HBUV 10-K & 10-Q changes, risk factors and insider trading

Our financial statements for the year ended December 31, 2024,2025, disclose that we can continue as a going concern. However, if necessary, our directorsdirector may be unable or unwilling to loan or advance us any funds.

We are entirely dependent on the efforts of David Behrend, our president, chief executive officer as well as our secondsole director. The loss of our directors,director, or of other key personnel hired in the future, could have a material adverse effect on the business and its prospects. There is currently no employment contract by and between any director and us.

Our directorsdirector are required to commit time to our affairs and, accordingly, may have conflicts of interest in allocating management time among various business activities. During other business activities, they may become aware of business opportunities that may be appropriate for presentation to us, as well as the other entities with which they are affiliated. As such, there may be conflicts of interest in determining to which entity a business opportunity should be presented.

During 2024,2025, we closed on a total of sixfour new properties in the Los Angeles area, under our MopaneElata Investments, LLC entity, bringing our total properties under management to thirty. Also, during 2024, a significant tenant that was responsible for $1,431,665, or 64%, and $1,180,338, or 63%, of our revenues during the years ended December 31, 2024 and 2023, respectively, terminated their contracts. We are actively seeking new tenants to fulfill our occupancy rate goals.thirty-four.

Our rental revenues increaseddecreased to $2,232,412$2,203,976 for the year ended December 31, 2024,2025, compared to $1,885,985$2,232,412 for the comparable period in 2023,2024, ana increasedecrease of $346,427,$28,436, or 18%.1.27%. The increasedecrease was due to acquiringmultiple 6tenants newvacating propertiesduring thatthe were rented out over various dates in 2024.year.

Salaries and benefits for the year ended December 31, 20242025 was $87,500,$68,975 compared to $69,100$87,500 for the year ended December 31, 2023,2024, ana increasedecrease of of $18,400,$18,525, or 27%.21.17%. Salaries and benefits increaseddecreased primarily due to moredecreased timecompensation spentpaid on activities byto our vice president whoduring isthe our only compensatedcurrent employee.period

Utilities for the year ended December 31, 20242025 was $30,504,$47,340 compared to $47,624$30,504 for the year ended December 31, 2023,2024, aan decreaseincrease of $17,120,$16,836, or 36%.55.19%. The decrease was primarily due to increased occupancy rates in 2024 that resulted in fewer unreimbursed utilities in the current year.

Professional fees for the year ended December 31, 20242025 was $96,036 compared to $138,876 for the year ended December 31, 2024, compareda to $91,171 for the year endeddecrease December 31, 2023, an increase of $47,705,$42,840, or 52%.30.85%. Professional fees consisted of legal fees and accounting fees, which increased decreased primarily due to increaseddecreased accounting fees incurred as we expanded operations during the current year.

Property taxes for the year ended December 31, 20242025 was $228,268,$270,614 compared to $191,018$228,268 for the year ended December 31, 2023,2024, an increase of $37,250, $42,346, or 20%.18.55%. Property taxes increased primarily due to acquiring sixfour new residential properties during 2024.2025.

Repairs and maintenance for the year ended December 31, 20242025 was $143,280,$231,422 compared to $435,282$143,280 for the year ended December 31, 2023,2024, an increase a decrease of $292,002,$88,142, or 67%.61.52%. Repairs and maintenance decreasedexpense increased due to extensivemore repairs andon maintenance oncertain properties incurred in the prior year that did not need to be replicated induring the current year.period.

Depreciation for the year ended December 31, 20242025 was $215,006,$271,681 compared to $197,759$215,006 for the year ended December 31, 2023,2024, an increase of $17,247,$56,675, or 9%.26.36%. Depreciation increased primarily due to increased building and capital improvements resulting from the acquisition of sixfour new properties during 2024.2025.

Other expenses for the year ended December 31, 20242025 were $1,309,352,$1,482,397 compared to other expenses of $1,019,279$1,309,352 for the year ended December 31, 31, 2023.2024. Other expense during the year ended December 31, 2025 consisted of $ 25,966 of dividends expense, $1,476,460 of interest expense, a loss of $26,716 on the early extinguishment of debt, $43,500 of consulting income, and $2,764 of other income. Other expenses for the year ended December 31, 2024 consisted of $26,020 of dividends expense, $1,209,530 of interest expense and a loss of $73,802 on the early extinguishment of debt. Other expenses for the year ended December 31, 2023 consisted of $25,949 of dividends expense and $993,330 of interest expense.

Our net loss for the year ended December 31, 20242025 was $186,237,$551,442 compared to a net loss of $275,332$186,237 for the year ended December 31, 2023,2024, an a decreaseincrease of $89,095,$365,205, or 32%.196.10%. Our net loss decreasedincreased primarily due to lessseveral properties not being rented, increased tenants behind on rent, more repairs and maintenance on properties and increased rental revenue resulting from the acquisition of sixfour new properties during 2024, as partially offset by increased finance costs on those same properties.2025.

