Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 04, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Entity File Number | 000-54391 | |
Entity Registrant Name | SMG Industries Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 51-0662991 | |
Entity Address, Address Line One | 20475 State Hwy 249, Suite 450 | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77070 | |
City Area Code | 713 | |
Local Phone Number | 955-3497 | |
Title of 12(b) Security | None | |
Trading Symbol | SMGI | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 39,180,297 | |
Entity Central Index Key | 0001426506 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 395,483 | $ 257,768 |
Restricted cash | 1,105,818 | 858,408 |
Accounts receivable, net of allowance for doubtful accounts of $927,469 and $1,041,387 as of September 30, 2022 and December 31, 2021, respectively | 11,656,527 | 11,703,347 |
Prepaid expenses and other current assets | 3,525,644 | 2,162,238 |
Current assets of discontinued operations | 17,435 | 17,446 |
Total current assets | 16,700,907 | 14,999,207 |
Property and equipment, net of accumulated depreciation of $15,288,106 and $11,262,193 as of September 30, 2022 and December 31, 2021, respectively | 6,712,073 | 10,463,352 |
Right of use assets - operating lease | 851,382 | 3,312,710 |
Other assets | 354,538 | 448,887 |
Other assets of discontinued operations, net | 1,500 | 1,500 |
Total assets | 24,620,400 | 29,225,656 |
Current liabilities: | ||
Accounts payable | 3,765,464 | 3,958,515 |
Accounts payable - related party | 238,828 | 94,602 |
Accrued expenses and other liabilities | 3,196,728 | 4,055,113 |
Right of use liabilities - operating leases short term | 633,110 | 816,671 |
Secured line of credit | 8,575,725 | 9,468,759 |
Current portion of unsecured notes payable | 3,705,104 | 1,168,420 |
Current portion of secured notes payable, net | 6,188,588 | 3,527,960 |
Current portion of convertible note, net | 3,612,457 | 1,616,672 |
Current liabilities of discontinued operations | 414,161 | 588,283 |
Total current liabilities | 30,330,165 | 25,294,995 |
Long term liabilities: | ||
Convertible note payable, net | 3,049,201 | 2,620,145 |
Notes payable - secured, net of current portion | 15,316,164 | 14,535,751 |
Right of use liabilities - operating leases, net of current portion | 392,950 | 2,545,950 |
Long term liabilities of discontinued operations | 310,359 | 381,746 |
Total liabilities | 49,398,839 | 45,378,587 |
Commitments and contingencies | ||
Stockholders' deficit | ||
Common stock - $0.001 par value; 250,000,000 shares authorized; 39,180,297 and 33,731,162 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | 39,181 | 33,732 |
Additional paid in capital | 18,066,311 | 16,845,873 |
Accumulated deficit | (42,883,931) | (33,032,536) |
Total stockholders' deficit | (24,778,439) | (16,152,931) |
Total liabilities and stockholders' deficit | 24,620,400 | 29,225,656 |
Series A preferred stock | ||
Stockholders' deficit | ||
Preferred stock | ||
Series B convertible preferred stock | ||
Stockholders' deficit | ||
Preferred stock |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Allowance for doubtful accounts | $ 927,469 | $ 1,041,387 |
Property and equipment, net of accumulated depreciation | $ 15,228,106 | $ 11,262,193 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Common stock, shares par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, share issued (in shares) | 39,180,297 | 33,731,162 |
Common stock, shares outstanding (in shares) | 39,180,297 | 33,731,162 |
Series A preferred stock | ||
Preferred stock, shares par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 2,000 | 2,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Series B convertible preferred stock | ||
Preferred stock, shares par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 6,000 | 6,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
REVENUES | $ 19,331,484 | $ 14,772,939 | $ 53,589,434 | $ 34,618,358 |
COST OF REVENUES | 18,070,208 | 15,292,090 | 49,731,153 | 36,947,626 |
GROSS PROFIT (LOSS) | 1,261,276 | (519,151) | 3,858,281 | (2,329,268) |
OPERATING EXPENSES: | ||||
Selling, general and administrative | 2,404,852 | 1,455,253 | 7,156,698 | 4,584,854 |
Total operating expenses | 2,404,852 | 1,455,253 | 7,156,698 | 4,584,854 |
LOSS FROM OPERATIONS | (1,143,576) | (1,974,404) | (3,298,417) | (6,914,122) |
OTHER INCOME (EXPENSE) | ||||
Interest expense, net | (2,635,875) | (2,059,908) | (7,433,606) | (4,630,685) |
Gain on PPP Loan Forgiveness | 105,000 | 3,253,100 | ||
Gain on settlement of debt | 564,814 | 564,814 | ||
Other income | 348 | 19,889 | ||
Gain on disposal of assets | 17,500 | 351,904 | 114,926 | |
Total other income (expense) | (2,053,561) | (1,954,560) | (6,516,888) | (1,242,770) |
NET LOSS FROM CONTINUING OPERATIONS | (3,197,137) | (3,928,964) | (9,815,305) | (8,156,892) |
Income (loss) from discontinued operations | (2,852) | 316,926 | (36,090) | 360,207 |
NET LOSS | (3,199,989) | (3,612,038) | (9,851,395) | (7,796,685) |
Preferred stock dividends | (25,000) | (75,000) | ||
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ (3,199,989) | $ (3,637,038) | $ (9,851,395) | $ (7,871,685) |
Net income (loss) per common share | ||||
Continuing operations, Basic | $ (0.09) | $ (0.17) | $ (0.28) | $ (0.39) |
Continuing operations, Diluted | (0.09) | (0.17) | (0.28) | (0.39) |
Discontinued operations, Basic | 0 | 0.01 | 0 | 0.02 |
Discontinued operations, Diluted | 0 | 0.01 | 0 | 0.02 |
Net loss attributable to common shareholders, Basic | (0.09) | (0.16) | (0.28) | (0.37) |
Net loss attributable to common shareholders, Diluted | $ (0.09) | $ (0.16) | $ (0.28) | $ (0.37) |
Weighted average common shares outstanding | ||||
Basic | 36,919,922 | 23,214,370 | 35,459,322 | 21,234,310 |
Diluted | 36,919,922 | 23,214,370 | 35,459,322 | 21,234,310 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) | Series A preferred stock Preferred Stock | Series B preferred stock Preferred Stock | Common Stock | Additional Paid In Capital | Accumulated Deficit | Total |
Beginning balance at Dec. 31, 2020 | $ 2 | $ 0 | $ 19,447 | $ 10,978,254 | $ (21,815,556) | $ (10,817,853) |
Beginning balance (in shares) at Dec. 31, 2020 | 2,000 | 0 | 19,446,258 | |||
Share based compensation | 17,973 | 17,973 | ||||
Shares issued with debt and beneficial conversion feature on convertible notes | $ 393 | 174,658 | 175,051 | |||
Shares issued with debt and beneficial conversion feature on convertible notes (in shares) | 393,107 | |||||
Preferred stock dividends | (25,000) | (25,000) | ||||
Net loss | (3,865,023) | (3,865,023) | ||||
Ending balance at Mar. 31, 2021 | $ 2 | $ 0 | $ 19,840 | 11,170,885 | (25,705,579) | (14,514,852) |
Ending balance (in shares) at Mar. 31, 2021 | 2,000 | 0 | 19,839,365 | |||
Beginning balance at Dec. 31, 2020 | $ 2 | $ 0 | $ 19,447 | 10,978,254 | (21,815,556) | (10,817,853) |
Beginning balance (in shares) at Dec. 31, 2020 | 2,000 | 0 | 19,446,258 | |||
Net loss | (7,796,685) | |||||
Ending balance at Sep. 30, 2021 | $ 2 | $ 25,726 | 15,059,907 | (29,687,241) | (14,601,606) | |
Ending balance (in shares) at Sep. 30, 2021 | 2,000 | 25,725,310 | ||||
Beginning balance at Mar. 31, 2021 | $ 2 | $ 0 | $ 19,840 | 11,170,885 | (25,705,579) | (14,514,852) |
Beginning balance (in shares) at Mar. 31, 2021 | 2,000 | 0 | 19,839,365 | |||
Share based compensation | 15,892 | 15,892 | ||||
Shares issued with debt and beneficial conversion feature on convertible notes | $ 2,027 | 1,286,805 | 1,288,832 | |||
Shares issued with debt and beneficial conversion feature on convertible notes (in shares) | 2,026,587 | |||||
Preferred stock dividends | (25,000) | (25,000) | ||||
Net loss | (319,624) | (319,624) | ||||
Ending balance at Jun. 30, 2021 | $ 2 | $ 0 | $ 21,867 | 12,473,582 | (26,050,203) | (13,554,752) |
Ending balance (in shares) at Jun. 30, 2021 | 2,000 | 0 | 21,865,952 | |||
Share based compensation | 17,279 | 17,279 | ||||
Shares issued with debt and beneficial conversion feature on convertible notes | $ 3,859 | 2,569,046 | 2,572,905 | |||
Shares issued with debt and beneficial conversion feature on convertible notes (in shares) | 3,859,358 | |||||
Preferred stock dividends | (25,000) | (25,000) | ||||
Net loss | (3,612,038) | (3,612,038) | ||||
Ending balance at Sep. 30, 2021 | $ 2 | $ 25,726 | 15,059,907 | (29,687,241) | (14,601,606) | |
Ending balance (in shares) at Sep. 30, 2021 | 2,000 | 25,725,310 | ||||
Beginning balance at Dec. 31, 2021 | $ 0 | $ 33,732 | 16,845,873 | (33,032,536) | (16,152,931) | |
Beginning balance (in shares) at Dec. 31, 2021 | 0 | 0 | 33,731,162 | |||
Shares issued for deferred financing costs | $ 1,393 | 396,380 | 397,773 | |||
Shares issued for deferred financing costs (in shares) | 1,393,648 | |||||
Share based compensation | 15,605 | 15,605 | ||||
Net loss | (3,631,130) | (3,631,130) | ||||
Ending balance at Mar. 31, 2022 | $ 0 | $ 0 | $ 35,125 | 17,257,858 | (36,663,666) | (19,370,683) |
Ending balance (in shares) at Mar. 31, 2022 | 0 | 0 | 35,124,810 | |||
Beginning balance at Dec. 31, 2021 | $ 0 | $ 33,732 | 16,845,873 | (33,032,536) | (16,152,931) | |
Beginning balance (in shares) at Dec. 31, 2021 | 0 | 0 | 33,731,162 | |||
Shares issued for deferred financing costs | 397,773 | |||||
Net loss | (9,851,395) | |||||
Ending balance at Sep. 30, 2022 | $ 39,181 | 18,066,311 | (42,883,931) | (24,778,439) | ||
Ending balance (in shares) at Sep. 30, 2022 | 0 | 0 | 39,180,297 | |||
Beginning balance at Mar. 31, 2022 | $ 0 | $ 0 | $ 35,125 | 17,257,858 | (36,663,666) | (19,370,683) |
Beginning balance (in shares) at Mar. 31, 2022 | 0 | 0 | 35,124,810 | |||
Share based compensation | 15,146 | 15,146 | ||||
Net loss | (3,020,276) | (3,020,276) | ||||
Ending balance at Jun. 30, 2022 | $ 0 | $ 0 | $ 35,125 | 17,273,004 | (39,683,942) | (22,375,813) |
Ending balance (in shares) at Jun. 30, 2022 | 0 | 0 | 35,124,810 | |||
Share based compensation | 15,146 | 15,146 | ||||
Shares issued for settlement of debt | $ 750 | 138,000 | 138,750 | |||
Shares issued for settlement of debt (in shares) | 750,000 | |||||
Shares issued for debt extension | $ 3,306 | 640,161 | 643,467 | |||
Shares issued for debt extension (in shares) | 3,305,487 | |||||
Net loss | (3,199,989) | (3,199,989) | ||||
Ending balance at Sep. 30, 2022 | $ 39,181 | $ 18,066,311 | $ (42,883,931) | $ (24,778,439) | ||
Ending balance (in shares) at Sep. 30, 2022 | 0 | 0 | 39,180,297 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss from continuing operations | $ (9,815,305) | $ (8,156,892) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation | 45,897 | 51,144 |
Depreciation | 4,144,644 | 4,074,738 |
Shares issued for debt extension | 643,467 | |
Amortization of deferred financing costs | 3,124,398 | 1,096,867 |
Amortization of right of use assets - operating leases | 340,447 | 439,398 |
Bad debt expense | 40,301 | 159,612 |
Gain on PPP Loan Forgiveness | (3,253,100) | |
Gain on settlement of debt | (564,814) | |
Gain on disposal of assets | (351,904) | (114,926) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 6,519 | (6,508,178) |
Prepaid expenses and other current assets | 2,775,210 | 2,193,864 |
Other assets | (187,239) | (306,029) |
Accounts payable | (144,341) | 2,454,235 |
Accounts payable - related party | 144,226 | 105,125 |
Accrued expenses and other liabilities | (706,001) | 2,155,223 |
Right of use operating lease liabilities | (75,758) | (277,329) |
Net cash used in operating activities from continuing operations | (580,253) | (5,886,248) |
Net cash provided by operating activities from discontinued operations | 568,518 | |
Net cash used in operating activities | (580,253) | (5,317,730) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash paid for disposal of MG Cleaners, LLC | (35,000) | |
Cash proceeds from disposal of property and equipment | 329,271 | |
Cash paid for purchase of property and equipment | (47,201) | (97,026) |
Net cash provided by (used in) investing activities from continuing operations | 282,070 | (132,026) |
Net cash provided by (used in) investing activities | 282,070 | (132,026) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payment of deferred financing costs | (20,623) | |
