Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 09, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | SITESTAR CORP | |
Entity Central Index Key | 1,096,934 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Trading Symbol | SYTE | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 282,830,163 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash and cash equivalents | $ 151,867 | $ 2,607,370 |
Accounts receivable, net | 481,123 | 212,751 |
Investments, at fair value | 133,989 | 599,500 |
Other current assets | 135,248 | 2,554,861 |
Total current assets | 902,227 | 5,974,482 |
Real estate - held for resale | 337,481 | 1,399,280 |
Real estate - held for investment, net | 502,368 | 506,011 |
Property and equipment, net | 371,497 | 143,464 |
Goodwill, net | 1,991,994 | 1,553,745 |
Note receivable | 226,000 | |
Non-current investments, at fair value | 12,067,983 | |
Other assets | 69,625 | 264,250 |
Total noncurrent assets | 15,566,948 | 3,866,750 |
Total assets | 16,469,175 | 9,841,232 |
Current Liabilities | ||
Deferred revenue | 239,748 | 214,898 |
Notes payable, current | 449,363 | 240,000 |
Accounts payable | 180,692 | 77,918 |
Accrued bonus | 110,000 | 51,855 |
Accrued expenses | 108,294 | 71,532 |
Total current liabilities | 1,088,097 | 656,203 |
Notes payable | 209,272 | 25,000 |
Total long-term liabilities | 209,272 | 25,000 |
Total liabilities | 1,297,369 | 681,203 |
Stockholders' equity | ||
Preferred stock, $0.001 par value, 30,000,000 shares authorized; none issued | ||
Common stock, $0.001 par value, 300,000,000 shares authorized; 294,526,821 and 204,152,616 shares issued; 282,830,163 and 190,230,163 shares outstanding | 294,527 | 204,152 |
Additional paid-in-capital | 23,538,493 | 19,096,858 |
Treasury stock, at cost, 11,696,658 and 13,822,453 common shares | (544,571) | (637,561) |
Accumulated other comprehensive (loss) income | (16,928) | 39,343 |
Accumulated deficit | (8,099,715) | (9,542,763) |
Total stockholders' equity attributable to Sitestar Corporation Stockholders | 15,171,806 | 9,160,029 |
Total stockholders' equity | 15,171,806 | 9,160,029 |
Total liabilities and stockholders' equity | $ 16,469,175 | $ 9,841,232 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Statement Of Financial Position [Abstract] | ||
Preferred Stock Par Value | $ 0.001 | $ 0.001 |
Preferred Stock Shares Authorized | 30,000,000 | 30,000,000 |
Preferred Stock Shares Issued | 0 | 0 |
Common Stock Par Value | $ 0.001 | $ 0.001 |
Common Stock Shares Authorized | 300,000,000 | 300,000,000 |
Common Stock Shares Issued | 294,526,821 | 204,152,616 |
Common Stock Shares Outstanding | 282,830,163 | 190,230,163 |
Common Shares Treasury Stock | 11,696,658 | 13,822,453 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Revenues - internet operations | $ 314,202 | $ 355,384 | $ 977,629 | $ 1,068,283 |
Revenues - HVAC | 1,332,239 | 906,910 | 3,526,913 | 939,932 |
Revenues - real estate | 324,044 | 404,923 | 1,216,190 | 1,992,371 |
Revenues - asset management | 715,598 | 1,320,808 | ||
Total revenues | 2,686,083 | 1,667,217 | 7,041,540 | 4,000,586 |
Cost of revenues - internet operations | 81,144 | 70,290 | 237,098 | 290,043 |
Cost of revenues - HVAC | 875,991 | 619,881 | 2,307,902 | 633,053 |
Cost of revenues - real estate | 306,537 | 402,285 | 1,264,602 | 1,918,603 |
Total cost of revenues | 1,263,672 | 1,092,456 | 3,809,602 | 2,841,699 |
Gross profit - internet operations | 233,058 | 285,094 | 740,531 | 778,240 |
Gross profit - HVAC | 456,248 | 287,029 | 1,219,011 | 306,879 |
Gross profit (loss) - real estate | 17,507 | 2,638 | (48,412) | 73,768 |
Gross profit - asset management | 715,598 | 1,320,808 | ||
Total gross profit | 1,422,411 | 574,761 | 3,231,938 | 1,158,887 |
Selling, general and administrative expenses | 606,378 | 634,338 | 1,909,650 | 1,152,715 |
Total operating expenses | 606,378 | 634,338 | 1,909,650 | 1,152,715 |
Income from operations | 816,033 | (59,577) | 1,322,288 | 6,172 |
Other (expense) income, net | (8,877) | 93,779 | 120,760 | 98,350 |
Income before income taxes | 807,156 | 34,202 | 1,443,048 | 104,522 |
Net income | 807,156 | 34,202 | 1,443,048 | 104,522 |
Less: net income attributable to the noncontrolling interest | 14,102 | 16,955 | ||
Net income attributable to Sitestar Corporation stockholders | $ 807,156 | $ 20,100 | $ 1,443,048 | $ 87,567 |
Earnings per share, basic and diluted | $ 0 | $ 0 | $ 0.01 | $ 0 |
Weighted average number of shares, basic and diluted | 282,830,163 | 122,794,725 | 272,315,145 | 92,644,688 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income | $ 807,156 | $ 34,202 | $ 1,443,048 | $ 104,522 |
Other comprehensive income (loss), net of tax: | ||||
Change in foreign currency translation adjustments | (12) | (103) | ||
Change in unrealized gains related to available-for-sale securities: | ||||
Change in fair value of available-for-sale securities | 10,068 | (21,694) | 20,664 | 28,657 |
Adjustment for net (gains)/losses realized and included in net income | (76,935) | |||
Total change in unrealized gains/losses on available-for-sale securities | 10,068 | (21,694) | (56,271) | 28,657 |
Other comprehensive income (loss) | 10,068 | (21,706) | (56,271) | 28,554 |
Comprehensive income | 817,224 | 12,496 | 1,386,777 | 133,076 |
Less: comprehensive income attributable to the non controlling interest | 14,102 | 16,955 | ||
Comprehensive income (loss) attributable to Sitestar Corporation stockholders | $ 817,224 | $ (1,606) | $ 1,386,777 | $ 116,121 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) | Total | Common Stock | Additional Paid In Capital | Treasury Stock | Accumulated Other Comprehensive Income | Accumulated Deficit |
Beginning Balance, Amount (Scenario, Previously Reported) at Dec. 31, 2015 | $ 3,751,045 | $ 91,327 | $ 13,728,989 | $ (637,561) | $ 3,415 | $ (9,435,125) |
Beginning Balance, Amount at Dec. 31, 2015 | 3,751,045 | $ 91,327 | 13,728,989 | (637,561) | 3,415 | (9,435,125) |
Beginning Balance, Shares (Scenario, Previously Reported) at Dec. 31, 2015 | 77,404,010 | |||||
Beginning Balance, Shares (Restatement Adjustment) | 100,000 | |||||
Beginning Balance, Shares at Dec. 31, 2015 | 77,504,010 | |||||
Net (loss) income | (107,638) | (107,638) | ||||
Contributed capital, Amount | 5,480,694 | $ 112,825 | 5,367,869 | |||
Contributed capital, Shares | 112,826,153 | |||||
Loss on foreign exchange translation | (361) | (361) | ||||
Unrealized (loss) gain on investments | 36,289 | 36,289 | ||||
Ending Balance, Amount at Dec. 31, 2016 | $ 9,160,029 | $ 204,152 | 19,096,858 | (637,561) | 39,343 | (9,542,763) |
Ending Balance, Shares at Dec. 31, 2016 | 204,152,616 | 190,330,163 | ||||
Net (loss) income | $ 1,443,048 | 1,443,048 | ||||
Contributed capital, Amount | 4,625,000 | $ 92,500 | 4,532,500 | |||
Contributed capital, Shares | 92,500,000 | |||||
Unrealized (loss) gain on investments | (56,271) | (56,271) | ||||
Adjustment for share cancellation | $ (2,125) | (90,865) | 92,990 | |||
Ending Balance, Amount at Sep. 30, 2017 | $ 15,171,806 | $ 294,527 | $ 23,538,493 | $ (544,571) | $ (16,928) | $ (8,099,715) |
Ending Balance, Shares at Sep. 30, 2017 | 294,526,821 | 282,830,163 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 1,443,048 | $ 104,522 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Amortization | 55 | |
Depreciation | 82,309 | 23,236 |
Loss (gain) on sale of real estate | 42,938 | (213,454) |
Gain on sale of available-for-sale securities | (76,935) | |
Gain on non-current investments | (1,317,983) | |
Loss on disposal of vehicle | 8,110 | |
Bad debt expense | 15,281 | 4,383 |
Real estate valuation adjustment | 58,742 | |
(Increase) decrease in: | ||
Accounts receivable, net | (283,653) | (247,828) |
Other current assets | (80,387) | (21,888) |
Increase (decrease) in: | ||
Deferred revenue | 24,850 | (5,088) |
Accounts payable | 102,774 | 47,037 |
Accrued expenses | 94,907 | 94,313 |
Net cash flows from operating activities | 114,001 | (214,712) |
Cash flows from investing activities: | ||
Proceeds from sale of real estate held for sale | 683,832 | 1,568,699 |
Proceeds from sale of real estate held for investment | 137,475 | 344,850 |
Improvements to real estate held for sale | (100,596) | (180,708) |
Improvements to real estate held for investment | (17,542) | |
Proceeds from sale of marketable securities | 486,175 | |
Purchases of marketable securities | (2,486,403) | |
Proceeds from sale of domain names | 200,000 | |
Purchase of domain names | (56,250) | |
Purchase of property and equipment | (34,392) | |
Capitalized loan fees | (5,375) | |
Subsidiary acquisitions | (8,711,772) | (1,238,436) |
Net cash flows from investing activities | (7,344,653) | (2,065,790) |
Cash flows from financing activities: | ||
Principal payments on note payable | (277,088) | (90,000) |
Proceeds from notes payable | 427,237 | |
Proceeds from issuance of common stock | 4,625,000 | 3,854,719 |
Net cash flows from financing activities | 4,775,149 | 3,764,719 |
Net increase (decrease) in cash | (2,455,503) | 1,484,217 |
Cash and cash equivalents at beginning of the period | 2,607,370 | 184,731 |
Cash and cash equivalents at end of the period | 151,867 | 1,668,948 |
Non-cash supplemental information: | ||
Unrealized loss (gain) on marketable securities reported as other comprehensive income | 56,271 | 28,657 |
Issuance of note receivable on sale of real estate held for sale | 226,000 | |
Transfer of real estate held for resale to real estate held for investment | 125,000 | |
Transfer of real estate held for investment to real estate held for resale | 152,003 | |
Transfer of other current assets to investments | 2,500,000 | |
Adjustments to goodwill due to carryback obligations | 29,504 | |
HVAC equipment acquired through capital leases and debt obligations | 172,990 | |
HVAC acquisitions through notes payable | $ 100,000 | $ 240,000 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Organization and Significant Accounting Policies | NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Organization and Lines of Business Sitestar Corporation (formerly White Dove Systems, Inc., and then Interfoods Consolidated, Inc.) was incorporated in Nevada on December 17, 1992. On July 26, 1999, the Company restated its Articles of Incorporation to change the name of the Company to “Sitestar Corporation.” Unless the context otherwise requires, and when used in this Report, the “Company,” “Sitestar,” “we,” “our” or “us” refers to Sitestar Corporation and its subsidiaries. The Company operates through five reportable segments: Corporate, Internet Operations, HVAC Operations, Real Estate Operations, and Asset Management Operations. The management of the Company also continually reviews various investment opportunities, including in other lines of business. Corporate The corporate segment includes any revenue or expenses derived from corporate office operations as well as expenses related to public company reporting, the oversight of subsidiaries, and other items that affect the overall Company. Internet Operations The Company operates its internet segment through Sitestar.net, a wholly-owned subsidiary that offers consumer and business-grade internet access, wholesale managed modem services, web hosting, and various ancillary services. Sitestar.net provides services to customers in the United States and Canada. HVAC Operations The Company operates its HVAC segment through HVAC Value Fund, LLC. HVAC Value Fund is focused on the acquisition and management of HVAC and plumbing companies in Arizona and throughout the Southwest United States. As previously reported in our Current Report on Form 8-K filed with the SEC on June 14, 2016, the Company, along with JNJ Investments, LLC, an unaffiliated third party and member of HVAC Value Fund, LLC, organized and launched this subsidiary on June 13, 2016. Sitestar has a 100% voting interest in HVAC Value Fund and JNJ Investments has the ability to earn profit interests. Under the operating agreement, the Company has first claim to a portion of net income, with the remainder being allocated between the Company and JNJ Investments. JNJ Investments shall also be subject to a Loss Carryforward limitation in the event of a net loss. As of September 30, 2017, HVAC Value Fund had closed on six acquisitions for an aggregate purchase price of $2.02 million which includes estimated earn outs of approximately $350,000. As previously reported in our Current Report on Form 8-K filed with the SEC on June 14, 2016 and further described above, the purpose of HVAC Value Fund is to acquire HVAC and plumbing businesses. Accordingly, these six acquisitions were made in the ordinary course of business and consistent with the customs and practices (including with respect to nature, scope, magnitude, quantity, frequency and contemplated purpose) of HVAC Value Fund, and, in turn, the Company. Real Estate Operations Sitestar created a wholly-owned real estate subsidiary on July 10, 2017 named EDI Real Estate, LLC. Through EDI Real Estate, LLC, Sitestar owns a real estate investment portfolio that includes 10 residential properties, vacant land, and one commercial property. Our real estate portfolio is primarily focused in the Roanoke and Lynchburg areas of Virginia. The portfolio includes single family homes that are currently rented and managed through a third-party property manager, as well as vacant properties being prepared or currently listed for sale. Asset Management Operations Sitestar created a wholly-owned asset management subsidiary on October 10, 2016 named Willow Oak Asset Management, LLC (“Willow Oak”). As previously reported in our Current Reports on Form 8-K filed with the