DREAM HOMES & DEVELOPMENT CORPORATION Forward-Looking Statements
Management's Discussion and Analysis or Plan of Operation contains
"forward-looking" statements, as well as historical information. Although we
believe that the expectations reflected in these forward-looking statements are
reasonable, we can give no assurance that the expectations reflected in these
forward-looking statements will prove to be correct. Forward-looking statements
include those that use forward-looking terminology, such as the words
"anticipate," "believe," "estimate," "expect," "intend," "may," "project,"
"plan," "will," "shall," "should," and similar expressions, including when used
in the negative. Although we believe the expectations reflected in these
forward-looking statements are reasonable and achievable, these statements
involve risks and uncertainties, and no assurance can be given that actual
results will be consistent with these forward-looking statements. Current
shareholders and prospective investors are cautioned that any forward-looking
statements are not guarantees of future performance. Such forward-looking
statements by their nature involve substantial risks and uncertainties, certain
of which are beyond our control, and actual results for future periods could
differ materially from those discussed in this report, depending on a variety of
important factors, among which are our ability to implement our business
strategy, our ability to compete with major established companies, the
acceptance of our products in our target markets, our ability to attract and
retain qualified personnel, our ability to obtain financing, our ability to
continue as a going concern, and other risks described from time to time in our
filings with the
We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Important factors on which such statements are based are assumptions concerning uncertainties, including but not limited to uncertainties associated with the following:
(a) potential fluctuation in quarterly results;
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(b) our failure to earn revenues or profits;
(c) inadequate capital and barriers to raising the additional capital or to obtaining the financing needed to implement our business plans;
(d) inadequate capital to continue business;
(e) changes in demand for our products and services;
(f) rapid and significant changes in markets;
(g) litigation with or legal claims and allegations by outside parties;
(h) insufficient revenues to cover operating costs.
You should read the following discussion and analysis in conjunction with our financial statements and notes thereto, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of management.
PLAN OF OPERATION
Building on a history of over 1,700 new homes built and over 400
elevation/renovation/addition projects since 1993, the management of
A new trend in the real estate market which has experienced significant growth in the last year is the emerging Build To Lease trend. This focus and concentration on building both single and multi-family developments with the intention to lease them immediately upon completion is being made in response to several factors. One factor is the extreme shortage of rental properties on the market, not only for first time homemakers, but for retirees, and young professionals who are unclear as to the intentions of settling in one location. The second factor is the overall lender and funding source preference to lend to Build To Lease developments, as opposed to more traditional Build To Sell developments due to the perception of Build To Lease as a safer investment over the long term. Finally, the extraordinary amount of interest from non-traditional sources such as pension and hedge funds, insurance companies and venture capital firms to purchase completed new For Lease developments at attractive metrics based on capitalization rates has spurred a large growth in this market segment.
The Company has made the decision to change focus in their new home developments
to better accommodate this growing trend. Currently all new multi-family
developments located in
Management recognized that the effects of Super Storm Sandy, which occurred on
10/29/12, would be far reaching and cause an almost unlimited demand for
construction services, as well as specific construction information. Due to the
damage caused by the storm, as well as the material changes in the
In addition to the above projects, which are in process, the Company has also
estimated an additional
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In addition to the projects which the Company currently has under contract for
elevation, renovation, new construction and development, there are a number of
parcels of land which the Company has the ability to secure, whether through
land contract or other types of options. These parcels represent additional
opportunities for development and construction potential on the order of an
additional 400 - 800 lots and/or residential units to be developed and built
within an approximate time horizon of 5 years. Conceivably, this volume of
production could yield
The Company has positioned itself to well serve a significant portion of the
entire coastal region, from southern
Properties currently owned and in the development stage
The Company is in title to this property and is actively working with several permanent lenders to finalize an infrastructure and construction finance facility.
The Company is preparing to begin heavy infrastructure work on the property, and clearing has been completed and the site stabilized for soils erosion control. Infrastructure work should began in the last quarter of 2022 and will continue in 2023.
The Company closed on a funding package for
Preliminary approval was granted in 2021 and Final approval was granted in fall of 2022.
It is anticipated that costs for the balance of the development approvals will
be approximately +/-
The Company may need to seek loans from funding sources to finance infrastructure and vertical construction for this project.
