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☒QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended: March 31, 2022
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 June 3, 2022, the number of shares outstanding of the issuer’s sole class of common stock, $0.001 par value per share, is 26,237,125.
26,237,125 issued and outstanding on March 31, 2022 (December 31, 2021: 26,237,125)
26,237
26,237
Additional paid-in capital
784,123
775,755
Accumulated Deficit
(1,674,335
)
(1,626,509
)
TOTAL STOCKHOLDERS’ DEFICIT
(863,975
)
(824,517
TOTAL LIABILITIES STOCKHOLDERS’ DEFICIT
$
16,916,510
14,110,229
The
accompanying notes are an integral part of these unaudited consolidated financial statements.
3
HUBILU
VENTURE CORPORATION
Consolidated
Statements of Operations
(unaudited)
Three months ended March 31, 2022
Three months
ended March 31, 2021
Rental Income
$
389,937
$
316,729
Expenses
General administrative
78,238
54,903
Depreciation
49,227
12,039
Professional fees
250
236
Property taxes
61,232
16,399
Rent expense
3,900
3,900
Repairs and maintenance
450
1,510
Taxes and licenses
2,475
836
Wages and benefits
36,875
26,250
Transfer agent and filing fees
300
-
Utilities
14,426
14,111
Total Operating Expenses
247,373
130,184
Income before other income (expense)
142,564
186,608
Other income
29,800
4,000
Dividends accrued for preferred shares
-
(6,221
)
Interest expense
(220,190
)
(133,360
)
Total Other Income (Expense)
(190,390
)
(135,581
)
Net income (loss) for the period
$
(47,826
)
$
51,027
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
26,237,125
26,322,193
The
accompanying notes are an integral part of these unaudited consolidated financial statements.
4
HUBILU
VENTURE CORPORATION
Consolidated
Statement of Stockholders’ Deficit
(unaudited)
Shares
Amount
Capital
Deficit
Deficit
Common Stock
Additional Paid-In
Accumulated
Stockholders’
Shares
Amount
Capital
Deficit
Deficit
Balance, December 31, 2020
26,237,125
$
26,237
$
742,556
$
(1,669,372
)
$
(900,579
)
Imputed Interest
-
-
33,199
-
33,199
Net income
-
-
-
42,863
42,863
Balance, December 31, 2021
26,237,125
$
26,237
$
775,755
$
(1,626,509
)
$
(824,517
)
Beginning balance
26,237,125
$
26,237
$
775,755
$
(1,626,509
)
$
(824,517
)
Imputed Interest
-
-
8,368
-
8,368
Net loss
-
-
-
(47,826
)
(47,826
)
Net income (loss)
-
-
-
(47,826
)
(47,826
)
Balance, March 31, 2022
26,237,125
$
26,237
$
784,123
$
(1,674,355
)
$
(863,975
)
The
accompanying notes are an integral part of these consolidated financial statements.
5
HUBILU
VENTURE CORPORATION
Consolidated
Statements of Cash Flows
(unaudited)
For the three
months ended
March 31, 2022
For the three
months ended
March 31, 2021
OPERATING ACTIVITIES
Net income (loss)
$
(47,826
)
$
51,027
Adjustments to reconcile net income (loss) to net cash provided by (used for) operations:
Depreciation and amortization
49,227
12,039
Cumulative preferred stock dividends payable
30
6,221
Imputed interest
8,368
8,186
Gain on EDIL, forgiveness
-
(4,000
)
Changes in operating assets and liabilities:
Funds held in escrow and other current assets
-
17,901
Prepaid expenses
-
3,865
Accounts payable
3,680
(2,414
)
Security deposits
19,194
5,500
Net cash provided (used in) operating activities
32,673
98,325
CASH FLOWS FROM INVESTING ACTIVITIES:
Building improvements
(216,013
)
(114,101
)
Cash used in investing activities
(216,013
)
(114,101
)
CASH FLOWS FROM FINANCING ACTIVITIES
Advance from related party, net
-
(18,229
)
Property indebtedness, net
102,757
(3,065
)
Net cash provided by (used in) financing activities
102,757
(21,294
)
NET (DECREASE) INCREASE IN CASH
(80,583
)
(37,070
)
Cash, beginning of the period
203,738
144,664
Cash, end of the period
$
123,155
$
107,594
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid
$
189,293
$
124,842
Income taxes paid
$
63,707
$
17,235
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS
Acquisitions of assets financed through debt
$
2,720,078
$
601,000
The
accompanying notes are an integral part of these unaudited consolidated financial statements.
