| Issuer CIK | 0001726286 |
| Issuer CCC | XXXXXXXX |
| DOS File Number | |
| Offering File Number | 024-10852 |
| Is this a LIVE or TEST Filing? | ☒ LIVE ☐ TEST |
| Would you like a Return Copy? | ☒ |
| Notify via Filing Website only? | ☒ |
| Since Last Filing? | ☐ |
| Name | |
| Phone | |
| E-Mail Address |
| Exact name of issuer as specified in the issuer's charter | SOCIAL DETENTION INC. |
| Jurisdiction of Incorporation / Organization |
CALIFORNIA
|
| Year of Incorporation | 2015 |
| CIK | 0001726286 |
| Primary Standard Industrial Classification Code | MISCELLANEOUS MANUFACTURING INDUSTRIES |
| I.R.S. Employer Identification Number | 46-4816984 |
| Total number of full-time employees | 1 |
| Total number of part-time employees | 0 |
| Address 1 | 3000 F DANVILLE BLVD SUITE 145 |
| Address 2 | |
| City | ALAMO |
| State/Country |
CALIFORNIA
|
| Mailing Zip/ Postal Code | 94507 |
| Phone | 925-575-4433 |
| Name | Alexander Kuhne |
| Address 1 | |
| Address 2 | |
| City | |
| State/Country | |
| Mailing Zip/ Postal Code | |
| Phone |
| Industry Group (select one) | ☐ Banking ☐ Insurance ☒ Other |
| Cash and Cash Equivalents |
$
835427.00 |
| Investment Securities |
$
28300.00 |
| Total Investments |
$
|
| Accounts and Notes Receivable |
$
0.00 |
| Loans |
$
|
| Property, Plant and Equipment (PP&E): |
$
0.00 |
| Property and Equipment |
$
|
| Total Assets |
$
863727.00 |
| Accounts Payable and Accrued Liabilities |
$
480200.00 |
| Policy Liabilities and Accruals |
$
|
| Deposits |
$
|
| Long Term Debt |
$
40300.00 |
| Total Liabilities |
$
520500.00 |
| Total Stockholders' Equity |
$
343227.00 |
| Total Liabilities and Equity |
$
863727.00 |
| Total Revenues |
$
1112000.00 |
| Total Interest Income |
$
|
| Costs and Expenses Applicable to Revenues |
$
935726.00 |
| Total Interest Expenses |
$
|
| Depreciation and Amortization |
$
0.00 |
| Net Income |
$
176274.00 |
| Earnings Per Share - Basic |
$
0.00 |
| Earnings Per Share - Diluted |
$
0.00 |
| Name of Auditor (if any) |
| Name of Class (if any) Common Equity | Class A Common |
| Common Equity Units Outstanding | 183753333 |
| Common Equity CUSIP (if any): | 833619109 |
| Common Equity Units Name of Trading Center or Quotation Medium (if any) | OTC |
| Preferred Equity Name of Class (if any) | Preferred A and B |
| Preferred Equity Units Outstanding | 0 |
| Preferred Equity CUSIP (if any) | 000000000 |
| Preferred Equity Name of Trading Center or Quotation Medium (if any) | 0 |
| Debt Securities Name of Class (if any) | 0 |
| Debt Securities Units Outstanding | 0 |
| Debt Securities CUSIP (if any): | 000000000 |
| Debt Securities Name of Trading Center or Quotation Medium (if any) | 0 |
Check this box to certify that all of the following statements are true for the issuer(s)
☒
Check this box to certify that, as of the time of this filing, each person described in Rule 262 of Regulation A is either not disqualified under that rule or is disqualified but has received a waiver of such disqualification.
☒
Check this box if "bad actor" disclosure under Rule 262(d) is provided in Part II of the offering statement.
☐
| Check the appropriate box to indicate whether you are conducting a Tier 1 or Tier 2 offering | ☒ Tier1 ☐ Tier2 |
| Check the appropriate box to indicate whether the financial statements have been audited | ☒ Unaudited ☐ Audited |
| Types of Securities Offered in this Offering Statement (select all that apply) |
| ☒Equity (common or preferred stock) |
| Does the issuer intend to offer the securities on a delayed or continuous basis pursuant to Rule 251(d)(3)? | ☒ Yes ☐ No |
| Does the issuer intend this offering to last more than one year? | ☐ Yes ☒ No |
| Does the issuer intend to price this offering after qualification pursuant to Rule 253(b)? | ☒ Yes ☐ No |
| Will the issuer be conducting a best efforts offering? | ☒ Yes ☐ No |
| Has the issuer used solicitation of interest communications in connection with the proposed offering? | ☐ Yes ☒ No |
| Does the proposed offering involve the resale of securities by affiliates of the issuer? | ☒ Yes ☐ No |
| Number of securities offered | 30000000 |
| Number of securities of that class outstanding | 183753333 |
| Price per security |
$
0.1000 |
| The portion of the aggregate offering price attributable to securities being offered on behalf of the issuer |
$
1000000.00 |
| The portion of the aggregate offering price attributable to securities being offered on behalf of selling securityholders |
$
2000000.00 |
| The portion of the aggregate offering price attributable to all the securities of the issuer sold pursuant to a qualified offering statement within the 12 months before the qualification of this offering statement |
$
0.00 |
| The estimated portion of aggregate sales attributable to securities that may be sold pursuant to any other qualified offering statement concurrently with securities being sold under this offering statement |
$
0.00 |
| Total (the sum of the aggregate offering price and aggregate sales in the four preceding paragraphs) |
$
3000000.00 |
| Underwriters - Name of Service Provider | 0 | Underwriters - Fees |
$
0.00 |
| Sales Commissions - Name of Service Provider | 0 | Sales Commissions - Fee |
$
0.00 |
| Finders' Fees - Name of Service Provider | 0 | Finders' Fees - Fees |
$
0.00 |
| Audit - Name of Service Provider | 0 | Audit - Fees |
$
0.00 |
| Legal - Name of Service Provider | 0 | Legal - Fees |
$
0.00 |
| Promoters - Name of Service Provider | 0 | Promoters - Fees |
$
0.00 |
| Blue Sky Compliance - Name of Service Provider | 0 | Blue Sky Compliance - Fees |
$
0.00 |
| CRD Number of any broker or dealer listed: | 0 |
| Estimated net proceeds to the issuer |
$
3000000.00 |
| Clarification of responses (if necessary) |
| Selected States and Jurisdictions |
CALIFORNIA
NEW YORK
|
| None | ☒ |
| Same as the jurisdictions in which the issuer intends to offer the securities | ☐ |
| Selected States and Jurisdictions |
None ☐
As to any unregistered securities issued by the issuer of any of its predecessors or affiliated issuers within one year before the filing of this Form 1-A, state:
| (a)Name of such issuer | Social Detention, Inc. |
| (b)(1) Title of securities issued | Class A Common Stock |
| (2) Total Amount of such securities issued | 183753333 |
| (3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer. | 3947248 |
| (c)(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof. | None |
| (2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)). | None were issued during the preceding one year. |
| (e) Indicate the section of the Securities Act or Commission rule or regulation relied upon for exemption from the registration requirements of such Act and state briefly the facts relied upon for such exemption | In the preceding 12 monthsone year, Issuer's President sold Class A Common Shares on the open market pursuant to Rule 144, complying with all applicable requirements. |
PART II AND III
An offering statement pursuant to Regulation A relating to these securities has been filed with the Securities and Exchange Commission. Information contained in this Preliminary Offering Circular is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted before the offering statement filed with the Commission is qualified. This Preliminary Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sales of these securities in any state in which such offer, solicitation or sale would be unlawful before registration or qualification under the laws of any such state. We may elect to satisfy our obligation to deliver a Final Offering Circular by sending you a notice within two business days after the completion of our sale to you that contains the URL where the Offering Circular was filed may be obtained.
Preliminary Offering Circular
Social Detention Inc. $3,000,000 Class A Common Stock Offering Circular
(conforms to Regulation A+ Tier 1 rules)
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SELLING LITERATURE. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED HEREUNDER ARE EXEMPT FROM REGISTRATION.
Social
Detention Inc. $3,000,000 Class A Common Stock
Offering of which
$1,000,000
is offered by the Company, and
$2,000,000 is offered by Company shareholders.
|
Price
to
public |
Underwriting
discount and commissions |
Proceeds
to
Issuer |
Proceeds
to
other persons |
|||||||||||
| Per share: | $ | 0.10 | 0 | % | $ | 0.0 | N/A | |||||||
| Total Minimum: | $ | 100.00 | 0 | % | $ | 300.00 | N/A | |||||||
| Total Maximum: | $ | 3,000,000 | 0 | % | $ | 3,000,000 | N/A | |||||||
Social Detention Inc.
3000 F Danville Blvd. Suite 145
Alamo, California 94507
925-575-4433
www.sod etention.com
| 3990 | 46-4816984 | |
|
(Primary
Standard Industrial
Classification Code Number) |
(I.R.S.
Employer
Identification Number) |
Read and consider “Risk Factors” (beginning on page 2 ) before buying shares of Class A Class A Common Stock.
Subject to Completion: [Date of sale to the public: October 31 , 2018]
[Maximum offering of 30,000,000 shares.]
This is a public offering of shares of Class A Class A Common Stock of Social Detention, Inc.
Our Class A Common Stock currently trades on the OTC Pink market under the symbol “SODE” and the closing price of our Class A Class A Common Stock on 27 Septmeber, 2018 was $0.10. Our Class A Common Stock currently trades on a sporadic and limited basis.
We are offering our shares without the use of an exclusive placement agent, however, we may engage various securities brokers to place shares in this offering with investors for commissions of up to 10% of the gross proceeds.
Generally, no sale may be made to you in this offering if the aggregate purchase price you pay is more than 10% of the greater of your annual income or net worth. Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i) (C) of Regulation A. For general information on investing, we encourage you to refer to www.investor.gov.
The United States Securities and Exchange Commission does not pass upon the merits of or give its approval to any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering circular or other solicitation materials. These securities are offered pursuant to an exemption from registration with the Commission; however, the Commission has not made an independent determination that the securities offered are exempt from registration.
This Offering Circular is following the offering circular format described in Part II (a)(1)(ii) of Form 1-A.
Offering Circular dated 2 October 2018
(ITEM 2)
No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this Offering Circular. You must not rely on any unauthorized information or representations. This Offering Circular is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this Offering Circular is current only as of its date.
| 1 |
Item 3: Summary and Risk Factors of the Business
This summary highlights information contained elsewhere in this Offering Circular. This summary does not contain all of the information that you should consider before deciding to invest in our Class A Common Stock. You should read this entire Offering Circular carefully, including the “Risk Factors” section, our historical consolidated financial statements and the notes thereto, and unaudited pro forma financial information, each included elsewhere in this Offering Circular. Unless the context requires otherwise, references in this Offering Circular to “the Company,” “we,” “us” and “our” refer to Social Detention, Inc.
General Investing Risk
Investing in our Class A Common Stock involves a high degree of risk. You should carefully consider each of the following risks, together with all other information set forth in this Offering Circular, including the consolidated financial statements and the related notes, before making a decision to buy our Class A Common Stock. If any of the following risks actually occurs, our business could be harmed. In that case, the trading price of our Class A Common Stock could decline, and you may lose all or part of your investment.
This offering contains forward-looking statements. Forward-looking statements relate to future events or our future financial performance. We generally identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar words. These statements are only predictions. The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties and other factors that may cause our customers’ or our industry’s actual results, levels of activity, performance or achievements expressed or implied by these forward-looking statements, to differ. “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” as well as other sections in this prospectus, discuss the important factors that could contribute to these differences.
The forward-looking statements made in this prospectus relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.
This prospectus also contains market data related to our business and industry. This market data includes projections that are based on a number of assumptions. If these assumptions turn out to be incorrect, actual results may differ from the projections based on these assumptions. As a result, our markets may not grow at the rates projected by these data, or at all. The failure of these markets to grow at these projected rates may have a material adverse effect on our business, results of operations, financial condition and the market price of our Class A Common Stock.
The forward-looking statements made in this prospectus relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.
| 2 |
This prospectus also contains market data related to our business and industry. This market data includes projections that are based on a number of assumptions. If these assumptions turn out to be incorrect, actual results may differ from the projections based on these assumptions. As a result, our markets may not grow at the rates projected by these data, or at all. The failure of these markets to grow at these projected rates may have a material adverse effect on our business, results of operations, financial condition and the market price of our Class A Common Stock.
Risk Related to Company
| ● | The Company has a limited operating history that you can use to evaluate us, and the likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays that we may encounter because we are small, slowly-expanding company. As a result, we may not be profitable and we may not be able to generate sufficient revenue to grow as we have planned. |
| ● | Our limited operating history makes it difficult for us to accurately forecast net sales and appropriately plan our expenses. |
| ● | We operate in a highly competitive environment, and if we are unable to compete with our competitors, our business, financial condition, results of operations, cash flows and prospects could be materially adversely affected. |
| ● | Because our current President and Chief Executive Officer, Robert P. Legg II, has other business interests, he may not be able or willing to devote a sufficient amount of time to our business operations, causing our business to fail. |
| ● | Our current President and Chief Executive Officer, Robert P. Legg II, beneficially owns approximately, or has the right to vote on, 53% of our outstanding Class A Class A Common Stock. As a result, he possesses substantial voting power in all matters submitted to our stockholders for approval, as described below. This may pose risk to other shareholders who disagree with Mr. Legg’s management philosophy and decisions. |
| ● | Election of our board of directors; | |
| ● | Removal of any of our directors; | |
| ● | Amendment of our Certificate of Incorporation or bylaws; | |
| ● | Adoption of measures that could delay or prevent a change in control or impede a merger, takeover or other business combination involving us. | |
| ● | Competition in increasing market share. |
| ● | Differences in bidding process among different institutional clients, both elected and appointed, at multiple governmental levels. |
| ● | Varying degrees of stability of governmental clients, in client relationships, managing blind bid process, obtaining business, and constructing projects. |
| ● | Risk inherent in erecting building structures. |
| ● | Governmental and market effects on capital. |
| ● | Interaction of operational cash flow and ability to obtain bonds on multiple construction projects. |
| 3 |
Risk Relating to the Company’s Securities
Company may never have a public market for our Class A Common Stock or may never trade on a recognized exchange.
Therefore, you may be unable to liquidate your investment in our stock.
There is no established public trading market for our securities. Our shares are not and have not been listed or quoted on any exchange or quotation system.
In order for our shares to be quoted, a market maker must agree to file the necessary documents with the National Association of Securities Dealers, which operates the OTC Bulletin Board. In addition, it is possible that such application for quotation may not be approved and even if approved it is possible that a regular trading market will not evolve or that, if it does come into being, will sustain. In the absence of a trading market, an investor may be unable to liquidate their investment.
We may in the future issue additional shares of our Class A Common Stock, which may have a dilutive effect on our stockholders.
Our Certificate of Incorporation authorizes the issuance of 200,000,000 shares of Class A Common Stock, of which 183,753,333 shares are issued and outstanding, each as of May 31, 2018. The future issuance of our Class A Common Stock may result in substantial dilution in the percentage of our common shares held by our then existing stockholders. We may value any Class A Common Stock issued in the future on an arbitrary basis. The issuance of Class A Common Stock for future services or other corporate actions may have the effect of diluting the value of the shares held by our investors, and might have an adverse effect on any trading market for our Class A Common Stock.
We do not currently intend to pay dividends on our Class A Common Stock and consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our Class A Common Stock.
We have never declared or paid any cash dividends on our Class A Common Stock and do not currently intend to do so for the foreseeable future. We currently intend to invest our future earnings, if any, to fund our growth. Therefore, you are not likely to receive any dividends on your Class A Common Stock for the foreseeable future and the success of an investment in shares of our Class A Common Stock will depend upon any future appreciation in its value. There is no guarantee that shares of our Class A Common Stock will appreciate in value or even maintain the price at which our stockholders have purchased their shares.
State Securities Laws may limit secondary trading, which may restrict the states in which and conditions under which you can sell Shares.
Secondary trading in our Class A Common Stock may not be possible in any state until the Class A Common Stock is qualified for sale under the applicable securities laws of the state or there is confirmation that an exemption, such as listing in certain recognized securities manuals, is available for secondary trading in the state. If we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of, the Class A Common Stock in any particular state, the Class A Common Stock cannot be offered or sold to, or purchased by, a resident of that state. In the event that a significant number of states refuse to permit secondary trading in our Class A Common Stock, the liquidity for the Class A Common Stock could be significantly impacted.
| 4 |
Investors cannot withdraw funds once invested and will not receive a refund.
Investors do not have the right to withdraw invested funds. Subscription payments will be paid to Social Detention, Inc. and held in our corporate bank account if the Subscription Agreements are in good order and the Company accepts the investor’s investment. Therefore, once an investment is made, investors will not have the use or right to return of such funds.
Our President, Robert P. Legg II, does not have substantial prior experience conducting a best effort offering, and our best effort offering does not require a minimum amount to be raised. As a result, we may not be able to raise enough funds to commence and sustain our business and our investors may lose their entire investment.
Mr. Legg does not have any experience conducting a best-effort offering. Consequently, we may not be able to raise the funds needed to commence business operations. Also, the best effort offering does not require a minimum amount to be raised. If we are not able to raise sufficient funds, we may not be able to fund our operations as planned, and our business will suffer and your investment may be materially adversely affected. Our inability to successfully conduct a best-effort offering could be the basis of your losing your entire investment in us.
The trading in our shares will be regulated by the Securities and Exchange Commission Rule 15G-9 which established the definition of a “Penny Stock.”
