What changed in this filing

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Item 1. Financial Statements

2023-08-14 compared with 2023-05-11 · 296 added, 159 removed, 792 unchanged (36% of the section changed)

24 unchanged sentences

Assumed liability

Short term note payable, net

Short term notes payable, net

Total current liabilities

6 unchanged sentences

Common stock, $ 0.01 par value, 25,000,000 shares authorized;

14,302,587 issued and 14,225,788 outstanding as of March 31, 2023 and 12,613,978 issued and 12,590,863 outstanding as of December 31, 2022

16,016,107 issued and 15,948,789 outstanding as of June 30, 2023 and 12,613,978 issued and 12,590,863 outstanding as of December 31, 2022

Additional paid-in capital

Treasury stock, at cost - 23,115 shares

Treasury stock, at cost – 67,318 shares as of June 30, 2023 and 23,115 shares as of December 31, 2022

Accumulated deficit

10 unchanged sentences

Three Months Ended

Six Months Ended

Construction services

9 unchanged sentences

General and administrative expenses

Marketing and business development expense

Operating income (loss)

Marketing and business development expenses

Operating loss

Other income (expense):

4 unchanged sentences

Income tax expense

net income (loss) attributable to noncontrolling interests

net income attributable to noncontrolling interests

Net loss attributable to common stockholders of Safe & Green Holdings Corp.

12 unchanged sentences

Stockholders’

Balance at December 31, 2021

Balance at March 31, 2023

Stock-based compensation

Treasury stock

Issuance of restricted stock units

Common stock issued for services

N oncontrolling interest distribution

Balance at March 31, 2022

Balance at June 30, 2023

Balance at December 31, 2022

2 unchanged sentences

Issuance of restricted stock units

Common stock issued for services

Issuance of warrants and restricted common stock

Noncontrolling interest distribution

Treasury stock

Balance at June 30, 2023

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaud ited)

$ 0.01 Par Value

Safe & Green Holdings Corp.

Stockholders'

Noncontrolling

Stockholders’

Balance at March 31, 2022

Stock-based compensation

Issuance of restricted stock units

N oncontrolling interest distribution

Net income (loss)

Balance at June 30, 2022

Balance at December 31, 2021

Stock-based compensation

Issuance of restricted stock units

Noncontrolling interest distribution

Net income (loss)

Balance at June 30, 2022

The accompanying notes are an integral part of these condensed consolidated financial statements.

SAFE & GREEN HOLDINGS CORP.

S AFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

Three Months Ended

March 31, 2023

Three Months Ended

March 31, 2022

Six Months Ended

June 30, 2023

Six Months Ended

June 30, 2022

Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net loss to net cash used in operating activities:

11 unchanged sentences

Accounts receivable

Escrow - bond

Contract assets

5 unchanged sentences

Lease liability

Assumed liability

Net cash used in operating activities

9 unchanged sentences

Repayment of short term notes payable

Proceeds from short-term notes payable and warrants

Proceeds from short-term notes payable and warrants, net of debt issuance costs

Proceeds from long-term notes payable

Purchase of treasury stock

Distribution paid to non-controlling interest

Net cash provided by (used in) financing activities

Net increase in cash and cash equivalents

Net increase/(decrease) in cash and cash equivalents

Cash and cash equivalents - beginning of period

Cash and cash equivalents - end of period

Supplemental disclosure of non-cash investing and financing activities:

Initial value of lease liability

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Description of Business

13 unchanged sentences

In the medical segment the Company uses its modular technology to provide turnkey solutions to medical testing and treatment and generates revenue from the medical testing.

The Company’s real estate development segment builds innovative and green single or multifamily projects in underserved regions nationally using modules built in one of the Company’s vertically integrated factories.

The Company’s real estate development segment builds innovative and green single or multifamily projects in underserved regions nationally using modules (“Modules”) built in one of the Company’s vertically integrated factories.

The environmental segment, the newest segment, is a sustainable medical and waste management solution that collects waste and treats waste for safe disposal.

11 unchanged sentences

During 2020, the Company formed, SG Echo, LLC, a wholly owned subsidiary of the Company.

The Company acquired substantially all the assets of Echo DCL, a Texas limited liability company, except for Echo's real estate holdings for which the Company obtained a right of first refusal.

The Company acquired substantially all the assets of Echo DCL (“Echo”), a Texas limited liability company, except for Echo's real estate holdings for which the Company obtained a right of first refusal.

Echo is a container/modular manufacturer based in Durant, Oklahoma specializing in the design and construction of permanent modular and temporary modular buildings and was one of the Company's key supply chain partners.

5 unchanged sentences

CAT is in the business of marketing, selling, distributing, leasing and otherwise commercially exploiting certain products and services in the COVID- 19 testing and other medical industry.

In addition, during March 2023, the Company formed Safe and Green Medical Corporation.

(“SG Medical”).

As of June 30, 2023, SG Medical is inactive.

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Description of Business (continued)

7 unchanged sentences

(“SG Environmental”) was formed and is focused on biomedical waste removal and will utilize a patented technology that it licenses to shred and disinfect biomedical waste, rendering the waste disinfected, unrecognizable, and of no greater risk to the public health than residential household waste.

As of March 31, 2023, the Company had cash and cash equivalents of $ 1,452,501 and a backlog of $ 1,306,849 .

As of June 30, 2023, the Company had cash and cash equivalents of $ 1,601,331 and a backlog of $ 2,232,465 .

See Note 11 for a discussion of constructi on backlog.

10 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Summary of Significant Accounting Policies

3 unchanged sentences

In the opinion of management, all adjustments, consisting of normal accruals, considered necessary for a fair presentation of the interim financial statements have been included.

Results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

Results for the six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

Recently adopted accounting pronouncements - New accounting pronouncements implemented by the Company are discussed below or in the related notes, where appropriate.

22 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Summary of Significant Accounting Policies (continued)

4 unchanged sentences

In addition, the Company formed Chicago Airport Testing, LLC which collected rental revenue from subleasing to a consortium of government entities assisting in COVID-19 testing.

For the three months ended March 31, 2023 and 2022, the Company recognized $ 0 and $ 6,885,828 , respectively related to activities through these two joint ventures, which is included in medical revenue on the accompanying consolidated statements of operations.

For the six months ended June 30, 2023 and 2022, the Company recognized $ 0 and $ 10,200,000 , respectively related to activities through these two joint ventures, which is included in medical revenue on the accompanying consolidated statements of operations.

Due to the ongoing lower affects of COVID-19 restrictions, the JV began to wind down during the fourth quarter of 2022.

Disaggregation of Revenues

The Company’s revenues for the three, months ended March 31, 2022 wase principally derived from construction and engineering contracts related to Modules, and medical revenue derived from lab testing and test kit sales .

