Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 10, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | SG BLOCKS, INC. | |
Entity Central Index Key | 1,023,994 | |
Trading Symbol | SGBX | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,018 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 4,260,041 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 3,020,614 | $ 4,870,824 |
Short-term investment | 30,033 | |
Accounts receivable, net | 2,227,684 | 3,005,875 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 131,392 | 61,175 |
Prepaid expenses and other current assets | 236,326 | 183,890 |
Total current assets | 5,616,016 | 8,151,797 |
Equipment, net | 8,701 | 6,796 |
Goodwill | 4,162,173 | 4,162,173 |
Intangible assets, net | 2,733,615 | 3,028,247 |
Total Assets | 12,520,505 | 15,349,013 |
Current liabilities: | ||
Accounts payable and accrued expenses | 1,988,854 | 2,148,091 |
Billings in excess of costs and estimated earnings on uncompleted contracts | 825,468 | 1,673,048 |
Total current liabilities | 2,814,322 | 3,821,139 |
Commitments and Contingencies | ||
Stockholders' equity: | ||
Preferred stock, $1.00 par value, 5,405,010 shares authorized; 0 issued and outstanding as of June 30, 2018 and December 31, 2017 | ||
Common stock, $0.01 par value, 300,000,000 shares authorized; 4,260,041 issued and outstanding as of June 30, 2018 and December 31, 2017 | 42,601 | 42,601 |
Additional paid-in capital | 17,469,843 | 17,304,529 |
Accumulated deficit | (7,806,261) | (5,819,256) |
Total stockholders' equity | 9,706,183 | 11,527,874 |
Total Liabilities and Stockholders' Equity | $ 12,520,505 | $ 15,349,013 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 5,405,010 | 5,405,010 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 4,260,041 | 4,260,041 |
Common stock, shares outstanding | 4,260,041 | 4,260,041 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue: | ||||
Block sales | $ 42,799 | $ 42,799 | ||
Construction services | 2,262,998 | 1,001,734 | 3,806,526 | 1,606,327 |
Total | 2,305,797 | 1,001,734 | 3,849,325 | 1,606,327 |
Cost of revenue: | ||||
Block sales | 33,084 | 33,084 | ||
Construction services | 2,241,141 | 855,947 | 3,621,071 | 1,307,311 |
Total | 2,274,225 | 855,947 | 3,654,155 | 1,307,311 |
Gross profit | 31,572 | 145,787 | 195,170 | 299,016 |
Operating expenses: | ||||
Payroll and related expenses | 572,612 | 292,550 | 978,029 | 635,598 |
General and administrative expenses | 555,087 | 330,118 | 981,362 | 724,059 |
Marketing and business development expense | 97,541 | 37,618 | 178,588 | 66,186 |
Pre-project expenses | 45,000 | 7,508 | 49,964 | 16,647 |
Total | 1,270,240 | 667,794 | 2,187,943 | 1,442,490 |
Operating loss | (1,238,668) | (522,007) | (1,992,773) | (1,143,474) |
Other income (expense): | ||||
Interest expense | (165,194) | (330,388) | ||
Interest income | 4 | 4 | 8 | |
Other income | 5,764 | 5,764 | ||
Loss on debt conversion | (1,018,475) | (1,018,475) | ||
Change in fair value of financial instruments | 96,327 | |||
Total | 5,764 | (1,183,665) | 5,768 | (1,252,528) |
Net loss | $ (1,232,904) | $ (1,705,672) | $ (1,987,005) | $ (2,396,002) |
Net loss per share - basic and diluted: | ||||
Basic and diluted | $ (0.29) | $ (3.15) | $ (0.47) | $ (6.75) |
Weighted average shares outstanding: | ||||
Basic and diluted | 4,260,041 | 541,424 | 4,260,041 | 354,703 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - 6 months ended Jun. 30, 2018 - USD ($) | Total | $0.01 Par Value Common Stock | Preferred Stock | Additional Paid-in Capital | Accumulated Deficit |
Beginning Balance at Dec. 31, 2017 | $ 11,527,874 | $ 42,601 | $ 17,304,529 | $ (5,819,256) | |
Beginning Balance, Shares at Dec. 31, 2017 | 4,260,041 | ||||
Stock-based compensation | 165,314 | 165,314 | |||
Net loss | (1,987,005) | (1,987,005) | |||
Ending Balance at Jun. 30, 2018 | $ 9,706,183 | $ 42,601 | $ 17,469,843 | $ (7,806,261) | |
Ending Balance, Shares at Jun. 30, 2018 | 4,260,041 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (1,987,005) | $ (2,396,002) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expense | 1,879 | 1,379 |
Amortization of discount on convertible debentures | 330,388 | |
Amortization of intangible assets | 294,632 | 293,191 |
Interest income on short-term investment | (4) | (8) |
Loss on conversion of convertible debentures | 1,018,475 | |
Change in fair value of financial instruments | (96,327) | |
Stock-based compensation | 165,314 | 209,383 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 778,191 | 137,077 |
Costs and estimated earnings in excess of billings on uncompleted contracts | (70,217) | (224,800) |
Prepaid expenses and other current assets | (52,436) | (192,624) |
Inventory | 9,445 | |
Intangible assets | (28,820) | |
Accounts payable and accrued expenses | (159,237) | 378,123 |
Billings in excess of costs and estimated earnings on uncompleted contracts | (847,580) | 390,713 |
Deferred revenue | (72,788) | |
Net cash used in operating activities | (1,876,463) | (243,195) |
Cash flows from investing activities: | ||
Purchase of equipment | (3,784) | |
Proceeds from short-term investment | 30,037 | |
Net cash provided by investing activities | 26,253 | |
Cash flows from financing activities: | ||
Proceeds from public stock offering, net of offering costs | 6,826,558 | |
Payments on convertible debentures | (1,500,000) | |
Net cash provided by financing activities | 5,326,558 | |
Net increase (decrease) in cash and cash equivalents | (1,850,210) | 5,083,363 |
Cash and cash equivalents - beginning of period | 4,870,824 | 549,100 |
Cash and cash equivalents - end of period | 3,020,614 | 5,632,463 |
Supplemental disclosure of non-cash financing activities: | ||
Conversion of convertible debentures to common stock | 2,583,334 | |
Conversion of preferred stock to common stock | 1,801,670 | |
Offering costs not paid and included in accounts payable and accrued expenses | $ 715,173 |
Description of Business
Description of Business | 6 Months Ended |
Jun. 30, 2018 | |
Description of Business [Abstract] | |
Description of Business | 1. Description of Business SG Blocks, Inc. (the “Company”) provides two main products, both of which are used to meet the growing demand for safe and green commercial, industrial and residential building construction. The Company provides SG Blocks™, code engineered cargo shipping containers that the Company modifies for use in construction. Rather than consuming new steel and lumber, SG Blocks™ capitalize on the structural engineering and design parameters a shipping container must meet and repurposes them for use in building. These products offer the construction industry a safer, greener, faster, longer lasting and more economical alternative to conventional construction methods. The Company also provides purpose-built modules (“SGPBMs” and, together with SG Blocks™, “Modules”), which are prefabricated steel modular units created specifically for use in modular construction, unlike the shipping containers used to create SG Blocks™. The Company was previously known as CDSI Holdings, Inc. (a Delaware corporation incorporated on December 29, 1993). On November 4, 2011, the Company’s wholly-owned subsidiary was merged with and into SG Building Blocks, Inc. (“SG Building,” formerly SG Blocks Inc.) (the “Merger”), with SG Building surviving the Merger and becoming a wholly-owned subsidiary of the Company. The Merger was a reverse merger that was accounted for as a recapitalization of SG Building, as SG Building was the accounting acquirer. Accordingly, the historical financial statements presented are the financial statements of SG Building. Since the Company’s inception, it has generated revenues from construction and project management services related to the use and modification of Modules in construction. Through June 30, 2018, the Company has incurred an accumulated deficit of $7,806,261. At June 30, 2018, the Company had cash and cash equivalents of $3,020,614. As of June 30, 2018, the Company had 4,260,041 shares of common stock issued and outstanding. Reverse Stock Split On February 28, 2017, the Company effected a 1-for-3 reverse stock split of its then-outstanding common stock and preferred stock, which has since been converted. All share and per share amounts set forth in the consolidated financial statements of the Company have been retroactively restated to reflect the split as if it had occurred as of the earliest period presented. Public Offering of Common Stock On June 27, 2017, the Company completed a public offering of its common stock (the “Public Offering”). In connection with the Public Offering, the Company sold 1,500,000 shares of common stock at a public offering price of $5.00 per share, resulting in aggregate net proceeds of $6,826,558 after deducting underwriting discounts and commissions and related expenses of $673,442. On July 12, 2017, the underwriters of the Public Offering exercised their option to purchase an additional 225,000 shares of common stock, resulting in net proceeds of $1,046,250 after deducting underwriting discounts and commissions and related expenses of $78,750. In addition, the Company incurred additional expenses related to the offering in the amount of $813,195. In connection with the Public Offering and as compensation to the underwriters, the Company issued warrants to purchase an aggregate of 86,250 shares of the Company’s common stock, at an exercise price of $6.25 per share, to certain affiliates of the underwriters. See Note 9 for additional information regarding the underwriters’ warrants. The Company incurred a total of $1,565,386 in issuance costs in connection with the Public Offering. |
Emergence from Bankruptcy
Emergence from Bankruptcy | 6 Months Ended |
Jun. 30, 2018 | |
Emergence from Bankruptcy [Abstract] | |
