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.
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Three Months Ended December 31, 2020 and 2019
We generated revenues of $0 from sales of real estate during the three months
ended December 31, 2020, compared to $0 for the three months ended December 31,
2019. This is due to the fact that the business activities of PRC companies in
September 2020 and before are not within the scope of the consolidated financial
statements, and we have no real estate sales revenue in the three months ended
December 31, 2020, while we have basically no business in the corresponding
period 2019. For similar reasons, the real estate rental income for the period
ended December 31, 2020 was $2,338,374, while there was no rental income for the
corresponding period in 2019. For the three months ended December 31, 2020, the
rental cost of real estate was $107,119, compared to $0 for the corresponding
period in 2019.
General and administrative expenses for the three months ended December 31, 2020
were $1,401,569, compared to $782,000 during the corresponding period in 2019.
This increase is due to significantly increased activity, including the
acquisition of real estate. Interest expense for the three months ended December
31, 2020 was $2,994,033, compared to $205 for the three months ended December
31, 2019. The increased interest expense related to properties acquired during
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 $11,601,437 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 three months
ended December 31, 2020, other than rental income from the real estate
properties. For the three months ended December 31, 2020, our total expenses
were $5,179,759, 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 $-70,828,269,209 for the three months ended
December 31, 2020, compared to net cash used in operating activities of $
-701,171during the corresponding period of 2019.
As of December 31, 2020, we had an accumulated deficit of $-2,966,223 and cash
and cash equivalents (other than restricted cash) of $11,601,437. As of
September 30, 2020, our accumulated deficit was $-750,217, and cash and cash
equivalents (other than restricted cash) was $2,551,600.
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