SG Blocks Reports Second Quarter 2021 Financial Results

– Record Quarterly Revenue of approximately $11.9 Million, and First Half Revenue of approximately $21.0 Million –

– Significant Progress on Residential Development Projects –

– Company Expects to be Cash Flow Positive in the Fourth Quarter of 2021 –

– Management to Host Conference Call Today at 4:30 p.m. ET –

NEW YORK--(BUSINESS WIRE)-- SG Blocks, Inc. (Nasdaq: SGBX) (“SG Blocks” or the “Company”), a leading designer, innovator and fabricator of modular structures, today reported its financial results for the first quarter ending June 30, 2021.

“The second quarter was a momentous one for SG Blocks, as we achieved record quarterly revenues and made great strides in growing our activity across all verticals,” said Paul Galvin, SG Blocks’ Chairman and Chief Executive Officer. “In particular, we made substantial progress in our housing vertical, launching several new development opportunities where we anticipate earning revenue from both our interest in the projects and by fabricating the units at SG Blocks’ own manufacturing facilities. These announcements provide greater visibility into our earnings over the next several quarters and put us on track to achieve positive cash flow in the fourth quarter of 2021.

“Our goals over the coming quarters will be to execute at a high level on our existing projects, seek new investment opportunities and partners, and continuously expand our manufacturing capacity to support our accelerating pace of activity. We are capturing the benefits of significant tailwinds in the residential development business by helping to deliver much-needed residential units to alleviate a housing shortage across the country. In our health care vertical, we also continue to provide critical health infrastructure with our modular and rapidly deployable COVID testing modules.

“In short, we are making our own destiny and rethinking the way space and buildings are used. We’re continuing to close on developments and launching new projects and ventures each quarter. As our business has grown and our plan is unfolding, we have started to attract interesting, successful and notable partners, employees, and Board Members who share our passion for disrupting real estate and medical testing via safe and green modular solutions. We expect these efforts to pay off for our shareholders as we realize the value of these projects over time.”

Second Quarter 2021 and Subsequent Operational Highlights:

At June 30, 2021, the Company had 14 projects under contract, compared to 16 projects under contract at March 31, 2021. At June 30, 2021, the construction backlog was approximately $21 million, as compared to approximately $22.9 million as of March 31, 2021. The Company’s backlog does not include any projects related to recently launched SG Development Corp. and does not include ongoing medical testing.

As of June 30, 2021, SGB DevCorp. had active residential development projects for a total of 1,752 units.

Concentrated Market Activity

Medical Testing & Services

SG Blocks continues to provide innovative structures, labs, and testing solutions to support the fight against, and recovery from, the COVID-19 pandemic. The Company’s modular solutions can be quickly and efficiently deployed at key locations for much-needed point-of-care patient access, to support the continue reopening and recovery of the U.S. economy.

In May, the Company partnered with Stone Clinical Laboratories to bring COVID-19 testing to Miami’s South Beach area in connection with two events, Food Network’s annual Wine & Food Festival, as well as the Air & Sea Show & Music Explosion.

Also in May, the Company’s Chicago Area Testing subsidiary, in partnership with National Pain Centers, announced an agreement with the Robbins Park District of Robbins, IL to deploy a COVID-19 testing unit to provide health services to the underserved communities of the south suburbs of Chicago.

Manufacturing

After years of outsourcing, SG Blocks is committed to in-house manufacturing excellence. While there are a number of legacy project commitments that will be completed at a cash loss in 2021, going forward, the Company expects to manufacture future projects at a margin of approximately 15%.

SG Development Corporation

The Company formed SGB DevCorp. in February 2021 to deliver single family homes, townhomes, and for-rent apartment units across the country. The launch of SGB DevCorp. is expected to provide a host of benefits to SG Blocks, including: i) keeping manufacturing near 100% capacity to provide a steady and visible flow of manufacturing income, ii) participation in project fees, and; iii) potential profit from asset sales.