SEC on September 19, 2016 and December 30, 2016, respectively, the Company agreed to make a seed investment totaling $10 million through Willow Oak in Alluvial Fund, LP, an unrelated private investment partnership that was launched on January 1, 2017. Under the operating agreement included in the Form 8-K, the Company may not make any withdrawal from its Capital Account until its Capital Account balance exceeds $50,000,000 and any partial withdrawal may not reduce the Capital Account balance below $50,000,000. Additionally, a full withdrawal shall not be permitted prior to a date five years after the effective date of the accompanying Side Letter. As previously reported in our Current Reports on Form 8-K filed with the SEC on January 26, 2017, the Company also committed to make a capital contribution to Huckleberry Real Estate Fund II, LLC in the aggregate amount of $750,000. Under the operating agreement included in the Form 8-K, the Managing Member shall have sole discretion regarding the amounts and timing of Distributions to Members. The asset management segment did not produce revenue in 2016. Any expenses incurred in 2016 were allocated to the corporate segment. Starting January 1, 2017, all revenue earned and expenses incurred by this segment were allocated as such. Willow Oak signed a fee share agreement on May 11, 2017 with Lizard Head, LLC, the general partner of Bridge Reid Fund I, LP, an unrelated private investment partnership. Under the agreement, Willow Oak became a special limited partner to Bridge Reid, providing fund advisory services to Bridge Reid in exchange for payments equal to 33% of the management fees accrued quarterly by the general partner and 33% of the incentive fees accrued annually, on investors who become limited partners after May 11, 2017. Willow Oak signed a fee share agreement on June 13, 2017 with Coolidge Capital Management, LLC (“Coolidge”), whose sole member is Keith D. Smith, also a Sitestar director. Under the Agreement, Willow Oak and Coolidge are the sole members of Bonhoeffer Capital Management LLC, the general partner to Bonhoeffer Fund, LP, a private investment partnership. Under their agreement, Willow Oak pays all start-up and operating expenses that are not partnership expenses under the limited partnership agreement. Willow Oak receives 50% of all performance and management fees earned by the general partner. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries including: Sitestar.net, Inc., HVAC Value Fund, LLC, EDI Real Estate, LLC, and Willow Oak Asset Management, LLC. All intercompany accounts and transactions have been eliminated. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The unaudited condensed consolidated financial statements have been prepared by Sitestar Corporation, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments), which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual consolidated financial statements prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) have been omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 24, 2017 (the “2016 Form 10-K”). The results for the nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for the full year ending December 31, 2017. Use of Estimates In accordance with Accounting Principles Generally Accepted in the United State of America (GAAP), the preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates and judgments, including those related to fair value of investments, revenue recognition, accrued expenses, financing operations, goodwill valuation, other assets, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions. These accounting policies are described at relevant sections in the notes to the consolidated financial statements. Cash and Cash Equivalents For purposes of the statements of cash flows, the Company defines cash equivalents as all highly liquid instruments purchased with a maturity of three months or less. Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and accounts receivable. The Company places its cash with high quality financial institutions and, at times, may exceed the FDIC and CDIC insurance limit. The Company extends credit based on an evaluation of customers’ financial condition, generally without collateral. Exposure to losses on receivables is principally dependent on each customer’s financial condition. The Company monitors its exposure for credit losses and maintains allowances for anticipated losses. Investments The Company currently holds and makes investments in marketable securities through its corporate operations. Marketable securities held are classified as available-for-sale based on management’s intent. Unrealized gains (losses) are categorized as other comprehensive income. Realized gains (losses) on marketable securities are determined by specific identification. Interest is recognized on an accrual basis; dividends are recorded as earned on the ex-dividend date. The Company holds additional non-current investments through its asset management operations. Non-current investments do not qualify as available-for-sale securities. The classification of these investments is assessed upon purchase and reassessed at each reporting period. Non-current investments are marked to market at the end of each reporting period and revenue is recognized in the condensed consolidated statement of income in the period of adjustment. Accounts Receivable The Company grants credit in the form of unsecured accounts receivable to its customers. The estimate of the allowance for doubtful accounts, which is charged off to bad debt expense, is based on management’s assessment of current economic conditions and historical collection experience with each customer. Specific customer receivables are considered past due when they are outstanding beyond their contractual terms and are charged off to the allowance for doubtful accounts when an account is individually determined to be uncollectible. Sales of internet services, which are not automatically processed via credit card or bank account drafts, have been the Company’s highest exposure to collection risk. The Company attempts to reduce this risk by including a late payment fee and a manual processing payment fee to customer accounts. Receivables more than ninety days past due are no longer included in accounts receivable and are turned over to a collection agency. Accounts receivable more than 30 days are considered past due. Sales of HVAC services are typically paid via credit card or check upon completion of service. Sales that are not collected upon completion are generally to existing and repeat customers who have established a track record of timely payments. Historically, HVAC has not encountered issues with collectability of customer accounts. Accounts receivable more than 60 days are considered past due. Note Receivable The Company currently holds a note receivable from the sale of a real estate property to a third-party. This note is long term in nature and no collection issues are expected. Impairment of Long-Lived Assets In accordance with GAAP, long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The Company evaluates at each balance sheet date whether events and circumstances have occurred that indicate possible impairment. If there are indications of impairment, the Company uses future undiscounted cash flows of the related asset or asset grouping over the remaining life in measuring whether the assets are recoverable. In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value. Long-lived assets to be disposed are reported at the lower of carrying amount or fair value of the asset less cost to sell. Property and Equipment Property and equipment are recorded at cost. Depreciation is computed using the straight-line method based on estimated useful lives from three to seven years for equipment and vehicles, fifteen years for building improvements, and thirty-nine years for buildings. Assets held through capital leases are amortized over the life of the related lease. Expenditures for maintenance and repairs are charged to operations as incurred while renewals and betterments are capitalized. Gains and losses on disposals are included in the results of operations. Goodwill and Other Intangible Assets Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations accounted for under the acquisition method of accounting. The Company does not amortize goodwill. The Company tests its goodwill annually during the fourth quarter of its fiscal year or when events and circumstances indicate that those assets might not be recoverable. Impairment testing of goodwill is required at the reporting unit level (operating segment or one level below operating segment) and involves a two-step process. Prior to performing the two-step impairment test, the Company may make a qualitative assessment of the likelihood of goodwill impairment to determine whether a detailed quantitative analysis is required. The first step of the impairment test involves comparing the estimated fair values of the Company’s reporting units with the reporting units’ carrying amounts, including goodwill. The Company estimates the fair value of its reporting units using discounted expected future cash flows. If the carrying amount of the reporting unit exceeds its fair value, a second step is performed to compare the carrying amount of goodwill to the implied fair value of that goodwill. If the carrying amount of goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to the excess. The Company performs an analysis of its goodwill as of December 31 annually, or whenever events or changes in circumstances indicate that the assigned values may no longer be appropriate. No impairment was recorded in 2016. During the quarter ended September 30, 2017, a net downward adjustment of $14,504 was made to goodwill held through the HVAC segment. This adjustment was the result of two previous sellers not meeting or exceeding the operational terms of carryback notes that were previously included as consideration for these acquisitions. See Note 3 for more information. Other intangible assets consist of customer relationships, developed technology and software, trade names, and other assets acquired in conjunction with the purchases of businesses or purchases of assets from other companies. As of September 30, 2017, these intangible assets have been fully amortized. The remaining intangible assets consist of domain names attributed to the internet segment. When management determines material intangible assets are acquired in conjunction with the purchase of a business, the Company determines the fair values of the identifiable intangible assets by taking into account management’s own analysis and an independent third-party valuation specialist’s appraisal. Intangible assets determined to have definite lives are amortized over their estimated useful lives. The Company owns 634 domain names, of which 107 are available for sale. These domains are valued at historical cost. Real Estate Real estate properties held for resale are carried at the lower of cost or fair market value. All costs directly related to the improvement and carrying of real estate are capitalized, including renovations and property taxes, to the extent the capitalized costs of the property do not exceed the estimated fair value of the property. If the cost of the real estate exceeds the estimated fair value, the excess is charged to expense. Fair value is estimated based on comparable sales in the geographic area the real estate is located and tax assessed values. Fair value is evaluated annually by management, or when events or changes in circumstances indicate the carrying value of the real estate may not be recoverable. Real estate properties held for investment are carried at the cost basis plus additional expenses where the expense extended the life or added value to the property. Otherwise, the expense is not capitalized and is charged to expense. Properties categorized as real estate held for investment are not expected by management to be sold in the next 12 months. This determination is periodically reviewed by management. Accrued Bonus Accrued bonuses represent performance based incentives that have not yet been paid. These bonus amounts are paid annually after financial records are finalized. Other Accrued Expenses Other accrued expenses represent incurred but not yet paid expenses from Sales and Use taxes for ISP services, vacation accruals, professional fees, and other payroll accruals. Deferred Revenue Deferred revenue represents collections from customers in advance of internet services to be performed. Revenue is recognized in the period service is provided. Revenue Recognition Internet Operations The Company sells internet services under annual and monthly contracts. Under the annual contracts, the subscriber pays a one-time annual fee, which is recognized as revenue ratably over the life of the contract. Under the monthly contracts, the subscriber is billed monthly and revenue is recognized for the period to which the service relates. Sales of computer hardware are recognized as revenue upon delivery and acceptance of the product by the customer. Sales are adjusted for any returns or allowances. The Company generates revenue in its internet segment from consumer and business-grade internet access, wholesale managed modem services for downstream ISPs, web hosting, and various ancillary services in the United States and Canada. Services include narrow-band (dial-up and ISDN) and broadband services (DSL, fiber-optic and wireless), web hosting, and additional related services to consumers and businesses. Customers