What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-27 compared with 2024-08-14 · 402 added, 416 removed, 947 unchanged (46% of the section changed)

3 unchanged sentences

Condensed Consolidated Balance Sheets

September 30,

December 31, 2023

Current assets:

2 unchanged sentences

Contract assets

Held for sale assets

Prepaid expenses and other current assets

Current assets of discontinued operations

Total current assets

5 unchanged sentences

Investment in and advances to equity affiliates

Long-term assets of discontinued operations

Liabilities and Stockholders’ Equity

3 unchanged sentences

Lease liability, current maturities

Due to affiliates

Short-term notes payable, net

Current liabilities of discontinued operations

Total current liabilities

Long-term note payable

Contingent consideration liability

Long-term notes payable, net

Lease liability, net of current maturities

4 unchanged sentences

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

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

2,258,103 issued and outstanding as of September 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 June 30, 2024 and December 31, 2023

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

Accumulated deficit

7 unchanged sentences

Three Months Ended

September 30,

Three Months Ended

Six Months Ended

September 30,

For the Nine Months Ended September 30,

Construction services

Real estate commissions

Cost of revenue:

Construction services

Gross profit (loss)

Gross (loss) profit

Operating expenses:

6 unchanged sentences

Interest income

Loss on disposition of equity-based investment

Change in fair value of equity-based investment

Loss before income taxes

Income tax expense

Common stock deemed dividend

net income (loss) attributable to noncontrolling interests

Common stock deemed dividend – reduction in conversion rate

Common stock deemed dividend – inducement

Loss from continuing operations

Income (loss) from discontinued operations

Net loss attributable to common stockholders

Net loss per share

Basic and diluted

Basic and diluted – continued operations

Basic and diluted – discontinued operations

Weighted average shares outstanding:

7 unchanged sentences

Stockholders’

Balance at March 31, 2024

Balance at June 30, 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

Issuance of stock for accounts payable settlement

Stock-based compensation and issuance of RSU’s

P refunded warrant exercise

S tock compensation expense

SG D evCorp equity transactions

Balance at June 30, 2024

Balance at September 30, 2024

Balance at December 31, 2023

Stock-based compensation and issuance of RSU’s

Common stock deemed dividend – inducement

C ommon stock deemed dividend – reduction in conversion rate

Cashless warrant exercise

Prefunded warrant exercise

Issuance of stock upon inducement

Issuance of common stock and warrants for debt issuance

Common stock deemed dividend

Issuance of common stock from warrant inducement

Conversion of debt and interest

3 unchanged sentences

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.

Deconsolidation of SG DevCorp

Issuance of common stock for cash

Balance at September 30, 2024

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

SAFE & GREEN HOLDINGS CORP.

4 unchanged sentences

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

Distribution of SG DevCorp

Conversion of short-term notes payable

Balance at September 30, 2023

Balance at December 31, 2022

6 unchanged sentences

Treasury stock

Balance at June 30, 2023

The accompanying notes are an integral part of

these condensed consolidated financial statements.

Distribution of SG DevCorp

Conversion of short-term notes payable

Balance at September 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

Six Months Ended

June 30, 2024

Six Months Ended

June 30, 2023

Nine Months Ended

September 30, 2024

Nine Months Ended

September 30, 2023

Cash flows from operating activities:

Income (loss) from discontinued operations

Adjustments to reconcile net loss to net cash used in operating activities:

4 unchanged sentences

Amortization of right of use asset

Gain on deconsolidation – SG DevCorp

Loss on disposition of equity-based investment

Change in fair value of equity-based investment

Common stock issued for services

SG DevCorp equity transactions

Interest income on long-term note receivable

9 unchanged sentences

Assumed liability

Net cash used in operating activities

Net cash used in operating activities by continuing operations

Net cash used in operating activities by discontinued operations

Cash flows from investing activities:

Purchase of property, plant and equipment

Cash from business combination

Cash received from sale of equity-based investment

Project development costs

Investment in and advances to equity affiliates

Net cash used in investing activities

Net cash used in investing activities by continuing operations

Net cash used in investing activities by discontinued operations

Cash flows from financing activities:

Repurchase of common stock

Repayment of short term notes payable

1 unchanged sentence

Proceeds from long-term notes payable

Purchase of treasury stock

Proceeds from warrant inducement

Prefunded warrant exercise

Issuance of common stock

Issuance of common stock for cash

Issuance of common stock under EP Agreement

Distribution paid to non-controlling interest

Net cash provided by financing activities

Net cash provided by financing activities by continuing operations

Net cash provided by financing activities by discontinued operations

Net increase in cash and cash equivalents

1 unchanged sentence

Cash and cash equivalents - end of period

cash and cash equivalents – discontinued operations

Supplemental disclosure of non-cash investing and financing activities:

Assets and liabilities effected in deconsolidation

Assets held for sale

Prepaid expenses and other current assets

Property and equipment, net

Project development costs and other assets

Intangible assets

Investments in equity-based investments

Accounts payable and accrued expenses

Contingent consideration payable

Short-term notes payable

Cashless warrant exercise

Fractional common share adjustment

Common stock deemed dividend

Common stock deemed dividend - inducement

Common stock deemed dividend – reduction in conversion price

Conversion of short-term notes payable to common stock

Prepaid interest for short-term notes payable

Common stock issuance for asset acquisition

Fair value of warrants issued with debt

Common stock issuance for accounts payable settlement

41 unchanged sentences

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

Description of Business (continued)

3 unchanged sentences

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

(“SG Medical”).

