Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Jun. 26, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | SMG Industries Inc. | |
Entity Central Index Key | 0001426506 | |
Current Fiscal Year End Date | --12-31 | |
Entity Interactive Data Current | Yes | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Trading Symbol | SMGI | |
Entity Common Stock, Shares Outstanding | 17,380,108 | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | true |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 585,476 | $ 30,354 |
Accounts receivable, net of allowance for doubtful accounts of $254,483 and $254,483 as of March 31, 2020 and December 31, 2019, respectively | 9,689,360 | 1,172,697 |
Cost in excess of billings | 18,410 | 71,185 |
Inventory | 173,064 | 129,959 |
Prepaid expenses and other current assets | 1,690,626 | 300,067 |
Total current assets | 12,156,936 | 1,704,262 |
Property and equipment, net of accumulated depreciation of $1,580,875 and $957,703 as of March 31, 2020 and December 31, 2019, respectively | 23,127,812 | 4,309,913 |
Other assets | 750,966 | 19,809 |
Right of use assets - operating lease | 1,721,453 | 266,158 |
Intangible assets, net of accumulated amortization $21,257 and $18,758 as of March 31, 2020 and December 31, 2019, respectively | 128,743 | 131,242 |
Total assets | 37,885,910 | 6,431,384 |
Current liabilities: | ||
Accounts payable | 4,579,619 | 2,129,475 |
Accrued expenses and other liabilities | 3,155,197 | 591,619 |
Right of use liabilities - operating leases short term | 439,794 | 113,479 |
Right of use liabilities - finance leases short term | 36,858 | 47,382 |
Deferred revenue | 30,000 | 36,379 |
Secured line of credit | 6,274,222 | 845,036 |
Current portion of note payable - related party | 0 | 98 |
Current portion of unsecured notes payable | 404,114 | 310,879 |
Current portion of secured notes payable, net | 4,966,638 | 1,692,775 |
Current portion of convertible note, net | 521,065 | 0 |
Total current liabilities | 20,407,507 | 5,767,122 |
Long term liabilities: | ||
Convertible note payable, net | 694,634 | 260,926 |
Notes payable - secured, net of current portion | 14,538,006 | 1,135,790 |
Right of use liabilities - operating leases, net of current portion | 1,307,314 | 164,679 |
Right of use liabilities - finance leases, net of current portion | 21,129 | 24,315 |
Total liabilities | 36,968,590 | 7,352,832 |
Commitments and contingencies | ||
Stockholders' equity (deficit) | ||
Common stock - $0.001 par value; authorized 25,000,000 shares as of March 31, 2020 and December 31, 2019; issued and outstanding 17,380,108 and 14,881,372 at March 31, 2020 and December 31, 2019, respectively | 17,380 | 14,881 |
Additional paid in capital | 9,613,811 | 4,756,194 |
Accumulated deficit | (8,713,879) | (5,692,525) |
Total stockholders' equity (deficit) | 917,320 | (921,448) |
Total liabilities and stockholders' equity (deficit) | 37,885,910 | 6,431,384 |
Series A Preferred Stock [Member] | ||
Stockholders' equity (deficit) | ||
Preferred stock 1,000,000 shares authorized | 2 | 2 |
Series B Preferred Stock [Member] | ||
Stockholders' equity (deficit) | ||
Preferred stock 1,000,000 shares authorized | $ 6 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Allowance for Doubtful Accounts Receivable, Current | $ 254,483 | $ 254,483 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | 1,580,875 | 957,703 |
Finite-Lived Intangible Assets, Accumulated Amortization | $ 21,257 | $ 18,758 |
Preferred Stock, Shares Authorized | 1,000,000 | 1,000,000 |
Common Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 25,000,000 | 25,000,000 |
Common Stock, Shares, Issued | 17,380,108 | 14,881,372 |
Common Stock, Shares, Outstanding | 17,380,108 | 14,881,372 |
Series A Preferred Stock [Member] | ||
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 2,000 | 2,000 |
Preferred Stock, Shares Issued | 2,000 | 2,000 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Series B Preferred Stock [Member] | ||
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 6,000 | 6,000 |
Preferred Stock, Shares Issued | 6,000 | 6,000 |
Preferred Stock, Shares Outstanding | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
REVENUES | $ 5,976,400 | $ 1,752,704 |
COST OF REVENUES | 6,010,636 | 1,480,715 |
GROSS PROFIT (LOSS) | (34,236) | 271,989 |
OPERATING EXPENSES: | ||
Selling, general and administrative | 2,497,904 | 838,624 |
Total operating expenses | 2,497,904 | 838,624 |
LOSS FROM OPERATIONS | (2,532,140) | (566,635) |
OTHER INCOME (EXPENSE) | ||
Interest expense, net | (447,091) | (143,627) |
Total other income (expense) | (447,091) | (143,627) |
NET LOSS | (2,979,231) | (710,262) |
Preferred stock dividends | (42,123) | |
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ (3,021,354) | $ (710,262) |
Net loss per common share | ||
Basic | $ (0.19) | $ (0.06) |
Diluted | $ (0.19) | $ (0.06) |
Weighted average common shares outstanding | ||
Basic | 15,686,520 | 12,460,520 |
Diluted | 15,686,520 | 12,460,520 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | Series A Preferred Stock [Member] | Series B Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulate Deficit [Member] | Total |
Beginning balance at Dec. 31, 2018 | $ 0 | $ 0 | $ 11,911 | $ 1,567,567 | $ (1,677,427) | $ (97,949) |
Beginning balance (in shares) at Dec. 31, 2018 | 0 | 0 | 11,910,690 | |||
Share issued for deferred financing cost | 0 | |||||
Shares issued for cash | $ 0 | $ 0 | $ 936 | 233,064 | 0 | 234,000 |
Shares issued for cash (in shares) | 0 | 0 | 936,000 | |||
Shares issued to settle accounts payable | $ 0 | $ 0 | $ 27 | 12,552 | 0 | 12,579 |
Shares issued to settle accounts payable (in shares) | 0 | 0 | 27,046 | |||
Share based compensation | $ 0 | $ 0 | $ 0 | 34,420 | 0 | 34,420 |
Net loss | 0 | 0 | 0 | 0 | (710,262) | (710,262) |
Ending balance at Mar. 31, 2019 | $ 0 | $ 0 | $ 12,874 | 1,847,603 | (2,387,689) | (527,212) |
Ending balance (in shares) at Mar. 31, 2019 | 0 | 0 | 12,873,736 | |||
Beginning balance at Dec. 31, 2019 | $ 2 | $ 0 | $ 14,881 | 4,756,194 | (5,692,525) | (921,448) |
Beginning balance (in shares) at Dec. 31, 2019 | 2,000 | 0 | 14,881,372 | |||
Shares issued for business acquisition | $ 0 | $ 6 | $ 0 | 4,377,994 | 0 | 4,378,000 |
Shares issued for business acquisition (in shares) | 0 | 6,000 | 0 | |||
Share issued for deferred financing cost | $ 0 | $ 0 | $ 2,499 | 417,289 | 0 | 419,788 |
Share issued for deferred financing cost (in shares) | 0 | 0 | 2,498,736 | |||
Share based compensation | $ 0 | $ 0 | $ 0 | 2,895 | 0 | 2,895 |
Warrant issued for notes payable - debt discount | 0 | 0 | 0 | 59,439 | 0 | 59,439 |
Preferred stock dividends | 0 | 0 | 0 | 0 | (42,123) | (42,123) |
Net loss | 0 | 0 | 0 | 0 | (2,979,231) | (2,979,231) |
Ending balance at Mar. 31, 2020 | $ 2 | $ 6 | $ 17,380 | $ 9,613,811 | $ (8,713,879) | $ 917,320 |
Ending balance (in shares) at Mar. 31, 2020 | 2,000 | 6,000 | 17,380,108 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (2,979,231) | $ (710,262) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation | 2,895 | 34,420 |
Depreciation and amortization | 625,663 | 80,636 |
Amortization of deferred financing costs | 126,050 | 73,579 |
Amortization of right of use assets - operating leases | 55,602 | 0 |
Gain (loss) on settlement of liabilities | 0 | 4,007 |
Gain (loss) on disposal of assets | 10,229 | 0 |
Changes in: | ||
Accounts receivable | (286,175) | (223,837) |
Inventory | (43,105) | 12,237 |
Prepaid expenses and other current assets | 73,073 | 24,511 |
Accounts payable | (2,478,620) | 626,404 |
Accrued expenses and other liabilities | 2,460,101 | 54,629 |
Right of use operating lease liabilities | (41,947) | 0 |
Deferred revenue | (6,379) | (39,877) |
Net cash used in operating activities | (2,481,844) | (63,553) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash paid for acquisition of 5J Entities, net | (6,320,168) | 0 |
Cash paid for purchase of property and equipment | (84,878) | (65,471) |
Net cash used in investing activities | (6,405,046) | (65,471) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payment of deferred financing costs | (239,558) | 0 |
Proceeds from secured line of credit, net | 5,639,486 | 61,387 |
Proceeds form notes executed | 3,215,010 | 100,000 |
Payments on notes payable | (483,839) | (141,991) |
Payments on ROU liabilities - finance leases | (13,710) | (13,817) |
Proceeds from notes payable, related party | 10,400 | 21,800 |
Payments on notes payable, related party | (35,777) | (42,531) |
Payments on MG Cleaners acquisition - related party | 0 | (21,000) |
Proceeds from convertible notes payable | 1,350,000 | 0 |
Proceeds from sales of common stock, net | 0 | 234,000 |
Net cash provided by financing activities | 9,442,012 | 197,848 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 555,122 | 68,824 |
CASH AND CASH EQUIVALENTS, beginning of period | 30,354 | 1,608 |
CASH AND CASH EQUIVALENTS, end of period | 585,476 | 70,432 |
Supplemental disclosures: | ||
Cash paid for income taxes | 0 | 0 |
Cash paid for interest | 0 | 61,832 |
Noncash investing and financing activities | ||
Capitalization of ROU assets and liabilities - finance | 0 | 19,901 |
Capitalization of ROU assets and liabilities - operating | 0 | 0 |
Expenses paid by related party | 25,279 | 0 |
Debt discount from issuance of common stock warrants | 59,439 | 0 |
Preferred stock dividend | 42,123 | 0 |
Non-cash consideration paid for business acquisition | 4,378,000 | 0 |
Non-cash consideration paid for increase in secured notes payable | 5,840,622 | 0 |
Non-cash consideration for prepaids from debt financing | 331,065 | 0 |
Settlement of accounts payable with common stock issuance | 0 | 8,572 |
Shares issued for deferred financing costs | $ 419,788 | $ 0 |
BACKGROUND AND BASIS OF PRESENT
BACKGROUND AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2020 | |
BACKGROUND AND BASIS OF PRESENTATION | |
BACKGROUND AND BASIS OF PRESENTATION | SMG INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) NOTE 1 — BACKGROUND AND BASIS OF PRESENTATION SMG Industries Inc. (the “Company” or “SMG”) is a corporation established pursuant to the laws of the State of Delaware on January 7, 2008. The Company original business was the acquisition and stockpile of a rare metal known as Indium used in cell phones and other industrial applications. The Company eventually sold its stockpile and distributed most of the proceeds to its stockholders via special dividends and share repurchases. The Company today is a growth-oriented oilfield services company that operates throughout the domestic Southwest United States. Through its wholly-owned operating subsidiaries, the Company offers an expanding suite of products and services across the oilfield market segments of drilling, completions and production. On June 3, 2019, we entered into an Agreement and Plan of Share Exchange dated as of such date (with Trinity Services LLC, a Louisiana limited liability company (“Trinity”) and the sole member of Trinity (the “Trinity Member”). We completed the closing of the acquisition of Trinity on June 26, 2019. Trinity Services LLC provides lease roads, location and pad development using construction equipment to build drilling pad locations and well site services using a work over rig to perform services on existing wells. SMG Industries, Inc. headquartered in Houston, Texas has facilities in Palestine, Floresville, Waskom, Carthage, Odessa and Alice, Texas. On February 27, 2020, we entered into a Membership Interest Purchase Agreements for the acquisition of all of the membership interests of each of 5J Oilfield Services LLC, a Texas limited liability company (“5J Oilfield”) and 5J Trucking LLC, a Texas limited liability company (“5J Trucking”) (5J Oilfield and 5J Trucking shall be collectively referred to herein as the “5J Entities”). 5J Oilfield and 5J Trucking services the drilling rig transportation and midstream heavy haul logistics market segments. 5J’s business includes transporting midstream compressors, production equipment and infrastructure components such as cement bridge beams with a fleet of more than 100 trucks, 200 trailers and 15 cranes. MG Cleaners LLC., serves the drilling market segment with proprietary branded products including detergents, surfactants and degreasers (such as Miracle Blue®) as well as equipment and service crews that perform on-site repairs, maintenance and drilling rig wash services. SMG's oil tools rental division includes an inventory of more than 800 bottom hole assembly (BHA) oil tools such as stabilizers, drill collars, crossovers and bit subs rented to oil companies and their directional drillers. SMG's frac water management division, known as Momentum Water Transfer, focuses in the completion or fracing market segment providing high volume above ground equipment and temporary infrastructure to route water used on location for fracing. The accompanying unaudited interim consolidated financial statements of SMG Industries Inc. (“we”, “our”, “SMG” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and should be read in conjunction with the audited financial statements and notes thereto for the years ended December 31, 2019 and 2018 with are included on a Form 10-K filed on May 29, 2020. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for years ended December 31, 2019 and 2018 have been omitted. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basic and Diluted Net Loss per Share The Company presents both basic and diluted net loss per share on the face of the statements of operations. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted per share calculations give effect to all potentially dilutive shares of common stock outstanding during the period, including stock options and warrants, and using the treasury-stock method. If anti-dilutive, the effect of potentially dilutive shares of common stock is ignored. For the three months ended March 31, 2020 2,860,000 of stock options, 1,763,335 of warrants, 4,000,000 shares issuable from Series A Preferred Stock, 4,806,388 shares issuable from Series B Preferred Stock and 6,500,000 shares issuable from convertible notes were considered for their dilutive effects. For the three months ended March 31, 2019, 630,000 of stock options, 525,001 of warrants and 500,000 shares issuable from convertible notes were considered for their dilutive effects. March 31, 2020 March 31, 2019 Basic and Diluted Loss Net Loss Attributable to Common Shareholders $ (3,021,354) $ (710,262) Basic and Dilutive Shares: Weighted average basic shares outstanding 15,686,520 12,460,520 Net dilutive stock options — — Dilutive shares 15,686,520 12,460,520 Recent Accounting Pronouncements The Company does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements. |
GOING CONCERN
GOING CONCERN | 3 Months Ended |
Mar. 31, 2020 | |
GOING CONCERN | |
GOING CONCERN | NOTE 3 – GOING CONCERN The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, no adjustments to the financial statements have been made to account for this uncertainty. The Company concluded that the uncertainty surrounding the COVID-19 global pandemic, its negative working capital and negative cash flows from operating are conditions that raised substantial doubt about the Company’s ability to continue as a going concern. The Company plans to continue to generate additional revenue (and improve cash flows from operations) partly related to the Company’s acquisition of an additional operating company in 2020 and partly related to the Company cross-selling additional sales initiatives already implemented with the acquisition’s additional customer base. The Company believes that loans obtained under the Paycheck Protection Program in 2020 will be forgiven in accordance with the terms of the program. |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2020 | |
REVENUE | |
