Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 10, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | DD's Deluxe Rod Holder, Inc. | |
Entity Central Index Key | 0001643194 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 234,000,000 | |
Trading Symbol | DDLX | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
Interim Condensed Consolidated
Interim Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 117,319 | $ 327,640 |
Accounts receivable, net | 17,308 | |
Amount due from related parties | 491,012 | 1,136,182 |
Prepayments and other current assets | 1,181,005 | 436,977 |
Total current assets | 1,789,336 | 1,918,107 |
Non-current assets | ||
Property, plant and equipment, net | 894,655 | 805,340 |
Intangible assets, net | 13,069 | 13,097 |
Prepayments, net of current portion and other assets | 153,914 | 214,374 |
Operating lease right-of-use assets | 2,416,493 | 2,493,044 |
Total non-current assets | 3,478,131 | 3,525,855 |
Total assets | 5,267,467 | 5,443,962 |
Current liabilities | ||
Accounts payable, net | 346,169 | 255,718 |
Operating lease obligations, current portion | 559,218 | 441,781 |
Amount due to related parties | 942,350 | 891,779 |
Accrued expenses and other payables | 288,839 | 253,363 |
Total current liabilities | 2,136,576 | 1,842,641 |
Non-current liabilities | ||
Customer deposits and receipt in advance | 509,208 | 107,629 |
Operating lease obligations, net of current portion | 1,888,806 | 2,049,485 |
Total non-current liabilities | 2,398,014 | 2,157,114 |
Total liabilities | 4,534,590 | 3,999,755 |
DD's Deluxe Rod Holder Inc.'s stockholders' equity | ||
Common stock, $0.001 par value, 2,000,000,000 shares authorized; 234,000,000 shares and 234,000,000 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively | 234,000 | 234,000 |
Additional paid-in capital | 5,880,723 | 5,880,723 |
Accumulated deficits | (5,455,272) | (4,627,022) |
Accumulated other comprehensive income | 56,146 | (42,043) |
Total DD's Deluxe Rod Holder Inc.'s stockholders' equity | 715,597 | 1,445,658 |
Noncontrolling interests | 17,280 | (1,451) |
Total shareholders' equity | 732,877 | 1,444,207 |
Total liabilities and stockholders' equity | $ 5,267,467 | $ 5,443,962 |
Interim Condensed Consolidate_2
Interim Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued | 234,000,000 | 234,000,000 |
Common stock, shares outstanding | 234,000,000 | 234,000,000 |
Interim Condensed Consolidate_3
Interim Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Revenue | $ 119,453 | $ 46,124 |
Costs of revenue | (200,981) | (16,429) |
Gross (loss) / profit | (81,528) | 29,695 |
Operating expenses | ||
Selling expenses | 278,151 | 3,531 |
General and administrative expenses | 572,817 | 663,594 |
Total operating expenses | 850,968 | 667,125 |
Loss from operations | (932,496) | (637,430) |
Other income (expense): | ||
Bank charges | (1,444) | (386) |
Interest income | 149 | 2,078 |
Other finance expense | ||
Exchange gain | 600 | 29,053 |
Penalty | (593) | |
Other expenses, net | (106) | |
Total other income (expense) | 1,394 | 30,745 |
Loss before income taxes | (933,890) | (606,685) |
Provision for income taxes | ||
Net loss | (933,890) | (606,685) |
Net loss attributable to noncontrolling interests from continuing operations | (105,640) | |
Net loss attributable to DD's Deluxe Rod Holder Inc. | (828,250) | (606,685) |
Foreign currency translation adjustment | 98,819 | 10,652 |
Comprehensive loss | (835,701) | (596,033) |
Comprehensive loss attributable to noncontrolling interests | (83,446) | |
Comprehensive loss attributable to DD's Deluxe Rod Holder Inc. | $ (752,255) | $ (596,033) |
Interim Condensed Consolidate_4
Interim Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated other comprehensive income / (loss) [Member] | Noncontrolling Interest [Member] | Total |
Balance at Dec. 31, 2015 | ||||||
Balance, shares at Dec. 31, 2015 | ||||||
Restated - Outstanding shares of accounting acquirer | $ 230,000 | 2,909,368 | 3,139,368 | |||
Restated - Outstanding shares of accounting acquirer, shares | 230,000,000 | |||||
Stock to be issued | ||||||
Net loss | (888,882) | (888,882) | ||||
Foreign currency translation adjustment | 5,568 | 5,568 | ||||
Balance at Dec. 31, 2017 | $ 230,000 | 2,909,368 | (888,882) | 5,568 | 2,256,054 | |
Balance, shares at Dec. 31, 2017 | 230,000,000 | |||||
Cash contribution | 1,385,435 | 1,385,435 | ||||
Net loss | (606,685) | (606,685) | ||||
Foreign currency translation adjustment | 10,652 | 10,652 | ||||
Balance at Mar. 31, 2018 | $ 230,000 | 4,294,803 | (1,495,567) | 16,220 | 3,045,456 | |
Balance, shares at Mar. 31, 2018 | 230,000,000 | |||||
Balance at Dec. 31, 2017 | $ 230,000 | 2,909,368 | (888,882) | 5,568 | 2,256,054 | |
Balance, shares at Dec. 31, 2017 | 230,000,000 | |||||
Reverse merger recapitalization | $ 4,000 | 2,971,355 | 2,975,355 | |||
Reverse merger recapitalization, shares | 4,000,000 | |||||
Non-controlling interest | 147,368 | 147,368 | ||||
Net loss | (3,738,140) | (130,647) | (3,868,787) | |||
Foreign currency translation adjustment | (47,611) | (18,172) | (65,783) | |||
Balance at Dec. 31, 2018 | $ 234,000 | 5,880,723 | (4,627,022) | (42,043) | (1,451) | 1,444,207 |
Balance, shares at Dec. 31, 2018 | 234,000,000 | |||||
Cash contribution | 84,006 | 84,006 | ||||
Net loss | (828,250) | (105,640) | (933,890) | |||
Foreign currency translation adjustment | 98,189 | 40,365 | 138,554 | |||
Balance at Mar. 31, 2019 | $ 234,000 | $ 5,880,723 | $ (5,455,272) | $ 56,146 | $ 17,280 | $ 732,877 |
Balance, shares at Mar. 31, 2019 | 234,000,000 |
Interim Condensed Consolidate_5
Interim Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 12 Months Ended | 24 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | ||||
Net loss | $ (933,890) | $ (606,685) | $ (3,868,787) | $ (888,882) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||
Depreciation | 51,347 | 2,486 | ||
Amortization | 429 | 42 | ||
Amortization of right-of-use assets | 136,901 | 13,261 | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable, net | 17,643 | 16,978 | ||
Deposits and other receivables, net | 43,786 | (4,436) | ||
Amount due from related parties | (7,691) | (10,458) | ||
Prepaid expenses | (9,461) | 382,674 | ||
Other current assets | (5,883) | |||
Right-of-use assets obtained | (58,063) | |||
Accounts payable | 87,324 | |||
Amount due to related parties | 49,452 | (31,174) | ||
Accrued expenses and other current liabilities | (34,962) | (51,486) | ||
Customer deposits and deferred revenue | 453,002 | (43,103) | ||
Operating lease obligations | (95,613) | 75,450 | ||
Net cash (used in) operating activities | (247,616) | (314,514) | ||
Cash flows from investing activities: | ||||
Payment for equipment and intangible assets | (120,602) | (75,725) | ||
Net cash (used in) investing activities | (120,602) | (75,725) | ||
Cash flows from financing activities: | ||||
Proceeds from VIE share subscriptions | 84,006 | 1,385,434 | ||
Net cash provided by financing activities | 84,006 | 1,385,434 | ||
Effect of exchange rate changes on cash | 73,891 | 88,130 | ||
Net (decrease) increase in cash and cash equivalents | (210,321) | 1,083,325 | ||
Cash and cash equivalents, beginning balance | 327,640 | 2,481,392 | 2,481,392 | |
Cash and cash equivalents, ending balance | 117,319 | 3,564,717 | $ 327,640 | $ 2,481,392 |
Supplementary cash flows information: | ||||
Cash paid for interest | ||||
Cash paid for income tax |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS DD’s Deluxe Rod Holder Inc. (“Deluxe” or the “Company”) was incorporated on September 26, 2014 under the laws of the State of Nevada. On June 15, 2018, DD’s Deluxe Rod Holder Inc. (“DDLX”) entered into a definitive Share Exchange Agreement (the “Share Exchange Agreement”) with Golden Sunset Group Limited (“GS Group”), a Seychelles International Business Company, and the shareholders of GS Group (the “Shareholders”). The Share Exchange Agreement is effective on November 13, 2018. Golden Sunset has 460,000,000 shares (“ Ordinary Shares “Golden Sunset Shares Common Stock The share exchange transaction was accounted for as a “reverse merger” because the original stockholders of GS Group own a majority of the outstanding shares of DDLX’s common stock immediately following the completion of the transaction. GS Group was the legal acquiree but deemed to be the accounting acquirer; DDLX was the legal acquirer but deemed to be the accounting acquiree in the reverse merger. The historical financial statements prior to the acquisition are those of the accounting acquirer (GS Group). Historical stockholder’s equity of the accounting acquirer prior to the merger are retroactively restated (a recapitalization) for the equivalent number of shares received in the merger. After the completion of the transaction, the Company’s consolidated financial statements include the assets and liabilities operations and cash flow of the Company and its subsidiaries. Golden Sunset Group Limited (“GS Group”) is an international business company formed under the laws of Republic of Seychelles (“Seychelles”) on June 28, 2017 as a holding company for Golden Sunset International Management Limited (“GS International”), a Seychelles International Business company formed on the same day. GS International is a wholly-owned subsidiary of GS Group. Golden Sunset (Hongkong) Lodging Limited (“GS Hong Kong”), a holding company incorporated under the laws of Hong Kong Special Administrative Region on July 18, 2017. It was wholly owned by Ms. Quan, Jun until March 9, 2018 on which the entire equity interests was transferred to GS International. GS Hong Kong owns 100% of the issued and outstanding equity interest in Xiao De Tian Xia (Shenzhen) Senior Care Management Services Limited, a People’s Republic of China company (“Xiao De Shenzhen”) incorporated on November 3, 2017. On March 13, 2018, Xiao De Shenzhen acquired 100% ownership interest of Shenzhen Golden Sunset Technology Limited (“GS Technology”), a PRC company incorporated on January 20, 2016. On November 6, 2017, Xiao De Shenzhen also contractually controlled and managed an operating company, Hunan Xiao De Tian Xia Senior Care Industry Management Limited., a People’s Republic of China company (“Xiao De Hunan”), which provides senior care management services. Xiao De Hunan was incorporated in the People’s Republic of China on March 22, 2017. Its principal office is located in Yueping Retirement Home (Red Sunset Apartments), Yueping Town, Yangfeng District, Hengyang City. Xiao De Hunan provides a variety of services which include, but not limited to, service management, lodging management, training management and property management. It provides senior community care services such as preventive health check, rehabilitation support, transportation, housekeeping, laundry, wellness program, interactive classes and recreational activities through its branch, Hunan Xiao De Tian Xia Senior Care Industry Management Co. Ltd Community Senior Care Service Center (“the Branch”). The Branch was formed on December 20, 2017. Hunan Guanzizai Senior Care Services Co. Ltd. (“Hunan Guanzizai”) was formed in the People’s Republic of China on September 27, 2017 and is a wholly-owned subsidiary of Xiao De Hunan. This entity provides senior care personal services and recreational activities for the elderly communities in Hengyang City in Hunan Province, China. On July 30, 2018, Xiao De Tian Xia (Beijing) Senior Care Industry Management Co. Ltd (“Xiao De Beijing”) was incorporated in the People’s Republic of China on July 30, 2018. The ownership interest of Xiao De Hunan in this entity is 70%. The remaining ownership interest, 30%, is held by a non-related third party. This entity provides senior care personal services and recreational activities for an elderly community center in Beijing city in China. Xiao De Tian Xia (Tangshan) Senior Care Management Services Co. Ltd. (“Xiao De Tangshan”) was incorporated in the PRC on September 3, 2018. The ownership interest of Xiao De Shenzhen in this entity is 60% while the remaining ownership interest, 40%, is held by a non-related third party. This entity provides senior care personal services and recreational activities for six elderly community centers in Tangshan city in Hebei Province, China. Xiao De Tian Xia (Hubei) Senior Care Management Services Co. Ltd. (“Xiao De Hubei”) was incorporated in the PRC on September 30, 2018. The ownership interest of Xiao De Shenzhen in this entity is 67% while the remaining ownership interest, 33%, is held by a non-related third party. This entity provides senior care personal services and recreational activities for an elderly community center in Wuhan city in Hubei Province, China. On December 10, 2018, Xiao De Hunan acquired Hengyang City Red Sunset Tourism Development Co. Ltd. (“Red Sunset Tourism”) for a cash consideration of approximately $74,257 (RMB 510,000). Red Sunset Tourism was incorporated in Hengyang City, Hunan Province of the People’s Republic of China under the law of the People’s Republic of China (“PRC”) on January 8, 2008 and its office is located in High-Technology Zone of Hengyang City, Henan Province. Red Sunset Tourism primarily engages in organizing and coordinating domestic travel tours within the territory of PRC for the senior elderly in Henan Province and elderly residents of Hengyang City Yueping Retirement Home (Red Sunset Apartment). Red Sunset Tourism generates revenue through the group tour fee earned from organizing and coordinating travel tours for its tour participants. After the completion of the acquisition, the Company’s controlled Red Sunset Tourism through the subsidiaries of GS Group. The consolidated financial statements include the assets and liabilities, operations and cash flow of the Company and its entire subsidiaries of GS Group and Red Sunset Tourism. Contractual Arrangements Although current PRC regulations do not restrict or prohibit foreign investment in domestic Chinese companies that engage in businesses such as those of Xiao De Hunan and its subsidiaries, there is substantial uncertainty regarding the interpretation and application of such regulations. As such, Xiao De Hunan and its subsidiaries are controlled through contractual arrangements in lieu of direct equity ownership by the Company or any of its subsidiaries. Such contractual arrangements are comprised of a series of four agreements (collectively the “Contractual Arrangements”) which significant terms are shown as follows: Exclusive Service Agreement Pursuant to the exclusive service agreement among Xiao De Shenzhen, Xiao De Hunan and its subsidiaries and its shareholders, Xiao De Shenzhen is engaged as exclusive provider of management consulting services to Xiao De Hunan and its subsidiaries. For such services, Xiao De Hunan and its subsidiaries agree to pay service fees determined based on their actual monthly incomes from major business to Xiao De Shenzhen. The amount of service fee from the year 2019 onward will be negotiated on January 1 each year. Xiao De Shenzhen is entitled to the rights and responsibilities of Xiao De Hunan and its subsidiaries as set forth under the articles of association of Xiao De Hunan. The agreement provides that Xiao De Shenzhen is authorized to, but not limited to, manage and control the daily operation and internal management structure, manage financial management, enter and execute external contracts, handle tax filings and payments, direct and supervise human resources including board of directors nomination, appointment of directors and officers, approve budgets and compensation plans, resolve capital structure, acquisitions and dissolutions The agreement remains in effect for 20 years until November 6, 2037 unless terminated by either party in writing. Until such termination, Xiao De Hunan and its subsidiaries may not enter into another agreement for the provision of management consulting services without the prior consent of Xiao De Shenzhen. Call Option Agreements Pursuant to the call option agreement between the shareholders of Xiao De Hunan and its subsidiaries and Xiao De Shenzhen, such shareholders jointly and severally grant Xiao De Shenzhen an option to purchase their equity interests in Xiao De Hunan and its subsidiaries. Xiao De Shenzhen has the right to determine the purchase price within the extent not exceeding the upper limit of shareholding ratio set forth under the PRC Law. Xiao De Shenzhen may exercise such option at any time until it has acquired all equity interests of such Xiao De Hunan and its subsidiaries, and freely transfer the option to any third party. The agreement will terminate on the date on which all of the equity interests of such Xiao De Hunan and its subsidiaries has been transferred to Xiao De Shenzhen or its designee. Equity Pledge Agreements Pursuant to the equity interest pledge agreement between the shareholders of each Xiao De Hunan and its subsidiaries and Xiao De Shenzhen, such shareholders pledge all of their equity interests in such Xiao De Hunan and its subsidiaries to Xiao De Shenzhen as collateral to secure the obligations of such Xiao De Hunan and its subsidiaries under the exclusive service agreement. The shareholders may not transfer or assign transfer or assign the pledged equity interests, or incur or allow any encumbrance that would jeopardize Xiao De Shenzhen’s interests, without Xiao De Shenzhen’s prior approval. In the event of default, Xiao De Shenzhen as the pledgee will be entitled to certain rights and entitlements, including the priority in receiving payments by the evaluation or proceeds from the auction or sale of whole or part of the pledged equity interests of such Xiao De Hunan and its subsidiaries. The agreement will terminate on the date the shareholders have transferred all of their pledged equity interests pursuant to the option agreement Shareholders’ Voting Rights Proxy Agreements Pursuant to the shareholders’ voting rights proxy agreement between the shareholders of each Xiao De Hunan and its subsidiaries and Xiao De Shenzhen, such shareholders have given Xiao De Shenzhen an irrevocable proxy to act on their behalf on all matters pertaining to such Xiao De Hunan and its subsidiaries and to exercise all of their rights as shareholders of such Xiao De Hunan and its subsidiaries, including the right to attend shareholders meeting, to exercise voting rights and to appoint and elect officers in such Xiao De Hunan and its subsidiaries. The agreement will be valid for 20 years from the date of execution and automatically renew for another one year when the original or extended term of this agreement is due. It will terminate at the earlier of (i) the date on which all of the equity interests of such Xiao De Hunan and its subsidiaries have been transferred to Xiao De Shenzhen or (ii) on the date Xiao De Shenzhen gives a thirty-day notice in writing of the cancellation of the renewal after the agreement is due. As a result of the foregoing contractual arrangements, which give Xiao De Shenzhen effective control of Xiao De Hunan and its subsidiaries with an exclusive power to direct their operating and internal management activities that significantly impact their economic performance, obligate Xiao De Shenzhen to absorb all of the risk of loss from their activities, and enable Xiao De Shenzhen to receive all of their expected residual returns, the Company accounts for each Xiao De Hunan Tian Xia and its subsidiaries as a variable interest entity (“VIE”). Additionally, as the parent company of Xiao De Shenzhen, the Company is considered the primary beneficiary of Xiao De Hunan and its subsidiaries. Accordingly, the Company consolidates the accounts of Xiao De Hunan and its subsidiaries for the period ended December 31, 2017, in accordance with Regulation S-X-3A-02 promulgated by the Securities Exchange Commission, and Accounting Standards Codification (“ASC”) 810-10, Consolidation. We refer to DD’s Deluxe Rod Holder Inc, its consolidated subsidiaries and variable interest entities collectively as “we”, “us” and “our”. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The financial statements included in this report have been prepared in accordance with generally accepted accounting principles in the United States of America. This basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred. Our financial statements are expressed in U.S. dollars. Principles of Consolidation Our consolidated combined financial statements include the accounts of Deluxe, GS Group, its subsidiaries and its Variable Interest Entities (VIEs). All significant intercompany transactions balances among Deluxe, GS Group, its subsidiaries and its VIEs are eliminated upon consolidation. Since Xiao De Shenzhen and its VIEs are under common control, the contractual arrangements among Xiao De Shenzhen, its VIEs and their shareholders have been accounted for as a reorganization of entities, and the consolidation of its VIEs through the contractual arrangements has been accounted for at historical cost and prepared on the basis as if these agreements became effective as of the beginning of the first period presented in our consolidated financial statements. Consolidated financial statements prepared following a reverse acquisition are issued under the name of the legal parent (accounting acquiree, i.e. DDLX) but as a continuation of the financial statements of the legal subsidiary (accounting acquirer, i.e. GS Group) with an adjustment of retroactively restate on the stockholder’s equity to reflect the legal capital of the legal acquiree under the name of legal parent. This adjustment is required to reflect the capital of legal parent (the legal acquirer or accounting acquiree) in the stockholder’s equity item after the reverse acquisition. Comparative information presented in these financial statements also is retroactively adjusted to reflect the legal capital of the legal parent (legal acquirer or accounting acquiree). The interim condensed consolidated financial statements include the accounts of DD’s Deluxe Rod Holder Inc. and the following subsidiaries: Name of subsidiaries Ownership / Deemed ownership Place of incorporation Capital Golden Sunset Group Limited (“GS Group”) 100 % Republic of Seychelles $ 115,000 Golden Sunset International Management Limited (“GS International”) 100 % Republic of Seychelles $ 5 Golden Sunset (Hongkong) Lodging Limited (“GS Hong Kong”) 100 % Hong Kong Special Kong Special Administrative Region $ 5 Xiao De Tian Xia (Shenzhen) Senior Care Service Management Co., Ltd. (“Xiao De Shenzhen”) 100 % PRC Nil Shenzhen Golden Sunset Technology Limited (“GS Technology”) 100 % PRC Nil Xiao De Tian Xia (Tangshan) Senior Care Service Management Co., Ltd (“Xiao De Tangshan”) 60 % PRC $ 230,793 Xiao De Tian Xia (Hubei) Senior Care Services Co., Ltd (“Xiao De Hubei”) 67 % PRC 118,597 Hunan Xiao De Tian Xia Senior Care Industry Management Co., Ltd (“Xiao De Hunan”) 100 % PRC $ 1,512,951 Hunan Guanzizai Senior Care Services Co. Ltd (“Hunan Guanzizai”) 100 % PRC $ 780,827 Beijing Xiao De Tian Xia Senior Care Industry Management Co., Ltd (“Xiao De Beijing”) 70 % PRC $ 338,975 Hengyang City Red Sunset Tourism Development Co., Ltd (“Red Sunset Tourism”) 100 % PRC $ 73,831 Use of Estimates and Assumptions The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimate and assumptions that impact the presented amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the presented amounts of revenues and expenses during the period. Actual results may differ from those estimates. Significant estimates for the periods ended March 31, 2019 and December 31, 2018 include the collectability of receivables, the useful lives of long-lived assets and intangibles, assumptions used in assessing impairment of long-lived assets, valuation of accruals for expenses and tax due. Reclassifications We have reclassified certain prior period amounts within our consolidated financial statements and accompanying notes to conform to our current period presentation. These reclassifications did not affect total revenue, operating income, or net income. Going Concern Consideration The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America which contemplate continuation of the Company as a going concern basis. The going-concern basis assumes that assets are realized and liabilities are extinguished in the ordinary course of business at amounts disclosed on the financial statements. The Company’s ability to continue as a going concern depends on the liquidation of its current assets and business developments. As of March 31, 2019, the Company incurred working capital deficit of $347,240, a comprehensive loss of $835,701 and incurred a negative operating cash flow of $247,616. As of March 31, 2018, the Company also incurred a comprehensive loss of $596,033 and a negative cash flow from its operating activities of $314,514. These conditions raise substantial doubt about the ability of the Company to continue as a going concern. Our continuation as a going concern is dependent upon improving our profitability and the continuing financial support from our stockholders. Our sources of capital in the past have included borrowings from our stockholders and related parties. While we believe that our existing shareholders and related parties will continue to provide the additional cash to meet our obligations as they become due, there can be no assurance that we will be able to raise such additional capital resources on satisfactory terms. We, through our PRC subsidiaries, continued to explore business opportunities with the local government agencies and senior care communities. By the end of 2018, Our VIE, Xiao De Hunan acquired Red Sunset Tourism in order to expand our senior community care services by coordinating group tour services to the elderly. Moreover, Xiao De Shenzhen also launched a community care prepaid card program and contracted a third party to promote the prepaid card program among the senior communities. As of March 31, 2019, there were approximately 69 participants and approximately $509,208 has been received. To strive to increase our revenue, in the first quarter of 2019, we obtained a government contract that allowed us to provide community care services to a community care center in Hubei. We continued our efforts in obtaining additional government contracts in other provinces. Moreover, GS Hong Kong is still negotiating with Sing Ho Trading Company to explore business opportunities and has remitted $731,336 for deposit. This amount is refundable by Sing Ho Trading Company if new business is not established. We believe that our current cash and financing from our existing stockholders are adequate to support operations for at least the next 12 months. Foreign Currency Translation Our reporting currency is the U.S. dollar. Our subsidiaries in the PRC and Hong Kong use the local currencies, Renminbi (RMB) and Hong Kong Dollars (HKD) as their functional currencies as determined based on the criteria of ASC 830, “Foreign Currency Translation”. Assets and liabilities are translated at the unified exchange rate as quoted by the U.S. Federal Reserve at the end of the period. Income and expense accounts are translated at the average translation rates the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statement of equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. The resulting translation adjustments are reported under accumulated other comprehensive loss in the stockholders’ equity section of the balance sheets. Below is a table with foreign exchange rates used for translation for the periods indicated: Three-month period ended March 31, 2019 (Average Rate) Hong Kong Dollar (HKD) Chinese Renminbi (RMB) United States dollar ($1) 7.8460 6.7447 As of March 31, 2019 (Closing Rate) United States dollar ($1) 7.8498 6.7112 As of December 31, 2018 (Closing Rate) Hong Kong Dollar (HKD) Chinese Renminbi (RMB) United States dollar ($1) 7.8305 6.8755 Three-month period ended March 31, 2018 (Average Rate) Hong Kong Dollar (HKD) Chinese Renminbi (RMB) United States dollar ($1) 7.8279 6.3535 Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The Company maintains its deposits in financial institutions in the PRC and Hong Kong. Deposit accounts at insured banks and financial institutions in Hong Kong will be covered up to a limit of HKD500,000 (approximately US$ 63,696) by Hong Kong Deposit Protection Board in an event of bank failure. As of March 31, 2019 and December 31, 2018, cash balances, $117,319 and $305,416, respectively, held in the PRC banks are uninsured. Our subsidiaries in Hong Kong and PRC have not experienced any losses in bank accounts and believe they are not exposed to any risks on our cash in bank accounts. Financial Instrument The carrying amount reported in the balance sheet for cash, other receivables, accrued liabilities and other payables approximate fair value because of the immediate or short-term maturity of these financial instruments. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and impairment losses. Gains and losses on dispositions of property and equipment are included in operating income (loss). Repairs and maintenance are expensed as incurred. Depreciation is provided over the estimated useful life of each class of depreciable assets and is computed using the straight-line method over the useful lives of the assets are as follows: Classification Estimated useful life Leasehold improvements 5 years Furniture & Fixtures 5 years Computer Equipment 3-5 years Office Equipment 3-5 years Computer Software 5 years Health Care Equipment 10 years Motor vehicles 5 years Capitalization of Software Costs For costs incurred in the acquisition of internal use software, the Company capitalizes costs incurred upon purchase. Internal use software is amortized on a straight-line basis over its estimated useful life. Impairment of Long-lived Assets Long-lived assets, including buildings and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated discounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. When the Company identifies an impairment, it reduces the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of March 31, 2019 and December 31, 2018, management determined that there was no impairment. Goodwill Goodwill represents the excess of the purchase price over the fair value of the identifiable assets acquired and liabilities assumed as a result of the Company’s acquisitions of interests in Red Sunset Tourism by our VIE, Xiao De Hunan, in the fourth quarter in 2018. Goodwill is not depreciated or amortized but is tested for impairment at the reporting unit level at least on an annual basis, and between annual tests when an event occurs or circumstances change that could indicate that the asset might be impaired. The test consists of two steps. First, identify potential impairment by comparing the fair value of the reporting unit to its carrying amount, including goodwill. If the fair value of the reporting unit is greater than its carrying amount, goodwill is not considered impaired. Second, if there is impairment identified in the first step, an impairment loss is recognized for any excess of the carrying amount of the reporting units’ goodwill over the implied fair value of goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation, in accordance with ASC Topic 805 “Business Combinations.” Goodwill is reviewed for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount may be impaired. The Company performs its annual impairment test of goodwill on December 31 of each fiscal year or whenever events of circumstances change or occur that would indicate that goodwill might be impaired. When assessing goodwill for impairment, the Company uses qualitative and if necessary, quantitative methods in accordance with FASB ASC Topic 350, “Goodwill”. The Company’s goodwill is attributable to its reporting unit of VIEs within which Xiao De Hunan acquired Red Sunset Tourism on December 11, 2018. The Company performed the annual test on goodwill impairment for this reporting unit on December 31, 2018. See Note 9 for detailed disclosures about the impairment of goodwill and the related valuation technique(s) and inputs used in the fair value measurement for the Company’s goodwill. For the year ended December 31, 2018, the Company recorded an impairment of goodwill in an amount of $177,954. Noncontrolling Interest Noncontrolling interest is accounted for in accordance with ASC Topic 810-10-45, which requires the Company to present noncontrolling interests as a separate component of total shareholders’ equity on the consolidated balance sheet and the consolidated net income/(loss) attributable to the parent and the noncontrolling interest identified and presented on the face of the consolidated statement of operations an comprehensive loss. ASC Topic 810-10-45 also requires that losses attributable to the parent and the noncontrolling interest in a subsidiary be attributed to those interests even if it results in a deficit noncontrolling interest balance. Fair Values of Financial Instruments ASC Topic 825, Financial Instruments (“Topic 825”) requires disclosure of fair value information of financial instruments, whether or not recognized in the balance sheets, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. Topic 825 excludes certain financial instruments and all non-financial assets and liabilities from its disclosure requirements. Accordingly, the aggregate fair value amounts do not represent the underlying value of the Company. Disclosure requirements for fair value measures. The three levels are defined as follows: Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. The Company considers the carrying amount of cash, other receivables and other short-term payables, to approximate their fair values because of the short period of time between the origination of such instruments and their expected realization. Comprehensive Income (Loss) Other comprehensive income (loss) refers to revenues, expenses, gains and losses that under generally accepted accounting principles are included in comprehensive income (loss) but are excluded from net income (loss) as these amounts are recorded directly as an adjustment to stockholders’ equity. The Company’s other comprehensive income (loss) is comprised of foreign currency translation adjustments. Revenue Recognition We adopted FASB ASC Topic 606, Revenue from Contracts with Customers, or ASC Topic 606, under the full retrospective approach applied to its contracts entered since its inception date in March 2017. Since the Company adopted ASC Topic 606 since its inception date, the adoption of ASC 606 did not have a material impact on the measurement nor on the recognition of contracts as if it would have adopted ASC Topic 605 prior to January 1, 2018. The early adoption did not result in an adjustment to our retained earnings. The five-step model defined by ASC Topic 606 requires us to (1) identify