What changed in this filing

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Item 1A. Risk Factors

2022-11-16 compared with 2022-08-15 · 33 added, 13 removed, 49 unchanged (48% of the section changed)

7 unchanged sentences

If we are not successful in our efforts to increase sales or raise capital, we could experience a shortfall in cash over the next twelve months, and our ability to obtain additional financing on acceptable terms, if at all, may be limited.

At June 30, 2022 and December 31, 2021, we had cash and cash equivalents and a short-term investment, collectively, of $ 2,428,211 and $ 13,024,381 respectively.

However, during the six months ended June 30, 2022 and year ended December 31, 2021, we reported a net loss attributable to common stockholders of SG Blocks, Inc.

At September 30, 2022 and December 31, 2021, we had cash and cash equivalents and a short-term investment, collectively, of $2,118,169 and $ 13,024,381 respectively.

However, during the nine months ended September 30, 2022 and year ended December 31, 2021, we reported a net loss attributable to common stockholders of SG Blocks, Inc.

of $4,586,120 and $ 10,832,674 , respectively, and used $ 5,553,160 and $ 662,759 of cash for operations, respectively.

13 unchanged sentences

A few customers have in the past, and may in the future, account for a significant portion of our revenues in any one year or over a period of several consecutive years.

For example, for the six months ended June 30, 2022 approximately 90% of our revenue was generated from two customers and for the year ended December 31, 2021, approximately 80% of our revenue was generated from one customers.

For example, for the nine months ended September 30, 2022 approximately 93% of our revenue was generated from three customers and for the year ended December 31, 2021, approximately 80% of our revenue was generated from one customer.

Although we have contractual relationships with many of our significant customers, our customers may unilaterally reduce or discontinue their contracts with us at any time.

6 unchanged sentences

Any negative impacts to our business or liquidity could adversely impact our ability to establish or maintain these relationships.

For the six months ended June 30, 2022 and 2021, cost of revenue relating to one and three vendors represented approximately 10% and 48% of the Company's total cost of revenue, respectively.

For the nine months ended September 30, 2022 and 2021, cost of revenue relating to one and three vendors represented approximately 0% and 48% of the Company's total cost of revenue, respectively.

Our clients may adjust, cancel or suspend the contracts in our backlog;

4 unchanged sentences

We include in backlog only those contracts for which we have reasonable assurance that the customer can obtain the permits for construction and can fund the construction.

As of December 31, 2021, our backlog totaled approximately $3.2 million and as of June 30, 2022, our backlog totaled approximately $4.1 million.

As of December 31, 2021, our backlog totaled approximately $3.2 million and as of September 30, 2022, our backlog totaled approximately $2.6 million.

Our backlog is described more in detail in “Note 11—Construction Backlog” of the notes to our consolidated financial statements included elsewhere in this Quarterly Report.

9 unchanged sentences

The issuance of shares of our common stock upon the exercise of outstanding options, warrants and restricted stock units may dilute the percentage ownership of the then-existing stockholders and may make it more difficult to raise additional equity capital.

At June 30, 2022, there were restricted stock units, options and warrants to purchase of 757,450, 36,436 and 2,025,520, respectively, outstanding that could potentially dilute future net income per share.

Because we had a net loss as of June 30, 2022 , we are prohibited from including potential shares of common stock in the computation of diluted per share amounts.

At September 30, 2022, there were restricted stock units, options and warrants to purchase of 757,450, 36,436 and 2,025,520, respectively, outstanding that could potentially dilute future net income per share.

Because we had a net loss as of September 30, 2022 , we are prohibited from including potential shares of common stock in the computation of diluted per share amounts.

Accordingly, we used the same number of shares outstanding to calculate both the basic and diluted loss per share.

At June 30, 2021 , there were options, including options to non-employees and non-directors, restricted stock units and warrants to purchase 36,436, 884,343 and 126,890 shares of common stock, respectively, outstanding that could potentially dilute future net income per share.

Unregistered Sales of Equity Securities and Use of Proceeds

None that have not been previously disclosed in our filings with the SEC.

Defaults Upon Senior Securities

Mine Safety Disclosures

Not applicable.

At September 30, 2021 , there were options, including options to non-employees and non-directors, restricted stock units and warrants to purchase 36,436, 884,343 and 126,890 shares of common stock, respectively, outstanding that could potentially dilute future net income per share.

We may not have an adequate number of shares of common stock authorized to enable us to complete future equity financing transactions or strategic transactions, which may adversely affect our ability to grow and develop.

We are authorized to issue 25,000,000 shares of Common Stock, of which approximately 12,050,206 shares of Common Stock were issued and outstanding as September 30, 2022.

At September 30, 2022, 2,281,623 million common shares were reserved for issuance of shares upon exercise of outstanding options or reserved for future issuance of common shares under our equity incentive plans.

If all of these securities were exercised it would leave approximately 14,293,171 million authorized but unissued shares of common stock.

As a result of our limited number of our authorized and unissued shares of Common Stock, we may have insufficient shares of Common Stock available to issue in connection with any future equity financing transactions or strategic transactions we may seek to undertake.

Accordingly, we will likely take steps in the near future to increase our number of available shares;

however there can be no assurance that we will be able to obtain the requisite stockholder approval to do so.

Changes in general economic conditions, geopolitical conditions, domestic and foreign trade policies, monetary policies and other factors beyond our control may adversely impact our business and operating results.

The uncertain financial markets, disruptions in supply chains, mobility restraints, and changing priorities as well as volatile asset values also affect our business operations and our ability to enter into collaborations and joint ventures.

To date, i nflation has caused increases on some of our estimated costs for construction projects in progress and completed during the past two fiscal years, which has affected our revenue and income(loss) from continuing operations.

It is difficult to predict the impact on increasing inflation on our operations.

We are actively monitoring the effects these disruptions and increasing inflation could have on our operations.

A number of other economic and geopolitical factors both in the U.S.

and abroad, could ultimately have material adverse effects on our business, financial condition, results of operations or cash flows, including the following:

● effects of significant changes in economic, monetary and fiscal policies in the U.S.

and abroad including currency fluctuations, inflationary pressures and significant income tax changes;

● supply chain disruptions;

● a global or regional economic slowdown in any of our market segments;

● changes in government policies and regulations affecting the Company or its significant customers;

● postponement of spending, in response to tighter credit, financial market volatility and other factors;

● rapid material escalation of the cost of regulatory compliance and litigation;

● difficulties protecting intellectual property;

● longer payment cycles;

● credit risks and other challenges in collecting accounts receivable;

● the impact of each of the foregoing on outsourcing and procurement arrangements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors