 8,600 | $ 10,500 | (1,900) | |||||||||
Stock Compensation Expense (in shares) | 5,293 | ||||||||||||
Stock Compensation Expense | 515,500 | 515,500 | 515,500 | ||||||||||
Dissolution of Non-Controlling Interest | 0 | (1,292,100) | (1,292,100) | 1,292,100 | |||||||||
Preferred Stock Dividends | (7,759,900) | (7,759,900) | (7,759,900) | ||||||||||
Repurchase of Stock (in shares) | (12,597) | (12,597) | |||||||||||
Repurchase of Stock | (437,700) | $ (400,000) | (437,700) | $ (437,700) | |||||||||
Conversion of Preferred stock (in shares) | 60,326 | (217,156) | |||||||||||
Conversion of Preferred stock | 0 | 0 | $ 3,595,400 | $ (3,595,400) | |||||||||
Exercise of Warrants (in shares) | 6,965 | ||||||||||||
Exercise of Warrants | 413,800 | 413,800 | $ 413,800 | ||||||||||
Net Income (Loss) | $ (16,922,200) | (16,921,700) | (16,921,700) | (500) | |||||||||
Ending balance, shares (in shares) at Dec. 31, 2022 | 718,835 | 718,835 | |||||||||||
Ending balance, shares (in shares) at Dec. 31, 2022 | 3,799,799 | 3,799,799 | |||||||||||
Ending balance, value at Dec. 31, 2022 | $ 75,555,900 | $ 75,555,900 | $ 35,704,700 | $ 62,912,100 | $ 1,266,300 | $ (24,327,200) | $ 0 |
NATURE OF OPERATIONS AND SUMMAR
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [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. It utilizes its heavy equipment resources to develop an inventory of developed lots and provide development infrastructure construction, on a contract basis, for other home builders. 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. 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: Names Dates of Formation Attributable Interest December 31, December 31, Saylor View Estates, LLC* March 30, 2014 N/A 51 % Harbor Materials, LLC** July 5, 2018 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 100 % 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 % N/A Broadmoor Ventures, LLC August 24, 2022 100 % N/A Winding Lane Estate LLC November 30, 2022 100 % N/A *Saylor View Estates, LLC was voluntarily dissolved with the State of Washington as of January 20, 2022. **Harbor Materials, LLC was voluntarily dissolved with the State of Washington as of January 29, 2021. As of December 31, 2022 and December 31, 2021, the aggregate non-controlling interest was $0 and $(1.3) million, respectively. 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 Under ASC 205-40, Company management has the responsibility to evaluate whether conditions and/or events raise substantial doubt about the Company's ability to meet its future financial obligations as they become due within one year after the date that the financial statements are issued. As required by this standard, the evaluation shall initially not take into consideration the potential mitigating effects of the Company's plans that have not been fully implemented as of the date the financial statements are issued. Regarding the first step of this assessment, the Company's cash and liquidity position as of year-end may not be sufficient to meet its financial obligations for the next 12 months without implementing one or more of management’s plans and initiatives to generate or raise additional capital. Further, the following detrimental events occurred: the closing bid price of the Company's common stock on the Nasdaq Capital Market was below $1.00 for more than 30 consecutive trading days and the Company received a potential delisting notification from Nasdaq; the Company failed to maintain compliance with certain financial covenants within its loan agreements requiring loan amendment or covenant waivers; the Company has no borrowing availability under its revolving credit facility; it has significant construction related debt maturing over the next 12 months; it has had significant uses of cash flows from operations over the past two years; it had a $16.9 million net loss in 2022; and the real estate and construction industries are experiencing declining market conditions which have negatively impacted property valuations as well as financing capabilities and terms. In performing the second step of this assessment, management is required to evaluate whether the Company's plans to mitigate the conditions above alleviate the substantial doubt about the Company's ability to meet its obligations as they become due within one year after the date that the financial statements are issued. As part of management's evaluation of the second step of this assessment, management notes that subsequent to year end, but prior to the filing of these financial statements, the Company has done the following: completed a 1-for-20 reverse stock split increasing its closing bid price above the $1.00 minimum NASDAQ requirement and regaining compliance with this Nasdaq Continued Listing Requirement; executed an Amendment to the Revolver Loan Agreement with BankUnited to alleviate the breach of financial covenants and the bank’s ability to call the loan; has $24.4 million sales closed after December 31, 2022 or under contract as of March 28, 2023 and significant additional assets that are held for sale; has construction loans in place; has met its equity requirement for its Pacific Ridge, Wyndstone, Meadowscape, and Belfair Phase 1 projects; has substantially completed its fee build contracts; shut down its quarry operations; eliminated most of its full time employees in its horizontal infrastructure division; and sold a significant majority of its equipment, all of which was directly or indirectly associated with significant net loss generating activities during 2022. Additionally, the Company's future plans include: raising additional funds through the sales of assets; obtaining new debt financing and/or refinancing existing debt; pulling cash out of one or more of its multifamily properties by obtaining a project level equity partner; and/or raising capital in the private or public equity or debt markets. Based on the properties under contract for sale, interest in the Company's available for sale properties, its prior track record of raising both debt and equity capital, and management's ongoing discussions and negotiations with potential financing partners, management believes it is probable that the Company's plans will be effectively implemented and probable that those plans will mitigate the previously mentioned conditions and events that raised substantial doubt. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the Company's failure to continue as a going concern . 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 shares of common stock for issuance under the 2018 Plan. On June 1, 2022, the stockholders of the Company voted to approve an amendment to the 2018 Plan to increase, by 100,000, the authorized number of shares of common stock reserved for issuance as options under the 2018 Plan. 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 shares of common stock for issuance under the 2020 Plan. On June 1, 2022, the stockholders of the Company voted to approve an amendment to the 2020 Plan to increase, by 100,000, the authorized number of shares of common stock available for awards under the 2020 Plan. 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 is 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, 2022 and 2021 when computing fair value of share-based payments, the Company has considered the following range of assumptions: December 31, 2022 December 31, 2021 Risk-free interest rate 1.73%-3.54% 0.17%-0.84% Exercise price $22.40-$60.00 $55.20 - $100.00 Expected life of grants in years 3.93-6.51 2.50-6.50 Expected volatility of underlying stock 42.34%-48.13% 42.30%-56.00% 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 periods. 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 17. Stockholders’ Equity.) Reverse Stock Split On March 6, 2023, the Company effected a 1-for-20 reverse stock split of its issued and outstanding shares of common stock (the “Reverse Stock Split”) on the Nasdaq Capital Market. Accordingly, all share and per share data included in these consolidated financial statements and notes thereto have been adjusted retroactively to reflect the impact of the Reverse Stock Split. Earnings (Loss) Per Share 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. The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income (loss) attributable to common stockholders per share of common stock for the years ended December 31, 2022 and 2021. Year Ended December 31, 2022 Year Ended December 31, 2021 Numerator: Net income (loss) attributable to common stockholders $ (24,681,600) $ 6,133,600 Effect of dilutive securities: — 2,724,900 Diluted net income (loss) $ (24,681,600) $ 8,858,500 Denominator: Weighted average common shares outstanding - basic 699,490 716,837 Dilutive securities (a): Restricted Stock Awards — 89 Options — 7,372 Warrants — 971 Convertible Preferred Stock — 364,409 Weighted average common shares outstanding and assumed conversion – diluted 699,490 1,089,678 Basic net earnings (loss) per common share $ (35.29) $ 8.56 Diluted net earnings (loss) per common share $ (35.29) $ 8.13 (a) - Outstanding anti-dilutive securities excluded: Unvested restricted stock awards 12,000 2,250 Stock options 37,546 13,500 Warrants to purchase common stock (1) 18,447,564 18,464,335 Convertible preferred stock (2) 3,799,799 — Warrants to purchase convertible preferred stock (2) 12,000 12,000 (1) The number of outstanding warrants did not change or split pursuant to the reverse stock split, but the number of shares of common stock issuable upon exercise will be adjusted based on a 1 to 0.050 ratio. (2) Preferred stock and warrants to purchase convertible preferred stock are convertible into common stock on a 0.2778 to 1 ratio. 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 cash equivalents as of December 31, 2022 and December 31, 2021. Restricted Cash On August 10, 2021, the Company entered into a Letter of Credit (“LOC”) agreement with WaFd Bank in the amount of $0.6 million. The Company signed a lease on October 5, 2021 for a new office space. The landlord of the property, University Street Properties I, LLC, is the beneficiary of the LOC. The amount of funds that cover this LOC were moved by WaFd Bank to a controlled account on August 13, 2021. (See Note 10. Letter of Credit.) Accounts Receivable Accounts receivables are reported at the amount the Company expects to collect from outstanding balances. The Company provides for an allowance for doubtful accounts 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 doubtful accounts was $0 as of December 31, 2022 and December 31, 2021. 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 impairment whenever events or circumstances indicate that the note may not be fully recoverable. Impairment is 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. If management determines an amount to be uncollectible, impairment is measured based on the estimated uncollectible amount less the fair value of the underlying collateral. Impairment is recognized with a valuation allowance against the note receivable with a corresponding charge to bad debt expense under operating expenses. The valuation allowance was $1.2 million for notes receivable as of December 31, 2022. No impairment loss was recognized as of December 31, 2021. (See Note 3. Notes Receivable.) In March 2022, the Company entered into a promissory note with Rocklin Winding Lane 22, LLC for $4.8 million (“the note”) for the sale of developed lots. In the third quarter of 2022, Rocklin Winding Lane 22, LLC defaulted on the note due to a missed interest payment on June 30, 2022. As a result, the Company issued a letter of default in August 2022 and began foreclosure proceedings on the underlying real estate asset in October 2022. In the third quarter of 2022, the Company recorded a valuation allowance against the note and related bad debt expense within operating expenses of $0.8 million. In the fourth quarter of 2022, the Company was successful in the foreclosure of the underlying property and took ownership of the property, which was recorded for a fair value of $5.1 million at the time of repossession. Pursuant to the subordination agreement, the underlying real estate asset had a $1.0 million senior loan to a third party that was taken over by the Company upon the foreclosure of the property. 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: Construction Equipment 5-10 years Leasehold Improvements The lesser of 10 years or the remaining life of the lease Furniture and Fixtures 5 years Computers 3 years Vehicles 10 years 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 constructed is completed. The capitalized costs are recorded as part of the asset to which they relate and are expensed when the underlying asset is sold. The Company capitalized interest from related party borrowings of $1.1 million and $1.0 million for the years ended December 31, 2022 and 2021, respectively. The Company capitalized interest from third-party borrowings of $5.7 million and $2.4 million for the years ended December 31, 2022 and 2021, respectively. 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, 2022, the Company recorded impairment charges of $1.2 million and $2.4 million relating to the Winding Lane lots and Pacific Ridge apartments, respectively. These charges are included in the real estate balance as presented in Note 5. Real Estate. The Company did not identify any other real estate that qualified for an impairment charge. As of December 31, 2021, the Company did not identify any trigger events that would require further investigation under ASC 360 and no impairment was recorded for the period. 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 19. Uncompleted Contracts.) Revenues from contracts with customers are summarized by category as follows for the years ended December 31, 2022 and 2021: Year Ended Year Ended December 31, 2022 December 31, 2021 Homes $ 28,670,000 $ 17,654,600 Developed Lots 9,510,000 26,825,500 Entitled Land 7,880,000 20,625,000 Fee Build 9,124,000 6,802,900 Multi-family 175,900 — Construction Materials 54,400 444,700 Total Revenue $ 55,414,300 $ 72,352,700 The following table disaggregates the Company’s revenue based on the timing of satisfaction of performance obligations for the years ended December 31, 2022 and 2021: Year Ended Year Ended December 31, 2022 December 31, 2021 Performance obligations satisfied at a point in time $ 46,290,300 $ 65,549,800 Performance obligations satisfied over time 9,124,000 6,802,900 Total Revenue $ 55,414,300 $ 72,352,700 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. 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. Advertising Advertising expenses, which are expensed as incurred and included in operating expenses, were $0.4 million and $0.1 million for the years ended December 31, 2022 and 2021. 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 re |
CONCENTRATIONS
CONCENTRATIONS | 12 Months Ended |
Dec. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS | 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 $8.1 million and $24.5 million as of December 31, 2022 and December 31, 2021, respectively. Revenue Concentrations Homes There were no concentrations in relation to the homes revenue segment for the years ended December 31, 2022 and 2021. Developed Lots For the year ended December 31, 2022, two customers each represented 59% and 25% of the developed lots revenue, respectively. For the year ended December 31, 2021, five customers each represented 26%, 23%, 18%, 14%, and 14% of the developed lots revenue, respectively. Entitled Land For the year ended December 31, 2022, two customers each represented 57% and 43% of the entitled land revenue, respectively. For the year ended December 31, 2021, two customers each represented 51% and 45% of the entitled land revenue, respectively. Fee Build One customer represented 100% of fee build revenue for the years ended December 31, 2022 and 2021. |
NOTES RECEIVABLE
NOTES RECEIVABLE | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
