Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2020 | |
Cover [Abstract] | |
Entity Registrant Name | Harbor Custom Development, Inc. |
Entity Central Index Key | 0001784567 |
Document Type | S-1 |
Amendment Flag | false |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business Flag | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
ASSETS | |||
Real Estate | $ 34,445,200 | $ 24,826,700 | $ 18,449,900 |
Property, Plant and Equipment, net | 6,698,400 | 5,071,900 | 2,528,700 |
Right of Use Assets | 938,000 | 1,132,700 | |
Cash | 2,351,900 | 430,000 | 81,900 |
Prepaid Expense | 373,500 | 117,600 | 14,700 |
Accounts Receivable, net | 54,300 | 11,800 | 52,000 |
Restricted Cash | 139,000 | ||
Deferred Tax Asset | 733,100 | 171,600 | |
TOTAL ASSETS | 45,594,400 | 31,762,300 | 21,266,200 |
LIABILITIES | |||
Construction Loans, net of Debt Discount | 18,262,600 | 9,499,300 | 17,172,300 |
Construction Loans - Related Parties, net of Debt Discount | 7,994,400 | 14,523,200 | 1,656,200 |
Equipment Loans | 3,191,600 | 3,476,800 | 997,400 |
Accounts Payable and Accrued Expenses | 3,109,900 | 3,770,400 | 801,000 |
Right of Use Operating Lease Liabilities | 906,500 | 1,115,500 | |
Finance Leases | 1,952,100 | 520,700 | 705,600 |
Deferred Revenue | 1,370,600 | 73,200 | |
Deferred income tax | 463,000 | ||
Note Payable PPP | 582,800 | ||
Due to Related Party | 8,100 | ||
Income tax payable | 54,800 | ||
TOTAL LIABILITIES | 37,370,500 | 32,987,200 | 21,850,300 |
COMMITMENTS AND CONTINGENCIES | |||
STOCKHOLDERS' EQUITY (DEFICIT) | |||
Preferred Stock, value | |||
Common Stock, value | 11,957,000 | 670,900 | 670,900 |
Additional Paid In Capital | 130,100 | 119,100 | 112,000 |
Accumulated Deficit | (2,574,500) | (954,300) | (577,600) |
Total Stockholders' Equity (Deficit) | 9,512,600 | (164,300) | 205,300 |
Non-Controlling Interest | (1,288,700) | (1,060,600) | (789,400) |
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | 8,223,900 | (1,224,900) | (584,100) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ 45,594,400 | $ 31,762,300 | $ 21,266,200 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | |||
Construction Loans, net of Debt Discount | $ 215,000 | $ 148,400 | $ 0 |
Construction Loans - Related Parties, net of Debt Discount | $ 425,000 | $ 853,800 | $ 0 |
Preferred Stock, at par value | |||
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred Stock, shares issued | 0 | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 | 0 |
Common Stock, at par value | $ 0 | ||
Common Stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 |
Common Stock, shares issued | 5,628,048 | 3,513,517 | 3,513,517 |
Common Stock, shares outstanding | 5,628,048 | 3,513,517 | 3,513,517 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | ||||||
Sales | $ 7,806,500 | $ 6,783,800 | $ 26,077,300 | $ 17,737,900 | $ 30,953,500 | $ 5,730,300 |
Cost of Sales | 7,183,900 | 6,964,400 | 24,448,100 | 17,144,300 | 27,645,100 | 4,936,700 |
Gross Profit (Loss) | 622,600 | (180,600) | 1,629,200 | 593,600 | 3,308,400 | 793,600 |
Operating Expenses | 1,458,200 | 731,100 | 3,769,900 | 2,556,000 | 3,466,800 | 2,765,900 |
Operating Income Loss | (835,600) | (911,700) | (2,140,700) | (1,962,400) | (158,400) | (1,972,300) |
Other Income (Expense) | ||||||
Loss on Sale of Equipment | (12,400) | (27,900) | ||||
Other Income | 6,800 | 13,000 | 79,200 | 79,100 | 19,200 | |
Interest Expense | (163,900) | (131,100) | (254,200) | (216,200) | (358,300) | (117,700) |
Income from the Equity Method Investment | 1,229,700 | |||||
Total Other Income (Expense) | (176,300) | (124,300) | (269,100) | (137,000) | (279,200) | 1,131,200 |
Loss Before Income Tax | (1,011,900) | (1,036,000) | (2,409,800) | (2,099,400) | (437,600) | (841,100) |
Income Tax (Benefit) Provision | 571,600 | 439,700 | 561,500 | 439,700 | (634,600) | 517,800 |
Net Income (loss) | (440,300) | (596,300) | (1,848,300) | (1,659,700) | 197,000 | (1,358,900) |
Net Income Loss Attributable to Non-controlling interest | (3,200) | (102,900) | (228,100) | (51,700) | (38,600) | 31,500 |
Net Income Loss Attributable to Stockholders | $ (437,100) | $ (493,400) | $ (1,620,200) | $ (1,608,000) | $ 235,600 | $ (1,390,400) |
Net Income (Loss) Per Share - Basic | $ 0.07 | $ (0.40) | ||||
Net Income (Loss) Per Share - Diluted | 0.07 | (0.40) | ||||
Net Loss Per Share - Basic and Diluted | $ (0.10) | $ (0.14) | $ (0.43) | $ (0.46) | ||
Weighted Average Common Shares Outstanding - Basic | 3,513,517 | 3,513,517 | ||||
Weighted Average Common Shares Outstanding - Diluted | 3,513,517 | 3,513,517 | ||||
Weighted Average Common Shares Outstanding - Basic and Diluted | 4,180,054 | 3,513,517 | 3,737,318 | 3,513,517 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net income (loss) | $ (1,848,300) | $ (1,659,700) | $ 197,000 | $ (1,358,900) |
Adjustments to reconcile net income (loss) to net cash from operating activities: | ||||
Depreciation expense | 419,200 | 296,000 | 427,600 | 210,000 |
Amortization of right of use assets | 194,700 | 91,200 | ||
Income from Equity Method Investment | (1,229,700) | |||
Loss on sale of equipment | 27,900 | |||
Stock compensation | 11,000 | 4,300 | 7,100 | |
Shares issued for Services | 112,000 | |||
Amortization | 153,500 | |||
Net change in assets and liabilities: | ||||
Accounts receivable | (42,500) | (66,300) | 40,200 | 163,000 |
Prepaid expenses | (255,900) | (40,100) | (102,900) | 25,300 |
Real estate | (8,286,200) | (6,613,100) | (6,089,900) | (7,166,900) |
Deferred revenue | 1,297,400 | 66,900 | 73,200 | |
Deferred income tax | (561,500) | (439,800) | (634,600) | 463,000 |
Payments on right of use liability | (209,000) | (90,100) | (170,700) | |
Income tax payable | (54,800) | 54,800 | ||
Accounts payable and accrued expenses | (605,500) | 2,125,000 | 2,969,400 | 449,400 |
NET CASH USED IN OPERATING ACTIVITIES | (9,858,700) | (6,325,700) | (3,184,900) | (8,278,000) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Purchase of property and equipment | (401,100) | (317,900) | (402,800) | (513,000) |
Proceeds on the sale of equipment | 330,400 | |||
Contributions to Equity Method Investment | (43,400) | |||
Proceeds from Equity Method Investment | 1,664,000 | |||
NET CASH USED IN INVESTING ACTIVITIES | (70,700) | (317,900) | (402,800) | 1,107,600 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Construction loans, net | 8,829,900 | 546,600 | (7,524,600) | 8,292,000 |
Financing fees construction loans | (573,100) | (1,289,100) | ||
Construction loans related parties, net | (6,515,700) | 7,418,200 | 13,720,800 | (654,900) |
Financing fees related party construction loans | (396,900) | (488,500) | ||
Payments on financing leases | (380,000) | (138,900) | (185,100) | (170,400) |
Contributions | 58,100 | |||
Note payable PPP | 582,800 | |||
Due to related party | (8,100) | 8,100 | ||
Net proceeds from issuance of common stock | 10,789,100 | |||
Distributions | (371,600) | (488,400) | (749,300) | |
Repayment for equipment loans | (476,700) | (254,800) | (444,900) | (201,600) |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 11,851,300 | 6,711,000 | 3,796,800 | 6,573,900 |
NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH | 1,921,900 | 67,400 | 209,100 | (596,500) |
CASH AND RESTRICTED CASH | 430,000 | 220,900 | 220,900 | 817,400 |
CASH AND RESTRICTED CASH | 2,351,900 | 288,300 | 430,000 | 220,900 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||||
Cash Paid During the Period for: Interest paid | 1,266,300 | 1,075,400 | 352,800 | 117,700 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||
Financing of assets additions | 2,002,900 | 2,176,300 | 2,924,500 | 1,078,100 |
Amortization of debt discount capitalized | 1,323,300 | 738,400 | ||
Distribution of land | 356,500 | (356,500) | ||
Right of use asset | 1,286,000 | $ 1,286,200 | ||
Stock issued for conversion of related interest and principle | $ 497,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes In Stockholders' Equity (Deficit) - USD ($) | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit Retained Earnings [Member] | Stockholders' Equity (Deficit) [Member] | Noncontrolling Interest [Member] | Total |
Balance at Dec. 31, 2017 | $ 628,100 | $ 415,000 | $ 1,043,100 | $ 310,900 | $ 1,354,000 | ||
Balance, shares at Dec. 31, 2017 | |||||||
Distributions | (734,000) | (734,000) | (734,000) | ||||
Contributed Capital | 61,100 | 61,100 | 61,100 | ||||
Issuance of Shares for Capital | $ 670,900 | (670,900) | |||||
Issuance of Shares for Capital, shares | 3,153,154 | ||||||
Shares issued for Services (As Restated) | 112,000 | 112,000 | 112,000 | ||||
Shares issued for Services (As Restated), shares | 360,363 | ||||||
Dissolution of Bay Vista | (18,300) | 1,131,800 | 1,113,500 | (1,131,800) | (18,300) | ||
Net Income (Loss) | (1,390,400) | (1,390,400) | 31,500 | (1,358,900) | |||
Balance at Dec. 31, 2018 | $ 670,900 | 112,000 | (577,600) | 205,300 | (789,400) | (584,100) | |
Balance, shares at Dec. 31, 2018 | 3,513,517 | ||||||
Distributions | (535,500) | (535,500) | (100,000) | (635,500) | |||
Stock Compensation Expense | 3,000 | 3,000 | 3,000 | ||||
Net Income (Loss) | (795,700) | (795,700) | 52,000 | (743,700) | |||
Balance at Mar. 31, 2019 | $ 670,900 | 115,000 | (1,908,800) | (1,122,900) | (837,400) | (1,960,300) | |
Balance, shares at Mar. 31, 2019 | 3,513,517 | ||||||
Balance at Dec. 31, 2018 | $ 670,900 | 112,000 | (577,600) | 205,300 | (789,400) | (584,100) | |
Balance, shares at Dec. 31, 2018 | 3,513,517 | ||||||
Net Income (Loss) | (1,659,700) | ||||||
Balance at Sep. 30, 2019 | $ 670,900 | 116,300 | (2,776,700) | (1,989,500) | (1,073,700) | (3,063,200) | |
Balance, shares at Sep. 30, 2019 | 3,513,517 | ||||||
Balance at Dec. 31, 2018 | $ 670,900 | 112,000 | (577,600) | 205,300 | (789,400) | (584,100) | |
Balance, shares at Dec. 31, 2018 | 3,513,517 | ||||||
Distributions | (116,800) | (116,800) | (232,600) | (349,400) | |||
Stock Compensation Expense | 5,500 | 5,500 | 5,500 | ||||
Issuance of Warrants | 1,600 | 1,600 | 1,600 | ||||
Transfer of land to Owner | (495,500) | (495,500) | (495,500) | ||||
Net Income (Loss) | 235,600 | 235,600 | (38,600) | 197,000 | |||
Balance at Dec. 31, 2019 | $ 670,900 | 119,100 | (954,300) | (164,300) | (1,060,600) | (1,224,900) | |
Balance, shares at Dec. 31, 2019 | 3,513,517 | ||||||
Balance at Mar. 31, 2019 | $ 670,900 | 115,000 | (1,908,800) | (1,122,900) | (837,400) | (1,960,300) | |
Balance, shares at Mar. 31, 2019 | 3,513,517 | ||||||
Distributions | (55,600) | (55,600) | (55,600) | ||||
Stock Compensation Expense | 500 | 500 | 500 | ||||
Net Income (Loss) | (318,900) | (318,900) | (800) | (319,700) | |||
Balance at Jun. 30, 2019 | $ 670,900 | 115,500 | (2,283,300) | (1,496,900) | (838,200) | (2,335,100) | |
Balance, shares at Jun. 30, 2019 | 3,513,517 | ||||||
Distributions | (132,600) | (132,600) | |||||
Stock Compensation Expense | 800 | 800 | 800 | ||||
Net Income (Loss) | (493,400) | (493,400) | (102,900) | (596,300) | |||
Balance at Sep. 30, 2019 | $ 670,900 | 116,300 | (2,776,700) | (1,989,500) | (1,073,700) | (3,063,200) | |
Balance, shares at Sep. 30, 2019 | 3,513,517 | ||||||
Balance at Dec. 31, 2019 | $ 670,900 | 119,100 | (954,300) | (164,300) | (1,060,600) | (1,224,900) | |
Balance, shares at Dec. 31, 2019 | 3,513,517 | ||||||
Net Income (Loss) | (752,000) | (752,000) | (221,900) | (973,900) | |||
Balance at Mar. 31, 2020 | $ 670,900 | 119,100 | (1,706,300) | (916,300) | (1,282,500) | (2,198,800) | |
Balance, shares at Mar. 31, 2020 | 3,513,517 | ||||||
Balance at Dec. 31, 2019 | $ 670,900 | 119,100 | (954,300) | (164,300) | (1,060,600) | (1,224,900) | |
Balance, shares at Dec. 31, 2019 | 3,513,517 | ||||||
Net Income (Loss) | (1,848,300) | ||||||
Balance at Sep. 30, 2020 | $ 11,957,000 | 130,100 | (2,574,500) | 9,512,600 | (1,288,700) | 8,223,900 | |
Balance, shares at Sep. 30, 2020 | 5,628,048 | ||||||
Balance at Mar. 31, 2020 | $ 670,900 | 119,100 | (1,706,300) | (916,300) | (1,282,500) | (2,198,800) | |
Balance, shares at Mar. 31, 2020 | 3,513,517 | ||||||
Stock Compensation Expense | 1,100 | 1,100 | 1,100 | ||||
Net Income (Loss) | (431,100) | (431,100) | (3,000) | (434,100) | |||
Balance at Jun. 30, 2020 | $ 670,900 | 120,200 | (2,137,400) | (1,346,300) | (1,285,500) | (2,631,800) | |
Balance, shares at Jun. 30, 2020 | 3,513,517 | ||||||
Net proceeds from issuance of common stock | $ 10,789,100 | 10,789,100 | 10,789,100 | ||||
Net proceeds from issuance of common stock, shares | 2,031,705 | ||||||
Conversion of related party debt to common stock | $ 497,000 | 497,000 | 497,000 | ||||
Conversion of related party debt to common stock, shares | 82,826 | ||||||
Stock Compensation Expense | 9,900 | 9,900 | 9,900 | ||||
Net Income (Loss) | (437,100) | (437,100) | (3,200) | (440,300) | |||
Balance at Sep. 30, 2020 | $ 11,957,000 | $ 130,100 | $ (2,574,500) | $ 9,512,600 | $ (1,288,700) | $ 8,223,900 | |
Balance, shares at Sep. 30, 2020 | 5,628,048 |
Nature of Operations and Summar
Nature of Operations and Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Nature of Operations and Summary of Significant Accounting Policies | 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations The Company and its subsidiaries’ principal business activity involves acquiring raw land and developed lots for the purpose of building and selling single-family and multifamily dwellings in the Puget Sound region of Washington State. The Company utilizes its heavy equipment resources to develop lots for the creation of inventory for its residential construction arm and to provide development infrastructure construction on a contract basis to other home builders. Single-family construction and infrastructure construction contracts vary but are typically less than one year. On August 1, 2019, the Company changed its name from Harbor Custom Homes, Inc. to Harbor Custom Development, Inc. The Company became subject to the reporting requirements of the Securities Exchange Act of 1934, had securities registered for sale to the public pursuant to the Securities Act of 1933, and started trading on NASDAQ August 28, 2020. Principles of Consolidation The consolidated financial statements include the following subsidiaries of Harbor Custom Development, Inc. as of the reporting period ending dates as follows (all entities are formed as Washington LLCs): Attributable Interest Names Dates of Formation 9/30/20 12/31/19 9/30/19 Saylor View Estates, LLC March 30, 2014 51 % 51 % 51 % Harbor Excavation, LLC* July 3, 2017 N/A N/A 90 % Harbor Materials, LLC July 5, 2018 100 % 100 % 100 % Belfair Apartments, LLC December 3, 2019 100 % 100 % 100 % * Harbor Excavation, LLC was voluntarily dissolved with the State of Washington as of June 14, 2019. All intercompany transactions and balances have been eliminated in consolidation. As of September 30, 2020, and December 31, 2019, the aggregate non-controlling interest was $(1,288,700) and $(1,060,600). Basis of Presentation The unaudited financial information furnished herein reflects all adjustments, consisting solely of normal recurring items, which in the opinion of management are necessary to fairly state the financial position of the Company and the results of its operations for the periods presented. This report should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Registration Statement on Form S-1 for the year ended December 31, 2019 filed with the Securities and Exchange Commission on August 25, 2020. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The condensed consolidated balance sheet at December 31, 2019 was derived from the audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The results of operations for the interim periods presented are not necessarily indicative of results for the year ending December 31, 2020. The Company’s Board of Directors and Stockholders approved a 1-for-2.22 reverse split of the Company’s common stock, which was effected on April 15, 2020. The reverse split combined each 2.22 shares of the Company’s outstanding common stock into one share of common stock. No fractional shares were issued in connection with the reverse split, and any fractional shares resulting from the reverse split were rounded up to the nearest whole share. All references to common stock, options to purchase common stock, restricted stock, share data, per share data, and related information, as applicable have been adjusted in the financial statements to reflect the split of the common stock as if it had occurred at the beginning of the earliest period presented. All numbers in these financial statements are rounded to the nearest $100. Reclassification Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. Use of Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used. Stock-Based Compensation Effective as of November 19, 2018, the Company’s Board of Directors and Stockholders approved and adopted the 2018 Incentive and Non-Statutory Stock Option Plan (the “2018 Plan”). The 2018 Plan allows the Administrator (as defined in the 2018 Plan), currently the Board of Directors, to determine the issuance of incentive stock options and non-qualified stock options stock to eligible employees and outside directors and consultants of the Company. The Company has reserved 675,676 shares of common stock for issuance under the 2018 Plan. The Company accounts for stock-based compensation in accordance with ASC Topic 718, “ Compensation – Stock Compensation” The Company recognizes all forms of share-based payments, including stock option grants, warrants and restricted stock grants, at their fair value on the grant date, which are based on the estimated number of awards that are ultimately expected to vest. Share-based payments are valued using a Black-Scholes option pricing model. Grants of share-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the share-based payment. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service. Stock-based compensation expenses are included in selling, general and administrative expenses in the consolidated statement of operations. For the nine months ended September 30, 2020 and 2019 when computing fair value of share-based payments, the Company has considered the following variables: September 30, 2020 September 30, Risk-free interest rate 0.47% - 1.46 % 1.56 % Exercise Price $2.22 - $7.50 $ 0.18 Expected life of grants 2.99 - 6.00 years 6.53 years Expected volatility of underlying stock 32.39% - 43.41 % 32.34 % Dividends 0 % 0 % The expected option term is computed using the “simplified” method as permitted under the provisions of ASC 718-10-S99. The Company uses the simplified method to calculate expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. The share price as of the grant date was determined by an independent third party 409(a) valuation until the Company became publicly traded. Now that the Company’s stock is publicly traded, the value is determined by the trading price at the time of grant. Expected volatility is based on the historical stock price volatility of comparable companies’ common stock, as the Company’s stock does not have sufficient historical trading activity. Risk free interest rates were obtained from U.S. Treasury rates for the applicable periods. Earnings (Loss) Per Share Earnings (loss) per share (“EPS”) is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to Section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants. The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income (loss) attributable to common stockholders per common share. For the Three Months Ended For the Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Numerator: Net loss attributable to common stockholders $ (437,100 ) $ (493,400 ) (1,620,200 ) $ (1,608,000 ) Effect of dilutive securities: - - - - Diluted net loss $ (437,100 ) $ (493,000 ) (1,620,200 ) $ (1,608,000 ) Denominator: Weighted average common shares outstanding - basic 4,180,054 3,513,517 3,737,318 3,513,517 Dilutive securities (a): Options - - - - Warrants - - - - Weighted average common shares outstanding and assumed conversion – diluted 4,180,054 3,513,517 3,737,318 3,513,517 Basic net loss per common share $ (0.10 ) $ (0.14 ) (0.43 ) $ (0.46 ) Diluted net loss per common share $ (0.10 ) $ (0.14 ) (0.43 ) $ (0.46 ) (a) - Anti-dilutive securities excluded: 164,308 102,690 164,308 102,690 Fair Value of Financial Instruments For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the Company’s short-term financial instruments approximates fair value due to relatively short period to maturity for these instruments. Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all short-term debt securities purchased with a maturity of three months or less to be cash equivalents. There were no cash equivalents as of September 30, 2020 and December 31, 2019. Accounts Receivable Accounts receivable are reported at the amount the Company expects to collect from outstanding balances. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. The allowance for doubtful accounts were $0 and $11,300 as of September 30, 2020 and December 31, 2019. Property and Equipment and Depreciation Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after considering their respective estimated residual values) over the estimated useful lives: Construction Equipment 10 years Leasehold improvements The lesser of 10 years or the remaining life of the lease Furniture and Fixtures 5 years Computers 3 years Vehicles 10 years Real Estate Assets Real estate assets are recorded at cost, except when real estate assets are acquired that meet the definition of a business combination in accordance with Financial Accounting Standards Board (“FASB”) ASC 805, “Business Combinations,” which acquired assets are recorded at fair value. Interest, property taxes, insurance and other incremental costs (including salaries) directly related to a project are capitalized during construction period of major facilities and land improvements. The capitalization period begins when activities to develop the parcel commence and ends when the asset constructed is completed. The capitalized costs are recorded as part of the asset to which they relate and are reduced when lots are sold. The Company capitalized interest from related party borrowings of $203,600 and $450,000 for the three months ended September 30, 2020 and 2019, respectively. The Company capitalized interest from related party borrowings of $840,000 and $710,200 for the nine months ended September 30, 2020 and 2019, respectively. The Company capitalized interest from third-party borrowings of $783,100 and $260,200 for the three months ended September 30, 2020 and 2019, respectively. The Company capitalized interest from third-party borrowings of $1,834,000 and $1,098,900 for the nine months ended September 30, 2020 and 2019, respectively. A property is classified as “held for sale” when all of the following criteria for a plan of sale have been met: (1) Management, having the authority to approve the action, commits to a plan to sell the property; (2) The property is available for immediate sale in its present condition, subject only to terms that are usual and customary; (3) An active program to locate a buyer and other actions required to complete the plan to sell have been initiated; (4) The sale of the property is probable and is expected to be completed within one year of the property being under a contract to be sold; (5) The property is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (6) Actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. When all of these criteria have been met, the property is classified as “held for sale.” In addition to the annual assessment of potential triggering events in accordance with ASC 360, the Company applies a fair value-based impairment test to the net book value assets on an annual basis and on an interim basis if certain events or circumstances indicate that an impairment loss may have occurred. As of September 30, 2020 and December 31, 2019, there was no impairment recognized for any of the projects. Revenue and Cost Recognition Accounting Standards codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contract to provide goods or services to customers. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised good or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods or services. The provision of ASC 606 includes a five-step process by which the Company determines revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which the Company expects to be entitled in exchange for those goods or services. ASC 606 requires the Company to apply the following steps: (1) identify the contract with the customers; (2) identify performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the Company satisfies the performance obligations. A detailed breakdown of the five-step process for the revenue recognition of Real Estate Revenue is as follows: 1. Identify the contract with a customer The Company has signed agreements with home buyers to purchase a lot with a completed house. 2. Identify the performance obligations in the contract Performance obligations of the Company include delivering a developed lot with a completed house to the customer which meets certain specifications outlined in the contract. 3. Determine the transaction price The transaction price is fixed and specified in the contract. Any subsequent change orders or price changes are required to be approved by both parties. 4. Allocation of the transaction price to performance obligations in the contract Each lot with a completed house is a separate performance obligation for which the specific price in the contract is allocated. 5. Recognize revenue when (or as) the entity satisfies a performance obligation The Company recognizes revenue when title is transferred. The Company does not have further performance obligations once title is transferred. A detailed breakdown of the five-step process for the revenue recognition of Construction Materials sold to or received from contractors is as follows: 1. Identify the contract with a customer There are no signed contracts. Each transaction is verbally agreed to with the customer. 2. Identify the performance obligations in the contract To deliver or receive materials from customers and based on the verbal agreement reached. 