6
HUBILU
VENTURE CORPORATION
Notes
to the Consolidated Financial Statements
March
31, 2022
(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, Boabab Investments, LLC and Mapone 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, 2022, the Company
had not yet achieved profitable operations, had an accumulated deficit of $1,674,335 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, 2021.
7
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.
NOTE
4 - PROPERTY ACQUISITIONS - Related Party
On
January 7, 2022 we completed our acquisition, through our subsidiary Boabab Investments, LLC, the real property located at 3791 S. Normandie
Avenue in Los Angeles (“Boabab”). The property was vacant at time of purchase. The acquisition was for $640,000 (“Purchase
Price”). Terms of the acquisition as follows:
(1)
A first position note with payment on principal balance of $576,000 issued by the Property Owner, Boabab, 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 $4,080.00 or more starting on February 1, 2022 and continuing until the December 29,
2022 at which time the entire principal balance together with interest due thereon, shall become due and payable.
(2)
A $75,000 second position note owing by Boabab, whose terms of payments due were interest only, payable on unpaid principal at the rate
of 5.00% per annum. Interest only payable in monthly installments of $312.50 or more on the 5th day of each month beginning on the 5th
day of February 2022 and continuing until the 4th day of January 2029, at which time the entire principal balance together
with interest due thereon, shall become due and payable.
On
March 2, 2022, we refinanced 3791 S. Normandie Ave in Los Angeles to one note. Terms of the refinance are as follows: (1) A first position
note with payment on principal balance of $621,500.00 issued by the Property Owner, Boabab, owing to lender, Visio Financial Services,
Inc, whose terms of payments due are principle and interest, on unpaid principal at the rate of 5.225% per annum. Principal and interest
payable in monthly installments of $3,422.33 or more starting on May 1, 2022 and continuing until the 1st day of April 2052,
at which time the entire principal balance together with interest due thereon, shall become due and payable.
On
January 20, 2022 we completed our acquisition, through its subsidiary Boabab Investments, LLC, the real property located at 2029 W. 41st
Place in Los Angeles (“41st Place”). The property was vacant at the time of purchase. The acquisition was for $720,000
(“Purchase Price”). The terms of the acquisition as follows:
(1)
A first position note with payment on principal balance of $648,000 issued by the Property Owner, Boabab, 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 installment’s of $4,590.00 or more starting on March 1, 2022 and continuing until the January 6,
2023 at which time the entire principal balance together with interest due thereon, shall become due and payable.
8
(2)
A $84,950 second position note owing by Boabab, whose terms of payments due were interest only, payable on unpaid principal at the rate
of 5.00% per annum. Interest only payable in monthly installments of $361.38 or more on the 18th day of each month beginning on the 18th
day of February 2022 and continuing until the 17th day of January 2029, at which time the entire principal balance together
with interest due thereon, shall become due and payable.
On
March 2, 2022, we completed our acquisition, through its subsidiary Trilosa Investments, LLC, the real property located at 4517 Orchard
Avenue in Los Angeles (“Orchard”). The property was vacant at the time of purchase. The acquisition was for $605,000 (“Purchase
Price”). The terms of the acquisition as follows:
(1)
A first position note with payment on principal balance of $484,000 issued by the Property Owner, Trilosa, owing to lender, Visio Financial
Services, Inc, whose terms of payments due are principle and interest, on unpaid principal at the rate of 5.225% per annum. Principal
and interest payable in monthly installments of $2,665.18 or more starting on May 1, 2022 and continuing until the 1st day
of April 2052, at which time the entire principal balance together with interest due thereon, shall become due and payable.
