OLENOX INDUSTRIES INC. 10-Q

ITEM 1. Financial Statements OLENOX INDUSTRIES INC. CONDENSED CONSOLIDATED BALANCE SHEETS March 31, 2026 December 31, 2025 (Unaudited) Assets Current assets: Cash and cash equivalents $ 30,883 $ 427,866 Accounts receivable, net 305,282 317,242 Contract assets 103,736 — Inventories 329,978 329,978 Prepaid expenses and other current assets 447,039 383,439 Total current assets 1,216,918 1,458,525 Non-current assets: Oil and gas assets, on the basis of full cost accounting, net 3,923,164 4,004,589 Property, plant and equipment, net 4,672,024 4,730,505 Project development costs and other non-current assets 340,744 349,348 Right of use assets, net 218,934 309,013 Intangible assets, net 5,579,563 5,734,298 Goodwill 17,449,429 17,449,429 Certificate of deposit 2,000,000 2,000,000 Total non-current assets 34,183,858 34,577,182 Total Assets $ 35,400,776 $ 36,035,707 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable and accrued expenses $ 12,750,723 $ 12,068,509 Contract liabilities and deferred revenues 945,964 924,076 Lease liability, current maturities 179,476 138,217 Due to affiliates 1,242,772 1,498,205 Lines of credit 2,001,667 2,001,667 Derivative liabilities 72,157 70,802 Convertible notes payable 1,125,000 1,035,581 Current portion of long-term debt 4,866,664 4,866,664 Short-term notes payable, net 1,464,612 3,204,175 Total current liabilities 24,649,035 25,807,896 Long-term liabilities: Long-term notes payable, net 636,904 610,336 Right-of-use liability 56,501 179,649 Asset retirement obligations 1,871,180 1,848,080 Total long-term liabilities 2,564,585 2,638,065 Total liabilities 27,213,620 28,445,961 Commitments and contingencies (Note 11) Stockholders’ equity: Series A Preferred stock, $ 1.00 par value, 5,405,010 shares authorized; 3,809,640 and 3,848,640 issued and outstanding at March 31, 2026 and December 31, 2025, respectively 3,809,640 3,848,640 Series B Preferred stock, $ 1.00 par value, 60,000 shares authorized; 2,084 and 2,084 issued and outstanding at March 31, 2026 and December 31, 2025, respectively 2,084 2,084 Series C Preferred stock, $ 1.00 par value, 50,000 shares authorized; 4,589 and 4,500 issued and outstanding at March 31, 2026 and December 31, 2025, respectively 4,589 4,500 Common stock, $ 0.01 par value, 75,000,000 shares authorized; 1,000,352 issued and 1,000,347 outstanding as of March 31, 2026 and 646,796 issued and 646,791 outstanding as of December 31, 2025, respectively 10,002 6,467 Additional paid-in capital 124,471,234 121,172,724 Treasury stock, at cost, 5 shares as of March 31, 2026 and December 31, 2025 ( 92,396 ) ( 92,396 ) Accumulated deficit ( 120,017,997 ) ( 117,352,273 ) Total stockholders’ equity 8,187,156 7,589,746 Total Liabilities and Stockholders’ Equity $ 35,400,776 $ 36,035,707 The accompanying notes are an integral part of these condensed consolidated financial statements. 1 OLENOX INDUSTRIES INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 (UNAUDITED) 2026 2025 Revenues, net $ 285,313 $ 566,354 Cost of revenues 486,146 890,109 Gross loss ( 200,833 ) ( 323,755 ) Operating expenses: Payroll and related expenses 692,380 555,738 General and administrative expenses 1,908,492 945,573 Marketing and business development expenses 81,409 6,916 Total operating expenses 2,682,281 1,508,227 Operating loss ( 2,883,114 ) ( 1,831,982 ) Other income (expense): Interest expense, net ( 365,757 ) ( 603,126 ) Loss on debt extinguishment ( 613,723 ) — Gain on debt extinguishment 1,197,449 — Change in fair value of derivatives ( 1,355 ) — Change in fair value of equity-based investment — ( 311,560 ) Other income 776 — Total 217,390 ( 914,686 ) Loss before income taxes ( 2,665,724 ) ( 2,746,668 ) Income tax expense — — Net loss ( 2,665,724 ) ( 2,746,668 ) Deemed dividend for preferred shareholders ( 395,967 ) — Net loss attributable to common stockholders $ ( 3,061,691 ) $ ( 2,746,668 ) Net loss per share - basic and diluted $ ( 4.38 ) $ ( 286.83 ) Weighted average shares outstanding - basic and diluted 698,387 9,576 The accompanying notes are an integral part of these condensed consolidated financial statements. 2 OLENOX INDUSTRIES INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 (UNAUDITED) Preferred Stock Additional Common Stock Series A Series B Series C Paid in Treasury Accumulated Shares Amount Shares Amount Shares Amount Shares Amount Capital Stock Deficit Total Balance at December 31, 2025 646,791 $ 6,467 3,848,640 $ 3,848,640 2,084 $ 2,084 4,500 $ 4,500 $ 121,172,724 $ ( 92,396 ) $ ( 117,352,273 ) $ 7,589,746 Stock-based compensation 24,790 248 — — — — — — 221,818 — — 222,066 Settlement of short-term notes payable 84,948 849 — — — — — — 875,206 — — 876,055 Shares issued for settlement of due to affiliates 62,333 623 — — — — — — 616,590 — — 617,213 Exchange of Series A preferred stock for common stock 58,500 585 ( 39,000 ) ( 39,000 ) — — — — 38,415 — — — Sale of preferred stock — — — — — — 1,800 1,800 1,546,000 — — 1,547,800 Conversion of preferred stock 122,990 1,230 — — — — ( 1,711 ) ( 1,711 ) 481 — — — Net loss — — — — — — — — — — ( 2,665,724 ) ( 2,665,724 ) Balance at March 31, 2026 1,000,352 $ 10,002 3,809,640 $ 3,809,640 2,084 $ 2,084 4,589 $ 4,589 $ 124,471,234 $ ( 92,396 ) $ ( 120,017,997 ) $ 8,187,156 Preferred Stock Additional Common Stock Series A Series B Series C Paid in Treasury Accumulated Shares Amount Shares Amount Shares Amount Shares Amount Capital Stock Deficit Total Balance at December 31, 2024 9,435 $ 94 — $ — — $ — — $ — $ 86,164,077 $ ( 92,396 ) $ ( 98,532,083 ) $ ( 12,460,308 ) Stock-based compensation 89 1 — — — — — — 106,297 — — 106,298 Issuance of stock in connection with acquisition, as restated (Note 3) — — 4,000,000 4,000,000 — — — — 14,800,000 — — 18,800,000 Forgiveness of related party debt — — — — — — — — 1,275,416 — — 1,275,416 Issuance of common stock in connection with debt issuance 459 5 — — — — — — 332,044 — — 332,049 Net loss — — — — — — — — — — ( 2,746,668 ) ( 2,746,668 ) Balance at March 31, 2025, as restated (Note 3) 9,983 $ 100 4,000,000 $ 4,000,000 — $ — — $ — $ 102,677,834 $ ( 92,396 ) $ ( 101,278,751 ) $ 5,306,787 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 OLENOX INDUSTRIES INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 (Unaudited) 2026 2025 Cash flows from operating activities: Net loss $ ( 2,665,724 ) $ ( 2,746,668 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation, depletion and amortization 171,549 92,117 Amortization of intangible assets 154,735 15,058 Amortization of debt issuance costs 117,487 344,763 Accretion of asset retirement obligations 23,100 — Loss on debt extinguishment 613,723 — Gain on debt extinguishment ( 1,197,449 ) — Change in fair value of derivatives 1,355 — Change in right of use asset and lease liability 8,190 ( 66,821 ) Stock-based compensation 222,066 106,298 Change in fair value of equity-based investment — 311,560 Changes in operating assets and liabilities: Accounts receivable 11,960 12,751 Contract assets ( 103,736 ) 2,536 Inventories — ( 20,181 ) Prepaid expenses and other current assets ( 63,600 ) 97,795 Project development and other assets 8,604 ( 28,439 ) Accounts payable and accrued expenses 766,331 1,072,116 Contract liabilities and deferred revenues 21,888 ( 427,219 ) Due to affiliates — ( 74,586 ) Net cash used in operating activities ( 1,909,521 ) ( 1,308,920 ) Cash flows from investing activities: Purchase of property, plant and equipment ( 31,643 ) ( 73,676 ) Cash received in business combination — 77,013 Investment in equity method investment — ( 186,000 ) Net cash used in investing activities ( 31,643 ) ( 182,663 ) Cash flows from financing activities: Proceeds from short-term notes payable and warrants, net of debt issuance costs — 1,681,592 Payment of short-term notes payable ( 3,619 ) ( 335,373 ) Cash received from sale of common and preferred stock 1,547,800 — Net cash provided by financing activities 1,544,181 1,346,219 Net decrease in cash and cash equivalents ( 396,983 ) ( 145,364 ) Cash and cash equivalents - beginning of period 427,866 375,873 Cash and cash equivalents - end of period $ 30,883 $ 230,509 Supplemental disclosure of cash flow information: Interest paid $ 137,424 $ — Income taxes paid $ — $ — Supplemental disclosure of non-cash investing and financing activities: (as revised) Forgiveness of related party debt and investment $ — $ 1,275,416 Common stock and warrants issued for debt issuance $ — $ 332,049 Shares issued for settlement of short-term notes payable $ 1,738,323 $ — Settlement of due to affiliates and accrued interest $ 339,550 $ — Exchange of Series A preferred stock for common stock $ 39,000 $ — Conversion of preferred stock $ 1,711 $ — The accompanying notes are an integral part of these condensed consolidated financial statements. 