8 unchanged sentences
Risks Relating to our Financial Position and Capital Requirements.
−Removed: 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.
+Added: From time to time, we have, and may in the future experience a shortfall in cash, and our ability to obtain additional financing on acceptable terms, if at all, may be limited.
+Added: 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, will be limited.
At December 31, 2023 and 2022 , we had cash and cash equivalents and a short-term investment, collectively, of $ 17,448 and $ 582,776 , respectively.
However, during the fiscal years ended December 31, 2023 and 2022 , we reported a net loss of $ 26,757,906 and $ 7,089,242 , respectively, and used $ 7,141,754 and $ 5,630,614 of cash for operations, respectively.
−Removed: If we are not successful with our efforts to increase revenue, we could experience a shortfall in cash over the next twelve months.
−Removed: If there is a shortfall, we may be forced to reduce operating expenses, among other steps, all of which would have a material adverse effect on our operations going forward.
+Added: As result of our continued losses, our cash resources have not been sufficient to sustain our operations, and we have continued to depend on financing transactions to generate sufficient cash to stay in operation.
+Added: With limited cash available to fund our operating expenses, we have deferred or delayed payments to vendors, suppliers and service providers, opting instead to prioritize payments for personnel and essential resources.
+Added: Although we are attempting to curtail our expenses, there is no guarantee that such curtailment will cure our liquidity problem.
+Added: On December 15, 2023, Mr.
+Added: Galvin voluntarily deferred his salary for the December 15, 2023 and December 31, 2023 pay periods as a cost saving measure.
+Added: In addition, on December 14, 2023, Mr.
+Added: Galvin loaned $75,000 to the Company.
+Added: The loan will be interest free (subject, however to any interest which may be imputed under applicable income tax laws) and is due and payable by December 14, 2024.
+Added: Our cash used in operations for the year ended December 31, 2023 was $(6,722,435) primarily due to our net loss.
+Added: During the year ended December 31, 2023, we financed our operations from proceeds of short-term notes payables and warrants.
+Added: Subsequent to the end of the quarter we have continued to finance our operations form the issuance of notes such as the Debentures in addition to cash advance agreements such as the Cash Advance Agreement pursuant to which SG Building and SG Echo, LLC sold to the lender $300,000 of their future receivables for a purchase price of $200,000, less underwriting fees and expenses paid, for net funds provided of $190,000.
+Added: Unless and until we are able to increase our revenues or raise sufficient capital, our lack of cash will continue to constrain our business and subject us to significant risks, including the following:
+Added: (i) being unable to make the necessary investment in personnel, raw materials or other resources to effectively pursue our business plan, (ii) our suppliers, vendors and service providers slowing down or stopping to supply raw materials or services, and (iii) being forced to reduce or suspend our operations.
+Added: Any delay in the receipt of raw materials due to payment issues could result in our inability to fulfill purchase orders and negatively impact our ability to generate revenue.
+Added: In March of 2024, the Company laid off approximately 65 employees of SG Echo.
+Added: These employes are being brought back to work in April of 2024, starting with 10 employees re-hired as of April 8,2024 and 30 employees are scheduled to return to work between April 15th and April 30th, 2024.
We may also seek to obtain debt or additional equity financing to meet any cash shortfalls both in the public company or our subsidiaries.
1 unchanged sentence
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, especially in light of the fact that our ability to sell securities registered on our registration statement on Form S- 3 will be limited until such time the market value of our voting securities held by non-affiliates is $ 75 million or more.
−Removed: 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.
+Added: If we are unable to secure additional financing, a further reduction in operating expenses might need to be substantial in order for us to ensure enough liquidity to sustain our operations.
Any equity financing would be dilutive to our stockholders.
2 unchanged sentences
Any of the above limitations could force us to significantly curtail or cease our operations, and you could lose all of your investment in our common stock.
−Removed: These circumstances have raise substantial doubt about our ability to continue as a going concern, and continued cash losses may risk our status as a going concern.
+Added: These circumstances have raised substantial doubt about our ability to continue as a going concern, and continued cash losses may risk our status as a going concern.
Our consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.
2 unchanged sentences
At December 31, 2023 and 2022 , we had cash and cash equivalents and a short-term investment, collectively, of $ 17,448 and $ 582,776 , respectively.
−Removed: 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.
+Added: During the fiscal years ended December 31, 2023 and 2022 , we reported a net loss of $ 26,757,906 and $ 7,089,242 , respectively, and used $ 6,722,435 and $ 5,630,614 of cash for operations, respectively.
Until we begin generating sufficient revenue, there is a doubt about our ability to continue as a going concern through December 31, 2024.
10 unchanged sentences
Each business is subject to all of the risks associated with a new business.
−Removed: An impairment of goodwill could have a material adverse effect on our financial condition and results of operations.
−Removed: As December 31, 2022, we had $1,309,330 of goodwill.
−Removed: We perform an impairment test of our goodwill annually during the fourth quarter of our fiscal year or when events occur or circumstances change that would more-likely-than-not indicate that goodwill might be impaired.
+Added: An impairment of goodwill has had a material adverse effect on our financial condition and results of operations.
+Added: As December 31, 2023 , our goodwill has been fully impaired.
+Added: We performed an impairment test of our goodwill annually during the fourth quarter of our fiscal year or when events occur or circumstances change that would more-likely-than-not indicate that goodwill might be impaired.
Factors that may be considered a change in circumstances, indicating that the carrying value of our goodwill may not be recoverable, include a decline in stock price and market capitalization, reduced future cash flow estimates and slower growth rates in our industry.
−Removed: Our annual impairment tests resulted in no impairment of goodwill during fiscal 2022 and fiscal 2021 .
+Added: Our annual impairment tests resulted in $1,309,330 impairment of goodwill during fiscal 2023 and $0 during fiscal 2022 .
Deterioration in estimated future cash flows in our reporting unit could result in further future goodwill impairment.
2 unchanged sentences
If we or our subsidiaries are unable to raise capital when needed, we would be compelled to delay, reduce or eliminate our development or commercialization efforts.
−Removed: We expect to incur significant development expenses related to SG DevCorp.
−Removed: operations as well as our other operations.
Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations.
6 unchanged sentences
Our failure to timely register the shares of our common stock issuable under the Debenture and the Warrant we issued to Peak One Opportunity Fund, L.P.
−Removed: could have a material adverse effect on our business, financial condition, results of operations and cash flows.
−Removed: On February 7, 2023, we closed a private placement offering of $1,100,000 in principal amount of an 8% convertible debenture (the “Debenture”) and a warrant (the “Warrant”) to purchase up to Five Hundred Thousand (500,000) shares of the Company’s common stock, with Peak One Opportunity Fund, L.P.
+Added: and Warrants we issued in March pursuant to the warrant inducement transaction could have a material adverse effect on our business, financial condition, results of operations and cash flows.
+Added: On February 7, 2023, we closed a private placement offering of $ 1,100,000 in principal amount of an 8 % convertible debenture (the “Debenture”) and a warrant (the “Warrant”) to purchase up to Five Hundred Thousand ( 500,000 ) shares of the Company’s common stock (25,000 as adjusted for the May Stock Split) , with Peak One Opportunity Fund, L.P.
(“Peak One ”) for gross proceeds of $ 1,000,000 .
2 unchanged sentences
The acceleration of the Debenture issued to Peak One could have a material adverse effect on our business, financial condition, results of operations and cash flows.
−Removed: 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.
−Removed: We are authorized to issue 25,000,000 shares of common stock, of which approximately 12,613,978 shares of common stock are issued and outstanding and there are outstanding options and warrants to purchase 36,436 and 2,025,520 shares of common stock, respectively, in addition to 3,212,504 vested and unvested restricted stock units.
−Removed: If all of these securities were exercised it would leave 7,111,562 authorized but unissued shares of common stock.
−Removed: 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.
−Removed: Accordingly, we will likely take steps in the near future to increase our number of available shares, which may include seeking stockholder approval of an increase in our authorized number of shares of common stock or a reverse stock split.
−Removed: Risks Relating to our Company
−Removed: Our residential construction business is difficult to evaluate because we changed our business model in June 2021 and have a limited operating history and limited information.
−Removed: In 2021 we terminated our licensing business model for our residential construction business in the United States and are currently developing and constructing our own residential developments.
−Removed: In 2019 we had entered into one license agreement for use of our technology for construction of residences in the United States.
−Removed: We terminated this license agreement in June 2021.
−Removed: There is a risk that we will be unable to successfully generate income from our new business model.
−Removed: Although we believe that we will experience increased revenue, there can be no assurance that we will not experience increased costs and generate less income with this new business model than we anticipate.
−Removed: We are subject to many risks associated with currently developing and constructing our own residential developments, such as our dependence upon third parties to provide services and supply required materials.
−Removed: Even if we generate increased revenue as anticipated, there can be no assurance that we will be profitable.
−Removed: We are subject to the risks inherent to the operation of a new business enterprise, and cannot assure you that we will be able to successfully address these risks.
Our ability to meet our workforce needs is crucial to our results of operations and future sales and profitability.
5 unchanged sentences
Significant increases in manufacturing workforce costs could materially adversely affect our business, financial condition or results of operations.
+Added: Our workforce may not be sufficient to complete orders due to recent layoffs.
+Added: In March 2024, we laid off approximately 65 employees of SG Echo and are currently operating our business with a significantly reduced work force.
+Added: These employes are being brought back to work in April of 2024, starting with 10 employees re-hired as of April 8,2024 and 30 employees are scheduled to return to work between April 15th and April 30th, 2024.
We have a fixed cost base that will affect our profitability if our sales decrease.
34 unchanged sentences
We are dependent on the services of key personnel, and the unexpected loss of their services may adversely affect our operations.
−Removed: Our success depends highly upon the personal efforts and abilities of our senior management team, specifically the efforts of Paul M.
−Removed: Galvin, our Chief Executive Officer and Acting Chief Financial Officer and William Rogers, our Chief Operations Officer.
−Removed: The Company has entered into employment agreements with Messrs.
−Removed: Galvin and Rogers.
−Removed: The employment agreements with Messrs.
−Removed: Galvin and Rogers each provide for two-year terms, with automatic renewal after the end of such term.
−Removed: The loss of the services of one or more of these individuals could have a material adverse effect on our business.