our contracts with customers, (2) identify our performance obligations under those contracts, (3) determine the transaction prices of those contracts, (4) allocate the transaction prices to our performance obligations in those contracts and (5) recognize revenue when each performance obligation under those contracts is satisfied. Revenue is recognized when promised goods or services are transferred to the customer in an amount that reflects the consideration expected in exchange for those goods or services. Service management revenue – Service management relates to a service management agreement between Xiao De Hunan and Red Sunset Apartment. Pursuant to the agreement, Xiao De Hunan provides advisory and administrative services to Red Sunset Apartment. Leasing revenue – This portion of our revenue relates to contracts with residents for leasing services at Red Sunset Apartment that are generally short term in nature with approximately from three months through one year and fall under FASB ASC Topic 842, Leases, which are specifically accounted outside the scope of ASC Topic 606. Lodging management revenue – We provide referral service of senior residents of Hengyang City Yueping Retirement Home (Red Sunset Apartment) and lodging management to Red Sunset Tourism Development Co. Ltd. Community care revenue – Our PRC entities and VIEs provide senior community care services such as preventive health check, rehabilitation support, transportation, housekeeping, laundry, wellness program, interactive classes and recreational activities. We charge the senior residents after we have provided such services. During 2018, we offered a prepayment options for those services. Beginning the first quarter of 2019, we entered into service agreements with municipal offices that we were permitted to provide community care services to the local senior community care centers. The agreements provide that we receive government subsidies to support our operational costs as we incur in those community care centers. Group tour revenue-Through Red Sunset Tourism which we acquired on December 11, 2018, we generate group tour revenue through organizing and coordinating travel tours for our elderly participants. Operating revenue of the Company represents the selling price of services provided on invoice, net of a value-added tax (“VAT”). Leases On the inception date of a lease and upon any relevant amendments to such lease, we test the classification of such lease as either a direct financing lease or an operating lease. None of our leases have met any of the criteria to be classified as a direct financing lease under FASB ASC Topic 842, Leases, and, therefore, we have accounted for all of our leases as operating leases and recognized a right-of-use (ROU) in non-current assets and an operating lease liability in current and non-current liabilities on the consolidated balance sheet. ASC Topic 842 provides a practical expedient election that unless a practical expedient is available and elected, utilities reflect a nonlease component that both lessor and lessee must separate from the lease components and to which consideration in the contract must be allocated. We did not elect the practical expedient and accounted for utilities as a nonlease component. Income Taxes The Company accounts for income taxes using the liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. The Company applies ASC 740, Accounting for Income Taxes On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted by the U.S. government which included a wide range of tax reform affecting businesses including the corporate tax rates, international tax provisions, tax credits and deduction with majority of the tax provision effective after December 31, 2017. Certain activities conducted in foreign jurisdictions may result in the imposition of U.S. corporate income taxes on DDLX when its subsidiaries, controlled foreign corporations (“CFCs”), generate income that is subject to Subpart F or GILTI under the U.S. Internal Revenue Code beginning after December 31, 2017. The Company did not accrue any liability, interest or penalties related to uncertain tax positions in our provision for income taxes line of our consolidated statements of operations for the three-month period ended March 31, 2019 and the year ended December 31, 2018. The Company does not expect that its assessment regarding unrecognized tax positions will materially change over the next 12 months. Earnings per share Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the year. Diluted earnings per share is computed by dividing net income by the weighted-average number of common shares and dilutive potential common shares outstanding during the year. Recent Accounting Pronouncement Recently adopted accounting pronouncements Revenue Recognition: Disclosure of Going Concern Uncertainties Balance Sheet Classification of Deferred Taxes : Leases Stock-based Compensation Statement of Cash Flows: Income Taxes Business Combination Business Combinations (Topic 805): Clarifying the Definition of a Business Compensation - Stock Compensation Compensation - Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting Income Statement-Reporting Comprehensive Income: The ASU requires financial statement preparers to disclose: ● A description of the accounting policy for releasing income tax effects from AOCI; ● Whether they elect to reclassify the stranded income tax effects from the Tax Cuts and Jobs Act; and ● Information about the other income tax effects that are reclassified. The amendments affect any organization that is required to apply the provisions of Topic 220, Income Statement—Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP. The amendments are effective for all organizations for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. Organizations should apply the proposed amendments either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company is currently evaluating this guidance and the impact it may have on the Company’s consolidated financial statements. Codification Improvements: Codification Improvements Fair Value Measurement: Fair Value Measurement (Topic 820) |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE 3 – ACQUISITIONS Acquisition of Tourism Business On November 23, 2018, Xiao De Hunan entered into an equity transfer agreement with Xinhui Li, a Chinese citizen and the sole shareholder of Hengyang City Red Sunset Tourism Development Co., Ltd. (“Red Sunset Tourism”), pursuant to which Xiao De Hunan agreed to acquire 100% equity interest in Red Sunset Tourism from Mr. Li at the purchase price of RMB 510,000 (approximately $73,831, converted based on the spot rate of US dollar to Chinese Renminbi, $1 to RMB 6.9077, on December 10, 2018). On December 10, 2018, Xiao De Hunan completed all the legitimate registration with related government authorities to update Red Sunset Tourism’s business license reflecting the change of its shareholder name to Xiao De Hunan. As a result, the equity transfer was consummated and completed. The Company has included the results of operations of the acquired business in the consolidated statements of operations from the acquisition date. The assets acquired and liabilities assumed in Red Sunset Tourism have been recorded based on the fair value at the acquisition date. Goodwill represents the excess of the purchase price over the net tangible and intangible assets acquired and is not deductible for tax purposes. The following table summarizes the fair value of assets acquired and liabilities assumed: Total purchase price $ 73,831 Cash and restricted cash 5,041 Prepaid expenses and advance to suppliers 662 Amounts due from a related party 3,578 Property and equipment, net - Deposits-noncurrent 14,477 Total identifiable assets 23,758 Other payables and accrued liabilities (6,662 ) Deferred rent (869 ) Amount due to directors and related parties (120,350 ) Total liabilities assumed (127,881 ) Goodwill 177,954 Acquisition of the Operational Rights of the “Tangshan City 12349 Senior Care Service Center” On November 21, 2018, our subsidiary, Xiao De Tangshan entered into an agreement with Tangshan City Civil Administration Bureau which approved the transfer of an operational right of the Tangshan City 12349 Senior Care Service Center (“12349 Center”) to Xiao De Tangshan. The operational right of 12349 Center was originally granted to Tangshan Qicheng Technology Co Ltd., which is a noncontrolling interest of Xiao De Tangshan on August 1, 2016. The ownership of 12349 Center still remains under Tangshan City Civil Administration Bureau. There was no cash consideration pursuant to the transfer and no goodwill was recognized. |
Revenues
Revenues | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | NOTE 4- REVENUES Adoption of ASC Topic 606, “Revenue from Contracts with Customers”. Upon inception date in March 2017, we adopted ASC Topic 606, Revenue from Contracts with Customers, using the full retrospective method. The five-step model defined by ASC Topic 606 requires us to (1) identify our contracts with customers, (2) identify our performance obligations under those contracts, (3) determine the transaction prices of those contracts, (4) allocate the transaction prices to our performance obligations in those contracts and (5) recognize revenue when each performance obligation under those contracts is satisfied. Revenue is recognized when promised goods or services are transferred to the customer in an amount that reflects the consideration expected in exchange for those goods or services. Service management revenue – Service management relates to a service management agreement between Xiao De Hunan and Red Sunset Apartment. Pursuant to the agreement, Xiao De Hunan provides advisory and administrative services to Red Sunset Apartment. Leasing revenue – This portion of our revenue relates to contracts with residents for leasing services at Red Sunset Apartment that are generally short term in nature with approximately from three months through one year and fall under FASB ASC Topic 842, Leases, which are specifically accounted outside the scope of ASC Topic 606. Lodging management revenue – We provide referral service of senior residents of Red Sunset Apartment and lodging management to Red Sunset Tourism. Community care revenue – Our PRC entities and VIEs provide senior community care services such as preventive health check, rehabilitation support, transportation, housekeeping, laundry, wellness program, interactive classes and recreational activities. We charge the senior residents after we have provided such services. During 2018, we offered a prepayment options for those services. Starting the first quarter of 2019, we entered into service agreements with municipal offices that we were permitted to provide community care services to the local senior community care centers. The agreements provide that we receive government subsidies to support our operational costs as we incur in those community care centers. For the three-month period ended March 31, 2019, we earned approximately $2,965 (RMB20,000) government subsidy for the community care services provided in Hubei province Wuhan City Hangyang District Senior Community Center. The agreement provides that the final 20% of the subsidy amount is contingent upon the evaluation of our services by the municipal office. Group tour revenue-Through Red Sunset Tourism which we acquired on December 11, 2018, we generate group tour revenue through organizing and coordinating travel tours for our elderly participants. Operating revenue of the Company represents the selling price of services provided on invoice, net of a value-added tax (“VAT”). The following table presents our revenue disaggregated by revenue source and timing of recognition. Value-added tax is excluded from revenues: Major service lines Three-Month Period Ended (Unaudited) Three-Month Period Ended (Unaudited) Service management $ 30,518 $ 41,270 Leasing 9,091 - Lodging management - 4,854 Community care 67,005 - Group tour 12,839 - Total $ 119,453 $ 46,124 Timing of recognition Three-Month Period Ended (Unaudited) Three-Month Period Ended (Unaudited) Services transferred at a point in time $ 79,844 $ 4,854 Services transferred over time 39,609 41,270 Total $ 119,453 $ 46,124 Costs of revenue primarily include the following: ● Labor cost (salary and wages, employee benefits, labor unions, medical insurance) ● Transportation cost for elderly participants and staff members ● Uniform for staff members ● Meals and accommodation for elderly participants ● Property maintenance ● Depreciation ● Lease expense ● Utilities These costs of revenue have been included in the various streams of services provided: service management, leasing, lodging management, community care and group tour: Three-Month Period Ended (Unaudited) Three-Month Period Ended (Unaudited) Service management $ 8,781 $ 2,876 Leasing 371 - Lodging management - 6,124 Community care 147,845 7,390 Group tour 12,310 - Depreciation 31,674 39 Total $ 200,981 $ 16,429 |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | NOTE 5 – VARIABLE INTEREST ENTITIES On November 6, 2017, Xiao De Shenzhen entered into contractual agreements with Xiao De Hunan and its subsidiaries and its shareholders. The significant terms of the contractual agreements were summarized in “Note 1-Organization and Description of Business” above. As a result of the contractual agreements, we classify Xiao De Hunan and its subsidiaries as a variable interest entity (VIE). VIEs are entities that have either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, exclusive power to direct operating and internal management activities that significantly impact economic performance, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. Xiao De Shenzhen is deemed to have a controlling financial interest and be the primary beneficiary of Xiao De Hunan and its subsidiaries because it has all of the following characteristics: ● The power to direct activities of Xiao De Hunan and its subsidiaries that most significantly impact the economic performance of Xiao De Hunan and its subsidiaries. ● The right to receive the expected residual returns of Xiao De Hunan and its subsidiaries. ● The obligation to absorb the expected loss of Xiao De Hunan and its subsidiaries. Pursuant to the contractual agreements, Xiao De Hunan and its subsidiaries agree to pay service fees based on their actual monthly incomes from major business to Xiao De Shenzhen. Xiao De Shenzhen is authorized to, but not limited to, manage and control the daily operation and internal management structure, manage financial management, enter and execute external contracts, handle tax filings and payments, direct and supervise human resources including board of directors nomination, appointment of directors and officers, approve budgets and compensation plans, resolve capital structure, acquisitions and dissolutions. The contractual agreements were designed so that Xiao De Hunan and its subsidiaries operate for the benefit of Xiao De Shenzhen and ultimately the Company. Accordingly, the accounts of Xiao De Hunan and its subsidiaries are consolidated in the accompanying financial statements as provided under ASC 810-10, Consolidation. Their financial positions and results of operations are also included in the Company’s financial statements. The carrying amount of the VIE’s consolidated assets and liabilities as of March 31, 2019 and December 31, 2018 was as follows: March 31, 2019 (Unaudited) December 31, 2018 (Audited) Current assets $ 4,217,381 $ 4,321,731 Property and equipment, net 704,490 693,372 Other noncurrent assets 1,189,025 1,262,608 Total assets 6,110,896 6,277,711 Total liabilities 5,732,435 5,681,494 Net assets $ 378,460 $ 596,217 The VIEs’ liabilities consisted of the following for the years ended March 31, 2019 and December 31, 2018: March 31, 2019 (Unaudited) December 31, 2018 (Audited) Current liabilities: Accounts payable, net 12,128 61,542 Operating lease obligations-current 169,245 167,410 Amount due to related parties 4,399,972 4,296,446 Other current liabilities 210,568 192,862 Total current liabilities 4,791,913 4,718,260 Long term liabilities: Operating lease obligations-non-current 940,522 963,234 Total non-current liabilities 940,522 963,234 Total liabilities $ 5,732,435 $ 5,681,494 The operating results of the VIEs are as follows: Three-Month Period Ended March 31, 2019 (Unaudited) Three-Month Period Ended March 31, 2018 (Unaudited) Revenue $ 89,008 $ 46,124 Gross (loss) / profit $ (91,176 ) $ 29,695 Loss from operations $ (261,645 ) $ (77,318 ) Net loss $ (261,882 ) $ (75,599 ) |
Prepayments and Other Current A
Prepayments and Other Current Assets | 3 Months Ended |
Mar. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepayments and Other Current Assets | NOTE 6 – PREPAYMENTS AND OTHER CURRENT ASSETS Prepayments and other current assets consisted of the following: March 31, 2019 (Unaudited) December 31, 2018 (Audited) Prepaid professional fees $ 149,662 $ 120,134 Prepaid rent 29,031 9,272 Prepaid repair and maintenance 5,921 29,089 Deposits 865,669 889,672 Staff advance - 15,950 Prepaid supplies 118,710 12,524 Tax refund 197 152 Prepaid recruitment fee 433 - Prepaid telecommunications 4,970 - Prepaid insurance 541 - Other current assets 5,871 59,391 Total prepayments and other current assets $ 1,181,005 $ 1,136,182 Deposits mainly included $110,485 refundable security deposit of our operating leases of our administrative offices and community care centers in PRC and $731,336 to Sing Ho Trading Company, incorporated in Hong Kong, by GS Hong Kong for exploring potential new business opportunities. GS Hong Kong is still in the progress of negotiating with Sing Ho Trading Company for business opportunities. This deposit amount is refundable to GS Hong Kong if a new business is not established. |
