What changed in this filing

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Item 9A. Controls and Procedures

2024-05-07 compared with 2023-03-31 · 1283 added, 654 removed, 1353 unchanged (59% of the section changed)

9 unchanged sentences

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

The Company does not have sufficient internal controls related to the timely closing of their accounting records, caused by insufficient accounting resources and a lack of formal review procedures.

In addition, the Company does not have sufficient internal controls related to the application of technical accounting guidance to complex and/or new transactions.

Due to the nature and number of year-end adjustments by our external auditors, we have a deficiency related to our closing process.

To assist in internal control over financial reporting additional resources have been hired.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023 .

In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework ( 2013 ) .

Based on our assessment, we concluded that, as of December 31, 2022, our internal control over financial reporting was effective based on those criteria.

Based on our assessment, we concluded that, as of December 31, 2023 , our internal control over financial reporting was not effective based on those criteria.

This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.

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There were changes made to our internal control process that improved the timely closing of our accounting records and added additional steps within our review process for complex and new transactions over financial reporting that occurred during the fourth quarter of 2022 .

During the fourth quarter of 2023, we determined that our internal controls were not effective based upon the criteria discussed above.

Other Information.

During the three months ended December 31, 2023, no director or officer of the Company a dopt ed or terminated a “Rule 10b5-1 trading arrangement” or “nonRule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

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Name of Director or Executive Officer

Position Served as an Officer and/or Director Since

Chairman of the Board, Chief Executive Officer and Interim Chief Financial Officer November 2011

William Rogers

Chief Operating Officer

December 2020

Yaniv Blumenfeld

Director April 2018

Served as an Officer and/or Director Since

Chairman of the Board and Chief Executive

November 2011

Patricia Kaelin

Chief Financial Officer

Christopher Melton ( 2 )(5)(7)

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David Villarreal

Director May 2021

Hawkins ( 1 )( 3 )(6)

Director December 2022

Elizabeth Cormier-May (1)(3)(4)

Director January 2023

December 2022

Thomas Meharey (4)

Jill Anderson ( 1 ) ( 3 )

Audit Committee Member.

( 2 ) Audit Committee Chairman.

Audit Committee Chairperson.

Compensation Committee Member.

(4) Nominating and Corporate Governance Committee Member.

Compensation Committee Chair.

Environmental, Social and Corporate Governance Committee Member

Environmental, Social and Corporate Governance Committee Chair

Lead Independent Director.

Galvin was appointed as a director and the Company’s Chief Executive Officer upon consummation of the reverse merger among CDSI Holdings Inc., CDSI Merger Sub, Inc., the Company, and certain stockholders of the Company on November 4, 2011 (the “Merger”).

He was appointed as Interim Chief Financial Officer on May 18, 2022.

Galvin is a founder of Safe & Green, LLC, the predecessor entity of the Company.

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Galvin’s pertinent experience, qualifications, attributes and skills include his expertise in real estate development and management and finance.

Yaniv Blumenfeld joined the Board of Directors in April 2018.

He founded Glacier Global Partners LLC in 2009 and is responsible for its strategic direction and oversees its investments and day-to-day management, including origination, underwriting, closing, investor relations and asset management functions.

Blumenfeld has over 20 years of real estate experience, 13 years of which have been with leading Wall Street firms, where he was responsible for structuring, underwriting, pricing, securitizing and syndicating over $16 billion of commercial real estate loans and equity transactions.

Prior to founding Glacier Global Partners LLC, Mr.

Blumenfeld was a Managing Director at The Bear Stearns Companies, Inc.

and JPMorgan Chase & Co., and, in such role, was responsible for structuring and closing over $2 billion in real estate debt and equity transactions for institutional clientele.

Prior to that, Mr.

Blumenfeld was a Managing Director and Head of the CMBS Capital Markets Group for the U.S.

at EuroHypo AG, then world’s largest real estate investment bank.

In that capacity, Mr.

Blumenfeld expanded the large loan CMBS group and oversaw the structuring, pricing, securitization and syndication functions and served on the bank’s investment committee in charge of approving all transactions.

He designed and implemented risk-control measures, standardized underwriting and pricing models and structured over $4 billion of real estate loans.

Other positions previously held by Mr.

Blumenfeld include Senior Vice President at Lehman Brothers, PaineWebber/UBS and Daiwa Securities.

Prior to joining the banking industry, Mr.

Blumenfeld worked as a real estate consultant at Ernst & Young real estate consulting group, advising real estate owners and operators, and various investment banks.

Blumenfeld received a Bachelor of Science in real estate finance from Cornell University School of Hotel Administration.

He is a member of the CRE Finance Council, was a guest lecturer at Columbia University, and was a recipient of the Young Jewish Professional NYC Real Estate Entrepreneur & Achievement Award in 2013.

He is also involved with various philanthropic organizations, including The American Israel Public Affairs Committee, White Plains Hospital, American Friends of Rabin Medical Center and is on the board of directors of Arts Westchester and the White Plains Business Improvement District.

We selected Mr.

Blumenfeld to serve on our Board because he brings extensive knowledge of the real estate finance industry.

Blumenfeld’s pertinent experience, qualifications, attributes and skills include expertise in real estate finance, risk-control, developments, investment banking and capital raising.

Patricia Kaelin was appointed Chief Financial Officer on May 1, 2023.

Kaelin is a member of the AICPA with more than 25 years of financial leadership, strategic planning, and public company experience.

She has served as Chief Financial Officer for public and privately held companies and has extensive experience in the construction, real estate, manufacturing and healthcare industries.

She has expertise in mergers and acquisitions and corporate restructuring, as well as private and public equity and debt financing.

Kaelin served as Chief Financial Officer of 1933 Industries, Inc., a publicly traded company based in Vancouver, British Columbia, with operations in the US and as VP of Finance and IT at Prolong, a publicly traded manufacturing company based in California.

Kaelin also served as Chief Financial Officer at Clifton Larson Allen, one of the largest CPA and consulting firms in the United States and as Chief Financial Officer for multiple private companies including a large construction and real estate development company with over $ 1 B in revenues and operations in several states.

She began her career at BDO USA, LLP, spending seven years in public accounting where she earned her CPA certificate.

Kaelin holds a Bachelor’s degree in Business Administration and Accounting from California State University, Fullerton and has served on multiple boards for children’s charities and a telehealth company.

Christopher Melton was appointed as a director of the Company upon consummation of the Merger on November 4, 2011.

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David Villarreal was appointed as a director of the Company on May 28, 2021.

Villarreal has served as the President and Chief Executive Officer of SG DevCorp since February 3, 2023.

Villarreal was appointed as a director of SG DevCorp effective April 11, 2023.

Villarreal’s career spans over 40 years in various management, business and leadership capacities, beginning in 1977 when he served as Deputy Mayor and Senior Deputy Economic Development Advisor, under Mayor Tom Bradley in the City of Los Angeles.

He has served since August 2014 as the Chief Administrative Officer of Affinity Partnerships, LLC, a Costco national mortgage services platform provider, with annual closed loan production of $8+ billion through a network of ten national mortgage lenders.

From August 2014 until March 2023, Mr.

Villarreal served as the Chief Administrative Officer of Affinity Partnerships, LLC, a Costco national mortgage services platform provider, with annual closed loan production of $8+ billion through a network of ten national mortgage lenders.

From March 2011 to August 2014, he served as the President -Corporate Business Development, of Prime Source Mortgage, Inc.

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Hawkins’s pertinent experience, qualifications, attributes and skills include financial literacy and expertise, managerial experience and the knowledge and experience he has attained through his financial services, government and nonprofit activities.

Elizabeth Cormier-May was appointed as a director of the Company in January 2023.

Cormier-May began her career as a medicinal chemist, specializing in early discovery oncology at the Novartis institute for Biomedical Research.

Cormier-May currently serves as CEO and Board Director of Mammogen, Inc., as well as the Chairman of the Board, Co-Founder, and CEO of Dragonfly Data Ventures.

Mammogen, Inc.

is a women’s health diagnostics company focused on the noninvasive detection of disease in its earliest stages.

Mammogen is one of 3 companies within the IV BioHoldings (IVBH) ecosystem, where Ms.

Cormier-May also serves as the SVP and Chief Commercial Officer.

IVBH is a privately held bio-innovation platform that seeks to conceive, create and develop first-in-category precision health technologies and companies that radically improve detection, diagnosis and treatment of disease.

Cormier-May has served since January 2022 as Senior Vice President and Chief Commercial Officer of IV Bioholdings, LLC, a privately held bio-innovation platform seeking to conceive, create and develop first-in-category precision health technologies and companies that radically improve detection, diagnosis and treatment of disease, serves and has served since March 2021 as a director and Chief Executive Officer of Mammogen.

Inc.,a privately held Women’s health diagnostics start-up, part of the IV BioHoldings, LLC bio innovation studio, and serves and has served since April 2019, as Chairman of the Board, Co-Founder and Chief Executive Officer of Dragonfly Data Ventures, Inc., a privately held data influence platform, seeking to create a gamified consumer platform that allows users to own, manage, and monetize their health, wellness, fitness, and transactional data.

From May 2016 to March 2019, Ms.

Cormier-May served as Vice President and Head of Commercial Diagnostics of Exosome Diagnostics, Inc., a personalized healthcare company acquired by Bio-Teche in August 2018.

From June 2004 to May 2016, Ms.

Cormier-May served in a number of management capacities with various multi-national and other companies in the healthcare and drug development industries.

Cormier-May received her B.A.

in organic chemistry from Wheaton College and attended Northeastern University’s chemical biology and organic chemistry program.

Jill Anderson was appointed as a director of the Company in August 2023.

Anderson has over twenty years of in-house and law firm experience counseling life sciences and healthcare companies on a variety of business issues and transactions, including corporate, regulatory, data privacy and security, employment, marketing and sales, real estate and litigation matters.

Since August 2020, Ms.

Anderson has served as Chief Legal Officer and Privacy Officer of miR Scientific, a precision healthcare company committed to transforming cancer management globally by developing non-invasive tests for the detection and risk classification of cancers.

From December 2006 to August 2020, Ms.

Anderson was a partner in the Healthcare and Privacy & Cybersecurity departments at the law firm of Moses & Singer LLP in New York City.

Before that, Ms.

Anderson held legal roles at Dana-Farber Cancer Institute and Mass General Brigham (formerly Partners Healthcare System).

Anderson also serves on the Board of Directors of Fight Cancer Global, a nonprofit organization dedicated to creating patient-centric solutions which unite all constituents to end the isolation for cancer patients globally.

Anderson successfully completed training at the 2023 Program on Corporate Compliance and Enforcement (PCCE) at NYU School of Law in Board Governance, Board Effectiveness, Risk Management, ESG and DEI.

Anderson earned her J.D.

at Widener University School of Law and holds a Bachelor of Science degree in Pre-Medicine from Rutgers University.

We selected Ms.

Cormier-May to serve on our Board because she brings extensive knowledge of the biotechnology industry and diagnostics services market.

Cormier-May’s pertinent experience, qualifications, attributes and skills include financial literacy and expertise, managerial experience and the knowledge and experience she has attained through her biotechnology industry and diagnostics services activities.

Anderson to serve on our Board because she brings extensive knowledge with respect to the healthcare industry.

Anderson’s pertinent experience, qualifications, attributes and skills include scientific expertise, managerial experience and the knowledge and experience she has attained through her healthcare experience.

Thomas Meharey was appointed as director of the Company in October 2023.

Meharey currently serves as a Vice President and board member for kathy ireland Worldwide, a global lifestyle company (“ki WW ”).

Meharey was appointed Vice President of kiWW in 2007 and as a board member of kiWW in 2017 .

During his time with kiWW, Mr.

Meharey launched the MIVI Millennial brand for men and women alongside global lifestyle designer Kathy Ireland.

From 2003 to 2007, Mr.

Meharey served as the Director of kathy ireland Weddings and Resorts, where he managed a portfolio of properties in excess of $ 40 million dollars.

Meharey founded a general contracting business in Hawaii, where he managed projects ranging from modest homes to multi-million dollar estates.

Meharey served our country as a marine from 1999-2003.

We selected Mr.

Meharey to serve on our Board due to his leadership skills and experience, his expertise in scaling businesses and his knowledge of the luxury brand, advertising, real estate and construction industries.

Board Leadership Structure

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The Board has reviewed the materiality of any relationship that each of our directors has with the Company and has determined that each of Messrs.

Hawkins , Melton and Ms.

Cormier-May , is “independent” in accordance with the Nasdaq Listing Rules.

Hawkins, Melton and Meharey and Ms.

Anderson, is “independent” in accordance with the Nasdaq Listing Rules.

Galvin and Villarreal are not considered “independent” due to their executive position.

Blumenfeld is also not considered "independent" due to compensation he received from certain business relationships he has with us.

As such independent directors comprise a majority of our Board and the members of our Audit, Compensation, and Nominating, Environmental, Social and Corporate Governance Committees are fully independent.

10 unchanged sentences

Hawkins and Ms.

Cormier-May .

The Audit Committee Charter requires that the Audit Committee consist of at least three members of the Board, each of whom is required to be independent as defined by Nasdaq and SEC rules.

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Functions of the Audit Committee include, but are not limited to, reviewing the results and scope of the audit performed, and the financial recommendations provided by, our independent registered public accounting firm and coordinating the Board’s oversight of our internal financing and accounting processes.

All audit services to be provided to the Company by our independent public accounting firm, Whitley Penn, are pre-approved by the Audit Committee prior to the initiation of such services (except for items exempt from pre-approval requirements under applicable laws and rules).

The Audit Committee approved all services provided by Whitley Penn to us during 2022.

All audit services to be provided to the Company by our independent public accounting firm, are pre-approved by the Audit Committee prior to the initiation of such services (except for items exempt from pre-approval requirements under applicable laws and rules).

The Audit Committee approved all services provided by our independent public accounting firm to us during 2022 and 2023.

Compensation Committee

The members of our Compensation Committee are Mr.

Hawkins and Ms.

Cormier-May .

The Compensation Committee Charter requires that the Compensation Committee consist of at least two members of the Board, each of whom is required to be independent as defined by Nasdaq rules.

Meharey, who serves as chairperson, Ms.

Anderson and Mr.

Hawkins The Compensation Committee Charter requires that the Compensation Committee consist of at least two members of the Board, each of whom is required to be independent as defined by Nasdaq rules.

The Board has determined that each member of the Compensation Committee is independent, as defined in Nasdaq Marketplace Rule 5605 (a)( 2 ).

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With the assistance of Haigh & Company, the Compensation Committee developed and implemented an organizational framework covering salary, annual bonus and equity ownership, with the goal of attracting and retaining talented individuals who are critical to the Company’s long-term success and aligning pay with performance.

Based on the information received from the consultant, the Compensation Committee believes that the work Haigh & Company performed in 2020 did not raise a conflict of interest and that it was fully independent.

The Compensation Committee had previously engaged Haigh & Company in September 2020 as its independent compensation consultant.

The Compensation Committee assessed the independence of Haigh & Company pursuant to SEC rules and in accordance with Nasdaq listing standards, noting that Haigh & Company (i) did not have any relationships with the Company, our executive officers or our Committee members that would impair its independence, and (ii) does not provide any services to the Company other than advice to the Compensation Committee regarding executive officer and director compensation, and concluded that Haigh & Company is free from conflicts of interest and is independent.

Nominating, Environmental, Social and Corporate Governance Committee

The Nominating, Environmental, Social and Corporate Governance Committee is currently comprised of Mr.

Hawkins and Ms.

Hawkins, who serves as chairperson, and Mr.

The Nominating, Environmental, Social and Corporate Governance Committee Charter requires that the Nominating, Environmental, Social and Corporate Governance Committee consist of at least two members of the Board, each of whom is required to be independent as defined by Nasdaq rules.

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Any substantive amendment of the Code of Business Conduct and Ethics, and any waiver of the Code of Business Conduct and Ethics for executive officers or directors, will be made only after approval by the Board or a committee of the Board and will be disclosed on our website.

In addition, any such waiver will be disclosed within four days on a Form 8-K filed with the SEC if then required by applicable rules and regulations.

Delinquent Section 16( a) Reports.

Section 16(a) of the Exchange Act and the regulations promulgated thereunder require our executive officers, directors and persons who beneficially own more than 10% of our common stock to file forms with the SEC to report their ownership of the Company’s shares and any changes in ownership.

We have reviewed all forms filed electronically with the SEC during, and with respect to, fiscal 2023.

Based on that review and written information given to us by all of our directors and executive officers, we believe that all of our directors, executive officers and holders of more than 10% of our stock filed on a timely basis all reports that they were required to file under Section 16(a) during fiscal 2023, except the following.

John Shaw-Form 3 filed March 28, 2023 for 11 transactions

John Shaw-Form 4 filed 4-27-23 for 2 transactions

John Shaw -Form 4 filed 8-31-23 for 5 transactions

Pual Galvin-Form 4 filed 5-10-23 for 30 transactions

Pual Galvin -Form 4 filed 5-10-23 for 19 transactions

William Rogers-Form 4 filed 5-10-23 for 25 transactions

Executive Compensation.

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Accordingly, this section includes supplemental narratives that describe the 2023 executive compensation program for our named executive officers.

The following discussion and table relates to compensation arrangements on behalf of, and compensation paid by our Company to, our “named executive officers”:

Galvin, Gerald Sheeran, and William Rogers.

Our executive officers named in the Summary Compensation Table below are referred to herein as the “named executive officers.” These named executive officers are:

Galvin, Chairman and Chief Executive Officer

Patricia Kaelin, Chief Financial Officer

William Rogers, Former Chief Operating Officer

Summary Compensation Table

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Name and Principal Position

Chairman and Chief Executive Officer and Interim Chief Financial Officer

Gerald Sheeran,

Former Acting Chief Financial Officer and Controller

572,917 ( 3 )

Chairman and Chief Executive Officer

Patricia Kaelin,

200,000 ( 4 )

Chief Financial Officer ( 5 )

William Rogers

Chief Operating Officer

(1) On November 3, 2022, the Compensation Committee granted RSUs with a value of $402,500 to Mr.

On October 1, 2021, the Compensation Committee granted RSUs with a value of $1,183,000 to Mr.

Galvin, $802,750 to Mr.

Rogers and $338,000 to Mr.

Former Chief Operating Officer ( 6 )

This column indicates the aggregate grant date fair value, as determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 , Compensation — Stock Compensation (“FASB ASC Topic 718 ”).

See “Note 19 — Share-based Compensation” of the Notes to Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2022 for an explanation of the assumptions made in valuing these awards.

For 2023 , all other compensation consisted of:

Galvin — automobile allowance of $9,600, medical insurance allowance of $25,305 and phone allowance of $1,800;

Sheeran — phone allowance of $500, automobile allowance of $2,000, medical insurance allowance of $4,064, restricted common shares with an approximate value of $38,000 from his separation agreement and a separation payment of $131,250;

Rogers — medical insurance allowance of $10,410, and $14,300 matching contributions under the Company’s qualified 401 (k) plan and $1,500 phone allowance.

For 2021, all other compensation consisted of:

Galvin — automobile allowance of $9,600, medical insurance allowance of $29,257 and phone allowance of $1,800;

Sheeran — phone allowance of $1,500, automobile allowance of $1,500, $5,125 matching contributions under the Company's 401(k) plan, medical insurance allowance of $9,404;

Rogers — medical insurance allowance of $8,278 and $1,625 phone allowance.

Sheeran’s employment with us terminated on May 12, 2022.

Galvin was appointed Interim Chief Financial Officer on May 18, 2022.

Galvin — $ 1,650 is cell phone and $ 9,600 auto allowance;

Kaelin — $ 1,000 cell phone;

Rogers — $ 1,500 cell phone, $ 4,000 401 K match and $ 75,000 was accrued pursuant to the Release Agreement.

See “ —Employment Agreements.”

During 2023 , Mr.

Galvin earned salary compensation of $ 572,917 , for his duties as Chairman and Chief Executive.

Galvin voluntarily deferred $ 62,500 of his salary compensation during 2023 .

The Compensation Committee has recommended and the Board has approved 2023 bonuses of $ 350,000 for Mr.

Galvin and $ 100,000 for Ms.

Kaelin to be paid in cash, equity or a combination of cash and equity.

Such amounts have not been included in the above table.

Kaelin was appointed Chief Financial Officer of the Company on May 1, 2023.

Rogers’ employment with us terminated on December 31, 2023.

Narrative Disclosure to Summary Compensation Table

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Effective January 1, 2017, we entered into an employment agreement with Mr.

Galvin as described further below under “Employment Agreements.” On July 24, 2018, the Compensation Committee approved an increase to the annual base salary of Mr.

Galvin, the Company’s President, retroactive to January 1, 2018.

Galvin’s salary increased from $240,000 to $370,000.

Such increases were based on a competitive market assessment provided by Haigh & Company, the Compensation Committee’s independent compensation consultant.

Galvin’s employment agreement originally provided for base compensation in the amount of $ 240,000 per year.

On July 24, 2018, the Compensation Committee increased Mr.

Galvin’s annual base salary to $ 370,000 , retroactive to January 1, 2018.

Such increase was based on a competitive market assessment provided by Haigh & Company, the Compensation Committee’s independent compensation consultant.

On December 1, 2019, the annual base salary for Mr.

Galvin decreased from $ 370,000 to $ 180,000 .

Galvin was decreased from $ 370,000 to $ 180,000 .

On April 24, 2020, the annual base salary for Mr.

Galvin increased from $ 180,000 to $ 400,000 .

Galvin was increased from $ 180,000 to $ 400,000 .

On July 5, 2022, the annual base salary for Mr.

Galvin increased to $500,000.

On August 22, 2019, the Board appointed Gerald Sheeran, the former Controller of the Company, as the acting Chief Financial Officer of the Company.

Effective on August 21, 2019, the annual base salary of Mr.

Sheeran increased from $120,000 to $180,000 as a result of his appointment to Acting Chief Financial Officer.

The annual base salary for Mr.

Sheeran decreased from $ 180,000 to $ 120,000 effective December 1, 2019.

On May 15, 2020, the annual base salary for Mr.

Sheeran increased from $ 120,000 to $ 180,000 .

On September 30, 2021, we entered into an employment agreement with Mr.

Sheeran as described further below under “Employment Agreements” pursuant to which the annual base salary for Mr.

Sheeran increased from $180,000 to $225,000.

Sheeran’s employment terminated on May 12, 2022.

As part of his separation agreement, Mr.

Sheeran received cash consideration of $131,250.

as well as 22,000 shares of restricted common stock.

On December 7, 2020, the Company appointed William Rogers to serve as the Company’s Chief Operations Officer with an annual base salary of $300,000 per year.

On September 27, 2021, we entered into an employment agreement with William Rogers as described further below under “Employment Agreements”.

Pursuant to the terms of the Rogers Employment Agreement, October 1, 2021, Mr.

Rogers was issued a restricted stock grant under our Stock Incentive Plan, as amended (the "Plan"), of 37,500 shares of the Company’s common stock, vesting upon issuance, and the grant to Mr.

