Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Apr. 17, 2018 | Jun. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | SeD Intelligent Home Inc. | ||
Entity Central Index Key | 1,503,658 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 2,053 | ||
Entity Common Stock, Shares Outstanding | 704,043,324 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Real Estate | ||
Construction in Progress | $ 30,104,201 | $ 26,146,557 |
Land Held for Development | 24,302,643 | 25,449,641 |
Real Estate Held For Sale | 136,248 | 1,319,368 |
Real Estate Assets | 54,543,092 | 52,915,566 |
Cash | 358,233 | 424,548 |
Restricted Cash | 2,656,670 | 2,631,761 |
Other Receivable | 513,043 | 0 |
Rent Receivable | 0 | 18,260 |
Prepaid Expenses | 49,903 | 85,449 |
Fixed Assets, Net | 22,062 | 34,623 |
Deposits | 23,603 | 23,603 |
Total Assets | 58,166,606 | 56,133,810 |
Liabilities | ||
Accounts Payable and Accrued Expenses | 1,131,116 | 1,493,224 |
Accrued Interest - Related Parties | 1,935,222 | 6,284,302 |
Tenant Security Deposits | 2,625 | 5,175 |
Builder Deposits | 5,356,718 | 5,900,000 |
Notes Payable, Net of Debt Discount | 8,132,020 | 12,864,712 |
Notes Payable - Related Parties, Net of Debt Discount | 8,003,591 | 500,000 |
Total Liabilities | 24,561,292 | 27,047,413 |
Stockholders' Equity | ||
Common Stock, at par $0.001, 1,000,000,000 shares authorized and 704,043,324 issued, and outstanding at December 31, 2017 and 2016, respectively | 704,043 | 704,043 |
Additional Paid In Capital | 32,739,017 | 27,970,331 |
Accumulated deficit | (2,092,837) | (1,865,859) |
Total Stockholders' Equity | 31,350,223 | 26,808,515 |
Non-controlling Interest | 2,255,091 | 2,277,882 |
Total Stockholders' Equity | 33,605,314 | 29,086,397 |
Total Liabilities and Stockholders' Equity | $ 58,166,606 | $ 56,133,810 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock, Par Value | $ .001 | $ .001 |
Common stock, Authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, Issued | 704,043,324 | 704,043,324 |
Common stock, Outstanding | 704,043,324 | 704,043,324 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue | ||
Rental Income | $ 88,438 | $ 230,059 |
Property Sales | 6,868,604 | 800,000 |
Total Revenue | 6,957,042 | 1,030,059 |
Operating Expenses | ||
Cost of Sales | 6,217,779 | 970,397 |
General and Administrative Expenses | 1,118,540 | 1,213,029 |
Total Operating Expenses | 7,336,319 | 2,183,426 |
Loss From Operations | (379,277) | (1,153,367) |
Other Income | ||
Interest Income | 24,909 | 31,761 |
Other Income | 104,599 | 9,984 |
Total Other Income | 129,508 | 41,745 |
Net Loss Before Income Taxes | (249,769) | (1,111,622) |
Provision for Income Taxes | 0 | 0 |
Net Loss | (249,769) | (1,111,622) |
Net Loss Attributable to Non-controlling Interest | (22,791) | (148,191) |
Net Loss Attributable to Common Stockholders | $ (226,978) | $ (963,431) |
Net Loss Per Share - Basic and Diluted | $ 0 | $ 0 |
Weighted Average Common Shares Outstanding - Basic and Diluted | 704,043,324 | 704,043,324 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Deficit - USD ($) | Common Stock | Discount on Common Stock | Additional Paid-In Capital | Accumulated Deficits | Non-controlling Interest | Total |
Beginning Balance, Shares at Dec. 31, 2015 | 704,043,324 | |||||
Beginning Balance, Amount at Dec. 31, 2015 | $ 704,043 | $ (37,000) | $ 72,125 | $ (902,428) | $ 2,426,073 | $ 2,262,748 |
Proceeds from majority stockholders | 37,000 | 21,000 | 58,000 | |||
Imputed interest on related party note | 963,681 | 963,681 | ||||
Forgiveness of debt - related party | 26,913,525 | 26,913,525 | ||||
Net loss | (902,428) | (148,191) | (1,111,622) | |||
Ending Balance, Shares at Dec. 31, 2016 | 704,043,324 | |||||
Ending Balance, Amount at Dec. 31, 2016 | $ 704,043 | 0 | 27,970,331 | (1,865,859) | 2,277,882 | 29,086,397 |
Proceeds from majority stockholders | 178,601 | 178,601 | ||||
Forgiveness of debt - related party | 4,590,085 | 4,590,085 | ||||
Net loss | (226,978) | (22,791) | (249,769) | |||
Ending Balance, Shares at Dec. 31, 2017 | 704,043,324 | |||||
Ending Balance, Amount at Dec. 31, 2017 | $ 704,043 | $ 0 | $ 32,739,017 | $ (2,092,837) | $ 2,255,091 | $ 33,605,314 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash Flows From Operating Activities | ||
Net Loss | $ (249,769) | $ (1,111,622) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 20,453 | 15,959 |
Impairment of Real Estate | 0 | 29,281 |
Changes in Operating Assets and Liabilities | ||
Rent Receivable | 18,260 | 10,597 |
Other Receivable | (513,043) | 0 |
Prepaid Expenses | 35,546 | (18,783) |
Accounts Payable and Accrued Expenses | (362,108) | 166,068 |
Accrued Interest - Related Parties | 211,005 | 2,662,189 |
Tenant Security Deposits | (2,550) | (5,725) |
Real Estate Purchases and Development Costs | (1,302,568) | (13,782,784) |
Builder Deposits | (543,282) | 0 |
Net Cash Used In Operating Activities | (2,688,056) | (12,034,820) |
Cash Flows From Investing Activities | ||
Cash Paid for Deposits | 0 | (2,112) |
Change in Restricted Cash | (24,909) | (31,761) |
Purchase of Fixed Assets | (7,892) | (9,074) |
Net Cash Used In Investing Activities | (32,801) | (42,947) |
CASH FLOW FROM FINANCING ACTIVITIES | ||
Capital Contribution - Related Party | 208,601 | 58,000 |
Proceeds from Notes Payable | 1,052,350 | 9,941,942 |
Repayments to Note Payable | (6,000,000) | 0 |
Financing Fees Paid | (110,000) | (109,285) |
Net Proceeds from Notes Payable - Related Parties | 7,503,591 | 318,881 |
Net Cash Provided By Financing Activities | 2,654,542 | 10,209,538 |
Net Decrease in Cash | (66,315) | (1,868,229) |
Cash - Beginning of Year | 424,548 | 2,292,777 |
Cash - End of Year | 358,233 | 424,548 |
Supplementary Cash Flow Information | ||
Cash Paid For Interest | 905,376 | 896,690 |
Cash Paid For Taxes | 0 | 0 |
Supplemental Disclosure of Non-Cash Investing and Financing Activities | ||
Debt Discount From Related Party Imputed Interest | 0 | 963,681 |
Forgiveness of Notes Payable - Related Parties | 4,560,085 | 26,913,525 |
Amortization of Debt Discount Capitalized | $ 324,958 | $ 608,125 |
1. NATURE OF OPERATIONS AND SUM
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
