Overview of Our Company
The Company was incorporated pursuant to the laws of the
Overview
The real estate market in the
The Company's current portfolio includes residential, resort and commercial properties comprising the following projects:
?Oasis Park Resort is a 497-acres master planned real estate community including 1,344 residential home sites, south ofSan Felipe, Baja California that offers180-degree sea and mountain views. In addition to the residential lots, there is a planned boutique hotel, a spacious commercial center, and a nautical center. The Company recently allowed prospective homeowners and existing lot holders to tour the property again, which resulted in multiple sales closings and commitments for new home construction. 75 of the 1,344 planned residential lots were pre-sold to initial stakeholders. The Company has made significant progress on the project, which included the completion of the two-mile access road and the community entrance structure. The Company also completed the construction of the waterfront clubhouse, and model homes. The Company has not sold any home sites during the nine months endedSeptember 30, 2022 , but has received approximately$24,000 in additional payments from a home construction sold during the fourth quarter of 2021 for purchase price of$99,000 . ?Valle Divino is a self-contained solar 650-home site project inEnsenada, Baja California , with test vineyard at the property. This resort includes 137 residential lots and 3 commercial lots on 20 acres of land. The Company has a dedicated partner for solar-plus-storage power solutions at its properties, CleanSpark, Inc., which serves as the Company's exclusive partner for the installation of solar solutions across its portfolio. Management believes that this represents an estimated$60 million in gross sales opportunity. During the nine months endedSeptember 30, 2022 , the Company sold 6 land plots for total purchase price of$270,000 , of which$2,250 has been collected. The amount collected was reported under contract liability in the consolidated balance sheets. ?Plaza Bajamar Resort is an 80-unit project located at the internationally renownedBajamar Ocean front hotel and golf resort. The Bajamar oceanfront golf resort is a master planned golf community located 45 minutes south of theSan Diego -Tijuana border along the scenic toll road toEnsenada . The first Phase will include 22 "Merlot" 1,150 square-foot single-family homes that features two bedrooms and two baths. The home includes two primary bedroom suites - one on the first floor and one upstairs, as well as fairway and ocean views from a rooftop terrace. The Merlot villas will come with the installation of solar packages. The Company sold seven (7) house construction for total contractual consideration of$1,573,000 funded through seller's carryback, of which$282,570 was collected during the nine months endedSeptember 30 and reported under contract liability in the consolidated balance sheets. ?Emerald Grove Estates is the Company's newly renovatedSouthern California property, used for organized events at this 8,000 square foot event venue. There was no activity during the nine months endedSeptember 30, 2022 . Define what is or was the idea of this property. The Company acquired 80-acre Emerald Grove in 2019 for$1.1 million . In 2021, the Company sold 20-acre for sale price of$630,000 . As ofSeptember 30, 2022 , the Company collected$212,980 and the financed amount remains at$417,020 . The Company recently listed for sale its 20-acre event venue and is currently in the process of subdividing its remaining 40-acres into 8 residential lots for total price of$3.5 million . 26
Equity-method investment: ?Rancho Costa Verde ("RCVD") is a 1,100-acre master planned second home, retirement home and vacation home real estate community located on the east coast ofBaja California . RCV is a self-sustained solar powered green community that takes advantage of the advances in solar and other green technology. InMay 2021 , the Company acquired a 25% investment in RCV in exchange for$100,000 and 3,000,000 shares of the Company's common stock, and such investment was recorded as an equity-method investment in the Company's condensed consolidated financial statements. During the nine months endedSeptember 30, 2022 , RCVD generated approximately$2 million in revenue for gross profit of approximately$1 million .
