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Item 7. Management’s Discussion and Analysis

2026-06-30 compared with 2025-04-01 · 472 added, 249 removed, 16 unchanged (98% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Introduction and Certain Cautionary Statements

The following discussion and analysis of the financial condition and results of our operations should be read in conjunction with our consolidated financial statements and related notes and schedules included elsewhere in this Annual Report.

This discussion contains forward-looking statements that involve risks and uncertainties.

and Certain Cautionary Statements

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

financial statements and related notes and schedules included elsewhere in this Annual Report.

This discussion contains forward-looking

statements that involve risks and uncertainties.

Our actual results could differ materially from those discussed below.

Factors that could cause or contribute to such differences include, but are not limited to, intensified competition and operating problems in our operating business projects and their impact on revenues and profit margins or additional factors, and those discussed in the section entitled “Risk Factors” in Part I, Item 1 A of this Annual Report.

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

Results of Operations

Our operations for the years ended December 31, 2024 and 2023 may not be indicative of our future operations.

Years Ended December 31, 2024 and 2023 :

For the Year Ended

December 31, 2024

For the Year Ended

December 31, 2023

Construction services (includes engineering)

Year over year % growth:

that could cause or contribute to such differences include, but are not limited to, intensified competition and operating problems in

our operating business projects and their impact on revenues and profit margins or additional factors, and those discussed in the section

entitled “Risk Factors” in Part I, Item 1A of this Annual Report.

In addition, certain information presented below is

based on unaudited financial information.

of Operations

operations for the years ended December 31, 2025 and 2024 may not be indicative of our future operations.

Ended December 31, 2025 and 2024 :

Construction Services

Medical revenue

Operating income (loss)

year % growth:

Construction Services

income (loss)

Construction Services

Corporate and Support

Other income (expenses)

Common stock deemed dividends

Net income (loss) from discontinued operations

Net loss attributable to common stockholders

During the year ended December 31, 2024 , we derived substantially all of our revenue from the construction services segment.

Total revenue for the year ended December 31, 2024 was $ 4,976,618 compared to $ 16,523,080 for the year ended December 31, 2023 .

(14,068,341 )

stock deemed dividends

income (loss) from discontinued operations

attributable to common stockholders

$ (18,820,190 )

$ (22,601,278 )

revenue for the year ended December 31, 2025, was $2,952,578 compared to $4,976,618 for the year ended December

Revenue decreased 41% in 2025, compared to the prior year.

Construction services revenue decreased 70 % in 2024 compared to the prior year.

The revenue decrease is primarily from a reduction in the number of projects during 2024 .

Operating Income (Loss)

Operating loss was $ 9,706,615 for the year ended December 31, 2024 , compared to $ 21,749,208 for the year ended December 31, 2023 , representing an increase of $ 12,042,593 or 55 % in 2024 compared to the prior year.

Construction services operating loss in 2024 was $ 319,481 as compared to the prior year's operating loss of $ 2,721,899 , primarily due to an increase in the number of projects which resulted in a loss during 2023 , and the limited number of projects during 2024 .

Medical revenue operating loss in 2024 was $ 104,174 , as compared to the prior year's operating loss of $ 529,569 , primarily due to decreased expenses recognized during 2024 .

Corporate and support operating loss increased in 2024 , as compared to the prior year, and such increase is primarily due to increased overhead costs in public expenses related to SEC compliance and legal costs, increases in IT support and increase in insurance expenses to support our various operations.

In addition, an impairment loss of $ 5,976,445 was recorded for the year ended December 31, 2023 compared to an impairment loss of $ 1,015,304 recorded for the year ended December 31, 2024.

Other Income (Expense)

Interest income was $ 119 for the year ended December 31, 2023.

Other income for the year ended December 31, 2024 and 2023 was $ 106,043 and $ 622,096 , respectively.

Other income during 2024 primarily related to miscellaneous income.

Interest expense for the year ended December 31, 2024 and 2023 was $ 3,127,179 and $ 1,430,372 respectively.

The increase in interest expense resulted from additional notes payable entered into during 2024 .

Loss on sales of equity investments for the year ended December 31, 2024 was $ 320,408 .

Additionally, during the year ended December 31, 2024 we recognized $ 6,616,201 of change in fair value of our equity investments.

Income Tax Provision

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

Impact of Inflation

The impact of inflation upon our revenue and income (loss) from continuing operations during each of the past two fiscal years has not been material to its financial position or results of operations for those years because we do not maintain any inventories whose costs are affected by inflation.

Liquidity and Capital Resources

As of December 31, 2024 and December 31, 2023 , we had an aggregate of $ 375,873 and $ 14,212 , respectively, of cash and cash equivalents.

revenue decrease is primarily due to the Company restructuring in 2025.

Income (Loss)

loss was $14,068,341 for the year ended December 31, 2025, compared to $9,706,615 for the year ended December 31, 2024, representing

an increase of $4,361,726 or 45% in 2025 compared to the prior year.

and support operating loss increased in 2025, as compared to the prior year, and such increase is primarily due to increased overhead

costs in public expenses related to SEC compliance and legal costs, increases in IT support and increase in insurance expenses to support

our various operations.

Income (Expense)

income (expense) for the years ended December 31, 2025 and 2024 was $4,751,849 and $(9,957,745), respectively.

Significant drivers for

the year over year change related to the negative change in the fair value of our equity-based investment of $6,616,201 during 2024 which

was not recurring during 2025.

During 2025, we recognized a loss on debt extinguishment of $4,648,282 and a loss on the initial recognition

of embedded derivatives attributable to our convertible notes payable of $4,275,231.

