LiquidValue Development Inc. (Form: 10-Q, Received: 08/11/2020 16:55:24)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________to _________

000-55038

Commission file number

LiquidValue Development Inc.

(Exact name of registrant as specified in its charter)

NEVADA		27-1467607
State or other jurisdiction of incorporation or organization		(I.R.S. Employer Identification No.)

4800 Montgomery Lane, Suite 210, Bethesda, Maryland		20814
(Address of principal executive offices)		(Zip Code)

301-971-3940

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
(Do not check if a smaller reporting company)		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 11, 2020, there were 704,043,324 shares of the registrant’s common stock $0.001 par value per share, issued and outstanding.

Table of Contents

PART I FINANCIAL INFORMATION	1

Item 1. Condensed Consolidated Financial Statements	1

Condensed Consolidated Balance Sheets (unaudited)	1

Condensed Consolidated Statements of Operations (unaudited)	2

Condensed Consolidated Statements of Stockholders’ Equity (unaudited)	3

Condensed Consolidated Statements of Cash Flows (unaudited)	4

Notes to Condensed Consolidated Financial Statements (unaudited)	5

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	12

Item 3. Quantitative and Qualitative Disclosure About Market Risk	15

Item 4. Controls and Procedures	15

PART II OTHER INFORMATION	16

Item 1. Legal Proceedings	16

Item 1A. Risk Factors	16

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	16

Item 3. Defaults Upon Senior Securities	16

Item 4. Mine Safety Disclosures	16

Item 5. Other Information	16

Item 6. Exhibits	16

SIGNATURES	17

Part I. Financial Information

LiquidValue Development Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

	June 30,	December 31,
	2020	2019
	(Unaudited)
Assets:
Real Estate
Construction in Progress	$13,519,208	$11,085,469
Land Held for Development	13,101,120	13,773,100
	26,620,328	24,858,569

Cash	1,984,129	1,083,329
Restricted Cash	3,967,829	4,319,543
Accounts Receivable	71,666	166,294
Related Party Receivable	722,053	211,271
Prepaid Expenses	15,822	33,219
Fixed Assets, Net	5,004	2,211
Deposits	23,603	23,603
Operating Lease Right-Of-Use Asset	47,040	87,193
Total Assets	$33,457,474	$30,785,232


Liabilities and Stockholders' Equity:

Liabilities:
Accounts Payable and Accrued Expenses	$3,112,151	$783,576
Accrued Interest - Related Parties	228,557	324,982
Builder Deposits	2,196,124	2,445,269
Operating Lease Liability	45,665	91,330
Note Payable	675,411	-
Income Tax Payable	534,980	420,327
Total Liabilities	6,792,888	4,065,484

Stockholders' Equity:
Common Stock, at par $0.001, 1,000,000,000 shares authorized and 704,043,324 issued, and outstanding at June 30, 2020 and December 31, 2019, respectively	704,043	704,043
Additional Paid In Capital	32,542,720	32,542,720
Accumulated Deficit	(8,743,082)	(8,802,076)
Total Stockholders' Equity	24,503,681	24,444,687
Non-controlling Interests	2,160,905	2,275,061
Total Stockholders' Equity	26,664,586	26,719,748
Total Liabilities and Stockholders' Equity	$33,457,474	$30,785,232

See accompanying notes to condensed consolidated financial statements.

LiquidValue Development Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

For the Three and Six Months Ended June 30, 2020 and 2019

(Unaudited)

	Three Months Ended June 30,		Six Months Ended June 30,
	2020	2019	2020	2019
Revenue
Rental	$-	$4,365	$-	$8,730
Property	2,047,405	5,248,220	5,001,794	16,562,450
	2,047,405	5,252,585	5,001,794	16,571,180
Operating Expenses
Cost of Sales	1,756,846	4,549,097	4,257,090	15,265,248
General and Administrative	230,760	261,732	507,267	486,745
	1,987,606	4,810,829	4,764,357	15,751,993

Income From Operations	59,799	441,756	237,437	819,187

Other Income & Expense
Interest Income	8,900	10,475	15,262	25,657
Interest Expense	(1,095)	-	(1,095)	-
Other Income	4,107	2,470	5,287	3,970
	11,912	12,945	19,454	29,627

Net Income Before Income Taxes	71,711	454,701	256,891	848,814

Provision for Income Taxes	114,653	-	114,653	-

Net (Loss) Income	(42,942)	454,701	142,238	848,814

Net Income Attributable to Non-controlling Interests	28,253	129,340	83,244	250,648

Net (Loss) Income Attributable to Common Stockholders	$(71,195)	$325,361	$58,994	$598,166

Net (Loss) Income Per Share - Basic and Diluted	$(0.00)	$0.00	$0.00	$0.00

Weighted Average Common Shares Oustanding - Basic and Diluted	704,043,324	704,043,324	704,043,324	704,043,324

See accompanying notes to condensed consolidated financial statements.

LiquidValue Development Inc. and Subsidiaries

Condensed Consolidated Statement of Stockholders' Equity

For the Three- and Six-Months Periods Ended June 30, 2020 and 2019

(Unaudited)

	Common Stock
	Shares	Par Value $0.001	Additional Paid in Capital	Accumulated Deficit	Minority Interest	Total Stockholders Equity
Balance at January 1, 2020	704,043,324	704,043	32,542,720	(8,802,076)	2,275,061	26,719,748

Distribution to Minority Shareholder					(197,400)	(197,400)

Net Income				130,189	54,991	185,180

Balance at March 31, 2020	704,043,324	$704,043	$32,542,720	(8,671,887)	$2,132,652	$26,707,528

Net (Loss) Income				(71,195)	28,253	(42,942)

Balance at June 30, 2020	704,043,324	704,043	32,542,720	(8,743,082)	2,160,905	26,664,586

	Common Stock
	Shares	Par Value $0.001	Additional Paid in Capital	Accumulated Deficit	Minority Interest	Total Stockholders Equity
Balance at January 1, 2019	704,043,324	704,043	32,542,720	(3,670,974)	2,887,328	32,463,117

Net Income				272,805	121,308	394,113

Balance at March 31, 2019	704,043,324	$704,043	$32,542,720	(3,398,169)	$3,008,636	$32,857,230

Distribution to Minority Shareholder					(740,250)	(740,250)

Net Income				325,361	129,340	454,701

Balance at June 30, 2019	704,043,324	704,043	32,542,720	(3,072,808)	2,397,726	32,571,681

See accompanying notes to condensed consolidated financial statements.

LiquidValue Development Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2020 and 2019

(Unaudited)

	2020	2019

Cash Flows From Operating Activities
Net Income	$142,238	$848,814
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation	1,389	3,327
Amortization of Debt Discount	3,777	-
Amortization of Right -Of- Use Asset	40,153	37,579
Changes in Operating Assets and Liabilities
Real Estate	(1,761,759)	10,463,768
Accounts Receivable	94,628	(33,072)
Related Party Receivable	(510,782)	(20,046)
Prepaid Expenses	17,397	23,976
Accounts Payable and Accrued Expenses	2,328,575	(845,930)
Accrued Interest - Related Parties	(96,425)	(762,246)
Operating Lease Liability	(45,665)	(41,805)
Builder Deposits	(249,145)	(880,318)
Income Tax Payable	114,653
Net Cash Provided By Operating Activities	79,034	8,794,047

Cash Flows From Investing Activities
Purchase of Fixed Assets	(4,182)	-
Net Cash Used In Investing Activities	(4,182)	-

Cash Flows From Financing Activities
Note Payable	671,634	-
Repayments to Note Payable	-	(13,899)
Distribution to Minority Shareholder	(197,400)	(740,250)
Repayment to Notes Payable - Related Parties	-	(5,745,584)
Net Cash Provided by (Used In) Financing Activities	474,234	(6,499,733)

Net Increase in Cash and Restricted Cash	549,086	2,294,314
Cash and Restricted Cash - Beginning of Year	5,402,872	4,645,164
Cash and Restricted Cash at End of Period	$5,951,958	$6,939,478

Supplementary Cash Flow Information
Cash Paid For Interest	$-	$3,822

Supplemental Disclosure of Non-Cash Investing and Financing Activities
Initial Recognition of Operating Lease Right-Of-Use Asset and Liability	$-	$174,940

See accompanying notes to condensed consolidated financial statements.

LiquidValue Development Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

June 30, 2020 (Unaudited)

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

LiquidValue Development Inc. (the “Company”), was incorporated in the State of Nevada on December 10, 2009. On July 8, 2020 the Company changed its name from SeD Intelligent Home Inc. to LiquidValue Development Inc. Alset iHome Inc., a Delaware corporation, was incorporated on February 24, 2015 and was formerly known as SeD Home & REITs Inc. Alset iHome Inc., a wholly-owned subsidiary of the Company, is principally engaged in developing, selling, managing, and leasing residential properties in the United States, and may expand from residential properties to other property types, including but not limited to commercial and retail properties. 99.99% of the Company’s common stock is owned by a wholly-owned subsidiary of Singapore eDevelopment Limited (“SeD Ltd”), a multinational public company listed on the Singapore Exchange Securities Trading Limited (“SGXST”).

Principles of Consolidation

The condensed consolidated financial statements include all accounts of the following entities as of the reporting period ending dates and for the reporting periods as follows:

Name of consolidated subsidiary	State or other jurisdiction of incorporation or organization	Date of incorporation or formation	Attributable interest
Alset iHome Inc.	Delaware	February 24, 2015	100%
SeD USA, LLC	Delaware	August 20, 2014	100%
150 Black Oak GP, Inc.	Texas	January 23, 2014	100%
SeD Development USA, Inc.	Delaware	March 13, 2014	100%
150 CCM Black Oak Ltd.	Texas	March 17, 2014	100%
SeD Ballenger, LLC	Delaware	July 7, 2015	100%
SeD Maryland Development, LLC	Delaware	October 16, 2014	83.55%
SeD Development Management, LLC	Delaware	June 18, 2015	85%
SeD Builder, LLC	Delaware	October 21, 2015	100%
SeD Texas Home, LLC	Delaware	June 16, 2015	100%
SedHome Rental, Inc.	Texas	December 19, 2018	100%
SeD REIT Inc.	Maryland	August 20, 2019	100%

All intercompany balances and transactions have been eliminated. Non–controlling interest represents the minority equity investment in the Company’s subsidiaries, plus the minority investors’ share of the net operating results and other components of equity relating to the non–controlling interest.

As of June 30, 2020 and December 31, 2019, the aggregate non-controlling interest in Alset iHome Inc. was $2,160,905 and $2,275,061, respectively, which is separately disclosed on the Condensed Consolidated Balance Sheet.

Basis of Presentation

The Company’s condensed consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”).

The unaudited financial information furnished herein reflects all adjustments, consisting solely of normal recurring items, which in the opinion of management are necessary to fairly state the financial position of the Company and the results of its operations for the periods presented. This report should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2019 filed on March 30, 2020. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The condensed consolidated balance sheet at December 31, 2019 was derived from the audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The results of operations for the interim periods presented are not necessarily indicative of results for the year ending December 31, 2020.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements. The Company's significant estimates are the valuation of real estate. Actual results could differ from those estimates.

Earnings (Loss) per Share

Basic income (loss) per share is computed by dividing the net loss attributable to the common stockholders by weighted average number of shares of common stock outstanding during the period. Fully diluted loss per share is computed similarly to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. There were no potentially dilutive financial instruments issued or outstanding for the periods ended June 30, 2020 or June 30, 2019.

Fair Value of Financial Instruments

For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the Company’s short-term financial instruments approximates fair value due to the relatively short period to maturity for these instruments.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less at the date of acquisition to be cash equivalents. There were no cash equivalents as of June 30, 2020 and December 31, 2019.