Rogers of a restricted stock grant under the Plan of 200,000 shares of our common stock, vesting monthly over two years.

Galvin was increased to $ 500,000 .

On September 19, 2023, Mr.

Galvin’s employment agreement was amended to increase Mr.

Galvin’s annual base salary to $ 750,000 .

On May 1, 2023, we engaged Patricia Kaelin to serve as our Chief Financial Officer with an annual base salary of $ 250,000 , which was increased to $ 300,000 on July 26, 2023.

The Compensation Committee has recommended that the Board approve an increase to Ms.

Kaelin’s salary to $ 350,000 in 2024 .

On December 7, 2020, the Company appointed William Rogers to serve as the Company’s Chief Operating Officer with an annual base salary of $ 300,000 per year.

Rogers’ employment with us terminated on December 31, 2023.

See “-Employment Agreements.”

Bonus Payments

Bonus’ were accrued in 2022 for Mr.

Bonuses were accrued in 2022 for Mr.

Galvin for $ 50,000 and Mr.

1 unchanged sentence

Galvin was paid $ 50,000 of his 2022 bonus during 2022 .

Bonus’ were accrued in 2021 for Mr.

Galvin for $100,000, Mr.

Rogers for $75,000 and Mr.

Sheeran for $56,250 and subsequently paid in 2022.

Sheeran had a bonus of $8,000 in 2021 that was approved by management prior to Mr.

Sheeran entering into the executive employment agreement.

On September 26, 2023 the Compensation Committee approved a cash bonus of $ 35,100 be paid to Mr.

Galvin for his service to the Company in connection with the Separation and Distribution.

In addition, the Compensation Committee has recommended that the Board approve 2023 bonuses of $ 350,000 for Mr.

Galvin and $ 100,000 for Ms.

Kaelin to be paid in cash, equity or a combination of cash and equity ;

this was approved by the full Board on February 27, 2024.

Equity Awards

During 2022 and 2023 , we granted restricted stock unit awards to our key employees, including our named executive officers, as the long-term incentive component of our compensation program.

On November 3, 2022, the Compensation Committee granted Mr.

Galvin an award of 250,000 restricted stock units (RSUs) (12,500 as adjusted for the May Stock Split) under our stock incentive plan, vesting quarterly over two years.

On April 4, 2023, Mr.

Galvin was granted an award of 126,000 RSUs (6,300 as adjusted for the May Stock Split).

We anticipate that the Company will, in 2024, issue to Mr.

Galvin RSUs representing a contingent right to receive such number of shares of Common Stock as will result in him owning a total of 9.9% of our outstanding shares of our Common Stock.

On May 10, 2023, Ms.

Kaelin was granted an award of 60,000 RSUs (3,000 as adjusted for the May Stock Split) which vested upon issuance.

The Compensation Committee has recommended that the Board approve an award of 300,000 RSUs (15,000 as adjusted for the May Stock Split) to Ms.

Kaelin in 2024.

This was approved by the full Board on February 27, 2024.

On May 4, 2023, the Board took action to vest in full 1,627,773 RSUs (81,389 as adjusted for the May Stock Split) granted under the Company’s stock incentive plan, which included 476,049 RSUs (23,802 as adjusted for the May Stock Split) granted to Mr.

Galvin and 86,960 RSUs (4,348 as adjusted for the May Stock Split) granted to Mr.

The Company expects to submit payment for each of Mr.

Galvin and Mr.

Rogers for a portion of the taxes paid by them in respect of the accelerated vesting.

Employment Agreements

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We employ Mr.

Galvin, our Chief Executive Officer, Interim Chief Financial Officer and Chairman of the Board, pursuant to an employment agreement, effective January 1, 2017.

Galvin, our Chief Executive Officer and Chairman of the Board, pursuant to an employment agreement, effective January 1, 2017.

The employment agreement provided for an initial term of two years, with automatic renewals unless earlier terminated pursuant to the provisions of the employment agreement.

7 unchanged sentences

In July 2022, we entered into an amendment to Mr.

Galvin’s employment agreement to increase his annual base salary to $ 500,000 and in September 2023 we entered into an amendment to Mr.

Galvin’s employment agreement to increase his annual base salary to $ 750,000 .

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

Patricia Kaelin.

On May 1, 2023, we entered into an employment agreement with Patricia Kaelin, our Chief Financial Officer, (the “Kaelin Employment Agreement”) to employ Ms.

Kaelin in such capacity for an initial term of two (2) years, which Kaelin Employment Agreement provides for an annual base salary of $250,000, which was increased to $300,000 on July 26, 2023, a discretionary bonus of up to 20% of her base salary upon achievement of objectives as may be determined by the Board of Directors and severance in the event of a termination without cause on or after September 30, 2023 in amount equal to one year’s annual base salary and benefits.

The Kaelin Employment Agreement also provides for the grant to Ms.

Kaelin of a restricted stock grant under the stock incentive plan, as amended and as available for grant, of 60,000 shares of Common Stock (3,000 as adjusted for the May Stock Split) , vesting quarterly on a pro-rata basis over the next eighteen (18) months of continuous service.

On May 10, 2023, Ms.

Kaelin was granted an award of 60,000 RSUs (3,000 as adjusted for the May Stock Split) which were fully vested upon issuance.

William Rogers

On September 27, 2021, we entered into an executive employment agreement with William Rogers to employ Mr.

Rogers as the Company’s Chief Operating Officer for an initial term of two (2) years, which provides for an annual base salary of $300,000, a discretionary bonus of up to 25% of his base salary upon achievement of objectives as may be determined by the Company’s board of directors, term life insurance coverage equal to two (2) times annual base salary, three weeks’ vacation and severance in the event of a termination without cause in amount equal to one year’s annual base salary and benefits.

On September 27, 2021, we entered into an executive employment agreement with William Rogers (the “Rogers Employment Agreement”) to employ Mr.

Rogers as the Company’s Chief Operating Officer for an initial term of two ( 2 ) years, which provided for an annual base salary of $ 300,000 , a discretionary bonus of up to 25 % of his base salary upon achievement of objectives as may be determined by the Company’s board of directors, term life insurance coverage equal to two ( 2 ) times annual base salary, three weeks’ vacation and severance in the event of a termination without cause in amount equal to one year’s annual base salary and benefits.

Pursuant to the terms of the Rogers Employment Agreement, October 1, 2021, Mr.

Rogers was issued a restricted stock grant under our Plan of 37,500 shares of the Company’s common stock, vesting upon issuance, and a restricted stock grant under the Plan of 200,000 shares of our common stock, vesting monthly over two years.

Rogers was issued a restricted stock grant under our stock incentive plan of 37,500 shares of the Company’s Common Stock (1,875 as adjusted for the May Stock Split) , vesting upon issuance, and a restricted stock grant under the stock incentive plan of 200,000 shares of our Common Stock (10,000 as adjusted for the May Stock Split) , vesting monthly over two years.

Rogers is subject to a one -year post-termination non-compete and non-solicit of employees and clients.

He is also bound by confidentiality provisions.

Gerald Sheeran

On September 30, 2021, we entered into an executive employment agreement with Gerald Sheeran to employ Mr.

Sheeran as the Company’s Acting Chief Financial Officer for an initial term of two (2) years, which provides for an annual base salary of $225,000, a discretionary bonus of up to 25% of his base salary upon achievement of objectives as may be determined by the Company’s board of directors, a car allowance and severance in the event of a termination without cause in amount equal to equal to one year’s annual base salary and benefits.

Pursuant to the terms of the employment agreement, we issued a restricted stock grant under the Plan of 100,000 shares of common stock, vesting quarterly over two (2) years.

Sheeran is subject to a one-year post-termination non-compete and non-solicit of employees and clients.

He is also bound by confidentiality provisions.

Sheeran’s employment terminated on May 12, 2022.

As part of his separation agreement, Mr.

Sheeran received cash consideration of $131,250 as well as 22,000 shares of restricted common stock.

David Villarreal

On February 3, 2023, SG DevCorp.

entered into an executive employment agreement with David Villarreal to employ Mr.

board of directors and severance in the event of a termination without cause in amount equal to equal to one year’s annual base salary and benefits.

Pursuant to the terms of the employment agreement, subject to SG DevCorp.

Board of Directors approval, SG DevCorp.

agreed to issue to Mr.

Villarreal a restricted stock grant of under SG DevCorp.’s 2023 Incentive Compensation Plan for six hundred fifty thousand shares (650,000) shares of SG DevCorp.'s common stock, vesting fifty percent (50%) upon issuance, with the balance vesting quarterly on a pro-rata basis over the next eighteen (18) months of continuous service.

Villarreal is subject to a one-year post-termination non-compete and non-solicit of employees and clients.

He is also bound by confidentiality provisions.

On November 3, 2022, the Company's Compensation Committee (the “Compensation Committee”) of the Board of Directors of Safe & Green granted Paul Galvin, the Company’s Chairman and CEO, an award of 250,000 restricted stock units (RSUs) under the Plan vesting quarterly over two years.

Rogers employment with us terminated on December 31, 2023.

On October 20, 2023, we entered into a mutual settlement and release agreement with Mr.

Rogers (the “Release Agreement”) pursuant to which (i) we agreed to pay Mr.

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

(ii) we and Mr.

Rogers agreed to extend the Rogers Employment Agreement through December 31, 2023, at which point the Rogers Employment Agreement ended as a mutual termination;

(iii) we and Mr.

Rogers agreed that Mr.

Rogers’ title under the Rogers Employment Agreement changed from COO to Project Development Advisor, as of October 20, 2023, and he reported to David Villarreal for the remaining term of the Rogers Employment Agreement and all other terms of the Rogers Employment Agreement remained unchanged, including Mr.

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

(iv) Safe and Green Development Corporation and Mr.

Rogers entered into a consulting agreement that commenced on January 1, 2024, which consulting agreement was entered into on October 20, 2023, and was effective January 1, 2024.

Retirement, Health, Welfare, and Additional Benefits

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Unexercisable

units of stock

that have not

units of stock

that have not

Patricia Kaelin

William Rogers

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A portion of the shares were granted at an exercise price to equal the price per share at which the public purchased shares in the offering ($ 100.00 per share), while the remainder were granted at an exercise price equal to 120 % of such price per share ($ 120.00 per share).

In September 2017, the Compensation Committee determined that each of Mr.

Galvin met his respective performance conditions, and the option awards vested in full.

(2) With respect to Mr.

Galvin, 990 options vested on the grant date, while the remaining 3,851 vested in equal quarterly installments on the last day of each fiscal quarter following the date of grant over a two-year period.

In September 2017, the Compensation Committee determined that Mr.

Galvin met his performance conditions and the option awards vested in full.

Of these options, 990 vested on the grant date, while the remaining 3,851 vested in equal quarterly installments on the last day of each fiscal quarter following the date of grant over a two -year period.

All options vested in full as of December 31, 2018.

(3) Of these options, 2,184 vested on the grant date, while the remainder vest in three equal installments of 910 on the three anniversaries following the grant date.

Of these options, 2,184 vested on the grant date, while the remainder vested in three equal installments of 910 on the three anniversaries following the grant date.

Such options vested in full as of November 1, 2019.

Galvin received these options in connection with their service as directors of the Company.

The options vested in equal quarterly installments on the last day of each fiscal quarter following the date of grant and vested in full as of September 30, 2017.

(5) These options vest in equal quarterly installments over a two year period, beginning March 31, 2018, and vested in full as of December 31, 2019.

(6) The shares subject to these restricted stock units vest in equal installments over a two year period, beginning November 3, 2022 and vest in full as of October 1, 2024.

(7) The shares subject to these restricted stock units vest in quarterly installments over a two year period, beginning October 1, 2021, and vest in full as of September 30, 2023.

(8) The shares subject to these restricted stock units vest in equal monthly installments over a two year period, beginning October 1, 2021, and vest in full as of September 30, 2023.

These options vested in equal quarterly installments on the last day of each fiscal quarter following the date of grant and vested in full as of September 30, 2017.

These options vested in equal quarterly installments over a two -year period, beginning March 31, 2018, and vested in full as of December 31, 2019.

DIRECTOR COMPENSATION

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Nominating, Environmental, Social and Corporate Governance Committee Chair

The above fees are to be paid quarterly in four equal installments, to each person serving as a non-employee director at the time when such payment is made.

Non-employee directors may choose to receive the annual Board retainer as equity in restricted stock units (“RSUs”), in, effective January 15 of the year in which the annual cash retainer is otherwise earned.

Among other things, each RSU granted represents the right to receive one share of Common Stock;

vests one year after grant, subject to the recipient’s continued service as a director of the Company through such date;

and is payable six months after the termination of the director from the Board or death or disability.

The above cash fees were to be paid quarterly in four equal installments, to each person serving as a non-employee director at the time when such payment is made.

Non-employee directors may choose to receive the annual Board retainer as equity in the form of restricted stock units or stock options.

Directors receive no additional per-meeting fee for Board or committee meeting attendance.

Annual Equity Awards

In addition, pursuant to the Plan, during 2022 non-employee directors received an annual grant of 80,000 RSUs (the “Equity Awards”), with a grant date value of approximately $104,000.

The RSUs were issued on November 18, 2022 and vest quarterly over two years from the date of grant and, if earlier, in full on the date of the 2023 Annual Meeting of Shareholders.

All director fees owed for 2023 will be paid in the first quarter of 2024 in restricted stock units or stock options, at each director’s election.

Equity Awards

In addition, our director compensation program for 2023 provided that each director was to receive, pursuant to our stock incentive plan, an equity grant of restricted stock units with a grant date value of approximately $80,000 that would vest quarterly over two years, subject to such director’s continued service as a director.

During 2023, each of Messrs.

Blumenfeld, Melton, and Hawkins and Ms.

Cormier-May received a grant of 37,500 RSUs (1,875 as adjusted for the May Stock Split) , with a grant date value of approximately $37,875, vesting quarterly over two years.

Villareal, who also serves as the Chief Executive Officer of Safe and Green Development Corporation, received a grant of 118,166 RSUs (5,908 as adjusted for the May Stock Split) , with a grant date value of $119,348, vesting quarterly over two years.

See “- Other Agreements” for a description of Ms.

Villaverde’s 2023 equity grant.

All director equity awards owed for 2023 will be paid in the first quarter of 2024 in restricted stock units or stock options, at each director’s election.

On May 4, 2023, the Board took action to vest in full 1,627,773 RSUs (81,389 as adjusted for the May Stock Split) granted under the Company’s stock incentive plan, 140,105 RSUs (7,005 as adjusted for the May Stock Split) granted to Mr.

Villarreal, 59,439 RSUs (2,972 as adjusted for the May Stock Split) granted to Mr.

Melton, 37,500 RSUs (1,875 as adjusted for the May Stock Split) granted to Ms.

May-Cormier, 37,500 RSUs (1,875 as adjusted for the May Stock Split) granted to Mr.

Hawkins, and 68,814 RSUs (3,441 as adjusted for the May Stock Split) granted to Mr.

The Company expects to reimburse each of such directors for a portion of the taxes paid by them in respect of the accelerated vesting.

Other Agreements

On February 3, 2023, Safe and Green Development Corporation entered into an executive employment agreement with David Villarreal to employ Mr.

Villarreal as its President and Chief Executive Officer for an initial term of two ( 2 ) years, which provides for an annual base salary of $ 300,000 , a discretionary bonus of up to 25 % of his base salary upon achievement of objectives as may be determined by the SG DevCorp board of directors and severance in the event of a termination without cause in amount equal to one year’s annual base salary and benefits.

Pursuant to the terms of the employment agreement, subject to SG DevCorp’s board of directors approval, SG DevCorp agreed to issue to Mr.

Villarreal a restricted stock grant of under SG DevCorp’s 2023 Incentive Compensation Plan for six hundred fifty thousand ( 650,000 ) shares of SG DevCorp’s common stock, vesting fifty percent ( 50 %) upon issuance, with the balance vesting quarterly on a pro-rata basis over the next eighteen ( 18 ) months of continuous service.

Villarreal is subject to a one -year post-termination non-compete and non-solicit of employees and clients.

He is also bound by confidentiality provisions.

On December 20, 2023, Vanessa Villaverde notified the Company of her decision to resign, effective December 31, 2023, from her position as a member of the Board and the Nominating, Environmental, Social and Corporate Governance Committee.

The Company entered into a Mutual Separation and Release Agreement (the “Separation Agreement”) with Ms.

The Separation Agreement provides that the Company shall, on or before December 31, 2023, pay to Ms.

Villaverde all outstanding board fees.

The Agreement also contains a non-disparagement obligation on both parties and a release of claims.

Pursuant to the Separation Agreement, the Company paid Ms.

Villaverde outstanding board fess of $ 20,000 and granted her 42,553 RSUs with a grant date value of approximately $ 20,034 , which were fully vested upon issuance.

Additional Compensation

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Yaniv Blumenfeld ( 3 )

Maggie Coleman

Thomas Meharey ( 4 )

Christopher Melton

Joseph Safina (3)

Vanessa Villaverde ( 5 )

Jill Anderson ( 6 )

Elizabeth Cormier-May(7)

David Villarreal ( 8 )

Shafron Hawkins

(1) This column indicates the aggregate grant date fair value, as determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation (“FASB ASC Topic 718”), of the RSUs granted in November 2022.

(2) Does not include $ 66,296 paid to a company controlled by Mr.

Blumenfeld for development work related to the Company’s Lago Vista project and $75,000 in consulting fees paid to Mr.

Blumenfeld’s spouse in connection with the Company’s Covid 19 testing program.

Safina and Mr.

Villarreal joined the Board in May 2021 and Mr.

Safina resigned as a Board member on November 20,2022.

Hawkins joined the Board on December 22, 2022.

The aggregate number of option and stock awards outstanding (including exercisable and unexercised stock options and vested and unvested RSUs) as of December 31, 2022 for each non-employee director was as follows:

Option Awards

Yaniv Blumenfeld

Maggie Coleman

Christopher Melton

Joseph Safina

David Villareal

Shafron Hawkins

As of December 31, 2023, none of the directors held any options or unvested restricted stock units.

Amounts to be paid in equity in 2024 related to 2023 compensation as described in “ – Compensation Program” are not included in this table.

Melton received 192,351 options, Mr.

Meharey received 75,433 RSUs, Ms.

Hawkins received 186,694 options, Ms.

Anderson received 42,259 options and 93,347 RSUs, and Mr.

Villarreal received 181,036 RSUs.

Blumenfeld resigned as a Board member effective as of April 28, 2023.

Meharey joined the Board in October 2023.

Villaverde joined the Board in August 2023 and resigned as a Board member effective as of December 31, 2023.

Anderson joined the Board in August 2023.

Cormier-May resigned as a Board member on September 22, 2023.

This table does not include amounts paid to Mr.

Villarreal in 2023 by SG DevCorp for his services as Chief Executive Officer of SG DevCorp.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

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Except as otherwise indicated, and subject to applicable community property laws, except to the extent authority is shared by both spouses under applicable law, the Company believes the persons named in the table have sole voting and investment power with respect to all shares of common stock held by them.

The following table sets forth certain information, as of March 29, 2023 , with respect to the beneficial ownership of our common stock by each of the following:

The following table sets forth certain information, as of April 12, 2024 , with respect to the beneficial ownership of our common stock by each of the following:

· each person who is known by us to be the beneficial owner of more than 5 % of our outstanding stock;

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· all of our directors and executive officers as a group.

As of March 29, 2023, we had 14,314,800 shares of common stock outstanding.

As of April 12 , 2024, we had 21,917,896 shares of common stock (1,095,895 as adjusted for the May Stock Split) outstanding.

We have determined beneficial ownership in accordance with the rules of the SEC.

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Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws .

Shares subject to Options &

Total Number of Shares

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table shows the ownership of our Common Stock beneficially owned by our current directors, named executive officers, our directors and current executive officers as a group and our 5 % stockholders as of April 12, 2024 and as adjusted to reflect the sale of the securities offered by us in this offering (assuming no issuance of Pre-Funded Warrants and no exercise of Common Warrants or Placement Agent Warrants), by (i) each current director, (ii) each named executive officer, (iii) each person who we know to be the beneficial owner of more than 5 % of our Common Stock, and (iv) all current directors and executive officers as a group.

The persons named in the table have sole voting and investment power with respect to all shares of our Common Stock shown as beneficially owned by them.

Percentage ownership is based on 21,917,896 shares of our Common Stock (1,095,895 as adjusted for the May Stock Split) outstanding as of April 12, 2024.

Name of Beneficial Owner

Executive Officers & Directors

Galvin, Chairman and Chief Executive Officer

Yaniv Blumenfeld, Director ( 3 )

Patricia Kaelin, Chief Financial Officer

William Rogers, Former Chief Operating Officer

Jill Anderson, Director

Shafron Hawkins, Director

Thomas Meharey, Director

Christopher Melton, Director

Elizabeth Cormier-May, Director

William Rogers ( 6 )

Gerald Sheeran, Former Acting Chief Financial Officer (6)

David Villarreal, Director

Shafron Hawkins

All Named Executive Officers and Directors, as a group ( 9 persons)

Greater than 5% stockholders other than executive officers and directors

Group One Trading, LP (8)

All current executive officers and directors as a group ( 7 persons)

5 % Stockholders other than executive officers and directors

John William Shaw

Less than 1 % ownership interest.

(1) The number of shares and the percent beneficially owned by each entity or individual are based upon 14,314,800 shares of common stock outstanding and assume the exercise of all exercisable options and vesting of all outstanding time-based restricted stock units (including those that would be exercisable or vested within 60 days of March 29, 2023).

The percent beneficially owned is a fraction, the numerator of which is the number of shares of common stock beneficially owned by each entity or individual (including any exercisable options, as described herein) and the denominator of which is the number of outstanding shares of common stock plus the number of shares of common stock which would be issued upon (i) exercise by the subject entity or individual of such entity or individual’s own options and warrants and (ii) vesting of outstanding time-based restricted stock units.

This method of computing the percent beneficially owned results in the aggregate ownership percentages of all owners exceeding 100%.

(2) Includes 384,172 shares of common stock held directly by Mr.

Galvin and 507 shares held by TAG Partners, LLC (“TAG”), an investment partnership formed for the purpose of investing in the Company.

The securities “beneficially owned” by a person are determined in accordance with the definition of “beneficial ownership” set forth in the regulations of the SEC and, accordingly, may include securities owned by or for, among others, the spouse, children or certain other relatives of such person as well as other securities as to which the person has or shares voting or investment power.

The same shares may be beneficially owned by more than one person.

Shares of Common Stock currently issuable or issuable within 60 days of April 12, 2024 upon the exercise of options or vesting of restricted stock units are deemed to be outstanding in computing the beneficial ownership and percentage of beneficial ownership of the person holding such securities, but they are not deemed to be outstanding in computing the percentage of beneficial ownership of any other person.

Beneficial ownership does not include stock options and restricted stock units which have not vested as of, and will not vest within 60 days of, January 30, 2024.

Beneficial ownership may be disclaimed as to certain of the securities.

