Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Dec. 29, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | HF Enterprises Inc. | |
Entity Central Index Key | 0001750106 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | true | |
Entity Small Business | true | |
Is Entity's Reporting Status Current? | No | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | NV | |
Entity File Number | 001-39732 | |
Entity Common Stock, Shares Outstanding | 8,570,000 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 | |
Entity Ex-Transition Period | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash | $ 8,754,202 | $ 2,774,587 |
Restricted cash | 4,235,274 | 4,447,678 |
Accounts receivable, net | 56,191 | 170,442 |
Other receivables | 369,888 | 681,677 |
Note receivables - related parties | 209,398 | 0 |
Prepaid expenses | 1,902,079 | 145,186 |
Inventory | 63,455 | 116,698 |
Investment in securities at fair value | 59,745,321 | 3,015,698 |
Investment in securities at cost | 236,756 | 200,128 |
Investment in securities at equity method | 2,245 | 0 |
Deposits | 50,539 | 48,717 |
Current assets from discontinued operations | 0 | 139,431 |
Total current assets | 75,625,348 | 11,740,242 |
Real Estate | ||
Properties under development | 24,990,366 | 23,884,704 |
Operating lease right-of-use asset | 546,519 | 146,058 |
Deposit | 234,134 | 21,491 |
Property and equipment, net | 77,663 | 80,285 |
Total assets | 101,474,030 | 35,872,780 |
Current liabilities: | ||
Accounts payable and accrued expenses | 4,812,881 | 3,995,001 |
Advance from related party | 710,524 | 0 |
Accrued interest - related parties | 33,828 | 834,536 |
Deferred revenue | 3,046,687 | 258,594 |
Builder deposits | 1,661,303 | 890,069 |
Operating lease liability | 339,849 | 58,865 |
Notes payable | 228,468 | 157,105 |
Notes payable - related parties | 160,000 | 410,000 |
Accumulated losses on equity method investment | 231,418 | 0 |
Income tax payable | 249,698 | 420,327 |
Current liabilities from discontinued operations | 0 | 7,021 |
Total current liabilities | 11,474,656 | 7,031,518 |
Long-term liabilities: | ||
Builder deposits | 147,444 | 1,555,200 |
Operating lease liability | 202,038 | 91,330 |
Note payable, net of debt discount | 619,329 | 0 |
Notes payable - related parties | 2,056,183 | 4,971,401 |
Total liabilities | 14,499,650 | 13,649,449 |
Stockholders' equity: | ||
Preferred Stock, $0.001 par value; 5,000,000 shares authorized, none issued | 0 | 0 |
Common Stock, $0.001 par value; 20,000,000 shares authorized; 6,400,000 shares issued and outstanding on September 30, 2020 and 10,001,000 shares issued and outstanding on December 31, 2019 | 6,400 | 10,001 |
Additional paid In capital | 94,053,568 | 54,263,717 |
Accumulated deficit | (49,803,606) | (40,494,115) |
Accumulated other comprehensive income | 1,045,584 | 1,468,269 |
Total stockholders' equity | 45,301,946 | 15,247,872 |
Non-controlling interests | 41,672,434 | 6,975,459 |
Total stockholders' equity | 86,974,380 | 22,223,331 |
Total liabilities and stockholders' equity | $ 101,474,030 | $ 35,872,780 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Stockholders' equity: | ||
Preferred stock, par value | $ .001 | $ .001 |
Preferred stock, authorized | 5,000,000 | 5,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $ .001 | $ 0.001 |
Common stock, authorized | 20,000,000 | 20,000,000 |
Common stock, issued | 6,400,000 | 10,001,000 |
Common stock, outstanding | 6,400,000 | 10,001,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Other Comprehensive Loss - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue | ||||
Property sales | $ 2,146,992 | $ 4,938,017 | $ 7,148,786 | $ 21,509,197 |
Biohealth product sales | 1,931 | 360,351 | 31,133 | 1,406,951 |
Others | 0 | 8,495 | 0 | 28,350 |
Total revenue | 2,148,923 | 5,306,863 | 7,179,919 | 22,944,498 |
Operating expenses | ||||
Cost of sales | 1,616,377 | 4,130,484 | 5,609,303 | 19,177,800 |
General and administrative | 798,186 | 1,445,678 | 4,196,939 | 4,330,751 |
Impairment of real estate | 0 | 0 | 0 | 3,938,769 |
Total operating expenses | 2,414,563 | 5,576,162 | 9,806,242 | 27,447,320 |
Loss From Continuing Operations | (265,640) | (269,299) | (2,626,323) | (4,502,822) |
Other income (expense) | ||||
Interest income | 2,504 | 16,440 | 14,995 | 44,021 |
Interest expense | (19,825) | (86,347) | (160,341) | (286,805) |
Gain on disposal of subsidiary | 0 | 0 | 0 | 299,255 |
Gain on deconsolidation | 53,200,752 | 0 | 53,200,752 | 0 |
Loss on consolidation | (21,909,596) | (21,909,596) | ||
Foreign exchange transaction gain (loss) | (415,203) | 757,068 | 960,268 | 438,608 |
Unrealized (loss) gain on securities investment | (43,761,763) | 507,727 | (42,169,116) | (146,470) |
Loss on investment on security by equity method | (52,392) | 0 | (193,132) | (30,166) |
Other income | 8,563 | 2,887 | 52,847 | 38,993 |
Total other income (expense) | (12,946,960) | 1,197,775 | (10,203,323) | 357,436 |
Net (loss) income from continuing operations before income taxes | (13,212,600) | 928,476 | (12,829,646) | (4,145,386) |
Income tax expense from continuing operations | (74,106) | 0 | (188,759) | 0 |
Net (loss) income from continuing operations | (13,286,706) | 928,476 | (13,018,405) | (4,145,386) |
Loss from discontinued operations, net of tax | (56,053) | (128,554) | (417,438) | (388,931) |
Net loss | (13,342,759) | 799,922 | (13,435,843) | (4,534,317) |
Net (loss) income attributable to non-controlling interest | (3,505,919) | 36,181 | (4,126,352) | (1,437,202) |
Net (loss) income attributable to common stockholders | (9,836,839) | 763,741 | (9,309,491) | (3,097,115) |
Other comprehensive income (loss), net | ||||
Unrealized gain on securities investment | 29,123 | (53,681) | 29,639 | (36,747) |
Foreign currency translation adjustment | 462,064 | (584,561) | (585,085) | (325,518) |
Comprehensive loss | (12,851,571) | 161,680 | (13,991,289) | (4,896,582) |
Comprehensive loss attributable to non-controlling interests | (3,276,947) | (160,972) | (4,190,100) | (1,549,106) |
Comprehensive income (loss) attributable to common stockholders | $ (9,574,624) | $ 322,652 | $ (9,801,189) | $ (3,347,476) |
Net income (loss) per share - basic and diluted | ||||
Continuing operations | $ (1.53) | $ .08 | $ (1.07) | $ (.31) |
Discontinued operations | (0.01) | 0 | (0.03) | 0 |
Net (loss) income per share | $ (1.54) | $ 0.08 | $ (1.10) | $ (0.31) |
Weighted average common shares outstanding - basic and diluted | 6,400,000 | 10,001,000 | 8,712,081 | 10,001,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Non-Controlling Interest | Total |
Beginning balance, shares at Dec. 31, 2018 | 0 | 10,001,000 | |||||
Beginning balance, amount at Dec. 31, 2018 | $ 0 | $ 10,001 | $ 53,717,424 | $ 1,582,788 | $ (35,263,650) | $ 9,155,051 | $ 29,201,614 |
Proceeds from selling subsidiary equity | 127,508 | 56,992 | 184,500 | ||||
Change in unrealized gain (loss) on investment | 11,681 | 5,221 | 16,902 | ||||
Foreign currency translation | 74,262 | 33,194 | 107,456 | ||||
Net income | 344,151 | 50,766 | 394,917 | ||||
Ending balance, shares at Mar. 31, 2019 | 0 | 10,001,000 | |||||
Ending balance, amount at Mar. 31, 2019 | $ 0 | $ 10,001 | 53,844,932 | 1,668,731 | (34,919,499) | 9,301,224 | 29,905,389 |
Beginning balance, shares at Dec. 31, 2018 | 0 | 10,001,000 | |||||
Beginning balance, amount at Dec. 31, 2018 | $ 0 | $ 10,001 | 53,717,424 | 1,582,788 | (35,263,650) | 9,155,051 | 29,201,614 |
Net income | (4,534,317) | ||||||
Ending balance, shares at Sep. 30, 2019 | 0 | 10,001,000 | |||||
Ending balance, amount at Sep. 30, 2019 | $ 0 | $ 10,001 | 53,876,032 | 1,332,426 | (38,360,765) | 6,936,588 | 23,794,282 |
Beginning balance, shares at Mar. 31, 2019 | 0 | 10,001,000 | |||||
Beginning balance, amount at Mar. 31, 2019 | $ 0 | $ 10,001 | 53,844,932 | 1,668,731 | (34,919,499) | 9,301,224 | 29,905,389 |
Proceeds from selling subsidiary equity | 10,367 | 4,633 | 15,000 | ||||
Change in unrealized gain (loss) on investment | 22 | 10 | 32 | ||||
Foreign currency translation | 104,762 | 46,825 | 151,587 | ||||
Distribution to non-controlling shareholder | (740,250) | (740,250) | |||||
Net income | (4,205,007) | (1,524,149) | (5,729,156) | ||||
Ending balance, shares at Jun. 30, 2019 | 0 | 10,001,000 | |||||
Ending balance, amount at Jun. 30, 2019 | $ 0 | $ 10,001 | 53,855,299 | 1,773,515 | (39,124,506) | 7,088,293 | 23,602,602 |
Proceeds from selling subsidiary equity | 20,733 | 9,267 | 30,000 | ||||
Change in unrealized gain (loss) on investment | (37,099) | (16,582) | (53,681) | ||||
Foreign currency translation | (403,990) | (180,571) | (584,561) | ||||
Net income | 763,741 | 36,181 | 799,922 | ||||
Ending balance, shares at Sep. 30, 2019 | 0 | 10,001,000 | |||||
Ending balance, amount at Sep. 30, 2019 | $ 0 | $ 10,001 | 53,876,032 | 1,332,426 | (38,360,765) | 6,936,588 | 23,794,282 |
Beginning balance, shares at Dec. 31, 2019 | 0 | 10,001,000 | |||||
Beginning balance, amount at Dec. 31, 2019 | $ 0 | $ 10,001 | 54,263,717 | 1,468,269 | (40,494,115) | 6,975,459 | 22,223,331 |
Subsidiary's issuance of stock | 96,042 | 50,811 | 146,853 | ||||
Proceeds from selling subsidiary equity | 3,270 | 1,730 | 5,000 | ||||
Change in unrealized gain (loss) on investment | (8,240) | (4,359) | (12,599) | ||||
Foreign currency translation | (1,094,810) | (579,211) | (1,674,021) | ||||
Distribution to non-controlling shareholder | (197,400) | (197,400) | |||||
Net income | 1,447,666 | 567,985 | 2,015,651 | ||||
Ending balance, shares at Mar. 31, 2020 | 0 | 10,001,000 | |||||
Ending balance, amount at Mar. 31, 2020 | $ 0 | $ 10,001 | 54,363,029 | 365,219 | (39,046,449) | 6,815,015 | 22,506,815 |
Beginning balance, shares at Dec. 31, 2019 | 0 | 10,001,000 | |||||
Beginning balance, amount at Dec. 31, 2019 | $ 0 | $ 10,001 | 54,263,717 | 1,468,269 | (40,494,115) | 6,975,459 | 22,223,331 |
Net income | (13,435,843) | ||||||
Ending balance, shares at Sep. 30, 2020 | 0 | 6,400,000 | |||||
Ending balance, amount at Sep. 30, 2020 | $ 0 | $ 6,400 | 94,053,568 | 1,045,584 | (49,803,606) | 41,672,434 | 86,974,380 |
Beginning balance, shares at Mar. 31, 2020 | 0 | 10,001,000 | |||||
Beginning balance, amount at Mar. 31, 2020 | $ 0 | $ 10,001 | 54,363,029 | 365,219 | (39,046,449) | 6,815,015 | 22,506,815 |
Cancellation of outstanding stock, shares | 0 | (3,601,000) | |||||
Cancellation of outstanding stock, amount | $ 0 | $ (3,601) | 3,601 | 0 | |||
Subsidiary's issuance of stock | 1,262,990 | 770,156 | 2,033,146 | ||||
Change in minority interest | (445,936) | (18,317) | 464,253 | 0 | |||
Proceeds from selling subsidiary equity | 16,959 | 10,341 | 27,300 | ||||
Change in unrealized gain (loss) on investment | 8,147 | 4,968 | 13,115 | ||||
Foreign currency translation | 389,413 | 237,459 | 626,872 | ||||
Net income | (920,318) | (1,188,418) | (2,108,736) | ||||
Ending balance, shares at Jun. 30, 2020 | 0 | 6,400,000 | |||||
Ending balance, amount at Jun. 30, 2020 | $ 0 | $ 6,400 | 55,200,643 | 744,462 | (39,966,767) | 7,113,774 | 23,098,512 |
Subsidiary's issuance of stock | 5,494,373 | 5,270,464 | 10,764,837 | ||||
Change in minority interest | (989,342) | 50,420 | (394,507) | (1,333,429) | |||
Proceeds from selling subsidiary equity | 74,008 | 70,992 | 145,000 | ||||
Stock exchange with related party | 34,273,886 | 32,877,145 | 67,151,031 | ||||
Change in unrealized gain (loss) on investment | 14,865 | 14,258 | 29,123 | ||||
Foreign currency translation | 235,837 | 226,227 | 462,064 | ||||
Net income | (9,836,839) | (3,505,919) | (13,342,759) | ||||
Ending balance, shares at Sep. 30, 2020 | 0 | 6,400,000 | |||||
Ending balance, amount at Sep. 30, 2020 | $ 0 | $ 6,400 | $ 94,053,568 | $ 1,045,584 | $ (49,803,606) | $ 41,672,434 | $ 86,974,380 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash Flows from Operating Activities | ||
Net loss from continuing operations | $ (13,018,405) | $ (4,145,386) |
Adjustments to Reconcile Net Loss from Continuing Operations to Net Cash Provided (Used in) by Operating Activities: | ||
Depreciation | 15,225 | 20,697 |
Amortization of right-of-use asset | 182,120 | 55,726 |
Amortization of debt discount | 9,217 | 0 |
Gain on disposal of subsidiary | 0 | (299,255) |
Share-based compensation | 1,584,412 | 0 |
Foreign exchange transaction gain | (960,268) | (438,608) |
Unrealized loss on securities investment | 42,169,116 | 146,470 |
Loss on equity method investment | 193,132 | 0 |
Gain from deconsolidation | (53,200,752) | 0 |
Loss from consolidation | 21,909,596 | |
Impairment of real estate | 0 | 3,938,769 |
Changes in operating assets and liabilities | ||
Real estate | (544,419) | 12,565,198 |
Trade receivables | 454,109 | (125,855) |
Prepaid expense | (1,801,795) | 9,542 |
Deferred revenue | 2,747,121 | (36,467) |
Inventory | 55,486 | (21,253) |
Accounts payable and accrued expenses | 1,534,838 | (1,130,721) |
Accrued interest - related parties | (788,748) | 275,245 |
Operating lease liability | (221,838) | (62,707) |
Builder deposits | (636,522) | (1,340,086) |
Income tax payable | (170,630) | 0 |
Net Cash (Used in) Provided by Continuing Operating Activities | (489,005) | 9,411,309 |
Net Cash Used in Discontinued Operating Activities | (522,435) | (446,409) |
Net Cash (Used in) Provided by Operating Activities | (1,011,440) | 8,964,900 |
Cash Flows From Investing Activities | ||
Purchase of fixed assets | (10,133) | 0 |
Proceeds from Global Opportunity Fund Liquidation | 301,976 | 0 |
Purchase of investments | (158,667) | 0 |
Promissory note to related party | (200,000) | 0 |
Net Cash Provided by (Used in) Continuing Investing Activities | (66,824) | 0 |
Net Cash from Discontinued Investing Activities | 0 | (36,000) |
Net Cash Provided by (Used in) Investing Activities | (66,824) | (36,000) |
Cash Flows From Financing Activities | ||
Proceeds from exercise of subsidiary warrants | 10,764,837 | 0 |
Proceeds from sale of subsidiary shares | 177,300 | 229,500 |
Borrowings | 738,783 | 0 |
Financing fee | (82,062) | 0 |
Repayments of note payable | (250,000) | (13,899) |
Distribution to minority shareholder | (197,400) | (740,250) |
Repayment to notes payable - related parties | (4,450,572) | (2,507,840) |
Net Cash Provided by (Used in) Continuing Financing Activities | 6,700,886 | (3,032,489) |
Net Cash Provided by Discontinued Financing Activities | 0 | 0 |
Net Cash Provided by (Used in) Financing Activities | 6,700,886 | (3,032,489) |
Net Increase in Cash and Restricted Cash | 5,622,622 | 5,896,411 |
Effects of Foreign Exchange Rates on Cash | 35,858 | 9,287 |
Cash and Restricted Cash - Beginning of Year | 7,330,996 | 5,508,198 |
Cash and Restricted Cash- End of Period | 12,989,476 | 11,413,896 |
Supplementary Cash Flow Information | ||
Cash Paid for Interest | 13,843 | 4,663 |
Supplemental Disclosure of Non-Cash Investing and Financing Activities | ||
Amortization of debt discount capitalized | 0 | 381,823 |
Stock acquired by disposal of a subsidiary | $ 67,208,173 | $ 0 |
NATURE OF OPERATIONS AND SUMMAR
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Nature of Operations HF Enterprises Inc. (the “Company” or “HFE”) was incorporated in the State of Delaware on March 7, 2018 and 1,000 shares of common stock was issued to Chan Heng Fai, the founder, Chairman and Chief Executive Officer of the Company. HFE is a diversified holding company principally engaged in property development, digital transformation technology, biohealth and other related business activities with operations in the United States, Singapore, Hong Kong, Australia and South Korea. The Company manages its principal businesses primarily through its subsidiary, Alset International Limited (“Alset International”, f.k.a. Singapore eDevelopment Limited), a company publicly traded on the Singapore Stock Exchange. On October 1, 2018, Chan Heng Fai transferred his 100% interest in Hengfai International Pte. Ltd. (“Hengfai International”) to HF Enterprises Inc. in exchange for 8,500,000 shares of the Company’s common stock. Hengfai International holds a 100% interest in Hengfai Business Development Pte. Ltd. (“Hengfai Business Development”). Both Hengfai International and Hengfai Business Development are holding companies with no business operations. On September 30, 2020, the Company held 791,150,294 shares and 359,834,471 warrants of Alset International, which is the primary operating company of HFE. The Company held 761,150,294 shares and 359,834,471 warrants of Alset International on December 31, 2019. On September 30, 2020 and December 31, 2019, the Company’s ownership of Alset International was 51.04% and 69.08%, respectively. Also, on October 1, 2018, Chan Heng Fai transferred his 100% ownership interest in Heng Fai Enterprises Pte. Ltd. (“Heng Fai Enterprises”) and Global eHealth Limited (“Global eHealth”) to HF Enterprises Inc. in exchange for 500,000 and 1,000,000 shares of the Company’s common stock, respectively. The contributions to HFE on October 1, 2018 of Hengfai International, Heng Fai Enterprises, and Global eHealth from Chan Heng Fai represented transactions under common control. On June 24, 2020, HFE Holdings Limited surrendered 3,600,000 shares of our common stock to the treasury of our Company, and Chan Heng Fai surrendered 1,000 shares of our common stock to the treasury of our Company, and all such shares were cancelled. The Company has four operating segments based on the products and services offered. These include our three principal businesses – property development, digital transformation technology and biohealth – as well as a fourth category consisting of certain other business activities. Property Development The Company’s property development segment is comprised of LiquidValue Development Inc. ("LiquidValue Development") and SeD Perth Pty Ltd. In 2014, Alset International commenced operations developing property projects and participating in third-party property development projects. LiquidValue Development Inc. (f.k.a. SeD Intelligent Home Inc.) a 99.9%-owned subsidiary of Alset International, owns, operates and manages real estate development projects with a focus on land subdivision developments. Development activities are generally contracted out, including planning, design and construction, as well as other work with engineers, surveyors, architects and general contractors. The developed lots are then sold to builders for the construction of new homes. LiquidValue Development's primary real estate projects are two subdivision development projects, one near Houston, Texas, known as Black Oak, consisting of 162 acres and currently projected to have approximately 512 units, and one in Frederick, Maryland, known as Ballenger Run, consisting of 197 acres and currently projected to have approximately 689 units. Digital Transformation Technology The Company’s digital transformation technology segment is comprised of HotApp Blockchain Inc. and its subsidiaries. The Company’s digital transformation technology business is involved in mobile application product development and other businesses, providing information technology services to end-users, service providers and other commercial users through multiple platforms. This technology platform consists of instant messaging systems, social media, e-commerce and payment systems, direct marketing platforms, e-real estate, brand protection and counterfeit and fraud detection. HotApp Blockchain Inc. (“HotApp Blockchain" or “HotApp”), a 99.9%-owned subsidiary of Alset International, focuses on business-to-business solutions such as enterprise messaging and workflow. Through HotApp, the Company has successfully implemented several strategic platform developments for clients, including a mobile front-end solution for network marketing, a hotel e-commerce platform for Asia and a real estate agent management platform in China. On October 25, 2018, HotApps International Pte. Ltd. (“HIP”) entered into an Equity Purchase Agreement with DSS Asia Limited (“DSS Asia”), a Hong Kong subsidiary of DSS International Inc. (“DSS International”), pursuant to which HIP agreed to sell to DSS Asia all of the issued and outstanding shares of HotApps Information Technology Co. Ltd., also known as Guangzhou HotApps Technology Ltd. (“Guangzhou HotApps”). The transaction closed on January 14, 2019. Chan Heng Fai is the CEO of DSS Asia and DSS International. For further details on this transaction, refer to Note 11 – Discontinued Operations and Note 8 – Related Party Transactions. Biohealth The Company’s biohealth segment is comprised of Global BioMedical Pte. Ltd. and Health Wealth Happiness Pte. Ltd. and is committed to both funding research and developing and selling products that promote a healthy lifestyle. Impact BioMedical Inc., a subsidiary of Global BioMedical Pte. Ltd, is focusing on research in three main areas: (i) development of a universal therapeutic drug platform; (ii) a new sugar substitute; and (iii) a multi-use fragrance. Global BioLife established a joint venture, Sweet Sense, Inc., with Quality Ingredients, LLC for the development, manufacture, and global distribution of the new sugar substitute. On November 8, 2019, Impact BioMedical Inc. purchased 50% of Sweet Sense Inc. from Quality Ingredients, LLC for $91,000. Sweet Sense Inc. is an 81.8% owned subsidiary of Impact BioMedical Inc. On April 27, 2020, Global BioMedical Pte Ltd (“GBM”), a wholly owned subsidiary of Alset International, entered into a share exchange agreement with DSS BioHealth Security, Inc. (“DBHS”), a wholly owned subsidiary of Document Securities Systems Inc. (“DSS”), pursuant to which, DBHS will acquire all of the outstanding capital stock of Impact BioMedical Inc., through a share exchange. The transaction was closed on August 21, 2020 and Impact BioMedical became a direct wholly owned subsidiary of DBHS. For further details on this transaction, refer to Note 11, Discontinued Operations. Currently, revenue from our biohealth segment comes from iGalen Inc. (f.k.a. iGalen USA, LLC), which is 100% owned by iGalen International Inc., Alset International’s 53%-owned subsidiary. During the nine months ended September 30, 2020 and 2019, the revenue from iGalen Inc. was $30,533 and $1,406,951, respectively. During the three months ended September 30, 2020 and 2019, the revenue from iGalen Inc. were $1,331 and $360,351, respectively. As of September 30, 2020 and December 31, 2019, the deferred revenue was $0 and $37,120, respectively. All deferred revenue came from unrecognized membership fee. The Company recognizes revenue associated with the membership over the one-year period of the membership. Before the membership fee is recognized as revenue, it is recorded as deferred revenue. In October 2019, the Company expanded its biohealth segment to Korean market through one of the subsidiaries of Health Wealth Happiness Pte. Ltd., HWH World Inc (“HWH World”). HWH World, similarly to iGalen Inc., operates based on a direct sale model of health supplements. HWH World is at the beginning stage of operations recognized only approximately $600 in revenue in three and nine months ended September 30, 2020. No revenue was recognized in three and nine months ended on September 30, 2019. As of September 30, 2020 and December 31, 2019, the deferred revenue was $3,046,687 and $221,474, respectively. All deferred revenue came from unrecognized membership fee. Other Business Activities In addition to the segments identified above, the Company provides corporate strategy and business development services, asset management services, corporate restructuring and leveraged buy-out expertise. These service offerings build relationships with promising companies for potential future collaboration and expansion. We believe that our other business activities complement our three principal businesses. The Company’s other business activities segment is primarily comprised of Alset International, SeD Capital Pte. Ltd., BMI Capital Partners International Limited and Singapore Construction & Development Pte. Ltd. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation and Principles of Consolidation The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and following the requirements of the Securities and Exchange Commission ("SEC") for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These interim financial statements have been prepared on the same basis as the Company's annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair statement of the Company's financial information. These interim results are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or any other interim period or for any other future year. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and the notes thereto for the year ended December 31, 2019, in Form S-1 as filed with the SEC on November 11, 2020. The balance sheet as of December 31, 2019 has been derived from audited financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements. The condensed consolidated financial statements include all accounts of the Company and its majority owned and controlled subsidiaries. The Company consolidates entities in which it owns more than 50% of the voting common stock and controls operations. All intercompany transactions and balances among consolidated subsidiaries have been eliminated. The Company's condensed consolidated financial statements include the financial position, results of operations and cash flows of the following entities as of September 30, 2020 and December 31, 2019, and for the three and nine month periods ended September 30, 2020 and 2019 as follows: Attributable interest as of, Name of subsidiary consolidated under HFE State or other jurisdiction of incorporation or organization September 30, 2020 December 31, 2019 % % Hengfai International Pte. Ltd Singapore 100 100 Hengfai Business Development Pte. Ltd Singapore 100 100 Heng Fai Enterprises Pte. Ltd. Singapore 100 100 Global eHealth Limited Hong Kong 100 100 Alset International Inc. (f.k.a. Singapore eDevelopment Limited) Singapore 51.04 65.4 Singapore Construction & Development Pte. Ltd. Singapore 51.04 65.4 Art eStudio Pte. Ltd. Singapore 26.03 * 33.36 * Singapore Construction Pte. Ltd. Singapore 51.04 65.4 Global BioMedical Pte. Ltd. Singapore 51.04 65.4 Alset Innovation Pte. Ltd. (f.k.a. SeD Investment Pte. Ltd.) Singapore 51.04 65.4 Health Wealth Happiness Pte. Ltd. Singapore 51.04 65.4 iGalen International Inc. United States of America 27.05 * 34.38 * iGalen Inc. (f.k.a iGalen USA LLC) United States of America 27.05 * 34.38 * SeD Capital Pte. Ltd. Singapore 51.04 65.4 LiquidValue Asset Management Pte. Ltd. (f.k.a. HengFai Asset Management Pte. Ltd.) Singapore 41.85 * 53.6 SeD Home Limited Hong Kong 51.04 65.4 SeD Reits Management Pte. Ltd. Singapore 51.04 65.4 Global TechFund of Fund Pte. Ltd. Singapore 51.04 65.4 Singapore eChainLogistic Pte. Ltd. Singapore 51.04 65.4 BMI Capital Partners International Limited. Hong Kong 51.04 65.4 SeD Perth Pty. Ltd. Australia 51.04 65.4 SeD Intelligent Home Inc. (f.k.a SeD Home International, Inc.) United States of America 51.04 65.4 LiquidValue Development Inc. (f.k.a. SeD Intelligent Home Inc.) United States of America 51.03 65.39 Alset iHome Inc. (f.k.a. SeD Home & REITs Inc. and SeD Home, Inc.) United States of America 51.03 65.39 SeD USA, LLC United States of America 51.03 65.39 150 Black Oak GP, Inc. United States of America 51.03 65.39 SeD Development USA Inc. United States of America 51.03 65.39 150 CCM Black Oak, Ltd. United States of America 51.03 65.39 SeD Texas Home, LLC United States of America 51.03 65.39 SeD Ballenger, LLC United States of America 51.03 65.39 SeD Maryland Development, LLC United States of America 42.64 * 54.63 SeD Development Management, LLC United States of America 43.38 * 55.58 SeD Builder, LLC United States of America 51.03 65.39 HotApp Blockchain Inc. United States of America 50.95 65.39 HotApps International Pte. Ltd. Singapore 50.95 65.39 HotApp International Limited Hong Kong 50.95 65.39 HWH International, Inc. United States of America 51.04 65.4 Health Wealth & Happiness Inc. United States of America 51.04 65.4 HWH Multi-Strategy Investment, Inc. United States of America 51.04 65.4 SeDHome Rental Inc United States of America 51.03 65.39 SeD REIT Inc. United States of America 51.03 65.39 Crypto Exchange Inc United States of America 50.95 65.39 HWH World Inc. United States of America 50.95 65.39 HWH World Pte. Ltd. Singapore 50.95 65.39 UBeauty Limited Hong Kong 51.04 65.4 WeBeauty Korea Inc Korea 51.04 65.4 HWH World Limited Hong Kong 51.04 65.4 HWH World Inc. Korea 51.04 65.4 Alset BioHealth Pte. Ltd. Singapore 51.04 - Alset Energy Pte. Ltd. Singapore 51.04 - Alset Payment Inc. United States of America 51.04 - Alset World Pte. Ltd. Singapore 51.04 - BioHealth Water Inc. United States of America 51.04 - Impact BioHealth Pte. Ltd. Singapore 51.04 - American Home REIT Inc. United States of America 41.85 * - Alset Solar Inc. United States of America 40.83 * - *Although the Company indirectly holds percentage of shares of these entities less than 50%, the subsidiaries of the Company directly hold more than 50% of shares of these entities, and therefore, they are still consolidated into the Company. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management include, but are not limited to, allowance for doubtful accounts, valuation of real estate assets, allocation of development costs and capitalized interest to sold lots, fair value of the investments, the valuation allowance of deferred taxes, and contingencies. Actual results could differ from those estimates. In our property development business, land acquisition costs are allocated to each lot based on the area method, the size of the lot compared to the total size of all lots in the project. Development costs and capitalized interest are allocated to lots sold based on the total expected development and interest costs of the completed project and allocating a percentage of those costs based on the selling price of the sold lot compared to the expected sales values of all lots in the project. If allocation of development costs and capitalized interest based on the projection and relative expected sales value is impracticable, those costs could also be allocated based on area method, the size of the lot compared to the total size of all lots in the project. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less at the date of acquisition to be cash equivalents. Cash and cash equivalents include cash on hand and at the bank and short-term deposits with financial institutions that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in values. There were no cash equivalents as of September 30, 2020 and December 31, 2019. Restricted Cash As a condition to the loan agreement with the Manufacturers and Traders Trust Company (“M&T Bank”), the Company is required to maintain a minimum of $2,600,000 in an interest-bearing account maintained by the lender as additional security for the loans. The fund is required to remain as collateral for the loan until the loan is paid off in full and the loan agreement terminated. The Company also has an escrow account with M&T Bank to deposit a portion of cash proceeds from lot sales. The fund in the escrow account is specifically used for the payment of the loan from M&T Bank. The fund is required to remain in the escrow account for the loan payment until the loan agreement terminates. As of September 30, 2020 and December 31, 2019, the total balance of these two accounts was $4,106,497 and $4,229,149, respectively. As a condition to the loan agreement with National Australian Bank Limited in conjunction with the Perth project, an Australian real estate development project, the Company is required to maintain Australian Dollar 50,000, in a non-interest-bearing account. As of September 30, 2020 and December 31, 2019, the account balance was $35,710 and $35,068, respectively. These funds will remain as collateral for the loans until paid in full. On July 20, 2018, 150 CCM Black Oak Ltd received $4,592,079 in district reimbursement payments for previous construction costs incurred in land development. Of this amount, $1,650,000 will remain on deposit in the District’s Capital Projects Fund for the benefit of 150 CCM Black Oak Ltd and will be released upon receipt of the evidence of: (a) the execution of a purchase agreement between 150 CCM Black Oak Ltd and a home builder with respect to the Black Oak development and (b) the completion, finishing and readying for home construction of at least 105 unfinished lots in the Black Oak development. After entering the purchase agreement with Houston LD, LLC, the above requirements were met. The amount of the deposit will be released to the Company by presenting the invoices paid for land development. After releasing funds to the Company, the amount on deposit was $0 and $90,394 on September 30, 2020 and December 31, 2019, respectively. As a condition to use the credit card services for the Company’s bio product direct sale business, provided by Global Payroll Gateway, Ltd. (“GPG”), a financial service company, the Company is required to deposit 10% revenue from the direct sales to a non-interest-bearing GPG reserve account with a maximum amount of $200,000. The Company is allowed to temporarily use the money in this deposit account upon request and pay back on a short-term basis. As of both, September 30, 2020 and December 31, 2019, the balance in the reserve account was $93,067. The fund will not be fully refunded to the Company until the service agreement with GPG terminates. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at amounts due from buyers, contractors, and all third parties, net of an allowance for doubtful accounts. The Company monitors its accounts receivable balances on a monthly basis to ensure that they are collectible. On a quarterly basis, the Company uses its historical experience to estimate its allowance for doubtful accounts receivable. The Company’s allowance for doubtful accounts represents an estimate of the losses expected to be incurred based on specifically identified accounts as well as nonspecific amount, when determined appropriate. Generally, the amount of the allowance is primarily decided by division management’s historical experience, the delinquency trends, the resolution rates, the aging of receivables, the credit quality indicators and financial health of specific customers. As of September 30, 2020 and December 31, 2019, the allowance was $0. Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method and includes all costs in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale. As of September 30, 2020 and December 31, 2019, inventory consisted of finished goods from iGalen Inc and HWH World Inc. The Company continuously evaluates the need for reserve for obsolescence and possible price concessions required to write-down inventories to net realizable value. Investment Securities Investment Securities at Fair Value The Company holds investments in equity securities with readily determinable fair values, equity investments without readily determinable fair values, investments accounted for under the equity method, and investments at cost. Prior to the adoption of Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities The Company accounts for certain of its investments in equity securities in accordance with ASU 2016-01 Financial Instruments—Overall (Subtopic 825- 10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”) The Company has elected the fair value option for the equity securities noted below that would otherwise be accounted for under the equity method of accounting. Amarantus BioScience Holdings (“AMBS”), Holista CollTech Limited (“Holista”), Document Securities Systems Inc. (“DSS”), Alset International and American Premium Water Corp (“APW”) are publicly traded companies and fair value is determined by quoted stock prices. The Company has significant influence but does not have a controlling interest in these investments, and therefore, the Company’s investment could be accounted for under the equity method of accounting or elect fair value accounting. ● The Company has significant influence over DSS. As of September 30, 2020, the Company owns 9.7% of the common stock of DSS and 46,868 shares of preferred stock, which could covert to 7,232,716 common shares, subject to a 19.9% beneficial ownership conversion limitation (a so-called “blocker”) based on the total issued outstanding shares of common stock of DSS beneficially owned by Global BioMedical Pte Ltd (“GBM”), one of our subsidiaries. Our CEO is the owner of approximately 14.5% of the outstanding shares of DSS (not including any common or preferred shares we hold) and is a member of the Board of Directors of DSS. Chan Tung Moe, the son of Chan Heng Fai, is also a director of DSS. ● The Company has significant influence over AMBS as the Company is the beneficial owner of approximately 19.5% of the common shares of AMBS. ● The Company has significant influence over Holista as the Company and its CEO are the beneficial owner of approximately 16.8% of the outstanding shares of Holista, and our CEO holds a position on Holista's Board of Directors. ● The Company has significant influence over APW as the Company is the beneficial owner of approximately 9.99% of the common shares of APW. ● The Company had significant influence over Alset International during the period of deconsolidation as the company’s beneficial ownership ranged between 49.62% and 49.11% in that period and our CEO is the CEO of Alset international. Chan Heng Fai is a director of both companies. The Company accounts for certain of its investments in real estate funds without readily determinable fair values in accordance with ASU No. 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) The Company invested $50,000 in a convertible promissory note of Sharing Services, Inc. (“Sharing Services Convertible Note”), a company quoted on the US OTC market. The value of the convertible note was estimated by management using a Black-Scholes valuation model. The fair value of the note was $77,477 and $26,209 on September 30, 2020 and December 31, 2019, respectively. On March 2, 2020, the Company received warrants to purchase shares of American Medical REIT Inc. (“AMRE”), a related party private startup company, in conjunction with the Company lending a $200,000 promissory note. For further details on this transaction, refer to Note 8 Related Party Transactions, Note Receivable from a Related Party Company. The Company holds a stock option to purchase 250,000 shares of Vivacitas common stock at $1 per share at any time prior to the date of public offering. As of September 30, 2020 and December 31, 2019, both AMRE and Vivacitas were private companies. Based on management’s analysis, the fair value of the warrants and the stock option was $0 as of September 30, 2020 and December 31, 2019. On July 17, 2020, the Company purchased 122,039,000 shares, approximately 9.99% ownership, and 122,039,000 warrants with an exercise price of $0.0001 per share, from APW, for an aggregated purchase price of $122,039. Based on the management’s analysis, the fair value of the warrants from APW was $0 as of September 30, 2020. On April 27, 2020, Global BioMedical Pte Ltd (“GBM”), one of our subsidiaries, entered into a share exchange agreement with DSS BioHealth Security, Inc. (“DBHS”), a wholly owned subsidiary of Document Securities Systems Inc. (“DSS”), a related party of the Company, pursuant to which, DBHS agreed to acquire all of the outstanding capital stock of Impact BioMedical Inc., a wholly owned subsidiary of GBM, through a share exchange. On August 21, 2020, the transaction closed and Impact BioMedical Inc became a direct wholly owned subsidiary of DBHS. GBM received 483,334 shares of DSS common stock and 46,868 shares of DSS preferred stock, which preferred shares could be converted to 7,232,716 common shares. The Company has elected the fair value option for the DSS common stock that would otherwise be accounted for under the equity method of accounting. We value DSS preferred stock under level 3 category through a Monte Carlo simulation model. As of September 30, 2020, the fair market value of the DSS preferred stock was $54,864,632. For further details on this transaction, refer to Note 8 – Related Party Transactions, Note 11 – Discontinued Operations and Note 12 – Investments Measured at Fair Value. The changes in the fair values of the investment were recorded directly to accumulated other comprehensive income (loss). Due to the inherent uncertainty of these estimates, these values may differ materially from the values that would have been used had a ready market for these investments existed. Investment Securities at Cost The Company has an equity holding in Vivacitas Oncology Inc. (“Vivacitas”), a private company that is currently not listed on an exchange. Vivacitas was acquired after the adoption of ASU 2016-01. The Company applied ASC 321, Investments – Equity Securities, and elected the measurement alternative for equity investments that do not have readily determinable fair values and do not qualify for the practical expedient in ASC 820 to estimate fair value using the NAV per share. Under the alternative, we measure Vivacitas at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. On September 8, 2020, the Company acquired 1,666 shares, approximately 1.45% ownership, from Nervotec Pte Ltd (“Nervotec”), a private company, at the purchase price of $36,628. The Company applied ASC 321 and measured Nervotec at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. There has been no indication of impairment or changes in observable prices via transactions of similar securities and investments are still carried at cost. Investment Securities under Equity Method Accounting American Medical REIT Inc. LiquidValue Asset Management Pte. Ltd. (“LiquidValue”), a subsidiary of the Company owns 36.1% of American Medical REIT Inc. (“AMRE”), a startup REIT company concentrating on medical real estate. AMRE acquires state-of-the-art, purpose-built healthcare facilities and leases them to leading clinical operators with dominant market share under secure triple net leases. AMRE targets hospitals (both Critical Access and Specialty Surgical), Physician Group Practices, Ambulatory Surgical Centers, and other licensed medical treatment facilities. Chan Heng Fai, our CEO, is the executive chairman and director of AMRE. LiquidValue did not invest equity but provided a loan to AMRE (For further details on this transaction, refer to Note 8, Related Party Transactions). On balance sheet, the prorate loss from AMRE was recorded as a liability, accumulated losses on equity method investment. During three months ended September 30, 2020 and 2019, the investment losses from AMRE were $52,392 and $0, respectively. During nine months ended September 30, 2020 and 2019, the investment losses from AMRE were $193,132 and $0, respectively. As of September 30, 2020, and December 31, 2019, the accumulated losses on equity method investment were $231,418 and $0, respectively. Sweet Sense, Inc. BioLife Sugar, Inc. (“BioLife’), a subsidiary consolidated under Alset International, entered into a joint venture agreement on April 25, 2018 with Quality Ingredients, LLC (“QI”). The agreement created an entity called Sweet Sense, Inc. (“Sweet Sense”) which is 50% owned by BioLife and 50% owned by QI. Management believes its 50% investment represents significant influence over Sweet Sense and accounts for the investment under the equity method of accounting. On November 8, 2019, Impact BioMedical Inc., a subsidiary of the Company, purchased 50% of Sweet Sense from QI for $91,000 and recorded a loss from acquisition $90,001. As of November 8, 2019, the total investment in joint venture was equal to $91,000 and the proportionate losses totaled $90,001. The transaction was not in the scope of ASC 805 Business Combinations since the acquisition was accounted for an asset purchase instead of a business combination. As an asset acquisition, the Company recorded the transaction at cost and applied ASC 730 to expense in-process research and development cost, the major cost of Sweet Sense. Consequently, Sweet Sense was an 81.8% owned subsidiary of Impact BioMedical Inc. and therefore, was consolidated into the Company’s condensed consolidated financial statements as of September 30, 2020 and December 31, 2019. During the three and nine month ended September 30, 2019, the investment losses from Sweet Sense were $894 and $30,166, respectively. As a subsidiary of Impact BioMedical Inc., Sweet Sense was in the discontinued operations of Impact BioMedical Inc. For further details on this transaction, refer to Note 11 Discontinued Operations. Veganburg International Pte. Ltd. On February 5, 2020, SeD Capital Pte Ltd, a subsidiary of the Company, invested $2,176 in VeganBurg International Pte. Ltd. (“VeganBurg International”), a related party company, in exchange for 30% ownership of such company. Chan Heng Fai, our founder, Chairman and Chief Executive Officer, is a member of the Board of Directors of VeganBurg International and has significant influence on such company. VeganBurg International is focused on promoting environmentally friendly, healthy plant-based burgers in the Asian market. VeganBurg International has no operations till September 30, 2020 and $2,194 was recorded as investment in Securities at equity method on balance sheet on September 30, 2020. Real Estate Assets Real estate assets are recorded at cost, except when real estate assets are acquired that meet the definition of a business combination in accordance with Financial Accounting Standards Board (“FASB”) ASC 805 - “Business Combinations”, The Company capitalized interest and finance expenses from third-party borrowings of $0 and $43,020 for the three months ended September 30, 2020 and 2019, respectively. The Company capitalized construction costs of $2,763,068 and $1,464,998 for the three months ended September 30, 2020 and 2019, respectively. The Company capitalized interest and finance expenses from third-party borrowings of $0 and $514,985 for the nine months ended September 30, 2020 and 2019, respectively. The Company capitalized construction costs of $8,898,329 and $5,023,396 for the nine months ended September 30, 2020 and 2019, respectively. The Company’s policy is to obtain an independent third-party valuation for each major project in the United States as part of our assessment of identifying potential triggering events for impairment. Management may use the market comparison method to value other relatively small projects, such as the project in Perth, Australia. In addition to the annual assessment of potential triggering events in accordance with ASC 360 – Property Plant and Equipment On October 12, 2018, 150 CCM Black Oak, Ltd. entered into an Amended and Restated Purchase and Sale Agreement for 124 lots. Pursuant to the Amended and Restated Purchase and Sale Agreement, the purchase price remained $6,175,000, 150 CCM Black Oak, Ltd. was required to meet certain closing conditions and the timing for the closing was extended. On January 18, 2019, the sale of 124 lots at the Company’s Black Oak project in Magnolia, Texas was completed. After allocating costs of revenue to this sale, the Company incurred a loss of approximately $1.5 million from this sale and recognized a real estate impairment of approximately $1.5 million for the year ended December 31, 2018. On June 30, 2019, the Company recorded approximately $3.9 million of impairment on the Black Oak project based on discounted estimated future cash flows after updating the projection of market value of the project. On December 31, 2019, the Company recorded approximately $1.3 million of additional impairment on the Black Oak project based on discounted estimated future cash flows after updating the projected cost of the project. Properties under development Properties under development are properties being constructed for sale in the ordinary course of business, rather than to be held for the Company’s own use, rental or capital appreciation. Equipment Property and equipment are recorded at cost, less depreciation. Repairs and maintenance are expensed as incurred. Expenditures incurred as a consequence of acquiring or using the asset, or that increase the value or productive capacity of assets are capitalized (such as removal, and restoration costs). When property and equipment is retired, sold, or otherwise disposed of, the asset’s carrying amount and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. Depreciation is computed by the straight-line method (after considering their respective estimated residual values) over the estimated useful lives of the respective assets as follows: Office and computer equipment 3 - 5 years Furniture and fixtures 3 - 5 years Vehicles 10 years Leasehold Improvements Remaining life of the lease The Company reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends, and prospects, as well as the effects of obsolescence, demand, competition, and other economic factors. Revenue Recognition and Cost of Sales ASC 606 - Revenue from Contracts with Customers In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods or services. The provisions of ASC 606 include a five-step process by which the determination of revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which the Company expects to be entitled in exchange for those goods or services. ASC 606 requires the Company to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, performance obligations are satisfied. The following represents the Company’s revenue recognition policies by Segments: Property Development Property Sales The Company's main business is land development. The Company purchases land and develops it for building into residential communities. The developed lots are sold to builders (customers) for the construction of new homes. The builders enter a sales contract with the Company before they take the lots. The prices and timeline are determined and agreed upon in the contract. The builders do the inspections to make sure all conditions and requirements in contracts are met before purchasing the lots. A detailed breakdown of the five-step process for the revenue recognition of the Ballenger and Black Oak projects, which represented approximately 99% and 94%, respectively, of the Company’s revenue in the nine months ended on September 30, 2020 and 2019, is as follows: ● Identify the contract with a customer. The Company has signed agreements with the builders for developing the raw land to ready to build lots. The contract has agreed upon prices, timelines, and specifications for what is to be provided. ● Identify the performance obligations in the contract. Performance obligations of the Company include delivering developed lots to the customer, which are required to meet certain specifications that are outlined in the contract. The customer inspects all lots prior to accepting title to ensure all specifications are met. ● Determine the transaction price. The transaction price per lot is fixed and specified in the contract. Any subsequent change orders or price changes are required to be approved by both parties. ● Allocate the transaction price to performance obligations in the contract. Each lot or a group of lots is considered to be a separate performance obligation, for which the specified price in the contract is allocated to. ● Recognize revenue when (or as) the entity satisfies a performance obligation. The builders do the inspections to make sure all conditions/requirements are met before taking title of lots. The Company recognizes revenue at a point in time when title is transferred. The Company does not have further performance obligations or continuing involvement once title is transferred. Sale of the Front Foot Benefit Assessments We have established a front foot benefit (“FFB”) assessment on all of the NVR lots. This is a 30-year annual assessment allowed in Frederick County which requires homeowners to reimburse the developer for the costs of installing public water and sewer to the lots. These assessments become effective as homes are settled, at which time we can sell the collection rights to investors who will pay an upfront lump sum, enabling us to more quickly realize the revenue. The selling prices range from $3,000 to $4,500 per home depending the type of the home. Our total revenue from the front foot benefit assessment is approximately $1 million. To recognize revenue of FFB assessment, both our and NVR’s performance obligation have to be satisfied. Our performance obligation is completed once we complete the construction of water and sewer facility and close the lot sales with NVR, which inspects these water and sewer facility prior to close lot sales to ensure all specifications are met. NVR’s performance obligation is to sell homes they build to homeowners. Our FFB revenue is recognized on quarterly basis after NVR closes sales of homes to homeowners. The agreement with these FFB investors is not subject to amendment by regulatory agencies and thus our revenue from FFB assessment is not either. During the nine months ended on September 30, 2020 and 2019, we recognized revenue $169,349 and $365,645 from FFB assessment, respectively. During the three months ended on September 30, 2020 and 2019, we recognized revenue $54,147 and $129,031 from FFB assessment, respectively. Cost of Sales Land acquisition costs are allocated to each lot based on the area method, the size of the lot comparing to the total size of all lots in the project. Development costs and capitalized interest are allocated to lots sold based on the total |