may also subscribe to web hosting plans to include email access and storage. Internet revenue is affected by the changing composition of revenue sources. In some years, this shift can be significant. HVAC Operations The Company performs HVAC and plumbing service repairs and installs HVAC units for its customers. Revenue is recognized at the time of the installation or service call. Sales are adjusted for any returns or allowances. A return or allowance situation would arise based on the two-year workmanship warranty that typically conveys with the installation of a new unit. There is also a two-year warranty on newly installed parts and equipment that is honored by the manufacturer. If an installation is performed over multiple days, it is accounted for using work in process (WIP) accounting in accordance with GAAP. If payment is not provided in advance or at the time of service or installation, the amount due is designated as an account receivable. Real Estate Operations Revenue from real estate held for resale is recognized upon closing of the sale, as all conditions for full revenue recognition have been met at that time. All costs associated with the property sold are removed from the consolidated balance sheets and charged to cost of revenue at that time. Rental revenue from real estate held for investment is recognized when it is due, generally on the first of each month or at another regular period agreed upon between the Company and the tenant. If payments are not provided in a timely manner, the amount due is designated as an account receivable. Accounts receivable from rental revenue are generally considered unrecoverable after 90 days unless the Company reasonably believes that recovery is probable. Tenants generally provide a security deposit at the time of possession. This deposit is held separate from revenue and only applied to revenue when rental payment comparable to the security deposit amount is not provided in a timely manner and considered unlikely to be recovered. Otherwise, the security deposit is returned in a timely manner after the property is surrendered back to the Company. Asset Management Operations The Company earns revenue from investments held through the asset management segment through various fee share agreements as well as through realized and unrealized gains and losses. Management fees earned are recorded and paid out monthly and are included in revenue on the condensed consolidated statement of income. Performance fees earned are accrued monthly, paid out yearly and are also included in revenue on the condensed consolidated statement of income. As non-current investments do not quality as available-for-sale securities, non-current investments are marked to market at the end of each reporting period. Realized and unrealized gains and losses are recognized as revenue in the period of adjustment. Income Taxes Income taxes are accounted for under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Income Per Share The basic income per common share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding. Diluted income per common share is computed similar to basic income per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company has no potentially dilutive securities. Other Comprehensive Income Other comprehensive income is the result of two items: the impact of foreign currency translations related to the Company’s operations in Canada, and the unrealized gains (losses) from marketable securities classified as available-for-sale. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, “Leases” (Topic 842). The guidance in ASU 2016-02 supersedes the lease recognition requirements in ASC Topic 842, Leases. ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is required to adopt this standard in the first quarter of 2019. The Company is currently evaluating the effect this standard will have on its Consolidated Financial Statements. In August 2015, the FASB issued ASU No. 2015-14, which defers the effective date of ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” by one year. As a result, the ASU is now effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. ASU No. 2014-09 provides comprehensive guidance on the recognition of revenue from customers arising from the transfer of goods and services. The ASU also provides guidance on accounting for certain contract costs, and requires new disclosures. Early adoption is not permitted. The Company is required to adopt this standard in the first quarter of 2018. In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes” (Topic 740). The ASU provides guidance related to the classifications of deferred income tax assets and liabilities into current and noncurrent amounts in a classified statement of financial position. Deferred tax assets and liabilities are classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. Deferred tax assets and liabilities that are not related to an asset or liability for financial reporting are classified according to the expected reversal date of the temporary difference. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted. The Company is required to adopt this standard in the first quarter of 2018. The initial application of the standard is not expected to significantly impact the Company. In January 2016, the FASB issued ASU No. 2016-01 "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." Although the ASU retains many of the current requirements for financial instruments, it significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated with the fair value of financial instruments. The ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017; earlier adoption is permitted under certain criteria. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial condition, results of operations, and cash flows. In January 2017, the FASB issued ASU No. 2017-04 “Simplifying the Test for Goodwill Impairment”. The guidance eliminates the requirement to calculate “implied fair value of goodwill” (previously Step 2) from the goodwill impairment analysis. Companies are required to calculate the impairment of their goodwill based solely on the excess of the carrying value of the reporting unit over its fair value (previously Step 1). Companies are still allowed to perform an initial qualitative assessment for a reporting unit to determine if the quantitative assessment is necessary. This guidance is required to be adopted in fiscal years beginning after December 15, 2019 and early adoption is permitted. The Company will adopt this new guidance for its 2017 goodwill impairment analysis. |
Business Conbinations or Acquis
Business Conbinations or Acquisitions | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Business Conbinations or Acquisitions | NOTE 3. BUSINESS CONBINATIONS OR ACQUISITIONS As of June 17, 2016 and June 30, 2016, HVAC Value Fund completed the 100% acquisition of two HVAC subsidiaries. As of July 8, 2016, HVAC Value Fund completed the 100% acquisition of a third subsidiary. As of July 15, 2016, HVAC Value Fund completed the 100% acquisition of a fourth subsidiary. As of October 1, 2016, HVAC Value Fund completed the 100% acquisition of a fifth subsidiary. As of January 20, 2017, HVAC Value Fund completed the 100% acquisition of a sixth subsidiary. These subsidiaries engage in providing heating, ventilation, plumbing, and air conditioning services, installation, and repairs to residential and commercial customers. As a result of the acquisitions, HVAC Value Fund offers heating, ventilation, plumbing, and air conditioning services to customers in Arizona and the surrounding southwestern states. As previously reported in our Current Report on Form 8-K filed with the SEC on June 14, 2016 and described further herein, the purpose of HVAC Value Fund is to acquire HVAC and plumbing businesses. Accordingly, these six acquisitions were made in the ordinary course of business and consistent with the customs and practices (including with respect to nature, scope, magnitude, quantity, frequency, and contemplated purpose) of HVAC Value Fund, and, in turn, the Company. On a pro forma basis, the business acquired on January 20, 2017 contributed revenues of $225,112, net income of $1,353, and additional selling, general and administrative expenses to HVAC Value Fund during the quarter ended September 30, 2017. The following unaudited pro forma summaries present consolidated information of HVAC Value Fund as if the current and previous year business combinations had occurred on January 1 of each respective fiscal year. Some of the pro forma information for the year ended December 31, 2016 was calculated using annualized, unaudited 2015 financial information, and pro forma information for the period ended September 30, 2017 was calculated using annualized, unaudited 2016 information, as information for the period from January 1, 2016 through the applicable subsidiary closing date is unavailable. As previously reported in our Current Report on Form 8-K filed with the SEC on June 14, 2016, Sitestar has a 100% voting interest in HVAC Value Fund and JNJ Investments has the ability to earn profit interests. Pro forma earnings for the quarter ended September 30, 2017 and for the year ended December 31, 2016 are reported as gross without deducting the profits share that otherwise would be attributable to JNJ Investments in accordance with the operating agreement between Sitestar Corporation and JNJ Investments. Pro forma nine months ended September 30, 2017 (unaudited) With January 20, 2017 acquisition Revenue $ 3,602,740 Earnings $ 104,179 Pro forma year ended December 31, 2016 (unaudited) With 2016 acquisitions (in aggregate) With 2017 acquisition Consolidated pro forma year ended December 31, 2016 (unaudited) Revenue $ 3,781,167 $ 1,456,685 $ 5,237,852 Earnings $ 517,495 $ 295,886 $ 813,381 HVAC Value Fund did not have any material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The following tables summarize the consideration transferred to acquire each subsidiary and the amounts of identified assets acquired and liabilities assumed at the acquisition dates. Management continues to evaluate the valuation components of each acquisition on an ongoing basis. June 2016 acquisitions (in aggregate) Fair value of consideration transferred: Cash $ 160,000 Notes payable $ 65,000 Fair value of assets acquired: Vehicles $ 35,000 Equipment $ 13,700 Total identifiable assets $ 48,700 Goodwill $ 176,300 Subsequent adjustments $ (15,000 ) Adjusted goodwill $ 161,300 July 8, 2016 acquisition Fair value of consideration transferred: Cash $ 375,000 Notes payable $ 100,000 Fair value of assets acquired: Goodwill $ 475,000 Subsequent adjustments $ 3,276 Adjusted goodwill $ 478,276 July 15, 2016 acquisition Fair value of consideration transferred: Cash $ 340,000 Notes payable $ 100,000 Fair value of assets acquired: Vehicles $ 40,000 Total identifiable assets $ 40,000 Goodwill $ 400,000 Subsequent adjustments $ (17,780 ) Adjusted goodwill $ 382,220 October 1, 2016 acquisition Fair value of consideration transferred: Cash $ 315,000 Preliminary fair value of assets acquired: Vehicles $ 20,000 Equipment $ 5,000 Total identifiable assets $ 25,000 Goodwill $ 290,000 January 20, 2017 acquisition Fair value of consideration transferred: Cash $ 460,000 Notes payable $ 100,000 Assumed obligations $ 169,255 Preliminary fair value of assets acquired: Equipment $ 119,684 Leased Vehicles $ 143,590 Total identifiable assets $ 263,274 Goodwill $ 465,981 The goodwill amounts noted above are attributable to the workforce of the acquired subsidiaries and the significant efficiencies expected to arise after acquisition by HVAC Value Fund. All of the goodwill was assigned to the HVAC segment. As previously mentioned in Note 2 and as noted above, in the July 8, 2016 and July 15, 2016 acquisitions a net downward adjustment of $14,504 was made to goodwill during the quarter ended September 30, 2017. Part of the considerations paid for the July 2016 acquisitions were As previously reported in the quarterly reported filed with the SEC on August 8, 2017 and as noted above, in the June 2016 acquisitions, a downward adjustment of $15,000 was made to goodwill during the quarter ended June 30, 2017. Part of the consideration paid for the June 2016 acquisitions was a $15,000 seller carryback note. The note was payable in full on July 1, 2017 contingent on certain revenue targets and other operational conditions. As of the quarter ended June 30, 2017 it was determined by management that neither the revenue targets nor the operational conditions had been met, therefore, the payable was no longer due and total consideration paid for the acquisition decreased. The purchase price allocations above are deemed preliminary for valuation purposes, and management may adjust the allocations for the one year period allotted. Allocations for the October 1, 2016 and January 20, 2017 acquisitions remain open for subsequent management adjustment. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2017 | |
Investments [Abstract] | |