The Company also entered into a joint venture with Clarity Lab Solutions LLC., to provide clinical lab testing related to COVID- 19 , which ceased activities in 2022 .

3 unchanged sentences

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

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

As described in Note 2 , the activities of SG DevCorp were deconsolidated and determined to be a discontinued operation.

As such, the activities of SG DevCorp are no longer a part of the Company’s continuing activities.

Environmental

2 unchanged sentences

Reverse Stock Split

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

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

On May 2, 2024, the Company effected a 1-for-20 reverse stock split of its then-outstanding common stock (the “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 Quarterly Report on Form 10-Q for the period ended September 30, 2024 have been adjusted to reflect the reverse stock split effected in May 2024 .

Separation and Distribution

7 unchanged sentences

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

During 2024 , the Company’s ownership in SG DevCorp fell below 50 %, and the Company deconsolidated SG DevCorp from its financial statements (the “Deconsolidation”).

The decrease in ownership percentage resulted from additional equity transactions of SG DevCorp.

As of September 30, 2024, the Company accounts for its investment in SG DevCorp on the equity method.

Upon deconsolidation, the Company recognized a gain of $ 4,728,348 which resulted from the difference between the fair value of the Company’s investment upon deconsolidation, and the net assets and carrying value of the non-controlling interest.

The gain is included in income (loss) from discontinued operations.

The fair value of the Company’s investment in SG DevCorp upon deconsolidation amounted to $ 8,126,350 .

The Deconsolidation represents a strategic shift in the Company’s operations and will have a major effect on the Company’s operations and financial results.

Prior year financial statements for 2023 have been restated to present the operations of SG DevCorp as a discontinued operation.

This transaction is further described in Note 19 and 20 .

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of September 30, 2024 , the Company had cash and cash equivalents of $ 256,957 and a backlog of $ 1,919,313 .

See Note 12 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 $ 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 Company has incurred losses since its inception, has negative working capital of $ 9,519,438 as of September 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 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.

Results for the nine months ended September 30, 2024 are not necessarily indicative of the results that may be expe cted for the year ending December 31, 2024 .

Reclassifications - Certain amounts in the prior periods presented have been reclassified to conform to the current period financial statement presentation.

These reclassifications have no effect on previously reported net loss or cash flows.

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

Accounting estimates – The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgements and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period, together with amounts disclosed in the related notes to the financial statements.

4 unchanged sentences

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

Summary of Significant Accounting Policies (continued)

14 unchanged sentences

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

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

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

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

Disaggregation of Revenues

1 unchanged sentence

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

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 .

Revenue recognized over time was $ 3,932,592 and $ 14,566,351 , respectively, for the nine months ended September 30, 2024 and 2023 .

Revenue recognized over time was $ 1,753,223 and $ 3,965,361 , respectively, for the three months ended September 30, 2024 and 2023 .

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

1 unchanged sentence

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

Summary of Significant Accounting Policies (continued)

Three Months Ended June 30,

Three Months Ended September 30,

Revenue by Customer Type

Construction and Engineering Services:

Hotel/Hospitality

SG DevCorp sales:

Real estate commissions

Total revenue by customer type

Six Months Ended June 30,

Nine Months Ended September 30,

Revenue by Customer Type

1 unchanged sentence

Hotel/Hospitality

SG DevCorp sales:

Real estate commissions

Total revenue by customer type

15 unchanged sentences

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

Summary of Significant Accounting Policies (continued)

21 unchanged sentences

On January 18, 2021, the Company entered into an operating agreement to form CAT.

The purpose of CAT is to market , sell, distribute, lease and otherwise commercially exploit certain products and services in the COVID- 19 testing industry.

The purpose of CAT is to market , sell, distribute, lease and otherwise commercially exploit certain products and services in the COVID- 19 testing and other medical industry.

The Company has determined it is the primary beneficiary of CAT and has thus consolidated the activities in its consolidated financial statements.

Investment Entities – On May 31, 2021, the Company's subsidiary SG DevCorp agreed to contribute $ 600,000 to acquire a 50 % membership interest in Norman Berry II Owner LLC (“Norman Berry”).

The Company contributed $ 350,329 and $ 114,433 of the initial $ 600,000 in the second quarter and third quarter of 2021 , respectively, with the remaining $ 135,238 funded in the fourth quarter of 2021 .

