Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 14, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | Harbor Custom Development, Inc. | |
Entity Central Index Key | 0001784567 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex-Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 14,890,094 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
ASSETS | ||
Real Estate | $ 35,669,000 | $ 20,370,300 |
Property, Plant and Equipment, net | 8,704,900 | 8,176,000 |
Right of Use Assets | 802,900 | 873,800 |
Cash | 9,047,000 | 2,396,500 |
Prepaid Expense | 1,502,800 | 1,658,000 |
Retainage Receivable | 250,000 | |
Accounts Receivable, net | 34,600 | 78,200 |
Deferred Offering Costs | 37,800 | 65,100 |
TOTAL ASSETS | 56,049,000 | 33,617,900 |
LIABILITIES | ||
Construction Loans, net of Debt Discount of $375,000 and $502,400 , respectively | 9,292,000 | 9,590,100 |
Construction Loans - Related Parties, net of Debt Discount of $680,900 and $670,200, respectively | 6,093,600 | 5,819,700 |
Equipment Loans | 5,905,300 | 5,595,500 |
Accounts Payable and Accrued Expenses | 2,606,200 | 2,700,000 |
Operating Lease Liabilities | 775,600 | 841,700 |
Finance Leases | 898,100 | 999,400 |
Deferred Revenue | 896,300 | |
Note Payable PPP | 5,900 | 19,300 |
Note Payable D&O Insurance | 372,700 | 741,200 |
TOTAL LIABILITIES | 25,949,400 | 27,203,200 |
COMMITMENTS AND CONTINGENCIES - SEE NOTE 10 | ||
STOCKHOLDERS' EQUITY | ||
Preferred Stock, No Par 10,000,000 shares authorized and 0 issued and outstanding at March 31, 2021 and December 31, 2020 | ||
Common Stock, No Par 50,000,000 shares authorized and 14,890,094 and 5,636,548 issued and outstanding at March 31, 2021 and December 31, 2020 | 37,057,900 | 11,956,900 |
Additional Paid In Capital | 367,900 | 234,800 |
Accumulated Deficit | (6,036,900) | (4,487,100) |
Total Stockholders' Equity | 31,388,900 | 7,704,600 |
Non-Controlling Interest | (1,289,300) | (1,289,900) |
TOTAL STOCKHOLDERS' EQUITY | 30,099,600 | 6,414,700 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 56,049,000 | $ 33,617,900 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Construction Loans, net of Debt Discount | $ 375,000 | $ 502,400 |
Construction Loans - Related Parties, net of Debt Discount | $ 680,900 | $ 670,200 |
Preferred Stock, no par value | ||
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common Stock, no par value | ||
Common Stock, shares authorized | 50,000,000 | 50,000,000 |
Common Stock, shares issued | 14,890,094 | 5,636,548 |
Common Stock, shares outstanding | 14,890,094 | 5,636,548 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Sales | $ 13,874,200 | $ 9,941,000 |
Cost of Sales | 13,267,000 | 9,828,200 |
Gross Profit | 607,200 | 112,800 |
Operating Expenses | 2,049,800 | 1,029,400 |
Operating Loss | (1,442,600) | (916,600) |
Other Income (Expense) | ||
Loss on Sale of Equipment | (35,900) | (15,500) |
Other Income (Expense) | 27,400 | |
Interest Expense | (98,100) | (71,600) |
Total Other Income (Expense) | (106,600) | (87,100) |
Loss Before Income Tax | (1,549,200) | (1,003,700) |
Income Tax Benefit (Expense) | 29,800 | |
Net Loss | (1,549,200) | (973,900) |
Net (Loss) Income Attributable to Non-controlling interests | 600 | (221,900) |
Net Loss Attributable to Stockholders | $ (1,549,800) | $ (752,000) |
Net Loss Per Share - Basic and Diluted | $ (0.12) | $ (0.21) |
Weighted Average Common Shares Outstanding - Basic and Diluted | 13,269,055 | 3,513,517 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Unaudited) - USD ($) | Common Stock [Member] | Preferred Stock [Member] | Additional Paid in Capital [Member] | Accumulated (Deficit) [Member] | Stockholders' Equity (Deficit) [Member] | Noncontrolling Interest [Member] | Total |
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 | ||||||
Stock Compensation Expense | |||||||
Net (Loss) Income | (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, 2020 | $ 11,956,900 | 234,800 | (4,487,100) | 7,704,600 | (1,289,900) | 6,414,700 | |
Balance, shares at Dec. 31, 2020 | 5,636,548 | ||||||
Net proceeds issuance of stock | $ 25,101,000 | 25,101,000 | 25,101,000 | ||||
Net proceeds issuance of stock, shares | 9,200,000 | ||||||
Exercise of stock options | 18,000 | 18,000 | 18,000 | ||||
Exercise of stock options, shares | 45,046 | ||||||
Stock Compensation Expense | 115,100 | 115,100 | 115,100 | ||||
Stock Compensation Expense, shares | 8,500 | ||||||
Net (Loss) Income | (1,549,800) | (1,549,800) | 600 | (1,549,200) | |||
Balance at Mar. 31, 2021 | $ 37,057,900 | $ 367,900 | $ (6,036,900) | $ 31,388,900 | $ (1,289,300) | $ 30,099,600 | |
Balance, shares at Mar. 31, 2021 | 14,890,094 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net (loss) | $ (1,549,200) | $ (973,900) |
Adjustments to reconcile net loss to net cash from operating activities: | ||
Depreciation | 240,200 | 141,900 |
Amortization of right of use assets | 70,900 | 63,700 |
Forgiveness on PPP loan | (10,000) | |
Loss on sale of equipment | 35,900 | 15,500 |
Stock compensation | 115,100 | |
Net change in assets and liabilities: | ||
Accounts receivable | 43,600 | 9,000 |
Retainage receivable | (250,000) | |
Prepaid expenses | 155,200 | 35,800 |
Real estate | (14,712,100) | (1,487,500) |
Deferred revenue | (896,300) | 35,500 |
Deferred income tax | (29,800) | |
Payments on right of use liability | (66,100) | (82,800) |
Accounts payable and accrued expenses | (93,800) | (539,100) |
NET CASH (USED IN) OPERATING ACTIVITIES | (16,916,600) | (2,811,700) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property and equipment | (149,100) | (5,200) |
Proceeds on the sale of equipment | 69,500 | 145,400 |
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES | (79,600) | 140,200 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Construction loans, net | (425,500) | 5,994,300 |
Financing fees construction loans | (92,900) | (207,200) |
Construction loans related parties, net | 284,500 | (2,697,300) |
Financing fees related party construction loans | (376,900) | |
Payments on financing leases | (101,300) | (145,600) |
Payments on PPP loan | (3,400) | |
Due to related party | (5,000) | |
Repayments on note payable D&O insurance | (368,500) | |
Net proceeds from issuance of common stock | 25,101,000 | |
Repayment on equipment loans | (415,600) | (196,300) |
Proceeds from exercise of stock options | 18,000 | |
Deferred offering cost | 27,300 | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 23,646,700 | 2,742,900 |
NET INCREASE IN CASH | 6,650,500 | 71,400 |
CASH AT BEGINNING OF YEAR | 2,396,500 | 430,000 |
CASH AT END OF PERIOD | 9,047,000 | 501,400 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Interest paid | 98,100 | 71,600 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Financing of assets additions | 725,400 | |
Amortization of debt discount capitalized | $ 586,600 |
Nature of Operations and Summar
Nature of Operations and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
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 multi-family dwellings in the Puget Sound region of Washington, California, and Texas. The Company utilizes its heavy equipment resources to develop an inventory of finished lots and provide development infrastructure construction, on a contract basis, for 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 on August 28, 2020. Principles of Consolidation The consolidated financial statements include the following subsidiaries of Harbor Custom Development, Inc. as of the reporting period ending dates as follows (all entities are formed as Washington LLCs): Attributable Interest March 31, December 31, Names Dates of Formation 2021 2020 Saylor View Estates, LLC March 30, 2014 51 % 51 % Harbor Materials, LLC* July 5, 2018 N/A 100 % Belfair Apartments, LLC December 3, 2019 100 % 100 % * Harbor Materials, LLC was voluntarily dissolved with the State of Washington as of January 29, 2021. All intercompany transactions and balances have been eliminated in consolidation. As of March 31, 2021 and December 31, 2020, the aggregate non-controlling interest was $(1,289,300) and $(1,289,900), respectively. 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 Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission (“SEC”) on March 31, 2021. 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, 2020 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, 2021. 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 (“GAAP”). Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used. 