What changed in this filing

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Item 1. Financial Statements

2024-08-14 compared with 2024-05-17 · 460 added, 435 removed, 903 unchanged (50% of the section changed)

21 unchanged sentences

Lease liability, current maturities

Customer deposits

Short-term notes payable, net

8 unchanged sentences

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

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

1,747,992 issued and outstanding as of June 30, 2024 and 881,387 issued and 814,969 outstanding as of December 31, 2023

Additional paid-in capital

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

Treasury stock, at cost 3,371 shares as of June 30, 2024 and December 31, 2023

Accumulated deficit

8 unchanged sentences

Three Months Ended

Six Months Ended

Construction services

27 unchanged sentences

Stockholders’

Balance at December 31, 2022

Stock-based compensation

Issuance of restricted common stock

Issuance of restricted stock units

Issuance of warrants and restricted common stock

Noncontrolling interest distribution

Balance at March 31, 2024

F ractional share adjustment

C onversion of debt and interest

I ssuance of stock under EP Agreement

I ssuance of stock for accounts payable settlement

I ssuance of common stock

P refunded warrant exercise

S tock compensation expense

SG D evCorp equity transactions

Balance at June 30, 2024

Balance at December 31, 2023

Stock-based compensation

Issuance of common stock and warrants for debt issuance

Stock-based compensation and issuance of RSU’s

Cashless warrant exercise

Issuance of common stock from warrant inducement

Issuance of common stock and warrants for debt issuance

Common stock deemed dividend

Conversion of short-term notes payable

Issuance of common stock from warrant inducement

Conversion of debt and interest

Factional share adjustment

I ssuance of common stock under EP Agreement

Is suance of stock for accounts payable settlement

SG DevCorp equity transactions

Issuance of common stock

Balance at June 30, 2024

The accompanying notes are an integral part of

these condensed consolidated financial statements.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

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

$ 0.01 Par Value

Noncontrolling

Stockholders’

Balance at March 31, 2023

Stock-based compensation

Treasury stock

Issuance of restricted stock units

Common stock issued for services

N oncontrolling interest distribution

Balance at June 30, 2023

Balance at December 31, 2022

Stock-based compensation

Issuance of restricted common stock

Issuance of restricted stock units

Common stock issued for services

Issuance of warrants and restricted common stock

Noncontrolling interest distribution

Treasury stock

Balance at June 30, 2023

The accompanying notes are an integral part of

these condensed consolidated financial statements.

S AFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

Three Months Ended

March 31, 2024

Three Months Ended

March 31, 2023

Six Months Ended

June 30, 2024

Six Months Ended

June 30, 2023

Cash flows from operating activities:

17 unchanged sentences

Lease liability

Customer deposit

Assumed liability

Net cash used in operating activities

8 unchanged sentences

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

Proceeds from long-term notes payable

Purchase of treasury stock

Proceeds from warrant inducement

Prefunded warrant exercise

Issuance of common stock

Distribution paid to non-controlling interest

4 unchanged sentences

Supplemental disclosure of non-cash investing and financing activities:

Peak Stock and Warrants Issuances

Cashless warrant exercise

Fractional common share adjustment

Common stock deemed dividend

Conversion of short-term notes payable to common stock

Prepaid interest for short-term notes payable

Common stock issuance for asset acquisition

Common stock issuance for accounts payable settlement

Assets and liabilities acquired in business combination:

5 unchanged sentences

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Notes to Condensed Consolidated Financial Statements (Unaudited)

Description of Business

6 unchanged sentences

The Company operates in the following four segments:

(i) manufacturing & construction services;

(i) construction;

(ii) medical;

1 unchanged sentence

and (iv) environmental.

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

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

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

The Company’s real estate development segment 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 Company’s real estate development segment consists of SG DevCorp (as defined below), 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.

18 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

Description of Business (continued)

4 unchanged sentences

(“SG Medical”).

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

The Company also entered into a joint venture with Clarity Lab Solutions LLC., to provide clinical lab testing related to COVID- 19 which ceased activities in 2023 .

Real Estate Development

8 unchanged sentences

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 .

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 Quarterly Report on Form 10-Q for the period ended June 30, 2024 have been adjusted to reflect the reverse stock split effected in May 2024 .

Separation and Distribution

10 unchanged sentences

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 .

As of June 30, 2024 , the Company had cash and cash equivalents of $ 1,016,784 and a backlog of $ 4,079,790 .

See Note 13 for a discussion of constructi on backlog.

2 unchanged sentences

Total Backlog

The Company has incurred losses since its inception, has negative working capital of $ 15,496,033 and has negative operating cash flows, which has raised substantial doubt about its ability to continue as a going concern.

The Company has incurred losses since its inception, has negative working capital of $ 14,912,769 as of June 30, 2024 and has negative operating cash flows, which has raised substantial doubt about its ability to continue as a going concern.

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

7 unchanged sentences

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

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

Results for the six months ended June 30, 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.

6 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

Summary of Significant Accounting Policies (continued)

20 unchanged sentences

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.

Revenue recognized at a point in time and recognized over time were $ 91,978 and $ 2,179,369 , respectively, for the six months ended June 30, 2024 .

Revenue recognized at a point in time and recognized over time were $ 0 and $ 10,600,990 , respectively, for the six months ended June 30, 2023 .

Revenue recognized at a point in time and recognized over time were $ 42,162 and $ 1,211,254 , respectively, for the three months ended June 30, 2024 .

Revenue recognized at a point in time and recognized over time were $ 0 and $ 5,097,055 , respectively, for the three months ended June 30, 2023 .

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

2 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

Summary of Significant Accounting Policies (continued)

Three Months Ended March 31,

Three Months Ended June 30,

Revenue by Customer Type

4 unchanged sentences

Total revenue by customer type

Six Months Ended June 30,

Revenue by Customer Type

Construction and Engineering Services:

Hotel/Hospitality

SG DevCorp sales:

Real estate commissions

Total revenue by customer type

Contract Assets and Contract Liabilities

15 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

Summary of Significant Accounting Policies (continued)

4 unchanged sentences

Costs that the Company incurs to complete the business combination are charged to general and administrative expenses as they are incurred.

For acquisitions of assets that do not constitute a business, any assets and liabilities acquired are recognized at their cost based upon their relative fair value of all asset and liabilities acquired.

Variable Interest Entities – The Company accounts for certain legal entities as variable interest entities (“VIE ” ).

23 unchanged sentences

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

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

During the six months ended June 30, 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 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 .

During the six months ended June 30, 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 June 30, 2024 .