Proceeds (payments) on secured line of credit, net | (921,462) | 2,880,180 |
Proceeds from notes payable | 5,229,098 | 8,274,002 |
Payments on notes payable | (3,624,328) | (8,698,655) |
Payments on convertible notes payable | (50,000) | |
Proceeds from convertible notes payable | 3,255,000 | |
Net cash provided by financing activities from continuing operations | 683,308 | 5,639,904 |
Net cash provided by (used in) financing activities from discontinued operations | (226,932) | |
Net cash provided by financing activities | 683,308 | 5,412,972 |
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 385,125 | (36,784) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period | 1,116,176 | 979,088 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period | 1,501,301 | 942,304 |
Supplemental disclosures: | ||
Cash paid for interest | 3,600,469 | 3,508,529 |
Noncash investing and financing activities | ||
Prepaid expenses financed with note payable | 3,638,407 | 3,253,678 |
Preferred stock dividend | 75,000 | |
Shares issued for deferred financing costs | 397,773 | |
Note receivable for property and equipment | 500,209 | 521,952 |
Beneficial conversion feature on convertible notes payable | 4,036,788 | |
Non-cash increase in secured notes payable for settlement of accounts payable | 203,009 | |
Equipment financed with note payable | 963,662 | |
Right of use assets and operating lease obligation recognized | 2,478,508 | |
Share issued for settlement of debt | $ 138,750 | |
Convertible notes payable issued to settle accounts payable | $ 931,034 |
BACKGROUND AND BASIS OF PRESENT
BACKGROUND AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2022 | |
BACKGROUND AND BASIS OF PRESENTATION | |
BACKGROUND AND BASIS OF PRESENTATION | NOTE 1 — BACKGROUND AND BASIS OF PRESENTATION SMG Industries Inc. (“we”, “our”, the “Company” or “SMG”) is a corporation established pursuant to the laws of the State of Delaware on January 7, 2008. The Company’s original business was the acquisition and stockpile of a rare metal known as Indium used in cell phones and other industrial applications. The Company eventually sold its stockpile and distributed most of the proceeds to its stockholders via special dividends and share repurchases. The Company today is a growth-oriented midstream, logistics and oilfield services company that operates throughout the domestic Southwest United States. Through its wholly-owned operating subsidiaries, the Company offers an expanding suite of products and services across the oilfield market segments of drilling, completions and production. SMG is headquartered in Houston, Texas with facilities in Floresville, Hempstead, Henderson, Houston, Odessa, Palestine, and Victoria, Texas, and Fort Mill, South Carolina. In March 2020 the World Health Organization declared COVID-19 a pandemic. Throughout 2020, 2021 and through 2022, many variants of the virus arose. To date, the Company’s financial results and operations have not been materially adversely impacted by the COVID-19 pandemic. The extent to which the COVID-19 pandemic and global efforts to contain its spread will impact our operations going forward will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity and scope of the pandemic and the actions taken to contain or treat the COVID-19 pandemic. The accompanying unaudited interim consolidated financial statements of SMG have been prepared in accordance with accounting principles generally accepted in the United States of America and should be read in conjunction with the audited consolidated financial statements and notes thereto for the years ended December 31, 2021 and 2020 in the Form 10-K filed on April 15, 2022. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosures contained in the Form 10-K have been omitted. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The Company prepares its consolidated financial statements on the accrual basis of accounting. The accompanying consolidated financial statements include the accounts of the Company and its wholly subsidiaries, 5J Trucking LLC, 5J Oilfield Services LLC, 5J Specialized LLC, 5J Transportation LLC and 5J Logistics Services LLC (together referred to as “5J” or “5J Group”), Momentum Water Transfer Services, LLC (“MWTS”), Jake Oilfield Solutions LLC (“Jake”) and Trinity Services LLC (“Trinity”), all of which have quarter ends of September 30 and fiscal year end of December 31. All intercompany accounts, balances and transactions have been eliminated in the consolidation. Fair Value of Financial Instruments The carrying value of short-term instruments, including cash, accounts payable and accrued expenses, and short-term notes approximate fair value due to the relatively short period to maturity for these instruments. The carrying value of long-term debt approximates fair value since the related rates of interest approximate current market rates. Fair value is defined as 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. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a three-level valuation hierarchy for disclosures of fair value measurements, defined as follows: Level 1: inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. Level 3: inputs to the valuation methodology are unobservable and significant to the fair value The Company does not have any assets or liabilities that are required to be measured and recorded at fair value on a recurring basis. Discontinued Operations In December 2020 we sold MG and decided to cease the operations of Trinity. An entity that is disposed of by sale or ceasing of operations is reported as discontinued operations if the transaction represents a strategic shift that will have a major effect on an entity’s operations and financial results. As such, MG and Trinity are reported as discontinued operations. Assets and liabilities of the discontinued operations are aggregated and reported separately as assets and liabilities of discontinued operations in the Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021. The results of discontinued operations are aggregated and presented separately in the Consolidated Statements of Operations as net income (loss) from discontinued operations for the three and nine months ended September 30, 2022 and 2021. The cash flows of the discontinued operations are reflected as cash flows of discontinued operations within the Company’s Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021. Amounts presented in discontinued operations have been derived from our consolidated financial statements and accounting records using the historical basis of assets, liabilities, results of operations, and cash flows of MG and Trinity. The discontinued operations exclude general corporate allocations. Basic and Diluted Net Loss per Share The Company presents both basic and diluted net loss per share on the face of the statements of operations. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted per share calculations give effect to all potentially dilutive shares of common stock outstanding during the period, including stock options and warrants, and using the treasury-stock method for stock options and warrant and the “if converted” method for convertible notes payable and preferred stock. If anti-dilutive, the effect of potentially dilutive shares of common stock is ignored. For the three and nine months ended September 30, 2022, 1,525,000 of stock options, 1,763,335 of warrants and 79,467,400 shares issuable from convertible notes were considered for their dilutive effects. For the three and nine months ended September 30, 2021, 1,700,000 of stock options, 1,763,335 of warrants, 4,000,000 shares issuable from Series A Preferred Stock and 68,450,340 shares issuable from convertible notes were considered for their dilutive effects. As a result of the Company’s net losses for the three and nine months ended September 30, 2022 and 2021, all potentially dilutive instruments were excluded as their effect would have been anti-dilutive. Reclassification Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation. Recent Accounting Pronouncements The Company does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements. |
GOING CONCERN
GOING CONCERN | 9 Months Ended |
Sep. 30, 2022 | |
GOING CONCERN | |
GOING CONCERN | NOTE 3 – GOING CONCERN The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern and, no adjustments to the consolidated financial statements have been made to account for this uncertainty. The Company concluded that the uncertainty surrounding the COVID-19 global pandemic, its negative working capital, and negative cash flows from operations are conditions that raise substantial doubt about the Company’s ability to continue as a going concern. The Company plans to continue to generate additional revenue (and improve cash flows from operations) in connection with its anticipated growth related to the Company’s February 2020 acquisition of 5J and its expanded revenue lines in heavy haul, super heavy haul, drilling rig mobilization, commodity freight, and brokerage services. |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2022 | |
REVENUE | |
REVENUE | NOTE 4 – REVENUE Disaggregation of revenue All of the Company’s revenue from continuing operations is currently generated from services. As such no further disaggregation of revenue information is provided. All revenues are currently in the southern region of the United States. Customer Concentration and Credit Risk During the nine months ended September 30, 2022 and 2021, no customers exceeded 10% of revenue. No customer accounted for 10% of accounts receivable as of September 30, 2022 and December 31, 2021. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 9 Months Ended |
Sep. 30, 2022 | |
PROPERTY AND EQUIPMENT, NET | |
PROPERTY AND EQUIPMENT, NET | NOTE 5 – PROPERTY AND EQUIPMENT, NET Property and equipment at September 30, 2022 and December 31, 2021 consisted of the following: September 30, 2022 December 31, 2021 Equipment $ 7,911,933 $ 7,768,597 Trucks and trailers 11,383,327 11,167,001 Downhole oil tools 659,873 659,873 Vehicles 1,334,059 1,538,528 Building 493,529 493,529 Furniture, fixtures and other 157,458 98,017 Property and equipment, gross 21,940,179 21,725,545 Less: accumulated depreciation (15,228,106) (11,262,193) Property and equipment, net $ 6,712,073 $ 10,463,352 Depreciation expense for the three months ended September 30, 2022 and 2021 was $1,398,753 and $1,337,233, respectively. Depreciation expense for the nine months ended September 30, 2022 and 2021 was $4,144,644 and $4,074,738, respectively. |
ACCRUED EXPENSES AND OTHER LIAB
ACCRUED EXPENSES AND OTHER LIABILITIES | 9 Months Ended |
Sep. 30, 2022 | |
ACCRUED EXPENSES AND OTHER LIABILITIES | |
ACCRUED EXPENSES AND OTHER LIABILITIES | NOTE 6 – ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses as of September 30, 2022 and December 31, 2021 included the following: September 30, 2022 December 31, 2021 Payroll and payroll taxes payable $ 1,293,375 $ 1,929,414 State and local tax payable 549,765 422,781 Interest payable 397,153 482,950 Accrued operational expenses 804,712 1,006,343 Accrued general and administrative expenses 100,300 178,561 Other 51,423 35,064 Total Accrued Expenses and Other Liabilities $ 3,196,728 $ 4,055,113 |
NOTES PAYABLE
NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2022 | |
NOTES PAYABLE | |