SEGMENTS
SEGMENTS | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
SEGMENTS | Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision–making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision-maker is the CEO. The Company operates in and reports four business segments: property development, digital transformation technology, biohealth, and other business activities. The Company’s reportable segments are determined based on the services they perform and the products they sell, not on the geographic area in which they operate. The Company’s chief operating decision maker evaluates segment performance based on segment revenue. Costs excluded from segment income (loss) before taxes and reported as “Other” consist of corporate general and administrative activities which are not allocable to the four reportable segments. The following table summarizes the Company’s segment information for the following balance sheet dates presented, and for the nine months ended September 30, 2020 and 2019: Property Development Digital Transformation Technology Biohealth Business Other Discontinued Operations Total Nine Months Ended September 30, 2020 Revenue $ 7,148,786 $ - $ 31,133 $ - $ - $ 7,179,919 Cost of Sales (5,603,164 ) - (6,139 ) - - (5,609,303 ) Gross Margin 1,545,622 - 24,994 - - 1,570,616 Operating Expenses (634,254 ) (87,972 ) (388,083 ) (3,086,630 ) (416,950 ) (4,613,889 ) Operating Income (Loss) 911,368 (87,972 ) (363,089 ) (3,086,630 ) (416,968 ) (3,043,273 ) Other Income (Expense) (2,646 ) 115 (10,211,916 ) 11,123 (488 ) (10,203,812 ) Net Income (Loss) Before Income Tax 908,722 (87,857 ) (10,575,005 ) (3,075,507 ) (417,438 ) (13,247,085 ) Property Development Digital Transformation Technology Biohealth Business Other Discontinued Operations Total Nine Months ended September 30, 2019 Revenue $ 21,509,197 $ - $ 1,406,951 $ 28,350 $ - $ 22,944,498 Cost of Sales (18,819,865 ) - (357,935 ) - - (19,177,800 ) Gross Margin 2,689,332 - 1,049,016 28,350 - 3,766,698 Operating Expenses (4,598,112 ) (193,959 ) (1,780,026 ) (1,697,423 ) (358,534 ) (8,628,054 ) Operating Income (Loss) (1,908,780 ) (193,959 ) (731,010 ) (1,669,073 ) (358,534 ) (4,861,356 ) Other Income (Expense) 34,433 296,726 31,151 (4,874 ) (30,397 ) 327,039 Net Income (Loss) Before Income Tax (1,874,347 ) 102,767 (699,859 ) (1,673,947 ) (388,931 ) (4,534,317 ) September 30, 2020 Cash and Restricted Cash $ 5,079,010 $ 62,422 $ 1,386,513 $ 6,461,531 $ - $ 12,989,476 Total Assets 30,540,913 162,524 61,572,898 9,197,695 - 101,474,030 December 31, 2019 Cash and Restricted Cash $ 5,439,318 $ 55,752 $ 388,670 $ 1,338,525 $ 108,731 $ 7,330,996 Total Assets 29,857,615 155,854 948,931 4,770,949 139,431 35,872,780 |
REAL ESTATE ASSETS
REAL ESTATE ASSETS | 9 Months Ended |
Sep. 30, 2020 | |
Other Real Estate, Foreclosed Assets, and Repossessed Assets [Abstract] | |
REAL ESTATE ASSETS | As of September 30, 2020 and December 31, 2019, real estate assets consisted of the following: September 30, 2020 December 31, 2019 Construction in Progress $ 12,298,889 $ 9,601,364 Land Held for Development 12,691,477 14,283,340 Total Real Estate Assets $ 24,990,366 $ 23,884,704 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | As of September 30, 2020 and December 31, 2019, property and equipment consisted of the following: September 30, 2020 December 31, 2019 Computer Equipment $ 181,559 $ 175,992 Furniture and Fixtures 62,328 52,798 Vehicles 90,929 90,929 Subtotal 334,816 319,719 Accumulated Depreciation (257,153 ) (239,434 ) Total $ 77,663 $ 80,285 The Company recorded depreciation expense of $17,719 and $20,697 during the nine months ended September 30, 2020 and 2019, respectively. The Company recorded depreciation expense of $4,657 and $7,080 during the three months ended September 30, 2020 and 2019, respectively. |
BUILDER DEPOSITS
BUILDER DEPOSITS | 9 Months Ended |
Sep. 30, 2020 | |
Builder Deposits | |
BUILDER DEPOSITS | In November 2015, SeD Maryland Development, LLC (“SeD Maryland”) entered into lot purchase agreements with NVR, Inc. (“NVR”) relating to the sale of single-family home and townhome lots to NVR in the Ballenger Run Project. The purchase agreements were amended three times thereafter. Based on the agreements, NVR is entitled to purchase 479 lots for a price of approximately $64,000,000, which escalates 3% annually after June 1, 2018. As part of the agreements, NVR was required to give a deposit in the amount of $5,600,000. Upon the sale of lots to NVR, 9.9% of the purchase price is taken as payback of the deposit. A violation of the agreements by NVR would cause NVR to forfeit the deposit. On January 3, 2019 and April 28, 2020, NVR gave SeD Maryland two more deposits in the amounts of $100,000 and $220,000, respectively, based on the 3rd Amendment to the Lot Purchase Agreement. On September 30, 2020 and December 31, 2019, there were $1,808,747 and $2,445,269 held on deposit, respectively. |
NOTES PAYABLE
NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2020 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | As of September 30, 2020 and December 31, 2019, notes payable consisted of the following: September 30, 2020 December 31, 2019 Union Bank Loan - - M&T Bank Loan, Net of Debt Discount 619,329 - PPP Loan 68,502 - Australia Loan 159,966 157,105 Total notes payable $ 847,797 $ 157,105 Union Bank Loan On November 23, 2015, SeD Maryland entered into a Revolving Credit Note with the Union Bank in the original principal amount of $8,000,000 (the “Revolving Credit Note”). During the term of the loan, cumulative loan advances may not exceed $26,000,000. The line of credit bears interest at LIBOR plus 3.8% with a floor rate of 4.5%. The interest rate at December 31, 2018 was 6.125%. Beginning December 1, 2015, interest only payments were due on the outstanding principal balance. The entire unpaid principal and interest sum was due and payable on November 22, 2018, with the option of one twelve-month extension period. The loan is secured by a deed of trust on the property, $2,600,000 of collateral cash, and a Limited Guaranty Agreement with SeD Ballenger. The Company also had an $800,000 letter of credit from the Union Bank. The letter of credit was due on November 22, 2018 and bore interest at 15%. In September 2017, SeD Maryland Development LLC and the Union Bank modified the Revolving Credit Note, which increased the original principal amount from $8,000,000 to $11,000,000 and extended the maturity date of the loan and letter of credit to December 31, 2019. Accordingly, this change in terms of the Union Bank Loan was accounted for as a modification in accordance with ASC 470 – Debt On April 17, 2019, the Union Bank Loan was paid off and SeD Maryland Development LLC and Union Bank terminated the Revolving Credit Note. After termination, the collateral cash was released and all L/Cs were transferred to the M&T Bank L/C Facility. M&T Bank Loan On April 17, 2019, SeD Maryland Development LLC entered into a Development Loan Agreement with Manufacturers and Traders Trust Company (“M&T Bank”) in the principal amount not to exceed at any one time outstanding the sum of $8,000,000, with a cumulative loan advance amount of $18,500,000. The line of credit bears interest rate on LIBOR plus 375 basis points. SeD Maryland Development LLC was also provided with a Letter of Credit (“L/C”) Facility in an aggregate amount of up to $900,000. The L/C commission will be 1.5% per annum on the face amount of the L/C. Other standard lender fees will apply in the event L/C is drawn down. The loan is a revolving line of credit. The L/C Facility is not a revolving loan, and amounts advanced and repaid may not be re-borrowed. Repayment of the Loan Agreement is secured by $2,600,000 collateral fund and a Deed of Trust issued to the Lender on the property owned by SeD Maryland. As of September 30, 2020, the outstanding balance of the revolving loan was $0. As part of the transaction, the Company incurred loan origination fees and closing fees in the amount of $381,823 and capitalized it into construction in process. On June 18, 2020, Alset iHome Inc. (“Alset iHome”), a wholly-owned subsidiary of LiquidValue Development Inc., entered into a Loan Agreement with Manufacturers and Traders Trust Company, (the “Lender”). Pursuant to the Loan Agreement, the Lender provided a non-revolving loan to Alset iHome in an aggregate amount of up to $2,990,000 (the “Loan”). The line of credit bears interest rate on LIBOR plus 375 basis points. Repayment of the Loan is secured by a Deed of Trust issued to the Lender on the property owned by certain subsidiaries of Alset iHome. The maturity date of this Loan is July 1, 2022. LiquidValue Development Inc. and one of its subsidiaries are guarantors of this Loan. As of September 30, 2020, the loan balance was $670,281. As part of the transaction, the Company incurred loan origination fees and closing fees in the amount of $61,679 which was recorded as loan discount and is amortized over the term of the loan. As of September 30, 2020 and December 31, 2019, the balance of unamortized loan discount was $50,952 and $0, respectively. Paycheck Protection Program Loan On April 6, 2020, the Company entered into a term note with M&T Bank with a principal amount of $68,502 pursuant to the Paycheck Protection Program (“PPP Term Note”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The PPP Loan is evidenced by a promissory note. The PPP Term Note bears interest at a fixed annual rate of 1.00%, with the first ten months of principal and interest deferred. The Company applied for forgiveness of the PPP loan. Australia Loan On January 7, 2017, SeD Perth Pty Ltd (“SeD Perth”) entered into a loan agreement with National Australian Bank Limited (the “Australia Loan”) for the purpose of funding land development. The loan facility provides SeD Perth with access to funding of up to approximately $460,000 and matures on December 31, 2018. The Australia Loan is secured by both the land under development and a pledged deposit of $35,276. This loan is denominated in AUD. Personal guarantees amounting to approximately $500,000 have been provided by our CEO, Chan Heng Fai and by Rajen Manicka, the CEO of Holista CollTech and Co-founder of iGalen Inc. The interest rate on the Australia Loan is based on the weighted average interest rates applicable to each of the business markets facility components as defined within the loan agreement, ranging from 4.36% to 5.57% per annum for the nine months ended September 30, 2020 and from 5.97% to 6.64% per annum for the nine months ended September 30, 2019. On September 7, 2017 the Australia Loan was amended to reduce the maximum borrowing capacity to approximately $179,000. During 2020, the terms of the Australia Loan were amended to reflect an extended maturity date of December 31, 2020. This was accounted for as a debt modification. The Company did not pay fees to the National Australian Bank Limited for the modification of the loan agreement. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Personal Guarantees by Directors As of both September 30, 2020 and December 31, 2019, a director of the Company had provided personal guarantees amounting to approximately $5,500,000 to secure external loans from financial institutions for HFE and the consolidated entities. Sale of HotApp Blockchain to DSS Asia On October 25, 2018, HIP, a wholly-owned subsidiary of HotApp Blockchain, Inc., entered into an equity purchase agreement (the “HotApps Purchase Agreement”) with DSS Asia, a Hong Kong subsidiary of DSS International, pursuant to which HIP agreed to sell to DSS Asia all of the issued and outstanding shares of HotApps Information Technology Co. Ltd., also known as Guangzhou HotApps, a wholly-owned subsidiary of HIP. Guangzhou HotApps is primarily engaged in engineering work for software development, as well as, a number of outsourcing projects related to real estate and lighting. Chan Heng Fai is the CEO of DSS Asia and DSS International. For further details on this transaction, refer to Note 11 – Discontinued Operations. Sale of 18% of LiquidValue Asset Management Pte. Ltd. On May 8, 2019, SeD Capital Pte. Ltd. entered into a sale and purchase agreement to sell 522,000 ordinary shares (representing approximately 18% of the ownership) in LiquidValue Asset Management Pte. Ltd. to LiquidValue Development Pte. Ltd. (“LVD”) for a cash of $46,190. Chan Heng Fai is the owner of LVD. Sale of Impact Biomedical to DSS On April 27, 2020, Global BioMedical Pte Ltd (“GBM”), one of our subsidiaries, entered into a share exchange agreement with DSS BioHealth Security, Inc. (“DBHS”), a wholly owned subsidiary of Document Securities Systems Inc. (“DSS”), pursuant to which, DBHS agreed to acquire all of the outstanding capital stock of Impact BioMedical Inc., a wholly owned subsidiary of GBM, through a share exchange. It was agreed that the aggregate consideration to be issued to GBM for the Impact BioMedical shares would be the following: (i) 483,334 newly issued shares of DSS common stock; and (ii) 46,868 newly issued shares of a new series of DSS perpetual convertible preferred stock with a stated value of $46,868,000, or $1,000 per share. The convertible preferred stock can be convertible into shares of DSS common stock at a conversion price of $6.48 of preferred stock stated value per share of common stock, subject to a 19.9% beneficial ownership conversion limitation (a so-called “blocker”) based on the total issued outstanding shares of common stock of DSS beneficially owned by GBM. Holders of the convertible preferred stock will have no voting rights, except as required by applicable law or regulation, and no dividends will accrue or be payable on the convertible preferred stock. The holders of convertible preferred stock will be entitled to a liquidation preference of $1,000 per share, and DSS will have the right to redeem all or any portion of the then outstanding shares of convertible preferred stock, pro rata among all holders, at a redemption price per share equal to such liquidation value per share. Under ASU 2014-08, a disposal transaction meets the definition of a discontinued operation if all of the following criteria are met: 1. The disposal group constitutes a component of an entity or a group of components of an entity 2. The component of an entity (or group of components of an entity) meets the held-for-sale classification criteria, is disposed of by sale, or is disposed of other than by sale (e.g., “by abandonment, in an exchange measured based on the recorded amount of the nonmonetary asset relinquished, or in a distribution to owners in a spinoff”). 3. The disposal of a component of an entity (or group of components of an entity) “represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results”. Impact Biomedical Inc. is a group of subsidiaries of HFE and operates independently with its own financial reporting. The transaction is a disposal by sale and has a major effect on HFE’s financial results. Since it meets all above test criteria, we treated this disposal transaction as a discontinued operation in our financial statements. On August 21, 2020, the transaction closed and Impact BioMedical Inc became a direct wholly owned subsidiary of DBHS. GBM received 483,334 shares of DSS common stock and 46,868 shares of DSS preferred stock, which preferred shares could be converted to 7,232,716 common shares (however, any conversion will be subject to the blocker GBM has agreed to, as described above). After this transaction, we hold 500,001 shares of the common stock of DSS, representing 9.7% of the outstanding common stock of DSS. Our CEO, Chan Heng Fai owns an additional 12.8% of the common stock of DSS (not including any common or preferred shares we hold) and is the executive Chairman of the Board of Directors of DSS. The Company has elected the fair value option for the DSS common stock that would otherwise be accounted for under the equity method of accounting. ASC 820, Fair Value Measurement and Disclosures, defines the fair value of the financial assets. We value DSS common stock under level 1 category through quoted prices and preferred stock under level 3 category through a Monte Carlo valuation model. The quoted price of DSS common stock was $6.95 as of August 21, 2020. The total fair value of DSS common and preferred stocks GBM received as consideration for the disposal of Impact BioMedical was $67,208,173. As of August 21, 2020, the net asset value of Impact BioMedical was $57,143. The difference of $67,151,030 was recorded as additional paid in capital. We did not recognize gain or loss from this transaction as it was a related party transaction. For further details on this transaction, refer to Note 11 – Discontinued Operations. On October 16, 2020, GBM converted 4,293 shares of DSS Series A Preferred Stock having a par value of $0.02 per share in exchange for 662,500 restricted shares of DSS common stock based upon a liquidation value of $1,000 and a conversion price of $6.48 per share. Our ownership with DSS was 8.6% before conversion and 19.9% after the conversion. Notes Payable During the year ended on December 31, 2017, a director of the Company lent non-interest loans of $7,156,680, for the general operations of the Company. The loans are interest free, not tradable, unsecured, and repayable on demand. On October 15, 2018, a formal lending agreement between the Alset International and Chan Heng Fai was executed. Under the agreement, Chan Heng Fai provides a lending credit limit of approximately $10 million for Alset International with interest rate 6% per annum for the outstanding borrowed amount, which commenced retroactively from January 1, 2018. The loans are still not tradable, unsecured and repayable on demand. As of September 30, 2020 and December 31, 2019 the outstanding principal balance of the loan is $0 and $4,246,604, respectively. Interest started to accrue on January 1, 2018 at 6% per annum. During the nine months ended on September 30, 2020 and 2019, the interest expenses were $129,566 and $268,847, respectively. During the three months ended on September 30, 2020 and 2019, the interest expenses were $6,334 and $68,482, respectively. As of September 30, 2020 and December 31, 2019, the accrued interest total was $0 and $822,405, respectively. Chan Heng Fai provided interest-free due on demand advance to HFE for the general operations. On September 30, 2020 and December 31, 2019, the outstanding balance was $178,400. On August 20, 2020, the Company acquired 30,000,000 common shares from Chan Heng Fai in exchange for a two-year non-interest bearing note of $1,333,429. On September 30, 2020 the amount outstanding was $1,333,429. On May 1, 2018, Rajen Manicka, CEO and one of the directors of iGalen International Inc., which holds 100% of iGalen Inc., provided a loan of approximately $367,246 to iGalen Inc. (the “2018 Rajen Manicka Loan”). The term of 2018 Rajen Manicka Loan is ten years. The 2018 Rajen Manicka Loan has an interest rate of 4.7% per annum. On March 8, March 27 and April 23, 2019, iGalen borrowed additional monies of $150,000, $30,000 and $50,000, respectively, from Rajen Manicka, total $230,000 (the “2019 Rajen Manicka Loan”). The 2019 Rajen Manicka Loan is interest free, not tradable, unsecured, and repayable on demand. As of September 30, 2020 and December 31, 2019, the total outstanding principal balance of the loans was $531,030 and $546,397, respectively, and was included in the Notes Payable – Related Parties balance on the Company’s Condensed Consolidated Balance Sheets. During the nine months ended September 30, 2020 and 2019, the Company incurred $13,185 and $8,084 of interest expense, respectively. During the three months ended September 30, 2020 and 2019, the Company incurred $4,411 and $0 of interest expense, respectively. The Company accrued interest of $0 and $0 at September 30, 2020 and December 31, 2019, respectively. On August 13, 2019, iGalen International Inc., which holds 100% of iGalen Inc., borrowed $250,000 from Decentralized Sharing Services, Inc., a company whose sole shareholder and director is Chan Heng Fai, our CEO. The term of the loan is 12 months, with an interest rate of 10% per annum. In addition, Decentralized Sharing Services, Inc. received the right to receive 3% of any revenue received by iGalen International Inc. for 99 years. During the nine months ended September 30, 2020 the Company incurred $9,729 of interest expense and $0 from the right to receive 3% of revenue. During the three months ended September 30, 2020 the Company incurred $0 of interest expense and $0 from the right to receive 3% of revenue. During the three months ended September 30, 2019 the Company incurred $0 of interest expense and $0 from the right to receive 3% of revenue. The amount outstanding on the loan as of September 30, 2020 and December 31, 2019 was $0 and $250,000, respectively. The accrued interest was $19,318 and $9,589 as of September 30, 2020 and December 31, 2019. The principal of $250,000 was paid off in June 2020. On November 3, 2019, iGalen Inc. borrowed $160,000 from iGalen Funding Inc., a company whose directors and shareholders include two members of the Board of iGalen Inc. The term of the loan is 6 months, with an interest rate of 10% per annum. During the nine months ended September 30, 2020 the Company incurred $11,967 of interest expense. During the three months ended September 30, 2020 the Company incurred $3,989 of interest expense. The amount outstanding on the loan as of September 30, 2020 and December 31, 2019 was $160,000 and $160,000, respectively. The accrued interest was $14,510 and $2,542 as of September 30, 2020 and December 31, 2019. The expiration date was extended to November 3, 2021 after 6 months. Shares issued in exchange agreement with Chairman and CEO Hengfai International Pte. Ltd On October 1, 2018, 100% of the ownership interest in Hengfai International Pte. Ltd. (“Hengfai International”) was transferred from Chan Heng Fai, our founder, Chairman and CEO to HF Enterprises Inc. in exchange for 8.5 million shares of the Company. Hengfai International holds 100% of Hengfai Business Development Pte. Ltd. (“Hengfai Business Development”), which holds 761,185,294 shares of Alset International and 359,834,471 warrants. Both Hengfai International and Hengfai Business Development are holding companies without any business operations. Heng Fai Enterprises Pte. Ltd. On October 1, 2018, 100% of the ownership interest in Heng Fai Enterprises Pte. Ltd. (“Heng Fai Enterprises”) was transferred from Chan Heng Fai, our founder, Chairman and CEO to HF Enterprises Inc. in exchange for 500,000 shares of the Company. Heng Fai Enterprises holds 2,730,000 shares (13.1% as of September 30, 2020 and December 31, 2019) of Vivacitas Oncology Inc., a U.S.