Nature Of Operations And Basis Of Presentation | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Nature of Operations SeD Intelligent Home Inc. (the Company), formerly known as Homeownusa, was incorporated in the State of Nevada on December 10, 2009. On December 29, 2017, the Company, acquired SeD Home Inc. (“SeD Home”) by reverse merger. SeD Home, a Delaware corporation, formed on February 24, 2015, is principally engaged in developing, selling, managing, and leasing commercial properties in the United States. The Company is 99.99% owned by SeD Home International, Inc., which is wholly – owned by Singapore eDevelopment Limited, a multinational public company, listed on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Principles of Consolidation The consolidated financial statements include all accounts of the entities as of the reporting period ending dates and for the reporting periods as follows: Name of consolidated subsidiary State or other jurisdiction of incorporation or organization Date of incorporation or formation Attributable interest SeD Home Inc. The State of Delaware, U.S.A. February 24, 2015 100% SeD USA, LLC The State of Delaware, U.S.A. August 20, 2014 100% 150 Black Oak GP, Inc. The State of Texas, U.S.A. January 23, 2014 100% SeD Development USA, Inc. The State of Delaware, U.S.A. March 13, 2014 100% 150 CCM Black Oak Ltd. The State of Texas, U.S.A. January 23, 2014 69% SeD Ballenger, LLC The State of Delaware, U.S.A. July 7, 2015 100% SeD Maryland Development, LLC The State of Delaware, U.S.A. October 16, 2014 83.55% SeD Development Management, LLC The State of Delaware, U.S.A. June 18, 2015 85% SeD Builder, LLC The State of Delaware, U.S.A. October 21, 2015 100% SeD Texas Home, LLC The State of Delaware, U.S.A. June 16, 2015 100% All intercompany balances and transactions have been eliminated. Non–controlling interest represents the minority equity investment in the Company’s subsidiaries, plus the minority investors’ share of the net operating results and other components of equity relating to the non–controlling interest. As of December 31, 2017, the aggregate non-controlling interest in SeD Home, Inc. was, $2,255,091 which is separately disclosed on the Consolidated Balance Sheet. On December 29, 2017, the Company, SeD Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of the Company (the “Merger Sub”), SeD Home, Inc. (“SeD Home”), a Delaware corporation, and SeD Home International, Inc., a Delaware corporation entered into an Acquisition Agreement and Plan of Merger (the “Agreement”) pursuant to which the Merger Sub was merged with and into SeD Home, with SeD Home surviving as a wholly-owned subsidiary of the Company. The closing of this transaction (the “Closing”) also took place on December 29, 2017 (the “Closing Date”). Prior to the Closing, SeD Home International, Inc. was the owner of 100% of the issued and outstanding common stock of SeD Home and was also the owner of 99.96% of the Company’s issued and outstanding common stock. The Company acquired all of the outstanding common stock of SeD Home from SeD Home International, Inc. in exchange for issuing to SeD Home International, Inc. 630,000,000 shares of the Company’s common stock. Accordingly, SeD Home International, Inc. remains the Company’s largest shareholder, and the Company is now the sole shareholder of SeD Home. The Agreement and the transactions contemplated thereby were approved by the Board of Directors of each of the Company, the Merger Sub, SeD Home International, Inc., and SeD Home. The Agreement is considered a business combination of companies under common control and therefore, the consolidated financial statements include the financial statements of both companies. The accompanying consolidated financial statements have been retrospectively restated as a result of an acquisition of another company under common control with the Company. Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements. Actual results could differ from those estimates. Loss per Common Share Basic loss per share is computed by dividing the net loss attributable to the common stockholders by weighted average number of shares of common stock outstanding during the period. Fully diluted loss per share is computed similar to basic loss per 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. There were no dilutive financial instruments issued or outstanding for the periods ended December 31, 2017 or 2016. Fair Value of Financial Instruments For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the Company’s short-term financial instruments approximates fair value due to the relatively short period to maturity for these instruments. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less at the date of acquisition to be cash equivalents. There were no cash equivalents as of December 31, 2017 and 2016. Restricted Cash As a condition to the loan agreement with The Bank of Hampton Roads, the Company is required to maintain a minimum of $2,600,000 in an interest-bearing account maintained by the lender as additional security for the loans. The funds will remain as collateral for the loans until the loans are paid off in full. Rent Receivable Rent receivables are the result of outstanding rent due from tenants. Management reviews each receivable individually for collectability to determine if an allowance for doubtful accounts is needed. The allowance for doubtful accounts at December 31, 2017 and December 31, 2016 was $0. Other Receivables Other receivables include all receivables from buyers, vendors, contractors and all other third parties. The balance at December 31, 2017 is primarily a lot sale receivable for which no allowance is necessary. Property and Equipment Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives, which are 3 years. Real Estate Assets Real estate assets are recorded at cost, except when real estate assets are acquired that meet the definition of a business combination in accordance with Financial Accounting Standards Board (“FASB”) ASC 805, “Business Combinations,” which acquired assets are recorded at fair value. Interest, property taxes, insurance and other incremental costs (including salaries) directly related to a project are capitalized during the construction period of major facilities and land improvements. The capitalization period begins when activities to develop the parcel commence and ends when the asset constructed is completed. The capitalized costs are recorded as part of the asset to which they relate and are reduced when lots are sold. The Company capitalized interest from related party borrowings of $211,005 and $2,662,189 for the years ended December 31, 2017 and 2016, respectively. The Company capitalized interest from the third-party borrowings of $1,008,220 and $911,764 for the years ended December 31, 2017 and 2016, respectively. A property is classified as “held for sale” when all of the following criteria for a plan of sale have been met: (1) management, having the authority to approve