Notes
to the Consolidated Financial Statements
June
30, 2021
(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 September 30, 2021, the
Company had not yet achieved profitable operations, had an accumulated deficit of $1,541,286 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.
|
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 18th day of each month beginning
on the 18th day of January 2021 and continuing until the 17th day of December 2026, at which time the entire principal
balance together with interest due thereon, shall become due and payable.
On
June 18, 2021, we completed our acquisition, through its subsidiary Zinnia Investments, LLC, the real property located at 3908 Denker
Ave, Los Angeles (“Denker”). The property was vacant at the time of purchase. The acquisition was for $668,000 (“Purchase
Price”). The terms of the acquisition as follows:
(1)
A first position note with interest only for $655,000 owing by Zinnia to Belladonna, 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 $3,275 or more on the 1st
day of each month beginning on the 1st day of July 2021 and continuing until the 1st day of June 2025, at which time the entire principal
balance together with interest due thereon, shall become due and payable.
On
July 22, 2021, we completed our acquisition, through its subsidiary Sunza Investments, LLC, the real property located 4021 Halldale Avenue
in Los Angeles (“Halldale”). The property was vacant at the time of purchase. The acquisition was for $650,000 (“Purchase
Price”). The terms of the acquisition as follows:
(1)
A first position note with payment on principal balance of $585,000 issued by Sunza, owing to lender, Center Street Lending, VIII SPE,
LLC, whose terms of payments due are interest only, payable on unpaid principal at the rate of 8.5% per annum. Principal and interest
payable in monthly installments of $4,143.75 or more starting on September 1, 2021, and continuing until the 14th day of July 2022, at
which time the entire principal balance together with interest due thereon, shall become due and payable. (2) A $145,312 second position
note owing by Sunza to Belladonna Lily Investments, Inc. (“Belladonna”), whose terms of payments due were interest only,
payable on unpaid principal at the rate of 3.00% per annum. Interest only payable in monthly installments of $363.28 or more on the 15th
day of each month beginning on the 15th day of August 2021 and continuing until the 30th day of June 2029, at which
time the entire principal balance together with interest due thereon, shall become due and payable.
On
August 9, 2021, we completed our acquisition, through its subsidiary, Zinnia Investments, LLC, the real property located at 1284 W. 38th
Street in Los Angeles (“38th Street”). The property was vacant at the time of purchase. The acquisition was for $735,000
(“Purchase Price”). The terms of the acquisition as follows:
(1)
A first position note with payment on principal balance of $661,500 issued by the Zinnia owing to lender, Center Street Lending, VII
SPE, LLC, whose terms of payments due are interest only, payable on unpaid principal at the rate of 8.5% per annum. Principal and interest
payable in monthly installments of $4,685.63 or more starting on October 1, 2021, and continuing until the 3rd day of August
2022, at which time the entire principal balance together with interest due thereon, shall become due and payable. (2) A $110,000 second
position note owing by Zinnia to Belladonna, whose terms of payments due were interest only, payable on unpaid principal at the rate
of 5.25% per annum. Interest only payable in monthly installments of $481.25 or more on the 9th day of each month beginning on the 9th
day of September 2021 and continuing until the 30th day of June 2029 at which time the entire principal balance together with interest
due thereon, shall become due and payable.
