Document And Entity Information
Document And Entity Information | 12 Months Ended |
Dec. 31, 2018shares | |
Document And Entity Information [Abstract] | |
Entity Registrant Name | MDJM LTD |
Entity Central Index Key | 0001741534 |
Trading Symbol | mdjh |
Entity Current Reporting Status | Yes |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Entity Well-known Seasoned Issuer | No |
Entity Common Stock, Shares Outstanding | 11,621,459 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2018 |
Amendment Flag | false |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | FY |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Shell Company | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | |
Current Assets | |||
Cash and cash equivalents | $ 6,692,557 | $ 3,117,740 | |
Accounts receivable, net of allowance for doubtful accounts $49,963 and $201,647, respectively | 1,767,804 | 1,633,550 | |
Other receivables | 38,701 | 83,053 | |
Prepaid expenses | 235,642 | 299,666 | |
Prepaid income tax | 3,620 | ||
Total Current Assets | 8,738,324 | 5,134,009 | |
Property and Equipment, net | 21,302 | 34,067 | |
Other Assets | |||
Deferred tax assets | 135,471 | 217,402 | |
Total Other Assets | 135,471 | 217,402 | |
Total Assets | 8,895,097 | 5,385,478 | |
Current liabilities: | |||
Accounts payable and accrued liabilities | 575,087 | 473,685 | |
VAT and other taxes payable | 137,695 | 124,799 | |
Total current liabilities | 712,782 | 598,484 | |
Total liabilities | 712,782 | 598,484 | |
Equity: | |||
Ordinary shares: 50,000,000 shares authorized, par value: $0.001 per share, 11,621,459 and 10,380,000 shares issued as of December 31, 2018 and 2017, respectively | [1] | 11,621 | 10,380 |
Additional paid in capital | 6,664,295 | 2,562,057 | |
Statutory reserve | 232,542 | 232,542 | |
Retained earnings | 1,526,110 | 2,042,081 | |
Accumulated other comprehensive loss | (229,587) | (60,066) | |
Total MDJM Ltd stockholders' equity | 8,204,981 | 4,786,994 | |
Noncontrolling interest | (22,666) | ||
Total Equity | 8,182,315 | 4,786,994 | |
Total liabilities and Equity | $ 8,895,097 | $ 5,385,478 | |
[1] | The shares are presented on a retroactive basis to reflect the founder shares issuance. See Note 8. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts, accounts receivable | $ 49,963 | $ 201,647 |
Ordinary shares, shares authorized | 50,000,000 | 50,000,000 |
Ordinary shares, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Ordinary shares, shares issued | 11,621,459 | 10,380,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Income Statement [Abstract] | ||||
Revenue | $ 2,408,448 | $ 5,532,244 | $ 5,302,030 | |
Operating Expenses: | ||||
Selling expenses | 82,225 | 263,797 | 424,824 | |
Payroll, payroll taxes and others | 2,214,975 | 3,067,837 | 3,580,791 | |
Rent expenses | 141,959 | 115,615 | 111,708 | |
Depreciation and amortization | 12,575 | 7,232 | 5,590 | |
(Reduction) provision for doubtful accounts, net | (146,174) | 194,149 | ||
Other general and administrative | 667,267 | 293,931 | 305,810 | |
Total Operating Expenses | 2,972,827 | 3,942,561 | 4,428,723 | |
(Loss) Income from Operations | (564,379) | 1,589,683 | 873,307 | |
Other income (expense): | ||||
Government grants | 436,458 | |||
Interest income | 26,565 | 32,112 | 19,015 | |
Other expense | (58,241) | |||
Total other income (expense) | 26,565 | (26,129) | 455,473 | |
Income (loss) before income tax | (537,814) | 1,563,554 | 1,328,780 | |
Income tax | 0 | (396,552) | (332,230) | |
Net income (loss) | (537,814) | 1,167,002 | 996,550 | |
Net income (loss) attributable to noncontrolling interest | 21,843 | |||
Net income (loss) attributable to MDJM Ltd common shareholders | $ (515,971) | $ 1,167,002 | $ 996,550 | |
Net income (loss) attributable to MDJM Ltd common shareholders | $ (0.05) | $ 0.11 | $ 0.10 | |
Weighted-average shares outstanding, basic and diluted | [1],[2] | 10,400,408 | 10,380,000 | 10,380,000 |
Comprehensive income (loss): | ||||
Net Income (loss) | $ (537,814) | $ 1,167,002 | $ 996,550 | |
Other comprehensive income (loss), net of tax: | ||||
Change in foreign currency translation adjustments | (170,344) | 270,019 | (210,781) | |
Total other comprehensive income (loss) | (708,158) | 1,437,021 | 785,769 | |
Comprehensive income (loss) attributable to non-controlling interest | 823 | |||
Comprehensive income (loss) attributable to MDJM Ltd common shareholders | $ (707,335) | $ 1,437,021 | $ 785,769 | |
[1] | Prior to the formation of MDJM, VIE issued 10,380,000 ordinary shares to its shareholders. Each shareholder of VIE was expected to receive MDJM's share at one to one ratio. On January 26, 2018, MDJM issued 10,380,000 ordinary shares to entities controlled by the shareholders of Mingda Tianjin. All references to numbers of ordinary shares and per share amounts in the accompanying consolidated financial statements have been adjusted to reflect such issuance of shares on a retrospective basis from the earliest period presented. | |||
[2] | The shares are presented on a retroactive basis to reflect the founder shares issuance. See Note 8. |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) | Ordinary Shares | Additional Paid in Capital | Statutory Reserve | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest | Total | |
Balance at Dec. 31, 2015 | $ 10,380 | $ 2,535,561 | $ 606 | $ 110,465 | $ (119,304) | $ 2,537,708 | ||
Balance (shares) at Dec. 31, 2015 | [1] | 10,380,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of 80,000 ordinary shares of VIE for cash | 26,496 | 26,496 | ||||||
Comprehensive income (loss): | ||||||||
Net Income (loss) | 108,376 | 888,174 | 996,550 | |||||
Other comprehensive income (loss), net of tax: | ||||||||
Change in foreign currency translation adjustments | (210,781) | (210,781) | ||||||
Balance at Dec. 31, 2016 | $ 10,380 | 2,562,057 | 108,982 | 998,639 | (330,085) | $ 0 | 3,349,973 | |
Balance (shares) at Dec. 31, 2016 | [1] | 10,380,000 | ||||||
Comprehensive income (loss): | ||||||||
Net Income (loss) | 123,560 | 1,043,442 | 1,167,002 | |||||
Other comprehensive income (loss), net of tax: | ||||||||
Change in foreign currency translation adjustments | 270,019 | 270,019 | ||||||
Balance at Dec. 31, 2017 | $ 10,380 | 2,562,057 | 232,542 | 2,042,081 | (60,066) | 0 | 4,786,994 | |
Balance (shares) at Dec. 31, 2017 | [1] | 10,380,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Proceeds from initial public offering - December 26, 2018, net of offering costs of $2,103,816 | $ 1,241 | 4,102,238 | 4,103,479 | |||||
Proceeds from initial public offering - December 26, 2018, net of offering costs of $2,103,816 (shares) | 1,241,459 | |||||||
Comprehensive income (loss): | ||||||||
Net Income (loss) | (515,971) | (21,843) | (537,814) | |||||
Other comprehensive income (loss), net of tax: | ||||||||
Change in foreign currency translation adjustments | (169,521) | (823) | (170,344) | |||||
Balance at Dec. 31, 2018 | $ 11,621 | $ 6,664,295 | $ 232,542 | $ 1,526,110 | $ (229,587) | $ (22,666) | $ 8,182,315 | |
Balance (shares) at Dec. 31, 2018 | [1] | 11,621,459 | ||||||
[1] | The shares are presented on a retroactive basis to reflect the founder shares issuance. See Note 8. |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Equity (Parenthetical) | 12 Months Ended |
Dec. 31, 2016shares | |
Statement of Stockholders' Equity [Abstract] | |
Issuance ordinary shares of VIE for cash (in shares) | 80,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash Flows from Operating Activities: | |||
Net income (loss) | $ (537,814) | $ 1,167,002 | $ 996,550 |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | |||
Depreciation and amortization | 12,575 | 7,232 | 5,590 |
(Reduction) provision for doubtful accounts, net | (146,174) | 194,149 | |
Loss on disposal of assets | 1,213 | ||
Changes in operating assets and liabilities: | |||
(Increase) decrease in accounts receivables | (83,189) | 516,593 | (520,116) |
(Increase) decrease in other receivables | 41,441 | 103,603 | (69,312) |
(Increase) in prepaid expense | (150,273) | (297,392) | (19,184) |
(Increase) in prepaid income tax | (3,762) | ||
(Increase) decrease in deferred tax assets | 72,975 | 102,099 | (205,787) |
Increase (decrease) in accounts payable and accrued expenses | 131,876 | (430,286) | 309,566 |
Increase (decrease) in VAT and other tax payable | 18,843 | (50,753) | (2,167) |
Increase in other payable | 3,161 | ||
Net Cash (Used in) Provided by Operating Activities | (643,502) | 1,313,460 | 498,301 |
Cash Flows from Investing Activities: | |||
Purchase of office equipment and software | (1,215) | (19,659) | (18,283) |
Net Cash Used in Investing Activities | (1,215) | (19,659) | (18,283) |
Cash Flows from Financing Activities: | |||
Proceeds from initial public offering - December 26, 2018, net of offering costs of $2,103,816 | 4,103,479 | ||
Proceeds from issuance of shares | 27,692 | ||
Net Cash Provided by Financing Activities | 4,103,479 | 27,692 | |
Effect of exchange rate changes on cash and cash equivalents | 116,055 | 161,593 | (105,204) |
Net increase in cash and cash equivalents | 3,574,817 | 1,455,394 | 402,506 |
Cash and cash equivalents - beginning of the year | 3,117,740 | 1,662,346 | 1,259,840 |
Cash and cash equivalents - end of the year | 6,692,557 | 3,117,740 | 1,662,346 |
Cash paid for: | |||
Interest | 0 | 0 | 0 |
Income taxes | $ 271,817 | $ 294,454 | $ 538,017 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Statement of Cash Flows [Abstract] | |
Net offering costs | $ 2,103,816 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2018 | |
Organization And Description Of Business [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS Organization MDJM LTD (the “Company” or “MDJM”) was incorporated on January 26, 2018 under the laws of the Cayman Islands as an exempted company under the name of MDJLEAD LTD. Effective on May 7, 2018, the Company’s corporate name changed to MDJM LTD The Company through its subsidiaries and consolidated variable interest entity (“VIE”), is principally engaged in providing end-to-end services in the life cycle of a residential real estate project, including primary real estate agency services, real estate consulting services, and training and evaluation with respect to primary agency sales services in the People’s Republic of China (“PRC”). The Company or MDJM, its subsidiaries and consolidated VIE are also collectively referred to as the “Group”, or where appropriate, the terms the “Group”, “we”, “our, or “us” are also referred to as MDJM or the Company and its subsidiaries and the consolidated VIE as a whole. The Company’s subsidiaries and the consolidated VIE are also referred to as “Subsidiaries”. MDJCC Limited (“MDJH Hong Kong”) was incorporated on February 9, 2018 under the laws of Hong Kong. MDJM owned 100% interest of MDJH Hong Kong. Beijing Mingda Jiahe Technology Development Co. Ltd. (“Mingda Beijing”), was a limited liability company organized on March 9, 2018 under the laws of the PRC a wholly-foreign owned entity (“WFOE”) and 100% owned by MDJH Hong Kong. Mingda Beijing is also referred to as WFOE. Tianjin Mingda Jiahe Real Estate Co. Ltd. (“Mingda Tianjin” or “VIE”), was a limited liability company organized on September 25, 2002 under the laws of the PRC. The following table lists the wholly-owned subsidiaries and the consolidated VIE of the Company: Name of the Company Date of Place of Percentage of MDJCC Limited 2/9/2018 Hong Kong 100% Beijing MingdaJiahe Technology Development Co. Ltd 3/9/2018 PRC WFOE Tianjin Mingdajiahe Real Estate Corporation 9/25/2002 PRC VIE VIE Arrangements PRC regulations currently prohibit or restrict foreign ownership of companies that provide services in certain industrials. To comply with these regulations, on April 28, 2018, Mingda Beijing, a WFOE entered into a series of contractual arrangements with Mingda Tianjin, a VIE. The Agreements provide WFOE effective control over and the ability to receive substantially all of the economic benefits of its VIE. Agreements that Transfer Economic Benefits of the VIE to the Group On April 28, 2018, Mingda Beijing, the WFOE entered into an “Exclusive Business Cooperation Agreement” (“Business Agreement”) with Mingda Tianjin. Pursuant to the Business Agreement, Mingda Beijing, the WFOE will provide with a series of consulting and technical support services to Mingda Tianjin and are entitled to receive 100% of Mingda Tianjin’s net income after deduction of the required PRC statutory reserve. The service fee is paid annually or at any such time agreed by WFOE and Mingda Tianjin. The term of this Business Agreement is valid for ten years upon execution of the agreement and may be extended or terminated prior to the expiration date at will of Mingda