The following is management's discussion and analysis of financial condition and
results of operations and is provided as a supplement to the accompanying
unaudited financial statements and notes to help provide an understanding of our
financial condition, results of operations and cash flows during the periods
included in the accompanying unaudited financial statements.
In this Quarterly Report on Form 10-Q, "Company," "the Company," "us," and "our"
refer to Hubilu Venture Corporation, a Delaware corporation, unless the context
requires otherwise.
We intend the following discussion to assist in the understanding of our
financial position and our results of operations for the three and six months
ended June 30, 2020 and 2019, respectively. You should refer to the Financial
Statements and related Notes in conjunction with this discussion.
Results of Operations
The following discussion of our financial condition and results of operations
should be read in conjunction with our unaudited financial statements for the
three and six months ended June 30, 2020 and 2019, respectively, together with
notes thereto, which are included in this Quarterly Report on Form 10-Q.
Three months ended June 30, 2020 compared to the three months ended June 30,
2019
Revenues. Our revenues increased to $216,171 for the three months ended June 30,
2020 compared to $108,749 for the comparable period in 2019. The increase is due
to the acquisition of 7 new properties.
Operating expenses. In total, operating expenses decreased $36,243 to $101,397
for the three months ended June 30, 2020 compared to $137,640 for the comparable
period in 2019. The decrease is primarily due to the Company paying one less
salary.
General and administrative expenses decreased $1,118 to $12,503 for the three
months ended June 30, 2020 compared to $13,621 for the comparable period in
2019.
Consulting expenses decreased $50,267 to $0 for the three months ended June 30,
2020 compared to $50,267 for the comparable period in 2019.
Depreciation expense increased $10,291 to $22,822 for the three months ended
June 30, 2020 compared to $12,531 for the comparable period in 2019. The
increase is due to acquiring more properties
Professional fees decreased $10,218 to $0 for the three months ended June 30,
2020 compared to $10,218 for the comparable period in 2019. The decrease is
attributable to the timing of the invoices received by the Company's
professional service providers.
Property tax expense increased $12,186 to $17,470 for the three months ended
June 30, 2020 compared to $5,284 for the comparable period in 2019. The increase
is due to paying our taxes earlier in the first quarter.
Repairs and maintenance expense increased $2,852 to $5,487 for the three months
ended June 30, 2020 compared to $2,635 for the comparable period in 2019. The
increase is due to a new acquisition last quarter.
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Promissory Note Interest expense increased $2,707 to $22,437 for the three
months ended June 30, 2020 compared to $19,730 for the comparable period in
2019.
Mortgage Interest increased $46,943 to $83,821 for the three months ended June
30, 2020 compared to $36,878 for the comparable period in 2019. The increase is
due to the acquisition of 7 new properties.
Net loss. Our net loss decreased $90,465 to $6,289 for the three months ended
June 30, 2020 compared to $96,754 for the comparable period in 2019. The
decrease is attributable to the revenue and expenses discussed above.
Six months ended June 30, 2020 compared to the six months ended June 30, 2019
Revenues. Our revenues increased to $372,301 for the six months ended June 30,
2020 compared to $191,499 for the comparable period in 2019. The increase is due
to the acquisition of 7 new properties.
Operating expenses. Operating expenses include general and administrative
expenses, consulting expense, depreciation, professional fees, property taxes,
rent, repairs and maintenance, transfer agent and filing fees, and utilities. In
total, operating expenses decreased $106,174 to $281,777 for the six months
ended June 30, 2020 compared to $387,951 for the comparable period in 2019. The
decrease is due to less consulting services.
General and administrative expenses increased $55,943 to $88,287 for the six
months ended June 30, 2020 compared to $32,344 for the comparable period in
2019.
Consulting expenses decreased $246,867 to $0 for the six months ended June 30,
2020 compared to $246,867 for the comparable period in 2019. The decrease is
attributable to a lesser fair value attributable to common shares issued to
consultants during the six months ended June 30, 2019 compared to the same
period in the prior fiscal year.
Depreciation expense increased $22,626 to $45,671 for the six months ended June
30, 2020 compared to $23,045 for the comparable period in 2019.
Professional fees decreased $15,669 to $624 for the six months ended June 30,
2020 compared to $16,293 for the comparable period in 2019.
Property tax expense increased $21,855 to $31,962 for the six months ended June
30, 2020 compared to $10,107 for the comparable period in 2019. The increase is
due to paying our taxes earlier in the first quarter.
Rent expense decreased $6,750 to $7,350 for the six months ended June 30, 2020
compared to $14,100 for the comparable period in 2019. The decrease is due to
downsizing our office space.
Repairs and maintenance expense increased $9,311 to $13,973 for the six months
ended June 30, 2020 compared to $4,662 for the comparable period in 2019. The
increase is due to a new acquisition last quarter.
Transfer Agent and Filing Fees increased $421 to $1,101 for the six months ended
June 30, 2020 compared to $680 for the comparable period in 2019. The increase
is due to additional monthly fees paid.
Utilities expense increased $12,879 to $20,532 for the six months ended June 30,
2020 compared to $7,653 for the comparable period in 2019. The increase is due
to additional property acquisitions.
Promissory Note Interest expense increased $37,173 to $60,868 for the six months
ended June 30, 2020 compared to $23,695 for the comparable period in 2019.
Mortgage Interest increased $63,579 to $139,744 for the six months ended June
30, 2020 compared to $76,165 for the comparable period in 2019. The increase is
due to the acquisition of 7 new properties.
Net loss. Our net loss decreased $184,455 to $129,367 for the six months ended
June 30, 2020 compared to $313,822 for the comparable period in 2019. The
decrease is attributable to the revenue and expenses discussed above.
Liquidity and Capital Resources. For the six months ended June 30, 2020, we did
not borrow any money from our majority shareholder. We intend to seek additional
financing for our working capital, in the form of equity or debt, to provide us
with the necessary capital to accomplish our plan of operation. There can be no
assurance that we will be successful in our efforts to raise additional capital.
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Our total assets are $8,111,370 as of June 30, 2020, consisting of $8,056,093 in
net property assets, $48,677 in cash and $6,600 in deposits.
Our total liabilities are $8,979,847 as of June 30, 2020.
We used $24,308 in operating activities for the six months ended June 30, 2020
including $129,367 in net loss which was offset by non-cash charges of $45,671
and depreciation, $12,442 in dividends accrued in preferred shares, a net
increase of $4,845 in accounts payable, imputed interest of $17,327 and $61,529
received for security deposits.
We used $180,065 in investing activities for the six months ended June 30, 2020,
which was used for building additions and improvements.
We had $58,841 provided by financing activities for the six months ended June
30, 2020.
The Company had no formal long-term lines or credit or other bank financing
arrangements as of June 30, 2020.
The Company has no current plans for the purchase or sale of any plant or
equipment.
The Company has no current plans to make any changes in the number of employees.
Impact of Inflation
The Company believes that inflation has had a negligible effect on operations
over the past quarter.
Capital Expenditures
The Company spent $180,065 on building improvements during the six months ended
June 30, 2020.
IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS
For information on the impact of recent accounting pronouncements on our
business, see note 3 of the Notes to the Consolidated Financial Statements.
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