UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: ~~June 30, 2022~~March 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to _____________

Commission File Number: 000-51229

MANUFACTURED HOUSING PROPERTIES INC.

(Exact name of registrant as specified in its charter)

Nevada		51-0482104
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

136 Main Street, Pineville, North Carolina		28134
(Address of principal executive offices)		(Zip Code)

(980) 273-1702

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for comply with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~August 12, 2022,~~May 11, 2023, there were ~~12,462,013~~12,493,012 common shares of the registrant issued and outstanding.

Manufactured Housing Properties Inc.

Quarterly Report on Form 10-Q

Period Ended ~~June 30, 2022~~March 31, 2023

TABLE OF CONTENTS

	PART I
	FINANCIAL INFORMATION

Item 1.	Financial Statements.	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	262
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	3711
Item 4.	Controls and Procedures.	3711

	PART II OTHER INFORMATION
	~~FINANCIAL INFORMATION~~

Item 1.	Legal Proceedings	3813
Item 1A.	Risk Factors	3813
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3813
Item 3.	Defaults Upon Senior Securities	3813
Item 4.	Mine Safety Disclosures	3813
Item 5.	Other Information	3813
Item 6.	Exhibits	3914

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

MANUFACTURED HOUSING PROPERTIES INC.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

		Page

Condensed Consolidated Balance Sheets as of ~~June 30, 2022~~March 31, 2023 (unaudited) and December 31, ~~2021~~2022		2 F-1
Condensed Consolidated Statements of Operations for the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~ (unaudited)		3F-2
Condensed Consolidated Statements of Changes in Deficit for the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~ (unaudited)		4F-3
Condensed Consolidated Statements of Cash Flows for the ~~Six~~Three Months Ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~ (unaudited)		5F-4
Notes to Unaudited Condensed Consolidated Financial Statements		6F-5 - 25F-25

MANUFACTURED HOUSING PROPERTIES INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF ~~JUNE 30, 2022~~MARCH 31, 2023 AND DECEMBER 31, ~~2021~~2022

	June 30, 2022			December 31, 2021			March 31, 2023			December 31, 2022
Assets	(unaudited)						(unaudited)
Investment Property
Land	$	22,508,158		$	18,854,760		$	36,399,696		$	30,263,687
Site and Land Improvements		37,703,886			35,133,079			45,346,146			44,035,649
Buildings and Improvements		19,730,527			14,666,296			25,321,424			23,229,657
Construction in Process		2,943,578			3,030,456			1,692,050			2,541,376
Total Investment Property		82,886,149			71,684,591			108,759,316			100,070,369
Accumulated Depreciation		(6,390,849	)		(4,832,300	)		(9,245,738	)		(8,225,976	)
Net Investment Property		76,495,300			66,852,291			99,513,578			91,844,393
Cash and Cash Equivalents, including restricted cash of $810,280 and $705,195, respectively		3,070,280			2,106,329
Cash and Cash Equivalents								5,710,926			5,090,369
Restricted Cash								5,222,057			5,315,246
Accounts Receivable		287,284			175,955			225,894			368,081
Other Assets		2,430,053			913,205			788,927			975,064
TOTAL ASSETS	$	82,282,917		$	70,047,780		$	111,461,382		$	103,593,153

Liabilities
Accounts Payable	$	679,600		$	477,484		$	780,511		$	755,124
Notes Payable, net of $2,390,363 and $2,064,294 debt discount, respectively		52,723,981			48,891,483
Lines of Credit – Variable Interest Entity, net of $173,508 and $151,749 debt discount, respectively		7,787,643			6,200,607
Notes Payable, net of $3,772,073 and $3,666,214 debt discount, respectively								80,942,053			75,883,866
Lines of Credit – Variable Interest Entities, net of $205,877 and $160,372 debt discount, respectively								7,624,918			6,208,947
Lines of Credit – Related Party		4,000,000			150,000			2,000,000			2,000,000
Note Payable – Related Party		1,500,000			1,500,000
Accrued Liabilities including amounts due to related parties of $9,250 and $250,000, respectively		547,575			1,235,001
Accrued Liabilities including amounts due to related parties of $1,229,166 and $1,154,166, respectively								2,053,265			2,054,438
Tenant Security Deposits		810,280			705,195			892,726			879,676
Series C Redeemable Preferred Stock, par value $0.01 per share; 47,000 shares authorized; 12,037 and 5,734 shares issued and outstanding; redemption value $12,036,900 and $5,734,400 as of June 30, 2022 and December 31, 2021, respectively		11,168,125			5,214,370
Series C Redeemable Preferred Stock, par value $0.01 per share; 47,000 shares authorized; 25,394 and 21,584 shares issued and outstanding; redemption value $25,393,919 and $21,584,002 as of March 31, 2023 and December 31, 2022, respectively								23,812,360			20,177,187
Total Liabilities		79,217,204			64,374,140			118,105,833			107,959,238

Commitments and Contingencies (See note 6)

Redeemable Preferred Stock – subject to redemption
Series A Cumulative Redeemable Convertible Preferred Stock, par value $0.01 per share; 4,000,000 shares authorized; 1,886,000 shares issued and outstanding; redemption value $7,072,500 as of June 30, 2022 and December 31, 2021		6,077,521			5,841,771
Series B Cumulative Redeemable Preferred Stock, par value $0.01 per share; 1,000,000 shares authorized; 758,551 shares issued and outstanding; redemption value $11,378,265 as of June 30, 2022 and December 31, 2021		8,887,102			8,518,594
Series A Cumulative Redeemable Convertible Preferred Stock, par value $0.01 per share; 4,000,000 shares authorized; 1,826,000 shares issued and outstanding; redemption value $6,847,500 as of March 31, 2023 and December 31, 2022								6,222,041			6,107,916
Series B Cumulative Redeemable Preferred Stock, par value $0.01 per share; 1,000,000 shares authorized; 747,951 shares issued and outstanding; redemption value $11,219,265 as of March 31, 2023 and December 31, 2022								9,303,822			9,122,218
Series D Cumulative Redeemable Preferred Stock, par value $0.01 per share; 75,000 shares authorized; no shares issued and outstanding; no redemption value as of March 31, 2023 and December 31, 2022								-			-

Deficit
Common Stock, par value $0.01 per share; 200,000,000 shares authorized; 12,412,013 and 12,403,680 shares are issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		124,120			124,037
Common Stock, par value $0.01 per share; 200,000,000 shares authorized; 12,493,012 shares are issued and outstanding as of March 31, 2023 and December 31, 2022								124,930			124,930
Additional Paid in Capital		(4,179,314	)		(3,160,712	)		(5,856,037	)		(5,428,984	)
Accumulated Deficit		(6,395,718	)		(4,672,537	)		(14,456,564	)		(12,521,376	)
Total Manufactured Housing Properties Inc. Deficit		(10,450,912	)		(7,709,212	)		(20,187,671	)		(17,825,430	)
Non-controlling interest in Variable Interest Entities		(1,447,998	)		(977,513	)		(1,982,643	)		(1,770,789	)
Total Deficit		(11,898,910	)		(8,686,725	)		(22,170,314	)		(19,596,219	)
TOTAL LIABILITIES AND DEFICIT	$	82,282,917		$	70,047,780		$	111,461,382		$	103,593,153

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

F-1

MANUFACTURED HOUSING PROPERTIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE ~~AND SIX~~ MONTHS ENDED ~~JUNE 30,~~MARCH 31, 2023 and 2022 ~~AND 2021~~

(UNAUDITED)

	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended March 31,
	2022			2021			2022			2021			2023			2022
Revenue
Rental and related income	$	3,283,777		$	1,776,377		$	6,323,799		$	3,440,058		$	4,145,189		$	3,040,022
Gross revenues from home sales		87,594			23,061			102,594			65,244
Gross Revenues from Home Sales														112,300			15,000
Total revenues		3,371,371			1,799,438			6,426,393			3,505,302			4,257,489			3,055,022

Community operating expenses
Repair and maintenance		327,265			115,394			515,819			223,190			275,529			221,019
Real estate taxes		217,093			56,846			397,922			199,240			201,633			180,829
Utilities		239,985			142,325			475,880			299,312			306,412			235,895
Insurance		78,999			40,609			139,297			68,397			104,059			60,298
General and administrative expense		405,044			159,112			781,240			304,122			708,168			376,196
Total community operating expenses		1,268,386			514,286			2,310,158			1,094,261			1,595,801			1,074,237

Corporate payroll and overhead		1,254,918			583,733			2,163,996			1,164,467			1,571,454			909,078
Depreciation expense		818,975			462,042			1,578,679			903,665			1,023,015			759,704
Interest expense		1,235,048			447,306			2,336,741			893,354			2,053,455			1,101,693
Refinancing costs		15,751			-			15,751			16,675
Cost of home sales		122,269			-			154,734			-			130,806			-
Total expenses		4,715,347			2,007,367			8,560,059			4,072,422			6,374,531			3,844,712
Other income		-			139,300			-			139,300
Net loss before provision for income taxes		(1,343,976	)		(68,629	)		(2,133,666	)		(427,820	)		(2,117,042	)		(789,690	)
Provision for income taxes		-			-			-			-			-			-
Net loss	$	(1,343,976	)	$	(68,629	)	$	(2,133,666	)	$	(427,820	)	$	(2,117,042	)	$	(789,690	)

Net income (loss) attributable to non-controlling interest variable interest entities		(250,915	)		118,348			(410,485	)		173,433
Net loss attributable to non-controlling interest variable interest entities														(182,466	)		(159,570	)
Net income (loss) attributable to Manufactured Housing Properties, Inc.		(1,093,061	)		(186,977	)		(1,723,181	)		(601,253	)		(1,934,576	)		(630,120	)
Preferred stock dividends and put option value accretion
Series A preferred dividends		94,300			91,000			188,600			187,167			91,633			94,300
Series A preferred put option value accretion		117,875			118,125			235,746			236,250			114,125			117,871
Series B preferred dividends		151,785			146,322			303,570			275,731			149,665			151,785
Series B preferred put option value accretion		184,254			184,687			368,508			370,526			181,604			184,254
Total preferred stock dividends and put option value accretion		548,214			540,134			1,096,424			1,069,674			537,027			548,210
Net loss attributable to common stockholders	$	(1,641,275	)	$	(727,111	)	$	(2,819,605	)	$	(1,670,927	)	$	(2,471,603	)	$	(1,178,330	)

Weighted average shares - basic and fully diluted		12,835,977			12,923,355			12,833,928			12,921,463			12,883,521			13,108,188

Net loss per share – basic and fully diluted	$	(0.13	)	$	(0.06	)	$	(0.22	)	$	(0.13	)	$	(0.19	)	$	(0.09	)

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

F-2

MANUFACTURED HOUSING PROPERTIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN DEFICIT

FOR THE THREE ~~AND SIX~~ MONTHS ENDED ~~JUNE 30,~~MARCH 31, 2023 AND 2022 ~~AND 2021~~

(UNAUDITED)

	COMMON STOCK				ADDITIONAL						TOTAL MANUFACTURED			NON						COMMON STOCK				ADDITIONAL PAID IN			ACCUMULATED			TOTAL MANUFACTURED HOUSING PROPERTIES			NON CONTROLLING
	SHARES		PAR VALUE		PAID IN CAPITAL			ACCUMULATED DEFICIT			HOUSING PROPERTIES INC.			CONTROLLING INTEREST			DEFICIT
Balance at January 1, 2021		12,398,580	$	124,016	$	(1,052,611	)		(3,574,194	)	$	(4,502,789	)	$	(419,275	)	$	(4,922,064	)
Stock option expense		-		-		646			-			646			-			646
Preferred shares Series A dividends		-		-		(96,167	)		-			(96,167	)		-			(96,167	)
Preferred shares Series A put option value accretion		-		-		(118,125	)		-			(118,125	)		-			(118,125	)
Preferred shares Series B dividends		-		-		(129,409	)		-			(129,409	)		-			(129,409	)
Preferred shares Series B put option value accretion		-		-		(185,839	)		-			(185,839	)		-			(185,839	)
Common Stock issuance to preferred share holders		5,100		51		1,326			-			1,377			-			1,377
Contributions to VIE		-		-		-			-			-			12,371			12,371
Distributions from VIE		-		-		-			-			-			(20,000	)		(20,000	)
Net loss		-		-		-			(414,276	)		(414,276	)		55,085			(359,191	)
Balance at March 31, 2021		12,403,680	$	124,067	$	(1,580,179	)	$	(3,988,470	)	$	(5,444,582	)	$	(371,819	)	$	(5,816,401	)
Stock option expense		-		-		37,171			-			37,171			-			37,171
Preferred shares Series A dividends		-		-		(91,000	)		-			(91,000	)		-			(91,000	)
Preferred shares Series A put option value accretion		-		-		(118,125	)		-			(118,125	)		-			(118,125	)
Preferred shares Series B dividends		-		-		(146,322	)		-			(146,322	)		-			(146,322	)
Preferred shares Series B put option value accretion		-		-		(184,687	)		-			(184,687	)		-			(184,687	)
Distributions from VIE		-		-		-			-			-			(30,000	)		(30,000	)
Net Income (Loss)		-		-		-			(186,977	)		(186,977	)		118,348			(68,629	)
Balance at June 30, 2021		12,403,680	$	124,067	$	(2,083,142	)	$	(4,175,447	)	$	(6,134,522	)	$	(283,471	)	$	(6,417,993	)
																				SHARES		PAR VALUE		CAPITAL			DEFICIT			INC.			INTEREST			DEFICIT
Balance at January 1, 2022		12,403,680	$	124,037	$	(3,160,712	)	$	(4,672,537	)	$	(7,709,212	)	$	(977,513	)	$	(8,686,725	)		12,403,680	$	124,037	$	(3,160,712	)		(4,672,537	)	$	(7,709,212	)	$	(977,513	)	$	(8,686,725	)
Stock option expense		-		-		49,760			-			49,760			-			49,760			-		-		49,760			-			49,760			-			49,760
Preferred shares Series A dividends		-		-		(94,300	)		-			(94,300	)		-			(94,300	)		-		-		(94,300	)		-			(94,300	)		-			(94,300	)
Preferred shares Series A put option value accretion		-		-		(117,871	)		-			(117,871	)		-			(117,871	)		-		-		(117,871	)		-			(117,871	)		-			(117,871	)
Preferred shares Series B dividends		-		-		(151,785	)		-			(151,785	)		-			(151,785	)		-		-		(151,785	)		-			(151,875	)		-			(151,875	)
Preferred shares Series B put option value accretion		-		-		(184,254	)		-			(184,254	)		-			(184,254	)		-		-		(184,254	)		-			(184,254	)		-			(184,254	)
Distributions from VIE		-		-		-			-			-			(30,000	)		(30,000	)		-		-		-			-			-			(30,000	)		(30,000	)
Net Loss		-		-		-			(630,120	)		(630,120	)		(159,570	)		(789,690	)
Net loss																					-		-		-			(630,120	)		(630,120	)		(159,570	)		(789,690	)
Balance at March 31, 2022		12,403,680	$	124,037	$	(3,659,162	)	$	(5,302,657	)	$	(8,837,782	)	$	(1,167,083	)	$	(10,004,865	)		12,403,680	$	124,037	$	(3,659,162	)	$	(5,302,657	)	$	(8,837,782	)	$	(1,167,083	)	$	(10,004,865	)

Balance at January 1, 2023																					12,493,012	$	124,930	$	(5,428,984	)	$	(12,521,376	)	$	(17,825,430	)	$	(1,770,789	)	$	(19,596,219	)
Stock option expense		-		-		28,062			-			28,062			-			28,062			-		-		109,974			-			109,974			-			109,974
Common Stock issued through stock options		8,333		83		-			-			83			-			83
Preferred shares Series A dividends		-		-		(94,300	)		-			(94,300	)		-			(94,300	)		-		-		(91,633	)		-			(91,633	)		-			(91,633	)
Preferred shares Series A put option value accretion		-		-		(117,875	)		-			(117,875	)		-			(117,875	)		-		-		(114,125	)		-			(114,125	)		-			(114,125	)
Preferred shares Series B dividends		-		-		(151,785	)		-			(151,785	)		-			(151,785	)		-		-		(149,665	)		-			(149,665	)		-			(149,665	)
Preferred shares Series B put option value accretion		-		-		(184,254	)		-			(184,254	)		-			(184,254	)		-		-		(181,604	)		-			(181,604	)		-			(181,604	)
Distributions from VIE		-		-		-			-			-			(30,000	)		(30,000	)		-		-		-			(612	)		(612	)		(29,388	)		(30,000	)
Net Income (Loss)		-		-		-			(1,093,061	)		(1,093,061	)		(250,915	)		(1,343,976	)		-		-		-			(1,934,576	)		(1,934,576	)		(182,466	)		(2,117,042	)
Balance at June 30, 2022		12,412,013	$	124,120	$	(4,179,314	)	$	(6,395,718	)	$	(10,450,912	)	$	(1,447,998	)	$	(11,898,910	)
Balance at March 31, 2023																					12,493,012	$	124,930	$	(5,856,037	)	$	(14,456,564	)	$	(20,187,671	)	$	(1,982,643	)	$	(22,170,314	)

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

F-3

MANUFACTURED HOUSING PROPERTIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE ~~SIX~~THREE MONTHS ENDED ~~JUNE 30,~~MARCH 31, 2023 AND 2022 ~~AND 2021~~

(UNAUDITED)

	June 30, 2022			June 30, 2021			March 31, 2023			March 31, 2022
Cash Flows from Operating Activities:
Net Loss	$	(2,133,666	)	$	(427,820	)	$	(2,117,042	)	$	(789,690	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Stock option expense		77,822			37,817			109,974			49,760
Amortization of debt discount		306,230			79,835			310,512			162,328
Write off debt issuance costs recorded as debt discount		15,751			56,691
Write off acquisition and development pursuit costs		60,759			-			19,806			59,486
Gain on debt extinguishment		-			(139,300	)
Loss on sale of homes		52,140			-
Loss on sales of homes								18,505			17,465
Depreciation		1,578,679			903,665			1,023,015			759,704
Changes in operating assets and liabilities:
Accounts receivable		(111,329	)		(10,588	)		142,187			15,182
Other assets		316,864			691,910			257,376			269,602
Accounts payable		202,116			42,181			25,386			33,547
Tenant security deposits		105,085			65,641			13,050			48,884
Accrued liabilities		(444,026	)		37,232			(303,477	)		(728,086	)
Net Cash Provided by Operating Activities		26,425			1,337,264
Net Cash Used in Operating Activities								(500,708	)		(101,818	)
Cash Flows from Investing Activities:
Capital improvements		(1,507,382	)		(697,769	)		(446,055	)		(764,907	)
Proceeds from sales of homes		102,594			65,244			112,300			15,000
Proceeds from sale of community								242,356			-
Purchases of investment properties		(3,697,135	)		(750,000	)		(2,570,000	)		(1,050,000	)
Payment of pursuit costs		(113,964	)		-			(231,141	)		(66,071	)
Payment of acquisition costs		(296,170	)		-			(107,832	)		(163,578	)
Net Cash Used in Investing Activities		(5,512,057	)		(1,382,525	)		(3,000,372	)		(2,029,556	)
Cash Flows from Financing Activities:
Proceeds from lines of credit, related party		4,700,000
Repayment of note payable – lines of credit, related party		(850,000	)		-
Proceeds from notes payable		1,875,000			-
Proceeds from line of credit – related party								-			700,000
Repayment of lines of credit - VIEs								(110,644	)		(47,952	)
Repayment of notes payable		(1,916,434	)		(292,698	)		(15,955	)		(1,699,464	)
Proceeds from lines of credit - VIEs		596,563			-			1,329,417			-
Repayment of lines of credit - VIEs		(682,646	)		-
Proceeds from exercise of options		83			-
Proceeds from issuance of preferred stock		6,297,617			1,087,485			3,874,917			4,289,444
Payment of debt costs and Series C Preferred Stock costs recorded as debt discount		(1,263,667	)		(128,052	)		(636,614	)		(847,499	)
Redemption of Preferred Stock								(65,000	)		-
Fees paid in advance for debt		(1,761,363	)		-			(78,675	)		-
Series A and Series B Preferred share dividends		(485,570	)		(462,898	)		(238,998	)		(242,785	)
Contribution to VIE		-			12,371
Distributions from VIE		(60,000	)		(50,000	)		(30,000	)		(30,000	)
Net Cash Provided by Financing Activities		6,449,583			166,208			4,028,448			2,121,744
Net change in cash, cash equivalents and restricted cash		963,951			120,947			527,368			(9,630	)
Cash, cash equivalents and restricted cash at beginning of the period		2,106,329			1,988,857			10,405,615			2,106,329
Cash, cash equivalents and restricted cash at end of the period	$	3,070,280		$	2,109,804		$	10,932,983		$	2,096,699
Cash, cash equivalents and restricted cash consist of the following:
End of period
Cash and cash equivalents	$	2,260,000		$	1,705,011		$	5,710,926		$	1,342,620
Restricted cash		810,280			404,793			5,222,057			754,079
Total	$	3,070,280		$	2,109,804		$	10,932,983		$	2,096,699
Cash, cash equivalents and restricted cash consist of the following:
Beginning of period
Cash and cash equivalents	$	1,401,134		$	1,649,705		$	5,090,369		$	1,401,134
Restricted cash		705,195			339,152			5,315,246			705,195
Total	$	2,106,329		$	1,988,857		$	10,405,615		$	2,106,329
Cash paid for:
Income Taxes	$	-		$	-			-			-
Interest	$	1,448,072		$	804,511		$	1,195,172		$	784,735
Series C Preferred share dividends included in interest expense	$	275,137		$	-		$	373,773		$	96,126

Non-Cash Investing and Financing Activities
Notes related to acquisitions	$	5,875,735		$	2,195,846
Non-cash Preferred stock accretion	$	604,254		$	606,776
Stock issued in connection with Series B Preferred Stock issuance	$	-		$	1,377
Notes and lines of credit related to acquisitions and capital improvements							$	5,399,120		$	4,624,414
Non-cash Series A and B Preferred Stock accretion							$	295,729		$	302,125

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

F-4

MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~JUNE 30,~~MARCH 31, 2023 AND 2022 ~~AND 2021~~

(UNAUDITED)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

Organization

Manufactured Housing Properties Inc. (the “Company”) is a Nevada corporation whose principal activities are to acquire, own, and operate manufactured housing communities.