NOTES PAYABLE | NOTE 7 – NOTES PAYABLE Notes payable included the following as of September 30, 2022 and December 31, 2021: September 30, December 31, 2022 2021 Secured notes payable: Secured note payable issued December 7, 2018 to a shareholder, bearing interest of 10% per year, due one year after issuance. On March 6, 2020, the note was extended to June 30, 2020. On September 9, 2022, the note was extended to December 31, 2022. $ 100,000 $ 100,000 Secured note payable issued December 7, 2018 to a shareholder, bearing interest of 10% per year, due one year after issuance. On March 6, 2020, the note was extended to June 30, 2020. On September 9, 2022, the note was extended to December 31, 2022. 100,000 100,000 Secured note payable issued December 7, 2018, bearing interest of 10% per year, due one year after issuance. On September 9, 2022, the note was extended to December 31, 2022. 100,000 100,000 Secured note payable issued on December 7, 2018 related to the acquisition of Momentum Water Transfer Services LLC, bearing interest of 6% per year and due in monthly installments of $7,500, with a maturity date of December 8, 2023. On September 29, 2022, the Company entered into a settlement of debt agreement and release. Per the agreement, the Company converted approximately $467,000 of debt into shares of common stock. The Company will pay six remaining quarterly payments of approximately $45,833 per month beginning in December 2022 through March 31, 2024, the amended maturity date. 275,000 792,470 Secured note payable issued May 1, 2019 to a shareholder, bearing interest of 10% per year, due July 1, 2019, principal balance $100,000. Note was extended to March 30, 2020. On September 9, 2022, the note was extended to December 31, 2022. 100,000 100,000 Secured note payable issued June 17, 2019 to a shareholder, bearing interest of 10% per year, due June 30, 2020. On September 9, 2022, the note was extended to December 31, 2022. 80,000 80,000 Secured note payable with a related party issued February 27, 2020 in connection with the 5J acquisition, bearing interest of 10% per year, due February 1, 2023. 2,000,000 2,000,000 Various notes payable secured by equipment of 5J Trucking, LLC, bearing interest ranging from 5.32% to 5.5% maturing from January 2023 through March 2023. 130,428 343,723 Secured note payable with a related party issued on February 27, 2020, bearing interest of 10.0% per year, due March 1, 2023. 194,653 545,050 Secured promissory notes for Jake, SMG Industries, Inc, and 5J Trucking LLC, with Small Business Administration Economic Injury Disaster Loans, bearing interest 3.75% annually and matures in June, August, and September 2050. 390,000 390,000 Secured promissory note issued on June 20, 2020 in connection with an equipment purchase. The note is due and payable in thirty-six monthly installments of $45,585 commencing on July 20, 2020 and the final installment is due on July 1, 2023. 490,530 784,261 Secured promissory note issued on January 27, 2022. The note is due on May 1, 2026 and secured by machinery and equipment owned by the Company. The Company paid an initial installment of $95,025, with monthly payments of approximately $15,275 per month beginning in June 2022 through maturity. 688,315 — Secured promissory note issued on July 11, 2022. The note is due on June 8, 2027 and secured by equipment owned by the Company. The Company will pay monthly payments of approximately $2,372 per month beginning in July 2022 through maturity. 115,826 — Secured promissory note with Amerisource, a related party, issued on September 7, 2021 in the amount of $12,740,000, bearing interest at 12%, maturing September 7, 2026. The Company is required to make monthly payments of interest only beginning October 1, 2021, with payments of principal and interest beginning in October 2022. On March 15, 2022, the Company entered into an agreement with Amerisource, to amend the Loan Agreement dated September 7, 2021, pursuant to which Amerisource agreed to increase the loan commitment to the Company from $12,740,000 to $16,740,000. 16,740,000 12,740,000 21,504,752 18,075,504 Less discounts and deferred finance costs — (11,793) Less current maturities (6,188,588) (3,527,960) Long term secured notes payable, net of current maturities and discounts $ 15,316,164 $ 14,535,751 On January 27, 2022, the Company issued a secured promissory note for $843,844, which includes precomputed interest of $147,818. The note is due on May 1, 2026 and secured by machinery and equipment owned by the Company. The Company paid an initial installment of $95,025 plus an additional $10,634 payment, with monthly payments of approximately $15,275 per month beginning in June 2022 through maturity. On March 15, 2022, each of our 5J subsidiaries entered into an agreement with Amerisource Funding Inc. (“Amerisource”), our senior lender, to amend the Loan Agreement dated September 7, 2021, pursuant to which Amerisource agreed to increase the loan commitment to the 5J entities from $12,740,000 to $16,740,000. The Company received $4,000,000 of cash proceeds from this agreement. On September 29, 2022, the Company entered into a conversion of debt and release agreement with Denice Cox. Per the agreement, the Company issued 750,000 shares of common stock with a fair value of $138,750 and paid cash of $50,000. In return, the lender agreed to reduce the principal balance of the promissory note (“Note”) to $275,000 and accrued interest of $152,385 was forgiven. The Company will make six quarterly payments of $45,833 and will pay interest of 8% on the new principal amount of $275,000, and the Note matures on March 31, 2024. In addition, the lender agreed to forgive a $35,000 unsecured note payable as part of the transaction and $48,710 of accounts payable. The Company recognized a gain on settlement of $564,814 in connection with this transaction. The Company amortized total debt discount of $11,794 related to secured notes payable during the nine months ended September 30, 2022. During the nine months ended September 30, 2022, the Company issued 720,000 shares for the extension of $480,000 in secured notes payable and 2,585,487 shares for the extension of $1,723,657 in unsecured notes payable. The Company recognized a total of $643,467 of interest expense based on the fair value of the shares issued to the lenders. Notes Payable – Unsecured September 30, December 31, 2022 2021 Insurance premium financing note with original principal of $1,353,151, monthly payments of $138,285, with stated interest of 4.76%, maturing on December 1, 2022. $ 385,159 $ — Insurance premium financing note with original principal of $1,487,202, monthly payments of $153,537, with stated interest of 6.99%, maturing on May 1, 2022. — 743,576 Insurance premium financing note with original principal of $1,677,968, monthly payments of $174,154, with stated interest of 8.0%, maturing on May 1, 2023. 1,336,150 — Insurance premium financing note with original principal of $292,065, monthly payments of $7,793, with stated interest of 5.78%, maturing on February 14, 2022. — 58,413 Insurance premium financing note with original principal of $485,830, monthly payments of $49,809, with stated interest of 5.470%, maturing on February 14, 2023 236,748 — Unsecured note payable with a shareholder. Note issued on August 10, 2018 for $40,000, due December 30, 2018 (extended to June 30, 2020) and 10% interest per year, balance of payable is due on demand. Additional $25,000 advanced and due on demand. On September 9, 2022, the note was extended to December 31, 2022. 44,559 44,559 Unsecure advances from the sellers of MWTS, non-interest bearing and due on demand — 35,000 Unsecured payable for settlement of lawsuit with an original settlement of $196,188, monthly payments of $6,822 for 24 months, with an interest rate of 6% and a default interest rate of 18%. 23,390 98,433 Unsecured note payable with a shareholder, a related party. Note issued on December 22, 2021 for $150,000, due January 31, 2022 and 12% interest per year. During the nine months ended September 30, 2022, an additional $895,025 was loaned by the shareholder, related party. On August 3, 2022, the note was extended to December 31, 2022. 1,045,025 150,000 Unsecured note payable with a shareholder, a related party. Note issued on December 22, 2021 for $150,000, due January 31, 2022 and 12% interest per year. On January 6, 2022, the shareholder, related party, loaned the Company an additional $100,000. On August 3, 2022, the note was extended to December 31, 2022. 250,000 150,000 Unsecured note payable with a shareholder. Note issued on December 22, 2021 for $150,000, due January 31, 2022 and 12% interest per year. On January 6, 2022, the shareholder, loaned the Company an additional $100,000. On August 3, 2022, the note was extended to December 31, 2022. 250,000 150,000 Unsecured note payable with a shareholder, a related party. Note issued on February 14, 2022 for $134,073, due March 31, 2022 and 12% interest per year. On August 3, 2022, the note was extended to December 31, 2022. 134,073 — Notes payable - unsecured 3,705,104 1,429,981 Less discounts and deferred finance costs — (261,561) Less current portion (3,705,104) (1,168,420) Notes payable - unsecured, net of current portion $ — $ — On January 6, 2022, Newton Dorsett, a member of our board of directors, loaned us $100,000 pursuant to a short term note, that along with the initial loan to us in December 2021 of $150,000, totals $250,000. This bridge note matured on January 31, 2022 and pays a 12% per annum interest rate. On August 3, 2022, this note was amended to a revised maturity date of December 31, 2022. On January 6, 2022, Grey Fox Investments which is controlled by Brady Crosswell, a member of our board of directors, loaned us $100,000 pursuant to a short term bridge note, that along with the loan to us in December 2021 of $150,000, totals $250,000. This note matured on January 31, 2022 and pays a 12% per annum interest rate. On August 3, 2022, this note was amended to a revised maturity date of December 31, 2022. On January 7, 2022, Mr. Madden loaned us $100,000 pursuant to short term note, that along with the initial loan to us in December 2021 of $150,000, totals $250,000. This bridge note matured on January 31, 2022 and pays a 12% per annum interest rate. On August 3, 2022, this note was amended to a revised maturity date of December 31, 2022. On February 11, 2022, Mr. Madden loaned us $95,025 pursuant to a short term note that matured on March 31, 2022. Mr. Madden also received 142,538 shares issued in the first quarter 2022 as an equity incentive in connection with this note. On August 3, 2022, this note was amended to a revised maturity date of December 31, 2022. On February 14, 2022, Mr. Madden loaned us $250,000 pursuant to a short term note that matured on March 31, 2022. Mr. Madden also received 375,000 shares issued in the first quarter 2022 as an equity incentive in connection with this note. On August 3, 2022, this note was amended to a revised maturity date of December 31, 2022. On February 14, 2022, James Frye, a member of our board of directors, loaned us $134,073 pursuant to a short term note that matured on March 31, 2022. Mr. Frye also received 201,110 shares issued in the first quarter 2022 as an equity incentive in connection with this note. On August 3, 2022, this note was amended to a revised maturity date of December 31, 2022. On March 3, 2022, Mr. Madden loaned us $450,000 pursuant to a short-term bridge note that matured on March 31, 2022. Mr. Madden also received 675,000 shares issued in the first quarter 2022 as an equity incentive in connection with this note. On August 3, 2022, this note was amended to a revised maturity date of December 31, 2022. The Company amortized total debt discount of $659,335 related to unsecured notes payable during the nine months ended September 30, 2022. Accounts Receivable Financing Facility (Secured Line of Credit) On February 27, 2020, the 5J Entities entered into a Revolving Accounts Receivable Assignment and Term Loan Financing and Security Agreement with Amerisource Funding Inc. (“Amerisource”) in the aggregate amount of $10,000,000 (“Amerisource Financing”).The Amerisource Financing provides for: (i) an equipment loan in the principal amount of $1,401,559 (“Amerisource Equipment Loan”), (ii) a bridge term facility in the amount of $550,690 (“Bridge Facility”), and (iii) an accounts receivable revolving line of credit up to $10,000,000 (“AR Facility”). The Company recorded deferred financing costs of $223,558 recognized on the date of incurrence as a discount. During the nine months ended September 30, 2022, $28,428 of debt discount was amortized to interest expense, and unamortized discount was $0 as of September 30, 2022. Amerisource is a related party of the Company due to its holdings of common stock and convertible debt of the Company and has an officer on the Board of Directors of the Company. The AR Facility