Restricted Cash

As a condition to the loan agreement with the Union Bank (formerly known as Xenith Bank, f/k/a The Bank of Hampton Roads), the Company was required to maintain a minimum of $2,600,000 in an interest-bearing account maintained by the lender as additional security for the loan. The funds were required to remain as collateral for the loan until the loan is paid off in full. The loan was fully paid off in January 2019 and the collateral was released on April 19, 2019.

On April 17, 2019, SeD Maryland Development, LLC entered into a Development Loan Agreement with Manufacturers and Traders Trust Company (“M&T Bank”). Based on the agreement, SeD Maryland Development is required to maintain a minimum balance of $2,600,000 as a security collateral fund in the interest-bearing account maintained by the lender. As part of the agreement, NVR deposits funds to M&T Bank directly from lot sales and keeps any overpayment to apply to future borrowings. On June 30, 2020 and December 31, 2019, the total restricted cash held by M&T Bank was $3,967,829 and $4,319,543, respectively.

On July 20, 2018, Black Oak LP received $4,592,079 of district reimbursement for previous construction costs incurred in land development. Of this amount, $1,650,000 will remain on deposit in the District’s Capital Projects Fund for the benefit of Black Oak LP and will be released upon receipt of the evidence of: (a) the execution of a purchase agreement between Black Oak LP and a home builder with respect to the Black Oak development and (b) the completion, finishing and readying for home construction of at least 105 unfinished lots in the Black Oak development. The restricted cash balance on June 30, 2020 and December 31, 2019 was $0 and $90,394, respectively.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable include all receivables from buyers, contractors and all other parties. The Company records an allowance for doubtful accounts based on a review of the outstanding receivables, historical collection information and economic conditions. No allowance was necessary at either June 30, 2020 or December 31, 2019.

Property and Equipment and Depreciation

Property and equipment are recorded at cost, less accumulated depreciation. Expenditures for major additions and betterments that extend the useful life or functionality are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives, which are 3 years.

Real Estate Assets

Real estate assets are recorded at cost, except when real estate assets are acquired that meet the definition of a business combination in accordance with Financial Accounting Standards Board (“FASB”) ASC 805, “Business Combinations,” which acquired assets are recorded at fair value. Interest, property taxes, insurance and other incremental costs (including salaries) directly related to a project are capitalized during the construction period of major facilities and land improvements. The capitalization period begins when activities to develop the parcel commence and ends when the asset constructed is completed. The capitalized costs are recorded as part of the asset to which they relate and are reduced when lots are sold.

The Company capitalized interest from related party borrowings of $0 and $79,662 for the six months ended June 30, 2020 and 2019, respectively. The Company capitalized interest from related party borrowings of $0 and $19,070 for the three months ended June 30, 2020 and 2019, respectively. The Company capitalized interest from the third-party borrowings of $0 and $3,822 for the six months ended June 30, 2020 and 2019, respectively. The Company capitalized interest from the third-party borrowings of $0 and $3,668 for the three months ended June 30, 2020 and 2019, respectively.

In addition to our annual assessment of potential triggering events in accordance with ASC 360, the Company applies a fair-value based impairment test to the net book value assets on an annual basis and on an interim basis, if certain events or circumstances indicate that an impairment loss may have occurred.

On October 12, 2018, 150 CCM Black Oak, Ltd. entered into an Amended and Restated Purchase and Sale Agreement for 124 lots. Pursuant to the Amended and Restated Purchase and Sale Agreement, the purchase price remained $6,175,000. 150 CCM Black Oak, Ltd. was required to meet certain closing conditions and the timing for the closing was extended. On January 18, 2019, the sale of 124 lots at the Company’s Black Oak project in Magnolia, Texas was completed. After allocating costs of revenue to this sale, we had estimated a loss of $2.4 million which was recorded as an impairment of real estate in the last quarter of 2018.

On September 30, 2019, the Company recorded approximately $4.7 million of impairment on the Black Oak project based on discounted estimated future cash flows.

On December 31, 2019, the Company recorded approximately $1.2 million of additional impairment on the Black Oak project based on discounted estimated future cash flows.

The Company did not record impairment on any of its projects during the three and six months ended on June 30, 2020.

Revenue Recognition

Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers ("ASC 606"), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The Company adopted this new standard on January 1, 2018 under the modified retrospective method. The adoption of this new standard did not have a material effect on our financial statements.

In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. The provisions of ASC 606 include a five-step process by which we determine revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which we expect to be entitled in exchange for those goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligation. A detailed breakdown of the five-step process for the revenue recognition of our Ballenger and Black Oak projects, which were essentially all of the revenue of the Company in 2020 and 2019, is as follows:

●

Identify the contract with a customer.

The Company has signed agreements with the builders for developing the raw land to ready to build lots. The contract has agreed upon prices, timelines, and specifications for what is to be provided.

●

Identify the performance obligations in the contract.

Performance obligations of the Company include delivering developed lots to the customer, which are required to meet certain specifications that are outlined in the contract. The customer inspects all lots prior to accepting title to ensure all specifications are met.

●

Determine the transaction price.

The transaction price is fixed and specified in the contract. Any subsequent change orders or price changes are required to be approved by both parties.

●

Allocate the transaction price to performance obligations in the contract.

Each lot or a group of lots is considered to be a separate performance obligation, for which the specified price in the contract is allocated to.

●

Recognize revenue when (or as) the entity satisfies a performance obligation.

The builders do the inspections to make sure all conditions/requirements are met before taking title of lots. The Company recognizes revenue when title is transferred. The Company does not have further performance obligations once title is transferred.

Sale of the Front Foot Benefit Assessments.

We have established a front foot benefit (“FFB”) assessment on all of the lots sold to NVR. This is a 30-year annual assessment allowed in Frederick County which requires homeowners to reimburse the developer for the costs of installing public water and sewer to the lots. These assessments become effective as homes are settled, at which time we can sell the collection rights to investors who will pay an upfront lump sum, enabling us to more quickly realize the revenue. The selling prices range from $3,000 to $4,500 per home depending the type of the home. Our total expected revenue from the front foot benefit assessment is approximately $1 million. To recognize revenue of the FFB assessment, both our and NVR’s performance obligations have to be satisfied. Our performance obligation is completed once we complete the construction of water and sewer facilities and close the lot sales with NVR, which inspects these water and sewer facilities prior to the close of lot sales to ensure all specifications are met. NVR’s performance obligation is to sell homes they build to homeowners. Our FFB revenue is recognized upon NVR’s sales of homes to homeowners.

Cost of Sales

Land acquisition costs are allocated to each lot based on the area method, the size of the lot comparing to the total size of all lots in the project. Development costs and capitalized interest are allocated to lots sold based on the total expected development and interest costs of the completed project and allocating a percentage of those costs based on the selling price of the sold lot compared to the expected sales values of all lots in the project.

If allocation of development costs and capitalized interest based on the projection and relative expected sales value is impracticable, those costs could also be allocated based on area method, the size of the lot comparing to the total size of all lots in the project.

Recent Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes. ASU 2109-12 eliminates certain exceptions to the guidance in Topic 740 related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes, enacted change in tax laws or rates and clarifies the accounting transactions that result in a step-up in the tax basis of goodwill. The guidance is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years. We are currently in the process of evaluating the effect that ASU 2019-12 will have on the Company's Consolidated Financial Results.

On February 25, 2016, the Financial Accounting Standards Board (FASB) released Accounting Standards Update No. 2016-02, Leases (Topic 842) (the Update). This ASU requires an entity to recognize a right-of-use asset (“ROU”) and lease liability for all leases with terms of more than 12 months. The amendments also require certain quantitative and qualitative disclosures about leasing arrangements. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard was effective for the Company on January 1, 2019.

Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As our leases do not provide a readily determinable implicit rate, we estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. The operating lease right-of-use asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. The lease term includes options to extend or terminate when we are reasonably certain the option will be exercised. In general, we are not reasonably certain to exercise such options. We recognize lease expense for minimum lease payments on a straight-line basis over the lease term. We elected the practical expedient to not recognize operating lease right-of-use assets and operating lease liabilities for lease agreements with terms less than 12 months.

In March 2018, the FASB issued ASU 2018-05, “Income Taxes (Topic 740) – Amendments to SEC paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 118.” ASU 2018-05 amends the Accounting Standards Codification to incorporate various SEC paragraphs pursuant to the issuance of SAB 118, which addresses the application of generally accepted accounting principles in situations when a registrant does not have necessary information available, prepared, or analyzed (including computation) in reasonable detail to complete the accounting for certain income tax effects of the Tax Cuts and Jobs Act. The ASU is not expected to have a material impact on the Company.

In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law in March 2020. The CARES Act lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”). Corporate taxpayers may carryback net operating losses (NOLs) originating between 2018 and 2020 for up to five years, which was not previously allowed under the 2017 Tax Act. The CARES Act also eliminates the 80% of taxable income limitations by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in 2018, 2019 or 2020. Taxpayers may generally deduct interest up to the sum of 50% of adjusted taxable income plus business interest income (30% limit under the 2017 Tax Act) for 2019 and 2020. The CARES Act allows taxpayers with alternative minimum tax credits to claim a refund in 2020 for the entire amount of the credits instead of recovering the credits through refunds over a period of years, as originally enacted by the 2017 Tax Act.

In addition, the CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. The enactment of the CARES Act did not result in any material adjustments to our income tax provision for the six months ended June 30, 2020, or to our net deferred tax assets as of June 30, 2020.

Subsequent Events

The Company evaluated the events and transactions subsequent to June 30, 2020, the balance sheet date, through August 11, 2020, the date the condensed consolidated financial statements were available to be issued.

2. CONCENTRATION OF CREDIT RISK

The group maintains cash balances at various financial institutions. These balances are secured by the Federal Deposit Insurance Corporation. At times, these balances may exceed the federal insurance limits. At June 30, 2020 and December 31, 2019, uninsured cash and restricted cash balances were $4,664,458 and $4,558,582, respectively.

3. PROPERTY AND EQUIPMENT

Property and equipment stated at cost, less accumulated depreciation, consisted of the following:

	June 30, 2020	December 31, 2019
Computer Equipment	$45,387	$41,597
Furniture and Fixtures	24,785	24,393
	70,172	65,990
Accumulated Depreciation	(65,168)	(63,779)
Fixed Assets Net	$5,004	$2,211

Depreciation expense was $1,389 and $3,327 for the six months ended June 30, 2020 and 2019, respectively. Depreciation expense was $633 and $1,663 for the three months ended June 30, 2020 and 2019, respectively.

4. BUILDER DEPOSITS

In November 2015, SeD Maryland Development, LLC (“SeD Maryland”) entered into lot purchase agreements with NVR, Inc. (“NVR”) relating to the sale of single-family home and townhome lots to NVR in the Ballenger Run Project. The purchase agreements were amended three times thereafter. Based on the agreements, NVR is entitled to purchase 479 lots for a price of approximately $64 million, which escalates 3% annually after June 1, 2018.

As part of the agreements, NVR was required to give a deposit in the amount of $5,600,000. Upon the sale of lots to NVR, 9.9% of the purchase price is taken as payback of the deposit. A violation of the agreements by NVR would cause NVR to forfeit the deposit. On January 3, 2019 and April 28, 2020, NVR gave SeD Maryland two more deposits in the amounts of $100,000 and $220,000, respectively, based on the 3rd Amendment to the Lot Purchase Agreement. On June 30, 2020 and December 31, 2019, there were $2,196,124 and $2,445,269 held on deposit, respectively.

