Victory Commercial Management Inc.

CIK:0001723083|SEC Filings

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenues
Total revenues	$ 1,251,165	$ 1,905,927	$ 4,365,571	$ 6,290,572
Operating expenses
Selling expenses	910,644	1,005,786	2,805,511	3,354,594
Depreciation and amortization	267,511	286,870	821,393	933,200
Payroll and payroll related expenses	301,033	511,588	928,317	1,538,913
Business taxes	147,654	88,207	380,569	353,050
Lease expenses	101,197	213,353	221,319	535,828
Other general and administrative expenses	270,857	112,036	613,743	4,126,937
Total operating expenses	1,998,896	2,217,840	5,770,852	10,842,522
Loss from operations	(747,731)	(311,913)	(1,405,281)	(4,551,950)
Other income (expense)
Interest income	111,414	188,567	383,941	567,051
Interest - loans	(1,057,828)	(1,025,456)	(3,068,086)	(3,123,950)
Interest - ROU and other capitalized liabilities	(516,962)	(845,230)	(1,605,977)	(2,161,277)
Interest - related parties	(136,709)	(134,708)	(403,102)	(403,084)
Gain (loss) from foreign currency transactions	889,236	(894,885)	521,250	(876,527)
Other income	2,646	268,247	40,488	277,617
Total other (expense), net	(708,203)	(2,443,465)	(4,131,486)	(5,720,170)
Loss before provision for income taxes	(1,455,934)	(2,755,378)	(5,536,767)	(10,272,120)
Provision for income taxes
Net loss	(1,455,934)	(2,755,378)	(5,536,767)	(10,272,120)
Net loss attributable to noncontrolling interest	(237,636)	(280,798)	(1,021,828)	(1,304,426)
Net loss attributable to the Company's common shareholders	$ (1,218,298)	$ (2,474,580)	$ (4,514,939)	$ (8,967,694)
Per Common Share - basic and diluted:
Net loss per Company's common share	$ (0.06)	$ (0.11)	$ (0.21)	$ (0.42)
Weighted-average shares outstanding, basic and diluted	21,711,000	21,711,000	21,711,000	21,392,516
Comprehensive income (loss)
Net loss	$ (1,455,934)	$ (2,755,378)	$ (5,536,767)	$ (10,272,120)
Other comprehensive income (loss)
Foreign currency translation adjustments	(7,535,417)	7,631,329	(4,768,724)	7,328,500
Comprehensive (loss) income	(8,991,351)	4,875,951	(10,305,491)	(2,943,620)
Comprehensive (loss) income attributable to non-controlling interest	(1,661,578)	1,395,120	(1,865,868)	1,366,711
Comprehensive (loss) income attributable to the Company's common shareholders	(7,329,773)	3,480,831	(8,439,623)	(4,310,331)
Rental Income [Member]
Revenues
Total revenues	434,145	693,315	1,408,607	2,260,812
Management Fee Income [Member]
Revenues
Total revenues	706,080	1,025,752	2,617,681	3,506,200
Other Income [Member]
Revenues
Total revenues	$ 110,940	$ 186,860	$ 339,283	$ 523,560

