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Item 2. Management’s Discussion and Analysis

2025-06-13 compared with 2024-11-27 · 619 added, 249 removed, 74 unchanged (92% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Introduction and Certain Cautionary Statements

As used in this Quarterly Report on Form 10-Q for the period ended September 30, 2024 (this “Quarterly Report on Form 10-Q”), unless the context requires otherwise, references to the "Company," "we," "us," and "our" refer to Safe & Green Holdings Corp.

As used in this Quarterly Report on Form 10-Q for the period ended

March 31, 2025 (this “Quarterly Report on Form 10-Q”), unless the context requires otherwise, references to the “Company,”

“we,” “us,” and “our” refer to Safe & Green Holdings Corp.

and its subsidiaries.

The following discussion and analysis of the financial condition and results of our operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes and schedules included elsewhere in this Quarterly Report on Form 10-Q and with our audited condensed consolidated financial statements and notes for the year ended December 31, 2023, which were included in our Annual Report on Form 10-K for the year then ended December 31, 2023, as filed with the Securities and Exchange Commission (the "SEC") on May 7, 2024 (the " 2023 Form 10-K").

This discussion, particularly information with respect to our future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading "Special note regarding forward-looking statements" in this Quarterly Report on Form10-Q.

You should review the disclosure under the heading “Risk Factors” in the 2023 Form 10-K and in this Quarterly Report on Form 10-Q for a discussion for important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements.

The following

discussion and analysis of the financial condition and results of our operations should be read in conjunction with our unaudited condensed

consolidated financial statements and related notes and schedules included elsewhere in this Quarterly Report on Form 10-Q and with our

audited condensed consolidated financial statements and notes for the year ended December 31, 2024, which were included in our Annual

Report on Form 10-K for the year then ended December 31, 2024, as filed with the Securities and Exchange Commission (the “SEC”)

on March 31, 2025 (the “2024 Form 10-K”).

This discussion, particularly information with respect to our future operations,

includes forward-looking statements that involve risks and uncertainties as described under the heading “Special note regarding

forward-looking statements” in this Quarterly Report on Form10-Q.

You should review the disclosure under the heading “Risk

Factors” in the 2024 Form 10-K and in this Quarterly Report on Form 10-Q for a discussion for important factors that could cause

our actual results to differ materially from those anticipated in these forward-looking statements.

Special note regarding forward-looking statements

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties.

Our actual results could differ materially from those discussed in the forward-looking statements.

The statements contained in this report that are not purely historical are forward-looking statements within the meaning of Section 27 A of the Securities Act of 1933 , as amended (the "Securities Act"), and Section 21 E of the Securities Exchange Act of 1934 , as amended (the "Exchange Act").

Statements contained in this Quarterly Report on Form 10-Q may use forward-looking terminology, such as "anticipates," "believes," "could," "would," "estimates," "may," "might," "plan," "expect," "intend," "should," "will," or other variations on these terms or their negatives.

All statements other than statements of historical facts are statements that could potentially be forward-looking.

The Company cautions that forward-looking statements involve risks and uncertainties and actual results could differ materially from those expressed or implied in these forward-looking statements or could affect the extent to which a particular objective, projection, estimate or prediction is realized.

Factors that could cause or contribute to such differences include, but are not limited to:

This Quarterly Report on Form 10-Q contains forward-looking

statements that involve risks and uncertainties.

Our actual results could differ materially from those discussed in the forward-looking

The statements contained in this report that are not purely historical are forward-looking statements within the meaning of

Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act

of 1934, as amended (the “Exchange Act”).

Statements contained in this Quarterly Report on Form 10-Q may use forward-looking

terminology, such as “anticipates,” “believes,” “could,” “would,” “estimates,”

“may,” “might,” “plan,” “expect,” “intend,” “should,” “will,”

or other variations on these terms or their negatives.

All statements other than statements of historical facts are statements that could

potentially be forward-looking.

The Company cautions that forward-looking statements involve risks and uncertainties and actual results

could differ materially from those expressed or implied in these forward-looking statements or could affect the extent to which a particular

objective, projection, estimate or prediction is realized.

Factors that could cause or contribute to such differences include, but are

not limited to:

our ability to continue as a going concern;

our ability to obtain additional financing on acceptable terms, if at all, or to obtain additional capital in other ways ;

general economic, political and financial conditions, including inflation, both in the United States and internationally;

our ability to obtain additional financing on acceptable terms, if at all,

or to obtain additional capital in other ways ;

general economic, political and financial conditions, including inflation, both in the

United States and internationally;

our ability to increase sales, generate income, effectively manage our growth and realize our backlog;

competition in the markets in which we operate, including the consolidation of our industry, our ability to expand into and compete in new geographic markets and our ability to compete by protecting our proprietary manufacturing process;

a disruption or cybersecurity breach in our or third-party suppliers' information technology systems;

our ability to adapt our products and services to industry standards and consumer preferences and obtain general market acceptance of our products;

product shortages and the availability of raw materials, and potential loss of relationships with key vendors, suppliers or subcontractors;

the seasonality of the construction industry in general, and the commercial and residential construction markets in particular;

a disruption or limited availability with our third party transportation vendors;

competition in the markets in which we operate, including the consolidation of our industry, our ability to expand into and compete in

new geographic markets and our ability to compete by protecting our proprietary manufacturing process;

a disruption or cybersecurity breach

in our or third-party suppliers’ information technology systems;

our ability to adapt our products and services to industry standards

and consumer preferences and obtain general market acceptance of our products;

product shortages and the availability of raw materials,

and potential loss of relationships with key vendors, suppliers or subcontractors;

the seasonality of the construction industry in general,

and the commercial and residential construction markets in particular;

a disruption or limited availability with our third party transportation

the loss or potential loss of any significant customers;

exposure to product liability, including the possibility that our liability for estimated warranties may be inadequate, and various other claims and litigation;

exposure to product liability, including the possibility that our liability

for estimated warranties may be inadequate, and various other claims and litigation;

our ability to attract and retain key employees;

our ability to attract private investment for sales of product;

the credit risk from our customers and our customers’ ability to obtaining third-party financing if and as needed;

the credit risk from our customers and our customers’ ability to

obtaining third-party financing if and as needed;

an impairment of goodwill;

the impact of federal, state and local regulations, including changes to international trade and tariff policies, and the impact of any failure of any person acting on our behalf to comply with applicable regulations and guidelines;

the impact of federal, state and local regulations, including

changes to international trade and tariff policies, and the impact of any failure of any person acting on our behalf to comply with applicable

regulations and guidelines;

costs incurred relating to current and future legal proceedings or investigations;

the cost of compliance with environmental, health and safety laws and other local building regulations;

our ability to utilize our net operating loss carryforwards and the impact of changes in the United States' tax rules and regulations;

dangers inherent in our operations, such as natural or man-made disruptions to our facilities and project sites and other restrictions on business and commercial activity and the adequacy of our insurance coverage;

the cost of compliance

with environmental, health and safety laws and other local building regulations;

our ability to utilize our net operating loss carryforwards

and the impact of changes in the United States’ tax rules and regulations;

dangers inherent in our operations, such as natural or

man-made disruptions to our facilities and project sites and other restrictions on business and commercial activity and the adequacy of

our insurance coverage;

our ability to comply with the requirements of being a public company;

fluctuations in the price of our common stock, including decreases in price due to sales of significant amounts of stock;

potential dilution of the ownership of our current stockholders due to, among other things, public offerings or private placements by the Company or issuances upon the exercise of outstanding options or warrants and the vesting of restricted stock units;

the ability of our principal stockholders, management and directors to potentially exert control due to their ownership interest;

fluctuations in the price of our common

stock, including decreases in price due to sales of significant amounts of stock;

potential dilution of the ownership of our current stockholders

due to, among other things, public offerings or private placements by the Company or issuances upon the exercise of outstanding options

or warrants and the vesting of restricted stock units;

the ability of our principal stockholders, management and directors to potentially

exert control due to their ownership interest;

any ability to pay dividends in the future;

potential negative reports by securities or industry analysts regarding our business or the construction industry in general;

Delaware law provisions discouraging, delaying or preventing a merger or acquisition at a premium price;

our ability to remain listed on the Nasdaq Capital Market and the possibility that our stock will be subject to penny stock rules;

our classification as a smaller reporting company resulting in, among other things, a potential reduction in active trading of our common stock or increased volatility in our stock price;

and any factors discussed in “Part II - Item 1 A.

potential negative reports by securities or

industry analysts regarding our business or the construction industry in general;

Delaware law provisions discouraging, delaying or preventing

a merger or acquisition at a premium price;

our ability to remain listed on the Nasdaq Capital Market and the possibility that our stock

will be subject to penny stock rules;

our classification as a smaller reporting company resulting in, among other things, a potential

reduction in active trading of our common stock or increased volatility in our stock price;

and any factors discussed in “Part II

Risk Factors” to this Quarterly Report on Form 10-Q as well as “Part I – Item 1A.