has been issued in an amount not to exceed $10,000,000, with the maximum availability limited to 90% of the eligible accounts receivable (as defined in the financing agreement). The AR Facility is paid for by the assignment of the accounts receivable of each of the 5J Entities and is secured by all instruments and proceeds related thereto. The AR Facility has an interest rate of 4.5% in excess of the prime rate per annum, an initial collateral management fee of 0.75% of the maximum account limit per annum, a non-usage fee of 0.35% assessed on a quarterly basis on the difference between the maximum availability under the AR Facility and the average daily revolving loan balance outstanding, and a one-time commitment fee equal to $100,000 paid at closing. The AR Facility can be terminated by the 5J Entities with 60 days written notice. There is an early termination fee equal to two percent (2.0)% of the then maximum account limit if there are more than twelve (12) months remaining in term of the AR Facility, or one percent (1.0)% of the then maximum account limit if there twelve months or less remaining in the term of the AR Facility. The Company is a guarantor of the Amerisource Financing. The balances under the above lines of credit were $8,575,725 and $9,468,759 as of September 30, 2022 and December 31, 2021, respectively. Convertible Notes Payable On February 27, 2020, the Company entered into a loan agreement with Amerisource Leasing Corporation, which has an equity ownership of 13.9% and is considered a related party, for the sale of a 10% convertible promissory note in the principal amount of $1,600,000 (“Amerisource Stretch Note”). The Amerisource Stretch Note matures on February 27, 2023 and is convertible into shares of the Company’s common stock at a fixed conversion price of $0.25 per share. The interest rate on the Amerisource Stretch Note increases to 11% per annum on February 27, 2021 and to 12% per annum on February 27, 2022. Interest shall be paid on a quarterly basis. The Amerisource Stretch Note may be prepaid at any time by the Company on 10 days-notice to the noteholder without penalty. In addition, 2,498,736 shares of the Company’s common stock with a fair value of $419,788 were issued to the noteholder in connection with the sale of the Amerisource Note. The Company recorded deferred financing costs of $419,788 recognized on the date of incurrence as a discount and will be amortized over the life of the loan. During the nine months ended September 30, 2022, $151,590 of debt discount was amortized to interest expense, and there was $0 of unamortized discount as of September 30, 2022. As of September 30, 2022 and December 31, 2021, the outstanding principal balance was $1,600,000. From August 2020 through December 2021, the Company entered into convertible note payable agreements with investors and related parties totaling $7,306,740, with $6,306,740 with related parties, with the notes paying a 10% per annum interest rate, convertible into shares of the Company’s common stock at a fixed conversion price of $0.10 per share with a two year term. These convertible notes are secured by all of the assets of the Company, subject to prior liens and security interests. During the nine months ended September 30, 2022, $2,273,625 of debt discount was amortized to interest expense, and there was $2,245,082 of unamortized discount as of September 30, 2022. As of September 30, 2022, the convertible notes, net balance was $6,661,658 with long term convertible notes payable of $3,049,201 and current portion of convertible notes of $3,612,457. As of December 31, 2021, the convertible notes, net balance was $4,236,817 which long term convertible notes payable of $2,620,145 and current portion of convertible notes of $1,616,672. Future maturities of all the Company’s debt as of September 30, 2022 are as follows: 2022 $ 23,701,540 2023 8,887,796 2024 4,618,792 2025 5,114,297 2026 160,673 Thereafter 209,599 Total $ 42,692,697 |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 9 Months Ended |
Sep. 30, 2022 | |
STOCKHOLDERS' DEFICIT | |
STOCKHOLDERS' DEFICIT | NOTE 8 – STOCKHOLDERS’ DEFICIT During the nine months ended September 30, 2022, the Company issued a total of 1,393,648 shares of common stock to lenders in connection with unsecured notes payable. These shares had a fair value of $397,773 and were recorded as deferred finance costs. During the nine months ended September 30, 2022, the Company issued 720,000 shares for the extension of $480,000 in secured notes payable and 2,585,487 shares for the extension of $1,723,657 in unsecured notes payable. The Company recognized a total of $643,467 of interest expense based on the fair value of the shares issued to the lenders. On September 29, 2022, the Company entered into a conversion of debt and release agreement with Denice Cox as discussed in Note 7. Per the agreement, the Company issued 750,000 shares of the Company’s common stock as part of the settlement. These shares had a fair value of $138,750. |
STOCK OPTIONS AND WARRANTS
STOCK OPTIONS AND WARRANTS | 9 Months Ended |
Sep. 30, 2022 | |
STOCK OPTIONS AND WARRANTS | |
STOCK OPTIONS AND WARRANTS | NOTE 9 – STOCK OPTIONS AND WARRANTS Summary stock option information is as follows: Aggregate Weighted Aggregate Exercise Exercise Average Number Price Price Range Exercise Price Outstanding, December 31, 2021 1,575,000 $ 561,250 $ 0.25-0.75 $ 0.36 Granted — — — — Exercised — — — — Cancelled, forfeited or expired (50,000) (15,000) $ 0.30 $ 0.30 Outstanding, September 30, 2022 1,525,000 $ 546,250 $ 0.25-0.75 $ 0.36 Exercisable, September 30, 2022 1,186,111 $ 444,583 $ 0.25-0.75 $ 0.37 The weighted average remaining contractual life is approximately 2.18 years for stock options outstanding on September 30, 2022. At September 30, 2022, there was no intrinsic value to the outstanding stock options. Summary Stock warrant information is as follows: Aggregate Weighted Aggregate Exercise Exercise Average Number Price Price Range Exercise Price Outstanding, December 31, 2021 1,763,335 $ 496,667 $ 0.15-$0.75 $ 0.28 Granted — — — — Exercised — — — — Cancelled, forfeited or expired — — — — Outstanding, September 30, 2022 1,763,335 $ 496,667 $ 0.15 - 0.75 $ 0.28 Exercisable, September 30, 2022 1,763,335 $ 496,667 $ 0.15 - 0.75 $ 0.28 The weighted average remaining contractual life is approximately 4.35 years for stock warrants outstanding on September 30, 2022. At September 30, 2022 the outstanding stock warrants had an aggregate intrinsic value of $11,725. |
DISPOSITION OF BUSINESSES
DISPOSITION OF BUSINESSES | 9 Months Ended |
Sep. 30, 2022 | |
DISPOSITION OF BUSINESSES | |
DISPOSITION OF BUSINESSES | NOTE 10 – DISPOSITION OF BUSINESSES Trinity Services LLC In December 2020, management decided to sell or dissolve Trinity. All assets and liabilities of Trinity are classified as assets and liabilities of discontinued operations and included within net income (loss) from discontinued operations. All of Trinity’s equipment was sold in the year ended December 31, 2021 at auction through a third party auctioneer. All proceeds are being utilized to retire outstanding Trinity debt. MG Cleaners LLC On December 22, 2020, the Company, as the sole member of MG Cleaners LLC (“MG”), entered into a share exchange agreement (“Agreement”) with S&A Christian Investments L.L.C. (“S&A”) pursuant to which the Company transferred all of the membership interests of MG (“MG Interests”) to S&A in exchange for Stephen Christian, the control person of S&A, returning 1,408,276 shares of the Company’s common stock, par value $0.001 per share (“Exchanged Shares”) to the Company for cancellation, additional In connection with the sale of MG, Mr. Christian resigned as Executive Vice President and Secretary of the Company. The Company also agreed to pay $150,000 in cash to MG Cleaners, with $75,000 paid in December 2020. The remaining $75,000 was satisfied with a $40,000 sale of equipment and payment of $35,000 to MG Cleaners in February 2021. The decision to sell Trinity assets and the MG sale agreement qualify as discontinued operations in accordance with U.S. GAAP, as each represents a significant strategic shift of the Company’s operations that will have a major effect on the Company’s operations. As a result, the Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021 present the assets and liabilities of Trinity and MG as assets and liabilities of discontinued operations. The Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021 present the results of Trinity and MG as Loss from discontinued operations. The Consolidated Statements of Cash Flows for the nine months end September 30, 2022 and 2021 present operating, investing, and financing activities of Trinity and MG as cash flows from or used in discontinued operations. The balance sheets of Trinity and MG combined are summarized below: September 30, December 31, 2022 2021 Cash and cash equivalents $ — $ 11 Accounts receivable, net 17,011 17,011 Prepaid expenses and other current assets 424 424 Current assets of discontinued operations 17,435 17,446 Other assets 1,500 1,500 Other assets of discontinued operations 1,500 1,500 Total assets of discontinued operations $ 18,935 $ 18,946 Accounts payable $ 230,463 $ 400,659 Accrued expenses and other liabilities 183,698 187,624 Current liabilities of discontinued operations 414,161 588,283 Notes payable - secured, net of current portion 150,000 150,000 Notes payable - unsecured, net of current portion 160,359 231,746 Long term liabilities of discontinued operations 310,359 381,746 Total liabilities of discontinued operations $ 724,520 $ 970,029 The statements of operations of Trinity and MG combined are summarized below: Three months ended Nine months ended September 30, September 30, September 30, September 30, 2022 2021 2022 2021 Revenues $ — $ — $ — $ 157,620 Cost of revenues — (1,972) — (223,659) Selling, general and administrative — (24,927) — (271,016) Loss from operations — (26,899) — (337,055) Gain on forgiveness of PPP loan — 177,243 — 373,712 Gain on asset sale — 186,273 — 389,024 Other income (expense) — (11,467) (27,545) 32,565 Interest income (expense), net (2,852) (8,224) (8,545) (98,039) Net income (loss) from discontinued operations $ (2,852) $ 316,926 $ (36,090) $ 360,207 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 11 – COMMITMENTS AND CONTINGENCIES As of September 30, 2022, the Company has cash collateral in the amount of $1,104,207 as collateral for its insurance policy. Litigation During the year ended December 31, 2021, 5J Trucking LLC and James E. Frye entered into a settlement and release agreement with a third party equipment provider to settle outstanding claims by the provider. The Company agreed to pay a total of $196,188 to settle outstanding accounts payable, with $50,000 due upon execution and 24 monthly payments of $6,822. The Company recorded the liability as an unsecured note payable, as described in Note 7, which has a balance of $23,390 as of September 30, 2022. From time to time, SMG may be subject to routine litigation, claims, or disputes in the ordinary course of business. In the opinion of management, no pending or known threatened claims, actions or proceedings against SMG are expected to have a material adverse effect on SMG’s financial position, results of operations or cash flows. SMG cannot predict with certainty, however, the outcome or effect of any of the litigation or investigatory matters specifically described above or any other pending litigation or claims. There can be no assurance as to the ultimate outcome of any lawsuits and investigations. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2022 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 13 – RELATED PARTY TRANSACTIONS James E. Frye, who currently serves as a director on our Board and President of our 5J subsidiary and also owns or has control over 5J Properties LLC, an entity that is the lessor to three leases with the Company. These three leases located in Palestine, West Odessa and Floresville, Texas all have similar five-year terms with options for renewal. The current monthly rent for these leases During the nine months ended September 30, 2022, the Company entered into unsecured notes with related parties totaling approximately $1,229,098 in principal. See Note 7. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | Principles of Consolidation The Company prepares its consolidated financial statements on the accrual basis of accounting. The accompanying consolidated financial statements include the accounts of the Company and its wholly subsidiaries, 5J Trucking LLC, 5J Oilfield Services LLC, 5J Specialized LLC, 5J Transportation LLC and 5J Logistics Services LLC (together referred to as “5J” or “5J Group”), Momentum Water Transfer Services, LLC (“MWTS”), Jake Oilfield Solutions LLC (“Jake”) and Trinity Services LLC (“Trinity”), all of which have quarter ends of September 30 and fiscal year end of December 31. All intercompany accounts, balances and transactions have been eliminated in the consolidation. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying value of short-term instruments, including cash, accounts payable and accrued expenses, and short-term notes approximate fair value due to the relatively short period to maturity for these instruments. The carrying value of long-term debt approximates fair value since the related rates of interest approximate current market rates. Fair value is defined as 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. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a three-level valuation hierarchy for disclosures of fair value measurements, defined as follows: Level 1: inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. Level 3: inputs to the valuation methodology are unobservable and significant to the fair value The Company does not have any assets or liabilities that are required to be measured and recorded at fair value on a recurring basis. |