4 OLENOX INDUSTRIES INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. DESCRIPTION OF BUSINESS Olenox Industries Inc., previously known as Safe & Green Holdings Corp., (collectively with its subsidiaries, the “Company,” “we”, “us” or “our”) is a vertically integrated energy company operating across multiple business lines, including oil and gas, energy services, and energy technologies. The Company is focused on acquiring, optimizing, and scaling energy-related infrastructure and operating assets across key U.S. markets. On February 2, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and between the Company and New Asia Holdings, Inc., a Nevada corporation (“NAHD”), pursuant to which NAHD was merged into a subsidiary of the Company (the “Merger”). Following the Merger, NAHD and its operating subsidiaries became indirect, wholly owned subsidiaries of the Company. As merger consideration, the Company issued four million ( 4,000,000 ) shares of Series A non-voting convertible preferred shares of the Company, par value $ 1.00 (the “Series A Preferred Shares”), to NAHD’s shareholders, with each Series A Preferred Share having the right to convert into 640 shares of common stock of the Company, provided, however, that any such conversion is subject to the approval by the Company’s common stockholders. The Merger Agreement contained conditions to the completion of the Merger, including the filing of the articles of incorporation and/or organization for the merger subsidiaries, and the adoption of board resolutions and/or sole member resolutions by the merger subsidiaries approving the Merger. On February 13, 2025, all of the closing conditions to the Merger Agreement were satisfied or waived, the Preferred Shares were issued to NAHD’s shareholders, and the transactions set forth in the Merger Agreement have been fully completed and closed. On January 7, 2026, the Company changed its name from Safe & Green Holdings Corp. to Olenox Industries Inc. by filing a Certificate of Amendment to its Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware. The Company operates in the following industries: Construction The Company creates purpose built, prefabricated modules from wood, steel, and shipping containers into new structures. Olenox enables developers, architects, builders and owners to achieve greener construction, faster execution and stronger buildings of higher value and extended life. Oil and Gas 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 it for long-term success in the energy sector. SaaS The Company is a provider of industrial IoT solutions, specialized in secure, low-power edge-to-cloud connectivity and edge computing for critical infrastructure and industrial operations. The Company delivers an integrated hardware and software ecosystem; including its core Machfu Gateway, MACHREACTOR protocol translation engine, and fully managed, turnkey Industrial IoT Service that enables the seamless collection, translation, and transmission of data between legacy industrial controllers, sensors, and modern cloud environments. Utilizing extended-range communication technologies like LoRa, alongside bandwidth-conserving protocols such as MQTT/SparkPlug B, the Company’s solutions allow utility, energy, and oil and gas operators to implement bi-directional monitoring and real-time data intelligence. These services are designed to lower operating and connectivity costs, minimize operational downtime, and assist enterprise customers in meeting regulatory compliance and environmental, social, and governance (ESG) standards. 5 2. LIQUIDITY AND GOING CONCERN The Company has incurred losses since its inception, has negative working capital of approximately $ 23.4 million and has negative operating cash flows, which raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of the uncertainty concerning the Company’s ability to continue as a going concern. The Company intends to address these conditions by increasing revenues from operations, containing costs, pursuing strategic alliances, and obtaining additional debt or equity financing as necessary. There can be no assurance the Company will be successful in meeting its capital requirements. The Company does not have any additional sources secured for future funding, and if it is unable to raise the necessary capital at the times it requires such funding, it may be required to delay, reduce or eliminate planned business activities. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation and principles of consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the Company’s financial position as of March 31, 2026, and its results of operations and cash flows for the periods presented. The results of operations for the three months ended March 31, 2026, are not necessarily indicative of the results to be expected for the full fiscal year or any other period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission on June 30, 2026. The condensed consolidated balance sheet as of December 31, 2025 was derived from the audited financial statements as of that date but does not include all disclosures required by U.S. GAAP. There have been no material changes to the Company’s significant accounting policies as described in the Annual Report on Form 10-K for the year ended December 31, 2025. Restatement of Previously Issued Financial Statements In February 2025, the Company completed the Merger with NAHD. As consideration for the Merger, the Company issued 4,000,000 shares of its Series A Preferred Stock. The Company initially recorded the consideration transferred at a fair value of $ 34,569,600 . During the finalization of the Company’s December 31, 2025, financial statements, the acquisition-date fair value of the 4,000,000 shares of Series A Preferred Stock issued as consideration was restated down to $ 18,800,000 . 6 ASC 805, Business Combinations , requires the consideration transferred in a business combination, including equity interests issued by the acquirer, to be measured at fair value as of the acquisition date. The $ 15,769,600 difference between the amount originally recorded and the acquisition-date fair value therefore represents an error in measurement in previously issued financial statements within the meaning of ASC 250, Accounting Changes and Error Corrections . Because the identifiable assets acquired and liabilities assumed in the Merger were unchanged, the correction reduces the consideration transferred, and correspondingly goodwill, by $ 15,769,600 , and reduces by the same amount the value recorded in stockholders’ equity for the Series A Preferred Stock issued as consideration. The correction does not change the number of shares of Series A Preferred Stock issued or outstanding, the rights and preferences of those shares, or the Company’s net loss, net loss per share, cash flows, or working capital for any period presented. The correction to the March 31, 2025 financial statements is contained in the March 31, 2025 financial statements included herein. Management is in the process of determining if the corrected financial statements for the three months ended March 31, 2025 will be filed in an additional filing. The Merger was completed during the three months ended March 31, 2025. Accordingly, the restatement has no effect on total stockholders’ equity as of December 31, 2024, and affects only the line items within the condensed consolidated statement of changes in stockholders’ equity and the condensed consolidated statement of cash flows reflecting the issuance of Series A Preferred Stock as consideration for the Merger, and the resulting balance as of March 31, 2025, June 30, 2025, and September 30, 2025. The following table presents the effect of the revision on the affected line items of the condensed consolidated statement of changes in stockholders’ equity and condensed consolidated statement of cash flows for the three months