SMG Reports Record Revenues of
The increase in revenue year-over-year in 2022 compared to 2021 resulted from increased volumes and improved pricing in the Company’s Industrial Division, which experienced increased demand for super heavy haul projects, infrastructure and additional production hauling work. The Company also saw its brokerage business (known as 5J Logistics Services) launch in 2022 and contribute solid operating revenues as it expanded its footprint and customer base, which was not present during the 2021 comparable period. Overall, positive Adjusted EBITDA performance was attributed to higher sales volumes, improved fixed asset utilization, better pricing mix from the increased activity of the Company’s Industrial Division and lower SG&A as a percentage of sales compared to the prior year period.
Mr.
Please see the Company’s full financial results along with management’s discussion and analysis and risk factors within its Annual Report on Form 10-K for 2022 filed
Forward-Looking Statements
This press release contains certain "forward-looking statements" with respect to our financial condition, business strategies, growth opportunities, acquisitions, listing plans and objectives of management, and other matters. Statements in this press release that are not historical facts are "forward-looking statements" for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, and involve a number of risks and uncertainties.
Forward-looking statements, including, without limitation, those relating to our future business prospects, listing plans, financial condition and acquisitions, whenever they occur in this press release are necessarily estimates reflecting the best judgment of the Company's senior management at the time such statements were made. There are a number of factors, many of which are beyond the Company's control, which could cause actual results and events to differ materially from those described in the forward-looking statements. These factors include, among others, the risks and uncertainties discussed more fully under the caption "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended
About
Source:
Contact:
stan@marketstreetcp.com
713-338-9415
2022 10K Adjusted EBITDA | ||||
Non-GAAP Reconciliation | ||||
Net Income (Loss) | $ | (11,610,240 | ) | |
Depreciation | $ | 5,328,366 | ||
Interest expense/non-cash debt discount amort | $ | 9,431,681 | ||
Taxes (Franchise adjustment) | $ | (130,040 | ) | |
Non-Cash Stock Compensation | $ | 61,043 | ||
Non-cash Shares expense Issued for Debt Extension | $ | 643,467 | ||
One-Time Consulting Invoices | $ | 200,161 | ||
Non-Op Target Transaction Expenses | $ | 36,641 | ||
CTO Costs | $ | 249,997 | ||
Duplicative CFO Costs | $ | 109,521 | ||
Discontinued Operations - Legal | $ | 22,074 | ||
ERTC Receivable (payroll tax expense offset) | $ | 465,230 | ||
Adjusted EBITDA | $ | 4,807,901 | ||
In addition to reporting financial results in accordance with
CONSOLIDATED BALANCE SHEETS | ||||||||||
(Audited) | ||||||||||
2022 | 2021 | |||||||||
ASSETS | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 127,225 | $ | 257,768 | ||||||
Restricted cash | 1,105,818 | 858,408 | ||||||||
Accounts receivable, net of allowance for doubtful accounts of | ||||||||||
as of | 12,185,792 | 11,703,347 | ||||||||
Prepaid expenses and other current assets | 2,308,067 | 2,162,238 | ||||||||
Current assets of discontinued operations | - | 17,446 | ||||||||
Total current assets | 15,726,902 | 14,999,207 | ||||||||
Property and equipment, net of accumulated depreciation of | ||||||||||
as of | 5,414,830 | 10,463,352 | ||||||||
Right of use assets - operating lease | 734,504 | 3,312,710 | ||||||||
Other assets | 305,451 | 448,887 | ||||||||
Other assets of discontinued operations, net | - | 1,500 | ||||||||
Total assets | $ | 22,181,687 | $ | 29,225,656 | ||||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 3,014,598 | $ | 3,958,515 | ||||||
Accounts payable - related party | 565,603 | 94,602 | ||||||||
Accrued expenses and other liabilities | 2,850,547 | 4,055,113 | ||||||||