Discontinued Operations | Discontinued Operations In December 2020 we sold MG and decided to cease the operations of Trinity. An entity that is disposed of by sale or ceasing of operations is reported as discontinued operations if the transaction represents a strategic shift that will have a major effect on an entity’s operations and financial results. As such, MG and Trinity are reported as discontinued operations. Assets and liabilities of the discontinued operations are aggregated and reported separately as assets and liabilities of discontinued operations in the Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021. The results of discontinued operations are aggregated and presented separately in the Consolidated Statements of Operations as net income (loss) from discontinued operations for the three and nine months ended September 30, 2022 and 2021. The cash flows of the discontinued operations are reflected as cash flows of discontinued operations within the Company’s Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021. Amounts presented in discontinued operations have been derived from our consolidated financial statements and accounting records using the historical basis of assets, liabilities, results of operations, and cash flows of MG and Trinity. The discontinued operations exclude general corporate allocations. |
Basic and Diluted Net Loss per Share | Basic and Diluted Net Loss per Share The Company presents both basic and diluted net loss per share on the face of the statements of operations. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted per share calculations give effect to all potentially dilutive shares of common stock outstanding during the period, including stock options and warrants, and using the treasury-stock method for stock options and warrant and the “if converted” method for convertible notes payable and preferred stock. If anti-dilutive, the effect of potentially dilutive shares of common stock is ignored. For the three and nine months ended September 30, 2022, 1,525,000 of stock options, 1,763,335 of warrants and 79,467,400 shares issuable from convertible notes were considered for their dilutive effects. For the three and nine months ended September 30, 2021, 1,700,000 of stock options, 1,763,335 of warrants, 4,000,000 shares issuable from Series A Preferred Stock and 68,450,340 shares issuable from convertible notes were considered for their dilutive effects. As a result of the Company’s net losses for the three and nine months ended September 30, 2022 and 2021, all potentially dilutive instruments were excluded as their effect would have been anti-dilutive. |
Reclassification | Reclassification Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements. |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of property and equipment | September 30, 2022 December 31, 2021 Equipment $ 7,911,933 $ 7,768,597 Trucks and trailers 11,383,327 11,167,001 Downhole oil tools 659,873 659,873 Vehicles 1,334,059 1,538,528 Building 493,529 493,529 Furniture, fixtures and other 157,458 98,017 Property and equipment, gross 21,940,179 21,725,545 Less: accumulated depreciation (15,228,106) (11,262,193) Property and equipment, net $ 6,712,073 $ 10,463,352 |
ACCRUED EXPENSES AND OTHER LI_2
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
ACCRUED EXPENSES AND OTHER LIABILITIES | |
Schedule of accrued expenses and other liabilities | September 30, 2022 December 31, 2021 Payroll and payroll taxes payable $ 1,293,375 $ 1,929,414 State and local tax payable 549,765 422,781 Interest payable 397,153 482,950 Accrued operational expenses 804,712 1,006,343 Accrued general and administrative expenses 100,300 178,561 Other 51,423 35,064 Total Accrued Expenses and Other Liabilities $ 3,196,728 $ 4,055,113 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
NOTES PAYABLE | |
Schedule of notes payable | September 30, December 31, 2022 2021 Secured notes payable: Secured note payable issued December 7, 2018 to a shareholder, bearing interest of 10% per year, due one year after issuance. On March 6, 2020, the note was extended to June 30, 2020. On September 9, 2022, the note was extended to December 31, 2022. $ 100,000 $ 100,000 Secured note payable issued December 7, 2018 to a shareholder, bearing interest of 10% per year, due one year after issuance. On March 6, 2020, the note was extended to June 30, 2020. On September 9, 2022, the note was extended to December 31, 2022. 100,000 100,000 Secured note payable issued December 7, 2018, bearing interest of 10% per year, due one year after issuance. On September 9, 2022, the note was extended to December 31, 2022. 100,000 100,000 Secured note payable issued on December 7, 2018 related to the acquisition of Momentum Water Transfer Services LLC, bearing interest of 6% per year and due in monthly installments of $7,500, with a maturity date of December 8, 2023. On September 29, 2022, the Company entered into a settlement of debt agreement and release. Per the agreement, the Company converted approximately $467,000 of debt into shares of common stock. The Company will pay six remaining quarterly payments of approximately $45,833 per month beginning in December 2022 through March 31, 2024, the amended maturity date. 275,000 792,470 Secured note payable issued May 1, 2019 to a shareholder, bearing interest of 10% per year, due July 1, 2019, principal balance $100,000. Note was extended to March 30, 2020. On September 9, 2022, the note was extended to December 31, 2022. 100,000 100,000 Secured note payable issued June 17, 2019 to a shareholder, bearing interest of 10% per year, due June 30, 2020. On September 9, 2022, the note was extended to December 31, 2022. 80,000 80,000 Secured note payable with a related party issued February 27, 2020 in connection with the 5J acquisition, bearing interest of 10% per year, due February 1, 2023. 2,000,000 2,000,000 Various notes payable secured by equipment of 5J Trucking, LLC, bearing interest ranging from 5.32% to 5.5% maturing from January 2023 through March 2023. 130,428 343,723 Secured note payable with a related party issued on February 27, 2020, bearing interest of 10.0% per year, due March 1, 2023. 194,653 545,050 Secured promissory notes for Jake, SMG Industries, Inc, and 5J Trucking LLC, with Small Business Administration Economic Injury Disaster Loans, bearing interest 3.75% annually and matures in June, August, and September 2050. 390,000 390,000 Secured promissory note issued on June 20, 2020 in connection with an equipment purchase. The note is due and payable in thirty-six monthly installments of $45,585 commencing on July 20, 2020 and the final installment is due on July 1, 2023. 490,530 784,261 Secured promissory note issued on January 27, 2022. The note is due on May 1, 2026 and secured by machinery and equipment owned by the Company. The Company paid an initial installment of $95,025, with monthly payments of approximately $15,275 per month beginning in June 2022 through maturity. 688,315 — Secured promissory note issued on July 11, 2022. The note is due on June 8, 2027 and secured by equipment owned by the Company. The Company will pay monthly payments of approximately $2,372 per month beginning in July 2022 through maturity. 115,826 — Secured promissory note with Amerisource, a related party, issued on September 7, 2021 in the amount of $12,740,000, bearing interest at 12%, maturing September 7, 2026. The Company is required to make monthly payments of interest only beginning October 1, 2021, with payments of principal and interest beginning in October 2022. On March 15, 2022, the Company entered into an agreement with Amerisource, to amend the Loan Agreement dated September 7, 2021, pursuant to which Amerisource agreed to increase the loan commitment to the Company from $12,740,000 to $16,740,000. 16,740,000 12,740,000 21,504,752 18,075,504 Less discounts and deferred finance costs — (11,793) Less current maturities (6,188,588) (3,527,960) Long term secured notes payable, net of current maturities and discounts $ 15,316,164 $ 14,535,751 |
Summary of future maturities of all the Company's debt | Future maturities of all the Company’s debt as of September 30, 2022 are as follows: 2022 $ 23,701,540 2023 8,887,796 2024 4,618,792 2025 5,114,297 2026 160,673 Thereafter 209,599 Total $ 42,692,697 |
Unsecured Debt. | |
NOTES PAYABLE | |
Schedule of notes payable | September 30, December 31, 2022 2021 Insurance premium financing note with original principal of $1,353,151, monthly payments of $138,285, with stated interest of 4.76%, maturing on December 1, 2022. $ 385,159 $ — Insurance premium financing note with original principal of $1,487,202, monthly payments of $153,537, with stated interest of 6.99%, maturing on May 1, 2022. — 743,576 Insurance premium financing note with original principal of $1,677,968, monthly payments of $174,154, with stated interest of 8.0%, maturing on May 1, 2023. 1,336,150 — Insurance premium financing note with original principal of $292,065, monthly payments of $7,793, with stated interest of 5.78%, maturing on February 14, 2022. — 58,413 Insurance premium financing note with original principal of $485,830, monthly payments of $49,809, with stated interest of 5.470%, maturing on February 14, 2023 236,748 — Unsecured note payable with a shareholder. Note issued on August 10, 2018 for $40,000, due December 30, 2018 (extended to June 30, 2020) and 10% interest per year, balance of payable is due on demand. Additional $25,000 advanced and due on demand. On September 9, 2022, the note was extended to December 31, 2022. 44,559 44,559 Unsecure advances from the sellers of MWTS, non-interest bearing and due on demand — 35,000 Unsecured payable for settlement of lawsuit with an original settlement of $196,188, monthly payments of $6,822 for 24 months, with an interest rate of 6% and a default interest rate of 18%. 23,390 98,433 Unsecured note payable with a shareholder, a related party. Note issued on December 22, 2021 for $150,000, due January 31, 2022 and 12% interest per year. During the nine months ended September 30, 2022, an additional $895,025 was loaned by the shareholder, related party. On August 3, 2022, the note was extended to December 31, 2022. 1,045,025 150,000 Unsecured note payable with a shareholder, a related party. Note issued on December 22, 2021 for $150,000, due January 31, 2022 and 12% interest per year. On January 6, 2022, the shareholder, related party, loaned the Company an additional $100,000. On August 3, 2022, the note was extended to December 31, 2022. 250,000 150,000 Unsecured note payable with a shareholder. Note issued on December 22, 2021 for $150,000, due January 31, 2022 and 12% interest per year. On January 6, 2022, the shareholder, loaned the Company an additional $100,000. On August 3, 2022, the note was extended to December 31, 2022. 250,000 150,000 Unsecured note payable with a shareholder, a related party. Note issued on February 14, 2022 for $134,073, due March 31, 2022 and 12% interest per year. On August 3, 2022, the note was extended to December 31, 2022. 134,073 — Notes payable - unsecured 3,705,104 1,429,981 Less discounts and deferred finance costs — (261,561) Less current portion (3,705,104) (1,168,420) Notes payable - unsecured, net of current portion $ — $ — |