Risk Factors” in our 2023 Form 10-K, and other filings with the SEC.

Risk Factors” in

our 2024 Form 10-K, and other filings with the SEC.

In addition, certain information presented below is based on unaudited financial information.

There can be no assurance that there will be no changes to this information once audited financial information is available.

As a result, readers are cautioned not to place undue reliance on forward-looking statements.

Forward-looking statements speak only as of the date of this report.

The Company will not undertake to update any forward-looking statement herein or that may be made from time to time on behalf of the Company.

readers are cautioned not to place undue reliance on forward-looking statements.

Forward-looking statements speak only as of the date

of this report.

The Company will not undertake to update any forward-looking statement herein or that may be made from time to time on

behalf of the Company.

We operate in the following four segments:

1 unchanged sentence

(ii) medical;

(ii) real estate development;

(ii) oil and gas;

and (iv) environmental.

The construction segment designs and constructs modular structures built in our factories using raw materials that are Made-in-America.

In the medical segment we use our modular technology to offer turnkey solutions to medical testing and treatment and generating revenue from medical testing.

Our real estate development segment builds innovative and green single or multifamily projects in underserved regions nationally using modules built in one of our vertically integrated factories.

The environmental segment, the newest segment, is a sustainable medical and waste management solution that has a patented technology to collect waste and treat waste for safe disposal.

The construction segment designs and constructs modular structures built in our factories using

raw materials that are Made-in-America.

In the medical segment we use our modular technology to offer turnkey solutions to medical testing

and treatment and generating revenue from medical testing..

The environmental segment, the newest segment, is a sustainable medical and

waste management solution that has a patented technology to collect waste and treat waste for safe disposal.

We are a provider of modular facilities (“Modules”).

We currently provide Modules made out of both code-engineered cargo shipping containers and wood for use as both permanent or temporary structures for residential housing use and commercial use, including for health care facilities.

Prior to the COVID- 19 pandemic, the Modules we supplied were primarily for retail, restaurant and military use and were manufactured by third party suppliers using our proprietary technology and design and engineering expertise, which modifies code-engineered cargo shipping containers and purpose-built modules for use for safe and sustainable commercial, industrial and residential building.

Since our acquisition in September 2020 of Echo DCL, LLC (“Echo”), one of our key supply chain providers, we now have more control over the manufacturing process and have increased our product offerings to add Modules made out of wood.

In March 2020, in response to the COVID- 19 pandemic we began increasing our focus on providing our Modules as health care facilities for deployable medical response solutions.

In February 2023, we entered into an agreement with The Peoples Health Care, in Glendale, California, working in conjunction with Teamsters Local 848 , to deliver four Modules to provide medical services to union members.

In March 2023, we formed Safe & Green Medical Corporation to focus on our medical segment with an objective to establish a national presence with various clinics and labs that cater to the specific needs of local communities.

We currently provide Modules made out of both code-engineered cargo shipping containers and wood for use as both permanent or temporary

structures for residential housing use and commercial use, including for health care facilities.

Prior to the COVID-19 pandemic, the Modules

we supplied were primarily for retail, restaurant and military use and were manufactured by third party suppliers using our proprietary

technology and design and engineering expertise, which modifies code-engineered cargo shipping containers and purpose-built

modules for use for safe and sustainable commercial, industrial and residential building.

Since our acquisition in September 2020 of Echo

DCL, LLC (“Echo”), one of our key supply chain providers, we now have more control over the manufacturing process and have

increased our product offerings to add Modules made out of wood.

In March 2020, in response to the COVID-19 pandemic we began increasing

our focus on providing our Modules as health care facilities for deployable medical response solutions.

In February 2023, we entered into

an agreement with The Peoples Health Care, in Glendale, California, working in conjunction with Teamsters Local 848, to deliver four Modules

to provide medical services to union members.

In March 2023, we formed Safe & Green Medical Corporation to focus on our medical

segment with an objective to establish a national presence with various clinics and labs that cater to the specific needs of local communities.

During 2021, through our subsidiary, Safe and Green Development Corporation.

(“SG DevCorp”), we also began to focus on acquiring property to build multi-family housing communities that allows us to utilize the manufacturing services of Echo.

SG Environmental Solutions Corp.

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

SG DevCorp develops, co-develops builds and finances single and multi-family homes in underserved regions nationally using modules built in one of our vertically integrated factories.

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

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

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 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

(“SG DevCorp”), we also began to focus on acquiring

property to build multi-family housing communities that allows us to utilize the manufacturing services of Echo.

SG Environmental

Solutions Corp.

(“SG Environmental”), formed in Delaware is focused on biomedical waste removal and will utilize a patented

technology that it licenses to shred and disinfect biomedical waste, rendering the waste disinfected, unrecognizable, and of no greater

risk to the public health than residential household waste.

In connection with our acquisition

of NAHD we now operate in the oil and gas industry.

During 2024, NAHD acquired Olenox Corp.

(“Olenox”), a Wyoming corporation.

Olenox is an advanced energy company with three vertically integrated business units:

Oil & Gas Production, Energy Services, and Energy

Technologies.

The company specializes in acquiring and revitalizing underdeveloped energy assets, leveraging proprietary plasma pulse

and ultrasonic cleaning tools to enhance production efficiency while reducing environmental impact.

Olenox’s strategic focus on

distressed oil and gas fields in Texas, Oklahoma, and Kansas has resulted in significant production growth, positioning the company for

long-term success in the energy sector.

Additionally, during 2024, NAHD acquired Machfu, Inc.

(“Machfu”), a Delware corporation.

Olenox is an advanced energy company with three vertically integrated business units:

Oil & Gas Production, Energy Services, and Energy

Technologies.

The company specializes in acquiring and revitalizing underdeveloped energy assets, leveraging proprietary plasma pulse

and ultrasonic cleaning tools to enhance production efficiency while reducing environmental impact.

Olenox’s strategic focus on

distressed oil and gas fields in Texas, Oklahoma, and Kansas has resulted in significant production growth, positioning the company for

long-term success in the energy sector.

Recent Developments

On October 30, 2024, we have successfully completed two substantial projects for a long-time customer, a large contractor to a U.S.

government agency.

The contracts, totaling 45 container-style office units, included one order for 15 units and another for 30 units, resulting in significant time and material savings for the customer.

The entire design-to-completion process highlights SG Echo’s rapid production capabilities, high-quality manufacturing, and commitment to timely delivery.

The office units, custom-designed from shipping containers, provide flexible, “plug-and-play” temporary office solutions for U.S.

military operations.

Each unit is built to meet strict safety and quality standards, underscoring SG Echo’s reputation for reliability, durability, and cost-effectiveness in modular construction.

The quick turnaround time of the project emphasizes SG Echo’s efficiency and capability in supporting government projects on tight timelines.

