Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Sep. 26, 2022 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2022 | |
Entity File Number | 001-41473 | |
Entity Registrant Name | CORPHOUSING GROUP INC. | |
Entity Address State Or Province | FL | |
Entity Address, Address Line One | 2125 Biscayne Blvd Suite 253 | |
Entity Address, City or Town | Miami | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Postal Zip Code | 33137 | |
Entity Tax Identification Number | 82-3334945 | |
City Area Code | 833 | |
Local Phone Number | 723-7368 | |
Title of 12(b) Security | Common stock, $0.00001 par value per share | |
Trading Symbol | CHG | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 26,529,418 | |
Entity Central Index Key | 0001893311 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash | $ 556 | $ 6,998 |
Processor retained funds | 4,616,255 | 56,864 |
Prepaid expenses and other current assets | 512,939 | 166,667 |
Deferred offering costs | 1,234,500 | 771,954 |
Security deposits - current | 276,943 | 276,943 |
Total Current Assets | 6,641,193 | 1,279,426 |
Other Assets | ||
Furniture and equipment, net | 8,944 | 11,500 |
Restricted cash | 1,100,000 | 1,100,000 |
Security deposits - noncurrent | 4,108,010 | 1,377,010 |
Operating lease right-of-use asset, net | 49,941,971 | |
Total Other Assets | 55,158,925 | 2,488,510 |
Total Assets | 61,800,118 | 3,767,936 |
Current Liabilities | ||
Accounts payable and accrued expenses | 5,301,053 | 4,209,366 |
Rents received in advance | 4,071,095 | 1,819,943 |
Merchant cash advances - net of unamortized costs of $0 and $57,768, respectively | 575,489 | 1,386,008 |
Loans payable - current portion | 2,780,054 | 1,267,004 |
Loans payable - SBA - PPP Loan - current portion | 815,183 | 815,183 |
Convertible loans payable - related parties - current portion | 2,596,865 | |
Loans payable - related parties - current portion | 1,071,128 | 22,221 |
Operating lease liability - current | 7,182,381 | |
Income taxes payable | 750,000 | |
Total Current Liabilities | 25,143,248 | 9,519,725 |
Long-Term Liabilities | ||
Loans payable | 545,789 | 925,114 |
Loans payable - SBA - EIDL Loan | 800,000 | 800,000 |
Loans payable - related parties | 496,500 | |
Convertible loans payable - related parties | 700,195 | 2,608,860 |
Line of credit | 94,975 | 94,975 |
Deferred rent | 536,812 | |
Operating lease liability | 43,962,492 | |
Total Long-term Liabilities | 46,103,451 | 5,462,261 |
Total Liabilities | 71,246,699 | 14,981,986 |
Commitments and Contingencies | ||
Stockholders' Deficit | ||
Members' Deficit | (11,214,050) | |
Common stock (shares authorized, issued and outstanding - 90,000,000; 21,675,001; 21,675,001; respectively) | 216 | |
Accumulated deficit | (9,446,797) | |
Total Stockholders' Deficit | (9,446,581) | (11,214,050) |
Total Liabilities and Stockholders' Deficit | $ 61,800,118 | $ 3,767,936 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Condensed Consolidated Balance Sheets | ||
Unamortized costs for merchant cash advances | $ 0 | $ 57,768 |
Shares authorized | 90,000,000 | 90,000,000 |
Shares issued | 21,675,001 | 21,675,001 |
Shares outstanding | 21,675,001 | 21,675,001 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Condensed Consolidated Statements of Operations | ||||
Rental Revenue | $ 12,656,540 | $ 6,728,686 | $ 24,419,439 | $ 11,688,873 |
Refunds and Allowances | 2,455,202 | 2,545,820 | 5,118,676 | 4,199,978 |
Net Rental Revenue | 10,201,338 | 4,182,866 | 19,300,763 | 7,488,895 |
Cost of Revenue | 7,344,720 | 4,035,238 | 13,930,882 | 7,920,531 |
Gross Profit (Loss) | 2,856,618 | 147,628 | 5,369,881 | (431,636) |
General and Administrative Expenses | ||||
Administrative and other | 809,121 | 701,040 | 1,559,742 | 1,258,458 |
Professional fees | 76,500 | 37,390 | 305,485 | 90,404 |
Total General and Administrative Expenses | 885,621 | 738,430 | 1,865,227 | 1,348,862 |
Net Income (Loss) Before Other Income (Expense) | 1,970,997 | (590,802) | 3,504,654 | (1,780,498) |
Other Income (Expense) | ||||
Other income | 137,154 | 434 | 587,067 | 467 |
Interest and financing costs | (595,742) | (542,764) | (1,159,879) | (660,007) |
Total Other Expenses | (458,588) | (542,330) | (572,812) | (659,540) |
Income (Loss) Before Provision for Income Taxes | 1,512,409 | (1,133,132) | 2,931,842 | (2,440,038) |
Provision for Income Taxes | ||||
Current | 750,000 | 750,000 | ||
Net Income (Loss) | $ 762,409 | $ (1,133,132) | $ 2,181,842 | $ (2,440,038) |
Basic earnings per common share | $ 0.04 | $ 0.10 | ||
Diluted earnings per common share | $ 0.04 | $ 0.10 | ||
Basic, weighted average number of common shares outstanding | 21,675,001 | 21,315,747 | ||
Diluted, weighted average number of common shares outstanding | 21,675,001 | 21,675,001 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Deficit - USD ($) | Common Stock [Member] | Members' Deficit | Additional Paid-in Capital | Accumulated Deficit | Total |
Beginning balance at Dec. 31, 2020 | $ 0 | $ (7,795,669) | $ 0 | $ 0 | $ 0 |
Beginning balance (in shares) at Dec. 31, 2020 | 0 | ||||
Condensed Consolidated Statement of Changes in Stockholders' Deficit | |||||
Net Income (Loss) | (1,306,906) | ||||
Contributions | 33,821 | ||||
Distributions | (568,485) | ||||
Ending balance at Mar. 31, 2021 | (9,637,239) | ||||
Beginning balance at Dec. 31, 2020 | $ 0 | (7,795,669) | 0 | 0 | 0 |
Beginning balance (in shares) at Dec. 31, 2020 | 0 | ||||
Condensed Consolidated Statement of Changes in Stockholders' Deficit | |||||
Net Income (Loss) | (2,440,038) | ||||
Ending balance at Jun. 30, 2021 | (11,190,406) | ||||
Beginning balance at Mar. 31, 2021 | (9,637,239) | ||||
Condensed Consolidated Statement of Changes in Stockholders' Deficit | |||||
Net Income (Loss) | (1,133,132) | (1,133,132) | |||
Contributions | 10,205 | ||||
Distributions | (430,240) | ||||
Ending balance at Jun. 30, 2021 | (11,190,406) | ||||
Beginning balance at Dec. 31, 2021 | $ 0 | (11,214,050) | 0 | 0 | (11,214,050) |
Beginning balance (in shares) at Dec. 31, 2021 | 0 | ||||
Condensed Consolidated Statement of Changes in Stockholders' Deficit | |||||
Net Income (Loss) | 1,419,433 | 1,419,433 | |||
Cumulative Effects Of Changes In Accounting Principle | (414,373) | (414,373) | |||
Conversion to C Corp | $ 216 | 11,628,423 | (11,628,639) | ||
Conversion to C Corp (in shares) | 21,675,001 | ||||
Ending balance at Mar. 31, 2022 | $ 216 | (10,209,206) | (10,208,990) | ||
Ending balance (in shares) at Mar. 31, 2022 | 21,675,001 | ||||
Beginning balance at Dec. 31, 2021 | $ 0 | $ (11,214,050) | $ 0 | 0 | (11,214,050) |
Beginning balance (in shares) at Dec. 31, 2021 | 0 | ||||
Condensed Consolidated Statement of Changes in Stockholders' Deficit | |||||
Net Income (Loss) | 2,181,842 | ||||
Ending balance at Jun. 30, 2022 | $ 216 | (9,446,797) | (9,446,581) | ||
Ending balance (in shares) at Jun. 30, 2022 | 21,675,001 | ||||
Beginning balance at Mar. 31, 2022 | $ 216 | (10,209,206) | (10,208,990) | ||
Beginning balance (in shares) at Mar. 31, 2022 | 21,675,001 | ||||
Condensed Consolidated Statement of Changes in Stockholders' Deficit | |||||
Net Income (Loss) | 762,409 | 762,409 | |||
Ending balance at Jun. 30, 2022 | $ 216 | $ (9,446,797) | $ (9,446,581) | ||
Ending balance (in shares) at Jun. 30, 2022 | 21,675,001 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash Flows from Operating Activities | ||
Net Income (Loss) | $ 2,181,842 | $ (2,440,038) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation expense | 2,556 | |
(Increase) in: | ||
Processor retained funds | (4,559,391) | (55,200) |
Prepaid expenses and other assets | (346,272) | (24,500) |
Security deposits - current | (97,961) | |
Security deposits - noncurrent | (2,731,000) | (521,602) |
Operating lease right-of-use asset | (49,941,971) | |
Increase (Decrease) in: | ||
Accounts payable and accrued expenses | 1,091,687 | (1,252,473) |
Deferred rent | (951,185) | 63,548 |
Operating lease liability | 51,144,873 | |
Income taxes payable | 750,000 | |
Rents received in advance | 2,251,152 | 3,756,577 |
Net cash used in operating activities | (1,107,709) | (571,649) |
Cash Flows from Financing Activities | ||
Deferred offering costs - net | (462,546) | (50,000) |