September
30, 2021, we completed our acquisition, through its subsidiary Boabab Investments LLC, the real property located at 4505 Orchard Avenue
in Los Angeles (“Orchard”). The property was vacant at the time of purchase. The acquisition was for $675,000 (“Purchase
Price”). The terms of the acquisition as follows:
(1)
A first position note with interest only for $675,000 owing by Boabab to Belladonna Lily Investments, Inc. (“Belladonna”),
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 $2,812.50
or more on the 22nd day of each month beginning on the 22nd day of October 2021 and continuing until the 1st day of October 2029,
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 nine months ended September 30, 2021 and the year ended December 31, 2020 is as
follows:
SCHEDULE OF REAL ESTATE INVESTMENT FINANCIAL STATEMENTS
|
|
Nine months
ended
September 30,
2021
|
|
|
Year
ended
December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
Balance, beginning of the period
|
|
$
|
9,585,943
|
|
|
$
|
7,525,055
|
|
Acquisitions:
|
|
|
3,481,059
|
|
|
|
1,804,000
|
|
|
|
|
13,067,002
|
|
|
|
9,329,055
|
|
Capital improvements
|
|
|
361,612
|
|
|
|
256,888
|
|
Balance, end of the period
|
|
$
|
13,428,614
|
|
|
$
|
9,585,943
|
|
The
change in the accumulated depreciation for the nine months ended September 30, 2021 and 2020 is as follows:
SCHEDULE OF CHANGES IN ACCUMULATED DEPRECIATION
|
|
September 30,
2021
|
|
|
September 30,
2020
|
|
Balance, beginning of the period
|
|
$
|
238,383
|
|
|
$
|
137,699
|
|
Depreciation charge for the period
|
|
|
85,316
|
|
|
|
69,850
|
|
Balance, end of the period
|
|
$
|
323,699
|
|
|
$
|
207,549
|
|
The
Company’s real estate investments as of September 30, 2021 is summarized as follows:
SCHEDULE OF REAL ESTATE PROPERTIES
|
|
Initial Cost to the Company
|
|
|
Capital
|
|
|
Accumulated
|
|
|
|
|
|
Security
|
|
|
Closing
|
|
|
|
Land
|
|
|
Building
|
|
|
Improvements
|
|
|
Depreciation
|
|
|
Encumbrances
|
|
|
Deposits
|
|
|
Costs
|
|
3711 South Western Ave
|
|
$
|
508,571
|
|
|
$
|
383,716
|
|
|
$
|
24,034
|
|
|
$
|
82,887
|
|
|
$
|
553,317
|
|
|
$
|
17,134
|
|
|
|
-
|
|
2909 South Catalina
|
|
|
565,839
|
|
|
|
344,856
|
|
|
|
16,181
|
|
|
|
71,731
|
|
|
|
542,987
|
|
|
|
14,400
|
|
|
|
-
|
|
3910 Wisconsin Ave
|
|
|
337,500
