#1HARBOR Custom Development, Inc. Premium Builder & Land Developer in Targeted U.S. Metro Regions NASDAQ:HCDI; HCDIP; HCDIW; HC DIZ JULY 2023 | INVESTOR DECK 11 17 H SA G.O OF WET UR FO LP H H#2NASDAQ: HCDI; HCDIP; HCDIW; HCDIZ Forward Looking Statements & Disclosures decline; difficulty in obtaining sufficient capital could result in an inability to acquire land for our developments or increased costs and delays in the completion of development projects; our operations and performance are subject to risks associated within both the construction and real estate industries; failure to manage land acquisitions and development and construction processes could result in significant cost overruns or errors in valuing sites; and the rising cost of materials due to supply chain constraints has increased our costs of construction. The interest rate environment could materially affect our ability to finance our projects, as well as achieve the originally expected sales prices on our properties. Forward Looking Statements: This presentation contains forward- looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including information about management's view of Harbor Custom Development, Inc.'s ("we," "us," "our," or the "Company") future expectations, plans, and prospects. In particular, when used in the following discussion, the words "believes," "expects," "intends," "plans," "anticipates," or "may," and similar conditional expressions are intended to identify forward-looking statements. Any statements made in this presentation other than those of historical fact about an action, event, or development, are forward-looking statements. These statements involve known and unknown risks, uncertainties, and other factors which may cause the results of the Company and its subsidiaries to be materially different than those expressed or implied in such statements. Unknown or unpredictable factors could also have material adverse effects on the Company's future results. The forward-looking statements included in this presentation are made only as of the date hereof. We cannot guarantee future results, levels of activity, performance, or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, we undertake no obligation to update these statements, except as required by law, and also undertake no obligation to update or correct information prepared by third parties that are not paid by us. Summary of Risk Factors: We face risks, which include, but are not limited to the following: adverse changes in general economic conditions could reduce the demand for homes and land and, as a result, could have a material adverse effect on us; our long-term growth depends upon our ability to successfully identify and acquire desirable land parcels for residential build-out; if homebuyers are not able to obtain suitable financing, our results of operations may HARBOR CUSTOM DEVELOPMENT | INVESTOR DECK Intellectual Property Disclosure: This presentation contains references to our Company's trademarks and to trademarks belonging to other entities. Solely for convenience, trademarks and trade names herein, including logos, artwork, and other visual displays, appear without the R or TM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend the use or display of other companies' trade names or trademarks to imply a relationship with or endorsement from us. Non-GAAP Financial Measures: This presentation and the financial information contained herein include EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin, which are financial measures that have not been calculated in accordance with accounting principles generally accepted in the United States, or GAAP, and are therefore referred to as non-GAAP financial measures. We have provided definitions below for