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Item 1A. Risk Factors

2024-11-27 compared with 2024-08-14 · 20 added, 44 removed, 87 unchanged (42% of the section changed)

3 unchanged sentences

As a result, the trading price of our common stock could decline and you could lose part or all of your investment.

The following information updates, and should be read in conjunction with, the information disclosed in Part I, Item 1 A, "Risk Factors," contained in the Annual Report on Form 10-K for the year ended December 31, 2023 (the “ 2023 Form 10-K”).

The following information updates, and should be read in conjunction with, the information disclosed in Part I, Item 1 A, "Risk Factors," contained in the 2023 Form 10-K.

There have been no material changes from the risk factors disclosed in “Part I—Item 1 A.

1 unchanged sentence

If we are not successful in our efforts to increase sales or raise capital, we could experience a shortfall in cash over the next twelve months, and our ability to obtain additional financing on acceptable terms, if at all, may be limited.

At June 30, 2024 and December 31, 2023 , we had cash and cash equivalents and a short-term investment, collectively, of $ 1,016,784 and $ 17,448 respectively.

However, during the six months ended June 30, 2024 and year ended December 31, 2023 , we reported a net loss attributable to common stockholders of Safe & Green Holdings Corp.

At September 30, 2024 and December 31, 2023 , we had cash and cash equivalents and a short-term investment, collectively, of $ 256,957 and $ 14,212 respectively.

However, during the nine months ended September 30, 2024 and September 30, 2023 we reported a net loss attributable to common stockholders of Safe & Green Holdings Corp.

of $( 11,511,655 ) and $( 12,683,098 ) , respectively, and used $ 9,915,916 and $ 4,671,863 of cash for operations, respectively.

14 unchanged sentences

The report of our independent registered public accounting firm contains a note stating that the accompanying financial statements have been prepared assuming we will continue as a going concern.

At June 30, 2024 and December 31, 2023, we had cash and cash equivalents and a short-term investment, collectively, of $ 1,016,784 and $ 17,448 , respectively.

However, during the six months ended June 30, 2024 and year ended December 31, 2023 , we reported a net loss attributable to common stockholders of Safe & Green Holdings Corp.

At September 30, 2024 and December 31, 2023 , we had cash and cash equivalents and a short-term investment, collectively, of $ 256,957 and $ 14,212 , respectively.

However, during the nine months ended September 30, 2024 and September 30, 2023 , we reported a net loss attributable to common stockholders of Safe & Green Holdings Corp.

of $( 11,511,655 ) and $( 12,683,098 ), respectively, and used $ 9,915,916 and $ 4,671,863 of cash for operations, respectively.

We have incurred losses since inception, have negative working capital of $ 14,875,215 as of June 30, 2024 and have negative operating cash flows, which has raised substantial doubt about our ability to continue as a going concern.

We have incurred losses since inception, have negative working capital of $ 11,237,131 as of September 30, 2024 and have negative operating cash flows, which has raised substantial doubt about our ability to continue as a going concern.

We expect our current cash and the proceeds from anticipated financings to be sufficient for working capital until we are cash flow positive, which we believe will be in the first half of 2025 .

1 unchanged sentence

A few customers have in the past, and may in the future, account for a significant portion of our revenues in any one year or over a period of several consecutive years.

For example, for the three months ended June 30, 2024 approximately 86 % of our revenue was generated from one customer and for the year ended December 31, 2023 , approximately 87 % of our revenue was generated from one customers.

For example, for the three months ended September 30, 2024 approximately 84 % of our revenue was generated from one customer and for the year ended December 31, 2023 , approximately 87 % of our revenue was generated from one customers.

Although we have contractual relationships with many of our significant customers, our customers may unilaterally reduce or discontinue their contracts with us at any time.

6 unchanged sentences

We include in backlog only those contracts for which we have reasonable assurance that the customer can obtain the permits for construction and can fund the construction.

As of December 31, 2023, our backlog totaled approximately $ 1.9 million and as of June 30, 2024 , our backlog totaled approximately $ 4.1 million.

As of December 31, 2023, our backlog totaled approximately $ 1.9 million and as of September 30, 2024 , our backlog totaled approximately $ 1.9 million.

Our backlog is described more in detail in “Note 13 —Construction Backlog” of the notes to our consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

9 unchanged sentences

The issuance of shares of our common stock upon the exercise of outstanding options, warrants and restricted stock units may dilute the percentage ownership of the then-existing stockholders and may make it more difficult to raise additional equity capital.