Prepayments, Net of Current Por
Prepayments, Net of Current Portion and Other Assets | 3 Months Ended |
Mar. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepayments, Net of Current Portion and Other Assets | NOTE 7 - PREPAYMENTS, NET OF CURRENT PORTION AND OTHER ASSETS Prepayments, net of current portion and other assets consisted of the following: March 31, 2019 (Unaudited) December 31, 2018 (Audited) Prepaid repair and maintenance – non-current $ 19,238 $ 54,276 Prepaid professional fee – non-current 96,980 134,097 Deposits – non current 14,900 14,544 Prepaid advertising-non-current 14,450 - Prepaid telecommunications-non-current 4,099 - Prepaid postal services-non-current 4,247 - Others non-current assets - 11,457 Total prepayments, net of current portion and other assets $ 153,914 $ 214,374 |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | NOTE 8 – PROPERTY AND EQUIPMENT, NET Property, plant and equipment consisted of the following: March 31, 2019 (Unaudited) December 31, 2018 (Reclassified) Reclassification December 31, 2018 (Audited) Furniture and fixtures $ 116,631 $ 99,542 $ (13,465 ) $ 113,008 Equipment 398,074 375,515 (22,258 ) 397,773 Motor vehicle 8,869 8,657 8,657 Leasehold improvement 489,904 387,237 387,237 Sub-total 1,013,478 870,952 (35,723 ) 906,675 Less: accumulated depreciation (118,823 ) (65,612 ) 35,723 (101,335 ) Total property and equipment, net $ 894,655 $ 805,340 $ - $ 805,340 The depreciation expense for three-month periods ended March 31, 2019 and 2018 was $51,288 and $2,485, respectively. |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | NOTE 9 – GOODWILL The Company’s goodwill, $177,954, was attributable to the acquisition of Red Sunset Tourism by our VIE, Xiao De Hunan as discussed in Note 3. The change in the carrying value of goodwill is as follows: Three-Month Period Ended March 31, 2019 (Unaudited) As of (Audited) Balance $ - $ - Acquired goodwill - - Impairment - - Balance $ - $ - In accordance with FASB ASC 350, “Intangibles – Goodwill and Other,” we perform goodwill impairment testing at least annually, unless indicators of impairment exist in interim periods. The impairment test for goodwill uses a two-step approach. Step one compares the estimated fair value of a reporting unit with goodwill to its carrying value. If the carrying value exceeds the estimated fair value, step two must be performed. Step two compares the carrying value of the reporting unit to the fair value of all of the assets and liabilities of the reporting unit (including any unrecognized intangibles) as if the reporting unit was acquired in a business combination. If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of its goodwill, an impairment loss is recognized in an amount equal to the excess. For purposes of reviewing impairment and the recoverability of goodwill and other intangible assets, each of our operation constitutes a reporting unit and we must make various assumptions regarding estimated future cash flows and other factors in determining the fair values of the reporting unit. We perform an annual impairment review as of December 31, 2018. On December 31, 2018, we performed our annual goodwill impairment test and estimated the fair value of our tourism reporting unit based on the income approach (also known as the discounted cash flow (“DCF”) method, which utilizes the present value of cash flows to estimate fair value). The future cash flows for our tourism operation (which we acquired on December 10, 2018) were projected based on our estimates, at that time, of future revenues, operating income and other factors (such as working capital). We took into account expected competitive tourism industry and market conditions, including expected local government subsidies for the elderly. Due to the uncertainty of the tourism development particularly in senior communities, we assumed growth rate estimates in our projections that were approximates to the estimated inflationary rate in the local area that we provide senior care and tourism services. The discount rates used in our DCF method were based on a weighted-average cost of capital (“WACC”) (borrowing rate for loans over 5 years provided by Bank of China) determined from relevant market comparisons (primarily the uncertainty of achieving projected operating cash flows). We then calculated a present value of the respective cash flows for each reporting unit to arrive at an estimate of fair value under the income approach. Under the income approach, we estimated a fair value based on comparable companies’ market multiples of revenues and earnings before interest, taxes, depreciation and amortization and factored in a control premium. Based on the aforementioned, we concluded that the estimated fair value, below the respective carrying value, determined under the income approach for our tourism reporting unit, as of December 31, 2018, was fairly conservative and reasonable. We concluded that the goodwill assigned to our tourism reporting unit, as of December 31, 2018, was impaired. |
Intangibles, Net
Intangibles, Net | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangibles, Net | NOTE 10- INTANGIBLES, NET Intangible assets consisted of the following: March 31, 2019 (Unaudited) December 31, 2018 (Audited) Software acquired $ 14,090 $ 13,673 Less: accumulated amortization (1,021 ) (576 ) Total intangibles, net $ 13,069 $ 13,097 The amortization expense of the use of software acquired for the three-month periods ended March 31, 2019 and 2018 was $697 and $42, respectively. The estimated amortization expense for each of the five succeeding years is as follows: Year ending December 31, Estimated amortization expense 2019 $ 2,804 2020 2,804 2021 2,804 2022 2,804 2023 1,853 Thereafter - Total $ 13,069 |
Accrued Expenses and Other Paya
Accrued Expenses and Other Payables | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Payables | NOTE 11 – ACCRUED EXPENSES AND OTHER PAYABLES Accrued expenses and other payables as of March 31, 2019 and December 31, 2018 consisted of: March 31, 2019 (Unaudited) December 31, 2018 (Audited) Staff deposits $ - $ 291 Payroll payable 114,403 107,345 Customer deposits 69,405 12,773 Deferred rent 9,483 1,018 Taxes payable 3,970 4,744 Other accrued expenses and payables 91,578 127,192 Total accrued expenses and other payables $ 288,839 $ 253,363 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 12 – RELATED PARTY TRANSACTIONS The following is a list of related parties to which the Company has transactions with: (a) Red Sunset Apartment, Ms. Ling Zhou is the Chief Executive Officer and Mr. Xinhui Li is the Director and Chief Executive Officer (b) Hunan Zhongfeng Investment Real Estate Co., Ltd., Ms. Ling Zhou and Ms. Jun Quan are the Directors and Mr. Xinhui Li is the Director and Chief Executive Officer (c) Shenzhen Dingda Sheng Trading Co., Ltd., Ms. Qin Zhang is the legal representative. She’s also a legal representative of Xiao De Tangshan (d) Tangshan Qicheng Technology Co. Ltd., one of the shareholders of Xiao De Tangshan. (e) Mr. Zhen Gao, one of the shareholders of Xiao De Beijing. (f) Gunda Holdings Limited, one of the shareholders of DDLX (g) Yingsheng Holdings Limited, one of the shareholders of DDLX and wholly owned by Ms. Jun Quan (h) Mr. Xinhui Li, the consultant of Xiao De Hunan and an immediate family member of Ms. Jun Quan. (i) Ms. Jun Quan, the Director of Golden Sunset Group Limited and a shareholder of DD Deluxe and Yingsheng Holdings Limited. She is also an immediate family member of Mr. Xinhui Li. (j) Ms. Zhenzhu Li, one of the shareholders of Xiao De Tian Xia (Hubei). (k) Ms.Erzhi Liu, one of the shareholders of Xiao De Tian Xia (Hubei). (l) Ms. Ling Liu, one of the shareholders and former Chief Executive Officer, President of DD’s Deluxe Rod Holder Inc. (m) Ms. Hui Liu, an Operation Manager of Hunan Guanzizai and a legal representative of Hunan Chunyi Culture Communication Co. Ltd. Amounts due from related parties Amounts due from related parties consisted of the following as of the periods indicated: Name of related parties March 31, 2019 (Unaudited) December 31, 2018 (Audited) Red Sunset Apartment (a) (1) $ 203,663 $ 225,415 Hunan Zhongfeng Investment Real Estate Co., Ltd. (b) (2) 2,980 2,909 Shenzhen Dingda Sheng Trading Co. Ltd. (c ) (3) 62,582 61,086 Tangshan Qicheng Technology Co., Ltd. (d) (4) 72,140 70,278 Mr. Zhen Gao (e) (5) 102,813 76,358 Gunda Holdings Limited (f) (6) 477 465 Yingsheng Holdings Limited (g) (7) 477 465 Ms. Zhenzhu Li (j)(13) 20,265 - Ms. Erzhi Liu (k)(14) 19,073 - Ms. Ling Liu (l)(15) 6,542 - Total $ 491,012 $ 436,977 Amounts due to related parties Amounts due to related parties consisted of the following as of the periods indicated: Name of related parties March 31, 2019 (Unaudited) December 31, 2018 (Audited) Red Sunset Apartment (a) (8) $ 4,213 $ 4,078 Tangshan Qicheng Technology Co., Ltd. (d) (9) 4,496 Mr. Zhen Gao (e) (10) 2,744 Mr. Xinhui Li (h) (11) 41,193 40,208 Ms. Jun Quan (i) (12) 895,826 840,254 Mr. Hui Liu (m) (16) 1,118 - Total $ 942,350 $ 891,780 (1) The amount due from Red Sunset Apartment to Xiao De Hunan related to the service management fee payable to Xiao De Hunan. (2) The amount due from Hunan Zhongfeng Investment Real Estate Co., Ltd. was the membership fee to the Chamber of Commerce paid by Xiao De Hunan on behalf of Zhongfeng Investment Real Estate Co. Ltd. (3) The amount receivable from Shenzhen Dingda Sheng Trading Co. Ltd. was pertinent to the operational support of this entity. (4) The amount receivable from Tangshan Qicheng Technology Co., Ltd related to the capital financing provided by Xiao De Shenzhen to Tangshan Qicheng Technology Co. Ltd. (5) The amount receivable from Mr. Zhen Gao related to the capital financing provided by Xiao De Hunan to Mr. Gao. (6) Xiao De Shenzhen paid business registration fee to Republic of Seychelles on behalf of Gunda Holdings Limited (7) Xiao De Shenzhen paid business registration fee to Republic of Seychelles on behalf of Yingsheng Holdings Limited (8) The amount payable to Red Sunset Apartment was pertinent to the group tour fee paid on behalf of Red Sunset Tourism. (9) Tangshan Qicheng Technology Co., Ltd paid salary and wages as well as other administrative expenses on behalf of Xiao De Tangshan (10) Mr. Gao paid administrative expenses on behalf of Xiao De Beijing (11) The amount payable to Mr. Li was the operational support for Red Sunset Tourism. (12) Ms. Jun Quan made payments to the third parties for the the business operations of Golden Sunset (Lodging) Hongkong, Red Sunset Apartment and DD’s Deluxe Rod Holder Inc. (13) The amount receivable from Ms. Zhenzhu Li related to the capital financing provided by Xiao De Shenzhen to Ms. Li. (14) The amount receivable from Ms. Erzhi Liu related to the capital financing provided by Xiao De Shenzhen to Ms. Liu. (15) Ms. Liu sold her ownership interest to a third party and is obligated to pay commission fee to the transfer agent. Xiao De Shenzhen paid the commission to the transfer agent on behalf of Ms. Liu. (16) Mr. Liu made payments to the third parties for the purchase of food and supplies on behalf of Hunan Guanzizai Non-cash transactions-related parties There was no non-cash transaction between related parties for the three-month periods ended March 31, 2019 and 2018. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 13 – INCOME TAXES We are subject to income taxes in the U.S. and foreign jurisdictions. Significant judgements and estimates are required in evaluating our uncertain tax positions and provision for income taxes. Tax Cuts and Jobs Act Enacted in 2017 On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, (1) reducing the U.S. federal corporate income tax rate from 35 percent to 21 percent; (2) requiring companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries; (3) generally eliminating U.S. federal corporate income taxes on dividends from foreign subsidiaries; (4) providing modification to subpart F provisions and new taxes on certain foreign earnings such as Global Intangible Low-Taxed Income (GILTI). Except for the one-time transition tax, most of these provisions go into effect starting January 1, 2018. The Global Intangible Low-taxed Income (GILTI) is a new provision introduced by the Tax Cuts and Jobs Act. U.S. shareholders, who are domestic corporations, of controlled foreign corporations (CFCs) are eligible for up to an 80% deemed paid foreign tax credit (FTC) and a 50% deduction of the current year inclusion with the full amount of the Section 78 gross-up subject to limitation. This new provision is effective for tax years of foreign corporations beginning after December 31, 2017. The Company has evaluated whether it has additional provision amount resulted by the GILTI inclusion on current earnings and profits of its foreign controlled corporations. The Company has made an accounting policy choice of treating taxes due on future U.S. inclusions in taxable amount related to GILTI as a current period expense when incurred. As of March 31, 2019, the Company does not have any aggregated positive tested income; and as such, does not have additional provision amount recorded for GILTI tax Our effective rate for the three-month periods ended March 31, 2019 and 2018 was 0% and 0%, respectively. Our effective tax rate for the three-month period ended March 31, 2019 was lower than the U.S. federal statutory rate, primarily due to the fact that our subsidiaries and VIEs incurred book and tax losses. Our effective tax rate for the three-month period ended March 31, 2018 was lower than the U.S. federal statutory rate, primarily due to the fact that our subsidiaries and VIEs incurred book and tax losses. The Company did not accrue any liability, interest or penalties related to uncertain tax positions in our provision for income taxes line of our consolidated statements of operations for the three-month period ended March 31, 2019 and the year ended December 31, 2018. The Company does not expect that its assessment regarding unrecognized tax positions will materially change over the next 12 months |
Earnings_(Loss) Per Share
Earnings/(Loss) Per Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings/(Loss) Per Share | NOTE 14- EARNINGS/(LOSS) PER SHARE Basic earnings/(loss) per share is computed by dividing net income/(loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted-average number of common shares and dilutive potential common shares outstanding during the period. Diluted loss per share will not be computed because of the anti-dilutive effect. Three-Month Period Ended March 31, 2019 Three-Month Period Ended March 31, 2018 Numerator: Net loss attributable to the Company (828,250 ) $ (606,685 ) Denominator: Weighted-average shares outstanding-Basic 234,000,000 230,000,000 Stock options and restricted shares Weighted-average shares outstanding-Diluted 234,000,000 230,000,000 Loss per share -Basic and Diluted (0.0035 ) (0.0026 ) |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 15 - COMMITMENTS AND CONTINGENCIES Purchase Commitments The Company entered into service commitments, which are cancellable without significant penalties, with multiple service providers which will render the following services: legal and professional services approximately $129,183, telecommunication services approximately $1,129, advertising services approximately $60,042 and marketing services approximately $203,683 in 2019 and 2020. Operating Leases The Company entered into various operating leases for its office and community care centers in Hengyang city, Hunan Province, Beijing and Tangshan City, Hebei Province, Wuhan City, Hubei Province as well as an office in Shenzhen City, Guangdong Province, PRC since 2017. Related party leases On May 1, 2017, a lease arrangement for our office in Hengyang city, Hunan Province was entered into between Xiao De Hunan and Red Sunset Apartment which is formed in the Hengyang city, Hunan Province, PRC and owned by Mr. Xinhui Li who is also the consultant of Xiao De Hunan. The lease with the related party is classified in accordance with the lease classification criteria applicable to all other leases on the basis of the legally enforceable terms and conditions. Xiao De Hunan leased 6 units from Red Sunset Apartment for our administrative office. Our annual rent payments for this lease RMB12,000 (approximately US$1,779). The lease term is five years and will expire on April 30, 2022. ASC Topic 842 provides a practical expedient election that unless a practical expedient is available and elected, utilities reflect a nonlease component that both lessor and lessee must separate from the lease components and to which consideration in the contract must be allocated. We did not elect the practical expedient; accordingly, we separately accounted for utilities as a nonlease component. The lease expense for this lease arrangement for the three-month periods ended March 31, 2019 and 2018 was RMB3,000 (approximately US$445) and RMB3,000 (approximately US$472), respectively. The right-of-use balance of this lease