Attached files
| file | filename |
|---|---|
| EX-99.4 - Hubilu Venture Corp | ex99-4.htm |
| EX-99.2 - Hubilu Venture Corp | ex99-2.htm |
| EX-99.1 - Hubilu Venture Corp | ex99-1.htm |
| EX-10.2 - Hubilu Venture Corp | ex10-2.htm |
| EX-10.1 - Hubilu Venture Corp | ex10-1.htm |
| 8-K - Hubilu Venture Corp | form8-k.htm |
Exhibit 99.3
Hubilu Venture Corporation
Pro-Forma Consolidated Financial Statements
(unaudited)
The following unaudited pro forma consolidated financial statements are based on the historical financial statements of Hubilu Venture Corporation (“Hubilu”) and the historical financial statements of Akebia Investments LLC (“Akebia”) and Zinnia Investments LLC (“Zinnia”) (collectively “the LLCs”) as adjusted to give effect to the April 10, 2017 acquisition of Akebia and Zinnia. The unaudited pro forma consolidated statement of operations for the year ended December 31, 2016 gives effect to the acquisition of the LLCs as if it had occurred on January 1, 2016. The unaudited pro forma consolidated balance sheet as of December 31, 2016 gives effect to the acquisition of the LLCs as if it had occurred on December 31, 2016.
The pro forma consolidated financial statements do not necessarily reflect what the combined company’s financial condition or results of operations would have been had the acquisition occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.
Hubilu Venture Corporation
Pro-Forma Balance Sheet
December 31, 2016
| Hubilu Venture Corp. - Historical | Akebia Investments LLC - Historical | Zinnia Investments LLC - Historical | Pro-forma adjustments | Notes | Pro-forma consolidated balance sheet | |||||||||||||||||
| Investment in Real Estate | 485,227 | 471,661 | 858,112 | (a) | 1,815,000 | |||||||||||||||||
| Cash | 3,453 | 5,791 | 9,374 | 18,618 | ||||||||||||||||||
| Deposit | 6,600 | - | - | 6,600 | ||||||||||||||||||
| Prepaids | 2,498 | - | 2,498 | |||||||||||||||||||
| 12,551 | 491,018 | 481,035 | 858,112 | 1,842,716 | ||||||||||||||||||
| Property indebtedness | - | 608,424 | 506,560 | 1,114,984 | ||||||||||||||||||
| Accounts payable | 25,820 | - | - | 25,820 | ||||||||||||||||||
| Rental deposits | - | 6,590 | 6,750 | 13,340 | ||||||||||||||||||
| Preferred Shares | 10,400 | - | - | 450,000 | (b) | 460,400 | ||||||||||||||||
| Due to related party | 154,000 | - | - | 154,000 | ||||||||||||||||||
| Deferred taxes | 264,520 | (c) | 264,520 | |||||||||||||||||||
| Note payable - Akebia members | 100,777 | (d) | 100,777 | |||||||||||||||||||
| Note payable - Zinnia members | 151,064 | (d) | 151,064 | |||||||||||||||||||
| Members’ Equity | (123,996 | ) | (32,275 | ) | 156,271 | - | ||||||||||||||||
| Common shares | 25,527 | 25,527 | ||||||||||||||||||||
| Preferred shares | - | - | ||||||||||||||||||||
| APIC | 102,123 | 102,123 | ||||||||||||||||||||
| Deficit | (305,319 | ) | (264,520 | ) | (c) | (569,839 | ) | |||||||||||||||
| - | - | |||||||||||||||||||||
| 12,551 | 491,018 | 481,035 | 858,112 | 1,842,716 | ||||||||||||||||||
Hubilu Venture Corporation
Pro-Forma Consolidated Statement of Operations
For the year ended December 31, 2016
| Hubilu Venture Corp. - Historical | Akebia Investments LLC - Historical | Zinnia Investments LLC - Historical | Pro-forma adjustments | Notes | Pro-forma consolidated Statement of Operations | ||||||||||||||||
| Revenue | $ | 1,800 | $ | 72,602 | $ | 81,116 | $ | 155,518 | |||||||||||||
| Operating expenses | |||||||||||||||||||||
| General and admin | 151,847 | 7,455 | 9,844 | 169,146 | |||||||||||||||||
| Depreciation | - | 19,091 | 18,618 | 28,291 | (e) | 66,000 | |||||||||||||||
| Insurance | - | 1,792 | 1,145 | 2,937 | |||||||||||||||||
| Property taxes | - | 9,167 | 7,533 | 16,700 | |||||||||||||||||
| Repairs and maintenance | - | 11,240 | 5,245 | 16,485 | |||||||||||||||||
| Utilities | - | 12,261 | 3,717 | 15,978 | |||||||||||||||||
| Professional fees | 62,517 | - | - | 62,517 | |||||||||||||||||
| 214,364 | 61,006 | 46,102 | 349,763 | ||||||||||||||||||
| Net loss before other items | (212,564 | ) | 11,596 | 35,014 | (194,245 | ) | |||||||||||||||
| Other Items | |||||||||||||||||||||
| Finance fee | - | (11,115 | ) | (11,115 | ) | ||||||||||||||||
| Mortgage interest | - | (17,725 | ) | (25,520 | ) | (43,245 | ) | ||||||||||||||
| - | (28,840 | ) | (25,520 | ) | (54,360 | ) | |||||||||||||||
| Net income (loss) before taxes | (212,564 | ) | (17,244 | ) | 9,494 | (248,605 | ) | ||||||||||||||
| Income taxes | |||||||||||||||||||||
| Current | - | - | - | - | |||||||||||||||||