the action, commits to a plan to sell the property. (2) the property is available for immediate sale in its present condition, subject only to terms that are usual and customary. (3) an active program to locate a buyer and other actions required to complete the plan to sell, have been initiated. (4) the sale of the property is probable and is expected to be completed within one year or the property is under a contract to be sold. (5) the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value. and (6) actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. When all of these criteria have been met, the property is classified as “held for sale”. “Real estate held for sale” only includes El Tesoro project and D street project. Through December 31, 2017, it was the Company’s policy to obtain an independent third-party valuation for each project every two years to test for impairment. Every reporting period, the Company compared the book value to the fair value obtained in the most recent valuation and looks at market conditions to see if there are any indicators of impairment. If any indicators are noted, the Company will obtain a new valuation and compare the fair value to the book value. Beginning in 2018, it is the Company’s policy to obtain annual independent third-party valuations as of December 31 for each property and compare the fair value from the valuation to the book value to determine if there any impairment. At December 31, 2016, the Company recognized $29,281 of impairment related to the D Street Home Remodeling Project. There was no impairment for the Black Oak or Ballenger Run Projects. At December 31, 2017, there was no impairment recognized for any of the projects. Revenue Recognition and Cost of Sales The Company recognizes sales of lots only upon closing under the full accrual method. Revenue is recognized when ownership of the lots is transferred to the buyer (HUDs are executed). Land acquisition costs are allocated to each lot based on the size of the lot comparing to the total size of all lots in the project. Development costs and capitalized interest are allocated to lots sold based on the total expected development and interest costs of the completed project and allocating a percentage of those costs based on the selling price of the sold lot compared to the expected sales values of all lots in the project. Income Taxes Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss and credit carry-forwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The differences relate primarily to net operating loss carryforward from date of acquisition and to the use of the cash basis of accounting for income tax purposes. The Company records an estimated valuation allowance on its deferred income tax assets if it is more likely than not that these deferred income tax assets will not be realized. The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company has not recorded any unrecognized tax benefits. The Company’s tax returns for 2017, 2016, 2015 and 2014 remain open to examination. Subsequent Events The Company evaluated the events and transactions subsequent to December 31, 2017, the balance sheet date, in accordance with FASB ASC 855-10-50, through April 17, 2018, which to the date the consolidated financial statements were available to be issued. |
2. CONCENTRATION OF CREDIT RISK
2. CONCENTRATION OF CREDIT RISK | 12 Months Ended |
Dec. 31, 2017 | |
Concentration Of Credit Risk | |
CONCENTRATION OF CREDIT RISK | The group maintains cash balances at various financial institutions. These balances are secured by the Federal Deposit Insurance Corporation. At times, these balances may exceed the federal insurance limits. At December 31, 2017 and 2016, uninsured cash balances were $2,514,903 and $2,406,597 respectively. |
3. PROPERTY AND EQUIPMENT
3. PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2017 | |
Property And Equipment | |
PROPERTY AND EQUIPMENT | Property and equipment stated at cost, less accumulated depreciation and amortization, consisted of the following: December 31, 2017 December 31, 2016 Computer Equipment $ 41,597 $ 34,755 Furniture and Fixtures 21,393 20,343 62,990 55,098 Accumulated Depreciation (40,928 ) (20,475 ) $ 22,062 $ 34,623 Depreciation expense was $20,453 and $15,959 for the years ended December 31, 2017 and 2016, respectively. |
4. BUILDER DEPOSITS
4. BUILDER DEPOSITS | 12 Months Ended |
Dec. 31, 2017 | |
Builder Deposits Abstract | |
BUILDER DEPOSITS | In November 2015, SeD Maryland Development, LLC (“Maryland”) entered into lot purchase agreements with NVR, Inc. (“NVR”) relating to the sale of single-family home and townhome lots to NVR in the Ballenger Run Project. Based on the agreements, NVR is entitled to purchase 443 lots for a price of approximately $56M over a 21-year period, which escalates 3% annually after June 1, 2018. As part of the agreements, NVR provided was required to give a deposit in the amount of $5,600,000. Upon the sale of lots to NVR, 9.9% of the purchase price is taken from the deposit. A violation of the agreements by NVR would cause NVR to forfeit the deposit. At December 31, 2017 and 2016, there was $5,056,718 and $5,600,000 outstanding, respectively. Black Oak LP received a deposit of $300,000 from Lexington 26 LP (Colina), a building company located in Texas. At December 31, 2017 and 2016, there was $300,000 outstanding, respectively. In February 2018, the deposit $300,000 was refunded to Colina since both sides agreed to the changed development plan of Colina. |
5. NOTES PAYABLE
5. NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2017 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | On October 7, 2015, the Company entered into a note for $6,000,000, bearing interest at 13%, with a maturity date of October 7, 2016 with Revere Bank. In connection with the loan, the Company incurred origination and closing fees of $524,233, which were recorded as debt discount and are amortized over the life of the loan. The loan is secured by a deed of trust on the property and a Limited Guarantee Agreement with an owner of the Company. On October 1, 2016, the loan was extended to April 1, 2017 for fees of $109,285. These fees were recorded as a debt discount under debt modification accounting are amortized over the extension period. As of December 31, 2016, there was $6,000,000 of principal outstanding and $54,652 of unamortized debt discount remaining. On April 1, 2017, the loan was again extended until October 1, 2017 for a fee of $110,000. These fees were recorded as a debt discount under debt modification accounting and were