Safe & Green(US:SGBX)2019-03-28 22:14PART I Forward-Looking Statements Forward-looking statements in this report are subject to risks and uncertainties that could materially alter actual results - The report contains forward-looking statements about future operations, plans, and objectives, which are subject to numerous risks and uncertainties1416 - Factors that could cause actual results to differ include general economic, political, and financial conditions, ability to obtain financing, sales growth, competition, cybersecurity breaches, product adaptation, raw material availability, seasonality of construction, transportation disruptions, customer loss, product liability, employee retention, private investment attraction, goodwill impairment, regulatory impacts, legal proceedings, environmental costs, and tax rule changes14151618 - Readers are cautioned not to place undue reliance on forward-looking statements, which are based on current expectations and assumptions that could prove inaccurate14151618 Business Overview SG Blocks, Inc. specializes in sustainable modular construction using repurposed shipping containers for diverse commercial, industrial, and residential markets - SG Blocks is a leading design and construction firm utilizing code-engineered cargo shipping containers (SGBlocks™) and purpose-built modular units (SGPBMs) for sustainable construction2023 - Core Product Offerings: * GreenSteel™ modules: Structural core and shell, with SGB procuring containers, engineering openings, painting, and delivering for customer finish-out * Partially pre-fabricated containers: GreenSteel™ process plus installation of selected materials, finishes, and systems at SGB-licensed facilities * Completely fabricated and finished buildings: Turnkey solution including on-site erection and final steps, ready for occupancy - Operating Model: Combines product design with outsourcing of modifications and finish-out using proprietary algorithms, enabling economies of scale and high customer service - Competitive Strengths: Exclusive access to inventory, ICC-ESR certification, superior quality, lower cost, reduced construction time, hurricane/tornado/earthquake resistance, design flexibility, and experienced management team (130+ years combined experience) - Key Certification: Received ICC-ESR for SGBlocks™ structural building materials in April 2017, which is expected to expedite reviews and approvals by building departments and enhance market acceptance. Six of 18 facilities are currently approved to place the ICC-ES medallion202730333440 Customer Concentration (2017-2018) | Metric | 2018 | 2017 | | :----- | :--- | :--- | | Accounts Receivable from 2 customers | 76% | 81% | | Revenue from 2-3 customers | 66% | 80% | History and Company Overview Description of Business ESR Approval Target Markets Our Competitive Strengths Our Customers Our Suppliers Our Emergence from Bankruptcy Reverse Stock Split Public Offering of Common Stock Intellectual Property Government Regulation and Approval Employees Available Information Risk Factors This section outlines significant company-specific, business, and stock-related risks, including profitability, financing, personnel, and market acceptance challenges - Financial Risks: Recurring net losses ($4.84 million in 2018, $4.51 million in 2017) and negative operating cash flows ($3.45 million used in 2018, $1.24 million used in 2017) raise substantial doubt about the company's ability to continue as a going concern without increased sales or additional financing717273788081858691929699100102104107108111112113114116118122123125127128129131132150165354355359361 - Operational Risks: Dependence on key personnel, a few major customers (66% of 2018 revenue from three customers), and certain vendors for materials. Challenges in protecting proprietary manufacturing processes and managing growth effectively717273788081858691929699100102104107108111112113114116118122123125127128129131132150165354355359361 - Industry & Market Risks: Cyclical and seasonal nature of the construction industry, reliance on private investment and third-party financing for customers, intense competition, and uncertainty regarding market acceptance and growth of modular construction techniques717273788081858691929699100102104[107](index