-based biopharmaceutical company. Heng Fai Enterprises cost to purchase these Vivacitas shares was $200,128, which is recorded at cost by the Company because it does not have a readily determinable fair value as it is a private US company. Heng Fai Enterprises is a holding company without any business operations. Global eHealth Limited On October 1, 2018, 100% of Global eHealth Limited (“Global eHealth”) was transferred from Chan Heng Fai, a director of the Company, to the Company in exchange for 1,000,000 shares of the Company. There was no other consideration exchange in conjunction with this transaction. Global eHealth holds 46,226,673 shares (16.8%) of Holista CollTech Limited, a public Australian company that produces natural food ingredients. Global eHealth is a holding company without any business operations. Management Fees MacKenzie Equity Partners, owned by Charles MacKenzie, a Director of the Company's subsidiary LiquidValue Development, has had a consulting agreement with the Company since 2015. Per the terms of the agreement, as amended on January 1, 2018, the Company pays a monthly fee of $15,000 with an additional $5,000 per month due upon the close of the sale to Houston LD, LLC. Since January of 2019, the Company has paid a monthly fee of $20,000 for these consulting services. The Company incurred expenses of $180,000 and $180,000 for the nine months ended September 30, 2020 and 2019, respectively, which were capitalized as part of Real Estate on the Company’s Consolidated Balance Sheet as the services relate to property and project management. The Company incurred expenses of $60,000 and $60,000 for the three months ended September 30, 2020 and 2019, respectively. As of September 30, 2020, and December 31, 2019 the Company owed $20,000 and $0, respectively, to this entity. Consulting Services A law firm owned by Conn Flanigan, a Director of LiquidValue Development, performs consulting services for LiquidValue Development and some subsidiaries of the Company. The Company incurred expenses of $12,645 and $46,510 for the nine months ended September 30, 2020 and 2019, respectively. The Company incurred expenses of $12,645 and $3,153 for the three months ended September 30, 2020 and 2019, respectively. As of September 30, 2020, and December 31, 2019 there was no outstanding balance due to this entity. Rajen Manicka, the CEO of Holista CollTech and Co-founder of iGalen International Inc., performs consulting services for iGalen Inc. iGalen Inc. incurred expenses of $0 and $180,000 for the nine months ended September 30, 2020 and 2019, respectively. The Company incurred expenses of $0 and $60,000 for the three months ended September 30, 2020 and 2019, respectively. On both, September 30, 2020 and December 31, 2019, iGalen owed this related party fees for consulting services in the amount of $591,403. The Consulting service with Rajen Manicka was terminated on December 31, 2019. Chan Tung Moe, the consultant engaged with the Company through Pop Motion Consulting Pte. Ltd., is the son of Chan Heng Fai, a director and the CEO of the Company. In August of 2020 this consulting agreement was terminated, and Chan Tung Moe became an employee of Alset International as Chief Development Officer. The Company incurred expense of $140,758 for the nine months ended September 20, 2020 and 2019, respectively. The Company incurred expense of $22,470 for the three months ended September 30, 2020 and 2019, respectively. As of September 30, 2020 and December 2019, the Company owed Pop Motion consulting fee of $0 and $118,288, respectively. iGalen Inc. Affiliates iGalen Philippines and iGalen SDN are related party entities which are owned by Dr. Rajen Manicka and are not owned by the Company. iGalen Inc. provides use of its platform to collect sale revenue and payment of expenses for these entities without service fees. On September 30, 2020 and December 31, 2019, iGalen owed $364,377 and $342,695 to iGalen Philippines, respectively. iGalen SDN had a consulting agreement to provide accounting, administration and other logistic services to iGalen with a monthly fee $4,000. This agreement was terminated on December 31, 2019. The Company incurred expenses of $0 and 36,000 for the nine months ended September 30, 2020 and 2019, respectively. The Company incurred expenses of $0 and $12,000 for the three months ended September 30, 2020 and 2019, respectively. As of September 30, 2020, iGalen owed $87,756 to iGalen SDN. As of December 31, 2019, iGalen SDN owed iGalen $74,331. During the nine months ended September 30, 2020, iGalen SDN provided a $710,524 advance to iGalen for its operations. The advance is interest free, no security requirement and no payment term. The repayment depends on the demand and the future financial situation of iGalen. Medi Botanics Sdn Bhd, a subsidiary of Holista CollTech, is only raw material and product suppliers of iGalen. Dr. Rajen Manicka is the controlling shareholder and a director of both Medi Botanics Sdn Bhd and Holista CollTech. Medi Botanics Sdn Bhd supplied $0 and $372,594 raw materials and products to iGalen in the nine months ended September 30, 2020 and 2019, respectively. During three months ended on September 30, 2020 and 2019, Medi Botanics Sdn Bhd supplied $0 and $85,787 raw materials and products to iGalen. On September 30, 2020 and December 31, 2019, iGalen owed $698,198 and $956,300 to this entity, respectively. Investment in the Global Opportunity Fund On February 1, 2017, the Company invested $300,000 in Global Opportunity Fund (“Fund”), a mutual fund registered in the Cayman Islands and Chan Heng Fai is one of the directors of this fund. This Fund was closed during November 2019 and is being liquidated. LiquidValue Asset Management Pte. Ltd., one of the subsidiaries of the Company, is the investment manager of the Fund and receives a management fee from the Fund at 2% per annum of the aggregated net asset value of the investments and a performance fee of 20%. As of December 31, 2019, the Company recorded a receivable $307,944 from the Global Opportunity Fund. In the nine months ended on September 30, 2020 and 2019, the management fee and performance fee charged to the Fund were $0 and $4,425, respectively. In the three months ended on September 30, 2020 and 2019, the management fee and performance fee charged to the Fund were $0 and $1,386, respectively. On September 30, 2020 and December 31, 2019, the Fund owed accrued management and performance fee receivable $0 and $15,484 respectively. On January 23, 2020, the Company received $307,944 as a result of the liquidation of Global Opportunity Fund. Note Receivable from a related party company On March 2, 2020 LiquidValue Asset Management Pte. Ltd. (“LiquidValue”) received a $200,000 Promissory Note from American Medical REIT Inc. (“AMRE”), a company which is 36.1% owned by LiquidValue. Chan Heng Fai, Chan Tung Moe and Alan Lui from Alset International are directors of American Medical REIT Inc. The note carries interests of 8% and is payable in two years. LiquidValue also received warrants to purchase AMRE shares at the Exercise Price $5.00 per share. The amount of the warrants equals to the note principle divided by the Exercise Price. If AMRE goes to IPO in the future and IPO price is less than $10.00 per share, the Exercise price shall be adjusted downward to fifty percent (50%) of the IPO price. As of September 30, 2020, the fair market value of the warrants was $0. Warrants Exercised by DSS On June 30, 2020, we received deposit $1,419,605 from Document Security Systems, Inc. for a warrant exercise to acquire 44,005,182 shares of Alset International at a price approximately $0.03 per share. The transaction was closed in July 2020. After this exercise, DSS holds 127,179,311 shares of Alset International’s common stock, approximately 9.3%. Fai Heng Chan, our CEO, Chairman of our Board and controlling shareholder, is also Chairman of the Board of Document Security Systems, Inc. and a significant shareholder of Document Security Systems, Inc. |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
EQUITY | The Company is authorized to issue 20,000,000 common shares and 5,000,000 preferred shares, both at a par value $0.001 per share. At December 31, 2019, there were 10,001,000 common shares issued and outstanding. Pursuant to an agreement on June 24, 2020 with our stockholders HFE Holdings Limited and Chan Heng Fai, HFE Holdings Limited surrendered 3,600,000 shares of our common stock to the treasury of our company, and Chan Heng Fai surrendered 1,000 shares of our common stock to the treasury of our company, and all such shares were cancelled. No consideration was exchanged in connection with the surrender of the shares. As a result, the total number of outstanding shares of our common stock at September 30, 2020 was reduced to 6,400,000 shares from 10,001,000 shares. HotApp Blockchain, Inc. Sale of Shares From January to September, 2020, the Company sold 207,300 shares of HotApp Blockchain to international investors with the amount of $177,300, which was booked as addition paid-in capital. The Company held 505,976,376 shares of the total outstanding shares 506,898,576 before the sale. After the sale, the Company still owns approximately 99% of HotApp Blockchain’s total outstanding shares. From January to September, 2019, the Company sold 361,500 shares of HotApp Blockchain to international investors with the amount of $229,500, which was booked as addition paid-in capital. The Company held 506,262,076 shares of the total outstanding shares 506,898,576 before the sale. After the sale, the Company still owns approximately 99% of HotApp Blockchain’s total outstanding shares. Distribution to Minority Shareholder From January to September, 2020, SeD Maryland Development LLC Board approved the payment distribution plan to members and paid $197,400 in distribution to the minority shareholder. From January to September, 2019, SeD Maryland Development LLC Board approved the payment distribution plan to members and paid $740,250 in distribution to the minority shareholder. Change in Minority Interest From January 1 to September 30, 2020, Alset International issued 343,197,062 common shares through warrants exercise with exercise price approximately $0.03 per share and received $10,764,837 cash. On May 27, 2020, the Alset International granted 7,500,000 common shares to its employees in the performance share award plan. The fair value $146,853 of these shares was based on the market price on the granted day and was recorded as both compensation expense and equity in the financial statements. On June 5, 2020, the shareholder meeting approved 35,278,600 shares granted to the directors. The fair value $1,417,523 was based the June 5, 2020, the grant day, market price and was recorded as both compensation expense and equity in the financial statements. During the three and nine months ended September 30, 2020, the stock-based compensation expense was $0 and $1,573,623, respectively. On August 20, 2020, the Company acquired 30,000,000 common shares from Chan Heng Fai in exchange for a two-year non-interest bearing note of $1,333,429. The Company’s ownership of Alset International changed from 65.4% as of December 31, 2019 to 51.04% as of September 30, 2020. During the three and nine months ended September 30, 2020 and 2019, the sales of HotApp Blockchain’s shares were de minimis compared to its outstanding shares and did not change the minority interest. Changes of Ownership Percentage of Alset International On July 13, 2020, due to share grants and warrant exercises, the Company’s ownership percentage of Alset International fell below 50% and the entity was deconsolidated in accordance with ASC 810-10-45-5. A gain of approximately $53 million was recorded as a result of the deconsolidation. Upon deconsolidation the Company elected to apply the Fair Value Option under ASU 2016-01 to the investment in Alset International as the Company still retained significant influence of the subsidiary. On August 20, 2020, the Company acquired 30,000,000 common shares from Chan Heng Fai in exchange for a two-year non-interest bearing note of $1,333,429. After that transaction, the Company’s ownership was 51.04%, at which point Alset International was required to be consolidated. Upon reconsolidation a loss of approximately $22 million was recorded. During the period that the investment in Alset International was accounted for under ASU 2016-01, the Company recorded an unrealized loss on the fair value of the investment of approximately $31 million. As of September 30, 2020, the Company’s ownership of Alset International is 51.04%. As of December 29, 2020, Alset International has outstanding warrants and options to purchase 1,982,286,206 and 1,061,333 shares, respectively. Of the warrants outstanding, HF Enterprises Inc. holds warrants to purchase 359,834,471 shares, Chan Heng Fai, our founder and CEO, holds warrants to purchase 1,590,925,000 shares, and warrants to purchase 31,526,735 shares are held by third parties. All of the outstanding options to purchase 1,061,333 shares are owned by Chan Heng Fai. Due to this, the Company does not expect to own less than 50% of Alset International moving forward. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 9 Months Ended |
Sep. 30, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | Following is a summary of the changes in the balances of accumulated other comprehensive income, net of tax: Unrealized Gains and Losses on Security Investment Foreign Currency Translations Change in Minority Interest Total Balance at January 1, 2020 $ (59,888 ) $ 1,613,125 $ (84,968 ) $ 1,468,269 Other Comprehensive Income (8,240 ) (1,094,810 ) - (1,103,050 ) Balance at March 31, 2020 $ (68,128 ) $ 518,315 $ (84,968 ) $ 365,219 Other Comprehensive Income 8,147 389,413 (18,317 ) 379,243 Balance at June 30, 2020 $ (59,981 ) $ 907,728 $ (103,285 ) $ 744,462 Other Comprehensive Income 14,865 235,837 50,420 301,122 Balance at September 30, 2020 $ (45,116 ) $ 1,143,565 $ (52,865 ) $ 1,045,584 Unrealized Gains and Losses on Security Investment Foreign Currency Translations Total Balance at January 1, 2019 $ (23,779 ) $ 1,606,567 $ 1,582,788 Other Comprehensive Income 11,681 74,262 85,943 Balance at March 31, 2019 $ (12,098 ) $ 1,680,829 $ 1,668,731 Other Comprehensive Income 22 104,762 104,784 Balance at June 30, 2019 $ (12,076 ) $ 1,785,591 $ 1,773,515 Other Comprehensive Income (37,099 ) (403,990 ) (441,089 ) Balance at September 30, 2019 $ (49,175 ) $ 1,381,601 $ 1,332,426 |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operation, Additional Disclosures [Abstract] | |
DISCONTINUED OPERATIONS | HotApps Information Technology Co. Ltd. On October 25, 2018, HotApps International Pte. Ltd. (“HIP”) entered into an Equity Purchase Agreement with DSS Asia Limited (“DSS Asia”), a Hong Kong subsidiary of DSS International Inc. (“DSS International”), pursuant to which HIP agreed to sell to DSS Asia all of the issued and outstanding shares of HotApps Information Technology Co. Ltd., also known as Guangzhou HotApps Technology Ltd. (“Guangzhou HotApps”). Guangzhou HotApps was a wholly owned subsidiary of HIP, which was primarily engaged in engineering work for software development, mainly voice over internet protocol. Guangzhou HotApps was also involved in a number of outsourcing projects, including projects related to real estate and lighting. The parties to the Equity Purchase Agreement agreed that the purchase price for this transaction would be $100,000, which would be paid in the form of a two-year, interest free, unsecured, demand promissory note in the principal amount of $100,000, and that such note would be due and payable in full in two years. As of September 30, 2020 and December 31, 2019, the outstanding receivable of this promissory note was $100,000. The closing of the Equity Purchase Agreement was subject to certain conditions; these conditions were met and the transaction closed on January 14, 2019. The composition of assets and liabilities included in discontinued operations was as follows: September 30, 2020 December 31, 2019 Assets Current Assets Cash $ - $ - Deposit and other receivable - - Total Current Assets - - Fixed assets, net - - $ - $ - Liabilities Current Liabilities Accounts payable and accrued expenses $ - $ - Total Current Liabilities - - Total Liabilities $ - $ - The aggregate financial results of discontinued operations were as follows: Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 Revenues: Project fee-others $ - $ - $ - $ - - - - - Cost of revenues - - - - Gross profit $ - $ - $ - $ - Operating expenses: Depreciation - - - 48 General and administrative - - - 3,662 Total operating expenses - - - 3,710 (Loss) from operations - - - (3,710 ) Other income (expenses): Other sundry income - - - - Foreign exchange (loss) - - - (2 ) Total other (expenses) income - - - (2 ) Loss from discontinued operations $ - $ - $ - $ (3,712 ) The cash flows attributable to the discontinued operations are as follows: Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 Operating $ - $ 24,493 Investing - - Financing - - Net Change in Cash $ - $ 24,493 Impact BioMedical Inc. On April 27, 2020, Global BioMedical Pte Ltd (“GBM”), one of our subsidiaries, entered into a share exchange agreement with DSS BioHealth Security, Inc. (“DBHS”), a wholly owned subsidiary of Document Securities Systems Inc. (“DSS”), pursuant to which, DBHS will acquire all of the outstanding capital stock of Impact BioMedical Inc., wholly owned subsidiary of GBM, through a share exchange. The aggregate consideration to be issued to GBM for the Impact BioMedical shares will be the following: (i) 483,334 newly issued shares of DSS common stock; and (ii) 46,868 newly issued shares of a new series of DSS perpetual convertible preferred stock with a stated value of $46,868,000, or $1,000 per share. The convertible preferred stock can be convertible into shares of DSS common stock at a conversion price of $6.48 of preferred stock stated value per share of common stock, subject to a 19.9% beneficial ownership conversion limitation (a so-called “blocker”) based on the total issued outstanding shares of common stock of DSS beneficially owned by GBM. Holders of the convertible preferred stock will have no voting rights, except as required by applicable law or regulation, and no dividends will accrue or be payable on the convertible preferred stock. The holders of convertible preferred stock will be entitled to a liquidation preference of $1,000 per share, and DSS will have the right to redeem all or any portion of the then outstanding shares of convertible preferred stock, pro rata among all holders, at a redemption price per share equal to such liquidation value per share. Under ASU 2014-08, a disposal transaction meets the definition of a discontinued operation if all of the following criteria are met: 1. The disposal group constitutes a component of an entity or a group of components of an entity 2. The component of an entity (or group of components of an entity) meets the held-for-sale classification criteria, is disposed of by sale, or is disposed of other than by sale (e.g., “by abandonment, in an exchange measured based on the recorded amount of the nonmonetary asset relinquished, or in a distribution to owners in a spinoff”). 3. The disposal of a component of an entity (or group of components of an entity) “represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results”. Impact Biomedical Inc. is a group of subsidiaries of HFE and operates independently with its own financial reporting. The transaction is a disposal by sale and has a major effect on HFE’s financial results. Since it meets all above test criteria, we treated this disposal transaction as a discontinued operation in our financial statements. On August 21, 2020, the transaction closed and Impact BioMedical Inc became a direct wholly owned subsidiary of DBHS. GBM received 483,334 shares of DSS common stock and 46,868 shares of DSS preferred stock, which preferred shares could be converted to 7,232,716 common shares (however, any conversion will be subject to the blocker GBM has agreed to, as described above). After this transaction, we hold 500,001 shares of the common stock of DSS, representing 9.7% of the outstanding common stock of DSS. Our CEO, Chan Heng Fai owns an additional 14.5% of the common stock of DSS (not including any common or preferred shares we hold) and is the executive chairman of the board of directors of DSS. The Company has elected the fair value option for the DSS common stock that would otherwise be accounted for under the equity method of accounting. ASC 820, Fair Value Measurement and Disclosures, defines fair value of the financial assets. We value DSS common stock under level 1 category through quoted prices and preferred stock under level 3 category through a Monte Carlo valuation model. Under the “blocker” term in the agreement, the Company could convert 4,293 shares Convertible Preferred Stock into 662,500 shares of the common stock of DSS as of September 30, 2020. The quoted price of DSS common stock was $6.95 as of August 21, 2020. The total fair value of DSS common and preferred stocks GBM received as consideration for the disposal of Impact BioMedical was $67,208,173. As of August 21, 2020, the net asset value of Impact BioMedical was $57,143. The difference of $67,151,030 was recorded as additional paid in capital. We did not recognize gain or loss from this transaction as it was a related party transaction. The composition of assets and liabilities included in discontinued operations is as follows: September 30, December 31, 2020 2019 Assets Cash Assets Cash $ - $ 108,731 Prepaid Expense - 30,700 Total Asset $ - $ 139,431 Liabilities Accounts Payable $ - $ 7,021 Total Liabilities $ - $ 7,021 The financial results of discontinued operations are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Revenue $ - $ - $ - $ - Operating Expense Research & Development 45,617 79,457 246,915 260,671 General & Administration 10,280 31,648 170,035 94,153 Total Operating Expense 55,897 111,105 416,950 354,824 Other Expense 138 17,449 488 30,395 Loss from Discontinued Operations $ (56,053 ) $ (128,554 ) $ (417,438 ) $ (385,219 ) The cash flows attributable to the discontinued operation are as follows: Nine Months Ended on September 30, 2020 Nine Months Ended on September 30, 2019 Operating $ (522,435 ) $ (470,902 ) Investing - (36,000 ) Financing - - Net Change in Cash $ (522,435 ) $ (506,902 ) |
INVESTMENTS MEASURED AT FAIR VA
INVESTMENTS MEASURED AT FAIR VALUE | 9 Months Ended |
Sep. 30, 2020 | |
Investments, Fair Value Disclosure [Abstract] | |