as of March 31, 2019 and December 31, 2018 was RMB34,276 (approximately US$5,107) and RMB36,835 (approximately US$5,362), respectively. The lease liability as of March 31, 2019 and December 31, 2018 was RMB34,276 (approximately US$5,107) and RMB 36,835 (approximately US$5,362), respectively. The Company leases real estate under non-cancellable operating leases. The components of lease expense were as follows: Three-Month Period Ended March 31, 2019 (Unaudited) Three-Month Period Ended March 31, 2018 (Unaudited) Operating lease cost $ 181,588 $ 109,880 Total lease cost $ 181,588 $ 109,880 Other information related to leases was as follows: Three-Month Period Ended March 31, 2019 (Unaudited) Three-Month Period Ended March 31, 2018 (Unaudited) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 115,494 $ 80,254 Right-of-use assets obtained in exchange for lease obligations Operating leases 71,918 205,524 Weighted average remaining lease term (years) Operating leases 4.73 6.06 Weighted average discount rate Operating leases 4.83 % 4.90 % Future minimum lease payments under non-cancellable leases as of March 31, 2019 were as follows: Operating Leases 2019 $ 427,270 2020 661,214 2021 701,335 2022 507,352 2023 127,808 Thereafter 354,553 Total future lease payments 2,779,532 Less: Amount representing interest 331,508 Present value of future payments 2,448,024 Less: Current portion 559,218 Long-term portion $ 1,888,806 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 16 - SUBSEQUENT EVENTS On April 23, 2019, Xiao De Hubei entered into an agreement with Wuhan City Han Xing Street Municipal Office that Xiao De Hubei was permitted to provide community care services to Han Xing Street Elderly Community Care Service Center from April 24, 2019 through April 23, 2020. Xiao De Hubei will be granted government subsidy in an annual amount of approximately $28,170 (RMB190,000) to support its operational cost incurred for the Han Xing Street Elderly Community Care Service Center. The municipal office will offer 60% of the subsidy amount, approximately $16,900, (RMB114,000), to Xiao De Hubei in 30 days after the agreement was signed. The remaining subsidy amount, RMB76,000, is subject to the evaluation by the municipal office after one year. Xiao De Hubei will be entitled to the full remaining subsidy amount if it earns 90 points (out of 100 points) in the evaluation. Approximately $148 (RMB1,000) will be reduced for each point discounted. On April 23, 2019, Xiao De Hubei entered into agreement with Hubei Hubei Yangtze Long Shang Media Group Co. Ltd. for producing the content of the promotional and marketing television series to be broadcasted on Hubei Long Shang Television Channel Network from April 23, 2019 through April 22, 2020. The broadcasting promotes the senior community care services to be provided by Xiao De Hubei. The estimated fee for the production is approximately $74,130 (RMB500,000) which will be settled in four installments. On May 5, 2019, Xiao De Shenzhen entered into an agreement with Tangshan Yicheng Construction and Design Co., Limited for the leasehold improvement project of Luanjie Hotel in Tangshan City. The project is expected to start in May 2019 and completed in 30 days. The total estimate budget of the project is approximately $32,370 (RMB218,345). The agreement is cancellable with early termination fee. Other than the aforementioned, the Company evaluated and concluded that no other significant subsequent events have occurred that would require recognition or disclosure in the interim condensed consolidated financial statements. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The financial statements included in this report have been prepared in accordance with generally accepted accounting principles in the United States of America. This basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred. Our financial statements are expressed in U.S. dollars. |
Principles of Consolidation | Principles of Consolidation Our consolidated combined financial statements include the accounts of Deluxe, GS Group, its subsidiaries and its Variable Interest Entities (VIEs). All significant intercompany transactions balances among Deluxe, GS Group, its subsidiaries and its VIEs are eliminated upon consolidation. Since Xiao De Shenzhen and its VIEs are under common control, the contractual arrangements among Xiao De Shenzhen, its VIEs and their shareholders have been accounted for as a reorganization of entities, and the consolidation of its VIEs through the contractual arrangements has been accounted for at historical cost and prepared on the basis as if these agreements became effective as of the beginning of the first period presented in our consolidated financial statements. Consolidated financial statements prepared following a reverse acquisition are issued under the name of the legal parent (accounting acquiree, i.e. DDLX) but as a continuation of the financial statements of the legal subsidiary (accounting acquirer, i.e. GS Group) with an adjustment of retroactively restate on the stockholder’s equity to reflect the legal capital of the legal acquiree under the name of legal parent. This adjustment is required to reflect the capital of legal parent (the legal acquirer or accounting acquiree) in the stockholder’s equity item after the reverse acquisition. Comparative information presented in these financial statements also is retroactively adjusted to reflect the legal capital of the legal parent (legal acquirer or accounting acquiree). The interim condensed consolidated financial statements include the accounts of DD’s Deluxe Rod Holder Inc. and the following subsidiaries: Name of subsidiaries Ownership / Deemed ownership Place of incorporation Capital Golden Sunset Group Limited (“GS Group”) 100 % Republic of Seychelles $ 115,000 Golden Sunset International Management Limited (“GS International”) 100 % Republic of Seychelles $ 5 Golden Sunset (Hongkong) Lodging Limited (“GS Hong Kong”) 100 % Hong Kong Special Kong Special Administrative Region $ 5 Xiao De Tian Xia (Shenzhen) Senior Care Service Management Co., Ltd. (“Xiao De Shenzhen”) 100 % PRC Nil Shenzhen Golden Sunset Technology Limited (“GS Technology”) 100 % PRC Nil Xiao De Tian Xia (Tangshan) Senior Care Service Management Co., Ltd (“Xiao De Tangshan”) 60 % PRC $ 230,793 Xiao De Tian Xia (Hubei) Senior Care Services Co., Ltd (“Xiao De Hubei”) 67 % PRC 118,597 Hunan Xiao De Tian Xia Senior Care Industry Management Co., Ltd (“Xiao De Hunan”) 100 % PRC $ 1,512,951 Hunan Guanzizai Senior Care Services Co. Ltd (“Hunan Guanzizai”) 100 % PRC $ 780,827 Beijing Xiao De Tian Xia Senior Care Industry Management Co., Ltd (“Xiao De Beijing”) 70 % PRC $ 338,975 Hengyang City Red Sunset Tourism Development Co., Ltd (“Red Sunset Tourism”) 100 % PRC $ 73,831 |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimate and assumptions that impact the presented amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the presented amounts of revenues and expenses during the period. Actual results may differ from those estimates. Significant estimates for the periods ended March 31, 2019 and December 31, 2018 include the collectability of receivables, the useful lives of long-lived assets and intangibles, assumptions used in assessing impairment of long-lived assets, valuation of accruals for expenses and tax due. |
Reclassifications | Reclassifications We have reclassified certain prior period amounts within our consolidated financial statements and accompanying notes to conform to our current period presentation. These reclassifications did not affect total revenue, operating income, or net income. |
Going Concern Consideration | Going Concern Consideration The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America which contemplate continuation of the Company as a going concern basis. The going-concern basis assumes that assets are realized and liabilities are extinguished in the ordinary course of business at amounts disclosed on the financial statements. The Company’s ability to continue as a going concern depends on the liquidation of its current assets and business developments. As of March 31, 2019, the Company incurred working capital deficit of $347,240, a comprehensive loss of $835,701 and incurred a negative operating cash flow of $247,616. As of March 31, 2018, the Company also incurred a comprehensive loss of $596,033 and a negative cash flow from its operating activities of $314,514. These conditions raise substantial doubt about the ability of the Company to continue as a going concern. Our continuation as a going concern is dependent upon improving our profitability and the continuing financial support from our stockholders. Our sources of capital in the past have included borrowings from our stockholders and related parties. While we believe that our existing shareholders and related parties will continue to provide the additional cash to meet our obligations as they become due, there can be no assurance that we will be able to raise such additional capital resources on satisfactory terms. We, through our PRC subsidiaries, continued to explore business opportunities with the local government agencies and senior care communities. By the end of 2018, Our VIE, Xiao De Hunan acquired Red Sunset Tourism in order to expand our senior community care services by coordinating group tour services to the elderly. Moreover, Xiao De Shenzhen also launched a community care prepaid card program and contracted a third party to promote the prepaid card program among the senior communities. As of March 31, 2019, there were approximately 69 participants and approximately $509,208 has been received. To strive to increase our revenue, in the first quarter of 2019, we obtained a government contract that allowed us to provide community care services to a community care center in Hubei. We continued our efforts in obtaining additional government contracts in other provinces. Moreover, GS Hong Kong is still negotiating with Sing Ho Trading Company to explore business opportunities and has remitted $731,336 for deposit. This amount is refundable by Sing Ho Trading Company if new business is not established. We believe that our current cash and financing from our existing stockholders are adequate to support operations for at least the next 12 months. |
Foreign Currency Translation | Foreign Currency Translation Our reporting currency is the U.S. dollar. Our subsidiaries in the PRC and Hong Kong use the local currencies, Renminbi (RMB) and Hong Kong Dollars (HKD) as their functional currencies as determined based on the criteria of ASC 830, “Foreign Currency Translation”. Assets and liabilities are translated at the unified exchange rate as quoted by the U.S. Federal Reserve at the end of the period. Income and expense accounts are translated at the average translation rates the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statement of equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. The resulting translation adjustments are reported under accumulated other comprehensive loss in the stockholders’ equity section of the balance sheets. Below is a table with foreign exchange rates used for translation for the periods indicated: Three-month period ended March 31, 2019 (Average Rate) Hong Kong Dollar (HKD) Chinese Renminbi (RMB) United States dollar ($1) 7.8460 6.7447 As of March 31, 2019 (Closing Rate) United States dollar ($1) 7.8498 6.7112 As of December 31, 2018 (Closing Rate) Hong Kong Dollar (HKD) Chinese Renminbi (RMB) United States dollar ($1) 7.8305 6.8755 Three-month period ended March 31, 2018 (Average Rate) Hong Kong Dollar (HKD) Chinese Renminbi (RMB) United States dollar ($1) 7.8279 6.3535 |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The Company maintains its deposits in financial institutions in the PRC and Hong Kong. Deposit accounts at insured banks and financial institutions in Hong Kong will be covered up to a limit of HKD500,000 (approximately US$ 63,696) by Hong Kong Deposit Protection Board in an event of bank failure. As of March 31, 2019 and December 31, 2018, cash balances, $117,319 and $305,416, respectively, held in the PRC banks are uninsured. Our subsidiaries in Hong Kong and PRC have not experienced any losses in bank accounts and believe they are not exposed to any risks on our cash in bank accounts. |
Financial Instruments | Financial Instrument The carrying amount reported in the balance sheet for cash, other receivables, accrued liabilities and other payables approximate fair value because of the immediate or short-term maturity of these financial instruments. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation and impairment losses. Gains and losses on dispositions of property and equipment are included in operating income (loss). Repairs and maintenance are expensed as incurred. Depreciation is provided over the estimated useful life of each class of depreciable assets and is computed using the straight-line method over the useful lives of the assets are as follows: Classification Estimated useful life Leasehold improvements 5 years Furniture & Fixtures 5 years Computer Equipment 3-5 years Office Equipment 3-5 years Computer Software 5 years Health Care Equipment 10 years Motor vehicles 5 years |
Capitalization of Software Costs | Capitalization of Software Costs For costs incurred in the acquisition of internal use software, the Company capitalizes costs incurred upon purchase. Internal use software is amortized on a straight-line basis over its estimated useful life. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets Long-lived assets, including buildings and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated discounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. When the Company identifies an impairment, it reduces the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of March 31, 2019 and December 31, 2018, management determined that there was no impairment. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of the identifiable assets acquired and liabilities assumed as a result of the Company’s acquisitions of interests in Red Sunset Tourism by our VIE, Xiao De Hunan, in the fourth quarter in 2018. Goodwill is not depreciated or amortized but is tested for impairment at the reporting unit level at least on an annual basis, and between annual tests when an event occurs or circumstances change that could indicate that the asset might be impaired. The test consists of two steps. First, identify potential impairment by comparing the fair value of the reporting unit to its carrying amount, including goodwill. If the fair value of the reporting unit is greater than its carrying amount, goodwill is not considered impaired. Second, if there is impairment identified in the first step, an impairment loss is recognized for any excess of the carrying amount of the reporting units’ goodwill over the implied fair value of goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation, in accordance with ASC Topic 805 “Business Combinations.” Goodwill is reviewed for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount may be impaired. The Company performs its annual impairment test of goodwill on December 31 of each fiscal year or whenever events of circumstances change or occur that would indicate that goodwill might be impaired. When assessing goodwill for impairment, the Company uses qualitative and if necessary, quantitative methods in accordance with FASB ASC Topic 350, “Goodwill”. The Company’s goodwill is attributable to its reporting unit of VIEs within which Xiao De Hunan acquired Red Sunset Tourism on December 11, 2018. The Company performed the annual test on goodwill impairment for this reporting unit on December 31, 2018. See Note 9 for detailed disclosures about the impairment of goodwill and the related valuation technique(s) and inputs used in the fair value measurement for the Company’s goodwill. For the year ended December 31, 2018, the Company recorded an impairment of goodwill in an amount of $177,954. |
Noncontrolling Interest | Noncontrolling Interest Noncontrolling interest is accounted for in accordance with ASC Topic 810-10-45, which requires the Company to present noncontrolling interests as a separate component of total shareholders’ equity on the consolidated balance sheet and the consolidated net income/(loss) attributable to the parent and the noncontrolling interest identified and presented on the face of the consolidated statement of operations an comprehensive loss. ASC Topic 810-10-45 also requires that losses attributable to the parent and the noncontrolling interest in a subsidiary be attributed to those interests even if it results in a deficit noncontrolling interest balance. |
Fair Values of Financial Instruments | Fair Values of Financial Instruments ASC Topic 825, Financial Instruments (“Topic 825”) requires disclosure of fair value information of financial instruments, whether or not recognized in the balance sheets, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. Topic 825 excludes certain financial instruments and all non-financial assets and liabilities from its disclosure requirements. Accordingly, the aggregate fair value amounts do not represent the underlying value of the Company. Disclosure requirements for fair value measures. The three levels are defined as follows: Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. The Company considers the carrying amount of cash, other receivables and other short-term payables, to approximate their fair values because of the short period of time between the origination of such instruments and their expected realization. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Other comprehensive income (loss) refers to revenues, expenses, gains and losses that under generally accepted accounting principles are included in comprehensive income (loss) but are excluded from net income (loss) as these amounts are recorded directly as an adjustment to stockholders’ equity. The Company’s other comprehensive income (loss) is comprised of foreign currency translation adjustments. |