NOTES RECEIVABLE | NOTES RECEIVABLE As of December 31, 2022, the total principal balance of notes receivable amounted to $4.5 million. These notes arose as financing by the Company for the sale of real estate properties or financing the development of the properties prior to acquisition. These notes are secured by the underlying improved real estate properties and accrue interest at annual rates ranging from 5% to 9%. All payments of principal and interest are due in full between March 30, 2023 and December 20, 2024. The outstanding balance of the notes amounted to $4.5 million and $2.0 million at December 31, 2022 and December 31, 2021, respectively. Interest income was $0.5 million and $0 for the years ended December 31, 2022 and 2021, respectively. 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 million ("the note") for the sale of land. In March 2023, Noffke Horizon View, LLC notified the Company that they are unable to pay this amount in full by the due date and the Company agreed to settle the note for a reduced amount totaling $2.1 million. The Company has evaluated this settlement as a recognized subsequent event prior to the issuance of the financial statements and has determined that the note is not fully collectible as of December 31, 2022. The Company recorded a valuation allowance against the note and related bad debt expense within operating expenses of $1.2 million for the year ended December 31, 2022. The details of notes receivables, net of valuation allowance are as follows: December 31, 2022 December 31, 2021 Broadmoor Commons LLC $ 1,000,300 $ 500,000 Modern Homestead LLC 1,445,000 1,500,000 Noffke Horizon View, LLC 2,080,000 — Total Notes Receivable $ 4,525,300 $ 2,000,000 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment stated at cost, less accumulated depreciation and amortization, consisted of the following: December 31, 2022 December 31, 2021 Machinery and Equipment $ 505,300 $ 10,577,600 Vehicles 26,200 71,800 Furniture and Fixtures 695,600 420,300 Leasehold Improvements 1,524,000 81,200 Total Fixed Assets 2,751,100 11,150,900 Less Accumulated Depreciation (461,600) (1,951,200) Fixed Assets, Net $ 2,289,500 $ 9,199,700 In December of 2022, the Company sold a significant portion of machinery and equipment which was primarily used for fee build and quarry projects as these projects are nearing completion. Depreciation expense was $1.4 million and $1.1 million for the years ended December 31, 2022 and 2021, respectively. |
REAL ESTATE
REAL ESTATE | 12 Months Ended |
Dec. 31, 2022 | |
Real Estate [Abstract] | |
REAL ESTATE | REAL ESTATE Real Estate consisted of the following components: December 31, 2022 December 31, 2021 Land Held for Development $ 47,166,700 $ 73,524,400 Construction in Progress 123,927,300 43,362,700 Held for Sale 34,384,200 5,249,000 Total Real Estate $ 205,478,200 $ 122,136,100 |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued liabilities consisted of the following: December 31, 2022 December 31, 2021 Trade Accounts Payable $ 11,472,100 $ 5,558,400 Income Tax Payable — 2,415,900 Retainage Payable 1,130,300 445,800 Accrued Compensation, Bonuses, and Benefits 384,700 1,071,700 Accrued Quarry Reclamation Costs 76,200 500,000 Other Accruals 1,027,400 671,000 Total Accounts Payable and Accrued Expenses $ 14,090,700 $ 10,662,800 |
REVOLVING LINE OF CREDIT
REVOLVING LINE OF CREDIT | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
REVOLVING LINE OF CREDIT | 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 million. The credit facility has a two year term, with a maturity date of March 7, 2024. The unpaid principal bears interest at a fluctuating rate of interest per annum equal to the daily simple secured overnight financing rate (SOFR) plus the applicable margin of 4.75%. The credit facility is used to fund the Company’s general working capital needs and interest is expensed as incurred. For the year ended December 31, 2022, the Company capitalized debt issuance costs of $1.1 million, respectively. These costs are recorded as debt discount and amortized ratably over the life of the loan. The credit facility is collateralized by all of the Company’s assets wherein the Lender is granted a junior priority interest in all collateralized Company assets that Lender has previously identified as a permitted lien or other encumbrance that the Company regularly incurs through its ordinary course of business; in all other Company assets, Lender maintains a first priority security interest. The credit facility also contains specific financial covenants. As of December 31, 2022, the Company was not in compliance with the minimum interest coverage ratio requirement and consolidated liquidity covenant. 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 and perfecting the Lender’s security interest in the pledged LLCs. Additionally, the Company agreed to make principal reduction payments including paying the Lender $0.6 million on the 20th of every month which otherwise would have been paid to preferred shareholders as a dividend on the preferred stock, and pay to the Lender 25% of all net cash proceeds from asset sales, public offerings of any class of stock or debt, private equity recaptures, or any capital raise. The Company also agreed that it will not close on any new projects without the Lender's express written consent and will not repurchase any of its outstanding securities. The aforementioned payments will continue to be made until the earlier of March 7, 2024 or until the loan has been paid in full. Interest expense was $1.6 million and $0 for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, the revolving line of credit loan balance was $25.0 million and the unamortized debt discount balance was $0.6 million. Equipment loans consists of the following: December 31, 2022 December 31, 2021 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 $11,600: $ 2,057,100 $ 5,268,500 Book value of collateralized equipment: $ 11,800 $ 7,229,000 Future equipment loan maturities are as follows: For the year ended December 31: 2023 $ 2,057,100 2024 — 2025 — 2026 — 2027 — Total $ 2,057,100 Interest expense was $0.2 million and $0.2 million for the years ended December 31, 2022 and 2021, respectively. |
EQUIPMENT LOANS
EQUIPMENT LOANS | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
EQUIPMENT LOANS | 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 million. The credit facility has a two year term, with a maturity date of March 7, 2024. The unpaid principal bears interest at a fluctuating rate of interest per annum equal to the daily simple secured overnight financing rate (SOFR) plus the applicable margin of 4.75%. The credit facility is used to fund the Company’s general working capital needs and interest is expensed as incurred. For the year ended December 31, 2022, the Company capitalized debt issuance costs of $1.1 million, respectively. These costs are recorded as debt discount and amortized ratably over the life of the loan. The credit facility is collateralized by all of the Company’s assets wherein the Lender is granted a junior priority interest in all collateralized Company assets that Lender has previously identified as a permitted lien or other encumbrance that the Company regularly incurs through its ordinary course of business; in all other Company assets, Lender maintains a first priority security interest. The credit facility also contains specific financial covenants. As of December 31, 2022, the Company was not in compliance with the minimum interest coverage ratio requirement and consolidated liquidity covenant. 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 and perfecting the Lender’s security interest in the pledged LLCs. Additionally, the Company agreed to make principal reduction payments including paying the Lender $0.6 million on the 20th of every month which otherwise would have been paid to preferred shareholders as a dividend on the preferred stock, and pay to the Lender 25% of all net cash proceeds from asset sales, public offerings of any class of stock or debt, private equity recaptures, or any capital raise. The Company also agreed that it will not close on any new projects without the Lender's express written consent and will not repurchase any of its outstanding securities. The aforementioned payments will continue to be made until the earlier of March 7, 2024 or until the loan has been paid in full. Interest expense was $1.6 million and $0 for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, the revolving line of credit loan balance was $25.0 million and the unamortized debt discount balance was $0.6 million. Equipment loans consists of the following: December 31, 2022 December 31, 2021 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 $11,600: $ 2,057,100 $ 5,268,500 Book value of collateralized equipment: $ 11,800 $ 7,229,000 Future equipment loan maturities are as follows: For the year ended December 31: 2023 $ 2,057,100 2024 — 2025 — 2026 — 2027 — Total $ 2,057,100 Interest expense was $0.2 million and $0.2 million for the years ended December 31, 2022 and 2021, respectively. |
CONSTRUCTION LOANS
CONSTRUCTION LOANS | 12 Months Ended |
Dec. 31, 2022 | |
Short-Term Debt [Abstract] | |
CONSTRUCTION LOANS | 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 one The unamortized debt discounts related to these construction loans as of December 31, 2022 and December 31, 2021 were $1.9 million and $4.4 million, respectively. The book value of collateralized real estate as of December 31, 2022 and December 31, 2021 was $193.1 million and $122.1 million, respectively. The Company purchased Directors & Officers (D&O) insurance on August 28, 2022 for $0.6 million. A down payment of $0.1 million was made and the remaining balance was financed over 11 months. The interest rate on the loan is 4.75%. The loan balance as of December 31, 2022 was $0.4 million. The Company purchased D&O insurance on August 28, 2021 for $1.5 million. A down payment of $0.1 million was made and the remaining balance of $1.4 million was financed over 11 months. The interest rate on the loan is 4.42%. The loan balance as of December 31, 2021 was $0.9 million. |
LETTER OF CREDIT
LETTER OF CREDIT | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
LETTER OF CREDIT | 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 million. The credit facility has a two year term, with a maturity date of March 7, 2024. The unpaid principal bears interest at a fluctuating rate of interest per annum equal to the daily simple secured overnight financing rate (SOFR) plus the applicable margin of 4.75%. The credit facility is used to fund the Company’s general working capital needs and interest is expensed as incurred. For the year ended December 31, 2022, the Company capitalized debt issuance costs of $1.1 million, respectively. These costs are recorded as debt discount and amortized ratably over the life of the loan. The credit facility is collateralized by all of the Company’s assets wherein the Lender is granted a junior priority interest in all collateralized Company assets that Lender has previously identified as a permitted lien or other encumbrance that the Company regularly incurs through its ordinary course of business; in all other Company assets, Lender maintains a first priority security interest. The credit facility also contains specific financial covenants. As of December 31, 2022, the Company was not in compliance with the minimum interest coverage ratio requirement and consolidated liquidity covenant. 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 and perfecting the Lender’s security interest in the pledged LLCs. Additionally, the Company agreed to make principal reduction payments including paying the Lender $0.6 million on the 20th of every month which otherwise would have been paid to preferred shareholders as a dividend on the preferred stock, and pay to the Lender 25% of all net cash proceeds from asset sales, public offerings of any class of stock or debt, private equity recaptures, or any capital raise. The Company also agreed that it will not close on any new projects without the Lender's express written consent and will not repurchase any of its outstanding securities. The aforementioned payments will continue to be made until the earlier of March 7, 2024 or until the loan has been paid in full. Interest expense was $1.6 million and $0 for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, the revolving line of credit loan balance was $25.0 million and the unamortized debt discount balance was $0.6 million. Equipment loans consists of the following: December 31, 2022 December 31, 2021 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 $11,600: $ 2,057,100 $ 5,268,500 Book value of collateralized equipment: $ 11,800 $ 7,229,000 Future equipment loan maturities are as follows: For the year ended December 31: 2023 $ 2,057,100 2024 — 2025 — 2026 — 2027 — Total $ 2,057,100 Interest expense was $0.2 million and $0.2 million for the years ended December 31, 2022 and 2021, respectively. |
NOTE PAYABLE DIRECTORS & OFFICE
NOTE PAYABLE DIRECTORS & OFFICERS INSURANCE | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
NOTE PAYABLE DIRECTORS & OFFICERS INSURANCE | 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 one The unamortized debt discounts related to these construction loans as of December 31, 2022 and December 31, 2021 were $1.9 million and $4.4 million, respectively. The book value of collateralized real estate as of December 31, 2022 and December 31, 2021 was $193.1 million and $122.1 million, respectively. The Company purchased Directors & Officers (D&O) insurance on August 28, 2022 for $0.6 million. A down payment of $0.1 million was made and the remaining balance was financed over 11 months. The interest rate on the loan is 4.75%. The loan balance as of December 31, 2022 was $0.4 million. The Company purchased D&O insurance on August 28, 2021 for $1.5 million. A down payment of $0.1 million was made and the remaining balance of $1.4 million was financed over 11 months. The interest rate on the loan is 4.42%. The loan balance as of December 31, 2021 was $0.9 million. |
DEFINED CONTRIBUTION PLAN
DEFINED CONTRIBUTION PLAN | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
DEFINED CONTRIBUTION PLAN | DEFINED CONTRIBUTION PLANEffective 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, 2022 and 2021 were $0.1 million and $0.1 million, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 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. On June 15, 2020, the Company entered into a purchase and sale agreement to acquire property for the construction of 33 townhomes located in East Bremerton, Washington for $2.0 million. Closing is expected to take place in Q3 2023. On December 2, 2021, the Company entered into a purchase and sale agreement for the acquisition of 438 acres of land in Blaine, Washington for $13.5 million. Closing is expected to take place in Q4 2023. On April 21, 2022, the Company entered into a purchase and sale agreement for the acquisition of 4.81 acres of land located in Port Orchard, Washington for $2.6 million. Closing is expected to take place in Q2 2023. On November 15, 2022, the Company entered into a purchase and sale agreement to acquire 15.30 acres of land located in Stanwood, Washington for $4.6 million. Closing is expected to take place by Q2 2024. On December 1, 2022, the Company entered into a purchase and sale agreement to acquire 0.70 acres of land located in Tacoma, Washington for $5.8 million. Closing is expected to take place in Q1 2024. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONSNotes 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 to 21 month maturity, including those that have been extended. The interest rates range between 7.99% and 9.99%. As of December 31, 2022, and December 31, 2021, the outstanding loan balances were $8.2 million and $14.5 million, respectively. For the years ended December 31, 2022, and December 31, 2021, the Company capitalized loan fees of $0.1 million and $0.6 million, respectively. These fees are recorded as debt discount and amortized over the life of the loan. The amortization is capitalized to real estate. As of December 31, 2022 and December 31, 2021, there were $0.1 and $0.2 million of remaining unamortized debt discounts, respectively. The interest is capitalized to real estate as incurred and will be expensed to cost of goods sold when the property is sold. For the years ended December 31, 2022, and December 31, 2021, the Company incurred interest of $1.1 million and $1.0 million, respectively. Robb Kenyon resigned as a director of the Company on July 8, 2021. Due to Related Party The Company utilizes 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 are subject to a 25% commission payable to SGRE, LLC, which is 100% owned by the Company’s Chief Executive Officer and President. The commission expense is recorded in operating expenses. On December 31, 2022 and December 31, 2021, the commission payable was $0 and $0.01 million, respectively. The commission expense for the years ended December 31, 2022 and 2021, was $0.04 million and $0.1 million, respectively. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
