What changed in this filing

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Item 1. Financial Statements

2024-05-17 compared with 2023-11-14 · 573 added, 395 removed, 765 unchanged (56% of the section changed)

3 unchanged sentences

Condensed Consolidated Balance Sheets

September 30,

Current assets:

8 unchanged sentences

Right-of-use asset

Long-term note receivable

Intangible assets, net

Deferred contract costs, net

Investment in non-marketable securities

Investment in and advances to equity affiliates

4 unchanged sentences

Lease liability, current maturities

Assumed liability

Customer deposits

Short-term notes payable, net

1 unchanged sentence

Long-term note payable

Contingent consideration liability

Lease liability, net of current maturities

4 unchanged sentences

Common stock, $ 0.01 par value, 75,000,000 shares authorized;

16,482,771 issued and 15,948,789 outstanding as of September 30, 2023 and 12,613,978 issued and 12,590,863 outstanding as of December 31, 2022

1,099,269 issued and 1,095,898 outstanding as of March 31, 2024 and 881,387 issued and 814,969 outstanding as of December 31, 2023

Additional paid-in capital

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

Treasury stock, at cost 3,371 shares as of March 31, 2024 and 3,371 shares as of December 31, 2023

Accumulated deficit

Total Safe & Green Holdings Corp.

stockholders’ equity

Non-controlling interest

6 unchanged sentences

Three Months Ended

September 30,

Three Months Ended

September 30,

Nine Months Ended

September 30,

Nine Months Ended

September 30,

Construction services

Engineering services

Medical revenue

Real estate commissions

Cost of revenue:

Construction services

Engineering services

Medical revenue

Gross profit (loss)

7 unchanged sentences

Interest income

Other income (expense)

Loss before income taxes

Income tax expense

Common stock deemed dividend

net income (loss) attributable to noncontrolling interests

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

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

Net loss attributable to common stockholders

Net loss per share

Basic and diluted

6 unchanged sentences

$ 0.01 Par Value

Safe & Green Holdings Corp.

Stockholders'

Noncontrolling

Stockholders’

Balance at June 30, 2023

D istribution of SG DevCorp

Conversion of short-term notes payable

Balance at September 30, 2023

Balance at December 31, 2022

2 unchanged sentences

Issuance of restricted stock units

Common stock issued for services

Issuance of warrants and restricted common stock

Noncontrolling interest distribution

Treasury stock

Distribution of SG DevCorp

Conversion of short-term notes payable

Balance at September 30, 2023

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

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

$ 0.01 Par Value

Safe & Green Holdings Corp.

Stockholders'

Noncontrolling

Stockholders’

Balance at June 30, 2022

Stock-based compensation

N oncontrolling interest distribution

Repurchase of common stock

Net income (loss)

Balance at September 30, 2022

Balance at March 31, 2023

Balance at December 31, 2023

Stock-based compensation

Issuance of restricted stock units

Noncontrolling interest distribution

Repurchase of common stock

Net income (loss)

Balance at September 30, 2022

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

Issuance of common stock and warrants for debt issuance

Cashless warrant exercise

Issuance of common stock from warrant inducement

Common stock deemed dividend

Conversion of short-term notes payable

SG DevCorp equity transactions

Balance at March 31, 2024

S AFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

Nine Months Ended

September 30, 2023

Nine Months Ended

September 30, 2022

Three Months Ended

March 31, 2024

Three Months Ended

March 31, 2023

Cash flows from operating activities:

6 unchanged sentences

Common stock issued for services

Bad debt expense

SG DevCorp equity transactions

Interest income on long-term note receivable

Stock-based compensation

Loss on asset disposal

Changes in operating assets and liabilities:

Accounts receivable

Escrow - bond

Contract assets

1 unchanged sentence

Intangible assets

Right of use asset

Accounts payable and accrued expenses

Contract liabilities

Due to affiliates

Lease liability

Assumed liability

Customer deposit

Net cash used in operating activities

1 unchanged sentence

Purchase of property, plant and equipment

Proceeds from sale of equipment

Repayment of promissory note

Cash from business combination

Project development costs

Investment in and advances to equity affiliates

Investment in non-marketable securities

Net cash used in investing activities

Cash flows from financing activities:

Repurchase of common stock

Repayment of short term notes payable

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

Proceeds from long-term notes payable

Proceeds from warrant inducement

Distribution paid to non-controlling interest

Net cash provided by (used in) financing activities

Net increase/(decrease) in cash and cash equivalents

Net cash provided by financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents - beginning of period

1 unchanged sentence

Supplemental disclosure of non-cash investing and financing activities:

Initial value of lease liability

Peak Stock and Warrants Issuances

Common stock deemed dividend

Conversion of short-term notes payable to common stock

Assets and liabilities acquired in business combination:

Intangible assets

Accounts payable and accrued expenses

Contingent consideration payable

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

2 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Description of Business

10 unchanged sentences

and (iv) environmental.

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

The manufacturing & construction services 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 Company’s real estate development segment consists of SG Development Corp., our majority owned subsidiary, which 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 consists of 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.

3 unchanged sentences

The first product offering involves GreenSteel™ modules, which are the structural core and shell of an SGBlocks building.

The Company procures the containers, engineer required openings with structural steel enforcements, paint the SGBlocks and then deliver them on-site, where the customer or a customer’s general contractor will complete the entire finish out and installation.

The Company procures the containers, engineers required openings with structural steel enforcements, paints the SGBlocks and then delivers them on-site, where the customer or a customer’s general contractor will complete the entire finish out and installation.

The second product offering involves replicating the process to create the GreenSteel product and, in addition, installing selected materials, finishes and systems (including, but not limited to floors, windows, doors, interior painting, electrical wiring and fixtures, plumbing outlets and bathrooms, roofing system) and delivering SGBlocks pre-fabricated containers to the site for a third party licensed general contractor to complete the final finish out and installation.

11 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Description of Business (continued)

10 unchanged sentences

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

Environmental

During 2022, SG Environmental Solutions Corp.

(“SG Environmental”) was formed and is focused on biomedical waste removal and plans to 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 .

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”).

6 unchanged sentences

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

Environmental

During 2022 , SG Environmental Solutions Corp.

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

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

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

As of March 31, 2024 , the Company had cash and cash equivalents of $ 739,787 and a backlog of $ 964,375 .