Summary of key operational and financial events:
? During the nine months endedSeptember 30, 2022 , the Company collected an aggregate amount of$282,570 from house construction at thePlaza Bajamar project resulting from the execution of seven (7) house construction contracts for total contractual consideration of$1,573,000 payable over term of 120 months. cash received from the construction contract was recorded and presented as contract liability in the consolidated balance sheets. ? As ofSeptember 30, 2022 , the Company executed six (6) contracts for the sale of vacant plots for total contractual consideration of$270,000 , of which$2,250 was collected and presented as contractual liability in the consolidated balance sheets. ? To avoid paying multiple title transfer fees and the extended time for each recording, the seller for both properties,Valdeland, S.A. de C.V. , an entity controlled by the Company's Chief Executive Officer, is in the process of creating a master bank trust. This will provide the Company through its Mexican's subsidiary,International Land Alliance, S.A. de C.V. , the rights, and interest to each property, including buildings and improvements. As demonstrated from the Company'sOasis Park Resort , this will also potentially allow the Company to record revenue from itsValle Divino andPlaza Bajamar projects, as sales are made and performance obligations are satisfied, and individual trusts are established for each buyer, pending further review of Mexican trust law. The Company expects to have this trust established by the end of our fourth fiscal quarter of 2022. ? Continued our research and marketing efforts to identify potential home buyers inthe United States ,Canada ,Europe , andAsia . Through the formation of a partnership with a similar development company in theBaja California Norte Region ofMexico , we have been able to leverage additional resources with the use of their established and proven marketing plan which can help us with sophisticated execution and the desired results for residential plot sales and development. ? The Company has raised$0.7 million financing through convertible promissory notes to continue the funding of its projects and for working capital. ? The Company executed a binding letter of intent to acquire the remaining 75% of its equity-method investment in RCVD for a total purchase price of$13.5 million through the issuance of a new series of preferred stock. ? The Company intends to raise up to$5 million from accredited investors under SEC Regulation D 506(c) offering to launch a new mortgage division. The majority of the funds will be allocated to finance loans to purchasers of the Company's real estate, including home sites, home construction and finished homes, positioning itself as the first real estate developer to provide real estate financing to US citizen. This strategy is aimed at circumventing the difficulty for US citizen to obtain property financing inMexico 27
Results of Operations for the Three Months Ended
For the three months ended September 30, September 30, 2022 2021 Revenue, net$ 16,973 $ 8,340 Cost of revenue - - Gross profit 16,973 8,340 Operating expenses Sales and marketing 100,600 61,000 General and administrative expenses 432,434 496,822 Total operating expenses 533,034 557,822 Loss from operations (516,061 ) (549,482 ) Other income (expense) Other income - 100,000 Income (loss) from equity-method investment (49,752 ) 32,270 Interest income - 1,534 Change in fair value of derivative 219,069 - Interest expense (631,308 ) (226,379 ) Total other expense (461,991 ) (92,575 ) Net loss$ (978,052 ) $ (642,057 ) Revenue
Revenue increased by
Operating Expenses
Operating expenses decreased by
Sales and marketing costs increased by
General and administrative costs decreased by
Other expense
Other expense increased by approximately
28 Net Loss
The Company finished the three months ended
Results of Operations for the Nine Months Ended
For the nine months ended September 30, September 30, 2022 2021 Revenue, net$ 50,919 $ 25,899 Cost of revenue - - Gross profit 50,919 25,899 Operating expenses Sales and marketing 903,283 1,276,200 General and administrative expenses 2,506,181 1,917,067 Total operating expenses 3,409,464 3,193,267 Loss from operations (3,358,545 ) (3,167,368 ) Other income (expense) Other income (expense) 536 91,624 Income (Loss) from equity-method investment (231,845 ) 39,212 Interest Income - 1,534 Change in fair value of derivative liability 219,069 - Interest expense (960,496 ) (572,372 ) Total other expense (972,736 ) (440,002 ) Net loss$ (4,331,281 ) $ (3,607,370 ) Revenue
Revenue increased by
Operating Expenses
Operating expenses increased by
Sales and marketing costs decreased by
General and administrative costs increased by approximately
Other expense
Other expense increased by approximately
29 Net Loss
The Company finished the nine months ended
The factors that will most significantly affect future operating results will be:
? The positive effect of implemented sales and marketing initiatives to drive opportunities into our various projects. ? The quality of our amenities. ? The global economy and the demand for vacation homes. ? The sale price of future plots and home construction compared to the sale price in other resorts inMexico . ? The prime location of our projects.
Other than the foregoing we do not know of any trends, events or uncertainties that have had, or are reasonably expected to have, a material impact on our revenues or expenses.
Capital Resources and Liquidity
Cash was
We anticipate generating revenues over the next twelve months, as we continue to
market the sale of plots held for sale at our various projects, generate cash
from the sale of house construction at our properties. The above sale will
trigger a corresponding revenue only when the Company obtains title of the land
at Valle Divino and
If the Company is not successful with its marketing efforts to increase sales, the Company will continue to experience a shortfall in cash, and it will be necessary to obtain funds through equity or debt financing in sufficient amounts or to further reduce its operating expenses in a manner to avoid the need to curtail its future operations.
Operating Activities
Net cash flows used in operating activities for the nine months ended
Net cash flows used in operating activities for the nine months ended
Investing Activities
Net cash flows used in investing activities was
Net cash flows used in investing activities was
30 Financing Activities
Net cash flows provided by financing activities for the nine months ended
Net cash flows provided by financing activities for the nine months ended
As a result of these activities, we experienced an increase in cash of
Our ability to continue as a going concern is dependent on our success in obtaining additional financing from investors or from sale of our common shares.
Critical Accounting Polices
There have been no material changes to our critical accounting policies as
compared to the critical accounting policies and significant judgments and
estimates disclosed in our Annual Report on Form 10-K for the year ended
Off-balance Sheet Arrangements
During the period ended
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