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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 is summarized below as of March 31, 2024 and December 31, 2023 :

The approximate combined financial position of the Company’s equity affiliates is summarized below as of June 30, 2024 and December 31, 2023 :

Condensed balance sheet information:

March 31, 2024

June 30, 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 $ 739,787 and $ 17,448 as of March 31, 2024 , and December 31, 2023 , respectively.

Cash and cash equivalents totaled $ 1,016,784 and $ 17,448 as of June 30, 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 March 31, 2024 or December 31, 2023 , respectively.

The Company had no short-term investment as of June 30, 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.

14 unchanged sentences

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

As of June 30, 2024 and December 31, 2023 , there was inventory of $ 223,402 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 three months ended March 31, 2024 or 2023 .

There were no impairments during the six months ended June 30, 2024 or 2023 .

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

Summary of Significant Accounting Policies (continued)

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.

Intangible assets – Intangible assets consist of $ 68,344 of trademarks, and $ 27,510 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 relating to intangible assets of proprietary knowledge and technology.

The amortization expense for the six months ended June 30, 2024 and 2023 was $ 6,834 and $ 47,291 , respectively.

The accumulated amortization as of June 30, 2024 and December 31, 2023 was $ 56,558 and $ 2,852,929 , respectively.

The remaining balance of the Company’ intangible assets is comprised of software development costs which are not yet placed in service.

Property, plant and equipment – Property, plant and equipment is stated at cost.

6 unchanged sentences

Including the project development costs associated with Lago Vista of $ 824,231 , the book value is now $ 4,400,361 .

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 the Lago Vista Property for $ 5.825 million.

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

Convertible instruments – The Company bifurcates conversion options from their host instruments and accounts for them as free standing derivative financial instruments according to certain criteria.

9 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

Summary of Significant Accounting Policies (continued)

24 unchanged sentences

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

At 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 .

At June 30, 2024 and December 31, 2023 , 100 % of the Company’s gross accounts receivable were due from four and three customers, respectively.

Revenue relating to three and two customers represented approximately 73 % and 96 %, respectively, of the Company's total revenue for the three months ended June 30, 2024 and 2023 , respectively.

Revenue relating to four and one customers represented approximately 88 % and 96 % of the Company's total revenue for the six months ended June 30, 2024 and 2023 , respectively.

There were no vendors representing 10 % or more of the Company’s total cost of revenue for the three and six months ended June 30, 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 Three Months Ended March 31, 2024 and 2023 (Unaudited)

Accounts Receivable

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

At June 30, 2024 and December 31, 2023 , the Company’s accounts receivable consisted of the following:

Construction services

4 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 March 31, 2024 and December 31, 2023 :

Costs and estimated earnings on uncompleted contracts, which represent contract assets and contract liabilities, consisted of the following at June 30, 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 March 31, 2024 and December 31, 2023 .

The above amounts are included in the accompanying condensed consolidated balance sheets under the f ollowing captions at June 30, 2024 and December 31, 2023 .

Contract assets

6 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

At June 30, 2024 and December 31, 2023 , the Company’s property, plant and equipment, net consisted of the following:

Computer equipment and software

7 unchanged sentences

Property, plant and equipment, net

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

Depreciation expense for the three months ended June 30, 2024 and 2023 amounted to $ 42,297 and $ 92,771 , respectively.

Depreciation expense for the six months ended June 30, 2024 and 2023 amounted to $ 85,034 and $ 184,964 respectively.

Notes Receivable

On January 21, 2020, CPF GP 2019 - 1 LLC (“CPF GP”) issued to the Company a promissory note in the principal amount of $ 400,000 (the “Company Note”) and issued to Paul Galvin, the Company’s Chairman and CEO, a promissory note in the principal amount of $ 100,000 (the “Galvin Note”).

The transaction closed on January 22, 2021, 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 that certain Loan Agreement and Promissory Note, dated October 3, 2019 (the “Loan Agreement”), as amended on October 15, 2019 and November 7, 2019 by and between 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;

On January 21, 2020, pursuant to that certain Loan Agreement and Promissory Note, dated October 3, 2019 (the “CPF GP Loan Agreement”), as amended on October 15, 2019 and November 7, 2019, by and between CPF GP 2019 - 1 LLC (“CPF GP”) and the Company, CPF GP issued to the Company a promissory note in the principal amount of $ 400,000 (the “Company Note”) and issued to Paul Galvin, the Company’s Chairman and CEO, a promissory note in the principal amount of $ 100,000 (the “Galvin Note”).

The Company Note and Galvin Note 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 CPF GP’s limited liability company interests in CPF MF 2019 - 1 LLC, a Texas limited liability company of which CPF GP is the general partner (“CPF MF”);

provided, that the terms of the Galvin Note 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 April 2020, CPF GP issued to the Company a promissory note in the principal amount of $ 250,000 (the “Company Note 2 ”).

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

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 ").

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 .

Galvin under the Galvin Note shall be paid directly to, and for the benefit of, the Company.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.

On April 15, 2020, pursuant to the CPF GP Loan Agreement, CPF GP issued to the Company a promissory note in the principal amount of $ 250,000 (the “Company Note 2 ”).

The Company Note 2 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 CPF GP’s limited liability company interests in CPF MF.

During the year ended December 31, 2023, the Company determined that the Company Note, the Galvin Note and the Company Note 2 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 Three Months Ended March 31, 2024 and 2023 (Unaudited)

Notes Payable

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.

Lago Vista (“LV”) Note

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, 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, 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.

1 unchanged sentence

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

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

On September 8,2022, 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 (the “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.

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 “ LV Peninsula Loan Agreement”), by and between LV Peninsula and Austerra Stable Growth Fund, LP (“Austerra”), issued a promissory note to Austerra in the principal amount of $ 5,000,000 (the “LV Note”), secured by a Deed of Trust and Security Agreement, dated March 30, 2023, on the Lake Travis project site in Lago Vista, Texas, a related Assignment of Contract Rights, dated March 30, 2023, 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 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%;

The LV Note requires monthly installments of interest only and bears interest at the prime rate as published in the Wall Street Journal ( 8.0 % as of June 30, 2024) plus five and 50/100 percent (5.5%), equaling 13.5% as of June 30, 2024;

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

2 unchanged sentences

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 .

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

As consideration for the Extension Agreement, LV Peninsula 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 17.00 %.

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.