In May, SGB DevCorp. acquired a 50+acre site for its previously announced Lago Vista development, on Lake Travis, on the Colorado River in thriving Austin, Texas. The project is expected to consist of up to 225 one- and two-bedroom condominium units, as well as amenities including a community center, marina and health club. Development work is expected to commence in the second quarter of 2022, with an anticipated completion date in the fourth quarter of 2022. SG Blocks expects to capture approximately $25 million in manufacturing revenue over the life of the project. The Company also anticipates that its minority interest in the sale of the units will be no less than approximately $5.0 million as units are sold.

In June, the Company announced that SGB DevCorp. acquired a 50% membership interest to build a 138-unit, 125,000 square foot affordable housing community in East Point, GA within the Atlanta metropolitan area. The community will be known as “Norman Berry Village,” and the units will be constructed at the Company’s manufacturing facilities in Durant, OK and shipped to Atlanta. SGB DevCorp. has partnered with CMC Development Group, ZT Architecture & Land Development, and Community Development Consortium on the project. The Company expects to complete the project at a cost of approximately $15 million – $20 million. SGB DevCorp. will control the planning and construction process, and earn manufacturing revenue, as well as a share of development fees.

In June, the groundbreaking occurred on the previously announced Monticello Mews multifamily development project located in the Catskills region of New York. Upon completion, the development is expected to consist of 187 townhomes with one- and two-bedroom units, with amenities including a clubhouse, gym, and outdoor green spaces. The project is expected to be complete in the second quarter of 2023.

In June, the Company announced that SGB DevCorp. has acquired a 10% non-dilutable equity interest in JDI-Cumberland Inlet, LLC, a Georgia limited liability company, contributing $3,000,000 in capital to develop Cumberland Inlet, a 1,286 acre waterfront parcel in historic downtown St. Marys, Georgia. Modular housing units for the project will be produced at the Company’s manufacturing facilities in Durant, OK, with gross potential manufacturing revenues totaling approximately $180 million, making St. Marys SGB DevCorp.’s largest project to date. The development is expected to commence site work in the fourth quarter of 2021, with initial deliveries of modular units expected in third quarter of 2022.

Second Quarter 2021 Financial Highlights:

  • Revenue for the second quarter 2021 was $11.9 million, compared to approximately $630,000 for the second quarter of 2020. The record revenue was achieved despite having several commercial projects that were previously announced being delayed directly and indirectly by the COVID-19 pandemic.
  • Gross profit for the second quarter 2021 was $2.8 million, compared to a gross profit of approximately $370,000 in the second quarter 2020.
  • Operating expenses for the second quarter 2021 were $2.8 million, compared to approximately $1.2 million in the second quarter 2020. Included in second quarter 2021 are one-time start-up costs associated with the multiple closings as well as increased G&A costs related to the hiring of the talent needed to execute our robust backlog and pipeline.
  • For the second quarter 2021, net loss attributable to common shareholders was $1.5 million, or negative ($0.17) per share, compared to a net loss of approximately $840,000, or negative ($0.16) per share, in the second quarter 2020. The net loss attributable to common shareholders includes the following items:
    • Approximately $465,000 in non-cash depreciation and amortization expenses, non-cash stock compensation expense and litigation expenses as explained in the adjusted EBITDA loss;
  • Adjusted EBITDA loss for the second quarter 2021 was $1.1 million], compared to a loss of $530,000 in the second quarter 2020.
  • At June 30, 2021, the Company had total assets of approximately $25.5 million, compared to approximately $22.3 million at June 30, 2020.
  • The Company had cash and cash equivalents of approximately $2.3 million as of June 30, 2021, compared to approximately $10.5 million at March 31, 2021.
  • The reduction in cash is due to investments in development projects totaling $3.35 million and the acquisition of development land of $3.5 million in the second quarter of 2021.
  • Strong liquidity with cash and accounts receivable (due in less than 30 days) at $6.3 million as of August 13.

Conference Call Information

SG Blocks will host a conference call on Monday, August 16, 2021 at 4:30 p.m. Eastern Time to share its results for the quarter ended June 30, 2021.

Date: Monday, August 16, 2021

Time: 4:30 p.m. ET, 1:30 p.m. PT

Toll-free dial-in number: 1-877-407-9716

International dial-in number: 1-201-493-6779

Conference ID: 13722143

Additionally, a webcast of the conference call will be broadcast live and available for replay at the Investors section of the Company’s website at www.sgblocks.com.