The Company’s revenues for the three, months ended March 31, 2023 was principally derived from construction and engineering contracts related to Modules The Company's contracts are with customers in various industries.

Revenue recognized at a point in time and recognized over time were $ 0 and $ 5,503,935 , respectively, for the three months ending March 31, 2023.

Revenue recognized at a point in time and recognized over time were $ 6,885,828 and $ 1,718,770 , respectively, for the three months ending March 31, 2022 .

The Company’s revenue for the three and six months ended June 30, 2022 was principally derived from construction and engineering contracts related to Modules, and medical revenue derived from lab testing and test kit sales .

The Company’s revenues for the three and six months ended June 30, 2023 was principally derived from construction contracts related to Modules The Company's contracts are with customers in various industries.

Revenue recognized at a point in time and recognized over time were $ 0 and $ 10,600,990 , respectively, for the six months ended June 30, 2023.

Revenue recognized at a point in time and recognized over time were $ 10,203,215 and $ 5,956,354 , respectively, for the six months ended June 30, 2022 .

Revenue recognized at a point in time and recognized over time were $ 0 and $ 5,097,055 , respectively, for the three months ended June 30, 2023.

Revenue recognized at a point in time and recognized over time were $ 3,317,387 and $ 4,237,584 , respectively, for the three months ended June 30, 2022.

The following tables provide further disaggregation of the Company’s revenues by categories:

Three Months Ended March 31,

Three Months Ended June 30,

Revenue by Customer Type

4 unchanged sentences

Total revenue by customer type

Six Months Ended June 30,

Revenue by Customer Type

Construction and Engineering Services:

Multi-Family (includes Single Family)

Medical Revenue:

Medical (lab testing, kit sales and equipment)

Total revenue by customer type

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Summary of Significant Accounting Policies (continued)

Contract Assets and Contract Liabilities

6 unchanged sentences

Contract assets are generally classified as current within the condensed consolidated balance sheets.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

Summary of Significant Accounting Policies (continued)

Contract liabilities from construction and engineering contracts occur when amounts invoiced to customers exceed revenues recognized under the cost-to-cost measure of progress.

4 unchanged sentences

The Company periodically evaluates and revises its estimates and makes adjustments when they are considered necessary.

Deferred Contract Costs - Prior to entering into the Exclusive License Agreement (“ELA”) in 2019, the Company was subject to an agreement to construct and develop a certain property (“Original Agreement”), which now was subject to the ELA.

Because of this, the Company is no longer obliged to its Original Agreement.

A s a result of entering into the ELA in 2019 the property became subject to the ELA and the Company was no longer obliged to its Original Agreement.

Upon entering the ELA, the Company had an outstanding accounts receivable balance of $ 306,143 which was forfeited and recognized this amount as deferred contract costs.

3 unchanged sentences

The Company initially planned to amortize the asset over sixty months , which is the initial term of the ELA because the asset relates to the services transferred to the customer during the contract term.

As of March 31, 2023, accumulated amortization related to deferred contract costs amounted to $ 142,747 .

During the three months ended March 31, 2023 and 2022, amortization expense relating to the deferred contract costs amounted to $ 10,196 and $ 10,196 , respectively, and is included in general and administrative expenses on the accompanying consolidated statements of operations.

As of June 30, 2023, accumulated amortization related to deferred contract costs amounted to $ 152,944 .

During the six months ended June 30, 2023 and 2022, amortization expense relating to the deferred contract costs amounted to $ 20,393 and $ 20,392 , respectively, and is included in general and administrative expenses on the accompanying consolidated statements of operations.

T he ELA was terminated on June 15, 2021 but the Company expects to recover the deferred contract costs from the Assignment of Limited Rights Under Membership Interest Redemption Agreement, dated June 15, 2021.

14 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Summary of Significant Accounting Policies (continued)

1 unchanged sentence

In consideration and subject to Clarity Lab’s services and commitments and provided the agreement remains valid and in force, and is not terminated, the Company agreed to issue 200,000 restricted shares of the Company’s common stock over a defined vesting period starting in December 1, 2020.

The restricted shares of the Company common stock were not issued to Clarity Labs as certain capital commitments were not met.

The restricted shares of the Company's common stock were not issued to Clarity Labs as certain capital commitments were not met.

Clarity Labs is a licensed clinical laboratory that uses specialized molecular testing equipment and that focuses on the diagnosis and treatment of critical diseases, including COVID-19.

Clarity Labs is also engaged in the business of manufacturing, importing and distributing various medical tests.

Clarity Labs was also engaged in the business of manufacturing, importing and distributing various medical tests.

Under the JV, the Company and Clarity Labs were to jointly market, sell, and distribute certain products and services (“Clarity Mobile Venture”).

11 unchanged sentences

The Company contributed $ 3,000,000 for its 10 % equity interest.

During the three months ended March 31, 2023, the Company contributed an additional $ 25,000 .

During the six months ended June 30, 2023, the Company contributed an additional $ 25,000 .

The purpose of JDI-Cumberland Inlet, LLC is to develop a waterfront parcel in a mixed-use destination community.

1 unchanged sentence

The Company will use the equity method to report the activities as an investment in its consolidated financial statements.

During the three months ended March 31, 2023, Norman Berry and Cumberland did not have any material earnings or losses as the investments are in development.

In addition, management believes there was no impairment as of March 31, 2023.

The approximate combined financial position of the Company’s equity affiliates are summarized below as of March 31, 2023 and December 31, 2022:

During the six months ended June 30, 2023, Norman Berry and Cumberland did not have any material earnings or losses as the investments are in development.

In addition, management believes there was no impairment as of June 30, 2023.

The approximate combined financial position of the Company’s equity affiliates are summarized below as of June 30, 2023 and December 31, 2022:

Condensed balance sheet information:

March 31,2023

June 30, 2023

December 31, 2022

4 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Summary of Significant Accounting Policies (continued)

Cash and cash equivalents – The Company considers cash and cash equivalents to include all short-term, highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less upon acquisition.

Cash and cash equivalents totaled $ 1,452,501 and $ 582,776 as of March 31, 2023, and December 31, 2022, respectively.

Cash and cash equivalents totaled $ 1,601,331 and $ 582,776 as of June 30, 2023, and December 31, 2022, respectively.

Short-term investment – The Company classifies investments consisting of a certificate of deposit with a maturity greater than three months but less than one year as short-term investment.

The Company had no short-term investment as of March 31, 2023 or December 31, 2022 , respectively.

The Company had no short-term investment as of June 30, 2023 or December 31, 2022 , respectively.

Accounts receivable and allowance for credit losses – Accounts receivable are receivables generated from sales to customers and progress billings on performance type contracts.