amortized over the extension period. As of September 30, 2017, the loan was fully repaid and there is no outstanding principal or unamortized debt discount. On November 23, 2015, SeD Maryland Development LLC entered into a Revolving Credit Note with The Bank of Hampton Roads in the original principal amount of $8,000,000. During the term of the loan, cumulative loan advances may not exceed $26,000,000. The line of credit bears interest at LIBOR plus 3.8% with a floor rate of 4.5%. The interest rate at December 31, 2017 was 5.1875%. Beginning December 1, 2015, interestonly payments are due on the outstanding principal balance. The entire unpaid principal and interest sum is due and payable on November 22, 2018, with the option of one twelvemonth extension period. The loan secured by a deed of trust on the property, $2,600,000 of collateral cash, a Limited Guaranty Agreement with the Company and a letter of credit of $800,000. The letter of credit is due on November 22, 2018 and bears interest at 15%. In September 2017, Maryland Development LLC and the Bank of Hampton Roads modified the Revolving Credit Note, which increased the original principal amount from $8,000,000 to $11,000,000 and extended the maturity date of the loan and letter of credit to December 31, 2019. As of December 31, 2017 and 2016, the principal balance is $8,272,297 and $7,219,947, respectively. As part of the transaction, the Company incurred loan origination fees and closing fees, totaling $480,947, which were recorded as debt discount and are amortized over the life of the loan. The unamortized debt discount was $140,277 and $300,592 at December 31, 2017 and 2016, respectively. |
6. RELATED PARTY TRANSACTIONS
6. RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Notes Payable SeD Home receives advances from Singapore eDevelopment Ltd (100% owner of the Company) to fund development costs and operation costs. The advances are unsecured, bear interest at 18% per annum and are payable on demand. As of December 31, 2015, the Company had outstanding principal due of $12,293,715 and accrued interest of $2,161,055 due to this related party. SeD Home receives advances from SCDPL (owned 100% by Singapore eDevelopment) to fund development costs and operation costs. The advances are unsecured, bear interest at 18% per annum and are payable on demand. As of December 31, 2015, the Company had outstanding principal due of $4,300,930 and accrued interest of $1,461,058 due to this related party. On September 30, 2015, SeD Home received $10,500,000 interest free loan, with a maturity date of March 31, 2016, from Hengfai Business Development Pte, Ltd, owned by the Chief Executive Officer of Singapore eDevelopment Ltd and is also the majority shareholder of Singapore eDevelopment Ltd, specifically for Ballenger Run project. SeD Home imputed interest at 13%, which is the interest rate on the Revere Loan noted in Note 5. The imputed interest resulted in a debt discount of $622,431 which is amortized over the life of the note. At December 31, 2015, SeD Home had $10,500,000 outstanding on the note and unamortized debt discount of $311,216. On April 1, 2016, SeD Home extended the note on the same terms through December 31, 2016. This resulted in an additional $933,647 of new imputed interest which was amortized during 2016. At December 31, 2016, considering the longterm development and shortterm debt repayment, SeD Home restructured the loans from these affiliates. The restructuring process was done to transfer the principal of the loans to Singapore eDevelopment Ltd. (100% owner of the Company), which was then forgiven and recorded into additional paid in capital. The principal forgiven was $26,913,525. SeD Home still maintained the accrued interest of $6,283,207. The remaining accrued interest does not bear interest. On August 30, 2017, an additional $4,560,085 of this interest was forgiven and recorded into additional paid in capital. At December 31, 2017, $1,723,122of accrued interest is outstanding relating to this transaction. SeD Home receives advances from SeD Home Limited (an affiliate of Singapore eDevelopment), to fund development and operation costs. The advances bear interest at 10% and are payable on demand. As of December 31, 2017 and December 31, 2016, SeD Home had outstanding principal due of $1,050,000 and $500,000 and accrued interest of $86,425 and $1,095. SeD Home receives advances from SeD Home International. (an affiliate through common ownership). The advances bore interest at 18% until August 30, 2017 when the interest rate was adjusted to 5% and have no set repayment terms. At December 31, 2017, there was $6,953,591 of principal and $125,675 of accrued interest outstanding. There were no amounts outstanding at December 31, 2016. During 2017, prior to the reverse merger, SeD Intelligent Home Inc. borrowed $30,000 from SeD Home International Inc. The borrowings did not bear any interest. In November 2017, the debt was forgiven by SeD Home International Inc. and was recognized into additional paid in capital. Other Transactions On November 29, 2016 an affiliate of SeD Home entered into three $500,000 bonds for a total of $1.5 million that are to incur annual interest at eight percent and the principal shall be paid in full on November 29, 2019. SeD Home agreed to guarantee the payment obligations of these bonds. Further, at the maturity date, the bondholder has the right to propose to acquire a property built by SeD Home, and SeD will facilitate that transaction. The proposed acquisition purchase price would be at SeD Home's cost. If the cost price is more than $1.5 million, the proposed acquirer would pay the difference, and if the cost price is below $1.5 million, the affiliate of SeD would pay the difference in cash. Reverse Merger As described in Note 1, the reverse merger was done with a related party through common control and ownership. Management Fees Black Oak LP is obligated under the Limited Partnership Agreement (as amended) to pay a $6,500 per month management fee to Arete Real Estate and Development Company (Arete), a related party through common ownership and $2,000 per month to American Real Estate Investments LLC (AREI), a related party through common ownership. The Company incurred fees of $102,000 and $102,000 for the years ended December 31, 2017 and 2016, respectively. These fees were capitalized as part of Real Estate on the consolidated balance sheet. Arete is also entitled to a developer fee of 3% of all development costs excluding certain costs. The fees are to be accrued until $1,000,000 is received in revenue