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 1,822 and 126,251 , respectively, outstanding that could potentially dilute future net income per share.

If SG DevCorp were to default in its obligation to repay the loan received from BCV S&G it could adversely affect our investment in SG DevCorp.

30 unchanged sentences

However, the Company cannot provide assurances that it will be able to continue to comply with Rule 5250 (c)( 1 ) in the future.

16, 2024, the Company received a letter from Nasdaq notifying the Company that

it was not in compliance with Nasdaq Listing Rule 5550(b)(1) (“Rule 5550(b)(1)”) because the stockholders’ equity of the Company of

$6,334,859, as reported in the Company’s Annual

Report on Form 10-K for the year ended December 31, 2023, was below the minimum

requirement of $2.5 million.

As of the date of

this Quarterly Report on Form 10-Q, the Company does not have a market value of

listed securities of $35 million, or net income

from continued operations of $500,000 in the most

recently completed fiscal year or in two of the

last three most recently completed fiscal years,

the alternative quantitative standards for continued listing on Nasdaq.

In accordance with Nasdaq’s Listing Rules, the Company had until June 30,

2024 to submit a plan to regain compliance with Rule 5550(b)(1).

On July 25, 2024,

Nasdaq notified the Company that, based on its review of the Company and the

materials submitted by the Company to Nasdaq, Nasdaq Staff determined to grant

the Company an extension to regain compliance with Rule 5550(b)(1) until November 12, 2024,

subject to the Company regaining and evidencing compliance with Rule 5550(b)(1) by such date.

Company expects to regain compliance with Rule 5550(b)(1) as a result of the

recent private placement, cost-cutting initiatives aimed at achieving positive

cash flow in 2024, ongoing debt reduction and other strategic initiatives;

provided that there can be no assurances that such measures will be consummated

or that they will achieve their intended effects.

If the Company does not

regain compliance with Rule 5550(b)(1) by November 12, 2024, Nasdaq will provide written

notice that our common stock is subject to delisting.

At such time, the Company

would be entitled to appeal the delisting determination to a Nasdaq Hearing

Panel (the "Panel").

The hearing request would stay any suspension or

delisting action pending the conclusion of the hearing process and expiration

of any additional extension period granted by the Panel following the hearing.

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

As of the date of this Quarterly Report on Form 10-Q, the Company does not have a market value of listed securities of $ 35 million, or net income from continued operations of $ 500,000 in the most recently completed fiscal year or in two of the last three most recently completed fiscal years, the alternative quantitative standards for continued listing on Nasdaq.

In accordance with Nasdaq’s Listing Rules, the Company had until June 30, 2024 to submit a plan to regain compliance with Rule 5550 (b)( 1 ).

On July 25, 2024, Nasdaq notified the Company that, based on its review of the Company and the materials submitted by the Company to Nasdaq, Nasdaq Staff determined to grant the Company an extension to regain compliance with Rule 5550 (b)( 1 ) until November 12, 2024, subject to the Company regaining and evidencing compliance with Rule 5550 (b)( 1 ) by such date.

The Company expects to regain compliance with Rule 5550 (b)( 1 ) as a result of the recent private placement, cost-cutting initiatives aimed at achieving positive cash flow in 2024 , ongoing debt reduction and other strategic initiatives;

provided that there can be no assurances that such measures will be consummated or that they will achieve their intended effects.

If the Company does not regain compliance with Rule 5550 (b)( 1 ) by November 12, 2024, Nasdaq will provide written notice that our common stock is subject to delisting.

At such time, the Company would be entitled to appeal the delisting determination to a Nasdaq Hearing Panel (the "Panel").

The hearing request would stay any suspension or delisting action pending the conclusion of the hearing process and expiration of any additional extension period granted by the Panel following the hearing.

Any delisting of the Company’s common stock from Nasdaq, including as a result of its inability to regain compliance with Rule 5550 (b)( 1 ), could adversely affect the Company’s ability to attract new investors, reduce the liquidity of its outstanding shares of common stock, reduce its ability to raise additional capital, reduce the price at which its common stock trades, result in negative publicity and increase the transaction costs inherent in trading such shares with overall negative effects for the Company’s stockholders.

7 unchanged sentences

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 1A. Risk Factors