Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 12, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | SG BLOCKS, INC. | |
Entity Central Index Key | 0001023994 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Shell Company | false | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 6,007,791 | |
Entity File Number | 001-38037 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Trading Symbol | SGBX | |
Entity Address, Address Line One | 195 Montague Street, | |
Entity Address, Address Line Two | 14<sup>th</sup> Floor, | |
Entity Address, City or Town | Brooklyn | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 11201 | |
Entity Tax Identification Number | 95-4463937 | |
City Area Code | (646) | |
Title of 12(b) Security | Common Stock, par value $0.01 | |
Security Exchange Name | NASDAQ | |
Local Phone Number | 240-4235 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 1,953 | $ 1,368,395 |
Accounts receivable, net | 1,436,339 | 1,746,326 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 8,689 | 260,325 |
Prepaid expenses and other current assets | 164,885 | 986,687 |
Total current assets | 1,611,866 | 4,361,733 |
Property, plant and equipment, net | 12,671 | 71,337 |
Goodwill | 4,162,173 | 4,162,173 |
Intangible assets, net | 2,335,086 | 2,443,929 |
Total Assets | 8,121,796 | 11,039,172 |
Current liabilities: | ||
Accounts payable and accrued expenses | 1,807,456 | 2,624,218 |
Billings in excess of costs and estimated earnings on uncompleted contracts | 241,091 | 1,334,887 |
Total current liabilities | 2,048,547 | 3,959,105 |
Commitments and contingencies (Note 12) | ||
Stockholders’ equity: | ||
Preferred stock, $1.00 par value, 5,405,010 shares authorized; none issued or outstanding | ||
Common stock, $0.01 par value, 25,000,000 shares authorized as of September 30, 2019 and 300,000,000 shares authorized as of December 31, 2018; 6,007,791 issued and outstanding as of September 30, 2019 and 4,260,041 issued and outstanding as of December 31, 2018 | 60,079 | 42,601 |
Additional paid-in capital | 19,464,360 | 17,700,743 |
Accumulated deficit | (13,451,190) | (10,663,277) |
Total stockholders’ equity | 6,073,249 | 7,080,067 |
Total Liabilities and Stockholders’ Equity | $ 8,121,796 | $ 11,039,172 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
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 | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 25,000,000 | 300,000,000 |
Common stock, shares issued | 6,007,791 | 4,260,041 |
Common stock, shares outstanding | 6,007,791 | 4,260,041 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue: | ||||
Revenue | $ 184,526 | $ 2,082,825 | $ 2,647,558 | $ 5,932,150 |
Cost of revenue: | ||||
Cost of revenue | 366,783 | 1,857,985 | 2,018,392 | 5,512,140 |
Gross profit (loss) | (182,257) | 224,840 | 629,166 | 420,010 |
Operating expenses: | ||||
Payroll and related expenses | 548,156 | 611,906 | 1,832,333 | 1,589,935 |
General and administrative expenses | 478,726 | 557,078 | 1,318,390 | 1,538,441 |
Marketing and business development expense | 63,016 | 133,378 | 194,591 | 311,965 |
Pre-project expenses | 1,275 | 19,726 | 49,964 | |
Total | 1,091,173 | 1,302,362 | 3,365,040 | 3,490,305 |
Operating loss | (1,273,430) | (1,077,522) | (2,735,874) | (3,070,295) |
Other income (expense): | ||||
Other income | 5,768 | |||
Loss on asset disposal | (52,039) | (52,039) | ||
Loss from equity affiliates | (960) | (960) | ||
Total | (52,039) | (960) | (52,039) | 4,808 |
Loss before income taxes | (1,325,469) | (1,078,482) | (2,787,913) | (3,065,487) |
Income tax expense | ||||
Net loss | (1,325,469) | (1,078,482) | (2,787,913) | (3,065,487) |
Less: Net loss attributable to non-controlling interest | (52,445) | (52,445) | ||
Net loss attributable to common stockholders of SG Blocks, Inc. | $ (1,325,469) | $ (1,026,037) | $ (2,787,913) | $ (3,013,042) |
Net loss per share - basic and diluted: | ||||
Basic and diluted | $ (0.23) | $ (0.24) | $ (0.56) | $ (0.71) |
Weighted average shares outstanding: | ||||
Basic and diluted | 5,694,748 | 4,260,041 | 4,938,547 | 4,260,041 |
Blocks sales | ||||
Revenue: | ||||
Revenue | $ 42,799 | |||
Cost of revenue: | ||||
Cost of revenue | 33,084 | |||
Construction services | ||||
Revenue: | ||||
Revenue | 187,895 | 2,033,769 | 2,521,139 | 5,307,168 |
Cost of revenue: | ||||
Cost of revenue | 391,494 | 1,764,030 | 1,986,394 | 5,056,971 |
Engineering services | ||||
Revenue: | ||||
Revenue | (3,369) | 49,056 | 126,419 | 582,183 |
Cost of revenue: | ||||
Cost of revenue | $ (24,711) | $ 93,955 | $ 31,998 | $ 422,085 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes In Stockholders' Equity - USD ($) | Total | 0.01 Par Value Common Stock | Additional Paid-in Capital | Accumulated Deficit | Non-controlling Interest |
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 | 282,416 | 282,416 | |||
Net loss | (3,065,487) | (3,013,042) | (52,445) | ||
Ending Balance at Sep. 30, 2018 | 8,744,803 | $ 42,601 | 17,586,945 | (8,832,298) | (52,445) |
Ending Balance, Shares at Sep. 30, 2018 | 4,260,041 | ||||
Beginning Balance at Jun. 30, 2018 | 9,706,183 | $ 42,601 | 17,469,843 | (7,806,261) | |
Beginning Balance, Shares at Jun. 30, 2018 | 4,260,041 | ||||
Stock-based compensation | 117,102 | 117,102 | |||
Net loss | (1,078,482) | (1,026,037) | (52,445) | ||
Ending Balance at Sep. 30, 2018 | 8,744,803 | $ 42,601 | 17,586,945 | (8,832,298) | (52,445) |
Ending Balance, Shares at Sep. 30, 2018 | 4,260,041 | ||||
Beginning Balance at Dec. 31, 2018 | 7,080,067 | $ 42,601 | 17,700,743 | (10,663,277) | |
Beginning Balance, Shares at Dec. 31, 2018 | 4,260,041 | ||||
Stock-based compensation | 645,080 | 645,080 | |||
Issuance of common stock, net of issuance costs | 1,136,015 | $ 17,478 | 1,118,537 | ||
Issuance of common stock, net of issuance costs, Shares | 1,747,750 | ||||
Net loss | (2,787,913) | (2,787,913) | |||
Ending Balance at Sep. 30, 2019 | 6,073,249 | $ 60,079 | $ 19,464,360 | $ (13,451,190) | |
Ending Balance, Shares at Sep. 30, 2019 | 6,007,791 | ||||
Beginning Balance at Jun. 30, 2019 | 6,618,322 | $ 51,079 | |||
Beginning Balance, Shares at Jun. 30, 2019 | 5,107,791 | 18,692,964 | (12,125,721) | ||
Stock-based compensation | 197,090 | $ 197,090 | |||
Issuance of common stock, net of issuance costs | 583,306 | $ 9,000 | 574,306 | ||
Issuance of common stock, net of issuance costs, Shares | 900,000 | ||||
Net loss | (1,325,469) | (1,325,469) | |||
Ending Balance at Sep. 30, 2019 | $ 6,073,249 | $ 60,079 | $ 19,464,360 | $ (13,451,190) | |
Ending Balance, Shares at Sep. 30, 2019 | 6,007,791 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (2,787,913) | $ (3,065,487) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expense | 8,697 | 3,227 |
Amortization of intangible assets | 108,843 | 442,031 |
Bad debt expense (benefit) | (54,000) | |
Interest income on short-term investment | (4) | |
Stock-based compensation | 482,139 | 282,416 |
Loss on asset disposal | 52,039 | |
Loss on equity affiliates | 960 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 363,987 | 247,670 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 251,636 | (46,514) |
Prepaid expenses and other current assets | 821,802 | (17,922) |
Accounts payable and accrued expenses | (653,821) | (160,480) |
Billings in excess of costs and estimated earnings on uncompleted contracts | (1,093,796) | 408,692 |
Net cash used in operating activities | (2,500,387) | (1,905,411) |
Cash flows from investing activities: | ||
Proceeds from short-term investment | 30,037 | |
Purchase of property, plant and equipment | (2,070) | (69,137) |
Purchase of intangible asset | (5,000) | |
Investment in and advances to equity affiliates | (7,916) | |
Net cash used in investing activities | (2,070) | (52,016) |
Cash flows from financing activities: | ||
Proceeds from public stock offering, net of issuance costs | 1,136,015 | |
Net cash provided by financing activities | 1,136,015 | |
Net decrease in cash and cash equivalents | (1,366,442) | (1,957,427) |
Cash and cash equivalents - beginning of period | 1,368,395 | 4,870,824 |
Cash and cash equivalents - end of period | 1,953 | |
Supplemental disclosure of non-cash operating activities: | ||
Non cash conversion of accrued salary to restricted stock units | $ 162,941 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2019 | |
Description of Business [Abstract] | |
Description of Business | 1 Description of Business SG Blocks, Inc. (collectively with its subsidiaries, the “Company,” “we”, “us” or “our”) The Company provides two commercial, industrial and residential building construction. The Company provides SGBlocks TM shipping containers that the Company modifies for use in construction. Rather than consuming new steel and lumber, SGBlocks TM repurposes them for use in building. They 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 SGBlocks TM “Modules”), which are prefabricated steel modular units created specifically for use in modular construction, unlike the shipping containers used to create SGBlocks TM . The Company also provides engineering and project management services related to the use and modification of Modules in construction. The Company is now focusing on entering into licensing agreements across the Company’s construction opportunity verticals that should enable it to further its sales and marketing efforts on qualified lead generation for its licensees. |
Liquidity
Liquidity | 9 Months Ended |
Sep. 30, 2019 | |
Liquidity [Abstract] | |
Liquidity | 2. Liquidity T he Company ha As of September 30, 2019 1,953 17.8 8 2019 Within 1 $ 4,250,770 1 2 13,536,400 Thereafter — Total Backlog $ 17,787,170 The Company completed an equity offering in April 2019 and in August 2019, which resulted in net proceeds of approximately $1,136,015. See Note 9 The Company believes that it will have sufficient cash balances to meet obligations and further intends to meet its capital needs by containing costs and entering into strategic alliances, as well as exploring other options, including the possibility of raising additional debt or equity capital as necessary. There is, however, no assurance the Company will be successful in meeting its capital requirements prior to becoming cash flow positive. The Company does not have any additional sources secured for future funding, and if it is unable to raise the necessary capital at the times it requires such funding, it may need to materially change its business plan, including delaying implementation of aspects of such business plan or curtailing or abandoning such business plan altogether. On July 1, 2019, the Company received a letter from The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, because the closing bid price for the Company’s common stock listed on Nasdaq was below $1.00 for 30 5550 2 Pursuant to Nasdaq Listing Rule 5810 3 180 ten 180 If the Company does not regain compliance with Rule 5550 2 180 The Company intends to monitor the closing bid price of its common stock and consider its available options in the event that the closing bid price of its common stock remains below $1.00 per share. There can be no assurance that the Company will be able to regain compliance with the minimum bid price requirement or maintain compliance with the other listing requirements |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3 Summary of Significant Accounting Policies Basis of presentation and principals of consolidation – The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 The condensed consolidated financial statements and notes should be read in conjunction with the financial statements and notes for the year ended included in the Company’s Annual Report on Form 10-K for the year ended , as filed with the Securities and Exchange Commission on In the opinion of management, all adjustments, consisting of normal accruals, considered necessary for a fair presentation of the interim financial statements have been included. Results for the nine months ended September 30, 2019 The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, SG Building Blocks, Inc.