See Note 13 for a discussion of constructi on backlog.

4 unchanged sentences

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.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

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.

4 unchanged sentences

Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements.

The condensed financial statements and notes should be read in conjunction with the consolidated financial statements and notes for the year ended December 31, 2022 included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the Securities and Exchange Commission on March 31, 2023.

The condensed financial statements and notes should be read in conjunction with the consolidated financial statements and notes for the year ended December 31, 2023 included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission on May 7, 2024.

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

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

Results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 .

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

3 unchanged sentences

It is reasonably possible that these external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Summary of Significant Accounting Policies (continued)

Operating cycle – The length of the Company’s contracts varies, but is typically between six to twelve months .

9 unchanged sentences

( 5 ) Recognize revenue as performance obligations are satisfied

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Summary of Significant Accounting Policies (continued)

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

percentage of completion).

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

Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term.

For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress toward complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made.

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

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

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

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

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

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

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

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

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

Additionally, SG DevCorp has begun to generate revenue resulting from commissions on residential real estate purchases and sales transactions.

For this revenue, the Company applies recognition of revenue when the customer obtains control over such service, which his at a point in time.

Disaggregation of Revenues

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

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

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

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

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

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

The Company’s revenues are primarily derived from construction related to Modules projects .

The Company's contracts are with customers in various industries.

Revenue recognized over time was $ 968,115 and $ 5,503,935 for the three months ended March 31, 2024 and 2023 , respectively.

Revenue recognized at a point in time was $ 49,816 and $ 0 for the three months ended March 31, 2024 and 2023 , respectively.

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

Three Months Ended September 30,

Revenue by Customer Type

Construction and Engineering Services:

Medical Revenue:

Medical (lab testing, kit sales and equipment)

Total revenue by customer type

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Summary of Significant Accounting Policies (continued)

Nine Months Ended September 30,

Three Months Ended March 31,

Revenue by Customer Type

Construction and Engineering Services:

Multi-Family (includes Single Family)

Medical Revenue:

Medical (lab testing, kit sales and equipment)

Hotel/Hospitality

SG DevCorp sales:

Real estate commissions

Total revenue by customer type

13 unchanged sentences

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

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

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

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

This amount was offset by $ 102,217 , which was reimbursement from the licensee for project costs on this project.

The Company incurred total deferred contract costs of $ 203,926 .

The Company considered this amount an incremental cost of obtaining that ELA, because the Company expected to recover those costs through future royalty payments.

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

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

During the nine months ended September 30, 2023 and 2022 , amortization expense relating to the deferred contract costs amounted to $ 30,589 and $ 30,589 , respectively, and is included in general and administrative expenses on the accompanying consolidated statements of operations.

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

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Summary of Significant Accounting Policies (continued)

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

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

The Company determines the fair value of assets acquired and liabilities assumed based upon its best estimates of the acquisition-date fair value of assets acquired and liabilities assumed in the acquisition.

27 unchanged sentences

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

During the nine months ended September 30, 2023 , the Company contributed an additional $ 25,000 .

During the three months ended March 31, 2024 , the Company contributed an additional $ 25,000 .

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

1 unchanged sentence

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

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

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

During the three months ended March 31, 2024 and 2023 , Norman Berry and Cumberland did not have any material earnings or losses as the investments are in development.

In addition, management believes there was no impairment as of March 31, 2024 .

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Summary of Significant Accounting Policies (continued)

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

The approximate combined financial position of the Company’s equity affiliates is summarized below as of March 31, 2024 and December 31, 2023 :

Condensed balance sheet information:

September 30, 2023

March 31, 2024

December 31, 2023

2 unchanged sentences

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

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

Cash and cash equivalents totaled $ 739,787 and $ 17,448 as of March 31, 2024 , and December 31, 2023 , respectively.

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

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

The Company had no short-term investment as of March 31, 2024 or December 31, 2023 , respectively.

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

8 unchanged sentences

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

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”.

ASC 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).

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

1 unchanged sentence

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

As of September 30, 2023 and December 31, 2022 there was inventory of $ 402,186 and $ 465,560 , respectively, for construction materials.

As of March 31, 2024 and December 31, 2023 , there was inventory of $ 283,593 and $ 156,512 , respectively, for construction materials.

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

1 unchanged sentence

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

There were no impairments during the nine months ended September 30, 2023 or 2022 .

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

Included in intangible assets is $ 68,344 of trademarks, and $ 238,422 of website costs that are being amortized over 5 years.

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

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

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

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

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

There were no impairments during the three months ended March 31, 2024 or 2023 .

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Summary of Significant Accounting Policies (continued)

For the year ending December 31:

2023 (remaining)

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

In addition, included in intangible assets is $ 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, 2023 and determined that there was an $ 1,880,547 impairment loss for the year ended December 31, 2023.

The amortization expense for the three months ended March 31, 2024 and 2023 was $ 3,417 and $ 46,119 , respectively.

The accumulated amortization as of March 31, 2024 and December 31, 2023 was $ 2,921,272 and $ 2,852,929 , respectively.

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.

17 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Summary of Significant Accounting Policies (continued)

20 unchanged sentences

The Company places its cash with high credit quality institutions.

At times, such amounts may be in excess of the FDIC insurance limits.

At times, such amounts may be in excess of Federal Deposit Insurance Corporation insurance limits.

The Company has not experienced any losses in such account and believes that it is not exposed to any significant credit risk on the account.

1 unchanged sentence

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

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

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

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

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

At March 31, 2024 and December 31, 2023 , 89 % and 100 %, of the Company’s gross accounts receivable were due from two and three customers, respectively.

Revenue relating to one and one customer represented approximately 87 % and 95 %, respectively, of the Company's total revenue for the three months ended March 31, 2024 and 2023 , respectively.

There were no vendors representing 10 % or more of the Company’s total cost of revenue for the three months ended March 31, 2024 and 2023 .

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

2 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Accounts Receivable

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

At March 31, 2024 and December 31, 2023 , the Company’s accounts receivable consisted of the following:

Construction services

Other receivable

Total gross receivables

3 unchanged sentences

Contract Assets and Contract Liabilities

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

Costs and estimated earnings on uncompleted contracts, which represent contract assets and contract liabilities, consisted of the following at March 31, 2024 and December 31, 2023 :

Costs incurred on uncompleted contracts

4 unchanged sentences

Net contract assets/(liabilities) on uncompleted contracts

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

The above amounts are included in the accompanying condensed consolidated balance sheets under the f ollowing captions at March 31, 2024 and December 31, 2023 .

