What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-14 compared with 2023-08-14 · 268 added, 196 removed, 892 unchanged (34% of the section changed)

3 unchanged sentences

Condensed Consolidated Balance Sheets

September 30,

Current assets:

28 unchanged sentences

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

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

16,482,771 issued and 15,948,789 outstanding as of September 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 – 67,318 shares as of June 30, 2023 and 23,115 shares as of December 31, 2022

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

Accumulated deficit

9 unchanged sentences

Three Months Ended

September 30,

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Nine Months Ended

September 30,

Construction services

17 unchanged sentences

Income tax expense

net income attributable to noncontrolling interests

net income (loss) attributable to noncontrolling interests

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

12 unchanged sentences

Stockholders’

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 June 30, 2023

D istribution of SG DevCorp

Conversion of short-term notes payable

Balance at September 30, 2023

Balance at December 31, 2022

6 unchanged sentences

Treasury stock

Balance at June 30, 2023

Distribution of SG DevCorp

Conversion of short-term notes payable

Balance at September 30, 2023

SAFE & GREEN HOLDINGS CORP.

6 unchanged sentences

Stockholders’

Balance at March 31, 2022

Balance at June 30, 2022

Stock-based compensation

Issuance of restricted stock units

N oncontrolling interest distribution

Repurchase of common stock

Net income (loss)

Balance at June 30, 2022

Balance at September 30, 2022

Balance at December 31, 2021

2 unchanged sentences

Noncontrolling interest distribution

Repurchase of common stock

Net income (loss)

Balance at June 30, 2022

Balance at September 30, 2022

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

2 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Six Months Ended

June 30, 2023

Six Months Ended

June 30, 2022

Nine Months Ended

September 30, 2023

Nine Months Ended

September 30, 2022

Cash flows from operating activities:

16 unchanged sentences

Intangible assets

Right of use asset

Accounts payable and accrued expenses

13 unchanged sentences

Cash flows from financing activities:

Repurchase of common stock

Repayment of short term notes payable

1 unchanged sentence

Proceeds from long-term notes payable

Purchase of treasury stock

Distribution paid to non-controlling interest

5 unchanged sentences

Initial value of lease liability

Conversion of short-term notes payable to common stock

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

2 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

Description of Business

5 unchanged sentences

The Merger was a reverse merger that was accounted for as a recapitalization of SG Building, as SG Building was the accounting acquirer.

Accordingly, the historical financial statements presented are the financial statements of SG Building.

The Company operates in the following four segments:

(i) construction;

(i) manufacturing & construction services ;

(ii) medical;

2 unchanged sentences

The construction segment designs and constructs modular structures built in the Company’s factories.

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 (“Modules”) built in one of the Company’s vertically integrated factories.

In the medical segment the Company uses its modular technology to (i) provide turnkey solutions to medical testing and treatment and generate revenue from the medical testing and point of care treatment in our medical suites and (ii) sell and lease medical suites and privacy pods .

The Company’s real estate development segment, SG Development Corp., our majority owned subsidiary, 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.

The building products developed with the Company's proprietary technology and design and engineering expertise are generally stronger, more durable, environmentally sensitive, and erected in less time than traditional construction methods.

The use of the SGBlocks building structure typically provides between four to six points towards the Leadership in Energy and Environmental Design (“LEED”) certification levels, including reduced site disturbance, resource reuse, recycled content, innovation in design and use of local and regional materials.

Due to the ability of SGBlocks to satisfy such requirements, the Company believes the products produced utilizing its technology and expertise is a leader in environmentally sustainable construction.

The use of the Company's Modules typically provides between four to six points towards the Leadership in Energy and Environmental Design (“LEED”) certification levels, including reduced site disturbance, resource reuse, recycled content, innovation in design and use of local and regional materials.

Due to the ability of the Modules to satisfy such requirements, the Company believes the products produced utilizing its technology and expertise is a leader in environmentally sustainable construction.

There are three core product offerings that utilize the Company's technology and engineering expertise.

6 unchanged sentences

The Company also provides engineering and project management services related to the use and modification of Modules in construction.

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

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

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.