Beijing. Unless expressly provided by this Business Agreement, without prior written consent of the WFOE, the Mingda Tianjin may not engage any third party to provide the services offered by the WFOE under this agreement. Agreements that Provide Effective Control over VIE On April 28, 2018, each of the shareholders of the Minda Tianjin has entered into an “Exclusive Call Option Agreement” (“Option Agreement”) with Mingda Beijing. Pursuant to the Option Agreements, each of the shareholders of the Mingda Tianjin has granted an irrevocable and unconditional option to the Mingda Beijing or their designees to acquire all or part of such shareholder’s equity interests in Mingda Tianjin at its sole discretion, to the extent as permitted by PRC laws and regulations then in effect. The consideration for such acquisition of all equity interests in the Mingda Tianjin will be equal to the registered capital of the Mingda Tianjin, and if PRC law requires the consideration to be greater than the registered capital, the consideration will be the minimum amount as permitted by PRC law. The term of this Option Agreement is valid for ten years upon execution of the agreement and may be extended prior to the expiration date at will of Mingda Beijing. On April 28, 2018, each of the shareholders of the Mingda Tianjin has also entered into an “Equity Pledge Agreement” (“Pledge Agreement”) with Mingda Beijing. Pursuant to which these shareholders pledged their respective equity interest in the Mingda Tianjin to guarantee the performance of the obligations of the VIE. Mingda Beijing, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. Pursuant to the Pledge Agreement, each shareholder of the Mingda Tianjin cannot transfer, sell, pledge, dispose of or otherwise create any new encumbrance on their respective equity interest in the Mingda Tianjin without the prior written consent of Mingda Beijing. The equity pledge right will expire when the termination of exclusive business cooperation and all service fees be paid. The equity pledges of the Mingda Tianjin have been registered with the relevant local branch of the State Administration for Industry and Commerce, or SAIC. Risks in relation to the VIE structure The Company believes that the Foreign Owned Subsidiaries’ contractual arrangements with the VIE are in compliance with the PRC law and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements and the interests of the shareholders of the VIE may diverge from that of the Company and that may potentially increase the risk that they would seek to act contrary to the contractual terms, for example by influencing the VIE not to pay the service fees when required to do so. The Company’s ability to control the VIE also depends on the power of attorney the Foreign Owned Subsidiaries have to vote on all matters requiring shareholder approval in the VIE. As noted above, the Company believes this power of attorney is legally enforceable but may not be as effective as direct equity ownership. In addition, if the legal structure and contractual arrangements were found to be in violation of any existing PRC laws and regulations, the Company may be subject to fines or other actions. The Company does not believe such actions would result in the liquidation or dissolution of the Company, the Foreign Owned Subsidiaries or the VIE. The Company, through its subsidiaries, its WFOE and through the contractual arrangements, has (1) the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and (2) the right to receive benefits from the VIE. Accordingly, the Company is the primary beneficiary of the VIE and has consolidated the financial results of the VIE. The accompanying consolidated financial statements present the historical financial position, results of operations and cash flows of Tianjin Mingdajiahe Real Estate Co. Ltd. and its subsidiaries, and adjusted for the effects of the corporate restructure as disclosed per above. Accordingly, the accompanying consolidated financial statements have been prepared as if the current corporate structure (“restructuring” or “reorganization”) had been in existence throughout the periods presented (see Note 8 for the 10,380,000 ordinary shares of MDJM issued on January 26, 2018 in connection with the reorganization and anticipation of the initial public offering (“IPO”) of the Company’s equity security). |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of consolidation The Company’s consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The accompanying consolidated financial statements include the financial statements of VIE, Mingda Tianjin and its subsidiaries and branch offices. All significant inter-company accounts and transactions have been eliminated on consolidation. The Group evaluates each of its interests in private companies to determine whether or not the investee is a VIE and, if so, whether the Group is the primary beneficiary of such VIE. In determining whether the Group is the primary beneficiary, the Group considers if the Group (1) has power to direct the activities that most significantly affects the economic performance of the VIE, and (2) receives the economic benefits of the VIE that could be significant to the VIE. If deemed the primary beneficiary, the Group consolidates the VIE. VIE, Mingda Tianjin, has the following branch offices and or subsidiaries that have minimal transactions since incorporation, which have been included in the accompanying consolidated financial statements: Name of the Subsidiaries Owned by VIEs Date of Place of Percentage Tianjin Mingdajiahe Real Estate Corporation Yangzhou Branch 10/18/2017 Yangzhou, China 100 % Tianjin Mingdajiahe Real Estate Corporation Suzhou Branch 10/13/2017 Suzhou, China 100 % Xi She (Tianjin) Business Management Co. Ltd. 10/20/2017 Tianjin, China 100 % Xi She (Tianjin) Wen Hua Chuan Mei Co Ltd. 7/25/2018 Tianjin, China 100 % Xishe Xianglin (Tianjin) Business Operation & Management Co. Ltd. 3/9/2018 Tianjin, China 51 % Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from such estimates. Significant accounting estimates reflected in the Group’s financial statements include useful lives and valuation of long-lived assets, allowance for doubtful accounts, assumptions related to the consolidation of entities in which the Group holds variable interests, valuation allowance on deferred tax. Reclassification of Financial Statement Accounts Certain balances in previously issued financial statements have been reclassified to be consistent with the current period presentation. Prepaid income tax in the amount of $166,990 at December 31, 2017 had been reclassified and included in the deferred tax assets in the accompanying consolidated financial statements. See Note 5, Income Tax and Deferred Tax Assets. Fair Value of Financial Instruments The Company follows the provisions of Accounting Standards Codification (“ ASC ASC 820 Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. The carrying amounts reported in the accompanying consolidated balance sheets for cash and cash equivalents, accounts receivable, other receivables, prepaid expenses, prepaid income tax, deferred tax assets, accounts payable and accrued liabilities, income tax payable and other taxes payable approximate their fair value based on the short-term maturity of these instruments. Cash and Cash Equivalents Cash and cash equivalents include cash on hand and all highly liquid investments with an original maturity of three months or less. The Company maintains cash and cash equivalents with various commercial banks within the PRC. The Company has not experienced any losses in the bank accounts and believes it is not exposed to any risks on its cash held in PRC banks. Property and Equipment, Net Property and equipment are carried at cost, less accumulated depreciation. Costs include any incremental costs that are directly attributable to the construction or acquisition of the item of property and equipment. Maintenance and repairs are expensed as incurred, while major maintenance and remodeling costs are capitalized if they extend the useful life of the asset. Depreciation is computed using the straight-line method over the estimated useful lives. When property and equipment are sold or otherwise disposed of, the cost and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is recognized in the results of operations. Classification Estimated Usefule Life Office Equipment and Fixtures 3 or 5 years Computers 3 or 5 years Software 10 years Vehicles 5 years Revenue Recognition The Group adopted ASC 606, Revenue from Contracts with Customers (“ASC 606”), from January 1, 2018. The adoption had no material impact on the Group’s in previous years’ retained earnings and the Group’s accompanying consolidated financial statements for the year ended December 31, 2018. The group determines revenue recognition through the following steps: (1), identification of the contract, or contracts, with a customer, (2), identification of the performance obligations in the contract, (3), determination of the transaction price, (4), allocation of the transaction price to the performance obligations in the contract; and (5), recognition of revenue when, or as, we satisfy a performance obligation. The commission revenue on underwriting sales is the major income source of the Group. Commission revenue from property brokerage is recognized when: (1) we have completed our performance obligation to sale properties per contract, (2), the property developer and the buyer complete a property sales transaction and the developer received full or partial amount of proceeds from buyer or banker if mortgaged, (3), the property developer grants confirmation to us to be able to invoice them per sales agreement. The Company did not handle any monetary transactions nor act as an escrow intermediary between the developer and the buyer. The Group recognizes revenue net of VAT taxes. Business Tax and Value Added Tax (“VAT”) The PRC government implemented a value-added tax reform pilot program, which replaced the business tax with value-added tax. Since May 2016, the changes from business tax to VAT are expanded to all other service sectors which used to be subject to business tax. The value-added tax rates applicable to our subsidiaries and consolidated variable interest entities of the Group is 6%. The Company will accrue VAT payable when the sales invoice is generated. Deferred Offering Costs Deferred offering costs consist principally of all direct offering costs incurred by the Company, such as underwriting, legal, accounting, consulting, printing and other registration related costs in connection with the initial public offering of the Company's ordinary shares ("IPO"). Such costs are deferred until the closing of the offering, at which time the deferred costs are offset against the offering proceeds. In the event the offering is unsuccessful or aborted, the costs will be expensed. Deferred offering costs of $2,103,816 was charged to additional paid-in capital in connection with our IPO with our first closing completed on December 26, 2018. Segment Information The Group uses “the management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Group’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Group’s reportable segments. All of the Group's operations are considered by the chief operating decision maker to be aggregated in one reportable operating segment. Currently, all of the Group’s customers are in the People’s Republic of China and all income is derived from commission-based service and minimal consulting and other services, which represented less than 1% of total revenue. Marketing and Advertising Expenses Marketing and advertising expenses consist primarily of marketing planning fees and advertisements expenses used for targeted property sales. The Group expenses all marketing and advertising costs as incurred and records these costs within “Selling expenses” on the consolidated statements of operations when incurred. The Group incurred marketing and advertising expenses of $2,889, $178,878 and $233,207 for the years ended December 31, 2018, 2017 and 2016, respectively. Income Taxes The Company is governed by the income tax laws of the PRC. Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities, and their reported amounts in the financial statements, net operating loss carry forwards and credits by applying enacted statutory tax rates applicable to future years when the reported amounts of the asset or liability are expected to be recovered or settled, respectively. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. The Group only recognizes tax liabilities related to uncertain tax positions when such positions are more likely than not of being sustained upon examination. For such positions, the amount of tax liabilities that the Group recognizes the largest amount of tax liabilities that is more than fifty percent likely of being sustained upon the ultimate settlement of such uncertain position. There were no such tax liabilities be recognized in the accompanying consolidated financial statements. The Group records interest and penalties as a component of income tax expense. There were no such interest and penalties as of and for the years ended December 31, 2018, 2017 and 2016. Non-Controlling Interest Non-controlling interest are classified as a separate line item in the equity section and disclosures in the Company’s consolidated financial statements have distinguished the interest of the Company from the interest of non-controlling interest holder, Xishe Xianglin (Tianjin) Business Operation & Management Co. Ltd.. Per Share Amounts The Company computes per share amounts in accordance with ASC Topic 260 “Earnings per Share 2018 2017 2016 Numerator for earnings per share: Net (loss) income attributable to the Company's common shareholders $ (515,971 ) $ 1,167,002 $ 996,550 Denominator for basic and diluted earnings per share: Basic weighted average common shares * 10,400,408 10,380,000 10,380,000 Per share amount Per share - basic and diluted $ (0.05 ) $ 0.11 $ 0.10 * Prior to the formation of MDJM, VIE issued 10,380,000 ordinary shares to its shareholders. Each shareholder of VIE was expected to receive MDJM's share at one to one ratio. On January 26, 2018, MDJM issued 10,380,000 ordinary shares to entities controlled by the shareholders of Mingda Tianjin. All references to numbers of ordinary shares and per share amounts in the accompanying consolidated financial statements have been adjusted to reflect such issuance of shares on a retrospective basis from the earliest period presented. Comprehensive Income The Company follows ASC 220-10, “Reporting Comprehensive Income” Foreign Currency Translation The functional currency of the Company is the Chinese Renminbi (“RMB”). The US Dollar (“US$”) is used as the reporting currency of the Group. Monetary assets and liabilities denominated in currencies other than the U.S. dollar are translated into U.S. dollar at the rates of exchange ruling at the balance sheet date. Equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses are translated using the average rate for the year Translation adjustments are reported as foreign currency translation adjustment and are shown as a separate component of other comprehensive income (loss) in the consolidated statements of changes in stockholders’ equity and comprehensive income. December 31, US$ Exchange Rate 2018 2017 2016 Year end RMB 6.8778 6.5075 6.9445 Annual average RMB 6.6187 6.7588 6.6444 The financial records of certain of the Company’s subsidiaries are maintained in local currencies other than the U.S. dollar, such as Renminbi (“RMB”), which are their functional currencies. Transactions in other currencies are recorded at the rates of exchange prevailing when the transactions occur. Transaction gains and losses are recognized in the consolidated statements of operations. There was no transaction gain and losses recorded in years ended December 31, 2018, 2017 and 2016. Concentration Risk The Company's operations are carried out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC's economy. The Company's operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. All of the Company’s cash is maintained with state-owned banks within the People’s Republic of China. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers and supersedes and replaces nearly all existing GAAP revenue recognition guidance, including industry-specific guidance. The authoritative guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The five steps are: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; and (v) recognize revenue when or as each performance obligation is satisfied. The authoritative guidance applies to all contracts with customers except those that are within the scope of other topics in the FASB ASC. The authoritative guidance requires significantly expanded disclosures about revenue recognition and was initially effective for fiscal years and the interim periods within these fiscal years beginning on or after December 15, 2016. In August 2015, the FASB issued ASU 2015-14 “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date.” This standard defers for one year the effective date of ASU 2014-09. The Group adopted ASC 606 from January 1, 2018. The adoption had no material impact on the Group’s in previous years’ retained earnings and the Group’s accompanying consolidated financial statements for the year ended December 31, 2018. In August 2016, the FASB issued ASU 2016-15, an update to ASC Topic 230, Statement of Cash Flows to provide guidance for areas where there is diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2017, with early adoption permitted. The adoption of this guidance had no material impact on our consolidated financial statements. On May 10, 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”), which clarifies the scope of modification accounting for share-based compensation arrangements by providing guidance on the types of changes to the terms and conditions of share-based compensation awards to which an entity would be required to apply modification accounting under ASC 718. ASU 2017-09 is effective for annual periods beginning after December 15, 2017, with early adoption permitted. The adoption of this guidance had no material impact on our consolidated financial statements. Recently Issued Accounting Pronouncements We consider the applicability and impact of all Accounting Standards Updates (“ASUs”). The ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position and/or results of operations. February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. This update requires an entity to recognize lease assets and lease liabilities on the balance sheet and to disclose key information about the entity’s leasing arrangements. ASU 2016-02 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2018, with early application permitted. A modified retrospective approach is required. The adoption of this authoritative guidance will have no material impact on our consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220). This update provides companies with the option to reclassify stranded tax effects caused by the 2017 Tax Cuts and Jobs Act, or the 2017 Tax Act, from accumulated other comprehensive income to retained earnings. This standard is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. We are currently evaluating the impact that the adoption of this standard will have on our consolidated financial statements and anticipate adopting the standard for the fiscal year ending December 31, 2019. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2019. The Group is currently in the process of evaluating the impact of the adoption of ASU 2016-13 on its consolidated financial statements. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Receivable, Net [Abstract] | |
ACCOUNTS RECEIVABLE | NOTE 3 – ACCOUNTS RECEIVABLE Accounts receivable and allowance for doubtful accounts consist of the following at December 31, 2018 and 2017: December 31, December 31, 2018 2017 Accounts receivable $ 1,817,767 $ 1,835,197 Allowance for doubtful accounts (49,963 ) (201,647 ) Accounts receivable, net $ 1,767,804 $ 1,633,550 Accounts receivables are primarily due from the customers - real estate developers and are recognized and carried at the amount billed to a customer, net of allowance for doubtful accounts, which is an estimate for credit losses based on a review of all outstanding amounts on a periodic basis. The Company maintains an allowance for doubtful accounts which required significant judgments by management. The Company establishes a provision for doubtful accounts receivable when there is objective evidence that the Company may not be able to collect the receivables when due. The allowance is based on management's best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. Based on customers’ credit, business, financial status, payment history and ongoing relationship, management makes conclusions on whether any balances outstanding at the end of each reporting period will be deemed uncollectible on an individual basis and on an aging trend analysis basis. Accounts receivable balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. As of December 31, 2018, we reserved $49,963 allowance for doubtful account, which was 20% of the accounts receivable from two customers due to the collectability. The account receivable balance from these two customers were $403,930 at December 31, 2018. We collected $154,117 from one of the two customers during the months of January and February 2019 and no additional amount collected since February 2019. As of December 31, 2017, we reserved $201,647 allowance for doubtful account, which was 20% of the accounts receivable balance from two customers due to the collectability. For the period from January 01, 2018 to January 31, 2019, $ 568,197 and $481,169 accounts receivable from these two customers have been collected. The company reduced allowance for doubtful accounts balance as of December 31, 2018 to reflect the subsequent collections. Major Customers During the year ended December 31, 2018, our top four customers represented approximately 76% of our total net revenues, with 28%, 25%, 12% and 11%, respectively, from Ge Diao Ping Yuan, Ping Yue Jian Nan, Zi Xi Tai and Ge Diao Song Jian. The accounts receivable from these four customers were $230,803, $62,783, $67,969 and $120,080, respectively, as of December 31, 2018 During the year ended December 31, 2017, our top four customers represented approximately 77% of our total net revenues, with 23%, 21%, 19% and 14%, respectively, from Binhai Land Purchase Co., Ltd, Tianjin Jingshang Property Co., Ltd., Tianjin Jiantai Real Estate Development Co., Ltd., and Tianjin Binhai New City Investment Co., Ltd., and the accounts receivable from these four customers were $469,640, $592,788, $22,557 and $196,982, respectively, as of December 31, 2017. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 4 – PROPERTY AND EQUIPMENT, NET Property and equipment, net consists of the following: December 31, December 31, 2018 2017 Office Equipment and Fixtures $ 50,224 $ 51,846 Software 17,465 18,459 Auto 32,636 34,493 Total Assets 100,325 104,798 Less accumulated depreciation (79,023 ) (70,731 ) Net Assets $ 21,302 $ 34,067 For the years ended December 31, 2018, 2017 and 2016, depreciation expense for property and equipment amounted to $12,575, $7,232 and $5,590, respectively . |
INCOME TAX AND DEFERRED TAX ASS
INCOME TAX AND DEFERRED TAX ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX AND DEFERRED TAX ASSETS | NOTE 5 – INCOME TAX AND DEFERRED TAX ASSETS The Company is not required to file United States Income Tax returns, since it has no United States presents. MDJM was incorporated under the laws of the Cayman Islands. Under the current laws of the Cayman Islands, the Company and its Cayman subsidiaries are not subject to tax on income or capital gain. Additionally, upon payments of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed. MDJH Hong Kong was incorporated under the laws of Hong Kong and is subject to the uniform tax rate of 16.5%. Under Hong Kong tax law, it is exempted from the Hong Kong income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on the remittance of dividends. MDJH Hong Kong did not have significant activities in Hong Kong in 2018. The Group conducts substantially all of its business through its subsidiaries and VIE, the operating entities located in the PRC and they are subject to PRC income taxes. The Group’s subsidiaries and VIE in the PRC are subject to a 25% standard tax rate in the years ended December 31, 2018, 2017 and 2016. The Group adopted ASC 740-10-25 Accounting for Uncertainty in Income Taxes and such adoption did not have any material impact on the accompanying consolidated financial statements. The Group through its Chinese subsidiaries and VIE is principally engaged in the business located in PRC and therefor, is subject to income taxes in the PRC. Tax regulations are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. All tax positions taken, or expected to be taken, continue to be more likely than not ultimately settled at the full amount claimed. The Company’s tax filings are subject to the PRC tax bureau’s examination for a period up to 5 years. The Company is not currently under any examination by the PRC tax bureau. On December 22, 2017, the Tax Cuts and Jobs Act (the TCJA), which significantly modified U.S. corporate income tax law, was signed into law by President Trump. The TCJA contains significant changes to corporate income taxation, including but not limited to the reduction of the corporate income tax rate from a top marginal rate of 35% to a flat rate of 21%, limitation of the tax deduction for interest expense to 30% of earnings (except for certain small businesses), limitation of the deduction for net operating losses to 80% of current year taxable income and generally eliminating net operating loss carrybacks, allowing net operating losses to carryforward without expiration, one-time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, elimination of U.S. tax on foreign earnings (subject to certain important exceptions), immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits (including changes to the orphan drug tax credit and changes to the deductibility of research and experimental expenditures that will be effective in the future). Notwithstanding the reduction in the corporate income tax rate, the overall impact of the new federal tax law is uncertain, including to what extent various states will conform to the newly enacted federal tax law. Deferred income tax assets are recognized for temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements, net operating loss carry forwards and credits. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided in accordance with the laws of the relevant taxing authorities. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in which temporary differences are expected to be reversed or settled. The effect on deferred tax assets and liabilities of changes in tax rates is recognized in the statement of comprehensive income in the period of the enactment of the change. Significant components of the Company’s deferred tax assets are as follows at December 31, 2018 and December 31, 2017: December 31, December 31, 2018 2017 Deferred tax items Allowance for doubtful accounts $ 49,963 $ 201,647 Accrued expenses per US GAAP 162,089 253,938 Income not recognized per US GAAP 64,153 414,023 Current year loss - Chinese Tax 265,680 - Total deferred items 541,885 869,608 Tax rate at 25 % 25 % Net Deferred Tax Assets $ 135,471 $ 217,402 A reconciliation of the Company’s effective tax rate as a percentage of income before taxes and Federal statutory rate for the years ended December 31, 2018 and 2017, respectively, is as follows: China 2018 2017 2016 US statutory tax rate 21.00 % 34.00 % 34.00 % Tax rate difference 4.00 % -9.00 % -9.00 % Changes in valuation allowance -25.00 % 0.00 % 0.00 % Effective rate 0.00 % 25.00 % 25.00 % |
ACCOUNTS PAYABLE AND ACCRUED LI
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | NOTE 6 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities consist of the following as of December 31, 2018 and 2017: 2018 2017 Payroll and social security payable $ 334,734 $ 163,397 Bonus payable 162,089 307,338 Other payables 78,264 2,950 Total Accounts Payable and Accrued Liabilities $ 575,087 $ 473,685 |
VAT AND OTHER TAXES PAYABLE
VAT AND OTHER TAXES PAYABLE | 12 Months Ended |
Dec. 31, 2018 | |
Vat And Other Taxes Payable [Abstract] | |
VAT AND OTHER TAXES PAYABLE | NOTE 7 – VAT AND OTHER TAXES PAYABLE VAT and other taxes payable consist of the following as of December 31, 2018 and 2017: 2018 2017 VAT payable $ 120,305 $ 105,623 Additions and fees 15,114 5,912 Other taxes 2,276 13,264 Total Other Taxes Payable $ 137,695 $ 124,799 In May of 2016, the Business Tax has been incorporated into Value Added Tax in China, which means there will be no more business or sales tax and accordingly some business operations previously taxed in the name of business tax will be taxed in the manner of VAT thereafter. The Company is subject to 5% of VAT for all of its commission income. Other additions and fees payable referred to urban maintenance and construction tax payable, 7% of VAT tax paid; additional education tax payable, 3% of VAT tax paid; and local education tax payable 2% of VAT tax paid, Withholding taxes payable referred to individual income tax payable and social security taxes payable. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 8 – STOCKHOLDERS’ EQUITY Ordinary Shares The Company is authorized to issue up to 50,000,000 shares of ordinary share, par value $0.001 per share. Prior to the formation of the Company, its VIE, Mingda Tianjin issued 10,380,000 founders’ shares to its shareholders. Mr. Siping Xu, chief executive officer, and chairman is currently owned 10,200,000 shares, or 98.27% of outstanding ordinary shares. In connection with the corporate restructuring and anticipation of the IPO of the Company’s equity security, each shareholder of VIE received MDJM's ordinary share at one to one ratio. On January 26, 2018, MDJM issued 10,380,000 ordinary shares to entities controlled by the shareholders of Mingda Tianjin. All references to the numbers of ordinary shares and per share amounts in the accompanying consolidated financial statements have been adjusted to reflect the issuance of 10,380,000 shares on a retrospective basis as if such shares were issued and outstanding throughout the periods presented. Pursuant to a registration statement filed with the Securities and Exchange Commission (“SEC”) and was declared effective by the SEC on November 13, 2018, the initial public offering of the common shares of the Company was closed on December 26, 2018 for its first closing. Total of 1,241,459 shares of ordinary share were sold at a price of $5 per share to the public. The Company received total of $6,207,295 in gross proceeds. In connection with this public offering, the Company incurred direct offering costs of $2,103,816, which included audit, legal, consulting, commission and other expenses. Per ASC 505, the Company classified these direct offering costs in the equity section to offset additional paid in capital. Underwriter Warrants Pursuant to the IPO Agreement, the Company agreed to grant the underwriter, Network 1 Financial Securities, Inc. (“NETW”) underwriter warrants, which is equal to 10% of the total number of shares of the Company’s ordinary shares being sold in the IPO, at the closing of IPO. The underwriter’s warrant will be non-exercisable for six months after the closing of the offering and will expire five years after the effective date. The underwriter’s will be execrable at a price equal to 125% of $5, the price of the share sold in the IPO, the public offering price, the underwriter’s warrants shall not be redeemable. The underwriter’s warrants will provide for cashless exercise and will contain provisions for one demand registration of the sale of the underlying shares of ordinary stock at the Company’s expense and unlimited “piggyback” registration rights for a period of five years after the closing at the Company’s expense. The Company sold 1,241,459 and 19,361 shares of ordinary shares at the closings of its IPO on December 26, 2018 and January 4, 2019, respectively. Total of 126,082 underwriter warrants were issued on January 4, 2019. |
STATUTORY RESERVE
STATUTORY RESERVE | 12 Months Ended |
Dec. 31, 2018 | |
Statutory Reserve [Abstract] | |
STATUTORY RESERVE | NOTE 9 - STATUTORY RESERVE Pursuant to the laws applicable to the PRC, PRC entities must make appropriations from after-tax profit to the non-distributable “statutory surplus reserve fund”. Subject to certain cumulative limits, the “statutory surplus reserve fund” requires annual appropriations of 10% of after-tax profit until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles generally accepted in the PRC (“PRC GAAP”) at each year-end). The statutory surplus reserve fund is non-discretionary other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of shares currently held by them, provided that the remaining statutory surplus reserve balance after such issuance is not less than 25% of the registered capital before the conversion. The statutory reserve of Mingda Tianjin amounted to $232,542 and $232,542 as of December 31, 2018 and 2017, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 10 - COMMITMENTS AND CONTINGENCIES Country Risk As the Group's principal operations are conducted currently in the PRC, it is subject to considerations and risks not typically associated with companies in North America and Western Europe. These risks include, among others, risks associated with the political, economic and legal environments and foreign currency exchange limitations encountered in the PRC. The Group's results of operations may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, among other things. In addition, all of the Group's transactions in the PRC are denominated in RMB, which must be converted into other currencies before remittance from the PRC. Both conversion of RMB into foreign currencies and remittance of foreign currencies abroad require approval of the PRC government. Lease Commitments The Group entered several lease agreements for office spaces located at Tianjin and Yangzhou city in China. Total monthly rent payable is RMB 66,051, or $9,604 per month under operating leases as of December 31, 2018. The detail of each respective lease is summarized as following: Address Location Usage From To Rent / Mo Rent / Mo 1 #36 N. Sports Institute Tianjin Office 10/1/2016 9/30/2021 ¥ 1,100 $ 160 2 Tianjing Sandun Center Tianjin Office 1/1/2019 12/31/2023 61,251 8,906 3 Xiang Yi Garden 6-406 Suzhou Office 9/25/2018 9/24/2019 3,700 538 ¥ 66,051 $ 9,604 As of December 31, 2018, the future minimum rent payable under non-cancelable operating leases were: For the years ended Rental amount 2019 $ 113,634 2020 108,792 2021 108,312 2022 106,872 2023 106,872 Total $ 544,482 For the years ended December 31, 2018, 2017 and 2016, total rent expense was $118,775, $98,995 and $92,884, respectively. Property management and utility expenses were $23,184, $16,620 and $18,824, in 2018, 2017 and 2016, respectively. Service Contract On July 16, 2018, the Company signed a two-years Investor Relations Agreement (“IR Agreement”) with Ascent Investor Relations Inc (“Ascent”). Pursuant to the IR Agreement, Ascent will act as a inventor counsel and provide related services to MDJM from July 16, 2018 to July 15, 2020. As a consideration, the Company will pay $4,140 per month to Ascent before listed in the market of Nasdaq and $7,820 per month after listed in the market of Nasdaq. Either party may terminate the Agreement by providing a written notice of termination for any reason at any time during the second year of the IR Agreement. On September 6, 2018, the Company signed an Initial Public Offering Agreement (“IPO Agreement”) with Network 1 Financial Securities, Inc. (“NETW”). Pursuant to the IPO Agreement, the Company engaged NETW as the Company’s exclusive lead or managing underwriter and/or book runner and investment banker in connection with the sale of at least of $6,000,000 worth of the Company’s ordinary shares. The Company agrees to pay NETW an underwriting discount or spread of seven percent (7%) of the gross proceeds from investors introduced by NETW and five percent (5%) of the gross proceeds from investors introduced by NETW. NETW shall be entitled to a corporate finance fee equal to two percent (2%) of the gross proceeds of the offering. The Company also agreed to reimburse NETW up to $75,000 out of pocket expenses related to the offering. The IPO agreement is to expire on September 6, 2019. Underwriter Warrants Pursuant to the IPO Agreement, the Company agreed to grant NETW underwriter warrants, which is equal to 10% of the total number of shares of the Company’s ordinary shares being sold in the IPO, at the closing of IPO. The underwriter’s warrant will be non-exercisable for six months after the closing of the offering and will expire five years after the effective date. The underwriter’s will be execrable at a price equal to 125% of $5, the price of the share sold in the IPO, the public offering price, the underwriter’s warrants shall not be redeemable. The underwriter’s warrants will provide for cashless exercise and will contain provisions for one demand registration of the sale of the underlying shares of ordinary stock at the Company’s expense and unlimited “piggyback” registration rights for a period of five years after the closing at the Company’s expense. The Company sold 1,241,459 and 19,361 shares of ordinary shares at the closings of its IPO on December 26, 2018 and January 4, 2019, respectively. Total of 126,082 underwriter warrants were issued on January 4, 2019. Legal Proceeding Except for the following disclosure, we are not currently a party to any litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business, operating results, cash flows