STOCK OPTIONS AND WARRANTS (Tab
STOCK OPTIONS AND WARRANTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
STOCK OPTIONS AND WARRANTS | |
Schedule of stock option information | Aggregate Weighted Aggregate Exercise Exercise Average Number Price Price Range Exercise Price Outstanding, December 31, 2021 1,575,000 $ 561,250 $ 0.25-0.75 $ 0.36 Granted — — — — Exercised — — — — Cancelled, forfeited or expired (50,000) (15,000) $ 0.30 $ 0.30 Outstanding, September 30, 2022 1,525,000 $ 546,250 $ 0.25-0.75 $ 0.36 Exercisable, September 30, 2022 1,186,111 $ 444,583 $ 0.25-0.75 $ 0.37 |
Schedule of stock warrant information | Aggregate Weighted Aggregate Exercise Exercise Average Number Price Price Range Exercise Price Outstanding, December 31, 2021 1,763,335 $ 496,667 $ 0.15-$0.75 $ 0.28 Granted — — — — Exercised — — — — Cancelled, forfeited or expired — — — — Outstanding, September 30, 2022 1,763,335 $ 496,667 $ 0.15 - 0.75 $ 0.28 Exercisable, September 30, 2022 1,763,335 $ 496,667 $ 0.15 - 0.75 $ 0.28 |
DISPOSITION OF BUSINESSES (Tabl
DISPOSITION OF BUSINESSES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
DISPOSITION OF BUSINESSES | |
Summary of balance sheets and statements of operations of Trinity and MG combined | September 30, December 31, 2022 2021 Cash and cash equivalents $ — $ 11 Accounts receivable, net 17,011 17,011 Prepaid expenses and other current assets 424 424 Current assets of discontinued operations 17,435 17,446 Other assets 1,500 1,500 Other assets of discontinued operations 1,500 1,500 Total assets of discontinued operations $ 18,935 $ 18,946 Accounts payable $ 230,463 $ 400,659 Accrued expenses and other liabilities 183,698 187,624 Current liabilities of discontinued operations 414,161 588,283 Notes payable - secured, net of current portion 150,000 150,000 Notes payable - unsecured, net of current portion 160,359 231,746 Long term liabilities of discontinued operations 310,359 381,746 Total liabilities of discontinued operations $ 724,520 $ 970,029 The statements of operations of Trinity and MG combined are summarized below: Three months ended Nine months ended September 30, September 30, September 30, September 30, 2022 2021 2022 2021 Revenues $ — $ — $ — $ 157,620 Cost of revenues — (1,972) — (223,659) Selling, general and administrative — (24,927) — (271,016) Loss from operations — (26,899) — (337,055) Gain on forgiveness of PPP loan — 177,243 — 373,712 Gain on asset sale — 186,273 — 389,024 Other income (expense) — (11,467) (27,545) 32,565 Interest income (expense), net (2,852) (8,224) (8,545) (98,039) Net income (loss) from discontinued operations $ (2,852) $ 316,926 $ (36,090) $ 360,207 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
LEASES | |
Schedule of components of lease cost for operating and finance leases | Three months ended Nine months ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Operating lease cost $ 134,792 $ 271,356 $ 569,983 $ 661,870 Short-term lease cost 76,086 37,487 343,399 159,077 Total lease cost $ 210,878 $ 308,843 $ 913,382 $ 820,947 |
Schedule of supplemental cash flow information | Nine Months Ended Nine Months Ended September 30, 2022 September 30, 2021 Other Lease Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 75,758 $ 277,329 |
Schedule of lease position related assets and liabilities recorded in the consolidated balance sheets | Lease Position September 30, 2022 December 31, 2021 Operating Leases Operating lease right-of-use assets $ 851,382 $ 3,312,710 Right of use liability operating lease current portion $ 633,110 $ 816,671 Right of use liability operating lease long term 392,950 2,545,950 Total operating lease liabilities $ 1,026,060 $ 3,362,621 |
Schedule of operating lease other information | Lease Term and Discount Rate September 30, 2022 December 31, 2021 Weighted-average remaining lease term (years) Operating leases 12.1 3.7 Weighted-average discount rate Operating leases 8.6 % 10.9 % |
Schedule of maturities of lease liabilities | Operating Leases 2022 (Three months remaining) $ 298,642 2023 513,325 2024 267,583 2025 23,347 2026 and thereafter — Total future undiscounted lease payments 1,102,897 Less: Interest (76,837) Present value of lease liabilities $ 1,026,060 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Convertible notes | ||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Anti-dilutive shares, excluded from computation of earnings per share | 79,467,400 | 68,450,340 | 79,467,400 | 68,450,340 |
Stock Option | ||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Anti-dilutive shares, excluded from computation of earnings per share | 1,525,000 | 1,700,000 | 1,525,000 | 1,700,000 |
Warrant | ||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Anti-dilutive shares, excluded from computation of earnings per share | 1,763,335 | 1,763,335 | 1,763,335 | 1,763,335 |
Series A preferred stock | ||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Anti-dilutive shares, excluded from computation of earnings per share | 4,000,000 | 4,000,000 |
REVENUE (Details)
REVENUE (Details) - Customer - customer | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Customer concentration | Revenue | |||
REVENUE | |||
Number of customers | 0 | 0 | |
Concentration risk percentage | 10% | 10% | |
Credit concentration | Accounts receivable | |||
REVENUE | |||
Number of customers | 0 | 0 | |
Concentration risk percentage | 10% | 10% |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
PROPERTY AND EQUIPMENT, NET | ||
Property and equipment, gross | $ 21,940,179 | $ 21,725,545 |
Less: accumulated depreciation | (15,228,106) | (11,262,193) |
Property and equipment, net | 6,712,073 | 10,463,352 |
Equipment | ||
PROPERTY AND EQUIPMENT, NET | ||
Property and equipment, gross | 7,911,933 | 7,768,597 |
Trucks and trailers | ||
PROPERTY AND EQUIPMENT, NET | ||
Property and equipment, gross | 11,383,327 | 11,167,001 |
Downhole oil tools | ||
PROPERTY AND EQUIPMENT, NET | ||
Property and equipment, gross | 659,873 | 659,873 |
Vehicles | ||
PROPERTY AND EQUIPMENT, NET | ||
Property and equipment, gross | 1,334,059 | 1,538,528 |
Building | ||
PROPERTY AND EQUIPMENT, NET | ||
Property and equipment, gross | 493,529 | 493,529 |
Furniture, fixtures and other | ||
PROPERTY AND EQUIPMENT, NET | ||
Property and equipment, gross | $ 157,458 | $ 98,017 |
PROPERTY AND EQUIPMENT, NET - A
PROPERTY AND EQUIPMENT, NET - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
PROPERTY AND EQUIPMENT, NET | ||||
Depreciation | $ 1,398,753 | $ 1,337,233 | $ 4,144,644 | $ 4,074,738 |
ACCRUED EXPENSES AND OTHER LI_3
ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
ACCRUED EXPENSES AND OTHER LIABILITIES | ||
Payroll and payroll taxes payable | $ 1,293,375 | $ 1,929,414 |
State and local tax payable | 549,765 | 422,781 |
Interest payable | 397,153 | 482,950 |
Accrued operational expenses | 804,712 | 1,006,343 |
Accrued general and administrative expenses | 100,300 | 178,561 |
Other | 51,423 | 35,064 |
Total Accrued Expenses and Other Liabilities | $ 3,196,728 | $ 4,055,113 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 07, 2021 |
Notes payable: | |||
Notes payable | $ 21,504,752 | $ 18,075,504 | |
Less discounts and deferred finance costs | (11,793) | ||
Less current maturities | (6,188,588) | (3,527,960) | |
Long term secured notes payable, net of current maturities and discounts | 15,316,164 | 14,535,751 | |
5J Entities | |||
Notes payable: | |||
Notes payable | 688,315 | ||
Secured Note Dec 2018 One | |||
Notes payable: | |||
Notes payable | 100,000 | 100,000 | |
Secured Note Dec 2018 Two | |||
Notes payable: | |||
Notes payable | 100,000 | 100,000 | |
Secured Note Dec 2018 Three | |||
Notes payable: | |||
Notes payable | 100,000 | 100,000 | |
Secured Note Dec 2018 Four | |||
Notes payable: | |||
Notes payable | 275,000 | 792,470 | |
Secured Note June 2019 | |||
Notes payable: | |||
Notes payable | 80,000 | 80,000 | |
Secured Note May 2019 One | |||
Notes payable: | |||
Notes payable | 100,000 | 100,000 | |
Secured Note February 2020 One | |||
Notes payable: | |||
Notes payable | 2,000,000 | 2,000,000 | |
Various Secured Notes Payable Maturing From January 2023 Through March 2023 | |||
Notes payable: | |||
Notes payable | 130,428 | 343,723 | |
Secured Note February 2020 Two | |||
Notes payable: | |||
Notes payable | 194,653 | 545,050 | |
Secured Promissory Notes | |||
Notes payable: | |||
Notes payable | 390,000 | 390,000 | |
Secured Promissory Notes, June 2020 | |||
Notes payable: | |||
Notes payable | 490,530 | 784,261 | |
Secured Promissory Note September 2021 | |||
Notes payable: | |||
Notes payable | 16,740,000 | $ 12,740,000 | $ 12,740,000 |
Secured promissory note due on July 11 2022 | |||
Notes payable: | |||
Notes payable | $ 115,826 |
NOTES PAYABLE - Unsecured notes
NOTES PAYABLE - Unsecured notes payable (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Notes payable: | ||
Notes payable - unsecured | $ 3,705,104 | $ 1,429,981 |
Less discounts and deferred finance costs | (261,561) | |
Less current portion | (3,705,104) | (1,168,420) |
Notes payable - unsecured, net of current portion | 0 | 0 |
Insurance Premium Financing Note December 2021 | ||
Notes payable: | ||
Unsecured Debt | 385,159 | 0 |
Insurance Premium Financing Note May 2022 | ||
Notes payable: | ||
Unsecured Debt | 743,576 | |
Insurance Premium Financing Note February 2022 | ||
Notes payable: | ||
Unsecured Debt | 58,413 | |
Unsecured Note Payable With Shareholder | ||
Notes payable: | ||
Unsecured Debt | 44,559 | 44,559 |
Insurance premium financing note maturing on February 14, 2023 | ||
Notes payable: | ||
Unsecured Debt | 236,748 | |
Unsecured Advances from Momentum Water Transfer Service LLC | ||
Notes payable: | ||
Unsecured Debt | 35,000 | |
Insurance premium financing note May 2023 | ||
Notes payable: | ||
Unsecured Debt | 1,336,150 | |
Unsecured note payable for settlement of lawsuit | ||
Notes payable: | ||
Unsecured Debt | 23,390 | 98,433 |
Unsecured note payable with shareholder one | ||
Notes payable: | ||
Unsecured Debt | 1,045,025 | 150,000 |
Unsecured note payable with shareholder two | ||
Notes payable: | ||
Unsecured Debt | 250,000 | 150,000 |
Unsecured note payable with shareholder three | ||
Notes payable: | ||
Unsecured Debt | 250,000 | $ 150,000 |
Unsecured note payable with shareholder four | ||
Notes payable: | ||
Unsecured Debt | $ 134,073 |
NOTES PAYABLE - Additional Info
NOTES PAYABLE - Additional Information (Details) | 3 Months Ended | 9 Months Ended | ||||||||||||||||||
Sep. 29, 2022 USD ($) installment shares | Jul. 11, 2022 USD ($) | Mar. 03, 2022 USD ($) shares | Feb. 14, 2022 USD ($) shares | Feb. 11, 2022 USD ($) shares | Jan. 27, 2022 USD ($) | Sep. 07, 2021 USD ($) | Jun. 20, 2020 USD ($) installment | Feb. 27, 2020 USD ($) $ / shares shares | Dec. 07, 2018 USD ($) item | Sep. 30, 2022 USD ($) $ / shares | Sep. 30, 2022 USD ($) $ / shares shares | Feb. 27, 2022 | Jan. 07, 2022 USD ($) | Jan. 06, 2022 USD ($) | Dec. 31, 2021 USD ($) | Feb. 27, 2021 | Jun. 17, 2019 | May 01, 2019 USD ($) | Aug. 10, 2018 USD ($) | |
Convertible note principle amount | $ 843,844 | |||||||||||||||||||
Precomputed interest amount | 147,818 | |||||||||||||||||||
Initial installment amount | 95,025 | |||||||||||||||||||