As of December 31, 2024,2025, the Company had current assets of $14,262,$124,579, consisting of cash of $9,799$52,071 and accounts receivable of $4,463.$64,178 and prepaid expenses of $8,330. The Company’s current liabilities as of December 31, 20242025 were $2,596,857,$2,561,452, consisting of $4,982 $34,655 of accounts payable, $27,875$40,189 of advanced rents received, $87,366$257,229 of accrued interest, $96,440$197,568 of security deposits payable, $474,271 amounts due to related parties, 1,700,440 1,326,091 of current maturities of mortgages payable and $205,483$231,449 of dividends payable.

On OctoberMay 23,8, 2024,2025, the Company, through its subsidiary, MopaneElata Investments, LLC (“Mopane”),LLC, closed on the acquisition of the real property located at 11001650 S W.Rimpau 48th StreetBlvd. in Los Angeles. The property was vacant at the time of purchase. The acquisition was for $650,000. TermsThe ofElata thepurchase is acquisitionsubject areto two loans as follows: (1) $487,500$520,000 first position note issuedowing by Elata to Property Owner, Mopane, owing to lender, Investor Mortgage Finance, LLC,LLC (“Investor Mortgage”), bearing interest on unpaid principal at the rate of 6.30%7.125% per annum. Principal and interest payable in monthly installments of $3,017$3,503.34 or more commenced on DecemberJuly 1, 20242025 and continuescontinue until NovemberJune 1, 2054,2055, at which time the entire principal balance together with with interest due thereon, shall become due and payable. (2) A $200,000$250,000 second position note owedowing by MopaneElata to Belladonna LilyJacaranda3 Investments, Inc. Inc. (“BelladonnaJacaranda3”), bearingwhose terms of payments due were interest only, payable on unpaid principal at the rate of 6.00%8.00% per annum. Interest only payable in monthly installments of $1,000 are$1,333 dueor more on the 1st day of each month beginning on Novemberthe 1,1st day of September 2024 and continuing until the 31st day of December 31, 2029, at which time the entire principal balance together with interest due thereon, shall become due and payable.

On AugustJune 20,2, 2024,2025, the Company, through its subsidiary, Mopane,Elata Investments, LLC, closed on the acquisition of the real property located at 1434 802W. E.22nd 25th Street in Los Angeles. The property was vacant at the time of purchase. The acquisition was for $650,000.$640,000. TermsThe Elata ofpurchase theis acquisition aresubject to two loans as follows: (1) $520,000$512,000 first position note issuedowing by Elata to Mopane,Vontive, owingInc. to LendingOne, (“Vontive”), bearing interest on unpaid principal at the rate of 6.71%7.5% per annum. Principal and interest payable in monthly installments of $3,359, $3,579.98 or more,more commenced on OctoberJuly 1, 20242025 and continues continue until SeptemberJune 1, 2054,2055, at which time the entire principal balance together with interest due thereon, shall become due and payable, and apayable. (2) $150,000A $183,200 second position note owedowing by MopaneElata to Belladonna,Jacaranda3 bearingInvestments, Inc. (“Jacaranda3”), whose terms of payments due were interest only, payable on unpaid principal at the rate of 6.00%8.00% per annum. Interest only payable in monthly installments of $750$1,221.33 areor duemore on the 1st day of each month beginning on Augustthe 1,1st 2024day of July 2025 and continuing until the 31st day of December 31, 2029, at which time the entire principal balance together with interest due thereon, shall become due and payable.

On JuneAugust 20,14, 2024,2025, wethe completed an acquisition,Company, through ourits subsidiary, Mopane,Elata Investments, LLC, closed on the acquisition of the real property located at 1457417 W.W 35th Street52nd Place in Los Angeles. The property was vacant at the time of purchase. The acquisition was for $710,000.$525,000. TermsThe ofElata thepurchase is acquisition aresubject to one loan as follows: (1) A$472,500 first position note with payment on principal balance of $599,750 issued by Mopane, owing to lender, Churchill Funding I, LLC, bearing interest at 10% per annum, based on a 30/360 day year. The Company has an additional $25,000 of credit available to them pursuant to a construction hold back. Interest only payable in monthly installments of $4,998, or more, commenced on August 1, 2024 and continue until July 1, 2025, at which time the entire principal balance together with interest due thereon, shall become due and payable. (2) A $130,000 second position note owing by MopaneElata to Belladonna,Center whoseStreet termsLending ofVIII paymentsSPE, dueLLC were(“Center Street”), bearing interest only, payable on unpaid principal at the rate of 6%9.990% per annum. Interest only payable in monthly installments of $650, $3,933.56 or more,more commenced on theOctober 1st1, day of each month beginning on the 1st day of July 20242025 and continuingcontinue until theAugust 30th8, day2026, of June 2029, at which time the entire principal balance together with interest due thereon, shall become due and payable.