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 (currently the Compensation Committee) to determine the issuance of incentive stock options and non-qualified stock options to eligible employees and outside directors and consultants of the Company. The Company reserved 675,676 shares of common stock for issuance under the 2018 Plan. Effective as of December 3, 2020, the Company’s Board of Directors and Stockholders approved and adopted the 2020 Restricted Stock Plan (the “2020 Plan”). The 2020 Plan allows the Administrator (currently the Compensation Committee) to determine the issuance of restricted stock to eligible officers, directors, and key employees. The Company reserved 700,000 shares of common stock for issuance under the 2020 Plan. The Company accounts for stock-based compensation in accordance with Accounting Standards codification (“ASC”) Topic 718, “Compensation – Stock Compensation” (“ASC 718”) which establishes financial accounting and reporting standards for stock-based employee compensation. It defines a fair value-based method of accounting for an employee stock option or similar equity instrument. The Company recognizes all forms of share-based payments, including stock option grants, warrants, and restricted stock grants at their fair value on the grant date, which are based on the estimated number of awards that are ultimately expected to vest. Options and warrants are valued using a Black-Scholes option pricing model. Grants of share-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the share-based payment. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation expense 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 three months ended March 31, 2021 and 2020 when computing fair value of share-based payments, the Company has considered the following variables: March 31, 2021 March 31, 2020 Risk-free interest rate 0.23 % 1.46 % Exercise price $ 3.75 $ 2.22 Expected life of grants 2.75 years 5.64 years Expected volatility of underlying stock 53.52 % 32.39 % 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 the expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. The share price as of the grant date was determined by an independent third party 409(a) valuation until the Company’s stock became publicly traded. Now the share price is the public 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 Financial Accounting Standards Board (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 arrangements, stock options, or warrants. The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net loss attributable to common stockholders per common share. March 31, 2021 March 31, 2020 Numerator: Net (loss) attributable to common stockholders $ (1,549,800 ) $ (752,000 ) Effect of dilutive securities: - - Diluted net (loss) $ (1,549,800 ) $ (752,000 ) Denominator: Weighted average common shares outstanding - basic 13,269,055 3,513,517 Dilutive securities (a): Options - - Warrants - - Weighted average common shares outstanding and assumed 13,269,055 3,513,517 conversion – diluted Basic net (loss) per common share $ (0.12 ) $ (0.21 ) Diluted net (loss) per common share $ (0.12 ) $ (0.21 ) (a) - Anti-dilutive securities excluded: 278,870 140,695 Fair Value of Financial Instruments For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the Company’s short-term financial instruments approximates fair value due to the relatively short period to maturity for these instruments. Cash and Cash Equivalents 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 March 31, 2021 and December 31, 2020. 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 $44,100 and $0 as of March 31, 2021 and December 31, 2020. respectively. 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 FASB ASC 805, “Business Combinations,” where acquired assets are recorded at fair value. Interest, property taxes, insurance, and other incremental costs (including salaries) directly related to a project are capitalized during the construction period of major facilities and land improvements. The capitalization period begins when activities to develop the parcel commence and ends when the asset constructed is completed. The capitalized costs are recorded as part of the asset to which they relate and are expensed when the underlying asset is sold. The Company capitalized interest from related party borrowings of $185,300 and $313,300 for the three months ended March 31, 2021 and 2020, respectively. The Company capitalized interest from third-party borrowings of $210,900 and $393,100 for the three months ended March 31, 2021 and 2020, 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 contract date; (5) The property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (6) Actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. When all 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 March 31, 2021 and December 31, 2020, the Company did not have any projects that qualified for an impairment charge. Revenue and Cost Recognition 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 goods 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 customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, performance obligations are satisfied. A detailed breakdown of the five-step process for recognition of Real Estate Revenue related to the sale of homes is as follows: 1. Identify the contract with a customer. The Company signs an agreement with a home buyer 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 are required to meet certain specifications that are outlined in the contract. 3. Determine the transaction price. The transaction price is fixed and specified in the contract. Any subsequent change orders or price changes are required to be approved by both parties. 4. Allocation of the transaction price to performance obligations in the contract. 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 any further performance obligations once title is transferred. A detailed breakdown of the five-step process for the recognition of Real Estate Revenue related to the sale of completed lots is as follows: 1. Identify the contract with a customer. The Company signs an agreement with a home builder to purchase completed lot(s). 2. Identify the performance obligations in the contract. Performance obligations of the Company include delivering a developed lot to the customer, which are required to meet certain specifications that are outlined in the contract. 3. Determine the transaction price. The transaction price is fixed and specified in the contract. Any subsequent change orders or price changes are required to be approved by both parties. 4. Allocation of the transaction price to performance obligations in the contract. Each lot 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 any 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. The performance obligation is to deliver or receive materials from customers 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 is 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 March 31: 2021 2020 Real Estate - homes $ 6,814,200 $ 9,904,600 Real Estate - lots 7,000,000 - Construction Materials 60,000 36,400 Total Revenue $ 13,874,200 $ 9,941,000 Cost of Sales Land acquisition costs are allocated to each lot based on the size of the lot in relation to the size of the total project. Development cost and capitalized interest are allocated to lots sold based on the same criteria. 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 three months ended March 31, 2021 and 2020 were $500 and $7,500, respectively. Leases On January 1, 2019, the Company adopted ASU 2016-02 “Leases” (Topic 842) which amended guidance for lease arrangements to increase transparency and comparability by providing additional information to users of financial statements regarding an entity’s leasing activities. 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; 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. Management applies the criteria established in the to determine if any valuation allowances are needed each year. The Company recognizes a tax benefit for an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. There are no uncertain tax positions as of March 31, 2021 and December 31, 2020. Recent Accounting Pronouncements On December 18, 2019, the FASB released Topic 740 (the “Update”). FASB 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 adoption of the Update did not have a material impact on the Company. 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 the estimated undiscounted future cash flow expected to result from use of the assets is less than carrying value. If impairment is present, the carrying value of the impaired asset is reduced to its fair value. Fair value is determined based on discounted cash flow or appraised values, depending on the nature of the assets. As of March 31, 2021 and December 31, 2020, 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.” On January 15 and 20, 2021, the Company closed on a follow-on public offering and overallotment option, respectively, of its common stock. During 2020, the Company incurred approximately $65,100 of capitalizable costs associated with the follow-on public offering, which were netted against the proceeds received in 2021. These costs were capitalized as of December 31, 2020 and are shown on the Company’s balance sheet as Deferred Offering Costs. The Company incurred and capitalized deferred offering costs for the three months ended March 31, 2021 of $37,800 relating to a future preferred stock offering. |
Concentration, Risks, and Uncer
Concentration, Risks, and Uncertainties | 3 Months Ended |
Mar. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