11 unchanged sentences

Medical equipment and COVID- 19 test and testing supplies are valued at the lower of cost, (first-in, first-out method) or net realizable value.

As of March 31, 2023 and December 31, 2022 there was inventory of $ 12,989 and $ 465,560 , respectively, for construction materials.

As of June 30, 2023 and December 31, 2022 there was inventory of $ 823,135 and $ 465,560 , respectively, for construction materials.

Goodwill – The Company performs its impairment test of goodwill at the reporting unit level each fiscal year, or more frequently if events or circumstances change that would more likely tha n not reduce the fair value of its reporting unit below its carrying values.

1 unchanged sentence

The amount by which the carrying value of the goodwill exceeds its implied fair value, if any, is recognized as an impairment loss.

There were no impairments during the three months ended March 31, 2023 or 2022.

There were no impairments during the six months ended June 30, 2023 or 2022.

Intangible assets – Intangible assets consist of $ 2,766,000 of proprietary knowledge and technology, which is being amortized over 20 years.

In addition, included in intangible assets is $ 97,164 of trademarks, and $ 196,812 of website costs that are being amortized over 5 years.

The Company evaluated intangible assets for impairment during the three months ended March 31, 2023 and 2022 and determined that there are no impairment losses.

The accumulated amortization as of March 31, 2023 and 2022 was $ 1,027,082 and $ 857,554 , respectively.

The amortization expense for the three months ended March 31, 2023 and 2022 was $ 46,119 and $ 41,823 , respectively.

Included in intangible assets is $ 68,344 of trademarks, and $ 207,636 of website costs that are being amortized over 5 years.

The Company evaluated intangible assets for impairment during the six months ended June 30, 2023 and 2022 and determined that there are no impairment losses.

The accumulated amortization for intangible assets as of June 30, 2023 and 2022 was $ 1,074,372 and $ 897,937 , respectively.

The amortization expense for the six months ended June 30, 2023 and 2022 was $ 93,410 and $ 82,204 , respectively.

The amortization expense for the three months ended June 30, 2023 and 2022 was $ 47,291 and $ 40,382 , respectively.

The estimated amortization expense for the successive five years is as follows:

2 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Summary of Significant Accounting Policies (continued)

20 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Summary of Significant Accounting Policies (continued)

24 unchanged sentences

The Company performs ongoing credit evaluations of its customers’ financial condition and, generally, requires no collateral from its customers other than normal lien rights.

At March 31, 2023 and December 31, 2022, 80 % and 80 %, respectively, of the Company’s gross accounts receivable were due from two and three customers.

Revenue relating to one and two customers represented approximately 95 % and 90 % of the Company's total revenue for the three months ended March 31, 2023 and 2022 , respectively.

Cost of revenue relating to two vendors represented approximately 28 % of the Company’s total cost of revenue for the three months ended March 31, 2022.

For the three months ended March 31 , 2023 there were no vendors that represented 10 % or more of our cost of revenue.

At June 30, 2023 and December 31, 2022, 96 % and 80 %, respectively, of the Company’s gross accounts receivable were due from four and three customers.

Revenue relating to one and two customers represented approximately 96 % and 97 % of the Company's total revenue for the three months ended June 30, 2023 and 2022 , respectively.

Revenue relating to one and one customers represented approximately 96 % and 90 % of the Company's total revenue for the six months ended June 30, 2023 and 2022, respectively.

Cost of revenue relating to two vendors represented approximately 12 % of the Company’s total cost of revenue for the three months ended June 30, 2022.

Cost of revenue relating to three vendors represented approximately 10 % of the Company’s total cost of revenue for the six months ended June 30, 2022.

There were no vendors representing 10 % or more of the Company’s total cost of revenue for the three or six months ended June 30, 2023.

The Company believes it has access to alternative suppliers, with limited disruption to the business, should circumstances change with its existing suppliers.

2 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Accounts Receivable

At March 31, 2023 and December 31, 2022 , the Company’s accounts receivable consisted of the following:

At June 30, 2023 and December 31, 2022 , the Company’s accounts receivable consisted of the following:

Construction services

5 unchanged sentences

Contract Assets and Contract Liabilities

Costs and estimated earnings on uncompleted contracts, which represent contract assets and contract liabilities, consisted of the following at March 31, 2023 and December 31, 2022 :

Costs and estimated earnings on uncompleted contracts, which represent contract assets and contract liabilities, consisted of the following at June 30, 2023 and December 31, 2022 :

Costs incurred on uncompleted contracts

3 unchanged sentences

billings to date

Net contract liabilities on uncompleted contracts

The above amounts are included in the accompanying condensed consolidated balance sheets under the f ollowing captions at March 31, 2023 and December 31, 2022 .

Net contract assets/(liabilities) on uncompleted contracts

The above amounts are included in the accompanying condensed consolidated balance sheets under the f ollowing captions at June 30, 2023 and December 31, 2022 .

Contract assets

Contract liabilities

Net contract liabilities

Net contract assets (liabilities)

Although management believes it has established adequate procedures for estimating costs to complete on open contracts, it is at least reasonably possible that additional significant costs could occur on contracts prior to completion.

3 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and2022(Unaudited)

For the Six Months Ended June 30, 2023 and 2022(Unaudited)

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and amortization and depreciated using the straight-line method over their useful lives.

At March 31, 2023 and December 31, 2022, the Company’s property, plant and equipment, net consisted of the following:

At June 30, 2023 and December 31, 2022, the Company’s property, plant and equipment, net consisted of the following:

Computer equipment and software

8 unchanged sentences

Property, plant and equipment, net

Depreciation expense for the three months ended March 31, 2023 and 2022 amounted to $ 92,193 and $ 104,825 respectively.

Depreciation expense for the three months ended June 30, 2023 and 2022 amounted to $ 92,471 and $ 106,152 respectively.

Depreciation expense for the six months ended June 30, 2023 and 2022 amounted to $ 184,964 and $ 210,977 respectively.

Notes Receivable

2 unchanged sentences

Galvin personally loaned CPF GP $ 100,000 on behalf of the Company.

The Company Note and Galvin Note were issued pursuant to that certain Loan Agreement and Promissory Note, dated October 3, 2019 (the “Loan Agreement”), as amended on October 15, 2019 and November 7, 2019 by and between the CPF GP and the Company, and bear interest at five percent ( 5 %) per annum, payable, together with the unpaid principal amount of the promissory notes, on the earlier of the July 31, 2023 maturity date or upon the liquidation, redemption sale or issuance of a dividend upon the LLC interests in CPF MF 2019-1 LLC, a Texas limited liability company of which CPF GP is the general partner;

The Company Note and Galvin Note were issued pursuant to that certain Loan Agreement and Promissory Note, dated October 3, 2019 (the “Loan Agreement”), as amended on October 15, 2019 and November 7, 2019 by and between CPF GP and the Company, and bear interest at five percent ( 5 %) per annum, payable, together with the unpaid principal amount of the promissory notes, on the earlier of the July 31, 2023 maturity date or upon the liquidation, redemption sale or issuance of a dividend upon the LLC interests in CPF MF 2019-1 LLC, a Texas limited liability company of which CPF GP is the general partner;

provided, that the terms of the Galvin Note provide that all interest payments due to Mr.