Proceeds from loans payable - net | 1,133,725 | 541,634 |
Proceeds from loans payable - related parties - net | 1,240,607 | 201,085 |
(Repayments of) proceeds from merchant cash advances - net | (810,519) | 840,986 |
Contributions from members | 44,026 | |
Distributions to members | (998,725) | |
Net cash provided by financing activities | 1,101,267 | 579,006 |
Net (Decrease) increase in Cash and Restricted Cash | (6,442) | 7,357 |
Cash and Restricted Cash - beginning of period | 1,106,998 | 512 |
Total Cash and Restricted Cash - end of period | 1,100,556 | 7,869 |
Cash | 556 | 7,869 |
Restricted cash | 1,100,000 | |
Total Cash and Restricted Cash | 1,100,556 | 7,869 |
Cash paid for: | ||
Interest | $ 1,010,688 | $ 518,694 |
DESCRIPTION OF BUSINESS AND PRI
DESCRIPTION OF BUSINESS AND PRINCIPLES OF CONSOLIDATION | 6 Months Ended |
Jun. 30, 2022 | |
DESCRIPTION OF BUSINESS AND PRINCIPLES OF CONSOLIDATION | |
DESCRIPTION OF BUSINESS AND PRINCIPLES OF CONSOLIDATION | 1 - DESCRIPTION OF BUSINESS AND PRINCIPLES OF CONSOLIDATION CorpHousing Group (CHG) utilizes a long-term lease, asset-light business model to acquire and manage a growing portfolio of short-term rental properties in major metropolitan cities. The Company’s future growth focuses primarily on seeking to create “win-win” opportunities for owners of dislocated hotels, including those impacted by COVID-19 travel restrictions, while providing CHG favorable operating margins. CHG operates these properties in a cost-effective manner by leveraging technology to identify, acquire, manage, and market them globally to business and vacation travelers through dozens of third-party sales and distribution channels, and the Company’s own online portal. The Company manages a portfolio of multi-family and hotel units located in metropolitan cities in California, New York, Florida, Washington, Colorado, Massachusetts, and Washington D.C. As of June 30, 2022 and 2021, total units available were 584 and 423, respectively. Average units available for the three months and six months ended June 30, 2022, were 565 and 577, respectively as compared to 376 and 396, respectively for the three months and six months ended June 30, 2021. The consolidated financial statements include the accounts of CorpHousing Group Inc. (“Corphousing”) and its wholly owned subsidiary SoBeNY Partners LLC (SoBeNY”). In June 2021, the members of SoBeNY exchanged all of their membership interests for additional membership interests in Corphousing LLC, with SoBeNY becoming a wholly owned subsidiary of Corphousing LLC. Both entities were under common control at the time of the transaction. Since there was no change in control over the net assets, there is no change in basis in the net assets. In January 2022, Corphousing and its wholly owned subsidiary, SoBeNY, converted into C corporations, with the then current members of Corphousing becoming the stockholders of the newly formed C corporation, CorpHousing Group Inc. The conversion has no effect on our business or operations and was undertaken to convert the forms of these legal entities into corporations for purposes of operating as a public company. All properties, rights, businesses, operations, duties, obligations and liabilities of the predecessor limited liability companies remain those of CorpHousing Group Inc. and SoBeNY Partners Inc. All significant intercompany accounts and transactions have been eliminated in consolidation. These condensed consolidated financial statements should be read in conjunction with the financial statements and additional information as contained in our prospectus for the year ended December 31, 2021 filed on August 15, 2022. Results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2022. The other information in these condensed consolidated financial statements is unaudited but, in the opinion of management, reflects all adjustments necessary for a fair presentation of the results for the periods covered. All such adjustments are of a normal recurring nature unless disclosed otherwise. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Basis of Presentation b. Revenue Recognition — The Company accounts for revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606 which was adopted at the beginning of fiscal year 2018 using the modified retrospective method. The Company did not recognize any cumulative-effect adjustment to retained earnings upon adoption as the effect was immaterial. Payment received for the future use of a rental unit is recognized as a liability and reported as rents received in advance on the balance sheets. Rents received in advance are recognized as revenue after the rental unit is occupied by the customer for the agreed upon length of time or, if the rental is cancelled, rental amounts are refunded to customers (by us or our third-party service providers, or through reversal of the customers’ charges against our processer-retained funds) or forfeited by the customers in accordance with the specific terms of the reservation. The rents received in advance balance as of June 30, 2022 and December 31, 2021, was $4,071,095 and $1,819,943, respectively and is expected to be recognized as revenue within a one-year period. c. Use of Estimates d. Fair Value of Financial Instruments e. Advertising — f. Commissions — g. Deferred Rent h. Income Taxes Accounting for Uncertainty in Income Taxes, The Company recorded a provision for income taxes of $750,000 for the six months and June 30, 2022 implying a tax rate of approximately 30% before the consideration of other income. For 2021, the Company, which has been classified as a partnership for federal income tax purposes, is not subject to federal, state, and certain local income taxes and, accordingly, makes no provision for income taxes in its financial statements. The Company’s taxable income or loss is reportable by its stockholders. For 2022, the Company, converted into a C corporation. i. Sales Tax Company accrued sales tax payable of approximately $866,409 and $296,000, respectively and it is included in accounts payable and accrued expenses in the consolidated balance sheet. The Company is in the process of filing for the Voluntary Disclosure and Compliance Program with any taxing authority to avoid any potential penalties where the Company has been delinquent in filing returns. j. — As disclosed in Note 3, the Company has chosen to account for the loan under FASB ASC 470, Debt. Repayment amounts due within one year are recorded as current liabilities, and the remaining amounts due in more than one year, if any, as other liabilities. In accordance with ASC 835, Interest, no imputed interest is recorded as the below market interest rate applied to this loan is governmentally prescribed. If the Company is successful in receiving forgiveness for those portions of the loan used for qualifying expenses, those amounts will be recorded as a gain upon extinguishment as noted in ASC 405, Liabilities. k. — The Company has no common stock equivalents and as a result basic and diluted shares and weighted average shares outstanding are the same. |
GOING CONCERN
GOING CONCERN | 6 Months Ended |
Jun. 30, 2022 | |
GOING CONCERN | |
GOING CONCERN | 3 - GOING CONCERN The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. The Company has negative working capital of $18,502,055 and a stockholders’ deficit of $9,446,581, as of June 30, 2022. For the six months ended June 30, 2022, the Company achieved net income of $2,181,842. Management believes these conditions raise substantial doubt about the Company’s ability to continue as a going concern for the twelve months following the date these financial statements are issued. Management intends to finance operations over the next twelve months through continued net income and profits, borrowings from existing loans, by entering into new loan agreements and by an initial public offering and subsequent sales of common stock. The accompanying consolidated financial statements do not include any adjustments that might be required should the Company be unable to continue as a going concern. |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2022 | |
LEASES | |