The purpose of Norman Berry II Owner LLC is to develop and provide affordable housing in the Atlanta, Georgia metropolitan area.

The Company has determined it is not the primary beneficiary of "Norman Berry" and thus will not consolidate the activities in its consolidated financial statements.

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

On June 24, 2021, the Company's subsidiary, SG DevCorp, entered into an operating agreement with Jacoby Development for a 10 % non-dilutable equity interest for JDI-Cumberland Inlet, LLC (“Cumberland”).

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

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.

The Company has determined it is not the primary beneficiary of JDI-Cumberland Inlet, LLC and thus will not consolidate the activities in its consolidated financial statements.

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

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 .

Equity Method Investments — The Company accounts for investments under the equity method of accounting if it has the ability to exercise significant influence over the operating and financial policies of an entity, but does not have a controlling financial interest.

The equity method investment is typically initially recorded at cost and adjusted each period for capital contributions, distributions and the Company's share of the entity’s net income or loss as well as other comprehensive income or loss.

Upon the Deconsolidation during 2024 , the Company began to report its investment in SG DevCorp on the equity method.

The Company has elected to measure its investment in SG DevCorp on the fair value method.

Subsequent to the Deconsolidation, the Company disposed a portion of its investment in SG DevCorp and recorded a loss of $ 320,408 .

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

Summary of Significant Accounting Policies (continued)

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

As of September 30, 2024, the Company had a 31 % ownership interest in SG DevCorp .

The approximate combined financial position of the Company’s equity affiliate (SG DevCorp) is summarized below as of September 30, 2024 :

Condensed balance sheet information:

June 30, 2024

December 31, 2023

September 30, 2024

Total liabilities

Members’ equity

Stockholder’s equity/Members’ equity

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 $ 1,016,784 and $ 17,448 as of June 30, 2024 , and December 31, 2023 , respectively.

Cash and cash equivalents totaled $ 256,957 and $ 14,212 as of September 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 June 30, 2024 or December 31, 2023 , respectively.

The Company had no short-term investment as of September 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 June 30, 2024 and December 31, 2023 , there was inventory of $ 223,402 and $ 156,512 , respectively, for construction materials.

As of September 30, 2024 and December 31, 2023 , there was inventory of $ 742,144 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 six months ended June 30, 2024 or 2023 .

There were no impairments during the nine months ended September 30, 2024 or 2023 .

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

Summary of Significant Accounting Policies (continued)

1 unchanged sentence

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.

The amortization expense for the nine months ended September 30, 2024 and 2023 was $ 10,251 and $ 140,437 , respectively.

The accumulated amortization as of September 30, 2024 and December 31, 2023 was $ 59,975 and $ 2,852,929 , respectively.

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

1 unchanged sentence

Estimated useful lives for significant classes of assets are as follows:

computer and software 3 to 5 years, furniture and other equipment 5 to 7 years, automobiles 2 to 5 years, buildings held for lease 5 to 7 years, and equipment 5 t o 29 years.

computer and software 3 to 5 years, furniture and other equipment 5 to 7 years, automobiles 2 to 5 years, buildings held for lease 5 to 7 years, building 40 years, and equipment 5 t o 29 years.

Repairs and maintenance are charged to expense when incurred.

Held For Sale Assets – On May 10, 2021, the Company's subsidiary, SG DevCorp, acquired the Lago Vista, Texas property for $ 3,576,130 .

Management has implemented a plan to sell this property during 2022 , which meets all of the criteria required to classify it as Held for Sale.

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.

6 unchanged sentences

The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Summary of Significant Accounting Policies (continued)

The Company uses three levels of inputs that may be used to measure fair value:

2 unchanged sentences

Inputs that are unobservable (for example, cash flow modeling inputs based on assumptions).

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Summary of Significant Accounting Policies (continued)

Transfer into and transfers out of the hierarchy levels are recognized as if they had taken place at the end of the reporting period.

There have been no changes in Level 1 , Level 2 , and Level 3 and no changes in valuation.

The fair value of the Company’s equity-based investment in SG DevCorp was determined based on Level 1 inputs.

The Company does not have any financial instruments in the Level 2 or Level 3 category.

Fair value measured as of September 30, 2024

Total at September 30, 2024

Quoted prices in active markets

Significant other observable inputs

Significant unobservable inputs

Equity-based investment – SG DevCorp

Share-based payments – The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award.

18 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 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 .

At September 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 one customer represented approximately 84 % and 100 %, respectively, of the Company’s total revenue for the three months ended September 30, 2024 and 2023 , respectively.

Revenue relating to two and one customers represented approximately 75 % and 97 % of the Company’s total revenue for the nine months ended September 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 nine months ended September 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.

1 unchanged sentence

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

Accounts Receivable

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

At September 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 June 30, 2024 and December 31, 2023 :

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

Costs incurred on uncompleted contracts

3 unchanged sentences

billings to date

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 June 30, 2024 and December 31, 2023 .