Revenue Recognition | Revenue Recognition We adopted FASB ASC Topic 606, Revenue from Contracts with Customers, or ASC Topic 606, under the full retrospective approach applied to its contracts entered since its inception date in March 2017. Since the Company adopted ASC Topic 606 since its inception date, the adoption of ASC 606 did not have a material impact on the measurement nor on the recognition of contracts as if it would have adopted ASC Topic 605 prior to January 1, 2018. The early adoption did not result in an adjustment to our retained earnings. The five-step model defined by ASC Topic 606 requires us to (1) identify our contracts with customers, (2) identify our performance obligations under those contracts, (3) determine the transaction prices of those contracts, (4) allocate the transaction prices to our performance obligations in those contracts and (5) recognize revenue when each performance obligation under those contracts is satisfied. Revenue is recognized when promised goods or services are transferred to the customer in an amount that reflects the consideration expected in exchange for those goods or services. Service management revenue – Service management relates to a service management agreement between Xiao De Hunan and Red Sunset Apartment. Pursuant to the agreement, Xiao De Hunan provides advisory and administrative services to Red Sunset Apartment. Leasing revenue – This portion of our revenue relates to contracts with residents for leasing services at Red Sunset Apartment that are generally short term in nature with approximately from three months through one year and fall under FASB ASC Topic 842, Leases, which are specifically accounted outside the scope of ASC Topic 606. Lodging management revenue – We provide referral service of senior residents of Hengyang City Yueping Retirement Home (Red Sunset Apartment) and lodging management to Red Sunset Tourism Development Co. Ltd. Community care revenue – Our PRC entities and VIEs provide senior community care services such as preventive health check, rehabilitation support, transportation, housekeeping, laundry, wellness program, interactive classes and recreational activities. We charge the senior residents after we have provided such services. During 2018, we offered a prepayment options for those services. Beginning the first quarter of 2019, we entered into service agreements with municipal offices that we were permitted to provide community care services to the local senior community care centers. The agreements provide that we receive government subsidies to support our operational costs as we incur in those community care centers. Group tour revenue-Through Red Sunset Tourism which we acquired on December 11, 2018, we generate group tour revenue through organizing and coordinating travel tours for our elderly participants. Operating revenue of the Company represents the selling price of services provided on invoice, net of a value-added tax (“VAT”). |
Leases | Leases On the inception date of a lease and upon any relevant amendments to such lease, we test the classification of such lease as either a direct financing lease or an operating lease. None of our leases have met any of the criteria to be classified as a direct financing lease under FASB ASC Topic 842, Leases, and, therefore, we have accounted for all of our leases as operating leases and recognized a right-of-use (ROU) in non-current assets and an operating lease liability in current and non-current liabilities on the consolidated balance sheet. ASC Topic 842 provides a practical expedient election that unless a practical expedient is available and elected, utilities reflect a nonlease component that both lessor and lessee must separate from the lease components and to which consideration in the contract must be allocated. We did not elect the practical expedient and accounted for utilities as a nonlease component. |
Income Taxes | Income Taxes The Company accounts for income taxes using the liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. The Company applies ASC 740, Accounting for Income Taxes On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted by the U.S. government which included a wide range of tax reform affecting businesses including the corporate tax rates, international tax provisions, tax credits and deduction with majority of the tax provision effective after December 31, 2017. Certain activities conducted in foreign jurisdictions may result in the imposition of U.S. corporate income taxes on DDLX when its subsidiaries, controlled foreign corporations (“CFCs”), generate income that is subject to Subpart F or GILTI under the U.S. Internal Revenue Code beginning after December 31, 2017. The Company did not accrue any liability, interest or penalties related to uncertain tax positions in our provision for income taxes line of our consolidated statements of operations for the three-month period ended March 31, 2019 and the year ended December 31, 2018. The Company does not expect that its assessment regarding unrecognized tax positions will materially change over the next 12 months. |
Earnings per share | Earnings per share Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the year. Diluted earnings per share is computed by dividing net income by the weighted-average number of common shares and dilutive potential common shares outstanding during the year. |
Recent Accounting Pronouncement | Recent Accounting Pronouncement Recently adopted accounting pronouncements Revenue Recognition: Disclosure of Going Concern Uncertainties Balance Sheet Classification of Deferred Taxes : Leases Stock-based Compensation Statement of Cash Flows: Income Taxes Business Combination Business Combinations (Topic 805): Clarifying the Definition of a Business Compensation - Stock Compensation Compensation - Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting Income Statement-Reporting Comprehensive Income: The ASU requires financial statement preparers to disclose: ● A description of the accounting policy for releasing income tax effects from AOCI; ● Whether they elect to reclassify the stranded income tax effects from the Tax Cuts and Jobs Act; and ● Information about the other income tax effects that are reclassified. The amendments affect any organization that is required to apply the provisions of Topic 220, Income Statement—Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP. The amendments are effective for all organizations for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. Organizations should apply the proposed amendments either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company is currently evaluating this guidance and the impact it may have on the Company’s consolidated financial statements. Codification Improvements: Codification Improvements Fair Value Measurement: Fair Value Measurement (Topic 820) |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Financial Statements of Subsidiaries | The interim condensed consolidated financial statements include the accounts of DD’s Deluxe Rod Holder Inc. and the following subsidiaries: Name of subsidiaries Ownership / Deemed ownership Place of incorporation Capital Golden Sunset Group Limited (“GS Group”) 100 % Republic of Seychelles $ 115,000 Golden Sunset International Management Limited (“GS International”) 100 % Republic of Seychelles $ 5 Golden Sunset (Hongkong) Lodging Limited (“GS Hong Kong”) 100 % Hong Kong Special Kong Special Administrative Region $ 5 Xiao De Tian Xia (Shenzhen) Senior Care Service Management Co., Ltd. (“Xiao De Shenzhen”) 100 % PRC Nil Shenzhen Golden Sunset Technology Limited (“GS Technology”) 100 % PRC Nil Xiao De Tian Xia (Tangshan) Senior Care Service Management Co., Ltd (“Xiao De Tangshan”) 60 % PRC $ 230,793 Xiao De Tian Xia (Hubei) Senior Care Services Co., Ltd (“Xiao De Hubei”) 67 % PRC 118,597 Hunan Xiao De Tian Xia Senior Care Industry Management Co., Ltd (“Xiao De Hunan”) 100 % PRC $ 1,512,951 Hunan Guanzizai Senior Care Services Co. Ltd (“Hunan Guanzizai”) 100 % PRC $ 780,827 Beijing Xiao De Tian Xia Senior Care Industry Management Co., Ltd (“Xiao De Beijing”) 70 % PRC $ 338,975 Hengyang City Red Sunset Tourism Development Co., Ltd (“Red Sunset Tourism”) 100 % PRC $ 73,831 |
Schedule of Foreign Currency Exchange Rate, Translation | Below is a table with foreign exchange rates used for translation for the periods indicated: Three-month period ended March 31, 2019 (Average Rate) Hong Kong Dollar (HKD) Chinese Renminbi (RMB) United States dollar ($1) 7.8460 6.7447 As of March 31, 2019 (Closing Rate) United States dollar ($1) 7.8498 6.7112 As of December 31, 2018 (Closing Rate) Hong Kong Dollar (HKD) Chinese Renminbi (RMB) United States dollar ($1) 7.8305 6.8755 Three-month period ended March 31, 2018 (Average Rate) Hong Kong Dollar (HKD) Chinese Renminbi (RMB) United States dollar ($1) 7.8279 6.3535 |
Schedule of Estimated Useful Life of Property and Equipment | Depreciation is provided over the estimated useful life of each class of depreciable assets and is computed using the straight-line method over the useful lives of the assets are as follows: Classification Estimated useful life Leasehold improvements 5 years Furniture & Fixtures 5 years Computer Equipment 3-5 years Office Equipment 3-5 years Computer Software 5 years Health Care Equipment 10 years Motor vehicles 5 years |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the fair value of assets acquired and liabilities assumed: Total purchase price $ 73,831 Cash and restricted cash 5,041 Prepaid expenses and advance to suppliers 662 Amounts due from a related party 3,578 Property and equipment, net - Deposits-noncurrent 14,477 Total identifiable assets 23,758 Other payables and accrued liabilities (6,662 ) Deferred rent (869 ) Amount due to directors and related parties (120,350 ) Total liabilities assumed (127,881 ) Goodwill 177,954 |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue Disaggregated by Revenue and Timing of Recognition | The following table presents our revenue disaggregated by revenue source and timing of recognition. Value-added tax is excluded from revenues: Major service lines Three-Month Period Ended (Unaudited) Three-Month Period Ended (Unaudited) Service management $ 30,518 $ 41,270 Leasing 9,091 - Lodging management - 4,854 Community care 67,005 - Group tour 12,839 - Total $ 119,453 $ 46,124 Timing of recognition Three-Month Period Ended (Unaudited) Three-Month Period Ended (Unaudited) Services transferred at a point in time $ 79,844 $ 4,854 Services transferred over time 39,609 41,270 Total $ 119,453 $ 46,124 |
Schedule of Cost of Revenue | These costs of revenue have been included in the various streams of services provided: service management, leasing, lodging management, community care and group tour: Three-Month Period Ended (Unaudited) Three-Month Period Ended (Unaudited) Service management $ 8,781 $ 2,876 Leasing 371 - Lodging management - 6,124 Community care 147,845 7,390 Group tour 12,310 - Depreciation 31,674 39 Total $ 200,981 $ 16,429 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | The carrying amount of the VIE’s consolidated assets and liabilities as of March 31, 2019 and December 31, 2018 was as follows: March 31, 2019 (Unaudited) December 31, 2018 (Audited) Current assets $ 4,217,381 $ 4,321,731 Property and equipment, net 704,490 693,372 Other noncurrent assets 1,189,025 1,262,608 Total assets 6,110,896 6,277,711 Total liabilities 5,732,435 5,681,494 Net assets $ 378,460 $ 596,217 The VIEs’ liabilities consisted of the following for the years ended March 31, 2019 and December 31, 2018: March 31, 2019 (Unaudited) December 31, 2018 (Audited) Current liabilities: Accounts payable, net 12,128 61,542 Operating lease obligations-current 169,245 167,410 Amount due to related parties 4,399,972 4,296,446 Other current liabilities 210,568 192,862 Total current liabilities 4,791,913 4,718,260 Long term liabilities: Operating lease obligations-non-current 940,522 963,234 Total non-current liabilities 940,522 963,234 Total liabilities $ 5,732,435 $ 5,681,494 The operating results of the VIEs are as follows: Three-Month Period Ended March 31, 2019 (Unaudited) Three-Month Period Ended March 31, 2018 (Unaudited) Revenue $ 89,008 $ 46,124 Gross (loss) / profit $ (91,176 ) $ 29,695 Loss from operations $ (261,645 ) $ (77,318 ) Net loss $ (261,882 ) $ (75,599 ) |
Prepayments and Other Current_2
Prepayments and Other Current Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepayments and Other Current Assets | Prepayments and other current assets consisted of the following: March 31, 2019 (Unaudited) December 31, 2018 (Audited) Prepaid professional fees $ 149,662 $ 120,134 Prepaid rent 29,031 9,272 Prepaid repair and maintenance 5,921 29,089 Deposits 865,669 889,672 Staff advance - 15,950 Prepaid supplies 118,710 12,524 Tax refund 197 152 Prepaid recruitment fee 433 - Prepaid telecommunications 4,970 - Prepaid insurance 541 - Other current assets 5,871 59,391 Total prepayments and other current assets $ 1,181,005 $ 1,136,182 |
Prepayments, Net of Current P_2
Prepayments, Net of Current Portion and Other Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepayments, Net of Current Portion and Other Assets | Prepayments, net of current portion and other assets consisted of the following: March 31, 2019 (Unaudited) December 31, 2018 (Audited) Prepaid repair and maintenance – non-current $ 19,238 $ 54,276 Prepaid professional fee – non-current 96,980 134,097 Deposits – non current 14,900 14,544 Prepaid advertising-non-current 14,450 - Prepaid telecommunications-non-current 4,099 - Prepaid postal services-non-current 4,247 - Others non-current assets - 11,457 Total prepayments, net of current portion and other assets $ 153,914 $ 214,374 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property, plant and equipment consisted of the following: March 31, 2019 (Unaudited) December 31, 2018 (Reclassified) Reclassification December 31, 2018 (Audited) Furniture and fixtures $ 116,631 $ 99,542 $ (13,465 ) $ 113,008 Equipment 398,074 375,515 (22,258 ) 397,773 Motor vehicle 8,869 8,657 8,657 Leasehold improvement 489,904 387,237 387,237 Sub-total 1,013,478 870,952 (35,723 ) 906,675 Less: accumulated depreciation (118,823 ) (65,612 ) 35,723 (101,335 ) Total property and equipment, net $ 894,655 $ 805,340 $ - $ 805,340 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Carrying Value of Goodwill | The change in the carrying value of goodwill is as follows: Three-Month Period Ended March 31, 2019 (Unaudited) As of (Audited) Balance $ - $ - Acquired goodwill - - Impairment - - Balance $ - $ - |
Intangibles, Net (Tables)
Intangibles, Net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangibles Assets | Intangible assets consisted of the following: March 31, 2019 (Unaudited) December 31, 2018 (Audited) Software acquired $ 14,090 $ 13,673 Less: accumulated amortization (1,021 ) (576 ) Total intangibles, net $ 13,069 $ 13,097 |
Schedule of Estimated Amortization Expense | The estimated amortization expense for each of the five succeeding years is as follows: Year ending December 31, Estimated amortization expense 2019 $ 2,804 2020 2,804 2021 2,804 2022 2,804 2023 1,853 Thereafter - Total $ 13,069 |
Accrued Expenses and Other Pa_2