A replay of the conference call will be available after 7:30 p.m. Eastern time through August 30, 2021.

Toll-free replay number: 1-844-512-2921

International replay number: 1-412-317-6671

Replay ID: 13722143

Use of Non-GAAP Financial Information

In addition to its results under GAAP, the Company presents 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. The Company calculates EBITDA as net income (loss) before interest expense, income tax benefit (expense), depreciation and amortization. It calculates Adjusted EBITDA as EBITDA before certain non-recurring adjustments such stock-based compensation expense. EBITDA and Adjusted EBITDA are presented because they are important metrics used by management as one of the means by which it assesses the Company’s financial performance. EBITDA and Adjusted EBITDA are also frequently used by analysts, investors and other interested parties to evaluate companies in the Company’s 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 the Company and its results of operations.

EBITDA and Adjusted EBITDA have certain limitations. EBITDA and Adjusted EBITDA should not be considered as alternatives to net income (loss), or any other measures of financial performance derived in accordance with GAAP. These measures also should not be construed as an inference that the Company’s future results will be unaffected by unusual or non-recurring items for which these non-GAAP measures make adjustments. Additionally, EBITDA and Adjusted EBITDA are not intended to be liquidity measures because of certain limitations, including, but not limited to: i) they do not reflect the Company’s cash outlays for capital expenditures; They do not reflect changes in, or cash requirements for, working capital; and Although depreciation and amortization are non-cash charges, the assets are being depreciated and amortized and may have to be replaced in the future, and these non-GAAP measures do not reflect cash requirements for such replacements.

The non-GAAP information should be read in conjunction with the Company’s consolidated financial statements and related notes.

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

In evaluating EBITDA and Adjusted EBITDA, you should be aware that in the future we will incur expenses that are the same or similar to some of the adjustments made in our calculations, and our presentation of EBITDA and Adjusted EBITDA should not be construed to mean that our future results will be unaffected by such adjustment. Management compensates for these limitations by using EBITDA and Adjusted EBITDA as supplemental financial metrics and in conjunction with our results prepared in accordance with GAAP. The non-GAAP information should be read in conjunction with our consolidated financial statements and related notes.

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

 

 

Three Months Ended
June 30, 2021

 

 

Three Months Ended
June 30, 2020

 

 

Six Months Ended
June 30, 2021

 

 

Six Months Ended
June 30, 2020

 

Net loss attributable to common stockholders of SG Blocks, Inc.

 

$

(1,541,259

)

 

$

(837,973

)

 

$

(3,575,136

)

 

$

(1,585,400

)

Addback interest expense

 

 

329

 

 

 

3,452

 

 

 

692

 

 

 

6,263

 

Addback interest income

 

 

(13,797

)

 

 

(6,233

)

 

 

(31,267

)

 

 

(11,096

)

Addback depreciation and amortization

 

 

159,227

 

 

 

47,401

 

 

 

301,020

 

 

 

94,802

 

EBITDA (non-GAAP)

 

 

(1,395,500

)

 

 

(793,353

)

 

 

(3,304,691

)

 

 

(1,495,431

)

Addback litigation expense

 

 

60,053

 

 

 

131,102

 

 

 

141,272

 

 

 

267,840

 

Addback stock compensation expense

 

 

246,236

 

 

 

129,750

 

 

 

532,422

 

 

 

168,514

 

Adjusted EBITDA (non-GAAP)

 

$

(1,089,211

)

 

$

(532,501

)

 

$

(2,630,997

)

 

$

(1,059,077

)

About SG Blocks:

SG Blocks, Inc. is a premier innovator in advancing and promoting the use of code-engineered cargo shipping containers for safe and sustainable construction. The firm offers a product that exceeds many standard building code requirements, and also supports developers, architects, builders and owners in achieving greener construction, faster execution, and stronger buildings of higher value. Each project starts with GreenSteelTM, the structural core and shell of an SG Blocks building, and then is customized to client specifications. For more information, visit www.sgblocks.com.