−Removed: Our ability to achieve profitability and generate increased revenue will depend upon our ability to retain, and, if necessary, attract experienced management personnel.
+Added: Our success depends highly upon the personal efforts and abilities of our executive officers and management team, which is comprised of a small number of people.
+Added: The loss of the services of any of our executive officers or members of our management team could have a material adverse effect on our business.
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.
−Removed: At December 31, 2022 and 2021, 80% and 78%, respectively, of the our gross accounts receivable were due from one and three customers.
−Removed: Revenue relating to two and three customers represented approximately 65% and 80% of our total revenue for the years ended December 31, 2022 and 2021, respectively.
+Added: At December 31, 2023 and 2022 , 100% and 80 %, respectively, of the our gross accounts receivable were due from three and four customers.
+Added: Revenue relating to one customer represented approximately 87% and 65 % of our total revenue for the years ended December 31, 2023 and 2022 , respectively.
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.
23 unchanged sentences
If we are unable to protect and maintain our intellectual property rights, or if there are any successful intellectual property challenges or infringement proceedings against us, our business and revenue could be materially and adversely affected.
−Removed: Risks Relating to our Business and Industry
−Removed: 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.
−Removed: Our operations and performance depend on global, regional and U.S.
−Removed: economic and geopolitical conditions.
−Removed: General worldwide economic conditions have experienced significant instability in recent years including the recent global economic uncertainty and financial market conditions.
−Removed: Russia’s invasion and military attacks on Ukraine have triggered significant sanctions from U.S.
−Removed: and European leaders and financial markets around the world experienced volatility following the invasion of Ukraine by Russia in February 2022.
−Removed: Resulting changes in U.S.
−Removed: trade policy and European policies could trigger retaliatory actions by Russia, its allies and other affected countries, including China, resulting in a “trade war.” Furthermore, if other countries, including the U.S., become further involved in the conflict, we could face significant adverse effects to our business and financial condition.
−Removed: The uncertain financial markets, disruptions in supply chains, mobility restraints, and changing priorities as well as volatile asset values could impact our business in the future.
−Removed: The COVID-19 outbreak and government measures taken in response to the pandemic have also had a significant impact, both direct and indirect, on businesses and commerce, as worker shortages have occurred;
−Removed: supply chains have been disrupted;
−Removed: facilities and production have been suspended;
−Removed: and demand for certain goods and services, such as medical services and supplies, have spiked, while demand for other goods and services, such as travel, have fallen.
−Removed: The future progression of the pandemic and its effects on our business and operations are uncertain.
−Removed: In addition, the outbreak of a pandemic could disrupt our operations due to absenteeism by infected or ill members of management or other employees, or absenteeism by members of management and other employees who elect not to come to work due to the illness affecting others in our office or laboratory facilities, or due to quarantines.
−Removed: Pandemics could also impact members of our Board of Directors resulting in absenteeism from meetings of the directors or committees of directors,and making it more difficult to convene the quorums of the full Board of Directors or its committees needed to conduct meetings for the management of our affairs.
−Removed: Further, due to increasing inflation, operating costs for many businesses including ours have increased and, in the future, could impact demand or pricing of our services or services providers, foreign exchange rates or employee wages.
−Removed: Inflation rates, particularly in the United States, have increased recently to levels not seen in years, and increased inflation may result in increases in our operating costs (including our labor costs), reduced liquidity and limits on our ability to access credit or otherwise raise capital.
−Removed: In addition, the Federal Reserve has raised, and may again raise, interest rates in response to concerns about inflation, which coupled with reduced government spending and volatility in financial markets may have the effect of further increasing economic uncertainty and heightening these risks.
−Removed: Actual events involving reduced or limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds, have in the past and may in the future lead to market-wide liquidity problems.
−Removed: For example, on March 10, 2023, Silicon Valley Bank, was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation as receiver.
−Removed: Although we did not have any cash or cash equivalent balances on deposit with Silicon Valley Bank, uncertainty and liquidity concerns in the broader financial services industry remain and the failure of Silicon Valley Bank and its potential near- and long-term effects on the biotechnology industry and its participants such as our vendors, suppliers, and investors, may also adversely affect our operations and stock price.
−Removed: We are actively monitoring the effects these disruptions and increasing inflation could have on our operations.
−Removed: These conditions make it extremely difficult for us to accurately forecast and plan future business activities.
+Added: Risks Relating to our Business
+Added: Our residential construction business is difficult to evaluate because we changed our business model in June 2021 and have a limited operating history and limited information.
+Added: In 2021 we terminated our licensing business model for our residential construction business in the United States and are currently developing and constructing our own residential developments.
+Added: In 2019 we had entered into one license agreement for use of our technology for construction of residences in the United States.
+Added: We terminated this license agreement in June 2021.
+Added: There is a risk that we will be unable to successfully generate income from this business model.
+Added: Although we believe that we will experience increased revenue, there can be no assurance that we will not experience increased costs and generate less income with this new business model than we anticipate.
+Added: We are subject to many risks associated with currently developing and constructing our own residential developments, such as our dependence upon third parties to provide services and supply required materials.
+Added: Even if we generate increased revenue as anticipated, there can be no assurance that we will be profitable.
+Added: We are subject to the risks inherent to the operation of a new business enterprise, and cannot assure you that we will be able to successfully address these risks.
+Added: Our ability to meet our workforce needs is crucial to our results of operations and future sales and profitability.
+Added: We rely on the existence of an available hourly workforce to manufacture our products.
+Added: We cannot assure you that we will be able to attract and retain qualified employees to meet current or future manufacturing needs at a reasonable cost, or at all.
+Added: Also, although none of our employees are currently covered by collective bargaining agreements, we cannot assure you that our employees will not elect to be represented by labor unions in the future.
+Added: Additionally, competition for qualified employees could require us to pay higher wages to attract a sufficient number of employees.
+Added: Significant increases in manufacturing workforce costs could materially adversely affect our business, financial condition or results of operations.
+Added: Given our fixed cost base our profitability is highly sensitive to changes in sales volume and production levels.
+Added: The fixed cost levels of operating SG Echo can put pressure on profit margins when sales volume and/or production levels decline.
+Added: Our profitability depends, in part, on our ability to spread fixed costs over a sufficiently large number of products sold and shipped, and if we make a decision to reduce our rate of production, gross or net margins could be negatively affected.
+Added: Consequently, decreased demand or the need to reduce production can lower our ability to absorb fixed costs and materially impact our financial condition or results of operations.
+Added: A material disruption at our suppliers’ facilities or Echo’s facilities could prevent us from meeting customer demand, reduce our sales and negatively affect our overall financial results.
+Added: Any of the following events could cease or limit operations unexpectedly:
+Added: fires, floods, earthquakes, hurricanes, on-site or off-site environmental incidents or other catastrophes;
+Added: global pandemic;
+Added: supply chain disruptions;
+Added: utility and transportation infrastructure disruptions;
+Added: labor difficulties;
+Added: other operational problems;
+Added: or war, acts of terrorism or other unexpected events.
+Added: Any downtime or damage at our suppliers’ facilities or SG Echo’s facilities could prevent us from meeting customer demand for our products or require us to make more expensive purchases from a competing supplier.
+Added: If our suppliers were to incur significant downtime, our ability to satisfy customer requirements could be impaired, resulting in customers seeking products from other distributors, as well as decreased customer satisfaction and lower sales and operating income.
+Added: A natural disaster, the effects of climate change, or other disruptions at our Echo facilities could adversely affect our business, financial condition, and results of operations.
+Added: We rely on the continuous operation of our SG Echo facilities, both of which are located in Durant, Oklahoma, for the production of our Modules.
+Added: Any natural disaster or other serious disruption to our facility due to fire, flood, earthquake, or any other unforeseen circumstance would adversely affect our business, financial condition, and results of operations.
+Added: In addition, adverse weather conditions, such as increased frequency and/or severity of storms, or floods could impair our ability to operate by damaging our facilities and equipment or restricting product delivery to customers.
+Added: The occurrence of any disruption at our manufacturing facilities, even for a short period of time, may have an adverse effect on our productivity and profitability, during and after the period of the disruption.
+Added: These disruptions may also cause personal injury and loss of life, severe damage to or destruction of property and equipment, and environmental damage.
+Added: Although we maintain property, casualty, and business interruption insurance of the types and in the amounts that we believe are customary for the industry, we are not fully insured against all potential natural disasters or other disruptions to our manufacturing facility.
+Added: We are dependent on our executive officers and management team, and the unexpected loss of their services may adversely affect our operations.
+Added: Our success depends highly upon the personal efforts and abilities of our executive officers and management team, which is comprised of a small number of people.
+Added: The loss of the services of any of our executive officers or members of our management team could have a material adverse effect on our business.
+Added: The loss of one or a few customers could have a material adverse effect on us.
+Added: 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.
+Added: At December 31, 2023 and 2022, 100% and 80%, respectively, of the our gross accounts receivable were due from three and four customers.
+Added: For the year ended December 31, 2023 and 2022, 87% and 65% of our revenue was from one customer.
+Added: 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.
+Added: The loss of business from a significant customer could have a material adverse effect on our business, financial condition, results of operations and cash flows.
+Added: We rely on certain vendors to supply us with materials and products that, if we were unable to obtain, could adversely affect our business.
+Added: We have relationships with key materials vendors, and we rely on suppliers for our purchases of products from them.
+Added: Any inability to obtain materials or services in the volumes required and at competitive prices from our major trading partners, the loss of any major trading partner or the discontinuation of vendor financing (if any) may seriously harm our business because we may not be able to meet the demands of our customers on a timely basis in sufficient quantities or at all.
+Added: Other factors, including reduced access to credit by our vendors resulting from economic conditions, may impair our vendors’ ability to provide products in a timely manner or at competitive prices.
+Added: We also rely on other vendors for critical services such as transportation, supply chain and professional services.
+Added: Any negative impacts to our business or liquidity could adversely impact our ability to establish or maintain these relationships.
+Added: There were no vendors representing 10% or more of our total cost of revenue for the years ended December 31, 2023 or 2022.
+Added: We currently are, and may in the future be, subject to legal proceedings or investigations, the resolution of which could negatively affect our profitability and cash flows in a particular period.
+Added: The nature of our operations exposes us to possible litigation claims, including disputes relating to our operations and commercial and contractual arrangements.
