Filed
Pursuant to Rule 253(g)(2)
File
No. 024-10997
Supplement
No. 3 to Offering Circular dated November 1, 2019
Manufactured
Housing Properties Inc.
136
Main Street
Pineville,
NC 28134
(980)
273-1702; www.mhproperties.com
This
Offering Circular Supplement No. 3 (the “Supplement”) relates to the Offering Circular of Manufactured Housing
Properties Inc. (the “Company”), dated November 1, 2019 (the “Offering Circular”), relating
to the Company’s public offering under Regulation A of Section 3(6) of the Securities Act of 1933, as amended, for Tier
2 offerings, pursuant to which the Company is offering up to 1,000,000 shares of Series B Cumulative Redeemable Preferred Stock
(the “Series B Preferred Stock”) at an offering price of $10.00 per share, for a maximum offering amount of
$10,000,000. In addition, the Company is offering bonus shares to early investors in this offering. The first 400 investors will
receive, in addition to Series B Preferred Stock, 100 shares of Common Stock, regardless of the amount invested, for a total of
40,000 shares of Common Stock. This Supplement should be read in conjunction with the Offering Circular and Offering Circular
Supplement No. 1 filed with the Securities and Exchange Commission (the “SEC”) on November 21, 2019 and Offering
Circular Supplement No. 2 filed with the SEC on January 7, 2020 (the “Prior Supplements”) and is qualified
by reference to the Offering Circular and the Prior Supplements except to the extent that the information contained herein supplements
or supersedes the information contained in the Offering Circular and the Prior Supplements, and may not be delivered without the
Offering Circular and the Prior Supplements.
On
November 29, 2019, the Company completed an initial closing of the offering, pursuant to which the Company sold an aggregate of
335,512 shares of Series B Preferred Stock to 103 investors for total gross proceeds of $3,355,120. After deducting the placement
fee, the Company received net proceeds of approximately $3,120,262. The Company also issued 10,300 shares of Common Stock to these
early investors.
On
December 31, 2019, the Company completed a second closing of the offering, pursuant to which the Company sold an aggregate of
74,210 shares of Series B Preferred Stock to 54 investors for total gross proceeds of $742,100. After deducting the placement
fee, the Company received net proceeds of approximately $690,153. The Company also issued 5,100 shares of Common Stock to additional
investors.
On
January 29, 2020, the Company completed a third closing of the offering, pursuant to which the Company sold an aggregate of 49,500
shares of Series B Preferred Stock to 21 investors for total gross proceeds of $525,000. After deducting the placement fee, the
Company received net proceeds of approximately $488,250. The Company also issued 2,100 shares of Common Stock to additional early
investors.
On
January 31, 2020, the Company completed a fourth closing of the offering, pursuant to which the Company sold an aggregate of 11,000
shares of Series B Preferred Stock to 4 investors for total gross proceeds of $110,000. After deducting the placement fee, the
Company received net proceeds of approximately $102,300. The Company also issued 400 shares of Common Stock to additional early
investors.
On
March 30, 2020, the Company completed a fifth closing of the offering, pursuant to which the Company sold an aggregate of 32,140
shares of Series B Preferred Stock to 14 investors for total gross proceeds of $321,400. After deducting the placement fee, the
Company received net proceeds of approximately $298,902. The Company also issued 1,400 shares of Common Stock to additional early
investors.
This
Supplement includes the attached (i) Current Report on Form 8-K/A filed with the SEC on January 10, 2020, (ii) Current Report
on Form 8-K filed on January 13, 2020 and (iii) Current Report on Form 8-K filed on March 27, 2020 (the “Reports”).
The exhibits to such Reports are not included with this Supplement and are not incorporated by reference herein.
INVESTING
IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY READ AND CONSIDER THE “RISK FACTORS” BEGINNING
ON PAGE 15 OF THE OFFERING CIRCULAR.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
determined if this Offering Circular is truthful or complete. Any representation to the contrary is a criminal offense.
The
date of this Supplement No. 3 to Offering Circular is April 1, 2020.
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K/A
(Amendment
No. 1)
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): January 10, 2020 (November 14, 2019)
Manufactured
Housing Properties Inc.
|
(Exact
name of registrant as specified in its charter)
|
Nevada
|
|
000-51229
|
|
51-0482104
|
(State
or other jurisdiction
of incorporation)
|
|
(Commission
File Number)
|
|
(IRS
Employer
Identification No.)
|
136
Main Street, Pineville, North Carolina
|
|
28134
|
(Address
of principal executive offices)
|
|
(Zip
Code)
|
(980)
273-1702
|
(Registrant’s
telephone number, including area code)
|
|
(Former
name or former address, if changed since last report)
|
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
☐
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
☐
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
☐
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule
12b-2 of the Securities Exchange Act of 1934.