Contract assets

Contract liabilities

Net contract assets (liabilities)

Net contract liabilities

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

3 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Property, plant and equipment

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

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

At March 31, 2024 and December 31, 2023 , the Company’s property, plant and equipment, net consisted of the following:

Computer equipment and software

3 unchanged sentences

Building held for leases

Laboratory and temporary units

Construction in progress

2 unchanged sentences

Property, plant and equipment, net

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

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

Depreciation expense for the three months ended March 31, 2024 and 2023 amounted to $ 42,381 and $ 92,193 , respectively.

Notes Receivable

7 unchanged sentences

The transaction closed on April 15, 2021, on which date the Company loaned CPF GP 2019 - 1 LLC $ 250,000 .

The Company Note was issued pursuant to that certain Loan Agreement and Promissory Note, dated October 3, 2019 (the “Loan Agreement 2 ”), as amended on October 15, 2019 and November 7, 2019 by and between the CPF GP and the Company, and bear interest at five percent ( 5 %) per annum, payable, together with the unpaid principal amount of the promissory notes, on the earlier of the July 31, 2023 maturity date or upon the liquidation, redemption sale or issuance of a dividend upon the LLC interests in CPF MF 2019 - 1 LLC, a Texas limited liability company of which CPF GP is the general partner.

The Company Note 2 was issued pursuant to that certain Loan Agreement and Promissory Note, dated October 3, 2019 (the “Loan Agreement 2 ”), as amended on October 15, 2019 and November 7, 2019 by and between the CPF GP and the Company, and bears 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.

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 3 ") and the assignment occurred in January 2022.

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

During the year ended December 31, 2023, the Company determined that the above notes were 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 2023 .

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Notes Payable

On July 14, 2021, SG DevCorp, a subsidiary of the Company, issued a Real Estate Lien Note, in the principal amount of $ 2,000,000 (the “Short-Term Note”), secured by a Deed of Trust, dated July 14, 2021 (the “Deed of Trust”), on the Company's 50 + acre Lake Travis project site in Lago Vista, Texas and a related Assignment of Leases and Rents, dated July 8, 2021 (“Assignment of Rents”), for net loan proceeds of approximately $ 1,948,234 after fees.

On July 14, 2021, SG DevCorp issued a Real Estate Lien Note, in the principal amount of $ 2,000,000 (the “Short-Term Note”), secured by a Deed of Trust, dated July 14, 2021 (the “Deed of Trust”), on the Company's 50 plus acre Lake Travis project site in Lago Vista, Texas and a related Assignment of Leases and Rents, dated July 8, 2021 (“Assignment of Rents”), for net loan proceeds of approximately $ 1,948,234 after fees.

The Short-Term Note has a term of one ( 1 ) year, provides for payments of interest only at a rate of twelve percent ( 12 %) per annum and may be prepaid without penalty commencing nine ( 9 ) months after its issuance date.

If the Short-Term Note is prepaid prior to nine ( 9 ) months after its issuance date, a 0.5 % prepayment penalty is due.

The Company capitalized $ 20,000 in interest charges and $ 4,134 in debt issuance costs during the year ended December 31, 2022 related to the Lago Vista project in accordance with ASC 835 - 20 .

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

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

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

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

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

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%;

The LV Note requires monthly installments of interest only and bears interest at the prime rate as published in the Wall Street Journal (currently 8.0 %) plus five and 50/100 percent (5.5%), currently equaling 13.5%;

provided that in no event will the interest rate be less than a floor rate of 13.5%.

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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”).

The Forgivable Note is due on April 29, 2029 and guaranteed by the Company, provided, if no event of default has occurred under the Forgivable Note or Loan Agreement, one -third ( 1 / 3 ) of the balance of the Forgivable Note will be forgiven on April 29, 2027, one -half ( 1 / 2 ) of the balance of the Forgivable Note will be forgiven on April 29, 2028, and the remainder of the balance of the Forgivable Note will be forgiven on April 29, 2029.

The LV Note had an original maturity date of April 1, 2024.

On April 3, 2024, LV Holding entered into a Modification and Extension Agreement, effective as of April 1, 2024 (the “Extension Agreement”), to extend the maturity date of the LV Note to April 1, 2025 .

As consideration for the Extension Agreement, LV Holding agreed to pay an extension fee of $ 50,000 .

Additionally, the Extension Agreement provides for the LV Note’s interest rate to be increased to a fixed rate of 17.0 %.

On October 29, 2021, SG Echo 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”).

The Forgivable Note is due on April 29, 2029 and guaranteed by the Company, provided that, if no event of default has occurred under the Forgivable Note or Loan Agreement, one -third ( 1 / 3 ) of the balance of the Forgivable Note will be forgiven on April 29, 2027, one -half ( 1 / 2 ) of the balance of the Forgivable Note will be forgiven on April 29, 2028, and the remainder of the balance of the Forgivable Note will be forgiven on April 29, 2029.

The Loan Agreement includes a covenant by SG Echo to employ a minimum of 75 full-time employees in Durant, Oklahoma and pay them no less than 1.5 times the federal minimum wage, and provides SG Echo 24 months to comply with the provision.

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

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

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

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

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

During the year ended December 31, 2023, such note was extended for a period of one year .

During March 2024, the note was modified and the principal amount was increased to $ 200,000 .

SAFE & GREEN HOLDINGS CORP.

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Notes to Condensed Consolidated Financial Statements

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Notes Payable (continued)

On February 7, 2023, the Company closed a private placement offering (the “Offering”) of $ 1,100,000 in principal amount of the Company’s 8 % convertible debenture (the “Debenture”) and a warrant (the “Peak Warrant”) to purchase up to 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 ”).

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”), 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.

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.

2 unchanged sentences

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.

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 of the Company at an exercise price equal to $ 2.25 (the “Exercise 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 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, unless shareholder approval to exceed the Exchange Cap is approved.

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 (the “Exchange Act”), 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.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

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.

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

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

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

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

2 unchanged sentences

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

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

As of March 31, 2024 and December 31, 2023, there was no outstanding balance on this advance.

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 .

2 unchanged sentences

SG Building’s obligations under the Cash Advance Agreement have been guaranteed by SG Echo.