or financial condition. On January 3, 2018, Mingda Tianjin filed a civil complaint in Jizhou District People's Court, Tianjin City (the “Jizhou Court”), alleging a breach of contract against Tianjin Huacheng Century Investment Co. Ltd. (the “Defendant’). Mingda Tianjin and the Defendant entered into a Sales Agency Service Contract on May 1, 2014, as supplemented on November 23, 2015, pursuant to which Mingda Tianjin was expected to provide sales agency services to the Defendant for real estate projects developed by the Defendant. Mingda Tianjin stated that it has performed its duty fully in accordance with the Sales Agency Service Contract and its accompanying agreements signed by both parties. However, since November 2015, the Defendant has defaulted on sales agency fees and retention fees earned by Mingda Tianjin pursuant to the Sales Agency Service Contract, for an aggregate amount of RMB2,792,854, approximately $429,700. Despite Mingda Tianjin’s repeated efforts to demand payment from the Defendant of the outstanding agency sales fees and retention fees, the Defendant had failed to make the relevant payments. Mingda Tianjin then sought relief from the Jizhou Court for the following claims, (a) for the Defendant to pay to Mingda Tianjin’s the accrued sales agency fees, retention fees and loss due to overdue payment in the aggregate of RMB2,792,854 approximately $429,670, and (b) for the Defendant to be responsible for the relevant litigation fees. Mingda Tianjin and the Defendant reached a civil mediation agreement as approved by the Jizhou Court by agreeing that the defendant will pay Mingda Tianjin the sales agency fee by installments, with the first installment of RMB 500,000, approximately $76,900 due by or before February 9, 2018, the second installment of RMB1,146,427, approximately $176,400 due by or before October 31, 2018, and the third installment of RMB1,146,427, approximately $176,400 due by or before December 31, 2018. Any delay in payment of any of the three installment will be considered a default and all outstanding installment payments shall be automatically accelerated and due immediately, with Mingda Tianjin’s option to enforce all outstanding payments by the Defendant in the Jizhou Court. Mingda Tianjin agreed to be responsible for the litigation fees for both parties in connection with this claim, in the amount of RMB15,604, approximately $2,400. Mingda Tianjin retains the right to appeal the mediation agreement. The first installment of $76,900, which was received in 2018. The Company did not receive the second and third installments as scheduled in the remaining year of 2018. On January 9, 2019, the Company reached a settlement with the Defendant. The Defendant agreed to pay 90% of balance due, which equivalent to RMB 2,063,567, approximately $300,033 by January 10, 2019. The Company agreed to close the case if the fund was paid on time. The Company received total of $300,033 (2,063,568 RMB) on January 10, 2019 and case was closed. |
RESTRICTED NET ASSETS OR PARENT
RESTRICTED NET ASSETS OR PARENT COMPANY'S CONDENSED FINANCIAL STATEMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
RESTRICTED NET ASSETS OR PARENT COMPANY'S CONDENSED FINANCIAL STATEMENTS | NOTE 11 – RESTRICTED NET ASSETS OR PARENT COMPANY’S CONDENSED FINANCIAL STATEMENTS MDJM LIMITED and BEIJING MINGDA JIAHE TECHNOLOGY DEVELOPMENT CO. LTD (WFOE) CONDENSED BALANCE SHEETS As of December 31, 2018 Combined MDJM WFOE Asset Cash $ 5,626,079 $ 5,626,079 $ - Total Asset $ 5,626,079 $ 5,626,079 $ - Liabilities and Equity Other liability Due to subsidiaries $ 1,568,300 $ 1,565,174 $ 3,126 Common stock 1,241 1,241 - Additional paid in capital 4,102,238 4,102,238 - Retained deficit (45,700 ) (42,574 ) (3,126 ) Total Labilities and Equity $ 5,626,079 $ 5,626,079 $ - The parent Company, MDJM LTD and Mingda Beijing a WFOE had no significant transactions in 2018. MDJM incurred $42,574 start-up expenditures in 2018. Mingda Beijing incurred $3,126 start-up expenditures in 2018. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 12 – RELATED PARTY TRANSACTIONS On January 26, 2018, the Company issued 10,380,000 Ordinary Shares to our Beneficial Owners, including some of our executive officers and directors indirectly, in connection with entering into the VIE contractual arrangements, in a private transaction under the Cayman Island laws, with 10,200,000 Ordinary Shares issued to MDJM LTD, an entity 100% controlled by Siping Xu, our CEO, chairman of the board and director, 10,000 Ordinary Shares issued to CANDM LTD, an entity 100% controlled by Yang Li, our director, and 10,000 Ordinary Shares issued to MNCC LTD, an entity 100% controlled by Mengnan Wang, our CFO. The MDJM LTD conducts real estate services business through Mingda Tianjin, a VIE that we control through a series of contractual arrangements between our PRC subsidiary WFOE, Mingda Tianjin and its shareholders including but not limited to our principal shareholder, Mr. Siping Xu. Such contractual arrangements provide MDJM LTD (i) the power to control Mingda Tianjin, (ii) the exposure or rights to variable returns from our involvement with Mingda Tianjin, and (iii) the ability to affect those returns through use of our power over Mingda Tianjin to affect the amount of our returns. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13 – SUBSEQUENT EVENTS On January 4, 2019, the Company completed the second closing of its initial public offering of the Company’s ordinary shares. Total of 19,361 shares of ordinary shares were sold at the price of $5 per share at the second closing. The total proceeds of this second closing of the IPO were $96,805. There was total of $26,399 direct cost in connection with the second closing of IPO. On January 9, 2019, the Company reached a settlement with the Tianjin Huacheng Century Investment Co. Ltd, the Defendant. The Defendant agreed to pay 90% of balance due, which equivalent to RMB 2,063,567, approximately $300,033 by January 10, 2019. The Company agreed to close the case if the fund was paid on time. The Company received total of $300,033 (2,063,568 RMB) on January 10, 2019 and case was closed. The Company issued total of 126,082 underwriter warrants to its Underwriter on January 4, 2019, see Note 8. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of consolidation | Basis of consolidation The Company’s consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The accompanying consolidated financial statements include the financial statements of VIE, Mingda Tianjin and its subsidiaries and branch offices. All significant inter-company accounts and transactions have been eliminated on consolidation. The Group evaluates each of its interests in private companies to determine whether or not the investee is a VIE and, if so, whether the Group is the primary beneficiary of such VIE. In determining whether the Group is the primary beneficiary, the Group considers if the Group (1) has power to direct the activities that most significantly affects the economic performance of the VIE, and (2) receives the economic benefits of the VIE that could be significant to the VIE. If deemed the primary beneficiary, the Group consolidates the VIE. VIE, Mingda Tianjin, has the following branch offices and or subsidiaries that have minimal transactions since incorporation, which have been included in the accompanying consolidated financial statements: Name of the Subsidiaries Owned by VIEs Date of Place of Percentage Tianjin Mingdajiahe Real Estate Corporation Yangzhou Branch 10/18/2017 Yangzhou, China 100 % Tianjin Mingdajiahe Real Estate Corporation Suzhou Branch 10/13/2017 Suzhou, China 100 % Xi She (Tianjin) Business Management Co. Ltd. 10/20/2017 Tianjin, China 100 % Xi She (Tianjin) Wen Hua Chuan Mei Co Ltd. 7/25/2018 Tianjin, China 100 % Xishe Xianglin (Tianjin) Business Operation & Management Co. Ltd. 3/9/2018 Tianjin, China 51 % |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from such estimates. Significant accounting estimates reflected in the Group’s financial statements include useful lives and valuation of long-lived assets, allowance for doubtful accounts, assumptions related to the consolidation of entities in which the Group holds variable interests, valuation allowance on deferred tax. |
Reclassification of Financial Statement Accounts | Reclassification of Financial Statement Accounts Certain balances in previously issued financial statements have been reclassified to be consistent with the current period presentation. Prepaid income tax in the amount of $166,990 at December 31, 2017 had been reclassified and included in the deferred tax assets in the accompanying consolidated financial statements. See Note 5, Income Tax and Deferred Tax Assets. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company follows the provisions of Accounting Standards Codification (“ ASC ASC 820 Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. The carrying amounts reported in the accompanying consolidated balance sheets for cash and cash equivalents, accounts receivable, other receivables, prepaid expenses, prepaid income tax, deferred tax assets, accounts payable and accrued liabilities, income tax payable and other taxes payable approximate their fair value based on the short-term maturity of these instruments. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on hand and all highly liquid investments with an original maturity of three months or less. The Company maintains cash and cash equivalents with various commercial banks within the PRC. The Company has not experienced any losses in the bank accounts and believes it is not exposed to any risks on its cash held in PRC banks. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are carried at cost, less accumulated depreciation. Costs include any incremental costs that are directly attributable to the construction or acquisition of the item of property and equipment. Maintenance and repairs are expensed as incurred, while major maintenance and remodeling costs are capitalized if they extend the useful life of the asset. Depreciation is computed using the straight-line method over the estimated useful lives. When property and equipment are sold or otherwise disposed of, the cost and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is recognized in the results of operations. Classification Estimated Usefule Life Office Equipment and Fixtures 3 or 5 years Computers 3 years Software 10 years Vehicles 5 years |
Revenue Recognition | Revenue Recognition The Group adopted ASC 606, Revenue from Contracts with Customers (“ASC 606”), from January 1, 2018. The adoption had no material impact on the Group’s in previous years’ retained earnings and the Group’s accompanying consolidated financial statements for the year ended December 31, 2018. The group determines revenue recognition through the following steps: (1), identification of the contract, or contracts, with a customer, (2), identification of the performance obligations in the contract, (3), determination of the transaction price, (4), allocation of the transaction price to the performance obligations in the contract; and (5), recognition of revenue when, or as, we satisfy a performance obligation. The commission revenue on underwriting sales is the major income source of the Group. Commission revenue from property brokerage is recognized when: (1) we have completed our performance obligation to sale properties per contract, (2), the property developer and the buyer complete a property sales transaction and the developer received full or partial amount of proceeds from buyer or banker if mortgaged, (3), the property developer grants confirmation to us to be able to invoice them per sales agreement. The Company did not handle any monetary transactions nor act as an escrow intermediary between the developer and the buyer. The Group recognizes revenue net of VAT taxes. |
Business Tax and Value Added Tax ("VAT") | Business Tax and Value Added Tax (“VAT”) The PRC government implemented a value-added tax reform pilot program, which replaced the business tax with value-added tax. Since May 2016, the changes from business tax to VAT are expanded to all other service sectors which used to be subject to business tax. The value-added tax rates applicable to our subsidiaries and consolidated variable interest entities of the Group ranged from 3% to 6%. The Company will accrue VAT payable when the sales invoice is generated. |