On MaySeptember 7,24, 2024,2025, wethe completed an acquisition,Company, through ourits subsidiary, Mopane,Elata Investments, LLC, closed on the acquisition of the real property located at 47001460 S.Exposition BudlongBlvd. Avenue in Los Angeles. The property was vacant at the time of purchase. The acquisition was for $649,000.$520,000. TermsThe ofElata purchase theis acquisitionsubject areto one loan as follows: (1) A$468,000 first position note with payment on principal balance of $544,150 issuedowing by the Property Owner, Mopane, owingElata to lender,Center Center Street Lending VIII SPR,SPE, LLC,LLC (“Center Street”), bearing interest on unpaid principal at the rate of 10.99%9.990% per annum,annum. basedInterest on a daily rate of 360 days per year. The Company has an additional $50,000 of credit available to them pursuant to a construction hold back. The loan isonly payable in monthly interest only installments of $4,984, $3,896.10 or more,more startingcommenced on JulyNovember 1, 2024,2025 and continuingcontinue until AprilSeptember 15,17, 2025,2026, at which time the entire principal balance together with interest due thereon, shall become due and payable. (2) A $175,000 second position note owing by Mopane 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 $875, or more, on the 1st day of each month beginning on the 1st day of May 2024 and continuing until March 31, 2029, at which time the entire principal balance together with interest due thereon, shall become due and payable.

On JuneFebruary 14,5, 2024,2025, the first and second notenotes for 21151457 PortlandW 35th Street waswere refinanced for $993,750 $720,000 with AmeritrustInvestor Mortgage Mortgage,Finance, Corp.,LLC, bearing interestwhose terms of payments due are principal and interest, on unpaid principal at the rate of 7.25% 7.050% per annum. Principal and interest payable in monthly installments of $6,779, $4,814 or more, commencedmore starting on AugustApril 1, 2024,2025, and continuecontinuing until Julythe 1,1st day of 2054,March 2055, at which time the entire principal balance together with interest due thereon, shall become due and payable.

On March 16,5, 2024,2025, the first note for 17331460 W.N 37thEastern PlaceAvenue was refinanced for $595,000 $661,500 with Investor Mortgage Finance,LendingOne, LLC, bearingwhose interestterms of payments due are principal and interest, on unpaid principal at the rate of 7.225%7.45% per annum. Principal and interest payable in monthly installments of $4,049$4,603 or commencedmore starting on May 1, 2024,2025, and continue continuing until the 1st day of April 1, 2054,2055, at which time the entire principal balance together with interest due thereon, shall become due and payable.

As of MarchJune 31,30, 2026, our balance of cash on hand was $151,782,$108,704, and we had negative working capital of $1,425,714$1,476,662 and an accumulated accumulated deficit of $3,030,759.$3,323,134. We expect to incur further losses in the development of its business; therefore, we may not have sufficient funds to sustain our operations for the next twelve months and we may need to raise additional cash to fund our operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. In the event revenues do not materialize at the expected rates, management would seek additional financing and would attempt to conserve cash by further reducing expenses. There can be no assurance that we will be successful in achieving these objectives.

Results of Operations for the Three Months Ended MarchJune 31,30, 2026 and 2025

The following table summarizes selected items from the statement of operations for the three months ended MarchJune 31,30, 2026 and 2025, respectively.

Our revenues increaseddecreased to $593,738$504,556 for the three months ended MarchJune 31,30, 2026, compared to $383,512$576,427 for the three months ended MarchJune 31,30, 2025, a an increasedecrease of $210,226,$71,871, or 55%..12%. The increasedecrease is primarily due to havinghigher less vacancies thisand lower advance rent collections during the current quarter as compared to the prior year quarter.

General and administrative expenses for the three months ended MarchJune 31,30, 2026 was $50,526, $55,163, compared to $59,273$98,716 for the three months ended March 31,June 30, 2025, a decrease of $8,747,$43,553, or 15%.44%. General and administrative expenses decreased primarily due to lesslower administrationadministrative needs.and overhead costs during the current period.

Salaries and benefits expenses for the three months ended MarchJune 31,30, 2026 was $16,500,$19,650, compared to $15,600$19,075 for the three months ended March 31,June 30, 2025, an increase of $900,$575, or 6%.3%. Salaries and benefits increased due to Tracyroutine Blackcompensation Van Wier’s salary increase.adjustments.

Utilities expense for the three months ended MarchJune 31,30, 2026 was $15,218,$7,324, compared to $9,276$12,157 for the three months ended MarchJune 31,30, 2025, ana increase decrease of $5,942,$4,833, or 64%..40%. Utilities expense increaseddecreased due to lessmore tenants paying the Company for their own utilities.utilities directly during the current period.