5. NOTES PAYABLE

Union Bank Loan

On November 23, 2015, SeD Maryland entered into a Revolving Credit Note with the Union Bank in the original principal amount of $8,000,000. During the term of the loan, cumulative loan advances may not exceed $26,000,000. The line of credit bears interest at LIBOR plus 3.8% with a floor rate of 4.5%. On April 17, 2019, SeD Maryland Development LLC and Union Bank terminated the agreement and the loan was paid off.

M&T Bank Loans

On April 17, 2019, SeD Maryland Development LLC entered into a Development Loan Agreement with Manufacturers and Traders Trust Company (“M&T Bank”) in the principal amount not to exceed at any one time outstanding the sum of $8,000,000, with a cumulative loan advance amount of $18,500,000. The line of credit bears interest of LIBOR plus 375 basis points. SeD Maryland Development LLC was also provided with a Letter of Credit (“L/C”) Facility in an aggregate amount of $900,000. The L/C commission will be 1.5% per annum on the face amount of the L/C. Other standard lender fees will apply in the event L/C is drawn down. The L/C Facility is not a revolving loan, and amounts advanced and repaid may not be re-borrowed. Repayment of the Loan Agreement is secured by a $2.6 million collateral fund and a Deed of Trust issued to the Lender on the property owned by SeD Maryland.

As of June 30, 2020 and December 31, 2019, the principal loan balance was $0. As part of the transaction, the Company incurred loan origination fees and closing fees in the amount of $381,823 and capitalized it into construction in process during 2019.

On June 18, 2020, Alset iHome Inc. (formerly known as SeD Home & REITs Inc.) entered into a Loan Agreement with M&T Bank. Pursuant to the Loan Agreement, M&T Bank provided a non-revolving loan to Alset iHome Inc. in an aggregate amount of up to $2,990,000. The line of credit bears interest rate on LIBOR plus 375 basis points. Repayment of this loan is secured by a Deed of Trust issued to M&T Bank on the property owned by certain subsidiaries of Alset iHome Inc. The maturity date of this Loan is July 1, 2022. The Company together with one of its subsidiaries, SeD Maryland Development LLC, are both the guarantors of this Loan.

As of June 30, 2020, the loan balance was $664,810. As part of the transaction, the Company incurred loan origination fees and closing fees in the amount of $61,679 which are amortized over the term of the loan.

Paycheck Protection Program Loan

On April 6, 2020, the Company entered into a term note with M&T Bank with a principal amount of $68,502 pursuant to the Paycheck Protection Program (“PPP Term Note”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The PPP Loan is evidenced by a promissory note. The PPP Term Note bears interest at a fixed annual rate of 1.00%, with the first six months of principal and interest deferred. Beginning in November 2020, the Company will make 18 equal monthly payments of principal and interest with the final payment due in April 2022. The PPP Term Note may be accelerated upon the occurrence of an event of default.

The PPP Term Note is unsecured and guaranteed by the United States Small Business Administration. The Company may apply to M&T Bank for forgiveness of the PPP Term Note, with the amount which may be forgiven equal to the sum of payroll costs, covered rent and mortgage obligations, and covered utility payments incurred by the Company during the eight-week period beginning upon receipt of PPP Term Note funds, calculated in accordance with the terms of the CARES Act. At this time, we are not in a position to quantify the portion of the PPP Term Note that will be forgiven.

6. RELATED PARTY TRANSACTIONS

Loan from SeD Home Limited

The Company receives advances from SeD Home Limited, a subsidiary of SeD Ltd, to fund development and operation costs. The Company is 99.99% owned by SeD Home International, which is wholly owned by SeD Ltd. The advances bear interest of 10% and are payable on demand. As of June 30, 2020 and December 31, 2019, Alset iHome Inc. (formerly SeD Home & REITs Inc.) had outstanding principal due of $0 and accrued interest of $228,557. During the three and six months ended June 30, 2020 and 2019, the Company did not incur any interest from this related party.

Loan to/from SeD Home International

The Company receives advances from SeD Home International, the owner of 99.99% of the Company. The advances bore interest of 18% until August 30, 2017 when the interest rate was adjusted to 5% and have no set repayment terms. On December 31, 2019, there was $0 of principal and $96,424 of accrued interest outstanding. On February 24, 2020 the Company repaid outstanding interest and at the same time loaned $503,576 to SeD Home International. The advances bear interest of 5%. On June 30, 2020, SeD Home International owed the Company $433,680 in principal and $7,903 in accrued interest. During the six months ended June 30, 2020 and 2019, the Company earned interest income of $7,903 and $0, respectively. During the three months ended June 30, 2020 and 2019, the Company earned interest income of $5,536 and $0, respectively.

Management Fees

MacKenzie Equity Partners, owned by Charles MacKenzie, a Director of the Company, has a consulting agreement with the Company since 2015. Per the terms of the agreement, as amended on January 1, 2018, the Company pays a monthly fee of $15,000 with an additional $5,000 per month due upon the close of the sale to Houston LD, LLC. From January 2019, the Company pays a monthly fee of $20,000 for the consulting services. The Company incurred expenses of $60,000 and $120,000 for the three and six months ended June 30, 2020 and 2019, respectively, which were capitalized as part of Real Estate on the balance sheet as the services relate to property and project management. On June 30, 2020 and December 31, 2019, the Company owed $20,000 and $0, respectively, to this related party.

Advances to HF Enterprises Inc.

The Company pays some operating expenses for HF Enterprise Inc., a related party under the common control of Chan Heng Fai, the CEO of the Company. The advances are interest free with no set repayment terms. On June 30, 2020 and December 31, 2019, the balance of these advances was $280,471 and $211,271, respectively.

Consulting Services

A law firm, owned by Conn Flanigan, a Director of the Company, performs legal consulting services for the Company. The Company incurred expenses of $0 and $43,357 for the six months ended June 30, 2020 and 2019, respectively. The Company incurred expenses of $0 and $37,558 for the three months ended June 30, 2020 and 2019, respectively. On June 30, 2020 and December 31, 2019, the Company owed $0 to this related party.

7. STOCKHOLDERS’ EQUITY

Cash Dividend Distributions

On February 21, 2020, the Board of Managers of SeD Maryland Development LLC authorized the payment of distributions to its members in the amount of $1,200,000. Accordingly, the minority member of SeD Maryland Development LLC received a distribution in the amount of $197,400, with the remainder being distributed to a subsidiary of the Company, which is eliminated upon consolidation.

8. COMMITMENTS AND CONTINGENCIES

Lot Sale Agreements

On February 19, 2018, SeD Maryland entered into a contract to sell the Continuing Care Retirement Community Assisted Independent Living (“CCRC”) parcel to Orchard Development Corporation. It was agreed that the purchase price for the 5.9-acre lot would be $2,900,000.00 with a $50,000 deposit. It was also agreed that Orchard Development Corporation would have the right to terminate the transaction during the feasibility study period, which would last through May 30, 2018, and receive a refund of its deposit. On April 13, 2018, Orchard Development Corporation indicated that it would not be proceeding with the purchase of the CCRC parcel. On December 31, 2018, SeD Maryland entered into the Third Amendment to the Lot Purchase Agreement for Ballenger Run with NVR. Pursuant to the Third Amendment, SeD Maryland was obliged to convert the 5.9-acre CCRC parcel to 36 lots (these will be 28 feet wide villa lots) and sell such lots to NVR. SeD Maryland received the required zoning approval to change the number of such lots from 85 to 121 in July 2019.

9. SUBSEQUENT EVENTS

Name Change

On April 28, 2020, our Board of Directors unanimously recommended that the Company change its name to “LiquidValue Development Inc.” Pursuant to the Nevada Revised Statutes and our Bylaws, actions required or permitted to be taken at a meeting of the stockholders may be taken without a meeting if a written consent thereto is signed by stockholders holding not less than a majority of the voting power of the Company. On April 30, 2020, this name change was approved by the stockholder owning the majority of our issued and outstanding shares. This name change became effective on July 8, 2020. On July 7, 2020 SeD Home & REITs Inc., the 100% owned subsidiary of the Company, changed its name to Alset iHome Inc. Our Board of Directors believes that the name changes better reflect the nature of our anticipated operations.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained in this Form 10-Q that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may”, “will”, “expect”, “believe”, “anticipate”, “estimate” or “continue” or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control. These factors include by are not limited to economic conditions generally and in the industries in which we may participate, competition within our chosen industry, including competition from much larger competitors, technological advances and failure to successfully develop business relationships.

Results of Operations for the Three and Six Months Ended June 30, 2020 and 2019:

	Three- Months Ended		Six-months Ended
	June 30, 2020	June 30, 2019	June 30, 2020	June 30, 2019
Revenue	$2,047,405	$5,252,585	$5,001,794	$16,571,180
Cost of Sales	$1,756,846	$4,549,097	$4,257,090	$15,265,248
General and Administrative	$230,760	$261,732	$507,267	$486,745
Other Income & Expense	$11,912	$12,945	$19,454	$29,627
Provision for Income Taxes	$114,653	$-	$114,653	$-
Net (Loss) Income	$(42,942)	$454,701	$142,238	$848,814

Revenue

Revenue was $2,047,405 for the three months ended June 30, 2020 as compared to $5,252,585 for the three months ended June 30, 2019. Revenue was $5,001,794 for the six months ended June 30, 2020 as compared to $16,571,180 for the six months ended June 30, 2019. This decrease in revenue is caused by a decrease in property sales from the Ballenger and Black Oak projects in the first six months of 2020. The reduction in sales for the Ballenger project is caused by the lack of paved lot inventory, which we are currently working on. The reduction in sales for Black Oak in the first six months of 2020 relative to the first six months of 2019 is due to a one-time sale of $6,175,000 having occurred in 2019.

Cost of Sales

The sales in the first six months of 2019 were attributable to sales from Ballenger project and Black Oak project. All property sales revenue in the three months ended on June 30, 2019 came from Ballenger project. The gross margin ratios for Ballenger project in these periods were approximately16% and 0% for Black Oak project after the recognition of impairment charges on Black Oak project in 2018. All the sales in the three and six months ended on June 30, 2020 were attributable to sales from Ballenger project and the gross margins were approximately 15%. The different types of lots usually have different gross margins, the main reason which leads to the differences in 2019 and 2020.

General and Administrative Expenses

General and administrative expenses decreased from $261,732 in the three months ended June 30, 2019 to $230,760 in the three months ended June 30, 2020. General and administrative expenses increased from $486,745 in the six months ended June 30, 2019 to $507,267 in the six months ended June 30, 2020. The increase in those expenses is caused mainly by the increase in tax expenses and professional fees as well as expenses for set up and initial operations of Homeowners Association in Black Oak project in the first quarter of 2020.

Net Income

In the three months ended June 30, 2020, the Company had net loss of $42,942 compared to net income of $454,701 in the three months ended June 30, 2019. In the six months ended June 30, 2020, the Company had net income of $142,238 compared to net income of $848,814 in the six months ended June 30, 2019. The decrease in net income was caused by the decrease in sales in our Ballenger project.

Liquidity and Capital Resources

Our real estate assets have increased to $26,620,328 as of June 30, 2020 from $24,858,569 as of December 31, 2019. This increase is a result of capitalized costs related to the construction in progress being greater than the cost of sales related to construction in progress during the six months ended June 30, 2020.

Our liabilities increased from $4,065,484 at December 31, 2019 to $6,792,888 at June 30, 2020. Our total assets have increased to $33,457,474 as of June 30, 2020 from $30,785,232 as of December 31, 2019 due to the increase of the real estate assets.

As of June 30, 2020, we had cash of $1,984,129 and restricted cash of $3,967,829 compared to $1,083,329 and $4,319,543 as of December 31, 2019.

