Cautionary Note Regarding Forward-Looking Statements
Unless otherwise indicated, the terms "SMG Industries ," "SMG," the "Company," "we," "us," and "our" refer toSMG Industries Inc. In this Quarterly Report on Form 10-Q, we may make certain forward-looking statements, including statements regarding our plans, strategies, objectives, expectations, intentions and resources that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.The Securities and Exchange Commission ("SEC") encourages companies to disclose forward-looking information so that investors can better understand a company's future prospects and make informed investment decisions. This Quarterly Report on Form10-Q contains such "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be made directly in this Quarterly Report, and they may also be made a part of this Quarterly Report by reference to other documents filed with theSEC , which is known as "incorporation by reference." The statements contained in this Quarterly Report on Form 10-Q that are not historical fact are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995), within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended and Section 27A of the Securities Act of 1933, as amended. Forward-looking statements may be identified by the use of forward-looking terminology such as "should," "could," "may," "will," "expect," "believe," "estimate," "anticipate," "intends," "continue," or similar terms or variations of those terms or the negative of those terms. All forward-looking statements are management's present expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These statements appear in a number of places in this Form 10-Q and include statements regarding the intent, belief or current expectations ofSMG Industries Inc. Forward-looking statements are merely our current predictions of future events. Investors are cautioned that any such forward-looking statements are inherently uncertain, are not guaranties of future performance and involve risks and uncertainties. Actual results may differ materially from our predictions. There are a number of factors that could negatively affect our business and the value of our securities, including, but not limited to, fluctuations in the market price of our common stock; changes in our plans, strategies and intentions; changes in market valuations associated with our cash flows and operating results; the impact of significant acquisitions, dispositions and other similar transactions; our ability to attract and retain key employees; changes in financial estimates or recommendations by securities analysts; asset impairments; decreased liquidity in the capital markets; and changes in interest rates. Such factors could materially affect our Company's future operating results and could cause actual events to differ materially from those described in forward-looking statements relating to our Company. Although we have sought to identify the most significant risks to our business, we cannot predict whether, or to what extent, any of such risks may be realized, nor is there any assurance that we have identified all possible issues that we might face. In light of these assumptions, risks and uncertainties, the results and events discussed in the forward-looking statements contained in this Quarterly Report on Form 10-Q or in any document incorporated by reference might not occur. Stockholders are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q or the date of the document incorporated by reference in this Quarterly Report on Form 10-Q, as applicable. We are not under any obligation, and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise except as may be required by applicable law. All subsequent forward-looking statements attributable to the Company or to any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We urge readers to carefully review and consider the various disclosures we make in this report and our other reports filed with theSEC that attempt to advise interested parties of the risks, uncertainties and other factors that may affect our business including the risk factors included herein under Item 1A "Risk Factors." in our Annual Report on Form 10-K.
Overview
We are a growth-oriented transportation services company focused on the domestic logistics market. Our primary business objective is to grow our operations and create value for our stockholders through organic growth and strategic acquisitions. We have implemented a Buy & Build growth strategy of acquiring middle market transportation companies and generating organic growth post-acquisition, when possible, by removing business constraints and strategic cross-selling of services benefiting us with higher equipment utilization and market share. We believe our business focus and equipment fleet position us to be significant participant in the domesticUnited States infrastructure market.
Our wholly-owned operating subsidiaries are:
? 5JTrucking LLC 19 Table of Contents
? 5J
? 5JSpecialized LLC ? 5JTransportation LLC
? 5J
Together these business units are referred to as the "5J
Our operating subsidiaries provide a range of transportation services such as:
? Transporting infrastructure components including bridge beams and power
generation transformers
? Transporting wind energy components
? Heavy haul of production equipment, heat exchangers, coolers, construction
equipment, refinery components
? Super heavy haul over-dimensional permit-required loads up to 500 thousand
pounds for engineered projects
? Transportation of midstream compressors
? Flatbed freight
? Crane services used to set equipment on compressor stations, pipeline
infrastructure and load drilling rig components
? Drilling rig relocation for drilling contractors and oil and gas operators
? Freight brokerage In connection with our focus to expand our transportation services business and exit certain up-stream oil and gas industrial-related businesses, the financial results of the following business have been classified as discontinued operations on our consolidated financial statements:
?