Professional fees expense for the three months ended MarchJune 31,30, 2026 was $25,783,$29,305, compared to $35,224$37,567 for the three months ended MarchJune 31,30, 2025, a decrease of $9,441,$8,262, or 27%.22%. Professional fees consisted of legal, audit and accounting fees, which decreased primarily due to lesslower accounting fees.

Property tax expense for the three months ended MarchJune 31,30, 2026 was $73,888,$85,699, compared to $46,600$73,960 for the three months ended MarchJune 31,30, 2025, an increase of $27,288,$11,739, or 59%.16%. The increase is due to acquiring more properties.

Repairs and maintenance expense for the three months ended MarchJune 31,30, 2026 was $88,087,$146,613, compared to $107,992$47,990 for the three months ended MarchJune 30, 31, 2025, aan decreaseincrease of $19,905,$98,623, or 18%.206 %. Repairs and maintenance expense decreasedincreased due to lessadditional renovations and property upkeep performed during the current period.

Depreciation expense for the three months ended MarchJune 31,30, 2026 was $73,492,$73,596, compared to $61,745$64,794 for the three months ended MarchJune 31,30, 2025, an increase of $11,747,$8,802, or 19%.14%. Depreciation expense increased during the current period due to properties that were purchased in the prior year.

Other expense for the three months ended MarchJune 31,30, 2026 was $422,421,$379,581, compared to $370,362$353,510 for the three months ended MarchJune 31,30, 2025, an increase of $52,059,$26,071, or 14%.7%. During the three months ended MarchJune 31,30, 2026, other expense consisted of $6,416$6,487 of dividends expense, $396,003 of interest expense,expense and a $20,002 loss on early extinguishment$373,094 of interest debt related to the refinancing of two of our mortgages.expense. Other expense consisted of $6,398$6,469 of dividends expense, $353,842$362,380 of interest expense, and a $10,229 loss on early extinguishment$13,100 of debtconsulting related to the refinancingincome, $249 of oneinterest income, and $1,990 of ourother mortgagesincome during the three months ended March 31,June 30, 2025. Other expense increased primarily due to increased interest rates and our lossexpense on earlymortgages extinguishment of debt incurredpayable during the current period.

Net loss for the three months ended MarchJune 31,30, 2026 was $172,177,$292,375, compared to $322,560 $131,342 for the three months ended MarchJune 31,30, 2025, aan decrease increase of $150,383,$161,033, or 47%.123 %. The decreasedincreased net loss was primarily due to increased decreased rental revenuesrevenue and increased repairs and maintenance expense during the current period.

The following table summarizes our total current assets, liabilities and working capital as of MarchJune 31,30, 2026 and December 31, 2025.

As shown in the accompanying condensed consolidated financial statements, as of MarchJune 31,30, 2026, the Company has incurred recurring losses from operations resulting in an accumulated deficit of $3,030,759,$3,323,134, with negative working capital of $1,425,714$1,476,662 and cash on hand of $151,782,$108,704, which may not be sufficient to sustain operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management is actively working to increase occupancy rates to increase revenues. In addition, the Company is currently seeking additional sources of capital to fund short term operations. Management believes these factors will contribute to achieving profitability. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. These condensed consolidated financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classifications of liabilities, that might be necessary should the Company be unable to continue as a going concern.

Comparison of the ThreeSix Months Ended MarchJune 31,30, 2026 and the ThreeSix Months Ended MarchJune 31,30, 2025

Net cash used in operating activities was $60,067$81,970 for the threesix months ended MarchJune 31,30, 2026, compared to $128,846$68,680 of net cash used in operating activities for the threesix months ended MarchJune 31,30, 2025, aan decreaseincrease of $68,779,$13,290, or 53%.19%. The decreaseincrease was primarily due to anthe increasedtiming netof collections loss.and payments on working capital accounts during the current period.

Net cash used in investing activities was $15,357$17,857 for the threesix months ended March 31,June 30, 2026, compared to $65,538$476,339 for the threesix months ended March 31,June 30, 2025, a decrease of $50,181,$458,482, or 77%.96%. This decrease was primarily attributable to reduced capital improvement costs incurred during the current period, compared to the prior period.

Net cash provided by financing activities was $175,135$156,460 for the threesix months ended MarchJune 31,30, 2026, compared to net cash used in financing activities of $238,247$582,102 for the threesix months ended June March 31,30, 2025, a decrease of $63,112,$425,642, or 26%.73%. Our decreased cash provided inby financing activities was primarily due to decreased proceeds received on debt financing received during the current period.

Our financial results are affected by the selection and application of accounting policies and methods. In the three-monthsix-month period ended MarchJune 31,30, 2026 there were no changes to the application of critical accounting policies disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.