On November 6, 2024, we 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.

On January 22, 2025, SG Building entered

into a Cash Advance Agreement (the “Core Cash Advance Agreement”) with Core Funding Source LLC (“Core”) pursuant

to which SG Building sold to Pawn $104,930 of its future receivables for a purchase price of $70,000, less underwriting fees and expenses

paid, for net funds provided of $63,000.

Pursuant to the Core Cash Advance Agreement, Core is expected to receive $2,998 a day directly

from SG Building until the $104,930 due to Core is paid in full.

In the event of a default (as defined in the Core Cash Advance Agreement),

Core, among other remedies, can demand payment in full of all amounts remaining due under the Core Cash Advance Agreement.

On January 22, 2025, the Company issued

a promissory note (the “January 1800 Diagonal Note”) in favor of 1800 Diagonal in the principal amount of $143,750

for a purchase price of $125,000, representing an original issue discount of $18,750.

A one-time interest charge of twelve percent

(15%) be applied on the issuance date to the principal balance.

Under the terms of the January 1800 Diagonal Note, beginning

on February 28, 2025, the Company is required to make nine monthly payments of accrued, unpaid interest and outstanding

principal, subject to adjustment, in the amount of $18,368, with $165,310 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 January 1800 Diagonal Note, the Company incurred

$8,000 in debt issuance costs.

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

On February 12, 2025, the Company executed and issued a Promissory

Note (“Note”) in favor of Firstfire Global Opportunities Fund, LLC (the “Firstfire”) in the aggregate principal

amount of $360,000 (the “Firstfire Principal”), and an accompanying Securities Purchase Agreement, executed on February 12,

2025 (the “Firstfire SPA”).

The Note was purchased by Firstfire for a purchase

price of $300,000, representing an original issue discount of $60,000.

The Note shall bear interest at a rate of fifteen percent (15%)

per annum, with the understanding that the first twelve months of interest under the Note (equal to $54,000), shall be guaranteed and

earned in full as of February 12, 2025.

Any amount of Principal or interest due under the Note which is not paid when due shall bear interest

at eighteen percent (18%) per annum (“Default Interest”).

The Note may not be prepaid in whole or in part except as explicitly

set forth in the Note.

Firstfire will have the right, on any calendar

day, at any time on or after the Issue Date, to convert all or any portion of the then-outstanding Principal and interest (including any

Default Interest) into fully paid and non-assessable shares of common stock, par value $0.01 per share, of the Company (the “Common

The per share conversion price into which the Principal, interest (including any Default Interest) shall be equal to $0.65,

subject to adjustment as provided in the Note (the “Conversion Price”).

If at any time the Conversion Price for any conversion

would be less than the par value of the Common Stock, then at the sole discretion of the Lender, the Conversion Price may equal such par

value for such conversion, and the conversion amount shall be increased to include Additional Principal (where “Additional Principal”

means such additional amount to be added to the conversion amount to the extent necessary to cause the number of conversion shares issuable

upon such conversion to equal the same number of conversion shares as would have been issued if the Conversion Price had not been adjusted

by the Lender to the par value price.

The Lender shall be entitled to deduct $1,750 from the conversion amount in each notice of conversion

to cover Lender’s fees associated with each notice of conversion.

The Note may not be converted into shares of the Company’s

common stock if the conversion would result in the Lender and its affiliates owning an aggregate of in excess of 4.99% of the then-outstanding

shares of the Company’s common stock.

In connection with the issuance of the Note and

the SPA, the Company will issue to the Lender common stock purchase warrants (the “Warrant”), which shall be exercisable into

450,000 shares of Common Stock.

Among others, the following shall be considered

events of default under the Note (“Event of Default”):

if the Company fails to pay the Principal Amount or interest when due

the Company fails to issue conversion shares to the Lender upon exercise by the Lender of the conversion rights under the

or the Company breaches any covenant, agreement, or other term or condition of the Note or the accompanying Securities Purchase

Agreement, Registration Rights Agreement, Irrevocable Transfer Agent Instructions, or Warrants.

After an Event of Default, in addition to all

other rights under the Note, the Lender shall have the right to convert any portion of the Note at any time at a price per share equal

to the Alternate Price.

The “Alternate Price” shall mean the lesser of (i) the applicable conversion price under the Note,

(ii) the closing price of the Common Stock on the date of the Event of Default, or (iii) $0.52.

On March 6, 2025, the Company closed and issued

a promissory note (the “Note”) in favor of Tysadco Partners LLC (the “Tysadco”), with an effective date of February

25, 2025, in the aggregate principal amount up to $1,875,000 (the “Principal”), and an accompanying Securities Purchase Agreement

All outstanding Principal and interest shall be due on November 30, 2025 (the “Maturity Date”).

Note was purchased for up to $1,500,000, representing an original issue discount of twenty-five percent (25%), equal to $375,000 if the

Note is fully funded.

The Note shall bear interest at twelve percent (12%) interest per annum.

Tysadco has the right to convert all or

any portion of the then-outstanding Principal and interest into fully paid and non-assessable shares of common stock of the Company, par

value $0.01 per share (the “Conversion Shares”).

The per share conversion price into which the Principal and interest converts

shall be fifty cents ($0.50) per share.

Among others, the following shall be considered events of default under the Note (each an “Event

of Default”):

if the Company fails to pay the Principal or interest when due under the Note;

if the Company fails to issue Conversion

Shares to Tysadco upon exercise by Tysadco of the conversion rights under the Note;

or if the Company breaches any covenant, agreement,

or other term or condition of the Note or the accompanying SPA.

Upon the occurrence of an Event of Default, then the outstanding balance

shall immediately increase to 125% of the outstanding balance immediately prior to the occurrence of the Event of Default, and a daily

penalty of $500 will accrue until the default is remedied.

If the Company has not obtained approval from

the holders of the Company’s Common Stock, as required by applicable rules and regulation of Nasdaq, the Company shall not issue

any number of shares of Common Stock under the Note that would exceed 4.99% of the shares of Common Stock outstanding as of the date of

Additionally, the Company shall not effect any conversion of the Note, and the Lender shall not have the right to convert any

portion of the Note or receive shares of Common Stock as payment of interest hereunder to the extent that after giving effect to such

conversion or receipt of such interest payment, the Lender, together with any affiliates thereof, would beneficially own in excess of

4.99% of the number of shares of Common Stock outstanding immediately after giving effect to such conversion or receipt of shares as payment

In connection with the issuance of the Note and

the SPA, the Company will issue 294,000 shares of Common Stock (the “Commitment Shares”) as additional consideration for the

purchase of the Note.

On March 3, 2025, the Company executed and issued

a Promissory Note (“Note”) in favor of GS Capital Partners, LLC (the “GS”) in the aggregate principal amount of

$360,000 (the “Principal”), and an accompanying Securities Purchase Agreement (the “SPA”) and Registration Rights

Agreement (the “RRA”).

The Note was purchased by GSA for a purchase price

of $300,000, representing an original issue discount of $60,000.

The Note shall bear interest at a rate of fifteen percent (15%) per annum,

with the understanding that the first twelve months of interest under the Node (equal to $54,000), shall be guaranteed and earned in full

as of the Issue Date.

Any amount of Principal or interest due under the Note which is not paid when due shall bear interest at eighteen

percent (18%) per annum (“Default Interest”).

The Note may not be prepaid in whole or in part except as explicitly set forth

The Company shall make monthly payments on the Note in the amount of $44,000, due and payable on the 3 rd of

each month commencing on June 3, 2025, and ending on February 3, 2025, with a final payment due and payable on March 3, 2026, in the amount

equal to any remaining outstanding balance of the Note.

GSA will have the right to convert all or any

portion of the then-outstanding Principal and interest including any Default Interest (as defined in the Note) into fully paid and non-assessable

shares of common stock of the Company, par value $0.01 per share (the “Common Stock”).