These losses were partially offset by gains from

the settlement and change in fair value of those derivatives of $2,253,638 and $2,538,248, respectively, and a gain from a legal settlement

of $2,000,000.

impact of inflation upon our revenue and income (loss) from continuing operations during each of the past two fiscal years has not been

material to its financial position or results of operations for those years because we do not maintain any inventories whose costs are

affected by inflation.

and Capital Resources

of December 31, 2025 and December 31, 2024, we had an aggregate of $427,866 and $375,873, respectively, of cash and cash equivalents.

To date, we have financed our operations from revenue generated from operations, sales of our equity and debt financing.

As of December 31, 2024 , our stockholders’ equity (deficit) was $( 12,460,308 ) compared to $ ( 6,334,859 ) as of December 31, 2023 .

Our net loss for the years ended December 31, 2024 and 2023 was $ 16,979,682 and $ 26,282,533 respectively.

Net cash used in operating activities was $ 10,898,755 and $ 6,735,017 for the years ended December 31, 2024 and 2023 , respectively.

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.

If we are not successful with our efforts to increase revenue, we will experience, as we have from time to time in the past, a shortfall in cash.

If there is a shortfall, we will be forced to reduce operating expenses, among other steps, all of which would have a material adverse effect on our operations going forward.

In addition, we have issued various types of debt to provide funds for operations as set forth below.

We will also seek to obtain debt or additional equity financing to meet any cash shortfalls both in the public company or our subsidiaries.

The type, timing and terms of any financing we may select will depend on, among other things, our cash needs, the availability of other financing sources and prevailing conditions in the financial markets.

However, there can be no assurance that we will be able to secure additional funds if needed and that, if such funds are available, the terms or conditions would be acceptable to us.

If we are unable to secure additional financing, further reduction in operating expenses might need to be substantial in order for us to ensure enough liquidity to sustain our operations.

of December 31, 2025, our stockholders’ equity (deficit) was $7,589,746 compared to $(12,460,308) as of December 31, 2024.

net loss for the years ended December 31, 2025 and 2024 was $18,820,190 and $16,979,682 respectively.

Net cash used in operating activities

was $7,836,959 and $10,898,755 for the years ended December 31, 2025 and 2024, respectively.

Historically,

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

have negative operating cash flows, which has raised substantial doubt about our ability to continue as a going concern.

we are not successful with our efforts to increase revenue, we will experience, as we have from time to time in the past, a shortfall

If there is a shortfall, we will be forced to reduce operating expenses, among other steps, all of which would have a material

adverse effect on our operations going forward.

In addition, we have issued various types of debt to provide funds for operations as

set forth below.

will also seek to obtain debt or additional equity financing to meet any cash shortfalls both in the public company or our subsidiaries.

The type, timing and terms of any financing we may select will depend on, among other things, our cash needs, the availability of other

financing sources and prevailing conditions in the financial markets.

However, there can be no assurance that we will be able to secure

additional funds if needed and that, if such funds are available, the terms or conditions would be acceptable to us.

If we are unable

to secure additional financing, further reduction in operating expenses might need to be substantial in order for us to ensure enough

liquidity to sustain our operations.

Any equity financing would be dilutive to our stockholders.

If we incur debt, we will likely be subject to restrictive covenants that significantly limit our operating flexibility and require us to encumber our assets.

If we fail to raise sufficient funds and continue to incur losses, our ability to fund our operations, take advantage of strategic opportunities, or otherwise respond to competitive pressures will be significantly limited.

These circumstances have raised substantial doubt about our ability to continue as a going concern, and continued cash losses may risk our status as a going concern.

Our consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.

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

Cedar Cash Advances

O n January 5, 2024, SG Building and SG Echo (together with SG Building, the “Merchants”) entered into a Cash Advance Agreement (the “January Cash Advance Agreement”) with Maison Capital Group (“Maison”) pursuant to which the Merchants sold to Maison $ 300,000 of their future receivables for a purchase price of $ 200,000 , less underwriting fees and expenses paid, for net funds provided of $ 190,000 .

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

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

The Merchants’ obligations under the January Cash Advance Agreement are secured by a security interest in all accounts, including without limitation, all deposit accounts, accounts-receivable, and other receivables, chattel paper, documents, equipment, general intangibles, instruments, and inventory, as those terms are defined by Article 9 of the Uniform Commercial Code, now or hereafter owned or acquired by any of them.

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

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

On January 29, 2024, SG Building entered into a Cash Advance Agreement (the “Fourth Cash Advance Agreement” and, together with the Cash Advance Agreement, the Second Cash Advance Agreement and the Third Cash Advance Agreement, the “Cedar Cash Advance Agreements”) with Cedar Advance LLC (“Cedar”) pursuant to which SG Building sold to Cedar $ 1,733,420 of its future receivables for a purchase price of $ 1,180,000 , less underwriting fees and expenses paid and the repayment of prior amounts due Cedar, for net funds provided of $ 215,575 .

Pursuant to the Fourth Cash Advance Agreement, Cedar is expected to withdraw $ 49,150 a week directly from SG Building until the $ 1,733,420 due to Cedar under the Fourth Cash Advance Agreement is paid in full.

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

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

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

On February 23, 2024, the Merchants entered into a Cash Advance Agreement (“February Cash Advance Agreement”) with Bridgecap Advance LLC (“Bridgecap”) pursuant to which the Merchants sold to Bridgecap $ 224,850 of their future receivables for a purchase price of $ 150,000 , less underwriting fees and expenses paid, for net funds provided of $ 135,000 .

Pursuant to the February Cash Advance Agreement, Bridgecap is expected to withdraw $ 2,248.50 a day directly from the Merchants until the $ 224,850 due to Bridgecap under the February Cash Advance Agreement is paid in full.

