Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 20, 2019 | Jun. 29, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | SG BLOCKS, INC. | ||
Entity Central Index Key | 0001023994 | ||
Trading Symbol | SGBX | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Shell Company | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Ex Transition Period | false | ||
Entity Public Float | $ 18,446,674 | ||
Entity Common Stock, Shares Outstanding | 4,260,041 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 1,368,395 | $ 4,870,824 |
Short-term investment | 30,033 | |
Accounts receivable, net | 1,746,326 | 3,005,875 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 260,325 | 61,175 |
Prepaid expenses and other current assets | 986,687 | 183,890 |
Total current assets | 4,361,733 | 8,151,797 |
Property, plant and equipment, net | 71,337 | 6,796 |
Goodwill | 4,162,173 | 4,162,173 |
Intangible assets, net | 2,443,929 | 3,028,247 |
Total Assets | 11,039,172 | 15,349,013 |
Current liabilities: | ||
Accounts payable and accrued expenses | 2,624,218 | 2,148,091 |
Billings in excess of costs and estimated earnings on uncompleted contracts | 1,334,887 | 1,673,048 |
Total current liabilities | 3,959,105 | 3,821,139 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $1.00 par value, 5,405,010 shares authorized; none issued or outstanding | ||
Common stock, $0.01 par value, 300,000,000 shares authorized; 4,260,041 issued and outstanding as of December 31, 2018 and 2017, respectively | 42,601 | 42,601 |
Additional paid-in capital | 17,700,743 | 17,304,529 |
Accumulated deficit | (10,663,277) | (5,819,256) |
Total stockholders’ equity | 7,080,067 | 11,527,874 |
Total Liabilities and Stockholders’ Equity | $ 11,039,172 | $ 15,349,013 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 5,405,010 | 5,405,010 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 4,260,041 | 4,260,041 |
Common stock, shares outstanding | 4,260,041 | 4,260,041 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue: | ||
Revenue | $ 8,190,712 | $ 5,061,585 |
Cost of revenue: | ||
Cost of revenue | 7,647,979 | 4,427,778 |
Gross profit | 542,733 | 633,807 |
Operating expenses: | ||
Payroll and related expenses | 2,166,212 | 1,813,446 |
General and administrative expenses | 2,760,655 | 1,753,236 |
Marketing and business development expense | 387,400 | 271,092 |
Pre-project expenses | 74,629 | 57,192 |
Total | 5,388,896 | 3,894,966 |
Operating loss | (4,846,163) | (3,261,159) |
Other income (expense): | ||
Interest expense | (330,388) | |
Interest income | 4 | 15 |
Other income | 5,764 | 1,000 |
Loss on debt conversion | (1,018,475) | |
Change in fair value of financial instruments | 96,327 | |
Loss from equity affiliates | (3,626) | |
Total | 2,142 | (1,251,521) |
Loss before income taxes | (4,844,021) | (4,512,680) |
Income tax expense | ||
Net loss | $ (4,844,021) | $ (4,512,680) |
Net loss per share - basic and diluted: | ||
Basic and diluted | $ (1.14) | $ (1.95) |
Weighted average shares outstanding: | ||
Basic and diluted | 4,260,041 | 2,310,066 |
Blocks sales | ||
Revenue: | ||
Revenue | $ 57,522 | |
Cost of revenue: | ||
Cost of revenue | 44,112 | |
Construction services | ||
Revenue: | ||
Revenue | 7,306,654 | 4,638,053 |
Cost of revenue: | ||
Cost of revenue | 6,985,439 | 4,095,509 |
Engineering services | ||
Revenue: | ||
Revenue | 826,536 | 423,532 |
Cost of revenue: | ||
Cost of revenue | $ 618,428 | $ 332,269 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Total | 0.01 Par Value Common Stock | Preferred Stock | Additional Paid-in Capital | Accumulated Deficit |
Beginning Balance at Dec. 31, 2016 | $ 5,433,295 | $ 1,639 | $ 1,801,670 | $ 4,936,562 | $ (1,306,576) |
Beginning Balance, Shares at Dec. 31, 2016 | 163,901 | ||||
Stock-based compensation | 701,402 | 701,402 | |||
Exercise of stock options | $ 8,409 | $ 28 | 8,381 | ||
Exercise of stock options, Shares | 2,803 | 2,803 | |||
Conversion of preferred stock | $ 18,017 | (1,801,670) | 1,783,653 | ||
Conversion of preferred stock, Shares | 1,801,670 | ||||
Issuance of common stock, net of issuance costs | 7,059,614 | $ 17,250 | 7,042,364 | ||
Issuance of common stock, net of issuance costs, Shares | 1,725,000 | ||||
Issuance of common stock for services | 254,500 | $ 500 | 254,000 | ||
Issuance of common stock for services, Shares | 50,000 | ||||
Conversion of convertible debentures | 2,583,334 | $ 5,167 | 2,578,167 | ||
Conversion of convertible debentures, Shares | 516,667 | ||||
Net loss | (4,512,680) | (4,512,680) | |||
Ending Balance at Dec. 31, 2017 | 11,527,874 | $ 42,601 | 17,304,529 | (5,819,256) | |
Ending Balance, Shares at Dec. 31, 2017 | 4,260,041 | ||||
Stock-based compensation | $ 396,214 | 396,214 | |||
Exercise of stock options, Shares | |||||
Net loss | $ (4,844,021) | (4,844,021) | |||
Ending Balance at Dec. 31, 2018 | $ 7,080,067 | $ 42,601 | $ 17,700,743 | $ (10,663,277) | |
Ending Balance, Shares at Dec. 31, 2018 | 4,260,041 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (4,844,021) | $ (4,512,680) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expense | 6,764 | 2,955 |
Amortization of intangible assets | 589,619 | 587,823 |
Amortization of discount on convertible debentures | 330,388 | |
Bad debt expense | 810,580 | |
Interest income on short-term investment | (4) | (15) |
Change in fair value of financial instruments | (96,327) | |
Loss on conversion of convertible instruments | 1,018,475 | |
Non-cash consultant fee | 254,500 | |
Stock-based compensation | 396,214 | 701,402 |
Loss on equity affiliates | 3,626 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 448,969 | (2,771,357) |
Cost and estimated earnings in excess of billings on uncompleted contracts | (199,150) | (27,826) |
Inventory | 9,445 | |
Prepaid expenses and other current assets | (802,797) | (59,170) |
Intangible asset | (28,820) | |
Accounts payable and accrued expenses | 476,127 | 1,797,318 |
Billings in excess of costs and estimated earnings on uncompleted contracts | (338,161) | 1,624,570 |
Deferred revenue | (72,788) | |
Net cash used in operating activities | (3,452,234) | (1,242,107) |
Cash flows provided by investing activities: | ||
Proceeds from short-term investment | 30,037 | |
Purchase of property, plant and equipment | (71,306) | (4,192) |
Purchase of intangible asset | (5,300) | |
Investment in and advances to equity affiliates | (3,626) | |
Net cash used in investing activities | (50,195) | (4,192) |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options | 8,409 | |
Proceeds from public stock offering, net of issuance costs | 7,059,614 | |
Payments on convertible debentures | (1,500,000) | |
Net cash provided by financing activities | 5,568,023 | |
Net increase (decrease) in cash and cash equivalents | (3,502,429) | 4,321,724 |
Cash and cash equivalents - beginning of period | 4,870,824 | 549,100 |
Cash and cash equivalents - end of period | 1,368,395 | 4,870,824 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Conversion of convertible debentures to common stock | 2,583,334 | |
Conversion of preferred stock to common stock | $ 1,801,670 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2018 | |
Description of Business [Abstract] | |
Description of Business | 1 Description of Business SG Blocks, Inc. (collectively with its subsidiaries, the “Company”) was previously known as CDSI Holdings, Inc., a Delaware corporation incorporated on December 29, 1993. On November 4, 2011, CDSI Merger Sub, Inc., the Company’s wholly-owned subsidiary was merged with and into SG Building Blocks, Inc. (“SG Building,” formerly SG Blocks Inc.) (the “Merger”), with SG Building surviving the Merger and becoming a wholly-owned subsidiary of the Company. The Merger was a reverse merger that was accounted for as a recapitalization of SG Building as SG Building was the accounting acquirer. Accordingly, the historical financial statements presented are the financial statements of SG Building. The Company provides two TM , code engineered cargo shipping containers that the Company modifies for use in construction. Rather than consuming new steel and lumber, SGBlocks TM capitalize on the structural engineering and design parameters a shipping container must meet and repurposes them for use in building. They offer the construction industry a safer, greener, faster, longer lasting and more economical alternative to conventional construction methods. The Company also provides purpose-built modules (“SGPBMs” and, together with SGBlocks TM , “Modules”), which are prefabricated steel modular units created specifically for use in modular construction, unlike the shipping containers used to create SGBlocks TM . The Company also provides engineering and project management services related to the use of Modules in construction. Reverse Stock Split On February 28, 2017, the Company effected a 1-for-3 reverse stock split of its then-outstanding common stock and preferred stock, which has since been converted. All share and per share amounts set forth in the consolidated financial statements of the Company have been retroactively restated to reflect the split as if it had occurred as of the earliest period presented. Public Offering On June 27, 2017, the Company completed a public offering of its common stock (the “Public Offering”). In connection with the Public Offering, the Company sold 1,500,000 In connection with the Public Offering and as compensation to the underwriters, the Company issued warrants to purchase an aggregate of 86,250 shares of the Company’s common stock, at an exercise price of $6.25 per share, to certain affiliates of the underwriters. See Note 12 The Company incurred a total of $1,565,386 in issuance costs in connection with the Public Offering. As of December 31, 2018 |
Liquidity
Liquidity | 12 Months Ended |
Dec. 31, 2018 | |
Liquidity [Abstract] | |
Liquidity | 2. Liquidity T he Company ha As of December 31, 2018 2018 Within 1 $ 22,563,674 1 2 54,639,417 Thereafter 20,454,288 Total Backlog $ 97,657,379 Based on the expected conversion timeline of its backlog, the Company expects to generate positive cash flows from operations for the year ending December 31, 2019. The Company believes that it has adequate cash balances to meet obligations coming due in the next twelve and further intends to meet its capital needs by containing costs, entering into strategic alliances as well as exploring other options, including the possibility of raising additional debt or equity capital as necessary. There is, however, no assurance the Company will be successful in meeting its capital requirements prior to becoming cash flow positive. We do not have any additional sources secured for future funding, and if we are unable to raise the necessary capital at the times we require such funding, we may need to materially change our business plan, including delaying implementation of aspects of such business plan or curtailing or abandoning such business plan altogether. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3 Summary of Significant Accounting Policies Basis of presentation and principals of consolidation – The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the applicable rules and regulations of the United States Securities and Exchange Commission (“SEC”) and include the accounts of the Company and its wholly owned subsidiaries, SG Building Blocks, Inc. and SG Residential, Inc. All intercompany balances and transactions are eliminated. Certain prior period amounts have been reclassified to conform to the current period’s presentation. Recently adopted accounting pronouncements - New accounting pronouncements implemented by the Company during the year ended December 31, 2018 are discussed below or in the related notes, where appropriate. In May 2014, the FASB issued ASU No. 2014 09 606 606 606 605 605 606 In accordance with ASC 606 606 605 606 606 606 Recently issued accounting pronouncements not yet adopted In February 2016, the FASB issued ASU No. 2016 02 842 2016 02 2016 02 twelve 2018 11 842 2018 11 2018 11 2018 10 842 2018 10 2016 02 2016 02 2018 10 2018 11 2016 02 December 31, 2018 2016 02 In January 2017, the FASB issued ASU No. 2017 04 2017 04 2 2017 04 In June 2018, the FASB issued ASU No. 2018 07 718 2018 07 718 2018 07 718 2018 07 718 1 2 606 2018 07 In August 2018, the FASB issued ASU No. 2018 13 2018 13 820 3 2018 13 2018 13 Accounting estimates Operating cycle – The length of the Company’s contracts varies, but is typically between six twelve twelve one year Revenue recognition – On January 1, 2018, the Company adopted the following : ASU 2014 09 2014 09 five ASU 2016 08 2014 09 2016 08 2016 08 ASU 2016 10 2014 09 2016 10 2016 10 ASU 2016 12 2014 09 ASU 2016 20 606 The adoption of ASC 606 five 606 ( 1 Identify the contract with a customer ( 2 Identify the performance obligations in the contract ( 3 Determine the transaction price ( 4 Allocate the transaction price to performance obligations in the contract ( 5 Recognize revenue as performance obligations are satisfied The new revenue recognition standard requires the Company to determine, at contract inception, whether it will transfer control of a promised good or service over time or at a point in time—regardless of the length of contract or other factors. The Company now applies recognition of revenue over time, which is similar to the method the Company applied under previous guidance (i.e., percentage of completion). Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress toward complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. Disaggregation of Revenues The Company’s revenues are principally derived from construction and engineering contracts related to Modules. Our contracts are with many different customers in numerous industries. The following tables provide further disaggregation of the Company’s revenues by categories: Twelve Months Ended December 31, Revenue by Customer Type 2018 2017 Multi-Family $ 344,968 4 % $ — — Office 2,221,431 27 % 1,384,967 28 % Retail 2,332,654 29 % 514,428 10 % School 2,697,451 33 % 3,122,035 62 % Special Use 559,755 7 % 22,838 — Other 34,453 — 17,317 — Total revenue by customer type $ 8,190,712 100 % $ 5,061,585 100 % Contract Assets and Contract Liabilities Accounts receivable are recognized in the period when the Company’s right to consideration is unconditional. Accounts receivable are recognized net of an allowance for doubtful accounts. A considerable amount of judgment is required in assessing the likelihood of realization of receivables. The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets include unbilled amounts from long-term construction services when revenue recognized under the cost-to-cost measure of progress exceeds the amounts invoiced to customers, as the amounts cannot be billed under the terms of our contracts. Such amounts are recoverable from customers based upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of a contract. Contract assets are generally classified as current within the consolidated balance sheets and labeled as “costs and estimated earnings in excess of billings on uncompleted contracts”. Contract liabilities from construction and engineering contracts occur when amounts invoiced to customers exceed revenues recognized under the cost-to-cost measure of progress. Contract liabilities additionally include advanced payments from customers on certain contracts. Contract liabilities decrease as the Company recognizes revenue from the satisfaction of the related performance obligation. Contract liabilities are generally classified as current within the consolidated balance sheet and labeled as “billings in excess of costs and estimated earnings on uncompleted contracts”. Although the Company believes it has established adequate procedures for estimating costs to complete on open contracts, it is at least reasonably possible that additional significant costs could occur on contracts prior to completion. The Company periodically evaluates and revises its estimates and makes adjustments when they are considered necessary. Impact of the Adoption of ASC 606 Prior to implementing ASC 606 606 Cash and cash equivalents – The Company considers cash and cash equivalents to include all short-term, highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three $ for the years ended December 31, 2018 and 2017 Short-term investment – The Company classifies its investment consisting of a certificate of deposit with a maturity greater than three one no Accounts receivable and allowance for doubtful accounts – Accounts receivable are receivables generated from sales to customers and progress billings on performance type contracts. Amounts included in accounts receivable are deemed to be collectible within the Company’s operating cycle. The Company recognizes account receivable at invoiced amounts. The allowance for doubtful accounts reflects the Company's best estimate of probable losses inherent in the accounts receivable balances. Management provides an allowance for doubtful accounts based on the Company’s historical losses, specific customer circumstances, and general economic conditions. Periodically, management reviews accounts receivable and adjusts the allowance based on current circumstances and charges off uncollectible receivables when all attempts to collect have been exhausted and the prospects for recovery are remote. Recoveries are recognized when they are received. Actual collection losses may differ from our estimates and could be material to our consolidated financial position, result of operations, and cash flows. Inventory – Raw construction materials (primarily shipping containers) are valued at the lower of cost (first-in, first-out method) or net realizable value. Finished goods and work-in-process inventories are valued at the lower of cost or net realizable value, using the specific identification method. There was no inventory as of December 31, 2018 2017 Goodwill – The Company performs its impairment test of goodwill at the reporting unit level each fiscal year, or more frequently if events or circumstances change that would more likely than not reduce the fair value of its reporting unit below its carrying values. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, management conducts a two December 31, 2018 Intangible assets – Intangible assets represent the preliminary assets identified upon emergence from bankruptcy and consist of $ 2,766,000 20 1,113,000 2.5 28,820 $ 5,300 5 December 31, 2018 December 31, 2018 December 31, 2017 five For the year ending December 31,: 2019 $ 145,124 2020 145,124 2021 145,124 2022 140,801 2023 139,006 Thereafter 1,728,750 $ 2,443,929 Property, plant and equipment – Property, plant and equipment is stated at cost. Depreciation is computed using the straight-line method over the estimated lives of each asset. Estimated useful life for significant classes of assets are as follows: computer and software 3 to 5 years and equipment o Convertible instruments – The Company bifurcates conversion options from their host instruments and accounts for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Common stock purchase warrants and other derivative financial instruments – The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) provides a choice of net-cash settlement or settlement in the Company’s own shares (physical settlement or net-share settlement) providing that such contracts are indexed to the Company’s own stock. The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if any event occurs and if that event is outside the Company’s control) or (ii) gives the counterparty a choice of net-cash settlement or settlement shares (physical settlement or net-cash settlement). The Company assesses classification of common stock purchase warrants and other free standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities or equity is required. Fair value measurements – Financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities are carried at cost, which the Company believes approximates fair value due to the short-term nature of these instruments. The Company measures the fair value of financial assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The Company uses three Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Quoted prices for similar assets and liabilities in active markets or inputs that are observable. Level 3 Inputs that are unobservable (for example, cash flow modeling inputs based on assumptions). Financial assets and liabilities measured at fair value on a recurring basis are summarized below: Short-term investment: The Company had $30,033 in a short-term investment as of December 31, 2017 2 December 31, 2018 December 31, 2017 Quoted prices in active market for identical assets (Level l) Significant other observable inputs (Level 2 Significant unobservable inputs (Level 3 Short-term investment $ 30,033 $ — $ 30,033 $ — Conversion option liabilities: Conversion option liabilities are measured at fair value using the Black-Scholes model and are classified within Level 3 3 3 The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 For the year ended December 31, 2017 Beginning balance $ 384,461 Aggregate fair value of conversion option liabilities issued — Change in fair value related to conversion of convertible debentures (288,134 ) Change in fair value of conversion option liabilities (96,327 ) Ending balance $ — The Company presented conversion option liabilities at fair value on its consolidated balance sheets, with the corresponding changes in fair value recorded in the Company’s consolidated statements of operations for the applicable reporting periods. As disclosed in Note 7 the conversion option liabilities at the dates of issuance and the reporting dates of December 31, 2017 Share-based payments – The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, including non-employee directors, the fair value of a stock option award is measured on the grant date. The fair value amount is then recognized over the period services are required to be provided in exchange for the award, usually the vesting period. The Company recognizes stock-based compensation expense on a graded-vesting basis over the requisite service period for each separately vesting tranche of each award. Stock-based compensation expense to employees and all directors are reported within payroll and related expenses in the consolidated statements of operations. Stock-based compensation expense to non-employees is reported within marketing and business development expense in the consolidated statements of operations. Income taxes – The Company accounts for income taxes utilizing the asset and liability approach. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for income taxes generally represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from the differences between the financial and tax bases of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. The calculation of tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for anticipated tax audit issues based on the Company’s estimate of whether, and the extent to which, additional taxes will be due. If payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when the liabilities are no longer determined to be necessary. If the estimate of tax liabilities proves to be less than the ultimate assessment, a further charge to expense would result. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. A valuation allowance for such tax assets and loss carryforwards is provided when it is determined to be more likely than not that the benefit of such deferred tax asset will not be realized in future periods. If it becomes more likely than not that a tax asset will be used, the related valuation allowance on such assets would be reduced. Impact of the Tax Cuts and Jobs Act The TCJA was enacted in the United States on December 22, 2017 Among other things, the TCJA lowered the corporate tax rate from 35.0 21.0 one 2017 118 “Income Tax Accounting Implications of the Tax Cuts and Jobs Act” 118 118 The Company recognized the income tax effects of the TCJA in its consolidated financial statements for the year ended December 31, 2018 December 31, 2018 Concentrations of credit risk – Financial instruments, that potentially subject the Company to concentration of credit risk, consist principally of cash and cash equivalents. The Company places its cash with high credit quality institutions. At times, such amounts may be in excess of the FDIC insurance limits. The Company has not experienced any losses in such account and believes that it is not exposed to any significant credit risk on the account. With respect to receivables, concentrations of credit risk are limited to a few customers in the construction industry. The Company performs ongoing credit evaluations of its customers’ financial condition and, generally, requires no collateral from its customers other than normal lien rights. At December 31, 2018 2017 81 Revenue relating to three and two customers represented approximately 66% and 80% of the Company’s total revenue for the years ended December 31, 2018 2017 Cost of revenue relating to two and one December 31, 2018 2017 |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Receivable [Abstract] | |
Accounts Receivable | 4. Accounts Receivable At December 31, 2018 2017 2018 2017 Billed: Block sales $ 14,723 $ — Construction services 1,619,498 2,470,526 Engineering services 400,877 196,008 Retainage receivable 543,417 373,576 Other receivable 7,706 — Total gross receivables 2,586,221 3,040,110 Less: allowance for doubtful accounts ( 1 (839,895 ) (34,235 ) Total net receivables $ 1,746,326 $ 3,005,875 ( 1 The change in allowance for doubtful accounts is primarily due to unpaid billings on a contract that is currently in dispute. Receivables are December 31, 2017 as 2018 no 2017 no |
Contract Assets and Contract Li
Contract Assets and Contract Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Contract Assets and Contract Liabilities [Abstract] | |
Contract Assets and Contract Liabilities | 5 Contract Assets and Contract Liabilities Costs and estimated earnings on uncompleted contracts consisted of the following at December 31, 2018 2017 2018 2017 Costs incurred on uncompleted contracts $ 11,307,975 $ 3,681,965 Estimated earnings to date on uncompleted contracts 838,615 328,273 Gross contract assets 12,146,590 4,010,238 Less: billings to date (13,221,152 ) (5,622,111 ) Net contract assets (liabilities) $ (1,074,562 ) $ (1,611,873 ) The above amounts are included in the accompanying consolidated balance sheets under the following captions at December 31, 2018 2017 2018 2017 Costs and estimated earnings in excess of billings on uncompleted contracts $ 260,325 $ 61,175 Billings in excess of costs and estimated earnings on uncompleted contracts (1,334,887 ) (1,673,048 ) Net contract assets (liabilities) $ (1,074,562 ) $ (1,611,873 ) Although management believes it has established adequate procedures for estimating costs to complete on open contracts, it is at least reasonably possible that additional significant costs could occur on contracts prior to completion. The Company peri odically evaluates and revises its estimates and makes adjustments when they are considered necessary. |
Property, plant and equipment
Property, plant and equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, plant and equipment [Abstract] | |
Property, plant and equipment | 6 Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and amortization and depreciated using the straight-line method over their useful lives. At December 31, 2018 2017 2018 2017 Computer equipment and software $ 39,193 $ 28,370 Furniture and other equipment 63,479 2,997 Property, plant and equipment 102,672 31,367 Less: accumulated depreciation (31,335 ) (24,571 ) Property, plant and equipment, net $ 71,337 $ 6,796 Depreciation expense for the years ended December 31, 2018 2017 |
Convertible Debentures
Convertible Debentures | 12 Months Ended |
Dec. 31, 2018 | |
Convertible Debentures [Abstract] | |
Convertible Debentures | 7 Convertible Debentures O n June 30, 2016, the effective date of the bankruptcy plan, and pursuant to the terms of the bankruptcy plan, the Company entered into the Securities Purchase Agreement, dated June 30, 2016 , pursuant to which the Company sold, for a subscription price of $2,000,000, a 12% Original Issue Discount Senior Secured Convertible Debenture to $2,500,000 On November 17, 2016, the Company entered into a Securities Purchase Agreement with HCI, for which the Company sold, for a subscription price of $750,000, a 12% Original Issue Discount Senior Secured Convertible Debenture to HCI in the amount of $937,500, with a maturity date of June 30, 2018 (the “November 2016 OID” and, together with the Exit Facility, the “ 2016 . The November 2016 OID was convertible at HCI’s option at any time, in whole or in part, into shares of post-reverse split common stock at a ratio of 1 share for every $3.75 of debt. In connection with the Public Offering, HCI converted $1,937,500 of the 2016 2016 December 31, 2017 For the year ended December 31, 2017 In connection with the 2016 December 31, 2017 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
Income Taxes | 8 Income Taxes The Company’s provision (benefit) for income taxes consists of the following for the year ended December 31, 2018 and 2017 2018 2017 Deferred: Federal $ 94,031 $ 2,126,062 State and local (449,796 ) 200,294 Total deferred (355,765 ) 2,326,356 Total provision (benefit) for income taxes (355,765 ) 2,326,356 Less: valuation reserve 355,765 (2,326,356 ) Income tax provision $ — $ — A reconciliation of the federal statutory rate to 0% for the year ended December 31, 2018 2017 2018 2017 Benefit for income taxes at federal statutory rate 21.0 % 34.0 % State and local income taxes, net of federal benefit 7.4 7.4 Differences attributable to the Tax and Jobs Cut Act — (32.0 ) Differences attributable to change in state business apportionment — (4.7 ) Loss on debt conversion — (9.1 ) Prior year adjustment of taxes — (47.1 ) Other — (0.1 ) Less valuation allowance (28.4 ) 51.6 Effective income tax rate 0.0 % 0.0 % The tax effects of these temporary differences along with the net operating losses, net of an allowance for credits, have been recognized as deferred tax assets (liabilities) at December 31, 2018 2017 2018 2017 Net operating loss carryforward $ 2,786,519 $ 3,738,980 Bad debt reserve 238,194 9,709 Employee stock compensation 364,699 255,322 Intangible assets (684,722 ) (858,811 ) Depreciation (2,548 ) 2,567 Accrued expenses 89,861 — Charity 233 234 Net deferred tax asset 2,792,236 3,148,001 Valuation allowance (2,792,236 ) (3,148,001 ) Net deferred tax asset $ — $ — The Company establishes a valuation allowance, if based on the weight of available evidence, it is more likely than not that some portion or all of the deferred assets will not be realized. During 2018 certain adjustments were made to the Company’s net operating loss carryforward tax asset for IRC Section 382 limitations. 2018 2017 As of December 31, 2018 2030 2037 382 As required by the provisions of ASC 740 50 740 The Company recognizes interest and penalties related to uncertain tax positions in general and administrative expenses. As of December 31, 2018 2015 2017 |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Net Income (Loss) Per Share [Abstract] | |
Net Income (Loss) Per Share | 9 Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares consist of the common shares issuable upon the exercise of stock options and warrants. Potentially dilutive common shares are excluded from the calculation if their effect is antidilutive. At December 31, 2018 outstanding that could potentially dilute future net income (loss) per share. Because the Company had a net loss as of December 31, 2018 At December 31, 2017, there were options , including options to non-employees and non-directors, and warrants to purchase 938,392 and 86,250 shares of common stock, respectively, outstanding that could potentially dilute future net income (loss) per share. |
Construction Backlog
Construction Backlog | 12 Months Ended |
Dec. 31, 2018 | |
Construction Backlog [Abstract] | |
Construction Backlog | 10 Construction Backlog The following represents the backlog of signed construction and engineering contracts in existence at December 31, 2018 2017 December 31, 2018 December 31, 2017 2018 2017 Balance - beginning of period $ 76,659,029 $ 541,291 New contracts and change orders during the period 29,189,062 81,179,323 Subtotal 105,848,091 81,720,614 Less: contract revenue earned during the period (8,190,712 ) (5,061,585 ) Balance - end of period $ 97,657,379 $ 76,659,029 Backlog at December 31, 2018 2017 2018 55 15 $25 it into our pipeline until the customer completes a highest and best use analysis of the land. The Company’s remaining backlog as of December 31, 2018 represent the remaining transaction price of firm contracts for which work has not been performed and excludes unexercised contract options. $ 97,657,379 The Company expects to satisfy its backlog which represents the remaining unsatisfied performance obligation on contracts as of December 31, 2018 over the following period: 2018 Within 1 $ 22,563,674 1 2 54,639,417 Thereafter 20,454,288 Total Backlog $ 97,657,379 Although backlog reflects business that is considered to be firm, cancellations, deferrals or scope adjustments may occur. Backlog is adjusted to reflect any known project cancellations, revisions to project scope and cost and project deferrals, as appropriate. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | 11 Stockholders’ Equity Public Offering – In June 2017, the Company issued 1,500,000 shares of its common stock at $5.00 per share through the Public Offering. The Company incurred $1,388,615 in issuance costs from the Public Offering and issued 75,000 warrants valued at $55,475 to the underwriters (as discussed in Note 12 In July 2017, as permitted by the underwriting agreement entered into in connection with the Public Offering, the underwriters exercised their option to purchase an additional 225,000 shares of common stock at $5.00 per share. The Company incurred $176,771 in issuance costs from this issuance. In connection with this exercise, certain affiliates of the underwriters were granted additional warrants to purchase 11,250 shares of common stock in the aggregate valued at $8,321 (as discussed in Note 12 In connection with and prior to the Public Offering, the Company issued 1,801,670 shares of its common stock upon conversion of all outstanding New Preferred Stock. Also in connection with the Public Offering, the Company issued a total of 516,667 shares of its common stock upon conversion of an aggregate amount of $1,937,500 of the 2016 December 31, 2017 Issuance of Common Stock and Options for Services – In accordance with the Advisory Agreement (as defined below), a consultant was issued 50,000 shares of the Company’s common stock for services that were required to be performed by November 30, 2017. The fair market value of these shares amounted to $254,500 as of November 30, 2017 which were expensed as general and administrative expenses. The consultant also received options to purchase 50,000 shares, which vest upon the completion of certain performance conditions. Exercise of Stock Options – On November 20, 2017, 2,803 options to purchase the Company’s common stock were exercised at an exercise price of $3.00 per share. |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2018 | |