LEASES | 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 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: Year Ended Year Ended December 31, 2022 December 31, 2021 Finance leases expense Depreciation of assets $ 76,000 $ 152,700 Interest on lease liabilities 17,700 43,400 Operating lease expense 677,400 550,400 Total net lease cost $ 771,100 $ 746,500 Supplemental balance sheet information related to leases was as follows: December 31, 2022 December 31, 2021 Operating leases: Operating lease ROU assets $ 1,926,100 $ 3,429,700 Total ROU Liabilities $ 2,779,400 $ 3,484,400 Finance leases: Property and equipment, at cost $ 178,800 $ 1,365,500 Less: Accumulated depreciation 79,100 293,100 Property and equipment, net $ 99,700 $ 1,072,400 Total Finance lease liabilities $ 154,500 $ 543,400 Supplemental cash flow and other information related to leases was as follows: Year Ended Year Ended December 31, 2022 December 31, 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases - lease payments $ (358,100) $ (301,100) Operating cash flows from operating leases - lease incentives 613,900 — Financing cash flows from finance leases - lease payments (104,100) (356,900) Assets obtained in exchange for lease liabilities: Operating leases $ — $ 2,943,800 Finance leases 110,000 — Weighted average remaining lease term (in years): Operating leases 9.2 8.6 Finance leases 0.9 2.7 Weighted average discount rate: Operating leases 4.0 % 4.7 % Finance leases 7.5 % 4.8 % The minimum lease payments under the terms of the leases are as follows for the years ended December 31: Operating Leases Finance Leases Total 2023 $ 331,500 $ 134,700 $ 466,200 2024 316,300 29,900 346,200 2025 325,700 — 325,700 2026 335,400 — 335,400 2027 345,500 — 345,500 Thereafter 1,721,600 — 1,721,600 Total lease payments $ 3,376,000 $ 164,600 $ 3,540,600 Less amount of discount/interest (596,600) (10,100) (606,700) $ 2,779,400 $ 154,500 $ 2,933,900 |
LEASES | 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 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: Year Ended Year Ended December 31, 2022 December 31, 2021 Finance leases expense Depreciation of assets $ 76,000 $ 152,700 Interest on lease liabilities 17,700 43,400 Operating lease expense 677,400 550,400 Total net lease cost $ 771,100 $ 746,500 Supplemental balance sheet information related to leases was as follows: December 31, 2022 December 31, 2021 Operating leases: Operating lease ROU assets $ 1,926,100 $ 3,429,700 Total ROU Liabilities $ 2,779,400 $ 3,484,400 Finance leases: Property and equipment, at cost $ 178,800 $ 1,365,500 Less: Accumulated depreciation 79,100 293,100 Property and equipment, net $ 99,700 $ 1,072,400 Total Finance lease liabilities $ 154,500 $ 543,400 Supplemental cash flow and other information related to leases was as follows: Year Ended Year Ended December 31, 2022 December 31, 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases - lease payments $ (358,100) $ (301,100) Operating cash flows from operating leases - lease incentives 613,900 — Financing cash flows from finance leases - lease payments (104,100) (356,900) Assets obtained in exchange for lease liabilities: Operating leases $ — $ 2,943,800 Finance leases 110,000 — Weighted average remaining lease term (in years): Operating leases 9.2 8.6 Finance leases 0.9 2.7 Weighted average discount rate: Operating leases 4.0 % 4.7 % Finance leases 7.5 % 4.8 % The minimum lease payments under the terms of the leases are as follows for the years ended December 31: Operating Leases Finance Leases Total 2023 $ 331,500 $ 134,700 $ 466,200 2024 316,300 29,900 346,200 2025 325,700 — 325,700 2026 335,400 — 335,400 2027 345,500 — 345,500 Thereafter 1,721,600 — 1,721,600 Total lease payments $ 3,376,000 $ 164,600 $ 3,540,600 Less amount of discount/interest (596,600) (10,100) (606,700) $ 2,779,400 $ 154,500 $ 2,933,900 |
INCOME TAX
INCOME TAX | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | INCOME TAX The components of net deferred tax assets and liabilities at December 31, 2022 and 2021 are set forth below: December 31, 2022 December 31, 2021 Deferred tax assets: Federal NOL carryforwards $ 1,905,900 $ 1,926,000 UNICAP 1,865,900 598,400 Lease liability 586,300 736,400 Stock based compensation 15,400 54,900 Investments 200 7,000 Impairment loss on note receivable and real estate and loss provision on fee build contracts 1,046,700 — Sec. 163(j) interest deduction carryforwards 273,100 — Tax Credits 72,000 — Total assets $ 5,765,500 $ 3,322,700 Deferred tax liabilities: Property and equipment $ 480,200 $ 1,948,900 Right of use assets 553,800 724,800 Sec. 481(a) adjustments 72,200 — Total liabilities $ 1,106,200 $ 2,673,700 Subtotal deferred tax assets $ 4,659,300 $ 649,000 Valuation allowance — — Net deferred tax assets $ 4,659,300 $ 649,000 In accordance with GAAP, management assesses whether it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized, and if a valuation allowance is warranted. As of December 31, 2022 and 2021 , management determined that it was more-likely-than-not that the Company’s deferred tax assets would be realized. No valuation allowance was recorded against the Company’s federal net deferred tax assets for the years ended December 31, 2022 and 2021 . The Company has approximately $9.0 million and $9.2 million of federal net operating losses (“NOL”) for the years ended December 31, 2022 and December 31, 2021, respectively. Section 382 of the Internal Revenue Code limits the utilization of NOL carryforwards following a change of control. Based on our analysis under Section 382, the Company is subjected to such restrictions for the years ended December 31, 2022 and December 31, 2021. The Company has utilized $1.3 million of NOL carryforwards for the year ended December 31, 2021. The Company has not utilized the NOL carryforwards for the year ended December 31, 2022. This will be updated pending finalization of the analysis and the filing of the 2022 tax return. These NOLs will not expire and will remain available for future periods, but are limited to 80% of taxable income, due to the Tax Cuts and Jobs Act, passed in 2017. The components of income tax expense (benefit) and the effective tax rates for the years ended December 31, 2022 and 2021 are as follows: Year Ended Year Ended December 31, 2022 December 31, 2021 Current: Federal $ (456,300) $ 2,394,500 State 8,400 21,400 Total Current (447,900) 2,415,900 Deferred: Federal (3,989,100) (649,000) State (21,200) — Total Deferred (4,010,300) (649,000) Valuation Allowance — — Total Income Tax Expense (Benefit) $ (4,458,200) $ 1,766,900 The expected tax rate differs from the U.S. Federal statutory rate as follows: 2022 2021 US federal statutory rate 21.0 % 21.0 % Change in federal valuation allowance — % (3.1) % Accrual to return changes and other adjustments to deferred balances (0.5) % 0.2 % Tax credits 0.3 % (2.6) % Incentive stock options (0.1) % 0.5 % State taxes 0.1 % 0.2 % Change in tax rate 0.1 % 0.1 % Other — % 0.1 % Effective Tax Rate 20.9 % 16.4 % 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, 2022 and 2021. The Company files an income tax return in the U.S. and is subject to examination by the IRS for the tax years 2018, 2019, 2020 and 2021. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | STOCKHOLDERS’ EQUITY Common Stock The Company is authorized to issue 50,000,000 shares of common stock, at no par value per share. At December 31, 2022, the Company has 718,835 shares of common stock issued and outstanding and 657,767 shares of common stock issued and outstanding as of December 31, 2021. Each share of common stock has one vote per share for all purposes. Common stock does not provide any preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights. Common stockholders are not entitled to cumulative voting for purposes of electing members to the Board of Directors. Preferred Stock The Company is authorized to issue 10,000,000 shares of preferred stock, no par value per share. As of December 31, 2022, the Company has 3,799,399 shares of Series A Cumulative Convertible Preferred Stock (“Series A Preferred Shares”) issued and outstanding, and had 4,016,955 shares issued and outstanding as of December 31, 2021. The holders of the Series A Preferred Shares are entitled to receive dividends at $2.00 per share per annum which are paid monthly in arrears starting June 30, 2021. Beginning on June 9, 2024, the Company may, at its option, redeem the Series A Preferred Shares, in whole or in part, by paying $25.00 per share, plus any accrued and unpaid dividends to but not including the date of redemption. To the extent declared by the Board of Directors, dividends will be payable not later than 20 days after the end of each calendar month. Dividends on the Series A Preferred Shares will accumulate whether or not the Company has earnings, whether or not there are funds legally available for the payment of such dividends, and whether or not such dividends are declared by the Board of Directors. Conversion at Option of Holder . Each Series A Preferred Share, together with accrued but unpaid dividends, is convertible into 0.2778 shares of common stock (subject to adjustment) at any time at the option of the holder. Dividends Preferred Stock . The holders of the Series A Preferred Shares are entitled to receive dividends in the amount of $2.00 per share, which is equivalent to 8% of the $25.00 liquidation preference per share. The Company has accrued dividends of $0.6 million as of December 31, 2022 which were paid to the shareholders on January 20, 2023. The company had accrued dividends of $0.7 million as of December 31, 2021, which were paid to the shareholders on January 20, 2022. Common Stock. The declaration of any future cash dividends is at the discretion of the board of directors and depends upon the Company’s earnings, if any, capital requirements and financial position, general economic conditions, and other pertinent conditions. It is the Company’s present intention not to pay any cash dividends on the Company’s common stock in the foreseeable future, but rather to reinvest earnings, if any, in business operations. 2021 Common Stock Offering There were no common stock offerings for the year ended December 31, 2022. On January 15 and 20, 2021, the Company closed on an offering (the “Follow-On Offering”) of 460,000 shares of common stock at the public offering price of $60.00 per share, which includes 60,000 shares of common stock sold upon full exercise of the underwriters’ option to purchase additional shares of common stock for gross proceeds of $27.6 million. The net proceeds after deducting stock issuance costs were $25.1 million. In addition, upon closing of the Follow-On Offering, the Company issued to the underwriters, 400,000 warrants with an exercise price of $3.75 per warrant to purchase 20,000 shares of common stock for a term of five years beginning on January 12, 2021 which vested on July 12, 2021. Each warrant is exercisable into 0.050 shares of common stock (subject to adjustment) at any time at the option of the holder. The fair value of these warrants is $0.5 million. Preferred Stock Offerings There were no preferred stock offerings for the year ended December 31, 2022. On June 11, 2021, the Company closed an offering (the “Preferred Stock Offering”) for 1,200,000 Series A Preferred Shares and 4,140,000 warrants with an exercise price of $5.00 per warrant to purchase 207,000 shares of common stock, which included 540,000 warrants to purchase 27,000 shares of common stock pursuant to the underwriter’s partial exercise of their over-allotment option, for gross proceeds of $30.0 million. Each warrant is exercisable into 0.050 shares of common stock (subject to adjustment) at any time at the option of the holder. On June 30, 2021, the underwriters made another partial exercise of their over-allotment option and purchased an additional 60,555 Series A Preferred Shares for additional gross proceeds of $1.4 million. The net proceeds from the Preferred Stock Offering after deducting stock issuance costs was $28.7 million. In addition, upon closing of the Preferred Stock Offering, the Company issued to the underwriters two warrants, including (i) warrants to purchase 12,000 Series A Preferred Shares; and (ii) 36,000 warrants with an exercise price of $5.00 per warrant to purchase 1,800 shares of common stock. Each warrant is exercisable into 0.050 shares of common stock (subject to adjustment) at any time at the option of the holder. Each warrant issued in the Preferred Stock Offering has a life of five years from the date of issue. The fair value of the warrants was $3.7 million, which was valued using the Black Scholes Model. On October 7, 2021, the Company closed an offering (the “Follow-On Preferred Stock Offering”) for 2,400,000 Series A Preferred Shares and 13,800,000 warrants with an exercise price of $2.97 per warrant to purchase 690,000 shares of common stock, which included 1,800,000 warrants to purchase 90,000 shares of common stock pursuant to the underwriter’s partial exercise of their over-allotment option, for gross proceeds of $36.0 million. Each warrant is exercisable into 0.050 shares of common stock (subject to adjustment) at any time at the option of the holder. On October 7, 2021, the underwriters made another partial exercise of their over-allotment option and purchased an additional 360,000 Series A Preferred Shares for additional gross proceeds of $5.4 million. The net proceeds from the Follow-On Preferred Stock Offering after deducting stock issuance costs was $37.9 million. Each warrant issued in the Follow-On Preferred Stock Offering has a life of five years from the date of issue. The fair value of the warrants was $6.0 million, which was valued using the Black Scholes Model. 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 million worth of shares of common stock beginning May 10, 2022. The amount of the repurchase program represented approximately 15% of the outstanding shares of the Company's common stock valued at the closing price on May 10, 2022. During the year ended December 31, 2022, the Company repurchased 12,597 shares of common stock under this repurchase program at an average price of $35.23 per share for a total of approximately $0.4 million. 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. On November 3, 2021, the Board of Directors approved a stock repurchase program authorizing the repurchase of up to $5.0 million worth of shares of common stock beginning November 22, 2021. The amount of the repurchase program represented approximately 17% of the outstanding shares of the Company’s common stock valued at the closing price on November 3, 2021. During the year ended December 31, 2021, the Company repurchased 90,337 shares of common stock under this repurchase program at an average price of $55.40 per share for a total of approximately $5.0 million. 