UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

☒ quarterly REPORT under SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended: March 31, 2021

 

or

 

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from __________ to __________

 

Commission File No. 000-55611

 

Hubilu Venture Corporation

(Exact Name of Registrant as Specified in its Charter)

 

Delaware		47-3342387
(State or other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

 

205 South Beverly Drive, Suite 205
Beverly Hills, CA		90212
(Address of Principal Executive Offices)		(Zip Code)

 

Registrant’s telephone number, including area code: (310) 308-7887

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§230.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

 

Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated file,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☐ (Do not check if a smaller reporting company)	Smaller reporting company ☒

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

Yes ☐ No ☒

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
N/A		HBUV		OTC Pink

 

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section l2, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

 

Yes ☐ No ☐

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of September 15, 2021 the number of shares outstanding of the issuer’s sole class of common stock, $0.001 par value per share, is 26,237,125.

 

 

 

table of contents

 

PART I – FINANCIAL INFORMATION	3
Item 1. Financial Statements	3
Consolidated Balance Sheets	3
Consolidated Statements of Operations	4
Consolidated Statement of Stockholders’ Deficit	5
Consolidated Statement of Cash Flows	6
Notes to the Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations	13
Item 3. Quantitative and Qualitative Disclosures about Market Risk	15
Item 4. Controls and Procedures	15
PART II — OTHER INFORMATION	15
Item 1. Legal Proceedings	15
Item 1A. Risk Factors	15
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3. Defaults Upon Senior Securities	15
Item 4. Mine Safety Disclosures	15
Item 5. Other Information	15
Item 6. Exhibits	16
SIGNATURES	17

 

 

Part I – FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

HUBILU VENTURE CORPORATION

Consolidated Balance Sheets

 

		March 31, 2021				December 31, 2020
		(unaudited)
ASSETS
Real Estate, at cost
Land		$	7,215,079			$	6,772,379
Building and capital improvements			3,085,965				2,813,564
			10,301,044				9,585,943
Accumulated Depreciation			(250,422	)			(238,383	)
			10,050,622				9,347,560
Cash			107,594				144,664
Funds held in escrow			-				18,030
Mortgage suspense account			129				-
Deposits			6,600				6,600
Prepaid expenses			-				3,865
TOTAL ASSETS		$	10,164,945			$	9,520,719
LIABILITIES AND STOCKHOLDERS’ DEFICIT
LIABILITIES
Property indebtedness, related party		$	9,395,345			$	9,006,922
Accounts payable			5,768				8,182
Security deposits			150,874				145,374
Promissory notes payable- related party			182,056				182,056
Loan payable, EDIL			-				-
Loans payable, investor			205,512				182,056
Preferred shares			592,485				586,264
Due to related party			474,271				492,500
TOTAL LIABILITIES			11,006,311				10,421,298
STOCKHOLDERS’ DEFICIT
26,237,125 issued and outstanding on March 31, 2021 (December 31, 2020: 26,237,125)			26,237				26,237
Additional paid-in capital, common stock			750,742				742,556
Accumulated Deficit			(1,618,345	)			(1,669,372	)
TOTAL SHAREHOLDERS’ DEFICIT			(841,366	)			(900,579	)
TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIT		$	10,164,945				9,520,719

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

 

HUBILU VENTURE CORPORATION

Consolidated Statements of Operations

(unaudited)

 

		Three months ended March 31, 2021				Three months ended March 31, 2020
Rental Income		$	316,729			$	156,130
Expenses
General & administrative			54,903				116,737
Depreciation			12,039				22,849
Professional fees			236				-
Property taxes			16,399				14,492
Rent expense			3,900				7,350
Repairs and maintenance			1,510				8,486
Taxes and licenses			836				-
Wages and benefits			26,250
Utilities			14,111				10,466
Total Operating Expenses			130,184				180,380
(Income) before other income (expense)			186,608				(24,250	)
OTHER INCOME (EXPENSE)
Other income			4,000
Consulting income			-				10,400
Dividends accrued for preferred shares			(6,221	)			(6,255	)
Promissory Note interest			-				(49,091	)
Mortgage interest			(133,360	)			(53,882	)
Total Other Income (Expense)			(135,581	)			(98,828	)
Net income (loss) for the period		$	51,027			$	(123,078	)
Basic income (loss) per share		$	0.00			$	(0.00	)
Basic weighted average shares			26,237,125				26,237,125
Diluted income (loss) per share		$	0.00			$	(0.00	)
Diluted average shares outstanding			26,322,193				26,237,125