2 unchanged sentences

This acquisition has allowed the Company to expand its reach for the Modules and offer an opportunity to vertically integrate a large portion of the Company's cost of goods sold, as well as increase margins, productivity and efficiency in the areas of design, estimating, manufacturing and delivery and to become the manufacturer of the Company's core container and modular product offerings.

T he Company also entered into a joint venture with Clarity Lab Solutions LLC., to provide clinical lab testing related to COVID- 19 .

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

Description of Business (continued)

As of January 2021 and through the fourth quarter of 2021 , the Company’s consolidated financial statements include the accounts of Chicago Airport Testing LLC (“CAT”).

3 unchanged sentences

(“SG Medical”).

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

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Description of Business (continued)

The Company also entered into a joint venture with Clarity Lab Solutions LLC., to provide clinical lab testing related to COVID-19.

Real Estate Development

In addition, during 2021, the Company formed Safe and Green Development Corporation, formerly, SGB Development Corp.

(“SG DevCorp”), which is wholly-owned by the Company.

During 2021 , the Company formed Safe and Green Development Corporation, formerly, SGB Development Corp.

(“SG DevCorp”), as a wholly-owned by the Company.

SG DevCorp was formed with the purpose of real property development utilizing the Company's technologies.

SG DevCorp has a minority interest in Norman Berry II Owners LLC and JDI-Cumberland Inlet LLC as described further below.

In December 2022, the Company and then owner of 100 % of the issued and outstanding securities of SG DevCorp , announced its plan to separate the Company and SG DevCorp into two separate publicly traded companies (the “Separation”).

To implement the Separation, on September 27, 2023 (the “Distribution Date”), the Company, effected a pro rata distribution to its stockholders of approximately 30 % of the outstanding shares of SG DevCorp’s common stock (the “Distribution”).

In connection with the Distribution, each Company stockholder received 0.930886 shares of SG DevCorp’s common stock for every five ( 5 ) shares of Company common stock held as of the close of business on September 8, 2023 , the record date for the Distribution, as well as a cash payment in lieu of any fractional shares.

Immediately after the Distribution, SG DevCorp was no longer a wholly owned subsidiary of the Company and the Company held approximately 70 % of SG DevCorp’s issued and outstanding securities.

On September 28, 2023 , SG DevCorp’s common stock began trading on the Nasdaq Capital Market under the symbol “ SGD .”

In connection with the Separation and Distribution, SG DevCorp entered into a separation and distribution agreement and several other agreements with the Company.

These agreements provide for the allocation between SG DevCorp and the Company of the assets, employees, liabilities and obligations (including, among others, investments, property, employee benefits and tax-related assets and liabilities) of the Company and its subsidiaries attributable to periods prior to, at and after the Separation and will govern the relationship between the Company and SG DevCorp subsequent to the completion of the Separation.

In addition to the separation and distribution agreement, the other principal agreements entered into with the Company included a tax matters agreement and a shared services agreement.

Environmental

1 unchanged sentence

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

As of September 30, 2023 , the Company had cash and cash equivalents of $ 712,906 and a backlog of $ 4,000,771 .

See Note 11 for a discussion of constructi on backlog.

Based on our conversations with key customers, the Company anticipates its backlog to convert to revenue over the following period:

Based on its conversations with key customers, the Company anticipates its backlog to convert to revenue over the following period:

Within 1 year

Total Backlog

The Company has incurred losses since its inception, has negative working capital of approximately $ 5,780,773 and has negative operating cash flows, which has raised substantial doubt about its ability to continue as a going concern.

The Company has incurred losses since its inception, has negative working capital of $( 9,280,961 ) and has negative operating cash flows, which has raised substantial doubt about its ability to continue as a going concern.

The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of the uncertainty concerning the Company’s ability to continue as a going concern.

The Company intends to meet its capital needs from revenue generated from operations and by containing costs, entering into strategic alliances, as well as exploring other options, including the possibility of raising additional debt or equity capital as necessary.

There is, however, no assurance the Company will be successful in meeting its capital requirements prior to becoming cash flow positive.

The Company does not have any additional sources secured for future funding, and if it is unable to raise the necessary capital at the times it requires such funding, it may need to materially change its business plan, including delaying implementation of aspects of such business plan or curtailing or abandoning such business plan altogether.