Such conversion right is wholly contingent

and subject to the approval of such conversion by a sufficient amount of holders of the Company’s common stock to satisfy the shareholder

approval requirements for such action as provided in Nasdaq Rule 5635(d) (“Shareholder Approval”).

GSA may, on any calendar

day, at any time after Shareholder Approval of such conversion, convert all or any portion of the then-outstanding Principal and interest

(including any Default Interest) into fully paid and non-assessable share of common stock, par value $0.01 per share, of the Company (the

“Common Stock”).

The per share conversion price into which the Principal, interest (including any Default Interest) shall

be equal to $0.65, subject to adjustment as provided in the Note (the “Conversion Price”).

If at any time the Conversion Price

for any conversion would be less than the par value of the Common Stock, then at the sole discretion of GSA, the Conversion Price may

equal such par value for such conversion, and the conversion amount shall be increased to include Additional Principal (where “Additional

Principal” means such additional amount to be added to the conversion amount to the extent necessary to cause the number of conversion

shares issuable upon such conversion to equal the same number of conversion shares as would have been issued if the Conversion Price had

not been adjusted by GSA to the par value price.

GSA shall be entitled to deduct $1,750 from the conversion amount in each notice of conversion

to cover GSA’s fees associated with each notice of conversion.

The Note may not be converted into shares of the Company’s

common stock if the conversion would result in GSA and its affiliates owning an aggregate of in excess of 4.99% of the then-outstanding

shares of the Company’s common stock.

Among others, the following shall be considered

events of default under the Note (“Event of Default”):

if the Company fails to pay the Principal Amount or interest when due

the Company fails to issue conversion shares to GSA upon exercise by GSA of the conversion rights under the Note;

Company breaches any covenant, agreement, or other term or condition of the Note or the accompanying Securities Purchase Agreement, Registration

Rights Agreement, Irrevocable Transfer Agent Instructions, or Warrants.

After an Event of Default, in addition to all

other rights under the Note, GSA shall have the right to convert any portion of the Note at any time at a price per share equal to the

Alternate Price.

The “Alternate Price” shall mean the lesser of (i) the applicable conversion price under the Note, (ii) the

closing price of the Common Stock on the date of the Event of Default, or (iii) $0.52.

On March 27, 2025, the Company executed and issued a Promissory Note

(“Note”) in favor of Generating Alpha Ltd.

(the “Generating”) in the aggregate principal amount of $375,700 (the

“Principal”), and an accompanying Securities Purchase Agreement (the “SPA”) and Registration Rights Agreement

The Note was purchased by Generating for a purchase

price of $300,560, representing an original issue discount of $75,140.

The Note shall bear interest at a rate of fifteen percent (15%)

per annum, with the understanding that the first twelve months of interest under the Node (equal to $56,355), shall be guaranteed and

earned in full as of March 27, 2025.

Any amount of Principal or interest due under the Note which is not paid when due shall bear interest

at eighteen percent (18%) per annum (“Default Interest”).

The Company shall make monthly payments on the Note (each an “Amortization

Payment”) in the amount of $43,205.50, due and payable on the 6 th of each month commencing on June 6, 2025, and

ending on March 6, 2026.

The Company may accelerate the payment date of any Amortization Payment by giving notice to Generating.

If the Company fails to pay any Amortization Payment

when due, in addition to all other rights under the Note, Generating shall have the right to convert at any time any portion of the Note

at a price per share equal to the Market Price.

“Market Price” shall mean the lesser of (i) the then applicable conversion

price under the Note or (ii) 80% of the lowest closing price of the Company’s shares of common stock, par value $0.01 (“Common

Stock”) on any trading day during the ten trading days prior to the conversion date.

If an event of default occurs under the Note,

then, in addition to all other rights under the Note, the Lender shall have the right to convert at any time any portion of the Note at

a price per share equal to the Alternate Price.

“Alternate Price” shall mean the lesser of (i) the then applicable conversion

price, (ii) the closing price of the Common Stock on the date of the event of default (provided, however, that if such date is not a trading

day, then the next trading day after the event of default), or (iii) $0.52 (subject to adjustment as provided in the Note).

The total cumulative number of shares of Common

Stock issued to Generating under the Note, together with the SPA and RRA, may not exceed the requirements of Nasdaq Listing Rule 5635(d)

(the “Nasdaq 19.99% Cap”), except that is the number of shares of Common Stock issued to Lender reaches the Nasdaq 19.99%

Cap, the Company, at its election, will use reasonable commercial efforts to obtain stockholder approval of the Note and the issuance

of additional conversion shares, in accordance with the requirements of Nasdaq Listing Rule 5635(d) (the “Approval”).

Company is unable to obtain such Approval, any remaining outstanding balance of the Note must be repaid in cash.

Among others, the following shall be considered

events of default under the Note (“Event of Default”):

if the Company fails to pay an Amortization Payment when due on the

the Company fails to perform or observe any covenant, term, provision, condition, agreement, or obligation of the Company under

the Note, the SPA, or the RRA;

the Company shall make an assignment for the benefit of creditors, or apply for or consent to the appointment

of a receiver or trustee for it or for a substantial part of its property or business.

After an Event of Default, in addition to all

other rights under the Note, Generating shall have the right to convert any portion of the Note at any time at a price per share equal

to the Alternate Price.

The “Alternate Price” shall mean the lesser of (i) the applicable conversion price under the Note,

(ii) the closing price of the Common Stock on the date of the Event of Default, or (iii) $0.52.

Nasdaq Compliance

On May 13, 2025, Safe

& Green Holdings Corp.

(the “Company”) received a notification letter from the Listing Qualifications Department of The

Nasdaq Stock Market LLC (“Nasdaq”), stating that based on its review of the Company’s public filings with the Securities

and Exchange Commission (the “SEC”), its staff has determined to delist the Company’s securities pursuant to its discretionary

authority under Listing Rule 5101.

Specifically, as set forth in the letter, Nasdaq’s staff determined that the Company’s

issuance of securities pursuant to the securities purchase agreement dated April 14, 2025, particularly the Series B warrants exercisable

on an alternate cashless basis as described in the Company’s prior SEC filings, raises public interest concerns because the issuance

resulted in substantial dilution for its shareholders.

Accordingly, as set forth in the letter, this matter serves as an additional basis

for delisting the Company’s securities from Nasdaq.

The letter serves as

a formal notification that the Nasdaq Hearings Panel (the “Panel”) will consider this matter in rendering a determination

regarding the Company’s continued listing on Nasdaq.

Pursuant to Listing Rule 5810(d), the Company should present its views with

respect to this additional deficiency at its upcoming Panel hearing.

As of the date hereof,

the Company has submitted an appeal of this determination prior to the appeal deadline of May 20, 2025, and will submit a compliance plan

to the Panel in connection with same.

The Company also plans to apply for trading on the OTCQB market maintained by OTC Markets Group

to address the risk of delisting from Nasdaq in the event of an unfavorable Panel decision.

Additionally, as previously

disclosed, on December 12, 2024, the Nasdaq Staff (the “Staff”) had notified the Company that its bid price of its common

stock (the “Common Stock”) had closed at less than $1 per share over the previous 30 consecutive business days, and, as a

result, did not comply with Nasdaq Listing Rule 5550(a)(2), In accordance with Listing Rule 5810(c)(3)(A), the Company was provided 180

calendar days, or until June 10, 2025, to regain compliance with the Nasdaq Listing Rules, as set forth above.

As of June 10, 2025, the

Company has not regained compliance with the Nasdaq Listing Rules, and the Staff has determined that the Company is not eligible for a

second 180 day period.

The Nasdaq hearing panel

has notified the Company that it will also consider this matter, along with the public interest concern matter, in rendering a determination

regarding the Company’s continued listing on the Nasdaq Capital Market.

The Company’s hearing

to address these matters with the Nasdaq hearing panel is scheduled for June 17, 2025.