In addition, pursuant to a loan agreement dated April 3, 2024 (the “ 2 nd Lien Loan Agreement”), LV Peninsula issued a promissory note, in the principal amount of $ 1,000,000 (the “ 2 nd Lien Note”), secured by a revised Deed of Trust and Security Agreement, dated April 3, 2024 (the “Revised Deed of Trust”) on the Company’s Lago Vista site, a Modification to Real Estate Mortgage, dated April 3, 2024 (“Mortgage Modification”), to the mortgage, dated March 30, 2023, on SG DevCorp’s McLean site in Durant, Oklahoma,.

The 2 nd Lien Note is subordinate to the LV Note.

The 2 nd Lien Note requires monthly installments of interest only, is due in full on April 1, 2025, bears interest at fixed rate of 17.00 % and may be prepaid by LV Peninsula at any time without interest or penalty.

LV Peninsula’s obligations under the 2 nd Lien Note have been guaranteed by the SG DevCorp pursuant to a Guaranty, dated April 3, 2024.

Authority Loan Agreement

On October 29, 2021, SG Echo entered into a Loan Agreement ( the “Authority Loan Agreement”) with the Durant Industrial Authority (the “Authority”) pursuant to which it issued to the Authority a non-interest bearing Forgivable Promissory Note in the principal amount of $ 750,000 (the “Forgivable Note”) in exchange for $ 750,000 to be used for renovation improvements related to the Company’s approximately 58,000 square-foot manufacturing facility in Durant, Oklahoma.

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 the Authority 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.

In August 2022, SG DevCorp entered into a $ 148,300 promissory note (“ 2022 Note”) to purchase property.

Mary’s Site Promissory Note

In August 2022, SG DevCorp entered into a $ 148,300 promissory note (the “ 2022 Note”) with a lender in connection with the purchase of approximately 27 acres of land adjacent to the Cumberland Inlet Project from the Camden County Joint Development Authority.

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.

4 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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 Transactions

On February 7, 2023, the Company closed a private placement offering (the “Peak One 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 ”).

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 %).

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

During the year ended December 31, 2023, Peak One converted $ 730,000 of its principal balance into 508,917 shares of common stock of the Company ( 25,446 shares as adjusted for the May Stock Split).

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

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

The Debenture matures twelve months from its date of issuance and bears interest at a rate of 8 % per annum payable on the maturity date.

The Debenture is convertible, at the option of the holder, at any time, into such number of shares of common stock of the Company equal to the principal amount of the Debenture plus all accrued and unpaid interest at a conversion price equal to $ 1.50 (the “Conversion Price”) ($ 30 as adjusted for the May Stock Split), subject to adjustment for any stock splits, stock dividends, recapitalizations and similar events and in the event the Company, at any time while the Debenture is outstanding, issues, sells or grants any option to purchase, or sells or grants any right to reprice, or otherwise disposes of, or issues common stock or other securities convertible into, exercisable for, or otherwise entitle any person the right to acquire, shares of common stock, other than with respect to an Exempt Issuance (as defined in the Debenture), at an effective price per share that is lower than the then Conversion Price.

In connection with the Peak One 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 February 2023 Purchase Agreement and issued 50,000 shares ( 2,500 shares as adjusted for the May Stock Split) of its common stock (the “Commitment Shares”) to Peak One Investments, LLC (“Peak One Investments”), the general partner of Peak One .

The Debenture matured twelve months from its date of issuance and bore interest at a rate of 8 % per annum payable on the maturity date.

The Debenture was convertible, at the option of the holder, at any time, into such number of shares of common stock of the Company equal to the principal amount of the Debenture plus all accrued and unpaid interest at a conversion price equal to $ 1.50 (the “Conversion Price”) ($ 30 as adjusted for the May Stock Split), subject to adjustment for any stock splits, stock dividends, recapitalizations and similar events and in the event the Company, at any time while the Debenture is outstanding, issues, sells or grants any option to purchase, or sells or grants any right to reprice, or otherwise disposes of, or issues common stock or other securities convertible into, exercisable for, or otherwise entitle any person the right to acquire, shares of common stock, other than with respect to an Exempt Issuance (as defined in the Debenture), at an effective price per share that is lower than the then Conversion Price.

In the event of any such anti-dilutive event, the Conversion Price will be reduced at the option of the holder to such lower effective price of the dilutive event, subject to a floor price of $ 0.40 ($ 8 as adjusted for the May Stock Split), per share, unless and until the Company obtains shareholder approval for any issuance below such floor price.

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

So long as the Debenture is outstanding, upon any issuance by the Company of any security with any term more favorable to the holder of such security or with a term in favor of the holder of such security that was not similarly provided to the holder of the Debenture, then the Company shall notify the holder of such additional or more favorable term and such term, at holder’s option, will become a part of the transaction documents with the holder.

In no event will the holder be entitled to convert any portion of the Debenture in excess of that portion which would result in beneficial ownership by the holder and its affiliates of more than 4.99 % of the outstanding shares of common stock, unless the holder delivers to the Company written notice at least sixty-one ( 61 ) days prior to the effective date of such notice that the provision be adjusted to 9.99 %.

While the Debenture is outstanding, if the Company receives cash proceeds of more than $ 1,000,000 (“Minimum Threshold”) in the aggregate from any source or series of related or unrelated sources, the Company shall, within two ( 2 ) business days of Company’s receipt of such proceeds, inform the holder of such receipt, following which the holder shall have the right in its sole discretion to require the Company to immediately apply up to 50 % of all proceeds received by the Company (from any source except with respect to proceeds from the issuance of equity or debt to officers and directors of the Company) after the Minimum Threshold is reached to repay the outstanding amounts owed under the Debenture.

Upon the occurrence of certain events of default specified in the Debenture, such as a failure to honor a conversion request, failure to maintain the Company’s listing, the Company’s failure to comply with its obligations under Securities Exchange Act of 1934 , as amended (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.

During the year ended

December 31, 2023 and during the six months ended June 30, 2024 , Peak One

converted the Debenture in full and received a total of 49,188 shares of

the Company’s common stock.

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

Notes Payable (continued)

2 unchanged sentences

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 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 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 February 2023 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.

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 .

On November 30, 2023, SG DevCorp entered into a Securities Purchase Agreement (the “November 2023 Purchase Agreement”) with Peak One , pursuant to which SG DevCorp agreed to issue, in a private placement offering (the “November SGD Offering”) upon the satisfaction of certain conditions specified in the November 2023 Securities 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, and SG DevCorp issued an 8 % convertible debenture in principal amount of $ 700,000 (the “Peak One Debenture”) to Peak One and a warrant (the “SGD Warrant # 1 ”) to purchase up to 350,000 shares of SG DevCorp’s common stock to Peak One ’s designee as described in the November 2023 Purchase Agreement.