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

For the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

There is, however, no assurance the Company will be successful in meeting its capital requirements prior to becoming cash flow positive.

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

Results for the nine months ended September 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.

14 unchanged sentences

( 5 ) Recognize revenue as performance obligations are satisfied

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

Summary of Significant Accounting Policies (continued)

On certain contracts, the Company applies recognition of revenue over time, which is similar to the method the Company applied under previous guidance (i.e.

3 unchanged sentences

When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident.

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)

For product or equipment sales, the Company applies recognition of revenue when the customer obtains control over such goods, which is at a point in time.

The Company entered into a joint venture agreement with Clarity Lab Solutions, LLC (“Clarity Labs”) (the “JV”) in the fourth quarter of 2021 .

Revenue from the activities of the JV is related to clinical testing services and is recognized when services have been rendered, which is at a point in time.

Included in the consideration the Company expected to be entitled to receive, the Company estimates its contractual allowances, payer denials and price concessions.

Revenue from the activities of the JV is related to clinical testing services and was recognized when services have been rendered, which was at a point in time.

Included in the consideration the Company expected to be entitled to receive, the Company estimated its contractual allowances, payer denials and price concessions.

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 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.

For the nine months ended September 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 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 Company’s revenue for the three and nine months ended September 30, 2022 was principally derived from construction and engineering contracts related to the manufacturing of modular units used for construction , and medical revenue derived from lab testing and test kit sales .

The Company’s revenues for the three and nine months ended September 30, 2023 was principally derived from construction contracts related to the manufacturing of modular units The Company's contracts are with customers in various industries.

Revenue recognized at a point in time and recognized over time were $ 0 and $ 14,566,351 , respectively, for the nine months ended September 30, 2023 .

Revenue recognized at a point in time and recognized over time were $ 11,640,953 and $ 8,648,873 , respectively, for the nine months ended September 30, 2022 .

Revenue recognized at a point in time and recognized over time were $ 0 and $ 3,965,361 , respectively, for the three months ended September 30, 2023 .

Revenue recognized at a point in time and recognized over time were $ 1,437,738 and $ 2,692,519 , respectively, for the three months ended September 30, 2022 .

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

Three Months Ended June 30,

Three Months Ended September 30,

Revenue by Customer Type

Construction and Engineering Services:

Multi-Family (includes Single Family)

Medical Revenue:

1 unchanged sentence

Total revenue by customer type

Six Months Ended June 30,

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

Summary of Significant Accounting Policies (continued)

Nine Months Ended September 30,

Revenue by Customer Type

4 unchanged sentences

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

3 unchanged sentences

The timing of revenue recognition may differ from the timing of invoicing to customers.

Contract assets include unbilled amounts from long-term construction services when revenue recognized under the cost-to-cost measure of progress exceeds the amounts invoiced to customers, as the amounts cannot be billed under the terms of our contracts.

Such amounts are recoverable from customers based upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of a contract.

13 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 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.

As of September 30, 2023 , accumulated amortization related to deferred contract costs amounted to $ 163,140 .

During the nine months ended September 30, 2023 and 2022 , amortization expense relating to the deferred contract costs amounted to $ 30,589 and $ 30,589 , 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.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

Summary of Significant Accounting Policies (continued)

Bu siness Combinations - The Company accounts for business acquisitions using the acquisition method of accounting in accordance with ASC 805 “Business Combinations”, which requires recognition and measurement of all identifiable assets acquired and liabilities assumed at their fair value as of the date control is obtained.

10 unchanged sentences

This determination is evaluated periodically as facts and circumstances change.

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)

On August 27, 2020 the Company entered into a joint venture agreement with Clarity Lab Solutions, LLC (“Clarity Labs”) (the “JV”).

16 unchanged sentences

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

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

During the nine months ended September 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 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:

June 30, 2023

December 31, 2022

Total liabilities

Members’ equity

During the nine months ended September 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 September 30, 2023 .

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

For the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

Summary of Significant Accounting Policies (continued)

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

Condensed balance sheet information:

September 30, 2023

December 31, 2022

Total liabilities

Members’ equity

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

Cash and cash equivalents totaled $ 712,906 and $ 582,776 as of September 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 June 30, 2023 or December 31, 2022 , respectively.