REVENUE | NOTE 4 – REVENUE Disaggregation of revenue The Company disaggregates revenue between services and products revenue. All revenues are currently in the southern region of the United States. Three Months Ended Three Months Ended March 31, 2020 March 31, 2019 Service revenue $ 5,478,856 $ 897,012 Product revenue 497,544 855,692 Total revenue $ 5,976,400 $ 1,752,704 Customer Concentration and Credit Risk During the three months ended March 31, 2020, one of our customers accounted for approximately 17% of our total gross revenues. No other customers exceeded 10% of revenues during the three months ended March 31, 2020. During the three months ended March 31, 2019, three of our customers accounted for approximately 57% of our total gross revenues, with two customers each accounting for 21% and another accounting for 15%. No other customers exceeded 10% of revenues during 2019. One customers accounted for approximately 13% of accounts receivable at March 31, 2020, and three customers accounted for approximately 48% of accounts receivable at December 31, 2019. No other customers exceeded 10% of accounts receivable as of March 31, 2020 and December 31, 2019. The Company believes it will continue to reduce the customer concentration risks by engaging new customers and by increasing activity with existing, less active customers and relatively smaller, newer customer relationships. While the Company continues to acquire new customers in an effort to grow and reduce its customer concentration risks, management believes these risks will continue for the foreseeable future. |
INVENTORY
INVENTORY | 3 Months Ended |
Mar. 31, 2020 | |
INVENTORY | |
INVENTORY | NOTE 5 - INVENTORY Inventory consisted of the following components: March 31, 2020 December 31, 2019 Raw materials and supplies $ 47,874 $ 46,237 Work in progress — — Finished and purchased products 125,190 83,722 Total inventory $ 173,064 $ 129,959 |
LONG-LIVED ASSETS
LONG-LIVED ASSETS | 3 Months Ended |
Mar. 31, 2020 | |
LONG-LIVED ASSETS | |
LONG-LIVED ASSETS | NOTE 6 – LONG-LIVED ASSETS Property and equipment at March 31, 2020 and December 31, 2019 consisted of the following: March 31, 2020 December 31, 2019 Equipment $ 23,107,346 $ 4,368,196 Downhole oil tools 657,888 671,888 Vehicles 179,867 179,867 Building 715,921 — Furniture, fixtures and other 47,665 47,665 24,708,687 5,267,616 Less: accumulated depreciation (1,580,875) (957,703) $ 23,127,812 $ 4,309,913 Depreciation expense for the three months ended March 31, 2020 and 2019 was $623,163 and $73,386 respectively. Intangible assets Intangible assets as of March 31, 2020 are related to the acquisition of the RigHands™ assets and the acquisition of tradenames of Momentum Water Transfer Services LLC. Intangible assets at March 31, 2020 and December 31, 2019 consisted of the following: Useful Life (yr) March 31, 2020 December 31, 2019 RigHands (Trademark & Formula) 15 $ 150,000 $ 150,000 MWTS Tradename 10 190,000 190,000 340,000 340,000 Less: impairment (190,000) (190,000) Less: accumulated amortization (21,257) (18,758) $ 128,743 $ 131,242 Amortization expense for the three months ended March 31, 2020 and 2019 was $2,500 and $7,250, respectively. Future amortization of the intangible assets for the years ended December 31, 2020, 2021, 2022, 2023, 2024 and beyond are $10,000, $10,000, $10,000, $10,000, $10,000 and $81,242, respectively. |
ACCRUED EXPENSES AND OTHER LIAB
ACCRUED EXPENSES AND OTHER LIABILITIES | 3 Months Ended |
Mar. 31, 2020 | |
ACCRUED EXPENSES AND OTHER LIABILITIES | |
ACCRUED EXPENSES AND OTHER LIABILITIES | NOTE 7 – ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses as of March 31, 2020 and December 31, 2019 included the following: March 31, 2020 December 31, 2019 Payroll and payroll taxes payable $ 1,132,881 $ 276,841 Sales tax payable 47,502 44,964 State income tax payable 209,350 — Property tax payable 49,500 — Interest payable 152,043 101,776 Credit cards payable 57,593 57,226 Linehaul accrued expenses 936,185 — Accrued service contracts 306,500 — Settlement accrual — 60,000 Other 263,643 50,812 Total Accrued Expenses & Other Liabilities $ 3,155,197 $ 591,619 |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2020 | |
NOTES PAYABLE | |
NOTES PAYABLE | N OTE 8 – NOTES PAYABLE Notes payable included the following: March 31, December 31, 2020 2019 Notes payable: Secured finance facility issued February 2, 2017, bearing effective interest of 6%, due monthly installments ending August 20, 2020. 4,831 10,573 Secured note payable issued January 2, 2018, bearing interest of 6.29% per year, due in monthly installments ending January 2023. 25,193 28,000 Secured note payable issued to a shareholder who controls approximately 8.8% of votes December 7, 2018, bearing interest of 10% per year, due one year after issuance. On March 6, 2020, the note was extended to June 30, 2020. Principal balance $100,000, net of deferred financing costs of $23,315. 100,000 100,000 Secured note payable issued to a shareholder who controls approximately 7.5% of votes December 7, 2018, bearing interest of 10% per year, due one year after issuance. On March 6, 2020, the note was extended to June 30, 2020. Principal balance $100,000, net of deferred financing costs of $23,315. 100,000 100,000 Secured note payable issued December 7, 2018, bearing interest of 10% per year, due one year after issuance, principal balance $100,000. 100,000 100,000 Secured note payable issued on December 7, 2018 related to the acquisition of Momentum Water Transfer Services LLC, bearing interest of 6% per year and due in monthly installments of $7,500, with a maturity date of December 8, 2023. 792,469 792,470 Secured note payable issued to a shareholder who controls approximately 8.8% of votes May 1, 2019, bearing interest of 10% per year, due July 1, 2019, principal balance $100,000, net of deferred financing costs of $7,125. Note was extended to March 30, 2020. 100,000 100,000 Secured note payable issued to a shareholder who controls approximately 8.8% of votes May 1, 2019, bearing interest of 10% per year, due June 30, 2020. 80,000 80,000 Secured note payable issued to a shareholder who controls approximately 8.8% of votes December 12, 2019, bearing interest of 12% per year, due June 3, 2020. 25,000 50,000 Various notes payable secured by equipment of Big Vehicle & Equipment Company, LLC, bearing interest ranging from 2.72% to 8% maturing through August 2023. 572,235 638,859 Secured note payable issued September 20, 2019, bearing interest of 12% per year, due in monthly installments ending December 2019. — 200,000 Secured note payable issued November 1, 2019, bearing interest of 18% per year, due in monthly installments ending April 2020. 619,584 747,500 Secured promissory note issued on January 23, 2020. The note is due and payable in thirty six monthly installments of $35,355 commencing on March 25, 2020 and the final installment is due on February 25, 2023 1,237,425 — Secured note payable issued July 26, 2019, bearing interest of 7% per year, due in monthly installments ending July 2020. 123,818 123,818 Secured note payable issued on February 27, 2020 to shareholder who owns 100% of Series B convertible preferred stock, bearing interest of 10% per year, due February 1, 2023. 2,000,000 — Secured note payable issued on February 28, 2020, bearing interest of 10.0% per year, due August 28, 2020. 487,148 — Various notes payable secured by equipment of 5J Trucking, LLC, bearing interest ranging from 5.32% to 5.5% maturing through December 2022. 758,861 — Secured note payable issued on February 27, 2020, bearing interest of 10.0% per year, due March 1, 2023. 1,362,627 — Master Lease Agreement refinanced substantially all of the 5J Entities equipment in the aggregate amount of $11,950,000 which amount was financed based on 75% of the net forced liquidation value of the equipment. 11,913,980 — 20,403,171 3,071,220 Less discounts (898,527) (242,655) Less current maturities (4,966,638) (1,692,775) Long term debt, net of current maturities $ 14,538,006 $ 1,135,790 On August 14, 2017, we refinanced a note payable for $66,348. The unsecured note bears an interest rate of 7.25% per annum, has 47 monthly payments of $1,400, with a balloon payment of $12,086 at maturity on August 1, 2021. The refinanced amount is identical to the remaining principal balance under the previous loan, thus no gain or loss has been recognized. On February 2, 2017, we refinanced two truck notes existing with a community bank for one new note of $53,610. The term was principal and interest payments monthly over 42 months with an interest rate of 6%. The note is secured by certain trucks and equipment of the Company. The refinanced amount is identical to the remaining principal balance under the previous loan. On January 2, 2018, we financed a truck with a note to a bank. The $41,481 note has an interest rate of 6.29% and payments of principal and interest are paid monthly. The note is secured by the truck purchased. This note matures in January 2023. On December 7, 2018, the Company issued and sold secured promissory notes in the aggregate principal amount of $300,000 to three separate purchasers. In addition to the issuance of the Notes an aggregate of 500,000 warrants (“Warrants”) were issued to the purchasers of the Notes. The Warrants are exercisable for a period of five years and are exercisable at $0.40 per share. Interest on the Notes shall be paid to the purchasers at a rate of 10.0% per annum, paid on a quarterly basis, and the maturity date of the Note is one year after the issuance date. The Notes are secured by all of the assets of the Company and the assets of MWTS, subject to prior liens and security interests. The warrants were valued at $203,337 and recorded as a discount to the notes payable. The discount will be amortized over the life of the notes payable. On December 7, 2018 the Company issued a 6% note to the MWTS Member in the amount of $800,000 as part of the purchase price for MWTS. The note requires monthly payment of $7,500, matures December 8, 2023 and is secured by all the assets of the Company subject to prior security interests. On January 11, 2019 the Company issued a $100,000 10% note to a shareholder who controls approximately 8.8%. The note matures on December 7, 2019 and is secured by a junior lien against the Company assets. In April 2019, the Company issued 511,370 shares of its restricted common stock with a fair value of $203,525 to settle this $100,000 note payable and $2,274 accrued interest in full. The transaction resulted in a loss on settlement of $101,251. In May 2019, the Company issued a promissory note in the amount of $100,000 with a maturity date of July 1, 2019 to an individual investor. The Company issued a five-year warrant to purchase 100,000 shares of the Company's common stock at a fixed price of $0.30. The warrants were valued $44,091 and recorded as a debt discount that was fully amortized as of December 31, 2019. On June 18, 2019, the Company issued 150,000 warrants with an exercise price of $0.30 and a term of ten years in exchange for an extension of the maturity date of the note through September 30, 2019. The warrants were valued at $67,223 and will be amortized over the extension period of the note. On October 1, 2019, the Company issued 120,000 warrants with an exercise price of $0.15 and a term of ten years in exchange for a second extension of the maturity date of the note through March 30, 2020. The warrants were valued at $14,330 and will be amortized over the extension period of the note. In June 2019, the Company issued a promissory note in the amount of $80,000 to an individual investor. The Company issued a ten-year warrant to purchase 120,000 shares of the Company's common stock at a fixed price of $0.30 per share. The warrants were valued at $53,780 and recorded as a debt discount. As of September 30, 2019, $53,780 was amortized leaving a discount balance of $0. On October 2, 2019, the Company issued 100,000 warrants with an exercise price of $0.15 and a term of ten years in exchange for a second extension of the maturity date of the note through March 30, 2020. The warrants were valued at $11,942 and will be amortized over the extension period of the note. On July 26, 2019, the Company paid a vendor payable that totaled $247,637, by issuing a promissory note in the name of its frac water company Jake Oilfield Solutions LLC for $123,819. The interest rate was 7% with principal and interest due at maturity July 25, 2020. The remaining balance of $123,818 was converted into 353,766 shares of SMG’s restricted common stock. On September 20, 2019, the Company issued a $200,000 12% promissory note. The note is due and payable in three monthly installments, the first two installments are interest only and the third and final installment for the balance of the principal and accrued interest is due at maturity December 20, 2019. On October 1, 2019, we entered into a second amendment to a unsecured promissory note to extend the maturity of the secured note held by a stockholder to June 30, 2020 and capitalizing the accrued interest of $4,559 where the total principal of the promissory note is now $44,559. All other terms of the note remained. In connection with this amendment, we issued a new common stock purchase warrant for 40,000 shares, with a ten-year term and a fixed exercise price of $0.15 per share and customary other provisions. The warrants were valued at $4,777 and will be amortized over the extension period of the note. See Notes Payable – Unsecured table below. On October 4, 2019, we sold for $30,000 property categorized on our balance sheet as an asset held for sale. This vacant property acquired by MG Cleaners years earlier is located in Carthage, Texas and not a part of our current operations. The original MG Cleaners seller note was secured by this property and received the proceeds of this sale of approximately $30,000. The seller note had a balance of $147,608 at the time of the sale of property. The remainder of the note was retired and paid in full by issuing 400,000 restricted shares of our common stock. See Note 8 – Stockholders’ Deficit. On December 12, 2019, the Company issued a $50,000 12% secured promissory note. The note is due and payable in monthly installments of the principal and accrued interest with the first payment of $25,000 due on or before December 19, 2019. The remaining balance shall be paid in $5,000 monthly installments until maturity on June 3, 2020. On December 12, 2019, the Company issued 75,000 warrants with an exercise price of $0.15 and a term of ten years in exchange for a second extension of the maturity date of the note through June 3, 2020. The warrants were valued at $17,947 and will be amortized over the extension period of the note. On January 23, 2020, the Trinity Services issued a secured promissory note for $1,272,780, which includes precomputed interest of $210,018. The note is due and payable in thirty six monthly installments of $35,355 commencing on March 25, 2020 and the final installment is due on February 25, 2023. The note is secured by machinery and equipment owned by SMG. On February 27, 2020, the 5J Entities entered into a Master Lease Agreement with Utica Leaseco LLC (“Utica”) pursuant to which Utica refinanced substantially all of the 5J Entities equipment in the aggregate amount of $11,950,000 which amount was financed based on 75% of the net forced liquidation value of the equipment. Pursuant to the terms of the Utica Financing, the 5J Entities will pay a monthly fee to Utica for a period of 51 months, with a cash payment due at the end of the lease term in the amount of $831,880. The 5J Entities own all of the assets financed pursuant to the Utica Financing, subject to Utica’s security interest in all of the equipment of the 5J Entities pursuant to the terms of the security agreement. Each of the Company and Matthew Flemming, its CEO, have entered into guaranty agreements with Utica, whereby they have guaranteed all of the obligations of the 5J Entities under the Utica Master Lease Agreement, pursuant to the guaranty agreements. On May 19, 2020, the Company amended the Utica Master Lease agreement, whereby Utica agreed to accept a reduced monthly payment of $150,000 for six months starting in April 2020 and a monthly payment of $366,63.34 for 45 months, with a cash payment due at the end of the lease term in the amount of $831,880. Future maturities of secured notes payable as of March 31, 2020 are as follows: 2020 $ 4,496,922 2021 4,591,371 2022 4,783,478 2023 3,702,468 2024 2,828,932 Total $ 20,403,171 Notes Payable – Unsecured March 31, December 31, 2020 2019 Financed insurance premium, Note Payable issued on October 2, 2019, bearing interest of 5.5% per year and due in monthly installments ending July 31, 2020 $ 48,050 $ 75,576 Unsecured note payable with a shareholder who controls approximately 7.5% of votes. Note issued on August 10, 2018 for $40.000, due December 30, 2018 (extended to June 30, 2019) and 10% interest per year, balance of payable is due on demand. Additional $25,000 advanced and due on demand 44,559 44,559 Unsecured advances from the sellers of Momentum Water Transfer Services LLC, non-interest bearing and due on demand 35,000 35,000 Unsecured note with vendor, issued a $135,375 10% promissory note due at October 30, 2019. The note was issued in exchange for of settlement of accounts payable. 