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

The Merchants’ obligations under the February Cash Advance Agreement are secured by a security interest in all accounts, including without limitation, all deposit accounts, accounts-receivable, other receivables, and proceeds therefrom, as those terms are defined by Article 9 of the Uniform Commercial Code, now or hereafter owned or acquired by any of them.

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

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

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

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

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

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

As of December 31, 2024 the principal balance on this advance was $ 1,059,983 .

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.

As of December 31, 2024 the principal balance on this advance was $ 249,833 .

On December 17, 2024, SG Building entered into a Cash Advance Agreement (the “December Cash Advance Agreement”) with Cedar pursuant to which SG Building sold to Cedar $ 194,500 of its future receivables for a purchase price of $ 138,000 , less underwriting fees and expenses paid, for net funds provided of $ 125,000 .

Pursuant to the Cedar Cash Advance Agreement, Cedar is expected to withdraw $ 4,900 a week directly from SG Building until the $ 194,500 due to Cedar is paid in full.

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

As of December 31, 2024 the principal balance on this advance was $ 131,047 .

On December 24, 2024, SG Building entered into a Cash Advance Agreement (the “December Cash Advance Agreement”) with Cedar ”) pursuant to which SG Building sold to Cedar $ 203,000 of its future receivables for a purchase price of $ 140,000 , less underwriting fees and expenses paid, for net funds provided of $ 126,000 .

Pursuant to the Cedar Cash Advance Agreement, Cedar is expected to withdraw $ 5,000 a week directly from SG Building until the $203,000 due to Cedar is paid in full.

As of December 31, 2024 the principal balance on this advance was $ 140,000 .

Southstar Factoring Agreement

In connection with the exercise of its option to acquire 19 acres of land and the approximately 56,775 square foot facility located at 101 Waldron Road in Durant Oklahoma (the “Premises”), on June 8, 2023, SG Echo issued a secured commercial promissory note, dated June 1, 2023 (the “Secured Note”), in the principal amount of $ 1,750,000 with SouthStar Financial, LLC, a South Carolina limited liability company (“SouthStar”), and entered into a Non-Recourse Factoring and Security Agreement, dated June 1, 2023 (the “Factoring Agreement”), with SouthStar providing for its purchase from SG Echo of up to $ 1,500,000 of accounts receivable, subject to reduction by South Star (the “Facility Amount”).

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

The Secured Note is secured by a mortgage (the “Mortgage”) on the Premises and secured by a Security Agreement, dated June 1, 2023 (the “Security Agreement”), pursuant to which SG Echo granted to SouthStar a first priority security interest in all of SG Echo’s presently-owned and hereafter-acquired personal and fixture property, wherever located, including, without limitation, all accounts, goods, chattel paper, inventory, equipment, instruments, investment property, documents, deposit accounts, commercial tort claims, letters-of-credit rights, general intangibles including payment intangibles, patents, software trademarks, trade names, customer lists, supporting obligations, all proceeds and products of the foregoing.

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

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

The Factoring Agreement provides that upon acceptance of an account receivable for purchase SouthStar will pay to SG Echo eighty percent ( 80 %) of the face amount of the account receivable, or such lesser percentage as agreed by the parties.

SG Echo will also pay to SouthStar one and 95 / 100 percent ( 1.95 %) of the face amount of the accounts receivable for the first twenty-five ( 25 ) day period after payment for the accounts receivable is transmitted to SouthStar plus one and 25 / 100 percent ( 1.25 %) for each additional fifteen ( 15 ) day period or part thereof, calculated from the date of purchase until payments received by SouthStar in collected funds on the purchased accounts receivable equals the purchase price of the accounts receivable, plus all charges due SouthStar from SG Echo at the time.

An additional one and 50 / 100 percent ( 1.50 %) per fifteen ( 15 ) day period will be charged for invoices exceeding sixty ( 60 ) days from advance date.

The Factoring Agreement provides that SG Echo may require additional funding from SouthStar (an “Overadvance”) and SouthStar may provide the Overadvance in its sole discretion.

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

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

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

The Factoring Agreement has an initial term of thirty-six ( 36 ) months from the first day of the month following the date the first purchased accounts receivable is purchased.

Unless terminated by SG Echo, not less than sixty ( 60 ) but not more than ninety ( 90 ) days before the end of the initial term, the Factoring Agreement will automatically extend for an additional thirty-six ( 36 ) months.

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

If SouthStar has not purchased accounts receivable in a quarterly period during any initial or renewal term which exceed fifty percent ( 50 %) of the Facility Amount per calendar quarter, in which $ 250,000.00 of the purchased accounts each month must be with a specific customer of the Company.

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

Pursuant to a Secured Continuing Corporate Guaranty, dated June 8, 2023 (the “Corporate Guaranty”), we have guaranteed SG Echo’s obligations to SouthStar under the Secured Note and Factoring Agreement.

Pursuant to a Cross-Default and Cross Collateralization Agreement (the “Cross Default Agreement”), effective June 8, 2023, between SouthStar, SG Echo and us, SG Echo’s obligations under the Secured Note and Factoring Agreement are cross-defaulted and cross-collateralized such that any event of default under the Secured Note shall constitute an event of default under the Factoring Agreement at SouthStar’s election (and vice versa, any event of default under the Factoring Agreement shall constitute an event of default under the Secured Note at SouthStar’s election) and any collateral pledged to secure SG Echo’s obligations under the Secured Note shall also secure SG Echo’s obligations under the Factoring Agreement (and vice versa).

February Cash Advances

On February 23, 2024, the SG Building Blocks and SG Echo, together with SG Building Blocks, the (“Merchants”), entered into a Cash Advance Agreement (“Third Cash Advance Agreement”) with Bridgecap Advance LLC (“Bridgecap”) pursuant to which the Merchants sold to Bridgecap $ 224,850 of their future receivables for a purchase price of $ 150,000 , less underwriting fees and expenses paid, for net funds provided of $ 135,000 .