Emergence from Bankruptcy | 2. Emergence from Bankruptcy On October 15, 2015, the Company and its subsidiaries voluntarily filed for reorganization under Chapter 11 of the Bankruptcy Code, in the United States Bankruptcy Court for the Southern District of New York. The Plan of Reorganization became effective on June 30, 2016, whereupon the Company emerged from bankruptcy and implemented the terms of such plan. The Company applied fresh start accounting as of June 30, 2016. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies Interim financial information – The condensed consolidated financial statements and notes should be read in conjunction with the financial statements and notes for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the Securities and Exchange Commission on March 1, 2018. Basis of consolidation – Recently adopted accounting pronouncements – In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASC 606”). ASC 606 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)” (“ASC 605”) and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted ASC 606 as of January 1, 2018. In accordance with ASC 606, the Company applied the modified retrospective method to those contracts which were not completed as of January 1, 2018. Under the modified retrospective method, the cumulative effect of applying the standard is recognized at the date of initial application. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC 605. In implementing ASC 606, the Company was required to recalculate the revenue earned on any work in process at the implementation date and to restate the revenue and cost of revenues as if ASC 606 had been followed from the inception of the contract. In recalculating costs and revenue under ASC 606 guidelines, no material difference in the account balances were identified. Since a material difference was not found, no retrospective analysis of account balance changes was required. See “Revenue recognition” below for further discussion regarding revenue from contracts with customers. Recently issued accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU No. 2016-02”). The update’s principal objective is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet. ASU 2016-02 continues to retain a distinction between finance and operating leases but requires lessees to recognize a right-of-use asset representing their right to use the underlying asset for the lease term and a corresponding lease liability on the balance sheet for all leases with terms greater than twelve months. The update is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted for financial statements that have not been previously issued. The Company is currently evaluating the effects of ASU 2016-02 on the consolidated financial statements. Based on the current evaluation, the Company does not expect that ASU No. 2016-02 will have a material impact on the Company’s financial statements. In June 2018, the FASB issued ASU No. 2018-07, “Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting” (“ASU 2018-07”), which expands the scope of Topic 718 to include all share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 specifies that Topic 718 applies to all share-based payment transactions in which the grantor acquires goods and services to be used or consumed in its own operations by issuing share-based payment awards. ASU 2018-07 also clarifies that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC 606. ASU 2018-07 is effective for the Company beginning December 1, 2019, with early adoption permitted, but no earlier than our adoption of ASC 606. The Company is currently evaluating the potential impact of adopting this guidance on our consolidated financial statements. Accounting estimates Operating cycle – Revenue recognition ASU 2014-09, “Revenue from Contracts with Customers” outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-09 outlines a five-step process for revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards, and also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Major provisions include determining which goods and services are distinct and represent separate performance obligations, how variable consideration (which may include change orders and claims) is recognized, whether revenue should be recognized at a point in time or over time and ensuring the time value of money is considered in the transaction price. ASU 2016-08, “Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” clarifies the principal versus agent guidance in ASU 2014-09. ASU 2016-08 clarifies how an entity determines whether to report revenue gross or net based on whether it controls a specific good or service before it is transferred to a customer. ASU 2016-08 also reframes the indicators to focus on evidence that an entity is acting as a principal rather than as an agent. ASU 2016-10, “Identifying Performance Obligations and Licensing” amends certain aspects of ASU 2014-09. ASU 2016-10 amends how an entity should identify performance obligations for immaterial promised goods or services, shipping and handling activities and promises that may represent performance obligations. ASU 2016-10 also provides implementation guidance for determining the nature of licensing and royalties arrangements. ASU 2016-12, “Narrow-Scope Improvements and Practical Expedients” also clarifies certain aspects of ASU 2014-09, including the assessment of collectability, presentation of sales taxes, treatment of noncash consideration and accounting for completed contracts and contract modifications at transition. ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers” allows an entity to determine the provision for loss contracts at either the contract level or the performance obligation level as an accounting policy election. The Company determines its provision for loss contracts at the contract level. ASU 2017-05, “Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets” clarifies that the scope and application of ASC 610-20 on accounting for the sale or transfer of nonfinancial assets and in substance nonfinancial assets to noncustomers, including partial sales, applies only when the asset (or asset group) does not meet the definition of a business. ASU 2017-13, “Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments” provides guidance related to the effective dates of the ASUs noted above. The adoption of ASC 606 represents a change in accounting principle that aligns revenue recognition with the timing of when promised goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To achieve this core principle, the Company applies the following five steps in accordance with ASC 606: (1) Identify the contract with a customer (2) Identify the performance obligations in the contract (3) Determine the transaction price (4) Allocate the transaction price to performance obligations in the contract (5) Recognize revenue as performance obligations are satisfied The new revenue recognition standard requires the Company to determine, at contract inception, whether it will transfer control of a promised good or service over time or at a point in time—regardless of the length of contract or other factors. The Company now applies recognition of revenue over time, which is similar to the method the Company applied under previous guidance (i.e., percentage of completion). Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress toward complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. For the six months ended June 30, 2018 and 2017, there were no changes in total estimated costs that had a significant impact to our operating results. In addition, for the six months ended June 30, 2018 and 2017, there were no significant losses recognized. Remaining Unsatisfied Performance Obligations The Company’s remaining unsatisfied performance obligations (“RUPO”) as of June 30, 2018 represent the remaining transaction price of firm contracts for which work has not been performed and excludes unexercised contract options. As of June 30, 2018, the aggregate amount of the transaction price allocated to remaining unsatisfied performance obligations was $102,871,255. The Company expects to satisfy its RUPO as of June 30, 2018 over the following period: Within 1 year $ 29,637,487 1 to 2 years 63,794,582 Thereafter 9,439,186 Total Remaining Unsatisfied Performance Obligations $ 102,871,255 Although RUPO reflects business that is considered to be firm, cancellations, deferrals or scope adjustments may occur. RUPO is adjusted to reflect any known project cancellations, revisions to project scope and cost, foreign currency exchange fluctuations and project deferrals, as appropriate. Disaggregation of Revenues The Company’s revenues are principally derived from construction and engineering contracts related to Modules. Our contracts are with many different customers in numerous industries. The following tables provide further disaggregation of the Company’s revenues by categories: Three Months Ended June 30, Revenue by Customer Type 2018 2017 (1) Multi-Family $ 210,814 9 % $ - - Office 229,727 10 % 602,877 60 % Retail 416,976 18 % 33,055 3 % School 1,100,403 48 % 350,576 35 % Special Use 330,965 14 % 6,624 1 % Other 16,912 1 % 8,602 1 % Total revenue by customer type $ 2,305,797 100 % $ 1,001,734 100 % Six Months Ended June 30, Revenue by Customer Type 2018 2017 (1) Multi-Family $ 210,814 5 % $ - - Office 593,356 15 % 973,281 61 % Retail 531,920 14 % 220,464 14 % School 1,860,238 48 % 367,716 23 % Special Use 636,085 17 % 7,049 - % Other 16,912 1 % 37,817 2 % Total revenue by customer type $ 3,849,325 100 % $ 1,606,327 100 % (1) Prior period amounts have not been adjusted for the adoption of ASC 606 under the modified retrospective method. Contract Assets and Contract Liabilities Accounts receivable are recognized in the period when the Company’s right to consideration is unconditional. Accounts receivable are recognized net of an allowance for doubtful accounts. A considerable amount of judgment is required in assessing the likelihood of realization of receivables. The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets include unbilled amounts from our long-term construction services when revenue recognized under the cost-to-cost measure of progress exceeds the amounts invoiced to customers, as the amounts cannot be billed under the terms of our contracts. Such amounts are recoverable from customers based upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of a contract. Contract assets are generally classified as current within the condensed consolidated balance sheets and labeled as “costs and estimated earnings in excess of billings on uncompleted contracts”. Contract liabilities from construction and engineering contracts occur when amounts invoiced to our customers exceed revenues recognized under the cost-to-cost measure of progress. Contract liabilities additionally include advanced payments from our customers on certain contracts. Contract liabilities decrease as the Company recognizes revenue from the satisfaction of the related performance obligation. Contract liabilities are generally classified as current within the condensed consolidated balance sheet and labeled as “billing in excess of costs and estimated earnings on uncompleted contracts”. Although the Company has established adequate procedures for estimating costs to complete on open contracts, it is at least reasonably possible that additional significant costs could occur on contracts prior to completion. The Company periodically evaluates and revises its estimates and makes adjustments when they are considered necessary. Impact of the Adoption of ASC 606 on Financial Statements Prior to implementing ASC 606 on January 1, 2018, the Company’s methods for recognizing revenue were very similar to the current method under ASC 606. The actual cost as a percent of total expected cost at completion was used to estimate the percentage complete on fixed price jobs. Furthermore, the process for allocating transaction price to performance obligations is also substantially similar to prior years. As a result, no material modifications were made to our revenue recognition. Cash and cash equivalents Short-term investment Accounts receivable Goodwill – Intangible assets – For the year ending December 31,: 2018 $ 294,632 2019 144,064 2020 144,064 2021 144,064 2022 139,741 Thereafter 1,867,050 Total estimated amortization expense $ 2,733,615 Fair value measurements – The Company measures the fair value of financial assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The Company uses three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Quoted prices for similar assets and liabilities in active markets or inputs that are observable. Level 3 Inputs that are unobservable (for example, cash flow modeling inputs based on assumptions). Financial assets and liabilities measured at fair value on a recurring basis are summarized below: Short-term investment: The Company had $30,033 in short-term investments as of December 31, 2017, which were classified within Level 2 of the valuation hierarchy. During the six months ended June 30, 2018, the investments were redeemed, and the proceeds are included in the cash balance at June 30, 2018. Conversion option liabilities: The conversion option liabilities are measured at fair value using the Black-Scholes model and are classified within Level 3 of the valuation hierarchy. For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company’s Chief Financial Officer, who reports to the Chief Executive Officer, determines the Company’s valuation policies and procedures. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s Chief Financial Officer and are approved by the Chief Executive Officer. The Company had no conversion option liabilities outstanding at June 30, 2018. The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities for the six months ended June 30, 2017 that are measured at fair value on a recurring basis: Six Months Ended Beginning balance $ 384,461 Aggregate fair value of conversion option liabilities issued - Change in fair value related to conversion of convertible debentures (288,134 ) Change in fair value of conversion option liabilities and warrants (96,327 ) Ending balance $ - The Company presented the conversion option liabilities at fair value on its condensed consolidated balance sheets, with the corresponding changes in fair value recorded in the Company’s condensed consolidated statements of operations for the applicable reporting periods. The calculation of the Black-Scholes model involved the use of the fair value of the Company’s common stock, estimated term, volatility, risk-free interest rates and dividend yield (if applicable). The Company developed the assumptions that were used as follows: the fair value of the Company’s common stock was obtained from the terms of the recapitalization of the Company, including the Exit Facility (defined below), which occurred concurrent with the Company’s emergence from bankruptcy protection, as well as publicly traded market prices of the Company’s common stock. The term represented the remaining contractual term of the derivative; the volatility rate was developed based on analysis of the Company’s historical stock price volatility and the historical volatility rates of several other similarly situated companies (using a number of observations that was at least equal to or exceeded the number of observations in the life of the derivative financial instrument at issue); the risk free interest rates were obtained from publicly available United States Treasury yield curve rates; and the dividend yield was zero because the Company has not paid dividends and does not expect to pay dividends in the foreseeable future. Share-based payments Income taxes – The calculation of tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for anticipated tax audit issues based on the Company’s estimate of whether, and the extent to which, additional taxes will be due. If payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when the liabilities are no longer determined to be necessary. If the estimate of tax liabilities proves to be less than the ultimate assessment, a further charge to expense would result. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. A valuation allowance for such tax assets and loss carryforwards is provided when it is determined to be more likely than not that the benefit of such deferred tax asset will not be realized in future periods. If it becomes more likely than not that a tax asset will be used, the related valuation allowance on such assets would be reduced. Impact from the Tax Cuts and Jobs Act The Tax Cuts and Jobs Act (the “TCJA”) was enacted in the United States on December 22, 2017. The TCJA lowered the corporate tax rate from 35.0% to 21.0% and imposed a one-time transition tax on unremitted earnings as of the end of 2017, and featured many other tax law provisions. The Securities and Exchange Commission issued Staff Accounting Bulletin No. 118, “ Income Tax Accounting Implications of the Tax Cuts and Jobs Act In accordance with SAB 118, the Company recognized the income tax effects of the TCJA in its consolidated financial statements for the year ended December 31, 2017. During the three and six months ended June 30, 2018, the Company did not have any provisional tax expense for foreign withholding taxes associated with the TCJA. The Company expects to finalize any provisional amounts associated with the TCJA over the next six months based on ongoing assessment of its tax positions and other relevant data. Concentrations of credit risk – With respect to receivables, concentrations of credit risk are limited to a few customers in the construction industry. The Company performs ongoing credit evaluations of its customers’ financial condition and, generally, requires no collateral from its customers other than normal lien rights. At June 30, 2018 and December 31, 2017, 69% and 81%, respectively, of the Company’s accounts receivable were due from two customers. Revenue relating to two customers represented approximately 48% and 12%, respectively, of the Company’s total revenue for the three months ended June 30, 2018. Revenue relating to three customers represented approximately 38%, 35% and 22%, respectively, of the Company’s total revenue for the three months ended June 30, 2017. Revenue relating to one customer represented approximately 48% of the Company’s total revenue for the six months ended June 30, 2018. Revenue relating to three customers represented approximately 47%, 18% and 13%, respectively, of the Company’s total revenue for the six months ended June 30, 2017. Cost of revenue relating to two vendors represented approximately 73% and 81%, respectively, of the Company’s total cost of revenue for the three months ended June 30, 2018 and 2017. Cost of revenue relating to one and two vendors represented approximately 60% and 76%, respectively, of the Company’s total cost of revenue for the six months ended June 30, 2018 and 2017. The Company believes it has access to alternative suppliers, with limited disruption to the business, should circumstances change with its existing suppliers. |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Jun. 30, 2018 | |
Accounts Receivable [Abstract] | |
Accounts Receivable | 4. Accounts Receivable At June 30, 2018 and December 31, 2017, the Company’s accounts receivable consisted of the following: June 30, December 31, 2017 Billed: Block sales $ - $ 14,038 Construction services 1,717,590 2,652,496 Retainage receivable 524,998 373,576 Total gross receivables 2,242,588 3,040,110 Less: allowance for doubtful accounts (14,904 ) (34,235 ) Total net receivables $ 2,227,684 $ 3,005,875 |
Costs and Estimated Earnings on
Costs and Estimated Earnings on Uncompleted Contracts | 6 Months Ended |
Jun. 30, 2018 | |
Costs and Estimated Earnings on Uncompleted Contracts [Abstract] | |
Costs and Estimated Earnings on Uncompleted Contracts | 5. Costs and Estimated Earnings on Uncompleted Contracts Costs and estimated earnings on uncompleted contracts consisted of the following at June 30, 2018 and December 31, 2017: June 30, December 31, 2017 Costs incurred on uncompleted contracts $ 7,267,669 $ 3,681,965 Estimated earnings to date on uncompleted contracts 494,749 328,273 Gross contract assets (liabilities) 7,762,418 4,010,238 Less: billings to date (8,456,494 ) (5,622,111 ) Net contract assets (liabilities) $ (694,076 ) $ (1,611,873 ) The above amounts are included in the accompanying condensed consolidated balance sheets under the following captions at June 30, 2018 and December 31, 2017. June 30, December 31, Costs and estimated earnings in excess of billings on uncompleted contracts $ 131,392 $ 61,175 Billings in excess of cost and estimated earnings on uncompleted contracts (825,468 ) (1,673,048 ) Net contract assets (liabilities) $ (694,076 ) $ (1,611,873 ) |
Convertible Debentures
Convertible Debentures | 6 Months Ended |
Jun. 30, 2018 | |
Convertible Debentures [Abstract] | |