INVESTMENTS MEASURED AT FAIR VALUE | Financial assets measured at fair value on a recurring basis are summarized below and disclosed on the consolidated balance sheet as of September 30, 2020 and December 31, 2019: Fair Value Measurement Using Amount at Cost Level 1 Level 2 Level 3 Amount at Fair Value September 30, 2020 Assets Investment securities- Fair Value Option $ 3,457,056 $ 4,787,454 $ - $ - $ 4,787,454 Investment securities- Trading 16,016 15,758 - - 15,758 Convertible preferred stock 63,849,002 - - 54,864,632 54,864,632 Convertible note receivable 50,000 - - 77,477 77,477 Warrants - American Premium Water - - - - - Warrants - AMRE - - - - - Stock Options - Vivacitas - - - - - Total Investment in securities at Fair Value $ 67,372,074 $ 4,803,212 $ - $ 54,942,109 $ 59,745,321 Fair Value Measurement Using Amount at Cost Level 1 Level 2 Level 3 Amount at Fair Value December 31, 2019 Assets Investment securities- Fair Value Option $ 3,457,056 $ 2,973,582 $ - $ - $ 2,973,582 Investment securities- Trading 16,016 15,907 - - 15,907 Convertible note receivable 50,000 - - 26,209 26,209 Stock Option - Vivacitas - - - - - Total Investment in securities at Fair Value $ 3,523,072 $ 2,989,489 $ - $ 26,209 $ 3,015,698 Unrealized loss on investment securities for the nine months ended September 30, 2020 and 2019 was $42,169,116 and $146,470, respectively. Unrealized loss on investment securities for three months ended September 30, 2020 was $43,761,763 and unrealized gain on investment securities for the three months ended September 30, 2019 was $507,727. For U.S. trading stocks, we use Bloomberg Market stock prices as the share prices to calculate fair value. For overseas stock, we use the stock price from local stock exchange to calculate fair value. The following chart shows details of the fair value of equity security investment at September 30, 2020 and December 31, 2019, respectively. Share price Market Value 9/30/2020 Shares 9/30/2020 Valuation DSS (Related Party) $ 4.560 500,001 * $ 2,280,005 Investment in Securities at Fair Value AMBS (Related Party) $ 0.011 20,000,000 $ 222,000 Investment in Securities at Fair Value Holista (Related Party) $ 0.043 46,226,673 $ 1,980,350 Investment in Securities at Fair Value American Premium Water (Related Party) $ 0.003 122,039,000 $ 305,100 Investment in Securities at Fair Value Others $ 15,758 Investment in Securities at Fair Value Total Level 1 Equity Securities $ 4,803,213 Vivacitas (Related Party) N/A 2,480,000 $ 200,128 Investment in Securities at Cost Nervotech N/A 1,666 $ 36,628 Investment in Securities at Cost Total Equity Securities $ 5,039,969 * Ratio of 1-for-30 (the “Reverse Split”) was effective at 5:01 p.m. Eastern Time on May 7, 2020 (the “Effective Time”) Share price Market Value 12/31/2019 Shares 12/31/2019 Valuation DSS (Related Party) $ 0.301 500,000 $ 150,500 Investment in Securities at Fair Value AMBS (Related Party) $ 0.013 20,000,000 $ 262,000 Investment in Securities at Fair Value Holista (Related Party) $ 0.055 46,226,673 $ 2,561,082 Investment in Securities at Fair Value Others $ 15,907 Investment in Securities at Fair Value Total Level 1 Equity Securities $ 2,989,489 Vivacitas (Related Party) N/A 2,480,000 $ 200,128 Investment in Securities at Cost Total Equity Securities $ 3,189,617 The DSS convertible preferred stock under level 3 category was valued through a Monte Carlo simulation model. As of September 30, 2020, the Company held 46,848 shares of DSS convertible preferred stock, which could convert to 7,232,716 common shares, with fair market value $54,864,632. The Monte Carlo model uses certain assumptions. The significant inputs and assumptions utilized are as follows: As of September 30, As of August 21, 2020 2020 Stock price $ 4.52 $ 6.88 Risk-free rate 0.16 % 0.16 % Annualized volatility 60.00 % 60.00 % Forecast horizon in years 3.00 3.00 Trading steps per year 52.00 52.00 Probability of call (annual) 10.00 % 10.00 % The selected stock prices represent the close market bid price of DSS on the valuation date. Risk -free interest rates were obtained from U.S. Treasury rates for the applicable periods. The volatility is based on the historical volatility of the DSS common stock. We assumed a three-year life for the preferred stock and assumed that after three-years the Company would desire to begin receiving a return on this investment – either through a conversion or liquidation. The Company has the right to call the preferred stock at any point. We believed that this is not a probable scenario but did apply a 10% annual probability of a call occurring. The fair value of the Sharing Services Convertible Note under level 3 category as of September 30, 2020 and December 31, 2019 was calculated using a Black-Scholes valuation model valued with the following weighted average assumptions: September 30, 2020 December 31, 2019 Dividend yield 0.00 % 0.00 % Expected volatility 221.69 % 159.88 % Risk free interest rate 0.13 % 1.61 % Contractual term (in years) 2.01 2.76 Exercise price $ 0.15 $ 0.15 We assumed dividend yield rate is 0.00% in Sharing Services. The volatility is based on the historical volatility of the Sharing Services’ common stock. Risk -free interest rates were obtained from U.S. Treasury rates for the applicable periods. Changes in the observable input values would likely cause material changes in the fair value of the Company’s Level 3 financial instruments. A significant increase (decrease) in this likelihood would result in a higher (lower) fair value measurement. The table below provides a summary of the changes in fair value, including net transfers in and/or out of all financial assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the nine months ended September 30, 2020 and 2019: Total Balance at January 1, 2020 $ 26,209 Total losses (12,599 ) Balance at March 31, 2020 $ 13,610 Total gain 13,115 Balance at June 30, 2020 $ 26,725 Gain during deconsolidation 21,628 Net losses (8,955,246 ) Acquisition of DSS Preferred Stock 63,849,002 Balance at September 30, 2020 $ 54,942,109 Total Balance at January 1, 2019 $ 78,723 Total losses (5,439 ) Balance at March 31, 2019 $ 73,284 Total losses (18,497 ) Balance at June 30, 2019 $ 54,787 Total losses (14,041 ) Balance at September 30, 2019 $ 40,746 On March 2, 2020, the Company received warrants to purchase shares of AMRE, a related party private startup company, in conjunction with the Company lending a $200,000 promissory note. For further details on this transaction, refer to Note 8 Related Party Transactions, Note Receivable from a Related Party Company. The Company holds a stock option to purchase 250,000 shares of Vivacitas common stock at $1 per share at any time prior to the date of public offering. As of September 30, 2020 and December 31, 2019, both AMRE and Vivacitas were private companies. Based the management’s analysis, the fair value of the warrants and the stock option were $0 as of September 30, 2020 and December 31, 2019. On July 17, 2020, the Company purchased 122,039,000 shares, approximately 9.99% ownership, and 122,039,000 warrants with an exercise price of $0.0001 per share, from APW, for an aggregated purchase price of $122,039. Based on the management’s analysis, the fair value of the warrants from APW was $0 as of September 30, 2020. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Lots Sales Agreement On November 23, 2015, SeD Maryland Development LLC completed the $15,700,000 acquisition of Ballenger Run, a 197-acre land sub-division development located in Frederick County, Maryland. Previously, on May 28, 2014, the RBG Family, LLC entered into a $15,000,000 assignable real estate sales contract with NVR, by which RBG Family, LLC would facilitate the sale of the 197 acres of Ballenger Run to NVR. On December 10, 2014, NVR assigned this contract to SeD Maryland Development, LLC through execution of an assignment and assumption agreement and entered into a series of lot purchase agreements by which NVR would purchase 443 subdivided residential lots from SeD Maryland Development, LLC. Through December 31, 2019, NVR has purchased 123 lots. In the nine months ended on September 30, 2020, NVR purchased 72 additional lots. On July 20, 2016, SeD Maryland entered into a lot purchase agreement with Orchard Development Corporation relating to the sale of 210 multifamily units in the Ballenger Run Project for a total purchase price of $5,250,000, which closed on August 7, 2018. On February 19, 2018, SeD Maryland entered into a contract to sell the Continuing Care Retirement Community Assisted Independent Living parcel to Orchard Development Corporation. It was agreed that the purchase price for the 5.9 acre lot would be $2,900,000 with a $50,000 deposit. It was also agreed that Orchard Development Corporation would have the right to terminate the transaction during the feasibility study period, which would last through May 30, 2018, and receive a refund of its deposit. On April 13, 2018, Orchard Development Corporation indicated that it would not be proceeding with the purchase of the CCRC parcel. On December 31, 2018, SeD Maryland entered into the Third Amendment to the Lot Purchase Agreement for Ballenger Run with NVR. Pursuant to the Third Amendment, SeD Maryland will convert the 5.9 acre CCRC parcel to 36 lots (the 28 feet wide villa lot) and sell to NVR. SeD Maryland pursued the required zoning approval to change the number of such lots from 85 to 121, which was approved in July 2019. On July 3, 2018, 150 CCM Black Oak entered into a Purchase and Sale Agreement with Houston LD, LLC for the sale of 124 lots located at its Black Oak project. Pursuant to the Purchase and Sale Agreement, it was agreed that 124 lots would be sold for a range of prices based on the lot type. In addition, Houston LD, LLC agreed to contribute a “community enhancement fee” for each lot, collectively totaling $310,000, which is currently held in escrow. 150 CCM Black Oak will apply these funds exclusively towards an amenity package on the property. The closing of the transactions contemplated by the Purchase and Sale Agreement was subject to Houston LD, LLC completing due diligence to its satisfaction. On October 12, 2018, 150 CCM Black Oak Ltd entered into an Amended and Restated Purchase and Sale Agreement (the “Amended and Restated Purchase and Sale Agreement”) for these 124 lots. Pursuant to the Amended and Restated Purchase and Sale Agreement, the purchase price remained $6,175,000, 150 CCM Black Oak Ltd was required to meet certain closing conditions and the timing for the closing was extended. On January 18, 2019, the sale of 124 lots in Magnolia, Texas was completed. Royalty Fees The Company has royalty commitments for the license and sale rights of certain nutraceutical products that include both fixed and variable royalty payments through 2022. The fixed royalty commitments are $15,000 per month. Variable royalty payments vary from $1.00 per unit sold to $0.20 per unit sold depending on sales volume. The Exclusive Sublicensing Agreement was terminated on January 8, 2019. Litigation with Gara Group On September 27, 2019, iGalen International Inc., one of our majority-owned subsidiaries, and iGalen Inc., its wholly-owned subsidiary, filed a complaint in the Superior Court of the State of California, County of San Diego, Central Division, against Gara Group, Inc., a Delaware corporation, and certain affiliated or related entities, including the Chief Executive Officer of the Gara Group (collectively these entities are referred to herein as the “Gara Group”). A similar complaint had been filed in Utah on September 26, 2019, but subsequently re-filed in California. The complaint, as amended on October 24, 2019, enumerates causes of action for breach of contract, breach of covenant of good faith and fair dealing and intentional interference with economic relations. iGalen Inc. and Gara Group are parties to a Specialized Services Agreement, dated March 29, 2017 (the “Specialized Services Agreement”). iGalen Inc. contracted with Gara Group to provide for services that include, among other things, (i) product fulfillment; (ii) software development and maintenance of an onsite “Platform,” which includes a company website and interactive portal referred to as the “Back Office”; and (iii) managing iGalen’s social media sites. The Gara Group had previously claimed that iGalen Inc. owed Gara Group certain amounts, including (i) $125,000 for “Back Office Fees”; (ii) $150,000 for “Speaking Fees”; and (iii) $67,299 for services related to iGalen’s merchant account, back office, and shipping fulfillment, invoiced on August 28 and 31, and September 15, 2019. iGalen Inc.’s amended complaint notes that no provision in the Specialized Services Agreement allows for the particular “Back Office Fees” of $125,000 and that no provision in the Specialized Services Agreement allows for the so-called “Speaking Fees” of $150,000. Gara Group cut off services to iGalen following iGalen’s indication that it was disputing the amounts owed. iGalen’s amended complaint notes that the actions of Gara Group and Mr. Gara have caused, and continue to cause, iGalen to suffer substantial harm by, among other things, making it so iGalen was unable to communicate with distributors via its website and Back Office, fulfill orders made by distributors, or pay commission to distributors. iGalen is seeking damages. On October 10, 2019, Gara Group filed a complaint in the Superior Court of the State of California, County of San Diego, Central Division against iGalen International Inc., iGalen Inc., Alset International, Chan Heng Fai, Dr. Rajen Manicka and David Price, an executive of iGalen Inc. Gara Group’s complaint for damages asserts that the Gara Group is entitled to general damages of $9,000,000 and liquidated damages of $50,000,000. iGalen Inc. intends to vigorously contest this matter. No trial date has been set. The Company is unable to assess the risk of loss at this time, but does not believe the outcome will have a material effect on our financial statements. In addition, from time to time, during the normal course of our businesses, we may be subject to various litigation claims and legal disputes, including in the area of intellectual property (e.g., trademarks, copyrights and patents). Our intellectual property rights extend to our technology, business processes and the content on our website. We use the intellectual property of third parties in marketing and providing our services through contractual and other rights. Despite our efforts, from time to time, third parties may allege that we have violated their intellectual property rights. Although the results of claims, lawsuits and proceedings in which we may be involved cannot be predicted with certainty, we do not currently believe that the final outcome of the matters discussed above will have a material adverse effect on our business, financial condition or results of operations. However, defending and prosecuting any such claims is costly and may impose a significant burden on our management and employees. In addition, we may receive unfavorable preliminary or interim rulings in the course of litigation, and there can be no assurances that favorable final outcomes will be obtained. With regard to intellectual property matters which may arise, if we are unable to obtain an outcome which sufficiently protects our rights, successfully defends our use or allows us time to develop non-infringing technology and content or to otherwise alter our business practices on a timely basis in response to the claims against us, our business, prospects and competitive position may be adversely affected. Promissory Note from Azure Pursuant to a Secured Promissory Note dated as of August 13, 2018, on October 13, 2019 Azure Holdings, LLC, was obligated to pay our subsidiary, 150 CCM Black Oak Ltd, $140,000 in principal, plus accrued interest at the rate of 2.5% per annum through October 13, 2019. Azure Holdings, LLC failed to pay the amount due. Effective as of October 13, 2019, the interest rate increased to a default rate of 18% per annum. The Company has subsequently had numerous communications with Azure Holdings, LLC regarding the payment of this Secured Promissory Note, and attempts to set a schedule for Azure Holdings, LLC to repay the amount due. We have not yet commenced litigation against either Azure Holdings, LLC or the guarantor of this Secured Promissory Note, but may do so in the immediate future. Based on current situation, the management has not believed that the collection from Azure is probable. As of September 30, 2020 and December 31, 2019, $169,166 and $149,697 were due to 150 CCM Black Oak Ltd, respectively. |
DIRECTORS AND EMPLOYEES' BENEFI
DIRECTORS AND EMPLOYEES' BENEFITS | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
DIRECTORS AND EMPLOYEES' BENEFITS | Stock Option plans HFE The Company reserves 500,000 shares of common stock under the Incentive Compensation Plan for high-quality executives and other employees, officers, directors, consultants and other persons who provide services to the Company or its related entities. This plan is meant to enable such persons to acquire or increase a proprietary interest in the Company in order to strengthen the mutuality of interests between such persons and the Company’s shareholders, and providing such persons with performance incentives to expand their maximum efforts in the creation of shareholder value. As of September 30, 2020 and December 31, 2019, there have been no options granted. Alset International Stock Option plans On November 20, 2013, Alset International approved a Stock Option Plan (the “2013 Plan”). Employees, executive directors, and non-executive directors (including the independent directors) are eligible to participate in the 2013 Plan. The following tables summarize stock option activity under the 2013 Plan for the nine months ended September 30, 2020: Options for Remaining Contractual Aggregate Common Shares Exercise Price Term (Years) Intrinsic Value Outstanding as of December 31, 2019 1,061,333 $ 0.09 4.00 $ - Granted - - Exercised - - Forfeited, cancelled, expired - - Outstanding as of September 30, 2020 1,061,333 $ 0.09 3.25 $ - Vested and exercisable at September 30, 2020 1,061,333 $ 0.09 3.25 $ - |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | The Company evaluated the events and transactions subsequent to September 30, 2020, the balance sheet date, through October 15, 2020, the date the consolidated financial statements were available to be issued. COVID-19 Since the beginning of 2020 there is an outbreak of the novel strain of coronavirus (“COVID-19”), which has spread to over 200 countries, including United States. COVID-19 was declared a global pandemic in March, 2020 and worldwide mitigation and measures were recommended. The impact of the outbreak is evolving and is adversely affecting global economic activities and contributes to significant instability in financial markets. While the impact related to current situation cannot be estimated at this time, it is possible that changes in the fair values of various investments could materially adversely affect our future financial statements. Forgiveness of PPP Loan On November 26, 2020, the amount of $64,502 from the PPP Loan was forgiven by the United States Small Business Administration and was recorded as other income. At such date, the PPP loan balance was $4,000. Initial Public Offering On November 23, 2020, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Aegis Capital Corp., as representative of the underwriters (“Aegis”), pursuant to which the Company agreed to sell to the underwriters in a firm commitment underwritten public offering (the “Offering”) an aggregate of 2,160,000 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at an initial public offering price of $7.00 per share. Aegis has a 60-day over-allotment option to purchase up to an additional 324,000 shares of Common Stock at $6.475 per share. The Offering closed on November 27, 2020. The Offering was the Company’s initial public offering and the shares began trading on The Nasdaq Capital Market on November 24, 2020 under the symbol “HFEN.” The shares were offered by the Company pursuant to a registration statement on Form S-1, as amended (File No. 333-235693), filed with the Securities and Exchange Commission (the “Commission”), which was declared effective by the Commission on November 12, 2020 (the “Registration Statement”). Aegis acted as lead book-running manager for the Offering and Westpark Capital, Inc. acted as co-manager. The net proceeds to the Company from the Offering, after deducting the underwriting discount, underwriters’ fees and expenses and other expenses of the offering, were approximately $12.7 million. The Company anticipates using the net proceeds from the Offering primarily to fund possible acquisitions of new companies and properties, and for working capital and other general corporate purposes. Also, under the terms of the Underwriting Agreement, the Company, upon closing of the Offering, issued to Aegis a warrant (the “Representative’s Warrant”) to purchase an aggregate of 108,000 shares of common stock (5% of the total shares issued in the Offering). The Representative’s Warrant is exercisable at a per share price of $9.80 (equal to 140% of the initial public offering price of the Common Stock) and is exercisable at any time and from time to time, in whole or in part, during the four-year period commencing from the date of issuance. DSS Shares Exercise On October 16, 2020, GBM converted 4,293 shares of the DSS Series A Convertible Preferred Stock into 662,500 shares of the common stock of DSS. As the time of conversion, we owned approximately 19.9% of the common stock of DSS, and our CEO, Chan Heng Fai, owns an additional 12.8% of the common stock of DSS (not including any common or preferred shares we held). |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and following the requirements of the Securities and Exchange Commission ("SEC") for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These interim financial statements have been prepared on the same basis as the Company's annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair statement of the Company's financial information. These interim results are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or any other interim period or for any other future year. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and the notes thereto for the year ended December 31, 2019, in Form S-1 as filed with the SEC on November 11, 2020. The balance sheet as of December 31, 2019 has been derived from audited financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements. The condensed consolidated financial statements include all accounts of the Company and its majority owned and controlled subsidiaries. The Company consolidates entities in which it owns more than 50% of the voting common stock and controls operations. All intercompany transactions and balances among consolidated subsidiaries have been eliminated. The Company's condensed consolidated financial statements include the financial position, results of operations and cash flows of the following entities as of September 30, 2020 and December 31, 2019, and for the three and nine month periods ended September 30, 2020 and 2019 as follows: Attributable interest as of, Name of subsidiary consolidated under HFE State or other jurisdiction of incorporation or organization September 30, 2020 December 31, 2019 % % Hengfai International Pte. Ltd Singapore 100 100 Hengfai Business Development Pte. Ltd Singapore 100 100 Heng Fai Enterprises Pte. Ltd. Singapore 100 100 Global eHealth Limited Hong Kong 100 100 Alset International Inc. (f.k.a. Singapore eDevelopment Limited) Singapore 51.04 65.4 Singapore Construction & Development Pte. Ltd. Singapore 51.04 65.4 Art eStudio Pte. Ltd. Singapore 26.03 * 33.36 * Singapore Construction Pte. Ltd. Singapore 51.04 65.4 Global BioMedical Pte. Ltd. Singapore 51.04 65.4 Alset Innovation Pte. Ltd. (f.k.a. SeD Investment Pte. Ltd.) Singapore 51.04 65.4 Health Wealth Happiness Pte. Ltd. Singapore 51.04 65.4 iGalen International Inc. United States of America 27.05 * 34.38 * iGalen Inc. (f.k.a iGalen USA LLC) United States of America 27.05 * 34.38 * SeD Capital Pte. Ltd. Singapore 51.04 65.4 LiquidValue Asset Management Pte. Ltd. (f.k.a. HengFai Asset Management Pte. Ltd.) Singapore 41.85 * 53.6 SeD Home Limited Hong Kong 51.04 65.4 SeD Reits Management Pte. Ltd. Singapore 51.04 65.4 Global TechFund of Fund Pte. Ltd. Singapore 51.04 65.4 Singapore eChainLogistic Pte. Ltd. Singapore 51.04 65.4 BMI Capital Partners International Limited. Hong Kong 51.04 65.4 SeD Perth Pty. Ltd. Australia 51.04 65.4 SeD Intelligent Home Inc. (f.k.a SeD Home International, Inc.) United States of America 51.04 65.4 LiquidValue Development Inc. (f.k.a. SeD Intelligent Home Inc.) United States of America 51.03 65.39 Alset iHome Inc. (f.k.a. SeD Home & REITs Inc. and SeD Home, Inc.) United States of America 51.03 65.39 SeD USA, LLC United States of America 51.03 65.39 150 Black Oak GP, Inc. United States of America 51.03 65.39 SeD Development USA Inc. United States of America 51.03 65.39 150 CCM Black Oak, Ltd. United States of America 51.03 65.39 SeD Texas Home, LLC United States of America 51.03 65.39 SeD Ballenger, LLC United States of America 51.03 65.39 SeD Maryland Development, LLC United States of America 42.64 * 54.63 SeD Development Management, LLC United States of America 43.38 * 55.58 SeD Builder, LLC United States of America 51.03 65.39 HotApp Blockchain Inc. United States of America 50.95 65.39 HotApps International Pte. Ltd. Singapore 50.95 65.39 HotApp International Limited Hong Kong 50.95 65.39 HWH International, Inc. United States of America 51.04 65.4 Health Wealth & Happiness Inc. United States of America 51.04 65.4 HWH Multi-Strategy Investment, Inc. United States of America 51.04 65.4 SeDHome Rental Inc United States of America 51.03 65.39 SeD REIT Inc. United States of America 51.03 65.39 Crypto Exchange Inc United States of America 50.95 65.39 HWH World Inc. United States of America 50.95 65.39 HWH World Pte. Ltd. Singapore 50.95 65.39 UBeauty Limited Hong Kong 51.04 65.4 WeBeauty Korea Inc Korea 51.04 65.4 HWH World Limited Hong Kong 51.04 65.4 HWH World Inc. Korea 51.04 65.4 Alset BioHealth Pte. Ltd. Singapore 51.04 - Alset Energy Pte. Ltd. Singapore 51.04 - Alset Payment Inc. United States of America 51.04 - Alset World Pte. Ltd. Singapore 51.04 - BioHealth Water Inc. United States of America 51.04 - Impact BioHealth Pte. Ltd. Singapore 51.04 - American Home REIT Inc. United States of America 41.85 * - Alset Solar Inc. United States of America 40.83 * - *Although the Company indirectly holds percentage of shares of these entities less than 50%, the subsidiaries of the Company directly hold more than 50% of shares of these entities, and therefore, they are still consolidated into the Company. |
Use of Estimates | The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management include, but are not limited to, allowance for doubtful accounts, valuation of real estate assets, allocation of development costs and capitalized interest to sold lots, fair value of the investments, the valuation allowance of deferred taxes, and contingencies. Actual results could differ from those estimates. In our property development business, land acquisition costs are allocated to each lot based on the area method, the size of the lot compared to the total size of all lots in the project. Development costs and capitalized interest are allocated to lots sold based on the total expected development and interest costs of the completed project and allocating a percentage of those costs based on the selling price of the sold lot compared to the expected sales values of all lots in the project. If allocation of development costs and capitalized interest based on the projection and relative expected sales value is impracticable, those costs could also be allocated based on area method, the size of the lot compared to the total size of all lots in the project. |