The Peak One Debenture was sold to Peak One for a purchase price of $ 630,000 , representing an original issue discount of ten percent ( 10 %).

In connection with the November Offering, v 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 November 2023 Purchase Agreement and issued to Peak One and its designee an aggregate total of 100,000 shares of its common stock as described in the November 2023 Purchase Agreement.

Under the November 2023 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 November 2023 Purchase Agreement at any time after January 29, 2024, upon which SG DevCorp would issue and sell to Peak One on the same terms and conditions a second 8 % convertible debenture in the principal amount of $ 500,000.00 for a purchase price of $ 450,000 , representing an original issue discount of 10 %.

On February 15, 2024, SG DevCorp, entered into an amendment (the “Amendment”) to the November 2023 Securities Purchase Agreement.

The Amendment provides that the second tranche be separated into two tranches (the second and third tranche) wherein which SG DevCorp 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 DevCorp will issue (i) 35,000 shares of SG DevCorp’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 DevCorp issued an 8 % convertible debenture in the principal amount of $ 250,000 (the “Second Debenture”) to Peak One and a warrant (the “SGD Warran #2t”) to purchase up to 125,000 shares of SG DevCorp’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 DevCorp 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 DevCorp’s common stock as described in the Amendment.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes Payable (continued)

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 DevCorp 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 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 Second Debenture is outstanding, if SG DevCorp receives cash proceeds of more than $ 1,500,000.00 ( the “November 2023 SPA Minimum Threshold”) in the aggregate from any source or series of related or unrelated sources, SG DevCorp shall, within two business days of SG DevCorp’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 DevCorp to immediately apply up to 50 % of all proceeds received by SG DevCorp (from any source except with respect to proceeds from the issuance of equity or debt to officers and directors of SG DevCorp) after the November 2023 SPA 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 DevCorp from entering into a Variable Rate Transaction (as defined in the Second Debenture) until the Second Debenture is paid in full.

The SGD Warrant # 2 expires five years from its date of issuance.

The SGD Warrant # 2 is exercisable, at the option of the holder, at any time, for up to 125,000 shares of common stock of SG DevCorp 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 SGD Warrant # 2 .

The SGD Warrant # 2 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 DevCorp and satisfaction of the closing conditions set forth in the November 2023 Purchase Agreement at any time after April 16, 2024.

Maxim acted as placement agent in connection with the November Offering.

In connection with the closing of the second tranche, SG DevCorp 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 DevCorp to Maxim upon closing of the third tranche.

On January 11, 2024, the Company entered into a Securities Purchase Agreement (the “January 2024 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 2024 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 $ 650,000 (the “Holdings Debenture”) to Peak One and a warrant (the “Peak Warrant #3”) to purchase up to 375,000 shares of the Company’s common stock ( 18,750 as adjusted for the May Stock Split) to Peak One ’s designee, as described in the January 2024 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 January 2024 Purchase Agreement and issued to Peak One and its designee an aggregate of 300,000 shares of its common stock 15,000 as adjusted for the May Stock Split) as provided in the January 2024 Purchase Agreement.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes Payable (continued)

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 Holdings 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 (the “January 2024 SPA 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 January 2024 SPA Minimum Threshold is reached to repay the outstanding amounts owed under the Debenture.

The Peak Warrant # 3 expires five years from its date of issuance.

The Peak Warrant # 3 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 ($ 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 Peak Warrant # 3 .

The Peak Warrant # 3 provides for cashless exercise under certain circumstances.

Maxim Group LLC (“Maxim”) acted as placement agent in the January Offering.

In connection with the closing of the first tranche of the January 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 January Offering.

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 .

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 April 2024 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 common stock as commitment shares.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes Payable (continued)

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.

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.

Cash Advance Agreements

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

Cedar is expected to withdraw $ 25,375 a week directly from SG Building until the $ 710,500 due to Cedar is paid in full.

1 unchanged sentence

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 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 .

As of June 30, 2024 and December 31, 2023, there was no outstanding balance on this advance.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes Payable (continued)

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

Cedar is expected to withdraw $ 41,800 a week directly from SG Building, until the $ 1,171,500 due to Cedar is paid in full.

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

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

As of 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”).

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

As of June 30, 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 (the “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 until the $ 511,200 due to Cedar under the Third Cash Advance Agreement is paid in full.

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

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

As of June 30, 2024 and December 31, 2023, the outstanding balance was $ 0 and $ 302,817 on this advance, respectively.

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

Pursuant to the January Cash Advance Agreement, Maison is expected to withdraw $ 12,500 a week directly from the Merchants until the $ 300,000 due to Maison under the January Cash Advance Agreement is paid in full.

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’s 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 29, 2024, SG Building entered into a Cash Advance Agreement (the “Fourth Cash Advance Agreement” and, together with the Cash Advance Agreement, the Second Cash Advance Agreement and the Third Cash Advance Agreement, the “Cedar Cash Advance Agreements”) with Cedar pursuant to which SG Building 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 Fourth Cash Advance Agreement, Cedar is expected to withdraw $ 49,150 a week directly from SG Building until the $ 1,733,420 due to Cedar under the Fourth Cash Advance Agreement is paid in full.

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

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

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 until the $ 224,850 due to Bridgecap under the February Cash Advance Agreement is paid in full.

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.

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

Notes Payable (continued)

SouthStar Secured Note

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

1 unchanged sentence

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.

Upon the occurrence of an Event of Default (as defined in the Secured Note), the default interest rate will be 28 % per annum, or the maximum legal amount provided by law, whichever is greater.

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.

3 unchanged sentences

In the event of an Overadvance, SG Echo will pay SouthStar an amount equal to three and 90 / 100 percent ( 3.90 %) of the amount of the Overadvance for the first twenty-five ( 25 ) day period after the Overadvance is transmitted to SouthStar plus two and 50 / 100 percent ( 2.50 %) for each additional fifteen ( 15 ) day period or part thereof until payments received by SouthStar in collected funds equals the amount of the Overadvance, plus all charges due SouthStar from SG Echo at the time.

The Factoring Agreement provides that SG Echo will also pay a transactional administrative fee of $ 50.00 for each new account debtor submitted to it and an fee equal to 0.25 % of the face amount of all purchased accounts receivable for the handling, collecting, mailing, quality assuring, insuring the risk, transmitting, and performing certain data processing services with respect to the maintenance and servicing of the purchased accounts.