Convertible Debentures | 6. Convertible Debentures On June 30, 2016, and pursuant to the terms of the Company’s plan of reorganization, the Company entered into a Securities Purchase Agreement, dated June 30, 2016, with Hillair Capital Investments L.P. (“HCI”), pursuant to which the Company sold, for a subscription price of $2,000,000, a 12% Original Issue Discount Senior Secured Convertible Debenture to HCI in the principal amount of $2,500,000, with a maturity date of June 30, 2018 (the “Exit Facility”). The Exit Facility was convertible at HCI’s option at any time, in whole or in part, into shares of the Company’s common stock at a ratio of 1 share for every $3.75 of debt. On November 17, 2016, the Company entered into a Securities Purchase Agreement with HCI, pursuant to which the Company sold, for a subscription price of $750,000, a 12% Original Issue Discount Senior Secured Convertible Debenture to HCI in the amount of $937,500, with a maturity date of June 30, 2018 (the “November 2016 Debenture” and, together with the Exit Facility, the “2016 Debentures”). The November 2016 Debenture was convertible at HCI’s option at any time, in whole or in part, into shares of the Company’s common stock at a ratio of 1 share for every $3.75 of debt. In connection with the Public Offering, HCI converted approximately $1,937,500 of the 2016 Debentures into 516,667 shares of common stock. The Company recorded a loss of $1,018,475 on the conversion of the 2016 Debentures. The Company repaid the remaining outstanding balance of approximately $1,500,000 using proceedings from the Public Offering. For the three months ended June 30, 2018 and 2017, total amortization related to the discount amounted to $0 and $165,194, respectively. For the six months ended June 30, 2018 and 2017, total amortization relating to the discount amounted to $0 and $330,388, respectively, and is included in interest expense on the accompanying consolidated statements of operations. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 6 Months Ended |
Jun. 30, 2018 | |
Net Income (Loss) Per Share [Abstract] | |
Net Income (Loss) Per Share | 7. Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares consist of the common shares issuable upon the exercise of stock options and warrants. Potentially dilutive common shares are excluded from the calculation if their effect is antidilutive. At June 30, 2018, there were options, including options to non-employees and non-directors, and warrants to purchase 1,188,392 and 86,250 shares of common stock, respectively, outstanding that could potentially dilute future net income (loss) per share. Because the Company had a net loss as of June 30, 2018, it is prohibited from including potential common shares in the computation of diluted per share amounts. Accordingly, the Company has used the same number of shares outstanding to calculate both the basic and diluted loss per share. For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Net (loss) attributable to SG Blocks $ (1,232,904 ) $ (1,705,672 ) $ (1,987,005 ) $ (2,396,002 ) Net loss per share - basic and diluted: Basic and diluted $ (.29 ) $ (3.15 ) $ (.47 ) $ (6.75 ) Weighted average shares outstanding: Basic and diluted 4,260,041 541,424 4,260,041 354,703 |
Stock Options and Grants
Stock Options and Grants | 6 Months Ended |
Jun. 30, 2018 | |
Stock Options and Grants [Abstract] | |
Stock Options and Grants | 8. Stock Options and Grants A summary of stock option activity as of June 30, 2018 and changes during the six months then ended are presented below. The table includes options granted to employees and directors of the Company and does not include 50,000 options granted to a consultant during 2017: Shares Weighted Weighted Weighted Aggregate Outstanding – December 31, 2017 888,392 $ 1.23 $ 3.86 9.15 $ 1,881,869 Granted 250,000 1.28 4.61 - - Exercised - - - - - Cancelled - - - - - Outstanding – June 30, 2018 1,138,392 $ 1.24 $ 4.03 8.90 $ 1,439,731 Exercisable – December 31, 2017 738,608 $ 1.22 $ 4.04 9.19 $ 1,435,515 Exercisable – June 30, 2018 838,549 $ 1.23 $ 4.02 8.75 $ 1,095,371 For the three months ended June 30, 2018 and 2017, the Company recognized stock-based compensation expense of $85,325 and $55,000, respectively. For the six months ended June 30, 2018 and 2017, the Company recognized stock-based compensation expense of $165,314 and $209,383, respectively. This expense is included in payroll and related expenses in the accompanying condensed consolidated statements of operations. As of June 30, 2018, the Company had $363,259 of total unrecognized compensation costs related to non-vested stock options, which will be expensed over a weighted average period of 1.44 years. The intrinsic value is calculated as the difference between the fair value of the stock price at June 30, 2018 and the exercise price of each of the outstanding stock options. The fair value of the stock price at June 30, 2018 was $5.20 per share, based on the closing price of the Company’s stock as of June 29, 2018. |
Warrants
Warrants | 6 Months Ended |
Jun. 30, 2018 | |
Warrants [Abstract] | |
Warrants | 9. Warrants In conjunction with the Public Offering, the Company issued to certain affiliates of the underwriters, as compensation, warrants to purchase an aggregate of 86,250 shares of common stock at an exercise price of $6.25 per share. The warrants are exercisable at the option of the holder on or after June 21, 2018 and expire June 21, 2023. The fair value of warrants was calculated utilizing a Black-Scholes model and amounted to $63,796. The fair market value of the warrants as of the date of issuance has been included in issuance costs in additional paid-in capital. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2018 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | 10. Stockholders’ Equity Public Offering – In July 2017, as permitted by the underwriting agreement entered into in connection with the Public Offering, the underwriters exercised their option to purchase an additional 225,000 shares of common stock at $5.00 per share. The Company incurred $176,771 in issuance costs from this issuance. In connection with this exercise, certain affiliates of the underwriters were granted additional warrants to purchase 11,250 shares of common stock in the aggregate valued at $8,321. In connection with and prior to the Public Offering, the Company issued 1,801,670 shares of its common stock upon conversion of all outstanding preferred stock. Also in connection with the Public Offering, the Company issued a total of 516,667 shares of its common stock upon conversion of an aggregate amount of $1,937,500 of the 2016 Debentures. The fair market value of the shares at the time of conversion was $2,583,334. The Company recognized a loss of $645,833, which is included in the overall loss on conversion of convertible debentures of $1,018,475 at December 31, 2017. |
Construction Backlog
Construction Backlog | 6 Months Ended |
Jun. 30, 2018 | |
Construction Backlog [Abstract] | |
Construction Backlog | 11. Construction Backlog The following represents the backlog of signed construction and engineering contracts in existence at June 30, 2018 and December 31, 2017, which represents the amount of revenue the Company expects to realize from work to be performed on uncompleted contracts in progress and from contractual agreements in effect at June 30, 2018 and December 31, 2017, respectively, on which work has not yet begun: June 30, December 31, Balance – beginning of period $ 76,659,029 $ 541,291 New contracts and change orders during the period 30,061,551 81,179,323 Subtotal 106,720,580 81,720,614 Less: contract revenue earned during the period (3,849,325 ) (5,061,585 ) Balance – end of period $ 102,871,255 $ 76,659,029 Backlog at June 30, 2018 includes two large contracts entered into by the Company during the third quarter of 2017 and one during the first quarter of 2018 in the amounts of approximately $55 million, $15 million and $27 million, respectively. The Company expects that all of this revenue will be realized by December 31, 2020. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 12. Subsequent Events. On July 24, 2018, the Compensation Committee approved an increase in annual base salary for Mr. Galvin and Mr. Shetty to $370,000 and $300,000, respectively, effective as of January 1, 2018. The Company has recognized the increase in base salaries as additional payroll and related expenses as reflected in the financial statements for the quarterly period ended June 30, 2018. On July 26, 2018, based on the recommendation of the Compensation Committee of the Company’s Board of Directors (the “Board”), the full Board approved the adoption of a non-employee director compensation plan, pursuant to which the Company’s non-employee directors are to receive total annual compensation of $60,000 per year, consisting of (1) a $30,000 cash component and (2) a $30,000 equity component, which will be granted each year in conjunction with the Company’s annual meeting of stockholders. The cash component is payable quarterly in advance and, beginning in the 2019 calendar year, each non-employee director may elect to receive the $30,000 in the form of RSUs, in either a $15,000 or $30,000 increment. In addition, the chairs of the audit committee and compensation committee and the lead independent director will receive an additional annual cash retainer in the amounts of $10,000, $7,500 and $10,000, respectively. In the event the Board forms a nominating and corporate governance committee, the chair of such committee will receive an annual cash retainer in the amount of $5,000. The cash component of the non-employee director compensation plan, including the additional retainers, is effective as of January 1, 2018. The Company has recognized the cash component of the non-employee director compensation plan as additional general and administrative expenses as reflected in the financial statements for the quarterly period ended June 30, 2018. On July 26, 2018, pursuant to the equity component of the plan, the Company awarded 5,591 RSUs to each of the Company’s five non-employee directors serving as a director immediately after the Company’s 2018 annual meeting of stockholders held on June 1, 2018. These RSUs will vest on the earlier of July 26, 2019 or the date of the Company’s 2019 annual stockholder meeting, subject to accelerated vesting in the event of death or disability, and shall be payable six months after termination from the Board or death or disability. On August 2, 2018, Sean M. McAvoy notified the Company of his resignation from the Board, effective immediately. There was no disagreement between Mr. McAvoy and the Company on any matter relating to the Company’s operations, policies or practices. On August 10, 2018, the Company filed a registration statement on Form S-3 with the Securities and Exchange Commission, registering 622,726 shares of the Company’s common stock for resale by HCI; Mr. McAvoy is affiliated with HCI due to his role as the manager of Hillair Capital Management LLC, the investment adviser of HCI. The Company filed the registration statement to comply with certain registration obligations under the Certificate of Designation of Preferences, Rights and Limitations of the Series A Convertible Preferred Stock of SG Blocks, Inc., the Securities Purchase Agreement, dated June 30, 2016, between the Company and HCI and the Securities Purchase Agreement, dated November 17, 2016, between the Company and HCI. The registration statement is currently under review by the Securities and Exchange Commission. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Interim financial information | Interim financial information – The condensed consolidated financial statements and notes should be read in conjunction with the financial statements and notes for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the Securities and Exchange Commission on March 1, 2018. |