Our Ballenger Run project has a revolver loan from M&T Bank in the principal amount not to exceed at any one time outstanding the sum of $8,000,000, with a cumulative loan advance amount of $18,500,000. As of June 30, 2020 and December 31, 2019, the revolver loan balance was $0, respectively.

On June 18, 2020, Alset iHome Inc. (formerly known as SeD Home & REITs Inc.) entered into a Loan Agreement with M&T Bank. Pursuant to this Loan Agreement, M&T Bank provided a non-revolving loan to Alset iHome Inc. in an aggregate amount of up to $2,990,000. As of June 30, 2020, the M&T loan balance was $664,810. It is intended that this loan will be utilized to commence our residential initiatives.

On April 6, 2020, SeD Development Management LLC, one of our subsidiaries, entered into a term note with M&T Bank with a principal amount of $68,502 pursuant to the Paycheck Protection Program (“PPP Term Note”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The PPP Loan is evidenced by a promissory note. The PPP Term Note bears interest at a fixed annual rate of 1.00%, with the first six months of principal and interest deferred. Beginning in November 2020, SeD Development Management LLC will make 18 equal monthly payments of principal and interest with the final payment due in April 2022. The PPP Term Note may be accelerated upon the occurrence of an event of default.

The PPP Term Note is unsecured and guaranteed by the United States Small Business Administration. SeD Development Management LLC may apply to M&T Bank for forgiveness of the PPP Term Note, with the amount which may be forgiven equal to the sum of payroll costs, covered rent and mortgage obligations, and covered utility payments incurred by SeD Development Management LLC during the eight-week period beginning upon receipt of PPP Term Note funds, calculated in accordance with the terms of the CARES Act. During the relevant eight-week term, our payroll did not experience any material change from prior periods. Our loan balance under the PPP loan was $68,502 as of June 30, 2020.

Our subsidiaries are reviewing plans for potential additional fundraising to fund single family rental operations and the acquisition of additional real estate projects.

The future development timeline of Black Oak will be based on multiple conditions, including the amount of funds which may be raised from capital markets, the loans we may secure from third party financial institutions, and government reimbursements which may be received. The development will be step by step and expenses will be contingent on the amount of funding we will receive.

Summary of Cash Flows

A summary of cash flows from operating, investing and financing activities for the six months ended June 30, 2020 and 2019 are as follows:

	2020	2019

Net Cash Provided by Operating Activities	$79,034	$8,794,047
Net Cash Used in Investing Activities	$(4,182)	$-
Net Cash Provided by (Used in) Financing Activities	$474,234	$(6,499,733)
Net Increase in Cash and Restricted Cash	$549,086	$2,294,314
Cash and Restricted Cash at beginning of the year	$5,402,872	$4,645,164
Cash and Restricted Cash at end of the period	$5,951,958	$6,939,478

Cash Flows from Operating Activities

Cash flows from operating activities include costs related to assets ultimately planned to be sold, including land development. In the six months ended June 30, 2020, cash provided by operating activities was $79,034 compared to cash of $8,794,047 provided by in the six months ended June 30, 2019. The sales of the Ballenger and Black Oak lots in the six months of 2019 are the main reason of increase of the cash provided by the operating activities. In January 2019 we sold 124 lots in phase one of Black Oak project which contributed to increased cash provided by in six months ended June 30, 2019. With the completion of the part of phase one of Black Oak project, development speed was adjusted. No Black Oak lot was sold in the six months ended June 30, 2020. The decrease in sales and increase in development costs from Ballenger project were the main reason for the decrease of the cash provided by the operating activities in the six months ended June 30, 2020.

Cash Flows from Investing Activities

Cash flows used in investing activities in six months ended June 30, 2020 include purchases of office computer equipment.

Cash Flows from Financing Activities

In the six months ended June 30, 2020, the Company distributed $197,400 in cash to the minority shareholder and borrowed $671,634 in bank loans. In the six months ended June 30, 2019, the Company repaid $13,899 to the Union Bank loan, distributed $740,250 in cash to the minority shareholder and repaid approximately $5.7 million of related party borrowings.

Seasonality

The real estate business is subject to seasonal shifts in costs as certain work is more likely to be performed at certain times of year. This may impact the expenses of Alset iHome Inc. from time to time. In addition, should we commence building homes, we are likely to experience periodic spikes in sales as we commence the sales process at a particular location.

Impact of Recent Public Health Events

In December 2019, a novel strain of coronavirus (COVID-19) was first identified in Wuhan, Hubei Province, China, and has since spread to a number of other countries, including the United States. The COVID-19 pandemic, or other adverse public health developments, could have a material and adverse effect on our business operations.

In the three and six months ended June 30, 2020, the COVID-19 pandemic did not have a material impact on our operations. However, the extent to which the COVID-19 pandemic and the related economic decline that occurred in the United States in March of 2020 may impact our business in the future will depend on developments which are highly uncertain and cannot be predicted. The COVID-19 pandemic’s far-reaching impact on the global economy could negatively affect various aspects of our business, including demand for real estate. From March through June 2020, we continued to sell lots at our Ballenger Run project (in Maryland) for the construction of town homes to NVR. To date, sales of such town homes by NVR are up in 2020 compared to the first half of 2019. Such town homes are often a first home that generally did not require buyers to sell an existing home. We believe low interest rates have encouraged home sales. Many buyers opted to see home models at the project virtually. This technology allowed them to ask questions of sales staff and see the town homes. Home closings were able to occur electronically.

We have received strong indications that buyers and renters across the country are expressing interest in moving from more densely populated urban areas to the suburbs. We believe that our Ballenger Run project is well suited and positioned to accommodate those buyers. Our latest phase for sale at Ballenger Run, involving single-family homes, has seen a high number of interested potential buyers signing up for additional information and updates on home availability.

The COVID-19 pandemic could impact the ability of our staff and contractors to continue to work, and our ability to conduct our operations in a prompt and efficient manner. To date, we have experienced a slowdown in the planned construction of a clubhouse at the Ballenger Run project. We believe this delay was largely caused in part by policies requiring lower numbers of contractors working in indoor spaces. To date, this aspect of the project has fallen behind schedule by approximately one to two weeks.

The COVID-19 pandemic may adversely impact the timeliness of local government in granting required approvals. Accordingly, COVID-19 may cause the completion of important stages in our real estate projects to be delayed.

At our Black Oak project in Texas, we have strategically redesigned the lots over the past year for a smaller “starter home” products that we believe will be more resilient in fluctuating markets. Should we initiate sales at Black Oak, we believe the same implications described above regarding our Ballenger Run project may apply to our Black Oak project (including the general trend of customers’ interest shifting from urban to suburban areas). In addition, Houston and its surrounding areas have been economically impacted by the decline in energy prices in 2020. Unlike our Ballenger Run project, our Black Oak project may include our involvement in single family rental home development.

Impact on Staff

Most of our staff works out of our Bethesda, Maryland office. Our staff has shifted to mostly working from home since March 2020, but this has had minimal impact on our operations to date. The COVID-19 pandemic has also impacted the frequency with which our management would otherwise travel to the Black Oaks project; however, we have a contractor in Texas providing supervision of the project. Management continues to regularly supervise the Ballenger Run project. Limitations on the mobility of our management and staff may slow down our ability to enter into new transactions and expand existing projects.

We have not reduced our staff in connection with the COVID-19 pandemic. To date, we did not have to expend significant resources related to employee health and safety matters related to the COVID-19 pandemic. We have a small staff, however, and the inability of any significant number of our staff to work due to illness or the illness of a family member could adversely impact our operations.

Off-Balance Sheet Arrangements

As of June 30, 2020, we did not have any off-balance sheet arrangements, as defined under applicable SEC rules.

Critical Accounting Policy and Estimates

The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). For detail accounting policy and estimates information, please see Note 1 in the financial statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

As a “smaller reporting company” as defined by Item 10(f)(1) of Regulation S-K, the Company is not required to provide the information required by this Item.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officers and Chief Financial Officers, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, our management, including our Chief Executive Officers and Chief Financial Officers concluded that our disclosure controls and procedures are not effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s (“SECs”) rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officers and Chief Financial Officers, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in the Company’s Internal Controls Over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act) that occurred during the quarterly period ended June 30, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Part II. Other Information

Item 1. Legal Proceeding

The registrant is not a party to, and its property is not the subject of, any material pending legal proceedings.

Item 1A. Risk Factors

Not applicable to smaller reporting companies.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

Item 6. Exhibits

The following documents are filed as a part of this report:

3.6	Amendment to the Company’s Articles of Incorporation.

10.17	Loan Agreement, dated as of June 18, 2020, by and between SeD Home & REITs Inc. and Manufacturers and Traders Trust Company.

31.1a	Certification of Co-Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.1b	Certification of Co-Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2a	Certification of Co-Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2b	Certification of Co-Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certifications of the Chief Executive Officers and Chief Financial Officers pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	LIQUIDVALUE DEVELOPMENT INC.


August 11, 2020	By:	/s/ Fai H. Chan
		Fai H. Chan Co-Chief Executive Officer and Director
		(Principal Executive Officer)

August 11, 2020	By:	/s/ Moe T. Chan
		Moe T. Chan Co-Chief Executive Officer and Director
		(Principal Executive Officer)

August 11, 2020	By:	/s/ Rongguo (Ronald) Wei
		Rongguo (Ronald) Wei Co-Chief Financial Officer
		(Principal Financial and Accounting Officer)

August 11, 2020	By:	/s/ Alan W. L. Lui
		Alan W. L. Lui Co-Chief Financial Officer
		(Principal Financial and Accounting Officer)

Exhibit 3.6

Exhibit 10.17

LOAN AGREEMENT

THIS LOAN AGREEMENT (this "Agreement") is made as of the 18th day of June, 2020, by and between SeD HOME & REITS INC., a Delaware corporation, (the "Borrower") and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation (together with its successors and assigns, the "Lender").

WITNESSETH:

The Borrower has requested that the Lender establish for the benefit of the Borrower a non-revolving credit facility in an original principal amount not to exceed the sum of $2,990,000 (such credit facility, as the same may from time to time be extended, amended, restated, supplemented or otherwise modified, being hereinafter referred to as the "Loan").

It is a condition precedent, among others, to the agreement of the Lender to establish the Loan that the Borrower executes and delivers this Agreement in order to evidence certain understandings between the parties with respect thereto.

NOW, THEREFORE, THIS AGREEMENT WITNESSETH, that in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby covenant and agree as follows:

The Loan. Subject to and in accordance with the provisions of this Agreement, the Lender agrees to make available to the Borrower the Loan in a principal amount not to exceed the sum of Two Million Nine Hundred Ninety Thousand Dollars ($2,990,000). The proceeds of the Loan shall be evidenced by, shall be advanced pursuant to, and shall be repaid, with interest, in accordance with, the terms and conditions set forth in a Promissory Note dated of even date herewith executed by the Borrower, as maker, in favor of the Lender, as payee, in the original principal amount of $2,990,000 (such Promissory Note, as the same may from time to time be extended, amended, restated, supplemented or otherwise modified, being hereinafter referred to as the "Note"). Interest shall accrue and be payable as provided in the Note only on such portion of the Loan as may from time to time be advanced and remain outstanding. The Loan is not a revolving credit. Thus, amounts advanced to or for the account of the Borrower under the Loan and repaid may not be readvanced.

Purpose of the Loan. The proceeds of the Loan shall be advanced to the Borrower by the Lender to finance the working capital needs of the Borrower in connection with its real estate projects. As hereinafter more particularly set forth, at the time of each request by the Borrower for an advance of a portion of the proceeds of the Loan, the Borrower shall furnish to the Lender a signed draw request certification substantially in the form attached hereto as Exhibit A and made a part hereof (a "Draw Request"), accompanied by such information regarding the project and purposes for which funds are being requested as the Lender may reasonably request, including without limitation, the proposed budget for such project and any and all executed instruments, agreements, memoranda of understandings or other writings relating to such project and such other information as the Lender may reasonably require. All of such information shall be subject to the Lender's approval, which approval shall not be unreasonably withheld.

Guaranties and Security. The prompt payment and performance of the obligations of the Borrower to the Lender under the Loan shall be jointly and severally guaranteed by SeD MARYLAND DEVELOPMENT, LLC, a Delaware limited liability company, (the "Owner") and SeD INTELLIGENT HOME INC., a Nevada corporation, (the "Additional Guarantor"; the Owner and the Additional Guarantor being hereinafter sometimes referred to individually as a "Guarantor" and collectively as the "Guarantors") pursuant to the terms of a Guaranty Agreement dated of even date herewith executed by the Guarantors in favor of the Lender (such Guaranty Agreement, as the same may from time to time be extended, amended, restated, supplemented or otherwise modified, being hereinafter referred to as the "Guaranty"). The Owner's obligations to the Lender under the Loan and the Guaranty shall be secured by, among other things, the lien of an Indemnity Deed of Trust, Assignment and Security Agreement of even date herewith executed by the Owner, as grantor, in favor of Steven McGuire, Timothy J. Reynolds and Danielle Frederick, as trustees, for the benefit of the Lender (such Indemnity Deed of Trust, Assignment and Security Agreement, as the same may from time to time be extended, amended, restated, supplemented or otherwise modified, being hereinafter referred to as the "Deed of Trust"), covering, among other things, the Owner's fee simple interest in a residential subdivision located in Frederick County, Maryland known as "Ballenger Run" (the "Project") containing single-family and multi-family building lots (individually, a "Lot" and collectively, the "Lots") and other building parcels (individually, a "Parcel" and collectively, the "Parcels"), all as more particularly described in the Deed of Trust (all of such Lots and Parcels, together will all improvements now or hereafter erected thereon and all other real and personal property at any time covered by the lien of the Deed of Trust being hereinafter referred to collectively as the "Property"). The lien of the Deed of Trust on the Property shall be subject only to a prior lien of the Lender arising out of a land development loan in an original principal amount not to exceed at any one time outstanding the sum of $8,000,000 and a letter of credit facility in the aggregate stated amount of $900,000 made by the Lender to the Owner on April 17, 2019 (such land development loan and letter of credit facility, as the same may be modified, amended, extended or renewed from time to time, being hereinafter sometimes referred to both individually and collectively as the "Development Loan"), the proceeds of which are being utilized by the Lender to finance the development of the Property in accordance with the terms of a Development Loan Agreement dated April 17, 2019 executed by and between the Owner and the Lender (such Development Loan Agreement, as the same may from time to time be extended, amended, restated, supplemented or otherwise modified, being hereinafter referred to as the "Development Loan Agreement").

Cash Collateral Account. In addition to the lien in favor of the Lender on the Property, the prompt payment and performance of the obligations of the Borrower and the Guarantors to the Lender under the Loan shall be secured by a pledge of all rights of the Borrower and the Guarantors in and to the cash collateral account maintained at the Lender designated as Account No. 15004230063014, and styled "Ballenger Run Collateral Account" (such collateral account, together with all sums now or hereafter deposited therein, and all interest earned thereon, being hereinafter referred to collectively as the "Cash Collateral Account"), which Cash Collateral Account was established, and is required to be maintained, by the Owner pursuant to the terms of the Development Loan Agreement. In order to perfect such pledge and assignment, the Borrower and the Guarantors shall execute and deliver, in favor of the Lender, contemporaneously herewith, an Assignment and Pledge of Collateral Account pursuant to which the Borrower and the Guarantors shall assign, pledge and grant a security interest to the Lender in all of their respective right, title and interest, whether held jointly or severally, together or with others, in and to the Cash Collateral Account, together with all funds now or at any time hereafter on deposit therein and all interest earned thereon (such Assignment and Pledge of Collateral Account, as the same may from time to time be extended, amended, restated, supplemented or otherwise modified, being hereinafter referred to as the "Pledge Agreement"; this Agreement, the Note, the Guaranty, the Deed of Trust, the Pledge Agreement and all other documents now or hereafter executed and delivered to evidence, secure, guarantee or otherwise provide for the Loan being hereinafter collectively referred to as the "Loan Documents").

Advance Procedures. At least five (5) business days prior to the requested date of each advance of any portion of the proceeds of the Loan, the Borrower shall deliver to the Lender a properly completed and executed written Draw Request, substantially in the form of Exhibit A attached hereto (or in another form reasonably approved by the Lender), confirming that the advance is being requested in connection with one of the Borrower's real estate projects and setting forth the amount of proceeds desired, together with such project budgets, schedules, statements, invoices, bills, and other documents, certificates and information reasonably required by the Lender documenting the application of those proceeds of the Loan. Upon the satisfaction of all applicable conditions of this Agreement and the other Loan Documents, the Lender shall make the requested advance to the Borrower within five (5) business days after such satisfaction. Each Draw Request, and the Borrower's acceptance of any advance, shall be deemed to ratify and confirm that all representations and warranties contained herein and in each of the other Loan Documents remain true and correct in all material respects as of the date of the Draw Request and the advance, respectively. The Lender shall not be required to make advances more frequently than once during each calendar month.

Conditions Precedent to Advances. (a) Prior to the first advance of any portion of the proceeds of the Loan, the Borrower shall satisfy each of the following requirements:

(i)

The Lender shall have received its required Facility Fee (as hereinafter defined) and the Borrower shall have paid all other fees, costs and expenses (including the reasonable fees and costs of the Lender's counsel) then required to be paid pursuant to this Agreement and all other Loan Documents.

(ii)

The Lender shall have received and approved financial statements relating to the Borrower and the Guarantors, in form and detail satisfactory to the Lender and certified as to accuracy, in all material respects, by or on behalf of the Borrower and the Guarantors.

(iii)

The Lender shall have received and approved such evidence as the Lender may reasonably require of the existence, good standing, authority and capacity of the Borrower and the Guarantors to execute, deliver and perform their respective obligations to the Lender under the Loan Documents, including, an instrument certifying the officers or other representatives of the Borrower and the Guarantors who are authorized to execute the Loan Documents; and true and complete copies of resolutions and/or consents of the Borrower and the Guarantors approving the Loan Documents and authorizing the transactions contemplated in this Agreement and the other Loan Documents.

(iv)

The Borrower and the Guarantors shall have duly executed, acknowledged and/or sworn to as required, and delivered to the Lender all Loan Documents then required by the Lender, dated the date of this Agreement, each in form and content reasonably satisfactory to the Lender.

(v)

The Lender shall have received the written opinion of counsel satisfactory to the Lender for the Borrower and the Guarantors addressed to the Lender, dated the date of this Agreement.

(vi)

The Lender shall have received a paid policy of title insurance in standard ALTA form or a valid and enforceable commitment to issue the same from a company satisfactory to the Lender in the amount of the Loan and which may be endorsed or assigned to the successors and assigns of the Lender without additional cost, insuring the lien of the Deed of Trust to be a valid second lien on the Property, free and clear of all defects, exceptions and encumbrances except such as the Lender and its counsel shall have approved.

(vii)

The Lender shall have received advice, in form and substance and from a source satisfactory to the Lender, to the effect that a search of the applicable public records discloses no conditional sales contracts, chattel mortgages, leases of personalty, financing statements or title retention agreements filed or recorded against the Property except such as the Lender shall have approved.

(viii)

The Lender shall have received all policies of insurance required by the terms of the Deed of Trust and by the other Loan Documents to be in effect from a company or companies and in form and amount satisfactory to the Lender, including without limitation, flood insurance (in the amount of the Loan or the maximum limit of coverage available on the Property, whichever is less or evidence that flood insurance is not available or otherwise required with respect to the Property), together with written evidence, in form and substance satisfactory to the Lender, that all fees and premiums due on account thereof have been paid in full.

(ix)

The Lender shall have received and approved an appraisal of the Property.

(x)

The Lender shall have received and approved one or more executed purchase contracts with NVR, Inc. ("NVR") covering all of the remaining Lots and Parcels within the Property, including without limitation, all of the Lots within the section of the Property known as the CCRC Multifamily Parcel, which must be in form and substance satisfactory to the Lender in all respects (collectively, the "NVR Purchase Contracts"), together with satisfactory evidence that such NVR Purchase Contracts remain in full force and effect, and a subordination agreement executed by NVR, in form and substance acceptable to the Lender in all respects, pursuant to which any lien held by NVR as security for its deposit under the NVR Purchase Contracts shall be subordinated to the lien of the Lender under the Deed of Trust.

(xi)

The Borrower shall have delivered to the Lender, in form and content reasonably satisfactory to the Lender, such other documents, instruments, certificates and agreements as the Lender may reasonably request.

(b)

As conditions precedent to each advance made pursuant to a Draw Request and in addition to all other requirements contained in this Agreement and the other Loan Documents, the Borrower must satisfy the following additional conditions:

(i)

All conditions set forth in subsection (a) above shall have been satisfied.

(ii)

No default or any event which, with the giving of notice or the lapse of time, or both, could become a default shall then exist hereunder or under any of the other Loan Documents.

(iii)

The representations and warranties made in the Loan Documents must then be true and correct in all material respects on and as of the date of each such advance.

(iv)

The Lender shall have received and approved such information regarding the purpose for which funds are being requested in connection with one of the Borrower's real estate projects as the Lender may reasonably request.

(v)

As of the date of the making of each such advance, no default or event of default (as described or defined therein) shall have occurred under the Development Loan or under any other indebtedness or liability for borrowed money of the Borrower or of either of the Guarantors, which default or event of default shall remain uncured beyond any applicable grace and/or cure period provided therefor.

(vi)

As of the date of the making of each such advance, to the knowledge of the Borrower, no event shall have occurred, nor shall any condition exist, that could reasonably be expected to have an adverse effect on the enforceability of the Loan Documents, be materially adverse to the financial condition of the Borrower or of either of the Guarantors, be materially adverse to the ability of the Borrower or of either of the Guarantors to fulfill its obligations under the Loan Documents, or otherwise have any material adverse effect whatsoever on the Project.

(vii)

The Borrower shall have delivered to the Lender such other information, documents, certificates and agreements as reasonably may be required by the Lender.

Limitations on Advances; Lender's Obligations. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, THE LENDER SHALL HAVE NO OBLIGATION TO MAKE ANY ADVANCE UNDER THE LOAN IF: (A) AN EVENT OF DEFAULT SHALL HAVE OCCURRED HEREUNDER OR UNDER ANY OF THE LOAN DOCUMENTS, WHICH REMAINS UNCURED; OR (B) AFTER GIVING EFFECT TO THE BORROWER'S REQUEST FOR SUCH ADVANCE, THE AGGREGATE PRINCIPAL AMOUNT OF ALL ADVANCES MADE BY THE LENDER UNDER THE LOAN WOULD EXCEED THE SUM OF $2,990,000.

Partial Release Provisions. Notwithstanding anything contained herein or in any of the other Loan Documents to the contrary, the Owner shall have the right to obtain a release of individual Lots and Parcels from the lien of the Deed of Trust in connection with a conveyance of the same to NVR pursuant to the terms of the NVR Purchase Contracts or to another third-party purchaser under a contract of sale approved by the Lender in accordance with the terms set forth in Exhibit B attached hereto and made a part hereof.

Financial Covenants. The Borrower shall comply, and shall cause each of the Guarantors to comply, with all of the terms and conditions of Exhibit C attached hereto and made a part hereof with respect to each and every one of the financial covenants described therein.

10.

Facility Fee. In consideration of the agreement of the Lender to establish the Loan for the benefit of the Borrower, and in addition to the monthly installments of interest required under the Note, the Borrower shall pay to the Lender a one-time, non-refundable facility fee in the amount of $22,500, which shall be due and payable contemporaneously with the execution and delivery of this Agreement (the "Facility Fee").

11.

Loan Account. The Lender will establish and maintain a loan account on its books to which the Lender will debit (a) the principal amount of each advance made by the Lender hereunder as of the date made, (b) the amount of any interest accrued on the Loan as and when due, and (c) any other amounts due and payable by the Borrower to the Lender from time to time under the provisions of this Agreement or any of the other Loan Documents. During the continuance of any Event of Default (as hereinafter defined), any payments made by the Borrower on account of the Loan shall be applied in such order or manner as the Lender may determine in its sole and absolute discretion.

12.

Events of Default. In addition to those events of default specifically enumerated in the Note, the Deed of Trust, the Pledge Agreement and/or any of the other Loan Documents, the occurrence of any of the following events shall constitute an event of default (an "Event of Default") and shall entitle The Lender to exercise all rights and remedies provided in the Note, the Pledge Agreements and the other Loan Documents as a result of the occurrence of the same:

(a)

The Borrower shall fail to pay any principal, interest or other amount of money due under the Loan, within ten (10) days after the date as and when due, regardless of how such amount may have become due; but excluding, however, from such grace period, the failure of the Borrower to pay all amounts due on the maturity date of the Note; or

(b)

Any information contained in any financial statement, schedule, report or any other document prepared by or on behalf of the Borrower, either of the Guarantors or any other party or parties in connection with the Loan proves at any time to be not in all material respects true and accurate at the time made, or the Borrower, either of the Guarantors or any such other party or parties shall have failed to state any material fact or any fact necessary to make such information not misleading, or any representation or warranty contained in this Agreement, or in any other document, certificate or opinion delivered to the Lender in connection with the Loan, proves at any time to be incorrect or misleading in any material respect as of the date such representation or warranty was made or deemed made; or

(c)

Any covenant, agreement or condition herein (other than one involving the payment of money) is not fully and timely performed, observed or kept and such failure remains uncured for more than thirty (30) days after written notice thereof shall have been sent by the Lender to the Borrower, unless (i) the nature of the failure is such that it cannot be cured within the thirty (30) day period, (ii) the Borrower institutes corrective action within the thirty (30) day period, and (iii) the Borrower diligently pursues such action until the failure is remedied and completes the cure thereof within a period of an additional thirty (30) days; or

(d)

A default or an event of default shall occur under any of the other Loan Documents, which default or event of default remains uncured beyond any applicable grace and/or cure period provided therefor; or

(e)

The Borrower or either of the Guarantors (i) applies for, or consents in writing to, the appointment of a receiver, trustee or liquidator of the Borrower or of either of the Guarantors or of all or substantially all of the Borrower's or of either of the Guarantors'' assets, or (ii) files a voluntary petition in bankruptcy or admits in writing its inability to pay its debts as they become due, or (iii) makes a general assignment for the benefit of creditors, or (iv) files a petition or an answer seeking a reorganization (other than a reorganization not involving the liabilities of the Borrower or either of the Guarantors) or an arrangement with creditors or takes advantage of any bankruptcy or insolvency law, or (v) files an answer admitting the material allegations of a petition filed against the Borrower or either of the Guarantors in any bankruptcy, reorganization or insolvency proceeding; or

(f)

An order, judgment or decree is entered by any court of competent jurisdiction on the application of a creditor adjudicating the Borrower or either of the Guarantors as bankrupt or insolvent, or appointing a receiver, trustee or liquidator of the Borrower or of either of the Guarantors or of all or substantially all of the Borrower's or either of the Guarantors' assets, and such order, judgment or decree continues unstayed and in effect for a period of sixty (60) days from the date entered; or

(g)

At any time during the term of the Loan any default or event of default shall occur under the Development Loan, which default or event of default shall remain uncured beyond any applicable grace and/or cure period provided therefor; or

(h)

At any time during the term of the Loan, without the prior, express written consent of the Lender, (i) any one or more of the NVR Purchase Contracts is terminated or becomes of no further force or effect for any reason whatsoever, (ii) a default or event of default shall occur under any of the NVR Purchase Contracts, which default or event of default shall continue beyond any applicable grace and/or cure period provided therefor, or (iii) any of the NVR Purchase Contracts is modified or amended in any material manner; or

(i)

At any time during the term of the Loan, without the Lender's prior express written consent thereto, the Borrower and/or either of the Guarantors fails to comply with the terms of Section 9 hereof with respect to any of the financial covenants set forth in Exhibit C attached hereto and made a part hereof.

13.

Fees and Expenses; Indemnity. The Borrower shall pay all reasonable fees, charges, costs and expenses incurred by the Lender in connection with the preparation or enforcement of any of the Loan Documents or otherwise required to satisfy the conditions of the Loan Documents, including without limitation, all reasonable attorneys' fees and charges. The Borrower shall hold the Lender harmless and indemnify the Lender against all claims of brokers and "finders" arising by reason of the execution and delivery of the Loan Documents or the consummation of the transaction contemplated hereby to the extent that such claims result from or are related to the actions of the Borrower or the Guarantors or any person or entity affiliated with the Borrower and/or the Guarantors.

14.

Financial Information; Reports. The Borrower further covenants and agrees to provide or cause to be provided to the Lender, as and when the same shall be due, all of the financial information and other reports required to be provided pursuant to the terms of the Deed of Trust and each of the other Loan Documents. The Borrower further agrees to provide or cause to be provided to the Lender, with reasonable promptness, such additional information, reports or statements as the Lender may from time to time reasonably request.

15.

Further Assurances; Authorization to File Documents; No Merger. At any time, and from time to time, within ten (10) business days following any written request by the Lender, the Borrower will, at the Borrower's expense, (a) promptly correct any defect, error or omission in any Loan Document, (b) execute, acknowledge, deliver, procure, record or file such further instruments and do such further acts as the Lender reasonably deems necessary, desirable or proper to carry out the purposes of the Loan Documents and to identify and subject to the liens and security interests of the Loan Documents any property intended to be covered thereby, including any renewals, additions, substitutions, replacements or appurtenances thereto, (c) execute, acknowledge, deliver, procure, file or record any document or instrument the Lender reasonably deems necessary, desirable or proper to protect the liens or the security interest under the Loan Documents against the rights or interests of third persons, and (d) provide such certificates, documents, reports, information, affidavits and other instruments and do such further acts reasonably deemed necessary, desirable or proper by the Lender to comply with the requirements of any governmental authority having jurisdiction over the Lender. Upon any failure by the Borrower to do so after the Lender's written request and a reasonable opportunity to comply, the Lender may make, execute and record any and all such instruments, certificates and other documents for and in the name of the Borrower or the Guarantors, all at the sole expense of the Borrower, and the Borrower hereby appoints the Lender the agent and attorney-in-fact of the Borrower and the Guarantors to do so, this appointment being coupled with an interest and being irrevocable. Without limitation of the foregoing, the Borrower irrevocably authorizes the Lender at any time and from time to time to file any initial financing statements, amendments thereto and continuation statements deemed necessary or desirable by the Lender to establish or maintain the validity, perfection and priority of the security interests granted under the Loan Documents, and the Borrower ratifies any such filings made by the Lender prior to the date hereof.

16.

Standard of Conduct of the Lender. Except to the extent the Lender has otherwise expressly agreed to act reasonably as provided herein or in any of the other Loan Documents, nothing contained in this Agreement or any other Loan Document shall limit the right of the Lender to exercise its business judgment or to act, in the context of the granting or withholding of any advance or consent under this Agreement or any other Loan Document, in a subjective manner, whether or not objectively reasonable under the circumstances, so long as the Lender's exercise of its business judgment or action is made or undertaken in good faith. The Borrower and the Lender intend by the foregoing to set forth and affirm their entire understanding with respect to the standard pursuant to which the Lender's duties and obligations are to be judged and the parameters within which the Lender's discretion may be exercised hereunder and under the other Loan Documents. As used herein, "good faith" means honesty in fact in the conduct and transaction concerned.

17.

No Partnership. Nothing contained in this Agreement shall be construed in a manner to create any relationship between the Borrower and the Lender other than the relationship of borrower and lender and the Borrower and the Lender shall not be considered partners or co-venturers for any purpose on account of this Agreement.

18.

Authorized Persons. The Lender is authorized to rely upon the continuing authority of the Authorized Persons named in the Note to bind the Borrower with respect to all matters pertaining to the Loan and the Loan Documents, including the submission of Draw Requests, the selection of interest rates and the initiation of wire transfers. Such authorization may be changed only upon written notice addressed to the Lender accompanied by evidence, reasonably satisfactory to the Lender, of the authority of the person giving such notice. Such notice shall be effective not sooner than five (5) business days following receipt thereof by the Lender.

19.

Notices. All notices required or which any party desires to give hereunder or under any other Loan Document shall be in writing and, unless otherwise specifically provided in such other Loan Document, shall be deemed sufficiently given or furnished if delivered by personal delivery, by nationally recognized overnight courier service or by certified United States mail, postage prepaid, addressed to the party to whom directed at the applicable address set forth below (unless changed by similar notice in writing given by the particular party whose address is to be changed), and in the case of notices to the Lender, to the attention of the bank officer responsible for the Borrower's banking relationship with the Lender. Any notice shall be deemed to have been given (a) at the time of personal delivery, or (b) in the case of courier, one (1) business day after the delivery of such notice to the courier service, or (c) in the case of mail, three (3) business days after the date when deposited in the mail in the manner prescribed above; provided that service of a notice required by any applicable statute shall be considered complete when the requirements of that statute are met. Notwithstanding the foregoing, no notice of change of address shall be effective except upon actual receipt. In addition, notices may be sent by electronic mail to the following addresses (moe@sed.com.sg and charley@sed.com.sg) and shall be deemed given or made when delivered provided that a duplicate copy of such notice is sent by personal delivery, mail or overnight courier service in the manner hereinabove provided. This Section shall not be construed in any way to affect or impair any waiver of notice or demand provided in this Agreement or in any other Loan Document or to require giving of notice or demand to or upon any Person (as hereinafter defined) in any situation or for any reason.

The address of the Borrower is:

SeD Home & REITs Inc.

c/o SeD Development USA, Inc.

Hampden Square

4800 Montgomery Lane, Suite 210

Bethesda, Maryland 20814

Attn:

Charles MacKenzie

With a copy to:

SeD Intelligent Home Inc.

c/o Singapore eDevelopment Limited

7 Temasek Boulevard #29-01B

Suntec Tower 1

Singapore 038987

Attn:

Moe Chan

The address of the Lender is:

Manufacturers and Traders Trust Company

Commercial Real Estate Department

One Light Street, 16th Floor

Mail Code: MD2-L160

Baltimore, Maryland 21202

20.

Approvals. By accepting or approving anything required to be observed, performed or fulfilled by the Borrower or to be given to the Lender pursuant to this Agreement, including, without limitation, any document, instrument, certificate, or other materials or information, the Lender shall not be deemed to have warranted or represented the sufficiency, legality, effectiveness or legal effect of the same, or of any term, provision or condition thereof and any such acceptance or approval thereof shall not be or constitute any warranty or representation with respect thereto by the Lender.

21.

Permitted Successors and Assigns; Disclosure of Information.

(a)

Each and every one of the covenants, terms, provisions and conditions of this Agreement and the Loan Documents shall apply to, bind and inure to the benefit of the Borrower, its successors and those assigns of the Borrower consented to in writing by the Lender, and shall apply to, bind and inure to the benefit of the Lender and the endorsees, transferees, successors and assigns of the Lender, and all Persons claiming under or through any of them.