The Company acquired this property occurred on
The Company was heard before the
The Company acquired this property on
The Company received Final approvals on
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Properties Under Contract to Purchase and in the Approval Stage
On
The application for a use variance was heard on
The Company has been deemed complete and will be heard for preliminary and final
site plan approval at the
Properties in discussion with signed letters of intent, not in contract
Discussions have been occurring since December of 2017 and a signed letter of
intent has been offered to acquire property to develop 102 townhome units in
southern
Additional Comment
For the 4th year in a row, the Company was again awarded the Ocean County
Reader's
The phrase 'The Region's Most Trusted Builder' accurately describes the Company, which is becoming increasingly well known to homeowners in need of new custom modular and site-built homes, elevation & renovation work. The management team has never failed to complete a project in over 29 years in the industry.
The Company's business model over the last year has been focused on increasing the new home and new development portion of our business, until it represents 50% - 70% of our entire revenue stream, from the current level of 20%. New home development has a much greater scalability and growth potential than elevation/renovation work. The Company has enjoyed steady growth in the renovation/elevation portion of the company and anticipates that by year end 2022 each part of the company (new homes and elevation work) will represent 50% of total revenue. By mid-year 2023, new home construction and development should represent over 70% of revenue.
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Management hopes for steady growth in all segments of the company, since the
rebuilding process will occur over the next 15-20 years. The combined total
number of homes affected by Storm Sandy that will need to be raised or
demolished and rebuilt is in excess of 30,000 homes, of which less than 10,000
have been rebuilt. This remaining combined market for new construction and
elevation projects in the Company's market area is estimated to be in the range
of
Additionally, the Company has developed referral networks with 3 major modular manufacturing companies, from which a dependable and steady stream of leads and prospects has been received over the last 6-month period. Based on these associations, it is anticipated that the Custom Modular segment of the business will enjoy significant growth for the foreseeable future.
Since modular home manufacturers will not sell directly to the public, and will only sell to a licensed builder, manufacturers need dependable new home builders to refer their leads. The Company has proven itself to be a valuable trade partner for these 3 manufacturers and has received numerous prospects and leads, some of which have already turned into contracts.
Due to the opportunities afforded by the market conditions,
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations
are based on our financial statements, which have been prepared in accordance
with
Net Income (Loss) Per Common Share
Basic net income (Basic net loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period.
Diluted net income (loss) per common share is computed using the weighted average number of common shares outstanding and potentially dilutive securities outstanding during the period (none for the periods presented).
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RESULTS OF OPERATIONS - DREAM HOMES & DEVELOPMENT CORPORATION The summary of selected financial data table below
DREAM HOMES & DEVELOPMENT CORPORATION
STATEMENTS OF OPERATIONS
Year ended Year ended
December 31, 2022 December 31, 2021
Revenue:
Construction contracts $ 6,310,883 $ 3,884,946
Cost of construction contracts 5,231,158 3,107,176
Gross profit 1,079,725 777,770
Operating Expenses:
Selling, general and administrative, including
stock based compensation of $0 and $170,000 ,
respectively 871,797 818,711
Depreciation expense 2,406 6,756
Total operating expenses 874,203 825,467
Income (loss) from operations 205,522 (47,697 )
Other income (expenses):
Loan forgiveness 51,360 -
Interest expense (102,792 ) (122,781 )
Total other income (expenses) (51,432 ) (122,781 )
Net income (loss) before income taxes 154,090 (170,478 )
Provision for income taxes - -
Net income (loss) $ 154,090 $ (170,478 )
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Results of Operations - Comparison for the years ended
Revenues
For the years ended
Cost of Construction contracts and Sales
For the years ended
Operating Expenses
Operating expenses increased
Major selling, general and administrative expenses for the year ended
Major selling, general and administrative expenses for the year ended
Liquidity and Capital Resources
As of
26 Inflation
The impact of inflation on the costs of our company, and the ability to pass on cost increases to clients over time is dependent upon market conditions. Inflationary pressures have had a significant impact on our operations during this year, and we anticipate that inflationary factors will continue to have a significant impact on future operations.
OFF-BALANCE SHEET ARRANGEMENTS
We do not maintain off-balance sheet arrangements nor do we participate in non-exchange traded contracts requiring fair value accounting treatment.
Risk
Foreign Currency Exchange Rate Risk
We are not exposed to potential gains or losses from foreign currency fluctuations.
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