The Factoring Agreement provides that SG Echo will also pay a transactional administrative fee of $ 50.00 for each new account debtor submitted to it and a fee equal to 0.25 % of the face amount of all purchased accounts receivable for the handling, collecting, mailing, quality assuring, insuring the risk, transmitting, and performing certain data processing services with respect to the maintenance and servicing of the purchased accounts.

As security for the payment and performance of SG Echo’s present and future obligations to SouthStar under the Factoring Agreement, SG Echo granted to SouthStar a first priority security interest in all of SG Echo’s presently-owned and hereafter-acquired personal and fixture property, wherever located, including, without limitation, all accounts, goods, chattel paper, inventory, equipment, instruments, investment property, documents, deposit accounts, commercial tort claims, letters-of-credit rights, general intangibles including payment intangibles, patents, software trademarks, trade names, customer lists, supporting obligations, all proceeds and products of the foregoing.

2 unchanged sentences

SG Echo shall be required to provide the same not less than sixty ( 60 ) but not more than ninety ( 90 ) days notice during any and all renewal terms in order to terminate the Factoring Agreement, and if no notice is provided, the renewal term will extend for an additional thirty-six ( 36 ) month period.

If SouthStar has not purchased accounts receivable in a quarterly period during any initial or renewal term which exceed fifty percent ( 50 %) of the Facility Amount per calendar quarter, in which $ 250,000 of the purchased accounts each month must be with ATCO Structures & Logistics (USA) Inc.

(“Minimum Amount”), the Factoring Agreement provides that SG Echo will pay to SouthStar, on demand, an additional amount equal to what the charges provided for elsewhere in the Factoring Agreement would have been on the Minimum Amount assuming the number of days from the date of purchase of the Minimum Amount until receipt of payment of the Minimum Amount is thirty one ( 31 ) days, less the actual charges paid by SG Echo to SouthStar during such period.

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

Notes Payable (continued)

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, 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).

Pursuant to a Cross-Default and Cross Collateralization 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.

BCV Loan Agreement

On June 23 2023, SG DevCorp, entered into a Loan Agreement (the “BCV Loan Agreement”) with a Luxembourg-based specialized investment fund, BCV S&G DevCorp (“BCV S&G”), for up to $ 2,000,000 in proceeds, of which it originally received $ 1,250,000 .

The Loan Agreement provides that the loan provided thereunder will bear interest at 14 % per annum and mature on December 1, 2024 .

The BCV Loan Agreement provides that the loan provided thereunder will bear interest at 14 % per annum and mature on December 1, 2024 .

The loan may be repaid by SG DevCo at any anytime following the twelve -month anniversary of its issue date.

The loan is secured by 1,999,999 of our shares of SG DevCorp’s common stock (the “Pledged Shares”), which were pledged pursuant to an escrow agreement (the “Escrow Agreement”) with SG DevCorp’s transfer agent, and which represent 19.99 % of SG DevCorp’s outstanding shares.

The loan is secured by 1,999,999 of our shares of SG DevCorp’s common stock (the “Pledged Shares”), which were pledged pursuant to an escrow agreement with SG DevCorp’s transfer agent, and which represent 19.99 % of SG DevCorp’s outstanding shares.

The fees associated with the issuance include $ 70,000 paid to BCV S&G for the creation of the BCV Loan Agreement and $ 27,500 payable to BCV S&G per annum for maintaining the BCV Loan Agreement.

1 unchanged sentence

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

As of 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.

The Company has paid $ 35,000 in debt issuance costs.

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

The BCV Loan Agreement, as amended on August 25, 2023 and further amended on September 11, 2023, provided that if SG DevCorp’s shares of common stock were not listed on The Nasdaq Stock Market on before September 30, 2023 or if following such listing the total market value of the Pledged Shares falls below twice the face value of the loan, the loan would be further secured by SG DevCorp’s St.

Mary’s industrial site, consisting of 29.66 acres and a proposed manufacturing facility in St.

Mary’s, Georgia.

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

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

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

According to Amendment No.

1 , if SG DevCorp’s shares of common stock were not listed on The Nasdaq Stock Market before September 15, 2023 or if following such listing the total market value of the Pledged Shares falls below twice the face value of the loan, the loan will be further secured by a security interest in the St.

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

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

According to Amendment No.

2 , if SG DevCorp’s shares of common stock were not listed on The Nasdaq Stock Market before September 30, 2023 or if following such listing the total market value of the Pledged Shares falls below twice the face value of the loan, the loan will be further secured by a security interest in the St.

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

Galvin Promissory Note

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”).

3 unchanged sentences

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 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 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.

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:

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.

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.

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.

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.

Leighton Line of Credit

On March 1, 2024, SG DevCorp entered into a credit agreement with the Bryan Leighton Revocable Trust Dated December 13 th, 2023 (“ Leighton ”) pursuant to which Leighton 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.

At any time prior to the maturity date, upon mutual written consent of the Company and Leighton, 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.

On the first day of each month, SG DevCorp will pay to Leighton 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 .

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

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

As of June 30, 2024, SG DevCorp drew down $ 250,000 from the Line of Credit.

1800 Diagonal Note

On March 5, 2024, the Company issued a promissory note (the " 1800 Diagonal Note”) in favor of 1800 Diagonal Lending LLC (“ 1 800 Diagonal ”) in the aggregate principal amount of $ 149,500 pursuant to a Securities Purchase Agreement, dated March 5, 2024 (the “SPA”).

The 1800 Diagonal Note was purchased by 1800 Diagonal 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 .

Under the terms of the 1800 Diagonal 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”).

Any amount of principal or interest on this 1800 Diagonal Note which is not paid when due will bear interest at the rate of 22 % per annum from the due date thereof until the same is paid (“Default Interest”).

The Company has right to accelerate payments or prepay in full at any time with no prepayment penalty.

Among other things, an event of default will be deemed to have occurred if the Company fails to pay the principal or interest when due on the 1800 Diagonal 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 1800 Diagonal 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 1800 Diagonal Note, an amount equal to 200 % times the sum of the then outstanding principal amount of the 1800 Diagonal Note plus accrued and unpaid interest on the unpaid principal amount of this 1800 Diagonal 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 1800 Diagonal Note, 1800 Diagonal will have the right, to convert all or any part of the outstanding and unpaid amount of the 1800 Diagonal 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 1800 Diagonal Note may not be converted into shares of the Company’s common stock if the conversion would result in 1800 Diagonal 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 1800 Diagonal 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.