?
We are headquartered in
Acquisition, divestiture and wind-down of businesses
OnFebruary 27, 2020 , we acquired one hundred percent of the membership interests of each of 5JOilfield Services LLC ("5J Oilfield") and 5JTrucking LLC ("5J Trucking"), combined referred to as "5J". The aggregate purchase price of 5J was$12.7 million , consisting of a combination of cash, notes and Series B Convertible Preferred Stock. InDecember 2020 we soldMG Cleaners LLC ("MG"), an oil and gas ("O&G") drilling rig cleaning company. The results of operations of MG are reflected in the Consolidated Statements of Operations for the year endedDecember 31, 2020 as "net loss from discontinued operations". InDecember 2020 , the Company decided to cease the operations ofTrinity Services LLC ("Trinity"), an O&G drilling pad dirt construction company. The assets and operations of Trinity are reflected on theDecember 31, 2021 and 2020 Consolidated Balance Sheets as "assets or liabilities of discontinued operations" and the results of operations are reflected in the Consolidated Statements of Operations for the years endedDecember 31, 2021 and 2020 as "net loss from discontinued operations". 20
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In the second quarter of 2021 we formed 5JTransportation LLC in connection with leasing theEast Houston terminal operations for our flatbed services. In the first quarter of 2021, we formed 5JBrokerage LLC , which was renamed 5JLogistics Services LLC during the fourth quarter of 2021, our transportation brokerage business, in connection with offering those services. All of our 5J subsidiaries are referred to as the 5JTransportation Group .
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.
Critical Accounting Policies and Estimates
The preparation for financial statements and related disclosures in conformity withUnited States generally accepted accounting principles (U.S. GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. For a description of our significant accounting policies, see the Company's audited consolidated financial statements for the year endedDecember 31, 2021 , included in the Company's Form 10-K as filed with theSEC onApril 15, 2022 . We do not consider any of our policies or estimates to be critical. Management will base its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates under different assumptions or conditions.
Results of Operations
Three Months Ended
The following table sets forth the results of our operations for the three
months ended
Three months ended September 30, 2022 2021 Sales$ 19,331,484 $ 14,772,939 Cost of goods sold 18,070,208 15,292,090 Gross profit (loss) 1,261,276 (519,151) Operating expenses 2,404,852 1,455,253 Loss from operations (1,143,576) (1,974,404) Other expense (2,053,561) (1,954,560) Loss from continuing operations (3,197,137)
(3,928,964)
Income (loss) from discontinued operations (2,852)
316,926 Net loss (3,199,989) (3,612,038) Preferred stock dividends - (25,000)
Net loss attributable to common shareholders
The Consolidated Balance Sheets as ofSeptember 30, 2022 andDecember 31, 2021 present the assets and liabilities of MG and Trinity as discontinued operations. The Consolidated Statements of Operations for the quarters endedSeptember 30, 2022 and 2021 present the results of MG and Trinity as Net loss from discontinued operations. The Consolidated Statements of Cash Flows for the quarters endedSeptember 30, 2022 and 2021 present operating, investing and financing activities of MG and Trinity as cash flows from or used in discontinued operations. 21 Table of Contents
Sales for the quarter endedSeptember 30, 2022 increased to$19,331,484 , an increase of 30.9% from$14,772,939 for the quarter endedSeptember 30, 2021 . The increase in sales in the third quarter of 2022 was primarily driven by increased revenues in our industrial transportation segment from higher customer activity transporting drilling rigs, and in our heavy haul business transporting bridge beams, over-dimensional infrastructure items and large natural gas compressors. Our increase in revenues was also attributable to the general improvement in the domesticUnited States economy from COVID-19 pandemic.
Cost of Goods Sold
Cost of goods sold for the three months endedSeptember 30, 2022 , was$18,070,208 , compared to$15,292,090 for the same period of 2021. As a percentage of overall sales, the cost of goods sold was 93.5% during the three months endedSeptember 30, 2022 , compared to 103.5% for the same fiscal period a year ago. Cost of goods sold includes$1,389,753 and$1,337,233 , in non-cash depreciation charges for the three months endedSeptember 30, 2022 and 2021, respectively. The increase over the prior year was due to higher direct expenses associated with the increased volume of revenues, including driver payroll and settlements, and increased fuel and freight costs compared to the prior period. We currently believe the Company will continue to improve cost of goods sold as a percentage of sales through increased revenues covering more fixed costs within cost of goods sold and higher utilization of our existing equipment fleet through anticipated future increases in customer demand.