Investments | NOTE 4. INVESTMENTS The Company holds various investments through Willow Oak, LLC through its asset management segment and may invest excess cash in marketable securities through its corporate segment. The fair values of the Company’s marketable securities are determined in accordance with GAAP, with fair value being defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The following available-for-sale securities are re-measured to fair value on a recurring basis and are valued using Level 1 inputs, which are quoted prices (unadjusted) for identical assets in active markets. Cost Basis Unrealized Gain Unrealized Loss Fair Value September 30, 2017 (unaudited) Common Stock available for sale $ 153,970 $ — $ (19,981 ) $ 133,989 Cost Basis Unrealized Gain Unrealized Loss Fair Value December 31, 2016 Common Stock available for sale $ 563,211 $ 36,289 $ — $ 599,500 In the three and nine month period ended September 30, 2017, the Company recognized no realized gains or losses and $76,935 of realized gains, respectively. This compares to the three and nine month period ended September 30, 2016 when the Company recognized no realized gains or losses. Non-current assets held through Willow Oak Asset Management, LLC do not have a Readily Determinable Value as these investments are not publicly traded nor do they have published sales records. The Alluvial Fund is measured using net asset value (NAV) as the practical expedient and is exempt from the fair value hierarchy in accordance Cost Basis Accrued Fees Unrealized Gain Fair Value September 30, 2017 (unaudited) Alluvial Fund, LP $ 10,000,000 $ 702 $ 1,317,281 $ 11,317,983 Huckleberry Real Estate Fund II, LLC 750,000 — — 750,000 Total $ 10,750,000 $ 702 $ 1,317,281 $ 12,067,983 |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets and Liabilities | NOTE 5. FAIR VALUE OF ASSETS AND LIABILITIES The Company has adopted FASB ASC 820, Fair Value Measurements • Level 1 - Inputs are quoted prices in active markets as of the measurement date for identical assets and liabilities that the Company has the ability to access. This category includes exchange-traded mutual funds and equity securities. • Level 2 - Inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates or yield curves, that are observable at commonly quoted intervals. This category includes mortgage-backed securities, asset-backed securities, corporate debt securities, certificates of deposit, commercial paper, U.S. agency and municipal debt securities, U.S. Treasury securities and derivative contracts. • Level 3 - Inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. The measurements are highly subjective. Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company valued its marketable securities at fair value at the end of each reporting period. See description of these investments in Note 4 above. (Level 1) (Level 2) (Level 3) (Excluded) (a) Total at Fair Value September 30, 2017 (unaudited) Marketable securities $ 133,989 $ — $ — $ — $ 133,989 Huckleberry Real Estate Fund II, LLC $ — $ — $ 750,000 $ — $ 750,000 Alluvial Fund, LP $ — $ — $ — $ 11,317,983 $ 11,317,983 Total investments $ 133,989 $ — $ 750,000 $ 11,317,983 $ 12,201,972 (Level 1) (Level 2) (Level 3) (Excluded) (a) Total at Fair Value December 31, 2016 Marketable securities $ 599,500 $ — $ — $ — $ 599,500 (a) Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis The Company analyzes goodwill on an annual basis or whenever events or changes in circumstances indicate potential impairments. For the year ended December 31, 2016, goodwill held at year end was determined to be valued appropriately and no impairment existed. During the quarter ended September The Company values real estate held on the balance sheet on an annual basis or whenever events or changes in circumstances indicate a change in their fair market value. For the quarter ended September |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2017 | |
Property And Equipment [Abstract] | |
Property and Equipment | NOTE 6. PROPERTY AND EQUIPMENT The cost of property and equipment at September 2017 2016 Automobile $ 264,778 $ 115,688 Computers and equipment 178,341 36,030 Furniture and fixtures 25,206 25,206 468,325 176,924 Less accumulated depreciation (96,828 ) (33,460 ) Property and equipment, net $ 371,497 $ 143,464 Depreciation expense was $65,258 for the nine months ended September |
Real Estate
Real Estate | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate [Abstract] | |
Real Estate | NOTE 7. REAL ESTATE As of September September Real Estate Held for Investment As of September September Depreciation expense totaled $17,051 for the nine months ended September September Real Estate Held for Resale As of September 30, 2017, the Company accounted for two residential properties, one commercial property, and several lots as held for resale. These properties held for resale were carried on the balance sheet at $337,481. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 8. NOTES PAYABLE Notes payable at September 30, 2017 and December 31, 2016 consist of the following: 2017 2016 Interest bearing amount due on acquisition through HVAC Value Fund, LLC 25,000 250,000 Non-interest bearing amount due on acquisition through HVAC Value Fund, LLC 73,838 15,000 Interest bearing amount due on line of credit through HVAC Value Fund, LLC 289,637 — Equipment and vehicle capital leases acquired by HVAC Value Fund, LLC 132,560 Interest bearing amount due on real estate held for investment through EDI Real Estate, LLC 137,600 — Less current portion (449,363 ) (240,000 ) Long-term portion $ 209,272 $ 25,000 HVAC Value Fund typically structures acquisitions where a portion of the purchase price is held back and is subject to certain conditions. These notes payable may or may not bear interest. HVAC Value Fund made five acquisitions in the year ended December 31, 2016 and one additional acquisition in the quarter ended March 31, 2017. Four of the five acquisitions made in the year ended December 31, 2016 resulted in a note payable to the seller. The non-interest bearing note payable was due July 1, 2017 in the amount of $15,000, and was contingent on meeting a revenue target and other operational conditions. As mentioned in Note 3, the revenue targets and operational conditions were not met, resulting in the note being written off. There were three separate interest bearing notes payable as of the quarter ended June 30, 2017. The first interest bearing note payable accrues interest at 7% annually. $25,000 was payable on June 16, 2017 and $25,000 is payable on June 16, 2018. These payments are contingent on meeting revenue targets and other operational conditions. The second interest bearing note payable is for $100,000 and bears interest at 6% annually. This note was due July 11, 2017 and was contingent on meeting revenue targets and other operational conditions. As mentioned in Note 3, the revenue targets and operational conditions were not met, resulting in the note being written down. The third interest bearing note payable was for $100,000 and bears interest at 7% annually. This note was due July 30, 2017 and was contingent on meeting revenue targets and other operational conditions. As mentioned in Note 3, the revenue targets and operational conditions were exceeded, and per the purchase agreement, resulted in an increased payout. The acquisition made in the quarter ended March 31, 2017 also resulted in a $100,000 note payable to the seller. The payment amounts are contingent on meeting quarterly revenue targets. During the quarter ended September 30, 2017, EDI Real Estate, LLC entered into two promissory notes, each secured by a property held for investment. These notes pay interest quarterly and are due September 15, 2022 with early payoff permitted. |
Accounts Receivable and Bad Deb
Accounts Receivable and Bad Debt Expense | 9 Months Ended |
Sep. 30, 2017 | |
Accounts Notes Loans And Financing Receivable Gross Allowance And Net [Abstract] | |
Accounts Receivable and Bad Debt Expense | NOTE 9. ACCOUNTS RECEIVABLE AND BAD DEBT EXPENSE For the nine months ended September 30, 2017 and December 31, 2016, bad debt expense was $15,281 and $34, respectively. For the nine months ended September 30, 2017 and December 31, 2016, accounts receivable were $481,123 and $212,751, respectively. The increase in accounts receivable is the result of the formation of the HVAC subsidiary and a seller financing arrangement for a residential property sold during the nine months ended September 30, 2017. As of September 30, 2017 and December 31, 2016, accounts receivable consisted of the following: 2017 2016 Gross accounts receivable $ 483,123 $ 213,624 Less allowance for doubtful accounts (2,000 ) (873 ) Accounts receivable, net $ 481,123 $ 212,751 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | NOTE 10. SEGMENT INFORMATION As of September 30, 2017, the Company has five business units with separate management and reporting infrastructures that offer different products and services. The business units have been aggregated into five reportable segments: Corporate, Internet, HVAC, Real Estate, and Asset Management. The corporate segment includes any revenue or expenses derived from corporate office operations as well as expenses related to public company reporting, the oversight of subsidiaries, and other items that affect the overall Company. Sitestar also invests in marketable securities through the corporate segment. The internet segment includes revenue and expenses related to the sale of internet access, hosting, storage, and other ancillary services. The HVAC segment includes revenue and expenses derived from the acquisition and management of HVAC and plumbing companies in Arizona and throughout the Southwest. The real estate segment includes revenue and expenses related to the management of properties held for investment and revenue and expenses involving the preparation and sale of properties held for resale. The asset management segment includes revenues and expenses derived from various investment opportunities and partnerships. The internet segment includes revenue generated by operations in both the United States and Canada. In the quarter ended September 30, 2017, the internet segment generated revenue of $295,371 in the United States and revenue of $18,831 in Canada. This compares to the quarter ended September 30, 2016 where the internet segment generated revenue of $331,480 Summarized financial information concerning the Company’s reportable segments is shown in the following tables for the three months ended September 30, 2017 and 2016 and for the nine months ended September 30, 2017 and 2016. No comparable financial information exists for the asset management segment because it did not commence operations until January 1, 2017. Also note that the HVAC segment did not commence operations until June 14, 2016. Corporate Internet HVAC Real Estate Asset Management Consolidated Three months ended September 30, 2017 Revenues $ — $ 314,202 $ 1,332,239 $ 324,044 $ 715,598 $ 2,686,083 Cost of revenue $ — $ 81,144 $ 875,991 $ 306,537 $ — $ 1,263,672 Net income (loss) before income taxes $ (167,120 ) $ 172,415 $ 119,681 $ 8,126 $ 674,054 $ 807,156 Goodwill $ — $ 212,445 $ 1,779,549 $ — $ — $ 1,991,994 Identifiable assets $ 201,291 $ 315,754 $ 2,787,303 $ 1,072,849 $ 12,091,978 $ 16,469,175 Corporate Internet HVAC Real Estate Asset Management Consolidated Three months ended September 30, 2016 Revenues $ — $ 355,384 $ 906,910 $ 404,923 $ — $ 1,667,217 Cost of revenue $ — $ 70,290 $ 619,881 $ 402,285 $ — $ 1,092,456 Net income (loss) before income taxes $ (315,062 ) $ 285,847 $ 66,370 $ (2,953 ) $ — $ 34,202 Goodwill $ — $ 212,445 $ 1,053,851 $ — $ — $ 1,266,296 Identifiable assets $ 3,840,647 $ 614,610 $ 1,921,609 $ 2,117,404 $ — $ 8,494,270 Corporate Internet HVAC Real Estate Asset Management Consolidated Nine months ended September 30, 2017 Revenues $ — $ 977,629 $ 3,526,913 $ 1,216,190 $ 1,320,808 $ 7,041,540 Cost of revenue $ — $ 237,098 $ 2,307,902 $ 1,264,602 $ — $ 3,809,602 Net income (loss) before income taxes $ (403,869 ) $ 585,930 $ 88,774 $ (68,810 ) $ 1,241,023 $ 1,443,048 Goodwill $ — $ 212,445 $ 1,779,549 $ — $ — $ 1,991,994 Identifiable assets $ 201,291 $ 315,754 $ 2,787,303 $ 1,072,849 $ 12,091,978 $ 16,469,175 Corporate Internet HVAC Real Estate Asset Management Consolidated Nine months ended September 30, 2016 Revenues $ — $ 1,068,283 $ 939,932 $ 1,992,371 $ — $ 4,000,586 Cost of revenue $ — $ 290,043 $ 633,053 $ 1,918,603 $ — $ 2,841,699 Net income (loss) before income taxes $ (645,927 ) $ 614,670 $ 74,922 $ 60,857 $ — $ 104,522 Goodwill $ — $ 212,445 $ 1,053,851 $ — $ — $ 1,266,296 Identifiable assets $ 3,840,647 $ 614,610 $ 1,921,609 $ 2,117,404 $ — $ 8,494,270 |
Adjustment to Opening Balance N
Adjustment to Opening Balance Number Of Shares and Cancellation Of Treasury Shares | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Changes And Error Corrections [Abstract] | |