ended March 31, 2025: Line Item As Reported Revision As Restated Total consideration transferred ( 4,000,000 shares of Series A Preferred Stock) $ 34,569,600 $ ( 15,769,600 ) $ 18,800,000 Goodwill $ 38,160,202 $ ( 15,769,600 ) $ 22,390,602 Series A Preferred Stock consideration recorded in stockholders’ equity $ 34,569,600 $ ( 15,769,600 ) $ 18,800,000 Supplemental disclosure of non-cash investing and financing activities: Goodwill $ 38,160,202 $ ( 15,769,600 ) $ 22,390,602 In addition, the Company reclassified $ 6.8 million from goodwill to identifiable assets and liabilities for the year ended December 31, 2025, which is related to the finalization of the Company’s December 31, 2025 acquisition-date fair value of the 4,000,000 shares of Series A Preferred Stock. This was not a correction of an error, as the purchase price allocation was provisional until that point and the amortization of said identifiable intangible assets was trued up. Accounting estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period, together with amounts disclosed in the related notes to the financial statements. The Company’s estimates used in these condensed consolidated financial statements include, but are not limited to, revenue recognition, stock-based compensation, accounts receivable reserves, inventory valuations, embedded derivatives, the valuation allowance related to the Company’s deferred tax assets, the carrying amount of goodwill and intangible assets, right of use assets, oil and gas reserve estimates and the recoverability and useful lives of long-lived assets. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is reasonably possible that these external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates. 7 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: (1) Identify the contract with a customer (2) Identify the performance obligations in the contract (3) Determine the transaction price (4) Allocate the transaction price to performance obligations in the contract (5) Recognize revenue as performance obligations are satisfied Construction Services The Company applies recognition of revenue over 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 satisfied over time, the Company uses a cost-to-cost input method to recognize revenue with any changes in total estimated costs, and related progress toward complete satisfaction of the performance obligation being recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. The Company believes the cost-to-cost input method faithfully depicts the transfer of control to the customer because the costs incurred (principally labor, materials, and subcontractor costs) are incurred as the Company satisfies the performance obligation and are directly proportionate to the Company’s progress in transferring control of the promised goods or services to the customer. As costs are incurred, control of the work in process - and the resulting asset or service - passes to the customer, so the ratio of costs incurred to total estimated costs reasonably represents the extent to which the performance obligation has been satisfied. 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. Contract assets include unbilled amounts from construction services when revenue recognized under the cost-to-cost measure of progress exceeds the amounts invoiced to customers, as the amounts cannot be billed under the related contract terms. Such amounts are recoverable from customers based upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of a contract. Contract liabilities from construction and engineering contracts occur when amounts invoiced to customers exceed revenues recognized under the cost-to-cost measure of progress. Contract liabilities additionally include advanced payments from customers on certain contracts. Contract liabilities decrease as the Company recognizes revenue from the satisfaction of the related performance obligation. Although the Company believes it has established adequate procedures for estimating costs to complete on open contracts, it is at least reasonably possible that additional significant costs could occur on contracts prior to completion. The Company periodically evaluates and revises its estimates and makes adjustments as considered necessary. 8 Industrial Connectivity and Monitoring Service The Company has concluded that the hardware, embedded and hosted software, post-contract customer support, and related engineering and consulting services promised in its customer arrangements are not distinct within the context of the contract. The goods and services are highly interdependent and interrelated, with the Company providing a significant integration service that combines them into a single, customer-specific industrial IoT solution. Accordingly, the Company accounts for these services as a single performance obligation. The Company recognizes these revenues over time with respect to this combined performance obligation, as the Company’s performance creates or enhances an asset that the customer controls and the Company’s performance does not create an asset with an alternative use to the Company together with an enforceable right to payment for performance completed to date. Because the combined solution is delivered as a continuous service, the Company has determined that a time-elapsed output method faithfully depicts the transfer of control to the customer. Revenue is therefore recognized ratably over the service period, commencing on the date the solution is made available to the customer and continuing through the term of the arrangement. Oil and Gas Sales The Company recognizes revenue from its interests in oil and gas properties when control of the commodity transfers to the purchaser, which typically occurs at the delivery point designated in the sales contract. Revenue is derived from the Company’s proportionate share of oil and gas production under lease agreements. The Company’s other revenue is related to subscription services, of which revenue is recognized over time as services are provided. The following tables provide further disaggregation of the Company’s revenues by performance obligations: Three Months Ended March 31, 2026 2025 Performance obligations satisfied over time $ 126,020 $ 566,354 Performance obligations satisfied at a point in time 159,293 — Total Revenue $ 285,313 $ 566,354 Fair value measurements The Company measures the fair value of financial assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The Company uses three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Quoted prices for similar assets and liabilities in active markets or inputs that are observable. Level 3 Inputs that are unobservable (for example, cash flow modelling inputs based on assumptions). 9 Transfer into and transfers out of the hierarchy levels are recognized as if they had taken place at the end of the reporting period. There have been no changes in Level 1, Level 2, and Level 3 categorizations and no changes in valuation techniques. The Company’s derivative liabilities are measured at fair value using Level 3 inputs. The Company does not have any financial instruments categorized within Level 1 or Level 2. Fair value measured as of March 31, 2026 Total (Level 1) (Level 2) (Level 3) Liabilities Derivative liabilities $ 72,157 $ — $ — $ 72,157 Fair value measured as of December 31, 2025 Total (Level 1) (Level 2) (Level 3) Liabilities Derivative liabilities $ 70,802 $ — $ — $ 70,802 The following table presents the roll forward of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended March 31, 2026: Derivative liabilities Balance at December 31, 2025 $ 70,802 Issuances — Settlements — Change in fair value included in earnings 1,355 Transfers into (out of) Level 3 — Balance at March 31, 2026 $ 72,157 All changes in the fair value of the embedded derivative conversion features are recorded within “Change in fair value of derivatives” on the condensed consolidated statements of operations. There were no transfers into or out of Level 3 during either period. Accounting Standards Recently Adopted From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and are adopted by the Company as of the specified effective date. There have been no material changes to the Company’s significant accounting policies or recent accounting pronouncements adopted during the three months ended March 31, 2026, from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2025. Recent Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses . This guidance will require additional disclosures and disaggregation of certain costs and expenses presented on the face of the income statement. The amendments are effective for annual reporting periods beginning after December 15, 2026 and interim reporting period beginning after December 15, 2027 with early adoption permitted. The Company is currently evaluating the impact of this new guidance to its condensed consolidated financial statements. The Company’s management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying condensed consolidated financial statements. 