these non-GAAP financial measures and have provided tables in the schedules hereto to reconcile these non-GAAP financial measures to comparable GAAP financial measures. We believe that these non-GAAP financial measures provide valuable information regarding our earnings and business trends by excluding specific items that we believe are not indicative of the ongoing operating results of our businesses, providing a useful way for investors to make a comparison of our performance over time and against other companies in our industry. We have provided these non-GAAP financial measures as supplemental information to our GAAP financial measures and believe these non-GAAP measures provide investors with additional meaningful financial information regarding our operating performance and cash flows. Our management and board of directors also use these non-GAAP measures as supplemental measures to evaluate our businesses and the performance of management, including the determination of performance-based compensation, to make operating and strategic decisions, and to allocate financial resources. We believe that these non-GAAP measures also provide meaningful information for investors and securities analysts to evaluate our historical and prospective financial performance. These non-GAAP measures should not be considered a substitute for or superior to GAAP results. Furthermore, the non-GAAP measures presented by us may not be comparable to similarly titled measures of other companies. HARBOR Custom Development, Inc 2#3Key Executives Decades of Experience Jeff Habersetzer Interim Chief Executive Officer, and Interim President More than ten years of real estate, contract, and corporate governance experience. Licensed Attorney since 2017 Masters of Business Administration HARBOR CUSTOM DEVELOPMENT | INVESTOR DECK Lance Brown Chief Financial Officer 15 years of public company experience significant mergers, acquisitions, and divestitures experience Certified Public Accountant since 2007 Masters of Accountancy 3#4Harbor at a Glance We are a real estate developer and builder that participates in each phase of the land-to-home development cycle Unique business model provides flexibility for the monetization of land at various stages ● ● ● We acquire land We entitle and permit property We develop land with horizontal infrastructure We construct homes, and multi-family apartments We monetize our real estate assets at various stages to capitalize on current market conditions *Headcount presented is as of May 10, 2023 HARBOR CUSTOM DEVELOPMENT | INVESTOR DECK Harbor Custom Development currently employs 26 full-time employees 4#5Committed to Investing in Our Future WE CONTINUED TO BUILD OUR REAL ESTATE ASSETS THROUGH THE FIRST QUARTER 2023, POSITIONING US TO ACHIEVE SUSTAINED FUTURE GROWTH Land Held For Development HARBOR CUSTOM DEVELOPMENT | INVESTOR DECK Construction In Progress Held For Sale Figures are in millions. $20.4 12/31/2020 $122.1 12/31/2021 $205.5 12/31/2022 $217.8 03/31/2023 5#6Unique Business Model Creates Significant Value Proposition Diverse ● Revenue Stream Integration of land-to-home development cycle enables: Multiple exit points to monetize real estate assets • Tailor products to fit a diverse range of buyers in our target markets ● • Ability to sell lot inventory to large nationwide home builders HARBOR CUSTOM DEVELOPMENT | INVESTOR DECK Flexibility of our dynamic model allows us to partner with companies specializing in their local markets: Residential Builders General Contractors Land Developers ● ● Strategic Partnerships ● These partnerships keep our cost structure low while leveraging local market expertise ● ● X.........O Comprehensive research-backed process that targets strong economies in growth markets located within 