Based on the expected offering price, the shares being offered are defined as a penny stock under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and rules of the Commission. The Exchange Act and such penny stock rules generally impose additional sales practice and disclosure requirements on broker-dealers who sell our securities to persons other than certain accredited investors who are, generally, institutions with assets in excess of $4,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 ($300,000 jointly with spouse), or in transactions not recommended by the broker-dealer. For transactions covered by the penny stock rules, a broker dealer must make certain mandated disclosures in penny stock transactions, including the actual sale or purchase price and actual bid and offer quotations, the compensation to be received by the broker-dealer and certain associated persons, and must deliver certain disclosures required by the Commission. Consequently, the penny stock rules may make it difficult for you to resell any shares you may purchase.
We are selling the shares of this offering without an underwriter and may be unable to sell any shares.
This offering is self-underwritten, that is, we are not going to engage the services of an underwriter to sell the shares; we intend to sell our shares through our President, who will receive no commissions. There is no guarantee that he will be able to sell any of the shares. Unless he is successful in selling all of the shares of our Company’s offering, we may have to seek alternative financing to implement our business plan.
Items 4 and 5: Plan of Distribution and Selling Securityholders and Dilution
Intentionally left blank (not applicable).
| 5 |
Item 6: Use of Proceeds to Issuer
Net funds raised will be used to execute the company’s business plan.
The proposed application of the funds is:
| ● | Maintaining cash on hand in order to obtain bonding for simultaneous projects, projected to be at the standard industry multiplier of ten (10). (Estimate = $2,000,000) | |
| ● | Expansion by networking with smaller contracting providers, with an interest in prospective future acquisitions of strategic businesses that may be identified by networking. (Estimate = $500,000) | |
| ● | General expenses including sales, administration and operating capital (Estimate = $250,000) | |
| ● | Deferred compensation. (Estimate = $250,000) |
The President of company, Robert P. Legg II, along with entities he owns or has majority interest in, have provided capital loans to the business over the past several years. These loans will be partially or fully repaid upon receipt of funds from this offering. Additionally, Mr. Legg has worked full-time for the past several years with no compensation. In recognition of these contributions, he will receive a salary and bonus, paid by the company in part or full, upon receipt of funds from this offering.
If the company does not sell all of the shares and therefore does not raise the full amount intended, the company will revise its use of proceeds accordingly. Management will always use its best judgment in the allocation of funds even if less than the full offering amount is received by the company.
In the event that the Offering Circular is fully subscribed, any additional subscriptions shall be rejected and returned to the subscribing party along with any funds received.
In order to subscribe to purchase the shares, a prospective investor must complete a subscription agreement and send payment by check, wire transfer or ACH. Investors must answer certain questions to determine compliance with the investment limitation set forth in Regulation A Rule 251(d)(2)(i)(C) under the Securities Act of 1933, which states that in offerings such as this one, where the securities will not be listed on a registered national securities exchange upon qualification, the aggregate purchase price to be paid by the investor for the securities cannot exceed 10% of the greater of the investor’s annual income or net worth. In the case of an investor who is not a natural person, revenues or net assets for the investor’s most recently completed fiscal year are used instead.
The Company has not currently engaged any party for the public relations or promotion of this offering.
As of the date of this filing, there are no additional offers for shares, nor any options, warrants, or other rights for the issuance of additional shares except those described herein.
THE COMPANY RESERVES THE RIGHT TO CHANGE THE USE OF PROCEEDS
WITHOUT NOTICE.
| 6 |
Item 7: Description of Business
Social Detention is in the business of building infrastructure for governmental entities. Subsequent to its 23 November 2016 acquisition of RL Consulting, the company continues its history of contract procurements. The president, Mr . Robert P. Legg II, has been able to build the combined operations from a development state start-up to a going concern generating over $15M in annual revenues.
Social Detention intends to build a network of small contracting providers that will both be able to provide synergistic support to the other parties, by means of production capabilities, financing and other relationships, to the benefit of shared contracts. Should the operation of said network prove successful, the Company foresees these networks as a form of investigation, with an interest in future acquisitions of strategic businesses. There can be no assurance that the company will identify of successfully complete transactions with suitable acquisition candidates in the future.
Organization and History
Social Detention, Inc. (the “Company” or “Social Detention”) was incorporated in the State of Colorado on May 20, 2015. On May 31, 2015 Chenghui Realty Holding Company, Colorado. merged with Chenghui Realty Holding Company of Nevada, with the Colorado entity being the surviving entity. The surviving entity was then renamed Social Detention, Inc..
On September 26, 2016, Social Detention, Inc., a Delaware corporation, acquired an ownership interest in Social Detention, Inc., a Colorado Corporation and its assets which in turn had acquired total interest in RL Consulting, a closely held company. Social Detention, Inc., of Colorado was the surviving entity.
The Company is a Colorado corporation organized for the purpose of engaging in any lawful business. The Company’s acquisition of RL Consulting gives it a basis of operations in the security infrastructure and any other related business activities as of the date of these financial statements. The Company currently trades on the Pink Sheet under the symbol “SODE”. The Company’s fiscal period end is December 31.
Item 8: Description of Property
Intentionally left blank (not applicable).
Item 9: Management’s Discussion and Analysis of Financial Condition and Results of Operations
The Company’s clients are exclusively governmental agencies that are building infrastructure with tax revenues, with an emphasis on criminal detention centers. The Company procures such contracts by winning a bidding process, overseen by government bodies, against competing construction companies.
Firstly, a governmental agency – be it federal, state or municipal – identifies a project and funding source(s) for its construction. The agency then publicly issues a Request for Proposal, or “RFP,” soliciting companies to construct the contemplated project. Company, as a general contractor, then effects due diligence on each project it is interested in bidding upon. The due diligence process includes review of the agency’s construction plans and specifications, and operational and financing requirements, then research into the bonding and sub-contractors that would allow Company to build the project successfully and profitably. Typically, the Company will also have the opportunity to personally inspect the prospective construction site, which also permits for cursory review of at least some of competing bidders.
| 7 |
The window for responses to an RFP vary among governmental bodies, from weeks to months. Once bids are submitted, the body’s determination of the bidder with the optimal combination of low bid and qualifications for the job, generally takes two to four weeks. Upon that determination, the winning bidder then has between two to four weeks to provide all the operational requirements for the job, including, but not limited to, worker compensation insurance and construction bonding.
The financial statements are consolidated to include the Company and its wholly owned subsidiaries; all significant inter- company balances and transactions are eliminated.
The company has not filed bankruptcy, receivership or has been a party in any similar proceeding. The company has no actual or threatened material legal proceedings against it. The company has had no recent material reclassification, merger, consolidation, purchase or sale of a significant amount of assets not in the ordinary course of business.
Item 10: Directors, Executive Officers and Significant Employees
Robert P. Legg II, 49, became President and CEO of the Company in July 2016. Prior to that, he successfully founded and grew two Bay Area construction, contracting and general engineering companies, Legg, Inc. from 1997 to 2013, and ELLA from 2013 to 2016. Mr. Legg is a 1992 graduate of California State University-Chico with a B.S. in Construction Management.
Item 11: Compensation of Directors and Executive Officers
Mr. Legg is the Company’s sole principal, serving as both President and sole Director. To date, he has not received a salary from this Company.
Item 12: Security Ownership of Management and Certain Securityholders
Robert P. Legg II, the company’s President, whose mailing address is 3000 F Danville Blvd. Suite 145 Alamo, California 94507, is the only beneficial owner of more than 10% of any class of the company’s stock. Mr. Legg owns approximately 53% of the currently outstanding Class A Class A Common Stock of the company. There is no other class of stock currently outstanding.
The company’s Class A Class A Common Stock currently outstanding has 1 vote per share.
| 8 |
Item 13: Interest of Management and Others in Certain Transactions
As at December 31, 2017 the Company owes $12,000 to Robert P. Legg II on a zero interest note.
Item 14: Securities Being Offered
| Shares offered |
Up to a Maximum (30,000,000) Class A Common Stock shares at a price of $0.10 for a sum total of $3,000,000 (two-thirds by shareholders, one-third by Issuer ). |
| Shares outstanding before this Offering | 183,753,333 shares of Class A Common Stock |
| Use of proceeds | The funds raised per this offering will be utilized for operational capital and expanded domestic marketing. See “Use of Proceeds” for more details. |
| Risk Factors | See “Risk Factors” and other information appearing elsewhere in this Offering Circular for a discussion of factors you should carefully consider before deciding whether to invest in our Class A Class A Common Stock. |
The company is hereby offering for sale to the public, 30,000,000 shares of its Class A Common Stock at a price of $0.10 (ten US cents) per share, with a one (1) share minimum and no maximum number of shares, per buyer, up to the remaining amount available for sale without exceeding $20,000,000.
The stock being offered for sale herein has:
| 1. | no dividend rights |
| 2. | no liquidation rights |
| 3. | no preemptive rights |
| 4. | no conversion rights |
| 5. | no redemption provisions |
| 6. | no sinking fund provisions |
| 7. | no liability to further calls or to assessment by the issuer |
| 8. | no restrictions on alienability of the securities being offered |
| 9. | no provision discriminating against any existing or prospective holder of such securities as a result of such security-holder owning a substantial amount of securities |
| 10. | no right(s) of holders that may be modified otherwise than by a vote of a majority or more of the shares outstanding, voting as a class, and the class has a very small minority voting interest as described above. |
| 9 |
SOCIAL DETENTION, INC.
PERIOD END REPORT
FOR THE PERIOD
ENDED JUNE 30, 2018
FINANCIAL STATEMENTS
| 10 |
Social Detention, Inc.
(SOCIAL DETENTION)
3000 F Danville Blvd, Suite 145
Alamo, CA 94507
SOCIAL DETENTION UNAUDITED BALANCE
SHEET & FINANCIAL STATEMENTS
Issuer’s most recent Pro Forma Balance Sheet & Financial Statements for the
period ended June 30, 2018
| 11 |
Social Detention , Inc.
Pro
Forma Balance Sheets
(Unaudited subject to change)
| June 30, 2018 | ||||
| Current assets | ||||
| Cash in bank | $ | 149,427 | ||
| Accounts receivable | 686,000 | |||
| Total Current assets | 835,427 | |||
| Other assets | ||||
| Long term investment | 28,300 | |||
| Total other assets | 28,300 | |||
| Total Assets | $ | 863,727 | ||
| IES & STOCKHOLDERS’ DEFICIT | ||||
| Current liabilities | ||||
| Accounts payable | $ | 480,200 | ||
| Advances payable | - | |||
| Note payable - related party | 12,000 | |||
| Notes payable | 28,300 | |||
| Total current liabilities | 520,500 | |||
| Stockholders’ Deficit | ||||
| Preferred stock, 25,000,000 shares authorized with $0.001 par value. 11 ,990,000 shares issued or outstanding | - | |||
| Class A Common Stock, 200,000,000 shares authorized with $0.001 par value. 183,753,333 issued outstanding at each period respectively | 183,753 | |||
| Additional paid in capital | 220,847 | |||
| Consolidation accounting | (369,647 | ) | ||
| Net Income | 308,274 | |||
| Total Stockholders’ Deficit | 343,227 | |||
| Total Liabilities and Stockholders’ Deficit | $ | 863,727 | ||
The accompanying notes are an integral part of these financial statements.
| 12 |
Social Detention , Inc.
Pro Forma Statements of Operations
(Unaudited subject to change)
The accompanying notes are an integral part of these financial statements
| 13 |
Social Detention , Inc.
Condensed Consolidated Statement of Changes in Stockholders’ Deficit
(Unaudited subject to change)
| Common | Accumulated | Stockholders’ | ||||||||||||||||||||||
| Stock | Amount | Paid in | Consolidation | Equity | Equity | |||||||||||||||||||
| Shares | ($0.001Par) | Capital | Accounting | (Deficit) | (Deficit) | |||||||||||||||||||
| Balances - March 31, 2018 | 183,753,333 | $ | 183,753 | $ | 220,847 | $ | (369,647 | ) | $ | 132,000 | $ | 166,953 | ||||||||||||
| 0 | $ | - | ||||||||||||||||||||||
| Changes | $ | - | $ | 176,274 | $ | 176,274 | ||||||||||||||||||
| Balances - June 30, 2018 | 183,753,333 | $ | 183,753 | $ | 220,847 | $ | (369,647 | ) | $ | 308,274 | $ | 343,227 | ||||||||||||
The accompanying notes are an integral part of these condensed financial statements
| 14 |
Social Detention , Inc.
Pro Forma Condensed Statement of Cash Flows
(Unaudited subject to change)
| For Year ended | ||||
| June 30, 2018 | ||||
| Cash Flows From Operating Activities | ||||
| Net Income ( Loss) | $ | 308,274 | ||
| Amortization and Impairment | ||||
| Depreciation | ||||
| Activities | $ | 308,274 | ||
| Accounts Payable | 472,325 | |||
| Accounts Receivable | (577,000 | ) | ||
| Accruded Interest | - | |||
| Other Accrued Expenses | - | |||
| Changes in Operating Assets and Liabilities | $ | (104,675 | ) | |
| Net Cash Used by Operating Activities | $ | 203,599 | ||
| Paid in Capital | 220,847 | |||
| Consolidated Accounting | (97,125 | ) | ||
| Retained Earnings | (220,847 | ) | ||
| Shares Issued for Cash | - | |||
| Cash Flows from Financing Activities | (97,125 | ) | ||
| Net Increase /( Decrease) in Cash | 106,474 | |||
| Cash Beginning of Period | 42,953 | |||
| Cash, End of Period | $ | 149,427 | ||
The accompanying notes are an integral part of these financial statements.
| 15 |
June 30, 2018
| 16 |
NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Organization and History
Social Detention, Inc. (the “Company” or “Social Detention”) was incorporated in the State of Colorado on May 20, 2015.
On May 31, 2015 Chenghui Realty Holding Company, Colorado. merged with Chenghui Realty Holding Company of Nevada, with the Colorado entity being the surviving entity. The surviving entity was then renamed Social Detention, Inc.
On September 26, 2016, Social Detention, Inc., a Delaware corporation, acquired an ownership interest in Social Detention, Inc., a Colorado Corporation and its assets which in turn had acquired total interest in RL Consulting, a company that was closely held. Social Detention, Inc., of Colorado will be the surviving entity.
The Company is a Colorado corporation organized for the purpose of engaging in any lawful business. The Company’s acquisition of RL Consulting gives it a basis of operations in the security infrastructure and any other related business activities as of the date of these financial statements. It currently trades on the Pink Sheet under the symbol “SODE”. The Company’s fiscal period end is June 30st.
The financial statements include the Company and its wholly owned subsidiaries; all significant inter- company balances and transactions are eliminated.
Mergers And Acquisitions
On November 23, 2016, the company acquired RL Consulting.
Management, Operations and Risk
Social Detention is in the business of building infrastructure. With its acquisition of RL Consulting, it has a long history of successful contract awards, and has launched a program whereby it intends to grow through acquisition in the coming fiscal year. The president, Mr Robert P . Legg II has been able to build these companies in the past a from startup to companies that generate over $15M in annual revenues. He intends to build a network of small providers into a large network that will both be able to provide synergistic support to the other parties, by means of production capabilities, financing and other relationships. To the bigger benefit of shared contracts. The goal in the next year is to acquire 3-5 smaller entities that are generating between $1-5M in revenue an year today, and to be able to secure over $15M in contracts for each in the coming 12 months.
Authorized Common Stock
As of June 30, 2018, Social Detention had an authorized Class A Common Stock capital of 200,000,000 shares with a par value of $.001. Authorized preferred stands at 25,000,000 shares with a par value of $.001. These numbers remain unchanged as of the date of this filing and the Company has no current plans for any increase thereof.
Issued and Outstanding Common Stock
As of June 30, 2018, Social Detention had a total of 183,753,333 Common Shares outstanding.
On November 24, 2016, the Company issued 100,000,000 Common Shares in exchange for $10,000 accrued debts owed to Robert P. Legg II and controlling interest in RL Consulting.
On May 17, 2017 16,533 shares of Series B convertible preferred shares were converted into common shares under the provisions and conversions rights of the shares.
| 17 |
The Company has not entered into any agreement to promote its stock nor has it authorized any third party to conduct any type of promotion on its behalf.
Authorized and Issued and Outstanding Preferred Stock
As of June 30, 2018, Social Detention had authorized 1,000,000 Class A Preferred Shares of which 1,000,000 are outstanding.
As of June 30, 2018, Social Detention had authorized 11,000,000 Class B Preferred Shares of which 10,990,000 are outstanding.
Transfer Agent
During the quarter ended June 30, 2018, the Company’s transfer agent, Pacific Stock Transfer, and the Company have reconciled the transfer agent records with the records of the Company and those of the State of Colorado.
Additional Organizational Items
None
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents
The Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties and all highly liquid investments with an original maturity of three months or less as cash equivalents.
Revenue recognition
The Company has realized minimal revenues from operations. The Company recognizes revenues when the sale and/or distribution of products is complete, risk of loss and title to the products have transferred to the customer, there is persuasive evidence of an agreement, acceptance has been approved by the customer, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable. Net sales will be comprised of gross revenues less expected returns, trade discounts, and customer allowances that will include costs associated with off-invoice markdowns and other price reductions, as well as trade promotions and coupons. The incentive costs will be recognized at the later of the date on which the Company recognized the related revenue or the date on which the Company offers the incentive.
Basic and Diluted Loss per Share
The Company computes loss per share in accordance with “ASC-260,” “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common share during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Diluted loss per share excludes all potential common shares if their effect is anti-dilutive.
| 18 |
Income Taxes
The Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases.
The Company maintains a valuation allowance with respect to deferred tax asset. Social Detention establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward period under Federal tax laws.
Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the reliability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change estimate.
Carrying Value, Recoverability and Impairment of Long-Lived Assets
The Company has adopted paragraph 360-10-35-17 of FASB Accounting Standards Codification for its long-lived assets. The Company’s long –lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.