Emerging
Growth Company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Securities
registered pursuant to Section 12(b) of the Act: None
EXPLANATORY
NOTE
As
previously reported, MHP Pursuits LLC, a wholly-owned subsidiary of Manufactured Housing Properties Inc., a Nevada corporation
(the “Company”), entered into a purchase agreement (the “Purchase Agreement”) with CSC Warner
Robins, LLC, a Georgia limited liability company (“CSC”), on August 5, 2019 for the asset purchase of a manufactured
housing community known as Spring Lake Mobile Home Park (the “Property”) for a total purchase price of $5.3
million. As previously reported, closing of the Purchase Agreement was completed on November 14, 2019 and the Company’s
newly formed wholly owned subsidiary, Springlake MHP LLC, purchased the Property.
This
Current Report on Form 8-K/A amends the original Form 8-K that the Company filed on November 20, 2019 to include CSC’s statement
of revenues and certain expenses for the year ended December 31, 2018 and nine months ended September 30, 2019 (unaudited) and
the unaudited pro forma combined financial information related to the acquisition required by Items 9.01(a) and 9.01(b) of Form
8-K.
|
Item
9.01
|
Financial
Statements and Exhibits.
|
(a)
Financial Statements of Business Acquired
The
statement of revenues and certain expenses for CSC for the year ended December 31, 2018 and nine months ended September 30, 2019
(unaudited) and the accompanying notes thereto is filed as Exhibit 99.1 attached hereto and is incorporated by reference herein.
(b)
Pro forma financial information
The
unaudited pro forma consolidated financial statements giving effect to the acquisition is filed as Exhibit 99.2 attached hereto
and is incorporated herein by reference.
(d)
Exhibits
Exhibit
No.
|
|
Description
of Exhibit
|
10.1
|
|
Purchase and Sale Agreement, dated August 5, 2019, between MHP Pursuits LLC and CSC Warner Robins (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on August 6, 2019)
|
10.2
|
|
Loan Agreement, dated November 14, 2019, between Springlake MHP LLC and Suntrust Bank (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on November 20, 2019)
|
10.3
|
|
Promissory Note issued by Springlake MHP LLC to Suntrust Bank on November 14, 2019 (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed on November 20, 2019)
|
99.1
|
|
Statement of Revenues and Certain Expenses
|
99.2
|
|
Unaudited Pro Forma Consolidated Financial Statements
|
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this current report to be signed on
its behalf by the undersigned hereunto duly authorized.
Date:
January 10, 2020
|
MANUFACTURED
HOUSING PROPERTIES INC.
|
|
|
|
|
By:
|
/s/
Raymond M. Gee
|
|
|
Raymond
M. Gee
|
|
|
Chief
Executive Officer
|
Exhibit
99.1
CSC
WARNER ROBINS, LLC
STATEMENT
OF REVENUES AND CERTAIN EXPENSES
FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2019 (UNAUDITED)
AND
FOR THE YEAR ENDED DECEMBER 31, 2018
INDEPENDENT
AUDITOR’S REPORT
To
the Members of:
CSC
Warner Robins, LLC
We
have audited the accompanying statement of revenue and certain expenses of CSC Warner Robins, LLC (the “Company”)
for the year ended December 31, 2018 and the related notes to the statement of revenue and certain expenses.
Management’s
responsibility for Statement of Revenue and Certain Expenses
Management
is responsible for the preparation and fair presentation of the statement or revenue and certain expenses in conformity with U.S.
generally accepted accounting principles. This includes the design, implementation, and maintenance of internal control relevant
to the preparation and fair presentation of the statement of revenue and certain expenses that are free from material misstatement,
whether due to fraud or error.
Auditor’s
Responsibility
Our
responsibility is to express an opinion on the statement of revenue and certain expenses based on our audit. We conducted our
audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the statement of revenue and certain expenses is free from material
misstatement.
An
audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the statement of revenue and
certain expenses. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material
misstatement of the statement of revenue and certain expenses, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the entity’s preparation and fair presentation of the statement of revenue
and certain expenses in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An
audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall presentation of the statement of revenue and certain expenses.
We
believe that our audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In
our opinion, the statement of revenue and certain expenses referred to above presents fairly, in all material respects, the statement
of revenue and certain expenses described on Note 1 of the Company’s statement of revenue and certain expenses for the year
ended in conformity with generally accepted accounting principles.
Emphasis
of Matter
We
draw attention to Note 1 to the statement of revenue and certain expenses, which describes that the accompanying statement of
revenue and certain expenses was prepared for the purposes of complying with the rules and regulations of the Securities and Exchange
Commission and is not intended to be a complete presentation of the Company’s revenue and expenses. Our opinion is not modified
with respect to this matter.
/s/
Liggett & Webb, P.A.
LIGGETT
& WEBB, P.A.