Pursuant to the Third Cash Advance Agreement, Bridgecap is expected to withdraw $ 2,248.50 a day directly from the Merchants’ bank account until the $ 224,850 due to Bridgecap under the Third Cash Advance Agreement is paid.

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

The Merchants’ obligations under the Third Cash Advance Agreement are secured by a security interest in all accounts, including without limitation, all deposit accounts, accounts-receivable, other receivables, and proceeds therefrom, as those terms are defined by Article 9 of the Uniform Commercial Code, now or hereafter owned or acquired by any of them.

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

On March 5, 2024, we issued a Promissory Note (“Note”) in favor of 1800 Diagonal Lending LLC (the “Lender”) in the aggregate principal amount of $ 149,500 (the “Principal”), and an accompanying Securities Purchase Agreement, dated March 5, 2024 (the “SPA”).

The Note was purchased by the Lender for a purchase price of $ 130,000 , representing an original issue discount of $ 19,500 .

A one -time interest charge of ten percent ( 10 %) (the “Interest Rate”) will be applied on the issuance date to the Principal.

Under the terms of the Note, beginning on April 15, 2024, we are required to make nine monthly payments of accrued, unpaid interest and outstanding principal, subject to adjustment, in the amount of $ 18,272,23 .

We have a five business day grace period with respect to each payment.

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

We have the right to accelerate payments or prepay in full at any time with no prepayment penalty.

Among other things, an event of default (“Event of Default”) will be deemed to have occurred if we fail to pay the principal or interest when due on the Note, whether at maturity, upon acceleration or otherwise, if bankruptcy or insolvency proceedings are instituted by or against us or if we fails to maintain the listing of its common stock on The Nasdaq Stock Market.

Upon the occurrence of an Event of Default, the Note will become immediately due and payable and we will be obligated to pay to the Investor, in satisfaction of its obligations under the Note, an amount equal to 200 % times the sum of the then outstanding principal amount of the Note plus accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment plus Default Interest, if any.

After an Event of Default, at any time following the six month anniversary of the Note, the Lender will have the right, to convert all or any part of the outstanding and unpaid amount of the Note into shares of the Company’s common stock at a conversion price equal to the greater of $ 0.08 or 65 % multiplied by the lowest closing bid price during the 10 trading days prior to the conversion date (representing a discount rate of 35 %).

The Note may not be converted into shares of our 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 our common stock.

In addition, unless we obtain shareholder approval of such issuance, we shall not issue a number of shares of its common stock under Note, which when aggregated with all other securities that are required to be aggregated for purposes of Nasdaq Rule 5635 (d), would exceed 19.99 % of the shares of our common stock outstanding as of the date of definitive agreement with respect to the first of such aggregated transactions (the “Conversion Limitation”).

Upon the occurrence of an Event of Default as a result of us being delisted from Nasdaq, the Conversion Limitation shall no longer apply.

We may ne ed 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 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.

Cash Flow Summary

For The Year Ended

If we incur debt, we will likely be

subject to restrictive covenants that significantly limit our operating flexibility and require us to encumber our assets.

to raise sufficient funds and continue to incur losses, our ability to fund our operations, take advantage of strategic opportunities,

or otherwise respond to competitive pressures will be significantly limited.

These circumstances have raised substantial doubt about

our ability to continue as a going concern, and continued cash losses may risk our status as a going concern.

Our consolidated financial

statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.

will need to generate additional revenues or secure additional financing sources, such as debt or equity capital, to fund future operations,

which financing may not be available on favorable terms or at all.

If we fail to raise sufficient funds and continue to incur losses,

our ability to fund our operations, take advantage of strategic opportunities, or otherwise respond to competitive pressures will be

significantly limited and we will need to significantly curtail or cease our operations.

Funding Source LLC

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 Core $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.

As of December 31, 2025, the outstanding balance amounted to $0.

Global Opportunities Fund, LLC

February 12, 2025, the Company executed and issued a Promissory Note (the “Firstfire Note”) in favor of Firstfire Global

Opportunities Fund, LLC (“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”).

Note was purchased by Firstfire for a purchase price of $300,000, representing an original issue discount of $60,000.

The Note bears

interest at a rate of fifteen percent (15%) per annum, with the understanding that the first twelve months of interest under the Firstfire

Note (equal to $54,000), shall be guaranteed and earned in full as of February 12, 2025.

Any amount of Firstfire Principal or interest

due under the Firstfire Note which is not paid when due shall bear interest at eighteen percent (18%) per annum (“Firstfire Default

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

In connection

with the issuance of the Firstfire Note and the Firstfire SPA, the Company will issue to the lender common stock purchase warrants (the

“Firstfire Warrant”), which shall be exercisable into 3,750 shares of Common Stock.

The relative fair value of the Firstfire

Warrants amounted to $158,883 and are recorded as a debt discount to the underlying Firstfire Note.

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

Firstfire Principal and interest (including any Firstfire Default Interest) into fully paid and non-assessable shares of common stock,

par value $0.01 per share, of the Company.

The per share conversion price into which the principal, interest (including any Firstfire

Default Interest) shall be equal to $78, subject to adjustment as provided in the Note (the “Firstfire Conversion Price”).

If at any time the Firstfire 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 Firstfire 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 Firstfire Conversion Price had not been adjusted by the Lender to the par value

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.

an Event of Default, as defined in the Firstfire SPA, in addition to all other rights under the Firstfire Note, the Lender shall have

the right to convert any portion of the Firstfire 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) $333.

April 18, 2025, the Firstfire Note was repaid in cash for total consideration of $360,000.