The company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the assets expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.
The Company considers the following to be some examples of important indicators that may trigger an impairment review; (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner of use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.
The impairment charges, if any, are included in operating expenses in the accompanying statements of operations.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and D7losure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
The Company’s significant estimates include income taxes provision and valuation allowance of deferred tax assets; the fair value of financial instruments; the carrying value and recoverability of long-lived assets, and the assumption that the Company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.
| 19 |
Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates.
Fair value of Financial Instruments
The estimated fair values of financial instruments were determined by management using available market information and appropriate valuation methodologies. The carrying amounts of financial instruments including cash approximate their fair value because of their short maturities.
Long Lived Assets
In accordance with ASC 350 the Company regularly reviews the carrying value of intangible and other long lived assets for the existence of facts or circumstances both internally and externally that suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long lived asset exceeds its fair value.
Stock-based Compensation
The Company accounts for stock-based compensation issued to employees based on FASB accounting standard for Share Based Payment. It requires an entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award – the requisite service period (usually the vesting period). It requires that the compensation cost relating to share -based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. The scope of the FASB accounting standard includes a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans.
Recent pronouncements
Management has evaluated accounting standards and interpretations issued but not yet effective as of June 30, 2016, and does not expect such pronouncements to have a material impact on the Company’s financial position, operations, or cash flows.
NOTE 3 – STOCKHOLDER’S DEFICIT
The total number of Class A Common Stock authorized to be issued by the Company is 200,000,000 shares with a par value of $0.001 per share. The Company is authorized to issue 25,000,000 shares of preferred stock with a par value of $0.001 per share. As of June 30, 2018, 11,990,000 preferred shares had been issued.
As at June 30, 2018 the total number of Class A Common Shares outstanding was 183,753,333. The Company has an ongoing program of private placements to raise funds to support the operations.
NOTE 4 – GOING CONCERN
Even though these financial statements are not audited it is management’s opinion that an auditor would express a “going concern” statement. The Company has an accumulated deficit of $196,952 and is solely reliant on raising money for operations by seeking loans and selling its common stock. Based on this there can be no assurances that the Company will be successful in these fund-raising activities.
| 20 |
NOTE 5 – RELATED PARTY NOTE
As at June 30, 2018 the Company owes $12,000 to Robert P . Legg II on a zero interest note
NOTE 6 –CONVERTIBLE NOTES PAYABLE
In the Company’s ongoing efforts to raise money for acquisitions and operations the Company has received $28,300 in cash and has issued Convertible Notes Payable in like amount. In accordance with PCAOB standards these notes are considered to be a derivative instrument and accordingly have had a conversion expense recorded on the books of the Company of $28,300. This expense was determined using the Black-Scholes valuation model.
NOTE 7 – DEPOSITS AGAINST PURCHASE OF BUSINESSES
As at June 30, 2016 the Company has made payment of stock for the control shares of RL Consulting, Inc. to the owners/stockholders.
NOTE 8 - SUBSEQUENT EVENTS
The Company has investigated and determined that there are no substantive events that have occurred since the end of this reporting period and the date of the filing of theses financial statements.
| 21 |
A Colorado Corporation
Disclosure Statement for Period End June 30, 2018
Information Provided Pursuant to
Rule 15c2-11 of the Securities and
Exchange Act of 1934, as Amended
| 22 |
SOCIAL DETENTION, INC.,
| 1) | Name of the issuer and its predecessors (if any) |
| SOCIAL DETENTION, INC. | |
| 2) | Address of the issuer’s principal executive offices |
Company Headquarters
Address 1: 3000F Danville Blvd. Suite 145
Address 2: Alamo, CA 94507
Address 3
Phone:
Email: blegg@sodetention.com
Website(s): www.sodetention.com
| 3) | Security Information |
Additional class of securities:
Trading Symbol: SODE
Exact title and class of securities outstanding: CS1 COMMON
CUSIP: 164119109
Par or Stated Value: 0.0001
Total shares authorized: 200,000,000 as of: June 30, 2018
Total shares outstanding: 183,753,333 as of: June 30, 2018
Additional class of securities:
Exact title and class of securities outstanding: Series A Convertible Preferred
NO CUSIP
Par or Stated Value: 0.0001
Total shares authorized: 1,000,000 as of: June 30, 2018
Total shares outstanding: 1,000,000 as of: June 30, 2018
Additional class of securities:
Exact title and class of securities outstanding: Series B Convertible Preferred
NO CUSIP
Par or Stated Value: 0.0001
Total shares authorized: 11,000,000 as of: June 30, 2018
Total shares outstanding: 10,990,000 as of: June 30, 2018
| 23 |
We are authorized to issue 25,000,000 preferred stock, par value $0.0001. We currently have two series of Preferred stock outstanding, Our Series A convertible Preferred and Series B Convertible Preferred.
On April 25, 2015, our Board of Directors approved the designation of 1,000,000 preferred shares of Series A Convertible Preferred Stock , par value $0.0001, and the designation of 11,000,000 preferred shares of Series B Convertible Preferred Stock. The rights of both classes of stock is outlined below.
The Following is a summary of the rights and preferences:
Dividends. The Series A and Series B Convertible Preferred Stock are not entitled to receive dividends
Liquidation Preference. The holders of each share of Series A and Series B Convertible Preferred Stock then outstanding shall be entitled to be paid, out of the Available Funds and Assets, and prior and in preference to any payment or distribution (or any setting apart of any payment or distribution) of any Available Funds and Assets on any shares of Common Stock or subsequent series of preferred stock, an amount per share equal to the Original Issue Price of the Series A Convertible Preferred Stock plus all declared but unpaid dividends on the Series A and Series B Convertible Preferred Stock
Conversion Ratio. Each share of Series A and Series B Convertible Preferred Stock shall be convertible, at the option of the holder thereof, at any time after issuance of such share into 1,000 shares of common stock.
Voting Rights. Each share of Series A Convertible Preferred Stock shall be entitled to 1,000 votes on any matter brought before our common stockholders. Each share of Series B Convertible Preferred Stock shall be entitled to 1 vote on any matter brought before our common stockholders.
Redemption. The Series A and Series B Convertible Preferred Stock is not redeemable.
Protective Measures. We may not take any of the following actions without the approval of a majority of the holders of the outstanding Series A Convertible Preferred Stock: (i) effect a sale of all or substantially all of our assets or which results in the holders of our capital stock prior to the transaction owning less than fifty percent (50%) of the voting power of the our capital stock after the transaction, (ii) alter or change the rights, preferences, or privileges of the Series A Convertible Preferred Stock, (iii) increase or decrease the number of authorized shares of Series A Convertible Preferred Stock, (iv) authorize the issuance of securities having a preference over or on par with the Series A Convertible Preferred Stock, or (v) effectuate a forward or reverse stock split or dividend of the Corporation’s common stock.
As of the end of our fiscal period ending June 30, 2018, we had 1,000,000 of our Series A Convertible Preferred Stock issued and outstanding. As of the end of June 30, 2018 we had 11,000,000 of our Series B Convertible Preferred Stock issued and outstanding.
Transfer Agent
Name: Pacific Stock Transfer
Address 1: 6425 Via Austi Pkwy, Suite 300
Address 2: Las Vegas, NV 89119
Address 3:
Phone: 702.361.3033
Is the Transfer Agent registered under the Exchange Act?* Yes: X No: __
List any restrictions on the transfer of security:
Of our outstanding shares of common stock, 161,448,400 bear a restricted legend substantially in the following form “The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended and may not be sold or transferred without registration under said Act or an exemption therefrom”.
| 24 |
There have been NO trading suspension orders issued by the SEC in the past 12 months.
We have had no stock splits, dividends, or spin-offs in the past 12 months,
| 4) | Issuance History |
List below any events, in chronological order, that resulted in changes in total shares outstanding by the issuer in the past two fiscal years and any interim period. The list shall include all offerings of equity securities, including debt convertible into equity securities, whether private or public, and all shares or any other securities or options to acquire such securities issued for services, describing (1) the securities, (2) the persons or entities to whom such securities were issued and (3) the services provided by such persons or entities. The list shall indicate:
| A. | The nature of each offering (e.g., Securities Act Rule 504, intrastate, etc.); | |
| On November 24, 2016, the Company issued 100,000,000 Common Shares in exchange for $10,000 accrued debts owed to Robert P . Legg II and controlling interest in RL Consulting. | ||
| On May 17, 2017 16,553,333 shares were issued pursuant to conversion of convertible series B shares under the terms of the conversion provisions for the shares. | ||
| No offerings for the sale of securities in the last 2 years | ||
| B. | Any jurisdictions where the offering was registered or qualified; | |
| None | ||
| C. | The number of shares offered; | |
| N/A | ||
| D. | The number of shares sold; | |
| None | ||
| E. | The price at which the shares were offered, and the amount actually paid to the issuer; | |
| N/A | ||
| F. | The trading status of the shares; and | |
| N/A | ||
| G. | Whether the certificates or other documents that evidence the shares contain a legend (1) stating that the shares have not been registered under the Securities Act and (2) setting forth or referring to the restrictions on transferability and sale of the shares under the Securities Act. | |
| N/A |
| 25 |
| 5) | Financial Statements | |
| Financials are attached to this document. | ||
| 6) | Describe the Issuer’s Business, Products and Services | |
| A. | Business operations: | |
|
Social Detention is in the business of building infrastructure. With its acquisition of RL Consulting, it has a long history of successful contract awards, and has launched a program whereby it intends to grow through acquisition in the coming fiscal year. The president, Mr Robert P . Legg II has been able to build these companies in the past a from startup to companies that generate over $15M in annual revenues. He intends to build a network of small providers into a large network that will both be able to provide synergistic support to the other parties, by means of production capabilities, financing and other relationships. To the bigger benefit of shared contracts. The goal in the next year is to acquire 3-5 smaller entities that are generating between $1-5M in revenue an year today, and to be able to secure over $15M in contracts for each in the coming 12 months. |
||
| The company intends to grow through acquisitions. It has plans to expand in the coming years by acquiring strategically placed companies in the industry. | ||
| B. | Date and State (or Jurisdiction) of Incorporation: | |
| We were incorporated on May 20, 2015 | ||
| C. | the issuer’s primary and secondary SIC Codes; | |
| 6719 – Holding companies, misc | ||
| D. | the issuer’s fiscal year end date; | |
| 12-31 | ||
| E. | principal products or services, and their markets; | |
| The construction of infrastructure and security buildings, roadways, rail lines, etc. | ||
| 7) | Describe the Issuer’s Facilities | |
| Our executive offices are located at 3000F Danville Blvd, Alamo CA 94507. This office space is leased on a month-to-month basis. | ||
| 8) | Officers, Directors, and Control Persons |
A. Names of Officers, Directors, and Control Persons.
| Name/Address | Title | |||
|
Robert P. Legg II |
President, CEO, Director | |||
|
3000 F Danville Blvd Suite 145 |
||||
| Alamo, CA 94507 |
| 26 |
| B. | Legal/Disciplinary History. |
| 1. | A conviction in a criminal proceeding or named as a defendant in a pending criminal proceeding (excluding traffic violations and other minor offenses); | |
| None. | ||
| 2. | The entry of an order, judgment, or decree, not subsequently reversed, suspended or vacated, by a court of competent jurisdiction that permanently or temporarily enjoined, barred, suspended or otherwise limited such person’s involvement in any type of business, securities, commodities, or banking activities; | |
| None. | ||
| 3. | A finding or judgment by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission, the Commodity Futures Trading Commission, or a state securities regulator of a violation of federal or state securities or commodities law, which finding or judgment has not been reversed, suspended, or vacated; or | |
| None. | ||
| 4. | The entry of an order by a self-regulatory organization that permanently or temporarily barred suspended or otherwise limited such person’s involvement in any type of business or securities activities. | |
| None. |
| A. | Beneficial Shareholders. The following are the beneficial owners having greater than 10%of any class of stock. |
| Common Stock/Preferred Stock | ||||||||||
| Title Class |
Name
and Address of
Beneficial Owner |
Amount
and
Nature of Beneficial Ownership |
Percent of Class | |||||||
| Common Stock |
Robert
P. Legg II
3000 F Danville Blvd, Ste 145 Alamo, CA 94507 |
100,000,000 | 59.8 | % | ||||||
| Common Stock |
Hui
Chen
Room 302 No 14 Alley 555 Wen XI Rd |
53,138,400 | 31.8 | % | ||||||
|
Series
A
Convertible Preferred |
ZHA
Bei Qu, 200435 Shanghai
Robert P. Legg II 3000 F Danville Blvd Ste 145 Alamo, CA 94507 |
1,000,000 | (1) | 100 | % | |||||
|
Series
B
Convertible Preferred |
Robert P Legg II
3000 F Danville Blvd Ste 145 Alamo, CA 94507 |
10,000,000 | 90.9 | % | ||||||
(1)1,000,000 total Series A Convertible Preferred authorized and Issued convertible equate to Robert P. Legg II having over 1,000,000,000 votes
| 27 |
| 9) | Third Party Providers |
| Legal Counsel | ||
| Name: | Alexander E. Kuhne | |
| Firm: | ||
| Address 1: | 3317 Woodward Avenue, Suite 289 | |
| Address 2: | Birmingham, MI 48009-0913 | |
| Phone: | 248.396.3937 | |
| Email: | lexkuhne@gmail.com |
| 10) | Issuer Certification |
I, Robert P / Legg II, certify that:
1. I have reviewed this Quarterly Disclosure Statement of Social Detention, Inc.;
2. Based on my knowledge, this disclosure statement does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this disclosure statement; and
3. Based on my knowledge, the financial statements, and other financial information included or incorporated by reference in this disclosure statement, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this disclosure statement.
June 30, 2018
| /s/ Robert P. Legg II | |
| Chief Executive Officer and Chief Financial Officer |
| 28 |
SOCIAL DETENTION, INC.
PERIOD END REPORT
FOR THE PERIOD
ENDED MARCH 31, 2018
FINANCIAL STATEMENTS
| 29 |
Social Detention, Inc.
(SOCIAL DETENTION)
3000 F Danville Blvd, Suite 145
Alamo, CA 94507
SOCIAL DETENTION UNAUDITED BALANCE
SHEET & FINANCIAL STATEMENTS
Issuer’s most recent Pro Forma Balance Sheet & Financial Statements for the
period ended March 31, 2018
| 30 |
| 31 |
Social Detention , Inc.
(Unaudited subject to change)
| March 31, 2018 | ||||
| Current assets | ||||
| Cash in bank | $ | 168,953 | ||
| Accounts receivable | 10,000 | |||
| Total Current assets | 178,953 | |||
| Other assets | ||||
| Long term investment | 28,300 | |||
| Total other assets | 28,300 | |||
| Total Assets | $ | 207,253 | ||
| IES & STOCKHOLDERS’ DEFICIT | ||||
| Current liabilities | ||||
| Accounts payable | $ | - | ||
| Advances payable | - | |||
| Note payable - related party | 12,000 | |||
| Notes payable | 28,300 | |||
| Total current liabilities | 40,300 | |||
| Stockholders’ Deficit | ||||
| Preferred stock, 25,000,000 shares authorized with $0.001 par value. 11,990,000 shares issued or outstanding | - | |||
| Common stock, 200,000,000 shares with $0.001 par value. 183,753,333 issued outstanding at each period respectively | 183,753 | |||
| Additional paid in capital | 220,847 | |||
| Consolidation accounting | (369,647 | ) | ||
| Accumulated deficit | 132,000 | |||
| - | ||||
| Total Stockholders’ Deficit | 166,953 | |||
| Total Liabilities and Stockholders’ Deficit | $ | 207,253 | ||
The accompanying notes are an integral part of these financial statements.
| 32 |
Social Detention , Inc.
Pro Forma Statements of Operations
(Unaudited subject to change)
| Period Ended | ||||
| March 31, 2018 | ||||
| REVENUE | ||||
| Income | $ | 412,680 | ||
| Cost of revenues | ||||
| GROSS PROFIT | 412,680 | |||
| Operating Expenses: | ||||
| Advertising | 400 | |||
| Automobile | 4,500 | |||
| Contracted Services | 103,000 | |||
| Depreciation Expense | 2,200 | |||
| Goodwill impairment | 5,900 | |||
| Insurance Expense | 6,300 | |||
| Materials | 146,580 | |||
| Office Supplies | 1,400 | |||
| Rental Equipment | 6,000 | |||
| Total Interest Fees | 1,400 | |||
| Travel | 3,000 | |||
| Subcontractors | - | |||
| General and administrative | - | |||
| Total operating expenses | 280,680 | |||
| Income (loss) from operations | $ | 132,000 | ||
| Other income (expense) | ||||
| Interest expense | - | |||
| Other income (expense) net | - | |||
| Net income (loss) | $ | 132,000 | ||
| Net income (loss) per share (Basic and fully diluted) | $ | 0.0007 | ||
| Weighted average number of common shares outstanding | 183,753,333 | |||
The accompanying notes are an integral part of these financial statements
| 33 |
Social Detention , Inc.
Condensed Consolidated Statement of Changes in Stockholders’ Deficit
(Unaudited subject to change)
| Common Stock | Amount | Paid in | Consolidation | Accumulated Equity | Stockholders’ Equity | |||||||||||||||||||
| Shares | ($0.001 Par) | Capital | Accounting | (Deficit) | (Deficit) | |||||||||||||||||||
| Balances - December 31, 2016 | 183,753,333 | $ | 183,753 | $ | (16,553 | ) | $ | (272,522 | ) | $ | 237,400 | $ | 132,078 | |||||||||||
| 0 | $ | - | ||||||||||||||||||||||
| $ | 237,400 | $ | (97,125 | ) | $ | (105,400 | ) | $ | 34,875 | |||||||||||||||
| Balances - March 31, 2018 | 183,753,333 | $ | 183,753 | $ | 220,847 | $ | (369,647 | ) | $ | 132,000 | $ | 166,953 | ||||||||||||
The accompanying notes are an integral part of these condensed financial statements
| 34 |
Social Detention , Inc.