Certified
Public Accountants
Boynton
Beach, Florida
January
9, 2020
CSC
WARNER ROBINS, LLC
STATEMENT
OF REVENUES AND CERTAIN EXPENSES
FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2019 (UNAUDITED)
AND
FOR THE YEAR ENDED DECEMBER 31, 2018
|
|
For the
Nine Months Ended
September 30, 2019
|
|
|
For the
Year Ended December 31, 2018
|
|
|
|
(unaudited)
|
|
|
|
|
REVENUE:
|
|
|
|
|
|
|
Rental and Related Income
|
|
$
|
384,714
|
|
|
|
505,695
|
|
Total Revenues
|
|
|
384,714
|
|
|
|
505,695
|
|
|
|
|
|
|
|
|
|
|
CERTAIN EXPENSES:
|
|
|
|
|
|
|
|
|
Repairs and Maintenance
|
|
|
7,068
|
|
|
|
9,550
|
|
Insurance
|
|
|
11,532
|
|
|
|
14,352
|
|
Utilities
|
|
|
40,120
|
|
|
|
46,320
|
|
Real Estate Taxes
|
|
|
19,821
|
|
|
|
26,674
|
|
Salaries and Wages
|
|
|
40,972
|
|
|
|
65,833
|
|
Bad Debt
|
|
|
13,994
|
|
|
|
4,030
|
|
General and Administrative Expense
|
|
|
47,741
|
|
|
|
65,008
|
|
Total Certain Expenses
|
|
|
181,248
|
|
|
|
231,767
|
|
|
|
|
|
|
|
|
|
|
REVENUE IN EXCESS OF CERTAIN EXPENSES
|
|
$
|
203,466
|
|
|
$
|
273,928
|
|
See
accompanying notes to statement of revenue and certain expenses
CSC
WARNER ROBINS, LLC
NOTES
TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
NOTE
1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
(A)
Organization and Basis of Presentation
CSC
Warner Robins, LLC (the “Company”) was formed as a limited liability company under the laws of the State of Georgia.
The
accompanying statement of revenues and certain expenses has been prepared for the purpose of complying with Rule 3-14
of Regulation S-X promulgated under the Securities Act of 1933, as amended, and accordingly, is not representative
of the actual results of operations of the properties for the periods presented, due to the exclusion of the following revenues
and expenses which may not be comparable to the proposed future operations:
|
●
|
Depreciation
and amortization
|
|
●
|
Interest
income and expense
|
Except
as noted above, management is not aware of any material factors relating to the properties that would cause the reported financial
information not to be indicative of future operating results. In the opinion of management, all adjustments (consisting solely
of normal recurring adjustments) necessary for the fair presentation of this statement of revenues and certain expenses have been
included.
(B)
Use of Estimates
In
preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates
and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from
those estimates.
(C)
Business Segments
The
Company operates in one segment and therefore segment information is not presented.
(D)
Operating Expenses
Operating
expenses represent the direct expenses of operating the properties and consist primarily of real estate taxes, payroll, repairs
and maintenance, utilities, insurance and other operating expenses that are expected to continue in the proposed future operations
of the properties.
(E)
Revenue Recognition
The
Company follows Topic 606 of the FASB Accounting Standards Codification for revenue recognition and ASU 2014-09. On January 1,
2018, the Company adopted ASU 2014-09, which is a comprehensive new revenue recognition model that requires revenue to be recognized
in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to
be received in exchange for those goods or services. The Company considers revenue realized or realizable and earned when all
the five following criteria are met: (1) identify the contract with a 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) the entity satisfies a performance obligation. Results for reporting periods beginning
after January 1, 2018 are presented under ASU 2014-09, while prior period amounts are not adjusted and continue to be reported
under the previous accounting standards. There was no impact to revenues as a result of applying ASU 2014-09 for the period ended
September 30, 2019, and there have not been any significant changes to our business processes, systems, or internal controls as
a result of implementing the standard. The Company recognizes rental income revenues on a monthly basis based on the terms of
the lease agreement which are for either the land or a combination of both, the mobile home and land. Home sales revenues are
recognized upon the sale of a home with an executed sales agreement. The Company has deferred revenues from home lease purchase
options and records those option fees as deferred revenues and then records them as revenues when (1) the lease purchase option
term is completed and title has been transferred, or (2) the leaseholder defaults on the lease terms resulting in a termination
of the agreement which allows us to keep any payments as liquidated damages.
(F)
Recent Accounting Pronouncements
In
June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit
Losses on Financial Instruments.” ASU 2016-13 requires that entities use a new forward looking “expected loss”
model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit
losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability
of the reported amount. ASU No. 2016-13 is effective for annual reporting periods, including interim reporting periods within
those periods, beginning after December 15, 2019. The Company is currently evaluating the potential impact this standard may have
on the financial statements.
In
February 2016, the FASB issued ASU 2016-02, “Leases.” ASU 2016-02 amends the existing accounting standards for lease
accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor
accounting. The standard requires a modified retrospective transition approach for all leases existing at, or entered into after,
the date of initial application, with an option to use certain transition relief. ASU 2016-02 will be effective for annual reporting
periods beginning after December 15, 2019. Early adoption is permitted. The Company has evaluated the potential impact this standard
may have on the financial statements and determined that it had no impact on the financial statements.