Accrued Expenses and Other Payables (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Payables | Accrued expenses and other payables as of March 31, 2019 and December 31, 2018 consisted of: March 31, 2019 (Unaudited) December 31, 2018 (Audited) Staff deposits $ - $ 291 Payroll payable 114,403 107,345 Customer deposits 69,405 12,773 Deferred rent 9,483 1,018 Taxes payable 3,970 4,744 Other accrued expenses and payables 91,578 127,192 Total accrued expenses and other payables $ 288,839 $ 253,363 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following is a list of related parties to which the Company has transactions with: (a) Red Sunset Apartment, Ms. Ling Zhou is the Chief Executive Officer and Mr. Xinhui Li is the Director and Chief Executive Officer (b) Hunan Zhongfeng Investment Real Estate Co., Ltd., Ms. Ling Zhou and Ms. Jun Quan are the Directors and Mr. Xinhui Li is the Director and Chief Executive Officer (c) Shenzhen Dingda Sheng Trading Co., Ltd., Ms. Qin Zhang is the legal representative. She’s also a legal representative of Xiao De Tangshan (d) Tangshan Qicheng Technology Co. Ltd., one of the shareholders of Xiao De Tangshan. (e) Mr. Zhen Gao, one of the shareholders of Xiao De Beijing. (f) Gunda Holdings Limited, one of the shareholders of DDLX (g) Yingsheng Holdings Limited, one of the shareholders of DDLX and wholly owned by Ms. Jun Quan (h) Mr. Xinhui Li, the consultant of Xiao De Hunan and an immediate family member of Ms. Jun Quan. (i) Ms. Jun Quan, the Director of Golden Sunset Group Limited and a shareholder of DD Deluxe and Yingsheng Holdings Limited. She is also an immediate family member of Mr. Xinhui Li. (j) Ms. Zhenzhu Li, one of the shareholders of Xiao De Tian Xia (Hubei). (k) Ms.Erzhi Liu, one of the shareholders of Xiao De Tian Xia (Hubei). (l) Ms. Ling Liu, one of the shareholders and former Chief Executive Officer, President of DD’s Deluxe Rod Holder Inc. (m) Ms. Hui Liu, an Operation Manager of Hunan Guanzizai and a legal representative of Hunan Chunyi Culture Communication Co. Ltd. Amounts due from related parties Amounts due from related parties consisted of the following as of the periods indicated: Name of related parties March 31, 2019 (Unaudited) December 31, 2018 (Audited) Red Sunset Apartment (a) (1) $ 203,663 $ 225,415 Hunan Zhongfeng Investment Real Estate Co., Ltd. (b) (2) 2,980 2,909 Shenzhen Dingda Sheng Trading Co. Ltd. (c ) (3) 62,582 61,086 Tangshan Qicheng Technology Co., Ltd. (d) (4) 72,140 70,278 Mr. Zhen Gao (e) (5) 102,813 76,358 Gunda Holdings Limited (f) (6) 477 465 Yingsheng Holdings Limited (g) (7) 477 465 Ms. Zhenzhu Li (j)(13) 20,265 - Ms. Erzhi Liu (k)(14) 19,073 - Ms. Ling Liu (l)(15) 6,542 - Total $ 491,012 $ 436,977 Amounts due to related parties Amounts due to related parties consisted of the following as of the periods indicated: Name of related parties March 31, 2019 (Unaudited) December 31, 2018 (Audited) Red Sunset Apartment (a) (8) $ 4,213 $ 4,078 Tangshan Qicheng Technology Co., Ltd. (d) (9) 4,496 Mr. Zhen Gao (e) (10) 2,744 Mr. Xinhui Li (h) (11) 41,193 40,208 Ms. Jun Quan (i) (12) 895,826 840,254 Mr. Hui Liu (m) (16) 1,118 - Total $ 942,350 $ 891,780 (1) The amount due from Red Sunset Apartment to Xiao De Hunan related to the service management fee payable to Xiao De Hunan. (2) The amount due from Hunan Zhongfeng Investment Real Estate Co., Ltd. was the membership fee to the Chamber of Commerce paid by Xiao De Hunan on behalf of Zhongfeng Investment Real Estate Co. Ltd. (3) The amount receivable from Shenzhen Dingda Sheng Trading Co. Ltd. was pertinent to the operational support of this entity. (4) The amount receivable from Tangshan Qicheng Technology Co., Ltd related to the capital financing provided by Xiao De Shenzhen to Tangshan Qicheng Technology Co. Ltd. (5) The amount receivable from Mr. Zhen Gao related to the capital financing provided by Xiao De Hunan to Mr. Gao. (6) Xiao De Shenzhen paid business registration fee to Republic of Seychelles on behalf of Gunda Holdings Limited (7) Xiao De Shenzhen paid business registration fee to Republic of Seychelles on behalf of Yingsheng Holdings Limited (8) The amount payable to Red Sunset Apartment was pertinent to the group tour fee paid on behalf of Red Sunset Tourism. (9) Tangshan Qicheng Technology Co., Ltd paid salary and wages as well as other administrative expenses on behalf of Xiao De Tangshan (10) Mr. Gao paid administrative expenses on behalf of Xiao De Beijing (11) The amount payable to Mr. Li was the operational support for Red Sunset Tourism. (12) Ms. Jun Quan made payments to the third parties for the the business operations of Golden Sunset (Lodging) Hongkong, Red Sunset Apartment and DD’s Deluxe Rod Holder Inc. (13) The amount receivable from Ms. Zhenzhu Li related to the capital financing provided by Xiao De Shenzhen to Ms. Li. (14) The amount receivable from Ms. Erzhi Liu related to the capital financing provided by Xiao De Shenzhen to Ms. Liu. (15) Ms. Liu sold her ownership interest to a third party and is obligated to pay commission fee to the transfer agent. Xiao De Shenzhen paid the commission to the transfer agent on behalf of Ms. Liu. (16) Mr. Liu made payments to the third parties for the purchase of food and supplies on behalf of Hunan Guanzizai |
Earnings_(Loss) Per Share (Tabl
Earnings/(Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earning Per Share Anti-dilutive Securities | Diluted loss per share will not be computed because of the anti-dilutive effect. Three-Month Period Ended March 31, 2019 Three-Month Period Ended March 31, 2018 Numerator: Net loss attributable to the Company (828,250 ) $ (606,685 ) Denominator: Weighted-average shares outstanding-Basic 234,000,000 230,000,000 Stock options and restricted shares Weighted-average shares outstanding-Diluted 234,000,000 230,000,000 Loss per share -Basic and Diluted (0.0035 ) (0.0026 ) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Components Lease Expense | The components of lease expense were as follows: Three-Month Period Ended March 31, 2019 (Unaudited) Three-Month Period Ended March 31, 2018 (Unaudited) Operating lease cost $ 181,588 $ 109,880 Total lease cost $ 181,588 $ 109,880 |
Schedule of Other Information Related to Leases | Other information related to leases was as follows: Three-Month Period Ended March 31, 2019 (Unaudited) Three-Month Period Ended March 31, 2018 (Unaudited) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 115,494 $ 80,254 Right-of-use assets obtained in exchange for lease obligations Operating leases 71,918 205,524 Weighted average remaining lease term (years) Operating leases 4.73 6.06 Weighted average discount rate Operating leases 4.83 % 4.90 % |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments under non-cancellable leases as of March 31, 2019 were as follows: Operating Leases 2019 $ 427,270 2020 661,214 2021 701,335 2022 507,352 2023 127,808 Thereafter 354,553 Total future lease payments 2,779,532 Less: Amount representing interest 331,508 Present value of future payments 2,448,024 Less: Current portion 559,218 Long-term portion $ 1,888,806 |
Organization and Description _2
Organization and Description of Business (Details Narrative) - USD ($) | Dec. 10, 2018 | Nov. 13, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Sep. 03, 2018 | Jul. 30, 2018 | Mar. 13, 2018 | Nov. 03, 2017 |
Common stock, shares authorized | 2,000,000,000 | 2,000,000,000 | |||||||
Common stock par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||
Common stock, shares issued | 234,000,000 | 234,000,000 | |||||||
Percentage for issued and outstanding capital stock | 98.30% | ||||||||
Exclusive Service Agreement [Member] | |||||||||
Contractual arrangements, description | The agreement remains in effect for 20 years until November 6, 2037 unless terminated by either party in writing. | ||||||||
Non-related Third Party [Member] | |||||||||
Acquired ownership interest | 33.00% | 40.00% | 30.00% | ||||||
Golden Sunset Group Limited [Member] | |||||||||
Common stock, shares authorized | 460,000,000 | ||||||||
Common stock par value | $ 0.00025 | ||||||||
Common stock, shares issued | 234,000,000 | ||||||||
Senior Care Management Services Limited [Member] | |||||||||
Acquired ownership interest | 67.00% | 60.00% | 70.00% | 100.00% | |||||
Golden Sunset Technology Limited [Member] | |||||||||
Acquired ownership interest | 100.00% | ||||||||
Red Sunset Tourism Development Co Ltd [Member] | |||||||||
Cash consideration | $ 74,257 | ||||||||
Red Sunset Tourism Development Co Ltd [Member] | RMB [Member] | |||||||||
Cash consideration | $ 510,000 |
Significant Accounting Polici_4
Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Working capital deficit | $ (47,240) | ||
Comprehensive loss | (835,701) | $ (596,033) | |
Operating cash flow | (247,616) | (314,514) | |
Customer deposits and receipt in advance | 509,208 | $ 107,629 | |
Repayment of deposit | 731,336 | ||
Deposit accounts | 63,696 | ||
Cash balances, uninsured | 117,319 | 305,416 | |
Impairment of long-lived assets | |||
Impairment of goodwill | $ 177,954 | ||
HKD [Member] | |||
Deposit accounts | 500,000 | ||
69 Participants [Member] | |||
Customer deposits and receipt in advance | $ 509,208 |
Significant Accounting Polici_5
Significant Accounting Policies - Schedule of Financial Statements of Subsidiaries (Details) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Golden Sunset Group Limited ("GS Group") [Member] | |
Name of subsidiaries | Golden Sunset Group Limited ("GS Group") |
Ownership / Deemed ownership | 100.00% |
Place of incorporation | Republic of Seychelles |
Capital | $ 115,000 |
Golden Sunset International Management Limited ("GS International") [Member] | |
Name of subsidiaries | Golden Sunset International Management Limited ("GS International") |
Ownership / Deemed ownership | 100.00% |
Place of incorporation | Republic of Seychelles |
Capital | $ 5 |
Golden Sunset (Hongkong) Lodging Limited ("GS Hong Kong") [Member] | |
Name of subsidiaries | Golden Sunset (Hongkong) Lodging Limited ("GS Hong Kong") |
Ownership / Deemed ownership | 100.00% |
Place of incorporation | Hong Kong Special Kong Special Administrative Region |
Capital | $ 5 |
Xiao De Tian Xia (Shenzhen) Senior Care Service Management Co., Ltd. ("Xiao De Shenzhen") [Member] | |
Name of subsidiaries | Xiao De Tian Xia (Shenzhen) Senior Care Service Management Co., Ltd. ("Xiao De Shenzhen") |
Ownership / Deemed ownership | 100.00% |
Place of incorporation | PRC |
Capital | |
Shenzhen Golden Sunset Technology Limited ("GS Technology") [Member] | |
Name of subsidiaries | Shenzhen Golden Sunset Technology Limited ("GS Technology") |
Ownership / Deemed ownership | 100.00% |
Place of incorporation | PRC |
Capital | |
Xiao De Tian Xia (Tangshan) Senior Care Service Management Co., Ltd ("Xiao De Tangshan") [Member] | |
Name of subsidiaries | Xiao De Tian Xia (Tangshan) Senior Care Service Management Co., Ltd ("Xiao De Tangshan") |
Ownership / Deemed ownership | 60.00% |
Place of incorporation | PRC |
Capital | $ 230,793 |
Xiao De Tian Xia (Hubei) Senior Care Services Co., Ltd ("Xiao De Hubei") [Member] | |
Name of subsidiaries | Xiao De Tian Xia (Hubei) Senior Care Services Co., Ltd ("Xiao De Hubei") |
Ownership / Deemed ownership | 67.00% |
Place of incorporation | PRC |
Capital | $ 118,597 |
Hunan Xiao De Tian Xia Senior Care Industry Management Co., Ltd ("Xiao De Hunan") [Member] | |
Name of subsidiaries | Hunan Xiao De Tian Xia Senior Care Industry Management Co., Ltd ("Xiao De Hunan") |
Ownership / Deemed ownership | 100.00% |
Place of incorporation | PRC |
Capital | $ 1,512,951 |
Hunan Guanzizai Senior Care Services Co. Ltd ("Hunan Guanzizai") [Member] | |
Name of subsidiaries | Hunan Guanzizai Senior Care Services Co. Ltd ("Hunan Guanzizai") |
Ownership / Deemed ownership | 100.00% |
Place of incorporation | PRC |
Capital | $ 780,827 |
Beijing Xiao De Tian Xia Senior Care Industry Management Co., Ltd ("Xiao De Beijing") [Member] | |
Name of subsidiaries | Beijing Xiao De Tian Xia Senior Care Industry Management Co., Ltd ("Xiao De Beijing") |
Ownership / Deemed ownership | 70.00% |
Place of incorporation | PRC |
Capital | $ 338,975 |
Hengyang City Red Sunset Tourism Development Co., Ltd ("Red Sunset Tourism") [Member] | |
Name of subsidiaries | Hengyang City Red Sunset Tourism Development Co., Ltd ("Red Sunset Tourism") |
Ownership / Deemed ownership | 100.00% |
Place of incorporation | PRC |
Capital | $ 73,831 |
Significant Accounting Polici_6
Significant Accounting Policies - Schedule of Foreign Currency Exchange Rate, Translation (Details) | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
United States dollar ($1) Average Rate [Member] | HKD [Member] | |||
Foreign currency translation exchange rate | 7.8460 | 7.8279 | |
United States dollar ($1) Average Rate [Member] | RMB [Member] | |||
Foreign currency translation exchange rate | 6.7447 | 6.3535 | |
United States dollar ($1) Closing Rate [Member] | HKD [Member] | |||
Foreign currency translation exchange rate | 7.8498 | 7.8305 | |
United States dollar ($1) Closing Rate [Member] | RMB [Member] | |||
Foreign currency translation exchange rate | 6.7112 | 6.8755 |
Significant Accounting Polici_7
Significant Accounting Policies - Schedule of Foreign Currency Exchange Rate, Translation (Details) (Parenthetical) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
HKD [Member] | ||
Exchange rate | $ 1 | $ 1 |
RMB [Member] | ||
Exchange rate | $ 1 | $ 1 |
Significant Accounting Polici_8
Significant Accounting Policies - Schedule of Estimated Useful Life of Property and Equipment (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Leasehold Improvements [Member] | |
Estimated useful life for property and equipment | 5 years |
Furniture and Fixtures [Member] | |
Estimated useful life for property and equipment | 5 years |
Computer Equipment [Member] | Minimum [Member] | |
Estimated useful life for property and equipment | 3 years |
Computer Equipment [Member] | Maximum [Member] | |
Estimated useful life for property and equipment | 5 years |
Office Equipment [Member] | Minimum [Member] | |
Estimated useful life for property and equipment | 3 years |
Office Equipment [Member] | Maximum [Member] | |
Estimated useful life for property and equipment | 5 years |
Computer Software [Member] | |
Estimated useful life for property and equipment | 5 years |
Health Care Equipment [Member] | |
Estimated useful life for property and equipment | 10 years |
Motor Vehicle [Member] | |
Estimated useful life for property and equipment | 5 years |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) | Dec. 10, 2018USD ($) | Nov. 23, 2018USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
RMB [Member] | ||||
Exchange rate | $ 1 | $ 1 | ||
Red Sunset Tourism Development Co Ltd [Member] | ||||
Acquired ownership interest | 100.00% | |||
Purchase price | $ 73,831 | |||
Exchange rate | $ 1 | |||
Red Sunset Tourism Development Co Ltd [Member] | RMB [Member] | ||||
Purchase price | $ 510,000 | |||
Foreign currency translation exchange rate | 6.9077 |
Acquisitions - Schedule of Fair
Acquisitions - Schedule of Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) | Dec. 10, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Goodwill | $ 177,954 | |||
Red Sunset Tourism Development Co Ltd [Member] | ||||
Total purchase price | $ 73,831 | |||
Cash and restricted cash | 5,041 | |||
Prepaid expenses and advance to suppliers | 662 | |||
Amounts due from a related party | 3,578 | |||
Property and equipment, net | ||||
Deposits-noncurrent | 14,477 | |||
Total identifiable assets | 23,758 | |||
Other payables and accrued liabilities | (6,662) | |||
Deferred rent | (869) | |||
Amount due to directors and related parties | (120,350) | |||
Total liabilities assumed | (127,881) | |||
Goodwill | $ 177,954 |
Revenues (Details Narrative)
Revenues (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue | $ 119,453 | $ 46,124 |
Government Subsidy [Member] | ||
Revenue | $ 2,965 | |
Percentage of subsidy amount | 20.00% | |
Government Subsidy [Member] | RMB [Member] | ||
Revenue | $ 20,000 |
Revenues - Schedule of Revenue
Revenues - Schedule of Revenue Disaggregated by Revenue and Timing of Recognition (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Total | $ 119,453 | $ 46,124 |
Services Transferred at a Point in Time [Member] | ||
Total | 79,844 | 4,854 |
Services Transferred Over Time [Member] | ||
Total | 39,609 | 41,270 |
Service Management [Member] | ||
Total | 30,518 | 41,270 |
Leasing [Member] | ||
Total | 9,091 | |
Lodging Management [Member] | ||
Total | 4,854 | |
Community Care [Member] | ||
Total | 67,005 | |
Group Tour [Member] | ||
Total | $ 12,839 |
Revenues - Schedule of Cost of
Revenues - Schedule of Cost of Revenue (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Total | $ 200,981 | $ 16,429 |
Service Management [Member] | ||
Total | 8,781 | 2,876 |
Leasing [Member] | ||
Total | 371 | |
Lodging Management [Member] | ||
Total | 6,124 | |
Community Care [Member] | ||
Total | 147,845 | 7,390 |
Group Tour [Member] | ||
Total | 12,310 | |
Depreciation [Member] | ||
Total | $ 31,674 | $ 39 |
Variable Interest Entities - Sc
Variable Interest Entities - Schedule of Variable Interest Entities (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Current assets | $ 4,217,381 | $ 4,321,731 | |
Property and equipment, net | 704,490 | 693,372 | |
Other noncurrent assets | 1,189,025 | 1,262,608 | |
Total assets | 6,110,896 | 6,277,711 | |
Total liabilities | 5,732,435 | 5,681,494 | |
Net assets | 378,460 | 596,217 | |
Accounts payable, net | 12,128 | 61,542 | |
Operating lease obligations-current | 169,245 | 167,410 | |
Amount due to related parties | 4,339,972 | 4,296,446 | |
Other current liabilities | 210,568 | 192,862 | |
Total current liabilities | 4,791,913 | 4,718,260 | |
Operating lease obligations-non-current | 940,522 | 963,234 | |
Total non-current liabilities | 940,522 | 963,234 | |
Total liabilities | 5,732,435 | $ 5,681,494 | |
Revenue | 89,008 | $ 46,124 | |
Gross (loss) / profit | (91,176) | 29,695 | |
Loss from operations | (261,645) | (77,318) | |
Net loss | $ (261,882) | $ (75,599) |
Prepayments and Other Current_3
Prepayments and Other Current Assets (Details Narrative) | Mar. 31, 2019USD ($) |
Security deposit | $ 110,485 |
Sing Ho Trading Company [Member] | |
Security deposit | $ 731,336 |
Prepayments and Other Current_4
Prepayments and Other Current Assets - Schedule of Prepayments and Other Current Assets (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid professional fees | $ 149,662 | $ 120,134 |
Prepaid rent | 29,031 | 9,272 |
Prepaid repair and maintenance | 5,921 | 29,089 |
Deposits | 865,669 | 889,672 |
Staff advance | 15,950 | |
Prepaid supplies | 118,710 | 12,524 |
Tax refund | 197 | 152 |
Prepaid recruitment fee | 433 | |
Prepaid telecommunications | 4,970 | |
Prepaid insurance | 541 | |
Other current assets | 5,871 | 59,391 |
Total prepayments and other current assets | $ 1,181,005 | $ 436,977 |
Prepayments, Net of Current P_3