‚ SG Residential, Inc.‚ and SG Blocks Puerto Rico, Inc. All significant intercompany accounts and transactions have been eliminated. Certain prior period amounts have been reclassified to conform to the current period’s presentation. Recently adopted accounting pronouncements – New accounting pronouncements implemented by the Company are discussed below or in the related notes, where appropriate. In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016 - 02 , “Leases (Topic 842 )” (“ASU 2016 - 02 ”). The 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. In July 2018, the FASB issued ASU No. 2018 - 11 , “Leases (Topic 842 ): Targeted Improvements” (“ASU 2018 - 11 ”), which provides entities with an additional transition method. Under ASU 2018 - 11 , entities have the option of recognizing the cumulative effect of applying the new standard as an adjustment to beginning retained earnings in the year of adoption while continuing to present all prior periods under previous lease accounting guidance. In July 2018, the FASB also issued ASU No. 2018 - 10 , “Codification Improvements to Topic 842 , Leases” (“ASU 2018 - 10 ”), which clarifies how to apply certain aspects of ASU 2016 - 02 . The Company adopted ASU 2016 - 02 , ASU 2018 - 10 and ASU 2018 - 11 effective January 1, 2019. T he Company had no operating or finance lease agreements as of September 30, 2019 . The adoption of ASU No. 2016 - 02 did not have a material impact on the Company’s financial statements and disclosures. In June 2018, the FASB issued ASU No. 2018 07 718 2018 07 718 2018 07 718 718 2018 07 718 1 2 606 2018 07 The adoption of ASU No. 2018 07 Recently issued accounting pronouncements not yet adopted – In January 2017, the FASB issued ASU No. 2017 04 2017 04 2 2017 04 In August 2018, the FASB issued ASU No. 2018 13 2018 13 820 3 2018 13 2018 13 Accounting estimates Operating cycle – six twelve In some instances, the length of the contract may exceed twelve one Revenue reco – The Company applies recognition of revenue over time, which is similar to the method the Company applied under previous guidance (i.e., percentage of completion). The Company determines, 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 recognition of revenue aligns 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 ( 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; and ( 5 Recognize revenue as performance obligations are satisfied. 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. On October 3 2019, the Company entered into an Exclusive License Agreement (“ELA” ) pursuant to which it granted an exclusive license for its technology as outlined in the ELA. See Note 13 Under the ELA, the Company will receive royalty payments based upon gross revenues earned by the licensee for commercialize products within the field of design and project management platforms for residential use, including single-family residences and multi-family residences, but excluding military housing. The Company has determined that the ELA grants the licensee a right to access the Company’s intellectual property throughout the license period (or its remaining economic life, if shorter), and thus recognizes revenue over time as the licensee recognizes revenue and the Company has the right to payment of royalties. No revenue has been recognized under the ELA for the nine months ended September 30, 2019 Disaggregation of Revenues The Company’s revenues are principally derived from construction and engineering contracts related to Modules. The Company’s contracts are with many different customers in numerous industries. The following tables provide furt her disaggregation of the Company’s revenues by categories: Three Months Ended September 30, Revenue by Customer Type 2019 2018 Multi-Family $ (18,013 ) — % $ 47,026 2 % Office 4,424 2 % 445,992 22 % Retail 195,421 97 % 955,667 46 % School — — % 602,641 29 % Special Use — — % 30,990 1 % Other 2,694 1 % 509 — % Total revenue by customer type $ 184,526 100 % $ 2,082,825 100 % Nine Months Ended September 30, Revenue by Customer Type 2019 2018 Multi-Family $ 94,178 4 % $ 257,840 4 % Office 1,212,321 46 % 1,039,348 18 % Retail 1,332,805 50 % 1,487,587 25 % School — — % 2,462,880 42 % Special Use 6,812 — % 667,074 11 % Other 1,442 — % 17,421 — % Total revenue by customer type $ 2,647,558 100 % $ 5,932,150 100 % Contract Assets and Contract Liabilitie 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 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 customers exceed revenues recognized under the cost-to-cost measure of progress. Contract liabilities additionally include advanced payments from 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 “billings in excess of costs and estimated earnings on uncompleted contracts”. Although the Company believes it 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. Cash and cash equivalents – The Company considers cash and cash equivalents to include all short-term, highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three September 30, 2019 $ as of December 31, 2018 . Short-term investment – The Company classifies any investment with a maturity greater than six months one no September 30, 2019 December 31, 2018 Accounts receivable and allowance for doubtful accounts – Accounts receivable are receivables generated from sales to customers and progress billings on performance type contracts. Amounts included in accounts receivable are deemed to be collectible within the Company’s operating cycle. The Company recognizes account receivable at invoiced amounts. The allowance for doubtful accounts reflects the Company's best estimate of probable losses inherent in the accounts receivable balances. Management provides an allowance for doubtful accounts based on the Company’s historical losses, specific customer circumstances, and general economic conditions. Periodically, management reviews accounts receivable and adjusts the allowance based on current circumstances and charges off uncollectible receivables when all attempts to collect have been exhausted and the prospects for recovery are remote. Recoveries are recognized when they are received. Actual collection losses may differ from the Company’s estimates and could be material to its consolidated financial position, result of operations, and cash flows. Inventory – Raw construction materials (primarily shipping containers) are valued at the lower of cost (first-in, first-out method) or net realizable value. Finished goods and work-in-process inventories are valued at the lower of cost or net realizable value, using the specific identification method. There was no September 30, 2019 December 31, 2018 Goodwill – The Company performs its impairment test of goodwill at the reporting unit level each fiscal year, or more frequently if events or circumstances change that would more likely than not reduce the fair value of its reporting unit below its carrying values. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, management conducts a two December 31, 2018 Intangible assets – Intangible assets represent the preliminary assets identified upon emergence from bankruptcy and consist of $ 2,766,000 20 1,113,000 2.5 28,820 5,300 5 December 31, 2018 September 30, 2019 2018 The amortization expense for the three months ended September 30, 2019 and 2018 was $ 36,281 and $ 147,399, respectively. The amortization expense for the nine months ended September 30, 2019 and 2018 was $ and $ , respectively. The estimated amortization expense for the successive five years is as follows: For the year ended December 31, 2019 $ 36,281 2020 145,124 2021 145,124 2022 140,801 2023 139,007 Thereafter 1,728,749 $ 2,335,086 Property, plant and equipment – Property, plant and equipment is stated at cost. Depreciation is computed using the straight-line method over the estimated lives of each asset. Estimated useful life for significant classes of assets are as follows: computer and software 3 to 5 years and equipment Common stock purchase warrants and other derivative financial instruments – The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) provide a choice of net-cash settlement or settlement in the Company’s own shares (physical settlement or net-share settlement) providing that such contracts are indexed to the Company’s own stock. The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if any event occurs and if that event is outside the Company’s control) or (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses classification of common stock purchase warrants and other free standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities or equity is required. Fair value measurements – Financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, are carried at cost, which the Company believes approximates fair value due to the short-term nature of these instruments. 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 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). Share-based payments – The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, including non-employee directors, the fair value of a stock option award is measured on the grant date. The fair value amount is then recognized over the period services are required to be provided in exchange for the award, usually the vesting period. The Company recognizes stock-based compensation expense on a graded-vesting basis over the requisite service period for each separately vesting tranche of each award. Stock-based compensation expense to employees and all directors is reported within payroll and related expenses in the consolidated statements of operations. Stock-based compensation expense to non-employees is reported within marketing and business development expense in the consolidated statements of operations. Income taxes – The Company accounts for income taxes utilizing the asset and liability approach. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for income taxes generally represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from the differences between the financial and tax bases of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. 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. Concentrations of credit risk – Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents. The Company places its cash with high credit quality institutions. At times, such amounts may be in excess of the FDIC insurance limits. The Company has not experienced any losses in its account and believes that it is not exposed to any significant credit risk on the account. 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 September 30, 2019 December 31, 2018 76 Revenue relating to two and four three months September 30, 2019 2018 Revenue relating to and customers represented approximately % and % of the Company’s total revenue for the nine months ended and 2018 , respectively. Cost of revenue relating to two and four vendors represented approximately % and % of the Company’s total cost of revenue for the three months ended and 2018 , respectively. nine months September 30, 2019 2018 |