In
June 2018, the FASB issued ASU 2018-07 “Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee
Share-Based Payment Accounting.” This ASU relates to the accounting for non-employee share-based payments. The amendment
in this Update expands the scope of Topic 718 to include all share-based payment transactions in which a grantor acquired goods
or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The ASU excludes
share-based payment awards that relate to (1) financing to the issuer or (2) awards granted in conjunction with selling goods
or services to customers as part of a contract accounted for under Topic 606, “Revenue from Contracts from Customers.”
The share-based payments are to be measured at grant-date fair value of the equity instruments that the entity is obligated to
issue when the good or service has been delivered or rendered and all other conditions necessary to earn the right to benefit
from the equity instruments have been satisfied. This standard will be effective for public business entities for fiscal years
beginning after December 15, 2018, including interim periods within that fiscal year. For all other entities, the amendments are
effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December
15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption of Topic 606. The Company is currently reviewing
the provisions of this ASU to determine if there will be any impact on the results of operations, cash flows or financial condition.
Management
does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material
effect on the accompanying financial statements.
NOTE
2 – COMMITMENTS AND CONTINGENCIES
From
time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of
business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise
that may harm its business. The Company is currently not aware of any such legal proceedings or claims that they believe will
have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results.
NOTE
3 – CONCENTRATION OF RISK
The
Company’s manufactured housing community is located in Georgia. These concentrations of assets are subject to the risks
of real property ownership and local and national economic growth trends.
NOTE
4 – INCOME TAXES
The
Company has elected to be taxed as a partnership for federal income tax purposes. Accordingly, the Company will assign to its
members a distributive share of all income, expense, depreciation, and other items, and no provision for income taxes has been
included in the accompanying financial statements.
NOTE
5 – SUBSEQUENT EVENTS
On
August 5, 2019, the Company entered into a purchase agreement (“Purchase Agreement”) with MHP Pursuits LLC, pursuant
to which MHP Pursuits LLC agreed to purchase all of the assets of the Company for $5.3 million. On November 14, 2019, closing
of the Purchase Agreement was completed.
In
preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure
through January 9, 2020, the date the financial statements were issued.
Exhibit
99.2
UNAUDITED
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The
following unaudited pro forma consolidated financial statements have been prepared in accordance with US GAAP and S-X Article
11 to provide pro forma information with regards to certain real estate acquisitions and financing transactions, as applicable.
On
August 5, 2019, MHP Pursuits LLC, a wholly-owned subsidiary of Manufactured Housing Properties Inc., a Nevada corporation (the
“Company”), entered into a purchase agreement (the “Purchase Agreement”) with CSC Warner Robins, LLC (“CSC”)
, pursuant to which MHP Pursuits LLC agreed to purchase all of the assets of CSC for $5.3 million, of which approximately $3.7
million will be attributed to the value of land and land improvements and $1.6 million will be attributed to the mobile homes.
Closing of the Purchase Agreement was completed on November 14, 2019 and the Company’s newly formed wholly owned subsidiary,
Springlake MHP LLC, purchased the assets. The transaction will be accounted for as an asset acquisition.
The
unaudited pro forma consolidated financial statements are presented for the year ended December 31, 2018 and the nine months ended
September 30, 2019 and include certain pro forma adjustments to illustrate the estimated effect of the Company’s acquisition
described above.
The
unaudited pro forma consolidated financial statements are presented for informational purposes only and do not purport to be indicative
of the Company’s financial results as if the transactions reflected herein had occurred on the date or been in effect during
the period indicated. The unaudited pro forma consolidated financial statements should not be viewed as indicative of the Company’s
financial results in the future and should be read in conjunction with the Company’s financial statements.
MANUFACTURED
HOUSING PROPERTIES INC.