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

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

As of June 30, 2024 and December 31, 2023 , long term notes payable consisted of the following:

2 nd Lien Note

Authority Loan Agreement

Peak One Debenture

Second Debenture

Third Debenture

Holdings Debenture

1800 Diagonal Note

First 2024 Debenture

Second 2024 Debenture

Cedar Cash Advance Agreements

January Cash Advance Agreement

February Cash Advance Agreement

G alvin Note Payable

BCV Loan Agreement

Leighton Line of Credit

1800 Diagonal Note

Galvin Note Payable

Debt discount and debt issuance costs

3 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

Business Combination

Business Combination and Acquisition of Assets

Majestic World Holdings

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

15 unchanged sentences

Accounts payable and accrued expenses

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

As of June 30, 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.

2 unchanged sentences

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.

Below is a proforma condensed consolidated statement of operations for the six months ended June 30, 2024 , as if the Company purchased Majestic as of January 1, 2024.

A proforma condensed consolidated statement of operations for the six months ended June 30, 2024 , is not presented because during that period there was no activity in Majestic.

June 30, 2024

Operating expenses:

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Interest Expense

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

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

MyVONIA, an advanced artificial intelligence 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.

On June 6, 2024, the Company completed the acquisition of all of the assets related to MyVONIA pursuant to the APA.

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

Of such shares, 200,000 shares of common stock were issued at the closing on June 6, 2024, with an additional 300,000 shares of common stock issuable upon the achievement of certain benchmarks.

The purchase of MyVONIA was determined to be an acquisition of assets, of which intangible assets were acquired.

The fair value of the purchase amounted to $ 228,360 which resulted from the 200,000 shares of common stock issued, and the estimated value of the contingent shares to be issued.

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

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

March 31, 2024

Operating Leases

Right-of-use assets, net

Current liabilities

Lease liability, current maturities

Non-current liabilities

Lease liability, net of current maturities

Total operating lease liabilities

June 30, 2024

Finance Leases

6 unchanged sentences

Weighted Average Remaining Lease Term

Operating leases

Finance leases

Weighted Average Discount Rate

Operating leases

Finance leases

6 unchanged sentences

Present value of lease liabilities

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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 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.

At June 30, 2024 , there were options, restricted stock units and warrants of 1,822 , 14,887 and 4,023,411 , respectively, outstanding that could potentially dilute future net income per share .

Because the Company had a net loss as of June 30, 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 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.

At June 30, 2023 , there were no restricted stock units and options and warrants of 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 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:

The following represents the backlog of signed construction and engineering contracts in existence at June 30, 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 June 30, 2024 and December 31, 2023 , respectively, on which work has not yet begun:

Balance - beginning of period

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Balance - end of 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:

The Company’s remaining backlog as of June 30, 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 June 30, 2024 over the following period:

Within 1 year

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Notes to Condensed Consolidated Financial Statements

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

Stockholders’ Equity

18 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

Stockholders’ Equity (continued)

In connection with the EP Agreement, the Company issued to Investments, the general partner of Peak One , 75,000 shares of its common stock, and agreed to file a registration statement registering the common stock issued or issuable to Peak One and Investments under the Agreement for resale with the Securities and Exchange Commission within 60 calendar days of the Agreement, as more specifically set forth in the Rights Agreement.

In connection with the EP Agreement, the Company issued to Peak O ne Investments, 75,000 shares of its common stock, and agreed to file a registration statement registering the common stock issued or issuable to Peak One and Peak One Investments under the Agreement for resale with the Securities and Exchange Commission within 60 calendar days of the Agreement, as more specifically set forth in the Rights Agreement.

The registration statement was declared effective on April 14, 2023

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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.

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.

During the six months ended June 30, 2023, the Company issued 13,355 shares of common stock under the EP Agreement for $ 28,867 .

Issuance of common stock and warrants for debt issuance – During the six months ended June 30, 2024 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.

Restricted Stock Units – During the six months ended June 30, 2024 the Company issued 38,934 shares of common stock with a value of $ 527,336 for vested restricted stock units.

Conversion – During the six months ended June 30, 2024 Peak One converted $ 802,067 of its principal balance and accrued interest into 154,155 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.

Warrant exercise – During the six months ended June 30, 2024 11,389 shares of common stock were issued resulting from cashless warrant exercises.

Settlement of accounts payable – During the six months ended June 30, 2024, 129,603 shares of common stock were issued resulting from the settlement of accounts payable in the amount of $ 489,268 .

Noncontrolling interest – During the six months ended June 30, 2024 SG DevCorp recorded $ 5,166,849 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 Three Months Ended March 31, 2024 and 2023 (Unaudited)

Stockholders’ Equity (continued)

13 unchanged sentences

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.

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.

May 2024 Private Placement - 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.”

SAFE & GREEN HOLDINGS CORP.

Notes to Condensed Consolidated

Financial Statements

Stockholders’ Equity (continued)

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.

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 net proceeds from the Private Placement of $ 3,590,386 .

Additionally, during the six months ended June 30, 2023, 279,310 prefunded warrants were exercised.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Segments and Disaggregated Revenue

Corporate and support

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

Cost of revenue

9 unchanged sentences

Corporate and support

Three Months Ended March 31, 2023

Six Months Ended June 30, 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 Three Months Ended March 31, 2024 and 2023 (Unaudited)

Segments and Disaggregated Revenue (continued)

Corporate and support

Three Months Ended June 30, 2024

Cost of revenue

Operating expenses

Operating income (loss)

Other income (expense)

Income (loss) before income taxes

Common stock deemed dividend

Net income attributable to non-controlling interest

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

( 1,279,716 )

Depreciation and amortization

Capital expenditures

Corporate and support

Three Months Ended June 30, 2023

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

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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 ( 216 shares as adjusted for the May Stock Split), at an exercise price of $ 125.00 per share ($ 2,500.00 as adjusted for the May Stock Split),.

15 unchanged sentences

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 conjunction with the issuance of the Debenture in February 2023, the Company issued the Peak Warrant to purchase 500,000 shares of the Company's 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 (as defined in the Debenture), 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.

3 unchanged sentences

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:

In connection with the issuance of the Holdings Debenture in January 2024, the Company issued the “Peak Warrant” # 3 to purchase up to 375,000 shares of the Company’s common stock ( 18,750 as adjusted for the May Stock Split) to Peak One ’s designee, as described in the January 2024 Purchase Agreement.

The PeakWarrant # 3 expires five years from its date of issuance.

The Peak Warrant # 3 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 Peak Warrant # 3 .

The Peak Warrant # 3 provides for cashless exercise under certain circumstances.