Prepayments, Net of Current Portion and Other Assets - Schedule of Prepayments, Net of Current Portion and Other Assets (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid repair and maintenance - non-current | $ 19,238 | $ 54,276 |
Prepaid professional fee - non-current | 96,980 | 134,097 |
Deposits - non current | 14,900 | 14,544 |
Prepaid advertising-non-current | 14,450 | |
Prepaid telecommunications-non-current | 4,099 | |
Prepaid postal services-non-current | 4,247 | |
Others non-current assets | 11,457 | |
Total prepayments, net of current portion and other assets | $ 153,914 | $ 214,374 |
Property and Equipment, Net (De
Property and Equipment, Net (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Property, Plant and Equipment, Net [Abstract] | ||
Depreciation expenses | $ 51,347 | $ 2,486 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Sub-total | $ 1,013,478 | $ 906,675 |
Less: accumulated depreciation | (118,823) | (101,335) |
Total property and equipment, net | 894,655 | 805,340 |
Previously Reported [Member] | ||
Sub-total | 870,952 | |
Less: accumulated depreciation | (65,612) | |
Total property and equipment, net | 805,340 | |
Restatement Adjustment [Member] | ||
Sub-total | (35,723) | |
Less: accumulated depreciation | 35,723 | |
Total property and equipment, net | ||
Furniture and Fixtures [Member] | ||
Sub-total | 116,631 | 113,008 |
Furniture and Fixtures [Member] | Previously Reported [Member] | ||
Sub-total | 99,542 | |
Furniture and Fixtures [Member] | Restatement Adjustment [Member] | ||
Sub-total | (13,465) | |
Equipment [Member] | ||
Sub-total | 398,074 | 397,773 |
Equipment [Member] | Previously Reported [Member] | ||
Sub-total | 375,515 | |
Equipment [Member] | Restatement Adjustment [Member] | ||
Sub-total | (22,258) | |
Motor Vehicle [Member] | ||
Sub-total | 8,869 | 8,657 |
Motor Vehicle [Member] | Previously Reported [Member] | ||
Sub-total | 8,657 | |
Motor Vehicle [Member] | Restatement Adjustment [Member] | ||
Sub-total | ||
Leasehold Improvements [Member] | ||
Sub-total | $ 489,904 | 387,237 |
Leasehold Improvements [Member] | Previously Reported [Member] | ||
Sub-total | 387,237 | |
Leasehold Improvements [Member] | Restatement Adjustment [Member] | ||
Sub-total |
Goodwill (Details Narrative)
Goodwill (Details Narrative) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 177,954 |
Goodwill - Schedule of Carrying
Goodwill - Schedule of Carrying Value of Goodwill (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill, beginning balance | ||
Acquired goodwill | ||
Translation adjustment | ||
Goodwill, ending balance | $ 177,954 |
Intangibles, Net (Details Narra
Intangibles, Net (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expenses | $ 697 | $ 42 |
Intangibles, Net - Schedule of
Intangibles, Net - Schedule of Intangibles Assets (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Software acquired | $ 14,090 | $ 13,673 |
Less: accumulated amortization | (1,021) | (576) |
Total intangibles, net | $ 13,069 | $ 13,097 |
Intangibles, Net - Schedule o_2
Intangibles, Net - Schedule of Estimated Amortization Expense (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2019 | $ 2,804 | |
2020 | 2,804 | |
2021 | 2,804 | |
2022 | 2,804 | |
2023 | 1,853 | |
Thereafter | ||
Total intangibles, net | $ 13,069 | $ 13,097 |
Accrued Expenses and Other Pa_3
Accrued Expenses and Other Payables - Schedule of Accrued Expenses and Other Payables (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Staff deposits | $ 291 | |
Payroll payable | 114,403 | 107,345 |
Customer deposits | 69,405 | 12,773 |
Deferred rent | 9,483 | 1,018 |
Taxes payable | 3,970 | 4,744 |
Other accrued expenses and payables | 91,578 | 127,192 |
Total accrued expenses and other payables | $ 288,839 | $ 253,363 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Party Transactions (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | |
Amounts due from related parties | $ 491,012 | $ 1,136,182 | |
Amounts due to related parties | 942,350 | 891,779 | |
Red Sunset Apartment [Member] | |||
Amounts due from related parties | [1],[2] | 203,663 | 225,415 |
Amounts due to related parties | [1],[3] | 4,213 | 4,078 |
Hunan Zhongfeng Investment Real Estate Co., Ltd [Member] | |||
Amounts due from related parties | [4],[5] | 2,980 | 2,909 |
Shenzhen Dingda Sheng Trading Co. Ltd. [Member] | |||
Amounts due from related parties | [6],[7] | 62,582 | 61,086 |
Tangshan Qicheng Technology Co., Ltd. [Member] | |||
Amounts due from related parties | [8],[9] | 72,140 | 70,278 |
Amounts due to related parties | [8],[10] | 4,496 | |
Mr. Zhen Gao [Member] | |||
Amounts due from related parties | [11],[12] | 102,813 | 76,358 |
Amounts due to related parties | [11],[13] | 2,744 | |
Gunda Holdings Limited [Member] | |||
Amounts due from related parties | [14],[15] | 477 | 465 |
Yingsheng Holdings Limited [Member] | |||
Amounts due from related parties | [16],[17] | 477 | 465 |
Ms. Zhenzhu Li [Member] | |||
Amounts due from related parties | [18],[19] | 20,265 | |
Ms. Erzhi Liu [Member] | |||
Amounts due from related parties | [20],[21] | 19,073 | |
Ms. Ling Liu [Member] | |||
Amounts due from related parties | [22],[23] | 6,542 | |
Mr. Xinhui Li [Member] | |||
Amounts due to related parties | [24],[25] | 41,193 | 40,208 |
Ms. Jun Quan [Member] | |||
Amounts due to related parties | [26],[27] | 895,826 | 840,254 |
Mr. Hui Liu [Member] | |||
Amounts due to related parties | [28],[29] | $ 1,118 | |
[1] | Red Sunset Apartment, Ms. Ling Zhou is the Chief Executive Officer and Mr. Xinhui Li is the Director and Chief Executive Officer | ||
[2] | The amount due from Red Sunset Apartment to Xiao De Hunan related to the service management fee payable to Xiao De Hunan. | ||
[3] | The amount payable to Red Sunset Apartment was pertinent to the group tour fee paid on behalf of Red Sunset Tourism. | ||
[4] | Hunan Zhongfeng Investment Real Estate Co., Ltd., Ms. Ling Zhou and Ms. Jun Quan are the Directors and Mr. Xinhui Li is the Director and Chief Executive Officer | ||
[5] | The amount due from Hunan Zhongfeng Investment Real Estate Co., Ltd. was the membership fee to the Chamber of Commerce paid by Xiao De Hunan on behalf of Zhongfeng Investment Real Estate Co. Ltd. | ||
[6] | Shenzhen Dingda Sheng Trading Co., Ltd., Ms. Qin Zhang is the legal representative. She's also a legal representative of Xiao De Tangshan | ||
[7] | The amount receivable from Shenzhen Dingda Sheng Trading Co. Ltd. was pertinent to the operational support of this entity. | ||
[8] | Tangshan Qicheng Technology Co. Ltd., one of the shareholders of Xiao De Tangshan. | ||
[9] | The amount receivable from Tangshan Qicheng Technology Co., Ltd related to the capital financing provided by Xiao De Shenzhen to Tangshan Qicheng Technology Co. Ltd. | ||
[10] | Tangshan Qicheng Technology Co., Ltd paid salary and wages as well as other administrative expenses on behalf of Xiao De angshan | ||
[11] | Mr. Zhen Gao, one of the shareholders of Xiao De Beijing. | ||
[12] | The amount receivable from Mr. Zhen Gao related to the capital financing provided by Xiao De Hunan to Mr. Gao. | ||
[13] | Mr. Gao paid administrative expenses on behalf of Xiao De Beijing | ||
[14] | Gunda Holdings Limited, one of the shareholders of DDLX | ||
[15] | Xiao De Shenzhen paid business registration fee to Republic of Seychelles on behalf of Gunda Holdings Limited | ||
[16] | Xiao De Shenzhen paid business registration fee to Republic of Seychelles on behalf of Yingsheng Holdings Limited | ||
[17] | Yingsheng Holdings Limited, one of the shareholders of DDLX and wholly owned by Ms. Jun Quan | ||
[18] | Ms. Zhenzhu Li, one of the shareholders of Xiao De Tian Xia (Hubei) | ||
[19] | The amount receivable from Ms. Zhenzhu Li related to the capital financing provided by Xiao De Shenzhen to Ms. Li. | ||
[20] | Ms.Erzhi Liu, one of the shareholders of Xiao De Tian Xia (Hubei) | ||
[21] | The amount receivable from Ms. Erzhi Liu. related to the capital financing provided by Xiao De Shenzhen to Ms. Liu. | ||
[22] | Ms. Ling Liu, one of the shareholders and former Chief Executive Officer, President of DD's Deluxe Rod Holder Inc. | ||
[23] | Ms. Liu sold her ownership interest to a third party and is obligated to pay commission fee to the transfer agent. Xiao De Shenzhen paid the commission to the transfer agent on behalf of Ms. Liu. | ||
[24] | Mr. Xinhui Li, the consultant of Xiao De Hunan and an immediate family member of Ms. Jun Quan. | ||
[25] | The amount payable to Mr. Li was the operational support for Red Sunset Tourism. | ||
[26] | Ms. Jun Quan made payments to the third parties for the business operations of Golden Sunset (Lodging) Hongkong, Red Sunset Apartment and DD's Deluxe Rod Holder Inc. | ||
[27] | Ms. Jun Quan, the Director of Golden Sunset Group Limited and a shareholder of DD Deluxe and Yingsheng Holdings Limited. She is also an immediate family member of Mr. Xinhui Li. | ||
[28] | Mr. Liu made payments to the third parties for the purchase of food and supplies on behalf of Hunan Guanzizai | ||
[29] | Ms. Hui Liu, an Operation Manager of Hunan Guanzizai and a legal representative of Hunan Chunyi Culture Communication Co. Ltd. |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income tax reconciliation description | The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, (1) reducing the U.S. federal corporate income tax rate from 35 percent to 21 percent; (2) requiring companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries; (3) generally eliminating U.S. federal corporate income taxes on dividends from foreign subsidiaries; (4) providing modification to subpart F provisions and new taxes on certain foreign earnings such as Global Intangible Low-Taxed Income (GILTI). Except for the one-time transition tax, most of these provisions go into effect starting January 1, 2018. | |
Federal corporate tax rate | 21.00% | |
Taxable profit income tax rate | 0.00% | 0.00% |
Tax Cuts and Jobs Act [Member] | ||
Income tax reconciliation description | The Global Intangible Low-taxed Income (GILTI) is a new provision introduced by the Tax Cuts and Jobs Act. U.S. shareholders, who are domestic corporations, of controlled foreign corporations (CFCs) are eligible for up to an 80% deemed paid foreign tax credit (FTC) and a 50% deduction of the current year inclusion with the full amount of the Section 78 gross-up subject to limitation. This new provision is effective for tax years of foreign corporations beginning after December 31, 2017. The Company has evaluated whether it has additional provision amount resulted by the GILTI inclusion on current earnings and profits of its foreign controlled corporations. The Company has made an accounting policy choice of treating taxes due on future U.S. inclusions in taxable amount related to GILTI as a current period expense when incurred. |
Earnings_(Loss) Per Share - Sch
Earnings/(Loss) Per Share - Schedule of Earning Per Share Anti-dilutive Securities (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Net loss attributable to the Company | $ (828,250) | $ (606,685) |
Weighted-average shares outstanding-Basic | 234,000,000 | 230,000,000 |
Stock options and restricted shares | ||
Weighted-average shares outstanding-Diluted | 234,000,000 | 230,000,000 |
Loss per share-Basic and Diluted | $ (0.0035) | $ (0.0026) |
Commitments and Contingencies -
Commitments and Contingencies - (Details Narrative) | May 01, 2017 | Mar. 31, 2019USD ($) | Mar. 31, 2019CNY (¥) | Mar. 31, 2018USD ($) | Mar. 31, 2018CNY (¥) | Dec. 31, 2018CNY (¥) | Mar. 31, 2019CNY (¥) | Dec. 31, 2018USD ($) |
Legal and professional services | $ 129,183 | |||||||
Telecommunication services | 1,129 | |||||||
Advertising services | 60,042 | |||||||
Marketing services | 203,683 | |||||||
Annual rent payments | 1,779 | |||||||
Right of use balance of lease | 2,416,493 | $ 2,493,044 | ||||||
Related Party Leases [Member] | ||||||||
Right of use balance of lease | 5,107 | 5,362 | ||||||
Lease liability | 5,107 | 5,362 | ||||||
RMB [Member] | ||||||||
Annual rent payments | ¥ | ¥ 12,000 | |||||||
RMB [Member] | Related Party Leases [Member] | ||||||||
Right of use balance of lease | 34,276 | 36,835 | ||||||
Lease liability | ¥ 34,276 | $ 36,835 | ||||||
Lease Arrangement [Member] | ||||||||
Lease description | The lease with the related party is classified in accordance with the lease classification criteria applicable to all other leases on the basis of the legally enforceable terms and conditions. Xiao De Hunan leased 6 units from Red Sunset Apartment for our administrative office. | |||||||
Lease term | 5 years | |||||||
Lease maturity date | Apr. 30, 2022 | |||||||
Lease expense | 445 | $ 472 | ||||||
Lease Arrangement [Member] | RMB [Member] | ||||||||
Lease expense | ¥ | ¥ 3,000 | ¥ 3,000 | ||||||
2020 [Member] | ||||||||
Legal and professional services | 129,183 | |||||||
Telecommunication services | 1,129 | |||||||
Advertising services | 60,042 | |||||||
Marketing services | 203,683 | |||||||
Annual rent payments | $ 1,779 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Components Lease Expense (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease cost | $ 181,588 | $ 109,880 |
Total lease cost | $ 181,588 | $ 109,880 |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Other Information Related to Leases (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases | $ 115,494 | $ 80,254 |
Right-of-use assets obtained in exchange for lease obligations: Operating leases | $ 71,918 | $ 205,524 |
Weighted average remaining lease term (years) : Operating leases | 4 years 8 months 23 days | 6 years 22 days |
Weighted average discount rate: Operating leases | 4.83% | 4.90% |
Commitments and Contingencies_4
Commitments and Contingencies - Schedule of Future Minimum Rental Payments for Operating Leases (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Commitments and Contingencies Disclosure [Abstract] | ||
2019 | $ 427,270 | |
2020 | 661,214 | |
2021 | 701,335 | |
2022 | 507,352 | |
2023 | 127,808 | |
Thereafter | 354,553 | |
Total future lease payments | 2,779,532 | |
Less: Amount representing interest | 331,508 | |
Present value of future payments | 2,448,024 | |
Less: Current portion | 559,218 | $ 441,781 |
Long-term portion | $ 1,888,806 | $ 2,049,485 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] | May 05, 2019USD ($) | May 05, 2019CNY (¥) | Apr. 23, 2019USD ($) | Apr. 23, 2019CNY (¥) |
Xiao De Hubei [Member] | Wuhan City Han Xing Street Municipal Office [Member] | ||||
Service agreement description | Xiao De Hubei entered into an agreement with Wuhan City Han Xing Street Municipal Office that Xiao De Hubei was permitted to provide community care services to Han Xing Street Elderly Community Care Service Center from April 24, 2019 through April 23, 2020. Xiao De Hubei will be granted government subsidy in an annual amount of approximately $28,170 (RMB190,000) to support its operational cost incurred for the Han Xing Street Elderly Community Care Service Center. The municipal office will offer 60% of the subsidy amount, approximately $16,900, (RMB114,000), to Xiao De Hubei in 30 days after the agreement was signed. The remaining subsidy amount, RMB76,000, is subject to the evaluation by the municipal office after one year. Xiao De Hubei will be entitled to the full remaining subsidy amount if it earns 90 points (out of 100 points) in the evaluation. Approximately $148 (RMB1,000) will be reduced for each point discounted. | Xiao De Hubei entered into an agreement with Wuhan City Han Xing Street Municipal Office that Xiao De Hubei was permitted to provide community care services to Han Xing Street Elderly Community Care Service Center from April 24, 2019 through April 23, 2020. Xiao De Hubei will be granted government subsidy in an annual amount of approximately $28,170 (RMB190,000) to support its operational cost incurred for the Han Xing Street Elderly Community Care Service Center. The municipal office will offer 60% of the subsidy amount, approximately $16,900, (RMB114,000), to Xiao De Hubei in 30 days after the agreement was signed. The remaining subsidy amount, RMB76,000, is subject to the evaluation by the municipal office after one year. Xiao De Hubei will be entitled to the full remaining subsidy amount if it earns 90 points (out of 100 points) in the evaluation. Approximately $148 (RMB1,000) will be reduced for each point discounted. | ||
Annual amount of government subsidy | $ | $ 28,170 | |||
Percentage of subsidy amount granted by municipal office | 60.00% | 60.00% | ||
Subsidy amount granted by municipal office | $ | $ 16,900 | |||
Xiao De Hubei [Member] | Wuhan City Han Xing Street Municipal Office [Member] | RMB [Member] | ||||
Annual amount of government subsidy | ¥ 190,000 | |||
Subsidy amount granted by municipal office | 114,000 | |||
Remaining subsidy amount | 76,000 | |||
Xiao De Hubei [Member] | Hubei Hubei Yangtze Long Shang Media Group Co. Ltd [Member] | ||||
Estimated fee for production | $ | $ 500,000 | |||
Xiao De Hubei [Member] | Hubei Hubei Yangtze Long Shang Media Group Co. Ltd [Member] | RMB [Member] | ||||
Estimated fee for production | ¥ 74,130 | |||
Xiao De Shenzhen [Member] | Tangshan Yicheng Construction and Design Co., Limited [Member] | ||||
Total estimate budget of project | $ | $ 32,370 | |||
Xiao De Shenzhen [Member] | Tangshan Yicheng Construction and Design Co., Limited [Member] | RMB [Member] | ||||
Total estimate budget of project | ¥ 218,345 |