9 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Notes Payable

25 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Notes Payable (continued)

11 unchanged sentences

The number of shares of the Company’s common stock that may be issued upon conversion of the Debenture and exercise of the Peak Warrant, and inclusive of the Commitment Shares and any shares issuable under and in respect of the equity purchase agreement, dated February 7, 2023 between the Company and Peak One described below, is subject to an exchange cap (the “Exchange Cap”) of 19.99 % of the outstanding number of shares of the Corporation’s common stock on the closing date, 2,760,675 shares, unless shareholder approval to exceed the Exchange Cap is approved.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Notes Payable (continued)

The Company incurred $ 80,000 in debt issuance costs in connection with the Debenture.

In addition, the initial fair value of the Peak Warrant amounted to $ 278,239 and the fair value of the restricted shares amounted to $ 76,000 , both of which have been recorded as a debt discount and will be amortized over the effective rate method.

For the three months ended March 31, 2023, the Company recognized amortization of debt issuance costs and debt discount of $ 13,333 and $ 75,706 , respectively.

As of March 31, 2023 the unamortized debt issuance costs and debt discount amounted to $ 66,667 and $ 704,167 , respectively.

For the six months ended June 30, 2023, the Company recognized amortization of debt issuance costs and debt discount of $ 0 and $ 0 , respectively.

For the three months ended June 30, 2023, the Company recognized amortization of debt issuance costs and debt discount of $ 20,000 and $ 113,560 , respectively.

For the six months ended June 30, 2023, the Company recognized amortization of debt issuance costs and debt discount of $ 33,333 and $ 189,266 , respectively.

As of June 30, 2023, the unamortized debt issuance costs and debt discount amounted to $ 46,667 and $ 264,793 , respectively.

On May 16, 2023, SG Building, entered into a Cash Advance Agreement (“Cash Advance Agreement”) with Cedar Advance LLC (“Cedar” pursuant to which SG Building sold to Cedar $ 710,500 of its future receivables for a purchase price of $ 500,000 .

Cedar is expected to withdraw $ 25,375 a week directly from SG Building, until the $ 710,500 due to Cedar is paid in full.

In the event of a default (as defined in the Cash Advance Agreement), Cedar, among other remedies, can demand payment in full of all amounts remaining due under the Cash Advance Agreement.

SG Building’s obligations under the Cash Advance Agreement have been guaranteed by SG Echo.SG Building incurred $ 25,000 in debt issuance costs in connection with the Cash Advance Agreement.

As of June 30, 2023, the unamortized debt issuance costs amounted to $ 25,000 .

In connection with the exercise of its option to acquire 19 acres of land and the approximately 56,775 square foot facility located at 101 Waldron Road in Durant Oklahoma (the “Premises”), on June 8, 2023, SG Echo issued a secured commercial promissory note, dated June 1, 2023 (the “Secured Note”), in the principal amount of $ 1,750,000 with SouthStar Financial, LLC, a South Carolina limited liability company (“SouthStar”), and entered into a Non-Recourse Factoring and Security Agreement, dated June 1, 2023 (the “Factoring Agreement”), with SouthStar providing for its purchase from SG Echo of up to $ 1,500,000 of accounts receivable, subject to reduction by South Star (the “Facility Amount”).

The Secured Note bears interest at 23 % per annum and is due and payable on June 1, 2025 .

The Secured Note is secured by a mortgage (the “Mortgage”) on the Premises and secured by a Security Agreement, dated June 1, 2023 (the “Security Agreement”), pursuant to which SG Echo granted to SouthStar first priority security interest in all of SG Echo’s presently-owned and hereafter-acquired personal and fixture property, wherever located, including, without limitation, all accounts, goods, chattel paper, inventory, equipment, instruments, investment property, documents, deposit accounts, commercial tort claims, letters-of-credit rights, general intangibles including payment intangibles, patents, software trademarks, trade names, customer lists, supporting obligations, all proceeds and products of the foregoing.

SG Echo paid to SouthStar an origination fee in the amount of 3 % of the face amount of the Secured Note.

Upon the occurrence of an Event of Default (as defined in the Secured Promissory Note), the default interest rate will be 28 % per annum, or the maximum legal amount provided by law, whichever is greater.

The Factoring Agreement provides that upon acceptance of an account receivable for purchase SouthStar will pay to SG Echo eighty percent ( 80 %) of the face amount of the account receivable, or such lesser percentage as agreed by the parties.

SG Echo will also pay to SouthStar one and 95/100 percent ( 1.95 %) of the face amount of the accounts receivable for the first twenty-five ( 25 ) day period after payment for the accounts receivable is transmitted to SouthStar plus one and 25/100 percent ( 1.25 %) for each additional fifteen ( 15 ) day period or part thereof, calculated from the date of purchase until payments received by SouthStar in collected funds on the purchased accounts receivable equals the purchase price of the accounts receivable, plus all charges due SouthStar from SG Echo at the time.

An additional one and 50/100 percent ( 1.50 %) per fifteen ( 15 ) day period will be charged for invoices exceeding sixty ( 60 ) days from advance date.

The Factoring Agreement provides that SG Echo may require additional funding from SouthStar (an “Overadvance”) and SouthStar may provide the Overadvance in its sole discretion.

In the event of an Overadvance, SG Echo will pay SouthStar an amount equal to three and 90/100 percent ( 3.90 %) of the amount of the Overadvance for the first twenty-five ( 25 ) day period after the Overadvance is transmitted to SouthStar plus two and 50/100 percent ( 2.50 %) for each additional fifteen ( 15 ) day period or part thereof until payments received by SouthStar in collected funds equals the amount of the Overadvance, plus all charges due SouthStar from SG Echo at the time.

The Factoring Agreement provides that SG Echo will also pay a transactional administrative fee of $ 50.00 for each new account debtor submitted to it and an fee equal to 0.25 % of the face amount of all purchased accounts receivable for the handling, collecting, mailing, quality assuring, insuring the risk, transmitting, and performing certain data processing services with respect to the maintenance and servicing of the purchased accounts.

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

The Company leases an office, a manufacturing plant and certain equipment under non-cancelable operating lease agreements.

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Notes Payable (continued)

As security for the payment and performance of SG Echo’s present and future obligations to SouthStar under the Factoring Agreement, SG Echo granted to SouthStar a first priority security interest in all of SG Echo’s presently-owned and hereafter-acquired personal and fixture property, wherever located, including, without limitation, all accounts, goods, chattel paper, inventory, equipment, instruments, investment property, documents, deposit accounts, commercial tort claims, letters-of-credit rights, general intangibles including payment intangibles, patents, software trademarks, trade names, customer lists, supporting obligations, all proceeds and products of the foregoing.

The Factoring Agreement has an initial term of thirty-six ( 36 ) months from the first day of the month following the date the first purchased accounts receivable is purchased.

Unless terminated by SG Echo, not less than sixty ( 60 ) but not more than ninety ( 90 ) days before the end of the initial term, the Factoring Agreement will automatically extend for an additional thirty-six ( 36 ) months.

SG Echo shall be required to provide the same not less than sixty ( 60 ) but not more than ninety ( 90 ) days notice during any and all renewal terms in order to terminate the Factoring Agreement, and if no notice is provided, the renewal term will extend for an additional thirty-six ( 36 ) month period.

If SouthStar has not purchased accounts receivable in a quarterly period during any initial or renewal term which exceed fifty percent ( 50 %) of the Facility Amount per calendar quarter, in which $ 250,000 of the purchased accounts each month must be with ATCO Structures & Logistics (USA) Inc.

(“Minimum Amount”), the Factoring Agreement provides that SG Echo will pay to SouthStar, on demand, an additional amount equal to what the charges provided for elsewhere in the Factoring Agreement would have been on the Minimum Amount assuming the number of days from the date of purchase of the Minimum Amount until receipt of payment of the Minimum Amount is thirty one ( 31 ) days, less the actual charges paid by SG Echo to SouthStar during such period.

Pursuant to a Secured Continuing Corporate Guaranty, dated June 8, 2023 (the “Corporate Guaranty”), the Company has guaranteed SG Echo’s obligations to SouthStar under the Secured Note and Factoring Agreement.

Pursuant to a Cross-Default and Cross Collateralization Agreement (the “Cross Default Agreement”), effective June 8, 2023, between SouthStar, SG Echo and the Company, SG Echo’s obligations under the Secured Note and Factoring Agreement are cross-defaulted and cross-collateralized such that any event of default under the Secured Note shall constitute an event of default under the Factoring Agreement at SouthStar’s election (and vice versa, any event of default under the Factoring Agreement shall constitute an event of default under the Secured Note at SouthStar’s election) and any collateral pledged to secure SG Echo’s obligations under the Secured Note shall also secure SG Echo’s obligations under the Factoring Agreement (and vice versa).

SG Echo incurred $ 60,120 in debt issuance costs in connection with the Secured Note.

For the three months ended June 30, 2023, the Company recognized amortization of debt issuance costs of $ 2,505 .

As of June 30, 2023, the unamortized debt issuance costs amounted to $ 57,615 .

On June 23 2023, SG DevCorp, entered into a Loan Agreement (the “BCV Loan Agreement”) with a Luxembourg-based specialized investment fund, BCV S&G DevCorp (“BCV S&G”), for up to $ 2,000,000 in proceeds, of which it has raised $ 1,250,000 to date.

The Loan Agreement provides that the loan provided thereunder will bear interest at 14 % per annum and mature on December 1, 2024 .

The loan may be repaid by SG DevCo at any anytime following the twelve -month anniversary of its issue date.

The loan is secured by 1,999,999 shares of SG DevCorp’s common stock (the “Pledged Shares”), which were pledged by the Company pursuant to an escrow agreement (the “Escrow Agreement”) with American Stock Transfer & Trust Company, LLC, SG DevCorp’s transfer agent, and which represent 19.99 % of SG DevCorp’s outstanding shares.

The fees associated with the issuance include $ 70,000 paid to BCV S&G for the creation of the BCV Loan Agreement and $ 27,500 payable to BCV S&G per annum for maintaining the BCV Loan Agreement.

Additionally, $ 37,500 in broker fees has been paid to Bridgeline Capital Partners S.A.

on the principal amount raised of $ 1,250,000 raised to date.

As of June 30, 2023, the Company has paid $ 35,000 in debt issuance costs.

The BCV Loan Agreement further provides that if SG DevCorp’s shares of common stock are not listed on The Nasdaq Stock Market on before August 30, 2023 or if following such listing the total market value of the Pledged Shares falls below twice the face value of the loan, the loan will be further secured by SG DevCorp’s St.

Mary’s industrial site, consisting of 29.66 acres and a proposed manufacturing facility in St.

Mary’s, Georgia.

For the three months ended June 30, 2023, the Company recognized amortization of debt issuance costs of $ 5,000 .

As of June 30, 2023, the unamortized debt issuance costs amounted to $ 30,000 .

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

The Company leases an office, a manufacturing plant and certain equipment under non-cancellable operating lease agreements.

The leases have remaining lease terms ranging from one year to ten years .

1 unchanged sentence

Balance Sheet Location

March 31, 2023

June 30, 2023

Operating Leases

18 unchanged sentences

Finance leases

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and2022 (Unaudited)

Leases (continued)

As the leases do not provide an implicit rate, the Company used an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments, which is reflective of the specific term of the leases and economic environment of each geographic region.

Anticipated future lease costs, which are based in part on certain assumptions to approximate minimum annual rental commitments under non-cancelable leases, are as follows:

Anticipated future lease costs, which are based in part on certain assumptions to approximate minimum annual rental commitments under non-cancellable leases, are as follows:

Year Ending December 31:

3 unchanged sentences

Present value of lease liabilities

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Net Income (Loss) Per Share

3 unchanged sentences

Potentially dilutive common shares are excluded from the calculation if their effect is antidilutive.

At March 31, 2023, there were restricted stock units, options and warrants of 1,190,935 , 36,436 and 2,525,020 respectively, outstanding that could potentially dilute future net income per share .

Because the Company had a net loss as of March 31, 2023, it is prohibited from including potential common shares in the computation of diluted per share amounts.

At June 30, 2023, there were options and warrants of 36,436 and 2,525,020 respectively, outstanding that could potentially dilute future net income per share .

Because the Company had a net loss as of June 30, 2023, it is prohibited from including potential common shares in the computation of diluted per share amounts.