(2) A $158,000second position note owing by Trilosa, whose terms of payments due were interest only, payable on unpaid principal at the rate of 5.00%
per annum. Interest only payable in monthly installments of $658.33 or more on the 2nd day of each month beginning on the 2nd day of
April 2022 and continuing until the 1st day of March 2029, at which time the entire principal balance together with interest due thereon,
shall become due and payable.
On
March 25, 2022, we completed our acquisition, through its subsidiary Mapone Investments, LLC, the real property located at 1733 W. 37th
Street in Los Angeles (“37th Street”). The property was vacant at the time of purchase. The acquisition was for $630,500(“Purchase Price”). The terms of the acquisition as follows:
(1)
A first position note with payment on principal balance of $567,450.00 issued by the Property Owner, Mapone, 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 7.5% per annum.
Principal and interest payable in monthly installments of $3,546.56.00 or more starting on May 1, 2022 and continuing until the March
22, 2023 at which time the entire principal balance together with interest due thereon, shall become due and payable.
(2)
A $100,000 second position note owing by Mapone, whose terms of payments due were interest only, payable on unpaid principal at the rate
of 6.00% per annum. Interest only payable in monthly installments of $500.00 or more on the 1st day of each month beginning on the 1st
day of May 2022 and continuing until the 31st day of March 2029, at which time the entire principal balance together with interest due
thereon, shall become due and payable.
9
NOTE
5- INVESTMENTS IN REAL ESTATE- Related party
The
change in the real estate property investments for the three months ended March 31, 2022 and the year ended December 31, 2021 is as follows:
SUMMARY OF CHANGES IN REAL ESTATE PROPERTY INVESTMENTS
Three months
ended March 31, 2022
Year
ended December 31, 2021
Balance, beginning of the period
$
14,255,927
$
9,585,943
Acquisitions:
2,720,078
4,182,057
Real estate investment property, at cost
16,976,005
13,768,000
Capital improvements
216,013
487,927
Balance, end of the period
$
17,192,018
$
14,255,927
The
change in the accumulated depreciation for the three months ended March 31, 2022 and 2021 is as follows:
SUMMARY OF CHANGES IN ACCUMULATED DEPRECIATION
March 31,
2022
March 31,
2021
Balance, beginning of the period
$
356,036
$
238,383
Depreciation charge for the period
49,227
12,039
Balance, end of the period
$
405,263
$
250,422
The
Company’s real estate investments as of March 31, 2022 is summarized as follows:
SCHEDULE OF REAL ESTATE INVESTMENT
Land
Building
Improvements
Depreciation
Encumbrances
Deposits
Costs
Initial
Cost to the Company
Capital
Accumulated
Security
Closing
Land
Building
Improvements
Depreciation
Encumbrances
Deposits
Costs
3711
South Western Ave
$
508,571
$
383,716
$
26,594
$
87,487
$
656,585
$
15,124
-
2909
South Catalina
565,839
344,856
16,181
77,939
536,028
14,400
-
3910
Wisconsin Ave
337,500
150,000
88,833
25,544
699,146
1,900
28,444
3910
Walton Ave
318,098
191,902
2,504
28,104
547,390
11,000
-
1557
West 29th
496,609
146,891
21,971
20,384
613,152
12,565
14,251
1267
West 38th Street
420,210
180,090
7,191
27,853
613,161
4,600
15,701
1618
West 38th
508,298
127,074
14,732
10,658
640,784
8,340
-
4016
Dalton Avenue
424,005
106,001
39,240
12,045
617,114
10,310
27,678
1981
West Estrella Avenue
651,659
162,915
68,501
18,256
910,290
12,985
21,981
2115
Portland Street
753,840
188,460
1,763
14,203
918,300
10,515
-
717
West 42nd Place
376,800
94,200
-
8,908
472,135
1,350
-
3906
Denker Street
428,000
107,000
60,210