Basis of Presentation

The Company prepares its ~~consolidated~~unaudited condensed financial statements under the accrual basis of accounting, in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q of Regulation S-X. They do not include all information and footnotes required by GAAP for complete financial statements. The December 31, ~~2021~~2022 consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the consolidated financial statements for the year ended December 31, ~~2021~~2022 included in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on March ~~31, 2022.~~29, 2023. The interim unaudited condensed consolidated financial statements should be read in conjunction with those consolidated financial statements included in the Form 10-K. In the opinion of management, all adjustments considered necessary for a fair statement of the financial statements, consisting solely of normal recurring adjustments, have been made. Operating results for the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2022.~~2023.

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of the Company, entities controlled by the Company through its direct or indirect ownership of a majority interest, and any other entities in which the Company has a controlling financial interest. The Company consolidates variable interest entities (“VIEs”) where the Company is the primary beneficiary. The primary beneficiary of a VIE is the party that has both the power to direct the activities that most significantly impact the VIE’s economic performance, and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

F-5

MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~JUNE 30,~~MARCH 31, 2023 AND 2022 ~~AND 2021~~

(UNAUDITED)

The Company’s formation of all subsidiaries and VIEs’ date of consolidation are as follows:

Name of Subsidiary	State of Formation	Date of Formation	Ownership
Pecan Grove MHP LLC	North Carolina	October 12, 2016		100%
Azalea MHP LLC	North Carolina	October 25, 2017		100%
Holly Faye MHP LLC	North Carolina	October 25, 2017		100%
Chatham Pines MHP LLC	North Carolina	October 31, 2017		100%
Maple Hills MHP LLC	North Carolina	October 31, 2017		100%
Lakeview MHP LLC	South Carolina	November 1, 2017		100%
MHP Pursuits LLC	North Carolina	January 31, 2019		100%
Mobile Home Rentals LLC	North Carolina	September 30, 2016		100%
Hunt Club MHP LLC	South Carolina	March 8, 2019		100%
B&D MHP LLC	South Carolina	April 4, 2019		100%
Crestview MHP LLC	North Carolina	June 28, 2019		100%
Springlake MHP LLC	Georgia	October 10, 2019		100%
ARC MHP LLC	South Carolina	November 13, 2019		100%
Countryside MHP LLC	South Carolina	March 12, 2020		100%
Evergreen MHP LLC	Tennessee	March 17, 2020		100%
Golden Isles MHP LLC	Georgia	March 16, 2021		100%
Anderson MHP LLC	South Carolina	June 2, 2021		100%
Capital View MHP LLC	South Carolina	August 6, 2021		100%
Hidden Oaks MHP LLC	South Carolina	August 6, 2021		100%
North Raleigh MHP LLC	North Carolina	September 16, 2021		100%
Carolinas 4 MHP LLC	North Carolina	November 30, 2021		100%
Charlotte 3 Park MHP LLC	North Carolina	December 10, 2021		100%
Sunnyland MHP LLC	Georgia	January 7, 2022		100%
Warrenville MHP LLC	South Carolina	February 15, 2022		100%
Solid Rock MHP LLC*LLC	South Carolina	June 6, 2022		100%
Spaulding MHP LLC	Georgia	June 10, 2022		100%
Raeford MHP Development LLC	North Carolina	June 20, 2022		100%
Solid Rock MHP Homes LLC*LLC	South Carolina	June 22, 2022		100%
Country Estates MHP LLC*LLC⁽¹⁾	North Carolina	July 6, 2022		100%
Statesville MHP LLC*LLC	North Carolina	July 6, 2022		100%
Timberview MHP LLC*LLC	North Carolina	July 7, 2022		100%
Red Fox MHP LLC*LLC	North Carolina	July 7, 2022		100%
Northview MHP LLC*LLC	North Carolina	July 8, 2022		100%
Meadowbrook MHP LLC*LLC	South Carolina	July 25, 2022		100%
Sunnyland 2 MHP LLC*LLC	Georgia	July 27, 2022		100%
Dalton 3 MHP LLC*LLC⁽¹⁾	Georgia	August 8, 2022		100%
MHP Home Holdings LLC	North Carolina	August 17, 2022	100%
Glynn Acres MHP LLC	Georgia	September 9, 2022	100%
Wake Forest 2 MHP LLC	North Carolina	October 27, 2022	100%
Country Aire MHP LLC	South Carolina	December 1, 2022	100%
Mobile Cottage MHP LLC	North Carolina	December 7, 2022	100%
Merritt Place MHP LLC	Georgia	December 6, 2022	100%
MHR Home Development LLC	Delaware	January 19, 2023	100%
Palm Shadows LLC	Texas	April 12, 2023	100%
Gvest Finance LLC	North Carolina	December 11, 2018		VIE
Gvest Homes I LLC	Delaware	November 9, 2020		VIE
Brainerd Place LLC	Delaware	February 24, 2021		VIE
Bull Creek LLC	Delaware	April 13, 2021		VIE
Gvest Anderson Homes LLC	Delaware	June 22, 2021		VIE
Gvest Capital View Homes LLC	Delaware	August 6, 2021		VIE
Gvest Hidden Oaks Homes LLC	Delaware	August 6, 2021		VIE
Gvest Springlake Homes LLC	Delaware	September 24, 2021		VIE
Gvest Carolinas 4 Homes LLC	Delaware	November 13, 2021		VIE
Gvest Sunnyland Homes LLC	Delaware	January 6, 2022		VIE
Gvest Warrenville Homes LLC	Delaware	February 14, 2022		VIE
Gvest Wake Forest 2 Homes LLC	North Carolina	October 27, 2022	VIE

*(1)

During the three ~~and six~~ months ended ~~June 30, 2022,~~March 31, 2023, there was no activity in ~~Solid Rock MHP LLC, Solid Rock MHP Homes LLC, Red Fox MHP LLC, Meadowbrook MHP LLC, Sunnyland 2 MHP LLC,~~ Country Estates ~~MHP LLC, Northview MHP LLC, Statesville MHP LLC, Timberview~~ MHP LLC and Dalton 3 MHP ~~LLC.~~

LLC

All intercompany transactions and balances have been eliminated in consolidation. The Company does not have a majority or minority interest in any other company, either consolidated or unconsolidated.

F-6

MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~JUNE 30,~~MARCH 31, 2023 AND 2022 ~~AND 2021~~

(UNAUDITED)

Revenue Recognition

~~Mobile home rental~~Rental and related income is generated from lease agreements for our manufactured housing sites and homes. The lease component of these agreements is accounted for under Topic 842 of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, for leases.

Under ASC 842, the Company must assess on an individual lease basis whether it is probable that we will collect the future lease payments. The Company considers the tenant’s payment history and current credit status when assessing collectability. When collectability is not deemed probable, the Company will write-off the tenant’s receivables, including straight-line rent receivable, and limit lease income to cash received.

The Company’s revenues primarily consist of rental revenues and other rental related fee income. The Company has the following revenue sources and revenue recognition policies:

●

Rental revenues include revenues from the leasing of land lot or a combination of both, the mobile home and land at our properties to tenants.

●

Revenues from the leasing of land lot or a combination of both, the mobile home and land at the Company’s properties to tenants include (i) lease components, including land lot or a combination of both, the mobile home and land, and (ii) reimbursement of utilities and account for the components as a single lease component in accordance with ASC 842.

●

Revenues derived from fixed lease payments are recognized on a straight-line basis over the non-cancelable period of the lease. The Company commences rental revenue recognition when the underlying asset is available for use by the lessee. Revenue derived from the reimbursement of utilities are generally recognized in the same period as the related expenses are incurred. The majority of the Company’s leases are month-to-month.

Revenue from sales of manufactured homes is recognized in accordance with the core principle of ASC 606, at the time of closing when control of the home transfers to the customer. After closing of the sale transaction, the Company generally has no remaining performance obligation.

Accounts Receivable

Accounts receivable consist primarily of amounts currently due from residents. Accounts receivable are reported in the balance sheet at outstanding principal adjusted for any charge-offs and allowance for losses. The Company records an allowance for bad debt when receivables are over 90 days old.

~~Acquisitions~~

The Company accounts for acquisitions as asset acquisitions in accordance with ASC 805, “Business Combinations,” and allocates the purchase price of the property based upon the fair value of the assets acquired, which generally consist of land, site and land improvements, buildings and improvements and rental homes. The Company allocates the purchase price of an acquired property generally determined by internal evaluation as well as third-party appraisal of the property obtained in conjunction with the purchase.F-7

MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~JUNE 30,~~MARCH 31, 2023 AND 2022 ~~AND 2021~~

(UNAUDITED)

Variable Interest Entities

In December 2020, the Company entered into a property management agreement with Gvest Finance LLC, a company owned and controlled by the Company’s parent company, Gvest Real Estate Capital LLC, an entity whose sole owner is Raymond M. Gee, the Company’s chairman and chief executive officer, and has subsequently entered into property management agreements with Gvest Homes I LLC, Gvest Anderson Homes LLC, Gvest Capital View Homes LLC, Gvest Hidden Oaks Homes LLC, Gvest Springlake Homes LLC, Gvest Carolinas 4 Homes LLC, Gvest Sunnyland Homes LLC and Gvest Warrenville Homes LLC, which are all wholly owned subsidiaries of Gvest Finance LLC. Under the property management agreements, the Company manages the homes owned by the VIEs and the VIEs remit to the Company all income, less any sums paid out for operational expenses and debt service but retain 5% of the debt service payment as a reserve.

Additionally, during 2021, the Company formed two entities, Brainerd Place LLC and Bull Creek LLC, for the purpose of exploring opportunities to develop mobile home communities. The Company owns 49% of these entities and Gvest Real Estate LLC, an entity whose sole owner is Raymond M. Gee, owns 51%. The Company also executed operating agreements with these entities which designate Gvest Capital Management LLC, a company owned and controlled by Gvest Real Estate Capital LLC, as manager with the authority, power, and discretion to manage and control the entities’ business decisions. The operating agreements require the Company to make cash contributions to the entities to fund their activities, operations, and existence, if the Company approves the contribution requests from the manager, which ultimately provides the Company with power to direct the economically significant activities of these entities.

APursuant to U.S. generally accepted accounting principles, or GAAP, a company with interests in a VIE must consolidate the entity if the company is deemed to be the primary beneficiary of the VIE; that is, if it has both (1) the power to direct the economically significant activities of the entity and (2) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE. Such a determination requires management to evaluate circumstances and relationships that may be difficult to understand and to make a significant judgment, and to repeat the evaluation at each subsequent reporting date. Primarily due to the Company’s common ownership by Mr. Gee, its power to direct the activities of these entities that most significantly impact their economic performance, and the fact that the Company has the obligation to absorb losses or the right to receive benefits from these entities that could potentially be significant to these entities, the entities listed above are considered to be VIEs in accordance with applicable GAAP.

Net Income (Loss) Per Share

Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding, including vested penny stock options during the period. Diluted net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding plus the weighted average number of net shares that would be issued upon exercise of stock options pursuant to the treasury stock method.

For the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, the potentially dilutive penny options for the purchase of ~~428,176~~390,509 shares of Common Stock were included in basic loss per share. Other securities outstanding as of ~~June 30,~~March 31, 2023 not included in dilutive loss per share, as the effect would be anti-dilutive, were 198,333 unvested stock options and 1,826,000 shares of Series A Cumulative Redeemable Convertible Preferred Stock, which are convertible into Common Stock for a total of 1,826,000 shares.

For the three months ended March 31, 2022, the potentially dilutive penny options for the purchase of 704,508 shares of Common Stock were included in basic loss per share. Other securities outstanding as of March 31, 2022 not included in dilutive loss per share, as the effect would be anti-dilutive, were 15,000 unvested stock options and 1,886,000 shares of Series A Cumulative Redeemable Convertible Preferred Stock, which are convertible into Common Stock for a total of 1,886,000 shares.

F-8

MANUFACTURED HOUSING PROPERTIES INC.

For the six months ended June 30, 2021, the potentially dilutive penny options for the purchase of 519,675 shares of Common Stock were included in basic loss per share. Other securities outstanding as of June 30, 2021 not included in dilutive loss per share, as the effect would be anti-dilutive, were 186,500 stock options and 1,890,000 shares of Series A Cumulative Redeemable Convertible Preferred Stock, which were convertible into Common Stock for a total of 1,890,000 shares.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2023 AND 2022

(UNAUDITED)

Use of Estimates

The presentation of financial statements in conformity with GAAP requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates.

Leases

Rental revenue is generated from lease agreements with tenants for lease of the Company’s sites and manufactured homes where the Company is the lessor. The terms of these leases are generally annual or month-to-month and are renewable upon the consent of both parties and contain no option to purchase the underlying asset. Therefore, these leases are accounted for as operating leases in accordance with ASC 842.

The Company is the lessee in a lease agreement for its corporate office space with a related party entity owned and controlled by Raymond M. Gee, the Company’s CEO and chairman. The lease term for the office is month-to-month, the lease is terminable by either party if written, thirty-day notice is given, and the lease contains no option to purchase the facility. This lease is accounted for as an operating lease. Pursuant to ASC 842-20-25-2, the Company, as the lessee, has elected the short-term lease measurement exception whereby lease expense is recognized on a straight-line basis over the term of the lease with no right-of-use asset or lease liability recognized on the consolidated balance sheet.

Acquisitions

The Company accounts for acquisitions as asset acquisitions in accordance with ASC 805, “Business Combinations,” and allocates the purchase price of the property based upon the fair value of the assets acquired, which generally consist of land, site and land improvements, buildings and improvements and rental homes. The Company allocates the purchase price of an acquired property generally determined by a third-party purchase price allocation report obtained in conjunction with the purchase based on appraisals.

Debt Issuance Costs

Costs incurred in connection with obtaining financing are deferred and amortized on a straight-line basis over the term of the related obligation with the amortization included as a component of interest expense in the statement of operations. The unamortized balance of the debt issuance costs is presented in the consolidated balance sheet as direct reduction from the carrying amount of the debt. Upon prepayment, refinance, or substantial modification of a debt obligation, the related unamortized costs are written off to expense.

Investment Property and Depreciation

Investment real property and equipment are carried at cost. Depreciation of buildings, improvements to sites and buildings, rental homes, equipment, and vehicles is computed principally on the straight-line method over the estimated useful lives of the assets (ranging from 3 to 25 years). Land development costs are not depreciated until they are put in use, at which time they are capitalized as land improvements. Interest Expense pertaining to Land Development Costs are capitalized. Maintenance and Repairs are charged to expense as incurred and improvements are capitalized. The costs and related accumulated depreciation of property sold or otherwise disposed of are removed from the financial statement and any gain or loss is reflected in the current period’s results of operations.

~~MANUFACTURED HOUSING PROPERTIES INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~JUNE 30, 2022 AND 2021~~

~~(UNAUDITED)~~

Impairment Policy

The Company applies FASB ASC 360-10, “Property, Plant & Equipment,” to measure impairment in real estate investments. Rental properties are individually evaluated for impairment when conditions exist which may indicate that it is probable that the sum of expected future cash flows (on an undiscounted basis without interest) from a rental property is less than the carrying value under its historical net cost basis. These expected future cash flows consider factors such as future operating income, trends and prospects as well as the effects of leasing demand, competition and other factors. Upon determination that a permanent impairment has occurred, rental properties are reduced to their fair value. For properties to be disposed of, an impairment loss is recognized when the fair value of the property, less the estimated cost to sell, is less than the carrying amount of the property measured at the time there is a commitment to sell the property and/or it is actively being marketed for sale. A property to be disposed of is reported at the lower of its carrying amount or its estimated fair value, less its cost to sell. Subsequent to the date that a property is held for disposition, depreciation expense is not recorded. There was no impairment during the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 and ~~2021.~~2022.

F-9

MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2023 AND 2022

(UNAUDITED)

Cash, ~~and~~ Cash Equivalents, and Restricted Cash

The Company considers all highly liquid financial instruments purchased with an original maturity of three months or less to be cash equivalents.

As of March 31, 2023, restricted cash consisted of $5,222,057 related to cash reserved for tenant security deposits of $892,726 and lender escrows for capital improvements, insurance, and real estate taxes of $4,329,331. As of December 31, 2022, the restricted cash balance of $5,315,246 was comprised of $879,676 of cash reserved for tenant security deposits and lender escrows for capital improvements, insurance, and real estate taxes in the amount of $4,435,570.

The Company maintains cash balances at banks and deposits at times may exceed federally insured limits. Management believes that the financial institutions that hold the Company’s cash are financially secure and, accordingly, minimal credit risk exists. At ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the Company had approximately ~~$1,830,000~~$4,318,000 and ~~$763,000~~$4,006,000 above the FDIC-insured limit, ~~respectively, including restricted~~respectively.

Liquidity

The unaudited condensed financial statements have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern. The Company has incurred net losses each quarter since inception and has experienced slightly negative cash flows from operations during the three months ended March 31, 2023. The Company is in an acquisitive, growth stage whereby it has more than doubled the number of home sites in its portfolio of manufactured housing communities over the past two years. The Company acquires communities and invests in physical improvements, implements operational efficiencies to cut costs, works to improve occupancy and collections, and increases rents based on each respective market all to stabilize the acquired communities to their full potential. The Company has incurred additional corporate payroll and overhead and interest expense in order to accomplish such growth which has driven losses and used operating cash flow.

The Company’s principal demands for cash are operating and administrative expenses, dividends on preferred stock, debt service payments, capital expenditures to improve properties, and community acquisitions. The Company expects to fund its operating cash requirements over the next year through a combination of cash on hand, net cash provided by its property operations, and if necessary, borrowings from related party lines of credit available for working capital or other cash flow needs.

The Company’s continued growth depends on the availability of suitable properties which meet the Company’s investment criteria and appropriate financing, which includes its ability to raise capital. There is no guarantee that any of these additional opportunities will materialize or that the Company will be able to take advantage of such opportunities. There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all. Proceeds from issuance of Series C Preferred Stock and cash held ~~for tenant security deposits of $810,280~~in escrow with lenders will fund the Company’s capital improvement projects and ~~$705,195, respectively.~~acquisitions. To the extent that funds or appropriate communities are not available, fewer acquisitions and capital improvements will be made.

Stock Based Compensation

All ~~stock based~~stock-based payments to employees, nonemployee consultants, and to nonemployee directors for their services as directors, including any grants of restricted stock and stock options, are measured at fair value on the grant date and recognized in the statements of operations as compensation or other expense over the relevant service period in accordance with FASB ASC Topic 718. Stock based payments to ~~nonemployees~~non-employees are recognized as an expense over the period of performance. Such payments are measured at fair value at the earlier of the date a performance commitment is reached, or the date performance is completed. In addition, for awards that vest immediately and are nonforfeitable, the measurement date is the date the award is issued. The Company recorded stock option expense of ~~$77,822~~$109,975 and ~~$37,817~~$49,760 during the ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively.

Fair Value of Financial Instruments

The Company follows paragraph 825-10-50-10 of the FASB ASC for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB ASC to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. Most of the Company’s financial assets do not have a quoted market value. Therefore, estimates of fair value are necessarily based on a number of significant assumptions (many of which involve events outside the control of management). Such assumptions include assessments of current economic conditions, perceived risks associated with these financial instruments and their counterparties, future expected loss experience and other factors. Given the uncertainties surrounding these assumptions, the reported fair values represent estimates only and, therefore, cannot be compared to the historical accounting model. Use of different assumptions or methodologies is likely to result in significantly different fair value estimates.

The fair value of cash and cash equivalents, accounts receivables, and accounts payable approximates their current carrying amounts since all such items are short-term in nature. The fair value of variable and fixed rate mortgages payable and lines of credit approximate their current carrying amounts on the balance sheet since such amounts payable are at approximately a weighted average current market rate of interest.

F-10

MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~JUNE 30,~~MARCH 31, 2023 AND 2022 ~~AND 2021~~

(UNAUDITED)

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company recognizes deferred tax assets to the extent that the Company believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

The Company recognizes interest and penalties, if any, with income tax expense in the accompanying unaudited condensed consolidated statement of operations. As of ~~June 30, 2022,~~March 31, 2023, and December 31, ~~2021,~~2022, there were no such accrued interest or penalties.

~~Reclassifications~~

Certain amounts in the prior period presentation have been reclassified to conform with the current presentation. For the six months ended June 30, 2021, the Company reclassed $65,244 from cash used for capital improvements to proceeds from sale of homes within the net cash used in investing activities section of the unaudited condensed consolidated statement of cash flows.

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires that entities use a new forward looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 is effective for annual reporting periods, including interim reporting periods within those periods, beginning after December 15, 2022. The Company ~~is currently evaluating~~adopted the ~~potential~~new guidance on January 1, 2023 and determined it did not have a material impact ~~this standard may have~~ on ~~the~~its consolidated financial statements.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying unaudited condensed consolidated financial statements.

Impact of Coronavirus Pandemic

In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China. On March 11, 2020, the World Health Organization declared the outbreak a pandemic, and on March 13, 2020, the United States declared a national emergency.

Some states and cities, including some where the Company’s properties are located, reacted by instituting quarantines, restrictions on travel, “stay at home” rules and restrictions on the types of businesses that may continue to operate, as well as guidance in response to the pandemic and the need to contain it.

The rules and restrictions put in place had a negative impact on the economy and business activity and may adversely impact the ability of the Company’s tenants, many of whom may be restricted in their ability to work, to pay their rent as and when due. Enforcing the Company’s rights as landlord against tenants who fail to pay rent or otherwise do not comply with the terms of their leases may not be possible as many jurisdictions, including those where are properties are located, have established rules and/or regulations preventing us from evicting tenants for certain periods in response to the pandemic. If the Company is unable to enforce its rights as landlords, our business would be materially affected.