(b)

The Borrower agrees not to transfer, assign, pledge or hypothecate any right or interest in any payment or advance due pursuant to this Agreement, or any of the other benefits of this Agreement, without the prior written consent of the Lender, which consent may be withheld by the Lender in its sole and absolute discretion. Any such transfer, assignment, pledge or hypothecation made or attempted by the Borrower without the prior written consent of the Lender shall be void and of no effect. No consent by the Lender to an assignment shall be deemed to be a waiver of the requirement of prior written consent by the Lender with respect to each and every further assignment and as a condition precedent to the effectiveness of such assignment.

(c)

The Lender may sell or offer to sell the Loan or interests therein to one or more assignees or participants; and no such assignment or participation shall modify the liabilities or obligations of the Borrower or either of the Guarantors under the Loan Documents. The Borrower shall execute, acknowledge and deliver any and all instruments reasonably requested by the Lender in connection therewith, and to the extent, if any, specified in any such assignment or participation, such assignee(s) or participant(s) shall have the same rights and benefits with respect to the Loan Documents as such Person(s) would have if such Person(s) were the Lender hereunder. The Borrower, on its own behalf and on behalf of the other Borrower Parties (as hereinafter defined), hereby (i) acknowledges and agrees that the Lender is entitled, at any time and from time to time, without notice to or further consent by the Borrower or any other Borrower Party, to sell, transfer, assign or otherwise convey, and to attempt to sell, transfer, assign or otherwise convey, the Loan and the Loan Documents, or any interest herein or therein or rights with respect hereto or thereto (including, but not limited to, participation interests, syndication interests, servicing rights and beneficial interests issued in connection with mortgage-backed or similar certificates or securities) to any Person, and (ii) irrevocably authorizes the Lender, and any Person acting on behalf of the Lender, to deliver and disclose to any Person any and all information and materials related to the Loan, the Loan Documents and/or the Borrower Parties now or hereafter in the Lender's possession (collectively, the "Information"). The Information may include, but shall not be limited to, original and/or copies of financial statements, financial projections, appraisals, studies, reports, business plans, permits, licenses, approvals, organizational documents, resolutions, consents, documents (including, but not limited to, the Loan Documents), plans, drawings, specifications, contracts, bonds, credit reports, payment histories, account statements and applications (including, but not limited to, the application for the Loan). As used herein, the term "Borrower Parties" means, collectively, the Borrower, each of the Guarantors and all other obligors of all or any obligations of the Borrower and/or any other Person to the Lender in connection with the Loan; all subsidiaries and affiliates of the Borrower, the Guarantors and/or any such other obligor; the members, partners, managers, stockholders, officers, directors, employees, agents, contractors and representatives of the Borrower, either of the Guarantors or any such other obligor and/or any such subsidiary or affiliate; and any other Person now or hereafter owning a direct or indirect interest in the Borrower, either of the Guarantors, any such obligor and/or any such subsidiary or affiliate.

22.

Liability of the Lender; Indemnification. The Lender shall not be liable for any act or omission by it pursuant to the provisions of this Agreement in the absence of fraud, gross negligence or willful misconduct. The Lender shall incur no liability to the Borrower, or any other party in connection with the acts or omissions of the Lender in reliance upon any certificate or other paper believed by the Lender to be genuine or with respect to any other thing which the Lender may do or refrain from doing, unless such act or omission amounts to fraud, gross negligence or willful misconduct. In connection with the performance of its duties pursuant to this Agreement, the Lender may consult with counsel of its own selection, and anything which the Lender may do or refrain from doing, in good faith, in reliance upon the opinion of such counsel shall be full justification and protection to the Lender, absent fraud, gross negligence or willful misconduct by the Lender. In addition, the Borrower covenants and agrees to indemnify and hold the Lender harmless from and against any liability for hazardous materials discovered on or emanating from any parcel of real property acquired or developed with the proceeds of the Loan.

23.

Severability. In the event any provision of this Agreement (or any part of any provision) is held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision (or remaining part of the affected provision) of this Agreement; but this Agreement shall be construed as if such invalid, illegal or unenforceable provision (or any part thereof) had not been contained in this Agreement, but only to the extent it is invalid, illegal or unenforceable.

24.

Third Parties; Benefit. All conditions to the obligation of the Lender to make advances hereunder are imposed solely and exclusively for the benefit of the Lender and its assigns and no other Persons shall have standing to require satisfaction of such conditions in accordance with their terms or be entitled to assume that the Lender will refuse to make advances in the absence of strict compliance with any or all thereof and no other Person shall, under any circumstances, be deemed to be the beneficiary of such conditions, any or all of which may be freely waived in whole or in part by the Lender at any time in the sole and absolute exercise of its discretion. The terms and provisions of this Agreement are for the benefit of the parties hereto and, except as herein specifically provided, no other Person shall have any right or cause of action on account thereof.

23.

WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING OR ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTE OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).

EACH PARTY HERETO HEREBY:

(a)

CERTIFIES THAT NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER;

(b)

ACKNOWLEDGES THAT THIS WAIVER AND THE PROVISIONS OF THIS SECTION WERE A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THE LOAN DOCUMENTS;

(c)

CERTIFIES THAT THIS WAIVER IS KNOWINGLY, WILLINGLY, AND VOLUNTARILY MADE;

(d)

AGREES AND UNDERSTANDS THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH PROCEEDING OR ACTION, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS OR ANY OTHER AGREEMENT, AND FURTHER AGREES THAT SUCH PARTY SHALL NOT SEEK TO CONSOLIDATE ANY SUCH PROCEEDING OR ACTION WITH ANY OTHER PROCEEDING OR ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED;

(e)

AGREES THAT THE BORROWER AND THE LENDER ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING OR ACTION AS CONCLUSIVE EVIDENCE OF THIS WAIVER OF JURY TRIAL; AND

(f)

REPRESENTS AND WARRANTS THAT SUCH PARTY HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

26.

Forum. The Borrower hereby irrevocably submits generally and unconditionally for itself and in respect of its property to the non-exclusive jurisdiction of any state court or any United States federal court sitting in the State specified in the governing law section of this Agreement. The Borrower hereby irrevocably waives, to the fullest extent permitted by law, any objection that the Borrower may now or hereafter have to the laying of venue in any such court and any claim that any such court is an inconvenient forum. The Borrower hereby agrees and consents that, in addition to any methods of service of process provided for under applicable law, all service of process in any such suit, action or proceeding in any state court or any United States federal court sitting in the State specified in the governing law section of this Agreement or in which any of the collateral is located may be made by certified or registered mail, return receipt requested, directed to the Borrower at its address for notice set forth in this Agreement, or at a subsequent address of which the Lender received actual notice from the Borrower in accordance with the notice section of this Agreement, and service so made shall be complete five (5) days after the same shall have been so mailed. Nothing herein shall affect the right of the Lender to serve process in any manner permitted by law or limit the right of the Lender to bring proceedings against the Borrower in any other court or jurisdiction.

27.

Defined Terms. In all cases where more than one party executes this Agreement as a Borrower, then the term "Borrower" as used in this Agreement shall refer to all such Persons jointly and severally, and to each of them, and all promises, agreements, covenants, waivers, consents, representations, warranties and other provisions in this Agreement are made by and shall be binding upon each and every such undersigned Person, jointly and severally, and the Lender may pursue any Borrower hereunder without being required to pursue any other Borrower. Whenever the context of any provisions hereof shall require it, words in the singular shall include the plural, words in the plural shall include the singular, and pronouns of any gender shall include the other genders. Captions and headings in this Agreement are for convenience only and shall not affect the construction hereof. The terms "herein", "hereof" "hereto" "hereunder" and similar terms refer to this Agreement and not to any particular Section or subsection of this Agreement. The terms "include" and "including" shall be interpreted as if followed by the words "without limitation". For purposes of this Agreement, "Person" or "Persons" shall include firms, associations, partnerships (including limited partnerships), joint ventures, trusts, corporations, limited liability companies, and other legal entities, including governmental bodies, agencies, or instrumentalities, as well as natural persons.

28.

Patriot Act Notice. The Lender hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Patriot Act") and 31 C.F.R. § 1010.230 (the "Beneficial Ownership Regulations"), the Lender is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower, a Beneficial Ownership Certification, and other information that will allow the Lender to identify the Borrower in accordance with the Patriot Act and the Beneficial Ownership Regulations. The Borrower shall, promptly following a request by the Lender, provide all documentation and other information that the Lender requests in order to comply with its internal policies and its ongoing obligations under "know your customer" and anti-money laundering rules and regulations, including without limitation, the Patriot Act and the Beneficial Ownership Regulations.

29.

Amendments. None of the terms or provisions of this Agreement may be changed, waived, modified, discharged or terminated except by instrument in writing executed by the party or parties against whom enforcement of the change, waiver, modification, discharge or termination is asserted. None of the terms or provisions of this Agreement shall be deemed to have been abrogated or waived by reason of any failure or failures to enforce the same.

30.

Governing Law. This Agreement shall be governed by and construed, interpreted and enforced in accordance with the laws of the State of Maryland.

31.

Counterparts; Electronic Signatures. This Agreement may be executed in any number of counterparts, each of which shall be considered an original for all purposes; provided, however, that all such counterparts shall together constitute one and the same instrument. In addition, the parties hereto hereby acknowledge and agree that, for all purposes, any Loan Document, or any other instrument or agreement (or signature page thereto) signed and transmitted electronically shall be treated as an original document. The signature of any party thereon is to be considered as an original signature, and the document transmitted is to be considered to have the same binding effect as an original signature on an original document.

32.

Entire Agreement. The Loan Documents constitute the entire understanding and agreement between the Borrower and the Lender with respect to the transactions arising in connection with the Loan, and supersede all prior written or oral understandings and agreements between the Borrower and the Lender with respect to the matters addressed in the Loan Documents. In particular, and without limitation, the terms of any commitment by the Lender to establish the Loan are merged into the Loan Documents. Except as incorporated in writing into the Loan Documents, there are no representations, understandings, stipulations, agreements or promises, oral or written, with respect to the matters addressed in the Loan Documents. If there is any conflict between the terms, conditions and provisions of this Agreement and those of any other instrument or agreement, including any other Loan Document, the terms, conditions and provisions of this Agreement shall prevail.

[Signatures contained on following pages]

WITNESS the signatures and seals of the parties hereto as of the day and year first above written.

BORROWER:

WITNESS OR ATTEST:	SeD HOME & REITS INC.

_____________________________	By:	/s/ Charley MacKenzie (SEAL)
		Charley MacKenzie
		Director

STATE OF ______________, COUNTY OF _______________, TO WIT:

I HEREBY CERTIFY, that on this ______ day of __________, 2020, before me, the undersigned Notary Public of said State, personally appeared Charley MacKenzie, who acknowledged himself to be a Director of SeD Home & REITs Inc., a Delaware corporation, known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument, and acknowledged that he executed the same in such capacity for the purposes therein contained.

WITNESS my hand and Notarial Seal.

_____________________________

Notary Public

My Commission Expires:

[Signatures continued on following page]

LENDER:

WITNESS OR ATTEST:	MANUFACTURERS AND TRADERS TRUST COMPANY

_____________________________	By:	/s/ Barbara Simmons (SEAL)
		Name: Barbara Simmons
		Title: Group VP

STATE OF MARYLAND, __________ OF __________, TO WIT:

I HEREBY CERTIFY, that on this ______ day of ______________, 2020, before me, the undersigned Notary Public of said State, personally appeared __________________, who acknowledged himself/herself to be a Vice President of Manufacturers and Traders Trust Company, a New York banking corporation, known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument, and acknowledged that he/she executed the same for the purposes therein contained as the duly authorized Vice President of said banking corporation by signing the name of the banking corporation by himself/herself as Vice President.