Includes 856,443 shares of Common Stock (42,822 as adjusted for the May Stock Split) held directly by Mr.

Galvin and 507 shares (25 as adjusted for the May Stock Split) held by TAG Partners, LLC (“TAG”), an investment partnership formed for the purpose of investing in the Company.

Galvin is a managing member of, and has a controlling interest in, TAG and may be deemed to beneficially own the share of Common Stock held by TAG, over which he has shared voting and dispositive power.

Galvin disclaims beneficial ownership of the shares of Common Stock held by TAG except to the extent of his pecuniary interest therein.

Also includes 23,800 options to purchase our common shares presently exercisable or exercisable within 60 days of March 29, 2023.

Includes 72,010 in vested RSUs and does not include 275,000 unvested RSUs that will not vest within 60 days of March 29, 2023.

(3) Includes 44,029 shares of common stock directly held by Mr.

Includes 7,791 in vested RSUs and does not include 15,896 unvested RSUs that will not vest within 60 days of March 29, 2023.

(4) Includes 20 shares of common stock held in Mr.

Also includes 23,800 (1,190 as adjusted for the May Stock Split) options to purchase our Common Stock presently exercisable.

Includes 200 shares of Common Stock (10 as adjusted for the May Stock Split) held in Mr.

Melton’s retirement account, which Mr.

Melton indirectly owns, and 27,385 shares of common stock held directly by Mr.

Includes 833 options held by Mr.

Melton to purchase our common stock presently exercisable or exercisable within 60 days of March 29, 2023.

Includes 8,777 in vested RSUs and does not include 15,000 unvested RSUs that will not vest within 60 days of March 29, 2023.

(5) Includes 94,807 shares of common stock directly held by Mr.

Includes 28,627 in vested RSUs and and does not include 58,333 unvested RSUs that will not vest within 60 days of March 29, 2023.

Includes 45,908 shares of common stock held by Mr.

Also includes 1,250 options to purchase common stock presently exercisable or exercisable within 60 days of March 29, 2023.

Includes 40,842 in vested RSUs.

(7) Includes 9,895 shares of common stock directly held by Mr.

Includes 6,939 in vested RSUs and does not include 15,000 unvested RSUs that will not vest within 60 days of March 29, 2023.

(8) Information is based upon a Schedule 13G filed with the SEC on June 3, 2022 by Kyle Tondo-Kramer, the Chief Compliance Officer of Group One Trading, LP.

The address of Group One Trading, LP is 425 S.

Financial Place, Suite 3400, Chicago, Illinois 60605.

(9) Information is based upon a Schedule 13D filed with the SEC on March 29, 2023 by John William Shaw.

Melton indirectly owns, and 88,482 shares of Common Stock (4,424 as adjusted for the May Stock Split) held directly by Mr.

The address of Mr.

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Las Tunas Drive, # 116 , San Gabriel, California 91776 .

This amount (a) includes the rights to purchase 734,500 shares in the aggregate that are exercisable subject to various call option contracts and (b) excludes short put option contracts pursuant to which the Reporting Person may be required to purchase up to 1,306,100 shares in the aggregate.

Equity Compensation Plan Information

See Part II, Item 5 — Equity Compensation Plan Information for certain information regarding our equity compensation plans.

Certain Relationships and Related Transactions, and Director Independence.

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

On or about September 14, 2021, the Company and its former President and Chief Financial Officer, Mahesh Shetty, entered into a settlement and release agreement resolving their respective claims.

On September 14, 2021, the parties filed a joint motion seeking court approval of the settlement.

The motion to approve the settlement remains pending before the court.

During 2021 , the Company paid a company controlled by Yaniv Blumenfeld $ 66,296 for development work related to the Company’s Lago Vista project and paid Mr.

Blumenfeld’s spouse $ 75,642 in consulting fees in connection with the Company’s COVID- 19 testing program.

On December 14, 2023, Mr.

Galvin, loaned $ 75,000 to the Company.

The loan was evidenced by a promissory note.

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.

Loan Transactions with SG DevCorp

During 2021 , SG DevCorp received $ 4,200,000 from due to affiliates.

This amount was advanced to SG DevCorp by us, was evidenced by a promissory note, non-interest bearing and was due on demand.

Included in this amount, were payroll and general and administrative expenses which were paid by us and allocated to SG DevCorp.

On August 9, 2023, we and SG DevCorp entered into a Note Cancellation Agreement, effective as of July 1, 2023, pursuant to which we cancelled and forgave the remaining $ 4,000,000 balance then due on that certain promissory note, dated December 19, 2021, made by SG DevCorp in favor of us in the original principal amount of $ 4,200,000 .

In addition, as of September 30, 2023, $ 1,717,694 is due from us for advances made by the SG DevCorp.

The Spin-Off of SG DevCorp

In connection with the Separation and Distribution, we entered into a separation and distribution agreement and several other agreements with SG DevCorp to effect the Separation and provide a framework for our relationship with SG DevCorp after the Separation.

These agreements provide for the allocation between us, on the one hand, and SG DevCorp, on the other hand, of the assets, liabilities and obligations associated with the spin-off business, on the one hand, and our other current businesses, on the other hand, and will govern the relationship between our company, on the one hand, and SG DevCorp, on the other hand, subsequent to the Separation and Distribution (including with respect to transition services, employee matters and tax matters).

Separation and Distribution Agreement

The separation and distribution agreement governs the overall terms of the Separation and Distribution and specified those conditions that must be satisfied or waived by us prior to the completion of the Separation.

We and SG DevCorp each agreed to indemnify the other and each of the other’s current and former directors, officers, and employees, and each of the heirs, executors, administrators, successors, and assigns of any of them, against certain liabilities incurred in connection with the Separation and Distribution and our and SG DevCorp’s respective businesses.

The amount of either SG DevCorp’s or our indemnification obligations will be reduced by any net insurance proceeds the party being indemnified receives.

The separation and distribution agreement also establishes procedures for handling claims subject to indemnification and related matters.

Tax Matters Agreement

In connection with the Separation, we and SG DevCorp entered into a tax matters agreement that contains certain tax matters arrangements and governs the parties’ respective rights, responsibilities, and obligations with respect to taxes, including taxes arising in the ordinary course of business and taxes incurred as a result of the Separation and the Distribution.

The tax matters arrangement also sets forth the respective obligations of the parties with respect to the filing of tax returns, the administration of tax contests, and assistance and cooperation on tax matters.

The tax matters agreement governs the rights and obligations that we and SG DevCorp have after the Separation with respect to taxes for both pre- and post-closing periods.

Under the tax matters arrangement, SG DevCorp will be responsible for (i) any of SG DevCorp’s taxes for all periods prior to and after the Distribution and (ii) any taxes of the Safe & Green group for periods prior to the Distribution to the extent attributable to the real estate development business.

We generally will be responsible for any of the taxes of the Safe & Green group other than taxes for which SG DevCorp is responsible.

In addition, we will be responsible for our taxes arising as a result of the Separation and Distribution.

Notwithstanding the foregoing, sales, use, transfer, real property transfer, intangible, recordation, registration, documentary, stamp or similar taxes imposed on the Distribution shall be borne fifty percent ( 50 %) by us and fifty percent ( 50 %) by SG DevCorp.

We shall be entitled to any refund (and any interest thereon received from the applicable tax authority) of taxes for which we are responsible for under the tax matters agreement and SG DevCorp shall be entitled to any refund (and any interest thereon received from the applicable tax authority) of taxes for which SG DevCorp is responsible for under the tax matters agreement.

Each of Safe & Green and SG DevCorp will indemnify each other against any taxes allocated to such party under the tax matters agreement and related out-of-pocket costs and expenses.

Shared Services Agreement

In connection with the Separation, we entered into a shared services agreement with SG DevCorp which sets forth the terms on which we provide to SG DevCorp certain services or functions that the companies historically have shared.

Shared services will include various administrative, accounting, communications/investor relations, human resources, operations/construction services, and strategic management and other support services.

In consideration for such services, SG DevCorp pays fees to us for the services provided, and those fees are generally in amounts intended to allow us to recover all of its direct and indirect costs incurred in providing those services.

We charge SG DevCorp a fee for services performed by (i) our employees which is a percentage of each employee’s base salary based upon an allocation of their business time spent providing such services and (ii) third parties, the fees charged by such third parties.

SG DevCorp also pay us for general and administrative expenses incurred by us attributable to both the operation of Safe & Green (other than the provision of the services performed by our employees) and the provision of the shared services, including but not limited to information technology, data subscription and corporate overhead expenses, the portion of such costs and expenses that are attributable to the provision of the shared services, as reasonably determined by us.

SG DevCorp also reimburses us for direct out-of-pocket costs incurred by us for third party services provided to SG DevCorp.

Other Related Party Transactions

Fabrication Agreement

On December 2, 2022, SG DevCorp entered into the Fabrication Agreement with SG Echo for the fabrication of approximately 800 multifamily market rate rental units, equal to approximately 800,000 square feet of new modular buildings to be located at the McLean site (the “McLean Project”).

The Fabrication Agreement provided that SG Echo would be paid a fee equal to 15 % of the cost of the McLean Project.

The McLean Project will be fabricated in Phases of 100 to 150 units per phase, with the schedule of the phasing to be determined in SG DevCorp’s sole discretion.

The terms of payment are as follows:

(i) down payment of 30 % upon release of project for fabrication;

(ii) stage payment of 65 % upon completion of fabrication, testing and inspection of each unit as it leaves the facility;

and (iii) final payment of 5 % upon completion of installation on site, including acceptance of punch list items, startup of equipment and City of Durant inspection.

Notwithstanding the foregoing, SG DevCorp may withhold 10 %, as retainage, from the payment otherwise due, to be reduced to 5 % after field install is watertight and 2.5 % after all punch list items have been complete.

The Fabrication Agreement may be terminated for cause by either party upon 30 -days written notice to the other party, subject to each party’s right to cure a default or breach, except for fraud or bad faith.

In the event of termination, SG Echo will be entitled to be paid for all services rendered through the date of termination.

In the event the termination by SG DevCorp is without cause, SG DevCorp will also pay any expenses incurred as a result of the termination (including without limitation supplier and vendor cancellation fees, restocking fees, subcontractor termination or cancellation fees, or other similar termination costs), plus a 15 % markup as compensation for SG Echo’s anticipated profit on the value of services not performed by SG Echo.

In connection with the entry into the Master Purchase Agreement, on December 18, 2023, SG DevCorp and SG Echo terminated that certain Fabrication Agreement, dated December 2, 2022, between the parties relating to the McLean mixed-use site.

Master Purchase Agreement

The Master Purchase Agreement provides that SG Echo will be paid a fee equal to 12 % of the agreed cost of each project.

The Master Purchase Agreement further provides that payment terms for all design work and the completion of the pre-fabricated container and module shall be made in accordance with the following schedule:

(a) a deposit equal to 40 % of the cost of the pre- fabricated container and module only shall be paid by SG DevCorp to SG Echo within 5 business days of the mutual execution of a project order;

(b) a progress payment (not to exceed to 35 % of the cost of the pre-fabricated container and module) shall be paid by SG DevCorp to SG Echo monthly in proportion to the percentage of Work completed, which payment shall be made within 10 business days of the SG DevCorp’s receipt of SG Echo’s invoice;

(c) a progress payment equal to 15 % of the cost of the pre-fabricated container and module shall be paid by SG DevCorp to SG Echo within 10 business days of the delivery of the pre-fabricated container and module to the specific project site;

and (d) the final payment equal to 10 % of the cost of the pre-fabricated container and module only shall be paid by SG DevCorp to SG Echo within 10 business days of the substantial completion of the Work.

Substantial completion of the Work shall be as defined by the applicable project order.

Notwithstanding the foregoing, SG DevCorp may withhold 10 % of the invoiced amount, as retainage, which will be paid to SG Echo once the specific project is completed (including any punch list items).

The Master Purchase Agreement may be terminated by either party if there is a material default by the other party and such default continues for a period of 20 days after receipt by the defaulting party of written notice thereof.

If SG DevCorp terminates the Master Purchase Agreement or any project order as a result of a default by SG Echo, SG Echo will not be entitled to receive further payment until the Work is finished.

If the unpaid balance of the amount set forth in the project order for the project is less than the cost of finishing the Work, SG Echo will pay the difference to SG DevCorp.

In no event will SG Echo be entitled to receive any compensation if the cost to SG DevCorp of performing the balance of the Work is less than the unpaid balance.

In addition, SG DevCorp may terminate the Master Purchase Agreement or any project order without cause.

In the event the termination by SG DevCorp is without cause, SG Echo will be entitled to payment for all work and costs incurred prior to termination date plus the applicable fee owed to SG Echo thereon as more particularly described in the applicable project order.

The initial project for which modular construction services are anticipated to be provided to SG DevCorp by SG Echo is the Magnolia Gardens residential project to be built on the McLean mixed-use site in Durant, Oklahoma, consisting of 800 residential units.

In accordance with the Master Purchase Agreement, SG Echo will provide SG DevCorp with an itemized cost proposal for the services to be performed for the Magnolia Gardens residential project and a firm schedule for performing the services.

If the proposal and schedule is satisfactory to SG DevCorp, the proposal will be then incorporated into a project order to be executed by both parties.

Related Party Review Procedures

14 unchanged sentences

Principal Accountant Fees and Services.

Whitley Penn LLP serves as our independent registered public accounting firm.

Change in Certifying Accountant

The Board of Directors of the Company, through its Audit Committee conducted a competitive process to determine the Company’s independent registered public accounting firm commencing with the audit of the Company’s books and financial records for the year ending December 31, 2023.

The Audit Committee invited several independent registered public accounting firms to participate in this process.

Following review of proposals from the independent registered public accounting firms that participated in the process, on December 13, 2023, upon recommendation from the Audit Committee, the Board of Directors of the Company approved the engagement of M&K CPAS PLLC (“M&K”) as the Company’s independent registered public accounting firm for the Company’s fiscal year ending December 31, 2023.

On December 15, 2023, the Company (i) entered into an engagement letter with M&K and engaged M&K as the Company’s independent registered public accounting firm effective immediately and (ii) dismissed Whitley Penn LLP (“Whitley Penn”).

Independent Registered Public Accounting Firm Fees

The following table sets forth the aggregate fees for professional service rendered by Whitley Penn for each of the last two fiscal years:

Aggregate fees for professional services rendered by our independent registered public accounting firms to us as of and for the fiscal years ended December 31, 2023 and December 31, 2022 are set forth in the tables below:

Audit fees ( 1 )

Audit-related fees ( 2 )

Tax fees ( 3 )

All other fees ( 4 )

Totals $ 251,500

(1) Audit fees include fees paid to Whitley Penn for professional services rendered for the audit for our annual financial statements and reviews of the financial statements included in our Quarterly Reports on Form 10-Q and fees related to securities registration statements and related comfort letter procedures.

Audit fees include $251,500 paid to Whitley Penn and accrual for M&K in the amount of $118,645 for professional services rendered for the audit for our annual financial statements and reviews of the financial statements included in our Quarterly Reports on Form 10-Q and fees related to securities registration statements and related comfort letter procedures.

Audit-related fees principally involve other assurance and related services.

1 unchanged sentence

No tax services were performed for us by Whitley Penn in 2023 or 2022 .

(4) No other services were performed for us by Whitley Penn in 2022 or 2021 .

No other services were performed for us by Whitley Penn or M&K in 2023 or 2022 .

The Audit Committee has implemented pre-approval procedures consistent with the rules adopted by the SEC.

The Audit Committee has determined that the provision of the services by Whitley Penn reported hereunder had no impact on its independence.

All audit services to be provided to the Company by our independent public accounting firm are pre-approved by the Audit Committee prior to the initiation of such services (except for items exempt from pre-approval requirements under applicable laws and rules).

The Audit Committee has determined that the provision of the services by our independent public accounting firm reported hereunder had no impact on its independence.

Exhibit and Financial Statement Schedules.

(a)( 1 ) INDEX TO 2023 CONSOLIDATED FINANCIAL STATEMENTS:

Our financial statements and the notes thereto, together with the report thereon of Whitley Penn LLP, our registered public accounting firm, dated March 30, 2023 , appear beginning on page F-1 of this Annual Report.

Our financial statements and the notes thereto, together with the reports thereon of M&K CPAS PLLC and Whitley Penn LLP, our registered public accounting firm, dated May 7, 2024 and March 30, 2023 , appear beginning on page F- 1 of this Annual Report.

See of the Consolidated Financial Statements included in this Annual Report.

10 unchanged sentences

Order of the Bankruptcy Court for the Southern District of New York Approving the Disclosure Statement and Setting Plan of Reorganization Confirmation Deadlines (incorporated herein by reference to Exhibit 2.3 to the Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on July 7, 2016 (File No.

Separation and Distribution Agreement by and between the Company and

Safe and Green Development Corporation (incorporated herein by reference to

Exhibit 2.1 to the Current Report on Form 8-K as filed by the Registrant with

the Securities and Exchange Commission on September 28, 2023 (File No.

Amended and Restated Certificate of Incorporation of the Company (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on July 7, 2016 (File No.

8 unchanged sentences

Certificate of Amendment to the Amended and Restated Certificate of Incorporation, as amended, of the Company (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on December 22, 2022 (File No.

Form of Warrant to Purchase Common Stock (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on July 14, 2017 (File No.

4.2 Form of Indenture (incorporated herein by reference to Exhibit 4.2 to the Registration Statement on Form S-3 as filed by the Registrant with the Securities and Exchange Commission on December 18, 2018 (File No.

333-228882)).

4.3 Form of Common Stock Purchase Warrant (incorporated herein by reference to Exhibit 10.1 of the Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on May 1, 2019 (File No.

4.4 Form of Series A Common Stock Purchase Warrant (incorporated herein by reference to Exhibit 10.2 of the Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on May 1, 2019 (File No.

4.5 Form of Representative’s Warrant Agreement (incorporated herein by reference to Exhibit 4.1 of the Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on July 31, 2019 (File No.

4.6 Form of 9% Secured Note (incorporated herein by reference to Exhibit 4.1 of the Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on February 6, 2020 (File No.

Certificate of Amendment to

the Amended and Restated Certificate of Incorporation, as amended, of the

Company (incorporated herein by reference to Exhibit 3.1 to the Current Report

on Form 8-K as filed by the Registrant with the Securities and Exchange Commission

on October 17, 2023 (File No.

Form of Common Stock Purchase Warrant

(incorporated herein by reference to Exhibit 10.1 of the Current Report on Form

8-K as filed by the Registrant with the Securities and Exchange Commission on

May 1, 2019 (File No.

Form of Series A Common Stock Purchase

Warrant (incorporated herein by reference to Exhibit 10.2 of the Current Report

on Form 8-K as filed by the Registrant with the Securities and Exchange

Commission on May 1, 2019 (File No.

Form of Representative’s Warrant

Agreement (incorporated herein by reference to Exhibit 4.1 of the Current

Report on Form 8-K as filed by the Registrant with the Securities and Exchange

Commission on July 31, 2019 (File No.

Form of 9% Secured Note (incorporated

herein by reference to Exhibit 4.1 of the Current Report on Form 8-K as filed

by the Registrant with the Securities and Exchange Commission on February 6,

2020 (File No.

Form of Representative’s Warrant (incorporated herein by reference to Exhibit 4.14 to the Registration Statement on Form S-1/A filed by the Registrant with the Securities and Exchange Commission on May 5, 2020 (File No.

2 unchanged sentences

333-237682)).

4.9* Description of Securities

Description of Securities (incorporated by reference to exhibit 4.9 of the

Annual Report on Form 10-K filed with the SEC on March 31, 2023 (File No.

Debenture, dated February 7, 2023, in the principal amount of $1,100,000 (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on February 7, 2023 (File No.

Description of securities registered pursuant to Section 12 of the Securities Exchange Act of 1924, as amended

Warrant, dated February 7, 2023 (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on February 7, 2023 (File No.

Indenture(incorporated by reference to Exhibit 4.2 to the Registration

Statement on Form S-3 as filed by the Registrant with the Securities and

Exchange Commission on July 24, 2023 (File No.

d at ed November 30, 2023, in the

principal amount of $700,000 (incorporated by reference to Exhibit 4.1 to the

Current Report on Form 8-K as filed by the Registrant with the Securities and

Exchange Commission on December 1, 2023 (File No.

Warrant, dated November 30, 2023

(incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K as

filed by the Registrant with the Securities and Exchange Commission on December

1, 2023 (File No.

d ated January 11, 2024

(incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K as

filed by the Registrant with the Securities and Exchange Commission on January

16, 2024 (File No.

Warrant, dated January 11, 2024

(incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K as

filed by the Registrant with the Securities and Exchange Commission on January

16, 2024 (File No.

Form of Promissory Note by and

between the Company and Paul Galvin (incorporated by reference to Exhibit 10.1

to the Current Report on Form 8-K as filed by the Registrant with the

Securities and Exchange Commission on December 20, 2023 (File No.

dated February 15, 2024 in the principal amount of $250,000 (incorporated

by reference to Exhibit 4.1 of Safe and Green Development Corporation’s Current

Report on Form 8-K filed on February 22, 2024).

dated February 15, 2024 (incorporated by reference to Exhibit 4.2 of

Safe and Green Development Corporation’s Current Report on Form 8-K filed on

February 22, 2024).

Form of the Company Incentive Stock Option Agreement (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on November 1, 2016 (File No.

75 unchanged sentences

(incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on February 7, 2023 (File No.

Loan Agreement dated March

30,2023 between the Company and LV

Peninsula Holding, LLC (incorporated by reference to Exhibit 10.1 to the

Current Report on Form 8-K as filed by the Registrant with the Securities and

Exchange Commission on April 5, 2023 (File No.

Promissory Note d ated March 30, 2023 by and between

the Company and LV Peninsula Holding, LLC (incorporated by reference to Exhibit

10.2 to the Current Report on Form 8-K as filed by the Registrant with the

Securities and Exchange Commission on April 5, 2023 (File No.

Deed of Trust a nd Security Agreement, dated March 30, 2023 by and

between the Company and LV Peninsula Holding, LLC (incorporated by reference to

Exhibit 10.3 to the Current Report on Form 8-K as filed by the Registrant with

the Securities and Exchange Commission on April 5, 2023 (File No.

Assignment of Contract Rights

dated March 30 , 2023 by and between the Company and

LV Peninsula Holding, LLC (incorporated by reference to Exhibit 10.4 to the

Current Report on Form 8-K as filed by the Registrant with the Securities and

Exchange Commission on April 5, 2023 (File No.

Mortgage dated March 30, 2023 by and between

the Company and LV Peninsula Holding, LLC (incorporated by reference to Exhibit

10.5 to the Current Report on Form 8-K as filed by the Registrant with the

Securities and Exchange Commission on April 5, 2023 (File No.

Limited Guaranty, dated March 30,

2023 by and between the Company and LV Peninsula Holding, LLC (incorporated by

reference to Exhibit 10.6 to the Current Report on Form 8-K as filed by the

Registrant with the Securities and Exchange Commission on April 5, 2023 (File

Resignation Letter from Yaniv Blumenfeld

(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as

filed by the Registrant with the Securities and Exchange Commission on May 3,

2023 (File No.