~~MANUFACTURED HOUSING PROPERTIES INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~JUNE 30, 2022 AND 2021~~

~~(UNAUDITED)~~

The extent to which the pandemic may impact the Company’s results will depend on future developments, which are highly uncertain and cannot be predicted as of the date of this report, including new information that may emerge concerning the severity of the pandemic and steps taken to contain the pandemic or treat its impact, among others. Nevertheless, the pandemic and the current financial, economic, and capital markets environment present material uncertainty and risk with respect to the Company’s performance, financial condition, results of operations and cash flows.

F-11

MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2023 AND 2022

(UNAUDITED)

NOTE 2 – VARIABLE INTEREST ENTITIES

During the six months ended June 30, 2022, Gvest Finance LLC formed two wholly owned subsidiaries, Gvest Sunnyland Homes LLC and Gvest Warrenville Homes LLC, both of which are considered VIEs. The Company consolidates the accounts of Gvest Finance LLC, Gvest Homes I LLC, Gvest Anderson Homes LLC, Gvest Capital View Homes LLC, Gvest Hidden Oaks Homes LLC, Gvest Springlake Homes LLC, Gvest Carolinas 4 Homes LLC, Gvest Sunnyland Homes LLC, Gvest Warrenville Homes LLC, Brainerd Place LLC, and Bull Creek LLC and will continue to do so until they are no longer considered VIEs.

Included in the unaudited condensed consolidated results of operations for the three months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~ were net loss of ~~$250,915~~$182,466 and ~~net income of $118,348,~~$159,570, respectively, after deducting an additional management fee equal to cash flow after debt service per the management agreement of ~~$222,566~~$30,522 and ~~$0, respectively.~~

Included in the unaudited condensed consolidated results of operations for the six months ended June 30, 2022 and 2021 were net loss of $410,485 and net income of $173,433, respectively, after deducting an additional management fee equal to cash flow after debt service per the management agreement of $305,579 and $0,$88,013, respectively.

The consolidated balance sheets as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 included the following amounts related to the consolidated VIEs.

	June 30, 2022			December 31, 2021			March 31, 2023			December 31, 2022
	(Unaudited)						(Unaudited)
Assets
Investment Property	$	18,613,820		$	14,144,268		$	15,239,329		$	14,688,424
Accumulated Depreciation		(881,741	)		(597,650	)		(1,141,707	)		(997,240	)
Net Investment Property		17,732,079			13,546,618			14,097,622			13,691,184
Cash and Cash Equivalents		53,184			98,900			40,381			40,080
Accounts Receivable		95,882			60,506			25,319			60,538
Other Assets		244,108			158,920			200,571			194,871
Total Assets	$	18,125,253		$	13,864,944		$	14,363,893		$	13,986,673

Liabilities and Deficit
Accounts Payable	$	250,317		$	169,298		$	132,818		$	206,882
Notes Payable, net of 27,558 and $0 debt discount, respectively		8,557,022			6,793,319
Line of Credit, net of $173,508 and $151,749 debt discount, respectively		7,787,643			6,200,607
Accrued Liabilities*		2,978,269			1,679,233
Notes Payable, net of $44,531 and $45,790 debt discount, respectively								3,026,842			3,035,455
Line of Credit, net of $205,877 and $160,372 debt discount, respectively								7,624,918			6,208,947
Accrued Liabilities⁽¹⁾								5,561,958			6,306,178
Total Liabilities		19,573,251			14,842,457			16,346,536			15,757,462

Non-controlling Interest		(1,447,998	)		(977,513	)		(1,982,643	)		(1,770,789	)
Total Non-controlling Interest in Variable Interest Entities		(1,447,998	)		(977,513	)		(1,982,643	)		(1,770,789	)

*⁽¹⁾

Included in accrued liabilities is an intercompany balance of ~~$2,859,303~~$5,490,202 and ~~$1,515,715~~$6,232,561 as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. The intercompany balances have been eliminated on the consolidated balance sheet.

F-12

MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~JUNE 30,~~MARCH 31, 2023 AND 2022 ~~AND 2021~~

(UNAUDITED)

NOTE 3 – INVESTMENT PROPERTY

The following table summarizes the Company’s property and equipment ~~balances~~balances. These assets are generally ~~used to depreciate the assets~~depreciated on a straight-line ~~basis:~~basis.

	June 30, 2022			December 31, 2021			March 31, 2023			December 31, 2022
	(Unaudited)						(Unaudited)
Investment Property
Land	$	22,508,158		$	18,854,760		$	36,399,696		$	30,263,687
Site and Land Improvements		37,703,886			35,133,079			45,346,146			44,035,649
Buildings and Improvements		19,730,527			14,666,296			25,321,424			23,229,657
Construction in Process		2,943,578			3,030,456			1,692,050			2,541,376
Total Investment Property		82,886,149			71,684,591			108,759,316			100,070,369
Accumulated Depreciation		(6,390,849	)		(4,832,300	)		(9,245,738	)		(8,225,976	)
Net Investment Property	$	76,495,300		$	66,852,291		$	99,513,578		$	91,844,393

Depreciation expense totaled ~~$818,975~~$1,023,015 and ~~$462,042~~$759,704 for the three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and $1,578,679 and $903,665 for the six months ended June 30, 2022 and 2021,~~ respectively.

During the ~~six~~three months ended ~~June 30,~~March 31, 2023, Gvest Finance LLC, the Company’s VIE, purchased four new manufactured homes for approximately $219,120 for use in the Meadowbrook community. These four homes are included in Construction in Process on the balance sheet. These recently purchased homes along with several new homes purchased during 2022 are not yet occupiable and still in the set-up phase as of March 31, 2023 and are included in Construction in Process on the balance sheet as of that date.

During the year ended December 31, 2022, Gvest Finance LLC, the Company’s VIE, purchased ~~twenty-five~~25 new manufactured homes for approximately $1,300,000 for use in the Golden Isles, Springlake, Sunnyland, and Crestview communities. The majority of these recently purchased homes along with several new homes purchased during ~~the first quarter of 2022~~2021 are not yet occupiable and still in the set-up phase as of ~~June 30,~~December 31, 2022 and ~~included in Construction in Process on the balance sheet as June 30, 2022.~~

During the year ended December 31, 2021, Gvest Finance LLC, acquired thirty-four new manufactured homes for approximately $1,900,000 including set up costs for use in the Springlake community and fourteen new manufactured homes for approximately $860,000 including set up costs for use in the Golden Isles community that were not yet occupiable and were still in the set-up phase as of December 31, 2021 and wereare included in Construction in Process on the balance sheet as of that date.

F-13

MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~JUNE 30,~~MARCH 31, 2023 AND 2022 ~~AND 2021~~

(UNAUDITED)

NOTE 4 – ACQUISITIONS AND DISPOSITIONS

During the ~~six~~three months ended ~~June 30,~~March 31, 2023, the Company acquired two communities. These were acquisitions from third parties and have been accounted for as asset acquisitions.

On January 12, 2023, the Company purchased a manufactured housing community located in Simpsonville, South Carolina, consisting of 107 sites all occupied by tenant-owned manufactured homes on approximately 21 acres for a total purchase price of $5,350,000. Country Aire MHP LLC purchased the land, land improvements, and homes.

On January 27, 2023, the Company purchased a manufactured housing community located in Brunswick, Georgia consisting of 40 developed sites, 14 undeveloped sites, and 24 homes on approximately 18 acres for a total purchase price of $2,400,000. Merritt Place MHP LLC - Land purchased the land and land improvements, and Merritt Place MHP LLC – Homes purchased the homes.

During the three months ended March 31, 2022, the Company acquired ~~four communities and one large parcel of undeveloped land.~~two manufactured housing communities. These were acquisitions from third parties and have been accounted for as asset acquisitions.

On January 31, 2022, the Company purchased a manufactured housing community located in Byron, Georgia consisting of 73 sites on approximately 18.57 acres and an adjacent parcel of 15.09 acres of undeveloped land for a total purchase price of $2,200,000. Sunnyland MHP LLC purchased the land and land improvements and the Company’s VIE, Gvest Sunnyland Homes LLC, purchased the homes.

On March 31, 2022, the Company purchased two manufactured housing communities located in Warrenville, South Carolina consisting of 85 sites on approximately 45 acres for a total purchase price of $3,050,000. Warrenville MHP LLC purchased the land and land improvements and the Company’s VIE, Gvest Warrenville Homes LLC, purchased the homes.

On June 17, 2022, the Company purchased a manufactured housing community located in Brunswick, Georgia consisting of 72 sites on approximately 17 acres for a total purchase price of $2,000,000. Spaulding MHP LLC purchased the land, land improvements, and homes.

On June 28, 2022, the Company, through its wholly owned subsidiary Raeford MHP Development LLC, purchased 62 acres of undeveloped land zoned for approximately 200 mobile home lots in Raeford, North Carolina, a town in the Fayetteville Metropolitan Statistical Area for a total purchase price of $650,000.

The Company entered into various purchase agreements during and after the year ended June 30, 2022 totaling an aggregate purchase price commitment of $21,738,000 which are inclusive of probable and non-probable acquisitions that have the potential to close at a future date. See Note 9 for more information about two community acquisitions that occurred subsequent to June 30, 2022.

During the six months ended June 30, 2021, the Company acquired one community located in Brunswick, Georgia consisting of 107 sites on approximately 17 acres for a total purchase price of $2,325,000. Golden Isles MHP LLC purchased the land and land improvements and the Company’s VIE, Gvest Finance LLC, purchased the homes. This was an acquisition from a third party and has been accounted for as an asset acquisition.

Acquisition Date Name (number of communities) Land Improvements Building Total
Purchase
Price
March 2021 Golden Isles MHP $ 1,050,000 $ 487,500 $ - $ 1,537,500
March 2021 Golden Isles Gvest - - 787,500 787,500
Total Purchase Price $ 1,050,000 $ 487,500 $ 787,500 $ 2,325,000
Acquisition Costs - 123,319 250 123,569
Total Investment Property $ 1,050,000 $ 610,819 $ 787,750 $ 2,448,569

January 2022 Sunnyland MHP $ 672,400 $ 891,580 $ - $ 1,563,980
January 2022 Sunnyland Gvest - - 636,020 636,020
March 2022 Warrenville MHP (2) 975,397 853,473 - 1,828,870
March 2022 Warrenville Gvest (2) - - 1,221,130 1,221,130
June 2022 Spaulding MHP 1,217,635 304,409 477,956 2,000,000
June 2022 Raeford MHP Parcel 650,000 - - 650,000
Total Purchase Price $ 3,515,432 $ 2,049,462 $ 2,335,106 $ 7,900,000
Acquisition Costs 139,502 78,757 60,356 278,615
Total Investment Property $ 3,654,934 $ 2,128,219 $ 2,395,462 $ 8,178,615

F-14

~~MANUFACTURED HOUSING PROPERTIES INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~JUNE 30, 2022 AND 2021~~

~~(UNAUDITED)~~

~~Pro-forma Financial Information~~

The following unaudited pro-forma information presents the combined results of operations for the three and six months ended June 30, 2022 as if all acquisitions of manufactured housing communities during the three and six months ended June 30, 2022, as well as several probable future acquisitions, had all occurred on January 1, 2022.

The below also presents the combined results of operations for the three and six months ended June 30, 2021 as if all acquisitions of manufactured housing communities during the year ended December 31, 2021 and during the three and six months ended June 30, 2022, as well as several probable future acquisitions, had all occurred on January 1, 2021.

Three Months Ended
June 30,

Six Months Ended
June 30,

2022
Pro Forma 2021
Pro Forma 2022
Pro Forma 2021
Pro Forma
Revenue $ 3,922,613 $ 3,633,142 $ 7,708,707 $ 7,270,337
Community operating expenses 1,535,595 1,348,137 2,912,618 2,806,577
Corporate payroll and overhead expenses 1,254,918 583,733 2,163,996 1,164,467
Depreciation expense 972,911 977,801 1,922,654 1,953,287
Interest expense 1,432,720 968,208 2,783,505 1,950,908
Refinance costs 15,751 - 15,751 16,675
Cost of home sales 122,269 - 154,734 -
Other income - 139,300 - 139,300
Net income (loss) (1,411,551 ) (105,437 ) (2,244,551 ) (482,277 )
Net income (loss) attributable to non-controlling interest (250,915 ) 58,954 (425,107 ) 46,762
Net loss attributable to Manufactured Housing Properties, Inc (1,160,636 ) (164,391 ) (1,819,444 ) (529,039 )
Preferred stock dividends / accretion 548,214 540,134 1,096,424 1,069,674
Net income (loss) $ (1,708,852 ) $ (704,525 ) $ (2,915,868 ) $ (1,598,713 )
Net loss per share $ (0.13 ) $ (0.05 ) $ (0.23 ) $ (0.12 )

MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~JUNE 30,~~MARCH 31, 2023 AND 2022 ~~AND 2021~~

(UNAUDITED)

The Company entered into various purchase agreements during and after the three months ended March 31, 2023 totaling an aggregate purchase price commitment of $23,200,000 which are inclusive of non-probable acquisitions that have the potential to close at a future date. See Note 9 for more information about acquisitions that occurred subsequent to March 31, 2023.

Three Months Ended March 31, 2022

Acquisition Date	Name (number of communities, if multiple)	Land		Improvements		Building		Total Purchase Price
January 2022	Sunnyland MHP	$	672,400	$	891,580	$	-	$	1,563,980
January 2022	Sunnyland Gvest		-		-		636,020		636,020
March 2022	Warrenville MHP		975,397		853,473		-		1,828,870
March 2022	Warrenville Gvest		-		-		1,221,130		1,221,130
	Total Purchase Price	$	1,647,797	$	1,745,053	$	1,857,150	$	5,250,000
	Acquisition Costs		51,760		62,097		38,367		152,224
	Total Investment Property	$	1,699,557	$	1,807,150	$	1,895,517	$	5,402,224

Three Months Ended March 31, 2023

Acquisition Date	Name (number of communities, if multiple)	Land		Improvements			Building		Total Purchase Price
January 2023	Country Aire MHP	$	4,661,722	$	682,724		$	5,554	$	5,350,000
January 2023	Merritt Place MHP		1,410,806		557,446	⁽¹⁾		431,748		2,400,000
	Total Purchase Price	$	6,072,528	$	1,240,170		$	437,302	$	7,750,000
	Acquisition Costs		63,481		34,188			9,713		107,382
	Total Investment Property	$	6,136,009	$	1,274,358		$	447,015	$	7,857,382

(1)

Includes an allocation of $300,000 for 14 lots under development to be completed by seller and a respective note payable for the same amount has been included in accrued liabilities financial statement line item on the balance sheet as of March 31, 2023.

NOTE 5 – PROMISSORY NOTES

Promissory Notes

The Company has issued promissory notes payable to lenders related to the acquisition of its manufactured housing communities and mobile homes. The interest rates on ~~these~~outstanding promissory notes range from ~~3.250%~~4% to ~~5.875%~~8% with 5 to 30 years principal amortization. Three of the promissory notes had an initial 12 month, one an initial 18 month, six an initial 24 month, six an initial 36 month, one an initial 60 month, and one promissory note a 180 month period of interest only payments. The promissory notes are secured by the real estate assets and ~~twenty-one~~thirty-three loans totaling ~~$45,308,733~~$80,752,977 are guaranteed by Raymond M. Gee.

F-15

MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2023 AND 2022

(UNAUDITED)

As of ~~June 30,~~March 31, 2023 and December 31, 2022, the outstanding principal balance on ~~these~~all third-party promissory notes was ~~$55,114,344.~~$84,714,126 and $79,550,080, respectively. The following are the terms of these notes:

	Maturity Date	Interest Rate			Balance June 30, 2022			Balance December 31, 2021			Maturity Date	Interest Rate			Interest Only Period (Months)		Balance March 31, 2023			Balance December 31, 2022
Pecan Grove MHP LLC(2)	02/22/29		5.250	%	$	2,933,462		$	2,969,250		9/1/2032		4.870	%		60	$	4,489,000		$	4,489,000
Azalea MHP LLC(2)	03/01/29		5.400	%		811,027			790,481		9/1/2032		4.870	%		60		1,830,000			1,830,000
Holly Faye MHP LLC(2)	03/01/29		5.400	%		546,753			579,825		9/1/2032		4.870	%		60		1,608,000			1,608,000
Chatham MHP LLC(2)	04/01/24		5.875	%		1,679,979			1,698,800		9/1/2032		4.870	%		60		2,263,000			2,263,000
Lakeview MHP LLC(2)	03/01/29		5.400	%		1,789,063			1,805,569		9/1/2032		4.870	%		60		3,229,000			3,229,000
B&D MHP LLC(2)	05/02/29		5.500	%		1,755,502			1,779,439		9/1/2032		4.870	%		60		2,887,000			2,887,000
Hunt Club MHP LLC(2)	01/01/33		3.430	%		2,374,578			2,398,689		9/1/2032		4.870	%		60		2,756,000			2,756,000
Crestview MHP LLC(2)	12/31/30		3.250	%		4,617,309			4,682,508		9/1/2032		4.870	%		60		4,625,000			4,625,000
Maple Hills MHP LLC(2)	12/01/30		3.250	%		2,308,655			2,341,254		9/1/2032		4.870	%		60		2,570,000			2,570,000
Springlake MHP LLC(2)	12/10/26		4.750	%		4,016,250			4,016,250		9/1/2032		4.870	%		60		6,590,000			6,590,000
ARC MHP LLC(2)	01/01/30		5.500	%		3,770,365			3,809,742		9/1/2032		4.870	%		60		3,687,000			3,687,000
Countryside MHP LLC(2)	03/20/50		5.500	%		1,669,702			1,684,100		9/1/2032		4.870	%		60		4,343,000			4,343,000
Evergreen MHP LLC(2)	04/01/32		3.990	%		1,104,642			1,115,261		9/1/2032		4.870	%		60		2,604,000			2,604,000
Golden Isles MHP LLC(2)	03/31/26		4.000	%		787,500			787,500		9/1/2032		4.870	%		60		1,987,000			1,987,000
Anderson MHP LLC*	07/10/26		5.210	%		2,153,807			2,153,807
Capital View MHP LLC*	09/10/26		5.390	%		817,064			817,064
Hidden Oaks MHP LLC*	09/10/26		5.330	%		823,440			823,440
Anderson MHP LLC⁽¹⁾⁽²⁾											9/1/2032		4.870	%		60		5,118,000			5,118,000
Capital View MHP LLC⁽¹⁾⁽²⁾											9/1/2032		4.870	%		60		829,000			829,000
Hidden Oaks MHP LLC⁽¹⁾⁽²⁾											9/1/2032		4.870	%		60		764,000			764,000
North Raleigh MHP LLC(2)	11/01/26		4.750	%		5,247,746			5,304,409		9/1/2032		4.870	%		60		5,279,000			5,279,000
Charlotte 3 Park MHP LLC (Dixie, Driftwood, Meadowbrook)⁽¹⁾	03/01/22		5.000	%		-			1,500,000
Charlotte 3 Park MHP LLC (Dixie, Driftwood, Meadowbrook)*	11/01/28		4.250	%		1,875,000			-
Carolinas 4 MHP LLC (Asheboro, Morganton)*	01/10/27		5.300	%		3,105,070			3,105,070
Sunnyland MHP LLC*	02/10/27		5.370	%		1,123,980			-
Warrenville MHP LLC*	03/10/27		5.590	%		1,218,870			-
Charlotte 3 Park MHP LLC (Dixie) ^(1)(2)(3)											9/1/2032		4.870	%		60		485,000			485,000
Charlotte 3 Park MHP LLC (Driftwood) ⁽¹⁾⁽²⁾											9/1/2032		4.870	%		60		274,000			274,000
Carolinas 4 MHP LLC (Asheboro) ⁽¹⁾⁽²⁾											9/1/2032		4.870	%		60		1,374,000			1,374,000
Carolinas 4 MHP LLC (Morganton) ⁽¹⁾⁽²⁾											9/1/2032		4.870	%		60		1,352,000			1,352,000
Sunnyland MHP LLC⁽¹⁾⁽²⁾											9/1/2032		4.870	%		60		1,057,000			1,057,000
Warrenville MHP LLC⁽¹⁾											3/10/2027		5.590	%		36		1,218,870			1,218,870
Spaulding MHP LLC											7/22/2043		WSJ Prime + 1	%		12		1,600,000			1,600,000
Solid Rock MHP LLC											6/30/2032		5.000	%		12		925,000			925,000
Red Fox MHP LLC											8/1/2032		5.250	%		24		2,250,000			2,250,000
Statesville MHP LLC – land⁽¹⁾											9/13/2025		SOFR + 2.35	%		36		1,519,925			1,519,925
Timberview MHP LLC – land⁽¹⁾											9/13/2025		SOFR + 2.35	%		36		1,418,075			1,418,075
Northview MHP LLC - land (Seller Finance)											9/15/2027		6.000	%		60		792,654			792,654
Statesville, Northview, Timberview MHP LLC - homes (Seller Finance)											9/15/2027		6.000	%		60		407,345			407,345
Glynn Acres MHP LLC											11/1/2042		6.000	%		0		892,150			898,052
Wake Forest MHP LLC (Cooley’s Country road)⁽¹⁾											12/10/2027		7.390	%		36		3,038,914			3,038,914
Mobile Cottage MHP LLC											12/20/2027		5.000	%		30		400,000			400,000
Gvest Finance LLC (B&D homes)	05/01/24		5.000	%		634,733			657,357		5/1/2024		5.000	%		-		604,757			614,809
Gvest Finance LLC (Countryside homes)	03/20/50		5.500	%		1,276,834			1,287,843
Gvest Finance LLC (Golden Isles homes)	03/31/36		4.000	%		787,500			787,500		3/31/2031		4.000	%		120		684,220			684,220
Gvest Anderson Homes LLC*	07/10/26		5.210	%		1,992,015			2,006,193
Gvest Capital View Homes LLC*	09/10/26		5.390	%		342,936			342,936
Gvest Hidden Oaks Homes LLC*	09/10/26		5.330	%		411,063			416,560
Gvest Carolinas 4 Homes LLC (Asheboro, Morganton)*	01/10/27		5.300	%		1,282,349			1,294,930
Gvest Sunnyland Homes LLC*	02/10/27		5.370	%		636,020			-
Gvest Warrenville Homes LLC*	03/10/27		5.590	%		1,221,130			-
Warrenville Gvest Homes LLC⁽¹⁾											3/10/2027		5.590	%		36		1,221,130			1,221,130
Gvest Wake Forest 2 Homes LLC (Cooley’s, Country Road home)⁽¹⁾											12/10/2027		7.390	%		36		561,086			561,086
Merritt Place MHP LLC											1/27/2024		WSJ Prime + 1	%		12		1,680,000			-
Country Aire MHP LLC⁽¹⁾											9/13/2025		SOFR + 2.35	%		36		3,500,000			-
Total Notes Payable					$	55,114,344		$	50,955,777								$	84,714,126		$	79,550,080
Discount Direct Lender Fees						(2,390,363	)		(2,064,294	)								(3,772,073	)		(3,666,214	)
Total Net of Discount					$	52,723,981		$	48,891,483								$	80,942,053		$	75,883,866

⁽¹⁾

The notes indicated above are subject to certain financial covenants.