Basis of consolidation | Basis of consolidation – |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements – In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASC 606”). ASC 606 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)” (“ASC 605”) and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted ASC 606 as of January 1, 2018. In accordance with ASC 606, the Company applied the modified retrospective method to those contracts which were not completed as of January 1, 2018. Under the modified retrospective method, the cumulative effect of applying the standard is recognized at the date of initial application. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC 605. In implementing ASC 606, the Company was required to recalculate the revenue earned on any work in process at the implementation date and to restate the revenue and cost of revenues as if ASC 606 had been followed from the inception of the contract. In recalculating costs and revenue under ASC 606 guidelines, no material difference in the account balances were identified. Since a material difference was not found, no retrospective analysis of account balance changes was required. See “Revenue recognition” below for further discussion regarding revenue from contracts with customers. Recently issued accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU No. 2016-02”). The update’s principal objective is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet. ASU 2016-02 continues to retain a distinction between finance and operating leases but requires lessees to recognize a right-of-use asset representing their right to use the underlying asset for the lease term and a corresponding lease liability on the balance sheet for all leases with terms greater than twelve months. The update is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted for financial statements that have not been previously issued. The Company is currently evaluating the effects of ASU 2016-02 on the consolidated financial statements. Based on the current evaluation, the Company does not expect that ASU No. 2016-02 will have a material impact on the Company’s financial statements. In June 2018, the FASB issued ASU No. 2018-07, “Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting” (“ASU 2018-07”), which expands the scope of Topic 718 to include all share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 specifies that Topic 718 applies to all share-based payment transactions in which the grantor acquires goods and services to be used or consumed in its own operations by issuing share-based payment awards. ASU 2018-07 also clarifies that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC 606. ASU 2018-07 is effective for the Company beginning December 1, 2019, with early adoption permitted, but no earlier than our adoption of ASC 606. The Company is currently evaluating the potential impact of adopting this guidance on our consolidated financial statements. |
Accounting estimates | Accounting estimates |
Operating cycle | Operating cycle – |
Revenue recognition | Revenue recognition ASU 2014-09, “Revenue from Contracts with Customers” outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-09 outlines a five-step process for revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards, and also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Major provisions include determining which goods and services are distinct and represent separate performance obligations, how variable consideration (which may include change orders and claims) is recognized, whether revenue should be recognized at a point in time or over time and ensuring the time value of money is considered in the transaction price. ASU 2016-08, “Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” clarifies the principal versus agent guidance in ASU 2014-09. ASU 2016-08 clarifies how an entity determines whether to report revenue gross or net based on whether it controls a specific good or service before it is transferred to a customer. ASU 2016-08 also reframes the indicators to focus on evidence that an entity is acting as a principal rather than as an agent. ASU 2016-10, “Identifying Performance Obligations and Licensing” amends certain aspects of ASU 2014-09. ASU 2016-10 amends how an entity should identify performance obligations for immaterial promised goods or services, shipping and handling activities and promises that may represent performance obligations. ASU 2016-10 also provides implementation guidance for determining the nature of licensing and royalties arrangements. ASU 2016-12, “Narrow-Scope Improvements and Practical Expedients” also clarifies certain aspects of ASU 2014-09, including the assessment of collectability, presentation of sales taxes, treatment of noncash consideration and accounting for completed contracts and contract modifications at transition. ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers” allows an entity to determine the provision for loss contracts at either the contract level or the performance obligation level as an accounting policy election. The Company determines its provision for loss contracts at the contract level. ASU 2017-05, “Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets” clarifies that the scope and application of ASC 610-20 on accounting for the sale or transfer of nonfinancial assets and in substance nonfinancial assets to noncustomers, including partial sales, applies only when the asset (or asset group) does not meet the definition of a business. ASU 2017-13, “Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments” provides guidance related to the effective dates of the ASUs noted above. The adoption of ASC 606 represents a change in accounting principle that aligns revenue recognition with the timing of when promised goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To achieve this core principle, the Company applies the following five steps in accordance with ASC 606: (1) Identify the contract with a customer (2) Identify the performance obligations in the contract (3) Determine the transaction price (4) Allocate the transaction price to performance obligations in the contract (5) Recognize revenue as performance obligations are satisfied The new revenue recognition standard requires the Company to determine, at contract inception, whether it will transfer control of a promised good or service over time or at a point in time—regardless of the length of contract or other factors. The Company now applies recognition of revenue over time, which is similar to the method the Company applied under previous guidance (i.e., percentage of completion). Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress toward complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. For the six months ended June 30, 2018 and 2017, there were no changes in total estimated costs that had a significant impact to our operating results. In addition, for the six months ended June 30, 2018 and 2017, there were no significant losses recognized. Remaining Unsatisfied Performance Obligations The Company’s remaining unsatisfied performance obligations (“RUPO”) as of June 30, 2018 represent the remaining transaction price of firm contracts for which work has not been performed and excludes unexercised contract options. As of June 30, 2018, the aggregate amount of the transaction price allocated to remaining unsatisfied performance obligations was $102,871,255. The Company expects to satisfy its RUPO as of June 30, 2018 over the following period: Within 1 year $ 29,637,487 1 to 2 years 63,794,582 Thereafter 9,439,186 Total Remaining Unsatisfied Performance Obligations $ 102,871,255 Although RUPO reflects business that is considered to be firm, cancellations, deferrals or scope adjustments may occur. RUPO is adjusted to reflect any known project cancellations, revisions to project scope and cost, foreign currency exchange fluctuations and project deferrals, as appropriate. Disaggregation of Revenues The Company’s revenues are principally derived from construction and engineering contracts related to Modules. Our contracts are with many different customers in numerous industries. The following tables provide further disaggregation of the Company’s revenues by categories: Three Months Ended June 30, Revenue by Customer Type 2018 2017 (1) Multi-Family $ 210,814 9 % $ - - Office 229,727 10 % 602,877 60 % Retail 416,976 18 % 33,055 3 % School 1,100,403 48 % 350,576 35 % Special Use 330,965 14 % 6,624 1 % Other 16,912 1 % 8,602 1 % Total revenue by customer type $ 2,305,797 100 % $ 1,001,734 100 % Six Months Ended June 30, Revenue by Customer Type 2018 2017 (1) Multi-Family $ 210,814 5 % $ - - Office 593,356 15 % 973,281 61 % Retail 531,920 14 % 220,464 14 % School 1,860,238 48 % 367,716 23 % Special Use 636,085 17 % 7,049 - % Other 16,912 1 % 37,817 2 % Total revenue by customer type $ 3,849,325 100 % $ 1,606,327 100 % (1) Prior period amounts have not been adjusted for the adoption of ASC 606 under the modified retrospective method. Contract Assets and Contract Liabilities Accounts receivable are recognized in the period when the Company’s right to consideration is unconditional. Accounts receivable are recognized net of an allowance for doubtful accounts. A considerable amount of judgment is required in assessing the likelihood of realization of receivables. The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets include unbilled amounts from our long-term construction services when revenue recognized under the cost-to-cost measure of progress exceeds the amounts invoiced to customers, as the amounts cannot be billed under the terms of our