Concentration, 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 $8,547,000 and $2,146,000 as of March 31, 2021 and December 31, 2020, respectively. Revenue Concentrations For the three months ended March 31, 2021 and 2020, revenue from Lennar Northwest, Inc. (“Lennar”) was $7,000,000 and $0, respectively. This represented 50% and 0% of the Company’s revenue for the three months ended March 31, 2021 and 2020, respectively. COVID-19 On March 25, 2020, the Governor of Washington imposed a complete moratorium on construction of single-family low-risk construction in the State (the “Moratorium”). The Company had to cease construction operations on that date. The Moratorium was lifted on April 24, 2020, provided that safety measures were implemented, including the creation of a COVID-19 safety plan, exposure response procedure plan, and mandatory construction site safety meetings. The Company implemented the safety measures and re-started housing construction activities. The possibility remains that the Governor could impose new or additional requirements or restrict or completely halt construction again depending on the development of the COVID-19 infection rate. The Company has not, at this time, experienced any cancelled sales contracts. The Company has experienced some supply-chain issues with both cabinetry and appliances related to COVID-19. As of the date of this report, the Company’s projects are on-schedule and operations are not being materially impacted by the COVID-19 pandemic. 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. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2021 | |
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: March 31, 2021 December 31, 2020 Machinery and Equipment $ 9,588,000 $ 8,908,000 Vehicles 71,800 73,500 Furniture and Fixtures 145,300 136,300 Leasehold Improvements 7,000 7,000 Total Fixed Assets 9,812,100 9,124,800 Less Accumulated Depreciation (1,107,200 ) (948,800 ) Fixed Assets, Net $ 8,704,900 $ 8,176,000 Depreciation expense was $240,200 and $141,900 for the three months ended March 31, 2021 and 2020, respectively. |
Real Estate
Real Estate | 3 Months Ended |
Mar. 31, 2021 | |
Real Estate [Abstract] | |
Real Estate | 4. REAL ESTATE Real Estate consisted of the following components: March 31, 2021 December 31, 2020 Land Held for Development $ 28,531,000 $ 9,532,800 Construction in Progress 6,366,500 9,042,700 Held for Sale 771,500 1,794,800 $ 35,669,000 $ 20,370,300 |
Equipment Loans
Equipment Loans | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Equipment Loans | 5. EQUIPMENT LOANS Consists of the following: March 31, 2021 December 31, 2020 Various notes payable to banks and financial institutions with interest rates varying from 0.00% to 13.89%, collateralized by equipment with monthly payments ranging from $400 to $11,600 through 2025: 5,905,300 $ 5,595,500 Book value of collateralized equipment: 7,354,100 $ 6,475,600 Future equipment loan maturities are as follows: For the years ended March 31: 2022 $ 1,673,100 2023 1,707,500 2024 1,475,200 2025 1,016,000 2026 33,500 $ 5,905,300 |
Construction Loans
Construction Loans | 3 Months Ended |
Mar. 31, 2021 | |
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 have a one-year term but will be refinanced if the project is not completed within one year and will be 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 related to third party lenders as of March 31, 2021 and December 31, 2020 were $9,667,000 and $10,092,500, respectively. The book value of collateralized real estate as of March 31, 2021 and December 31, 2020 was $35,669,000 and $20,370,300, respectively. |
Note Payable D&O Insurance
Note Payable D&O Insurance | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Note Payable D&O Insurance | 7. NOTE PAYABLE D&O INSURANCE The Company purchased director’s and officer’s (“D&O”) insurance on August 28, 2020 for $1,531,900. A down payment of $306,400 was made and the remaining balance of $1,225,500 was financed over ten months. The interest rate on the loan is 4.74%. Interest expense on this loan for the three months ended March 31, 2021 and 2020 was $7,300 and $0, respectively. The loan balance as of March 31, 2021 and December 31, 2020 was $372,700 and $741,200, respectively. |
Note Payable PPP
Note Payable PPP | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Note Payable PPP | 8. 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 Term Note”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The PPP Term Note is evidenced by a promissory note. The PPP Term Note bears interest at a fixed annual rate of 1.00%, with the first six months of interest deferred. The PPP Term Note 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 (“SBA”). The Company applied 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. On November 9, 2020 and February 1, 2021, the SBA forgave $562,300 and $10,000, respectively, on the PPP Term Note. As of March 31, 2021 and December 31, 2020, the balance of the PPP Term Note was $5,900 and $19,300, respectively. Future note payable loan maturities are as follows: For the years ended March 31: 2022 $ 5,900 $ 5,900 |
Defined Contribution Plan
Defined Contribution Plan | 3 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
Defined Contribution Plan | 9. 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 three months ended March 31, 2021 and 2020 were $26,400 and $0, respectively. |
Commitments
Commitments | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | 10. COMMITMENTS 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 September 17, 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 August 28, 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 May 31, 2021. On June 15, 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 $2,040,000. Closing is expected to take place on or before December 31, 2021. On February 16, 2021, the Company entered into a sales agreement with a national public builder to sell 99 lots for $7,920,000, closing on or before March 29, 2021. On March 11, 2021, both parties agreed to amend the contract to sell the lots for $8,910,000, closing on or before May 14, 2021. On February 25, 2021, the Company entered into a sales agreement to acquire 55 lots in Loomis, California for $6,850,000, closing on or before May 26, 2021. On March 8, 2021, the Company entered into a purchase and sale agreement to acquire 30 lots in Horseshoe Bay, Texas for $2,500,000, closing on or before July 1, 2021. On March 8, 2021, the Company entered into a purchase and sale agreement to acquire four lots in Loomis, California for $1,100,000, closing on or before May 22, 2021. On March 23, 2021, the Company entered into a purchase and sale agreement to acquire property for the construction of 80 condominium units in Tacoma, Washington for $2,000,000, closing on or before May 24, 2021. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. RELATED PARTY TRANSACTIONS Notes Payable The Company entered into construction loans with Sound Equity, LLC of which a director and minority shareholder of the Company is a partner. These loans were originated between April 2019 and January 2021; all of the loans have a one-year maturity with interest rates ranging between 8.49% and 12.00%. For the three months ended March 31, 2021 and 2020, the Company incurred loan origination fees of $87,600 and $0, respectively. These fees are recorded as debt discount and amortized over the life of the loan. The amortization is capitalized to real estate. As of March 31, 2021 and December 31, 2020, there were $165,900 and $202,500 of remaining debt discounts, respectively. During the three months ended March 31, 2021 and 2020, the Company incurred prepaid interest of $289,300 and $166,000, respectively. This interest is recorded as debt prepaid interest and amortized over the life of the loan. The interest is capitalized to real estate. As of March 31, 2021 and December 31, 2020, there were $515,000 and $466,600 of remaining prepaid interest reserves, respectively. As of March 31, 2021 and December 31, 2020, the outstanding loan balances were $6,774,500 and $6,438,100, respectively. The Company entered into a construction loan with Curb Funding, LLC of which a director and minority shareholder of the Company is 100% owner. The loan originated August 13, 2020. The loan has a one-year maturity with an interest rate of 12%. As of March 31, 2021 and December 31, 2020, the Company incurred loan fees of $0 and $3,500, respectively. These fees are recorded as debt discount and amortized over the life of the loan. The amortization is capitalized to real estate. As of March 31, 2021 and December 31, 2020, there were $0 and $1,100 of remaining debt discounts, respectively. As of March 31, 2021 and December 31, 2020, the outstanding loan balances were $0 and $51,800, respectively. The Company incurred interest expense of $2,800 and $0 for the three months ended March 31, 2021 and 2020, respectively. On April 19, 2019, the Company entered into a construction loan with Olympic Views, LLC (“Olympic”) of which the Company’s Chief Executive Officer and President owned 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 the land. The amounts outstanding were $0 and $0 as of March 31, 2021 and December 31, 2020, respectively. The interest expense was $0 and $13,000 for the three months ended March 31, 2021 and 2020 and was capitalized as part of Real Estate. The Company entered into an agreement with Olympic to convert this debt and accrued interest of $55,000 to common