Accounts Receivable
Accounts Receivable | 9 Months Ended |
Sep. 30, 2019 | |
Accounts Receivable [Abstract] | |
Accounts Receivable | 4. Accounts Receivable At September 30, 2019 December 31, 2018 September 30, 2019 December 31, 2018 Billed: Block sales $ — $ 14,723 Construction services 1,306,567 1,619,498 Engineering services 333,230 400,877 Retainage receivable 544,911 543,417 Other receivable 37,526 7,706 Total gross receivables 2,222,234 2,586,221 Less: allowance for doubtful accounts ( 1 (785,895 ) (839,895 ) Total net receivables $ 1,436,339 $ 1,746,326 ( 1 The allowance for doubtful accounts is primarily due to unpaid billings on a contract that is currently in dispute. Receivables are September 30, 2019 no nine months September 30, 2019 December 31, 2018 |
Contract Assets and Contract Li
Contract Assets and Contract Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Contract Assets and Contract Liabilities [Abstract] | |
Contract Assets and Contract Liabilities | 5 Contract Assets and Contract Liabilities Costs and estimated earnings on uncompleted contracts consisted of the following at September 30, 2019 December 31, 2018 September 30, 2019 December 31, 2018 Costs incurred on uncompleted contracts $ 228,461 $ 11,307,975 Estimated earnings to date on uncompleted contracts 79,852 838,615 Gross contract assets 308,313 12,146,590 Less: billings to date (540,715 ) (13,221,152 ) Net contract assets (liabilities) $ (232,402 ) $ (1,074,562 ) The above amounts are included in the accompanying consolidated balance sheets under the following captions at September 30, 2018 September 30, 2019 December 31, 2018 Costs and estimated earnings in excess of billings on uncompleted contracts $ 8,689 $ 260,325 Billings in excess of costs and estimated earnings on uncompleted contracts (241,091 ) (1,334,887 ) Net contract assets (liabilities) $ (232,402 ) $ (1,074,562 ) Although management believes it 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 peri odically evaluates and revises its estimates and makes adjustments when they are considered necessary. |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 6 Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and amortization and depreciated using the straight-line method over their useful lives. At September 30, 2019 December 31, 2018 September 30, 2019 December 31, 2018 Computer equipment and software $ 18,862 $ 39,193 Furniture and other equipment 1,885 63,479 Property, plant and equipment 20,747 102,672 Less: accumulated depreciation (8,076 ) (31,335 ) Property, plant and equipment, net $ 12,671 $ 71,337 Depreciation expense for the nine months September 30, 2019 2018 8,697 3,227 |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 9 Months Ended |
Sep. 30, 2019 | |
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 September 30, 2019 outstanding that could potentially dilute future net income (loss) per share. Because the Company had a net loss for the three nine months September 30, 2019 At September 30, 2018 , 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. |
Construction Backlog
Construction Backlog | 9 Months Ended |
Sep. 30, 2019 | |
Construction Backlog [Abstract] | |
Construction Backlog | 8 Construction Backlog The following represents the backlog of signed construction and engineering contracts in existence at September 30, 2019 December 31, 2018 September 30, 2019 December 31, 2018 September 30, 2019 December 31, 2018 Balance - beginning of period $ 97,657,379 $ 76,659,029 New contracts and change orders during the period, net 17,474,684 58,805,877 Adjustments and cancellations, net (94,697,335 ) (29,616,815 ) Subtotal 20,434,728 105,848,091 Less: contract revenue earned during the period (2,647,558 ) (8,190,712 ) Balance - end of period $ 17,787,170 $ 97,657,379 Backlog at September 30, 2019 2019 17 The Company expects that all of this revenue will be realized by September 30, 2021. During the fourth quarter of 2018 , the Company moved a contract of $ million out of backlog and into its pipeline until the customer completes a highest and best use analysis of the land. During the second quarter of 2019 25.0 During the third quarter of 2019 one The Company’s remaining backlog as of September 30, 2019 September 30, 2019 $ 17,787,170 The Company expects to satisfy its backlog which represents the remaining unsatisfied performance obligation on contracts as of September 30, 2019 2019 Within 1 $ 4,250,770 1 2 13,536,400 Thereafter — Total Backlog $ 17,787,170 Although backlog reflects business that is considered to be firm, cancellations, deferrals or scope adjustments may occur. Backlog is adjusted to reflect any known project cancellations, revisions to project scope and cost and project deferrals, as appropriate. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | 9 Stockholders’ Equity Public Offering – In June 2017, the Company issued 1,500,000 shares of its common stock at $5.00 per share through a public offering (the “Public Offering”). The Company incurred $1,388,615 in issuance costs from the Public Offering and issued warrants to purchase 75,000 shares of common stock valued at $55,475 to the underwriters (as discussed in Note 10 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 (as discussed in Note 10 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 and shares of its common stock upon conversion of the previously outstanding convertible debentures . Securities Purchase Agreement – 847,750 pursuant to the terms of 379,816 84,775 shares of common stock 10 Underwriting Agreement – , the Company issued 900,000 shares of its common stock at $0.85 per share pursuant to the terms of an Underwriting Agreement (the “Underwriting Agreement”) to the public. The Company incurred $181,695 in issuance costs from the offering and issued warrants to purchase 45,000 shares of common stock to the underwriter. The warrants are further discussed in Note 10. Decrease in Authorized Shares – On June 5, 2019, at the Company’s annual meeting of stockholders, the stockholders approved an amendment to the Company’s amended and restated certificate of incorporation to decrease the number of authorized shares of common stock from 300,000,000 to 25,000,000 shares. Following the meeting, on June 5, 2019, the Company filed a certificate of amendment to the amended and restated certificate of incorporation to decrease its authorized shares of common stock accordingly. There was no change to the number of authorized shares of preferred stock. |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2019 | |
Warrants [Abstract] | |
Warrants | 10 Warrants In conjunction with the Public Offering, the Company issued to certain affiliates of the underwriters, as compensation, warrants to purchase an aggregate of shares of common stock at an exercise price of $ per share. The warrants are exercisable at the option of the holder on or after June 21, 2018 and expire . The fair value of warrants was calculated utilizing a Black- model and amounted to $ . The fair market value of the warrants as of the date of issuance has been included in issuance costs in additional paid-in capital. In conjunction with the Purchase Agreement in April 2019, the Company also sold warrants to purchase up to an aggregate of 847,750 1.375 October 29, 2024. T he Company issued to certain affiliates of the underwriters, as compensation, warrants to purchase an aggregate of 84,775 shares of common stock at an initial exercise price of $ 1.375 per share. The warrants are exercisable at the option of the holder on or after October 29, 2019 and expire April 24, 2024 . In conjunction with the Underwriting Agreement in August 2019, the Company issued to the underwriter, as compensation, warrants to purchase an aggregate of 45,000 shares of common stock at an initial exercise price of $ 1.0625 , 2024 |
Share-based Compensation
Share-based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Compensation [Abstract] | |
Share-based Compensation | 11 Share-based Compensation On October 26, 2016, the Company’s Board of Directors approved the issuance of up to 500,000 shares of the Company’s common stock in the form of restricted stock or options (“ 2016 Stock Plan”). Effective January 20, 2017, the 2016 Stock Plan was amended and restated as the SG Blocks, . Stock Incentive Plan, as further amended eff June 1, 2018 (the “Incentive Plan”). The Incentive Plan authorizes the issuance of up to shares of common stock. It authorizes the issuance of equity-based awards in the form of stock options, stock appreciation rights, restricted shares, restricted share units, other share-based awards and cash-based awards to non-employee directors and to officers, employees and consultants of the Company and its subsidiaries, except that incentive stock options may only be granted to the Company’s employees and its subsidiary’s employees. The Incentive Plan expires on October 26, 2026, and is administered by the Compensation Committee of the Board of Directors of the Company. Each of the Company’s employees, directors, and consultants are eligible to participate in the Incentive Plan. As of September 30, 2019 shares of common stock available for issuance under the Incentive Plan. Stock-Based Compensation Expense Stock-based compensation expe Three September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Payroll and related expenses $ 139,402 $ 117,102 $ 472,014 $ 282,416 Marketing and business development expenses 3,375 — 10,125 — Total $ 142,777 $ 117,102 $ 482,139 $ 282,416 The following table presents total stock-based compensation expense by security type included in the consolidated statements of operations: Three September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Stock options $ 40,098 $ 117,102 $ 112,293 $ 282,416 Restricted stock units 102,679 — 369,846 — Total $ 142,777 $ 117,102 $ 482,139 $ 282,416 Stock-Based Option Awards The fair value of the stock-based option awards granted during the nine months September 30, 2019 2018 2019 2018 Expected dividend yield — % — % Expected stock volatility 68.35 % 25.70 % Risk-free interest rate 2.44 % 2.56 % Expected life (in years) 3 5 Because the Company does not have significant historical data on employee exercise behavior, the Company uses the “Simplified Method” to calculate the expected life of the stock-based option awards granted to employees. The simplified method is calculated by averaging the vesting period and contractual term of the options. The following table summarizes stock-based option activities and changes during the nine months September 30, 2019 , as described below: Shares Weighted Average Fair Value Per Share Weighted Average Exercise Price Per Share Weighted Average Remaining Terms (in years) Aggregate Intrinsic Value Outstanding – December 31, 2018 1,105,059 $ 1.24 $ 4.06 8.41 $ — Granted — — — — — Exercised — — — — — Cancelled (25,000 ) — — — — Outstanding – September 30, 2019 1,080,059 1.24 4.05 7.64 $ — Exercisable – December 31, 2018 949,355 1.23 4.00 8.30 — Exercisable – September 30, 2019 1,024,356 $ 1.24 $ 4.04 7.62 $ — For the three months September 30, 2019 2018 117,102 For the nine months June 30, 2019 2018 , the Company recognized stock-based compensation expense of $112,293 and $282,416 , respectively, related to stock options. As of September 30, 2019 one September 30, 2019 In March 2018, the Company granted Mr. Galvin, Mr. Shetty and six purchase 82,154, 81,342 and an aggregate of 86,504, respectively, shares of the Company’s common stock with an exercise price of $4.61 per share. These options vest in equal quarterly installments over either a two three two 2019 three Non-Employee Stock Options In September 2017, in connection with an advisory agreement entered into by the Company (the “Advisory Agreement”), a consultant was granted options to purchase 50,000 shares of the Company’s common stock, with an exercise price of $6.25. The options were scheduled to vest when certain performance conditions were met. These performance conditions consisted of the purchase of fifty Restricted Stock Units Effective July 26, 2018, a total of 27,955 of restricted stock units were granted to the Company’s non-employee directors, under the Company’s stock-based compensation plan, at the calculated fair value of $5.36 per share, which represents the average closing price of the Company’s common stock for the ten including the grant date. Restricted stock units granted to directors in 2018 six On March 22, 2019, a total of 314,058 of restricted stock units were granted to Mr. Galvin, Mr. Armstrong, Mr. , six one Restricted stock units granted to Mr. Galvin, Mr. Armstrong, Mr. Shetty, and an aggregate of six one 122,785 , 15,432 , 114,575 61,266 , respectively, vest in installments over either a one two three four 847,957 On January 15, 2019 and February 26, 2019, a total of 10,514 of restricted stock units were granted to two ten The restricted stock units granted on January 15, 2019 will vest on January 15, 2020, subject to each individual’s continued service as a director of the Company through such date, and are payable six 2019 six Effective June 5, 2019, a total of 183,780 0.82 ten including the grant date. Restricted stock units granted to directors on June 5, 2019 vest on the earlier of (A) the first anniversary of the date of the grant or (B) the date of the annual meeting of the Company’s stockholders that occurs in the year immediately following the date of the grant; and are payable six For the three months September 30, 2019 2018 For the nine months September 30, 2019 and 2018 , the Company recognized stock-based compensation expense of $369,846 and $0 related to restricted stock units. This expense is included in the payroll and related expenses and marketing and business development expenses in the accompanying condensed consolidated statement of operations. For the nine months September 30, 2019 2018 The following table summarizes restricted stock unit activities during the nine months September 30, 2019 Number of Shares Non-vested balance at January 1, 2019 22,364 Granted 508,349 Vested (27,792 ) Forfeited/Expired (56,779 ) Non-vested balance at September 30, 2019 446,142 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 12. Commitm Legal Proceedings The Company is subject to cert Pizzarotti Litigation – On or about August 10, 2018, Pizzarotti, LLC filed a complaint against the Company and Mahesh Shetty, the Company’s President, and others seeking unspecified damages for an alleged breach of contract by the Company and another entity named Phipps & Co. (“Phipps”). The lawsuit was filed as Pizzarotti, LLC. v. Phipps & Co., et al., Index No. 653996 2018 April 1, 2019, Phipps filed cross-claims against the Company and Mr. Shetty asserting claims for indemnification, contribution, fraud, negligence, negligent misrepresentation, and breach of contract. SG Blocks has likewise cross claimed against Phipps for indemnification and contribution, claiming that any damages to the Plaintiff were the result of the acts or omissions of Phipps and its principals. The claims against the Company arise from a purported assignment agreement dated August 10, 2018, whereby Pizzarotti claims that the Company agreed to assume certain obligations under a certain trade contract between Pizzarotti and Phipps & Co. The Company has moved to dismiss both the Pizzarotti claims and Phipps cross claims asserting that the purported assignment is void and unenforceable as a matter of law for lack of consideration. That motion is currently pending before the court. The Company intends to vigorously defend the litigation. Litigation is subject to many uncertainties, and the outcome of this action is not predicted with assurance. The Company is currently unable to predict the possible loss or range of loss, if any, associated with the resolution of this litigation, and, accordingly, the Company has made no provision related to this matter in the condensed consolidated financial statements. Vendor Litigation – On January 1, 2019, SG Blocks filed a suit against Teton Buildings, LLC (“Teton”) to recover breach of contract damages of approximately $2,100,000 plus attorneys’ fees related to the HOLA Community Partners construction project in Los Angeles, California (the “HOLA Project”), for which Teton was engaged by the Company to supply modular units in early 2017 SG Blocks, Inc. v. Teton Buildings, LLC 2019 02827 SG Blocks believes it will prevail on the merits of the case. As with any litigation at this early stage, the cost of litigating and the outcome remain uncertain. On October 16, 2019, Teton Buildings, LLC filed a voluntary petition for relief under chapter 11, title 11, of the United States Code, in the United States Bankruptcy Court for Southern District of Texas, Houston Division (the “Bankruptcy Court”). The case in the Bankruptcy Court is styled In re: Teton Buildings, LLC and bears the case number 19-35811. As a result of the bankruptcy filing the litigation against stayed. The Company is pursuing its rights and remedies in the Teton bankruptcy case. Although the Company believes it will prevail on the merits of its claims, as with any litigation, particularly litigation within bankruptcy, the cost of litigation and the outcome are uncertain, and now subject to the United States Bankruptcy Code and Rules. HOLA Community Partners Matter – There is an ongoing dispute between the Company and HOLA Community Partners, a California non-profit corporation, in connection with the parties’ Construction and Delivery Agreement, dated June 1, 2017, pursuant to which HOLA Community Partners hired the Company for design, engineering, fabrication, and installation services for the construction of the HOLA Project. The Company claims that HOLA Community Partners owes the Company certain amounts due for work performed on the HOLA Project and extra costs incurred due to delays and impacts caused by HOLA Community Partners. HOLA Community Partners disputes the amounts owed, and claims that the Company failed to meet its contractual obligations. The parties are in ongoing settlement discussions. Neither party has commenced litigation as of the date of these condensed consolidated financial statements. In addition, the Company is subject to other routine legal proceedings, claims, and litigation in the ordinary course of its business. Defending lawsuits requires significant management attention and financial resources and the outcome of any litigation, including the matters described above, is inherently uncertain. The Company does not, however, currently expect that the costs to resolve these routine matters will have a material adverse effect on its consolidated financial position, results of operations, or cash flows. Vendor Litigation – On June 21, 2 019 19 21725 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events Exclusive License Agreement – On October 3, 2019, as amended on October 17, 2019, the Company entered into an Exclusive License Agreement (the “ License Agreement 2019 1 Licensee License five five In consideration for the License, during the initial term, the Licensee agreed to pay the Company a royalty of (x) five 5 20,000,000 Gross Revenues one 4.5 30,000,000 five 5 Royalty 500,000 1 750,000 2 1,500,000 3 2,000,000 4 2,500,000 5 fifty The License Agreement provides for customary indemnification obligations between the parties and further provides that the Licensee will indemnify the Company for any claims arising out of the commercialization of the License by the Licensee or any of its subsidiaries, contractors, or sublicensees. In addition, the License Agreement provides that the Company will provide the Licensee with cost estimates for the fabrication and manufacturing of residential projects in the Company’s existing pipeline as of the date of the License Agreement, and if such projects cannot be reasonably constructed and installed at or below such estimates, then the Licensee may withhold payment of any royalty due to the Company under the License Agreement on a dollar-for-dollar basis to offset the costs above the originally estimated amounts. The Company previously disclosed, its membership interest in CPF GP 2019 1 CPF GP 302 As a result of the transactions under the License Agreement, the Company anticipates that its construction backlog will be reduced, perhaps materially Loan Agreement – On October 3, 2019, the Company entered into a Loan Agreement and Promissory Note (the “ Loan Agreement five License Agreement On October 15, 2019, the Company and CPF GP 2019 1 CPF GP Amendment Loan Agreement O n November 7, 2019, the Company and CPF GP 2019 1 CPF GP ”) entered into Second Amendment to Loan Agreement and Promissory Note (the “ Second Amendment ”), pursuant to which the parties amended that certain Loan Agreement and Promissory Note, dated October 3, 2019 (the “ Loan Agreement ”), as amended on October 15, 2019. Under the Second Amendment, the parties agreed to extend the date by which the Company is obligated to make the first installment of the principal amount of the loan (which such installment amount is equal to $500,000) to CPF GP under the Loan Agreement from October 25, 2019 to January 31, 2020 and the second installment from February 28, 2020 to April 15, 2020. CMC Right of First Refusal Agreement – On October 9, 2019, the Company entered into a Right of First Refusal Agreement (the “ Agreement CMC two fifty ROFR Rights 25,000 25,000 25,000 The Agreement also provides that CMC has engaged the Company to build and design, in the aggregate, approximately 100 residential and commercial units at 1100 Securities Purchase Agreement – On November 12 , 2019 Securities Purchase Agreement (the “ Purchase Agreement Debenture W e received net proceeds of approximately $ 326,250 110 under a Security Agreement, dated November 12, 2019, entered into with the investor (the “ Security Agreement by a security interest in all of the Company’s existing and future assets, subject to existing security interests and exceptions. The Company has the right to redeem all or a portion of the outstanding principal of the Debenture (i) prior to the maturity date without interest and with no conversion by the investor and (ii) after the maturity date at a premium of 120 24 The Debenture is convertible into shares of the Company’s common stock only upon (i) the occurrence of an Event of Default (as defined in the Debenture) or (ii) at maturity in the event any principal remains outstanding, at a conversion price equal to the lower of (x) 67.5 five ten 10 120 ten 10 5635 1,200,957 19.99 In addition, subject to limited exceptions, the investor will not have the right to convert any portion of the Debenture if the investor, together with its affiliates, would beneficially own in excess of 4.99 and under no circumstances may convert the Debenture if the investor, together with its affiliates, would beneficially own in excess of 9.99 conversion In connection with this transaction, the Company entered into a Placement Agency Agreement (the “ Placement Agency Agreement ThinkEquity, a division of Fordham Financial Management, Inc. (the “ Placement Agent one expense fee of $15,000 for aggregate out-of-pocket expenses incurred collectively in this transaction. Pursuant to the Placement Agency Agreement, the Company also agreed to grant to the Placement Agent or its designees warrants to purchase up to 9% of the aggregate number of shares of common stock underlying the Debenture, which equals 108,086 shares of common stock, at an exercise price of 110% of the closing price of the Company’s common stock on the closing date (the “ Placement Agent Warrants The Placement Agent Warrants are exercisable, in whole or in part, commencing on the issuance date and have an exercise period of five years. In the event that there is not an effective registration statement permitting for the resale of the shares underlying the Placement Agent Warrants, the Placement Agent Warrant’s shall be exercisable on a cashless basis. There are significant restrictions pursuant to FINRA Rule 5110 the shares issuable upon exercise of the Placement Agent Warrants one eighty 180 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of presentation and principals of consolidation | Basis of presentation and principals of consolidation – The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 The condensed consolidated financial statements and notes should be read in conjunction with the financial statements and notes for the year ended included in the Company’s Annual Report on Form 10-K for the year ended , as filed with the Securities and Exchange Commission on In the opinion of management, all adjustments, consisting of normal accruals, considered necessary for a fair presentation of the interim financial statements have been included. Results for the nine months ended September 30, 2019 The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, SG Building Blocks, Inc.‚ SG Residential, Inc.‚ and SG Blocks Puerto Rico, Inc. All significant intercompany accounts and transactions have been eliminated. Certain prior period amounts have been reclassified to conform to the current period’s presentation. |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements – New accounting pronouncements implemented by the Company are discussed below or in the related notes, where appropriate. In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016 - 02 , “Leases (Topic 842 )” (“ASU 2016 - 02 ”). The 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. In July 2018, the FASB issued ASU No. 2018 - 11 , “Leases (Topic 842 ): Targeted Improvements” (“ASU 2018 - 11 ”), which provides entities with an additional transition method. Under ASU 2018 - 11 , entities have the option of recognizing the cumulative effect of applying the new standard as an adjustment to beginning retained earnings in the year of adoption while continuing to present all prior periods under previous lease accounting guidance. In July 2018, the FASB also issued ASU No. 2018 - 10 , “Codification Improvements to Topic 842 , Leases” (“ASU 2018 - 10 ”), which clarifies how to apply certain aspects of ASU 2016 - 02 . The Company adopted ASU 2016 - 02 , ASU 2018 - 10 and ASU 2018 - 11 effective January 1, 2019. T he Company had no operating or finance lease agreements as of September 30, 2019 . The adoption of ASU No. 2016 - 02 did not have a material impact on the Company’s financial statements and disclosures. In June 2018, the FASB issued ASU No. 2018 07 718 2018 07 718 2018 07 718 718 2018 07 718 1 2 606 2018 07 The adoption of ASU No. 2018 07 Recently issued accounting pronouncements not yet adopted – In January 2017, the FASB issued ASU No. 2017 04 2017 04 2 2017 04 In August 2018, the FASB issued ASU No. 2018 13 2018 13 820 3 2018 13 2018 13 |
Accounting estimates | Accounting estimates |
Operating cycle | Operating cycle – six twelve In some instances, the length of the contract may exceed twelve one |
Revenue recognition | Revenue reco – The Company applies recognition of revenue over time, which is similar to the method the Company applied under previous guidance (i.e., percentage of completion). The Company determines, 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 recognition of revenue aligns 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 ( 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; and ( 5 Recognize revenue as performance obligations are satisfied. 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. On October 3 2019, the Company entered into an Exclusive License Agreement (“ELA” ) pursuant to which it granted an exclusive license for its technology as outlined in the ELA. See Note 13 Under the ELA, the Company will receive royalty payments based upon gross revenues earned by the licensee for commercialize products within the field of design and project management platforms for residential use, including single-family residences and multi-family residences, but excluding military housing. The Company has determined that the ELA grants the licensee a right to access the Company’s intellectual property throughout the license period (or its remaining economic life, if shorter), and thus recognizes revenue over time as the licensee recognizes revenue and the Company has the right to payment of royalties. No revenue has been recognized under the ELA for the nine months ended September 30, 2019 Disaggregation of Revenues The Company’s revenues are principally derived from construction and engineering contracts related to Modules. The Company’s contracts are with many different customers in numerous industries. The following tables provide furt her disaggregation of the Company’s revenues by categories: Three Months Ended September 30, Revenue by Customer Type 2019 2018 Multi-Family $ (18,013 ) — % $ 47,026 2 % Office 4,424 2 % 445,992 22 % Retail 195,421 97 % 955,667 46 % School — — % 602,641 29 % Special Use — — % 30,990 1 % Other 2,694 1 % 509 — % Total revenue by customer type $ 184,526 100 % $ 2,082,825 100 % Nine Months Ended September 30, Revenue by Customer Type 2019 2018 Multi-Family $ 94,178 4 % $ 257,840 4 % Office 1,212,321 46 % 1,039,348 18 % Retail 1,332,805 50 % 1,487,587 25 % School — — % 2,462,880 42 % Special Use 6,812 — % 667,074 11 % Other 1,442 — % 17,421 — % Total revenue by customer type $ 2,647,558 100 % $ 5,932,150 100 % Contract Assets and Contract Liabilitie 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 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 customers exceed revenues recognized under the cost-to-cost measure of progress. Contract liabilities additionally include advanced payments from 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 “billings in excess of costs and estimated earnings on uncompleted contracts”. Although the Company believes it 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. |
Cash and cash equivalents | Cash and cash equivalents – The Company considers cash and cash equivalents to include all short-term, highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three September 30, 2019 $ as of December 31, 2018 . |
Short-term investment | Short-term investment – The Company classifies any investment with a maturity greater than six months one no September 30, 2019 December 31, 2018 |
Accounts receivable and Allowance for Doubtful Accounts | Accounts receivable and allowance for doubtful accounts – Accounts receivable are receivables generated from sales to customers and progress billings on performance type contracts. Amounts included in accounts receivable are deemed to be collectible within the Company’s operating cycle. The Company recognizes account receivable at invoiced amounts. The allowance for doubtful accounts reflects the Company's best estimate of probable losses inherent in the accounts receivable balances. Management provides an allowance for doubtful accounts based on the Company’s historical losses, specific customer circumstances, and general economic conditions. Periodically, management reviews accounts receivable and adjusts the allowance based on current circumstances and charges off uncollectible receivables when all attempts to collect have been exhausted and the prospects for recovery are remote. Recoveries are recognized when they are received. Actual collection losses may differ from the Company’s estimates and could be material to its consolidated financial position, result of operations, and cash flows. |
Inventory | Inventory – Raw construction materials (primarily shipping containers) are valued at the lower of cost (first-in, first-out method) or net realizable value. Finished goods and work-in-process inventories are valued at the lower of cost or net realizable value, using the specific identification method. There was no September 30, 2019 December 31, 2018 |
Goodwill | Goodwill – The Company performs its impairment test of goodwill at the reporting unit level each fiscal year, or more frequently if events or circumstances change that would more likely than not reduce the fair value of its reporting unit below its carrying values. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, management conducts a two December 31, 2018 |
Intangible assets | Intangible assets – Intangible assets represent the preliminary assets identified upon emergence from bankruptcy and consist of $ 2,766,000 20 1,113,000 2.5 28,820 5,300 5 December 31, 2018 September 30, 2019 2018 The amortization expense for the three months ended September 30, 2019 and 2018 was $ 36,281 and $ 147,399, respectively. The amortization expense for the nine months ended September 30, 2019 and 2018 was $ and $ , respectively. The estimated amortization expense for the successive five years is as follows: For the year ended December 31, 2019 $ 36,281 2020 145,124 2021 145,124 2022 140,801 2023 139,007 Thereafter 1,728,749 $ 2,335,086 |
Property, plant and equipment | Property, plant and equipment – Property, plant and equipment is stated at cost. Depreciation is computed using the straight-line method over the estimated lives of each asset. Estimated useful life for significant classes of assets are as follows: computer and software 3 to 5 years and equipment |
Common stock purchase warrants and other derivative financial instruments | Common stock purchase warrants and other derivative financial instruments – The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) provide a choice of net-cash settlement or settlement in the Company’s own shares (physical settlement or net-share settlement) providing that such contracts are indexed to the Company’s own stock. The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if any event occurs and if that event is outside the Company’s control) or (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses classification of common stock purchase warrants and other free standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities or equity is required. |