20- 60-minute commute from urban job corridors ● X...... Specialized Land Acquisition Strategy Greater land availability Lower acquisition cost Faster permitting process Exodus from cities to suburban/rural areas CO 6#7Specialized Land Acquisition Strategy Our comprehensive research-backed land assessment strategy allows us to mitigate risk by following strong economies in growth markets MACRO RESEARCH AND ASSESSMENT OF U.S. METRO REGIONS Year-over-year population growth and ranks within the top U.S. metro regions for in migration Rated in the top U.S. metro regions for job growth or annual average sales price increase Location and infrastructure allow for major shipping and rail transportation hubs Diversified economy not reliant on one major employer Within top U.S. metro regions for average household family income MICRO RESEARCH AND ASSESSMENT OF METRO AREA SUB-MARKETS PRE-LAND ACQUISITION Commutable to the core job market (20-to-60-minute average commute) Area year-over-year housing price and rental market appreciation Location provides for easy access to freeways or other major commuter routes Provides natural amenity that differentiates the property from others views or unique access points High-ranked school system (elementary - high school) High concentration of government employment (state capital and/or local, state offices, or substantial U.S. military presence) HARBOR CUSTOM DEVELOPMENT | INVESTOR DECK www you us 2020 7#8Market Updates Low Supply/Inventory Available In Primary Markets Supply of resale and new home inventory remains low despite elevated resale listings driving YOY increases across our four primary markets ● ● ● Low Unemployment Rates/Income Growth Across All MSA Our primary markets have 0.9 to 2.8 months of supply on hand (balanced market is considered to have 4-5 months of supply) ● ● ● Market Headwinds Unemployment ranges from 2.5% - 4.3% across primary markets High income job growth increased 1% and 6% YOY in Seattle and Austin, respectively Rising mortgage rates and price appreciation causing affordability challenges Increased capitalization rates put downward pressure on multifamily sales realizations *Four primary markets include Seattle, Sacramento, Austin, and Tampa. *All data sourced from John Burns Regional Analysis and Forecast Published April 19, 2023. HARBOR CUSTOM DEVELOPMENT | INVESTOR DECK 8#9Washington Portfolio: Owned, Controlled, & Current Projects TOTAL LOTS REMAINING /UNITS LOTS/UNITS 143 145 76 36 138 177 80 228 992 63 225 72 145 76 36 138 177 80 228 992 63 225 COMMUNITY Horizon at Semiahmoo Fircrest Ridge Wyndstone Mills Crossing Bridge View Trail Meadowscape Pacific Ridge Belfair View Grandis Pond Inverness Stanwood STATUS Own Control Own Own Own Own Own Own Control Own Control BUSINESS PLAN HARBOR CUSTOM DEVELOPMENT | INVESTOR DECK Develop + Sell Lots Develop + Sell Apartments Build + Sell Apartments Build + Sell Townhomes Develop + Sell Land or Build + Sell Apartments Build + Sell Apartments Build + Sell Apartments Build + Sell Apartments Develop + Sell Lots Develop + Sell Lots / Build + Sell Apartments Build + Sell Apartments + Townhomes *Some of these projects are under contract, but not yet closed. There can be no assurance that we will ultimately purchase these properties after completing our internal due diligence process. *Data presented in this table is as of July 11, 2023 PHASE Phase 2: Preliminary Plat Due Diligence Complete + Now Leasing SOLD Land Develop Complete Under Construction Complete + Now Leasing Under Construction + Now Leasing Phase One Due Diligence Preliminary Plat Due Diligence 000 1:18:28 888 888 9#10California Portfolio: Owned, Controlled, & Current Projects TOTAL LOTS REMAINING /UNITS LOTS/UNITS 68 22 57 10 COMMUNITY Darkhorse Winding Lane