UNAUDITED
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR
THE YEAR ENDED DECEMBER 31, 2018
|
|
Historical
|
|
|
Acquisition
|
|
|
Adjustment
|
|
|
Pro Forma
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental and related income
|
|
$
|
2,000,312
|
|
|
$
|
505,695
|
|
|
$
|
|
|
|
$
|
2,506,007
|
|
Total revenues
|
|
|
2,000,312
|
|
|
|
505,695
|
|
|
|
|
|
|
|
2,506,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Community operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repair and maintenance
|
|
|
135,131
|
|
|
|
9,550
|
|
|
|
|
|
|
|
144,681
|
|
Real estate taxes
|
|
|
81,024
|
|
|
|
26,674
|
|
|
|
|
|
|
|
107,698
|
|
Utilities
|
|
|
149,516
|
|
|
|
46,320
|
|
|
|
|
|
|
|
195,836
|
|
General and administrative expense
|
|
|
310,710
|
|
|
|
149,223
|
|
|
|
|
|
|
|
459,933
|
|
Depreciation and amortization expense
|
|
|
534,290
|
|
|
|
-
|
|
|
|
245,625
|
(a)
|
|
|
779,915
|
|
Interest expense
|
|
|
1,001,455
|
|
|
|
-
|
|
|
|
169,071
|
(b)
|
|
|
1,170,526
|
|
Corporate compensation expenses, including stock based compensation of $59K
|
|
|
1,030,527
|
|
|
|
-
|
|
|
|
|
|
|
|
1,030,527
|
|
Total expenses
|
|
|
3,242,653
|
|
|
|
231,767
|
|
|
|
|
|
|
|
3,889,116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) before provision for income taxes
|
|
|
(1,242,341
|
)
|
|
|
273,928
|
|
|
|
|
|
|
|
(1,383,109
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
8,286
|
|
|
|
-
|
|
|
|
|
|
|
|
8,286
|
|
Net income (loss)
|
|
$
|
(1,250,627
|
)
|
|
$
|
273,928
|
|
|
|
|
|
|
|
(1,391,395
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) noncontrolling interest
|
|
|
45,766
|
|
|
|
-
|
|
|
|
|
|
|
|
45,766
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to the Company
|
|
$
|
(1,296,393
|
)
|
|
$
|
273,928
|
|
|
|
|
|
|
$
|
(1,345,629
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average loss per share - basic and fully diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(0.13
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted averages shares - basic and fully diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,100,747
|
|
|
(a)
|
Adjustment
to recognize depreciation expense on the investment property and amortization expense
on the acquisition costs.
|
|
(b)
|
Adjustment
to recognize the interest expense on the outstanding debt issued for the purchase of
investment property.
|
MANUFACTURED
HOUSING PROPERTIES INC.
UNAUDITED
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2019
|
|
Historical
|
|
|
Acquisition
|
|
|
Adjustment
|
|
|
Pro Forma
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental and related income
|
|
$
|
1,983,283
|
|
|
$
|
384,714
|
|
|
$
|
|
|
|
$
|
2,367,997
|
|
Total revenues
|
|
|
1,983,283
|
|
|
|
384,714
|
|
|
|
|
|
|
|
2,367,997
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Community operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repair and maintenance
|
|
|
160,621
|
|
|
|
7,068
|
|
|
|
|
|
|
|
167,689
|
|
Real estate taxes
|
|
|
110,660
|
|
|
|
19,821
|
|
|
|
|
|
|
|
130,481
|
|
Utilities
|
|
|
130,744
|
|
|
|
40,120
|
|
|
|
|
|
|
|
170,864
|
|
General and administrative expense
|
|
|
274,203
|
|
|
|
114,239
|
|
|
|
|
|
|
|
388,442
|
|
Depreciation and amortization expense
|
|
|
496,966
|
|
|
|
|
|
|
|
184,219
|
(a)
|
|
|
681,185
|
|
Interest expense
|
|
|
1,076,254
|
|
|
|
-
|
|
|
|
126,803
|
(b)
|
|
|
1,203,057
|
|
Corporate compensation expenses, including stock based compensation of $59K
|
|
|
587,463
|
|
|
|
-
|
|
|
|
|
|
|
|
587,463
|
|
Refinancing cost
|
|
|
552,272
|
|
|
|
-
|
|
|
|
|
|
|
|
552,272
|
|
Total expenses
|
|
|
3,389,183
|
|
|
|
181,248
|
|
|
|
|
|
|
|
3,881,453
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) before provision for income taxes
|
|
|
(1,405,900
|
)
|
|
|
203,466
|
|
|
|
|
|
|
|
(1,513,456
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends
|
|
|
90,834
|
|
|
|
-
|
|
|
|
|
|
|
|
90,834
|
|
Provision for income taxes
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
Net income (loss)
|
|
$
|
(1,496,734
|
)
|
|
$
|
203,466
|
|
|
|
|
|
|
|
(1,604,290
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) noncontrolling interest
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to the Company
|
|
$
|
(1,496,734
|
)
|
|
$
|
203,466
|
|
|
|
|
|
|
$
|
(1,604,290
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average loss per share - basic and fully diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(0.13
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares - basic and fully diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,738,962
|
|
|
(a)
|
Adjustment
to recognize depreciation expense on the investment property and amortization expense
on the acquisition costs.
|
|
(b)
|
Adjustment
to recognize the interest expense on the outstanding debt issued for the purchase of
investment property.
|
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): January 13, 2020 (January 7, 2020)
Manufactured
Housing Properties Inc.
|
(Exact
name of registrant as specified in its charter)
|
Nevada
|
|
000-51229
|
|
51-0482104
|
(State
or other jurisdiction
of incorporation)
|
|
(Commission
File Number)
|
|
(IRS
Employer
Identification No.)
|
136
Main Street, Pineville, North Carolina
|
|
28134
|
(Address
of principal executive offices)
|
|
(Zip
Code)
|
(980)
273-1702
|
(Registrant’s
telephone number, including area code)
|
|
(Former
name or former address, if changed since last report)
|
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
☐
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
☐
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
☐
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule
12b-2 of the Securities Exchange Act of 1934.