Safe Harbor Statement

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements can be identified by terminology such as "may," "should," "potential," "continue," "expects," "anticipates," "intends," "plans," "believes," "estimates," and similar expressions. These forward-looking statements are based on management's expectations and assumptions as of the date of this press release and include statements regarding the Company being on track to achieve positive cash flow in the fourth quarter of 2021, the Company’s efforts paying off for our shareholders as the value of these projects is realized over time, the Company manufacturing future projects at a margin of approximately 15%, the launch of SGB DevCorp. providing a host of benefits to the Company, plans for the Lago Vista development, with development work is expected to commence in the second quarter of 2022 and an anticipated completion date in the fourth quarter of 2022, plans to capture approximately $25 million in manufacturing revenue over the life of the Lago Vista project, the Company’s minority interest in the sale of the Lago Vista project units being no less than approximately $5.0 million as units are sold, plans for Norman Berry Village in the Atlanta metropolitan area, completing at a cost of approximately $15 to 20 million, plans for the Monticello Mews multifamily development project located in the Catskills region of New York, completing the Monticello Mews in the second quarter of 2023, plans for the Cumberland Inlet project, with gross potential manufacturing revenues totaling approximately $180 million, commencing commence site work on the Cumberland Inlet project in the fourth quarter of 2021, with initial deliveries of modular units expected in third quarter of 2022.. While SG Blocks believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to us on the date of this release. These forward-looking statements are subject to a number of risks and uncertainties, many of which are difficult to predict that could cause actual results to differ materially from current expectations and assumptions from those set forth or implied by any forward-looking statements. Important factors that could cause actual results to differ materially from current expectations include, among others, the Company’s ability to achieve positive cash flow in the fourth quarter of 2021, the Company’s ability realize the value of its projects over time, the Company’s ability to manufacture future projects at a margin of approximately 15%, the Company’s ability to successfully complete its SGB DevCorp. projects, the Company’s ability to complete the Lago Vista development as planned and capture approximately $25 million in manufacturing revenue over the life of the project, the Company’s ability to complete the Norman Berry Village project in the Atlanta metropolitan area as planned, the Company’s ability to complete the Monticello Mews multifamily development project located in the Catskills region of New York as planned, the Company’s ability to complete the Cumberland Inlet project as planned, with gross potential manufacturing revenues totaling approximately $180 million,, the Company’s ability to position itself for future profitability, the Company’s ability to maintain compliance with the NASDAQ listing requirements, and the other factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and the Company’s subsequent filings with the SEC, including subsequent periodic reports on Forms 10-Q and 8-K. The information in this release is provided only as of the date of this release, and we undertake no obligation to update any forward-looking statements contained in this release on account of new information, future events, or otherwise, except as required by law.

 

SG BLOCKS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

 

 

 

June 30,
2021

 

 

December 31,
2020

 

 

 

(Unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,323,599

 

 

$

13,010,356

 

Accounts receivable, net

 

 

2,719,713

 

 

 

2,635,608

 

Contract assets

 

 

2,122,231

 

 

 

1,303,136

 

Inventories

 

 

1,409,915

 

 

 

778,144

 

Prepaid expenses and other current assets

 

 

553,975

 

 

 

570,775

 

Total current assets

 

 

9,129,433

 

 

 

18,298,019

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

7,177,533

 

 

 

2,683,014

 

Goodwill

 

 

1,309,330

 

 

 

1,309,330

 

Right-of-use asset

 

 

1,478,544

 

 

 

1,537,545

 

Long-term note receivable

 

 

701,233

 

 

 

682,637

 

Intangible assets, net

 

 

2,178,879

 

 

 

2,218,609

 

Deferred contract costs, net

 

 

132,552

 

 

 

152,944

 

Investment in and advances to equity affiliates

 

 

3,350,329

 

 

 

 

Total Assets

 

$

25,457,833

 

 

$

26,882,098

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

5,920,137

 

 

$

3,961,961

 

Contract liabilities

 

 

789,068

 

 

 

1,774,740

 

Lease liability, current maturities

 

 

435,608

 

 

 

326,654

 

Due to affiliates

 

 

381,770

 

 

 

965,561

 

Assumed liability

 