Fair value measurements | Fair value measurements – Financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, are carried at cost, which the Company believes approximates fair value due to the short-term nature of these instruments. 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 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). |
Share-based payments | Share-based payments – The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, including non-employee directors, the fair value of a stock option award is measured on the grant date. The fair value amount is then recognized over the period services are required to be provided in exchange for the award, usually the vesting period. The Company recognizes stock-based compensation expense on a graded-vesting basis over the requisite service period for each separately vesting tranche of each award. Stock-based compensation expense to employees and all directors is reported within payroll and related expenses in the consolidated statements of operations. Stock-based compensation expense to non-employees is reported within marketing and business development expense in the consolidated statements of operations. |
Income taxes | Income taxes – The Company accounts for income taxes utilizing the asset and liability approach. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for income taxes generally represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from the differences between the financial and tax bases of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. 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. |
Concentrations of credit risk | Concentrations of credit risk – Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents. The Company places its cash with high credit quality institutions. At times, such amounts may be in excess of the FDIC insurance limits. The Company has not experienced any losses in its account and believes that it is not exposed to any significant credit risk on the account. 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 September 30, 2019 December 31, 2018 76 Revenue relating to two and four three months September 30, 2019 2018 Revenue relating to and customers represented approximately % and % of the Company’s total revenue for the nine months ended and 2018 , respectively. Cost of revenue relating to two and four vendors represented approximately % and % of the Company’s total cost of revenue for the three months ended and 2018 , respectively. nine months September 30, 2019 2018 |
Liquidity (Tables)
Liquidity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Liquidity [Member] | |
Liquidity [Line Items] | |
Schedule of expects to satisfy remaining unsatisfied performance obligation | 2019 Within 1 $ 4,250,770 1 2 13,536,400 Thereafter — Total Backlog $ 17,787,170 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of disaggregation of revenues by categories | Three Months Ended September 30, Revenue by Customer Type 2019 2018 Multi-Family $ (18,013 ) — % $ 47,026 2 % Office 4,424 2 % 445,992 22 % Retail 195,421 97 % 955,667 46 % School — — % 602,641 29 % Special Use — — % 30,990 1 % Other 2,694 1 % 509 — % Total revenue by customer type $ 184,526 100 % $ 2,082,825 100 % Nine Months Ended September 30, Revenue by Customer Type 2019 2018 Multi-Family $ 94,178 4 % $ 257,840 4 % Office 1,212,321 46 % 1,039,348 18 % Retail 1,332,805 50 % 1,487,587 25 % School — — % 2,462,880 42 % Special Use 6,812 — % 667,074 11 % Other 1,442 — % 17,421 — % Total revenue by customer type $ 2,647,558 100 % $ 5,932,150 100 % |
Schedule of estimated amortization expense of intangible assets | For the year ended December 31, 2019 $ 36,281 2020 145,124 2021 145,124 2022 140,801 2023 139,007 Thereafter 1,728,749 $ 2,335,086 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounts Receivable [Abstract] | |
Schedule of accounts receivable | September 30, 2019 December 31, 2018 Billed: Block sales $ — $ 14,723 Construction services 1,306,567 1,619,498 Engineering services 333,230 400,877 Retainage receivable 544,911 543,417 Other receivable 37,526 7,706 Total gross receivables 2,222,234 2,586,221 Less: allowance for doubtful accounts ( 1 (785,895 ) (839,895 ) Total net receivables $ 1,436,339 $ 1,746,326 ( 1 The allowance for doubtful accounts is primarily due to unpaid billings on a contract that is currently in dispute. |
Contract Assets and Contract _2
Contract Assets and Contract Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Contract Assets and Contract Liabilities [Abstract] | |
Schedule of costs and estimated earnings on uncompleted contracts | September 30, 2019 December 31, 2018 Costs incurred on uncompleted contracts $ 228,461 $ 11,307,975 Estimated earnings to date on uncompleted contracts 79,852 838,615 Gross contract assets 308,313 12,146,590 Less: billings to date (540,715 ) (13,221,152 ) Net contract assets (liabilities) $ (232,402 ) $ (1,074,562 ) |
Schedule of costs included in condensed consolidated balance sheets | September 30, 2019 December 31, 2018 Costs and estimated earnings in excess of billings on uncompleted contracts $ 8,689 $ 260,325 Billings in excess of costs and estimated earnings on uncompleted contracts (241,091 ) (1,334,887 ) Net contract assets (liabilities) $ (232,402 ) $ (1,074,562 ) |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | September 30, 2019 December 31, 2018 Computer equipment and software $ 18,862 $ 39,193 Furniture and other equipment 1,885 63,479 Property, plant and equipment 20,747 102,672 Less: accumulated depreciation (8,076 ) (31,335 ) Property, plant and equipment, net $ 12,671 $ 71,337 |
Construction Backlog (Tables)
Construction Backlog (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Schedule of backlog of signed construction and engineering contracts | September 30, 2019 December 31, 2018 Balance - beginning of period $ 97,657,379 $ 76,659,029 New contracts and change orders during the period, net 17,474,684 58,805,877 Adjustments and cancellations, net (94,697,335 ) (29,616,815 ) Subtotal 20,434,728 105,848,091 Less: contract revenue earned during the period (2,647,558 ) (8,190,712 ) Balance - end of period $ 17,787,170 $ 97,657,379 |
Construction Backlog [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Schedule of expects to satisfy remaining unsatisfied performance obligation | 2019 Within 1 $ 4,250,770 1 2 13,536,400 Thereafter — Total Backlog $ 17,787,170 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Compensation [Abstract] | |
Schedule of stock-based compensation expense included in statement of operations | Three September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Payroll and related expenses $ 139,402 $ 117,102 $ 472,014 $ 282,416 Marketing and business development expenses 3,375 — 10,125 — Total $ 142,777 $ 117,102 $ 482,139 $ 282,416 Three September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Stock options $ 40,098 $ 117,102 $ 112,293 $ 282,416 Restricted stock units 102,679 — 369,846 — Total $ 142,777 $ 117,102 $ 482,139 $ 282,416 |
Schedule of fair value stock-based option awards granted using Black-Scholes option valuation model | 2019 2018 Expected dividend yield — % — % Expected stock volatility 68.35 % 25.70 % Risk-free interest rate 2.44 % 2.56 % Expected life (in years) 3 5 |
Schedule of employee stock option activity | Shares Weighted Average Fair Value Per Share Weighted Average Exercise Price Per Share Weighted Average Remaining Terms (in years) Aggregate Intrinsic Value Outstanding – December 31, 2018 1,105,059 $ 1.24 $ 4.06 8.41 $ — Granted — — — — — Exercised — — — — — Cancelled (25,000 ) — — — — Outstanding – September 30, 2019 1,080,059 1.24 4.05 7.64 $ — Exercisable – December 31, 2018 949,355 1.23 4.00 8.30 — Exercisable – September 30, 2019 1,024,356 $ 1.24 $ 4.04 7.62 $ — |
Schedule of RSU activities | Number of Shares Non-vested balance at January 1, 2019 22,364 Granted 508,349 Vested (27,792 ) Forfeited/Expired (56,779 ) Non-vested balance at September 30, 2019 446,142 |
Liquidity (Details)
Liquidity (Details) | Sep. 30, 2019USD ($) |
Liquidity [Line Items] | |
Total Backlog | $ 17,787,170 |
Within 1 year [Member] | |
Liquidity [Line Items] | |
Total Backlog | 4,250,770 |
1 to 2 years [Member] | |
Liquidity [Line Items] | |
Total Backlog | 13,536,400 |
Thereafter [Memebr] | |
Liquidity [Line Items] | |
Total Backlog |
Liquidity (Details Textual)
Liquidity (Details Textual) - USD ($) | 1 Months Ended | ||||||
Nov. 30, 2019 | Apr. 30, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Oct. 31, 2018 | Dec. 31, 2017 | |
Liquidity [Line Items] | |||||||
Cash and cash equivalents | $ 1,953 | $ 1,368,395 | $ 2,913,397 | $ 4,870,824 | |||
Cash backlog | $ 17,800,000 | ||||||
Net proceeds | $ 1,136,015 | ||||||
Bid price, per share | $ 1 | ||||||
Minimum bid price | 1 | ||||||
Closing bid price | $ 1 | ||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | |||||||
Liquidity [Line Items] | |||||||
Net proceeds from issuance of debt | $ 326,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue by customer type | $ 184,526 | $ 2,082,825 | $ 2,647,558 | $ 5,932,150 |
Total revenue by customer type, percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Multi-Family [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue by customer type | $ (18,013) | $ 47,026 | $ 94,178 | $ 257,840 |
Total revenue by customer type, percentage | 2.00% | 4.00% | 4.00% | |
Office [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue by customer type | $ 4,424 | $ 445,992 | $ 1,212,321 | $ 1,039,348 |
Total revenue by customer type, percentage | 2.00% | 22.00% | 46.00% | 18.00% |
Retail [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue by customer type | $ 195,421 | $ 955,667 | $ 1,332,805 | $ 1,487,587 |
Total revenue by customer type, percentage | 97.00% | 46.00% | 50.00% | 25.00% |
School [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue by customer type | $ 602,641 | $ 2,462,880 | ||
Total revenue by customer type, percentage | 29.00% | 42.00% | ||
Special Use [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue by customer type | $ 30,990 | $ 6,812 | $ 667,074 | |
Total revenue by customer type, percentage | 1.00% | 11.00% | ||
Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue by customer type | $ 2,694 | $ 509 | $ 1,442 | $ 17,421 |
Total revenue by customer type, percentage | 1.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) | Sep. 30, 2019USD ($) |
Summary of Significant Accounting Policies [Abstract] | |
2019 | $ 36,281 |
2020 | 145,124 |
2021 | 145,124 |
2022 | 140,801 |
2023 | 139,007 |
Thereafter | 1,728,749 |
Total | $ 2,335,086 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details Textual) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2019USD ($)VendorsCustomer | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($)VendorsCustomer | Sep. 30, 2019USD ($)VendorsCustomer | Sep. 30, 2018USD ($)VendorsCustomer | Dec. 31, 2018USD ($)Customer | Oct. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Summary of Significant Accounting Policies (Textual) | ||||||||
Revenue recognized under the agreement | $ 184,526 | $ 2,082,825 | $ 2,647,558 | $ 5,932,150 | ||||