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 (the “Reverse Stock Split”), such ratio to be selected at the sole discretion of the Company's Board without further stockholder action. On February 27, 2023, the Board of Directors approved the implementation of the Reverse Stock Split at a ratio of 1-for-20 shares of our common stock. The Company filed Articles of Amendment to our Articles of Incorporation for the Reverse Stock Split with the Washington Secretary of State on March 1, 2023 and the Reverse Stock Split was effected on the Nasdaq Capital Market on March 6, 2023. As a result of the Reverse Stock Split, every 20 shares of common stock either issued and outstanding immediately prior to the effective time was, automatically and without any action on the part of the respective holders thereof, combined and converted into one share of common stock. The Reverse Stock Split also applied to common stock issuable upon the exercise of the Company's outstanding warrants, outstanding stock options, unvested restricted stock awards, stock and stock option plans, and upon the conversion of the Series A Preferred Stock. The Reverse Stock Split did not affect the par value of common stock or the shares of common stock authorized to issue under the Articles of Incorporation, as amended. No fractional shares were issued in connection with the Reverse Stock Split. Fractional shares which would otherwise result from the Reverse Stock Split were rounded up to the nearest whole share. (A) Options The following is a summary of the Company’s option activity: Options Weighted Outstanding – January 1, 2021 22,109 $ 50.54 Exercisable – January 1, 2021 10,954 $ 26.16 Granted 12,000 $ 64.68 Exercised (2,252) $ 8.00 Forfeited/Cancelled (8,694) $ 65.37 Outstanding – December 31, 2021 23,163 $ 56.43 Exercisable – December 31, 2021 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 Options Outstanding Options Exercisable Exercise Price Number Weighted Weighted Number Weighted $7.99 - $130.00 37,546 7.94 $ 41.51 19,696 $ 55.55 During the year ended December 31, 2022, the Company issued 19,600 options to employees. The options have an exercise price between $22.40 and $41.80 per share, a term of ten years, and vest over one Stock-Based Compensation. During the year ended December 31, 2022, the Company had 1,081 options exercised by former employees. These options were exercised at $8.00 per share for a total of $0.01 million. The Company recognized share-based compensation net of forfeitures related to options of $0.1 million and $0.3 million for the years ended December 31, 2022 and 2021, respectively. On December 31, 2022, unrecognized share-based compensation was $0.2 million. The intrinsic value for outstanding and exercisable options as of December 31, 2022 was $0 and $0 and as of December 31, 2021 was $0.4 million and $0.3 million, respectively. (B) Warrants The following is a summary of the Company’s common stock warrant activity: Warrants Weighted Outstanding – January 1, 2021 110,859 $ 6.06 Exercisable – January 1, 2021 22,524 $ 0.40 Granted 18,376,000 $ 3.45 Exercised — $ — Forfeited/Cancelled — $ — Outstanding – December 31, 2021 18,486,859 $ 3.46 Exercisable – December 31, 2021 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 Warrants Outstanding Warrants Exercisable Exercise Price Number Weighted Weighted Number Weighted $0.40 - $7.50 18,447,564 3.68 $ 3.47 18,380,897 $ 3.47 During the year ended December 31, 2022, the Company issued 100,000 warrants to purchase 5,000 shares of common stock in connection with investor relation services being performed. The warrants have an exercise price of $3.00 per warrant, a term of five years, and vest over three years. The fair value of these warrants is $0.1 million as of December 31, 2022. The intrinsic value for outstanding and exercisable warrants as of December 31, 2022 and 2021 was $0 and $0.1 million, respectively. The following is a summary of the Company’s preferred stock warrant activity: Warrants Weighted Outstanding – January 1, 2021 — $ — Exercisable – January 1, 2021 — $ — Granted 12,000 $ 24.97 Exercised — $ — Forfeited/Cancelled — $ — Outstanding – December 31, 2021 12,000 $ 24.97 Exercisable – December 31, 2021 12,000 $ 24.97 Granted — $ — Exercised — $ — Forfeited/Cancelled — $ — Outstanding – December 31, 2022 12,000 $ 24.97 Exercisable – December 31, 2022 12,000 $ 24.97 Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Weighted Weighted Number Exercisable Weighted $ 24.97 12,000 3.44 $ 24.97 12,000 $ 24.97 The intrinsic value for outstanding and exercisable preferred warrants as of December 31, 2022 and 2021 was $0. (C) Restricted Stock Plan The following is a summary of the Company’s restricted stock activity: Restricted Stock Weighted Non Vested Balance - January 1, 2021 1,275 $ 90.60 Granted 9,000 $ 51.62 Vested 3,025 $ 74.29 Forfeited/Cancelled — $ — Non Vested Balance - December 31, 2021 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 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 The Company recognized $0.4 million and $0.2 million of share-based compensation during the years ended December 31, 2022 and 2021, respectively. |
SEGMENTS
SEGMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENTS | 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 three executive officers, the Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer. In determining the reportable segments, the CODM group considers similar economics and characteristics including product types, construction processes, customer type, regulatory environments, and underlying demand and supply. The Company’s business is organized into five material reportable segments which aggregate 99.9% of revenue for the year ended December 31, 2022: 1) Homes 2) Developed lots 3) Entitled land 4) Multi-family 5) Fee Build 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, 2022 and 2021. Year Ended December 31, 2022 Year Ended December 31, 2021 Revenue by segment Homes $ 28,670,000 $ 17,654,600 Developed lots 9,510,000 26,825,500 Entitled land 7,880,000 20,625,000 Multi-family 175,900 — Fee Build 9,124,000 6,802,900 Other 54,400 444,700 $ 55,414,300 $ 72,352,700 Cost of goods sold by segment Homes $ 24,027,100 $ 15,168,500 Developed lots 9,797,700 15,885,300 Entitled land 4,060,200 11,689,100 Multi-family 2,564,400 — Fee Build 13,597,500 5,991,300 Other 1,819,900 1,685,200 $ 55,866,800 $ 50,419,400 Gross profit (loss) by segment Homes $ 4,642,900 $ 2,486,100 Developed lots (287,700) 10,940,200 Entitled land 3,819,800 8,935,900 Multi-family (2,388,500) — Fee Build (4,473,500) 811,600 Other (1,765,500) (1,240,500) $ (452,500) $ 21,933,300 The following represents total assets for the Company’s reportable segments at December 31, 2022 and December 31, 2021: December 31, 2022 December 31, 2021 Homes $ 29,880,500 $ 36,615,600 Developed lots 43,469,900 8,219,500 Entitled land 9,499,600 28,157,800 Multi-family 131,485,900 47,679,400 Fee Build 1,703,200 3,325,300 Unallocated (Shared) 20,127,300 45,702,500 Total Assets $ 236,166,400 $ 169,700,100 |
UNCOMPLETED CONTRACTS
UNCOMPLETED CONTRACTS | 12 Months Ended |
Dec. 31, 2022 | |
Contractors [Abstract] | |
UNCOMPLETED CONTRACTS | UNCOMPLETED CONTRACTSCosts, estimated earnings and billings on uncompleted contracts are summarized as follows at December 31, 2022 and December 31, 2021: December 31, 2022 December 31, 2021 Costs incurred on uncompleted contracts $ 19,429,800 $ 5,991,300 Estimated earnings (loss) (3,495,100) 811,600 Costs and estimated earnings on uncompleted contracts 15,934,700 6,802,900 Billings to date 16,273,000 4,635,700 Costs and estimated earnings in excess of billings on uncompleted contracts — 2,167,200 Billings in excess of costs and estimated earnings on uncompleted contracts (338,300) — Provision for loss on contract (159,100) — Contract Assets (Liabilities), net $ (497,400) $ 2,167,200 At December 31, 2022, the contract liability was $0.5 million as compared to a contract asset of $2.2 million at December 31, 2021. The uncollected billings were $1.7 million and $1.0 million as of December 31, 2022 and December 31, 2021, respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On January 12, 2023, the Company entered into a purchase and sale agreement for the sale of the Mills Crossing multifamily development located in Bremerton, Washington for $14.3 million. Closing is expected to take place in Q2 2023. On January 20, 2023, the Company’s Board of Directors (the “Board”) voted to suspend the Company’s cash dividend payments on the Company’s 8.0% Series A Cumulative Convertible Preferred Stock, in relation to the negotiation of terms, for the restructuring its loan from BankUnited, N.A. The suspension is beginning with the February 2023 dividend payment and continuing until such time as the Company, with the approval of the Board, reaches a final agreement with the BankUnited, N.A. On February 23, 2023, the Company entered into an amended loan agreement (the “Amendment”) with BankUnited N.A. (the “Lender”) for the restructuring of its Loan Agreement dated March 7, 2022. Pursuant to the Amendment, the Lender agreed to waive any and all defaults to date, the Company’s future compliance with certain financial covenants, and its right to accelerate the loan payments. The Company granted the Lender second mortgage positions on certain properties as well as transferred the membership certificates to the Company’s subsidiaries as collateral. Additionally, the Company agreed to pay the Lender $0.6 million on the 20th of every month which otherwise would have been paid as a dividend to preferred shareholders, and 25% of all net cash proceeds from asset sales, public offerings or any class of stock or debt, private equity captures, or any capital raise. The Company also agreed that it will not close on any new projects without the Lender’s express written consent and will not repurchase any of its outstanding securities. The aforementioned payments will continue to be made until the earlier of March 7, 2024 or until the loan has been paid in full. On February 27, 2023, the Board approved the implementation of the Reverse Stock Split at a ratio of 1-for-20 shares of our common stock. The Company filed Articles of Amendment to its Articles of Incorporation for the Reverse Stock Split with the Washington Secretary of State on March 1, 2023 and the Reverse Stock Split was effected on the Nasdaq Capital Market on March 6, 2023. As a result of the Reverse Stock Split, every 20 shares of common stock issued and outstanding immediately prior to the effective time was, automatically and without any action on the part of the respective holders thereof, combined and converted into one share of common stock. All share and per share amounts of common stock presented in this Report have been retroactively adjusted to reflect the 1-for-20 Reverse Stock Split. On March 24, 2023 the Company agreed to settle the note receivable with Noffke Horizon View, LLC, which was entered into in March 2022 for $3.3 million, for a reduced amount of $2.1 million. (See Note 3. Notes Receivable.) |
NATURE OF OPERATIONS AND SUMM_2
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of PresentationThe 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”). |
Principles of Consolidation | 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. |
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 Under ASC 205-40, Company management has the responsibility to evaluate whether conditions and/or events raise substantial doubt about the Company's ability to meet its future financial obligations as they become due within one year after the date that the financial statements are issued. As required by this standard, the evaluation shall initially not take into consideration the potential mitigating effects of the Company's plans that have not been fully implemented as of the date the financial statements are issued. Regarding the first step of this assessment, the Company's cash and liquidity position as of year-end may not be sufficient to meet its financial obligations for the next 12 months without implementing one or more of management’s plans and initiatives to generate or raise additional capital. Further, the following detrimental events occurred: the closing bid price of the Company's common stock on the Nasdaq Capital Market was below $1.00 for more than 30 consecutive trading days and the Company received a potential delisting notification from Nasdaq; the Company failed to maintain compliance with certain financial covenants within its loan agreements requiring loan amendment or covenant waivers; the Company has no borrowing availability under its revolving credit facility; it has significant construction related debt maturing over the next 12 months; it has had significant uses of cash flows from operations over the past two years; it had a $16.9 million net loss in 2022; and the real estate and construction industries are experiencing declining market conditions which have negatively impacted property valuations as well as financing capabilities and terms. In performing the second step of this assessment, management is required to evaluate whether the Company's plans to mitigate the conditions above alleviate the substantial doubt about the Company's ability to meet its obligations as they become due within one year after the date that the financial statements are issued. As part of management's evaluation of the second step of this assessment, management notes that subsequent to year end, but prior to the filing of these financial statements, the Company has done the following: completed a 1-for-20 reverse stock split increasing its closing bid price above the $1.00 minimum NASDAQ requirement and regaining compliance with this Nasdaq Continued Listing Requirement; executed an Amendment to the Revolver Loan Agreement with BankUnited to alleviate the breach of financial covenants and the bank’s ability to call the loan; has $24.4 million sales closed after December 31, 2022 or under contract as of March 28, 2023 and significant additional assets that are held for sale; has construction loans in place; has met its equity requirement for its Pacific Ridge, Wyndstone, Meadowscape, and Belfair Phase 1 projects; has substantially completed its fee build contracts; shut down its quarry operations; eliminated most of its full time employees in its horizontal infrastructure division; and sold a significant majority of its equipment, all of which was directly or indirectly associated with significant net loss generating activities during 2022. Additionally, the Company's future plans include: raising additional funds through the sales of assets; obtaining new debt financing and/or refinancing existing debt; pulling cash out of one or more of its multifamily properties by obtaining a project level equity partner; and/or raising capital in the private or public equity or debt markets. Based on the properties under contract for sale, interest in the Company's available for sale properties, its prior track record of raising both debt and equity capital, and management's ongoing discussions and negotiations with potential financing partners, management believes it is probable that the Company's plans will be effectively implemented and probable that those plans will mitigate the previously mentioned conditions and events that raised substantial doubt. |
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 shares of common stock for issuance under the 2018 Plan. On June 1, 2022, the stockholders of the Company voted to approve an amendment to the 2018 Plan to increase, by 100,000, the authorized number of shares of common stock reserved for issuance as options under the 2018 Plan. 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 shares of common stock for issuance under the 2020 Plan. On June 1, 2022, the stockholders of the Company voted to approve an amendment to the 2020 Plan to increase, by 100,000, the authorized number of shares of common stock available for awards under the 2020 Plan. 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 is 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, 2022 and 2021 when computing fair value of share-based payments, the Company has considered the following range of assumptions: December 31, 2022 December 31, 2021 Risk-free interest rate 1.73%-3.54% 0.17%-0.84% Exercise price $22.40-$60.00 $55.20 - $100.00 Expected life of grants in years 3.93-6.51 2.50-6.50 Expected volatility of underlying stock 42.34%-48.13% 42.30%-56.00% 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 periods. 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 17. Stockholders’ Equity.) Reverse Stock Split On March 6, 2023, the Company effected a 1-for-20 reverse stock split of its issued and outstanding shares of common |
