NOTE 1  BACKGROUND AND BASIS OF PRESENTATION SMG Industries Inc. ("we", "our", the Company or SMG) is a corporation established pursuant to the laws of the State of Delaware on January 7, 2008. The Company 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 transportation services and industrial services business that operates throughout the domestic Southwest United States. Through its wholly-owned operating subsidiaries, the Company offers heavy haul, super heavy haul logistics services as well as industrial cleaning products and equipment along with construction equipment services to more than 200 customers. 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 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. 5Js 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 12 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. On June 18, 2020, we formed 5J Specialized LLC (5J Specialized), which we are the sole member. 5J Specialized was formed as a limited liability company under the State of Texas by the filing of its Articles of Organization with the Secretary of State. 5J Specialized, was established for our expansion into the super heavy haul niche of the Transportation Services market segment. In March 2020 the World Health Organization declared COVID-19 a pandemic. We are still assessing the impact COVID-19 may have on our business, but there can be no assurance that this analysis will enable us to avoid part or all of any impact from the spread of COVID-19 or its consequences, including downturns in business sentiment generally. The extent to which the COVID-19 pandemic and global efforts to contain its spread will impact our operations will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity and scope of the pandemic and the actions taken to contain or treat the COVID-19 pandemic. The accompanying unaudited interim financial statements of SMG Industries Inc. 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.