The Company had no short-term investment as of September 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.

7 unchanged sentences

Recoveries are recognized when they are received.

Actual collection losses may differ from our estimates and could be material to our consolidated financial position, results of operations, and cash flows.

Actual collection losses may differ from the Company’s estimates and could be material to its consolidated financial position, results of operations, and cash flows.

Inventory – Raw construction materials (primarily shipping containers and fabrication materials) are valued at the lower of cost (first-in, first-out method) or net realizable value.

1 unchanged sentence

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

As of September 30, 2023 and December 31, 2022 there was inventory of $ 402,186 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 six months ended June 30, 2023 or 2022.

There were no impairments during the nine months ended September 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.

Included in intangible assets is $ 68,344 of trademarks, and $ 238,422 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 Company evaluated intangible assets for impairment during the nine months ended September 30, 2023 and 2022 and determined that there are no impairment losses.

The accumulated amortization for intangible assets as of September 30, 2023 and 2022 was $ 1,121,399 and $ 938,319 , respectively.

The amortization expense for the nine months ended September 30, 2023 and 2022 was $ 140,437 and $ 122,587 , respectively.

The amortization expense for the three months ended September 30, 2023 and 2022 was $ 47,027 and $ 39,243 , respectively.

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

2 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

Summary of Significant Accounting Policies (continued)

20 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Nine Months Ended September 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 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.

At September 30, 2023 and December 31, 2022 , 87 % and 80 %, respectively, of the Company’s gross accounts receivable were due from three and three customers.

Revenue relating to one and two customers represented approximately 100 % and 93 % of the Company's total revenue for the three months ended September 30, 2023 and 2022 , respectively.

Revenue relating to one and one customers represented approximately 97 % and 88 % of the Company's total revenue for the nine months ended September 30, 2023 and 2022 , respectively.

There were no vendors representing 10 % or more of the Company’s total cost of revenue for the three and nine months ended September 30, 2023 and 2022.

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

For the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

Accounts Receivable

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

At September 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 June 30, 2023 and December 31, 2022 :

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

Costs incurred on uncompleted contracts

4 unchanged sentences

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 .

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

Contract assets

6 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Nine Months Ended September 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 June 30, 2023 and December 31, 2022, the Company’s property, plant and equipment, net consisted of the following:

At September 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 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.

Depreciation expense for the three months ended September 30, 2023 and 2022 amounted to $ 92,984 and $ 106,271 respectively.

Depreciation expense for the nine months ended September 30, 2023 and 2022 amounted to $ 277,648 and $ 317,249 respectively.

Notes Receivable

10 unchanged sentences

The Company has a promissory note in the principal amount of $ 100,000 (the "Company Note 3 ") and the assignment occurred in January 2022.

The promissory notes are unaffected by the Settlement and Mutual Release Agreement and remain in effect and outstanding in accordance with the terms of the notes evidencing such loans.

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

For the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

Notes Payable

4 unchanged sentences

On July 14, 2022, the Company entered into a renewal and extension of the Short-Term Note, with a maturity date of January 14, 2023 and all other terms remaining the same.

On September 8,2022, the Company entered into a Second Real Estate Lien Note, in the principal amount of $ 500,000 , with similar terms to the Short-Term Note (“Second Short-Term Note”).

On September 8,2022, SG DevCorp entered into a Second Real Estate Lien Note, in the principal amount of $ 500,000 , with similar terms to the Short-Term Note (“Second Short-Term Note”).

The Second Short-Term Note had a maturity date of January 14, 2023.

During January 2023, the Short-Term Note and Second Short-Term Note were extended with a maturity date of February 1, 2024.

On March 31, 2023, LV Peninsula Holding LLC (“LV Peninsula”), a Texas limited liability company and wholly owned subsidiary of SG DevCorp, pursuant to a Loan Agreement, dated March 30, 2023 (the “Loan Agreement”), issued a promissory note, in the principal amount of $ 5,000,000 (the “LV Note”), secured by a Deed of Trust and Security Agreement, dated March 30, 2023 (the “Deed of Trust”) on the Lake Travis project site in Lago Vista, Texas, a related Assignment of Contract Rights, dated March 30, 2023 (“Assignment of Rights”), on our project site in Lago Vista, Texas and McLean site in Durant, Oklahoma and a Mortgage, dated March 30, 2023 (“Mortgage”), on our site in Durant, Oklahoma.