35,375 85,375 Financed insurance premium, Note Payable issued on October 1, 2019, bearing interest of 6.5% per year and due in monthly installments ending July 28, 2020 42,723 73,554 Unsecured promissory note with bank, bearing interest 5.750% annually and matures on March 6, 2021. 200,000 — Notes payable - unsecured 405,707 314,064 Less discount (1,593) (3,185) 404,114 310,879 Less current portion (404,114) (310,879) Notes payable - unsecured, net of current portion $ — $ — Notes Payable (Related Party) During the year ended December 31, 2019, Stephen Christian advanced $10,400 to the Company and was repaid $35,777 by the Company and received $25,279 of noncash advances from the Company. As of March 31, 2020 and December 31, 2019, $0 and $98 remained outstanding, respectively, with no specific repayment terms or stated interest rate. Accounts Receivable Financing Facility (Secured Line of Credit) On June 19, 2019, each of MG Cleaners LLC (“MG”), Trinity Services LLC (“Trinity”) and Jake Oilfield Solutions LLC (“Jake”), each of which is a wholly-owned subsidiary of the Company, entered into separate revolving accounts receivable financing facilities (collectively the “AR Facility”) with Catalyst Finance L.P. (“Catalyst”). The AR Facility was funded on June 27, 2019. The new AR Facility with Catalyst was used to pay off the Crestmark facility in full. The AR Facility provides for the Company, through MG, Trinity and Jake, to have access to up to 90% of the net amount of eligible receivables (as defined in the financing agreement). The AR Facility is paid for by the assignment of the accounts receivable of each of MG, Trinity and Jake to Catalyst and is secured by all instruments and proceeds related thereto. The AR Facility has an interest rate of 2.25% in excess of the prime rate reported by the Wall Street Journal per annum, plus a financing fee equal to 0.20% of the receivable balance every 15 days, with a maximum cumulative rate of 1.6%. There are no origination fees, monitoring or early termination fees. The AR Facility can be terminated by the Company with thirty days written notice. The Company is a guarantor of the financing facility and our subsidiaries as borrowers have cross-collateralized their accounts receivable with this facility. On June 27, 2019, an accounts receivable financing company funding a total of $1,317,304 pursuant to the AR facility. Of the amounts funded $500,000 was paid directly to the seller of Trinity, $43,219 was used to pay off notes payable of MG Cleaners, $714,239 was used to pay off the Crestmark liability and the remaining $59,846 was deposited to the Company's bank account. On February 27, 2020, the 5J Entities entered into a Revolving Accounts Receivable Assignment and Term Loan Financing and Security Agreement with Amerisource Funding Inc. (“Amerisource”) in the aggregate amount of $10,000,000 (“Amerisource Financing”).The Amerisource Financing provides for: (i) an equipment loan in the principal amount of $1,401,559 (“Amerisource Equipment Loan”), (ii) a bridge term facility in the amount of $550,690 (“Bridge Facility”), and (iii) an accounts receivable revolving line of credit up to $10,000,000 (“AR Facility”). The Company recorded $21,023 of deferred financing costs related to this note which will be amortized over the life of the loan. During the three months ended March 31, 2020, $1,752 of deferred financing cost related to this note have been amortized. The AR Facility has been issued in an amount not to exceed $10,000,000 , with the maximum availability limited to 85% of the eligible accounts receivable (as defined in the financing agreement). The AR Facility is paid for by the assignment of the accounts receivable of each of the 5J Entities and is secured by all instruments and proceeds related thereto. The AR Facility has an interest rate of 4.5% in excess of the prime rate per annum, an initial collateral management fee of 0.75% of the maximum account limit per annum, a non-usage fee of 0.35% assessed on a quarterly basis on the difference between the maximum availability under the AR Facility and the average daily revolving loan balance outstanding, and a one time commitment fee equal to $100,000 paid at closing. The AR Facility can be terminated by the 5J Entities with 60 days written notice. There is an early termination fee equal to two percent (2.0%) of the then maximum account limit if there are more than twelve (12) months remaining in term of the AR Facility, or one percent (1.0%) of the then maximum account limit if there twelve months or less remaining in the term of the AR Facility. The Company is a guarantor of the Amerisource Financing. The balances under the above lines of credit was $6,274,222 and $845,036 as of March 31, 2020 and December 31, 2019, respectively. Convertible Notes Payable On February 27, 2020, the Company entered into a loan agreement with Amerisource Leasing Corporation for the sale of a 10% convertible promissory note in the principal amount of $1,600,000 ("Amerisource Note") to Amerisource ("Amerisource Loan Agreement"). The Amerisource Note matures on February 27, 2023 and is convertible into shares of the Company's common stock at a conversion price of $0.25 per share. The interest rate on the Amerisource Note increases to 11% per annum on February 27, 2021 and to 12% per annum on February 27, 2022. Interest shall be paid on a quarterly basis. In addition, 2,498,736 shares of the Company's common stock were issued to the noteholder in connection with the sale of the Amerisource Note. The Amerisource Note may be prepaid at any time by the Company on 10 days-notice to the noteholder without penalty. The Company recorded $419,788 of deferred financing costs related to this note which will be amortized over the life of the loan. During the three months ended March 31, 2020, $11,661 of deferred financing cost related to this note have been amortized. On September 28, 2018, the Company entered into a secured note purchase agreement with an individual investor for the purchase and sale of a convertible promissory note (“Convertible Note”) in the principal amount of $250,000. The Convertible Note is convertible at any time after the date of issuance into shares of the Company’s common stock at a conversion price of $0.50 per share. Interest on the Note shall be paid to the investor at a rate of 8.5% per annum, paid on a quarterly basis, and the maturity date of the Convertible Note is two years after the issuance date. The Convertible Note is secured by all of the assets of the Company, subject to prior liens and security interests. The Company evaluated the Convertible Note and determined is a conventional convertible instrument. As a result, a beneficial conversion feature was calculated as $100,000 at the time of issuance and recorded as a discount. During the three months ended March 31, 2020, $12,900 of the discount was amortized. On February 27, 2020, the principal amount of $250,000 was converted into the Amerisource Note and is convertible into the Company's common stock at a fixed exercise price of $0.25 per share anytime while the note is outstanding. In April 2019, the Company issued a convertible promissory note in the amount of $50,000 to an individual investor. The note bears an interest rate of 8 ½ %, payable in cash quarterly, matures in two years and is convertible at anytime into shares of the Company’s common stock at a fixed conversion price of $0.50 (fifty cents) per share. As of March 31, 2020, the convertible notes, net balance was $1,215,699 which includes current portion of convertible notes of $521,065. As of December 31, 2020, the convertible notes balance was $260,926. |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 3 Months Ended |
Mar. 31, 2020 | |
STOCKHOLDERS' DEFICIT | |
STOCKHOLDERS' DEFICIT | NOTE 9 – STOCKHOLDERS’ DEFICIT During the three months ended March 31, 2020, the Company issued 2,498,736 shares of the common stock were to the noteholder in connection with the sale of the Amerisource Note. Preferred Stock – Series A Convertible Preferred stock On June 4, 2019 the company filed a Certificate of Designation of Preferences, Rights and Limitations of 3% Series “A” Convertible Preferred Stock to create a new class of stock in connection with its pending acquisition. This Series A Convertible Preferred stock has designated 2,000 shares, has a stated value of $1,000 per share and was delivered to the seller of Trinity Services LLC at closing. The Series A Preferred Stock shall, with respect to dividend distributions and distributions upon liquidation, winding up or dissolution of the Corporation, rank senior to all classes of Common Stock and to each other class of Capital Stock of the Corporation or series of Preferred Stock of the Corporation existing or hereafter created. The Series A Preferred Stock shall pay a three percent (3%) annual dividend on the outstanding Series A Preferred Stock, all of which shall be accrued until the Series A Preferred Stock has been converted. At any time from issuance, the stated value of each outstanding share of Series A Preferred Stock, plus accrued dividends thereon, shall be convertible (in whole or in part), at the option of the Holder into shares of the Company’s Common Stock at a fixed conversion price of $0.50 per share on the date on which the Holder notices a conversion. As of March 31, 2020, the Company has accrued $45,740 for the Series A preferred stock dividend. All outstanding shares of Series A Preferred Stock shall automatically convert into shares of the Company’s Common Stock upon the earlier to occur of: (i) twelve months after the date of issuance of the Series A Preferred Stock; or (ii) six months after the date of issuance of the Series A Preferred Stock, provided that (a) all shares of the Company’s Common Stock issued upon conversion may be sold under Rule 144 or pursuant to an effective registration statement without a restriction on resale, and (b) the average closing price of the Company’s Common Stock has been at least of $0.60 per share during the twenty (20) trading days prior to the date of conversion. The Holders shall have the right to receive notice of any meeting of holders of Common Stock or Series A Preferred Stock and to vote upon any matter submitted to a vote of the holders of Common Stock or Series A Preferred Stock, on an as-converted basis. Except as otherwise expressly set forth in the Certificate of Incorporation (including this Certificate of Designation), the Holders shall vote on each matter submitted to them with the holders of Common Stock and all other classes and series of Capital Stock entitled to vote on such matter, taken together as a single class, if any. Preferred Stock - Series B Convertible Preferred stock On February 20, 2020 the company filed a Certificate of Designation of Preferences, Rights and Limitations of 5% Series "B" Convertible Preferred Stock to create a new class of stock in connection with its pending acquisition. This Series B Convertible Preferred stock has designated 6,000 shares, has a stated value of $1,000 per share and was delivered to the seller of 5J Entities at closing. The Series B Preferred Stock shall, with respect to dividend distributions and distributions upon liquidation, winding up or dissolution of the Corporation, rank senior to all classes of Common Stock and to each other class of Capital Stock of the Corporation or series of Preferred Stock of the Corporation existing or hereafter created. The Series B Preferred Stock shall pay a five percent (5%) annual dividend on the outstanding Series B Preferred Stock, all of which shall be accrued until the Series B Preferred Stock has been converted. At any time from issuance, the stated value of each outstanding share of Series B Preferred Stock, plus accrued dividends thereon, shall be convertible (in whole or in part), at the option of the Holder into shares of the Company's Common Stock at a fixed conversion price of $1.25 per share on the date on which the Holder notices a conversion. As of March 31, 2020, the Company has accrued $27,123 for the Series B preferred stock dividend. All outstanding shares of Series B Preferred Stock, and accrued Dividends thereon, shall automatically convert into shares of the Corporation's Common Stock on the date that is thirty-six (36) months after the date of the issuance The Holders shall have the right to receive notice of any meeting of holders of Common Stock or Series B Preferred Stock and to vote upon any matter submitted to a vote of the holders of Common Stock or Series B Preferred Stock, on an as-converted basis. Except as otherwise expressly set forth in the Certificate of Incorporation (including this Certificate of Designation), the Holders shall vote on each matter submitted to them with the holders of Common Stock and all other classes and series of Capital Stock entitled to vote on such matter, taken together as a single class, if any. |
STOCK OPTIONS AND WARRANTS
STOCK OPTIONS AND WARRANTS | 3 Months Ended |
Mar. 31, 2020 | |
STOCK OPTIONS AND WARRANTS | |
STOCK OPTIONS AND WARRANTS | NOTE 10 – STOCK OPTIONS AND WARRANTS Summary stock option information is as follows: Weighted Aggregate Aggregate Exercise Average Number Exercise Price Price Range Exercise Price Outstanding, December 31, 2019 845,000 $ 383,750 $0.24 ‑ $2.00 $ 0.45 Granted 2,025,000 607,500 0.30 $ 0.30 Exercised — — — — Cancelled, forfeited or expired (10,000) (19,450) 0.37 ‑ 2.18 1.95 Outstanding, March 31, 2020 2,860,000 $ 971,800 $0.24 ‑ $2.00 $ 0.34 Exercisable, March 31, 2020 843,334 $ 344,384 $0.24 ‑ $2.00 $ 0.41 On February 28, 2020, the Company issued 2,025,000 common stock options to 5J and SMG employees. The options vest equally over a three-year period starting on February 28, 2021.The stock options have an exercise price of $0.30 and a five-year term. The weighted average remaining contractual life is approximately 2.96 years for stock options outstanding on March 31, 2020. At March 31, 2020 there was no intrinsic value of outstanding stock options. Summary stock warrant information is as follows: Weighted Aggregate Aggregate Exercise Average Number Exercise Price Price Range Exercise Price Outstanding, December 31, 2019 1,430,001 $ 430,000 $0.15 ‑ $0.75 $ 0.30 Granted 333,334 66,667 0.20 0.20 Exercised — — — — Cancelled, forfeited or expired — — — — Outstanding, March 31, 2020 1,763,335 $ 496,667 $0.15 ‑ 0.75 $ 0.28 Exercisable, March 31, 2020 1,763,335 $ 496,667 $0.15 ‑ 0.75 $ 0.28 In March 2020, the Company granted 333,334 warrants to two debt holders with a ten-year term and an exercise price of $0.20. The warrants are fully vested at the time of issuance. The Company valued the warrants using the Black-Scholes model with the following key assumptions ranging from: Stock price, $0.18, Exercise price, $0.20, Term 10 years, Volatility 183.29%, Discount rate, 0.74%. During the three ended March 31, 2020, the fair value of $59,439 was recoded as a notes payable discount and will be amortized over the life of the notes payable. The weighted average remaining contractual life is approximately 6.85 years for stock warrants outstanding on March 31, 2020. At March 31, 2020 there was no intrinsic value of outstanding stock warrants. |
ACQUISITION
ACQUISITION | 3 Months Ended |
Mar. 31, 2020 | |
ACQUISITION | |