F-16

MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2023 AND 2022

(UNAUDITED)

(2)

On September 1, 2022, the Company, through its wholly owned subsidiaries, entered into twenty-three loan agreements with KeyBank National Association (“KeyBank”) and Fannie Mae for a total principal balance of $62,000,000. The loan proceeds were primarily used to pay off third party notes and line of credit with various other lenders totaling approximately $54,000,000, promissory note issued to Metrolina Loan Holdings, LLC for $1,500,000 and a revolving promissory Note issued to Gvest Real Estates Capital LLC for $2,000,000. KeyBank withheld approximately $4,000,000 in escrow for planned capital projects to improve the financed communities which is included in restricted cash. The Company may prepay the notes in part or in full subject to prepayment penalties if repaid before May 31, 2032, and without penalty if repaid on or subsequent to that date. The loans are secured by the real estate, which predominately excludes mobile homes, and are guaranteed by the Company and Raymond M. Gee. The Company capitalized $2,842,213 of debt issuance costs in connection with this refinancing including a $1,000,000 accrued guaranty fee owed to Raymond M. Gee to be paid at a later date.

(3)

The Company repaid the Charlotte 3 Park MHP LLC note payable of $1,500,000 on March 1, 2022 and recognized refinancing cost expense totaling $15,751. This community was refinanced on April 14, 2022 with a different lender and the Company capitalized $258,023 of debt issuance costs related to the new note.

*	~~The notes indicated above are subject to certain financial covenants.~~

~~MANUFACTURED HOUSING PROPERTIES INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~JUNE 30, 2022 AND 2021~~

~~(UNAUDITED)~~

Lines of Credit – Variable Interest Entities

Facility	Borrower	Community	Maturity Date	Interest Rate	Maximum Credit Limit		Balance June 30, 2022			Balance December 31, 2021			Borrower	Community	Maturity Date	Interest Rate	Maximum Credit Limit		Balance March 31, 2023			Balance December 31, 2022
Occupied Home Facility⁽¹⁾	Gvest Homes I LLC	ARC, Crestview, Maple	01/01/30	8.375%	$	20,000,000	$	2,484,999		$	2,517,620		Gvest Homes I LLC	ARC, Crestview, Maple, Countryside	01/01/30	8.375%	$	20,000,000	$	3,755,107		$	2,424,896
Multi-Community Rental Home Facility	Gvest Finance LLC	ARC, Golden Isles	Various ⁽³⁾	Greater of 3.25% or Prime, + 375 bps	$	4,000,000	$	1,218,259		$	838,000		Gvest Finance LLC	ARC, Golden Isles, Springlake,	Various ⁽²⁾	Greater of 3.25% or Prime, + 375 bps	$	5,000,000	$	2,490,623		$	2,561,380
Multi-Community Floorplan Home Facility⁽²⁾	Gvest Finance LLC	Golden Isles, Springlake, Sunnyland, Crestview	Various ⁽³⁾	LIBOR + 6 – 8% based on days outstanding	$	2,000,000	$	1,768,849		$	1,104,255		Gvest Finance LLC	Golden Isles, Springlake, Sunnyland, Crestview, Meadowbrook	Various ⁽²⁾	LIBOR + 6 – 8% based on days outstanding	$	4,000,000	$	1,585,065		$	1,383,043
Springlake Home Facility⁽²⁾	Gvest Finance LLC	Springlake	12/10/26	6.75%	$	3,300,000	$	2,489,044		$	1,892,481
Total Lines of Credit - VIEs							$	7,961,151		$	6,352,356								$	7,830,795		$	6,369,319
Discount Direct Lender Fees							$	(173,508	)	$	(151,749	)							$	(205,877	)	$	(160,372	)
Total Net of Discount							$	7,787,643		$	6,200,607								$	7,624,918		$	6,208,947

(1)

During the ~~six~~three months ended ~~June 30, 2022, the Company~~March 31, 2023, Gvest Homes I LLC drew down ~~$19,145~~$1,353,000 related to the Occupied Home Facility and $1,251,321 related to the Multi-Community Floorplan Home Facility and $414,578 was transferred from the Multi-Community Floorplan Home Facility to the Multi-Community Rental Home Facility as the homes became occupied as rental units. Also during the six month ended June 30 2022, the Company drew down $596,563 related to the Springlake Home Facility and used the proceeds to pay down the same amount on the Multi-Community Floorplan Home Facility so that all homes at Springlake were financed by one lender.Facility.

~~(2)~~

Payments on the Multi-Community Floorplan Home Facility advances are interest only until each advance is paid off or transferred to the Multi-Community Rental Home Facility and payments on the Springlake Home Facility are interest only for the first six months.

~~(3)~~(2)

The maturity date of the of the Multi-Community Floorplan and Rental Line of Credit will vary based on each statement of financial transaction, a report identifying the funded homes and the applicable financial terms.

The agreements for each of the above line of credit facilities require the maintenance of certain financial ratios or other affirmative and negative covenants. All the above line of credit facilities are guaranteed by Raymond M. Gee.

F-17

MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~JUNE 30, 2022 AND 2021~~

~~(UNAUDITED)~~

MARCH 31, 2023 AND 2022

(UNAUDITED)

Metrolina Promissory Note

On October 22, 2021, the Company issued a promissory note to Metrolina Loan Holdings, LLC, ~~(“Metrolina”),~~ a significant stockholder, in the principal amount of $1,500,000. On September 2, 2022, the Company repaid the full outstanding balance of the loan with proceeds from the KeyBank portfolio refinance. The note ~~bears~~bore interest at a rate of 18% per annum and ~~matures~~was set to mature on April 1, 2023. During the first six months of the note, any prepayment would have required the Company to pay a yield maintenance fee equal to six months of interest. Thereafter, the loan may be prepaid at any time without penalty or fee. The note iswas guaranteed by Raymond M. Gee. As of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021, the balance on this note was $1,500,000. During the six months ended June 30,~~ 2022, ~~and 2021, interest expense totaled $133,890 and $0, respectively. During the three months ended June 30, 2022 and 2021, interest expense totaled $67,315 and $0, respectively.~~

~~Raymond M. Gee Promissory Note~~

On October 1, 2017, the Company issued a revolving promissory note to Raymond M. Gee, pursuant to which the Company could borrow up to $1,500,000 from Mr. Gee on a revolving basis for working capital purposes. In September 2020, the Company paid off the full balance; however, the line of credit remained available to the Company until it was cancelled in December 2021. As of June 30, 2022 and December 31, 2021, there was no outstanding balance on this note. During the ~~note.~~three months ended March 31, 2022, interest expense recognized was $66,575.

Gvest Revolving Promissory Note

On December 27, 2021, the Company issued a revolving promissory note to Gvest Real Estate Capital, LLC, an entity whose sole owner is Raymond M. Gee, the Company’s chairman and chief executive officer, pursuant to which the Company may borrow up to $1,500,000 on a revolving basis for working capital or acquisition purposes. On ~~the same date,~~September 9, 2022, the Company ~~borrowed $150,000. During~~paid off the ~~six months ended June 30, 2022,~~full balance with proceeds from the maximum credit limit on this note was increased to $2,000,000 and the Company borrowed an aggregate of $2,700,000 and repaid $850,000. As of June 30, 2022 and December 31, 2021, the outstanding balance on this note was $2,000,000 and $150,000, respectively.KeyBank portfolio refinance. This note ~~has~~had a five-year term and iswas interest-only based on ana 15% annual rate through the maturity date and iswas unsecured. As of March 31, 2023 and December 31, 2022, there was no outstanding balance on this note. During the three ~~and six~~ months ended ~~June 30,~~March 31, 2022, ~~and 2021,~~ interest expense ~~totaled $13,657 and $0 and $28,375 and $0, respectively.~~ recognized was $14,718.

NAV Real Estate LLC Promissory Note

On June 29, 2022, the Company issued a revolving promissory note to NAV RE, LLC, an entity whose owners are Adam Martin, the Company’s chief investment officer, and his spouse, pursuant to which the Company may borrow up to $2,000,000 on a revolving basis for working capital or acquisition purposes. On the same date, the Company borrowed $2,000,000. As of ~~June 30,~~March 31, 2023 and December 31, 2022, the outstanding principal balance on this note was $2,000,000. This note has a five-year term and is interest-only based on ana 15% annual rate through the maturity date and is unsecured. During the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022, interest expense totaled ~~$833.~~

~~Pending Debt Refinance~~$75,000.

During the six months ended June 30, 2022, the Company entered into an agreement with a lender to potentially refinance several of their loans pursuant to which the Company paid $1,668,690 in financing costs which are included in other assets on the balance sheet. As of the date of this report, the company has not entered into a binding agreement and are still negotiating loan proceeds and terms of the new loans.

Maturities of Long-Term Obligations for Five Years and Beyond

The minimum annual principal payments of notes payable, related party debt and lines of credit at ~~June 30, 2022~~March 31, 2023 by fiscal year were:

2022		434,661
2023		2,724,612
2023 (remainder)			$	351,666
2024		5,084,441		3,877,634
2025		1,365,854		7,117,026
2026		19,111,728		523,354
2027				10,251,778
Thereafter		39,854,199		72,423,463
Total minimum principal payments	$	68,575,494	$	94,544,921

NOTE 6 – COMMITMENTS AND CONTINGENCIES

From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise that may harm its business. The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse effect on its business, financial condition, or operating results.

F-18

MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~JUNE 30,~~MARCH 31, 2023 AND 2022 ~~AND 2021~~

(UNAUDITED)

NOTE 7 – STOCKHOLDERS’ EQUITY

Preferred Stock

The Company is authorized to issue up to 10,000,000 shares of preferred stock, $0.01 par value.

Series A Cumulative Convertible Preferred Stock

On May 8, 2019, the Company filed a certificate of designation with the Nevada Secretary of State pursuant to which the Company designated 4,000,000 shares of its preferred stock as Series A Cumulative Convertible Preferred Stock (the “Series A Preferred Stock”). The Series A Preferred Stock has the following voting powers, designations, preferences and relative rights, qualifications, limitations or restrictions:

Ranking. The Series A Preferred Stock ranks, as to dividend rights and rights upon our liquidation, dissolution, or winding up, senior to the Common Stock and pari passu with the Series B Preferred Stock and Series C Preferred Stock (as defined below). The terms of the Series A Preferred Stock will not limit the Company’s ability to (i) incur indebtedness or (ii) issue additional equity securities that are equal or junior in rank to the shares of Series A Preferred Stock as to distribution rights and rights upon liquidation, dissolution or winding up.

Dividend Rate and Payment Dates. Dividends on the Series A Preferred Stock are cumulative and payable monthly in arrears to all holders of record on the applicable record date. Holders of Series A Preferred Stock will be entitled to receive cumulative dividends in the amount of $0.017 per share each month, which is equivalent to the rate of 8% of the $2.50 liquidation preference per share. Dividends on shares of Series A Preferred Stock will continue to accrue even if any of the Company’s agreements prohibit the current payment of dividends or the Company does not have earnings. During the ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ the Company paid dividends of ~~$188,600~~$91,633 and ~~$187,167,~~$94,300, respectively.

Liquidation Preference. The liquidation preference for each share of Series A Preferred Stock is $2.50. Upon a liquidation, dissolution or winding up of the Company, holders of shares of Series A Preferred Stock will be entitled to receive, before any payment or distribution is made to the holders of Common Stock and on a pari passu basis with holders of Series B Preferred Stock and Series C Preferred Stock, the liquidation preference with respect to their shares plus an amount equal to any accrued but unpaid dividends (whether or not declared) to, but not including, the date of payment with respect to such shares.

Stockholder Optional Conversion. Each share of Series A Preferred Stock is convertible, at any time and from time to time, at the option of the holder thereof and without the payment of additional consideration, into that number of shares of Common Stock determined by dividing the liquidation preference of such share by the conversion price then in effect. The conversion price is initially equal $2.50, subject to adjustment as set forth in the certificate of designation. In addition, if at any time the trading price of the Common Stock is greater than the liquidation preference of $2.50, the Company may deliver a written notice to all holders to cause each holder to convert all or part of such holders’ Series A Preferred Stock.

Company Call and Stockholder Put Options. Commencing on the fifth anniversary of the initial issuance of shares of Series A Preferred Stock and continuing indefinitely thereafter, the Company will have a right to call for redemption the outstanding shares of Series A Preferred Stock at a call price equal to $3.75, or 150% of the original issue price of the Series A Preferred Stock, and correspondingly, each holder of shares of Series A Preferred Stock shall have a right to put the shares of Series A Preferred Stock held by such holder back to the Company at a put price equal to $3.75, or 150% of the original issue purchase price of such shares. During the ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ the Company recorded a put option value accretion of ~~$235,746~~$114,125 and ~~$236,250,~~$117,871, respectively.

Voting Rights. The Company may not authorize or issue any class or series of equity securities ranking senior to the Series A Preferred Stock as to dividends or distributions upon liquidation (including securities convertible into or exchangeable for any such senior securities) or amend the Company’s articles of incorporation (whether by merger, consolidation, or otherwise) to materially and adversely change the terms of the Series A Preferred Stock without the affirmative vote of at least two-thirds of the votes entitled to be cast on such matter by holders of the outstanding shares of Series A Preferred Stock, voting together as a class. Otherwise, holders of the shares of Series A Preferred Stock do not have any voting rights.

As of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, there were ~~1,886,000~~1,826,000 shares of Series A Preferred Stock issued and outstanding. As of ~~June 30,~~March 31, 2023, the Series A Preferred Stock balance was made up of Series A Preferred Stock totaling $4,565,000 and accretion of put options totaling $1,657,041. As of December 31, 2022, the Series A Preferred Stock balance was made up of Series A Preferred Stock totaling ~~$4,715,000~~$4,565,000 and accretion of put options totaling ~~$1,362,521. As of December 31, 2021, the Series A Preferred Stock balance was made up of Series A Preferred Stock totaling $4,715,000 and accretion of put options totaling $1,126,771.~~$1,542,916.

F-19

MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~JUNE 30,~~MARCH 31, 2023 AND 2022 ~~AND 2021~~

(UNAUDITED)

Series B Cumulative Redeemable Preferred Stock

On December 2, 2019, the Company filed a certificate of designation with the Nevada Secretary of State pursuant to which the Company designated 1,000,000 shares of its preferred stock as Series B Cumulative Redeemable Preferred Stock (the “Series B Preferred Stock”). The Series B Preferred Stock has the following voting powers, designations, preferences and relative rights, qualifications, limitations, or restrictions:

Ranking. The Series B Preferred Stock rank, as to dividend rights and rights upon liquidation, dissolution, or winding up, senior to the Common Stock and pari passu with the Series A Preferred Stock and Series C Preferred Stock. The terms of the Series B Preferred Stock will not limit the Company’s ability to (i) incur indebtedness or (ii) issue additional equity securities that are equal or junior in rank to the shares of Series B Preferred Stock as to distribution rights and rights upon liquidation, dissolution or winding up.

Dividend Rate and Payment Dates. Dividends on the Series B Preferred Stock are cumulative and payable monthly in arrears to all holders of record on the applicable record date. Holders of Series B Preferred Stock will be entitled to receive cumulative dividends in the amount of $0.067 per share each month, which is equivalent to the annual rate of 8% of the $10.00 liquidation preference per share; provided that upon an event of default (generally defined as the Company’s failure to pay dividends when due or to redeem shares when requested by a holder), such amount shall be increased to $0.083 per month, which is equivalent to the annual rate of 10% of the $10.00 liquidation preference per share. During the ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ the Company paid dividends of ~~$303,570~~$149,665 and ~~$275,731,~~$151,785, respectively.

Liquidation Preference. The liquidation preference for each share of Series B Preferred Stock is $10.00. Upon a liquidation, dissolution or winding up of the Company, holders of shares of Series B Preferred Stock will be entitled to receive, before any payment or distribution is made to the holders of Common Stock and on a pari passu basis with holders of Series A Preferred Stock and Series C Preferred Stock, the liquidation preference with respect to their shares plus an amount equal to any accrued but unpaid dividends (whether or not declared) to, but not including, the date of payment with respect to such shares.

Company Call and Stockholder Put Options. Commencing on the fifth anniversary of the initial issuance of shares of Series B Preferred Stock and continuing indefinitely thereafter, the Company will have a right to call for redemption the outstanding shares of Series B Preferred Stock at a call price equal to $15.00, or 150% of the original issue price of the Series B Preferred Stock, and correspondingly, each holder of shares of Series B Preferred Stock shall have a right to put the shares of Series B Preferred Stock held by such holder back to the Company at a put price equal to $15.00, or 150% of the original issue purchase price of such shares. ~~During the six months ended June 30, 2022 and 2021, the~~The Company recorded a put option value accretion of ~~$368,508~~$181,604 and ~~$370,526, respectively.~~$184,254 during the three months ended March 31, 2023 and 2022.

Voting Rights. The Company may not authorize or issue any class or series of equity securities ranking senior to the Series B Preferred Stock as to dividends or distributions upon liquidation (including securities convertible into or exchangeable for any such senior securities) or amend the Company’s articles of incorporation (whether by merger, consolidation, or otherwise) to materially and adversely change the terms of the Series B Preferred Stock without the affirmative vote of at least two-thirds of the votes entitled to be cast on such matter by holders of outstanding shares of Series B Preferred Stock, voting together as a class. Otherwise, holders of the shares of Series B Preferred Stock do not have any voting rights.

No Conversion Right. The Series B Preferred Stock is not convertible into shares of Common Stock.

On November 1, 2019, the Company launched an offering under Regulation A of Section 3(6) of the Securities Act of 1933, as, amended, for Tier 2 offerings, pursuant to which the Company offered up to 1,000,000 shares of Series B Preferred Stock at an offering price of $10.00 per share, for a maximum offering amount of $10,000,000. In addition, the Company offered bonus shares to early investors in this offering, whereby the first 400 investors received, in addition to Series B Preferred Stock, 100 shares of Common Stock, regardless of the amount invested, for a total of 40,000 shares of Common Stock.

This offering terminated on March 30, 2021 thus, the Company sold no shares of Series B Preferred Stock during the six months ended June 30, 2022. During the six months ended June 30, 2021, the Company sold an aggregate of 117,297 shares of Series B Preferred Stock for total gross proceeds of $1,172,970. After deducting a placement fee and other expenses, the Company received net proceeds of $1,087,485.F-20

MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2023 AND 2022

(UNAUDITED)

As of ~~June 30, 2022,~~March 31, 2023, there were ~~758,551~~747,951 shares of Series B Preferred Stock issued and outstanding and the Series B Preferred Stock balance was made up of Series B Preferred Stock, net of commissions, totaling ~~$7,185,716~~$7,079,716 and accretion of put options totaling ~~$1,701,386.~~$2,224,106. As of December 31, ~~2021,~~2022, there were ~~758,551~~747,951 shares of Series B Preferred Stock issued and outstanding and the Series B Preferred Stock balance was made up of Series B Preferred Stock, net of commissions, totaling ~~$7,185,716~~$7,079,716 and accretion of put options totaling ~~$1,332,878.~~$2,042,502.

~~MANUFACTURED HOUSING PROPERTIES INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~JUNE 30, 2022 AND 2021~~

~~(UNAUDITED)~~

Series C Cumulative Redeemable Preferred Stock

On May 24, 2021, the Company filed an amended and restated certificate of designation with the Nevada Secretary of State pursuant to which the Company designated 47,000 shares of its preferred stock as Series C Cumulative Redeemable Preferred Stock (the “Series C Preferred Stock”). The Series C Preferred Stock has the following voting powers, designations, preferences and relative rights, qualifications, limitations or restrictions:

Ranking. The Series C Preferred Stock ranks, as to dividend rights and rights upon liquidation, dissolution, or winding up, senior to Common Stock and pari passu with Series A Preferred Stock and Series B Preferred Stock. The terms of the Series C Preferred Stock do not limit the Company’s ability to (i) incur indebtedness or (ii) issue additional equity securities that are equal or junior in rank to the shares of Series C Preferred Stock as to distribution rights and rights upon liquidation, dissolution or winding up.

Stated Value. Each share of Series C Preferred Stock has an initial stated value of $1,000, subject to appropriate adjustment in relation to certain events, such as recapitalizations, stock dividends, stock splits, stock combinations, reclassifications or similar events affecting the Series C Preferred Stock.