As of March 31, 2024 and December 31, 2023, the outstanding balance was $ 0 and $ 424,454 on this advance, respectively.

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 March 31, 2024 and December 31, 2023, the outstanding balance was $ 0 and $ 302,817 on this advance, respectively.

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.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Notes Payable (continued)

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

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

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.

10 unchanged sentences

(“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).

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Notes Payable (continued)

Pursuant to a Cross-Default and Cross Collateralization Agreement (the “Cross Default Agreement”), effective June 8, 2023, among 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 three months ended September 30, 2023 , the Company recognized amortization of debt issuance costs of $ 10,020 .

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

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 .

5 unchanged sentences

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

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

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.

1 unchanged sentence

Mary’s, Georgia.

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

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

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

8 unchanged sentences

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.

During the three months ended March 31, 2024 the Company entered into an additional promissory note with Mr.

Galvin in the amount of $ 10,000 .

The note shall not accrue interest, and the entire unpaid principal balance is due December 14, 2024 .

On January 5, 2024, SG Building Blocks and SG Echo (together with SG Building Blocks, the “Merchants”) entered into a Cash Advance Agreement (“January 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 .

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Notes Payable (continued)

Pursuant to the January 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 January Cash Advance Agreement is paid.

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

The Merchants’ obligations under the January 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 January Cash Advance Agreement have been guaranteed by SG Echo, and SG Echo’s obligations under the January Cash Advance Agreement have been guaranteed by SG Building Blocks.

The amounts outstanding under the January 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 “January Purchase Agreement”) with Peak One , pursuant to which the Company agreed to issue, in a private placement offering (the “January Offering”), upon the satisfaction of certain conditions specified in the January 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 ) (the “Holdings 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 Holdings 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 January 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 January Purchase Agreement.

The Holdings 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 Holdings 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 Holdings Debenture.

The Holdings 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 Holdings 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.

During the three months ended March 31, 2024, Peak One converted $ 300,000 of its principal balance into 57,627 shares of common stock of the Company.

Such conversion was within the terms of the agreement with no gains or losses recognized on the transactions.

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.

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.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Notes Payable (continued)

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 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 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.

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.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Notes Payable (continued)

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.

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 (“February 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 February 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 February Cash Advance Agreement is paid.

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

The Merchants’ obligations under the February 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 February Cash Advance Agreement may be prepaid by the Merchants at any time without penalty.

On March 1, 2024, SG DevCorp entered into a credit agreement with the Bryan Leighton Revocable Trust Dated December 13th, 2023 (the “Lender”) pursuant to which the Lender agreed to provide SG DevCorp with a line of credit facility (the “Line of Credit”) up to the maximum amount of $ 250,000 from which SG DevCorp may draw down, at any time and from time to time, during the term of the Line of Credit.

The “Maturity Date “of the Line of Credit is September 1, 2024 .

At any time prior to the Maturity Date, upon mutual written consent of the Company and the Lender, the Maturity Date may be extended for up to an additional six -month period.

The advanced and unpaid principal of the Line of Credit from time to time outstanding will bear interest at a fixed rate per annum equal to 12.0 % (the “Fixed Rate”).

On the first day of each month, SG DevCorp will pay to the Lender interest, in arrears, on the aggregate outstanding principal indebtedness of the Line of Credit at the Fixed Rate.

The entire principal indebtedness of the Line of Credit and any accrued interest thereon will be due and payable on the Maturity Date.

In consideration for the extension of the Line of Credit, SG DevCorp issued 154,320 shares of SG DevCorp restricted common stock to Lender.

The fair value of the shares issued to Lender amounted to $ 125,000 and has been recorded as a debt discount and will be amortized over the effective rate method.

During the three months ended March 31, 2024, SG DevCorp drew down $ 100,000 from the Line of Credit.

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.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Notes Payable (continued)

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.

As of March 31, 2024 and December 31, 2023, long term notes payable consisted of the following:

Loan Agreement

Cash Advance Agreement

BCV Loan Agreement

S econd Debenture

T hird Debenture

Leighton Line of Credit

Holdings Debenture

1800 Diagonal Note

January Cash Advance Agreement

February Cash Advance Agreement

G alvin Note Payable

Debt discount and debt issuance costs

current maturities

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Business Combination

On February 7, 2024, SG DevCorp entered into a Membership Interest Purchase Agreement (“MIPA”) to acquire Majestic World Holdings LLC (“Majestic”).

T he aggregate consideration payable by SG DevCorp for the outstanding membership interests (the “Membership Interests’) of Majestic consists of 500,000 shares of SG DevCorp restricted stock (the “Stock Consideration”) and $ 500,000 in cash (the “Cash Consideration”).

The MIPA and a related side letter 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.

In addition, pursuant to a profit sharing agreement entered into as of February 7, 2024 (the “Profit Sharing Agreement”) , SG DevCorp agreed to pay the former members of Majestic 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 Majestic and its subsidiaries.

In accordance with ASC 805 , the Majestic acquisition is accounted for as a business combination.

The Majestic acquisition was made for the purpose of expanding SG DevCorp’s footprint into technology space.

The purchase consideration amounted to:

Contingent consideration payable

Equity consideration

As part of the Majestic acquisition, the Company recorded a contingent consideration liability for additional payments pursuant to the Profit Sharing Agreement.

The initial contingent consideration liability of $ 945,000 was based on the fair value of the contingent consideration liability at the acquisition date, and is payable in cash.

The following table summarizes the preliminary allocation of the purchase price to the assets acquired and liabilities assumed for the Majestic Acquisition:

Cash and cash equivalents

Intangible assets

Accounts payable and accrued expenses

As of March 31, 2024, the Company has not completed its measurement period with respect to the Majestic acquisition.

The amounts above represent provisional amounts recorded at this time and are subject to adjustments once the measurement period has ended.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Business Combination (continued)

Below is a proforma condensed consolidated statement of operations for the three months ended March 31, 2024, as if the Company purchased Majestic as of January 1, 2024.

A proforma condensed consolidated statement of operations for the three months ended March 31, 2023, is not presented because during that period there was no activity in Majestic.