3. Determine the transaction price The Company has a set price list for receiving approved fill materials to recycle or provide customers with a combination of said materials. 4. Allocation of the transaction price to performance obligations in the contract There is only one performance obligation, which is to pick up or deliver the materials. The entire transaction price is therefore allocated to the performance obligation. 5. Recognize revenue when (or as) the entity satisfies a performance obligation The performance obligation is fulfilled and revenue recognized when the materials have been received or delivered by the Company. Revenues for Real Estate and Construction Materials: Revenues from contracts with customers are summarized by product category as follows: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Real Estate $ 7,704,300 $ 6,616,700 $ 25,625,300 $ 17,485,900 Construction Materials 102,200 167,100 452,000 252,000 Total Revenue $ 7,806,500 $ 6,783,800 $ 26,077,300 $ 17,737,900 Cost of Sales Land acquisition costs are allocated to each lot based on the size of the lot comparing to the total size of all lots in a project. Development cost and capitalized interest are allocated to lots sold based on the area method. Costs relating to the handling of recycled construction materials and converting items into usable construction materials for resale are charged to cost of sales as incurred. Advertising Costs for designing, producing, and communicating advertising are expensed as incurred. Advertising expense for the three months ended September 30, 2020 and 2019 was $0 and $4,400, respectively. Advertising expense for the nine months ended September 30, 2020 and 2019 was $8,500 and $6,000, respectively. Leases In February 2016, the FASB issued ASU 2016-02 “ Leases” On January 1, 2019, the Company adopted ASC 842 using the modified retrospective approach and recognized a right of use (“ROU”) asset and related liability in the condensed consolidated balance sheet in the amount of $474,200 related to the operating lease for office and warehouse space. As part of the adoption, the Company elected the practical expedients permitted under the transition guidance within the new standard, which, among other things, allowed the Company to: 1. Not separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component; 2. Not to apply the recognition requirements in ASC 842 to short-term leases; and 3. Not record a right of use asset or right of use liability for leases with an asset or liability balance that would be considered immaterial. Income Taxes Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss, credit carryforwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company recognizes a tax benefit for an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. Recent Accounting Pronouncements On February 25, 2016, the Financial Accounting Standards Board (FASB) released Accounting Standards Update No. 2016-02, Leases (Topic 842) (the Update). This ASU requires an entity to recognize a right-of-use asset (“ROU”) and lease liability for all leases with terms of more than 12 months. The amendments also require certain quantitative and qualitative disclosures about leasing arrangements. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard is effective for the Company on January 1, 2019, with early adoption permitted. The adoption has been reflected in the right of use asset and liability on the Balance Sheet. On December 18, 2019, the Financial Accounting Standards Board (FASB) released Accounting Standards Update No. 2019-12, Income taxes (Topic 740) (the Update). The Board issued this update as part of its initiative to reduce complexity in accounting standards. The Update is effective for fiscal years beginning after December 15, 2020. The Company is currently evaluating the effect of this standard. Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or circumstances indicate that the carrying value of such assets may not be fully recoverable. Impairment is present when the sum of undiscounted estimates future cash flow expected to result from use of the assets is less than carrying value. If impairment is present, the carrying value of the impaired asset is reduced to its fair value. Fair value is determined based on discounted cash flow or appraised values, depending on the nature of the assets. As of September 30, 2020 and December 31, 2019, there were no impairment losses recognized for long-lived assets. Offering Costs associated with a Public Offering The Company complies with the requirements of FASB ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “ Expenses of Offering.” | 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations The Company and its subsidiaries principal business activity involves acquiring raw land and developed lots for the purpose of building and selling single-family and multifamily dwellings in the Puget Sound region of Washington State. The Company utilizes its heavy equipment resources to develop lots for the creation of inventory for its residential construction arm and to provide development infrastructure construction on a contract basis to other home builders. Single-family construction and infrastructure construction contracts vary but are typically less than one year. Effective October 1, 2018, the Company converted from a Washington Limited Liability Company (S-corporation) to a Washington Profit Corporation (C-corporation). On August 1, 2019, the Company changed its name from Harbor Custom Homes, Inc. to Harbor Custom Development, Inc. Principles of Consolidation The consolidated financial statements include the following subsidiaries of Harbor Custom Development, Inc. as of the reporting period ending dates as follows (all entities are formed as Washington LLCs): Attributable Interest Names Dates of Formation 2019 2018 Bay Vista Blvd Apartments, LLC* May 15, 2017 N/A 50 % Saylor View Estates, LLC March 30, 2014 51 % 51 % Harbor Excavation, LLC** July 3,2017 N/A 90 % Harbor Materials, LLC July 5, 2018 100 % 100 % Werner RD Industrial, LLC December 15, 2017 100 % 100 % Belfair Apartments, LLC December 3,2019 100 % N/A * Bay Vista Blvd Apartments, LLC was closed as of December 31, 2018 with the IRS and dissolved with the State of Washington as of October 3, 2019. ** Harbor Excavation, LLC was voluntarily dissolved with the State of Washington as of June 14, 2019. All intercompany transactions and balances have been eliminated in consolidation. As of December 31, 2019, and December 31, 2018, the aggregate non-controlling interest was $(1,060,600) and $(789,400) as restated, respectively. Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). All numbers in these financial statements are rounded to the nearest $100. Use of Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary, from the estimates that were used. Stock-Based Compensation Effective as of November 19, 2018, the Company’s Board of Directors and Stockholders approved and adopted the 2018 Incentive and Non-Statutory Stock Option Plan (the “2018 Plan”). The 2018 Plan allows the Administrator (as defined in the 2018 Plan), currently the Board of Directors, to determine the issuance of incentive stock options, non-qualified stock options and restricted stock to eligible employees and outside directors and consultants of the Company. The Company has reserved 675,676 shares of common stock for issuance under the 2018 Plan. The Company accounts for stock-based compensation in accordance with ASC Topic 718, “ Compensation – Stock Compensation” The Company recognizes all forms of share-based payments, including stock option grants, warrants and restricted stock grants, at their fair value on the grant date, which are based on the estimated number of awards that are ultimately expected to vest. Share-based payments are valued using a Black-Scholes option pricing model. Grants of share-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the share-based payment. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service. Stock-based compensation expenses are included in selling, general and administrative expenses in the consolidated statement of operations. For the years ended December 31, 2019 and 2018 when computing fair value of share-based payments, the Company has considered the following variables: December 31, 2019 December 31, 2018 Risk-free interest rate 1.56-1.84 % 2.46-2.59 % Exercise Price $ 0.40 $ 0.40 - $0.44 Expected life of grants 5.0-6.53 years 2.50 – 6.51 years Expected volatility of underlying stock 31.75-32.89 % 26.9 – 31.49 % Dividends 0 % 0 % The expected option term is computed using the “simplified” method as permitted under the provisions of ASC 718-10-S99. The Company uses the simplified method to calculate expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. The share price as of the grant date was determined by an independent third party 409(a) valuation. Expected volatility is based on the historical stock price volatility of comparable companies’ common stock, as our stock does not have sufficient historical trading activity. Risk free interest rates were obtained from U.S. Treasury rates for the applicable periods. Earnings (Loss) Per Share Earnings per share (“EPS”) is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to Section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants. The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income (loss) attributable to common stockholders per common share. (As Restated) December 31, 2019 December 31, 2018 Numerator: Net income (loss) attributable to common stockholders $ 235,600 $ (1,390,400 ) Effect of dilutive securities: — — Diluted net income (loss) $ 235,600 $ (1,390,400 ) Denominator: Weighted average common shares outstanding - basic 3,513,517 3,513,517 Dilutive securities (a): Options - - Warrants - - Weighted average common shares outstanding and assumed conversion – diluted 3,513,517 3,513,517 Basic net income (loss) per common share $ 0.07 $ (0.40 ) Diluted net income (loss) per common share $ 0.07 $ (0.40 ) (a) - Anti-dilutive securities excluded: 139,742 - Fair Value of Financial Instruments For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the company short-term financial instruments approximates fair value due to relatively short period to maturity for these instruments. Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all short-term debt securities purchased with a maturity of three months or less to be cash equivalents. There were no cash equivalents as of December 31, 2019 and 2018. Restricted Cash As part of the purchase of a quarry parcel, the Company received a mining permit which is not currently utilized. As part of the transfer process, the Washington State Department of Natural Resources required a bond or cash equivalent of $139,000. The Company has chosen to establish a restricted deposit account with the Company’s financial institution. In 2019, the restricted cash was transferred to the Sterling Griffin President as part of the land distribution as discussed in Note 11. Accounts Receivable Accounts receivable are reported at the amount the Company expects to collect from outstanding balances. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. The allowance for doubtful accounts was $11,300 and $0 at December 31, 2019 and 2018. Property and Equipment and Depreciation Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after considering their respective estimated residual values) over the estimated useful lives: Construction Equipment 10 years Leasehold improvements The lesser of 10 years or the remaining life of the lease Furniture and Fixtures 5 years Computers 3 years Vehicles 10 years Real Estate Assets Real estate assets are recorded at cost, except when real estate assets are acquired that meet the definition of a business combination in accordance with Financial Accounting Standards Board (“FASB”) ASC 805, “Business Combinations,” which acquired assets are recorded at fair value. Interest, property taxes, insurance, and other incremental costs (including salaries) directly related to a project are capitalized during construction period of major facilities and land improvements. The capitalization period begins when activities to develop the parcel commence and ends when the asset constructed is completed. The capitalized costs are recorded as part of the asset to which they relate and are reduced when lots are sold. The Company capitalized interest from related party borrowings of $1,229,400 and $228,600 for the years ended December 31, 2019 and 2018, respectively. The Company capitalized interest from third-party borrowings of $1,563,700 and $1,375,000 for the years ended December 31, 2019 and 2018 respectively. A property is classified as “held for sale” when all the following criteria for a plan of sale have been met: (1) Management, having the authority to approve the action, commits to a plan to sell the property. (2) The property is available for immediate sale in its present condition, subject only to terms that are usual and customary. (3) An active program to locate a buyer and other actions required to complete the plan to sell, have been initiated. (4) The sale of the property is probable and is expected to be completed within one year of the property being under a contract to be sold. (5) The property is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (6) Actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. When all of these criteria have been met, the property is classified as “held for sale”. In addition to our annual assessment of potential triggering events in accordance with ASC 360, the Company applies a fair value-based impairment test to the net book value assets on an annual basis and on an interim basis if certain events or circumstances indicate that an impairment loss may have occurred. As of December 31, 2019 and 2018, there was no impairment recognized for any of the projects. Revenue and Cost Recognition Accounting Standards codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contract to provide goods or services to customers. The Company adopted this new standard on January 1, 2018 under the modified retrospective method. The adoption did not have a material effect on our financial statements. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised good or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. The provision of ASC 606 includes a five-step process by which we determine revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which we expect to be entitled in exchange for those goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the customers; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligations. A detailed breakdown of the five-step process for the revenue recognition of Real Estate Revenue is as follows: 1. Identify the contract with a customer The Company has signed agreements with home buyer to purchase a lot with a completed house. The contract has agreed upon prices, timelines, and specifications for what is to be provided. 2. Identify the performance obligations in the contract Performance obligations of the company include delivering a develop lot with a completed house to the customer, which are required to meet certain specifications that are outlined in the contract. The customer inspects the house prior to accepting title to ensure all specifications are met. 3. Determine the transaction price The transaction price is fixed and specified in the contract. Any subsequent change orders or price changes are required to be approved by both parties. 4. Allocation of the transaction price to performance obligations in the contract Each lot with a completed house is a separate performance obligation, for which the specific price in the contract is allocated. 5. Recognize revenue when (or as) the entity satisfies a performance obligation The buyer does the inspection to make sure all conditions/requirements are met before taking title of house. The Company recognizes revenue when title is transferred. The Company does not have further performance obligation once title is transferred. A detailed breakdown of the five-step process for the revenue recognition of Construction Materials sold to or received from contractors is as follows: 1. Identify the contract with a customer There are no signed contracts. Each transaction is verbally agreed to with the customer. 2. Identify the performance obligations in the contract To deliver or receive materials from customers and based on the verbal agreement reached. 3. Determine the transaction price The Company has a set price list for receiving approved fill materials to recycle or provide customers with a combination of said materials. This is open to negotiation by the sales staff in special circumstances. Each load of materials is weighed at a state certified scale and a weight ticket is generated. If it is material received it generates revenue for the disposal of the material for the customer. If construction material is sold it generates revenue from the sale of said material to the customer. The weight ticket goes to the accounting department and is used to generate an invoice to the customer. 4. Allocation of the transaction price to performance obligations in the contract There is only one performance obligation, which is to pick up or deliver the materials. The entire transaction price is therefore allocated to the performance obligation. 5. Recognize revenue when (or as) the entity satisfies a performance obligation The performance obligation is fulfilled, and revenue recognized when the materials have been received or delivered by the company. Revenues for Real Estate and Construction Materials: For the years ended December 31, 2019 and 2018, revenues from contracts with customers are summarized by product category as follows: 12/31/2019 As restated 12/31/2018 Real Estate $ 30,683,400 $ 5,290,000 Construction Materials 270,100 440,300 Total Revenue $ 30,953,500 $ 5,730,300 Contract Asset and Contract Liabilities Based on our real estate contracts, when a certified closing statement is received our performance obligations have been satisfied, at which point the payment is unconditional. Accordingly, our contracts do not give rise to contract assets or liabilities under ASC 606. There are no accounts receivable relating to these contracts as amounts are fully paid at closing of the property. Based on our Construction Material sales activity net trade accounts receivables are generated and were $11,800 and $52,000 December 31,2019 and 2018, respectively. Cost of Sales Land acquisitions costs are allocated to each lot based on the size of the lot comparing to the total size of all lots in a project. Development cost and capitalized interest are allocated to lots sold based on the area method. Cost relating to the handling of recycled construction materials and converting items into usable construction materials for resale are charged to cost of sales as incurred. Advertising Costs for designing, producing, and communicating advertising are expensed as incurred. Advertising expense for the years ended December 31, 2019 and 2018 were $67,500 and $8,500, respectively. Leases In February 2016, the FASB issued ASU 2016-02 “ Leases” On January 1, 2019, the Company adopted ASC 842 using the modified retrospective approach and recognized a right of use (“ROU”) asset and liability in the condensed consolidated balance sheet in the amount of $474,200 related to the operating lease for office and warehouse space. Results for the year ended December 31, 2019 are presented under ASC 842, while prior period amounts were not adjusted and continue to be reported in accordance with the legacy accounting guidance under ASC Topic 840, Leases As part of the adoption the Company elected the practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to: 1. Not separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component. 2. Not to apply the recognition requirements in ASC 842 to short-term leases. 3. Not record a right of use asset or right of use liability for leases with an asset or liability balance that would be considered immaterial. Refer to Note 12. Leases for additional disclosures required by ASC 842. Income Taxes Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss, credit carryforwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company recognizes a tax benefit for an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. As of February 15, 2014, the Company had elected to be taxed under the provisions of Subchapter S of the Internal Revenue Code. Under those provisions, the Company did not pay federal corporate income taxes on its taxable income. Instead, the stockholders were liable for individual federal income taxes on their respective shares. Effective November 29, 2018, the Company converted from a Washington Limited Liability Company (S corporation) to a Washington Profit Corporation. As of that date the Company is taxed as a C corporation at the entity level. Recent Accounting Pronouncements In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18), which requires that restricted cash and cash equivalents be included as components of total cash and cash equivalents as presented on the statement of cash flows. ASU 2016-18 was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 and a retrospective transition method is required. This guidance did not impact financial results but resulted in a change in the presentation of restricted cash and restricted cash equivalents within the statement of cash flows. The Company adopted this guidance in 2018. On February 25, 2016, the Financial Accounting Standards Board (FASB) released Accounting Standards Update No. 2016-02, Leases (Topic 842) (the Update). This ASU requires an entity to recognize a right-of-use asset (“ROU”) and lease liability for all leases with terms of more than 12 months. The amendments also require certain quantitative and qualitative disclosures about leasing arrangements. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard is effective for the Company on January 1, 2019, with early adoption permitted. The adoption has been reflected in ROU asset and liability on the Balance sheet. In May 2014, the FASB issued accounting standard update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under previous guidance. This may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. In July 2015, the FASB approved the proposal to defer the effective date of ASU 2014-09 standard by one year. Early adoption was permitted after December 15, 2016, and the standard became effective for public entities for annual reporting periods beginning after December 15, 2017 and interim periods therein. In 2016, the FASB issued final amendments to clarify the implementation guidance for principal versus agent considerations (ASU No. 2016-08), accounting for licenses of intellectual property and identifying performance obligations (ASU No. 2016-10), narrow-scope improvements and practical expedients (ASU No. 2016-12) and technical corrections and improvements to ASU 2014-09 (ASU No. 2016-20) in its new revenue standard. The Company reviewed customer contracts, applied the five-step model of the new standard to its contracts, and compared the results to its current accounting practices. The adoption of this standard required increased disclosures related to the disaggregation of revenue. In March 2018, the FASB issued ASU 2018-05, “Income Taxes (Topic 740) – Amendments to SEC paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 118.” ASU 2018-05 amends the Accounting Standards Codification to incorporate various SEC paragraphs pursuant to the issuance of SAB 118, which addresses the application of generally accepted accounting principles in situations when a registrant does not have necessary information available, prepared, or analyzed (including computation) in reasonable detail to complete the accounting for certain income tax effects of the Tax Cuts and Jobs Act. The ASU does not have material impact on the Company. Effective January 1, 2019, upon the adoption of ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or circumstances indicate that the carrying value of such assets may not be fully recoverable. Impairment is present when the sum of undiscounted estimates future cash flow expected to result from use of the assets is less than carrying value. If impairment is present, the carrying value of the impaired asset is reduced to its fair value. Fair value is determined based on discounted cash flow or appraised values, depending on the nature of the assets. As of December 31, 2019 and 2018, there were no impairment losses recognized for long-lived assets. |
Restatement of Previously Issue