 

43,295

 

 

 

200,765

 

Other current liabilities

 

 

5,000

 

 

 

5,000

 

Total current liabilities

 

 

7,574,878

 

 

 

7,234,681

 

 

 

 

 

 

 

 

 

 

Lease liability, net of current maturities

 

 

1,042,232

 

 

 

1,209,594

 

Total liabilities

 

 

8,617,110

 

 

 

8,444,275

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $1.00 par value, 5,405,010 shares authorized; none issued or outstanding

 

 

 

 

 

 

Common stock, $0.01 par value, 25,000,000 shares authorized; 8,822,489 issued and outstanding as of June 30, 2021 and 8,596,189 issued and outstanding as of December 31, 2020

 

 

88,225

 

 

 

85,962

 

Additional paid-in capital

 

 

41,681,186

 

 

 

40,443,840

 

Accumulated deficit

 

 

(25,851,682

)

 

 

(22,276,546

)

Total SG Blocks, Inc. stockholders’ equity

 

 

15,917,729

 

 

 

18,253,256

 

Non-controlling interest

 

 

922,994

 

 

 

184,567

 

Total stockholders’ equity

 

 

16,840,723

 

 

 

18,437,823

 

Total Liabilities and Stockholders’ Equity

 

$

25,457,833

 

 

$

26,882,098

 

 

SG BLOCKS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

 

 

For the
Three
Months Ended
June 30,

 

For the
Three
Months Ended
June 30,

 

For the
Six
Months Ended
June 30,

 

For the
Six
Months Ended
June 30,

 

 

2021

 

2020

 

2021

 

2020

 

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

Revenue:

 

 

 

 

 

 

 

 

Construction services

$

2,064,438

 

$

534,526

 

$

5,202,153

 

$

623,867

 

Engineering services

 

4,059

 

 

94,423

 

 

98,008

 

 

203,838

 

Medical revenue

 

9,785,490

 

 

 

 

15,741,453

 

 

 

Total

 

11,853,987

 

 

628,949

 

 

21,041,614

 

 

827,705

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Construction services

 

3,164,695

 

 

193,208

 

 

7,258,235

 

 

265,119

 

Engineering services

 

32,197

 

 

61,508

 

 

41,967

 

 

142,372

 

Medical revenue

 

5,818,051

 

 

 

 

9,694,187

 

 

 

Total

 

9,014,943

 

 

254,716

 

 

16,994,389

 

 

407,491

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

2,839,044

 

 

374,233

 

 

4,047,225

 

 

420,214

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Payroll and related expenses

 

801,664

 

 

392,338

 

 

1,629,186

 

 

664,146

 

General and administrative expenses

 

1,888,162

 

 

766,750

 

 

3,349,518

 

 

1,258,064

 

Marketing and business development expense

 

72,438

 

 

30,899

 

 

143,065

 

 

63,237

 

Pre-project expenses

 

847

 

 

25,000

 

 

10,980

 

 

25,000

 

Total

 

2,763,111

 

 

1,214,987

 

 

5,132,749

 

 

2,010,447

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

75,933

 

 

(840,754

)

 

(1,085,524

)

 

(1,590,233

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(329

)

 

(3,452

)

 

(692

)

 

(6,263

)

Interest income

 

13,797

 

 

6,233

 

 

31,267

 

 

11,096

 

Other income

 

61,024

 

 

 

 

61,024

 

 

 

Total

 

74,492

 

 

2,781

 

 

91,599

 

4,833

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

150,425

 

 

(837,973

)

 

(993,925

)

 

(1,585,400

)

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

150,425

 

 

(837,973

)

 

(993,925

)

 

(1,585,400

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Add: net income attributable to noncontrolling interests

 

1,691,684

 

 

 

 

2,581,211

 

 

 

Net loss attributable to common stockholders of SG Blocks, Inc.