Adjustment to Opening Balance Number of Shares and Cancellation of Treasury Shares | NOTE 11. ADJUSTMENT TO OPENING BALANCE NUMBER OF SHARES AND CANCELLATION OF TREASURY SHARES During the quarter ended March 31, 2017, management was made aware of a clerical error that affected the reported number of treasury shares held as of December 31, 2016. It was discovered that the number of treasury shares held was overstated by 100,000 shares, which in turn understated the total number of shares outstanding by the same amount. The Company has concluded that a full restatement is not necessary as the total misstatement accounts for 0.035% of the total number of shares outstanding and no per share metrics were effected. This error dates back to records kept by prior management, but has since been reconciled and corrected. Further, management is actively working to cancel existing treasury shares. As noted on the condensed consolidated balance sheets and the condensed consolidated statements of stockholders’ equity, as of the quarter ended September 30, 2017, 2,125,795 treasury shares have been cancelled. As of November 9, 2017, the correct number of shares outstanding is 282,830,163 and the correct number of treasury shares held is 11,696,658. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 12. SUBSEQUENT EVENTS Management has evaluated subsequent events from September 30, 2017 through November 9, 2017, the date the unaudited condensed consolidated financial statements were issued. Management concluded that no subsequent events have occurred that would require recognition or disclosure in the unaudited condensed consolidated financial statements. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Organization and Lines of Business | Organization and Lines of Business Sitestar Corporation (formerly White Dove Systems, Inc., and then Interfoods Consolidated, Inc.) was incorporated in Nevada on December 17, 1992. On July 26, 1999, the Company restated its Articles of Incorporation to change the name of the Company to “Sitestar Corporation.” Unless the context otherwise requires, and when used in this Report, the “Company,” “Sitestar,” “we,” “our” or “us” refers to Sitestar Corporation and its subsidiaries. The Company operates through five reportable segments: Corporate, Internet Operations, HVAC Operations, Real Estate Operations, and Asset Management Operations. The management of the Company also continually reviews various investment opportunities, including in other lines of business. Corporate The corporate segment includes any revenue or expenses derived from corporate office operations as well as expenses related to public company reporting, the oversight of subsidiaries, and other items that affect the overall Company. Internet Operations The Company operates its internet segment through Sitestar.net, a wholly-owned subsidiary that offers consumer and business-grade internet access, wholesale managed modem services, web hosting, and various ancillary services. Sitestar.net provides services to customers in the United States and Canada. HVAC Operations The Company operates its HVAC segment through HVAC Value Fund, LLC. HVAC Value Fund is focused on the acquisition and management of HVAC and plumbing companies in Arizona and throughout the Southwest United States. As previously reported in our Current Report on Form 8-K filed with the SEC on June 14, 2016, the Company, along with JNJ Investments, LLC, an unaffiliated third party and member of HVAC Value Fund, LLC, organized and launched this subsidiary on June 13, 2016. Sitestar has a 100% voting interest in HVAC Value Fund and JNJ Investments has the ability to earn profit interests. Under the operating agreement, the Company has first claim to a portion of net income, with the remainder being allocated between the Company and JNJ Investments. JNJ Investments shall also be subject to a Loss Carryforward limitation in the event of a net loss. As of September 30, 2017, HVAC Value Fund had closed on six acquisitions for an aggregate purchase price of $2.02 million which includes estimated earn outs of approximately $350,000. As previously reported in our Current Report on Form 8-K filed with the SEC on June 14, 2016 and further described above, the purpose of HVAC Value Fund is to acquire HVAC and plumbing businesses. Accordingly, these six acquisitions were made in the ordinary course of business and consistent with the customs and practices (including with respect to nature, scope, magnitude, quantity, frequency and contemplated purpose) of HVAC Value Fund, and, in turn, the Company. Real Estate Operations Sitestar created a wholly-owned real estate subsidiary on July 10, 2017 named EDI Real Estate, LLC. Through EDI Real Estate, LLC, Sitestar owns a real estate investment portfolio that includes 10 residential properties, vacant land, and one commercial property. Our real estate portfolio is primarily focused in the Roanoke and Lynchburg areas of Virginia. The portfolio includes single family homes that are currently rented and managed through a third-party property manager, as well as vacant properties being prepared or currently listed for sale. Asset Management Operations Sitestar created a wholly-owned asset management subsidiary on October 10, 2016 named Willow Oak Asset Management, LLC (“Willow Oak”). As previously reported in our Current Reports on Form 8-K filed with the SEC on September 19, 2016 and December 30, 2016, respectively, the Company agreed to make a seed investment totaling $10 million through Willow Oak in Alluvial Fund, LP, an unrelated private investment partnership that was launched on January 1, 2017. Under the operating agreement included in the Form 8-K, the Company may not make any withdrawal from its Capital Account until its Capital Account balance exceeds $50,000,000 and any partial withdrawal may not reduce the Capital Account balance below $50,000,000. Additionally, a full withdrawal shall not be permitted prior to a date five years after the effective date of the accompanying Side Letter. As previously reported in our Current Reports on Form 8-K filed with the SEC on January 26, 2017, the Company also committed to make a capital contribution to Huckleberry Real Estate Fund II, LLC in the aggregate amount of $750,000. Under the operating agreement included in the Form 8-K, the Managing Member shall have sole discretion regarding the amounts and timing of Distributions to Members. The asset management segment did not produce revenue in 2016. Any expenses incurred in 2016 were allocated to the corporate segment. Starting January 1, 2017, all revenue earned and expenses incurred by this segment were allocated as such. Willow Oak signed a fee share agreement on May 11, 2017 with Lizard Head, LLC, the general partner of Bridge Reid Fund I, LP, an unrelated private investment partnership. Under the agreement, Willow Oak became a special limited partner to Bridge Reid, providing fund advisory services to Bridge Reid in exchange for payments equal to 33% of the management fees accrued quarterly by the general partner and 33% of the incentive fees accrued annually, on investors who become limited partners after May 11, 2017. Willow Oak signed a fee share agreement on June 13, 2017 with Coolidge Capital Management, LLC (“Coolidge”), whose sole member is Keith D. Smith, also a Sitestar director. Under the Agreement, Willow Oak and Coolidge are the sole members of Bonhoeffer Capital Management LLC, the general partner to Bonhoeffer Fund, LP, a private investment partnership. Under their agreement, Willow Oak pays all start-up and operating expenses that are not partnership expenses under the limited partnership agreement. Willow Oak receives 50% of all performance and management fees earned by the general partner. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries including: Sitestar.net, Inc., HVAC Value Fund, LLC, EDI Real Estate, LLC, and Willow Oak Asset Management, LLC. All intercompany accounts and transactions have been eliminated. |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements have been prepared by Sitestar Corporation, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments), which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual consolidated financial statements prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) have been omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 24, 2017 (the “2016 Form 10-K”). The results for the nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for the full year ending December 31, 2017. |
Use of Estimates | Use of Estimates In accordance with Accounting Principles Generally Accepted in the United State of America (GAAP), the preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates and judgments, including those related to fair value of investments, revenue recognition, accrued expenses, financing operations, goodwill valuation, other assets, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions. These accounting policies are described at relevant sections in the notes to the consolidated financial statements. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of the statements of cash flows, the Company defines cash equivalents as all highly liquid instruments purchased with a maturity of three months or less. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and accounts receivable. The Company places its cash with high quality financial institutions and, at times, may exceed the FDIC and CDIC insurance limit. The Company extends credit based on an evaluation of customers’ financial condition, generally without collateral. Exposure to losses on receivables is principally dependent on each customer’s financial condition. The Company monitors its exposure for credit losses and maintains allowances for anticipated losses. |
Investments | Investments The Company currently holds and makes investments in marketable securities through its corporate operations. Marketable securities held are classified as available-for-sale based on management’s intent. Unrealized gains (losses) are categorized as other comprehensive income. Realized gains (losses) on marketable securities are determined by specific identification. Interest is recognized on an accrual basis; dividends are recorded as earned on the ex-dividend date. The Company holds additional non-current investments through its asset management operations. Non-current investments do not qualify as available-for-sale securities. The classification of these investments is assessed upon purchase and reassessed at each reporting period. Non-current investments are marked to market at the end of each reporting period and revenue is recognized in the condensed consolidated statement of income in the period of adjustment. |
Accounts Receivable | Accounts Receivable The Company grants credit in the form of unsecured accounts receivable to its customers. The estimate of the allowance for doubtful accounts, which is charged off to bad debt expense, is based on management’s assessment of current economic conditions and historical collection experience with each customer. Specific customer receivables are considered past due when they are outstanding beyond their contractual terms and are charged off to the allowance for doubtful accounts when an account is individually determined to be uncollectible. Sales of internet services, which are not automatically processed via credit card or bank account drafts, have been the Company’s highest exposure to collection risk. The Company attempts to reduce this risk by including a late payment fee and a manual processing payment fee to customer accounts. Receivables more than ninety days past due are no longer included in accounts receivable and are turned over to a collection agency. Accounts receivable more than 30 days are considered past due. Sales of HVAC services are typically paid via credit card or check upon completion of service. Sales that are not collected upon completion are generally to existing and repeat customers who have established a track record of timely payments. Historically, HVAC has not encountered issues with collectability of customer accounts. Accounts receivable more than 60 days are considered past due. |
Note Receivable | Note Receivable The Company currently holds a note receivable from the sale of a real estate property to a third-party. This note is long term in nature and no collection issues are expected. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets In accordance with GAAP, long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The Company evaluates at each balance sheet date whether events and circumstances have occurred that indicate possible impairment. If there are indications of impairment, the Company uses future undiscounted cash flows of the related asset or asset grouping over the remaining life in measuring whether the assets are recoverable. In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value. Long-lived assets to be disposed are reported at the lower of carrying amount or fair value of the asset less cost to sell. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Depreciation is computed using the straight-line method based on estimated useful lives from three to seven years for equipment and vehicles, fifteen years for building improvements, and thirty-nine years for buildings. Assets held through capital leases are amortized over the life of the related lease. Expenditures for maintenance and repairs are charged to operations as incurred while renewals and betterments are capitalized. Gains and losses on disposals are included in the results of operations. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations accounted for under the acquisition method of accounting. The Company does not amortize goodwill. The Company tests its goodwill annually during the fourth quarter of its fiscal year or when events and circumstances indicate that those assets might not be recoverable. Impairment testing of goodwill is required at the reporting unit level (operating segment or one level below operating segment) and involves a two-step process. Prior to performing the two-step impairment test, the Company may make a qualitative assessment of the likelihood of goodwill impairment to determine whether a detailed quantitative analysis is required. The first step of the impairment test involves comparing the estimated fair values of the Company’s reporting units with the reporting units’ carrying amounts, including goodwill. The Company estimates the fair value of its reporting units using discounted expected future cash flows. If the carrying amount of the reporting unit exceeds its fair value, a second step is performed to compare the carrying amount of goodwill to the implied fair value of that goodwill. If the carrying amount of goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to the excess. The Company performs an analysis of its goodwill as of December 31 annually, or whenever events or changes in circumstances indicate that the assigned values may no longer be appropriate. No impairment was recorded in 2016. During the quarter ended September 30, 2017, a net downward adjustment of $14,504 was made to goodwill held through the HVAC segment. This adjustment was the result of two previous sellers not meeting or exceeding the operational terms of carryback notes that were previously included as consideration for these acquisitions. See Note 3 for more information. Other intangible assets consist of customer relationships, developed technology and software, trade names, and other assets acquired in conjunction with the purchases of businesses or purchases of assets from other companies. As of September 30, 2017, these intangible assets have been fully amortized. The remaining intangible assets consist of domain names attributed to the internet segment. When management determines material intangible assets are acquired in conjunction with the purchase of a business, the Company determines the fair values of the identifiable intangible assets by taking into account management’s own analysis and an independent third-party valuation specialist’s appraisal. Intangible assets determined to have definite lives are amortized over their estimated useful lives. The Company owns 634 domain names, of which 107 are available for sale. These domains are valued at historical cost. |