The initial fair value of the Peak Warrant # 3 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.

In connection with the Private Placement in May 2024, the Company issued common warrants (the “Common Warrants”) to purchase up to 2,758,620 shares of the Company’s common stock .

The Common Warrants are exercisable immediately following the date of issuance, have a term of five years from the effective date of the corresponding registration statement registering the shares of Company common stock and the shares of Company common stock issuable upon exercise of the Common Warrants and have an exercise price of $ 2.65 per share.

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 Common Warrants will be entitled to receive, upon exercise of the Common Warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised the Common Warrants immediately prior to such transaction.

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.

Warrant activity for the six months ended June 30, 2024 are summarized as follows:

Number of Warrants

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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

Outstanding and exercisable - June 30, 2024

The fair value of warrants granted during the six months ended June 30, 2024 were valued using a Black-Scholes Value model, with the following assumptions

Risk-free interest rate

2 unchanged sentences

Expected volatility

SAFE & GREEN HOLDINGS CORP.

Notes to Condensed Consolidated

Financial Statements

Share-based Compensation

1 unchanged sentence

Effective January 30, 2017, the 2016 Stock Plan was amended and restated as the SG Blocks, Inc .

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

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

The Incentive Plan authorizes the issuance of up to 8,625,000 shares of common stock ( 431,250 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 March 31, 2024 , there were 4,892,146 shares of common stock available for issuance under the Incentive Plan .

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Share-based Compensation (continued)

As of June 30, 2024 , there were — shares of common stock available for issuance under the Incentive Plan .

Stock-Based Compensation Expense

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

Three Months Ended

Six Months Ended

Payroll and related expenses

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

Three Months Ended

Stock options

Restricted Stock Units

Payroll and related expenses

SAFE & GREEN HOLDINGS CORP.

Notes to Condensed Consolidated

Financial Statements

Share-based Compensation (continued)

Stock-Based Option Awards

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

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

The simplified method is calculated by averaging the vesting period and contractual term of the options.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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 three months ended March 31, 2024 as described below:

The following table summarizes stock-based option activities and changes during the six months ended June 30, 2024 as described below:

Weighted Average Fair Value Per Share

3 unchanged sentences

Outstanding – December 31, 2023

Outstanding – March 31, 2024

Outstanding – June 30, 2024

Exercisable – December 31, 2023

Exercisable – March 31, 2024

Exercisable – June 30, 2024

Restricted Stock Units

10 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

Share-based Compensation (continued)

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.

For the three months ended June 30, 2024 and 2023 , the Company recognized stock-based compensation of $ 348,308 and $ 2,554,262 related to restricted stock units.

For the six months ended June 30, 2024 and 2023 , the Company recognized stock-based compensation of $ 527,336 and $ 3,210,631 , respectively, 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 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 :

As of June 30, 2024 , there was 131,599 unrecognized compensation costs related to non-vested restricted stock units.

The following table summarized restricted stock unit activities during the six months ended June 30, 2024 :

Number of Shares

1 unchanged sentence

Forfeited/Expired

Non-vested balance at March 31, 2024

Non-vested balance at June 30, 2024

Commitm ents and Contingencies

Legal Proceedings

The Company is subject to certain claims and lawsuits arising in the normal course of business.

The Compa ny is subject to certain claims and lawsuits arising in the normal course of business.

The Company assesses liabilities and contingencies in connection with outstanding legal proceedings utilizing the latest information available.

3 unchanged sentences

Based on information currently available, advice of counsel, and available insurance coverage, the Company believes that the established accruals are adequate and the liabilities arising from the legal proceedings will not have a material adverse effect on the consolidated financial condition.

However, that in light of the inherent uncertainty in legal proceedings there can be no assurance that the ultimate resolution of a matter will not exceed established accruals.

However, in light of the inherent uncertainty in legal proceedings, there can be no assurance that the ultimate resolution of a matter will not exceed established accruals.

As a result, the outcome of a particular matter or a combination of matters may be material to the results of operations for a particular period, depending upon the size of the loss or the income for that particular period.

1 .) Pizzarotti Litigation - On or about August 10, 2018 Pizzarotti, LLC filed a complaint against the Company and Mahesh Shetty, the Company’s former President and CFO, and others, seeking unspecified damages for an alleged breach of contract by the Company and another entity named Phipps & Co.

1 .) Pizzarotti Litigation - On or about August 10, 2018, Pizzarotti, LLC (“Pizzarotti”) filed a complaint against the Company and Mahesh Shetty, the Company’s former President and CFO, and others, seeking unspecified damages for an alleged breach of contract by the Company and another entity named Phipps & Co.

The lawsuit was filed as Pizzarotti, LLC.

5 unchanged sentences

Pizzarotti’s suit arose from a contract dated April 3, 2018 that it executed with Phipps whereby Pizzarotti, a construction manager, engaged Phipps to perform stone procuring and tile work at a construction project located at 161 Maiden Lane, New York 10038 .

Pizzarotti’s claims against the Company arise from a purported assignment agreement dated August 10, 2018, whereby Pizzarotti claims that the Company agreed to assume certain obligations of Phipps under a certain trade contract between Pizzarotti and Phipps & Co.

Phipps’ claims against the Company arise from a purported Assignment Agreement, dated as of May 30, 2018, between Pizzarotti, Phipps and the Company (the “Assignment Agreement”), pursuant to which, it is alleged, that the Company agreed to provide a letter of credit in connection with the sub-contracted work to be provided by Phipps to Pizzarotti.

Phipps’ claims against the Company arise from a purported assignment agreement, dated as of May 30, 2018, among Pizzarotti, Phipps and the Company (the “Assignment Agreement”), pursuant to which, it is alleged, that the Company agreed to provide a letter of credit in connection with the sub-contrac ted work to be provided by Phipps to Pizzarotti.

SAFE & GREEN HOLDINGS CORP.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

Commitm ents and Contingencies (continued)

The Company believes that the Assignment Agreement was void for lack of consideration and moved to dismiss the case on those and other grounds.

On June 17, 2020, the New York Supreme Court entered an order dismissing certain claims against the Company brought by cross claimant Phipps & Co.

On June 17, 2020, the New York Supreme Court entered an order dismissing certain claims against the Company brought by cross claimant Phipps.

Specifically, the court dismissed Phipps’ claims for indemnification, contribution, fraud, negligence and negligent misrepresentation.

16 unchanged sentences

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.

As of June 30,2024, the Company cannot estimate any potential loss.

2 .) CPF GP 2019 - 1 , LLC (“CPF GP”) 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.