Cash and Cash Equivalents | The Company considers all highly liquid investments with a maturity of three months or less at the date of acquisition to be cash equivalents. Cash and cash equivalents include cash on hand and at the bank and short-term deposits with financial institutions that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in values. There were no cash equivalents as of September 30, 2020 and December 31, 2019. |
Restricted Cash | As a condition to the loan agreement with the Manufacturers and Traders Trust Company (“M&T Bank”), the Company is required to maintain a minimum of $2,600,000 in an interest-bearing account maintained by the lender as additional security for the loans. The fund is required to remain as collateral for the loan until the loan is paid off in full and the loan agreement terminated. The Company also has an escrow account with M&T Bank to deposit a portion of cash proceeds from lot sales. The fund in the escrow account is specifically used for the payment of the loan from M&T Bank. The fund is required to remain in the escrow account for the loan payment until the loan agreement terminates. As of September 30, 2020 and December 31, 2019, the total balance of these two accounts was $4,106,497 and $4,229,149, respectively. As a condition to the loan agreement with National Australian Bank Limited in conjunction with the Perth project, an Australian real estate development project, the Company is required to maintain Australian Dollar 50,000, in a non-interest-bearing account. As of September 30, 2020 and December 31, 2019, the account balance was $35,710 and $35,068, respectively. These funds will remain as collateral for the loans until paid in full. On July 20, 2018, 150 CCM Black Oak Ltd received $4,592,079 in district reimbursement payments for previous construction costs incurred in land development. Of this amount, $1,650,000 will remain on deposit in the District’s Capital Projects Fund for the benefit of 150 CCM Black Oak Ltd and will be released upon receipt of the evidence of: (a) the execution of a purchase agreement between 150 CCM Black Oak Ltd and a home builder with respect to the Black Oak development and (b) the completion, finishing and readying for home construction of at least 105 unfinished lots in the Black Oak development. After entering the purchase agreement with Houston LD, LLC, the above requirements were met. The amount of the deposit will be released to the Company by presenting the invoices paid for land development. After releasing funds to the Company, the amount on deposit was $0 and $90,394 on September 30, 2020 and December 31, 2019, respectively. As a condition to use the credit card services for the Company’s bio product direct sale business, provided by Global Payroll Gateway, Ltd. (“GPG”), a financial service company, the Company is required to deposit 10% revenue from the direct sales to a non-interest-bearing GPG reserve account with a maximum amount of $200,000. The Company is allowed to temporarily use the money in this deposit account upon request and pay back on a short-term basis. As of both, September 30, 2020 and December 31, 2019, the balance in the reserve account was $93,067. The fund will not be fully refunded to the Company until the service agreement with GPG terminates. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts receivable are stated at amounts due from buyers, contractors, and all third parties, net of an allowance for doubtful accounts. The Company monitors its accounts receivable balances on a monthly basis to ensure that they are collectible. On a quarterly basis, the Company uses its historical experience to estimate its allowance for doubtful accounts receivable. The Company’s allowance for doubtful accounts represents an estimate of the losses expected to be incurred based on specifically identified accounts as well as nonspecific amount, when determined appropriate. Generally, the amount of the allowance is primarily decided by division management’s historical experience, the delinquency trends, the resolution rates, the aging of receivables, the credit quality indicators and financial health of specific customers. As of September 30, 2020 and December 31, 2019, the allowance was $0. |
Inventories | Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method and includes all costs in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale. As of September 30, 2020 and December 31, 2019, inventory consisted of finished goods from iGalen Inc and HWH World Inc. The Company continuously evaluates the need for reserve for obsolescence and possible price concessions required to write-down inventories to net realizable value. |
Investment Securities | Investment Securities at Fair Value The Company holds investments in equity securities with readily determinable fair values, equity investments without readily determinable fair values, investments accounted for under the equity method, and investments at cost. Prior to the adoption of Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities The Company accounts for certain of its investments in equity securities in accordance with ASU 2016-01 Financial Instruments—Overall (Subtopic 825- 10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”) The Company has elected the fair value option for the equity securities noted below that would otherwise be accounted for under the equity method of accounting. Amarantus BioScience Holdings (“AMBS”), Holista CollTech Limited (“Holista”), Document Securities Systems Inc. (“DSS”), Alset International and American Premium Water Corp (“APW”) are publicly traded companies and fair value is determined by quoted stock prices. The Company has significant influence but does not have a controlling interest in these investments, and therefore, the Company’s investment could be accounted for under the equity method of accounting or elect fair value accounting. ● The Company has significant influence over DSS. As of September 30, 2020, the Company owns 9.7% of the common stock of DSS and 46,868 shares of preferred stock, which could covert to 7,232,716 common shares, subject to a 19.9% beneficial ownership conversion limitation (a so-called “blocker”) based on the total issued outstanding shares of common stock of DSS beneficially owned by Global BioMedical Pte Ltd (“GBM”), one of our subsidiaries. Our CEO is the owner of approximately 14.5% of the outstanding shares of DSS (not including any common or preferred shares we hold) and is a member of the Board of Directors of DSS. Chan Tung Moe, the son of Chan Heng Fai, is also a director of DSS. ● The Company has significant influence over AMBS as the Company is the beneficial owner of approximately 19.5% of the common shares of AMBS. ● The Company has significant influence over Holista as the Company and its CEO are the beneficial owner of approximately 16.8% of the outstanding shares of Holista, and our CEO holds a position on Holista's Board of Directors. ● The Company has significant influence over APW as the Company is the beneficial owner of approximately 9.99% of the common shares of APW. ● The Company had significant influence over Alset International during the period of deconsolidation as the company’s beneficial ownership ranged between 49.62% and 49.11% in that period and our CEO is the CEO of Alset international. Chan Heng Fai is a director of both companies. The Company accounts for certain of its investments in real estate funds without readily determinable fair values in accordance with ASU No. 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) The Company invested $50,000 in a convertible promissory note of Sharing Services, Inc. (“Sharing Services Convertible Note”), a company quoted on the US OTC market. The value of the convertible note was estimated by management using a Black-Scholes valuation model. The fair value of the note was $77,477 and $26,209 on September 30, 2020 and December 31, 2019, respectively. On March 2, 2020, the Company received warrants to purchase shares of American Medical REIT Inc. (“AMRE”), a related party private startup company, in conjunction with the Company lending a $200,000 promissory note. For further details on this transaction, refer to Note 8 Related Party Transactions, Note Receivable from a Related Party Company. The Company holds a stock option to purchase 250,000 shares of Vivacitas common stock at $1 per share at any time prior to the date of public offering. As of September 30, 2020 and December 31, 2019, both AMRE and Vivacitas were private companies. Based on management’s analysis, the fair value of the warrants and the stock option was $0 as of September 30, 2020 and December 31, 2019. On July 17, 2020, the Company purchased 122,039,000 shares, approximately 9.99% ownership, and 122,039,000 warrants with an exercise price of $0.0001 per share, from APW, for an aggregated purchase price of $122,039. Based on the management’s analysis, the fair value of the warrants from APW was $0 as of September 30, 2020. On April 27, 2020, Global BioMedical Pte Ltd (“GBM”), one of our subsidiaries, entered into a share exchange agreement with DSS BioHealth Security, Inc. (“DBHS”), a wholly owned subsidiary of Document Securities Systems Inc. (“DSS”), a related party of the Company, pursuant to which, DBHS agreed to acquire all of the outstanding capital stock of Impact BioMedical Inc., a wholly owned subsidiary of GBM, through a share exchange. On August 21, 2020, the transaction closed and Impact BioMedical Inc became a direct wholly owned subsidiary of DBHS. GBM received 483,334 shares of DSS common stock and 46,868 shares of DSS preferred stock, which preferred shares could be converted to 7,232,716 common shares. The Company has elected the fair value option for the DSS common stock that would otherwise be accounted for under the equity method of accounting. We value DSS preferred stock under level 3 category through a Monte Carlo simulation model. As of September 30, 2020, the fair market value of the DSS preferred stock was $54,864,632. For further details on this transaction, refer to Note 8 – Related Party Transactions, Note 11 – Discontinued Operations and Note 12 – Investments Measured at Fair Value. The changes in the fair values of the investment were recorded directly to accumulated other comprehensive income (loss). Due to the inherent uncertainty of these estimates, these values may differ materially from the values that would have been used had a ready market for these investments existed. Investment Securities at Cost The Company has an equity holding in Vivacitas Oncology Inc. (“Vivacitas”), a private company that is currently not listed on an exchange. Vivacitas was acquired after the adoption of ASU 2016-01. The Company applied ASC 321, Investments – Equity Securities, and elected the measurement alternative for equity investments that do not have readily determinable fair values and do not qualify for the practical expedient in ASC 820 to estimate fair value using the NAV per share. Under the alternative, we measure Vivacitas at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. On September 8, 2020, the Company acquired 1,666 shares, approximately 1.45% ownership, from Nervotec Pte Ltd (“Nervotec”), a private company, at the purchase price of $36,628. The Company applied ASC 321 and measured Nervotec at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. There has been no indication of impairment or changes in observable prices via transactions of similar securities and investments are still carried at cost. Investment Securities under Equity Method Accounting American Medical REIT Inc. LiquidValue Asset Management Pte. Ltd. (“LiquidValue”), a subsidiary of the Company owns 36.1% of American Medical REIT Inc. (“AMRE”), a startup REIT company concentrating on medical real estate. AMRE acquires state-of-the-art, purpose-built healthcare facilities and leases them to leading clinical operators with dominant market share under secure triple net leases. AMRE targets hospitals (both Critical Access and Specialty Surgical), Physician Group Practices, Ambulatory Surgical Centers, and other licensed medical treatment facilities. Chan Heng Fai, our CEO, is the executive chairman and director of AMRE. LiquidValue did not invest equity but provided a loan to AMRE (For further details on this transaction, refer to Note 8, Related Party Transactions). On balance sheet, the prorate loss from AMRE was recorded as a liability, accumulated losses on equity method investment. During three months ended September 30, 2020 and 2019, the investment losses from AMRE were $52,392 and $0, respectively. During nine months ended September 30, 2020 and 2019, the investment losses from AMRE were $193,132 and $0, respectively. As of September 30, 2020, and December 31, 2019, the accumulated losses on equity method investment were $231,418 and $0, respectively. Sweet Sense, Inc. BioLife Sugar, Inc. (“BioLife’), a subsidiary consolidated under Alset International, entered into a joint venture agreement on April 25, 2018 with Quality Ingredients, LLC (“QI”). The agreement created an entity called Sweet Sense, Inc. (“Sweet Sense”) which is 50% owned by BioLife and 50% owned by QI. Management believes its 50% investment represents significant influence over Sweet Sense and accounts for the investment under the equity method of accounting. On November 8, 2019, Impact BioMedical Inc., a subsidiary of the Company, purchased 50% of Sweet Sense from QI for $91,000 and recorded a loss from acquisition $90,001. As of November 8, 2019, the total investment in joint venture was equal to $91,000 and the proportionate losses totaled $90,001. The transaction was not in the scope of ASC 805 Business Combinations since the acquisition was accounted for an asset purchase instead of a business combination. As an asset acquisition, the Company recorded the transaction at cost and applied ASC 730 to expense in-process research and development cost, the major cost of Sweet Sense. Consequently, Sweet Sense was an 81.8% owned subsidiary of Impact BioMedical Inc. and therefore, was consolidated into the Company’s condensed consolidated financial statements as of September 30, 2020 and December 31, 2019. During the three and nine month ended September 30, 2019, the investment losses from Sweet Sense were $894 and $30,166, respectively. As a subsidiary of Impact BioMedical Inc., Sweet Sense was in the discontinued operations of Impact BioMedical Inc. For further details on this transaction, refer to Note 11 Discontinued Operations. Veganburg International Pte. Ltd. On February 5, 2020, SeD Capital Pte Ltd, a subsidiary of the Company, invested $2,176 in VeganBurg International Pte. Ltd. (“VeganBurg International”), a related party company, in exchange for 30% ownership of such company. Chan Heng Fai, our founder, Chairman and Chief Executive Officer, is a member of the Board of Directors of VeganBurg International and has significant influence on such company. VeganBurg International is focused on promoting environmentally friendly, healthy plant-based burgers in the Asian market. VeganBurg International has no operations till September 30, 2020 and $2,194 was recorded as investment in Securities at equity method on balance sheet on September 30, 2020. |
Real Estate Asstes | Real estate assets are recorded at cost, except when real estate assets are acquired that meet the definition of a business combination in accordance with Financial Accounting Standards Board (“FASB”) ASC 805 - “Business Combinations”, The Company capitalized interest and finance expenses from third-party borrowings of $0 and $43,020 for the three months ended September 30, 2020 and 2019, respectively. The Company capitalized construction costs of $2,763,068 and $1,464,998 for the three months ended September 30, 2020 and 2019, respectively. The Company capitalized interest and finance expenses from third-party borrowings of $0 and $514,985 for the nine months ended September 30, 2020 and 2019, respectively. The Company capitalized construction costs of $8,898,329 and $5,023,396 for the nine months ended September 30, 2020 and 2019, respectively. The Company’s policy is to obtain an independent third-party valuation for each major project in the United States as part of our assessment of identifying potential triggering events for impairment. Management may use the market comparison method to value other relatively small projects, such as the project in Perth, Australia. In addition to the annual assessment of potential triggering events in accordance with ASC 360 – Property Plant and Equipment On October 12, 2018, 150 CCM Black Oak, Ltd. entered into an Amended and Restated Purchase and Sale Agreement for 124 lots. Pursuant to the Amended and Restated Purchase and Sale Agreement, the purchase price remained $6,175,000, 150 CCM Black Oak, Ltd. was required to meet certain closing conditions and the timing for the closing was extended. On January 18, 2019, the sale of 124 lots at the Company’s Black Oak project in Magnolia, Texas was completed. After allocating costs of revenue to this sale, the Company incurred a loss of approximately $1.5 million from this sale and recognized a real estate impairment of approximately $1.5 million for the year ended December 31, 2018. On June 30, 2019, the Company recorded approximately $3.9 million of impairment on the Black Oak project based on discounted estimated future cash flows after updating the projection of market value of the project. On December 31, 2019, the Company recorded approximately $1.3 million of additional impairment on the Black Oak project based on discounted estimated future cash flows after updating the projected cost of the project. Properties under development Properties under development are properties being constructed for sale in the ordinary course of business, rather than to be held for the Company’s own use, rental or capital appreciation. |
Equipment | Property and equipment are recorded at cost, less depreciation. Repairs and maintenance are expensed as incurred. Expenditures incurred as a consequence of acquiring or using the asset, or that increase the value or productive capacity of assets are capitalized (such as removal, and restoration costs). When property and equipment is retired, sold, or otherwise disposed of, the asset’s carrying amount and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. Depreciation is computed by the straight-line method (after considering their respective estimated residual values) over the estimated useful lives of the respective assets as follows: Office and computer equipment 3 - 5 years Furniture and fixtures 3 - 5 years Vehicles 10 years Leasehold Improvements Remaining life of the lease The Company reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends, and prospects, as well as the effects of obsolescence, demand, competition, and other economic factors. |
Revenue Recognition and Cost of Sales | ASC 606 - Revenue from Contracts with Customers In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods or services. The provisions of ASC 606 include a five-step process by which the determination of revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which the Company expects to be entitled in exchange for those goods or services. ASC 606 requires the Company to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, performance obligations are satisfied. The following represents the Company’s revenue recognition policies by Segments: Property Development Property Sales The Company's main business is land development. The Company purchases land and develops it for building into residential communities. The developed lots are sold to builders (customers) for the construction of new homes. The builders enter a sales contract with the Company before they take the lots. The prices and timeline are determined and agreed upon in the contract. The builders do the inspections to make sure all conditions and requirements in contracts are met before purchasing the lots. A detailed breakdown of the five-step process for the revenue recognition of the Ballenger and Black Oak projects, which represented approximately 99% and 94%, respectively, of the Company’s revenue in the nine months ended on September 30, 2020 and 2019, is as follows: ● Identify the contract with a customer. The Company has signed agreements with the builders for developing the raw land to ready to build lots. The contract has agreed upon prices, timelines, and specifications for what is to be provided. ● Identify the performance obligations in the contract. Performance obligations of the Company include delivering developed lots to the customer, which are required to meet certain specifications that are outlined in the contract. The customer inspects all lots prior to accepting title to ensure all specifications are met. ● Determine the transaction price. The transaction price per lot is fixed and specified in the contract. Any subsequent change orders or price changes are required to be approved by both parties. ● Allocate the transaction price to performance obligations in the contract. Each lot or a group of lots is considered to be a separate performance obligation, for which the specified price in the contract is allocated to. ● Recognize revenue when (or as) the entity satisfies a performance obligation. The builders do the inspections to make sure all conditions/requirements are met before taking title of lots. The Company recognizes revenue at a point in time when title is transferred. The Company does not have further performance obligations or continuing involvement once title is transferred. Sale of the Front Foot Benefit Assessments We have established a front foot benefit (“FFB”) assessment on all of the NVR lots. This is a 30-year annual assessment allowed in Frederick County which requires homeowners to reimburse the developer for the costs of installing public water and sewer to the lots. These assessments become effective as homes are settled, at which time we can sell the collection rights to investors who will pay an upfront lump sum, enabling us to more quickly realize the revenue. The selling prices range from $3,000 to $4,500 per home depending the type of the home. Our total revenue from the front foot benefit assessment is approximately $1 million. To recognize revenue of FFB assessment, both our and NVR’s performance obligation have to be satisfied. Our performance obligation is completed once we complete the construction of water and sewer facility and close the lot sales with NVR, which inspects these water and sewer facility prior to close lot sales to ensure all specifications are met. NVR’s performance obligation is to sell homes they build to homeowners. Our FFB revenue is recognized on quarterly basis after NVR closes sales of homes to homeowners. The agreement with these FFB investors is not subject to amendment by regulatory agencies and thus our revenue from FFB assessment is not either. During the nine months ended on September 30, 2020 and 2019, we recognized revenue $169,349 and $365,645 from FFB assessment, respectively. During the three months ended on September 30, 2020 and 2019, we recognized revenue $54,147 and $129,031 from FFB assessment, respectively. Cost of Sales Land acquisition costs are allocated to each lot based on the area method, the size of the lot comparing to the total size of all lots in the project. Development costs and capitalized interest are allocated to lots sold based on the total expected development and interest costs of the completed project and allocating a percentage of those costs based on the selling price of the sold lot compared to the expected sales values of all lots in the project. If allocation of development costs and capitalized interest based on the projection and relative expected sales value is impracticable, those costs could also be allocated based on area method, the size of the lot comparing to the total size of all lots in the project. Biohealth Product Direct Sales The Company’s net sales consist of product sales. The Company's performance obligation is to transfer its products to its third-party independent distributors (“Distributors”). The Company generally recognizes revenue when product is shipped to its Distributors. The Company’s Distributors may receive distributor allowances, which are comprised of discounts, rebates and wholesale commission payments from the Company. Distributor allowances resulting from the Company’s sales of its products to its Distributors are recorded against net sales because the distributor allowances represent discounts from the suggested retail price. In addition to distributor allowances, the Company compensates its sales leader Distributors with leadership incentives for services rendered, relating to the development, retention, and management of their sales organizations. Leadership Incentives are payable based on achieved sales volume, which are recorded in general and administrative expenses. The Company recognizes revenue when it ships products. The Company receives the net sales price in cash or through credit card payments at the point of sale. If a Distributor returns a product to the Company on a timely basis, they may obtain a replacement product from the Company for such returned products. In addition, the Company maintains a buyback program pursuant to which it will repurchase products sold to a Distributor who has decided to leave the business. Allowances for product returns, primarily in connection with the Company’s buyback program, are provided at the time the sale is recorded. This accrual is based upon historical return rates for each country and the relevant return pattern, which reflects anticipated returns to be received over a period of up to 12 months following the original sale. Annual Membership The Company collects an annual membership fee from its Distributors. The fee is fixed, paid in full at the time joining the membership and non-refundable. The membership provides the member access to purchase products at a discount, use to certain back office services, receive commissions for signing up new members, and attend corporate events. The Company recognizes revenue associated with the membership over the period of the membership. Before the membership fee is recognized as revenue, it is recorded as deferred revenue. Deferred revenue relating to membership was $3,046,687 and $258,594 at September 30, 2020 and December 31, 2019. Shipping and Handling Shipping and handling services relating to product sales are recognized as fulfillment activities. Shipping and handling expenses were $0 and $183,138 for the nine months ended September 30, 2020 and 2019, respectively. Shipping and handling expenses were $0 and $56,438 for the three months ended September 30, 2020 and 2019, respectively. Shipping and handling costs paid by the Company are included in general and administrative expenses. Other Businesses Mutual Fund Management Service Income Revenue is recognized when (or as) the Company performs services to its customers in amounts that reflect the consideration to which the Company expects to be entitled to in exchange for those services, which occurs when (or as) the Company satisfies its contractual obligations and performs services to its customers. The Company generates revenue from providing management services for mutual fund customers. In respect to the provision of services, the agreements are less than one year with a cancellable clause and customers are typically billed on a monthly basis. During the three months ended September 30, 2020 and 2019, the Company recognized revenue of $0 and $8,495, respectively. During the nine months ended September 30, 2020 and 2019, the Company recognized revenue of $0 and $28,350, respectively. Remaining performance obligations As of September 30, 2020 and December 31, 2019, there were no remaining performance obligations or continuing involvement, as all service obligations within the other business activities segment have been completed. |