On March 31, 2023, LV Peninsula Holding LLC (“LV Peninsula”), a Texas limited liability company and wholly owned subsidiary of SG DevCorp, pursuant to a Loan Agreement, dated March 30, 2023 (the “Loan Agreement”), issued a promissory note, in the principal amount of $ 5,000,000 (the “LV Note”), secured by a Deed of Trust and Security Agreement, dated March 30, 2023 (the “Deed of Trust”) on the Lake Travis project site in Lago Vista, Texas, a related Assignment of Contract Rights, dated March 30, 2023 (“Assignment of Rights”), on the project site in Lago Vista, Texas and McLean site in Durant, Oklahoma and a Mortgage, dated March 30, 2023 (“Mortgage”), on its site in Durant, Oklahoma.

The proceeds of the LV Note were used to pay off the Short-Term Note and Second Short-Term Note.

8 unchanged sentences

The 2022 Note bears annual interest at the rate of 9.75 %, with interest payments due monthly until its maturity on September 1, 2023 .The 2022 Note is secured by the underlying property.

During September 2023, such note was extended for a period of one year .

On February 7, 2023, the Company closed a private placement offering (the “Offering”) of One Million One Hundred Thousand Dollars ($ 1,100,000.00 ) in principal amount of the Company’s 8 % convertible debenture (the “Debenture”) and a warrant (the “Peak Warrant”) to purchase up to Five Hundred Thousand ( 500,000 ) shares of the Company’s common stock, to Peak One Opportunity Fund, L.P.

1 unchanged sentence

Pursuant to a Securities Purchase Agreement, dated February 7, 2023 (the “Purchase Agreement”), the Debenture was sold to Peak One for a purchase price of $ 1,000,000 , representing an original issue discount of ten percent ( 10 %).

During the nine months ended September 30, 2023, Peak One converted $ 700,000 of its principal balance into 466,664 shares of common stock of the Company.

In connection with the Offering the Company paid $ 15,000 as a non-accountable fee to Peak One to cover its accounting fees, legal fees and other transactional costs incurred in connection with the transactions contemplated by the Purchase Agreement and issued 50,000 shares of its restricted common stock (the “Commitment Shares”) to Peak One Investments, LLC (“Investments”), the general partner of Peak One .

2 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

Notes Payable (continued)

14 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

Notes Payable (continued)

1 unchanged sentence

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 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.

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

For the nine months ended September 30, 2023 , the Company recognized amortization of debt issuance costs and debt discount of $ 53,333 and $ 302,826 , respectively.

As of September 30, 2023 , the unamortized debt issuance costs and debt discount amounted to $ 26,667 and $ 151,413 , 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 .

2 unchanged sentences

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 .

As of September 30, 2023 , the unamortized debt issuance costs amounted to $ 14,286 .

On September 26, 2023, SG Building and Cedar entered into a second Cash Advance Agreement pursuant to which SG Building sold to Cedar $ 1,171,500 of its future receivables for a purchase price of $ 825,000 .

Cedar is expected to withdraw $ 41,800 a week directly from SG building, until the $ 1,171,500 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.

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”).

3 unchanged sentences

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.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

Notes Payable (continued)

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.

4 unchanged sentences

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.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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.

6 unchanged sentences

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).

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

Notes Payable (continued)

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.

For the three months ended September 30, 2023 , the Company recognized amortization of debt issuance costs of $ 10,020 .

As of September 30, 2023 , the unamortized debt issuance costs amounted to $ 60,100 .

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 loan is secured by 1,999,999 of our shares of SG DevCorp’s common stock (the “Pledged Shares”), which were pledged pursuant to an escrow agreement (the “Escrow Agreement”) with 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.

1 unchanged sentence

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.

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

The BCV Loan Agreement provided that if SG DevCorp’s shares of common stock were 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 would 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 .

For the three months ended September 30, 2023 , the Company recognized amortization of debt issuance costs of $ 410,118 .