Immediately prior to settlement, the Company

remeasured the embedded derivative to its fair value of approximately $2.4 million, recognizing a gain on change in fair value of approximately

$1.9 million.

Upon settlement, the Company derecognized the carrying value of the Note, the unamortized debt discount, and the bifurcated

derivative liability, and recognized a gain on settlement of $2.4 million, included in ‘gain on settlement of derivatives’

in the accompanying consolidated statement of operations.

As of December 31, 2025, no derivative liability related to the Firstfire Note

remained outstanding.

As of December 31, 2025, the outstanding balance of this note was $-0-.

March 6, 2025, the Company issued a promissory note (the “Tysadco Note”) in favor of Tysadco Partners LLC (“Tysadco”),

with an effective date of February 25, 2025, in the aggregate principal amount of up to $1,875,000 (the “Tysadco Principal”),

and an accompanying Securities Purchase Agreement (the “Tysadco SPA”).

All outstanding Tysadco Principal and interest shall

be due on November 30, 2025 (the “Tysadco Maturity Date”).

The Tysadco 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 Tysadco Note bears interest

at twelve percent (12%) interest per annum.

Tysadco has the right to convert all or any portion of the then-outstanding Tysadco Principal

and interest into fully paid and non-assessable shares of common stock of the Company, par value $0.01 per share (the “Tysadco

Conversion Shares”).

The per share conversion price into which the Tysadco Principal and interest converts was $320.

Among others,

the following shall be considered events of default under the Tysadco Note, each an Event of Default as defined in the Tysadco SPA:

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

if the Company fails to issue the Tysadco

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 Tysadco Note or the accompanying Tysadco SPA.

Upon the occurrence of an Event of Default,

as defined in the Tysadco SPA, then the outstanding balance shall immediately increase to 125% of the outstanding balance immediately

prior to the occurrence of the such Event of Default, and a daily penalty of $500 will accrue until the default is remedied.

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 Tysadco Note that would exceed 4.99% of the shares

of the Company’s common stock outstanding as of the date of the Tysadco Note.

Additionally, the Company shall not effect any conversion

of the Tysadco Note, and the Lender shall not have the right to convert any portion of the Tysadco 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 the Company’s common

stock outstanding immediately after giving effect to such conversion or receipt of shares as payment of interest.

connection with the issuance of the Tysadco Note and the Tysadco SPA, the Company will issue 459 shares of Common Stock (the “Commitment

Shares”) as additional consideration for the purchase of the Tysadco Note.

September 11, 2025, the Company entered into a Settlement and Release Agreement with Tysadco Partners, LLC (“Tysadco”) to

resolve all claims and disputes arising under the Promissory Note and the Securities Purchase Agreement, each dated February 25, 2025

(collectively, the “Transaction Documents”), and to terminate the financing arrangement in its entirety.

Pursuant to the

agreement, the Company issued 51,563 shares of its common stock in full settlement and satisfaction of the outstanding principal and

accrued interest under the note, totaling $575,000, and in exchange for a mutual release of all claims under the Transaction Documents,

including the Company’s release from the remaining undrawn tranches under the Securities Purchase Agreement.

Capital Partners, LLC

March 3, 2025, the Company executed and issued a Promissory Note (the “GSA Note”) in favor of GS Capital Partners, LLC (“GSA”)

in the aggregate principal amount of $360,000 (the “GSA Principal”), and an accompanying Securities Purchase Agreement (the

“GSA SPA”) and Registration Rights Agreement (the “RRA”).

GSA Note was purchased by GSA for a purchase price of $300,000, representing an original issue discount of $60,000.

The GSA Note bears

interest at a rate of fifteen percent (15%) per annum, with the first twelve months of interest under the Note (equal to $54,000), being

guaranteed and earned in full as of the issue date.

Any amount of the GSA Principal or interest due under the GSA Note which is not paid

when due shall bear interest at eighteen percent (18%) per annum (the “GSA Default Interest”).

The GSA Note may not be prepaid

in whole or in part except as explicitly set forth in the GSA Note.

The Company shall make monthly payments on the GSA Note in the amount

of $44,000, due and payable on the 3rd of each month commencing on June 3, 2025, and ending on February 3, 2026, with a final payment

due and payable on March 3, 2026, in the amount equal to any remaining outstanding balance of the GSA Note.

will have the right to convert all or any portion of the then-outstanding GSA Principal and interest including any GSA Default Interest,

as defined in the GSA Note, into fully paid and non-assessable shares of common stock of the Company, par value $0.01 per share.

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

GSA may, on any calendar day, at any time after Shareholder Approval of such conversion, convert all or any portion

of the then-outstanding GSA Principal and interest (including any GSA Default Interest) into fully paid and non-assessable share of common

stock, par value $0.01 per share, of the Company.

The per share conversion price into which the GSA Principal, interest (including any

GSA Default Interest) shall be equal to $416, subject to adjustment as provided in the Note (the “GSA Conversion Price”).

If at any time the GSA Conversion Price for any conversion would be less than the par value of the common stock, then at the sole discretion

of GSA, the GSA 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 GSA 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.

GSA 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.

others, the following shall be considered events of default under the GSA Note (“GSA Event of Default”):

if the Company fails

to pay the GSA Principal amount or interest when due on the GSA Note;

the Company fails to issue conversion shares to GSA upon exercise

by GSA of the conversion rights under the GSA Note;

or the Company breaches any covenant, agreement, or other term or condition of the

GSA Note or the accompanying Securities Purchase Agreement, Registration Rights Agreement, Irrevocable Transfer Agent Instructions, or

an GSA Event of Default, in addition to all other rights under the GSA Note, GSA shall have the right to convert any portion of the GSA

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 GSA Event of Default, or (iii)

November 19, 2025, the Company and GSA refinanced the GSA Note into a new note payable in the amount of $625,000 with substantially similar

On November 19, 2025, GSA, converted the outstanding balance of the note payable into 14,710 shares of common under contract terms.