and/or builder deposits relating to the Black Oak Project. At December 31, 2017 and 2016, there were $133,130 and $0 capitalized as Real Estate relating to these costs. At December 31, 2017 and 2016, the Company had $314,630 and $103,700 owed to Arete in accounts payable and accrued expenses. At December 31, 2017 and 2016, the Company had $48,000 and $24,000 owed to AREI in accounts payable and accrued expenses. SeD Maryland Development LLC is obligated under the terms of a Project Development and Management Agreement with Mackenzie Development Company LLC (MacKenzie) and Cavalier Development Group LLC (Cavalier) (together, the Developers) to provide various services for the development, construction and sale of the Project. Mackenzie is partially owned by a family member of a Director of the Company. The agreement is for an estimated initial term of seventyeight (78) months based on the completion time for the Project and may be extended if necessary. The developers are entitled to certain fees based on time and performance related milestones. The Company incurred fees of $176,000 and $176,000 for the years ended December 31, 2017 and 2016, respectively. These fees were capitalized as part of Real Estate on the consolidated balance sheet. There were no amounts owed to this related party at December 31, 2017 or 2016. MacKenzie Equity Partners, owned by a Charlie MacKenzie, a Director of the Company, has a consulting agreement with the Company since 2015. Per the terms of the agreement the Company must pay a monthly fee of $12,500 and a 2% management fee. In May 2017, the agreement was amended to increase the monthly fee to $20,000. The Company incurred expenses of $222,930 and $186,095 for the years ended December 31, 2017 and 2016, respectively, which were capitalized as part of Real Estate on the balance sheet as the services relate to property and project management. There were no amounts owed to this related party at December 31, 2017 or 2016. Consulting Services A law firm, owned by Conn Flanigan, a Director of the Company, performs consulting services for the Company. The Company incurred expenses of $110,334 and $96,000 for the years ended December 31, 2017 and 2016, respectively. At December 31, 2017 and 2016, the Company owed this related party $17,730 and $8,000, respectively. |
7. STOCKHOLDERS_ EQUITY
7. STOCKHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders Equity | |
STOCKHOLDERS’ EQUITY | On August 28, 2017 the Company increased its authorized shares from 75,000,000 to 1,000,000,000 common shares with a par value of $0.001 per share. No preferred shares have been authorized or issued. On July 7, 2014 CloudBiz invested $37,000 in the Company. For such investment, CloudBiz received an additional 74 million common shares. The 74 million common shares were issued below par at a discount. The discount of $37,000 was recorded as a “discount on common stock” in equity. In February of 2016, the Company received an additional $18,000 from Cloudbiz International Pte. Ltd., its majority shareholder, to assist the Company in paying for operating expenses. The $18,000 was applied to "discount on common stock". In October of 2016, The Company received an additional $40,000 from Cloudbiz International Pte. Ltd., its majority shareholder, to assist the Company in paying for operating expenses. Of the $58,000 of proceeds received from Cloudbiz International Pte. Ltd, $37,000 were applied to "discount on common stock" and the remaining proceeds were applied to additional paid-in-capital. On December 22, 2016 Cloudbiz International Pte. Ltd transferred 74,015,730 common shares to Singapore eDevelopment Ltd. Such shares are presently owned by SeD Home International, Inc., a wholly-owned subsidiary of Singapore eDevelopment Ltd. Effective September 30, 2015, the Company entered into a non-interest bearing note with a related party (see Note 6), for which interest was imputed. Imputed interest recorded to additional paid in capital for the years ended December 31, 2016 and 2015 was $622,431 and $963,681, respectively. As discussed in Note 6, on December 31, 2016, $26,913,525 of related party notes payable was forgiven and recorded as additional paid in capital. In 2017, SeD International, a related party through common ownership, contributed $178,600 into the Company. The related party also forgave $4,560,085 of accrued interest as of August 30, 2017. Per Note 1, 630,000,000 shares of common stock were issued on December 29, 2017 in connection with the reverse merger. |
8. COMMITMENTS AND CONTINGENCIE
8. COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies | |
COMMITMENTS AND CONTINGENCIES | Leases The Company leases office space in Texas and Maryland. The leases expire in 2018 and 2020, respectively and have monthly rental payments ranging between $2,050 and $8,205. Rent expense was $112,293 and $89,382 for the years ended December 31, 2017 and 2016, respectively. The below table summarizes future payments due under these leases as of December 31, 2017. For the Years Ended December 31: 2018 112,919 2019 94,325 2020 96,924 Total $ 304,167 Lot Sale Agreements In June 2016, SeD Maryland Development, LLC (“Maryland”) entered into a lot purchase agreement with Orchard Development Corporation (“Orchard”) relating to the sale of 210 multi-family units in the Ballenger Run Project for a total purchase price of $5,250,000 with a closing date of March 31, 2018. Based on the agreement, Orchard must put $100,000 into a third-party escrow account upon signing of the agreement and an additional $150,000 upon completion of the feasibility study, which occurred in November 2016. As of December 31, 2017 and 2016, $250,000 in deposits is held in the escrow account. Since the monies are held in an escrow account and not entitled to the Company, there is no deposit recorded by the Company. As of March 31, 2018, the agreement was amended to extend the closing date 30 days for an additional deposit of $25,000. The extension also provides two additional 30-day extensions which if exercised will require an additional $25,000 deposit each. In February 2018, Maryland entered into a lot purchase agreement with Orchard relating to the sale of the Continuing Care Retirement Community Assisted Independent Living lot in the Ballenger Run Project for a total purchase price of $2,900,000 with a closing date of December 15, 2019. Based on the agreement, the Orchard must put $50,000 into a third-party escrow account upon signing of the agreement and an additional $100,000 upon completion of the feasibility study. The initial deposit of $50,000 is refundable until completion of the feasibility study, which is expected to be completed in May 2018. |