On June 11, 2025, the

Company received a notification letter from the Listing Qualifications Department of Nasdaq, stating that the Company has not regained

compliance with the Rule and Staff has determined that the Company is not eligible for a second 180 day period.

Specifically, the Company

has appealed a Staff Delist Determination of a public interest concern in connection with a securities purchase agreement that the Company

entered into in April 2025.1 Accordingly, this matter serves as an additional basis for delisting the Company’s securities from

The Nasdaq Stock Market.

This was a formal notification that the Nasdaq Hearings Panel (the

“Panel”) will consider this matter in rendering a determination regarding the Company’s continued listing on The Nasdaq

Capital Market.

Pursuant to Listing Rule 5810(d), the Company should present its views with respect to this additional deficiency at its

Panel hearing.

If the Company fails to address the aforementioned issue, the Panel will consider the record as presented at the hearing

and will make its determination based upon that information.

Results of Operations

Nine Months Ended September 30, 2024 and 2023 :

For the Nine Months Ended September 30, 2024

For the Nine Months Ended September 30, 2023

Three Months Ended March 31, 2025 and 2024:

Total revenue

6 unchanged sentences

Common stock deemed dividend

Income (loss) from discontinued operations

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

During the nine months ended September 30, 2024 , we derived revenue from our construction segment.

Total revenue for the nine months ended September 30, 2024 was $ 3,932,592 compared to $ 14,566,351 for the nine months ended September 30, 2023 .

This decrease of $ 10,633,759 , or approximately 73 %, was mainly driven by a decrease in revenues from construction services due to less jobs in progress.

Cost of Revenue and Gross Profit

Cost of revenue was $ 3,618,031 for the nine months ended September 30, 2024 , compared to $ 15,138,225 for the nine months ended September 30, 2023 .

The de crease of $ 11,520,194 , or a decrease of approximately 76 %, is primarily related to the de crease in construction services during the nine months ended September 30, 2024 .

Gross profit (loss) was $ 314,561 and $( 571,874 ) for the nine months ended September 30, 2024 and 2023 , respectively.

Gross profit (loss) margin percentage increased to 8 % for the nine months ended September 30, 2024 compared to ( 4 )% for the nine months ended September 30, 2023 primarily due to the recognition of losses on construction services recognized during the nine months ended September 30, 2023 .

Operating Expenses

Payroll and related expenses for the nine months ended September 30, 2024 were $ 3,507,118 compared to $ 5,419,852 for the nine months ended September 30, 2023 .

This decrease was primarily caused by a decrease in the vesting of restricted stock units during the nine months ended September 30, 2024 as compared to the prior period, as well as the deconsolidation of SG DevCorp during 2024 .

Other operating expenses (general and administrative expenses and marketing and business development expenses) for the nine months ended September 30, 2024 were $ 1,829,370 compared to $ 4,052,957 for the nine months ended September 30, 2023 .

This decrease was due to an overall decrease in operating expenses spend during the nine months ended September 30, 2024 , as well as the deconsolidation of SG DevCorp during 2024 ..

Other Income (Expense)

Interest income for the nine months ended September 30, 2024 was $ 9,570 mainly derived from bank interest and interest associated with an outstanding note receivable.

There was $ 22,002 of interest income for the nine months ended September 30, 2023 .

There was $ 186,634 and $ 690,618 of other income for the nine months ended September 30, 2024 and 2023 , respectively.

Interest expense for the nine months ended September 30, 2024 and 2023 was $( 2,404,277 ) and $( 735,070 ), respectively.

The increase in interest expense resulted from an increase in notes payable balances during the nine months ended September 30, 2024 .

During the nine months ended September 30, 2024, there was a change in fair value of equity-based investments of $( 5,590,666 ) recognized which resulted from the deconsolidation of SG DevCorp as well as $ 320,408 recognized from the disposition of SG DevCorp shares.

Income from discontinued operations

During the nine months ended September 30, 2024 , there was a gain on deconsolidation of $ 4,738,348 recognized which resulted from the deconsolidation of SG DevCorp, as well as $ 1,952,335 in a net loss recognized.

Three Months Ended September 30, 2024 and 2023 :

For the Three Months Ended September 30, 2024

For the Three Months Ended September 30, 2023

Total revenue

Total cost of revenue

Total payroll and related expenses

Total other operating expenses

Total operating loss

Total other expense

Total loss before income tax

Net income attributable non-controlling interest

Loss from discontinued operations

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

During the three months ended September 30, 2024 , we derived revenue primarily from our construction segment.

Total revenue for the three months ended September 30, 2024 was $ 1,753,223 compared to $ 3,965,361 for the three months ended September 30, 2023 .

This decrease of $ 2,212,138 , or approximately 56 %, was mainly driven by a decrease in construction services due to less jobs in progress.

Net loss attributable to common stockholders

$ (2,746,668 )

$ (4,436,031 )

During the three months ended March 31, 2025,

we derived revenue primarily from our construction segment.

Total revenue for the three months ended March 31, 2025 was $566,354 compared

to $968,115 for the three months ended March 31, 2024.

This decrease of $401,761, or approximately 41%, was mainly driven by a decrease

in construction services due to less jobs in progress.

Cost of Revenue and Gross Profit

Cost of revenue was $ 1,878,799 for the three months ended September 30, 2024 , compared to $ 4,501,393 for the three months ended September 30, 2023 .

The decrease of $ 2,622,594 , or a decrease of approximately 58 %, is primarily related to the decrease in construction services during the three months ended September 30, 2024 .

Gross loss was $( 125,576 ) and $( 536,032 ) for the three months ended September 30, 2024 and 2023 , respectively.

Gross profit margin percentage increased to ( 7 )% for the three months ended September 30, 2024 compared to ( 14 ) % for the three months ended September 30, 2023 primarily due to the recognition of losses on construction services recognized during the three months ended September 30, 2023 .

Cost of revenue was $890,109 for the three months

ended March 31, 2025, compared to $644,983 for the three months ended March 31, 2024.

The increase of $245,126, or a increase of

approximately 38%, is primarily related to the recognition of a reversal of construction losses on construction services during the three

months ended March 31, 2024.

Gross profit (loss) was $(323,755) and $323,132 for the three

months ended March 31, 2025 and 2024, respectively.

Gross profit (loss) margin percentage decreased

to (57)% for the three months ended March 31, 2025 compared to 33% for the three months ended March 31, 2024 primarily due to increased

losses on construction jobs recognized during the three months ended March 31, 2025.

Operating Expenses

Payroll and related expenses for the three months ended September 30, 2024 were $ 1,761,827 compared to $ 591,130 for the three months ended September 30, 2023 .

This increase was primarily caused by a decrease in the vesting of restricted stock units during the three months ended September 30, 2024 as compared to the prior year period.

Other operating expenses (general and administrative expenses and marketing and business development expenses) for the three months ended September 30, 2024 were $ 353,682 compared to $ 1,263,971 for the three months ended September 30, 2023 .

This decrease was due to an overall decrease in operating expenses spend during the three months ended September 30, 2024 , as well as the deconsolidation of SG DevCorp during 2024 .

Payroll and related expenses for the three months

ended March 31, 2025 were $555,738 compared to $1,251,982 for the three months ended March 31, 2024.

This decrease was primarily

caused by a decrease in the vesting of restricted stock units during the three months ended March 31, 2025 as compared to the

prior year period.

Other operating expenses (general and administrative

expenses and marketing and business development expenses) for the three months ended March 31, 2025 were $952,489 compared to $601,733

for the three months ended March 31, 2024.

This increase was due to an overall increase in operating expenses spend during the three

months ended March 31, 2025.

Other Income (Expense)

There was $ 3,186 of interest income for the three months ended September 30, 2023 .

There was $ 2,652 and $ 102,128 of other income for the three months ended September 30, 2024 and 2023 , respectively.

Interest expense for the three months ended September 30, 2024 and 2023 was $ 864,007 and $ 398,772 , respectively.