As result of the refinancing the Company derecognized the derivative liability associated with the GSA Note.

Immediately prior to settlement,

the Company remeasured the embedded derivative to its fair value of approximately $28,000, recognizing a gain on change in fair value

of approximately $547,000.

Upon settlement, the Company derecognized the carrying value of the GSA Note, the unamortized debt discount,

and the bifurcated derivative liability, and recognized a loss on settlement of approximately $40,000, included in ‘gain on settlement

of derivatives’ in the accompanying consolidated statement of operations.

As of December 31, 2025, no derivative liability related

to the GSA Note remained outstanding.

As of December 31, 2025, the outstanding balance of this note was $-0-.

March 27, 2025, the Company executed and issued a Promissory Note (the “Generating Note”) in favor of Generating Alpha Ltd.

(“Generating”) in the aggregate principal amount of $375,700 (the “Generating Principal”), and an accompanying

Securities Purchase Agreement (the “Generating SPA”) and Registration Rights Agreement (the “Generating RRA”).

Generating Note was purchased by Generating for a purchase price of $300,560, representing an original issue discount of $75,140.

Note bears interest at a rate of fifteen percent (15%) per annum, with the understanding that the first twelve months of interest under

the Generating Node (equal to $56,355), shall be guaranteed and earned in full as of March 27, 2025.

Any amount of the Generating Principal

or interest due under the Generating Note which is not paid when due shall bear interest at eighteen percent (18%) per annum (the “Generating

Default Interest”).

The Company shall make monthly payments on the Generating Note (each an “Amortization Payment”)

in the amount of $43,205.50, due and payable on the 6th of each month commencing on June 6, 2025, and ending on March 6, 2026.

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

the Company fails to pay any Amortization Payment when due, in addition to all other rights under the Generating Note, Generating shall

have the right to convert at any time any portion of the Generating Note at a price per share equal to the Market Price.

Price” shall mean the lesser of (i) the then applicable conversion price under the Generating Note or (ii) 80% of the lowest closing

price of the Company’s shares of common stock, par value $0.01 on any trading day during the ten trading days prior to the conversion

If an event of default occurs under the Generating Note, as defined in the Generating SPA, then, in addition to all other rights

under the Generating Note, the Lender shall have the right to convert at any time any portion of the Generating 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) $332.80 (subject to adjustment as provided in the Generating Note).

total cumulative number of shares of common stock issued to Generating under the Generating Note, together with the Generating SPA and

the Generating 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 Generating Note and the issuance of additional conversion shares, in accordance

with the requirements of Nasdaq Listing Rule 5635(d) (the “Approval”).

If the Company is unable to obtain such Approval,

any remaining outstanding balance of the Generating Note must be repaid in cash.

others, the following shall be considered events of default under the Generating Note (“Generating Event of Default”):

the Company fails to pay an Amortization Payment when due on the Note;

the Company fails to perform or observe any covenant, term, provision,

condition, agreement, or obligation of the Company under the Generating Note, the Generating SPA, or the Generating RRA;

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.

an Generating Event of Default, in addition to all other rights under the Generating Note, Generating shall have the right to convert

any portion of the Generating 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

Generating Event of Default, or (iii) $332.80.

June 3, 2025 (the “Effective Date”), Olenox entered into a Promissory Note (the “Prosperity Note”) in favor of

Prosperity Bank (the “Lender”) in the aggregate principal amount of $2,000,000 (the “Prosperity Principal”).

The Prosperity Note evidences a revolving Line of Credit of Olenox with the Lender.

The Prosperity Note is secured by the Company’s

Certificate of Deposit held with the Lender with an approximate balance of $2,000,000.

Prosperity Note bears interest at a rate of 5% per annum.

Interest shall be calculated based on a year of 360 days.

The Prosperity Note

shall be due in full immediately upon Lender’s demand.

If no demand is made, the Company will pay all outstanding principal and

all accrued unpaid interest on June 2, 2026.

In addition, the Company will pay regular monthly payments of all accrued interest due as

of each payment date, beginning July 2, 2025.

The Company may prepay all or a portion of the principal without penalty earlier than it

If a payment is 10 days or more late, the Company will be charged a late charge 5.00% of the unpaid portion of the regular payment.

The Lender reserves a right of setoff in all of the Company’s accounts with the Lender (whether checking, savings, or some other

The Company authorizes the Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness

against any and all such accounts.

The Prosperity Note provides for a commercial guaranty by Michael McLaren.

others, the following shall constitute an event of default under the Prosperity Note (each an “Prosperity Event of Default”):

if the Company fails to make any payment when due under the Prosperity Note;

if the Company fails to comply with or to perform any other

term, obligation, covenant, or condition contained in the Prosperity Note or any related documents;

any representation or statement made

by the Company to the Lender is false or misleading in any material respect;

a change in ownership of twenty-five percent (25%) or more

of the common stock of the Company;

or a material adverse change in the Company’s financial condition.

Upon an Prosperity Event

of Default, the interest rate on the Prosperity Note shall be 18.00%.

Prosperity Note contains covenants applicable to the Company pertaining to the line of credit, including, among others, that the Company

maintain books and records of its operations (the “Books and Records”) to the need for the line of credit;

the Lender or any of the Lender’s representatives, inspect and/or copy the Books and Records;

and to provide the Lender any documentation

requested which support the reason for making any advance under the line of credit.

Further, the Prosperity Note provides that the Company

shall furnish from time to time to the Lender, upon the Lender’s request, copies of balance sheets of the Company, and copies of

statements of income and cash flows of the Company.

following notes were acquired in the acquisition of NAHD.

note payable to a third party dated June 9, 2022, for $350,000, with interest at 9.5% per annum and due on June 1, 2032.