Earnings (Loss) Per Share | Earnings (Loss) Per Share 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. The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income (loss) attributable to common stockholders per share of common stock for the years ended December 31, 2022 and 2021. Year Ended December 31, 2022 Year Ended December 31, 2021 Numerator: Net income (loss) attributable to common stockholders $ (24,681,600) $ 6,133,600 Effect of dilutive securities: — 2,724,900 Diluted net income (loss) $ (24,681,600) $ 8,858,500 Denominator: Weighted average common shares outstanding - basic 699,490 716,837 Dilutive securities (a): Restricted Stock Awards — 89 Options — 7,372 Warrants — 971 Convertible Preferred Stock — 364,409 Weighted average common shares outstanding and assumed conversion – diluted 699,490 1,089,678 Basic net earnings (loss) per common share $ (35.29) $ 8.56 Diluted net earnings (loss) per common share $ (35.29) $ 8.13 (a) - Outstanding anti-dilutive securities excluded: Unvested restricted stock awards 12,000 2,250 Stock options 37,546 13,500 Warrants to purchase common stock (1) 18,447,564 18,464,335 Convertible preferred stock (2) 3,799,799 — Warrants to purchase convertible preferred stock (2) 12,000 12,000 (1) The number of outstanding warrants did not change or split pursuant to the reverse stock split, but the number of shares of common stock issuable upon exercise will be adjusted based on a 1 to 0.050 ratio. (2) Preferred stock and warrants to purchase convertible preferred stock are convertible into common stock on a 0.2778 to 1 ratio. |
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 cash equivalents as of December 31, 2022 and December 31, 2021. |
Restricted Cash | Restricted CashOn August 10, 2021, the Company entered into a Letter of Credit (“LOC”) agreement with WaFd Bank in the amount of $0.6 million. The Company signed a lease on October 5, 2021 for a new office space. The landlord of the property, University Street Properties I, LLC, is the beneficiary of the LOC. The amount of funds that cover this LOC were moved by WaFd Bank to a controlled account on August 13, 2021. |
Accounts Receivable | Accounts ReceivableAccounts receivables are reported at the amount the Company expects to collect from outstanding balances. The Company provides for an allowance for doubtful accounts 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. |
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. |
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: Construction Equipment 5-10 years Leasehold Improvements The lesser of 10 years or the remaining life of the lease Furniture and Fixtures 5 years Computers 3 years Vehicles 10 years |
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 constructed is completed. The capitalized costs are recorded as part of the asset to which they relate and are expensed when the underlying asset is sold. The Company capitalized interest from related party borrowings of $1.1 million and $1.0 million for the years ended December 31, 2022 and 2021, respectively. The Company capitalized interest from third-party borrowings of $5.7 million and $2.4 million for the years ended December 31, 2022 and 2021, respectively. 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. |
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 19. Uncompleted Contracts.) Revenues from contracts with customers are summarized by category as follows for the years ended December 31, 2022 and 2021: Year Ended Year Ended December 31, 2022 December 31, 2021 Homes $ 28,670,000 $ 17,654,600 Developed Lots 9,510,000 26,825,500 Entitled Land 7,880,000 20,625,000 Fee Build 9,124,000 6,802,900 Multi-family 175,900 — Construction Materials 54,400 444,700 Total Revenue $ 55,414,300 $ 72,352,700 The following table disaggregates the Company’s revenue based on the timing of satisfaction of performance obligations for the years ended December 31, 2022 and 2021: Year Ended Year Ended December 31, 2022 December 31, 2021 Performance obligations satisfied at a point in time $ 46,290,300 $ 65,549,800 Performance obligations satisfied over time 9,124,000 6,802,900 Total Revenue $ 55,414,300 $ 72,352,700 |
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. 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. |
Advertising | AdvertisingAdvertising expenses, which are expensed as incurred and included in operating expenses |
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 |
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 uncertain tax positions as of December 31, 2022 and December 31, 2021. |
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 is not expected to 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. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews long-lived 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, 2022 and December 31, 2021, there were no impairment losses recognized for long-lived assets. |
NATURE OF OPERATIONS AND SUMM_3
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Statement of Subsidiaries | The consolidated financial statements include the following subsidiaries of Harbor Custom Development, Inc. as of the reporting period ending dates as follow: Names Dates of Formation Attributable Interest December 31, December 31, Saylor View Estates, LLC* March 30, 2014 N/A 51 % Harbor Materials, LLC** July 5, 2018 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 100 % 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 % N/A Broadmoor Ventures, LLC August 24, 2022 100 % N/A Winding Lane Estate LLC November 30, 2022 100 % N/A *Saylor View Estates, LLC was voluntarily dissolved with the State of Washington as of January 20, 2022. **Harbor Materials, LLC was voluntarily dissolved with the State of Washington as of January 29, 2021. |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | For the years ended December 31, 2022 and 2021 when computing fair value of share-based payments, the Company has considered the following range of assumptions: December 31, 2022 December 31, 2021 Risk-free interest rate 1.73%-3.54% 0.17%-0.84% Exercise price $22.40-$60.00 $55.20 - $100.00 Expected life of grants in years 3.93-6.51 2.50-6.50 Expected volatility of underlying stock 42.34%-48.13% 42.30%-56.00% Dividends — — |
Schedule of Net Income (Loss) Per Share | The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income (loss) attributable to common stockholders per share of common stock for the years ended December 31, 2022 and 2021. Year Ended December 31, 2022 Year Ended December 31, 2021 Numerator: Net income (loss) attributable to common stockholders $ (24,681,600) $ 6,133,600 Effect of dilutive securities: — 2,724,900 Diluted net income (loss) $ (24,681,600) $ 8,858,500 Denominator: Weighted average common shares outstanding - basic 699,490 716,837 Dilutive securities (a): Restricted Stock Awards — 89 Options — 7,372 Warrants — 971 Convertible Preferred Stock — 364,409 Weighted average common shares outstanding and assumed conversion – diluted 699,490 1,089,678 Basic net earnings (loss) per common share $ (35.29) $ 8.56 Diluted net earnings (loss) per common share $ (35.29) $ 8.13 (a) - Outstanding anti-dilutive securities excluded: Unvested restricted stock awards 12,000 2,250 Stock options 37,546 13,500 Warrants to purchase common stock (1) 18,447,564 18,464,335 Convertible preferred stock (2) 3,799,799 — Warrants to purchase convertible preferred stock (2) 12,000 12,000 (1) The number of outstanding warrants did not change or split pursuant to the reverse stock split, but the number of shares of common stock issuable upon exercise will be adjusted based on a 1 to 0.050 ratio. (2) Preferred stock and warrants to purchase convertible preferred stock are convertible into common stock on a 0.2778 to 1 ratio. |
Schedule of Property and Equipment Estimated Useful Lives | Depreciation is computed by the straight-line method (after considering their respective estimated residual values) over the estimated useful lives: Construction Equipment 5-10 years Leasehold Improvements The lesser of 10 years or the remaining life of the lease Furniture and Fixtures 5 years Computers 3 years Vehicles 10 years Property and equipment stated at cost, less accumulated depreciation and amortization, consisted of the following: December 31, 2022 December 31, 2021 Machinery and Equipment $ 505,300 $ 10,577,600 Vehicles 26,200 71,800 Furniture and Fixtures 695,600 420,300 Leasehold Improvements 1,524,000 81,200 Total Fixed Assets 2,751,100 11,150,900 Less Accumulated Depreciation (461,600) (1,951,200) Fixed Assets, Net $ 2,289,500 $ 9,199,700 |
Disaggregation of Revenue From Contracts With Customers | Revenues from contracts with customers are summarized by category as follows for the years ended December 31, 2022 and 2021: Year Ended Year Ended December 31, 2022 December 31, 2021 Homes $ 28,670,000 $ 17,654,600 Developed Lots 9,510,000 26,825,500 Entitled Land 7,880,000 20,625,000 Fee Build 9,124,000 6,802,900 Multi-family 175,900 — Construction Materials 54,400 444,700 Total Revenue $ 55,414,300 $ 72,352,700 The following table disaggregates the Company’s revenue based on the timing of satisfaction of performance obligations for the years ended December 31, 2022 and 2021: Year Ended Year Ended December 31, 2022 December 31, 2021 Performance obligations satisfied at a point in time $ 46,290,300 $ 65,549,800 Performance obligations satisfied over time 9,124,000 6,802,900 Total Revenue $ 55,414,300 $ 72,352,700 |
NOTES RECEIVABLE (Tables)
NOTES RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Financing Receivable Face Amount and Interest Rate | The details of notes receivables, net of valuation allowance are as follows: December 31, 2022 December 31, 2021 Broadmoor Commons LLC $ 1,000,300 $ 500,000 Modern Homestead LLC 1,445,000 1,500,000 Noffke Horizon View, LLC 2,080,000 — Total Notes Receivable $ 4,525,300 $ 2,000,000 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Depreciation is computed by the straight-line method (after considering their respective estimated residual values) over the estimated useful lives: Construction Equipment 5-10 years Leasehold Improvements The lesser of 10 years or the remaining life of the lease Furniture and Fixtures 5 years Computers 3 years Vehicles 10 years Property and equipment stated at cost, less accumulated depreciation and amortization, consisted of the following: December 31, 2022 December 31, 2021 Machinery and Equipment $ 505,300 $ 10,577,600 Vehicles 26,200 71,800 Furniture and Fixtures 695,600 420,300 Leasehold Improvements 1,524,000 81,200 Total Fixed Assets 2,751,100 11,150,900 Less Accumulated Depreciation (461,600) (1,951,200) Fixed Assets, Net $ 2,289,500 $ 9,199,700 |
REAL ESTATE (Tables)
REAL ESTATE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Real Estate [Abstract] | |
Schedule of Real Estate Assets | Real Estate consisted of the following components: December 31, 2022 December 31, 2021 Land Held for Development $ 47,166,700 $ 73,524,400 Construction in Progress 123,927,300 43,362,700 Held for Sale 34,384,200 5,249,000 Total Real Estate $ 205,478,200 $ 122,136,100 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consisted of the following: December 31, 2022 December 31, 2021 Trade Accounts Payable $ 11,472,100 $ 5,558,400 Income Tax Payable — 2,415,900 Retainage Payable 1,130,300 445,800 Accrued Compensation, Bonuses, and Benefits 384,700 1,071,700 Accrued Quarry Reclamation Costs 76,200 500,000 Other Accruals 1,027,400 671,000 Total Accounts Payable and Accrued Expenses $ 14,090,700 $ 10,662,800 |
EQUIPMENT LOANS (Tables)
EQUIPMENT LOANS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Equipment Loans | Equipment loans consists of the following: December 31, 2022 December 31, 2021 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 $11,600: $ 2,057,100 $ 5,268,500 Book value of collateralized equipment: $ 11,800 $ 7,229,000 |
Schedule of Future Equipment Loan Maturities | Future equipment loan maturities are as follows: For the year ended December 31: 2023 $ 2,057,100 2024 — 2025 — 2026 — 2027 — Total $ 2,057,100 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Components of Lease Expense | The components of lease expense were as follows: Year Ended Year Ended December 31, 2022 December 31, 2021 Finance leases expense Depreciation of assets $ 76,000 $ 152,700 Interest on lease liabilities 17,700 43,400 Operating lease expense 677,400 550,400 Total net lease cost $ 771,100 $ 746,500 Supplemental cash flow and other information related to leases was as follows: Year Ended Year Ended December 31, 2022 December 31, 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases - lease payments $ (358,100) $ (301,100) Operating cash flows from operating leases - lease incentives 613,900 — Financing cash flows from finance leases - lease payments (104,100) (356,900) Assets obtained in exchange for lease liabilities: Operating leases $ — $ 2,943,800 Finance leases 110,000 — Weighted average remaining lease term (in years): Operating leases 9.2 8.6 Finance leases 0.9 2.7 Weighted average discount rate: Operating leases 4.0 % 4.7 % Finance leases 7.5 % 4.8 % |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows: December 31, 2022 December 31, 2021 Operating leases: Operating lease ROU assets $ 1,926,100 $ 3,429,700 Total ROU Liabilities $ 2,779,400 $ 3,484,400 Finance leases: Property and equipment, at cost $ 178,800 $ 1,365,500 Less: Accumulated depreciation 79,100 293,100 Property and equipment, net $ 99,700 $ 1,072,400 Total Finance lease liabilities $ 154,500 $ 543,400 |
Schedule of Minimum Lease Payments Under the Terms of the Leases | The minimum lease payments under the terms of the leases are as follows for the years ended December 31: Operating Leases Finance Leases Total 2023 $ 331,500 $ 134,700 $ 466,200 2024 316,300 29,900 346,200 2025 325,700 — 325,700 2026 335,400 — 335,400 2027 345,500 — 345,500 Thereafter 1,721,600 — 1,721,600 Total lease payments $ 3,376,000 $ 164,600 $ 3,540,600 Less amount of discount/interest (596,600) (10,100) (606,700) $ 2,779,400 $ 154,500 $ 2,933,900 |
Finance Lease, Liability, Fiscal Year Maturity | The minimum lease payments under the terms of the leases are as follows for the years ended December 31: Operating Leases Finance Leases Total 2023 $ 331,500 $ 134,700 $ 466,200 2024 316,300 29,900 346,200 2025 325,700 — 325,700 2026 335,400 — 335,400 2027 345,500 — 345,500 Thereafter 1,721,600 — 1,721,600 Total lease payments $ 3,376,000 $ 164,600 $ 3,540,600 Less amount of discount/interest (596,600) (10,100) (606,700) $ 2,779,400 $ 154,500 $ 2,933,900 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 and 2021 are set forth below: December 31, 2022 December 31, 2021 Deferred tax assets: Federal NOL carryforwards $ 1,905,900 $ 1,926,000 UNICAP 1,865,900 598,400 Lease liability 586,300 736,400 Stock based compensation 15,400 54,900 Investments 200 7,000 Impairment loss on note receivable and real estate and loss provision on fee build contracts 1,046,700 — Sec. 163(j) interest deduction carryforwards 273,100 — Tax Credits 72,000 — Total assets $ 5,765,500 $ 3,322,700 Deferred tax liabilities: Property and equipment $ 480,200 $ 1,948,900 Right of use assets 553,800 724,800 Sec. 481(a) adjustments 72,200 — Total liabilities $ 1,106,200 $ 2,673,700 Subtotal deferred tax assets $ 4,659,300 $ 649,000 Valuation allowance — — Net deferred tax assets $ 4,659,300 $ 649,000 |
Schedule of Components of Income Tax Expense and the Effective Tax Rates | The components of income tax expense (benefit) and the effective tax rates for the years ended December 31, 2022 and 2021 are as follows: Year Ended Year Ended December 31, 2022 December 31, 2021 Current: Federal $ (456,300) $ 2,394,500 State 8,400 21,400 Total Current (447,900) 2,415,900 Deferred: Federal (3,989,100) (649,000) State (21,200) — Total Deferred (4,010,300) (649,000) Valuation Allowance — — Total Income Tax Expense (Benefit) $ (4,458,200) $ 1,766,900 |
Schedule of Effective Income Tax Rate Reconciliation | The expected tax rate differs from the U.S. Federal statutory rate as follows: 2022 2021 US federal statutory rate 21.0 % 21.0 % Change in federal valuation allowance — % (3.1) % Accrual to return changes and other adjustments to deferred balances (0.5) % 0.2 % Tax credits 0.3 % (2.6) % Incentive stock options (0.1) % 0.5 % State taxes 0.1 % 0.2 % Change in tax rate 0.1 % 0.1 % Other — % 0.1 % Effective Tax Rate 20.9 % 16.4 % |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Share-based Payment Arrangement, Option, Activity | The following is a summary of the Company’s option activity: Options Weighted Outstanding – January 1, 2021 22,109 $ 50.54 Exercisable – January 1, 2021 10,954 $ 26.16 Granted 12,000 $ 64.68 Exercised (2,252) $ 8.00 Forfeited/Cancelled (8,694) $ 65.37 Outstanding – December 31, 2021 23,163 $ 56.43 Exercisable – December 31, 2021 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 |
