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, 2021 and 2020, 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, 2021 and 2020, respectively, together with
notes thereto, which are included in this Quarterly Report on Form 10-Q.
Three months ended June 30, 2021 compared to the three months ended June 30,
2020
Revenues. Our revenues increased $171,783 to $387,954 for the three months ended
June 30, 2021 compared to $216,171 for the comparable period in 2020. The
increase is due to the acquisition of four new properties.
Operating expenses. In total, operating expenses increased $140,226 to $241,623
for the three months ended June 30, 2021 compared to $101,397 for the comparable
period in 2020.
General and administrative expenses increased $94,636 to $107,139 for the three
months ended June 30, 2021 compared to $12,503 for the comparable period in
2020.
Depreciation expense increased $15,978 to $38,800 for the three months ended
June 30, 2021 compared to $22,822 for the comparable period in 2020.
Rent expense increased $3,900 to $3,900 for the three months ended June 30, 2021
compared to $0 for the comparable period in 2020. The increase is due to not
paying rent in the months of April, May and June and instead used our security
deposit.
Property tax expense increased $23,681 to $41,151 for the three months ended
June 30, 2021 compared to $17,470 for the comparable period in 2020. The
increase is due to the acquisition of four new properties.
Repairs and maintenance expense decreased $4,998 to $489 for the three months
ended June 30, 2021 compared to $5,487 for the comparable period in 2020. The
decrease is due to the properties being in good condition and require less
maintenance.
Taxes and licenses expense increased $5,162 to $5,162 for the three months ended
June 30, 2021 compared to $0 for the comparable period in 2020. The increase is
due timing of filing dates.
Wages and benefits expense decreased $6,499 to $26,250 for the three months
ended June 30, 2021 compared to $32,749 for the comparable period in 2020. The
decrease is due to additional money being paid to assist employees during Covid
shutdown. Salaries and wages are back to normal.
Transfer agent and filing fees expense decreased $300 to $0 for the three
months ended June 30, 2021 compared to $300 for the comparable period in 2020.
The decrease is due to less filings during this period.
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Promissory Note Interest expense decreased $22,437 to $0 for the three months
ended June 30, 2021 compared to $22,437 for the comparable period in 2020.
Mortgage Interest increased $71,526 to $155,347 for the three months ended June
30, 2021 compared to $83,821, for the comparable period in 2020. The increase is
due to the acquisition of four new properties.
Net loss. Our net loss increased $12,727 to $19,016 for the three months ended
June 30, 2021 compared to $6,289 for the comparable period in 2020. The increase
is attributable to the revenue and expenses discussed above.
Six months ended June 30, 2021 compared to the six months ended June 30, 2020
Revenues. Our revenues increased to $704,683 for the six months ended June 30,
2020 compared to $372,301 for the comparable period in 2020. The increase is due
to the acquisition of four 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 increased $90,030 to $371,807 for the six months ended
June 30, 2021 compared to $281,777 for the comparable period in 2020. The
increase is due to the acquisition of four new properties.
General and administrative expenses increased $73,755 to $162,042 for the six
months ended June 30, 2021 compared to $88,287 for the comparable period in
2019.
Depreciation expense increased $5,168 to $50,839 for the six months ended June
30, 2021 compared to $45,671 for the comparable period in 2020.
Professional fees decreased $388 to $236 for the six months ended June 30, 2021
compared to $624 for the comparable period in 2020.
Property tax expense increased $25,588 to $57,550 for the six months ended June
30, 2021 compared to $31,962 for the comparable period in 2020. The increase is
due to paying our taxes earlier in the first quarter.
Rent expense increased $450 to $7,800 for the six months ended June 30, 2021
compared to $7,350 for the comparable period in 2020 The increase is due to
downsizing our office space.
Repairs and maintenance expense decreased $11,974 to $1,999 for the six months
ended June 30, 2021 compared to $13,973 for the comparable period in 2020. The
decrease is due to the properties being in good condition and require less
maintenance.
Transfer Agent and Filing Fees decreased $1,101 to $0 for the six months ended
June 30, 2021 compared to $1,101 for the comparable period in 2020. The decrease
is due to additional monthly fees paid.
Utilities expense increased $12,311 to $32,843 for the six months ended June 30,
2021 compared to $20,532 for the comparable period in 2020. The increase is due
to additional property acquisitions.
Promissory Note Interest expense decreased $62,909 to $0 for the six months
ended June 30, 2021 compared to $62,909 for the comparable period in 2020.
Mortgage Interest increased $151,004 to $288,707 for the six months ended June
30, 2021 compared to $139,703 for the comparable period in 2020. The increase is
due to the acquisition of four new properties.
Net loss. Our net loss decreased $161,315 to income $31,948 for the six months
ended June 30, 2021 compared to a loss of $129,367 for the comparable period in
2020. The decrease is attributable to the revenue and expenses discussed above.
Liquidity and Capital Resources. For the six months ended June 30, 2021, 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.
Our total assets are $10,950,016 as of June 30, 2021, consisting of $10,869,532
in net property assets, $54,384 in cash, $6,600 in deposits and $19,500 in
prepaid expenses.
Our total liabilities are $11,802,184 as of June 30, 2021.
We were provided $125,059 in operating activities for the six months ended June
30, 2021 including $31,948 in net income, imputed interest and gain, which was
offset by non-cash charges of $50,839 for depreciation and amortization, $16,221
in dividends accrued in preferred shares, a net decrease of $447 in accounts
payable and $11,640 received for security deposits.
We used $207,792 in investing activities for the six months ended June 30, 2021,
which was used for building additions and improvements.
We had $7,547 used in financing activities for the six months ended June 30,
2021.
The Company had no formal long-term lines or credit or other bank financing
arrangements as of June 30, 2021.
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 $207,792 on building improvements during the six months ended
June 30, 2021.
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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