stock at the Company’s Initial Public Offering (defined below) price of $6.00 in May 2020. This conversion was effected on August 28, 2020 simultaneous to the Initial Public Offering. This transaction resulted in 82,826 shares of common stock being issued to Olympic. Due to Related Party The Company has a quarry which it uses to process waste materials from the completion of raw land into sellable/buildable lots. The quarry is located on land owned by SGRE, LLC which is 100% owned by the Company’s Chief Executive Officer and President. The materials produced by the quarry and sold by the Company to others are subject to a 25% commission payable to SGRE, LLC. On March 31, 2021 and December 31, 2020, the commission payable was $8,000 and $0, respectively. The commission expense for the three months ended March 31, 2021 and 2020 was $15,000 and $0, respectively. Due to Related Party Richard Schmidtke, a Company director, provided tax and accounting services in 2021 and 2020 to the Company. On March 31, 2021 and December 31, 2020, the fees payable to Mr. Schmidtke were $0 and $500, respectively. The accounting expense incurred by the Company for Mr. Schmidtke’s services for the three months ended March 31, 2021 and 2020 was $500 and $22,300, respectively. Land Purchase from a Related Party On September 2, 2020, the Company purchased 99 unfinished lots for $3,430,000 from Olympic. The Company’s Chief Executive Officer and President owned a 50% interest in Olympic at the date of purchase. He currently has no ownership interest in Olympic. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Equity (Deficit) | 12. 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 its 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 underwriting discount and the underwriters’ fees and expenses were $10,789,000. 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 82,826 shares of its 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 and into shares of the Company’s common stock at the Initial Public Offering price per share of $6.00. Follow-on Offering The registration statement for the Company’s follow-on offering became effective on January 12, 2021. On January 15 and 20, 2021, the Company closed the follow-on offering of 9,200,000 shares of its common stock at the public offering price of $3.00 per share, which includes 1,200,000 shares of common stock sold upon full exercise of the underwriters’ option to purchase additional shares of common stock for gross proceeds of $27,600,000. The net proceeds from the follow-on offering after deducting the underwriting discount and the underwriters’ fees and expenses were $25,101,000. In addition, upon closing of the follow-on offering, the Company issued to the underwriters warrants to purchase an aggregate of 400,000 shares of common stock exercisable at a per share price of $3.75 for a term of five years beginning on January 12, 2021 which vest on July 12, 2021. The fair value of these warrants is $453,800. Common Stock (A) Options The following is a summary of the Company’s option activity: Options Weighted Average Exercise Price Outstanding – December 31, 2020 442,172 $ 2.53 Exercisable – December 31, 2020 219,085 $ 1.31 Granted - $ - Exercised (45,046 ) $ 0.40 Forfeited/Cancelled - $ - Outstanding – March 31, 2021 397,126 $ 2.77 Exercisable – March 31, 2021 256,345 $ 2.18 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 - $6.50 397,126 6.09 $ 2.77 256,345 $ 2.18 For the three months ended March 31, 2020, the Company issued 33,784 options to a member of the Board of Directors. The options have an exercise price of $2.22 per share, a term of ten years, and vest 100% on February 7, 2021. The options have an aggregate fair value of approximately $100 that was calculated using the Black-Scholes option-pricing model based on the assumptions discussed above in Note 1 under Stock-Based Compensation. For the three months ended March 31, 2021, the Company had 45,046 options exercised by a former employee. These shares were exercised at $0.40 per share for a total of $18,000 which has been included in additional paid in capital. The Company recognized share-based compensation net of forfeitures related to options of an aggregate of $0 for the three months ended March 31, 2020. The Company recognized share-based compensation net of forfeitures related to options of an aggregate of $76,600 for the three months ended March 31, 2021. As of March 31, 2021, unrecognized share-based compensation was $187,800. The intrinsic value for outstanding and exercisable options as of March 31, 2020 was $0 and $0, respectively, and as of March 31, 2021 was $537,000 and $424,000, respectively. (B) Warrants The following is a summary of the Company’s warrant activity: Warrants Weighted Average Exercise Price Outstanding – December 31, 2020 110,859 $ 6.06 Exercisable – December 31, 2020 22,524 $ 0.40 Granted 400,000 $ 3.75 Exercised - $ - Forfeited/Cancelled - $ - Outstanding – March 31, 2021 510,859 $ 4.25 Exercisable – March 31, 2021 22,524 $ 0.40 Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average $ 0.40 - $7.50 510,859 4.89 $ 4.25 22,524 $ 0.40 During the three months ended March 31, 2021, the Company issued 400,000 warrants in connection with its follow-on offering. The warrants have an exercise price of $3.75 share, a term of five years, and a six-month vesting period. The fair value of these warrants is $453,800 as of March 31, 2021 and is netted against proceeds. The value 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 warrants as of March 31, 2021 was $62,400 and $62,400, respectively. (C) Restricted Stock Unit (“RSU”) Plan The following is a summary of the Company’s RSU activity: RSU Weighted Average Exercise Price Outstanding – December 31, 2020 34,000 $ 4.53 Exercisable – December 31, 2020 8,500 $ 4.53 Granted - $ - Exercised - $ - Forfeited/Cancelled - $ - Outstanding – March 31, 20201 34,000 $ 4.53 Exercisable – March 31, 2021 17,000 $ 4.53 The Company periodically grants restricted stock awards to the Board of Directors and certain employees pursuant to the 2020 Plan. These typically are awarded on the first day of a fiscal quarter and fully vest on the last day of the quarter. The Company recognized $38,500 of stock compensation during the three months ended March 31, 2021. On March 31, 2021, there was $77,000 of unrecognized compensation related to non-vested restricted stock. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. SUBSEQUENT EVENTS On March 8, 2021, the Company entered into a purchase and sale agreement to acquire 30 lots in Horseshoe Bay, Texas for $2,500,000, closing on or before July 1, 2021 of which 22 Lots of the 30 closed on April 15, 2021 for $1,500,000. On April 2, 2021, the Company entered into a purchase and sale agreement to sell 144 lots in Belfair, Washington for $8,640,000, closing on or before May 14, 2021. On April 7, 2021, the Company entered into a purchase and sale agreement to acquire five lots in Georgetown, Texas for $722,975, closing on or before May 13, 2021. On April 8, 2021, the Company entered into a purchase and sale agreement to acquire one lot in Horseshoe Bay, Texas for $219,000. This transaction closed on April 16, 2021. On April 19, 2021, the Company entered into a purchase and sale agreement to acquire three lots in Horseshoe Bay, Texas for $120,000, closing on or before May 26, 2021. On April 20, 2021, the Company entered into a purchase and sale agreement to acquire two lots in Horseshoe Bay, Texas for $265,000, closing on or before May 26, 2021. On April 20, 2021, the Company entered into a purchase and sale agreement to acquire 106 lots in Horseshoe Bay, Texas for $16,900,000, closing on or before July 1, 2021. On April 25, 2021, the Company entered into a purchase and sale agreement to acquire 31 acres and a 2,700 square foot office building in Horseshoe Bay, Texas for $4,750,000, closing on or before July 1, 2021. On April 30, 2021, the Company entered into a purchase and sale agreement to acquire 222 acres in Birch Bay, Washington for $14,300,000, closing on or before June 30, 2021. On May 6, 2021, the Company entered into a purchase and sale agreement to acquire 10 lots in Horseshoe Bay, Texas for $2,005,200, closing on or before July 15, 2021. On May 6, 2021, the Company entered into a purchase and sale agreement to acquire 200 lots in Punta Gorda, Florida for $4,700,000, closing on or before August 4, 2021. On May 10, 2021, the Company acquired one building lot in Bremerton, Washington for $35,000. |
Nature of Operations and Summ_2
Nature of Operations and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
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 multi-family dwellings in the Puget Sound region of Washington, California, and Texas. The Company utilizes its heavy equipment resources to develop an inventory of finished lots and provide development infrastructure construction, on a contract basis, for 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 on August 28, 2020. |