Advertising | Costs incurred for advertising for the Company are charged to operations as incurred. Advertising expenses for the nine months ended September 30, 2020 and 2019 were $136,253 and $156,822, respectively. Advertising expenses for the three months ended September 30, 2020 and 2019 were $74,062 and $28,289, respectively. |
Foreign currency | Functional and reporting currency Items included in the financial statements of each entity in the Company are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The financial statements of the Company are presented in U.S. dollars (the “reporting currency”). The functional and reporting currency of the Company is the United States dollar (“U.S. dollar”). The financial records of the Company’s subsidiaries located in Singapore, Hong Kong, Australia and South Korea are maintained in their local currencies, the Singapore Dollar (S$), Hong Kong Dollar (HK$), Australian Dollar (“AUD”) and South Korean Won (“KRW”), which are also the functional currencies of these entities. Transactions in foreign currencies Transactions in currencies other than the functional currency during the year are converted into functional currency at the applicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statement of operations. The majority of the Company’s foreign currency transaction gains or losses come from the effects of foreign exchange rate changes on the intercompany loans between Singapore entities and U.S. entities. The Company recorded $960,268 gain on foreign exchange during the nine months ended on September 30, 2020 and a $438,608 gain during the nine months ended on September 30, 2019. The Company recorded foreign exchange loss of $415,203 and $757,068 gain during the three months ended on September 30, 2020 and 2019, respectively. The foreign currency transactional gains and losses are recorded in operations. Translation of consolidated entities’ financial statements Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchange ruling at the balance sheet date. The Company’s entities with functional currency of Singapore Dollar, Hong Kong Dollar, AUD and KRW, translate their operating results and financial positions into the U.S. dollar, the Company’s reporting currency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenue, expense, gains and losses are translated using the average rate for the year. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of comprehensive income (loss). For the nine months ended on September 30, 2020, the Company recorded other comprehensive loss from foreign currency translation of $585,085, and a $325,518 loss in the nine months ended September 30, 2019, in accumulated other comprehensive loss. The Company recorded other comprehensive gain from translation of $462,064 and $584,561 loss in the three months ended September 30, 2020 and 2019, respectively. |
Earnings (loss) per share | The Company presents basic and diluted earnings (loss) per share data for its ordinary shares. Basic earnings (loss) per share is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted-average number of ordinary shares outstanding during the year, adjusted for treasury shares held by the Company. Diluted earnings (loss) per share is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted-average number of ordinary shares outstanding, adjusted for treasury shares held, for the effects of all dilutive potential ordinary shares, which comprise convertible securities, such as stock options, convertible bonds and warrants. Due to the limited operations of the Company, there are no potentially dilutive securities outstanding on September 30, 2020 and 2019. |
Fair Value Measurements | ASC 820, Fair Value Measurement and Disclosures Level 1: Observable inputs such as quoted prices (unadjusted) in an active market for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs that are supported by little or no market activity; therefore, the inputs are developed by the Company using estimates and assumptions that the Company expects a market participant would use, including pricing models, discounted cash flow methodologies, or similar techniques. The carrying value of the Company’s financial instruments, including cash and cash equivalents, accounts receivable and accounts payable and accrued expenses approximate fair value because of the short-term maturity of these financial instruments. The liabilities in connection with the conversion and make-whole features included within certain of the Company’s convertible notes payable and warrants are each classified as a level 3 liability. |
Non-controlling interests | Non-controlling interests represent the equity in subsidiary not attributable, directly or indirectly, to owners of the Company, and are presented separately in the consolidated statements of operation and comprehensive income, and within equity in the Consolidated Balance Sheets, separately from equity attributable to owners of the Company. On September 30, 2020 and December 31, 2019, the aggregate non-controlling interests in the Company were $41,672,434 and $6,975,459 respectively. |
Recent Accounting Pronouncements | Accounting pronouncement adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) which supersedes ASC Topic 840, Leases. ASU 2016-02 requires lessees to recognize a right-of-use asset and a lease liability on their balance sheets for all the leases with terms greater than twelve months. Based on certain criteria, leases will be classified as either financing or operating, with classification affecting the pattern of expense recognition in the income statement. For leases with a term of twelve months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. ASU 2016-02 is effective for fiscal years beginning after December 15, 2019 for emerging growth companies, and interim periods within those years, with early adoption permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. In July 2018, the FASB issued ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements” that allows entities to apply the provisions of the new standard at the effective date (e.g. January 1, 2019), as opposed to the earliest period presented under the modified retrospective transition approach (January 1, 2017) and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The modified retrospective approach includes a number of optional practical expedients primarily focused on leases that commenced before the effective date of Topic 842, including continuing to account for leases that commence before the effective date in accordance with previous guidance, unless the lease is modified. The new leasing standard presents dramatic changes to the balance sheets of lessees. Lessor accounting is updated to align with certain changes in the lessee model and the new revenue recognition standard. The standard had a material impact on the Company’s condensed consolidated balance sheets, but did not have an impact on its condensed consolidated statements of operations. The most significant impact was the recognition of right-of-use assets and lease liabilities for operating leases. As a lessor of one home, this standard does not have material impact on the Company. The balances of operating lease right-of-use assets and operating lease liabilities as of September 30, 2020 were $546,519 and $541,887, respectively. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As our leases do not provide a readily determinable implicit rate, we estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. The operating lease right-of-use asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. The lease term includes options to extend or terminate when we are reasonably certain the option will be exercised. In general, we are not reasonably certain to exercise such options. We recognize lease expense for minimum lease payments on a straight-line basis over the lease term. We elected the practical expedient to not recognize operating lease right-of-use assets and operating lease liabilities for lease agreements with terms less than 12 months. In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception ( In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework: Changes to the Disclosure Requirements for Fair Value Measurement In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law in March 2020. The CARES Act lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”). Corporate taxpayers may carryback net operating losses (NOLs) originating between 2018 and 2020 for up to five years, which was not previously allowed under the 2017 Tax Act. The CARES Act also eliminates the 80% of taxable income limitations by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in 2018, 2019 or 2020. Taxpayers may generally deduct interest up to the sum of 50% of adjusted taxable income plus business interest income (30% limit under the 2017 Tax Act) for 2019 and 2020. The CARES Act allows taxpayers with alternative minimum tax credits to claim a refund in 2020 for the entire amount of the credits instead of recovering the credits through refunds over a period of years, as originally enacted by the 2017 Tax Act. In addition, the CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. The enactment of the CARES Act did not result in any material adjustments to our income tax provision for the nine months ended September 30, 2020. Accounting pronouncement not yet adopted In December 2019, The FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of Reference Rate Reform on Financial Reporting |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Subsidiaries | Attributable interest as of, Name of subsidiary consolidated under HFE State or other jurisdiction of incorporation or organization September 30, 2020 December 31, 2019 % % Hengfai International Pte. Ltd Singapore 100 100 Hengfai Business Development Pte. Ltd Singapore 100 100 Heng Fai Enterprises Pte. Ltd. Singapore 100 100 Global eHealth Limited Hong Kong 100 100 Alset International Inc. (f.k.a. Singapore eDevelopment Limited) Singapore 51.04 65.4 Singapore Construction & Development Pte. Ltd. Singapore 51.04 65.4 Art eStudio Pte. Ltd. Singapore 26.03 * 33.36 * Singapore Construction Pte. Ltd. Singapore 51.04 65.4 Global BioMedical Pte. Ltd. Singapore 51.04 65.4 Alset Innovation Pte. Ltd. (f.k.a. SeD Investment Pte. Ltd.) Singapore 51.04 65.4 Health Wealth Happiness Pte. Ltd. Singapore 51.04 65.4 iGalen International Inc. United States of America 27.05 * 34.38 * iGalen Inc. (f.k.a iGalen USA LLC) United States of America 27.05 * 34.38 * SeD Capital Pte. Ltd. Singapore 51.04 65.4 LiquidValue Asset Management Pte. Ltd. (f.k.a. HengFai Asset Management Pte. Ltd.) Singapore 41.85 * 53.6 SeD Home Limited Hong Kong 51.04 65.4 SeD Reits Management Pte. Ltd. Singapore 51.04 65.4 Global TechFund of Fund Pte. Ltd. Singapore 51.04 65.4 Singapore eChainLogistic Pte. Ltd. Singapore 51.04 65.4 BMI Capital Partners International Limited. Hong Kong 51.04 65.4 SeD Perth Pty. Ltd. Australia 51.04 65.4 SeD Intelligent Home Inc. (f.k.a SeD Home International, Inc.) United States of America 51.04 65.4 LiquidValue Development Inc. (f.k.a. SeD Intelligent Home Inc.) United States of America 51.03 65.39 Alset iHome Inc. (f.k.a. SeD Home & REITs Inc. and SeD Home, Inc.) United States of America 51.03 65.39 SeD USA, LLC United States of America 51.03 65.39 150 Black Oak GP, Inc. United States of America 51.03 65.39 SeD Development USA Inc. United States of America 51.03 65.39 150 CCM Black Oak, Ltd. United States of America 51.03 65.39 SeD Texas Home, LLC United States of America 51.03 65.39 SeD Ballenger, LLC United States of America 51.03 65.39 SeD Maryland Development, LLC United States of America 42.64 * 54.63 SeD Development Management, LLC United States of America 43.38 * 55.58 SeD Builder, LLC United States of America 51.03 65.39 HotApp Blockchain Inc. United States of America 50.95 65.39 HotApps International Pte. Ltd. Singapore 50.95 65.39 HotApp International Limited Hong Kong 50.95 65.39 HWH International, Inc. United States of America 51.04 65.4 Health Wealth & Happiness Inc. United States of America 51.04 65.4 HWH Multi-Strategy Investment, Inc. United States of America 51.04 65.4 SeDHome Rental Inc United States of America 51.03 65.39 SeD REIT Inc. United States of America 51.03 65.39 Crypto Exchange Inc United States of America 50.95 65.39 HWH World Inc. United States of America 50.95 65.39 HWH World Pte. Ltd. Singapore 50.95 65.39 UBeauty Limited Hong Kong 51.04 65.4 WeBeauty Korea Inc Korea 51.04 65.4 HWH World Limited Hong Kong 51.04 65.4 HWH World Inc. Korea 51.04 65.4 Alset BioHealth Pte. Ltd. Singapore 51.04 - Alset Energy Pte. Ltd. Singapore 51.04 - Alset Payment Inc. United States of America 51.04 - Alset World Pte. Ltd. Singapore 51.04 - BioHealth Water Inc. United States of America 51.04 - Impact BioHealth Pte. Ltd. Singapore 51.04 - American Home REIT Inc. United States of America 41.85 * - Alset Solar Inc. United States of America 40.83 * - |
Estimated useful lives | Office and computer equipment 3 - 5 years Furniture and fixtures 3 - 5 years Vehicles 10 years Leasehold Improvements Remaining life of the lease |
SEGMENTS (Tables)
SEGMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Property Development Digital Transformation Technology Biohealth Business Other Discontinued Operations Total Nine Months Ended September 30, 2020 Revenue $ 7,148,786 $ - $ 31,133 $ - $ - $ 7,179,919 Cost of Sales (5,603,164 ) - (6,139 ) - - (5,609,303 ) Gross Margin 1,545,622 - 24,994 - - 1,570,616 Operating Expenses (634,254 ) (87,972 ) (388,083 ) (3,086,630 ) (416,950 ) (4,613,889 ) Operating Income (Loss) 911,368 (87,972 ) (363,089 ) (3,086,630 ) (416,968 ) (3,043,273 ) Other Income (Expense) (2,646 ) 115 (10,211,916 ) 11,123 (488 ) (10,203,812 ) Net Income (Loss) Before Income Tax 908,722 (87,857 ) (10,575,005 ) (3,075,507 ) (417,438 ) (13,247,085 ) Property Development Digital Transformation Technology Biohealth Business Other Discontinued Operations Total Nine Months ended September 30, 2019 Revenue $ 21,509,197 $ - $ 1,406,951 $ 28,350 $ - $ 22,944,498 Cost of Sales (18,819,865 ) - (357,935 ) - - (19,177,800 ) Gross Margin 2,689,332 - 1,049,016 28,350 - 3,766,698 Operating Expenses (4,598,112 ) (193,959 ) (1,780,026 ) (1,697,423 ) (358,534 ) (8,628,054 ) Operating Income (Loss) (1,908,780 ) (193,959 ) (731,010 ) (1,669,073 ) (358,534 ) (4,861,356 ) Other Income (Expense) 34,433 296,726 31,151 (4,874 ) (30,397 ) 327,039 Net Income (Loss) Before Income Tax (1,874,347 ) 102,767 (699,859 ) (1,673,947 ) (388,931 ) (4,534,317 ) September 30, 2020 Cash and Restricted Cash $ 5,079,010 $ 62,422 $ 1,386,513 $ 6,461,531 $ - $ 12,989,476 Total Assets 30,540,913 162,524 61,572,898 9,197,695 - 101,474,030 December 31, 2019 Cash and Restricted Cash $ 5,439,318 $ 55,752 $ 388,670 $ 1,338,525 $ 108,731 $ 7,330,996 Total Assets 29,857,615 155,854 948,931 4,770,949 139,431 35,872,780 |
REAL ESTATE ASSETS (Tables)
REAL ESTATE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Other Real Estate, Foreclosed Assets, and Repossessed Assets [Abstract] | |
Real estate assets | September 30, 2020 December 31, 2019 Construction in Progress $ 12,298,889 $ 9,601,364 Land Held for Development 12,691,477 14,283,340 Total Real Estate Assets $ 24,990,366 $ 23,884,704 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | September 30, 2020 December 31, 2019 Computer Equipment $ 181,559 $ 175,992 Furniture and Fixtures 62,328 52,798 Vehicles 90,929 90,929 Subtotal 334,816 319,719 Accumulated Depreciation (257,153 ) (239,434 ) Total $ 77,663 $ 80,285 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Notes Payable [Abstract] | |
Notes Payable | September 30, 2020 December 31, 2019 Union Bank Loan - - M&T Bank Loan, Net of Debt Discount 619,329 - PPP Loan 68,502 - Australia Loan 159,966 157,105 Total notes payable $ 847,797 $ 157,105 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Changes in the balances of accumulated other comprehensive income, net of tax | Unrealized Gains and Losses on Security Investment Foreign Currency Translations Change in Minority Interest Total Balance at January 1, 2020 $ (59,888 ) $ 1,613,125 $ (84,968 ) $ 1,468,269 Other Comprehensive Income (8,240 ) (1,094,810 ) - (1,103,050 ) Balance at March 31, 2020 $ (68,128 ) $ 518,315 $ (84,968 ) $ 365,219 Other Comprehensive Income 8,147 389,413 (18,317 ) 379,243 Balance at June 30, 2020 $ (59,981 ) $ 907,728 $ (103,285 ) $ 744,462 Other Comprehensive Income 14,865 235,837 50,420 301,122 Balance at September 30, 2020 $ (45,116 ) $ 1,143,565 $ (52,865 ) $ 1,045,584 Unrealized Gains and Losses on Security Investment Foreign Currency Translations Total Balance at January 1, 2019 $ (23,779 ) $ 1,606,567 $ 1,582,788 Other Comprehensive Income 11,681 74,262 85,943 Balance at March 31, 2019 $ (12,098 ) $ 1,680,829 $ 1,668,731 Other Comprehensive Income 22 104,762 104,784 Balance at June 30, 2019 $ (12,076 ) $ 1,785,591 $ 1,773,515 Other Comprehensive Income (37,099 ) (403,990 ) (441,089 ) Balance at September 30, 2019 $ (49,175 ) $ 1,381,601 $ 1,332,426 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
HotApps Information Technology Co. Ltd. | |
Assets and liabilities | September 30, 2020 December 31, 2019 Assets Current Assets Cash $ - $ - Deposit and other receivable - - Total Current Assets - - Fixed assets, net - - $ - $ - Liabilities Current Liabilities Accounts payable and accrued expenses $ - $ - Total Current Liabilities - - Total Liabilities $ - $ - |
Aggregate financial results | Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 Revenues: Project fee-others $ - $ - $ - $ - - - - - Cost of revenues - - - - Gross profit $ - $ - $ - $ - Operating expenses: Depreciation - - - 48 General and administrative - - - 3,662 Total operating expenses - - - 3,710 (Loss) from operations - - - (3,710 ) Other income (expenses): Other sundry income - - - - Foreign exchange (loss) - - - (2 ) Total other (expenses) income - - - (2 ) Loss from discontinued operations $ - $ - $ - $ (3,712 ) |
Cash flows | Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 Operating $ - $ 24,493 Investing - - Financing - - Net Change in Cash $ - $ 24,493 |
Impact BioMedical Inc. | |
Assets and liabilities | September 30, December 31, 2020 2019 Assets Cash Assets Cash $ - $ 108,731 Prepaid Expense - 30,700 Total Asset $ - $ 139,431 Liabilities Accounts Payable $ - $ 7,021 Total Liabilities $ - $ 7,021 |
Aggregate financial results | Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Revenue $ - $ - $ - $ - Operating Expense Research & Development 45,617 79,457 246,915 260,671 General & Administration 10,280 31,648 170,035 94,153 Total Operating Expense 55,897 111,105 416,950 354,824 Other Expense 138 17,449 488 30,395 Loss from Discontinued Operations $ (56,053 ) $ (128,554 ) $ (417,438 ) $ (385,219 ) |
Cash flows | Nine Months Ended on September 30, 2020 Nine Months Ended on September 30, 2019 Operating $ (522,435 ) $ (470,902 ) Investing - (36,000 ) Financing - - Net Change in Cash $ (522,435 ) $ (506,902 ) |
INVESTMENTS MEASURED AT FAIR _2
INVESTMENTS MEASURED AT FAIR VALUE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Financial assets measured at fair value on a recurring basis | Fair Value Measurement Using Amount at Cost Level 1 Level 2 Level 3 Amount at Fair Value September 30, 2020 Assets Investment securities- Fair Value Option $ 3,457,056 $ 4,787,454 $ - $ - $ 4,787,454 Investment securities- Trading 16,016 15,758 - - 15,758 Convertible preferred stock 63,849,002 - - 54,864,632 54,864,632 Convertible note receivable 50,000 - - 77,477 77,477 Warrants - American Premium Water - - - - - Warrants - AMRE - - - - - Stock Options - Vivacitas - - - - - Total Investment in securities at Fair Value $ 67,372,074 $ 4,803,212 $ - $ 54,942,109 $ 59,745,321 Fair Value Measurement Using Amount at Cost Level 1 Level 2 Level 3 Amount at Fair Value December 31, 2019 Assets Investment securities- Fair Value Option $ 3,457,056 $ 2,973,582 $ - $ - $ 2,973,582 Investment securities- Trading 16,016 15,907 - - 15,907 Convertible note receivable 50,000 - - 26,209 26,209 Stock Option - Vivacitas - - - - - Total Investment in securities at Fair Value $ 3,523,072 $ 2,989,489 $ - $ 26,209 $ 3,015,698 |
Fair value of equity security investment | Share price Market Value 9/30/2020 Shares 9/30/2020 Valuation DSS (Related Party) $ 4.560 500,001 * $ 2,280,005 Investment in Securities at Fair Value AMBS (Related Party) $ 0.011 20,000,000 $ 222,000 Investment in Securities at Fair Value Holista (Related Party) $ 0.043 46,226,673 $ 1,980,350 Investment in Securities at Fair Value American Premium Water (Related Party) $ 0.003 122,039,000 $ 305,100 Investment in Securities at Fair Value Others $ 15,758 Investment in Securities at Fair Value Total Level 1 Equity Securities $ 4,803,213 Vivacitas (Related Party) N/A 2,480,000 $ 200,128 Investment in Securities at Cost Nervotech N/A 1,666 $ 36,628 Investment in Securities at Cost Total Equity Securities $ 5,039,969 * Ratio of 1-for-30 (the “Reverse Split”) was effective at 5:01 p.m. Eastern Time on May 7, 2020 (the “Effective Time”) Share price Market Value 12/31/2019 Shares 12/31/2019 Valuation DSS (Related Party) $ 0.301 500,000 $ 150,500 Investment in Securities at Fair Value AMBS (Related Party) $ 0.013 20,000,000 $ 262,000 Investment in Securities at Fair Value Holista (Related Party) $ 0.055 46,226,673 $ 2,561,082 Investment in Securities at Fair Value Others $ 15,907 Investment in Securities at Fair Value Total Level 1 Equity Securities $ 2,989,489 Vivacitas (Related Party) N/A 2,480,000 $ 200,128 Investment in Securities at Cost Total Equity Securities $ 3,189,617 |
Changes in fair value | Total Balance at January 1, 2020 $ 26,209 Total losses (12,599 ) Balance at March 31, 2020 $ 13,610 Total gain 13,115 Balance at June 30, 2020 $ 26,725 Gain during deconsolidation 21,628 Net losses (8,955,246 ) Acquisition of DSS Preferred Stock 63,849,002 Balance at September 30, 2020 $ 54,942,109 Total Balance at January 1, 2019 $ 78,723 Total losses (5,439 ) Balance at March 31, 2019 $ 73,284 Total losses (18,497 ) Balance at June 30, 2019 $ 54,787 Total losses (14,041 ) Balance at September 30, 2019 $ 40,746 |
DSS convertible preferred stock | |
Significant inputs and assumptions | As of September 30, As of August 21, 2020 2020 Stock price $ 4.52 $ 6.88 Risk-free rate 0.16 % 0.16 % Annualized volatility 60.00 % 60.00 % Forecast horizon in years 3.00 3.00 Trading steps per year 52.00 52.00 Probability of call (annual) 10.00 % 10.00 % |
Sharing Services Convertible Note | |
Significant inputs and assumptions | September 30, 2020 December 31, 2019 Dividend yield 0.00 % 0.00 % Expected volatility 221.69 % 159.88 % Risk free interest rate 0.13 % 1.61 % Contractual term (in years) 2.01 2.76 Exercise price $ 0.15 $ 0.15 |
DIRECTORS AND EMPLOYEES' BENE_2
DIRECTORS AND EMPLOYEES' BENEFITS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock option activity | Options for Remaining Contractual Aggregate Common Shares Exercise Price Term (Years) Intrinsic Value Outstanding as of December 31, 2019 1,061,333 $ 0.09 4.00 $ - Granted - - Exercised - - Forfeited, cancelled, expired - - Outstanding as of September 30, 2020 1,061,333 $ 0.09 3.25 $ - Vested and exercisable at September 30, 2020 1,061,333 $ 0.09 3.25 $ - |
