Safe & Green Holdings Corp.

Good day, and welcome to S.G. Block's second quarter 2021 earnings conference call and webcast. Today's conference call is being recorded. At this time, I would like to turn the call over to Stephen Sweat of Investor Relations. Thank you. You may begin.

Good afternoon. Thank you all for joining us for our second quarter 2021 earnings call. With me today are Paul Galvin, Chairman and Chief Executive Officer, and Gerald Sheeran, Acting Chief Financial Officer of S.G. Block's. The press release detailing our results was issued this afternoon just after the market closed and is available on the company's website at www.sgblocks.com. Before I turn the call over to Paul, please remember that certain statements made during this presentation are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts contained in this presentation, including statements regarding the company's future operations and financial position, business strategy, and plans and objectives of management for future operations are forward-looking statements. In some cases, forward-looking statements can be identified by terminologies such as believes, may, estimates, continue, anticipates, intends, should, plan, expects, predict, potential, or the negative of these terms or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, result of operations, business strategy, and financial needs. These forward-looking statements are subject to a number of risks and uncertainties and assumptions described, including those set forth in our filings with the SEC, which are available on our website at www.sgblocks.com. You should not rely upon forward-looking statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur Finally, this conference call is being webcast. The webcast is available in the investor relations section of our website. Now I'll turn the call over to Paul.

Thank you, Steve. SG Blocks achieved yet another record quarter in revenue, building upon our record first quarter and setting us up for future growth. Our residential vertical, which we formed in February of this year, is already engaged in five products to produce a total of up to 1,752 much needed housing units. We have continued to build out our manufacturing capacity to meet the substantial demand these internally owned projects will generate. And in our medical testing and services vertical, we completed three deployments in the second quarter and continue to explore ways to leverage our rapidly deployable modular laboratories to serve health needs as COVID remains a lingering presence. These activities contributed to a record $11.9 million in revenue for the quarter and 21 million year to date. We expect the company to achieve cash flow positive in the fourth quarter of this year. This year has been a transformative one for our organization. We have the momentum, capital, and the team in place to sustain and build upon these achievements, and we believe our unique multi-vertical platform will create significant value for our shareholders. We thank our staff, consultants, attorneys, partners, and board for the focused effort. Let me now discuss our recent activity in each vertical. Medical testing and services. In our medical testing and services vertical, we completed three new COVID testing site deployments in the second quarter. In May, we partnered with Stone Clinical Laboratories to bring COVID testing to Miami South Beach, first as a part of the Food Network's annual Wine and Food Festival, and then as a part of the Air and Sea Show and Music Explosion event. Also in May, we again partnered with the National Pain Centers to provide a COVID testing unit to the Robbins Park District of Robbins, Illinois, bringing testing access to the communities of the south suburbs of Chicago. Now, with the rise of the COVID Delta variant, we are exploring additional ways to provide our innovative structure, labs, and testing capabilities deployable at key locations for much needed point of care access to healthcare. Our iconic DTAC lab has proven to be highly functional and deployable as a cost-effective solution to solve local health needs. For the second quarter, our medical testing and services revenue totaled 9.8 million. While our focus for the past year has been on providing COVID testing, our goals in the medical vertical extend much further Our intention is to deploy a fleet of medical and testing treatment modules offering array of best-in-class diagnostic testing and healthcare delivery for cancer, diabetes, STDs, UTIs, and drug testing, to name a few. It is our total belief that the future of healthcare solutions is local, nimble, and point-of-care based, and SGBlox modular solutions are ideally suited to those characteristics. We are currently exploring multiple sites for our future deployments. Manufacturing. In our manufacturing vertical, we continue to build out our factory capacity to achieve our goal of no less than 15% margin on future manufacturing projects. We are currently analyzing multiple facilities and structures to expand our much-needed manufacturing capacity so that we can meet the needs of both our internal development projects and the high-end commercial contracts we execute. Our manufacturing revenue totaled $2.1 million for the second quarter. Going forward, we expect to grow our manufacturing revenues as we commence additional projects from our residential vertical where we'll be responsible for fabricating and shipment of apartment units. As of quarter end, We were under contract for 14 manufacturing projects representing 21 million in potential revenues over the course of two years. We continue to do the challenging work of delivering the legacy projects inherited from our acquisition late last year. These projects have been impacted by multiple COVID outbreaks in our facility as well as throughout the supply chain. These legacy projects were wood modular and as such were negatively impacted by the spiking lumber prices. We are happy to report that our recent announcement regarding our at-go project will be the first of many projects generated by SG Blocks to go through the factory. We anticipate SG Echo to be cash flow breakeven in Q1 2022. Residential. Now turning to our residential and development activities. In the second quarter, We rapidly scaled our subsidiary, SGB DevCorp, adding three new projects in the quarter, as well as a groundbreaking 187-unit townhouse community known as Monticello Muse. SGB DevCorp is the driving force for our company to control its destiny. One, keeping our manufacturing facility near 100% capacity, providing steady and visible flow of manufacturing income. Two, driving project fees. three, providing the opportunity to earn end-to-end project revenue, and four, providing potential profit sharing from asset sales and lease income. In May, we completed the acquisition of a 50-plus acre land site on Lake Travis in Austin for $3.5 million for the development of our previously announced Lago Vista project. Lago Vista will contain up to 225 condominium units as well as amenities, including a community center, marina, and health club. We expect to begin development in the second quarter of 2022 with an anticipated completion date in the fourth quarter of 2023. Units will be constructed at SG Block factories. Our goal is to capture approximately $25 million in manufacturing revenue over the life of this project. and at least $5 million from our ownership interest. After quarter end in July, we issued a real estate lien note on the Lago Vista property in order to return capital after our opportunistic investment. We will continue to explore similar financing arrangements that allow us to most accretively deploy our capital into projects while still maintaining low leverage. In June, We acquired a 50% membership interest in Norman Berry Village to develop and build 138-unit, 125,000-square-foot affordable housing community in East Point, Georgia, near Atlanta. Our committed capital contribution for this project is $600,000. SG Blocks has the contractual right for all of the modular construction in this project, which we anticipate to be in the $15 million to $20 million range. We will also participate in project development fees and asset ownership. In June, the groundbreaking occurred on Monticello Muse, the townhouse development located in the Catskills. The project will consist of 187 townhomes, along with amenities, including a clubhouse, gym, and outdoor green spaces. The anticipated completion date for phase one is Q4, 2021. We anticipate the project to be fully completed during Q2, 2023. SGBlox has 700,000 of invested capital in this project. Note, this project was previously subject to our licensing agreement. Our largest project to date was announced in June. We acquired a non-dilutable 10% interest in JDI Cumberland Inlet LLC, a development venture in St. Mary's, Georgia for a total investment of $3 million. The Cumberland site is enormous, sitting on 1,286 acres. Its yields will include 1,280 residential units, an ecotourism program, education facilities, as well as a host of other amenities to create a vital community. We will be producing the housing units at SG Blocks factories with gross potential manufacturing revenues totaling $180 million over the life of the project. The development is expected to commence site work fourth quarter 2021, with initial deliveries expected in the third quarter 2022. One of the key attractions of the Cumberland project is the array of public and private monies available to revitalize communities. It was an incredibly active quarter, and we are pulling all levers to drive value creation while remaining good stewards of capital. I'll now turn the call over to Gerald.