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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Safe and Green Holdings Corporation | NASDAQ:SGBX | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.54 | -9.75% | 5.00 | 4.85 | 4.99 | 5.38 | 3.85 | 4.27 | 2,849,865 | 00:53:31 |
Management to Host Conference Call Today at 4:30 p.m. ET
SG Blocks, Inc. (Nasdaq: SGBX) (“SG Blocks” or the “Company”), a leading designer, innovator and fabricator of container-based structures, reported its financial results for the second quarter ended June 30, 2020.
Management Commentary
“Despite the challenges presented by the Covid 19 pandemic, in the second quarter SG Blocks was able to advance its core mission, raised a sufficient capital reserve for operations, and established a supply chain for the fabrication and distribution of container based medical laboratory services and diagnostic centers and the sale of Covid-19 tests,” commented Paul Galvin, CEO of SG, Blocks.
“The receipt of the final planning approval for Monticello Mews is a significant milestone that will help launch SG Residential, the Company’s licensee, which is also actively building in Puerto Rico,” Galvin added. “These royalty streams represent recurring revenue with the potential to earn substantial revenues from the three phases of this 300+ unit project.”
Galvin continued, ”We continued to sign new business throughout the year, the most notable of which was a $4 million manufacturing contract in the south Florida hospitality market. This contract alone potentially represents a 300% increase in revenue over the trailing 4 quarters.”
“The Distribution agreement with OSANG healthcare for its Covid 19 test, our product lines in the education and medical sectors with Grimshaw Architects and our ability to sell and distribute OSANG’s Gene Finder tests throughout North America are all designed to create recurring revenue for the Company,” Galvin continued. “Having access to Grimshaw’s unparalleled global supply chain greatly increases the number of addressable markets for our products.”
Galvin concluded, “We expect the efforts and progress in Q2 will serve as a catalyst for the rest of 2020 and into the new year.”
Second Quarter 2020 Financial Highlights:
Second Quarter 2020 and Subsequent Operational Highlights:
Second Quarter 2020 Financial Results
Revenue was approximately $629,000 compared to $728,000 in Q2 2019.
The Company’s backlog decreased to approximately $17.3 million as of June 30, 2020, as compared to approximately $17.6 million at December 31, 2019. The decrease in backlog is primarily attributable to work in progress or completed contracts during the first six months of 2020.
Gross profit was approximately $374,000 as compared to approximately $267,000 in Q2 2019.
Operating expenses decreased by approximately $24,000 to approximately $1.21 million in Q2 2020 compared to approximately $1.24 million in Q2 2019. The decrease was driven by a reduction in payroll and related expenses of approximately $253,000 and a reduction in marketing and business development expense of approximately $53,000, which was partially offset by an increase in general and administrative expenses, primarily due to higher legal fees and consulting expenses, of $260,000.
Net loss totaled approximately $838,000, or $(0.16) per basic and diluted share, compared to a net loss of approximately $972,000, or $(4.02) per basic and diluted share, in Q2 2019.
Adjusted EBITDA loss was approximately $533,000 compared to an Adjusted EBITDA loss of approximately $755,000 in Q2 2019. See below under the heading “Use of Non-GAAP Financial Information” for a discussion of Adjusted EBITDA and a reconciliation of such measure to the most comparable measure calculated under U.S. generally accepted accounting principles ("GAAP").
Balance Sheet
Cash and cash equivalents at June 30, 2020 totaled approximately $16.1 million, as compared to approximately $1.6 million at December 31, 2019.
Further details about the Company’s results will be available in its Quarterly Report on Form 10-Q, accessible in the investor relations section of the Company’s website at www.sgblocks.com and through the U.S. Securities and Exchange Commission’s website.
Conference Call Information
SG Blocks’ CEO, Paul Galvin, and Acting CFO, Gerald Sheeran, will host a listen only conference call.
To access the call, please use the following information:
Date:
Thursday, August 13, 2020
Time:
4:30 p.m. ET, 1:30 p.m. PT
Toll-free dial-in number:
1-844-407-9716
International dial-in number:
1-201-493-6779
Conference ID:
13708167
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Hayden IR at (646) 755-7412 or james@haydenir.com.
The conference call will be broadcast live and available for replay at http://public.viavid.com/index.php?id=141187 and via the investor relations section of the Company’s website at www.sgblocks.com.
A replay of the conference call will be available on August 13, 2020, after 7:30 p.m. Eastern time, through August 27, 2020.