Operating expenses:

Payroll and related expenses

General and administrative expenses

Marketing and business development expense

Operating loss

Other expense:

Interest Expense

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

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

2 unchanged sentences

Balance Sheet Location

September 30, 2023

March 31, 2024

Operating Leases

25 unchanged sentences

Present value of lease liabilities

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Net Income (Loss) Per Share

3 unchanged sentences

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

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

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

At March 31, 2024 , there were options and warrants of 1,822 and 239,321 , respectively, outstanding that could potentially dilute future net income per share .

Because the Company had a net loss as of March 31, 2024 , 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 September 30, 2022 , there were restricted stock units, options and warrants of 757,450 , 36,436 and 2,025,520 shares of common stock, respectively, outstanding that could potentially dilute future net income per share.

At March 31, 2023 , there were restricted stock units, options and warrants of 59,547 , 1,822 and 126,251 , respectively, outstanding that could potentially dilute future net income per share.

Construction Backlog

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

The following represents the backlog of signed construction and engineering contracts in existence at March 31, 2024 and December 31, 2023 , which represents the amount of revenue the Company expects to realize from work to be performed on uncompleted contracts in progress and from contractual agreements in effect at March 31, 2024 and December 31, 2023 , respectively, on which work has not yet begun:

Balance - beginning of period

3 unchanged sentences

Balance - end of period

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

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

The Company’s remaining backlog as of March 31, 2024 represents the remaining transaction price of firm contracts for which work has not been performed and excludes unexercised contract options.

The Company expects to satisfy its backlog which represents the remaining unsatisfied performance obligation on contracts as of March 31, 2024 over the following period:

Within 1 year

5 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Stockholders’ Equity

18 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Stockholders’ Equity (continued)

5 unchanged sentences

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

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

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

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

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

Issuance of common stock and warrants for debt issuance – During the three months ended March 31, 2023 , the Company issued 15,000 shares of common stock and warrants for issuances of debt.

The value of the shares and warrants amounted to $ 251,361 .

Restricted Stock Units – During the three months ended March 31, 2023 , the Company issued 38,934 shares of common stock with a value of $ 179,029 for vested restricted stock units.

Conversion – During the three months ended March 31, 2024, Peak One converted $ 300,000 of its principal balance into 57,627 shares of common stock of the Company.

Such conversion was within the terms of the agreement with no gains or losses recognized on the transactions.

Warrant exercise – During the three months ended March 31, 2024, 11,389 shares of common stock were issued resulting from cashless warrant exercises.

Noncontrolling interest – During the three months ended March 31, 2024 SG DevCorp recorded $ 3,729,806 of additional equity transactions which related to transactions in its own stock from debt issuances to third parties.

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

Segments and Disaggregated Revenue

Corporate and support

Nine Months Ended September 30, 2023

Cost of revenue

Operating expenses

Operating loss

Other income (expense)

Income (loss) before income taxes

Net income attributable to non-controlling interest

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

Depreciation and amortization

Capital expenditures

Corporate and support

Nine Months Ended September 30, 2022

Cost of revenue

Operating expenses

Operating income (loss)

Other income (expense)

Income (loss) before income taxes

Net income attributable to non-controlling interest

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

Depreciation and amortization

Capital expenditures

Inter-segment revenue elimination

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Stockholders’ Equity (continued)

Inducement - 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 Company recognized common stock deemed dividends in the amount of $ 670,881 which resulted from the excess initial fair value of the New Warrants Shares issued described below.

In addition, the Company incurred $ 454,867 of equity related costs which have been netted with the net proceeds from the July 2022 Offering.

The Company received 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.

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.

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

Segments and Disaggregated Revenue (continued)

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Segments and Disaggregated Revenue

Corporate and support

Three Months Ended September 30, 2023

Three Months Ended March 31, 2024

Cost of revenue

3 unchanged sentences

Income (loss) before income taxes

Common stock deemed dividend

Net income attributable to non-controlling interest

3 unchanged sentences

Corporate and support

Three Months Ended September 30, 2022

Three Months Ended March 31, 2023

Cost of revenue

7 unchanged sentences

Capital expenditures

Inter-segment revenue elimination

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

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

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

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

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

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

The 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 .

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 at an initial exercise price of $ 21.25 per share.

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 .

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

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

The warrants 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 issuance of the Debenture in February 2023, the Company issued the Peak Warrant to purchase 500,000 shares of common stock.

The Peak Warrant expires five years from its date of issuance.

The initial fair value of the Peak Warrant amounted to $ 278,239 and was recorded as a debt discount at the time of issuance of the Debenture.

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 ( 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.

These warrants were exercised in connection with the Inducement Agreement during the three months ended March 31, 2024.

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.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Warrants (continued)

In connection with the issuance of the Holdings Debenture in January 2024, the Company issued the 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 Warrant expires five years from its date of issuance.

The Warrant provides for cashless exercise under certain circumstances.

The initial fair value of the Warrant amounted to $ 109,161 and was recorded, in combination with common stock issued above, as a debt discount of $ 251,361 at the time of issuance of the Debenture.

Warrant activity for the three months ended March 31, 2024 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, 2024

Outstanding and exercisable - December 31, 2024

The fair value of warrants granted during the three months ended March 31, 2024 were valued using a Black-Scholes Value model, with the following assumptions

Risk-free interest rate

Contractual term

Dividend yield

Expected volatility

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, and as further amended on October 5, 2023, (the “Incentive Plan”).

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

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 ( 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.

During December 2023, the Incentive Plan was amended to increase the available shares by 5,000,000 .

The Incentive Plan expires on October 26, 2026 , and is administered by the Company’s Compensation Committee of the Boa rd of Directors.

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

As of September 30, 2023 , there were 0 shares of common stock available for issuance under the Incentive Plan .

As of March 31, 2024 , there were 4,892,146 shares of common stock available for issuance under the Incentive Plan .

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Share-based Compensation (continued)

1 unchanged sentence

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

Nine Months Ended

September 30,

Payroll and related expenses

Three Months Ended

September 30,

Payroll and related expenses

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

Nine Months Ended

September 30,

Stock options

Restricted Stock Units

Three Months Ended

September 30,

Stock options

1 unchanged sentence

Stock-Based Option Awards

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

The Company has issued no stock-based options during the three months ended March 31, 2024 or 2023 .

