Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
|
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
|
|
(Address of principal executive offices)
|
(Zip code)
|
Title of each class
|
Trading symbol(s)
|
Name of each exchange on which registered
|
|
|
|
Large accelerated filer
|
☐ |
Accelerated filer
|
☐
|
|
☒ |
Smaller reporting company
|
|
Emerging growth company
|
|
3
|
||
3
|
||
3
|
||
4
|
||
5
|
||
7
|
||
8
|
||
25
|
||
48
|
||
49
|
||
50
|
||
50
|
||
50
|
||
51
|
||
52
|
||
53
|
ITEM 1. |
DREAM FINDERS HOMES CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
September 30,
2021
(Unaudited)
|
December 31,
2020
|
|||||||
Assets
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Restricted cash (VIE amounts of $
|
|
|
||||||
Accounts receivable
(VIE amounts of $
|
||||||||
Inventories:
|
||||||||
Construction in process and finished homes
|
|
|
||||||
VIE owned land and lots
|
|
|
||||||
Company owned land and lots
|
|
|
||||||
Lot deposits
|
|
|
||||||
Equity method investments
|
|
|
||||||
Property and equipment, net
|
|
|
||||||
Operating lease right-of-use assets
|
|
|
||||||
Finance lease right-of-use assets
|
|
|
||||||
Intangible assets, net of amortization
|
|
|
||||||
Goodwill
|
|
|
||||||
Deferred tax asset
|
|
|
||||||
Other assets (VIE amounts of $
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
Liabilities
|
||||||||
Accounts payable (VIE amounts of $
|
$
|
|
$
|
|
||||
Accrued expenses (VIE amounts of $
|
|
|
||||||
Customer deposits
|
|
|
||||||
Construction lines of credit
|
|
|
||||||
Notes payable (VIE amounts of $
|
|
|
||||||
Operating lease liabilities
|
|
|
||||||
Finance lease liabilities
|
|
|
||||||
Contingent consideration
|
|
|
||||||
Total liabilities
|
$
|
|
$
|
|
||||
Commitments and contingencies (Note 6)
|
||||||||
Mezzanine Equity
|
||||||||
Preferred mezzanine equity
|
|
|
||||||
Common mezzanine equity
|
|
|
||||||
Total mezzanine equity
|
$
|
|
$
|
|
||||
Members' Equity
|
||||||||
Common members' equity
|
-
|
|
||||||
Total members' equity
|
$
|
-
|
$
|
|
||||
Stockholders' Equity - Dream Finders Homes, Inc.
|
||||||||
Class A common stock, $
|
|
-
|
||||||
Class B common stock, $
|
|
-
|
||||||
Additional paid-in capital
|
|
-
|
||||||
Retained earnings
|
|
-
|
||||||
Non-controlling interests
|
|
|
||||||
Total stockholders' and members' equity
|
|
|
||||||
Total liabilities, mezzanine equity, members' equity and stockholders' equity
|
$
|
|
$
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020 |
|||||||||||||
Revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Cost of sales
|
|
|
|
|
||||||||||||
Selling, general and administrative expense
|
|
|
|
|
||||||||||||
Income from equity in earnings of unconsolidated entities
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Loss/(Gain) on sale of assets
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Loss on extinguishment of debt
|
|
|
|
|
||||||||||||
Other Income | ||||||||||||||||
Other
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Paycheck Protection Program forgiveness
|
|
|
(
|
)
|
|
|||||||||||
Other Expense | ||||||||||||||||
Other
|
|
|
|
|
||||||||||||
Contingent consideration revaluation
|
|
|
|
(
|
)
|
|||||||||||
Interest expense
|
|
|
|
|
||||||||||||
Income before taxes
|
|
|
|
|||||||||||||
Income tax expense
|
(
|
)
|
|
(
|
)
|
|
||||||||||
Net and comprehensive income
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Net and comprehensive income attributable to non-controlling interests
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Net and comprehensive income attributable to Dream Finders Homes, Inc.
|
$
|
|
$
|
|
$
|
|
$ | |||||||||
Earnings per share(1)
|
||||||||||||||||
Basic
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Diluted
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Weighted-average number of share
|
||||||||||||||||
Basic
|
|
|
|
|
||||||||||||
Diluted
|
|
|
|
|
Redeemable Preferred
Units
Mezzanine
|
Redeemable Common
Units
Mezzanine
|
Common Units
Members'
|
Total
Non-Controlling
Interests
|
Total Equity
|
||||||||||||||||||||||||||||
Units
|
Amount
|
Units
|
Amount
|
Units
|
Amount
|
|||||||||||||||||||||||||||
Balance at June 30, 2020
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
|
|||||||||||||||||||
Unit compensation
|
-
|
-
|
-
|
-
|
-
|
|
|
|
||||||||||||||||||||||||
Contributions
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Contributions from non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
|
|
|
||||||||||||||||||||||||
Conversion of units
|
-
|
-
|
-
|
-
|
-
|
|
|
|
||||||||||||||||||||||||
Redemptions
|
(
|
)
|
(
|
)
|
|
|
|
|
|
(
|
)
|
|||||||||||||||||||||
Distributions
|
-
|
(
|
)
|
-
|
|
-
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||||
Net income (loss)
|
-
|
|
-
|
|
-
|
|
|
|
||||||||||||||||||||||||
Balance at September 30, 2020
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
Redeemable Preferred
Units
Mezzanine
|
Redeemable Common
Units
Mezzanine
|
Common Units
Members'
|
Total
Non-Controlling
Interests
|
Total Equity
|
||||||||||||||||||||||||||||
Units
|
Amount
|
Units
|
Amount
|
Units
|
Amount
|
|||||||||||||||||||||||||||
Balance December 31, 2019
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
|
|||||||||||||||||||
Unit compensation
|
-
|
-
|
-
|
-
|
-
|
|
|
|
||||||||||||||||||||||||
Contributions
|
|
|
|
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Contributions from non-controlling interests
|
- |
-
|
-
|
-
|
-
|
|
|
|
||||||||||||||||||||||||
Conversion of units
|
- |
- |
- |
- |
- |
|||||||||||||||||||||||||||
Redemptions
|
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Distributions
|
-
|
(
|
)
|
-
|
|
-