Warrants [Abstract] | |
Warrants | 12 Warrants In conjunction with the Public Offering, the Company issued to certain affiliates of the underwriters, as compensation, warrants to purchase an aggregate of 86,250 shares of common stock at an exercise price of $6.25 per share. The warrants are exercisable at the option of the holder on or after June 21, 2018 and expire June 21, 2023. The fair value of warrants was calculated utilizing a Black-Scholes model and amounted to $63,796. The fair market value of the warrants as of the date of issuance has been included in issuance costs in additional paid-in capital. |
Share-based Compensation
Share-based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Stock Options and Grants [Abstract] | |
Stock Options and Grants | 13 Share-based Compensation On October 26, 2016, the Company’s Board of Directors approved the issuance of up to 500,000 shares of the Company’s common stock in the form of restricted stock or options (“ 2016 Stock Plan”). Effective January 20, 2017, the 2016 Stock Plan was amended and restated as the SG Blocks, . Stock Incentive Plan, as further amended eff June 1, 2018 (the “Incentive Plan”). The Incentive Plan authorizes the issuance of up to shares of common stock. It authorizes the issuance of equity-based awards in the form of stock options, stock appreciation rights, restricted shares, restricted share units, other share-based awards and cash-based awards to non-employee directors and to officers, employees and consultants of the Company and its subsidiary, except that incentive stock options may only be granted to the Company’s employees and its subsidiary’s employees. The Incentive Plan expires on October 26, 2026, and is administered by the Company’s Compensation Committee of the Board of Directors. Each of the Company’s employees, directors, and consultants are eligible to participate in the Incentive Plan. As of December 31, 2018, there were shares of common stock available for issuance under the Incentive Plan. Stock-Based Compensation Expense Stock-based compensation expense is included in the consolidated statements of operations as follows: Year Ended December 31, 2018 2017 Payroll and related expenses $ 396,214 $ 701,402 Total $ 396,214 $ 701,402 The following table presents total stock-based compensation expense by security type included in the consolidated statements of operations: Year Ended December 31, 2018 2017 Stock options $ 332,662 $ 701,402 RSUs 63,552 — Total $ 396,214 $ 701,402 Stock-Based Option Awards The fair value of the stock-based option awards granted during the years ended December 31, 2018 and 2017 2018 2017 Expected dividend yield 0 % 0 % Expected stock volatility 25.7 % 25.5-44 % Risk-free interest rate 2.56 % 1.78-2.11 % Expected life 5.00 5.5 Because the Company does not have significant historical data on employee exercise behavior, the Company uses the “Simplified Method” to calculate the expected life of the stock-based option awards granted to employees. The simplified method is calculated by averaging the vesting period and contractual term of the options. The following table summarizes stock-based option activities and changes during the years ended December 31, 2018 and 2017 2017 Shares Weighted Average Fair Value Per Share Weighted Average Exercise Price Per Share Weighted Average Remaining Terms (in years) Aggregate Intrinsic Value Outstanding – December 31, 2016 - Successor 295,051 $ 1.25 $ 3.00 — $ — Granted 598,552 1.22 4.28 Exercised (2,803 ) — — Cancelled (2,408 ) — — Outstanding – December 31, 2017 888,392 $ 1.23 $ 3.86 9.15 $ 1,881,869 Granted 250,000 1.28 4.61 Exercised — — — Cancelled (33,333 ) — — Outstanding – December 31, 2018 1,105,059 1.24 4.06 8.41 $ — Exercisable – December 31, 2017 738,608 1.22 4.04 9.19 1,435,515 Exercisable – December 31, 2018 949,355 $ 1.23 $ 4.00 8.30 $ — For the years ended December 31, 2018 and December 31, 2017, the Company recognized stock-based compensation expense of $332,662 and $ 701,402 As of December 31, 2018, there was $195,914 of total unrecognized compensation costs related to non-vested stock options, which will be expensed over a weighted average period of 1.28 years. The intrinsic value is calculated as the difference between the fair value of the stock price at year end and the exercise price of each of the outstanding stock options. The fair value of the stock price at December 31, 2018 was $2.71 per share. On January 30, 2017, the Company granted Mr. Galvin, Mr. Armstrong, Mr. Shetty, and three employees of the Company options to purchase 96,814, 34,481, 69,038 and an aggregate of 47,010, respectively, shares of the Company’s common stock with an exercise price of $3.00 per share. These options were granted pursuant to the 2016 two December 31, 2018 In March 2017, Mr. Galvin and Mr. Shetty were granted options to purchase 185,425 and 132,446 shares of the Company’s common stock, respectively. The exercise price of such options was contingent on the offering price of the Public Offering and based on the $5.00 Public Offering Price; as such, 185,425 of such options have an exercise price of $5.00 per share and 132,446 have an exercise price of $6.00 per share. These options vested during the three months ended September 30, 2017, when certain performance conditions were met. The fair value of these options upon issuance amounted to $370,558. Also in March 2017, the Company issued options to purchase an aggregate of 33,334 shares of the Company’s common stock to two directors. Such options have an exercise price of $3.00 per share, and vest in quarterly installments, in accordance with the underlying agreement. These options vested in full by December 31, 2017. The fair value of these options upon issuance amounted to $42,934. In March 2018, the Company granted Mr. Galvin, Mr. Shetty and six purchase 82,154, 81,342 and an aggregate of 86,504, respectively, shares of the Company’s common stock with an exercise price of $4.61 per share. These options vest in equal quarterly installments over either a two three two 2019 three Non-Employee Stock Options In September 2017, in connection with an advisory agreement entered into by the Company (the “Advisory Agreement”), a consultant was granted options to purchase 50,000 shares of the Company’s common stock, with an exercise price of $6.25. The options vest when certain performance conditions are met. These performance conditions consist of the purchase of fifty Restricted Stock Units Effective July 26, 2018, a total of 27,955 of restricted stock units were granted to the Company’s non-employee directors, under the Company’s stock-based compensation plan, at the calculated fair value of $5.36 per share, which represents the average closing price of the Company’s common stock for the ten including the grant date. Restricted stock units granted to directors in 2018 six The following table summarized restricted stock unit activities during the year ended December 31, 2018: Number of Shares Non-vested balance at January 1, 2018 — Granted 27,955 Vested — Forfeited/Expired (5,591 ) Non-vested balance at December 31, 2018 22,364 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 14 Commitm Legal Proceedings We are subject to cert Pizzarotti Litigation - On or about August 10, 2018, Pizzarotti, LLC filed a complaint against the Company and Mahesh Shetty, the Company’s President, and others seeking unspecified damages for an alleged breach of contract by the Company and another entity named Phipps & Co. (“Phipps”). The lawsuit was filed as Pizzarotti, LLC. v. Phipps & Co., et al., Index No. 653996 2018 The claims against the Company arise from an Assignment Agreement, dated as of May 30, 2018, between Pizzarotti, Phipps and the Company (the “Assignment Agreement”), pursuant to which the Company intended to provide a letter of credit in exchange for an assignment of the proceeds from certain subcontracted work to be provided by Phipps to Pizzarotti. The Assignment Agreement was ultimately terminated, and the Company returned all payments to Phipps. Notwithstanding the above, Pizzarotti has sued seeking damages for nonperformance of the sub-contracted work and the return of a $500,000 payment from Phipps. The Company believes that the Assignment Agreement was properly terminated and believes that the claims brought against the Company and Mr. Shetty have no merit. The Company intends to vigorously defend the litigation. Litigation is subject to many uncertainties, and the outcome of this action is not predicted with assurance. The Company is currently unable to predict the possible loss or range of loss, if any, associated with the resolution of this litigation, and, accordingly, the Company has made no provision related to this matter in the condensed consolidated financial statements. Vendor Litigation - On January 1, 2019, SG Blocks filed a suit against Teton Buildings, LLC (“Teton”) to recover breach of contract damages of approximately $2,100,000 plus attorneys’ fees related to the HOLA Community Partners construction project in Los Angeles, California (the “HOLA Project”), for which Teton was engaged by the Company to supply modular units in early 2017 SG Blocks, Inc. v. Teton Buildings, LLC 2019 02827 SG Blocks believes it will prevail on the merits of the case. As with any litigation at this early stage, the cost of litigating and the outcome remain uncertain. HOLA Community Partners Matter - There is an ongoing dispute between the Company and HOLA Community Partners, a California non-profit corporation, in connection with the parties’ Construction and Delivery Agreement, dated June 1, 2017, pursuant to which HOLA Community Partners hired the Company for design, engineering, fabrication, and installation services for the construction of the HOLA Project. The Company claims that HOLA Community Partners owes the Company certain amounts due for work performed on the HOLA Project and extra costs incurred due to delays and impacts caused by HOLA Community Partners. HOLA Community Partners disputes the amounts owed, and claims that the Company failed to meet its contractual obligations. The parties are in ongoing settlement discussions. Neither party has commenced litigation as of the date of this Form 10-K. In addition, the Company is subject to other routine legal proceedings, claims, and litigation in the ordinary course of its business. Defending lawsuits requires significant management attention and financial resources and the outcome of any litigation, including the matters described above, is inherently uncertain. The Company does not, however, currently expect that the costs to resolve these routine matters will have a material adverse effect on its consolidated financial position, results of operations, or cash flows. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of consolidation | Basis of presentation and principals of consolidation – The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the applicable rules and regulations of the United States Securities and Exchange Commission (“SEC”) and include the accounts of the Company and its wholly owned subsidiaries, SG Building Blocks, Inc. and SG Residential, Inc. All intercompany balances and transactions are eliminated. Certain prior period amounts have been reclassified to conform to the current period’s presentation. |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements - New accounting pronouncements implemented by the Company during the year ended December 31, 2018 are discussed below or in the related notes, where appropriate. In May 2014, the FASB issued ASU No. 2014 09 606 606 606 605 605 606 In accordance with ASC 606 606 605 606 606 606 Recently issued accounting pronouncements not yet adopted In February 2016, the FASB issued ASU No. 2016 02 842 2016 02 2016 02 twelve 2018 11 842 2018 11 2018 11 2018 10 842 2018 10 2016 02 2016 02 2018 10 2018 11 2016 02 December 31, 2018 2016 02 In January 2017, the FASB issued ASU No. 2017 04 2017 04 2 2017 04 In June 2018, the FASB issued ASU No. 2018 07 718 2018 07 718 2018 07 718 2018 07 718 1 2 606 2018 07 In August 2018, the FASB issued ASU No. 2018 13 2018 13 820 3 2018 13 2018 13 |