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

At March 31, 2022 , there were restricted stock units, options and warrants of 2,245,186 , 36,436 and 2,025,520 shares of common stock, respectively, outstanding that could potentially dilute future net income per share.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and 2022Unaudited)

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

Construction Backlog

The following represents the backlog of signed construction and engineering contracts in existence at March 31, 2023 and December 31, 2022, which represents the amount of revenue the Company expects to realize from work to be performed on uncompleted contracts in progress and from contractual agreements in effect at March 31, 2023 and December 31, 2022, respectively, on which work has not yet begun:

The following represents the backlog of signed construction and engineering contracts in existence at June 30, 2023 and December 31, 2022, which represents the amount of revenue the Company expects to realize from work to be performed on uncompleted contracts in progress and from contractual agreements in effect at June 30, 2023 and December 31, 2022, respectively, on which work has not yet begun:

Balance - beginning of period

3 unchanged sentences

Balance - end of period

The Company’s remaining backlog as of March 31, 2023 represents the remaining transaction price of firm contracts for which work has not been performed and excludes unexercised contract options.

The Company expects to satisfy its backlog which represents the remaining unsatisfied performance obligation on contracts as of March 31, 2023 over the following period:

The Company’s remaining backlog as of June 30, 2023 represents the remaining transaction price of firm contracts for which work has not been performed and excludes unexercised contract options.

The Company expects to satisfy its backlog which represents the remaining unsatisfied performance obligation on contracts as of June 30, 2023 over the following period:

Within 1 year

5 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and2022Unaudited)

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Stockholders’ Equity

1 unchanged sentence

In October 2021, the Company closed a registered direct offering and concurrent private placement of its common stock (the "October Offering") that the Company effected pursuant to the Securities Purchase Agreement that it entered into on October 25, 2021 with an institutional investor and received gross proceeds of $ 11.55 million.

Pursuant to the terms of the Purchase Agreement, the Company issued to the investor (A) in a registered direct offering (i) 975,000 shares (the “Public Shares”) of its common stock, and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 2,189,384 shares (the “Pre-Funded Warrant Shares”) of common stock and (B) in a concurrent private placement, Series A warrants to purchase up to 1,898,630 shares (the “Common Stock Warrant Shares”) of common stock (the “Common Stock Warrants,” and together with the Public Shares and the Pre-Funded Warrants, the “Securities”) (the “Offering The Pre-Funded Warrants were immediately exercisable at a nominal exercise price of $ 0.001 and all Pre-Funded Warrants sold have been exercised.

Pursuant to the terms of the Securities Purchase Agreement, the Company issued to the investor (A) in a registered direct offering (i) 975,000 shares (the “Public Shares”) of its common stock, and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 2,189,384 shares (the “Pre-Funded Warrant Shares”) of common stock and (B) in a concurrent private placement, Series A warrants to purchase up to 1,898,630 shares (the “Common Stock Warrant Shares”) of common stock (the “Common Stock Warrants,” and together with the Public Shares and the Pre-Funded Warrants, the “Securities”) (the “Offering The Pre-Funded Warrants were immediately exercisable at a nominal exercise price of $ 0.001 and all Pre-Funded Warrants sold have been exercised.

The Common Stock Warrants have an exercise price of $ 4.80 per share, are exercisable upon issuance and will expire five years from the date of issuance.

9 unchanged sentences

The warrants are further discussed in Note 14.

Equity Purchase Agreement - On February 7, 2023, the Company also entered into an Equity Purchase Agreement (the “EP Agreement”) and related Registration Rights Agreement (the “Rights Agreement”) with Peak One, pursuant to which the Company shall have the right, but not the obligation, to direct Peak One to purchase up to $ 10,000,000.00 (the “Maximum Commitment Amount”) in shares of the Company’s common stock in multiple tranches upon satisfaction of certain terms and conditions contained in the EP Agreement and Rights Agreement which includes but is not limited to filing a registration statement with the SEC and registering the resale of any shares sold to Peak One.

Equity Purchase Agreement - On February 7, 2023, the Company entered into an Equity Purchase Agreement (the “EP Agreement”) and related Registration Rights Agreement (the “Rights Agreement”) with Peak One, pursuant to which the Company has the right, but not the obligation, to direct Peak One to purchase up to $ 10,000,000.00 (the “Maximum Commitment Amount”) in shares of the Company’s common stock in multiple tranches upon satisfaction of certain terms and conditions contained in the EP Agreement and Rights Agreement which includes but is not limited to filing a registration statement with the Securities and Exchange Commission and registering the resale of any shares sold to Peak One.

Further, under the EP Agreement and subject to the Maximum Commitment Amount, the Company has the right, but not the obligation, to submit a Put Notice (as defined in the EP Agreement) from time to time to Peak One (i) in a minimum amount not less than $ 25,000.00 and (ii) in a maximum amount up to the lesser of ( (a) $ 750,000.00 or (b) 200 % of the Average Daily Trading Value (as defined in the EP Agreement).

2 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Stockholders’ Equity (continued)

In connection with the EP Agreement, the Company issued to Peak One Investments, LLC (“Investments”), the general partner of Peak One , 75,000 shares of its common stock, and file a registration statement registering the common stock issued or issuable to Peak One and Investments under the Agreement for resale with the Securities and Exchange Commission within 60 calendar days of the Agreement, as more specifically set forth in the Rights Agreement.

In connection with the EP Agreement, the Company issued to Investments, the general partner of Peak One , 75,000 shares of its common stock, and agreed to file a registration statement registering the common stock issued or issuable to Peak One and Investments under the Agreement for resale with the Securities and Exchange Commission within 60 calendar days of the Agreement, as more specifically set forth in the Rights Agreement.

The registration statement was declared effective on April 14, 2023

The obligation of Peak One to purchase the Company’s common stock under the EP Agreement begins on the date of the EP Agreement, and ending on the earlier of (i) the date on which Peak One shall have purchased common stock pursuant to the EP Agreement equal to the Maximum Commitment Amount, (ii) thirty six ( 36 ) months after the date of the EP Agreement, (iii) written notice of termination by the Company or (iv) the Company’s bankruptcy or similar event (the “Commitment Period”).

During the Commitment Period, the purchase price to be paid by Peak One for the common stock under the EP Agreement will be 97 % of the Market Price, which is defined as the lesser of the (i) closing bid price of the common stock on its principal market on the trading day immediately preceding the respective Put Date (as defined in the Agreement), or (ii) lowest closing bid price of the common stock during the Valuation Period (as defined in the Agreement), in each case as reported by Bloomberg Finance L.P or other reputable source designated by Peak One.

1 unchanged sentence

Among other things, Peak One represented to the Company, that it is an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D under the Securities Act, and the Company sold the securities in reliance upon an exemption from registration contained in Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder.

Common Stock Issued for Services – During the three months ended March 31, 2023, the Company issued 287,512 shares of common stock for services provided.

Common Stock Issued for Services – During the six months ended June 30, 2023, the Company issued 337,512 shares of common stock for services provided.

The value of the shares amounted to $ 484,825 .