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 March 31, December 31, Names Dates of Formation 2021 2020 Saylor View Estates, LLC March 30, 2014 51 % 51 % Harbor Materials, LLC* July 5, 2018 N/A 100 % Belfair Apartments, LLC December 3, 2019 100 % 100 % * Harbor Materials, LLC was voluntarily dissolved with the State of Washington as of January 29, 2021. All intercompany transactions and balances have been eliminated in consolidation. As of March 31, 2021 and December 31, 2020, the aggregate non-controlling interest was $(1,289,300) and $(1,289,900), 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 Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission (“SEC”) on March 31, 2021. 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, 2020 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, 2021. 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 | 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 (“GAAP”). Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used. |
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 (currently the Compensation Committee) to determine the issuance of incentive stock options and non-qualified stock options to eligible employees and outside directors and consultants of the Company. The Company reserved 675,676 shares of common stock for issuance under the 2018 Plan. Effective as of December 3, 2020, the Company’s Board of Directors and Stockholders approved and adopted the 2020 Restricted Stock Plan (the “2020 Plan”). The 2020 Plan allows the Administrator (currently the Compensation Committee) to determine the issuance of restricted stock to eligible officers, directors, and key employees. The Company reserved 700,000 shares of common stock for issuance under the 2020 Plan. The Company accounts for stock-based compensation in accordance with Accounting Standards codification (“ASC”) Topic 718, “Compensation – Stock Compensation” (“ASC 718”) which establishes financial accounting and reporting standards for stock-based employee compensation. It defines a fair value-based method of accounting for an employee stock option or similar equity instrument. The Company recognizes all forms of share-based payments, including stock option grants, warrants, and restricted stock grants at their fair value on the grant date, which are based on the estimated number of awards that are ultimately expected to vest. Options and warrants are valued using a Black-Scholes option pricing model. Grants of share-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the share-based payment. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation expense 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 three months ended March 31, 2021 and 2020 when computing fair value of share-based payments, the Company has considered the following variables: March 31, 2021 March 31, 2020 Risk-free interest rate 0.23 % 1.46 % Exercise price $ 3.75 $ 2.22 Expected life of grants 2.75 years 5.64 years Expected volatility of underlying stock 53.52 % 32.39 % 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 the expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. The share price as of the grant date was determined by an independent third party 409(a) valuation until the Company’s stock became publicly traded. Now the share price is the public 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 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 Financial Accounting Standards Board (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 arrangements, stock options, or warrants. The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net loss attributable to common stockholders per common share. March 31, 2021 March 31, 2020 Numerator: Net (loss) attributable to common stockholders $ (1,549,800 ) $ (752,000 ) Effect of dilutive securities: - - Diluted net (loss) $ (1,549,800 ) $ (752,000 ) Denominator: Weighted average common shares outstanding - basic 13,269,055 3,513,517 Dilutive securities (a): Options - - Warrants - - Weighted average common shares outstanding and assumed 13,269,055 3,513,517 conversion – diluted Basic net (loss) per common share $ (0.12 ) $ (0.21 ) Diluted net (loss) per common share $ (0.12 ) $ (0.21 ) (a) - Anti-dilutive securities excluded: 278,870 140,695 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the Company’s short-term financial instruments approximates fair value due to the relatively short period to maturity for these instruments. |
Cash and Cash Equivalents | Cash and Cash Equivalents 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 March 31, 2021 and December 31, 2020. |
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 was $44,100 and $0 as of March 31, 2021 and December 31, 2020. respectively. |
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 |
Real Estate Assets | Real Estate Assets Real estate assets are recorded at cost, except when real estate assets are acquired that meet the definition of a business combination in accordance with FASB ASC 805, “Business Combinations,” where acquired assets are recorded at fair value. Interest, property taxes, insurance, and other incremental costs (including salaries) directly related to a project are capitalized during the construction period of major facilities and land improvements. The capitalization period begins when activities to develop the parcel commence and ends when the asset constructed is completed. The capitalized costs are recorded as part of the asset to which they relate and are expensed when the underlying asset is sold. The Company capitalized interest from related party borrowings of $185,300 and $313,300 for the three months ended March 31, 2021 and 2020, respectively. The Company capitalized interest from third-party borrowings of $210,900 and $393,100 for the three months ended March 31, 2021 and 2020, 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 contract date; (5) The property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (6) Actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. When all 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 March 31, 2021 and December 31, 2020, the Company did not have any projects that qualified for an impairment charge. |
Revenue and Cost Recognition | Revenue and Cost Recognition 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 goods 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 customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, performance obligations are satisfied. A detailed breakdown of the five-step process for recognition of Real Estate Revenue related to the sale of homes is as follows: 1. Identify the contract with a customer. The Company signs an agreement with a home buyer 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 are required to meet certain specifications that are outlined in the contract. 3. Determine the transaction price. The transaction price is fixed and specified in the contract. Any subsequent change orders or price changes are required to be approved by both parties. 4. Allocation of the transaction price to performance obligations in the contract. 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 any further performance obligations once title is transferred. A detailed breakdown of the five-step process for the recognition of Real Estate Revenue related to the sale of completed lots is as follows: 1. Identify the contract with a customer. The Company signs an agreement with a home builder to purchase completed lot(s). 2. Identify the performance obligations in the contract. Performance obligations of the Company include delivering a developed lot to the customer, which are required to meet certain specifications that are outlined in the contract. 3. Determine the transaction price. The transaction price is fixed and specified in the contract. Any subsequent change orders or price changes are required to be approved by both parties. 4. Allocation of the transaction price to performance obligations in the contract. Each lot 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 any 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. The performance obligation is to deliver or receive materials from customers 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 is 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 March 31: 2021 2020 Real Estate - homes $ 6,814,200 $ 9,904,600 Real Estate - lots 7,000,000 - Construction Materials 60,000 36,400 Total Revenue $ 13,874,200 $ 9,941,000 |
Cost of Sales | Cost of Sales Land acquisition costs are allocated to each lot based on the size of the lot in relation to the size of the total project. Development cost and capitalized interest are allocated to lots sold based on the same criteria. 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 March 31, 2021 and 2020 were $500 and $7,500, respectively. |
Leases | Leases On January 1, 2019, the Company adopted ASU 2016-02 “Leases” (Topic 842) which amended guidance for lease arrangements to increase transparency and comparability by providing additional information to users of financial statements regarding an entity’s leasing activities. 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; 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 | Income Taxes Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss, credit carryforwards, and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. Management applies the criteria established in the to determine if any valuation allowances are needed each year. The Company recognizes a tax benefit for an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. There are no uncertain tax positions as of March 31, 2021 and December 31, 2020. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements On December 18, 2019, the FASB released Topic 740 (the “Update”). FASB 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 adoption of the Update did not have a material impact on the Company. |