Net contract liabilities on uncompleted contracts

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

Contract assets

5 unchanged sentences

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (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 June 30, 2024 and December 31, 2023 , the Company’s property, plant and equipment, net consisted of the following:

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

Computer equipment and software

6 unchanged sentences

accumulated depreciation

Property, plant and equipment, net

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.

Depreciation expense for the three months ended September 30, 2024 and 2023 amounted to $ 104,835 and $ 92,984 , respectively.

Depreciation expense for the nine months ended September 30, 2024 and 2023 amounted to $ 189,869 and $ 277,573 respectively.

Notes Receivable

2 unchanged sentences

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.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.

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 ”).

3 unchanged sentences

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

Notes Payable

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.

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

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 (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 “ 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 ( 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%.

The LV Peninsula obligations under the LV Note have been guaranteed by SG DevCorp pursuant to a Guaranty, dated March 30, 2023 (the “Guaranty”), and may be prepaid by LV Peninsula at any time without interest or penalty.

The Company incurred $ 406,825 of debt issuance costs and remitted $ 675,000 in prepaid interest in connection with the LV Note.

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

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 %.

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

2 unchanged sentences

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.

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.

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

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

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

Notes Payable (continued)

9 unchanged sentences

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.

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.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes Payable (continued)

Upon entering into the January 2024 Purchase Agreement as described below the Conversion Price was adjusted to $ 0.46 , and then upon entering into the Inducement Agreement as described below, the Conversion Price was further adjusted to $ 0.26 (“Conversion Adjustments”).

During the year ended December 31, 2023 and during the nine months ended September 30, 2024 , Peak One converted the Debenture in full and received a total of 49,188 shares of the Company’s common stock.

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

2 unchanged sentences

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 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 to Condensed Consolidated Financial Statements (Unaudited)

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.

The Company incurred $ 80,000 in debt issuance costs in connection with the Debenture.

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 .

2 unchanged sentences

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.

Upon entering into the Inducement Agreement as described below, the Conversion Price was adjusted to $ 0.26 .

This transaction, along with the Conversion Adjustments resulted in the Company recording a common stock deemed dividend in the amount of $ 475,713 during the nine months ended September 30, 2024 (“Conversion Deemed Dividend”).

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.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Notes Payable (continued)

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

4 unchanged sentences

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

3 unchanged sentences

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

As of 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)

As of September 30, 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 (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 .

2 unchanged sentences

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.

As of September 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 .

2 unchanged sentences

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.

As of September 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 .

4 unchanged sentences

The amounts outstanding under the January Cash Advance Agreement may be prepaid by the Merchants at any time without penalty.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Notes Payable (continued)

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 .

7 unchanged sentences

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

On July 31, 2024, SG Building entered into a Cash Advance Agreement (the “July 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 Cedar, for net funds provided of $ 285,180 , which are net of repayment of prior Cedar Cash Advance Agreements

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

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

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

On August 27, 2024, SG Building entered into a Cash Advance Agreement (the “Pawn Cash Advance Agreement”) with Pawn Funding (“Pawn”) pursuant to which SG Building sold to Pawn $ 599,600 of its future receivables for a purchase price of $ 400,000 , less underwriting fees and expenses paid and the repayment of prior amounts due Pawn, for net funds provided of $ 360,000 .

Pursuant to the Pawn Cash Advance Agreement, Pawn is expected to withdraw $ 4,999.67 a week directly from SG Building until the $ 599,600 due to Pawn is paid in full.

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

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

Notes Payable (continued)

17 unchanged sentences

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

Notes Payable (continued)

4 unchanged sentences

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 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 with SG DevCorp’s transfer agent, and which represent 19.99 % of SG DevCorp’s outstanding shares.

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

Additionally, $ 37,500 in broker fees has been paid to Bridgeline Capital Partners S.A.

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

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.

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.

Enhanced Note

On September 20, 2024, SG Echo entered into a Loan and Security Agreement (the “Enhanced Loan Agreement”) with Enhanced Capital Oklahoma Rural Fund, LLC (“Enhanced”) pursuant to which SG Echo borrowed $ 4,000,000 (the “Principal”) from Enhanced, and whereby SG Echo executed and delivered a Secured Promissory Note (the “Enhanced Note”) to Enhanced to evidence SG Echo’s obligations under the Enhanced Loan Agreement.

The Enhanced Note shall bear interest at a rate equal to the greater of (i) the Secured Overnight Financing Rate (“SOFR”) plus six and sixty-five tenths percent ( 6.65 %) and (ii) ten percent ( 10.0 %) per annum (the “Interest Rate”).

SG Echo shall pay to Enhanced a closing fee of $ 80,000 , which shall be due and payable on October 1, 2025, unless such date shall be extended by Lender.

SG Echo’s obligations under the Enhanced Loan Agreement and the Enhanced Note have been guaranteed by the Company.

Pursuant to the terms of the Enhanced Note, SG Echo shall make monthly payments of accrued interest on the first business day of each calendar month until December 31, 2025.

Commencing January 2026, SG Echo shall make monthly payments of accrued interest and additionally shall make a monthly principal payment on the Note in an amount equal to $ 22,222.22 .

The maturity date of the Note shall be the sixty -month anniversary of the closing date (the “Enhanced Maturity Date”).

All outstanding principal and accrued interest shall be due and payable on the Enhanced Maturity Date.

Pursuant to the terms of the Enhanced Loan Agreement, on the closing date, $ 360,000 (the “Interest Reserve”) will be deposited in a segregated deposit account in SG Echo’s name, which account shall be subject to a Control Agreement in favor of the Lender (the “Interest Reserve Account”).

The monthly payments due under the Enhanced Note are withdrawn from the Interest Reserve Account until the Interest Reserve has been fully withdrawn.

SG Echo shall have no obligation to replenish amounts withdrawn from the Interest Reserve Account.

Pursuant to the terms of the Enhanced Loan Agreement, SG Echo shall grant Enhanced a first priority mortgage on the real property located at 101 Waldron Rd., Durant, Oklahoma.

Additionally, SG Echo shall grant Lender a continuing security interest in, a general lien upon, collateral assignment of, and a right of set-off against all of SG Echo’s right, title, and interest in and to all assets of SG Echo.

In the event of default (as defined in the Enhanced Loan Agreement), Enhanced, among other remedies, can demand all amounts and/or liabilities owing from time to time by SG Echo to Enhanced pursuant to the Enhanced Loan Agreement and the Enhanced Note (with accrued interest thereon) and all other amounts owing under the Enhanced Loan Agreement due and payable.

As of September, 30, 2024 , the Company paid off the remaining balances of the Secured Note and the Overadvance with the proceeds of the Enhanced Note.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Notes Payable (continued)

Galvin Promissory Note

4 unchanged sentences

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

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes Payable (continued)

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 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 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 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.

During the nine months ended, $ 65,000 in principal payments were made.

1800 Diagonal Note

12 unchanged sentences

Upon the occurrence of an event of default as a result of the Company being delisted from Nasdaq, the Conversion Limitation shall no longer apply.

On August 28, 2024, the Company issued a promissory note (the “August 1800 Diagonal Note”) in favor of 1800 Diagonal in the principal amount of $ 290,000 for a purchase price of $ 250,000 , representing an original issue discount of $ 40,000 .

A one -time interest charge of twelve percent ( 12 %) be applied on the issuance date to the principal balance.

Under the terms of the August 1800 Diagonal Note, beginning on February 28, 2025, the Company is required to make five monthly payments of accrued, unpaid interest and outstanding principal, subject to adjustment, in the amount of $ 40,600 , with $ 162,400 being due on February 28, 2025.

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

The connection with the August 1800 Diagonal Note, the Company incurred $ 8,000 in debt issuance costs.

The August 1800 Diagonal Note has default terms similar to the 1800 Diagonal Note as described above.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

Notes Payable (continued)

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

2 nd Lien Note

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

Authority Loan Agreement

Peak One Debenture

Second Debenture

Third Debenture

Holdings Debenture

First 2024 Debenture

Second 2024 Debenture

Cedar Cash Advance Agreements

January Cash Advance Agreement

February Cash Advance Agreement

BCV Loan Agreement

Leighton Line of Credit

July Cash Advance Agreement

Pawn Advance Agreement

Enhanced Note

1800 Diagonal Note

August 1800 Diagonal Note

Galvin Note Payable

Debt discount and debt issuance costs

current maturities

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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”).

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

The MIPA and a related side letter provide that the aggregate purchase price be paid as follows:

(i) the Stock Consideration was issued at the closing (the “Closing”) on February 7, 2024;

and (ii) 100 % of the Cash Consideration will be paid in five equal installments of $ 100,000 each on the first day of each of the five quarterly periods following the Closing.

In addition, pursuant to a profit sharing agreement entered into as of February 7, 2024 (the “Profit Sharing Agreement”) , SG DevCorp agreed to pay the former members of Majestic a 50 % share of the net profits for a period of five years that are directly derived from the technology and intellectual property utilized in the real estate focused software as a service offered and operated by Majestic and its subsidiaries.

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

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

The purchase consideration amounted to:

Contingent consideration payable

Equity consideration

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

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

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

Cash and cash equivalents

Intangible assets

Accounts payable and accrued expenses

As of 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.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Business Combination (continued)

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:

Payroll and related expenses

General and administrative expenses

Marketing and business development expense

Operating loss

Other expense:

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.

Total debt, net

current maturities, net

Long-term debt, net

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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

Notes to Condensed Consolidated Financial Statements (Unaudited)

The Company leases certain equipment under non-cancellable operating lease agreements.

The leases have remaining lease terms ranging from one year to ten years .

1 unchanged sentence

Balance Sheet Location

June 30, 2024

September 30, 2024

Finance Leases

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AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

Net Income (Loss) Per Share

3 unchanged sentences

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

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.

At September 30, 2024 , there were options, restricted stock units and warrants of 1,822 , 12,406 and 4,008,411 , respectively, outstanding that could potentially dilute future net income per share .

Because the Company had a net loss as of September 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 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.

At September 30, 2023 , there were no restricted stock units and options and warrants of 1,821 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 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:

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

Balance - beginning of period

3 unchanged sentences

Balance - end of period

The Company’s remaining backlog as of 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:

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

Within 1 year

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Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

Stockholders’ Equity

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AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

Stockholders’ Equity (continued)

5 unchanged sentences

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

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 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.

During the nine months ended September 30, 2024 , 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 nine months ended September 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 , which was originally recorded as a debt discount and fully amortized when the note was extinguished.

Restricted Stock Units – During the nine months ended September 30, 2024 , the Company issued 451,409 shares of common stock with a value of $ 1,097,698 for vested restricted stock units.

Conversion – During the nine months ended September 30, 2024 , Peak One converted $ 802,087 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 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.

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

Settlement of accounts payable – During the nine months ended September 30, 2024 , 212,248 shares of common stock were issued resulting from the settlement of accounts payable in the amount of $ 1,259,681 .

Such amount included a gain of $ 121,834 which has been included in additional paid in capital, due to the fact the settlement of accounts payable was from a related party.

Noncontrolling interest – During the nine months ended September 30, 2024 , SG DevCorp recorded $ 2,983,518 of additional equity transactions which related to transactions in its own stock from debt issuances to third parties, of which $ 1,692,601 is recorded in additional paid in capital and $ 1,290,917 is recorded in noncontrolling interest.

Common stock deemed dividend – During the nine months ended September 30, 2024 , the Company recorded a common stock deemed dividend in the amount of $ 475,713 from the Conversion Deemed Dividend which resulted from the change in fair value of the conversion prices of the underlying agreements.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

Stockholders’ Equity (continued)

19 unchanged sentences

SAFE & GREEN HOLDINGS CORP.

Notes to Condensed Consolidated

Financial Statements

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Stockholders’ Equity (continued)

10 unchanged sentences

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.

Additionally, during the nine months ended September 30, 2024 , 294,310 prefunded warrants were exercised.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

Segments and Disaggregated Revenue

Corporate and support

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Cost of revenue

1 unchanged sentence

Operating loss

Other income (expense)

Income (loss) before income taxes

Other expense

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.

Income from discontinued

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

Depreciation and amortization

1 unchanged sentence

Corporate and support

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Cost of revenue

Operating expenses

Operating income (loss)

Other income (expense)

Income (loss) before income taxes

Operating loss

Other (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.

Loss from discontinued

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

Depreciation and amortization

2 unchanged sentences

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

Segments and Disaggregated Revenue (continued)

Corporate and support

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Cost of revenue

Operating expenses

Operating income (loss)

Other income (expense)

Income (loss) before income taxes

Operating loss

Other expense

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 )

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

Depreciation and amortization

1 unchanged sentence

Corporate and support

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Cost of revenue

Operating expenses

Operating income (loss)

Other income (expense)

Income (loss) before income taxes

Operating loss

Other (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.

Loss from discontinued operations

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

Depreciation and amortization

2 unchanged sentences

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

In conjunction with the June 2017 Public Offering, the Company issued to certain affiliates of the underwriters, as compensation, warrants to purchase an aggregate of 4,313 shares of common stock ( 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),.

21 unchanged sentences

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

Warrants (continued)

10 unchanged sentences

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:

Warrant activity for the nine months ended September 30, 2024 are summarized as follows:

Number of Warrants

3 unchanged sentences

Outstanding and exercisable - January 1, 2024

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

Outstanding and exercisable - September 30, 2024

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

Risk-free interest rate

3 unchanged sentences

SAFE & GREEN HOLDINGS CORP.

Notes to Condensed Consolidated

Financial Statements

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Share-based Compensation

6 unchanged sentences

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

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

As of September 30, 2024 , there were 4,537,534 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:

Six Months Ended

Nine Months Ended

September 30,

Payroll and related expenses

Three Months Ended

September 30,

Payroll and related expenses

SAFE & GREEN HOLDINGS CORP.

Notes to Condensed Consolidated

Financial Statements

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Share-based Compensation (continued)

Stock-Based Option Awards

The Company has issued no stock-based options during the six months ended June 30, 2024 or 2023 .

The Company has issued no stock-based options during the nine months ended September 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.

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

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

Weighted Average Fair Value Per Share

3 unchanged sentences

Outstanding – December 31, 2023

Outstanding – June 30, 2024

Outstanding – September 30, 2024

Exercisable – December 31, 2023

Exercisable – June 30, 2024

Exercisable – September 30, 2024

Restricted Stock Units

9 unchanged sentences

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

Share-based Compensation (continued)

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 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 :

As of September 30, 2024 , there was $ 109,666 unrecognized compensation costs related to non-vested restricted stock units.