Gross Profit (Loss)
Gross profit for the three months ended
Operating Expenses Three months ended September 30, 2022 2021 Operating expenses: General and administrative$ 2,404,852 $ 1,455,253 Operating expenses$ 2,404,852 $ 1,455,253 Total operating expenses were$2,404,852 in the three months endedSeptember 30, 2022 , compared to$1,455,253 in the same period of 2021, representing an increase in operating expenses of$949,599 , or 65.3%, from the three months endedSeptember 30, 2021 . The increase in operating expenses was primarily attributable to higher wage expense from additional managerial personnel added during the period for our newer divisions of brokerage & logistics, and super heavy haul, as well as increased professional and general corporate expenses.
Loss From Operations
As a result of the preceding, our loss from operations was$1,143,576 during the three months endedSeptember 30, 2022 , compared with$1,974,404 for the same period of 2021. This$830,8288 , or 42.1%, improvement in our loss from operations was primarily attributable to gross margin improvement and higher revenues in the third quarter 2022 compared to the year ago period.
Other Expense
Total other expense was$2,053,561 for the three months endedSeptember 30, 2022 compared to other income of$1,954,560 for the three months endedSeptember 30, 2021 . Interest expense was$2,635,875 and$2,059,908 for the three months endedSeptember 30, 2022 and 2021, respectively, as a result of increased non-cash amortization of debt costs associated with convertible debt issued in 2021 and deferred finance costs resulting from shares issued. Additionally, the Company recognized a gain of$564,814 from settlement of debt during the three months endedSeptember 30, 2022 .
Net Loss From Continuing Operations
The result was that our net loss from continuing operations was$3,197,137 during the three months endedSeptember 30, 2022 , compared with$3,928,964 for the same period of 2021. This$731,827 , or 18.6%, improvement in our net loss from continuing 22 Table of Contents operations was primarily attributable to the Company's improved net loss from continuing operations due to the gross margin improvements described above and the recognition of gain from settlement of debt of$564,814 .
Nine Months Ended
The following table sets forth the results of our operations for the nine months
ended
Nine months ended September 30, 2022 2021 Sales$ 53,589,434 $ 34,618,358 Cost of goods sold 49,731,153 36,947,626 Gross profit (loss) 3,858,281 (2,329,268) Operating expenses 7,156,698 4,584,854 Loss from operations (3,298,417) (6,914,122) Other expense (6,516,888) (1,242,770) Loss from continuing operations (9,815,305)
(8,156,892)
Income (loss) from discontinued operations (36,090)
360,207 Net loss (9,851,395) (7,796,685) Preferred stock dividends - (75,000)
Net loss attributable to common shareholders
The Consolidated Balance Sheets as ofSeptember 30, 2022 andDecember 31, 2021 present the assets and liabilities of MG and Trinity as discontinued operations. The Consolidated Statements of Operations for the nine months endedSeptember 30, 2022 and 2021 present the results of MG and Trinity as Net loss from discontinued operations. The Consolidated Statements of Cash Flows for the nine months endedSeptember 30, 2022 and 2021 present operating, investing and financing activities of MG and Trinity as cash flows from or used in discontinued operations. Sales for the nine months endedSeptember 30, 2022 increased to$53,589,434 , an increase of 54.8% from$34,618,358 for the nine months endedSeptember 30, 2021 . The increase in sales during the nine months of 2022 was primarily driven by increased revenues in our industrial transportation segment from higher customer activity transporting drilling rigs, and in our heavy haul business transporting bridge beams, over-dimensional infrastructure items and large natural gas compressors. Our increase in revenues was also attributable to the general improvement in the domesticUnited States economy from COVID-19 pandemic.