NATURE OF OPERATIONS AND SUMM_2
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Revenue | $ 2,148,923 | $ 5,306,863 | $ 7,179,919 | $ 22,944,498 | |
Deferred revenue | 3,046,687 | 3,046,687 | $ 258,594 | ||
iGalen Inc. | |||||
Revenue | 1,331 | 360,351 | 30,533 | 1,406,951 | |
Deferred revenue | 0 | 0 | 37,120 | ||
HWH World | |||||
Revenue | 600 | $ 0 | 600 | $ 0 | |
Deferred revenue | $ 3,046,687 | $ 3,046,687 | $ 221,474 | ||
Alset International | |||||
Ownership | 51.04% | 51.04% | 69.08% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2019 | |||
Hengfai International Pte. Ltd | ||||
Jurisdiction of incorporation or organization | Singapore | Singapore | ||
Ownership | 100.00% | 100.00% | ||
Hengfai Business Development Pte. Ltd | ||||
Jurisdiction of incorporation or organization | Singapore | Singapore | ||
Ownership | 100.00% | 100.00% | ||
Heng Fai Enterprises Pte. Ltd | ||||
Jurisdiction of incorporation or organization | Singapore | Singapore | ||
Ownership | 100.00% | 100.00% | ||
Global eHealth Limited | ||||
Jurisdiction of incorporation or organization | Hong Kong | Hong Kong | ||
Ownership | 100.00% | 100.00% | ||
Alset International Inc. (f.k.a Singapore eDevelopment Limited) | ||||
Jurisdiction of incorporation or organization | Singapore | Singapore | ||
Ownership | 51.04% | 65.40% | ||
Singapore Construction & Development Pte. Ltd. | ||||
Jurisdiction of incorporation or organization | Singapore | Singapore | ||
Ownership | 51.04% | 65.40% | ||
Art eStudio Pte. Ltd. | ||||
Jurisdiction of incorporation or organization | Singapore | Singapore | ||
Ownership | [1] | 26.03% | 33.36% | |
Singapore Construction Pte. Ltd. | ||||
Jurisdiction of incorporation or organization | Singapore | Singapore | ||
Ownership | 51.04% | 65.40% | ||
Global BioMedical Pte. Ltd. | ||||
Jurisdiction of incorporation or organization | Singapore | Singapore | ||
Ownership | 51.04% | 65.40% | ||
Alset Innovation Pte. Ltd. (f.k.a SeD Investment Pte. Ltd.) | ||||
Jurisdiction of incorporation or organization | Singapore | Singapore | ||
Ownership | 51.04% | 65.40% | ||
Health Wealth Happiness Pte. Ltd. | ||||
Jurisdiction of incorporation or organization | Singapore | Singapore | ||
Ownership | 51.04% | 65.40% | ||
iGalen International Inc. | ||||
Jurisdiction of incorporation or organization | United States of America | United States of America | ||
Ownership | [1] | 27.05% | 34.38% | |
iGalen Inc. (f.k.a iGalen USA LLC) | ||||
Jurisdiction of incorporation or organization | United States of America | United States of America | ||
Ownership | [1] | 27.05% | 34.38% | |
SeD Capital Pte. Ltd. | ||||
Jurisdiction of incorporation or organization | Singapore | Singapore | ||
Ownership | 51.04% | 65.40% | ||
LiquidValue Asset management Pte. Ltd. (f.k.a. Hengfai Asset Management Pte. Ltd.) | ||||
Jurisdiction of incorporation or organization | Singapore | Singapore | ||
Ownership | 41.85% | [1] | 53.60% | |
SeD Home Limited | ||||
Jurisdiction of incorporation or organization | Hong Kong | Hong Kong | ||
Ownership | 51.04% | 65.40% | ||
SeD Reits Management Pte. Ltd. | ||||
Jurisdiction of incorporation or organization | Singapore | Singapore | ||
Ownership | 51.04% | 65.40% | ||
Global TechFund of Fund Pte. Ltd. | ||||
Jurisdiction of incorporation or organization | Singapore | Singapore | ||
Ownership | 51.04% | 65.40% | ||
Singapore eChainLogistic Pte. Ltd. | ||||
Jurisdiction of incorporation or organization | Singapore | Singapore | ||
Ownership | 51.04% | 65.40% | ||
BMI Capital Partners International Limited | ||||
Jurisdiction of incorporation or organization | Hong Kong | Hong Kong | ||
Ownership | 51.04% | 65.40% | ||
SeD Perth Pty. Ltd. | ||||
Jurisdiction of incorporation or organization | Australia | Australia | ||
Ownership | 51.04% | 65.40% | ||
SeD Intelligent Home Inc. (f.k.a. SeD Home International, Inc.) | ||||
Jurisdiction of incorporation or organization | United States of America | United States of America | ||
Ownership | 51.04% | 65.40% | ||
LiquidValue Development Inc. (f.k.a. SeD Intelligent Home Inc.) | ||||
Jurisdiction of incorporation or organization | United States of America | United States of America | ||
Ownership | 51.03% | 65.39% | ||
Alset iHome Inc. (f.k.a. SeD Home & REITs Inc. and SeD Home, Inc.) | ||||
Jurisdiction of incorporation or organization | United States of America | United States of America | ||
Ownership | 51.03% | 65.39% | ||
SeD USA, LLC | ||||
Jurisdiction of incorporation or organization | United States of America | United States of America | ||
Ownership | 51.03% | 65.39% | ||
150 Black Oak GP, Inc. | ||||
Jurisdiction of incorporation or organization | United States of America | United States of America | ||
Ownership | 51.03% | 65.39% | ||
SeD Development USA Inc | ||||
Jurisdiction of incorporation or organization | United States of America | United States of America | ||
Ownership | 51.03% | 65.39% | ||
150 CCM Black Oak, Ltd. | ||||
Jurisdiction of incorporation or organization | United States of America | United States of America | ||
Ownership | 51.03% | 65.39% | ||
SeD Texas Home, LLC | ||||
Jurisdiction of incorporation or organization | United States of America | United States of America | ||
Ownership | 51.03% | 65.39% | ||
SeD Ballenger, LLC | ||||
Jurisdiction of incorporation or organization | United States of America | United States of America | ||
Ownership | 51.03% | 65.39% | ||
SeD Maryland Development LLC | ||||
Jurisdiction of incorporation or organization | United States of America | United States of America | ||
Ownership | 42.64% | [1] | 54.63% | |
SeD Development Management, LLC | ||||
Jurisdiction of incorporation or organization | United States of America | United States of America | ||
Ownership | 43.38% | [1] | 55.58% | |
SeD Builder, LLC | ||||
Jurisdiction of incorporation or organization | United States of America | United States of America | ||
Ownership | 51.03% | 65.39% | ||
HotApp Blockchain Inc. | ||||
Jurisdiction of incorporation or organization | United States of America | United States of America | ||
Ownership | 50.95% | 65.39% | ||
HotApps International Pte. Ltd. | ||||
Jurisdiction of incorporation or organization | Singapore | Singapore | ||
Ownership | 50.95% | 65.39% | ||
HotApp International Limited | ||||
Jurisdiction of incorporation or organization | Hong Kong | Hong Kong | ||
Ownership | 50.95% | 65.39% | ||
HWH International, Inc | ||||
Jurisdiction of incorporation or organization | United States of America | United States of America | ||
Ownership | 51.04% | 65.40% | ||
Health Wealth & Happiness Inc | ||||
Jurisdiction of incorporation or organization | United States of America | United States of America | ||
Ownership | 51.04% | 65.40% | ||
HWH Multi-Strategy Investment, Inc | ||||
Jurisdiction of incorporation or organization | United States of America | United States of America | ||
Ownership | 51.04% | 65.40% | ||
SeDHome Rental Inc | ||||
Jurisdiction of incorporation or organization | United States of America | United States of America | ||
Ownership | 51.03% | 65.39% | ||
SeD REIT Inc. | ||||
Jurisdiction of incorporation or organization | United States of America | United States of America | ||
Ownership | 51.03% | 65.39% | ||
Crypto Exchange Inc | ||||
Jurisdiction of incorporation or organization | United States of America | United States of America | ||
Ownership | 50.95% | 65.39% | ||
HWH World Inc. | ||||
Jurisdiction of incorporation or organization | United States of America | United States of America | ||
Ownership | 50.95% | 65.39% | ||
HWH World Pte. Ltd. | ||||
Jurisdiction of incorporation or organization | Singapore | Singapore | ||
Ownership | 50.95% | 65.39% | ||
UBeauty Limited | ||||
Jurisdiction of incorporation or organization | Hong Kong | Hong Kong | ||
Ownership | 51.04% | 65.40% | ||
WeBeauty Korea Inc | ||||
Jurisdiction of incorporation or organization | Korea | Korea | ||
Ownership | 51.04% | 65.40% | ||
HWH World Limited | ||||
Jurisdiction of incorporation or organization | Hong Kong | Hong Kong | ||
Ownership | 51.04% | 65.40% | ||
HWH World Inc. | ||||
Jurisdiction of incorporation or organization | Korea | |||
Ownership | 51.04% | 65.40% | ||
Alset BioHealth Pte. Ltd. | ||||
Jurisdiction of incorporation or organization | Korea | Singapore | ||
Ownership | 51.04% | 0.00% | ||
Alset Energy Pte. Ltd. | ||||
Jurisdiction of incorporation or organization | Singapore | Singapore | ||
Ownership | 51.04% | 0.00% | ||
Alset Payment Inc. | ||||
Jurisdiction of incorporation or organization | Singapore | United States of America | ||
Ownership | 51.04% | 0.00% | ||
Alset World Pte. Ltd. | ||||
Jurisdiction of incorporation or organization | United States of America | Singapore | ||
Ownership | 51.04% | 0.00% | ||
BioHealth Water Inc. | ||||
Jurisdiction of incorporation or organization | Singapore | United States of America | ||
Ownership | 51.04% | 0.00% | ||
Impact BioHealth Pte. Ltd. | ||||
Jurisdiction of incorporation or organization | United States of America | Singapore | ||
Ownership | 51.04% | 0.00% | ||
American Home REIT Inc. | ||||
Jurisdiction of incorporation or organization | Singapore | United States of America | ||
Ownership | 41.85% | [1] | 0.00% | |
Alset Solar Inc | ||||
Jurisdiction of incorporation or organization | United States of America | United States of America | ||
Ownership | 40.83% | [1] | 0.00% | |
[1] | Although the Company indirectly holds percentage of shares of these entities less than 50%, the subsidiaries of the Company directly hold more than 50% of shares of these entities, and therefore, they are still consolidated into the Company. |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) | 9 Months Ended |
Sep. 30, 2020 | |
Office and computer equipment | |
Remaining Useful Life | 3-5 years |
Furniture and fixtures | |
Remaining Useful Life | 3-5 years |
Vehicles | |
Remaining Useful Life | 10 years |
Leasehold Improvements | |
Remaining Useful Life | Remaining life of the lease |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | |||||
M&T escrow accounts | $ 4,106,497 | $ 4,106,497 | $ 4,229,149 | ||
National Australian Bank Limited account balance | 35,710 | 35,710 | 35,068 | ||
CCM Black Oak Ltd amoun on deposit | 0 | 0 | 90,394 | ||
Global Opportunity Fund receivable | 0 | 0 | 307,944 | ||
Convertible promissory note | 77,477 | 77,477 | $ 26,209 | ||
Advertising costs | $ 74,062 | $ 28,289 | $ 136,253 | $ 156,822 |
SEGMENTS (Details)
SEGMENTS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | $ 2,148,923 | $ 5,306,863 | $ 7,179,919 | $ 22,944,498 | ||
Cost of Sales | (1,616,377) | (4,130,484) | (5,609,303) | (19,177,800) | ||
Gross Margin | 1,570,616 | 3,766,698 | ||||
Operating Expenses | (4,613,889) | (8,628,054) | ||||
Operating Income (Loss) | (3,043,273) | (4,861,356) | ||||
Other Income (Expense) | (10,203,812) | 327,039 | ||||
Net Income (loss) before income tax | (13,247,085) | (4,534,317) | ||||
Cash and restricted cash | 12,989,476 | $ 11,413,896 | 12,989,476 | 11,413,896 | $ 7,330,996 | $ 5,508,198 |
Total assets | 101,474,030 | 101,474,030 | 35,872,780 | |||
Property Development | ||||||
Revenues | 7,148,786 | 21,509,197 | ||||
Cost of Sales | (5,603,164) | (18,819,865) | ||||
Gross Margin | 1,545,622 | 2,689,332 | ||||
Operating Expenses | (634,254) | (4,598,112) | ||||
Operating Income (Loss) | 911,368 | (1,908,780) | ||||
Other Income (Expense) | (2,646) | 34,433 | ||||
Net Income (loss) before income tax | 908,722 | (1,874,347) | ||||
Cash and restricted cash | 5,079,010 | 5,079,010 | 5,439,318 | |||
Total assets | 30,540,913 | 30,540,913 | 29,857,615 | |||
Digital Transformation Technology | ||||||
Revenues | 0 | 0 | ||||
Cost of Sales | 0 | 0 | ||||
Gross Margin | 0 | 0 | ||||
Operating Expenses | (87,972) | (193,959) | ||||
Operating Income (Loss) | (87,972) | (193,959) | ||||
Other Income (Expense) | 115 | 296,726 | ||||
Net Income (loss) before income tax | (87,857) | 102,767 | ||||
Cash and restricted cash | 62,422 | 62,422 | 55,752 | |||
Total assets | 162,524 | 162,524 | 155,854 | |||
BioHealth Business | ||||||
Revenues | 31,133 | 1,406,951 | ||||
Cost of Sales | (6,139) | (357,935) | ||||
Gross Margin | 24,994 | 1,049,016 | ||||
Operating Expenses | (388,083) | (1,780,026) | ||||
Operating Income (Loss) | (363,089) | (731,010) | ||||
Other Income (Expense) | (10,211,916) | 31,151 | ||||
Net Income (loss) before income tax | (10,575,005) | (699,859) | ||||
Cash and restricted cash | 1,386,513 | 1,386,513 | 388,670 | |||
Total assets | 61,572,898 | 61,572,898 | 948,931 | |||
Other | ||||||
Revenues | 0 | 28,350 | ||||
Cost of Sales | 0 | 0 | ||||
Gross Margin | 0 | 28,350 | ||||
Operating Expenses | (3,086,630) | (1,697,423) | ||||
Operating Income (Loss) | (3,086,630) | (1,669,073) | ||||
Other Income (Expense) | 11,123 | (4,874) | ||||
Net Income (loss) before income tax | (3,075,507) | (1,673,947) | ||||
Cash and restricted cash | 6,461,531 | 6,461,531 | 1,338,525 | |||
Total assets | 9,197,695 | 9,197,695 | 4,770,949 | |||
Discontinued Operations | ||||||
Revenues | 0 | 0 | ||||
Cost of Sales | 0 | 0 | ||||
Gross Margin | 0 | 0 | ||||
Operating Expenses | (416,950) | (358,534) | ||||
Operating Income (Loss) | (416,968) | (358,534) | ||||
Other Income (Expense) | (488) | (30,397) | ||||
Net Income (loss) before income tax | (417,438) | $ (388,931) | ||||
Cash and restricted cash | 0 | 0 | 108,731 | |||
Total assets | $ 0 | $ 0 | $ 139,431 |
REAL ESTATE ASSETS (Details)
REAL ESTATE ASSETS (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Other Real Estate, Foreclosed Assets, and Repossessed Assets [Abstract] | ||
Construction in progress | $ 12,298,889 | $ 9,601,364 |
Land held for development | 12,691,477 | 14,283,340 |
Total real estate assets | $ 24,990,366 | $ 23,884,704 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Equipment | $ 334,816 | $ 319,719 |
Accumulated Depreciation | (257,153) | (239,434) |
Property and Equipment | 77,663 | 80,285 |
Computer Equipment | ||
Equipment | 181,559 | 175,992 |
Furniture and fixtures | ||
Equipment | 62,328 | 52,798 |
Vehicles | ||
Equipment | $ 90,929 | $ 90,929 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 4,567 | $ 7,080 | $ 17,719 | $ 20,697 |
BUILDER DEPOSITS (Details Narra
BUILDER DEPOSITS (Details Narrative) - USD ($) | Dec. 31, 2020 | Sep. 30, 2020 |
Builder Deposits | ||
Deposit | $ 2,445,269 | $ 1,808,747 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Notes Payable | $ 847,797 | $ 157,105 |
Union Bank Loan | ||
Notes Payable | 0 | 0 |
M&T Bank Loan, Net of Debt Discount | ||
Notes Payable | 619,329 | 0 |
PPP Loan | ||
Notes Payable | 68,502 | 0 |
Australia Bank Loan | ||
Notes Payable | $ 159,966 | $ 157,105 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Notes Payable [Abstract] | ||
M&T loan balance | $ 670,281 | |
Origination and closing fees | 61,679 | |
Unamortized loan discount | $ 50,952 | $ 0 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) | 3 Months Ended | |||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | |
Beginning balance | $ 744,462 | $ 365,219 | $ 1,468,269 | $ 1,773,515 | $ 1,668,731 | $ 1,582,788 |
Other comprehensive income | 301,122 | 379,243 | (1,103,050) | (441,089) | 104,784 | 85,943 |
Ending balance | 1,045,584 | 744,462 | 365,219 | 1,332,426 | 1,773,515 | 1,668,731 |
Unrealized Gains and Losses on Security Investment | ||||||
Beginning balance | (59,981) | (68,128) | (59,888) | (12,076) | (12,098) | (23,779) |
Other comprehensive income | 14,865 | 8,147 | 8,240 | (37,099) | 22 | 11,681 |
Ending balance | (45,116) | (59,981) | (68,128) | (49,175) | (12,076) | (12,098) |
Foreign Currency Translation | ||||||
Beginning balance | 907,728 | 518,315 | 1,613,125 | 1,785,591 | 1,680,829 | 1,606,567 |
Other comprehensive income | 235,837 | 389,413 | (1,094,810) | (403,990) | 104,762 | 74,262 |
Ending balance | 1,143,565 | 907,728 | 518,315 | 1,381,601 | 1,785,591 | 1,680,829 |
Change In Minority Interest | ||||||
Beginning balance | (103,285) | (84,968) | (84,968) | 0 | 0 | 0 |
Other comprehensive income | 50,420 | (18,317) | 0 | 0 | 0 | 0 |
Ending balance | $ (52,865) | $ (103,285) | $ (84,968) | $ 0 | $ 0 | $ 0 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Assets | |||||
Total current assets | $ 0 | $ 0 | $ 139,431 | ||
Current liabilities | |||||
Total current liabilities | 0 | 0 | 7,021 | ||
Discontinued operations cash flows | |||||
Operating | (522,435) | $ (446,409) | |||
Investing | 0 | (36,000) | |||
Financing | 0 | 0 | |||
Hotapps Information Technology | |||||
Assets | |||||
Cash | 0 | 0 | 0 | ||
Deposit and other receivable | 0 | 0 | 0 | ||
Prepaid expense | |||||
Total current assets | 0 | 0 | 0 | ||
Fixed assets, net | 0 | 0 | 0 | ||
Total assets | 0 | 0 | 0 | ||
Current liabilities | |||||
Accounts payable and accrued expenses | 0 | 0 | 0 | ||
Total current liabilities | 0 | 0 | 0 | ||
Total liabilities | 0 | 0 | 0 | ||
Revenues | |||||
Project fee-others | 0 | 0 | 0 | 0 | |
Cost of revenues | 0 | 0 | 0 | 0 | |
Gross profit | 0 | 0 | 0 | 0 | |
Operating expenses: | |||||
Depreciation | 0 | 0 | 0 | 48 | |
Research & development | |||||
General and administrative | 0 | 0 | 0 | 3,662 | |
Total operating expenses | 0 | 0 | 0 | 3,710 | |
Other income (expenses): | |||||
Other expense | |||||
Other sundry income | 0 | 0 | 0 | 0 | |
Foreign exchange (loss) | 0 | 0 | 0 | (2) | |
Total other (expenses) income | 0 | 0 | 0 | (2) | |
Loss from discontinued operations | 0 | 0 | 0 | (3,712) | |
Discontinued operations cash flows | |||||
Operating | 0 | 24,493 | |||
Investing | 0 | 0 | |||
Financing | 0 | 0 | |||
Net change in cash | 0 | 24,493 | |||
Impact BioMedical Inc. | |||||
Assets | |||||
Cash | 0 | 0 | 108,731 | ||
Deposit and other receivable | |||||
Prepaid expense | 0 | 0 | 30,700 | ||
Total current assets | 0 | 0 | 30,700 | ||
Fixed assets, net | |||||
Total assets | 0 | 0 | 30,700 | ||
Current liabilities | |||||
Accounts payable and accrued expenses | 0 | 0 | 7,021 | ||
Total current liabilities | 0 | 0 | 7,021 | ||
Total liabilities | 0 | 0 | $ 7,021 | ||
Revenues | 0 | 0 | 0 | 0 | |
Project fee-others | |||||
Cost of revenues | |||||
Gross profit | |||||
Operating expenses: | |||||
Depreciation | |||||
Research & development | 45,617 | 79,457 | 246,915 | 260,671 | |
General and administrative | 10,280 | 31,648 | 170,035 | 94,153 | |
Total operating expenses | 55,897 | 111,105 | 416,950 | 354,824 | |
Other income (expenses): | |||||
Other expense | 138 | 17,449 | 488 | 30,395 | |
Other sundry income | |||||
Foreign exchange (loss) | |||||
Total other (expenses) income | 138 | 17,449 | 488 | 30,395 | |
Loss from discontinued operations | $ (56,053) | $ (128,554) | (417,438) | (385,219) | |
Discontinued operations cash flows | |||||
Operating | (522,435) | (470,902) | |||
Investing | 0 | (36,000) | |||
Financing | 0 | 0 | |||
Net change in cash | $ (522,435) | $ (506,902) |
INVESTMENTS MEASURED AT FAIR _3
INVESTMENTS MEASURED AT FAIR VALUE (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Investment securities - fair value option | $ 4,787,454 | $ 2,973,582 |
Investment securities - trading | 15,758 | 15,907 |
Convertible preferred stock | 54,864,632 | 0 |
Convertible note receivable | 77,477 | 26,209 |
Warrants - American Premium Water | 0 | 0 |
Warrants - AMRE | 0 | 0 |
Stock options - Vivacitas | 0 | 0 |
Total investment in securities at fair value | 59,745,321 | 3,015,698 |
Amount at Cost | ||
Assets | ||
Investment securities - fair value option | 3,457,056 | 3,457,056 |
Investment securities - trading | 16,016 | 16,016 |
Convertible preferred stock | 63,849,002 | 0 |
Convertible note receivable | 50,000 | 50,000 |
Warrants - American Premium Water | 0 | 0 |
Warrants - AMRE | 0 | 0 |
Stock options - Vivacitas | 0 | 0 |
Total investment in securities at fair value | 67,372,074 | 3,523,072 |
Level 1 | ||
Assets | ||
Investment securities - fair value option | 4,787,454 | 2,973,582 |
Investment securities - trading | 15,758 | 15,907 |
Convertible preferred stock | 0 | 0 |
Convertible note receivable | 0 | 0 |
Warrants - American Premium Water | 0 | 0 |
Warrants - AMRE | 0 | 0 |
Stock options - Vivacitas | 0 | 0 |
Total investment in securities at fair value | 4,803,212 | 2,989,489 |
Level 2 | ||
Assets | ||
Investment securities - fair value option | 0 | 0 |
Investment securities - trading | 0 | 0 |
Convertible preferred stock | 0 | 0 |
Convertible note receivable | 0 | 0 |
Warrants - American Premium Water | 0 | 0 |
Warrants - AMRE | 0 | 0 |
Stock options - Vivacitas | 0 | 0 |
Total investment in securities at fair value | 0 | 0 |
Level 3 | ||
Assets | ||
Investment securities - fair value option | 0 | 0 |
Investment securities - trading | 0 | 0 |
Convertible preferred stock | 54,864,632 | 0 |
Convertible note receivable | 77,477 | 26,209 |
Warrants - American Premium Water | 0 | 0 |
Warrants - AMRE | 0 | 0 |
Stock options - Vivacitas | 0 | 0 |
Total investment in securities at fair value | $ 54,942,109 | $ 26,209 |
INVESTMENTS MEASURED AT FAIR _4
INVESTMENTS MEASURED AT FAIR VALUE (Details 1) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | ||
Share price | |||
Shares | |||
Market value | $ 5,039,969 | $ 3,189,617 | |
Total Level 1 Equity Securities | |||
Share price | |||
Shares | |||
Market value | $ 4,803,213 | $ 2,989,489 | |
DSS (Related Party) | |||
Share price | $ 4.560 | $ .301 | |
Shares | 500,001 | [1] | 500,000 |
Market value | $ 2,280,005 | $ 150,500 | |
Valuation | Investment in Securities at Fair Value | Investment in Securities at Fair Value | |
AMBS (Related Party) | |||
Share price | $ .011 | $ .013 | |
Shares | 20,000,000 | 20,000,000 | |
Market value | $ 222,000 | $ 262,000 | |
Valuation | Investment in Securities at Fair Value | Investment in Securities at Fair Value | |
Holista (Related Party) | |||
Share price | $ .043 | $ .055 | |
Shares | 46,226,673 | 46,226,673 | |
Market value | $ 1,980,350 | $ 2,561,082 | |
Valuation | Investment in Securities at Fair Value | Investment in Securities at Fair Value | |
American Premium Water (Related Party) | |||
Share price | $ .003 | ||
Shares | 122,039,000 | ||
Market value | $ 305,100 | ||
Valuation | Investment in Securities at Fair Value | ||
Others | |||
Share price | |||
Shares | |||
Market value | $ 15,758 | $ 15,907 | |
Valuation | Investment in Securities at Fair Value | Investment in Securities at Fair Value | |
Vivacitas (Related Party) | |||
Share price | |||
Shares | 2,480,000 | 2,480,000 | |
Market value | $ 200,128 | $ 200,128 | |
Valuation | Investment in Securities at Cost | Investment in Securities at Cost | |
Nervotech | |||
Share price | |||
Shares | 1,666 | ||
Market value | $ 36,628 | ||
Valuation | Investment in Securities at Cost | ||
[1] | Ratio of 1-for-30 (the Reverse Split) was effective at 5:01 p.m. Eastern Time on May 7, 2020 (the Effective Time) |
INVESTMENTS MEASURED AT FAIR _5
INVESTMENTS MEASURED AT FAIR VALUE (Details 2) | 8 Months Ended | 9 Months Ended | 12 Months Ended | |
Aug. 21, 2020$ / shares | Sep. 30, 2020$ / shares | Dec. 31, 2019$ / shares | Dec. 31, 2020$ / shares | |
Stock price | ||||
DSS convertible preferred stock | ||||
Stock price | $ 6.88 | $ 4.52 | ||
Risk-free rate | 0.16% | 0.16% | ||
Annualized volatility | 60.00% | 60.00% | ||
Forecast horizon in years | 3 years | 3 years | ||
Trading steps per year | 52 | 52 | ||
Probability of call (annual) | 0.10 | .10 | ||
Sharing Services Convertible Note | ||||
Dividend yield | 0.00% | 0.00% | ||
Expected volatility | 221.69% | 159.88% | ||
Risk free interest rate | 0.13% | 1.61% | ||
Contractual term (in years) | 2 years 4 days | 2 years 9 months 4 days | ||
Exercise price | $ .15 | $ .15 |
INVESTMENTS MEASURED AT FAIR _6
INVESTMENTS MEASURED AT FAIR VALUE (Details 3) - USD ($) | 3 Months Ended | |||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | |
Investments, Fair Value Disclosure [Abstract] | ||||||
Fair value, beginning | $ 26,725 | $ 13,610 | $ 26,209 | $ 54,787 | $ 73,284 | $ 78,723 |
Gain during deconsolidation | 21,628 | |||||
Gain (loss) during period | (8,955,246) | 13,115 | (12,599) | (14,041) | (18,497) | (5,439) |
Acquisition of DSS preferred stock | 63,849,002 | |||||
Fair value, ending | $ 54,942,109 | $ 26,725 | $ 13,610 | $ 40,746 | $ 54,787 | $ 73,284 |
DIRECTORS AND EMPLOYEES' BENE_3
DIRECTORS AND EMPLOYEES' BENEFITS (Details) | 9 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of options outstanding, beginning | 1,061,333 |
Number of options granted | 0 |
Number of options exercised | 0 |
Number of options forfeited/cancelled/expired | 0 |
Number of options outstanding, ending | 1,061,333 |
Vested and exercisable | 1,061,333 |
Exercise price options outstanding, beginning | .09 |
Exercise price options granted | .00 |
Exercise price options exercised | .00 |
Exercise price options forfeited/cancelled | .00 |
Exercise price options outstanding, ending | .09 |
Exercise price options vested and exercisable | $ / shares | $ .09 |
Outstanding remaining contractual term, beginning | 4 years |
Outstanding remaining contractual term, ending | 3 years 3 months |
Remaining contractual term, vested and exercisable | 3 years 3 months |
Aggregate intrinsic value outstanding, beginning | $ | $ 0 |
Aggregate intrinsic value outstanding, ending | $ | 0 |
Aggregate intrinsic value, vested and exercisable | $ | $ 0 |