ACQUISITION | NOTE 11 – ACQUISITION 5J Entities On February 27, 2020 we entered into a Membership Interest Purchase Agreements for the acquisition of all of the membership interests of each of 5J Oilfield Services LLC, a Texas limited liability company (“5J Oilfield”) and 5J Trucking LLC, a Texas limited liability company (“5J Trucking”) (5J Oilfield and 5J Trucking shall be collectively referred to herein as the “5J Entities”) (the “Transaction”). The total purchase price for the 5J Entities was $27.3 million. Due to the recent timing of the acquisition, the Company is currently in the process of determining the fair value of the net assets acquired and liabilities assumed. Pursuant to the terms of the 5J Oilfield Membership Interest Purchase Agreement (“5J Oilfield Agreement”), we acquired 100% of the issued and outstanding membership interests from the sole member of 5J Oilfield (“5J Oilfield Member”), pursuant to which 5J Oilfield has become a wholly-owned subsidiary of SMG Industries Inc. Pursuant to the terms of the 5J Oilfield Agreement, we have: (i) paid the 5J Oilfield Member $6,840,000 in cash; (ii) issued 6,000 shares of our 5% Series B Convertible Preferred Stock (“Preferred Stock”), stated value $1,000 per share; (iii) assumed or refinanced the obligation for truck notes owed by 5J and its affiliates in the principal amount of $1,034,000 and paid off a community line of credit balance as of closing in the amount of $5.86 million; and (iv) caused 5J Oilfield to issue a note (“Seller Note”) to the 5J Oilfield Member in the principal amount of $2,000,000 (“5J Oilfield Purchase Price”). The Preferred Stock issued in connection with the acquisition of the 5J Entities is convertible at $1.25 per share at any time after its issuance and shall automatically convert into shares of the Company’s common stock, par value $.001 per share, three years from the date of issuance. The Company shall pay a quarterly dividend of 5% per annum to the holder of the Preferred Stock, subject to certain conditions related to the EBITDA of the 5J Entities. In the event that the consolidated quarterly EBITDA of the 5J Entities is not in excess of the aggregate fixed monthly payments made to Amerisource (defined below) and Utica (defined below), the 5J Oilfield Member will have the option of accruing the dividend, or converting such amount due into shares of the Company’s common stock at the market price at such time. The holder of the Preferred Stock shall vote on all matters presented to the Company’s common stockholders on an as converted basis. All of the shares of Preferred Stock, and the shares of the Company’s Common Stock underlying the Preferred Stock, issued in connection with the Transaction are restricted securities, as defined in paragraph (a) of Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”). Such shares were issued pursuant to an exemption from the registration requirements of the Securities Act, under Section 4(a)(2) of the Securities Act and the rules and regulations promulgated thereunder. The acquisition of the 5J Entities is being accounted for as a business combination under ASC 805. The Company is continuing to gather evidence to evaluate what identifiable intangible assets were acquired, such as a customer list, and the fair value of each, and expects to finalize the fair value of the acquired assets within one year of the acquisition date. The fair value of the Series B preferred shares issued to the seller was estimated using a Black Scholes option price model with various scenarios factoring in the rights of preferences of the preferred shares, the capital structure of the Company, a risk free rate of 1.07%, a volatility of 51% and a maturity period of three years. The following information summarizes the provisional purchase consideration and preliminary allocation of the fair values assigned to the assets at the purchase date: Purchase Price: Cash, net $ 6,320,168 Preferred Series B shares issued 4,378,000 Seller note issued 2,000,000 Total purchase consideration $ 12,698,168 Purchase Price Allocation: Accounts receivable $ 8,177,713 Prepaid expense 655,864 Notes receivable 814,347 Other current asset 338,222 Right of use assets – operating 1,510,897 Property and equipment 19,352,189 Accounts payable and accrued expenses (4,945,881) Line of credit (5,840,622) Right of use liabilities – Operating (1,510,897) Notes payable (5,853,664) Total purchase consideration $ 12,698,168 The Company’s consolidated revenue and net loss for the three months ended March 31, 2020 include revenue of $4,360,381 and net loss of $804,814 related to the operations of the 5J Entities since the acquisition date. Trinity On June 3, 2019 we entered into an Agreement and Plan of Share Exchange dated as of such date (the “Trinity Exchange Agreement”) with Trinity Services LLC, a Louisiana limited liability company (“Trinity”) and the sole member of Trinity (the “Trinity Member”). We expect to complete the closing of the acquisition of Trinity on or before June 21, 2019 (“Closing Date”). On the Closing Date, pursuant to the Exchange Agreement, we will acquire one hundred percent (100%) of the issued and outstanding membership interests of Trinity (“Trinity Membership Interests”) from the Trinity Member pursuant to which Trinity will become our wholly owned subsidiary (“Trinity Acquisition”). In accordance with the terms of the Trinity Exchange Agreement, and in connection with the completion of the Acquisition, on the Closing Date we will: (i) issue 2,000 shares of our 3% Series A Secured Convertible Preferred Stock (“Preferred Stock”), stated value $1,000 per share, (ii) pay $500,000 in cash to the Trinity Member, and (iii) assume approximately $850,000 in notes related to equipment owned by Trinity (“Purchase Price”). The Preferred Stock is convertible at $0.50 per share at any time after the issuance thereof and is secured by all of the unencumbered assets of Trinity. All outstanding shares of Preferred Stock shall automatically convert into shares of the Company’s common stock upon the earlier to occur of: (i) twelve months after the date of issuance of the Preferred Stock; or (ii) six months after the date of issuance of the Preferred Stock, provided that (a) all shares of the Company’s common stock issued upon conversion of the Preferred Stock may be sold under Rule 144 or pursuant to an effective registration statement without a restriction on resale, and (b) the average closing price of the Company’s common stock has been at least of $0.60 per share during the twenty (20) trading days prior to the date of conversion. All of the shares of Preferred Stock, and the shares of the Company’s Common Stock underlying the Preferred Stock, issued in connection with the Acquisition are restricted securities, as defined in paragraph (a) of Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”). Such shares were issued pursuant to an exemption from the registration requirements of the Securities Act, under Section 4(a)(2) of the Securities Act and the rules and regulations promulgated thereunder. The Preferred Stock issued has a stated value of $2,000,000. The fair value of the Preferred Stock was based on the Black-Scholes model with the following key assumptions ranging from: Stock price $0.50, Exercise price $0.42, Term 3 years, Volatility 36% and Discount rate of 1.7%. The acquisition of Trinity is being accounted for as a business combination under ASC 805. The following information summarizes the purchase consideration and allocation of the fair values assigned to the assets at the purchase date: Purchase Price: Cash, net $ 500,000 Preferred stock issued 1,939,000 Total purchase consideration $ 2,439,000 Purchase Price Allocation: Accounts receivable $ 1,195,534 Cost in excess of billings 31,303 Property and equipment 2,887,441 Right of use assets - operating 87,900 Accounts payable and accrued expenses (834,363) Right of use liabilities - operating (87,900) Notes payable (840,915) Total purchase consideration $ 2,439,000 The Company’s consolidated revenue and net loss for the three months ended March 31, 2020 include revenue of $845,896 and net loss of $199,412 related to the operations of Trinity since the acquisition date. Unaudited Pro Forma Financial Information The following schedule contains pro-forma consolidated results of operations for the three months ended March 31, 2020 and 2019 as if the 5J Acquisition and Trinity acquisition occurred on January 1, 2019. The pro forma results of operations are presented for informational purposes only and are not indicative of the results of operations that would have been achieved if the acquisitions had taken place on the dates noted above, or of results that may occur in the future. For the three months ended March 31, 2020 March 31, 2019 Pro forma Pro forma Revenue $ 13,536,910 $ 20,247,516 Operating loss (1,936,519) (1,193,521) Net loss attributable to common shareholders (2,922,864) (1,799,426) Net loss per common share $ (0.19) $ (0.14) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 12 – COMMITMENTS AND CONTINGENCIES Employment Agreements On October 31, 2017, and made effective as of September 20, 2017, the Company entered into an employment agreement with Stephen Christian, the former Managing Member, and current President, of our subsidiary MG Cleaners LLC and EVP of SMG. The term is for three years with a monthly salary of $8,333 for the first six months of the effective date and $10,000 a month thereafter. Other terms include payment of Mr. Christian’s health care insurance, use of a company truck and other customary benefits. Termination without cause, as defined in the agreement, grants Mr. Christian six months’ severance pay. In May 2019, the Company adjusted the pay to $14,167 per month. On October 31, 2017, and made effective October 1, 2017, the Company entered into an employment agreement with Matthew Flemming, our Chief Executive Officer. The term is for three years with a monthly salary of $15,000 for the period. The terms of the agreement also include providing health care, auto allowance of $750 per month if a car is not provided by the Company, and other customary benefits. Termination without cause, as defined in the agreement, grants Mr. Flemming six months’ severance pay. Litigation From time to time, SMG may be subject to routine litigation, claims, or disputes in the ordinary course of business. Other than the above listed matter, in the opinion of management; no other pending or known threatened claims, actions or proceedings against SMG are expected to have a material adverse effect on SMG’s financial position, results of operations or cash flows. SMG cannot predict with certainty, however, the outcome or effect of any of the litigation or investigatory matters specifically described above or any other pending litigation or claims. There can be no assurance as to the ultimate outcome of any lawsuits and investigations. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2020 | |
LEASES | |
LEASES | NOTE 13 – LEASES The Company has operating and finance leases for sales and administrative offices, motor vehicles and certain machinery and equipment. The Company’s leases have remaining lease terms of 1 year to 4 years. For purposes of calculating operating lease liabilities, lease terms may be deemed to include options to extend the lease when it is reasonably certain that the Company will exercise those options. Some leasing arrangements require variable payments that are dependent on usage, output, or may vary for other reasons, such as insurance and tax payments. The variable lease payments are not presented as part of the initial ROU asset or lease liability. The Company’s lease agreements do not contain any material restrictive covenants. The components of lease cost for operating and finance leases for the three months ended March 31, 2020 were as follows: Three Months Ended Three Months Ended Lease Cost March 31, 2020 March 31, 2019 Operating lease cost $ 66,204 $ 50,454 Finance lease cost Amortization of right-of-use assets 10,528 8,424 Interest on lease liabilities 2,177 4,525 Total finance lease cost $ 12,705 $ 12,949 Short-term lease cost $ 122,084 $ 18,206 Variable lease cost — — Sublease income — — Total lease cost $ 200,993 $ 81,609 Supplemental cash flow information related to leases was as follows: Three Months Ended Other Lease Information March 31, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 48,374 Operating cash flows from finance leases $ 2,177 Financing cash flows from finance leases $ 13,710 The following table summarizes the lease-related assets and liabilities recorded in the consolidated balance sheets at March 31, 2020: Lease Position March 31, 2020 Operating Leases Operating lease right-of-use assets $ 1,721,453 Right of use liability operating lease short term $ 439,794 Right of use liability operating lease long term 1,307,314 Total operating lease liabilities $ 1,747,108 Finance Leases Equipment $ 190,241 Accumulated depreciation (66,057) Net Property $ 124,184 Long-term debt due within one year 36,858 Long-Term Debt 21,129 Total finance lease liabilities $ 57,987 The Company utilizes the incremental borrowing rate in determining the present value of lease payments unless the implicit rate is readily determinable. Lease Term and Discount Rate March 31, 2020 Weighted-average remaining lease term (years) Operating leases 4.2 Finance leases 1.5 Weighted-average discount rate Operating leases 13.0 % Finance leases 7.1 % The following table provides the maturities of lease liabilities at March 31, 2020: At March 31, 2020 the Company had no additional leases which had not yet commenced. Operating Finance Maturity of Lease Liabilities at March 31, 2020 Leases Leases 2020 $ 436,092 $ 37,589 2021 529,862 15,769 2022 470,674 10,404 2023 417,501 1,287 2024 202,000 — 2025 and thereafter 10,750 — Total future undiscounted lease payments $ 2,066,879 $ 65,049 Less: Interest (319,771) (7,062) Present value of lease liabilities $ 1,747,108 $ 57,987 The Company acquired six operating leases for equipment, office and warehouse space as part of the 5J Acquisition and recognized a right of use asset and operating lease liability of $1,510,897 as part of the purchase price accounting. The remaining terms of the acquired leases range from 36 and 60 months. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2020 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 14 – RELATED PARTY TRANSACTIONS James Frye, who currently serves as President of our 5J subsidiary, and owns our $6 million Series B Convertible Preferred Stock, also owns or has control over 5J Properties LLC, an entity that is the lessor to three leases with the Company. These three leases located in Palestine, West Odessa and Floresville Texas all have similar five year terms with options for renewal. The current monthly rent for these leases totals approximately $14,250. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2020 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 15 – SUBSEQUENT EVENTS In April 2020, 5J Oilfield Services LLC was informed by Hancock Whitney Bank, its lender, that they received approval from the U.S. Small Business Administration (“SBA”) to fund 5J’s request for a loan under the SBA’s Paycheck Protection Program (“PPP Loan”) created as part of the recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the SBA. In connection with the PPP Loan, 5J has entered into a two-year promissory note. Per the terms of the PPP Loan, 5J will receive total proceeds of $3,148,100 from the Hancock Whitney Bank. In accordance with the requirements of the CARES Act, 5J intends to use the proceeds from the PPP Loan primarily for payroll costs. The PPP Loan is scheduled to mature on April 22, 2022, has a 1.00% interest rate, and is subject to the terms and conditions applicable to all loans made pursuant to the Paycheck Protection Program as administered by the SBA under the CARES Act. In April and May 2020, SMG Industries, Inc., Trinity Services, LLC, Jake Oilfield Solutions, LLC and MG Cleaner, LLC (the “Companies”) were informed by their lender, Prosperity Bank (the “Bank”), that the Bank received approval from the U.S. Small Business Administration (“SBA”) to fund the Companies’ request for loans under the SBA’s Paycheck Protection Program (“PPP Loan”) created as part of the recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the SBA. In connection with the PPP Loans, the Companies have entered into two-year promissory notes. Per the terms of the PPP Loans, SMG will receive total proceeds of $72,500, Trinity will receive total proceeds of $195,000, Jake will receive total proceeds of $21,200 and MG will receive total proceeds of $190,000 from the Bank. In accordance with the requirements of the CARES Act, the Companies intend to use the proceeds from the PPP Loans primarily for payroll costs. The PPP Loans are scheduled to mature on April 20, 2022 for SMG, April 28, 2020 for Trinity and May 1, 2022 for Jake and MG. The loans have a 1.00% interest rate and are subject to the terms and conditions applicable to all loans made pursuant to the Paycheck Protection Program as administered by the SBA under the CARES Act. On May 15, 2020, the Company entered in a loan modification agreement with VFS US LLC. The agreement allowed for three months of nonpayment and modified the remaining future monthly payments. No other terms of the loan were modified. On May 27, 2020, our wholly-owned subsidiary, Trinity Services, LLC executed a note with the United States Small Business Administration (“SBA”) for $150,000 in connection with the SBA’s economic injury disaster loan (“EIDL”) program. The note has a thirty year term, an annual interest rate of 3.75% and payments of $731.00 are due monthly beginning twelve months from the date of the Note. The Note grants the SBA a general security interest in Trinity Services’ collateral and has no penalty of prepayment. Also on May 27, 2020, our wholly-owned subsidiary, MG Cleaners, LLC executed a note with the United States Small Business Administration (“SBA”) for $150,000 in connection with the SBA’s economic injury disaster loan (“EIDL”) program. The note has a thirty year term, an annual interest rate of 3.75% and payments of $731.00 are due monthly beginning twelve months from the date of the Note. The Note grants the SBA a general security interest in MG Cleaners’ collateral and has no penalty of prepayment. On June 17, 2020, our wholly-owned subsidiary, Momentum Water Transfer Services LLC, executed a note with the United States Small Business Administration (“SBA”) for $90,000 in connection with the SBA’s economic injury disaster loan (“EIDL”) program. The note has a thirty year term, an annual interest rate of 3.75% and payments of $439.00 are due monthly beginning twelve months from the date of the Note. The Note grants the SBA a general security interest in Momentum’s collateral and has no penalty of prepayment. As disclosed in the Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on May 15, 2020 by SMG Industries Inc. (the “Company”), on March 4, 2020, the SEC issued an order (Release No. 34-88318) under Section 36 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), granting exemptions from specified provisions of the Exchange Act and certain rules thereunder, as amended by Release No. 34-88465 issued on March 25, 2020 (as amended, the “Order”). The Company is relying on the Order and was unable to file this Quarterly Report on Form 10-Q for the period ended March 31, 2020 (the “Quarterly Report”) on a timely basis due to the outbreak of, and local, state and federal governmental responses to, the novel coronavirus pandemic (“COVID-19”). The Company’s operations have experienced disruptions due to the circumstances surrounding COVID-19 including, but not limited to, suggested and mandated social distancing and stay home orders. These mandates and the resulting office closure have severely limited access to the Company’s facilities by the Company’s financial reporting and accounting staff involved in the preparation of the Quarterly Report and impacted the Company’s ability to fulfill required preparation and review processes and procedures with respect to the Quarterly Report. In light of the impact of the factors described above, the Company was unable to compile and review certain information necessary to permit the Company to timely file the Quarterly Report by May 15, 2020, the original filing deadline, without unreasonable effort and expense. This Quarterly Report on Form 10-Q is being filed in reliance on the SEC Order. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basic and Diluted Net Loss per Share | Basic and Diluted Net Loss per Share The Company presents both basic and diluted net loss per share on the face of the statements of operations. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted per share calculations give effect to all potentially dilutive shares of common stock outstanding during the period, including stock options and warrants, and using the treasury-stock method. If anti-dilutive, the effect of potentially dilutive shares of common stock is ignored. For the three months ended March 31, 2020 2,860,000 of stock options, 1,763,335 of warrants, 4,000,000 shares issuable from Series A Preferred Stock, 4,806,388 shares issuable from Series B Preferred Stock and 6,500,000 shares issuable from convertible notes were considered for their dilutive effects. For the three months ended March 31, 2019, 630,000 of stock options, 525,001 of warrants and 500,000 shares issuable from convertible notes were considered for their dilutive effects. March 31, 2020 March 31, 2019 Basic and Diluted Loss Net Loss Attributable to Common Shareholders $ (3,021,354) $ (710,262) Basic and Dilutive Shares: Weighted average basic shares outstanding 15,686,520 12,460,520 Net dilutive stock options — — Dilutive shares 15,686,520 12,460,520 |
Recent Accounting Pronouncement | Recent Accounting Pronouncements The Company does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of basic and diluted net loss per share for their dilutive effects | March 31, 2020 March 31, 2019 Basic and Diluted Loss Net Loss Attributable to Common Shareholders $ (3,021,354) $ (710,262) Basic and Dilutive Shares: Weighted average basic shares outstanding 15,686,520 12,460,520 Net dilutive stock options — — Dilutive shares 15,686,520 12,460,520 |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
REVENUE | |
Schedule of disaggregation of revenue between services and products revenue | The Company disaggregates revenue between services and products revenue. All revenues are currently in the southern region of the United States. Three Months Ended Three Months Ended March 31, 2020 March 31, 2019 Service revenue $ 5,478,856 $ 897,012 Product revenue 497,544 855,692 Total revenue $ 5,976,400 $ 1,752,704 |
INVENTORY (Tables)
INVENTORY (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
INVENTORY | |
Schedule of inventory | Inventory consisted of the following components: March 31, 2020 December 31, 2019 Raw materials and supplies $ 47,874 $ 46,237 Work in progress — — Finished and purchased products 125,190 83,722 Total inventory $ 173,064 $ 129,959 |
LONG-LIVED ASSETS (Tables)
LONG-LIVED ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
LONG-LIVED ASSETS | |
Schedule of property, plant and equipment | Property and equipment at March 31, 2020 and December 31, 2019 consisted of the following: March 31, 2020 December 31, 2019 Equipment $ 23,107,346 $ 4,368,196 Downhole oil tools 657,888 671,888 Vehicles 179,867 179,867 Building 715,921 — Furniture, fixtures and other 47,665 47,665 24,708,687 5,267,616 Less: accumulated depreciation (1,580,875) (957,703) $ 23,127,812 $ 4,309,913 |
Schedule of intangible assets | Intangible assets at March 31, 2020 and December 31, 2019 consisted of the following: Useful Life (yr) March 31, 2020 December 31, 2019 RigHands (Trademark & Formula) 15 $ 150,000 $ 150,000 MWTS Tradename 10 190,000 190,000 340,000 340,000 Less: impairment (190,000) (190,000) Less: accumulated amortization (21,257) (18,758) $ 128,743 $ 131,242 |
ACCRUED EXPENSES AND OTHER LI_2
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
ACCRUED EXPENSES AND OTHER LIABILITIES | |
Schedule of accrued expenses | Accrued expenses as of March 31, 2020 and December 31, 2019 included the following: March 31, 2020 December 31, 2019 Payroll and payroll taxes payable $ 1,132,881 $ 276,841 Sales tax payable 47,502 44,964 State income tax payable 209,350 — Property tax payable 49,500 — Interest payable 152,043 101,776 Credit cards payable 57,593 57,226 Linehaul accrued expenses 936,185 — Accrued service contracts 306,500 — Settlement accrual — 60,000 Other 263,643 50,812 Total Accrued Expenses & Other Liabilities $ 3,155,197 $ 591,619 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
NOTES PAYABLE | |
Schedule of notes payable | Notes payable included the following: March 31, December 31, 2020 2019 Notes payable: Secured finance facility issued February 2, 2017, bearing effective interest of 6%, due monthly installments ending August 20, 2020. 4,831 10,573 Secured note payable issued January 2, 2018, bearing interest of 6.29% per year, due in monthly installments ending January 2023. 25,193 28,000 Secured note payable issued to a shareholder who controls approximately 8.8% of votes December 7, 2018, bearing interest of 10% per year, due one year after issuance. On March 6, 2020, the note was extended to June 30, 2020. Principal balance $100,000, net of deferred financing costs of $23,315. 100,000 100,000 Secured note payable issued to a shareholder who controls approximately 7.5% of votes December 7, 2018, bearing interest of 10% per year, due one year after issuance. On March 6, 2020, the note was extended to June 30, 2020. Principal balance $100,000, net of deferred financing costs of $23,315. 100,000 100,000 Secured note payable issued December 7, 2018, bearing interest of 10% per year, due one year after issuance, principal balance $100,000. 100,000 100,000 Secured note payable issued on December 7, 2018 related to the acquisition of Momentum Water Transfer Services LLC, bearing interest of 6% per year and due in monthly installments of $7,500, with a maturity date of December 8, 2023. 792,469 792,470 Secured note payable issued to a shareholder who controls approximately 8.8% of votes May 1, 2019, bearing interest of 10% per year, due July 1, 2019, principal balance $100,000, net of deferred financing costs of $7,125. Note was extended to March 30, 2020. 100,000 100,000 Secured note payable issued to a shareholder who controls approximately 8.8% of votes May 1, 2019, bearing interest of 10% per year, due June 30, 2020. 80,000 80,000 Secured note payable issued to a shareholder who controls approximately 8.8% of votes December 12, 2019, bearing interest of 12% per year, due June 3, 2020. 25,000 50,000 Various notes payable secured by equipment of Big Vehicle & Equipment Company, LLC, bearing interest ranging from 2.72% to 8% maturing through August 2023. 572,235 638,859 Secured note payable issued September 20, 2019, bearing interest of 12% per year, due in monthly installments ending December 2019. — 200,000 Secured note payable issued November 1, 2019, bearing interest of 18% per year, due in monthly installments ending April 2020. 619,584 747,500 Secured promissory note issued on January 23, 2020. The note is due and payable in thirty six monthly installments of $35,355 commencing on March 25, 2020 and the final installment is due on February 25, 2023 1,237,425 — Secured note payable issued July 26, 2019, bearing interest of 7% per year, due in monthly installments ending July 2020. 123,818 123,818 Secured note payable issued on February 27, 2020 to shareholder who owns 100% of Series B convertible preferred stock, bearing interest of 10% per year, due February 1, 2023. 2,000,000 — Secured note payable issued on February 28, 2020, bearing interest of 10.0% per year, due August 28, 2020. 487,148 — Various notes payable secured by equipment of 5J Trucking, LLC, bearing interest ranging from 5.32% to 5.5% maturing through December 2022. 758,861 — Secured note payable issued on February 27, 2020, bearing interest of 10.0% per year, due March 1, 2023. 1,362,627 — Master Lease Agreement refinanced substantially all of the 5J Entities equipment in the aggregate amount of $11,950,000 which amount was financed based on 75% of the net forced liquidation value of the equipment. 11,913,980 — 20,403,171 3,071,220 Less discounts (898,527) (242,655) Less current maturities (4,966,638) (1,692,775) Long term debt, net of current maturities $ 14,538,006 $ 1,135,790 |
Schedule of future maturities of secured notes payable | Future maturities of secured notes payable as of March 31, 2020 are as follows: 2020 $ 4,496,922 2021 4,591,371 2022 4,783,478 2023 3,702,468 2024 2,828,932 Total $ 20,403,171 |
Unsecured Debt [Member] | |
NOTES PAYABLE | |
Schedule of notes payable | Notes Payable – Unsecured March 31, December 31, 2020 2019 Financed insurance premium, Note Payable issued on October 2, 2019, bearing interest of 5.5% per year and due in monthly installments ending July 31, 2020 $ 48,050 $ 75,576 Unsecured note payable with a shareholder who controls approximately 7.5% of votes. Note issued on August 10, 2018 for $40.000, due December 30, 2018 (extended to June 30, 2019) and 10% interest per year, balance of payable is due on demand. Additional $25,000 advanced and due on demand 44,559 44,559 Unsecured advances from the sellers of Momentum Water Transfer Services LLC, non-interest bearing and due on demand 35,000 35,000 Unsecured note with vendor, issued a $135,375 10% promissory note due at October 30, 2019. The note was issued in exchange for of settlement of accounts payable. 35,375 85,375 Financed insurance premium, Note Payable issued on October 1, 2019, bearing interest of 6.5% per year and due in monthly installments ending July 28, 2020 42,723 73,554 Unsecured promissory note with bank, bearing interest 5.750% annually and matures on March 6, 2021. 200,000 — Notes payable - unsecured 405,707 314,064 Less discount (1,593) (3,185) 404,114 310,879 Less current portion (404,114) (310,879) Notes payable - unsecured, net of current portion $ — $ — |
STOCK OPTIONS AND WARRANTS (Tab
STOCK OPTIONS AND WARRANTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
STOCK OPTIONS AND WARRANTS | |
Schedule of stock option information | Summary stock option information is as follows: Weighted Aggregate Aggregate Exercise Average Number Exercise Price Price Range Exercise Price Outstanding, December 31, 2019 845,000 $ 383,750 $0.24 ‑ $2.00 $ 0.45 Granted 2,025,000 607,500 0.30 $ 0.30 Exercised — — — — Cancelled, forfeited or expired (10,000) (19,450) 0.37 ‑ 2.18 1.95 Outstanding, March 31, 2020 2,860,000 $ 971,800 $0.24 ‑ $2.00 $ 0.34 Exercisable, March 31, 2020 843,334 $ 344,384 $0.24 ‑ $2.00 $ 0.41 |
Schedule of stock warrant information | Summary stock warrant information is as follows: Weighted Aggregate Aggregate Exercise Average Number Exercise Price Price Range Exercise Price Outstanding, December 31, 2019 1,430,001 $ 430,000 $0.15 ‑ $0.75 $ 0.30 Granted 333,334 66,667 0.20 0.20 Exercised — — — — Cancelled, forfeited or expired — — — — Outstanding, March 31, 2020 1,763,335 $ 496,667 $0.15 ‑ 0.75 $ 0.28 Exercisable, March 31, 2020 1,763,335 $ 496,667 $0.15 ‑ 0.75 $ 0.28 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Business Acquisition [Line Items] | |
Schedule of unaudited pro forma financial information | The following schedule contains pro-forma consolidated results of operations for the three months ended March 31, 2020 and 2019 as if the 5J Acquisition and Trinity acquisition occurred on January 1, 2019. The pro forma results of operations are presented for informational purposes only and are not indicative of the results of operations that would have been achieved if the acquisitions had taken place on the dates noted above, or of results that may occur in the future. For the three months ended March 31, 2020 March 31, 2019 Pro forma Pro forma Revenue $ 13,536,910 $ 20,247,516 Operating loss (1,936,519) (1,193,521) Net loss attributable to common shareholders (2,922,864) (1,799,426) Net loss per common share $ (0.19) $ (0.14) |
5J Entities | |
Business Acquisition [Line Items] | |