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

3 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Share-based Compensation (continued)

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

The following table summarizes stock-based option activities and changes during the three months ended March 31, 2024 as described below:

Weighted Average Fair Value Per Share

3 unchanged sentences

Outstanding – December 31, 2023

Outstanding – September 30, 2023

Outstanding – March 31, 2024

Exercisable – December 31, 2023

Exercisable – September 30, 2023

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

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

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

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

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

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

Exercisable – March 31, 2024

Restricted Stock Units

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.

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

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

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

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

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

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

During the three months ended March 31, 2024, a total of 44,147 , 15,000 , and 10,000 of restricted stock units were granted to Mr.

Kaelin and an employee of the Company, respectively, under the Company’s stock-based compensation plan at a fair value of $ 2.27 per share, which represents the closing price of the Company’s common stock at the grant date.

The restricted stock units granted vest immediately.

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Share-based Compensation (continued)

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

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

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

For the three months ended March 31, 2024 and 2023 , the Company recognized stock-based compensation of $ 179,029 and $ 656,369 related to restricted stock units.

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

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

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

As of March 31, 2024 , there was no unrecognized compensation costs related to non-vested restricted stock units.

The following table summarized restricted stock unit activities during the three months ended March 31, 2024 :

Number of Shares

1 unchanged sentence

Forfeited/Expired

Non-vested balance at September 30, 2023

Non-vested balance at March 31, 2024

Commitm ents and Contingencies

21 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Commitm ents and Contingencies (continued)

15 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.

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.

( 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.

29 unchanged sentences

The Court also denied the Company’s motion to dismiss HOLA’s claims.

On March 12, 2021, the HOLA Defendants filed an answer to the Company’s complaint against it denying liability and asserting affirmative defenses.

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

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Commitments and Contingencies (continued)

On March 12, 2021, the HOLA Defendants filed an answer to the Company’s complaint against it denying liability and asserting affirmative defenses.

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

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

28 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 was set for January 31, 2023.

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.

On February 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.

v HOLA Community Partners, et.

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.

had taken defaults against Aveshi and Saddleback, and is continuing to pursue default judgments against same.

) SG Blocks, Inc.

EDI International, PC

On June 21, 2019 , SG Blocks, Inc.

filed 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 Blocks, Inc.

EDI International, PC et al., and was filed in California Superior Court, for the County of Los Angeles, case no.

19 STCV 21725 .

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.

The complaint seeks in excess of $ 1,275,754 in damages.

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.

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.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Commitments and Contingencies (continued)

3 .) Teton Buildings, LLC

12 unchanged sentences

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

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Commitments and Contingencies (continued)

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

4 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.

4 .) SG Blocks, Inc.

EDI International, PC .-

On June 21, 2019, the Company 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.

The Company claims that EDI International, PC, tortiously interfered with the Company ’ 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 $ 30,429 in damages.

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

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 the Company 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

6 unchanged sentences

The Company has also asserted that Osang breached the covenant of good faith and fair dealing, fraudulently induced it to enter into the MSA, and violated §349 of the New York General Business Law’s prohibition of deceptive business practices.

On June 18, 2021, Osang served a motion to dismiss the Osang Action pursuant to Rule 12 (b)( 6 ) of the Federal Rules of Civil Procedure.

On July 30, 2021, the Company served its opposition to the motion to dismiss.

On September 22, 2022, the court entered an order granting in part and denying in part Osang’s motion to dismiss.

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 ).

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Commitments and Contingencies (continued)

On June 18, 2021, Osang served a motion to dismiss the Osang Action pursuant to Rule 12 (b)( 6 ) of the Federal Rules of Civil Procedure.

On July 30, 2021, the Company served its opposition to the motion to dismiss.

On September 22, 2022, the court entered an order granting in part and denying in part Osang’s motion to dismiss.

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

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

Safe & Green Holdings Corp.

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

Shaw et al., 1 :

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

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

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

Discovery is ongoing.

A settlement conference was held by the Court on March 14, 2023, of which the Company was granted $ 450,000 .

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 Exchange Act.

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.

Liti gation 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, 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.

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

11 unchanged sentences

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

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

R elated Party Transactions

As disclosed in Note 8 , 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 previously on December 14, 2023, the Company and Mr.

Galvin entered into the Galvin Note Payable and an additional note payable during the three months ended March 31, 2024.

Subsequent Events

The Company has evaluated all events or transactions that occurred after September 30, 2023 through November 14, 2023 , which is the date that the condensed financial statements were available to be issued.

The Company has evaluated all events or transactions that occurred after March 31,2024 through May 17, 2024, which is the date that the condensed financial statements were available to be issued.

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

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

Stock Incentive Plan (the “Plan”).

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

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

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

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

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

however, the Company had offered Mr.

Rogers a two -month extension of his agreement.

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

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

On October 20, 2023, the Company and Mr.

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

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

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

(ii) the parties agreed to extend Mr.

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

(iii) the parties agreed that Mr.

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

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

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

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

(v) the parties acknowledged that Mr.

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

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

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

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

Simultaneously with the execution of the Release Agreement, Mr.

Rogers entered into the Consulting Agreement with DevCo.

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

Pursuant to the Consulting Agreement, Mr.

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

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

Rogers a monthly consulting fee of $ 15,000 .

In addition, the parties agreed that Mr.

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

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

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

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

The Consulting Agreement also provides that Mr.

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

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.

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.

On April 19, 2024, the Company received a delinquency letter (the “Notice”) from the Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that it is not in compliance with the continued listing requirements set forth in Nasdaq Listing Rule 5250 (c)( 1 ) (the “Rule”), which requires timely filing of periodic reports with the Securities and Exchange Commission (the “SEC”) for continued listing.

Nasdaq rules require public announcement to disclose the Company’s receipt of the Notice within four business days of receipt.

On May 7, 2024, we received a letter from Nasdaq stating that we now comply with the Rule.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Subsequent Events (continued)

As of April 25, 2024, SG DevCorp entered into an amendment to the agreement of sale with Pigmental, LLC, a Delaware limited liability company (“Pigmental Studios”), to sell approximately the St.

Pursuant to the original agreement of sale, the Company was to sell the St.

Mary’s Site to Pigmental Studios for $ 1.35 million, payable $ 900,000 in cash and $ 450,000 by the issuance of a promissory note SG DevCorp, with the closing to occur no later than April 30, 2024.

The amendment to the agreement of sale extends the closing date and amends the purchase price contingent upon the closing date selected by Pigmental Studios as follows:

● If Pigmental Studios closes by April 30, 2024, the total purchase price will be $ 1,290,000 .