Restricted Stock Units – During the three months ended March 31, 2023, the Company issued 1,351,097 shares of common stock for previously vested restricted stock units.

Restricted Stock Units – During the six months ended June 30, 2023, the Company issued 3,014,617 shares of common stock for previously vested restricted stock units.

During the six months ended June 30, 2022, the Company issued 43,333 shares of common stock for previously vested restricted stock units.

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Segments and Disaggregated Revenue

Corporate and support

Fiscal Quarter Ended March 31, 2023

Six Months Ended June 30, 2023

Cost of revenue

8 unchanged sentences

Corporate and support

Fiscal Quarter Ended March 31, 2022

Six Months Ended June 30, 2022

Cost of revenue

11 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Segments and Disaggregated Revenue (continued)

Corporate and support

Three Months Ended June 30, 2023

Cost of revenue

Operating expenses

Operating loss

Other income (expense)

Income (loss) before income taxes

Net income attributable to non-controlling interest

Net income (loss) attributable to common stockholders of Safe & Green Holdings Corp.

Depreciation and amortization

Capital expenditures

Corporate and support

Three Months Ended June 30, 2022

Cost of revenue

Operating expenses

Operating income (loss)

Other income (expense)

Income (loss) before income taxes

Net income attributable to non-controlling interest

Net income (loss) attributable to common stockholders of Safe & Green Holdings Corp.

Depreciation and amortization

Capital expenditures

Inter-segment revenue elimination

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

In conjunction with the June 2017 Public Offering, the Company issued to certain affiliates of the underwriters, as compensation, warrants to purchase an aggregate of 4,313 shares of common stock at an exercise price of $ 125.00 per share.

10 unchanged sentences

The warrants are exercisable at the option of the holder on or after November 6, 2021 and expire May 5, 2025 .

As of June 30, 2023 and December 31, 2022, 73,700 of such warrants are outstanding.

In conjunction with the Purchase Agreement in October 2021, the Company also issued Series A warrants to purchase up to 1,898,630 shares of Common Stock in a concurrent private placement.

13 unchanged sentences

Each of the Company’s employees, directors, and consultants are eligible to participate in the Incentive Plan.

As of March 31, 2023, there were 376,060 shares of common stock available for issuance under the Incentive Plan .

As of June 30, 2023, there were 11,696 shares of common stock available for issuance under the Incentive Plan .

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Share-based Compensation (continued)

1 unchanged sentence

Stock-based compensation expense is included in the condensed consolidated statements of operations as follows:

Six Months Ended

Payroll and related expenses

Three Months Ended

1 unchanged sentence

The following table presents total stock-based compensation expense by security type included in the condensed consolidated statements of operations:

Six Months Ended

Stock options

Restricted Stock Units

Three Months Ended

2 unchanged sentences

Stock-Based Option Awards

The Company has issued no stock-based options during the three months ended March 31, 2023 or 2022.

The Company has issued no stock-based options during the six months ended June 30, 2023 or 2022.

Because the Company does not have significant historical data on employee exercise behavior, the Company uses the “Simplified Method” to calculate the expected life of the stock-based option awards granted to employees.

The simplified method is calculated by averaging the vesting period and contractual term of the options.

The following table summarizes stock-based option activities and changes during the three months ended March 31, 2023 as described below:

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Share-based Compensation (continued)

The following table summarizes stock-based option activities and changes during the six months ended June 30, 2023 as described below:

Weighted Average Fair Value Per Share

3 unchanged sentences

Outstanding – December 31, 2022

Outstanding – March 31, 2023

Outstanding – June 30, 2023

Exercisable – December 31, 2022

Exercisable – March 31, 2023

For the three months ended March 31, 2023 and 2022, the Company recognized stock-based compensation expense of $ 0 and $ 0 , respectively , related to stock options.

Exercisable – June 30, 2023

For the three months ended June 30, 2023 and 2022, the Company recognized stock-based compensation expense of $ 0 and $ 0 , respectively , related to stock options.

For the six months ended June 30, 2023 and 2022 , the Company recognized stock-based compensation expense of $ 0 and $ 0 , respectively, related to stock options.

This expense is included in payroll and related expenses in the accompanying condensed consolidated statements of operations.

As of March 31, 2023, there was no unrecognized compensation costs related to non-vested stock options and all options have been expensed.

As of June 30, 2023, there was no unrecognized compensation costs related to non-vested stock options and all options have been expensed.

The intrinsic value is calculated as the difference between the fair value of the stock price at year end and the exercise price of each of the outstanding stock options.

The fair value of the stock price at March 31, 2023 was $ 0.00 per share.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

Share-based Compensation (continued)

The fair value of the stock price at June 30, 2023 was $ 0.95 per share.

Restricted Stock Units

3 unchanged sentences

The fair value of these units upon issuance amounted to $ 1,843,000 .

On November 18, 2022, a total of 80,000 of restricted stock units were granted to four of the Company's non-employee directors, under the Company's stock-based compensation plan, at the fair value of $ 1.30 per share, which represents the closing price of the Company's common stock on November 18, 2022.

On November 18, 2022, a total of 80,000 of restri cted stock units were granted to four of the Company's non-employee directors, under the Company's stock-based compensation plan, at the fair value of $ 1.30 per share, which represents the closing price of the Company's common stock on No vember 18, 2022.

The restricted stock units granted vest in equal quarterly installments over a two -year period.

For the three months ended March 31, 2023 and 2022 , the Company recognized stock-based compensation of $ 656,369 and $ 649,090 related to restricted stock units.

During the three months ended June 30, 2023, a total of 316,834 of restricted stock units were granted to Mr.

Galvin and six employees of the Company under the Company's stock-based compensation plan, at the fair value of $ 0.85 to $ 1.01 per share, which represents the closing price of the Company's common stock at the grant date..

The restricted stock units granted vest in equal quarterly installments over a two -year period.

On April 4, 2023, a total of 268,166 of restricted stock units were granted to five of the Company's non-employee directors, under the Company's stock-based compensation plan, at the fair value of $ 1.01 per share, which represents the closing price of the Company's common stock on April 4, 2023.

The restricted stock units granted vest in equal quarterly installments over a two -year period

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Share-based Compensation (continued)

As of June 30, 2023, all outstanding restricted stock vesting has been accelerated and there are no unvested restricted stock units.

For the three months ended June 30, 2023 and 2022 , the Company recognized stock-based compensation of $ 2,554,262 and $ 631,076 related to restricted stock units.

For the six months ended June 30, 2023 and 2022, the Company recognized stock-based compensation of $ 3,210,631 and $ 1,280,162 related to restricted stock units.

This expense is included in the payroll and related expenses, general and administrative expenses, and marketing and business development expense in the accompanying condensed consolidated statement of operations.