Employment Agreement by and between the Company

and Patricia Kaelin dated as of May 1, 2023 (incorporated by reference to

Exhibit 10.2 to the Current Report on Form 8-K as filed by the Registrant with

the Securities and Exchange Commission on May 3, 2023 (File No.

Standard Cash Advance Agreement, dated May 16,

2023 by and between SG Building Blocks, Inc.

and Cedar Advance LLC

(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as

filed by the Registrant with the Securities and Exchange Commission on May 22,

2023 (File No.

Secured Commercial Promissory Note,

date June 1, 2023 by and between SG Echo LLC and Southstar Financial, LLC

(incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K as

filed by the Registrant with the Securities and Exchange Commission on June 14,

2023 (File No.

Mortgage, date June 1, 2023 by and between SG

Echo LLC and Southstar Financial, LLC (incorporated by reference to Exhibit

10.3 to the Current Report on Form 8-K as filed by the Registrant with the

Securities and Exchange Commission on June 14, 2023 (File No.

Non-Recourse Factoring and Security Agreement,

dated June 1, 2023 by and between SG Echo LLC and Southstar Financial, LLC

(incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K as

filed by the Registrant with the Securities and Exchange Commission on June 14,

2023 (File No.

Secured Continuing Corporate

Guaranty, date June 8, 2023 by and between the Company in favor of SouthStar

Financial LLC (incorporated by reference to Exhibit 10.5 to the Current Report

on Form 8-K as filed by the Registrant with the Securities and Exchange

Commission on June 14, 2023 (File No.

Cr oss-Default and Cross

Collateralization Agreement, date June 8, 2023 by and between the Company, SG

Echo LLC and SouthStar Financial LLC (incorporated by reference to Exhibit 10.6

to the Current Report on Form 8-K as filed by the Registrant with the Securities

and Exchange Commission on June 14, 2023 (File No.

Lo an Agreement, dated as of June 16,

2023, between the Company and BCV S&G DevCorp.

(incorporated by reference

to Exhibit 10.1 to the Current Report on Form 8-K as filed by the Registrant

with the Securities and Exchange Commission on June 29, 2023 (File No.

Escrow Agreement, dated June 21, 2023

among the Company, Bridgeline Capital Partners S.A., acting on behalf BCV

S&G DevCorp, and American Stock Transfer & Trust Company, LLC, as

Escrow Agent (incorporated by reference to Exhibit 10.2 to the Current Report

on Form 8-K as filed by the Registrant with the Securities and Exchange

Commission on June 29, 2023 (File No.

Note Cancellation Agreement, Effective as of July 1, 2023 by and between the

Company and Safe and Green Development Corporation (incorporated by reference

to Exhibit 10.1 to the Current Report on Form 8-K as filed by the Registrant

with the Securities and Exchange Commission on August 11, 2023 (File No.

Promissory Note by and between the

Company and Safe and Green Development Corporation (incorporated by reference

to Exhibit 10.2 to the Current Report on Form 8-K as filed by the Registrant

with the Securities and Exchange Commission on August 11, 2023 (File No.

Amendment No.

1 to Loan Agreement,

dated as of August 25, 2023 by and between the Company and Safe and Green

Development Corporation (incorporated by reference to Exhibit 10.1 to the

Current Report on Form 8-K as filed by the Registrant with the Securities and

Exchange Commission on August 28, 2023 (File No.

Off er Letter by and between the Company

and Vanessa Villaverde dated August 28, 2023 (incorporated by reference to

Exhibit 10.1 to the Current Report on Form 8-K as filed by the Registrant with

the Securities and Exchange Commission on August 29, 2023 (File No.

Offer Letter by and between the

Company and Jill Anderson dated August 30, 2023 (incorporated by reference to

Exhibit 10.1 to the Current Report on Form 8-K as filed by the Registrant with

the Securities and Exchange Commission on September 5, 2023 (File No.

Amendment No.

2 to Loan Agreement dated as of

September 11, 2023 by and between the Company and Safe and Green Development

Corporation (incorporated by reference to Exhibit 10.1 to the Current Report on

Form 8-K as filed by the Registrant with the Securities and Exchange Commission

on September 12, 2023 (File No.

Amendment to Employment Agreement dated as of

September 19, 2023 by and between the Company and Paul Galvin (incorporated by

reference to Exhibit 10.1 to the Current Report on Form 8-K as filed by the

Registrant with the Securities and Exchange Commission on September 19, 2023

Shared Services Agreement by and between the

Company and Safe and Green Development Corporation (incorporated by reference

to Exhibit 10.1 to the Current Report on Form 8-K as filed by the Registrant

with the Securities and Exchange Commission on September 28, 2023 (File No.

Tax Matters Agreement by and

between the Company and Safe and Green Development Corporation (incorporated by

reference to Exhibit 10.2 to the Current Report on Form 8-K as filed by the

Registrant with the Securities and Exchange Commission on September 28, 2023

Amendment No.

4 to the Company’s Stock Incentive

Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form

8-K as filed by the Registrant with the Securities and Exchange Commission on

October 10, 2023 (File No.

Mutual Settlement and Release Agreement by and

between the Company and William Rogers (incorporated by reference to Exhibit

10.1 to the Current Report on Form 8-K as filed by the Registrant with the

Securities and Exchange Commission on October 25, 2023 (File No.

Standard Cash Advance Agreement, dated September

26, 2023, by and between SG Building Blocks, Inc.

and Cedar Advance LLC

(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as

filed by the Registrant with the Securities and Exchange Commission on October

25, 2023 (File No.

Note Subscription Agreement by and between the

Company and E-Lovu Health, Inc.

(incorporated by reference to Exhibit 10.1 to

the Current Report on Form 8-K as filed by the Registrant with the Securities

and Exchange Commission on November 16, 2023 (File No.

Standard Cash Advance Agreement,

dated November 20, 2023 by and between the Company and SG Building Blocks, Inc.

and Cedar Advance LLC (incorporated by reference to Exhibit 10.1 to the Current

Report on Form 8-K as filed by the Registrant with the Securities and Exchange

Commission on November 22, 2023 (File No.

Contribution Agreement between LV Peninsula

Holding LLC and Preserve Acquisitions, LLC entered into as of November 28, 2023

(Incorporated by reference to Exhibit 10.1 to Safe and Green Development

Corporation’s Form 8-K filed with the SEC on December 4, 2023)

Securities Purchase Agreement, dated

November 30, 2023 (Incorporated by reference to Exhibit 10.1 to Safe and Green

Development Corporation’s Form 8-K filed with the SEC on December 1, 2023)

Registration Rights Agreement, dated November

30, 2023 (Incorporated by reference to Exhibit 10.2 to Safe and Green

Development Corporation’s Form 8-K filed with the SEC on December 1, 2023)

Equity Purchase Agreement, dated November 30,

2023 (Incorporated by reference to Exhibit 10.3 to Safe and Green Development

Corporation’s Form 8-K filed with the SEC on December 1, 2023)

Registration Rights Agreement,

dated November 30, 2023 (Incorporated by reference to Exhibit 10.4 to Safe and

Green Development Corporation’s Form 8-K filed with the SEC on December 1,

2023 Subsidiaries Equity Incentive

Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form

8-K as filed by the Registrant with the Securities and Exchange Commission on

December 11, 2023 (File No.

Master Purchase Agreement by and between the

Company and SG Echo LLC and Safe and Green Development Corporation

(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as

filed by the Registrant with the Securities and Exchange Commission on December

21, 2023 (File No.

Mutual Separation And Release

Agreement by and between the Company and Vanessa Villaverde (incorporated by

reference to Exhibit 10.1 to the Current Report on Form 8-K as filed by the

Registrant with the Securities and Exchange Commission on December 26, 2023

Standard Merchant Cash Advance Agreement by and

among SG Building Blocks, Inc., SG Echo, LLC and Madison Advance LLC

(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as

filed by the Registrant with the Securities and Exchange Commission on January

10, 2024 (File No.

Securities Purchase Agreement dated January 11,

2024 (incorporated by reference to Exhibit 10.1 to the Current Report on Form

8-K as filed by the Registrant with the Securities and Exchange Commission on

January 16, 2024 (File No.

Securities Purchase Agreement dated January 11,

2024 (incorporated by reference to Exhibit 10.1 to the Current Report on Form

8-K as filed by the Registrant with the Securities and Exchange Commission on

January 16, 2024 (File No.

Standard Cash Advance Agreement,

dated January 29, 2024 by and between the Company and SG Building Blocks, Inc.

and Cedar Advance LLC (incorporated by reference to Exhibit 10.1 to the Current

Report on Form 8-K as filed by the Registrant with the Securities and Exchange

Commission on January 31, 2024 (File No.

Agreement of Sale between Safe and Green

Development Corporation and Pigmental, LLC, dated January 31, 2024

(incorporated by reference to Exhibit 10.1 of Safe and Green Development

Corporation’s Current Report on Form 8-K filed on February 6, 2024).

Settlement and Release Agreement dated February

9, 2024 by and between the Company and Maxim Group LLC (incorporated by

reference to Exhibit 10.82 to the Registration Statement on Form S-1/A as filed

by the Registrant with the Securities and Exchange Commission on February 12,

2024 (File No.

333-276732)).

Settlement and Release Agreement

dated February 9, 2024 by and between the Company and Maxim Group LLC

(incorporated by reference to Exhibit 10.82 to the Registration Statement on

Form S-1/A as filed by the Registrant with the Securities and Exchange Commission

on February 12, 2024 (File No.

333-276732)).

Membership Interests Purchase

Agreement, dated as of February 7, 2024, by and among Safe and Green

Development Corporation, the members of Majestic World Holdings LLC listed

therein, Majestic World Holdings LLC and Sellers Representative

(incorporated by reference to Exhibit 10.1 of Safe and Green Development

Corporation’s Current Report on Form 8-K filed on February 13, 2024).

Side Letter Agreement, dated as of

February 7, 2024, by and among Safe and Green Development Corporation, Majestic

World Holdings LLC and Sellers Representative (incorporated by reference

to Exhibit 10.2 of Safe and Green Development Corporation’s Current Report on

Form 8-K filed on February 13, 2024).

Profit Sharing Agreement, dated as

of February 7, 2024, by and between Safe and Green Development Corporation and

Barstow on behalf of and as the duly authorized representative of

the members identified therein (incorporated by reference to Exhibit 10.3

of Safe and Green Development Corporation’s Current Report on Form 8-K filed on

February 13, 2024).

Amendment No.

Securities Purchase Agreement, dated February 15, 2024 (incorporated by

reference to Exhibit 10.1 of Safe and Green Development Corporation’s Current

Report on Form 8-K filed on February 22, 2024).

1 to the Registration Rights Agreement, dated February 15,

2024 (incorporated by reference to Exhibit 10.2 of Safe and Green

Development Corporation’s Current Report on Form 8-K filed on February 22,

List of Subsidiaries*

4 unchanged sentences

Certification by Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Clawback Policy

XBRL Instance Document - the instance document does not appear in the Interactive Data File as the XBRL tags are embedded within the Inline XBRL document.

8 unchanged sentences

SAFE & GREEN HOLDINGS CORP.

March 30, 2023

Chief Executive Offic er and Chairman of the Board (Principal Executive Officer)

3 unchanged sentences

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.

Signature Title Date

Galvin Chairman of the Board, Chief Executive Officer (Principal Executive Officer) and Interim Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

March 30, 2023

Chairman of the Board, Chief Executive Officer (Principal Executive Officer) and Interim Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

/s/ David Villarreal

March 30, 2023

David Villarreal

/s/ Yaniv Blumenfeld Director March 30, 2023

Yaniv Blumenfeld

/s/ Christopher Melton Director March 30, 2023

/s/ Thomas Meharey

Thomas Meharey

/s/ Christopher Melton

Christopher Melton

/s/ Shafron E.

Hawkins Director March 30, 2023

/s/ Elizabeth Cormier-May

March 30, 2023

Elizabeth Cormier-May

/s/ Jill Anderson

Jill Anderson

SAFE & GREEN HOLDINGS CORP.

3 unchanged sentences

Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets F-5

Consolidated Statements of Operations F-6

Consolidated Statements of Changes in Stockholders’ Equity F-7

Consolidated Statements of Cash Flows F-8

Notes to Consolidated Financial Statements F-9

Report of Independent Registered Public Accounting Firm (M&K CPAS, PLLC PCAOB ID:

Report of Independent Registered Public Accounting Firm (Whitley Penn LLP PCAOB ID:

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

To the Board of Directors and

Stockholders of Safe & Green Holdings Corp.

Opinion on the

Financial Statements

have audited the accompanying consolidated balance sheet of Safe & Green

Holdings Corp.

(the Company) as of December 31, 2023 , and the related

consolidated statement of operations, change in stockholders’ equity (deficit),

and cash flows for the year ended December 31, 2023 , and the related notes

(collectively referred to as the financial statements).

In our opinion, the

financial statements present fairly, in all material respects, the financial

position of the Company as of December 31, 2023 , and the results of its

operations and its cash flows for period ended December 31, 2023 , in conformity

with accounting principles generally accepted in the United States of America.

The consolidated financial statement of Safe & Green Holdings Corp.

December 31, 2022 were audited by other auditors whose report dated March 30,

2022 and expressed an unqualified opinion on those statements.

Going Concern

accompanying consolidated financial statements have been prepared assuming that

the Company will continue as a going concern.

As discussed in Note 2 to the

financial statements, the Company has incurred net losses since its inception,

negative working capital, and negative cash flows from operations, which raises

substantial doubt about its ability to continue as a going concern.

Management’s plans regarding those matters are also described in Note 3.

financial statements do not include any adjustments that might result from the

outcome of this uncertainty.

Basis for Opinion

financial statements are the responsibility of the Company’s management.

responsibility is to express an opinion on the Company’s financial statements

based on our audit.

We are a public accounting firm registered with the Public

Company Accounting Oversight Board (United States) (PCAOB) and are required to

be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and

Exchange Commission and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

standards require that we plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free of material

misstatement, whether due to error or fraud.

The Company is not required to

have, nor were we engaged to perform, an audit of its internal control over

financial reporting.

As part of our audit, we are required to obtain an

understanding of internal control over financial reporting, but not for the

purpose of expressing an opinion on the effectiveness of the Company’s internal

control over financial reporting.

Accordingly, we express no such opinion.

audit included performing procedures to assess the risks of material

misstatement of the financial statements, whether due to error or fraud, and

performing procedures that respond to those risks.

Such procedures included

examining, on a test basis, evidence regarding the amounts and disclosures in

the financial statements.

Our audit also included evaluating the accounting

principles used and significant estimates made by management, as well as

evaluating the overall presentation of the financial statements.

that our audit provides a reasonable basis for our opinion.

Critical Audit

critical audit matter communicated below is a matter arising from the current

period audit of the financial statements that were communicated or required to

be communicated to the audit committee and that:

(1) relate to accounts or

disclosures that are material to the financial statements and (2) involved our

especially challenging, subjective, or complex judgments.

The communication of

critical audit matter does not alter in any way our opinion on the financial

statements, taken as a whole, and we are not, by communicating the critical

audit matter below, providing separate opinions on the critical audit matter or

on the accounts or disclosures to which it relates.

Revenue Recognition

As discussed in Note 4,

the Company recognizes revenue upon transfer of control of promised services to

customers in an amount that reflects the consideration the Company expects to

receive in exchange for those products or services.

Auditing management’s evaluation of

agreements with customers involves significant judgment, given the fact that

some agreements require management’s evaluation and allocation of the

standalone transaction prices to the performance obligations.

To evaluate the appropriateness and accuracy of the assessment by

management, we evaluated management’s assessment in relationship to the

relevant agreements.

/s/ M&K CPAS, PLLC

We have served as the Company’s auditor since

The Woodlands, TX

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Safe & Green Holdings Corp.

and subsidiaries (the “Company”), as of December 31, 2022 and 2021, and the related consolidated statements of operations , changes in stockholders’ equity, and cash flows for the years then ended and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company, as of December 31, 2022 and 2021, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheet of Safe & Green Holdings Corp.

and subsidiaries (the “Company”), as of December 31, 2022 , and the related consolidated statements of operations , changes in stockholders’ equity, and cash flows for the year then ended and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company, as of December 31, 2022 , and the results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Going Concern

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These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments.

The communication of the critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue Recognition – Determination of Estimated Costs to Complete for Contracts Recognized Over Time

Description of the Matter

The Company’s construction and engineering contracts generally recognize revenue over time as there is a continuous transfer of control to the customer.

Approximately 52% of the Company’s revenue during the year ended December 31, 2022 was for construction and engineering contracts whereby revenue was recorded over time.

The Company uses the amount of cost incurred under the contract as a measure of progress towards completion, and revenue recognized is measured principally by the costs incurred and accrued to date for each contract as a percentage of the estimated total cost for each contract at completion.

Contract costs include all direct material, labor, and indirect costs related to contract performance.

Changes in job performance, job conditions, estimated contract costs and profitability and final contract settlements may result in revisions to costs and income, and the effects of these revisions are recognized prospectively in the period in which the revisions are determined.

This measurement and comparison process requires updates to the estimate of total costs to complete the contract, and these updates include subjective assessments and judgments.

We identified the Company’s estimation of the costs to complete each contract as a critical audit matter due to the high degree of auditor judgment and the increased extent of effort that was required when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to the estimate of costs to complete contracts recognized over time.

How We Addressed the Matter in Our Audit

Our audit procedures related to forecasts of estimated costs to complete contracts recognized over time included the following, among others:

• We selected a sample of contracts and obtained and inspected the executed contract and change orders to validate existence and understand the scope of each contract.

We performed a site visit near the end of the reporting period.

We observed and inspected the projects in process and inquired of project managers to gain an understanding of the progress on significant projects in process.

• We selected a sample of project costs incurred to ensure accuracy of costs incurred during the year.

We also verified that project costs, both direct and indirect, were applied to the correct project.

• We evaluated and tested management’s process to estimate future costs to complete contracts recognized over time.

This evaluation included ensuring the consistency of management’s process and policies regarding change orders and timely costs revisions;

performing a retrospective review of prior estimates to actual results;

and analyzing actual costs incurred subsequent to December 31, 2022 as compared to the estimated future costs to complete as of December 31, 2022.

Goodwill Impairment Analysis

Description of the Matter

The Company’s evaluation of goodwill for impairment involves the comparison of the estimated fair value of each reporting unit to its carrying value.

The annual impairment test of goodwill at a reporting unit level is performed annually during the fourth quarter, or more frequently if events or circumstances indicate the fair value of a reporting unit may be below its respective carrying value.

The Company uses a discounted cash flow model (income approach) and several market approaches to estimate the fair value of the reporting unit.

The discounted cash flow model requires management to make significant estimates and assumptions related to discount rates and forecasts of future revenues and reporting unit profit margins.

The market approach requires management to make significant estimates and assumptions related to identifying comparable public companies and determining an appropriate revenue multiple to calculate fair value.

Changes in these assumptions could have a significant impact on the fair value and the amount of any goodwill impairment charge.

The Company performed its annual impairment test of goodwill during the fourth quarter.

No impairment was recorded, because the estimated fair values of each of the Company’s reporting units exceeded their carrying values.

Given that forecasted revenues and reporting unit profit margins are sensitive to changes in demand and efficiency of operations, auditing management’s assumptions involved subjective judgment.

As a result, we identified the Company’s evaluations of goodwill impairment as a critical audit matter due to the high degree of auditor judgment and the increased extent of effort that was required when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to the forecasts of revenue and profit margins, the selection of discount rates, and the selection of appropriate revenue multiples, including the need to involve our fair value specialists.

How We Addressed the Matter in Our Audit

Our audit procedures related to forecasts of future revenues and operating unit profit margins (“forecasts”), the selection of discount rates, and the determination of appropriate revenue multiples included the following, among others:

• We evaluated the reasonableness of management’s forecasts by evaluating the reasonableness of management’s future operating plans, which include expanding production capacity and gaining operating efficiencies.

• We evaluated the reasonableness of management’s forecasts by performing a sensitivity analysis on the forecasts used in the discounted cash flow model to determine the impact to fair value as various assumptions are changed.

• We evaluated the reasonableness of the revenue multiples used in the market approach to determine the impact to fair value as various assumptions are changed.

With the assistance of our fair value specialists, we evaluated the reasonableness of management’s fair value estimate by:

• Testing the Company’s process to develop the estimates, which included evaluating the methods, data, and significant assumptions used in developing the estimate.

Testing the source information underlying the determination of the discount rate and the mathematical accuracy of the calculation.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

We served as the Company’s auditor from 2016 to 2023.

/s/ Whitley Penn LLP

We have served as the Company’s auditor since 2016.

Dallas, Texas

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Investment in and advances to equity affiliates

Liabilities and Stockholders’ Equity

Liabilities and Stockholders’ Equity (Deficit)

Current liabilities:

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Lease liability, current maturities

Due to affiliates

Assumed liability

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Total liabilities

Stockholders’ equity:

Stockholders’ equity (deficit):

Preferred stock, $ 1.00 par value, 5,405,010 shares authorized;

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Additional paid-in capital

Treasury stock, at cost – 23,115 shares

Treasury stock, at cost – 3,371 shares as of December 31, 2023 and 1,155 shares as of December 31, 2022

Accumulated deficit

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Medical revenue

Gross profit (loss)

Operating expenses:

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General and administrative expenses

Impairment loss

Marketing and business development expense

Pre-project expenses

Operating loss

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Loss on asset disposal

Loss from equity affiliates

Loss before income taxes

( 7,089,242 )

( 5,908,372 )

Income tax expense

net profit attributable to noncontrolling interests

net profit (loss) attributable to noncontrolling interests

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

$ ( 10,832,674

Net loss per share attributable to Safe & Green Holdings Corp.