The payment breakdown for the purchase price will be as follows:

$ 899,000 in cash and $ 390,000 by the issuance of a promissory note to the SG DevCorp.

● If Pigmental Studios closes by May 15, 2024, the total purchase price will be $ 1,310,000 .

The payment breakdown for the purchase price will be as follows:

$ 899,000 in cash and $ 410,000 by the issuance of a promissory note to SG DevCorp.

● If Pigmental Studios closes by May 30, 2024, the total purchase price will be $ 1,375,000 .

The payment breakdown for the purchase price will be as follows:

$ 899,000 in cash and $ 475,000 by the issuance of a promissory note to SG DevCorp.

On April 25, 2024, SG DevCorp entered into a Commercial Contract (the “Contract of Sale”) with Lithe Development Inc., a Texas corporation (“Lithe”), to sell SG DevCorp’s Lago Vista site to Lithe for $ 5.825 million.

The Contract of Sale provides that the closing of the sale by SG DevCorp to Lithe of the Lago Vista site is expected to occur after a 70 -day due diligence period and a subsequent 30 -day closing period.

On April 29, 2024, SG DevCorp entered into a Securities Purchase Agreement, dated April 29, 2024 (the “April 2024 Purchase Agreement”) with Peak One , pursuant to which SG DevCorp agreed to issue, in a private placement offering upon the satisfaction of certain conditions specified in the April 2024 Purchase Agreement, three Debentures to Peak One in the aggregate principal amount of $ 1,200,000 .

At the closing of the first tranche was consummated on April 29, 2024 and SG DevCorp issued an 8 % convertible debenture in principal amount of $ 350,000 (the “First 2024 Debenture”) to Peak One and a warrant (the “First 2024 Warrant”) to purchase up to 262,500 shares of SG DevCorp’s common stock, to Peak One ’s designee as described in the Purchase Agreement.

The First 2024 Debenture was sold to Peak One for a purchase price of $ 315,000 , representing an original issue discount of ten percent ( 10 %).

In connection with the closing of the first tranche, SG DevCorp paid $ 10,000 as a non-accountable fee to Peak One to cover its accounting fees, legal fees and other transactional costs and issued to Peak One and its designee an aggregate total of 80,000 shares of its restricted common stock as commitment shares.

The First 2024 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 First 2024 Debenture is convertible, at the option of the holder, at any time, into such number of shares of common stock of SG DevCorp equal to the principal amount of the First 2024 Debenture plus all accrued and unpaid interest at a conversion price equal to $ 0.70 , 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 of $ 0.165 .

The First 2024 Debenture is redeemable by SG DevCorp at a redemption price equal to 110 % of the sum of the principal amount to be redeemed plus accrued interest, if any.

While the First 2024 First 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 First 2024 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 First 2024 Debenture, in an amount equal to 110 % of the outstanding principal amount and accrued and unpaid interest.

Subject to limited exceptions set forth in the First 2024 Debenture, the First 2024 Debenture prohibits the Company from entering into a Variable Rate Transaction (as defined in the First 2024 Debenture) or incurring any new indebtedness that is senior to the First 2024 Debenture or secured by the assets of the Company until the First 2024 Debenture is paid in full.

The First 2024 Warrant expires five years from its date of issuance.

The First 2024 Warrant is exercisable, at the option of the holder, at any time, for up to 262,500 of shares of common stock of SG DevCorp at an exercise price equal to $ 0.76 , 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 of $ 0.165 .

The First 2024 Warrant provides for cashless exercise under certain circumstances.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Subsequent Events (continued)

Under the April 2024 Purchase Agreement, a closing of the second tranche may occur subject to the mutual written agreement of Peak One and SG DevCorp and satisfaction of the closing conditions set forth in the Purchase Agreement at any time after June 28, 2024, upon which the Company would issue and sell to Peak One on the same terms and conditions a second 8 % convertible debenture in the principal amount of $ 350,000 and issue to Peak One ’s designee on the same terms and conditions a second warrant to purchase up to 262,500 shares of SG DevCorp’s common stock.

The second debenture would be sold to Peak One for a purchase price of $ 315,000 , representing an original issue discount of ten percent ( 10 %).

In connection with the closing of the second tranche, the Company will pay $ 10,000 as a non-accountable fee to Peak One to cover its accounting fees, legal fees and other transactional costs and will issue to Peak One and its designee an aggregate total of 80,000 shares as commitment shares.

Under the April 2024 Purchase Agreement, a closing of the third tranche may occur subject to the mutual written agreement of Peak One and SG DevCorp and satisfaction of the closing conditions set forth in the Purchase Agreement at any time after 60 days after the closing of the second tranche, upon which SG DevCorp would issue and sell to Peak One on the same terms and conditions a third 8 % convertible debenture in the principal amount of $ 500,000 .

and issue to Peak One ’s designee on the same terms and conditions a third warrant ) to purchase up to 375,000 shares of SG DevCorp’s common stock.

The third debenture would be sold to Peak One for a purchase price of $ 450,000 , representing an original issue discount of ten percent ( 10 %).

In connection with the closing of the third tranche, SG DevCorp will pay $ 10,000 as a non-accountable fee to Peak One to cover its accounting fees, legal fees and other transactional costs and will issue to Peak One and its designee an aggregate total of 100,000 shares as commitment shares.

The number of shares of SG DevCorp’s common stock that may be issued pursuant to the April 2024 Purchase Agreement (including the commitment shares), upon conversion of the debentures, exercise of the warrants, the issuance of Common Stock underlying the common stock purchase warrants issued by SG DevCorp on February 15, 2024 and March 21, 2024 (the “Prior Warrants”), and the issuance of an aggregate of 35,000 shares of Common Stock to Peak One and its designee in connection with the issuance of the Prior Warrants, is subject to an exchange cap of 19.99 % of the outstanding number of shares of SG DevCorp’s common stock on the closing date, of which at least 1,982,819 shares of Common Stock shall be allocated to the transactions contemplated by the April 2024 Purchase Agreement, unless shareholder approval to exceed the exchange cap is approved.

On May 1, 2024, the Company filed an amendment (the “Amendment”) to its Amended and Restated Certificate of Incorporation (the “Restated Certificate”) with the Secretary of State of the State of Delaware to effect a reverse stock split of the Company’s common stock, par value $ 0.01 (the “Common Stock”), at a ratio of 1-for-20 (the “Reverse Stock Split”), with an effective time of 12 :

Eastern Time on May 2, 2024 (the “Effective Time”).