Cost of Goods Sold
Cost of goods sold for the nine months endedSeptember 30, 2022 , was$49,731,153 , compared to$36,947,626 for the same period of 2021. As a percentage of overall sales, the cost of goods sold was 92.8% during the nine months endedSeptember 30, 2022 , compared to 106.7% for the same fiscal period a year ago. Cost of goods sold includes$4,144,644 and$4,074,738 , respectively in non-cash depreciation charges for the nine months endedSeptember 30, 2022 and 2021. The increase over the prior year was due to higher direct expenses associated with the increased volume of revenues, including driver payroll and settlements, increased fuel and freight costs compared to the prior period. We currently believe the Company will continue to improve cost of goods sold as a percentage of sales through increased revenues covering more fixed costs within cost of goods sold and higher utilization of our existing equipment fleet through anticipated future increases in customer demand.
Gross Profit (Loss)
Gross profit for the nine months endedSeptember 30, 2022 , was$3,858,281 , compared to a gross loss of$2,329,268 for the same period of 2021. Our gross profit margin was 7.2% during the nine months endedSeptember 30, 2022 , compared to a gross loss margin of 6.7% for the same fiscal period a year ago. The improvement in gross loss margin is due to higher volumes of revenues and more favorable pricing as compared to the comparable nine month period 2021 results. 23 Table of Contents Operating Expenses Nine months ended September 30, 2022 2021 Operating expenses: General and administrative$ 7,156,698 $ 4,584,854 Operating expenses$ 7,156,688 $ 4,584,854
Total operating expenses were$7,156,698 in the nine months endedSeptember 30, 2022 , compared to$4,584,854 in the same period of 2021, representing an increase in operating expenses of$2,571,844 , or 56%, from the nine months endedSeptember 30, 2021 . The increase in operating expenses was primarily attributable to higher wage expense from additional managerial personnel added during the period for our newer divisions of brokerage & logistics, and super heavy haul, professional fees as well as general corporate expenses.
Loss From Operations
As a result of the preceding, our loss from operations was$3,298,417 during the nine months endedSeptember 30, 2022 , compared with$6,914,122 for the same period of 2021. This$3,615,705 , or 52%, improvement in our loss from operations was primarily attributable to gross margin improvement and higher revenues reducing our gross loss during the nine month period endedSeptember 30, 2022 compared to the year ago period.
Other Expense
Total other expense was$6,516,888 for the nine months endedSeptember 30, 2022 compared to other expense of$1,242,770 for the nine months endedSeptember 30, 2021 . Interest expense was$7,433,606 and$4,630,685 for the nine months endedSeptember 30, 2022 and 2021, respectively, as a result of increased non-cash amortization of debt costs associated with convertible debt issued in 2021 and shares issued as deferred finance costs. Non-cash amortization of debt costs was$3,124,398 and$1,096,867 for the nine months endedSeptember 30, 2022 and 2021, respectively. Additionally, the Company recognized a gain of$564,814 from settlement of debt during the three months endedSeptember 30, 2022 and recognized a gain of$3,253,100 from PPP loan forgiveness during the three months endedSeptember 30, 2021 .
Net Loss From Continuing Operations
The result was that our net loss from continuing operations was$9,818,305 during the nine months endedSeptember 30, 2022 , compared with$8,156,892 for the same period of 2021. This$1,658,413 , or 20.3%, increase in our net loss from continuing operations was primarily attributable to increased interest expense and PPP loan forgiveness in 2021, as described above.