Emerging
Growth Company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Securities
registered pursuant to Section 12(b) of the Act: None
|
Item
1.01
|
Entry
into a Material Definitive Agreement.
|
Gilmer
and Sons
On
January 7, 2020, MHP Pursuits LLC (the “Buyer”), a wholly-owned subsidiary of Manufactured Housing Properties
Inc., a Nevada corporation, entered into a purchase and sale agreement (the “Gilmer and Sons Purchase Agreement”)
with Gilmer and Sons Mobile Home Sales and Rentals, Inc., a South Carolina corporation (“Gilmer and Sons”),
for the asset purchase of 11 manufactured housing communities located in South Carolina and consisting of 215 homes and 4 home-ready
vacant lots for a total purchase price of $7,325,000.
The
Gilmer and Sons Purchase Agreement includes an earnest money deposit of $15,000 and an additional deposit of $20,000 upon expiration
of the due diligence period, which will be applied to the payment of the purchase price at closing, and provides for a due diligence
period of 30 days commencing upon Gilmer and Sons’ delivery of due diligence materials to the Buyer, plus an additional
45 days solely for the completion of third-party reports. The closing is to occur 30 days after expiration of the due diligence
period, or such earlier date as the parties may agree upon in writing.
The
Gilmer and Sons Purchase Agreement contains customary representations and warranties. The closing of the Gilmer and Sons Purchase
Agreement is subject to customary closing conditions and delivery of customary closing documents, including, without limitation,
a special warranty deed conveying title to the properties subject only to certain permitted exceptions; if requested by the Buyer,
a non-warranty deed conveying the properties; a bill of sale and general assignment transferring all of Gilmer and Sons’
right, title and interest in the personal property, intangible property, property files, warranties and licenses to the Buyer;
an assignment and assumption agreement assigning to the Buyer all of Gilmer and Sons’ right, title and interest in all leases
and any other contracts that the Buyer elects to assume; all certificates of title and other documents for the transfer of title
and title insurance; a FIRPTA affidavit; and customary closing certificates and closing statements.
The
foregoing summary of the terms and conditions of the Gilmer and Sons Purchase Agreement does not purport to be complete and is
qualified in its entirety by reference to the full text of the agreement attached hereto as Exhibit 10.1, which is incorporated
herein by reference.
J&A
Real Estate
On
January 7, 2020, the Buyer also entered into a purchase and sale agreement (the “J&A Purchase Agreement”)
with J&A Real Estate, LLC, a South Carolina limited liability company (“J&A”), for the asset purchase
of a manufactured housing community located in Georgia and consisting of 110 sites on approximately 35 acres for a total purchase
price of $3,700,000.
The
J&A Purchase Agreement includes a deposit of $30,000, which will be applied to the payment of the purchase price at closing,
and provides for a due diligence period of 30 days commencing upon J&A’s delivery of due diligence materials to the
Buyer. The closing is to occur 30 days after expiration of the due diligence period, or such earlier date as the parties may agree
upon in writing.
The
J&A Purchase Agreement contains customary representations and warranties. The closing of the J&A Purchase Agreement is
subject to customary closing conditions and delivery of customary closing documents, including, without limitation, a special
warranty deed conveying title to the properties subject only to certain permitted exceptions; if requested by the Buyer, a non-warranty
deed conveying the properties; a bill of sale and general assignment transferring all of J&A’s right, title and interest
in the personal property, intangible property, property files, warranties and licenses to the Buyer; an assignment and assumption
agreement assigning to the Buyer all of J&A’s right, title and interest in all leases and any other contracts that the
Buyer elects to assume; all certificates of title and other documents for the transfer of title and title insurance; a FIRPTA
affidavit; and customary closing certificates and closing statements.
The
foregoing summary of the terms and conditions of the J&A Purchase Agreement does not purport to be complete and is qualified
in its entirety by reference to the full text of the agreement attached hereto as Exhibit 10.2, which is incorporated herein by
reference.
|
Item
9.01
|
Financial
Statements and Exhibits.
|
(d)
Exhibits
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this current report to be signed on
its behalf by the undersigned hereunto duly authorized.