Real Estate | Real Estate Real estate properties held for resale are carried at the lower of cost or fair market value. All costs directly related to the improvement and carrying of real estate are capitalized, including renovations and property taxes, to the extent the capitalized costs of the property do not exceed the estimated fair value of the property. If the cost of the real estate exceeds the estimated fair value, the excess is charged to expense. Fair value is estimated based on comparable sales in the geographic area the real estate is located and tax assessed values. Fair value is evaluated annually by management, or when events or changes in circumstances indicate the carrying value of the real estate may not be recoverable. Real estate properties held for investment are carried at the cost basis plus additional expenses where the expense extended the life or added value to the property. Otherwise, the expense is not capitalized and is charged to expense. Properties categorized as real estate held for investment are not expected by management to be sold in the next 12 months. This determination is periodically reviewed by management. |
Accrued Bonus | Accrued Bonus Accrued bonuses represent performance based incentives that have not yet been paid. These bonus amounts are paid annually after financial records are finalized. |
Other Accrued Expenses | Other Accrued Expenses Other accrued expenses represent incurred but not yet paid expenses from Sales and Use taxes for ISP services, vacation accruals, professional fees, and other payroll accruals. |
Deferred Revenue | Deferred Revenue Deferred revenue represents collections from customers in advance of internet services to be performed. Revenue is recognized in the period service is provided. |
Revenue Recognition | Revenue Recognition Internet Operations The Company sells internet services under annual and monthly contracts. Under the annual contracts, the subscriber pays a one-time annual fee, which is recognized as revenue ratably over the life of the contract. Under the monthly contracts, the subscriber is billed monthly and revenue is recognized for the period to which the service relates. Sales of computer hardware are recognized as revenue upon delivery and acceptance of the product by the customer. Sales are adjusted for any returns or allowances. The Company generates revenue in its internet segment from consumer and business-grade internet access, wholesale managed modem services for downstream ISPs, web hosting, and various ancillary services in the United States and Canada. Services include narrow-band (dial-up and ISDN) and broadband services (DSL, fiber-optic and wireless), web hosting, and additional related services to consumers and businesses. Customers may also subscribe to web hosting plans to include email access and storage. Internet revenue is affected by the changing composition of revenue sources. In some years, this shift can be significant. HVAC Operations The Company performs HVAC and plumbing service repairs and installs HVAC units for its customers. Revenue is recognized at the time of the installation or service call. Sales are adjusted for any returns or allowances. A return or allowance situation would arise based on the two-year workmanship warranty that typically conveys with the installation of a new unit. There is also a two-year warranty on newly installed parts and equipment that is honored by the manufacturer. If an installation is performed over multiple days, it is accounted for using work in process (WIP) accounting in accordance with GAAP. If payment is not provided in advance or at the time of service or installation, the amount due is designated as an account receivable. Real Estate Operations Revenue from real estate held for resale is recognized upon closing of the sale, as all conditions for full revenue recognition have been met at that time. All costs associated with the property sold are removed from the consolidated balance sheets and charged to cost of revenue at that time. Rental revenue from real estate held for investment is recognized when it is due, generally on the first of each month or at another regular period agreed upon between the Company and the tenant. If payments are not provided in a timely manner, the amount due is designated as an account receivable. Accounts receivable from rental revenue are generally considered unrecoverable after 90 days unless the Company reasonably believes that recovery is probable. Tenants generally provide a security deposit at the time of possession. This deposit is held separate from revenue and only applied to revenue when rental payment comparable to the security deposit amount is not provided in a timely manner and considered unlikely to be recovered. Otherwise, the security deposit is returned in a timely manner after the property is surrendered back to the Company. Asset Management Operations The Company earns revenue from investments held through the asset management segment through various fee share agreements as well as through realized and unrealized gains and losses. Management fees earned are recorded and paid out monthly and are included in revenue on the condensed consolidated statement of income. Performance fees earned are accrued monthly, paid out yearly and are also included in revenue on the condensed consolidated statement of income. As non-current investments do not quality as available-for-sale securities, non-current investments are marked to market at the end of each reporting period. Realized and unrealized gains and losses are recognized as revenue in the period of adjustment. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. |
Income Per Share | Income Per Share The basic income per common share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding. Diluted income per common share is computed similar to basic income per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company has no potentially dilutive securities. |
Other Comprehensive Income | Other Comprehensive Income Other comprehensive income is the result of two items: the impact of foreign currency translations related to the Company’s operations in Canada, and the unrealized gains (losses) from marketable securities classified as available-for-sale. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, “Leases” (Topic 842). The guidance in ASU 2016-02 supersedes the lease recognition requirements in ASC Topic 842, Leases. ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is required to adopt this standard in the first quarter of 2019. The Company is currently evaluating the effect this standard will have on its Consolidated Financial Statements. In August 2015, the FASB issued ASU No. 2015-14, which defers the effective date of ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” by one year. As a result, the ASU is now effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. ASU No. 2014-09 provides comprehensive guidance on the recognition of revenue from customers arising from the transfer of goods and services. The ASU also provides guidance on accounting for certain contract costs, and requires new disclosures. Early adoption is not permitted. The Company is required to adopt this standard in the first quarter of 2018. In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes” (Topic 740). The ASU provides guidance related to the classifications of deferred income tax assets and liabilities into current and noncurrent amounts in a classified statement of financial position. Deferred tax assets and liabilities are classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. Deferred tax assets and liabilities that are not related to an asset or liability for financial reporting are classified according to the expected reversal date of the temporary difference. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted. The Company is required to adopt this standard in the first quarter of 2018. The initial application of the standard is not expected to significantly impact the Company. In January 2016, the FASB issued ASU No. 2016-01 "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." Although the ASU retains many of the current requirements for financial instruments, it significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated with the fair value of financial instruments. The ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017; earlier adoption is permitted under certain criteria. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial condition, results of operations, and cash flows. In January 2017, the FASB issued ASU No. 2017-04 “Simplifying the Test for Goodwill Impairment”. The guidance eliminates the requirement to calculate “implied fair value of goodwill” (previously Step 2) from the goodwill impairment analysis. Companies are required to calculate the impairment of their goodwill based solely on the excess of the carrying value of the reporting unit over its fair value (previously Step 1). Companies are still allowed to perform an initial qualitative assessment for a reporting unit to determine if the quantitative assessment is necessary. This guidance is required to be adopted in fiscal years beginning after December 15, 2019 and early adoption is permitted. The Company will adopt this new guidance for its 2017 goodwill impairment analysis. |
Business Conbinations or Acqu21
Business Conbinations or Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Schedule of Pro Forma Earnings | Pro forma nine months ended September 30, 2017 (unaudited) With January 20, 2017 acquisition Revenue $ 3,602,740 Earnings $ 104,179 Pro forma year ended December 31, 2016 (unaudited) With 2016 acquisitions (in aggregate) With 2017 acquisition Consolidated pro forma year ended December 31, 2016 (unaudited) Revenue $ 3,781,167 $ 1,456,685 $ 5,237,852 Earnings $ 517,495 $ 295,886 $ 813,381 |
Summary Consideration Transferred to Acquire Each Subsidiary and Amounts of Identified Assets Acquired and Liabilities Assumed | June 2016 acquisitions (in aggregate) Fair value of consideration transferred: Cash $ 160,000 Notes payable $ 65,000 Fair value of assets acquired: Vehicles $ 35,000 Equipment $ 13,700 Total identifiable assets $ 48,700 Goodwill $ 176,300 Subsequent adjustments $ (15,000 ) Adjusted goodwill $ 161,300 July 8, 2016 acquisition Fair value of consideration transferred: Cash $ 375,000 Notes payable $ 100,000 Fair value of assets acquired: Goodwill $ 475,000 Subsequent adjustments $ 3,276 Adjusted goodwill $ 478,276 July 15, 2016 acquisition Fair value of consideration transferred: Cash $ 340,000 Notes payable $ 100,000 Fair value of assets acquired: Vehicles $ 40,000 Total identifiable assets $ 40,000 Goodwill $ 400,000 Subsequent adjustments $ (17,780 ) Adjusted goodwill $ 382,220 October 1, 2016 acquisition Fair value of consideration transferred: Cash $ 315,000 Preliminary fair value of assets acquired: Vehicles $ 20,000 Equipment $ 5,000 Total identifiable assets $ 25,000 Goodwill $ 290,000 January 20, 2017 acquisition Fair value of consideration transferred: Cash $ 460,000 Notes payable $ 100,000 Assumed obligations $ 169,255 Preliminary fair value of assets acquired: Equipment $ 119,684 Leased Vehicles $ 143,590 Total identifiable assets $ 263,274 Goodwill $ 465,981 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments [Abstract] | |
Summary of Investment | Cost Basis Unrealized Gain Unrealized Loss Fair Value September 30, 2017 (unaudited) Common Stock available for sale $ 153,970 $ — $ (19,981 ) $ 133,989 Cost Basis Unrealized Gain Unrealized Loss Fair Value December 31, 2016 Common Stock available for sale $ 563,211 $ 36,289 $ — $ 599,500 |
Summary of Non-Current Investments Re-Measured to Fair Value on a Recurring Basis | Cost Basis Accrued Fees Unrealized Gain Fair Value September 30, 2017 (unaudited) Alluvial Fund, LP $ 10,000,000 $ 702 $ 1,317,281 $ 11,317,983 Huckleberry Real Estate Fund II, LLC 750,000 — — 750,000 Total $ 10,750,000 $ 702 $ 1,317,281 $ 12,067,983 |
Fair Value of Assets and Liab23