Liquidity and Capital Resources
Our cash flows from operations are primarily funded through our financing activities, including our accounts receivable line of credit facility, notes and loans, stock sales, issuing our stock for services and various leases. Currently, we believe we will need to continue to utilize lines of credit, borrowings, and stock sales to sufficiently sustain our current level of operations for the next 12 months. At present, we believe the industry and general domestic economic activity has realized improvement relative to the period one year ago as commodity prices have risen generating higher customer activity in our industrial division, as well as economic improvement from reduced COVID-19 pandemic prevalence in the markets we operate. These economic improvements, currently anticipated by the Company are partially offset by believed inflationary pressures such as higher fuel prices. We likely will require additional capital to maintain or expand operations. Additionally, we believe any material acquisition of another operating company would require additional outside capital consisting of debt or equity. Failure to secure additional funds could significantly hamper our ongoing operations particularly if a down cycle in our industry continues further. As the business cycle improves, and the pandemic dissipates in the markets we serve, we plan to improve our cash flows provided in operating activities by focusing on increasing sales by increasing utilization of the assets we have acquired and offering higher value services that receive higher gross margins. However, there can be no assurances given of industry improvement, pandemic relief or improved cash flows of our business. Historically, we have funded our capital expenditures internally through cash flow, leasing, and financing arrangements. We intend to continue to fund future capital expenditures through cash flow, as well as through capital available to us pursuant to our line of credit, capital from the sale of our equity securities and through commercial leasing and financing programs. 24
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OnSeptember 7, 2021 , 5J Trucking, 5J Oilfield, 5J Transportation, 5J Logistics Services (formerly 5J Brokerage) and 5JSpecialized LLC (the "5J Entities") entered into a loan agreement ("Loan Agreement") and security agreement ("Security Agreement") withAmerisource Funding Inc. ("Amerisource") in the total amount of$12,740,000 . Pursuant to the terms of the Loan Agreement, the 5J Entities will pay interest only on a monthly basis throughOctober 1, 2022 and principal and interest thereafter over the remaining term throughSeptember 7, 2026 . The Note bears interest at a rate of 12.0% per annum and may be prepaid early at any time without penalty. The 5J Entities will also pay an annual collateral management fee to Amerisource in the amount of 0.40% of the total loan amount payable at the closing and each anniversary during the term of the note. Amerisource is a related party of the Company due to its holdings of common stock and convertible debt of the Company and has an officer on the Board of Directors of the Company. OnMarch 15, 2022 , each of our 5J subsidiaries entered into an agreement with Amerisource pursuant to which Amerisource agreed to increase the loan commitment to the 5J entities from$12,740,000 to$16,740,000 . The Company received$4,000,000 of cash proceeds from this agreement.
Pursuant to the terms of the Security Agreement, the 5J Entities granted a security interest in all of their assets to Amerisource as collateral for the repayment of the Amerisource loan.
In connection with the Loan Agreement, the Company, the parent company of each of the 5J Entities, entered into a pledge agreement pursuant to which the Company has granted a security interest in all of its assets to Amerisource and a guaranty agreement pursuant to which the Company has guaranteed the timely payment of all amounts due under the Loan Agreement. The Loan Agreement includes customary covenants, including a negative convent that the 5J Entities may not create or permit for any lien to exist on the collateral nor enter into any new debt agreement. The proceeds from the issuance of the Note were used to pay down the outstanding balance owed toUtica Leaseco LLC ("Utica") pursuant to a Second Forbearance Agreement entered into by and between 5J Trucking and 5J Oilfield with Utica onSeptember 7, 2021 ("Forbearance Agreement"). The Utica agreement was paid in full through the Amerisource Loan Agreement inNovember 2021 . OnFebruary 27, 2020 , the 5J Entities entered into a Revolving Accounts Receivable Assignment and Term Loan Financing and Security Agreement withAmerisource Funding Inc. ("Amerisource") in the aggregate amount of$10,000,000 ("Amerisource Financing"). The Company used a portion of the proceeds from the Amerisource Financing to pay the cash portion of the purchase price of the 5J Entities. 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 AR Facility has been issued in an amount not to exceed$10,000,000 , with the maximum availability limited to 90% of the eligible accounts receivable (as defined in the financing agreement). The AR Facility is paid for by the assignment of the accounts receivable of each of the 5J Entities and is secured by all instruments and proceeds related thereto. The AR Facility has an interest rate of 4.5% in excess of the prime rate per annum, an initial collateral management fee of 0.75% of the maximum account limit per annum, a non-usage fee of 0.35% assessed on a quarterly basis on the difference between the maximum availability under the AR Facility and the average daily revolving loan balance outstanding, and a one time commitment fee equal to$100,000 paid at closing. The AR Facility can be terminated by the 5J Entities with 60 days written notice. There is an early termination fee equal to two percent (2.0%) of the then maximum account limit if there are more than twelve (12) months remaining in term of the AR Facility, or one percent (1.0%) of the then maximum account limit if there twelve months or less remaining in the term of the AR Facility. The Company is a guarantor of the Amerisource Financing. The Amerisource Equipment Loan in the amount of$1,401,559 is secured by certain equipment pledged as collateral, has a term of thirty-six (36) months during which the 5J Entities shall make equal monthly payments of principal and interest, bears an interest rate of prime rate plus five and one-quarter percent (5.25%) and an origination fee equal to one and one-half percent (1.5%) of the loan amount. OnFebruary 27, 2020 , the Company entered into a loan agreement withAmerisource 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 onFebruary 27, 2023 and is convertible into shares of the Company's common stock at a conversion price of$0.25 per share. The interest rate on the Amerisource Note increases to 11% per annum onFebruary 27, 2021 and to 12% per annum onFebruary 27, 2022 . Interest shall be paid on a quarterly basis. In addition, 2,498,736 shares of the Company's 25 Table of Contents common stock were issued to the noteholder in connection with the sale of the Amerisource Note. The Amerisource Note may be prepaid at any time by the Company on 10 days-notice to the noteholder without penalty.