Dividend Rate and Payment Dates. Dividends on the Series C Preferred Stock are cumulative and payable monthly in arrears to all holders of record on the applicable record date. Holders of Series C Preferred Stock are entitled to receive cumulative monthly cash dividends at a per annum rate of 7% of the stated value (or $5.83 per share each month based on the initial stated value). Dividends on each share begin accruing on, and are cumulative from, the date of issuance and regardless of whether the board of directors declares and pays such dividends. Dividends on shares of Series C Preferred Stock will continue to accrue even if any of the Company’s agreements prohibit the current payment of dividends or the Company does not have earnings. During the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, the Company paid dividends of ~~$275,137.~~$373,773. Due to timing of payments, ~~the Company~~ accrued dividends of ~~$55,785 during the six months ended June 30, 2022 and total accrued dividends of $82,746~~ $157,974 is presented in accrued liabilities on the balance sheet as of ~~June 30, 2022.~~March 31, 2023.

Liquidation Preference. Upon a liquidation, dissolution or winding up of the Company, holders of shares of Series C Preferred Stock are entitled to receive, before any payment or distribution is made to the holders of Common Stock and on a pari passu basis with holders of Series A Preferred Stock and Series B Preferred Stock, a liquidation preference equal to the stated value per share, plus accrued but unpaid dividends thereon.

F-21

MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2023 AND 2022

(UNAUDITED)

Redemption Request at the Option of a Holder. Once per calendar quarter, a holder will have the opportunity to request that the Company redeem that holder’s Series C Preferred Stock. The board of directors may, however, suspend cash redemptions at any time in its discretion if it determines that it would not be in the best interests of the Company to effectuate cash redemptions at a given time because the Company does not have sufficient cash, including because the board believes that the Company’s cash on hand should be utilized for other business purposes. Redemptions will be limited to four percent (4%) of the total outstanding Series C Preferred Stock per quarter and any redemptions in excess of such limit or to the extent suspended, shall be redeemed in subsequent quarters on a first come, first served, basis. The Company will redeem shares at a redemption price equal to the stated value of such redeemed shares, plus any accrued but unpaid dividends thereon, less the applicable redemption fee (if any). As a percentage of the aggregate redemption price of a holder’s shares to be redeemed, the redemption fee shall be:

●

11% if the redemption is requested on or before the first anniversary of the original issuance of such shares;

●

8% if the redemption is requested after the first anniversary and on or before the second anniversary of the original issuance of such shares;

●

5% if the redemption is requested after the second anniversary and on or before the third anniversary of the original issuance of such shares; and

●

after the third anniversary of the date of original issuance of shares to be redeemed, no redemption fee shall be subtracted from the redemption price.

~~MANUFACTURED HOUSING PROPERTIES INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~JUNE 30, 2022 AND 2021~~

~~(UNAUDITED)~~

Optional Redemption by the Company. The Company has the right (but not the obligation) to redeem shares of Series C Preferred Stock at a redemption price equal to the stated value of such redeemed shares, plus any accrued but unpaid dividends thereon; provided, however, that if the Company redeems any shares of Series C Preferred Stock prior to the fourth (4^th) anniversary of their issuance, then the redemption price shall include a premium equal to ten percent (10%) of the stated value.

Mandatory Redemption by the Company. The Company must redeem the outstanding shares of Series C Preferred Stock on the fourth (4^th) anniversary of their issuance at a redemption price equal to the stated value of such redeemed shares, plus any accrued but unpaid dividends thereon.

Voting Rights. The Series C Preferred Stock has no voting rights.

No Conversion Right. The Series C Preferred Stock is not convertible into shares of Common Stock.

In accordance with ASC 480-10, the Series C Preferred Stock is treated as a liability and is presented net of unamortized debt issuance costs on the balance sheet because the Company has an unconditional obligation to redeem the Series C Preferred Stock and dividends on the Preferred C Stock are included in interest expense.

On June 11, 2021, the Company launched a new offering under Regulation A of Section 3(6) of the Securities Act of 1933, as amended (the “Securities Act”) for Tier 2 offerings, pursuant to which the Company is offering up to 47,000 shares of Series C Preferred Stock at an offering price of $1,000 per share for a maximum offering amount of ~~$47 million.~~$47,000,000.

During the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, the Company sold an aggregate of ~~6,303~~3,875 shares of Series C Preferred Stock for total gross proceeds of ~~$6,297,617.~~$3,874,917. After deducting a placement fee and broker dealer commissions, the Company received net proceeds of $3,613,371. In addition to the placement fee and broker dealer commissions, the Company capitalized an additional $29,326 of other issuance costs associated with the offering which, net of amortization expense, offset with the net proceeds on the balance sheet.

During the three months ended March 31, 2022, the Company sold an aggregate of 4,293 shares of Series C Preferred Stock for total gross proceeds of $4,289,444. After deducting a placement fee and other expenses, the Company received net proceeds of ~~$5,877,935.~~$4,004,110. In addition to the placement fee and broker dealer commissions, the Company capitalized an additional $9,997 of other issuance costs associated with the offering which, net of amortization expense, offset with the net proceeds on the balance sheet.

As of ~~June 30,~~December 31, 2022 there were ~~12,037~~21,584 shares of Series C Preferred Stock issued and outstanding and the Series C Preferred Stock balance was made up of Series C Preferred Stock gross proceeds totaling ~~$12,032,017~~$21,584,002 net of total unamortized debt issuance costs of ~~$863,892.~~$1,406,815.

~~As of December~~

F-22

MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2021, there were 5,734 shares of Series C Preferred Stock issued and outstanding and the Series C Preferred Stock balance was made up of Series C Preferred Stock gross proceeds totaling $5,734,400 net of total unamortized debt issuance costs of $520,030.

2023 AND 2022

(UNAUDITED)

Common Stock

The Company is authorized to issue up to 200,000,000 shares of Common Stock, par value $0.01 per share. As of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, there were ~~12,412,013 and 12,403,680~~12,493,012 shares of Common Stock issued and ~~outstanding, respectively.~~outstanding.

~~Stock Issued for Cash~~

~~During the six months ended June 30, 2022, the Company issued 8,333~~No shares of Common Stock were issued upon employee exercise ~~of stock options for total exercise price of $83.~~

~~During~~during the ~~six~~three months ended ~~June 30, 2021, the Company issued 5,100 shares of Common Stock, valued at $1,377, to early investors in the prior Regulation A offering.~~March 31, 2023 and 2022.

~~MANUFACTURED HOUSING PROPERTIES INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~JUNE 30, 2022 AND 2021~~

~~(UNAUDITED)~~

Equity Incentive Plan

In December 2017, the Board of Directors, with the approval of a majority of the stockholders of the Company, adopted the Manufactured Housing Properties Inc. Stock Compensation Plan (the “Plan”) which is administered by the Compensation Committee. As of ~~June 30, 2022,~~March 31, 2023, there were ~~574,842~~588,842 shares granted and ~~425,158~~411,158 shares remaining available under the Plan. The Company has issued options to directors, officers, and employees under the Plan.

During the ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ the Company issued ~~145,000~~50,000 and ~~50,000~~45,000 options and recorded stock option expense of ~~$77,822~~$109,975 and ~~$37,817,~~$49,760, respectively. The aggregate fair value of the options issued during the three months ended March 31, 2023 was ~~$570,221.~~$65,817. The vesting schedule for ~~100,000~~50,000 options issued to an officer in ~~April 2022~~January 2023 is as follows: one third ~~vest~~vests after ~~one year,~~two years, and two thirds vest in equal installments over the succeeding two-year period. ~~The vesting schedule for~~With the ~~other 45,000~~exception of 50,000 options issued ~~during the six months ended 2022 is as follows: one third vest immediately, and two thirds vest~~ in ~~equal annual installments over the succeeding two-year period. All~~January 2023, all options were granted at a price of $0.01 per share, which represents a price that may be deemed to be below the market value per share of the Company’s common stock as defined by the Plan.

The following table summarizes the stock options outstanding as of ~~June 30, 2022:~~March 31, 2023:

	Number of options			Weighted average exercise price (per share)			Weighted average remaining contractual term (in years)			Number of options		Weighted average exercise price (per share)		Weighted average remaining contractual term (in years)
Outstanding at December 31, 2021		706,175		$	0.01			6.6
Outstanding at December 31, 2022											538,842	$	0.06		6.8
Granted		145,000			0.01			9.7			50,000		1.32		9.9
Exercised		(8,333	)		(0.01	)		(9.6	)		-		-		-
Forfeited / cancelled / expired		(268,000	)		(0.01	)		(6.1	)		-		-		-
Outstanding at June 30, 2022		574,842		$	0.01			6.9
Exercisable at June 30, 2022		428,176			0.01			6.0
Outstanding at March 31, 2023											588,842	$	0.16		6.9
Exercisable at March 31, 2023											390,509	$	0.03		5.6

As of ~~June 30, 2022,~~March 31, 2023, there were ~~574,842~~538,842 “in-the-money” options with an aggregate intrinsic value of ~~$1,057,709.~~$508,954. The aggregate intrinsic value represents the total intrinsic value (the difference between the Company’s closing stock price at fiscal year-end and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holder had all options holders exercised their options on ~~June 30, 2022.~~March 31, 2023.

F-23

MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2023 AND 2022

(UNAUDITED)

The following table summarizes information concerning options outstanding as of ~~June 30, 2022.~~March 31, 2023.

Strike Price Range ($)	Strike Price Range ($)	Outstanding stock options		Weighted average remaining contractual term (in years)		Weighted average outstanding strike price		Vested stock options		Weighted average vested strike price		Strike Price Range ($)	Outstanding stock options		Weighted average remaining contractual term (in years)		Weighted average outstanding strike price		Vested stock options		Weighted average vested strike price
$	0.01		338,675		5.5	$	0.01		338,675	$	0.01	1.32		50,000		9.9	$	1.32		-	$	-
$	0.01		49,500		7.5	$	0.01		49,500	$	0.01	0.01		288,675		4.9	$	0.01		288,675	$	0.01
$	0.01		50,000		8.5	$	0.01		33,333	$	0.01	0.01		13,500		7.0	$	0.01		13,500	$	0.01
$	0.01		136,667		9.7	$	0.01		6,667	$	0.01	0.01		50,000		8.0	$	0.01		50,000	$	0.01
$												0.01 - 0.50		186,667		8.8	$	0.14		38,334	$	0.22

The table below presents the weighted average expected life in years of options granted under the Plan as described above. The risk-free rate of the stock options is based on the U.S. Treasury yield curve in effect at the time of grant, which corresponds with the expected term of the option granted.

The fair value of stock options was estimated using the Black Scholes option pricing model with the following assumptions for grants made during the periods indicated.

Stock option assumptions	June 30, 2022	June 30, 2021	March 31, 2023			March 31, 2022
Risk-free interest rate	1.40-2.84%	0.26-1.40%		1.40-3.98	%		1.55-1.76	%
Expected dividend yield	0.00%	0.00%		0.00	%		0.00	%
Expected volatility	237.85-249.77%	16.03-273.98%		223.05-249.77	%		245.51	%
Expected life of options (in years)	6.5-7	6.5		6.5-7			6.5

~~MANUFACTURED HOUSING PROPERTIES INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~JUNE 30, 2022 AND 2021~~

~~(UNAUDITED)~~

NOTE 8 – RELATED PARTY TRANSACTIONS

See Note 5 for information regarding ~~the promissory notes issued to Metrolina, a significant stockholder,~~ the revolving promissory note issued to Gvest Real Estate Capital, LLC, an entity whose sole owner is Raymond M. Gee, the Company’s chairman and chief executive officer, and the revolving promissory note issued to NAV Real Estate, LLC, an entity whose owners are Adam Martin, the Company’s chief investment officer, and his spouse.

In August 2019, the Company entered into an office lease agreement with 136 Main Street LLC, an entity whose sole owner is Gvest Real Estate LLC, whose sole owner is Mr. Gee, for the lease of the Company’s offices. The lease is $12,000 per month and is on a month-to-month term. During the ~~six months ended June 30, 2022 and 2021, the Company paid $72,000 of rent expense to 136 Main Street LLC. During the~~ three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ the Company paid $36,000 of rent expense to 136 Main Street LLC.

On September 1, 2022, the Company entered into a consulting agreement with Gvest Real Estate Capital, LLC for development consulting and management services related to several upcoming mobile home community development projects at the Sunnyland and Raeford properties and assistance with major capital improvement projects at existing communities. The consulting agreement is $8,000 per month and is on a month-to-month term. During the ~~six~~three months ended ~~June 30,~~March 31, 2023, the Company paid $8,000 for development consulting services to Gvest Real Estate Capital LLC.

On April 1, 2022, the Company entered into an agreement with Gvest Capital LLC, an entity whose sole owner is Raymond M. Gee, and its employee Michael P. Kelly, a significant beneficial stockholder, whereby the Company pays a fee per completed acquisition and a monthly retainer fee to Mr. Kelly for legal services in connection with acquisitions and other operating matters. During the three and three months ended March 31, 2023, the company paid Mr. Kelly $25,000.

During the three months ended March 31, 2023, Raymond M. Gee received fees totaling $245,000 for his personal guaranty on certain promissory notes relating to the acquisition and refinancing of mobile home communities owned by the Company, in relation to the Merritt Place MHP and County Aire MHP acquisitions paid at closing. During the three months ended March 31, 2022, Raymond M. Gee received fees totaling ~~$620,000~~$450,000 for his personal guaranty on certain promissory notes relating to the acquisitions of mobile home communities owned by the Company, including $250,000 in relation to the Asheboro and Morganton acquisitions which were accrued for at December 31, 2021 and paid in January 2022. ~~During~~The Company also accrued a $1,000,000 guaranty fee owed to Raymond M. Gee, during the ~~six months~~year ended ~~June 30, 2021, Mr. Gee received no fees~~December 31, 2022 for his personal ~~guaranty.~~guaranty of the KeyBank $62,000,000 portfolio refinance made up of several loans to be paid at a later date which is still outstanding and unpaid as of March 31, 2023.

See Note 2 for information regarding related party VIEs.

F-24

MANUFACTURED HOUSING PROPERTIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2023 AND 2022

(UNAUDITED)

NOTE 9 – SUBSEQUENT EVENTS

Additional Closings of Regulation A Offering

Subsequent to ~~June 30, 2022, we~~March 31, 2023, the Company sold an aggregate of ~~1,447~~1,434 shares of Series C Preferred Stock in additional closings of this offering for total gross proceeds of ~~$1,447,000.~~$1,433,750. After deducting a placement fee, wethe Company received net proceeds of approximately ~~$1,349,728.~~$1,336,972.

~~Red Fox Run~~New Offering

On April 10, 2023, the Company filed a certificate of designation with the Nevada Secretary of State pursuant to which the Company designated 75,000 shares of its preferred stock as Series D Cumulative Redeemable Preferred Stock. The Company filed this designation in anticipation of the launching of a new offering under Regulation D of the Securities Act.

Palm Shadows Acquisition

On ~~February 11, 2022,~~March 28, 2023, MHP Pursuits LLC entered into a purchase and sale agreement with an individual for the purchase of a manufactured housing community located in Clyde, North Carolina, a part of the Asheville Metropolitan Statistical Area, consisting of 51 sites and 51 homes on approximately 9 acres for a total purchase price of $3,050,000. On July 12, 2022, MHP Pursuits LLC assigned its rights and obligations in the ~~purchase agreement~~Palm Shadows Purchase Agreement to ~~Red Fox~~the Company’s newly formed wholly owned subsidiary Palm Shadows MHP LLC, ~~an entity wholly owned by the Company, pursuant to an assignment of purchase and sale agreement.~~a Texas limited liability company (“Palm Shadows MHP”) (the “Palm Shadows Assignment”). On ~~July 29, 2022,~~April 14, 2023, closing of the ~~purchase agreement~~Palm Shadows Purchase Agreement was completed and ~~Red Fox~~Palm Shadows MHP ~~LLC~~ purchased the land, land improvement, and ~~buildings. Proforma financial information is included in the unaudited proforma combined results~~buildings for a total purchase price of ~~operations in Note 4.~~$10,500,000. The Palm Shadows Purchase Agreement also contains additional covenants, representations, and warranties that are customary of real estate purchase and sale agreements.

In connection with the closing of the ~~property,~~Palm Shadows Property, on ~~July 29,~~April 12, 2022, ~~Red Fox~~Palm Shadows MHP ~~LLC~~ entered into a loan agreement (the “Palm Shadows Loan Agreement”) with ~~Charlotte Metro Credit Union~~Five Star Bank for a loan in the principal amount of ~~$2,250,000~~$7,350,000 and issued a promissory note to the lender for the same ~~amount.~~amount (the “Palm Shadows Note”).

~~Interest on the disbursed and unpaid principal balance accrues as follows: (a) from the date funds are first disbursed at a rate of 5.25% per annum,~~The loan is interest only for the first ~~twenty-four months, and (b) on September 1, 2024, interest~~twelve months. Interest on the disbursed and unpaid principal balance accrues at a rate ~~5.25%~~of 7.030% per annum ~~until maturity. Interest is calculated on the basis of a 365-day year and the actual number of calendar days elapsed. Payments will begin on September 1, 2024 and continue the 1~~^st ~~of every month until maturity on August 1, 2032. Red Fox MHP LLC may prepay the note in part or in full at any time without penalty.~~

The note is secured by a first priority security interest in the property and is guaranteed by the Company and Raymond M. Gee. The loan agreement and note contain customary financial and other covenants and events of default for a loan of its type.

~~MANUFACTURED HOUSING PROPERTIES INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~JUNE 30, 2022 AND 2021~~

~~(UNAUDITED)~~

~~Solid Rock Acquisition~~

~~On February 25, 2022, MHP Pursuits LLC entered into a purchase and sale agreement with K10 Enterprises LLC~~ for the ~~purchase of a manufactured housing community located in Leesville, South Carolina, consisting of 39 sites~~first sixty months, and ~~homes on approximately 11 acres~~ for ~~a total purchase price of $1,700,000. On July 7, 2022, MHP Pursuits LLC assigned its rights and obligations in~~ the ~~purchase agreement to Solid Rock MHP LLC and Solid Rock MHP Homes LLC, wholly owned subsidiaries~~remainder of the Company, pursuant to an assignment of purchase and sale agreement. On July 7, 2022, closing of the purchase agreement was completed and Solid Rock MHP LLC purchased the land and land improvements and Solid Rock MHP Home LLC purchased the buildings. Proforma financial information is included in the unaudited proforma combined results of operations in Note 4.

In connection with the closing of the property, on July 7, 2022, Solid Rock MHP LLC entered into a loan agreement with United Bank for a loan in the principal amount of $1,125,000 and issued a promissory note to the lender for the same amount.

~~Interest~~term, interest on the disbursed and unpaid principal balance accrues ~~from the date funds are first disbursed at a rate of 5% per annum, interest only for the first twelve months. The interest rate may change on June 30, 2027 and every five years thereafter~~ based on the ~~Wall Street Journal U.S. Prime Rate~~Daily Treasury Yield Curve on United States Treasury Securities plus ~~1 percentage point with~~a margin of 3.00% per annum adjusted for minimum and maximum rate limitations on the ~~minimum~~loan, resulting in an initial rate ~~being 5%~~of $7.03%. Interest is calculated on the basis of a 360-day year and the actual number of calendar days elapsed. ~~Payments began~~Interest-only payments will begin on ~~July 30, 2022~~May 12, 2023 and continue monthly until May 12, 2024, at which point the 30^thmonthly payment consisting of ~~every~~principal and interest will be $39,982 per month until maturity on ~~July 7, 2032. Solid Rock~~May 12, 2033. Palm Shadows MHP ~~LLC~~ may prepay the ~~note~~Palm Shadows Note in part or in full at any time if ~~it pays~~they pay a prepayment ~~premium calculated in accordance with the loan agreement.~~fee.

The ~~note~~Palm Shadows Note is secured by a first priority security interest in the ~~property~~Palm Shadows Property pursuant to a deed of trust (the “Palm Shadow Deed”), an assignment of rents (the “Palm Shadows Assignment of Rents”) and is guaranteed by the Company (the “Corporate Guaranty”) and Raymond M. Gee.

The ~~loan agreement~~Palm Shadows Loan Agreement and ~~note~~Palm Shadows Note contain customary financial and other covenants and events of default for a loan of its type.

~~Stock Options Exercise~~

On August 2, 2022, the Company issued 50,000 common shares upon exercise of stock options pursuant to the Stock Compensation Plan administered by the Compensation Committee and a settlement agreement and release between the Company and a former employee.F-25

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Use of Terms

Except as otherwise indicated by the context and for the purposes of this report only, references in this report to “we,” “our” and the “Company” refer to Manufactured Housing Properties Inc., a Nevada corporation, and its consolidated subsidiaries and variable interest entities, or VIEs.

Special Note Regarding Forward Looking Statements

This report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which include information relating to future events, future financial performance, strategies, expectations, competitive environment, regulation and availability of resources. These forward-looking statements include, without limitation: statements concerning projections, predictions, expectations, estimates or forecasts for our business, financial and operating results and future economic performance; statements of management’s goals and objectives; trends affecting our financial condition, results of operations or future prospects; statements regarding our financing plans or growth strategies; statements concerning litigation or other matters; and other similar expressions concerning matters that are not historical facts. Words such as “may,” “will,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes” and “estimates,” and similar expressions, as well as statements in future tense, identify forward-looking statements.

Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times, or by which, that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management’s good faith beliefs as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.

Potential investors should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. Potential investors should not make an investment decision based solely on our projections, estimates or expectations.

The specific discussions herein about our company include financial projections and future estimates and expectations about our company’s business. The projections, estimates and expectations are presented in this report only as a guide about future possibilities and do not represent actual amounts or assured events. All the projections and estimates are based exclusively on our management’s own assessment of our business, the industry in which we operate and the economy at large and other operational factors, including capital resources and liquidity, financial condition, fulfillment of contracts and opportunities. The actual results may differ significantly from the projections.

Overview

We are a self-administered, self-managed, vertically integrated owner and operator of manufactured housing communities. We earn income from leasing manufactured home sites to tenants who own their own manufactured home and the rental of company-owned manufactured homes to residents of the communities.