Restatement of Previously Issued Consolidated Financial Statement | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Restatement of Previously Issued Consolidated Financial Statement | 2. RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENT The Company has restated its audited consolidated financial statements for the year ended December 31, 2018 1) Stock Based compensation for services in the amount of $112,000 was omitted from the 2018 statements. 2) Financing loans on leased equipment were incorrectly classified with Equipment loans in the amount of $705,600. 3) Harbor Materials revenue of $135,000 was incorrectly classified as other income instead of revenue. 4) Saylor View Estates cost of sales was understated by $65,200. The following table presents the impacted of the above items on the Consolidated Balance Sheet as previously reported, restatement adjustments and the Consolidated Balance Sheet as restated at December 31, 2018: As previously Reported Adjustments As Restated ASSETS Real Estate $ 18,515,100 $ (65,200 ) $ 18,449,900 TOTAL ASSETS $ 21,331,400 $ (65,200 ) $ 21,266,200 LIABILITIES Equipment loans $ 1,703,000 $ (705,600 ) $ 997,400 Finance Leases $ - $ 705,600 $ 705,600 TOTAL LIABILITIES $ 21,850,300 $ 21,850,300 STOCKHOLDERS’ EQUITY (DEFICIT) Additional Paid In Capital $ - $ 112,000 $ 112,000 (Accumulated Deficit) Retained Earnings $ (432,300 ) $ (145,300 ) $ (577,600 ) Total Stockholders’ Equity $ 238,600 $ (33,300 ) $ 205,300 Non-Controlling Interests $ (757,500 ) $ (31,900 ) $ (789,400 ) TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) $ (518,900 ) $ (65,200 ) $ (584,100 ) TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) $ 21,331,400 $ (65,200 ) $ 21,266,200 The following table presents the impacted items on the Consolidated Statement of Operations as previously reported, restatement adjustments and the Consolidated Statement of Operations as restated for the year ended December 31, 2018: As previously Reported Adjustments As Restated Sales $ 5,595,300 $ 135,000 $ 5,730,300 Cost of Sales $ 4,871,500 $ 65,200 $ 4,936,700 Gross Profit $ 723,800 $ 69,800 $ 793,600 Operating Expenses $ 2,653,900 $ 112,000 $ 2,765,900 Operating Income (loss) $ (1,930,100 ) $ (42,200 ) $ (1,972,300 ) Other Income $ 154,200 $ (135,000 ) $ 19,200 Total Other Income (Expense) $ 1,266,200 $ (135,000 ) $ 1,131,200 Income (loss) Before Tax $ (663,900 ) $ (177,200 ) $ (841,100 ) Net Income (loss) $ (1,181,700 ) $ (177,200 ) $ (1,358,900 ) Net Income Attributable to Non-controlling interest $ 63,400 $ (31,900 ) $ 31,500 Net Income (Loss) Per Share - Diluted $ (1,245,100 ) $ (145,300 ) $ (1,390,400 ) Net Income (Loss) Per Share - Basic $ (0.36 ) $ (0.04 ) $ (0.40 ) Weighted Average Common Shares Outstanding - Basis 3,513,517 3,513,517 3,513,517 The following table presents the impacted items on the Consolidated Statement of Stockholders equity as previously reported, restatement adjustments and the Consolidated Statement of Stockholders’ Equity as restated for the year ended December 31, 2018: Common Stock Preferred Stock Additional (Accumulate Deficit) Non- Total Shares No Shares No Paid Retained Stockholders’ Controlling Stockholders’ Issued Par Issued Par in Capital Earnings Equity Interest Equity Balance, December 31, 2018 ( As Previously Reported) 3,153,154 $ 670,900 - $ - $ - $ (432,300 ) $ 238,600 $ (757,500 ) $ (518,900 ) Shares issued for Services Net Change 360,363 - - - 112,000 - 112,000 - 112,000 Net Income Net Change - - - - - (145,300 ) (145,300 ) (31,900 ) (177,200 ) Balance, December 31, 2018 ( As Restated) 3,513,517 $ 670,900 - $ - $ 112,000 $ (577,600 ) $ 205,300 $ (789,400 ) $ (584,100 ) The following table presents the impacted items on the Consolidated Statement of Cash Flows as previously reported, restatement adjustments and the Consolidated Statement of Cash Flows as restated for the year ended December 31, 2018: As Previously Reported Net Change As Restated CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ (1,181,700 ) $ (177,200 ) $ (1,358,900 ) Adjustments to reconcile net income (loss) to net cash from operating activities: Shares issued for Services - 112,000 112,000 Net change in assets and liabilities: Real Estate (7,232,100 ) 65,200 (7,166,900 ) NET CASH USED IN OPERATING ACTIVITIES (8,278,000 ) - (8,278,000 ) CASH FLOWS FROM FINANCING ACTIVITIES Payments on financing leases - (170,400 ) (170,400 ) Payments of Equipment loan (372,000 ) 170,400 (201,600 ) NET CASH PROVIDED BY FINANCING ACTIVITIES 6,573,900 - 6,573,900 NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH (596,500 ) - (596,500 ) CASH AND RESTRICTED CASH AT BEGINNING OF YEAR 817,400 - 817,400 CASH AND RESTRICTED CASH AT END OF YEAR $ 220,900 $ - $ 220,900 |
Concentration Credit Risks, and
Concentration Credit Risks, and Uncertainties | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Risks and Uncertainties [Abstract] | ||
Concentration Credit Risks, and Uncertainties | 2. CONCENTRATION, RISKS, AND UNCERTAINTIES Cash Concentrations The Company maintains cash balances at various financial institutions. These balances are secured by the Federal Deposit Insurance Corporation. These balances may exceed the federal insurance limits. Uninsured cash balances were $2,100,400 and $177,600 as of September 30, 2020 and December 31, 2019, respectively. COVID-19 In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (“ COVID-19 The COVID-19 Pandemic has had the following effect on the Company’s business thus far: 1. Construction not related to safety, spoliation, or critical infrastructure was halted by Washington State Governor Inslee (the “Governor”) on March 23, 2020. Some operations could continue based on exceptions to the shutdown order, but the Company did experience a significant operational slowdown. 2. Soundview Estates (a large Harbor Custom Development, Inc. site) continued selective activities that yielded rock byproduct, considered an essential material, needed for critical infrastructure projects for an Amazon distribution center and a local hospital. 3. On April 24, 2020, the Governor approved the restart of most residential housing projects, deeming them essential, as long as they adhered to certain safety measures. Under this order, most existing permitted residential homes or projects are considered essential. The order allowed the Company to resume near full construction activities on all permitted lots. 4. On May 1, 2020, the Governor established a four-phase plan for Washington businesses to follow. All of the Company’s development sites are now in Phase 2 of the plan where construction can continue and new construction is allowed as long as the Company creates a safety plan adhering to certain safety practices, which the Company has done. While there could ultimately be a material impact on operations and liquidity of the Company, at the time of issuance of this report, the ultimate impact could not be determined. | 3. CONCENTRATION OF CREDIT RISK The Company maintains cash balances at various financial institutions. These balances are secured by the Federal Deposit Insurance Corporation. These balances may exceed the federal insurance limits. Uninsured cash balances were $177,600 and $0 as of December 31, 2019 and 2018, respectively. |
Property and Equipment
Property and Equipment | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Property and Equipment | 3. PROPERTY AND EQUIPMENT Property and equipment stated at cost, less accumulated depreciation and amortization, consisted of the following: September 30, 2020 December 31, 2019 Machinery and Equipment $ 7,508,500 $ 5,654,100 Vehicles 73,500 83,600 Furniture and Fixtures 130,400 54,900 Leasehold Improvements 7,000 7,000 Total Fixed Assets 7,719,400 5,799,600 Less Accumulated Depreciation (1,021,000 ) (727,700 ) Fixed Assets, Net $ 6,698,400 $ 5,071,900 Depreciation expense was $133,400 and $135,500 for the three months ended September 30, 2020 and 2019, respectively. Depreciation expense was $419,200 and $296,000 for the nine months ended September 30, 2020 and 2019, respectively. | 4. PROPERTY AND EQUIPMENT Land is property that is not held for resale. This property is used for storing material removed from development sites and quarrying material for use in development projects or to be sold to other developers. Property and equipment stated at cost, less accumulated depreciation, and amortization, consisted of the following: 12/31/2019 12/31/2018 Land and Improvements $ - $ 356,500 Machinery and Equipment 5,654,100 2,377,400 Vehicles 83,600 49,200 Furniture and Fixtures 54,900 38,700 Leasehold Improvements 7,000 7,000 Total Fixed Assets 5,799,600 2,828,800 Less Accumulated Depreciation (727,700 ) (300,100 ) Fixed Assets, Net $ 5,071,900 $ 2,528,700 Depreciation expense was $427,600 and $210,000 for the years ended December 31, 2019 and 2018, respectively. |
Real Estate
Real Estate | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Real Estate [Abstract] | ||
Real Estate | 4. REAL ESTATE Real Estate consisted of the following components: September 30, December 31, Land Held for Development $ 9,858,100 $ 9,707,800 Construction in Progress 23,195,000 12,879,600 Held for Sale 1,392,100 2,239,300 $ 34,445,200 $ 24,826,700 | 5. REAL ESTATE Real Estate consists of the following components: (As Restated) 12/31/2019 12/31/2018 Land Held for Development $ 9,707,800 $ 2,982,300 Construction in Progress 13,331,100 14,529,200 Held for Sale 2,239,300 938,400 $ 25,278,200 $ 18,449,900 |
Equity Method Investment
Equity Method Investment | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investment | 6. EQUITY METHOD INVESTMENT Wheaton Way Apartments, LLC Wheaton Way Apartments, LLC acquired an 8-acre parcel on May 31, 2016 and constructed a 162-unit apartment complex. The apartment complex was sold for $29,500,000 on July 31, 2018. Wheaton Way Apartments, LLC dissolved as of December 31, 2018. The Company had a 15% interest in the Wheaton Way Apartments, LLC but was able to exercise significant influence over the LLC. Therefore, the investment is accounted for using the equity method. Below is summarized financial information of the investment as of December 31, 2018 and for the year ended December 31, 2018: Balance Sheet 12/31/2018 Assets Cash $ – Other Current Assets – Fixed Assets, Net – Land – Total Assets $ – 12/31/2018 Liabilities and Partners’ Equity Accounts Payable $ – Other Current Liabilities – Notes Payable – Total Liabilities – Partners’ Equity – Total Liabilities and Partners’ Equity $ – 12/31/2018 Statement of Operations Revenue $ 29,500,000 Expenses 21,302,000 Net Income $ 8,198,000 |
Equipment Loans
Equipment Loans | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Equipment Loans | 5. EQUIPMENT LOANS The Company’s equipment loans consist of the following: September 30, 2020 December 31, 2019 Various notes payable to banks and financial institutions with interest rates varying from 5.08% to 14.41%, collateralized by equipment with monthly payments ranging from $428 to $10,340 through 2025: $ 3,191,600 $ 3,476,800 Book value of collateralized equipment: $ 3,778,600 $ 4,539,900 Future equipment loan maturities are as follows: For the years ending September 30: 2021 $ 863,600 2022 911,800 2023 774,500 2024 568,200 2025 73,500 $ 3,191,600 | 7. EQUIPMENT LOANS Consists of the following: (As Restated) 12/31/2019 12/31/2018 Various notes payable to banks and financial institutions with interest rates varying from 3.58% to 14.41%, collateralized by equipment with monthly payments ranging from $1,100 to $9,200 through 2023: $ 3,476,800 $ 997,400 Book value of collateralized equipment: $ 4,539,900 $ 2,390,000 Future equipment loan maturities are as follows: For the years ended December 31: 2020 $ 773,700 2021 815,500 2022 835,800 2023 644,800 2024 407,000 $ 3,476,800 |
Construction Loans
Construction Loans | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Construction Loans | 6. CONSTRUCTION LOANS The Company has various construction loans with private individuals and finance companies. The loans are collateralized by specific construction projects. All loans are of a one-year term but will be refinanced if the project is not completed within one year and are due upon the completion of the project. Interest accrues on the loans and is included with the payoff of the loan. Interest ranges from 8% to 40%. Interest expense and amortization of debt discount are capitalized when incurred and expensed as cost of goods sold when the corresponding property is sold. The loan balances as of September 30, 2020 and December 31, 2019 were $18,477,600 and $9,647,700, respectively. The book value of collateralized real estate as of September 30, 2020 and December 31, 2019 were $34,445,200 and $24,826,700, respectively. | 8. CONSTRUCTION LOANS The Company has various construction loans with private individuals and finance companies. The loans are collateralized by specific construction projects. All the loans are of a one-year term but will be refinanced if the project is not completed within one year and are due upon the completion of the project. Interest accrues on the loans and is included with the payoff of the loan. Interest ranges from 6% to 36%. Interest paid and amortized debt discount is included as a capitalized interest expense in the cost of sales. The loan balances as of December 31, 2019 and 2018, were $14,974,700 and $1,656,200, respectively for Related party lenders. The loan balances as of December 31, 2019 and 2018, were $9,499,300 and $17,172,300, respectively for third party lenders. The book value of collateralized real estate as of December 31, 2019 and 2018 are $25,278,200 and $18,449,900, respectively. |
Note Payable PPP
Note Payable PPP | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Note Payable PPP | 7. NOTE PAYABLE PPP On April 11, 2020, the Company entered into a term note with Timberland Bank, with a principal amount of $582,800 pursuant to the Paycheck Protection Program (“PPP Loan”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The PPP Loan is evidenced by a promissory note (“PPP Term Note”). The PPP Term Note bears interest at a fixed annual rate of 1.00%, with the first six months of interest deferred. Beginning in November 2020, the Company will make 18 equal monthly payments of principal and interest with the final payment due in April 2022. The PPP Loan may be accelerated upon the occurrence of an event of default. The PPP Term Note is unsecured and guaranteed by the United States Small Business Administration. The Company may apply for forgiveness of the PPP Term Note, with the amount which may be forgiven equal to the sum of payroll costs, covered rent and mortgage obligations, and covered utility payments incurred by the Company during the applicable period beginning upon receipt of PPP Term Note funds, calculated in accordance with the terms of the CARES Act. At this time, management is not in a position to quantify the portion of the PPP Loan that may be forgiven. As of September 30, 2020, the balance of the PPP Loan was $582,800. Future note payable loan maturities are as follows: For the years ended September 30: 2021 $ 256,400 2022 326,400 $ 582,800 |
Defined Contribution Plan
Defined Contribution Plan | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | ||
Defined Contribution Plan | 8. DEFINED CONTRIBUTION PLAN Effective January 1, 2016, the Company established a 401(k) plan for qualifying employees; employee contributions are voluntary. Company contributions to the plan for the nine months ended September 30, 2020 and 2019 were $0 and $0, respectively. | 9. DEFINED CONTRIBUTION PLAN Effective January 1, 2016, the Company established a 401(k) retirement and profit-sharing plan for qualifying employees. Employees can voluntarily elect to contribute to the Plan. The Company contributions to the profit-sharing plan for the years ended December 31, 2019 and 2018 were $29,800 and $8,700, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | 9. COMMITMENTS AND CONTINGENCIES From time to time the Company is subject to compliance audits by federal, state and local authorities relating to a variety of regulations including wage and hour laws, taxes, and workers’ compensation. There are no significant or pending litigation or regulatory proceedings known at this time. On March 24, 2020, the Company entered into an agreement with a national public builder to sell 104 finished lots for $12,538,000 on October 8, 2020. In conjunction with agreement on June 15, 2020, the Company received $1,300,000 of nonrefundable earnest money which is included in deferred revenue on the Balance Sheet. On September 17, 2020, the Company entered into a purchase and sale agreement for the acquisition of 48 acres currently in the entitlement process for 145 lots located in Belfair, Washington for $3,915,000. Closing is expected to take place upon preliminary plat approval, which is anticipated to be on or before March 15, 2021. On September 18, 2020, the Company entered into a purchase and sale agreement to acquire property currently under development for the construction of 36 townhomes located in Bremerton, Washington for $1,500,000. Closing is expected to be on or before March 1, 2021. On September 22, 2020, the Company entered into a purchase and sales agreement for the acquisition of 9.6 acres of land in Port Orchard, Washington for $1,440,000. Closing is contingent on permit approval and is expected to take place on or before June 1, 2021. On September 24, 2020, the Company entered into a purchase and sales agreement to acquire property for the construction of 30 townhomes located in East Bremerton, Washington for $1,800,000. Closing is expected to take place on or before March 1, 2021. Between September 28, 2020 and October 4, 2020, the Company entered into purchase and sale agreements for the acquisition of 19 finished lot in South Carolina for $1,524,000. On October 6, 2020, the Company secured $11,000,000 in construction financing from Sound Capital. The financing is intended to be used for single family home construction on 25 lots at Soundview Estates, a 240 lot subdivision located in Bremerton, Washington. | 10. COMMITMENTS AND CONTINGENCIES From time to time the Company is subject to compliance audits by federal, state, and local authorities relating to a variety of regulations including wage and hour laws, taxes, and workers’ compensation. There are no significant or pending litigation or regulatory proceedings known at this time. |
Related Party Transactions
Related Party Transactions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Related Party Transactions [Abstract] | ||
Related Party Transactions | 10. RELATED PARTY TRANSACTIONS Notes Payable The Company entered into construction loans with Sound Capital, LLC of which a director and minority shareholder is a director. The loans originated between November 2018 and February 2020; all of the loans have a one-year maturity with interest rates ranging between 8% and 11%. For the three months ended September 30, 2020, and September 30, 2019, the Company incurred loan origination fees of $271,900 and $488,500, respectively. For the nine months ended September 30, 2020, and September 30, 2019, the Company incurred loan origination fees of $396,900 and $488,500, respectively. These fees are recorded as debt discount and amortized over the life of the loans. The amortization is capitalized to real estate. As of September 30, 2020, and December 31, 2019, there were $425,000 and $853,800 of remaining debt discounts, respectively. As of September 30, 2020, and December 31, 2019, the outstanding loan balances were $8,419,400, and $14,935,000, respectively. The Company incurred interest expense of $203,600 and $450,000 for the three months ended September 30, 2020 and 2019, respectively, which is capitalized to Real Estate. The Company incurred interest expense of $840,000 and $710,200 for the nine months ended September 30, 2020 and 2019, respectively, which is capitalized to Real Estate. On April 19, 2019, the Company entered into a construction loan with Olympic Views, LLC of which the Company’s Chief Executive Officer and President owns a 50% interest. The loan amount was $442,000 with an interest rate of 12% and a maturity date of April 19, 2020. The loan was collateralized by a deed of trust on land. The amounts outstanding were $0 and $442,000 as of September 30, 2020 and December 31, 2019. The interest expense was $8,900 and $13,300 for the three months ended September 30, 2020 and 2019. The interest expense was $41,900 and $24,000 for the nine months ended September 30, 2020 and 2019, respectively, and was capitalized as part of Real Estate. On May 15, 2020, the Company entered into an agreement with Olympic Views, LLC to convert this debt and accrued interest of $55,000 to common stock at the Initial Public Offering price of $6.00. This conversion was completed on August 28, 2020 concurrent with the Initial Public Offering. This transaction resulted in 82,826 shares of common stock being issued to Olympic Views, LLC. Due to Related Party We utilize certain land owned by SGRE, LLC which is 100% owned by the Company’s Chief Executive Officer and President to store and process excess fill materials from our Soundview Estates project at no cost to us. Any excess material that is not used by us are then sold to third parties. The materials sold by us to third parties are subject to a 25% commission payable to SGRE, LLC. At September 30, 2020 and December 31, 2019, the commission payable was $0 and $0, respectively. The commission expense for the three months ended September 30, 2020 and 2019, respectively was $209,100 and $0. The commission expense for the nine months ended September 30, 2020 and 2019, respectively was $209,100 and $0. The Company also owed SGRE, LLC $0 and $8,100 at September 30, 2020 and December 31, 2019, respectively. These balances were due to SGRE, LLC customers incorrectly writing checks to Harbor Materials which were deposited by Harbor Materials. When the customers’ errors were discovered, the Company remitted the funds to SGRE, LLC. The balances carry no interest and are due on demand. Land Distribution to Company’s President In 2019, the Company transferred land and the related mining bond with a book value of $495,500 to an investment company owned by the Company’s Chief Executive Officer and President. The Company received $0 in exchange for the property. This was accounted for as a transaction between entities under common control, and as such, the book value of $495,500 was recorded as a distribution to the owner in the statement of stockholders’ equity (deficit). | 11. RELATED PARTY TRANSACTIONS Notes Payable The Company entered into a construction loan with an investment company owned by a family member of Sterling Griffin, President, on March 27, 2017. The loan was $2,052,600 with an interest rate of 9% and a maturity date of March 27, 2018. The loan was collateralized by a deed of trust on land. The amount outstanding on the loan was $0 as of December 31, 2019 and 2018, the interest expense was $0 and $51,500 for the years ended December 31, 2019 and 2018 and was capitalized as part of Real Estate. The Company entered into a construction loan with an investment company owned by a family member of Sterling Griffin, President, on January 10, 2017. The loan was $240,700 with an interest rate of 9% and a maturity date of January 10, 2018. The loan was collateralized by a deed of trust on land. The amount outstanding on the loan was $0 as of December 31, 2019 and 2018. The interest expense was $0 and $20,000 for the years ended December 31, 2019 and 2018 and was capitalized as part of Real Estate. The Company entered into a construction loan with an investment company owned by a family member of Sterling Griffin, President, on April 18, 2017. The loan was $113,400 with an interest rate of 9% and a maturity date of April 18, 2018. The loan was collateralized by deed of trust on land. The amount outstanding was $0 as of December 31, 2019 and 2018. The interest expense was $0 and $5,500 for the years ended December 31, 2019 and 2018 and was capitalized as part of Real Estate. The Company entered into a construction loan with the owner of the non-controlled interest in Saylor View Estates LLC on January 17, 2017. The loan was $145,000 with an interest rate of 12% and a maturity date of January 17, 2018. The loan was collateralized by a deed of trust on land. The amount outstanding on the loan was $0 and $0 as of December 31, 2019 and 2018. The interest expense was $0 and $1,400 for the years ended December 31, 2019 and 2018 and was capitalized as part of Real Estate. The Company entered into construction loans with Sound Capital, LLC of which Robb Kenyon, Director and minority shareholder, is a Partner. The loans originated between November 2018 and November 2019 all of which have a one-year maturity with interest rates ranging between 9% - 11.99%. As of December 31, 2019 and 2018 the company incurred loan origination fees of is $771,700 and $0 respectively. These fees are recorded as debt discount and amortized over the life of the loan. The amortization is capitalized as to real estate. At December 31, 2019 and 2018 there was $402,300 and $0 of remaining debt discount, respectively. At December 31, 2019 and 2018 the outstanding loan balances were $14,935,100, and $1,656,200, respectively. The Company incurred interest expense of $1,191,800 and $228,600 for the years ended December 31, 2019 and 2018, respectively, which is capitalized to Real Estate. The Company entered into a construction loan with Olympic Views, LLC of which Sterling Griffin, President, owns a 50% interest and 50% owned by Reed Kelly on April 19, 2019. The loan is $442,000 with an interest rate of 12% and a maturity date of April 19, 2020. The loan is collateralized by a deed of trust on land. The amount outstanding on the loan was $442,000 as of December 31, 2019. The interest expense was $37,600 for the year ended December 31, 2019 and was capitalized as part of Real Estate. Due to Related Party The Company owes SGRE, LLC which is 100% by Sterling Griffin, President, $8,100 at December 31, 2019. There is no interest and is due on demand. Sale to Owners During 2018, the Company sold land with a book value of $1,277,000 to an investment company owned 50% Sterling Griffin President of the company and 50% by Reed Kelly a shareholder of the Company. The Company received $1,250,000 in exchange for the property. This was accounted as a transaction between entities under common control, and as such, no revenue or expense was recorded in the statement of operations and the difference between the sale price and the book value of $27,000 was recorded as a distribution to the shareholder in the statement of stockholders equity. Land Distribution to Sterling Griffin In 2019, the Company transferred land and the related mining bond with a book value of $495,500 to an investment company owned by Sterling Griffin, President. The Company received $0 in exchange for the property. This was accounted for as a transaction between entities under common control, and as such, the book value of $495,500 was recorded as a distribution to the owners in the statement of stockholders’ equity. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | 12. LEASES The Company determines if an arrangement contains a lease at inception. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The Company’s leases consist of leaseholds on office space and machinery and equipment. The Company utilized a portfolio approach in determining the discount rate. The portfolio approach takes into consideration the range of the term, the range of the lease payments, the category of the underlying asset and the Company’s estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments. The Company also considered its recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating the incremental borrowing rates. The lease term includes options to extend the lease when it is reasonably certain that the Company will exercise that option. These operating leases contain renewal options for periods ranging from three to five years that expire at various dates with no residual value guarantees. Future obligations relating to the exercise of renewal options is included in the measurement if, based on the judgment of management, the renewal option is reasonably certain to be exercised. Factors in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of leasehold improvements, the value of the renewal rate compared to market rates, and the presence of factors that would cause a significant economic penalty to the Company if the option is not exercised. Management reasonably plans to exercise all options, and as such, all renewal options are included in the measurement of the right-of-use assets and operating lease liabilities. Leases with a term of 12 months or less are not recorded on the balance sheet, per the election of the practical expedient noted above. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company recognizes variable lease payments in the period in which the obligation for those payments is incurred. Variable lease payments that depend on an index or a rate are initially measured using the index or rate at the commencement date, otherwise variable lease payments are recognized in the period incurred. The components of lease expense were as follows: Year Ended Finance leases: Depreciation of assets $ 98,300 Interest on lease liabilities 52,600 Operating Lease Expense 200,800 Total net lease cost $ 351,700 Supplemental balance sheet information related to leases was as follows: December 31, 2019 Operating leases: Operating lease ROU assets $ 1,132,700 Total ROU Liabilities $ 1,115,500 Finance leases: Property and equipment, at cost $ 983,400 Accumulated depreciation 250,500 Property and equipment, net $ 732,900 Total Finance lease liabilities $ 520,700 Supplemental cash flow and other information related to leases was as follows: Year Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ (170,700 ) Financing cash flows from finance leases (185,100 ) Assets obtained in exchange for lease liabilities: Operating leases $ 1,286,200 Finance leases 0 Weighted average remaining lease term (in years): Operating leases 3.8 Finance leases 2.0 Weighted average discount rate: Operating leases 7.00 % Finance leases 7.98 % The minimum lease payments under the terms of the leases are as follows: For the years ended December 31, 2019: Operating Leases Finance Leases Total 2020 $ 345,900 $ 215,600 $ 561,500 2021 320,800 192,600 513,400 2022 304,900 116,400 421,300 2023 199,100 10,900 210,000 2024 120,700 - 120,700 Total Lease payments $ 1,291,400 $ 535,500 $ 1,826,900 Less Amount discount/Interest (175,900 ) (14,800 ) (190,700 ) $ 1,115,500 $ 520,700 $ 1,636,200 Rent expense under an operating lease for the year ended December 31, 2018 was $48,500. |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Tax | 13. INCOME TAX On December 22, 2018, the “Tax Cuts and Jobs Act” (TCJA) was signed into law which significantly reformed the Internal Revenue Code of 1986, as amended. The TCJA reduces the corporate tax rate to 21 percent beginning January 1, 2018. Note the TCJA changed Net operating loss deductions to indefinite carryforward but limits the use to 80% of future years net income. Until November 28, 2018 the Company was for tax purpose a sub chapter S corporation and all taxes were paid at the owner level. Upon the conversion to becoming a C corporation the Company recognized a deferred tax liability of $463,000, which is included in the consolidated balance sheet as of December 31,2018. The components of net deferred tax assets and liabilities at December 31, 2019 and 2018 are set forth below: December 31,2019 December 31,2018 Deferred tax assets: Net Operating Loss Carryforward $ 2,316,300 $ - Temporary Difference 777,800 Total assets 3,094,100 - Deferred tax liabilities: Depreciation 2,922,500 463,000 Total liabilities 2,922,500 463,000 Net deferred tax Assets (liabilities) 171,600 (463,000 ) In accordance with GAAP, management assesses whether a valuation allowance should be established based on our determination of whether it is more-likely-than-not that some portion or all of the deferred tax assets would not be realized. At December 31, 2019, management determined that it was more-likely-than-not that the Company’s deferred tax assets would be realized. Accordingly, at December 31, 2019 no valuation allowances recorded against the Company’s federal or state deferred tax asset. The components of income tax expense and the effective tax rates for the years ended December 31, 2019 and 2018 are as follows: Years Ended December 31, 2019 2018 Current: Federal $ - $ 54,800 Total Current - 54,800 Deferred: Federal (634,600 ) 463,000 Total Deferred (634,600 ) 463,000 Valuation Allowance - - Total Income Tax (Benefit) Expense $ (634,600 ) $ 517,800 The expected tax expense (benefit) based on the statutory rate is reconciled with actual tax benefit as follows: 2019 2018 US Federal statutory rate 21 % 21 % Adjustment for Deferred Tax (166 )% 54 % State Income tax rate 0 % 0 % Adjustment for Period as an S-Corp 0 % (13 )% Income tax (benefit) provision (145 )% 62 % The components of income tax expense and the effective tax rates for the years ended December 31, 2019 and 2018 are as follows: |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | ||
Stockholders' Equity (Deficit) | 11. STOCKHOLDERS’ EQUITY (DEFICIT) Public Offering and Conversion of Debt The registration statement for the Company’s initial public offering (the “Initial Public Offering”) became effective on August 28, 2020. On September 1, 2020, the Company closed on the Initial Public Offering of 2,031,705 shares of common stock at the public offering price of $6.00 per share, which includes 265,005 shares of common stock sold upon full exercise of the underwriters’ option to purchase additional shares of common stock for gross proceeds of $12,190,200. The net proceeds from the Initial Public Offering after deducting the costs incurred in connection with the Initial Public Offering along with underwriting discount and the underwriters’ fees and expenses were $10,789,100. In addition, upon closing of the Initial Public Offering, the Company issued to the underwriters, warrants to purchase an aggregate of 88,335 shares of common stock exercisable at a per share price of $7.50 for a term of four years beginning on August 28, 2021. The fair value of these warrants is $167,400. Also upon closing of the Initial Public Offering, the Company issued to Olympic Views, LLC (“Olympic”), 82,826 shares of common stock as a result of the conversion of debt owed to Olympic in the amount of $442,000 and accrued interest of $55,000 into shares of common stock at the public offering price per share of $6.00. Common Stock (A) Options The following is a summary of the Company’s option activity: Options Weighted Average Exercise Price Outstanding – December 31, 2019 264,426 $ 0.42 Exercisable – December 31, 2019 116,970 $ 0.42 Granted 93,784 $ 4.32 Exercised - $ - Forfeited/Cancelled (36,038 ) $ 0.40 Outstanding – September 30, 2020 322,172 $ 1.55 Exercisable – September 30, 2020 141,784 $ 0.42 Options Outstanding Options Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.40- $6.50 322,172 7.86 $ 1.55 141,784 $ 0.42 During the nine months ended September 30, 2020, the Company issued 93,784 options to a member of the Board of Directors and employees. The options have an exercise price of $2.22 to $6.50 per share, a term of ten years, and vest from February 7, 2021 through September 31, 2022. The options have an aggregated fair value of approximately $132,700 that was calculated using the Black-Scholes option-pricing model based on the assumptions discussed above in Note 1 under Stock-Based Compensation During the nine months ended September 30, 2019, the Company issued 88,742 options to employees. The options have an exercise price of $0.40 per share, a term of ten years, and vest in three years. The options have an aggregated fair value of approximately $7,500 that was calculated using the Black-Scholes option-pricing model based on the assumptions discussed above in Note 1 under Stock-Based Compensation. The Company recognized share-based compensation net of forfeitures related to options of an aggregate of $9,900 and $800 for the three months ended September 30, 2020 and 2019, respectively. The Company recognized share-based compensation net of forfeitures related to options of an aggregate of $11,000 and $4,300 for the nine months ended September 30, 2020 and 2019, respectively. As of September 30, 2020, unrecognized share-based compensation was $131,100. The intrinsic value for outstanding and exercisable options as of September 30, 2020 were $1,304,800 and $725,800 respectively and December 31, 2019 were $0 and $0, respectively. (B) Warrants The following is a summary of the Company’s warrant activity: Warrants Weighted Average Exercise Price Outstanding – December 31, 2019 22,524 $ 0.40 Exercisable – December 31, 2019 22,524 $ 0.40 Granted 88,335 7.50 Exercised - - Forfeited/Cancelled - - Outstanding – September 30, 2020 110,859 $ 6.06 Exercisable – September 30, 2020 22,524 $ 0.40 Options Outstanding Options Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.40 - $7.50 110,859 5.76 $ 6.06 22,524 $ 0.40 For the nine months ended September 30, 2020, the Company issued 88,335 warrants in connection with its Initial Public Offering. As of September 30, 2020, and December 31, 2019, the total intrinsic value of warrants outstanding and exercisable was $115,800 and $0, respectively. The fair value of these warrants is $167,400 and $0 as of September 30, 2020 and December 31, 2019, respectively. If exercised these warrants will be netted against proceeds. | 14. STOCKHOLDERS’ DEFICIT Common Stock (A) Options The following is a summary of the Company’s option activity: Options Weighted Average Exercise Price Outstanding – December 31, 2017 - $ - Exercisable – December 31, 2017 - $ - Granted 157,664 $ 0.42 Exercised - $ - Forfeited/Cancelled - $ - Outstanding – December 31, 2018 157,664 $ 0.42 Exercisable – December 31, 2018 - $ - Granted 106,762 $ 0.40 Exercised - $ - Forfeited/Cancelled - $ - Outstanding – December 31, 2019 264,426 $ 0.42 Exercisable – December 31, 2019 117,218 $ 0.42 Options Outstanding Options Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.40- $0.44 264,426 7.99 $ 0.42 117,218 $ 0.42 During the year ended December 31, 2018, the Company issued to 157,664 options to the members of the Board of Directors and an employee. The options have an exercise price of range $0.40-$0.44 share, a term of 5-10 years, and vesting periods ranging from 1-3 years. The options have an aggregated fair value of approximately $9,200 that was calculated using the Black-Scholes option-pricing model based on the assumptions discussed above in Note 1 under Stock-Based Compensation During the year ended December 31, 2019, the Company issued 106,762 options to the members of the Board of Directors and an employee. The options have an exercise price of $0.40 share, a term of 10 years, and 3-year vesting. The options have an aggregated fair value of approximately $9,000 that was calculated using the Black-Scholes option-pricing model based on the assumptions discussed above in Note 1 under Stock-Based Compensation The intrinsic value for outstanding and exercisable options at December 31, 2019 and 2018 was $0, and $0 respectively. (B) Warrants The following is a summary of the Company’s warrant activity: Warrants Weighted Average Exercise Price Outstanding – December 31, 2018 - $ - Exercisable – December 31, 2018 - $ - Granted 22,524 $ 0.40 Exercised - $ - Forfeited/Cancelled - $ - Outstanding – December 31, 2019 22,524 $ 0.40 Exercisable – December 31, 2019 22,524 $ 0.40 Options Outstanding Options Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Number Exercisable Weighted Average Exercise Price $ 0.40 22,524 9.82 $ 0.40 22,524 $ 0.40 At December 31, 2019 the total intrinsic value of warrants outstanding and exercisable was $0. During the year ended December 31, 2019, the Company issued 22,524 warrants to consultants. The warrants have an exercise price of $0.40 share, a term of 10 years, and immediate vesting. The warrants have an aggregated fair value of approximately $1,600 that was calculated using the Black-Scholes option-pricing model based on the assumptions discussed above in Note 1 under Stock-Based Compensation |
Subsequent Events
Subsequent Events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Subsequent Events [Abstract] | ||
Subsequent Events | 12. SUBSEQUENT EVENTS On October 13, 2020, the Board of Directors deemed it in the best interests of the Company to approve the adoption of a Restricted Stock Plan. On October 20, 2020, certain stockholders took action by a Majority Written Consent in Lieu of a Special Meeting authorizing the adoption of the 2020 Restricted Stock Plan (the “Plan”). The Information Statement related to the aforementioned action was first mailed on or about November 12, 2020, and the Plan shall be effective 20 calendar days thereafter. | 15. SUBSEQUENT EVENTS The Company evaluated the events and transactions subsequent to December 31, 2019, the balance sheet date, in accordance with FASB ASC 855-10-50, through March 4, 2020, which was the date the consolidated financial statements were available to be issued. Belfair Apartments, LLC entered into a loan for $1,500,000 on January 15, 2020 12% interest, which was for the purchase of real estate for an apartment development. The land was valued at $4,200,000 by the lender. The Company entered into a construction loan for phase 5 and 6 of the Sound view estates project on January 29, 2020. The loan amount is for up to $7,250,000 at 12%. Belfair Apartments, LLC entered into a loan for $500,000 on February 6, 2020 11% interest, which is a second mortgage of real estate for an apartment development. The land was valued at $4,200,000 by the lender. |
Nature of Operations and Summ_2
Nature of Operations and Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Nature of Operations | Nature of Operations The Company and its subsidiaries’ principal business activity involves acquiring raw land and developed lots for the purpose of building and selling single-family and multifamily dwellings in the Puget Sound region of Washington State. The Company utilizes its heavy equipment resources to develop lots for the creation of inventory for its residential construction arm and to provide development infrastructure construction on a contract basis to other home builders. Single-family construction and infrastructure construction contracts vary but are typically less than one year. On August 1, 2019, the Company changed its name from Harbor Custom Homes, Inc. to Harbor Custom Development, Inc. The Company became subject to the reporting requirements of the Securities Exchange Act of 1934, had securities registered for sale to the public pursuant to the Securities Act of 1933, and started trading on NASDAQ August 28, 2020. | Nature of Operations The Company and its subsidiaries principal business activity involves acquiring raw land and developed lots for the purpose of building and selling single-family and multifamily dwellings in the Puget Sound region of Washington State. The Company utilizes its heavy equipment resources to develop lots for the creation of inventory for its residential construction arm and to provide development infrastructure construction on a contract basis to other home builders. Single-family construction and infrastructure construction contracts vary but are typically less than one year. Effective October 1, 2018, the Company converted from a Washington Limited Liability Company (S-corporation) to a Washington Profit Corporation (C-corporation). On August 1, 2019, the Company changed its name from Harbor Custom Homes, Inc. to Harbor Custom Development, Inc. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the following subsidiaries of Harbor Custom Development, Inc. as of the reporting period ending dates as follows (all entities are formed as Washington LLCs): Attributable Interest Names Dates of Formation 9/30/20 12/31/19 9/30/19 Saylor View Estates, LLC March 30, 2014 51 % 51 % 51 % Harbor Excavation, LLC* July 3, 2017 N/A N/A 90 % Harbor Materials, LLC July 5, 2018 100 % 100 % 100 % Belfair Apartments, LLC December 3, 2019 100 % 100 % 100 % * Harbor Excavation, LLC was voluntarily dissolved with the State of Washington as of June 14, 2019. All intercompany transactions and balances have been eliminated in consolidation. As of September 30, 2020, and December 31, 2019, the aggregate non-controlling interest was $(1,288,700) and $(1,060,600). | Principles of Consolidation The consolidated financial statements include the following subsidiaries of Harbor Custom Development, Inc. as of the reporting period ending dates as follows (all entities are formed as Washington LLCs): Attributable Interest Names Dates of Formation 2019 2018 Bay Vista Blvd Apartments, LLC* May 15, 2017 N/A 50 % Saylor View Estates, LLC March 30, 2014 51 % 51 % Harbor Excavation, LLC** July 3,2017 N/A 90 % Harbor Materials, LLC July 5, 2018 100 % 100 % Werner RD Industrial, LLC December 15, 2017 100 % 100 % Belfair Apartments, LLC December 3,2019 100 % N/A * Bay Vista Blvd Apartments, LLC was closed as of December 31, 2018 with the IRS and dissolved with the State of Washington as of October 3, 2019. ** Harbor Excavation, LLC was voluntarily dissolved with the State of Washington as of June 14, 2019. All intercompany transactions and balances have been eliminated in consolidation. As of December 31, 2019, and December 31, 2018, the aggregate non-controlling interest was $(1,060,600) and $(789,400) as restated, respectively. |
Basis of Presentation | Basis of Presentation The unaudited financial information furnished herein reflects all adjustments, consisting solely of normal recurring items, which in the opinion of management are necessary to fairly state the financial position of the Company and the results of its operations for the periods presented. This report should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Registration Statement on Form S-1 for the year ended December 31, 2019 filed with the Securities and Exchange Commission on August 25, 2020. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The condensed consolidated balance sheet at December 31, 2019 was derived from the audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The results of operations for the interim periods presented are not necessarily indicative of results for the year ending December 31, 2020. The Company’s Board of Directors and Stockholders approved a 1-for-2.22 reverse split of the Company’s common stock, which was effected on April 15, 2020. The reverse split combined each 2.22 shares of the Company’s outstanding common stock into one share of common stock. No fractional shares were issued in connection with the reverse split, and any fractional shares resulting from the reverse split were rounded up to the nearest whole share. All references to common stock, options to purchase common stock, restricted stock, share data, per share data, and related information, as applicable have been adjusted in the financial statements to reflect the split of the common stock as if it had occurred at the beginning of the earliest period presented. All numbers in these financial statements are rounded to the nearest $100. | Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). All numbers in these financial statements are rounded to the nearest $100. |
Reclassification | Reclassification Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. | |
Use of Estimates | Use of Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used. | Use of Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary, from the estimates that were used. |
Stock-Based Compensation | Stock-Based Compensation Effective as of November 19, 2018, the Company’s Board of Directors and Stockholders approved and adopted the 2018 Incentive and Non-Statutory Stock Option Plan (the “2018 Plan”). The 2018 Plan allows the Administrator (as defined in the 2018 Plan), currently the Board of Directors, to determine the issuance of incentive stock options and non-qualified stock options stock to eligible employees and outside directors and consultants of the Company. The Company has reserved 675,676 shares of common stock for issuance under the 2018 Plan. The Company accounts for stock-based compensation in accordance with ASC Topic 718, “ Compensation – Stock Compensation” The Company recognizes all forms of share-based payments, including stock option grants, warrants and restricted stock grants, at their fair value on the grant date, which are based on the estimated number of awards that are ultimately expected to vest. Share-based payments are valued using a Black-Scholes option pricing model. Grants of share-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the share-based payment. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service. Stock-based compensation expenses are included in selling, general and administrative expenses in the consolidated statement of operations. For the nine months ended September 30, 2020 and 2019 when computing fair value of share-based payments, the Company has considered the following variables: September 30, 2020 September 30, Risk-free interest rate 0.47% - 1.46 % 1.56 % Exercise Price $2.22 - $7.50 $ 0.18 Expected life of grants 2.99 - 6.00 years 6.53 years Expected volatility of underlying stock 32.39% - 43.41 % 32.34 % Dividends 0 % 0 % The expected option term is computed using the “simplified” method as permitted under the provisions of ASC 718-10-S99. The Company uses the simplified method to calculate expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. The share price as of the grant date was determined by an independent third party 409(a) valuation until the Company became publicly traded. Now that the Company’s stock is publicly traded, the value is determined by the trading price at the time of grant. Expected volatility is based on the historical stock price volatility of comparable companies’ common stock, as the Company’s stock does not have sufficient historical trading activity. Risk free interest rates were obtained from U.S. Treasury rates for the applicable periods. | Stock-Based Compensation Effective as of November 19, 2018, the Company’s Board of Directors and Stockholders approved and adopted the 2018 Incentive and Non-Statutory Stock Option Plan (the “2018 Plan”). The 2018 Plan allows the Administrator (as defined in the 2018 Plan), currently the Board of Directors, to determine the issuance of incentive stock options, non-qualified stock options and restricted stock to eligible employees and outside directors and consultants of the Company. The Company has reserved 675,676 shares of common stock for issuance under the 2018 Plan. The Company accounts for stock-based compensation in accordance with ASC Topic 718, “ Compensation – Stock Compensation” The Company recognizes all forms of share-based payments, including stock option grants, warrants and restricted stock grants, at their fair value on the grant date, which are based on the estimated number of awards that are ultimately expected to vest. Share-based payments are valued using a Black-Scholes option pricing model. Grants of share-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the share-based payment. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service. Stock-based compensation expenses are included in selling, general and administrative expenses in the consolidated statement of operations. For the years ended December 31, 2019 and 2018 when computing fair value of share-based payments, the Company has considered the following variables: December 31, 2019 December 31, 2018 Risk-free interest rate 1.56-1.84 % 2.46-2.59 % Exercise Price $ 0.40 $ 0.40 - $0.44 Expected life of grants 5.0-6.53 years 2.50 – 6.51 years Expected volatility of underlying stock 31.75-32.89 % 26.9 – 31.49 % Dividends 0 % 0 % The expected option term is computed using the “simplified” method as permitted under the provisions of ASC 718-10-S99. The Company uses the simplified method to calculate expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. The share price as of the grant date was determined by an independent third party 409(a) valuation. Expected volatility is based on the historical stock price volatility of comparable companies’ common stock, as our stock does not have sufficient historical trading activity. Risk free interest rates were obtained from U.S. Treasury rates for the applicable periods. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Earnings (loss) per share (“EPS”) is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to Section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants. The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income (loss) attributable to common stockholders per common share. For the Three Months Ended For the Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Numerator: Net loss attributable to common stockholders $ (437,100 ) $ (493,400 ) (1,620,200 ) $ (1,608,000 ) Effect of dilutive securities: - - - - Diluted net loss $ (437,100 ) $ (493,000 ) (1,620,200 ) $ (1,608,000 ) Denominator: Weighted average common shares outstanding - basic 4,180,054 3,513,517 3,737,318 3,513,517 Dilutive securities (a): Options - - - - Warrants - - - - Weighted average common shares outstanding and assumed conversion – diluted 4,180,054 3,513,517 3,737,318 3,513,517 Basic net loss per common share $ (0.10 ) $ (0.14 ) (0.43 ) $ (0.46 ) Diluted net loss per common share $ (0.10 ) $ (0.14 ) (0.43 ) $ (0.46 ) (a) - Anti-dilutive securities excluded: 164,308 102,690 164,308 102,690 | Earnings (Loss) Per Share Earnings per share (“EPS”) is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to Section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants. The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income (loss) attributable to common stockholders per common share. (As Restated) December 31, 2019 December 31, 2018 Numerator: Net income (loss) attributable to common stockholders $ 235,600 $ (1,390,400 ) Effect of dilutive securities: — — Diluted net income (loss) $ 235,600 $ (1,390,400 ) Denominator: Weighted average common shares outstanding - basic 3,513,517 3,513,517 Dilutive securities (a): Options - - Warrants - - Weighted average common shares outstanding and assumed conversion – diluted 3,513,517 3,513,517 Basic net income (loss) per common share $ 0.07 $ (0.40 ) Diluted net income (loss) per common share $ 0.07 $ (0.40 ) (a) - Anti-dilutive securities excluded: 139,742 - |