9. INCOME TAXES
9. INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
INCOME TAXES | On December 22, 2017, President Trump signed into law the “Tax Cuts and Jobs Act” (TCJA) that significantly reformed the Internal Revenue Code of 1986, as amended. The TCJA reduces the corporate tax rate to 21 percent beginning with years starting January 1, 2018. Because a change in tax law is accounted for in the period of enactment, the deferred tax assets and liabilities have been adjusted to the newly enacted U.S. corporate rate, and the related impact to the tax expense has been recognized in the current year. Deferred tax assets and (liabilities) consist of the following at December 31, 2017: 2017 2016 Interest Income (10,747,413 ) (5,394,964 ) Interest Expense 10,864,958 6,903,509 Depreciation and Amortization (14,478 ) (3,489 ) Management Fees 1,554,564 924,011 Others 1,083,710 609,342 Net Operating Loss 1,897,940 1,398,402 4,639,281 4,436,811 Valuation Allowance (4,639,281 ) (4,436,811 ) Net Deferred Tax Asset - - At December 31, 2017, the Company has federal net operating loss carryforwards of approximately $4.7 million, which will begin to expire in 2037. The Maryland net operating loss carryforwards of approximately $4.3 million will begin to expire in 2037. The full utilization of the deferred tax assets in the future is dependent upon the Company’s ability to generate taxable income; accordingly, a valuation allowance of an equal amount has been established. During the years ended December 31, 2017 and 2016, the valuation allowance increased by $479 and $3,297,921, respectively. |
1. NATURE OF OPERATIONS AND S16
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Nature Of Operations And Summary Of Significant Accounting Policies Policies | |
Nature of Operations | SeD Intelligent Home Inc. (the Company), formerly known as Homeownusa, was incorporated in the State of Nevada on December 10, 2009. On December 29, 2017, the Company, acquired SeD Home Inc. (“SeD Home”) by reverse merger. SeD Home, a Delaware corporation, formed on February 24, 2015, is principally engaged in developing, selling, managing, and leasing commercial properties in the United States. The Company is 99.99% owned by SeD Home International, Inc., which is wholly – owned by Singapore eDevelopment Limited, a multinational public company, listed on the Singapore Exchange Securities Trading Limited (“SGX-ST”). |
Principles of Consolidation | The consolidated financial statements include all accounts of the entities as of the reporting period ending dates and for the reporting periods as follows: Name of consolidated subsidiary State or other jurisdiction of incorporation or organization Date of incorporation or formation Attributable interest SeD Home Inc. The State of Delaware, U.S.A. February 24, 2015 100% SeD USA, LLC The State of Delaware, U.S.A. August 20, 2014 100% 150 Black Oak GP, Inc. The State of Texas, U.S.A. January 23, 2014 100% SeD Development USA, Inc. The State of Delaware, U.S.A. March 13, 2014 100% 150 CCM Black Oak Ltd. The State of Texas, U.S.A. January 23, 2014 69% SeD Ballenger, LLC The State of Delaware, U.S.A. July 7, 2015 100% SeD Maryland Development, LLC The State of Delaware, U.S.A. October 16, 2014 83.55% SeD Development Management, LLC The State of Delaware, U.S.A. June 18, 2015 85% SeD Builder, LLC The State of Delaware, U.S.A. October 21, 2015 100% SeD Texas Home, LLC The State of Delaware, U.S.A. June 16, 2015 100% All intercompany balances and transactions have been eliminated. Non–controlling interest represents the minority equity investment in the Company’s subsidiaries, plus the minority investors’ share of the net operating results and other components of equity relating to the non–controlling interest. As of December 31, 2017, the aggregate non-controlling interest in SeD Home, Inc. was, $2,255,091 which is separately disclosed on the Consolidated Balance Sheet. On December 29, 2017, the Company, SeD Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of the Company (the “Merger Sub”), SeD Home, Inc. (“SeD Home”), a Delaware corporation, and SeD Home International, Inc., a Delaware corporation entered into an Acquisition Agreement and Plan of Merger (the “Agreement”) pursuant to which the Merger Sub was merged with and into SeD Home, with SeD Home surviving as a wholly-owned subsidiary of the Company. The closing of this transaction (the “Closing”) also took place on December 29, 2017 (the “Closing Date”). Prior to the Closing, SeD Home International, Inc. was the owner of 100% of the issued and outstanding common stock of SeD Home and was also the owner of 99.96% of the Company’s issued and outstanding common stock. The Company acquired all of the outstanding common stock of SeD Home from SeD Home International, Inc. in exchange for issuing to SeD Home International, Inc. 630,000,000 shares of the Company’s common stock. Accordingly, SeD Home International, Inc. remains the Company’s largest shareholder, and the Company is now the sole shareholder of SeD Home. The Agreement and the transactions contemplated thereby were approved by the Board of Directors of each of the Company, the Merger Sub, SeD Home International, Inc., and SeD Home. The Agreement is considered a business combination of companies under common control and therefore, the consolidated financial statements include the financial statements of both companies. The accompanying consolidated financial statements have been retrospectively restated as a result of an acquisition of another company under common control with the Company. |
Basis of Presentation | The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). |
Use of Estimates | The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements. Actual results could differ from those estimates. |
Loss per Common Share | Basic loss per share is computed by dividing the net loss attributable to the common stockholders by weighted average number of shares of common stock outstanding during the period. Fully diluted loss per share is computed similar to basic loss per 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. There were no dilutive financial instruments issued or outstanding for the periods ended December 31, 2017 or 2016. |
Fair Value of Financial Instruments | For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the Company’s short-term financial instruments approximates fair value due to the relatively short period to maturity for these instruments. |
