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, 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 months ended March 31, 2020 and 2019, respectively, together with notes
thereto, which are included in this Quarterly Report on Form 10-Q.
Three months ended March 31, 2020 compared to the three months ended March 31,
2019
Revenues. Our revenues increased $73,380 to $156,130 for the three months ended
March 31, 2020 compared to $82,750 for the comparable period in 2019. The
increase is due to the acquisition of 6 new properties.
Operating expenses. In total, operating expenses decreased $69,931to $180,380
for the three months ended March 31, 2020 compared to $250,311 for the
comparable period in 2019. The decrease is primarily due to the Company paying
less in salaries and wages.
General and administrative expenses increased $98,014 to $116,737 for the three
months ended March 31, 2020 compared to $18,723 for the comparable period in
2019.
Consulting expenses decreased $196,600 to $0 for the three months ended March
31, 2020 compared to $196,600 for the comparable period in 2019. The decrease is
due to adding salaries and wages and less consulting.
Depreciation expense increased $12,335 to $22,849 for the three months ended
March 31, 2020 compared to $10,514 for the comparable period in 2019. The
increase is due to acquiring more properties.
Professional fees decreased $6,075 to $0 for the three months ended March 31,
2020 compared to $6,075 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 $9,669 to $14,492 for the three months ended
March 31, 2020 compared to $4,823 for the comparable period in 2019. The
increase is due to additional property acquisitions.
Repairs and maintenance expense increased $6,459 to $8,486 for the three months
ended March 31, 2020 compared to $2,027 for the comparable period in 2019. The
increase is due to 6 acquisitions last quarter.
Transfer Agent and Filing Fees decreased $200 to $0 for the three months ended
March 31, 2020 compared to $200 for the comparable period in 2019. The decrease
is due to less filings this quarter.
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Promissory Note Interest expense increased $45,126 to $49,091 for the three
months ended March 30, 2020 compared to $3,965 for the comparable period in
2020.
Mortgage Interest increased $14,595 to $53,882 for the three months ended March
31, 2020 compared to $39,287 for the comparable period in 2019. The increase is
due to the acquisition of 6 new properties.
Net loss. Our net loss decreased $93,990 to $123,078 for the three months ended
March 31, 2020 compared to $217,068 for the comparable period in 2019. The
decrease is attributable to the revenue and expenses discussed above.
Liquidity and Capital Resources. For the three months ended March 31, 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.
Our total assets are $8,045,760 as of March 31, 2020, consisting of $7,991,516
in net property assets, $47,644 in cash, $6,600 in deposits and $0 in prepaid
expenses.
Our total liabilities are $8,916,566 as of March 31, 2020.
We used $40,952 in operating activities for the three months ended March 31,
2020 including $123,078 in net loss which was offset by non-cash charges of
$22,849 for depreciation and amortization, $6,255 in dividends accrued in
preferred shares, a net increase of $3,597 in accounts payable and $39,254
received for security deposits.
We used $92,667 in investing activities for the three months ended March 31,
2020, which was used for building additions and improvements.
We had $32,465 provided by financing activities for the three months ended March
31, 2020.
The Company had no formal long-term lines or credit or other bank financing
arrangements as of March 31, 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 $92,667 on building improvements during the three months ended
March 31, 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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