LEASES | 4 - LEASES In February 2017, the FASB issued ASU No. 2016-02, Leases (“Topic 842”), to provide guidance on recognizing lease assets and lease liabilities on the consolidated balance sheet and disclosing key information about lease arrangements, specific differentiating between different types of leases. The Company adopted Topic 842, with an effective date of January 1, 2022. The consolidated financial statements from this date are presented under the new standard, while the comparative periods presented are not adjusted and continue to be reported in accordance with the Company’s historical accounting policy. This standard requires all lessees to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments. Under Topic 842, the Company applied a dual approach to all leases whereby the Company is a lessee and classifies leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the Company. Lease classification is evaluated at the inception of the lease agreement. Regardless of classification, the Company records a right-of-use asset and a lease liability for all leases with a term greater than 12 months. Operating lease expense is recognized on a straight-line basis over the term of the lease. Operating right of use (“ROU”) assets and operating lease liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating right of use assets represent our right to use an underlying asset and is based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, we estimate incremental secured borrowing rates corresponding to the maturities of the leases. The adoption of the new lease standard had a significant impact on the Consolidated Balance Sheets, resulting in the recognition on 1/1/2022 a right-of-use asset of $36,304,289, current lease liabilities of $7,370,890 and long-term lease liabilities of $29,884,584. In addition, the Company recognized an approximate $414,373 cumulative effect adjustment to retained earnings on the Consolidated Statements of Shareholders’ Equity related to the unamortized deferred lease costs incurred in prior periods which do not meet the definition of initial direct costs under Topic 842. The adoption of Topic 842 did not have a significant impact on the lease classification or a material impact on the Consolidated Statements of Operations and liquidity. The components of the right-of-use asset and lease liabilities as of June 30, 2022 are as follows: At June 30, 2022, supplemental balance sheet information related to leases were as follows: Operating lease right of use asset $ 49,941,971 Operating lease liability, current portion $ 7,182,381 Operating lease liability, net of current portion $ 43,962,492 At June 30, 2022, future minimum lease payments under the non-cancelable operating leases are as follows: Twelve Months Ending June 30, 2023 $ 9,730,956 2024 9,916,779 2025 10,106,552 2026 10,422,764 2027 7,788,145 Thereafter 72,773,441 Total lease payment $ 120,738,637 The following summarizes other supplemental information about the Company’s operating lease: June 30, 2022 Weighted average discount rate 10 % Weighted average remaining lease term (years) 9.1 years Three Months Six Months Ended Ended June 30, 2022 June 30, 2022 Operating lease cost $ 2,839,925 $ 5,787,499 |
ACCOUNTS PAYABLE AND ACCRUED LI
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 6 Months Ended |
Jun. 30, 2022 | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 5 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued expenses totaled $5,301,053 and $4,209,366 as of June 30, 2022 and December 31, 2021, respectively. As of June 30, 2022 the balance consisted of approximately $937,459 of credit cards payable, $681,000 of professional fees, $1,184,481 of rent, $425,000 of commissions, $866,409 in sales tax, $678,669 in costs related to the initial public offering, $112,500 of furniture, and $415,537 of other miscellaneous items. As of December 31, the balance consisted of approximately $980,000 of credit cards payable, $600,000 of professional fees, $570,000 of rent, $570,000 of commissions, $475,000 of short-term negative cash balances, $295,000 in sales tax, $290,000 in costs related to the initial public offering, $228,000 of refunds, $97,000 of furniture, and $105,000 of other miscellaneous items. |
LOANS PAYABLE - SBA - PPP LOAN
LOANS PAYABLE - SBA - PPP LOAN | 6 Months Ended |
Jun. 30, 2022 | |
LOANS PAYABLE-SBA-PPP LOAN | |
LOANS PAYABLE-SBA-PPP LOAN | 6 - LOANS PAYABLE — SBA — PPP LOAN On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted to provide emergency assistance for individuals, families, and organizations affected by the coronavirus pandemic. The PPP, created through the CARES Act, provides qualified organizations with loans of up to $10,000,000. Under the terms of the CARES Act and the PPP, the Company can apply for and be granted forgiveness for all or a portion of the loan issued to the extent the proceeds are used in accordance with the PPP. In April and May 2020, SoBeNY and Corphousing obtained funding of $516,225 and $298,958, respectively, from a bank established by the Small Business Administration (“SBA”). The loans have an initial deferment period wherein no payments are due until the application of forgiveness is submitted, not to exceed ten months from the covered period. Interest will continue to accrue during this deferment period. After the deferment period ends, the loans are payable in equal monthly installments of $29,052 and $15,932, respectively, including principal and interest at a fixed rate of 1.00%, through April and May 2022. No collateral or personal guarantees were required to obtain the PPP loans. Accrued interest at June 30, 2022 and December 31, 2021, was $16,303 and $13,337, respectively and is included in accounts payable and accrued expenses in the consolidated balance sheets. Future minimum principal repayments of the SBA — PPP loans payable are as follows: For the Twelve Months Ending June 30, 2023 $ 815,183 |
LOANS PAYABLE - SBA - EIDL LOAN
LOANS PAYABLE - SBA - EIDL LOAN | 6 Months Ended |
Jun. 30, 2022 | |
LOANS PAYABLE-SBA-EIDL LOAN | |
LOANS PAYABLE-SBA-EIDL LOAN | 7 - LOANS PAYABLE — SBA — EIDL LOAN During 2020, the Company received three SBA Economic Injury Disaster Loans (“EIDL”) in response to the COVID-19 pandemic. These are 30-year loans under the EIDL program, which is administered through the SBA. Under the guidelines of the EIDL, the maximum term is 30 years; however, terms are determined on a case-by-case basis based on each borrower’s ability to repay and carry an interest rate of 3.75%. The EIDL loan may be prepaid by the Company at any time prior to maturity with no prepayment penalties. The proceeds from this loan must be used solely as working capital to alleviate economic injury caused by the COVID-19 pandemic. On April 21, 2020, SoBeNY received an EIDL loan in the amount of $500,000. The loan bears interest at 3.75% and requires monthly payments of principal and interest of $2,437 beginning April 21, 2022, and is personally guaranteed by a managing stockholder. On June 18, 2020, Corphousing received an EIDL loan in the amount of $150,000. The loan bears interest at 3.75% and requires monthly payments of principal and interest of $731 beginning June 18, 2022. On July 25, 2020, S-Be received an EIDL loan in the amount of $150,000. The loan bears interest at 3.75% and requires monthly payments of principal and interest of $731 beginning July 25, 2022. Any remaining principal and accrued interest is payable thirty years from the date of the EIDL loan. The outstanding balance at June 30, 2022 and December 31, 2021, was $800,000 and $800,000, respectively. Accrued interest at June 30, 2022 was $62,656 and is included in accounts payable and accrued expenses in the consolidated balance sheets. Future minimum principal repayments of the SBA — EIDL loans payable are as follows: For the Twelve Months Ending June 30, 2023 $ 8,316 2024 14,551 2025 15,106 2026 15,682 2027 16,280 Thereafter 730,065 $ 800,000 |
MERCHANT CASH ADVANCES
MERCHANT CASH ADVANCES | 6 Months Ended |
Jun. 30, 2022 | |
MERCHANT CASH ADVANCES | |