Accounting estimates | Accounting estimates |
Operating cycle | Operating cycle – The length of the Company’s contracts varies, but is typically between six twelve twelve one year |
Revenue recognition | Revenue recognition – On January 1, 2018, the Company adopted the following : ASU 2014 09 2014 09 five ASU 2016 08 2014 09 2016 08 2016 08 ASU 2016 10 2014 09 2016 10 2016 10 ASU 2016 12 2014 09 ASU 2016 20 606 The adoption of ASC 606 five 606 ( 1 Identify the contract with a customer ( 2 Identify the performance obligations in the contract ( 3 Determine the transaction price ( 4 Allocate the transaction price to performance obligations in the contract ( 5 Recognize revenue as performance obligations are satisfied The new revenue recognition standard requires the Company to determine, at contract inception, whether it will transfer control of a promised good or service over time or at a point in time—regardless of the length of contract or other factors. The Company now applies recognition of revenue over time, which is similar to the method the Company applied under previous guidance (i.e., percentage of completion). Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress toward complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. Disaggregation of Revenues The Company’s revenues are principally derived from construction and engineering contracts related to Modules. Our contracts are with many different customers in numerous industries. The following tables provide further disaggregation of the Company’s revenues by categories: Twelve Months Ended December 31, Revenue by Customer Type 2018 2017 Multi-Family $ 344,968 4 % $ — — Office 2,221,431 27 % 1,384,967 28 % Retail 2,332,654 29 % 514,428 10 % School 2,697,451 33 % 3,122,035 62 % Special Use 559,755 7 % 22,838 — Other 34,453 — 17,317 — Total revenue by customer type $ 8,190,712 100 % $ 5,061,585 100 % Contract Assets and Contract Liabilities Accounts receivable are recognized in the period when the Company’s right to consideration is unconditional. Accounts receivable are recognized net of an allowance for doubtful accounts. A considerable amount of judgment is required in assessing the likelihood of realization of receivables. The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets include unbilled amounts from long-term construction services when revenue recognized under the cost-to-cost measure of progress exceeds the amounts invoiced to customers, as the amounts cannot be billed under the terms of our contracts. Such amounts are recoverable from customers based upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of a contract. Contract assets are generally classified as current within the consolidated balance sheets and labeled as “costs and estimated earnings in excess of billings on uncompleted contracts”. Contract liabilities from construction and engineering contracts occur when amounts invoiced to customers exceed revenues recognized under the cost-to-cost measure of progress. Contract liabilities additionally include advanced payments from customers on certain contracts. Contract liabilities decrease as the Company recognizes revenue from the satisfaction of the related performance obligation. Contract liabilities are generally classified as current within the consolidated balance sheet and labeled as “billings in excess of costs and estimated earnings on uncompleted contracts”. Although the Company believes it has established adequate procedures for estimating costs to complete on open contracts, it is at least reasonably possible that additional significant costs could occur on contracts prior to completion. The Company periodically evaluates and revises its estimates and makes adjustments when they are considered necessary. Impact of the Adoption of ASC 606 Prior to implementing ASC 606 606 |
Cash and cash equivalents | Cash and cash equivalents – The Company considers cash and cash equivalents to include all short-term, highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three $ for the years ended December 31, 2018 and 2017 |
Short-term investment | Short-term investment – The Company classifies its investment consisting of a certificate of deposit with a maturity greater than three one no |
Accounts receivable and Allowance for Doubtful Accounts | Accounts receivable and allowance for doubtful accounts – Accounts receivable are receivables generated from sales to customers and progress billings on performance type contracts. Amounts included in accounts receivable are deemed to be collectible within the Company’s operating cycle. The Company recognizes account receivable at invoiced amounts. The allowance for doubtful accounts reflects the Company's best estimate of probable losses inherent in the accounts receivable balances. Management provides an allowance for doubtful accounts based on the Company’s historical losses, specific customer circumstances, and general economic conditions. Periodically, management reviews accounts receivable and adjusts the allowance based on current circumstances and charges off uncollectible receivables when all attempts to collect have been exhausted and the prospects for recovery are remote. Recoveries are recognized when they are received. Actual collection losses may differ from our estimates and could be material to our consolidated financial position, result of operations, and cash flows. |
Inventory | Inventory – Raw construction materials (primarily shipping containers) are valued at the lower of cost (first-in, first-out method) or net realizable value. Finished goods and work-in-process inventories are valued at the lower of cost or net realizable value, using the specific identification method. There was no inventory as of December 31, 2018 2017 |
Goodwill | Goodwill – The Company performs its impairment test of goodwill at the reporting unit level each fiscal year, or more frequently if events or circumstances change that would more likely than not reduce the fair value of its reporting unit below its carrying values. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, management conducts a two December 31, 2018 |
Intangible assets | Intangible assets – Intangible assets represent the preliminary assets identified upon emergence from bankruptcy and consist of $ 2,766,000 20 1,113,000 2.5 28,820 $ 5,300 5 December 31, 2018 December 31, 2018 December 31, 2017 five For the year ending December 31,: 2019 $ 145,124 2020 145,124 2021 145,124 2022 140,801 2023 139,006 Thereafter 1,728,750 $ 2,443,929 |
Equipment | Property, plant and equipment – Property, plant and equipment is stated at cost. Depreciation is computed using the straight-line method over the estimated lives of each asset. Estimated useful life for significant classes of assets are as follows: computer and software 3 to 5 years and equipment o |
Convertible instruments | Convertible instruments – The Company bifurcates conversion options from their host instruments and accounts for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. |
Common stock purchase warrants and other derivative financial instruments | Common stock purchase warrants and other derivative financial instruments – The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) provides a choice of net-cash settlement or settlement in the Company’s own shares (physical settlement or net-share settlement) providing that such contracts are indexed to the Company’s own stock. The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if any event occurs and if that event is outside the Company’s control) or (ii) gives the counterparty a choice of net-cash settlement or settlement shares (physical settlement or net-cash settlement). The Company assesses classification of common stock purchase warrants and other free standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities or equity is required. |
Fair value measurements | Fair value measurements – Financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities are carried at cost, which the Company believes approximates fair value due to the short-term nature of these instruments. The Company measures the fair value of financial assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The Company uses three Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Quoted prices for similar assets and liabilities in active markets or inputs that are observable. Level 3 Inputs that are unobservable (for example, cash flow modeling inputs based on assumptions). Financial assets and liabilities measured at fair value on a recurring basis are summarized below: Short-term investment: The Company had $30,033 in a short-term investment as of December 31, 2017 2 December 31, 2018 December 31, 2017 Quoted prices in active market for identical assets (Level l) Significant other observable inputs (Level 2 Significant unobservable inputs (Level 3 Short-term investment $ 30,033 $ — $ 30,033 $ — Conversion option liabilities: Conversion option liabilities are measured at fair value using the Black-Scholes model and are classified within Level 3 3 3 The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 For the year ended December 31, 2017 Beginning balance $ 384,461 Aggregate fair value of conversion option liabilities issued — Change in fair value related to conversion of convertible debentures (288,134 ) Change in fair value of conversion option liabilities (96,327 ) Ending balance $ — The Company presented conversion option liabilities at fair value on its consolidated balance sheets, with the corresponding changes in fair value recorded in the Company’s consolidated statements of operations for the applicable reporting periods. As disclosed in Note 7 the conversion option liabilities at the dates of issuance and the reporting dates of December 31, 2017 |
Share-based payments | Share-based payments – The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, including non-employee directors, the fair value of a stock option award is measured on the grant date. The fair value amount is then recognized over the period services are required to be provided in exchange for the award, usually the vesting period. The Company recognizes stock-based compensation expense on a graded-vesting basis over the requisite service period for each separately vesting tranche of each award. Stock-based compensation expense to employees and all directors are reported within payroll and related expenses in the consolidated statements of operations. Stock-based compensation expense to non-employees is reported within marketing and business development expense in the consolidated statements of operations. |