$

(1,541,259

)

$

(837,973

)

$

(3,575,136

)

$

(1,585,400

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share attributable to SG Blocks, Inc. - basic and diluted:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

$

(0.17

)

$

(0.16

)

$

(0.41

)

$

(0.48

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

8,822,278

 

 

5,369,132

 

 

8,783,806

 

 

3,278,913

 

 

SG BLOCKS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders’ Equity

 

 

 

$0.01 Par Value
Common Stock

 

 

Additional
Paid-in

 

 

Accumulated

 

 

 

SG Blocks
Stockholders'

 

 

Noncontrolling

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Equity

 

 

Interests

 

 

Equity

 

Balance at March 31, 2021

 

 

8,821,289

 

 

$

88,213

 

 

$

41,431,213

 

 

$

(24,310,423

)

 

$

17,209,003

 

 

$

1,074,094

 

 

$

18,283,097

 

Stock-based compensation

 

 

 

 

 

 

 

 

246,236

 

 

 

 

 

 

246,236

 

 

 

 

 

 

246,236

 

Conversion of warrants to common stock

 

 

1,200

 

 

 

12

 

 

 

3,737

 

 

 

 

 

 

3,749

 

 

 

 

 

 

3,749

 

Noncontrolling interest distribution

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,842,784

)

 

 

(1,842,784

)

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

(1,541,259

)

 

 

(1,541,259

)

 

 

1,691,684

 

 

 

150,425

Balance at June 30, 2021

 

 

8,822,489

 

 

$

88,225

 

 

$

41,681,186

 

 

$

(25,851,682

)

 

$

15,917,729

 

 

$

922,994

 

 

$

16,840,723

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2020

 

 

8,596,189

 

 

$

85,962

 

 

$

40,443,840

 

 

$

(22,276,546

)

 

$

18,253,256

 

 

$

184,567

 

 

$

18,437,823

 

Stock-based compensation

 

 

 

 

 

 

 

 

532,422

 

 

 

 

 

 

532,422

 

 

 

 

 

 

532,422

 

Conversion of warrants to common stock

 

 

226,300

 

 

 

2,263

 

 

 

704,924

 

 

 

 

 

707,187

 

 

 

 

 

 

707,187

 

Noncontrolling interest distribution

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,842,784

)

 

 

(1,842,784

)

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

(3,575,136

)

 

 

(3,575,136

)

 

 

2,581,211

 

 

 

(993,925

)

Balance at June 30, 2021

 

 

8,822,489

 

 

$

88,225

 

 

$

41,681,186

 

 

$

(25,851,682

)

 

$

15,917,729

 

 

$

922,994

 

 

$

16,840,723

 

 

 

$0.01 Par Value
Common Stock

 

 

Additional
Paid-in

 

 

Accumulated

 

 

 

SG Blocks
Stockholders'

 

 

Noncontrolling

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Equity

 

 

Interests

 

 

Equity

 

Balance at March 31, 2020

 

 

1,170,524

 

 

$

11,705

 

 

$

21,970,903

 

 

$

(18,331,244

)

 

$

3,651,364

 

 

$

 

 

$

3,651,364

 

Stock-based compensation

 

 

 

 

 

 

 

 

129,750

 

 

 

 

 

 

129,750

 

 

 

 

 

 

129,750

 

Conversion of restricted stock units to common stock

 

 

12,000

 

 

 

120

 

 

 

(120

)

 

 

 

 

 

 

 

 

 

 

 

 

Conversion of debt exchange to common stock

 

 

73,665

 

 

737

 

 

 

205,526

 

 

 

 

 

206,263

 

 

 

 

 

206,263

Issuance of common stock, net of issuance costs

 

 

7,340,000

 

 

 

73,400

 

 

 

17,045,080

 

 

 

 

 

 

17,118,480

 

 

 

 

 

 

17,118,480

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(837,973

)

 

 

(837,973

)

 

 

 

 

 

(837,973

)

Balance at June 30, 2020

 

 

8,596,189

 

 

$

85,962

 

 

$

39,351,139

 

 

$

(19,169,217

)

 

$

20,267,884

 

 

$

 

 

$

20,267,884

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2019

 

 

1,157,890

 

 

$

11,579

 

 

$

21,932,387

 

 

$

(17,583,817

)

 

$

4,360,149

 

 

$

 

 

$

4,360,149

 

Stock-based compensation

 

 

 

 

 

 

 

 

168,514

 