STATUS Own Own BUSINESS PLAN HARBOR CUSTOM DEVELOPMENT | INVESTOR DECK Sell Lots Sell Lots PHASE Now Selling Now Selling *Some of these projects are under contract, but not yet closed. There can be no assurance that we will ultimately purchase these properties after completing our internal due diligence process. *Data presented in this table is as of July 11, 2023 10#11Florida Portfolio: Owned, Controlled, & Current Projects TOTAL LOTS REMAINING /UNITS LOTS/UNITS 180 180 COMMUNITY Punta Gorda STATUS Own BUSINESS PLAN HARBOR CUSTOM DEVELOPMENT | INVESTOR DECK Sell Entitled Land PHASE Now Selling *Some of these projects are under contract, but not yet closed. There can be no assurance that we will ultimately purchase these properties after completing our internal due diligence process. *Data presented in this table is as of July 11, 2023 lan AN-71-4 102 MUN She Se 11#12Texas Portfolio: Owned, Controlled, & Current Projects TOTAL LOTS REMAINING /UNITS LOTS/UNITS 2 2 1 1 35 31 108 68 5 10 73 68 6 COMMUNITY Creeks Edge Flintrock Falls Siena Creek Summit Rock Stone House Cimarron Hills Trails of Horseshoe Bay STATUS Own Own Own Own Own Own Own BUSINESS PLAN HARBOR CUSTOM DEVELOPMENT | INVESTOR DECK Build + Sell Homes Build + Sell Homes Sell Lots / Build + Sell Homes Sell Lots / Build + Sell Homes Develop + Sell Lots / Build + Sell Homes Build + Sell Homes Sell Lots / Build + Sell Homes PHASE Now Selling Lots Under Construction Now Selling Homes + Lots Now Selling Lots + Under Construction Homes Preliminary Plat *Some of these projects are under contract, but not yet closed. There can be no assurance that we will ultimately purchase these properties after completing our internal due diligence process. *Data presented in this table is as of July 11, 2023 Under Construction Now Selling Lots 12#13DISCOVER HARBOR ONLINE Siena FELLE SUMMIT ROCK SUMMIT ROCK BLVD Darkhorse Golf Course Auburn, CA Pleasant Ridge Union Elementary School District BY HARBOR CUSTOM DEVELOPMENT VISIT COMMUNITY Siena Creek Horseshoe Bay, TX Marble Falls ISD VISIT COMMUNITY Summit Rock Horseshoe Bay, TX Price Range: $800,000 $2,000,000 VISIT COMMUNITY Horizon by Harbor Custom HORIZON Development Blaine, WA Price Range: $700,000 $900,000 VISIT COMMUNITY EXPLORE OUR DIVERSE PORTFOLIO HARBOR CUSTOM DEVELOPMENT | INVESTOR DECK WI NA P Pacific Ridge Apartments Tacoma, WA Franklin Pierce School District VISIT COMMUNITY Belfair View Apartments Belfair, WA North Mason School District VISIT COMMUNITY Mills Crossing Townhomes Bremerton, WA Bremerton School District VISIT COMMUNITY Meadowscape Apartments Olympia, WA North Thurston Public School District VISIT COMMUNITY EXPLORE OUR MULTI-FAMILY PORTFOLIO 808 160 D I 13#14Now Renting MULTI-FAMILY COMMUNITIES NOW RENTING Community Mills Crossing Pacific Ridge Belfair View Phase 1 Wyndstone Location Bremerton, WA Tacoma, WA Belfair, WA Yelm, WA *Units Rented figures are as of July 10, 2023. Total Units 36 80 126 76 Period Rent Up Began Aug 2022 Nov 2022 Nov 2022 Jan 2023 Units Rented SOLD 60 53 61 Percent Rented 75% 42% 80% Average Unit Rent $1,787 $1,837 $1,978 Dis 111000 M NOW2221 W LEASING 0000 14#15Managing Revenue Through The Cycle $4.3 FY'19 THREE MONTHS ENDED MARCH 31 اس $9.9 FY'20 The chart figures are in millions. $13.9 $28.6 FY'21 FY¹22 HARBOR CUSTOM DEVELOPMENT | INVESTOR DECK $9.2 FY'23 We flexed our approach ● ● In 2021, we increased our focus on high demand multi-family products which have longer build cycles ranging from 18 - 24 months Construction is completed at Mills Crossing, Pacific Ridge and Wyndstone and continues to progress at Meadowscape and Belfair Rent up continued to progress at Pacific Ridge, Wyndstone, and Belfair Mills Crossing $14.3 million PSA executed and is anticipated to close in the second