Schedule of preliminary purchase consideration and preliminary allocation | Purchase Price: Cash, net $ 6,320,168 Preferred Series B shares issued 4,378,000 Seller note issued 2,000,000 Total purchase consideration $ 12,698,168 Purchase Price Allocation: Accounts receivable $ 8,177,713 Prepaid expense 655,864 Notes receivable 814,347 Other current asset 338,222 Right of use assets – operating 1,510,897 Property and equipment 19,352,189 Accounts payable and accrued expenses (4,945,881) Line of credit (5,840,622) Right of use liabilities – Operating (1,510,897) Notes payable (5,853,664) Total purchase consideration $ 12,698,168 |
Trinity Services LLC [Member] | |
Business Acquisition [Line Items] | |
Schedule of preliminary purchase consideration and preliminary allocation | Purchase Price: Cash, net $ 500,000 Preferred stock issued 1,939,000 Total purchase consideration $ 2,439,000 Purchase Price Allocation: Accounts receivable $ 1,195,534 Cost in excess of billings 31,303 Property and equipment 2,887,441 Right of use assets - operating 87,900 Accounts payable and accrued expenses (834,363) Right of use liabilities - operating (87,900) Notes payable (840,915) Total purchase consideration $ 2,439,000 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
LEASES | |
Schedule of components of lease cost for operating and finance leases | The components of lease cost for operating and finance leases for the three months ended March 31, 2020 were as follows: Three Months Ended Three Months Ended Lease Cost March 31, 2020 March 31, 2019 Operating lease cost $ 66,204 $ 50,454 Finance lease cost Amortization of right-of-use assets 10,528 8,424 Interest on lease liabilities 2,177 4,525 Total finance lease cost $ 12,705 $ 12,949 Short-term lease cost $ 122,084 $ 18,206 Variable lease cost — — Sublease income — — Total lease cost $ 200,993 $ 81,609 |
Schedule of supplemental cash flow information | Supplemental cash flow information related to leases was as follows: Three Months Ended Other Lease Information March 31, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 48,374 Operating cash flows from finance leases $ 2,177 Financing cash flows from finance leases $ 13,710 |
Schedule of lease position related assets and liabilities recorded in the consolidated balance sheets | The following table summarizes the lease-related assets and liabilities recorded in the consolidated balance sheets at March 31, 2020: Lease Position March 31, 2020 Operating Leases Operating lease right-of-use assets $ 1,721,453 Right of use liability operating lease short term $ 439,794 Right of use liability operating lease long term 1,307,314 Total operating lease liabilities $ 1,747,108 Finance Leases Equipment $ 190,241 Accumulated depreciation (66,057) Net Property $ 124,184 Long-term debt due within one year 36,858 Long-Term Debt 21,129 Total finance lease liabilities $ 57,987 |
Schedule of operating lease other information | The Company utilizes the incremental borrowing rate in determining the present value of lease payments unless the implicit rate is readily determinable. Lease Term and Discount Rate March 31, 2020 Weighted-average remaining lease term (years) Operating leases 4.2 Finance leases 1.5 Weighted-average discount rate Operating leases 13.0 % Finance leases 7.1 % |
Schedule of maturities of lease liabilities | Operating Finance Maturity of Lease Liabilities at March 31, 2020 Leases Leases 2020 $ 436,092 $ 37,589 2021 529,862 15,769 2022 470,674 10,404 2023 417,501 1,287 2024 202,000 — 2025 and thereafter 10,750 — Total future undiscounted lease payments $ 2,066,879 $ 65,049 Less: Interest (319,771) (7,062) Present value of lease liabilities $ 1,747,108 $ 57,987 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of basic and diluted loss (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Basic and Diluted Loss | ||
Net Loss Attributable to Common Shareholders | $ (3,021,354) | $ (710,262) |
Basic and Dilutive Shares: | ||
Weighted average basic shares outstanding | 15,686,520 | 12,460,520 |
Net dilutive stock options | 0 | 0 |
Dilutive shares | 15,686,520 | 12,460,520 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,860,000 | 630,000 |
Convertible Notes Payable [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 6,500,000 | 500,000 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,763,335 | 525,001 |
Series A Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 4,000,000 | |
Series B Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 4,806,388 |
REVENUE - Summary of Disaggrega
REVENUE - Summary of Disaggregation of revenue between services and products revenue (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues | $ 5,976,400 | $ 1,752,704 |
Service [Member] | ||
Revenues | 5,478,856 | 897,012 |
Product [Member] | ||
Revenues | $ 497,544 | $ 855,692 |
REVENUE - Additional Informatio
REVENUE - Additional Information (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Sales Revenue, Net [Member] | |||
Concentration Risk, Percentage | 10.00% | 10.00% | |
Sales Revenue, Net [Member] | Customer One [Member] | |||
Concentration Risk, Percentage | 17.00% | 57.00% | |
Sales Revenue, Net [Member] | Customer Two [Member] | |||
Concentration Risk, Percentage | 21.00% | ||
Sales Revenue, Net [Member] | Customer Three [Member] | |||
Concentration Risk, Percentage | 15.00% | ||
Accounts Receivable [Member] | |||
Concentration Risk, Percentage | 10.00% | 10.00% | |
Accounts Receivable [Member] | Customer One [Member] | |||
Concentration Risk, Percentage | 13.00% | ||
Accounts Receivable [Member] | Customer Three [Member] | |||
Concentration Risk, Percentage | 48.00% |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
INVENTORY | ||
Raw materials and supplies | $ 47,874 | $ 46,237 |
Work in progress | 0 | 0 |
Finished and purchased products | 125,190 | 83,722 |
Total inventory | $ 173,064 | $ 129,959 |
LONG-LIVED ASSETS (Details)
LONG-LIVED ASSETS (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment, Gross | $ 24,708,687 | $ 5,267,616 |
Less: accumulated depreciation | (1,580,875) | (957,703) |
Property, Plant and Equipment, Net | 23,127,812 | 4,309,913 |
Equipment [Member] | ||
Property, Plant and Equipment, Gross | 23,107,346 | 4,368,196 |
Downhole oil tools [Member] | ||
Property, Plant and Equipment, Gross | 657,888 | 671,888 |
Vehicles [Member] | ||
Property, Plant and Equipment, Gross | 179,867 | 179,867 |
Building [Member] | ||
Property, Plant and Equipment, Gross | 715,921 | 0 |
Furniture, fixtures and other [Member] | ||
Property, Plant and Equipment, Gross | $ 47,665 | $ 47,665 |
LONG-LIVED ASSETS - Intangible
LONG-LIVED ASSETS - Intangible assets (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets, Gross | $ 340,000 | $ 340,000 |
Less: impairment | (190,000) | (190,000) |
Less: accumulated amortization | (21,257) | (18,758) |
Finite-Lived Intangible Assets, Net | 128,743 | 131,242 |
RigHands (Trademark & Formula) [Member] | ||
Finite-Lived Intangible Assets, Gross | $ 150,000 | 150,000 |
Finite-Lived Intangible Asset, Useful Life | 15 years | |
MWTS Trademame [Member] | ||
Finite-Lived Intangible Assets, Gross | $ 190,000 | $ 190,000 |
Finite-Lived Intangible Asset, Useful Life | 10 years |
LONG-LIVED ASSETS - Additional
LONG-LIVED ASSETS - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
LONG-LIVED ASSETS | ||
Depreciation | $ 623,163 | $ 73,386 |
Amortization | 2,500 | $ 7,250 |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | 10,000 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 10,000 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 10,000 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 10,000 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 10,000 | |
Finite-Lived Intangible Assets, Amortization Expense, after Year Five | $ 81,242 |
ACCRUED EXPENSES AND OTHER LI_3
ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
ACCRUED EXPENSES AND OTHER LIABILITIES | ||
Payroll and payroll taxes payable | $ 1,132,881 | $ 276,841 |
Sales tax payable | 47,502 | 44,964 |
State income tax payable | 209,350 | 0 |
Property tax payable | 49,500 | 0 |
Interest payable | 152,043 | 101,776 |
Credit cards payable | 57,593 | 57,226 |
Linehaul accrued expenses | 936,185 | 0 |
Accrued service contracts | 306,500 | 0 |
Settlement accrual | 0 | 60,000 |
Other | 263,643 | 50,812 |
Total Accrued Expenses & Other Liabilities | $ 3,155,197 | $ 591,619 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | Jul. 26, 2019 | Dec. 07, 2018 |
Notes payable: | ||||
Notes Payable | $ 20,403,171 | $ 3,071,220 | ||
Less discounts | (898,527) | (242,655) | ||
Less current maturities | (4,966,638) | (1,692,775) | ||
Long term debt, net of current maturities | 14,538,006 | 1,135,790 | ||
5J Entities | ||||
Notes payable: | ||||
Notes Payable | 11,913,980 | 0 | ||
Secured Note February 2017 [Member] | ||||
Notes payable: | ||||
Notes Payable | 4,831 | 10,573 | ||
Secured Note January 2018 [Member] | ||||
Notes payable: | ||||
Notes Payable | 25,193 | 28,000 | ||
Secured Note Dec 2018 One [Member] | ||||
Notes payable: | ||||
Notes Payable | 100,000 | 100,000 | ||
Secured Note Dec 2018 Two [Member] | ||||
Notes payable: | ||||
Notes Payable | 100,000 | 100,000 | ||
Secured Note Dec 2018 Three [Member] | ||||
Notes payable: | ||||
Notes Payable | 100,000 | 100,000 | ||
Secured Note Dec 2018 Four [Member] | ||||
Notes payable: | ||||
Notes Payable | 792,469 | 792,470 | $ 800,000 | |
Secured Note May 2019 One [Member] | ||||
Notes payable: | ||||
Notes Payable | 100,000 | 100,000 | ||
Secured Note May 2019 Two [Member] | ||||
Notes payable: | ||||
Notes Payable | 80,000 | 80,000 | ||
Secured Note December, 2019 | ||||
Notes payable: | ||||
Notes Payable | 25,000 | 50,000 | ||
Secured Note Jan 2019 One [Member] | ||||
Notes payable: | ||||
Notes Payable | 572,235 | 638,859 | ||
Secured Note September 2019 [Member] | ||||
Notes payable: | ||||
Notes Payable | 0 | 200,000 | ||
Secured Note November, 2019 | ||||
Notes payable: | ||||
Notes Payable | 619,584 | 747,500 | ||
Secured Note January, 2020 | ||||
Notes payable: | ||||
Notes Payable | 1,237,425 | 0 | ||
Secured Note July 2019 [Member] | ||||
Notes payable: | ||||
Notes Payable | 123,818 | 123,818 | $ 247,637 | |
Secured Note February 2020 One [Member] | ||||
Notes payable: | ||||
Notes Payable | 2,000,000 | 0 | ||
Secured Note February 2020 Two [Member] | ||||
Notes payable: | ||||
Notes Payable | 487,148 | 0 | ||
Various Secured Notes Payable Maturing Through December 2022 [Member] | ||||
Notes payable: | ||||
Notes Payable | 758,861 | 0 | ||
Secured Note Febrauary 2020 Three [Member] | ||||
Notes payable: | ||||
Notes Payable | $ 1,362,627 | $ 0 |
NOTES PAYABLE - Future maturiti
NOTES PAYABLE - Future maturities of secured notes payable (Details) | Mar. 31, 2020USD ($) |
NOTES PAYABLE | |
2020 | $ 4,496,922 |
2021 | 4,591,371 |
2022 | 4,783,478 |
2023 | 3,702,468 |
2024 | 2,828,932 |
Total | $ 20,403,171 |
NOTES PAYABLE - Unsecured notes
NOTES PAYABLE - Unsecured notes payable (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Notes payable: | ||
Unsecured Debt | $ 405,707 | $ 314,064 |
Less discount | (1,593) | (3,185) |
Unsecured Debt Current And Noncurrent | 404,114 | 310,879 |
Less current portion | (404,114) | (310,879) |
Notes payable - unsecured, net of current portion | 0 | 0 |
Unsecured Note, October 2, 2019 [Member] | ||
Notes payable: | ||
Unsecured Debt | 48,050 | 75,576 |
Unsecured Note August 10 2018 [Member] | ||
Notes payable: | ||
Unsecured Debt | 44,559 | 44,559 |
Unsecured Advances from Momentum Water Transfer Service LLC [Member] | ||
Notes payable: | ||
Unsecured Debt | 35,000 | 35,000 |
Unsecured Note with Vendor October 2019 [Member] | ||
Notes payable: | ||
Unsecured Debt | 35,375 | 85,375 |
Unsecured Note, October 1, 2019 [Member] | ||
Notes payable: | ||
Unsecured Debt | 42,723 | $ 73,554 |
Unsecured Note March 6 2021 [Member] | ||
Notes payable: | ||
Unsecured Debt | $ 200,000 |
NOTES PAYABLE - Additional Info
NOTES PAYABLE - Additional Information (Details) | Mar. 25, 2020USD ($) | Feb. 27, 2020USD ($)$ / sharesshares | Jan. 23, 2020USD ($)installment | Dec. 12, 2019USD ($)$ / sharesshares | Oct. 04, 2019USD ($)shares | Oct. 02, 2019USD ($)$ / sharesshares | Oct. 01, 2019USD ($)$ / sharesshares | Jul. 26, 2019USD ($)shares | Jun. 27, 2019USD ($) | Jun. 19, 2019 | Jun. 18, 2019USD ($)$ / sharesshares | May 19, 2019USD ($) | Jan. 11, 2019USD ($)shares | Dec. 07, 2018USD ($)$ / sharesshares | Aug. 14, 2017USD ($) | Jan. 31, 2020 | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 28, 2019 | Jun. 30, 2019USD ($)$ / sharesshares | May 31, 2019USD ($)$ / sharesshares | Sep. 28, 2018USD ($)$ / shares | Mar. 31, 2020USD ($)shares | Mar. 31, 2019USD ($) | Feb. 27, 2022 | Mar. 06, 2021 | Feb. 27, 2021 | Apr. 30, 2020 | Feb. 28, 2020 | Oct. 31, 2019USD ($) | Sep. 20, 2019USD ($) | May 01, 2019USD ($) | Apr. 30, 2019USD ($)$ / shares | Aug. 10, 2018USD ($) | Jan. 02, 2018USD ($) | Feb. 02, 2017USD ($) |
Debt Instrument, Face Amount | $ 44,559 | $ 100,000 | ||||||||||||||||||||||||||||||||||
Notes Payable | $ 3,071,220 | $ 20,403,171 | ||||||||||||||||||||||||||||||||||
Accrued Interest | 4,559 | |||||||||||||||||||||||||||||||||||
Repayments of Notes Payable | 483,839 | $ 141,991 | ||||||||||||||||||||||||||||||||||
Line of Credit Facility, Interest Rate Description | The AR Facility has an interest rate of 2.25% in excess of the prime rate reported by the Wall Street Journal per annum, plus a financing fee equal to 0.20% of the receivable balance every 15 days, with a maximum cumulative rate of 1.6% | |||||||||||||||||||||||||||||||||||
Proceeds from Lines of Credit | 5,639,486 | 61,387 | ||||||||||||||||||||||||||||||||||
Amortization of Debt Discount (Premium) | $ 14,330 | |||||||||||||||||||||||||||||||||||
Unamortized Debt Discount | 242,655 | 898,527 | ||||||||||||||||||||||||||||||||||
Proceeds from Related Party Debt | 10,400 | 21,800 | ||||||||||||||||||||||||||||||||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 0.25 | $ 0.50 | ||||||||||||||||||||||||||||||||||
Warrants and Rights Outstanding, Term | 5 years | |||||||||||||||||||||||||||||||||||
Debt Instrument, Term | 10 years | 2 years | ||||||||||||||||||||||||||||||||||
Repayments of Related Party Debt | 35,777 | 42,531 | ||||||||||||||||||||||||||||||||||
Proceeds from Sale of Other Assets | $ 30,000 | |||||||||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 0.15 | $ 0.15 | $ 0.30 | $ 0.40 | $ 0.30 | |||||||||||||||||||||||||||||||
Convertible Notes Payable | 1,215,699 | |||||||||||||||||||||||||||||||||||
Fair Value Adjustment of Warrants | $ 67,223 | $ 203,337 | $ 44,091 | 59,439 | ||||||||||||||||||||||||||||||||
Expenses Paid By Related Party | 25,279 | 0 | ||||||||||||||||||||||||||||||||||
Number Of Warrant Issued | shares | 500,000 | 100,000 | ||||||||||||||||||||||||||||||||||
Warrant Exercise Price | $ / shares | $ 0.15 | $ 0.15 | $ 0.30 | $ 0.40 | $ 0.30 | |||||||||||||||||||||||||||||||
Warrants Issued | shares | 100,000 | 120,000 | 150,000 | |||||||||||||||||||||||||||||||||
Long-term Line of Credit | 845,036 | 6,274,222 | ||||||||||||||||||||||||||||||||||
Amortization of deferred financing costs | 126,050 | $ 73,579 | ||||||||||||||||||||||||||||||||||
Current portion of convertible note | 0 | 521,065 | ||||||||||||||||||||||||||||||||||
Convertible notes, net | 1,215,699 | |||||||||||||||||||||||||||||||||||
Convertible note payable, net | 260,926 | 694,634 | ||||||||||||||||||||||||||||||||||
Warrant [Member] | ||||||||||||||||||||||||||||||||||||
Warrants and Rights Outstanding, Term | 10 years | |||||||||||||||||||||||||||||||||||
Number Of Warrant Issued | shares | 40,000 | |||||||||||||||||||||||||||||||||||
Warrants and Rights Outstanding | $ 11,942 | $ 4,777 | ||||||||||||||||||||||||||||||||||
Catalyst Finance L.P. [Member] | ||||||||||||||||||||||||||||||||||||
Proceeds from Lines of Credit | $ 1,317,304 | |||||||||||||||||||||||||||||||||||
Deposited in bank | 59,846 | |||||||||||||||||||||||||||||||||||
Catalyst Finance L.P. [Member] | Trinity Services LLC [Member] | ||||||||||||||||||||||||||||||||||||
Repayments of Lines of Credit | 500,000 | |||||||||||||||||||||||||||||||||||
Catalyst Finance L.P. [Member] | MG Cleaners [Member] | ||||||||||||||||||||||||||||||||||||
Repayments of Notes Payable | 43,219 | |||||||||||||||||||||||||||||||||||
Catalyst Finance L.P. [Member] | Crestmark [Member] | ||||||||||||||||||||||||||||||||||||