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Stock-based compensation

Conversion of warrants to common stock

Issuance of common stock, net of issuance costs

Issuance of restricted stock units

Repurchase of common stock

Noncontrolling interest distribution

( 3,745,134 )

Net income (loss)

( 10,832,674 )

( 5,908,372 )

Balance at December 31, 2022

Balance at January 1, 2023

( 33,109,220 )

Stock-based compensation

Issuance of restricted stock units

Repurchase of common stock

compensation – RSU vesting

Issuance of restricted common stock for

Issuance of restricted

stock units for prior vested shares

Common stock issued for services

Issuance of warrants and

restricted common stock for debt issuances

Issuance of common stock

under EP agreement

Noncontrolling interest distribution

( 2,976,148 )

Net income (loss)

( 8,319,048 )

( 7,089,242 )

Treasury stock

Distribution of SG DevCorp

Issuance of stock

Cashless warrant exercise

Conversion of accrued interest

Conversion of short -term notes payable

Balance at December 31, 2023

$ ( 41,428,268 )

$ ( 382,607 )

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

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Depreciation expense

Direct write off of investments in marketable securities and long-term notes receivable

Amortization of intangible assets

Impairment loss

Amortization of deferred license costs

Amortization of debt issuance costs

Amortization of right-of-use asset

Direct write-off of accounts receivable

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Interest income on notes receivable

SGB DevCorp stock issuances

Common stock issued for services

Stock-based compensation

Loss on asset disposal

Loss on equity affiliates

Changes in operating assets and liabilities:

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Prepaid expenses and other current assets

Right of use asset

Intangible asset

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Payment for Promissory Note

Payment on assumed liability of acquired assets

Project development costs

Payment on security deposit

Investment in non-marketable securities

Investment in and advances to equity affiliates

( 3,600,000 )

Net cash used in investing activities

Cash flows provided by financing activities:

Proceeds from public stock offering and other private placements, net of issuance costs

Proceeds from conversion of warrants to common stock

Proceeds from short-term note payable

Payment of note issuance costs

Payment of short-term notes payable

Proceeds from long-term note payable

Issuance of common stock

Payments on financing lease

Distribution paid to noncontrolling interest

( 2,976,148 )

( 3,745,134 )

Repurchase of common stock

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Net (decrease) increase in cash and cash equivalents

( 12,441,605 )

Cash and cash equivalents - beginning of year

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Initial value of lease liability

Conversion of short-term notes payable to common stock

Conversion of accrued interest to common stock

Additions of property for

Restricted stock units issued

Dev Co Distribution

Peak Stock and Warrants Issuances

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

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

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

The Company operates in the following four segments:

(i) construction;

(i) manufacturing & construction services;

(ii) medical;

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and (iv) environmental.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SAFE & GREEN HOLDINGS CORP.

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

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

(“SG Medical”).

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

Real Estate Development

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

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

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

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

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

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

Reverse Stock Split

On May 2, 2024, the Company effected a 1-for-20 reverse stock split of its then-outstanding common stock (“May Stock Split”).

All share and per share amounts set forth in the consolidated financial statements of the Company have been retroactively restated to reflect the 1-for-20 reverse stock split as if it had occurred as of the earliest period presented and unless otherwise stated, all other share and per share amounts for all periods presented in this Annual Report have been adjusted to reflect the reverse stock split effected in May 2024.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2023 and 2022

Separation and Distribution

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

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

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

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

The Company recorded the distribution based upon the stockholders’ equity on such date and the closing market price of the Company’s common stock.

The distributed fair market value was $ 8,220,004 .

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

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

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

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

Liquidity and Going Concern

As of December 31, 2023 , the Company had cash and cash equivalents of $ 17,448 and a backlog of $ 1,902,332 .

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

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

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

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

SAFE & GREEN HOLDINGS CORP.

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For the Years Ended December 31, 2023 and 2022

Liquidity (continued)

With the global spread of the ongoing novel coronavirus ("COVID- 19 ") pandemic during 2020 , the Company implemented business continuity plans designed to address and mitigate the impact of the COVID- 19 pandemic on its employees and business.

Any quarantines, the timing and length of containment and eradication solutions, travel restrictions, absenteeism by infected workers, labor shortages or other disruptions to the Company's suppliers and contract manufacturers or customers would likely adversely impact the Company's sales and operating results and result in further project delays.

In addition, the pandemic has negatively affected the economy and has affected the demand for the Company's products.

During COVID-19, order lead times were extended and delayed and pricing has increased.

Some products or services may become unavailable if the regional or global spread were significant enough to prevent alternative sourcing.

Accordingly, the Company is considering alternative product sourcing in the event that product supply becomes problematic.

To the extent the ongoing COVID- 19 pandemic adversely affects the Company's business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties which the Company faces.

The Company has been impacted by COVID- 19 with supply chain distributions, absenteeism by infected workers and skilled labor shortages which has caused delays in projects and the Company could be further impacted if the COVID- 19 pandemic continues.

Liquidity and Going Concern (continued)

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

Summary of Significant Accounting Policies

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

On October 3, 2019, the Company entered into an Exclusive License Agreement (“ELA” ) pursuant to which it granted an exclusive license for its technology as outlined in the ELA.

The ELA is described below.

Under the ELA, the Company was to receive royalty payments based upon gross revenues earned by the licensee for commercialized products within the field of design and project management platforms for residential use, including single-family residences and multi-family residences, but excluding military housing.

The Company has determined that the ELA granted the licensee a right to access the Company’s intellectual property throughout the license period (or its remaining economic life, if shorter), and thus recognizes revenue over time as the licensee recognized revenue and the Company has the right to payment of royalties.

On June 15, 2021, the Company terminated the ELA that was executed on October 3, 2019, and no revenue has been recognized under the ELA for the years ending December 31, 2022 and 2021.

CMC Right of First Refusal Agreement – On October 9, 2019, the Company entered into a Right of First Refusal Agreement (the “ Agreement ”) with CMC Development LLC (“ CMC ”), which had a term of two ( 2 ) years.

Under the Agreement, the Company had a right of first refusal with respect to being engaged as a designer and builder of any real estate projects for which CMC has secured the rights to develop and in which CMC has a greater than fifty percent ( 50 %) interest in the owner or developer entity and has the right to select the builder for such real estate project (the “ ROFR Rights ”).

In exchange for such ROFR Rights, the Company agreed to issue to CMC 2,500 shares of restricted stock of the Company’s common stock, of which 1,250 shares vested on March 31, 2021 and the remaining 1,250 shares was to vest and be issued on September 30, 2021, unless the Agreement is earlier terminated.

In the event that the Agreement was earlier terminated, CMC was entitled to receive the entire amount of such restricted stock that had vested as of such earlier termination date, but in no event less than 1,250 shares of such restricted stock.

The Agreement also provided for customary indemnification and confidentiality obligations between the parties.

The 2,500 shares of restricted stock of the Company's common stock has yet to be issued to CMC.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2022 and 2021

Summary of Significant Accounting Policies (continued)

The Agreement also provided that CMC has engaged the Company to build and design, in the aggregate, approximately 100 residential and commercial units at 1100 Ridge Avenue, Atlanta, Georgia, which is known as the “Ridge Avenue, Atlanta Project.” The total expected gross revenue to the Company for the project to be derived by CMC is approximately $ 0 .

The project is a residential project but it was not subject to the recently terminated ELA.

The planning stage of the project was initially delayed due to COVID-19.

The Company is no longer participating on Ridge Avenue as CMC has decided to proceed with this project as a traditional construction build.

The Company has reported this as a cancellation within the Company's backlog footnote, see Note 13 on this discussion.

No revenue has been recognized under the Agreement during the years ending December 31, 2022 or 2021 .

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

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

For the years ended December 31, 2022 and 2021 , the Company recognized approximately $ 11.6 million and 31.4 million, respectively, related to activities through these two joint ventures, which is included in medical revenue on the accompanying consolidated statements of operations.

For the years ended December 31, 2023 and 2022 , the Company recognized approximately $ 0 million and $ 11.6 million, respectively, related to activities through these joint ventures, which is included in medical revenue on the accompanying consolidated statements of operations.

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

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Multi-Family (includes Single Family)

Medical (construction services)

Total Construction Revenue Segment (includes engineering service revenue)

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

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2022 and 2021

Summary of Significant Accounting Policies (continued)

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

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As previously mentioned, the ELA was terminated on June 15, 2021 but the Company expects to recover the deferred contract costs from the Assignment of Limited Rights Under Membership Interest Redemption Agreement, dated June 15, 2021 as described below.

Exclusive License Agreement – On October 3, 2019, as amended on October 17, 2019, the Company entered into the ELA with CPF GP 2019-1 LLC (the “Licensee”), pursuant to which the Company granted the Licensee an exclusive license (the “License”) solely within the United States and its legal territories to the Company’s technology, intellectual property, any improvements thereto, and any related permits, in order to develop and commercialize products within the field of design and project management platforms for residential use, including single-family residences and multi-family residences, but excluding military housing.

The Ridge Avenue Project has also been excluded from the License.

The ELA had an initial term of five ( 5 ) years and was to automatically renew for subsequent five ( 5 ) year periods.

The ELA provided for customary terminating provisions, including the right by the Company to terminate if the Licensee failed to make minimum royalty payments (as described below).

In consideration for the License, during the initial term, the Licensee agreed to pay the Company a royalty of (x) five percent (5%) on the first $20,000,000 of gross revenues derived from the Licensee’s commercialization of the License (net of customary discounts, sales taxes, delivery charges, and amounts for returns) (the “Gross Revenues”), (y) four and one-half percent (4.5%) on the next $30,000,000 of Gross Revenues, and (z) five percent (5%) on all Gross Revenues thereafter (collectively, the “Royalty”), subject to the following minimum royalty payments determined on a cumulative basis during the initial term:

$500,000 in year 1, $750,000 in year 2, $1,500,000 in year 3, $2,000,000 in year 4, and $2,500,000 in year 5.

In addition, to the extent the Licensee sublicensed any aspect of the License to a sub-licensee, the Licensee was obligated to pay to the Company fifty percent ( 50 %) of all payments received by the Licensee from such sublicensee.

The ELA provided for customary indemnification obligations between the parties and further provides that the Licensee will indemnify the Company for any claims arising out of the commercialization of the License by the Licensee or any of its subsidiaries, contractors, or sublicensees.

On June 15, 2021, the Company terminated the ELA.

In connection with the termination, the Company entered into a Settlement and Mutual Release Agreement (the “Settlement Agreement”) with CPF, the general partner (the “Licensee”) of CPF MF 2019 - 1 LLC (“CPF MF”), and Capital Plus Financial, LLC, a limited partner of the Licensee (“Capital Plus”) and an Assignment of Limited Rights Under Membership Interest Redemption Agreement, dated June 15, 2021, with Capital Plus and the Licensee.

Pursuant to the Settlement Agreement with CPF and Capital Plus, the ELA was terminated, the Company released CPF and CPF MF for any claims in exchange for releases from CPF and Capital Plus and the Company received an assignment of CPF’s right under certain circumstances to a $ 1.25 million redemption distribution from CPF MF under its Operating Agreement.

SAFE & GREEN HOLDINGS CORP.

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

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

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

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

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

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

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

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

As of December 31, 2021 , $ 502,958 was due to Clarity Labs for expenses paid on behalf of Clarity Mobile Venture, and is included in Due to Affiliates, Accounts Payable and Accrued Expenses on the accompanying consolidated balance sheets.

In addition, during the year ended December 31, 2021, the Company recognized revenue of $ 60,110 and other income of $ 60,000 to Clarity Labs, of which none is included in accounts receivable as of December 31, 2021.

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

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

The Company has determined it is the primary beneficiary of Clarity Mobile Venture and has thus consolidated the activities in its consolidated financial statements.

Due to the ongoing lower affects of COVID-19 restrictions, the JV was wound down during the fourth quarter of 2022, and the Company does not owe any amounts to Clarity Labs as of December 31, 2022.

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

On January 18, 2021 the Company entered into an operating agreement to form CAT.

16 unchanged sentences

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

Duri ng the year ended De cember 31, 2022, Norman Berry and Cumberland did not have any material earnings or losses as the investments are in development.

Duri ng the year ended December 31, 2023 , Norman Berry and Cumberland did not have any material earnings or losses as the investments are in development.

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

1 unchanged sentence

Condensed balance sheet information:

Total assets $ 37,500,000

Total liabilities

7 unchanged sentences

The Company recognizes accounts receivable at invoiced amounts.

The Company adopted ASC 326,

Current Expected Credit Losses, on January 1, 2023, which requires the

measurement and recognition of expected credit losses using a current expected

credit loss model.

The allowance for credit losses on expected future

uncollectible accounts receivable is estimated considering forecasts of future

economic conditions in addition to information about past events and current

The allowance for credit losses reflects the Company's best estimate of expected losses inherent in the accounts receivable balances.

3 unchanged sentences

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

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

Finished goods and work-in-process inventories are valued at the lower of cost or net realizable value, using the specific identification method.

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

As of December 31, 2022 there was inventory of $ 465,560 for construction materials.

As of December 31, 2021 there was inventory of $ 516,731 for construction materials, and $ 757,094 of medical equipment and COVID-19 test and testing supplies.

The Company accounts for

the transfer of accounts receivable to a third party under a factoring type

arrangement in accordance with ASC 860, “ Transfers and Servicing ”.

860 requires that several conditions be met in order to present the transfer of

accounts receivable as a sale.

In the case of factoring type arrangements, the

Company has isolated the transferred (sold) assets and has the legal right to

transfer its assets (accounts receivable).

SAFE & GREEN HOLDINGS CORP.

3 unchanged sentences

Summary of Significant Accounting Policies (continued)

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

Finished goods and work-in-process inventories are valued at the lower of cost or net realizable value, using the specific identification method.

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

As of December 31, 2023 there was inventory of $ 156,512 for construction materials.

As of December 31, 2022 there was inventory of $ 465,560 for construction materials.

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

1 unchanged sentence

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

There were no impairments during the years ended December 31, 2022 or 2021.

There was a $ 1,309,330 impairment loss during the year ended December 31, 2023 and no impairments during the year ended December 31, 2022 .

The Company has taken the recent COVID- 19 pandemic into consideration when determining impairment.

1 unchanged sentence

In addition, included in intangible assets is $68,344 of trademarks, and $238,422 of website costs that are being amortized over 5 years.

The Company evaluated intangible assets for impairment during the year ended December 31, 2022 and 2021 and determined that there are no impairment losses.

The Company evaluated intangible assets for impairment during the year ended December 31, 2023 and 2022 and determined that there are $ 1,880,547 of impairment loss for the year ended December 31, 2023 and no impairment loss for the year ended December 31, 2022.

The accumulated amortization and amortization expense as of and for the year ended December 31, 2023 was $ 2,852,929 and $ 187,640 , respectively.

The accumulated amortization and amortization expense for the years ended December 31, 2022 was $ 980,963 and $ 164,092 respectively.

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

For the year ending December 31,:

The remaining balance of the Company’ intangible assets is comprised of website cost which are not yet placed in service.

Property, plant and equipment – Property, plant and equipment is stated at cost.

31 unchanged sentences

Stock-based compensation expense to non-employees is reported within marketing and business development expense in the consolidated statements of operations.

Other income (expense) – Included in other income (expense) for the year ended December 31, 2022 is amounts in escrow resulting from the SG Echo acquisition which were remitted to the Company in the amount of $ 406,438 .

Other income (expense) – Included in other income (expense) for the year ended December 31, 2023, was a $ 450,000 legal settlement, $ 173,314 of miscellaneous income from the sale of scrap and other miscellaneous which does not function to our core business.

Included in other income (expense) for the year ended December 31, 2022 is amounts in escrow resulting from the SG Echo acquisition which were remitted to the Company in the amount of $ 406,438 .

At the time of acquisition and previously, the Com pany did not be lieve such amount was recognizable.

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At December 31, 2023 and 2022 , 100 % and 80 %, respectively, of the Company’s gross accounts receivable were due from three and four customers .

Revenue in excess of 10 % relating to three and one customers represented approximately 65 % and 80 % of the Company's total revenue for the year ended December 31, 2022 and 2021, respectively.

Revenue in excess of 10 % relating to one customer represented approximately 87 % and 65 % of the Company's total revenue for the year ended December 31, 2023 and 2022 , respectively.

For the year ending December 31, 2023 and 2022 , there were no vendors that represented 10 % or more of our cost of revenue.

11 unchanged sentences

Receivables are evaluated for collectability and allowances for potential losses are established or maintained on applicable receivables.

There were direct write offs of $ 40,580 during the year ended December 31, 2022.

There was a provision for credit losses of $ 0 and $ 167,202 for the years ended December 31, 2022 and 2021, respectively .

SAFE & GREEN HOLDINGS CORP.

9 unchanged sentences

billings to date

( 5,916,487 )

Net contract liabilities on uncompleted contracts

$ ( 471,604 )

The above amounts are included in the accompanying consolidated balance sheets under the following captions at December 31, :

1 unchanged sentence

Contract liabilities

( 1,774,740 )

Net contract liabilities

$ ( 471,604 )

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

22 unchanged sentences

Depreciation expense for the years ended December 31, 2023 and 2022 amounted to $ 370,525 and $ 410,314 , respectively.

Additionally, during the year ended December 31,

2023, property, plant and equipment consisting of lab units and construction in

progress with a net book value of $ 1,229,034 was written off due to lack of

usage and no plans to be put back into service.

Notes Receivable

On January 21, 2020, CPF GP 2019-1 LLC (“CPF GP”) issued to the Company a promissory note in the principal amount of $ 400,000 (the “Company Note”) and issued to Paul Galvin, the Company’s Chairman and CEO, a promissory note in the principal amount of $ 100,000 (the “Galvin Note”).

On January 21, 2020, CPF GP 2019 - 1 LLC (“CPF GP”) issued to the Company a promissory note in the principal amount of $ 400,000 (the “Company Note”).

CPF GP also issued to Paul Galvin, the Company’s Chairman and CEO, a promissory note in the principal amount of $ 100,000 (the “Galvin Note”).

The transaction closed on January 22, 2020, on which date the Company loaned CPF GP 2019 - 1 LLC $ 400,000 and Mr.

7 unchanged sentences

Interest income recognized for the years ended December 31, 2023 and 2022 amounted to $ 0 and $ 37,397 , respectively.

During the year ended December 31, 2023, the Company determined that the above notes are not collectible and recorded bad debts for the outstanding amounts , which resulted in a write off of principal of $ 750,000 and accrued interest of $ 129,418 .

During the year ended December 31, 2022 , the Galvin Note was assigned to the Company and the principal amount of $ 100,000 was paid to Mr.

The Company has a promissory note in the principal amount of $ 100,000 (the "Company Note 4") and the assignment occurred in January 2022.

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

See Note 3 for a discussion on the Settlement and Mutual Release Agreement and termination of the ELA with CPF.

SAFE & GREEN HOLDINGS CORP.

6 unchanged sentences

Accrued public fees ( 2 )

Accrued construction cost of goods sold

Accrued losses (3)

Accrued medical cost of goods sold

Accrued project development costs

Accrued payroll and benefits (3)

Accrued interest

Accrued losses on construction services

Accrued non-income taxes (4)

2 unchanged sentences

( 2 ) Public fees include accruals for accounting, legal, and SEC compliance expenses.

(3) Losses for on-going construction projects related to the Construction segment.

(3) Accrued wages, salaries, PTO, benefits, taxes, and other incentive plan expenses.

9 unchanged sentences

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

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

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

The LV Note requires monthly installments of interest only, is due on April 1, 2024 and bears interest at the prime rate as published in the Wall Street Journal (currently 8.0 %) plus five and 50/100 percent (5.50%), currently equaling 13.5%;

provided that in no event will the interest rate be less than a floor rate of 13.5%.

The LV Peninsula obligations under the LV Note have been guaranteed by SG DevCorp pursuant to a Guaranty, dated March 30, 2023 (the “Guaranty”), and may be prepaid by LV Peninsula at any time without interest or penalty.

The Company incurred $ 406,825 of debt issuance costs and remitted $ 675,000 in prepaid interest in connection with the LV Note.

On October 29, 2021, SG Echo, a subsidiary of the Company, entered into a Loan Agreement (“Loan Agreement”) with the Durant Industrial Authority (the “Authority”) pursuant to which it received $ 750,000 to be used for renovation improvements related to the Company's second manufacturing facility and issued to the Authority a non-interest bearing Forgivable Promissory Note in the principal amount of $ 750,000 (the “Forgivable Note”).

8 unchanged sentences

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

During the year ended December 31, 2023, such note was extend ed for a period of one year .

On February 7, 2023, the Company closed a private placement offering (the “Offering”) of One Million One Hundred Thousand Dollars ($ 1,100,000.00 ) in principal amount of the Company’s 8 % convertible debenture (the “Debenture”) and a warrant (the “Peak Warrant”) to purchase up to Five Hundred Thousand ( 500,000 ) shares of the Company’s common stock ( 25,000 shares as adjusted for the May Stock Split), (to Peak One Opportunity Fund, L.P.

(“Peak One ”).

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

During the year ended December 31, 2023 , Peak One converted $ 730,000 of its principal balance into 508,917 shares of common stock of the Company ( 25,446 shares as adjusted for the May Stock Split),.

Such conversion was within the terms of the agreement with no gains or losses recognized on the transactions.

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

The Debenture matures twelve months from its date of issuance and bears interest at a rate of 8 % per annum payable on the maturity date.

The Debenture is convertible, at the option of the holder, at any time, into such number of shares of common stock of the Company equal to the principal amount of the Debenture plus all accrued and unpaid interest at a conversion price equal to $ 1.50 (the “Conversion Price”) ($ 30 as adjusted for the May Stock Split), subject to adjustment for any stock splits, stock dividends, recapitalizations and similar events and in the event the Company, at any time while the Debenture is outstanding, issues, sells or grants any option to purchase, or sells or grants any right to reprice, or otherwise disposes of, or issues common stock or other securities convertible into, exercisable for, or otherwise entitle any person the right to acquire, shares of common stock, other than with respect to an Exempt Issuance (as defined in the Debenture), at an effective price per share that is lower than the then Conversion Price.

In the event of any such anti-dilutive event, the Conversion Price will be reduced at the option of the holder to such lower effective price of the dilutive event, subject to a floor price of $ 0.40 ($ 8 as adjusted for the May Stock Split), per share, unless and until the Company obtains shareholder approval for any issuance below such floor price.

The Debenture is redeemable by the Company at a redemption price equal to 110 % of the sum of the principal amount to be redeemed plus accrued interest, if any.

So long as the Debenture is outstanding, upon any issuance by the Company of any security with any term more favorable to the holder of such security or with a term in favor of the holder of such security that was not similarly provided to the holder of the Debenture, then the Company shall notify the holder of such additional or more favorable term and such term, at holder’s option, will become a part of the transaction documents with the holder.

In no event will the holder be entitled to convert any portion of the Debenture in excess of that portion which would result in beneficial ownership by the holder and its affiliates of more than 4.99 % of the outstanding shares of common stock, unless the holder delivers to the Company written notice at least sixty-one ( 61 ) days prior to the effective date of such notice that the provision be adjusted to 9.99 %.

While the Debenture is outstanding, if the Company receives cash proceeds of more than $ 1,000,000 (“Minimum Threshold”) in the aggregate from any source or series of related or unrelated sources, the Company shall, within two ( 2 ) business days of Company’s receipt of such proceeds, inform the holder of such receipt, following which the holder shall have the right in its sole discretion to require the Company to immediately apply up to 50 % of all proceeds received by the Company (from any source except with respect to proceeds from the issuance of equity or debt to officers and directors of the Company) after the Minimum Threshold is reached to repay the outstanding amounts owed under the Debenture.

Upon the occurrence of certain events of default specified in the Debenture, such as a failure to honor a conversion request, failure to maintain the Company’s listing, the Company’s failure to comply with its obligations under Securities Exchange Act of 1934 , as amended, a breach of the Company’s representations or covenants, or the failure obtain shareholder approval within 60 days after the Exchange Cap (as defined) is reached, as amended, 110 % of all amounts owed to holder under the Debenture, together with default interest at 18 % per annum if any, shall then become due and payable.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2023 and 2022

Notes Payable (continued)

The Peak Warrant expires five years from its date of issuance.