Pro Forma Condensed Statement of Cash Flows
(Unaudited subject to change)
| For Year ended | ||||
| March 31, 2018 | ||||
| Cash Flows From Operating Activities | ||||
| Net Income ( Loss) | $ | 132,000 | ||
| Amortization and Impairment | ||||
| Depreciation | ||||
| Activities | $ | 132,000 | ||
| Accounts Payable | (7,875 | ) | ||
| Accounts Receivable | 99,000 | |||
| Accruded Interest | - | |||
| Other Accrued Expenses | - | |||
| Changes in Operating Assets and Liabilities | $ | 91,125 | ||
| Net Cash Used by Operating Activities | $ | 223,125 | ||
| Paid in Capital | - | |||
| Consolidated Accounting | (97,125 | ) | ||
| Exstingishment of Debt/Conversion of Notes Payable | - | |||
| Shares Issued for Cash | - | |||
| Cash Flows from Financing Activities | (97,125 | ) | ||
| Net Increase /( Decrease) in Cash | 126,000 | |||
| Cash Beginning of Period | 42,953 | |||
| Cash, End of Period | $ | 168,953 | ||
The accompanying notes are an integral part of these financial statements.
| 35 |
NOTES TO FINANCIAL STATEMENTS
March 31, 2018
| 36 |
NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Organization and History
Social Detention, Inc. (the “Company” or “Social Detention”) was incorporated in the State of Colorado on May 20, 2015.
On May 31, 2015 Chenghui Realty Holding Company, Colorado. merged with Chenghui Realty Holding Company of Nevada, with the Colorado entity being the surviving entity. The surviving entity was then renamed Social Detention, Inc..
On September 26, 2016, Social Detention, Inc., a Delaware corporation, acquired an ownership interest in Social Detention, Inc., a Colorado Corporation and its assets which in turn had acquired total interest in RL Consulting, a company that was closely held. Social Detention, Inc., of Colorado will be the surviving entity.
The Company is a Colorado corporation organized for the purpose of engaging in any lawful business. The Company’s acquisition of RL Consulting gives it a basis of operations in the security infrastructure and any other related business activities as of the date of these financial statements. It currently trades on the Pink Sheet under the symbol “SODE”. The Company’s fiscal period end is March 31st.
The financial statements include the Company and its wholly owned subsidiaries; all significant inter- company balances and transactions are eliminated.
Mergers And Acquisitions
On November 23, 2016, the company acquired RL Consulting..
Management, Operations and Risk
Social Detention is in the business of building infrastructure. With its acquisition of RL Consulting, it has a long history of successful contract awards, and has launched a program whereby it intends to grow through acquisition in the coming fiscal year. The president, Mr Robert P Legg II has been able to build these companies in the past a from startup to companies that generate over $15M in annual revenues. He intends to build a network of small providers into a large network that will both be able to provide synergistic support to the other parties, by means of production capabilities, financing and other relationships. To the bigger benefit of shared contracts. The goal in the next year is to acquire 3-5 smaller entities that are generating between $1-5M in revenue an year today, and to be able to secure over $15M in contracts for each in the coming 12 months.
Authorized Common Stock
As of March 31, 2018, Social Detention had authorized 200,000,000 share s Class A Common Stock with a par value of $.001. Authorized preferred stands at 25,000,000 shares with a par value of $.001. These numbers remain unchanged as of the date of this filing and the Company has no current plans for any increase thereof.
Issued and Outstanding Common Stock
As of March 31, 2018, Social Detention had a total of 183,753,333 Common Shares outstanding.
On November 24, 2016, the Company issued 100,000,000 Common Shares in exchange for $10,000 accrued debts owed to Robert P. Legg II and controlling interest in RL Consulting.
| 37 |
The Company has not entered into any agreement to promote its stock nor has it authorized any third party to conduct any type of promotion on its behalf.
Authorized and Issued and Outstanding Preferred Stock
As of March 31, 2018, Social Detention had authorized 1,000,000 Class A Preferred Shares of which 1,000,000 are outstanding.
As of March 31, 2018, Social Detention had authorized 11,000,000 Class B Preferred Shares of which 10,990,000 are outstanding.
Transfer Agent
During the quarter ended March 31, 2018, the Company’s transfer agent, Pacific Stock Transfer, and the Company have reconciled the transfer agent records with the records of the Company and those of the State of Colorado.
Additional Organizational Items
None
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents
The Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties and all highly liquid investments with an original maturity of three months or less as cash equivalents.
Revenue recognition
The Company has realized minimal revenues from operations. The Company recognizes revenues when the sale and/or distribution of products is complete, risk of loss and title to the products have transferred to the customer, there is persuasive evidence of an agreement, acceptance has been approved by the customer, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable. Net sales will be comprised of gross revenues less expected returns, trade discounts, and customer allowances that will include costs associated with off-invoice markdowns and other price reductions, as well as trade promotions and coupons. The incentive costs will be recognized at the later of the date on which the Company recognized the related revenue or the date on which the Company offers the incentive.
Basic and Diluted Loss per Share
The Company computes loss per share in accordance with “ASC-260,” “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common share during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Diluted loss per share excludes all potential common shares if their effect is anti-dilutive.
Income Taxes
The Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases.
| 38 |
The Company maintains a valuation allowance with respect to deferred tax asset. Social Detention establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward period under Federal tax laws.
Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the reliability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change estimate.
Carrying Value, Recoverability and Impairment of Long-Lived Assets
The Company has adopted paragraph 360-10-35-17 of FASB Accounting Standards Codification for its long-lived assets. The Company’s long –lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.
The company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the assets expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.
The Company considers the following to be some examples of important indicators that may trigger an impairment review; (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner of use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.
The impairment charges, if any, are included in operating expenses in the accompanying statements of operations.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and D7losure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
The Company’s significant estimates include income taxes provision and valuation allowance of deferred tax assets; the fair value of financial instruments; the carrying value and recoverability of long-lived assets, and the assumption that the Company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.
Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates.
| 39 |
Fair value of Financial Instruments
The estimated fair values of financial instruments were determined by management using available market information and appropriate valuation methodologies. The carrying amounts of financial instruments including cash approximate their fair value because of their short maturities.
Long Lived Assets
In accordance with ASC 350 the Company regularly reviews the carrying value of intangible and other long lived assets for the existence of facts or circumstances both internally and externally that suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long lived asset exceeds its fair value.
Stock-based Compensation
The Company accounts for stock-based compensation issued to employees based on FASB accounting standard for Share Based Payment. It requires an entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award – the requisite service period (usually the vesting period). It requires that the compensation cost relating to share -based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. The scope of the FASB accounting standard includes a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans.
Recent pronouncements
Management has evaluated accounting standards and interpretations issued but not yet effective as of March 31, 2016, and does not expect such pronouncements to have a material impact on the Company’s financial position, operations, or cash flows.
NOTE 3 – STOCKHOLDER’S DEFICIT
The total number of Class A Common Shares authorized that may be issued by the Company is 200,000,000 shares with a par value of $0.001 per share. The Company is authorized to issue 25,000,000 shares of preferred stock with a par value of $0.001 per share. As at March 31, 2018 there 11,990,000 preferred shares have been issued.
As at March 31, 2018 the total number of Class A Common Shares outstanding was 183,753,333 . The Company has an ongoing program of private placements to raise funds to support the operations.
NOTE 4 – GOING CONCERN
Even though these financial statements are not audited it is management’s opinion that an auditor would express a “going concern” statement. The Company has an accumulated deficit of $196,952 and is solely reliant on raising money for operations by seeking loans and selling its common stock. Based on this there can be no assurances that the Company will be successful in these fund-raising activities.
| 40 |
NOTE 5 – RELATED PARTY NOTE
As at March 31, 2018 the Company owes $12,000 to Robert P/ Legg II on a zero interest note
NOTE 6 –CONVERTIBLE NOTES PAYABLE
In the Company’s ongoing efforts to raise money for acquisitions and operations the Company has received $28,300 in cash and has issued Convertible Notes Payable in like amount. In accordance with PCAOB standards these notes are considered to be a derivative instrument and accordingly have had a conversion expense recorded on the books of the Company of $28,300. This expense was determined using the Black-Scholes valuation model.
NOTE 7 – DEPOSITS AGAINST PURCHASE OF BUSINESSES
As at March 31, 2016 the Company has made payment of stock for the control shares of RL Consulting, Inc. to the owners/stockholders.
NOTE 8 - SUBSEQUENT EVENTS
The Company has investigated and determined that there are no substantive events that have occurred since the end of this reporting period and the date of the filing of theses financial statements.
| 41 |
A Colorado Corporation
Disclosure Statement for Period End March 31, 2018
Information Provided Pursuant to
Rule 15c2-11 of the Securities and
Exchange Act of 1934, as Amended
| 42 |
SOCIAL DETENTION, INC.,
| 1) | Name of the issuer and its predecessors (if any) |
SOCIAL DETENTION, INC.
| 2) | Address of the issuer’s principal executive offices |
Company Headquarters
Address 1: 3000F Danville Blvd. Suite 145
Address 2: Alamo, CA 94507
Address 3
Phone:
Email: blegg@sodetention.com
Website(s): www.sodetention.com
| 3) | Security Information |
Additional class of securities:
Trading Symbol: SODE
Exact title and class of securities outstanding: CS1 COMMON
CUSIP: 164119109
Par or Stated Value: 0.0001
Total shares authorized: 2 00,000,000 as of: March 31, 2018
Total shares outstanding: 183,753,333 as of: March 31, 2018
Additional class of securities:
Exact title and class of securities outstanding: Series A Convertible Preferred
NO CUSIP
Par or Stated Value: 0.0001
Total shares authorized: 1,000,000 as of: March 31, 2018
Total shares outstanding: 1,000,000 as of: March 31, 2018
Additional class of securities:
Exact title and class of securities outstanding: Series B Convertible Preferred
NO CUSIP
Par or Stated Value: 0.0001 11,000,000 as of: March 31, 2018
Total shares authorized:
Total shares outstanding: 10,990,000 as of: March 31, 2018
| 43 |
We are authorized to issue 25,000,000 preferred stock, par value $0.0001. We currently have two series of Preferred stock outstanding, Our Series A convertible Preferred and Series B Convertible Preferred.
On April 25, 2015, our Board of Directors approved the designation of 1,000,000 preferred shares of Series A Convertible Preferred Stock , par value $0.0001, and the designation of 11,000,000 preferred shares of Series B Convertible Preferred Stock. The rights of both classes of stock is outlined below.
The Following is a summary of the rights and preferences:
Dividends. The Series A and Series B Convertible Preferred Stock are not entitled to receive dividends
Liquidation Preference. The holders of each share of Series A and Series B Convertible Preferred Stock then outstanding shall be entitled to be paid, out of the Available Funds and Assets, and prior and in preference to any payment or distribution (or any setting apart of any payment or distribution) of any Available Funds and Assets on any shares of Common Stock or subsequent series of preferred stock, an amount per share equal to the Original Issue Price of the Series A Convertible Preferred Stock plus all declared but unpaid dividends on the Series A and Series B Convertible Preferred Stock
Conversion Ratio. Each share of Series A and Series B Convertible Preferred Stock shall be convertible, at the option of the holder thereof, at any time after issuance of such share into 1,000 shares of common stock.
Voting Rights. Each share of Series A Convertible Preferred Stock shall be entitled to 1,000 votes on any matter brought before our common stockholders. Each share of Series B Convertible Preferred Stock shall be entitled to 1 vote on any matter brought before our common stockholders.
Redemption. The Series A and Series B Convertible Preferred Stock is not redeemable.
Protective Measures. We may not take any of the following actions without the approval of a majority of the holders of the outstanding Series A Convertible Preferred Stock: (i) effect a sale of all or substantially all of our assets or which results in the holders of our capital stock prior to the transaction owning less than fifty percent (50%) of the voting power of the our capital stock after the transaction, (ii) alter or change the rights, preferences, or privileges of the Series A Convertible Preferred Stock, (iii) increase or decrease the number of authorized shares of Series A Convertible Preferred Stock, (iv) authorize the issuance of securities having a preference over or on par with the Series A Convertible Preferred Stock, or (v) effectuate a forward or reverse stock split or dividend of the Corporation’s common stock.
As of the end of our fiscal period ending March 31, 2018, we had 1,000,000 of our Series A Convertible Preferred Stock issued and outstanding. As of the end of March 31, 2018 we had 11,000,000 of our Series B Convertible Preferred Stock issued and outstanding.
Transfer Agent
Name: Pacific Stock Transfer
Address 1: 6425 Via Austi Pkwy, Suite 300
Address 2: Las Vegas, NV 89119
Address 3:
Phone: 702.361.3033
Is the Transfer Agent registered under the Exchange Act?* Yes: X No:
List any restrictions on the transfer of security:
Of our outstanding shares of common stock, 161,448,400 bear a restricted legend substantially in the following form “The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended and may not be sold or transferred without registration under said Act or an exemption therefrom”.
| 44 |
There have been NO trading suspension orders issued by the SEC in the past 12 months.
We have had no stock splits, dividends, or spin-offs in the past 12 months,
| 4) | Issuance History |
List below any events, in chronological order, that resulted in changes in total shares outstanding by the issuer in the past two fiscal years and any interim period. The list shall include all offerings of equity securities, including debt convertible into equity securities, whether private or public, and all shares or any other securities or options to acquire such securities issued for services, describing (1) the securities, (2) the persons or entities to whom such securities were issued and (3) the services provided by such persons or entities. The list shall indicate:
| A. | The nature of each offering (e.g., Securities Act Rule 504, intrastate, etc.); |
None issued in last 2 years,
| B. | Any jurisdictions where the offering was registered or qualified; |
None
| C. | The number of shares offered; |
N/A
| D. | The number of shares sold; |
None
| E. | The price at which the shares were offered, and the amount actually paid to the issuer; |
N/A
| F. | The trading status of the shares; and |
N/A
| G. | Whether the certificates or other documents that evidence the shares contain a legend (1) stating that the shares have not been registered under the Securities Act and (2) setting forth or referring to the restrictions on transferability and sale of the shares under the Securities Act. |
N/A
| 5) | Financial Statements |
Financials are attached to this document.
| 6) | Describe the Issuer’s Business, Products and Services |
| 45 |
| A. | Business operations: |
Social Detention is in the business of building infrastructure. With its acquisition of RL Consulting, it has a long history of successful contract awards, and has launched a program whereby it intends to grow through acquisition in the coming fiscal year. The president, Mr Robert P Legg II has been able to build these companies in the past a from startup to companies that generate over $15M in annual revenues. He intends to build a network of small providers into a large network that will both be able to provide synergistic support to the other parties, by means of production capabilities, financing and other relationships. To the bigger benefit of shared contracts. The goal in the next year is to acquire 3-5 smaller entities that are generating between $1-5M in revenue an year today, and to be able to secure over $15M in contracts for each in the coming 12 months.
The company intends to grow through acquisitions. It has plans to expand in the coming years by acquiring strategically placed companies in the industry.
| B. | Date and State (or Jurisdiction) of Incorporation: |
We were incorporated on May 20, 2015
| C. | the issuer’s primary and secondary SIC Codes; |
6719 – Holding companies, misc
| D. | the issuer’s fiscal year end date; |
12-31
| E. | principal products or services, and their markets; |
The construction of infrastructure and security buildings, roadways, rail lines, etc.
| 7) | Describe the Issuer’s Facilities |
Our executive offices are located at 3000F Danville Blvd, Alamo CA 94507. This office space is leased on a month-to-month basis.
| 8) | Officers, Directors, and Control Persons |
| A. | Names of Officers, Directors, and Control Persons. |
| Name/Address | Title | ||
| Robert P. Legg II | President, CEO, Director | ||
| 3000F Danville Blvd Suite 145 | |||
| Alamo, CA 94507 |
| B. | Legal/Disciplinary History. |
| 1. | A conviction in a criminal proceeding or named as a defendant in a pending criminal proceeding (excluding traffic violations and other minor offenses); |
None.
| 46 |
| 2. | The entry of an order, judgment, or decree, not subsequently reversed, suspended or vacated, by a court of competent jurisdiction that permanently or temporarily enjoined, barred, suspended or otherwise limited such person’s involvement in any type of business, securities, commodities, or banking activities; |
None.
| 3. | A finding or judgment by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission, the Commodity Futures Trading Commission, or a state securities regulator of a violation of federal or state securities or commodities law, which finding or judgment has not been reversed, suspended, or vacated; or |
None.
| 4. | The entry of an order by a self-regulatory organization that permanently or temporarily barred suspended or otherwise limited such person’s involvement in any type of business or securities activities. |
None.
| A. | Beneficial Shareholders. The following are the beneficial owners having greater than 10%of any class of stock. |
| Common Stock/Preferred Stock | |||||||
| Amount and | |||||||
| Nature of | |||||||
| Name and Address of | Beneficial | ||||||
| Title Class | Beneficial Owner | Ownership | Percent of Class | ||||
| Common Stock | Robert P. Legg II | 100,000,000 | 59.8% | ||||
| 3000 F Danville Blvd | |||||||
| Suite 145 | |||||||
| Alamo, CA | |||||||
| 94507 | |||||||
| Common Stock | Hui Chen | 53,138,400 | 31.8% | ||||
| Room 302 No 14 Alley 555 | |||||||
| Wen XI Rd | |||||||
| ZHA Bei Qu, 200435 | |||||||
| Shanghai | |||||||
| Series | A | Robert P Legg II | 1,000,000 (1) | 100% | |||
| Convertible | 3000F Danville Blvd Ste 145 | ||||||
| Preferred | Alamo, CA 94507 | ||||||
| Series | B | Robert P/ Legg II | 10,000,000 | 90.9% | |||
| Convertible | 3000F Danville Blvd Ste 145 | ||||||
| Preferred | Alamo, CA 94507 | ||||||
| (1) | 1,000,000 total Series A Convertible Preferred authorized and Issued convertible equate to Robert P. Legg II having over 1,000,000,000 votes |
| 47 |
| 9) | Third Party Providers |
Legal Counsel
Name: Benjamin L. Bunker
Firm: The Bunker Law Group, PPLC.