Fair Value of Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Marketable Securities at Fair Value | The Company valued its marketable securities at fair value at the end of each reporting period. See description of these investments in Note 4 above. (Level 1) (Level 2) (Level 3) (Excluded) (a) Total at Fair Value September 30, 2017 (unaudited) Marketable securities $ 133,989 $ — $ — $ — $ 133,989 Huckleberry Real Estate Fund II, LLC $ — $ — $ 750,000 $ — $ 750,000 Alluvial Fund, LP $ — $ — $ — $ 11,317,983 $ 11,317,983 Total investments $ 133,989 $ — $ 750,000 $ 11,317,983 $ 12,201,972 (Level 1) (Level 2) (Level 3) (Excluded) (a) Total at Fair Value December 31, 2016 Marketable securities $ 599,500 $ — $ — $ — $ 599,500 (a) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property Plant And Equipment [Abstract] | |
Schedule of Cost of Property and Equipment | The cost of property and equipment at September 2017 2016 Automobile $ 264,778 $ 115,688 Computers and equipment 178,341 36,030 Furniture and fixtures 25,206 25,206 468,325 176,924 Less accumulated depreciation (96,828 ) (33,460 ) Property and equipment, net $ 371,497 $ 143,464 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Summary of Notes Payable | Notes payable at September 30, 2017 and December 31, 2016 consist of the following: 2017 2016 Interest bearing amount due on acquisition through HVAC Value Fund, LLC 25,000 250,000 Non-interest bearing amount due on acquisition through HVAC Value Fund, LLC 73,838 15,000 Interest bearing amount due on line of credit through HVAC Value Fund, LLC 289,637 — Equipment and vehicle capital leases acquired by HVAC Value Fund, LLC 132,560 Interest bearing amount due on real estate held for investment through EDI Real Estate, LLC 137,600 — Less current portion (449,363 ) (240,000 ) Long-term portion $ 209,272 $ 25,000 |
Accounts Receivable and Bad D26
Accounts Receivable and Bad Debt Expense (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounts Notes Loans And Financing Receivable Gross Allowance And Net [Abstract] | |
Schedule of Accounts Receivable | As of September 30, 2017 and December 31, 2016, accounts receivable consisted of the following: 2017 2016 Gross accounts receivable $ 483,123 $ 213,624 Less allowance for doubtful accounts (2,000 ) (873 ) Accounts receivable, net $ 481,123 $ 212,751 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Summary of Financial Information Concerning Company's Reportable Segments | Summarized financial information concerning the Company’s reportable segments is shown in the following tables for the three months ended September 30, 2017 and 2016 and for the nine months ended September 30, 2017 and 2016. No comparable financial information exists for the asset management segment because it did not commence operations until January 1, 2017. Also note that the HVAC segment did not commence operations until June 14, 2016. Corporate Internet HVAC Real Estate Asset Management Consolidated Three months ended September 30, 2017 Revenues $ — $ 314,202 $ 1,332,239 $ 324,044 $ 715,598 $ 2,686,083 Cost of revenue $ — $ 81,144 $ 875,991 $ 306,537 $ — $ 1,263,672 Net income (loss) before income taxes $ (167,120 ) $ 172,415 $ 119,681 $ 8,126 $ 674,054 $ 807,156 Goodwill $ — $ 212,445 $ 1,779,549 $ — $ — $ 1,991,994 Identifiable assets $ 201,291 $ 315,754 $ 2,787,303 $ 1,072,849 $ 12,091,978 $ 16,469,175 Corporate Internet HVAC Real Estate Asset Management Consolidated Three months ended September 30, 2016 Revenues $ — $ 355,384 $ 906,910 $ 404,923 $ — $ 1,667,217 Cost of revenue $ — $ 70,290 $ 619,881 $ 402,285 $ — $ 1,092,456 Net income (loss) before income taxes $ (315,062 ) $ 285,847 $ 66,370 $ (2,953 ) $ — $ 34,202 Goodwill $ — $ 212,445 $ 1,053,851 $ — $ — $ 1,266,296 Identifiable assets $ 3,840,647 $ 614,610 $ 1,921,609 $ 2,117,404 $ — $ 8,494,270 Corporate Internet HVAC Real Estate Asset Management Consolidated Nine months ended September 30, 2017 Revenues $ — $ 977,629 $ 3,526,913 $ 1,216,190 $ 1,320,808 $ 7,041,540 Cost of revenue $ — $ 237,098 $ 2,307,902 $ 1,264,602 $ — $ 3,809,602 Net income (loss) before income taxes $ (403,869 ) $ 585,930 $ 88,774 $ (68,810 ) $ 1,241,023 $ 1,443,048 Goodwill $ — $ 212,445 $ 1,779,549 $ — $ — $ 1,991,994 Identifiable assets $ 201,291 $ 315,754 $ 2,787,303 $ 1,072,849 $ 12,091,978 $ 16,469,175 Corporate Internet HVAC Real Estate Asset Management Consolidated Nine months ended September 30, 2016 Revenues $ — $ 1,068,283 $ 939,932 $ 1,992,371 $ — $ 4,000,586 Cost of revenue $ — $ 290,043 $ 633,053 $ 1,918,603 $ — $ 2,841,699 Net income (loss) before income taxes $ (645,927 ) $ 614,670 $ 74,922 $ 60,857 $ — $ 104,522 Goodwill $ — $ 212,445 $ 1,053,851 $ — $ — $ 1,266,296 Identifiable assets $ 3,840,647 $ 614,610 $ 1,921,609 $ 2,117,404 $ — $ 8,494,270 |
Organization and Significant 28
Organization and Significant Accounting Policies - Additional Information (Details) | Jun. 13, 2017 | May 11, 2017 | Jan. 26, 2017USD ($) | Sep. 30, 2017USD ($)SegmentAcquisitionProperty | Dec. 31, 2016USD ($) | Jan. 01, 2017USD ($) |
Organization Significant Accounting Policies And Background [Line Items] | ||||||
Date of incorporation | Dec. 17, 1992 | |||||
Number of reportable segments | Segment | 5 | |||||
Voting interest, percentage | 100.00% | |||||
Capital contribution | $ 4,625,000 | $ 5,480,694 | ||||
Residential Properties | ||||||
Organization Significant Accounting Policies And Background [Line Items] | ||||||
Number of real estate properties owned | Property | 10 | |||||
Commercial Properties | ||||||
Organization Significant Accounting Policies And Background [Line Items] | ||||||
Number of real estate properties owned | Property | 1 | |||||
HVAC Value Fund, LLC | ||||||
Organization Significant Accounting Policies And Background [Line Items] | ||||||
Number of acquisitions | Acquisition | 6 | |||||
Aggregate purchase price of acquisitions | $ 2,020,000 | |||||
Estimated earn outs | $ 350,000 | |||||
Willow Oak Asset Management LLC | ||||||
Organization Significant Accounting Policies And Background [Line Items] | ||||||
Full withdrawal permitted period | 5 years | |||||
Percentage of performance and management fees earned | 50.00% | |||||
Willow Oak Asset Management LLC | Management Fees Accrued | ||||||
Organization Significant Accounting Policies And Background [Line Items] | ||||||
Percentage payments for fund advisory service | 33.00% | |||||
Willow Oak Asset Management LLC | Incentive Fees Accrued | ||||||
Organization Significant Accounting Policies And Background [Line Items] | ||||||
Percentage payments for fund advisory service | 33.00% | |||||
Willow Oak Asset Management LLC | Minimum | ||||||
Organization Significant Accounting Policies And Background [Line Items] | ||||||
Capital account balance for withdrawal | $ 50,000,000 | |||||
Willow Oak Asset Management LLC | Alluvial Fund, LP | ||||||
Organization Significant Accounting Policies And Background [Line Items] | ||||||
Seed investment | $ 10,000,000 | |||||
Willow Oak Asset Management LLC | Huckleberry Real Estate Fund II, LLC | ||||||
Organization Significant Accounting Policies And Background [Line Items] | ||||||
Capital contribution | $ 750,000 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017USD ($) | Sep. 30, 2017DomainNameshares | Dec. 31, 2016USD ($) | |
Summary of Significant Accounting Policies [Line Items] | |||
Goodwill impairment | $ | $ 0 | ||
Number of domain names owned | DomainName | 634 | ||
Number of domain names available for sale | DomainName | 107 | ||
Workmanship warranty period | 2 years | ||
Manufacture warranty period | 2 years | ||
Income tax examination description | The most recent three tax years, fiscal years ending December 31, 2016, December 31, 2015, and December 31, 2014, are open to potential IRS examination. | ||
Potentially dilutive securities | shares | 0 | ||
HVAC | |||
Summary of Significant Accounting Policies [Line Items] | |||
Net downward adjustment to goodwill | $ | $ (14,504) | ||
Equipment and Vehicles | Minimum | |||
Summary of Significant Accounting Policies [Line Items] | |||
Estimated useful lives | 3 years | ||
Equipment and Vehicles | Maximum | |||
Summary of Significant Accounting Policies [Line Items] | |||
Estimated useful lives | 7 years | ||
Building Improvements | |||
Summary of Significant Accounting Policies [Line Items] | |||
Estimated useful lives | 15 years | ||
Buildings | |||
Summary of Significant Accounting Policies [Line Items] | |||
Estimated useful lives | 39 years |
Business Conbinations or Acqu30
Business Conbinations or Acquisitions - Additional Information (Details) - USD ($) | Jan. 20, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2017 | Oct. 01, 2016 | Jul. 15, 2016 | Jul. 08, 2016 | Jun. 30, 2016 | Jun. 17, 2016 | Jun. 14, 2016 |
HVAC Value Fund and JNJ Investments | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition, percentage | 100.00% | |||||||||
July 8, 2016 acquisition | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Net downward adjustment to goodwill | $ (14,504) | $ 3,276 | ||||||||
July 8, 2016 acquisition | Note Payable due July 11, 2017 | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Debt instrument, maturity date | Jul. 11, 2017 | |||||||||
July 15, 2016 acquisition | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Net downward adjustment to goodwill | $ (14,504) | $ (17,780) | ||||||||
July 15, 2016 acquisition | Note Payable due July 30, 2017 | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Debt instrument, maturity date | Jul. 30, 2017 | |||||||||
June 2016 acquisitions (in aggregate) | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Net downward adjustment to goodwill | $ (15,000) | $ (15,000) | ||||||||
June 2016 acquisitions (in aggregate) | Seller Carryback Note | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Notes payable | $ 15,000 | |||||||||
June 2016 acquisitions (in aggregate) | Note Payable due July 1, 2017 | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Debt instrument, maturity date | Jul. 1, 2017 | |||||||||
HVAC Value Fund, LLC | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquired contributed revenues | $ 225,112 | |||||||||
Business acquired contributed net income | $ 1,353 | |||||||||
HVAC Value Fund, LLC | Acquisition of First Subsidiary | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition, percentage | 100.00% | |||||||||
HVAC Value Fund, LLC | Acquisition of Second Subsidiary | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition, percentage | 100.00% | |||||||||
HVAC Value Fund, LLC | Acquisition of Third Subsidiary | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition, percentage | 100.00% | |||||||||
HVAC Value Fund, LLC | Acquisition of Fourth Subsidiary | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition, percentage | 100.00% | |||||||||
HVAC Value Fund, LLC | Acquisition of Fifth Subsidiary | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition, percentage | 100.00% | |||||||||
HVAC Value Fund, LLC | Acquisition of Sixth Subsidiary | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition, percentage | 100.00% |
Business Conbinations or Acqu31
Business Conbinations or Acquisitions - Schedule of Pro Forma Earnings (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | |||||
Revenue | $ 2,686,083 | $ 1,667,217 | $ 7,041,540 | $ 4,000,586 | |
Pro forma | |||||
Business Acquisition [Line Items] | |||||
Revenue | $ 5,237,852 | ||||
Earnings | 813,381 | ||||
January 20, 2017 acquisition | |||||
Business Acquisition [Line Items] | |||||
Revenue | 3,602,740 | ||||
Earnings | $ 104,179 | ||||
2016 acquisitions | |||||
Business Acquisition [Line Items] | |||||
Revenue | 3,781,167 | ||||
Earnings | 517,495 | ||||
2017 acquisitions | |||||
Business Acquisition [Line Items] | |||||
Revenue | 1,456,685 | ||||
Earnings | $ 295,886 |
Business Conbinations or Acqu32
Business Conbinations or Acquisitions - Summary Consideration Transferred to Acquire Each Subsidiary and Amounts of Identified Assets Acquired and Liabilities Assumed (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | |||||
Cash | $ 8,711,772 | $ 1,238,436 | |||
Goodwill | $ 1,991,994 | 1,991,994 | $ 1,266,296 | $ 1,553,745 | |
June 2016 acquisitions (in aggregate) | |||||
Business Acquisition [Line Items] | |||||
Cash | 160,000 | ||||
Notes payable | 65,000 | ||||
Vehicles | 35,000 | 35,000 | |||
Equipment | 13,700 | 13,700 | |||
Total identifiable assets | 48,700 | 48,700 | |||
Goodwill | 176,300 | 176,300 | |||
Subsequent adjustments | $ (15,000) | (15,000) | |||
Adjusted goodwill | 161,300 | 161,300 | |||
July 8, 2016 acquisition | |||||
Business Acquisition [Line Items] | |||||
Cash | 375,000 | ||||
Notes payable | 100,000 | ||||
Goodwill | 475,000 | 475,000 | |||
Subsequent adjustments | (14,504) | 3,276 | |||
Adjusted goodwill | 478,276 | 478,276 | |||
July 15, 2016 acquisition | |||||
Business Acquisition [Line Items] | |||||
Cash | 340,000 | ||||
Notes payable | 100,000 | ||||
Vehicles | 40,000 | 40,000 | |||
Total identifiable assets | 40,000 | 40,000 | |||
Goodwill | 400,000 | 400,000 | |||
Subsequent adjustments | (14,504) | (17,780) | |||
Adjusted goodwill | 382,220 | 382,220 | |||
October 1, 2016 acquisition | |||||
Business Acquisition [Line Items] | |||||
Cash | 315,000 | ||||
Vehicles | 20,000 | 20,000 | |||
Equipment | 5,000 | 5,000 | |||
Total identifiable assets | 25,000 | 25,000 | |||
Goodwill | 290,000 | 290,000 | |||
January 20, 2017 acquisition | |||||
Business Acquisition [Line Items] | |||||
Cash | 460,000 | ||||
Notes payable | 100,000 | ||||
Equipment | 119,684 | 119,684 | |||
Leased Vehicles | 143,590 | 143,590 | |||
Total identifiable assets | 263,274 | 263,274 | |||