As of September 30, 2023 , the unamortized debt issuance costs amounted to $ 233,412 .

On August 16, 2023, SG DevCorp secured an additional $ 500,000 in bridge funding from BCV S&G under the BCV Loan Agreement.

On August 25, 2023, SG DevCorp and BCV S&G amended the BCV Loan Agreement (“Amendment No.

1 ”) to change the date upon which SG DevCorp’s shares must be listed on The Nasdaq Stock Market from August 30, 2023 to September 15, 2023.

According to Amendment No.

1 , if SG DevCorp’s shares of common stock were not listed on The Nasdaq Stock Market before September 15, 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 a security interest in the St.

On September 11, 2023, SG DevCorp and BCV S&G amended the BCV Loan Agreement (“Amendment No.

2 ”) to change the date upon which SG DevCorp’s shares must be listed on The Nasdaq Stock Market from September 15, 2023 to September 30, 2023.

According to Amendment No.

2 , if SG DevCorp’s shares of common stock were not listed on The Nasdaq Stock Market before September 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 a security interest in the St.

Following the listing, the total market value of the Pledged Shares has fallen below twice the face value of the loan and SG DevCorp and BCV S&G are in discussions regarding alternatives.

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

For the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

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

2 unchanged sentences

Balance Sheet Location

June 30, 2023

September 30, 2023

Operating Leases

28 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Nine Months Ended September 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 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.

At September 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 September 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 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.

At September 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 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:

The following represents the backlog of signed construction and engineering contracts in existence at September 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 September 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 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:

The Company’s remaining backlog as of September 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 September 30, 2023 over the following period:

Within 1 year

5 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

Stockholders’ Equity

Public Offerings –

Registered Direct Offering –

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.

16 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

Stockholders’ Equity (continued)

1 unchanged sentence

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”), all subject to the satisfaction of certain conditions set forth in the EP Agreement.

The obligation of Peak One to purchase the Company’s common stock under the EP Agreement began on the date of the EP Agreement, and ends 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”), all subject to the satisfaction of certain conditions set forth in the EP Agreement.

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 six months ended June 30, 2023, the Company issued 337,512 shares of common stock for services provided.

Common Stock Issued for Services – During the nine months ended September 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 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.

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

During the nine months ended September 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 Six Months Ended June 30, 2023 and 2022 (Unaudited)

For the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

Segments and Disaggregated Revenue

Corporate and support

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Cost of revenue

8 unchanged sentences

Corporate and support

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Cost of revenue

11 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

Segments and Disaggregated Revenue (continued)

Corporate and support

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Cost of revenue

8 unchanged sentences

Corporate and support

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Cost of revenue

7 unchanged sentences

Capital expenditures

Inter-segment revenue elimination

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

For the Nine Months Ended September 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.

The warrants are exercisable at the option of the holder on or after June 21, 2018 and expire June 21, 2023 .

The fair value of warrants was calculated utilizing a Black-Scholes model and amounted to $ 63,796 .

The warrants were exercisable at the option of the holder on or after June 21, 2018 and expired June 21, 2023 .

The fair value of the warrants was calculated utilizing a Black-Scholes model and amounted to $ 63,796 .

The fair market value of the warrants as of the date of issuance has been included in issuance costs in additional paid-in capital.

7 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.

As of September 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.

8 unchanged sentences

Effective January 20, 2017, the 2016 Stock Plan was amended and restated as the SG Blocks, Inc .

Stock Incentive Plan, as further amended eff ective June 1, 2018 and as further amended on July 30, 2020 and as further amended on August 18, 2021, (the “Incentive Plan”).

Stock Incentive Plan, as further amended eff ective June 1, 2018 and as further amended on July 30, 2020 and as further amended on August 18, 2021, and as further amended on October 5, 2023, (the “Incentive Plan”).

The Incentive Plan authorizes the issuance of up to 8,625,000 shares of common stock.

2 unchanged sentences

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

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

As of September 30, 2023 , there were 0 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 Six Months Ended June 30, 2023 and 2022 (Unaudited)

For the Nine Months Ended September 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

Nine Months Ended

September 30,

Payroll and related expenses

Three Months Ended

September 30,

Payroll and related expenses

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

Six Months Ended

Nine Months Ended

September 30,

Stock options

1 unchanged sentence

Three Months Ended

September 30,

Stock options

1 unchanged sentence

Stock-Based Option Awards

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

The Company has issued no stock-based options during the nine months ended September 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.