The Peak Warrant is exercisable, at the option of the holder, at any time, for up to 500,000 of shares of common stock ( 25,000 shares as adjusted for the May Stock Split), of the Company at an exercise price equal to $ 2.25 (the “Exercise Price”) ($ 45 as adjusted for the May Stock Split), subject to adjustment for any stock splits, stock dividends, recapitalizations and similar events and in the event the Company, at any time while the Peak Warrant is outstanding, issues, sells or grants any option to purchase, or sells or grants any right to reprice, or otherwise disposes of, or issues common stock or other securities convertible into, exercisable for, or otherwise entitle any person the right to acquire, shares of common stock, other than with respect to an Exempt Issuance, at an effective price per share that is lower than the then Exercise Price.

In the event of any such anti-dilutive event, the Exercise Price will be reduced at the option of the holder to such lower effective price of the dilutive event, subject to a floor price of $ 0.40 per share, unless and until the Company obtains shareholder approval for any issuance below such floor price.

The number of shares of the Company’s common stock that may be issued upon conversion of the Debenture and exercise of the Peak Warrant, and inclusive of the Commitment Shares and any shares issuable under and in respect of the equity purchase agreement, dated February 7, 2023 between the Company and Peak One described below, is subject to an exchange cap (the “Exchange Cap”) of 19.99 % of the outstanding number of shares of the Corporation’s common stock on the closing date, 2,760,675 shares ( 138,034 shares as adjusted for the May Stock Split), unless shareholder approval to exceed the Exchange Cap is approved.

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

In addition, the initial fair value of the Peak Warrant amounted to $ 278,239 and the fair value of the restricted shares amounted to $ 76,000 , both of which have been recorded as a debt discount and will be amortized over the effective rate method For the year ended December 31, 2023 , the Company recognized amortization of debt issuance costs and debt discount of $ 73,333 and $ 416,386 , respectively.

As of December 31 , 2023 , the unamortized debt issuance costs and debt discount amounted to $ 6,667 and $ 37,853 , respectively.

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

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

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

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

As of December 31, 2023, there was no outstanding balance on this advance.

As of Dec ember 31 , 2023 , the unamortized debt issuance costs amounted to $ 10,713 .

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

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

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

SG Building’s obligations under the Cash Advance Agreement have been guaranteed by SG Echo.

As of December 31, 2023, the outstanding balance was $ 424,454 on this advance.

On November 20, 2023, SG Building entered into a third cash advance agreement with Cedar pursuant to which SG Building sold to Cedar $ 511,200 of its future receivables for a purchase price of $ 360,000 , less underwriting fees and expenses paid, for net funds provided of $ 342,200 .

Cedar is expected to withdraw $ 20,300 a week directly from SG Building’s bank account until the $ 511,200 due to Cedar under the cash advance agreement is paid.

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

SG Building ’s obligations under the cash advance agreement have been guaranteed by SG Echo.

As of December 31, 2023, the outstanding balance was $ 302,817 on this advance.

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

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

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

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

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

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2023 and 2022

Notes Payable (continued)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SG Echo incurred $ 70,120 in debt issuance costs in connection with the Secured Note.

For the year ended December 31, 2023 , the Company recognized amortization of debt issuance costs of $ 17,535 .

As of December 31, 2023 , the unamortized debt issuance costs amounted to $ 52,585 .

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2023 and 2022

Notes Payable (continued)

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

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

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

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

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

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

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

As of December 31, 2023 , the Company has paid $ 35,000 in debt issuance costs.

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

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

Mary’s, Georgia.

For the year ended December 31, 2023 , the Company recognized amortization of debt issuance costs of $ 57,569 .

As of December 31, 2023 , the unamortized debt issuance costs amounted to $ 633,262 .

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

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

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

According to Amendment No.

1 , if SG DevCorp’s shares of common stock were not listed on The Nasdaq Stock Market before September 15, 2023 or if following such listing the total market value of the Pledged Shares falls below twice the face value of the loan, the loan will be further secured by a security interest in the St.

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

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

According to Amendment No.

2 , if SG DevCorp’s shares of common stock were not listed on The Nasdaq Stock Market before September 30, 2023 or if following such listing the total market value of the Pledged Shares falls below twice the face value of the loan, the loan will be further secured by a security interest in the St.

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

On December 14, 2023, the Company entered into a promissory note with Paul Galvin, the Company’s Chairman and CEO, for $ 75,000 (“Galvin Note Payable”).

The note shall not accrue interest, and the entire unpaid principal balance is due December 14, 2024 .

As of December 31, 2023 and 2022 , long term notes payable consisted of the following:

Loan Agreement

Cash Advance Agreement

BCV Loan Agreement

G alvin Note Payable

Debt discount and debt issuance costs

current maturities

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2023 and 2022

Business Combination

17 unchanged sentences

Right-of-use assets, net

Current liabilities Lease liability, current maturities

Non-current liabilities Lease liability, net of current maturities

( 2,118,958 )

Current liabilities

Lease liability, current maturities

Non-current liabilities

Lease liability, net of current maturities

Total operating lease liabilities

$ ( 2,537,577 )

Finance Leases

Right-of-use assets

Current liabilities Lease liability, current maturities

Non-current liabilities Lease liability, net of current maturities

Current liabilities

Lease liability, current maturities

Non-current liabilities

Lease liability, net of current maturities

Total finance lease liabilities

$ ( 1,727,653 )

Weighted Average Remaining Lease Term

15 unchanged sentences

Present value of lease liabilities

Chicago Airport Testing has subleased its leased vacant area for a period of one year , the sublessee has the option to terminate at any time after the first six months.

The sublessee elected to terminate the Agreement, effective as of July 31, 2021 and the Company has no remaining lease revenue from the sublessee.

Total lease expense amounted to $ 943,441 and $ 770,272 for the years ending December 31, 2023 and 2022 .

1 unchanged sentence

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

Balance - beginning of period

New contracts and change orders during the period

Balance - beginning of year

New contracts and change orders during the year

Adjustments and cancellations, net

( 18,297,197 )

contract revenue earned during the period

Balance - end of period

contract revenue earned during the year

Balance - end of year

SAFE & GREEN HOLDINGS CORP.

3 unchanged sentences

Construction Backlog (continued)

Backlog at December 31, 2021 included two contracts entered into during the third quarter of 2020 in the amount of approximately $4 million and approximately $2.95 million along with three contracts during the fourth quarter of 2020 in the amount of approximately $ 2.7 million, $ 0.80 million, and $ 0.70 million.

The Company executed one large contract in the first quarter of 2021 in the amount of approximately $ 1.3 million, one large contract in the third quarter of 2021 of approximately of $ 0.87 million and had one large partial contract cancellation to an existing contract of approximately ($ 1.3 ) million.

The Company executed one large contract in the fourth quarter of 2021 in the amount of approximately $ 0.78 million and had one contract cancellation in t he amount of approximately $ 16.9 million.

During 2022 , the Company entered into a contract with ATCO Structures & Logistics (USA) Inc.

for $ 5,771,200 that is reflected in the December 31, 2022 backlog.

The Company expects that all of this revenue will be realized by December 31, 2023.

This amount was fully recognized during the year ended December 31, 2023.

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

26 unchanged sentences

Operating income (loss)

( 2,137,866 )

( 7,208,895 )

( 7,229,970 )

Other income (expense)

Income (loss) before income taxes

( 7,089,242 )

Net income (loss) attributable to non-controlling interest

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

$ ( 2,444,259 )

$ ( 7,135,074 )

$ ( 8,319,048 )

Depreciation and amortization

2 unchanged sentences

Operating income (loss)

( 7,041,313 )

( 7,143,792 )

( 5,982,851 )

Other income (expense)

Income (loss) before income taxes

( 7,036,150 )

( 7,064,544 )

( 5,908,373 )

Net income (loss) attributable to non-controlling interest

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

$ ( 7,036,150

$ ( 203,133 )

$ ( 7,064,544 )

$ ( 10,832,676 )

Depreciation and amortization

7 unchanged sentences

Total deferred

( 2,289,158 )

Total provision (benefit) for income taxes

4 unchanged sentences

State and local income taxes, net of federal benefit

Goodwill impairment

Change in state rate

Less valuation allowance

33 unchanged sentences

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

At December 31, 2022, there were options, including options granted to non-employees and non-directors, restricted stock units and warrants to purchase 36,436 , 3,370,186 and 2,025,020 shares of common stock, respectively, outstanding that could potentially dilute future net income per share.

At December 31, 2023 , there were options, including options granted to non-employees and non-directors, restricted stock units and warrants to purchase 36,436 , 0 and 2,247,133 shares of common stock ( 1,822 , 0 and 112,357 , respectively, shares as adjusted for the May Stock Split) respectively, outstanding that could potentially dilute future net income per share.

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

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

At December 31, 2021, there were options , including options to non-employees and non-directors, restricted stock units and warrants to purchase 36,436 , 2,220,514 and 2,025,520 shares of common stock, respectively, outstanding that could potentially dilute future net income per share.

At December 31, 2022 , there were options , including options to non-employees and non-directors, restricted stock units and warrants to purchase 36,436 , 3,370,186 and 2,025,020 shares of common stock ( 1,822 , 168,509 , and 102,276 , respectively, shares as adjusted for the May Stock Split), respectively, outstanding that could potentially dilute future net income per share.

Stockholders’ Equity

Public Offerings – In June 2017, the Company issued 75,000 shares of its common stock at $ 100.00 per share through the Public Offering.

The Company incurred $ 1,388,615 in issuance costs from the Public Offering and issued 3,750 warrants valued at $ 55,475 to the underwriters (as discussed in Note 18).

In July 2017, as permitted by the underwriting agreement entered into in connection with the Public Offering, the underwriters exercised their option to purchase an additional 11,250 shares of common stock at $ 100.00 per share.

The Company incurred $ 176,771 in issuance costs from this issuance.

In connection with this exercise, certain affiliates of the underwriters were granted additional warrants to purchase 563 shares of common stock in the aggregate valued at $ 8,321 (as discussed in Note 18).

In connection with and prior to the Public Offering, the Company issued 90,084 shares of its common stock upon conversion of all outstanding preferred stock and 25,833 shares of its common stock upon conversion of the previously outstanding convertible debentures.

In December 2019, the Company completed a public offering of its common stock (the “Public Offering”).

In connection with the Public Offering, the Company sold 857,500 shares of common stock at a public offering price of $ 3.00 per share, resulting in aggregate net proceeds of $ 2,117,948 after deducting underwriting discounts and commissions and other expenses related to the offering.

The Company incurred $ 454,552 in issuance costs from the Public Offering and no warrants to purchase were issued to the underwriters.

In April 2020, the Company also completed a public offering of its common stock (the "April Public Offering").

In connection with the April Public Offering, the Company sold 440,000 shares of common stock at a public offering price of $ 4.25 per share, resulting in aggregate net proceeds of approximately $ 1,522,339 after deducting underwriting discounts and commissions and other expenses related to the offering.

The Company incurred a total of approximately $ 347,661 in issuance costs in connection with the offering and n o warrants to purchase were issued to the underwriters.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2022 and 2021

Stockholders’ Equity (continued)

In May 2020, the Company completed a public offering of its common stock (the "May Public Offering").

In connection with the May Public Offering, the Company sold 6,000,000 shares of common stock at a public offering price of $ 2.50 per share.

Pursuant to the terms of the related Underwriting Agreement dated May 6, 2020 by and among the Company and ThinkEquity, a division of Fordham Financial Management, Inc., as representatives of several underwriters named therein ("ThinkEquity"), ThinkEquity was granted an over-allotment option to purchase up to an additional 900,000 shares of the Company's common stock, par value $ 0.01 per share (the "Common Stock"), in connection with the previously announced public offering.

On May 15, 2020, ThinkEquity exercised in full such option with respect to all 900,000 shares of the Company's Common Stock (the "Option Shares").

After giving effect to the full exercise of the over-allotment option, the total number of shares of Common Stock sold by the Company in the May Public Offering was 6,900,000 shares of Common Stock and total net proceeds to the Company, after deducting underwriting discounts and commissions and other offering expenses payable by the Company, were approximately $ 15,596,141 .

The Company incurred a total of approximately $ 1,653,859 in issuance costs in connection with the offering and issued warrants to purchase 300,000 shares of common stock to the underwriters.

Registered Direct Offering –

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

Pursuant to the terms of the Purchase Agreement, the Company issued to the investor (A) in a registered direct offering (i) 975,000 shares (the “Public Shares”) of its Common Stock, par value $0.01 per share (the “Common Stock”), and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 2,189,384 shares (the “Pre-Funded Warrant Shares”) of Common Stock and (B) in a concurrent private placement, Series A warrants to purchase up to 1,898,630 shares (the “Common Stock Warrant Shares”) of Common Stock (the “Common Stock Warrants,” and together with the Public Shares and the Pre-Funded Warrants, the “Securities”) (the “Offering The Pre-Funded Warrants were immediately exercisable at a nominal exercise price of $0.001 and all Pre-Funded Warrants sold have been exercised.

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

Pursuant to the terms of the Purchase Agreement, the Company issued to the investor (A) in a registered direct offering (i) 975,000 shares (the “Public Shares”) ( 48,750 shares as adjusted for the May Stock Split), of its Common Stock, par value $ 0.01 per share (the “Common Stock”), and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 2,189,384 shares (the “Pre-Funded Warrant Shares”) of Common Stock ( 109,469 shares as adjusted for the May Stock Split), and (B) in a concurrent private placement, Series A warrants to purchase up to 1,898,630 shares (the “Common Stock Warrant Shares”) ( 94,932 shares as adjusted for the May Stock Split), of Common Stock (the “Common Stock Warrants,” and together with the Public Shares and the Pre-Funded Warrants, the “Securities”) (the “Offering The Pre-Funded Warrants were immediately exercisable at a nominal exercise price of $ 0.001 and all Pre-Funded Warrants sold have been exercised.

The Common Stock Warrants have an exercise price of $ 4.80 per share, ($ 96 as adjusted for the May Stock Split), are exercisable upon issuance and will expire five years from the date of issuance.

A.G.P./Alliance Global Partners (the “Placement Agent”) acted as the exclusive placement agent for the transaction pursuant to that certain Placement Agency Agreement, dated as of October 25, 2021, by and between the Company and the Placement Agent (the “Placement Agency Agreement”), the Placement Agent received (i) a cash fee equal to seven percent ( 7.0 %) of the gross proceeds from the placement of the Securities sold by the Placement Agent in the Offering and (ii) a non-accountable expense allowance of one half of one percent ( 0.5 %) of the gross proceeds from the placement of the Gross Proceeds Securities sold by the Placement Agent in the Offering.

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The net proceeds to the Company after deducting the Placement Agent’s fees and the Company’s estimated offering expenses was approximately $ 10.5 million.

Securities Purchase Agreement – In April 2019 , the Company issued 42,388 shares of its common stock at $ 22.00 per share through a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional investors and accredited investors.

Securities Purchase Agreement – In April 2019 , the Company issued 42,388 shares of its common stock ( 2,119 shares as adjusted for the May Stock Split), at $ 22.00 per share ($ 440 as adjusted for the May Stock Split), through a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional investors and accredited investors.

Concurrently with the sale of the common stock, pursuant to the Purchase Agreement, the Company also sold common stock purchase warrants to such investors to purchase up to an aggregate of 42,388 shares of common stock.

The Company incurred $ 379,816 in issuance costs from the offering and issued 4,239 warrants to the underwriters.

( 2,119 shares as adjusted for the May Stock Split),.

The Company incurred $ 379,816 in issuance costs from the offering and issued 4,239 ( 212 as adjusted for the May Stock Split), warrants to the underwriters.

The warrants are further discussed in Note 18 .

4 unchanged sentences

Stockholders’ Equity (continued)

Decrease in Authorized Shares – On June 5, 2019 , at the Company’s annual meeting of stockholders, the stockholders approved an amendment to the Company’s amended and restated certificate of incorporation to decrease the number of authorized shares of common stock from 300,000,000 to 25,000,000 shares.

Following the meeting, on June 5, 2019 , the Company filed a certificate of amendment to the amended and restated certificate of incorporation to decrease its authorized shares of common stock accordingly.

There was no change to the number of authorized shares of preferred stock.

Underwriting Agreement – In August 2019 , the Company issued 45,000 shares of its common stock at $ 17.00 per share pursuant to the terms of an Underwriting Agreement (the “Underwriting Agreement”) to the public.

The Company incurred $ 181,695 in issuance costs from the offering and issued warrants to purchase 2,250 shares of common stock to the underwriter.

Underwriting Agreement – In August 2019 , the Company issued 45,000 shares of its common stock ( 2,250 shares as adjusted for the May Stock Split), at $ 17.00 per share ($ 340 as adjusted for the May Stock Split), pursuant to the terms of an Underwriting Agreement (the “Underwriting Agreement”) to the public.

The Company incurred $ 181,695 in issuance costs from the offering and issued warrants to purchase 2,250 shares of common stock ( 112 shares adjusted for the May Stock Split), to the underwriter.

The warrants are further discussed in Note 19 .

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

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

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

In connection with the EP Agreement, the Company issued to Investments, the general partner of Peak One , 75,000 shares of its common stock ( 3,750 shares as adjusted for the May Stock Split), and agreed to file a registration statement registering the common stock issued or issuable to Peak One and Investments under the Agreement for resale with the Securities and Exchange Commission within 60 calendar days of the Agreement, as more specifically set forth in the Rights Agreement.

The registration statement was declared effective on April 14, 2023

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

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

The EP Agreement and the Rights Agreement contain customary representations, warranties, agreements and conditions to completing future sale transactions, indemnification rights and obligations of the parties.

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

Under the EP Agreement, the Company issued 657,895 shares of common stock ( 32,895 shares as adjusted for the May Stock Split), for $ 394,735 .

Common Stock Issued for Services – During the year ended December 31, 2023 , the Company issued 287,512 shares of common stock ( 14,376 shares as adjusted for the May Stock Split), for services provided.

The value of the shares amounted to $ 437,325 .

Common Stock Issued for Debt Issuances – During the year ended December 31, 2023, the Company issued 50,000 shares of common stock ( 2,500 shares as adjusted for the May Stock Split), for debt issuances.

Additionally, the Company issued warrants for such insurances.

The total value of the shares and warrants amounted to $ 354,329 .

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2023 and 2022

Restricted Stock Units – During the year ended December 31, 2023 , the Company issued 3,020,334 shares of common stock ( 151,017 shares as adjusted for the May Stock Split), for previously vested restricted stock units.

During the year ended December 31, 2022 , the Company issued 43,333 shares of common stock ( 2,166 shares as adjusted for the May Stock Split) for previously vested restricted stock units.

Separation - In connection with the Separation, discussed in Note 2 the Company recorded the distribution based upon the stockholders’ equity on such date and the closing market price of the Company’s common stock.

The distributed fair market value was $ 8,220,004 .

Noncontrolling interest – During the year ended December 31, 2023, the Company recorded a distribution of $ 46,417 to its noncontrolling interest and a net gain from its controlling interest.

In addition, during the year ended December 31, 2023, SG DevCorp recorded $ 684,438 of additional equity transactions which related to transactions in its own stock from debt issuances to third parties.

Treasury stock – During the year ended December 31, 2023, the Company repurchased additional treasury stock for $ 42,716 .

Conversion – During the year ended December 31, 2023, the Company converted $ 730,000 of notes payable and $ 45,000 of accrued interest for a total of 538,917 shares of common stock.

( 26,946 shares as adjusted for the May Stock Split),.

Such amount was converted within the terms of the agreement with no gains or losses recognized on the transactions.

Warrant exercise – During the year ended December 31, 2023, 274,074 of shares of common stock ( 13,704 shares as adjusted for the May Stock Split), were issued resulting from cashless warrant exercises.

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

1 unchanged sentence

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

In conjunction with the Purchase Agreement in April 2019, the Company also sold warrants to purchase up to an aggregate of 42,388 shares of common stock at an initial exercise price of $ 27.50 per share.

In conjunction with the Purchase Agreement in April 2019 , the Company also sold warrants to purchase up to an aggregate of 42,388 shares of common stock ( 2,119 shares as adjusted for the May Stock Split), at an initial exercise price of $ 27.50 per share ($ 550.00 as adjusted for the May Stock Split) ,.

The warrants are exercisable at the option of the holder on or after October 29, 2019 and expire October 29, 2024 .

T he Company issued to certain affiliates of the underwriters, as compensation, warrants to purchase an aggregate of 4,239 shares of common stock at an initial exercise price of $ 27.50 per share.

T he Company issued to certain affiliates of the underwriters, as compensation, warrants to purchase an aggregate of 4,239 shares of common stock ( 212 shares as adjusted for the May Stock Split), at an initial exercise price of $ 27.50 per share ($ 550.00 as adjusted for the May Stock Split),.

The warrants are exercisable at the option of the holder on or after October 29, 2019 and expire April 24, 2024 .

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2023 and 2022

In conjunction with the Underwriting Agreement in August 2019 , the Company issued to the underwriter, as compensation, warrants to purchase an aggregate of 2,250 shares of common stock ( 112 shares as adjusted for the May Stock Split), at an initial exercise price of $ 21.25 per share ($ 425.00 as adjusted for the May Stock Split) ,.

The warrants are exercisable at the option of the holder on or after February 1, 2020 and expire August 29, 2024 .

In conjunction with the Underwriting Agreement in May 2020, the Company issued to the underwriter, as compensation, warrants to purchase an aggregate of 300,000 shares of common stock ( 15,000 shares as adjusted for the May Stock Split), at an initial exercise price of $ 3.14 per share ($ 62.80 as adjusted for the May Stock Split) ,.

The warrants are exercisable at the option of the holder on or after November 6, 2020 and expire May 5, 2025 .

During the year ended December 31, 2021, 226,300 warrants were exercised and converted into common stock of the Company.

During the year ended December 31, 2021, 226,300 ( 11,315 shares as adjusted for the May Stock Split), warrants were exercised and converted into common stock of the Company.

The Company has received proceeds of approximately $ 707,000 from the exercise of the warrants.

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

The warrants are have an exercise price of $ 4.80 per share, exercisable at the option of the holder on or after October 26, 2021 and will expire five years from the date of issuance.

In conjunction with the Purchase Agreement in October 2021, the Company also issued Series A warrants to purchase up to 1,898,630 shares of Common Stock ( 94,932 shares as adjusted for the May Stock Split), in a concurrent private placement.

The warrants are have an exercise price of $ 4.80 per share, ($ 96.00 as adjusted for the May Stock Split),, exercisable at the option of the holder on or after October 26, 2021 and will expire five years from the date of issuance.

In conjunction with the issuance of the Debenture in February 2023, the Company issued the Peak Warrant to purchase 500,000 shares of common stock ( 25,000 shares as adjusted for the May Stock Split),.The Peak Warrant expires five years from its date of issuance.