Repayments of Debt | $ 714,239 | |||||||||||||||||||||||||||||||||||
Stephen Christian [Member] | ||||||||||||||||||||||||||||||||||||
Due to Related Parties | 98 | $ 0 | ||||||||||||||||||||||||||||||||||
Mr Christian [Member] | ||||||||||||||||||||||||||||||||||||
Proceeds from Related Party Debt | 10,400 | |||||||||||||||||||||||||||||||||||
Repayments of Related Party Debt | 35,777 | |||||||||||||||||||||||||||||||||||
Expenses Paid By Related Party | 25,279 | |||||||||||||||||||||||||||||||||||
Three Purchasers [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | $ 300,000 | |||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||||||||||||||||||||||||||||||||||
Investor [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | $ 80,000 | |||||||||||||||||||||||||||||||||||
Amortization of Debt Discount (Premium) | $ 53,780 | |||||||||||||||||||||||||||||||||||
Unamortized Debt Discount | $ 0 | |||||||||||||||||||||||||||||||||||
Warrants and Rights Outstanding, Term | 10 years | |||||||||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 0.30 | |||||||||||||||||||||||||||||||||||
Fair Value Adjustment of Warrants | $ 53,780 | |||||||||||||||||||||||||||||||||||
Number Of Warrant Issued | shares | 120,000 | |||||||||||||||||||||||||||||||||||
Warrant Exercise Price | $ / shares | $ 0.30 | |||||||||||||||||||||||||||||||||||
Accounts Receivable Financing Facility [Member] | Maximum | ||||||||||||||||||||||||||||||||||||
Percentage Of Accounts Receivable Advanced | 90.00% | |||||||||||||||||||||||||||||||||||
Restricted Stock [Member] | ||||||||||||||||||||||||||||||||||||
Notes Payable | $ 147,608 | |||||||||||||||||||||||||||||||||||
Common Stock Issued Shares Settlement Of Notes Payable | shares | 400,000 | |||||||||||||||||||||||||||||||||||
Stock Issued During Period, Value, Other | $ 203,525 | |||||||||||||||||||||||||||||||||||
Loss On Settlement Extinguishment Of Debt | $ 101,251 | |||||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Issued for Services | shares | 511,370 | |||||||||||||||||||||||||||||||||||
Secured Note August 2023 [Member] | Maximum | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | |||||||||||||||||||||||||||||||||||
Secured Note August 2023 [Member] | Minimum | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.72% | |||||||||||||||||||||||||||||||||||
Secured Note February 2017 [Member] | ||||||||||||||||||||||||||||||||||||
Notes Payable | 10,573 | $ 4,831 | ||||||||||||||||||||||||||||||||||
Secured Note January 2018 [Member] | ||||||||||||||||||||||||||||||||||||
Notes Payable | 28,000 | 25,193 | ||||||||||||||||||||||||||||||||||
Unsecured Note August 10 2018 [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | $ 40 | |||||||||||||||||||||||||||||||||||
Debt Instrument Additional Face Amount | $ 25,000 | |||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||||||||||||||||||||||||||||||||||
Percentage of Voting Interests Held By Shareholder | 7.50% | |||||||||||||||||||||||||||||||||||
Secured Note Dec 2018 One [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | $ 100,000 | |||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||||||||||||||||||||||||||||||||||
Deferred Financing Cost | $ 23,315 | |||||||||||||||||||||||||||||||||||
Notes Payable | 100,000 | 100,000 | ||||||||||||||||||||||||||||||||||
Percentage of Voting Interests Held By Shareholder | 8.80% | |||||||||||||||||||||||||||||||||||
Secured Note Dec 2018 Two [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | $ 100,000 | |||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||||||||||||||||||||||||||||||||||
Deferred Financing Cost | $ 23,315 | |||||||||||||||||||||||||||||||||||
Notes Payable | 100,000 | 100,000 | ||||||||||||||||||||||||||||||||||
Percentage of Voting Interests Held By Shareholder | 7.50% | |||||||||||||||||||||||||||||||||||
Secured Note Dec 2018 Three [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | $ 100,000 | |||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||||||||||||||||||||||||||||||||||
Notes Payable | 100,000 | 100,000 | ||||||||||||||||||||||||||||||||||
Secured Note Dec 2018 Four [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | |||||||||||||||||||||||||||||||||||
Notes Payable | $ 800,000 | 792,470 | 792,469 | |||||||||||||||||||||||||||||||||
Monthly periodic payment | $ 7,500 | |||||||||||||||||||||||||||||||||||
Secured Note Dec 2019 One [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||||||||||||||||||||||||||||||||||
Percentage of Voting Interests Held By Shareholder | 8.80% | |||||||||||||||||||||||||||||||||||
Secured Note Payable April 2020 [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 18.00% | |||||||||||||||||||||||||||||||||||
Secured Note January, 2020 | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | $ 1,272,780 | |||||||||||||||||||||||||||||||||||
Notes Payable | 0 | 1,237,425 | ||||||||||||||||||||||||||||||||||
Monthly periodic payment | $ 35,355 | 35,355 | ||||||||||||||||||||||||||||||||||
Debt Instrument, Periodic Payment, Interest | $ 210,018 | |||||||||||||||||||||||||||||||||||
Number of monthly installments | installment | 36 | |||||||||||||||||||||||||||||||||||
Secured Note Jan 2019 [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||||||||||||||||||||||||||||||||||
Notes Payable | $ 100,000 | |||||||||||||||||||||||||||||||||||
Accrued Interest | $ 2,274 | |||||||||||||||||||||||||||||||||||
Percentage of Voting Interests Held By Shareholder | 8.80% | |||||||||||||||||||||||||||||||||||
Secured Note May 2019 One [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | $ 100,000 | |||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||||||||||||||||||||||||||||||||||
Deferred Financing Cost | $ 7,125 | |||||||||||||||||||||||||||||||||||
Notes Payable | 100,000 | 100,000 | ||||||||||||||||||||||||||||||||||
Percentage of Voting Interests Held By Shareholder | 8.80% | |||||||||||||||||||||||||||||||||||
Secured Note May 2019 Two [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||||||||||||||||||||||||||||||||||
Notes Payable | 80,000 | 80,000 | ||||||||||||||||||||||||||||||||||
Percentage of Voting Interests Held By Shareholder | 8.80% | |||||||||||||||||||||||||||||||||||
Secured Note September 2019 [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | $ 200,000 | |||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||||||||||||||||||||||||||||||||||
Notes Payable | 200,000 | 0 | ||||||||||||||||||||||||||||||||||
Secured Note July 2019 [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 7.00% | |||||||||||||||||||||||||||||||||||
Notes Payable | $ 247,637 | 123,818 | 123,818 | |||||||||||||||||||||||||||||||||
Convertible Notes Payable | $ 123,818 | |||||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | shares | 353,766 | |||||||||||||||||||||||||||||||||||
Convertible notes, net | $ 123,818 | |||||||||||||||||||||||||||||||||||
Secured Note July 2019 [Member] | Jake Oilfield Solutions LLC [Member] | ||||||||||||||||||||||||||||||||||||
Notes Payable | $ 123,819 | |||||||||||||||||||||||||||||||||||
Secured Note December, 2019 | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | $ 50,000 | |||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||||||||||||||||||||||||||||||||||
Notes Payable | 50,000 | 25,000 | ||||||||||||||||||||||||||||||||||
Monthly periodic payment | $ 5,000 | |||||||||||||||||||||||||||||||||||
First payment amount due | $ 25,000 | |||||||||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 0.15 | |||||||||||||||||||||||||||||||||||
Number Of Warrant Issued | shares | 75,000 | |||||||||||||||||||||||||||||||||||
Warrant Exercise Price | $ / shares | $ 0.15 | |||||||||||||||||||||||||||||||||||
Warrants and Rights Outstanding | $ 17,947 | |||||||||||||||||||||||||||||||||||
Secured Note February 2020 One [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||||||||||||||||||||||||||||||||||
Notes Payable | 0 | 2,000,000 | ||||||||||||||||||||||||||||||||||
Percentage of Voting Interests Held By Shareholder | 100.00% | |||||||||||||||||||||||||||||||||||
Secured Note February 2020 Two [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||||||||||||||||||||||||||||||||||
Notes Payable | 0 | 487,148 | ||||||||||||||||||||||||||||||||||
Various Secured Notes Payable Maturing Through December 2022 [Member] | ||||||||||||||||||||||||||||||||||||
Notes Payable | 0 | $ 758,861 | ||||||||||||||||||||||||||||||||||
Various Secured Notes Payable Maturing Through December 2022 [Member] | Maximum | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.50% | |||||||||||||||||||||||||||||||||||
Various Secured Notes Payable Maturing Through December 2022 [Member] | Minimum | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.32% | |||||||||||||||||||||||||||||||||||
Secured Note Febrauary 2020 Three [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||||||||||||||||||||||||||||||||||
Notes Payable | 0 | $ 1,362,627 | ||||||||||||||||||||||||||||||||||
Unsecured Note with Vendor October 2019 [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | $ 135,375 | |||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||||||||||||||||||||||||||||||||||
Unsecured Note, October 2, 2019 [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.50% | |||||||||||||||||||||||||||||||||||
Unsecured Note, October 1, 2019 [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.50% | |||||||||||||||||||||||||||||||||||
Unsecured Note March 6 2021 [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.75% | |||||||||||||||||||||||||||||||||||
Amerisource Note | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | $ 1,600,000 | |||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | 12.00% | 11.00% | |||||||||||||||||||||||||||||||||
Deferred Financing Cost | $ 419,788 | |||||||||||||||||||||||||||||||||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 0.25 | |||||||||||||||||||||||||||||||||||
Amortization of deferred financing costs | $ 11,661 | |||||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | shares | 2,498,736 | 2,498,736 | ||||||||||||||||||||||||||||||||||
Amerisource AR Facility | ||||||||||||||||||||||||||||||||||||
Amortization of deferred financing costs | $ 1,752 | |||||||||||||||||||||||||||||||||||
Amerisource AR Facility | Minimum | ||||||||||||||||||||||||||||||||||||
Early termination fee, if more than 12months remaining in the debt term (as a percent) | 1.00% | |||||||||||||||||||||||||||||||||||
Notes Payable to Banks [Member] | Secured Note January 2018 [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | $ 41,481 | $ 53,610 | ||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.29% | 6.00% | ||||||||||||||||||||||||||||||||||
Notes Payable, Other Payables [Member] | Secured Note August 2017 [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | $ 66,348 | |||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 7.25% | |||||||||||||||||||||||||||||||||||
Repayments of Notes Payable | $ 12,086 | |||||||||||||||||||||||||||||||||||
Monthly periodic payment | $ 1,400 | |||||||||||||||||||||||||||||||||||
Notes Payable, Other Payables [Member] | Secured Note February 2017 [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | |||||||||||||||||||||||||||||||||||
5J Entities | ||||||||||||||||||||||||||||||||||||
Notes Payable | $ 0 | 11,913,980 | ||||||||||||||||||||||||||||||||||
Reduced monthly payments for six months | $ 150,000 | |||||||||||||||||||||||||||||||||||
Monthly payment for next 45 months | 36,663.34 | |||||||||||||||||||||||||||||||||||
Cash payment due at the end of the lease term | $ 831,880 | $ 831,880 | ||||||||||||||||||||||||||||||||||
Equipment Refinance Amount | $ 11,950,000 | |||||||||||||||||||||||||||||||||||
Equipment Refinance, Basis, Percentage | 75.00% | |||||||||||||||||||||||||||||||||||
Equipment Refinance, Monthly Fee Payable, Period | 51 months | |||||||||||||||||||||||||||||||||||
5J Entities | Amerisource AR Facility | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | $ 10,000,000 | |||||||||||||||||||||||||||||||||||
Deferred Financing Cost | 21,023 | |||||||||||||||||||||||||||||||||||
Maximum borrowing capacity | $ 10,000,000 | |||||||||||||||||||||||||||||||||||
Maximum availability (as a percent) | 85.00% | |||||||||||||||||||||||||||||||||||
Basis spread on variable rate (as a percent) | 4.50% | |||||||||||||||||||||||||||||||||||
Initial collateral management fee (as a percent) | 0.75% | |||||||||||||||||||||||||||||||||||
Description of variable rate basis | prime rate | |||||||||||||||||||||||||||||||||||
Non-usage fee (as a percent) | 0.35% | |||||||||||||||||||||||||||||||||||
One time commitment fee | $ 100,000 | |||||||||||||||||||||||||||||||||||
Number of days written notice for termination of debt | 60 days | |||||||||||||||||||||||||||||||||||
5J Entities | Amerisource AR Facility | Maximum | ||||||||||||||||||||||||||||||||||||
Early termination fee, if more than 12months remaining in the debt term (as a percent) | 2.00% | |||||||||||||||||||||||||||||||||||
5J Entities | Amerisource Equipment Loan | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | $ 1,401,559 | |||||||||||||||||||||||||||||||||||
5J Entities | Amerisource Bridge Facility | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | $ 550,690 | |||||||||||||||||||||||||||||||||||
Convertible Notes Payable [Member] | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | $ 250,000 | $ 50,000 | ||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.50% | 8.50% | ||||||||||||||||||||||||||||||||||
Unamortized Debt Discount | $ 12,900 | |||||||||||||||||||||||||||||||||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 0.50 | |||||||||||||||||||||||||||||||||||
Debt Instrument, Convertible, Beneficial Conversion Feature | $ 100,000 |
STOCKHOLDERS' DEFICIT - Preferr
STOCKHOLDERS' DEFICIT - Preferred stock (Details) - USD ($) | Feb. 27, 2020 | Feb. 20, 2020 | Jun. 04, 2019 | Jan. 11, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 |
Preferred Stock, Shares Authorized | 1,000,000 | 1,000,000 | |||||
Preferred stock dividend | $ 42,123 | ||||||
Accrued preferred stock dividend | $ 42,123 | ||||||
Amerisource Note | |||||||
Common stock issued on conversion of amerisource notes | 2,498,736 | 2,498,736 | |||||
Restricted Stock [Member] | |||||||
Stock Issued During Period, Value, Other | $ 203,525 | ||||||
Loss On Settlement Extinguishment Of Debt | $ 101,251 | ||||||
Stock Issued During Period, Shares, Issued for Services | 511,370 | ||||||
Series A Preferred Stock [Member] | |||||||
Preferred Stock, Dividend Rate, Percentage | 3.00% | 3.00% | |||||
Preferred Stock, Shares Authorized | 2,000 | 2,000 | |||||
Preferred stock dividend | $ 45,740 | ||||||
Preferred Stock, Stated Value per share | $ 1,000 | ||||||
Preferred Stock, Convertible, Conversion Price | $ 0.50 | ||||||
Preferred Stock, Convertible, Stock Price Trigger | $ 0.60 | ||||||
Preferred Stock, Convertible Threshold Trading Days | 20 days | ||||||
Common stock issued on conversion of amerisource notes | 0 | ||||||
Accrued preferred stock dividend | $ 45,740 | ||||||
Series B Preferred Stock [Member] | |||||||
Preferred Stock, Dividend Rate, Percentage | 5.00% | 5.00% | |||||
Preferred Stock, Shares Authorized | 6,000 | 6,000 | 6,000 | ||||
Preferred stock dividend | $ 27,123 | ||||||
Preferred Stock, Stated Value per share | $ 1,000 | ||||||
Preferred Stock, Convertible, Conversion Price | $ 1.25 | ||||||
Common stock issued on conversion of amerisource notes | 0 | ||||||
Accrued preferred stock dividend | $ 27,123 |
STOCK OPTIONS AND WARRANTS (Det
STOCK OPTIONS AND WARRANTS (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Granted - Exercise Price Range | $ 0.30 | |
Exercised- Exercise Price Range | $ 0 | |
Maximum | ||
Exercise Price Range - Cancelled, Forfeited or Expired | $ 2.18 | |
Outstanding - Exercisable Exercise Price Range | $ 2 | |
Minimum | ||
Exercise Price Range - Cancelled, Forfeited or Expired | $ 0.37 | |
Outstanding - Exercisable Exercise Price Range | $ 0.24 | |
Employee Stock Option [Member] | ||
Outstanding - Aggregate Number - Beginning Balance | 845,000 | |
Granted - Aggregate Number | 2,025,000 | |
Exercised - Aggregate Number | 0 | |
Cancelled, Forfeited or Expired - Aggregate Number | (10,000) | |