+Added: Often the litigation matters are not totally within our control.
+Added: We will contest these matters vigorously and will make insurance claims where appropriate, but because of the uncertain nature of litigation and coverage decisions, we cannot predict the outcome of these matters.
+Added: The costs associated with litigation matters could have a material adverse effect on our financial condition and profitability.
+Added: In addition, our profitability or cash flow in a particular period could be affected by an adverse ruling in any litigation currently pending in the courts or by litigation that may be filed against us in the future.
+Added: We are also subject to government regulation, which could result in administrative proceedings in the future.
+Added: We may have difficulty protecting our proprietary manufacturing processes, which could adversely affect our ability to compete.
+Added: We use a proprietary manufacturing process that allows us to be code-compliant in our Safe & Green™ product.
+Added: Such manufacturing process is unique to the construction industry and is important to ensure our continued success, and we cannot assure you that our efforts to protect our proprietary rights will be sufficient or effective.
+Added: If other companies replicate our methodology, we could lose our competitive advantage.
+Added: Any future patent or trademark applications may not lead to issued patents and registered trademarks in all instances.
+Added: We also cannot be assured that the scope of any patents issued in the future will be sufficiently broad to offer meaningful protection.
+Added: Others may develop or patent similar or superior technologies, products or services, and our intellectual property rights may be challenged, invalidated, misappropriated or infringed by others.
+Added: If we are unable to protect and maintain our intellectual property rights, or if there are any successful intellectual property challenges or infringement proceedings against us, our business and revenue could be materially and adversely affected.
We depend on third parties for transportation services, and limited availability or increases in costs of transportation could adversely affect our business and operations.
17 unchanged sentences
Backlog may fluctuate significantly due to the timing of orders or awards for large projects and is not necessarily indicative of future backlog levels or the rate at which backlog will be recognized as revenue.
−Removed: 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 December 31, 2023 , our backlog totaled approximately $1 .9 million.
−Removed: The increase in backlog at December 31, 2022 from December 31, 2021 is primarily attributable to one contract in the amount of $5.7 million entered into during 2022.
−Removed: Our backlog is described more in detail in “Note 13 —Construction Backlog” of the notes to our consolidated financial statements included elsewhere in this Annual Report.
+Added: The decrease in backlog at December 31, 2023 from December 31, 2022 is primarily attributable to revenue being recognized during the year ended December 31, 2023.
+Added: Our backlog is described more in detail in “Note 14 —Construction Backlog” of the notes to our consolidated financial statements included in this Annual Report.
We cannot provide assurance that our backlog will be realized as revenues in the amounts reported or, if realized, will result in profits.
6 unchanged sentences
Additionally, our performance of our individual contracts can affect greatly our gross margins and, therefore, our future profitability.
−Removed: We can provide no assurance that the contracts in backlog, assuming they produce revenues in the amounts currently estimated, will generate gross margins at the rates we have realized in the past.
+Added: We can provide no assurance that the contracts in backlog, assuming they produce revenues in the amounts currently estimated, will generate gross margins at the rates realized in the past.
Our liability for estimated warranties may be inadequate, which could materially adversely affect our business, financial condition and results of operations.
5 unchanged sentences
Although we expect all of our associates (i.e., employees), officers and directors to comply at all times with all applicable laws, rules and regulations, there are instances in which subcontractors or others through whom we do business may engage in practices that do not comply with applicable regulations or guidelines.
−Removed: It is possible that our associates may become aware of these practices but do not take steps to prevent them.
−Removed: If we learn of practices relating to buildings constructed on our behalf that do not comply with applicable regulations or guidelines, we will move actively to stop the non-complying practices as soon as possible, and we will take disciplinary action with regard to our associates who were aware of the practices, including in some instances terminating their employment.
+Added: It is possible that our associates may become aware of these practices and not take steps to prevent them.
+Added: If we learn of practices relating to Modules constructed on our behalf that do not comply with applicable regulations or guidelines, we will move actively to stop the non-complying practices as soon as possible, and we will take disciplinary action with regard to our associates who were aware of the practices, including in some instances terminating their employment.
However, regardless of the steps we take, we may be subject to fines or other governmental penalties, and our reputation may be negatively affected.
−Removed: The cyclical and seasonal nature of the construction industry causes our revenues and operating results to fluctuate, and we expect this cyclicality and seasonality to continue in the future.
−Removed: The construction industry is highly cyclical and seasonal and is influenced by many international, national and regional economic factors, including the availability of consumer and wholesale financing, seasonality of demand, consumer confidence, interest rates, income levels and general economic conditions, including inflation and recessions.
−Removed: As a result of the foregoing factors, the revenues and operating results we derive from customers will fluctuate and we currently expect them to continue to fluctuate in the future.
−Removed: Moreover, we have experienced, and may continue to experience, operating losses during cyclical downturns in the construction market.
−Removed: These and other economic factors could have a material adverse effect on demand for our products and our financial condition and operating results.
−Removed: Our business depends on the construction industry and general business, financial market and economic conditions.
−Removed: The construction industry is cyclical and significantly affected by changes in general and local economic and real estate conditions, such as employment levels, consumer confidence, demographic trends, housing demand, inflation, deflation, interest rates and credit availability.
−Removed: Changes in these general and local economic conditions or deterioration in the broader economy could negatively impact the level of purchases, capital expenditures and creditworthiness of our indirect customers and suppliers, and, therefore, our royalty income and financial condition, results of operations and cash flows.
−Removed: Changes in these economic conditions may affect some of our regions or markets more than others.
−Removed: If adverse conditions affect our larger markets, they could have a proportionately greater impact on us than on some other companies.
−Removed: In addition, any uncertainty regarding global economic conditions such as raising gas prices may have an adverse effect on the results of operations and financial condition of us or our customers, distributors and suppliers, such as negative effects of currency exchange fluctuations.
−Removed: A shortage of labor in the construction industry could also have an impact on our financial results.
−Removed: Our business relies on private investment and a slower than expected economy may adversely affect our results.
−Removed: A significant portion of our sales are for projects with non-public owners, such as non-residential builders and home builders who make investments with private funds into their projects.
−Removed: Construction spending is affected by their customers’ ability to finance projects, which may be severely reduced due to rising interest rates .
−Removed: Residential and nonresidential construction could decline if companies and consumers are unable to finance construction projects or if the economy slows or is stalled, which could result in delays or cancellations of capital projects.
−Removed: If the economy slows, or if housing starts and nonresidential projects do not increase, sales of our products directly by us to consumers and related services may decline, and our financial position, results of operations and liquidity could be materially adversely affected.
−Removed: A material disruption at one of our suppliers’ facilities or Echo's facilities could prevent us from meeting customer demand, reduce our sales and negatively affect our overall financial results.
−Removed: Any of the following events could cease or limit operations unexpectedly:
−Removed: fires, floods, earthquakes, hurricanes, on-site or off-site environmental incidents or other catastrophes;
−Removed: global pandemic;
−Removed: utility and transportation infrastructure disruptions;
−Removed: labor difficulties;
−Removed: other operational problems;
−Removed: or war, acts of terrorism or other unexpected events.
−Removed: Any downtime or damage at our suppliers’ facilities or SG Echo's facilities could prevent us from meeting customer demand for our products or require us to make more expensive purchases from a competing supplier.
−Removed: If our suppliers were to incur significant downtime, our ability to satisfy customer requirements could be impaired, resulting in customers seeking products from other distributors, as well as decreased customer satisfaction and lower sales and operating income.
Environmental, health and safety laws and regulations and any changes to, or liabilities arising under, such laws and regulations could have a material adverse effect on our financial condition, results of operations and liquidity.
5 unchanged sentences
These laws and regulations may also expose us to liability for claims of personal injury or property or natural resource damage related to alleged exposure to, or releases of, regulated or hazardous materials.
−Removed: The existence of contamination at properties we own, lease or operate could also result in increased operational costs or restrictions on our ability to use those properties as intended, including for purposes of construction materials distribution.
−Removed: In addition, because our properties are generally situated adjacent to or near industrial companies, our properties may be at an increased risk of having environmental contaminants from other properties spill or migrate onto or otherwise affect our properties.
+Added: The existence of contamination at properties we or our subsidiaries own, lease or operate could also result in increased operational costs or restrictions on our ability to use those properties as intended, including for purposes of construction materials distribution.
+Added: In addition, because such properties are generally situated adjacent to or near industrial companies, such properties may be at an increased risk of having environmental contaminants from other properties spill or migrate onto or otherwise affect our properties.
Despite our compliance efforts, there is an inherent risk of liability in the operation of our business, especially from an environmental standpoint, and, from time to time, we may be in noncompliance with environmental, health and safety laws and regulations.
3 unchanged sentences
The cost of complying with such laws could have a material adverse effect on our financial condition, results of operations and liquidity.
−Removed: Our business may be subject to economic and political risks of operating and obtaining supplies from foreign countries, including adverse impact of changes in international trade and tariff policies.
−Removed: We operate in and source some of our products from outside of the United States, and our suppliers may also rely upon non-domestic products.
−Removed: As such, any significant changes to, among other things, the general political and social conditions in foreign counties in which we maintain operations or sourcing relationships, unfavorable changes in U.S.
−Removed: trade legislation and regulation, the outbreak of the COVID-19 coronavirus, the imposition of governmental economic sanctions on countries in which we do business or other trade barriers, threats of war, terrorism or governmental instability, labor disruptions, currency controls, fluctuating exchange rates with respect to contracts not denominated in U.S.
−Removed: dollars and unanticipated or unfavorable changes in government policies with respect to laws and regulations, anti-inflation measures and method of taxation.
−Removed: If we are unable to navigate foreign regulatory environments, or if we are unable to enforce our contract rights in foreign countries, our business could be adversely impacted.
−Removed: Any of these events could interrupt our business and cause operational disruptions, increase our costs of operations, reduce our sales or otherwise have an adverse effect on our operating performance.
−Removed: government has indicated its intent to alter its approach to trade policy, including, in some instances, to revise, renegotiate or terminate certain multilateral trade agreements.
−Removed: It has also imposed new tariffs on certain foreign goods and raised the possibility of imposing additional increases or new tariffs on other goods.
−Removed: Such actions have, in some cases, led to retaliatory trade measures by certain foreign governments.
−Removed: Such policies could make it more difficult or costly for us to do business in or procure products from those countries.