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 

HUBILU VENTURE CORPORATION

Consolidated Statement of Stockholders’ Deficit

(unaudited)

 

		Common Stock								Additional Paid-In				Accumulated				Stockholders’
		Shares				Amount				Capital				Deficit				Deficit
Balance, December 31, 2019			26,237,125			$	26,238			$	707,987			$	(1,490,572	)		$	(756,347	)
Rounding							(1	)											(1	)
Imputed Interest											34,569				-				34,569
Net loss			-				-				-				(178,800	)			(178,800	)
Balance, December 31, 2020			26,237,125			$	26,237			$	742,556			$	(1,699,372	)		$	(900,579	)
Imputed Interest			-				-				8,186				-				8,186
Net income			-				-				-				51,027				51,027
Balance, March 31, 2021			26,237,125			$	26,237			$	750,742			$	(1,618,345	)		$	(841,366	)

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

HUBILU VENTURE CORPORATION

Consolidated Statements of Cash Flows

(unaudited)

 

		For the three months ended March 31, 2021				For the three months ended March 31, 2020
OPERATING ACTIVITIES
Net income (loss)		$	51,027			$	(123,078	)
Adjustments to reconcile net loss to net cash provided by (used for) operations:
Depreciation and amortization			12,039				22,849
Cumulative preferred stock dividends payable			6,221				6,255
Imputed interest			8,186				8,619
Gain on EDIL			(4,000	)
Changes in operating assets and liabilities:
Prepaid expenses			3,865				8,746
Funds held in escrow and other current assets			17,901				-
Accounts Payable			(2,414	)			(3,597	)
Security deposits			5,500				39,254
Net cash provided (used in) operating activities			98,325				(40,952	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Building improvements			(114,101	)			(92,667	)
CASH USED IN INVESTING ACTIVITIES			(114,101	)			(92,667	)
CASH FLOWS FROM FINANCING ACTIVITIES
Advance from related party			(18,229	)			-
Property indebtedness, net			(3,065	)			32,465
Net cash (provided by) financing activities			(21,294	)			32,465
NET (DECREASE) INCREASE IN CASH			(37,070	)			(101,154	)
Cash, beginning of the period			144,664				148,798
Cash, end of the period		$	107,594			$	47,644
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid		$	124,842			$	102,973
Income taxes paid		$	17,235			$	-
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS
Acquisitions of assets financed through debt		$	601,000			$	535,000

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

 

HUBILU VENTURE CORPORATION

Notes to the Consolidated Financial Statements

March 31, 2020

(unaudited)

 

NOTE 1 – NATURE OF BUSINESS

 

Hubilu Venture Corporation (“the Company”) was incorporated under the laws of the state of Delaware on March 2, 2015 and is a publicly traded real estate consulting, asset management and business acquisition company, which specializes in acquiring student housing income properties and development/business opportunities located near the Los Angeles Metro/subway stations and within the Los Angeles area

 

NOTE 2 – BASIS OF PRESENTATION AND ABILITY TO CONTINUE AS A GOING CONCERN

 

The accompanying consolidated financial statements include the accounts of the Company and each of its wholly owned subsidiaries: Akebia Investments LLC, Zinnia Investments, LLC, Sunza Investments, LLC, Lantana Investments LLC, Elata Investments, LLC, Trilosa Investments, LLC, Kapok Investements, LLC, and Boabab Investments, LLC. All intercompany transactions have been eliminated on consolidation.