| Deferred | - | - | - | (264,520 | ) | (c) | (264,520 | ) | |||||||||||||
| - | - | - | (264,520 | ) | (264,520 | ) | |||||||||||||||
| Net income (loss) for the year | $ | (212,564 | ) | $ | (17,244 | ) | $ | 9,494 | $ | (513,125 | ) | ||||||||||
Hubilu Venture Corporation
Notes to the Unaudited Pro-Forma Consolidated Financial Statements
| Note 1 | The unaudited pro forma consolidated statements are based on Hubilu Venture Corp.’s historical financial statements and the historical financial statements of Akebia Investments LLC (“Akebia”) and Zinnia Investments LLC (“Zinnia”) (collectively “the LLCs”) as adjusted to give effect to the acquisition of Akebia and Zinnia and the Series 1 Convertible Preferred Shares and promissory notes issued necessary to finance the acquisition. The unaudited pro forma consolidated statement of operations for the year ended December 31, 2016 gives effect to the acquisition of Akebia and Zinnia as if it had occurred on January 1, 2016. The unaudited pro forma consolidated balance sheet as of December 31, 2016 gives effect to the acquisition of Akebia and Zinnia as if it had occurred on December 31, 2016. |
| Note 2 | On April 10, 2017, Hubilu acquired Akebia and Zinnia for total consideration of $701,841. The Company financed the acquisition through the issuance of a combination of notes payable and Series A Convertible Preferred Shares. The unaudited pro forma consolidated financial information includes various assumptions, including those related to the preliminary purchase price allocation of the assets acquired and liabilities assumed of Akebia and Zinnia based on management’s best estimates of fair value. The final purchase price allocation may vary based on final appraisals, valuations and analyses of the fair value of the acquired assets and assumed liabilities. Accordingly, the pro forma adjustments are preliminary and have been made solely for illustrative purposes. |
| Akebia | Zinnia | |||||||
| Consideration paid to members of the respective LLCs | $ | 280,777 | $ | 421,064 | ||||
| Real Estate | 890,000 | 925,000 | ||||||
| Cash | 5,791 | 9,374 | ||||||
| Total identifiable assets | 895,791 | 934,374 | ||||||
| Mortgage | (608,424 | ) | (506,560 | ) | ||||
| Rental deposits | (6,590 | ) | (6,750 | ) | ||||
| Total liabilities assumed | (615,014 | ) | (513,310 | ) | ||||
| 280,777 | 421,064 | |||||||
| $ | - | $ | - | |||||
| Consideration paid: | ||||||||
| Series A Convertible Preferred Shares | $ | 180,000 | $ | 270,000 | ||||
| Note payable to members of the LLCs | 100,777 | 151,064 | ||||||
| $ | 280,777 | $ | 421,064 | |||||
| Note 3 | The pro forma adjustments are based on preliminary estimates and assumptions that are subject to change. The following adjustments have been reflected in the unaudited pro forma consolidated financial information: |
| Adjustments to the pro-forma consolidated balance sheet |
| (a) | Reflects the preliminary fair value adjustment, based on their appraisals, of the real estate assets acquired from each of the LLCs as follows: |
| Akebia - 3711 S. Western Ave., Los Angeles, California | 890,000 | |||
| Zinnia - 2909 S. Catalina Street, Los Angeles, California | 925,000 | |||
| $ | 1,815,000 |
| (b) | Reflects the issuance of Series A convertible Preferred Shares that were issued as partial consideration for the acquisition of the LLCs as disclosed in Note 2. |
| (c) | Reflects the deferred tax liability arising on the difference between the accounting basis and tax basis of the properties acquired as follows: |
| Properties basis for accounting: | ||||
| Akebia - 3711 S. Western Ave., Los Angeles, California | 890,000 | |||
| Zinnia - 2909 S. Catalina Street, Los Angeles, California | 925,000 | |||
| $ | 1,815,000 | |||
| Properties basis for tax: | ||||
| Akebia - 3711 S. Western Ave., Los Angeles, California | 525,000 | |||
| Zinnia - 2909 S. Catalina Street, Los Angeles, California | 512,000 | |||
| 1,037,000 | ||||
| Basis difference | 778,000 | |||
| Assumed enacted tax rate | 34 | % | ||
| Deferred tax liability - December 31, 2016 | $ | 264,520 | ||
| (d) | Reflects the issuance of Notes payable to the members of the LLCs that were issued as partial consideration for the acquisition of the LLCs as disclosed in Note 2. |
| Adjustment to the pro-forma consolidated Statement of Operations |
| (e) | Reflects the increase in the balance of depreciation to record in accordance with the fair value of the properties acquired as discussed in (a) above. |