Fair Value of Financial Instruments | Fair Value of Financial Instruments For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the Company’s short-term financial instruments approximates fair value due to relatively short period to maturity for these instruments. | Fair Value of Financial Instruments For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the company short-term financial instruments approximates fair value due to relatively short period to maturity for these instruments. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all short-term debt securities purchased with a maturity of three months or less to be cash equivalents. There were no cash equivalents as of September 30, 2020 and December 31, 2019. | Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all short-term debt securities purchased with a maturity of three months or less to be cash equivalents. There were no cash equivalents as of December 31, 2019 and 2018. |
Restricted Cash | Restricted Cash As part of the purchase of a quarry parcel, the Company received a mining permit which is not currently utilized. As part of the transfer process, the Washington State Department of Natural Resources required a bond or cash equivalent of $139,000. The Company has chosen to establish a restricted deposit account with the Company’s financial institution. In 2019, the restricted cash was transferred to the Sterling Griffin President as part of the land distribution as discussed in Note 11. | |
Accounts Receivable | Accounts Receivable Accounts receivable are reported at the amount the Company expects to collect from outstanding balances. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. The allowance for doubtful accounts were $0 and $11,300 as of September 30, 2020 and December 31, 2019. | Accounts Receivable Accounts receivable are reported at the amount the Company expects to collect from outstanding balances. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. The allowance for doubtful accounts was $11,300 and $0 at December 31, 2019 and 2018. |
Property and Equipment and Depreciation | Property and Equipment and Depreciation Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after considering their respective estimated residual values) over the estimated useful lives: Construction Equipment 10 years Leasehold improvements The lesser of 10 years or the remaining life of the lease Furniture and Fixtures 5 years Computers 3 years Vehicles 10 years | Property and Equipment and Depreciation Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after considering their respective estimated residual values) over the estimated useful lives: Construction Equipment 10 years Leasehold improvements The lesser of 10 years or the remaining life of the lease Furniture and Fixtures 5 years Computers 3 years Vehicles 10 years |
Real Estate Assets | Real Estate Assets Real estate assets are recorded at cost, except when real estate assets are acquired that meet the definition of a business combination in accordance with Financial Accounting Standards Board (“FASB”) ASC 805, “Business Combinations,” which acquired assets are recorded at fair value. Interest, property taxes, insurance and other incremental costs (including salaries) directly related to a project are capitalized during construction period of major facilities and land improvements. The capitalization period begins when activities to develop the parcel commence and ends when the asset constructed is completed. The capitalized costs are recorded as part of the asset to which they relate and are reduced when lots are sold. The Company capitalized interest from related party borrowings of $203,600 and $450,000 for the three months ended September 30, 2020 and 2019, respectively. The Company capitalized interest from related party borrowings of $840,000 and $710,200 for the nine months ended September 30, 2020 and 2019, respectively. The Company capitalized interest from third-party borrowings of $783,100 and $260,200 for the three months ended September 30, 2020 and 2019, respectively. The Company capitalized interest from third-party borrowings of $1,834,000 and $1,098,900 for the nine months ended September 30, 2020 and 2019, respectively. A property is classified as “held for sale” when all of the following criteria for a plan of sale have been met: (1) Management, having the authority to approve the action, commits to a plan to sell the property; (2) The property is available for immediate sale in its present condition, subject only to terms that are usual and customary; (3) An active program to locate a buyer and other actions required to complete the plan to sell have been initiated; (4) The sale of the property is probable and is expected to be completed within one year of the property being under a contract to be sold; (5) The property is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (6) Actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. When all of these criteria have been met, the property is classified as “held for sale.” In addition to the annual assessment of potential triggering events in accordance with ASC 360, the Company applies a fair value-based impairment test to the net book value assets on an annual basis and on an interim basis if certain events or circumstances indicate that an impairment loss may have occurred. As of September 30, 2020 and December 31, 2019, there was no impairment recognized for any of the projects. | Real Estate Assets Real estate assets are recorded at cost, except when real estate assets are acquired that meet the definition of a business combination in accordance with Financial Accounting Standards Board (“FASB”) ASC 805, “Business Combinations,” which acquired assets are recorded at fair value. Interest, property taxes, insurance, and other incremental costs (including salaries) directly related to a project are capitalized during construction period of major facilities and land improvements. The capitalization period begins when activities to develop the parcel commence and ends when the asset constructed is completed. The capitalized costs are recorded as part of the asset to which they relate and are reduced when lots are sold. The Company capitalized interest from related party borrowings of $1,229,400 and $228,600 for the years ended December 31, 2019 and 2018, respectively. The Company capitalized interest from third-party borrowings of $1,563,700 and $1,375,000 for the years ended December 31, 2019 and 2018 respectively. A property is classified as “held for sale” when all the following criteria for a plan of sale have been met: (1) Management, having the authority to approve the action, commits to a plan to sell the property. (2) The property is available for immediate sale in its present condition, subject only to terms that are usual and customary. (3) An active program to locate a buyer and other actions required to complete the plan to sell, have been initiated. (4) The sale of the property is probable and is expected to be completed within one year of the property being under a contract to be sold. (5) The property is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (6) Actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. When all of these criteria have been met, the property is classified as “held for sale”. In addition to our annual assessment of potential triggering events in accordance with ASC 360, the Company applies a fair value-based impairment test to the net book value assets on an annual basis and on an interim basis if certain events or circumstances indicate that an impairment loss may have occurred. As of December 31, 2019 and 2018, there was no impairment recognized for any of the projects. |
Revenue and Cost Recognition | Revenue and Cost Recognition Accounting Standards codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contract to provide goods or services to customers. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised good or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods or services. The provision of ASC 606 includes a five-step process by which the Company determines revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which the Company expects to be entitled in exchange for those goods or services. ASC 606 requires the Company to apply the following steps: (1) identify the contract with the customers; (2) identify performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the Company satisfies the performance obligations. A detailed breakdown of the five-step process for the revenue recognition of Real Estate Revenue is as follows: 1. Identify the contract with a customer The Company has signed agreements with home buyers to purchase a lot with a completed house. 2. Identify the performance obligations in the contract Performance obligations of the Company include delivering a developed lot with a completed house to the customer which meets certain specifications outlined in the contract. 3. Determine the transaction price The transaction price is fixed and specified in the contract. Any subsequent change orders or price changes are required to be approved by both parties. 4. Allocation of the transaction price to performance obligations in the contract Each lot with a completed house is a separate performance obligation for which the specific price in the contract is allocated. 5. Recognize revenue when (or as) the entity satisfies a performance obligation The Company recognizes revenue when title is transferred. The Company does not have further performance obligations once title is transferred. A detailed breakdown of the five-step process for the revenue recognition of Construction Materials sold to or received from contractors is as follows: 1. Identify the contract with a customer There are no signed contracts. Each transaction is verbally agreed to with the customer. 2. Identify the performance obligations in the contract To deliver or receive materials from customers and based on the verbal agreement reached. 3. Determine the transaction price The Company has a set price list for receiving approved fill materials to recycle or provide customers with a combination of said materials. 4. Allocation of the transaction price to performance obligations in the contract There is only one performance obligation, which is to pick up or deliver the materials. The entire transaction price is therefore allocated to the performance obligation. 5. Recognize revenue when (or as) the entity satisfies a performance obligation The performance obligation is fulfilled and revenue recognized when the materials have been received or delivered by the Company. Revenues for Real Estate and Construction Materials: Revenues from contracts with customers are summarized by product category as follows: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Real Estate $ 7,704,300 $ 6,616,700 $ 25,625,300 $ 17,485,900 Construction Materials 102,200 167,100 452,000 252,000 Total Revenue $ 7,806,500 $ 6,783,800 $ 26,077,300 $ 17,737,900 | Revenue and Cost Recognition Accounting Standards codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contract to provide goods or services to customers. The Company adopted this new standard on January 1, 2018 under the modified retrospective method. The adoption did not have a material effect on our financial statements. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised good or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. The provision of ASC 606 includes a five-step process by which we determine revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which we expect to be entitled in exchange for those goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the customers; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligations. A detailed breakdown of the five-step process for the revenue recognition of Real Estate Revenue is as follows: 1. Identify the contract with a customer The Company has signed agreements with home buyer to purchase a lot with a completed house. The contract has agreed upon prices, timelines, and specifications for what is to be provided. 2. Identify the performance obligations in the contract Performance obligations of the company include delivering a develop lot with a completed house to the customer, which are required to meet certain specifications that are outlined in the contract. The customer inspects the house prior to accepting title to ensure all specifications are met. 3. Determine the transaction price The transaction price is fixed and specified in the contract. Any subsequent change orders or price changes are required to be approved by both parties. 4. Allocation of the transaction price to performance obligations in the contract Each lot with a completed house is a separate performance obligation, for which the specific price in the contract is allocated. 5. Recognize revenue when (or as) the entity satisfies a performance obligation The buyer does the inspection to make sure all conditions/requirements are met before taking title of house. The Company recognizes revenue when title is transferred. The Company does not have further performance obligation once title is transferred. A detailed breakdown of the five-step process for the revenue recognition of Construction Materials sold to or received from contractors is as follows: 1. Identify the contract with a customer There are no signed contracts. Each transaction is verbally agreed to with the customer. 2. Identify the performance obligations in the contract To deliver or receive materials from customers and based on the verbal agreement reached. 3. Determine the transaction price The Company has a set price list for receiving approved fill materials to recycle or provide customers with a combination of said materials. This is open to negotiation by the sales staff in special circumstances. Each load of materials is weighed at a state certified scale and a weight ticket is generated. If it is material received it generates revenue for the disposal of the material for the customer. If construction material is sold it generates revenue from the sale of said material to the customer. The weight ticket goes to the accounting department and is used to generate an invoice to the customer. 4. Allocation of the transaction price to performance obligations in the contract There is only one performance obligation, which is to pick up or deliver the materials. The entire transaction price is therefore allocated to the performance obligation. 5. Recognize revenue when (or as) the entity satisfies a performance obligation The performance obligation is fulfilled, and revenue recognized when the materials have been received or delivered by the company. Revenues for Real Estate and Construction Materials: For the years ended December 31, 2019 and 2018, revenues from contracts with customers are summarized by product category as follows: 12/31/2019 As restated 12/31/2018 Real Estate $ 30,683,400 $ 5,290,000 Construction Materials 270,100 440,300 Total Revenue $ 30,953,500 $ 5,730,300 |
Contract Asset and Contract Liabilities | Contract Asset and Contract Liabilities Based on our real estate contracts, when a certified closing statement is received our performance obligations have been satisfied, at which point the payment is unconditional. Accordingly, our contracts do not give rise to contract assets or liabilities under ASC 606. There are no accounts receivable relating to these contracts as amounts are fully paid at closing of the property. Based on our Construction Material sales activity net trade accounts receivables are generated and were $11,800 and $52,000 December 31,2019 and 2018, respectively. | |
Cost of Sales | Cost of Sales Land acquisition costs are allocated to each lot based on the size of the lot comparing to the total size of all lots in a project. Development cost and capitalized interest are allocated to lots sold based on the area method. Costs relating to the handling of recycled construction materials and converting items into usable construction materials for resale are charged to cost of sales as incurred. | Cost of Sales Land acquisitions costs are allocated to each lot based on the size of the lot comparing to the total size of all lots in a project. Development cost and capitalized interest are allocated to lots sold based on the area method. Cost relating to the handling of recycled construction materials and converting items into usable construction materials for resale are charged to cost of sales as incurred. |
Advertising | Advertising Costs for designing, producing, and communicating advertising are expensed as incurred. Advertising expense for the three months ended September 30, 2020 and 2019 was $0 and $4,400, respectively. Advertising expense for the nine months ended September 30, 2020 and 2019 was $8,500 and $6,000, respectively. | Advertising Costs for designing, producing, and communicating advertising are expensed as incurred. Advertising expense for the years ended December 31, 2019 and 2018 were $67,500 and $8,500, respectively. |
Leases | Leases In February 2016, the FASB issued ASU 2016-02 “ Leases” On January 1, 2019, the Company adopted ASC 842 using the modified retrospective approach and recognized a right of use (“ROU”) asset and related liability in the condensed consolidated balance sheet in the amount of $474,200 related to the operating lease for office and warehouse space. As part of the adoption, the Company elected the practical expedients permitted under the transition guidance within the new standard, which, among other things, allowed the Company to: 1. Not separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component; 2. Not to apply the recognition requirements in ASC 842 to short-term leases; and 3. Not record a right of use asset or right of use liability for leases with an asset or liability balance that would be considered immaterial. | Leases In February 2016, the FASB issued ASU 2016-02 “ Leases” On January 1, 2019, the Company adopted ASC 842 using the modified retrospective approach and recognized a right of use (“ROU”) asset and liability in the condensed consolidated balance sheet in the amount of $474,200 related to the operating lease for office and warehouse space. Results for the year ended December 31, 2019 are presented under ASC 842, while prior period amounts were not adjusted and continue to be reported in accordance with the legacy accounting guidance under ASC Topic 840, Leases As part of the adoption the Company elected the practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to: 1. Not separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component. 2. Not to apply the recognition requirements in ASC 842 to short-term leases. 3. Not record a right of use asset or right of use liability for leases with an asset or liability balance that would be considered immaterial. Refer to Note 12. Leases for additional disclosures required by ASC 842. |
Income Taxes | Income Taxes Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss, credit carryforwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company recognizes a tax benefit for an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. | Income Taxes Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss, credit carryforwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company recognizes a tax benefit for an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. As of February 15, 2014, the Company had elected to be taxed under the provisions of Subchapter S of the Internal Revenue Code. Under those provisions, the Company did not pay federal corporate income taxes on its taxable income. Instead, the stockholders were liable for individual federal income taxes on their respective shares. Effective November 29, 2018, the Company converted from a Washington Limited Liability Company (S corporation) to a Washington Profit Corporation. As of that date the Company is taxed as a C corporation at the entity level. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements On February 25, 2016, the Financial Accounting Standards Board (FASB) released Accounting Standards Update No. 2016-02, Leases (Topic 842) (the Update). This ASU requires an entity to recognize a right-of-use asset (“ROU”) and lease liability for all leases with terms of more than 12 months. The amendments also require certain quantitative and qualitative disclosures about leasing arrangements. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard is effective for the Company on January 1, 2019, with early adoption permitted. The adoption has been reflected in the right of use asset and liability on the Balance Sheet. On December 18, 2019, the Financial Accounting Standards Board (FASB) released Accounting Standards Update No. 2019-12, Income taxes (Topic 740) (the Update). The Board issued this update as part of its initiative to reduce complexity in accounting standards. The Update is effective for fiscal years beginning after December 15, 2020. The Company is currently evaluating the effect of this standard. | Recent Accounting Pronouncements In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18), which requires that restricted cash and cash equivalents be included as components of total cash and cash equivalents as presented on the statement of cash flows. ASU 2016-18 was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 and a retrospective transition method is required. This guidance did not impact financial results but resulted in a change in the presentation of restricted cash and restricted cash equivalents within the statement of cash flows. The Company adopted this guidance in 2018. On February 25, 2016, the Financial Accounting Standards Board (FASB) released Accounting Standards Update No. 2016-02, Leases (Topic 842) (the Update). This ASU requires an entity to recognize a right-of-use asset (“ROU”) and lease liability for all leases with terms of more than 12 months. The amendments also require certain quantitative and qualitative disclosures about leasing arrangements. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard is effective for the Company on January 1, 2019, with early adoption permitted. The adoption has been reflected in ROU asset and liability on the Balance sheet. In May 2014, the FASB issued accounting standard update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under previous guidance. This may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. In July 2015, the FASB approved the proposal to defer the effective date of ASU 2014-09 standard by one year. Early adoption was permitted after December 15, 2016, and the standard became effective for public entities for annual reporting periods beginning after December 15, 2017 and interim periods therein. In 2016, the FASB issued final amendments to clarify the implementation guidance for principal versus agent considerations (ASU No. 2016-08), accounting for licenses of intellectual property and identifying performance obligations (ASU No. 2016-10), narrow-scope improvements and practical expedients (ASU No. 2016-12) and technical corrections and improvements to ASU 2014-09 (ASU No. 2016-20) in its new revenue standard. The Company reviewed customer contracts, applied the five-step model of the new standard to its contracts, and compared the results to its current accounting practices. The adoption of this standard required increased disclosures related to the disaggregation of revenue. In March 2018, the FASB issued ASU 2018-05, “Income Taxes (Topic 740) – Amendments to SEC paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 118.” ASU 2018-05 amends the Accounting Standards Codification to incorporate various SEC paragraphs pursuant to the issuance of SAB 118, which addresses the application of generally accepted accounting principles in situations when a registrant does not have necessary information available, prepared, or analyzed (including computation) in reasonable detail to complete the accounting for certain income tax effects of the Tax Cuts and Jobs Act. The ASU does not have material impact on the Company. Effective January 1, 2019, upon the adoption of ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or circumstances indicate that the carrying value of such assets may not be fully recoverable. Impairment is present when the sum of undiscounted estimates future cash flow expected to result from use of the assets is less than carrying value. If impairment is present, the carrying value of the impaired asset is reduced to its fair value. Fair value is determined based on discounted cash flow or appraised values, depending on the nature of the assets. As of September 30, 2020 and December 31, 2019, there were no impairment losses recognized for long-lived assets. | Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or circumstances indicate that the carrying value of such assets may not be fully recoverable. Impairment is present when the sum of undiscounted estimates future cash flow expected to result from use of the assets is less than carrying value. If impairment is present, the carrying value of the impaired asset is reduced to its fair value. Fair value is determined based on discounted cash flow or appraised values, depending on the nature of the assets. As of December 31, 2019 and 2018, there were no impairment losses recognized for long-lived assets. |