−Removed: In turn, we may need to raise prices or make changes to our operations, which could negatively impact our revenue or operating results.
−Removed: At this time, it remains unclear what additional actions, if any, will be taken by the U.S.
−Removed: government or foreign governments with respect to tariff and international trade agreements and policies, and we cannot predict future trade policy or the terms of any revised trade agreements or any impact on our business.
Our operating results will be subject to fluctuations and are inherently unpredictable.
In order to achieve profitability, we will need to generate and sustain higher revenue while maintaining reasonable cost and expense levels.
−Removed: In our most recent quarter, we experienced a loss.
+Added: We have incurred losses since inception.
We do not know if our revenue will grow, or if it will grow sufficiently to outpace our expenses, which we expect to increase as we expand our operational capacity.
4 unchanged sentences
Finally, our ability to meet project completion schedules for an individual project and the corresponding revenue impact under the percentage-of-completion method of recognizing revenue, may similarly cause large fluctuations in our revenue and other financial results.
−Removed: This may cause us to miss any future guidance announced by us.
+Added: This may cause us to miss guidance announced by us.
We base our planned operating expenses in part on our expectations of future revenue, and a significant portion of our expenses are fixed in the short-term.
3 unchanged sentences
We rely on various information technology systems to capture, process, store and report data and interact with customers, vendors and employees.
−Removed: Despite careful security and controls design, as the prevalence of cyber-attacks continues to increase, our information technology systems, and those of our third-party providers, could become subject to increased security threats, such as phishing and malware incidents.
+Added: Despite security and controls design, as the prevalence of cyber-attacks continues to increase, our information technology systems, and those of our third-party providers, could become subject to increased security threats, such as phishing and malware incidents.
Our security measures may be unable to prevent certain security breaches, and any such network, system, data or other breaches could result in misappropriation of sensitive data, transactional errors, theft of funds, business disruptions, loss of or damage to intellectual property, loss of customers and business opportunities, unauthorized access to or disclosure of confidential or personal information (which could cause a breach of applicable data protection legislation), regulatory fines, penalties or intervention, reputational damage, reimbursement or other compensatory costs and additional compliance costs, any of which could have a material adverse effect on our reputation, business, financial condition, results of operations and cash flows.
5 unchanged sentences
We could suffer adverse tax and other financial consequences if we are unable to utilize our net operating loss carryforwards.
−Removed: At December 31, 2022, we had tax net operating loss carry forwards totaling approximately $30.2 million.
+Added: At December 31, 2023 , we had tax net operating loss carry forwards totaling approximately $31.
The net operating loss expires beginning 2030 through 2037 for those losses generated in 2017 and prior years.
Approximately $18 million of such net operating losses will carry forward indefinitely and be available to offset up to 8 0 % of future taxable income each year.
−Removed: During 2020 , the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was passed, which temporarily removes such 80% limitation for years 2020 and 2019 .
At December 31, 2023 , we had a valuation allowance of approximately $ 13.2 million, primarily related to net operating loss carry forwards that are not more likely than not to be utilized due to an inability to carry back these losses in most states and short carry forward periods that exist in certain states.
If we are unable to use our net operating losses, we may be required to record charges or reduce our deferred tax assets, which could have an adverse effect on our results of operations.
−Removed: Risks Relating to the Construction Sector
−Removed: We are dependent upon third-party financing, and our financial condition and results of operations could be negatively affected if additional third-party financing for our customers does not become available
−Removed: Our business and earnings depend substantially on our ability to obtain financing for the development of their construction projects , which may be adversely impacted by rising interest rates.
+Added: Risks Relating to our Industry and Other Adverse Economic Conditions
+Added: Unfavorable global economic conditions, including any adverse macroeconomic conditions or geopolitical events could adversely affect our business, financial condition, results of operations or liquidity.
+Added: Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets.
+Added: The global credit and financial markets have experienced extreme volatility and disruptions in the past several years, including severely diminished liquidity and credit availability, rising inflation and monetary supply shifts, rising interest rates, labor shortages, declines in consumer confidence, declines in economic growth, increases in unemployment rates, recession risks, and uncertainty about economic and geopolitical stability.
+Added: Following the COVID-19 pandemic and in connection with geopolitical conflicts, global economic and business activities continue to face widespread uncertainties.
+Added: A severe or prolonged economic downturn, or additional global financial or political crises, could result in a variety of risks to our business, including our ability to raise additional capital when needed on acceptable terms, if at all.
+Added: The extent of the impact of these conditions on our operational and financial performance, including our ability to execute our business strategies and initiatives in the expected timeframe, as well as that of third parties upon whom we rely, will depend on future developments which are uncertain and cannot be predicted.
+Added: A weak or declining economy also could strain our suppliers, possibly resulting in supply disruption.
+Added: Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.
+Added: Furthermore, our stock price may decline due in part to the volatility of the stock market and the general economic downturn.
+Added: Events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.
+Added: For example, on March 10, 2023, Silicon Valley Bank, was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation as receiver.
+Added: Although we did not have any cash or cash equivalent balances on deposit with Silicon Valley Bank, uncertainty and liquidity concerns in the broader financial services industry remain.
+Added: While we do not have any direct operations in the Middle East, geopolitical tensions and ongoing conflicts in the region, particularly between Israel and Palestine, may lead to global economic instability and fluctuating energy prices that could materially affect our business.
+Added: It is not possible to predict the broader consequences of the Israel-Palestinian war, including related geopolitical tensions, and the measures and actions taken by other countries in respect thereof, which could materially adversely affect global trade, currency exchange rates, regional economies and the global economy.
+Added: The COVID-19 pandemic, or the future outbreak of any other highly infectious or contagious diseases, could materially and adversely impact our performance, financial condition, results of operations and cash flows.
+Added: Throughout 2021 and to date, the COVID-19 pandemic has severely impacted global economic activity and caused significant volatility and negative pressure in financial markets.
+Added: COVID-19 (or a future pandemic) could have material and adverse effects on our performance, financial condition, results of operations and cash flows due to, among other factors:
+Added: a complete or partial closure of, or other operational issues at, one or more of our facilities resulting from infection by one or more employees or government actions;
+Added: difficulty accessing equity and debt capital on attractive terms, or at all, and a severe disruption and instability in the global financial markets
+Added: difficulty obtaining capital necessary to fund business operations;
+Added: construction moratoriums by local, state or federal government authorities;
+Added: delays by applicable governmental authorities in providing the necessary authorizations to commence construction;
+Added: manufacturing and supply chain disruptions for materials sourced from other geographies which may be experiencing shutdowns and shipping delays.
+Added: The extent to which COVID-19 (or a future pandemic) impacts our operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence.
+Added: The cyclical and seasonal nature of the construction industry causes our revenues and operating results to fluctuate, and we expect this cyclicality and seasonality to continue in the future.
+Added: The construction industry is highly cyclical and seasonal and is influenced by many international, national and regional economic factors, including the availability of consumer and wholesale financing, seasonality of demand, consumer confidence, interest rates, income levels and general economic conditions, including inflation and recessions.
+Added: As a result of the foregoing factors, the revenues and operating results we derive from customers will fluctuate and we currently expect them to continue to fluctuate in the future.
+Added: Moreover, we have experienced, and may continue to experience, operating losses during cyclical downturns in the construction market.
+Added: These and other economic factors could have a material adverse effect on demand for our products and our financial condition and operating results.
+Added: Our business depends on the construction industry and general business, financial market and economic conditions.
+Added: The construction industry is significantly affected by changes in general and local economic and real estate conditions, such as employment levels, consumer confidence, demographic trends, housing demand, inflation, deflation, interest rates and credit availability.
+Added: Changes in these general and local economic conditions or deterioration in the broader economy could negatively impact the level of purchases, capital expenditures and creditworthiness of our indirect customers and suppliers, and, therefore, our royalty income and financial condition, results of operations and cash flows.
+Added: Changes in these economic conditions may affect some of our regions or markets more than others.
+Added: If adverse conditions affect our larger markets, they could have a proportionately greater impact on us than on some other companies.
+Added: In addition, any uncertainty regarding global economic conditions such as raising gas prices may have an adverse effect on the results of operations and financial condition of us or our customers, distributors and suppliers, such as negative effects of currency exchange fluctuations.
+Added: A shortage of labor in the construction industry could also have an impact on our financial results.
+Added: Our business relies on private investment and a slower than expected economy may adversely affect our results.
+Added: A significant portion of our sales are for projects with non-public owners, such as non-residential builders and home builders who make investments with private funds into their projects.
+Added: Construction spending is affected by their customers’ ability to finance projects, which may be severely reduced due to high interest rates.
+Added: Residential and nonresidential construction could decline if companies and consumers are unable to finance construction projects or if the economy slows or is stalled, which could result in delays or cancellations of capital projects.
+Added: If the economy slows, or if housing starts and nonresidential projects do not increase, sales of our products directly by us to consumers and related services may decline, and our financial position, results of operations and liquidity could be materially adversely affected.
+Added: Risks Relating to the Manufacturing and Construction
+Added: Our financial condition and results of operations could be negatively affected if additional third-party financing for our customers does not become available.
+Added: Our business and earnings depend substantially on our customers’ ability to obtain financing for the development of their construction projects .
The availability and cost of such financing is further dependent on the number of financial institutions participating in the industry, the departure of financial institutions from the industry, the financial institutions’ lending practices, the strength of the domestic and international credit markets generally, governmental policies and other conditions, all of which are beyond our control.
−Removed: In light of the current economic climate, some of our projects may not be successful in obtaining additional funds in a timely manner, on favorable terms or at all.
+Added: In light of the current economic climate, some of our customers’ projects may not be successful in obtaining additional funds in a timely manner, on favorable terms or at all.
The availability of borrowed funds, especially for construction financing, has been greatly reduced, and lenders may require project developers to invest increased amounts of equity in a project in connection with both new loans and the extension of existing loans.
18 unchanged sentences
Government regulations and legal challenges may delay the start or completion of our projects, increase our expenses or limit our building activities, which could have a negative impact on our operations.
−Removed: Various domestic and international rules and regulations concerning building, zoning, sales and similar matters apply to and/or affect the construction industry.
+Added: Various domestic rules and regulations concerning building, zoning, sales and similar matters apply to and/or affect the construction industry.