10,252
590,468
11,790
-
3408
S Budlong Street
499,200
124,800
54,488
9,233
737,604
9,840
-
3912
S. Hill Street
483,750
161,250
132,100
15,891
660,628
15,300
-
4009
Brighton Avenue
442,700
158,300
168,983
13,122
728,378
2,500
13,040
3908
Denker Avenue
534,400
158,300
55,070
5,790
637,673
4,500
20,243
4021
Halldale Avenue
487,500
162,500
36,883
4,805
585,000
18,000
17,995
1284
W. 38th Street
551,250
183,750
-
4,186
844,000
12,000
16,623
4505
Orchard Avenue
506,250
145,776
122,612
4,535
656,000
17,500
27,037
3777
Ruthelen Street
559,200
139,800
2,152
2,198
720,000
13,900
11,019
3791
Normandie Avenue
480,000
160,000
-
1,420
771,500
12,000
27,394
2029
W. 41st Place
540,000
180,000
95,111
1,845
809,900
-
13,501
4517
Orchard Avenue
453,750
151,250
33,230
511
642,000
-
8,538
1733
W. 37th Street
472,875
157,625
-
94
667,450
-
13,464
$
11,800,304
$
4,066,456
$
1,048,349
$
405,263
$
16,274,686
$
220,419
$
276,909
10
NOTE
6- PROPERTY INDEBTEDNESS
The
Company’s mortgages are summarized as follows:
SCHEDULE OF MORTGAGES PAYABLE
March 31, 2022
December 31, 2021
March 31, 2022
Maturity date
Principal balance
Stated interest
rate as at
March 31, 2022
December 31, 2021
March 31, 2022
Maturity date
3711 South Western Ave
$
656,585
$
656,585
5.00
%
December 1, 2029
2909 South Catalina Street
- First Note
446,528
450,063
3.10
%
August 12, 2046
- Second Note
89,500
89,500
3.50
%
August 1, 2029
3910 Walton Ave.
547,390
549,705
5.00
%
August 01, 2049
3910 Wisconsin Street
699,146
518,250
5.225
%
March 1, 2052
1557 West 29 Street
-First Note
413,152
415,463
4.975
%
June 1, 2051
-Second Note
200,000
200,000
5.40
%
January 1, 2029
1267 West 38 Street
613,161
617,745
4.975
%
July 1, 2051
1618 West 38 Street
- First Note
490,784
492,454
6.30
%
January 1, 2050
- Second Note
150,000
150,000
6.00
%
December 10, 2023
4016 Dalton Avenue
617,114
775,478
4.975
%
June 1, 2051
1981 Estrella Ave
910,290
913,569
5.225
%
June 1, 2051
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
598,524
600,688
6.00
%
June 1, 2049
-Second Note
319,776
319,776
5.00
%
April 30, 2024
3906 Denker
-First Note
405,468
406,854
6.00
%
March 1, 2025
-Second Note
185,000
185,000
6.85
%
February 14, 2025
3408 Budlong
-First Note
617,604
470,000
4.875
%
December 1, 2051
-Second Note
120,000
242,000
5.00
%
November 1, 2029
3912 S. Hill Street
-First Note
508,628
510,150
6.425
%
December 1, 2050
- Second Note
152,000
152,000
6.425
%
November 1, 2026
4009 Brighton Avenue
728,378
779,374
4.875
%
November 1, 2051
3908 Denker Avenue
637,673
640,000
4.975
%
December 1, 2051
4021 Halldale Avenue
585,000
730,312
8.5
%
July 14, 2022
1284 W. 38th Street
844,000
820,500
4.56
%
March 1, 2052
4505 Orchard Avenue
656,000
695,250
4.625
%
March 1, 2052
3777 Ruthelen Street
720,000
699,000
5
%
October 1, 2029
3791 S. Normandie Avenue
- First Note
621,500
-
5.225
%
April 1, 2052
-Second Note
150,000
-
5.00
%
January 4, 2029
2029 W. 41st Place
-First Note
648,000
-
8.5
%
January 6, 2023
-Second Note
161,900
-
5.00
%
January 17, 2029
4517 Orchard Avenue
-First Note
484,000
-
5.225
%
April 1, 2052
-Second Note
158,000
-
5.00
%
March1, 2029
1733 W. 37th Place
-First Note
567,450
-
7.5
%
March 22, 2023
-Second Note
100,000
-
6.00
%
May 1, 2029
Trilosa- General Loan
30,000
-
-
-
Mopane- General Loan
40,000
-
-
-
Hubilu- General Loan
30,000
-
-
-
$
16,374,686
$
13,551,851
11
NOTE
7 – PROMISSORY NOTES PAYABLE-Related Party
SCHEDULE
OF PROMISSORY NOTE
March 31, 2022
December 31, 2021
$
89,593
$
89,593
On
November 1, 2021, a 1st promissory note secured
by 3711 S. Western Ave, Los Angeles, CA 90018 and payable to Opus Bank in the amount of $554,865became due. Belladonna Lily Investments, Inc.