Deferred Offering Costs | Deferred Offering Costs Deferred offering costs consist principally of all direct offering costs incurred by the Company, such as underwriting, legal, accounting, consulting, printing and other registration related costs in connection with the initial public offering of the Company's ordinary shares ("IPO"). Such costs are deferred until the closing of the offering, at which time the deferred costs are offset against the offering proceeds. In the event the offering is unsuccessful or aborted, the costs will be expensed. Deferred offering costs of $2,103,816 was charged to additional paid-in capital in connection with our IPO with our first closing completed on December 26, 2018. |
Segment Information | Segment Information The Group uses “the management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Group’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Group’s reportable segments. All of the Group's operations are considered by the chief operating decision maker to be aggregated in one reportable operating segment. Currently, all of the Group’s customers are in the People’s Republic of China and all income is derived from commission-based service and minimal consulting and other services, which represented less than 1% of total revenue. |
Marketing and Advertising Expenses | Marketing and Advertising Expenses Marketing and advertising expenses consist primarily of marketing planning fees and advertisements expenses used for targeted property sales. The Group expenses all marketing and advertising costs as incurred and records these costs within “Selling expenses” on the consolidated statements of operations when incurred. The Group incurred marketing and advertising expenses of $2,889, $178,878 and $233,207 for the years ended December 31, 2018, 2017 and 2016, respectively. |
Income Taxes | Income Taxes The Company is governed by the income tax laws of the PRC. Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities, and their reported amounts in the financial statements, net operating loss carry forwards and credits by applying enacted statutory tax rates applicable to future years when the reported amounts of the asset or liability are expected to be recovered or settled, respectively. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. The Group only recognizes tax liabilities related to uncertain tax positions when such positions are more likely than not of being sustained upon examination. For such positions, the amount of tax liabilities that the Group recognizes the largest amount of tax liabilities that is more than fifty percent likely of being sustained upon the ultimate settlement of such uncertain position. There were no such tax liabilities be recognized in the accompanying consolidated financial statements. The Group records interest and penalties as a component of income tax expense. There were no such interest and penalties as of and for the years ended December 31, 2018, 2017 and 2016. |
Non-Controlling Interest | Non-Controlling Interest Non-controlling interest are classified as a separate line item in the equity section and disclosures in the Company’s consolidated financial statements have distinguished the interest of the Company from the interest of non-controlling interest holder, Xishe Xianglin (Tianjin) Business Operation & Management Co. Ltd.. |
Per Share Amounts | Per Share Amounts The Company computes per share amounts in accordance with ASC Topic 260 “Earnings per Share 2018 2017 2016 Numerator for earnings per share: Net (loss) income attributable to the Company's common shareholders $ (515,971 ) $ 1,167,002 $ 996,550 Denominator for basic and diluted earnings per share: Basic weighted average common shares * 10,400,408 10,380,000 10,380,000 Per share amount Per share - basic and diluted $ (0.05 ) $ 0.11 $ 0.10 * Prior to the formation of MDJM, VIE issued 10,380,000 ordinary shares to its shareholders. Each shareholder of VIE was expected to receive MDJM's share at one to one ratio. On January 26, 2018, MDJM issued 10,380,000 ordinary shares to entities controlled by the shareholders of Mingda Tianjin. All references to numbers of ordinary shares and per share amounts in the accompanying consolidated financial statements have been adjusted to reflect such issuance of shares on a retrospective basis from the earliest period presented. |
Comprehensive Income | Comprehensive Income The Company follows ASC 220-10, “Reporting Comprehensive Income” |
Foreign Currency Translation | Foreign Currency Translation The functional currency of the Company is the Chinese Renminbi (“RMB”). The US Dollar (“US$”) is used as the reporting currency of the Group. Monetary assets and liabilities denominated in currencies other than the U.S. dollar are translated into U.S. dollar at the rates of exchange ruling at the balance sheet date. Equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses are translated using the average rate for the year Translation adjustments are reported as foreign currency translation adjustment and are shown as a separate component of other comprehensive income (loss) in the consolidated statements of changes in stockholders’ equity and comprehensive income. December 31, US$ Exchange Rate 2018 2017 2016 Year end RMB 6.8778 6.5075 6.9445 Annual average RMB 6.6187 6.7588 6.6444 The financial records of certain of the Company’s subsidiaries are maintained in local currencies other than the U.S. dollar, such as Renminbi (“RMB”), which are their functional currencies. Transactions in other currencies are recorded at the rates of exchange prevailing when the transactions occur. Transaction gains and losses are recognized in the consolidated statements of operations. There was no transaction gain and losses recorded in years ended December 31, 2018, 2017 and 2016. |
Concentration Risk | Concentration Risk The Company's operations are carried out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC's economy. The Company's operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. All of the Company’s cash is maintained with state-owned banks within the People’s Republic of China. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers and supersedes and replaces nearly all existing GAAP revenue recognition guidance, including industry-specific guidance. The authoritative guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The five steps are: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; and (v) recognize revenue when or as each performance obligation is satisfied. The authoritative guidance applies to all contracts with customers except those that are within the scope of other topics in the FASB ASC. The authoritative guidance requires significantly expanded disclosures about revenue recognition and was initially effective for fiscal years and the interim periods within these fiscal years beginning on or after December 15, 2016. In August 2015, the FASB issued ASU 2015-14 “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date.” This standard defers for one year the effective date of ASU 2014-09. The Group adopted ASC 606 from January 1, 2018. The adoption had no material impact on the Group’s in previous years’ retained earnings and the Group’s accompanying consolidated financial statements for the year ended December 31, 2018. In August 2016, the FASB issued ASU 2016-15, an update to ASC Topic 230, Statement of Cash Flows to provide guidance for areas where there is diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2017, with early adoption permitted. The adoption of this guidance had no material impact on our consolidated financial statements. On May 10, 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”), which clarifies the scope of modification accounting for share-based compensation arrangements by providing guidance on the types of changes to the terms and conditions of share-based compensation awards to which an entity would be required to apply modification accounting under ASC 718. ASU 2017-09 is effective for annual periods beginning after December 15, 2017, with early adoption permitted. The adoption of this guidance had no material impact on our consolidated financial statements. Recently Issued Accounting Pronouncements We consider the applicability and impact of all Accounting Standards Updates (“ASUs”). The ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position and/or results of operations. February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. This update requires an entity to recognize lease assets and lease liabilities on the balance sheet and to disclose key information about the entity’s leasing arrangements. ASU 2016-02 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2018, with early application permitted. A modified retrospective approach is required. The adoption of this authoritative guidance will have no material impact on our consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220). This update provides companies with the option to reclassify stranded tax effects caused by the 2017 Tax Cuts and Jobs Act, or the 2017 Tax Act, from accumulated other comprehensive income to retained earnings. This standard is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. We are currently evaluating the impact that the adoption of this standard will have on our consolidated financial statements and anticipate adopting the standard for the fiscal year ending December 31, 2019. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2019. The Group is currently in the process of evaluating the impact of the adoption of ASU 2016-13 on its consolidated financial statements. |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization And Description Of Business [Abstract] | |
Schedule of wholly-owned subsidiaries and the consolidated VIE | Name of the Company Date of Place of Percentage of MDJCC Limited 2/9/2018 Hong Kong 100% Beijing MingdaJiahe Technology Development Co. Ltd 3/9/2018 PRC WFOE Tianjin Mingdajiahe Real Estate Corporation 9/25/2002 PRC VIE |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of variable interest entities | Name of the Subsidiaries Owned by VIEs Date of Place of Percentage Tianjin Mingdajiahe Real Estate Corporation Yangzhou Branch 10/18/2017 Yangzhou, China 100 % Tianjin Mingdajiahe Real Estate Corporation Suzhou Branch 10/13/2017 Suzhou, China 100 % Xi She (Tianjin) Business Management Co. Ltd. 10/20/2017 Tianjin, China 100 % Xi She (Tianjin) Wen Hua Chuan Mei Co Ltd. 7/25/2018 Tianjin, China 100 % Xishe Xianglin (Tianjin) Business Operation & Management Co. Ltd. 3/9/2018 Tianjin, China 51 % |
Shchedule of estimated usefule life of fixed assets | Classification Estimated Usefule Life Office Equipment and Fixtures 3 or 5 years Computers 3 or 5 years Software 10 years Vehicles 5 years |
Schedule of basic and diluted loss per share | 2018 2017 2016 Numerator for earnings per share: Net (loss) income attributable to the Company's common shareholders $ (515,971 ) $ 1,167,002 $ 996,550 Denominator for basic and diluted earnings per share: Basic weighted average common shares * 10,400,408 10,380,000 10,380,000 Per share amount Per share - basic and diluted $ (0.05 ) $ 0.11 $ 0.10 * Prior to the formation of MDJM, VIE issued 10,380,000 ordinary shares to its shareholders. Each shareholder of VIE was expected to receive MDJM's share at one to one ratio. On January 26, 2018, MDJM issued 10,380,000 ordinary shares to entities controlled by the shareholders of Mingda Tianjin. All references to numbers of ordinary shares and per share amounts in the accompanying consolidated financial statements have been adjusted to reflect such issuance of shares on a retrospective basis from the earliest period presented. |
Schedule of foreign currency translation | December 31, US$ Exchange Rate 2018 2017 2016 Year end RMB 6.8778 6.5075 6.9445 Annual average RMB 6.6187 6.7588 6.6444 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Receivable, Net [Abstract] | |
Schedule of accounts receivable | December 31, December 31, 2018 2017 Accounts receivable $ 1,817,767 $ 1,835,197 Allowance for doubtful accounts (49,963 ) (201,647 ) Accounts receivable, net $ 1,767,804 $ 1,633,550 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | December 31, December 31, 2018 2017 Office Equipment and Fixtures $ 50,224 $ 51,846 Software 17,465 18,459 Auto 32,636 34,493 Total Assets 100,325 104,798 Less accumulated depreciation (79,023 ) (70,731 ) Net Assets $ 21,302 $ 34,067 |
INCOME TAX AND DEFERRED TAX A_2
INCOME TAX AND DEFERRED TAX ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of deferred tax assets | December 31, December 31, 2018 2017 Deferred tax items Allowance for doubtful accounts $ 49,963 $ 201,647 Accrued expenses per US GAAP 162,089 253,938 Income not recognized per US GAAP 64,153 414,023 Current year loss - Chinese Tax 265,680 - Total deferred items 541,885 869,608 Tax rate at 25 % 25 % Net Deferred Tax Assets $ 135,471 $ 217,402 |