As of December 31, 2025, the outstanding balance amounted to $264,786.

note payable to a third party dated October 10, 2024, for $150,000, with interest at 15.32% per annum and due on October 8, 2029.

note is unsecured.

As of December 31, 2025, the outstanding balance amounted to $124,621.

note payable to a third party dated June 28, 2022 of $500,000, with interest at 10% per annum and due June 28, 2024.

This note is originally

convertible at a conversion price equal to the lesser of (i) the price paid per share for Equity Securities by the Investors in the Qualified

Financing multiplied by 0.80, and (ii) the quotient resulting from dividing $20,000,000 by the number of outstanding shares of common

stock of Machfu immediately prior to the Qualified Financing.

This note is currently in default.

As of December 31, 2025 the outstanding

balance amounted to $500,000 and is in default.

note payable to a third party of $250,000 dated July 12, 2023, with interest at 10% per annum and due July 12, 2025.

This note is originally

convertible at a conversion price equal to the lesser of (i) the price paid per share for Equity Securities by the Investors in the Qualified

Financing multiplied by 0.80, and (ii) the quotient resulting from dividing $20,000,000 by the number of outstanding shares of common

stock of Machfu immediately prior to the Qualified Financing.

As of December 31, 2025 the outstanding balance amounted to $250,000 and

is in default.

note payable to a related party of $1,674,096 dated February 23, 2023, with interest at 12% per annum and due on August 23, 2023.

Company assumed the convertible note payable held by the Company’s Chief executive officer, a related party.

During the year ended

December 31, 2025, $1,495,098 of principal and $513,171 of accrued interest was converted into 31,231 shares of common stock under contract

As of December 31, 2025, the outstanding principal balance amounted to $255,433.

There was no outstanding accrued interest as

of December 31, 2025.

note payable to a third party of $33,722 on various dates and due on demand.

There is no interest on this note.

As of December 31, 2025

the outstanding balance amounted to $0.

Container Note

December 18, 2025, in connection with the acquisition of Giant Group America Inc.

(Note 11), the Company issued a promissory note payable

to the seller as partial consideration for the acquisition.

This note bears interest at a rate of five percent (5%) per annum.

The principal

balance of the note is $1,750,000, with quarterly payments of principal and interest commencing on April 15, 2026, until April 15, 2028,

when the entire unpaid balance of principal and interest shall be due and payable in full.

The Company may prepay all or any portion

of the principal amount of this note without penalty.

may 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 favourable terms or at all.

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.

The Year Ended

Net cash provided by (used in):

Operating activities

Investing activities

Financing activities

Net increase (decrease) in cash and cash equivalents

Operating activities used net cash of $ 10,898,755 during the year ended December 31, 2024 , and $ 6,735,017 during the year ended December 31, 2023 .

$ (7,836,959 )

$ (10,898,755 )

Net increase (decrease) in

cash and cash equivalents

activities used net cash of $7,836,959 during the year ended December 31, 2025, and $10,898,755 during the year ended December 31, 2024.

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 $ 4,163,738 primarily due to a decrease in working capital due in part to decreases in accounts payable with the addition of operations of new entity, SG Echo, from the corresponding period of the prior years.

In addition, we had a decrease of approximately $ 2,016,052 in stock-based compensation and a decrease in the overall net loss of approximately $ 5,462,977 , during the year ended December 31, 2024 compared to the year ended December 31, 2023 .

The December 31, 2024 amount is due to a net loss of $ 16,979,682 , adjusted by depreciation expense of $ 513,125 , amortization of intangible assets of $ 13,668 , impairment of $ 1,566,806 , write off of project development costs of $ 266,129 , amortization of deferred license costs of $ 30,589 , amortization of debt issuance costs of $ 676,819 , gain on deconsolidation of $ 4,637,013 , increase of right-of-use asset of $ 971,833 , plus change in fair value of equity method investment of $ 6,616,201 , loss on sale of equity method investment $ 320,408 , stock-based compensation of $ 1,194,597 , and a decrease in accounts receivable of $ 77,274 , contract assets of $ 8,209 , inventories of $ 314,956 , prepaid expenses and other current assets of $ 136,194 ,;

added by increase in liability of $ 1,300,172 of accounts payable and accrued expenses, intangible assets of $ 23,920 less decrease of contract liabilities of $ 770,916 and lease liability of $ 1,338,557 .

Additionally, during the year ending December 31, 2024 there was $1,594 net cash used in discontinued operations.

Investing activities received net cash of $ 6,702 during the year ended December 31, 2024 , and $ 864,817 during the year ended December 31, 2023 .

Cash used in investing activities decreased by $ 871,520 from the corresponding period of the prior year.

The December 31, 2024 amount is due to $ 13,946 purchase of fixed assets, $ 125,000 received from sale of equity investment, and $ 104,352 used in discontinued operations

Financing activities provided net cash of $ 11,253,714 during the year ended December 31, 2024 , and provided net cash of $ 7,031,990 during the year ended December 31, 2023 .

Cash provided by financing activities increased by approximately $ 4,221,724 .

December 31, 2024 amount is due to $ 7,273,044 proceeds from short-term note payable, $ 2,104,868 proceeds from inducement agreement, less $ 5,834,000 payment of short-term notes payable, $ 3,590,386 from the issuance of common stock, $ 125 from warrant exercise, $ 28,867 related to peak put, and $ 3,596,211 provided by discontinued operations.

Backlog may fluctuate significantly due to the timing of orders or awards for large projects and is not necessarily indicative of future backlog levels or the rate at which backlog will be recognized as revenue.