agreed to pay off the 1st promissory note and the majority of the 2nd promissory note owing to Esteban Coaloa in the amount of $92,463.
This notewas assigned to Belladonna Lily
Investments, Inc. Belladonna Lily Investments, Inc. recorded a new 1st promissory note in the amount of $700,000which was
secured by a deed of trust against the property. After accounting for a prior loan owed to Belladonna Lily investments, Inc in
the amount of $12,000and other closing costs, the balance owing at
December 31, 2021 by Akebia Investments, LLC to Belladonna Lily Investments, Inc. was $656,584and $14,700was owed unsecured to Esteban Coaloa. The refinance
closed on December 30, 2021. Refer to Note 6 - Property Indebtedness for current balance of loans owed against 3711 S. Western Ave, Los
Angeles, CA.
NOTE
8–RELATED PARTY TRANSACTIONS
As
of March 31, 2022, the Company’s majority shareholder, has provided advances totaling $474,271 (December 31, 2021: $474,271).
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 $8,368 which was credited to additional paid-in capital for the three months
ended March 31, 2022.
On
February 25, 2022, 3910 Wisconsin Ave, owned by Sunza Investments, LLC was refinanced. Belladonna Lily Investments, Inc. was paid
$440,072
as part of the payoff. The $440,072
also paid off the following unsecured notes owed by Sunza Investments, LLC. (1) A promissory note in 2nd position on 3910 Wisconsin
Ave in the amount of $150,000
owing to Belladonna Lily Investments, Inc., was paid off in full. (2) A promissory note in 3rd position on 3910 Wisconsin
Ave of $130,000
owing to Belladonna Lily Investments, Inc. was paid off in full. (3) A promissory note in 2nd position on 4021 Halldale Ave of
$145,312
owing to Belladonna Lily Investments, Inc, was paid off in full. (4) The balance of $14,760
was used to pay interest owing and points payable on the loans.
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 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.
12
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.
SCHEDULE OF ISSUANCE OF CONVERTIBLE PREFERRED SHARES SETTLEMENT OBLIGATION
# of Shares
Amount
Dividend
in Arrears
Total
Balance,
December 31, 2020
500,400
$
500,400
$
85,864
$
586,264
Dividends
accrued
-
-
21,210
21,210
Shares
issued
10,000
10,000
-
10,000
Balance,
December 31, 2021
510,400
510,400
107,074
617,474
Dividends
accrued
-
-
30
30
Balance,
March 31, 2022
510,400
$
510,400
$
107,104
$
617,504
NOTE
10 – CONTINGENCY/LEGAL
As
of March 31, 2022, and during the preceding ten years, no director, person nominated to become a director or executive officer, or promoter
of the Company has been involved in any legal proceeding that would require disclosure hereunder.
From
time to time, the Company may become subject to various legal proceedings and claims that arise in the ordinary course of our business
activities. However, litigation is subject to inherent uncertainties for which the outcome cannot be predicted. Any adverse result in
these or other legal matters could arise and cause harm to the Company’s business. The Company currently is not a party to any
claim or litigation, the outcome of which, if determined adversely to the Company, would individually or in the aggregate be reasonably
expected to have a material adverse effect on the Company’s business.