quarter Progressing on our plan to reduce our exposure to the California market and sold eleven lots in Q1 2023 Executing our plan to build homes and sell lots in the Texas market PAL G 15#16Q1 2023 Financial Overview $9.2M Revenue (¹) $(4.9)M Net Loss (1) $(2.0)M Gross Profit(1) HARBOR CUSTOM DEVELOPMENT | INVESTOR DECK $(4.5)M EBITDA (¹) (1) The table figures are in millions. The figures reflect year-to-date data as of March 31, 2023 (22.3)% Gross Margin(1) $(4.4)M Adjusted EBITDA(1) 16#17Balance Sheet & Liquidity Position BALANCE SHEET REMAINS STABLE AND PROVIDES PLATFORM FOR FUTURE GROWTH OPPORTUNITIES Cash and Cash Equivalents Total Debt CAPITALIZATION SUMMARY Stockholders' Equity Net Debt / Total Capital Ratio ● ● HIGHLIGHTS Ended Q1 2023 with $7.7 million liquidity Real estate leverage ratio at 60.0% Book value at $68.9 million $8.3 $153.9 $68.9 67.9% The table figures are in millions. Figures as of March 31, 2023 LIQUIDITY Unrestricted Cash and Cash Equivalents Revolver Availability Liquidity HARBOR CUSTOM DEVELOPMENT | INVESTOR DECK $7.7 $0.0 $7.7 REAL ESTATE LEVERAGE RATIO Construction and Related Party Construction Loans Real Estate Assets Real Estate Leverage Ratio $130.7 $217.8 60.0% 17#18Primary Sources & Uses of Capital BALANCED APPROACH TO CAPITAL ALLOCATION: ● ● ● ● Fund working capital needs Invest in real estate assets Debt reduction & financing fees Pay preferred dividends *Table figures are in millions. Figures as of March 31, 2023 HARBOR CUSTOM DEVELOPMENT | INVESTOR DECK CAPITAL SOURCES Construction Loans Operations Less Real Estate Assets Equipment Sales Proceeds CAPITAL USED Real Estate Assets net of Cost of Sales Debt Paydown & Financing Fees Preferred Dividends Net Decrease in Cash $17.9 $1.5 $0.1 $13.2 $7.7 $0.6 ($2.0) Q1 2023 HIGHLIGHTS: Continued net investment of $13.2 million into our real estate assets Paid down debt and financing fees of $7.7 million 18#19Common Stock Outstanding Series A Preferred Stock(1) Warrants Preferred (¹) Warrants Common(2) Options Unvested Restricted Stock(3) Total Capitalization Table As of March 31, 2023(4) HARBOR CUSTOM DEVELOPMENT | INVESTOR DECK OUTSTANDING CONVERSION RATE FULLY DILUTED 732,245 3,799,799 12,000 18,389,231 20,488 22,953,763 0.2778 0.2778 0.0500 732,245 1,055,584 3,334 922,378 36,871 11,520 2,761,932 WEIGHTED AVERAGE EXERCISE PRICE $24.97 $3.47 $55.94 (1) Based on a conversion rate of 0.2778 shares of Common Stock for one share of Series A Preferred Stock in effect as of the date of this presentation. (2) Pursuant to the reverse stock split, each warrant is exercisable into 0.0500 shares of common shares (subject to adjustment) at any time at the option of the holder. (3) The weighted average grant date fair value of unvested restricted stock was $38.19. (4) The above numbers have been adjusted to reflect the 1-for-20 reverse stock split, which occurred on March 6, 2023. 19#20Recent Developments 1. Harbor Custom Development, Inc., Secures $19,950,000 Loan with Sound Capital to Refinance Belfair View Apartment Project - 7/6/23 2. Harbor Custom Development, Inc., Announces Changes in Executive Leadership - 6/26/23 3. Harbor Custom Development, Inc., Closes Mills Crossing Townhomes Sale in Bremerton, WA for $14,250,000 - 6/20/23 4. Harbor Custom Development, Inc., Announces Updates on Multi-family Projects in Washington - 5/25/23 5. Harbor Custom Development, Inc., Announces Closing of $10 Million Public Offering - 5/18/23 6. Harbor Custom Development, Inc., Announces Pricing of $10 Million Public Offering - 5/16/23 7. Harbor Custom Development, Inc., Reports 2023 First Quarter Financial Results - 5/15/23 8. Harbor Custom Development, Inc., Announces Executive Team Transition - 5/11/23 9. Harbor Custom Development, Inc., Announces Buyer Waives