Schedule of effective income tax rates | China 2018 2017 2016 US statutory tax rate 21.00 % 34.00 % 34.00 % Tax rate difference 4.00 % -9.00 % -9.00 % Changes in valuation allowance -25.00 % 0.00 % 0.00 % Effective rate 0.00 % 25.00 % 25.00 % |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Schedule of accounts payable and accrued liabilities | 2018 2017 Payroll and social security payable $ 334,734 $ 163,397 Bonus payable 162,089 307,338 Other payables 78,264 2,950 Total Accounts Payable and Accrued Liabilities $ 575,087 $ 473,685 |
VAT AND OTHER TAXES PAYABLE (Ta
VAT AND OTHER TAXES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Vat And Other Taxes Payable [Abstract] | |
Schedule of vat and other taxes payable | 2018 2017 VAT payable $ 120,305 $ 105,623 Additions and fees 15,114 5,912 Other taxes 2,276 13,264 Total Other Taxes Payable $ 137,695 $ 124,799 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of lease commitments | Address Location Usage From To Rent / Mo Rent / Mo 1 #36 N. Sports Institute Tianjin Office 10/1/2016 9/30/2021 ¥ 1,100 $ 160 2 Tianjing Sandun Center Tianjin Office 1/1/2019 12/31/2023 61,251 8,906 3 Xiang Yi Garden 6-406 Suzhou Office 9/25/2018 9/24/2019 3,700 538 ¥ 66,051 $ 9,604 |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | For the years ended Rental amount 2019 $ 113,634 2020 108,792 2021 108,312 2022 106,872 2023 106,872 Total $ 544,482 |
RESTRICTED NET ASSETS OR PARE_2
RESTRICTED NET ASSETS OR PARENT COMPANY'S CONDENSED FINANCIAL STATEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of condensed balance sheet | CONDENSED BALANCE SHEETS As of December 31, 2018 Combined MDJM WFOE Asset Cash $ 5,626,079 $ 5,626,079 $ - Total Asset $ 5,626,079 $ 5,626,079 $ - Liabilities and Equity Other liability Due to subsidiaries $ 1,568,300 $ 1,565,174 $ 3,126 Common stock 1,241 1,241 - Additional paid in capital 4,102,238 4,102,238 - Retained deficit (45,700 ) (42,574 ) (3,126 ) Total Labilities and Equity $ 5,626,079 $ 5,626,079 $ - |
ORGANIZATION AND DESCRIPTION _3
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details) | 12 Months Ended |
Dec. 31, 2018 | |
MDJCC Limited ("MDJH Hong Kong") | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Percentage of Ownership | 100.00% |
MDJCC Limited ("MDJH Hong Kong") | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Date of Incorporation | Feb. 9, 2018 |
Place of Incorporation | Hong Kong |
Beijing MingdaJiahe Technology Development Co. Ltd | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Date of Incorporation | Mar. 9, 2018 |
Place of Incorporation | PRC |
Description of Ownership | WFOE |
Tianjin Mingdajiahe Real Estate Co., Ltd. | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Date of Incorporation | Sep. 25, 2002 |
Place of Incorporation | PRC |
Description of Ownership | VIE |
ORGANIZATION AND DESCRIPTION _4
ORGANIZATION AND DESCRIPTION OF BUSINESS (Detail Textuals) - shares | 1 Months Ended | ||
Apr. 28, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Common stock, shares issued | 11,621,459 | 10,380,000 | |
MDJCC Limited ("MDJH Hong Kong") | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Percentage of Ownership | 100.00% | ||
Tianjin Mingdajiahe Real Estate Co., Ltd. | Beijing MingdaJiahe Technology Development Co. Ltd | Exclusive Business Cooperation Agreement | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Ownership percent of variable interest entity | 100.00% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - VIEs | 12 Months Ended |
Dec. 31, 2018 | |
Tianjin Mingdajiahe Real Estate Corporation Yangzhou Branch | |
Variable Interest Entity [Line Items] | |
Percentage of Ownership | 100.00% |
Entity Incorporation, Date of Incorporation | Oct. 18, 2017 |
Entity Incorporation, State Country Name | Yangzhou, China |
Tianjin Mingdajiahe Real Estate Corporation Suzhou Branch | |
Variable Interest Entity [Line Items] | |
Percentage of Ownership | 100.00% |
Entity Incorporation, Date of Incorporation | Oct. 13, 2017 |
Entity Incorporation, State Country Name | Suzhou, China |
Xishe (Tianjin) Business Management Co. Ltd. | |
Variable Interest Entity [Line Items] | |
Percentage of Ownership | 100.00% |
Entity Incorporation, Date of Incorporation | Oct. 20, 2017 |
Entity Incorporation, State Country Name | Tianjin, China |
Xi She (Tianjin) Wen Hua Chuan Mei Co Ltd. | |
Variable Interest Entity [Line Items] | |
Percentage of Ownership | 100.00% |
Entity Incorporation, Date of Incorporation | Jul. 25, 2018 |
Entity Incorporation, State Country Name | Tianjin, China |
Xishe Xianglin (Tianjin) Business Operations & Management Co. Ltd. | |
Variable Interest Entity [Line Items] | |
Percentage of Ownership | 51.00% |
Entity Incorporation, Date of Incorporation | Mar. 9, 2018 |
Entity Incorporation, State Country Name | Tianjin, China |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) | 12 Months Ended |
Dec. 31, 2018 | |
Office Equipment and Fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated Usefule Life | 3 years |
Office Equipment and Fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated Usefule Life | 5 years |
Computers | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated Usefule Life | 3 years |
Computers | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated Usefule Life | 5 years |
Software | |
Property, Plant and Equipment [Line Items] | |
Estimated Usefule Life | 10 years |
Vehicles | |
Property, Plant and Equipment [Line Items] | |
Estimated Usefule Life | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Numerator for earnings per share: | ||||
Net (loss) income attributable to the Company's common shareholders | $ (515,971) | $ 1,167,002 | $ 996,550 | |
Denominator for basic and diluted earnings per share: | ||||
Basic weighted average common shares | [1],[2] | 10,400,408 | 10,380,000 | 10,380,000 |
Per share amount | ||||
Per share - basic and diluted | $ (0.05) | $ 0.11 | $ 0.10 | |
[1] | Prior to the formation of MDJM, VIE issued 10,380,000 ordinary shares to its shareholders. Each shareholder of VIE was expected to receive MDJM's share at one to one ratio. On January 26, 2018, MDJM issued 10,380,000 ordinary shares to entities controlled by the shareholders of Mingda Tianjin. All references to numbers of ordinary shares and per share amounts in the accompanying consolidated financial statements have been adjusted to reflect such issuance of shares on a retrospective basis from the earliest period presented. | |||
[2] | The shares are presented on a retroactive basis to reflect the founder shares issuance. See Note 8. |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - ¥ / $ | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | |||
Year end RMB | 6.8778 | 6.5075 | 6.9445 |
Annual average RMB | 6.6187 | 6.7588 | 6.6444 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Product Information [Line Items] | |||
Reclassfication of prior period prepaid income tax | $ 166,990 | ||
Deferred offering costs | $ 2,103,816 | ||
Marketing and advertising expenses | $ 2,889 | $ 178,878 | $ 233,207 |
Issuance of ordinary shares | 11,621,459 | 10,380,000 | |
Subsidiaries and consolidated variable interest entities | |||
Product Information [Line Items] | |||
Applicable value added tax rates | 6.00% |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts Receivable, Net [Abstract] | ||
Accounts receivable | $ 1,817,767 | $ 1,835,197 |
Allowance for doubtful accounts | (49,963) | (201,647) |
Accounts receivable, net | $ 1,767,804 | $ 1,633,550 |
ACCOUNTS RECEIVABLE (Detail Tex
ACCOUNTS RECEIVABLE (Detail Textuals) | 2 Months Ended | 12 Months Ended | ||
Feb. 28, 2019USD ($) | Dec. 31, 2018USD ($)Customers | Dec. 31, 2017USD ($)Customers | Jan. 31, 2019USD ($) | |
Revenue, Major Customer [Line Items] | ||||
Number of customers | Customers | 2 | 2 | ||
Allowance for Doubtful Accounts Receivable, Current | $ 49,963 | $ 201,647 | ||
Concentration Risk, Percentage | 20.00% | 20.00% | ||
Accounts receivable | $ 403,930 | |||
Customer One | Subsequent event | ||||
Revenue, Major Customer [Line Items] | ||||
Accounts receivable | $ 568,197 | |||
Revenues | $ 154,117 | |||
Customer Two | Subsequent event | ||||
Revenue, Major Customer [Line Items] | ||||
Accounts receivable | $ 481,169 | |||
Major Customers | Net revenue | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration Risk, Percentage | 76.00% | 76.00% | ||
Major Customers | Net revenue | Ge Diao Ping Yuan | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration Risk, Percentage | 28.00% | |||
Major Customers | Net revenue | Ping Yue Jian Nan | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration Risk, Percentage | 25.00% | |||
Major Customers | Net revenue | Zi Xi Tai | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration Risk, Percentage | 12.00% | |||
Major Customers | Net revenue | Ge Diao Song Jian | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration Risk, Percentage | 11.00% | |||
Major Customers | Net revenue | Binhai Land Purchase Co., Ltd | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration Risk, Percentage | 23.00% | |||
Major Customers | Net revenue | Tianjin Jingshang Property Co., Ltd | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration Risk, Percentage | 21.00% | |||
Major Customers | Net revenue | Tianjin Jiantai Real Estate Development Co., Ltd. | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration Risk, Percentage | 19.00% | |||
Major Customers | Net revenue | Tianjin Binhai New City Investment Co., Ltd. | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration Risk, Percentage | 14.00% | |||
Major Customers | Accounts receivable | Ge Diao Ping Yuan | ||||
Revenue, Major Customer [Line Items] | ||||
Accounts receivable | $ 230,803 | |||
Major Customers | Accounts receivable | Ping Yue Jian Nan | ||||
Revenue, Major Customer [Line Items] | ||||
Accounts receivable | 62,783 | |||
Major Customers | Accounts receivable | Zi Xi Tai | ||||
Revenue, Major Customer [Line Items] | ||||
Accounts receivable | 67,969 | |||
Major Customers | Accounts receivable | Ge Diao Song Jian | ||||
Revenue, Major Customer [Line Items] | ||||
Accounts receivable | $ 120,080 | |||
Major Customers | Accounts receivable | Binhai Land Purchase Co., Ltd | ||||
Revenue, Major Customer [Line Items] | ||||
Accounts receivable | $ 469,640 | |||
Major Customers | Accounts receivable | Tianjin Jingshang Property Co., Ltd | ||||
Revenue, Major Customer [Line Items] | ||||
Accounts receivable | 592,788 | |||
Major Customers | Accounts receivable | Tianjin Jiantai Real Estate Development Co., Ltd. | ||||
Revenue, Major Customer [Line Items] | ||||
Accounts receivable | 22,557 | |||
Major Customers | Accounts receivable | Tianjin Binhai New City Investment Co., Ltd. | ||||
Revenue, Major Customer [Line Items] | ||||
Accounts receivable | $ 196,982 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Total Assets | $ 100,325 | $ 104,798 |
Less accumulated depreciation | (79,023) | (70,731) |
Net Assets | 21,302 | 34,067 |
Office Equipment and Fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total Assets | 50,224 | 51,846 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Total Assets | 17,465 | 18,459 |
Auto | ||
Property, Plant and Equipment [Line Items] | ||
Total Assets | $ 32,636 | $ 34,493 |
PROPERTY AND EQUIPMENT, NET (_2
PROPERTY AND EQUIPMENT, NET (Detail Textuals) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense for property and equipment | $ 12,575 | $ 7,232 | $ 5,590 |
INCOME TAX AND DEFERRED TAX A_3
INCOME TAX AND DEFERRED TAX ASSETS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred tax items | ||
Allowance for doubtful accounts | $ 49,963 | $ 201,647 |
Accrued expenses per US GAAP | 162,089 | 253,938 |
Income not recognized per US GAAP | 64,153 | 414,023 |
Current year loss - Chinese Tax | 265,680 | 0 |
Total deferred items | $ 541,885 | $ 869,608 |
Tax rate at | 25.00% | 25.00% |
Net Deferred Tax Assets | $ 135,471 | $ 217,402 |
INCOME TAX AND DEFERRED TAX A_4
INCOME TAX AND DEFERRED TAX ASSETS (Details 1) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax And Deferred Tax Assets [Line Items] | |||
US statutory tax rate | 21.00% | 34.00% | 34.00% |
Effective rate | 25.00% | 25.00% | |
China | |||
Income Tax And Deferred Tax Assets [Line Items] | |||
Tax rate difference | 4.00% | (9.00%) | (9.00%) |
Changes in valuation allowance | (25.00%) | 0.00% | 0.00% |
Effective rate | 0.00% | 25.00% | 25.00% |
INCOME TAX AND DEFERRED TAX A_5
INCOME TAX AND DEFERRED TAX ASSETS (Detail Textuals) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax And Deferred Tax Assets [Line Items] | |||
Uniform tax rate | 25.00% | 25.00% | |
US statutory tax rate | 21.00% | 34.00% | 34.00% |
Limitation percent of the tax deduction for interest expense | 30.00% | ||