MERCHANT CASH ADVANCES | 8 - MERCHANT CASH ADVANCES The Company entered into multiple Merchant Cash Advance (“MCA”) factoring agreements to fund operations. The Company is required to repay the MCA in fixed daily payments until the balance is repaid. The MCA is personally guaranteed by a stockholder. Fees associated with the MCA have been recognized in interest expense in the accompanying consolidated statement of operations. As of June 30, 2022 and December 31, 2021, the outstanding balance on these merchant cash advances net of unamortized costs was $575,489 and $1,386,008, respectively and is expected to be repaid within twelve months. |
LOANS PAYABLE
LOANS PAYABLE | 6 Months Ended |
Jun. 30, 2022 | |
LOANS PAYABLE | |
LOANS PAYABLE | 9 - LOANS PAYABLE Loans payable consist of the following as of: June 30, December 31, 2022 2021 Original borrowings of $100,000, bears interest at 1%, requires no payments until maturity in March 2024 $ 20,500 $ 20,500 Original borrowings of $250,000, bears interest at 1%, requires no payments until maturity in January 2024 210,500 210,500 Original payable of $151,096 with additional net borrowings of $89,154, requires monthly payments of $1,500 until total payments of $240,250 have been made 1,050 242,053 Original payable of $553,175 with additional net borrowings of $125,412, requires monthly payments of $25,000 until total payments of $678,587 have been made 553,175 553,175 Original payable of $492,180, requires monthly payments of $25,000 until total payments of $492,180 have been made 865,618 1,020,890 Original borrowings of $1,500,000 and unamortized original issue discount of $225,000, bears interest at 5%, requires no payments until maturity in May 2023 1,500,000 — Original borrowings of $60,000, bears interest at 1%, requires no payments until maturity in January 2024 60,000 — Original amounts due of $195,000, related to services provided by a vendor, requires monthly payments of $10,000 through May 2022, then monthly payments of $25,000 through August 2022 at which time any remaining balance is due 115,000 145,000 3,325,843 2,192,118 Less: 2,780,054 1,267,004 $ 545,789 $ 925,114 Future minimum principal repayments of the loans payable are as follows: For the Twelve Months Ending June 30, 2023 $ 2,780,054 2024 545,789 $ 3,325,843 |
LOANS PAYABLE - RELATED PARTIES
LOANS PAYABLE - RELATED PARTIES | 6 Months Ended |
Jun. 30, 2022 | |
LOANS PAYABLE-RELATED PARTIES | |
LOANS PAYABLE-RELATED PARTIES | 10 - LOANS PAYABLE — RELATED PARTIES Loans payable — related parties consists of the following: June 30, December 31, 2022 2021 Original borrowings of $496,500, bears interest at 6%, requires no payments until maturity in May 2023. Lender is a stockholder of the Company $ 459,000 $ 496,500 Original borrowings of $341,000, bears interest at 6%, requires no payments until maturity in April 2023. Lender is a stockholder of the Company 341,000 — Original borrowings of $150,000, bears interest at various rates based on the lenders borrowing rates. No stated repayment terms. Lender is controlled by the managing stockholder and owned by his spouse 271,128 22,221 1,071,128 518,721 Less: 1,071,128 22,221 $ — $ 496,500 Future minimum principal repayments of the loans payable — related parties are as follows: For the Twelve Months Ending June 30, 2023 $ 1,071,128 $ 1,071,128 |
CONVERTIBLE NOTES - RELATED PAR
CONVERTIBLE NOTES - RELATED PARTIES | 6 Months Ended |
Jun. 30, 2022 | |
CONVERTIBLE NOTES - RELATED PARTIES | |
CONVERTIBLE NOTES - RELATED PARTIES | 11 - CONVERTIBLE NOTES - RELATED PARTIES June 30, December 31, 2022 2021 Original borrowings of $1,966,019, bears interest at 6%, requires no payments until maturity in April 2023. Lender is related to the managing stockholder. Contingently convertible upon certain triggering events, at the holder’s option upon an initial public offering $ 1,266,865 $ 1,966,019 Convertible note of $1,330,000 bears interest at 1.5%, requires no payments until maturity. Notes mature and convert at IPO into equity at 75% of IPO price. $ 1,330,000 — Convertible revolving credit line of $650,000, bears interest at 1%, requires no payments until maturity in March 2024. Contingently convertible upon certain triggering events, at the holder’s option, nut no earlier than maturity, at a conversion ratio equal to 1% of enterprise value measured at conversion. Lender is related to the managing stockholder 700,195 642,841 $ 3,297,060 $ 2,608,860 Less: 2,596,865 — $ 700,195 $ 2,608,860 Future minimum principal repayments of the loans payable — related parties are as follows: For the Twelve Months Ending June 30, 2023 $ 2,596,865 2024 700,195 $ 3,297,060 |
LINE OF CREDIT
LINE OF CREDIT | 6 Months Ended |
Jun. 30, 2022 | |
LINE OF CREDIT | |
LINE OF CREDIT | 12 - LINE OF CREDIT In February 2019, the Company entered into a line of credit agreement in the amount of $95,000. The line bears interest at prime, 4.75% as of June 30, 2022, plus 3.49%. The line matures in February 2029. Outstanding borrowings were $94,975 as of June 30, 2022 and December 31, 2021. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2022 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 13 - RELATED PARTY TRANSACTIONS In addition to the transactions described in Notes 10 and 11, above, the Company engaged in the following transactions with related parties: Consulting services related to the management of the Company, including overseeing the leasing of additional units and revenue management, were provided to the Company through a consulting agreement with SuperLuxMia LLC, a consulting firm owned by a stockholder of the Company. For the three months and six months ended June 30, 2022, these consulting fees of the Company totaled approximately $0 and $191,845, respectively, as compared to $246,115 and $386,805, respectively for the three months and six months ended June 30, 2021, and are included in general and administrative expenses The Company’s Chief Accounting Officer (CAO) provided services to our company through a consulting agreement with an entity owned by the CAO. For the three months and six months ended June 30, 2022, related fees totaled approximately $12,500 and $47,500, respectively as compared to $35,000 and $45,000, respectively, for the three months and six months ended June 30, 2021, and are included in general and administrative expenses |
RISKS AND UNCERTAINTIES
RISKS AND UNCERTAINTIES | 6 Months Ended |
Jun. 30, 2022 | |
RISKS AND UNCERTAINTIES | |
RISKS AND UNCERTAINTIES | 14 - RISKS AND UNCERTAINTIES The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash. The Company places its cash with high quality credit institutions. At times, balances may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. All accounts at an insured depository institution are insured by the FDIC up to the standard maximum deposit insurance of $250,000 per institution. At June 30, 2022, aggregate cash balances did not exceed the insured limit. |
MAJOR SALES CHANNELS
MAJOR SALES CHANNELS | 6 Months Ended |
Jun. 30, 2022 | |
MAJOR SALES CHANNELS | |
MAJOR SALES CHANNELS | 15 - MAJOR SALES CHANNELS The Company uses third-party sales channels to handle the reservations, collections, and other rental processes for most of the units. Three sales channels represented approximately, 91% and 88%, respectively, of total revenue during the three months and six months ended June 30, 2022, as compared to 90% and 93%, respectively for the three months and six months ended June 30, 2021. The loss of business from one or a combination of the Company’s significant sales channels, or an unexpected deterioration in their financial condition, could adversely affect the Company’s operations. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 16 - COMMITMENTS AND CONTINGENCIES The World Health Organization characterized the Covid-19 virus as a global pandemic on March 11, 2020. The COVID-19 outbreak in the United States has caused business disruption through mandated and voluntary closings of multiple industries. While disruption is currently expected to be temporary, there is considerable uncertainty regarding the duration of the closings. The extent to which COVID-19 impacts future results, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and the action to contain it or treat its impact, among others. At this time, the Company cannot estimate with meaningful precision the potential impact to its financial and operational results. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 17 - SUBSEQUENT EVENTS The Subsequent to June 30, 2022, the Company entered into leases, letter of intents, or agreements to enter into leases with start dates through December 31, 2022. The new lease terms expire on various dates though December 31, 2037. In July 2022, the Company entered into security purchase agreements with certain private investors under which it sold, in a private placemen ts (“July 2022 Bridge Financing”), $1,955,000 principal amount. The Company has issued 252,875 Warrants in conjunction with the July 2022 Bridge Financing. The proceeds of this financial have been used by the Company to fund letter-of-credit based security deposits on new properties. This note bears interest at 5% per annum, with all accrued interest payable at maturity. The note matures on June 30, 2023 and is secured by a first priority security interest in all of the Company’s assets until such time as such notes are repaid or converted into a to be created series of the Company’s preferred stock or the Company’s common stock under the terms thereof. The July 2022 Bridge Financing is prepayable by the Company at any time at its election, together with a 15% prepayment premium. Following consummation of an initial public offering, the Company have the right, exercisable at its option, to convert all of the July 2022 Bridge Financing into a series of newly issued preferred stock. If the Company makes such an election, these notes will convert into a series of the Company’s preferred stock that will have an aggregate stated value equal to the aggregate principal (and interest then accrued thereon) of the notes being so converted, and pay dividends at 5% per annum on such stated value (accruing and payable at maturity or redemption of the preferred stock) and will be senior in right of liquidation to all the Company’s common stock and other securities classified as junior securities. Any such preferred stock issued upon conversion of these notes shall, in turn, at the election of the holder, be convertible into that number of shares of the Company’s common stock determined by dividing (a) the aggregate stated value (and accrued and unpaid dividends thereon) of the preferred stock being converted by (b) a conversion price of $3.00 per share . These notes are convertible into shares of the Company’s common stock at the option of the holders thereof at any time at a conversion price of $3.00 per share ( 75% of the per-share offering price in this offering). The Company priced its initial public offering (“IPO”) on August 11, 2022 and as a result raised $13.5 million before fees and expenses ( $11.4 million after fees and expenses). In conjunction with the IPO, the entire amount of the $1,330,000 of unsecured 1.5% interest promissory notes, $1,000,000 of the 6% convertible notes due April 2023, the entire amount of the 1% convertible notes due March 2024 of $700,195 and the entire amount of the 1% loan payable due March 2024 of $20,500 converted into equity. Also in conjunction with the IPO, the bridge investors requested a repayment of $2.5 million of principal which was paid on August 17, 2022 repaying the entire July 2022 Bridge Financing with the balance going to the $1.5 million loan payable entered into in June 2022 (due May 2023). In September the Company repaid $300,000 of the 6% related party loan payable due May 2023 (inclusive of repayment premium) and the Company repaid the remaining balance of the 6% convertible notes due April 2023. In connection with the consummation of the Company’s IPO, the Company issued or granted warrants, inclusive of the warrants issued to the bridge investor in the transaction described above (and in prior bridge investments by such investor) and to certain of the Company’s insiders who provided additional bridge financing to the Company in April 2022, to purchase an aggregate of 1,782,000 shares of the Company’s common stock at a weighted average exercise price of $4.12. In connection with the consummation of the Company’s IPO, the Company granted options to certain of its officers, directors and employees to purchase an aggregate of 2,644,000 shares of the Company’s common stock at weighed average exercise price of $4.00. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | a. Basis of Presentation |
Revenue Recognition | b. Revenue Recognition — The Company accounts for revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606 which was adopted at the beginning of fiscal year 2018 using the modified retrospective method. The Company did not recognize any cumulative-effect adjustment to retained earnings upon adoption as the effect was immaterial. Payment received for the future use of a rental unit is recognized as a liability and reported as rents received in advance on the balance sheets. Rents received in advance are recognized as revenue after the rental unit is occupied by the customer for the agreed upon length of time or, if the rental is cancelled, rental amounts are refunded to customers (by us or our third-party service providers, or through reversal of the customers’ charges against our processer-retained funds) or forfeited by the customers in accordance with the specific terms of the reservation. The rents received in advance balance as of June 30, 2022 and December 31, 2021, was $4,071,095 and $1,819,943, respectively and is expected to be recognized as revenue within a one-year period. |
Use of Estimates | c. Use of Estimates |
Fair Value of Financial Instruments | d. Fair Value of Financial Instruments |
Advertising | e. Advertising — |
Commissions | f. Commissions — |
Deferred Rent | g. Deferred Rent |
Income Taxes | h. Income Taxes Accounting for Uncertainty in Income Taxes, The Company recorded a provision for income taxes of $750,000 for the six months and June 30, 2022 implying a tax rate of approximately 30% before the consideration of other income. For 2021, the Company, which has been classified as a partnership for federal income tax purposes, is not subject to federal, state, and certain local income taxes and, accordingly, makes no provision for income taxes in its financial statements. The Company’s taxable income or loss is reportable by its stockholders. For 2022, the Company, converted into a C corporation. |
Sales Tax | i. Sales Tax Company accrued sales tax payable of approximately $866,409 and $296,000, respectively and it is included in accounts payable and accrued expenses in the consolidated balance sheet. The Company is in the process of filing for the Voluntary Disclosure and Compliance Program with any taxing authority to avoid any potential penalties where the Company has been delinquent in filing returns. |
Paycheck Protection Program Loan ("PPP") | j. — As disclosed in Note 3, the Company has chosen to account for the loan under FASB ASC 470, Debt. Repayment amounts due within one year are recorded as current liabilities, and the remaining amounts due in more than one year, if any, as other liabilities. In accordance with ASC 835, Interest, no imputed interest is recorded as the below market interest rate applied to this loan is governmentally prescribed. If the Company is successful in receiving forgiveness for those portions of the loan used for qualifying expenses, those amounts will be recorded as a gain upon extinguishment as noted in ASC 405, Liabilities. |
Earnings Per Share ("EPS") | k. — The Company has no common stock equivalents and as a result basic and diluted shares and weighted average shares outstanding are the same. |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
LEASES | |
Schedule of supplemental balance sheet information related to leases | Operating lease right of use asset $ 49,941,971 Operating lease liability, current portion $ 7,182,381 Operating lease liability, net of current portion $ 43,962,492 |
Schedule of future minimum lease payments under the non-cancelable operating leases | Twelve Months Ending June 30, 2023 $ 9,730,956 2024 9,916,779 2025 10,106,552 2026 10,422,764 2027 7,788,145 Thereafter 72,773,441 Total lease payment $ 120,738,637 |