Share-based Payment Arrangement, Option, Exercise Price Range | Options Outstanding Options Exercisable Exercise Price Number Weighted Weighted Number Weighted $7.99 - $130.00 37,546 7.94 $ 41.51 19,696 $ 55.55 |
Share-based Payment Arrangement, Activity | The following is a summary of the Company’s common stock warrant activity: Warrants Weighted Outstanding – January 1, 2021 110,859 $ 6.06 Exercisable – January 1, 2021 22,524 $ 0.40 Granted 18,376,000 $ 3.45 Exercised — $ — Forfeited/Cancelled — $ — Outstanding – December 31, 2021 18,486,859 $ 3.46 Exercisable – December 31, 2021 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 Warrants Outstanding Warrants Exercisable Exercise Price Number Weighted Weighted Number Weighted $0.40 - $7.50 18,447,564 3.68 $ 3.47 18,380,897 $ 3.47 Warrants Weighted Outstanding – January 1, 2021 — $ — Exercisable – January 1, 2021 — $ — Granted 12,000 $ 24.97 Exercised — $ — Forfeited/Cancelled — $ — Outstanding – December 31, 2021 12,000 $ 24.97 Exercisable – December 31, 2021 12,000 $ 24.97 Granted — $ — Exercised — $ — Forfeited/Cancelled — $ — Outstanding – December 31, 2022 12,000 $ 24.97 Exercisable – December 31, 2022 12,000 $ 24.97 Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Weighted Weighted Number Exercisable Weighted $ 24.97 12,000 3.44 $ 24.97 12,000 $ 24.97 |
Nonvested Restricted Stock Shares Activity | The following is a summary of the Company’s restricted stock activity: Restricted Stock Weighted Non Vested Balance - January 1, 2021 1,275 $ 90.60 Granted 9,000 $ 51.62 Vested 3,025 $ 74.29 Forfeited/Cancelled — $ — Non Vested Balance - December 31, 2021 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 |
SEGMENTS (Tables)
SEGMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | 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, 2022 and 2021. Year Ended December 31, 2022 Year Ended December 31, 2021 Revenue by segment Homes $ 28,670,000 $ 17,654,600 Developed lots 9,510,000 26,825,500 Entitled land 7,880,000 20,625,000 Multi-family 175,900 — Fee Build 9,124,000 6,802,900 Other 54,400 444,700 $ 55,414,300 $ 72,352,700 Cost of goods sold by segment Homes $ 24,027,100 $ 15,168,500 Developed lots 9,797,700 15,885,300 Entitled land 4,060,200 11,689,100 Multi-family 2,564,400 — Fee Build 13,597,500 5,991,300 Other 1,819,900 1,685,200 $ 55,866,800 $ 50,419,400 Gross profit (loss) by segment Homes $ 4,642,900 $ 2,486,100 Developed lots (287,700) 10,940,200 Entitled land 3,819,800 8,935,900 Multi-family (2,388,500) — Fee Build (4,473,500) 811,600 Other (1,765,500) (1,240,500) $ (452,500) $ 21,933,300 The following represents total assets for the Company’s reportable segments at December 31, 2022 and December 31, 2021: December 31, 2022 December 31, 2021 Homes $ 29,880,500 $ 36,615,600 Developed lots 43,469,900 8,219,500 Entitled land 9,499,600 28,157,800 Multi-family 131,485,900 47,679,400 Fee Build 1,703,200 3,325,300 Unallocated (Shared) 20,127,300 45,702,500 Total Assets $ 236,166,400 $ 169,700,100 |
UNCOMPLETED CONTRACTS (Tables)
UNCOMPLETED CONTRACTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Contractors [Abstract] | |
Contract with Customer, Contract Asset, Contract Liability, and Receivable | Costs, estimated earnings and billings on uncompleted contracts are summarized as follows at December 31, 2022 and December 31, 2021: December 31, 2022 December 31, 2021 Costs incurred on uncompleted contracts $ 19,429,800 $ 5,991,300 Estimated earnings (loss) (3,495,100) 811,600 Costs and estimated earnings on uncompleted contracts 15,934,700 6,802,900 Billings to date 16,273,000 4,635,700 Costs and estimated earnings in excess of billings on uncompleted contracts — 2,167,200 Billings in excess of costs and estimated earnings on uncompleted contracts (338,300) — Provision for loss on contract (159,100) — Contract Assets (Liabilities), net $ (497,400) $ 2,167,200 |
NATURE OF OPERATIONS AND SUMM_4
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - SCHEDULE OF STATEMENT OF SUBSIDIARIES (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Saylor View Estates, LLC | ||
Noncontrolling Interest [Line Items] | ||
Attributable Interest | 51% | |
Belfair Apartments, LLC | ||
Noncontrolling Interest [Line Items] | ||
Attributable Interest | 100% | 100% |
Pacific Ridge CMS, LLC | ||
Noncontrolling Interest [Line Items] | ||
Attributable Interest | 100% | 100% |
Tanglewilde, LLC | ||
Noncontrolling Interest [Line Items] | ||
Attributable Interest | 100% | 100% |
HCDI FL CONDO LLC | ||
Noncontrolling Interest [Line Items] | ||
Attributable Interest | 100% | 100% |
HCDI Mira, LLC | ||
Noncontrolling Interest [Line Items] | ||
Attributable Interest | 100% | 100% |
HCDI, Bridgeview LLC | ||
Noncontrolling Interest [Line Items] | ||
Attributable Interest | 100% | 100% |
HCDI Wyndstone, LLC | ||
Noncontrolling Interest [Line Items] | ||
Attributable Interest | 100% | 100% |
HCDI Semiahmoo, LLC | ||
Noncontrolling Interest [Line Items] | ||
Attributable Interest | 100% | 100% |
Mills Crossing, LLC | ||
Noncontrolling Interest [Line Items] | ||
Attributable Interest | 100% | |
Broadmoor Ventures, LLC | ||
Noncontrolling Interest [Line Items] | ||
Attributable Interest | 100% | |
Winding Lane Estate LLC | ||
Noncontrolling Interest [Line Items] | ||
Attributable Interest | 100% |
NATURE OF OPERATIONS AND SUMM_5
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - NARRATIVE (Details) | 12 Months Ended | ||||||||||
Mar. 24, 2023 USD ($) | Mar. 06, 2023 | Jun. 01, 2022 shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Aug. 10, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 03, 2020 shares | Nov. 19, 2018 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stockholders' equity | $ 75,555,900 | $ 99,737,800 | $ 6,414,700 | ||||||||
Net income (loss) | (16,922,200) | 8,856,800 | |||||||||
Cash equivalents | 0 | 0 | |||||||||
Restricted cash and cash equivalents | $ 600,000 | ||||||||||
Accounts receivable, allowance for credit loss | 0 | 0 | |||||||||
Financing receivable impairment loss | (1,200,000) | 0 | |||||||||
Financing receivable, face amount | 4,500,000 | ||||||||||
Impairment loss on real estate | 3,602,600 | 0 | |||||||||
Advertising expense | 400,000 | 100,000 | |||||||||
Unrecognized tax | 0 | 0 | |||||||||
Impairment, long-lived asset | 0 | 0 | |||||||||
Subsequent Event | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock split, conversion ratio | 0.0500 | ||||||||||
Sales Of Under Contract | $ 24,400,000 | ||||||||||
Loans Payable | Rocklin Winding Lane 22, LLC | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Long-term debt | 1,000,000 | ||||||||||
Winding Lane Estate LLC | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Impairment loss on real estate | 1,200,000 | ||||||||||
Pacific Ridge Aparments | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Impairment loss on real estate | 2,400,000 | ||||||||||
Rocklin Winding Lane 22, LLC | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Financing receivable impairment loss | $ (800,000) | ||||||||||
Financing receivable, face amount | $ 4,800,000 | ||||||||||
Real estate acquired through foreclosure | 5,100,000 | ||||||||||
Third Party | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Interest costs capitalized | 5,700,000 | 2,400,000 | |||||||||
Affiliated Entity | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Interest costs capitalized | 1,100,000 | 1,000,000 | |||||||||
2018 Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Common stock for issuance of reserved shares (in shares) | shares | 33,784 | ||||||||||
Authorized number of shares of common stock (in shares) | shares | 100,000 | ||||||||||
2020 Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Common stock for issuance of reserved shares (in shares) | shares | 35,000 | ||||||||||
Authorized number of shares of common stock (in shares) | shares | 100,000 | ||||||||||
Non-Controlling Interest | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stockholders' equity | 0 | (1,291,600) | $ (1,289,900) | ||||||||
Net income (loss) | $ (500) | $ (1,700) |
NATURE OF OPERATIONS AND SUMM_6
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - SCHEDULE OF FAIR VALUE ASSUMPTIONS OF SHARE-BASED PAYMENTS (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate, minimum | 1.73% | 0.17% |
Risk-free interest rate, maximum | 3.54% | 0.84% |
Expected volatility of underlying stock, minimum | 42.34% | 42.30% |
Expected volatility of underlying stock, maximum | 48.13% | 56% |
Dividends | 0% | 0% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise price | $ 22.40 | $ 55.20 |
Expected life of grants in years | 3 years 11 months 4 days | 2 years 6 months |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise price | $ 60 | $ 100 |
Expected life of grants in years | 6 years 6 months 3 days | 6 years 6 months |
NATURE OF OPERATIONS AND SUMM_7
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - SCHEDULE OF NET INCOME (LOSS) PER SHARE (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Net income (loss) attributable to common stockholders | $ | $ (24,681,600) | $ 6,133,600 |
Effect of dilutive securities: | $ | 0 | 2,724,900 |
Diluted net income (loss) | $ | $ (24,681,600) | $ 8,858,500 |
Weighted average common shares outstanding - basic (in shares) | 699,490 | 716,837 |
Weighted average common shares outstanding and assumed conversion – diluted (in shares) | 699,490 | 1,089,678 |
Basic net earnings (loss) per common share (in dollars per share) | $ / shares | $ (35.29) | $ 8.56 |
Diluted net earnings (loss) per common share (in dollars per share) | $ / shares | $ (35.29) | $ 8.13 |
Restricted Stock Awards | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Dilutive securities (in shares) | 0 | 89 |
Options | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Dilutive securities (in shares) | 0 | 7,372 |
Outstanding anti-dilutive securities excluded (in shares) | 37,546 | 13,500 |
Warrants | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Dilutive securities (in shares) | 0 | 971 |
Convertible Preferred Stock | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Dilutive securities (in shares) | 0 | 364,409 |
Outstanding anti-dilutive securities excluded (in shares) | 3,799,799 | 0 |
Preferred stock convertible into common shares | 0.2778 | |
Unvested restricted stock awards | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Outstanding anti-dilutive securities excluded (in shares) | 12,000 | 2,250 |
Warrants to purchase common stock | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Outstanding anti-dilutive securities excluded (in shares) | 18,447,564 | 18,464,335 |
Stock split, conversion ratio | 0.050 | |
Warrants to purchase convertible preferred stock | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Outstanding anti-dilutive securities excluded (in shares) | 12,000 | 12,000 |
Preferred stock convertible into common shares | 0.2778 |
NATURE OF OPERATIONS AND SUMM_8
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - SCHEDULE OF PROPERTY AND EQUIPMENT ESTIMATED USEFUL LIVES (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Construction Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Construction Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Leasehold Improvements | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Furniture and Fixtures | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Computers | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Vehicles | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
NATURE OF OPERATIONS AND SUMM_9
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - DISAGGREGATION OF REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total Revenue | $ 55,414,300 | $ 72,352,700 |
Performance obligations satisfied at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 46,290,300 | 65,549,800 |
Performance obligations satisfied over time | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 9,124,000 | 6,802,900 |
Homes | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 28,670,000 | 17,654,600 |
Developed Lots | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 9,510,000 | 26,825,500 |
Entitled Land | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 7,880,000 | 20,625,000 |
Fee Build | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 9,124,000 | 6,802,900 |
Multi-family | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 175,900 | 0 |
Construction Materials | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | $ 54,400 | $ 444,700 |
CONCENTRATIONS (Details)
CONCENTRATIONS (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Concentration Risk [Line Items] | ||
Cash, uninsured amount | $ 8.1 | $ 24.5 |
Customer One | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | Developed Lots | ||
Concentration Risk [Line Items] | ||
Concentration risk (in percent) | 59% | 26% |
Customer One | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | Entitled Land | ||
Concentration Risk [Line Items] | ||
Concentration risk (in percent) | 57% | 51% |
Customer One | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | Fee Build | ||
Concentration Risk [Line Items] | ||
Concentration risk (in percent) | 100% | 100% |
Customer Two | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | Developed Lots | ||
Concentration Risk [Line Items] | ||
Concentration risk (in percent) | 25% | 23% |
Customer Two | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | Entitled Land | ||
Concentration Risk [Line Items] | ||
Concentration risk (in percent) | 43% | 45% |
Customer Three | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | Developed Lots | ||
Concentration Risk [Line Items] | ||
Concentration risk (in percent) | 18% | |
Customer Four | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | Developed Lots | ||
Concentration Risk [Line Items] | ||
Concentration risk (in percent) | 14% | |
Customer Five | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | Developed Lots | ||
Concentration Risk [Line Items] | ||
Concentration risk (in percent) | 14% |
NOTES RECEIVABLE - NARRATIVE (D
NOTES RECEIVABLE - NARRATIVE (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2022 | |
Loans and Leases Receivable Disclosure [Line Items] | ||||
Financing receivable, face amount | $ 4,500,000 | |||
Financing receivable outstanding | 4,525,300 | $ 2,000,000 | ||
Interest income | 500,000 | 0 | ||
Decrease in notes receivable | 3,725,300 | 2,000,000 | ||
Noffke Horizon View, LLC | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Financing receivable, face amount | $ 3,300,000 | |||
Financing receivable outstanding | $ 2,080,000 | $ 0 | ||
Noffke Horizon View, LLC | Subsequent Event | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Decrease in notes receivable | $ 2,100,000 | |||
Minimum | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Financing receivable, interest rate | 5% | |||
Maximum | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Financing receivable, interest rate | 9% |
NOTES RECEIVABLE - FACE AMOUNT
NOTES RECEIVABLE - FACE AMOUNT AND INTEREST RATE (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Notes Receivable | $ 4,525,300 | $ 2,000,000 |
Broadmoor Commons LLC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Notes Receivable | 1,000,300 | 500,000 |
Modern Homestead LLC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Notes Receivable | 1,445,000 | 1,500,000 |
Noffke Horizon View, LLC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Notes Receivable | $ 2,080,000 | $ 0 |
PROPERTY AND EQUIPMENT - SCHEDU
PROPERTY AND EQUIPMENT - SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | $ 2,751,100 | $ 11,150,900 |
Less Accumulated Depreciation | (461,600) | (1,951,200) |
Fixed Assets, Net | 2,289,500 | 9,199,700 |
Machinery and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 505,300 | 10,577,600 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 26,200 | 71,800 |
Furniture and Fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 695,600 | 420,300 |
Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | $ 1,524,000 | $ 81,200 |
PROPERTY AND EQUIPMENT - NARRAT
