Certain information included herein contains forward-looking statements that
involve risks and uncertainties within the meaning of Sections 27A of the
Securities Act, as amended; Section 21E of the Securities Exchange Act of 1934.
These sections provide that the safe harbor for forward looking statements does
not apply to statements made in initial public offerings. The words, such as
'may,' 'would,' 'could,' 'anticipate,' 'estimate,' 'plans,' 'potential,'
'projects,' 'continuing,' 'ongoing,' 'expects,' 'believe,' 'intend' and similar
expressions and variations thereof are intended to identify forward-looking
statements. These statements appear in a number of places in this Form 10-K and
include all statements that are not statements of historical fact regarding
intent, belief or current expectations of the Company, our directors or our
officers, with respect to, among other things: (i) our liquidity and capital
resources; (ii) our financing opportunities and plans; (iii) continued
development of business opportunities; (iv) market and other trends affecting
our future financial condition; (v) our growth and operating strategy. Investors
and prospective investors are cautioned that any such forward-looking statements
are not guarantees of future performance and involve risks and uncertainties,
and that actual results may differ materially from those projected in the
forward-looking statements as a result of various factors. The factors that
might cause such differences include, among others, the following: (i) we have
incurred significant losses since our inception; (ii) any material inability to
successfully develop our business plans; (iii) any adverse effect or limitations
caused by government regulations; (iv) any adverse effect on our ability to
obtain acceptable financing; (v) competitive factors; and (vi) other risks
including those identified in our other filings with the Securities and Exchange
Commission.
Overview
The following discussion and analysis of our financial condition and results of
operations ('MD&A') should be read in conjunction with our consolidated
financial statements and the accompanying notes to the consolidated financial
statements included in this Form 10Q.
The MD&A is based on our consolidated financial statements, which have been
prepared in accordance with U.S. GAAP. The preparation of these consolidated
financial statements requires us to make estimates and judgments that affect the
reported amounts of assets, liabilities and expenses and related disclosure of
contingent assets and liabilities. Management bases its estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.
Three Months Ended March 31, 2021 and 2020
We generated revenues of $6,102,395 from sales of real estate during the three
months ended March 31, 2021, compared to 2,407,543 for the three months ended
March 31, 2020. This is due to the fact that the sales of new real estate
increased the sales revenue in 2021. For similar reasons, real estate rental
income for the period ended March 31, 2021 was $850,224, while there was no real
estate rental income for the corresponding period in 2020. Costs associated with
real estate sales were $3,064,735 during the three months ended March 31, 2021,
compared to 1,653,289 for the three months ended March 31, 2020.
General and administrative expenses for the three months ended March 31, 2021
were $777,919, compared to $592,596 during the corresponding period in 2020.
This increase is due to significantly increased activity. Interest expense for
the three months ended March 31, 2021 was $3,699,628, compared to $2,609,852 for
the three months ended March 31, 2020. The increased interest expense related to
properties acquired during 2021.
Six Months Ended March 31, 2021 and 2020
We generated revenues of $22,334,093 from sales of real estate during the six
months ended March 31, 2021, compared to3,281,037 for the six months ended March
31, 2020. This is due to the fact that the sales of new real estate increased
the sales revenue in 2021. For similar reasons, real estate rental income for
the period ended March 31, 2021 was $2,271,349, while there was no real estate
rental income for the corresponding period in 2020. Costs associated with real
estate sales were $2,281,162 during the six months ended March 31, 2021,
compared to 1,707,885 for the six months ended March 31, 2020.
General and administrative expenses for the six months ended March 31, 2021 were
$1,963,283, compared to $1,893,143 during the corresponding period in 2020. This
increase is due to significantly increased activity. Interest expense for the
six months ended March 31, 2021 was $6,693,661, compared to $7,159,030 for the
six months ended March 31, 2020. The reduced interest expense in 2021 is related
to the repayment of loans in 2020.
Liquidity and Capital Resources
In assessing its liquidity, management monitors and analyzes the Company's cash
on-hand, its ability to generate sufficient revenue sources in the future, and
its operating and capital expenditure commitments. The Company, as of the date
of this filing, had approximately $8,743,735 in unrestricted available cash,
which can be used to finance operations over the next 12 months. However, the
Company had not generated any revenues from operations during the six months
ended March 31, 2021, other than revenues from the sale of real estate
properties. For the six months ended March 31, 2021, our total expenses were
$6,417,562, consisting primarily of costs of rental real estate, taxes, legal
and accounting fees, administrative expenses and filing fees. Net cash provided
by operating activities was $660,430,895 for the six months ended March 31,
2021, compared to net cash used in operating activities of $ 611,458,143during
the corresponding period of 2020.
The effects of COVID-19 could impact the Company's ability to operate as a going
concern and maintain sufficient liquidity to continue operations. The impact of
COVID-19 on companies is evolving rapidly and its future effects are uncertain.
There are material uncertainties from COVID-19. There are a wide range of
factors to consider, including travel bans, restrictions on activity, government
assistance and potential sources of replacement financing, financial health of
vendors and customers and their effect on expected profitability and other key
financial performance ratios, including information that shows whether there
will be sufficient liquidity to continue to meet obligations when they come due.
At March 31, 2021, we had an accumulated deficit of $14,812,420 and cash and
cash equivalents (other than restricted cash) of $8,743,735. At March 31, 2020
we had an accumulated deficit of $28,271,348 and cash and cash equivalents
(other than restricted cash) of $ 1,217,845.
At December 31, 2020, we had an accumulated deficit of $13,240,725 and cash and
cash equivalents (other than restricted cash) of$11,601,437. At December 31,
2019, we had an accumulated deficit of $755,900 and cash of $0.
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COVID-19 Pandemic Update
The ongoing outbreak of Coronavirus (COVID-19) has caused significant
disruptions to national and global economies and government activities.
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