Income taxes | Income taxes – The Company accounts for income taxes utilizing the asset and liability approach. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for income taxes generally represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from the differences between the financial and tax bases of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. The calculation of tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for anticipated tax audit issues based on the Company’s estimate of whether, and the extent to which, additional taxes will be due. If payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when the liabilities are no longer determined to be necessary. If the estimate of tax liabilities proves to be less than the ultimate assessment, a further charge to expense would result. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. A valuation allowance for such tax assets and loss carryforwards is provided when it is determined to be more likely than not that the benefit of such deferred tax asset will not be realized in future periods. If it becomes more likely than not that a tax asset will be used, the related valuation allowance on such assets would be reduced. Impact of the Tax Cuts and Jobs Act The TCJA was enacted in the United States on December 22, 2017 Among other things, the TCJA lowered the corporate tax rate from 35.0 21.0 one 2017 118 “Income Tax Accounting Implications of the Tax Cuts and Jobs Act” 118 118 The Company recognized the income tax effects of the TCJA in its consolidated financial statements for the year ended December 31, 2018 December 31, 2018 |
Concentrations of credit risk | Concentrations of credit risk – Financial instruments, that potentially subject the Company to concentration of credit risk, consist principally of cash and cash equivalents. The Company places its cash with high credit quality institutions. At times, such amounts may be in excess of the FDIC insurance limits. The Company has not experienced any losses in such account and believes that it is not exposed to any significant credit risk on the account. With respect to receivables, concentrations of credit risk are limited to a few customers in the construction industry. The Company performs ongoing credit evaluations of its customers’ financial condition and, generally, requires no collateral from its customers other than normal lien rights. At December 31, 2018 2017 81 Revenue relating to three and two customers represented approximately 66% and 80% of the Company’s total revenue for the years ended December 31, 2018 2017 Cost of revenue relating to two and one December 31, 2018 2017 |
Liquidity (Tables)
Liquidity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Liquidity [Member] | |
Liquidity [Line Items] | |
Schedule of expects to satisfy remaining unsatisfied performance obligation | 2018 Within 1 $ 22,563,674 1 2 54,639,417 Thereafter 20,454,288 Total Backlog $ 97,657,379 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of disaggregation of revenues by categories | Twelve Months Ended December 31, Revenue by Customer Type 2018 2017 Multi-Family $ 344,968 4 % $ — — Office 2,221,431 27 % 1,384,967 28 % Retail 2,332,654 29 % 514,428 10 % School 2,697,451 33 % 3,122,035 62 % Special Use 559,755 7 % 22,838 — Other 34,453 — 17,317 — Total revenue by customer type $ 8,190,712 100 % $ 5,061,585 100 % |
Summary of estimated amortization expense of intangible assets | For the year ending December 31,: 2019 $ 145,124 2020 145,124 2021 145,124 2022 140,801 2023 139,006 Thereafter 1,728,750 $ 2,443,929 |
Summary of financial assets and liabilities measured at fair value on recurring basis | December 31, 2017 Quoted prices in active market for identical assets (Level l) Significant other observable inputs (Level 2 Significant unobservable inputs (Level 3 Short-term investment $ 30,033 $ — $ 30,033 $ — |
Summary of changes in fair value of company's level 3 financial liabilities measured on recurring basis | For the year ended December 31, 2017 Beginning balance $ 384,461 Aggregate fair value of conversion option liabilities issued — Change in fair value related to conversion of convertible debentures (288,134 ) Change in fair value of conversion option liabilities (96,327 ) Ending balance $ — |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Receivable [Abstract] | |
Summary of accounts receivable | 2018 2017 Billed: Block sales $ 14,723 $ — Construction services 1,619,498 2,470,526 Engineering services 400,877 196,008 Retainage receivable 543,417 373,576 Other receivable 7,706 — Total gross receivables 2,586,221 3,040,110 Less: allowance for doubtful accounts ( 1 (839,895 ) (34,235 ) Total net receivables $ 1,746,326 $ 3,005,875 ( 1 The change in allowance for doubtful accounts is primarily due to unpaid billings on a contract that is currently in dispute. |
Contract Assets and Contract _2
Contract Assets and Contract Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Contract Assets and Contract Liabilities [Abstract] | |
Summary of costs and estimated earnings on uncompleted contracts | 2018 2017 Costs incurred on uncompleted contracts $ 11,307,975 $ 3,681,965 Estimated earnings to date on uncompleted contracts 838,615 328,273 Gross contract assets 12,146,590 4,010,238 Less: billings to date (13,221,152 ) (5,622,111 ) Net contract assets (liabilities) $ (1,074,562 ) $ (1,611,873 ) |
Summary of costs included in condensed consolidated balance sheets | 2018 2017 Costs and estimated earnings in excess of billings on uncompleted contracts $ 260,325 $ 61,175 Billings in excess of costs and estimated earnings on uncompleted contracts (1,334,887 ) (1,673,048 ) Net contract assets (liabilities) $ (1,074,562 ) $ (1,611,873 ) |
Property, plant and equipment (
Property, plant and equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, plant and equipment [Abstract] | |
Schedule of company's equipment | 2018 2017 Computer equipment and software $ 39,193 $ 28,370 Furniture and other equipment 63,479 2,997 Property, plant and equipment 102,672 31,367 Less: accumulated depreciation (31,335 ) (24,571 ) Property, plant and equipment, net $ 71,337 $ 6,796 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
Summary of company's benefit for income taxes | 2018 2017 Deferred: Federal $ 94,031 $ 2,126,062 State and local (449,796 ) 200,294 Total deferred (355,765 ) 2,326,356 Total provision (benefit) for income taxes (355,765 ) 2,326,356 Less: valuation reserve 355,765 (2,326,356 ) Income tax provision $ — $ — |
Summary of reconciliation of the federal statutory rate | 2018 2017 Benefit for income taxes at federal statutory rate 21.0 % 34.0 % State and local income taxes, net of federal benefit 7.4 7.4 Differences attributable to the Tax and Jobs Cut Act — (32.0 ) Differences attributable to change in state business apportionment — (4.7 ) Loss on debt conversion — (9.1 ) Prior year adjustment of taxes — (47.1 ) Other — (0.1 ) Less valuation allowance (28.4 ) 51.6 Effective income tax rate 0.0 % 0.0 % |
Schedule of deferred tax assets (liabilities) | 2018 2017 Net operating loss carryforward $ 2,786,519 $ 3,738,980 Bad debt reserve 238,194 9,709 Employee stock compensation 364,699 255,322 Intangible assets (684,722 ) (858,811 ) Depreciation (2,548 ) 2,567 Accrued expenses 89,861 — Charity 233 234 Net deferred tax asset 2,792,236 3,148,001 Valuation allowance (2,792,236 ) (3,148,001 ) Net deferred tax asset $ — $ — |
Construction Backlog (Tables)
Construction Backlog (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Schedule of backlog of signed construction and engineering contracts | 2018 2017 Balance - beginning of period $ 76,659,029 $ 541,291 New contracts and change orders during the period 29,189,062 81,179,323 Subtotal 105,848,091 81,720,614 Less: contract revenue earned during the period (8,190,712 ) (5,061,585 ) Balance - end of period $ 97,657,379 $ 76,659,029 |
Construction Backlog [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Schedule of expects to satisfy remaining unsatisfied performance obligation | 2018 Within 1 $ 22,563,674 1 2 54,639,417 Thereafter 20,454,288 Total Backlog $ 97,657,379 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stock Options and Grants [Abstract] | |
Schedule of stock-based compensation expense included in statement of operations | Year Ended December 31, 2018 2017 Payroll and related expenses $ 396,214 $ 701,402 Total $ 396,214 $ 701,402 Year Ended December 31, 2018 2017 Stock options $ 332,662 $ 701,402 RSUs 63,552 — Total $ 396,214 $ 701,402 |
Summary of fair value stock-based option awards granted using Black-Scholes option valuation model | 2018 2017 Expected dividend yield 0 % 0 % Expected stock volatility 25.7 % 25.5-44 % Risk-free interest rate 2.56 % 1.78-2.11 % Expected life 5.00 5.5 |
Summary of employee stock option activity | Shares Weighted Average Fair Value Per Share Weighted Average Exercise Price Per Share Weighted Average Remaining Terms (in years) Aggregate Intrinsic Value Outstanding – December 31, 2016 - Successor 295,051 $ 1.25 $ 3.00 — $ — Granted 598,552 1.22 4.28 Exercised (2,803 ) — — Cancelled (2,408 ) — — Outstanding – December 31, 2017 888,392 $ 1.23 $ 3.86 9.15 $ 1,881,869 Granted 250,000 1.28 4.61 Exercised — — — Cancelled (33,333 ) — — Outstanding – December 31, 2018 1,105,059 1.24 4.06 8.41 $ — Exercisable – December 31, 2017 738,608 1.22 4.04 9.19 1,435,515 Exercisable – December 31, 2018 949,355 $ 1.23 $ 4.00 8.30 $ — |
Schedule of RSU activities | Number of Shares Non-vested balance at January 1, 2018 — Granted 27,955 Vested — Forfeited/Expired (5,591 ) Non-vested balance at December 31, 2018 22,364 |
Description of Business (Detail
Description of Business (Details) - USD ($) | Jul. 12, 2017 | Jun. 27, 2017 | Jul. 31, 2017 | Jun. 30, 2017 | Feb. 28, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Description of Business (Textual) | |||||||
Reverse stock split | 1-for-3 | ||||||
Proceeds from public stock offering, net of issuance costs | $ 7,059,614 | ||||||
Common stock, shares issued | 4,260,041 | 4,260,041 | |||||
Common stock, shares outstanding | 4,260,041 | 4,260,041 | |||||
Offering costs | $ 1,565,386 | ||||||
IPO [Member] | |||||||
Description of Business (Textual) | |||||||
Shares of common stock | 225,000 | 1,500,000 | 225,000 | 1,500,000 | |||
Shares issued, price per share | $ 5 | ||||||
Proceeds from public stock offering, net of issuance costs | $ 1,046,250 | $ 6,826,558 | |||||
Commissions and related expenses | 78,750 | $ 673,442 | |||||
Additional expenses related to offering | $ 813,195 | ||||||
Over Allotment [Member] | |||||||
Description of Business (Textual) | |||||||
Aggregate purchase warrants | 86,250 | ||||||
Exercise price | $ 6.25 |
Liquidity (Details)
Liquidity (Details) | Dec. 31, 2018USD ($) |
Liquidity [Line Items] | |
Total Remaining Unsatisfied Performance Obligations | $ 97,657,379 |
Liquidity [Member] | Within 1 year [Member] | |
Liquidity [Line Items] | |
Total Remaining Unsatisfied Performance Obligations | 22,563,674 |
Liquidity [Member] | 1 to 2 years [Member] | |
Liquidity [Line Items] | |
Total Remaining Unsatisfied Performance Obligations | 54,639,417 |
Liquidity [Member] | Thereafter [Memebr] | |
Liquidity [Line Items] | |
Total Remaining Unsatisfied Performance Obligations | $ 20,454,288 |
Liquidity (Details Textual)
Liquidity (Details Textual) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Liquidity [Abstract] | |||
Cash and cash equivalents | $ 1,368,395 | $ 4,870,824 | $ 549,100 |