Schedule of other supplemental information related to operating lease | June 30, 2022 Weighted average discount rate 10 % Weighted average remaining lease term (years) 9.1 years Three Months Six Months Ended Ended June 30, 2022 June 30, 2022 Operating lease cost $ 2,839,925 $ 5,787,499 |
LOANS PAYABLE - SBA - PPP LOAN
LOANS PAYABLE - SBA - PPP LOAN (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
LOANS PAYABLE-SBA-PPP LOAN | |
Schedule of future minimum principal repayments of the SBA,PPP loans payable | For the Twelve Months Ending June 30, 2023 $ 815,183 |
LOANS PAYABLE - SBA - EIDL LO_2
LOANS PAYABLE - SBA - EIDL LOAN (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
LOANS PAYABLE-SBA-EIDL LOAN | |
Schedule of future minimum principal repayments of the SBA,EIDL loans payable | For the Twelve Months Ending June 30, 2023 $ 8,316 2024 14,551 2025 15,106 2026 15,682 2027 16,280 Thereafter 730,065 $ 800,000 |
LOANS PAYABLE (Tables)
LOANS PAYABLE (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
LOANS PAYABLE | |
Summary of Loans Payable | June 30, December 31, 2022 2021 Original borrowings of $100,000, bears interest at 1%, requires no payments until maturity in March 2024 $ 20,500 $ 20,500 Original borrowings of $250,000, bears interest at 1%, requires no payments until maturity in January 2024 210,500 210,500 Original payable of $151,096 with additional net borrowings of $89,154, requires monthly payments of $1,500 until total payments of $240,250 have been made 1,050 242,053 Original payable of $553,175 with additional net borrowings of $125,412, requires monthly payments of $25,000 until total payments of $678,587 have been made 553,175 553,175 Original payable of $492,180, requires monthly payments of $25,000 until total payments of $492,180 have been made 865,618 1,020,890 Original borrowings of $1,500,000 and unamortized original issue discount of $225,000, bears interest at 5%, requires no payments until maturity in May 2023 1,500,000 — Original borrowings of $60,000, bears interest at 1%, requires no payments until maturity in January 2024 60,000 — Original amounts due of $195,000, related to services provided by a vendor, requires monthly payments of $10,000 through May 2022, then monthly payments of $25,000 through August 2022 at which time any remaining balance is due 115,000 145,000 3,325,843 2,192,118 Less: 2,780,054 1,267,004 $ 545,789 $ 925,114 |
Schedule of Future minimum principal repayments of the loans payable | For the Twelve Months Ending June 30, 2023 $ 2,780,054 2024 545,789 $ 3,325,843 |
LOANS PAYABLE - RELATED PARTI_2
LOANS PAYABLE - RELATED PARTIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
LOANS PAYABLE-RELATED PARTIES | |
Schedule of Loans payable, Related Parties | June 30, December 31, 2022 2021 Original borrowings of $496,500, bears interest at 6%, requires no payments until maturity in May 2023. Lender is a stockholder of the Company $ 459,000 $ 496,500 Original borrowings of $341,000, bears interest at 6%, requires no payments until maturity in April 2023. Lender is a stockholder of the Company 341,000 — Original borrowings of $150,000, bears interest at various rates based on the lenders borrowing rates. No stated repayment terms. Lender is controlled by the managing stockholder and owned by his spouse 271,128 22,221 1,071,128 518,721 Less: 1,071,128 22,221 $ — $ 496,500 |
Schedule of Future minimum principal repayments of the loans payable, Related parties | For the Twelve Months Ending June 30, 2023 $ 1,071,128 $ 1,071,128 |
CONVERTIBLE NOTES - RELATED P_2
CONVERTIBLE NOTES - RELATED PARTIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
CONVERTIBLE NOTES - RELATED PARTIES | |
Schedule of convertible notes payable, related parties | June 30, December 31, 2022 2021 Original borrowings of $1,966,019, bears interest at 6%, requires no payments until maturity in April 2023. Lender is related to the managing stockholder. Contingently convertible upon certain triggering events, at the holder’s option upon an initial public offering $ 1,266,865 $ 1,966,019 Convertible note of $1,330,000 bears interest at 1.5%, requires no payments until maturity. Notes mature and convert at IPO into equity at 75% of IPO price. $ 1,330,000 — Convertible revolving credit line of $650,000, bears interest at 1%, requires no payments until maturity in March 2024. Contingently convertible upon certain triggering events, at the holder’s option, nut no earlier than maturity, at a conversion ratio equal to 1% of enterprise value measured at conversion. Lender is related to the managing stockholder 700,195 642,841 $ 3,297,060 $ 2,608,860 Less: 2,596,865 — $ 700,195 $ 2,608,860 |
Schedule of Future minimum principal repayments of the Loans Payable, Convertible notes Related parties | For the Twelve Months Ending June 30, 2023 $ 2,596,865 2024 700,195 $ 3,297,060 |
DESCRIPTION OF BUSINESS AND P_2
DESCRIPTION OF BUSINESS AND PRINCIPLES OF CONSOLIDATION (Details) - item | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
DESCRIPTION OF BUSINESS AND PRINCIPLES OF CONSOLIDATION | ||||
Number of multi family and hotel units | 584 | 423 | ||
Average number of multi family and hotel units | 565 | 376 | 577 | 396 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Rents received in advance | $ 4,071,095 | $ 4,071,095 | $ 1,819,943 | ||
Advertising and marketing costs | 0 | $ 196,600 | 26 | $ 196,600 | |
Pays commissions to third-party | 1,393,128 | $ 317,108 | 2,690,298 | $ 430,620 | |
Accrued sales tax payable | 866,409 | 866,409 | $ 296,000 | ||
Provision for income taxes | $ 750,000 | $ 750,000 | |||
Income tax rate | 30% |
GOING CONCERN (Details)
GOING CONCERN (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
GOING CONCERN | |||||||
Working capital | $ 18,502,055 | $ 18,502,055 | |||||
Stockholders deficit | (9,446,581) | $ (10,208,990) | (9,446,581) | $ (11,214,050) | $ 0 | ||
Net income | $ 762,409 | $ 1,419,433 | $ (1,133,132) | $ 2,181,842 | $ (2,440,038) |
LEASES - Supplemental balance s
LEASES - Supplemental balance sheet information (Details) - USD ($) | Jun. 30, 2022 | Jan. 01, 2022 |
LEASES | ||
Operating lease right of use asset | $ 49,941,971 | $ 36,304,289 |
Operating lease liability, current portion | 7,182,381 | 7,370,890 |
Operating lease liability, net of current portion | $ 43,962,492 | $ 29,884,584 |
LEASES - Future minimum lease p
LEASES - Future minimum lease payments (Details) | Jun. 30, 2022 USD ($) |
LEASES | |
2023 | $ 9,730,956 |
2024 | 9,916,779 |
2025 | 10,106,552 |
2026 | 10,422,764 |
2027 | 7,788,145 |
Thereafter | 72,773,441 |
Total lease payment | $ 120,738,637 |
LEASES - Other supplemental inf
LEASES - Other supplemental information (Details) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | |
LEASES | ||
Weighted average discount rate | 10% | 10% |
Weighted average remaining lease term (years) | 9 years 1 month 6 days | 9 years 1 month 6 days |
Operating lease cost | $ 2,839,925 | $ 5,787,499 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jan. 01, 2022 | |
LEASES | ||
Operating lease right-of-use asset, net | $ 49,941,971 | $ 36,304,289 |
Operating lease liability - current | 7,182,381 | 7,370,890 |
Operating lease liability | 43,962,492 | $ 29,884,584 |
Cumulative effect adjustment of unamortized deferred lease costs incurred to retained earnings | $ 414,373 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | ||
Accounts payable and accrued expenses | $ 5,301,053 | $ 4,209,366 |
Credit cards payable | 937,459 | 980,000 |
Professional fee payable | 681,000 | 600,000 |
Rent payable | 1,184,481 | 570,000 |
Commissions payable | 425,000 | 570,000 |
Short term negative cash balances | 475,000 | |
Sales tax payable | 866,409 | 295,000 |
Costs related to the initial public offering | 678,669 | 290,000 |
Refunds payable | 228,000 | |
Furniture | 112,500 | 97,000 |
Other miscellaneous items | $ 415,537 | $ 105,000 |
LOANS PAYABLE - SBA - PPP LOA_2
LOANS PAYABLE - SBA - PPP LOAN - Schedule of Future minimum principal repayments (Details) | Jun. 30, 2022 USD ($) |
LOANS PAYABLE-SBA-PPP LOAN | |
2023 | $ 815,183 |
LOANS PAYABLE - SBA - PPP LOA_3
LOANS PAYABLE - SBA - PPP LOAN - Narrative (Details) - PPP Loan - USD ($) | 1 Months Ended | ||||||