Additional payment | 10,634 | |||||||||||||||||||
Notes payable | $ 21,504,752 | $ 21,504,752 | $ 18,075,504 | |||||||||||||||||
Total of interest expense based on fair value | 643,467 | 643,467 | ||||||||||||||||||
Accrued interest | $ 152,385 | |||||||||||||||||||
Amortized total debt discount | 2,273,625 | |||||||||||||||||||
Unamortized debt discount amount | 2,245,082 | 2,245,082 | ||||||||||||||||||
Cash paid under settlement agreement | $ 564,814 | |||||||||||||||||||
Current portion of convertible note | 3,612,457 | 3,612,457 | 1,616,672 | |||||||||||||||||
Convertible notes, net | 6,661,658 | 6,661,658 | 4,236,817 | |||||||||||||||||
Debt Instrument, Periodic Payment, Interest | $ 45,833 | |||||||||||||||||||
Number of monthly installments | installment | 6 | |||||||||||||||||||
Convertible note payable, net | 3,049,201 | 3,049,201 | 2,620,145 | |||||||||||||||||
Interest rate | 8% | |||||||||||||||||||
Debt Instrument Payment | $ 467,000 | |||||||||||||||||||
Monthly periodic payment | 45,833 | 15,275 | ||||||||||||||||||
Shares issued for settlement of debt | 138,750 | |||||||||||||||||||
Catalyst Finance L.P. | ||||||||||||||||||||
Lines of credit amount | 8,575,725 | 8,575,725 | 9,468,759 | |||||||||||||||||
Amerisource Note | ||||||||||||||||||||
Equity ownership percentage | 13.90% | |||||||||||||||||||
Maximum | ||||||||||||||||||||
Convertible note principle amount | $ 16,740,000 | |||||||||||||||||||
Minimum | ||||||||||||||||||||
Convertible note principle amount | 12,740,000 | |||||||||||||||||||
Newton Dorsett | ||||||||||||||||||||
Convertible note principle amount | $ 100,000 | |||||||||||||||||||
Grey Fox Investments | ||||||||||||||||||||
Convertible note principle amount | 100,000 | |||||||||||||||||||
Mr. Madden | ||||||||||||||||||||
Convertible note principle amount | $ 100,000 | |||||||||||||||||||
Secured Note January 2018 | ||||||||||||||||||||
Interest rate | 10% | |||||||||||||||||||
Unsecured Note August 10 2018 | ||||||||||||||||||||
Convertible note principle amount | $ 40,000 | |||||||||||||||||||
Debt instrument additional face amount | $ 25,000 | |||||||||||||||||||
Unsecured Note August 10 2018 | Minimum | ||||||||||||||||||||
Interest rate | 10% | |||||||||||||||||||
Unsecured notes payable | ||||||||||||||||||||
Notes payable | 35,000 | 1,723,657 | 1,723,657 | |||||||||||||||||
Amount of accounts payable forgiven | 48,710 | |||||||||||||||||||
Amortized total debt discount | $ 659,335 | |||||||||||||||||||
Number of shares issued to investors | shares | 2,585,487 | |||||||||||||||||||
Secured notes payable | ||||||||||||||||||||
Notes payable | 480,000 | $ 480,000 | ||||||||||||||||||
Amortized total debt discount | $ 11,794 | |||||||||||||||||||
Number of shares issued to investors | shares | 720,000 | |||||||||||||||||||
Secured Note Dec 2018 One | ||||||||||||||||||||
Notes payable | 100,000 | $ 100,000 | 100,000 | |||||||||||||||||
Secured Note Dec 2018 Two | ||||||||||||||||||||
Notes payable | 100,000 | 100,000 | 100,000 | |||||||||||||||||
Secured Note Dec 2018 Two | Minimum | ||||||||||||||||||||
Interest rate | 10% | |||||||||||||||||||
Secured Note Dec 2018 Three | ||||||||||||||||||||
Notes payable | 100,000 | 100,000 | 100,000 | |||||||||||||||||
Secured Note Dec 2018 Three | Minimum | ||||||||||||||||||||
Interest rate | 10% | |||||||||||||||||||
Secured Promissory Note January 2022 | ||||||||||||||||||||
Initial installment amount | 95,025 | |||||||||||||||||||
Monthly periodic payment | $ 15,275 | |||||||||||||||||||
Secured Note Dec 2018 Four | ||||||||||||||||||||
Notes payable | 275,000 | 275,000 | 792,470 | |||||||||||||||||
Interest rate | 6% | |||||||||||||||||||
Debt Instrument, Periodic Payment, Interest | $ 7,500 | |||||||||||||||||||
Number of monthly installments | item | 6 | |||||||||||||||||||
Secured Note May 2019 One | ||||||||||||||||||||
Convertible note principle amount | $ 100,000 | |||||||||||||||||||
Notes payable | 100,000 | 100,000 | 100,000 | |||||||||||||||||
Secured Note May 2019 One | Minimum | ||||||||||||||||||||
Interest rate | 10% | |||||||||||||||||||
Secured promissory note due on July 11 2022 | ||||||||||||||||||||
Notes payable | 115,826 | 115,826 | ||||||||||||||||||
Debt Instrument Payment | $ 2,372 | |||||||||||||||||||
Secured Note February 2020 One | ||||||||||||||||||||
Interest rate | 10% | |||||||||||||||||||
Notes payable | 2,000,000 | 2,000,000 | 2,000,000 | |||||||||||||||||
Various Secured Notes Payable Maturing From January 2023 Through March 2023 | ||||||||||||||||||||
Notes payable | $ 130,428 | $ 130,428 | 343,723 | |||||||||||||||||
Various Secured Notes Payable Maturing From January 2023 Through March 2023 | Maximum | ||||||||||||||||||||
Interest rate | 5.50% | 5.50% | ||||||||||||||||||
Various Secured Notes Payable Maturing From January 2023 Through March 2023 | Minimum | ||||||||||||||||||||
Interest rate | 5.32% | 5.32% | ||||||||||||||||||
Secured Convertible Notes Payable From August 2020 Through December 2021 | ||||||||||||||||||||
Interest rate | 10% | 10% | ||||||||||||||||||
Convertible notes, related party balance | $ 7,306,740 | $ 7,306,740 | ||||||||||||||||||
Due from related parties | $ 6,306,740 | $ 6,306,740 | ||||||||||||||||||
Conversion price per share | $ / shares | $ 0.10 | $ 0.10 | ||||||||||||||||||
Secured Note February 2020 Two | ||||||||||||||||||||
Interest rate | 10% | |||||||||||||||||||
Notes payable | $ 194,653 | $ 194,653 | 545,050 | |||||||||||||||||
Secured Promissory Notes | ||||||||||||||||||||
Convertible note principle amount | 275,000 | $ 1,600,000 | $ 1,600,000 | 1,600,000 | ||||||||||||||||
Interest rate | 3.75% | 3.75% | ||||||||||||||||||
Notes payable | $ 390,000 | $ 390,000 | 390,000 | |||||||||||||||||
Secured Promissory Notes, June 2020 | ||||||||||||||||||||
Notes payable | 490,530 | 490,530 | 784,261 | |||||||||||||||||
Monthly periodic payment | $ 45,585 | |||||||||||||||||||
Secured Promissory Notes, June 2020 | Minimum | ||||||||||||||||||||
Number of monthly installments | installment | 36 | |||||||||||||||||||
Insurance Premium Financing Note December 2021 | ||||||||||||||||||||
Convertible note principle amount | $ 1,353,151 | $ 1,353,151 | ||||||||||||||||||
Interest rate | 4.76% | 4.76% | ||||||||||||||||||
Monthly periodic payment | $ 138,285 | |||||||||||||||||||
Insurance premium financing note May 2023 | ||||||||||||||||||||
Convertible note principle amount | $ 1,677,968 | $ 1,677,968 | ||||||||||||||||||
Interest rate | 8% | 8% | ||||||||||||||||||
Monthly periodic payment | $ 174,154 | |||||||||||||||||||
Insurance premium financing note maturing on February 14, 2023 | ||||||||||||||||||||
Convertible note principle amount | $ 485,830 | $ 485,830 | ||||||||||||||||||
Interest rate | 5.47% | 5.47% | ||||||||||||||||||
Monthly periodic payment | $ 49,809 | |||||||||||||||||||
Amerisource Note | ||||||||||||||||||||
Convertible note principle amount | $ 1,600,000 | |||||||||||||||||||
Interest rate | 12% | 11% | ||||||||||||||||||
Amortized total debt discount | 151,590 | |||||||||||||||||||
Unamortized debt discount amount | $ 0 | 0 | ||||||||||||||||||
Number of shares issued to investors | shares | 2,498,736 | |||||||||||||||||||
Interest rate | 10% | |||||||||||||||||||
Deferred Financing Cost | $ 419,788 | |||||||||||||||||||
Conversion price per share | $ / shares | $ 0.25 | |||||||||||||||||||
Secured Note June 2019 | ||||||||||||||||||||
Notes payable | 80,000 | 80,000 | 80,000 | |||||||||||||||||
Secured Note June 2019 | Minimum | ||||||||||||||||||||
Interest rate | 10% | |||||||||||||||||||
Unsecured payable for settlement of lawsuit | ||||||||||||||||||||
Convertible note principle amount | $ 196,188 | 196,188 | ||||||||||||||||||
Monthly payment amount | $ 6,822 | |||||||||||||||||||
Unsecured payable for settlement of lawsuit | Maximum | ||||||||||||||||||||
Interest rate | 18% | |||||||||||||||||||
Unsecured payable for settlement of lawsuit | Minimum | ||||||||||||||||||||
Interest rate | 6% | 6% | ||||||||||||||||||
Secured Promissory Note September 2021 | ||||||||||||||||||||
Interest rate | 12% | 12% | ||||||||||||||||||
Notes payable | 12,740,000 | $ 16,740,000 | $ 16,740,000 | 12,740,000 | ||||||||||||||||
Insurance Premium Financing Note May 2022 | ||||||||||||||||||||
Convertible note principle amount | $ 1,487,202 | $ 1,487,202 | ||||||||||||||||||
Interest rate | 6.99% | 6.99% | ||||||||||||||||||
Monthly periodic payment | $ 153,537 | |||||||||||||||||||
Insurance Premium Financing Note February 2022 | ||||||||||||||||||||
Convertible note principle amount | $ 292,065 | $ 292,065 | ||||||||||||||||||
Interest rate | 5.78% | 5.78% | ||||||||||||||||||
Monthly periodic payment | $ 7,793 | |||||||||||||||||||
Unsecured note payable with shareholder one | ||||||||||||||||||||
Debt instrument additional face amount | $ 895,025 | $ 895,025 | ||||||||||||||||||
Interest rate | 12% | 12% | ||||||||||||||||||
Unsecured note payable with shareholder two | ||||||||||||||||||||
Debt instrument additional face amount | $ 100,000 | $ 100,000 | ||||||||||||||||||
Interest rate | 12% | 12% | ||||||||||||||||||
Amount of debt, gross | $ 150,000 | $ 150,000 | ||||||||||||||||||
Unsecured note payable with shareholder three | ||||||||||||||||||||
Debt instrument additional face amount | $ 100,000 | $ 100,000 | ||||||||||||||||||
Interest rate | 12% | 12% | ||||||||||||||||||
Unsecured note payable with shareholder four | ||||||||||||||||||||
Convertible note principle amount | $ 150,000 | $ 150,000 | ||||||||||||||||||
Unsecured note payable with a shareholder five | ||||||||||||||||||||
Convertible note principle amount | $ 134,073 | $ 134,073 | ||||||||||||||||||
Interest rate | 12% | 12% | ||||||||||||||||||
Notes payable | ||||||||||||||||||||
Convertible note principle amount | $ 275,000 | |||||||||||||||||||
5J Entities | ||||||||||||||||||||
Notes payable | $ 688,315 | $ 688,315 | ||||||||||||||||||
Amortized total debt discount | 28,428 | |||||||||||||||||||
Unamortized debt discount amount | 0 | 0 | ||||||||||||||||||
Deferred Financing Cost | $ 223,558 | |||||||||||||||||||
5J Entities | Amended Loan Agreement With Amerisource Funding | ||||||||||||||||||||
Proceeds from issuance of debt | 4,000,000 | |||||||||||||||||||
5J Entities | Amended Loan Agreement With Amerisource Funding | Maximum | ||||||||||||||||||||
Convertible note principle amount | 16,740,000 | |||||||||||||||||||
5J Entities | Amended Loan Agreement With Amerisource Funding | Minimum | ||||||||||||||||||||
Convertible note principle amount | $ 12,740,000 | |||||||||||||||||||
5J Entities | Amerisource AR Facility | ||||||||||||||||||||
Convertible note principle amount | 10,000,000 | |||||||||||||||||||
Maximum borrowing capacity | $ 10,000,000 | |||||||||||||||||||
Maximum availability (as a percent) | 90% | |||||||||||||||||||
Basis spread on variable rate (as a percent) | 4.50% | |||||||||||||||||||
Initial collateral management fee (as a percent) | 0.75% | |||||||||||||||||||
Non-usage fee (as a percent) | 0.35% | |||||||||||||||||||
One time commitment fee | $ 100,000 | |||||||||||||||||||
Number of days written notice for termination of debt | 60 days | |||||||||||||||||||
Early termination fee, if more than 12months remaining in the debt term (as a percent) | 2% | |||||||||||||||||||
Early termination fee, if twelve months or less remaining in the debt term (as a percent) | 1% | |||||||||||||||||||
5J Entities | Amerisource Equipment Loan | ||||||||||||||||||||
Convertible note principle amount | $ 1,401,559 | |||||||||||||||||||
5J Entities | Amerisource Bridge Facility | ||||||||||||||||||||
Convertible note principle amount | $ 550,690 | |||||||||||||||||||
Common Stock | ||||||||||||||||||||
Shares issued for settlement of debt (in shares) | shares | 750,000 | |||||||||||||||||||
Shares issued for settlement of debt | $ 138,750 | |||||||||||||||||||
Outstanding accounts payable | $ 50,000 | |||||||||||||||||||
Convertible Notes Payable. | ||||||||||||||||||||
Convertible notes, related party balance | 1,229,098 | 1,229,098 | ||||||||||||||||||
Current portion of convertible note | 1,616,672 | |||||||||||||||||||