contracts. Such amounts are recoverable from customers based upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of a contract. Contract assets are generally classified as current within the condensed consolidated balance sheets and labeled as “costs and estimated earnings in excess of billings on uncompleted contracts”. Contract liabilities from construction and engineering contracts occur when amounts invoiced to our customers exceed revenues recognized under the cost-to-cost measure of progress. Contract liabilities additionally include advanced payments from our customers on certain contracts. Contract liabilities decrease as the Company recognizes revenue from the satisfaction of the related performance obligation. Contract liabilities are generally classified as current within the condensed consolidated balance sheet and labeled as “billing in excess of costs and estimated earnings on uncompleted contracts”. Although the Company has established adequate procedures for estimating costs to complete on open contracts, it is at least reasonably possible that additional significant costs could occur on contracts prior to completion. The Company periodically evaluates and revises its estimates and makes adjustments when they are considered necessary. Impact of the Adoption of ASC 606 on Financial Statements Prior to implementing ASC 606 on January 1, 2018, the Company’s methods for recognizing revenue were very similar to the current method under ASC 606. The actual cost as a percent of total expected cost at completion was used to estimate the percentage complete on fixed price jobs. Furthermore, the process for allocating transaction price to performance obligations is also substantially similar to prior years. As a result, no material modifications were made to our revenue recognition. |
Cash and cash equivalents | Cash and cash equivalents |
Short-term investment | Short-term investment |
Accounts receivable | Accounts receivable |
Goodwill | Goodwill – |
Intangible assets | Intangible assets – For the year ending December 31,: 2018 $ 294,632 2019 144,064 2020 144,064 2021 144,064 2022 139,741 Thereafter 1,867,050 Total estimated amortization expense $ 2,733,615 |
Fair value measurements | Fair value measurements – The Company measures the fair value of financial assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The Company uses three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Quoted prices for similar assets and liabilities in active markets or inputs that are observable. Level 3 Inputs that are unobservable (for example, cash flow modeling inputs based on assumptions). Financial assets and liabilities measured at fair value on a recurring basis are summarized below: Short-term investment: The Company had $30,033 in short-term investments as of December 31, 2017, which were classified within Level 2 of the valuation hierarchy. During the six months ended June 30, 2018, the investments were redeemed, and the proceeds are included in the cash balance at June 30, 2018. Conversion option liabilities: The conversion option liabilities are measured at fair value using the Black-Scholes model and are classified within Level 3 of the valuation hierarchy. For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company’s Chief Financial Officer, who reports to the Chief Executive Officer, determines the Company’s valuation policies and procedures. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s Chief Financial Officer and are approved by the Chief Executive Officer. The Company had no conversion option liabilities outstanding at June 30, 2018. The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities for the six months ended June 30, 2017 that are measured at fair value on a recurring basis: Six Months Ended Beginning balance $ 384,461 Aggregate fair value of conversion option liabilities issued - Change in fair value related to conversion of convertible debentures (288,134 ) Change in fair value of conversion option liabilities and warrants (96,327 ) Ending balance $ - The Company presented the conversion option liabilities at fair value on its condensed consolidated balance sheets, with the corresponding changes in fair value recorded in the Company’s condensed consolidated statements of operations for the applicable reporting periods. The calculation of the Black-Scholes model involved the use of the fair value of the Company’s common stock, estimated term, volatility, risk-free interest rates and dividend yield (if applicable). The Company developed the assumptions that were used as follows: the fair value of the Company’s common stock was obtained from the terms of the recapitalization of the Company, including the Exit Facility (defined below), which occurred concurrent with the Company’s emergence from bankruptcy protection, as well as publicly traded market prices of the Company’s common stock. The term represented the remaining contractual term of the derivative; the volatility rate was developed based on analysis of the Company’s historical stock price volatility and the historical volatility rates of several other similarly situated companies (using a number of observations that was at least equal to or exceeded the number of observations in the life of the derivative financial instrument at issue); the risk free interest rates were obtained from publicly available United States Treasury yield curve rates; and the dividend yield was zero because the Company has not paid dividends and does not expect to pay dividends in the foreseeable future. |
Share-based payments | Share-based payments |
Income taxes | Income taxes – The calculation of tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for anticipated tax audit issues based on the Company’s estimate of whether, and the extent to which, additional taxes will be due. If payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when the liabilities are no longer determined to be necessary. If the estimate of tax liabilities proves to be less than the ultimate assessment, a further charge to expense would result. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. A valuation allowance for such tax assets and loss carryforwards is provided when it is determined to be more likely than not that the benefit of such deferred tax asset will not be realized in future periods. If it becomes more likely than not that a tax asset will be used, the related valuation allowance on such assets would be reduced. Impact from the Tax Cuts and Jobs Act The Tax Cuts and Jobs Act (the “TCJA”) was enacted in the United States on December 22, 2017. The TCJA lowered the corporate tax rate from 35.0% to 21.0% and imposed a one-time transition tax on unremitted earnings as of the end of 2017, and featured many other tax law provisions. The Securities and Exchange Commission issued Staff Accounting Bulletin No. 118, “ Income Tax Accounting Implications of the Tax Cuts and Jobs Act In accordance with SAB 118, the Company recognized the income tax effects of the TCJA in its consolidated financial statements for the year ended December 31, 2017. During the three and six months ended June 30, 2018, the Company did not have any provisional tax expense for foreign withholding taxes associated with the TCJA. The Company expects to finalize any provisional amounts associated with the TCJA over the next six months based on ongoing assessment of its tax positions and other relevant data. |
Concentrations of credit risk | Concentrations of credit risk – With respect to receivables, concentrations of credit risk are limited to a few customers in the construction industry. The Company performs ongoing credit evaluations of its customers’ financial condition and, generally, requires no collateral from its customers other than normal lien rights. At June 30, 2018 and December 31, 2017, 69% and 81%, respectively, of the Company’s accounts receivable were due from two customers. Revenue relating to two customers represented approximately 48% and 12%, respectively, of the Company’s total revenue for the three months ended June 30, 2018. Revenue relating to three customers represented approximately 38%, 35% and 22%, respectively, of the Company’s total revenue for the three months ended June 30, 2017. Revenue relating to one customer represented approximately 48% of the Company’s total revenue for the six months ended June 30, 2018. Revenue relating to three customers represented approximately 47%, 18% and 13%, respectively, of the Company’s total revenue for the six months ended June 30, 2017. Cost of revenue relating to two vendors represented approximately 73% and 81%, respectively, of the Company’s total cost of revenue for the three months ended June 30, 2018 and 2017. Cost of revenue relating to one and two vendors represented approximately 60% and 76%, respectively, of the Company’s total cost of revenue for the six months ended June 30, 2018 and 2017. The Company believes it has access to alternative suppliers, with limited disruption to the business, should circumstances change with its existing suppliers. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of expects to satisfy remaining unsatisfied performance obligation | Within 1 year $ 29,637,487 1 to 2 years 63,794,582 Thereafter 9,439,186 Total Remaining Unsatisfied Performance Obligations $ 102,871,255 |
Schedule of disaggregation of revenues by categories | Three Months Ended June 30, Revenue by Customer Type 2018 2017 (1) Multi-Family $ 210,814 9 % $ - - Office 229,727 10 % 602,877 60 % Retail 416,976 18 % 33,055 3 % School 1,100,403 48 % 350,576 35 % Special Use 330,965 14 % 6,624 1 % Other 16,912 1 % 8,602 1 % Total revenue by customer type $ 2,305,797 100 % $ 1,001,734 100 % Six Months Ended June 30, Revenue by Customer Type 2018 2017 (1) Multi-Family $ 210,814 5 % $ - - Office 593,356 15 % 973,281 61 % Retail 531,920 14 % 220,464 14 % School 1,860,238 48 % 367,716 23 % Special Use 636,085 17 % 7,049 - % Other 16,912 1 % 37,817 2 % Total revenue by customer type $ 3,849,325 100 % $ 1,606,327 100 % (1) Prior period amounts have not been adjusted for the adoption of ASC 606 under the modified retrospective method. |
Summary of estimated amortization expense of intangible assets | For the year ending December 31,: 2018 $ 294,632 2019 144,064 2020 144,064 2021 144,064 2022 139,741 Thereafter 1,867,050 Total estimated amortization expense $ 2,733,615 |