Governmental regulation affects construction activities, as well as sales activities, mortgage lending activities and other dealings with consumers.
2 unchanged sentences
In some areas, municipalities may enact growth control initiatives, which restrict the number of building permits available in a given year.
−Removed: In addition, we may be required to apply for additional approvals or modify our existing approvals because of changes in local circumstances or applicable law.
−Removed: If governments in locations in which we operate take actions like the ones described, they could adversely affect our business by causing delays, increasing our costs or limiting our ability to operate in those areas.
−Removed: Further, we may experience delays and increased expenses as a result of legal challenges to our proposed projects, whether brought by governmental authorities or private parties.
−Removed: Failure to comply with laws or regulations applicable to or affecting us, or the passage in the future of new and more stringent laws affecting us, may adversely affect our financial condition or results of operations.
+Added: If governments in locations in which our customers operate take actions like the ones described, they could adversely affect our business by causing delays, increasing costs or limiting our customers’ ability to operate in those areas.
The dangers inherent in our operations, such as disruptions to our facilities and project sites, and the limits on insurance coverage could expose us to potentially significant liability costs and materially interfere with the performance of our operations.
5 unchanged sentences
The availability of insurance that covers risks we and our competitors typically insure against may decrease, and the insurance that we are able to obtain may have higher deductibles, higher premiums and more restrictive policy terms.
−Removed: Risks Relating to SG DevCorp.
+Added: Risks Relating to Real Estate Development
The long-term sustainability of SG DevCorp’s operations as well as future growth depends in part upon SG DevCorp’s ability to acquire land parcels suitable for residential projects at reasonable prices.
1 unchanged sentence
SG DevCorp’s ability to acquire land parcels for various residential projects may be adversely affected by changes in the general availability of land parcels, the willingness of land sellers to sell land parcels at reasonable prices, competition for available land parcels, availability of financing to acquire land parcels, zoning, regulations that limit housing density, the ability to obtain building permits, environmental requirements and other market conditions and regulatory requirements.
−Removed: If suitable lots or land at reasonable prices become less available, the number of units SG DevCorp.
−Removed: may be able to build and sell could be reduced, and the cost of land could be increased substantially, which could adversely impact it.
+Added: If suitable lots or land at reasonable prices become less available, the number of units SG DevCorp may be able to build and sell could be reduced, and the cost of land could be increased substantially, which could adversely impact it.
As competition for suitable land increases, the cost of undeveloped lots and the cost of developing owned land could also rise and the availability of suitable land at acceptable prices may decline, which could adversely impact it.
The availability of suitable land assets could also affect the success of SG DevCorp’s land acquisition strategy, which may impact SG DevCorp’s ability to maintain or increase the number of active communities, as well as to sustain and grow its revenues and margins, and achieve or maintain profitability.
−Removed: Additionally, developing undeveloped land is capital intensive and time consuming and SG DevCorp.
−Removed: may develop land based upon forecasts and assumptions that prove to be inaccurate, resulting in projects that are not economically viable.
−Removed: operates in a highly competitive market for investment opportunities, and SG DevCorp.
−Removed: may be unable to identify and complete acquisitions of real property assets.
−Removed: The housing industry is highly competitive, and SG DevCorp.
−Removed: faces competition from many sources, including from other housing communities both in the immediate vicinity and the geographic market where SG DevCorp.’s properties are and will be located.
−Removed: Furthermore, housing communities SG DevCorp.
−Removed: invests in compete, or will compete, with numerous housing alternatives in attracting residents, including owner occupied single and multifamily homes available to rent or purchase.
−Removed: Increased competition may prevent SG DevCorp.
−Removed: from acquiring attractive land parcels or make such acquisitions more expensive, hinder SG DevCorp.’s market share expansion, or lead to pricing pressures that may adversely impact its margins and revenues.
−Removed: Competitors may independently develop land and construct housing units that are superior or substantially similar to SG DevCorp.’s products and because they are or may be significantly larger, have a longer operating history, and have greater resources or lower cost of capital than it, may be able to compete more effectively in one or more of the markets in which SG DevCorp.
−Removed: operates or plans to operate.
−Removed: will also compete with public and private funds, commercial and investment banks, commercial financing companies and public and private REITs to make certain of the investments that it plans to make.
+Added: Additionally, developing undeveloped land is capital intensive and time consuming and SG DevCorp may develop land based upon forecasts and assumptions that prove to be inaccurate, resulting in projects that are not economically viable.
+Added: Operates in a highly competitive market for investment opportunities, and SG DevCorp may be unable to identify and complete acquisitions of real property assets.
+Added: The housing industry is highly competitive, and SG DevCorp faces competition from many sources, including from other housing communities both in the immediate vicinity and the geographic market where SG DevCorp’s properties are and will be located.
+Added: Furthermore, housing communities SG DevCorp invests in compete, or will compete, with numerous housing alternatives in attracting residents, including owner occupied single and multifamily homes available to rent or purchase.
+Added: Increased competition may prevent SG DevCorp from acquiring attractive land parcels or make such acquisitions more expensive, hinder SG DevCorp’s market share expansion, or lead to pricing pressures that may adversely impact its margins and revenues.
+Added: Competitors may independently develop land and construct housing units that are superior or substantially similar to SG DevCorp’s products and because they are or may be significantly larger, have a longer operating history, and have greater resources or lower cost of capital than it, may be able to compete more effectively in one or more of the markets in which SG DevCorp operates or plans to operate.
+Added: SG DevCorp will also compete with public and private funds, commercial and investment banks, commercial financing companies and public and private REITs to make certain of the investments that it plans to make.
Many of such competitors are substantially larger and have considerably greater financial, technical and marketing resources than it.
6 unchanged sentences
These adverse weather and natural events could cause substantial damages or losses to SG DevCorp’s properties which could exceed its insurance coverage.
−Removed: In the event of a loss in excess of insured limits, SG DevCorp.
−Removed: could lose its capital invested in the affected property, as well as anticipated future revenue from that property.
−Removed: could also continue to be obligated to repay any mortgage indebtedness or other obligations related to the property.
+Added: In the event of a loss in excess of insured limits, SG DevCorp could lose its capital invested in the affected property, as well as anticipated future revenue from that property.
+Added: SG DevCorp could also continue to be obligated to repay any mortgage indebtedness or other obligations related to the property.
Any such loss could materially and adversely affect SG DevCorp’s business and its financial condition and results of operations.
−Removed: To the extent that significant changes in the climate occur, SG DevCorp.
−Removed: may experience extreme weather and changes in precipitation and temperature and rising sea levels, all of which may result in physical damage to or a decrease in demand for properties located in these areas or affected by these conditions.
+Added: To the extent that significant changes in the climate occur, SG DevCorp may experience extreme weather and changes in precipitation and temperature and rising sea levels, all of which may result in physical damage to or a decrease in demand for properties located in these areas or affected by these conditions.
Should the impact of climate change be material in nature, including destruction of SG DevCorp’s properties, or occur for lengthy periods of time, SG DevCorp’s financial condition or results of operations may be adversely affected.
7 unchanged sentences
failure to secure tenants or residents in the anticipated time frame, on acceptable terms, or at all.
−Removed: can provide no assurances that it will complete any of the projects in SG DevCorp.’s development pipeline on the anticipated schedule or within the budget, or that, once completed, these properties will achieve the results that it expects.
+Added: SG DevCorp can provide no assurances that it will complete any of the projects in SG DevCorp’s development pipeline on the anticipated schedule or within the budget, or that, once completed, these properties will achieve the results that it expects.
If the development of these projects is not completed in accordance with SG DevCorp’s anticipated timing or cost, or the properties fail to achieve the financial results it expects, it could have a material adverse effect on SG DevCorp’s business, financial condition, results of operations and cash flows and ability to repay SG DevCorp’s debt, including project-related debt.
SG DevCorp’s insurance coverage on its properties may be inadequate to cover any losses it may incur and its insurance costs may increase.
−Removed: maintains insurance on its properties.
+Added: SG DevCorp maintains insurance on its properties.
However, there are certain types of losses, generally of a catastrophic nature, such as floods or acts of war or terrorism that may be uninsurable or not economical to insure.
Further, insurance companies often increase premiums, require higher deductibles, reduce limits, restrict coverage, and refuse to insure certain types of risks, which may result in increased costs or adversely affect SG DevCorp’s business.
−Removed: uses its discretion when determining amounts, coverage limits and deductibles, for insurance, based on retaining an acceptable level of risk at a reasonable cost.
+Added: SG DevCorp uses its discretion when determining amounts, coverage limits and deductibles, for insurance, based on retaining an acceptable level of risk at a reasonable cost.
This may result in insurance coverage that, in the event of a substantial loss, would not be sufficient to pay the full current market value or current replacement cost of SG DevCorp’s lost investment.
−Removed: In addition, SG DevCorp.
−Removed: may become liable for injuries and accidents at SG DevCorp.’s properties that are underinsured.
+Added: In addition, SG DevCorp may become liable for injuries and accidents at SG DevCorp’s properties that are underinsured.
A significant uninsured loss or increase in insurance costs could materially and adversely affect SG DevCorp’s business, liquidity, financial condition and results of operations.
−Removed: may not be able to secure sufficient modular units to complete its developments using modules built by SG Echo
−Removed: intend to construct many of its planned developments using modules built by SG Holdings subsidiary, SG Echo, and to rely on SG Holdings and SG Echo as the sole source of the modular units used in its projects.
−Removed: SG Holdings has a $6,810,762 backlog of signed construction and engineering contracts in existence at December 31, 2022 on which work has not yet begun.
−Removed: SG DevCorp.’s ability to complete its modular developments will be limited to the available capacity of the SG Echo facility.
+Added: SG DevCorp may not be able to secure sufficient modular units to complete its developments using modules built by SG Echo
+Added: SG DevCorp intends to construct many of its planned developments using modules built by our subsidiary, SG Echo, and to rely on SG Echo as the main source of the modular units used in its projects.
+Added: We had a $1,902,332 backlog of signed construction and engineering contracts in existence at December 31, 2023 .
+Added: SG DevCorp’s ability to complete its modular developments may be limited by the available capacity of the SG Echo facility.
If SG DevCorp.
−Removed: is unable to secure sufficient modular units to complete its developments using modules built by SG Echo, its business, prospects, financial condition, results of operations, and cash flows would be materially and adversely affected.
