Note 5 - Non-controlling Interest and Variable Interest Entities

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Variable Interest Entity Disclosure [Text Block]

Note 5 – NON-CONTROLLING INTEREST AND VARIABLE INTEREST ENTITIES

TWS and Grand Woods are accounted for as consolidated VIEs. The Company owns an 80.37% interest in Grand Woods in the form of 47.08 Class A units and 546,735 Class C units, with the remaining non-controlling member interests held by other members, including 8.72% owned by executive officers of the Company. Grand Woods holds approximately 26.56 acres of undeveloped real estate in northeast Oklahoma City.

On September 15, 2022, Grand Woods entered into an agreement (“the 2022 Agreement”) with its members that resulted in the Company having the power to direct the activities significant to Grand Woods and becoming the primary beneficiary; therefore, consolidation of Grand Woods became required and effective for the period ending September 30, 2022. The Company is the only guarantor of $1,200,000 of a note payable held by Grand Woods. See Note 6 for terms and guarantee of debt held by Grand Woods, which is included in the consolidated balance sheets. As a result of the Company’s guarantee of $1,200,000 of Grand Woods debt, the noteholder has partial recourse to the Company for the consolidated VIE’s liabilities.

The following table presents the summarized assets and liabilities of Grand Woods and TWS included in the consolidated balance sheets as of March 31, 2023 and December 31, 2022. The assets of Grand Woods and TWS in the table below may only be used to settle obligations of Grand Woods or TWS, respectively.

The assets and liabilities in the table below include third party assets and liabilities only and exclude intercompany balances that eliminate in consolidation.

	March 31, 2023
	Grand Woods		TWS			Total
Assets:
Cash	$	50,495	$	306,479		$	356,974
Accounts Receivable		-		10,000			10,000
Other Investments (Land)		2,171,828		-			2,171,828
Total Current Assets		2,222,323		316,479			2,538,802
Other Property and Equipment, at cost		-		419,044			419,044
Less – Accumulated Depreciation		-		(110,431	)		(110,431	)
Other Property and Equipment, Net		-		308,613			308,613
Total Assets	$	2,222,323	$	625,092		$	2,847,415
Liabilities:
Accounts Payable	$	-	$	5,155		$	5,155
Note Payable, Current Portion		137,866		-			137,866
Total Current Liabilities		137,866		5,155			143,021
Note Payable, Less Current Portion		1,265,808		-			1,265,808
Total Liabilities	$	1,403,674	$	5,155		$	1,408,829

	December 31, 2022
	Grand Woods		TWS			Total
Assets:
Cash	$	24,050	$	281,654		$	305,704
Accounts Receivable		-		72,716			72,716
Other Investments (Land)		2,171,828		-			2,171,828
Total Current Assets		2,195,878		354,370			2,550,248
Other Property and Equipment, at cost		-		419,044			419,044
Less – Accumulated Depreciation		-		(92,278	)		(92,278	)
Other Property and Equipment, Net		-		326,766			326,766
Total Assets	$	2,195,878	$	681,136		$	2,877,014
Liabilities:
Accounts Payable	$	-	$	58,742		$	58,742
Note Payable, Current Portion		136,637		-			136,637
Total Current Liabilities		136,637		58,742			195,379
Note Payable, Less Current Portion		1,300,872		-			1,300,872
Total Liabilities	$	1,437,509	$	58,742		$	1,496,251