|
|
|
|
150,000
|
|
|
|
88,834
|
|
|
|
21,603
|
|
|
|
479,514
|
|
|
|
7,090
|
|
|
|
-
|
|
3910 Walton Ave
|
|
|
318,098
|
|
|
|
191,902
|
|
|
|
2,504
|
|
|
|
24,516
|
|
|
|
551,994
|
|
|
|
11,000
|
|
|
|
-
|
|
1557 West 29th
|
|
|
496,609
|
|
|
|
146,891
|
|
|
|
17,368
|
|
|
|
16,619
|
|
|
|
617,745
|
|
|
|
11,760
|
|
|
|
14,251
|
|
1267 West 38th Street
|
|
|
420,210
|
|
|
|
180,090
|
|
|
|
7,191
|
|
|
|
22,165
|
|
|
|
617,745
|
|
|
|
7,945
|
|
|
|
15,899
|
|
1618 West 38th
|
|
|
508,298
|
|
|
|
127,074
|
|
|
|
14,732
|
|
|
|
8,300
|
|
|
|
643,981
|
|
|
|
10,290
|
|
|
|
-
|
|
4016 Dalton Avenue
|
|
|
424,005
|
|
|
|
106,001
|
|
|
|
33,109
|
|
|
|
8,530
|
|
|
|
790,428
|
|
|
|
10,310
|
|
|
|
27,478
|
|
1981 West Estrella Avenue
|
|
|
651,659
|
|
|
|
162,915
|
|
|
|
68,281
|
|
|
|
13,492
|
|
|
|
903,806
|
|
|
|
12,205
|
|
|
|
21,981
|
|
2115 Portland Street
|
|
|
753,840
|
|
|
|
188,460
|
|
|
|
1,763
|
|
|
|
11,042
|
|
|
|
922,595
|
|
|
|
15,115
|
|
|
|
-
|
|
717 West 42nd Place
|
|
|
376,800
|
|
|
|
94,200
|
|
|
|
-
|
|
|
|
7,343
|
|
|
|
472,135
|
|
|
|
1,350
|
|
|
|
-
|
|
3906 Denker Street
|
|
|
428,000
|
|
|
|
107,000
|
|
|
|
60,210
|
|
|
|
7,473
|
|
|
|
593,220
|
|
|
|
11,790
|
|
|
|
-
|
|
3408 S Budlong Street
|
|
|
499,200
|
|
|
|
124,800
|
|
|
|
18,996
|
|
|
|
5,481
|
|
|
|
712,000
|
|
|
|
9,840
|
|
|
|
-
|
|
3912 S. Hill Street
|
|
|
483,750
|
|
|
|
161,250
|
|
|
|
126,770
|
|
|
|
10,980
|
|
|
|
651,648
|
|
|
|
10,000
|
|
|
|
-
|
|
4009 Brighton Avenue
|
|
|
442,700
|
|
|
|
158,300
|
|
|
|
168,066
|
|
|
|
7,183
|
|
|
|
694,324
|
|
|
|
2,500
|
|
|
|
13,038
|
|
3908 Denker Avenue
|
|
|
534,400
|
|
|
|
158,300
|
|
|
|
44,369
|
|
|
|
1,925
|
|
|
|
646,262
|
|
|
|
4,500
|
|
|
|
3,172
|
|
4021 Halldale Avenue
|
|
|
487,500
|
|
|
|
162,500
|
|
|
|
11,615
|
|
|
|
1,113
|
|
|
|
585,000
|
|
|
|
-
|
|
|
|
17,995
|
|
1284 W. 38th Stteet
|
|
|
551,250
|
|
|
|
183,750
|
|
|
|
-
|
|
|
|
608
|
|
|
|
807,250
|
|
|
|
-
|
|
|
|
22,131
|
|
4505 Orchard Avenue
|
|
|
506,250
|
|
|
|
145,776
|
|
|
|
-
|
|
|
|
705
|
|
|
|
695,250
|
|
|
|
-
|
|
|
|
16,386
|
|
|
|
$
|
9,294,479
|
|
|
$
|
3,277,781
|
|
|
$
|
704,023
|
|
|
$
|
323,699
|
|
|
$
|
12,481,201
|
|
|
$
|
157,229
|
|
|
|
152,331
|
|
NOTE
6- PROPERTY INDEBTEDNESS
The
Company’s mortgages are summarized as follows:
SCHEDULE OF FINANCIAL INSTRUMENTS OWNED AND PLEDGED AS COLLATERAL
|
|
|
|
|
|
|
|
Stated interest
|
|
|
|
|
|
|
Principal balance
|
|
|
rate as at
|
|
|
|
|
|
|
September 30, 2021
|
|
|
December 31, 2020
|
|
|
September 30, 2020
|
|
|
Maturity date
|
|
3711 South Western Ave
|
|
$
|
553,317
|
|
|
$
|
562,957
|
|
|
|
3.95
|
%
|
|
|
November 1, 2021
|
|
2909 South Catalina Street
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- First Note
|
|
|
453,482
|
|
|
|
463,103
|
|
|
|
3.50
|
%
|
|
|
August 1, 2046
|
|
- Second Note
|
|
|
89,500
|
|
|
|
105,812
|
|
|
|
3.50
|
%
|
|
|
April 20, 2023
|
|
3910 Walton Ave.
|
|
|
551,994
|
|
|
|
558,693
|
|
|
|
5.00
|
%
|
|
|
August 01, 2049
|
|
3910 Wisconsin Street
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- First Note
|
|
|
239,514
|
|
|
|
242,810
|
|
|
|
4.375
|
%
|
|
|
October 1, 2036
|
|
- Second Note
|
|
|
150,000
|
|
|
|
150,000
|
|
|
|
9.00
|
%
|
|
|
September 27, 2025
|
|
- Third Note
|
|
|
90,000
|
|
|
|
90,000
|
|
|
|
4.00
|
%
|
|
|
April 30, 2022
|
|
1557 West 29 Street
|
|
|
617,745
|
|
|
|
643,500
|
|
|
|
4.75
|
%
|
|
|
June 1, 2051
|
|
1267 West 38 Street
|
|
|
617,745
|
|
|
|
595,000
|
|
|
|
4.975
|
%
|
|
|
July 1, 2051
|
|
1618 West 38 Street
|
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
- First Note
|
|
|
493,981
|
|
|
|
498,644
|
|
|
|
6.30
|
%
|
|
|
January 1, 2050
|
|
- Second Note
|
|
|
150,000
|
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
4016 Dalton Avenue
|
|
|
790,428
|
|
|
|
571,249
|
|
|
|
4.975
|
%
|
|
|
June 1, 2051
|
|
1981 Estrella Ave
|
|
|
903,806
|
|
|
|
875,000
|
|
|
|
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
|
|
|
602,819
|
|
|
|
609,046
|
|
|
|
6.00
|
%
|
|
|
June 1, 2049
|
|
-Second Note
|
|
|
319,776
|
|
|
|
319,776
|
|
|
|
5.00
|
%
|
|
|
April 30, 2024
|
|
3906 Denker
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-First Note
|
|
|
408,220
|
|
|
|
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
|
%
|
|
|
October
31, 2021
|
|
-Second Note
|
|
|
242,000
|
|
|
|
225,000
|
|
|
|
5
|
%
|
|
|
July 22, 2025
|
|
3912 S. Hill Street
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-First Note
|
|
|
511,648
|
|
|
|
516,000
|
|
|
|
6.425
|
%
|
|
|
December 1, 2050
|
|
- Second Note
|
|
|
140,000
|
|
|
|
140,000
|
|
|
|
6.425
|
%
|
|
|
November 1, 2026
|
|
4007 Brighton Avenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-First Note
|
|
|
537,324
|
|
|
|
-
|
|
|
|
8.5
|
%
|
|
|
January 25, 2022
|
|
-Second Note
|
|
|
157,000
|
|
|
|
147,000
|
|
|
|
6
|
%
|
|
|
December 17, 2026
|
|
3908 Denker Avenue
|
|
|
646,267
|
|
|
|
-
|
|
|
|
6
|
%
|
|
|
June 1, 2025
|
|
4021 Halldale Avenue
|
|
|
585,000
|
|
|
|
-
|
|
|
|
8.5
|
%
|
|
|
July 14, 2022
|
|
1284 W. 38th Street
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
-First Note
|
|
|
661,500
|
|
|
|
-
|
|
|
|
8.5
|
%
|
|
|
August 3, 2022
|
|
-Second Note
|
|
|
145,750
|
|
|
|
-
|
|
|
|
5.25
|
%
|
|
|
June 30, 2029
|
|
4505 Orchard Avenue
|
|
|
695,250
|
|
|
|
-
|
|
|
|
5
|
%
|
|
|
October 1, 2029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
12,481,201
|
|
|
$
|
9,006,922
|
|
|
|
|
|
|
|
|
|
NOTE
7 – PROMISSORY NOTES PAYABLE-Related Party
SCHEDULE OF DEBT
September 30, 2021
|
|
|
December 31, 2020
|
|
|
|
|
|
|
|
|
$
|
182,056
|
|
|
$
|
182,056
|
|
As
of September 30, 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, 2029, 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 April 20, 2023. The total balance is due on the maturity date of each
note.
General
loans that are considered due are not property specific and are considered due on demand.
NOTE
8–RELATED PARTY TRANSACTIONS
As
of September 30, 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 $24,831 which was credited to additional paid-in capital for the nine months ended
September 30, 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 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.
SCHEDULE OF ISSUANCE OF CONVERTIBLE PREFERRED SHARES SETTLEMENT OBLIGATION
|
|
# 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
|
|
|
|
|
|
|
|
|
|
|
24,895
|
|
|
|
24,895
|
|
Balance, September 30, 2021
|
|
|
500,400
|
|
|
$
|
500,400
|
|
|
$
|
110,759
|
|
|
$
|
611,249
|
|
NOTE
10 – CONTINGENCY/LEGAL
As
of September 30, 2021, 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 – SUBSEQUENT EVENTS
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 acquired the property on October 6, 2021.
On
November 11, 2021, we entered into an agreement, through our subsidiary Boabab Investments, LLC, to acquire its real property asset located
at 2029 W. 41st Place in Los Angeles. We plan to close the acquisition in the fourth quarter.
On
December 8, 2021, we entered into an agreement, through our subsidiary Boabab Investments, LLC, to acquire its real property asset
located at 3791 S. Normandie Avenue in Los Angeles. We plan to close the acquisition in the fourth quarter.
In
October 2021, we refinanced loans on three of our Hubilu properties, 4009 S. Brighton Avenue, 3408 S. Budlong Avenue and 3908 Denker
Avenue, 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.
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.