The increase in interest expense resulted from an increase in notes payable balances during the three months ended September 30, 2024 .

Additionally, during the three months ended September 30, 2024 , there was a change in fair value of equity-based investments of $( 613,665 ) recognized which resulted from the deconsolidation of SG DevCorp.

There was $9,570 of interest income for the three

months ended March 31, 2024 and $48,617 of other income for the three months ended March 31, 2024, of which there were no amounts recognized

for the three months ended March 31, 2025.

Interest expense for the three months ended March 31, 2025 and 2024 was $603,126 and $716,671,

respectively.

The increase in interest expense resulted from an increase in notes payable balances during the three months ended

March 31, 2025.

There was a change in fair value of equity-based investments of $311,560 and $3,112,803 recognized for the three

months ended March 31, 2025 and 2024, respectively.

Additionally, there was $180,600 loss on sales of equity investments recognized during

the three months ended March 31, 2024.

Income Tax Provision

A 100 % valuation allowance was provided against the deferred tax asset consisting of available net operating loss carry forwards and, accordingly, no income tax benefit was provided.

A 100% valuation allowance was provided against

the deferred tax asset consisting of available net operating loss carry forwards and, accordingly, no income tax benefit was provided.

Impact of Inflation

Inflation has caused increases on some of the Company's estimated costs for construction projects in progress and completed during the past two fiscal years, which has affected the Company's revenue and income (loss) from continuing operations.

Our operations for the nine months ended September 30, 2024 and 2023 may not be indicative of our future operations.

Inflation has caused increases on some of the

Company’s estimated costs for construction projects in progress and completed during the past two fiscal years, which has affected

the Company’s revenue and income (loss) from continuing operations.

Our operations for the three months ended March 31, 2025 and 2024 may not be indicative of our future operations.

Liquidity and Capital Resources

As of September 30, 2024 and December 31, 2023 , we had an aggregate of $ 256,957 and $ 14,212 , respectively, of cash and cash equivalents and short-term investments.

Historically, our operations have primarily been funded through proceeds from equity and debt financings, as well as revenue from operations.

We have negative operating cash flows, which has raised substantial doubt about our ability to continue as a going concern for a period of one year after the date the financial statements in this Quarterly Report on Form 10-Q are issued.

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

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

We do not have any additional sources secured for future funding, and if we are unable to raise the necessary capital at the times we require such funding, we may need to materially change our business plan, including delaying implementation of aspects of such business plan or curtailing or abandoning such business plan altogether .

On July 31, 2024, SG Building Blocks, Inc .

(“SG Building”), a wholly owned subsidiary of the Company, entered into a Cash Advance Agreement (the “Fifth Cedar Cash Advance Agreement”) with Cedar Advance LLC (“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, LLC, a wholly owned subsidiary of the Company.

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.

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.

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”).

Beginning February 1, 2025, Lender may withdraw the monthly interest payments due under the Enhanced Note 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 March 31, 2025 and December 31, 2024,

we had an aggregate of $230,509 and $375,873, respectively, of cash and cash equivalents and short-term investments.

Historically, our operations have primarily been

funded through proceeds from equity and debt financings, as well as revenue from operations.

We have negative operating cash flows, which has

raised substantial doubt about our ability to continue as a going concern for a period of one year after the date the financial statements

in this Quarterly Report on Form 10-Q are issued.

We intend to meet our capital needs from revenue generated from operations and by containing costs, entering into strategic alliances,

as well as exploring other options, including the possibility of raising additional debt or equity capital as necessary.

There is, however,

no assurance we will be successful in meeting our capital requirements prior to becoming cash flow positive.

We do not have any additional

sources secured for future funding, and if we are unable to raise the necessary capital at the times we require such funding, we may need

to materially change our business plan, including delaying implementation of aspects of such business plan or curtailing or abandoning

such business plan altogether.

We continue to generate losses from operations.

As of September 30, 2024 , our stockholders’ equity was $ ( 8,158,927 ) , compared to $ ( 6,334,859 ) as of December 31, 2023, and we had an accumulated deficit of $ 84,303,865 , compared to $ 75,930,805 as of December 31, 2023.

Our net loss attributable to our common stockholders for the nine months ended September 30, 2024 was $ ( 11,511,655 ) and net cash used in operating activities was $ 9,915,916 .

We will need to generate additional revenues or secure additional financing sources, such as debt or equity capital, to fund future growth, which financing may not be available on favorable terms or at all.

We are in the process of securing funding, which we believe will provide the needed working capital until we are cash flow positive, which we believe will be in [the second half of 2024 ].

If we are unable to raise the necessary capital at the times we require such funding, we may need to materially change our business plan, including delaying implementation of aspects of such business plan or curtailing or abandoning such business plan altogether.

As of March 31, 2025, our stockholders’ equity was $21,076,387 compared to $(12,460,308) as of December 31, 2024, and we had an

accumulated deficit of $101,278,751, compared to $98,532,083 as of December 31, 2024.

Our net loss attributable to our common stockholders

for the three months ended March 31, 2025 was $2,746,668 and net cash used in operating activities was $1,308,920.

We will need to generate additional revenues or

secure additional financing sources, such as debt or equity capital, to fund future growth, which financing may not be available on favorable

terms or at all.

We are in the process of securing funding, which we believe will provide the needed working capital until we are cash

flow positive, which we believe will be in the second half of 2025.

If we are unable to raise the necessary capital at the times we require

such funding, we may need to materially change our business plan, including delaying implementation of aspects of such business plan or

curtailing or abandoning such business plan altogether.

Cash Flow Summary

Nine Months Ended

September 30 ,

Three Months Ended

Net cash provided by (used in):

Operating activities

$ (1,308,920 )

$ (4,434,361 )

Investing activities

Financing activities

Net increase in cash and cash equivalents

Operating activities used net cash of $ 9,915,916 during the nine months ended September 30, 2024 , and used net cash of $ 4,671,863 during the nine months ended September 30, 2023 .

Generally, our net operating cash flows fluctuate primarily based on changes in our profitability and working capital.

Cash used in operating activities increased by approximately $ 5,244,053 .

Investing activities used net cash of $ 401,448 during the nine months ended September 30, 2024 , and $ 692,603 net cash during th e nine months ended September 30, 2023 a decrease in cash used of $ 291,155 .

This amount resulted from $ 8,007 in purchases of property and equipment, , $ 125,000 received from the sale of equity-based investment and $ 154,089 in project development costs, as well as $ 364,352 used in discontinued operations.

Financing activities provided net cash of $ 10,560,109 during the nine months ended September 30, 2024 .

Financing activities provided $ 5,494,596 net cash during the nine months ended September 30, 2023 .

This amount resulted from $ 5,143,298 in repayments of short-term notes payable, proceeds of $ 8,013,745 from the issuances of short-term notes payable, $ 494,213 received from a warrant inducement transaction, $ 3 0 from prefunded warrant exercise, and $ 3,619,253 from proceed from issuance of stock, as well as $ 3,576,166 received from discontinued operations.

There can be no assurance that our customers will decide to and/or be able to proceed with these construction projects, or that we will ultimately recognize revenue from these projects in a timely manner or at all.

Net increase (decreased) in cash and cash equivalents

Operating activities used net cash of $1,308,920 during the three

months ended March 31, 2025, and used net cash of $4,434,361 during the three months ended March 31, 2024.

Generally, our net operating

cash flows fluctuate primarily based on changes in our profitability and working capital.

Cash used in operating activities decreased

by approximately $3,124,551.

Investing activities used net

cash of $182,663 during the three months ended March 31, 2025, and $304,426 net cash during the three months ended

March 31, 2024 a decrease in cash used of $121,763.

This amount resulted from $73,228 in purchases of property and equipment,

$186,000 used for equity-based investment and $77,013 cash received in business combination.

Financing activities provided

net cash of $ 1,346,219 during the three months ended March 31, 2025 .