Outstanding - Aggregate Number - Ending Balance | 2,860,000 | 845,000 |
Outstanding - Exercisable | 843,334 | |
Outstanding - Aggregate Exercise Price - Beginning Balance | $ 383,750 | |
Granted - Aggregate Exercise Price | 607,500 | |
Exercised - Aggregate Exercise Price | 0 | |
Cancelled, forfeited or expired - Aggregate Exercise Price | (19,450) | |
Outstanding - Aggregate Exercise Price - Ending Balance | 971,800 | $ 383,750 |
Outstanding - Exercisable Aggregate Exercise Price | $ 344,384 | |
Outstanding - Weighted Average Exercise Price - Beginning Balance | $ 0.45 | |
Granted - Weighted Average Exercise Price | 0.30 | |
Exercised - Weighted Average Exercise Price | 0 | |
Cancelled, Forfeited or Expired - Weighted Average Exercise Price | 1.95 | |
Outstanding - Weighted Average Exercise Price - Ending Balance | 0.34 | $ 0.45 |
Outstanding - Exercisable Weighted Average Exercise Price | 0.41 | |
Employee Stock Option [Member] | Maximum | ||
Outstanding - Exercise Price Range - Maximum | 2 | 2 |
Employee Stock Option [Member] | Minimum | ||
Outstanding - Exercise Price Range - Minimum | $ 0.24 | $ 0.24 |
STOCK OPTIONS AND WARRANTS - St
STOCK OPTIONS AND WARRANTS - Stock warrant information (Details) | 3 Months Ended |
Mar. 31, 2020USD ($)$ / sharesshares | |
Outstanding - Aggregate Number - Beginning Balance | shares | 1,430,001 |
Granted - Aggregate Number | shares | 333,334 |
Exercised - Aggregate Number | shares | 0 |
Cancelled, Forfeited or Expired - Aggregate Number | shares | 0 |
Outstanding - Aggregate Number - Ending Balance | shares | 1,763,335 |
Outstanding - Exercisable | shares | 1,763,335 |
Outstanding - Aggregate Exercise Price - Beginning Balance | $ | $ 430,000 |
Granted - Aggregate Exercise Price | $ | 66,667 |
Exercised - Aggregate Exercise Price | $ | 0 |
Cancelled, forfeited or expired - Aggregate Exercise Price | $ | 0 |
Outstanding - Aggregate Exercise Price - Ending Balance | $ | 496,667 |
Outstanding - Exercisable Aggregate Exercise Price | $ | $ 496,667 |
Granted - Exercise Price Range | $ 0.20 |
Exercised - Exercise Price Range | 0 |
Exercise Price Range - Cancelled, Forfeited or Expired | 0 |
Outstanding - Weighted Average Exercise Price - Beginning Balance | 0.30 |
Granted - Weighted Average Exercise Price | 0.20 |
Exercised - Weighted Average Exercise Price | 0 |
Cancelled, Forfeited or Expired - Weighted Average Exercise Price | 0 |
Outstanding - Weighted Average Exercise Price - Ending Balance | 0.28 |
Outstanding - Exercisable Weighted Average Exercise Price | 0.28 |
Maximum | |
Outstanding - Excerise Price Range - Beginning Balance | 0.75 |
Outstanding - Exercise Price Range - Ending Balance | 0.75 |
Outstanding - Exercisable Exercise Price Range | 0.75 |
Minimum | |
Outstanding - Excerise Price Range - Beginning Balance | 0.15 |
Outstanding - Exercise Price Range - Ending Balance | 0.15 |
Outstanding - Exercisable Exercise Price Range | $ 0.15 |
STOCK OPTIONS AND WARRANTS - Ad
STOCK OPTIONS AND WARRANTS - Additional Information (Details) - USD ($) | Feb. 28, 2020 | Jun. 18, 2019 | Dec. 07, 2018 | May 31, 2019 | Mar. 31, 2020 |
Exercise price | $ 0.20 | ||||
Intrinsic value of outstanding Stock option | $ 0 | ||||
Weighted average remaining contractual life | 2 years 11 months 16 days | ||||
Share Price | $ 0.18 | ||||
Expected option term (years) | 10 years | ||||
Volatility percentage | 183.29% | ||||
Discount rate | 0.74% | ||||
Fair value recorded as notes payable discount | $ 67,223 | $ 203,337 | $ 44,091 | $ 59,439 | |
Stock Option [Member] | |||||
Weighted average remaining contractual life | 6 years 10 months 6 days | ||||
Intrinsic value of outstanding stock warrants | $ 0 | ||||
5J and SMG Employees [Member] | |||||
Stock options issued (in shares) | 2,025,000 | ||||
Stock options, vesting period | 3 years | ||||
Exercise price | $ 0.30 | ||||
Stock option contractual term (in years) | 5 years |
ACQUISITION (Details)
ACQUISITION (Details) - USD ($) | Feb. 27, 2020 | Jun. 03, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
Business Acquisition [Line Items] | ||||
Cash, net | $ 6,320,168 | $ 0 | ||
5J Entities | ||||
Business Acquisition [Line Items] | ||||
Cash, net | 6,320,168 | |||
Preferred stock issued | 4,378,000 | |||
Seller note issued | 2,000,000 | |||
Total purchase consideration | $ 27,300,000 | 12,698,168 | ||
Accounts receivable | 8,177,713 | |||
Prepaid expenses | 655,864 | |||
Notes receivable | 814,347 | |||
Other current asset | 338,222 | |||
Right of use assets - operating | 1,510,897 | |||
Property and equipment | 19,352,189 | |||
Accounts payable and accrued expenses | (4,945,881) | |||
Line of credit | (5,840,622) | |||
Right of use liabilities - operating | (1,510,897) | |||
Notes payable | (5,853,664) | |||
Total purchase consideration | 12,698,168 | |||
Trinity Services LLC [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash, net | $ 500,000 | 500,000 | ||
Preferred stock issued | 1,939,000 | |||
Total purchase consideration | 2,439,000 | |||
Accounts receivable | 1,195,534 | |||
Cost in excess of billings | 31,303 | |||
Right of use assets - operating | 87,900 | |||
Property and equipment | 2,887,441 | |||
Accounts payable and accrued expenses | (834,363) | |||
Right of use liabilities - operating | (87,900) | |||
Notes payable | (840,915) | |||
Total purchase consideration | $ 2,439,000 |
ACQUISITION - Unaudited pro for
ACQUISITION - Unaudited pro forma financial information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
ACQUISITION | ||
Revenue | $ 13,536,910 | $ 20,247,516 |
Operating loss | (1,936,519) | (1,193,521) |
Net loss attributable to common shareholders | $ (2,922,864) | $ (1,799,426) |
Net loss per common share | $ (0.19) | $ (0.14) |
ACQUISITION - Additional Inform
ACQUISITION - Additional Information (Details) | Feb. 27, 2020USD ($)$ / sharesshares | Jun. 03, 2019USD ($)$ / sharesshares | Mar. 31, 2020USD ($)$ / shares | Mar. 31, 2019USD ($) | Oct. 01, 2019USD ($) | May 31, 2019USD ($) | Apr. 30, 2019$ / shares |
Share Price | $ / shares | $ 0.18 | ||||||
Exercise price | $ / shares | $ 0.20 | ||||||
Expected option term (years) | 10 years | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 183.29% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Discount for Postvesting Restrictions | 0.74% | ||||||
Cash | $ 6,320,168 | $ 0 | |||||
Debt Instrument, Face Amount | $ 44,559 | $ 100,000 | |||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 0.25 | $ 0.50 | |||||
Revenues | 5,976,400 | 1,752,704 | |||||
Net Income (Loss) Attributable to Parent | (2,979,231) | (710,262) | |||||
Common Stock [Member] | |||||||
Net Income (Loss) Attributable to Parent | 0 | $ 0 | |||||
5J Entities | |||||||
Total purchase price | $ 27,300,000 | 12,698,168 | |||||
Cash | 6,320,168 | ||||||
Revenues | 4,360,381 | ||||||
Net Income (Loss) Attributable to Parent | 804,814 | ||||||
5J Entities | Series B Convertible Preferred Stock | Risk free rate | |||||||
Preferred stock, fair value measurement | 1.07 | ||||||
5J Entities | Series B Convertible Preferred Stock | Volatility | |||||||
Preferred stock, fair value measurement | 51 | ||||||
5J Entities | Series B Convertible Preferred Stock | Maturity | |||||||
Preferred stock, fair value measurement | 3 | ||||||
5J Oilfield Services LLC | |||||||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | ||||||
Cash | $ 6,840,000 | ||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares | 6,000 | ||||||
Debt Instrument, Face Amount | $ 2,000,000 | ||||||
Conversion period | 3 years | ||||||
5J Oilfield Services LLC | Common Stock [Member] | |||||||
Conversion price in common stock | $ / shares | $ 0.001 | ||||||
5J Oilfield Services LLC | Truck notes owed by 5J and its affiliates | |||||||
Business Combination, Consideration Transferred, Liabilities Incurred | $ 1,034,000 | ||||||
5J Oilfield Services LLC | Line of credit | |||||||
Business Combination, Consideration Transferred, Liabilities Incurred | $ 5,860,000 | ||||||
5J Oilfield Services LLC | Convertible Preferred Stock [Member] | |||||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 1.25 | ||||||
5J Oilfield Services LLC | Series B Convertible Preferred Stock | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | ||||||
Business Acquisition, Share Price | $ / shares | $ 1,000 | ||||||
Dividend rate (as a percent) | 5.00% | ||||||
Trinity Services LLC [Member] | |||||||
Total purchase price | 2,439,000 | ||||||
Cash | $ 500,000 | 500,000 | |||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares | 2,000 | ||||||
Debt Instrument, Face Amount | $ 850,000 | ||||||
Preferred stock, stated value | $ 2,000,000 | ||||||
Revenues | 845,896 | ||||||
Net Income (Loss) Attributable to Parent | $ 199,412 | ||||||
Trinity Services LLC [Member] | Common Stock [Member] | |||||||
Sale of Stock, Price Per Share | $ / shares | $ 0.60 | ||||||
Trinity Services LLC [Member] | Convertible Preferred Stock [Member] | |||||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 0.50 | ||||||
Trinity Services LLC [Member] | Series A Secured Convertible Preferred Stock [Member] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.00% | ||||||
Business Acquisition, Share Price | $ / shares | $ 1,000 | ||||||
Trinity Services LLC [Member] | Series A Secured Convertible Preferred Stock [Member] | Stock price | |||||||
Preferred stock, fair value measurement | $ / shares | 0.50 | ||||||
Trinity Services LLC [Member] | Series A Secured Convertible Preferred Stock [Member] | Exercise price | |||||||
Preferred stock, fair value measurement | $ / shares | 0.42 | ||||||
Trinity Services LLC [Member] | Series A Secured Convertible Preferred Stock [Member] | Volatility | |||||||
Preferred stock, fair value measurement | 36 | ||||||
Trinity Services LLC [Member] | Series A Secured Convertible Preferred Stock [Member] | Maturity | |||||||
Preferred stock, fair value measurement | 3 | ||||||
Trinity Services LLC [Member] | Series A Secured Convertible Preferred Stock [Member] | Discount rate | |||||||
Preferred stock, fair value measurement | 1.7 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) - USD ($) | 1 Months Ended | |
May 31, 2019 | Oct. 31, 2017 | |
Severance pay per month | $ 14,167 | |
Stephen Christian [Member] | ||
Officers Compensation Description | monthly salary of $8,333 for the first six months of the effective date and $10,000 a month thereafter | |
Chief Financial Officer [Member] | ||
Officers Compensation | $ 15,000 | |
Officers Vehicle Allowances | $ 750 |
LEASES (Details)
LEASES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
LEASES | ||
Operating lease cost | $ 66,204 | $ 50,454 |
Finance lease cost | ||
Amortization of right-of-use assets | 10,528 | 8,424 |
Interest on lease liabilities | 2,177 | 4,525 |
Total finance lease cost | 12,705 | 12,949 |
Short-term lease cost | 122,084 | 18,206 |
Variable lease cost | 0 | 0 |
Sublease income | 0 | 0 |
Total lease cost | $ 200,993 | $ 81,609 |
LEASES - Supplemental cash flow
LEASES - Supplemental cash flow information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 48,374 | |
Operating cash flows from finance leases | 2,177 | |
Financing cash flows from finance leases | $ 13,710 | $ 13,817 |
LEASES - Lease-related assets a
LEASES - Lease-related assets and liabilities (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Lease Position | ||
Operating lease right-of-use assets | $ 1,721,453 | $ 266,158 |
Right of use liability operating lease short term | 439,794 | 113,479 |
Right of use liability operating lease long term | 1,307,314 | 164,679 |
Total operating lease liabilities | 1,747,108 | |
Finance Leases | ||
Equipment | 190,241 | |
Accumulated depreciation | (66,057) | |
Net Property | 124,184 | |
Long-term debt due within one year | 36,858 | $ 47,382 |
Long-Term Debt | 21,129 | |
Total finance lease liabilities | $ 57,987 |
LEASES - Other information (Det
LEASES - Other information (Details) | Mar. 31, 2020 |
Weighted-average remaining lease term (years) | |
Operating leases | 4 years 2 months 12 days |
Finance leases | 1 year 6 months |
Weighted-average discount rate | |
Operating leases | 13.00% |
Finance leases | 7.10% |
LEASES - Maturities of lease li
LEASES - Maturities of lease liabilities (Details) | Mar. 31, 2020USD ($) |
LEASES | |
2020 | $ 436,092 |
2021 | 529,862 |
2022 | 470,674 |
2023 | 417,501 |
2024 | 202,000 |
2025 and thereafter | 10,750 |
Total future undiscounted lease payments | 2,066,879 |
Less: Interest | (319,771) |
Total operating lease liabilities | 1,747,108 |
2020 | 37,589 |
2021 | 15,769 |
2022 | 10,404 |
2023 | 1,287 |
2024 | 0 |
2025 and thereafter | 0 |
Total future undiscounted lease payments | 65,049 |
Less: Interest | (7,062) |
Total finance lease liabilities | $ 57,987 |
LEASES - Additional Information
LEASES - Additional Information (Details) | 3 Months Ended | |
Mar. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | |
Number of Additional Leases | item | 0 | |
Operating Lease, Right-of-Use Asset | $ 1,721,453 | $ 266,158 |
Operating Lease, Liability | $ 1,747,108 | |
Equipment, Office and warehouse space, 5J Acquisition | ||
Number of operating leases | item | 6 | |
Operating Lease, Right-of-Use Asset | $ 1,510,897 | |
Operating Lease, Liability | $ 1,510,897 | |
Minimum | ||
Remaining Lease Term | 1 year | |
Minimum | Equipment, Office and warehouse space, 5J Acquisition | ||
Lessee, Operating Lease, Term of Contract | 36 months | |
Maximum | ||
Remaining Lease Term | 4 years | |
Maximum | Equipment, Office and warehouse space, 5J Acquisition | ||
Lessee, Operating Lease, Term of Contract | 60 months |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) | 3 Months Ended |
Mar. 31, 2020USD ($)item | |
Five J Properties LLC [Member] | |
Current monthly rent payments for all leases with related party | $ 14,250 |
Number of leases with related party | item | 3 |
Terms of leases | 5 years |
Lessee, Operating Lease, Existence of Option to Extend [true false] | true |
James Frye [Member] | |
Amount of Series B Convertible Preferred Stock held | $ 6,000,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | Jun. 17, 2020 | May 27, 2020 | Jun. 18, 2019 | Apr. 30, 2020 | Sep. 28, 2019 | May 31, 2020 | Oct. 02, 2019 | Oct. 01, 2019 | May 31, 2019 | Dec. 07, 2018 |
Subsequent Event [Line Items] | ||||||||||
Debt Instrument, Face Amount | $ 44,559 | $ 100,000 | ||||||||
Number of common stock purchase warrants issued (in shares) | 100,000 | 500,000 | ||||||||
Exercise price of warrants | $ 0.30 | $ 0.15 | $ 0.15 | $ 0.30 | $ 0.40 | |||||
Term of instrument | 10 years | 2 years | ||||||||
Warrant [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Number of common stock purchase warrants issued (in shares) | 40,000 | |||||||||
Subsequent Event [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Proceeds from sale of assets | $ 190,000 | |||||||||
Interest Costs Capitalized | $ 3,148,100 | |||||||||
Assets held for sale of cash proceeds | $ 21,200 | |||||||||
Subsequent Event [Member] | Warrant [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Number of common stock purchase warrants issued (in shares) | 72,500 | |||||||||
Exercise price of warrants | $ 195,000 | |||||||||
Subsequent Event [Member] | Paycheck Protection Program [Member] | Trinity Services LLC [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Common stock options | 731 | |||||||||
Annual interest rate | 3.75% | |||||||||
Term of instrument | 30 years | |||||||||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 150,000 | |||||||||
Subsequent Event [Member] | Paycheck Protection Program [Member] | MG Cleaners LLC [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Debt Instrument, Face Amount | $ 150,000 | |||||||||
Debt Instrument, Periodic Payment | $ 731 | |||||||||
Annual interest rate | 3.75% | |||||||||
Monthly periodic payment | $ 731 | |||||||||
Term of instrument | 30 years | 30 years | ||||||||
Subsequent Event [Member] | Paycheck Protection Program [Member] | Momentum Water Transfer Services LLC [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Debt Instrument, Face Amount | $ 90,000 | |||||||||
Debt Instrument, Periodic Payment | $ 439 | |||||||||
Annual interest rate | 3.75% | |||||||||
Monthly periodic payment | $ 439 |