Summary of changes in fair value of company's level 3 financial liabilities measured on recurring basis | Six Months Ended Beginning balance $ 384,461 Aggregate fair value of conversion option liabilities issued - Change in fair value related to conversion of convertible debentures (288,134 ) Change in fair value of conversion option liabilities and warrants (96,327 ) Ending balance $ - |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounts Receivable [Abstract] | |
Summary of accounts receivable | June 30, December 31, 2017 Billed: Block sales $ - $ 14,038 Construction services 1,717,590 2,652,496 Retainage receivable 524,998 373,576 Total gross receivables 2,242,588 3,040,110 Less: allowance for doubtful accounts (14,904 ) (34,235 ) Total net receivables $ 2,227,684 $ 3,005,875 |
Costs and Estimated Earnings 22
Costs and Estimated Earnings on Uncompleted Contracts (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Costs and Estimated Earnings on Uncompleted Contracts [Abstract] | |
Summary of costs and estimated earnings on uncompleted contracts | June 30, December 31, 2017 Costs incurred on uncompleted contracts $ 7,267,669 $ 3,681,965 Estimated earnings to date on uncompleted contracts 494,749 328,273 Gross contract assets (liabilities) 7,762,418 4,010,238 Less: billings to date (8,456,494 ) (5,622,111 ) Net contract assets (liabilities) $ (694,076 ) $ (1,611,873 ) |
Summary of costs included in condensed consolidated balance sheets | June 30, December 31, Costs and estimated earnings in excess of billings on uncompleted contracts $ 131,392 $ 61,175 Billings in excess of cost and estimated earnings on uncompleted contracts (825,468 ) (1,673,048 ) Net contract assets (liabilities) $ (694,076 ) $ (1,611,873 ) |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Net Income (Loss) Per Share [Abstract] | |
Schedule of shares outstanding to calculate both the basic and diluted loss per share | For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Net (loss) attributable to SG Blocks $ (1,232,904 ) $ (1,705,672 ) $ (1,987,005 ) $ (2,396,002 ) Net loss per share - basic and diluted: Basic and diluted $ (.29 ) $ (3.15 ) $ (.47 ) $ (6.75 ) Weighted average shares outstanding: Basic and diluted 4,260,041 541,424 4,260,041 354,703 |
Stock Options and Grants (Table
Stock Options and Grants (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Stock Options and Grants [Abstract] | |
Summary of employee stock option activity | Shares Weighted Weighted Weighted Aggregate Outstanding – December 31, 2017 888,392 $ 1.23 $ 3.86 9.15 $ 1,881,869 Granted 250,000 1.28 4.61 - - Exercised - - - - - Cancelled - - - - - Outstanding – June 30, 2018 1,138,392 $ 1.24 $ 4.03 8.90 $ 1,439,731 Exercisable – December 31, 2017 738,608 $ 1.22 $ 4.04 9.19 $ 1,435,515 Exercisable – June 30, 2018 838,549 $ 1.23 $ 4.02 8.75 $ 1,095,371 |
Construction Backlog (Tables)
Construction Backlog (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Construction Backlog [Abstract] | |
Schedule of backlog of signed construction and engineering contracts | June 30, December 31, Balance – beginning of period $ 76,659,029 $ 541,291 New contracts and change orders during the period 30,061,551 81,179,323 Subtotal 106,720,580 81,720,614 Less: contract revenue earned during the period (3,849,325 ) (5,061,585 ) Balance – end of period $ 102,871,255 $ 76,659,029 |
Description of Business (Detail
Description of Business (Details) - USD ($) | Jul. 12, 2017 | Jul. 31, 2017 | Jun. 30, 2017 | Jun. 27, 2017 | Feb. 28, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Description of Business (Textual) | |||||||||
Reverse stock split | 1-for-3 | ||||||||
Proceeds from public stock offering, net of issuance costs | $ 6,826,558 | ||||||||
Common stock, shares issued | 4,260,041 | 4,260,041 | |||||||
Common stock, shares outstanding | 4,260,041 | 4,260,041 | |||||||
Offering costs | $ 1,565,386 | ||||||||
Accumulated deficit | (7,806,261) | $ (5,819,256) | |||||||
Cash and cash equivalents | $ 5,632,463 | $ 3,020,614 | $ 5,632,463 | $ 4,870,824 | $ 549,100 | ||||
IPO [Member] | |||||||||
Description of Business (Textual) | |||||||||
Shares of common stock | 225,000 | 225,000 | 1,500,000 | 1,500,000 | |||||
Shares issued, price per share | $ 5 | ||||||||
Proceeds from public stock offering, net of issuance costs | $ 1,046,250 | $ 6,826,558 | |||||||
Commissions and related expenses | 78,750 | $ 673,442 | |||||||
Additional expenses related to offering | $ 813,195 | ||||||||
Warrants [Member] | |||||||||
Description of Business (Textual) | |||||||||
Aggregate purchase warrants | 86,250 | ||||||||
Exercise price | $ 6.25 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Details) | Jun. 30, 2018USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total Remaining Unsatisfied Performance Obligations | $ 102,871,255 |
Within 1 year [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total Remaining Unsatisfied Performance Obligations | 29,637,487 |
1 to 2 years [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total Remaining Unsatisfied Performance Obligations | 63,794,582 |
Thereafter [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total Remaining Unsatisfied Performance Obligations | $ 9,439,186 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Details 1) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | [1] | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | [1] | |
Disaggregation of Revenue [Line Items] | ||||||
Total revenue by customer type | $ 2,305,797 | $ 1,001,734 | $ 3,849,325 | $ 1,606,327 | ||
Total revenue by customer type, percentage | 100 | 100 | 100 | 100 | ||
Multi-Family [Member] | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total revenue by customer type | $ 210,814 | $ 210,814 | ||||
Total revenue by customer type, percentage | 9 | 5 | ||||
Office [Member] | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total revenue by customer type | $ 229,727 | $ 602,877 | $ 593,356 | $ 973,281 | ||
Total revenue by customer type, percentage | 10 | 60 | 15 | 61 | ||
Retail [Member] | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total revenue by customer type | $ 416,976 | $ 33,055 | $ 531,920 | $ 220,464 | ||
Total revenue by customer type, percentage | 18 | 3 | 14 | 14 | ||
School [Member] | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total revenue by customer type | $ 1,100,403 | $ 350,576 | $ 1,860,238 | $ 367,716 | ||
Total revenue by customer type, percentage | 48 | 35 | 48 | 23 | ||
Special Use [Member] | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total revenue by customer type | $ 330,965 | $ 6,624 | $ 636,085 | $ 7,049 | ||
Total revenue by customer type, percentage | 14 | 1 | 17 | |||
Other [Member] | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total revenue by customer type | $ 16,912 | $ 8,602 | $ 16,912 | $ 37,817 | ||
Total revenue by customer type, percentage | 1 | 1 | 1 | 2 | ||
[1] | Prior period amounts have not been adjusted for the adoption of ASC 606 under the modified retrospective method. |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Details 2) | Jun. 30, 2018USD ($) |
Summary of Significant Accounting Policies [Abstract] | |
2,018 | $ 294,632 |
2,019 | 144,064 |
2,020 | 144,064 |
2,021 | 144,064 |
2,022 | 139,741 |
Thereafter | 1,867,050 |
Total estimated amortization expense | $ 2,733,615 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Details 3) | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Summary of Significant Accounting Policies [Abstract] | |
Beginning balance | $ 384,461 |
Aggregate fair value of conversion option liabilities issued | |
Change in fair value related to conversion of convertible debentures | (288,134) |
Change in fair value of conversion option liabilities and warrants | (96,327) |
Ending balance |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Details Textual) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 22, 2017 | Jun. 30, 2018USD ($)CustomerVendor | Jun. 30, 2017USD ($)Vendor | Jun. 30, 2018USD ($)CustomerVendor | Jun. 30, 2017USD ($)Customer | Dec. 31, 2017USD ($)Customer | |
Summary of Significant Accounting Policies (Textual) | ||||||
Intangible assets identified bankruptcy proceedings, description | Intangible assets represent the preliminary assets identified upon emergence from bankruptcy and consist of $2,766,000 of proprietary knowledge and technology, which is being amortized over 20 years, and $1,113,000 of customer contracts, which is being amortized over 2.5 years. In addition, intangible assets include trademarks of $28,820, which is being amortized over 5 years. | |||||
Term of company's operating cycle | The length of the Company's contracts varies but is typically between six to twelve months. | |||||
Warranty offered on completed contracts | 1 year | |||||
Estimated useful lives | 5 years | |||||
Intangible assets trademarks | $ 28,820 | $ 28,820 | ||||
Accumulated amortization | 1,174,205 | $ 584,941 | 1,174,205 | $ 584,941 | ||
Amortization expense | 147,316 | $ 147,316 | 294,632 | $ 293,191 | ||
Remaining unsatisfied performance obligations | 102,871,255 | 102,871,255 | ||||
Corporate tax rate, description | The TCJA lowered the corporate tax rate from 35.0% to 21.0% and imposed a one-time transition tax on unremitted earnings as of the end of 2017, and featured many other tax law provisions. | |||||
Short-term investment | $ 30,033 | |||||
Accounts receivable [Member] | ||||||
Summary of Significant Accounting Policies (Textual) | ||||||
Concentration risk, percentage | 69.00% | 81.00% | ||||
Number of customers | Customer | 2 | |||||
Number of vendors | Vendor | 2 | |||||
Accounts receivable [Member] | Customer one [Member] | ||||||
Summary of Significant Accounting Policies (Textual) | ||||||
Concentration risk, percentage | 38.00% | 47.00% | ||||
Accounts receivable [Member] | Customer two [Member] | ||||||
Summary of Significant Accounting Policies (Textual) | ||||||
Concentration risk, percentage | 35.00% | 18.00% | ||||
Accounts receivable [Member] | Customer three [Member] | ||||||
Summary of Significant Accounting Policies (Textual) | ||||||
Concentration risk, percentage | 22.00% | 13.00% | ||||
Revenue [Member] | ||||||
Summary of Significant Accounting Policies (Textual) | ||||||
Concentration risk, percentage | 48.00% | |||||
Number of customers | Customer | 1 | |||||
Revenue [Member] | Customer one [Member] | ||||||
Summary of Significant Accounting Policies (Textual) | ||||||
Concentration risk, percentage | 48.00% | |||||
Number of customers | Customer | 2 | |||||
Revenue [Member] | Customer two [Member] | ||||||