10 4. ACCOUNTS RECEIVABLE At March 31, 2026 and December 31, 2025, the Company’s accounts receivable, net consisted of the following: March 31, 2026 December 31, 2025 Billed Construction services $ 707,056 $ 719,016 Less: allowance for credit losses ( 401,774 ) ( 401,774 ) Total net receivables $ 305,282 $ 317,242 Changes in the Company’s allowance for credit losses for the three months ended March 31, 2026 and the year ended December 31, 2025 consisted of the following: Three Months Ended March 31, 2026 Year Ended December 31, 2025 Beginning balance $ 401,774 $ 266,795 Recoveries of credit losses — — Additional credit losses recognized — 134,979 Total allowance for credit losses $ 401,774 $ 401,774 5. CONTRACT ASSETS AND CONTRACT LIABILITIES Costs and estimated earnings on uncompleted contracts, which represent contract assets and contract liabilities, consisted of the following: March 31, 2026 December 31, 2025 Costs incurred on uncompleted contracts $ 558,692 $ 321,479 Estimated earnings to date on uncompleted contracts 153,649 243,977 Gross contract assets 712,341 565,456 Less: billings to date ( 1,063,865 ) ( 937,032 ) Net contract liabilities on uncompleted contracts $ ( 351,524 ) $ ( 371,576 ) Although management believes it has established adequate procedures for estimating costs to complete on open contracts, it is at least reasonably possible that additional significant costs could occur on contracts prior to completion. The Company periodically evaluates and revises its estimates and makes adjustments when they are considered necessary. During the three months ended March 31, 2026, the Company recognized $ 4,989 of revenue related to its contract liabilities as of December 31, 2025. As of March 31, 2025, the Company has contract assets of $ 103,736 and contract liabilities of $ 455,260 . The Company’s contract liabilities are included within ‘contract liabilities and deferred revenue’ on the condensed consolidated balance sheets. 11 6. BORROWINGS There have been no material changes to the Company’s outstanding debt or the terms thereof from those disclosed in Note 8 to the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, except as described below. Cedar Advance LLC (“Cedar”) In February 2026, the Company issued 50,000 shares of common stock in settlement of merchant cash advance obligations due to Cedar Advance LLC with an aggregate outstanding balance of $ 1,727,449 . The shares issued were valued at $ 530,000 , and the Company recognized a gain on debt extinguishment of $ 1,197,449 . Acquisition Note Settlement In February 2026, the Company issued 34,948 shares of common stock in settlement of a note payable and accrued interest, with an aggregate outstanding balance of $ 10,883 . The shares issued had a fair value of $ 346,055 based on the closing price of the Company’s stock on the settlement date, and the Company recognized a loss on debt extinguishment of $ 335,172 . Due to Affiliates Settlement In February 2026, the Company issued 62,333 shares of common stock in settlement of amounts due to affiliated entity controlled by the Company’s Chief Executive Officer, a related party, including accrued interest, with an aggregate outstanding balance of $ 338,662 . The shares issued had a fair value of $ 617,213 , based on the closing price of the Company’s stock on the settlement date and the Company recognized a loss on debt extinguishment of $ 278,551 (see Note 12). 7. CONSTRUCTION BACKLOG The following represents the backlog of signed construction and engineering contracts in existence at March 31, 2026 and December 31, 2025, which represents the amount of revenue the Company expects to realize from work to be performed on uncompleted contracts in progress and from contractual agreements in effect at such dates on which work has not yet begun: Three Months Ended March 31, 2026 Year Ended December 31, 2025 Balance - beginning of period $ 271,128 $ 1,182,955 New contracts and change orders during the period 1,109,456 1,199,839 Subtotal 1,380,584 2,382,794 Less: contract revenue earned during the period ( 100,740 ) ( 2,111,666 ) Balance - end of period $ 1,279,844 $ 271,128 The Company’s remaining backlog as of March 31, 2026 represents the remaining transaction price of firm contracts for which work has not been performed and excludes unexercised contract options. The Company expects to satisfy its backlog, which represents the remaining unsatisfied performance obligation on contracts as of March 31, 2026, within one year. The Company has elected the practical expedient that allows it to omit disclosure of remaining performance obligations for contracts with an original expected duration of one year or less. Although backlog reflects business that is considered to be firm, cancellations, deferrals or scope adjustments may occur. Backlog is adjusted to reflect any known project cancellations, revisions to project scope and cost and project deferrals, as appropriate. 12 8. SEGMENT REPORTING The Company’s Chief Operating Decision Maker (CODM) as defined under GAAP, who is the Company’s Chief Financial Officer and Chief Executive Officer , has determined that the Company’s operations are currently organized into three segments: Construction, Software-as-a-Service (“SaaS”) and Oil and Gas. The Company allocates to segment results the operating expenses payroll and related expenses, general and administrative , marketing and business development, and pre-project costs based on usage, which is generally reflected in the segment in which the costs are incurred. These segments reflect the way our CODM evaluates the Company’s business performance and manages its operations. The Construction segment includes the Company’s manufacturing unit and other modular projects. The SaaS segment consists primarily of Machfu and its related industrial IoT products and services. The oil and gas segment reflects the operations of Olenox Corp. Corporate consists of general corporate expenses such as our executive office; the corporate finance, accounting, tax, human resources, risk management, information technology, marketing, and legal groups; corporate overhead and other items not allocated to any of the Company’s segments. From time to time, the Company revises the measurement of each segment’s cost of revenue and operating expenses, including any corporate overhead allocations, as determined by the information regularly reviewed by the CODM. The CODM continually reviews a monthly statement of operations separated by segment, along with an analysis of the significant segment expenses as described below. Information for the Company’s segments, as well as for Corporate and support, is provided in the following table: Construction SaaS Oil and Gas Corporate Consolidated Three Months Ended March 31, 2026 Revenue $ 100,471 $ 25,548 $ 159,293 $ — $ 285,313 Significant segment expenses: Costs of revenue: Direct labor 6,746 — — 1,031 7,777 Materials 78,655 — — — 78,655 Allocated overhead 5,988 — — — 5,988 Other costs of revenue 43,998 10,158 — 99,744 153,900 Lease and well operating costs — — 239,826 — 239,826 Total costs of revenue 135,387 10,158 239,826 100,775 486,146 Operating expenses: Payroll and related 74,853 20,609 — 596,918 692,380 Professional fees — — — 516,098 516,098 General and administrative 115,519 196,686 — 1,161,598 1,473,803 Total operating expenses 190,372 217,295 — 2,274,614 2,682,281 Operating income (loss) ( 225,288 ) ( 201,905 ) ( 80,533 ) ( 2,375,388 ) ( 2,883,114 ) Other expense (income) 149,884 30,461 — ( 397,735 ) ( 217,390 ) Loss before income taxes ( 375,172 ) ( 232,366 ) ( 80,533 ) ( 1,977,653 ) ( 2,665,724 ) Provision for income taxes — — — — — Net loss $ ( 375,172 ) $ ( 232,366 ) $ ( 80,533 ) $ ( 1,977,653 ) $ ( 2,665,724 ) Total assets $ 9,061,447 $ 19,077,273 $ 3,923,164 $ 3,338,892 $ 35,400,776 Depreciation and amortization $ 42,621 $ 121,846 $ 81,425 $ 80,392 $ 326,284 Capital expenditures $ 46,643 $ — $ — $ — $ 31,643 13 Construction Medical Corporate and support Oil and Gas Consolidated Three Months Ended March 31, 2025 Revenue $ 496,079 $ — $ — $ 70,275 $ 566,354 Significant segment expenses: Costs of revenue: Direct labor 188,093 — — — 188,093 Materials 144,874 — — — 144,874 Allocated overhead 480,348 — — — 480,348 Other costs of revenue 41,151 — — 35,643 76,794 Total costs of revenue 854,466 — — 35,643 890,109 Operating expenses: Payroll and related — — 439,869 115,869 555,738 Professional fees — — 602,642 — 602,642 Other expenses 1,066 827 140,285 207,669 349,847 Total operating expenses 1,066 827 1,182,796 323,538 1,508,227 Operating loss ( 359,453 ) ( 827 ) ( 1,182,796 ) ( 288,906 ) ( 1,831,982 ) Other expense ( 150,375 ) — ( 712,557 ) ( 51,754 ) ( 914,686 ) Net loss $ ( 509,828 ) $ ( 827 ) $ ( 1,895,353 ) $ ( 340,660 ) $ ( 2,746,668 ) Total assets, as restated (Note 3) $ 4,701,547 $ 1,406 $ 456,097 $ 28,236,577 $ 33,395,626 Depreciation and amortization $ 45,584 $ — $ 15,678 $ 45,913 $ 107,175 9. EARNINGS PER SHARE Basic net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares consist of the common shares issuable upon the exercise of stock options and warrants. Potentially dilutive common shares are excluded from the calculation if their effect is antidilutive. Because the Company had a net loss for the three months ended March 31, 2026, it is prohibited from including potential common shares in the computation of diluted per share amounts. Accordingly, the Company has used the same number of shares outstanding to calculate both the basic and diluted loss per share. The table below reflect the potentially dilutive securities excluded from the Company’s earnings per share calculation: March 31, 2026 March 31, 2025 Common stock options 3 3 Restricted common stock units 714 738 Common stock warrants 9,736 9,781 Preferred stock 141,639 — Convertible notes payable 12,982 — Total potentially dilutive securities 165,074 10,522 14 10. STOCKHOLDERS’ EQUITY Sale of Series C Preferred Stock During the three months ended March 31, 2026, the Company sold 1,800 shares of its Series C Convertible Preferred Stock, with a stated value of $ 1,000 per share, for aggregate net proceeds of $ 1,547,800 . Conversions of Series C Preferred Stock During the three months ended March 31, 2026, holders of the Company’s Series C Convertible Preferred Stock converted 1,711 shares of Series C Preferred Stock into an aggregate of 122,990 shares of common stock in accordance with the terms of the certificate of designations. Exchange of Series A Preferred Stock In February 2026, the Company issued 58,500 shares of common stock in exchange for the surrender of 39,000 shares of Series A Preferred Stock held by its Chief Executive Officer, a related party. The reacquisition of the preferred stock was accounted for as an equity transaction, and no gain or loss was recognized in the condensed consolidated statements of operations. The excess of the fair value of the common shares issued over the carrying amount of the preferred stock surrendered, amounting to $ 395,967 , was recorded as a deemed dividend and is deducted from net loss in computing net loss attributable to common stockholders. Settlement of Notes Payable and Due to Affiliates As described in Note 6, during the three months ended March 31, 2026, the Company issued an aggregate of 147,281 shares of common stock in settlement of notes payable and amounts due to affiliates. Stock-Based Compensation During the three months ended March 31, 2026, the Company recognized stock-based compensation expense of $ 222,066 , consisting of $ 28,215 related to the vesting of restricted stock units and $ 193,851 related to the issuance of 18,462 shares of common stock for services. During the three months ended March 31, 2026, 6,328 shares of common stock were issued in connection with the vesting of restricted stock units. During the three months ended March 31, 2025, the Company recognized stock-based compensation expense of $ 106,298 . 11. COMMITMENTS AND CONTINGENCIES Legal Proceedings The Company is subject to certain claims and lawsuits arising in the normal course of business. The Company assesses liabilities and contingencies in connection with outstanding legal proceedings utilizing the latest information available. Where it is probable that the Company will incur a loss and the amount of the loss can be reasonably estimated, the Company records a liability in its condensed consolidated financial statements. These legal accruals may be increased or decreased to reflect any relevant developments on a quarterly basis. Where a loss is not probable or the amount of the loss is not estimable, the Company does not record an accrual, consistent with applicable accounting guidance. Based on information currently available, advice of counsel, and available insurance coverage, the Company believes that the established accruals are adequate and the liabilities arising from the legal proceedings will not have a material adverse effect on its consolidated financial condition, results of operations and cash flows. However, that in light of the inherent uncertainty in legal proceedings there can be no assurance that the ultimate resolution of a matter will not exceed established accruals. As a result, the outcome of a particular matter or a combination of matters may be material to the results of operations and cash flows for a particular period, depending upon the size of the loss or the income for that particular period. 15 Pizzarotti Litigation On or about August 10, 2018, Pizzarotti, LLC (“Pizzarotti”) filed a complaint against the Company and Mahesh Shetty, the Company’s former President and CFO, and others, seeking unspecified damages for an alleged breach of contract by the Company and another entity named Phipps & Co. (“Phipps”). The lawsuit was filed as Pizzarotti, LLC. v. Phipps & Co., et al., Index No. 653996/2018 and commenced in the Supreme Court of the State of New York for the County of New York. On or about April 1, 2019, Phipps filed cross-claims against the Company and Mr. Shetty asserting claims for indemnification, contribution, fraud, negligence, negligent misrepresentation, and breach of contract. SG Blocks has likewise cross claimed against Phipps for indemnification and contribution, claiming that any damages to the Plaintiff were the result of the acts or omissions of Phipps and its principals. Pizzarotti’s suit arose from a contract dated April 3, 2018 that it executed with Phipps whereby Pizzarotti, a construction manager, engaged Phipps to perform stone procuring and tile work at a construction project located at 161 Maiden Lane, New York 10038. Pizzarotti’s claims against the Company arise from a purported assignment agreement dated August 10, 2018, whereby Pizzarotti claims that the Company agreed to assume certain obligations of Phipps under a certain trade contract between Pizzarotti and Phipps. Phipps claims against the Company arise from a purported Assignment Agreement, dated as of May 30, 2018, between Pizzarotti, Phipps and the Company (the “Assignment Agreement”), pursuant to which, it is alleged, that the Company agreed to provide a letter of credit in connection with the sub-contracted work to be provided by Phipps to Pizzarotti. The Company believes that the Assignment Agreement was void for lack of consideration and moved to dismiss the case on those and other grounds. On June 17, 2020, the New York Supreme Court entered an order dismissing certain claims against the Company brought by cross claimant Phipps. Specifically, the court dismissed Phipps claims for indemnification, contribution, fraud, negligence and negligent misrepresentation. However, the court did not dismiss Phipps claim for breach of the Assignment Agreement. The issue of the validity of the Assignment Agreement, and the Company’s defenses to the claims brought by the plaintiff Pizzarotti and cross claimant Phipps, are being litigated. The Company maintains that the Assignment Agreement, to