3 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Nine Months Ended September 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:

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

Weighted Average Fair Value Per Share

3 unchanged sentences

Outstanding – December 31, 2022

Outstanding – June 30, 2023

Outstanding – September 30, 2023

Exercisable – December 31, 2022

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.

Exercisable – September 30, 2023

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

For the nine months ended September 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 June 30, 2023, there was no unrecognized compensation costs related to non-vested stock options and all options have been expensed.

As of September 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 June 30, 2023 was $ 0.95 per share.

The fair value of the stock price at September 30, 2023 was $ 0.60 per share.

Restricted Stock Units

13 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Nine Months Ended September 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.

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

For the three months ended September 30, 2023 and 2022 , the Company recognized stock-based compensation of $ 0 and $ 594,694 related to restricted stock units.

For the nine months ended September 30, 2023 and 2022 , the Company recognized stock-based compensation of $ 3,210,631 and $ 1,874,857 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 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:

As of September 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 nine months ended September 30, 2023 :

Number of Shares

1 unchanged sentence

Forfeited/Expired

Non-vested balance at June 30, 2023

Non-vested balance at September 30, 2023

Commitm ents and Contingencies

21 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

Commitm ents and Contingencies (continued)

53 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

Commitments and Contingencies (continued)

51 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

Commitments and Contingencies (continued)

34 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

Commitments and Contingencies (continued)

2 unchanged sentences

Safe & Green Holdings Corp.

On March 15, 2023, the Company commenced an action against two shareholders, John William Shaw and Leo Patrick Shaw, in the United States District Court for the Southern District of New York, captioned Safe and Green Holdings Corp.

Shaw et al., 1:23-cv-02244, for violations of the short swing profit rule pursuant to Section 16(b) of the Securities and Exchange Act of 1934.

On March 15, 2023, the Company commenced an action against two shareholders, John William Shaw and Leo Patrick Shaw (the “Shaw Stockholders” ), in the United States District Court for the Southern District of New York, captioned Safe and Green Holdings Corp.

Shaw et al., 1 :

23 -cv- 02244 , for violations of the short swing profit rule pursuant to Section 16 (b) of the Securities and Exchange Act of 1934 .

On September 26, 2023, the Company entered into a settlement agreement with (the “Shaw Stockholders”) resolving this lawsuit pursuant to which the Company received a three-month irrevocable proxy from the Shaw Stockholders giving the Company the right to vote the shares of common stock held by them.

Upon payment of $ 10,000 , the Company may extend for 45 days the expiration date of the irrevocable proxies.

In April 2020, the Company entered into an amendment to its employment agreement, dated January 1, 2017, with Paul Gavin (the "Amendment"), to extend the term of employment to December 31, 2021, provide for an annual base salary of $400,000 provide for a performance bonus structure for a bonus of up to 50% of base salary upon the Company’s achievement of $2,000,000 EBITDA and additional performance bonus payments for the achievement of EBITDA in excess of $2,000,000 based on a percentage of the incremental increase in EBITDA (ranging from 10% of the incremental increase in EBITDA if the Company achieves over $2,000,000 and up to $7,000,000 in EBITDA, 8% of the incremental increase in EBITDA if the Company achieves over $7,000,000 and up to $12,000,000 in EBITDA and 3% of the incremental increase in EBITDA over $12,000,000), provide for a profits-based additional bonus of up to $250,000 in certain limited circumstances, and provide for one (1) year severance, plus a pro-rated amount of any unpaid bonus earned by him during the year as verified by the Company’s principal financial officer, if Mr.

1 unchanged sentence

At the Company’s option, up to fifty (50%) percent of the EBITDA performance bonuses may be paid in restricted stock units if then available for grant under the Company’s Incentive Plan.

On July 5, 2022, the Company entered into an amendment to its employment agreement, dated January 1, 2017, as amended, with Paul Galvin, to provide for the payment of an annual base salary of $ 500,000 and on September 19, 2023 the agreement was amended to increase the annual base salary to $ 750,000 .