The Company expects that upon the opening of trading on May 2, 2024, the Common Stock will begin trading under the existing trading symbol “SGBX” on a split-adjusted basis under a new CUSIP number, 78418 A 604 .

On May 3, 2024, the Company entered into a Securities Purchase Agreement (the “May Securities Purchase Agreement”) for a private placement (the “Private Placement”) with a single accredited institutional investor (the “Purchaser”).

Pursuant to the Securities Purchase Agreement, the Purchaser agreed to purchase 130,000 shares (the “Shares”) of the Company’s common stock, par value $ 0.01 per share (the “Common Stock”), and pre-funded warrants to purchase 1,249,310 shares of Common Stock in lieu thereof (the “Pre-Funded Warrants”) and common warrants (the “Common Warrants”) to purchase up to 2,758,620 shares of Common Stock.

Pursuant to the May Securities Purchase Agreement, the combined offering price of each Share and Common Warrant was set at $ 2.90 and the combined offering price of each Pre-Funded Warrant and Common Warrant was set at $ 2.8999 .

The Shares, the Pre-Funded Warrants, the Common Warrants and the shares of Common Stock issuable upon exercise of the Pre-Funded Warrants and Common Warrants are collectively referred to herein as the “Securities.”

The Pre-Funded Warrants are exercisable immediately following the date of issuance, may be exercised at any time until all of the Pre-Funded Warrants are exercised in full, and have an exercise price of $ 0.0001 per share.

The Common Warrants are exercisable immediately following the date of issuance, have a term of five years from the effective date of the Registration Statement (as defined below) registering the Shares and the shares of Common Stock issuable upon exercise of the Pre-Funded Warrants and the Common Warrants and have an exercise price of $ 2.65 per share.

A holder may not exercise any Pre-Funded Warrants that would cause the aggregate number of shares of common stock beneficially owned by the holder to exceed 9.99 % of the Company’s outstanding Common Stock immediately after exercise.

A holder may not exercise any Common Warrants that would cause the aggregate number of shares of common stock beneficially owned by the holder to exceed 4.99 % of the Company’s outstanding Common Stock immediately after exercise.

The Pre-Funded Warrants and the Common Warrants are subject to adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Common Stock and also upon any distributions for no consideration of assets to the Company’s stockholders.

In the event of certain corporate transactions, the holders of the Pre-Funded Warrants and the Common Warrants will be entitled to receive, upon exercise of the Pre-Funded Warrants and the Common Warrants, respectively, the kind and amount of securities, cash or other property that the holders would have received had they exercised the Pre-Funded Warrants and the Common Warrants immediately prior to such transaction.

The Pre-Funded Warrants and the Common Warrants do not entitle the holders thereof to any voting rights or any of the other rights or privileges to which holders of common stock are entitled.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Subsequent Events (continued)

In the event of a “Fundamental Transaction,” which term is defined in the Pre-Funded Warrants and the Common Warrants and generally includes (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person (as defined in the Pre-Funded Warrants and Common Warrants) in which the Company is not the surviving entity (other than a reincorporation in a different state, a transaction for changing the Company’s name, or a similar transaction pursuant to which the surviving company remains a public company), (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of the Company’s assets in one or a series of related transactions (which, for the avoidance of doubt, shall not include such transactions that do not require approval of the Company’s stockholders), (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of more than 50 % of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property other than a stock split, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons

whereby such other Person or group acquires more than 50 % of the voting power of the common equity of the Company, the holders of the Pre-Funded Warrants and Common Warrants will be entitled to receive upon exercise of the Pre-Funded Warrants and the Common Warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised such warrants immediately prior to such Fundamental Transaction.

Additionally, as more fully described in the Common Warrants, in the event of certain Fundamental Transactions, the holders of the Common Warrants will be entitled to receive consideration in an amount equal to the Black Scholes Value (as defined in the Common Warrants) of the remaining unexercised portion of the Common Warrants on the date of consummation of such Fundamental Transaction.

The Private Placement closed on May 7, 2024.

The Company received gross proceeds from the Private Placement of approximately $ 4.0 million before deducting fees to the placement agent and other offering expenses payable by the Company.

The Company intends to use the net proceeds from the Private Placement for general corporate purposes and potential repayment of indebtedness.

As of May 6, 2024, SG DevCorp entered into an Asset Purchase Agreement (the “APA”) with Dr.

Axely Congress to purchase all of the assets related to the A.I technology known as My Virtual Online Intelligent Assistant (“MyVONIA”).

MyVONIA, an advanced artificial intelligence (AI) assistant, utilizes machine learning and natural language processing algorithms to provide users with human-like conversational interactions, tailored to their specific needs.

MyVONIA does not require an app, or website but is accessible to subscribers via text messaging.

The purchase price for MyVONIA is up to 500,000 shares of SG DevCorp’s common stock.

Of such shares, 200,000 shares of common stock will be issued at closing, with an additional 300,000 shares of common stock issuable upon the achievement of certain benchmarks.

The APA contains customary closing conditions and Dr.

Congress has agreed to a non-compete.

Congress will also enter into a consulting agreement with SG DevCorp at closing to continue to develop MyVONIA and provide such other services as are required pursuant thereto.

On May 16, 2024, the Company received a letter from Nasdaq stating that for the period from May 2, 2024 to May 15, 2024, the closing bid price of the Company’s common stock has been at $ 1.00 per share or greater, and accordingly the Company has regained compliance with Listing Rule 5550 (a)( 2 ).

Also on May 16, 2024, the Company received a letter from Nasdaq notifying the Company that it was not in compliance with Nasdaq Listing Rule 5550 (b)( 1 ) (“Rule 5550 (b)( 1 )”) because the stockholders’ equity of the Company of $ 6,334,859 , as reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, was below the minimum requirement of $ 2.5 million.

The notification received has no immediate effect on the Company’s continued listing on Nasdaq, subject to the Company’s compliance with the other continued listing requirements.

The Company intends to submit a compliance plan by the deadline, monitor its stockholders’ equity, and if appropriate, evaluate further available options to regain compliance with Rule 5550 (b)( 1 ).

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

What changed 10-Q

Item 1. Financial Statements