+Added: Is unable to secure sufficient modular units to complete its developments using modules built by SG Echo, its business, prospects, financial condition, results of operations, and cash flows could be materially and adversely affected.
SG DevCorp’s operating results may be negatively affected by potential development and construction delays and resultant increased costs and risks.
2 unchanged sentences
Performance also may be affected or delayed by conditions beyond its control.
−Removed: may incur additional risks when it makes periodic progress payments or other advances to builders before they complete construction.
−Removed: If a builder or development partner fails to perform, SG DevCorp.
−Removed: may resort to legal action to rescind the purchase or the construction contract or to compel performance, but there can be no assurance any legal action would be successful.
+Added: SG DevCorp may incur additional risks when it makes periodic progress payments or other advances to builders before they complete construction.
+Added: If a builder or development partner fails to perform, SG DevCorp may resort to legal action to rescind the purchase or the construction contract or to compel performance, but there can be no assurance any legal action would be successful.
These and other factors can result in increased costs of a project or loss of SG DevCorp’s investment.
−Removed: In addition, SG DevCorp.
−Removed: will be subject to normal lease-up risks relating to newly constructed projects.
−Removed: also must rely on rental income and expense projections and estimates of the fair market value of property upon completion of construction when agreeing upon a price at the time it acquires the property.
−Removed: If SG DevCorp.’s projections are inaccurate, SG DevCorp.
−Removed: may pay too much for a property, and its return on its investment could suffer.
−Removed: relies on third-party suppliers and long supply chains, and if it fails to identify and develop relationships with a sufficient number of qualified suppliers, or if there is a significant interruption in its supply chains, SG DevCorp.’s ability to timely and efficiently access raw materials that meet its standards for quality could be adversely affected.
+Added: In addition, SG DevCorp will be subject to normal lease-up risks relating to newly constructed projects.
+Added: SG DevCorp also must rely on rental income and expense projections and estimates of the fair market value of property upon completion of construction when agreeing upon a price at the time it acquires the property.
+Added: If SG DevCorp’s projections are inaccurate, SG DevCorp may pay too much for a property, and its return on its investment could suffer.
+Added: SG DevCorp relies on third-party suppliers and long supply chains, and if it fails to identify and develop relationships with a sufficient number of qualified suppliers, or if there is a significant interruption in its supply chains, SG DevCorp’s ability to timely and efficiently access raw materials that meet its standards for quality could be adversely affected.
SG DevCorp’s ability to identify and develop relationships with qualified suppliers who can satisfy its standards for quality and its need to access products and supplies in a timely and efficient manner will be a significant challenge.
−Removed: may be required to replace a supplier if their products do not meet its quality or safety standards.
+Added: SG DevCorp may be required to replace a supplier if their products do not meet its quality or safety standards.
In addition, SG DevCorp’s suppliers could discontinue selling products at any time for reasons that may or may not be in its control or the suppliers’ control.
2 unchanged sentences
The construction of manufacturing facilities involves significant risks.
−Removed: has limited experience constructing manufacturing facilities and doing so is a complex and lengthy undertaking that requires sophisticated, multi-disciplinary planning and precise execution.
+Added: SG DevCorp has limited experience constructing manufacturing facilities and doing so is a complex and lengthy undertaking that requires sophisticated, multi-disciplinary planning and precise execution.
The construction of manufacturing facilities is subject to a number of risks.
In particular, the construction costs may materially exceed budgeted amounts, which could adversely affect SG DevCorp’s results of operations and financial condition.
−Removed: For example, SG DevCorp.
−Removed: may suffer construction delays or cost overruns as a result of a variety of factors, such as labor and material shortages, defects in materials and workmanship, adverse weather conditions, transportation constraints, construction change orders, site changes, labor issues and other unforeseen difficulties, any of which could delay or prevent the completion of SG DevCorp.’s planned facilities.
+Added: For example, SG DevCorp may suffer construction delays or cost overruns as a result of a variety of factors, such as labor and material shortages, defects in materials and workmanship, adverse weather conditions, transportation constraints, construction change orders, site changes, labor issues and other unforeseen difficulties, any of which could delay or prevent the completion of SG DevCorp’s planned facilities.
While SG DevCorp’s goal is to negotiate contracts with engineering, procurement and construction firms that minimize risk, any delays or cost overruns it encounters may result in the renegotiation of SG DevCorp’s construction contracts, which could increase its costs.
1 unchanged sentence
Such agencies may not approve the projects in a timely manner or may impose restrictions or conditions on a production facility that could potentially prevent construction from proceeding, lengthen its expected completion schedule and/or increase its anticipated cost.
−Removed: If construction costs are higher than it anticipates, SG DevCorp.
−Removed: may be unable to achieve its expected investment return, which could adversely affect its business and results of operations.
+Added: If construction costs are higher than it anticipates, SG DevCorp may be unable to achieve its expected investment return, which could adversely affect its business and results of operations.
Discovery of previously undetected environmentally hazardous conditions may adversely affect SG DevCorp’s operating results.
−Removed: is subject to various federal, state and local laws and regulations that (a) regulate certain activities and operations that may have environmental or health and safety effects, such as the management, generation, release or disposal of regulated materials, substances or wastes, (b) impose liability for the costs of cleaning up, and damages to natural resources from, past spills, waste disposals on and off-site, or other releases of hazardous materials or regulated substances, and (c) regulate workplace safety.
+Added: SG DevCorp is subject to various federal, state and local laws and regulations that (a) regulate certain activities and operations that may have environmental or health and safety effects, such as the management, generation, release or disposal of regulated materials, substances or wastes, (b) impose liability for the costs of cleaning up, and damages to natural resources from, past spills, waste disposals on and off-site, or other releases of hazardous materials or regulated substances, and (c) regulate workplace safety.
Compliance with these laws and regulations could increase SG DevCorp’s operational costs.
−Removed: Violation of these laws may subject SG DevCorp.
−Removed: to significant fines, penalties or disposal costs, which could negatively impact its results of operations, financial position and cash flows.
+Added: Violation of these laws may subject SG DevCorp to significant fines, penalties or disposal costs, which could negatively impact its results of operations, financial position and cash flows.
Under various federal, state and local environmental laws, a current or previous owner or operator of currently or formerly owned, leased or operated real property may be liable for the cost of removal or remediation of hazardous or toxic substances on, under or in such property.
1 unchanged sentence
Such laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances.
−Removed: Accordingly, SG DevCorp.
−Removed: may incur significant costs to defend against claims of liability, to comply with environmental regulatory requirements, to remediate any contaminated property, or to pay personal injury claims.
−Removed: Moreover, environmental laws also may impose liens on property or other restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures or prevent SG DevCorp.
−Removed: or its lessees from operating such properties.
−Removed: Compliance with new or more stringent laws or regulations or stricter interpretation of existing laws may require SG DevCorp.
−Removed: to incur material expenditures.
+Added: Accordingly, SG DevCorp may incur significant costs to defend against claims of liability, to comply with environmental regulatory requirements, to remediate any contaminated property, or to pay personal injury claims.
+Added: Moreover, environmental laws also may impose liens on property or other restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures or prevent SG DevCorp or its lessees from operating such properties.
+Added: Compliance with new or more stringent laws or regulations or stricter interpretation of existing laws may require SG DevCorp to incur material expenditures.
Future laws, ordinances or regulations or the discovery of currently unknown conditions or non-compliances may impose material liability under environmental laws.
Legislative, regulatory, accounting or tax rules, and any changes to them or actions brought to enforce them, could adversely affect SG DevCorp.
−Removed: is subject to a wide range of legislative, regulatory, accounting and tax rules.
−Removed: The costs and efforts of compliance with these laws, or of defending against actions brought to enforce them, could adversely affect SG DevCorp.
−Removed: In addition, if there are changes to the laws, regulations or administrative decisions and actions that affect SG DevCorp., SG DevCorp.
−Removed: may have to incur significant expenses in order to comply, or SG DevCorp.
−Removed: may have to restrict or change its operations.
−Removed: has invested, and expect to continue to invest, in real property assets which are subject to laws and regulations relating to the protection of the environment and human health and safety.
+Added: SG DevCorp is subject to a wide range of legislative, regulatory, accounting and tax rules.
+Added: The costs and efforts of compliance with these laws, or of defending against actions brought to enforce them, could adversely affect SG DevCorp In addition, if there are changes to the laws, regulations or administrative decisions and actions that affect SG DevCorp, SG DevCorp may have to incur significant expenses in order to comply, or SG DevCorp may have to restrict or change its operations.
+Added: SG DevCorp has invested, and expects to continue to invest, in real property assets which are subject to laws and regulations relating to the protection of the environment and human health and safety.
These laws and regulations generally govern wastewater discharges, noise levels, air emissions, the operation and removal of underground and above-ground storage tanks, the use, storage, treatment, transportation and disposal of solid and hazardous materials and the remediation of contamination associated with disposals.
2 unchanged sentences
In addition, the presence of hazardous substances, or the failure to properly remediate these substances, could adversely affect SG DevCorp’s ability to sell, rent or pledge an affected property as collateral for future borrowings.
−Removed: intends to take commercially reasonable steps when it can to protect itself from the risks of environmental law liability;
−Removed: however, SG DevCorp.
−Removed: may not obtain independent third-party environmental assessments for every property it acquires.
+Added: SG DevCorp intends to take commercially reasonable steps when it can to protect itself from the risks of environmental law liability;
+Added: however, SG DevCorp may not obtain independent third-party environmental assessments for every property it acquires.
In addition, any such assessments that it does obtain may not reveal all environmental liabilities, or whether a prior owner of a property created a material environmental condition not known to it.
−Removed: In addition, there are various local, state and federal fire, health, safety and similar regulations with which SG DevCorp.
−Removed: may be required to comply, and that may subject it to liability in the form of fines or damages.
−Removed: In all events, the existing condition of land when SG DevCorp.
−Removed: buys it, operations in the vicinity of its properties or activities of unrelated third parties could all affect its properties in ways that lead to costs being imposed on it.
+Added: In addition, there are various local, state and federal fire, health, safety and similar regulations with which SG DevCorp may be required to comply, and that may subject it to liability in the form of fines or damages.
+Added: In all events, the existing condition of land when SG DevCorp buys it, operations in the vicinity of its properties or activities of unrelated third parties could all affect its properties in ways that lead to costs being imposed on it.