Financing activities provided $ 5,388,824 net cash during the three months ended March

This amount resulted from $335,373 in repayments of short-term notes payable, proceeds

of $1,681,592 from the issuances of short-term notes payable.

There can be no assurance that our customers will

decide to and/or be able to proceed with these construction projects, or that we will ultimately recognize revenue from these projects

in a timely manner or at all.

Off-Balance Sheet Arrangements

As of September 30, 2024 and December 31, 2023 , we had no material off-balance sheet arrangements to which we are a party.

In the ordinary course of business, we enter into agreements with third parties that include indemnification provisions which, in our judgment, are normal and customary for companies in our industry sector.

As of March 31, 2025 and December 31, 2024, we had

no material off-balance sheet arrangements to which we are a party.

In the ordinary course of business, we enter into

agreements with third parties that include indemnification provisions which, in our judgment, are normal and customary for companies in

our industry sector.

These agreements are typically with consultants and certain vendors.

Pursuant to these agreements, we generally agree to indemnify, hold harmless, and reimburse indemnified parties for losses suffered or incurred by the indemnified parties with respect to actions taken or omitted by us.

The maximum potential amount of future payments we could be required to make under these indemnification provisions is unlimited.

Pursuant to these agreements, we generally agree

to indemnify, hold harmless, and reimburse indemnified parties for losses suffered or incurred by the indemnified parties with respect

to actions taken or omitted by us.

The maximum potential amount of future payments we could be required to make under these indemnification

provisions is unlimited.

We have not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions.

As a result, the estimated fair value of liabilities relating to these provisions is minimal.

Accordingly, we have no liabilities recorded for these provisions as of September 30, 2024 .

Accordingly, we have no liabilities recorded

for these provisions as of March 31, 2025.

Critical Accounting Estimates

Our condensed consolidated financial statements have been prepared using generally accepted accounting principles in the United States of America (“GAAP”).

In connection with the preparation of the financial statements, we are required to make assumptions and estimates and apply judgments that affect the reported amounts of assets, liabilities, revenue, and expenses, and the related disclosures.

We base our assumptions, estimates, and judgments on historical experience, current trends, and other factors that we believe to be relevant at the time the consolidated financial statements are prepared.

On a regular basis, we review the accounting policies, assumptions, estimates, and judgments to ensure that our financial statements are presented fairly and in accordance with GAAP.

However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.

Our significant accounting policies are discussed in “Note 3 — Summary of Significant Accounting Policies” of the notes to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

We believe that the following accounting policies are the most critical in fully understanding and evaluating our reported financial results.

Our condensed consolidated financial statements

have been prepared using generally accepted accounting principles in the United States of America (“GAAP”).

In connection

with the preparation of the financial statements, we are required to make assumptions and estimates and apply judgments that affect the

reported amounts of assets, liabilities, revenue, and expenses, and the related disclosures.

We base our assumptions, estimates, and judgments

on historical experience, current trends, and other factors that we believe to be relevant at the time the consolidated financial statements

are prepared.

On a regular basis, we review the accounting policies, assumptions, estimates, and judgments to ensure that our financial

statements are presented fairly and in accordance with GAAP.

However, because future events and their effects cannot be determined with

certainty, actual results could differ from our assumptions and estimates, and such differences could be material.

Our significant accounting policies are discussed

in “Note 3— Summary of Significant Accounting Policies” of the notes to our condensed consolidated financial statements

included elsewhere in this Quarterly Report on Form 10-Q.

We believe that the following accounting policies are the most critical

in fully understanding and evaluating our reported financial results.

Share-based payments .

We measure the cost of services received in exchange for an award of equity instruments based on the fair value of the award.

For employees and directors, including non-employee directors, the fair value of the award is measured on the grant date.

For non-employees, the fair value of the award is generally re-measured on interim financial reporting dates and vesting dates until the service period is complete.

The fair value amount is then recognized over the period services are required to be provided in exchange for the award, usually the vesting period.

We recognize stock-based compensation expense on a graded-vesting basis over the requisite service period for each separately vesting tranche of each award.

Stock-based compensation expense to employees and all directors is reported within payroll and related expenses in the consolidated statements of operations.

Stock-based compensation expense to non-employees is reported within marketing and business development expense in the consolidated statements of operations.

We measure the cost

of services received in exchange for an award of equity instruments based on the fair value of the award.

For employees and directors,

including non-employee directors, the fair value of the award is measured on the grant date.

For non-employees, the fair value of the

award is generally re-measured on interim financial reporting dates and vesting dates until the service period is complete.

The fair value

amount is then recognized over the period services are required to be provided in exchange for the award, usually the vesting period.

We recognize stock-based compensation expense on a graded-vesting basis over the requisite service period for each separately vesting

tranche of each award.

Stock-based compensation expense to employees and all directors is reported within payroll and related expenses

in the consolidated statements of operations.

Stock-based compensation expense to non-employees is reported within marketing and business

development expense in the consolidated statements of operations.

Other derivative financial instruments.

We classify as equity any contracts that (i) require physical settlement or net-share settlement or (ii) provide a choice of net-cash settlement or settlement in our own shares (physical settlement or net-share settlement), provided that such contracts are indexed to our own stock.

We classify as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net-cash settle the contract if any event occurs and if that event is outside SGB’s control) or (ii) give the counterparty a choice of net-cash settlement or settlement shares (physical settlement or net-cash settlement).

SGB assesses classification of common stock purchase warrants and other free-standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities or equity is required

Convertible instruments .

We bifurcate conversion options from their host instruments and accounts for them as free-standing derivative financial instruments according to certain criteria.

The criteria include circumstances in which (i) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract;

(ii) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable GAAP measures with changes in fair value reported in earnings as they occur;

and (iii) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

We determined that the embedded conversion options that were included in the previously outstanding convertible debentures should be bifurcated from their host and a portion of the proceeds received upon the issuance of the hybrid contract has been allocated to the fair value of the derivative.

The derivative was subsequently marked to market at each reporting date based on current fair value, with the changes in fair value reported in results of operations.

classify as equity any contracts that (i) require physical settlement or net-share settlement or (ii) provide a choice of net-cash settlement

or settlement in our own shares (physical settlement or net-share settlement), provided that such contracts are indexed to our own stock.

We classify as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net-cash settle the

contract if any event occurs and if that event is outside SGB’s control) or (ii) give the counterparty a choice of net-cash settlement

or settlement shares (physical settlement or net-cash settlement).

SGB assesses classification of common stock purchase warrants and other

free-standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities or equity

Critical Accounting Estimates (continued)

Revenue recognition – We determine, at contract inception, whether we will transfer control of a promised good or service over time or at a point in time, regardless of the length of contract or other factors.

The recognition of revenue aligns with the timing of when promised goods or services are transferred to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services.

To achieve this core principle, we apply the following five steps in accordance with its revenue policy:

Convertible instruments .

We bifurcate conversion

options from their host instruments and accounts for them as free-standing derivative financial instruments according to certain criteria.

The criteria include circumstances in which (i) the economic characteristics and risks of the embedded derivative instrument are not clearly

and closely related to the economic characteristics and risks of the host contract;

(ii) the hybrid instrument that embodies both the

embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable GAAP measures with changes

in fair value reported in earnings as they occur;

and (iii) a separate instrument with the same terms as the embedded derivative instrument

would be considered a derivative instrument.

We determined that the embedded conversion options

that were included in the previously outstanding convertible debentures should be bifurcated from their host and a portion of the

proceeds received upon the issuance of the hybrid contract has been allocated to the fair value of the derivative.

The derivative was

subsequently marked to market at each reporting date based on current fair value, with the changes in fair value reported in results of

Revenue recognition – We determine,

at contract inception, whether we will transfer control of a promised good or service over time or at a point in time, regardless of the

length of contract or other factors.