The decrease in backlog at December 31, 2024 is primarily attributable to revenue being recognized during the year ended December 31, 2024 .We expect our backlog revenue will be realized by December 31, 2025.

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 December 31, 2024 and 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.

Cash used in operating

activities increased by approximately $3,061,796 primarily due to non-cash charges of $10,222,269 for various items and changes in working

capital of $689,962.

activities used net cash of $4,097,456 during the year ended December 31, 2025, and provided $6,702 during the year ended December

Cash used in investing activities increased by $4,104,158 from the corresponding period of the prior year.

31, 2025 amount is due to $999,453 purchase of property and equipment and oil and gas assets, $2,000,000 used for the purchase of a certificate

of deposit and $978,003 used in acquisitions.

activities provided net cash of $11,986,408 during the year ended December 31, 2025, and provided net cash of $11,253,714 during the

year ended December 31, 2024.

Cash provided by financing activities increased by $732,694 from the corresponding period of the prior

The December 31, 2025 amount is due to $5,705 proceeds from short-term note payable, $1,770,000 proceeds from a line of credit,

$2,001,667 proceeds from convertible notes payable, $6,636,205 from the issuance of common stock, $2,799,500 from the issuance of preferred

These cash proceeds were offset by repayments of short-term notes payable $805,753, convertible notes payable $498,261.

Sheet Arrangements

of December 31, 2025 and 2024, we had no material off-balance sheet arrangements to which we are a party.

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.

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.

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

Accordingly, we have no liabilities recorded for these provisions as of December 31, 2025.

Critical Accounting Estimates and New Accounting Pronouncements

Critical Accounting Estimates

Our financial statements are prepared in accordance with 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 consolidated financial statements included elsewhere in this Annual Report.

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.

Accounting Estimates and New Accounting Pronouncements

Accounting Estimates

financial statements are prepared in accordance with 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.

significant accounting policies are discussed in “Note 3 – Summary of Significant Accounting Policies” of the notes

to our consolidated financial statements included elsewhere in this Annual Report.

We believe that the following accounting policies

are the most critical in fully understanding and evaluating our reported financial results.

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

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.

Convertible instruments .

Safe & Green bifurcates 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.

Safe & Green 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.

Revenue recognition – The Company determines, at contract inception, whether it 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 the Company expects to be entitled in exchange for those goods or services.

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

Identify the contract with a customer

Identify the performance obligations in the contract

Determine the transaction price

Allocate the transaction price to performance obligations in the contract

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.

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.

The Company bifurcates 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.

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.

recognition .

The Company determines, at contract inception, whether it 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 the Company expects to

be entitled in exchange for those goods or services.

To achieve this core principle, the Company applies the following five steps in

accordance with its revenue policy:

the contract with a customer

the performance obligations in the contract

(3) Determine

the transaction price

the transaction price to performance obligations in the contract

(5) Recognize

revenue as performance obligations are satisfied

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.

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

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 indicates a loss, a provision for the entire estimated loss on the unsatisfied performance

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

product or equipment sales, the Company applies recognition of revenue when the customer obtains control over such goods, which is at

a point in time.

Goodwill represents the excess of reorganization value over the fair value of identified net assets upon emergence from bankruptcy.

In accordance with the accounting guidance on goodwill, Safe & Green 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 value.

Our evaluation of goodwill completed during the year ended December 31, 2024 , resulted in $ 0 worth of impairment loss.

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

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

The Company evaluated intangible assets for impairment during the years ended December 31, 2024 and 2023 and determined that there are $ 0 of impairment loss for the year ended December 31, 2024 and $ 1,880,547 impairment loss for the year ended December 31, 2023.

The accumulated amortization and amortization expense as of and for the year ended December 31, 2024 was $ 63,392 and $ 44,256 , respectively.

The accumulated amortization and amortization expense for the years ended December 31, 2023 was $ 2,852,929 and $ 187,640 respectively.

New Accounting Pronouncements

See Note 3 to the accompanying consolidated fin ancial 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.

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

The following is a reconciliation of EBITDA and Adjusted EBITDA to the nearest GAAP measure, net loss:

For the Year Ended

December 31, 2024

For the Year Ended

December 31, 2023

Net loss attributable to common stockholders

Addback interest expense

Addback interest income

Addback depreciation and amortization

EBITDA (non-GAAP)

Common stock deemed dividend

Gain on deconsolidation – SG DevCorp

Loss on disposition of equity-based investments

Change in fair value of equity-based investments

Addback litigation expense

Addback stock-based compensation expense

Adjusted EBITDA (non-GAAP)

accordance with the accounting guidance on goodwill, Safe & Green 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 value.

Intangible assets .

Intangible assets with finite lives are reported at cost, less accumulated amortization, and are amortized over their estimated useful

Amortization is calculated using the straight-line method, and recorded within selling, general, and administrative expenses,

or cost of revenues, depending on the nature and use of the asset.

and Gas Reserves.

Reserve engineering is a subjective process that is dependent upon the quality of available data and the interpretation

thereof, including evaluations and extrapolations of well flow rates and reservoir pressure.

Estimates by different engineers often vary

sometimes significantly.

In addition, physical factors such as the results of drilling, testing and production subsequent to the date

of an estimate, as well as economic factors such as changes in product prices, may justify revision of such estimates.

Because proved

reserves are required to be estimated using recent prices of the evaluation, estimated reserve quantities can be significantly impacted

by changes in product prices.

Accounting Pronouncements

Note 3 to the accompanying consolidated financial statements for all recently adopted and new accounting pronouncements.

Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Financial Statements and Supplementary Data.

Our financial statements and the notes thereto, together with the reports of our registered public accounting firm appear beginning on page F- 1 of this Annual Report.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

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-K

Item 7. Management’s Discussion and Analysis