The Peak Warrant is exercisable, at the option of the holder, at any time, for up to 500,000 of shares of common stock ( 25,000 shares as adjusted for the May Stock Split), of the Company at an exercise price equal to $ 2.25 (the “Exercise Price”) ($ 45.00 as adjusted for the May Stock Split), , subject to adjustment for any stock splits, stock dividends, recapitalizations and similar events and in the event the Company, at any time while the Peak Warrant is outstanding, issues, sells or grants any option to purchase, or sells or grants any right to reprice, or otherwise disposes of, or issues common stock or other securities convertible into, exercisable for, or otherwise entitle any person the right to acquire, shares of common stock, other than with respect to an Exempt Issuance, at an effective price per share that is lower than the then Exercise Price.

In the event of any such anti-dilutive event, the Exercise Price will be reduced at the option of the holder to such lower effective price of the dilutive event, subject to a floor price of $ 0.40 per share ($ 8.00 as adjusted for the May Stock Split) , , unless and until the Company obtains shareholder approval for any issuance below such floor price.

The initial fair value of the Peak Warrant amounted to $ 278,239 and was recorded, in combination with common stock issued above, as a debt discount of $ 354,329 at the time of issuance of the Debenture.

Warrant activity or the year ended December 31, 2023 are summarized as follows:

Number of Warrants

Weighted Average Exercise Price

Weighted Average Remaining Contractual Term (Years)

Aggregate Intrinsic Value

Outstanding and exercisable - January 1, 2023

Outstanding and exercisable - December 31, 2023

The fair value of warrants granted during the year were valued using a Black-Scholes Value model, with the following assumptions

Risk-free interest rate

Contractual term

Dividend yield

Expected volatility

SAFE & GREEN HOLDINGS CORP.

3 unchanged sentences

Share-based Compensation

On October 26, 2016, the Company’s Board of Directors approved the issuance of up to 25,000 shares of the Company’s common stock in the form of restricted stock or options (“ 2016 Stock Plan”).

On October 26, 2016, the Company’s Board of Directors approved the issuance of up to 25,000 shares of the Company’s common stock ( 1,250 shares as adjusted for the May Stock Split), in the form of restricted stock or options (“ 2016 Stock Plan”).

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

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

The Incentive Plan authorizes the issuance of up to 3,625,000 shares of common stock.

The Incentive Plan authorizes the issuance of up to 3,625,000 shares of common stock ( 181,250 shares as adjusted for the May Stock Split),.

It authorizes the issuance of equity-based awards in the form of stock options, stock appreciation rights, restricted shares, restricted share units, other share-based awards and cash-based awards to non-employee directors and to officers, employees and consultants of the Company and its subsidiary, except that incentive stock options may only be granted to the Company’s employees and its subsidiary’s employees.

31 unchanged sentences

The fair value of the stock price at December 31, 2023 was $ 0.0 per share.

Restricted Stock Units

On March 22, 2019, a total of 15,703 of restricted stock units were granted to Mr.

Armstrong, Mr.

Shetty, six employees and one consultant of the Company, under the Company's stock-based compensation plan, at the fair value of $ 54.00 per share, which represents the closing price of the Company's common stock on February 26, 2019.

Restricted stock units granted to Mr.

Armstrong, Mr.

Shetty, and an aggregate of six employees and one consultant of 6,139, 772, 5,729 and an aggregate of 3,063, respectively, vest in installments over either a one-year, two-year, three-year and four-year period and will fully vest by the end of December 31, 2022.

The fair value of these units upon issuance amounted to $847,957.

On January 15, 2019 and February 26, 2019, a total of 526 of restricted stock units were granted to two of the Company’s non-employee directors, under the Incentive Plan, at the calculated fair value of $58.80 and $55.20 per share, respectively, which represents the average closing price of the Company’s common stock for the ten trading days immediately preceding and including the grant date.

The restricted stock units granted on January 15, 2019 will vest on January 15, 2020, subject to each individual’s continued service as a director of the Company through such date, and are payable six months after the termination of the director from the Company’s Board of Directors or death or disability.

The restricted stock units granted on February 26, 2019 vest on the earlier of (A) the first anniversary of the date of the grant or (B) the date of the 2019 annual meeting of the Company’s stockholders subject to each individual’s continued service as a director of the Company through such date, and are payable six months after the termination of the director from the Board of Directors or death or disability.

SAFE & GREEN HOLDINGS CORP.

3 unchanged sentences

Share-based Compensation (continued)

Effective June 5, 2019, a total of 9,189 of restricted stock units were granted to the Company’s non-employee directors, under the Company’s stock-based compensation plan, at the calculated fair value of $ 16.40 per share, which represents the average closing price of the Company’s common stock for the ten trading days immediately preceding and including the grant date.

Restricted stock units granted to directors on June 5, 2019 vest on the earlier of (A) the first anniversary of the date of the grant or (B) the date of the annual meeting of the Company’s stockholders that occurs in the year immediately following the date of the grant;

and are payable six months after the termination of the director from the Board or death or disability.

On April 14, 2020, a total of 35,331 of restricted stock units were granted to Mr.

Armstrong, Mr.

Sheeran, five employees and two consultants of the Company, under the Company's stock-based compensation plan, at the fair value of $4.76 per share, which represents the closing price of the Company's common stock on April 14, 2020.

Restricted stock units granted to Mr.

Armstrong, Mr.

Sheeran, and an aggregate of five employees and one consultant of 11,331, 1,000, 3,000 and an aggregate of 8,000, respectively, will vest in full on the first anniversary of the vesting commencement date and one consultant received 12,000 restricted stock units that vested immediately on April 15, 2020.

The fair value of these units upon issuance amounted to $168,176.

On April 14, 2020, a total of 12,000 of restricted stock units were granted to three of the Company’s non-employee directors, under the Incentive Plan, at the calculated fair value of $4.76 per share, which represents the closing price of the Company’s common stock on April 14, 2020.

The restricted stock units granted on April 14, 2020 will fully vest on April 14, 2021, subject to each individual’s continued service as a director of the Company through such date, and are payable six months after the termination of the director from the Company’s Board of Directors or death or disability.

The fair value of these units upon issuance amounted to $57,120.

On September 23, 2020, a total of 425,000 of restricted stock units were granted to Mr.

Armstrong, Mr.

Sheeran, seven employees and one consultant of the Company, under the Company's stock-based compensation plan, at the fair value of $ 1.81 per share, which represents the closing price of the Company's common stock on September 23, 2020.

Restricted stock units granted to Mr.

Armstrong, Mr.

Sheeran, and an aggregate of seven employees and one consultant of 50,000, 75,000 and an aggregate of 300,000, respectively, and 1/3 will vest on September 23, 2020, 1/3 on the one year anniversary of the grant date and 1/3 on the two year anniversary of the grant date.

The fair value of these units upon issuance amounted to $769,250.

On November 11, 2020, a total of 46,826 of restricted stock units were granted to three of the Company’s non-employee directors, under the Incentive Plan, at the calculated fair value of $ 2.39 per share, which represents the closing price of the Company’s common stock on November 11, 2020.

The restricted stock units granted on November 11, 2020 will vest 1/2 on November 11, 2020 and 1/2 on the one year anniversary of the grant date, subject to each individual’s continued service as a director of the Company through such date, and are payable six months after the termination of the director from the Company’s Board of Directors or death or disability.

The fair value of these units upon issuance amounted to $111,920.

On December 9, 2020, a total of 372,000 of restricted stock units were granted to Mr.

Galvin, under the Company's stock-based compensation plan, at the fair value of $ 3.28 per share, which represents the closing price of the Company's common stock on December 9, 2020.

Restricted stock units granted to Mr.

Galvin will vest 1/2 on December 9, 2020 and 1/2 on the first year anniversary of the grant date.

The fair value of these units upon issuance amounted to $1,220,160.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2022 and 2021

Share-based Compensation (continued)

On October 1, 2021, a total of 1,214,500 of restricted stock units were granted to Mr.

Armstrong, Mr.

Sheeran, thirteen employees and three consultant of the Company, under the Company's stock-based compensation plan, at the fair value of $ 3.38 per share, which represents the closing price of the Company's common stock on October 1, 2021.

Restricted stock units granted to Mr.

Armstrong, Mr.

Sheeran, and an aggregate of thirteen employees and two consultant of 350,000 , 40,000 , 100,000 and an aggregate of 475,000 , respectively, vesting quarterly over two years from the anniversary of the grant date.

Restricted stock units granted to Mr.

Rogers and one consultant of 37,500 and 12,000 vest upon issuance date.

Restricted stock units granted to Mr.

Rogers of 200,000 vest monthly over a two -year period.

The fair value of these units upon issuance amounted to $ 4,105,010 .

On October 1, 2021, a total of 59,170 of restricted stock units were granted to five of the Company's non-employee directors, under the Company's stock-based compensation plan, at the fair value of $ 3.38 per share, which represents the closing price of the Company's common stock on October 1, 2021.

The restricted stock units granted October 1, 2021 vesting monthly over one year and, if earlier, in full on the date of the Company’s 2022 Annual Meeting of Stockholders.

On December 7, 2021, a total of 62,500 of restricted stock units were granted to five of the Company's non-employee advisory directors, under the Company's stock-based compensation plan, at the fair value of $ 2.36 per share, which represents the closing price of the Company's common stock on December 7, 2021.

The restricted stock units granted vest in equal monthly installments over one year period.

During 2022, a total of 1,045,000 of restricted stock units were granted to Mr.

Galvin and seven employees of the Company, under the Company’s stock-based compensation plan, at the fair value ranging from $ 1.30 to $ 2.24 per share, which represents the closing price of the Company’s common stock at the date of grant.

Restricted Stock Units

During 2022 , a total of 1,045,000 ( 52,250 as adjusted for the May Stock Split) of restricted stock units were granted to Mr.

Galvin and seven employees of the Company, under the Company’s stock-based compensation plan, at the fair value ranging from $ 1.30 to $ 2.24 per share ($ 26 to $ 44.80 adjusted for the May Stock Split), which represents the closing price of the Company’s common stock at the date of grant.

The restricted stock units granted vest quarterly over two years from the anniversary of the grant date.

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

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

On November 18, 2022, a total of 80,000 of restricted stock units ( 4,000 as adjusted for the May Stock Split) were granted to four of the Company's non-employee directors, under the Company's stock-based compensation plan, at the fair value of $ 1.30 per share ($ 26.00 adjusted for the May Stock Split), which represents the closing price of the Company's common stock on November 18, 2022.

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

During the three months ended June 30, 2023, a total of 316,834 of restricted stock units ( 15,842 as adjusted for the May Stock Split) were granted to Mr.

Galvin and six employees of the Company under the Company's stock-based compensation plan, at the fair value of $ 0.85 to $ 1.01 per share ($ 17 to $ 20.20 as adjusted for the May Stock Split), which represents the closing price of the Company's common stock at the grant date.

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

On April 4, 2023, a total of 268,166 of restricted stock units ( 13,408 as adjusted for the May Stock Split) were granted to five of the Company's non-employee directors, under the Company's stock-based compensation plan, at the fair value of $ 1.01 ($ 20.20 as adjusted for the May Stock Split) per share, which represents the closing price of the Company's common stock on April 4, 2023.

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

For the year ended December 31, 2023 and 2022 , the Company recognized stock-based compensation of $ 3,210,631 and $ 2,798,844 related to restricted stock units.

46 unchanged sentences

On May 10, 2021, the parties jointly filed with the court a proposed order providing the completion of depositions of all parties and nonparties by September 30, 2021.

The court has not entered the proposed discovery order and no formal action has been taken by the plaintiff Pizzarotti nor the defendant-cross claimant Phipps since the proposed order was submitted.

There are no scheduled hearings or conferences before the court at this time.

Litigation is subject to many uncertainties, and the outcome of this action is not predicted with assurance.

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

On April 4, 2024, the court entered an order setting forth the following dates for the completion of the parties depositions:

(1) deposition of plaintiff shall occur by May 31, 2024, (2) deposition of Phipps shall occur by June 30, 2024, (3) deposition of the Company shall occur by July 20, 2024, (4) deposition of Mr.

Shetty shall occur by August 9, 2024, (5) deposition of FPG Maiden Lane, & J.

Landau shall occur by August 30, 2024, and (6) depositions of non-parties shall occur by September 30, 2024.

As of December 31, 2023, the Company cannot estimate

any potential loss.

(2) CPF GP 2019-1, LLC Litigation – In September 2023, a suit was filed in the form of a declaratory judgment to say CPF GP did not owe certain monies to the Company.

The Company filed counterclaims for the amounts owed.

The case settled in February 2024 in exchange for mutual dismissals and monthly payments of the balance due to the Company from CPF GP.

SAFE & GREEN HOLDINGS CORP.

3 unchanged sentences

Commitm ents and Contingencies (continued)

(3) Farnam Litigation – In October 2023, Farnam Street Financial, Inc.

(“Farnam”), filed suit against the Company seeing monies owed under certain leases.

The Company is confident in its position that the lending practices of Farnam constitute illegal business practices under federal and state law, but is also optimistic of the potential for a resolution.

Litigation is subject to many uncertainties, and the outcome of this action is not predicted with assurance.

Vendor Litigation

45 unchanged sentences

(“FirstForm”) (collectively the “Additional Third Party Defendants”).

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2023 and 2022

Commitm ents and Contingencies (continued)

On September 2, 2021, Schindler Elevator Corp.

12 unchanged sentences

The parties that have answered and appeared in the case are currently engaged in discovery.

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

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2022 and 2021

Commitm ents and Contingencies (continued)

On or about December 31, 2022, the parties who appeared in the HOLA Action executed a Settlement Agreement and Release.

On February 28, 2023 the court “so ordered” the parties’ stipulation dismissing all causes of action against the parties to the Settlement Agreement and Release.

The dispute between SG Blocks, Inc., HOLA

Community Partners, and others in the above-described lawsuit settled, and a

formal settlement agreement was executed in December 2022.

In accordance with

the settlement agreement, all funds to be paid were, in fact, paid.

27, 2023, the settling parties filed a Joint Stipulation to Dismiss All Causes

of Action Against All Parties Except Avesi Construction, LLC (“Aveshi”), and

Saddleback Roofing, Inc.

(“Saddleback”).

The claims against the settling parties,

pursuant to the settlement, were to be dismissed and have since been dismissed.

SG Blocks, Inc.

had taken defaults against Aveshi and Saddleback, and is

continuing to pursue default judgments against same.

EDI International, PC

On June 21, 2019, SG Blocks, Inc.

a lawsuit against EDI International, PC, a New Jersey corporation, in

connection with the parties’ consulting agreement, dated June 29, 2016,

pursuant to which EDI International, PC, was to provide, for a fee, certain

architectural and design services for the Project.

The lawsuit is styled SG

EDI International, PC et al., and was filed in California Superior

Court, for the County of Los Angeles, case no.

SG Blocks, Inc.

claims that EDI International, PC, tortiously interfered with SG Blocks, Inc’s

economic relationship with HOLA Community Partners and Heart of Los Angeles

The complaint seeks in excess of $ 1,275,754 in damages.

International, PC, filed a cross-complaint for alleged unpaid fees and tortious

interference with EDI International, PC’s contractual relationship with HOLA

Community Partners and Heart of Los Angeles Youth, Inc.

EDI International, PC’s

cross-complaint seeks in excess of $ 30,428.71 in damages.

On July 8, 2020, SG

added PVE LLC as a defendant in the lawsuit, claiming PVE LLC is

liable to the same extent as EDI International, PC.

In May 2021, the parties

settled EDI International, PC’s affirmative claims, and its cross-complaint was

dismissed with prejudice on August 23, 2021.

On SG Blocks, Inc.’s remaining

claims, trial is set for May 13, 2024.

Consistent with the Statement, the likelihood of an

unfavorable outcome is neither probable nor remote and we cannot, consistent

with the Statement, estimate the amount or range of recovery in the event of an

unfavorable outcome.

3 .) Teton Buildings, LLC

8 unchanged sentences

On February 11, 2020, the Company filed a proof of claim again Teton in the amount of $ 2,861,401.66 arising from the HOLA Project and the GVL Contract.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2023 and 2022

Commitm ents and Contingencies (continued)

On or about March 16, 2020, the Bankruptcy Court converted Teton’s Chapter 11 reorganization case to a Chapter 7 liquidation case.

8 unchanged sentences

On February 28, 2023 the court “so ordered” the parties’ stipulation dismissing all causes of action against the parties to the Settlement Agreement and Release.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2022 and 2021

Commitm ents and Contingencies (continued)

3.) SG Blocks, Inc.

EDI International, PC .-

On June 21, 2019, SG Blocks filed a lawsuit against EDI International, PC, a New Jersey corporation, in the Superior Court of the State of California, County of Los Angeles, Central District, in connection with the parties' consulting agreement, dated June 29, 2016, pursuant to which EDI International, PC, was to provide, for a fee, certain architectural and design services for the HOLA Project.

SG Blocks, Inc.

claims that EDI International, PC, tortiously interfered with SG Blocks, Inc's economic relationship with HOLA Community Partners and Heart of Los Angeles Youth, Inc.

EDI International, PC, filed a cross-complaint for alleged unpaid fees and tortious interference with EDI International, PC's contractual relationship with HOLA Community Partners and Heart of Los Angeles Youth, Inc.

EDI International, PC's cross-complaint seeks in excess of $ 30,428.71 in damages.

On July 8, 2020, SG Blocks, Inc.

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

The case is currently in the discovery stage and a trial date has been set for May 2, 2022.

On May 14, 2021, EDI accepted the Company’s Statutory Offer of Compromise, pursuant to California Code of Civil Procedures §998, to settle EDI’s cross-claims.

On July 26, 2021, the Company and EDI entered into a certain General Release agreement whereby in exchange for payment by the Company in the amount of $ 67,125.83 EDI released SG Blocks from all liabilities and damages related to EDI’s cross-claims.

The Company continues to prosecute its claim against EDI for tortious interference with the Company’s economic relationship with HOLA Community Partners and Heart of Los Angeles Youth, Inc.

The discovery period has concluded and a trial date has been set for October 2023.

Litigation is subject to many uncertainties, and the outcome of this action is not predicted with assurance.

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

Other Litigation

10 unchanged sentences

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

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

A status conference was

held on November 16, 2022 at which time the Court entered a scheduling order

for the conducting of discovery.

Discovery is ongoing.

A settlement conference was held by the Court on March 14, 2023.

A settlement conference

was held by the Court on March 14, 202, of which the Company was granted

2.) John Williams Shaw and Leo Patrick Shaw

On March 15, 2023, a complaint was filed against John Williams Shaw and Leo Patrick Shaw (the “Defendants”) in the United States District Court of the Southern District of New York seeking damaged to recover short swing profits from the Defendants pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended.

On September 26, 2023, the matter was settled and on, October 3, 2023, a Stipulation and Order of Dismissal with Prejudice was filed and so-ordered by the assigned judge.

Litigation is subject to many uncertainties, and the outcome of this action is not predicted with assurance.

7 unchanged sentences

Galvin is terminated without cause.

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

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

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

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

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

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

Kaelin in such capacity for an initial term of two ( 2 ) years, which provides for an annual base salary of $ 250,000 , a discretionary bonus of up to 20 % of her base salary upon achievement of objectives as may be determined by the Company’s board of directors and severance in the event of a termination without cause on or after September 30, 2023 in amount equal to equal to one year’s annual base salary and benefits.

The Kaelin Employment Agreement also provides for the grant to Ms.

Kaelin of a restricted stock grant under the Company’s Stock Incentive Plan, as amended and as available for grant, of 60,000 shares of the Company’s common stock ( 3,000

as adjusted for the May Stock Split) ,

vesting quarterly on a pro-rata basis over the next eighteen ( 18 ) months of continuous service.

Kaelin is subject to a one -year post-termination non-compete and non-solicit of employees and clients.

She is also bound by confidentiality provisions.

During July 2023, Ms.

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

R elated Party Transactions

As disclosed in Note 9 , on January 21, 2020, CPF GP issued the Company Note and issued to Paul Galvin, the Company’s Chairman and CEO, the Galvin Note.

The transaction closed on January 22, 2019, on which date the Company loaned CPF GP 2019 - 1 LLC $ 400,000 and Mr.

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

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

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

Galvin under the Galvin Note shall be paid directly to, and for the benefit of, the Company.

In connection with the issuance of the Company Note and the Galvin Note, CPF GP, the Company and Mr.

Galvin entered into a Security Agreement, dated January 21, 2020, pursuant to which CPF GP granted a security interest in its LLC interests in CPF MF 2019 - 1 LLC to the Company and Mr.

Galvin to secure its obligations thereunder.

Subsequent to the year ended December 31, 2021, the Galvin Note was assigned to the Company and the principal amount of $ 100,000 was returned to Mr.

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

As disclosed in Note 20 , on December 14, 2023, the Company and Mr.

Galvin entered into the Galvin Note Payable.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2023 and 2022

Subsequent Events

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

On February 7, 2023, the Company closed a private placement offering (the “Offering”) of One Million One Hundred Thousand Dollars ($ 1,100,000 ) in principal amount of the Company’s 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, to Peak One Opportunity Fund, L.P.

(“Peak One”).

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

The Debenture matures twelve months from its date of issuance and bear interest at a rate of 8 % per annum payable on the maturity date.

The Debenture is convertible, at the option of the holder, at any time, into such number of shares of common stock of the Company equal to the principal amount of the Debenture plus all accrued and unpaid interest at a conversion price equal to $ 1.50 (the “Conversion Price”), subject to adjustment for any stock splits, stock dividends, recapitalizations and similar events and in the event the Company, at any time while the Debenture is outstanding, issues, sells or grants any option to purchase, or sells or grants any right to reprice, or otherwise disposes of, or issues common stock or other securities convertible into, exercisable for, or otherwise entitle any person the right to acquire, shares of common stock, other than with respect to an Exempt Issuance (as defined in the Debenture), at an effective price per share that is lower than the then Conversion Price.

In the event of any such anti-dilutive event, the Conversion Price will be reduced at the option of the holder to such lower effective price of the dilutive event, subject to a floor price of $ 0.40 per share, unless and until the Company obtains shareholder approval for any issuance below such floor price.

On March 30, 2023, an affiliate of SG DevCorp.

entered into an agreement to secure financing to pay off the Short-Term Note and Second Short-Term Note by issuing a new $ 5,000,000 note to be secured by the Lago Vista property and SG DevCorp.’s McLean site in Durant, Oklahoma.

As of the date of this report, the financing to pay off the Notes had not closed.

On January 5, 2024, SG Building Blocks and SG Echo, together with SG Building Blocks, the (“Merchants”), entered into a Cash Advance Agreement (“Cash Advance Agreement”) with Maison Capital Group (“Maison”) pursuant to which the Merchants sold to Maison $ 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 .

Pursuant to the Cash Advance Agreement, Maison is expected to withdraw $ 12,500 a week directly from the Merchants’ bank account until the $ 300,000 due to Maison under the Cash Advance Agreement is paid.