Offering Costs Associated with a Public Offering | Offering Costs associated with a Public Offering The Company complies with the requirements of FASB ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “ Expenses of Offering.” |
Nature of Operations and Summ_3
Nature of Operations and Summary of Significant Accounting Policies (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Schedule of Statement of Subsidiaries | The consolidated financial statements include the following subsidiaries of Harbor Custom Development, Inc. as of the reporting period ending dates as follows (all entities are formed as Washington LLCs): Attributable Interest Names Dates of Formation 9/30/20 12/31/19 9/30/19 Saylor View Estates, LLC March 30, 2014 51 % 51 % 51 % Harbor Excavation, LLC* July 3, 2017 N/A N/A 90 % Harbor Materials, LLC July 5, 2018 100 % 100 % 100 % Belfair Apartments, LLC December 3, 2019 100 % 100 % 100 % * Harbor Excavation, LLC was voluntarily dissolved with the State of Washington as of June 14, 2019. | The consolidated financial statements include the following subsidiaries of Harbor Custom Development, Inc. as of the reporting period ending dates as follows (all entities are formed as Washington LLCs): Attributable Interest Names Dates of Formation 2019 2018 Bay Vista Blvd Apartments, LLC* May 15, 2017 N/A 50 % Saylor View Estates, LLC March 30, 2014 51 % 51 % Harbor Excavation, LLC** July 3,2017 N/A 90 % Harbor Materials, LLC July 5, 2018 100 % 100 % Werner RD Industrial, LLC December 15, 2017 100 % 100 % Belfair Apartments, LLC December 3,2019 100 % N/A * Bay Vista Blvd Apartments, LLC was closed as of December 31, 2018 with the IRS and dissolved with the State of Washington as of October 3, 2019. ** Harbor Excavation, LLC was voluntarily dissolved with the State of Washington as of June 14, 2019. |
Schedule of Fair Value Assumptions of Share-Based Payments | For the nine months ended September 30, 2020 and 2019 when computing fair value of share-based payments, the Company has considered the following variables: September 30, 2020 September 30, Risk-free interest rate 0.47% - 1.46 % 1.56 % Exercise Price $2.22 - $7.50 $ 0.18 Expected life of grants 2.99 - 6.00 years 6.53 years Expected volatility of underlying stock 32.39% - 43.41 % 32.34 % Dividends 0 % 0 % | For the years ended December 31, 2019 and 2018 when computing fair value of share-based payments, the Company has considered the following variables: December 31, 2019 December 31, 2018 Risk-free interest rate 1.56-1.84 % 2.46-2.59 % Exercise Price $ 0.40 $ 0.40 - $0.44 Expected life of grants 5.0-6.53 years 2.50 – 6.51 years Expected volatility of underlying stock 31.75-32.89 % 26.9 – 31.49 % Dividends 0 % 0 % |
Schedule of Net Income (Loss) Per Share | The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income (loss) attributable to common stockholders per common share. For the Three Months Ended For the Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Numerator: Net loss attributable to common stockholders $ (437,100 ) $ (493,400 ) (1,620,200 ) $ (1,608,000 ) Effect of dilutive securities: - - - - Diluted net loss $ (437,100 ) $ (493,000 ) (1,620,200 ) $ (1,608,000 ) Denominator: Weighted average common shares outstanding - basic 4,180,054 3,513,517 3,737,318 3,513,517 Dilutive securities (a): Options - - - - Warrants - - - - Weighted average common shares outstanding and assumed conversion – diluted 4,180,054 3,513,517 3,737,318 3,513,517 Basic net loss per common share $ (0.10 ) $ (0.14 ) (0.43 ) $ (0.46 ) Diluted net loss per common share $ (0.10 ) $ (0.14 ) (0.43 ) $ (0.46 ) (a) - Anti-dilutive securities excluded: 164,308 102,690 164,308 102,690 | The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income (loss) attributable to common stockholders per common share. (As Restated) December 31, 2019 December 31, 2018 Numerator: Net income (loss) attributable to common stockholders $ 235,600 $ (1,390,400 ) Effect of dilutive securities: — — Diluted net income (loss) $ 235,600 $ (1,390,400 ) Denominator: Weighted average common shares outstanding - basic 3,513,517 3,513,517 Dilutive securities (a): Options - - Warrants - - Weighted average common shares outstanding and assumed conversion – diluted 3,513,517 3,513,517 Basic net income (loss) per common share $ 0.07 $ (0.40 ) Diluted net income (loss) per common share $ 0.07 $ (0.40 ) (a) - Anti-dilutive securities excluded: 139,742 - |
Schedule of Property and Equipment Estimated Useful Lives | Depreciation is computed by the straight-line method (after considering their respective estimated residual values) over the estimated useful lives: Construction Equipment 10 years Leasehold improvements The lesser of 10 years or the remaining life of the lease Furniture and Fixtures 5 years Computers 3 years Vehicles 10 years | Depreciation is computed by the straight-line method (after considering their respective estimated residual values) over the estimated useful lives: Construction Equipment 10 years Leasehold improvements The lesser of 10 years or the remaining life of the lease Furniture and Fixtures 5 years Computers 3 years Vehicles 10 years |
Schedule of Revenues from Contracts with Customers | Revenues from contracts with customers are summarized by product category as follows: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Real Estate $ 7,704,300 $ 6,616,700 $ 25,625,300 $ 17,485,900 Construction Materials 102,200 167,100 452,000 252,000 Total Revenue $ 7,806,500 $ 6,783,800 $ 26,077,300 $ 17,737,900 | For the years ended December 31, 2019 and 2018, revenues from contracts with customers are summarized by product category as follows: 12/31/2019 As restated 12/31/2018 Real Estate $ 30,683,400 $ 5,290,000 Construction Materials 270,100 440,300 Total Revenue $ 30,953,500 $ 5,730,300 |
Restatement of Previously Iss_2
Restatement of Previously Issued Consolidated Financial Statement (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Summary of Consolidated Financial Statements | The following table presents the impacted of the above items on the Consolidated Balance Sheet as previously reported, restatement adjustments and the Consolidated Balance Sheet as restated at December 31, 2018: As previously Reported Adjustments As Restated ASSETS Real Estate $ 18,515,100 $ (65,200 ) $ 18,449,900 TOTAL ASSETS $ 21,331,400 $ (65,200 ) $ 21,266,200 LIABILITIES Equipment loans $ 1,703,000 $ (705,600 ) $ 997,400 Finance Leases $ - $ 705,600 $ 705,600 TOTAL LIABILITIES $ 21,850,300 $ 21,850,300 STOCKHOLDERS’ EQUITY (DEFICIT) Additional Paid In Capital $ - $ 112,000 $ 112,000 (Accumulated Deficit) Retained Earnings $ (432,300 ) $ (145,300 ) $ (577,600 ) Total Stockholders’ Equity $ 238,600 $ (33,300 ) $ 205,300 Non-Controlling Interests $ (757,500 ) $ (31,900 ) $ (789,400 ) TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) $ (518,900 ) $ (65,200 ) $ (584,100 ) TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) $ 21,331,400 $ (65,200 ) $ 21,266,200 The following table presents the impacted items on the Consolidated Statement of Operations as previously reported, restatement adjustments and the Consolidated Statement of Operations as restated for the year ended December 31, 2018: As previously Reported Adjustments As Restated Sales $ 5,595,300 $ 135,000 $ 5,730,300 Cost of Sales $ 4,871,500 $ 65,200 $ 4,936,700 Gross Profit $ 723,800 $ 69,800 $ 793,600 Operating Expenses $ 2,653,900 $ 112,000 $ 2,765,900 Operating Income (loss) $ (1,930,100 ) $ (42,200 ) $ (1,972,300 ) Other Income $ 154,200 $ (135,000 ) $ 19,200 Total Other Income (Expense) $ 1,266,200 $ (135,000 ) $ 1,131,200 Income (loss) Before Tax $ (663,900 ) $ (177,200 ) $ (841,100 ) Net Income (loss) $ (1,181,700 ) $ (177,200 ) $ (1,358,900 ) Net Income Attributable to Non-controlling interest $ 63,400 $ (31,900 ) $ 31,500 Net Income (Loss) Per Share - Diluted $ (1,245,100 ) $ (145,300 ) $ (1,390,400 ) Net Income (Loss) Per Share - Basic $ (0.36 ) $ (0.04 ) $ (0.40 ) Weighted Average Common Shares Outstanding - Basis 3,513,517 3,513,517 3,513,517 The following table presents the impacted items on the Consolidated Statement of Stockholders equity as previously reported, restatement adjustments and the Consolidated Statement of Stockholders’ Equity as restated for the year ended December 31, 2018: Common Stock Preferred Stock Additional (Accumulate Deficit) Non- Total Shares No Shares No Paid Retained Stockholders’ Controlling Stockholders’ Issued Par Issued Par in Capital Earnings Equity Interest Equity Balance, December 31, 2018 ( As Previously Reported) 3,153,154 $ 670,900 - $ - $ - $ (432,300 ) $ 238,600 $ (757,500 ) $ (518,900 ) Shares issued for Services Net Change 360,363 - - - 112,000 - 112,000 - 112,000 Net Income Net Change - - - - - (145,300 ) (145,300 ) (31,900 ) (177,200 ) Balance, December 31, 2018 ( As Restated) 3,513,517 $ 670,900 - $ - $ 112,000 $ (577,600 ) $ 205,300 $ (789,400 ) $ (584,100 ) The following table presents the impacted items on the Consolidated Statement of Cash Flows as previously reported, restatement adjustments and the Consolidated Statement of Cash Flows as restated for the year ended December 31, 2018: As Previously Reported Net Change As Restated CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ (1,181,700 ) $ (177,200 ) $ (1,358,900 ) Adjustments to reconcile net income (loss) to net cash from operating activities: Shares issued for Services - 112,000 112,000 Net change in assets and liabilities: Real Estate (7,232,100 ) 65,200 (7,166,900 ) NET CASH USED IN OPERATING ACTIVITIES (8,278,000 ) - (8,278,000 ) CASH FLOWS FROM FINANCING ACTIVITIES Payments on financing leases - (170,400 ) (170,400 ) Payments of Equipment loan (372,000 ) 170,400 (201,600 ) NET CASH PROVIDED BY FINANCING ACTIVITIES 6,573,900 - 6,573,900 NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH (596,500 ) - (596,500 ) CASH AND RESTRICTED CASH AT BEGINNING OF YEAR 817,400 - 817,400 CASH AND RESTRICTED CASH AT END OF YEAR $ 220,900 $ - $ 220,900 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Schedule of Property and Equipment | Property and equipment stated at cost, less accumulated depreciation and amortization, consisted of the following: September 30, 2020 December 31, 2019 Machinery and Equipment $ 7,508,500 $ 5,654,100 Vehicles 73,500 83,600 Furniture and Fixtures 130,400 54,900 Leasehold Improvements 7,000 7,000 Total Fixed Assets 7,719,400 5,799,600 Less Accumulated Depreciation (1,021,000 ) (727,700 ) Fixed Assets, Net $ 6,698,400 $ 5,071,900 | Property and equipment stated at cost, less accumulated depreciation, and amortization, consisted of the following: 12/31/2019 12/31/2018 Land and Improvements $ - $ 356,500 Machinery and Equipment 5,654,100 2,377,400 Vehicles 83,600 49,200 Furniture and Fixtures 54,900 38,700 Leasehold Improvements 7,000 7,000 Total Fixed Assets 5,799,600 2,828,800 Less Accumulated Depreciation (727,700 ) (300,100 ) Fixed Assets, Net $ 5,071,900 $ 2,528,700 |
Real Estate (Tables)
Real Estate (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Real Estate [Abstract] | ||
Schedule of Real Estate | Real Estate consisted of the following components: September 30, December 31, Land Held for Development $ 9,858,100 $ 9,707,800 Construction in Progress 23,195,000 12,879,600 Held for Sale 1,392,100 2,239,300 $ 34,445,200 $ 24,826,700 | Real Estate consists of the following components: (As Restated) 12/31/2019 12/31/2018 Land Held for Development $ 9,707,800 $ 2,982,300 Construction in Progress 13,331,100 14,529,200 Held for Sale 2,239,300 938,400 $ 25,278,200 $ 18,449,900 |
Equity Method Investment (Table
Equity Method Investment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of Financial Information | Below is summarized financial information of the investment as of December 31, 2018 and for the year ended December 31, 2018: Balance Sheet 12/31/2018 Assets Cash $ – Other Current Assets – Fixed Assets, Net – Land – Total Assets $ – 12/31/2018 Liabilities and Partners’ Equity Accounts Payable $ – Other Current Liabilities – Notes Payable – Total Liabilities – Partners’ Equity – Total Liabilities and Partners’ Equity $ – 12/31/2018 Statement of Operations Revenue $ 29,500,000 Expenses 21,302,000 Net Income $ 8,198,000 |
Equipment Loans (Tables)
Equipment Loans (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Schedule of Equipment Loans | The Company’s equipment loans consist of the following: September 30, 2020 December 31, 2019 Various notes payable to banks and financial institutions with interest rates varying from 5.08% to 14.41%, collateralized by equipment with monthly payments ranging from $428 to $10,340 through 2025: $ 3,191,600 $ 3,476,800 Book value of collateralized equipment: $ 3,778,600 $ 4,539,900 | Consists of the following: (As Restated) 12/31/2019 12/31/2018 Various notes payable to banks and financial institutions with interest rates varying from 3.58% to 14.41%, collateralized by equipment with monthly payments ranging from $1,100 to $9,200 through 2023: $ 3,476,800 $ 997,400 Book value of collateralized equipment: $ 4,539,900 $ 2,390,000 |
Schedule of Future Equipment Loan Maturities | Future equipment loan maturities are as follows: For the years ending September 30: 2021 $ 863,600 2022 911,800 2023 774,500 2024 568,200 2025 73,500 $ 3,191,600 | Future equipment loan maturities are as follows: For the years ended December 31: 2020 $ 773,700 2021 815,500 2022 835,800 2023 644,800 2024 407,000 $ 3,476,800 |
Note Payable PPP (Tables)
Note Payable PPP (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Future Note Payable Loan Maturities | Future note payable loan maturities are as follows: For the years ended September 30: 2021 $ 256,400 2022 326,400 $ 582,800 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | ||
Schedule of Stock Options Activity | The following is a summary of the Company’s option activity: Options Weighted Average Exercise Price Outstanding – December 31, 2019 264,426 $ 0.42 Exercisable – December 31, 2019 116,970 $ 0.42 Granted 93,784 $ 4.32 Exercised - $ - Forfeited/Cancelled (36,038 ) $ 0.40 Outstanding – September 30, 2020 322,172 $ 1.55 Exercisable – September 30, 2020 141,784 $ 0.42 | The following is a summary of the Company’s option activity: Options Weighted Average Exercise Price Outstanding – December 31, 2017 - $ - Exercisable – December 31, 2017 - $ - Granted 157,664 $ 0.42 Exercised - $ - Forfeited/Cancelled - $ - Outstanding – December 31, 2018 157,664 $ 0.42 Exercisable – December 31, 2018 - $ - Granted 106,762 $ 0.40 Exercised - $ - Forfeited/Cancelled - $ - Outstanding – December 31, 2019 264,426 $ 0.42 Exercisable – December 31, 2019 117,218 $ 0.42 |
Schedule of Stock Options Outstanding and Exercisable | Options Outstanding Options Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.40- $6.50 322,172 7.86 $ 1.55 141,784 $ 0.42 | Options Outstanding Options Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.40- $0.44 264,426 7.99 $ 0.42 117,218 $ 0.42 |
Schedule of Warrants Activity | The following is a summary of the Company’s warrant activity: Warrants Weighted Average Exercise Price Outstanding – December 31, 2019 22,524 $ 0.40 Exercisable – December 31, 2019 22,524 $ 0.40 Granted 88,335 7.50 Exercised - - Forfeited/Cancelled - - Outstanding – September 30, 2020 110,859 $ 6.06 Exercisable – September 30, 2020 22,524 $ 0.40 | The following is a summary of the Company’s warrant activity: Warrants Weighted Average Exercise Price Outstanding – December 31, 2018 - $ - Exercisable – December 31, 2018 - $ - Granted 22,524 $ 0.40 Exercised - $ - Forfeited/Cancelled - $ - Outstanding – December 31, 2019 22,524 $ 0.40 Exercisable – December 31, 2019 22,524 $ 0.40 |
Schedule of Warrants Outstanding and Exercisable | Options Outstanding Options Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.40 - $7.50 110,859 5.76 $ 6.06 22,524 $ 0.40 | Options Outstanding Options Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Number Exercisable Weighted Average Exercise Price $ 0.40 22,524 9.82 $ 0.40 22,524 $ 0.40 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of Components of Lease Expense | The components of lease expense were as follows: Year Ended Finance leases: Depreciation of assets $ 98,300 Interest on lease liabilities 52,600 Operating Lease Expense 200,800 Total net lease cost $ 351,700 |
Supplemental Balance Sheet Information | Supplemental balance sheet information related to leases was as follows: December 31, 2019 Operating leases: Operating lease ROU assets $ 1,132,700 Total ROU Liabilities $ 1,115,500 Finance leases: Property and equipment, at cost $ 983,400 Accumulated depreciation 250,500 Property and equipment, net $ 732,900 Total Finance lease liabilities $ 520,700 |
Supplemental Cash Flow and Other Information | Supplemental cash flow and other information related to leases was as follows: Year Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ (170,700 ) Financing cash flows from finance leases (185,100 ) Assets obtained in exchange for lease liabilities: Operating leases $ 1,286,200 Finance leases 0 Weighted average remaining lease term (in years): Operating leases 3.8 Finance leases 2.0 Weighted average discount rate: Operating leases 7.00 % Finance leases 7.98 % |
Schedule of Minimum Lease Payments | The minimum lease payments under the terms of the leases are as follows: For the years ended December 31, 2019: Operating Leases Finance Leases Total 2020 $ 345,900 $ 215,600 $ 561,500 2021 320,800 192,600 513,400 2022 304,900 116,400 421,300 2023 199,100 10,900 210,000 2024 120,700 - 120,700 Total Lease payments $ 1,291,400 $ 535,500 $ 1,826,900 Less Amount discount/Interest (175,900 ) (14,800 ) (190,700 ) $ 1,115,500 $ 520,700 $ 1,636,200 |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | The components of net deferred tax assets and liabilities at December 31, 2019 and 2018 are set forth below: December 31,2019 December 31,2018 Deferred tax assets: Net Operating Loss Carryforward $ 2,316,300 $ - Temporary Difference 777,800 Total assets 3,094,100 - Deferred tax liabilities: Depreciation 2,922,500 463,000 Total liabilities 2,922,500 463,000 Net deferred tax Assets (liabilities) 171,600 (463,000 ) |
Schedule of Income Tax Expense and Effective Tax Rates | The components of income tax expense and the effective tax rates for the years ended December 31, 2019 and 2018 are as follows: Years Ended December 31, 2019 2018 Current: Federal $ - $ 54,800 Total Current - 54,800 Deferred: Federal (634,600 ) 463,000 Total Deferred (634,600 ) 463,000 Valuation Allowance - - Total Income Tax (Benefit) Expense $ (634,600 ) $ 517,800 |
Schedule of Income Tax Rate | The expected tax expense (benefit) based on the statutory rate is reconciled with actual tax benefit as follows: 2019 2018 US Federal statutory rate 21 % 21 % Adjustment for Deferred Tax (166 )% 54 % State Income tax rate 0 % 0 % Adjustment for Period as an S-Corp 0 % (13 )% Income tax (benefit) provision (145 )% 62 % |
Nature of Operations and Summ_4
Nature of Operations and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 02, 2019 | Nov. 19, 2018 | |
Non-controlling interest | $ (1,288,700) | $ (1,288,700) | $ (1,060,600) | $ (789,400) | ||||
Reverse stock split | 1-for-2.22 reverse split of the Company's common stock, which was effected on April 15, 2020. The reverse split combined each 2.22 shares of the Company's outstanding common stock into one share of common stock. | |||||||
Number of financial statements, description | All numbers in these financial statements are rounded to the nearest $100. | All numbers in these financial statements are rounded to the nearest $100. | ||||||
Cash equivalents | ||||||||
Allowance for doubtful accounts | 0 | 0 | 11,300 | 0 | ||||
Capitalized interest from related party borrowings | 203,600 | $ 450,000 | 840,000 | $ 710,200 | 1,229,400 | 228,600 | ||
Capitalized interest from third-party borrowings | 783,100 | 260,200 | 1,834,000 | 1,098,900 | 1,563,700 | 1,375,000 | ||
Advertising expense | 0 | $ 4,400 | 8,500 | $ 6,000 | 67,500 | 8,500 | ||
Operating lease | 906,500 | 906,500 | 1,115,500 | $ 474,200 | ||||
Impairment of long-lived assets | ||||||||
Offering costs | $ 1,401,100 | $ 1,401,100 | ||||||
2018 Plan [Member] | ||||||||
Reserved shares of common stock issuance | 675,676 |
Nature of Operations and Summ_5
Nature of Operations and Summary of Significant Accounting Policies (Details Narrative) (10-K) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 02, 2019 | Nov. 19, 2018 | |
Non-controlling interest | $ (1,288,700) | $ (1,288,700) | $ (1,060,600) | $ (789,400) | ||||
Number of financial statements, description | All numbers in these financial statements are rounded to the nearest $100. | All numbers in these financial statements are rounded to the nearest $100. | ||||||
Cash equivalents | ||||||||
Restricted Cash | 139,000 | |||||||
Allowance for doubtful accounts | 0 | 0 | 11,300 | 0 | ||||
Capitalized interest from related party borrowings | 203,600 | $ 450,000 | 840,000 | $ 710,200 | 1,229,400 | 228,600 | ||
Capitalized interest from third-party borrowings | 783,100 | 260,200 | 1,834,000 | 1,098,900 | 1,563,700 | 1,375,000 | ||
Trade accounts receivables | 54,300 | 54,300 | 11,800 | 52,000 | ||||
Advertising expense | 0 | $ 4,400 | 8,500 | $ 6,000 | 67,500 | 8,500 | ||
Operating lease | $ 906,500 | 906,500 | 1,115,500 | $ 474,200 | ||||
Impairment of long-lived assets | ||||||||
2018 Plan [Member] | ||||||||
Reserved shares of common stock issuance | 675,676 |
Nature of Operations and Summ_6
Nature of Operations and Summary of Significant Accounting Policies - Schedule of Statement of Subsidiaries (Details) | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | ||
Saylor View Estates LLC [Member] | |||||
Dates of Formation | Mar. 30, 2014 | Mar. 30, 2014 | |||
Attributable Interest | 51.00% | 51.00% | 51.00% | 51.00% | |
Harbor Excavation, LLC [Member] | |||||
Dates of Formation | [1] | Jul. 3, 2017 | Jul. 3, 2017 | ||
Attributable Interest | [1] | 0.00% | 0.00% | 90.00% | 90.00% |
Harbor Materials, LLC [Member] | |||||
Dates of Formation | Jul. 5, 2018 | Jul. 5, 2018 | |||
Attributable Interest | 100.00% | 100.00% | 100.00% | 100.00% | |
Belfair Apartments, LLC [Member] | |||||
Dates of Formation | Dec. 3, 2019 | Dec. 3, 2019 | |||
Attributable Interest | 100.00% | 100.00% | 100.00% | 0.00% | |
[1] | Harbor Excavation, LLC was voluntarily dissolved with the State of Washington as of June 14, 2019. |
Nature of Operations and Summ_7
Nature of Operations and Summary of Significant Accounting Policies - Schedule of Statement of Subsidiaries (Details) (10-K) | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | ||
Bay Vista Blvd Apartments, LLC [Member] | |||||
Dates of Formation | [1] | May 15, 2017 | |||
Attributable Interest | [1] | 0.00% | 50.00% | ||
Saylor View Estates LLC [Member] | |||||
Dates of Formation | Mar. 30, 2014 | Mar. 30, 2014 | |||
Attributable Interest | 51.00% | 51.00% | 51.00% | 51.00% | |
Harbor Excavation, LLC [Member] | |||||
Dates of Formation | [2] | Jul. 3, 2017 | Jul. 3, 2017 | ||
Attributable Interest | [2] | 0.00% | 0.00% | 90.00% | 90.00% |
Harbor Materials, LLC [Member] | |||||
Dates of Formation | Jul. 5, 2018 | Jul. 5, 2018 | |||
Attributable Interest | 100.00% | 100.00% | 100.00% | 100.00% | |
Werner RD Industrial, LLC [Member] | |||||
Dates of Formation | Dec. 15, 2017 | ||||
Attributable Interest | 100.00% | 100.00% | |||
Belfair Apartments, LLC [Member] | |||||
Dates of Formation | Dec. 3, 2019 | Dec. 3, 2019 | |||
Attributable Interest | 100.00% | 100.00% | 100.00% | 0.00% | |
[1] | Bay Vista Blvd Apartments, LLC was closed as of December 31, 2018 with the IRS and dissolved with the State of Washington as of October 3, 2019. | ||||
[2] | Harbor Excavation, LLC was voluntarily dissolved with the State of Washington as of June 14, 2019. |
Nature of Operations and Summ_8
Nature of Operations and Summary of Significant Accounting Policies - Schedule of Net Income (Loss) Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
Net loss attributable to common stockholders | $ (437,100) | $ (493,400) | $ (1,620,200) | $ (1,608,000) | $ 235,600 | $ (1,390,400) |
Effect of dilutive securities: | ||||||
Diluted net loss | $ (437,100) | $ (493,000) | $ (1,620,200) | $ (1,608,000) | $ 235,600 | $ (1,390,400) |
Weighted average common shares outstanding - basic | 4,180,054 | 3,513,517 | 3,737,318 | 3,513,517 | ||
Dilutive securities (a): Options | ||||||
Dilutive securities (a): Warrants | ||||||
Weighted average common shares outstanding and assumed conversion - diluted | 4,180,054 | 3,513,517 | 3,737,318 | 3,513,517 | ||
Basic net loss per common share | $ (0.10) | $ (0.14) | $ (0.43) | $ (0.46) | ||
Diluted net loss per common share | $ (0.10) | $ (0.14) | $ (0.43) | $ (0.46) | ||
(a) - Anti-dilutive securities excluded: | 164,308 | 102,690 | 164,308 | 102,690 | 139,742 |
Nature of Operations and Summ_9
Nature of Operations and Summary of Significant Accounting Policies - Schedule of Net Income (Loss) Per Share (Details) (10-K) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
Net income (loss) attributable to common stockholders | $ (437,100) | $ (493,400) | $ (1,620,200) | $ (1,608,000) | $ 235,600 | $ (1,390,400) |
Effect of dilutive securities: | ||||||
Diluted net income (loss) | $ (437,100) | $ (493,000) | $ (1,620,200) | $ (1,608,000) | $ 235,600 | $ (1,390,400) |
Weighted average common shares outstanding - basic | 3,513,517 | 3,513,517 | ||||
Dilutive securities (a): Options | ||||||
Dilutive securities (a): Warrants | ||||||
Weighted average common shares outstanding and assumed conversion - diluted | 3,513,517 | 3,513,517 | ||||
Basic net income (loss) per common share | $ 0.07 | $ (0.40) | ||||
Diluted net income (loss) per common share | $ 0.07 | $ (0.40) | ||||
(a) - Anti-dilutive securities excluded: | 164,308 | 102,690 | 164,308 | 102,690 | 139,742 |
Nature of Operations and Sum_10