Address 1: 3753 Howard Hughes Pkwy Suite 200
Address 2: Las Vegas, NV 89169
Phone: (702) 784-5990
Email: benbunker@bunkerlawgroup.com
| 10) | Issuer Certification |
I, Robert P/ Legg II, certify that:
1. I have reviewed this Annual Disclosure Statement of Social Detention, Inc.;
2. Based on my knowledge, this disclosure statement does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this disclosure statement; and
3. Based on my knowledge, the financial statements, and other financial information included or incorporated by reference in this disclosure statement, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this disclosure statement.
| March 31, 2018 | |
| /s/ Robert P . Legg II | |
| Chief Executive Officer and Chief Financial Officer |
| 48 |
SOCIAL DETENTION, INC.
PERIOD END REPORT
FOR THE PERIOD ENDED
DECEMBER 31, 2017
FINANCIAL STATEMENTS
| 49 |
Social Detention, Inc.
(SOCIAL DETENTION)
3000 F Danville Blvd, Suite 145
Alamo, CA 94507
SOCIAL DETENTION UNAUDITED BALANCE
SHEET & FINANCIAL STATEMENTS
Issuer’s most recent Pro Forma Balance Sheet & Financial Statements for the
period ended December 31, 2017
| 50 |
Pro Forma Balance Sheets
(Unaudited subject to change)
| December 31, 2017 | December 31, 2016 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash in bank | $ | 30,953 | $ | 281 | ||||
| Accounts receivable | 109,000 | 97,981 | ||||||
| Total Current assets | 139,953 | 98,262 | ||||||
| Other assets | ||||||||
| Long term investment | 28,300 | 28,300 | ||||||
| Total other assets | 28,300 | 28,300 | ||||||
| Total Assets | $ | 168,253 | $ | 126,562 | ||||
| LIABILITIES & STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 7,875 | $ | - | ||||
| Advances payable | - | - | ||||||
| Note payable - related party | 12,000 | - | ||||||
| Notes payable | 28,300 | 28,300 | ||||||
| Total current liabilities | 48,175 | 28,300 | ||||||
| Stockholders’ Deficit | ||||||||
| Preferred stock, 25,000,000 shares authorized with $0.001 par value. 11,990,000 shares issued or outstanding | - | - | ||||||
| Common stock, 200,000,000 shares with $0.001 par value. 183,753,333 issued outstanding at each period respectively | 183,753 | 167,200 | ||||||
| Additional paid in capital | - | 99,433 | ||||||
| Consolidation accounting | (272,522 | ) | 28,581 | |||||
| Accumulated deficit | 237,952 | (196,952 | ) | |||||
| - | ||||||||
| Total Stockholders’ Deficit | 149,183 | 98,262 | ||||||
| Total Liabilities and Stockholders’ Deficit | $ | 197,358 | $ | 126,562 | ||||
The accompanying notes are an integral part of these financial statements.
| 51 |
Pro Forma Statements of Operations
(Unaudited subject to change)
| Period Ended | Year Ended | |||||||
| December 31, 2017 | December 31, 2016 | |||||||
| REVENUE | ||||||||
| Income | $ | 680,000 | $ | 207,000 | ||||
| Cost of revenues | ||||||||
| GROSS PROFIT | 680,000 | 207,000 | ||||||
| Operating Expenses: | ||||||||
| Advertising | 1,580 | 1,600 | ||||||
| Automobile | 17,800 | 17,880 | ||||||
| Contracted Services | 172,200 | 12,000 | ||||||
| Depreciation Expense | 9,028 | 9,028 | ||||||
| Goodwill impairment | 23,917 | 23,917 | ||||||
| Insurance Expense | 26,100 | 20,800 | ||||||
| Materials | 145,533 | - | ||||||
| Office Supplies | 5,400 | 4,800 | ||||||
| Rental Equipment | 22,800 | - | ||||||
| Total Interest Fees | 5,542 | 5,542 | ||||||
| Travel | 12,600 | 12,000 | ||||||
| Subcontractors | - | - | ||||||
| General and administrative | - | - | ||||||
| Total operating expenses | 442,500 | 107,567 | ||||||
| Income (loss) from operations | $ | 237,500 | $ | 99,433 | ||||
| Other income (expense) | ||||||||
| Interest expense | - | - | ||||||
| Other income (expense) net | - | - | ||||||
| Net income (loss) | $ | 237,500 | $ | 99,433 | ||||
| Net income (loss) per share (Basic and fully diluted) | $ | 0.0013 | $ | 0.0006 | ||||
| Weighted average number of common shares outstanding | 183,753,333 | 167,200,000 | ||||||
The accompanying notes are an integral part of these financial statements .
| 52 |
Condensed Consolidated Statement of Changes in Stockholders’ Deficit
(Unaudited subject to change)
| Common Stock | Amount | Paid in | Consolidation | Accumulated Equity | Stockholders’ Equity | |||||||||||||||||||
| Shares | ($0.001 Par) | Capital | Accounting | (Deficit) | (Deficit) | |||||||||||||||||||
| Balances - December 31, 2016 | 167,200,000 | $ | 167,200 | $ | 99,433 | $ | 28,581 | $ | (196,952 | ) | $ | 98,262 | ||||||||||||
| 16,553,333 | $ | 16,553 | ||||||||||||||||||||||
| $ | (301,103 | ) | $ | 434,352 | $ | 33,816 | ||||||||||||||||||
| Balances - December 31, 2017 | 183,753,333 | $ | 183,753 | $ | 99,433 | $ | (272,522 | ) | $ | 237,400 | $ | 132,078 | ||||||||||||
The accompanying notes are an integral part of these condensed financial statements
| 53 |
Pro Forma Condensed Statement of Cash Flows
(Unaudited subject to change)
| For Year ended | For Year ended | |||||||
| December 31, 2017 | December 31, 2016 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net Income ( Loss) | $ | 237,400 | $ | 99,433 | ||||
| Amortization and Impairment | ||||||||
| Depreciation | ||||||||
| Activities | $ | 237,400 | $ | 99,433 | ||||
| Accounts Payable | 7,875 | - | ||||||
| Accounts Receivable | (11,476 | ) | (97,524 | ) | ||||
| Accruded Interest | - | - | ||||||
| Other Accrued Expenses | - | - | ||||||
| Changes in Operating Assets and Liabilities | $ | (3,601 | ) | $ | (97,524 | ) | ||
| Net Cash Used by Operating Activities | $ | 233,799 | $ | 1,909 | ||||
| Paid in Capital | 16,553 | - | ||||||
| Consolidated Accounting | (272,522 | ) | - | |||||
| Exstingishment of Debt/Conversion of Notes Payable | 12,000 | - | ||||||
| Shares Issued for Cash | 52,666 | - | ||||||
| Cash Flows from Financing Activities | (191,303 | ) | - | |||||
| Net Increase /( Decrease) in Cash | 42,496 | 1,909 | ||||||
| Cash Beginning of Period | 457 | (1,452 | ) | |||||
| Cash, End of Period | $ | 42,953 | $ | 457 | ||||
The accompanying notes are an integral part of these financial statements.
| 54 |
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
| 55 |
NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Organization and History
Social Detention, Inc. (the “Company” or “Social Detention”) was incorporated in the State of Colorado on May 20, 2015.
On May 31, 2015 Chenghui Realty Holding Company, Colorado. merged with Chenghui Realty Holding Company of Nevada, with the Colorado entity being the surviving entity. The surviving entity was then renamed Social Detention, Inc..
On September 26, 2016, Social Detention, Inc., a Delaware corporation, acquired an ownership interest in Social Detention, Inc., a Colorado Corporation and its assets which in turn had acquired total interest in RL Consulting, a company that was closely held. Social Detention, Inc., of Colorado will be the surviving entity.
The Company is a Colorado corporation organized for the purpose of engaging in any lawful business. The Company’s acquisition of RL Consulting gives it a basis of operations in the security infrastructure and any other related business activities as of the date of these financial statements. It currently trades on the Pink Sheet under the symbol “SODE”. The Company’s fiscal period end is December 31st.
The financial statements include the Company and its wholly owned subsidiaries; all significant inter- company balances and transactions are eliminated.
Mergers And Acquisitions
On November 23, 2016, the company acquired RL Consulting..
Management, Operations and Risk
Social Detention is in the business of building infrastructure. With its acquisition of RL Consulting, it has a long history of successful contract awards, and has launched a program whereby it intends to grow through acquisition in the coming fiscal year. The president, Mr Robert P. Legg II has been able to build these companies in the past a from startup to companies that generate over $15M in annual revenues. He intends to build a network of small providers into a large network that will both be able to provide synergistic support to the other parties, by means of production capabilities, financing and other relationships. To the bigger benefit of shared contracts. The goal in the next year is to acquire 3-5 smaller entities that are generating between $1-5M in revenue an year today, and to be able to secure over $15M in contracts for each in the coming 12 months.
Authorized Common Stock
As of December 31, 2017, Social Detention had an authorized Class A common stock capital of 200,000,000 shares with a par value of $.001. Authorized preferred stands at 25,000,000 shares with a par value of $.001. These numbers remain unchanged as of the date of this filing and the Company has no current plans for any increase thereof.
Issued and Outstanding Common Stock
As of December 31, 2017, Social Detention had a total of 183,753,333 Common Shares outstanding.
On November 24, 2016, the Company issued 100,000,000 Common Shares in exchange for $10,000 accrued debts owed to Robert P. Legg II and controlling interest in RL Consulting.
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The Company has not entered into any agreement to promote its stock nor has it authorized any third party to conduct any type of promotion on its behalf.
Authorized and Issued and Outstanding Preferred Stock
As of December 31, 2017, Social Detention had authorized 1,000,000 Class A Preferred Shares , of which 1,000,000 are outstanding.
As of December 31, 2017, Social Detention had authorized 11,000,000 Class B Preferred Shares, of which 10,990,000 are outstanding.
Transfer Agent
During the quarter ended December 31, 2017, the Company’s transfer agent, Pacific Stock Transfer, and the Company have reconciled the transfer agent records with the records of the Company and those of the State of Colorado.
Additional Organizational Items
None
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents
The Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties and all highly liquid investments with an original maturity of three months or less as cash equivalents.
Revenue recognition
The Company has realized minimal revenues from operations. The Company recognizes revenues when the sale and/or distribution of products is complete, risk of loss and title to the products have transferred to the customer, there is persuasive evidence of an agreement, acceptance has been approved by the customer, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable. Net sales will be comprised of gross revenues less expected returns, trade discounts, and customer allowances that will include costs associated with off-invoice markdowns and other price reductions, as well as trade promotions and coupons. The incentive costs will be recognized at the later of the date on which the Company recognized the related revenue or the date on which the Company offers the incentive.
Basic and Diluted Loss per Share
The Company computes loss per share in accordance with “ASC-260,” “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common share during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Diluted loss per share excludes all potential common shares if their effect is anti-dilutive.
Income Taxes
The Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases.
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The Company maintains a valuation allowance with respect to deferred tax asset. Social Detention establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward period under Federal tax laws.
Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the reliability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change estimate.
Carrying Value, Recoverability and Impairment of Long-Lived Assets
The Company has adopted paragraph 360-10-35-17 of FASB Accounting Standards Codification for its long-lived assets. The Company’s long –lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.
The company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the assets expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.
The Company considers the following to be some examples of important indicators that may trigger an impairment review; (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner of use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.
The impairment charges, if any, are included in operating expenses in the accompanying statements of operations.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and D7losure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
The Company’s significant estimates include income taxes provision and valuation allowance of deferred tax assets; the fair value of financial instruments; the carrying value and recoverability of long-lived assets, and the assumption that the Company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.
Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates.
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Fair value of Financial Instruments
The estimated fair values of financial instruments were determined by management using available market information and appropriate valuation methodologies. The carrying amounts of financial instruments including cash approximate their fair value because of their short maturities.
Long Lived Assets
In accordance with ASC 350 the Company regularly reviews the carrying value of intangible and other long lived assets for the existence of facts or circumstances both internally and externally that suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long lived asset exceeds its fair value.
Stock-based Compensation
The Company accounts for stock-based compensation issued to employees based on FASB accounting standard for Share Based Payment. It requires an entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award – the requisite service period (usually the vesting period). It requires that the compensation cost relating to share -based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. The scope of the FASB accounting standard includes a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans.
Recent pronouncements
Management has evaluated accounting standards and interpretations issued but not yet effective as of December 31, 2016, and does not expect such pronouncements to have a material impact on the Company’s financial position, operations, or cash flows.
NOTE 3 – STOCKHOLDER’S DEFICIT
The total number of Class A Common Stock authorized to be issued by the Company is 200,000,000 shares with a par value of $0.001 per share. The Company is authorized to issue 25,000,000 shares of preferred stock with a par value of $0.001 per share. As at December 31, 2017, 11,990,000 preferred shares had been issued.
As at December 31, 2017 the total number of Class A Common Shares outstanding was 183,753,333 . The Company has an ongoing program of private placements to raise funds to support the operations.
NOTE 4 – GOING CONCERN
Even though these financial statements are not audited it is management’s opinion that an auditor would express a “going concern” statement. The Company has an accumulated deficit of $196,952 and is solely reliant on raising money for operations by seeking loans and selling its common stock. Based on this there can be no assurances that the Company will be successful in these fund-raising activities.
NOTE 5 – RELATED PARTY NOTE
As at December 31, 2017 the Company owes $12,000 to Robert P. Legg II on a zero interest note
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NOTE 6 –CONVERTIBLE NOTES PAYABLE
In the Company’s ongoing efforts to raise money for acquisitions and operations the Company has received $28,300 in cash and has issued Convertible Notes Payable in like amount. In accordance with PCAOB standards these notes are considered to be a derivative instrument and accordingly have had a conversion expense recorded on the books of the Company of $28,300. This expense was determined using the Black-Scholes valuation model.
NOTE 7 – DEPOSITS AGAINST PURCHASE OF BUSINESSES
As at December 31, 2016 the Company has made payment of stock for the control shares of RL Consulting, Inc. to the owners/stockholders.
NOTE 8 - SUBSEQUENT EVENTS
The Company has investigated and determined that there are no substantive events that have occurred since the end of this reporting period and the date of the filing of theses financial statements.
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SOCIAL DETENTION, INC.
YEAR END REPORT FOR
THE PERIOD ENDED
DECEMBER 31, 2016
FINANCIAL STATEMENTS
| 61 |
Social Detention, Inc.
(SOCIAL DETENTION)
3000 F Danville Blvd, Suite 145
Alamo, CA 94507
SOCIAL DETENTION UNAUDITED BALANCE
SHEET & FINANCIAL STATEMENTS
Issuer’s most recent Pro Forma Balance Sheet & Financial Statements for the
period ended December 31, 2016
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Social Detention , Inc.
(Unaudited subject to change)
| December 31, 2016 | December 31, 2015 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash in bank | $ | 281 | $ | 336 | ||||
| Accounts receivable | 97,981 | (1,452 | ) | |||||
| Total Current assets | 98,262 | (1,116 | ) | |||||
| Other assets | ||||||||
| Long term investment | 28,300 | 28,300 | ||||||
| Total other assets | 28,300 | 28,300 | ||||||
| Total Assets | $ | 126,562 | $ | 27,184 | ||||
| LIABILITIES & STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | - | $ | - | ||||
| Advances payable | - | - | ||||||
| Note payable - related party | - | - | ||||||
| Notes payable | 28,300 | 28,300 | ||||||
| Total current liabilities | 28,300 | 28,300 | ||||||
| Stockholders’ Deficit | ||||||||
| Preferred stock, 25,000,000 shares authorized with $0.001 par value. 11,990,000 shares issued or outstanding | - | - | ||||||
| Common stock, 200,000,000 shares with $0.001 par value. 167,200,000 issued outstanding at each period respectively | 167,200 | 67,200 | ||||||
| Additional paid in capital | 99,433 | 933 | ||||||
| Consolidation accounting | 28,581 | 28,636 | ||||||
| Accumulated deficit | (196,952 | ) | (97,885 | ) | ||||
| Total Stockholders’ Deficit | 98,262 | (1,116 | ) | |||||
| Total Liabilities and Stockholders’ Deficit | $ | 126,562 | $ | 27,184 | ||||
The accompanying notes are an integral part of these financial statements.
| 63 |
Social Detention , Inc.
Pro Forma Statements of Operations
(Unaudited subject to change)
| Year Ended | Year Ended | |||||||
| December 31, 2016 | December 31, 2015 | |||||||
| REVENUE | ||||||||
| Income | $ | 207,000 | $ | 107,500 | ||||
| Cost of revenues | ||||||||
| GROSS PROFIT | 207,000 | 107,500 | ||||||
| Operating Expenses: | ||||||||
| Advertising | 1,600 | 1,600 | ||||||
| Automobile | 17,880 | 2,500 | ||||||
| Commissions | 12,000 | 12,000 | ||||||
| Deprecation Expense | 9,028 | 9,028 | ||||||
| Goodwill impairment | 23,917 | 23,917 | ||||||
| Legal | 20,800 | 20,800 | ||||||
| Meals and Entertainment | - | - | ||||||
| Office Supplies | 4,800 | 4,800 | ||||||
| Rent | - | 15,380 | ||||||
| Total Interest | 5,542 | 5,542 | ||||||
| Travel | 12,000 | 11,000 | ||||||
| Utilities | - | - | ||||||
| General and administrative | - | - | ||||||
| Total operating expenses | 107,567 | 106,567 | ||||||
| Income (loss) from operations | $ | 99,433 | $ | 933 | ||||
| Other income (expense) | ||||||||
| Interest expense | - | - | ||||||
| Other income (expense) net | - | - | ||||||
| Net income (loss) | $ | 99,433 | $ | 933 | ||||
| Net income (loss) per share | ||||||||
| (Basic and fully diluted) | $ | 0.0006 | $ | 0.0000 | ||||
| Weighted average number of common shares outstanding | 167,200,000 | 67,200,000 | ||||||
The accompanying notes are an integral part of these financial statements.
| 64 |
Social Detention , Inc.