Toll-free replay number:
1-844-512-2921
International replay number:
1-412-317-6671
Replay ID:
13708167
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:
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:
Three Months Ended June 30, 2020
Three Months Ended June 30, 2020
Six
Months Ended June 30, 2020
Six
Months Ended June 30, 2020
Net loss
$
(837,973
)
$
(971,709
)
$
(1,585,400
)
$
(1,462,444
)
Addback interest expense
3,452
-
6,263
-
Addback interest income
(6,233
)
-
(11,096
)
-
Addback depreciation and amortization
47,401
39,417
94,802
78,863
EBITDA (non-GAAP)
(793,353
)
(932,292
)
(1,495,431
)
(1,383,581
)
Addback Litigation Expense
131,102
-
267,840
-
Addback stock compensation expense
129,750
176,868
168,514
339,361
Adjusted EBITDA (non-GAAP)
$
(532,501
)
$
(755,424
)
$
(1,059,077
)
$
(1,044,220
)
About SG Blocks, Inc.
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 GreenSteel™, the structural core and shell of an SG Blocks building, and then 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 and includes statements such as the potential to earn substantial revenues from the three phases of the Monticello Mews 300+ unit project, the $4 million manufacturing contract in the south Florida hospitality market potentially representing a 300% increase in revenue over the trailing 4 quarters, the efforts and progress in Q2 serving as a catalyst for the rest of 2020 and into the new year, finishing construction of the Planet Smoothie container-based structure in Q3 2020, and the “MoLiving” mobile hospitality prototype project for Arizona Investissements being on track to be completed in Q3 2020. These forward-looking statements are based on management's expectations and assumptions as of the date of this press release and 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 generate revenues as expected from the three phases of the Monticello Mews 300+ unit project, the Company’s ability to generate revenues as expected from the $4 million manufacturing contract in the south Florida hospitality market, the Company’s ability to build on the efforts and progress in Q2 for the rest of 2020 and into the new year, the Company’s ability to complete construction of the Planet Smoothie container-based structure as scheduled, the Company’s ability to complete construction of the “MoLiving” mobile hospitality prototype project for Arizona Investissements as scheduled, the Company’s ability to achieve positive outcomes from the license of its residential technology, the Company’s ability to successfully distribute and generate revenue from the GeneFinder™ COVID-19 Plus RealAmp Kit™, the Company’s ability to capitalize on new commercial and military opportunities, 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, 2019 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,
2020
December 31,
2019
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
16,112,907
$
1,625,671
Accounts receivable, net
1,584,252
1,101,185
Contract assets
11,830
106,015
Prepaid expenses and other current assets
277,034
73,938
Total current assets
17,986,023
2,906,809
Property, plant and equipment, net
9,899
11,747
Goodwill
1,223,520
1,223,520
Long-term note receivable
661,096
—
Intangible assets, net
2,226,244
2,298,805
Deferred contract costs, net
173,337
193,730
Total Assets
$
22,280,119
$
6,634,611
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses
$
1,863,384
$
2,105,505
Contract liabilities
148,851
168,957
Total current liabilities
2,012,235
2,274,462
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; 8,596,189 issued and outstanding as of June 30, 2020 and 1,157,890 issued and outstanding as of December 31, 2019
85,962
11,579
Additional paid-in capital
39,351,139
21,932,387
Accumulated deficit
(19,169,217
)
(17,583,817
)
Total stockholders’ equity
20,267,884
4,360,149
Total Liabilities and Stockholders’ Equity
$
22,280,119
$
6,634,611
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,
2020
2019
2020
2019
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Revenue:
Construction services
$
534,526
$
675,170
$
623,867
$
2,333,244
Engineering services
94,423
52,738
203,838
129,788
Total
628,949
727,908
827,705
2,463,032
Cost of revenue:
Construction services
193,208
435,671
265,119
1,594,900
Engineering services
61,508
24,919
142,372
56,709
Total
254,716
460,590
407,491
1,651,609
Gross profit
374,233
267,318
420,214
811,423
Operating expenses:
Payroll and related expenses
392,338
645,627
664,146
1,284,177
General and administrative expenses
766,750
506,664
1,258,064
839,664