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, included in intangible assets is $ 28,820 of trademarks and $5,300 of website 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. | |||||||
Inventory | 0 | $ 0 | $ 0 | $ 0 | ||||
Goodwill impairment | 0 | |||||||
Accumulated amortization | 1,578,034 | 1,321,604 | 1,578,034 | 1,321,604 | ||||
Amortization expense | 36,281 | $ 147,399 | 108,843 | $ 442,031 | ||||
Short-term investment | 0 | 0 | 0 | 0 | ||||
Cash and cash equivalents | $ 1,953 | $ 1,368,395 | 1,953 | $ 1,368,395 | $ 2,913,397 | $ 4,870,824 | ||
Exclusive License Agreement [Member] | CPF MF 2019-1 LLC [Member] | ||||||||
Summary of Significant Accounting Policies (Textual) | ||||||||
Revenue recognized under the agreement | $ 0 | |||||||
Computer and software [Member] | Minimum [Member] | ||||||||
Summary of Significant Accounting Policies (Textual) | ||||||||
Estimated useful lives | 3 years | |||||||
Computer and software [Member] | Maximum [Member] | ||||||||
Summary of Significant Accounting Policies (Textual) | ||||||||
Estimated useful lives | 5 years | |||||||
Equipment [Member] | Minimum [Member] | ||||||||
Summary of Significant Accounting Policies (Textual) | ||||||||
Estimated useful lives | 5 years | |||||||
Equipment [Member] | Maximum [Member] | ||||||||
Summary of Significant Accounting Policies (Textual) | ||||||||
Estimated useful lives | 7 years | |||||||
Accounts receivable [Member] | ||||||||
Summary of Significant Accounting Policies (Textual) | ||||||||
Concentration risk, percentage | 92.00% | 76.00% | ||||||
Number of customers | Customer | 2 | 2 | ||||||
Revenue [Member] | ||||||||
Summary of Significant Accounting Policies (Textual) | ||||||||
Concentration risk, percentage | 94.00% | 80.00% | 87.00% | 41.00% | ||||
Number of customers | Customer | 2 | 2 | 2 | 1 | ||||
Cost of revenue [Member] | ||||||||
Summary of Significant Accounting Policies (Textual) | ||||||||
Concentration risk, percentage | 93.00% | 85.00% | 94.00% | 52.00% | ||||
Number of vendors | Vendors | 2 | 4 | 4 | 1 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | |
Schedule of accounts receivable | |||
Total gross receivables | $ 2,222,234 | $ 2,586,221 | |
Less: allowance for doubtful accounts | (785,895) | (839,895) | [1] |
Total net receivables | 1,436,339 | 1,746,326 | |
Block sales [Member] | |||
Schedule of accounts receivable | |||
Total gross receivables | 14,723 | ||
Construction services [Member] | |||
Schedule of accounts receivable | |||
Total gross receivables | 1,306,567 | 1,619,498 | |
Engineering services [Member] | |||
Schedule of accounts receivable | |||
Total gross receivables | 333,230 | 400,877 | |
Retainage receivable [Member] | |||
Schedule of accounts receivable | |||
Total gross receivables | 544,911 | 543,417 | |
Other receivable [Member] | |||
Schedule of accounts receivable | |||
Total gross receivables | $ 37,526 | $ 7,706 | |
[1] | The allowance for doubtful accounts is primarily due to unpaid billings on a contract that is currently in dispute. |
Accounts Receivable (Details Te
Accounts Receivable (Details Textual) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | ||
Accounts Receivable [Abstract] | ||||
Allowances for doubtful accounts | $ 785,895 | $ 839,895 | [1] | |
Provision for doubtful accounts | 0 | 810,580 | ||
Collection of doubtful accounts | 54,000 | |||
Accounts receivable write offs | $ 0 | $ 4,920 | ||
[1] | The allowance for doubtful accounts is primarily due to unpaid billings on a contract that is currently in dispute. |
Contract Assets and Contract _3
Contract Assets and Contract Liabilities (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Schedule of costs and estimated earnings on uncompleted contracts | ||
Costs incurred on uncompleted contracts | $ 228,461 | $ 11,307,975 |
Estimated earnings to date on uncompleted contracts | 79,852 | 838,615 |
Gross contract assets | 308,313 | 12,146,590 |
Less: billings to date | (540,715) | (13,221,152) |
Net contract assets (liabilities) | $ (232,402) | $ (1,074,562) |
Contract Assets and Contract _4
Contract Assets and Contract Liabilities (Details 1) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Schedule of costs included in condensed consolidated balance sheets | ||
Costs and estimated earnings in excess of billings on uncompleted contracts | $ 8,689 | $ 260,325 |
Billings in excess of costs and estimated earnings on uncompleted contracts | (241,091) | (1,334,887) |
Net contract assets (liabilities) | $ (232,402) | $ (1,074,562) |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Schedule of company's equipment | ||
Property, plant and equipment | $ 20,747 | $ 102,672 |
Less: accumulated depreciation | (8,076) | (31,335) |
Property, plant and equipment, net | 12,671 | 71,337 |
Computer equipment and software [Member] | ||
Schedule of company's equipment | ||
Property, plant and equipment | 18,862 | 39,193 |
Furniture and other equipment [Member] | ||
Schedule of company's equipment | ||
Property, plant and equipment | $ 1,885 | $ 63,479 |
Property, Plant and Equipment_3
Property, Plant and Equipment (Details Textual) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Property, Plant and Equipment (Textual) | ||
Depreciation expense | $ 8,697 | $ 3,227 |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - shares | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Restricted stock units [Member] | ||
Net Income (Loss) Per Share (Textual) | ||
Warrants to purchase shares of common stock | 473,933 | |
Stock options [Member] | ||
Net Income (Loss) Per Share (Textual) | ||
Warrants to purchase shares of common stock | 1,080,059 | 1,188,392 |
Warrants [Member] | ||
Net Income (Loss) Per Share (Textual) | ||
Warrants to purchase shares of common stock | 1,063,775 | 86,250 |
Construction Backlog (Details)
Construction Backlog (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Construction Backlog [Abstract] | ||
Balance - beginning of period | $ 97,657,379 | $ 76,659,029 |
New contracts and change orders during the period | 17,474,684 | 58,805,877 |
Adjustments and cancellations, net | (94,697,335) | (29,616,815) |
Subtotal | 20,434,728 | 105,848,091 |
Less: contract revenue earned during the period | (2,647,558) | (8,190,712) |
Balance - end of period | $ 17,787,170 | $ 97,657,379 |
Construction Backlog (Details 1
Construction Backlog (Details 1) | Sep. 30, 2019USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total Backlog | $ 17,787,170 |
Within 1 year [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total Backlog | 4,250,770 |
1 to 2 years [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total Backlog | 13,536,400 |
Thereafter [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total Backlog |
Construction Backlog (Details T
Construction Backlog (Details Textual) | 3 Months Ended | ||
Sep. 30, 2019USD ($)Item | Dec. 31, 2018USD ($) | Sep. 30, 2017USD ($)Number | |
Construction Backlog (Textual) | |||
Number of large contracts | Number | 1 | ||
Construction backlog contract amount | $ 17,000,000 | ||
Total Backlog | $ 17,787,170 | ||
Exclusive License Agreement [Member] | |||
Construction Backlog (Textual) | |||
Number of contracts removed out of backlog | Item | 2 | ||
Total Backlog | $ 2,400,000 | ||
Contract One [Member] | Exclusive License Agreement [Member] | |||
Construction Backlog (Textual) | |||
Construction backlog contract amount | 55,000,000 | ||
Contract Two [Member] | Exclusive License Agreement [Member] | |||
Construction Backlog (Textual) | |||
Construction backlog contract amount | 15,000,000 | ||
Moved Contract [Member] | |||
Construction Backlog (Textual) | |||
Construction backlog contract amount | $ 25,000,000 | $ 27,500,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 1 Months Ended | 9 Months Ended | ||||||
Aug. 31, 2019 | Apr. 30, 2019 | Jul. 31, 2017 | Jun. 30, 2017 | Sep. 30, 2019 | Jun. 05, 2019 | Jun. 04, 2019 | Dec. 31, 2018 | |
Stockholders' Equity (Textual) | ||||||||
Common stock, shares authorized | 25,000,000 | 25,000,000 | 300,000,000 | 300,000,000 | ||||
Purchase Agreement [Member] | ||||||||
Stockholders' Equity (Textual) | ||||||||
Issued shares of common stock | 847,750 | |||||||
Common stock, per share | $ 1.10 | |||||||
Common stock purchase warrants | 847,750 | |||||||
Issuance costs of offering | $ 379,816 | |||||||
Issued warrants | 84,775 | |||||||
2016 Debentures [Member] | ||||||||
Stockholders' Equity (Textual) | ||||||||
Common stock issued upon conversion | 516,667 | |||||||
IPO [Member] | ||||||||
Stockholders' Equity (Textual) | ||||||||
Issued shares of common stock | 225,000 | 1,500,000 | ||||||
Common stock, per share | $ 5 | $ 5 | ||||||
Issuance costs of offering | $ 176,771 | $ 1,388,615 | ||||||
Issued warrants | 75,000 | |||||||
Warrants issued | $ 55,475 | |||||||
Warrants to purchase of common stock | 11,250 | |||||||
Fair value of warrants | $ 8,321 | |||||||
Common stock issued under the Underwriting Agreement [Member] | ||||||||
Stockholders' Equity (Textual) | ||||||||
Issued shares of common stock | 900,000 | |||||||
Common stock, per share | $ 0.85 | |||||||
Common stock purchase warrants | 45,000 | |||||||
Issuance costs of offering | $ 181,695 | |||||||
New Preferred Stock [Member] | ||||||||
Stockholders' Equity (Textual) | ||||||||
Common stock issued upon conversion | 1,801,670 |
Warrants (Details)
Warrants (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |
Apr. 30, 2019 | Sep. 30, 2019 | Aug. 31, 2019 | |
Warrants (Textual) | |||
Common stock exercise price | $ 0.42 | ||
Common stock issued under the Underwriting Agreement [Member] | |||
Warrants (Textual) | |||
Common stock purchase warrants | 45,000 | ||
Exercise price | $ 1.0625 | ||
October 29, 2019 and expire October 29, 2024 [Member] | |||
Warrants (Textual) | |||
Aggregate purchase warrants | 847,750 | ||
Common stock exercise price | $ 1.375 | ||
October 29, 2019 and expire April 24, 2024 [Member] | |||
Warrants (Textual) | |||
Aggregate purchase warrants | 84,775 | ||
Common stock exercise price | $ 1.375 | ||
Warrants [Member] | |||
Warrants (Textual) | |||
Aggregate purchase warrants | 86,250 | ||
Common stock exercise price | $ 6.25 | ||
Maturity date | Jun. 21, 2023 | ||
Fair value of warrants | $ 63,796 |
Share-based Compensation (Detai
Share-based Compensation (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Stock-Based Compensation Expense | ||||
Total | $ 142,777 | $ 117,102 | $ 482,139 | $ 282,416 |
Payroll and related expenses [Member] | ||||
Stock-Based Compensation Expense | ||||
Total | 139,402 | 117,102 | 472,014 | 282,416 |
Marketing and business development expenses [Member] | ||||
Stock-Based Compensation Expense | ||||
Total | 3,375 | 10,125 | ||
Restricted stock units [Member] | ||||
Stock-Based Compensation Expense | ||||
Total | 102,679 | 369,846 | ||
Stock options [Member] | ||||
Stock-Based Compensation Expense | ||||
Total | $ 40,098 | $ 117,102 | $ 112,293 | $ 282,416 |
Share-based Compensation (Det_2
Share-based Compensation (Details 1) - Employee Stock Option [Member] | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend yield | ||
Expected stock volatility | 68.35% | 25.70% |
Risk-free interest rate | 2.44% | 2.56% |
Expected life | 3 years | 5 years |
Share-based Compensation (Det_3
Share-based Compensation (Details 2) - Stock options [Member] - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares Outstanding, Beginning balance | 1,105,059 | |