During the year ended
We had net working capital deficit of
Cash Flows
The following is a summary of cash provided by or used in each of the indicated types of activities during the nine months endedSeptember 30, 2022 and 2021: Nine months ended September 30, 2022 2021 Cash provided by (used in): Operating activities from continuing operations$ (580,253) (5,886,248) Operating activities from discontinued operations - 568,518 Operating activities (580,253) (5,317,730) Investing activities from continuing operations 282,070 (132,026) Investing activities from discontinued operations - - Investing activities 282,070 (132,026) Financing activities from continuing operations 683,308 5,639,904 Financing activities from discontinued operations - (226,932) Financing activities$ 683,308 5,412,972
Operating Activities
Net cash used in operating activities was$580,253 for the nine months endedSeptember 30, 2022 , compared to cash used in operating activities of$5,317,730 during the same period of 2021, including$0 and$568,518 of cash flows provided by discontinued operations, respectively. For the nine months endedSeptember 30, 2022 , net cash used in continuing operating activities of$580,253 consisted of net loss of$9,815,305 , which included non-cash costs of depreciation and amortization of$4,144,644 , shares issued for debt extension of$643,467 , amortization of deferred financing costs of$3,124,398 , gain on settlement of debt of$564,814 and gain on disposal of assets of$351,904 . Changes in working capital accounts included changes in accrued expenses and other liabilities of$706,001 , other assets of$187,239 and accounts payable of$144,341 , partially offset by changes in prepaid expenses and other current assets of$2,775,210 . For the nine months endedSeptember 30, 2021 , net cash used in continuing operating activities of$5,886,248 consisted of net loss of$8,156,892 , which included non-cash costs of depreciation and amortization of$4,074,738 , gain on PPP forgiveness loan of$3,253,100 , gain on sale of assets of$114,926 , amortization of deferred financing costs of$1,096,867 . Changes in working capital accounts included changes in accounts receivable of$6,508,178 , other assets of$306,029 and right of use operating lease liabilities of$277,329 , partially offset by changes in accounts payable of$2,454,235 , prepaid expenses and other current assets of$2,193,864 and accrued expenses and other labilities of$2,155,223 . Investing Activities
Net cash provided by investing activities was
For the nine months endedSeptember 30, 2022 , net cash provided by investing activities consisted of$329,271 of cash proceeds from disposal of property and equipment and$47,201 cash paid for fixed asset additions. 26
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For the nine months ended
Financing Activities
Net cash provided by financing activities was$683,308 for the nine months endedSeptember 30, 2022 , compared to$5,412,972 for the nine months endedSeptember 30, 2021 , including$0 and$226,932 of cash used in related to discontinued operations, respectively. For the nine months endedSeptember 30, 2022 , net cash provided by financing activities consisted of proceeds from notes payable of$5,229,098 , partially offset by repayment of notes payable of$3,624,328 and net payments on secured line of credit of$921,462 . For the nine months endedSeptember 30, 2021 , net cash provided by financing activities consisted of net proceeds from notes payable of$8,274,002 , proceeds from convertible notes payable of$3,255,000 and net proceeds on secured lines of credit of$2,880,180 , offset by payments on notes payable of$8,698,655 and payment on convertible note payable of$50,000 .
Off-Balance-Sheet Transactions
As of
Contractual Commitments
None
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