Condensed Consolidated Statement of Changes in Stockholders ‘ Deficit
(Unaudited subject to change)
| Accumulated | Stockholders’ | |||||||||||||||||||||||
| Common Stock | Amount | Paid in | Consolidation | Equity | Equity | |||||||||||||||||||
| Shares | ($0.001Par) | Capital | Accounting | (Deficit) | (Deficit) | |||||||||||||||||||
| Balances - December 31, 2015 | 67,200,000 | $ | 67,200 | $ | 99,433 | $ | 28,581 | $ | (196,952 | ) | $ | 98,262 | ||||||||||||
| New Shares Issuance | 100,000,000 | $ | 100,000 | |||||||||||||||||||||
| Balances - December 31, 2016 | 167,200,000 | $ | 167,200 | $ | 99,433 1 | $ | 28,58 | $ | (196,952 | ) | $ | 98,262 | ||||||||||||
The accompanying notes are an integral part of these financial statements.
| 65 |
Social Detention , Inc.
Pro Forma Condensed Statement of Cash Flows
(Unaudited subject to change)
| For Year ended | For Year ended | |||||||
| December 31, 2016 | December 31, 2015 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net Income ( Loss) | $ | 99,433 | $ | 933 | ||||
| Amortization and Impairment | 13,641 | 12,564 | ||||||
| Depreciation | (9,028 | ) | (9,028 | ) | ||||
| Activities | $ | 104,046 | $ | 4,469 | ||||
| Accounts Payable | - | - | ||||||
| Accounts Receivable | - | - | ||||||
| Accruded Interest | - | - | ||||||
| Other Accrued Expenses | - | - | ||||||
| Changes in Operating Assets and Liabilities | $ | - | $ | - | ||||
| Net Cash Used by Operating Activities | $ | 104,046 | $ | 4,469 | ||||
| Paid in Capital | - | - | ||||||
| Net Proceeds from (Reductions of) Notes Payable | - | - | ||||||
| Exstingishment of Debt/Conversion of Notes Payable | - | - | ||||||
| Shares Issued for Cash | - | - | ||||||
| Cash Flows from Financing Activities | - | - | ||||||
| Net Increase /( Decrease) in Cash | 104,046 | 4,469 | ||||||
| Cash Beginning of Period | 336 | 1,069 | ||||||
| Cash, End of Period | $ | 104,382 | $ | 5,538 | ||||
The accompanying notes are an integral part of these condensed financial statements
| 66 |
NOTES TO FINANCIAL STATEMENTS
December 31, 2016
| 67 |
NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Organization and History
Social Detention, Inc. (the "Company” or “Social Detention”) was incorporated in the State of Colorado on May 20, 2015.
On May 31, 2015 Chenghui Realty Holding Company, Colorado. merged with Chenghui Realty Holding Company of Nevada, with the Colorado entity being the surviving entity. The surviving entity was then renamed Social Detention, Inc..
On June 26, 2016, Social Detention, Inc., a Delaware corporation, acquired an ownership interest in Social Detention, Inc., a Colorado Corporation and its assets which in turn had acquired total interest in RL Consulting, a company that was closely held. Social Detention, Inc., of Colorado will be the surviving entity.
The Company is a Colorado corporation organized for the purpose of engaging in any lawful business. The Company’s acquisition of RL Consulting gives it a basis of operations in the security infrastructure and any other related business activities as of the date of these financial statements. It currently trades on the Pink Sheet under the symbol “SODE”. The Company's fiscal year end is December 31st.
The financial statements include the Company and its wholly owned subsidiaries; all significant inter- company balances and transactions are eliminated.
Mergers And Acquisitions
On November 23, 2016, the company acquired RL Consulting..
Management, Operations and Risk
The primary focus of Social Detention during fiscal year 2016 was to restructure the Company’s balance sheet and capital structure while continuing the acquisition of the and development of the divisions described above.
On November 23, 2016, The board convened and voted to approve the changes proposed by Robert P. Legg II, which included the share restructure and acquisition of RL Consulting.
On December 14, 2016, the board and majority shareholders approved of a name change and symbol change and it was filed and approved by FINRA and became effective on November 12, 2016.
All of the aforementioned activities involve complex business and financial transactions and there can be no guarantee that the Company will be able to successfully develop its business plan nor complete any or all of the transactions necessary for successful growth.
Volatile market conditions and the ongoing uncertainty of the global economic outlook could stymie any potential growth the Company plans on achieving at any time and increase the pressure on an already strained corporate financial structure. In order to continue the development of its two divisions, the Company must be successful in acquiring the necessary funding it is seeking. The inability to do so will result in the Company experiencing serious delays in implementing its business plan. Any or all of the above uncertainties could have a material adverse effect on the Company. Critical to success will be the ability to attract a strong management team at both the parent company and the divisional levels. As acquisition and financial transactions, even at a basic level, become more complex, the financial and managerial experience of the Company’s management team will play a major role in the success or failure of the Company.
Authorized Common Stock
As of December 31, 2016, Social Detention had an authorized Class A common stock capital of 200,000,000 shares with a par value of $.001. Authorized preferred stands at 25,000,000 shares with a par value of $.001. These numbers remain unchanged as of the date of this filing and the Company has no current plans for any increase thereof.
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Issued and Outstanding Common Stock
As of December 31, 2016, Social Detention had a total of 167,200,000 Common Shares outstanding.
On November 24, 2016, the Company issued 100,000,000 Common Shares in exchange for $10,000 accrued debts owed to Robert P. Legg II and controlling interest in RL Consulting.
No other Common Shares were issued during 2016.
The Company has not entered into any agreement to promote its stock nor has it authorized any third party to conduct any type of promotion on its behalf.
Authorized and Issued and Outstanding Preferred Stock
As of December 31, 2016, Social Detention had authorized 1,000,000 Class A Preferred Shares, of which 1,000,000 are outstanding.
As of December 31, 2016, Social Detention had authorized 11,000,000 Class B Preferred Shares, of which 10,990,000 are outstanding.
Transfer Agent
During the quarter ended December 31, 2016, the Company’s transfer agent, Pacific Stock Transfer, and the Company have reconciled the transfer agent records with the records of the Company and those of the State of Colorado.
Additional Organizational Items
None
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents
The Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties and all highly liquid investments with an original maturity of three months or less as cash equivalents.
Revenue recognition
The Company has realized minimal revenues from operations. The Company recognizes revenues when the sale and/or distribution of products is complete, risk of loss and title to the products have transferred to the customer, there is persuasive evidence of an agreement, acceptance has been approved by the customer, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable. Net sales will be comprised of gross revenues less expected returns, trade discounts, and customer allowances that will include costs associated with off-invoice markdowns and other price reductions, as well as trade promotions and coupons. The incentive costs will be recognized at the later of the date on which the Company recognized the related revenue or the date on which the Company offers the incentive.
Basic and Diluted Loss per Share
The Company computes loss per share in accordance with “ASC-260,” “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common share during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Diluted loss per share excludes all potential common shares if their effect is anti-dilutive.
| 69 |
Income Taxes
The Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases.
The Company maintains a valuation allowance with respect to deferred tax asset. Social Detention establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward period under Federal tax laws.
Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the reliability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change estimate.
Carrying Value, Recoverability and Impairment of Long-Lived Assets
The Company has adopted paragraph 360-10-35-17 of FASB Accounting Standards Codification for its long-lived assets. The Company’s long –lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.
The company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the assets expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.
The Company considers the following to be some examples of important indicators that may trigger an impairment review; (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner of use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.
The impairment charges, if any, are included in operating expenses in the accompanying statements of operations.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and D7losure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
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The Company’s significant estimates include income taxes provision and valuation allowance of deferred tax assets; the fair value of financial instruments; the carrying value and recoverability of long-lived assets, and the assumption that the Company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.
Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates.
Fair value of Financial Instruments
The estimated fair values of financial instruments were determined by management using available market information and appropriate valuation methodologies. The carrying amounts of financial instruments including cash approximate their fair value because of their short maturities.
Long Lived Assets
In accordance with ASC 350 the Company regularly reviews the carrying value of intangible and other long lived assets for the existence of facts or circumstances both internally and externally that suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long lived asset exceeds its fair value.
Stock-based Compensation
The Company accounts for stock-based compensation issued to employees based on FASB accounting standard for Share Based Payment. It requires an entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award – the requisite service period (usually the vesting period). It requires that the compensation cost relating to share -based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. The scope of the FASB accounting standard includes a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans.
Recent pronouncements
Management has evaluated accounting standards and interpretations issued but not yet effective as of March 31, 2016, and does not expect such pronouncements to have a material impact on the Company’s financial position, operations, or cash flows.
NOTE 3 – STOCKHOLDER’S DEFICIT
The total number of common shares authorized that may be issued by the Company is 200,000,000 shares with a par value of $0.001 per share. The Company is authorized to issue 25,000,000 shares of preferred stock with a par value of $0.001 per share. As of December 31, 2016, 11,990,000 preferred shares had been issued.
As at December 31, 2016 the total number of Class A Common Shares outstanding was 167,200,000. The Company has an ongoing program of private placements to raise funds to support the operations.
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NOTE 4 – GOING CONCERN
Even though these financial statements are not audited it is management’s opinion that an auditor would express a “going concern” statement. The Company has an accumulated deficit of $196,952 and is solely reliant on raising money for operations by seeking loans and selling its common stock. Based on this there can be no assurances that the Company will be successful in these fund-raising activities.
NOTE 5 – RELATED PARTY RECEIVABLE
As at December 31, 2016 the Company no related party receivables.
NOTE 6 –CONVERTIBLE NOTES PAYABLE
In the Company’s ongoing efforts to raise money for acquisitions and operations the Company has received $28,300 in cash and has issued Convertible Notes Payable in like amount. The terms of these notes are (1) they bear an interest rate of 10% compounded annually until conversion or repayment; (2) there are $24,700 face value of Notes that are convertible at the rate of $0.01 per share and $9,600 that are convertible at the rate of $0.03 per share. All references to conversion are to the common stock of the Company. In accordance with PCAOB standards these notes are considered to be a derivative instrument and accordingly have had a conversion expense recorded on the books of the Company of $28,300. This expense was determined using the Black-Scholes valuation model.
NOTE 7 – DEPOSITS AGAINST PURCHASE OF BUSINESSES
As at September 30, 2016 the Company has made payment of stock for the control shares of RL Consulting, Inc. to the owners/stockholders.
NOTE 8 - SUBSEQUENT EVENTS
The Company has investigated and determined that there are no substantive events that have occurred since the end of this reporting period and the date of the filing of theses financial statements.
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PART III:
EXHIBITS
| TABLE OF CONTENTS | |
| Articles of Incorporation for Social Detention, Inc. | 74 |
| Bylaws of Social Detention, Inc. | 115 |
| Signature Page | 122 |
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FOR
SOCIAL DETENTION, INC.
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OFFICE OF THE SECRETARY OF STATE
OF THE STATE OF COLORADO
CERTIFICATE OF DOCUMENTS FILED
I, Wayne W. Williams , as the Secretary of State of the State of Colorado, hereby certify that, according to the records of this office, the attached documents are true and complete copies of all documents relating to:
Social Detention, Inc.
Colorado Corporation
(Entity ID # 20161346384 )
consisting of 28 pages as filed in this office.
This certificate reflects facts established or disclosed by documents delivered to this office on paper through 09/06/2018 that have been posted, and by documents delivered to this office electronically through
09/07/2018 @ 15:50:10.
I have affixed hereto the Great Seal of the State of Colorado and duly generated, executed, and issued this official certificate at Denver, Colorado on 09/07/2018 @ 15:50:10 in accordance with applicable law. This certificate is assigned Confirmation Number 11105967.
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*****************************************End of Certificate*****************************************
Notice: A certificate issued electronically from the Colorado Secretary of State’s Web site is fully and immediately valid and effective. However, as an option, the issuance and validity of a certificate obtained electronically may be established by visiting the Validate a Certificate page of the Secretary of State’s Web site, http://www.sos.state.co.us/biz/CertificateSearchCriteria.do entering the certificate’s confirmation number displayed on the certificate, and following the instructions displayed. Confirming the issuance of a certificate is merely optional and is not necessary to the valid and effective issuance of a certificate. For more information, visit our Web site, http://www.sos.state.co.us/ click
“Businesses, trademarks, trade names” and select “Frequently Asked Questions.”
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Document must be filed electronically. |
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Colorado Secretary of State Date and Time: 05/20/2016 12:29 PM ID Number: 20161346384 |
|
Paper
documents are not accepted. Fees & forms are subject to change.
For more information or to print copies of filed documents, visit www.sos.state.co.us. |
Document number: 20161346384 Amount Paid: $50.00 |
ABOVE SPACE FOR OFFICE USE ONLY
Articles of Incorporation for a Profit Corporation
filed pursuant to § 7-102-101 and § 7-102-102 of the Colorado Revised Statutes (C.R.S.)
| 1. | The domestic entity name for the corporation is |
Chenghui Realty Holding Company _______________________________________________________.
(Caution: The use of certain terms or abbreviations are restricted by law. Read instructions for more information.)
| 2. | The principal office address of the corporation’s initial principal office is |
| Street address | 1112 oakridge drive 104-311 | |||
| (Street number and name) | ||||
| ________________________________________________________ | ||||
| fort collins | CO | 80525 | ||
| (City) | (State) | (ZIP/Postal Code) | ||
| _______________________ | United States | |||
| (Province – if applicable) | (Country) | |||
| Mailing address | ________________________________________________________ | |||
| (leave blank if same as street address) | (Street number and name or Post Office Box information) | |||
| ________________________________________________________ | ||||
| __________________________ ____ | ________________ | |||
| (City) | (State) | (ZIP/Postal Code) | ||
| _______________________ | ______________. | |||
| (Province – if applicable) | (Country) | |||
| 3. | The registered agent name and registered agent address of the corporation’s initial registered agent are |
| Name | |||||
| (if an individual) | |||||
| (Last) | (First) | (Middle) | (Suffix) | ||
| or | |||||
| (if an entity) | RA Services, Inc. | ||||
(Caution: Do not provide both an individual and an entity name.)
| Street address | 1112 oakridge drive 104-311 | |||
| (Street number and name) | ||||
| _______________________________________________________ | ||||
| fort collins | CO | 80525 _ | ||
| (City) | (State) | (ZIP/Postal Code) | ||
| Mailing address | _______________________________________________________ | |||
| (leave blank if same as street address) | (Street number and name or Post Office Box information) | |||
| _______________________________________________________ | ||||
| __________________________ | CO | __________________. | ||
| (City) | (State) | (ZIP/Postal Code) | ||
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(The following statement is adopted by marking the box.)
| [X] | The person appointed as registered agent above has consented to being so appointed. |
| 4. | The true name and mailing address of the incorporator are |
| Name | |||||
| (if an individual) | |||||
| (Last) | (First) | (Middle) | (Suffix) |
| or | ||||
| (if an entity) | RA Services, Inc. | |||
| (Caution: Do not provide both an individual and an entity name.) | ||||
| Mailing address | 1112 oakridge drive 104-311 | |||
| (Street number and name or Post Office Box information) | ||||
| ______________________________________________________ | ||||
| fort collins | CO | 80525 | ||
| (City) | (State) | (ZIP/Postal Code) | ||
| _______________________ | United States. | |||
| (Province – if applicable) | (Country) | |||
(If the following statement applies, adopt the statement by marking the box and include an attachment.)
| [ ] | The corporation has one or more additional incorporators and the name and mailing address of each additional incorporator are stated in an attachment. |
| 5. | The classes of shares and number of shares of each class that the corporation is authorized to issue are as follows. |
| ● | The corporation is authorized to issue _________ common shares that shall have unlimited voting rights and are entitled to receive the net assets of the corporation upon dissolution. | |
| ● | Information regarding shares as required by section 7-106-101, C.R.S., is included in an attachment. |
| 6. | (If the following statement applies, adopt the statement by marking the box and include an attachment.) |
| [ ] | This document contains additional information as provided by law. |
| 7. | (Caution: Leave blank if the document does not have a delayed effective date. Stating a delayed effective date has significant legal consequences. Read instructions before entering a date.) |
(If the following statement applies, adopt the statement by entering a date and, if applicable, time using the required format.)
The delayed effective date and, if applicable, time of this document is/are ____________________________________.
(mm/dd/yyyy hour:minute am/pm)
Notice:
Causing this document to be delivered to the Secretary of State for filing shall constitute the affirmation or acknowledgment of each individual causing such delivery, under penalties of perjury, that the document is the individual’s act and deed, or that the individual in good faith believes the document is the act and deed of the person on whose behalf the individual is causing the document to be delivered for filing, taken in conformity with the requirements of part 3 of article 90 of title 7, C.R.S., the constituent documents, and the organic statutes, and that the individual in good faith believes the facts stated in the document are true and the document complies with the requirements of that Part, the constituent documents, and the organic statutes.