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 the estimated undiscounted future cash flow expected to result from use of the assets is less than carrying value. If impairment is present, the carrying value of the impaired asset is reduced to its fair value. Fair value is determined based on discounted cash flow or appraised values, depending on the nature of the assets. As of March 31, 2021 and December 31, 2020, 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.” On January 15 and 20, 2021, the Company closed on a follow-on public offering and overallotment option, respectively, of its common stock. During 2020, the Company incurred approximately $65,100 of capitalizable costs associated with the follow-on public offering, which were netted against the proceeds received in 2021. These costs were capitalized as of December 31, 2020 and are shown on the Company’s balance sheet as Deferred Offering Costs. The Company incurred and capitalized deferred offering costs for the three months ended March 31, 2021 of $37,800 relating to a future preferred stock offering. |
Nature of Operations and Summ_3
Nature of Operations and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, December 31, Names Dates of Formation 2021 2020 Saylor View Estates, LLC March 30, 2014 51 % 51 % Harbor Materials, LLC* July 5, 2018 N/A 100 % Belfair Apartments, LLC December 3, 2019 100 % 100 % * Harbor Materials, LLC was voluntarily dissolved with the State of Washington as of January 29, 2021. |
Schedule of Fair Value Assumptions of Share-Based Payments | For the three months ended March 31, 2021 and 2020 when computing fair value of share-based payments, the Company has considered the following variables: March 31, 2021 March 31, 2020 Risk-free interest rate 0.23 % 1.46 % Exercise price $ 3.75 $ 2.22 Expected life of grants 2.75 years 5.64 years Expected volatility of underlying stock 53.52 % 32.39 % 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 loss attributable to common stockholders per common share. March 31, 2021 March 31, 2020 Numerator: Net (loss) attributable to common stockholders $ (1,549,800 ) $ (752,000 ) Effect of dilutive securities: - - Diluted net (loss) $ (1,549,800 ) $ (752,000 ) Denominator: Weighted average common shares outstanding - basic 13,269,055 3,513,517 Dilutive securities (a): Options - - Warrants - - Weighted average common shares outstanding and assumed 13,269,055 3,513,517 conversion – diluted Basic net (loss) per common share $ (0.12 ) $ (0.21 ) Diluted net (loss) per common share $ (0.12 ) $ (0.21 ) (a) - Anti-dilutive securities excluded: 278,870 140,695 |
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 |
Schedule of Revenues from Contracts with Customers | Revenues from contracts with customers are summarized by product category as follows for the three months ended March 31: 2021 2020 Real Estate - homes $ 6,814,200 $ 9,904,600 Real Estate - lots 7,000,000 - Construction Materials 60,000 36,400 Total Revenue $ 13,874,200 $ 9,941,000 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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: March 31, 2021 December 31, 2020 Machinery and Equipment $ 9,588,000 $ 8,908,000 Vehicles 71,800 73,500 Furniture and Fixtures 145,300 136,300 Leasehold Improvements 7,000 7,000 Total Fixed Assets 9,812,100 9,124,800 Less Accumulated Depreciation (1,107,200 ) (948,800 ) Fixed Assets, Net $ 8,704,900 $ 8,176,000 |
Real Estate (Tables)
Real Estate (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Real Estate [Abstract] | |
Schedule of Real Estate | Real Estate consisted of the following components: March 31, 2021 December 31, 2020 Land Held for Development $ 28,531,000 $ 9,532,800 Construction in Progress 6,366,500 9,042,700 Held for Sale 771,500 1,794,800 $ 35,669,000 $ 20,370,300 |
Equipment Loans (Tables)
Equipment Loans (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Equipment Loans | Consists of the following: March 31, 2021 December 31, 2020 Various notes payable to banks and financial institutions with interest rates varying from 0.00% to 13.89%, collateralized by equipment with monthly payments ranging from $400 to $11,600 through 2025: 5,905,300 $ 5,595,500 Book value of collateralized equipment: 7,354,100 $ 6,475,600 |
Schedule of Future Equipment Loan Maturities | Future equipment loan maturities are as follows: For the years ended March 31: 2022 $ 1,673,100 2023 1,707,500 2024 1,475,200 2025 1,016,000 2026 33,500 $ 5,905,300 |
Note Payable PPP (Tables)
Note Payable PPP (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Future Note Payable Loan Maturities | Future note payable loan maturities are as follows: For the years ended March 31: 2022 $ 5,900 $ 5,900 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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, 2020 442,172 $ 2.53 Exercisable – December 31, 2020 219,085 $ 1.31 Granted - $ - Exercised (45,046 ) $ 0.40 Forfeited/Cancelled - $ - Outstanding – March 31, 2021 397,126 $ 2.77 Exercisable – March 31, 2021 256,345 $ 2.18 |
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 - $6.50 397,126 6.09 $ 2.77 256,345 $ 2.18 |
Schedule of Warrants Activity | The following is a summary of the Company’s warrant activity: Warrants Weighted Average Exercise Price Outstanding – December 31, 2020 110,859 $ 6.06 Exercisable – December 31, 2020 22,524 $ 0.40 Granted 400,000 $ 3.75 Exercised - $ - Forfeited/Cancelled - $ - Outstanding – March 31, 2021 510,859 $ 4.25 Exercisable – March 31, 2021 22,524 $ 0.40 |
Schedule of Warrants Outstanding and Exercisable | Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average $ 0.40 - $7.50 510,859 4.89 $ 4.25 22,524 $ 0.40 |
Schedule of Restricted Stock Unit Activity | The following is a summary of the Company’s RSU activity: RSU Weighted Average Exercise Price Outstanding – December 31, 2020 34,000 $ 4.53 Exercisable – December 31, 2020 8,500 $ 4.53 Granted - $ - Exercised - $ - Forfeited/Cancelled - $ - Outstanding – March 31, 20201 34,000 $ 4.53 Exercisable – March 31, 2021 17,000 $ 4.53 |
Nature of Operations and Summ_4
Nature of Operations and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | ||||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 03, 2020 | Nov. 19, 2018 | |
Non-controlling interest | $ (1,289,300) | $ (1,289,900) | |||
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. | ||||
Cash equivalents | |||||
Allowance for doubtful accounts | 100 | 0 | |||
Capitalized interest from related party borrowings | 185,300 | $ 313,300 | |||
Capitalized interest from third-party borrowings | 210,900 | 393,100 | |||
Advertising expense | 500 | $ 7,500 | |||
Offering costs | $ 37,800 | $ 65,100 | |||
2018 Plan [Member] | |||||
Reserved shares of common stock issuance | 675,676 | ||||
2020 Restricted Stock Plan [Member] | |||||
Reserved shares of common stock issuance | 700,000 |
Nature of Operations and Summ_5
Nature of Operations and Summary of Significant Accounting Policies - Schedule of Statement of Subsidiaries (Details) | 3 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | ||
Saylor View Estates, LLC [Member] | |||
Dates of Formation | Mar. 30, 2014 | ||
Attributable Interest | 51.00% | 51.00% | |
Harbor Materials, LLC [Member] | |||
Dates of Formation | [1] | Jul. 5, 2018 | |
Attributable Interest | [1] | 100.00% | |
Belfair Apartments, LLC [Member] | |||
Dates of Formation | Dec. 3, 2019 | ||
Attributable Interest | 100.00% | 100.00% | |
[1] | Harbor Materials, LLC was voluntarily dissolved with the State of Washington as of January 29, 2021. |
Nature of Operations and Summ_6
Nature of Operations and Summary of Significant Accounting Policies - Schedule of Fair Value Assumptions of Share-Based Payments (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Risk-free interest rate | 23.00% | 146.00% |
Exercise Price | $ 3.75 | $ 2.22 |
Expected life of grants | 2 years 9 months | 5 years 7 months 21 days |
Expected volatility of underlying stock | 53.52% | 32.39% |
Dividends | 0.00% | 0.00% |
Nature of Operations and Summ_7
Nature of Operations and Summary of Significant Accounting Policies - Schedule of Net Income (Loss) Per Share (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Net (loss) attributable to common stockholders | $ (1,549,800) | $ (752,000) |
Effect of dilutive securities: | ||
Diluted net (loss) | $ (1,549,800) | $ (752,000) |
Weighted average common shares outstanding - basic | 13,269,055 | 3,513,517 |
Dilutive securities (a): Options | ||
Dilutive securities (a): Warrants | ||
Weighted average common shares outstanding and assumed conversion - diluted | 13,269,055 | 3,513,517 |
Basic net (loss) per common share | $ (0.12) | $ (0.21) |
Diluted net (loss) per common share | $ (0.12) | $ (0.21) |