 

The financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) on the basis that the Company will continue as a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for the next year. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At March 31, 2021, the Company had not yet achieved profitable operations, had an accumulated deficit of $1,618,345 and expects to incur further losses in the development of its business, all of which casts substantial doubt upon the Company’s ability to continue as a going concern and, therefore, that it may be unable to realize its assets and discharge its liabilities in the normal course of business. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. Management intends to focus on raising additional funds either by way of debt or equity issuances in order to continue operations. The Company cannot provide any assurance or guarantee that it will be able to obtain additional financing or generate revenues sufficient to maintain operations.

 

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Preparation and Summary of Significant Accounting Policies

 

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with Securities and Exchange Commission rules and regulations and generally accepted accounting principles in the United States of America (“US GAAP”) and in the opinion of management contain all adjustments necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

 

 

Fair Value Measurements

 

The fair value hierarchy under GAAP is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

 

Level 1	quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2	observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and
Level 3	assets and liabilities whose significant value drivers are unobservable by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

Recent Accounting Pronouncements

 

In February 2016, the Financial Accounting Standards Board, or FASB, established Topic 842, Leases, by issuing Accounting Standards Update (“ASU”) No. 2016-02, which requires lessors to classify leases as a sales-type, direct financing, or operating lease and requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The Company adopted the new standard effective January 1, 2019 and elected the effective date method for the transition. The Company elected the following practical expedients:

 

	●	Transition method practical expedient – permits the Company to use the effective date as the date of initial application. Upon adoption, the Company did not have a cumulative-effect adjustment to the opening balance of retained earnings. Financial information and disclosures for periods before January 1, 2019 were not updated.
	●	Short-term lease practical expedient – permits the Company not to recognize leases with a term equal to or less than 12 months.

 

Lessor Accounting

 

The accounting for lessors under the new standard remained relatively unchanged with a few targeted updates impacting the Company, which included: (i) narrower definition of initial direct costs that requires certain costs to be expensed rather than capitalized, and (ii) provisions for uncollectible rents to be recorded as a reduction in revenue rather than as bad debt expense.

 

Lessee Accounting

 

The new standard requires lessees to recognize a right-of-use asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases are classified as finance or operating at inception, with classification affecting the pattern and recording of expenses in the statement of operations. There was no impact on the Company’s financial statements on the adoption of Topic 842 given that its office lease does not exceed 12 months in duration.

 

 

NOTE 4 - PROPERTY ACQUISITIONS - Related Party

 

On February 1, 2021 we completed our acquisition, through our subsidiary Trilosa Investments, LLC,, the real property located at 4009 Brighton Avenue in Los Angeles (“Brighton”). The property was vacant at time of purchase. The acquisition was for $601,000 (“Purchase Price”). Terms of the acquisition as follows:

 

(1) A first position note with payment on principal balance of $540,900 issued by the Property Owner, Trilosa, owing to lender, Center Street Lending VIII SPR, LLC, whose terms of payments due are principle and interest, on unpaid principal at the rate of 8.5% per annum. Principal and interest payable in monthly installments of $3,831.38 or more starting on March 1, 2021 and continuing until the January 1, 2022, at which time the entire principal balance together with interest due thereon, shall become due and payable.

 

(2) A $60,100 second position note owing by Trilosa, whose terms of payments due were interest only, payable on unpaid principal at the rate of 6.60% per annum. Interest only payable in monthly installments of $687.50 or more on the 18^th day of each month beginning on the 18^th day of January 2021 and continuing until the 17^th day of December 2026, at which time the entire principal balance together with interest due thereon, shall become due and payable.