Cash and Cash Equivalents | The Company considers all highly liquid investments with a maturity of three months or less at the date of acquisition to be cash equivalents. There were no cash equivalents as of December 31, 2017 and 2016. |
Restricted Cash | As a condition to the loan agreement with The Bank of Hampton Roads, the Company is required to maintain a minimum of $2,600,000 in an interest-bearing account maintained by the lender as additional security for the loans. The funds will remain as collateral for the loans until the loans are paid off in full. |
Rent Receivable | Rent receivables are the result of outstanding rent due from tenants. Management reviews each receivable individually for collectability to determine if an allowance for doubtful accounts is needed. The allowance for doubtful accounts at December 31, 2017 and December 31, 2016 was $0. |
Other Receivables | Other receivables include all receivables from buyers, vendors, contractors and all other third parties. The balance at December 31, 2017 is primarily a lot sale receivable for which no allowance is necessary. |
Property and Equipment | Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives, which are 3 years. |
Real Estate Assets | Real estate assets are recorded at cost, except when real estate assets are acquired that meet the definition of a business combination in accordance with Financial Accounting Standards Board (“FASB”) ASC 805, “Business Combinations,” which acquired assets are recorded at fair value. Interest, property taxes, insurance and other incremental costs (including salaries) directly related to a project are capitalized during the construction period of major facilities and land improvements. The capitalization period begins when activities to develop the parcel commence and ends when the asset constructed is completed. The capitalized costs are recorded as part of the asset to which they relate and are reduced when lots are sold. The Company capitalized interest from related party borrowings of $211,005 and $2,662,189 for the years ended December 31, 2017 and 2016, respectively. The Company capitalized interest from the third-party borrowings of $1,008,220 and $911,764 for the years ended December 31, 2017 and 2016, respectively. A property is classified as “held for sale” when all of the following criteria for a plan of sale have been met: (1) management, having the authority to approve the action, commits to a plan to sell the property. (2) the property is available for immediate sale in its present condition, subject only to terms that are usual and customary. (3) an active program to locate a buyer and other actions required to complete the plan to sell, have been initiated. (4) the sale of the property is probable and is expected to be completed within one year or the property is under a contract to be sold. (5) the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value. and (6) actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. When all of these criteria have been met, the property is classified as “held for sale”. “Real estate held for sale” only includes El Tesoro project and D street project. Through December 31, 2017, it was the Company’s policy to obtain an independent third-party valuation for each project every two years to test for impairment. Every reporting period, the Company compared the book value to the fair value obtained in the most recent valuation and looks at market conditions to see if there are any indicators of impairment. If any indicators are noted, the Company will obtain a new valuation and compare the fair value to the book value. Beginning in 2018, it is the Company’s policy to obtain annual independent third-party valuations as of December 31 for each property and compare the fair value from the valuation to the book value to determine if there any impairment. At December 31, 2016, the Company recognized $29,281 of impairment related to the D Street Home Remodeling Project. There was no impairment for the Black Oak or Ballenger Run Projects. At December 31, 2017, there was no impairment recognized for any of the projects. |
Revenue Recognition and Cost of Sales | The Company recognizes sales of lots only upon closing under the full accrual method. Revenue is recognized when ownership of the lots is transferred to the buyer (HUDs are executed). Land acquisition costs are allocated to each lot based on the size of the lot comparing to the total size of all lots in the project. Development costs and capitalized interest are allocated to lots sold based on the total expected development and interest costs of the completed project and allocating a percentage of those costs based on the selling price of the sold lot compared to the expected sales values of all lots in the project. |
Income Taxes | Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss and credit carry-forwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The differences relate primarily to net operating loss carryforward from date of acquisition and to the use of the cash basis of accounting for income tax purposes. The Company records an estimated valuation allowance on its deferred income tax assets if it is more likely than not that these deferred income tax assets will not be realized. The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company has not recorded any unrecognized tax benefits. The Company’s tax returns for 2017, 2016, 2015 and 2014 remain open to examination. |
Subsequent Events | The Company evaluated the events and transactions subsequent to December 31, 2017, the balance sheet date, in accordance with FASB ASC 855-10-50, through April 17, 2018, which to the date the consolidated financial statements were available to be issued. |
1. NATURE OF OPERATIONS AND S17
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Nature Of Operations And Summary Of Significant Accounting Policies Tables | |
Accounts of entities | Name of consolidated subsidiary State or other jurisdiction of incorporation or organization Date of incorporation or formation Attributable interest SeD Home Inc. The State of Delaware, U.S.A. February 24, 2015 100% SeD USA, LLC The State of Delaware, U.S.A. August 20, 2014 100% 150 Black Oak GP, Inc. The State of Texas, U.S.A. January 23, 2014 100% SeD Development USA, Inc. The State of Delaware, U.S.A. March 13, 2014 100% 150 CCM Black Oak Ltd. The State of Texas, U.S.A. January 23, 2014 69% SeD Ballenger, LLC The State of Delaware, U.S.A. July 7, 2015 100% SeD Maryland Development, LLC The State of Delaware, U.S.A. October 16, 2014 83.55% SeD Development Management, LLC The State of Delaware, U.S.A. June 18, 2015 85% SeD Builder, LLC The State of Delaware, U.S.A. October 21, 2015 100% SeD Texas Home, LLC The State of Delaware, U.S.A. June 16, 2015 100% |