All Contingencies on $14,250,000 Sales of Townhomes - 5/10/23 10. Harbor Custom Development, Inc., Contracts to Sell Bridgeview Trail Apartment Site in Port Orchard for $11,000,000 - 4/28/23 11. Harbor Custom Development, Inc., Announces Regaining Nasdaq Compliance - 3/21/23 12. Harbor Custom Development, Inc., Provides Update on Grandis Pond a 992 Unit Master Planned Community in Blaine, WA - 3/9/23 13. Harbor Custom Development, Inc., Downsizes Land Development Infrastructure Division, Reducing Head Count by 56% - 3/6/23 14. Harbor Custom Development, Inc., Announces a 1-for-20 Reverse Stock Split of Outstanding Shares of Common Stock - 3/3/23 15. Harbor Custom Development, Inc., Continues Texas Expansion in Horseshoe Bay with Wurzel Builders, LTD - 3/1/23 16. Harbor Custom Development, Inc., Successfully Restructured Its Loan with Bank United - 2/24/23 HARBOR CUSTOM DEVELOPMENT | INVESTOR DECK 20#21HARBOR CUSTOM DEVELOPMENT | INVESTOR DECK Appendix 21#22Condensed Consolidated Balance Sheets HARBOR CUSTOM DEVELOPMENT | INVESTOR DECK ASSETS Cash Restricted Cash Accounts Receivable, net Notes Receivable, net Prepaid Expense and Other Assets Real Estate Property and Equipment, net Right of Use Assets Deferred Tax Asset TOTAL ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Accounts Payable and Accrued Expenses Dividends Payable Contract Liabilities Deferred Revenue Note Payable - Insurance Revolving Line of Credit Loan, net of Unamortized Debt Discount of $0 and $0.6 million respectively Equipment Loans Finance Leases Construction Loans, net of Unamortized Debt Discount of $1.4 million and $1.9 million, respectively Construction Loans - Related Party, net of Unamortized Debt Discount of $0.1 million and $0.1 million, respectively Right of Use Liabilities TOTAL LIABILITIES STOCKHOLDERS' EQUITY Preferred Stock, no par value per share, 10,000,000 shares authorized and 3,799,799 issued and outstanding at March 31, 2023 and December 31, 2022 Common Stock, no par value per share, 50,000,000 shares authorized and 732,245 issued and outstanding at March 31, 2023 and 718,835 issued and outstanding at December 31, 2022 Additional Paid In Capital Retained Earnings (Accumulated Deficit) TOTAL STOCKHOLDERS' EQUITY TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ S $ $ March 31, 2023 (unaudited) 7,689,500 597,600 1,239,600 2,390,300 2,451,000 217,835,900 1,950,100 1,878,000 5,936,800 241,968,800 13,781,400 1,903,700 672,200 150,300 237,700 22,893,500 1,300 122,608,300 8,127,300 2,719,300 173,095,000 62,912,100 35,704,700 1,349,700 (31,092,700) 68,873,800 241,968,800 $ $ $ December 31, 2022 9,665,300 597,600 1,707,000 4,525,300 5,318,100 205,478,200 2,289,500 1,926,100 4,659,300 236,166,400 14,090,700 634,700 497,400 52,000 378,500 24,359,700 2,057,100 154,500 107,483,700 8,122,800 2,779,400 160,610,500 62,912,100 35,704,700 1,266,300 (24,327,200 75,555,900 236,166,400 22#23Condensed Consolidated Statements of Operations (Unaudited) HARBOR CUSTOM DEVELOPMENT | INVESTOR DECK Sales Cost of Sales Gross Profit (Loss) Operating Expenses Operating Income (Loss) Other Income (Expense) Interest Expense Interest Income Loss on Sale of Equipment Other Income Total Other Expense Income (Loss) Before Income Tax Income Tax Expense (Benefit) Net Income (Loss) Net Loss Attributable to Non-controlling interests Preferred Dividends Net Loss Attributable to Common Stockholders Loss Per Share - Basic Loss Per Share - Diluted Weighted Average Common Shares Outstanding - Basic Weighted Average Common Shares Outstanding - Diluted $ $ $ $ $ For the Three Months Ended March 31, 2023 9,181,000 $ 11,225,400 (2,044,400) 2,935,400 (4,979,800) (1,207,100) 72,900 (36,200) 10,900 (1,159,500) (6,139,300) (1,277,500) (4,861,800) $ (1,903,700) (6,765,500) $ (9.39) $ (9.39) $ 720,618 720,618 2022 28,581,000 22,526,300 6,054,700 3,839,300 2,215,400 (124,500) 55,000 7,900 (61,600) 2,153,800 508,500 1,645,300 (500) (2,012,500) (366,700) (0.56) (0.56) 660,038 660,038 23#24Condensed Consolidated Statements of Cash Flows (Unaudited) HARBOR CUSTOM DEVELOPMENT | INVESTOR DECK CASH FLOWS FROM OPERATING ACTIVITIES Net Income (Loss) Adjustments to reconcile net income (loss) to net cash from operating activities: Depreciation Amortization of right of use assets Lease incentives Loss on sale of equipment Provision for loss on contract Impairment loss on real estate Stock compensation Amortization of revolver issuance costs Net change in assets and liabilities: Accounts receivable Contract assets Notes receivable Prepaid expenses and other assets Real estate Deferred tax asset Accounts payable and accrued expenses Contract liabilities Deferred revenue Payments on right of use liability, net of incentives NET CASH USED IN OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment Proceeds on the sale of equipment NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Construction loans Payments on construction loans Financing fees construction loans Related party construction loans Payments on related party construction loans Financing fees related party construction loans Revolving line of credit loan Payments on revolving line of credit loan Financing fees revolving line of credit loan Payments on note payable insurance Payments on equipment loans Payments on financing leases Preferred dividends Proceeds from exercise of stock options NET CASH PROVIDED BY FINANCING ACTIVITIES NET DECREASE IN CASH AND RESTRICTED CASH CASH AND RESTRICTED CASH AT BEGINNING OF PERIOD CASH AND RESTRICTED CASH AT END OF PERIOD $ $ Three Months Ended March 31, 2023 (4,861,800) 95,000 48,100 36,200 23,800 1,555,800 83,400 640,300 467,300 2,135,000 2,689,800 (13,149,200) (1,277,500) (309,500) 151,000 98,300 (60,100) (11,634,100) 128,500 128,500 17,866,800 (3,002,300) (224,800) (75,000) (2,106,500) (163,000) (2,055,900) (74,800) (634,700) 9,529,800 (1,975,800) 10,262,900 8,287,100 $ $ 2022 1,645,300 303,800 195,500 260,100 242,400 45,700 (63,700) (471,900) (10,746,800) 691,500 (6,347,500) (365,100) 5,254,600 78,200 (123.200) (9.401.100) (1,042,600) (1,042,600) 6,640,800 (6,930,800) (577,500) 3,757,300 (3,838,700) 12,038,900 (1,097,700) (384,500) (471,000) (43,500) (2,012,500) 8,600 7,089,400 (3,354,300) 26,226,800 22,872,500 24#25HARBOR CUSTOM DEVELOPMENT, INC. AND SUBSIDIARIES D/B/A HARBOR CUSTOM HOMES RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA (Unaudited) Net Income (Loss) Interest Expense - Cost of Sales Interest Expense - Other Depreciation Amortization Tax Expense (Benefit) EBITDA Stock compensation Other non-recurring costs Total Add backs Adjusted EBITDA $ HARBOR CUSTOM DEVELOPMENT | INVESTOR DECK For the Three Months Ended March 31, 2023 (4,861,800) $ 310,700 1,207,100 95,000 2,400 (1,277,500) (4,524,100) $ 83,400 5,000 88,400 (4,435,700) $ 2022 1,645,3 00 922,700 124,500 303,800 800 508,500 3,505,600 242,400 150,200 392,600 3,898,2 00 1) EBITDA is defined as consolidated net income (loss) before interest, taxes, depreciation, and amortization. 2)Adjusted EBITDA is defined as consolidated net income (loss) before interest, taxes, depreciation, and amortization, equity-based compensation expense and other non-recurring costs, which are deemed to be transitional in nature or not related to our core operations. 3) Adjusted EBITDA margin is Adjusted EBITDA as a percentage of sales. 25#26E HARBOR Custom Development, Inc OFFICES + IR CONTACT Harbor Custom Development, Inc. 1201 Pacific Avenue, Suite 1200 Tacoma, WA 98402 (866) 744-0974 [email protected] harborcustomdev.com NASDAQ:HCDI; HCDIP; HCDIW; HCDIZ