Date:
January 13, 2020
|
MANUFACTURED
HOUSING PROPERTIES INC.
|
|
|
|
|
By:
|
/s/
Raymond M. Gee
|
|
|
Raymond
M. Gee
|
|
|
Chief
Executive Officer
|
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): March 27, 2020 (January 1, 2020)
Manufactured
Housing Properties Inc.
|
(Exact
name of registrant as specified in its charter)
|
Nevada
|
|
000-51229
|
|
51-0482104
|
(State
or other jurisdiction
of incorporation)
|
|
(Commission
File Number)
|
|
(IRS
Employer
Identification No.)
|
136
Main Street, Pineville, North Carolina
|
|
28134
|
(Address
of principal executive offices)
|
|
(Zip
Code)
|
(980)
273-1702
|
(Registrant’s
telephone number, including area code)
|
|
(Former
name or former address, if changed since last report)
|
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
☐
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
☐
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
☐
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule
12b-2 of the Securities Exchange Act of 1934.
Emerging
Growth Company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Securities
registered pursuant to Section 12(b) of the Act: None
|
Item
1.01
|
Entry
into a Material Definitive Agreement.
|
Countryside
Closing
As
previously disclosed on January 13, 2020, MHP Pursuits LLC, a wholly-owned subsidiary of Manufactured Housing Properties Inc.,
a Nevada corporation (the “Company”), entered into a purchase and sale agreement (the “Countryside
Purchase Agreement”) with J & A Real Estate LLC (“J&A”) on January 7, 2020 for the purchase
of a manufactured housing community known as Countryside Estates Mobile Home Park (the “Countryside Property”),
which is located in Lancaster, North Carolina and totals 110 sites, for a total purchase price of $3.7 million. On March 12, 2020,
closing of the Countryside Purchase Agreement was completed and the Company’s newly formed wholly owned subsidiary Countryside
MHP LLC (“Countryside”) purchased the Countryside Property.
In
connection with the closing, on March 12, 2020, Countryside issued a promissory note to J&A in the principal amount of $3,000,000
(the “Countryside Note”). The remainder of the purchase price for the Countryside Property, or $700,000, was
paid in cash. The Countryside Note bears interest at the rate of 5.5% per annum, or the maximum rate allowed by applicable law,
and is due and payable in full on March 20, 2050. Payments for the first twelve (12) months of the term of the Countryside Note
shall be interest-only in the amount of $13,750 per month. Thereafter, principal and interest, in the amount of $17,201 per month,
shall be due and payable based upon a thirty (30) year amortization. If any monthly payment is not received by J&A within
fifteen (15) days after the applicable due date, Countryside must pay a late charge in an amount equal to the delinquent amount
then due multiplied by 4%. Countryside may prepay the Countryside Note, in whole or in party, at any time without penalty.
The
Countryside Note also contains customary events of default, including: (i) if Countryside shall be in default in the payment of
any principal, interest or other amount due under the Countryside Note and such default shall not be cured within five (5) days
after written notice from J&A; (ii) if Countryside shall be in default in the performance of any non-monetary obligation in
the Countryside Note and such default shall not be cured within thirty (30) days after written notice from J&A; or (iii) if
Countryside shall default in the due observation or performance of any covenant, condition or agreement contained in the Mortgage
(as defined below) and such default shall not be cured within thirty (30) days after written notice from J&A. Upon the occurrence
of an event of default, interest on the aggregate outstanding indebtedness (including accrued interest) of the Countryside Note
shall increase to 5.5% per annum plus the U.S. Prime Rate as measured and reported by the Wall Street Journal and in effect on
the date of default, until such aggregate indebtedness is paid in full.
The
Countryside Note is secured by a mortgage, assignment of rents and leases, security agreement and fixture filing with respect
to the Countryside Property (the “Mortgage”). The Mortgage contains customary representations, warranties and
covenants by Countryside and remedies upon an event of default under the Countryside Note.
The
foregoing summary of the terms and conditions of the Countryside Note and the Mortgage does not purport to be complete and is
qualified in its entirety by reference to the full text of the agreements attached hereto as Exhibits 10.2 and 10.3, respectively,
which are incorporated herein by reference.
Evergreen
Signing and Closing
On
January 1, 2020, MHP Pursuits LLC, a wholly-owned subsidiary of the Company, entered into a purchase and sale agreement (the “Evergreen
Purchase Agreement”) with Evergreen Marketing LLC for the purchase of a manufactured housing community known as Evergreen
Pointe Mobile Home Park (the “Evergreen Property”), which is located in Dandridge, Tennessee and totals 65
sites, for a total purchase price of $1,438,000. On March 17, 2020, closing of the Evergreen Purchase Agreement was completed
and the Company’s newly formed wholly owned subsidiary Evergreen MHP LLC (“Evergreen”) purchased the
Evergreen Property.
In
connection with the closing, on March 17, 2020, Evergreen entered into a loan agreement (the “Loan Agreement”)
with Hunt Mortgage Capital, LLC (the “Lender”) for a loan in the principal amount of $1,150,000 and Evergreen
issued a promissory note to the Lender in the principal amount of $1,150,000 (the “Evergreen Note”). The remainder
of the purchase price for the Evergreen Property, or $288,000, was paid in cash.