Right of use liabilities - operating leases short term | 650,945 | 816,671 | ||||||||
Deferred revenue | 128,000 | - | ||||||||
Secured line of credit | 10,623,887 | 9,468,759 | ||||||||
Current portion of unsecured notes payable | 2,465,445 | 1,168,420 | ||||||||
Current portion of secured notes payable, net | 6,990,486 | 3,527,960 | ||||||||
Current portion of convertible note, net | 7,327,288 | 1,616,672 | ||||||||
Current liabilities of discontinued operations | 200,994 | 588,283 | ||||||||
Total current liabilities | 34,817,793 | 25,294,995 | ||||||||
Long term liabilities: | ||||||||||
Convertible note payable, net | - | 2,620,145 | ||||||||
Notes payable - secured, net of current portion | 13,307,309 | 14,535,751 | ||||||||
Right of use liabilities - operating leases, net of current portion | 278,137 | 2,545,950 | ||||||||
Long term liabilities of discontinued operations | 300,586 | 381,746 | ||||||||
Total liabilities | 48,703,825 | 45,378,587 | ||||||||
Commitments and contingencies | ||||||||||
Stockholders' deficit | ||||||||||
Preferred stock 1,000,000 shares authorized: | ||||||||||
Series A preferred stock - | - | - | ||||||||
and outstanding at | ||||||||||
Series B convertible preferred stock - | ||||||||||
and outstanding at | - | - | ||||||||
Common stock - | ||||||||||
issued and outstanding at | 39,181 | 33,732 | ||||||||
Additional paid in capital | 18,081,457 | 16,845,873 | ||||||||
Accumulated deficit | (44,642,776 | ) | (33,032,536 | ) | ||||||
Total stockholders' deficit | (26,522,138 | ) | (16,152,931 | ) | ||||||
Total liabilities and stockholders' deficit | $ | 22,181,687 | $ | 29,225,656 | ||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
For the years ended | |||||||||||
(Audited) | |||||||||||
REVENUES | $ | 71,021,862 | $ | 52,113,827 | |||||||
COST OF REVENUES | 65,285,261 | 52,714,418 | |||||||||
GROSS PROFIT (LOSS) | 5,736,601 | (600,591 | ) | ||||||||
OPERATING EXPENSES: | |||||||||||
Selling, general and administrative | 9,079,344 | 8,377,682 | |||||||||
Gain on disposal of assets | (330,499 | ) | (43,624 | ) | |||||||
Total operating expenses | 8,748,845 | 8,334,058 | |||||||||
LOSS FROM OPERATIONS | (3,012,244 | ) | (8,934,649 | ) | |||||||
OTHER INCOME (EXPENSE) | |||||||||||
Interest expense, net | (9,431,681 | ) | (7,618,889 | ) | |||||||
Gain on PPP Loan Forgiveness | - | 5,023,089 | |||||||||
Gain on extinguishment of debt | 564,814 | - | |||||||||
Other income | 228,689 | 46,620 | |||||||||
Other expense | (100,365 | ) | - | ||||||||
Loss on settlement of note payable | - | (807 | ) | ||||||||
Total other income (expense) | (8,738,543 | ) | (2,549,987 | ) | |||||||
NET LOSS FROM CONTINUING OPERATIONS | (11,750,787 | ) | (11,484,636 | ) | |||||||
Income from discontinued operations | 140,547 | 342,656 | |||||||||
NET LOSS | (11,610,240 | ) | (11,141,980 | ) | |||||||
Preferred stock dividends | - | (75,000 | ) | ||||||||
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | (11,610,240 | ) | $ | (11,216,980 | ) | |||||
Net loss per common share | |||||||||||
Continuing operations | $ | (0.32 | ) | $ | (0.50 | ) | |||||
Discontinued operations | $ | (0.00 | ) | $ | 0.01 | ||||||
Net loss attributable to common shareholders | $ | (0.32 | ) | $ | (0.49 | ) | |||||
Weighted average common shares outstanding | |||||||||||
Basic | 36,399,788 | 23,316,751 | |||||||||
Diluted | 36,399,788 | 23,316,751 | |||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
For the years ended | |||||||||||
(Audited) | |||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net loss from continuing operations | $ | (11,750,787 | ) | $ | (11,484,636 | ) | |||||
Adjustments to reconcile net loss to net | |||||||||||
cash used in operating activities: | |||||||||||
Share based compensation | 61,043 | 67,460 | |||||||||
Depreciation and amortization | 5,328,366 | 5,398,529 | |||||||||
Amortization of deferred financing costs | 3,790,028 | 2,208,291 | |||||||||
Amortization of right of use assets - operating leases | 457,325 | 436,787 | |||||||||
Shares issued for debt extension | 643,467 | - | |||||||||