~~We own~~As of March 31, 2023, we owned and ~~operate forty-seven~~operated 57 manufactured housing communities containing approximately ~~2,260~~2,723 developed sites and ~~1,195~~1,410 company-owned, manufactured homes. Our communities are located in Georgia, North Carolina, South Carolina and Tennessee.

As of ~~June 30, 2022,~~March 31, 2023, our portfolio of manufactured housing properties consisted of the following:

●

Pecan Grove – aan 82 lot, all-age community situated on 10.71 acres and located in Charlotte, North Carolina.

●

Azalea Hills – a 39 lot, all-age community situated on 7.46 acres and located in Gastonia, North Carolina, a suburb of Charlotte, North Carolina.

●

Holly Faye – a 35 lot all-age community situated on 8.01 acres and located in Gastonia, North Carolina, a suburb of Charlotte North Carolina.

●

Lakeview – aan 84 lot all-age community situated on 17.26 acres in Spartanburg, South Carolina.

●

Chatham Pines – a 49 lot all-age community situated on 23.57 acres and located in Chapel Hill, North Carolina.

●

Maple Hills – a 74 lot all-age community situated on 21.20 acres and located in Mills River, North Carolina, which is part of the Asheville, North Carolina, Metropolitan Statistical Area.

	●	*Hunt Club Forest* – a 78 lot all-age community situated on 13.02 acres and located in the Columbia, South Carolina metro area.

	●	*B&D* – a 96 lot all-age community situated on 17.75 acres and located in Chester, South Carolina.

	●	*Crestview* – a 113 lot all age community situated on 17.1 acres and located in the Asheville, North Carolina, Metropolitan Statistical Area.

	●	*Springlake* – three all-age communities with ~~224~~221 lots situated on 72.7 acres and located in Warner Robins, Georgia.

	●	*ARC* – five all-age communities with 180 lots situated on 39.34 acres and located in Lexington, South Carolina.

	●	*Countryside* – a 110 lot all-age community situated on 35 acres and located in Lancaster, North Carolina.

	●	*Evergreen* – a 65 lot all-age community situated on 28.4 acres and located in Dandridge, Tennessee.

	●	*Golden Isles* – a 107 lots all-age community situated on 16.76 acres and located in Brunswick, Georgia.

	●	*Anderson* – ten all-age communities with 178 lots situated on 50 acres and located in Anderson, South Carolina.

	●	*Capital View* – a 32 lot all-age community situated on 9.84 acres and located in Gaston, South Carolina.

	●	*Hidden Oaks* - a 44 lot all-age community situated on 8.96 acres and located in West Columbia, South Carolina.

	●	*North Raleigh –* five all-age communities with 138 lots situated on 135 acres and located in Franklin and Granville Counties, North Carolina.


	●	*Dixie –* a 37 lot all-age community situated on 3.43 acres and located in Kings Mountain, North Carolina.

	●	*Driftwood –* a 26 lot all-age community situated on 34.92 acres and located in Charlotte, North Carolina.

	●	*Meadowbrook –* a 94 lot all-age community situated on 40.1 acres and located in York, South Carolina.

	●	*Morganton* – a 61 lot all-age community situated on 31.29 acres and located in Morganton, North Carolina.

	●	*Asheboro* – aan 84 lot all-age community situated on 45.4 acres and located in Asheboro, North Carolina.

	●	*Sunnyland –* a 7372 lot all-age community situated on 18.57 acres and an adjacent parcel of 15 acres of undeveloped land both located in Byron, Georgia.

	●	*Warrenville –* two all-age communities with 85 lots situated on 45 acres and located in Warrenville, South Carolina.

	●	*Lake Village ~~(Spaulding)~~(fka Spaulding) –* a 7273 lot all-age community situated on 17 acres and located in Brunswick, Georgia.

	●	*Solid Rock –* a 39 lot all-age community situated on 11 acres and located in Leesville, South Carolina.

	●	*Red Fox –* a 52 lot all-age community situated on 9 acres and located in Clyde, North Carolina.

	●	*Statesville –* a 44 lot all age community situated on 12.86 acres and located in Statesville, North Carolina.

	●	*Timberview* – a 55 lot all age community situated on 50 acres and located in Trinity, North Carolina.

	●	*Glynn Acres –* a 21 lot all age community situated on 2.9 acres and located in Brunswick, Georgia.

	●	*Cooley’s (aka Wake Forest 2) –* a 44 lot all age community situated on 16 acres and located in Youngsville, North Carolina.

	●	*Country Road (aka Wake Forest 2)* – a 72 lot all age community situated on 27 acres and located in Franklinton, North Carolina.

	●	*Mobile Cottage –* a 23 lot all age community situated on 13 acres and located in Morganton, North Carolina.

	●	*Merritt Place –* a 39 lot all age community situated on 13 acres and located in Morganton, North Carolina.

	●	*Country Aire –* a 105 lot all age community situated on 21 acres and located in Simpsonville, South Carolina.

Manufactured housing communities are residential developments designed and improved for the placement of detached, single-family manufactured homes that are produced off-site and installed on residential sites within the community. The owner of a manufactured home leases the site on which it is located or the lessee of a manufactured home leases both the home and site on which the home is located.

We believe that manufactured housing is one of the only non-subsidized affordable housing options in the U.S. and that manufactured housing is an economically attractive alternative to traditional single-family and multi-family housing, as it provides a housing alternative that has characteristics of single-family housing (no shared walls, dedicated parking and a yard), yet is more attainable than single-family while being competitively priced to multi-family. Demand for housing affordability continues to increase, but supply of manufactured housing remains virtually static, as there are not many new manufactured housing communities being developed, and many are redeveloped to less affordable options. We are committed to providing this attainable housing option and an improved level of service to our residents, while producing an attractive and risk adjusted return to our investors.

~~Recent Developments~~

Recent Developments

Additional Closings of Regulation A Offering

~~Red Fox Run~~Palm Shadows Acquisition

On ~~February 11, 2022,~~March 28, 2023, MHP Pursuits LLC entered into a purchase and sale agreement with an individual for the purchase of a manufactured housing community located in Clyde, North Carolina, a part of the Asheville Metropolitan Statistical Area, consisting of 51 sites and 51 homes on approximately 9 acres for a total purchase price of $3,050,000. On July 12, 2022, MHP Pursuits LLC assigned its rights and obligations in the ~~purchase agreement~~Palm Shadows Purchase Agreement to ~~Red Fox~~the Company’s newly formed wholly owned subsidiary Palm Shadows MHP LLC, ~~an entity wholly owned by the Company, pursuant to an assignment of purchase and sale agreement.~~a Texas limited liability company (“Palm Shadows MHP”) (the “Palm Shadows Assignment”). On ~~July 29, 2022,~~April 14, 2023, closing of the ~~purchase agreement~~Palm Shadows Purchase Agreement was completed and ~~Red Fox~~Palm Shadows MHP ~~LLC~~ purchased the land, land improvement, and buildings. ~~Proforma financial information is included in the unaudited proforma combined results~~The Palm Shadows Purchase Agreement also contains additional covenants, representations, and warranties that are customary of ~~operations in Note 4.~~real estate purchase and sale agreements.

~~Interest on the disbursed and unpaid principal balance accrues as follows: (a) from the date funds are first disbursed at a rate of 5.25% per annum,~~The loan is interest only for the first ~~twenty-four months, and (b) on September 1, 2024, interest~~twelve months. Interest on the disbursed and unpaid principal balance accrues at a rate ~~5.25%~~of 7.030% per annum ~~until maturity. Interest is calculated on the basis of a 365-day year and the actual number of calendar days elapsed. Payments began on September 1, 2024 and continue the 1~~^st ~~of every month until maturity on August 1, 2032. Red Fox MHP LLC may prepay the note in part or in full at any time without penalty.~~

~~Solid Rock Acquisition~~

~~Interest~~term, interest on the disbursed and unpaid principal balance accrues ~~from the date funds are first disbursed at a rate of 5% per annum, interest only for the first twelve months. The interest rate may change on June 30, 2027 and every five years thereafter~~ based on the ~~Wall Street Journal U.S. Prime Rate~~Daily Treasury Yield Curve on United States Treasury Securities plus ~~1 percentage point with~~a margin of 3.00% per annum adjusted for minimum and maximum rate limitations on the ~~minimum~~loan, resulting in an initial rate ~~being 5%~~of $7.03%. Interest is calculated on the basis of a 360-day year and the actual number of calendar days elapsed. ~~Payments began~~Interest-only payments will begin on ~~July 30, 2022~~May 12, 2023, and continue monthly until May 12, 2024, at which point the 30^thmonthly payment consisting of ~~every~~principal and interest will be $39,982 per month until maturity on ~~July 7, 2032. Solid Rock~~May 12, 2033. Palm Shadows MHP ~~LLC~~ may prepay the ~~note~~Palm Shadows Note in part or in full at any time if ~~it pays~~they pay a prepayment ~~premium calculated in accordance with the loan agreement.~~fee.

The ~~loan agreement~~Palm Shadows Loan Agreement and ~~note~~Palm Shadows Note contain customary financial and other covenants and events of default for a loan of its type.

Impact of Coronavirus Pandemic

Some states and cities, including some where the Company’s properties are located, reacted by instituting quarantines, restrictions on travel, “stay at home” rules and restrictions on the types of businesses that may continue to operate and is what capacity, as well as guidance in response to the pandemic and the need to contain it.

The rules and restrictions put in place have had a negative impact on the economy and business activity and may adversely impact the ability of the Company’s tenants, many of whom may be restricted in their ability to work, to pay their rent as and when due. Enforcing the Company’s rights as landlord against tenants who fail to pay rent or otherwise do not comply with the terms of their leases may not be possible as many jurisdictions, including those where are properties are located, have established rules and/or regulations preventing us from evicting tenants for certain periods in response to the pandemic. If the Company is unable to enforce its rights as landlords, our business would be materially affected.

The extent to which the pandemic may impact the Company’s results will depend on future developments, which are highly uncertain and cannot be predicted as of the date of this report, including new information that may emerge concerning the severity of the pandemic and steps taken to contain the pandemic or treat its impact, among others. Nevertheless, the pandemic and the current financial, economic and capital markets environment present material uncertainty and risk with respect to the Company’s performance, financial condition, results of operations and cash flows.

Results of Operations

Comparison of Three Months Ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~

The following table sets forth key components of our results of operations during the three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ both in dollars and as a percentage of our revenues.

	Three Months Ended June 30, 2022						Three Months Ended June 30, 2021						Three Months Ended March 31, 2023						Three Months Ended March 31, 2022
	Amount			Percent of Revenues			Amount			Percent of Revenues			Amount			Percent of Revenues			Amount			Percent of Revenues
Revenue
Rental and related income	$	3,283,777			97.40	%	$	1,776,377			98.72	%	$	4,145,189			97.36	%	$	3,040,022			99.51	%
Gross revenues from sales		87,594			2.60	%		23,061			1.28	%
Gross revenues from home sales														112,300			2.64	%		15,000			0.49	%
Total revenues		3,371,371			100.00	%		1,799,438			100.00	%		4,257,489			100.00	%		3,055,022			100.00	%
Community operating expenses
Repair and maintenance		327,265			9.71	%		115,394			6.41	%		275,529			6.47	%		221,019			7.23	%
Real estate taxes		217,093			6.44	%		56,846			3.16	%		201,633			4.74	%		180,829			5.92	%
Utilities		239,985			7.12	%		142,325			7.91	%		306,412			7.20	%		235,895			7.72	%
Insurance		78,999			2.34	%		40,609			2.26	%		104,059			2.44	%		60,928			1.97	%
General and administrative expense		405,044			12.01	%		159,112			8.84	%		708,168			16.63	%		376,196			12.31	%
Total community operating expenses		1,268,386			37.62	%		514,286			28.58	%		1,595,801			37.48	%		1,074,237			35.16	%
Corporate payroll and overhead		1,254,918			37.22	%		583,733			32.44	%		1,571,454			36.91	%		909,078			29.76	%
Depreciation expense		818,975			24.29	%		462,042			25.68	%		1,023,015			24.03	%		759,704			24.87	%
Interest expense		1,235,048			36.63	%		447,306			24.86	%		2,053,455			48.23	%		1,101,693			36.06	%
Refinancing costs		15,751			0.47	%		-			-
Cost of home sales		122,269			3.63	%		-			-			130,806			3.07	%		-			0.00	%
Total expenses		4,715,347			136.24	%		2,007,367			111.56	%		6,374,531			149.73	%		3,844,712			125.85	%
Other income		-			-			139,300			7.74	%
Net loss	$	(1,343,976	)		(39.86	)%	$	(68,629	)		(3.81	)%	$	(2,117,042	)		(49.73	)%	$	(789,690	)		(25.84	)%
Variable interest entity share of net income (loss)		(250,915	)		(7.44	)%		118,348			6.58	%
Net loss attributable to our company	$	(1,093,061	)		(32.42	)%	$	(186,977	)		(10.39	)%
Variable interest entity share of net loss														(182,466	)		(4.29	)%		(159,570	)		(5.22	)%
Net income (loss) attributable to our company													$	(1,934,576	)		(45.44	)%	$	(630,120	)		(20.63	)%
Preferred stock dividends and put option value accretion		548,214			16.26	%		540,134			30.02	%		537,027			12.61	%		548,210			17.94	%
Net loss attributable to common stockholders	$	(1,641,275	)		(48.68	)%	$	(727,111	)		(40.41	)%	$	(2,471,603	)		(58.05	)%	$	(1,178,330	)		(38.57	)%

Revenues. For the three months ended ~~June 30, 2022,~~March 31, 2023, we earned total revenues of ~~$3,371,371,~~$4,257,489, as compared to ~~$1,799,438~~$3,055,022 for the three months ended ~~June 30, 2021,~~March 31, 2022, an increase of ~~$1,571,933,~~$1,202,467, or ~~87.36%~~39.36%. The increase in revenues between the periods was primarily due to ~~$1,313,762~~$714,255 of rental income from the acquisition of ~~twenty-seven~~thirteen manufactured housing communities on or subsequent to ~~June 30, 2021.~~March 31, 2022. The remaining increase was due to ~~occupancy and~~ rental rate increases.

Community Operating Expenses. For the three months ended ~~June 30, 2022,~~March 31, 2023, we incurred total community operating expenses of ~~$1,268,386,~~$1,595,801, as compared to ~~$514,286~~$1,074,237 for the three months ended ~~June 30, 2021,~~March 31, 2022, an increase of ~~$754,100,~~$521,564, or ~~146.63%~~48.55%. The increase in community operating expenses was primarily due to ~~$454,831~~$341,459 of additional expenses associated with the ~~twenty-seven~~thirteen properties acquired during and subsequent to ~~June 30, 2021, including additional repairs and maintenance, insurance, utilities, and real estate tax expenses and additional~~March 31, 2022. This includes a $136,615 increase in payroll as we hired additional on-site maintenance staff at several of our new parks to increase efficiencies and decrease contract labor ~~costs.~~costs, a $36,978 increase in recurring bank service charges related to the KeyBank portfolio refinance agreement the Company entered into on September 1, 2022, a $27,079 increase in repairs and maintenance, a $21,134 increase insurance and a $26,877 increase in utilities. Community operating expenses as a percentage of revenues were 37.48% and 35.16% for the three months ending March 31, 2023 and 2022, respectively.

Corporate Payroll and Overhead Expenses. For the three months ended ~~June 30, 2022,~~March 31, 2023, we incurred corporate payroll and overhead expenses of ~~$1,254,918,~~$1,571,454, as compared to ~~$583,733~~$909,078 for the three months ended ~~June 30, 2021,~~March 31, 2022, an increase of ~~$671,185,~~$662,376, or ~~114.98%~~72.86%. This increase was primarily due to increased payroll including corporate salaries and benefits expense of ~~$572,531~~$506,111 due to hiring additional personnel to support our future growth, costs incurred related to a new offering of ~~which approximately $276,000 relates to nonrecurring sign-on bonuses~~$36,000 and ~~separation pay, and approximately $72,000 is~~an increase in stock compensation expense of $60,215 due to ~~additional marketing~~issuance of stock options to officers hired to support our growth. Corporate payroll and ~~travel~~overhead expenses ~~related to capital markets.~~as a percentage of revenues were 36.91% and 29.76% for the three months ending March 31, 2023, and 2022, respectively.

Depreciation Expense. For the three months ended ~~June 30, 2022,~~March 31, 2023, we recorded depreciation of ~~$818,975,~~our assets totaling $1,023,015, as compared to ~~$462,042~~$759,704 for the three months ended ~~June 30, 2021,~~March 31, 2022, an increase of ~~$356,933,~~$263,311, or ~~77.25%~~34.66%. The increase in depreciation was driven by ~~approximately $265,000~~$181,725 related to the ~~depreciation of~~ assets ~~acquired~~ in ~~twenty-seven~~thirteen manufactured housing communities that were acquired during and subsequent to ~~June 30, 2021.~~March 31, 2022. The remaining increase was due to depreciation of capital improvement projects completed subsequent to ~~June 30, 2021,~~March 31, 2022, such as home renovations and new home installations.

Interest Expense. For the three months ended ~~June 30, 2022,~~March 31, 2023, we incurred interest expense of ~~$1,235,048,~~$2,053,455, as compared to ~~$447,306~~$1,101,693 for the three months ended ~~June 30, 2021,~~March 31, 2022, an increase of ~~$787,742,~~$951,762, or ~~176.11%~~86.39%. The increase was primarily due to ~~$367,580~~$347,437 of interest on additional debt incurred to acquire new properties and ~~new~~ homes and $80,770 of nine months of interest related to 2022 acquisition debt subsequent to ~~June 30, 2021, $81,806 of interest on the related party notes issued subsequent to June 30, 2021, and $195,777 of~~March 31, 2022. In addition, there was a $269,706 increase in dividends paid to series C preferred stockholders, which are included in interest expense given the liability treatment of the mandatorily redeemable Series C Cumulative Redeemable Preferred Stock. Interest Expense as a percentage of revenues were 48.23% and 36.06% for the three months ending March 31, 2023, and 2022, respectively.

Net Loss. The factors described above resulted in a net loss of ~~$1,343,976~~$2,117,042, for the three months ended ~~June 30, 2022,~~March 31, 2023, as compared to ~~$68,629~~$789,690 for the three months ended ~~June 30, 2021, an increase~~March 31, 2022, a decrease of ~~$1,275,347,~~$1,327,352, or ~~1,858.32%.~~

~~Comparison of Six Months Ended June 30, 2022 and 2021~~

~~The following table sets forth key components of our results of operations during the six months ended June 30, 2022 and 2021, both in dollars and as~~168.09%, predominately driven by a ~~percentage of our revenues.~~

Six Months Ended
June 30, 2022

Six Months Ended
June 30, 2021

Amount Percent of Revenues Amount Percent of Revenues
Revenue
Rental and related income $ 6,323,799 98.40 % $ 3,440,058 98.14 %
Gross revenues from home sales 102,594 1.60 % 65,244 1.86 %
Total revenues 6,426,393 100.00 % 3,505,302 100.00 %
Community operating expenses
Repair and maintenance 515,819 8.03 % 223,190 6.37 %
Real estate taxes 397,922 6.19 % 199,240 5.68 %
Utilities 475,880 7.41 % 299,312 8.54 %
Insurance 139,297 2.17 % 68,397 1.95 %
General and administrative expense 781,240 12.16 % 304,122 8.68 %
Total community operating expenses 2,310,158 35.95 % 1,094,261 31.22 %
Corporate payroll and overhead 2,163,996 33.67 % 1,164,467 33.22 %
Depreciation expense 1,578,679 24.57 % 903,665 25.78 %
Interest expense 2,336,741 36.36 % 893,354 25.49 %
Refinancing costs 15,751 0.25 % 16,675 0.48 %
Cost of home sales 154,734 2.41 % - -
Total expenses 8,560,059 133.20 % 4,072,422 116.18 %
Other Income - - 139,300 3.97 %
Net loss $ (2,133,666 ) (33.20 )% $ (427,820 ) (12.20 )%
Variable interest entity share of net income (loss) (410,485 ) (6.39 )% 173,433 4.95 %
Net loss attributable to our company $ (1,723,181 ) (26.81 )% $ (601,253 ) (17.15 )%
Preferred stock dividends and put option value accretion 1,096,424 17.06 % 1,069,674 30.52 %
Net loss attributable to common stockholders $ (2,819,605 ) (43.88 )% $ (1,670,927 ) (47.67 )%

~~Revenues~~~~. For the six months ended June 30, 2022, we had total revenues of $6,426,393, as compared to $3,505,302 for the six months ended June 30, 2021, an increase of $2,921,091, or 83.33%. The~~65.80% increase in ~~revenues between the periods~~total expenses, which was primarily due to $2,378,813 of rental income from the acquisition of twenty-seven manufactured housing communities subsequent to June 30, 2021 and increased property sales of $37,350. The remaining increase was due to occupancy and rental rate increases.

~~Community Operating Expenses~~. For the six months ended June 30, 2022, we had total community operating expenses of $2,310,158, as compared to $1,094,261 for the six months ended June 30, 2021, an increase of $1,215,897, or 111.12%. Thepartially offset by a 39.36% increase in community operating expenses was primarily due to additional expenses of $887,390 associated with the twenty-seven properties acquired subsequent to June 30, 2021, including additional repairs and maintenance, insurance, utilities, and real estate tax expenses and we hired additional on-site maintenance staff at several of our new parks to increase efficiencies and decrease contract labor costs.

~~Corporate Payroll and Overhead Expenses~~. For the six months ended June 30, 2022, we had corporate payroll and overhead expenses of $2,163,996, as compared to $1,164,467 for the six months ended June 30, 2021, an increase of $999,529, or 85.84%. This increase was primarily due to increased payroll including corporate salaries and benefits expense of $451,793, one-time bonuses of $65,000 and separation payments of approximately $226,000, an increase in stock compensation expense of $49,114 due to issuance of stock options to officers hired to support our growth, approximately $161,000 of additional marketing and travel expenses, and $51,777 of pursuit costs written off in relation to abandoned potential acquisitions and development deals.