3. PROPERTY AND EQUIPMENT (Tabl
3. PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property And Equipment Tables | |
Property and equipment | Property and equipment stated at cost, less accumulated depreciation and amortization, consisted of the following: December 31, 2017 December 31, 2016 Computer Equipment $ 41,597 $ 34,755 Furniture and Fixtures 21,393 20,343 62,990 55,098 Accumulated Depreciation (40,928 ) (20,475 ) $ 22,062 $ 34,623 Depreciation expense was $20,453 and $15,959 for the years ended December 31, 2017 and 2016, respectively. |
8. COMMITMENTS AND CONTINGENC19
8. COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Tables | |
Future payments due under leases | For the Years Ended December 31: 2018 112,919 2019 94,325 2020 96,924 Total $ 304,167 |
9. INCOME TAXES (Tables)
9. INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes Tables | |
Deferred tax assets (liabilities) | 2017 2016 Interest Income (10,747,413 ) (5,394,964 ) Interest Expense 10,864,958 6,903,509 Depreciation and Amortization (14,478 ) (3,489 ) Management Fees 1,554,564 924,011 Others 1,083,710 609,342 Net Operating Loss 1,897,940 1,398,402 4,639,281 4,436,811 Valuation Allowance (4,639,281 ) (4,436,811 ) Net Deferred Tax Asset - - |
1. NATURE OF OPERATIONS AND S21
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Subsidiary 1 | |
Name of consolidated subsidiary | SeD Home Inc. |
State or other jurisdiction of incorporation or organization | The State of Delaware, U.S.A. |
Date of incorporation or formation | Feb. 24, 2015 |
Attributable interest | 100.00% |
Subsidiary 2 | |
Name of consolidated subsidiary | SeD USA, LLC |
State or other jurisdiction of incorporation or organization | The State of Delaware, U.S.A. |
Date of incorporation or formation | Aug. 20, 2014 |
Attributable interest | 100.00% |
Subsidiary 3 | |
Name of consolidated subsidiary | 150 Black Oak GP, Inc. |
State or other jurisdiction of incorporation or organization | The State of Texas, U.S.A. |
Date of incorporation or formation | Jan. 23, 2014 |
Attributable interest | 100.00% |
Subsidiary 4 | |
Name of consolidated subsidiary | SeD Development USA, Inc. |
State or other jurisdiction of incorporation or organization | The State of Delaware, U.S.A. |
Date of incorporation or formation | Mar. 13, 2014 |
Attributable interest | 100.00% |
Subsidiary 5 | |
Name of consolidated subsidiary | 150 CCM Black Oak Ltd. |
State or other jurisdiction of incorporation or organization | The State of Texas, U.S.A. |
Date of incorporation or formation | Jan. 23, 2014 |
Attributable interest | 69.00% |
Subsidiary 6 | |
Name of consolidated subsidiary | SeD Ballenger, LLC |
State or other jurisdiction of incorporation or organization | The State of Delaware, U.S.A. |
Date of incorporation or formation | Jul. 7, 2015 |
Attributable interest | 100.00% |
Subsidiary 7 | |
Name of consolidated subsidiary | SeD Maryland Development, LLC |
State or other jurisdiction of incorporation or organization | The State of Delaware, U.S.A. |
Date of incorporation or formation | Oct. 16, 2014 |
Attributable interest | 83.55% |
Subsidiary 8 | |
Name of consolidated subsidiary | SeD Development Management, LLC |
State or other jurisdiction of incorporation or organization | The State of Delaware, U.S.A. |
Date of incorporation or formation | Jun. 18, 2015 |
Attributable interest | 85.00% |
Subsidiary 9 | |
Name of consolidated subsidiary | SeD Builder, LLC |
State or other jurisdiction of incorporation or organization | The State of Delaware, U.S.A. |
Date of incorporation or formation | Oct. 21, 2015 |
Attributable interest | 100.00% |
Subsidiary 10 | |
Name of consolidated subsidiary | SeD Texas Home, LLC |
State or other jurisdiction of incorporation or organization | The State of Delaware, U.S.A. |
Date of incorporation or formation | Jun. 16, 2015 |
Attributable interest | 100.00% |
1. NATURE OF OPERATIONS AND S22
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Nature Of Operations And Summary Of Significant Accounting Policies Details Narrative | ||
Non-controlling interest | $ 2,255,091 | $ 2,277,882 |
Capitalized interest from related party borrowings | 211,005 | 2,662,189 |
Capitalized interest from third party borrowings | $ 1,008,220 | $ 911,764 |
2. CONCENTRATION OF CREDIT RI23
2. CONCENTRATION OF CREDIT RISK (Details Narrative) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Concentration Of Credit Risk Details Narrative | ||
Uninsured cash balances | $ 2,514,903 | $ 2,406,597 |
3. PROPERTY AND EQUIPMENT (Deta
3. PROPERTY AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Property and equipment, gross | $ 62,990 | $ 55,098 |
Accumulated depreciation | (40,928) | (20,475) |
Property and equipment, net | 22,062 | 34,623 |
Computer Equipment | ||
Property and equipment, gross | 41,597 | 34,755 |
Furniture and Fixtures | ||
Property and equipment, gross | $ 21,393 | $ 20,343 |
3. PROPERTY AND EQUIPMENT (De25
3. PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property And Equipment Details Narrative | ||
Depreciation expense | $ 20,453 | $ 15,959 |
5. NOTES PAYABLE (Details Narra
5. NOTES PAYABLE (Details Narrative) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Notes Payable Details Narrative | ||
Principal | $ 8,272,297 | $ 7,219,947 |
Unamortized debt discount | $ 140,277 | $ 300,592 |
6. RELATED PARTY TRANSACTIONS (
6. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transactions Details Narrative | ||
Consulting expenses | $ 110,334 | $ 96,000 |
8. COMMITMENTS AND CONTINGENC28
8. COMMITMENTS AND CONTINGENCIES (Details) | Dec. 31, 2017USD ($) |
Commitments And Contingencies Details | |
2,018 | $ 112,919 |
2,019 | 94,325 |
2,020 | 96,924 |
Total | $ 304,164 |
8. COMMITMENTS AND CONTINGENC29
8. COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Commitments And Contingencies Details Narrative | ||
Rent expenses | $ 112,293 | $ 89,382 |
9. INCOME TAXES (Details)
9. INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes Details | ||
Interest income | $ (10,747,413) | $ (5,394,964) |
Interest expense | 10,864,958 | 6,903,509 |
Depreciation and amortization | (14,478) | (3,489) |
Management fees | 1,554,564 | 924,011 |
Others | 1,083,710 | 609,342 |
Net operating losses | 1,897,940 | 1,398,402 |
Deferred tax assets, gross | 4,639,281 | 4,436,811 |
Valuation allowance | (4,639,281) | (4,436,811) |
Net deferred tax asset | $ 0 | $ 0 |