Any material expenditures, fines, damages or forced changes to SG DevCorp’s business or strategy resulting from any of the above could adversely affect its financial condition and results of operations.
21 unchanged sentences
The potential difficulties described above can cause demand and prices for SG DevCorp’s units to fall or cause it to take longer and incur more costs to develop the land and build its units.
−Removed: may not be able to recover these increased costs by raising prices because of market conditions.
−Removed: Fluctuations in real estate values may require SG DevCorp.
−Removed: to write-down the book value of its real estate assets.
+Added: SG DevCorp may not be able to recover these increased costs by raising prices because of market conditions.
+Added: Fluctuations in real estate values may require SG DevCorp to write-down the book value of its real estate assets.
The housing and land development industries are subject to significant variability and fluctuations in real estate values.
−Removed: As a result, SG DevCorp.
−Removed: may be required to write-down the book value of SG DevCorp.’s real estate assets in accordance with GAAP, and some of those write-downs could be material.
+Added: As a result, SG DevCorp may be required to write-down the book value of SG DevCorp’s real estate assets in accordance with GAAP, and some of those write-downs could be material.
Any material write-downs of assets could have a material adverse effect on SG DevCorp’s business, prospects, liquidity, financial condition, and results of operations.
In addition, valuations of real estate properties do not necessarily represent the price at which a willing buyer would purchase such property;
−Removed: therefore, there can be no assurance that SG DevCorp.
−Removed: would realize the values underlying estimated valuations of SG DevCorp.’s properties if it were to sell such properties.
+Added: therefore, there can be no assurance that SG DevCorp would realize the values underlying estimated valuations of SG DevCorp’s properties if it were to sell such properties.
Inflation could adversely affect SG DevCorp’s business and financial results.
Inflation could adversely affect SG DevCorp’s business and financial results by increasing the costs of land, raw materials and labor needed to operate SG DevCorp’s business.
−Removed: If SG DevCorp.’s markets have an oversupply of housing, relative to demand, SG DevCorp.
−Removed: may be unable to offset any such increases in costs with corresponding higher sales prices for its units or buildings.
+Added: If SG DevCorp’s markets have an oversupply of housing, relative to demand, SG DevCorp may be unable to offset any such increases in costs with corresponding higher sales prices for its units or buildings.
Inflation may also accompany higher interest rates, which could adversely impact potential customers’ ability to obtain financing on favorable terms, thereby further decreasing demand.
−Removed: If SG DevCorp.
−Removed: is unable to raise the prices of its units or buildings to offset the increasing costs of its operations, its margins could decrease.
−Removed: Furthermore, if SG DevCorp.
−Removed: needs to lower the price of its units to meet demand, the value of its land inventory may decrease.
+Added: If SG DevCorp is unable to raise the prices of its units or buildings to offset the increasing costs of its operations, its margins could decrease.
+Added: Furthermore, if SG DevCorp needs to lower the price of its units to meet demand, the value of its land inventory may decrease.
Inflation may also raise SG DevCorp’s costs of capital and decrease its purchasing power, making it more difficult to maintain sufficient funds to operate its business.
−Removed: could be impacted by its investments through joint ventures, which involve risks not present in investments in which SG DevCorp.
−Removed: is the sole owner.
−Removed: has and may continue to fund development projects through the use of joint ventures.
+Added: SG DevCorp could be impacted by its investments through joint ventures, which involve risks not present in investments in which SG DevCorp is the sole owner.
+Added: SG DevCorp has and may continue to fund development projects through the use of joint ventures.
Joint ventures involve risks including, but not limited to, the possibility that the other joint venture partners may possess the ability to take or force action contrary to its interests or withhold consent contrary to its requests, have business goals which are or become inconsistent with SG DevCorp’s or default on their financial obligations to the joint venture, which may require it to fulfill the joint venture’s financial obligations as a legal or practical matter.
−Removed: and its joint venture partners may each have the right to initiate a buy-sell arrangement, which could cause it to sell its interest, or acquire a joint venture partner’s interest, at a time when it otherwise would not have entered into such a transaction.
+Added: SG DevCorp and its joint venture partners may each have the right to initiate a buy-sell arrangement, which could cause it to sell its interest, or acquire a joint venture partner’s interest, at a time when it otherwise would not have entered into such a transaction.
In addition, a sale or transfer by it to a third party of its interests in the joint venture may be subject to consent rights or rights of first refusal in favor of its partners which would restrict SG DevCorp’s ability to dispose of its interest in the joint venture.
3 unchanged sentences
The risks inherent in purchasing and developing land parcels increase as consumer demand for housing decreases and the holding period increases.
−Removed: As a result, SG DevCorp.
−Removed: may buy and develop land parcels on which housing units cannot be profitably built and sold.
+Added: As a result, SG DevCorp may buy and develop land parcels on which housing units cannot be profitably built and sold.
In certain circumstances, a grant of entitlements or development agreement with respect to a particular parcel of land may include restrictions on the transfer of such entitlements to a buyer of such land, which could negatively impact the price of such entitled land by restricting its ability to sell it for its full entitled value.
1 unchanged sentence
The time and investment required for development may adversely impact its business.
−Removed: In the event of significant changes in economic or market conditions, SG DevCorp.
−Removed: may have to sell units or buildings at significantly lower margins or at a loss, if SG DevCorp.
−Removed: is able to sell them at all.
−Removed: Additionally, deteriorating market conditions could cause SG DevCorp.
−Removed: to record significant inventory impairment charges.
+Added: In the event of significant changes in economic or market conditions, SG DevCorp may have to sell units or buildings at significantly lower margins or at a loss, if SG DevCorp is able to sell them at all.
+Added: Additionally, deteriorating market conditions could cause SG DevCorp to record significant inventory impairment charges.
The recording of a significant inventory impairment could negatively affect its reported earnings per share and negatively impact the market perception of its business.
−Removed: may not be able to sell its real property assets when it desires.
+Added: SG DevCorp may not be able to sell its real property assets when it desires.
Investments in real property are relatively illiquid compared to other investments.
−Removed: Accordingly, SG DevCorp.
−Removed: may not be able to sell real property assets when it desires or at prices acceptable to it.
+Added: Accordingly, SG DevCorp may not be able to sell real property assets when it desires or at prices acceptable to it.
This could substantially reduce the funds available for satisfying its obligations, including any debt obligations.
10 unchanged sentences
For the past decade, the domestic financial markets have experienced a high degree of volatility, uncertainty and, during certain periods, tightening of liquidity in both the high yield debt and equity capital markets, resulting in certain periods where new capital has been both more difficult and more expensive to access.
−Removed: If SG DevCorp.
−Removed: is unable to access the credit markets, it could be required to defer or eliminate important business strategies and growth opportunities in the future.
−Removed: In addition, if there is volatility and weakness in the capital and credit markets, potential lenders may be unwilling or unable to provide SG DevCorp.
−Removed: with financing that is attractive to it or may increase collateral requirements or may charge us prohibitively high fees in order to obtain financing.
+Added: If SG DevCorp is unable to access the credit markets, it could be required to defer or eliminate important business strategies and growth opportunities in the future.
+Added: In addition, if there is volatility and weakness in the capital and credit markets, potential lenders may be unwilling or unable to provide SG DevCorp with financing that is attractive to it or may increase collateral requirements or may charge us prohibitively high fees in order to obtain financing.
Consequently, SG DevCorp’s ability to access the credit market in order to attract financing on reasonable terms may be adversely affected.
2 unchanged sentences
May have to rely more heavily on additional equity financings or on less efficient forms of debt financing that require a larger portion of its cash flow from operations, thereby reducing funds available for SG DevCorp’s operations, future business opportunities and other purposes.
−Removed: may not have access to such equity or debt capital on favorable terms at the desired times, or at all.
−Removed: We may not achieve some or all of the expected benefits of the Separation and Distribution, and the Separation and Distribution may materially adversely affect our business.
−Removed: We may not be able to achieve the full strategic and financial benefits expected to result from the Separation and Distribution, or such benefits may be delayed or not occur at all.
−Removed: The Separation and Distribution is expected to provide the following benefits, among others:
−Removed: (1) enabling SG DevCorp.’s management to more effectively pursue its own distinct operating priorities and strategies;
−Removed: (2) permitting SG DevCorp.
−Removed: to allocate its financial resources to meet the unique needs of its business, which will allow SG DevCorp.
−Removed: to intensify our focus on its distinct strategic priorities and to more effectively pursue its own distinct capital structure and capital allocation strategies;
−Removed: (3) allowing SG DevCorp.
−Removed: to more effectively articulate a clear investment thesis to attract a long-term investor base suited to its respective business and providing investors with a distinct and targeted investment opportunity;
−Removed: (4) creating an independent equity security tracking SG DevCorp.’s underlying business, which should afford direct access to the capital markets and facilitate SG DevCorp.’s ability to consummate future acquisitions or other transactions using its common stock;
−Removed: and (5) permitting SG DevCorp.
−Removed: to more effectively recruit, retain and motivate employees through the use of stock-based compensation that more closely aligns management and employee incentives with specific business goals and objectives related to its business.
−Removed: We may not achieve these and other anticipated benefits for a variety of reasons, including, among others:
−Removed: (1) the Separation and Distribution will demand management’s time and effort, which may divert management’s attention from operating and growing our business;
−Removed: (2) following the Separation and Distribution, SG DevCorp.
−Removed: may be more susceptible to market fluctuations and other adverse events than if it were still a part of the Company because its business will be less diversified than the Company’s business prior to the completion of the Separation;
−Removed: (3) the Separation may require us to pay costs that could be substantial and material to our financial resources, including accounting, tax, legal and other professional services costs, recruiting costs, and tax costs;
−Removed: and (4) after the Separation and Distribution, we cannot predict the trading prices of SG DevCorp.’s common stock or know whether the combined trading prices of the Company’s common stock and SG DevCorp.’s common stock will be less than, equal to or greater than the market value of the Company’s common stock prior to the Separation and Distribution.
−Removed: If we fail to achieve some or all of the benefits expected to result from the Separation, or if such benefits are delayed, it could have a material adverse effect on our competitive position, business, financial condition, results of operations and cash flows.