May 31, 2022 | Apr. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | May 31, 2020 | Apr. 30, 2020 | Mar. 27, 2020 | |
Short-Term Debt | |||||||
Original amount of Loans payable | $ 298,958 | $ 516,225 | $ 10,000,000 | ||||
Monthly payment of loans payable | $ 15,932 | $ 29,052 | |||||
Interest rate of loans payable | 1% | 1% | |||||
Accrued interest | $ 16,303 | $ 13,337 |
LOANS PAYABLE - SBA - EIDL LO_3
LOANS PAYABLE - SBA - EIDL LOAN - Schedule of Future minimum principal repayments (Details) - EIDL | Jun. 30, 2022 USD ($) |
Debt Instrument [Line Items] | |
2023 | $ 8,316 |
2024 | 14,551 |
2025 | 15,106 |
2026 | 15,682 |
2027 | 16,280 |
Thereafter | 730,065 |
Total | $ 800,000 |
LOANS PAYABLE - SBA - EIDL LO_4
LOANS PAYABLE - SBA - EIDL LOAN - Narrative (Details) | 12 Months Ended | |||||||
Jun. 18, 2022 | Apr. 21, 2022 USD ($) | Jul. 25, 2020 USD ($) | Jun. 18, 2020 USD ($) | Dec. 31, 2020 USD ($) loan | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | Apr. 21, 2020 USD ($) | |
Debt Instrument | ||||||||
Loans payable - SBA - EIDL Loan | $ 800,000 | $ 800,000 | ||||||
EIDL | ||||||||
Debt Instrument | ||||||||
Number of loans | loan | 3 | |||||||
Interest rate of loans payable | 3.75% | 3.75% | 3.75% | 3.75% | ||||
Prepayment penalty | $ 0 | |||||||
Original amount of Loans payable | $ 150,000 | $ 150,000 | $ 500,000 | |||||
Monthly payment of loans payable | $ 2,437 | $ 731 | $ 731 | |||||
Loan payable term | 30 years | |||||||
Loans payable - SBA - EIDL Loan | 800,000 | $ 800,000 | ||||||
Accrued interest | $ 62,656 |
MERCHANT CASH ADVANCES (Details
MERCHANT CASH ADVANCES (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
MERCHANT CASH ADVANCES | ||
Merchant cash advances | $ 575,489 | $ 1,386,008 |
LOANS PAYABLE - Summary of Loan
LOANS PAYABLE - Summary of Loans Payable (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Loans Payable | $ 3,325,843 | $ 2,192,118 |
Less: Current maturities | 2,780,054 | 1,267,004 |
Loans Payable Non Current | 545,789 | 925,114 |
Original borrowings of $100,000, bears interest at 1%, requires no payments until maturity in March 2024 | ||
Debt Instrument [Line Items] | ||
Loans Payable | 20,500 | 20,500 |
Original borrowings of $250,000, bears interest at 1%, requires no payments until maturity in January 2024 | ||
Debt Instrument [Line Items] | ||
Loans Payable | 210,500 | 210,500 |
Original payable of $151,096 with additional net borrowings of $89,154, requires monthly payments of $1,500 until total payments of $240,250 have been made | ||
Debt Instrument [Line Items] | ||
Loans Payable | 1,050 | 242,053 |
Original payable of $553,175 with additional net borrowings of $125,412, requires monthly payments of $25,000 until total payments of $678,587 have been made | ||
Debt Instrument [Line Items] | ||
Loans Payable | 553,175 | 553,175 |
Original payable of $492,180, requires monthly payments of $25,000 until total payments of $492,180 have been made | ||
Debt Instrument [Line Items] | ||
Loans Payable | 865,618 | 1,020,890 |
Original borrowings of $1,500,000 and unamortized original issue discount of $225,000, bears interest at 5%, requires no payments until maturity in May 2023 | ||
Debt Instrument [Line Items] | ||
Loans Payable | 1,500,000 | |
Original borrowings of $60,000, bears interest at 1%, requires no payments until maturity in January 2024 | ||
Debt Instrument [Line Items] | ||
Loans Payable | 60,000 | |
Original amounts due of $195,000, related to services provided by a vendor, requires monthly payments of $10,000 through May 2022, then monthly payments of $25,000 through August 2022 at which time any remaining balance is due | ||
Debt Instrument [Line Items] | ||
Loans Payable | $ 115,000 | $ 145,000 |
LOANS PAYABLE - Summary of Lo_2
LOANS PAYABLE - Summary of Loans Payable - Parenthetical (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Original borrowings of $100,000, bears interest at 1%, requires no payments until maturity in March 2024 | ||
Debt Instrument [Line Items] | ||
Original amount of Loans payable | $ 100,000 | $ 100,000 |
Interest rate of loans payable | 1% | 1% |
Additional borrowings | $ 0 | $ 0 |
Original borrowings of $250,000, bears interest at 1%, requires no payments until maturity in January 2024 | ||
Debt Instrument [Line Items] | ||
Original amount of Loans payable | $ 250,000 | $ 250,000 |
Interest rate of loans payable | 1% | 1% |
Additional borrowings | $ 0 | $ 0 |
Original payable of $151,096 with additional net borrowings of $89,154, requires monthly payments of $1,500 until total payments of $240,250 have been made | ||
Debt Instrument [Line Items] | ||
Original amount of Loans payable | 151,096 | 151,096 |
Additional borrowings | 89,154 | 89,154 |
Monthly payment of loans payable | 1,500 | 1,500 |
Total payments made | 240,250 | 240,250 |
Original payable of $553,175 with additional net borrowings of $125,412, requires monthly payments of $25,000 until total payments of $678,587 have been made | ||
Debt Instrument [Line Items] | ||
Original amount of Loans payable | 553,175 | 553,175 |
Additional borrowings | 125,412 | 125,412 |
Monthly payment of loans payable | 25,000 | 25,000 |
Total payments made | 678,587 | 678,587 |
Original payable of $492,180, requires monthly payments of $25,000 until total payments of $492,180 have been made | ||
Debt Instrument [Line Items] | ||
Original amount of Loans payable | 492,180 | 492,180 |
Monthly payment of loans payable | 25,000 | 25,000 |
Total payments made | 492,180 | 492,180 |
Original borrowings of $1,500,000 and unamortized original issue discount of $225,000, bears interest at 5%, requires no payments until maturity in May 2023 | ||
Debt Instrument [Line Items] | ||
Original amount of Loans payable | $ 1,500,000 | $ 1,500,000 |
Interest rate of loans payable | 5% | 5% |
Additional borrowings | $ 0 | $ 0 |
Debt Instrument, unamortized discount | 225,000 | |
Original borrowings of $60,000, bears interest at 1%, requires no payments until maturity in January 2024 | ||
Debt Instrument [Line Items] | ||
Original amount of Loans payable | $ 60,000 | $ 60,000 |
Interest rate of loans payable | 1% | 1% |
Additional borrowings | $ 0 | $ 0 |
Original amounts due of $195,000, related to services provided by a vendor, requires monthly payments of $10,000 through May 2022, then monthly payments of $25,000 through August 2022 at which time any remaining balance is due | ||
Debt Instrument [Line Items] | ||
Original amount of Loans payable | 195,000 | 195,000 |
Additional borrowings | 10,000 | 10,000 |
Monthly payment of loans payable | $ 25,000 | $ 25,000 |
LOANS PAYABLE - Schedule of Fut
LOANS PAYABLE - Schedule of Future minimum principal repayments of the loans payable (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
LOANS PAYABLE | ||
2023 | $ 2,780,054 | |
2024 | 545,789 | |
Total | $ 3,325,843 | $ 2,192,118 |
LOANS PAYABLE - RELATED PARTI_3
LOANS PAYABLE - RELATED PARTIES - Schedule of Loans payable, Related Parties (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Loans Payable - Related Parties | $ 1,071,128 | $ 518,721 |
Less: Current maturities | 1,071,128 | 22,221 |
Loans Payable - Related Parties, Non current | 496,500 | |
Original borrowings of $496,500, bears interest at 6%, requires no payments until maturity in May 2023. Lender is a stockholder of the Company | Lender, Stockholder of the Company | ||
Debt Instrument [Line Items] | ||
Loans Payable - Related Parties | 459,000 | 496,500 |
Original borrowings of $341,000, bears interest at 6%, requires no payments until maturity in April 2023. Lender is a stockholder of the Company | Lender, Stockholder of the Company | ||
Debt Instrument [Line Items] | ||
Loans Payable - Related Parties | 341,000 | |
Original borrowings of $150,000, bears interest at various rates based on the lenders borrowing rates. No stated repayment terms. Lender is controlled by the managing stockholder and owned by his spouse | Lender, Stockholder of the Company | ||
Debt Instrument [Line Items] | ||
Loans Payable - Related Parties | $ 271,128 | $ 22,221 |
LOANS PAYABLE - RELATED PARTI_4