(a) - Anti-dilutive securities excluded: | 278,870 | 140,695 |
Nature of Operations and Summ_8
Nature of Operations and Summary of Significant Accounting Policies - Schedule of Property and Equipment Estimated Useful Lives (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Construction Equipment [Member] | |
Property and equipment estimated useful life | 10 years |
Leasehold Improvements [Member] | |
Property and equipment useful lives | The lesser of 10 years or the remaining life of the lease |
Furniture and Fixtures [Member] | |
Property and equipment estimated useful life | 5 years |
Computers [Member] | |
Property and equipment estimated useful life | 3 years |
Vehicles [Member] | |
Property and equipment estimated useful life | 10 years |
Nature of Operations and Summ_9
Nature of Operations and Summary of Significant Accounting Policies - Schedule of Revenues from Contracts with Customers (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Total Revenue | $ 13,874,200 | $ 9,941,000 |
Real Estate Homes [Member] | ||
Total Revenue | 6,814,200 | 9,904,600 |
Real Estate Lots [Member] | ||
Total Revenue | 7,000,000 | |
Construction Materials [Member] | ||
Total Revenue | $ 60,000 | $ 36,400 |
Concentration, Risks, and Unc_2
Concentration, Risks, and Uncertainties (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Uninsured cash | $ 8,547,000 | $ 2,146,000 | |
Revenue from contract with customer | 13,874,200 | $ 9,941,000 | |
Customer Concentration Risk [Member] | Lennar Northwest, Inc [Member] | |||
Revenue from contract with customer | $ 7,000,000 | $ 0 | |
Concentration risk revnue percentage | 50.00% | 0.00% |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 240,200 | $ 141,900 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Total Fixed Assets | $ 9,812,100 | $ 9,124,800 |
Less Accumulated Depreciation | (1,107,200) | (948,800) |
Fixed Assets, Net | 8,704,900 | 8,176,000 |
Machinery and Equipment [Member] | ||
Total Fixed Assets | 9,588,000 | 8,908,000 |
Vehicles [Member] | ||
Total Fixed Assets | 71,800 | 73,500 |
Furniture and Fixtures [Member] | ||
Total Fixed Assets | 145,300 | 136,300 |
Leasehold Improvements [Member] | ||
Total Fixed Assets | $ 7,000 | $ 7,000 |
Real Estate - Schedule of Real
Real Estate - Schedule of Real Estate (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Real Estate [Abstract] | ||
Land Held for Development | $ 28,531,000 | $ 9,532,800 |
Construction in Progress | 6,366,500 | 9,042,700 |
Held for Sale | 771,500 | 1,794,800 |
Real estate | $ 35,669,000 | $ 20,370,300 |
Equipment Loans - Schedule of E
Equipment Loans - Schedule of Equipment Loans (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
Various notes payable to banks and financial institutions with interest rates varying from 0.00% to 13.89%, collateralized by equipment with monthly payments ranging from $400 to $11,600 through 2025: | $ 5,905,300 | $ 5,595,500 |
Book value of collateralized equipment | $ 7,354,100 | $ 6,475,600 |
Equipment Loans - Schedule of_2
Equipment Loans - Schedule of Equipment Loans (Details) (Parenthetical) - Bank [Member] | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Debt maturity date, description | Through 2025 |
Minimum [Member] | |
Debt insterest rate | 0.00% |
Monthly payments | $ 400 |
Maximum [Member] | |
Debt insterest rate | 13.89% |
Monthly payments | $ 11,600 |
Equipment Loans - Schedule of F
Equipment Loans - Schedule of Future Equipment Loan Maturities (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
2022 | $ 1,673,100 | |
2023 | 1,707,500 | |
2024 | 1,475,200 | |
2025 | 1,016,000 | |
2026 | 33,500 | |
Equipment Loans | $ 5,905,300 | $ 5,595,500 |
Construction Loans (Details Nar
Construction Loans (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Debt instrument face amount | $ 9,667,000 | $ 10,092,500 |
Book value of collateralized real estate | $ 35,669,000 | $ 20,370,300 |
Construction Loans [Member] | ||
Debt instrument term | 1 year | |
Construction Loans [Member] | Minimum [Member] | ||
Debt instrument interest rate percentage | 8.00% | |
Construction Loans [Member] | Maximum [Member] | ||
Debt instrument interest rate percentage | 40.00% |
Note Payable D&O Insurance (Det
Note Payable D&O Insurance (Details Narrative) - USD ($) | Mar. 31, 2021 | Aug. 28, 2020 | Mar. 31, 2020 | Dec. 31, 2020 |
Note Payable D&O Insurance | $ 372,700 | $ 741,200 | ||
D&O Insurance [Member] | ||||
Payment to acquire insurance | $ 1,531,900 | |||
Down payment for insurance | $ 306,400 | |||
Debt instrument term | 10 months | |||
Debt instrument interest rate | 4.74% | |||
Interest and debt expense | $ 7,300 | $ 0 |
Note Payable PPP (Details Narra
Note Payable PPP (Details Narrative) - USD ($) | Jan. 02, 2021 | Nov. 09, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Apr. 11, 2020 |
Debt instrument face amount | $ 9,667,000 | $ 10,092,500 | ||||
Debt forgiveness | 10,000 | |||||
Term Note [Member] | PPP Loan [Member] | ||||||
Debt instrument face amount | $ 582,800 | |||||
Interest rate percentage | 1.00% | |||||
Term Note [Member] | PPP Loan [Member] | SBA [Member] | ||||||
Debt instrument face amount | $ 5,900 | $ 19,300 | ||||
Debt forgiveness | $ 10,000 | $ 562,300 |
Note Payable PPP - Schedule of
Note Payable PPP - Schedule of Future Note Payable Loan Maturities (Details) - Term Note [Member] - PPP Loan [Member] | Mar. 31, 2021USD ($) |
2022 | $ 5,900 |
Note Payable | $ 5,900 |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
401 (k) [Member] | ||
Employer contribution to defined contribution plan | $ 26,400 | $ 0 |
Commitments (Details Narrative)
Commitments (Details Narrative) | Mar. 23, 2021USD ($) | Mar. 15, 2021USD ($) | Mar. 11, 2021USD ($) | Mar. 08, 2021USD ($) | Feb. 16, 2021USD ($) | Sep. 17, 2020USD ($)a | Aug. 28, 2020USD ($) | Jun. 15, 2020USD ($) | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) |
Payment to acquire property, pland and equipment | $ 149,100 | $ 5,200 | ||||||||
Tacoma, Washington [Member] | ||||||||||
Payment to acquire property, pland and equipment | $ 2,000,000 | |||||||||
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] | Bremerton, Washington [Member] | ||||||||||
Payment to acquire property, pland and equipment | $ 1,500,000 | |||||||||
Purchase and Sale Agreement [Member] | East Bremerton, Washington [Member] | ||||||||||
Payment to acquire property, pland and equipment | $ 2,040,000 | |||||||||
Purchase and Sale Agreement [Member] | Loomis, California [Member] | ||||||||||
Payment to acquire property, pland and equipment | $ 1,100,000 | |||||||||
Purchase and Sale Agreement [Member] | Horseshoe Bay, Texas [Member] | ||||||||||
Payment to acquire property, pland and equipment | $ 1,500,000 | 2,500,000 | ||||||||
Sale Agreement [Member] | Loomis, California [Member] | ||||||||||
Payment to acquire property, pland and equipment | $ 6,850,000 | |||||||||
Sale Agreement [Member] | Horseshoe Bay, Texas [Member] | ||||||||||
Payment to acquire property, pland and equipment | $ 2,500,000 | |||||||||
Sale Agreement [Member] | National Public Builder [Member] | ||||||||||
Payment to acquire property, pland and equipment | $ 8,910,000 | $ 7,920,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Aug. 13, 2020 | May 31, 2020 | Apr. 19, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
Interest expense | $ 98,100 | $ 71,600 | ||||
Debt instrument face amount | 9,667,000 | $ 10,092,500 | ||||
Payment to acquire property | 149,100 | 5,200 | ||||
Curb Funding, LLC [Member] | ||||||
Debt instrument term | 1 year | |||||
Debt instrument interest rate percentage | 12.00% | |||||
Debt discounts | 0 | 1,100 | ||||
Outstanding loan balances | 0 | 51,800 | ||||
Debt instrument face amount | 0 | 3,500 | ||||
Olympic Views, LLC [Member] | ||||||
Payment to acquire property | $ 3,430,000 | |||||
SGRE, LLC [Member] | ||||||
Ownership percentage | 100.00% | |||||
Percentage of commision payable | 25.00% | |||||
Commision Payable | $ 8,000 | 0 | ||||
Commission expense | 15,000 | 0 | ||||
Richard Schmidktke [Member] | ||||||
Fees payable | $ 0 | 500 | ||||
Accounting expenses | 22,300 | 500 | ||||
Construction Loans [Member] | ||||||
Debt instrument term | 1 year | |||||
Construction Loans [Member] | Minimum [Member] | ||||||
Debt instrument interest rate percentage | 8.00% | |||||
Construction Loans [Member] | Maximum [Member] | ||||||
Debt instrument interest rate percentage | 40.00% | |||||
Construction Loans [Member] | Sound Equity, LLC [Member] | ||||||
Debt instrument term | 1 year | |||||
Loan origination fees | $ 87,600 | 0 | ||||
Debt discounts | 165,900 | 202,500 | ||||
Prepaid interest | 289,300 | 166,000 | ||||
Prepaid interest reserve | 515,000 | 466,600 | ||||
Outstanding loan balances | 6,774,500 | 6,438,100 | ||||
Interest expense | $ 0 | 2,800 | ||||
Construction Loans [Member] | Sound Equity, LLC [Member] | Minimum [Member] | ||||||
Debt instrument interest rate percentage | 8.49% | |||||
Construction Loans [Member] | Sound Equity, LLC [Member] | Maximum [Member] | ||||||
Debt instrument interest rate percentage | 12.00% | |||||
Construction Loans [Member] | Olympic Views, LLC [Member] | ||||||
Debt instrument interest rate percentage | 12.00% | |||||
Outstanding loan balances | $ 0 | $ 0 | ||||