−Removed: The Company’s plan to separate into two publicly traded companies is subject to various risks and uncertainties and may not be completed in accordance with the expected plans or anticipated timeline, or at all, and will involve significant time and expense, which could disrupt or adversely affect our business.
−Removed: In December 2022, the Company announced its plan to separate into two publicly traded companies.
−Removed: The Separation and Distribution is subject to the satisfaction of certain conditions (or waiver by the Company in its sole and absolute discretion), including final approval by the Company’s Board of Directors of the final terms of the Separation and Distribution.
−Removed: Furthermore, unanticipated developments or changes, including changes in the law, the macroeconomic environment, competitive conditions of the Company’s markets could delay or prevent the completion of the proposed Separation and Distribution, or cause the Separation and Distribution to occur on terms or conditions that are different or less favorable than expected.
−Removed: The process of completing the proposed Separation and Distribution has been and is expected to continue to be time-consuming and involves significant costs and expenses.
−Removed: The costs may be significantly higher than what we currently anticipate and may not yield a discernible benefit if the Separation and Distribution is not completed or is not well executed, or the expected benefits of the Separation and Distribution are not realized.
−Removed: Risks Relating to the Medical Sector
−Removed: We are dependent on the availability and skill of subcontractors, their willingness to work with us as the clinical operators of our medical modules, and their expertise in the medical industry.
−Removed: We have relied and expect to continue to rely on subcontractors to perform medical services as the clinical operators and staffers of our medical modules.
−Removed: The inability to contract with skilled subcontractors at reasonable costs and on a timely basis could erode our profit margins and adversely affect our results of operations and cash flows.
+Added: SG DevCorp may not have access to such equity or debt capital on favorable terms at the desired times, or at all.
+Added: If SG DevCorp were to default in its obligation to repay the loan received from BCV S&G DevCorp it could adversely affect our investment in SG DevCorp.
+Added: To date, SG DevCorp has received $1,750,000 as a secured loan from BCV S&G DevCorp, 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.
+Added: The loan matures on December 1, 2024 and is secured by 1,999,999 of our shares of SG DevCorp’s common stock.
+Added: 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.
+Added: Mary’s industrial site.
+Added: 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 DevCorp are in discussions regarding alternatives, if any.
+Added: If SG DevCorp were to default in its obligation to repay the loan when due it could adversely affect our investment in SG DevCorp.
Risks Relating to our Common Stock
1 unchanged sentence
Our Common Stock is listed on the Nasdaq Capital Market (“Nasdaq” or the “Nasdaq Capital Market”), which imposes, among other requirements, a minimum bid requirement.
−Removed: Although we are currently in compliance with the continued listing requirements of the Nasdaq Capital Market in the past we have experiences periods of time when we were not compliant with the minimum bid price requirements and, there can be no assurance that we will be able to maintain compliance in the future.
−Removed: The delisting of our common stock from Nasdaq may make it more difficult for us to raise capital on favorable terms in the future, or at all.
−Removed: Such a delisting would likely have a negative effect on the price of our common stock and would impair your ability to sell or purchase our common stock when you wish to do so.
−Removed: Further, if our common stock were to be delisted from Nasdaq, our common stock would cease to be recognized as a covered security, and we would be subject to additional regulation in each state in which we offer our securities.
−Removed: Moreover, there is no assurance that any actions that we take to restore our compliance with the Nasdaq minimum bid requirement would stabilize the market price or improve the liquidity of our common stock, prevent our common stock from falling below the Nasdaq minimum bid price required for continued listing again or prevent future non-compliance with Nasdaq’s listing requirements.
−Removed: There can be no assurance that we will continue to meet the minimum bid price requirement, or any other requirement in the future.
−Removed: If we fail to meet the minimum bid price requirement, or other applicable Nasdaq listing requirements, including maintaining minimum levels of stockholders’ equity or market values of our common stock, our common stock could be delisted.
+Added: On November 7, 2023, we received a deficiency letter from the Listing Qualifications Department of the Nasdaq notifying us that for the preceding 30 consecutive business days (September 26, 2023 through November 6, 2023), our 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).
+Added: In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have a compliance period of 180 calendar days, or until May 6, 2024, to regain compliance with Nasdaq Listing Rule 5550(a)(2).
+Added: Compliance may be achieved automatically and without further action if the closing bid price of our 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, in its discretion, Nasdaq will notify the Company of its compliance and the matter will be closed.
+Added: If, however, we do not achieve compliance with the Minimum Bid Price Requirement by May 6, 2024, we may be eligible for additional time to comply.
+Added: In order to be eligible for such additional time, we 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 our intention to cure the deficiency during the second compliance period.
+Added: We intend to actively monitor the bid price of our 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 our Nasdaq listing.
+Added: On May 2, 2024 the Company effectuated a reverse stock split.
+Added: If we cannot regain compliance with the Minimum Bid Price Requirement or if we otherwise fail to meet any of Nasdaq’s listing standards, our Common Stock will be subject to delisting.
+Added: 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.
+Added: The additional burdens imposed upon broker-dealers by these requirements could discourage broker-dealers from effecting transactions in our Common Stock.
+Added: This would adversely affect the ability of investors to trade our Common Stock and would adversely affect the value of our Common Stock.
Delisting from Nasdaq would cause us to pursue eligibility for trading of our Common Stock on other markets or exchanges, or on an over-the-counter market.
2 unchanged sentences
There can be no assurance that our Common Stock, if delisted from the Nasdaq, would be listed on a national securities exchange, a national quotation service or the over-the-counter markets.
−Removed: Delisting from the Nasdaq could also result in negative publicity, make it more difficult for us to raise additional capital, adversely affect the market liquidity of our common stock, decrease securities analysts’ coverage of us or diminish investor, supplier and employee confidence.
+Added: Delisting from the Nasdaq could also result in negative publicity, adversely affect the market liquidity of our Common Stock, decrease securities analysts’ coverage of us or diminish investor, supplier and employee confidence.
In addition, our stock could become a “penny stock,” which would make trading of our Common Stock more difficult.
+Added: The delisting of our Common Stock from Nasdaq may make it more difficult for us to raise capital on favorable terms in the future, or at all.
+Added: Such a delisting would likely have a negative effect on the price of our Common Stock and would impair your ability to sell or purchase our Common Stock when you wish to do so.
+Added: Further, if our Common Stock were to be delisted from Nasdaq, our Common Stock would cease to be recognized as a covered security, and we would be subject to additional regulation in each state in which we offer our securities.
+Added: Moreover, there is no assurance that any actions that we take to restore our compliance with the Nasdaq Minimum Bid Price Requirement would stabilize the market price or improve the liquidity of our Common Stock, prevent our Common Stock from falling below the Nasdaq minimum bid price required for continued listing again or prevent future non-compliance with other applicable Nasdaq listing requirements, including maintaining minimum levels of stockholders’ equity or market values of our Common Stock, our Common Stock could be delisted.
+Added: We have effected a reverse stock split of our outstanding common stock on May 2, 2024.
+Added: In order to comply with the Nasdaq Minimum Bid Requirement, the Board may determine to effect a reverse stock split of our Common Stock.
+Added: At the Company’s annual meeting on December 6, 2023, the stockholders approved an amendment to the Company’s Certificate of Incorporation, at a ratio of 1-for-10 to 1-for-20 (the “Range”), with the ratio within such Range to be determined at the discretion of the Board and included in a public announcement.
+Added: We expect that any future reverse stock split will increase the market price of our Common Stock while our stock is trading and enable us to meet the Minimum Bid Requirement.
+Added: However, the effect of a reverse stock split upon the market price of our Common Stock cannot be predicted with certainty, and the results of reverse stock splits by companies in similar circumstances have been varied.
+Added: It is possible that the market price of our Common Stock following the reverse stock split will not increase sufficiently for us to be in compliance with the Minimum Bid Requirement, or if it does, that such price will be sustained.
+Added: If we are unable to meet the Minimum Bid Requirement, our Common Stock could be delisted.
Our stock price has been subject to fluctuations in the past, has recently been volatile, and will likely continue to be subject to fluctuations and decline, due to factors beyond our control, and investors in our common stock may lose all or part of their investment in our company.
The trading price of our common stock has been and is expected to continue to be volatile and has been and may continue to be subject to wide fluctuations in response to various factors, some of which are beyond our control, including limited trading volume.
−Removed: On March 15, 2023, the reported low sale price of our common stock was $0.86, the reported high sale price was $0.95 and closing price of our common stock was $0.87 while on June 30, 2022, the closing price of our common stock was $1.66.
+Added: On April 12, 2024, the reported low sale price of our common stock was $0.1580 ($3.16 as adjusted for the May Stock Split) , the reported high sale price was $0.1760 ($3.52 as adjusted for the May Stock Split) and closing price of $0.1620 ($3.24 as adjusted for the May Stock Split) our common stock was $0.95 ($19.00 as adjusted for the May Stock Split) while on June 30, 2023, the closing price of our common stock was $0.95 ($19.00 as adjusted for the May Stock Split) .
We may incur rapid and substantial decreases in our stock price in the foreseeable future that are unrelated to our operating performance for prospects.
40 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.
−Removed: As of March 29, 2023, there are outstanding options and warrants to purchase 36,436 and 2,025,520 shares of common stock, respectively, in addition to 3,212,504 vested and unvested restricted stock units.
−Removed: The exercise of such options and warrants and the vesting of restricted stock units would dilute the then-existing stockholders’ percentage ownership of our stock, and any sales in the public market of common stock underlying such securities could adversely affect prevailing market prices for the common stock.
+Added: As of March 29, 2024, there are outstanding options and warrants to purchase 36,436 (1,822 as adjusted for the May Stock Split) and 2,521,207 (126,060 as adjusted for the May Stock Split) shares of common stock, respectively.
+Added: Exercise of such options and warrants and the vesting of restricted stock units would dilute the then-existing stockholders’ percentage ownership of our stock, and any sales in the public market of common stock underlying such securities could adversely affect prevailing market prices for the common stock.
Moreover, the terms upon which we would be able to obtain additional equity capital could be adversely affected because the holders of our options and warrants can be expected to exercise them at a time when we would, in all likelihood, be able to obtain any needed capital on terms more favorable to us than those provided by such securities.
39 unchanged sentences
We cannot give stockholders any assurance that a broader or more active public trading market for our common stock will develop or be sustained, or that current trading levels will be sustained.
−Removed: Unresolved Staff Comments.
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.