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

5 unchanged sentences

She is also bound by confidentiality provisions.

During July 2023, Ms.

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

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.

The Company has evaluated all events or transactions that occurred after September 30, 2023 through November 14, 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.

On October 5, 2023, at the Company’s Special Meeting of Stockholders (the “Special Meeting”), the Company’s stockholders approved an amendment (the “Amendment”) to the Safe & Green Holdings Corp.

Stock Incentive Plan (the “Plan”).

The Amendment increased the total number of shares of the Company’s common stock authorized for issuance under the Plan by 5,000,000 shares to 8,625,000 shares.

The material terms and conditions of the Plan are described in the Company’s definitive proxy statement filed with the Securities and Exchange Commission on September 6, 2023 (the “Proxy Statement”).

On October 16, 2023, the Company filed a Certificate of Amendment to its Certificate of Incorporation (the “Certificate of Amendment”) with the Secretary of State of Delaware that increased the number of the Company’s authorized shares of common stock, $ 0.01 par value per share, from 25,000,000 shares to 75,000,000 shares.

This Certificate of Amendment was approved by the Company’s stockholders at the Company’s 2023 Special Meeting.

As previously disclosed, the Company had notified William Rogers that his employment agreement (the “Employment Agreement”) with the Company would not be renewed for a full one -year term upon its expiration on September 26, 2023 ;

however, the Company had 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.

The Company anticipated that, upon the expiration of his Employment Agreement, Mr.

Rogers would continue to be employed by the Company as an employee-at-will.

On October 20, 2023, the Company and Mr.

Rogers entered into a mutual settlement and release agreement (the “Release Agreement”) in order to resolve any and all claims and disputes between them, including but not limited to, claims arising under the Employment Agreement.

Pursuant to the terms of the Release Agreement, (i) the Company agreed to pay Mr.

Rogers a settlement payment equal to $ 75,000 for his lost vacation, life insurance and related costs through December 31, 2023;

(ii) the parties agreed to extend Mr.

Roger’s Employment Agreement through December 31, 2023, at which point the Employment Agreement will end as a mutual termination;

(iii) the parties agreed that Mr.

Rogers’ title under the Employment Agreement will change from COO to Project Development Advisor and he will report to David Villarreal for the remaining term of the Employment Agreement and all other terms of the Employment Agreement will remain unchanged, including Mr.

Roger’s right to receive RSU’s and right to accrue additional vacation days;

(iv) Safe and Green Development Corporation, a majority-owned subsidiary of the Company (“DevCo”), and Mr.

Rogers will enter into a consulting agreement that will commence on January 1, 2024 (the “Consulting Agreement”);

(v) the parties acknowledged that Mr.

Rogers will be eligible for grants of equity awards under DevCo’s stock incentive plan;

(vi) the non-compete provisions of the Employment Agreement were extended through December 31, 2023;

(vii) the parties released each other from any and all claims and potential claims relating to or arising as a result of the Employment Agreement or any issues related thereto;

and (viii) the parties agreed not to disparage each other.

Simultaneously with the execution of the Release Agreement, Mr.

Rogers entered into the Consulting Agreement with DevCo.

The term of the Consulting Agreement will commence on January 1, 2024, will continue for a period of one year and will then convert to a rollover annual contract or on a month-to-month basis, as mutually agreed to be the parties.

Pursuant to the Consulting Agreement, Mr.

Rogers will provide advisory and consulting services for the construction of DevCo’s operational facility projects.

During the term of the Consulting Agreement, DevCo will pay Mr.

Rogers a monthly consulting fee of $ 15,000 .

In addition, the parties agreed that Mr.

Rogers shall invoice DevCo for time spent over 60 hours per month providing such consulting services, at a rate of $ 250 per hour.

In addition, during the term of the Consulting Agreement, DevCo will (i) pay to Mr.

Rogers the per month costs to cover his COBRA expenses, and (ii) reimburse Mr.

Rogers for his reasonable and necessary out-of-pocket expenses incurred in performing the consulting services.

The Consulting Agreement also provides that Mr.

Rogers will be entitled to receive and that DevCo will issue, subject to board approval, grants of restricted stock unit awards.

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