 

NOTE 5- INVESTMENTS IN REAL ESTATE- Related party

 

The change in the real estate property investments for the three months ended March 31, 2021 and the year ended December 31, 2020 is as follows:

 

		Three months ended March 31, 2021				Year ended December 31, 2020
Balance, beginning of the period		$	9,585,943			$	7,525,055
Acquisitions:			601,000				1,804,000
			10,186,943				9,329,055
Capital improvements			114,101				256,888
Balance, end of the period		$	10,301,044			$	9,585,943

 

The change in the accumulated depreciation for the three months ended March 31, 2021 and 2020 is as follows:

 

		March 31, 2021				March 31, 2020
Balance, beginning of the period		$	238,383			$	138,357
Depreciation charge for the period			12,039				22,849
Balance, end of the period		$	250,422			$	161,206

 

The Company’s real estate investments as of March 31, 2021 is summarized as follows:

 

		Initial Cost to the Company								Capital				Accumulated								Security
		Land				Building				Improvements				Depreciation				Encumbrances				Deposits
3711 South Western Ave		$	508,571			$	383,716			$	23,988			$	68,757			$	559,775			$	12,524
2909 South Catalina			565,839				344,856				12,831				60,971				600,500				14,400
3910 Wisconsin Ave			337,500				150,000				88,834				17,730				481,586				12,180
3910 Walton Ave			318,098				191,902				2,504				17,137				556,488				11,000
1557 West 29th			496,609				146,891				17,368				11,215				673,500				9,260
1267 West 38th Street			420,210				180,090				7,191				8,613				595,000				7,945
1618 West 38th			508,298				127,074				14,732				4,202				647,130				10,700
4016 Dalton Avenue			424,005				106,001				33,387				4,550				570,182				8,920
1981 West Estrella Avenue			651,659				162,915				68,281				9,383				875,000				17,550
2115 Portland Street			753,840				188,460				-				5,140				926,774				17,085
717 West 42nd Place			376,800				94,200				55,203				2,569				472,135				1,350
3906 Denker Street			428,000				107,000				5,007				6,205				595,891				11,400
3408 S Budlong Street			499,200				124,800				7,418				3,880				695,000				16,560
3912 S. Hill Street			483,750				161,250				103,696				24,504				689,572				-
4009 Brighton Avenue			442,700				158,300				18,070				5,576				662,324				-
		$	7,215,079			$	2,627,455			$	458,510			$	250,422			$	9,600,857			$	150,874

 

 

NOTE 6- PROPERTY INDEBTEDNESS

 

The Company’s mortgages are summarized as follows:

 

										Stated interest
		Principal balance								rate as at
		March 31, 2021				December 31, 2020				March 31, 2020				Maturity date
3711 South Western Ave		$	559,775			$	562,957				3.95	%		August 1, 2021
2909 South Catalina Street
- First Note			459,988				463,103				3.50	%		July 25, 2021
- Second Note			140,512				105,812				3.50	%		July 25, 2021
3910 Walton Ave.			556,488				558,693				5.00	%		August 01, 2049
3910 Wisconsin Street
- First Note			241,586				242,810				4.375	%		October 1, 2036
- Second Note			150,000				150,000				9.00	%		September 27, 2020
- Third Note			90,000				90,000				4.00	%		April 30, 2022
1557 West 29 Street
- First Note			443,500				443,500				6.85	%		November 1, 2025
- Second Note			200,000				200,000				6.85	%		April 30,2022
-General Loan			30,000				-				-			-
1267 West 38 Street
- First Note			415,000				415,000				5.50	%		March 19, 2023
- Second Note			180,000				180,000				6.00	%		March 19, 2023
4016 Dalton Avenue											%
- First Note			415,182				416,249				7.2	%		January 1, 2050
- Second Note			155,000				155,000
1618 West 38 Street											%
- First Note			497,130				498,644				6.30	%		January 1, 2020
- Second Note			150,000				150,000
1981 Estrella Ave
- First Note			610,000				610,000				5.00	%		November 30,2023
- Second Note			265,000				265,000				5.00	%		November 30,2023
717 West 42 Place
- First Note			337,167				337,167				6.85	%		October 31, 2025
- Second Note			134,968				134,968				6.85	%		April 30, 2022
2115 Portland Street
- First Note			606,998				609,046				6.00	%		June 1, 2049
-Second Note			319,776				319,776				5.00	%		April 30, 2024
3906 Denker
-First Note			410,891				412,197				6.00	%		March 1, 2025
-Second Note			185,000				185,000				6.85	%		February 14, 2025
3408 Budlong
-First Note			470,000				470,000				5	%		July 24, 2021
-Second Note			225,000				225,000				5	%		July 22, 2025
3912 S. Hill Street
-First Note			514,572				516,000				6.425	%		December 1, 2050
- Second Note			140,000				140,000				6.425	%		November 1, 2026
-General Loan			35,000				-				-			-
4007 Brighton Avenue
-First Note			537,324				-				8.5	%		January 25, 2022
-Second Note			125,000				147,000				6	%		December 17, 2026
		$	9,600,857			$	9,006,922