Shares, Granted | ||
Shares, Exercised | ||
Shares, Cancelled | (25,000) | |
Shares Outstanding, Ending balance | 1,080,059 | 1,105,059 |
Shares, Exercisable | 1,024,356 | 949,355 |
Weighted Average Fair Value Per Share, Outstanding, Beginning balance | $ 1.24 | |
Weighted Average Fair Value Per Share, Granted | ||
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 | $ 1.24 |
Weighted Average Fair Value Per Share, Exercisable | 1.24 | 1.23 |
Weighted Average Exercise Price Per Share, Outstanding, Beginning balance | 4.06 | |
Weighted Average Exercise Price Per Share, Granted | ||
Weighted Average Exercise Price Per Share, Exercised | ||
Weighted Average Exercise Price Per Share, Cancelled | ||
Weighted Average Exercise Price Per Share, Outstanding, Ending balance | 4.05 | 4.06 |
Weighted Average Exercise Price Per Share, Exercisable | $ 4.04 | $ 4 |
Weighted Average Remaining Terms (in years), Outstanding, Beginning balance | 8 years 4 months 28 days | |
Weighted Average Remaining Terms (in years), Outstanding, Ending balance | 7 years 7 months 20 days | |
Weighted Average Remaining Terms (in years), Exercisable | 7 years 7 months 13 days | 8 years 3 months 18 days |
Aggregate intrinsic Value, Outstanding, Beginning balance | ||
Aggregate Intrinsic Value, Outstanding, Ending balance | ||
Aggregate Intrinsic Value, Exercisable |
Share-based Compensation (Det_4
Share-based Compensation (Details 3) - Restricted stock units [Member] | 9 Months Ended |
Sep. 30, 2019shares | |
Share-based Compensation [Abstract] | |
Number of Shares, Non-vested beginning | 22,364 |
Number of Shares, Granted | 508,349 |
Number of Shares, Vested | (27,792) |
Number of Shares, Forfeited/Expired | (56,779) |
Number of Shares, Non-vested ending | 446,142 |
Share-based Compensation (Det_5
Share-based Compensation (Details Textual) | Jun. 05, 2019$ / sharesshares | Mar. 22, 2019Employee$ / sharesshares | Jul. 26, 2018$ / sharesshares | Feb. 26, 2019$ / sharesshares | Mar. 31, 2018USD ($)Employee$ / sharesshares | Sep. 30, 2017$ / sharesshares | Oct. 26, 2016shares | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2018USD ($) |
Stock Options and Grants (Textual) | |||||||||||
Recognized stock-based compensation expense | $ | $ 40,098 | $ 117,102 | $ 112,293 | $ 282,416 | |||||||
Unrecognized compensation costs | $ | $ 51,619 | $ 51,619 | |||||||||
Fair value of stock price | $ 0.42 | $ 0.42 | |||||||||
Options vested, description | These options vest in equal installments over a two-year and three-year period and will fully vest by the end of March 31, 2021. | ||||||||||
Fair value of options | $ | $ 320,000 | ||||||||||
Number of employees | Employee | 6 | ||||||||||
Restricted Stock [Member] | |||||||||||
Stock Options and Grants (Textual) | |||||||||||
Restricted stock or options issued, shares | shares | 183,780 | 314,058 | 10,514 | ||||||||
Recognized stock-based compensation expense | $ | $ 102,679 | $ 0 | $ 369,846 | 0 | |||||||
Recognized stock-based compensation expense accrued | $ | $ 162,941 | $ 0 | |||||||||
Fair value of stock price | $ 2.70 | ||||||||||
Options vested, description | Restricted stock units granted to Mr. Galvin, Mr. Armstrong, Mr. Shetty, and an aggregate of six employees and one consultant of 122,785, 15,432, 114,575 and an aggregate of 61,266, respectively, vest in installments over either a one-year, two-year, three-year and four-year period and will fully vest by the end of December 31, 2022. The fair value of these units upon issuance amounted to $847,957. | ||||||||||
Number of employees | Employee | 6 | ||||||||||
Advisory Agreement [Member] | |||||||||||
Stock Options and Grants (Textual) | |||||||||||
Granted options to purchase | shares | 50,000 | ||||||||||
Exercise price | $ 6.25 | ||||||||||
Paul Galvin [Member] | |||||||||||
Stock Options and Grants (Textual) | |||||||||||
Granted options to purchase | shares | 82,154 | ||||||||||
Exercise price | $ 4.61 | ||||||||||
Mahesh Shetty [Member] | |||||||||||
Stock Options and Grants (Textual) | |||||||||||
Granted options to purchase | shares | 81,342 | ||||||||||
Exercise price | $ 4.61 | ||||||||||
Employees [Member] | |||||||||||
Stock Options and Grants (Textual) | |||||||||||
Granted options to purchase | shares | 86,504 | ||||||||||
Exercise price | $ 4.61 | ||||||||||
Non-employee Director [Member] | Restricted Stock [Member] | |||||||||||
Stock Options and Grants (Textual) | |||||||||||
Fair value of stock price | $ 0.82 | $ 2.94 | |||||||||
Award granted (in shares) | shares | 27,955 | ||||||||||
Fair value of award (in dollars per share) | $ 5.36 | ||||||||||
Non Employee Director One [Member] | Restricted Stock [Member] | |||||||||||
Stock Options and Grants (Textual) | |||||||||||
Fair value of stock price | $ 2.76 | ||||||||||
2016 Plan [Member] | |||||||||||
Stock Options and Grants (Textual) | |||||||||||
Restricted stock or options issued, shares | shares | 500,000 | ||||||||||
Common stock available for issuance, shares | shares | 2,500,000 | 893,205 | 893,205 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Jun. 21, 2019 | |
Teton Buildings, LLC [Member] | ||
Other Commitments [Line Items] | ||
Damages value from Teton Buildings, LLC | $ 2,100,000 | |
EDI International, PC [Member] | ||
Other Commitments [Line Items] | ||
Recovery of damages | $ 1,274,752 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] | Nov. 12, 2019USD ($)shares | Nov. 07, 2019USD ($) | Oct. 15, 2019USD ($) | Oct. 09, 2019USD ($)Itemshares | Oct. 03, 2019USD ($) |
Exclusive License Agreement [Member] | CPF MF 2019-1 LLC [Member] | |||||
Subsequent Event [Line Items] | |||||
Term of agreement | 5 years | ||||
Renewal term of agreement | 5 years | ||||
Royalty payment terms with licensee | Licensee agreed to pay the Company a royalty of (x) five percent (5%) on the first $20,000,000 of gross revenues derived from the Licensee’s commercialization of the License (net of customary discounts, sales taxes, delivery charges, and amounts for returns) (the “Gross Revenues”), (y) four and one-half percent (4.5%) on the next $30,000,000 of Gross Revenues, and (z) five percent (5%) on all Gross Revenues thereafter (collectively, the “Royalty”), subject to the following minimum royalty payments determined on a cumulative basis during the initial term: $500,000 in year 1, $750,000 in year 2, $1,500,000 in year 3, $2,000,000 in year 4, and $2,500,000 in year 5. | ||||
Percentage of sublicensing payments | 50.00% | ||||
Membership interest, cash contribution | $ 1,300,000 | ||||
Loan Agreement and Promissory Note [Member] | CPF MF 2019-1 LLC [Member] | |||||
Subsequent Event [Line Items] | |||||
Debt principal amount | $ 750,000 | ||||
Annual interest rate of note | 5.00% | ||||
First installment of principal amount | $ 500,000 | ||||
Second installment of principal amount | $ 250,000 | ||||
Amendment to Loan Agreement and Promissory Note [Member] | CPF MF 2019-1 LLC [Member] | |||||
Subsequent Event [Line Items] | |||||
First installment of principal amount | $ 500,000 | ||||
Second Amendment to Loan Agreement and Promissory Note [Member] | CPF MF 2019-1 LLC [Member] | |||||
Subsequent Event [Line Items] | |||||
First installment of principal amount | $ 500,000 | ||||
Right of First Refusal Agreement | CMC Development LLC [Member] | |||||
Subsequent Event [Line Items] | |||||
Term of agreement | 2 years | ||||
Percentage rights to develop project | 50.00% | ||||
Number of residential properties | Item | 100 | ||||
Total cost of project | $ 15,000,000 | ||||
Right of First Refusal Agreement | CMC Development LLC [Member] | Restricted Stock [Member] | |||||
Subsequent Event [Line Items] | |||||
Number of common stock issued | shares | 50,000 | ||||
Description of shares to be vested | 25,000 shares will vest and be issued on September 30, 2020 and the remaining 25,000 shares will vest and be issued on September 30, 2021, unless the Agreement is earlier terminated. In the event that the Agreement is earlier terminated, CMC will still be entitled to receive the entire amount of such restricted stock that has vested as of such earlier termination date, but in no event less than 25,000 shares of such restricted stock | ||||
Securities Purchase Agreement [Member] | |||||
Subsequent Event [Line Items] | |||||
Debt principal amount | $ 480,770 | ||||
Proceeds from issuance of debt | $ 375,000 | ||||
Percentage of original issue discount | 22.00% | ||||
Description for redemption of debentures | The Company has the right to redeem all or a portion of the outstanding principal of the Debenture (i) prior to the maturity date without interest and with no conversion by the investor and (ii) after the maturity date at a premium of 120%, and with interest accruing at 24% from the maturity date. | ||||
Terms of conversion of debt | The Debenture is convertible into shares of the Company’s common stock only upon (i) the occurrence of an Event of Default (as defined in the Debenture) or (ii) at maturity in the event any principal remains outstanding, at a conversion price equal to the lower of (x) 67.5% of the lowest daily VWAPs of the common stock during the five consecutive trading days immediately preceding the Event of Default or date of maturity or (y) if the Debenture is not fully paid as of the Maturity, the lowest daily VWAP during the ten (10) consecutive trading days immediately preceding the date of the applicable Conversion, and based on a conversion amount determined by the product of (x) the portion of the principal and accrued interest to be converted and (y) 120% or (y) if the Debenture is not fully paid as of the Maturity Date and no conversions have been effected under the Debenture, the lowest daily VWAP during the ten (10) consecutive Trading Days immediately preceding the date of the applicable Conversion; provided, however, that the Company will not issue any shares of common stock upon conversion of the Debenture if the investor would exceed the aggregate number of shares of common stock which the Company may issue upon conversion or exercise (as the case may be) of the Debenture without breaching the Company’s obligations under the rules or regulations of the Nasdaq Stock Market, including rules related to the aggregate of offerings under NASDAQ Listing Rule 5635(d) (which currently limit such issuance to 1,200,957 shares, which is 19.99% of the Company’s outstanding shares as of the date hereof). | ||||
Description for terms for convesion feature of common stock | subject to limited exceptions, the investor will not have the right to convert any portion of the Debenture if the investor, together with its affiliates, would beneficially own in excess of 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to its conversion and under no circumstances may convert the Debenture if the investor, together with its affiliates, would beneficially own in excess of 9.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to its conversion. | ||||
Placement Agency Agreement [Member] | Fordham Financial Management, Inc. [Member] | |||||
Subsequent Event [Line Items] | |||||
Percentage for placement agent cash fee | 9.00% | ||||
Placement agent fee | $ 15,000 | ||||
Percentage of warrants | 9.00% | ||||
Conversion of stock | shares | 108,086 | ||||
Percentage of exercise price of closing price | 110.00% | ||||
Warrants exercise period | 5 years |