NOTE
11- OTHER INCOME
The
company generated Other Income in the amount of $29,800 which is made up of money paid by Condon Realty Group to the company. Condon
Realty Group represents Hubilu subsidiaries’ acquisitions during this period.
NOTE
12 – SUBSEQUENT EVENTS
On
January 28, 2022, we entered into an agreement, through our subsidiary Mapone Investments, LLC, to acquire its real property asset located
at 2014 Magnolia Avenue in Los Angeles. We cancelled this agreement in the second quarter.
13
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.
14
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, 2022 and 2021, 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, 2022 and 2021, respectively, together with notes thereto, which are included in this
Quarterly Report on Form 10-Q.
Three
months ended March 31, 2022, compared to the three months ended March 31, 2021
Revenues.
Our revenues increased $73,208 to $389,937 for the three months ended March 31, 2022, compared to $316,729 for the comparable
period in 2021. The increase is due to additional property acquisitions.
Operating
expenses. In total, operating expenses increased $117,189 to $247,373 for the three months ended March 31, 2022, compared
to $130,184 for the comparable period in 2021.
General
and administrative expenses increased $23,335 to $78,238 for the three months ended March 31, 2022, compared to $54,903
for the comparable period in 2021.
Depreciation
expense increased $37,188 to $49,227 for the three months ended March 31, 2022, compared to $12,039 for the comparable
period in 2021.
Rent
expense stayed equal at $3,900 for the three months ended March 31, 2022, which was the same amount of $3,900 for the comparable
period in 2021.
Property
tax expense increased $44,833 to $61,232 for the three months ended March 31, 2022, compared to $16,399 for the comparable
period in 2021. The increase is due to the acquisition of nine new properties.
Repairs
and maintenance expense decreased $1,060 to $450 for the three months ended March 31, 2022, compared to $1,510 for the
comparable period in 2021.
Taxes
and licenses expense increased $1,639 to $2,475 for the three months ended March 31, 2022, compared to $836 for the comparable
period in 2021. The increase is due to timing of filing dates.
Wages
and benefits expense increased $10,625 to $36,875 for the three months ended March 31, 2022, compared to $26,250 for the
comparable period in 2021. The increase is due to salaries and wages being adjusted since the Covid shutdown.
Transfer
agent and filing fees expense increased $300 to $300 for the three months ended March 31, 2022, compared to $0 for the
comparable period in 2021. The increase is due to additional filings during this period.
15
Interest
expense increased $86,830 to $220,190 for the three months ended March 31, 2022, compared to $133,360, for the comparable
period in 2021. The increase is due to the acquisition of nine new properties.
Net
Income (loss). Our net loss increased $98,853 to $47,826 of net loss for the three months ended March
31, 2022, compared to $51,027 of net income for the comparable period in 2021. The increase is attributable to the revenue and
expenses discussed above.
Liquidity
and Capital Resources. For the three months ended March 31, 2022, 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 $16,916,510 as of March 31, 2022, consisting of $16,786,755 in net property assets, $123,155 in
cash, and $6,600 in deposits.
Our
total liabilities are $17,780,485 as of March 31, 2022.
We
were provided $32,673 in operating activities for the three months ended March 31, 2022, consisting of $47,826 in net loss,
imputed interest, which was offset by non-cash charges of $49,227 for depreciation and amortization, $30 in
dividends accrued in preferred shares, a net decrease of $3,680 in accounts payable and $19,194 received for security deposits.
We
used $216,013 in investing activities for the three months ended March 31, 2022, which was used for building additions and improvements.
We
had $102,757 provided by financing activities for the three months ended March 31, 2022.
The
Company had no formal long-term lines or credit or other bank financing arrangements as of March 31, 2022.
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 $216,013 on building improvements during the three months ended March 31, 2022.
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.
16
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, 2022, 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.
17
Item
6. Exhibits
(a)
The
following exhibits are filed with this quarterly report on Form 10-Q or are incorporated herein by reference:
Cover
Page Interactive Data File (embedded within the Inline XBRL document)
*
Filed
herewith.
18
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
June
3, 2022
/s/
David Behrend
David
Behrend
Chairman
and Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Accounting and Financial Officer)
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