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||||
Net income (loss)
|
-
|
|
-
|
|
-
|
|
|
|
||||||||||||||||||||||||
Balance at September 30, 2020
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
Redeemable Preferred
Units
Mezzanine
|
Redeemable Common
Units
Mezzanine
|
Common Units
Members'
|
Common Stock - Class A
|
Common Stock - Class B
|
Additional Paid-
in Capital
|
Retained Earnings
|
Total
Non-Controlling
Interests
|
Total Equity
|
||||||||||||||||||||||||||||||||||||||||||||||||
Units
|
Amount
|
Units
|
Amount
|
Units
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2021
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||||||||||||||||||||||||
Issuance of convertible preferred stock, net
|
- | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation
|
-
|
-
|
-
|
-
|
-
|
|
-
|
|
-
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Contributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Contribution from non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
|
-
|
|
-
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Conversion of units
|
-
|
-
|
-
|
-
|
-
|
|
-
|
|
-
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Distributions
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||||||||||||||||||||
Net income
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2021
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Redeemable Preferred
Units
Mezzanine
|
Redeemable Common
Units
Mezzanine
|
Common Units
Members'
|
Common Stock - Class A
|
Common Stock - Class B
|
Additional Paid-
in Capital
|
Retained Earnings
|
Total
Non-Controlling
Interests
|
Total Equity
|
||||||||||||||||||||||||||||||||||||||||||||||||
Units
|
Amount
|
Units
|
Amount
|
Units
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||||||||||||||||||||||||
Balance December 31, 2020
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||||||||||||||||||||||||||
Unit compensation
|
-
|
-
|
-
|
-
|
-
|
|
-
|
|
-
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Contributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
Contributions from non-controlling interests
|
|
-
|
-
|
-
|
-
|
|
-
|
|
-
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Conversion of units
|
-
|
-
|
-
|
-
|
-
|
|
-
|
|
-
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Redemptions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Distributions
|
-
|
(
|
)
|
-
|
(
|
)
|
-
|
(
|
)
|
-
|
|
-
|
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||||||||||||||
Net income (loss)
|
-
|
(
|
)
|
-
|
(
|
)
|
-
|
(
|
)
|
-
|
|
-
|
|
|
|
|
(
|
)
|
||||||||||||||||||||||||||||||||||||||
Balance at January 20, 2021 - prior to reorganization transactions and IPO
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||||||||||||||||||||||||
Reorganization transactions
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
Issuance of common stock in IPO, net
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Issuance of convertible preferred stock, net
|
- | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation
|
-
|
-
|
-
|
-
|
-
|
|
-
|
|
-
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Contributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Contributions from non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
|
-
|
|
-
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Conversion of units
|
-
|
-
|
-
|
-
|
-
|
|
-
|
|
-
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Redemptions
|
(
|
)
|
(
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(
|
)
|
|||||||||||||||||||||||||||||||||||||||
Distributions
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||||||||||||||||||||
Net income (loss)
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2021
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Nine Months Ended September 30,
|
||||||||
2021
|
2020
|
|||||||
Cash Flows from Operating Activities
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments to Reconcile Net Income to Net Cash Used in Operating Activities
|
||||||||
Depreciation and Amortization
|
|
|
||||||
Loss on sale of property and equipment
|
(
|
)
|
(
|
)
|
||||
Amortization of debt issuance costs
|
|
|
||||||
Extinguishment of unamortized debt issuance costs | ||||||||
Amortization of right-of-use operating lease
|
|
|
||||||
Amortization of right-of-use financing lease
|
|
|
||||||
Stock compensation expense
|
|
|
||||||
Forgiveness of Paycheck Protection Program
|
||||||||
Deferred Tax Expense (Benefit)
|
(
|
|
||||||
Income from equity method investments, net of distributions received
|
(
|
)
|
|
|||||
Remeasurement of contingent consideration
|
|
|
||||||
Changes in Operating Assets and Liabilities
|
||||||||
Inventories
|
(
|
)
|
(
|
)
|
||||
Lot deposits
|
(
|
)
|
(
|
)
|
||||
Other assets
|
(
|
)
|
(
|
)
|
||||
Accounts payable and accrued expenses
|
|
|
||||||
Customer deposits
|
|
|
||||||
Operating Lease ROU Assets | ( |
) | ||||||
Operating lease liabilities
|
(
|
)
|
(
|
)
|
||||
Net cash used in operating activities
|
(
|
)
|
|
|||||
Cash Flows from Investing Activities
|
||||||||
Purchase of property and equipment
|
(
|
)
|
(
|
)
|
||||
Proceeds from disposal of property and equipment
|
|
|
||||||
Investments in equity method investments
|
(
|
)
|
(
|
)
|
||||
Return of investments from equity method investments
|
|
|
||||||
Business combinations, net of cash acquired
|
(
|
)
|
|
|||||
Net cash provided used in investing activities
|
(
|
)
|
|
|||||
Cash Flows from Financing Activities
|
||||||||
Proceeds from issuance of common stock | ||||||||
Proceeds from issuance of convertible preferred stock |
||||||||
Proceeds from construction lines of credit
|
|
|
||||||
Principal payments on construction li |