Summary of Significant Accounting Policies (Textual) | ||||||
Concentration risk, percentage | 12.00% | |||||
Number of customers | Customer | 2 | |||||
Cost of revenue [Member] | ||||||
Summary of Significant Accounting Policies (Textual) | ||||||
Concentration risk, percentage | 73.00% | 81.00% | 60.00% | 76.00% | ||
Number of vendors | 2 | 2 | 1 | 2 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Summary of accounts receivable | ||
Total gross receivables | $ 2,242,588 | $ 3,040,110 |
Less: allowance for doubtful accounts | (14,904) | (34,235) |
Total net receivables | 2,227,684 | 3,005,875 |
Block sales [Member] | ||
Summary of accounts receivable | ||
Total gross receivables | 14,038 | |
Construction services [Member] | ||
Summary of accounts receivable | ||
Total gross receivables | 1,717,590 | 2,652,496 |
Retainage receivable [Member] | ||
Summary of accounts receivable | ||
Total gross receivables | $ 524,998 | $ 373,576 |
Costs and Estimated Earnings 33
Costs and Estimated Earnings on Uncompleted Contracts (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Costs and estimated earnings on uncompleted contracts | ||
Costs incurred on uncompleted contracts | $ 7,267,669 | $ 3,681,965 |
Estimated earnings to date on uncompleted contracts | (494,749) | 328,273 |
Gross contract assets (liabilities) | 7,762,418 | 4,010,238 |
Less: billings to date | (8,456,494) | (5,622,111) |
Net contract assets (liabilities) | $ (694,076) | $ (1,611,873) |
Costs and Estimated Earnings 34
Costs and Estimated Earnings on Uncompleted Contracts (Details 1) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Costs and estimated earnings amounts on uncompleted contracts included in balance sheets | ||
Costs and estimated earnings in excess of billings on uncompleted contracts | $ 131,392 | $ 61,175 |
Billings in excess of cost and estimated earnings on uncompleted contracts | (825,468) | (1,673,048) |
Net contract assets (liabilities) | $ (694,076) | $ (1,611,873) |
Convertible Debentures (Details
Convertible Debentures (Details) - USD ($) | Nov. 17, 2016 | Jun. 30, 2016 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Convertible Debentures (Textual) | ||||||
Total amortization relating to the discount | $ 0 | $ 165,194 | $ 0 | $ 330,388 | ||
Prepaid expenses on offering costs | $ 6,826,558 | |||||
HCI [Member] | Securities Purchase Agreement [Member] | ||||||
Convertible Debentures (Textual) | ||||||
Due date of convertible debentures | Jun. 30, 2018 | Jun. 30, 2018 | ||||
Subscription price sales | $ 750,000 | $ 2,000,000 | ||||
Original issue discount | 12.00% | 12.00% | ||||
Convertible debt principal amount | $ 937,500 | $ 2,500,000 | ||||
Debt conversion, description | The November 2016 Debenture was convertible at HCI's option at any time, in whole or in part, into shares of the Company's common stock at a ratio of 1 share for every $3.75 of debt. | The Exit Facility was convertible at HCI's option at any time, in whole or in part, into shares of the Company's common stock at a ratio of 1 share for every $3.75 of debt. | ||||
2016 Debentures [Member] | ||||||
Convertible Debentures (Textual) | ||||||
Common stock ratio shares | 1,500,000 | |||||
November 2016 Debenture [Member] | HCI [Member] | ||||||
Convertible Debentures (Textual) | ||||||
Debt conversion, converted instrument amount | $ 1,937,500 | |||||
Debt conversion, converted instrument, shares issued | 516,667 | |||||
Loss of conversion of debentures | $ 1,018,475 | |||||
Prepaid expenses on offering costs | $ 1,500,000 |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Net Income (Loss) Per Share [Abstract] | ||||
Net (loss) attributable to SG Blocks | $ (1,232,904) | $ (1,705,672) | $ (1,987,005) | $ (2,396,002) |
Net loss per share - basic and diluted: | ||||
Basic and diluted | $ (0.29) | $ (3.15) | $ (0.47) | $ (6.75) |
Weighted average shares outstanding: | ||||
Basic and diluted | 4,260,041 | 541,424 | 4,260,041 | 354,703 |
Net Income (Loss) Per Share (37
Net Income (Loss) Per Share (Details Textual) | 6 Months Ended |
Jun. 30, 2018shares | |
Options [Member] | |
Net Income (Loss) Per Share (Textual) | |
Warrants to purchase shares of common stock | 1,188,392 |
Warrants [Member] | |
Net Income (Loss) Per Share (Textual) | |
Warrants to purchase shares of common stock | 86,250 |
Stock Options and Grants (Detai
Stock Options and Grants (Details) - Stock options [Member] - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares Outstanding, Beginning balance | 888,392 | |
Shares, Granted | 250,000 | |
Shares, Exercised | ||
Shares, Cancelled | ||
Shares Outstanding, Ending balance | 1,138,392 | 888,392 |
Shares, Exercisable | 838,549 | 738,608 |
Weighted Average Fair Value Per Share, Outstanding, Beginning balance | $ 1.23 | |
Weighted Average Fair Value Per Share, Granted | 1.28 | |
Weighted Average Fair Value Per Share, Exercised | ||
Weighted Average Fair Value Per Share, Cancelled | ||
Weighted Average Fair Value Per Share, Outstanding, Ending balance | 1.24 | $ 1.23 |
Weighted Average Fair Value Per Share, Exercisable | 1.23 | 1.22 |
Weighted Average Exercise Price Per Share, Outstanding, Beginning balance | 3.86 | |
Weighted Average Exercise Price Per Share, Granted | 4.61 | |
Weighted Average Exercise Price Per Share, Exercised | ||
Weighted Average Exercise Price Per Share, Cancelled | ||
Weighted Average Exercise Price Per Share, Outstanding, Ending balance | 4.03 | 3.86 |
Weighted Average Exercise Price Per Share, Exercisable | $ 4.02 | $ 4.04 |
Weighted Average Remaining Terms (in years), Outstanding, Beginning balance | 9 years 1 month 24 days | |
Weighted Average Remaining Terms (in years), Outstanding, Ending balance | 8 years 10 months 25 days | |
Weighted Average Remaining Terms (in years), Exercisable | 8 years 9 months | 9 years 2 months 8 days |
Aggregate intrinsic Value, Outstanding, Beginning balance | $ 1,881,869 | |
Aggregate Intrinsic Value, Outstanding, Ending balance | 1,439,731 | |
Aggregate Intrinsic Value, Exercisable | $ 1,095,371 | $ 1,435,515 |
Stock Options and Grants (Det39
Stock Options and Grants (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Stock Options and Grants (Textual) | ||||
Stock-based compensation | $ 85,325 | $ 55,000 | $ 165,314 | $ 209,383 |
Unrecognized compensation costs | $ 363,259 | $ 363,259 | ||
Non-vested stock options weighted average period | 1 year 5 months 9 days | |||
Fair value of stock price | $ 5.20 | $ 5.20 | ||
Options granted, description | Options granted to employees and directors of the Company and does not include 50,000 options granted to a consultant during 2017. |
Warrants (Details)
Warrants (Details) - Warrants [Member] | 6 Months Ended |
Jun. 30, 2018USD ($)$ / sharesshares | |
Warrants (Textual) | |
Aggregate purchase warrants | shares | 86,250 |
Aggregate value of common stock | $ | $ 63,796 |
Maturity date | Jun. 21, 2023 |
Common stock exercise price | $ / shares | $ 6.25 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Jul. 12, 2017 | Jul. 31, 2017 | Jun. 30, 2017 | Jun. 27, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 |
Stockholders' Equity (Textual) | |||||||
Aggregate amount of conversion | $ 2,583,334 | ||||||
Loss on conversion of convertible debentures | $ 1,018,475 | $ 1,018,475 | |||||
Recognized loss on conversion | $ 645,833 | ||||||
2016 Debentures [Member] | |||||||
Stockholders' Equity (Textual) | |||||||
Issuance of common stock, shares | 1,500,000 | ||||||
Common stock issued upon conversion | 516,667 | ||||||
Aggregate amount of conversion | $ 1,937,500 | ||||||
Public Offering [Member] | |||||||
Stockholders' Equity (Textual) | |||||||
Issuance of common stock, shares | 225,000 | 225,000 | 1,500,000 | 1,500,000 | |||
Common stock, per share | $ 5 | $ 5 | $ 5 | ||||
Issuance costs of offering | $ 176,771 | $ 1,388,615 | |||||
Issuance of warrants, shares | 75,000 | ||||||
Warrants issued, value | $ 55,475 | ||||||
Aggregate value of common stock | $ 8,321 | ||||||
Warrants to purchase of common stock | 11,250 | ||||||
Preferred Stock [Member] | |||||||
Stockholders' Equity (Textual) | |||||||
Common stock issued upon conversion | 1,801,670 |
Construction Backlog (Details)
Construction Backlog (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Construction Backlog [Abstract] | ||
Balance - beginning of period | $ 76,659,029 | $ 541,291 |
New contracts and change orders during the period | 31,683,565 | 81,179,323 |
Subtotal | 108,342,594 | 81,720,614 |
Less: contract revenue earned during the period | (4,593,510) | (5,061,585) |
Balance - end of period | $ 103,749,084 | $ 76,659,029 |
Construction Backlog (Details T
Construction Backlog (Details Textual) $ in Millions | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2018USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2018USD ($)Number | |
Construction Backlog (Textual) | |||
Construction backlog contract amount | $ | $ 27 | $ 15 | $ 55 |
Number of large contracts | Number | 2 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - USD ($) | Aug. 10, 2018 | Jul. 26, 2018 | Jul. 24, 2018 |
Subsequent Events (Textual) | |||
Annual compensation, description | The Company's Board of Directors (the "Board"), the full Board approved, the adoption of a non-employee director compensation plan, pursuant to which the Company's non-employee directors are to receive total annual compensation of $60,000 per year, consisting of (1) a $30,000 cash component and (2) a $30,000 equity component, which will be granted each year in conjunction with the Company's annual meeting of stockholders. | ||
Subsequent event, description | The cash component is payable quarterly in advance and, beginning in the 2019 calendar year, each non-employee director may elect to receive the $30,000 in the form of RSUs, in either a $15,000 or $30,000 increment. In addition, the chairs of the audit committee and compensation committee and the lead independent director will receive an additional annual cash retainer in the amounts of $10,000, $7,500 and $10,000, respectively. In the event the Board forms a nominating and corporate governance committee, the chair of such committee will receive an annual cash retainer in the amount of $5,000. | ||
Restricted stock unit | 5,591 | ||
Common stock shares for resale | 622,726 | ||
Mr. Galvin [Member] | |||
Subsequent Events (Textual) | |||
Increase in annual base salary | $ 370,000 | ||
Mr. Shetty [Member] | |||
Subsequent Events (Textual) | |||
Increase in annual base salary | $ 300,000 |