Goodwill | 465,981 | 465,981 | |||
Assumed obligations | $ 169,255 | $ 169,255 |
Investments - Summary of Invest
Investments - Summary of Investment (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale securities, Cost Basis | $ 10,750,000 | |
Available-for-sale securities, Fair Value | 12,067,983 | |
Common Stock | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale securities, Cost Basis | 153,970 | $ 563,211 |
Available-for-sale securities, Unrealized Gain | 36,289 | |
Available-for-sale securities, Unrealized Loss | (19,981) | |
Available-for-sale securities, Fair Value | $ 133,989 | $ 599,500 |
Investments - Additional Inform
Investments - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Investments [Abstract] | ||||
Gross realized gains and (losses) | $ 0 | $ 0 | $ 76,935 | $ 0 |
Investments - Summary of Non-Cu
Investments - Summary of Non-Current Investments Re-Measured to Fair Value on a Recurring Basis (Details) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Schedule Of Available For Sale Securities [Line Items] | |
Available-for-sale securities, Cost Basis | $ 10,750,000 |
Available-for-sale securities, Accrued Fees | 702 |
Available-for-sale securities, Unrealized Gain | 1,317,281 |
Available-for-sale securities, Fair Value | 12,067,983 |
Alluvial Fund, LP | |
Schedule Of Available For Sale Securities [Line Items] | |
Available-for-sale securities, Cost Basis | 10,000,000 |
Available-for-sale securities, Accrued Fees | 702 |
Available-for-sale securities, Unrealized Gain | 1,317,281 |
Available-for-sale securities, Fair Value | 11,317,983 |
Huckleberry Real Estate Fund II, LLC | |
Schedule Of Available For Sale Securities [Line Items] | |
Available-for-sale securities, Cost Basis | 750,000 |
Available-for-sale securities, Fair Value | $ 750,000 |
Fair Value of Assets and Liab36
Fair Value of Assets and Liabilities - Schedule of Marketable Securities at Fair Value (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 12,067,983 | |
Marketable securities, excluded | 11,317,983 | |
Alluvial Fund, LP | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Marketable securities | 11,317,983 | |
Marketable securities, excluded | 11,317,983 | |
Huckleberry Real Estate Fund II, LLC | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Marketable securities | 750,000 | |
Fair Value Measurements Recurring | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Marketable securities | 12,201,972 | |
Fair Value Measurements Recurring | Marketable Equity Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Marketable securities | 133,989 | $ 599,500 |
Fair Value Measurements Recurring | Fair Value, Inputs, Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Marketable securities | 133,989 | |
Fair Value Measurements Recurring | Fair Value, Inputs, Level 1 | Marketable Equity Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Marketable securities | 133,989 | $ 599,500 |
Fair Value Measurements Recurring | Fair Value, Inputs, Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Marketable securities | 750,000 | |
Fair Value Measurements Recurring | Huckleberry Real Estate Fund II, LLC | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Marketable securities | 750,000 | |
Fair Value Measurements Recurring | Huckleberry Real Estate Fund II, LLC | Fair Value, Inputs, Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 750,000 |
Fair Value of Assets and Liab37
Fair Value of Assets and Liabilities - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Goodwill impairment | $ 0 | |
HVAC | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Net downward adjustment to goodwill | $ (14,504) | |
Fair Value, Measurements, Nonrecurring | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Goodwill impairment | 0 | |
Downward adjustment of carrying value of properties | $ 10,001 | $ 152,411 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Cost of Property and Equipment (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 468,325 | $ 176,924 |
Less accumulated depreciation | (96,828) | (33,460) |
Property and equipment, net | 371,497 | 143,464 |
Automobile | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 264,778 | 115,688 |
Computer and Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 178,341 | 36,030 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 25,206 | $ 25,206 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Property Plant And Equipment [Abstract] | ||
Depreciation expense | $ 65,258 | $ 10,172 |
Real Estate - Additional Inform
Real Estate - Additional Information (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017USD ($)Property | Sep. 30, 2017USD ($)Property | Dec. 31, 2016USD ($) | |
Real Estate [Line Items] | |||
Real estate - held for resale | $ 337,481 | $ 337,481 | $ 1,399,280 |
Number of properties purchase | Property | 0 | ||
Depreciation expense | 65,258 | 10,172 | |
Properties held for investment | $ 502,368 | 502,368 | $ 506,011 |
Properties held for resale | 337,481 | 337,481 | |
Real Estate Held for Investment | |||
Real Estate [Line Items] | |||
Depreciation expense | 17,051 | ||
Accumulated depreciation | $ 81,057 | $ 81,057 | |
Residential Properties | |||
Real Estate [Line Items] | |||
Number of real estate properties owned | Property | 10 | 10 | |
Number of real estate properties sold | Property | 3 | 3 | |
Gross proceeds from sale of properties | $ 299,900 | ||
Net proceeds from sale of properties | 271,037 | ||
Real estate - held for resale | $ 275,541 | $ 275,541 | |
Residential Properties | Real Estate Held for Investment | |||
Real Estate [Line Items] | |||
Number of real estate properties owned | Property | 8 | 8 | |
Residential Properties | Real Estate Held for Resale | |||
Real Estate [Line Items] | |||
Number of real estate properties owned | Property | 2 | 2 | |
Commercial Properties | |||
Real Estate [Line Items] | |||
Number of real estate properties owned | Property | 1 | 1 | |
Commercial Properties | Real Estate Held for Resale | |||
Real Estate [Line Items] | |||
Number of real estate properties owned | Property | 1 | 1 |
Notes Payable - Summary of Note
Notes Payable - Summary of Notes Payable (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Less current portion | $ (449,363) | $ (240,000) |
Long-term portion | 209,272 | 25,000 |
HVAC Value Fund, LLC | Interest Bearing Notes Payable | ||
Debt Instrument [Line Items] | ||
Notes payable | 25,000 | 250,000 |
HVAC Value Fund, LLC | Interest Bearing Notes Payable | Line of Credit | ||
Debt Instrument [Line Items] | ||
Notes payable | 289,637 | |
HVAC Value Fund, LLC | Non-Interest Bearing Notes Payable | ||
Debt Instrument [Line Items] | ||
Notes payable | 73,838 | $ 15,000 |
HVAC Value Fund, LLC | Equipment and Vehicle Capital Leases | ||
Debt Instrument [Line Items] | ||
Notes payable | 132,560 | |
EDI Real Estate, LLC | Interest Bearing Notes Payable | Real Estate Held for Investment | ||
Debt Instrument [Line Items] | ||
Notes payable | $ 137,600 |
Notes Payable - Additional Info
Notes Payable - Additional Information (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017USD ($)Note | Jun. 30, 2017USD ($) | Mar. 31, 2017Acquisition | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($)Acquisition | |
HVAC Value Fund, LLC | |||||
Debt Instrument [Line Items] | |||||
Number of acquisition | Acquisition | 5 | ||||
Number of additional acquisition | Acquisition | 1 | ||||
HVAC Value Fund, LLC | Non-Interest Bearing Notes Payable | |||||
Debt Instrument [Line Items] | |||||
Notes payable | $ 73,838 | $ 73,838 | $ 15,000 | ||
Debt instrument, maturity date | Jul. 1, 2017 | ||||
HVAC Value Fund, LLC | Notes Payable | |||||
Debt Instrument [Line Items] | |||||
Number of acquisition | Acquisition | 4 | ||||
HVAC Value Fund, LLC | First Interest Bearing Notes Payable | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, maturity date | Jun. 16, 2017 | ||||
Debt instrument, interest rate | 7.00% | ||||
HVAC Value Fund, LLC | Second Interest Bearing Notes Payable | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, maturity date | Jul. 11, 2017 | ||||
Debt instrument, interest rate | 6.00% | ||||
HVAC Value Fund, LLC | Third Interest Bearing Notes Payable | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, maturity date | Jul. 30, 2017 | ||||
Debt instrument, interest rate | 7.00% | ||||
HVAC Value Fund, LLC | Notes Payable from Additional Acquisition | |||||
Debt Instrument [Line Items] | |||||
Notes payable | $ 100,000 | ||||
HVAC Value Fund, LLC | Note Payable due June 16, 2018 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate | 7.00% | ||||
HVAC Value Fund, LLC | Note Payable due June 16, 2018 | First Interest Bearing Notes Payable | |||||
Debt Instrument [Line Items] | |||||
Notes payable | $ 25,000 | ||||
Debt instrument, maturity date | Jun. 16, 2018 | ||||
EDI Real Estate, LLC | Promissory notes due September 15, 2022 | Real Estate Held for Investment | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, maturity date | Sep. 15, 2022 | ||||
Number of promissory notes | Note | 2 | ||||
Notes, interest payment term | Notes pay interest quarterly and are due September 15, 2022 with early payoff permitted | ||||
Notes, frequency of interest payment | Quarterly | ||||
Note Payable due July 1, 2017 | HVAC Value Fund, LLC | Non-Interest Bearing Notes Payable | |||||
Debt Instrument [Line Items] | |||||
Notes payable | $ 15,000 | ||||
Note Payable due June 16, 2017 | HVAC Value Fund, LLC | First Interest Bearing Notes Payable | |||||
Debt Instrument [Line Items] | |||||
Notes payable | $ 25,000 | ||||
Note Payable due July 11, 2017 | HVAC Value Fund, LLC | Second Interest Bearing Notes Payable | |||||
Debt Instrument [Line Items] | |||||
Notes payable | 100,000 | ||||
Note Payable due July 30, 2017 | HVAC Value Fund, LLC | Third Interest Bearing Notes Payable | |||||
Debt Instrument [Line Items] | |||||
Notes payable | $ 100,000 |
Accounts Receivable and Bad D43
Accounts Receivable and Bad Debt Expense - Additional Information (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | |
Receivables [Abstract] | |||
Bad debt expense | $ 15,281 | $ 34 | $ 4,383 |
Accounts receivable | $ 481,123 | $ 212,751 |
Accounts Receivable and Bad D44
Accounts Receivable and Bad Debt Expense - Schedule of Accounts Receivable (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | ||
Gross accounts receivable | $ 483,123 | $ 213,624 |
Less allowance for doubtful accounts | (2,000) | (873) |
Accounts receivable, net | $ 481,123 | $ 212,751 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017SegmentBusinessUnit | |
Segment Reporting Information [Line Items] | |||
Number of business units | BusinessUnit | 5 | ||
Number of reportable segments | Segment | 5 | ||
United States | Internet | |||
Segment Reporting Information [Line Items] | |||
Revenue | $ 295,371 | $ 331,480 | |
Canada | Internet | |||
Segment Reporting Information [Line Items] | |||
Revenue | $ 18,831 | $ 23,904 |
Segment Information - Summary o
Segment Information - Summary of Financial Information Concerning Company's Reportable Segments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Revenues | $ 2,686,083 | $ 1,667,217 | $ 7,041,540 | $ 4,000,586 | |
Cost of revenue | 1,263,672 | 1,092,456 | 3,809,602 | 2,841,699 | |
Net income (loss) before income taxes | 807,156 | 34,202 | 1,443,048 | 104,522 | |
Goodwill | 1,991,994 | 1,266,296 | 1,991,994 | 1,266,296 | $ 1,553,745 |
Identifiable assets | 16,469,175 | 8,494,270 | 16,469,175 | 8,494,270 | $ 9,841,232 |
Corporate | |||||
Net income (loss) before income taxes | (167,120) | (315,062) | (403,869) | (645,927) | |
Identifiable assets | 201,291 | 3,840,647 | 201,291 | 3,840,647 | |
Internet | |||||
Revenues | 314,202 | 355,384 | 977,629 | 1,068,283 | |
Cost of revenue | 81,144 | 70,290 | 237,098 | 290,043 | |
Net income (loss) before income taxes | 172,415 | 285,847 | 585,930 | 614,670 | |
Goodwill | 212,445 | 212,445 | 212,445 | 212,445 | |
Identifiable assets | 315,754 | 614,610 | 315,754 | 614,610 | |
HVAC | |||||
Revenues | 1,332,239 | 906,910 | 3,526,913 | 939,932 | |
Cost of revenue | 875,991 | 619,881 | 2,307,902 | 633,053 | |
Net income (loss) before income taxes | 119,681 | 66,370 | 88,774 | 74,922 | |
Goodwill | 1,779,549 | 1,053,851 | 1,779,549 | 1,053,851 | |
Identifiable assets | 2,787,303 | 1,921,609 | 2,787,303 | 1,921,609 | |
Real Estate | |||||
Revenues | 324,044 | 404,923 | 1,216,190 | 1,992,371 | |
Cost of revenue | 306,537 | 402,285 | 1,264,602 | 1,918,603 | |
Net income (loss) before income taxes | 8,126 | (2,953) | (68,810) | 60,857 | |
Identifiable assets | 1,072,849 | $ 2,117,404 | 1,072,849 | $ 2,117,404 | |
Asset Management | |||||
Revenues | 715,598 | 1,320,808 | |||
Net income (loss) before income taxes | 674,054 | 1,241,023 | |||
Identifiable assets | $ 12,091,978 | $ 12,091,978 |
Adjustment to Opening Balance47
Adjustment to Opening Balance Number of Shares and Cancellation of Treasury Shares - Additional Information (Details) - shares | 3 Months Ended | |||
Sep. 30, 2017 | Mar. 31, 2017 | Nov. 09, 2017 | Dec. 31, 2016 | |
Quantifying Misstatement In Current Year Financial Statements [Line Items] | ||||
Number of treasury shares held overstated | 100,000 | |||
Misstatement percentage on shares outstanding | 0.035% | |||
Treasury shares cancelled | 2,125,795 | |||
Common Stock Shares Outstanding | 282,830,163 | 190,230,163 | ||
Common Shares Treasury Stock | 11,696,658 | 13,822,453 | ||
Subsequent Event | ||||
Quantifying Misstatement In Current Year Financial Statements [Line Items] | ||||
Common Stock Shares Outstanding | 282,830,163 | |||
Common Shares Treasury Stock | 11,696,658 |