Interest expense | $ 0 | $ 13,000 | ||||
Ownership percentage | 50.00% | |||||
Debt instrument face amount | $ 442,000 | |||||
Debt instrument maturity date | Apr. 19, 2020 | |||||
Accrued interest | $ 55,000 | |||||
Share issued price per share | $ 6 | |||||
Stock issued during period shares | 82,826 |
Stockholders' Equity (Deficit_2
Stockholders' Equity (Deficit) - (Details Narrative) - USD ($) | Mar. 31, 2021 | Jan. 20, 2021 | Jan. 15, 2021 | Sep. 01, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
Net proceeds from issuance of common stock | $ 25,101,000 | ||||||
Additional Paid In Capital | $ 367,900 | 367,900 | $ 234,800 | ||||
Options, intrinsic value for outstanding | 62,400 | 62,400 | |||||
Options, intrinsic value for exercisable | 62,400 | 62,400 | |||||
RSU Plan [Member] | |||||||
Share based compensation | 38,500 | ||||||
Stock based compensation unrecognised | $ 77,000 | $ 77,000 | |||||
Warrants [Member] | |||||||
Warrants to purchase aggregate shares of common stock | 400,000 | 400,000 | |||||
Exercises price per share | $ 3.75 | $ 3.75 | |||||
Term of warrants | 5 years | 5 years | |||||
Fair value of warrants | $ 453,800 | $ 453,800 | |||||
Options and warrants vesting period | 6 months | ||||||
Options [Member] | |||||||
Share based compensation | $ 76,600 | 0 | |||||
Stock based compensation unrecognised | 187,800 | 187,800 | |||||
Options, intrinsic value for outstanding | 537,000 | 537,000 | 0 | ||||
Options, intrinsic value for exercisable | $ 424,000 | $ 424,000 | $ 0 | ||||
Options [Member] | Board of Directors and Employee [Member] | |||||||
Stock issued during period shares | 33,784 | ||||||
Share issued price per share | $ 2.22 | $ 2.22 | |||||
Stock options, term | 10 years | ||||||
Aggregated fair value of stock options | $ 100 | ||||||
Options [Member] | Former Employee [Member] | |||||||
Stock issued during period shares | 45,046 | ||||||
Share issued price per share | $ 0.40 | $ 0.40 | |||||
Additional Paid In Capital | $ 18,000 | $ 18,000 | |||||
Initial Public Offering [Member] | |||||||
Stock issued during period shares | 2,031,705 | ||||||
Share issued price per share | $ 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 | $ 10,789,000 | ||||||
Warrants to purchase aggregate shares of common stock | 88,335 | 88,335 | |||||
Exercises price per share | $ 7.50 | $ 7.50 | |||||
Term of warrants | 4 years | 4 years | |||||
Fair value of warrants | $ 167,400 | $ 167,400 | |||||
Initial Public Offering [Member] | Olympic Views, LLC [Member] | |||||||
Share issued price per share | $ 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 | |||||
Follow-on Offering [Member] | |||||||
Stock issued during period shares | 9,200,000 | 9,200,000 | |||||
Share issued price per share | $ 3 | $ 3 | |||||
Number of common stock share sold | 1,200,000 | 1,200,000 | |||||
Gross proceeds from issuance common stock | $ 27,600,000 | $ 27,600,000 | |||||
Net proceeds from issuance of common stock | $ 25,101,000 | $ 25,101,000 | |||||
Warrants to purchase aggregate shares of common stock | 400,000 | 400,000 | |||||
Exercises price per share | $ 3.75 | $ 3.75 | |||||
Term of warrants | 5 years | 5 years | |||||
Fair value of warrants | $ 453,800 | $ 453,800 |
Stockholders' Equity (Deficit_3
Stockholders' Equity (Deficit) - Schedule of Stock Options Activity (Details) | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Weighted Average Exercise Price, Outstanding, Ending balance | $ 2.77 |
Weighted Average Exercise Price, Exercisable, Ending balanc | $ 2.18 |
Options [Member] | |
Options, Outstanding, Beginning balance | shares | 442,172 |
Options Exercisable, Beginning balance | shares | 219,085 |
Options, Granted | shares | |
Options, Exercised | shares | (45,046) |
Options, Forfeited/Cancelled | shares | |
Options, Outstanding, Ending balance | shares | 397,126 |
Options Exercisable, , Ending balance | shares | 256,345 |
Weighted Average Exercise Price, Outstanding, Beginning balance | $ 2.53 |
Weighted Average Exercise Price, Exercisable | 1.31 |
Weighted Average Exercise Price, Granted | |
Weighted Average Exercise Price, Exercised | 0.40 |
Weighted Average Exercise Price, Forfeited/Cancelled | |
Weighted Average Exercise Price, Outstanding, Ending balance | 2.77 |
Weighted Average Exercise Price, Exercisable, Ending balanc | $ 2.18 |
Stockholders' Equity (Deficit_4
Stockholders' Equity (Deficit) - Schedule of Stock Options Outstanding and Exercisable (Details) | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Number of Option Outstanding | shares | 397,126 |
Weighed Averate Remaining Contractual Life (in years) | 6 years 1 month 2 days |
Weighted Average Exercise Price, Outstanding, Ending balance | $ 2.77 |
Number of Option Exercisable | shares | 256,345 |
Weighted Average Exercise Price, Exercisable | $ 2.18 |
Minimum [Member] | |
Exercise Price | 0.40 |
Maximum [Member] | |
Exercise Price | $ 6.50 |
Stockholders' Equity (Deficit_5
Stockholders' Equity (Deficit) - Schedule of Warrants Activity (Details) - Warrants [Member] | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Outstanding, Beginning | shares | 110,859 |
Warrants Exercisable, Beginning | shares | 22,524 |
Warrants, Granted | shares | 400,000 |
Warrants, Exercised | shares | |
Warrants, Forfeited/Cancelled | shares | |
Outstanding, Ending | shares | 510,859 |
Warrants Exercisable, Ending | shares | 22,524 |
Weighted Average Exercise Price, Outstanding, Beginning | $ / shares | $ 6.06 |
Weighted Average Exercise Price, Exercisable Beginning | $ / shares | 0.40 |
Weighted Average Exercise Price, Granted | $ / shares | 3.75 |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Forfeited/Cancelled | $ / shares | |
Weighted Average Exercise Price, Outstanding, Ending | $ / shares | 4.25 |
Weighted Average Exercise Price, Exercisable, Ending | $ / shares | $ 0.40 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Warrants Outstanding and Exercisable (Details) | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Number of Option Outstanding | shares | 397,126 |
Warrants [Member] | |
Number of Option Outstanding | shares | 510,859 |
Weighed Averate Remaining Contractual Life (in years) | 4 years 10 months 21 days |
Weighted Average Exercise Price | $ 4.25 |
Number of Option Exercisable | shares | 22,524 |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number | $ 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' Equity (Deficit_6
Stockholders' Equity (Deficit) - Schedule of Restricted Stock Unit Activty (Details) - Restricted Stock Units (RSUs) [Member] | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Outstanding, Beginning | shares | 34,000 |
RSU, exercisable, Beginning | shares | 8,500 |
RSU, Granted | shares | |
RSU, Exercised | shares | |
RSU, Forfeited/Cancelled | shares | |
Outstanding, Ending | shares | 34,000 |
RSU, Exercisable, Ending | shares | 17,000 |
Weighted Average Exercise Price, Outstanding, Beginning | $ / shares | $ 4.53 |
Weighted Average Exercise Price, Exercisable, Beginning | $ / shares | 4.53 |
Weighted Average Exercise Price, Granted | $ / shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Forfeited/Cancelled | $ / shares | |
Weighted Average Exercise Price, Outstanding, Ending | $ / shares | 4.53 |
Weighted Average Exercise Price, Exercisable, Ending | $ / shares | $ 4.53 |
Subsequent Events - (Details Na
Subsequent Events - (Details Narrative) - USD ($) | May 10, 2021 | May 07, 2021 | May 06, 2021 | Apr. 30, 2021 | Apr. 25, 2021 | Apr. 21, 2021 | Apr. 20, 2021 | Apr. 19, 2021 | Apr. 08, 2021 | Apr. 07, 2021 | Apr. 02, 2021 | Mar. 15, 2021 | Mar. 08, 2021 | Aug. 28, 2020 | Mar. 31, 2021 | Mar. 31, 2020 |
Payment to acquire property, pland and equipment | $ 149,100 | $ 5,200 | ||||||||||||||
Horseshoe Bay, Texas [Member] | Purchase and Sale Agreement [Member] | ||||||||||||||||
Payment to acquire property, pland and equipment | $ 1,500,000 | $ 2,500,000 | ||||||||||||||
Bremerton, Washington [Member] | Purchase and Sale Agreement [Member] | ||||||||||||||||
Payment to acquire property, pland and equipment | $ 1,500,000 | |||||||||||||||
Subsequent Event [Member] | Horseshoe Bay, Texas [Member] | Purchase and Sale Agreement [Member] | ||||||||||||||||
Payment to acquire property, pland and equipment | $ 2,005,200 | $ 4,750,000 | $ 16,900,000 | $ 265,000 | $ 120,000 | $ 219,000 | ||||||||||
Subsequent Event [Member] | Belfair, Washington [Member] | Purchase and Sale Agreement [Member] | ||||||||||||||||
Payment to acquire property, pland and equipment | $ 8,640,000 | |||||||||||||||
Subsequent Event [Member] | Georgetown, Texas [Member] | Purchase and Sale Agreement [Member] | ||||||||||||||||
Payment to acquire property, pland and equipment | $ 722,975 | |||||||||||||||
Subsequent Event [Member] | Birch Bay, Washington [Member] | Purchase and Sale Agreement [Member] | ||||||||||||||||
Payment to acquire property, pland and equipment | $ 14,300,000 | |||||||||||||||
Subsequent Event [Member] | Punta Gorda, Florida [Member] | Purchase and Sale Agreement [Member] | ||||||||||||||||
Payment to acquire property, pland and equipment | $ 4,700,000 | |||||||||||||||
Subsequent Event [Member] | Bremerton, Washington [Member] | ||||||||||||||||
Payment to acquire property, pland and equipment | $ 35,000 |