Cash backlog | $ 97,700,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details 1) | 12 Months Ended | |
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Disaggregation of Revenue [Line Items] | ||
Total revenue by customer type, percentage | 1 | 1 |
Total revenue by customer type | $ 8,190,712 | $ 5,061,585 |
Multi-Family [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue by customer type, percentage | 0.04 | |
Total revenue by customer type | $ 344,968 | |
Office [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue by customer type, percentage | 0.27 | 0.28 |
Total revenue by customer type | $ 2,221,431 | $ 1,384,967 |
Retail [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue by customer type, percentage | 0.29 | 0.10 |
Total revenue by customer type | $ 2,332,654 | $ 514,428 |
School [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue by customer type, percentage | 0.33 | 0.62 |
Total revenue by customer type | $ 2,697,451 | $ 3,122,035 |
Special Use [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue by customer type, percentage | 0.07 | |
Total revenue by customer type | $ 559,755 | $ 22,838 |
Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue by customer type, percentage | ||
Total revenue by customer type | $ 34,453 | $ 17,317 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 2) | Dec. 31, 2018USD ($) |
Accounting Policies [Abstract] | |
2019 | $ 145,124 |
2020 | 145,124 |
2021 | 145,124 |
2022 | 140,801 |
2023 | 139,006 |
Thereafter | 1,728,750 |
Total | $ 2,443,929 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 3) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Summary of financial assets and liabilities measured at fair value on a recurring basis | ||
Short-term investment | $ 30,033 | |
Fair value measured on recurring basis [Member] | Quoted prices in active market for identical assets (Level l) [Member] | ||
Summary of financial assets and liabilities measured at fair value on a recurring basis | ||
Short-term investment | ||
Fair value measured on recurring basis [Member] | Significant other observable inputs (Level 2) [Member] | ||
Summary of financial assets and liabilities measured at fair value on a recurring basis | ||
Short-term investment | 30,033 | |
Fair value measured on recurring basis [Member] | Significant unobservable inputs (Level 3) [Member] | ||
Summary of financial assets and liabilities measured at fair value on a recurring basis | ||
Short-term investment |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details 4) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Accounting Policies [Abstract] | |
Beginning balance | $ 384,461 |
Aggregate fair value of conversion option liabilities issued | |
Change in fair value related to conversion of convertible debentures | (288,134) |
Change in fair value of conversion option liabilities | (96,327) |
Ending balance |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details Textual) | 12 Months Ended | ||
Dec. 31, 2018USD ($)VendorsCustomer | Dec. 31, 2017USD ($)VendorsCustomer | Dec. 31, 2016USD ($) | |
Summary of Significant Accounting Policies (Textual) | |||
Intangible assets identified bankruptcy proceedings, description | Intangible assets represent the preliminary assets identified upon emergence from bankruptcy and consist of $2,766,000 of proprietary knowledge and technology which is being amortized over 20 years and $1,113,000 of customer contracts which is being amortized over 2.5 years. In addition, included in intangible assets is $ 28,820 of trademarks and $5,300 of website which is being amortized over 5 years. | ||
Term of company's operating cycle | The length of the Company's contracts varies, but is typically between six to twelve months. | ||
Warranty offered on completed contracts | 1 year | ||
Inventory | $ 0 | $ 0 | |
Goodwill impairment | 0 | ||
Accumulated amortization | 1,469,191 | 879,573 | |
Amortization expense | 589,619 | 587,823 | |
Short-term investment | 30,033 | ||
Cash and cash equivalents | $ 1,368,395 | $ 4,870,824 | $ 549,100 |
Computer and software [Member] | Minimum [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Estimated useful lives | 3 years | ||
Computer and software [Member] | Maximum [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Estimated useful lives | 5 years | ||
Equipment [Member] | Minimum [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Estimated useful lives | 5 years | ||
Equipment [Member] | Maximum [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Estimated useful lives | 7 years | ||
Accounts receivable [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Concentration risk, percentage | 76.00% | 81.00% | |
Number of customers | Customer | 2 | 2 | |
Revenue [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Concentration risk, percentage | 66.00% | 80.00% | |
Number of customers | Customer | 3 | 2 | |
Cost of revenue [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Concentration risk, percentage | 55.00% | ||
Number of vendors | Vendors | 2 | 1 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of accounts receivable | |||
Total gross receivables | $ 2,586,221 | $ 3,040,110 | |
Less: allowance for doubtful accounts | [1] | (839,895) | (34,235) |
Total net receivables | 1,746,326 | 3,005,875 | |
Block sales [Member] | |||
Summary of accounts receivable | |||
Total gross receivables | 14,723 | ||
Construction revenue [Member] | |||
Summary of accounts receivable | |||
Total gross receivables | 1,619,498 | 2,470,526 | |
Engineering services [Member] | |||
Summary of accounts receivable | |||
Total gross receivables | 400,877 | 196,008 | |
Retainage receivable [Member] | |||
Summary of accounts receivable | |||
Total gross receivables | 543,417 | 373,576 | |
Other receivable [Member] | |||
Summary of accounts receivable | |||
Total gross receivables | $ 7,706 | ||
[1] | The change in allowance for doubtful accounts is primarily due to unpaid billings on a contract that is currently in dispute. |
Accounts Receivable (Details Te
Accounts Receivable (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Accounts Receivable [Abstract] | |||
Allowances for doubtful accounts | [1] | $ 839,895 | $ 34,235 |
Provision for doubtful accounts | 810,580 | ||
Accounts receivable write offs | $ 4,920 | $ 0 | |
[1] | The change in allowance for doubtful accounts is primarily due to unpaid billings on a contract that is currently in dispute. |
Contract Assets and Contract _3
Contract Assets and Contract Liabilities (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Costs and estimated earnings on uncompleted contracts | ||
Costs incurred on uncompleted contracts | $ 11,307,975 | $ 3,681,965 |
Estimated earnings to date on uncompleted contracts | 838,615 | 328,273 |
Gross contract assets | 12,146,590 | 4,010,238 |
Less: billings to date | (13,221,152) | (5,622,111) |
Net contract assets (liabilities) | $ (1,074,562) | $ (1,611,873) |
Contract Assets and Contract _4
Contract Assets and Contract Liabilities (Details 1) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Costs and estimated earnings amounts on uncompleted contracts included in balance sheets | ||
Costs and estimated earnings in excess of billings on uncompleted contracts | $ 260,325 | $ 61,175 |
Billings in excess of costs and estimated earnings on uncompleted contracts | (1,334,887) | (1,673,048) |
Net contract assets (liabilities) | $ (1,074,562) | $ (1,611,873) |
Property, plant and equipment_2
Property, plant and equipment (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of company's equipment | ||
Property, plant and equipment, gross | $ 102,672 | $ 31,367 |
Less: accumulated depreciation | (31,335) | (24,571) |
Property, plant and equipment, net | 71,337 | 6,796 |
Computer equipment and software [Member] | ||
Schedule of company's equipment | ||
Property, plant and equipment, gross | 39,193 | 28,370 |
Furniture and other equipment [Member] | ||
Schedule of company's equipment | ||
Property, plant and equipment, gross | $ 63,479 | $ 2,997 |
Property, plant and equipment_3
Property, plant and equipment (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, plant and equipment (Textual) | ||
Depreciation expense | $ 6,764 | $ 2,955 |
Property, plant and equipment [Member] | ||
Property, plant and equipment (Textual) | ||
Depreciation expense | $ 6,764 | $ 2,955 |
Convertible Debentures (Details
Convertible Debentures (Details Textual) - USD ($) | Nov. 17, 2016 | Jun. 30, 2016 | Dec. 31, 2018 | Dec. 31, 2017 |
Convertible Debentures (Textual) | ||||
Debt conversion, converted instrument amount | $ 1,937,500 | |||
Fair value of conversion option liabilities | $ 0 | |||
Securities Purchase Agreement [Member] | ||||
Convertible Debentures (Textual) | ||||
Maximum principal amount | $ 937,500 | $ 2,500,000 | ||
Due date of convertible debentures | Jun. 30, 2018 | Jun. 30, 2018 | ||
Original issue discount | 12.00% | 12.00% | ||
Common stock ratio shares | 1 | 1 | ||
Share price | $ 3.75 | $ 3.75 | ||
Subscription price sales | $ 750,000 | $ 20,000 | ||
2016 Debentures [Member] | ||||
Convertible Debentures (Textual) | ||||
Received net proceeds | 1,500,000 | |||
Fair value of option debenture discount | $ 503,971 | |||
Total amortization relating to the discount | $ 330,388 | |||
Debt conversion, converted instrument, shares issued | 516,667 | |||
Loss of conversion of debentures | $ 1,018,475 | |||
Fair value of conversion option liabilities | $ 503,971 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred: | ||
Federal | $ 94,031 | $ 2,126,062 |
State and local | (449,796) | 200,294 |
Total deferred | (355,765) | 2,326,356 |
Total provision (benefit) for income taxes | (355,765) | 2,326,356 |
Less: valuation reserve | 355,765 | (2,326,356) |
Income tax provision |
Income Taxes (Details 1)
Income Taxes (Details 1) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of reconciliation of the federal statutory rate | ||
Benefit for income taxes at federal statutory rate | 21.00% | 34.00% |
State and local income taxes, net of federal benefit | 7.40% | 7.40% |
Differences attributable to the Tax and Jobs Cut Act | (32.00%) | |
Differences attributable to change in state business apportionment | (4.70%) | |
Loss on debt conversion | (9.10%) | |
Prior year adjustment of taxes | (47.10%) | |
Other | (0.10%) | |
Less valuation allowance | (28.40%) | 51.60% |
Effective income tax rate | 0.00% | 0.00% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets (liabilities) | ||
Net operating loss carryforward | $ 2,786,519 | $ 3,738,980 |
Bad debt reserve | 238,194 | 9,709 |
Employee stock compensation | 364,699 | 255,322 |
Intangible assets | (684,722) | (858,811) |
Depreciation | (2,548) | 2,567 |
Accrued expenses | 89,861 | |
Charity | 233 | 234 |
Net deferred tax asset | 2,792,236 | 3,148,001 |
Valuation allowance | (2,792,236) | (3,148,001) |
Net deferred tax asset |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes (Textual) | ||
Reconciliation of federal statutory rate | 0.00% | 0.00% |
Effective state and local tax rate | 7.40% | 7.40% |
Valuation allowance | $ (335,765) | $ (2,326,356) |
Net operating loss carry forward | $ 9.8 | |
Net operating loss expiration date | Dec. 31, 2037 | |
Unrecognized tax benefits | $ 0 |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Net Income (Loss) Per Share [Abstract] | ||
Net loss | $ (4,844,021) | $ (4,512,680) |
Net loss per share - basic and diluted: | ||
Basic and diluted | $ (1.14) | $ (1.95) |
Weighted average shares outstanding: | ||
Basic and diluted | 4,260,041 | 2,310,066 |
Net Income (Loss) Per Share (_2