PROPERTY AND EQUIPMENT - NARRATIVE (Details ) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 1,407,400 | $ 1,084,200 |
REAL ESTATE (Details)
REAL ESTATE (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Real Estate [Abstract] | ||
Land Held for Development | $ 47,166,700 | $ 73,524,400 |
Construction in Progress | 123,927,300 | 43,362,700 |
Held for Sale | 34,384,200 | 5,249,000 |
Total Real Estate | $ 205,478,200 | $ 122,136,100 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Trade Accounts Payable | $ 11,472,100 | $ 5,558,400 |
Income Tax Payable | 0 | 2,415,900 |
Retainage Payable | 1,130,300 | 445,800 |
Accrued Compensation, Bonuses, and Benefits | 384,700 | 1,071,700 |
Accrued Quarry Reclamation Costs | 76,200 | 500,000 |
Other Accruals | 1,027,400 | 671,000 |
Total Accounts Payable and Accrued Expenses | $ 14,090,700 | $ 10,662,800 |
REVOLVING LINE OF CREDIT (Detai
REVOLVING LINE OF CREDIT (Details) - USD ($) | 12 Months Ended | |||
Feb. 23, 2023 | Mar. 07, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Line of Credit Facility [Line Items] | ||||
Revolving Line of Credit Loan, net of Unamortized Debt Discount of $0.6 million and $0 respectively | $ 24,359,700 | $ 0 | ||
Revolving line of credit loan, net of debt discount | 600,000 | 0 | ||
Revolving Credit Facility | Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 25,000,000 | |||
Debt instrument, term (in years) | 2 years | |||
Capitalized debt issuance costs | 1,100,000 | |||
Incurred interest expense | 1,600,000 | $ 0 | ||
Revolving Line of Credit Loan, net of Unamortized Debt Discount of $0.6 million and $0 respectively | $ 25,000,000 | |||
Revolving Credit Facility | Line of Credit | Subsequent Event | ||||
Line of Credit Facility [Line Items] | ||||
Payment of principal reduction | $ 600,000 | |||
Percentage of assets sales and capital raises | 25% | |||
Revolving Credit Facility | Line of Credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 4.75% |
EQUIPMENT LOANS - SCHEDULE OF E
EQUIPMENT LOANS - SCHEDULE OF EQUIPMENT LOANS (Details) - Notes Payable to Banks - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Total | $ 2,057,100 | $ 5,268,500 |
Book value of collateralized equipment: | $ 11,800 | $ 7,229,000 |
Minimum | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate (in percent) | 0% | |
Debt instrument, periodic payment | $ 400 | |
Maximum | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate (in percent) | 13.89% | |
Debt instrument, periodic payment | $ 11,600 |
EQUIPMENT LOANS - SCHEDULE OF F
EQUIPMENT LOANS - SCHEDULE OF FUTURE EQUIPMENT LOAN MATURITIES (Details) - Notes Payable to Banks - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
2023 | $ 2,057,100 | |
2024 | 0 | |
2025 | 0 | |
2026 | 0 | |
2027 | 0 | |
Long-term debt | 2,057,100 | $ 5,268,500 |
Interest expense | $ 200,000 | $ 200,000 |
CONSTRUCTION LOANS (Details)
CONSTRUCTION LOANS (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Short-term Debt [Line Items] | ||
Debt discount | $ 1.9 | $ 4.4 |
Construction Loan Payable | ||
Short-term Debt [Line Items] | ||
Short-term debt | 109.4 | 39.4 |
Debt discount | 1.9 | 4.4 |
Book value of collateralized equipment: | $ 193.1 | $ 122.1 |
Construction Loan Payable | Minimum | ||
Short-term Debt [Line Items] | ||
Debt instrument, term (in years) | 1 year | |
Debt instrument, interest rate (in percent) | 5% | |
Construction Loan Payable | Maximum | ||
Short-term Debt [Line Items] | ||
Debt instrument, term (in years) | 2 years | |
Debt instrument, interest rate (in percent) | 13% |
LETTER OF CREDIT (Details)
LETTER OF CREDIT (Details) - Line of Credit - Letter of Credit | Aug. 10, 2021 USD ($) |
Line of Credit Facility [Line Items] | |
Line of credit facility, maximum borrowing capacity | $ 600,000 |
Prime Rate | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1% |
NOTE PAYABLE DIRECTORS & OFFI_2
NOTE PAYABLE DIRECTORS & OFFICERS INSURANCE (Details) - USD ($) | Aug. 28, 2022 | Aug. 28, 2021 | Dec. 31, 2022 | Dec. 31, 2021 |
Short-term Debt [Line Items] | ||||
Notes payable | $ 378,500 | $ 903,800 | ||
Notes Payable, Other Payables | ||||
Short-term Debt [Line Items] | ||||
D&O insurance, face vale | $ 600,000 | $ 1,500,000 | ||
D&O insurance expense | $ 100,000 | 100,000 | ||
Short-term debt | $ 1,400,000 | |||
Debt instrument, term (in years) | 11 months | 11 months | ||
Debt instrument, interest | 4.75% | 4.42% | ||
Notes payable | $ 400,000 | $ 900,000 |
DEFINED CONTRIBUTION PLAN (Deta
DEFINED CONTRIBUTION PLAN (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Retirement Benefits [Abstract] | ||
Defined contribution plan, cost | $ 0.1 | $ 0.1 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - Purchase and Sale Agreement - Forecast $ in Millions | 3 Months Ended | ||||
Sep. 30, 2023 USD ($) home | Jun. 30, 2024 USD ($) a | Mar. 31, 2024 USD ($) a | Dec. 31, 2023 USD ($) a | Jun. 30, 2023 USD ($) a | |
East Bremerton, Washington | |||||
Other Commitments [Line Items] | |||||
Number of town homes | home | 33 | ||||
Other commitment | $ 2 | $ 14.3 | |||
Blaine, Washington | |||||
Other Commitments [Line Items] | |||||
Other commitment | $ 13.5 | ||||
Area of land | a | 438 | ||||
Port Orchard, Washington | |||||
Other Commitments [Line Items] | |||||
Other commitment | $ 2.6 | ||||
Area of land | a | 4.81 | ||||
Stanwood, Washington | |||||
Other Commitments [Line Items] | |||||
Other commitment | $ 4.6 | ||||
Area of land | a | 15.30 | ||||
Tacoma, Washington | |||||
Other Commitments [Line Items] | |||||
Other commitment | $ 5.8 | ||||
Area of land | a | 0.70 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||
Due to related parties | $ 8,122,800 | $ 13,426,600 |
Due To SGRE, LLC | Management | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 0 | 10,000 |
Expenses from transactions with related party | $ 40,000 | 100,000 |
Percentage of commission payable | 25% | |
Due To SGRE, LLC | Management | SGRE, LLC | ||
Related Party Transaction [Line Items] | ||
Related party, ownership percentage | 100% | |
Sound Equity, LLC | Construction Loan | Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Due to related parties | $ 8,200,000 | 14,500,000 |
Expenses from transactions with related party | 100,000 | 600,000 |
Remaining debt discount | 100,000 | 200,000 |
Interest expense, related party | $ 1,100,000 | $ 1,000,000 |
Sound Equity, LLC | Minimum | Construction Loan | Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Payment terms | 12 months | |
Related party transaction, interest rate | 7.99% | |
Sound Equity, LLC | Maximum | Construction Loan | Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Payment terms | 21 months | |
Related party transaction, interest rate | 9.99% |
LEASES - NARRATIVE (Details)
LEASES - NARRATIVE (Details) | Dec. 31, 2022 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease, renewal term | 3 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease, renewal term | 5 years |
LEASES - COMPONENTS OF LEASE EX
LEASES - COMPONENTS OF LEASE EXPENSE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Depreciation of assets | $ 76,000 | $ 152,700 |
Interest on lease liabilities | 17,700 | 43,400 |
Operating lease expense | 677,400 | 550,400 |
Total net lease cost | $ 771,100 | $ 746,500 |
LEASES - SUPPLEMENTAL BALANCE S
LEASES - SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Operating leases: | ||
Operating lease ROU assets | $ 1,926,100 | $ 3,429,700 |
Total ROU Liabilities | 2,779,400 | 3,484,400 |
Finance leases: | ||
Property and equipment, at cost | 178,800 | 1,365,500 |
Less: Accumulated depreciation | 79,100 | 293,100 |
Property and equipment, net | 99,700 | 1,072,400 |
Total Finance lease liabilities | $ 154,500 | $ 543,400 |
LEASES - SUPPLEMENTAL CASH FLOW
LEASES - SUPPLEMENTAL CASH FLOW AND OTHER INFORMATION RELATED TO LEASES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Operating cash flows from operating leases - lease payments | $ (358,100) | $ (301,100) |
Operating cash flows from operating leases - lease incentives | 613,900 | 0 |
Financing cash flows from finance leases - lease payments | (104,100) | (356,900) |
Operating leases | 0 | 2,943,800 |
Finance leases | $ 110,000 | $ 0 |
Weighted average remaining lease term, Operating leases (in years) | 9 years 2 months 12 days | 8 years 7 months 6 days |
Weighted average remaining lease term, Finance leases (in years) | 10 months 24 days | 2 years 8 months 12 days |
Weighted average discount rate, Operating leases (in percent) | 4% | 4.70% |
Weighted average discount rate, Finance leases (in percent) | 7.50% | 4.80% |
LEASES - MINIMUM LEASE PAYMENTS
LEASES - MINIMUM LEASE PAYMENTS UNDER THE TERMS OF THE LEASES (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Leases | ||
2023 | $ 331,500 | |
2024 | 316,300 | |
2025 | 325,700 | |
2026 | 335,400 | |
2027 | 345,500 | |
Thereafter | 1,721,600 | |
Total lease payments | 3,376,000 | |
Less amount of discount/interest | (596,600) | |
Operating Leases | 2,779,400 | $ 3,484,400 |
Finance Leases | ||
2023 | 134,700 | |
2024 | 29,900 | |
2025 | 0 | |
2026 | 0 | |
2027 | 0 | |
Thereafter | 0 | |
Total lease payments | 164,600 | |
Less amount of discount/interest | (10,100) | |
Finance Leases | 154,500 | $ 543,400 |
Total Leases [Abstract] | ||
2023 | 466,200 | |
2024 | 346,200 | |
2025 | 325,700 | |
2026 | 335,400 | |
2027 | 345,500 | |
Thereafter | 1,721,600 | |
Total lease payments | 3,540,600 | |
Less amount of discount/interest | (606,700) | |
Total lease | $ 2,933,900 |
INCOME TAX - SCHEDULE OF DEFERR
INCOME TAX - SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Federal NOL carryforwards | $ 1,905,900 | $ 1,926,000 |
UNICAP | 1,865,900 | 598,400 |
Lease liability | 586,300 | 736,400 |
Stock based compensation | 15,400 | 54,900 |
Investments | 200 | 7,000 |
Impairment loss on note receivable and real estate and loss provision on fee build contracts | 1,046,700 | 0 |
Sec. 163(j) interest deduction carryforwards | 273,100 | 0 |
Tax Credits | 72,000 | 0 |
Total assets | 5,765,500 | 3,322,700 |
Deferred tax liabilities: | ||
Property and equipment | 480,200 | 1,948,900 |
Right of use assets | 553,800 | 724,800 |
Sec. 481(a) adjustments | 72,200 | 0 |
Total liabilities | 1,106,200 | 2,673,700 |
Subtotal deferred tax assets | 4,659,300 | 649,000 |
Valuation allowance | 0 | 0 |
Net deferred tax assets | $ 4,659,300 | $ 649,000 |
INCOME TAX - NARRATIVE (Details
INCOME TAX - NARRATIVE (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Income Tax Disclosure [Abstract] | ||
Valuation allowance | $ 0 | $ 0 |
Operating loss carryforwards | 9,000,000 | 9,200,000 |
Operating loss carryforwards utilized | $ 0 | $ 1,300,000 |
INCOME TAX - SCHEDULE OF INCOME
INCOME TAX - SCHEDULE OF INCOME TAX EXPENSE AND EFFECTIVE TAX RATES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | ||
Federal | $ (456,300) | $ 2,394,500 |
State | 8,400 | 21,400 |
Total Current | (447,900) | 2,415,900 |
Deferred: | ||
Federal | (3,989,100) | (649,000) |
State | (21,200) | 0 |
Total Deferred | (4,010,300) | (649,000) |
Valuation Allowance | 0 | 0 |
Total Income Tax Expense (Benefit) | $ (4,458,200) | $ 1,766,900 |
INCOME TAX - SCHEDULE OF EXPECT
INCOME TAX - SCHEDULE OF EXPECTED INCOME TAX RATE (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
US federal statutory rate | 21% | 21% |
Change in federal valuation allowance | 0% | (3.10%) |
Accrual to return changes and other adjustments to deferred balances | (0.50%) | 0.20% |
Tax credits | 0.30% | (2.60%) |
Incentive stock options | (0.10%) | 0.50% |
State taxes | 0.10% | 0.20% |
Change in tax rate | 0.10% | 0.10% |
Other | 0% | 0.10% |
Effective Tax Rate | 20.90% | 16.40% |
STOCKHOLDERS_ EQUITY - NARRATIV
STOCKHOLDERS’ EQUITY - NARRATIVE (Details) | 12 Months Ended | ||||||||||||
Mar. 06, 2023 shares | Feb. 27, 2023 shares | Feb. 17, 2023 | Jan. 20, 2023 | Oct. 07, 2021 USD ($) $ / shares shares | Jun. 30, 2021 USD ($) shares | Jun. 11, 2021 USD ($) warrant $ / shares shares | Jan. 20, 2021 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) vote $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | May 10, 2022 USD ($) | Nov. 03, 2021 USD ($) | Dec. 31, 2020 shares | |
Class of Stock [Line Items] | |||||||||||||
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | |||||||||||
Common stock outstanding (in shares) | 718,835 | 657,767 | |||||||||||
Common stock, shares, issued (in shares) | 718,835 | 657,767 | |||||||||||
Common stock, voting rights | vote | 1 | ||||||||||||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | |||||||||||
Preferred stock, shares outstanding (in shares) | 3,799,799 | 4,016,955 | |||||||||||
Preferred stock, shares issued (in shares) | 3,799,799 | 4,016,955 | |||||||||||
Preferred stock accrued dividend | $ | $ 634,700 | $ 670,900 | |||||||||||
Net proceeds from issuance of common stock | $ | 0 | 25,101,000 | |||||||||||
Net proceeds from issuance of preferred stock | $ | 0 | 66,572,300 | |||||||||||
Repurchase of stock | $ | $ 437,700 | $ 5,000,000 | |||||||||||
Warrants to purchase convertible preferred stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Preferred stock convertible into common shares | 0.2778 | ||||||||||||
Convertible Preferred Stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Preferred stock convertible into common shares | 0.2778 | ||||||||||||
Subsequent Event | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Stock split, conversion ratio | 0.0500 | ||||||||||||
Preferred Stock Offering Warrant One | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Sale of stock, number of shares issued in transaction (in shares) | 4,140,000 | ||||||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 207,000 | ||||||||||||
Class of warrant or right, exercise price of warrants or rights (in dollars per share) | $ / shares | $ 5 | ||||||||||||
Warrants and rights outstanding, term | 5 years | ||||||||||||
Warrants and rights outstanding | $ | $ 3,700,000 | ||||||||||||
Stock split, conversion ratio | 0.050 | ||||||||||||
Follow-On Preferred Stock Offering Warrants | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 690,000 | ||||||||||||
Class of warrant or right, exercise price of warrants or rights (in dollars per share) | $ / shares | $ 2.97 | ||||||||||||
Warrants and rights outstanding, term | 5 years | ||||||||||||
Warrants and rights outstanding | $ | $ 6,000,000 | ||||||||||||
Stock split, conversion ratio | 0.050 | ||||||||||||
Preferred Stock Offering Warrant | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Number of warrants | warrant | 2 | ||||||||||||
Preferred Stock Offering Warrant Three | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Sale of stock, number of shares issued in transaction (in shares) | 36,000 | ||||||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 1,800 | ||||||||||||
Class of warrant or right, exercise price of warrants or rights (in dollars per share) | $ / shares | $ 5 | ||||||||||||
Over-Allotment Option | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Sale of stock, number of shares issued in transaction (in shares) | 360,000 | ||||||||||||
Net proceeds from issuance of preferred stock | $ | $ 5,400,000 | ||||||||||||
Over-Allotment Option | Follow-On Offering Warrants | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Sale of stock, number of shares issued in transaction (in shares) | 400,000 | ||||||||||||
Class of warrant or right, exercise price of warrants or rights (in dollars per share) | $ / shares | $ 3.75 | ||||||||||||
Warrants and rights outstanding, term | 5 years | ||||||||||||
Warrants and rights outstanding | $ | $ 500,000 | ||||||||||||
Stock split, conversion ratio | 0.050 | ||||||||||||
Over-Allotment Option | Preferred Stock Offering Warrant One | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Sale of stock, number of shares issued in transaction (in shares) | 540,000 | ||||||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 27,000 | ||||||||||||
Over-Allotment Option | Follow-On Preferred Stock Offering Warrants | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Sale of stock, number of shares issued in transaction (in shares) | 1,800,000 | ||||||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 90,000 | ||||||||||||
Preferred Stock Offering | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Sale of stock, consideration received on transaction | $ | $ 37,900,000 | ||||||||||||