~~Depreciation Expense~~. For the six months ended June 30, 2022, we had depreciation expense of $1,578,679, as compared to $903,665 for the six months ended June 30, 2021, an increase of $675,014, or 74.70%. The increase in depreciation was driven by approximately $545,000 related to the acquisition of depreciable assets in twenty-seven manufactured housing communities subsequent to June 30, 2021. The remaining increase was due to depreciation of capital improvement projects completed subsequent to June 30, 2021, such as home renovations and new home installations.

~~Interest Expense~~. For the six months ended June 30, 2022, we had interest expense of $2,336,741, as compared to $893,354 for the six months ended June 30, 2021, an increase of $1,443,387, or 161.57%. The increase was primarily due to $657,499 of interest on additional debt incurred to acquire new properties and new homes subsequent to June 30, 2021, $163,099 of interest on the related party notes issued during the fourth quarter of 2021 described below, an increase in amortization of debt issuance costs of $143,902, and $330,922 of dividends to series C preferred stockholders, which are included in interest expense given the liability treatment of the mandatorily redeemable Series C Cumulative Redeemable Preferred Stock.total revenues.

~~Other Income~~. For the six months ended June 30, 2022, we had other income of $0 compared to $139,300 for the six months ended June 30, 2021 recognized upon the forgiveness of our Paycheck Protection Program loan by the Small Business Administration in June 2021.

~~Net Loss~~. The factors described above resulted in a net loss of $2,133,666 for the six months ended June 30, 2022, as compared to $427,820 for the six months ended June 30, 2021, an increase of $1,705,846, or 398.73%.

Liquidity and Capital Resources

Our principal demands for cash are operating and administrative expenses, dividends on our preferred stock, debt service payments, capital expenditures to improve the properties within our portfolio, and community acquisitions.

As of ~~June 30, 2022,~~March 31, 2023, we ~~had~~held cash and cash equivalents of ~~$3,070,280, including~~$5,710,926 and restricted cash of $810,280. In addition to cash generated through operations, we use a variety of sources to fund our cash needs, including acquisitions and sales of properties. We intend to continue to increase our real estate investments. Our business plan includes acquiring communities that yield more than our cost of funds and then investing in physical improvements, including adding rental homes onto otherwise vacant sites. Our ability to continue acquiring communities are dependent on our ability to raise capital. There is no guarantee that any of these additional opportunities will materialize or that we will be able to take advantage of such opportunities. The growth of our real estate portfolio depends on the availability of suitable properties which meet our investment criteria and appropriate financing.

~~We will require additional funding to finance the growth of our current and expected future operations as well as to achieve our strategic objectives.~~$5,222,057. We believe that our current available cash along with anticipated revenues is sufficient to meet our cash needs for the near future. ~~There can be no assurance that financing will be available in amounts or terms acceptable to us, if at all.~~

We plan to meet our short-term liquidity requirements for the next twelve months, generally through available cash, ~~as well as~~ cash provided by operating activities, and with funds available to us under the existing two ~~$2 million~~$2,000,000 revolving promissory notes from our officers, described below. During the six months ended June 30, 2022, we entered into an agreement with a lender to potentially refinance several of our loans that would provide additional liquidity. As of the date of this report,Additionally, we have ~~not entered into~~ a ~~binding agreement and~~number of unencumbered homes which are ~~still negotiating loan proceeds and terms of the new loans.~~available to be sold to generate liquidity which became available after KeyBank portfolio refinance in 2022.

Proceeds from issuance of Series C Preferred Stock and cash held in escrow with our lenders will fund our capital improvement projects and acquisitions. To the extent that funds or appropriate communities are not available, fewer acquisitions and capital improvements will be made.

We have incurred net losses each year since inception and have experienced slightly negative cash flows from operations during the first quarter ended March 31, 2023. We are in an acquisitive, growth stage whereby we have doubled the number of home sites in our portfolio of manufactured housing communities over the past two years. We have incurred additional corporate payroll and overhead and interest expense in order to accomplish such growth which has driven losses and used operating cash flow. We acquire communities and invest in physical improvements, implement operational efficiencies to cut costs, work to improve occupancy and collections, and increase rents based on each respective market all to stabilize the acquired communities to their full potential.

Summary of Cash Flow

The following table provides detailed information about our net cash flow for the period indicated:

Cash Flow

Six Months Ended
June 30,
2022 2021
Net cash provided by operating activities $ 26,425 $ 1,337,264
Net cash used in investing activities (5,512,057 ) (1,382,525 )
Net cash provided by financing activities 6,449,583 166,208
Net increase in cash and cash equivalents 963,951 120,947
Cash and cash equivalents at beginning of period 2,106,329 1,988,857
Cash and cash equivalents at end of period $ 3,070,280 $ 2,109,804

	Three Months Ended March 31,
	2023			2022
Net cash used in operating activities	$	(500,708	)	$	(101,818	)
Net cash used in investing activities		(3,000,372	)		(2,029,556	)
Net cash provided by financing activities		4,028,448			2,121,744
Net increase (decrease) in cash, cash equivalent and restricted cash		527,368			(9,630	)
Cash, cash equivalents and restricted cash at beginning of period		10,405,615			2,106,329
Cash, cash equivalents and restricted cash at end of period	$	10,932,983		$	2,096,699

Net cash ~~provided by~~used in operating activities was ~~$26,425~~$500,708 for the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, as compared to ~~$1,337,264~~$101,818 for the ~~six~~three months ended ~~June 30, 2021.~~March 31, 2022. For the ~~six~~three months ended ~~June 30,~~March 31, 2023, the net loss of $2,117,042 offset in part by non-cash depreciation expense of $1,023,015 and a decrease in accrued liabilities of $303,477 related to the payment of accrued 2022 employee bonuses, guarantee fees, and accounting fees were the primary drivers of the net cash used in operating activities. For the three months ended March 31, 2022, the net loss of ~~$2,133,666~~$789,690 and decrease in accrued liabilities of ~~$444,026~~$728,086 related to the payment of accrued 2021 employee bonuses, guarantee fees, and real estate taxes in January 2022, offset by depreciation in the amount of ~~$1,578,679,~~$759,704, amortization of debt issuance costs in the amount of ~~$306,230,~~$162,328, and ~~an increase~~a decrease in other assets of ~~$316,864,~~$269,602 were the primary drivers of the net cash ~~provided by operating activities. For the six months ended June 30, 2021, the net loss of $427,820, a decrease~~used in other assets of $619,910, and debt extinguishment of $139,300, offset by depreciation in the amount of $903,665 and an increase in accrued liabilities of $37,232, were the primary drivers of the net cash provided by operating activities.

Net cash used in investing activities was ~~$5,512,057~~$3,000,372 for the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, as compared to ~~$1,382,525~~$2,029,556 for the ~~six~~three months ended ~~June 30, 2021.~~March 31, 2022. Net cash used in investing activities for the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023, consisted of ~~purchases~~capital improvements of ~~investment properties in the amount of $3,697,135,~~$446,055, payment of related acquisition costs of ~~$296,170~~$107,832 and advanced pursuit costs and deposits for potential deals of ~~$113,964,~~$231,141, purchases of investment properties in the amount of $2,570,000 and offset by proceeds received from sale of homes of $112,300. Net cash used in investing activities for the three months ended March 31, 2022, consisted of purchase of investment properties in the amount of $1,050,000 and payment of related acquisition costs of $163,578, as well as cash paid for capital improvements in the amount of ~~$1,507,381, offset by proceeds received from sale~~$764,907 and cash paid for advanced pursuit costs and deposits of homes of $102,594. Net cash used in investing activities for the six months ended June 30, 2021 consisted of capital improvements of $697,769 and the purchase of investment properties of $750,000, offset by proceeds from home sales of $65,244.$66,071.

Net cash provided by financing activities was ~~$6,449,583~~$4,028,448 for the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, as compared to ~~$166,208~~$2,121,744 for the ~~six~~three months ended ~~June 30, 2021.~~March 31, 2022. For the ~~six~~three months ended ~~June 30,~~March 31, 2023, net cash provided by financing activities consisted primarily of proceeds from issuance of preferred stock of $3,874,917 and proceeds received from the related payment of lines of credit of $1,329,417, offset by the payment of debt costs and Series C Preferred Stock costs of $636,614. For the three months ended March 31, 2022, net cash provided by financing activities consisted primarily of proceeds from issuance of preferred stock of ~~$6,297,617~~$4,289,444 and proceeds from related party ~~lines~~line of credit of ~~$4,700,000,~~$700,000, offset by repayment of notes payable of ~~$416,434, prepayment of debt issuance costs related to upcoming potential portfolio refinance of $1,761,363,~~$1,699,464, payment of mortgage costs and financing costs recorded as debt discount of ~~$1,263,667,~~$847,499, and ~~preferred stock~~Series A and Series B Preferred Stock dividends of ~~$485,570. Additionally, the~~$242,785. The Company repaid the Charlotte 3 Park MHP LLC note payable of $1,500,000 on March 1, ~~2022 and the~~2022. This community was subsequently refinanced on April 14, 2022 for $1,875,000. For the six months ended June 30, 2021, net cash provided by financing activities consisted of proceeds from the issuance of preferred stock of $1,087,485, offset by preferred share dividends of $462,898, repayment of notes payable $292,698, and payment of mortgage costs recorded as debt discount of $128,052.2022.

Regulation A Offering

On June 11, 2021, we launched a new offering under Regulation A of Section 3(6) of the Securities Act for Tier 2 offerings, pursuant to which we are offering up to 47,000 shares of Series C Preferred Stock at an offering price of $1,000 per share for a maximum offering amount of ~~$47 million.~~$47,000,000 (the “Regulation A Offering”).

During the ~~six~~three months ended ~~June 30, 2022, the Company~~March 31, 2023, we sold an aggregate of ~~6,303~~3,875 shares of Series C ~~Cumulative Redeemable~~ Preferred Stock for total gross proceeds of ~~$6,297,617.~~$3,874,917. After deducting a placement fee and ~~other expenses, the Company~~broker dealer commissions, we received net proceeds of ~~$5,877,935.~~$3,613,371. In addition to the placement fee and broker dealer commissions, we capitalized an additional $29,326 of other issuance costs associated with the offering which, net of amortization expense, offset with the net proceeds on the balance sheet.

Promissory Notes

~~The Company has~~We have issued promissory notes payable to lenders related to the acquisition of ~~its~~our manufactured housing communities and mobile homes. The interest rates on ~~these~~outstanding promissory notes range from ~~3.250%~~4% to ~~5.875%~~8% with 5 to 30 years principal amortization. Three of the promissory notes had an initial 12 month, one an initial 18 month, six an initial 24 month, six an initial 36 month, one an initial 60 month, and one promissory note a 180 month period of interest only payments. The promissory notes are secured by the real estate assets and ~~twenty-one~~thirty-three loans totaling ~~$45,308,733~~$80,752,977 are guaranteed by Raymond M. Gee.

Maturity
Date Interest
Rate Balance
June 30,
2022 Balance
December 31,
2021
Pecan Grove MHP LLC 02/22/29 5.250 % $ 2,933,462 $ 2,969,250
Azalea MHP LLC 03/01/29 5.400 % 811,027 790,481
Holly Faye MHP LLC 03/01/29 5.400 % 546,753 579,825
Chatham MHP LLC 04/01/24 5.875 % 1,679,979 1,698,800
Lakeview MHP LLC 03/01/29 5.400 % 1,789,063 1,805,569
B&D MHP LLC 05/02/29 5.500 % 1,755,502 1,779,439
Hunt Club MHP LLC 01/01/33 3.430 % 2,374,578 2,398,689
Crestview MHP LLC 12/31/30 3.250 % 4,617,309 4,682,508
Maple Hills MHP LLC 12/01/30 3.250 % 2,308,655 2,341,254
Springlake MHP LLC 12/10/26 4.750 % 4,016,250 4,016,250
ARC MHP LLC 01/01/30 5.500 % 3,770,365 3,809,742
Countryside MHP LLC 03/20/50 5.500 % 1,669,702 1,684,100
Evergreen MHP LLC 04/01/32 3.990 % 1,104,642 1,115,261
Golden Isles MHP LLC 03/31/26 4.000 % 787,500 787,500
Anderson MHP LLC* 07/10/26 5.210 % 2,153,807 2,153,807
Capital View MHP LLC* 09/10/26 5.390 % 817,064 817,064
Hidden Oaks MHP LLC* 09/10/26 5.330 % 823,440 823,440
North Raleigh MHP LLC 11/01/26 4.750 % 5,247,746 5,304,409
Charlotte 3 Park MHP LLC (Dixie, Driftwood, Meadowbrook)⁽¹⁾ 03/01/22 5.000 % - 1,500,000
Charlotte 3 Park MHP LLC (Dixie, Driftwood, Meadowbrook)* 11/01/28 4.250 % 1,875,000 -
Carolinas 4 MHP LLC (Asheboro, Morganton)* 01/10/27 5.300 % 3,105,070 3,105,070
Sunnyland MHP LLC* 02/10/27 5.370 % 1,123,980 -
Warrenville MHP LLC* 03/10/27 5.590 % 1,218,870 -
Gvest Finance LLC (B&D homes) 05/01/24 5.000 % 634,733 657,357
Gvest Finance LLC (Countryside homes) 03/20/50 5.500 % 1,276,834 1,287,843
Gvest Finance LLC (Golden Isles homes) 03/31/36 4.000 % 787,500 787,500
Gvest Anderson Homes LLC* 07/10/26 5.210 % 1,992,015 2,006,193
Gvest Capital View Homes LLC* 09/10/26 5.390 % 342,936 342,936
Gvest Hidden Oaks Homes LLC* 09/10/26 5.330 % 411,063 416,560
Gvest Carolinas 4 Homes LLC (Asheboro, Morganton)* 01/10/27 5.300 % 1,282,349 1,294,930
Gvest Sunnyland Homes LLC* 02/10/27 5.370 % 636,020 -
Gvest Warrenville Homes LLC* 03/10/27 5.590 % 1,221,130 -
Total Notes Payable 55,114,344 50,955,777
Discount Direct Lender Fees (2,390,363 ) (2,064,294 )
Total Net of Discount $ 52,723,981 $ 48,891,483

	Maturity Date	Interest Rate			Interest Only Period (Months)		Balance March 31, 2023			Balance December 31, 2022
Pecan Grove MHP LLC⁽¹⁾⁽²⁾	9/1/2032		4.870	%		60	$	4,489,000.00		$	4,489,000
Azalea MHP LLC⁽¹⁾⁽²⁾	9/1/2032		4.870	%		60		1,830,000			1,830,000
Holly Faye MHP LLC⁽¹⁾⁽²⁾	9/1/2032		4.870	%		60		1,608,000			1,608,000
Chatham MHP LLC⁽¹⁾⁽²⁾	9/1/2032		4.870	%		60		2,263,000			2,263,000
Lakeview MHP LLC⁽¹⁾⁽²⁾	9/1/2032		4.870	%		60		3,229,000			3,229,000
B&D MHP LLC⁽¹⁾⁽²⁾	9/1/2032		4.870	%		60		2,887,000			2,887,000
Hunt Club MHP LLC⁽¹⁾⁽²⁾	9/1/2032		4.870	%		60		2,756,000			2,756,000
Crestview MHP LLC⁽¹⁾⁽²⁾	9/1/2032		4.870	%		60		4,625,000			4,625,000
Maple Hills MHP LLC⁽¹⁾⁽²⁾	9/1/2032		4.870	%		60		2,570,000			2,570,000
Springlake MHP LLC⁽¹⁾⁽²⁾	9/1/2032		4.870	%		60		6,590,000			6,590,000
ARC MHP LLC⁽¹⁾⁽²⁾	9/1/2032		4.870	%		60		3,687,000			3,687,000
Countryside MHP LLC⁽¹⁾⁽²⁾	9/1/2032		4.870	%		60		4,343,000			4,343,000
Evergreen MHP LLC ⁽¹⁾⁽²⁾	9/1/2032		4.870	%		60		2,604,000			2,604,000
Golden Isles MHP LLC⁽¹⁾⁽²⁾	9/1/2032		4.870	%		60		1,987,000			1,987,000
Anderson MHP LLC⁽¹⁾⁽²⁾	9/1/2032		4.870	%		60		5,118,000			5,118,000
Capital View MHP LLC⁽¹⁾⁽²⁾	9/1/2032		4.870	%		60		829,000			829,000
Hidden Oaks MHP LLC⁽¹⁾⁽²⁾	9/1/2032		4.870	%		60		764,000			764,000
North Raleigh MHP LLC⁽¹⁾⁽²⁾	9/1/2032		4.870	%		60		5,279,000			5,279,000
Charlotte 3 Park MHP LLC (Dixie) ^(1)(2)(3)	9/1/2032		4.870	%		60		485,000			485,000
Charlotte 3 Park MHP LLC (Driftwood) ⁽¹⁾⁽²⁾	9/1/2032		4.870	%		60		274,000			274,000
Carolinas 4 MHP LLC (Asheboro) ⁽¹⁾⁽²⁾	9/1/2032		4.870	%		60		1,374,000			1,374,000
Carolinas 4 MHP LLC (Morganton) ⁽¹⁾⁽²⁾	9/1/2032		4.870	%		60		1,352,000			1,352,000
Sunnyland MHP LLC⁽¹⁾⁽²⁾	9/1/2032		4.870	%		60		1,057,000			1,057,000
Warrenville MHP LLC⁽¹⁾	3/10/2027		5.590	%		36		1,218,870			1,218,870
Spaulding MHP LLC	7/22/2043		WSJ Prime + 1	%		12		1,600,000			1,600,000
Solid Rock MHP LLC	6/30/2032		5.000	%		12		925,000			925,000
Red Fox MHP LLC	8/1/2032		5.250	%		24		2,250,000			2,250,000
Statesville MHP LLC – land⁽¹⁾	9/13/2025		SOFR + 2.35	%		36		1,519,925			1,519,925
Timberview MHP LLC – land⁽¹⁾	9/13/2025		SOFR + 2.35	%		36		1,418,075			1,418,075
Northview MHP LLC - land (Seller Finance)	9/15/2027		6.000	%		60		792,654			792,654
Statesville, Northview, Timberview MHP LLC - homes (Seller Finance)	9/15/2027		6.000	%		60		407,345			407,345
Glynn Acres MHP LLC	11/1/2042		6.000	%		0		892,150			898,052
Wake Forest MHP LLC (Cooley’s Country road)⁽¹⁾	12/10/2027		7.390	%		36		3,038,914			3,038,914
Mobile Cottage MHP LLC	12/20/2027		5.000	%		30		400,000			400,000
Gvest Finance LLC (B&D homes)	5/1/2024		5.000	%		-		604,757			614,809
Gvest Finance LLC (Golden Isles homes)	3/31/2031		4.000	%		120		684,220			684,220
Warrenville Gvest Homes LLC⁽¹⁾	3/10/2027		5.590	%		36		1,221,130			1,221,130
Gvest Wake Forest 2 Homes LLC (Cooley’s, Country Road home)⁽¹⁾	12/10/2027		7.390	%		36		561,086			561,086
Merritt Place MHP LLC	1/25/2024		WSJ Prime + 1	%		12		1,680,000			-
Country Aire MHP LLC⁽¹⁾	9/13/2025		SOFR + 2.35	%		36		3,500,000			-
Total Notes Payable							$	84,714,126		$	79,550,080
Discount Direct Lender Fees								(3,772,073	)		(3,666,214	)
Total Net of Discount							$	80,942,053		$	75,883,866

⁽¹⁾

The ~~Company~~notes indicated above are subject to certain financial covenants.

⁽²⁾

On September 1, 2022, we, through our wholly owned subsidiaries, entered into twenty-three loan agreements with KeyBank National Association (“KeyBank”) and Fannie Mae for a total principal balance of $62,000,000. The loan proceeds were primarily used to pay off third party notes and line of credit with various other lenders totaling approximately $54,000,000, promissory note issued to Metrolina Loan Holdings, LLC for $1,500,000 and a revolving promissory Note issued to Gvest Real Estates Capital LLC for $2,000,000. KeyBank withheld approximately $4,000,000 in escrow for planned capital projects to improve the financed communities which is included in restricted cash. We may prepay the notes in part or in full subject to prepayment penalties if repaid before May 31, 2032, and without penalty if repaid on or subsequent to that date. The loans are secured by the real estate, which predominately excludes mobile homes, and are guaranteed by us and Raymond M. Gee. We capitalized $2,842,213 of debt issuance costs in connection with this refinancing including a $1,000,000 accrued guaranty fee owed to Raymond M. Gee to be paid at a later date.

(3)

We repaid the Charlotte 3 Park MHP LLC note payable of $1,500,000 on March 1, 2022, and recognized refinancing cost expense totaling $15,751. This community was refinanced on April 14, 2022, with a different lender and the Company capitalized $258,023 of debt issuance costs related to the new note.