This perjury notice applies to each individual who causes this document to be delivered to the Secretary of State, whether or not such individual is named in the document as one who has caused it to be delivered.
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| 8. | The true name and mailing address of the individual causing the document to be delivered for filing are |
| lotito | chris | |||
| (Last) | (First) | (Middle) | (Suffix) |
| 1112 oakridge drive | |||
|
(Street number and name or Post Office Box information) |
|||
| fort collins | CO | 80525 | |
| (City) | (State) | (ZIP/Postal Code) | |
| _______________________ | United States . | ||
| (Province – if applicable) | (Country) | ||
(If the following statement applies, adopt the statement by marking the box and include an attachment.)
| [ ] | This document contains the true name and mailing address of one or more additional individuals causing the document to be delivered for filing. |
Disclaimer:
This form/cover sheet, and any related instructions, are not intended to provide legal, business or tax advice, and are furnished without representation or warranty. While this form/cover sheet is believed to satisfy minimum legal requirements as of its revision date, compliance with applicable law, as the same may be amended from time to time, remains the responsibility of the user of this form/cover sheet. Questions should be addressed to the user’s legal, business or tax advisor(s).
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Company authorizes the creation of the following shares of stock:
Company authorizes the creation of Five Hundred Million (500,000,000) Common shares, $0.0001 par value.
Company authorizes the creation of five million ( 2 ,000,000) Shares of Preferred Stock , $0.0001 par value called “Series A Convertible Preferred Stock” with the following rights:
Company authorizes the creation of three million (10,000,000) Shares of Preferred Stock , $0.0001 par value called “Series B Convertible Preferred Stock” with the following rights:
| Voting Rights | Each Series B Convertible Share shall have one (1) vote for every one (1) share of Series B Convertible Stock in matters brought before the board. | |
| Conversion Rights | Each one (1) share of Series B Convertible Stock shall be convertible into one hundred (100) shares of common stock, at the option of the Holder. | |
| Dividends | Holders of Series B Convertible Preferred shares are not entitled to dividends. | |
| Conversion Restrictions: | Holder of Series B Convertible Stock shall be restricted to not be allowed to convert and possess more than the equivalent of 9.9% of the current issued and outstanding common shares at the time of conversion. |
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|
Document must be filed electronically. Paper documents are not accepted. Fees & forms are subject to change. For more information or to print copies of filed documents, visit www.sos.state.co.us. |
|
Colorado Secretary of State Date Date and Time: 06/21/2016 11:58 AM ID Number: 20161346384
Document number: 20161416909 Amount Paid: $25.00 |
| 5. | The amended and restated constituent filed document is attached. |
| 6. | If the amendment provides for an exchange, reclassification or cancellation of issued shares, the attachment states the provisions for implementing the amendment. |
| 7. | (Optional) Delayed effective date: ______________________ |
| (mm/dd/yyyy) |
Notice: ______________________________________________________________
Causing this document to be delivered to the secretary of state for filing shall constitute the affirmation or acknowledgment of each individual causing such delivery, under penalties of perjury, that the document is the individual’s act and deed, or that the individual in good faith believes the document is the act and deed of the person on whose behalf the individual is causing the document to be delivered for filing, taken in conformity with the requirements of part 3 of article 90 of title 7, C.R.S., the constituent documents, and the organic statutes, and that the individual in good faith believes the facts stated in the document are true and the document complies with the requirements of that Part, the constituent documents, and the organic statutes.
This perjury notice applies to each individual who causes this document to be delivered to the secretary of state, whether or not such individual is named in the document as one who has caused it to be delivered.
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| 8. | Name(s) and address(es) of the individual(s) causing the document to be delivered for filing: |
| Lotito | chris | |||
| (Last) | (First) | (Middle) | (Suffix) |
| 1112 oakridge drive 104-311 | |||
| (Street name and number or Post Office Box information) | |||
| fort collins | CO | 80525 | |
| (City) | (State) | (Postal/Zip Code) | |
| _______________________ | United States | ||
| (Province – if applicable) | (Country – if not US) | ||
(The document need not state the true name and address of more than one individual. However, if you wish to state the name and address of any additional individuals causing the document to be delivered for filing, mark this box and include an attachment stating the name and address of such individuals.)
Disclaimer:
This form, and any related instructions, are not intended to provide legal, business or tax advice, and are offered as a public service without representation or warranty. While this form is believed to satisfy minimum legal requirements as of its revision date, compliance with applicable law, as the same may be amended from time to time, remains the responsibility of the user of this form. Questions should be addressed to the user’s attorney.
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AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
CHENGHUI REALTY HOLDING COMPANY
ARTICLE I
The name of the corporation shall be CHENGHUI REALTY HOLDING COMPANY. (the “Corporation”).
ARTICLE II
The period of its duration shall be perpetual.
ARTICLE III
The Corporation is organized of conducting any lawful business for which a corporation may be organized under the law of the State of Colorado.
ARTICLE IV
The aggregate number of shares that the Corporation will have authority to issue is Five Hundred Million (500,000,000) with Two Hundred Million (200,000,000) shares of Class A Common Stock with a par value of $ 0.0001 per share and Twenty Five Million ( 25,000,000) shares of preferred stock with par value $ 0.0001, Shares of any stock may be issued, without shareholder action, from time to time in one or more series as may from time to time be determined by the board of directors. The board of directors of this Corporation is hereby expressly granted authority, without shareholder action, and within the limits set forth in the Colorado Revised Statues, to:
(i.) Designate in whole or in part, the powers, preferences, limitations, and relative rights, of any class of shares before the issuance of any shares of that class.
(ii.) Create one or more series within a class of shares, fix the number of shares of each such series, and designate, in whole or part, the powers, preferences, limitations, and relative rights of any class of shares before the issuance of any shares of that series.
(iii.) Alter or revoke the powers, preferences limitations, and relative rights granted to or imposed upon any wholly unissued class of shares or any wholly unissued series of any class of shares.
(iv.) Increase or decrease the number of shares constituting any series, the number of shares of which was originally fixed by the board of directors, either before or after the issuance of shares of the series: provided that, the number may not be decreased below the number of shares of the series then outstanding or increased above the total number of authorized shares of the applicable class of shares available for designation as a part of the series;
(v.) Determine the dividend rate on the shares of any class of shares or series of shares, whether dividends will be cumulative, and if so, from which date(s), and the relative rights of priority, if any, payment of dividends on shares of that class of shares or series of shares;
(vi.) Determine whether that class of shares or series of shares will have voting rights, in addition to the voting rights provided by law, and, if, so, the terms of such voting;
(vii.) Determine whether or not these shares of that class of shares or series of shares will have conversion privileges and, if, so, the terms and conditions of such conversion, including provision for adjustment of the conversion rate in such events as the board of directors determines;
(viii.) Determine whether or not these shares of that class of shares or series of shares will be redeemable and, if, so, the terms and conditions of such redemption, including the date or date upon or after which they were redeemable , and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;
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(ix.) Determine whether or not these shares of that class of shares or series of shares will have a sinking fund for the redemption or purchase of shares of that class of shares or series of shares and, if, so, the terms and amount of such sinking fund;
(x.) determine the rights of the shares of that class of shares of series of shares in the event of voluntary liquidation, dissolution or dining up of the Corporation and the relative rights of priority, if any , of payment of shares of that class of shares or series of shares; and
(xi.) determine any other relative rights, preference and limitation of that class of shares or series of shares,
The allocation between the classes, or among the series or each class, or unlimited voting rights and the right to receive the net assets of the Corporation upon dissolution shall be as designated by the Board of directors. All rights accruing to the outstanding shares of the Corporation not expressly provided for to the contrary of in the corporations bylaws or in any amendment hereto shall be vested in the common stock. accordingly, unless and until otherwise designated by the board of directors of the Corporation and subject to any superior rights as so designated the Common stock shall have unlimited voting rights and be entitled to receive the net assets of the Corporation upon dissolution./
ARTICLE V
Provisions for the regulation of the internal affairs of the Corporation will be contained in its Bylaws as adopted by the Board of Directors. The number of Directors of the Corporation shall be fixed by its Bylaws.
ARTICLE V1
The corporation shall indemnify any person against expenses, including without limitation attorney’s fees, judgments, fines and amounts paid in settlement, actual and reasonably incurred by reason of the fact that he or she is or was a director or officer of the Corporation, or is or was serving as the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise in all circumstance in which and to the extent that such indemnification is permitted and provided for the laws of the State of Colorado then in effect.
ARTICLE VII
To the fullest extent permitted by 7 -109 of the Colorado Revised Statutes as the same exists of may hereafter be amended, and officer or director of the Corporation shall not be personally liable to the Corporation of its stockholders for monetary damages.
ARTICLE VIII
The Corporation expressly elects not to be governed by or be subject to the provision of section 78.378 through 78.3793 of the Nevada Revised Statutes or any similar or succor statutes adopted by any state which may be deemed to apply the corporation from time to time.
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SIGNATURE
The undersigned herby certifies on behalf of Chenghui Realty Holding Company, a corporation duly organized and existing under the laws of the State of Colorado, ( the “Corporation”) that:
| 1. | The undersigned is the President and Secretary, respectively, of the Corporation. |
| 2. | The foregoing Amended and Restated Articles of Incorporation have been duly approved by a majority vote of the Board of Directors. |
| 3. | The foregoing Amended and Restated Article of Incorporation has been duly approved by the required vote of the shareholders in accordance with Colorado Corporations Code. |
I further declare under penalty of perjury under the laws of the State of Colorado that the matters set forth in this certificate are true and correct to our knowledge.
IN WITNESS WHEREOF, the undersigned officers have signed this Amended and Restated Articles of Incorporation this 2nd day of June, 2016
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COMPANY. Name: Sergio La Grasta |
||
| Title: | President | |
|
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||
| COMPANY. Name: Sergio La Grasta | ||
| Title: | Secretary | |
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|
Document must be filed electronically. Paper documents are not accepted. Fees & forms are subject to change. For more information or to print copies of filed documents, visit www.sos.state.co.us. |
|
Colorado Secretary of State Date and Time: 07/28/2016 11:39 AM ID Number: 20161346384
Document number: 20161513763 Amount Paid: $25.00 |
ABOVE SPACE FOR OFFICE USE ONLY
Articles of Amendment
filed pursuant to §7-90-301, et seq. and §7-110-106 of the Colorado Revised Statutes (C.R.S.)
| 4. | Other amendments, if any, are attached. |
| 5. | If the amendment provides for an exchange, reclassification or cancellation of issued shares, the attachment states the provisions for implementing the amendment. |
| 6. | If the corporation’s period of duration as amended is less than perpetual, state the date on which the period of duration expires: _____________________ |
(mm/dd/yyyy)
or
If the corporation’s period of duration as amended is perpetual, mark this box: [ ]
| 7. | (Optional) Delayed effective date: _____________________ |
(mm/dd/yyyy)
Notice:
Causing this document to be delivered to the secretary of state for filing shall constitute the affirmation or acknowledgment of each individual causing such delivery, under penalties of perjury, that the document is the individual’s act and deed, or that the individual in good faith believes the document is the act and deed of the person on whose behalf the individual is causing the document to be delivered for filing, taken in conformity with the requirements of part 3 of article 90 of title 7, C.R.S., the constituent documents, and the organic statutes, and that the individual in good faith believes the facts stated in the document are true and the document complies with the requirements of that Part, the constituent documents, and the organic statutes.
This perjury notice applies to each individual who causes this document to be delivered to the secretary of state, whether or not such individual is named in the document as one who has caused it to be delivered.
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| 8. | Name(s) and address(es) of the individual(s) causing the document to be delivered for filing: |
| legg | robert | |||
| (Last) | (First) | (Middle) | (Suffix) | |
| 3000 F Danville | ||||
| (Street name and number or Post Office information) | ||||
| Suite 145 | ||||
| alamo | CA | 94507 | ||
| (City) | (State) | (Postal/Zip Code) | ||
| _______________________ | United States | |||
| (Province – if applicable) | (Country – if not US) | |||
(The document need not state the true name and address of more than one individual. However, if you wish to state the name and address of any additional individuals causing the document to be delivered for filing, mark this box and include an attachment stating the name and address of such individuals.)
Disclaimer:
This form, and any related instructions, are not intended to provide legal, business or tax advice, and are offered as a public service without representation or warranty. While this form is believed to satisfy minimum legal requirements as of its revision date, compliance with applicable law, as the same may be amended from time to time, remains the responsibility of the user of this form. Questions should be addressed to the user’s attorney.
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|
Document must be filed electronically. |
|
Colorado Secretary of State Date and Time: 10/11/2016 10:17 AM ID Number: 20161346384 |
|
Paper
documents are not accepted. Fees & forms are subject to change.
For more information or to print copies of filed documents, visit www.sos.state.co.us. |
Document number: 20161687634 Amount Paid: $10.00 |
ABOVE SPACE FOR OFFICE USE ONLY
Statement of Correction Correcting
Information for Historical Purposes
filed pursuant to § 7-90-305 of the Colorado Revised Statutes (C.R.S.)
1. The entity ID number and the entity name, or, if the entity does not have an entity name, the true name are
| Entity ID number | 20161346384 | |
| (Colorado Secretary of State ID number) | ||
| Entity name or True name | Social Detention, Inc. | . |
| 2. The document number of the filed document that is corrected is 20161380323 . | ||
| 3. | (The following statement is adopted by marking the box.) |
| [X] | The information contained in the filed document identified above that is incorrect is identified in the attachment and such information, as corrected, is stated in the attachment. |
| 4. | (If applicable, adopt the following statement by marking the box and include an attachment.) |
| [X] | This document contains additional information as provided by law. |
Notice:
Causing this document to be delivered to the Secretary of State for filing shall constitute the affirmation or acknowledgment of each individual causing such delivery, under penalties of perjury, that such document is such individual’s act and deed, or that such individual in good faith believes such document is the act and deed of the person on whose behalf such individual is causing such document to be delivered for filing, taken in conformity with the requirements of part 3 of article 90 of title 7, C.R.S. and, if applicable, the constituent documents and the organic statutes, and that such individual in good faith believes the facts stated in such document are true and such document complies with the requirements of that Part, the constituent documents, and the organic statutes.
This perjury notice applies to each individual who causes this document to be delivered to the Secretary of State, whether or not such individual is identified in this document as one who has caused it to be delivered.
| 5. | The true name and mailing address of the individual causing this document to be delivered for filing are |
(If applicable, adopt the following statement by marking the box and include an attachment.)
| [ ] | This document contains the true name and mailing address of one or more additional individuals causing the document to be delivered for filing. |
Disclaimer:
This form/cover sheet, and any related instructions, are not intended to provide legal, business or tax advice, and are furnished without representation or warranty. While this form/cover sheet is believed to satisfy minimum legal requirements as of its revision date, compliance with applicable law, as the same may be amended from time to time, remains the responsibility of the user of this form/cover sheet. Questions should be addressed to the user’s legal, business or tax ad
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PLAN OF CONVERSION OF
CHENGHUI REALTY HOLDING COMPANY,
a Nevada corporation,
INTO
CHENGHUI REALTY HOLDING COMPANY,
a Colorado corporation
This PLAN OF CONVERSION (the “Plan”), dated as of May 31, 2016, is hereby adopted by Chenghui Realty Holding Company, a de jure Nevada corporation, conducting business in reliance of the applicability of Section 78.585 of the Nevada Revised Statutes (“Chenghui-Nevada”), in order to set forth the terms, conditions, and procedures governing the CONVERSION of Chenghui-Nevada into a Colorado corporation as permitted by Section 7-90-201 of the Colorado Revised Statutes (“Colorado Statutes”).
WHEREAS, Chenghui-Nevada was incorporated in the State of Nevada on January 15, 1997 (Nevada Secretary of State File No. C594-1997); and
WHEREAS, the shares of Chenghui-Nevada are publicly traded and quoted over-the-counter under the symbol “CRHO”; and
WHEREAS, Chenghui’s Board of Directors has approved the Plan in accordance with Section 7-90-201.3 of the Colorado Statutes and the principal shareholders have by their written consent by the affirmative vote in plurality of the total number of shares eligible to vote for the Plan approved the CONVERSION (as defined below) as permitted by Section 7-111-103 of the Colorado Business Corporation Act (“CBCA”);
NOW, THEREFORE, Chenghui -Nevada does hereby adopt this Plan to effectuate the CONVERSION of Chenghui-Nevada into a Colorado corporation as follows:
| 1. | CONVERSION. Upon and subject to the terms and conditions of this Plan and pursuant to the relevant provisions of the CBCA, including, without limitation, Section 7-90-201 of the Colorado Statutes, Chenghui-Nevada shall convert (referred to herein as the “CONVERSION”) into a Colorado corporation (referred to herein as “Chenghui-Colorado”) at the Effective Time (as defined in Section 3 below). Chenghui-Colorado shall thereafter be subject to all of the provisions of the CBCA. |
| 2. |
Effect of CONVERSION. Upon the Effective Time, all of the rights, privileges, and powers of Chenghui-Nevada, and all property, real, personal, and mixed, as well as all other things and causes of action belonging to Chenghui-Nevada, shall remain vested in Chenghui-Colorado and shall be the property of Chenghui-Colorado and the title to any real property vested by deed or otherwise in Chenghui-Nevada shall not revert or be in any way impaired, but all rights of creditors and all liens upon any property of Chenghui-Nevada shall be preserved unimpaired, and all debts, liabilities, and duties of Chenghui-Nevada shall remain attached to Chenghui-Nevada and may be enforced against it. The debts, liabilities, and duties of Chenghui-Nevada, shall not be deemed, as a consequence of the CONVERSION, to have been transferred to Chenghui-Colorado for any purpose of the laws of the State of Colorado. The CONVERSION shall not be deemed to affect any obligations or liabilities of Chenghui-Nevada incurred prior to the Effective Time or the personal liability of any person incurred prior thereto. Chenghui-Nevada shall not be required to wind up its affairs or pay its liabilities and distribute its assets, and the CONVERSION shall not be deemed to constitute a dissolution of Chenghui-Nevada and shall constitute a continuation of the existence of Chenghui-Nevada in the form of a Colorado corporation, except for the aforementioned exception as to Chenghui- Nevada’s debts, liabilities, and obligations.