Nature of Operations and Summary of Significant Accounting Policies - Schedule of Fair Value Assumptions of Share-Based Payments (Details) - $ / shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Risk-free interest rate | 1.56% | |||
Exercise Price | $ 0.18 | $ 0.40 | ||
Expected life of grants | 6 years 6 months 10 days | |||
Expected volatility of underlying stock | 32.34% | |||
Dividends | 0.00% | 0.00% | 0.00% | 0.00% |
Minimum [Member] | ||||
Risk-free interest rate | 0.47% | 1.56% | 2.46% | |
Exercise Price | $ 2.22 | $ 0.40 | ||
Expected life of grants | 2 years 11 months 26 days | 5 years | 2 years 6 months | |
Expected volatility of underlying stock | 32.39% | 31.75% | 26.90% | |
Maximum [Member] | ||||
Risk-free interest rate | 1.46% | 1.84% | 2.59% | |
Exercise Price | $ 7.50 | $ 0.44 | ||
Expected life of grants | 6 years | 6 years 6 months 10 days | 6 years 6 months 3 days | |
Expected volatility of underlying stock | 43.41% | 32.89% | 31.49% |
Nature of Operations and Sum_11
Nature of Operations and Summary of Significant Accounting Policies - Schedule of Fair Value Assumptions of Share-Based Payments (Details) (10-K) - $ / shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Risk-free interest rate | 1.56% | |||
Exercise Price | $ 0.18 | $ 0.40 | ||
Expected life of grants | 6 years 6 months 10 days | |||
Expected volatility of underlying stock | 32.34% | |||
Dividends | 0.00% | 0.00% | 0.00% | 0.00% |
Minimum [Member] | ||||
Risk-free interest rate | 0.47% | 1.56% | 2.46% | |
Exercise Price | $ 2.22 | $ 0.40 | ||
Expected life of grants | 2 years 11 months 26 days | 5 years | 2 years 6 months | |
Expected volatility of underlying stock | 32.39% | 31.75% | 26.90% | |
Maximum [Member] | ||||
Risk-free interest rate | 1.46% | 1.84% | 2.59% | |
Exercise Price | $ 7.50 | $ 0.44 | ||
Expected life of grants | 6 years | 6 years 6 months 10 days | 6 years 6 months 3 days | |
Expected volatility of underlying stock | 43.41% | 32.89% | 31.49% |
Nature of Operations and Sum_12
Nature of Operations and Summary of Significant Accounting Policies - Schedule of Property and Equipment Estimated Useful Lives (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Construction Equipment [Member] | ||
Property and equipment estimated useful life | 10 years | 10 years |
Leasehold Improvements [Member] | ||
Property and equipment useful lives | The lesser of 10 years or the remaining life of the lease | The lesser of 10 years or the remaining life of the lease |
Furniture and Fixtures [Member] | ||
Property and equipment estimated useful life | 5 years | 5 years |
Computers [Member] | ||
Property and equipment estimated useful life | 3 years | 3 years |
Vehicles [Member] | ||
Property and equipment estimated useful life | 10 years | 10 years |
Nature of Operations and Sum_13
Nature of Operations and Summary of Significant Accounting Policies - Schedule of Property and Equipment Estimated Useful Lives (Details) (10-K) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Construction Equipment [Member] | ||
Property and equipment estimated useful life | 10 years | 10 years |
Leasehold Improvements [Member] | ||
Property and equipment useful lives | The lesser of 10 years or the remaining life of the lease | The lesser of 10 years or the remaining life of the lease |
Furniture and Fixtures [Member] | ||
Property and equipment estimated useful life | 5 years | 5 years |
Computers [Member] | ||
Property and equipment estimated useful life | 3 years | 3 years |
Vehicles [Member] | ||
Property and equipment estimated useful life | 10 years | 10 years |
Nature of Operations and Sum_14
Nature of Operations and Summary of Significant Accounting Policies - Schedule of Revenues from Contracts with Customers (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Total Revenue | $ 7,806,500 | $ 6,783,800 | $ 26,077,300 | $ 17,737,900 | $ 30,953,500 | $ 5,730,300 |
Real Estate [Member] | ||||||
Total Revenue | 7,704,300 | 6,616,700 | 25,625,300 | 17,485,900 | 30,683,400 | 5,290,000 |
Construction Materials [Member] | ||||||
Total Revenue | $ 102,200 | $ 167,100 | $ 452,000 | $ 252,000 | $ 270,100 | $ 440,300 |
Nature of Operations and Sum_15
Nature of Operations and Summary of Significant Accounting Policies - Schedule of Revenues from Contracts with Customers (Details) (10-K) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Total Revenue | $ 7,806,500 | $ 6,783,800 | $ 26,077,300 | $ 17,737,900 | $ 30,953,500 | $ 5,730,300 |
Real Estate [Member] | ||||||
Total Revenue | 7,704,300 | 6,616,700 | 25,625,300 | 17,485,900 | 30,683,400 | 5,290,000 |
Construction Materials [Member] | ||||||
Total Revenue | $ 102,200 | $ 167,100 | $ 452,000 | $ 252,000 | $ 270,100 | $ 440,300 |
Restatement of Previously Iss_3
Restatement of Previously Issued Consolidated Financial Statement (Details Narrative) (10-K) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock Based compensation for services | $ 112,000 | |||||
Revenue | $ 7,806,500 | $ 6,783,800 | $ 26,077,300 | $ 17,737,900 | 30,953,500 | $ 5,730,300 |
Cost of sales | $ 7,183,900 | $ 6,964,400 | $ 24,448,100 | $ 17,144,300 | 27,645,100 | $ 4,936,700 |
Saylor View Estates LLC [Member] | ||||||
Cost of sales | 65,200 | |||||
Harbor Materials [Member] | ||||||
Revenue | 135,000 | |||||
Equipment [Member] | ||||||
Loans | $ 705,600 |
Restatement of Previously Iss_4
Restatement of Previously Issued Consolidated Financial Statement - Summary of Consolidated Financial Statements (Details) (10-K) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Real Estate | $ 34,445,200 | $ 24,826,700 | $ 18,449,900 | |||||||||||
TOTAL ASSETS | 45,594,400 | 31,762,300 | 21,266,200 | |||||||||||
Equipment loans | 3,191,600 | 3,476,800 | 997,400 | |||||||||||
Finance Leases | 1,952,100 | 520,700 | 705,600 | |||||||||||
TOTAL LIABILITIES | 37,370,500 | 32,987,200 | 21,850,300 | |||||||||||
Additional Paid In Capital | 130,100 | 119,100 | 112,000 | |||||||||||
(Accumulated Deficit) Retained Earnings | (2,574,500) | (954,300) | (577,600) | |||||||||||
Total Stockholders' Equity | $ 9,512,600 | $ (164,300) | $ 205,300 | $ (164,300) | $ 205,300 | $ 205,300 | $ 205,300 | 9,512,600 | (164,300) | 205,300 | ||||
Non-Controlling Interests | (1,288,700) | (1,060,600) | (789,400) | |||||||||||
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | $ (2,631,800) | (2,198,800) | $ (3,063,200) | $ (2,335,100) | (1,960,300) | (3,063,200) | 8,223,900 | (1,224,900) | (584,100) | $ 1,354,000 | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | 45,594,400 | 31,762,300 | 21,266,200 | |||||||||||
Sales | 7,806,500 | 6,783,800 | 26,077,300 | 17,737,900 | 30,953,500 | 5,730,300 | ||||||||
Cost of Sales | 7,183,900 | 6,964,400 | 24,448,100 | 17,144,300 | 27,645,100 | 4,936,700 | ||||||||
Gross Profit | 622,600 | (180,600) | 1,629,200 | 593,600 | 3,308,400 | 793,600 | ||||||||
Operating Expenses | 1,458,200 | 731,100 | 3,769,900 | 2,556,000 | 3,466,800 | 2,765,900 | ||||||||
Operating Income (loss) | (835,600) | (911,700) | (2,140,700) | (1,962,400) | (158,400) | (1,972,300) | ||||||||
Other Income | 6,800 | 13,000 | 79,200 | 79,100 | 19,200 | |||||||||
Total Other Income (Expense) | (176,300) | (124,300) | (269,100) | (137,000) | (279,200) | 1,131,200 | ||||||||
Income (loss) Before Tax | (1,011,900) | (1,036,000) | (2,409,800) | (2,099,400) | (437,600) | (841,100) | ||||||||
Net Income (loss) | (440,300) | (434,100) | (973,900) | (596,300) | (319,700) | (743,700) | (1,848,300) | (1,659,700) | 197,000 | (1,358,900) | ||||
Net Income Attributable to Non-controlling interest | (3,200) | (102,900) | (228,100) | (51,700) | (38,600) | 31,500 | ||||||||
Net Income Loss Attributable to Stockholders | $ (437,100) | $ (493,400) | $ (1,620,200) | $ (1,608,000) | $ 235,600 | $ (1,390,400) | ||||||||
Net Income (Loss) Per Share - Basic | $ 0.07 | $ (0.40) | ||||||||||||
Weighted Average Common Shares Outstanding - Basis | 3,513,517 | 3,513,517 | ||||||||||||
Balance | (164,300) | 205,300 | $ (164,300) | $ 205,300 | $ 205,300 | |||||||||
Shares issued for Services Net Change | $ 10,789,100 | |||||||||||||
Balance | 9,512,600 | 9,512,600 | (164,300) | $ 205,300 | ||||||||||
Shares issued for Services | 112,000 | |||||||||||||
Real Estate | (8,286,200) | (6,613,100) | (6,089,900) | (7,166,900) | ||||||||||
NET CASH USED IN OPERATING ACTIVITIES | (9,858,700) | (6,325,700) | (3,184,900) | (8,278,000) | ||||||||||
Payments on financing leases | (380,000) | (138,900) | (185,100) | (170,400) | ||||||||||
Payments of Equipment loan | (201,600) | |||||||||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 11,851,300 | 6,711,000 | 3,796,800 | 6,573,900 | ||||||||||
NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH | 1,921,900 | 67,400 | 209,100 | (596,500) | ||||||||||
CASH AND RESTRICTED CASH | 430,000 | 220,900 | 430,000 | 220,900 | 220,900 | 817,400 | ||||||||
CASH AND RESTRICTED CASH | 2,351,900 | $ 288,300 | $ 2,351,900 | 288,300 | 430,000 | 220,900 | ||||||||
Common Stock [Member] | ||||||||||||||
Total Stockholders' Equity | 670,900 | 670,900 | 670,900 | 670,900 | 670,900 | |||||||||
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | 670,900 | 670,900 | 670,900 | 670,900 | 670,900 | 670,900 | 11,957,000 | 670,900 | 670,900 | |||||
Net Income (loss) | ||||||||||||||
Balance | $ 670,900 | $ 670,900 | $ 670,900 | |||||||||||
Balance, shares | 3,513,517 | 3,513,517 | 3,513,517 | 3,513,517 | 3,513,517 | 3,513,517 | 3,513,517 | 3,513,517 | 3,513,517 | |||||
Shares issued for Services Net Change | $ 10,789,100 | |||||||||||||
Shares issued for Services Net Change, shares | 2,031,705 | |||||||||||||
Balance | $ 670,900 | |||||||||||||
Balance, shares | 5,628,048 | 3,513,517 | 3,513,517 | 3,513,517 | 3,513,517 | 3,513,517 | 5,628,048 | 3,513,517 | 3,513,517 | 3,513,517 | ||||
Preferred Stock [Member] | ||||||||||||||
Total Stockholders' Equity | ||||||||||||||
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||||||||
Net Income (loss) | ||||||||||||||
Balance | ||||||||||||||
Balance, shares | ||||||||||||||
Balance | ||||||||||||||
Balance, shares | ||||||||||||||
Additional Paid-In Capital [Member] | ||||||||||||||
Total Stockholders' Equity | $ 112,000 | $ 112,000 | $ 112,000 | $ 112,000 | 112,000 | |||||||||
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | $ 120,200 | $ 119,100 | $ 116,300 | $ 115,500 | 115,000 | 116,300 | 130,100 | 119,100 | 112,000 | 628,100 | ||||
Net Income (loss) | ||||||||||||||
Balance | 112,000 | 112,000 | 112,000 | |||||||||||
Shares issued for Services Net Change | ||||||||||||||
Balance | 112,000 | |||||||||||||
Accumulated Deficit [Member] | ||||||||||||||
Total Stockholders' Equity | (577,600) | (577,600) | (577,600) | (577,600) | (577,600) | |||||||||
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | (2,137,400) | (1,706,300) | (2,776,700) | (2,283,300) | (1,908,800) | (2,776,700) | (2,574,500) | (954,300) | (577,600) | 415,000 | ||||
Net Income (loss) | (437,100) | (431,100) | (752,000) | (493,400) | (318,900) | (795,700) | 235,600 | (1,390,400) | ||||||
Balance | (577,600) | (577,600) | (577,600) | |||||||||||
Shares issued for Services Net Change | ||||||||||||||
Balance | (577,600) | |||||||||||||
Stockholders' Equity (Deficit) [Member] | ||||||||||||||
Total Stockholders' Equity | 205,300 | 205,300 | 205,300 | 205,300 | 205,300 | |||||||||
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | (1,346,300) | (916,300) | (1,989,500) | (1,496,900) | (1,122,900) | (1,989,500) | 9,512,600 | (164,300) | 205,300 | 1,043,100 | ||||
Net Income (loss) | (437,100) | (431,100) | (752,000) | (493,400) | (318,900) | (795,700) | 235,600 | (1,390,400) | ||||||
Balance | 205,300 | 205,300 | 205,300 | |||||||||||
Shares issued for Services Net Change | 10,789,100 | |||||||||||||
Balance | 205,300 | |||||||||||||
Noncontrolling Interest [Member] | ||||||||||||||
Total Stockholders' Equity | (789,400) | (789,400) | (789,400) | (789,400) | (789,400) | |||||||||
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | (1,285,500) | (1,282,500) | (1,073,700) | (838,200) | (837,400) | (1,073,700) | $ (1,288,700) | $ (1,060,600) | (789,400) | 310,900 | ||||
Net Income (loss) | (3,200) | $ (3,000) | $ (221,900) | $ (102,900) | $ (800) | 52,000 | (38,600) | 31,500 | ||||||
Balance | (789,400) | (789,400) | (789,400) | |||||||||||
Shares issued for Services Net Change | ||||||||||||||
Balance | (789,400) | |||||||||||||
As previously Reported [Member] | ||||||||||||||
Real Estate | 18,515,100 | |||||||||||||
TOTAL ASSETS | 21,331,400 | |||||||||||||
Equipment loans | 1,703,000 | |||||||||||||
Finance Leases | ||||||||||||||
TOTAL LIABILITIES | 21,850,300 | |||||||||||||
Additional Paid In Capital | ||||||||||||||
(Accumulated Deficit) Retained Earnings | (432,300) | |||||||||||||
Total Stockholders' Equity | 238,600 | 238,600 | 238,600 | (518,900) | 238,600 | (518,900) | ||||||||
Non-Controlling Interests | (757,500) | |||||||||||||
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | (518,900) | |||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | 21,331,400 | |||||||||||||
Sales | 5,595,300 | |||||||||||||
Cost of Sales | 4,871,500 | |||||||||||||
Gross Profit | 723,800 | |||||||||||||
Operating Expenses | 2,653,900 | |||||||||||||
Operating Income (loss) | (1,930,100) | |||||||||||||
Other Income | 154,200 | |||||||||||||
Total Other Income (Expense) | 1,266,200 | |||||||||||||
Income (loss) Before Tax | (663,900) | |||||||||||||
Net Income (loss) | (1,181,700) | |||||||||||||
Net Income Attributable to Non-controlling interest | 63,400 | |||||||||||||
Net Income Loss Attributable to Stockholders | $ (1,245,100) | |||||||||||||
Net Income (Loss) Per Share - Basic | $ (0.36) | |||||||||||||
Weighted Average Common Shares Outstanding - Basis | 3,513,517 | |||||||||||||
Balance | 238,600 | 238,600 | 238,600 | $ (518,900) | ||||||||||
Balance | 238,600 | |||||||||||||
Shares issued for Services | ||||||||||||||
Real Estate | (7,232,100) | |||||||||||||
NET CASH USED IN OPERATING ACTIVITIES | (8,278,000) | |||||||||||||
Payments on financing leases | ||||||||||||||
Payments of Equipment loan | (372,000) | |||||||||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 6,573,900 | |||||||||||||
NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH | (596,500) | |||||||||||||
CASH AND RESTRICTED CASH | 220,900 | 220,900 | 220,900 | 817,400 | ||||||||||
CASH AND RESTRICTED CASH | 220,900 | |||||||||||||
As previously Reported [Member] | Common Stock [Member] | ||||||||||||||
Total Stockholders' Equity | 670,900 | 670,900 | ||||||||||||
Balance | $ 670,900 | |||||||||||||
Balance, shares | 3,153,154 | |||||||||||||
As previously Reported [Member] | Preferred Stock [Member] | ||||||||||||||
Total Stockholders' Equity | ||||||||||||||
Balance | ||||||||||||||
Balance, shares | ||||||||||||||
As previously Reported [Member] | Additional Paid-In Capital [Member] | ||||||||||||||
Total Stockholders' Equity | ||||||||||||||
Balance | ||||||||||||||
As previously Reported [Member] | Accumulated Deficit [Member] | ||||||||||||||
Total Stockholders' Equity | (432,300) | (432,300) | ||||||||||||
Balance | (432,300) | |||||||||||||
As previously Reported [Member] | Stockholders' Equity (Deficit) [Member] | ||||||||||||||
Total Stockholders' Equity | 238,600 | 238,600 | ||||||||||||
Balance | 238,600 | |||||||||||||
As previously Reported [Member] | Noncontrolling Interest [Member] | ||||||||||||||
Total Stockholders' Equity | (757,500) | $ (757,500) | ||||||||||||
Balance | (757,500) | |||||||||||||
Adjustments [Member] | ||||||||||||||
Real Estate | (65,200) | |||||||||||||
TOTAL ASSETS | (65,200) | |||||||||||||
Equipment loans | (705,600) | |||||||||||||
Finance Leases | 705,600 | |||||||||||||
Additional Paid In Capital | 112,000 | |||||||||||||
(Accumulated Deficit) Retained Earnings | (145,300) | |||||||||||||
Total Stockholders' Equity | (33,300) | (33,300) | (33,300) | (33,300) | (33,300) | |||||||||
Non-Controlling Interests | (31,900) | |||||||||||||
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | (65,200) | |||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ (65,200) | |||||||||||||
Sales | 135,000 | |||||||||||||
Cost of Sales | 65,200 | |||||||||||||
Gross Profit | 69,800 | |||||||||||||
Operating Expenses | 112,000 | |||||||||||||
Operating Income (loss) | (42,200) | |||||||||||||
Other Income | (135,000) | |||||||||||||
Total Other Income (Expense) | (135,000) | |||||||||||||
Income (loss) Before Tax | (177,200) | |||||||||||||
Net Income (loss) | (177,200) | |||||||||||||
Net Income Attributable to Non-controlling interest | (31,900) | |||||||||||||
Net Income Loss Attributable to Stockholders | $ (145,300) | |||||||||||||
Net Income (Loss) Per Share - Basic | $ (0.04) | |||||||||||||
Weighted Average Common Shares Outstanding - Basis | 3,513,517 | |||||||||||||
Balance | (33,300) | (33,300) | (33,300) | |||||||||||
Shares issued for Services Net Change | $ 112,000 | |||||||||||||
Balance | (33,300) | |||||||||||||
Shares issued for Services | 112,000 | |||||||||||||
Real Estate | 65,200 | |||||||||||||
NET CASH USED IN OPERATING ACTIVITIES | ||||||||||||||
Payments on financing leases | (170,400) | |||||||||||||
Payments of Equipment loan | 170,400 | |||||||||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | ||||||||||||||
NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH | ||||||||||||||
CASH AND RESTRICTED CASH | ||||||||||||||
CASH AND RESTRICTED CASH | ||||||||||||||
Adjustments [Member] | Common Stock [Member] | ||||||||||||||
Net Income (loss) | ||||||||||||||
Shares issued for Services Net Change | ||||||||||||||
Shares issued for Services Net Change, shares | 360,363 | |||||||||||||
Adjustments [Member] | Preferred Stock [Member] | ||||||||||||||
Net Income (loss) | ||||||||||||||
Shares issued for Services Net Change | ||||||||||||||
Shares issued for Services Net Change, shares | ||||||||||||||
Adjustments [Member] | Additional Paid-In Capital [Member] | ||||||||||||||
Net Income (loss) | ||||||||||||||
Shares issued for Services Net Change | 112,000 | |||||||||||||
Adjustments [Member] | Accumulated Deficit [Member] | ||||||||||||||
Net Income (loss) | (145,300) | |||||||||||||
Shares issued for Services Net Change | ||||||||||||||
Adjustments [Member] | Stockholders' Equity (Deficit) [Member] | ||||||||||||||
Net Income (loss) | (145,300) | |||||||||||||
Shares issued for Services Net Change | 112,000 | |||||||||||||
Adjustments [Member] | Noncontrolling Interest [Member] | ||||||||||||||
Net Income (loss) | (31,900) | |||||||||||||
Shares issued for Services Net Change |
Concentration, Risks, and Uncer
Concentration, Risks, and Uncertainties (Details Narrative) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Risks and Uncertainties [Abstract] | |||
Uninsured cash | $ 2,100,400 | $ 177,600 | $ 0 |
Concentration, Risks, and Unc_2
Concentration, Risks, and Uncertainties (Details Narrative) (10-K) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Risks and Uncertainties [Abstract] | |||
Uninsured cash | $ 2,100,400 | $ 177,600 | $ 0 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||||||
Depreciation expense | $ 133,400 | $ 135,500 | $ 419,200 | $ 296,000 | $ 427,600 | $ 210,000 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) (10-K) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||||||
Depreciation expense | $ 133,400 | $ 135,500 | $ 419,200 | $ 296,000 | $ 427,600 | $ 210,000 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Total Fixed Assets | $ 7,719,400 | $ 5,799,600 | $ 2,828,800 |
Less Accumulated Depreciation | (1,021,000) | (727,700) | (300,100) |
Fixed Assets, Net | 6,698,400 | 5,071,900 | 2,528,700 |
Machinery and Equipment [Member] | |||
Total Fixed Assets | 7,508,500 | 5,654,100 | 2,377,400 |
Vehicles [Member] | |||
Total Fixed Assets | 73,500 | 83,600 | 49,200 |
Furniture and Fixtures [Member] | |||
Total Fixed Assets | 130,400 | 54,900 | 38,700 |
Leasehold Improvements [Member] | |||
Total Fixed Assets | $ 7,000 | $ 7,000 | $ 7,000 |
Property and Equipment - Sche_2
Property and Equipment - Schedule of Property and Equipment (Details) (10-K) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Total Fixed Assets | $ 7,719,400 | $ 5,799,600 | $ 2,828,800 |
Less Accumulated Depreciation | (1,021,000) | (727,700) | (300,100) |
Fixed Assets, Net | 6,698,400 | 5,071,900 | 2,528,700 |
Land and Improvements [Member] | |||
Total Fixed Assets | 356,500 | ||
Machinery and Equipment [Member] | |||
Total Fixed Assets | 7,508,500 | 5,654,100 | 2,377,400 |
Vehicles [Member] | |||
Total Fixed Assets | 73,500 | 83,600 | 49,200 |
Furniture and Fixtures [Member] | |||
Total Fixed Assets | 130,400 | 54,900 | 38,700 |
Leasehold Improvements [Member] | |||
Total Fixed Assets | $ 7,000 | $ 7,000 | $ 7,000 |
Real Estate - Schedule of Real
Real Estate - Schedule of Real Estate (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Real Estate [Abstract] | |||
Land Held for Development | $ 9,858,100 | $ 9,707,800 | $ 2,982,300 |
Construction in Progress | 23,195,000 | 12,879,600 | 14,529,200 |
Held for Sale | 1,392,100 | 2,239,300 | 938,400 |
Real estate | $ 34,445,200 | $ 24,826,700 | $ 18,449,900 |
Real Estate - Schedule of Rea_2
Real Estate - Schedule of Real Estate (Details) (10-K) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Real Estate [Abstract] | |||
Land Held for Development | $ 9,858,100 | $ 9,707,800 | $ 2,982,300 |
Construction in Progress | 23,195,000 | 12,879,600 | 14,529,200 |
Held for Sale | 1,392,100 | 2,239,300 | 938,400 |
Real estate | $ 34,445,200 | $ 24,826,700 | $ 18,449,900 |
Equity Method Investment (Detai
Equity Method Investment (Details Narrative) (10-K) | Jul. 31, 2018USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | May 31, 2016a |
Revenue | $ 7,806,500 | $ 6,783,800 | $ 26,077,300 | $ 17,737,900 | $ 30,953,500 | $ 5,730,300 | ||
Wheaton Way Apartments, LLC [Member] | ||||||||
Area of land | a | 8 | |||||||
Revenue | $ 29,500,000 | $ 29,500,000 | ||||||
Equity method investment, ownership percentage | 15.00% |
Equity Method Investment - Sche
Equity Method Investment - Schedule of Financial Information of the Investment (Details) (10-K) - USD ($) | Jul. 31, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Cash | $ 2,351,900 | $ 2,351,900 | $ 430,000 | $ 81,900 | |||
Fixed Assets, Net | 6,698,400 | 6,698,400 | 5,071,900 | 2,528,700 | |||
Total Assets | 45,594,400 | 45,594,400 | 31,762,300 | 21,266,200 | |||
Total Liabilities | 37,370,500 | 37,370,500 | 32,987,200 | 21,850,300 | |||
Total Liabilities and Partners' Equity | 45,594,400 | 45,594,400 | 31,762,300 | 21,266,200 | |||
Revenue | 7,806,500 | $ 6,783,800 | 26,077,300 | $ 17,737,900 | 30,953,500 | 5,730,300 | |
Expenses | 1,458,200 | 731,100 | 3,769,900 | 2,556,000 | 3,466,800 | 2,765,900 | |
Net Income | $ (437,100) | $ (493,400) | $ (1,620,200) | $ (1,608,000) | $ 235,600 | (1,390,400) | |
Wheaton Way Apartments, LLC [Member] | |||||||
Cash | |||||||
Other Current Assets | |||||||
Fixed Assets, Net | |||||||
Land | |||||||
Total Assets | |||||||
Accounts Payable | |||||||
Other Current Liabilities | |||||||
Notes Payable | |||||||
Total Liabilities | |||||||
Partners' Equity | |||||||
Total Liabilities and Partners' Equity | |||||||
Revenue | $ 29,500,000 | 29,500,000 | |||||
Expenses | 21,302,000 | ||||||
Net Income | $ 8,198,000 |
Equipment Loans - Schedule of E
Equipment Loans - Schedule of Equipment Loans (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | |||
Equipment Loans | $ 3,191,600 | $ 3,476,800 | $ 997,400 |
Book value of collateralized equipment | $ 3,778,600 | $ 4,539,900 | $ 2,390,000 |
Equipment Loans - Schedule of_2
Equipment Loans - Schedule of Equipment Loans (Details) (Parenthetical) - Bank [Member] - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | Dec. 30, 2019 | |
Debt maturity date, description | Through 2025 | Through 2023 | |
Minimum [Member] | |||
Debt interest rate | 5.08% | 3.58% | |
Monthly payments | $ 428 | $ 1,100 | |
Maximum [Member] | |||
Debt interest rate | 14.41% | 14.41% | |
Monthly payments | $ 10,340 | $ 9,200 |
Equipment Loans - Schedule of_3
Equipment Loans - Schedule of Equipment Loans (Details) (10-K) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | |||
Equipment Loans | $ 3,191,600 | $ 3,476,800 | $ 997,400 |
Book value of collateralized equipment: | $ 3,778,600 | $ 4,539,900 | $ 2,390,000 |
Equipment Loans - Schedule of_4
Equipment Loans - Schedule of Equipment Loans (Details) (10-K) (Parenthetical) - Bank [Member] - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | Dec. 30, 2019 | |
Debt maturity date, description | Through 2025 | Through 2023 | |
Minimum [Member] | |||
Debt interest rate | 5.08% | 3.58% | |
Monthly payments | $ 428 | $ 1,100 | |
Maximum [Member] | |||
Debt interest rate | 14.41% | 14.41% | |
Monthly payments | $ 10,340 | $ 9,200 |
Equipment Loans - Schedule of F
Equipment Loans - Schedule of Future Equipment Loan Maturities (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | |||
2021 | $ 863,600 | ||
2022 | 911,800 | $ 773,700 | |
2023 | 774,500 | 815,500 | |
2024 | 568,200 | 835,800 | |
2025 | 73,500 | 644,800 | |
Equipment Loans | $ 3,191,600 | $ 3,476,800 | $ 997,400 |
Equipment Loans - Schedule of_5
Equipment Loans - Schedule of Future Equipment Loan Maturities (Details) (10-K) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | |||
2020 | $ 911,800 | $ 773,700 | |
2021 | 774,500 | 815,500 | |
2022 | 568,200 | 835,800 | |
2023 | 73,500 | 644,800 | |
2024 | 407,000 | ||
Equipment Loans | $ 3,191,600 | $ 3,476,800 | $ 997,400 |
Construction Loans (Details Nar
Construction Loans (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Debt instrument face amount | $ 18,477,600 | $ 9,647,700 | $ 1,656,200 |
Book value of collateralized real estate | $ 34,445,200 | $ 24,826,700 | $ 18,449,900 |
Construction Loans [Member] | |||
Debt instrument term | 1 year | 1 year | |
Construction Loans [Member] | Minimum [Member] | |||
Debt instrument interest rate percentage | 8.00% | 6.00% | |
Construction Loans [Member] | Maximum [Member] | |||
Debt instrument interest rate percentage | 40.00% | 36.00% |
Construction Loans (Details N_2
Construction Loans (Details Narrative) (10-K) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Debt instrument face amount | $ 18,477,600 | $ 9,647,700 | $ 1,656,200 |