~~The notes indicated above are subject to certain financial covenants.~~

Lines of Credit – Variable Interest Entities

Facility	Borrower		Community		Maturity Date		Interest Rate		Maximum Credit Limit		Balance June 30, 2022			Balance December 31, 2021			Borrower	Community	Maturity Date	Interest Rate	Maximum Credit Limit		Balance March 31, 2023			Balance December 31, 2022
Occupied Home Facility⁽¹⁾		Gvest Homes I LLC		ARC, Crestview, Maple		01/01/30		8.375%	$	20,000,000	$	2,484,999		$	2,517,620		Gvest Homes I LLC	ARC, Crestview, Maple, Countryside	01/01/30	8.375%	$	20,000,000	$	3,755,107		$	2,424,896
Multi-Community Rental Home Facility		Gvest Finance LLC		ARC, Golden Isles		Various ⁽³⁾		Greater of 3.25% or Prime, + 375 bps	$	4,000,000	$	1,218,259		$	838,000		Gvest Finance LLC	ARC, Golden Isles, Springlake,	Various ⁽²⁾	Greater of 3.25% or Prime, + 375 bps	$	5,000,000	$	2,490,623		$	2,561,380
Multi-Community Floorplan Home Facility⁽²⁾		Gvest Finance LLC		Golden Isles, Springlake, Sunnyland, Crestview		Various ⁽³⁾		LIBOR + 6 – 8% based on days outstanding	$	2,000,000	$	1,768,849		$	1,104,255		Gvest Finance LLC	Golden Isles, Springlake, Sunnyland, Crestview, Meadowbrook	Various ⁽²⁾	LIBOR + 6 – 8% based on days outstanding	$	4,000,000	$	1,585,065		$	1,383,043
Springlake Home Facility⁽²⁾		Gvest Finance LLC		Springlake		12/10/26		6.75%	$	3,300,000	$	2,489,044		$	1,892,481
Total Lines of Credit - VIEs											$	7,961,151		$	6,352,356								$	7,830,795		$	6,369,319
Discount Direct Lender Fees											$	(173,508	)	$	(151,749	)							$	(205,877	)	$	(160,372	)
Total Net of Discount											$	7,787,643		$	6,200,607								$	7,624,918		$	6,208,947

(1)

(2)	Payments on the Multi-Community Floorplan Home Facility advances are interest only until each advance is paid off or transferred to the Multi-Community Rental Home Facility and payments on the Springlake Home Facility are interest only for the first six months.

~~(3)~~

Metrolina Promissory Note

On October 22, 2021, the Company issued a promissory note to Metrolina Loan Holdings, LLC, ~~(“Metrolina”),~~ a significant stockholder, in the principal amount of $1,500,000. On September 2, 2022, the Company repaid the full outstanding balance of the loan with proceeds from the KeyBank portfolio refinance. The note ~~bears~~bore interest at a rate of 18% per annum and ~~matures~~was set to mature on April 1, 2023. During the first six months of the note, any prepayment would have required the Company to pay a yield maintenance fee equal to six months of interest. Thereafter, the loan may be prepaid at any time without penalty or fee. The note iswas guaranteed by Raymond M. Gee. As of ~~June 30, 2022~~March 31, 2023, and December 31, ~~2021, the~~2022, there was no outstanding balance on this ~~note was $1,500,000. During the six months ended June 30, 2022 and 2021, interest expense totaled $133,890 and $0, respectively.~~note. During the three months ended ~~June 30,~~March 31, 2022, ~~and 2021,~~ interest expense ~~totaled $67,315 and $0, respectively.~~recognized was $66,575.

Gvest Revolving Promissory Note

On December 27, 2021, ~~the Company~~we issued a revolving promissory note to Gvest Real Estate Capital, LLC, an entity whose sole owner is Raymond M. Gee, ~~the Company’s~~our chairman and chief executive officer, pursuant to which ~~the Company~~we may borrow up to $1,500,000 on a revolving basis for working capital or acquisition purposes. ~~On the same date, the Company borrowed $150,000. During the six months ended June 30, 2022, the maximum credit limit~~There was no balance outstanding on this note ~~was increased to $2,000,000 and the Company borrowed an aggregate~~as of ~~$2,700,000 and repaid $850,000.~~March 31, 2023. As of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021, the~~2022, there was no outstanding balance on this ~~note was $2,000,000 and $150,000, respectively.~~note. This note ~~has~~had a five-year term and iswas interest-only based on ana 15% annual rate through the maturity date and iswas unsecured. During the three ~~and six~~ months ended ~~June 30,~~March 31, 2022, ~~and 2021,~~ interest expense ~~totaled $13,657 and $0 and $28,375 and $0, respectively.~~ recognized was $14,718.

NAV Real Estate LLC Promissory Note

On June 29, 2022, ~~the Company~~we issued a revolving promissory note to NAV RE, LLC, an entity whose ~~sole owner is~~owners are Adam Martin, ~~the Company’s~~our chief investment officer, and his spouse, pursuant to which ~~the Company~~we may borrow up to $2,000,000 on a revolving basis for working capital or acquisition purposes. On the same date, ~~the Company~~we borrowed $2,000,000. As of ~~June 30,~~March 31, 2023, and December 31, 2022, the outstanding principal balance on this note was ~~$2,000,000 .~~$2,000,000. This note has a five-year term and is interest-only based on ana 15% annual rate through the maturity date and is unsecured. During the three ~~and six~~ months ended ~~June 30, 2022,~~March 31, 2023, interest expense totaled ~~$833.~~$75,000.

Off-Balance Sheet Arrangements

As of ~~June 30, 2022,~~March 31, 2023, we had no off-balance sheet arrangements.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of ~~these~~the unaudited condensed consolidated financial statements requires our management to make estimates and ~~judgments~~assumptions that affect the reported amounts of assets, ~~and~~ liabilities, revenues and expenses, and related disclosure of contingent assets and ~~liabilities at~~liabilities. On a regular basis, we evaluate these estimates. These estimates are based on management’s historical industry experience and on various other assumptions that are believed to be reasonable under the ~~date of our unaudited condensed consolidated financial statements.~~circumstances. Actual results may differ from these ~~estimates under different assumptions or conditions.~~estimates.

~~Critical~~For a description of the accounting policies ~~are defined as those~~ that, in management’s opinion, involve the most significant application of judgment or involve complex estimation and ~~potentially~~which could, ~~result~~if different judgment or estimates were made, materially affect our reported financial position, results of operations, or cash flows, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates” in ~~materially different results under different assumptions~~our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities and conditions. Management believes the following critical accounting policies are affected by our more significant judgments and estimates used in the preparation of our unaudited condensed consolidated financial statements.Exchange Commission on March 29, 2023.

~~Revenue Recognition~~ Mobile home rental and related income is generated from lease agreements for our sites and homes. The lease component of these agreements is accounted for under Topic 842 of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) for leases.

Under ASC 842, we must assess on an individual lease basis whether it is probable that we will collect the future lease payments. We consider the tenant’s payment history and current credit status when assessing collectability. When collectability is not deemed probable, we write-off the tenant’s receivables, including straight-line rent receivable, and limit lease income to cash received.

~~Our revenues primarily consist of rental revenues and tenant fee income. We have the following revenue sources and revenue recognition policies:~~

●

~~Rental revenues include revenues from the leasing land lot or a combination of both, the mobile home and land at our properties to tenants.~~

●

Revenues from the leasing of land lot or a combination of both, the mobile home and land at our properties to tenants include (i) lease components, including land lot or a combination of both, the mobile home and land, and (ii) reimbursement of utilities and account for the components as a single lease component in accordance with ASC 842.

●

Revenues derived from fixed lease payments are recognized on a straight-line basis over the non-cancelable period of the lease. We commence rental revenue recognition when the underlying asset is available for use by the lessee. Revenue derived from the reimbursement of utilities are generally recognized in the same period as the related expenses are incurred. Our leases are month-to-month.

Revenue from sales of manufactured homes is recognized in accordance with the core principle of ASC 606, at the time of closing when control of the home transfers to the customer. After closing of the sale transaction, we generally have no remaining performance obligation.

~~Acquisitions~~. We account for acquisitions as asset acquisitions in accordance with ASC 805, “Business Combinations,” and allocate the purchase price of the property based upon the fair value of the assets acquired, which generally consist of land, site and land improvements, buildings and improvements and rental homes. We allocate the purchase price of an acquired property generally determined by internal evaluation as well as third-party appraisal of the property obtained in conjunction with the purchase.

~~Variable Interest Entities~~. In December 2020, the Company entered into a property management agreement with Gvest Finance LLC, a company owned and controlled by the Company’s parent company, Gvest Real Estate Capital LLC, an entity whose sole owner is Raymond M. Gee, the Company’s chairman and chief executive officer, and has subsequently entered into property management agreements with Gvest Homes I LLC, Gvest Anderson Homes LLC, Gvest Capital View Homes LLC, Gvest Hidden Oaks Homes LLC, Gvest Springlake Homes LLC, Gvest Carolinas 4 Homes LLC, Gvest Sunnyland Homes LLC and Gvest Warrenville Homes LLC, which are all wholly owned subsidiaries of Gvest Finance LLC. Under the property management agreements, the Company manages the homes owned by the VIEs and the VIEs remit to the Company all income, less any sums paid out for operational expenses and debt service but retain 5% of the debt service payment as a reserve.

A company with interests in a VIE must consolidate the entity if the company is deemed to be the primary beneficiary of the VIE; that is, if it has both (1) the power to direct the economically significant activities of the entity and (2) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE. Such a determination requires management to evaluate circumstances and relationships that may be difficult to understand and to make a significant judgment, and to repeat the evaluation at each subsequent reporting date. Primarily due to the Company’s common ownership by Mr. Gee, its power to direct the activities of these entities that most significantly impact their economic performance, and the fact that the Company has the obligation to absorb losses or the right to receive benefits from these entities that could potentially be significant to these entities, the entities listed above are considered to be VIEs in accordance applicable GAAP.

~~Investment Property and Depreciation~~. Investment real property and equipment are carried at cost. Depreciation of buildings, improvements to sites and buildings, rental homes, equipment, and vehicles is computed principally on the straight-line method over the estimated useful lives of the assets (ranging from 3 to 25 years). Land development costs are not depreciated until they are put in use, at which time they are capitalized as land improvements. Interest Expense pertaining to Land Development Costs are capitalized. Maintenance and Repairs are charged to expense as incurred and improvements are capitalized. The costs and related accumulated depreciation of property sold or otherwise disposed of are removed from the financial statement and any gain or loss is reflected in the current period’s results of operations.

~~Impairment Policy~~. The Company applies FASB ASC 360-10, “Property, Plant & Equipment,” to measure impairment in real estate investments. Rental properties are individually evaluated for impairment when conditions exist which may indicate that it is probable that the sum of expected future cash flows (on an undiscounted basis without interest) from a rental property is less than the carrying value under its historical net cost basis. These expected future cash flows consider factors such as future operating income, trends and prospects as well as the effects of leasing demand, competition and other factors. Upon determination that a permanent impairment has occurred, rental properties are reduced to their fair value. For properties to be disposed of, an impairment loss is recognized when the fair value of the property, less the estimated cost to sell, is less than the carrying amount of the property measured at the time there is a commitment to sell the property and/or it is actively being marketed for sale. A property to be disposed of is reported at the lower of its carrying amount or its estimated fair value, less its cost to sell. Subsequent to the date that a property is held for disposition, depreciation expense is not recorded. There was no impairment during the three and six months ended June 30, 2022 and 2021.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rule 13a-15(e) of the Exchange Act, our management has carried out an evaluation, with the participation and under the supervision of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as of ~~June 30, 2022.~~March 31, 2023. Based upon, and as of the date of this evaluation, our chief executive officer and chief financial officer determined that, because of the material weaknesses described in Item 9A “Controls and Procedures” of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021~~2022 and further referenced below, which, due to employee turnover, we are still in the process of remediating as of ~~June 30, 2022,~~March 31, 2023, our disclosure controls and procedures were not effective.

During its evaluation of the effectiveness of our internal control over financial reporting as of ~~June 30, 2022,~~March 31, 2023, our management identified the following material weaknesses:

●

We lack proper segregation of duties due to the limited number of employees within the accounting department.

●

We lack effective closing procedures.

To mitigate the current limited resources and limited employees, we rely heavily on direct management oversight of transactions, along with the use of legal and accounting professionals. As we grow, we expect to increase our number of employees, which will enable us to implement adequate segregation of duties within the internal control framework.

To cure the foregoing material weakness, we have taken or plan to take the following remediation measures:

●

In addition to new hires in 2022, during the first quarter ended March 31, 2023, we hired an accounts payable manager and a senior SEC reporting analyst who both assist with the functions of the accounting department. Additionally, on January 16, 2023, Vira Turchinyak was appointed to the position of Chief Financial Officer who brings 11 years of experience serving public companies in the real estate industry. These hires have led to more segregation of duties and levels of review in our day-to-day accounting functions, reporting, and closing procedures which historically have been material weaknesses for us in internal controls.

●

We have added and plan to continue to add additional employees to assist in the financial closing procedures.

●

As necessary, we will continue to engage consultants or outside accounting firms to ensure proper accounting for our consolidated financial statements.

We intend to complete the remediation of the material weaknesses discussed above as soon as practicable, but we can give no assurance that we will be able to do so. Designing and implementing an effective disclosure controls and procedures is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to devote significant resources to maintain a financial reporting system that adequately satisfies our reporting obligations. The remedial measures that we have taken and intend to take may not fully address the material weaknesses that we have identified, and material weaknesses in our disclosure controls and procedures may be identified in the future. Should we discover such conditions, we intend to remediate them as soon as practicable. We are committed to taking appropriate steps for remediation, as needed.

Changes in Internal Controls Over Financial Reporting

We regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.

~~There~~Other than in connection with the implementation of the remedial measures described above, there were no changes in our internal controls over financial reporting during the ~~second~~first quarter of fiscal year ~~2022~~2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

~~OTHER INFORMATION~~

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these, or other matters, may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

ITEM 1A. RISK FACTORS.

Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

~~We have not~~On March 7, 2023, the Company completed an additional closing of the Regulation A Offering, pursuant to which the Company sold ~~any equity securities during~~an aggregate of 547 shares of Series C Preferred Stock for total gross proceeds of $547,000. After deducting the ~~three months ended June 30, 2022 that were not previously disclosed in a current report on Form 8-K that was filed during~~Dealer Manager’s fees, the ~~quarter.~~Company received net proceeds of approximately $510,478.

On March 21, 2023, the Company completed an additional closing of the Regulation A Offering, pursuant to which the Company sold an aggregate of 747 shares of Series C Preferred Stock for total gross proceeds of $747,000. After deducting the Dealer Manager’s fees, the Company received net proceeds of approximately $696,578.

On April 4, 2023, the Company completed an additional closing of the Regulation A Offering, pursuant to which the Company sold an aggregate of 437 shares of Series C Preferred Stock for total gross proceeds of $437,000. After deducting the Dealer Manager’s fees, the Company received net proceeds of approximately $407,503.

On April 11, 2023, the Company completed an additional closing of the Regulation A Offering, pursuant to which the Company sold an aggregate of 295 shares of Series C Preferred Stock for total gross proceeds of $295,000. After deducting the Dealer Manager’s fees, the Company received net proceeds of approximately $275,088.

On April 18, 2023, the Company completed an additional closing of the Regulation A Offering, pursuant to which the Company sold an aggregate of 141 shares of Series C Preferred Stock for total gross proceeds of $140,750. After deducting the Dealer Manager’s fees, the Company received net proceeds of approximately $131,249.

During the three months ended ~~June 30, 2022,~~March 31, 2023, we did not repurchase any shares of our common stock.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

We have no information to disclose that was required to be in a report on Form 8-K during the second quarter of fiscal year 2022 but was not reported. There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.None.

ITEM 6. EXHIBITS.

Exhibit No.		Description
3.1		Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form 10 filed on April 19, 2018)

3.2		Certificate of Designation of Series A Cumulative Convertible Preferred Stock (incorporated by reference to Exhibit 2.2 to the Offering Statement on Form 1-A filed on May 9, 2019)

3.3		Certificate of Designation of Series B Cumulative Redeemable Preferred Stock (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on December 5, 2019)

3.4		Amended and Restated Certificate of Designation of Series C Cumulative Redeemable Preferred Stock (incorporated by reference to Exhibit 3.4 to the Quarterly Report on Form 10-Q filed on November 15, 2021)

~~3.5~~3.5*		Certificate of Designation of Series D Cumulative Redeemable Preferred Stock

3.6		Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Registration Statement on Form 10 filed on April 19, 2018)

10.1*		~~Loan Agreement, dated April 14, 2022, between Charlotte 3 Park MHP LLC, Raymond Gee, and Townebank~~

10.2*3.7		~~Promissory Note, dated April 14, 2022, between Charlotte 3 Park MHP LLC and Townebank~~

10.3*		~~Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing, dated April 14, 2022, between Charlotte 3 Park MHP LLC and Townebank~~

10.4*		~~Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing, dated April 14, 2022, between Charlotte 3 Park MHP LLC and Townebank~~

10.5*		~~Assignment of Leases and Rents, dated April 14, 2022, between Charlotte 3 Park MHP LLC and Townebank~~

10.6*		~~Mortgage, dated April 14, 2022, between Charlotte 3 Park MHP LLC and Townebank~~

10.7*		Amendment No. 1 to Amended and Restated ~~Revolving Promissory Note, dated June 23, 2022, between~~Bylaws of Manufactured Housing Properties Inc. ~~and Gvest Real Estate Capital LLC~~

10.8*		~~Revolving Unsecured Promissory Note, dated June 29, 2022, between Manufactured Housing Properties Inc. and NAV Real Estate LLC~~(incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on October 21, 2022)

31.1*		Certifications of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certifications of Principal Financial and Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*		Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*		Certification of Principal Financial and Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS*		Inline XBRL Instance Document

101.SCH*		Inline XBRL Taxonomy Extension Schema Document

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Filed herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: ~~August 15, 2022~~May 12, 2023	MANUFACTURED HOUSING PROPERTIES INC.

	/s/ Raymond M. Gee
	Name:	~~Name:~~ Raymond M. Gee
	Title:	~~Title:~~ Chief Executive Officer
	(Principal Executive Officer)

	/s/ ~~Chelsea H. Gee~~Vira Turchinyak
	Name:	~~Name: Chelsea H. Gee~~Vira Turchinyak
	Title:	~~Title:~~ Chief Financial Officer
	(Principal Financial and Accounting Officer)

0001277998 mhpc:NAVRealEstateLLCPromissoryNoteMember 2022-01-01 2022-03-31 iso4217:USD xbrli:shares

Acquisition Date	Name (number of communities)	Land		Improvements		Building		Total Purchase Price
March 2021	Golden Isles MHP	$	1,050,000	$	487,500	$	-	$	1,537,500
March 2021	Golden Isles Gvest		-		-		787,500		787,500
	Total Purchase Price	$	1,050,000	$	487,500	$	787,500	$	2,325,000
	Acquisition Costs		-		123,319		250		123,569
	Total Investment Property	$	1,050,000	$	610,819	$	787,750	$	2,448,569

January 2022	Sunnyland MHP	$	672,400	$	891,580	$	-	$	1,563,980
January 2022	Sunnyland Gvest		-		-		636,020		636,020
March 2022	Warrenville MHP (2)		975,397		853,473		-		1,828,870
March 2022	Warrenville Gvest (2)		-		-		1,221,130		1,221,130
June 2022	Spaulding MHP		1,217,635		304,409		477,956		2,000,000
June 2022	Raeford MHP Parcel		650,000		-		-		650,000
	Total Purchase Price	$	3,515,432	$	2,049,462	$	2,335,106	$	7,900,000
	Acquisition Costs		139,502		78,757		60,356		278,615
	Total Investment Property	$	3,654,934	$	2,128,219	$	2,395,462	$	8,178,615

	Three Months Ended June 30,						Six Months Ended June 30,
	2022 Pro Forma			2021 Pro Forma			2022 Pro Forma			2021 Pro Forma
Revenue	$	3,922,613		$	3,633,142		$	7,708,707		$	7,270,337
Community operating expenses		1,535,595			1,348,137			2,912,618			2,806,577
Corporate payroll and overhead expenses		1,254,918			583,733			2,163,996			1,164,467
Depreciation expense		972,911			977,801			1,922,654			1,953,287
Interest expense		1,432,720			968,208			2,783,505			1,950,908
Refinance costs		15,751			-			15,751			16,675
Cost of home sales		122,269			-			154,734			-
Other income		-			139,300			-			139,300
Net income (loss)		(1,411,551	)		(105,437	)		(2,244,551	)		(482,277	)
Net income (loss) attributable to non-controlling interest		(250,915	)		58,954			(425,107	)		46,762
Net loss attributable to Manufactured Housing Properties, Inc		(1,160,636	)		(164,391	)		(1,819,444	)		(529,039	)
Preferred stock dividends / accretion		548,214			540,134			1,096,424			1,069,674
Net income (loss)	$	(1,708,852	)	$	(704,525	)	$	(2,915,868	)	$	(1,598,713	)
Net loss per share	$	(0.13	)	$	(0.05	)	$	(0.23	)	$	(0.12	)

	Six Months Ended June 30, 2022						Six Months Ended June 30, 2021
	Amount			Percent of Revenues			Amount			Percent of Revenues
Revenue
Rental and related income	$	6,323,799			98.40	%	$	3,440,058			98.14	%
Gross revenues from home sales		102,594			1.60	%		65,244			1.86	%
Total revenues		6,426,393			100.00	%		3,505,302			100.00	%
Community operating expenses
Repair and maintenance		515,819			8.03	%		223,190			6.37	%
Real estate taxes		397,922			6.19	%		199,240			5.68	%
Utilities		475,880			7.41	%		299,312			8.54	%
Insurance		139,297			2.17	%		68,397			1.95	%
General and administrative expense		781,240			12.16	%		304,122			8.68	%
Total community operating expenses		2,310,158			35.95	%		1,094,261			31.22	%
Corporate payroll and overhead		2,163,996			33.67	%		1,164,467			33.22	%
Depreciation expense		1,578,679			24.57	%		903,665			25.78	%
Interest expense		2,336,741			36.36	%		893,354			25.49	%
Refinancing costs		15,751			0.25	%		16,675			0.48	%
Cost of home sales		154,734			2.41	%		-			-
Total expenses		8,560,059			133.20	%		4,072,422			116.18	%
Other Income		-			-			139,300			3.97	%
Net loss	$	(2,133,666	)		(33.20	)%	$	(427,820	)		(12.20	)%
Variable interest entity share of net income (loss)		(410,485	)		(6.39	)%		173,433			4.95	%
Net loss attributable to our company	$	(1,723,181	)		(26.81	)%	$	(601,253	)		(17.15	)%
Preferred stock dividends and put option value accretion		1,096,424			17.06	%		1,069,674			30.52	%
Net loss attributable to common stockholders	$	(2,819,605	)		(43.88	)%	$	(1,670,927	)		(47.67	)%