Net Income (Loss) Per Share (Details Textual) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Non-employees [Member] | ||
Net Income (Loss) Per Share (Textual) | ||
Warrants to purchase shares of common stock | 1,155,059 | |
Non-Director [Member] | ||
Net Income (Loss) Per Share (Textual) | ||
Warrants to purchase shares of common stock | 22,364 | |
RSUs [Member] | ||
Net Income (Loss) Per Share (Textual) | ||
Warrants to purchase shares of common stock | 86,250 | |
Stock options [Member] | ||
Net Income (Loss) Per Share (Textual) | ||
Warrants to purchase shares of common stock | 938,392 | |
Warrants [Member] | ||
Net Income (Loss) Per Share (Textual) | ||
Warrants to purchase shares of common stock | 86,250 |
Construction Backlog (Details)
Construction Backlog (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Construction Backlog [Abstract] | ||
Balance - beginning of period | $ 76,659,029 | $ 541,291 |
New contracts and change orders during the period | 29,189,062 | 81,179,323 |
Construction backlog, gross | 105,848,091 | 81,720,614 |
Less: contract revenue earned during the period | (8,190,712) | (5,061,585) |
Balance - end of period | $ 97,657,379 | $ 76,659,029 |
Construction Backlog (Details 1
Construction Backlog (Details 1) | Dec. 31, 2018USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total Remaining Unsatisfied Performance Obligations | $ 97,657,379 |
Within 1 year [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total Remaining Unsatisfied Performance Obligations | 22,563,674 |
1 to 2 years [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total Remaining Unsatisfied Performance Obligations | 54,639,417 |
Thereafter [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total Remaining Unsatisfied Performance Obligations | $ 20,454,288 |
Construction Backlog (Details T
Construction Backlog (Details Textual) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018USD ($)Number | Sep. 30, 2017USD ($) | Dec. 31, 2018USD ($)Number | |
Construction Backlog (Textual) | |||
Total Remaining Unsatisfied Performance Obligations | $ 97,657,379 | ||
Construction backlog contract amount | $ 25,000,000 | $ 15 | $ 55 |
Number of large contracts | Number | 1 | 2 | |
Moved Contract [Member] | |||
Construction Backlog (Textual) | |||
Construction backlog contract amount | $ 27,500,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Jul. 12, 2017 | Jun. 27, 2017 | Nov. 30, 2017 | Nov. 20, 2017 | Jul. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Stockholders' Equity (Textual) | ||||||||
Exercise of stock options, Shares | 2,803 | |||||||
Aggregate amount of conversion | $ 2,583,334 | |||||||
Issuance of common stock for services | $ 254,500 | |||||||
Loss on conversion of convertible debentures | 1,018,475 | |||||||
Recognized loss on conversion | $ 645,833 | |||||||
Options Held [Member] | ||||||||
Stockholders' Equity (Textual) | ||||||||
Exercise of stock options, Shares | 2,803 | |||||||
Common stock exercise price | $ 3 | |||||||
2016 Debentures [Member] | ||||||||
Stockholders' Equity (Textual) | ||||||||
Common stock issued upon conversion | 516,667 | |||||||
Aggregate amount of conversion | $ 1,937,500 | |||||||
IPO [Member] | ||||||||
Stockholders' Equity (Textual) | ||||||||
Issued shares of common stock | 225,000 | 1,500,000 | 225,000 | 1,500,000 | ||||
Common stock, per share | $ 5 | $ 5 | ||||||
Issuance costs of offering | $ 176,771 | $ 1,388,615 | ||||||
Warrants issued | $ 55,475 | |||||||
Issued warrants | 75,000 | |||||||
Fair value of warrants | $ 8,321 | |||||||
Warrants to purchase of common stock | 11,250 | |||||||
New Preferred Stock [Member] | ||||||||
Stockholders' Equity (Textual) | ||||||||
Common stock issued upon conversion | 1,801,670 | |||||||
Issuance of Common Stock & Options for Services [Member] | ||||||||
Stockholders' Equity (Textual) | ||||||||
Consultant received option to purchase | 50,000 | |||||||
Issuance of common stock for services | $ 254,500 | |||||||
Issuance of common stock for services, Shares | 50,000 |
Warrants (Details)
Warrants (Details) | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Warrants (Textual) | |
Common stock exercise price | $ 2.71 |
Warrants [Member] | |
Warrants (Textual) | |
Aggregate purchase warrants | shares | 86,250 |
Common stock exercise price | $ 6.25 |
Fair value of warrants | $ | $ 63,796 |
Maturity date | Jun. 21, 2023 |
Share-based Compensation (Detai
Share-based Compensation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Stock-Based Compensation Expense | ||
Total | $ 396,214 | $ 701,402 |
Payroll and related expenses [Member] | ||
Stock-Based Compensation Expense | ||
Total | 396,214 | 701,402 |
RSUs [Member] | ||
Stock-Based Compensation Expense | ||
Total | 63,552 | |
Stock options [Member] | ||
Stock-Based Compensation Expense | ||
Total | $ 332,662 | $ 701,402 |
Share-based Compensation (Det_2
Share-based Compensation (Details 1) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend yield | 0.00% | 0.00% |
Expected stock volatility | 25.70% | |
Risk-free interest rate | 2.56% | |
Expected life | 5 years | 5 years 6 months |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected stock volatility | 25.50% | |
Risk-free interest rate | 1.78% | |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected stock volatility | 44.00% | |
Risk-free interest rate | 2.11% |
Share-based Compensation (Det_3
Share-based Compensation (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares Outstanding, Beginning balance | 888,392 | 295,051 |
Shares, Granted | 250,000 | 598,552 |
Shares, Exercised | (2,803) | |
Shares, Cancelled | (33,333) | (2,408) |
Shares Outstanding, Ending balance | 1,105,059 | 888,392 |
Shares, Exercisable | 949,355 | 738,608 |
Weighted Average Fair Value Per Share, Outstanding, Beginning balance | $ 1.23 | $ 1.25 |
Weighted Average Fair Value Per Share, Granted | 1.28 | 1.22 |
Weighted Average Fair Value Per Share, Exercised | ||
Weighted Average Fair Value Per Share, Cancelled | ||
Weighted Average Fair Value Per Share, Outstanding, Ending balance | 1.24 | 1.23 |
Weighted Average Fair Value Per Share, Exercisable | 1.23 | 1.22 |
Weighted Average Exercise Price Per Share, Outstanding, Beginning balance | 3.86 | 3 |
Weighted Average Exercise Price Per Share, Granted | 4.61 | 4.28 |
Weighted Average Exercise Price Per Share, Exercised | ||
Weighted Average Exercise Price Per Share, Cancelled | ||
Weighted Average Exercise Price Per Share, Outstanding, Ending balance | 4.06 | 3.86 |
Weighted Average Exercise Price Per Share, Exercisable | $ 4 | $ 4.04 |
Weighted Average Remaining Terms (in years), Outstanding, Beginning balance | 9 years 1 month 24 days | |
Weighted Average Remaining Terms (in years), Outstanding, Ending balance | 8 years 4 months 28 days | |
Weighted Average Remaining Terms (in years), Exercisable | 8 years 3 months 18 days | 9 years 2 months 8 days |
Aggregate intrinsic Value, Outstanding, Beginning balance | $ 1,881,869 | |
Aggregate Intrinsic Value, Outstanding, Ending balance | ||
Aggregate Intrinsic Value, Exercisable | $ 1,435,515 |
Share-based Compensation (Det_4
Share-based Compensation (Details 3) - RSUs [Member] | 12 Months Ended |
Dec. 31, 2018shares | |
Stock Options and Grants [Abstract] | |
Number of Shares, Non-vested beginning | |
Number of Shares, Granted | 27,955 |
Number of Shares, Vested | |
Number of Shares, Forfeited/Expired | 5,591 |
Number of Shares, Non-vested ending | 22,364 |
Share-based Compensation (Det_5
Share-based Compensation (Details Textual) | Jul. 26, 2018$ / sharesshares | Mar. 31, 2018USD ($)Employee$ / sharesshares | Sep. 30, 2017$ / sharesshares | Mar. 31, 2017USD ($)Director$ / sharesshares | Jan. 30, 2017USD ($)Employee$ / sharesshares | Oct. 26, 2016shares | Sep. 30, 2017USD ($)$ / shares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)shares |
Stock Options and Grants (Textual) | |||||||||
Stock-based compensation | $ | $ 396,214 | $ 701,402 | |||||||
Restricted stock or options issued, shares | 195,914 | ||||||||
Recognized stock-based compensation expense | $ | $ 332,662 | $ 701,402 | |||||||
Non-vested stock options weighted average period | 1 year 3 months 10 days | ||||||||
Fair value of stock price | $ / shares | $ 2.71 | ||||||||
Granted options to purchase | 250,000 | 598,552 | |||||||
Options vested, description | These options vest in equal installments over a two-year and three-year period and will fully vest by the end of March 31, 2021. | ||||||||
Vesting Period | 2 years | ||||||||
Fair value of options | $ | $ 320,000 | ||||||||
Number of employees | Employee | 6 | 3 | |||||||
Restricted Stock [Member] | |||||||||
Stock Options and Grants (Textual) | |||||||||
Stock-based compensation | $ | $ 63,552 | ||||||||
Advisory Agreement [Member] | |||||||||
Stock Options and Grants (Textual) | |||||||||
Granted options to purchase | 50,000 | ||||||||
Exercise price | $ / shares | $ 6.25 | $ 6.25 | |||||||
Paul Galvin [Member] | |||||||||
Stock Options and Grants (Textual) | |||||||||
Granted options to purchase | 82,154 | ||||||||
Exercise price | $ / shares | $ 4.61 | ||||||||
Mahesh Shetty [Member] | |||||||||
Stock Options and Grants (Textual) | |||||||||
Granted options to purchase | 81,342 | ||||||||
Exercise price | $ / shares | $ 4.61 | ||||||||
Employees [Member] | |||||||||
Stock Options and Grants (Textual) | |||||||||
Granted options to purchase | 86,504 | ||||||||
Exercise price | $ / shares | $ 4.61 | ||||||||
Employees and Directors [Member] | |||||||||
Stock Options and Grants (Textual) | |||||||||
Granted options to purchase | 50,000 | ||||||||
Non-employee director [Member] | Restricted Stock [Member] | |||||||||
Stock Options and Grants (Textual) | |||||||||
Award granted (in shares) | 27,955 | ||||||||
Fair value of award (in dollars per share) | $ / shares | $ 5.36 | ||||||||
2016 Plan [Member] | |||||||||
Stock Options and Grants (Textual) | |||||||||
Restricted stock or options issued, shares | 500,000 | ||||||||
Common stock available for issuance, shares | 2,500,000 | 1,258,691 | |||||||
2016 Plan One [Member] | Paul Galvin [Member] | |||||||||
Stock Options and Grants (Textual) | |||||||||
Granted options to purchase | 185,425 | 96,814 | |||||||
Exercise price | $ / shares | $ 5 | $ 3 | |||||||
Public offering price | $ / shares | $ 5 | ||||||||
Fair value of options | $ | $ 316,599 | $ 370,558 | |||||||
2016 Plan One [Member] | Mahesh Shetty [Member] | |||||||||
Stock Options and Grants (Textual) | |||||||||
Granted options to purchase | 132,446 | 69,038 | |||||||
Exercise price | $ / shares | $ 6 | $ 3 | |||||||
Public offering price | $ / shares | $ 5 | ||||||||
Fair value of options | $ | $ 316,599 | $ 370,558 | |||||||
2016 Plan One [Member] | Stevan Armstrong [Member] | |||||||||
Stock Options and Grants (Textual) | |||||||||
Granted options to purchase | 34,481 | ||||||||
Exercise price | $ / shares | $ 3 | ||||||||
Fair value of options | $ | $ 316,599 | ||||||||
2016 Plan One [Member] | Director [Member] | |||||||||
Stock Options and Grants (Textual) | |||||||||
Granted options to purchase | 33,334 | ||||||||
Exercise price | $ / shares | $ 3 | ||||||||
Fair value of options | $ | $ 42,934 | ||||||||
Number of Directors | Director | 2 | ||||||||
2016 Plan One [Member] | Employees [Member] | |||||||||
Stock Options and Grants (Textual) | |||||||||
Granted options to purchase | 47,010 |
Commitments and Contingencies (
Commitments and Contingencies (Details Textual) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Other Commitments [Line Items] | |
Payment to phipps | $ 500,000 |
Teton Buildings, LLC [Member] | |
Other Commitments [Line Items] | |
Damages value from Teton Buildings, LLC | $ 2,100,000 |