the extent valid and enforceable, was properly terminated and/or there are no damages, and, consequently, that the claims brought against the Company are without merit. The Company intends to continue to vigorously defend the litigation. The parties have engaged in written discovery but no depositions have been conducted as of yet. By motion dated February 24, 2021, Pizzarotti moved to stay the entire action pending the outcome of a separate litigation captioned Pizzarotti, LLC v. FPG Maiden Lane, LLC et. al., Index No. 651697/2019, involving some of the same parties (but excluding the Company). Phipps cross moved to consolidate the two actions. The Company opposed both motions. On April 26, 2021, the court denied both motions and directed the parties to meet and confer concerning the scheduling of depositions. On May 10, 2021, the parties jointly filed with the court a proposed order providing the completion of depositions of all parties and non-parties by September 30, 2021. On April 4, 2024, the court entered an order setting forth the following dates for the completion of the parties depositions: (1) deposition of plaintiff shall occur by May 31, 2024, (2) deposition of Phipps shall occur by June 30, 2024, (3) deposition of the Company shall occur by July 20, 2024, (4) deposition of Mr. Shetty shall occur by August 9, 2024, (5) deposition of FPG Maiden Lane, & J. Landau shall occur by August 30, 2024, and (6) depositions of non-parties shall occur by September 30, 2024. Litigation is subject to many uncertainties, and the outcome of this action is not predicted with assurance. The Company is currently unable to predict the outcome or possible recovery or loss or range of loss, if any, associated with the resolution of this litigation, and, accordingly, the Company has made no provision related to this matter in the accompanying condensed consolidated financial statements. CPF GP 2019-1, LLC Litigation In September 2023, a suit was filed in the form of a declaratory judgment to say CPF GP did not owe certain monies to the Company. The Company filed counterclaims for the amounts owed. The case settled in February 2024 in exchange for mutual dismissals and monthly payments of the balance due, which is $ 745,000 in total to the Company from CPF GP. To date, the Company has not received monthly payments and has not recorded this gain. 16 Farnam Litigation In October 2023, Farnam Street Financial, Inc. (“Farnam”) filed suit against the Company in the United States District Court for the District of Minnesota (Case No. 23-CV-3212) alleging breaches by the Company under a certain lease agreement between Farnam and the Company dated as of October 13, 2021. Farnam sought monies owed under such lease agreement. On August 1, 2024, the Company, SG Echo and SG Environmental Solutions Corp. (“SG Environmental”), a wholly owned subsidiary of the Company, entered into a settlement agreement (the “Settlement”) with Farnam to resolve the pending litigation. Simultaneously with the execution of the Settlement, (i) the Company, SG Environmental and Farnam entered into an assignment and assumption agreement, pursuant to which SG Environmental was substituted for the Company as the lessee under the lease agreement, and (ii) SG Environmental and Farnam executed a new Lease Schedule No. 001R (Schedule 1R), which replaced the prior schedule in its entirety. The terms of the Settlement included the following: (i) SG Environmental will be the signatory as the Lessee under the lease; (ii) the initial term (the Initial Term) of Schedule 1R is 18 months; (iii) the Commencement Date of Schedule 1R is August 1, 2024; (iv) the original cost of the equipment subject to Schedule 1R is $ 1,556,163.00 ; (v) so long as there has been no default under the lease and Schedule 1R, SG Environmental shall have the option to purchase the equipment at the end of the Initial Term for thirty-five percent ( 35 %) of the original cost of the equipment, or $ 544,657.05 , plus applicable taxes; (vi) the Monthly Lease Charge under Schedule 1R is $ 65,880.95 , plus applicable taxes; and (vii) SG Environmental shall provide a new security deposit under Schedule 1R in the amount of $ 167,056.00 , which shall be paid on or before August 1, 2024. Simultaneously with the execution of the Settlement, the Company and SG Echo executed a guaranty, whereby each of the Company and SG Echo jointly and severally guarantee SG Environmentals’ full and prompt payment and performance under the lease and Schedule 1R. Per the Settlement, Farnam shall retain as income all prior payments from the Company (or any Company affiliate) under the lease, the prior schedule, or any other agreement with the Company or its affiliates, including all monthly lease charges, interim rent, taxes, interest, fees, late charges, and any security deposits, including the deposit under the prior schedule. Under the terms of the Settlement, Farnam and the Company each agree to waive and release any and all claims against the other, except with respect to each party’s performance under the Settlement and each partys future obligations under the lease, Schedule 1R and guaranty agreements. The case remains ongoing as disputes have arisen post-Settlement between the Company and Farnam. As of March 31, 2026, the Company cannot estimate any potential loss, besides the original amounts of approximately $ 1.5 million which are included in accounts payable and accrued expenses on accompanying condensed consolidated balance sheets. American Express Litigation In December 2023, American Express Travel Related Services Company, Inc. (AMEX) filed suit against the Company in the Supreme Court of the State of New York, County of New York (Case No. 162231/2023) alleging breaches of a commercial credit card agreement between AMEX and the Company, dated as of November 8, 2022. AMEX sought monies owed under the commercial credit card agreement, with a balance of $ 232,218.94 as of the commencement of the action. In August 2024, AMEX filed a Motion for Default Judgment, which was granted by the court on or about September 19, 2024, for the amount of damages requested in AMEXs motion. As of March 31, 2026, the estimated potential loss to the Company is approximately $ 232,000 which is included in accounts payable and accrued expenses on accompanying condensed consolidated balance sheets. Choctaw Litigation In March 2024, the Choctaw Nation of Oklahoma (“Choctaw Nation”) filed suit against SG Echo and the Company in the District Court of Bryan County, State of Oklahoma (Case No. CJ-2024-41) alleging: (a) breaches by SG Echo under a certain commercial lease agreement between SG Echo and the Choctaw Nation related to commercial property located at 2917 Big Lots Road, Durant, Oklahoma 74701; and (b) declaratory and injunctive relief relating to certain cranes, declaring the Choctaw Nation to be the owner of the cranes and not SG Echo. The Company disputes the Choctaw Nations allegations. As of March 31, 2026, the case remains pending. As of March 31, 2026, the estimated potential loss to the Company is approximately $ 138,000 which is included in accounts payable and accrued expenses on accompanying condensed consolidated balance sheets. 