What changed in this filing

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Item 1A. Risk Factors

2023-11-14 compared with 2023-08-14 · 38 added, 23 removed, 66 unchanged (48% of the section changed)

7 unchanged sentences

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

At June 30, 2023 and December 31, 2022, we had cash and cash equivalents and a short-term investment, collectively, of $ 1,601,331 and $ 582,776 respectively.

However, during the six months ended June 30, 2023 and year ended December 31, 2022, we reported a net loss attributable to common stockholders of Safe & Green Holdings Corp.

At September 30, 2023 and December 31, 2022 , we had cash and cash equivalents and a short-term investment, collectively, of $ 712,906 and $ 582,776 respectively.

However, during the nine months ended September 30, 2023 and year ended December 31, 2022 , we reported a net loss attributable to common stockholders of Safe & Green Holdings Corp.

of $ 12,683,098 and $ 4,586,120 , respectively, and used $ 4,671,862 and $ 5,553,160 of cash for operations, respectively.

4 unchanged sentences

However, there can be no assurance that we will be able to secure additional funds if needed and that, if such funds are available, the terms or conditions would be acceptable to us.

In addition, our inability to currently utilize a short form registration statement on Form S-3 may impair our ability to obtain capital in a timely fashion.

If we are unable to secure additional financing, further reduction in operating expenses might need to be substantial in order for us to ensure enough liquidity to sustain our operations.

5 unchanged sentences

Our consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.

Our independent registered public accounting firm has expressed doubt about our ability to continue as a going concern .

The report of our independent registered public accounting firm contains a note stating that the accompanying financial statements have been prepared assuming we will continue as a going concern.

At December 31, 2022 and 2021, we had cash and cash equivalents and a short-term investment, collectively, of $582,776 and $13,024,381, respectively.

However, during the fiscal years ended December 31, 2022 and 2021, we reported a net loss of $7,089,242 and $5,908,372, respectively, and used $5,630,614 and $662,759 of cash for operations, respectively.

We have incurred losses since inception, have negative working capital of $ (9,280,961) as of September 30, 2023 and have negative operating cash flows, which has raised substantial doubt about our ability to continue as a going concern.

We expect our current cash and the proceeds from anticipated financings to be sufficient for working capital until we are cash flow positive, which we believe will be in the first half of 2024.

The loss of one or a few customers could have a material adverse effect on us.

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

For example, for the six months ended June 30, 2023 approximately 96% of our revenue was generated from one customer and for the year ended December 31, 2022, approximately 65% of our revenue was generated from three customers.

For example, for the nine months ended September 30, 2023 approximately 96 % of our revenue was generated from one customer and for the year ended December 31, 2022 , approximately 65 % of our revenue was generated from three customers.

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

6 unchanged sentences

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

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.

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

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

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

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

4 unchanged sentences

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

As of December 31, 2022, our backlog totaled approximately $6.8 million and as of June 30, 2023, our backlog totaled approximately $2.2 million.

As of December 31, 2022, our backlog totaled approximately $ 6.8 million and as of September 30, 2023 , our backlog totaled approximately $3.8 million.

Our backlog is described more in detail in “Note 11 —Construction Backlog” of the notes to our consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

9 unchanged sentences

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

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

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

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

Because we had a net loss as of September 30, 2023 , we are prohibited from including potential shares of common stock in the computation of diluted per share amounts.

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

At June 30, 2022, there were options, including options to non-employees and non-directors, restricted stock units and warrants to purchase 36,436, 2,245,186 and 2,025,520 shares of common stock, respectively, outstanding that could potentially dilute future net income per share.

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

We are authorized to issue 25,000,000 shares of common stock, of which approximately 16,016,107 shares of common stock were issued and outstanding as August 11, 2023.

At June 30, 2023, 48,312 common shares were reserved for issuance of shares upon exercise of outstanding options, restricted stock units or reserved for future issuance of common shares under our equity incentive plans, 2,466,667 common shares were reserved for the conversion of notes and 2,525,020 common shares were reserved for exercise of warrants.

If all of these securities were exercised it would leave approximately 3,943,894 million authorized but unissued shares of common stock.

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

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

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

At September 30, 2022 , there were options, including options to non-employees and non-directors, restricted stock units and warrants to purchase 36,436 , 2,245,186 and 2,025,520 shares of common stock, respectively, outstanding that could potentially dilute future net income per share.

If SG DevCorp were to default in its obligation to repay the loan received from BCV S&G it could adversely affect our investment in SG DevCorp.

To date, SG DevCorp has received $1,750,000 as a secured loan from BCV S&G, a Luxembourg-based specialized investment fund, and has entered into a loan agreement with BCV S&G DevCorp to receive up to $2,000,000 as a secured loan.

The loan matures on December 1, 2024 and is secured by 1,999,999 of our shares of SG DevCorp’s common stock.

The loan agreement, as amended, provides that 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 would be further secured by SG DevCorp’s St.

Mary’s industrial site.

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.

If SG DevCorp were to default in its obligation to repay the loan when due it could adversely affect our investment in SG DevCorp.

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

12 unchanged sentences

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

● difficulties protecting intellectual property;

● the effects of the war in the Middle East;

● longer payment cycles;

1 unchanged sentence

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

Unregistered Sales of Equity Securities and Use of Proceeds

None other than as set forth in our previous filings with the Securities and Exchange Commission.

Defaults Upon Senior Securities

Mine Safety Disclosures

Not applicable.

F ailure to meet NASDAQ’s continued listing requirements could result in the delisting of our common stock, negatively impact the price of our common stock and negatively impact our ability to raise additional capital .

On November 7, 2023, Safe & Green Holdings Corp.

(the “Company”) received a deficiency letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that for the preceding 30 consecutive business days (September 26, 2023 through November 6, 2023), the Company’s common stock did not maintain a minimum closing bid price of $1.00 (“Minimum Bid Price Requirement”) per share as required by Nasdaq Listing Rule 5550(a)(2).

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has a compliance period of 180 calendar days, or until May 6, 2024, to regain compliance with Nasdaq Listing Rule 5550(a)(2).

Compliance may be achieved automatically and without further action if the closing bid price of the Company’s common stock is at or above $1.00 for a minimum of ten consecutive business days at any time during the 180-day compliance period, in which case Nasdaq will notify the Company of its compliance and the matter will be closed.

If, however, the Company does not achieve compliance with the Minimum Bid Price Requirement by May 6, 2024, the Company may be eligible for additional time to comply.

In order to be eligible for such additional time, the Company will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the Minimum Bid Price Requirement, and must notify Nasdaq in writing of its intention to cure the deficiency during the second compliance period.

The Company intends to actively monitor the bid price of its common stock and will consider available options to regain compliance with the Nasdaq listing requirements, including such actions as effecting a reverse stock split to maintain its Nasdaq listing.

If we cannot regain compliance with the Minimum Bid Price Requirement , our common stock will be subject to delisting.

If that were to occur, our common stock would be subject to rules that impose additional sales practice requirements on broker-dealers who sell our securities.

The additional burdens imposed upon broker-dealers by these requirements could discourage broker-dealers from effecting transactions in our common stock.

This would adversely affect the ability of investors to trade our common stock and would adversely affect the value of our common stock.

These factors could contribute to lower prices and larger spreads in the bid and ask prices for our common stock.

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

What changed 10-Q

Item 1A. Risk Factors