Proceeds from issuance of preferred stock and warrants | $ | $ 36,000,000 | $ 30,000,000 | |||||||||||
Preferred Stock Offering | Follow-On Preferred Stock Offering Warrants | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Sale of stock, number of shares issued in transaction (in shares) | 13,800,000 | ||||||||||||
Common Stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Common stock outstanding (in shares) | 718,835 | 657,767 | 281,827 | ||||||||||
Stock repurchase (in shares) | 12,597 | 90,337 | |||||||||||
Repurchase of stock | $ | $ 437,700 | $ 5,000,000 | |||||||||||
Common Stock | Over-Allotment Option | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Sale of stock, number of shares issued in transaction (in shares) | 60,000 | ||||||||||||
Common Stock | Follow-on Offering | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Sale of stock, number of shares issued in transaction (in shares) | 460,000 | ||||||||||||
Share price per share (in dollars per share) | $ / shares | $ 60 | ||||||||||||
Net proceeds from issuance of common stock | $ | $ 27,600,000 | ||||||||||||
Sale of stock, consideration received on transaction | $ | $ 25,100,000 | ||||||||||||
Maximum | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Preferred stock, dividend terms | 20 days | ||||||||||||
Maximum | Subsequent Event | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Stock split, conversion ratio | 0.0400 | ||||||||||||
Minimum | Subsequent Event | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Stock split, conversion ratio | 0.3333 | ||||||||||||
Series A Preferred Stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Preferred stock, shares outstanding (in shares) | 3,799,399 | 4,016,955 | |||||||||||
Preferred stock, shares issued (in shares) | 3,799,399 | 4,016,955 | |||||||||||
Preferred stock, dividend rate (in dollars per share) | $ / shares | $ 2 | ||||||||||||
Preferred stock, liquidation preference per share (in dollars per share) | $ / shares | $ 25 | ||||||||||||
Preferred stock, dividend rate, percentage | 8% | ||||||||||||
Series A Preferred Stock | Subsequent Event | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Preferred stock, dividend rate, percentage | 8% | ||||||||||||
Series A Preferred Stock | Preferred Stock Offering Warrant Two | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 12,000 | ||||||||||||
Series A Preferred Stock | Over-Allotment Option | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Sale of stock, number of shares issued in transaction (in shares) | 60,555 | ||||||||||||
Net proceeds from issuance of preferred stock | $ | $ 1,400,000 | ||||||||||||
Series A Preferred Stock | Preferred Stock Offering | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Sale of stock, number of shares issued in transaction (in shares) | 2,400,000 | 1,200,000 | |||||||||||
Sale of stock, consideration received on transaction | $ | $ 28,700,000 | ||||||||||||
Common Stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 20,000 | ||||||||||||
Stock repurchase program, authorized amount | $ | $ 5,000,000 | $ 5,000,000 | |||||||||||
Stock repurchase program, amount of shares authorized to be repurchased, percentage | 15% | 17% | |||||||||||
Stock repurchase (in shares) | 12,597 | 90,337 | |||||||||||
Average price (in dollars per share) | $ / shares | $ 35.23 | $ 55.40 | |||||||||||
Repurchase of stock | $ | $ 400,000 | $ 5,000,000 | |||||||||||
Common Stock | Subsequent Event | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Reverse stock splits, (in shares) | 20 | 20 |
STOCKHOLDERS_ EQUITY - SCHEDULE
STOCKHOLDERS’ EQUITY - SCHEDULE OF STOCK OPTIONS ACTIVITY (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Options | |||
Outstanding, beginning balance (in shares) | 23,163 | 22,109 | |
Granted (in shares) | 19,600 | 12,000 | |
Exercised (in shares) | (1,081) | (2,252) | |
Forfeited/Cancelled (in shares) | (4,135) | (8,694) | |
Outstanding, ending balance (in shares) | 37,546 | 23,163 | |
Exercisable (in shares) | 19,696 | 17,186 | 10,954 |
Weighted Average Exercise Price | |||
Outstanding, beginning balance (in dollars per share) | $ 56.43 | $ 50.54 | |
Granted (in dollars per share) | 23.79 | 64.68 | |
Exercised (in dollars per share) | 8 | 8 | |
Forfeited/Cancelled (in dollars per share) | 34.48 | 65.37 | |
Outstanding, ending balance (in dollars per share) | 41.51 | 56.43 | |
Exercisable (in dollars per share) | $ 55.55 | $ 55.47 | $ 26.16 |
STOCKHOLDERS_ EQUITY - SCHEDU_2
STOCKHOLDERS’ EQUITY - SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE (Details) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Equity [Abstract] | |
Exercise price range, lower range limit (in dollars per share) | $ 7.99 |
Exercise price range, upper range limit (in dollars per share) | $ 130 |
Number of option outstanding (in shares) | shares | 37,546 |
Weighted average remaining contractual life (in years) | 7 years 11 months 8 days |
Weighted average exercise price (in dollars per share) | $ 41.51 |
Number of option exercisable (in shares) | shares | 19,696 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 55.55 |
STOCKHOLDERS_ EQUITY - OPTIONS
STOCKHOLDERS’ EQUITY - OPTIONS NARRATIVE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 19,600 | 12,000 |
Granted (in dollars per share) | $ 23.79 | $ 64.68 |
Share-based compensation arrangement by share-based payment award, options, granted in period, fair value | $ 200,000 | |
Exercise of stock options (in shares) | 1,081 | 2,252 |
Exercise of stock options | $ 8,600 | $ 18,000 |
Option, cost not yet recognized, amount | 200,000 | |
Share-based compensation arrangement by share-based payment award, options, outstanding, intrinsic value | 0 | 400,000 |
Share-based compensation arrangement by share-based payment award, options, exercisable, intrinsic value | $ 0 | 300,000 |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in dollars per share) | $ 22.40 | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in dollars per share) | $ 41.80 | |
Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 19,600 | |
Expiration period (in years) | 10 years | |
Share-based payment arrangement, expense | $ 100,000 | $ 300,000 |
Options | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation arrangement by share-based payment award, award vesting period | 1 year | |
Options | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation arrangement by share-based payment award, award vesting period | 3 years |
STOCKHOLDERS_ EQUITY - SCHEDU_3
STOCKHOLDERS’ EQUITY - SCHEDULE OF WARRANTS ACTIVITY (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Common Stock Warrant | |||
Warrants | |||
Outstanding, beginning balance (in shares) | 18,486,859 | 110,859 | |
Granted (in shares) | 100,000 | 18,376,000 | |
Exercised (in shares) | (139,295) | 0 | |
Forfeited/Cancelled (in shares) | 0 | 0 | |
Outstanding, ending balance (in shares) | 18,447,564 | 18,486,859 | |
Exercisable (in shares) | 18,380,897 | 18,486,859 | 22,524 |
Weighted Average Fair Value | |||
Outstanding, beginning balance (in dollars per share) | $ 3.46 | $ 6.06 | |
Granted (in dollars per share) | 3 | 3.45 | |
Exercised (in dollars per share) | 2.97 | 0 | |
Forfeited/Cancelled (in dollars per share) | 0 | 0 | |
Outstanding, ending balance (in dollars per share) | 3.47 | 3.46 | |
Exercisable (in dollars per share) | $ 3.47 | $ 3.46 | $ 0.40 |
Preferred Stock Warrant | |||
Warrants | |||
Outstanding, beginning balance (in shares) | 12,000 | 0 | |
Granted (in shares) | 0 | 12,000 | |
Exercised (in shares) | 0 | 0 | |
Forfeited/Cancelled (in shares) | 0 | 0 | |
Outstanding, ending balance (in shares) | 12,000 | 12,000 | |
Exercisable (in shares) | 12,000 | 12,000 | 0 |
Weighted Average Fair Value | |||
Outstanding, beginning balance (in dollars per share) | $ 24.97 | $ 0 | |
Granted (in dollars per share) | 0 | 24.97 | |
Exercised (in dollars per share) | 0 | 0 | |
Forfeited/Cancelled (in dollars per share) | 0 | 0 | |
Outstanding, ending balance (in dollars per share) | 24.97 | 24.97 | |
Exercisable (in dollars per share) | $ 24.97 | $ 24.97 | $ 0 |
STOCKHOLDERS_ EQUITY - SCHEDU_4
STOCKHOLDERS’ EQUITY - SCHEDULE OF WARRANTS OUTSTANDING AND EXERCISABLE (Details) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Common Stock Warrant | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price range, lower range limit (in dollars per share) | $ 0.40 |
Exercise price range, upper range limit (in dollars per share) | $ 7.50 |
Outstanding (in shares) | shares | 18,447,564 |
Weighted average remaining contractual life, outstanding | 3 years 8 months 4 days |
Weighted average exercise price, outstanding (in dollars per share) | $ 3.47 |
Exercisable (in shares) | shares | 18,380,897 |
Exercisable, weighted average exercise price (in dollars per share) | $ 3.47 |
Preferred Stock Warrant | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price range (in dollars per share) | $ 24.97 |
Outstanding (in shares) | shares | 12,000 |
Weighted average remaining contractual life, outstanding | 3 years 5 months 8 days |
Weighted average exercise price, outstanding (in dollars per share) | $ 24.97 |
Exercisable (in shares) | shares | 12,000 |
Exercisable, weighted average exercise price (in dollars per share) | $ 24.97 |
STOCKHOLDERS_ EQUITY - WARRANTS
STOCKHOLDERS’ EQUITY - WARRANTS NARRATIVE (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Jan. 20, 2021 | |
Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 20,000 | ||
Common Stock Warrant | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Aggregate intrinsic value, outstanding | $ 0 | $ 100,000 | |
Preferred Stock Warrant | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Aggregate intrinsic value, outstanding | $ 0 | $ 0 | |
Common Stock Warrant | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Class of warrant or right, outstanding (in shares) | 100,000 | ||
Warrants and rights outstanding, term | 5 years | ||
Warrants and rights outstanding | $ 100,000 | ||
Common Stock Warrant | Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 5,000 | ||
Common Stock Warrant | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Class of warrant or right, exercise price of warrants or rights (in dollars per share) | $ 3 | ||
Preferred Stock Warrant | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Warrants and rights outstanding, vesting term | 3 years |
STOCKHOLDERS_ EQUITY - SCHEDU_5
STOCKHOLDERS’ EQUITY - SCHEDULE OF RESTRICTED STOCK UNIT ACTIVITY (Details) - Restricted Stock Awards - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Restricted Stock | ||
Outstanding, beginning balance (in shares) | 7,250 | 1,275 |
Granted (in shares) | 11,555 | 9,000 |
Vested (in shares) | 6,805 | 3,025 |
Forfeited/Cancelled (in shares) | 0 | 0 |
Outstanding, ending balance (in shares) | 12,000 | 7,250 |
Weighted Average Fair Value | ||
Outstanding, beginning balance (in dollars per share) | $ 49.02 | $ 90.60 |
Granted (in dollars per share) | 39.16 | 51.62 |
Vested (in dollars per share) | 50.87 | 74.29 |
Forfeited/Cancelled (in dollars per share) | 0 | 0 |
Outstanding, ending balance (in dollars per share) | $ 38.48 | $ 49.02 |
STOCKHOLDERS_ EQUITY - RESTRICT
STOCKHOLDERS’ EQUITY - RESTRICTED STOCK PLAN NARRATIVE (Details) - Restricted Stock Awards - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based payment arrangement, expense | $ 0.4 | $ 0.2 |
Share-based payment arrangement, nonvested award, cost not yet recognized, amount | $ 0.4 | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation arrangement by share-based payment award, award vesting period | 1 year | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation arrangement by share-based payment award, award vesting period | 3 years |
SEGMENTS - SCHEDULE OF COMPANY_
SEGMENTS - SCHEDULE OF COMPANY’S REPORTABLE SEGMENT (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) segment officer | Dec. 31, 2021 USD ($) | |
Segment Reporting [Abstract] | ||
Number of executive officers | officer | 3 | |
Number of reportable segments | segment | 5 | |
Segment Reporting Information [Line Items] | ||
Total Revenue | $ 55,414,300 | $ 72,352,700 |
Cost of goods sold by segment | 55,866,800 | 50,419,400 |
Gross profit (loss) by segment | (452,500) | 21,933,300 |
Total Assets | 236,166,400 | 169,700,100 |
Homes | ||
Segment Reporting Information [Line Items] | ||
Total Revenue | 28,670,000 | 17,654,600 |
Cost of goods sold by segment | 24,027,100 | 15,168,500 |
Gross profit (loss) by segment | 4,642,900 | 2,486,100 |
Total Assets | 29,880,500 | 36,615,600 |
Developed Lots | ||
Segment Reporting Information [Line Items] | ||
Total Revenue | 9,510,000 | 26,825,500 |
Cost of goods sold by segment | 9,797,700 | 15,885,300 |
Gross profit (loss) by segment | (287,700) | 10,940,200 |
Total Assets | 43,469,900 | 8,219,500 |
Entitled land | ||
Segment Reporting Information [Line Items] | ||
Total Revenue | 7,880,000 | 20,625,000 |
Cost of goods sold by segment | 4,060,200 | 11,689,100 |
Gross profit (loss) by segment | 3,819,800 | 8,935,900 |
Total Assets | 9,499,600 | 28,157,800 |
Multi-family | ||
Segment Reporting Information [Line Items] | ||
Total Revenue | 175,900 | 0 |
Cost of goods sold by segment | 2,564,400 | 0 |
Gross profit (loss) by segment | (2,388,500) | 0 |
Total Assets | 131,485,900 | 47,679,400 |
Fee Build | ||
Segment Reporting Information [Line Items] | ||
Total Revenue | 9,124,000 | 6,802,900 |
Cost of goods sold by segment | 13,597,500 | 5,991,300 |
Gross profit (loss) by segment | (4,473,500) | 811,600 |
Total Assets | 1,703,200 | 3,325,300 |
Other | ||
Segment Reporting Information [Line Items] | ||
Total Revenue | 54,400 | 444,700 |
Cost of goods sold by segment | 1,819,900 | 1,685,200 |
Gross profit (loss) by segment | (1,765,500) | (1,240,500) |
Unallocated (Shared) | ||
Segment Reporting Information [Line Items] | ||
Total Assets | $ 20,127,300 | $ 45,702,500 |
UNCOMPLETED CONTRACTS - SUMMARY
UNCOMPLETED CONTRACTS - SUMMARY OF COST, ESTIMATED EARNINGS AND BILLINGS ON UNCOMPLETED CONTRACTS (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Contractors [Abstract] | ||
Costs incurred on uncompleted contracts | $ 19,429,800 | $ 5,991,300 |
Estimated earnings (loss) | (3,495,100) | 811,600 |
Costs and estimated earnings on uncompleted contracts | 15,934,700 | 6,802,900 |
Billings to date | 16,273,000 | 4,635,700 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 0 | 2,167,200 |
Billings in excess of costs and estimated earnings on uncompleted contracts | (338,300) | 0 |
Provision for loss on contract | (159,100) | 0 |
Contract liabilities net | (497,400) | 0 |
Contract asset net | $ 0 | $ 2,167,200 |
UNCOMPLETED CONTRACTS - NARRATI
UNCOMPLETED CONTRACTS - NARRATIVE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Contractors [Abstract] | ||
Contract liabilities | $ 497,400 | $ 0 |
Contract asset | 0 | 2,167,200 |
Uncollected billings | $ 1,700,000 | $ 1,000,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ in Millions | 12 Months Ended | |||||||
Mar. 06, 2023 shares | Feb. 27, 2023 shares | Feb. 23, 2023 USD ($) | Jan. 20, 2023 | Dec. 31, 2022 | Dec. 31, 2021 shares | Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | |
Series A Preferred Stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Preferred stock, dividend rate, percentage | 8% | |||||||
Common Stock | Common Stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Stock issued during period shares (in shares) | shares | 460,000 | |||||||
Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Stock split, conversion ratio | 0.0500 | |||||||
Subsequent Event | Board of Directors | ||||||||
Subsequent Event [Line Items] | ||||||||
Stock split, conversion ratio | 0.0500 | |||||||
Subsequent Event | Revolving Credit Facility | Line of Credit | ||||||||
Subsequent Event [Line Items] | ||||||||
Payment of principal reduction | $ | $ 0.6 | |||||||
Percentage of assets sales and capital raises | 25% | |||||||
Subsequent Event | Series A Preferred Stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Preferred stock, dividend rate, percentage | 8% | |||||||
Subsequent Event | Common Stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Reverse stock splits, (in shares) | shares | 20 | 20 | ||||||
East Bremerton, Washington | Forecast | Purchase and Sale Agreement | ||||||||
Subsequent Event [Line Items] | ||||||||
Other commitment | $ | $ 2 | $ 14.3 |