Harbor Custom Development, Inc. Announces a Restatement of Diluted Earnings Per Share (EPS)
April 21 2022 - 8:30AM
Harbor Custom Development, Inc. (Nasdaq: HCDI, HCDIP, HCDIW, HCDIZ)
(“Harbor,” “Harbor Custom Homes®,” or the “Company”), an innovative
and market leading real estate company involved in all aspects of
the land development cycle, today announced it will restate its
previously issued annual financial statements for the year ended
December 31, 2021 and quarterly financial statements for the fourth
quarter ended December 31, 2021 and third quarter ended September
30, 2021 to reflect revised diluted earnings per share (“Diluted
EPS”) results.
The Company identified that the Diluted EPS for
the periods referenced above were inaccurate due to an error with
the weighting calculation of diluted shares outstanding.
These restatements result
in non-cash, non-operating financial statement
corrections and have no impact on the Company’s current or
previously reported income, expenses, assets or liabilities, except
for the aforementioned diluted weighted average shares outstanding
and Diluted EPS.
The Company expects that the restatements will
result in the following estimated adjustments:
- an increase in the previously reported Diluted EPS for the year
ended December 31, 2021, from $0.24 to $0.41;
- an increase in the previously reported Diluted EPS for the
fourth quarter ended December 31, 2021, from $0.15 to $0.16;
and
- a decrease in the previously reported Diluted EPS for the third
quarter September 30, 2021 from $0.20 to $0.17.
While the third quarter 2021 restatement
resulted in a decrease of $0.03 Diluted EPS and the fourth quarter
2021 restatement resulted in an increase of $0.01 Diluted EPS, the
net difference in the full year 2021 restated Diluted EPS increased
$0.17 because the Company overestimated the weighted average shares
outstanding for the full year.
The Company will amend its Annual Report on Form
10-K for the year ended December 31, 2021 to restate the previously
issued annual financial statements and its Quarterly Report on Form
10-Q for the quarter ended September 30, 2021 to restate the
previously issued interim financial statements. Although the
Company cannot yet estimate when it will complete the restatements
and file the amended annual report and quarterly report, the
Company is working diligently and expeditiously toward completion
of the restatements and intends to file such amended annual report
and quarterly report as soon as reasonably practicable.
In connection with these restatements,
management has re-evaluated the effectiveness of the Company’s
disclosure controls and procedures and internal control over
financial reporting. Management has concluded that in light
of the errors described above, as of September 30, 2021, the
Company did not maintain effective internal controls over the
preparation, review, presentation, and disclosure of its financial
statements related to diluted weighted average shares outstanding
and Diluted EPS. Specifically, the following material
weakness existed: misapplication of the calculation of weighted
average shares outstanding for Diluted EPS.
“In order to strengthen our internal financial
controls, we have significantly enhanced our accounting team
through the recent hirings of a Chief Financial Officer, Director
of Accounting, Senior Manager of SEC Reporting, and Tax
Manager. We are also providing additional training to our
personnel, and have engaged a nationally recognized third-party
accounting specialist with whom we can consult regarding the
application of complex accounting transactions, including Diluted
EPS,” stated Sterling Griffin, Chief Executive Officer.
About Harbor Custom Development, Inc.
Harbor Custom Development, Inc. is a real estate
development company involved in all aspects of the land development
cycle, including land acquisition, entitlements, construction of
project infrastructure, home building, marketing, sales, and
management of various residential projects in Western Washington's
Puget Sound region; Sacramento, California; Austin, Texas; and
Punta Gorda, Florida. As a land developer and builder of
apartments, condominiums, single-family homes, and luxury homes,
Harbor Custom Development’s business strategy is to acquire and
develop land strategically based on an understanding of population
growth patterns, entitlement restrictions, infrastructure
development, and geo-economic forces. Harbor focuses on acquiring
land with scenic views to develop and sell residential lots, new
home communities, and multi-story condominium and apartment
properties within a 20- to 60-minute commute of the nation’s
fastest-growing metro employment corridors. Harbor is leading the
real estate industry as the first national land developer and home
builder accepting payment in the form of cryptocurrency for its
listed properties. For more information on Harbor Custom
Development, Inc., please visit https://harborcustomhomes.com.
Forward-Looking Statements
Certain statements in this press release
constitute “forward-looking statements” within the meaning of the
federal securities laws. Words such as “may,” “might,”
“should,” “believe,” “expect,” “anticipate,” “estimate,”
“continue,” “predict,” “forecast,” “project,” “plan,” “intend” or
similar expressions, or statements regarding intent, belief, or
current expectations, are forward-looking statements. These
forward-looking statements are based upon current estimates and
assumptions. While the Company believes these forward-looking
statements are reasonable, undue reliance should not be placed on
any such forward-looking statements, which are based on information
available to us on the date of this release. These
forward-looking statements are subject to various risks and
uncertainties, including without limitation those set forth in the
Company’s filings with the Securities and Exchange
Commission. Thus, actual results could be materially
different. The Company expressly disclaims any obligation to
update or alter statements whether as a result of new information,
future events or otherwise, except as required by law.
Investor RelationsHanover
InternationalIR@harborcustomdev.com 866-744-0974
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