The
Evergreen Note bears interest at a rate of 3.99% per annum and is due and payable on April 1, 2032. The monthly payments under
the Evergreen Note are equal to $5,483.65. If any monthly payment is not received by the Lender within ten (10) days after the
applicable due date, Evergreen must pay a late charge in an amount equal to the delinquent amount then due multiplied by 5%. Furthermore,
if any payment remains past due for thirty (30) days or more, interest on such unpaid amounts shall accrue at the lesser of 7.99%
or the maximum rate allowed by applicable law. Evergreen may prepay the Evergreen Note in full, but not in part, at any time if
it pays a prepayment premium calculated in accordance with the Loan Agreement.
The
Evergreen Note is secured by the Evergreen Property and guaranteed by Mr. Raymond M. Gee, the Company’s Chief Executive
Officer, Gvest Capital Real Estate LLC, an entity controlled by Mr. Gee, and the Company (the “Guarantors”).
The
Loan Agreement was subject to customary closing conditions and contains customary representations and warranties. The Loan Agreement
also contains customary financial and other covenants for a loan of this type. The Loan Agreement also contains customary events
of default, some of which are subject to cure periods as set forth in the Loan Agreement, including, but not limited to: (i) any
failure by Evergreen to pay or deposit when due any amount required by the Note, the Loan Agreement or any other loan document
(as defined in the Loan Agreement); (ii) any failure by Evergreen to maintain the insurance coverage required by any loan document;
(iii) if any warranty, representation, certification, or statement of Evergreen or any Guarantor in the Loan Agreement or any
of the other loan documents is false inaccurate, or misleading in any material respect when made; (iv) the fraud, gross negligence,
willful misconduct, or material misrepresentation or material omission by or on behalf of Borrower or any Guarantor or any of
their officers, directors, trustees, partners, members, or managers in connection with the application for, or creation of, the
loan or any financial statement, rent roll, or other report or information provided to Lender during the term of the loan; (v)
the occurrence of any transfer (as defined in the Loan Agreement) not permitted by the loan documents; (vi) the occurrence of
a bankruptcy event (as defined in the Loan Agreement); (vii) if a Guarantor is a natural person, the death of such individual,
unless certain requirements set forth in the Loan Agreement are met; (viii) the occurrence of a guarantor bankruptcy event (as
defined in the Loan Agreement), unless certain requirements of the Loan Agreement are met; (ix) any failure by Evergreen or a
Guarantor to comply with certain covenants in the Loan Agreement; or (x) any failure by Evergreen to perform any of its obligations
under the Loan Agreement or any loan document as and when required.
The
foregoing summary of the terms and conditions of the Evergreen Purchase Agreement, the Loan Agreement and Evergreen Note does
not purport to be complete and is qualified in its entirety by reference to the full text of the agreements attached hereto as
Exhibits 10.4, 10.5 and 10.6, respectively, which are incorporated herein by reference.
|
Item
2.01
|
Completion
of Acquisition or Disposition of Assets.
|
The
information set forth under Item 1.01 is incorporated by reference into this Item 2.01.
|
Item
2.03
|
Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
of a Registrant.
|
The
information set forth under Item 1.01 with respect to the Countryside Note, the Evergreen Note and the Loan Agreement and the
Note is incorporated by reference into this Item 2.01.
|
Item
9.01
|
Financial
Statements and Exhibits.
|
(a)
Financial Statements of Business Acquired
The
financial statements of businesses acquired will be filed by an amendment to this Form 8-K within 71 calendar days of the date
hereof.
(b)
Pro forma financial information
Pro
forma financial information will also be filed by an amendment to this Form 8-K within 71 calendar days of the date hereof.
(d)
Exhibits
Exhibit
No.
|
|
Description
of Exhibit
|
10.1
|
|
Purchase and Sale Agreement, dated January 7, 2020, between MHP Pursuits LLC and J & A Real Estate LLC (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on January 13, 2020)
|
10.2
|
|
Promissory Note issued by Countryside MHP LLC to J & A Real Estate LLC on March 12, 2020
|
10.3
|
|
Mortgage, Assignment of Rents and Leases, Security Agreement and Fixture Filing, dated March 12, 2020, between Countryside MHP LLC and J & A Real Estate LLC
|
10.4
|
|
Purchase and Sale Agreement, dated January 1, 2020, between MHP Pursuits LLC and Evergreen Marketing LLC
|
10.5
|
|
Loan Agreement, dated March 17, 2020, between Evergreen MHP LLC and Hunt Mortgage Capital, LLC
|
10.6
|
|
Promissory Note issued by Evergreen MHP LLC to Hunt Mortgage Capital, LLC on March 17, 2020
|
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this current report to be signed on
its behalf by the undersigned hereunto duly authorized.
Date:
March 27, 2020
|
MANUFACTURED
HOUSING PROPERTIES INC.
|
|
|
|
|
By:
|
/s/
Raymond M. Gee
|
|
|
Raymond
M. Gee
|
|
|
Chief
Executive Officer
|
19
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