17 Durant Industrial Authority Litigation In November 2024, the filed suit against the Company, SG Echo, and among others, alleging breaches by the Company and SG Echo under a certain forgivable promissory note executed between SG Echo as the borrower and the Authority as the lender in the principal sum of $ 750,000 , the Forgivable Note. The indebtedness under the Forgivable Note would be forgiven in three separate phases based upon the schedule set forth in the Forgivable Note. The Authority’s allegations include, among others, that due to SG Echos’ alleged breaches, the Forgivable Note is no longer forgivable and has been accelerated and is due in full. The Company and SG Echo dispute the Authority’s allegations. As of March 31, 2026, the case remains pending. As of March 31, 2026, the Company cannot estimate any additional potential loss, however as of March 31, 2026, the $ 750,000 is included in short-term notes payable on the accompanying condensed consolidated balance sheets. Rulien Litigation In March 2024, Rulien Advisors, LLC (“Rulien”) filed a lawsuit against the Company in the Supreme Court of the State of New York, Commercial Division, Kings County (Case No. 506426/2024), alleging breaches of a consulting agreement dated December 17, 2018 (the “Consulting Agreement”), pursuant to which the Company engaged Rulien as a non-exclusive independent sales representative to promote the sale of, and solicit orders for, the Company’s products and services. Rulien alleges that it is entitled to commissions totaling $ 1,373,750 in connection with (i) the alleged sale of property located at 1900 American Drive, Lago Vista, Texas, and (ii) the Company’s spin-off of its wholly owned subsidiary, Safe and Green Development Corporation, into a separately publicly traded company. On June 24, 2026, the court entered a default judgment against the Company. The Company has retained litigation counsel and will shortly file a motion to vacate the default judgment. The Company disputes Rulien’s claims and intends to vigorously defend the matter. At this time, the Company is unable to reasonably estimate the possible loss or range of loss, if any, associated with this matter. Accordingly, no liability has been recorded in the accompanying condensed consolidated financial statements. Caliber Litigation In June 2024, Caliber Corporate Advisers, LLC (“Caliber”) filed suit against the Company in the Supreme Court of the State of New York, County of New York (Case No. 652893/2024) alleging breaches of a Consulting Services Agreement between Caliber and the Company (the “Services Agreement”), alleging a balance owed of $ 46,350 . The Company disputes Caliber’s claims, and claims that Caliber failed to provide meaningful services as set forth in the Services Agreement. As of March 31, 2026, the case remains pending. As of March 31, 2026, the Company cannot estimate any potential loss. MDisrupt Litigation In August 2024, MDisrupt, Inc. (“MDisrupt”) filed suit against Safe and Green Medical Corporation (“SG Medco”) and the Company in the 353rd District Court of Travis County, Texas (Case No. D-1-GN-24-003213) alleging breaches of a consulting services agreement between SG Medco and MDisrupt entered into on or about September 20, 2023 (the “MDisrupt Services Agreement”), alleging a balanced owed of $ 183,901 . SG Medco and the Company dispute MDisrupt’s allegations. Further, the Company was not party to the MDisrupt Services Agreement. As of March 31, 2026, the case remains pending. As of March 31, 2026, the estimated potential loss to the Company is $ 183,901 which is included in accounts payable and accrued expenses on accompanying condensed consolidated balance sheets. 18 Prakash Chakravarthi Arbitration In April 2026, Prakash Chakravarthi (“Prakash”) filed a complaint and demand for arbitration against NAHD, Olenox, and the Company in Dallas, Texas alleging breaches of the Plan and Agreement of Reorganization (“PAR Agreement”), dated November 8, 2024, by and among NAHD and the shareholders of Machfu, alleging unpaid bank loans and a credit card of Machfu of approximately $ 513,000 , of which Prakash is the personal guarantor. The Company disputes Prakash’s claims and claims that Prakash breached the applicable representations and warranties set forth in the Agreement. As of March 31, 2026, the estimated potential loss to the Company is $ 513,000 , which is included in accounts payable and accrued expenses on accompanying condensed consolidated balance sheets. Machfu Employees Litigation In April 2026, Prakash Chakravarthi, Minakshisundaran Anand, Bharath Kishan, Ajinkya Wakhale, Karen Shariati, and Stanislav Bobovych (collectively, the “Machfu Employees”) filed suit against Machfu, NAHD, Olenox., and the Company in the United States District Court for the District of Maryland (Case No. 26-cv-01614-PX) alleging unpaid wages, retaliatory termination, among others. The Company disputes the claims made by the Machfu Employees. The Company believes that Machfu has suffered significant harm as a direct result of the actions of Machfu Employees, resulting in lost revenues. The Company is preparing its answer and counterclaims. The estimated potential loss to the Company is $ 107,783.57 , which is included in accounts payable and accrued expenses on the condensed consolidated balance sheets. Sara Garcia Litigation In March 2026, Sara Garcia (“Ms Garcia”) filed a Statement of Claim against Giant and the Company in the Ontario Superior Court of Justice (Court File No. CV-26-00005478-000) alleging wrongful dismissal in the amount of $ 186,666.67 , breach of contract, accrued vacation pay, among others. The Company disputes Ms Garcia’s claims and shortly will be filing its statement of defence. The Company acquired Giant on or about December 18, 2025. Ms Garcia was an employee of Giant at the time of the acquisition. Ms. Garcia was terminated on February 3, 2026 due to Ms Garcia’s performance failures, failure to cooperate with superiors, failure to turn over access and control of Giant’s essential accounts to the Company, including Giant’s bank accounts, Giant’s internal software accounts, Giant’s external software accounts, Giant’s accounting software, among others. As of March 31, 2026, the Company cannot estimate any potential loss. SG Blocks, Inc. v HOLA Community Partners, et. al. On April 13, 2020, Plaintiff, SG Blocks, filed a Complaint against HOLA Community Partners (“HCP”), Heart of Los Angeles Youth, Inc. (“HOLA”) (HCP and HOLA are collectively referred to as the “HOLA Defendants”), and the City of Los Angeles (the “City”) in the United States District Court for the Central District of California, Case No. 2:20-cv-03432-ODW (“HOLA Action”). The Company asserted seven claims against the HOLA Defendants arising out of and related to the Heart of Los Angeles construction project in Los Angeles (the “HOLA Project”), to wit, for: (1) breach of contract; (2) conversion; (3) default and judicial foreclosure under the Agreement as a security agreement; (4) misappropriation of trade secrets under California Civil Code section 3426; (5) misappropriation of trade secrets under 18 U.S.C. 1836; and (6) intentional interference with contractual relations. On April 20, 2020, HOLA filed a separate action against the Company in the Los Angeles Superior Court arising out of the HOLA Project, asserting claims of (1) negligence; (2) strict products liability; (3) strict products liability, (4) breach of contract; (5) breach of express warranty; (6) violation of Business and Professions Code 7031(b); and (7) violation of California’s unfair competition law, Business and Professions Code section 17200 (UCL) (the “HOLA State Court Action”). The HOLA State Court Action was removed to the Central District of California and consolidated with the HOLA Action. On January 22, 2021, the Company filed a Third-Party Complaint in the HOLA Action against Third-Party Defendants Teton Buildings, LLC, Avesi Construction, LLC (Avesi Construction), and American Home Building and Masonry Corp for indemnity and contribution with respect to HOLAs claims. The Company has also notified its general liability carrier, Sompo International (“Sompo”), regarding coverage concerning HOLAs claims On February 25, 2021, the court entered an order dismissing the Company’s claims for (1) breach of contract; (2) conversion; (3) default and judicial foreclosure under the Agreement as a security agreement; (4) misappropriation of trade secrets under California Civil Code section 3426; (5) misappropriation of trade secrets under 18 U.S.C. 1836; but denied dismissal of the Company’s claims for intentional interference with contractual relations. The Court also denied the Company’s motion to dismiss HOLAs claims. 