The recognition of revenue aligns with the timing of when promised goods or services are transferred

to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services.

achieve this core principle, we apply the following five steps in accordance with its revenue policy:

(1) Identify the contract with a customer

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(3) Determine the transaction price

( 4 ) Allocate the transaction price to performance obligations in the contract

(4) Allocate the transaction price to performance obligations

in the contract

(5) Recognize revenue as performance obligations are satisfied

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

certain contracts, the Company applies recognition of revenue over time, which is similar to the method the Company applied under previous

guidance (i.e.

percentage of completion).

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

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

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

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

The Company performs a goodwill impairment test by comparing the fair value of the reporting unit with its carrying value and recognizes an impairment charge for the amount by which the carrying value exceeds the fair value, not to exceed the total amount of goodwill.

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

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

Intangible assets – Intangible assets consist of $ 68,344 of trademarks, and $ 6,706 of website costs that are being amortized over 5 years.

The Company evaluated intangible assets for impairment during the year ended December 31, 2023 and determined that there was an $ 1,880,547 impairment loss for the year ended December 31, 2023 relating to intangible assets of proprietary knowledge and technology.

The amortization expense for the nine months ended September 30, 2024 and 2023 was $ 1 0,251 and $ 14 0,437 , respectively.

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

Due to uncertainties inherent in the estimation process, it is possible that estimates of costs

to complete a performance obligation will be revised in the near-term.

For those performance obligations for which revenue is recognized

using a cost-to-cost input method, changes in total estimated costs, and related progress toward complete satisfaction of the performance

obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made.

When the current

estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance

obligation is made in the period in which the loss becomes evident.

Goodwill – The Company performs

its impairment test of goodwill at the reporting unit level each fiscal year, or more frequently if events or circumstances change that

would more likely than not reduce the fair value of its reporting unit below its carrying values.

The Company performs a goodwill

impairment test by comparing the fair value of the reporting unit with its carrying value and recognizes an impairment charge for the

amount by which the carrying value exceeds the fair value, not to exceed the total amount of goodwill.

The amount by which the carrying

value of the goodwill exceeds its implied fair value, if any, is recognized as an impairment loss.

There were no impairments during the

three months ended March 31, 2025 or 2024.

Intangible assets – Intangible

assets consist of $74,960 of website costs that are being amortized over 5 years and patents of $801,207 that are being recognized

over 7 years.

The amortization expense for the three months ended March 31, 2025 and 2024 was $15,058 and $3,417, respectively.

The accumulated

amortization as of March 31, 2025 and December 31, 2024 was $66,809 and $63,392, respectively.

New Accounting Pronouncements

See Note 4 to the accompanying consolidated financial statements for all recently adopted and new accounting pronouncements.

See Note 4 to the accompanying consolidated

financial statements for all recently adopted and new accounting pronouncements.

Non-GAAP Financial Information

In addition to our results under GAAP, we also present EBITDA and Adjusted EBITDA for historical periods.

EBITDA and Adjusted EBITDA are non-GAAP financial measures and have been presented as supplemental measures of financial performance that are not required by, or presented in accordance with, GAAP.

We calculate EBITDA as net income (loss) attributable to common stockholders before interest expense, income tax benefit (expense), depreciation and amortization.

We calculate Adjusted EBITDA as EBITDA before certain non-recurring, unusual or non-operational items, such as litigation expense, stock issuance expense and stock compensation expense.

We believe that adjusting EBITDA to exclude the effects of these items that are not closely associated with ongoing corporate operations provides management and investors with a meaningful measure that increases period-to -period comparability of our operating performance.

We believe the presentation of EBITDA and Adjusted EBITDA is relevant and useful by enhancing the readers’ ability to understand the Company’s operating performance.

Our management utilizes EBITDA and Adjusted EBITDA as a means to measure performance.

EBITDA and Adjusted EBITDA are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry.

These measures, when used in conjunction with related GAAP financial measures, provide investors with an additional financial analytical framework that may be useful in assessing us and our results of operations.

Our measurements of EBITDA and Adjusted EBITDA may not be comparable to similar titled measures reported by other companies.

Other companies, including other companies in our industry, may not use such measures or may calculate one or more of the measures differently than as presented in this Quarterly Report on Form 10-Q, limiting their usefulness as a comparative measure.

EBITDA and Adjusted EBITDA are not measurements of financial performance under GAAP and should not be considered as an alternative to net income (loss) attributable to common stockholders, or any other measures of financial performance derived in accordance with GAAP.

We do not consider these non-GAAP measures to be substitutes for or superior to the information provided by our GAAP financial results.

The non-GAAP information should be read in conjunction with our consolidated financial statements and related notes.

These measures also should not be construed as an inference that our future results will be unaffected by the non-recurring, unusual or non-operational items for which these non-GAAP measures make adjustments.

In addition to our results under GAAP, we also

present EBITDA and Adjusted EBITDA for historical periods.

EBITDA and Adjusted EBITDA are non-GAAP financial measures and have been presented

as supplemental measures of financial performance that are not required by, or presented in accordance with, GAAP.

We calculate EBITDA

as net income (loss) attributable to common stockholders before interest expense, income tax benefit (expense), depreciation and amortization.

We calculate Adjusted EBITDA as EBITDA before certain non-recurring, unusual or non-operational items, such as litigation expense, stock

issuance expense and stock compensation expense.

We believe that adjusting EBITDA to exclude the effects of these items that are not closely

associated with ongoing corporate operations provides management and investors with a meaningful measure that increases period-to -period

comparability of our operating performance.

We believe the presentation of EBITDA and Adjusted

EBITDA is relevant and useful by enhancing the readers’ ability to understand the Company’s operating performance.

Our management

utilizes EBITDA and Adjusted EBITDA as a means to measure performance.

EBITDA and Adjusted EBITDA are also frequently used by analysts,

investors and other interested parties to evaluate companies in our industry.

These measures, when used in conjunction with related GAAP

financial measures, provide investors with an additional financial analytical framework that may be useful in assessing us and our results

of operations.

Our measurements of EBITDA and Adjusted

EBITDA may not be comparable to similar titled measures reported by other companies.

Other companies, including other companies in

our industry, may not use such measures or may calculate one or more of the measures differently than as presented in this Quarterly

Report on Form 10-Q, limiting their usefulness as a comparative measure.

EBITDA and Adjusted EBITDA are not measurements of

financial performance under GAAP and should not be considered as an alternative to net income (loss) attributable to common

stockholders, or any other measures of financial performance derived in accordance with GAAP.

We do not consider these non-GAAP

measures to be substitutes for or superior to the information provided by our GAAP financial results.

The non-GAAP information

should be read in conjunction with our consolidated financial statements and related notes.

These measures also should not be construed as

an inference that our future results will be unaffected by the non-recurring, unusual or non-operational items for which these non-GAAP

measures make adjustments.

Additionally, EBITDA and Adjusted EBITDA are not intended to be liquidity measures.

Non-GAAP Financial Information (continued)

The following is a reconciliation of EBITDA and Adjusted EBITDA to the nearest GAAP measure, net gain (loss) attributable to common stockholders:

Three Months Ended September 30, 2024

Three Months Ended September 30, 2023

Nine Months Ended September 30, 2024

Nine Months Ended September 30, 2023

The following is a reconciliation of EBITDA and

Adjusted EBITDA to the nearest GAAP measure, net gain (loss) attributable to common stockholders:

Three Months Ended

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

$ (2,746,668 )

$ (4,436,032 )

Addback interest expense

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Gain on deconsolidation-SG DevCorp (including noncontrolling interest portion)

( 3,990,304 )

Change in fair value of equity-based investments

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Addback litigation expense

Addback stock issued for services

Addback stock compensation expense

Adjusted EBITDA (non-GAAP)

$ (1,618,957 )

$ (3,510,854 )

Quantitative and Qualitative Disclosures About Market Risk

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What changed 10-Q

Item 2. Management’s Discussion and Analysis