Book value of collateralized real estate | $ 34,445,200 | 24,826,700 | 18,449,900 |
Third Party Lenders [Member] | |||
Debt instrument face amount | $ 9,499,300 | $ 17,172,300 | |
Construction Loans [Member] | |||
Debt instrument term | 1 year | 1 year | |
Construction Loans [Member] | Minimum [Member] | |||
Debt instrument interest rate percentage | 8.00% | 6.00% | |
Construction Loans [Member] | Maximum [Member] | |||
Debt instrument interest rate percentage | 40.00% | 36.00% |
Note Payable PPP (Details Narra
Note Payable PPP (Details Narrative) - USD ($) | Apr. 11, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Debt instrument face amount | $ 18,477,600 | $ 9,647,700 | $ 1,656,200 | |
Term Note [Member] | PPP Loan [Member] | ||||
Debt instrument face amount | $ 582,800 | $ 582,800 | ||
Debt interest rate | 1.00% | |||
Debt instrument payment terms | Beginning in November 2020, the Company will make 18 equal monthly payments of principal and interest with the final payment due in April 2022. |
Note Payable PPP - Schedule of
Note Payable PPP - Schedule of Future Note Payable Loan Maturities (Details) - Term Note [Member] - PPP Loan [Member] | Sep. 30, 2020USD ($) |
2021 | $ 256,400 |
2022 | 326,400 |
Note Payable | $ 582,800 |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
401 (k) [Member] | ||||
Employer contribution to defined contribution plan | $ 0 | $ 0 | $ 29,800 | $ 8,700 |
Defined Contribution Plan (De_2
Defined Contribution Plan (Details Narrative) (10-K) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
401 (k) [Member] | ||||
Employer contribution to defined contribution plan | $ 0 | $ 0 | $ 29,800 | $ 8,700 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | Oct. 04, 2020USD ($) | Sep. 24, 2020USD ($) | Sep. 22, 2020USD ($)a | Sep. 18, 2020USD ($) | Sep. 17, 2020USD ($)a | Mar. 24, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Oct. 06, 2020USD ($) | Jun. 15, 2020USD ($) |
Nonrefundable earnest money | $ 1,370,600 | $ 73,200 | ||||||||||
Payment to acquire property, pland and equipment | $ 401,100 | $ 317,900 | $ 402,800 | $ 513,000 | ||||||||
Subsequent Event [Member] | ||||||||||||
Secured debt in contrustion financing | $ 11,000,000 | |||||||||||
Sale Agreement [Member] | National Public Builder [Member] | ||||||||||||
Amount received from sale of finished lots | $ 12,538,000 | |||||||||||
Nonrefundable earnest money | $ 1,300,000 | |||||||||||
Purchase and Sale Agreement [Member] | Belfair, Washington [Member] | ||||||||||||
Area of land | a | 48 | |||||||||||
Payment to acquire property, pland and equipment | $ 3,915,000 | |||||||||||
Purchase and Sale Agreement [Member] | Bremerton, Washington [Member] | ||||||||||||
Payment to acquire property, pland and equipment | $ 1,500,000 | |||||||||||
Purchase and Sale Agreement [Member] | Port Orchard, Washington [Member] | ||||||||||||
Area of land | a | 9.6 | |||||||||||
Payment to acquire property, pland and equipment | $ 1,440,000 | |||||||||||
Purchase and Sale Agreement [Member] | East Bremerton, Washington [Member] | ||||||||||||
Payment to acquire property, pland and equipment | $ 1,800,000 | |||||||||||
Purchase and Sale Agreement [Member] | South Carolina [Member] | Subsequent Event [Member] | ||||||||||||
Payment to acquire property, pland and equipment | $ 1,524,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | May 15, 2020 | Apr. 19, 2020 | Apr. 19, 2019 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Interest expense | $ 163,900 | $ 131,100 | $ 254,200 | $ 216,200 | $ 358,300 | $ 117,700 | ||||||
Debt instrument face amount | $ 9,647,700 | 18,477,600 | 18,477,600 | 9,647,700 | 1,656,200 | |||||||
Due to related party | 8,100 | 8,100 | ||||||||||
Land and related mining bond | 495,500 | 495,500 | ||||||||||
Amount received in exchage for transfer | 0 | |||||||||||
Distributions to owner | $ 495,500 | 132,600 | $ 55,600 | $ 635,500 | $ 349,400 | $ 734,000 | ||||||
Minimum [Member] | ||||||||||||
Share issued price per share | $ 0.40 | $ 0.40 | ||||||||||
Maximum [Member] | ||||||||||||
Share issued price per share | $ 0.44 | $ 0.44 | ||||||||||
SGRE, LLC [Member] | ||||||||||||
Ownership percentage | 100.00% | 100.00% | ||||||||||
Percentage of commision payable | 25.00% | 25.00% | ||||||||||
Commission expense | $ 209,100 | 0 | $ 209,100 | 0 | $ 0 | |||||||
Due to related party | $ 8,100 | $ 0 | $ 0 | $ 8,100 | ||||||||
Construction Loans [Member] | ||||||||||||
Debt instrument term | 1 year | 1 year | ||||||||||
Construction Loans [Member] | Minimum [Member] | ||||||||||||
Debt instrument interest rate percentage | 6.00% | 8.00% | 8.00% | 6.00% | ||||||||
Construction Loans [Member] | Maximum [Member] | ||||||||||||
Debt instrument interest rate percentage | 36.00% | 40.00% | 40.00% | 36.00% | ||||||||
Construction Loans [Member] | Sound Equity, LLC [Member] | ||||||||||||
Debt instrument term | 1 year | |||||||||||
Loan origination fees | $ 271,900 | 488,500 | $ 396,900 | 488,500 | ||||||||
Debt discounts | 425,000 | $ 853,800 | ||||||||||
Outstanding loan balances | $ 14,935,000 | 8,419,400 | $ 8,419,400 | 14,935,000 | ||||||||
Interest expense | $ 203,600 | 450,000 | 840,000 | 710,200 | ||||||||
Construction Loans [Member] | Sound Equity, LLC [Member] | Minimum [Member] | ||||||||||||
Debt instrument interest rate percentage | 8.00% | 8.00% | ||||||||||
Construction Loans [Member] | Sound Equity, LLC [Member] | Maximum [Member] | ||||||||||||
Debt instrument interest rate percentage | 11.00% | 11.00% | ||||||||||
Construction Loans [Member] | Olympic Views, LLC [Member] | ||||||||||||
Debt instrument interest rate percentage | 12.00% | |||||||||||
Outstanding loan balances | $ 442,000 | $ 0 | $ 0 | 442,000 | ||||||||
Interest expense | $ 8,900 | $ 13,300 | $ 41,900 | $ 24,000 | $ 37,600 | |||||||
Ownership percentage | 50.00% | |||||||||||
Debt instrument face amount | $ 442,000 | |||||||||||
Debt instrument maturity date | Apr. 19, 2020 | Apr. 19, 2020 | ||||||||||
Accrued interest | $ 55,000 | |||||||||||
Share issued price per share | $ 6 | |||||||||||
Stock issued during period shares | 82,826 |
Related Party Transactions (D_2
Related Party Transactions (Details Narrative) (10-K) - USD ($) | Apr. 19, 2020 | Apr. 19, 2019 | Apr. 18, 2017 | Mar. 27, 2017 | Jan. 17, 2017 | Jan. 10, 2017 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Nov. 30, 2019 |
Interest expenses | $ 163,900 | $ 131,100 | $ 254,200 | $ 216,200 | $ 358,300 | $ 117,700 | ||||||||||
Due to related party | $ 8,100 | 8,100 | ||||||||||||||
Land and related mining bond | 495,500 | 495,500 | ||||||||||||||
Amount received in exchage for transfer | 0 | |||||||||||||||
Distributions to owner | 495,500 | 132,600 | $ 55,600 | $ 635,500 | 349,400 | $ 734,000 | ||||||||||
President [Member] | Investment Company [Member] | ||||||||||||||||
Ownership percentage | 50.00% | |||||||||||||||
Reed Kelly [Member] | Investment Company [Member] | ||||||||||||||||
Ownership percentage | 50.00% | |||||||||||||||
Sterling Griffin [Member] | Investment Company [Member] | ||||||||||||||||
Land and related mining bond | 495,500 | 495,500 | ||||||||||||||
Amount received in exchage for transfer | 0 | |||||||||||||||
Distributions to owner | 495,500 | |||||||||||||||
Investment Company [Member] | ||||||||||||||||
Sale of land value | $ 1,277,000 | |||||||||||||||
Exchange for property | 1,250,000 | |||||||||||||||
Distribution to shareholder | 27,000 | |||||||||||||||
Construction Loans One [Member] | Sterling Griffin [Member] | ||||||||||||||||
Notes payable | $ 2,052,600 | 0 | 0 | 0 | ||||||||||||
Debt interest rate | 9.00% | |||||||||||||||
Debt maturity date | Mar. 27, 2018 | |||||||||||||||
Interest expenses | 0 | 51,500 | ||||||||||||||
Construction Loans Two [Member] | Sterling Griffin [Member] | ||||||||||||||||
Notes payable | $ 240,700 | 0 | 0 | 0 | ||||||||||||
Debt interest rate | 9.00% | |||||||||||||||
Debt maturity date | Jan. 10, 2018 | |||||||||||||||
Interest expenses | 0 | 20,000 | ||||||||||||||
Construction Loans Three [Member] | Sterling Griffin [Member] | ||||||||||||||||
Notes payable | $ 113,400 | $ 0 | 0 | 0 | ||||||||||||
Debt interest rate | 9.00% | |||||||||||||||
Debt maturity date | Apr. 18, 2018 | |||||||||||||||
Interest expenses | $ 0 | 5,500 | ||||||||||||||
Construction Loans [Member] | ||||||||||||||||
Debt term | 1 year | 1 year | ||||||||||||||
Construction Loans [Member] | Sterling Griffin [Member] | SGRE, LLC [Member] | ||||||||||||||||
Ownership percentage | 100.00% | 100.00% | ||||||||||||||
Due to related party | $ 8,100 | $ 8,100 | ||||||||||||||
Construction Loans [Member] | Saylor View Estates LLC [Member] | ||||||||||||||||
Notes payable | $ 145,000 | 0 | 0 | 0 | ||||||||||||
Debt interest rate | 12.00% | |||||||||||||||
Debt maturity date | Jan. 17, 2018 | |||||||||||||||
Interest expenses | 0 | 1,400 | ||||||||||||||
Construction Loans [Member] | Sound Capital, LLC [Member] | ||||||||||||||||
Notes payable | 14,935,100 | 14,935,100 | 1,656,200 | |||||||||||||
Interest expenses | 1,191,800 | 228,600 | ||||||||||||||
Debt term | 1 year | |||||||||||||||
Incurred loan origination fees | 771,700 | 771,700 | 0 | |||||||||||||
Amortization of debt discount | 402,300 | $ 0 | ||||||||||||||
Construction Loans [Member] | Sound Capital, LLC [Member] | Minimum [Member] | ||||||||||||||||
Debt interest rate | 9.00% | |||||||||||||||
Construction Loans [Member] | Sound Capital, LLC [Member] | Maximum [Member] | ||||||||||||||||
Debt interest rate | 11.99% | |||||||||||||||
Construction Loans [Member] | Olympic Views, LLC [Member] | ||||||||||||||||
Notes payable | $ 442,000 | $ 442,000 | 442,000 | |||||||||||||
Debt interest rate | 12.00% | |||||||||||||||
Debt maturity date | Apr. 19, 2020 | Apr. 19, 2020 | ||||||||||||||
Interest expenses | $ 8,900 | $ 13,300 | $ 41,900 | $ 24,000 | $ 37,600 | |||||||||||
Ownership percentage | 50.00% | |||||||||||||||
Construction Loans [Member] | Olympic Views, LLC [Member] | President [Member] | ||||||||||||||||
Ownership percentage | 50.00% | |||||||||||||||
Construction Loans [Member] | Olympic Views, LLC [Member] | Reed Kelly [Member] | ||||||||||||||||
Ownership percentage | 50.00% |
Leases (Details Narrative) (10-
Leases (Details Narrative) (10-K) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Lease term | 12 months | |
Rent expense | $ 48,500 |
Leases - Schedule of Components
Leases - Schedule of Components of Lease Expense (Details) (10-K) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Finance leases: Depreciation of assets | $ 98,300 |
Finance leases: Interest on lease liabilities | 52,600 |
Operating Lease Expense | 200,800 |
Total net lease cost | $ 351,700 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) (10-K) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Jan. 02, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||||
Operating lease ROU assets | $ 938,000 | $ 1,132,700 | ||
Total ROU Liabilities | 906,500 | 1,115,500 | $ 474,200 | |
Property and equipment, at cost | 983,400 | |||
Accumulated depreciation | 250,500 | |||
Property and equipment, net | 732,900 | |||
Total Finance lease liabilities | $ 1,952,100 | $ 520,700 | $ 705,600 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow and Other Information (Details) (10-K) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases | $ (170,700) |
Cash paid for amounts included in the measurement of lease liabilities: Financing cash flows from finance leases | (185,100) |
Assets obtained in exchange for lease liabilities: Operating leases | 1,286,200 |
Assets obtained in exchange for lease liabilities: Finance leases | $ 0 |
Weighted average remaining lease term (in years): Operating leases | 3 years 9 months 18 days |
Weighted average remaining lease term (in years): Finance leases | 2 years |
Weighted average discount rate: Operating leases | 7.00% |
Weighted average discount rate: Finance leases | 7.98% |
Leases - Schedule of Minimum Le
Leases - Schedule of Minimum Lease Payments (Details) (10-K) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Jan. 02, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||||
Operating Leases, 2020 | $ 345,900 | |||
Operating Leases, 2021 | 320,800 | |||
Operating Leases, 2022 | 304,900 | |||
Operating Leases, 2023 | 199,100 | |||
Operating Leases, 2024 | 120,700 | |||
Operating Leases, Total Lease payments | 1,291,400 | |||
Operating Leases, Less Amount discount/Interest | (175,900) | |||
Operating lease | $ 906,500 | 1,115,500 | $ 474,200 | |
Finance Leases, 2020 | 215,600 | |||
Finance Leases, 2021 | 192,600 | |||
Finance Leases, 2022 | 116,400 | |||
Finance Leases, 2023 | 10,900 | |||
Finance Leases, 2024 | ||||
Finance Leases, Total Lease payments | 535,500 | |||
Finance Leases, Less Amount discount/Interest | (14,800) | |||
Finance Leases | $ 1,952,100 | 520,700 | $ 705,600 | |
2020 | 561,500 | |||
2021 | 513,400 | |||
2022 | 421,300 | |||
2023 | 210,000 | |||
2024 | 120,700 | |||
Total Lease payments | 1,826,900 | |||
Less Amount discount/Interest | (190,700) | |||
Total lease | $ 1,636,200 |
Income Tax (Details Narrative)
Income Tax (Details Narrative) (10-K) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Income tax description | On December 22, 2018, the "Tax Cuts and Jobs Act" (TCJA) was signed into law which significantly reformed the Internal Revenue Code of 1986, as amended. The TCJA reduces the corporate tax rate to 21 percent beginning January 1, 2018. Note the TCJA changed Net operating loss deductions to indefinite carryforward but limits the use to 80% of future years net income. | |
Federal tax rate | 21.00% | 21.00% |
Deferred tax liability | $ 2,922,500 | $ 463,000 |
Income Tax - Schedule of Deferr
Income Tax - Schedule of Deferred Tax Assets and Liabilities (Details) (10-K) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Net Operating Loss Carryforward | $ 2,316,300 | |
Temporary Difference | 777,800 | |
Total assets | 3,094,100 | |
Depreciation | 2,922,500 | 463,000 |
Total liabilities | 2,922,500 | 463,000 |
Net deferred tax Assets (liabilities) | $ 171,600 | $ (463,000) |
Income Tax - Schedule of Income
Income Tax - Schedule of Income Tax Expense and Effective Tax Rates (Details) (10-K) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||||||
Current: Federal | $ 54,800 | |||||
Total Current | 54,800 | |||||
Deferred: Federal | (634,600) | 463,000 | ||||
Total Deferred | (634,600) | 463,000 | ||||
Valuation Allowance | ||||||
Total Income Tax (Benefit) Expense | $ (571,600) | $ (439,700) | $ (561,500) | $ (439,700) | $ 634,600 | $ (517,800) |
Income Tax - Schedule of Inco_2
Income Tax - Schedule of Income Tax Rate (Details) (10-K) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
US Federal statutory rate | 21.00% | 21.00% |
Adjustment for Deferred Tax | (166.00%) | 54.00% |
State Income tax rate | 0.00% | 0.00% |
Adjustment for Period as an S-Corp | 0.00% | 13.00% |
Income tax (benefit) provision | (145.00%) | 62.00% |
Stockholders' Equity (Deficit_2
Stockholders' Equity (Deficit) (Details Narrative) - USD ($) | Sep. 30, 2020 | Sep. 01, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Net proceeds from issuance of common stock | $ 10,789,100 | |||||||
Options issued | 93,784 | 106,762 | 157,664 | |||||
Options exercise price | $ 4.32 | $ 0.40 | $ 0.42 | |||||
Aggregate fair value of options | $ 132,700 | $ 132,700 | $ 132,700 | |||||
Options vesting period | 10 years | |||||||
Vesting period description | vest from February 7, 2021 through September 31, 2022 | |||||||
Options [Member] | ||||||||
Aggregate fair value of options | 1,304,800 | 1,304,800 | $ 1,304,800 | $ 0 | ||||
Share-based compenstion | 9,900 | $ 800 | 11,000 | $ 4,300 | ||||
Unrecognzied share-based compensation | 131,100 | 131,100 | 131,100 | |||||
Intrinsic value of exercisable options | 725,800 | 725,800 | 725,800 | $ 0 | ||||
Warrants [Member] | ||||||||
Exercises price per share | $ 0.40 | |||||||
Intrinsic value of warrants outstanding | 115,800 | 115,800 | 115,800 | $ 115,800 | ||||
Intrinsic value of warrants exercisable | 0 | 0 | $ 0 | $ 0 | ||||
Employees [Member] | ||||||||
Options issued | 88,742 | |||||||
Options exercise price | $ 0.40 | |||||||
Aggregate fair value of options | $ 7,500 | $ 7,500 | $ 7,500 | |||||
Options vesting period | 3 years | |||||||
Minimum [Member] | ||||||||
Share issued price per share | $ 0.40 | |||||||
Options exercise price | $ 2.22 | |||||||
Maximum [Member] | ||||||||
Share issued price per share | $ 0.44 | |||||||
Options exercise price | 6.50 | |||||||
IPO [Member] | ||||||||
Stock issued during period shares | 2,031,705 | |||||||
Share issued price per share | $ 6 | $ 6 | $ 6 | |||||
Number of common stock share sold | 265,005 | |||||||
Gross proceeds from issuance common stock | $ 12,190,200 | |||||||
Net proceeds from issuance of common stock | $ 10,789,100 | |||||||
Warrants to purchase aggregate shares of common stock | 88,335 | 88,335 | 88,335 | |||||
Exercises price per share | $ 7.50 | $ 7.50 | $ 7.50 | |||||
Term of warrants | 4 years | 4 years | 4 years | |||||
Fair value of warrants | $ 167,400 | $ 167,400 | $ 167,400 | $ 0 | ||||
IPO [Member] | Olympic Views, LLC [Member] | ||||||||
Share issued price per share | $ 6 | $ 6 | $ 6 | |||||
Shares issued on conversion of debt | 82,826 | |||||||
Value of shares issued on conversion of debt | $ 442,000 | |||||||
Accrued interest | $ 55,000 | $ 55,000 | $ 55,000 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) (10-K) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock options, term | 7 years 11 months 26 days | ||
Stock options, vesting period | 10 years | ||
Options, intrinsic value for outstanding | $ 132,700 | ||
Warrants [Member] | |||
Warrants, intrinsic value for outstanding | $ 0 | $ 0 | |
Warrants, intrinsic value for exercisable | $ 0 | 0 | |
Warrants exercise price | $ 0.40 | ||
Minimum [Member] | |||
Stock options exercise price | 0.40 | ||
Maximum [Member] | |||
Stock options exercise price | $ 0.44 | ||
Consultants [Member] | Warrants [Member] | |||
Warrants issued | 22,524 | ||
Warrants exercise price | $ 0.40 | ||
Warrants term | 10 years | ||
Fair value of warrants | $ 1,600 | ||
Options [Member] | |||
Stock-Based Compensation | 5,500 | ||
Unrecognized share-based compensation | 12,600 | ||
Options, intrinsic value for outstanding | 0 | 0 | |
Options, intrinsic value for exercisable | $ 0 | $ 0 | |
Options [Member] | Board of Directors and Employee [Member] | |||
Stock issued during period shares | 106,762 | 157,664 | |
Stock options exercise price | $ 0.40 | ||
Stock options, term | 10 years | ||
Stock options, vesting period | 3 years | ||
Aggregated fair value of stock options | $ 9,000 | $ 9,200 | |
Options [Member] | Board of Directors and Employee [Member] | Minimum [Member] | |||
Stock options exercise price | $ 0.40 | ||
Stock options, term | 5 years | ||
Stock options, vesting period | 1 year | ||
Options [Member] | Board of Directors and Employee [Member] | Maximum [Member] | |||
Stock options exercise price | $ 0.44 | ||
Stock options, term | 10 years | ||
Stock options, vesting period | 3 years |
Stockholders' Equity (Deficit_3
Stockholders' Equity (Deficit) - Schedule of Stock Options Activity (Details) - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | |||
Options, Outstanding, Beginning balance | 264,426 | 157,664 | |
Options Exercisable, Beginning balance | 117,218 | ||
Options, Granted | 93,784 | 106,762 | 157,664 |
Options, Exercised | |||
Options, Forfeited/Cancelled | (36,038) | ||
Options, Outstanding, Ending balance | 322,172 | 264,426 | 157,664 |
Options Exercisable, , Ending balance | 141,784 | 117,218 | |
Weighted Average Exercise Price, Outstanding, Beginning balance | $ 0.42 | $ 0.42 | |
Weighted Average Exercise Price, Exercisable | 0.42 | ||
Weighted Average Exercise Price, Granted | 4.32 | 0.40 | 0.42 |
Weighted Average Exercise Price, Exercised | |||
Weighted Average Exercise Price, Forfeited/Cancelled | 0.40 | ||
Weighted Average Exercise Price, Outstanding, Ending balance | 1.55 | 0.42 | 0.42 |
Weighted Average Exercise Price, Exercisable | $ 0.42 | $ 0.42 |
Stockholders' Deficit - Schedul
Stockholders' Deficit - Schedule of Stock Options Activity (Details) (10-K) - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | |||
Options, Outstanding, Beginning balance | 264,426 | 157,664 | |
Options Exercisable, Beginning balance | 117,218 | ||
Options, Granted | 93,784 | 106,762 | 157,664 |
Options, Exercised | |||
Options, Forfeited/Cancelled | (36,038) | ||
Options, Outstanding, Ending balance | 322,172 | 264,426 | 157,664 |
Options Exercisable, , Ending balance | 141,784 | 117,218 | |
Weighted Average Exercise Price, Outstanding, Beginning balance | $ 0.42 | $ 0.42 | |
Weighted Average Exercise Price, Exercisable | 0.42 | ||
Weighted Average Exercise Price, Granted | 4.32 | 0.40 | 0.42 |
Weighted Average Exercise Price, Exercised | |||
Weighted Average Exercise Price, Forfeited/Cancelled | 0.40 | ||
Weighted Average Exercise Price, Outstanding, Ending balance | 1.55 | 0.42 | 0.42 |
Weighted Average Exercise Price, Exercisable | $ 0.42 | $ 0.42 |
Stockholders' Equity (Deficit_4
Stockholders' Equity (Deficit) - Schedule of Stock Options Outstanding and Exercisable (Details) - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Exercise Price | |||
Number of Option Outstanding | 322,172 | ||
Weighed Averate Remaining Contractual Life (in years) | 7 years 10 months 10 days | ||
Weighted Average Exercise Price, Outstanding, Ending balance | $ 1.55 | 0.42 | 0.42 |
Number of Option Exercisable | 141,784 | ||
Weighted Average Exercise Price, Exercisable | $ 0.42 | $ 0.42 | |
Minimum [Member] | |||
Exercise Price | 0.40 | ||
Maximum [Member] | |||
Exercise Price | $ 6.50 |
Stockholders' Deficit - Sched_2
Stockholders' Deficit - Schedule of Stock Options Outstanding and Exercisable (Details) (10-K) - $ / shares | 12 Months Ended | |||
Dec. 31, 2019 | Sep. 30, 2020 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Option Outstanding | 264,426 | 322,172 | 157,664 | |
Weighed Averate Remaining Contractual Life (in years) | 7 years 11 months 26 days | |||
Weighted Average Exercise Price, Outstanding, Ending balance | $ 0.42 | $ 1.55 | $ 0.42 | |
Number of Option Exercisable | 117,218 | 141,784 | ||
Weighted Average Exercise Price, Exercisable | $ 0.42 | $ 0.42 | ||
Minimum [Member] | ||||
Exercise Price | 0.40 | |||
Maximum [Member] | ||||
Exercise Price | $ 0.44 |
Stockholders' Equity (Deficit_5
Stockholders' Equity (Deficit) - Schedule of Warrants Activity (Details) - Warrants [Member] - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Warrants, Outstanding, Beginning | 22,524 | |
Warrants Exercisable | 22,524 | |
Warrants, Granted | 88,335 | 22,524 |
Warrants, Exercised | ||
Warrants, Forfeited/Cancelled | ||
Warrants, Outstanding, Ending | 110,859 | 22,524 |
Warrants Exercisable | 22,524 | 22,524 |
Weighted Average Exercise Price, Outstanding, Beginning | $ 0.40 | |
Weighted Average Exercise Price, Exercisable | 0.40 | |
Weighted Average Exercise Price, Granted | 7.50 | 0.40 |
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price, Forfeited/Cancelled | ||
Weighted Average Exercise Price, Outstanding, Ending | 6.06 | 0.40 |
Weighted Average Exercise Price, Exercisable | $ 0.40 | $ 0.40 |
Stockholders' Deficit - Sched_3
Stockholders' Deficit - Schedule of Warrants Activity (Details) (10-K) - Warrants [Member] - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Warrants, Outstanding, Beginning | 22,524 | |
Warrants Exercisable | 22,524 | |
Warrants, Granted | 88,335 | 22,524 |
Warrants, Exercised | ||
Warrants, Forfeited/Cancelled | ||
Warrants, Outstanding, Ending | 110,859 | 22,524 |
Warrants Exercisable | 22,524 | 22,524 |
Weighted Average Exercise Price, Outstanding, Beginning | $ 0.40 | |
Weighted Average Exercise Price, Exercisable | 0.40 | |
Weighted Average Exercise Price, Granted | 7.50 | 0.40 |
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price, Forfeited/Cancelled | ||
Weighted Average Exercise Price, Outstanding, Ending | 6.06 | 0.40 |
Weighted Average Exercise Price, Exercisable | $ 0.40 | $ 0.40 |
Stockholders' Equity (Deficit_6
Stockholders' Equity (Deficit) - Schedule of Warrants Outstanding and Exercisable (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Number of Option Outstanding | 322,172 | |
Warrants [Member] | ||
Weighted Average Exercise Price, Exercisable | $ 0.40 | |
Number of Option Outstanding | 110,859 | |
Weighed Averate Remaining Contractual Life (in years) | 5 years 9 months 3 days | 9 years 9 months 25 days |
Weighted Average Exercise Price | $ 6.06 | |
Number of Option Exercisable | 22,524 | |
Weighted Average Exercise Price, Ending balance | $ 0.40 | |
Warrants [Member] | Minimum [Member] | ||
Weighted Average Exercise Price, Exercisable | 0.40 | |
Warrants [Member] | Maximum [Member] | ||
Weighted Average Exercise Price, Exercisable | $ 7.50 |
Stockholders' Deficit - Sched_4
Stockholders' Deficit - Schedule of Warrants Outstanding and Exercisable (Details) (10-K) - Warrants [Member] - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Exercise price | $ 0.40 | ||
Number of Option Outstanding | 110,859 | 22,524 | |
Weighed Averate Remaining Contractual Life (in years) | 5 years 9 months 3 days | 9 years 9 months 25 days | |
Weighted Average Exercise Price | $ 6.06 | $ 0.40 | |
Number of Option Exercisable | 22,524 | 22,524 | |
Weighted Average Exercise Price, Ending balance | $ 0.40 | $ 0.40 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) (10-K) - USD ($) | Sep. 30, 2020 | Feb. 06, 2020 | Jan. 29, 2020 | Jan. 15, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Debt principal amount | $ 18,477,600 | $ 9,647,700 | $ 1,656,200 | ||||
Belfair Apartments, LLC [Member] | |||||||
Debt interest rate | 100.00% | 100.00% | 100.00% | 0.00% | |||
Subsequent Event [Member] | Construction Loans [Member] | |||||||
Debt principal amount | $ 7,250,000 | ||||||
Debt interest rate | 12.00% | ||||||
Subsequent Event [Member] | Belfair Apartments, LLC [Member] | |||||||
Debt principal amount | $ 500,000 | $ 1,500,000 | |||||
Debt interest rate | 11.00% | 12.00% | |||||
Subsequent Event [Member] | Belfair Apartments, LLC [Member] | Lender [Member] | |||||||
Land | $ 4,200,000 | $ 4,200,000 |