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

Number of Shares

1 unchanged sentence

Forfeited/Expired

Non-vested balance at June 30, 2024

Non-vested balance at September 30, 2024

Commitm ents and Contingencies

20 unchanged sentences

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

Commitm ents and Contingencies (continued)

19 unchanged sentences

Landau shall occur by August 30, 2024, and ( 6 ) depositions of non-parties shall occur by September 30, 2024.

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

As of September 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.

22 unchanged sentences

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

Commitm ents and Contingencies (continued)

28 unchanged sentences

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

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Commitments and Contingencies (continued)

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

2 unchanged sentences

41 (a)( 1 )(A)(ii).

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Commitments and Contingencies (continued)

On July 23, 2021, the Company filed a First Amended Third-Party Complaint adding the following additional third party defendants seeking, inter alia , contractual indemnity, equitable indemnity;

36 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 original project between the Company and HOLA (“Project”).

filed a lawsuit against EDI International, PC (“EDI”), a New Jersey corporation, in connection with the parties’ consulting agreement, dated June 29, 2016, pursuant to which EDI, was to provide, for a fee, certain architectural and design services for the original project between the Company and HOLA (“Project”).

The lawsuit is styled SG Blocks, Inc.

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

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

19 STCV 21725 .

SG Blocks, Inc.

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

claims that EDI, 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 HCP and HOLA.

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

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

EDI cross-complaint seeks in excess of $ 30,428.71 in damages.

On July 8, 2020, SG Blocks, Inc.

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

In May 2021, the parties settled EDI International, PC’s affirmative claims, and its cross-complaint was dismissed with prejudice on August 23, 2021.

added PVE LLC as a defendant in the lawsuit, claiming PVE LLC is liable to the same extent as EDI.

In May 2021, the parties settled EDI 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 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.

On or about November 15, 2024, the Company received a jury verdict in its favor in the amount of $ 1.274 million against EDI styled as SG Blocks, Inc.

v EDI et al, case no.

19 STCV 21725 .

EDI may appeal the verdict, thus there remains uncertainty whether the verdict will be reduced to a final judgment.

Should the Company secure a final judgment, there remains uncertainty whether the Company will be able to collect on the judgment.

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

Commitments and Contingencies (continued)

29 unchanged sentences

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (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.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.

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.

See Note 21 – Subsequent Events, for additional contingencies.

In April 2020, the Company entered into an amendment to its employment agreement, dated January 1, 2017, with Paul Galvin (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.

Galvin is terminated without cause.

2 unchanged sentences

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

On October 22, 2024, the Board of Directors of the Company determined not to renew the employment agreement, and Mr.

Galvin’s employment will terminate effective as of the close of business on December 31, 2024.

See Note 21 – Subsequent Events, for additional information.

On May 1, 2023, the Company appointed Patricia Kaelin as the Company’s Chief Financial Officer and entered into an employment agreement with Patricia Kaelin (the “Kaelin Employment Agreement”) to employ Ms.

8 unchanged sentences

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements (Unaudited)

R elated Party Transactions

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 .

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

See Note 9 – Notes Payable.

Deconsolidation

As disclosed in Note 2 , during 2024 the Company recognized the effects of the Deconsolidation, Prior to the Deconsolidation, SG DevCorp was consolidated in the Company’s financial statements.

Upon the Deconsolidation, the Company accounts for its investment in SG DevCorp on the equity method.

The effect of the Deconsolidation resulted in a derecognition of $ 12,274,844 of assets, $ 9,022,017 of liabilities, and $ 1,657,829 in the carrying value of the non-controlling interest in SG DevCorp.

Additionally, upon the Deconsolidation, the Company reduced its previously amount recorded as due from SG DevCorp in the amount of $ 394,329 and recorded an amount of $ 1,717,694 due to SG DevCorp which was previously eliminated in consolidation.

The Company recognized a gain of $ 4,728,348 which resulted from the difference between the fair value of the Company’s investment upon deconsolidation of $ 8,126,350 , and the net assets and carrying value of the non-controlling interest as described above.

The gain is included in income (loss) from discontinued operations.

The assets and liabilities of SG DevCorp at the time of Deconsolidation amounted to the following:

Assets held for sale

Prepaid expenses and other current assets

Total current assets

Property, plant and equipment, net

Project development costs and other non-current assets

Intangible assets, net

Investment in and advances to equity affiliates

Total long-term assets

Accounts payable and accrued expenses

Contingent consideration payable

Short-term notes payable, net

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Discontinued Operations

As described in Note 2 , prior year financial statements for 2023 have been restated to present the operations of SG DevCorp as a discontinued operation.

The financial results of SG DevCorp are presented as income (loss) from discontinued operations.