Marketing and business development expense
30,899
84,216
63,237
131,575
Pre-project expenses
25,000
2,520
25,000
18,451
Total
1,214,987
1,239,027
2,010,447
2,273,867
Operating loss
(840,754
)
(971,709
)
(1,590,233
)
(1,462,444
)
Other income (expense):
Interest expense
(3,452
)
—
(6,263
)
—
Interest income
6,233
—
11,096
—
Total
2,781
—
4,833
—
Loss before income taxes
(837,973
)
(971,709
)
(1,585,400
)
(1,462,444
)
Income tax expense
—
—
—
—
Net loss
$
(837,973
)
$
(971,709
)
$
(1,585,400
)
$
(1,462,444
)
Net loss per share - basic and diluted:
Basic and diluted
$
(0.16
)
$
(4.02
)
$
(0.48
)
$
(6.43
)
Weighted average shares outstanding:
Basic and diluted
5,369,132
241,881
3,278,913
227,602
SG BLOCKS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)
$0.01 Par Value
Common Stock
Additional
Paid-in
Accumulated
Total
Stockholders’
Shares
AmountCapital
Deficit
Equity
Balance at March 31, 2020
1,170,524
$
11,705
$
21,970,903
$
(18,331,244
)
$
3,651,364
Stock-based compensation
—
—
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
Issuance of common stock, net of issuance costs
7,340,000
73,400
17,045,080
—
17,118,480
Net loss
—
—
—
(837,973
)
(837,973
)
Balance at June 30, 2020
8,596,189
$
85,962
$
39,351,139
$
(19,169,217
)
$
20,267,884
Balance at December 31, 2019
1,157,890
$
11,579
$
21,932,387
$
(17,583,817
)
$
4,360,149
Stock-based compensation
—
—
168,514
—
168,514
Conversion of restricted stock units to common stock
24,672
246
(246
)
—
—
Reverse stock split settlement
(38
)
—
(122
)
—
(122
)
Conversion of debt exchange to common stock
73,665
737
205,526
—
206,263
Issuance of common stock, net of issuance costs
7,340,000
73,400
17,045,080
—
17,118,480
Net loss
—
—
—
(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
$0.01 Par Value
Common Stock
Additional
Paid-in
Accumulated
Total
Stockholders’
Shares
Amount
Capital
Deficit
Equity
Balance at March 31, 2019
213,002
$
2,130
$
17,958,022
$
(11,154,012
)
$
6,806,140
Stock-based compensation
—
—
231,182
—
231,182
Issuance of common stock, net of issuance costs
42,388
424
552,285
—
552,709
Net loss
—
—
—
(971,709
)
(971,709
)
Balance at June 30, 2019
255,390
$
2,554
$
18,741,489
$
(12,125,721
)
$
6,618,322
Balance at December 31, 2018
213,002
$
2,130
$
17,741,214
$
(10,663,277
)
$
7,080,067
Stock-based compensation
—
—
447,990
—
447,990
Issuance of common stock, net of issuance costs
42,388
424
552,285
—
552,709
Net loss
—
—
—
(1,462,444
)
(1,462,444
)
Balance at June 30, 2019
255,390
$
2,554
$
18,741,489
$
(12,125,721
)
$
6,618,322
SG BLOCKS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2020
For the Six Months Ended June 30, 2019
(Unaudited)
(Unaudited)
Cash flows from operating activities:
Net loss
$
(1,585,400
)
$
(1,462,444
)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense
1,848
6,301
Amortization of intangible assets
72,561
72,562
Amortization of deferred license costs
20,393
—
Bad debt expense (benefit)
—
(54,000
)
Interest income on long-term note receivable
(11,096
)
—
Stock-based compensation
168,514
339,361
Changes in operating assets and liabilities:
Accounts receivable
(483,067
)
351,820
Contract assets
94,185
239,524
Prepaid expenses and other current assets
(203,096
)
756,393
Accounts payable and accrued expenses
(235,858
)
(846,261
)
Contract liabilities
(20,106
)
(1,150,458
)
Net cash used in operating activities
(2,181,122
)
(1,747,202
)
Cash flows provided by investing activities:
Advances in note receivable
(650,000
)
—
Net cash used in investing activities
(650,000
)
—
Cash flows from financing activities:
Proceeds from public stock offering, net of issuance costs
17,118,480
552,709
Proceeds from long-term note payable
200,000
—
Settlement of common stock from reverse stock split
(122
)
—
Net cash provided by financing activities
17,318,358
552,709
Net increase (decrease) in cash and cash equivalents
14,487,236
(1,194,493
)
Cash and cash equivalents - beginning of period
1,625,671
1,368,395
Cash and cash equivalents - end of period
$
16,112,907
$
173,902
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
—
Non-cash conversion of accrued salary to restricted stock units to common stock
—
108,629
Total non-cash operating activities
$
206,263
$
108,629
View source version on businesswire.com: https://www.businesswire.com/news/home/20200813005708/en/
Media Rubenstein Public Relations Christina Levin Account Director 212-805-3029 clevin@rubensteinpr.com
or
James Carbonara Hayden IR (646) 755-7412 james@haydenir.com
Brett Maas Hayden IR (646) 536-7331 brett@haydenir.com
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