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| 3. | Effective Time. Provided that this Plan has not been terminated or deferred pursuant to Section 14 hereof, the CONVERSION shall be effected as soon as practicable after the majority shareholders of Chenghui-Nevada have approved this Plan by written consent. Subject to the foregoing, unless another date and time is specified, the CONVERSION shall be effective upon the filing with the Secretary of State of the State of Colorado of (i) a duly executed Articles of CONVERSION meeting the requirements of the applicable sections of the CBCA, and (ii) a duly executed Articles of Incorporation of Chenghui-Colorado in the form specified below (the “Effective Time”). |
| 4. | Governance and Other Matters Related to Chenghui-Colorado. |
| a. | Articles of Incorporation. At the Effective Time, the Articles of Incorporation of Chenghui-Colorado (the “Articles of Incorporation”) shall be filed with the Secretary of State of the State of Colorado. The Corporation shall be named “Chenghui, Inc.” upon the filing of these Articles of CONVERSION and the Articles of Incorporation. |
| b. | Bylaws. At the Effective Time, the Bylaws of Chenghui-Nevada shall be as adopted by the Board of Directors of Chenghui-Colorado. Thereafter, the Bylaws may be amended by the Board of Directors or stockholders of Chenghui-Colorado as provided in the Bylaws and, as applicable, in the Articles of Incorporation. |
| c. | Directors and Officers. The members of the Board of Directors and the officers of Chenghui-Nevada immediately prior to the Effective Time shall continue in office following the Effective Time as directors and officers of Chenghui-Colorado, respectively, until the expiration of their respective terms of office and until their successors have been duly elected and have qualified, or until their earlier death, resignation or removal. After the Effective Time, Chenghui-Colorado and its Board of Directors shall take any necessary actions to cause each of such individuals to be appointed or to confirm such appointments. |
| 5. | Effect of the CONVERSION on the Common and Preferred Stock of Chenghui-Nevada. |
| a. | Subject to the terms and conditions of this Plan, at the Effective Time, automatically by virtue of the CONVERSION and without any further action on the part of Chenghui-Nevada, Chenghui-Colorado, any shareholder or stockholder, or any officer or director, thereof, respectively, each share of common stock, $0.001 par value per share, of Chenghui- Nevada (the “Chenghui-Nevada Common Stock”), shall convert into one validly issued, fully paid, and non-assessable share of common stock, par value $0.001 per share, of Chenghui-Colorado (the “Chenghui-Colorado Common Stock”). Chenghui-Colorado shall not issue fractional shares with respect to the CONVERSION. Any fractional share of Chenghui-Colorado Common Stock that would otherwise be issued as a result of the CONVERSION will be rounded up to the nearest whole share. Following the Effective Time, all Chenghui-Nevada Common Stock shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and each holder of Chenghui-Nevada Common Stock immediately prior to the Effective Time shall cease to have any rights with respect thereto. |
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| 6. | Stock Certificates. |
| a. | From and after the Effective Time, all of the outstanding certificates that prior to that time represented shares of Chenghui-Nevada Common Stock shall be deemed for all purposes to evidence ownership of and to represent the shares of Chenghui-Colorado Common Stock into which the shares represented by such certificates have been converted as provided herein. The registered owner on the books and records of Chenghui-Colorado or its transfer agent of any such outstanding stock certificate shall, until such certificate shall have been surrendered for transfer or CONVERSION, at the shareholder’s expense, or otherwise accounted for to Chenghui-Colorado or its transfer agent, have and be entitled to exercise any voting and other rights with respect to and to receive any dividend and other distributions upon the shares of Chenghui-Colorado evidenced by such outstanding certificate as provided above. |
| 7. | Employee Benefit and Compensation Plans. As at the Effective Time, there are no outstanding employee benefit and/or employee, officer, or director compensation plans authorized or existing by Chenghui-Nevada. |
| 8. | Outstanding Awards. As at the Effective Time, there are no outstanding stock options, purchase rights, restricted stock awards, or other stock awards relating to the Chenghui-Nevada Common Stock. |
| 9. | Filings, Licenses, Permits, Titled Property, Etc. As necessary, following the Effective Time, Chenghui-Colorado shall apply for new qualifications to conduct business, obtain licenses and permits, and apply for or obtain similar authorizations on its behalf and in its own name in connection with the CONVERSION and to reflect the fact that it is a Colorado corporation. As required or appropriate, following the Effective Time, all real, personal, or intangible property of Chenghui -Nevada, which was titled or registered in the name of Chenghui-Nevada, shall be re-titled or re-registered, as may be applicable, in the name of Chenghui-Colorado by performing the appropriate filings and/or notices to the appropriate parties (including, without limitation, any applicable governmental, quasi-governmental, or self-regulatory agencies that have authority over the corporation). |
| 10. |
Further Assurances. If, at any time after the Effective Time, Chenghui-Colorado shall determine or be advised that any deeds, bills of sale, assignments, agreements, documents, or assurances or any other acts or things are necessary, desirable or proper, consistent with the terms of this Plan to vest, perfect or confirm, of record or otherwise, in Chenghui-Colorado its right, title or interest in, to or under any of the rights, privileges, immunities, powers, purposes, franchises, properties, or assets of Chenghui-Nevada, or to otherwise carry out the purposes of this Plan, Chenghui-Colorado and its proper officers and directors (or their lawful designees), are hereby authorized to execute and deliver, in the name and on behalf of Chenghui-Nevada, all such deeds, bills of sale, assignments, agreements, documents, and assurances and do, in the name and on behalf of Chenghui-Nevada, all such other acts and things necessary, desirable to vest, perfect or confirm, of record or otherwise, in Chenghui-Colorado its right, title or interest in, to or under any of the rights, privileges, immunities, powers, purposes, franchises, properties , or assets of Chenghui-Nevada, or to otherwise carry out the purposes of this Plan and the CONVERSION. |
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| 11. | Implementation and Interpretation; Termination and Amendment. This Plan shall be implemented and interpreted, prior to the Effective Time, by the Board of Directors of Chenghui-Nevada and, upon the Effective Time, by the Board of Directors of Chenghui-Colorado, (a) each of which shall have full power and authority to delegate and assign any matters covered hereunder to any other party, including, without limitation, any officers of Chenghui-Nevada or Chenghui-Colorado, as the case may be, and (b) the interpretations and decisions of which shall be final, binding, and conclusive on all parties. |
| 12. | Colorado Indemnification Agreements. As promptly as practicable following the Effective Time, Chenghui-Colorado shall enter into an indemnification agreement with each member of the Board of Directors of Chenghui-Colorado and each executive officer of Chenghui-Colorado. |
| 13. | Amendment. This Plan may be amended or modified by the Board of Directors of Chenghui- Nevada at any time prior to the Effective Time, provided that an amendment made subsequent to the approval of this Plan by the shareholders of Chenghui-Nevada shall not alter or change (a) the amount or kind of shares or other securities to be received by the shareholders hereunder, (b) any term of the Articles of Incorporation or the Bylaws, other than changes permitted to be made without stockholder approval by the CBCA or under Colorado Statutes, or (c) any of the terms and conditions of this Plan if such alteration or change would adversely affect the holders of any class or series of the stock of Chenghui- Nevada. |
| 14. | Termination or Deferral. At any time before the Effective Time, (a) this Plan may be terminated and the CONVERSION may be abandoned by action of the Board of Directors of Chenghui-Nevada, notwithstanding the approval of this Plan by the shareholders of Chenghui- Nevada, or (b) the consummation of the CONVERSION may be deferred for a reasonable period of time if, in the opinion of the Board of Directors of Chenghui-Nevada, such action would be in the best interest of Chenghui-Nevada and its shareholders. In the event of termination of this Plan, this Plan shall become void and of no effect and there shall be no liability on the part of Chenghui-Nevada or its Board of Directors or shareholders with respect thereto. |
| 15. | Third Party Beneficiaries. This Plan shall not confer any rights or remedies upon any person or entity other than as expressly provided herein. |
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| 16. | Severability. Whenever possible, each provision of this Plan will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Plan is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Plan. This Plan shall be governed under the laws of the State of Colorado, except for conflicts of laws rules. |
| 17. | Authorized Representative. The shareholders and directors of Chenghui-Nevada authorize Robert P. Legg II to deliver this Plan, to effect the CONVERSION, to execute and deliver the Articles of Incorporation of Chenghui-Colorado, as the incorporator, and to execute, deliver, and file all supplement writings required to effectuate the Plan and CONVERSION. |
IN WITNESS WHEREOF, Chenghui Realty Holding Company., a Colorado corporation, has caused this Plan to be executed by its duly authorized representative as of the date first stated above.
BY ORDER OF THE BOARD OF DIRECTORS:
CHENGHUI REALTY HOLDING COMPANY a
Colorado corporation (Chenghui-Colorado)
| /s/ Sergio La Grasta | ||
| By: | Sergio La Grasta | |
| Its: | Authorized Representative |
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Document must be filed electronically. Paper documents will not be accepted. Fees & forms are subject to change. For more information or to print copies of filed documents, visit www.sos.state.co.us. |
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Colorado Secretary of State Date and Time: 01/04/2017 02:06 PM ID Number: 20161346384 Document number: 20171011713 Amount Paid: $25.00 |
Restated Constituent Filed Document
filed pursuant to §7-90-301, et seq. and §7-110-106 or §7-130-106 or §7-56-203 or §7-90-304.5 of the Colorado Revised Statutes (C.R.S.)
| ID number: | 20161346384 |
| 1. Entity name: | Social Detention, Inc. |
2. The restated constituent filed document associated with this filing is attached.
| 3. (Optional) Delayed effective date: | ______________________ |
| (mm/dd/yyyy) |
Notice:
Causing this document to be delivered to the secretary of state for filing shall constitute the affirmation or acknowledgment of each individual causing such delivery, under penalties of perjury, that the document is the individual’s act and deed, or that the individual in good faith believes the document is the act and deed of the person on whose behalf the individual is causing the document to be delivered for filing, taken in conformity with the requirements of part 3 of article 90 of title 7, C.R.S., the constituent documents, and the organic statutes, and that the individual in good faith believes the facts stated in the document are true and the document complies with the requirements of that Part, the constituent documents, and the organic statutes.
This perjury notice applies to each individual who causes this document to be delivered to the secretary of state, whether or not such individual is named in the document as one who has caused it to be delivered.
Disclaimer:
This form, and any related instructions, are not intended to provide legal, business or tax advice, and are offered as a public service without representation or warranty. While this form is believed to satisfy minimum legal requirements as of its revision date, compliance with applicable law, as the same may be amended from time to time, remains the responsibility of the user of this form. Questions should be addressed to the user’s attorney.
| RESTATE | Page 1 of 1 | Rev. 10/31/2011 |
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AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
SOCIAL DETENTION, INC.
ARTICLE I
The name of the corporation shall be SOCIAL DETENTION, INC.. (the “Corporation”).
ARTICLE II
The period of its duration shall be perpetual.
ARTICLE III
The Corporation is organized of conducting any lawful business for which a corporation may be organized under the law of the State of Colorado.
ARTICLE IV
The aggregate number of shares that the Corporation will have authority to issue is Five Hundred Million (500,000,000) with Twenty Five Million (25,000,000) shares of Preferred Stock, with par value $ 0.0001, and the balance Four Hundred Seventy Five Million (475,000,000) in Common Stock, with a par value of $ 0.0001 per share. Shares of any stock may be issued, without shareholder action, from time to time in one or more series as may from time to time be determined by the board of directors. The board of directors of this Corporation is hereby expressly granted authority, without shareholder action, and within the limits set forth in the Colorado Revised Statues, to:
(i.) Designate in whole or in part, the powers, preferences, limitations, and relative rights, of any class of shares before the issuance of any shares of that class.
(ii.) Create one or more series within a class of shares, fix the number of shares of each such series, and designate, in whole or part, the powers, preferences, limitations, and relative rights of any class of shares before the issuance of any shares of that series.
(iii.)Alter or revoke the powers, preferences limitations, and relative rights granted to orimposed upon any wholly unissued class of shares or any wholly unissued series of any class of shares.
(iv.) Increase or decrease the number of shares constituting any series, the number of shares of which was originally fixed by the board of directors, either before or after the issuance of shares of the series: provided that, the number may not be decreased below the number of shares of the series then outstanding or increased above the total number of authorized shares of the applicable class of shares available for designation as a part of the series;
(v.) Determine the dividend rate on the shares of any class of shares or series of shares, whether dividends will be cumulative, and if so, from which date(s), and the relative rights of priority, if any, payment of dividends on shares of that class of shares or series of shares;
(vi.) Determine whether that class of shares or series of shares will have voting rights, in addition to the voting rights provided by law, and, if, so, the terms of such voting;
(vii.) Determine whether or not these shares of that class of shares or series of shares will have conversion privileges and, if, so, the terms and conditions of such conversion, including provision for adjustment of the conversion rate in such events as the board of directors determines;
(viii.) Determine whether or not these shares of that class of shares or series of shares will be redeemable and, if, so, the terms and conditions of such redemption, including the date or date upon or after which they were redeemable , and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;
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(ix.) Determine whether or not these shares of that class of shares or series of shares will have a sinking fund for the redemption or purchase of shares of that class of shares or series of shares and, if, so, the terms and amount of such sinking fund;
(x.) determine the rights of the shares of that class of shares of series of shares in the event of voluntary liquidation, dissolution or dining up of the Corporation and the relative rights of priority, if any , of payment of shares of that class of shares or series of shares; and
(xi.) determine any other relative rights, preference and limitation of that class of shares or series of shares,
The allocation between the classes, or among the series or each class, or unlimited voting rights and the right to receive the net assets of the Corporation upon dissolution shall be as designated by the Board of directors. All rights accruing to the outstanding shares of the Corporation not expressly provided for to the contrary of in the corporations bylaws or in any amendment hereto shall be vested in the common stock. accordingly, unless and until otherwise designated by the board of directors of the Corporation and subject to any superior rights as so designated the Common stock shall have unlimited voting rights and be entitled to receive the net assets of the Corporation upon dissolution.
ARTICLE V
Provisions for the regulation of the internal affairs of the Corporation will be contained in its Bylaws as adopted by the Board of Directors. The number of Directors of the Corporation shall be fixed by its Bylaws.
ARTICLE V1
The corporation shall indemnify any person against expenses, including without limitation attorney’s fees, judgments, fines and amounts paid in settlement, actual and reasonably incurred by reason of the fact that he or she is or was a director or officer of the Corporation, or is or was serving as the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise in all circumstance in which and to the extent that such indemnification is permitted and provided for the laws of the State of Colorado then in effect.
ARTICLE VII
To the fullest extent permitted by Section 7 of the Colorado Business Corporations Act as the same exists of may hereafter be amended, and officer or director of the Corporation shall not be personally liable to the Corporation of its stockholders for monetary damages.
ARTICLE VIII
The Corporation expressly elects not to be governed by or be subject to the provision of section 7-111- 101 through 7-113-150 of the Colorado Revised Statutes of any similar or succor statutes adopted by any state which may be deemed to apply the corporation from time to time.
SIGNATURE
The undersigned hereby certifies on behalf of Social Detention, Inc., a corporation duly organized and existing under the laws of the State of Colorado, ( the “Corporation”) that:
| 1. | The undersigned is the President and Secretary, respectively, of the Corporation. |
| 2. | The foregoing Amended and Restated Articles of Incorporation have been duly approved by a majority vote of the Board of Directors. |
| 3. | The foregoing Amended and Restated Article of Incorporation has been duly approved by the required vote of the shareholders in accordance with Colorado Corporations Code. |
I further declare under penalty of perjury under the laws of the State of Colorado that the matters set forth in this certificate are true and correct to our knowledge.
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IN WITNESS WHEREOF, the undersigned officers have signed this Amended and Restated Articles of Incorporation this 4th day of January, 2017
| /s/ Robert P. Legg II | ||
| SOCIAL DETENTION, INC.. | ||
| Name: | Robert P. Legg II | |
| Title: | President | |
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| REPORT | Page 1 of 2 | Rev. 12/01/2012 |
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Notice:
Causing this document to be delivered to the secretary of state for filing shall constitute the affirmation or acknowledgment of each individual causing such delivery, under penalties of perjury, that the document is the individual’s act and deed, or that the individual in good faith believes the document is the act and deed of the person on whose behalf the individual is causing the document to be delivered for filing, taken in conformity with the requirements of part 3 of article 90 of title 7, C.R.S., the constituent documents, and the organic statutes, and that the individual in good faith believes the facts stated in the document are true and the document complies with the requirements of that Part, the constituent documents, and the organic statutes.
This perjury notice applies to each individual who causes this document to be delivered to the secretary of state, whether or not such individual is named in the document as one who has caused it to be delivered.
Disclaimer:
This form, and any related instructions, are not intended to provide legal, business or tax advice, and are offered as a public service without representation or warranty. While this form is believed to satisfy minimum legal requirements as of its revision date, compliance with applicable law, as the same may be amended from time to time, remains the responsibility of the user of this form. Questions should be addressed to the user’s attorney.
| REPORT | Page 2 of 2 | Rev. 12/01/2012 |
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FOR
SOCIAL DETENTION, INC.
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Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this amendment to Offering Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Alamo, State of California, on 3rd October 2018.
Social Detention, Inc.
| By: | /s/ Robert P. Legg II | |
| Robert P. Legg II | ||
| President and Chief Executive Officer |
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