Bad debt expense | 208,996 | 454,990 | |||||||||
Gain on PPP Loan Forgiveness | - | (5,022,102 | ) | ||||||||
Gain on extinguishment of debt | (564,814 | ) | - | ||||||||
Gain on disposal of assets | (330,499 | ) | (43,624 | ) | |||||||
Loss on settlement of liabilities | - | 41,397 | |||||||||
Changes in: | |||||||||||
Accounts receivable | (691,441 | ) | (7,237,370 | ) | |||||||
Prepaid expenses and other current assets | 3,767,578 | 3,118,119 | |||||||||
Other assets | (165,520 | ) | (241,940 | ) | |||||||
Accounts payable | (1,005,206 | ) | 2,677,329 | ||||||||
Accounts payable - related party | 471,001 | (75,842 | ) | ||||||||
Accrued expenses and other liabilities | (980,656 | ) | 1,525,563 | ||||||||
Right of use operating lease liabilities | (172,736 | ) | (537,616 | ) | |||||||
Deferred revenue | 128,000 | (30,000 | ) | ||||||||
Net cash used in operating activities from continuing operations | (805,855 | ) | (8,744,665 | ) | |||||||
Net cash provided by operating activities from discontinued operations | 80,450 | 568,519 | |||||||||
Net cash used in operating activities | (725,405 | ) | (8,176,146 | ) | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Cash paid for disposal of | - | (35,000 | ) | ||||||||
Cash procceds from disposal of purchase of property and equipment | 895,564 | - | |||||||||
Cash paid for purchase of property and equipment | (301,412 | ) | (97,026 | ) | |||||||
Net cash provided by (used in) investing activities from continuing operations | 594,152 | (132,026 | ) | ||||||||
Net cash used in investing activities from discontinued operations | - | - | |||||||||
Net cash provided by (used in) investing activities | 594,152 | (132,026 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Payment of deferred financing costs | - | (20,623 | ) | ||||||||
Proceeds on secured line of credit, net | 1,126,700 | 5,326,060 | |||||||||
Payments on secured line of credit, net | - | - | |||||||||
Proceeds from notes payable | 5,229,098 | 15,064,003 | |||||||||
Payments on notes payable | (6,027,228 | ) | (15,553,327 | ) | |||||||
Payments on convertible notes payable | - | (50,000 | ) | ||||||||
Proceeds from convertible notes payable | - | 3,906,079 | |||||||||
Net cash provided by financing activities from continuing operations | 328,570 | 8,672,192 | |||||||||
Net cash provided by (used in) financing activities from discontinued operations | (80,450 | ) | (226,932 | ) | |||||||
Net cash provided by financing activities | 248,120 | 8,445,260 | |||||||||
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 116,867 | 137,088 | |||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period | 1,116,176 | 979,088 | |||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period | $ | 1,233,043 | $ | 1,116,176 | |||||||
Supplemental disclosures: | |||||||||||
Cash paid for income taxes | $ | - | $ | - | |||||||
Cash paid for interest | 5,076,266 | $ | 5,534,279 | ||||||||
Noncash investing and financing activities | |||||||||||
Prepaid expenses financed with note payable | $ | 3,638,407 | $ | 3,253,678 | |||||||
Preferred stock dividend | $ | - | $ | 75,000 | |||||||
Shares issued for deferred financing costs | $ | 397,773 | $ | 337,500 | |||||||
Note receivable for property and equipment | $ | 275,000 | $ | 616,683 | |||||||
Beneficial conversion feature on convertible notes payable | $ | - | $ | 5,138,070 | |||||||
Non-cash increase in secured notes payable for settlement of accounts payable | $ | - | $ | 203,010 | |||||||
Equipment financed with note payable | $ | 919,946 | $ | - | |||||||
Right of use assets and operating lease obligation recognized | $ | - | $ | 2,478,508 | |||||||
Convertible notes payable issued to settle accounts payable | $ | - | $ | 1,381,740 | |||||||
Share issued for settlement of debt and accrued interest | $ | 138,750 | $ | 73,818 | |||||||
Share issued for settlement of accounts payable | $ | - | $ | 41,000 | |||||||
Series A Convertible Preferred Stock converted into common shares | $ | - | $ | 182,657 | |||||||
Source:
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