 

 

 

 

 

168,514

 

 

 

 

 

 

168,514

 

Conversion of restricted stock units to common stock

 

 

24,672

 

 

 

246

 

 

 

(246

)

 

 

 

 

 

 

 

 

 

 

 

 

Reverse stock split settlement

 

 

(38

)

 

 

 

 

 

(122

)

 

 

 

 

 

(122

)

 

 

 

 

 

(122

)

Conversion of debt exchange to common stock

 

 

73,665

 

 

737

 

 

 

205,526

 

 

 

 

 

206,263

 

 

 

 

 

206,263

Issuance of common stock, net of issuance costs

 

 

7,340,000

 

 

 

73,400

 

 

 

17,045,080

 

 

 

 

 

 

17,118,480

 

 

 

 

 

 

17,118,480

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(1,585,400

)

 

 

(1,585,400

)

 

 

 

 

 

(1,585,400

)

Balance at June 30, 2020

 

 

8,596,189

 

 

$

85,962

 

 

$

39,351,139

 

 

$

(19,169,217

)

 

$

20,267,884

 

 

$

 

 

$

20,267,884

 

 

SG BLOCKS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

 

 

 

For the

Six Months Ended
June 30,
2021

 

 

For the

Six Months Ended
June 30,
2020

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(993,925

)

 

$

(1,585,400

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation expense

 

 

198,398

 

 

 

1,848

 

Amortization of intangible assets

 

 

82,230

 

 

 

72,561

 

Amortization of deferred license costs

 

 

20,392

 

 

 

20,393

 

Bad debt expense

 

 

161,202

 

 

Interest income on long-term note receivable

 

 

(18,596

)

 

 

(11,096

)

Stock-based compensation

 

 

532,422

 

 

 

168,514

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(245,307

)

 

 

(483,067

)

Contract assets

 

 

(819,095

)

 

 

94,185

 

Inventories

 

 

(631,771

)

 

 

 

Prepaid expenses and other current assets

 

 

16,800

 

 

(203,096

)

Right of use asset

 

 

204,840

 

 

 

 

Accounts payable and accrued expenses

 

 

1,958,175

 

 

(235,858

)

Contract liabilities

 

 

(985,672

)

 

 

(20,106

)

Due to affiliates

 

 

(583,791

)

 

 

Lease liability

 

 

(204,246

)

 

 

 

Net cash used in operating activities

 

 

(1,307,944

)

 

 

(2,181,122

)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Advances in note receivable

 

 

 

 

(650,000

)

Purchase of property, plant and equipment

 

 

(4,692,918

)

 

 

Purchase of intangible asset

 

 

(42,500

)

 

 

 

Payment on assumed liability of acquired assets

 

 

(157,469

)

 

 

 

Investment in and advances to equity affiliates

 

 

(3,350,329

)

 

 

 

Net cash used in investing activities

 

 

(8,243,216

)

 

 

(650,000

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from conversion of warrants to common stock

 

 

707,187

 

 

 

 

Proceeds from public stock offering, net of issuance costs

 

 

 

 

 

17,118,480

 

Proceeds from long-term note payable

 

 

 

 

 

200,000

 

Distribution paid to noncontrolling interest

 

 

(1,842,784

)

 

 

 

Settlement of common stock from reverse stock split

 

 

 

 

(122

)

Net cash (used in) provided by financing activities

 

 

(1,135,597

)

 

 

17,318,358

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

(10,686,757

)

 

 

14,487,236

 

 

 

 

 

 

 

 

 

Cash and cash equivalents - beginning of period

 

 

13,010,356

 

 

 

1,625,671

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents - end of period

 

$

2,323,599

 

 

$

16,112,907

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of non-cash operating activities:

 

 

 

 

 

 

 

 

Non-cash conversion of long-term note payable to common stock

 

$

 

 

$

200,000

 

Non-cash conversion of accrued interest of long-term note payable to common stock

 

 

 

 

 

6,263

 

Total non-cash operating activities

 

$

 

 

$

206,263

 

 

Investors:
Stephen Swett
(203) 682-8377
investors@sgblocks.com

Source: SG Blocks, Inc.