As of March 31, 2023, there was unrecognized compensation costs of $ 1,602,133 related to non-vested restricted stock units.

The following table summarized restricted stock unit activities during the three months ended March 31, 2023:

As of June 30, 2023, there was no unrecognized compensation costs related to non-vested restricted stock units.

The following table summarized restricted stock unit activities during the six months ended June 30, 2023:

Number of Shares

1 unchanged sentence

Forfeited/Expired

Non-vested balance at March 31, 2023

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

Non-vested balance at June 30, 2023

Commitm ents and Contingencies

18 unchanged sentences

Phipps’ claims against the Company arise from a purported Assignment Agreement, dated as of May 30, 2018, between Pizzarotti, Phipps and the Company (the “Assignment Agreement”), pursuant to which, it is alleged, that the Company agreed to provide a letter of credit in connection with the sub-contracted work to be provided by Phipps to Pizzarotti.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Commitm ents and Contingencies (continued)

The Company believes that the Assignment Agreement was void for lack of consideration and moved to dismiss the case on those and other grounds.

18 unchanged sentences

The Company is currently unable to predict the possible loss or range of loss, if any, associated with the resolution of this litigation, and, accordingly, the Company has made no provision related to this matter in the consolidated financial statements.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

Commitments and Contingencies (continued)

Vendor Litigation

29 unchanged sentences

On March 12, 2021, the Company filed an answer to the HOLA Defendants’ First Amended Consolidated Complaint against it, denying liability and asserting affirmative defenses.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Commitments and Contingencies (continued)

On April 26, 2021, the Company and the HOLA Defendants filed a Joint Stipulation to Dismiss HOLA Community Partners’ Sixth Claim for Relief (violation of California Business and Professions Code §7031(b)), with prejudice, pursuant to Fed.

29 unchanged sentences

The cut-off for fact discovery has been extended to September 12, 2022, and a trial was set for January 31, 2023.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

Commitments and Contingencies (continued)

2 .) SG Blocks, Inc.

16 unchanged sentences

As such, there is no prospect of any recovery against Teton.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Commitments and Contingencies (continued)

On January 22, 2021, the Company filed a third-party complaint against Teton in the United States District Court for the Central District of California, Case No.

10 unchanged sentences

EDI International, PC's cross-complaint seeks in excess of $ 30,429 in damages.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

Commitments and Contingencies (continued)

On July 8, 2020, the Company added PVE LLC as a defendant in the lawsuit, claiming PVE LLC is liable to the same extent as EDI International, PC.

18 unchanged sentences

The court denied that part of Osang’s motion that sought dismissal of the Company’s causes of action for breach of contract (but denied recovery of lost profits) and fraud, but dismissed the Company’s causes of action for breach of implied covenant of good faith and fair dealing, indemnification, accounting, and violation of the New York Unlawful and Deceptive Trade Practices Act (GBL §349).

A status conference was held on November 16, 2022 at which time the Court entered a scheduling order for the conducting of discovery.

Discovery is ongoing.

After mediation before the Court on March 14, 2023, the parties entered into a settlement agreement and mutual release on May 4, 2023.

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2023 and 2022 (Unaudited)

For the Six Months Ended June 30, 2023 and 2022 (Unaudited)

Commitments and Contingencies (continued)

A status conference was held on November 16, 2022 at which time the Court entered a scheduling order for the conducting of discovery.

After mediation before the Court on March 14, 2023, the parties entered into a settlement agreement and mutual release on May 4, 2023.

2 .) Safe & Green Holdings Corp.

6 unchanged sentences

All other terms of the employment agreement remain in full force and effect.

Subsequent Events

On April 4, 2023, the Compensation Committee of the Board of Directors granted an award under the Company’s Incentive Plan of 125,261 restricted stock units to Paul Galvin, vesting quarterly over two years , and an award of 118,166 restricted stock units to David Villarreal, vesting quarterly over two years .

In addition, the Compensation Committee granted to each of Yaniv Blumenfeld , Shafron Hawkins, Elizabeth Cormier-May and Christopher Melton 37,500 RSUs under the Plan, vesting quarterly over two years .

On April 28, 2023, Yaniv Blumenfeld, a member of the Board of Directors (was appointed as a director of SG DevCo.

In connection with his appointment to the SGDevCo board of directors, Mr.

Blumenfeld resigned, effective as of April 28, 2023, from his position as a member of the Company’s Board.

The resignation was not related to any disagreement with the Company on any matter relating to its operations, policies or practices The Company has agreed to invite Mr.

Blumenfeld to attend all meetings of the Board of Directors as a non-voting Board observer so long as he continues to serve as a director of SG DevCo.

On May 1, 2023, the Company appointed Patricia Kaelin as the Company’s Chief Financial Officer and entered into an employment agreement with Patricia Kaelin (the “Kaelin Employment Agreement”) to employ Ms.

4 unchanged sentences

She is also bound by confidentiality provisions.

On May 4, 2023, the Board of Directors took action to vest in full 1,627,773 restricted stock units granted under the Incentive Plan (the “Subject Awards”), which included 476,049 Restricted stock units granted to Paul Galvin, 140,105 restricted stock units granted to David Villarreal, 117,500 restricted stock units granted to Nicolai Brune, 86,960 restricted stock units granted to William Rogers, 59,439 restricted stock units granted to Christopher Melton, 37,500 restricted stock units granted to Elizabeth May-Cormier, 37,500 restricted stock units granted to Shafron Hawkins and 68,814 restricted stock units granted to Yaniv Blumenfeld.

The Company will reimburse each recipient of the Subject Awards who is an employee of the Corporation or a member of the Board of Directors, and who agrees to a 180-day lock-up on any sale or transfer of the shares of common stock to be received by them under the Subject Awards (the “Subject Shares”) and to comply with the requirements of the Company’s Corporate Trading Policy with respect to any sale or transfer of the Subject Shares by them, for the taxes to be paid by them in respect of the accelerated vesting of their Subject Awards (but not any taxes due in respect of such reimbursement).

Subsequent Events

The Company has evaluated all events or transactions that occurred after June 30, 2023 through August xx, 2023, which is the date that the condensed financial statements were available to be issued.

During this period, there were no material subsequent events requiring recognition or disclosure besides below.

The Company has notified William Rogers, our Chief Operating Officer, that his employment agreement with us will not be renewed for a full one-year term upon its expiration on September 26, 2023 ;

however, the Company has offered Mr.

Rogers a two-month extension of his agreement.

Rogers continues to serve as our Chief Operating Officer and upon the expiration of his employment agreement will serve as an employee-at-will.

During July 2023, Ms.

Kaelin’s annual base salary was adjusted to $ 300,000 , retroactive to May 1, 2023.

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 1. Financial Statements