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

The Merchants’ obligations under the Cash Advance Agreement are secured by a security interest in all accounts, including without limitation, all deposit accounts, accounts-receivable, and other receivables, chattel paper, documents, equipment, general intangibles, instruments, and inventory, as those terms are defined by Article 9 of the Uniform Commercial Code, now or hereafter owned or acquired by any of them.

In addition, SG Building Blocks’ obligations under the Cash Advance Agreement have been guaranteed by SG Echo, and SG Echo’s obligations under the Cash Advance Agreement have been guaranteed by SG Building Blocks.

The amounts outstanding under the Cash Advance Agreement may be prepaid by the Merchants at any time without penalty.

On January 11, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Peak One Opportunity Fund, L.P.

(“Peak One ”), pursuant to which the Company agreed to issue, in a private placement offering (the “Offering”), upon the satisfaction of certain conditions specified in the Purchase Agreement, two debentures to Peak One in the aggregate principal amount of $ 1,300,000 .

The closing of the first tranche was consummated on January 12, 2024 and the Company issued an 8 % convertible debenture in the principal amount of Six Hundred Fifty Thousand Dollars ($ 650,000.00 ) (the “Debenture”) to Peak One and a warrant (the “Warrant”) to purchase up to Three Hundred Seventy-Five Thousand ( 375,000 ) shares of the Company’s common stock ( 18,750 as adjusted for the May Stock Split), par value $ 0.01 per share (the “common stock”) to Peak One ’s designee, as described in the Purchase Agreement.

The Debenture was sold to Peak One for a purchase price of $ 585,000 , representing an original issue discount of ten percent ( 10 %).

In connection with the Offering, the Company paid $ 17,500 as a non-accountable fee to Peak One to cover its accounting fees, legal fees and other transactional costs incurred in connection with the transactions contemplated by the Purchase Agreement and issued to Peak One and its designee an aggregate of 300,000 shares of its restricted common stock (the “Commitment Shares”) ( 15,000 as adjusted for the May Stock Split) as provided in the Purchase Agreement.

The Debenture matures twelve months from its date of issuance and bears interest at a rate of 8 % per annum payable on the maturity date.

The Debenture is convertible, at the option of the holder, at any time, into such number of shares of common stock of the Company equal to the principal amount of the Debenture, plus all accrued and unpaid interest, at a conversion price equal to $ 0.46 (the “Conversion Price”) ($ 9.20 as adjusted for the May Stock Split), subject to adjustment for any stock splits, stock dividends, recapitalizations and similar events, as well as anti-dilution price protection provisions that are subject to a floor price as set forth in the Debenture.

The Debenture is redeemable by the Company at a redemption price equal to 110 % of the sum of the principal amount to be redeemed plus accrued interest, if any.

While the Debenture is outstanding, if the Company receives cash proceeds of more than $ 1,500,000.00 (the “Minimum Threshold”) in the aggregate from any source or series of related or unrelated sources, the Company shall, within two ( 2 ) business days of the Company’s receipt of such proceeds, inform Peak One of such receipt, following which Peak One shall have the right, in its sole discretion, to require the Company to immediately apply up to 50 % of all proceeds received by the Company (from any source except with respect to proceeds from the issuance of equity or debt to officers and directors of the Company) after the Minimum Threshold is reached to repay the outstanding amounts owed under the Debenture.

The Warrant expires five years from its date of issuance.

The Warrant is exercisable, at the option of the holder, at any time, for up to 375,000 of shares of common stock ( 18,750 as adjusted for the May Stock Split) of the Company at an exercise price equal to $ 0.53 (the “Exercise Price”) ($ 10.60 as adjusted for the May Stock Split) , subject to adjustment for any stock splits, stock dividends, recapitalizations and similar events, as well as anti-dilution price protection provisions that are subject to a floor price as set forth in the Warrant.

The Warrant provides for cashless exercise under certain circumstances.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2023 and 2022

Subsequent Events (Continued)

Maxim Group LLC (“Maxim”) acted as placement agent in the Offering.

In connection with the closing of the first tranche of the Offering, the Company paid a placement fee of $ 40,950 to Maxim.

Assuming the second tranche is closed, a placement fee in an amount equal to $ 40,950 will be payable by the Company to Maxim upon closing of the second tranche of the Offering.

On January 29, 2024, SG Building Blocks, Inc., entered into a Cash Advance Agreement (“Second Cash Advance Agreement”) with Cedar Advance LLC (“Cedar”) pursuant to which SG Building Blocks sold to Cedar $ 1,733,420 of its future receivables for a purchase price of $ 1,180,000 , less underwriting fees and expenses paid and the repayment of prior amounts due Cedar, for net funds provided of $ 215,575 .

Pursuant to the Second Cash Advance Agreement, Cedar is expected to withdraw $ 49,150 a week directly from SG Building Blocks’ bank account until the $ 1,733,420 due to Cedar under the Second Cash Advance Agreement is paid.

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

SG Building Blocks’ obligations under the Cash Advance Agreement have been guaranteed by SG Echo.

On February 7, 2024, SG DevCo., acquired Majestic World Holdings LLC (“MWH”) pursuant to a Membership Interest Purchase Agreement (the “Purchase Agreement”), dated as of February 7, 2024, by and among SG DevCo, the members of MWH listed therein (the “Members”), MWH and Matthew A.

Barstow, as Sellers Representative.

Pursuant to the Purchase Agreement, the aggregate consideration payable by SG DevCo for the outstanding membership interests (the “Membership Interests’) of MWH consists of 500,000 shares of SG DevCo’s restricted stock (the “Stock Consideration”) and $ 500 thousand in cash (the “Cash Consideration”).

The Purchase Agreement and a related side letter agreement (the “Side Letter Agreement”) provide that the aggregate purchase price be paid as follows:

(i) the Stock Consideration was issued at the closing (the “Closing”) on February 7, 2024;

and (ii) 100 % of the Cash Consideration will be paid in five equal installments of $ 100,000 each on the first day of each of the five quarterly periods following the Closing.

The Membership Interests will be transferred and assigned to SG DevCo as follows:

(y) sixty-eight and one quarter percent ( 68.25 %) of the Membership Interests were transferred to SG DevCo at Closing, and (z) the remaining 31.75 % will be transferred to SG DevCo in five equal installments of 6.35 % each on the first day of each of the five quarterly periods following the Closing.

The Purchase Agreement contains customary representations, warranties, and covenants of the parties.

Additional agreements ancillary to the Purchase Agreement were executed at the Closing, including but not limited to a profit sharing agreement, assignments of the Membership Interests and employment agreements.

Pursuant to the profit sharing agreement (the “Profit Sharing Agreement”) entered into as of February 7, 2024, SG DevCo agreed to pay the Members a 50 % share of the net profits for a period of five years that are directly derived from the technology and intellectual property utilized in the real estate focused software as a service offered and operated by MWH and its subsidiaries.

On February 15, 2024, SG DevCo, entered into an amendment (the “Amendment”) to the Securities Purchase Agreement, dated November 30, 2023 (the “Purchase Agreement”) with Peak One Opportunity Fund, L.P.

(“Peak One ”), pursuant to which SG DevCo agreed to issue, in a private placement offering (the “Offering”) upon the satisfaction of certain conditions specified in the Purchase Agreement, two Debentures to Peak One in the aggregate principal amount of $ 1,200,000 .

The closing of the first tranche was consummated on November 30, 2023.

The Purchase Agreement provided that at any time after January 29, 2024, a second tranche closing could occur subject to the mutual written agreement of Peak One and SG DevCo and satisfaction of the closing conditions set forth in the Purchase Agreement, upon which SG DevCo would issue and sell to Peak One on the same terms and conditions a second 8 % convertible debenture in the principal amount of $ 500,000 .

The Amendment provides that the second tranche be separated into two tranches (the second and third tranche) wherein which SG DevCo would issue in each tranche an 8 % convertible debenture in the principal amount of $ 250,000 at a purchase price of $ 225,000 .

In addition, the Amendment provides that SG DevCo will issue (i) 35,000 shares of SG DevCo’s common stock on the closing of each of the second tranche and the third tranche as follows:

17,500 shares of common stock to Peak One ’s designee as described in the Amendment and 17,500 shares of common stock to Peak One , as a commitment fee in connection with the issuance of the second debenture and the third debenture, respectively;

(ii) a common stock purchase warrant to Peak One ’s designee as described in the Amendment for the purchase of 125,000 shares of common stock on the closing of each of the second tranche and the third tranche;

and (iii) pay $ 6,500 of Peak One ’s non-accountable fees in connection with each of the second tranche and the third tranche.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2023 and 2022

Subsequent Events (Continued)

The closing of the second tranche was consummated on February 16, 2024 and SG DevCo issued an 8 % convertible debenture in the principal amount of $ 250,000 (the “Second Debenture”) to Peak One and a warrant (the “Second Warrant”) to purchase up to 125,000 shares of SG DevCo’s common stock to Peak One ’s designee as described in the Amendment.

The Second Debenture was sold to Peak One for a purchase price of $ 225,000 , representing an original issue discount of ten percent ( 10 %).

In connection with the closing of the second tranche, SG DevCo paid $ 6,500 as a non-accountable fee to Peak One to cover its accounting fees, legal fees and other transactional costs incurred in connection with the second tranche and issued to Peak One and its designee an aggregate total of 35,000 shares of SG DevCo’s restricted common stock as described in the Amendment.

The Second Debenture matures twelve months from its date of issuance and bears interest at a rate of 8 % per annum payable on the maturity date.

The Second Debenture is convertible, at the option of the holder, at any time, into such number of shares of common stock of SG DevCo equal to the principal amount of the Second Debenture plus all accrued and unpaid interest at a conversion price equal to $ 2.14 , subject to adjustment for any stock splits, stock dividends, recapitalizations and similar events, as well as anti-dilution price protection provisions that are subject to a floor price as set forth in the Second Debenture.

The Second Debenture is redeemable by SG DevCo at a redemption price equal to 110 % of the sum of the principal amount to be redeemed plus accrued interest, if any.

While the Second Debenture is outstanding, if SG DevCo receives cash proceeds of more than $ 1,500,000.00 (“Minimum Threshold”) in the aggregate from any source or series of related or unrelated sources, SG DevCo shall, within two business days of SG DevCo’s receipt of such proceeds, inform the holder of such receipt, following which the holder shall have the right in its sole discretion to require SG DevCo to immediately apply up to 50 % of all proceeds received by SG DevCo (from any source except with respect to proceeds from the issuance of equity or debt to officers and directors of SG DevCo) after the Minimum Threshold is reached to repay the outstanding amounts owed under the Second Debenture.

The Second Debenture contains customary events of default.

If an event of default occurs, until it is cured, Peak One may increase the interest rate applicable to the Second Debenture to the lesser of eighteen percent ( 18 %) per annum and the maximum interest rate allowable under applicable law and accelerate the full indebtedness under the Second Debenture, in an amount equal to 110 % of the outstanding principal amount and accrued and unpaid interest.

The Second Debenture prohibits SG DevCo from entering into a Variable Rate Transaction (as defined in the Second Debenture) until the Second Debenture is paid in full.

The Second Warrant expires five years from its date of issuance.

The Second Warrant is exercisable, at the option of the holder, at any time, for up to 125,000 shares of common stock of SG DevCo at an exercise price equal to $ 2.53 , subject to adjustment for any stock splits, stock dividends, recapitalizations, and similar events, as well as anti-dilution price protection provisions that are subject to a floor price as set forth in the Second Warrant.

The Second Warrant provides for cashless exercise under certain circumstances.

Under the Amendment, a closing of the third tranche may occur subject to the mutual written agreement of Peak One and SG DevCo and satisfaction of the closing conditions set forth in the Purchase Agreement at any time after April 16, 2024.

Also on February 15, 2024, SG DevCo entered into an amendment (the “RRA Amendment”) to the Registration Rights Agreement, dated November 30, 2023, with Peak One where it agreed to file a registration statement within 60 days of the date of the RRA Amendment with the Securities and Exchange Commission (the “SEC”) to register the maximum number of Registrable Securities (as defined in the RRA Amendment) permitted to be included therein in accordance with applicable SEC rules.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2023 and 2022

Subsequent Events (Continued)

The number of shares of SG DevCo’s common stock that may be issued as commitment shares under the Purchase Agreement and the Amendment, upon conversion of the debentures issued or issuable pursuant to the Purchase Agreement and the Amendment, upon the exercise of warrants issued or issuable pursuant to the Purchase Agreement and the Amendment, and any shares issuable under and in respect of the equity purchase agreement entered into on November 30, 2023, is subject to an exchange cap (the “Exchange Cap”) of 19.99 % of the outstanding number of shares of SG DevCo’s common stock on November 30, 2023, 1,999,000 shares, unless shareholder approval to exceed the Exchange Cap is approved.

Maxim Group LLC (“Maxim”) acted as placement agent in connection with the Offering.

In connection with the closing of the second tranche, SG DevCo paid a placement fee of $ 13,500 to Maxim.

Assuming the third tranche is closed, a placement fee in an amount equal to $ 13,500 will be payable by SG DevCo to Maxim upon closing of the third tranche.

On February 23, 2024, the Merchants entered into a Cash Advance Agreement (“Third Cash Advance Agreement”) with Bridgecap Advance LLC (“Bridgecap”) pursuant to which the Merchants sold to Bridgecap $ 224,850 of their future receivables for a purchase price of $ 150,000 , less underwriting fees and expenses paid, for net funds provided of $ 135,000 .

Pursuant to the Third Cash Advance Agreement, Bridgecap is expected to withdraw $ 2,248.50 a day directly from the Merchants’ bank account until the $ 224,850 due to Bridgecap under the Third Cash Advance Agreement is paid.

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

The Merchants’ obligations under the Third Cash Advance Agreement are secured by a security interest in all accounts, including without limitation, all deposit accounts, accounts-receivable, other receivables, and proceeds therefrom, as those terms are defined by Article 9 of the Uniform Commercial Code, now or hereafter owned or acquired by any of them.

The amounts outstanding under the Third Cash Advance Agreement may be prepaid by the Merchants at any time without penalty.

During January and February 2024, the Company issued an aggregate of 778,681 shares of common stock ( 38,934 .as adjusted for the May Stock Split), resulting from vested restricted stock units.

On March 8, 2024, the Company entered into a warrant inducement agreement (the “Inducement Agreement”) with a certain holder (the “Holder”) of warrants to purchase shares of the Company’s common stock, par value $ 0.01 per share (the “Common Stock”), issued in a private placement offering that closed on October 27, 2021 (the “Existing Warrants”).

Pursuant to the Inducement Agreement, the Holder of the Existing Warrants agreed to exercise for cash the Existing Warrants to purchase up to 1,898,630 shares of common stock ( 94,932 as adjusted for the May Stock Split) , at an exercise price of $ 0.2603 per share ($ 5.206 as adjusted for the May Stock Split) .

The transactions contemplated by the Inducement Agreement are expected to close on March 12, 2024.

The Company will receive aggregate gross proceeds of approximately $ 494,213 , before deducting placement agent fees and other expenses payable by the Company.

In consideration of the Holder’s immediate exercise of the Existing Warrants, the Company issued unregistered warrants (the “New Warrants”) to purchase 3,797,260 shares of Common Stock ( 189,863 as adjusted for the May Stock Split) ( 200 % of the number of shares of common stock issued upon exercise of the Existing Warrants) (the “New Warrant Shares”) to the Holder.

The issuance of the shares of Common Stock underlying the Existing Warrants have been registered pursuant to an existing registration statement on Form S- 1 (File No.

333 - 260996 ), which was declared effective by the Securities and Exchange Commission (the “SEC”) on November 23, 2021.

In addition, pursuant to the Inducement Agreement, the Company agreed not to issue any shares of Common Stock or Common Stock equivalents (as defined in the Inducement Agreement) or to file any other registration statement with the SEC (in each case, subject to certain exceptions) until thirty ( 30 ) days after the closing.

The Company has also agreed not to effect or agree to effect any Variable Rate Transaction (as defined in the Inducement Agreement) until sixty ( 60 ) days after closing.

The Company agreed in the Inducement Agreement to file a registration statement to register the resale of the New Warrant Shares (the “Resale Registration Statement”) on or before thirty ( 30 ) days from the initial closing of the transactions contemplated by the Inducement Agreement, and to use commercially reasonable efforts to have such Resale Registration Statement declared effective by the SEC within sixty ( 60 ) days (or, in the event of a full review, ninety ( 90 ) calendar days) following the date of filing the Resale Registration Statement.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2023 and 2022

Subsequent Events (Continued)

Under the Inducement Agreement, to the extent required under the rules and regulations of the Nasdaq Stock Market, the Company agreed to hold a special or annual meeting of shareholders no later than the 60 th calendar date following the date of the Inducement Agreement for the purpose of seeking the Stockholder Approval (as defined below).

If the Company does not obtain Stockholder Approval at the first meeting, the Company shall call a meeting every ninety ( 90 ) days thereafter to seek Stockholder Approval until the earlier of the date Stockholder Approval is obtained or the New Warrants are no longer outstanding.

The Company expects to use the net proceeds from these transactions for working capital and other general corporate purposes.

Maxim Group LLC (“Maxim”) served as the Company’s financial advisor in connection with the transactions described in the Inducement Agreement, and the Company paid Maxim (i) a cash fee equal to 7.0 % of the aggregate gross proceeds received from the Holder upon exercise of the Existing Warrants and the exercise of the New Warrants, and (ii) $ 10,000 for legal fees and other out-of-pocket expenses.

On March 5, 2024, the Company issued a Promissory Note (“Note”) in favor of 1800 Diagonal Lending LLC (the “Lender”) in the aggregate principal amount of $ 149,500 (the “Principal”), and an accompanying Securities Purchase Agreement, dated March 5, 2024 (the “SPA”).

The Note was purchased by the Lender for a purchase price of $ 130,000 , representing an original issue discount of $ 19,500 .

A one -time interest charge of ten percent ( 10 %) (the “Interest Rate”) will be applied on the issuance date to the Principal.

Under the terms of the Note, beginning on April 15, 2024, the Company is required to make nine monthly payments of accrued, unpaid interest and outstanding principal, subject to adjustment, in the amount of $ 18,272,23 .

The Company shall have a five business day grace period with respect to each payment.

Any amount of principal or interest on this Note which is not paid when due will bear interest at the rate of twenty two percent ( 22 %) per annum from the due date thereof until the same is paid (“Default Interest”).

The Company has right to accelerate payments or prepay in full at any time with no prepayment penalty.

Among other things, an event of default (“Event of Default”) will be deemed to have occurred if the Company fails to pay the principal or interest when due on the Note, whether at maturity, upon acceleration or otherwise, if bankruptcy or insolvency proceedings are instituted by or against the Company or if the Company fails to maintain the listing of its common stock on The Nasdaq Stock Market.

Upon the occurrence of an Event of Default, the Note will become immediately due and payable and the Company will be obligated to pay to the Investor, in satisfaction of its obligations under the Note, an amount equal to 200 % times the sum of the then outstanding principal amount of the Note plus accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment plus Default Interest, if any.

After an Event of Default, at any time following the six month anniversary of the Note, the Lender will have the right, to convert all or any part of the outstanding and unpaid amount of the Note into shares of the Company’s common stock at a conversion price equal to the greater of $ 0.08 or 65 % multiplied by the lowest closing bid price during the 10 trading days prior to the conversion date (representing a discount rate of 35 %).

The Note may not be converted into shares of the Company’s common stock if the conversion would result in the Lender and its affiliates owning an aggregate of in excess of 4.99 % of the then outstanding shares of the Company’s common stock.

In addition, unless the Company obtains shareholder approval of such issuance, the Company shall not issue a number of shares of its common stock under Note, which when aggregated with all other securities that are required to be aggregated for purposes of Nasdaq Rule 5635 (d), would exceed 19.99 % of the shares of the Company’s common stock outstanding as of the date of definitive agreement with respect to the first of such aggregated transactions (the “Conversion Limitation”).

Upon the occurrence of an Event of Default as a result of the Company being delisted from Nasdaq, the Conversion Limitation shall no longer apply.

On April 3, 2024, LV Holding entered into a Modification and Extension Agreement, effective as of April 1, 2024 (the “Extension Agreement”), to extend to April 1, 2025 the maturity date of the promissory note, in the principal amount of $ 5,000,000 (the “LV Note”), issued by LV Holding pursuant to a Loan Agreement, dated March 30, 2023 .

As consideration for the Extension Agreement, LV Holding agreed to pay an extension fee of $ 50,000.00 .

Additionally, the Extension Agreement provides for the LV Note’s interest rate to be increased to a fixed rate of 17.00 %.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2023 and 2022

Subsequent Events (Continued)

In addition, pursuant to a loan agreement dated April 3, 2024 (the “ 2 nd Lien Loan Agreement”), LV Holding issued a promissory note, in the principal amount of $ 1,000,000 (the “ 2 nd Lien Note”), secured by a revised Deed of Trust and Security Agreement, dated April 3, 2024 (the “Revised Deed of Trust”) on the Company’s Lake Travis project site in Lago Vista, Texas, a Modification to Real Estate Mortgage, dated April 3, 2024 (“Mortgage Modification”), to the mortgage, dated March 30, 2023, on the Company’s McLean site in Durant, Oklahoma,.

The 2 nd Lien Note is subordinate to the LV Note.

The 2 nd Lien Note requires monthly installments of interest only, is due in full on April 1, 2025, bears interest at fixed rate of 17.00 % and may be prepaid by LV Holding at any time without interest or penalty.

LV Holding’s obligations under the 2 nd Lien Note have been guaranteed by the Company pursuant to a Guaranty, dated April 3, 2024 (the “Guaranty”).

During March 2024, Peak One converted $ 300,000 of outstanding notes payable to 1,152,516 shares of common stock of the Company ( 57,626 as adjusted for the May Stock Split).

Additionally, during March, 2024, Peak One exercised 227,777 Warrant Shares ( 11,386 as adjusted for the May Stock Split) in accordance with the terms of the Warrant.

During April 2024, Peak One converted $ 350,000 of outstanding notes payable to 1,344,602 shares of common stock of the Company ( 67,230 as adjusted for the May Stock Split).

Additionally, during April 2024, the Company issued 853,055 shares of common stock ( 42,653 as adjusted for the May Stock Split) to Peak One under the EP Agreement.

The Company has entered into a securities purchase agreement with a single institutional investor for the purchase and sale of 1,379,310 shares of its common stock (or common stock equivalents in lieu thereof) and warrants to purchase up to 2,758,620 shares of common stock at a combined offering price of $ 2.90 per share in a private placement priced at-the-market under Nasdaq rules.

The warrants will have an exercise price of $ 2.65 per share, will be exercisable immediately following the date of issuance and will expire in five years from the effective date of a registration statement registering such warrants for resale.

The closing of the offering is expected to occur on or about May 7, 2024, subject to the satisfaction of customary closing conditions.

The gross proceeds from the offering are expected to be approximately $ 4.0 million.

During April 2024, the Company issued

178,571 shares of common stock ( 8,928 as adjusted for the May Stock Split) to a

consultant for services performed.

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

What changed 10-K

Item 9A. Controls and Procedures