LOANS PAYABLE - RELATED PARTIES - Schedule of Loans payable, Related Parties - Parenthetical (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Original borrowings of $496,500, bears interest at 6%, requires no payments until maturity in May 2023. Lender is a stockholder of the Company | Lender, Stockholder of the Company | ||
Debt Instrument [Line Items] | ||
Original amount of Loans payable | $ 496,500 | $ 496,500 |
Interest rate of loans payable | 6% | 6% |
Additional borrowings | $ 0 | $ 0 |
Original borrowings of $341,000, bears interest at 6%, requires no payments until maturity in April 2023. Lender is a stockholder of the Company | Lender, Stockholder of the Company | ||
Debt Instrument [Line Items] | ||
Original amount of Loans payable | $ 341,000 | $ 341,000 |
Interest rate of loans payable | 6% | 6% |
Additional borrowings | $ 0 | $ 0 |
Original borrowings of $150,000, bears interest at various rates based on the lenders borrowing rates. No stated repayment terms. Lender is controlled by the managing stockholder and owned by his spouse | Lender, controlled by the managing stockholder and owned by his spouse | ||
Debt Instrument [Line Items] | ||
Original amount of Loans payable | $ 150,000 | $ 150,000 |
LOANS PAYABLE - RELATED PARTI_5
LOANS PAYABLE - RELATED PARTIES - Schedule of Future minimum principal repayments of the loans payable, Related parties (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
LOANS PAYABLE-RELATED PARTIES | ||
2023 | $ 1,071,128 | |
Loans Payable - Related Parties | $ 1,071,128 | $ 518,721 |
CONVERTIBLE NOTES - Schedule of
CONVERTIBLE NOTES - Schedule of Convertible Notes payable, Related Parties (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Convertible Notes - Related Parties | $ 3,297,060 | $ 2,608,860 |
Less: Current maturities | 2,596,865 | |
Convertible loans payable non current - related parties | 700,195 | 2,608,860 |
Original borrowings of $1,966,019, bears interest at 6%, requires no payments until maturity in April 2023 | Lender, related to the managing stockholder | ||
Debt Instrument [Line Items] | ||
Convertible Notes - Related Parties | 1,266,865 | 1,966,019 |
Convertible note of $1,330,000 bears interest at 1.5%, requires no payments until maturity. Notes mature and convert at IPO into equity at 75% of IPO price. | ||
Debt Instrument [Line Items] | ||
Convertible Notes - Related Parties | 1,330,000 | |
Convertible revolving credit line of $650,000, bears interest at 1%, requires no payments until maturity in March 2024 | Lender, related to the managing stockholder | ||
Debt Instrument [Line Items] | ||
Convertible Notes - Related Parties | $ 700,195 | $ 642,841 |
CONVERTIBLE NOTES - Schedule _2
CONVERTIBLE NOTES - Schedule of Convertible Notes payable, Related Parties (Parentheticals) (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Original borrowings of $1,966,019, bears interest at 6%, requires no payments until maturity in April 2023 | Lender, related to the managing stockholder | ||
Debt Instrument [Line Items] | ||
Original amount of Loans payable | $ 1,966,019 | $ 1,966,019 |
Interest rate of loans payable | 6% | |
Additional borrowings | $ 0 | |
Convertible note of $1,330,000 bears interest at 1.5%, requires no payments until maturity. Notes mature and convert at IPO into equity at 75% of IPO price. | ||
Debt Instrument [Line Items] | ||
Original amount of Loans payable | $ 1,330,000 | |
Interest rate of loans payable | 1.50% | |
Percent of IPO Price used for conversion | 75% | |
Convertible note of $1,330,000 bears interest at 1.5%, requires no payments until maturity. Notes mature and convert at IPO into equity at 75% of IPO price. | Lender, related to the managing stockholder | ||
Debt Instrument [Line Items] | ||
Additional borrowings | $ 0 | |
Convertible revolving credit line of $650,000, bears interest at 1%, requires no payments until maturity in March 2024 | Lender, related to the managing stockholder | ||
Debt Instrument [Line Items] | ||
Original amount of Loans payable | $ 650,000 | $ 650,000 |
Interest rate of loans payable | 1% | 1% |
Additional borrowings | $ 0 | |
Interest rate on revolving credit line | 1% | 1% |
CONVERTIBLE NOTES - Schedule _3
CONVERTIBLE NOTES - Schedule of Future minimum principal repayments of the Loans Payable, Related parties (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
CONVERTIBLE NOTES - RELATED PARTIES | ||
2023 | $ 2,596,865 | |
2024 | 700,195 | |
Convertible Notes - Related Parties | $ 3,297,060 | $ 2,608,860 |
LINE OF CREDIT (Details)
LINE OF CREDIT (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2022 | Dec. 31, 2021 | Feb. 28, 2019 | |
Line of Credit Facility [Line Items] | |||
Line of Credit outstanding balance | $ 94,975 | $ 94,975 | |
Line of Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Amount borrowed under Convertible credit line | $ 95,000 | ||
Interest rate, Variable | 3.49% | ||
Prime Rate | Line of Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Interest Rate, Stated | 4.75% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Consulting Services - General and Administrative Expenses - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
SuperLuxMia LLC | ||||
Related Party Transaction [Line Items] | ||||
Transaction amount with Related parties | $ 0 | $ 246,115 | $ 191,845 | $ 386,805 |
CAO | ||||
Related Party Transaction [Line Items] | ||||
Transaction amount with Related parties | $ 12,500 | $ 35,000 | $ 47,500 | $ 45,000 |
RISKS AND UNCERTAINTIES - Narra
RISKS AND UNCERTAINTIES - Narrative (Details) | Jun. 30, 2022 USD ($) |
RISKS AND UNCERTAINTIES | |
FDIC Insurance amount | $ 250,000 |
MAJOR SALES CHANNELS (Details)
MAJOR SALES CHANNELS (Details) - item | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
MAJOR SALES CHANNELS | ||||
Number of sales channels | 3 | |||
Sales Revenue Net | Customer Concentration Risk | Other Customer | ||||
MAJOR SALES CHANNELS | ||||
Total rental revenue, percentage | 91% | 90% | 88% | 93% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | 1 Months Ended | 6 Months Ended | ||||
Aug. 17, 2022 | Aug. 11, 2022 | Sep. 30, 2022 | Jul. 31, 2022 | Apr. 30, 2022 | Jun. 30, 2022 | |
SUBSEQUENT EVENTS | ||||||
Warrants issued | 1,782,000 | 2,644,000 | ||||
Weighed average exercise price | $ 4.12 | $ 4 | ||||
Bridge Financing loan payable | $ 1,500,000 | |||||
Subsequent events | ||||||
SUBSEQUENT EVENTS | ||||||
Repayment of principal | $ 2,500,000 | |||||
Subsequent events | IPO Before Fees And Expenses [Member] | ||||||
SUBSEQUENT EVENTS | ||||||
Amount of IPO | $ 13,500,000 | |||||
Subsequent events | IPO After Fees And Expenses [Member] | ||||||
SUBSEQUENT EVENTS | ||||||
Amount of IPO | $ 11,400,000 | |||||
Subsequent events | July 2022 Bridge Financing | ||||||
SUBSEQUENT EVENTS | ||||||
Interest rate | 5% | |||||
Aggregate principal amount | $ 1,955,000 | |||||
Warrants issued | 252,875 | |||||
Prepayment premium percentage | 15% | |||||
Percentage of dividend on preferred stock on conversion of notes | 5% | |||||
Conversion price per share for conversion of converted preferred stock into common stock | $ 3 | |||||
Conversion price per share for conversion of converted preferred stock into common stock, as a percentage of per-share offering price | 75% | |||||
Conversion price per share for conversion of notes into common stock | $ 3 | |||||
Conversion price per share for conversion of notes into common stock, as a percentage of per-share offering price | 75% | |||||
Subsequent events | Unsecured 1.5% interest promissory notes | ||||||
SUBSEQUENT EVENTS | ||||||
Interest rate | 1.50% | |||||
Aggregate principal amount | $ 1,330,000 | |||||
Subsequent events | 6% convertible notes due April 2023 | ||||||
SUBSEQUENT EVENTS | ||||||
Interest rate | 6% | 6% | ||||
Aggregate principal amount | $ 1,000,000 | |||||
Subsequent events | 1% convertible notes due March 2024 | ||||||
SUBSEQUENT EVENTS | ||||||
Interest rate | 1% | |||||
Aggregate principal amount | $ 700,195 | |||||
Subsequent events | 1% loan payable due March 2024 | ||||||
SUBSEQUENT EVENTS | ||||||
Interest rate | 1% | |||||
Aggregate principal amount | $ 20,500 | |||||
Subsequent events | 6% related party loan payable due May 2023 | ||||||
SUBSEQUENT EVENTS | ||||||
Interest rate | 6% | |||||
Repayment of related party loan | $ 300,000 |