Convertible Notes Payable. | Notes Payable To Related Party | ||||||||||||||||||||
Current portion of convertible note | $ 2,620,145 | |||||||||||||||||||
Current portion of convertible note | 3,612,457 | 3,612,457 | ||||||||||||||||||
Convertible note payable, net | $ 3,049,201 | $ 3,049,201 | ||||||||||||||||||
Short term Bridge Note maturing on January, 2022 | ||||||||||||||||||||
Convertible note principle amount | 250,000 | 250,000 | ||||||||||||||||||
Short term Bridge Note maturing on January, 2022 | Newton Dorsett | ||||||||||||||||||||
Convertible note principle amount | $ 150,000 | |||||||||||||||||||
Interest rate | 12% | |||||||||||||||||||
Short term Bridge Note maturing on January, 2022 | Grey Fox Investments | ||||||||||||||||||||
Convertible note principle amount | $ 150,000 | |||||||||||||||||||
Interest rate | 12% | |||||||||||||||||||
Short term Bridge Note maturing on January, 2022 | Mr. Madden | ||||||||||||||||||||
Convertible note principle amount | $ 150,000 | |||||||||||||||||||
Interest rate | 12% | |||||||||||||||||||
Short term Bridge Note maturing on March, 2022 | James Frye | ||||||||||||||||||||
Convertible note principle amount | $ 134,073 | |||||||||||||||||||
Number of shares issued to investors | shares | 201,110 | |||||||||||||||||||
Short term Bridge Note maturing on March, 2022 | Mr. Madden | ||||||||||||||||||||
Convertible note principle amount | $ 450,000 | $ 250,000 | $ 95,025 | |||||||||||||||||
Number of shares issued to investors | shares | 675,000 | 375,000 | 142,538 |
NOTES PAYABLE - Future maturiti
NOTES PAYABLE - Future maturities of secured notes payable (Details) | Sep. 30, 2022 USD ($) |
NOTES PAYABLE | |
2022 | $ 23,701,540 |
2023 | 8,887,796 |
2024 | 4,618,792 |
2025 | 5,114,297 |
2026 | 160,673 |
Thereafter | 209,599 |
Total | $ 42,692,697 |
STOCKHOLDERS' DEFICIT (Details)
STOCKHOLDERS' DEFICIT (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 29, 2022 | Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Value of shares issued for deferred financing costs | $ 397,773 | $ 397,773 | ||||
Shares issued for settlement of debt | $ 138,750 | |||||
Interest expense | $ 2,635,875 | $ 2,059,908 | $ 7,433,606 | $ 4,630,685 | ||
Secured Debt | ||||||
Shared issued | 720,000 | 720,000 | ||||
Secured notes payable | $ 480,000 | |||||
Unsecured Debt. | ||||||
Shared issued | 2,585,487 | 2,585,487 | ||||
Unsecured notes payable | $ 1,723,657 | |||||
Common Stock | ||||||
Number of shares issued to lender | 1,393,648 | 1,393,648 | ||||
Shares issued for settlement of debt (in shares) | 750,000 | |||||
Shares issued for settlement of debt | $ 138,750 | |||||
Common Stock | Fair Value, Recurring | ||||||
Interest expense | $ 643,467 |
STOCK OPTIONS AND WARRANTS - St
STOCK OPTIONS AND WARRANTS - Stock option (Details) - Employee Stock Option - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Outstanding - Aggregate Number - Beginning Balance | 1,575,000 | |
Cancelled, Forfeited or Expired - Aggregate Number | (50,000) | |
Outstanding - Aggregate Number - Ending Balance | 1,525,000 | |
Exercisable - Aggregate Number | 1,186,111 | |
Outstanding - Aggregate Exercise Price - Beginning Balance | $ 561,250 | |
Cancelled, forfeited or expired - Aggregate Exercise Price | (15,000) | |
Outstanding - Aggregate Exercise Price - Ending Balance | 546,250 | |
Exercisable - Aggregate Exercise Price | $ 444,583 | |
Cancelled, forfeited or expired - Exercise Price Range | $ 0.30 | |
Outstanding - Weighted Average Exercise Price - Beginning Balance | 0.36 | |
Cancelled, Forfeited or Expired - Weighted Average Exercise Price | 0.30 | |
Outstanding - Weighted Average Exercise Price - Ending Balance | 0.36 | |
Outstanding - Exercisable Weighted Average Exercise Price | 0.37 | |
Minimum | ||
Outstanding - Exercise Price Range | 0.25 | $ 0.25 |
Exercisable - Exercise Price Range | 0.25 | |
Maximum | ||
Outstanding - Exercise Price Range | 0.75 | $ 0.75 |
Exercisable - Exercise Price Range | $ 0.75 |
STOCK OPTIONS AND WARRANTS - _2
STOCK OPTIONS AND WARRANTS - Stock warrant information (Details) - Warrant | 9 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | |
Outstanding - Aggregate Number - Beginning Balance | shares | 1,763,335 |
Granted - Aggregate Number | shares | 0 |
Exercised - Aggregate Number | shares | 0 |
Cancelled, Forfeited or Expired - Aggregate Number | shares | 0 |
Outstanding - Aggregate Number - Ending Balance | shares | 1,763,335 |
Exercisable - Aggregate Number | shares | 1,763,335 |
Outstanding - Aggregate Exercise Price - Beginning Balance | $ | $ 496,667 |
Granted - Aggregate Exercise Price | $ | 0 |
Exercised - Aggregate Exercise Price | $ | 0 |
Cancelled, forfeited or expired - Aggregate Exercise Price | $ | 0 |
Outstanding - Aggregate Exercise Price - Ending Balance | $ | 496,667 |
Exercisable - Aggregate Exercise Price | $ | $ 496,667 |
Granted - Exercise Price Range | $ 0 |
Exercised - Exercise Price Range | 0 |
Cancelled, Forfeited or Expired - Exercise Price Range | 0 |
Outstanding - Weighted Average Exercise Price - Beginning Balance | 0.28 |
Granted - Weighted Average Exercise Price | 0 |
Exercised - Weighted Average Exercise Price | 0 |
Cancelled, Forfeited or Expired - Weighted Average Exercise Price | 0 |
Outstanding - Weighted Average Exercise Price - Ending Balance | 0.28 |
Exercisable - Weighted Average Exercise Price | 0.28 |
Minimum | |
Outstanding - Exercise Price Range - Beginning Balance | 0.15 |
Outstanding - Exercise Price Range - Ending Balance | 0.15 |
Exercisable - Exercise Price Range | 0.15 |
Maximum | |
Outstanding - Exercise Price Range - Beginning Balance | 0.75 |
Outstanding - Exercise Price Range - Ending Balance | 0.75 |
Exercisable - Exercise Price Range | $ 0.75 |
STOCK OPTIONS AND WARRANTS - Ad
STOCK OPTIONS AND WARRANTS - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Stock Option | |
Weighted average remaining contractual life of stock options | 2 years 2 months 4 days |
Intrinsic value of outstanding stock option | $ 0 |
Warrant | |
weighted average remaining contractual life of stock warrants | 4 years 4 months 6 days |
Aggregate intrinsic value of stock warrants | $ 11,725 |
DISPOSITION OF BUSINESSES - MG
DISPOSITION OF BUSINESSES - MG Cleaners LLC (Details) - USD ($) | 1 Months Ended | ||||
Dec. 22, 2020 | Feb. 28, 2021 | Dec. 31, 2020 | Sep. 30, 2022 | Dec. 31, 2021 | |
DISPOSITION OF BUSINESSES | |||||
Par value | $ 0.001 | $ 0.001 | |||
Mg Cleaners Llc | |||||
DISPOSITION OF BUSINESSES | |||||
Number of shares returned | 1,408,276 | ||||
Par value | $ 0.001 | ||||
Total purchase price | $ 150,000 | ||||
Payment of consideration in cash | $ 75,000 | $ 75,000 | |||
Payments of consideration through sale of equipment | 40,000 | ||||
Payments of consideration to MG Cleaners | $ 35,000 |
DISPOSITION OF BUSINESSES - Bal
DISPOSITION OF BUSINESSES - Balance sheets (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Balance sheets of Trinity and MG combined | ||
Current assets of discontinued operations | $ 17,435 | $ 17,446 |
Other assets | 1,500 | 1,500 |
Current liabilities of discontinued operations | 414,161 | 588,283 |
Long term liabilities of discontinued operations | 310,359 | 381,746 |
Discontinued operation by sale | Trinity and MG | ||
Balance sheets of Trinity and MG combined | ||
Cash and cash equivalents | 11 | |
Accounts receivable, net | 17,011 | 17,011 |
Prepaid expenses and other current assets | 424 | 424 |
Current assets of discontinued operations | 17,435 | 17,446 |
Other assets | 1,500 | 1,500 |
Other assets of discontinued operations | 1,500 | 1,500 |
Total assets of discontinued operations | 18,935 | 18,946 |
Accounts payable | 230,463 | 400,659 |
Accrued expenses and other liabilities | 183,698 | 187,624 |
Current liabilities of discontinued operations | 414,161 | 588,283 |
Notes payable - secured, net of current portion | 150,000 | 150,000 |
Notes payable - unsecured, net of current portion | 160,359 | 231,746 |
Long term liabilities of discontinued operations | 310,359 | 381,746 |
Total liabilities of discontinued operations | $ 724,520 | $ 970,029 |
DISPOSITION OF BUSINESSES - Sta
DISPOSITION OF BUSINESSES - Statements of operations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statements of operations of Trinity and MG | ||||
Gain on settlement of debt | $ 564,814 | $ 564,814 | ||
Discontinued operation by sale | Trinity and MG | ||||
Statements of operations of Trinity and MG | ||||
Revenues | $ 157,620 | |||
Cost of revenues | $ (1,972) | (223,659) | ||
Selling, general and administrative | (24,927) | (271,016) | ||
Loss from operations | (26,899) | (337,055) | ||
Gain on forgiveness of PPP loan | 177,243 | 373,712 | ||
Gain on asset sale | 186,273 | 389,024 | ||
Other income (expense) | (11,467) | (27,545) | 32,565 | |
Interest income (expense), net | (2,852) | (8,224) | (8,545) | (98,039) |
Net income (loss) from discontinued operations | $ (2,852) | $ 316,926 | $ (36,090) | $ 360,207 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) M | |
COMMITMENTS AND CONTINGENCIES | ||
Letter of credit as collateral for insurance policy | $ 1,104,207 | |
Unsecured payable for settlement of lawsuit | ||
COMMITMENTS AND CONTINGENCIES | ||
Monthly Payment | 6,822 | |
Outstanding balance | $ 23,390 | |
Unsecured payable for settlement of lawsuit | 5J Trucking and James E Frye | ||
COMMITMENTS AND CONTINGENCIES | ||
Settlement amount of outstanding accounts payable | $ 196,188 | |
Outstanding Accounts Payable Upon Execution | $ 50,000 | |
Number of monthly payments | M | 24 | |
Monthly Payment | $ 6,822 |
LEASES (Details)
LEASES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Finance lease cost | ||||
Operating lease cost | $ 134,792 | $ 271,356 | $ 569,983 | $ 661,870 |
Short-term lease cost | 76,086 | 37,487 | 343,399 | 159,077 |
Total lease cost | 210,878 | $ 308,843 | 913,382 | $ 820,947 |
Right of use asset derecognized | 2,120,881 | 2,120,881 | ||
Right of use lease liabilities derecognized | $ 2,260,803 | 2,260,803 | ||
Gain on lease termination | 139,922 | |||
Expense on lease termination | $ 120,000 | |||
Minimum | ||||
LEASES | ||||
Operating lease, lease term | 1 year | 1 year | ||
Finance lease, lease term | 1 year | 1 year | ||
Maximum | ||||
LEASES | ||||
Operating lease, lease term | 4 years | 4 years | ||
Finance lease, lease term | 4 years | 4 years |
LEASES - Supplemental cash flow
LEASES - Supplemental cash flow information (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 75,758 | $ 277,329 |
LEASES - Lease-related assets a
LEASES - Lease-related assets and liabilities (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Lease Position | ||
Operating lease right-of-use assets | $ 851,382 | $ 3,312,710 |
Right of use liability operating lease current portion | 633,110 | 816,671 |
Right of use liability operating lease long term | 392,950 | 2,545,950 |
Total operating lease liabilities | $ 1,026,060 | $ 3,362,621 |
LEASES - Other information (Det
LEASES - Other information (Details) | Sep. 30, 2022 | Dec. 31, 2021 |
Weighted-average remaining lease term (years) | ||
Operating leases | 12 years 1 month 6 days | 3 years 8 months 12 days |
Weighted-average discount rate | ||
Operating leases | 8.60% | 10.90% |
LEASES - Maturities of lease li
LEASES - Maturities of lease liabilities (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
LEASES | ||
2022 (Three months remaining) | $ 298,642 | |
2023 | 513,325 | |
2024 | 267,583 | |
2025 | 23,347 | |
2026 and thereafter | 0 | |
Total future undiscounted lease payments | 1,102,897 | |
Less: Interest | (76,837) | |
Total operating lease liabilities | $ 1,026,060 | $ 3,362,621 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) lease | |
RELATED PARTY TRANSACTIONS | |
Related party transaction rental services | $ 290,065 |
Revenue from related parties | 21,825 |
Convertible notes payable | |
RELATED PARTY TRANSACTIONS | |
Notes payable to related parties | $ 1,229,098 |
Five J Properties LLC | |
RELATED PARTY TRANSACTIONS | |
Number of leases with related party | lease | 3 |
Terms of leases | 5 years |
Lessee, operating lease, existence of option to extend [true false] | true |
Current monthly rent payments for all leases with related party | $ 14,250 |