WITNESS my hand and Notarial Seal.

_____________________________

Notary Public

My Commission Expires:

EXHIBIT A

BORROWER'S DRAW REQUEST CERTIFICATION

The undersigned, __________________________, on behalf of SeD HOME & REITS INC., a Delaware corporation, (herein called the "Borrower"), hereby requests disbursement of a portion of the proceeds of the Loan as hereinafter set forth pursuant to the terms of the Loan Agreement dated April ___, 2020 (the "Loan Agreement") executed by and between the Borrower and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation, (the "Lender") and represents, warrants, covenants and agrees as follows:

He/she is duly authorized to make this Certification and is fully cognizant of all facts and matters herein stated.

The Borrower hereby requests that an advance be made by the Lender in the amount of $__________ from the proceeds of the Loan (as defined in the Loan Agreement). The purposes for which such funds shall be utilized by The Borrower are as follows: ________________________________________________________________________________ ________________________________________________________________________________. All sums advanced by the Lender pursuant to this Draw Request will be used solely for the purposes outlined above, and for no other purpose.

All funds heretofore advanced by the Lender to the Borrower under the terms of the Loan Agreement have been utilized by the Borrower to pay those costs and obligations of the Borrower for which such sums were requisitioned, and for no other purpose.

As of the date hereof, the Borrower is in compliance with, and has satisfied, all conditions precedent to the requested advance pursuant to the terms of the Loan Agreement, the Note (as defined in the Loan Agreement) and each of the other Loan Documents (as defined in the Loan Agreement), unless waived in writing by the Lender.

No default or event of default or any event which, with the giving of notice or the lapse of time, or both, could become a default or event of default, currently exists under the Loan Agreement, the Note or any of the other Loan Documents.

As of the date hereof, to the knowledge of the Borrower, no event has occurred or condition exists which adversely affects the enforceability of any of the Loan Documents or the financial condition of the Borrower or either of the Guarantors (as defined in the Loan Agreement), or which impairs the ability of the Borrower or either of the Guarantors to fulfill its material obligations under the Loan Documents, or which otherwise materially adversely affects the Project (as defined in the Loan Agreement).

The representations and warranties of the Borrower set forth in the Loan Agreement and the other Loan Documents are reaffirmed hereby and are true and correct in all material respects as of the date hereof and such representations and warranties, along with the representations and warranties contained herein, will be true and correct in all material respects on and as of the date of such disbursement.

The Borrower understands that this Certification is made for the purpose of inducing the Lender to make an advance to the Borrower and that, in making any such advance, the Lender will rely upon the accuracy of the matters stated in this Certification.

Dated: ___________________, 20__

____________________________________

Authorized Representative of the Borrower

EXHIBIT B

PARTIAL RELEASE PROVISIONS

1. Partial Releases Generally. The Lender hereby acknowledges and agrees that the Owner has subdivided and intends to subdivide portions of the Property into separate residential building Lots and other Parcels of land and to convey such Lots and Parcels to third-parties (including NVR). Thus, notwithstanding anything contained in the Deed of Trust or in any of the other Loan Documents to the contrary, but except as otherwise expressly provided in Section 2 below of this Exhibit B, upon the achievement of each of the Release Conditions (as hereinafter defined), as determined by the Lender in its sole, but reasonable discretion, the Owner shall have the right to obtain a release of individual Lots and Parcels from the lien of the Deed of Trust in connection with a conveyance of the same to NVR pursuant to the terms of the NVR Purchase Contracts or to another third-party purchaser under a contract of sale approved by the Lender. The satisfaction of each and every one of the following conditions (hereinafter referred to as the "Release Conditions") shall be a condition precedent to the right of the Owner to obtain a release of a Lot or Parcel from the lien and effect of the Deed of Trust:

(a)

The Lender shall have previously received and approved, which approval shall not be unreasonably withheld or delayed, a legal and valid subdivision plat covering that portion of the Property in which the Lot or Parcel proposed to be released shall be located, approved (to the extent necessary) by all required governmental authorities, which shall confirm (i) that the Lot or Parcel which is proposed to be released is a separate and distinct lot or parcel of property, and (ii) that the balance of the Property remaining subject to the lien of the Deed of Trust conforms in all respects with all required zoning and building codes, rules and regulations, with adequate means of ingress and egress from a public roadway, together with such cross easement agreements as may be deemed reasonably necessary by the Lender;

(b)

Unless such Lot or Parcel is being conveyed pursuant to the terms of the NVR Purchase Contracts, the Lender shall have previously received and approved, which approval shall not be unreasonably withheld or delayed, a fully executed contract of sale covering the Lot or Parcel proposed to be released, which shall provide for a purchase price acceptable to the Lender in all respects and which shall provide sufficient sums for the payment of the Release Fee required pursuant to the terms hereof;

(c)

At the time of the request by the Owner for a release of such Lot or Parcel from the lien of the Deed of Trust, there shall not exist any Event of Default hereunder or under any of the other Loan Documents, nor any condition or state of facts which after notice and/or lapse of time would constitute an Event of Default hereunder or under any of the other Loan Documents;

(d)

At the time of the release of such Lot or Parcel from the lien of the Deed of Trust, the Owner shall have paid to the Lender a release fee (a "Release Fee") in an amount equal to the amount required for the release of such Lot or Parcel pursuant to the terms of the Development Loan Agreement, and such Release Fee shall have been applied to the sums then outstanding under the Development Loan in accordance with the terms thereof; provided, however, that in the event that at the time of the sale of such Lot or Parcel, no Release Fee is payable by the Owner under the terms of the Development Loan Agreement as a result of the fact that the Development Loan has been repaid in full and all outstanding Letters of Credit, if any, issued by the Lender under the Development Loan have been returned to the Lender or shall otherwise be fully cash collateralized, or for any other reason, then the Lender shall have the right to require that the Owner pay to the Lender an amount equal to the Release Fee that would have been payable for the release of such Lot or Parcel under the terms of the Development Loan Agreement and either apply such sum to the payment of amounts outstanding under the Loan, in such order or manner as the Lender may require, or deposit such sum into a deposit account maintained by the Lender and pledged to the Lender as additional collateral for the Loan pursuant to the terms of an assignment and pledge of deposit account in form and substance satisfactory to the Lender in all respects;

(e)

At the time of the release of such Lot or Parcel from the lien of the Deed of Trust, there shall be not less than $2,600,000 on deposit in the Cash Collateral Account; and

(f)

The Owner shall have paid all reasonable out-of-pocket costs and expenses incurred by the Lender in connection with such release, including, without limitation, legal fees and all recording costs.

2. Release of Roadways, Public Parks, School Site and Other Common Areas. In addition, provided that no Event of Default shall then exist hereunder or under any of the other Loan Documents, the Lender agrees to release from the lien of the Deed of Trust any areas within the Property designated for use as public roadways, public parks, a school or as "common areas" for no additional consideration at the time that such areas are properly conveyed to the appropriate governmental authority or to the appropriate owners association established for such purpose, so long as the Lender shall have theretofore reviewed and approved (which approval shall not be unreasonably withheld or delayed) (a) the final recorded subdivision plat or plats approved by all appropriate governmental authorities pursuant to which such public roadways or other areas shall have been formally established, as may be required, (b) if applicable, all documents and agreements establishing the owners' association to which such areas shall be conveyed, and (c) the deed and all other documents pursuant to which such areas shall be conveyed; all of which must be reasonably acceptable in all respects to the Lender.

3. Release of Lien on Front Foot Assessments. Furthermore, provided that no Event of Default shall then exist hereunder or under any of the other Loan Documents, at the time of the release by the Lender of any Lot or Parcel within the Property in accordance with the terms of this Exhibit B, the Lender agrees to also release from the effect of its lien and security interest under the Deed of Trust and the other Loan Documents any interest that the Lender may have in and to the front benefit charges and assessments covering such released Lot or Parcel.

4. Effect of Partial Releases. Any release by the Lender of any part of the Property from the lien of the Deed of Trust shall not, in any manner, affect or impair the lien or priority of the Deed of Trust as to the remainder of the Property.

5. Payment of Additional Charges. In addition to any other charges payable by the Owner pursuant to the terms hereof, of the Deed of Trust or of any of the other Loan Documents, the Owner agrees, to the extent not prohibited by Law, to pay all governmental charges, and all of the Lender's fees and expenses, for any full or partial release of the Deed of Trust and any other security interests and liens securing the Loan, which charges, fees and expenses shall be payable at the time of such release.

EXHIBIT C

FINANCIAL COVENANTS

The Borrower hereby covenants and agrees to comply, and to cause each of the Guarantors to comply, with each and every one of the financial covenants hereinafter set forth, at the times and in the manner specified:

Required Net Worth. The Guarantors shall maintain at all times during the term of the Loan a combined minimum Net Worth in an aggregate amount equal to not less than $20,000,000, which shall be tested semi-annually as of June 30 and December 31 of each year. For the purposes hereof, the term "Net Worth" shall mean, at the time of determination, the excess of the tangible assets of the Guarantors over the Guarantors' liabilities, as reasonably determined by the Lender.

Exhibit 31.1a

Certification of Chief Executive Officer

Pursuant to

Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934

as Adopted Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Fai H. Chan, certify that:

I have reviewed this report on Form 10-Q of LiquidValue Development Inc.;

Based on my knowledge, this report 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 report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 11, 2020	By:	/s/ Fai H. Chan
		Fai H. Chan
		Co-Chief Executive Officer
		(Principal Executive Officer)

Exhibit 31.1b

Certification of Chief Executive Officer

Pursuant to

Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934

as Adopted Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Moe T. Chan, certify that:

I have reviewed this report on Form 10-Q of LiquidValue Development Inc.;

(a)

(b)

(c)

(d)

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 11, 2020	By:	/s/ Moe T. Chan
		Moe T. Chan
		Co-Chief Executive Officer
		(Principal Executive Officer)

Exhibit 31.2a

Certification of Chief Financial Officer

Pursuant to

Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934

as Adopted Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Rongguo (Ronald) Wei, certify that:

I have reviewed this report on Form 10-Q of LiquidValue Development Inc.;

(a)

(b)

(c)

(d)

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 11, 2020	By:	/s/ Rongguo (Ronald) Wei
		Rongguo (Ronald) Wei
		Co-Chief Financial Officer
		(Principal Financial Officer)

Exhibit 31.2b

Certification of Chief Financial Officer

Pursuant to

Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934

as Adopted Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Alan W. L. Lui, certify that:

I have reviewed this report on Form 10-Q of LiquidValue Development Inc.;

(a)

(b)

(c)

(d)

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 11, 2020	By:	/s/ Alan W. L. Lui
		Alan W. L. Lui
		Co-Chief Financial Officer
		(Principal Financial Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q of LiquidValue Development Inc. (the “Company”) for the three month period ended June 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officers, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that to the best of his or her knowledge:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: August 11, 2020	/s/ Fai H. Chan
	Fai H. Chan
	Co-Chief Executive Officer, Director
	(Principal Executive Officer)

Date: August 11, 2020	/s/ Moe T. Chan
	Moe T. Chan
	Co-Chief Executive Officer, Director
	(Principal Executive Officer)

Date: August 11, 2020	/s/ Rongguo (Ronald) Wei
	Rongguo (Ronald) Wei
	Co-Chief Financial Officer
	(Principal Financial Officer)

Date: August 11, 2020	/s/ Alan W. L. Lui
	Alan W. L. Lui
	Co-Chief Financial Officer
	(Principal Financial Officer)