The case settled in February 2024 in exchange for mutual dismissals and monthly payments of the balance due, which is $ 745,000 in total 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.

The Company is currently unable to predict the possible loss or range of loss, if any, associated with the resolution of this litigation, and, accordingly, the Company has made no provision related to this matter in the consolidated financial statements.

(“Farnam”) filed suit against the Company in the United States District Court for the District of Minnesota (Case No.

23 -CV- 3212 ) alleging breaches by the Company under a certain lease agreement between Farnam and the Company dated as of October 13, 221.

Farnam sought monies owed under such lease agreement.

On August 1, 2024, the Company, SG Echo and SG Environmental Solutions Corp.

(“SG Environmental”), a wholly owned subsidiary of the Company, entered into a settlement agreement (the “Settlement”) with Farnam to resolve the pending litigation.

Simultaneously with the execution of the Settlement, (i) the Company, SG Environmental and Farnam entered into an assignment and assumption agreement, pursuant to which SG Environmental was substituted for the Company as the lessee under the lease agreement, and (ii) SG Environmental and Farnam executed a new Lease Schedule No.

001 R (“Schedule 1 R”), which replaced the prior schedule in its entirety.

The terms of the Settlement included the following:

(i) SG Environmental will be the signatory under the “Lessee” under the lease;

(ii) the initial term (the “Initial Term”) of Schedule 1 R is 18 months;

(iii) the “Commencement Date” of Schedule 1 R is August 1, 2024;

(iv) the original cost of the equipment subject to Schedule 1 R is $ 1,556,163.00 ;

(v) so long as there has been no default under the lease and Schedule 1 R, SG Environmental shall have the option to purchase the equipment at the end of the Initial Term for thirty-five percent ( 35 %) of the original cost of the equipment, or $ 544,657.05 , plus applicable taxes;

(vi) the “Monthly Lease Charge” under Schedule 1 R is $ 65,880.95 , plus applicable taxes;

and (vii) SG Environmental shall provide a new security deposit under Schedule 1 R in the amount of $ 167,056.00 , which shall be paid on or before August 1, 2024.

Simultaneously with the execution of the Settlement, the Company and SG Echo executed a guaranty, whereby each of the Company and SG Echo jointly and severally guarantee SG Environmental’s full and prompt payment and performance under the lease and Schedule 1 R.

Per the Settlement, Farnam shall retain as income all prior payments from the Company (or any Company affiliate) under the lease, the prior schedule, or any other agreement with the Company or its affiliates, including all monthly lease charges, interim rent, taxes, interest, fees, late charges, and any security deposits, including the deposit under the prior schedule.

Under the terms of the Settlement, Farnam and the Company each agree to waive and release any and all claims against the other, except with respect to each party’s performance under the Settlement and each party’s future obligations under the lease, Schedule 1 R and guaranty agreements.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Commitm ents and Contingencies (continued)

Vendor Litigation

3 unchanged sentences

(the “Company”) filed a Complaint against HOLA Community Partners (“HCP”), Heart of Los Angeles Youth, Inc.

(“HOLA”) (HCP and HOLA are collectively referred to as the “HOLA Defendants”), and the City of Los Angeles (“City”) in the United States District Court for the Central District of California, Case No.

(“HOLA” and together with HCP, the “HOLA Defendants”), and the City of Los Angeles (“City”) in the United States District Court for the Central District of California, Case No.

20 -cv- 03432 -ODW (“HOLA Action”).

The Company asserted seven claims against HOLA Defendants arising out of and related to the HOLA Project, to wit, for:

The Company asserted seven claims against HOLA Defendants arising out of and related to the Heart of Los Angeles construction project in Los Angeles (the “HOLA Project”), to wit, for:

( 1 ) breach of contract;

( 2 ) conversion;

( 3 ) default and judicial foreclosure under the Agreement as a security agreement;

( 3 ) default and judicial foreclosure under the original agreement between the Company and HOLA (“Agreement”) as a security agreement;

( 4 ) misappropriation of trade secrets under California Civil Code section 3426 ;

19 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

Commitments and Contingencies (continued)

41 unchanged sentences

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.

2 unchanged sentences

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.

claims that EDI International, PC, tortiously interfered with SG Blocks, Inc’s economic relationship with HCP and HOLA.

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, filed a cross-complaint for alleged unpaid fees and tortious interference with EDI International, PC’s contractual relationship with HCP and HOLA.

EDI International, PC’s cross-complaint seeks in excess of $ 30,428.71 in damages.

2 unchanged sentences

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.

On SG Blocks, Inc.’s remaining claims, trial is set for October 2024.

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.

1 unchanged sentence

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

(i) On January 1, 2019, the Company commenced an action against Teton Buildings, LLC (“Teton”) in Harris County, Texas (“Teton Texas Action”) to recover approximately $ 2,100,000 arising from defendant’s breach of the operative contract related to Heart of Los Angeles construction project in Los Angeles (the “HOLA Project”) entered into on or about June 2, 2017.

(i) On January 1, 2019, the Company commenced an action against Teton Buildings, LLC (“Teton”) in Harris County, Texas (“Teton Texas Action”) to recover approximately $ 2,100,000 arising from defendant’s breach of the operative contract related to the HOLA Project entered into on or about June 2, 2017.

The Petition brought claims of breach of contract, negligence, and breach of express warranty.

27 unchanged sentences

Notes to Condensed Consolidated Financial Statements

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

Commitments and Contingencies (continued)

8 unchanged sentences

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.

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.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.

14 unchanged sentences

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.

On December 14, 2023, the Company and Mr.

Galvin entered into the Galvin Note Payable and an additional note payable during the three and six months ended June 30, 2024 .

See Note 9 – Notes Payable.

Subsequent Events

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.

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.

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 %).

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 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.

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

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)

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 %).

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 %).

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”).

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)

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.

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 ).

On July 31, 2024, SG Building entered into a Cash Advance Agreement (the “Fifth Cedar Cash Advance Agreement”) with Cedar, pursuant to which SG Building sold to Cedar $ 1,957,150 of its future receivables for a purchase price of $ 1,350,000 , less underwriting fees and expenses paid and the repayment of prior amounts due to Cedar, for net proceeds to SG Building of $ 285,180 .

Cedar is expected to withdraw $ 49,150 a week directly from SG Building until the $ 1,957,150 due to Cedar is paid in full.

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

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

Subsequent to June 30, 2024 , the Company issued 82,645 shares of common stock from the settlement of accounts payable and 197,125 shares of common stock from the issuance of vested restricted stock units.

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