 

 

 NOTE 7 – PROMISSORY NOTES PAYABLE

 

March 31, 2021				December 31, 2020
$	182,056			$	182,056

 

As of March 31, 2021, the Company has two promissory notes payable to Esteban Coaloa, outstanding, the total amount owing of $182,056. The first is payable through its wholly owned subsidiary, Akebia Investments, LLC, in the amount of $92,463, bearing an interest rate of 3.95%, maturing on August 1, 2021, and the second with a balance of $89,593 is payable through its wholly owned subsidiary, Zinnia Investments, LLC, bearing an interest rate of 3.50%, maturing on July 25, 2021. The total balance is due on the maturity date of each note.

 

NOTE 8–RELATED PARTY TRANSACTIONS

 

As of March 31, 2021, the Company’s majority shareholder, has provided advances totaling $474,271 (December 31, 2020: $492,500). These advances are unsecured and do not carry a contractual interest rate or repayment terms. In connection with these advances, the Company has recorded an imputed interest charge of $8,186 which was credited to additional paid-in capital for the three months ended March 31, 2021.

 

NOTE 9 – SERIES 1 CONVERTIBLE PREFERRED SHARES

 

On September 8, 2016, the Company authorized and designated 2,000,000 shares of Series 1 convertible preferred stock (the “Preferred Stock”).

 

Effective September 30, 2019, the 5% Voting, Cumulative Convertible Series 1 Preferred Stock date of conversion has been extended to the September 30,2029.

 

The Preferred Stock has the following rights and privileges:

 

Voting – The holders of the Preferred Stock shall be entitled to the number of votes equal to the number of shares of common stock into which such shares of Preferred Stock could be converted.

 

Conversion – Each share of Preferred Stock, is convertible at the option of the holder, into shares of common stock, at the lesser of $0.50 per share or a ten percent (10%) discount to the average closing bid price of the common stock 5 days prior to the notice of conversion. The Preferred Stock is also subject to certain adjustments for dilution, if any, resulting from future stock issuances, including for any subsequent issuance of common stock at a price per share less than that paid by the holders of the Preferred Stock.

 

Dividends – The holders of the Preferred Stock in preference to the holders of common stock, are entitled to receive, if and when declared by the Board of Directors, dividends at the rate of 5% per annum, in kind, which shall accrue quarterly. Such dividends are cumulative. No such dividends have been declared to date.

 

Liquidation – In the event of any liquidation, dissolution, winding-up or sale or merger of the Company, whether voluntarily or involuntarily, each holder of Preferred Stock is entitled to receive, in preference to the holders of common stock, a per-share amount equal to the original issue price of $1.00 (as adjusted, as defined), plus all declared but unpaid dividends.

 

		# of Shares				Amount				Dividend in Arrears				Total
Balance, December 31, 2019			500,400			$	500,400			$	67,167			$	567,567
Dividends accrued			-				-				18,697				18,697
Balance, December 31, 2020			500,400				500,400				85,864				586,264
Dividends accrued											6,221				6,221
Balance, March 31, 2021			500,400			$	500,400			$	92,085			$	592,485

 

NOTE 10 – SUBSEQUENT EVENTS

 

On April 17, 2021 we entered into an agreement, through our subsidiary Zinnia Investments, LLC, to acquire its real property asset located at 3909 Denker Avenue in Los Angeles. We acquired the property on June 17, 2021.