The following table represents the financial results of SG DevCorp:

For the Nine Months Ended September 30, 2024

For the Nine Months Ended September 30, 2023

For the Three Months Ended September 30, 2023

Operating Expenses:

Payroll and related expenses

General and administrative expenses

Marketing and business development expenses

Operating loss

Other income (expense)

The total income from discontinued operations for the nine months ended September 30, 2024 , is comprised of the following:

Gain from Deconsolidation

Net loss from discontinued operations

The following table presents the aggregate carrying amounts of assets and liabilities of discontinued operations of SG DevCorp as of December 31, 2023:

Assets held for sale

Prepaid expenses and other current assets

Total current assets

Property, plant and equipment, net

Project development costs and other non-current assets

Intangible assets, net

Investment in and advances to equity affiliates

Total long-term assets

Accounts payable and accrued expenses

Short-term notes payable, net

SAFE & GREEN HOLDINGS CORP.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Subsequent Events

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.

On October 22, 2024, the Board of Directors (the “Board”) of the Company determined not to renew the Executive Employment Agreement, dated as of January 1, 2017 (the “Employment Agreement”), between the Company and Paul Galvin, the Company’s Chief Executive Officer and, in connection with such determination, delivered a written notice of termination to Mr.

Galvin on October 24, 2024 in accordance with the terms of the Employment Agreement.

Galvin’s employment with the Company as its Chief Executive Officer will terminate effective as of the close of business on December 31, 2024 (the “Effective Date”).

After the Effective Date, Mr.

Galvin is expected to continue to serve as the Chairman of the Company’s Board of Directors.

The Board is conducting a comprehensive search to identify Mr.

Galvin’s successor.

On October 22, 2024, the Company executed and issued a Promissory Note in favor of 1800 Diagonal in the aggregate principal amount of $ 174,000 , and an accompanying Note Purchase Agreement, executed on October 22, 2024.

The note was purchased by for a purchase price of $ 150,000 , representing an original issue discount of $ 24,000 .

A one -time interest charge of twelve percent ( 12 %) will be applied on the issuance on the issuance date to the principal.

Under the terms of the note, beginning on November 15, 2024, the Company is required to make nine ( 9 ) monthly payments of accrued, unpaid interest and outstanding principal, each payment in the amount of $ 21,653 .

During October 2024, 955,000 Pre-Funded Warrants were exercised and the Company issued 955,000 shares of common stock.

On November 6, 2024, the Company entered into an agreement with a single investor that is an existing holder of warrants to purchase shares of common stock of the Company for cash (the “Existing Warrants”), wherein the investor agreed to exercise the Existing Warrants to purchase up 2,758,620 shares of common stock at a reduced exercise price of $ 0.8718 per share, resulting in gross proceeds of approximately $ 2.4 million, before deducting offering fees and other expenses payable by the Company.

In consideration for the exercise of the Existing Warrants for cash, the investor received new warrants (the “New Warrants”) to purchase up to an aggregate of 5,517,240 shares of common stock.

The New Warrants are exercisable after stockholder approval at an exercise price of $ 0.8718 per common share and will expire five years after stockholder approval.

The Company issued and sold the New Warrants and any shares of common stock issuable upon exercise of the New Warrants in reliance on the exemption from the registration requirements of the Securities Act of 1933 , as amended (the “Securities Act”) by virtue of Section 4 (a)( 2 ) thereof and Rule 506 of Regulation D thereunder.

As of November 20, 2024, 1,179,620 of the Existing Warrants were exercised, with the remaining 1,579,000 is abeyance.

On or about November 6, 2024, The Durant Industrial Authority (“DIA”) filed a complaint against the Company and others, seeking unspecified damages for alleged misrepresentations made by the Company to induce DIA to enter into a forgivable promissory note, and alleged fraudulent transfer of real property that the Company purchased from DIA.

The lawsuit was filed as The Durant Industrial Authority v.

SG Blocks, Inc., Safe & Green Holdings Corp.;

SG Echo, LLC;

SGB Development Corp.;

Safe and Green Development Corp.

FKA SGB Development Corp.;

LV Peninsula Holdings, LLC;

Austerra Stable Growth Fund, LP;

Paul Galvin AKA Paul Gavin;

Gerald Sheeran;

David Villarreal;

and Nicolai Brune, Case No.

CJ- 2024 - 249 and commenced in the District Court of Bryan County, State of Oklahoma.

On or about November 13, 2024, the Company was served the summons and complaint.

The Company strongly denies each of the claims set forth in the complaint and will shortly file its answer.

Currently, the Company cannot estimate any potential loss.

On November 21, 2024, the Company received a letter from Nasdaq notifying the Company that since the Company has not yet filed its Form 10-Q for the period ended September 30, 2024, it no longer complies with Nasdaq’s Listing Rules for continued listing.

The Company expects to regain compliance by filing its Form 10-Q for the period ended September 30, 2024, on or about November 26, 2024.

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