Limitation percent of deduction for net operating losses | 80.00% | ||
PRC tax Jurisdiction | |||
Income Tax And Deferred Tax Assets [Line Items] | |||
Uniform tax rate | 16.50% | ||
Examination Period | 5 years | ||
Earlier tax year | |||
Income Tax And Deferred Tax Assets [Line Items] | |||
US statutory tax rate | 35.00% | ||
Latest tax year | |||
Income Tax And Deferred Tax Assets [Line Items] | |||
US statutory tax rate | 21.00% | ||
Hong Kong | |||
Income Tax And Deferred Tax Assets [Line Items] | |||
Uniform tax rate | 16.50% |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Payroll and social security payable | $ 334,734 | $ 163,397 |
Bonus payable | 162,089 | 307,338 |
Other payables | 78,264 | 2,950 |
Total Accounts Payable and Accrued Liabilities | $ 575,087 | $ 473,685 |
VAT AND OTHER TAXES PAYABLE (De
VAT AND OTHER TAXES PAYABLE (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Vat And Other Taxes Payable [Abstract] | ||
VAT payable | $ 120,305 | $ 105,623 |
Additions and fees | 15,114 | 5,912 |
Other taxes | 2,276 | 13,264 |
Total Other Taxes Payable | $ 137,695 | $ 124,799 |
VAT AND OTHER TAXES PAYABLE (_2
VAT AND OTHER TAXES PAYABLE (Detail Textuals) | 1 Months Ended |
May 31, 2016 | |
Vat And Other Taxes Payable [Abstract] | |
Value added tax percentages of commission income | 5.00% |
Value added tax percentages of urban maintenance and construction tax payable | 7.00% |
Value added tax percentages of education tax payable | 3.00% |
Value added tax percentages of local education tax payable | 2.00% |
STOCKHOLDERS' EQUITY (Detail Te
STOCKHOLDERS' EQUITY (Detail Textuals) - USD ($) | Jan. 04, 2019 | Dec. 26, 2018 | Dec. 31, 2018 | Dec. 31, 2016 | Jan. 26, 2018 | Dec. 31, 2017 |
Stockholders Equity [Line Items] | ||||||
Common stock, shares authorized | 50,000,000 | 50,000,000 | ||||
Common stock par value, per share | $ 0.001 | $ 0.001 | ||||
Common stock, shares issued | 11,621,459 | 10,380,000 | ||||
Proceeds from ordinary shares sold | $ 27,692 | |||||
Cost related to sold of ordinary shares | $ 2,103,816 | |||||
Subsequent event | Underwriter Warrants | ||||||
Stockholders Equity [Line Items] | ||||||
Warrants issued | 126,082 | |||||
IPO | ||||||
Stockholders Equity [Line Items] | ||||||
Public offering price | $ 5 | |||||
Proceeds from ordinary shares sold | $ 6,207,295 | |||||
Cost related to sold of ordinary shares | $ 2,103,816 | |||||
IPO | Network 1 Financial Securities, Inc. ("NETW") | ||||||
Stockholders Equity [Line Items] | ||||||
Ordinary shares sold (in shares) | 1,241,459 | |||||
Proceeds from ordinary shares sold | $ 6,207,295 | |||||
IPO | Underwriter Warrants | Network 1 Financial Securities, Inc. ("NETW") | ||||||
Stockholders Equity [Line Items] | ||||||
Percentage of public offering price as warrants exercise price | 125.00% | |||||
Public offering price | $ 5 | |||||
Percentage of total number of ordinary shares sold as warrants granted | 10.00% | |||||
Warrants expiration period | 5 years | |||||
Period for registration rights | 5 years | |||||
IPO | Subsequent event | Network 1 Financial Securities, Inc. ("NETW") | ||||||
Stockholders Equity [Line Items] | ||||||
Ordinary shares sold (in shares) | 19,361 | |||||
Tianjin Mingdajiahe Real Estate Co., Ltd. | Mr. Siping Xu | ||||||
Stockholders Equity [Line Items] | ||||||
Common stock, shares issued | 10,380,000 | |||||
Common stock, shares, outstanding | 10,380,000 | |||||
Number of common stock owned | 10,200,000 | |||||
Percentage of outstanding ordinary shares | 98.27% | |||||
MDJCC Limited ("MDJH Hong Kong") | Shareholder | ||||||
Stockholders Equity [Line Items] | ||||||
Common stock, shares issued | 10,380,000 | |||||
Common stock, shares, outstanding | 10,380,000 |
STATUTORY RESERVE (Details)
STATUTORY RESERVE (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Statutory Reserve [Line Items] | ||
Statutory reserve of mingda tianjin | $ 232,542 | $ 232,542 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - Dec. 31, 2018 | USD ($) | CNY (¥) |
Operating Leased Assets [Line Items] | ||
Monthly rent payable | $ 9,604 | ¥ 66,051 |
Lease agreement for office dated from October 1, 2016 to September 30, 2021 | ||
Operating Leased Assets [Line Items] | ||
Monthly rent payable | 160 | 1,100 |
Lease agreement for office dated from January 1, 2019 to December 31, 2023 | ||
Operating Leased Assets [Line Items] | ||
Monthly rent payable | 8,906 | 61,251 |
Lease agreement for office dated from September 25, 2018 to September 24, 2019 | ||
Operating Leased Assets [Line Items] | ||
Monthly rent payable | $ 538 | ¥ 3,700 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details 1) | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 113,634 |
2020 | 108,792 |
2021 | 108,312 |
2022 | 106,872 |
2023 | 106,872 |
Total | $ 544,482 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Detail Textuals) | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2018CNY (¥) | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Monthly rent payable | $ 9,604 | ¥ 66,051 | ||
Total rent expense | 118,775 | $ 98,995 | $ 92,884 | |
Property management and utility expenses | $ 23,184 | $ 16,620 | $ 18,824 |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES (Detail Textuals 1) - USD ($) | Jan. 04, 2019 | Sep. 06, 2018 | Dec. 26, 2018 | Jul. 16, 2018 | Dec. 31, 2018 | Dec. 31, 2016 |
Other Commitments [Line Items] | ||||||
Maximum value of ordinary shares sold | $ 4,103,479 | |||||
Proceeds from ordinary shares sold | $ 27,692 | |||||
IPO | ||||||
Other Commitments [Line Items] | ||||||
Public offering price | $ 5 | |||||
Proceeds from ordinary shares sold | $ 6,207,295 | |||||
Underwriter Warrants | Subsequent event | ||||||
Other Commitments [Line Items] | ||||||
Warrants issued | 126,082 | |||||
Network 1 Financial Securities, Inc. ("NETW") | IPO | ||||||
Other Commitments [Line Items] | ||||||
Maximum value of ordinary shares sold | $ 6,000,000 | |||||
Description of underwriting discount and spread | The Company agrees to pay NETW an underwriting discount or spread of seven percent (7%) of the gross proceeds from investors introduced by NETW and five percent (5%) of the gross proceeds from investors introduced by NETW. | |||||
Percentage of gross proceeds of offering as corporate finance fee | 2.00% | |||||
Maximum reimbursement out of pocket expenses related to offering | $ 75,000 | |||||
Ordinary shares sold (in shares) | 1,241,459 | |||||
Proceeds from ordinary shares sold | $ 6,207,295 | |||||
Network 1 Financial Securities, Inc. ("NETW") | Subsequent event | IPO | ||||||
Other Commitments [Line Items] | ||||||
Ordinary shares sold (in shares) | 19,361 | |||||
Network 1 Financial Securities, Inc. ("NETW") | Underwriter Warrants | IPO | ||||||
Other Commitments [Line Items] | ||||||
Percentage of total number of ordinary shares sold as warrants granted | 10.00% | |||||
Warrants expiration period | 5 years | |||||
Percentage of public offering price as warrants exercise price | 125.00% | |||||
Public offering price | $ 5 | |||||
Period for registration rights | 5 years | |||||
Investor Relations Agreement | Ascent Investor Relations Inc. | ||||||
Other Commitments [Line Items] | ||||||
Consideration paid per month before listed in the market of Nasdaq | $ 4,140 | |||||
Consideration paid per month after listed in the market of Nasdaq | $ 7,820 |
COMMITMENTS AND CONTINGENCIES_6
COMMITMENTS AND CONTINGENCIES (Detail Textuals 2) - Tianjin Mingda Jiahe Real Estate Co. Ltd - Tianjin Huacheng Century Investment Co. Ltd - Sales Agency Service Contract | Jan. 10, 2019USD ($) | Jan. 10, 2019CNY (¥) | Jan. 03, 2018USD ($) | Jan. 03, 2018CNY (¥) | Nov. 30, 2015USD ($) | Nov. 30, 2015CNY (¥) | Dec. 31, 2018USD ($) | Jan. 10, 2019CNY (¥) |
Loss Contingencies [Line Items] | ||||||||
Loss Contingency, default amount of sales agency fees and retention fees | $ 429,700 | ¥ 2,792,854 | ||||||
Breach of contract | ||||||||
Loss Contingencies [Line Items] | ||||||||
Damages sought from defendant | $ 429,670 | ¥ 2,792,854 | ||||||
Civil mediation agreement | ||||||||
Loss Contingencies [Line Items] | ||||||||
First installment of sales agency fees due by or before February 9, 2018 | 76,900 | 500,000 | ||||||
Second installment of sales agency fees due by or before October 31, 2018 | 176,400 | 1,146,427 | ||||||
Third installment of sales agency fees due by or before December 31, 2018 | 176,400 | 1,146,427 | ||||||
Litigation fees | $ 2,400 | ¥ 15,604 | ||||||
First installment of sales agency fees received | $ 76,900 | |||||||
Civil mediation agreement | Subsequent event | ||||||||
Loss Contingencies [Line Items] | ||||||||
Percentage of balance due as aggreed to pay by defendant | 90.00% | 90.00% | ||||||
Balance of damages due | $ 300,033 | ¥ 2,063,567 | ||||||
Total amount received from defendant | $ 300,033 | ¥ 2,063,568 |
RESTRICTED NET ASSETS OR PARE_3
RESTRICTED NET ASSETS OR PARENT COMPANY'S CONDENSED FINANCIAL STATEMENTS (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Assets | |||||
Cash | $ 6,692,557 | $ 3,117,740 | $ 1,662,346 | $ 1,259,840 | |
Total Assets | 8,895,097 | 5,385,478 | |||
Liabilities and Equity | |||||
Common stock | [1] | 11,621 | 10,380 | ||
Additional paid in capital | 6,664,295 | 2,562,057 | |||
Retained deficit | 1,526,110 | 2,042,081 | |||
Total liabilities and Equity | 8,895,097 | $ 5,385,478 | |||
MDJM | |||||
Assets | |||||
Cash | 5,626,079 | ||||
Total Assets | 5,626,079 | ||||
Liabilities and Equity | |||||
Due to subsidiaries | 1,565,174 | ||||
Common stock | 1,241 | ||||
Additional paid in capital | 4,102,238 | ||||
Retained deficit | (42,574) | ||||
Total liabilities and Equity | 5,626,079 | ||||
WFOE | |||||
Assets | |||||
Cash | 0 | ||||
Total Assets | 0 | ||||
Liabilities and Equity | |||||
Due to subsidiaries | 3,126 | ||||
Common stock | 0 | ||||
Additional paid in capital | 0 | ||||
Retained deficit | (3,126) | ||||
Total liabilities and Equity | 0 | ||||
Combined | |||||
Assets | |||||
Cash | 5,626,079 | ||||
Total Assets | 5,626,079 | ||||
Liabilities and Equity | |||||
Due to subsidiaries | 1,568,300 | ||||
Common stock | 1,241 | ||||
Additional paid in capital | 4,102,238 | ||||
Retained deficit | (45,700) | ||||
Total liabilities and Equity | $ 5,626,079 | ||||
[1] | The shares are presented on a retroactive basis to reflect the founder shares issuance. See Note 8. |
RESTRICTED NET ASSETS OR PARE_4
RESTRICTED NET ASSETS OR PARENT COMPANY'S CONDENSED FINANCIAL STATEMENTS (Detail Textuals) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
MDJM | |
Condensed Balance Sheet Statements, Captions [Line Items] | |
Preliminary Expenses | $ 42,574 |
WFOE | |
Condensed Balance Sheet Statements, Captions [Line Items] | |
Preliminary Expenses | $ 3,126 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Detail Textuals) | 1 Months Ended |
Jan. 26, 2018shares | |
MDJM | |
Related Party Transaction [Line Items] | |
Common share issued | 10,200,000 |
CANDM LTD | |
Related Party Transaction [Line Items] | |
Common share issued | 10,000 |
MNCC LTD | |
Related Party Transaction [Line Items] | |
Common share issued | 10,000 |
Beneficial Owners | |
Related Party Transaction [Line Items] | |
Common share issued | 10,380,000 |
Mr. Siping Xu | MDJM | |
Related Party Transaction [Line Items] | |
Percentages of ownership controlled | 100.00% |
Mr.Yang Li | CANDM LTD | |
Related Party Transaction [Line Items] | |
Percentages of ownership controlled | 100.00% |
Mr. Mengnan Wang | MNCC LTD | |
Related Party Transaction [Line Items] | |
Percentages of ownership controlled | 100.00% |
SUBSEQUENT EVENTS (Detail Textu
SUBSEQUENT EVENTS (Detail Textuals) | Jan. 10, 2019USD ($) | Jan. 10, 2019CNY (¥) | Jan. 04, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($) | Jan. 10, 2019CNY (¥) | Dec. 26, 2018$ / shares |
Subsequent Event [Line Items] | ||||||
Ordinary shares sold | $ | $ 4,103,479 | |||||
IPO | ||||||
Subsequent Event [Line Items] | ||||||
Common share price per share | $ / shares | $ 5 | |||||
Subsequent event | Tianjin Huacheng Century Investment Co. Ltd | Civil mediation agreement | Sales Agency Service Contract | Tianjin Mingda Jiahe Real Estate Co. Ltd | ||||||
Subsequent Event [Line Items] | ||||||
Percentage of balance due as aggreed to pay by defendant | 90.00% | 90.00% | ||||
Balance of damages due | $ 300,033 | ¥ 2,063,567 | ||||
Total amount received from defendant | $ 300,033 | ¥ 2,063,568 | ||||
Subsequent event | Underwriter Warrants | ||||||
Subsequent Event [Line Items] | ||||||
Warrants issued | shares | 126,082 | |||||
Subsequent event | Second closing of IPO | ||||||
Subsequent Event [Line Items] | ||||||
Ordinary shares sold (in shares) | shares | 19,361 | |||||
Common share price per share | $ / shares | $ 5 | |||||
Ordinary shares sold | $ | $ 96,805 |