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash Flows from Operating Activities:
Net loss	$ (5,536,767)	$ (10,272,120)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	820,893	933,200
Amortization of debt issuance costs	40,942	41,552
Foreign currency exchange loss (gain) on loan and interest repayments to related party	(521,250)	876,527
Gain on disposal of fixed assets		(1)
Allowance for doubtful accounts	(21,489)	3,090,057
Non cash operating lease expenses	(1,822)	(4,212)
Changes in operating assets and liabilities
Decrease (increase) in tenant and sundry receivables	221,234	(25,264)
Decrease in prepaid expense and other assets	79,704	85,745
Increase in short-term loan interest receivable	(383,718)	(353,814)
Increase in SML interest payable	1,591,610	1,887,405
Increase in accounts payable and accrued liabilities	5,266,319	3,706,529
(Decrease) increase in deferred rental income	(177,146)	183,030
Increase in interest payable to related party	402,507	402,251
Increase (decrease) in other payables	193,365	(187,117)
Decrease in lease liabilities payable	(6,175)	(185,389)
Increase in property financing agreements payable	14,367
Net Cash Provided By Operating Activities	1,982,574	178,379
Cash Flows from Investing Activities:
Capital expenditures - fixed assets and improvements		(14,721)
Repayment (advances) of loan receivable	2,800,722	(2,642,563)
Net Cash Provided by (Used in) Investing Activities	2,800,722	(2,657,284)
Cash Flows from Financing Activities:
Proceeds from bank loans	114,970	1,491,385
Proceeds from initial public offering		1,011,000
Repayment from short-term loan receivable		1,955,460
Repayment of bank loans	(27,098)	(267,879)
Advance from shareholder	878,412	1,354,389
Advance from related individual	170,000	172,000
Repayment of property financing agreements payable	(5,928,686)	(3,171,218)
Net Cash (Used in) Provided by Financing Activities	(4,792,402)	2,545,137
Effect of exchange rate changes on cash and cash equivalents	2,485	(74,173)
Net decrease in cash, cash equivalents and restricted cash	(6,621)	(7,941)
Cash, cash equivalents and restricted cash at beginning of periods	150,107	319,120
Cash, cash equivalents and restricted cash at end of periods	143,486	311,179
Reconciliation of Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents at beginning of periods	122,884	188,921
Restricted cash at beginning of periods	27,223	130,199
Cash, cash equivalents and restricted cash at beginning of periods	150,107	319,120
Cash and cash equivalents at end of periods	143,486	195,404
Restricted cash at end of periods		115,775
Cash, cash equivalents and restricted cash at end of periods	143,486	311,179
Supplemental Disclosure Cash Flow Information:
Interest		968,074
Income tax
Non-cash Investing and Financing Activities:
Right of use assets and lease liabilities payable	$ 310,492	$ 232,631

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2020	Dec. 31, 2019
CURRENT ASSETS :
Cash and cash equivalents	$ 143,486	$ 122,884
Restricted cash		27,223
Tenant and sundry receivables, net of allowance for doubtful accounts	274,661	469,317
Prepaid expenses and other assets	453,980	526,834
Loan and interest receivable, net	3,757,703
TOTAL CURRENT ASSETS	4,629,830	1,146,258
Rental properties, net	21,110,734	21,334,015
Property and equipment, net	320,456	430,063
Intangible assets, net	14,077	17,640
ROU assets, net	310,492	484,178
Loan and interest receivable, net		6,087,914
TOTAL ASSETS	26,385,589	29,500,068
CURRENT LIABILITIES:
Bank loans payable, net (in default)	7,804,377	7,633,412
Bank loans payable, net	60,745,053	59,288,001
Accounts payable and accrued liabilities	14,537,916	8,938,941
Deferred revenue	3,787,436	3,882,434
Property financing agreements payable-current	43,039,265	41,993,450
Lease liabilities payable-current	178,294	22,755
TOTAL CURRENT LIABILITIES	130,092,341	121,758,993
Property financing agreements payable-non current	31,739,375	35,471,331
Lease liabilities payable-non current	161,618	498,509
Other payables	20,567,199	19,906,698
Loans payable to related parties	12,904,295	11,934,791
Due to shareholder	66,556,694	65,931,644
Interest payable to related parties	12,192,065	11,520,609
TOTAL LIABILITIES	274,213,587	267,022,575
Commitments and Contingencies
DEFICIT:
Common stock, $0.0001 par value, 600,000,000 shares authorized; 21,711,000 shares issued and outstanding at September 30, 2020 and December 31, 2019	2,171	2,171
Paid-in capital	11,827,188	11,827,188
Subscription receivable
Accumulated deficit	(208,323,288)	(203,808,349)
Accumulated other comprehensive loss	(6,167,413)	(2,242,729)
Total stockholders' deficit attributable to the Company's common shareholders	(202,661,342)	(194,221,719)
Noncontrolling interest	(45,166,656)	(43,300,788)
TOTAL DEFICIT	(247,827,998)	(237,522,507)
TOTAL LIABILITIES AND DEFICIT	$ 26,385,589	$ 29,500,068