 

In May 2021, we refinanced loans on four of our Hubilu properties, 4016 Dalton, 1557 29^th, 1267 W. 38^th and 1981 Estrella, taking advantage of lower interest rates and lowering the rate on those loans by an average of 1%. Loans were refinanced rate and term only, no cash out. All loans were principal and interest fixed for 30 years , due in 30 years.

 

On May 27, 2021 we entered into an agreement, through our subsidiary Sunza Investments, LLC, to acquire its real property asset located at 4021 Halldale Avenue in Los Angeles. We acquired the property on July 23, 2021.

 

On June 28, 2021, we entered into an agreement, through our subsidiary Zinnia Investments, LLC, to acquire its real property asset located at 1284 W. 38^th Street in Los Angeles. We acquired the property on August 10, 2021.

 

On July 21, 2021, we entered into an agreement, through our subsidiary Lantana Investments, LLC, to acquire its real property asset located at 3777 Ruthelen Street in Los Angeles. We plan to close the property in the 3^rd quarter.

 

 

Forward Looking Statements

 

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2 of Part I of this report include forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995 (collectively, the “Reform Act”). The Reform Act provides a safe harbor for forward-looking statements to encourage companies to provide prospective information about themselves so long as they identify these statements as forward-looking and provide meaningful cautionary statements identifying important factors that could cause actual results to differ from the projected results. All statements, other than statements of historical fact that we make in this Quarterly Report on Form 10-Q are forward-looking. The words “anticipates,” “believes,” “expects,” “intends,” “will continue,” “estimates,” “plans,” “projects,” the negative of these terms and similar expressions are intended to identify forward-looking statements. However, the absence of these words does not mean the statement is not forward-looking.

 

Forward-looking statements involve risks, uncertainties or other factors which may cause actual results to differ materially from the future results, performance or achievements expressed or implied by the forward-looking statements. These statements are based on our management’s beliefs and assumptions, which in turn are based on currently available information. Certain risks, uncertainties or other important factors are detailed in this Quarterly Report on Form 10-Q and may be detailed from time to time in other reports we file with the Securities and Exchange Commission, including on Forms 8-K and 10-K.Examples of forward looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, our expectations regarding our ability to generate operating cash flows and to fund our working capital and capital expenditure requirements. Important assumptions relating to the forward-looking statements include, among others, assumptions regarding demand for our future products, the timing and cost of capital expenditures, competitive conditions and general economic conditions. These assumptions could prove inaccurate. Although we believe that the estimates and projections reflected in the forward-looking statements are reasonable, our expectations may prove to be incorrect. Important factors that could cause actual results to differ materially from the results and events anticipated or implied by such forward-looking statements include:

 

	●	the risks of a start-up company;
	●	management’s plans, objectives and budgets for its future operations and future economic performance;
	●	capital budget and future capital requirements;
	●	meeting future capital needs;
	●	our dependence on management and the need to recruit additional personnel;
	●	limited trading for our common stock, if listed or quoted
	●	the level of future expenditures;
	●	impact of recent accounting pronouncements;
	●	the outcome of regulatory and litigation matters; and
	●	the assumptions described in this report underlying such forward-looking statements. Actual results and developments may materially differ from those expressed in or implied by such statements due to a number of factors, including:
	●	those described in the context of such forward-looking statements;
	●	the political, social and economic climate in which we conduct operations; and
	●	the risk factors described in other documents and reports filed with the Securities and Exchange Commission

 

We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all of those risks, nor can we assess the impact of all of those risks on our business or the extent to which any factor may cause actual results to differ materially from those contained in any forward-looking statement. We believe these forward-looking statements are reasonable. However, you should not place undue reliance on any forward-looking statements, which are based on current expectations. Further, forward-looking statements speak only as of the date they are made, and unless required by law, we expressly disclaim any obligation or undertaking to update publicly any of them in light of new information or future events.

 

 

Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations

 

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-months ended March 31, 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 months ended March 31, 2021 and 2020, respectively, together with notes thereto, which are included in this Quarterly Report on Form 10-Q.