19 On March 12, 2021, the HOLA Defendants filed an answer to the Company’s complaint against it denying liability and asserting affirmative defenses. On March 12, 2021, the Company filed an answer to the HOLA Defendants First Amended Consolidated Complaint against it, denying liability and asserting affirmative defenses. On April 26, 2021, the Company and the HOLA Defendants filed a Joint Stipulation to Dismiss HOLA Community Partners Sixth Claim for Relief (violation of California Business and Professions Code 7031(b)), with prejudice, pursuant to Fed. R. Civ. P. 41(a)(1)(A)(ii). On July 23, 2021, the Company filed a First Amended Third-Party Complaint adding the following additional third-party defendants seeking, inter alia, contractual indemnity, equitable indemnity; and contribution: American Home Building and Masonry Corp. (American Home), Anderson Air Conditioning, L.P. (Anderson), Broadway Glass and Mirror, Inc. (Broadway), Marne Construction, Inc. (Marne), The McIntyre Company (McIntyre), Dowell & Bradley Construction, Inc. dba J R Construction (JR Construction), Junior Steel Co. (Junior Steel), Saddleback Roofing, Inc. (Saddleback), Schindler Elevator Corporation (Schindler), U.S. Smoke & Fire Corp. (U.S. Smoke), and FirstForm, Inc. (FirstForm) (collectively the” Additional Third Party Defendants”). On September 2, 2021, Schindler filed its answer to the First Amended Third-Party Complaint. On September 3, 2021, Junior Steel filed its answer to the First Amended Third-Party Complaint. On September 7, 2021, Anderson filed its answer to the First Amended Third-Party Complaint. On October 6, 2021, the McIntyre filed its answer to the First Amended Third-Party Complaint. On February 7, 2022, the Company filed a request for entry of a clerks default against the following defendants: American Home, Avesi Construction, Marne, FirstForm, JR Construction, Saddleback, and US Smoke. On February 9, 2022, the court entered a clerks default pursuant to Federal Rule 55 against the following defendants: American Home, Avesi Construction, JR Construction, Saddleback and U.S. Smoke. The parties that have answered and appeared in the case are currently engaged in discovery. The dispute between SG Blocks, HCP, and others in the above-described lawsuit settled, and a formal settlement agreement was executed in December 2022. In accordance with the settlement agreement, all funds to be paid were, in fact, paid. On February 27, 2023, the settling parties filed a Joint Stipulation to Dismiss All Causes of Action Against All Parties Except Avesi Construction and Saddleback. The claims against the settling parties, pursuant to the settlement, were to be dismissed and have since been dismissed. SG Blocks had taken defaults against Avesi Construction and Saddleback, and is continuing to pursue default judgments against same. On February 17, 2025, the Company executed a Settlement Agreement and Release with Saddleback, to release all claims between the parties. As part of the settlement, Saddleback agreed to pay a settlement payment of $ 400,000 . All of the settlement proceeds were refunded to the Company’s insurer Sompo, based on monies already paid out by Sompo in the underlying matter. As the matter is now settled, the parties will shortly move the court to dismiss the Saddleback matter. SG Blocks, Inc. v. EDI International, PC On June 21, 2019, SG Blocks filed a lawsuit against EDI International, PC (“EDI”), a New Jersey corporation, in connection with the parties consulting agreement dated June 29, 2016, pursuant to which EDI was to provide, for a fee, certain architectural and design services for the original project between the Company and the HOLA Project. The lawsuit is styled SG Blocks, Inc. v. EDI et al., and was filed in California Superior Court, for the County of Los Angeles, case no. 19STCV21725. SG Blocks claims that EDI, tortiously interfered with SG Blocks economic relationship with HCP and HOLA. The complaint seeks in excess of $ 1,275,754 in damages. EDI, filed a cross-complaint for alleged unpaid fees and tortious interference with EDI contractual relationship with HCP and HOLA. EDI cross-complaint seeks in excess of $ 30,428.71 in damages. On July 8, 2020, SG Blocks added PVE LLC as a defendant in the lawsuit, claiming PVE LLC is liable to the same extent as EDI. In May 2021, the parties settled EDI affirmative claims, and its cross-complaint was dismissed with prejudice on August 23, 2021. On SG Blocks remaining claims, trial was set for October 2024. On or about November 15, 2024, the Company received a jury verdict in its favour in the amount of $ 1.274 million against EDI styled as SG Blocks, Inc. v EDI et al, case no. 19STCV21725, which has been secured to a judgment. The case is currently proceeding through post-judgment motions and filings. There remains uncertainty whether the Company will be able to collect on the judgment. Crescendo Communications Litigation In December 2025, Crescendo Communications, LLC (“Crescendo”) filed suit against the Company in the Supreme Court of the State of New York, County of Nassau (Case No. 626903/2025) alleging breach of contract, dated as of March 8, 2023. On April 9, 2026, the court entered a default judgment dated January 30, 2026, in the amount of $ 243,521.69 . The Company has retained litigation counsel and will shortly file a motion to vacate the default judgment. The Company disputes Crescendo’s claims and intends to vigorously defend the matter. At this time, the Company is unable to reasonably estimate the potential loss or range of loss, if any, associated with this matter. Accordingly, no liability has been recorded in the accompanying condensed consolidated financial statements. 20 12. RELATED PARTY TRANSACTIONS As disclosed in Note 6, certain of the Company’s notes payable are held by related parties. As disclosed in Notes 6 and 10, during the three months ended March 31, 2026, the Company issued 62,333 shares of common stock in settlement of $ 338,662 of amounts due to affiliates of the Company’s chief executive officer, and issued 58,500 shares of common stock in exchange for 39,000 shares of Series A Preferred Stock held by the Company’s chief executive officer. As of March 31, 2026 and December 31, 2025, $ 1,242,772 and $ 1,498,205 , respectively, was due to the Company’s chief executive officer and affiliated entities. These advances are non-interest bearing and are payable upon demand. As of March 31, 2026 and December 31, 2025, accounts payable and accrued expenses include $ 358,670 of relocation costs due to the Company’s chief executive officer 13. SUBSEQUENT EVENTS Reverse Stock Split. On May 8, 2026, the Company effected a 1-for-10 reverse stock split of its then-outstanding common stock. All share and per share amounts set forth in these condensed consolidated financial statements have been recast to reflect the reverse stock split as if it had occurred as of the earliest period presented. Series C Preferred Stock Conversions. Subsequent to March 31, 2026, holders of the Company’s Series C Convertible Preferred Stock converted an additional 250 shares of Series C Preferred Stock into an aggregate of 44,694 shares of common stock. Series E Preferred Stock Conversions. Subsequent to March 31, 2026, holders of the Company’s Series E Convertible Preferred Stock converted shares of Series E Preferred Stock into an aggregate of 216,000 shares of common stock. SG Echo Chapter 11 Filing. On April 28, 2026, SG Echo LLC, a wholly owned subsidiary of the Company, filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Oklahoma. SG Echo continues to operate its business as a debtor-in-possession while pursuing a court-supervised reorganization. The Chapter 11 proceeding is limited to SG Echo and does not include the Company or its other subsidiaries. The Chapter 11 filing triggered an event of default under certain SG Echo debt agreements, including approximately $ 4.0 million owed to Enhanced Capital Oklahoma Rural Fund, LLC. On May 26, 2026, the Company acquired 100 % of the membership interests of CS Digital Ventures, LLC. The purchase consideration consisted of $ 30.0 million of upfront consideration, including $ 14.0 million in Series D Preferred Stock and a $ 16.0 million unsecured promissory note, warrants to purchase 1,500,000 shares of the Company’s common stock, and contingent consideration of up to $ 20.0 million in additional Series D Preferred Stock upon the achievement of specified revenue and Adjusted EBITDA milestones. Psylinks Neurotech Corp Acquisition. On July 3, 2026, the Company acquired 100 % of the outstanding shares of Psylinks Neurotech Corp. in exchange for 104,166 restricted shares of the Company’s common stock, valued at approximately $ 500,000 . The son of the Company’s Chief Executive Officer was a 50 % owner of Psylinks Neurotech Corp. and therefore this transaction represents a related party transaction. The Company is evaluating the accounting for the acquisition under ASC 805, Business Combinations, and the purchase price allocation is preliminary. 21