 

Three months ended March 31, 2021 compared to the three months ended March 31, 2020

 

Revenues. Our revenues increased $160,599 to $316,729 for the three months ended March 31, 2020 compared to $156,130 for the comparable period in 2020. The increase is due to the acquisition of 3 new properties.

 

Operating expenses. In total, operating expenses decreased $50,196 to $130,184 for the three months ended March 31, 2021 compared to $180,380 for the comparable period in 2020. The decrease is primarily due to the Company paying less in salaries and wages.

 

General and administrative expenses decreased $61,834 to $54,903 for the three months ended March 31, 2021 compared to $116,737 for the comparable period in 2020.

 

Depreciation expense decreased $10,810 to $12,039 for the three months ended March 31, 2021 compared to $22,849 for the comparable period in 2020.

 

Professional fees increased $236 to $236 for the three months ended March 31, 2021 compared to $0 for the comparable period in 2020. The increase is attributable to the timing of the invoices received by the Company’s professional service providers.

 

Property tax expense increased $1,907 to $16,399 for the three months ended March 31, 2021 compared to $14,492 for the comparable period in 2020. The increase is due to the acquisition of 3 new properties.

 

Repairs and maintenance expense decreased $6,976 to $1,510 for the three months ended March 31, 2021 compared to $8,486 for the comparable period in 2020. The decrease is due to less maintenance needs.

 

 

Promissory Note Interest expense decreased $49,091 to $0 for the three months ended March 30, 2021 compared to $49,091 for the comparable period in 2020.

 

Mortgage Interest increased $79,478 to $133,360 for the three months ended March 31, 2021 compared to $53,882, for the comparable period in 2020. The increase is due to the acquisition of 3 new properties.

 

Net loss. Our net loss decreased $174,105 to $51,027 for the three months ended March 31, 2021 compared to $123,078 for the comparable period in 2020. The decrease is attributable to the revenue and expenses discussed above.

 

Liquidity and Capital Resources. For the three months ended March 31, 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 $10,164,945 as of March 31, 2021, consisting of $10,050,622 in net property assets, $107,594 in cash, $6,600 in deposits and $0 in prepaid expenses.

 

Our total liabilities are $11,006,311 as of March 31, 2021.

 

We were provided $98,325 in operating activities for the three months ended March 31, 2021 including $51,027 in net income, imputed interest and gain, which was offset by non-cash charges of $12,039 for depreciation and amortization, $6,221 in dividends accrued in preferred shares, a net decrease of $2,414 in accounts payable and $5,500 received for security deposits.

 

We used $114,101 in investing activities for the three months ended March 31, 2021, which was used for building additions and improvements.

 

We had $21,294 provided by financing activities for the three months ended March 31, 2021.

 

The Company had no formal long-term lines or credit or other bank financing arrangements as of March 31, 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 $114,101on building improvements during the three months ended March 31, 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.

 

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this item.

 

Item 4. Controls and Procedures

 

(a) Evaluation of Disclosure Controls and Procedures

 

We conducted an evaluation, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(f) under the Securities Exchange Act of 1934 as amended (the “Exchange Act”)). Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the fiscal quarter covered by this quarterly report on Form 10-Q were effective at a reasonable assurance level to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

 

(b) Changes in Internal Controls over Financial Reporting

 

During the three-month period ended March 31, 2021, there has been no change in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

PART II — OTHER INFORMATION

 

Item 1. Legal Proceedings

 

None.

 

Item 1A. Risk Factors

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

None.

 

Item 5. Other Information

 

None.

 

 

Item 6. Exhibits

 

(a)

The following exhibits are filed with this quarterly report on Form 10-Q or are incorporated herein by reference:

 

Exhibit
Number		Description
31.1		Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934*.
31.2		Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934*.
32.1		Certification of the Chief Executive Officer pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*.
32.2		Certification of the Chief Financial Officer pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*.

  

 *   Filed herewith.

 

 

SignatureS

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	HUBILU VENTURE CORPORATION
September 15, 2021	/s/ David Behrend
	David Behrend
	Chairman and Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Accounting and Financial Officer)